Coastal Derby Refining Co.

National Labor Relations Board - Board Decisions

Sep 29, 1993

312 N.L.R.B. 495 (N.L.R.B. 1993)

495
312 NLRB No. 91
COASTAL DERBY REFINING CO.
1 On August 31, 1992, the Oil, Chemical and Atomic Workers
International Union, Local 5-241, AFL–CIO was decertified as the
exclusive bargaining representative of the unit employees. The Re-
spondent has excepted to extending the affirmative relief for the fail-
ure to bargain beyond the Union’s decertification. The General
Counsel does not object to this modification. In these circumstances,
we consider it inappropriate to order the Respondent to bargain with
the Union, notwithstanding that we have found that the Respondent
acted unlawfully when it failed to bargain with the Union at a time
when the Union was the representative. Accordingly, we shall mod-
ify the recommended Order. See Celebrity, Inc., 284 NLRB 688
(1987).
Coastal Derby Refining Co. and Oil, Chemical and
Atomic Workers International Union, Local 5-
241, AFL–CIO. Case 17–CA–15477
September 29, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On September 28, 1992, Administrative Law Judge
James S. Jenson issued the attached decision. The Re-
spondent filed exceptions and a supporting brief and
the General Counsel filed an answering brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions
and briefs and has decided to affirm the judge’s rul-
ings, findings, and conclusions and to adopt the rec-
ommended Order as modified.1
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Coast-
al Derby Refining Company, El Dorado, Kansas, its
officers, agents, successors, and assigns, shall take the
action set forth in the Order as modified.
1. Substitute the following for paragraph 1(a).
‘‘(a) Unilaterally changing unit health insurance
benefits without first notifying and bargaining with a
union that is the exclusive collective-bargaining rep-
resentative of its employees in an appropriate bargain-
ing unit.’’
2. Substitute the following for paragraph 2(a).
‘‘(a) Rescind the unilateral changes in health insur-
ance benefits for working spouses and reinstate the in-
surance benefits for working spouses in effect prior to
the January 1, 1991 change; and make whole bargain-
ing unit employees for any losses they may have suf-
fered as a result of the January 1, 1991, changes in the
health insurance coverage for working spouses with in-
terest, until the exclusive bargaining representative was
decertified.’’
3. Substitute the attached notice for that of the ad-
ministrative law judge.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT unilaterally change health insurance
benefits without first notifying and bargaining with an
incumbent union which is the exclusive collective-bar-
gaining representative of our employees in the follow-
ing bargaining unit:
All temporary, probationary, and regular employ-
ees in maintenance and operations employed at
our El Dorado, Kansas, facility but excluding all
office clerical employees, guards, professional
employees, and supervisors as defined in the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL rescind the unilateral changes in health in-
surance benefits for working spouses and reinstate the
insurance benefits for working spouses in effect prior
to the January 1, 1991 change; and make whole bar-
gaining unit employees for any losses they may have
suffered due to the January 1, 1991 changes in the
health insurance coverage for working spouses with in-
terest, until the exclusive bargaining representative was
decertified.
COASTAL DERBY REFINING COMPANY
Constance N. Traylor, for the General Counsel.
Kathleen A. Hostetler, of Lakewood, Colorado, for the Re-
spondent.
Mark J. Tempest, of Houston, Texas, for the Employer.
DECISION
STATEMENT OF THE CASE
JAMES S. JENSON, Administrative Law Judge. I heard this
case in Wichita, Kansas, on October 2, 1991, pursuant to a
complaint which issued on April 24, 1991. The complaint al-
leges that the Respondent implemented a change in the medi-
cal and dental plans covering unit employees represented by
the Union without affording the Union an opportunity to ne-
gotiate and bargain about the change and its effects. While
admitting the implementation of the change, the Respondent
denies it committed an unfair labor practice and argues it
was not required to notify or bargain with the Union because
(1) the change was made by the plan administrator, (2) it
was required to maintain the preunion status quo respecting
the expectation of upcoming benefits created by the Em-
ployer either by promises or a regular pattern of granting
benefits, and (3) the Union continually avoided and delayed
496 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The parties stipulated to the receipt in evidence of the transcript
and exhibits in Case 17–CB–4064, which I heard on October 2,
1991, immediately preceding this case. In the decision in that case,
which is being issued contemporaneously with this one, I found that
the Union did not engage in 8(b)(3) conduct. I therefore recommend
dismissal of the complaint.
2 Coastal Derby’s compliance with the Board’s notice-posting re-
quirement was completed in January 1991.
negotiations. All parties were afforded full opportunity to ap-
pear, to introduce evidence, to examine and cross-examine
witnesses, to argue orally, and to file briefs. The General
Counsel, with whom the Union joined, filed a brief, as did
the Respondent. Both have been carefully considered.
On the entire record in the case, including the demeanor
of the witnesses, and having considered the posthearing
briefs, I make the following1
FINDINGS OF FACT
I. JURISDICTION
Coastal Derby Refining Company is engaged in the oper-
ation of an oil refinery in El Dorado, Kansas. During the
year ending March 1, 1991, in the course and conduct of its
operations, it sold and shipped products, goods, and materials
valued in excess of $50,000 directly to points outside the
State of Kansas. It is admitted and found that it is an em-
ployer engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted and found that Oil, Chemical and Atomic
Workers International Union, Local 5-241, AFL–CIO is a
labor organization within the meaning of Section 2(5) of the
Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
The events giving rise to this proceeding have their origin
in the 10th Circuit Court of Appeal’s decision, 915 F.2d
1448 (1990), enforcing the Board’s Decision and Order in
292 NLRB 1015 (1989), finding Coastal Derby to be the
successor to Pester Corporation and in violation of Section
8(a)(5) by refusing to recognize and bargain with OCAW
after it took over the operation of the El Dorado refinery in
1986.2 The facts in the earlier case reveal that the Pester
Corporation had owned and operated the El Dorado refinery
from 1977 until 1986 and that the refinery employees there
had been represented by the Union since the 1940s and that
the Union was their representative when the Pester Corpora-
tion purchased the facility. The Pester Corporation and
OCAW were bargaining on a successor contract at the time
Respondent Coastal Derby took over. Following the refusal
to recognize it as the collective-bargaining representative of
the employees in the El Dorado facility, OCAW filed the
December 24, 1986 charge against Coastal Derby which re-
sulted in the above-mentioned 10th Circuit decision enforc-
ing the Board’s Order. Thus, it is seen that from October 13,
1986, when it demanded recognition, until mid-October
1990, Respondent Coastal Derby unlawfully refused to rec-
ognize the OCAW, the employees’ collective-bargaining rep-
resentative.
B. Respondent Recognizes OCAW
The first knowledge OCAW had that Respondent would
acknowledge it as the representative of the refinery employ-
ees was through an employee after Respondent notified the
employees through an ‘‘interoffice correspondence’’ dated
October 11, 1990, that the 10th Circuit had ruled it to be the
successor to Pester and obligated to bargain with OCAW,
and that it would comply with the court’s decision. No notice
to this effect had been sent by Respondent to the Union that
it would comply with the court’s decision. John Dykes, the
Union’s International representative in charge of servicing
the refinery, testified that he was surprised at the Employer’s
concession in recognizing the Union since he had understood
the Company intended to appeal to the United States Su-
preme Court in the event it lost before the 10th Circuit. In
any event, the first effort to contact the other party was made
by Dykes who left a message for the plant manager, who
was not available at the time, to call him back. The call was
returned on October 15, 1990, by Robert Sanders, director of
industrial relations for Coastal States Management Corpora-
tion, which, along with Coastal Derby and other unnamed
entities, are subsidiaries of Coastal States Corporation. Sand-
ers is the chief labor negotiator for all of the subsidiaries and
as such provides labor relations administrative services and
functions as the chief negotiator for Respondent. Sanders in-
formed Dykes that the Employer was prepared to recognize
and negotiate with the Union. Dykes requested pertinent in-
formation regarding the employees and their benefits and
stated that as the designated representative of the employees,
he was the one to be contacted on anything concerning their
wages, hours, and other conditions of employment. Not yet
having a list of current employees, the Union took an old list
which it attempted to bring up to date with the help of a cou-
ple of union members, and sent them a letter dated October
16, 1990, advising them of a meeting to be held October 22
for the purpose of rebuilding an organization in the plant.
Dykes testified that since the Company had refused to recog-
nize the Union for 4 years, there was no union structure
within the plant, there were no union stewards, and some of
the employees were apprehensive about the Union and under
the misconception that they might be replaced by former Pes-
ter employees. In addition, a number of the letters announc-
ing the meeting were returned. Consequently, attendance at
the meeting was small.
On October 24, Dykes wrote Sanders confirming the sub-
stance of their October 15 telephone conversation and re-
quested a current list of all unit employees and copies of all
benefit plans by November 15. On November 5, Sanders
wrote Dykes stating the requested information would be for-
warded as soon as completed and suggested November 27 or
28 as dates to commence bargaining. The information was
transmitted to Dykes with Sanders’ letter of November 16.
By letter to employees dated November 8, the Union an-
nounced two meetings on November 12 at the Red Coach
Inn in El Dorado to answer any questions they might have.
The employees who attended the November 12 meetings fo-
cused on the Pester bankruptcy, the closing of the plant, the
litigation that culminated in the 10th Circuit decision, and
fear that former Pester employees might displace the current
497COASTAL DERBY REFINING CO.
employees. Because of the concerns expressed by the few
that attended the meetings, the Union arranged for the attor-
ney that had represented Pester in the bankruptcy proceed-
ings and a staff attorney for the International to be present
at a special meeting to be held at the union hall in El Dorado
on November 27. While attendance at that meeting was bet-
ter than at the earlier ones, the Union decided to make house
calls in order to communicate its message to employees.
Many employees, according to Dykes, were new and had
never been exposed to the Union.
In early January 1991, a couple of employees of Coastal
Derby notified the Union that the Company had made a
change in the medical and dental benefit plans. The changes
in the medical and dental plans included, inter alia, the elimi-
nation of primary coverage for the employee’s working
spouse who is eligible for group medical/dental coverage of-
fered by the working spouse’s employer. The Respondent
had notified the employees—but not OCAW—of the change
in the benefit plans by letter of December 6, 1990. Darlene
Shull, employee relations manager for Respondent, testified
she received a copy in the office on December 6 and at her
home about December 9, which constituted her first knowl-
edge of the changes which were to become effective January
1, 1991. Along with an assistant, Shull made several presen-
tations regarding the changes to employees on December 17.
Dykes was not invited to the presentations nor was the need
to include a union representative discussed. She testified that
while it had been the practice to follow the Coastal Corpora-
tion benefit plans, and amendments, the Respondent could
suggest amendments to the Coastal Corporation, and in fact
the Wichita refinery, whose employees are represented by
another OCAW local, is not an adopting employer of the
Coastal Corporation health benefit plans. Rather, its health
benefits are governed by the collective-bargaining agreement
with OCAW Local 5-446. Sanders confirmed that the Coastal
Corporation plan was not put into effect at any of the affili-
ated plants whose employees are represented by labor organi-
zations. Robert De Moss, senior attorney for Coastal Man-
agement Corporation, testified that section 8 of the benefit
plan provides that an adopting employer, such as the Re-
spondent, is automatically bound to amendments unless it no-
tifies Coastal Corporation within 90 days that it does not
wish to be bound by the amendment.
Following an arbitration hearing on January 11, 1991, in
Wichita concerning another unit, Dykes brought up the
changes which had been made without the Union’s knowl-
edge. This was followed by his January 25, 1991 letter to
Sanders demanding bargaining on the issue and offering to
do so prior to general negotiations. By letter dated February
7, 1991, Sanders informed Dykes that,
The changes . . . are not the result of any action unilat-
eral or otherwise by Coastal Derby Refining Company,
but were instead made by the Coastal Corporation as
the administrator of the benefit plans in question. As an
adopting employer of those plans, Coastal Derby-El
Dorado is automatically bound by amendments made
by the Administrator unless it notifies the Administrator
in accordance with the terms of the plan that it rejects
the amendment. The Company can, subject to accept-
ance by the Administrator submit its own modification
to the plan.
Thus it is seen then on both January 11 and 25, 1992, it was
possible under the plans for the Respondent to have avoided
automatic coverage by the amendments. No objection to the
plan was ever made by the Respondent to the plan’s adminis-
trator. Rather taking the position that it had not made a uni-
lateral change, Sanders reiterated the Company’s offer to bar-
gain on all issues but ‘‘that there is no need to discuss any
single issue . . . .’’ He proposed general negotiations com-
mence February 26. Dykes responded on February 22 that
while the Union was not yet prepared to commence general
negotiations, it was ‘‘certainly willing to meet to negotiate
on any specific changes the Company feels need to be made
prior to such changes being implemented.’’ On February 25,
the Union filed the charge in this case and the complaint
issued on April 24, 1991.
Discussion
The Respondent admits that it implemented a change in
the medical and dental plans covering the unit employees
represented by the Union, and it is clear the changes were
made without prior notice to the Union. It is further clear
that Respondent could have rejected the proposed changes in
the plans or could have suggested alternative amendments.
Thus, the medical and dental plans were subjects over which
the Respondent could have bargained with the Union. In this
regard, no union-represented employees of any of the other
subsidiaries of Coastal Corporation are covered by the Coast-
al Corporation plan. Rather, their benefits are negotiated with
their collective-bargaining representatives.
It is well grounded in Board and court law that health ben-
efit plans are a mandatory subject of collective bargaining
and that they may not be altered or eliminated without bar-
gaining to mutual agreement or to a good-faith impasse on
such action. In NLRB v. Katz, 369 U.S. 736 (1962), the Su-
preme Court held that an employer violated the duty to bar-
gain collectively imposed by Section 8(a)(5) of the Act by
unilaterally changing conditions of employment, stating at
743,
A refusal to negotiate in fact as to any subject which
is within Section 8(d), and about which the union seeks
to negotiate, violates Section 8(a)(5) though the em-
ployer has every desire to reach agreement with the
union upon an overall collective agreement and in all
good faith bargains to that end. . . . for it is a cir-
cumvention of the duty to negotiate which frustrates the
objectives of Section 8(a)(5) much as does a flat re-
fusal.
It being clear from the evidence that the proposed change
in the benefit plans was subject to change by the Respond-
ent, and could have been changed had the Respondent noti-
fied the Union of the proposal, having found in Case 17–
CB–4064 that the Union did not in indulge in dilatory tactics
in violation of Section 8(b)(3), and having considered and
found no merit to the Respondent’s argument that it was re-
quired to maintain the dynamic status quo respecting the ex-
pectation of upcoming benefits, it is found, as alleged in the
complaint, that the Respondent violated Section 8(a)(5) and
(1) of the Act by implementing a change in the Coastal Cor-
poration Medical Plan and the Coastal Corporation Dental
Plan covering unit employees by ceasing to pay for primary
498 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order, shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
4 If 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 Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
coverage for a unit employee’s working spouse who is eligi-
ble for group medical coverage offered by the working
spouse’s employer, without having afforded the Union an op-
portunity to negotiate and bargain with respect to such acts
and conduct and the effects of such acts and conduct.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(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. At all times material to the proceeding, Oil, Chemical
and Atomic Workers International Union, Local 5-241, AFL–
CIO has been the exclusive collective-bargaining representa-
tive of employees in the following appropriate unit:
All temporary, probationary, and regular employees in
maintenance and operations employed at Respondent’s
El Dorado, Kansas facility but excluding all office cler-
ical employees, guards, professional employees, and su-
pervisors as defined in the Act.
4. By unilaterally implementing a change in the Coastal
Corporation Medical Plan and the Coastal Corporation Den-
tal Plan, Respondent Coastal Derby Refining Company com-
mitted unfair labor practices within the meaning of Section
8(a)(5) and (l) of the Act.
5. The unfair labor practices found above affect commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease and
desist and take certain affirmative action designed to effec-
tuate the policies of the Act.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended3
ORDER
The Respondent, Coastal Derby Refining Company, El
Dorado, Kansas, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Refusing to bargain collectively within the meaning of
the Act with Oil, Chemical and Atomic Workers Inter-
national Union, Local 5-241, AFL–CIO as the exclusive col-
lective-bargaining representative of its employees in the ap-
propriate unit, by unilaterally changing the Coastal Corpora-
tion Medical Plan and/or the Coastal Corporation Dental
Plan.
(b) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of rights guaran-
teed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Restore the Coastal Corporation Medical and Dental
Plan coverages provided to unit employees before it was uni-
laterally changed, and make the employees whole for any
losses which they may have suffered, and for any direct ex-
penses which they may have been required to bear as a result
of the unilateral changes.
(b) Post at its El Dorado, Kansas facility copies of the at-
tached notice marked ‘‘Appendix.’’4 Copies of the notice, on
forms provided by the Regional Director for Region 17, after
being signed by the Respondent’s authorized representative,
shall be posted by the Respondent immediately upon receipt
and maintained for 60 consecutive days in conspicuous
places including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, de-
faced, or covered by any other material.
(c) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.