Keystone Consolidated Industries

National Labor Relations Board - Board Decisions

Oct 22, 1992

309 N.L.R.B. 294 (N.L.R.B. 1992)

294
309 NLRB No. 31
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Union and Management Plans operate under the same plan
year.
2 Thus, after December 31, 1980, a dual participant’s total monthly
benefit upon retirement consisted of the sum of (1) the pre-1981
‘‘frozen’’ amount; (2) any benefit accrued after December 31, 1980,
under the Management Plan’s post-1980 formula; and (3) any benefit
accrued after December 31, 1980, under the Union Plan’s post-1980
formula.
Keystone Steel & Wire Division of Keystone Con-
solidated Industries Inc. and Independent Steel
Workers’ Alliance. Case 33–CA–8519
October 22, 1992
DECISION AND ORDER
BY MEMBERS DEVANEY, OVIATT, AND
RAUDABAUGH
On February 18, 1992, Administrative Law Judge
William F. Jacobs issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed an answering brief,
cross-exceptions and a supporting brief, and a brief in
support of the judge’s decision.
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 de-
cided to affirm the judge’s rulings, findings, and con-
clusions only to the extent consistent with this Deci-
sion and Order.
The judge found that the Respondent had no obliga-
tion to bargain with the Union before making unilat-
eral changes in its management pension plan and rec-
ommended dismissal of the 8(a)(5) complaint alleging
these changes to be unlawful. We disagree.
I.
The facts are not in dispute. The Respondent has
long provided pension benefits under two plans: the
Keystone-Bartonville Pension Plan, provided under the
parties’ collective-bargaining agreement (Union Plan)
and the Keystone Steel & Wire Company Pension Plan
(Management Plan). The Union Plan covers bargaining
unit employees, and the Management Plan applies to
supervisory, managerial, and other nonbargaining unit
employees. Since before 1958, some bargaining unit
employees have earned benefits under the Union Plan
before being transferred or promoted into nonunit posi-
tions. When these employees returned to the unit from
nonbargaining unit positions, they resumed active par-
ticipation in the Union Plan and remained inactive par-
ticipants in the Management Plan, in which they had
earned benefits. These individuals are referred to as
‘‘dual participants.’’
The Union and Management Plans are funded by
separate trusts, whose assets are separately accounted
for. Each plan forbids payment of benefits to any re-
tiree based on periods of employment for which he is
entitled to benefits under another plan. Both plans pro-
vided, prior to 1982, a ‘‘thirty-and-out’’ option under
which participants would be eligible for retirement—
with an immediate full benefit—upon completing 30
years of vesting service with the Respondent. In count-
ing years of service, both plans allowed participants to
combine all bargaining unit and nonbargaining unit
employment. For anyone transferred between unit and
nonunit service within a plan year, the individual’s
placement at year’s end determined the Respondent’s
funding and reporting obligations for that individual
for that year.1 The formulas for accrual of benefits
have been identical under both plans for dual partici-
pants employed between 1981 and 1989.
During the early to mid-1980s, the Respondent ob-
tained ‘‘funding waivers’’ for both plans pursuant to
section 412(d) of the Internal Revenue Code and sec-
tion 303 of the Employee Retirement Income Security
Act (ERISA). The waivers permitted the Respondent to
amortize its annual contributions for the plan years
ending June 30, 1980, 1984, and 1985, over a period
of 15 years each. The last waiver expires June 30,
2000.
Additionally, in 1981, separate formulas were estab-
lished under each plan for benefits earned and service
accrued through 1980. These ‘‘frozen’’ benefit
amounts were computed for all employees before and
during 1981, including all dual participants, and the
dollar amounts were recorded in their personnel files.
Separate formulas were then established for each plan
to determine annual post-1980 benefits. Thus, the dol-
lar amount of benefits earned and payable to individ-
uals employed both before and after 1981 consisted of
the sum of the 1980 ‘‘frozen’’ amount, if any, and the
post-1980 benefit computed under one or both of the
new formulas, depending on whether the individual
was a post-1980 dual participant.2 Until 1986, each re-
tiree was paid a single monthly check drawn from the
trust corresponding to the plan in which he last ac-
tively participated.
Effective May 3, 1982, the Union Plan was amended
to limit the ‘‘thirty-and-out’’ option to participants
who had been hired or rehired before that date and em-
ployed continuously thereafter with no break in serv-
ice. The Respondent also amended the Management
Plan effective November 1, 1982, to eliminate the
‘‘thirty-and-out’’ option entirely except for participants
who had already completed 30 years of vesting service
by that date. At the same time, a new option was insti-
tuted entitling Management Plan participants to a full
immediate benefit upon retirement when the sum of
the participant’s age and his years of vesting service
equals or exceeds 90.
295KEYSTONE CONSOLIDATED INDUSTRIES
3 The other 16 retirees qualified for various retirement options
under both plans.
In 1985, the Union became aware that the Respond-
ent had regularly charged the trust that funded the
Union Plan for benefits paid to all dual participants
who retired as unit employees, without regard to their
service under the Management Plan. The Union ob-
jected that: (1) assets from the trust that funded the
Union Plan should not be used to pay the entire retire-
ment benefit of a dual participant returning to the
Union Plan, but that the benefits should be allocated
between both trusts; and (2) the Union Plan should be
made whole for past misallocation of charges to its
trust.
The parties agreed, in 1986, that the Respondent
would: (1) identify dual participants who had retired
since September 30, 1982; (2) determine the correct al-
location of benefits attributable to each plan; (3) deter-
mine whether and to what extent the Union Plan trust
had been overcharged; (4) restore the amount over-
charged to the Union plan trust, with interest; and (5)
charge the assets of the Union Plan thereafter in pro-
portion to benefits earned under that plan. In addition,
the parties agreed to a formula to determine how bene-
fits were to be charged to each plan. Finally, it was
agreed that no adjustment would be made to the allo-
cation of benefit payments for dual participants who
retired before September 30, 1982. In accordance with
the agreement, the trustee for the Management Plan
made the Union Plan whole for the overcharges, and
benefits have since been allocated and charged to as-
sets of the appropriate plan.
Between September 30 and October 31, 1982, three
dual participants retired. These were the only retirees
affected by the 1986 correction who had retired before
the Respondent eliminated the ‘‘thirty-and-out’’ option
from the Management Plan. They therefore had quali-
fied for the ‘‘thirty-and-out’’ option under both plans.
Twenty dual participants had retired between Novem-
ber 1, 1982, and July 31, 1986, the time of the correc-
tion. In accordance with the 1986 agreement, the
Union Plan was made whole for the amount it had
been overcharged for all these 23 retired dual partici-
pants.
After the correction, but before November 1, 1988,
when further changes as set forth below were made to
the Management Plan, 15 more dual participants re-
tired, for a total of 35 dual participants retiring be-
tween November 1, 1982, and November 1, 1988. Of
these 35 dual participants, 19 (the Affected Retirees)
qualified for a full benefit under the ‘‘thirty-and-out’’
option of the Union Plan, but did not qualify for a full
benefit under any option of the Management Plan.3
The Respondent, however, permitted payment to each
of these 19 retirees of a full monthly accrued benefit
under both plans, with payments allocated as the 1986
agreement provided.
In November 1988, the Respondent, advised by its
attorneys that the payment of benefits under the Man-
agement Plan to the Affected Retirees was inconsistent
with the provisions of that plan, decided on the follow-
ing course of action. It would: (1) discontinue the
practice of making benefit payments from the Manage-
ment Plan to dual participants who thereafter retired
under the Union Plan’s ‘‘thirty-and-out’’ option but
did not qualify for any retirement option under the
Management Plan; (2) begin making payments to the
19 Affected Retirees out of the Respondent’s general
assets rather than out of the Management Plan’s trust
until these retirees became eligible for benefits under
one of that plan’s options; (3) repay the Management
Plan’s trust until these retirees became eligible for ben-
efits under one of that plan’s options; repay the trust
that funded the Management Plan the amounts that had
been paid out to the Affected Retirees, plus the earn-
ings that those funds would have accrued; and (4) no-
tify all dual participants of these measures.
At the time the Respondent decided to take these
measures, but before it notified Management Plan par-
ticipants of the changes, there were three dual partici-
pants employed in nonbargaining unit positions who
had already formally applied for retirement under both
plans on the assumption that they were entitled to re-
turn to the unit and retire with a full benefit from each
plan. The Respondent decided to treat these three as
Affected Retirees. At that time, there were an addi-
tional 147 dual participants employed in nonbargaining
unit positions and at least 36 dual participants in bar-
gaining unit positions.
At the direction of the Respondent’s vice president
of administrative services, Lyle Pfeffinger, letters ex-
plaining the above changes were mailed to the Af-
fected Retirees and dual participants in nonbargaining
unit positions on November 10, 1988, and to dual par-
ticipants in bargaining unit positions on November 21.
On November 23 the Union wrote to the Respondent
protesting the changes in the Management Plan and ar-
guing that the changes could not be made during the
term of the current collective-bargaining agreement.
The Respondent replied on December 15 denying that
it had any obligation to bargain with the Union over
the terms of the Management Plan or how it was ad-
ministered. It also denied that there had been any
changes in the language of the Management Plan.
II.
The judge found that the Respondent had no obliga-
tion to bargain with the Union over the Management
Plan, unlike the Union Plan over which the parties
have previously bargained. The judge noted that the
Union has had no input into the Management Plan and
296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that the benefits it provides were ‘‘meant to be en-
joyed’’ only by nonbargaining unit employees. The
judge further observed that the Management Plan de-
fines the retirement terms of individuals who are ‘‘nei-
ther covered by the collective-bargaining agreement
nor represented by the Union at the time these employ-
ees are earning such benefits (footnote omitted).’’ The
judge recommended dismissal of the complaint.
The General Counsel excepts, arguing that a deci-
sion to change the administration of employee pension
benefits is a mandatory subject of bargaining, and that
the Respondent has, by unilaterally altering the prac-
tice under which it has administered the Management
Plan, effectively changed the pension benefits of dual
participant employees in the bargaining unit. The Gen-
eral Counsel contends that the two plans are inter-
related regarding vesting, eligibility, and funding, and
that the changes the Respondent made in the Manage-
ment Plan in November 1988 defeated expectations the
Respondent had raised among bargaining unit employ-
ees who had worked outside the unit in the past.
In cross-exceptions, the Respondent contends that,
even if it unilaterally altered a mandatory subject of
bargaining, its actions were required by law. Specifi-
cally, it argues that when it determined in November
1988 that it had been administering the Management
Plan’s ‘‘thirty-and-out’’ plan illegally, the trustee of its
plan had no discretion as to whether to continue that
course, but rather was compelled under the Employee
Retirement Income Security Act of 1974 (ERISA) to
discontinue paying benefits to future retirees who had
been dual participants. It also excepts that the judge
did not address its argument that the Union had failed
to request, and therefore had waived, any right to de-
mand bargaining.
The Respondent agrees with the judge that the Man-
agement Plan is not subject to mandatory bargaining.
Comparing the bargaining unit dual participants to re-
tirees or job applicants subject to prehire drug and al-
cohol testing, the Respondent contends that bargaining
over the Management Plan would adversely affect the
community of interest of unit employees and make the
unit inappropriate, citing Chemical Workers v. Pitts-
burgh Plate Glass, 404 U.S. 157 (1971); and Star
Tribune, 295 NLRB 543 (1989). The Respondent also
contends that any legal entitlement inuring to bargain-
ing unit employees under the previous administration
of the plan arose independently of the collective-bar-
gaining relationship and should therefore not be the
predicate for a statutory bargaining obligation. It also
maintains that the terms and conditions of bargaining
unit employees were affected only indirectly by the
November 1988 changes. Finally, because the Manage-
ment Plan covers, among others, supervisors whose
terms and conditions are not covered by the Act, the
Respondent contends that any bargaining obligation
would run afoul of Sections 2(3) and 14(a) of the Act.
III.
We find merit in the General Counsel’s exceptions.
It is well established that pension benefits accruing to
employees are terms and conditions of employment
and therefore subject to mandatory bargaining. Inland
Steel Co., 77 NLRB 1 (1948). Before 1982 the Man-
agement Plan and the Union Plan each contained a
‘‘thirty-and-out’’ retirement option. Any employee who
had service under both plans and had worked for the
Respondent for 30 years satisfied the eligibility re-
quirements of both plans, as those requirements were
identical and all employment with the Respondent both
in and outside of the bargaining unit counted toward
the 30 years of employment requirement.
In 1982, the Respondent announced elimination of
the Management Plan’s thirty-and-out option (except
for employees who already had 30 years of service)
but retained the Union Plan’s thirty-and-out option for
current employees. The Respondent then adopted a
practice of permitting unit employees who were dual
participants and eligible for retirement under the Union
Plan’s thirty-and-out option to retire and receive pen-
sion benefit payments under that plan and also under
the Management Plan, even if they were not eligible
for pension payments under any of the retirement op-
tions described in the Managment Plan’s formal docu-
ments. Because employees retiring from the unit re-
ceived better pension and medical benefits, dual par-
ticipants working outside the unit made an effort to re-
turn to positions within the unit before retiring. Thus,
virtually all dual participants who retired after 1982
occupied bargaining unit positions preceding their re-
tirement.
The Respondent’s practice of paying pension bene-
fits under both the Union Plan and the Management
Plan to dual participants who retired from unit posi-
tions and met the Union Plan’s thirty-and-out eligi-
bility requirement became well established. It contin-
ued for 6 years and was applied to 19 dual participants
retiring during that period who otherwise would not
have received pension benefit payments under the
Management Plan. By this practice, the Respondent
provided an enhanced pension benefit available only to
unit employees: if they were dual participants and eli-
gible to retire under the Union Plan’s thirty-and-out
option, they also would receive pension payments
under the Management Plan without regard to whether
they otherwise met the eligibility requirements of the
Management Plan. This practice—directly linked to
employment in the bargaining unit—became an im-
plied term and condition of employment of bargaining
297KEYSTONE CONSOLIDATED INDUSTRIES
4 See Riverside Cement Co., 296 NLRB 840, 841 (1989), and
cases cited there at fn. 6.
5 See Intermountain Rural Electric Assn., 305 NLRB 783 (1991).
6 This differs from the adverse impact that may be suffered by unit
employees in the incidental elimination of benefits from individuals
outside the unit. Compare Beitler-McKee Optical Co., 287 NLRB
1311, 1312 (1988) (elimination of family coverage from unit em-
ployees’ existing health insurance plan held unlawful even though all
unit employees were then single and ineligible to use family cov-
erage), with Torrington Co., 305 NLRB 938 (1991), reaffd. 307
NLRB 485 (1992) (elimination of internal coordination of health in-
surance benefits that had previously enabled nonunit employees to
apply for supplemental coverage of their unit-member spouses’ med-
ical expenses held lawful where unit spouses’ terms and conditions
of employment were unaffected). Here, similar to the benefits elimi-
nated in Beitler-McKee, and unlike those curtailed in Torrington, the
Respondent’s change in its practice in administering the Manage-
ment Plan affects the terms and conditions of employment of unit
employees.
The Respondent’s arguments likening the individuals affected by
the Management Plan changes to nonbargaining unit members such
as retirees and job applicants and contending that the Management
Plan principally covers supervisors and therefore is inconsistent with
the terms of Secs. 2(3) and 14(a) are likewise unavailing. The
changes to the Management Plan affected the rights of individuals
who were employees in the bargaining unit at the time the Respond-
ent acted unilaterally and who were not, at least at that time, super-
visors. Thus, the question raised in Chemical Workers v. Pittsburgh
Plate Glass, supra, with respect to former employees who had al-
ready retired and were thus no longer ‘‘employees’’ under the stat-
ute—whether the unilateral changes ‘‘vitally affect’’ the terms and
conditions of employment of unit employees—is, contrary to the
judge, answered decidedly in the affirmative here.
7 Moreover, contrary to the Respondent’s contentions, it is not
clear that continuation of the Respondent’s practice of paying pen-
sion benefits under the Management Plan to dual participants in the
Continued
unit employees by mutual consent of the parties,4 and,
therefore, a mandatory subject of bargaining that the
Respondent could not unilaterally change.
Once an implied term of employment is established,
any unilateral change in that term by an employer,
whatever its intentions, violates Section 8(a)(5) of the
Act.5 Therefore, contrary to the judge and the Re-
spondent, it is immaterial that the parties may not have
bargained over the Management Plan benefits in the
past or that the benefits extended under the plan’s
‘‘thirty-and-out’’ option may not have been intended to
be enjoyed by unit employees.
It is also immaterial whether the periods of time
during which the benefits were accrued by employees
corresponds to their employment outside the unit. The
Union Plan, and for that matter the Management Plan,
permitted participants to combine all periods of prior
service to obtain benefits, both unit and nonunit serv-
ice. The change thus affected a benefit previously
available to present unit employees. As a result of this
change, some employees who previously had accrued
rights towards a full benefit after 30 years of combined
service must delay retirement until they reach the mini-
mum age for eligibility under a Management Plan re-
tirement option in order to obtain the same benefit.6
The Respondent further contends that the Union’s
failure to request bargaining after it was presented with
the changes the Respondent contemplated in the Man-
agement Plan amounted to a waiver, excusing the Re-
spondent from further bargaining. In support of its
contention, the Respondent relies in part on the testi-
mony of Company President Robert Singer that Com-
pany CEO Glenn Simmons told the union officers on
November 3, 1988, that ‘‘in general terms,’’ as the Re-
spondent summarizes, ‘‘a decision had been made that
persons who had previously been employed in the bar-
gaining unit before assuming nonunit employment and
subsequently returned to the unit’’ would no longer re-
ceive ‘‘thirty-and-out’’ benefits unless they qualified
under the terms of the Management Plan.
We find that the Respondent presented the Novem-
ber 1988 changes to the Union as a fait accompli and
that any request for bargaining in these circumstances
would have been futile. First, the Respondent consist-
ently took the position throughout its discussions with
the Union that any change in administration of the
Management Plan was not subject to mandatory bar-
gaining. Second, the Respondent’s own proffered testi-
mony does not support a finding that it had been ame-
nable to bargaining when it first raised the plan
changes with union officials. According to CEO Sing-
er, the purpose of the November 3 meeting ‘‘was
merely to inform the officers that the decision had
been made to make the changes.’’ Thus, whatever
knowledge about the impact of the changes on bargain-
ing unit employees that may have been imparted to the
Union between November 3 and 18, when the Re-
spondent presented the union officials with the letters
addressed to unit employees, any request for bargain-
ing over its admitted ‘‘decision’’ would have been fu-
tile. In any event, the Union did request bargaining in
its November 23 letter to the Respondent. In response,
the Respondent did not assert a waiver in bargaining,
but merely reiterated its position that it had no obliga-
tion to bargain about the changes.
Finally, we reject the Respondent’s defense that it
was ‘‘legally compelled’’ to proceed unilaterally. The
Respondent relies specifically on: (1) Section
404(a)(1)(D) of ERISA which charges pension plan ad-
ministrators with the fiduciary responsibility to admin-
ister plans in accordance with their own terms; and (2)
Internal Revenue Code, Section 412(f)(2), and ERISA,
section 304(b)(2), forbidding employers who have ob-
tained funding waivers, as has the Respondent, from
increasing pension benefits. Simply put, neither of
these statutes proscribes the action that the Respondent
is obligated to undertake under Section 8(a)(5) of our
statute—namely, to bargain over changes in adminis-
tration of its pension plan.7 As stated by the Board in
Foodway, 234 NLRB 72, 77 (1978):
298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
unit who retire under the Union Plan’s thirty-and-out option would
violate the Respondent’s fiduciary duty or that such a fiduciary duty,
if one exists, legally compelled the Respondent to make the particu-
lar changes it made. It appears that the Respondent could have
amended its plan to conform to its practice, rather than discontinuing
the practice. Alternatively, the Respondent could have proposed pay-
ing the benefits in question from its own assets, rather than from the
Management Plan trust, as it did with respect to dual participants
who had already retired. Further, the Respondent’s contention that
continuation of the practice in question or modifying its plan to con-
form to its practice would jeopardize the IRS funding waiver clearly
does not constitute legal compulsion. While rescission of the funding
waiver might have adverse economic consequences for the Respond-
ent, the Respondent was not legally required to retain the waiver.
[T]he salient principle applicable to the instant in-
quiry is that the Union was entitled to an oppor-
tunity to negotiate concerning the matter and not
to be confronted in fact or in substance with a fait
accompli [citation omitted]. The General Counsel
correctly contends that the Act is the legislative
scheme which, in final analysis, prescribes the
Respondent’s bargaining obligation. While the
mandate and requirements of other Federal stat-
utes may serve to limit the area of discretion
which a party may exercise in fulfilling [its] bar-
gaining obligation . . . to enter into the bargain-
ing process in good faith is not thereby minimized
or obviated [citations omitted].
By presenting the Management Plan changes to the
Union as a fait accompli and thereafter refusing to
honor the Union’s request to bargain in good faith over
the changes in employee pension rights, a mandatory
subject of bargaining, the Respondent has violated Sec-
tion 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. The Respondent is an employer within the mean-
ing of Section 2(2) of the Act and is engaged in com-
merce within the meaning of Section 2(6) and (7) of
the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. The following unit is appropriate for purposes of
collective bargaining:
All employees employed by the Respondent in or
about its Bartonville, Illinois plants and offices;
excluding supervisors, temporary supervisors, per-
manent foremen, temporary foremen, relief fore-
men, guards, and firemen, registered nurses, and
any other person or persons in the employ of Re-
spondent who are not covered by that collective-
bargaining agreement between Respondent and
the Union in effect by its terms until May 3,
1990.
4. At all times material, the Union has been the ex-
clusive collective-bargaining representative of the em-
ployees in the unit described above.
5. The Respondent has violated Section 8(a)(5) and
(1) of the Act by unilaterally implementing changes in
its Management Pension Plan that adversely affect
pension benefits previously earned by unit employees.
6. The above-unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in
and is engaging in certain unfair labor practices within
the meaning of Section 8(a)(5) and (1) of the Act, we
shall order that it cease and desist and take certain af-
firmative action designed to effectuate the purposes of
the Act.
Having found that the Respondent unlawfully imple-
mented changes in its Management Pension Plan, we
shall order the Respondent to bargain with the Union
over the changes and to make whole the affected dual
participant unit employees. Payments shall be com-
puted in the manner set forth in Ogle Protection Serv-
ice, 183 NLRB 682 (1970). Interest on all amounts
owing will be paid in accordance with the formula set
forth in New Horizons for the Retarded, 283 NLRB
1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, Keystone Steel & Wire Division of Key-
stone Consolidated Industries, Inc., Bartonville, Illi-
nois, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Unilaterally implementing changes in its Man-
agement Pension Plan adversely affecting unit employ-
ees.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain collectively with the Inde-
pendent Steel Workers’ Alliance as the exclusive col-
lective-bargaining representative of the employees in
the appropriate bargaining unit described below and, if
an understanding is reached, embody that understand-
ing in a signed contract. The appropriate unit is:
All employees employed by the Respondent in or
about its Bartonville, Illinois plants and offices;
excluding supervisors, temporary supervisors, per-
manent foremen, temporary foremen, relief fore-
men, guards, and firemen, registered nurses, and
any other person or persons in the employ of Re-
spondent who are not covered by that collective-
bargaining agreement between Respondent and
the Union in effect by its terms until May 3,
1990.
299KEYSTONE CONSOLIDATED INDUSTRIES
8 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
(b) Make whole dual participant unit employees af-
fected by the Respondent’s changes in the Manage-
ment Pension Plan in the manner set forth in the rem-
edy section of this decision.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security records, timecards, per-
sonnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order.
(d) Post at its Bartonville, Illinois facility and mail
to dual participant employees who retired since the ef-
fective date of the Respondent’s changes in the Man-
agement Pension Plan copies of the attached notice
marked ‘‘Appendix.’’8 Copies of the notice, on forms
provided by the Regional Director for Region 33, after
being signed by the Respondent’s authorized represent-
ative, shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive days in
conspicuous places, including all places where notices
to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to ensure that the no-
tices are not altered, defaced, or covered by any other
material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these pro-
tected concerted activities.
WE WILL NOT make unilateral changes in the Man-
agement Pension Plan affecting bargaining unit em-
ployees.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain collectively with the
Independent Steel Workers’ Alliance as the exclusive
representative of the employees in the appropriate bar-
gaining unit, described below, and, if an understanding
is reached, embody that understanding in a signed con-
tract, and WE WILL make whole dual participant bar-
gaining unit employees for any losses they suffered as
a result of the unilateral changes in the Management
Pension Plan, with interest. The appropriate unit is:
All employees employed by the Respondent in or
about its Bartonville, Illinois plants and offices;
excluding supervisors, temporary supervisors, per-
manent foremen, temporary foremen, relief fore-
men, guards, and firemen, registered nurses, and
any other person or persons in the employ of Re-
spondent who are not covered by that collective-
bargaining agreement between Respondent and
the Union in effect by its terms until May 3,
1990.
KEYSTONE STEEL & WIRE DIVISION OF KEY-
STONE CONSOLIDATED INDUSTRIES, INC.
Judith T. Poltz, Esq., for the General Counsel.
Stuart I. Cohen, Esq. of Peoria, Illinois, for the Respondent.
Ronald L. Hamm, Esq. of Peoria, Illinois, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
WILLIAM F. JACOBS, Administrative Law Judge. This case
was tried before me on May 20 and 21, 1991, in Peoria, Illi-
nois. The charge was filed on November 23, 1988, and
amended on July 31, 1989, by Independent Steel Workers’
Alliance (the Union). The complaint issued October 5, 1989,
and was amended on January 17 and March 20, 1991, to al-
lege that Keystone Steel & Wire, Division of Keystone Con-
solidated Industries, Inc. (Respondent, Employer, or Com-
pany), violated Section 8(a)(1) and (5) of the National Labor
Relations Act. More particularly the complaint alleges that
Respondent violated the above-cited sections of the Act by
unilaterally implementing changes in its management pension
plan which adversely affected pension benefits previously
earned by unit employees while employed in nonunit capac-
ities covered by the plan. In its answer, duly filed, Respond-
ent denies the commission of any unfair labor practices.
All parties were represented at the hearing and were af-
forded full opportunity to be heard and to present evidence
and argument. General Counsel and Respondent filed briefs.
Upon the entire record, my observation of the demeanor of
the witnesses and after giving due consideration to the briefs.
I make the following:
300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 In its answer, Respondent concedes jurisdiction and the status of
the Union as a labor organization. This section of the decision is
based almost entirely on the stipulation of the parties received into
the record as Jt. Exh. 20.
FINDINGS OF FACT1
Keystone Steel & Wire, Division of Keystone Consoli-
dated Industries, Inc., operates a facility at Bartonville, Illi-
nois, where it has manufactured steel products and wire since
a date prior to 1950. The Independent Steel Workers’ Alli-
ance has represented production and maintenance employees
at Respondent’s Bartonville facility since a date prior to
1950. Since January 1, 1988, and continuing to the present
time, there have been approximately 1270 employees em-
ployed by Respondent in the unit.
Respondent and the Union have been parties to successive
collective-bargaining agreements. The agreement effective
from May 3, 1984, until June 20, 1986, is the most recent
all-inclusive such document. On or about June 20, 1986, Re-
spondent and the Union entered into an agreement to amend
and extend the 1984–1986 agreement effective until May 3,
1990. Subsequently, the agreement was extended to May 3,
1993.
Under the collective-bargaining agreement between Re-
spondent and Union, bargaining unit members who leave the
unit for service to Respondent outside the unit do not lose
their plant seniority. However, such individuals do not accrue
additional seniority for such period outside the unit.
Since before 1958, several of Respondent’s employees
have worked in the bargaining unit represented by the Union
before being transferred or promoted to nonunit positions.
While employed in the bargaining unit, these individuals
were active participants in the ‘‘Keystone-Bartonville Pen-
sion Plan’’ sponsored and administered by Respondent
(Union Plan). While employed in supervisory, managerial
and other non-bargaining unit positions, these individuals
were active participants in the ‘‘Keystone Steel & Wire
Company Pension Plan’’ sponsored and administered by Re-
spondent (Management Plan), and inactive participants in the
Union Plan because of the benefits they earned under that
plan. Individuals who returned to the bargaining unit from
supervisory, managerial, and other nonbargaining unit posi-
tions resumed active participation in the Union Plan and par-
ticipated inactively thereafter in the Management Plan be-
cause of the benefits they earned under that plan. An individ-
ual who has actively participated in both the Union Plan and
the Management Plan and thereby earned retirement benefits
under both plans is referred to herein as a dual participant.
The Union Plan and the Management Plan are funded
through separate trusts both of which participate in the Key-
stone Consolidated Industries, Inc. Master Retirement Trust
(Master Retirement Trust). As required by the Master Retire-
ment Trust, the assets of each participating trust are ac-
counted for separately.
The Union Plan and the Management Plan each provide
for a ‘‘special initial pension payment’’ upon retirement in
lieu of payments during the first 3 months, and for monthly
retirement benefit payments thereafter. The Union Plan and
the Management Plan each forbid payment of benefits to a
retiree based on a period of employment for which that re-
tiree is entitled to benefits from another plan. The Union
Plan and the Management Plan each provide for various re-
tirement benefit options which, on the basis of different
qualifying conditions, entitle participants to receive either:
(1) a reduced benefit through early retirement; or (2) a full
benefit through total and permanent disability or through nor-
mal retirement. Although the retirement benefit options in the
Union Plan differ from those in the Management Plan, under
each plan the qualifying conditions which must be satisfied
by a participant to be entitled to elect a particular benefit op-
tion under which the participant will receive a full benefit are
separate and independent from the factors determining the
amount of the participant’s benefit from that plan. The Union
Plan and the Management Plan each permit participants to
combine all periods of service with Respondent, whether in
bargaining unit or nonbargaining unit positions, for purposes
of vesting and eligibility to elect one or more of the retire-
ment benefit options available.
As used herein, the term ‘‘vesting service’’ refers to em-
ployment with Respondent when enrolled as a participant in
either the Union Plan or the Management Plan; that is,
whether employed in unit or nonunit positions. As used here-
in with respect to the Management Plan, the term ‘‘benefit
service’’ refers to employment with Respondent in a nonunit
position. As used herein with respect to the Union Plan,
‘‘benefit service’’ refers to employment with Respondent in
a unit position.
The Union Plan and the Management Plan operate on the
same plan year. In its administration of the Union Plan and
the Management Plan, Respondent is obligated to: (1) con-
tribute to both Plans annually to fund benefits that are earned
under the plans; and (2) furnish each participant with an an-
nual statement of the participant’s accrued benefits under the
plans. For such purposes, at all times material herein, and
continuing to date, in cases in which, in the middle of a plan
year, an individual was transferred from a unit to a nonunit
position or from a nonunit to a unit position, the individual’s
status at the end of the plan year determines the plan in
which he or she will be considered an active participant.
Thus, for example, if an individual serves the first 8 months
of a plan year in a nonunit position and then serves the final
4 months of the plan year in a unit position, the yearend em-
ployee census information furnished to the actuaries for the
plans in order to determine Respondent’s funding obligations
to each of the plans includes the individual with other par-
ticipants in the Union Plan. Similarly, when it prepares the
annual statement of each participant’s accrued benefit, Re-
spondent provides the individual who is in the unit at the end
of a plan year with an annual statement showing the name
of the Union Plan. However, as explained below, the addi-
tional benefit earned by the individual for the year is divided
between the plans according to the individual’s benefit serv-
ice for the year. Accordingly, the participant is credited with
earning an additional benefit under the Management Plan for
the 8 months of service in the nonunit position and is cred-
ited with earning a benefit under the Union Plan for the 4
months of service in the unit position. Except for the mini-
mum accrual provision of the Union Plan, which has never
been applied to an individual for a year in which that indi-
vidual changed between the Union Plan and the Management
Plan, the formula of the Union Plan and the formula of the
Management Plan for benefits accrued from 1981 through
the plan year ending June 30, 1989, were identical. For this
reason, during the period 1981–1989, the total accrued bene-
301KEYSTONE CONSOLIDATED INDUSTRIES
fit for the year, earned by the individual in part under the
Management Plan and in part under the Union Plan, has been
exactly the same as if the individual had accrued the benefit
entirely under either of the Plans.
Because of economic and business conditions in the early
and mid-1980s, Respondent sought and obtained, pursuant to
section 412(d) of the Internal Revenue Code (IRC) and sec-
tion 303 of the Employee Retirement Income Security Act
(ERISA) 29 U.S.C. § 1083, ‘‘funding waivers’’ for the plan
years ending: June 30, 1980; June 30, 1984; and June 30,
1985. These funding waivers permitted Respondent to amor-
tize the required annual contributions to the Union Plan and
the Management Plan, for each of the plan years involved,
over a period of 15 years, beginning on the date the original
required annual contributions were due for each respective
plan year involved, so long as the plans continued to satisfy
statutory conditions imposed by the IRC and ERISA. The
funding waivers are still in effect and the last will expire, if
not extended, no earlier than June 30, 2000.
In 1981, the Management Plan was amended to specify a
formula for the benefit earned or accrued by ‘‘prior service,’’
i.e., for service up to and through 1980. With exceptions that
are not relevant herein, this formula generally provided that
a participant’s monthly normal retirement benefit would be
1.1 percent of the participant’s monthly average earnings
over the 5 calendar years when the individual received the
highest annual compensation in his employment with Re-
spondent (whether in unit or nonunit positions), multiplied by
the number of years of benefit service in both unit and
nonunit positions before January 1, 1981. Since the factors
of this formula had already been determined individually for
each participant and would not change, this accrued benefit
of each participant is referred to as the 1980 ‘‘frozen’’
amount. This amendment was not the subject of any negotia-
tions between Respondent and the Union.
Also in 1981, after negotiations between Respondent and
the Union, the Union Plan was amended to establish a for-
mula to determine the 1980 ‘‘frozen’’ amount, i.e., the bene-
fit earned or accrued by service through 1980, under that
plan. With exceptions that are not relevant herein, the for-
mula provided that a participant’s normal retirement benefit
would be 1.2 percent of the individual’s monthly average
earnings over the 5 calendar years when the individual re-
ceived the highest annual compensation in his employment
with Respondent (whether in unit or nonunit positions), mul-
tiplied by the participant’s number of years of benefit service
in both unit and nonunit positions before January 1, 1981.
In 1981, Respondent computed the 1980 ‘‘frozen’’
amounts of all its personnel, both in unit and nonunit posi-
tions. The benefit formula applied to any individual was the
formula contained in that plan in which the individual was
an active participant on January 1, 1981. Thus, in the case
of a dual participant outside the bargaining unit on January
1, 1981, his or her ‘‘frozen’’ amount was determined by ap-
plication of the formula in the Management Plan. Similarly,
the ‘‘frozen’’ amount of a dual participant in the bargaining
unit on January 1, 1981, was determined by application of
the formula in the Union Plan. A document recording the
computation of each participant’s 1980 ‘‘frozen’’ amount
was placed in his or her personnel file. Since 1981, the 1980
‘‘frozen’’ amount of each individual has remained un-
changed.
Under the Union Plan, the dollar amount of the benefit
earned and payable to a participant is the sum of: (1) the
1980 ‘‘frozen’’ amount; and (2) the benefit accrued since
January 1, 1981.
Annual benefit accruals earned under the Union Plan since
January 1, 1981, are determined by a formula, sometimes re-
ferred to by the parties as a ‘‘career average’’ formula. Spe-
cifically, a participant in the Union Plan earns or accrues an
additional benefit each year or fraction of a year the partici-
pant works in the bargaining unit in an amount equal to 1.2
percent of the participant’s ‘‘recognized compensation,’’ i.e.,
monthly average earnings for the calendar year up to the tax-
able wage base for purposes of Social Security, plus 1.75
percent of the participant’s ‘‘recognized compensation,’’ i.e.,
monthly average earnings for the year in excess of the tax-
able wage base amount.
Since prior to May 3, 1982, the Union Plan has provided
various categories of retirement benefit options, each with
separate eligibility criteria, generally based on years of serv-
ice and age upon retirement. Among these is a benefit op-
tion, referred to as ‘‘Thirty-and-Out,’’ by which participants
are permitted to retire and receive immediate full benefit
payments after 30 years of employment by Respondent. Ef-
fective May 3, 1982, the Union Plan was amended to limit
the ‘‘Thirty-and-Out’’ retirement option only to participants
who had been hired or rehired prior to May 3, 1982, and em-
ployed continuously thereafter, without a loss of seniority as
defined in the collective-bargaining agreement. Thus, partici-
pants hired (or rehired and treated as new hires for seniority
purposes under the collective-bargaining agreement) after
May 3, 1982, were not eligible for the ‘‘Thirty-and-Out’’ op-
tion. As noted above, the period of service for purposes of
exercising the ‘‘Thirty-and-Out’’ option includes both service
in the unit and in nonunit positions, if any.
Under the Management Plan, the dollar amount of the ben-
efit earned and payable to a participant is the sum of: (1) the
1980 ‘‘frozen’’ amount; and (2) the benefit accrued since
January 1, 1981.
Annual benefit accruals earned under the Management
Plan since January 1, 1981, are determined by a formula.
Under the formula in effect at all times material herein, a
participant in the Management Plan earned or accrued an ad-
ditional benefit each year or fraction of a year the participant
performed nonunit service in an amount equal to 1.2 percent
of the participant’s monthly average earnings for the calendar
year up to the taxable wage base for purposes of Social Se-
curity, plus 1.75 percent of the participant’s monthly average
earnings for the year in excess of the taxable wage base
amount.
Prior to November 1, 1982, the Management Plan in-
cluded, among others, three retirement benefit options:
(a) ‘‘Normal’’ retirement at age 65 with ten years of
vesting service or at age 62 with fifteen years of vest-
ing service;
(b) ‘‘Early’’ retirement at age 60 with fifteen years
of vesting service, with an actuarially reduced monthly
benefit to reflect the early payments; and
(c) ‘‘Thirty and Out’’ retirement benefit under which
a participant was eligible for retirement with an imme-
diate full benefit upon completing thirty years of vest-
ing service with Respondent.
302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Effective November 1, 1982, the Management Plan was
amended to eliminate the ‘‘Thirty-and-Out’’ retirement bene-
fit except for those participants who had completed 30 years
of vesting service prior to November 1, 1982. In addition,
the ‘‘90-point’’ option, a new retirement benefit, was added
for individuals who were participants in the Management
Plan on October 31, 1982, and who, as of that date, had
completed at least 10 years of vesting service. The ‘‘90-
point’’ benefit entitles a participant to retire with an imme-
diate full benefit when the sum of the participant’s years of
age plus the participant’s years of vesting service equals or
exceeds 90.
The following will illustrate the operation of the ‘‘Thirty-
and-Out’’ option prior to the 1982 amendments to the Union
and Management Plans described above. Participants in ei-
ther plan were eligible to retire under the ‘‘Thirty-and-Out’’
option on completing 30 years of service for Respondent,
whether the service had been performed in the unit, in
nonunit positions, or in a combination of unit and nonunion
service. For example, an individual who served for 10 years
in the unit and 20 years in nonunit positions was eligible to
retire under the ‘‘Thirty-and-Out’’ options in both the Man-
agement and Union Plans.
Between September 30 and October 31, 1982, inclusive,
three dual participants retired. Between November 1, 1982,
and July 31, 1986, another 20 dual participants retired.
At all times material, the amount of the total monthly ben-
efit received by a dual participant under the plans on retire-
ment consists of the sum of: (1) the 1980 ‘‘frozen’’ amount,
if any; (2) the benefit, if any, accrued after December 31,
1980, under the Management Plan, as computed by applica-
tion of the benefit formula of the Management Plan; and (3)
the benefit, if any, accrued after December 31, 1980, under
the Union Plan, as computed by application of the benefit
formula of the Union Plan. The individual’s total monthly
pension benefit is paid in the form of a single monthly check
from the trust used to fund the plan under which the individ-
ual was an active participant last.
Until 1986, the particular trust which paid the retirement
benefits of a dual participant retiree was determined by
whether the individual was deemed to have retired from a
unit position or nonunit position. For example, if a dual par-
ticipant retired from a unit position, the trust used to fund
the Union Plan absorbed the entire cost of the participant’s
total monthly retirement benefit and made no charges against
the trust used to fund the Management Plan under which the
retiree had earned part of that benefit.
In 1985, representatives of the Union became aware Re-
spondent was allocating charges to the Union Plan for dual
participant-retirees as described above. Promptly thereafter,
the Union presented its position to the Respondent that: (1)
assets from the trust used to fund the Union Plan should not
be used to pay the entire retirement benefit of a dual partici-
pant who returned to the unit immediately prior to retirement
and proceeded to retire under the Union Plan, but such retire-
ment benefit should be allocated between the trusts used to
fund the Management and Union Plans according to relative
service under the Plans; and (2) the Union Plan should be
made whole for Respondent’s past incorrect allocation of
payments between the trusts used to fund the Union Plan and
Management Plan.
As a result of their discussions, Respondent and the Union
agreed in 1986 that Respondent would: (1) identify the dual
participants who had retired since September 30, 1982; (2)
determine the correct allocation of benefits attributable to
each plan; (3) determine whether and to what extent the as-
sets of the Union Plan had been overcharged; (4) restore the
Union Plan with assets equal to the amount of the over-
charge, plus interest thereon; and (5) thereafter charge the as-
sets of the Union Plan in proportion to benefits earned under
that plan. Respondent and the Union further agreed upon a
formula (the 1986 allocation formula) to be used to deter-
mine the amount of benefits attributable to each plan. In ad-
dition, Respondent and the Union agreed that no adjustment
would be made to the allocation of payments of benefits to
dual participants who retired prior to September 30, 1982.
The 1986 allocation formula referred to above, provided
that: (1) each dual participant retiree’s 1980 frozen amount
was to be allocated between the assets of the Management
and Union Plans in proportion to the numbers of months of
service under the respective plans prior to January 1, 1981;
(2) benefits earned after January 1, 1981, would be computed
in accordance with the formulas of the respective plans and
charged to the assets of each plan in proportion to the total
amounts accrued under the respective plans; and (3) the spe-
cial initial pension payment to each retiree, described above,
was to be allocated against the assets of each plan in propor-
tion to the total months of service of the individual under
each plan.
In accordance with the agreement, described above, in
1886 Respondent analyzed the benefit accruals and payments
from the Union Plan and the Management Plan for all 23
dual participants who had retired since September 30, 1982.
Based on these calculations, Respondent found that the assets
of the Union Plan had been overcharged for retirement bene-
fit payments from 1981 until 1986 and that the assets of the
Management Plan had been undercharged for such payments.
Accordingly, Respondent caused the trustee of the Manage-
ment Plan to transfer from that plan to the Union Plan the
amount of the overcharge together with earnings on that
amount, thereby making the Union Plan whole.
Since the 1986 correction, payments of benefits earned
under the Union Plan have been charged to the assets of the
Union Plan, and payments of benefits earned under the Man-
agement Plan have been charged to the assets of the Manage-
ment Plan, in accordance with the agreement and 1986 allo-
cation formula.
After the 1986 correction, between August 1, 1986, and
November 1, 1988, 15 dual participants retired.
The three dual participants who retired between September
30, 1982, and October 31, 1982, qualified for retirement
under the ‘‘Thirty-and-Out’’ options of both the Management
Plan and the Union Plan. Of the 35 dual participants who re-
tired between November 1, 1982, and November 1, 1988, 16
qualified for various retirement options under both the Man-
agement Plan and the Union Plan. The remaining nineteen
dual participants who retired during this period qualified for
the ‘‘Thirty-and-Out’’ option of the Union Plan, but did not
immediately qualify for a full benefit at retirement under any
option of the Management Plan. Nevertheless, Respondent
permitted payment to each of these 19 retirees, immediately
upon retirement, of a full monthly accrued benefit under the
Union Plan and a full monthly accrued benefit under the
303KEYSTONE CONSOLIDATED INDUSTRIES
2 Chemical Workers v. Pittsburgh Plate Glass, 404 U.S. 157
(1971); United Technologies Corp., 274 NLRB 1069 (1985), enfd.
789 F.2d 121 (2d Cir. 1986).
Management Plan, with payments allocated as provided in
the 1986 agreement and formula described above. Respond-
ent asserts that such payment of benefits from the Manage-
ment Plan to these nineteen individuals was inconsistent with
the terms of the Management Plan and should not have been
made.
In early November 1988, on advice of its attorneys, Re-
spondent concluded that its administration of the Manage-
ment Plan, with regard to its payment of benefits under the
‘‘Thirty-and-Out’’ option, as described above, was not in ac-
cord with the provisions of that plan.
During November 1988, Respondent decided to take the
following actions with respect to its administration of the
Management Plan’s ‘‘Thirty-and-Out’’ option: (1) repay to
the trust used to fund the Management Plan a sum equal to
the payments made from the assets of the plan to the nine-
teen dual participants who elected to retire under the ‘‘Thir-
ty-and-out’’ option between November 1, 1982, and Novem-
ber 1, 1988, at times when they were ineligible to receive
pension benefits under any option of the Management Plan
(affected retirees), plus earnings that would have accrued on
those payments; (2) discontinue the practice of making bene-
fit payments from assets of the Management Plan to the af-
fected retirees, all of whom were still ineligible to receive
those payments under any option of the Management Plan,
as well as to any and all dual participants in nonunit posi-
tions and in unit positions not yet retired who thereafter
elected to retire under the ‘‘Thirty-and-Out’’ option for
which they qualified under the Union Plan when they did not
satisfy the criteria for eligibility under any retirement option
of the Management Plan; (3) make regular payments from
the general assets of Respondent to the affected retirees in
amounts equal to those payments which they had previously
received from the Management Plan until each becomes eli-
gible under any retirement option of the Management Plan;
and (4) notify any and all dual participants in nonunit posi-
tions and in unit positions, whether retired or still working,
about these measures.
The measures of the Respondent summarized above con-
cerned three groups of participants of the Management Plan.
These groups, and the numbers of individuals in each group
in November 1988, were: (1) the 19 affected retirees; (2) 147
dual participants currently employed in management or other
nonbargaining unit positions (group 2); and (3) dual partici-
pants currently employed in bargaining unit positions (group
3). Respondent has identified 36 individuals in group 3, and
it is not disputed that there may be additional individuals in
group 3.
Of the 36 identified individuals in group 3, all had left the
bargaining unit once and returned once. These individuals re-
turned to the unit on various dates between May 12, 1962,
and August 17, 1987, and remained in the unit thereafter.
Thirty-three had worked for Respondent outside the unit as
foremen in positions supervising bargaining unit employees
for periods of time varying from 5-1/2 months to 26 years
and 9 months. Three had worked for Respondent outside the
unit in nonsupervisory positions for periods of time ranging
from 5 months to 6 years. Two had been employed outside
the unit and returned because Respondent, in exercising its
discretion, reclassified their jobs as payroll clerks from unit
positions to nonunit positions and then, about 2 years later,
reclassified their jobs back to unit positions.
Before Respondent notified Management Plan participants
of the measures it was taking, three members of group 2 who
were not entitled to receive a full benefit under the ‘‘Thirty-
and-Out’’ option of the Management Plan had already for-
mally applied for retirement under the Management Plan as
well as the Union Plan in the belief that they were entitled
to return to the unit and retire with a full benefit from each
plan. Respondent decided to treat these three individuals as
though they were affected retirees.
At the direction of Respondent’s vice president of admin-
istrative services, Lyle Pfeffinger, letters were drafted to each
of the individuals in the three groups of participants identi-
fied above, advising them of the measures described above.
These letters were mailed to individuals in groups 1 and 2
on November 10 and to group 3 on November 21.
On November 23, 1988, the Union sent a letter to Re-
spondent protesting its unilateral changes in the management
pension plan as it pertains to retirement and taking the posi-
tion that changes could not be made during the life of the
current labor agreement without the express agreement of the
Union.
Respondent replied by letter dated December 15, 1988, in
which it states that it has no obligation to bargain with the
Union concerning the terms of the management pension plan
or how it is administered. It also denies that there had been
any changes in the language of the plan.
Analysis and Conclusion
The above facts clearly indicate that historically the union
pension plan and the management pension plan have been re-
garded, in all respects, as separate and distinct documents.
The union pension plan is a document drafted as a result of
the collective-bargaining process. Its benefits were meant to
be enjoyed by employees in the unit covered by the collec-
tive-bargaining agreement and represented by the Union. The
benefits to be derived under this plan are, like wages, and
other benefits and emoluments, remuneration for unit work
performed and any unilateral change in its provisions made
by the Respondent might well be considered violative of Sec-
tion 8(a)(5) of the Act.
On the other hand, the management pension plan is a doc-
ument which is not the result of the collective-bargaining
process. The Union had no input, whatsoever, into its initial
drafting nor into any subsequent changes in its provisions. Its
benefits were meant to be enjoyed by employees, mostly
managerial and supervisory employees, who were not unit
employees, not covered by the collective-bargaining agree-
ment and not represented by the Union. The benefits to be
derived under this plan are, like wages, salaries and other
benefits and emoluments, remuneration for work performed
outside the unit by nonunit employees and any unilateral
change made by the Respondent is at its own discretion.
The Respondent has no obligation to bargain with the
Union concerning wages, hours or other conditions of em-
ployment of employees who are neither covered by the col-
lective-bargaining agreement nor represented by the Union at
the time these employees are earning such benefits.2 This is
so, regardless of whether the benefits being earned by these
304 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
nonunit employees are being enjoyed as immediate remu-
neration in the form of wages, insurance or similar benefits,
or in the form of benefits to be enjoyed in the future, such
as pension payments after retirement.
The fact that certain nonunit employees might choose to
transfer back into a unit job and thereby begin to earn credits
under the Union Plan rather than under the Management Plan
is irrelevant to the issues here under consideration. Such a
transfer does not endow the Union with bargaining rights
over the Management Plan where none existed before, nor,
ab initio, over the pension credits previously earned by em-
ployees they did not represent.
I find that Respondent was not obliged to bargain with the
Union before making unilateral changes in the management
pension plan and did not thereby violate Section 8(a)(5) of
the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Sec-
tion 2(2) of the Act and is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The Respondent has not committed any of the unfair
labor practices alleged in the complaint.
[Recommended Order for dismissal omitted from publica-
tion.]