Croatlan Fraternal Union of America

National Labor Relations Board - Board Decisions

Oct 7, 1977

232 N.L.R.B. 1010 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Croatian Fraternal Union of America and Office and
Professional Employees International Union, Local
No. 33, AFL-CIO. Case 6-CA-9349
October 7, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, PENELLO, AND MURPHY
On May 25, 1977, Administrative Law Judge
Arthur Leff issued the attached Decision' in this
proceeding. Thereafter, the General Counsel filed
exceptions and a supporting brief, and Respondent
filed limited cross-exceptions with a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,2 and conclusions of the Administrative Law
Judge and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the complaint be, and it hereby is,
dismissed: provided, however, that:
The Board shall retain jurisdiction of this proceed-
ing for the purpose of entertaining an appropriate
and timely motion for further consideration upon a
proper showing that either (a) the dispute has not,
with reasonable promptness after issuance of this
Decision, been either resolved by amicable settle-
ment in the grievance procedure or submitted
promptly to arbitration; or (b) the grievance or
arbitration procedures have not been fair and
regular, or have reached a result which is repugnant
to the Act.
MEMBER JENKINS, dissenting:
For the reasons expressed in my dissent in Roy
Robinson Inc., d/b/a Roy Robinson Chevrolet, 228
NLRB 828 (1977), I would not defer this case to
arbitration but would determine the merits.
'In the absence oft opposition thereto, we hereby grant General
Counsel's motion to correct certain inadvertent errors in the Administrative
Law Judge's Decision.
2 We hereby correct an inadvertent error in the paragraph preceding the
Administrative Law Judge's Order by changing the words "Respondent's
financial condition" to read "Charging Party's financial condition."
232 NLRB No. 162
DECISION
STATEMENT OF THE CASE
ARTHUR LEFF, Administrative Law Judge: Upon a
charge filed on June 18, 1976, by Office and Professional
Employees International Union, Local No. 33, AFL-CIO,
herein referred to as the Union or as Local 33, the General
Counsel of the National Labor Relations Board issued a
complaint against Croatian Fraternal Union of America,
Respondent herein (also at times hereinafter referred to as
"CFU" or the "Society"), alleging that Respondent had
engaged in unfair labor practices within the meaning of
Section 8(a)(5) and, derivatively, of Section 8(a)(1) as well.
With respect to the unfair labor practices, the complaint
more specifically alleges that Respondent, in disregard of
its good-faith bargaining obligations to the Union as the
bargaining agent of its employees in an appropriate unit,
unilaterally and without prior notice or consultation with
the Union, (a) on February 27, 1976, permanently
subcontracted work previously performed by its employees
in the bargaining unit and terminated employees in the
bargaining unit, including Charles Lesko and Ann Vucic;
(b) on June 17, 1976, forbade employees from holding any
more union meetings on Respondent's premises; and (c)
also on June 17, 1976, prohibited employees from further
use of the telephones at Respondent's premises. Respon-
dent filed an answer in which it denied the commission of
the alleged unfair labor practices, and asserted by way of
affirmative defense that the complaint should be dismissed
and the issues in this case deferred for arbitration under the
Board's Collyer principle (Collyer Insulated Wire, A Gulf
and Western Systems Co., 192 NLRB 837 (1971)).1 A
hearing was held at Pittsburgh, Pennsylvania, on January
25, 26, and 27, 1977. At the close of the hearing, decision
was reserved on Respondent's motion to dismiss this
proceeding on Collyer grounds. That motion will be ruled
upon below. On March 3, 1977, briefs were filed by the
General Counsel and by Respondent.
Upon the entire record in this case, I make the following
findings and conclusions:
I. JURISDICTION
Respondent, a Pennsylvania corporation with its princi-
pal office at Pittsburgh, Pennsylvania, is engaged, inter alia,
in the solicitation, sale and issuance of life insurance
policies. During the 12 months prior to the issuance of the
complaint, Respondent received from policyholders insur-
The answer alleges, and the General Counsel concedes, that pnor to the
issuance of the complaint the following occurred: On August 23, 1976. the
Regional Director notified Respondent that after investigation the issuance
of a complaint was warranted. but that further action on the charge would
be deferred for arbitration if Respondent gave timely notice to the Regional
Director of its willingness to arbitrate the underlying dispute and to waive
any contractual time limitations on the filing and processing of grievances to
arbitration. On August 31, 1976, Respondent gave timely notice to the
Regional Director of its willingness to meet the conditions for deferral. On
September 8. 1976, however, the Union filed with the Regional Director a
formal request, accompanied by a supporting statement, that "the Collyer
policy be not applied due to the financial condition of their Local."
Thereafter, the complaint in this case was issued, notwithstanding Respon-
dent's acceptance of the conditions theretofore proposed by the Regional
Director for deferral.
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CROATIAN FRATERNAL UNION OF AMERICA
ance premiums valued in excess of $500,000, of which in
excess of $50,000 represented premiums received from
policyholders located outside the Commonwealth of
Pennsylvania. The complaint alleges, Rspondent admits,
and it is found, that Respondent is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
Local No. 33 is a labor organization within the meaning
of Section 2(5) of the Act.
I1I. THE AtI.LEGED UNFAfR LABOR PRACTICES
A. Background
Respondent is a beneficial and fraternal organization of
persons of Slavic descent or background, with about 91,000
members located throughout the United States and
Canada. In addition to promoting social and cultural
pursuits for its members, it provides mutual assistance in
the form of life, disability, sickness and accident, and other
insurance. At its headquarters office, located at Monroe-
ville, Pennsylvania, it employs in all about 50 people, of
whom about 30 are in the bargaining unit represented by
the Union. Under CFU bylaws all of Respondent's
employees must be members of the Society.
The Union for more than 20 years has been the
recognized exclusive bargaining representative of CFU's
employees in a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9(b) of
the Act, described in an admitted allegation of the
complaint as follows:
All office employees employed by Respondent at its
Pittsburgh, Pennsylvania, facility; excluding all other
employees and guards, professional employees and
supervisors as defined in the Act.
The latest of a number of successive collective-bargaining
contracts to which Respondent and the Union have been
parties was negotiated in December 1975 for a 3-year term
beginning on January 1, 1976.
The contract between CFU and the Union contains an
article which provides that if "any grievance or dispute
[arises] between the parties during the term of this
agreement," the grievance or dispute is to be subject to
grievance procedures detailed in that article. The article
further provides that in the event of a "failure to reach
satisfactory agreement" after the several steps of the
grievance procedure have been completed, the grievance
may be taken to final and binding arbitration; with the
arbitrator's fee to be borne equally by the parties.
The contract contains no provision with respect to the
subcontracting of unit work, with respect to the holding of
union meetings on Respondent's premises, or with respect
2 Concerning Respondent's past practice in contracting out of unit work.
there is evidence reflecting that there have been some occasions in the past
when Respondent. without objection from the Union, hired Kelly girls on a
temporary basis to perform overflow office work or contracted out typing
work when there were special jobs to he done. In no instance. however, did
to the use by employees of telephones on Respondent's
premises.2
B. The Alleged Unilateral Subcontracting of Unit
Work
The alleged unilateral subcontracting occurred on March
7, 1976. Pnor to that time, Respondent performed its data
processing work with its own employees, using a leased
Honeywell computer that had been installed on its
premises in 1969. Five of Respondent's employees were
engaged in its computer operations, one of them parttime.
Three of these employees were in the office employees'
bargaining unit - Ann Vucic worked as a keypunch
operator, Charles Lesko as a computer operator, and Janet
Dunn halftime as a keypunch operator. (Dunn performed
other office clerical functions during the balance of her
working time.) The other two employees, Myron Yoho and
William Lockner, were employed as computer program-
mers and were deemed not covered by the Union's
contract with Respondent.
It was stipulated that for some years prior to 1976
Respondent had been unhappy with the efficiency and
economy of its computer operation, and had been seeking
ways to improve it. In 1974 and again in 1975, Respondent
brought in outside firms to make studies of its data
processing system. Respondent's office employees were
introduced to and requested to cooperate with those
making studies. They were assured by Respondent at that
time that none of their jobs was in jeopardy.
In December 1975, Respondent and the Union conduct-
ed negotiations for a new contract to supersede the
contract expiring at the end of that month. At one of the
meetings, Respondent's vice president, Vrenas, in the
context of a general discussion about conditions at the
office, expressed his displeasure with the lack of progress
Respondent was making in improving the effectiveness of
its computer operation. Vrenas testified that he made a
comment while doing so that he was "prepared" to farm
out the computer work; he further testified, however, that
he "did not say this was going to be done." Vrenas'
testimony in that respect is disputed by the General
Counsel's witnesses, Bursic and Lesko. It is undisputed,
however, that the subject of subcontracting was not raised
by either party as a specific item for discussion at the
negotiating meetings.
In late January 1976, Lycor, a computer management
company, submitted to Respondent a proposed agreement
for the management by Lycor of Respondent's data
processing operation. Under its proposal, Lycor was to
assume all the responsibilities and costs of that operation
as a facilities manager and to become in essence Respon-
dent's data processing department with complete authority
to hire and dismiss employees in that department.
On February 23, 1976, Respondent's executive board
voted to accept the Lycor contract proposal and to have
Lycor take over the management of its computer operation
this result in the displacement of bargaining unit employees. CFU's contract
with the Union allows it to hire temporary or emergency workers for the
performance of unit work for penods not exceeding 4 months in duration.
without subjecting such employees to the provisions of the contract.
1011
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the following Monday, March 1, 1976. On February 24,
Respondent executed the proposed contract that Lycor
had submitted.3 This was done without prior notice to or
consultation with the Union.
On February 25, Respondent's president, Badovinac,
informed Louise Bursic, the Union's steward, that he
wanted the Union to meet with Respondent's executive
board on Friday, February 27. When Bursic communicat-
ed Respondent's request to the Local 33 office, she was told
that Business Agent Homitz could not come on Friday
because of other previously scheduled engagements, but
could attend on Monday. When informed of this, Badovi-
nac told Bursic, "That's too late . . . you can come by
yourself." Bursic asked what the meeting was to be about.
Badovinac vaguely replied that it would be about "various
things," making no mention of the decision Respondent
had made, and in fact had already implemented. to
contract out the management of its data processing
operation.
On Friday, February 27, Bursic met with Respondent's
executive board. Badovinac informed Bursic that Respon-
dent had decided to lease out to Lycor its computer
department because of the difficulties it had experienced
with that operation; that Respondent was, therefore,
terminating its data processing employees as of the close of
business that day; but that Respondent had arranged with
Lycor to have Lycor hire the employees Respondent was
terminating. Badovinac further informed Bursic that the
terminated employees represented by the Union would
receive from Respondent their accrued vacation and
severance pay as provided for in the union contract and
also have their pensions "frozen" as of that date. Bursic
asked whether the employees could exercise their seniority
bumping rights in the bargaining unit if they did not want
to go to Lycor. Badovinac responded that they had no such
rights and that no alternative was open to them if they did
not want to go to Lycor.
Immediately following the meeting with Bursic, Badovi-
nac called Vucic, Lesko, Yoho, and Lockner, but not
Dunn, to a meeting with the CFU executive board, at
which he notified them that they were being terminated by
Respondent as of the end of that day and that they would
be working for Lycor beginning on Monday.
On the afternoon of February 27, Vucic and Lesko were
hired by Lycor. Presumably, Yoho and Lockner were also
hired, although the record does not show this as no further
evidence was developed concerning these two individuals
who were not in the bargaining unit. Vucic and Lesko
began working as employees of' Lycor on Monday, March
1. At the time of the hearing, some 10 months later, they
were still so employed. Their place of work has remained
unchanged, and so has the work they do. Dunn, the
halftime keypunch operator was not terminated by Re-
spondent. She remained an employee of Respondent until
she left to get married some 3 months later. During that 3-
month period she continued as before to perform keypunch
3 The date of Respondent's execution of the Lycor contract is shown on
Resp Exh. 7 for identification. When offered in evidence by Respondent as
part of a group of other documents. that exhibit was inadvertently rejected
by me as redundant because of a stipulation to which the General Counsel
work, the same work that Vucic now was doing as an
employee of Lycor.
Vucic was hired by Lycor at the same salary she was
receiving as an employee of Respondent. Had she re-
mained with Respondent, however, her earnings would
have been greater than it was at Lycor after January 6,
1977, because of wage and cost-of-living increases provided
for in Respondent's contract with the Union that became
effective on that date. Lesko started with Lycor at an
annual salary that was $500 more than he had received
from Respondent. The increase he would have received on
January 6, 1977, had he remained with Respondent, would
not have made that difference, but Lesko testified that with
overtime hours, his earnings would have been greater had
he remained with Respondent. Some of Lycor's fringe
benefits for employees were more advantageous for
employees than Respondent's; this was so with respect to
life, health, and disability insurance coverage. In other
respects, however, they were less advantageous. Thus, as
employees with more than 10 years' service at Respondent,
Vucic and Lesko would have been entitled to 4 weeks'
vacation, whereas new employees of Lycor were entitled to
only I week. More important, Respondent has a noncon-
tributory pension plan. Lycor has no pension plan. It does
have, perhaps as a substitute for this, an employee profit-
-sharing plan. The testimony given by a witness for
Respondent concerning the technicalities of that plan is
confusing and obscure, but this much is clear: Lesko and
Vucic would have to work for Lycor a minimum of 4 years
before they could derive any benefit from that plan. To
Vucic, who is 57 years of age, the freezing of her interest in
Respondent's pension plan was of serious import. As an
employee over 55 years of age with more than 10 years of
service, she was entitled when terminated to a reduced
annuity, which she has received. But had she continued in
Respondent's employ for not many more years, she would
have been entitled upon retirement to a full and substan-
tially larger annuity. She had been looking forward to a full
annuity upon retirement. And the cutting off of that
expectation was particularly disturbing to her.
On March 1, 1976, the Union invoked the contract's
grievance procedure. In its grievance communication to
Respondent, it defined its dispute with Respondent as
being based upon (I) Respondent's subcontracting of its
data processing department, (2) the status of employees in
that department re: benefits, wages and working condi-
tions, and (3) Respondent's failure to bargain with the
Union in good faith by not notifying the Union of its
subcontracting intentions. At the end of April or the
beginning of May, a meeting was held to discuss the
Union's grievance. At this meeting, the Union complained
about Respondent's unilateral action and its effects on the
employees involved; Respondent stated its reasons for
subcontracting out to Lycor the management of its data
processing operation and insisted that it had acted within
its rights. The meeting broke up with the understanding
that Respondent would consult with its attorneys and that
had agreed. It was then placed by Respondent in the rejected exhibit file as
an offer of proof. Upon further consideration, I now reverse my previous
ruling with respect to Resp. Exh. 7 and admit that document into evidence.
1012
CROATIAN FRATERNAL UNION OF AMERICA
a further meeting would then be arranged. So far as
appears, no further meeting was held.
On June 18, 1976, the Union filed with the Board its
unfair labor practice charge in this proceeding.
As noted above, the complaint alleges that Respondent
violated Section 8(a)(5) by unilaterally subcontracting its
data processing work to Lycor and terminating employees
Vucic and Lesko. Respondent disputes the merits of that
allegation, asserting in general (I) that the Union waived its
right to bargain about the subcontracting by remaining
silent on that subject, although it had been placed on
notice - by the studies that outside firms had made of
Respondent's data processing system and by Vrenas'
comment at the 1975 negotiating meeting - that Respon-
dent was contemplating the subcontracting out of its
computer operation; (2) that even if the Union did not
waive its right to bargain, Respondent's subcontracting
action did not constitute a violation of the Act because its
action was motivated by pressing economic circumstances,
which could not have been avoided by bargaining, and also
because its action had no significant adverse impact on the
employees affected thereby; and (3) that Respondent had a
prior practice of subcontracting unit work to which the
Union had never objected; i.e., the hiring of Kelly girls and
the contracting out of typing work when there were special
jobs to be done.
C. Respondent's Alleged Unilateral Action Banning
Further Union Meetings on Its Premises
On June 17, 1976, Respondent, by letter, notified Louise
Bursic, the Union's steward, that its executive board had
decided that no further union meetings would be permitted
on its premises. The letter stated that Respondent had been
prompted to issue that directive because it had learned that
at least three employee meetings had been held on its
premises without the permission of an executive officer.
Louise Bursic became the union steward in the summer
of 1975. There is no evidence that employees had ever held
union meetings on CFU premises without permission prior
to that time. Lesko, who preceded Bursic as the union
steward, testified that during the 3 years he served in that
capacity it had been his invariable practice to obtain
permission before convening employee meetings on Re-
spondent's premises. During Bursic's stewardship, five
union meetings were held on CFU premises. Two, held in
December 1975, were related to the negotiations for a new
contract that were conducted during that month. Both of
these December meetings were held in the CFU board
room. Bursic requested and obtained company permission
for one of them. She testified that she did so on this single
occasion because the meeting was to be held after office
hours. There is no evidence that Respondent's officers were
aware of the other meeting held in December. There are no
offices on the third floor of the building where the CFU
board room is located, and Bursic conceded that it was
possible for a meeting to be held in that room without
Respondent's officers being aware of it.
The remaining three meetings during Bursic's steward-
ship took place during the period between March I and
June 17. Two of these meetings were called by Bursic to
report to the employees the progress of the Union's
grievance against Respondent. These meetings, each of 10
minutes duration, were held during the lunch period in the
open general offices area where 15 of the 25 employees who
attended these meetings have their place of work. The
offices of Respondent's executive board are adjacent to the
general offices area, and it is clear from the record that
Respondent's officers became aware of these meetings
either at the time they were being conducted or soon
thereafter. The last meeting, apparently held shortly prior
to June 17, was called by Bursic to discuss with the
employees (who are members of CFU as well as of the
Union) Respondent's failure to publish in the CFU official
organ a letter to the editor that was critical of Respondent's
subcontracting action. That meeting, which lasted about
one-half hour, was held in the CFU board room during the
lunch hour.
The Union never requested any discussion with Respon-
dent concerning the latter's June 17 edict prohibiting
further union meetings on CFU premises. Nor did it ever
lodge any protest or grievance with Respondent with
regard to that action. The unfair labor practice charge filed
by the Union on June 18, 1976, made no mention of that
action.
As noted above, the complaint alleges that Respondent
violated Section 8(a)(5), and derivatively Section 8(a)( ), by
imposing its ban on further meetings on its premises
without prior notice to and consultation with the Union.
This is the only unfair labor practice violation that is
alleged in the complaint with regard to Respondent's
action in this respect. Respondent disputes the merits of
this allegation, asserting (1) that the use of its premises for
union meetings is not a mandatory subject for collective
bargaining and (2) that, even if it is, the evidence does not
establish a past practice.
D. Respondent's Alleged Unilateral Ban on
Employee Telephone Calls
On June 17, 1976, the same day that it directed its letter
to Bursic prohibiting further union meetings on its
premises, Respondent also circulated a memorandum to
"The Staff' prohibiting employees, except in emergencies,
from making or receiving personal telephone calls through
the office switchborad, and requiring employees desiring to
make such calls to use the public pay station in the lobby of
the building. The memorandum stated that Respondent
was taking that action because of its "soaring monthly
telephone bills" and "in view of the [employees] abuse of
the telephone privilege."
For many years prior to June 17, 1976, Respondent's
office employees had made and received personal tele-
phone calls through the office switchboard. The employees
had never been told that they could use the office phones
for their personal use, but neither had they ever been
forbidden from doing so. Respondent, as its June 17
memorandum reflects, had theretofore regarded the em-
ployees personal use of its phones as a privilege that they
might enjoy but not one that they could abuse. There had
been occasions over the course of years when Respondent's
management officials had complained to employees that
their excessive use of the phones was tying up the office
switchboard lines, or that office phones were improperly
1013
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
being used for toll calls that were unduly increasing
Respondent's telephone costs. But until June 17, 1976,
Respondent had never imposed an absolute ban on its
employees personal use of its office telephones. It is
undisputed that the ban was imposed by Respondent
without prior notice to or consultation with the Union.
The Union has never filed a grievance against Respon-
dent, nor requested discussion or bargaining with Respon-
dent, concerning the latter's prohibition of personal calls.
The complaint alleges that Respondent's prohibition of
personal calls constituted unilateral action violative of
Section 8(a)(5). Respondent disputes the merits of that
allegation on the same grounds that it disputes the
complaint's allegation relating to union meetings on
company premises.
E. The Issue of Deferral
1. Introduction
As its primary position in this proceeding, Respondent
asserts that the disputes underlying the complaint's 8(a)(5)
allegations should be deferred to arbitration under the
Board's Collyer doctrine.4 Respondent has met the formal
prerequisites for application of that doctrine by acknowl-
edging its willingness to arbitrate all matters in issue and to
waive any contractual time limitations on the filing and
processing of grievances to arbitration. The General
Counsel opposes deferral basically on the ground that the
Union is unable to undertake the costs of arbitration
because of its financial condition. Although refraining at
the hearing from committing himself on this point, the
General Counsel in his brief to me in effect concedes that,
but for the factor of the Local's financial condition, he
would have regarded this as an appropriate case for Collyer
deferral.
At the hearing, I expressed doubt that the concession
now made by the General Counsel is a valid one. The
contract does not address itself to the substantive matters
involved in Respondent's alleged unlawful unilateral
conduct, and Respondent has not pointed specifically to
any language in the contract that might even arguably be
read as privileging unilateral action with regard to such
matters. In these circumstances, I questioned whether this
case can be said to present a situation, such as I believed to
be envisaged by Collyer, where a "substantial" question of
contract interpretation or application lies at the core of a
dispute and the resolution of that question by an arbitrator
will also resolve the unfair labor practice issue.5 But after
careful study of Board decisions elaborating on the Collyer
rationale, I am now satisfied that the General Counsel's
concession is a proper one. Under my reading of Board
law, as it stands today, in an 8(a)(5) case involving issues
such as we have here, a showing that the matters in
controversy arguably fall within the ambit of a contract's
arbitration clause is enough to invoke application of the
Board's deferral policy. For confirmation of this, one need
search no further than the Board's recent decision in Roy
4 Collyer Insulated Wire, supra.
5 See Coll ver, supra, 841 842, quoting from Jos. Schlitz Brewing Company.,
175 NLRB 141 (1969); Oak Cliff-Golman Baking C(ompan, 207 NLRB 1063
(1973), concurring rationale of former Chairman Miller; Harley Davidson
Motor Co., Inc.. MF 214 NLRB 433. 439(1974).
Robinson Chevrolet, 228 NLRB 828 (1977).6 In the instant
case, the contract's grievance-arbitration provision is
applicable to "any grievance or dispute arising between the
parties during the term of this agreement." That clause is
broad enough in scope to render the disputes in this case
susceptible to resolution under its procedures. Indeed, the
Union acknowledged as much when it invoked the
contract's grievance procedure on March i, 1976, to
complain of Respondent's unilateral subcontracting of its
computer operation.
Left for consideration, then, is the General Counsel's
contention that the Board's deferral policy should not be
applied in this case because of the Union's inability to bear
the financial burden of arbitration.
2. The facts relating to the Union's asserted
financial inability to arbitrate
The Union (Local 33) has approximately 600 members,
not all of whom regularly pay dues. It services some 70
collective-bargaining contracts covering widely scattered
bargaining units. The largest of these bargaining units
contains only 40 employees, and only 7 have more than 20
employees.
At the end of 1975, Local 33 had less than $200 in cash
and in banks, as contrasted to the $3,000 it had in its
treasury at the end of the previous year. Its only other asset
consisted of office furniture and equipment which it valued
at $1,000. It then owed about $900 for fees it had incurred
in an arbitration proceeding some 2 years earlier, and it
was 2 months in arrears in the payment of per capita taxes
to its parent International ("OPEIU"). In late December
1975, Local 33 requested voluntary International trustee-
ship because of its straitened financial condition. The
trusteeship went into effect on January 12, 1976. The
International appointed George Porcaro, an International
representative, to act for it as the trustee. Local 33 was still
under OPEIU trusteeship at the time of the hearing. Under
the OPEIU constitution, a local, while under trusteeship,
continues to function as a separate entity, with its own
officers and business agent, and alone remains liable for
the payment of its operating costs and expenses. The
function of the International trustee is to manage the
business affairs of the local to aid it in establishing
financial soundness.
In March .1976, Local 33 increased its membership dues,
and in July of that year the International granted it a $500
monthly "organizing subsidy." Porcaro testified that the
subsidy was granted to enable Local 33 to hire a business
agent to pursue organizing leads. (The previous business
agent had been terminated by Porcaro several months
before.)
During the 12-month period ending December 31, 1976,
Local 33 had gross receipts of slightly in excess of $46,000,
of which approximately $43,500 was derived from dues and
initiation fees and $2,500 from the OPEIU subsidy
payments. Local 33's disbursements during the same
period totaled approximately $45,000. The largest single
I See, in particular, 228 NLRB 828, 829-830. See also Radioear
Corporation, 199 NLRB 1161 (1972); J. Weingarten, Inc., 202 NLRB 446
(1973).
1014
CROATIAN FRATERNAL UNION OF AMERICA
disbursement item, except for salaries and wages, was for
per capita tax payments to OPEIU; that item amounted to
$11,775. 7 Local 33 finished the year with $1,127 in its
treasury, but at that time, according to Porcaro, still had an
outstanding indebtedness of $900 for the arbitration
expenses it had incurred some 3 years earlier. Porcaro
testified that Local 33 is now operating on a current basis,
but that it is able to do so only because of the $500 monthly
subsidy which it is continuing to receive from its parent
International.
During 1976, Local 33 was involved in two arbitration
proceedings. Its only expense in one of them (in which it
was successful) was a $50 witness fee. The contract with the
employer involved in that arbitration required the losing
party to bear the costs of arbitration. Porcaro testified that
as of the time of the hearing, Local 33 had not yet paid the
fees for the other 1976 arbitration proceeding, and hoped it
would not have to pay; his testimony is not clear, however,
why that is so. At the time of hearing in this case, Local 33
also had an unsettled grievance against Respondent herein,
arising from the latter's discharge of Louise Bursic, with
respect to which it had invoked the contract's arbitration
procedures. Porcaro testified that he didn't know where the
money would come from to pay for that arbitration, but
that thought was being given to request voluntary contribu-
tions from employees in the CFU bargaining unit to cover
the costs of that arbitration.
Local unions are authorized under the OPEIU constitu-
tion to levy membership assessments to cover special
expenses, provided that such assessments have been
approved by a majority vote of the local's membership.
The constitution, however, limits the amount of any such
assessment to $1 per member per month, and not more
than $4 per year. Porcaro testified that the Local 33
executive board had considered the possibility of raising
money through a membership assessment to pay for
arbitration expenses, but had concluded that it could not
reasonably expect its members to vote for such an
assessment on top of the increase in union dues that the
Local's executive board, with great difficulty, had only
recently induced the membership to approve. When asked
why the International could not itself pay for the Local's
arbitration expenses, Porcaro responded that it was not the
International's obligation to pay. There is nothing in the
record to suggest that Local 33 sought financial assistance
from the International for that purpose.
Porcaro testified that the services of the OPEIU's general
counsel were available to a local for consultation and
advise, but that the local would be billed for his legal
services if he represented it in an arbitration proceeding.
This would be so even if the local was under International
trusteeship, according to Porcaro. The local could, how-
7 The salary and wage item covering all paid officers, the business agent.
and the office secretary, totaled $12,300 (apparently a net figure after tax
and other withholdings). Other major disbursement items were payments to
OPEIU pension and welfare funds $4.000; Federal and state taxes -
$3.800; business agent's expenses - $3.400; and rent $1,300.
x Although Administrative Law Judge Pannier rejected the financial
disparity contention pnmarily on the ground that it was not supported by
persuasive evidence, he made clear in his Decision that he would have in
any event rejected it for two other reasons. First, he would have found
implicit in the union's agreement to arbitrate a representation by the union
that it was financially capable of performing its agreement and would have
ever, request the assignment by OPEIU of an International
representative to represent it without cost in an arbitration
proceeding. It appears that it is not an uncommon practice
for OPEIU locals to use International representatives
rather than retain attorneys for arbitration proceedings.
This was done by Local 33 in the two arbitration
proceedings it had in 1976. Porcaro admitted that he has
himself represented OPEIU locals in about 30 to 50
arbitration proceedings. But he did not consider himself
qualified, he testified, to do so in a case in which the issues
to be arbitrated were as complex as those in the instant
case.
3. Discussion and Concluding Findings on Deferral
Issue
The first question that must be considered is whether the
Board's Collyer deferral policy is applicable to a case which
normally would fall within its ambit but in which the
charging party is in no financial condition to bear the costs
of arbitration. That question has not heretofore been
considered and ruled upon by the Board in the context of a
case in which a charging party's financial condition was
specifically urged as a reason for not applying the Collyer
doctrine. So far as I have been able to ascertain, a
contention similar to the one here has heretofore been
made by the General Counsel in only one case. In
Anaconda Copper Company, 224 NLRB 1041 (1976), the
General Counsel contended that the Collyer deferral
doctrine should be found inapplicable because of the
union's "dire" financial condition and the financial
disparity between the union and the respondent in that
case. That contention, following litigation of the issue it
presented, was ruled upon by Administrative Law Judge
William J. Pannier 111II adversely to the position of the
General Counsel. 8 The Board in its decision, however,
disposed of the case on a different ground, and expressly
refrained from commenting on Administrative Law Judge
Pannier's findings and conclusions relating to the General
Counsel's contention stated above.
There is nothing in Collyer itself, or in any of the
numerous Board decisions that have dealt with Collyer
deferral issues, to indicate that the Board intended a
union's financial condition to be relevant to a determina-
tion of whether deferral should take place. An indication to
the contrary is to be found in the failure of the Collyer
majority decision to address itself to Member Jenkins'
concern, expressed by him in his dissent, about the impact
that a deferral policy might have on small unions or
financially weak firms due to the "heavy expense of
arbitration" (192 NLRB at 854).9
held the union bound by that representation in a Collver deferral situation.
Secondly, he would have recommended rejection of a financial disparity
exception to the Board's Collier deferral policy because such an exception
was likely to give rise to financial dispanty claims in every Collyer type case
where the least degree to disparity was involved, and to create for the Board
problems in the application of that exception "so involved and complex
as to relegate the basic Collyer doctnne to the status of a preamble to the
exception."
I Note is also taken of the observation by Board Members Penello and
Walther in their dissent in General American Transporration Corporation, 228
(Conlinuedl
1015
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The General Counsel in his brief argues that the Collyer
deferral policy is inapplicable to this case because "Collyer
is predicated upon a quick and fair means for resolution of
the underlying dispute" and "[the Unions] financial
condition invalidates the quick and fair premise of
Collyer. "
The General Counsel's formulation of the Collyer
premise, however, is neither a complete nor a precisely
accurate one. The Collyer doctrine is bottomed on the
thesis that where a union and an employer have voluntarily
agreed to a grievance-arbitration procedure under which
the controversy before the Board may be resolved, it will
best serve the policies of the Federal labor laws for the
Board to withhold its own processes and to require the
charging party to adhere to the agreed-upon procedures for
the settlement of disputes, subject only to the reserved right
of the Board to invoke its own processes should it later
appear that the arbitration procedure has not been fair and
regular or has led to a result repugnant to the policies of the
Act. The Collyer doctrine is basically premised on the
desirability of effecting an accommodation between the
statutory policy reflected by the grant to the Board of
exclusive jurisdiction to prevent unfair labor practices, on
the one hand, and, on the other, the Federal policy
favoring the fullest use of the arbitral process for the
resolution of labor disputes. As was stated by the Board in
Collyer at p. 843:
When a contract provides for arbitration, either party
has at hand legal and effective means to ensure that the
arbitration will occur. We believe it to be consistent
with the fundamental objectives of Federal law to
require the parties here to honor their contractual
obligations rather than, by casting this dispute in
statutory terms, to ignore their agreed-upon proce-
dures. [Emphasis supplied.]
Since the Board's promulgation of the Col ver doctrine,
the Board in a number of decisions, most notably in
General American Transportation Corporation. supra, has
excluded certain categories of cases from the application of
that doctrine, finding in effect that, on balance, the policy
considerations supporting the use of its own preventive and
remedial processes outweigh the policy considerations
supporting deferral to arbitrationto But in the category of
cases still retained by the Board under that doctrine a
category in which this case falls - the rationale and
NLRB 808. 818 (1977), that a unitin which has agreed to arbitrate "is not in
a position to complain about costs when it is called upon to live up to its
agreement."
"' See also. e.g.. Kansas Meat Packers, a Division of Aristo Fords. Inc.. 198
NLRB 543 (1972); Joseph T Ryerson & Sons, Inc.. 199 NlRB 461 (1972).
l See Roy Robinson Chevrolet. 228 NI RB 828 (1977).
1' In Local Union No. 2188, v. N. L R.B., 494 F.2d. 1087, IYl9 (t.A.D.('.,
1974), the court upheld the legality of the ('oilyer rule, but did so with this
caveat:
Our endorsement of' the (Coliver rule would be incomplete without
one further comment. While the Board's promise to overrule arbitration
awards which are irregular or repugnant to the Act is a necessary
condition to the legality of pre-arbitral deferrals, it is not a sufficient
one. Put another way, the fact that any ultimate award must conform to
the policies of the Act does not gua;rantee that delerral itself is
consistent with the Act. Pre-arbitral deterral might constitute an
effective denial of any remedy if'. for example, arbitration of the dispute
objectives of Collyer must be viewed as remaining in full
force and effect.
I find no basis for reading into Collyer a financial
hardship exception such as is suggested by the position the
General Counsel takes in this case. Such an exception, in
my view, would be wholly at odds with Collyer's basic
principle that parties who have agreed upon an arbitration
procedure for the resolution of their disputes should
"honor their contractual commitments" instead of utilizing
Board processes for the adjudication of alleged unfair labor
practices that are susceptible to resolution by their agreed-
upon procedures. Under contract law, a party to an
arbitration agreement cannot refuse to "honor his contrac-
tual obligation" when called upon to do so on the ground
that he cannot afford its costs. The same principle is
implicit in Collyer. I agree with Respondent that, under
Collyer, a charging party's financial ability to arbitrate
must be assumed by the Board and may not be considered
a relevant factor in determining whether deferral should be
directed.
It is true, of course, that if a charging party's financial
condition is such as to preclude it from taking a case to
arbitration, the pragmatic effect of Board deferral is to
leave the dispute unresolved and the putative unfair labor
practice unremedied. Perhaps such a case should be
excepted from the application of Collyer; indeed one court
has suggested in obiter dictum that it must be if the policies
of the Act are to be effectuated.2 But the question of
whether or not the Board's Collyer rule should be modified
in this respect is one that calls for a policy judgment that
must be made by the Board.t 3 At my level, I have no
choice but to apply the Collyer rule in accordance with its
intent as I find it.
Accordingly, I rule that Respondent's financial condition
is irrelevant to the deferral issue in this case. Having earlier
found that the Board's criteria for Collyer deferral have
otherwise been met in this case, I shall recommend
dismissal of the complaint, subject to the qualification
stated in the recommended Order below.
ORDER 14
It is recommended that the complaint herein be dis-
missed: provided, however, that the Board shall retain
jurisdiction of this proceeding for the purpose of entertain-
ing an appropriate and timely motion for further consider-
ation upon a proper showing that either (a) the dispute has
would impose an undue financial burden upon one of the parties.
Dismissal of the complaint in such a case would be contrary to the
policies of the Act although all other critena for application of the
Col(t er doctrine are met.
s A financial hardship exception would, of course, require separate
consideration and determination of its application in each case in which it is
urged. For a thoughtful discussion of the kinds and complexity of problems
that the Board would encounter if such an exception were engrafted on the
Collyer doctrine, see Administrative Law Judge William J. Pannier's
thoughtful discussion in Anaconda Copper Companr, supra at 1048.
' In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings.
conclusions. and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations, he adopted by the Board and become
its findings. conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes.
1016
CROATIAN FRATERNAL UNION OF AMERICA
not, with reasonable promptness after issuance of this
Decision, been either resolved by amicable settlement in
the grievance procedure or submitted promptly to arbitra-
tion; or (b) the grievance or arbitration procedures have
not been fair and regular, or have reached a result which is
repugnant to the Act.
1017