Brown City Casting Co. d/b/a Yale Industries

National Labor Relations Board - Board Decisions

Oct 28, 1997

324 N.L.R.B. 848 (N.L.R.B. 1997)

848
324 NLRB No. 137
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 In the absence of exceptions, we pro forma adopt the hearing of-
ficer’s recommendation to overrule the Petitioner’s Objection 2. Al-
though the Petitioner does not disagree with the hearing officer’s ul-
timate recommendations pertaining to its Objection 1, it filed excep-
tions to ‘‘preserve the record, point out additional grounds to support
the ultimate conclusion, and provide its position concerning the legal
and factual issues involved’’ in the event that the Employer excepted
to the hearing officer’s report. Because we agree with the hearing
officer to set aside the election on the basis of the Petitioner’s Ob-
jection 1, we find it unnecessary to pass on the Petitioner’s excep-
tions.
2 However, we do not rely on the hearing officer’s analysis to the
extent that he compared the ‘‘actual and intrinsic value of the elec-
tion’’ to the Employer’s monthly insurance cost savings and charac-
terized the Employer’s actions as ‘‘penny-wise and pound foolish.’’
3 All dates are in 1997 unless otherwise indicated.
4 In the past, the Employer has made changes in its employees’
insurance benefits annually or semiannually in the month of March.
In addition, the Employer’s arrangement with its current health in-
surance provider was due to expire March 1, but the Employer could
continue that plan thereafter on a monthly basis.
5 By letter dated February 27, the employees received notice that
the Employer’s ‘‘target date for implementation of this new [insur-
ance] program [was] April 1, 1997.’’ However, Kenny, an Employer
witness, testified that she was first made aware of the April 1 imple-
mentation date at the March 5 open house itself. Thus, as more fully
described infra, the arrangements for the open house, including the
selection of the March 5 date were made by Kenny on behalf of the
Employer without any connection to an April 1 implementation date
for the new plan. In view of our disposition of the case, we find
it unnecessary to pass on whether the implementation was acceler-
ated from May 1 to April 1 as argued by the Petitioner.
6 So far as the record shows, open houses to which family mem-
bers were invited had been held only at Christmas and on the single
occasion of the Employer’s move from Brown City to the plant at
Yale. Kenny’s testimony also reveals that although Vincam usually
conducts benefits orientation meetings for the contracting employer’s
employees, an open house was a new format for her and Vincam
and was the Employer’s idea.
Brown City Casting Company d/b/a Yale Industries
and Local 339, International Brotherhood of
Teamsters, AFL–CIO, Petitioner. Case 7–RC–
21004
October 28, 1997
DECISION AND DIRECTION OF SECOND
ELECTION
BY CHAIRMAN GOULD AND MEMBERS FOX AND
HIGGINS
The National Labor Relations Board has considered
objections regarding an election held March 7, 1997,
and the hearing officer’s report recommending disposi-
tion of them (pertinent parts are attached as an appen-
dix). The election was conducted pursuant to a Stipu-
lated Election Agreement. The tally of ballots showed
43 for and 58 against the Petitioner with 5 challenged
ballots, an insufficient number to affect the results.
The Board has reviewed the record in light of the
exceptions1 and briefs and has adopted the hearing of-
ficer’s findings2 and recommendations, and finds that
the election must be set aside and a new election held.
In Objection 1, the Petitioner alleged, inter alia, that
at an open house pizza party held at a local bowling
alley on March 5, 1997,3 the Employer engaged in ob-
jectionable conduct when it announced changes in em-
ployees’ health insurance benefits just 2 days before
the scheduled March 7 election. The Employer argues
that the announcement at the open house was consist-
ent with its past practice and was the culmination of
events that preceded the filing of the petition on Janu-
ary 27. The Employer asserts that the timing of its an-
nouncement had nothing to do with the upcoming elec-
tion. In this regard, according to the Employer, its de-
cision to begin implementation of the new health in-
surance plan on April 1 required that the announce-
ment be made before the election. The hearing officer
found, however, that the Employer failed to rebut the
inference that the announcement of improved insurance
benefits, which took place practically on the eve of the
election, was objectionable. For the reasons set forth
below, we agree with the hearing officer.
In mid-December 1996, the Employer contracted
with Vincam Human Resources to provide human re-
source management, benefits, and other services for its
employees at its Yale, Michigan facility. Elaine Kenny,
a Vincam representative, conducted orientation meet-
ings in December 1996 in the Employer’s lunchroom
with employees during their break periods or at other
times designated by their supervisors. At that time, em-
ployees were required to fill out various paperwork for
Vincam and were notified about changes in their bene-
fits. Regarding health insurance, Kenny told employees
that these benefits were still under negotiation and that
she would speak to them again when additional infor-
mation became available. Kenny did not indicate any
date for her future discussion.
Initially, the Employer wanted to discontinue its ex-
isting health insurance plan and have Vincam’s health
insurance plan take effect March 1.4 However, the Em-
ployer was not satisfied with the insurance plan pro-
posed by Vincam in December 1996. As a result, dur-
ing January and February, Vincam submitted several
other proposals for the Employer to review. Finally, on
February 25, the Employer concluded its negotiations
with Vincam and decided on the Blue Cross/Blue
Shield insurance plan known as Community Blue PPO.
This plan provided improved benefits to employees at
lower costs, including a monthly premium savings of
$4000 to $5000 for the Employer. Apparently, the Em-
ployer then targeted April 1 for the implementation of
these new insurance benefits.5 The plan was imple-
mented on April 1.
On February 25, the Employer decided to have an
open house for employees and their families on March
5 at the nearby bowling alley to announce the new,
improved health insurance benefits and to begin the
enrollment process. This was the first time that the
Employer had ever held a party of this kind for em-
ployees to announce new benefits.6 The arrangements
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849YALE INDUSTRIES
3 All dates hereafter are in 1997, unless otherwise noted.
for the open house, including the selection of the
March 5 date, were made by Kenny. The open house
lasted 4 hours, from 1 to 5 p.m. Employee attendance
was not mandatory, and employees could stay as long
or as short a time as they wanted. Refreshments in-
cluding pizza and soda pop were served, and a display
table was set up with pamphlets and handouts pertain-
ing to other employee benefits currently provided by
the Employer.
As they entered the bowling alley that afternoon,
employees could pick up new Blue Cross enrollment
applications and benefit packets that contained infor-
mation about the new insurance plan. Representatives
from the Employer, Vincam, and Blue Cross/Blue
Shield were present to answer employee questions and
help them fill out the new enrollment applications. Out
of the approximately 110 employees eligible for the
new insurance, 85 employees turned in their enroll-
ment applications that day. Twenty-five employees did
not attend the March 5 open house. By March 10, the
Employer supplied to Vincam the needed enrollment
information from 20 of those employees. Similar infor-
mation from the remaining five employees was not
submitted to Vincam until March 15.
Before February 25, there was no time schedule or
format concerning when or how the Employer would
tell employees about the new Blue Cross insurance
plan and distribute enrollment applications to them.
The Employer explains that the targeted April 1 imple-
mentation date for the new health insurance plan dic-
tated that its announcement of the new plan had to be
made to the employees prior to the election. The Em-
ployer also explains that the open house format was
chosen so that the employees could include their fam-
ily and spouses and so that it could give to, and get
more information from, the employees. However, the
record does not support these explanations.
Kenny, who was principally involved in the plan-
ning and organization of the March 5 event for the
Employer, repeatedly testified that the March 5 date
for the benefits orientation meeting was chosen be-
cause Vincam internally required at least 10 days to 2
weeks to get the necessary information to Blue Cross
which, in turn, required an additional 45 days to proc-
ess new enrollment applications from employees. Like-
wise, the Employer’s office manager, Laurie Hopton,
testified that March 5 was selected because of the Blue
Cross processing requirements. Yet, Kenny further tes-
tified that March 5 was chosen to meet a May 1 imple-
mentation date and the selection was not at all con-
nected to an April 1 implementation date. Kenny also
testified that March 5 was chosen simply because she
and the several others who would participate at the
open house were available that day and that date fit
their personal schedules.
In addition to these inconsistencies, missing from
Kenny’s testimony is any suggestion that Blue Cross
had requested an announcement by the Employer be-
fore the March 7 election so that it could meet an
April 1 implementation date. Furthermore, none of the
Employer’s witnesses adequately explained why the
April 1 implementation date could not have been
achieved if the announcement to employees had come
after the election. If Kenny’s testimony about the num-
ber of processing days required by Blue Cross and
Vincam were to be believed, then even the March 5
announcement date would have been too late to meet
the purported required processing periods of 10 to 14
days for Vincam and 45 days for Blue Cross. How-
ever, Kenny’s testimony that the enrollment applica-
tions could not have been processed by April 1 had
Vincam waited until after the election to get the appli-
cations is not supported by other evidence in the
record, which shows that 25 applications submitted by
the Employer to Vincam after the election were in fact
processed by April 1. We also note that, because the
March 5 meeting was not designated as mandatory, the
Employer was making no effort to ensure that all the
employees would submit their applications on that date
rather than later.
Based on the record and in light of the above, we
find that the Employer had discretion in choosing
when to announce the new Blue Cross insurance plan
to employees. We further find that its exercise of that
discretion, i.e., its choice of the date and format for the
health insurance announcement and signup, was made
in February, after the representation petition had been
filed, and that the decision to hold an open house for
the benefits orientation meeting 2 days before the elec-
tion was calculated to affect the outcome of that elec-
tion. See Speco Corp., 298 NLRB 439, 443 (1990).
Accordingly, we adopt the hearing officer’s rec-
ommendation to set aside the election based on the Pe-
titioner’s Objection 1.
[Direction of Second Election omitted from publica-
tion.]
APPENDIX
HEARING OFFICER’S REPORT AND
RECOMMENDATIONS ON OBJECTIONS TO
CONDUCT AFFECTING THE RESULTS OF THE
ELECTION
Objection 1
The Petitioner asserts that on March 5, 1997,3 just 2 days
prior to the election, the Employer conducted a meeting with
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850 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 Hereafter referred to as Vincam.
5 Hereafter referred to as the bowling alley. 6 Hereafter referred to as Blue Cross.
bargaining unit employees in which literature was distributed
concerning a new and better health insurance plan that was
being made available to these employees. As a result, accord-
ing to the Petitioner, the employees’ ability to make a free
and uncoerced choice was negatively impacted and the re-
sults of the election were influenced substantially in favor of
‘‘No’’ (anti-Petitioner) votes. The Employer denies that the
meeting on March 5 affected the results of the election and
asserts this meeting was in the works for several months
prior to the election, including more than a month before the
petition in the instant case was filed on January 27. The Em-
ployer also argues that the meeting had to be held at that
time in order to enable the employees interested in the new
coverage to obtain it in a timely manner without an addi-
tional delay in the changeover causing the Employer added
and unnecessary expense.
The Petitioner presented two witnesses in support of this
objection, General Manager of Administration Ken Hopton
and employee Anthony Becker. (Hopton was called by the
Petitioner pursuant to its subpoena to the Employer’s Custo-
dian of Records.) The Employer presented as witnesses em-
ployee Barb Peyerk, Office Manager Laurie Hopton, and two
representatives of Vincam Human Resources, Inc., Ken
Graham and Elaine Kenny.
The testimony of the witnesses, in particular, Ken Hopton,
Laurie Hopton, Graham, and Kenny, as well as the Employ-
er’s Exhibit 1 and Joint Exhibit 1, establishes that in Decem-
ber 1996, the Employer and Vincam Human Resources,
Inc.,4 executed a contract whereby Vincam was to provide
human resource management, benefits, and other services for
the employees of the Employer. In fulfillment of the contract,
Kenny conducted employee orientations in the lunchroom at
the Employer’s Yale facility on December 16–18, 1996.
Kenny testified that, during those orientations, she informed
the employees about the benefits they would receive, but
noted that the health insurance was still being negotiated and,
the employees were told, she would speak with them again
when additional information on it became available.
Ken Hopton testified that it was normal for the Employer
to make changes in health insurance coverage in March on
an annual or semiannual basis, with the last such change
prior to 1997 being in March 1995.
There was undisputed testimony that a benefits orientation
meeting was held for employees and their family members
on March 5, from approximately 1 to approximately 5 p.m.,
at the Big K Lanes Bowling Center,5 which is next door to
the Yale facility. The Employer provided free pizza and soda
pop to the persons in attendance. Kenny testified that she se-
lected the date, times, and location as well as recommended
that refreshments be served.
Kenny testified that, in scheduling the March 5 meeting,
she acted in accordance with the wishes of Vincam sales-
person Ken Graham, who sought to fulfill the agreement of
Vincam to provide lower costing but higher quality health in-
surance as soon as possible. At the same time, though, on
February 25, Kenny herself set the date of March 5 for the
benefits orientation meeting. This, she testified, was done
based on her coordination of schedules with Sharon Stefan
of Vincam, Blue Cross/Blue Shield Representative William
Revelry, Laurie Hopton, and the bowling alley. According to
Kenny, it had nothing whatsoever to do with the pending
election in the instant case.
Indeed, the testimony of Kenny, Ken Graham, Ken
Hopton, and Laurie Hopton was consistent insofar as the lack
of consideration given by the Employer and Vincam to the
election on March 7 when the benefits orientation meeting
was scheduled and conducted. That is, the testimony of these
employer witnesses established that those involved in making
the decision to hold the benefits orientation meeting on
March 5 did not take into account the close proximity to the
election.
According to Kenny, the key point for her was that
Vincam and the Employer were trying to get the new Blue
Cross/Blue Shield6 health insurance implemented as soon as
possible. Here, however, a discrepancy appears. On February
25, Kenny learned that the insurance rates had been approved
for the Blue Cross insurance plan (Community Blue PPO)
which was going to be offered to the employees of the Em-
ployer. This lead her to confer with Vincam’s human re-
sources manager (Terri Forman) and benefits administrator
(Barbara Spoeri), both of whom said that, in light of the ben-
efits orientation meeting being set for March 5, the earliest
effective date for the new health insurance would be May 1.
This comported with Kenny’s earlier testimony that experi-
ence had shown it takes 10 days to 2 weeks for Vincam to
process information on an employee’s application for Blue
Cross, and that it then takes 45 days for Blue Cross to proc-
ess the employee’s application. As a result, on February 25,
Kenny prepared documents for the March 5 benefits orienta-
tion with the idea that May 1 would be the effective date of
the implementation of the new health insurance. Yet, just 2
days later, Cecil Konik (the Employer’s general manager-
production) issued a letter to all of the employees of the Em-
ployer (Jt. Exh. 1) announcing the ‘‘Open House’’ was to
take place on March 5 and that the ‘‘target date for imple-
mentation’’ was April 1.
In her testimony, Kenny was not at all clear on why the
date of implementation of health insurance changed, but
thought it was based on Ken Graham’s commitment to the
Employer to have a date of implementation of March 1. She
herself acted pursuant to Graham’s request that the imple-
mentation date be April 1.
Graham himself testified that going back to the signing of
the contract between the Employer and Vincam and even be-
fore that, during discussions between their agents in Novem-
ber 1996, it had been agreed that the implementation was to
be on March 1. However, according to Graham, since Laurie
Hopton was not satisfied with the health care plans Vincam
was offering to the Employer, it was necessary for Vincam
to find additional possible choices. This led to Vincam offer-
ing a Blue Cross Community Blue PPO plan, which proved
to be acceptable to Laurie Hopton and the Employer.
Graham further testified that, due to the decision to take this
plan not being made until February, Vincam and the Em-
ployer then began to think in terms of an April 1 rather than
a March 1 implementation date. This was not finalized until
around February 27, after Vincam had received the new pre-
miums for the Community Blue PPO plan and transmitted
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851YALE INDUSTRIES
them to Laurie Hopton, who approved the premiums and the
plan.
Laurie Hopton’s testimony provided another possible rea-
son for the need to implement the new health insurance plan
on April 1 rather than May 1. According to Hopton, in her
capacity as office manager she is familiar with the health in-
surance premiums paid by the Employer under both the prior
plan (provided by American Medical Securities) and the new
Blue Cross plan (provided through Vincam’s VinCare).
Hopton testified that the new plan costs the Employer $4000
to $5000 less per month than it was previously paying in
premiums. She stated that this amounted to a savings of ap-
proximately 20 percent in Employer-paid premium costs each
month.
In any event, Kenny testified, after Graham requested that
the implementation date be April 1, she made every effort
to insure that the coverage of the Blue Cross Community
Blue PPO plan would become effective for the employees of
the Employer on April 1. Although, according to Kenny’s
earlier testimony, such an early implementation date should
have been impossible, given all of the lead time necessary,
it appears from the testimony of Graham and Ken Hopton
that, as of April 1, the Employer’s employees were enrolled
in the Blue Cross Community Blue PPO plan.
Whatever the reason for establishing the effective date of
coverage for April 1, there is undisputed testimony that on
March 5, the benefits orientation meeting was conducted at
the bowling alley, and that Kenny was the principal speaker.
Also present during all or large portions of the meeting were
Barbara Stefan; William Revelry; ‘‘Elaine’’ (who assisted
Revelry); Laurie Hopton; Ken Hopton; and employees of the
Employer, Barb Peyerk and Pam Bailey (the latter of whom
is the paycheck clerk). Approximately 85 of the 110 employ-
ees eligible to enroll attended some portion of the 4-hour ori-
entation meeting. Some of these employees were accom-
panied by family members. Not only were the employees
given an oral presentation, but they also received a substan-
tial number of documents (as embodied in Jt. Exhs. 2–5),
some of which they completed and submitted with the assist-
ance of the above-noted persons. Both Peyerk and fellow
employee Anthony Becker testified that, as a result of what
they learned at this meeting, they believed the Blue Cross
plan provided better benefits than did their prior American
Medical Securities health insurance plan. Peyerk also testi-
fied that she liked the lower deductibles under the Blue
Cross plan, which resulted in her having more money.
According to Kenny, although a number of employees did
not attend the March 5 meeting, it was nonetheless possible
for Vincam and Blue Cross to process their applications (up
to 25 of them) in a sufficiently expeditious manner so they
could be enrolled in the new health insurance plan on the ef-
fective date of April 1. Kenny testified that, except with re-
spect to about five employees, by March 10, the Employer
supplied to Vincam the needed enrollment information on all
of the employees who did not attend the March 5 meeting.
Enrollment information on the remaining five employees was
submitted to Vincam until as late as March 15.
There was a considerable amount of testimony by Kenny,
Laurie Hopton, Ken Hopton, Barb Peyerk, and Anthony
Becker regarding the various additional benefits (such as
membership in Walt Disney’s Magic Kingdom Club and in
the Universal Studios Florida FAN CLUB) offered by
Vincam during the benefits orientation meeting on March 5.
The Employer maintained a continuing objection to most of
this testimony as not being encompassed within the scope of
the Petitioner’s objections. The Petitioner sought the inclu-
sion of this testimony based on it being inextricably con-
nected with the insurance issue in Objection 1. I find that it
really does not matter whether or not this evidence is consid-
ered in conjunction with the previously related evidence. It
is that previously related evidence which contains the ele-
ments necessary for an informed conclusion to be reached re-
garding whether or not it was objectionable for the Employer
to hold the benefits orientation meeting at which employees
applied for the new health insurance 2 days before the elec-
tion was conducted in the instant case.
An important threshold question to consider is whether or
not those who conducted the benefits orientation meeting on
March 5 were either agents of the Employer or possessed ac-
tual or apparent authority to act on behalf of the Employer
for purposes of enrolling employees in the new health insur-
ance plan. It has been the long established policy and prac-
tice of the National Labor Relations Board to apply the com-
mon law principles of agency, which are set forth in the Re-
statement 2d of Agency. Allegheny Aggregates, Inc., 311
NLRB 1165 (1993); and Dentech Corp., 294 NLRB 924, 926
(1989). This leads to the ‘‘doctrine of apparent authority,’’
whereby ‘‘the principal’s manifestations to a third party sup-
ply a reasonable basis for the third party to believe that the
principal has authorized the alleged agent to do the acts in
question.’’ Allegheny Aggregates. There are two conditions
which must be satisfied before it is deemed that apparent au-
thority has been created: ‘‘(1) there must be some manifesta-
tion by the principal to a third party, and (2) the third party
must believe that the extent of the authority granted to the
agent encompasses the contemplated activity.’’ Service
Emplovees Local 87 (West Bay Maintenance), 291 NLRB 82,
83 (1988).
Aside from anything else, the above-noted February 27 let-
ter by Cecil Konik (Jt. Exh. 1) to the employees of the Em-
ployer is conclusive evidence that both ‘‘the Management’’
of the Employer and the Vincam representatives meet both
of the criteria for having apparent authority to act as agents
of the Employer with respect to the changeover in health in-
surance. Indeed, the following language of Konik’s letter is
ample evidence of this:
On Wednesday, March 5, 1997, there will be an
Open House given by VINCAM and the Management
of Yale Industries to go over the new insurance pro-
gram. It is imperative that all employees enroll at this
time. If you are unable to attend this Open House
please make arrangements with our personnel depart-
ment to enroll as soon as possible as to not interrupt
your health care coverage. Our target date for imple-
mentation of this new program is April 1, 1997. Please
invite your families to attend this open house, as they
will be able to ask questions and get answers to their
insurance needs. . . .
I am sure that you will enjoy the many improve-
ments and superior coverage of this new insurance pro-
gram.
I am looking forward to seeing all of you there.
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852 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Both of the employees in the appropriate bargaining unit who
testified (Barb Peyerk and Anthony Becker) stated they re-
ceived Konik’s February 27 letter and believed that in order
to get the better health insurance plan the employees needed
to attend the March 5 benefits orientation—which was being
conducted by the aforementioned representatives of the Em-
ployer and Vincam (as well as Blue Cross).
In B & D Plastics, 302 NLRB 245 (1991), the Board reit-
erated that, in cases where benefits have been granted or an-
nounced prior to an election, the standard to be used is an
objective one. The Board went on to set forth the standard
to be utilized in determining whether, by an employer grant-
ing a benefit prior to an election, it would tend unlawfully
to influence the outcome of that election. According to the
Board, the factors to be examined include:
(1) the size of the benefit conferred in relation to the
stated purpose for granting it; (2) the number of em-
ployees receiving it; (3) how employees reasonably
would view the purpose of the benefit; and (4) the tim-
ing of the benefit.
The Board then went on to recount that:
In determining whether a grant of benefits is objection-
able, the Board has drawn the inference that benefits
granted during the critical period are coercive. It has,
however, permitted the employer to rebut the inference
by coming forward with an explanation, other than the
pending election, for the timing of the grant or an-
nouncement of such benefits. Id. [citations omitted].
Using the B & D Plastics analysis, I would initially note
that the benefit of a new and rapidly implemented health in-
surance plan was to provide employees with better coverage
at lower premium rates with as little time elapsing as pos-
sible (less than a month from application to enrollment).
Such an improvement in one of the most important benefit
areas is, obviously, quite substantial. Indeed, the seriousness
with which the Employer treated the changeover in insurance
plans is also indicative of the substantiality of the improve-
ment.
Between, approximately, 100 and 110 employees were to
be receiving the new and improved insurance. Thus, all of
the appropriate bargaining unit in the election in the instant
case, with the possible exception of those employees who
chose to opt out of this insurance plan, were to be receiving
the Blue Cross Community Blue PPO plan. Although
‘‘only’’ 85 or so showed up for the benefits orientation meet-
ing, most of the remainder would at least have known that
improvements were being made in the provision of employee
health insurance.
Although the longer term employees may be accustomed
to changes occurring in insurance around March every year
or two, given the late notice they received and the extremely
close proximity of the benefits orientation meeting to the
election as well as the rush to implement the new health in-
surance plan, the employees reasonably would view the pur-
pose of this benefit as being, at least in part, to influence
their vote. The word ‘‘reasonably’’ is the key, as it creates
an objective standard which does not take into account how
individual employees might react to being informed of the
improved health insurance 2 days before the election. When
a perceived substantial improvement is announced regarding
such an important benefit so close to the election and em-
ployees are also told that it will be implemented at breakneck
speed, it cannot help but, to a significant extent, cause em-
ployees to reasonably view the purpose as being to influence
their vote.
Although the timing of the benefit—both as to the orienta-
tion meeting and the implementation of the new insurance—
has already been discussed to some extent, its significance
cannot be overemphasized. The timing of the benefit in rela-
tion to the election has been deemed by the Board to be the
most critical of the four factors. AK Steel Corp., 317 NLRB
260 (1995). Quite obviously, in the instant case, the shortage
of time between the benefits orientation meeting and the
election would leave in the minds of the bargaining unit em-
ployees the well-known—and prohibited—message of the
‘‘fist inside the velvet glove.’’ NLRB v. Exchange Parts Co.,
375 U.S. 405, 409 (1964). That is, with the election just
about to take place, this employer-provided improvement in
health insurance would reinforce the notion that the Em-
ployer is the indispensable ‘‘source of benefit . . . from
which future benefits must flow and which may dry up if it
is not obliged.’’ Id.
Although the above would seem to lead to the conclusion
that the announcement of the improved insurance plan during
the critical period is objectionable, the Employer in the in-
stant case still could rebut this inference with a credible ex-
planation of why it was so necessary to hold the benefits ori-
entation meeting just 2 days before the election. I, however,
find that the Employer has not met its burden.
Although it is possible that no one involved in scheduling
and/or conducting the benefits orientation meeting on March
5 took into account the pendency of the election, the fact is
that at least two of these persons occupied important posi-
tions in the Employer’s hierarchy and were well aware of
what was to take place on March 7. Ken Hopton is not only
the general manager of administration of the Employer, but
also the son of the president of the Employer, William
Hopton. Laurie Hopton is not only Ken’s wife, but also the
office manager. Obviously, had they wished, the Hoptons
could have raised objections to holding the meeting in such
close proximity to the election. The Employer was certainly
not bound to allow its employees to participate in the bene-
fits orientation meeting just 2 days before the election. Yet,
according to the testimony of the Hoptons, they raised no
such objections since they believed it was the only way to
enroll the employees in the new Blue Cross insurance plan
by April 1, and there would have been additional costs (both
financial and in coverage) to the Employer and the employ-
ees had the enrollment been delayed another month longer.
lt is all well and good for the Employer to wish to expedi-
tiously obtain better health insurance coverage for its em-
ployees at a lower cost. But with an election looming, the
Employer acted at its own peril when, on or about February
25, it acquiesced in the scheduling and conduct of the bene-
fits orientation meeting on March 5. According to Laurie
Hopton, the witness who had the most familiarity with the
premium costs, the Employer paid $4000 to $5000 more per
month for health insurance coverage provided through Amer-
ican Medical Securities than it would be paying for coverage
through Blue Cross. Although this is a differential of ap-
proximately 20 percent, that still does not amount to such a
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853YALE INDUSTRIES
significant figure in the scheme of things. The value of the
election—to the employees, the Employer, and the Peti-
tioner—is, of course, incalculable. However, I think I can say
without fear of contradiction that the actual and intrinsic
value of the election must easily dwarf $4000 or $5000.
Thus, holding the benefits orientation meeting 2 days before
the election was truly an example of being ‘‘penny-wise and
pound foolish.’’
Had the benefits orientation meeting been conducted dur-
ing the week of March 10 or 17, it still would have been
very possible to have enrolled the employees in the improved
health insurance plan by May 1. Of course, a majority vote
for the Petitioner in the then-upcoming election would have
imposed a bargaining obligation on the Employer. But that
would have been in the natural course of things, based on
the employees in the bargaining unit selecting the Petitioner
as their bargaining representative. And, by that same token,
these employees could still, if they preferred the Blue Cross
Community Blue PPO plan, make those sentiments known to
the Petitioner, which would fail to take them into account at
its own peril.
The bottom line, again, is that, by acquiescing to the con-
duct of the meeting at which the employees applied for the
new health insurance on March 5, the Employer presented to
the bargaining unit employees the proverbial ‘‘fist inside the
velvet glove.’’ It makes no difference that the changeover in
health insurance and other benefits had been in the works
since November or December 1996. The date of March 5
was not scheduled until February 25, almost 2 weeks after
the Stipulated Election Agreement was approved by the Re-
gional Director, and which scheduled the election for March
7. Once the election was thus scheduled, it became incum-
bent on the Employer to act in a prudent manner and to not
provide the appearance of influencing employees’ votes by
unnecessarily holding a benefits meeting which—a mere 2
days before the election—implicitly sent the message that the
Employer is ‘‘the source of benefits now conferred . . .
which may dry up if it is not obliged.’’ NLRB v. Exchange
Parts Co., supra at 409.
In light of the extremely close proximity to the election of
the meeting at which the employees applied for the improved
health insurance coverage, it is quite likely that 2 days later,
some of the employees were influenced to a significant ex-
tent in the casting of their votes. Out of 106 votes cast, the
Petitioner needed 11 more ‘‘Yes’’ votes from those voters
who were not challenged in order to attain a clear majority.
In view of what both parties agree is the substantial improve-
ment in health insurance benefits, it is quite conceivable that
at least 11 voters were influenced to a significant extent to
vote ‘‘No’’ by the Employer’s ‘‘generosity’’ in granting bet-
ter coverage at a lower cost to them. See, e.g., Sunrise Reha-
bilitation Hospital, 320 NLRB 212, 213 (1995).
Accordingly, based on the above, I recommend that the
Petitioner’s Objection 1 be sustained.
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