Hempstead Lincoln Mercury Motors Corp.

National Labor Relations Board - Board Decisions

Dec 20, 2007

351 N.L.R.B. 1149 (N.L.R.B. 2007)

HEMPSTEAD LINCOLN MERCURY MOTORS CORP.
351 NLRB No. 73
1149
Hempstead Lincoln Mercury Motors Corp. and Local
917, International Brotherhood of Teamsters.
Case 29–CA–27601
December 20, 2007
DECISION AND ORDER
BY MEMBERS SCHAUMBER, KIRSANOW, AND WALSH
On August 9, 2007, Administrative Law Judge Joel P.
Biblowitz issued the attached decision. The Charging
Party filed exceptions and a supporting brief, and the
Respondent filed an answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,1 and conclusions and
to adopt the recommended Order.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.

1 The Charging Party has implicitly excepted to some of the judge’s
credibility findings. The Board’s established policy is not to overrule
an administrative law judge’s credibility resolutions unless the clear
preponderance of all the relevant evidence convinces us that they are
incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd.
188 F.2d 362 (3d Cir. 1951). We have carefully examined the record
and find no basis for reversing the findings.
The judge properly found that the Respondent did not violate the Act
as alleged in the complaint. Contrary to the complaint allegations, the
Respondent fulfilled its contractual obligations to the Union when it
tendered its contributions—minus the requested increases—to the Pen-
sion Fund. The most recent extension of the contract, which the parties
continued in effect during the relevant events here, required only that
the Respondent pay a predetermined amount of money per employee to
the Pension Fund. It is undisputed that the Respondent tendered these
amounts to the Pension Fund. However, the Pension Fund refused to
accept the Respondent’s contributions because the Fund’s trustees had
increased the required contributions for employers to remain in the
Fund, and would not accept any amounts that did not reflect the in-
crease. The Respondent was not obligated by its contract with the
Union to abide by such an increase, and thus, as found, was in full
compliance with that agreement, i.e., it fulfilled its pension obligations
under the expired collective-bargaining agreement. In addition, the
Respondent attempted to bargain with the Union about the trustees’
demand for increased fund payments. Therefore, we find that the Re-
spondent did not violate Sec. 8(a)(5) and (1) of the Act as alleged by
the complaint. See Richmond Homes, 245 NLRB 1205 (1979).
Sharon Chau, Esq., for the General Counsel.
Richard Milman, Esq, (Marshall M. Miller Associates, Inc.),
for the Respondent.
Gene Szuflita, Esq. (Belson & Szuflita), for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administrative Law Judge. This case
was heard by me on June 27, 2007, in Brooklyn, New York.
The complaint , which issued on September 28, 2006, and was
based upon an unfair labor practice charge that was filed on
April 24, 2006, by Local 917, International Brotherhood of
Teamsters (the Union), alleges that since in about December
2005,1 Hempstead Lincoln Mercury Motors Corp. (the Respon-
dent) failed and refused to tender increased payments to the
Local 917 Pension Fund (the Fund), in accordance with the
request of the Fund, or to set aside the payment previously
made or to put the payments into an escrow or similar account,
and did so without prior notice to the Union and without afford-
ing the Union an opportunity to bargain about the subject. It is
alleged that by this activity, the Respondent violated Section
8(a)(1) and (5) of the Act (the Act).
FINDINGS OF FACT
I. JURISDICTION
Respondent admits, and I find, that it has been an employer
engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
II. LABOR ORGANIZATION STATUS
Respondent admits, and I find, that the Union has been a la-
bor organization within the meaning of Section 2(5) of the Act.
III. THE FACTS
There is little dispute of the facts. The Union is the exclusive
collective-bargaining representative for the Respondent’s ser-
vice employees, including its used car department employees.
The last collective-bargaining agreement between the parties
was effective for the period November 1, 1998, to October 31,
2001. At the expiration of this agreement the parties executed a
memorandum of agreement on October 30, 2001, extending the
agreement to October 31, 2004, with changes in three areas:
wages and health and welfare, not relevant, and pensions, pro-
viding that effective November 1, 2001, there would be a mora-
torium on pension contributions; effective November 1, 2002,
the Respondent would resume contributions at the rate prior to
the moratorium, $175 monthly for each unit employee, and
effective November 1, 2003, there would be a $50 monthly
increase in the contribution rate. Pursuant to these agreements,
beginning in November 2002, the Respondent transmitted to
the Fund $175 for each unit employee, and beginning in No-
vember 2003, transmitted to the Fund $225 for each unit em-
ployee. Although the parties were unable to agree on terms of a
successor agreement to replace the memorandum of agreement
that expired on October 31, 2004, the Respondent continued to

1 Unless indicated otherwise, all dates referred to relate to the year
2005.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD1150
transmit to the Fund $225 for each of the unit employees
through November.
The Fund, by its board of trustees, sent a letter dated August
22 to all of its contributing employers, including the Respon-
dent, stating, inter alia:
As you are aware, due to the poor investment markets
and low interest rates over the past number of years, cor-
porate, public and multi-employer pension plans through-
out the United States are facing significant funding diffi-
culties. Unfortunately, Local 917 Pension Fund’s (“Fund”)
assets have not been able to keep pace with the Funds
benefit liabilities.
The Fund needs a substantial contribution rate increase
and future benefit accrual reductions in order to avoid a
minimum funding deficiency under ERISA. The Trustees
have taken the following action to avoid the funding defi-
ciency. . . .
The Fund requires a contribution rate increase of 20%
from all contributing employers, effective as of November
1, 2005 in order to avoid a funding deficiency. . . . Any
employer who fails or refuses to pay this increase will be
expelled from the Fund and be subject to withdrawal li-
ability.
We will keep you informed regarding future develop-
ments. If you have any question about these changes,
please contact the Fund office.
In November the Fund submitted its monthly health and pen-
sion report to the Respondent stating that the amount of $225
was due to the Fund for each bargaining unit employee for the
month of October. For 20 covered employees the amount due
was $4500 and the Respondent paid this amount to the Fund on
about November 4. On December 2, the Fund submitted a re-
mittance form for the month of November to the Respondent
setting forth an amount of $270 due to the Fund for each of the
20 unit employees. This represented the 20-percent increase
referred to in the August 22 letter. On December 8, the Re-
spondent sent a check to the Fund in the amount of $4500, i.e.,
$225 per covered employee, to cover its 20 bargaining unit
employees. By letter dated December 21, Joann Emmons, the
fund manager, wrote to the Respondent:
We recently received your November pension contri-
bution. As you are aware, the Board of Trustees directed
an increase in the required contribution rate effective No-
vember 1, 2005, in order to improve funding of the plan.
You have failed to pay the increased rate. We are
therefore returning your check to you. If you fail to pay
the new rate on or before January 4, 2006, effective No-
vember 1, 2005, you will cease to be a contributing em-
ployer and you will be considered withdrawn from the
Fund and you will be assessed withdrawal liability. [Em-
phasis added.]
The Respondent never paid the increased amount requested,
and by letter dated January 26, 2006, Emmons notified the
Respondent that, effective October 31, it ceased participating in
the Fund and that it would be subject to withdrawal liability.
On February 14, 2006, Emmons wrote to the Respondent stat-
ing that its withdrawal liability to the Fund was $349,300, to be
paid in 20 quarterly installments of $19,312.50 and a final
payment of $19,157.85. By letter dated February 9, 2006, coun-
sel for the Respondent wrote to counsel for the Union request-
ing certain information regarding the Pension Fund. By letter
dated February 17, 2006, Emmons provided counsel with some
of the requested information, and stated that he was not entitled
to other of the information requested.
Union President John Vacca and Respondent’s president,
John Billard, each testified about discussions that they had
regarding the proposed increase in the Pension Fund contribu-
tions. Vacca testified that in about September, Billard asked
him about the increase, and Vacca told him that the 20-percent
increase was needed because of the Fund’s financial difficul-
ties. Billard asked him how much the increase would be, and
Vacca said that he would provide him with the numbers, and a
few weeks later, he provided Billard with this information.
Vacca testified that at no time prior to December 1 did Billard,
or any representative of the Respondent, tell him that the Re-
spondent would not pay the additional 20-percent increase to
the Fund, nor did any representative of the Respondent ask the
Union to bargain over the effects of not paying the 20-percent
increase. He further testified that to his knowledge, the Re-
spondent never set aside any escrow or other account to cover
these payments. Billard, whom I found to be a credible and
believable witness, testified that prior to the August 22 letter,
the Union never notified him of this increase in Pension Fund
contributions, and that after receiving this letter he had numer-
ous conversations with Vacca about the increase. Vacca told
him that the Fund was under funded and that they had no
choice. He told Vacca that the Respondent was not in a position
to pay any more money: “We have a contract; why should we
pay more money?” Vacca responded that it was a Federal law
and they had to pay. He also testified that during this post Au-
gust 22 period he told Vacca that they couldn’t afford the in-
crease and asked if there was a way to work around it. Vacca
said that there wasn’t: “You’re in or you’re out.” Billard also
asked Vacca for concessions, but Vacca refused to give any. He
never told Vacca during any of these conversations that the
Respondent would not pay the 20-percent increase to the Fund.
IV. ANALYSIS
Counsel for the General Counsel stated that she is not alleg-
ing that the Respondent violated the Act herein by failing to
include the 20-percent increase in its Fund payment on Decem-
ber 8. Rather, the alleged violation herein is that the Respon-
dent failed to tender the increased payments to the Fund, or to
set aside the amount due into an escrow or similar account,
without prior notice to the Union and without affording the
Union an opportunity to bargain about the subject.
The agreement that was effective from 1998 through 2001
provided for the precise amount of contributions that the Re-
spondent was to pay to the Fund for each unit employee. The
memorandum of agreement that was effective from 2001
through 2004 provided for a moratorium on payments to the
Fund from November 2001 through November 2002, and after
that the Respondent would resume making the contributions in
effect prior to the moratorium, and effective November 2003,
HEMPSTEAD LINCOLN MERCURY MOTORS CORP. 1151
the Respondent would contribute to the Fund the sum of $225
for each unit employee. Neither the 1998 contract, nor the 2001
memorandum of agreement contain a savings clause that per-
mits the Union or the Fund to unilaterally raise the amount of
the employers’ contributions. The evidence establishes that
throughout the period in question, and up to and including De-
cember, the Respondent made the contributions to the Fund as
provided for in the contract and the memorandum of agree-
ment. It is difficult to understand counsel for the General Coun-
sel’s theory of a violation that would require the Respondent to
give prior notice to, or bargain with the Union, prior to making
its payment to the Fund when the Respondent had made no
change in the terms and conditions of employment of its em-
ployees and was simply following the provisions of the 1998
collective-bargaining agreement and the 2001 memorandum of
agreement. Further, the credited testimony of Billard estab-
lishes that after the Union notified him about the increase in the
Fund payments, he told Vacca that the Respondent could not
afford to pay the increase and asked the Union for concessions
and whether there was anything else that the Respondent could
do in lieu of the increased payments, thus establishing that the
Respondent was attempting to bargain with the Union about the
increased Fund payments.
Although I can certainly understand the concerns of the Un-
ion that the Fund was under funded, and while it may be that
there is a proper venue for the Fund to recover the additional
payments from the Respondent, this is not the proper venue. I
therefore find that counsel for the General Counsel has failed to
establish that the Respondent violated Section 8(a)(1) and (5) of
the Act, and recommend that the complaint be dismissed.
CONCLUSIONS OF LAW
1. The Respondent has been an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Union has been a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The Respondent did not violate Section 8(a)(1) and (5) of
the Act as alleged in the complaint.
On these findings of fact, conclusions of law and based upon
the entire record, I issue the following recommended2
ORDER
It is recommended that the complaint be dismissed in its en-
tirety.

2 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
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 pur-
poses.