Navajo Freight Lines, Inc.

National Labor Relations Board - Board DecisionsMar 10, 1981

254 N.L.R.B. 1272 (N.L.R.B. 1981)

Inc. Jerrold 10(c) ORDER 1, ORDER F collective- 1272 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Navajo Freight Lines, Inc. and International Associ- ation of Machinists and Aerospace Workers, District Lodge No. 1635, AFL-CIO Arkansas-Best Freight System, and Internation- al Association of Machinists and Aerospace Workers, District Lodge 1635, AFL-CIO. Cases 28-CA-4830 and 28-CA-5332 March 10, 1981 DECISION AND ORDER On October 30, 1980, Administrative Law Judge H. Shapiro issued the attached Decision in this proceeding. Thereafter, Respondents Navajo Freight Lines, Inc., and Arkansas-Best Freight System, Inc., the General Counsel, and the Charg- ing Party filed exceptions and supporting briefs. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Navajo Freight Lines, Inc., Albuquerque, New Mexico, its officers, agents, successors, and assigns, and the Respond- ent, Arkansas-Best Freight Systems, Inc., Albu- querque, New Mexico, its officers, agents, succes- sors, and assigns, shall take the action set forth in the said recommended Order, except that the at- tached Appendix A and Appendix B are substituted for those of the Administrative Law Judge. APPENDIX A NOTICE TO EMPLOYEES POSTED BY OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT, in the event we resume oper- ations, engage in the following conduct: (a) re- fusal to bargain collectively with International Association of Machinists and Aerospace Workers, District Lodge No. 1635, AFL-CIO, as the exclusive bargaining representative of all of the employees in the appropriate unit by refusing to enter into collective-bargaining ne- gotiations with the above-described Union for an Area Practices Agreement; (b) unilaterally changing the wages, hours, or other terms and conditions of employment of the employees in 254 NLRB No. 166 the appropriate unit; (c) in any like or related manner interfering with, restraining, or coerc- ing employees in the exercise of the rights guaranteed them in Section 7 of the National Labor Relations Act, as amended. WE WILL reimburse employees for the loss of vacation pay they may have suffered from April 1978, to December 31, 1978, due to our unilateral reduction in the vacation pay of the employees in the appropriate unit, with in- terest thereon. The appropriate unit consists of all of the employees employed at the Albuquerque, New Mexico terminal performing the fol- lowing work: maintenance, body and fender work, painting, rebuilding, dismantling, as- sembling, repairing, installing, erecting, welding (or grinding processes connected therewith), inspecting, diagnosing, cleansing, preparing or conditioning of all units and auxiliaries (including refrigeration and air conditioning units) relating to passenger cars, motorcycles, tractors, trucks, trailers, cargo containers, dollies, shovels, trench digging and excavating equipment, and all other types of powered machinery, exclud- ing supervisors as defined by the Act. APPENDIX B NOTICE TO EMPLOYEES POSTED BY OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with International Association of Machinists and Aerospace Workers, District Lodge No. 1635, AFL-CIO, as the exclusive bargaining representative of all employees in the appro- priate unit by refusing to enter into bargaining negotiations with the Union for an Area Practices Agreement or by unilaterally changing the wages, hours, or other terms and conditions of employment of the employees in the appropriate unit. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed employ- ees in Section 7 of the National Labor Rela- tions Act, as amended. WE WILL restore the status quo ante which existed prior to the implementation of the Feb- ruary 6, 1979, unilateral changes with regard FRElGl JERROLD 8(a)(5) Sec. 2(6) thc Sec. 2 ( 5 ) 8(a)(5) 8(a)(5) 8(a)(5) 8(a)(5) (1) P UNFAIR 1273 NAVAJO HT LINES, INC. t o the scheduling o f vacations and the pay- ment o f vacation moneys o f the employees in the appropriate unit, and pay interest t o t he employees for t h e period of t ime vacation was withheld f rom them. WE WILL, upon request, enter into collec- tive-bargaining negotiations wi th the above- named Union for an Area Practices Agree- ment t o cove r t he employees in the appropri- a t e unit and, if an understanding is reached, embody such understanding in a signed agree- ment. T h e appropriate unit consists o f all of t he employees employed a t t he Albuquerque, N e w Mexico terminal performing the fol- lowing work: maintenance, body and fender work, painting, rebuilding, dismantling, as- sembling, repairing, installing, erecting, welding (or grinding processes connected therewith), inspecting, diagnosing, cleansing, preparing o r conditioning o f al l units and auxiliaries (including refrigeration and air conditioning units) relating t o passenger cars, motorcycles, tractors, trucks, trailers, c a rgo containers, dollies, shovels, t rench digging and excavating equipment, and all o ther types o f powered machinery, exclud- ing supervisors a s defined by t he Act . DECISION H. SHAPIRO, Administrative Law Judge: The hearing in this consolidated proceeding took place on June 17, 1980, and is based on unfair labor practice charges filed by International Association of Machinists and Aerospace Workers, District Lodge No. 1635, AFL- CIO, herein called the Union, in Case 28-CA-4830 on May 2, 1978, against Navajo Freight Lines, Inc., herein called Respondent Navajo or Navajo, and in Case 28- CA-5332 on May 10, 1979, against Arkansas-Best Freight Systems, Inc., herein called Respondent ABF or ABF. On February 11, 1980, the Regional Director for Region 28 of the National Labor Relations Board, on behalf of the Board's General Counsel, issued a consoli- dated complaint in these cases alleging that Respondents violated Section and (1) of the National Labor Relations Act, as amended, herein called the Act. Re- spondents filed an answer denying the commission of the alleged unfair labor practices. Respondents admit that they are employers engaged in commerce within the meaning of and (7) of the Act and meet the National Labor Relations Board's applicable discretionary jurisdictional standard. Also. Respondents admit that the Union is a labor organization within meaning of of the Act. As posed by the pleadings, the ultimate questions for decision which were litigated during this proceeding are as follows: Whether Respondent Navajo on or about April 1, 1978, violated Section and (1) of the Act by unilaterally reducing employees' vacation pay without affording the Union an opportunity to bargain; whether Respondent Navajo since on or about March 13, 1978, has violated Section and (1) of the Act by refus- ing to enter into collective-bargaining negotiations with the Union for an Area Practices Agreement to replace the one which was scheduled to terminate later that month; if Respondent Navajo committed the aforesaid unfair labor practices, was its successor employer, Re- spondent ABF, which took over the employing enter- prise on or about December 31, 1978, responsible for re- med ying the unfair labor practices; whether Respondent ABF on o r about February 6, 1979, violated Section and (1) of the Act by unilaterally changing the way in which employees' vacation were scheduled and employees' vacation moneys were paid, without afford- ing the Union an opportunity to bargain; whether Re- spondent ABF since on or about March 21, 1979, has violated Section and of the Act by refusing to enter into collective-bargaining negotiations with the Union for an Area Practices Agreement. Upon the entire record, including my observation of the witnesses, and upon consideration of the briefs, I hereby make the following: 1. THE ALLEGED LABOR PRACTICES A. The Evidence Respondent Navajo during the time material, until De- cember 31, 1978, when it ceased doing business, was a trucking company engaged in interstate and intrastate transportation of freight throughout the western part of the United States. Navajo's sole facility involved in this case is its terminal located in Albuquerque, New Mexico, herein called the Albuquerque terminal. The Union since at least 1951 represented the mechanics employed by Navajo at the Albuquerque terminal. In approximately 1962, Respondent Navajo and the Union agreed t o be bound by a series of Western States Trucking Mainte- nance Agreements which they agreed would govern the terms and conditions of employment of the mechanics employed at the Albuquerque terminal. These agree- ments, herein called the 11 Western States Agreements, cover trucking companies located in the 11 western states. They are entered into by the International Associ- ation of Machinists and Aerospace Workers, AFL-CIO (IAM), and its several affiliated unions and district lodges; including the Union with several employer asso- ciations, including the Western Empire Operators Asso- ciation, on behalf of their employer members who have given them the power of attorney to negotiate on their behalf. Although Respondent Navajo was a member of the Western Empire Operators Association it never gave the Association the authority to bargain on its behalf for its Albuquerque terminal but, as the parties stipulated, "by their conduct" the Union and Respondent Navajo 1274 l I mul- 11 frac- tion DECISIONS OF NATIONAL LABOR RELATIONS BOARD hound themselves to the terms of the successive I I West- ern States Agreements. Also, in this regard Norman Pixler, the general manager of the Western Empire Op- erators Association, testified that from the date of the first Western States Agreement in 1962 that Navajo never gave his association the authority to bargain on its behalf for the Albuquerque terminal as a part of the tiassociation multiemployer bargaining unit, but adopted a "me too" attitude and went along with the terms of the several agreements as a matter of custom. The I I Western States Agreement in effect during the time material herein was effective from April 1, 1976, through March 31, 1979. The predecessor to this agree- ment was effective from July 1, 1973, to March 31, 1976. The pertinent provisions included in the 1973-76 and 1976-79 Western States Agreements are as follows: ARTICLE 6 MAINTENANCE O F CONDITIONS Section 1. Entire Agreement T h e terms and provisions of this Agreement shall constitute the entire Agreement between the parties with respect to the subject matter hereof, and shall supersede all previous agreements o r understand- ings, whether written, oral o r implied, concerning such subject matter. Section 2. Conflicting Agreements The Employer shall not enter into any agreement o r contract with his employees individually o r col- lectively, which in any way conflicts with the terms and provisions of this Agreement. Any such agree- ment o r contract shall be held null and void. Section 3. Non-Precedent Setting The waiver of any breach or condition of this Agreement by either party o r by an individual em- ployee shall not constitute a precedent in the future enforcement of any terms and conditions herein. Section 4. Area Practices Wherever existing area practices exceed or are different from the provisions of this Agreement they shall be reduced to writing and signed by the Employer Association and the Local o r District Lodge involved. N o new or additional practices shall be negotiated except by the Western States Truckline Union and Employer Negotiating Com- mittees. ARTICLE 20 VACATIONS Section 1. Vacation Schedule Each employee who has completed one (1) year o r more of continuous service with an individual Employer shall be entitled to an annual vacation with pay in accordance with the following sched- ule: One ( I ) week after one ( I ) year of continuous service; T w o (2) weeks after two (2) years of continuous service; Three (3) weeks after ten (10) years of continu- ous service; Four (4) weeks after fifteen (15) years of continu- ous service; Five (5) weeks after twenty (20) years of continu- ous service. The contract language in effect on the employ- ee's Anniversary Date [Eligibility Date] determines the number of weeks of vacation to which he is en- titled. Section 2. Vacation Pay (a) Vacation pay per week shall be forty (40) times the employee's regular hourly rate; provided that the employee's shift differential shall be includ- ed on a pro-rata basis. For each month in his previ- ous anniversary year that the employee worked a majority of his time on a premium shift, the premi- um rate for that month shall be used in computing his vacation pay. (b) Wage rates in effect when the employee takes his vacation shall be used to determine the amount of his vacation pay. Section 3. Pro-rata Vacation Each employee who has completed six (6) months of continuous service with an individual Employer and who quits o r is terminated shall re- ceive pro-rated vacation pay on the basis of 1/12 of the amount he would be eligible to receive at his next anniversary date for each month or major . thereof during which he was employed from his last anniversary date to the date of termination. Section 4. Time Off Time off for any reason for more than thirty (30) consecutive days, other than time taking paid vaca- tion, shall not be accumulative for vacation pur- poses. Section 5. Scheduling Vacations Vacations shall be taken at such times as may be designated by the Employer, with due regard to the desires of the employees. Employees shall be given first choice, by seniority, in selecting the time of their vacations. In the interest of maintaining the normal flow of the Employer's operations, the Em- ployer may require an employee entitled to four (4) o r more weeks, vacation to split his vacation, pro- vided that the separate vacation periods shall not be more than two (2) during any earned vacation time, and that no separate vacation period shall be less than one (1) week unless otherwise mutually agreed to between the Employer and the employee. Agree- 1 ~ l b u ~ u e r ~ u e 11 1, Al Braden ASSOCI- ~ i d ~ e Al Braden gave infra, 1, (1976-1979), ATION agreemen; Lockmiller 1275 NAVAJO FREIGHT LINES. INC. Section 6. Better Conditions Areas which receive vacation benefits under the previous agreement in excess of those provided for in Sections and 3 of this Article shall continue to receive them. The Union, as indicated supra, has represented the me- chanics employed by Navajo at its terminal since at least 1950. It was not until approximately 1962 that the Union and Navajo agreed to be bound by the terms of the Western States Agreement, when that Agreement first came into existence. Prior to 1962, the Union and Navajo were apparently signatory to succes- sive collective-bargaining agreements covering Navajo's Albuquerque terminal mechanics. In addition, as the par- ties stipulated, "since about 1951, Navajo and [the Union] negotiated Area Practices Agreements, which Agreements embodied local area practices, including working conditions applicable to employees of Navajo [employed at the Albuquerque terminal] represented by the Union." The most recent Area Practices Agreement entered into between the Union and Navajo for the Al- buquerque terminal was entered into on or about July l, 1973, and was entitled: AREA PRACTICES AGREEMENT BETWEEN LOCAL LODGE 1635 AND NAVAJO IN ACCORDANCE WITH ARTICLE 6, SEC- TION 4 O F THE MASTER AGREEMENT The sections of the 1973-1976 Area Practices Agreement which set out its duration and provide for the parties' signatures are as follows: ARTICLE XVI, TERM OF AGREEMENT This Agreement shall be in effect from July 1973, and remain in effect until March 31, 1976, and thereafter shall be considered as renewed from year to year, unless either party hereto shall give written notice to the other party hereto on or before the first day of February of any year commencing with the year 1976 of his desire to have this Agreement modified or terminated. IN WITNESS WHEREOF, this Agreement has been executed by the parties and ratified and ac- cepted by the members of the WESTERN EMPIRE OPERATORS ASSOCIATION AND LOCAL LODGE 1635, INTERNATIONAL AS- SOCIATION O F MACHINISTS AND AERO- SPACE WORKERS, AFL-CIO, as of the date first herein written. LOCAL LODGE 1635 INTERNATIONAL AS- SOCIATION O F MACHINISTS AND AERO- SPACE WORKERS, AFL-CIO By: GLR WESTERN EMPIRE OPERATORS BY: Z. FOR: NAVAJO FREIGHT LINES. INC. As described supra, the 1973-76 Area Practices ment was signed 'for the Union by IAM Grand Representative and on behalf of Navajo by Z. Lockmiller, whom the record reveals was Navajo's vice president. The other provision of the 1973-76 Area Prac- tices Agreement pertinent to this case deals with employ- ees' vacations and reads as follows: VACATION The number of paid hours in the vacation week for each week of vacation shall be forty-eight (48) hours times the employee's straight time basic hourly rate. The Employer's past practice in scheduling vaca- tion shall apply. Where split vacation periods have been established, employees shall have their senior- ity rights limited to one vacation choice or until all eligible employees have exercised their first choice of available vacation periods. The record establishes that the aforesaid vacation provision which states that "the number of paid hours in the vacation week for each week of vaca- tion shall be 48 hours times the employee's straight time basic hourly rate" had been included since 1951 in successive Area Practices Agreements be- tween Respondent Navajo and the Union. It is undisputed that neither the Union nor Respondent Navajo notice to terminate or modify the 1973-76 Area Practices Agreement during 1976 or 1977. Re- spondent Navajo abided by the terms of this agreement until, as described 1978. On January 23, 1978, Na- vajo's director of personnel, Michael Wall, wrote the Union, as follows: In compliance with the provisions of Article 16, . . . of the Area Practices Agreement between your Local Lodge and Navajo Freight Lines, this will serve as the Company's notice to terminate the Agreement effective February 1, 1978. The Company proposes to govern its actions in compliance with the terms and conditions of the , Western States Trucking Maintenance Agreement (April 1976 to March 31, 1979). On January 31, 1978, Union Business Representative Louis Gutierrez wrote Wall acknowledging receipt of his January 23 letter and, in response, stated: Article 6, Section 4, of the Western States Trucking Maintenance Agreement provides that area practices shall be reduced to writing and shall then become a part of the current agreement. Therefore Lodge 1635 proposes that the current area practices agreement shall continue for the term of the current Western States Trucking Mainte- nance Agreement and thereafter until by mutual between the Company and the Union this Area Practices Agreement be modified or ter- minated. (1 40-hour 8(a)(5) (1) grievance. hearing,pn that the 1978? 1978." c 15, ABF's Pay. 1276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On March 6, 1978, Wall wrote Gutierrez acknowledging his January 31 letter and rejected the Union's interpreta- tion of the applicability of article 6, section 4 insofar as it related to the 1973-76 Area Practices Agreement. Wall took the following position: In that the Company has complied with the terms of the Agreement and by certified letter dated January 23, 1978, has notified the Lodge of its desire to terminate the Agreement, the Company considers the Area Practice Agreement terminated, and shall govern its actions by the provisions of the Western States Trucking Maintenance Agreement 976-1979). In reply, Gutierrez, by letter dated March 13, 1978, wrote Wall that "the Union's position on Article 6 of the Area Practices Agreement is that when either party de- sires to modify o r terminate this Agreement, the parties must negotiate an acceptable settlement. Therefore the Union is willing to meet at your earliest [convenience] to commence negotiations on the above subject." There was no answer to this letter. The record establishes that the only term or condition of employment included in the 1973-76 Area Practices Agreement which Navajo changed was the one dealing with the computation of employees' vacation pay. Rather than compute employees' vacation pay on the basis of a 48-hour workweek it commenced on April 1, 1978, to use a week2 which was in accord with the appli- cable vacation provision of the 11 Western States Agree- ment. On May 2, 1978, the Union filed its unfair labor prac- tice charge in this case against Respondent Navajo alleg- ing that Navajo violated Section and of the Act by refusing to bargain with the Union "with regard to a renewal of the Area Practices Agreement covering those employees in the appropriate unit." Likewise the Union on June 19, 1978, filed a grievance against Navajo pursuant to the grievance-arbitration provisions of the 11 Western States Agreement. The grievance alleged that the "cancellation of area practices agreement, without negotiations for renewal o r extension of such agreement" was impermissible. Navajo rejected the grievance. On April 20, 1979, a hearing was conducted before an arbi- trator concerning the Prior to the o r about December 31, 1978, Respondent A B F took over the operations of the Albuquerque terminal from Navajo as a successor employer. Respondents Navajo and A B F were represented by counsel at the April 20, 1979, arbi- tration. At the outset of the arbitration hearing, the Union's lawyer took the position that the unfair labor practice and successorship issues were a part of the arbi- tration. Respondents' lawyers refused to submit those issues to the arbitrator and refused to submit the question of whether those issues were arbitrable. The arbitrator ruled that absent a stipulation by counsel o r a delegation to him to frame the issues that he was without jurisdic- tion to decide any issues other than the following: The record establishes that four employees received vacation pay from January 23 through March 28, 1978, and all four were paid on basis of a 48-hour workweek. 1. Was the Area Practices Agreement valid and binding upon Navajo under the provisions of the Western States Trucking Maintenance Agreement? 2. If so, was the Area Practices Agreement prop- erly terminated by Navajo in January 3. If the Area Practices Agreement was valid and binding and if it was not properly terminated, what is the appropriate remedy? On December 17, 1979, the arbitrator issued his "Opin- ion And Award" in this matter denying the Union's grievance. H e specifically noted that his opinion and award was without prejudice to the parties proceeding in any other forum concerning those issues which he had not decided. The arbitrator held that "the Area Practices Agreement was valid and binding under the provisions of the Western States Trucking Maintenance Agree- ment," but "was properly terminated by Navajo in Janu- ary, On December 31, 1978 Respondent ABF acquired all of Navajo's assets, including its Albuquerque terminal and equipment, through a merger with United Transpor- tation Investment Company. ABF retained all of the em- ployees Navajo had employed at the Albuquerque termi- nal and assumed control and management of Navajo's business operations without interruption or hiatus. Since that date ABF has been engaged in the same business op- erations as Navajo, at the same location, providing the same services to substantially the same customers, and has in its employ, as a majority of its employees, the em- ployees who had previously worked for Navajo. When ABF on December 31, 1978, assumed control over the management of the Albuquerque terminal it ac- knowledged that it was Navajo's successor and agreed to recognize the Union as the bargaining representative of the terminal's mechanics and also agreed to abide by the terms and conditions of employment set forth in the 1976-79 11 Western States Agreement, which was effec- tive by its terms from April 1, 1976, to and including March 31, 1979, and from year to year thereafter unless one of the parties serves on the other, a written notice of a desire to modify or terminate the Agreement at least 60 days prior to the date of expiration. The negotiations between the IAM affiliated unions who were signatory to the 11 Western States Agreement and the several Employer Associations signatory to the Agreement to replace it with a new agreement com- menced sometime in January 1979. On January 1979, the Union, by letter, notified Respondent A B F of its desire to modify and amend the 11 Western States Agreement. In reply, ABF by letter dated January 25, 1979, notified the Union that the Western Empire Opera- tors Association would represent it in the upcoming con- tract negotiations. On February 6, 1979, Respondent ABF posted a notice at the Albuquerque terminal addressed to "all members of local 492 and local 1635 [the Union]." The notice reads as follows: The purpose of this bulletin is to advise each of you of policy regarding vacations and vacation INC. 1. vaca- tion, practice agree- 1 1 agreemenLV3 Gutierrez 1 1 of 8ave the refile after drcision. refiled. union. Karsten, Karsten [ABF] 1277 NAVAJO FREIGHT LINES. Only employees with 4 or more weeks of tion due can split their vacation. 2. Vacations can be split only one time. 3. Employees who elect to split their vacations will be paid for all weeks due when they take the first segment. 4. Employees must bid both segments. Bids will be posted, and those employees who elect to split their vacations will bid the first segment. After the initial bidding is completed, another bid will be posted for those employees who split their vacations to bid their second segment. 5. All vacation moneys will be paid on the payday in the week immediately prior to the week in which the vacation starts. 6. All the above 5 items apply unless there is specif- ic contract language to the contrary. This notice changed the manner in which the scheduling of employees' vacations and the payment of employees' vacation pay was handled at the terminal in two re- spects. First, since at least 1955 there had been no re- striction on employees' splitting vacations. If an employ- ee was eligible for 4 or 5 weeks of vacation the employ- ee could split it into 2, 3, 4, or 5 segments. Second, since at least 1955 the employees, upon request, were paid their vacation moneys on the date their vacation had ac- crued, which was their anniversary date. If an employee, for example, were hired on October 30 the employee could collect his vacation pay on that date or any date thereafter even though the employee's vacation was not scheduled until the summer. It is undisputed that the Union was not afforded an opportunity to bargain about the aforesaid changes in the employees' terms and condi- tions of employment before they were placed into effect. On February 7, 1979, two of the employees represent- ed by the Union filed a grievance under the Western States Agreement's grievance-arbitration provisions chal- lenging the Company's refusal to pay them their vacation pay on their anniversary date, as had been the practice for many years. By its letter to the Union dated Febru- ary 13, 1979, ABF, through its shop superintendent, re- jected the grievance stating: "Company position is there is no ABF past practice. ABF's practices and procedures prevail. Company's bulletin dated and posted February 6, 1979 outlines ABF's policy in regard to vacations and vacation pay and are not in violation of the current labor On February 13, 1979, Union Business Representative wrote Terminal Manager Fletcher, as follows: On June 29. 1979. the employees' grievance over the Company's re- fusal to pay them their vacation pay on their anniversary date was re- ferred back to the parties by the special board of adjustment established by the Western States Agreement to handle grievances. The special board of adjustment was the view that the issues involved were based on the Area Practices Agreement dispute which was presently pending before the arbitrator and Union the right to the grievance the arbitrator's The grievance was not Your change in Company policy regarding vaca- vacation scheduling and vacation pay has been received by this office. Please be advised that it is the position of the Union, that the long standing regarding va- cations, vacation scheduling and vacation pay cannot be changed without discussion and ment from the Please advise this office of a convenient time and place to discuss this problem. ABF did not respond to this letter. On February 19, 1979, Respondent ABF's vice presi- dent of industrial relations, W. G. wrote Norman Pixler, the general manager of the Western Empire Operators Association, as follows: Enclosed is our power of attorney for the West- ern Empire Operators Association to represent [ABF] in the forthcoming negotiations with the IAM covering the affected employees at our Albu- querque, New Mexico terminal. This power of attorney is limited to the basic contract only and is being granted contingent upon the elimination of the Area Practices Agreement which existed between IAM and the former Navajo Freight Lines. By a telegram to Pixler dated March 30, 1979, clarified the aforesaid "power of attorney," as follows: This telegram will supersede my letter dated Febru- ary 19, 1979 to which I attached power of attorney for Western Empire Operators Association to repre- sent in the negotiations with the IAM cover- ing employees at our Albuquerque New Mexico ter- minal. The power of attorney which was attached to my letter dated February 19, 1979 is your author- ity to negotiate for and on behalf of ABF in the ne- gotiations with IAM. The intent of the second para- graph of my letter dated February 19, 1979 was to limit your authority to contract negotiations for the 11 Western States Agreement since the Area Prac- tice dispute we have with [the Union] is pending ar- bitration and will be resolved through that proce- dure. In the meantime on March 5, 1979, ABF's lawyer, Robert Tinnin, Jr., wrote the Union's lawyer, John Hollis, concerning ABF's position with respect to the Union's Area Practices Agreement with Navajo and the terms and conditions of employment included in that Agreement. The letter reads as follows: For numerous reasons, some of which I have dis- cussed with you, including the fact that we believe that Navajo's position with regard to the pending grievance is meritorious, it is Arkansas-Best's posi- tion that it is not bound by the terms of the Area Practices Agreement. Also, it is Arkansas-Best's po- sition that it has no obligation to bargain concerning the terms and conditions set forth in said agreement or to comply with them insofar as they vary from IL7U DEClSlONS Arkan- oflicials I 1 affiliates, Denton oflicially F.'s Gutier- 11 OF NATIONAL LABOR RELATIONS BOARD the terms of the Western States Trucking Mainte- nance Agreement. Nonetheless, in the interest of maintaining har- mony but without admitting it is legally bound to do so, Arkansas-Best is willing to meet and confer with Local Lodge 1635 concerning the terms and conditions set forth in the Area Practices Agree- ment and to reduce to writing any agreement reached. In the absence of any agreement, sas-Best hereby notifies the Union that it will take such action as it deems appropriate concerning the terms and conditions set forth in the Area Practices Agreement, so long as its action does not violate the terms of the Western States Trucking Mainte- nance, to which Arkansas-Best is bound by its vol- untary content. If the Union wishes to meet concerning the terms and conditions of employment set forth in the Area Practices Agreement, please notify me at your earli- est convenience. In reply, Union Representative Gutierrez, by letter of March 13, 1979, informed Tinnin that the Union was willing to meet to discuss the Area Practices Agreement and suggested the week of March 19 for such a meeting. On March 21, 1979, Tinnin in response to Gutierrez' March 21 letter wrote Gutierrez, as follows: Thank you for your letter of March 13, 1979. Al- though Arkansas-Best remains willing to discuss any issues concerning so-called "area practices" and to reduce to writing any agreements reached, after fur- ther reflection following my letter of March 5, 1979, we have concluded that the proper forum for such discussions would be the current negotiations in progress between employer association group and the IAM for a collective bargaining agreement to succeed the Western States Trucking Maintenance Agreement which expires on March 31, 1979. Both Arkansas-Best and Local Lodge 1635 have designated parties to the ongoing negotiations for a new Western States Trucking Maintenance Agree- ment as their representative for purposes of collec- tive bargaining. By confining issues concerning area practices to the negotiations for the new Western States Trucking Maintenance Agreement, both Ar- kansas-Best and Local Lodge 1635 can avoid the possibility that any agreement reached between them individually would be null and void under the provisions of Article 6, Section 2 of the current Western States Trucking Maintenance Agreement. Indeed, we submit that any such agreement which might be concluded between Arkansas-Best and Local Lodge 1635 would be null and void under the provisions of Article 6, Section 2. We suggest that any proposals or demands which Local Lodge 1635 may have concerning so called "area practices" should be transmitted by the Local Lodge to the Grand Lodge so that the matters might be raised by the Grand Lodge on behalf of the Local Lodge in the course of negotiations for a new Western States Trucking Maintenance Agree- ment. During March 1979, of the Union advised the persons who were negotiating the Western States Agreement on behalf of the IAM and its in- cluding the Union, that one of the Union's demands was that ABF execute the Area Practices Agreement which had existed between the Union and Navajo. This demand was relayed to the ABF's negotiator, Pixler, who, as union steward credibly testified, took the posi- tion that "he was not empowered to negotiate on the Local Area Practice Agreement." On April 22, 1979, Union Representative Gutierrez wrote Jim Fletcher, the terminal manager of the Albu- querque terminal, as follows: Re: Contract Negotiations This letter is to notify you, the Interna- tional Association of Machinists and Aerospace Workers, AFL-CIO, Lodge 1635 is on strike against Arkansas-Best Freight System, Inc., Albu- querque, New Mexico. A. B. F. had previously agreed to negotiate the Area Practice Agreement locally, letter of March 5, 1979, and later informed the Union it should be part of negotiations for the new Western States Truck- ing Agreement; letter of March 21, 1979. During these negotiations, A. B. spokesman, Mr. N. Pixler, informed the Union's Negotiating Committee limiting his power-of-attorney to the basic Contract only, letter dated 2/19/79. Therefore, it's the Union's position, this subject in- cluding the past practice in regards to vacation pay and vacation scheduling will be an issue during this economic dispute. On April 6, 1979, H. L. Johnson, ABF's director of in- dustrial relations, wrote Gutierrez in response to rez' April 2 letter to Terminal Manager Fletcher, as fol- . lows: This has reference to your letter dated April 2, 1979, addressed to Mr. Jim Fletcher, our branch manager in Albuquerque, New Mexico. Arkansas-Best Freight System, as successor to Navajo Freight Lines, Inc., has previously agreed and stands ready to submit the question of termina- tion of the Area Practices Agreement by Navajo Freight Lines to binding arbitration. Arkansas-Best Freight System is, and always has been, willing to negotiate the vacation pay and scheduling of vacations as part of the Eleven West- ern States Agreement. It is your local union that has refused to negotiate. On April 13, 1979, in connection with the negotiations for a successor agreement to replace the Western States Agreement which had terminated March 31, 1979, the parties to the negotiations reached a "settlement agreement" on the terms of a successor agreement effec- tive from March 31, 1979, to March 31, 1982. This "set- tlement agreement," which was subject to ratification by Pixler 1979-82 11 Conclusionary 1. 1 1973- 8(a)(5) 8(a)(I) 1978,4 1, 31, "[wlherever I(i) "1"). intent 11 ter- unpenuasive. NAVAJO FREIGHT LINES. INC. 1279 the membership of the various local unions which were a tion of the Act and interferes with employees' party to it, contained a provision which was only appli- Section 7 rights in violation of Section of the Act, cable to the Union. This provision reads as follows: unless excused by special circumstances. Lodge 1635 Albuquerque, New Mexico shall be given the option of accepting the proposed settle- ment, and let the pending arbitration case be deter- mined by the arbitrator, or they can reject the pro- posed settlement and enter into negotiations with [ABF]. will notify the Company of Lodge 1635's options. No evidence was presented about the discussion which surrounded the inclusion of this provision in the "settle- ment agreement." The Union's membership voted on April 13 to ratify the "settlement agreement," rather than enter into separate negotiations with ABF. The terms of the 1979-82 11 Western States Agreement which the Union voted to accept are, in pertinent part, identical to the ones in the preceding Agreement. On April 20, 1979, following the ratification of the Western States Agreement, a hearing was held before the arbitrator concerning the Union's Area Practices Agreement grievance against Navajo. And, as described in detail supra, Respondents Navajo and ABF, at the start of the hearing, refused to allow the arbitrator to consider whether Navajo's conduct in connection with the termination of the Area Practices Agreement and its refusal to negotiate a successor agreement consti- tuted unfair labor practices. Nor would Respondents allow the arbitrator to determine whether ABF was Na- vajo's successor. On May 10, 1979, the Union filed its unfair labor prac- tice charge in this case against ABF. B. Findings , The unfair labor practices attributed to Navajo (a) Respondent Navajo refuses to enter into negotiations with the Union for an Area Practices Agreement Respondent Navajo and the Union were signatories to successive Area Practices Agreements for a quarter of a century which covered Navajo's mechanics employed at the Albuquerque, New Mexico, terminal. The last Agree- ment was executed July 1, 1973, and was effective from July 1, 1973, until March 31, 1976, and thereafter from year to year unless either party gave written notice to the other on or before February of any year commenc- ing with 1976 of his desire to terminate or modify the Agreement. No such notice was given until January 23, 1978, when Navajo gave the Union written notice of its intent to terminate the Agreement. Thereafter on March 13, 1978, the Union wrote Navajo and asked that it nego- tiate an Area Practices Agreement to replace the 76 Agreement. Navajo did not reply to this letter. Based on the foregoing, I find that Respondent Navajo since on or about March 13, 1978, has refused to enter into collective-bargaining negotiations with the Union for an Area Practices Agreement to replace the 1973-76 Agreement. I further find that this type of conduct con- stitutes a refusal to bargain within the meaning of Sec- Respondents apparently take the position that Re- spondent Navajo was not obligated to bargain with the Union in 1978 about an Area Practices Agreement to re- place the one which was scheduled to expire on March 31, because by agreeing that the employees' terms and conditions of employment were to be governed by the 11 Western States Agreement, effective from April 1976, through March 1979, the Union waived its stat- utory right to demand bargaining about the renewal of the Area Practices Agreement. Article 6, section 4 of the 1976-79 11 Western States Agreement states in pertinent part that exist- ing area practices exceed or are different from the provi- sions of this Agreement they shall be reduced to writing and signed by the Employer Association and the Local or District Lodge involved." The 1973-76 Area Prac- tices Agreement states that it was negotiated by Navajo and the Union "in accordance with Article 6, Section 4 of the Master Agreement [referring to the 1 1 Western States Agreement]." The parties to this proceeding stipu- lated that the terms and conditions of employment con- tained in the 1973-76 Area Practices Agreement consti- tute "local area practices, including working conditions, applicable to employees of Navajo represented by the Union" (G.C. Exh. at par. And it is undisputed that Respondent Navajo at all times material abided by the 1973-76 Area Practices Agreement and its predeces- sor agreements. These circumstances overwhelmingly demonstrate that when Navajo and the Union signed the 1973-76 Area Practices Agreement and the predecessor agreements that it was the intention of Navajo, as well as the Union, that the terms and conditions of employment of the mechanics at the Albuquerque terminal were to be established by the Area Practices Agreement, as well as by the 11 Western States Agreement, and where there . was a difference between agreements the Area Practices Agreement would govern. Moreover, it is plain that this was sanctioned by article 6, section 4 of the 11 Western States Agreement. I recognize that article 6, section 4 provides that an Area Practices Agreement shall be signed "by the Employer Association," whereas the Area Practices Agreements between Navajo and the Union were signed by Navajo's vice president. However, no employer association was authorized to represent Navajo for collective-bargaining purposes with regard to the Albuquerque terminal, nor was Navajo even a signa- tory to the Western States Agreement. Rather Navajo as a matter of custom agreed that the terms and condi- tions of the mechanics employed at its Albuquerque In view of Respondent Navajo's timely notice of termination the 1973-76 Area Practices Agreement was scheduled to terminate March 31. 1978, by virtue of its termination provision. I reject the Union's con- tention that despite the plain language of the termination provision in- cluded in the 1973-76 Area Practices Agreement that Navajo, upon the Union's request and without negotiations, was obligated to reduce to a signed written Area Practices Agreement the area practices which were included in the 1973-76 Agreement. I have carefully considered the rea- sons advanced by the Union on behalf of this contention and find them 280 minal 1 1 48- 1, 8(a)(5) 8(d) Williams- W. F.2d Inc., etc., F.2d F.2d 40- on 11 Abuquer- tide 11 I1 p r o ~ i d e d . ~ 1, ' 8(a)(5) Act.6 5 Sec. Spiel&@ 112 (1955), I 1 I inc., discharge I DECISIONS OF NATIONAL LABOR RELATIONS BOARD would be governed by the 11 Western States Agreement. Under these circumstances the fact that an Employer Association which was a signatory to the Western States Agreement did not sign the 1973-76 Area Practices Agreement does not invalidate this Agreement nor excuse Navajo's refusal to enter into negotiations for the renewal of this Agreement. (b) Respondent Navajo unilaterally reduces employees' vacation pay without affording the Union an opportunity to bargain During the period from, at least, July 1, 1973, until March 31, 1978, Respondent Navajo pursuant to the terms of the 1973-76 Area Practices Agreement comput- ed the vacation pay of the Albuquerque terminal's em- ployees represented by the Union on the basis of a hour workweek. On April 1978, with the expiration of the 1973-76 Area Practices Agreement Navajo without affording the Union an opportunity to bargain began fig- uring employees' vacation pay on the basis of a 40-hour workweek, thereby significantly decreasing employees' vacation pay. Sections and of the Act impose an affirma- tive duty on employers to bargain with the statutory rep- resentative of their employees over "wages, hours and other terms and conditions of employment." It is axiom- atic that an employer's bargaining obligation encom- passes the subject of vacation pay. The employer's statu- tory duty is breached when, absent bargaining impasse or union waiver, an employer alters existing job terms with- out notifying and bargaining with the Union concerning the change. N.L.R.B. v. Benne Katz, etc. d/b/a burg Steel Products Co., 369 U.S. 736, 743-748 (1962). It is also established that the employer's duty to bargain over changes in job terms is not relieved by the expira- tion of a contract. Harold Hinson d/b/a Hen House Market No. 3 v. N.L.R.B., 428 133, 137 (8th Cir. 1970); N. L. R. B. v. Sky Wolf Sales 470 827, 830 (9th Cir. 1972); N.L.R.B. v. Frontier Homes Corpora- tion, 371 974, 980 (8th Cir. 1967). T h e above principles, applied to the facts of the instant case, establish that .Respondent Navajo violated its statu- tory duty to bargain, for it is undisputed that upon the expiration of the 1973-76 Area Practices Agreement, without notice o r consultation with the Union, Navajo as described in detail supra, decreased the vacation pay of employees represented by the Union. Respondents contend that Respondent Navajo's unilat- eral conduct was permissible inasmuch as the Area Prac- tices Agreement was "void ab initio because is was en- tered into with the intent to defraud and circumvent the terms of [the 11 Western States Agreement]." Respond- ents also argue that even if the Area Practices Agree- ment was not void that Navajo's conduct was permissi- ble because it was consistent with the provision of the 11 Western States Agreement, which provides that employ- ee's vacation pay shall be computed on the basis of a hour workweek. In support of its argument that the 1973-76 Area Prac- tices Agreement was "void ab initio," Respondents rely the fact that the Agreement was not signed by an Employer Association which was a signatory to the 11 Western States Agreement even though article 6, section 4, of the Western States Agreement requires this. I reject this argument because the record establishes that none of the employer associations who were signatory to the 11 Western States Agreement were authorized to bargain on behalf of Respondent Navajo for its que terminal, that Navajo was not even a signatory to the 11 Western States Agreement but only accepted the terms of the agreement as a matter of custom o r practice, that for a quarter of a century Navajo led the Union to believe that the Area Practices Agreements were bona collective-bargaining agreements and continued to d o this even after Navajo and the Union in 1962 agreed to abide by the terms of the Western States Agree- ment. It is for all of these reasons that I am of the opin- ion that Respondents' contention that the 1973-76 Area Practices Agreement was void ab initio is without merit. Likewise I reject Respondents' contention that Nava- jo's unilateral reduction of employees' vacation pay from 48 to 40 hours a week was not an impermissible unilater- al change in employees' working conditions because this was what article 20, section 2, of the Western States Agreement As I have found supra, the record establishes that when Navajo and the Union affixed their signatures to the 1973-76 Area Practices Agreement that it was the intent of Navajo, as well as the Union, that the terms and conditions of employment of Navajo's Albu- querque terminal's mechanics were to be governed by the Area Practices Agreement as well as the 11 Western States Agreement and that, if there were a difference be- tween the agreements that the Area Practices Agree- ment, the only agreement which the parties had signed, would govern. Based on the foregoing, I find that commencing on or about April 1978, Respondent Navajo unilaterally re- duced the vacation pay of employees represented by the Union without affording the Union an opportunity to bargain, and that by engaging in this conduct it violated Section and (1) of the 2, art. 20, of the I I Western States Agreement states in pertinent part, "vacation pay per week shall be forty (40) times the employee's reg- ular hourly rate." In defense of Respondent Navajo's unfair labor practices found in this Decision, Respondents argue that the Board should apply the princi- ples enunciated in Manufacturing Company. NLRB 1080 and defer to the arbitrator's December 17, 1979, opinion and award. As found supra, the arbitrator concluded that the 1973-76 Area Practices Agreement was valid and binding on Navajo under the provi- sions of the I I Western States Agreement, but was properly terminated by Navajo. Obviously, the arbitrator's opinion does not assist Navajo in this case insofar as the arbitrator held that the 1973-76 Area Practices Agreement was a valid collective-bargaining agreement under the provi- sions of the Western States Agreement. In any event, do not believe deferral to the arbitrator's opinion and award is appropriate in the instant case because the arbitrator was not presented with and did not consider the unfair labor practice issues involved herein. As a matter of fact the arbitrator specifically refused to permit the Union to litigate any unfair labor practice issues and stated that he was not ruling upon any unfair labor practice issues and that his opinion and award was without preju- dice to the parties proceeding in any other forum to litigate the unfair labor practice issues. Under these circumstances I do not believe deferral would be appropriate. Suburban Motor Freight, 247 NLRB No. 2 (1980). 1 reject Respondents' contention that the principles enunciated in Suburban Motor Freight are limited to the arbitrator's awards dealing with and discipline cases. Needham F.2d (1st Inc., al. busirress Inc., 172- 1 (1 Perma Dude F.2d Westwood 1 Winco Cooper ' 1 labor business bu~iness .~ In~erna~ional ( / a Typographhie Inc. Inc.. 1040, (1978), 1281 NAVAJO FREIGHT LINES. INC. 2. Respondent ABF's responsibility as a successor employer to remedy Respondent Navajo's unfair labor practices In general, a "successor" is one who takes over the business of another without substantial change in the es- sential nature of the enterprise. See N.L.R.B. v. Boston Industrial Cleaning Co., 526 74, 77 Cir. 1976). Depending on the circumstances a successor may acquire, along with the business, some of the legal obligations of the predecessor employer. If the predeces- sor employer was under a requirement to bargain with a union representing its employees, based either on a certi- fication of the Board or voluntary recognition, the suc- cessor employer will also be required to bargain with the union where a majority of the employees hired by it were employees of the predecessor. N.L.R.B. v. Burns International Security Services et , 406 U.S. 272, 281 (1972). Successor employers, it is now well estab- lished, may also be required to remedy the unfair labor practices committed by the predecessor, where the suc- cessor obtains the with knowledge of the unfair labor practice litigation against the predecessor. Golden State Bottling Company d /b /a Pepsi Cola Bottling Company of Sacramento v. N.L.R.B., 414 U.S. 168, 174, 18 -185 973); Vinyl Corporation Plas- tics Co. and United States Pipe and Foundry Company, 164 NLRB 968, 969 enfd. sub nom. United States Pipe and Foundry Co. v. N.L.R.B., 398 544 (5th Cir. 1968). Among the unfair labor practices which a successor may be called on to remedy is a predecessor employer's un- lawful refusal to bargain with a union. Import Company, 25 NLRB 121 3 (1980); Petroleum Com- pany and Oil Company, Inc., Successor Employer, 252 NLRB 1049 (1980). The undisputed facts, which have been set out in detail supra, establish, and Respondent ABF admits, that ABF is a successor employer to Respondent Navajo with regard to the operation of the Albuquerque terminal in- sofar as ABF is obligated to recognize and bargain with the Union as the bargaining representative of the me- chanics employed at the terminal. The question present- ed for decision in connection with the issue of ABF's lia- bility for the unfair labor practices found to have been committed by Respondent Navajo is whether ABF was aware of the unfair labor practice litigation against Navajo when ABF took over the operation of the Albu- querque terminal. The Union in its brief for the first time argues that the transaction whereby A B F assumed control over the business of Navajo was a stock transfer, rather than a successor relationship, therefore eliminating the issue of whether A B F was aware of Navajo's unfair labor practice litiga- tion. do not believe that this theory is properly before me inasmuch as the complaint, the answer, and the arguments of counsel during the hear- ing framed the issue of ABF's obligation to remedy Navajo's alleged unfair practices in terms of whether ABF was a successor employer who took over Navajo's with knowledge of Navajo's unfair labor practice litigation. Nor was ABF accorded an opportunity to fully and fairly litigate this theory. In this last regard I note that when the "Agreement of Sale and Purchase of Stock." which Agreement the Union relies on to establish its stock transfer theory, was admitted into evidence it was admitted solely for the purpose to allow me to consider the various indemnification clauses contained therein. In any event, re- gardless of whether the Union's stock transfer theory was encompassed by the pleadings or was litigated, the record, such as i t is, indicates that Respondent ABF, in support of its position that when it took over Navajo's business on December 31, 1978, it was not aware of Navajo's unfair labor practice litiga- tion, called as its witness, Howard Johnson, its director of industrial relations for the western part of the United States. Johnson testified that neither he nor any other ABF official had knowledge prior to ABF's taking over Navajo's business about the Union's unfair labor practice charge filed against Navajo. Johnson further testified that his sole contact with an official of Navajo took place late in December 1978 when he spoke briefly to Navajo's personnel director in order to make his ac- quaintance but that no business, including the subject of unfair labor practice charges, was discussed. Based on the testimony of Johnson, who impressed me as an honest witness, I find that ABF has made a prima facie showing that it was without knowledge of the unfair labor practice charge filed by the Union against Navajo at the time it took over Navajo's And for the reasons set forth below I am of the opinion that the Gen- eral Counsel has failed to rebut this prima facie showing. The General Counsel concedes that there is no direct evidence which establishes that ABF was aware of the unfair labor practice litigation involving Navajo when it took over Navajo's business, but argues that the circum- stances under which ABF took over Navajo's operations were such as to charge it with notice of this litigation. In support of this argument, the General Counsel notes that Navajo's shop superintendent, who knew that Navajo had been charged with the commission of unfair labor practices by the Union, continued to work in the same capacity after ABF took over the business; that the "Agreement of Sale and Purchase of Stock," herein called the sales agreement, which resulted in ABF taking over the business, required Navajo to indemnify ABF for obligations incurred as a result of litigation or administra- tive proceedings; and since ABF did not take over the business until December 31, 1978, even though the sales agreement was executed sometime in April 1978 it is in- conceivable that prior to December 31, 1978, ABF did not learn of the May 2, 1978, unfair labor practice charge filed by the Union against Navajo. The aforesaid facts whether taken separately or to- gether fail to persuade me that Respondent ABF had knowledge of Navajo's unfair labor practice litigation when it took over Navajo's business. The fact that Nava- jo's shop superintendent for the Albuquerque terminal, who had knowledge of the unfair labor practice litiga- tion, continued to work for ABF after it assumed control of the employing enterprise has no probative value in es- tablishing that ABF knew of the unfair labor practice the stock ownership of Navajo did not merely pass into new hands but that Navajo ceased to exist as an entity and that Navajo and ABF ceased to have any relations, one to the other. Under these circumstances, it ap- pears that the transaction herein involved a successor relationship. See, generally, TKB Corporation Hendricks-Miller Company, 240 NLRB 1082. fn. 4 (1979). In Am-Del-Co. and Compton Service Company, jointly and Mer- chants Home Delivery Services as a Successor, 234 NLRB the Board held: "the responsibility of establishing that a new em- ployer was without knowledge of its predecessor's unfair labor practices at the time i t took over the latter's operation rests with the alleged suc- cessor." 1041