Morelli Construction Co.

National Labor Relations Board - Board Decisions

Mar 5, 1979

240 N.L.R.B. 1190 (N.L.R.B. 1979)

1190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Morelli Construction Company and IlcAal No. 324.
324-A, 324-B, and 324-C, International Union of
Operating Engineers, AFI-CIO. Case 7 CA
15302(2)
March 5,. 1979
DECISION AND ORDER
BY CHAIRMAN FANNING \N) MMII1BIRS P.N: I ()
AN) TRI [S)AIE
Upon a charge filed on June 27, 1978, by Local
No. 324, 324-A. 324-B, and 324-C(', International
Union of Operating Engineers. AFL- CIO. herein
called the Union, and duly served on Morelli Con-
struction Company, herein called Respondent. the
General Counsel of the National Labor Relations
Board, by the Regional [)irector for Region 7, issued
a complaint and notice of hearing on August 9. 1978.
against Respondent, alleging that Respondent had
engaged in, and was engaging in, unfair labor prac-
tices affecting commerce within the meaning of Sec-
tion 8(a)(5) and (1) and Section 2(6) and (7) of the
National Labor Relations Act, as amended. C'opies
of the charge, complaint, and notice of hearing be-
fore an Administrative Law Judge were duly served
on the parties to this proceeding.
With respect to the unfair labor practices, the com-
plaint alleges, in substance, that at all times since
October 18, 1976, by virtue of a collective-bargaining
agreement between Respondent and the Union, the
most recent contract having by its terms been effec-
tive from September 1. 1976, until September 1, 1978,
the Union has been, and is now, the exclusive bar-
gaining representative of all employees in a unit of all
operating engineers, mechanics, oilers, and appren-
tice engineers employed by Respondent: that the
aforementioned most recent collective-hbargaining
agreement between Respondent and the Union pro-
vided, inter alia, for the payment by Respondent of
moneys into various fringe benefit funds established
for the benefit of employees of Respondent: and
that, since on or about December 27, 1977. and con-
tinuing to date, Respondent has refused, and contin-
ues to refuse, to bargain collectively with the Union
by engaging in conduct, on or about December 27.
1977, whereby it unilaterally and without notice to
the Union modified the terms of the collective-bar-
gaining agreement between Respondent and the
Union by paying unit employees for services per-
formed but failing to make the fringe benefit pay-
ments provided for in the contract. Subsequently,
Respondent filed its answer to the complaint admit-
ting in part, and denying in part, the allegations in
the complaint.
240 NLRB No. 170
On September 29, 1978, counsel for the General
(Counsel filed directly with the Board a Motion for
Summary Judgment, with attachments. Subsequent-
lv, on October 12, 1978, the Board issued an order
transferring the proceeding to the Board and a No-
tice lFo Show Cause why the General Counsel's Mo-
tion for Summary Judgment should not be granted.
Respondent has failed to file a response to the Notice
T'o Show ('ause.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
lpon the entire record in this proceeding, the
Board makes the following:
Ruling on the Motion for Summary Judgment
In Respondent's answer to the complaint, it admits
the alleged failure to make contractually required
fringe benefit payments but seeks to excuse its con-
duct by stating that "while it has been financially
unable to make the aforesaid fringe benefit pay-
ments, it has at all time been ready, willing and able
to collectively bargain with the charging party' in ref-
erence thereto." It is well established, however. that
an employer acts in derogation of its bargaining obli-
gation under Section 8(c) of the Act, and thereby
violates Section 8(a)(5) of the Act, when, during the
life of a collective-bargaining agreement between it
and a union, it unilaterally modifies or otherwise re-
pudiates terms and conditions of employment con-
tained in the agreement. It is equally well established
that economic necessity is not cognizable as a de-
fense to the unilateral repudiation of monetary provi-
sions in a collective-bargaining agreement. We
therefore find that no material issues of fact exist in
this proceeding which warrant a hearing.2 Accord-
, \Nao (,un.., l, lehlih tli,tici, 4 i,.. ialit i, l I e . 227 NI.RB 1680.
I1683 84 1977 ()OaA ( /-G(;oplman Bking (wnpml, 2117 N RB 1063. 064
119731 ( tl S fR. /ndluric 11e . I15 NRB 454 46 460 (1966
-Respo dent's .nser to the coimplaint tated that it was w ilthout uffi-
cilelt lifrillfriil io to formulate ain atnswer ti par. 4(b) f the coimplain.t
wherein it is alleced that ( & M lUnderground ( onlracting (o.. to which
Relpondent aditIlledlI furnishes inlrastate services alued in excess of
$ I(X.1NX1) perforlm, sr ices salied in excess f $50.0(H8 directl, for custom-
er licaied toutside the State of Michigan. Although the complaint allega-
Ino1 about the direct interstatle outflow of er ices provided b' G & N1
l nlderground hlave not been iubstantiated, the G(eneral (ounsel has at-
tached to the Nl ,tion for Sunllilllr Judgment it cops of a [)eclsion issued hb
Adilnlilstrutl e l.iw Judge Irv in Kaplan and subsequentll adopted by the
Board i (; d 1 i AT ihrtrloutld ( otntrai tinl ( 239 NRB 78 (1978i in
wtllh it ias admrlitted ad foud ha the n3ailed parts respondent received
iIn anllual direct iltersalte inflovs of goods alld anlterials alued in excess of
$50.(IN) 1 lhe uncontroverted ceidence that ( & M nderground Contract-
Ing (o. Inees the Board's direct inflow jurisdictional iandard in conjunc-
tion i with facts alleged anidildltted hb Respondent about it, on opera-
tints, silffices It establhish that Respoident neets the Board's indirect inflow
MORELLI CONSTRUCTION COMPANY 1191
ingly, we grant the Motion for Summary Judgment.
On the basis of the entire record, the Board makes
the following:
FINiNGs OF FA(I
I. ITE Bt SINE.SS OF RSPONI)ENT
Respondent is a Michigan corporation with its
principal office and place of business in Oak Park.
Michigan, and is engaged in digging and laying sew-
ers and water mains for the construction industry
within the State of Michigan. During the year ending
December 1977, a representative period, Respondent
provided sewer and water main construction services
valued in excess of $500,000, including services val-
ued in excess of $100,000 provided to G & M Under-
ground Contracting Co., another Michigan corpora-
tion. During a similarly representative annual period
ending March 1977, G & M Underground Contract-
ing Co., in connection with its business operations,
purchased and caused to be transported and deliv-
ered at its Roseville, Michigan. place of business
goods and materials valued in excess of $100,000. of
which goods and materials valued in excess of
$50,000 originated outside the State of Michigan.
We find, on the basis of the foregoing, that Re-
spondent is, and has been at all times material
herein, an employer engaged in commerce and in an
industry affecting commerce within the meaning of
Section 2(6) and (7) of the Act, and that it will effec-
tuate the policies of the Act to assert jurisdiction.
I [iHE LABOR OR(JANIZAIION INVOI Vtl)
Local No. 324, 324--A, 324- B. and 324--C., Interna-
tional Union of Operating Engineers, AFL CIO, is a
labor organization within the meaning of Section
2(5) of the Act.
II111. IHE UNFAIR LABOR PRA( I(IS
A. The Representative Status of the Union
1. All operating engineers, mechanics, oilers, and
apprentice engineers employed by Respondent, but
excluding guards and supervisors as defined in the
Act, constitute a unit of employees appropriate for
the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.
2. At all times since October 18, 1976, by virtue of
jurisdictional standard. Srns l hnl, Scrin e, 122 N L.RB 81 (1958). We
therefore find that no issue of fact exists with respect to Ihe Board', a.s,er-
tion of jurisdiction oer Respondent
a collective-bargaining agreement between Respon-
dent and the Union. which by its terms was in effect
from September 1, 1976, until September 1. 1978, the
Union has been the recognized collective-bargaining
representative of Respondent's employees in the unit
described above and, by virtue of Section 9(a) of the
Act, is and has been the exclusive collective-bargain-
ing representative of said employees for the purpose
of collective bargaining with respect to rates of pay,
wages, hours, and other terms and conditions of em-
ployment.
B. The Unilateral Changes
Since on or about December 27, 1977, and contin-
uing to date. Respondent, without first giving notice
to and bargaining with the Union, has unilaterally
modified the terms of the collective-bargaining
agreement described above by failing to make con-
tractually provided-for payments into various fringe
benefit funds established for the benefit of
Respondent's employees in the unit described above.
Accordingly, we find that Respondent, by the acts
and conduct set forth herein, did refuse, and is refus-
ing, to bargain collectively in good faith with the
Union as the exclusive representative of the employ-
ees in the unit found appropriate. and thereby has
engaged in, and is engaging in, unfair labor practices
within the meaning of Section 8(a)(5) and () of the
Act.
I 111-. -.IFF LI O I HI FL NiAIR LABOR PRA( II(tlS t:PON
('o0 MMI R(F'[
The activities of Respondent set forth in section
Ill, above, occurring in connection with its opera-
tions described in section 1. above. have a close, inti-
mate, and substantial relationship to trade, traffic.
and commerce among the several States and tend to
lead to labor disputes burdening and obstructing
commerce and the free flow of commerce.
V. THE R-MEDY
Having found that Respondent has engaged in,
and is engaging in, unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act, we
shall order that it cease and desist therefrom, and
that it take certain affirmative action as set forth be-
low designed to effectuate the purposes and policies
of the Act. We shall, in particular. order Respondent
to make whole employees in the collective-bargain-
ing unit involved herein by making all fringe benefit
fund payments, which should have been made pur-
suant to the terms of the September 1, 1976, to Sep-
1192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tember 1, 1978, collective-bargaining agreement be-
tween Respondent and the Union, but were not
made as a result of Respondent's unfair labor prac-
tices.3
The Board, upon the basis of the foregoing facts
and the entire record, makes the following:
CONCLUSIONS OF LAW
1. Morelli Construction Company is an employer
engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
2. Local No. 324, 324-A, 324-B. and 324-C, Inter-
national Union of Operating Engineers, AFL-CIO.
is a labor organization within the meaning of Section
2(5) of the Act.
3. All operating engineers, mechanics, oilers, and
apprentice engineers employed by Respondent, but
excluding guards and supervisors as defined in the
Act, constitute a unit of employees appropriate for
the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.
4. At all times material herein, the above-named
labor organization has been the exclusive representa-
tive of all the employees in the aforesaid appropriate
unit for the purposes of collective bargaining within
the meaning of Section 9(a) of the Act.
5. By the acts and conduct described in section III
B, above, Respondent has refused to bargain collec-
tively in good faith, and is refusing to bargain collec-
tively in good faith, with the above-named labor or-
ganization as the exclusive representative of
Respondent's employees in the above-described ap-
propriate unit, and thereby has engaged in, and is
engaging in, unfair labor practices within the mean-
ing of Section 8(a)(5) of the Act.
6. By the acts and conduct described in section III
B, above, Respondent has interfered with, restrained,
and coerced, and is interfering with, restraining, and
coercing, employees in the exercise of the rights guar-
anteed to them in Section 7 of the Act, and thereby
has engaged in, and is engaging in, unfair labor prac-
tices within the meaning of Section 8(a)(1) of the Act.
7. The aforesaid unfair labor practices are unfair
Because the provisions of employee benefit fund agreements are varia-
ble and complex, the Board does not provide at the adjudicatory stage of a
proceeding for the addition of interest at a fixed rate on unlawfully withheld
fund payments. We leave to the compliance stage the question whether
Respondent must pay any additional amounts into the benefit funds in
order to satisfy our "make whole" remedy. hese additional amounts ma5
be determined, depending upon the circumstances of each case. by refer-
ence to provisions in the documents governing the funds at issue and. where
there are no governing provisions, to evidence of any loss directly attribut-
able to the unlawful withholding action, which might include the loss of
return on investment of the portion of funds held. additional adminis(ratve
costs, etc., but not collateral losses.
labor practices affecting commerce within the mean-
ing of Section 2(6) and (7) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the Respondent,
Morelli Construction Company, Oak Park, Michi-
gan, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Unilaterally refusing to make fringe benefit
fund payments provided for in a collective-bargain-
ing agreement entered into with Local No. 324, 324-
A, 324-B, and 324-C, International Union of Oper-
ating Engineers, AFL-CIO, without first giving no-
tice to and bargaining with the aforesaid Union as
the exclusive bargaining representative of its employ-
ees in the following appropriate unit:
All operating engineers, mechanics, oilers, and
apprentice engineers employed by Morelli Con-
struction Company, but excluding guards and
supervisors as defined in the Act.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them in Section 7 of the Act.
2. Take the following affirmative action which the
Board finds will effectuate the policies of the Act:
(a) Upon request, bargain collectively with Local
No. 324, 324-A, 324-B, and 324-C, International
Union of Operating Engineers, AFL-CIO, as the
bargaining representative of its employees in the
above-described appropriate unit as to rates of pay,
wages, hours, and other terms and conditions of em-
ployment, and, if an understanding is reached, em-
body such understanding in a signed agreement.
(b) Make whole the employees in the above-de-
scribed unit in the manner set forth in the section of
this Decision entitled "The Remedy" for
Respondent's unlawful failure to make all fringe ben-
efit fund payments required by its contract with the
Union,
(b) Post at its Oak Park, Michigan, location copies
of the attached notice marked "Appendix." 4 Copies
of said notice, on forms provided by the Regional
Director for Region 7, after being duly signed by
Respondent's representative, shall be posted by Re-
spondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter,
in conspicuous places, including all places where no-
4 In the event that this Order is enforced b a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National L.abor 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."
MORELLI CONSTRUCTION COMPANY 1193
tices to employees are customarily posted. Reason-
able steps shall be taken by Respondent to insure
that said notices are not altered, defaced, or covered
by any other material.
(c) Notify the Regional Director for Region 7. in
writing, within 20 days from the date of this Order.
what steps Respondent has taken to comply here-
with.
APPENDIX
NorTIc To EMPLOYEES
POSTED BY ORDER OF HI
NATIONAl LABOR RELAIIONS BOARD
An Agency of the United States Government
WE WILl. Nor unilaterally refuse to make fringe
benefit fund payments provided for in a collective-
bargaining agreement entered into with Local No.
324, 324-A, 324-B. and 324-C. International Union
of Operating Engineers, AFL CIO, without first giv-
ing notice to and bargaining with that Union as the
exclusive bargaining representative of employees in
the following appropriate bargaining unit:
All operating engineers, mechanics, oilers,
and apprentice engineers employees by Mor-
elli Construction Company, but excluding
guards and supervisors as defined in the Act.
Wl wiii. NOi in any' like or related manner inter-
fere with, restrain, or coerce our employees in the
exercise of the rights guaranteed them by Section 7
of the Act.
W WitLL, upon request, bargain collectively with
the above-named Union as the bargaining represen-
tative of our employees in the above-described ap-
propriate unit as to rates of pay, wages, hours, and
other terms and conditions of employment, and, if an
understanding is reached, embody such under-
standing in a signed agreement.
Wi- Wli. make whole the employees in the appro-
priate bargaining unit described above by making all
fringe benefit fund payments which should have
been made pursuant to the terms of the September 1,
1976, to September , 1978, collective-bargaining
agreement between ourselves and the above-named
Union but were not made as a result of our unlawful
cond uct.
MORELLI CONSTRCTION COMPANY