Greater Pennsylvania Avenue Nursing Center, Inc.

National Labor Relations Board - Board Decisions

Jan 16, 1985

273 N.L.R.B. 1458 (N.L.R.B. 1985)

MEAD PACKAGING 1457
Union nor has Respondent's conduct related to Meers,
Moss, or Currie violated Section 8(a)(5) of the Act
Respondent Mead Products' contract is silent with
regard to any limitations on receipt of pension benefits
for employees on leaves of absence. The parties did stip-
ulate that the past practice for employees on leaves of
absence for any reason other than union employment dis-
allowed receipt of negotiated pension benefits for a
period longer than 2 years. In effect this practice was an
implementation of the contract terms relating to leaves
of absence (not for union employment) and the pension
plan. Union-related leaves of absence have a specified
term of 4 years which exceeds the stipulated past prac-
tice for terms of other leaves of absence thereby creating
a different period of time for cessation of the employ-
ment relationship. In my view, it is clear that the past
practice of limiting receipt of negotiated pension benefits
to 2 years for employees on leaves of absence unrelated
to union employment does not apply to employees on a
union-related leave of absence whether the employee is
within the first 2-year term or in the extended 2-year
term. The stipulated past practice obviously relates di-
rectly to the unspecified terms of personal and medical
leaves of absence and is an attempt to coincide the re-
ceipt of benefits with the term of the leave of absence
and the cessation of employment.
Since Turner's group insurance benefits and pension
benefits were terminated by Respondent Mead Products
on March 31, 1981, 2 months before his leave of absence
would terminate under the contract, such termination
was premature and violates Section 8(a)(1) and (5) of the
Act By contract, Turner was entitled to receive the ben-
efits up to and including May 1, 1981 At that time
Turner would have completed the allowable 4 years of
his leave of absence. He would have at that time an elec-
tion to continue in the employ of the Union or return to
the bargaining unit with no loss of seniority or contrac-
tual privileges. Respondent must give Turner this pre-
rogative as of May 1, 1981
ADDITIONAL CONCLUSIONS OF LAW
L Respondent Mead Products, by terminating group
insurance benefits and pension benefits of Albert Turner
Jr. on March 31, 1981, has engaged in conduct violative
of Section 8(a)(1) and (5) of the Act.
2. Respondents have not, other than found above, vio-
lated the Act.
3. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Having found that Respondent Mead Products has en-
gaged in certain unfair labor practices, I find it necessary
to order Mead Products to cease and desist and to take
certain affirmative action designed to effectuate the poli-
cies of the Act. In view of the fact that payments have
been made to the insurance carrier on behalf of Meers,
Moss, and Currie for the past years and pension credits
have been assessed to Meers, Moss, and Currie for this
same period, which included several years of payments
outside the contractual terms and the past practice under
the contract, but at the same time the excess payments
were inadvertent with no apparent intent to deceive the
bargaining unit employees, I shall not order any restitu-
tion of those past payments.
Respondent Mead Products must, however, reinstate
the group insurance benefits payments and pension bene-
fits credits to Albert Turner Jr. to continue until the
stated times and conditions found above.
[Recommended Order omitted from publication.]
1458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
District 1199E, National Union of Hospital and
Health Care Employees, Retail, Wholesale and
Department Store Union, AFL-CIO (Greater
Pennsylvania Avenue Nursing Center, Inc.) and
Fred Punch. Case 5-CB-2173
16 January 1985
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 7 September 1978 the National Labor Rela-
tions Board issued its Decision and Order in this
proceeding,' in which it adopted the administrative
law judge's finding that Respondent District
1199E, National Union of Hospital and Health
Care Employees, Retail, Wholesale and Depart-
ment Store Union, AFL-CIO, violated Section
8(b)(3) of the Act by refusing to bargain with
Olympic Management Services, Inc. Upon a peti-
tion for review and a cross-application for enforce-
ment of the Board's Order, the United States Court
of Appeals for the District of Columbia Circuit re-
manded the case to the Board for the purpose of
determining the effect, if any, on the Board's origi-
nal findings of fact and conclusions of law of both
the collective-bargaining agreement between the
Respondent and Greater Pennsylvania Avenue
Nursing Center, Inc. and a 6 June 1977 arbitration
award pursuant thereto.2
After receiving statements of position from the
parties, the Board thereafter remanded the case to
the administrative law judge to reopen the record
to admit the collective-bargaining agreement and
the arbitration award, and for further findings con-
sistent with the court's remand.
On 15 February 1983 Administrative Law Judge
Herzel H.E. Plaine issued the attached supplemen-
tal decision. The Respondent filed exceptions and a
supporting brief.
The Board has considered the supplemental deci-
sion and the record in light of the exceptions and
brief and has decided to affirm the judge's rulings,
findings, and conclusions only to the extent consist-
ent with this Decision and Order.
The relevant facts are as follows:
Greater Pennsylvania Avenue Nursing Center,
Inc. (Greater Pennsylvania) and the Respondent
entered into a collective-bargaining agreement in
September 1975 which expired 30 June 1978. In
October 1976 Greater Pennsylvania notified the
Respondent of its intention to subcontract its die-
tary, housekeeping, and laundry services to Olym-
1 238 NLRB 9
2 Hospital Employees District 1199E v. NLRB, 613 F.2d 1102 (1979).
pic Management Services, Inc. (Olympic). When
the Respondent failed to request bargaining, Great-
er Pennsylvania signed an agreement with Olym-
pic.
Olympic retained all of Greater Pennsylvania's
former employees. It also agreed to abide by the
terms of the Respondent's collective-bargaining
agreement, except for the health and welfare provi-
sions. The Respondent, however, insisted that
Olympic accept the entire agreement, including
health and welfare provisions. When Olympic re-
fused, the Respondent sought arbitration under its
agreement with Greater Pennsylvania on whether
Greater Pennsylvania's subcontracting had
breached the collective-bargaining agreement.
Prior to the issuance of the arbitration award,
Olympic filed the unfair labor practice charges
which are the subject of this proceeding. On 6
June 1977, after the hearing before the judge but
before a decision, the arbitrator issued an award in
favor of the Respondent, in which he concluded
that Greater Pennsylvania's subcontracting of the
dietary, housekeeping, and laundry services during
the term of an existing collective-bargaining agree-
ment constituted a breach of contract.
The judge thereafter issued a decision on the
unfair labor practice. He found that Greater Penn-
sylvania had given proper notice of its willingness
to bargain, and the Union had not responded. He
therefore concluded that the subcontracting was
lawful under Board law, and that the Respondent's
subsequent insistence that Olympic abide by all of
the terms of the agreement with Greater Pennsyl-
vania was an unlawful refusal to bargain under
Section 8(b)(3) of the Act.
With respect to the arbitration award, the judge
found deferral inappropriate because Olympic was
not a party to the award; the award did not consid-
er the unfair labor practice; and, in the opinion of
the judge, the award was contrary to the United
States Supreme Court's decision in Fibreboard
Corp. v. NLRB, 379 U.S. 203 (1964). The Board
adopted the judge's decision with a minor modifi-
cation of the Order.
On review, the court found that the Board "did
not give adequate consideration to the Union's de-
fense based on the collective bargaining agreement
and the Arbitrator's interpretation of it." 3 The
court therefore remanded the case to the Board to
determine if the collective-bargaining agreement
applied to subcontracting and, if so, if the subcon-
tracting violated the agreement. In remanding the
case, the court disagreed with some of the adminis-
trative law judge's findings with regard to the inap-
3 613 F.2d at 1103.
273 NLRB No. 173
HOSPITAL EMPLOYEES DISTRICT 1199E (PENNSYLVANIA AVENUE NURSING) 1459
propriateness of deferral. The court stated that it
"would probably have approved NLRB deference
to the award because Greater Pennsylvania and
Olympic were completely in privity by operation
of the November, 1976 contract. Greater Pennsyl-
vania 'fully and adequately defended' Olympic's
position in the arbitration."
The court further found that the arbitrator was
competent to decide the subcontracting question.
Finally, the court concluded, contrary to the
Board, that Fibreboard was distinguishable because
in Fibreboard, "unlike the case before us . . . there
was no suggestion . . . that the contracting out
violated any collective bargaining agreement (613
F.2d at 1108)."
As noted before, we accepted the court's remand
and thereafter remanded the case to the judge for
further findings of fact and conclusions of law con-
sistent with the court's decision. The judge recom-
mended that the Board reaffirm its denial of defer-
ence to the arbitrator's award and readopt the find-
ing of the violation. Contrary to the arbitrator, the
judge found on the record before him that there
was substantial evidence of a business justification
for the subcontracting. Furthermore, he reiterated
his finding that the Board should not defer to the
award because Olympic was not a party to the ar-
bitration.
The Respondent excepts to the judge's findings.
It argues that the judge failed to resolve the con-
tractual question, and that the reasons advanced by
the judge for refusing to defer are not substantial.
In particular, it asserts, in agreement with the
court, that the absence of Olympic as a party does
not render deferral inappropriate because Greater
Pennsylvania and Olympic were in contractual
privity, and nothing in the record suggests preju-
dice to Olympic because it was not a party. We
find merit to the Respondent's exceptions.
In agreement with the court, but contrary to the
judge, we conclude that we should defer to the ar-
bitration award on the question of whether Greater
Pennsylvania breached its collective-bargaining
agreement by subcontracting certain work to
Olympic during the term of the agreement. Thus,
as found by the court, the proceedings were fair
and regular, the parties agreed to be bound, and
the result was not clearly repugnant to the pur-
poses of the Act. Thus, deferral is appropriate
under the standard established by the Board in
Spielberg Mfg. Co., 112 NLRB 1080 (1955), and in
Olin Corp., 268 NLRB 573 (1984). Accordingly, we
shall dismiss the complaint in its entirety.
4 613 F 2d at 1107, citations omitted
ORDER
The National Labor Relations Board orders that
its previous Decision and Order in this case be re-
voked and the complaint dismissed in its entirety.
SUPPLEMENTAL DECISION
HERZEL H E. PLAINE, Administrative Law Judge.
This is on remand of the Board decision in the case, 238
NLRB 9 (1978), by the United States Court of Appeals
for the District of Columbia Circuit, 613 F 2d 1102
(1979), requesting further explication of denial of defer-
ence to an arbitrator's award.
In an order dated June 6, 1980, the Board ordered the
record to be reopened for the purpose of admitting into
evidence copies of the collective-bargaining agreement
between the Respondent Union and Greater Pennsylva-
nia Avenue Nursing Center, Inc (Greater Pennsylvania),
and an arbitrator's award of June 6, 1977, on a subcon-
tracting issue raised by the Union against Greater Penn-
sylvania. Neither the contract nor the award was a part
of the record of this case when it was made on May 2
and 3, 1977, and when I issued my decision April 7,
1978
The Board futher remanded the case to me to consider
the effect, if any, of the collective-bargaining agreement
and arbitrator's award on the findings of fact and conclu-
sions of law in the case, and to prepare and serve on the
parties a supplemental decision in light of the court's
remand and consideration of the additional evidence.
The Additional Evidence
By stipulation of the parties, dated January 5, 1981, I
have placed in the record of the case the following three
exhibits, which will be identified as Exhibits A-1, A-2,
and A-3.
Exhibit A-1, a letter of agreement, dated September
22, 1975, by which Greater Pennsylvania assumed all the
terms and conditions of a prior existing agreement (Exh.
A-2) between the Union and Community Health Corpo-
ration covering the employees of the nursing home, and
extending its duration to June 30, 1978.
Exhibit A-2, the previous existing agreement assumed
by Greater Pennsylvania'
Exhibit A-3, award of Arbitrator Herbert N Bern-
hardt, dated June 6, 1977, in arbitration between the
Union and Greater Pennsylvania.2
1 In establishing the original record in this case, the Union failed to
comply with my request that it produce and introduce the collective-bar-
gaining contract which, as now appears, comprised Exhs A-1 and A-2,
see 238 NLRB at 13
2 The further delay in dealing with the remand was caused largely by
efforts, at my suggestion, that counsel for the General Counsel explore
and try to achieve settlement of the case among the Respondent Union,
the subcontractor Olympic Management Service, Inc (Olympic), and the
General Counsel Over a period of time an oral settlement was achieved,
other matters concerning the same three parties was sought, but finally
abandoned with a report to me that no settlement could be achieved
1460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Summary of Board Decision
In the decision affirmed by the Board, 238 NLRB 9
(1978), it was found that Respondent Union, which had
represented 33 nursing and 17 dietary, housekeeping, and
laundry employees of the Greater Pennsylvania nursing
home, violated Section 8(b)(3) of the National Labor Re-
lations Act by refusing to bargain in good faith with
Olympic, the subcontractor of Greater Pennsylvania.
The subcontractor had undertaken to provide dietary,
housekeeping, and laundry services of the nursing home,
and had hired the 17 dietary, housekeeping, and laundry
employees formerly with Greater Pennsylvania to do
these services under Olympic's management. To remedy
the unfair labor practice the Board issued a bargaining
order
In connection with the subcontracting, Greater Penn-
sylvania had given advance notice to the Union of its in-
tention to subcontract with Olympic in October 1976,
and offered to meet and to discuss the matter with the
Union Receiving no answer from the Union, Greater
Pennsylvania signed the subcontract with Olympic
Olympic started its operations for the Greater Pennsyl-
vania nursing home partially in November and fully in
December 1976. Olympic hired the 17 former Greater
Pennsylvania dietary, housekeeping, and laundry em-
ployees and their immediate supervisors, without inter-
ruption of their work, adding 2 employees later.
As successor employer to Greater Pennsylvania,
Olympic recognized the Union as the representative of
its employees and gave effect to the terms of the Greater
Pennsylvania collective-bargaining agreement with the
Union, including giving a wage increase on January 1,
1977. However, Olympic indicated that it would not
accept the Union's benefit plan without a separate labor
agreement, because the benefit fund was in difficulties,
including litigation. Olympic requested bargaining of its
own agreement with the Union, as successor employer,
largely to deal with the subject of the benefit fund.
The Union refused to bargain with Olympic unless
Olympic would accept all existing terms of the collec-
tive-bargaining agreement between Greater Pennsylvania
and the Union, and unless all outstanding disputes in-
volving a second nursing home, Lafayette Square
(owned and operated by the owner of Greater Pennsyl-
vania), whose auxiliary services had also been subcon-
tracted to Olympic, were first resolved in resolution of
the total issues
After the Union refused to bargain, Olympic provided
its employees with another form of benefit coverage.
The Union's response was that it was taking Greater
Pennsylvania to arbitration for violating its collective-
bargaining agreement with the Union in subcontracting
the housekeeping, dietary, and laundry operations to
Olympic. Olympic notified the Union it was filing a re-
fusal-to-bargain charge under Section 8(b)(3) of the Act
Dealing with the unfair labor practice complaint, it
was held that the Union had imposed unlawful condi-
tions upon the bargaining of a collective-bargaining
agreement with subcontractor Olympic, in violation of
Section 8(b)(3) of the Act. And the Union was ordered
to bargain in good faith with Olympic
In the course of arriving at this result, the decision dis-
posed of two claims of the Union, resulting in findings
that the subcontract with Olympic was not a sham or
subterfuge to circumvent the previous direct relationship
between the Union and Greater Pennsylvania as employ-
er of the dietary, housekeeping, and laundry employees;
and that Charging Party Punch was not disqualified to
represent Olympic as bargaining representative because
of, or for any alleged misuse of, his former position as a
union official.
The holding, to which the remand relates, was the de-
termination that it was inappropriate for the Board to
defer to the arbitration award which the Union obtained
against Greater Pennsylvania declaring that the subcon-
tract to Olympic was invalid under the collective-bar-
gaining contract between the Union and Greater Penn-
sylvania.
The arbitration and award came after the Union had
initially accepted Olympic as employer of the employees
performing the auxiliary services at Greater Pennsylva-
nia but balked at bargaining with Olympic, as successor
employer, over the Union's benefit fund which was in
trouble, and instead imposed illegal conditions on bar-
gaining The award itself was issued after the tnal was
held in this case and, as the arbitrator indicated, he was
well aware of the Board proceeding, but declined to
defer his decision on the ground he was capable of set-
tling all the issues between the parties.3
Three reasons were given in the Board decision for
not deferring to the arbitrator's award of June 6, 1977
(now Exh A-3), 238 NLRB at 14
First, an important party to the dispute, subcontractor
Olympic was not party to the collective-bargaining
agreement or to the arbitration, and the Board has held
that deferral to arbitration is not warranted where all the
parties who have important interest at stake in the unfair
labor practice are not parties to the labor contract and
therefore not represented in the arbitration.
Second, the alleged unfair labor practice of the Union
involved in the case at bar was not considered by the ar-
bitrator.
Third, the decision of the arbitrator on the subcon-
tracting appeared to rest on grounds at variance with the
holdings of the Board and of courts under the Act con-
struing rights and duties of employers in subcontracting
under labor agreements similar to the Greater Pennsylva-
nia agreement
The Court's Remand
The Court of Appeals for the District of Columbia
Circuit remanded the case to the Board for further anal-
ysis of the collective-bargaining agreement, the arbitra-
tor's award, and the administrative law judge's opinion
"in light of the strong policy favoring deference to the
Arbitrator's interpretations of collective bargaining
agreements." 613 F.2d at 1109.
3 Actually, the award was first made known to me, and to the parties
to the Board case, as an attachment to Respondent Union's posttrial brief
I provided opportunity for all parties to file additional briefs concerning
the question of giving deference to the award
HOSPITAL EMPLOYEES DISTRICT 1199E (PENNSYLVANIA AVENUE NURSING) 1461
In particular the court requested that the Board explic-
itly discuss the implications of the collective-bargaining
agreement as interpreted by the arbitrator Ibid
The Arbitrator's Award
The arbitrator's award identifies article 3, section 3-1,
"Management Functions" of the labor contract between
the Union and Greater Pennsylvania, as the contract pro-
vision governing subcontracting by Greater Pennsylvania
(see Exh. A-2). It reads:
ARTICLE 3—MANAGEMENT FUNCTIONS
Section 3.1—All management functions and re-
sponsibilities which the Home has not expressly
modified or restricted by a specific provision of this
Agreement are retained arid vested exclusively in
the Home. More specifically, the Home reserves the
right to establish and administer policies and proce-
dures related to patient care, research, education,
training, operations, services and maintenance of the
Home, to reprimand, suspend, discharge or other-
wise discipline employees for cause, including, but
not limited to, excessive absenteeism and/or late-
ness, insubordination, mistreatment of patients, ne-
glect of work, theft, being under the influence of
liquor, leaving the job station without permission,
and violation of medical confidence; to hire, pro-
mote, transfer, lay off and recall employees to
work, to determine the number of employees and
the duties to be performed; to maintain the efficien-
cy of employees; to establish, expand, reduce, alter,
combine, consolidate, or abolish arty job classifica-
tion, department, operation or service; to determine
staffing patterns and areas worked; to control and
regulate the use of facilities, supplies, equipment and
other property of the Home; to determine the
number, location and operation of divisions, depart-
ments and all other units of the Home, the assign-
ment of work, the qualifications required and the
size and composition of the work force; to make or
change rules, regulations, policies and practices not
inconsistent with the terms of this Agreement; and
otherwise generally to manage the Home, attain and
maintain full operating efficiency and optimum pa-
tient care, and direct the work force, except as ex-
pressly modified or restricted by a specific provi-
sion of this Agreement. None of the above-men-
tioned Management Functions shall be exercised in
an unreasonable manner.
While the management functions article does not use
the word subcontracting as such, the language is so
broad as to embrace subcontracting within the authority
reserved to the Employer (Greater Pennsylvania) Key
Phrases are The Home reserves the right to determine
the number of employees and the dunes performed, to
maintain the efficiency of employees, to establish,
expand, reduce, alter, combine, consolidate or abolish
any job classification, department, operation, or service;
to determine the number, location and operation of divi-
sions, departments, and all other units of the Home, the
assignment of work, and the size and composition of the
work; to attain and maintain full operating efficiency and
optimum patient care As the arbitrator said, section 3.1
is indeed a broad management-rights clause.
The clause concludes with the words that none of the
above-mentioned management functions shall be exer-
cised in an unreasonable manner.
However, as the arbitrator points out, the limitation of
reasonableness would exist under the interpretations of
arbitrators, without specific statement of it in the labor
contract. As he said, "The general position of arbitrators
is that the right to subcontract depends upon reasonable-
ness, and when a substantial portion of the regular work
of employees is subcontracted, substantial business justifi-
cation must be shown."
In this case, said the arbitrator, the Employer (Greater
Pennsylvania) offered no evidence of substantial business
justification, hence the Employer acted unreasonably,
and violated the collective-bargaining contract by sub-
contracting the laundry, dietary, and housekeeping serv-
ices to Olympic.
Comparison with Record Before the Board
Whereas the arbitrator's award alleged that Greater
Pennsylvania gave the arbitrator 'no reasons" for the
subcontract (Exh. A-3) and that there was "no advan-
tage to the Employer" in making the subcontract appar-
ent on the record, ibid, and therefore no substantial busi-
ness justification, there was considerable testimony in the
record of the case before me, provided largely by Owner
Gershowitz of the nursing home and Charging Party
Punch, giving the reasons for, and the advantages of, the
subcontract, summarized in the decision at 238 NLRB 11
and 13.
There was, first, the preliminary discussion of reasons
between Mrs. Gershowitz and Charing Party Punch, as
labor relations consultant, on the view, demonstrated by
the practice of other nursing homes, that nursing home
administrators could provide better nursing care if they
were relieved of responsibility for the chore of auxiliary
operations, such as housekeeping, laundry, and prepara-
tion of food. Coordinately, Mrs. Gershowitz was inter-
ested in acquiring and operating still another nursing
home (Lafayette Square) and because existing subcon-
tractors of auxiliary operations elsewhere in the area
were expensive, Punch came up with the idea of putting
Mrs. Gershowitz in touch with people he knew with ex-
perience in food preparation and maintenance services
for health care facilities, which turned out to be Olym-
pic 238 NLRB at 11.
Second, Mrs. Gershowitz testified (after operation
under the subcontract had begun) that the advantage to
Greater Pennsylvania in subcontracting was that the ad-
ministrator of the nursing home did not have to deal
with the routine of the kitchen, the laundry, and house-
keeping, and could concentrate on nursing care She fur-
ther testified that since meals are part of patient care, she
had on her staff a dietician, who prepared menus and
special diets and saw to it that food came out properly
prepared and served, and a purchasing agent responsible
for purchase of food and other supplies. The dietician
worked with the purchasing agent and with Olympic's
1462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
food supervisor, in making menus to keep costs in line.
The food service supervisor was employed by Olympic
and had the responsibility for seeing that the right menus
were dispensed to the patients, for cleanliness of the
kitchen, and for staffing patterns. Likewise, the house-
keeping supervisor was employed by Olympic and had
responsibility for seeing to the cleaning and maintenance
of the nursing home rooms.
Mrs. Gershowitz further testified that while Greater
Pennsylvania's cost for auxiliary services were increased
by the $100-per-week management fee paid Olympic
(this was a cost-plus-fixed fee contract as described else-
where in the testimony) and by the net increase (by two)
in employees, there was also a decrease in costs as a
result of more efficient management. She added that
Olympic was doing an excellent job at her facilities. In
response to questioning by Respondent, she pointed out
that she could not reverse the decisions or just step out
of or terminate the subcontract without subjecting Great-
er Pennsylvania to the consequences of breach of con-
tract.
Third, the subcontract with Olympic was not the only
or first subcontract of Greater Pennsylvania. According
to Mrs Gershowitz, building maintenance and fire pre-
vention were being done by a subcontractor, and special
professional services, including those rendered by psy-
chologists, dietician, and speech therapist, were being
provided to Greater Pennsylvania by Chai Management,
a company owned by Mrs. Gershowitz, that provided
consulting services of this kind on a fee basis to other
companies as well. 238 NLRB at 13.
This testimony, concerning the business reasons and
advantages to Greater Pennsylvania, or the reasonable-
ness of its practice of subcontracting necessary functions
in this case and prior situations, was not contradicted by
the Union. It was plausible testimony, it was credible tes-
timony.
Also part of the record in the case before me, which
was not part of the record before the arbitrator and not
considered by him, was the evidence of the job security
of the affected employees arranged for beforehand and
carried out by the subcontractor Olympic. All of the af-
fected employees were hired by Olympic without any
break in employment or loss of pay, a pay raise, provid-
ed by the union contract with Greater Pennsylvania, was
put into effect; and the Union was recognized by Olym-
pic as the representative of the transferred employees.
Additionally, because the Union's health-welfare-pension
plan was in litigation and therefore a major reason for
Olympic not acceding to existing contract terms and
seeking collective bargaining of its own, Olympic pro-
vided for enrollment of its employees in another such
plan. There was no evidence of any adverse effect on the
job security of the transferred employees.
Under "arbitrator's law," while an adverse effect on
job security could result in limitations on subcontracting,
such limitations would be reduced or eliminated where
the effect on job security was minimal or nonexistent.
See, for example, City of Hamtramck, 71 LA 822 (1978).
Again, the arbitrator's record was lacking in material
facts that were present and useful to the decision.
Indeed, the arbitrator declined to become acquainted
with the job security situation of the affected employees,
indicating that he could provide a decision without it.
It is not improbable that the deficient record upon
which the arbitrator's decision rested, developed concur-
rently with the record before the Board, may be attrib-
uted at least in part to the absence of the Charging Party
Punch and the subcontractor, Olympic, in the arbitration
proceeding. The result suggests the wisdom of the Board
rule in not deferring to arbitration where all the parties,
who have important interest at stake in the unfair labor
practice determination, are not parties to the labor con-
tract and not represented in the arbitration, 238 NLRB at
14.
An earlier example of this wisdom is reflected in the
Court of Appeals' opinion in NLRB v. Horn & Hardart
Co., 439 F.2d 674-679 (2d Cir. 1971), affirming the
Board's decision to refuse to defer to arbitration. Quoting
from the Board decision, the Court explained:
In Raley's the Board based its decision, in part,
on a finding that, although the Petitioner was not
represented at the arbitration hearing, its position
was identical with that of the Employer and the
Employer "vigorously" asserted its position in the
arbitration proceeding. As in Raley's the Petitioner
herein did not participate in the arbitration proceed-
ing and as in Raley's the Employer in the instant
case asserted a position in the arbitration proceeding
which is identical with the Petitioner's position
herein, namely that the present contract does not
cover cashiers. The record is unclear as to how vig-
orously the Employer asserted this position [Cita-
tion omitted ] However, it is clear from the testimo-
ny at the hearing and from a reading of the arbitra-
tion award that not all of the pertinent evidence was
made available to the arbitrator. The two primary
deficiencies are the failure to provide the arbitrator
with information concerning the long history of In-
tervenor's attempts to organize the Employer and
the consistent exclusion of cashiers from these at-
tempts, and the failure to provide him with a clear
understanding of the duties of the employees in
question. In these circumstances, we do not think it
would effectuate statutory policy to defer to the ar-
bitration award. [Remaining footnotes omitted.]
[Emphasis added.]
In accord: Retail Clerks Local 1100 (White Front San
Francisco), 203 NLRB 548 fn. 2 (1973), and 206 NLRB
1431 fn. 3 (1973), holding that the Board will not defer
to an arbitration award when the employer's licensee, a
party affected by the arbitration award, was not party to
the arbitration proceeding Cf. NLRB v. Plasterers Local
79 (Texas Tile & Terrazzo), 404 U S. 116 (1971), where in
context of a 10(k) proceeding, employers who were not
parties to the private dispute resolution procedure, but
who had substantial financial status in the outcome of the
proceeding, were considered parties necessary to the dis-
pute's resolution.
To suggest, as appears in the remand 613 F.2d at 1107,
that Greater Pennsylvania represented Olympic in the ar-
bitration and "fully and adequately defended" Olympic's