Centra, Inc.

National Labor Relations Board - Board Decisions

Aug 19, 1994

314 N.L.R.B. 814 (N.L.R.B. 1994)

814
314 NLRB No. 144
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The name of the Charging Party has been changed to reflect the
new official name of the International Union.
2 The Respondents also filed a motion to reopen the record to con-
sider additional evidence pertaining to Federal district and appellate
court determinations concerning D & S Leasing’s withdrawal liabil-
ity under the Multi-Employer Pension Plan Amendments Act of
1980, 29 U.S.C. § 1381–1461, contending that this evidence is ma-
terial to the issue of the Respondents’ pension fund liability as re-
quired by the relevant collective-bargaining agreements. The General
Counsel filed a memorandum in opposition to the Respondents’ mo-
tion, and the Central States, Southeast and Southwest Areas Pension
and Health and Welfare Funds (Central States Funds) filed a motion
to intervene in order to address the merits of the Respondents’ mo-
tion and the method of calculating interest on delinquent fund con-
tributions. After reviewing the parties’ submissions, we deny the Re-
spondents’ motion on the grounds that it does not present newly dis-
covered evidence. See Holly Farms Corp., 311 NLRB 273, 281
(1993). In this regard, we note that the Federal district court’s deci-
sion, which was summarily affirmed by the Sixth Circuit Court of
Appeals, issued before the compliance hearing closed. For the same
reason, we deny the Respondents’ request that a hearing be held to
determine whether to reopen the record. We also deny Central States
Funds’ motion to intervene.
3 The Respondents have excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188
F.2d 362 (3d Cir. 1951). We have carefully examined the record and
find no basis for reversing the findings.
In fn. 4 of his decision, the judge inadvertently stated that the Re-
spondents commenced operations with the Group B employees as
new hires on June 2, 1991, rather than 1986. We correct the error.
In adopting the judge’s findings that the Respondents are required
to remit payments to the pension and health and welfare funds on
behalf of the unit employees, Member Devaney does not rely on the
judge’s analysis of ‘‘concrete evidence’’ of the employees’ economic
interest in the future of the funds, or on his related finding that the
burden of proof shifted to the Respondents to demonstrate that the
employees have no future interest. See Ron Tirapelli Ford, 304
NLRB 576, 576 at fn. 2 (1991), enf. denied 987 F.2d 433 (7th Cir.
1993).
4 The judge failed to include a recommended Order in his supple-
mental decision. Accordingly, we have set forth an order that con-
forms to the judge’s conclusions, which we have adopted, regarding
the Respondents’ liability to the pension and health and welfare
funds.
Centra Inc., Central Transport, Inc. and Central
Cartage Company and Archer Bailey III and
Teamsters Local Union No. 964, affiliated with
the International Union of Teamsters, AFL–
CIO.1 Cases 8–CA–19212 and 8–CA–19282
August 19, 1994
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS STEPHENS, DEVANEY, AND COHEN
On December 20, 1993, Administrative Law Judge
Robert W. Leiner issued the attached supplemental de-
cision. The Respondents filed exceptions and a sup-
porting brief.2
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and brief and has de-
cided to affirm the judge’s rulings, findings,3 and con-
clusions.4
ORDER
The National Labor Relations Board orders that the
Respondents, Centra Inc., Central Transport, Inc., and
Central Cartage Company, a single employer, Sterling
Heights, Michigan, its officers, agents, successors, and
assigns, shall make whole the Central States, Southeast
and Southwest Areas Pension and Health and Welfare
Funds on behalf of the Group A and Group B employ-
ees by remitting the sums set forth below, plus inter-
est:
Group A Employees
Pension Fund $534,927
Health and Welfare Fund 733,770
Group B Employees
Pension Fund 3,168
Health and Welfare Fund 6,403
Total $1,278,268
Paul C. Lund, Esq., for the General Counsel.
James M. Brogan, Esq. and A. Christopher Young, Esq.
(Harvey, Pennington, Herting & Renneisen, Ltd.), of Phila-
delphia, Pennsylvania, for the Respondent.
SUPPLEMENTAL DECISION
ROBERT W. LEINER, Administrative Law Judge. On Au-
gust 31, 1990, the National Labor Relations Board (the
Board) issued its Decision and Order (299 NLRB 658
(1990)), in substance directing Centra Inc., Central Transport,
Inc., and Central Cartage Company (collectively Respond-
ent), its officers, agents, successors, and assigns, to make
whole 59 employees for any loss of wages and benefits re-
sulting from Respondent’s unfair labor practices in violation
of Section 8(a)(1), (3), and (5) of the National Labor Rela-
tions Act (the Act). On January 17, 1992, the United States
Court of Appeals for the Sixth Circuit enforced the Board’s
Order in its entirety (954 F.2d 366).
On May 6, 1993, the Regional Director for Region 8 of
the National Labor Relations Board issued a compliance
specification and notice of hearing, amended September 2,
1993, as further amended at the hearing, seeking recovery,
inter alia, of backpay for the employees and of defaulted
contributions to union-negotiated pension and health and
welfare funds covering these employees. Respondent filed
timely answers to the above-amended compliance specifica-
tion, admitting various allegations there, denying others, and
asserting its freedom from any obligation, in whole or in
part, to pay any back wages, or pension or health and wel-
fare contributions.
At the hearing held in Cleveland, Ohio, on September 29
and 30, 1993, the parties were represented by counsel, were
given full opportunity to call and examine witnesses, to sub-
mit oral and written evidence, and to argue orally on the
record. At the close of the hearing, the parties waived final
argument and elected to submit posthearing briefs. There-
815CENTRA INC.
1 On December 3, 1992, General Counsel submitted a motion to
strike portions of Respondent’s brief, to correct General Counsel’s
brief, and to receive certain exhibits in evidence. Respondent, on De-
cember 9, submitted a response wherein it requested that General
Counsel’s motion be denied and that certain documents be received
in evidence pursuant to agreements and understandings reached at
the hearing, appearing in the official transcript.
In light of possible ambiguities as to precisely the scope of certain
materials to be supplied after the close of the hearing and having
determined that the authenticity of documents is not in issue, I re-
solve the issues raised by Respondent’s opposition to General Coun-
sel’s motion as follows:
(1) The bilateral stipulation relating to the substance of the cross-
examination of Compliance Officer Bednar is received.
(2) General Counsel’s motion to strike ‘‘Exhibit A,’’ attached to
Respndent’s brief (together with all references thereto) is granted
since the material was available prior to the close of the hearing and
not offered.
(3) General Counsel’s motion to strike Respondent’s reference in
its brief to and inclusion of the NMFA for the period 1985–1988
is denied. I have been administratively advised that the document,
in full, has finally been served on General Counsel.
(4) General Counsel’s motion to correct its Br., LL. 4 and 5, p.
5, to provide accurate citations is granted.
(5) G.C. Exhs. 6 and 8 are received unconditionally on Respond-
ent’s withdrawal of objections.
2 At all material times following the unfair labor practice litigation,
D & S Leasing, Inc. has been insolvent.
after, the General Counsel and Respondent submitted timely
briefs which have been carefully considered.1
The pleaded issues to be resolved relate to Respondent’s
obligation, if any, to make whole 59 employees (Tr. 64) by
payment to them of back wages and other benefits; and, sep-
arately, its obligation to reimburse the pension fund and
health and welfare fund for contributions that would have
been made absent Respondent’s unfair labor practices. At the
opening of the hearing, the parties settled the issue of em-
ployee backpay by Respondent agreeing to pay to the 59 em-
ployees $5.53 million on or before December 31, 1993.
There thus remained for resolution solely the amount of con-
tributions, if any, which should have been made on behalf
of the discriminatees by Respondent to the trust funds here:
the Central States Pension Fund and the Central States
Health and Welfare Fund.
On the entire record, including the briefs, and from my ob-
servation of the demeanor of the witnesses as they testified,
I make the following
FINDINGS OF FACT
Background
In the underlying unfair labor practice proceeding, the
Board, with court approval, found that the above-captioned
entities (Centra Inc.; Central Transport, Inc.; and Central
Cartage Company) constituted a single employer within the
meaning of the Act. That single employer was also the joint
employer of a group of 59 employees on the payroll of
D & S Leasing, Inc. which, pursuant to an agreement with
Respondent, provided the 59 employees to perform freight
consolidation work at Respondent’s premises in Cleveland,
Ohio.2
On and before May 31, 1986, the wages and other terms
of employment of these 59 D & S employees working at
Respondent’s premises were established in a collective-bar-
gaining agreement between D & S Leasing, Inc., and Team-
sters Local Union No. 964. This collective-bargaining agree-
ment, known as the ‘‘White Paper Agreement,’’ which ex-
pired March 31, 1988, granted covered employees less wages
and benefits than received by Respondent’s employees other-
wise covered in the Teamsters National Master Freight
Agreement (NMFA). Respondent’s own employees, rep-
resented by Teamsters Local Union No. 407, were covered
by the terms of NMFA. As found by the Board and court,
on Saturday, May 31, 1986, Respondent terminated its con-
tract with D & S Leasing, transferred the freight consolida-
tion work to one of its own corporate entities (Central Cart-
age Company), and D & S Leasing (with Respondent as
joint employer) laid off all 59 employees working at Re-
spondent’s premises.
On the following Monday, June 2, 1986, Respondent com-
menced performing the freight consolidation work at the
same Ohio facility. It meanwhile had hired 26 of the former
D & S employees as ‘‘new hires’’ under the NMFA which
employees were now represented by Local 407, as above
noted. These ‘‘new hires’’ under NMFA, were nevertheless
paid at lower rates of wages and benefits than even under
the White Paper agreement between D & S and Local 964.
In addition, Respondent filled out its ranks by hiring replace-
ment employees for the 33 D & S employees who were not
rehired.
The Board and court found that the Respondent violated
Section 8(a)(1) and (5) of the Act, as joint employer of the
D & S employees, by refusing to recognize and bargain
with Local 964 over its decision to cancel Respondent’s con-
tract with D & S Leasing; by failing to bargain over the ef-
fects of the transfer of this work to Respondent; and by alter-
ing the wages, hours, and other conditions of employment of
both the 26 ‘‘retained’’ employees (‘‘Group B’’ employees)
and the 33 laid-off employees whom it never rehired or re-
tained (‘‘Group A’’ employees). Furthermore, the Board and
court found that Respondent, as joint employer, violated Sec-
tion 8(a)(1) and (3) of the Act by laying off and refusing to
recall the 33 ‘‘Group A’’ employees.
Aside from ordering Respondent to bargain collectively
with Local 964, particularly with regard to its decision (and
the effects of its decision) to cancel the D & S Leasing con-
tract and to transfer the consolidation work to Respondent,
the Board directed Respondent to offer the 33 employees in
Group A immediate and full reinstatement to their former
jobs and to make them whole ‘‘for any loss of wages and
benefits they have suffered as a result of the discrimination
practiced against them with interest.’’ In addition, the Board
directed that Respondent make whole the 26 former D & S
employees (Group ‘‘B’’) hired by Respondent on or about
June 2, 1986, for any loss of wages and benefits, with inter-
est, which they suffered as a result of Respondent’s unilateral
alteration of their wages in terms and conditions of employ-
ment (failing to apply the White Paper agreement).
The Board ordered that Respondent:
(e) Rescind any departures from terms and condi-
tions of employment that existed immediately before
the Respondent’s transfer of work from Central Trans-
port and D & S Leasing to Central Cartage, retro-
actively restoring pre-existing terms and conditions of
employment, including wage rates and benefit plans,
816 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 For whatever reason, the official transcript of testimony herein
failed to include Respondent’s cross-examination of General Coun-
sel’s witness, the compliance officer, Mary Bednar. As a result of
this omission, the parties, as above-noted, after the close of the hear-
ing, entered into a stipulation regarding the substance of Bednar’s
cross-examination. Not only did the stipulation observe that the
backpay settlement included the health and medical insurance pre-
miums paid out of pocket by the discriminatees in the backpay pe-
riod, but also noted that the contributions allegedly owing to the
health and welfare fund are ‘‘net’’ contributions: they are contribu-
tions Respondent would have paid on behalf of the discriminatees
to those funds, less contributions made by interim employers to the
same funds.
4 The Group B employees were transferred into Respondent’s em-
ployment as ‘‘new employees’ under NMFA, immediately on the
commencement of Respondent’s operations on June 2, 1991. For
purposes of determining Respondent’s defaulted fund contributions,
they suffered only from the creation of their status as ‘‘new employ-
ees.’’ The ‘‘Group B’’ employees’ backpay has been settled. There
is no dispute that they suffered, at most, only 30 days of defaulted
fund contributions when hired as ‘‘new employees’’ under NMFA
on June 2, 1986 since, after 30 days, Respondent apparently cor-
rectly contributed to the funds on behalf of Group B employees pur-
suant to NMFA.
5 Based on information received subsequent to the issuance of the
compliance specification, as above-noted, the General Counsel dis-
covered that, during the backpay period, the funds, on behalf of
Group A discriminatees, received almost $150,000 from interim em-
ployers in contributions to the health and welfare fund and more
than $100,000 in contributions to the pension fund. To avoid oblig-
ing Respondent to make gratuitous duplicate contributions to the
funds in the face of these contributions from interim third-party em-
ployers, which would result in a ‘‘windfall’’ to the funds, the Gen-
eral Counsel deducted these amounts from Respondent’s liability and
so amended the backpay specification (G.C. Exhs. 2(a) and 2(b),
supra, amending Appendices A-33 and A-34).
and make the employees whole by remitting all wages
and benefits that would have been paid absent such uni-
lateral changes from June 2, 1986, until it negotiates in
good faith with the Union to agreement or impasse;
provided, however, that nothing in the order shall au-
thorize or require the withdrawal or elimination of any
wage increase unlawfully granted to employees without
a request from the Union.
On September 29, 1992, Respondent offered the 33 em-
ployees in Group A reinstatement to their former jobs. Six-
teen employees accepted reinstatement and 17 declined the
offer. The backpay period for employees in Group A begins
on June 2, 1986, and runs through September 29, 1992. For
those in Group B, from June 2, 1986, through June 30, 1988,
when they commenced receiving correct NMFA coverage.
The Compliance Specification and the Positions
of the Parties
The compliance specification, as amended, following set-
tlement at the hearing of Respondent’s backpay obligation as
above-noted, relates only to the question of the amount of
Respondent’s obligation, if any, to pay into the pension and
health and welfare funds. The specification divides Respond-
ent’s obligations with regard to these funds into the obliga-
tions owed to the 33 employees in Group A and the 26 em-
ployees in Group B. The obligations are ‘‘net’’ obligations:
the General Counsel’s specification, as Respondent concedes,
deducts from Respondent’s obligation the requirement for
contributions where individual employees would not have
been able to work during the backpay period due to illness,
injury, or similar circumstances; and similarly relieves Re-
spondent, with regard to the 33 Group A discriminatees,
from contributions where their other intermediate employers
made contributions on behalf of particular Group A employ-
ees to the same pension and health and welfare funds. There
is no dispute that the $5.53 million backpay settlement also
included the out-of-pocket medical expenses and health or
medical insurance premiums paid by the discriminatees dur-
ing the backpay period.3
Furthermore, there is no dispute that for contributions both
to the health and welfare and the pension funds, the compli-
ance specification, as amended, uses rates derived from the
White Paper Agreement for the period June 2, 1986, through
White Paper expiration in the first quarter of 1988 (March
31, 1988). Thus, for this period, Respondent’s obligation to
both funds creates a status quo ante by assuming that all 59
employees, had there been no unfair labor practice, would
have been subject to the wages, benefits, and other terms and
conditions of employment existing in the White Paper Agree-
ment which did not expire until March 31, 1988. With the
expiration of the White Paper Agreement on March 31, 1988,
the compliance specification asserts that the Group A em-
ployees,4 would then have been paid under the terms of the
NMFA, which the Group B employees had been continually
working under since June 2, 1986.
As amended at the hearing, the General Counsel’s compli-
ance specification asserts that Respondent’s Group A pension
contribution obligation is $534,927 (G.C. Exh. 2A, amending
Appendix A-34). Respondent’s Group A health and welfare
contribution obligation, similarly amended at the hearing, is
$733,770 (G.C. Exh. 2B, amending Appendix A-33). For
Group B, the Health and Welfare obligation is $6,403 (Ap-
pendix B-25); the Pension obligation, $3168 (Appendix B-
26).5
Respondent does not dispute the accuracy of the mathe-
matics contained in the General Counsel’s compliance speci-
fication as amended. In particular, Respondent concedes that
the hours and wage rates and other figures leading to the
General Counsel’s fund-obligation computations are correct
insofar as General Counsel’s theory goes. Respondent, how-
ever, contests the General Counsel’s theory: Respondent ar-
gues that the General Counsel came to an incorrect conclu-
sion because he did not derive the health and welfare and
pension contributions from a correct legal analysis. Accord-
ing to Respondent’s arguments, as detailed hereafter, Re-
spondent has no obligation to make any contributions to the
health and welfare or pension funds; and, in case of any such
obligation, it is more limited than the General Counsel’s as-
sertions.
It is undisputed that in October 1992, after the backpay
period, Respondent and Local 964 entered into a collective-
bargaining agreement wherein Respondent became bound to
the NMFA, covering these unit employees under the same
health and welfare and pension funds as those which existed
prior to the unfair labor practices.
817CENTRA INC.
6 General Counsel’s compliance specification, the Respondent’s an-
swer and concessions at the hearing establish the prima facie obliga-
tion on Respondent to make the pleaded contributions, as amended.
The Testimony of Charles Ayers
Aside from the testimony of the Regional compliance offi-
cer who drafted the instant compliance specification and who
explained the theory of the source of Respondent’s alleged
obligations with regard to the funds, particularly the applica-
tion of the White Paper Agreement to all employees until its
termination on March 31, 1988, and the application of the
NMFA to both Group A and Group B employees after White
Paper Agreement termination, General Counsel called only
one further witness, Charles E. Ayers, secretary-treasurer of
Local 964. Much of his testimony was technically hearsay,
as Respondent points out, but that hearsay was based particu-
larly on correspondence with the administrator of the funds
and, for the most part, was not contested by Respondent.
Furthermore, Respondent offered no testimony or other evi-
dence contradicting any of the testimony of Ayers and I fail
to see, relying on such testimony to the extent necessary,
how Respondent in any event was prejudiced by its receipt.
Respondent, though generally alleging the unreliability of
Ayer’s testimony, in no event directly challenged the com-
petency of Ayers to testify with regard to the subject of his
testimony. Respondent subsequently withdrew its objection to
documents introduced during Ayer’s testimony.
Ayer’s testimony focused in large on the interest of a
member of Group A, the discriminatee John (Jack) Mulroy,
and I credit such testimony in the absence of any contradic-
tion or limitation.
Respondent did not attempt to controvert his testimony
that if an employee has the requisite pension credits, he may,
in addition, under certain circumstances, retire with full con-
tinued coverage under the health and welfare plan. In par-
ticular, in order to get the health and welfare benefits, the
retired employee must be covered by the NMFA pension. In
order to get the pension rights permitting retirement after 30
years’ service, Mulroy, as a discriminatee, has the contractual
right to make up for (i.e., to ‘‘purchase’’) up to 2 years’ of
pension coverage which he missed because of Respondent’s
failure to contribute to the pension fund in the backpay pe-
riod. Similarly, Respondent has made no Mulroy contribution
to the health and welfare plan in the backpay period.
Mulroy plans to retire in 1994. Assuming that, with Re-
spondent’s 6 years of pension contributions, Mulroy can then
‘‘purchase’’ his pension credits for the 30 years on which to
retire under the pension plan, he must, under the pension
plan rules, nevertheless have at least 5 out of the last 5 years
of his service or 7 out of the last 10 years of his service,
prior to retirement, covered by the health and welfare plan
if he is to receive, as a pensioner, health and welfare plan
coverage. Respondent has not contributed to either fund on
behalf of Mulroy for the 6 years 1986–1992. If those health
and welfare contributions are not made by Respondent to
give him health and welfare coverage for 5 years out of the
last 5 years or 7 out of the last 10 years of employment, he
may well retire, if Respondent contributes to the pension
plan, on the 30-year pension but he would do so without
coverage of the health and welfare plan. Thus, the neecessity
for contributions under both plans.
Respondent concedes the nature of Ayers’ testimony and
the predicament faced by Mulroy. Nevertheless, Respondent
notes that General Counsel presented no evidence that any
other Group A employee is in the same situation (R. Br. 10).
Indeed, on the basis of Ayers’ further testimony, that pension
benefits and health and welfare benefits change from time to
time, Respondent argues that what might well affect
discriminatee Mulroy may not affect any of the other former
D & S employees.
Discussion and Conclusions
The appropriate remedy for unlawful withdrawal of rec-
ognition and unilateral changes in employee benefits is the
restoration of the status quo ante. Manhattan Eye, Ear &
Throat Hospital, 300 NLRB 201 (1990); Roman Iron Works,
292 NLRB 1292 (1989). The restoration of the status quo
ante includes the payment by the offending employer not
only of backpay, private insurance premiums, and the alleged
discriminatee’s out-of-pocket medical expenses, but, sepa-
rately, reimbursement, with interest, by way of contributions
to welfare funds and pension funds existing under an expired
collective-bargaining agreement which the employer would
have made but for unfair labor practices in unilaterally fail-
ing to do so. See Stone Boat Yard v. NLRB, 715 F.2d 441,
446 (9th Cir. 1983), cert. denied 466 U.S. 937 (1984); NLRB
v. Transport Service Co., 973 F.2d 562 (7th Cir. 1992).6 The
status quo ante, in the instant case, requires that the employ-
ees (Group A) subject to unlawful discrimination not suffer
further discrimination by treating them differently than their
fellows who suffered only from unlawful unilateral changes
in their terms of employment, i.e., Group B employees suf-
fered loss of only 30 days’ contributions to both funds. To
the extent Respondent argues that the terms and conditions
of employment of Group A discriminatees should be gov-
erned by different terms and conditions then those under
which Group B employees worked—after expiration of the
White Paper Agreement on March 31, 1988 (under which
both groups would have worked had there been no unfair
labor practices)—I reject that argument. Such a position not
only artificially perpetuates the unlawful discrimination
against Group A employees, but flies in the face of the make
whole remedies. If the Board, with respect to Group B, has
prohibited Respondent’s elimination of unlawfully granted
benefits (‘‘wage increase’’) without union consent, then the
‘‘make whole’’ remedy with respect to Group A employees
cannot require less, that their benefits be less than their erst-
while fellow employees (Group B) who suffered no statutory
discrimination. To do so would unnecessarily continue the
lesser White Paper benefits for Group A, the object of Re-
spondent’s unlawfully discriminatory effort, while continuing
Group B employees (against whom there was no unlawful
discrimination) at the higher NMFA level. I will not construe
the Board’s Order to ‘‘make whole’’ both groups so as to
undermine its remedial purpose.
Respondent, however, relying on the Second Circuit’s re-
fusal to enforce the Board’s Order in Manhattan Eye, Ear &
Throat Hospital v. NLRB, 942 F.2d 151 (1991), denying enf.
to 300 NLRB 201 (1990), argues, for its principal argument,
that Respondent is not at all liable for back contributions to
the subject health and welfare and pension funds because
there have been no injuries to either fund, no detriment or
liability during the backpay period due to any action or inac-
tion by the Respondent. Thus, Respondent argues, to require
818 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 General Counsel’s specification asserts that, for Group B, there
is only a 30-day default to the funds. After 30 days as ‘‘new hires,’’
the Group B employees enjoyed NMFA fund coverage.
8 As far as presently known, the Board has not acted on the court
of appeal’s remand in that case.
9 Immediately prior to the Board’s quotation from Stone Boat Yard
in the circuit court, the court stated (715 F.2d at 446): ‘‘[A]n em-
ployer cannot complain of the extra cost of improperly created, sub-
stitute fringe benefits. . . . The company is merely required to repay
what it has unlawfully withheld. . . . [It] was the Company that un-
lawfully chose to incur the additional expense of a private insurance
program.’’
Respondent to make any contributions to those funds, would
be a clear ‘‘windfall’’ to the funds and punitive to Respond-
ent, thus outside the remedial function of the Board’s pow-
ers.
As the court of appeals noted in Manhattan Eye & Ear,
supra, the policies of the Act are essentially remedial, Repub-
lic Steel Corp. v. NLRB, 311 U.S. 7 (1940); and the Board’s
remedies must compensate for actual injuries suffered by the
employees rather than speculative consequences of unfair
labor practices. Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900
(1984). Indeed, compliance proceedings provide the forum
for tailoring the remedy to suit the individual’s circumstances
of each case, 467 U.S. at 902.
Respondent, in short, interposes the following defenses to
the payment of the delinquent contributions to the funds: (a)
the dispositive position of Manhattan Eye, Ear & Throat
Hospital v. NLRB, supra; (b) the ‘‘windfall’’ that such con-
tributions would create in the funds since the alleged
discriminatees, during the backpay period, had no future in-
terest in the funds and the funds had no responsibility to the
discriminatees; and (c) even if the employees had a future in-
terest in the funds, Respondent’s obligation to make backpay
period contributions would be limited to the 16 of the 33
Group A discriminatees who accepted Respondent’s Sep-
tember 29, 1993 offer of reinstatement.
Respondent’s broadest argument, as above-noted, is that
the payment of such contributions would constitute an un-
justifiable windfall to the funds and would be punitive in na-
ture to the Respondent. According to Respondent, the wind-
fall and punitive elements of any required contributions
would flow from General Counsel’s failure ‘‘to demonstrate
that any of the employees had an economic stake in the fu-
ture vitality of the funds.’’ (R. Br. 7).7 Respondent points to
the requirement that any award of payments to the funds
must rest on ‘‘concrete evidence’’ that the employees on
whose behalf the contributions would be made have an eco-
nomic interest in the future of those funds, Manhattan Eye,
Ear & Throat Hospital v. NLRB, supra at 157, citing Sure-
Tan, Inc., v. NLRB, supra. In that case, the Court of Appeals
for the Second Circuit denied enforcement of the Board Sup-
plemental Decision and Order in the compliance case, Man-
hattan Eye, Ear & Throat Hospital, 300 NLRB 201. The
court ruled that the obligation to pay into the funds would
result in a windfall to the funds because the employees had
been compensated during the backpay period by the employ-
er’s substitute benefit plans, had disclaimed any present or
future interest in being covered by the union-negotiated
funds, and the Union had withdrawn its desire to represent
the employees. Hence, the employees had little economic
stake in the future financial stability of those funds. Indeed,
the court of appeals remanded the case to the Board to per-
mit the employer to submit evidence showing the actual
losses, if any, suffered by the health and welfare and pension
funds in view of the fact that the employees had benefited
from unilaterally substituted pension and health and welfare
funds. The court of appeals, however, was careful to observe
(942 F.2d at 159):
By refusing to enforce the Board’s decision in this case
we do not hold that in the exercise of its broad reme-
dial power, it is not empowered to order imposition of
the status quo ante in other cases where an employer
unilaterally discontinues payments to union-sponsored
benefit funds. . . . We simply rule that, in the matter
at hand, where the employees—who were compensated
during the relevant period by substitute benefit plans
and who, prior to Board’s decision, disclaimed any
present or future interest in being covered by the Joint
Funds—have little economic stake in the future finan-
cial stability of those funds, imposition of the status
quo ante does not serve the remedial purposes of the
Act because it failed to benefit the employees, is un-
duly harsh on the Employer and results in a windfall
for the union funds.8
The Board, however, in Manhattan Eye, Ear & Throat
Hospital, supra, 300 NLRB at 202, stated that in adopting
the judge’s recommended Order, ‘‘we underscore our adher-
ence to the remedial principles of Stone Boat Yard, 264
NLRB 981 (1982), enfg. 715 F. 2d 441 (9th Cir. 1983), cert.
denied 466 U.S. 927 (1984).’’ Quoting the Ninth Circuit in
Stone Boat Yard the Board (300 NLRB at 202 fn. 5) stated
that ‘‘the diversion of contributions from the union funds un-
dercuts the ability of those funds to provide for future
needs.’’9
Contrary to the court of appeal’s position in Manhattan
Eye, Ear & Throat Hospital v. NLRB, supra, which re-
manded for the purpose of permitting the employer to submit
evidence showing actual losses to the funds based on the dif-
ference between the unilaterally substituted new benefit plans
and the union-negotiated plans, the court, in Stone Boat Yard
v. NLRB (714 F.2d at 446) specially rejected the employer’s
defense: that the make-whole remedy was punitive (in requir-
ing payment of past due contributions to the Union’s health
and welfare and pension funds) because the Board Order did
not ‘‘reflect employee loss and provides no offset for bene-
fits provided through the employer-sponsored alternative
plan.’’
In view of the above dispute engendered by the court of
appeal’s decision in Manhattan Eye, Ear & Throat Hospital,
supra, and notwithstanding its refusal to enforce the Board’s
Order, I am necessarily bound by the Board’s view as ex-
pressed in the underlying case in Manhattan Eye, Ear &
Throat Hospital, supra, as the manifested Board policy. Iowa
Beef Packers, 144 NLRB 615 (1963). The Board rule, as far
as I am concerned, is reflected in the court of appeals’ Stone
Boat Yard decision, cited repeatedly by the Board in Man-
hattan Eye, Ear and other cases: that a make-whole order re-
quiring status quo ante contributions is not punitive notwith-
standing that it does not reflect employee loss or provides no
offset for benefits provided through the employer-sponsored
819CENTRA INC.
10 This also seems to be the Seventh Circuit’s view. NLRB v.
Transport Service Co., 978 F.2d 562 fn. 5 (7th Cir. 1992). Stone
Boat Yard may be reconciled with the court’s decision in Manhattan
Eye, Ear & Throat in that in Stone Boat Yard, the employees had
an economic future interest in the funds. Unlike the nurses who left
the union and the funds in Manhattan Eye, Ear & Throat, the Stone
Boat Yard employees, as in the instant case, remained in the union
and did not foreswear their interest in the funds.
alternative plan. The fact that the court of appeals for the
Second Circuit takes a different view and the Board, without
adopting that view, has accepted the decision as the law of
the case does not affect my obligation to observe the Board
rule.
The court of appeals in Manhattan Eye, Ear & Throat
Hospital, also stated (942 F.2d at 157–158) that Sure-Tan,
Inc. v. NLRB, 467 U.S. 883 (1984), ‘‘mandates that before
the Board may award back payments for failure to pay into
the Joint Funds, it must have concrete evidence that the
nurses have an economic interest in the future of those Joint
Funds.’’10 In that case, as above noted, the court of appeals
specifically held that the involved employees, unit nurses,
did not have an interest in the future of the funds because
(at the time of the hearing) the union no longer represented
the nurses, the nurses had previously disclaimed any present
or future interest in the funds and they had been com-
pensated by coverage under the employer’s own funds. The
court held that the nurses’ interest in the future was limited
to the difference, if any, in pension coverage under the two
funds which would be discovered on remand; and that the
nurses had no interest in the health and welfare fund be-
cause, with the ending of contributions, the fund no longer
had any obligation to pay benefits to the nurses.
In the instant case, the employees of Group B, continually
employed in the backpay period were, except for the first 30
days of employment, covered by NMFA fund contributions.
There was no dispute that the NMFA contains the same
health and welfare plan as that which existed under the pre-
existing White Paper Agreement under which all employees
worked when employed by D & S Service Inc. In addition,
the parties, in their 1992 collective-bargaining agreement,
have continued the existence of, and contributions to, these
funds. Thus, the 26 Group B employees were subject to an
unlawful unilateral change in their coverage; should not have
been treated as ‘‘new employees’’ and at all times retained
a present and future interest in both funds. Since, after 30
days of deprivation, they were covered by contributions
under NMFA, their loss is limited to 30 days’ worth of con-
tributions.
The employees in Group A, as exemplified by the experi-
ence of John J. Mulroy, have a particular interest in the vital-
ity and in the future functioning not only of the pension plan
but of the health and welfare plan. Mulroy plans to retire in
1994 on a 30-year pension. The record does not show the re-
tirement plans of Group A employees other than Mulroy. Re-
spondent has failed to make 6 years of health & welfare con-
tributions on behalf of all of Group A. However, Mulroy, as
‘‘concrete evidence’’ of a future interest, Manhattan Eye Ear
& Throat Hospital v. NLRB, 942 F.2d at 157, in the health
and welfare plan, needs not only a discriminatee’s right to
‘‘purchase’’ 2 years of pension coverage, but the coverage
provided by Respondent’s defaulted 6 years of contributions
into the health & welfare plan. Failing health and welfare
plan coverage in 5 years out of the last 5 years of employ-
ment or 7 years in the last 10 years of employment, the
value of his 30-year pension is clearly diminished by the loss
of lifelong health and welfare plan coverage. If he retires in
1994, he will not have the requisite health and welfare plan
coverage because of Respondent’s defaulted payments in that
fund. The inchoate retirement plans of the others of Group
A may or may not constitute ‘‘concrete evidence’’ of a fu-
ture interest in the pension and health and welfare plans. The
reason for the indecisive nature of the evidence in this re-
gard, may well be due to the fact that, unlike Mulroy, other
Group A employees have so far manifested no concrete re-
tirement date. Such a failure, however, of a specific retire-
ment date in the next half-dozen years for the remaining 32
Group A employees may or may not demonstrate ‘‘concrete
evidence’’ but it is not a mere speculative interest. Manhat-
tan Eye, Ear & Throat v. NLRB, 942 F.2d at 157. Since they
are current Respondent employees, they not only have rights
in pension and health and welfare similar to Mulroy’s, but,
quite apart from pension and retirement, they have present
and future interest in the health and welfare fund vitality un-
like the Manhattan Eye, Ear & Throat nurses.
To the extent Respondent argues that, in any event, the
limit of its obligation to Group A is only to the 16 (of 33)
discriminatees who accepted its September 29, 1992 offer of
reinstatement, and not to the 17 who rejected the offer, it
necessarily relies on the analogy to the nurses in Manhattan
Eye, Ear & Throat Hospital v. NLRB, who foreswore future
interest in fund coverage and representation by the union.
But there is no proof that the 17 Group A employees who
refused reinstatement either ceased being union members or
sought to surrender coverage in either fund. Like Mulroy,
they may wish to retire with health and welfare coverage but
are excluded by failure of Respondent’s contributions to the
plans during the 6-year backpay period. Like Mulroy, they
may also be 2 years short of qualifying for the 30-year pen-
sion or other pension and need the pension contributions to
‘‘purchase’’ requisite pension time in order to meet retire-
ment requirements. The evidence in this record shows that
other employers are covered by and contribute to the instant
pension and health and welfare plans. Rather than accept Re-
spondent’s offer of employment, these 17 Group A
discriminatees are working for other employers (R. Br. 12)
who may be contributing to the plans. There is no evidence
that such employees have no future interest (whether for re-
tirement or other purposes) in Respondent’s defaulted 6 years
of contributions insofar as they affect the vitality of the plans
and all the Group A employees present and future protection
thereunder.
The actual calculations of fund responsibility to the 17
Group A discriminatees who rejected the reinstatement offer
may or may not be ‘‘concrete evidence’’ of future interest
of these employees. But the funds, as fiduciary third-part
beneficiaries, Ron Tirapelli Ford v. NLRB, 987 F.2d 433,
444 (7th Cir. 1993) (citing Robbins v. Lynch, 836 F.2d 330
(7th Cir. 1988)) may well be liable to these 17 employees
when and if they make retirement decisions similar to
Mulroy’s. Respondent’s 6 years of defaulted pension and
helath and welfare contributions will not then be affecting
mere speculative future interests.
In any event, since General Counsel has proved a prima
facie case of Respondent’s obligation to pay into the funds
820 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
11 Similarly, Lawrenceville Ready-Mix Co., 305 NLRB 1010
(1991), cited by Respondent (Br. 8) is not persuasive. In that case,
the entire purpose of the Board’s remand was to inquire whether the
employer concluded an agreement effective on or before the date it
discontinued payment into the union-negotiated health and welfare
plan. Such proof, if any, would limit the employer’s obligation to
benefits paid out by the fund before execution of the alleged agree-
ment. But Respondent cites the case (Br. 8) apparently only for fn.
4, appearing at 305 NLRB at 1011:
We note that the Indiana Teamsters Plan is solely a health insur-
ance plan, and not a pension plan, so we are not dealing with
the problem of protecting the stability of a fund in whose future
viability the employees have a clear economic stake. Cf. Man-
hattan Eye, Ear & Throat Hosopital, 300 NLRB 201 and cases
there cited (1990), enfd. denied and remanded 942 F.2d 151 (2d
Cir. 1991).
Whatever else the Board held in Lawrenceville Ready-Mix, includ-
ing the footnote, it has not held (R. Br. 8) ‘‘that Health and Welfare
Funds do not present situations where employees have an economic
stake in the future vitality of the Fund.’’ The Board, as is obvious,
held that health and welfare funds present the problem of whether
employees have a stake in the fund whose viablity is in issue be-
cause of a failure of contribution. While the law of the case in Man-
hattan Eye, Ear & Throat is that there was no concrete evidence of
the nurses’ stake in the future of that fund (they had renounced their
interest and decertified the union), the same cannot be said of the
Respondent’s 59 Group A and Group B employees herein.
the amounts alleged in the amended compliance specifica-
tion, the burden of proof then shifts to Respondent to negate
or limit its liability. Certainly General Counsel has proved
that a member (Mulroy) of Group A has a concrete future
interest in those defaulted 6 years of contributions. Respond-
ent evidently concedes that the 16 Group A employees who
accepted reinstatement have a future interest in the funds
(compare R. Br. 12 with p. 22). With regard to the 17 who
rejected, Respondent asserts that they ‘‘effectively disclaimed
any present or future interest in being covered by the health
and welfare fund (Br. 12). I have found to the contrary that,
through intermediate employment by employers bound to the
funds, there is evidence (R. Br. 12; G.C. Exhs. 2A and 2B)
of their present and future interest. On such General Counsel
evidence, and the burden of proof to show lack of future in-
terest having shifted to Respondent, Respondent has not sup-
ported its burden. See Hansen Bros. Enterprises, 313 NLRB
599 (1993).
All of which again brings us to the applicability of the
Second Circuit’s decision in Manhattan Eye, Ear & Throat
Hospital v. NLRB, supra, on which Respondent appears to
heavily rely. Respondent acknowledges only that that case is
‘‘fact specific’’ (Br. 8). I assume that description is equiva-
lent to admitting its distinctive factual remoteness.11
In the instant case, unlike Manhattan Eye, Ear & Throat,
for purposes of measuring employee future interest in the
funds, the unit employees have not decertified the union nor,
more important, have not foresworn their desire to be cov-
ered by the union-negotiated funds and are not covered by
employer-sponsored funds. Thus, along with the continued
fund coverage of Group B employees and the remedially
based inclusion of the Group A employees under the funds,
their future interest in the funds seems clear.
Conclusion
On the basis of the amended compliance specification and
the evidence of record, I conclude and recommend that Re-
spondent is responsible for and should pay its defaulted con-
tributions into the Central States, Southeast and Southwest
Area’s Pension Fund and into the Central States Southeast
and Southwest Area’s Health and Welfare Fund a principal
total of $1,278,268. This total is derived from and appears
in the backpay specification for Group B employees (Appen-
dices B-25, B-26): $6,403 to the health and welfare fund;
$3168 to the pension fund; and in the amended schedules
supplied for Group A employees by General Counsel (G.C.
Exhs. 2(a) and (b)): $534,927 into the pension fund;
$733,770 into the health and welfare fund. This total shall
be augmented by the payment of interest, Merryweather Op-
tical Co., 240 NLRB 1213 (1979); Roman Iron Works, 292
NLRB 1292 (1989).