Capitol City Lumber Company

National Labor Relations Board - Board Decisions

Aug 30, 1982

263 N.L.R.B. 784 (N.L.R.B. 1982)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Capitol City Lumber Company and Local No. 580,
International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America.
Case 7-CA- 18029
August 30, 1982
DECISION AND ORDER
BY CHAIRMAN VAN DE WATER AND
MEMBERS JENKINS AND HUNTER
On August 5, 1981, Administrative Law Judge
Marvin Roth issued the attached Decision in this
proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief and, later, filed a
motion to reopen the record.'
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 brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only
to the extent consistent herewith.
Although we agree with the Administrative Law
Judge that Respondent violated Section 8(a)(5) and
(1) of the Act by refusing to make welfare and
pension plan contributions as required by its collec-
tive-bargaining agreement with the Union, we do
so only for the reasons that follow.
The facts of the case are basically undisputed.
In spring of 1979,2 Respondent and the Union
began negotiating for a successor collective-bar-
gaining agreement. The Union was represented by
its recording secretary, James Cooper, and two
shop stewards. Respondent was represented by its
president, James Olson, its vice president, and its
attorney. Soon after negotiations began, Olson left
on a trip to Georgia, where he suffered the first of
a series of heart attacks. Contract negotiations con-
tinued while Olson was hospitalized in Georgia,
and he was kept informed regarding the progress
of the negotiations. On May 7, the unit employees
began an economic strike in support of the Union's
contract demands. On May 25, Respondent and the
Union reached complete agreement on the terms of
a new contract.
Since Respondent was unwilling to enter into a
contract of more than 1 year in duration, the con-
tract was effective from May 1, 1979, through
April 30, 1980, and then "from year to year there-
after unless written notice of desire to cancel or
l We hereby deny Respondent's motion, as the evidence that it seeks
to adduce is not newly discovered or previously unavailable, nor would
it require a different result. See Sec. 102.48(dXl), National Labor Rela-
tions Board Rules and Regulations, Series 8, as amended.
' All dates herein are in 1979, unless otherwise indicated.
263 NLRB No. 102
terminate the agreement is served by either party
upon the other at least sixty (60) days prior to date
of expiration." Cooper explained to Respondent's
negotiators that participation in the Michigan Con-
ference of Teamsters Welfare Fund and the Central
States, Southeast and Southwest Areas Pension
Fund required a 3-year commitment with those
funds. Article XIX of the contract, consequently,
provided for Respondent to make weekly contribu-
tions per employee to the welfare fund as follows:
$25 effective May 1, 1979
$28 effective April 1, 1980
$31 effective April 1, 1981
It similarly provided for Respondent to make
weekly contributions per employee to the pension
fund as follows:
$21 effective May 1, 1979
$24 effective May 1, 1980
$31 effective May 1, 1981
The unit employees ratified the contract and re-
turned to work on May 26. Although Olson had
returned from Georgia on May 14, the Union de-
layed in obtaining his signature on the contract be-
cause he was still very ill. On December 14,
Cooper finally met with Olson in order to sign the
contract. Cooper and Olson each testified that
Olson indicated misgivings about the 3-year com-
mitment to the two funds. Cooper testified that
Olson expressed concern about whether the em-
ployees would realize that Respondent would be
incurring costs in the future regarding fund contri-
butions. Cooper also testified that he drafted a
letter of understanding in response to Olson's con-
cern. Olson, in contrast, testified that he could not
recall ever indicating to Cooper that he was inter-
ested in informing the employees of the costs of the
fund contributions. Olson maintained that he was
concerned instead about a 3-year commitment in a
contract which he thought would be for only 1
year. He further testified that he believed that the
letter of understanding "clarified the situation."
The Administrative Law Judge credited Cooper's
testimony over that of Olson concerning what tran-
spired during their conversation. We have exam-
ined the record and find that his credibility resolu-
tions are supported by a preponderance of the evi-
dence. Standard Dry Wall Products, Inc., 91 NLRB
544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951).
The letter of understanding, prepared by Cooper,
read as follows:
In the May 1, 1979 contract negotiations in
order to remain with the Michigan Conference
of Teamsters Welfare Fund UE Plan, and Cen-
tral States Southeast and Southwest Areas
784
CAPITOL CITY LUMBER COMPANY
Pension Plan, a thirty-six (36) month commit-
ment was required due to plan regulations.
The money package negotiated was sixty-
seven and one half cents (67-1/2) per hour
providing forty-five cents (45¢) per hour ap-
plied to wages and the remaining twenty-two
and one half cents (22-1/2) per hour applied as
contributions to maintain the Health and Wel-
fare and Pension Plans from May 1, 1979
through April 30, 1980.
In order to maintain the Health and Welfare
and Pension plans from May 1, 1980 it will be
necessary to deduct the costs from the money
package negotiated in future negotiations.
On December 28, Cooper and Olson signed the
letter of understanding, the contract, and the agree-
ments for participation in the two funds. The fol-
lowing was typed onto each participation agree-
ment: "The letter of understanding between Cap-
itol City Lumber Company and Teamsters Chauf-
feurs of Local Union No. 580 dated December 14,
1979 (attached) shall become a part of this agree-
ment."
Respondent apparently contributed the proper
amounts to each fund, pursuant to the first step of
article XIX and the fund participation agreements,
for the period from May 1, 1979, through March
30, 1980. The essence of the dispute in this case in-
volves Respondent's obligation for contributions
after that date.
By letter dated February 29, 1980, the Union
sought to reopen the contract for negotiations. The
Union's notice was untimely, however, since it was
sent less than 60 days prior to the expiration date
of the contract. The Union requested negotiations,
but Respondent refused to waive its rights and con-
sequently there were no negotiations. By its own
terms, therefore, the contract continued in effect
for another year, until May 1, 1981. During this
second year of the contract, however, Respondent
continued to make the same contributions to funds;
i.e., those required by the first step of the contract
and the participation agreements.3 The record indi-
cates that the contract subsequently terminated,
presumably on April 30, 1981. Respondent ceased
making contributions as of that date.
Respondent contends that it fulfilled its obliga-
tion, as set forth in the collective-bargaining agree-
ment, to make welfare fund and pension fund con-
tributions. Respondent maintains that it signed a
collective-bargaining agreement which was effec-
' Actually, Respondent had not paid a portion of the amount that it
owed to the pension fund due to a billing error by that fund. Prior to the
hearing, Respondent and the Union entered into an agreement whereby
Respondent agreed to remit the amount that it owed upon receiving a
correct billing from the fund.
tive for 1 year. It claims that Olson objected to the
3-year commitment contained in article XIX when
he first saw the contract, and that the letter of un-
derstanding was drafted to resolve the "ambiguity"
created by article XIX. Respondent also claims
that article XIX was left unchanged as an accom-
modation to the Union. Consequently, Respondent
argues that the letter of understanding nullifies the
three-step progression of contributions contained in
article XIX and the funds' participation agree-
ments. In particular, Respondent relies upon the
second paragraph of the letter which states that the
total cost of the contract's "money package" to
Respondent is 67-1/2 cents per hour, per employee.
Additionally, Respondent relies upon the last para-
graph of the letter, which states:
In order to maintain the health and welfare,
and pension funds from May 1, 1980, it will be
necessary to deduct the cost from the money
package negotiated in future negotiations.
Since the contract automatically renewed itself for
an additional year when the Union did not file a
timely notice to reopen it, Respondent concludes
that it was obligated to make fund contributions for
that additional year only, and at the same first-step
rate.
We disagree with Respondent's contentions. In
article XIX, Respondent clearly assumed a 3-year
commitment to the funds which survived the expi-
ration of the contract. The evidence indicates that
this commitment was negotiated to meet the re-
quirements of the funds, and, indeed, Respondent
even acknowledges this. The letter of understand-
ing, as part of the contract, must be construed in a
manner that is consistent with the rest of the con-
tract. On its face, the letter does not purport to
nullify article XIX. In fact, the first paragraph of
the letter appears to reiterate article XIX, 4 stating
that:
In the May 1, 1979 contract negotiations in
order to remain with the Michigan Conference
of Teamsters Welfare Fund UE Plan, and Cen-
tral States Southeast and Southwest Areas
Pension Plan, a thirty-six (36) month commit-
ment was required due to plan regulations.
Further, Respondent's reliance upon the other two
paragraphs of the letter is misplaced. These para-
graphs set forth certain hourly per employee costs
to Respondent, and mention that fund contributions
4 We note that the letter and the contract were signed simultaneously.
This too tends to indicate that the first paragraph of the letter affirms the
obligations set forth in art. XIX. Respondent's contentions that the letter
of understanding modifies artn. XIX would be more persuasive if the letter
had been drafted and signed after the parties had entered into the con.
tract.
785
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
will be taken into account in future negotiations.
As indicated by Cooper's credited testimony, the
letter of understanding was drafted in response to
Olson's concern about informing the employees of
the entire cost of the collective-bargaining agree-
ment. This is entirely consistent with the plain
wording of article XIX.
In conclusion, Respondent is contractually obli-
gated to continue contributing to the funds in ac-
cordance with the second and third steps of article
XIX, notwithstanding the expiration of the rest of
the contract, and the letter of understanding reiter-
ates this 36-month obligation. By failing and refus-
ing to make these contributions, Respondent invad-
ed the Union's "statutory right as a collective-bar-
gaining representative of employees in the unit to
bargain about any change in the terms and condi-
tions of employment for such employees" in viola-
tion of Section 8(a)(5) and (1) of the Act. 5
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in com-
merce within the meaning of Section 2(6) and (7)
of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All full-time and regular part-time truck driv-
ers, and yard employees employed by Capitol City
Lumber Company at or out of its facility located at
700 E. Kalamazoo St., Lansing, Michigan, but ex-
cluding all sales employees, office clerical employ-
ees, and casual employees, guards, and supervisors,
as defined in the Act, constitute a unit appropriate
for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.6
4. At all times material herein, the Union has
been and is the exclusive collective-bargaining rep-
resentative of the employees in the unit described
above.
5. By failing and refusing to make welfare and
pension fund contributions as required by its collec-
tive-bargaining agreement with the Union, Re-
spondent has engaged in and is engaging in unfair
labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
B C & C Plywood Corporation, 148 NLRB 414, 415 (1964), affd. 385
U.S. 421 (1967), reversing 351 F.2d 224 (9th Cir. 1965).
Member Hunter finds it unnecessary to address the concerns raised by
the concurrence, since all members agree that there is a violation of the
Act in the instant case.
6 The unit description that appears in the Administrative Law Judge's
Decision is incorrect.
THE REMEDY
Having found that Respondent has engaged in
unfair labor practices, we shall order Respondent
to cease and desist therefrom, and to take certain
affirmative action designed to effectuate the poli-
cies of the Act. We shall order that Respondent
make its employees whole by paying all welfare
and pension fund contributions, as set forth in arti-
cle XIX of the collective-bargaining agreement,
which have not been paid and which would have
been paid absent Respondent's unlawful unilateral
discontinuance of such payments.7 Additionally, in
the event that either fund has canceled coverage,
we shall order Respondent to reimburse the unit
employees, with interest, for any loss of claims and
benefits they may have suffered as a result of such
cancellation. s
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the Respondent,
Capitol City Lumber Company, Lansing, Michi-
gan, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Failing or refusing to make contributions to
the Michigan Conference of Teamsters Welfare
Fund and the Central States Southeast and South-
west Areas Pension Fund for the 3-year period as
set forth in article XIX of its collective-bargaining
agreement with Local No. 580, International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, which contract
covers employees in the following unit:
All full-time and regular part-time truck driv-
ers, and yard employees employed by Capitol
City Lumber Company at or out of its facility
located at 700 E. Kalamazoo St., Lansing,
7 Because the provisions of employee benefit fund agreements are vari-
able and complex, the Board does not provide for interest at a fixed rate
on fund payments due as part of a "make-whole" remedy. We therefore
leave to further proceedings the question of how much interest Respond-
ent must pay into the benefit fund in order to satisfy our "make-whole"
remedy. These additional amounts may be determined, depending upon
the circumstances of each case, by reference to provisions in the docu-
ments governing the fund at issue and, where there are no governing pro-
visions, to evidence of any loss directly attributable to the unlawful
action, which might include the loss of return on investment of the por-
tion of funds withheld, additional administrative costs, etc., but not col-
lateral losses. See Merryweather Optical Company, 240 NLRB 1213, 1216
at fn. 7 (1979).
8 Any and all issues regarding the cancellation of coverage are re-
served to the compliance stage. Any interest which is payable shall be
computed in the manner and amount prescribed in Florida Steel Corpora-
tion, 231 NLRB 651 (1977). See, generally, Isis Plumbing & Heating Ca,
138 NLRB 716 (1962).
Member Jenkins would require any interest payable to employees to be
computed in the manner set forth in his partial dissent in Olympic Medical
Corporation, 250 NLRB 146 (1980).
786
CAPITOL CITY LUMBER COMPANY
Michigan, but excluding all sales employees,
office clerical employees, and casual employ-
ees, guards, and supervisors as defined in the
Act.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of their rights under Section 7 of the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the
Act:
(a) Make the contributions which it failed to
remit to the Michigan Conference of Teamsters
Welfare Fund and the Central States Southeast and
Southwest Areas Pension Fund for the 3-year
period as set forth in article XIX of its collective-
bargaining agreement with Local No. 580, Interna-
tional Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, for the
employees in the above-described unit.
(b) In the event that either fund has canceled
coverage, reimburse the unit employees, with inter-
est, for any loss of claims and benefits they may
have suffered as a result of such cancellation, as set
forth in the section of this Decision entitled "The
Remedy."
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of reimbursement due.
(d) Post at its Lansing, Michigan, place of busi-
ness copies of the attached notice marked "Appen-
dix."9 Copies of said notice, on forms provided by
the Regional Director for Region 7, after being
duly signed by Respondent's 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 ensure that said notices are not altered,
defaced, or covered by any other material.
(e) Notify the Regional Director for Region 7, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
CHAIRMAN VAN DE WATER, concurring:
While I concur, albeit reluctantly, in my col-
leagues' finding that Respondent did make a 3-year
commitment to make payments into health, wel-
9 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 "
fare, and pension funds, I am increasingly con-
cerned that the Board's already overtaxed process-
es are being utilized to interpret and enforce con-
tracts when other forums are available to the par-
ties. Both state and Federal courts are available to
interpret and enforce existing contracts. As long
ago as 1955, the Board took the position in United
Telephone Company of the West and United Utilities
Incorporated, 112 NLRB 779 at 781, that it was not
in the business of interpreting contracts. Some of
the comments in that decision are still relevant
today. In that decision the Board noted (112
NLRB at 781):
The complaint alleges no violation of the
Act other than the one arising out of the par-
ties' conflicting contract interpretations.
Further on, the Board went on to state:
Regarding the question of which party cor-
rectly interpreted the contract, the Board does
not ordinarily exercise its jurisdiction to settle
such conflicts. As the Board has held for many
years with the approval of the courts: ". . . it
will not effectuate the statutory policy . . . for
the Board to assume the role of policing col-
lective contracts between employers and labor
organizations by attempting to decide whether
disputes as to the meaning and administration
of such contracts constitute unfair labor prac-
tices under the Act."2
2 Consolidated Aircraft Corporation, 47 NLRB 694, enfd 141
F.2d 364 (C.A. 9). See also Crown Zellerbach Corporation. 45
NLRB 753.
The Board went on to dismiss the 8(a)(5) allega-
tion noting at page 782 that the "Board is not the
proper forum for parties seeking to remedy an al-
leged breach of contract or to obtain specific en-
forcement of its terms."
Obviously such a policy approach has been seri-
ously eroded in the years since then. In view of the
Board's increasing backlog due in part to inflation
and frozen jurisdictional standards since 1959, 1 be-
lieve it more important for this Agency to prompt-
ly resolve cases involving more serious policy
questions and important representation issues.
Therefore, it is time for this Board to revert to the
principles earlier announced and to decline jurisdic-
tion over cases involving purely contract interpre-
tation unless a serious statutory issue is involved.
787
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Act gives em-
ployees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through repre-
sentatives of their own choice
To engage in activities together for the
purpose of collective bargaining or other
mutual aid or protection
To refrain from the exercise of any or all
such activities.
WE WILL NOT fail or refuse to make contri-
butions to the Michigan Conference of Team-
sters Welfare Fund and the Central States
Southeast and Southwest Areas Pension Fund
for the 3-year period as set forth in article
XIX of our collective-bargaining agreement
with Local No. 580, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, which contract covers
the employees in the following appropriate
unit:
All full-time and regular part-time truck
drivers, and yard employees employed by
Capitol City Lumber Company at or out of
our facility located at 700 E. Kalamazoo St.,
Lansing, Michigan, but excluding all sales
employees, office clerical employees, and
casual employees, guards, and supervisors as
defined in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employ-
ees in the exercise of the rights guaranteed
them in Section 7 of the Act.
WE WILL make the contributions which we
failed to remit to the Michigan Conference of
Teamsters Welfare Fund and the Central
States Southeast and Southwest Areas Pension
Fund for the 3-year period as set forth in arti-
cle XIX of our collective-bargaining agree-
ment with Local No. 580, International Broth-
erhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, for the employ-
ees in the above-mentioned unit.
WE WILL, in the event that either fund has
canceled coverage, reimburse unit employees,
with interest, for any loss of claims and bene-
fits they may have suffered as a result of such
cancellation.
CAPITOL CITY LUMBER COMPANY
DECISION
STATEMENT OF THE CASE
MARVIN ROTH, Administrative Law Judge: This case
was heard in Charlotte, Michigan, on May 12, 1981. The
charge was filed on July 21, 1980, by Local No. 580, In-
ternational Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America (herein called the
Union). The complaint, which issued on August 26, 1980,
and was amended at the hearing, alleges that Capitol
City Lumber Company (herein called Respondent or the
Company) violated Section 8(aXl) and (5) of the Nation-
al Labor Relations Act, as amended. The gravamen of
the complaint is that the Company has allegedly failed
and refused to make welfare and pension fund contribu-
tions as required by its collective-bargaining agreement
with the Union. The Company's answer, as amended,
denies the commission of the alleged unfair labor prac-
tices. All parties were afforded full opportunity to par-
ticipate, to present relevant evidence, to argue orally,
and to file briefs. The General Counsel and the Company
each filed a brief.
Upon the entire record in this case and from my obser-
vation of the demeanor of the witnesses, and having con-
sidered the arguments of counsel and the briefs submitted
by the General Counsel and Respondent, I make the fol-
lowing:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent, a Michigan corporation with its principal
office and yard in Lansing, Michigan, is engaged in the
sale and distribution of lumber and related building prod-
ucts. In the operation of its business, Respondent has
annual gross revenues in excess of S500,000, and annually
purchases goods and materials valued in excess of
$50,000 directly from points outside Michigan. I find, as
Respondent admits, that it is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
1. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning
of Section 2(5) of the Act.
III. THE BARGAINING UNIT INVOLVED
It is undisputed, and I so find, that at all times material
the Union has been and is the exclusive collective-bar-
gaining representative of the employees in the following
appropriate unit:
All full time and regular part time employees em-
ployed by the Company at or out of its facility lo-
cated at 700 E. Kalamazoo Street, Lansing, Michi-
788
CAPITOL CITY LUMBER COMPANY
gan; but excluding all sales, office clerical and
casual employees, guards and supervisors as defined
in the Act.
IV. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background. The 1979 Contract
The issue of whether the Company unlawfully refused
to make fund contributions essentially turns on the mean-
ing of agreements entered into between the Company
and the Union in 1979.
In the spring of 1979 the Company and the Union en-
gaged in negotiations for a new contract covering the
unit employees.' Union Recording Secretary James
Cooper and two employee stewards comprised the
Union's negotiating team. Initially the Company was rep-
resented by its president, James Olson, Vice President
Clarence Hargrave, and attorney Thomas Bengston. An-
other official, Phillips (who was no longer with the
Company at the time of this hearing), also served on the
Company's team. However, after the first or second bar-
gaining session President Olson left on a trip to Georgia
where he soon suffered the first of a series of heart at-
tacks. Olson returned to Lansing on May 14 and re-
sumed his full-time duties as president in July. In the
meantime the remainder of the team continued with the
negotiations. On May 7 the unit employees commenced a
lawful economic strike in support of the Union's de-
mands, and the strike continued until May 26. On May
25 the negotiators reached complete agreement on the
terms of a new contract. The next day (May 26) the em-
ployees voted to ratify the contract and return to work.2
However, the contract was not signed, and the employ-
ees did not receive a wage increase as provided in the
contract. Olson testified that the Company's negotiating
team was not authorized to enter into a binding contract.
However, at one point Olson admitted that "we had ne-
gotiated and agreed upon a one-year contract." Cooper
testified without contradiction that the Union was never
informed that the Company's negotiators lacked authori-
ty to bind the Company. (Cooper and Olson were the
only witnesses presented in this proceeding.) Olson testi-
fied that he did not see the negotiated contract until late
November. His assertion is incredible. Olson admitted
that he was kept informed of the progress of negotiations
and of the strike even when he was hospitalized in Geor-
gia. As indicated, he returned to Lansing 11 days before
agreement was reached, and he was back on the job by
July. I find that the Company and the Union reached
final agreement on a contract on May 25, and that they
anticipated that Olson would sign the contract when he
recovered from his illness. Instead, Olson took advafitage
of the Union's good will and concern over his illness by
delaying his signing of the contract until the onset of
winter, when he knew that the Company could easily
All dates herein are in 1979 unless otherwise indicated.
I Union Secretary Cooper testified that six or seven of seven or eight
unit employees participated in the ratification vote. Company President
Olson testified that there were 11 employees in the unit. Regardless of
the number of employees in the unit, it is undisputed that the employees
voted to ratify the contract. Indeed the evidence fails to indicate that the
parties agreed that employee ratification was a condition of a contract.
withstand a strike. Olson then sought to back away from
the agreed-upon contract.
The agreed-upon contract purported to be effective
from May 1, 1979, through April 30, 1980, and "from
year to year thereafter unless written notice of desire to
cancel or terminate the agreement is served by either
party upon the other at least sixty (60) days prior to date
of expiration." However the contract provided for em-
ployer contributions to the Michigan Conference of
Teamsters Welfare Fund and the Central States South-
east and Southwest Areas Pension Fund (herein, respec-
tively, the welfare fund and the pension fund and collec-
tively funds) in accordance with a time schedule which
ran beyond April 30, 1980. Specifically, the contract (ar-
ticle XIX) required the Company to make contributions
per week per employee as follows:
Welfare Fund (UE
plan)
$25 effective May 1,
1979
$28 effective April 1,
1980
S31 effective April 1,
1981
Pension Fund
$21 effective May 1, 1979
$24 effective May 1, 1981
$31 effective May 1, 1981
Cooper testified that the Company was unwilling to
enter into a contract of more than a 1-year duration.
However, Cooper explained to the Company's negotia-
tors, and specifically to attorney Bengston, that the funds
each required a 3-year package. Therefore the parties ne-
gotiated a 3-year package, and the Company agreed to
participate in both the health and welfare and the pen-
sion plans for 3 years.
Cooper delayed taking action over the Company's fail-
ure to honor its contract out of consideration of Olson's
illness. However, the employees were becoming restive
over their failure to receive a wage increase as provided
in the contract. On December 14 Cooper met with
Olson, who was accompanied by Vice President Har-
grave. Olson expressed concern about the 3-year pack-
age. According to Cooper, Olson wanted a means
whereby in future negotiations he could show the em-
ployees that the welfare and pension plans constituted a
cost to the Company, and should be recognized as part
of the cost of any future negotiated raises. Cooper sug-
gested a letter of understanding, and he undertook to
prepare such a letter. On December 28 Cooper and
Olson signed the letter, the text of which read as follows:
Letter of Understanding between Teamsters Local
Union No. 580 and Capitol City Lumber Company.
In the May 1, 1979 contract negotiations in order to
remain with the Michigan Conference of Teamsters
Welfare Fund UE Plan, and Central States South-
east and Southwest Areas Pension Plan, a thirty-six
(36) month commitment was required due to plan
regulations.
The money package negotiated was sixty-seven and
one-half cents (67-1/2) per hour providing forty-five
cents (45¢) per hour applied to wages and the re-
789
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
maining twenty-two and one-half cents (22-1/2) per
hour applied as contributions to maintain the Health
and Welfare and Pension Plans from May 1, 1979
through April 30, 1980.
In order to maintain the Health and Welfare and
Pension plans from May 1, 1980 it will be necessary
to deduct the cost from the money package negoti-
ated in future negotiations.
At the same time, Cooper and Olson signed the agreed-
upon contract and participation agreements for each
fund, with the insertion of the following proviso in each
document: "Note: The letter of understanding between
[the Company] and [the Union] dated December 14, 1979
(attached) shall become a part of this contract [or agree-
ment]." A copy of the letter of understanding was at-
tached to each of the other documents. In May, the par-
ties did not negotiate a money package as such, and the
original contract did not contain any reference to a
money package. However, the figure of 67-1/2 cents per
hour, as indicated in the letter of understanding, reflected
the combined cost of the negotiated hourly wage in-
crease and the first-year cost of the welfare and pension
plans. Cooper testified that he informed the employees of
the letter of understanding. Thereafter the employees re-
ceived their wage increase as provided in the contract,
retroactive to May 1, 1979.
Company President Olson testified that, when he met
with Cooper, he objected to any second- and third-year
commitment for the welfare and pension plans. Cooper
explained that he could put together a package only on a
3-year basis. According to Olson, he responded that this
was the Union's problem, and he insisted that he did not
want anything more than "the one-year contract we
agreed to." Olson testified that Cooper said he would
check with McKim (the Union's secretary-treasurer), and
thereafter Cooper prepared the letter of understanding.
Olson further testified that he had "no recollection" of
telling Cooper that he wanted to inform the employees
that any negotiated money package would include the
fringe benefits.
I credit Cooper. As indicated Olson was somewhat
equivocal in his denial of the position attributed to him
by Cooper. Additionally, although Cooper was alone
when he met with Olson, the company president was ac-
companied by Vice President Hargrave, who was also a
principal figure in the 1979 contract negotiations. Never-
theless the Company did not present Hargrave as a wit-
ness. The inference is warranted, and I so find, that, had
Hargrave been presented as a witness, his testimony
would have been unfavorable to the Company's interest.
Martin Luther King, Sr., Nursing Center, 231 NLRB 15,
fn. 1 (1977). More fundamentally, Cooper's testimony is
consistent with the language of the letter of understand-
ing, as well as the circumstances of the negotiations. Al-
though Cooper could have lawfully insisted that Olson
sign the contract agreed on in May, he chose not to do
so. Instead he agreed to add the letter of understanding
to the contract. Therefore, regardless of the outcome of
the prior negotiations, the letter became a part of the
contract. See American National Insurance Company, 89
NLRB 185, 187-188 (1950), modified on other grounds
343 U.S. 395 (1952). However, the letter cannot be
viewed in isolation. Rather it must be construed, if possi-
ble, in a manner which is consistent with the rest of the
contract. On its face the letter does not purport to nullify
the 3-year benefits provision spelled out in article XIX of
the contract. Rather, the letter simply purports to relate
to the conduct of "future negotiations." Assuming ar-
guendo, as contended by Olson, that the letter effectively
nullified the second and third steps of the benefit pro-
grams, then such an agreement, if covert, would consti-
tute a fraud upon the funds, because the funds required a
3-year package as a condition for participation in the
funds. If the letter on its face purported to nullify the
second and third steps, or even raised a question in this
regard, then it is unlikely that the funds (which were
given copies of the letter) would have accepted the con-
tract as a basis for unit participation in the funds. How-
ever, they did accept such participation. Therefore it is
evident that all parties, including the funds, interpreted
the contract, including the letter of understanding, as in-
cluding the three-step benefit program. Assuming alter-
natively that the letter of understanding committed the
Company and the Union to a total money package of 67-
1/2 cents per hour for at least 3 years, then this would
mean that the Union, in order to obtain the benefit pro-
gram, impliedly agreed to progressive wage decreases
after April 1, 1980. This is highly unlikely. I find, as indi-
cated by the contract in its entirety, including the letter
of understanding, that the parties agreed to a three-step
benefit package, and further agreed that the cost of such
package would be taken into consideration in future
wage negotiations. "The Board has held that health and
welfare and pension plans which are part of an expired
contract, constitute an aspect of employee wages and a
term and condition of employment which survives the
expiration of the contract." Henry Cauthorne, an Individ-
ual, t/a Cauthorne Trucking, 256 NLRB 721 (1981). A
fortiori, the parties may negotiate such provisions for a
term which extends beyond that of other contract provi-
sions. Cauthorne Trucking supra.
B. The Alleged Refusal To Make Contributions as
Provided in the Contract
In the present proceeding, the parties stipulated that
the Company made contributions to the funds in accord-
ance with the first step of article XIX ($25 per week per
employee to the welfare fund and $21 per week to the
pension fund) through April 30, 1981. Technically the
stipulation is inaccurate. Due to an error in billing by the
pension fund, the Company contributed $14 per week
per employee to that fund. However, prior to the com-
mencement of the hearing the Company and the Union
entered into an agreement (without prejudice to their po-
sitions in this litigation) whereby the Company agreed
that, on receipt of a correct billing, it would increase its
pension fund contribution to $21 per week per employee
for the period from May 1, 1979, to April 30, 1981.
There is no contention in this proceeding that the Com-
pany failed to make the proper contributions for the
period from May 1, 1979, through March 30, 1980.
790
CAPITOL CITY LUMBER COMPANY
In 1980 the Union sent letters to the Company pur-
porting to reopen the contract for negotiations. Howev-
er, the purported 60-day notice was untimely; i.e, it was
sent less than 60 days prior the expiration date of the
contract. The Union requested negotiations, but the
Company stood on its rights and the Union acquiesced in
the Company's position. Therefore by its own terms the
contract continued in effect for an additional year; i.e.,
until May 1, 1981. The Company contends in essence
(br., p. 3) that the contract provided for a money pack-
age of 67-1/2 cents per hour, and therefore it was obli-
gated to continue contributing only the amounts set forth
in the first step of article XIX. For the reasons hereto-
fore discussed, the Company's contention is erroneous.
The Company lawfully refused to reopen the contract
for negotiations. However, by exercising this right, the
Company precluded for another year the "future negoti-
ations" contemplated in the letter of understanding.
Therefore, by operation of the terms of the contract, the
wage rate remained in effect, and the second step of the
welfare and pension plan contributions also became oper-
ative. Indeed the second step of the pension plan became
operative as of April 1, 1980 (1 month prior to the auto-
matic renewal of the contract), and the third step became
operative as of April 1, 1981, 1 month prior to the next
expiration date. Therefore the Company breached its
contract by failing to make the contributions as set forth
in article XIX, at least through April 30, 1981.
No evidence was introduced concerning 1981 negotia-
tions. However, union counsel admitted on the record
that the contract was terminated; i.e., presumably as of
April 30, 1981. Therefore the question is presented as to
whether the Company was obligated to make contribu-
tions to the funds after that date. The pension fund par-
ticipation agreement, signed by Olson and Cooper, con-
tains the following provision:
This Participation Agreement shall continue in full
force and effect during the life of the current col-
lective bargaining agreement between the parties
and during all renewals and extensions thereof; sub-
ject only to increases in the rate of contributions as
required by such renewals or extensions. The obli-
gation to make contributions to the Fund shall be
terminated when and if such contributions are no
longer required by a collective bargaining agree-
ment between the parties.
The welfare fund contribution agreement contains in per-
tinent part the following language:
The parties herein specifically acknowledge and
agree, however, irrespective of contract expiration
dates, if benefits are desired beyond the below des-
ignated dates [scheduled contribution] the then cur-
rent rates for the plan desired will be automatically
billed and must be paid.
As heretofore found, the Company and the Union, in
order to comply with the requirements of the funds, ne-
gotiated and agreed on a 3-year benefit program. There-
fore the Company remained contractually obligated to
continue contributing to the funds in accordance with
the second and third steps of article XIX, notwithstand-
ing the expiration of the contract. In sum, by reasons of
article XIX, the Company's obligation survived and con-
tinued after the termination of the contract. Therefore, as
the Company was "required by a collective-bargaining
agreement" to contribute to both funds for a period of 3
years, the contract met the conditions of section 7 of the
pension participation agreement, as well as the less strin-
gent conditions of the welfare contribution agreement.
Compare Cauthorne, supra.
I find that the Company, by failing and refusing to
make welfare and pension contributions as required by
its contract with the Union, invaded the Union's "statu-
tory right as collective-bargaining representative of em-
ployees in the unit to bargain about any change in the
terms and conditions of employment for such employ-
ees." Therefore the Company violated and is violating
Section 8(aXl) and (5) of the Act. C & C Plywood Corpo-
ration, 148 NLRB 414, 415 (1964), affd. 385 U.S. 421
(1967); see also Cauthorne, supra.4
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. All full-time and regular part-time employees em-
ployed by the Company at or out of its facility located at
700 E. Kalamazoo Street, Lansing, Michigan; but exclud-
ing all sales employees, office clerical employees, casual
employees, guards and supervisors as defined in the Act,
constitute a unit appropriate for collective bargaining
within the meaning of Section 9(b) of the Act.
4. At all times material the Union has been and is the
exclusive collective-bargaining representative of the em-
ployees in the unit described above.
5. By failing and refusing to make welfare and pension
plan contributions as required by its collective-bargaining
contract with the Union, the Company has engaged, and
is engaging, in unfair labor practices within the meaning
of Section 8(a)(1) and (5) of the Act.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
I Company President Olson testified that the third-step pension contri-
bution should be $27 per week per employee instead of S31. His assertion
was unexplained, and is contrary to the express provisions of art. XIX of
the contract and of the participation agreement. I find that the Company
was obligated to make contributions as set forth in art. XIX.
This is not an appropriate case for deferral to contractual grievance
and arbitration. First, no timely grievance was filed, and the Company
has refused to waive its right to object to any grievance on that ground.
See Union Electric Company, 214 NLRB 320, fn. 2 (1974). Second, as the
contract expired on May I, 1981, a substantial portion of this case, con-
sisting of the Company's failure to make contributions after that date,
would not in any event be subject to binding arbitration. See The Hilton-
Davit Chemical Company, Division of Sterling Drug, Inc., 185 NLRB 241
(1970). Whether or not the Company has any obligation beyond April 30.
1982, is a matter which is dependent on factors which were not fully liti-
gated and indeed could not be fully litigated in the present proceeding.
791
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
THE REMEDY
Having found that the Company has committed viola-
tions of Section 8(aXl) and (5) of the Act, I shall recom-
mend that it be required to cease and desist therefrom
and from like or related unlawful conduct, and to take
certain affirmative action designed to effectuate the poli-
cies of the Act. I shall specifically recommend that the
Company be ordered to make contributions to the wel-
fare and pension funds in accordance with the 3-year
schedule set forth in article XIX of the expired contract,
and to reimburse the funds for its failure to do so. The
welfare fund contribution agreement provides for em-
ployer liability "for the liquidated damages set forth in
the Trust Agreement" in the event of employer delin-
quency. However, the trust agreement is not in evidence
in this proceeding. The pension participation agreement
provides only for cancellation of the agreement and ter-
mination of any obligation of the trustees in the event of
persistent delinquencies. In accordance with Board
policy, I shall reserve to the compliance stage of this
proceeding the question of whether the Company should
be directed to pay interest or alternative additional con-
tributions to the Funds. Cauthorne, supra. In the event
that either fund has canceled unit coverage, I shall rec-
ommend that the Company be ordered to reimburse the
employees, with interest, for any loss of claims and bene-
fits as a result of such cancellation, unless such cancella-
tion was caused by reasons other than the conduct herein
found unlawful.5
s Therefore it is unnecessary for me to pass upon the Company's post-
hearing proffer of the purported letter which I have designated Resp.
Exh. I. The questions of whether and if so when and why coverage was
canceled are reserved to the compliance stage. Interest as provided in the
recommended Order herein shall be computed in the manner and amount
prescribed in Florida Steel Corporation, 231 NLRB 651 (1977). See, gener-
ally, Isis Plumbing & Heating Co., 138 NLRB 716, 717-721 (1962). As-
suming that the letter (Resp. Exh. 1) is authentic. I find that such letter
does not constitute an admission on the part of the Union, because the
Company has failed to prove that the person signing the letter was an
agent of the Union acting on its behalf.
792