Trojan Yacht

National Labor Relations Board - Board Decisions

Nov 24, 1995

319 N.L.R.B. 741 (N.L.R.B. 1995)

741
319 NLRB No. 97
TROJAN YACHT
1 The Respondent refers to the waiver provision in its exceptions
and brief as a zipper clause.
2 No final amendment was later adopted because the Respondent
filed a voluntary petition in bankruptcy on March 26, 1992.
3 For the reasons he stated, we adopt the judge’s finding that the
complaint is not barred by Sec. 10(b) of the Act. The judge found
Continued
Trojan Yacht, Division of Bertram-Trojan, Inc. and
Industrial Union of Marine and Shipbuilding
Workers of America, District Lodge 4, Local
Lodge 86 and Industrial Union of Marine and
Shipbuilding Workers of America, District
Lodge 4, Local Lodge 88. Cases 4–CA–19851–
1 and 4–CA–19851–2
November 24, 1995
DECISION AND ORDER
BY MEMBERS BROWNING, COHEN, AND
TRUESDALE
On January 13, 1993, Administrative Law Judge
James L. Rose issued the attached decision. The Gen-
eral Counsel and the Charging Party filed exceptions
and supporting briefs, the Respondent filed cross-ex-
ceptions and a supporting brief, and the General Coun-
sel and the Charging Party filed answering briefs.
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 terms of the Respondent’s
pension plan authorized the Respondent to make uni-
lateral modifications to the plan and that the Respond-
ent did not thereby violate Section 8(a)(5) and (1) of
the Act. Accordingly, the judge recommended dismis-
sal of the complaint, and our dissenting colleague
would affirm that recommendation. We disagree.
Shipbuilders Locals 88 and 86 represent employees
at the Respondent’s Lancaster, Pennsylvania and
Elkton, Maryland plants, respectively. In 1971, the
Locals formed a single bargaining unit. At that time,
the Respondent’s predecessor, Whittaker Corporation,
provided employees with a pension plan. The parties’
most recent collective-bargaining agreement, effective
June 7, 1989, to June 6, 1992, provides in article X,
section 2, that the Bertram-Trojan, Inc. Employees’
Pension and Savings Plan (the Plan), which covers
both unit and nonunit employees:
will be maintained in the same manner and to the
same extent such plans are generally made avail-
able and administered on a corporate basis.
Section 14.01 of the Plan states that
[w]hile the Plan is intended as a permanent pro-
gram, the Board of Directors shall have the right
at any time to declare the Plan terminated, or to
provide for a partial termination of the Plan.
Section 13.02 authorizes prospective or retroactive
amendments to the Plan to make it
conform to any provisions of ERISA, the Internal
Revenue Code provisions dealing with employees’
trusts, or any regulation under either of such stat-
utes.
The ‘‘Management Rights’’ provision of the contract
states that the Respondent ‘‘reserves and retains all of
its rights to manage the business,’’ and the ‘‘Waiver’’
provision reads as follows:1
The parties acknowledge that during the negotia-
tions which resulted in this Agreement, each had
the unlimited right and opportunity to make de-
mands and proposals with respect to any and all
proper subjects of collective bargaining, and that
all such subjects have been discussed and nego-
tiated upon, and the agreements contained in this
Agreement were arrived at after the free exercise
of such rights and opportunities. Therefore, the
Company and the Union, for the term of this
Agreement voluntarily and without qualification,
waive the right and agree that neither party shall
be obligated to bargain collectively with respect
to any term or condition of employment, or any
other matter not related specifically to the admin-
istration of the express terms of this Agreement,
even though such other matter might not have ac-
tually been raised during the negotiation thereof,
it being the stated intention of the parties to have
their entire collective bargaining relationship for
the duration of this Agreement set forth in its pro-
visions.
In order to protect the Plan’s tax-exempt status
under the 1986 amendments to the Internal Revenue
Code, it was necessary, as a stop-gap measure, for the
Respondent to adopt before March 31, 1989, one of
four model amendments proposed by the Internal Rev-
enue Service (IRS), and later to make a substantive
amendment to the Plan. Some time after March 31,
1989, probably mid to late 1990, the Respondent
adopted IRS Model Amendment 3, which provided for
a cessation of benefit accruals.2 During negotiation of
the 1989–1992 bargaining agreement, the Respondent
made no reference to its need to amend the Plan.
Thereafter, the Respondent sent each participant in the
Plan and the officers of the Unions a letter dated De-
cember 20, 1990, announcing that the Plan had been
amended to freeze benefit accruals effective January 1,
1989. The Unions received the letters on or after De-
cember 22, 1990, and filed the instant charges on June
12, 1991. The charges were served June 21, 1991.3
742 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that letters that the Respondent sent to retirees outside the 10(b) pe-
riod did not constitute notice to the Unions that the Plan had been
amended. Those letters made no reference to an amendment to the
Plan, and, contrary to the Respondent’s claim, the record does not
support a finding that the retirees discussed an amendment with
union officials after they had received the letters.
4 Angelus Block Co., 250 NLRB 868, 877 (1980).
5 Mary Thompson Hospital, 296 NLRB 1245 (1989), to which the
judge compared the terms of the pension plan in the instant case,
is distinguishable. There, a provision of the collective-bargaining
agreement specifically incorporated the entire benefit plan into the
body of the agreement. There is no similar language of incorporation
in the collective-bargaining agreement in this case. Thus, the plan
language relied on by the Respondent regarding full or partial termi-
1. The judge rejected the Respondent’s contentions
that the amendment was compelled by law and that the
management-rights and zipper clauses of the parties’
contract retained for the Respondent the right to amend
the Plan. We adopt these findings and find that the
cases cited by the Respondent are distinguishable. In
Rockford Manor Care Facility, 279 NLRB 1170
(1986), for example, the zipper clause invoked to jus-
tify midterm adjustments in a contractually provided
health care program specifically addressed the issue of
midterm bargaining, stating that ‘‘employees covered
by this Agreement are entitled only to those . . .
wages, hours, or working conditions which are specifi-
cally covered by this Agreement. . . . [and those] not
covered by this Agreement may be changed, altered,
continued, or discontinued without consultation with
the Union.’’ The zipper clause also stated that ‘‘[e]ach
[party] voluntarily and unqualifiedly waives the right
to bargain collectively with respect to any subject or
matter not specifically referred to in this Agreement.’’
279 NLRB at 1173. In Columbus Electric Co., 270
NLRB 686 (1984), enfd. sub nom. Electrical Workers
IBEW Local 1466 v. NLRB, 795 F.2d 150 (D.C. Cir.
1986), the Board, with court approval, dismissed alle-
gations that an employer violated Section 8(a)(5) and
(1) by discontinuing a Christmas bonus never referred
to in the parties’ contracts. The contract contained
comprehensive provisions on other types of compensa-
tion, provided that the contract would govern the par-
ties’ ‘‘entire relationship,’’ and stated that the contract
would be the ‘‘sole source of any and all rights or
claims which may be asserted in arbitration hereunder
or otherwise.’’ 270 NLRB at 687. Similarly, in TCI of
New York, 301 NLRB 822 (1991), the employer unilat-
erally instituted a bonus program during the term of a
contract that contained a ‘‘Scope of Bargaining’’
clause—recently opposed in bargaining but ultimately
accepted by the union—that expressly provided that
the agreement’s terms would supersede ‘‘all prior
agreements, understandings and past practices, oral or
written, express or implied,’’ including, it was found,
the bonus program. This scope-of-bargaining clause
also stated that the agreement ‘‘fully and completely
incorporates all . . . understandings and agreements’’
between the parties. 301 NLRB at 823 (emphasis de-
leted).
In contrast to the above cases, the contract provi-
sions relied on by the Respondent here contain no
terms which are ‘‘incisive, direct, and specific in their
assault on the existence of any negotiating responsibil-
ity during the term of the contract, and in their desire
to commit unresolved issues to management preroga-
tives as they existed on entry of the agreement.’’ Rock-
ford Manor Care Facility, supra, 279 NLRB at 1174.
2. The judge found that the terms of the Plan au-
thorized the amendment. In response to the contention
of the General Counsel that the Unions had not waived
their right to bargain over the change, the judge stated
that the case was one of contract interpretation rather
than waiver. According to the judge, it is not necessary
that the Unions have clearly and unmistakably waived
their right to bargain over the amendment, as required
under the standard set forth in Metropolitan Edison
Co. v. NLRB, 460 U.S. 693, 708 (1983), because that
standard is more appropriately brought to bear to re-
solve issues concerning matters on which a collective-
bargaining agreement is silent. The General Counsel
and the Charging Party except. We find merit in their
exceptions.
Contrary to the judge, the Metropolitan Edison
standard is not limited to matters on which a collec-
tive-bargaining agreement is silent. In order to estab-
lish waiver of the statutory right to bargain over man-
datory subjects of bargaining, such as those raised
here, there must be clear and unmistakable relinquish-
ment of that right. Exxon Research & Engineering Co.,
317 NLRB 675 (1995). To meet the ‘‘clear and unmis-
takable’’ standard, the contract language must be spe-
cific, or it must be shown that the matter sought to be
waived was fully discussed and consciously explored
and that the waiving party thereupon consciously
yielded its interest in the matter.4
Applying the Metropolitan Edison standard, we find
that the language of article X, section 2, of the collec-
tive-bargaining agreement neither authorizes a ces-
sation in pension benefit accruals nor waives the
Unions’ interest in bargaining over these matters. In
fact, in Rockford Manor Care Facility, supra at 1172–
1173, the Board found that a like contract provision—
providing in that case for unit employee
‘‘participat[ion] in the Company’s health and life
insurance programs on the same basis as other [i.e.,
nonunit] employee members of the group’’—was am-
biguous. The Board found that the provision did not
manifest union assent to changes affecting unit em-
ployees whenever the employer changed the terms of
nonunit employees’ health and life insurance plans.
Likewise, assent by the Unions to the cessation of ben-
efit accruals cannot be inferred here.5 Accordingly, we
743TROJAN YACHT
nation of the Plan and making the Plan conform to the Internal Rev-
enue Code and ERISA is not in the collective-bargaining agreement,
whereas in Mary Thompson Hospital, the plan language was fully
incorporated into the collective-bargaining agreement. Moreover,
even assuming for the sake of argument that sec. 14.01 of the Plan
had been incorporated into the contract, we would not find that the
Plan’s authorization for the Respondent to ‘‘declare the Plan termi-
nated, or to provide for a partial termination of the Plan’’ sanctioned
the unilateral termination of benefit accruals under the Metropolitan
Edison standard.
Inasmuch as the Respondent points principally to the language in
the Plan, rather than in the collective-bargaining agreement, to jus-
tify its unilateral decision, it cannot fairly rely on cases such as NCR
Corp., 271 NLRB 1212 (1984), which involved an employer’s ‘‘sub-
stantial right of contractual privilege’’ in the face of competing,
equally plausible interpretations of a collective-bargaining agree-
ment’s provisions, to assert that this case is solely one of contract
interpretation, and thus inappropriate for resolution by the Board.
6 See Keystone Consolidated Industries, 309 NLRB 294, 297–298
(1992), remanded 41 F.3d 746 (D.C. Cir. 1994).
find no waiver of the Unions’ bargaining rights in this
respect. We conclude that, although the Respondent
may ultimately have had the right to conform the Plan
to the Internal Revenue Code to protect its tax exemp-
tions, it had no contractual right to choose unilaterally
among several alternatives to achieve that end, without
first providing the Unions with notice and an oppor-
tunity to bargain about this subject.
Accordingly, we do not agree with our colleague’s
reading of the above-quoted language from article X,
section 2, of the collective-bargaining agreement. More
precisely, we do not agree with him that the general
contractual language in question—i.e., that the pension
plan will be ‘‘maintained in the same manner and to
the same extent such plans are generally made avail-
able and administered on a corporate basis’’ (emphasis
added)—means (in language which our colleague finds
could not be more plain) that the pension provisions
for unit employees are required by the collective-bar-
gaining agreement to be the mirror image of those for
nonunit employees. The language in question simply
does not convey to us the absolutely plain meaning
that it conveys to our colleague. Thus, we do not agree
with his resultant finding, based on his view of the
above language, that whenever the Respondent decides
to change pension provisions for nonunit employees, it
is clearly and unmistakably permitted—indeed, com-
pelled—by the collective-bargaining agreement auto-
matically and unilaterally to make identical changes in
pension benefits for unit employees. In our view, con-
trary to our colleague’s, the contractual language in
question cannot reasonably be read to have granted the
Respondent any such right, much less imposed on it
any such obligation.
The Respondent argues that its unilateral implemen-
tation of a freeze on benefit accruals did not violate
the Act because those changes were required by law.
As the judge found in rejecting this argument, how-
ever, the Internal Revenue Service afforded some lati-
tude to companies with pension plans whose vesting
schedules and social security offsets were like the Re-
spondent’s, in amending their plans to comport with
the revised tax statute. Thus, we agree with the judge
that the Respondent had some choices over which the
parties could have bargained. Specifically, the Re-
spondent could have adopted any of four model
amendments. For instance, the compensation level to
be taken into account under the Plan could have been
limited to $200,000, or benefit accruals could have
been terminated for highly compensated employees
only. The Respondent unilaterally elected the model
amendment that froze benefit accruals, a result that
was not required to protect the Plan’s tax-exempt sta-
tus, and thus failed to provide the Unions with notice
and an opportunity to bargain over benefit accrual, a
mandatory bargaining subject. The Respondent thereby
violated Section 8(a)(5) and (1) of the Act.6
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 Unions are labor organizations within the
meaning of Section 2(5) of the Act.
3. The following unit is appropriate for purposes of
collective bargaining:
All production and maintenance employees of the
Respondent’s existing plants in Lancaster, Penn-
sylvania and Elkton, Maryland, including material
handlers, stockroom and shipping personnel, inter-
plant truck drivers and janitors, but excluding of-
fice clericals, hourly and salaried engineering and
developmental personnel, inspectors, foremen,
guards, supervisory personnel as defined in the
Act and all other employees of the Respondent.
4. At all times material the Unions have been the
exclusive collective-bargaining representatives of the
employees in the unit described above.
5. The Respondent has violated Section 8(a)(5) and
(1) of the Act by unilaterally selecting and implement-
ing IRS Model Amendment 3 (cessation of benefit ac-
cruals) over other proposed model amendments to its
pension plan to comport with U.S. Internal Revenue
Code requirements for tax-exempt status without pro-
viding the Unions with notice and an opportunity to
bargain over these decisions and their effects.
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
744 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 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.’’
1 As there is no violation under the majority’s ‘‘waiver’’ standard,
the same result obtains a fortiori under the ‘‘contract coverage’’
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 pension plan, we shall order the
Respondent to rescind its unlawful unilateral modifica-
tion of the pension plan and to bargain with the
Unions over the precise manner by which it modifies
its pension plan to comport with Internal Revenue
Code requirements for tax-exempt status for the Plan.
We shall also order the Respondent to make whole all
employees for any losses they may have suffered as a
result of the Respondent’s unlawful unilateral modi-
fication of the pension plan, with such payments to be
computed in the manner set forth in Ogle Protection
Service, 183 NLRB 682 (1970), and with interest as
prescribed in New Horizons for the Retarded, 283
NLRB 1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, Trojan Yacht, Division of Bertram-Trojan,
Inc., Lancaster, Pennsylvania, and Elkton, Maryland,
its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Unilaterally selecting and implementing IRS
Model Amendment 3 (cessation of benefit accruals)
over other proposed model amendments to its pension
plan to comport with Internal Revenue Code require-
ments for tax-exempt status without providing the
Unions with notice and an opportunity to bargain over
this decision and its effects.
(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) Rescind its unlawful unilateral modification of
the pension plan.
(b) Make whole all employees for any losses they
may have suffered as a result of the Respondent’s un-
lawful unilateral modification of the pension plan, with
such payments to be computed in the manner set forth
in the remedy section of this decision.
(c) On request, bargain collectively with the Indus-
trial Union of Marine and Shipbuilding Workers of
America, District Lodge 4, Local Lodges 86 and 88,
as the collective-bargaining representatives of the em-
ployees in the appropriate bargaining unit described
below over the decision on how to modify its pension
plan to comport with Internal Revenue Code require-
ments for tax-exempt status and the effects of that de-
cision. The appropriate unit is:
All production and maintenance employees of the
Respondent’s existing plants in Lancaster, Penn-
sylvania and Elkton, Maryland, including material
handlers, stockroom and shipping personnel, inter-
plant truck drivers and janitors, but excluding of-
fice clericals, hourly and salaried engineering and
developmental personnel, inspectors, foremen,
guards, supervisory personnel as defined in the
Act and all other employees of the Respondent.
(d) Post at its Lancaster, Pennsylvania, and Elkton,
Maryland facilities and mail to retirees covered by the
Bertram-Trojan, Inc. Employees’ Pension and Savings
Plan copies of the attached notice marked ‘‘Appen-
dix.’’7 Copies of the notice, on forms provided by the
Regional Director for Region 4, after being signed by
the Respondent’s authorized representative, 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 notices 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.
MEMBER COHEN, dissenting.
I find that the Respondent did not violate Section
8(a)(5) by changing its pension plan to conform to IRS
requirements. I would therefore dismiss the complaint.
The pension plan is corporatewide, and thus covers
both nonunit and unit employees. The plan itself is not
in the collective-bargaining agreement. The contract,
however, refers to the plan. Article X, section 2, of the
contract provides that the plan
will be maintained in the same manner and to the
same extent such plans are generally made avail-
able and administered on a corporate basis.
The contract could not be more plain. The pension
provisions for the unit employees are to be the mirror
image of those applying to the nonunit employees. Un-
questionably, the Respondent’s changes in the pension
plan were lawful with respect to nonunit employees.
Accordingly, under article X, section 2, these changes
then applied automatically to unit employees. Clearly,
there can be no violation in the Respondent’s adher-
ence to its collective-bargaining agreement.
Applying the majority’s ‘‘waiver’’ test, the contract
is unambiguous. It clearly and unmistakably permits—
indeed compels—the Respondent to apply the same
pension plan to unit and nonunit employees alike.1
745TROJAN YACHT
standards set forth by the District of Columbia Circuit. NLRB v.
Postal Service, 8 F.3d 832 (D.C. Cir. 1993). See my dissent in
Exxon Research & Engineering Co., 317 NLRB 675 (1995).
2 Rockford Manor Care Facility, 279 NLRB 1170 (1986), contains
language that is arguably at odds with my position. It suggests that,
under a similar clause, an employer’s change as to nonunit employ-
ees does not give the employer the right to unilaterally apply the
change to unit employees. See Rockford, supra at 1173. The lan-
guage, however, is essentially dicta. The actual decision in Rockford
was that there was no violation, based on other clauses in the con-
tract. The contract contained a zipper clause, a clause that gave the
company the right to act unilaterally with respect to matters not ex-
pressly governed by the contract. In addition, I note that one mem-
ber of the panel disagreed with the dicta; she took a position similar
to my own.
Thus, the Respondent’s adherence to the contract did
not violate Section 8(a)(5) and (1) of the Act.2
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 unilaterally select and implement a
plan for bringing our pension plan into conformity
with U.S. Internal Revenue Code requirements without
providing the Unions with notice and an opportunity to
bargain about these decisions and their effects.
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 rescind our unlawful unilateral modifica-
tion of the pension plan.
WE WILL make whole all employees for any losses
they may have suffered as a result of our unlawful uni-
lateral modification of the pension plan, with interest.
WE WILL, on request, bargain collectively with the
Industrial Union of Marine and Shipbuilding Workers
of America, District Lodge 4, Local Lodges 86 and 88
as the exclusive representatives of the employees in the
appropriate bargaining unit, described below, over the
decision on how to modify our pension plan to com-
port with Internal Revenue Code requirements for tax-
exempt status and the effects of that decision:
All production and maintenance employees of the
our existing plants in Lancaster, Pennsylvania and
Elkton, Maryland, including material handlers,
stockroom and shipping personnel, inter-plant
truck drivers and janitors, but excluding office
clericals, hourly and salaried engineering and de-
velopmental personnel, inspectors, foremen,
guards, supervisory personnel as defined in the
Act and all of our other employees.
TROJAN YACHT, DIVISION OF BERTRAM-
TROJAN, INC.
Bruce G. Conley, Esq., for the General Counsel.
William J. Payne and John B. Nason III, Esqs., of Philadel-
phia, Pennsylvania, for the Respondent.
Joshua P. Rubinsky, Esq., of Philadelphia, Pennsylvania, for
the Charging Parties.
DECISION
STATEMENT OF THE CASE
JAMES L. ROSE, Administrative Law Judge. These consoli-
dated cases were tried before me on various dates between
June 17 and September 21, 1992, on the General Counsel’s
complaint which alleged, in general, that the Respondent had
made a unilateral, midterm modification of its collective-bar-
gaining agreement with the Charging Parties in violation of
the Section 8(a)(5) of the National Labor Relations Act (the
Act).
The Respondent generally denied that it engaged in any
unlawful activity, and affirmatively contends that the com-
plaint here is barred by Section 10(b) of the Act.
On the entire record of this matter, including briefs and ar-
guments of counsel, I make the following
FINDINGS OF FACT
I. JURISDICTION
At all times material, the Respondent was a Delaware cor-
poration with offices and plants located in various States in-
cluding Pennsylvania and Maryland and was engaged in the
manufacture of fiberglass pleasure yachts. In the course and
conduct of its business, the Respondent annually shipped di-
rectly to points outside Pennsylvania goods, products, and
materials valued in excess of $50,000. The Respondent ad-
mits, and I find, that it is an employer engaged in interstate
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
II. THE LABOR ORGANIZATIONS INVOLVED
Each Charging Party (collectively referred to as the Union)
is admitted by the Respondent to be, and I find is, a labor
organization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts in General
At issue is the Respondent’s alleged unilateral midterm
modification of the collective-bargaining agreement by ceas-
746 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 From p. 349 to p. 357 of the transcript, ‘‘Mr. Rubinsky’’ should
read ‘‘Mr. Payne.’’
ing benefit accruals for all participants in its pension plan.
The Respondent contends that specific language of the pen-
sion plan, as well as the collective-bargaining agreement,
gave it the right to amend the Plan and cease accrual of ben-
efits. The General Counsel and the Union disagree, arguing
that Section 8(d) of the Act prohibited the Respondent from
making any midterm change to the pension plan without the
express consent of the Union.
The material facts are not really in dispute. Since 1969,
employees of the Respondent’s Elkton, Maryland plant have
been represented by Local 86; and, since 1971, the employ-
ees at the plants in Lancaster and Kinzer, Pennsylvania, have
been represented by Local 88. In 1971, the two Locals
formed a single bargaining unit and have entered into a se-
ries of collective-bargaining agreements with the Respondent
and its predecessor, the most recent of which was negotiated
in 1989 and was effective June 7, 1989, through June 6,
1992.
In 1971, the Respondent’s predecessor, Whittaker Corpora-
tion, started a pension plan which covered all employees—
union and nonunion alike. While there were discussions
about the pension plan during contract negotiations, the
Union agreed its members would be covered by the Plan as
applicable to all employees.
The language of the pension plan, and reference to it in
the collective-bargaining agreement has changed somewhat
over the years. The contract language material here first ap-
peared in the 1980–1983 agreement. And the Plan in effect
at the time material here was the Bertram-Trojan, Inc. Em-
ployees’ Pension and Savings Plan effective March 1, 1985.
Article X, section 2, of the collective-bargaining agree-
ment states that the Bertram-Trojan, Inc. Employees’ Pension
and Savings Plan
will be maintained in the same manner and to the same
extent such plans are generally made available and ad-
ministered on a corporate basis.
Section 14.01 of the Plan states:
While the Plan is intended as a permanent program, the
Board of Directors shall have the right at any time to
declare the Plan terminated, or to provide for a partial
termination of the Plan.
In addition, section 13.02 of the Plan allows for prospec-
tive or retroactive amendments to the Plan
to make the Plan conform to any provision of ERISA,
the Internal Revenue Code provisions dealing with em-
ployees’ trusts, or any regulation under either of such
statutes.
In brief, adoption of some amendment to the Plan was ne-
cessitated by changes in the Internal Revenue Code of 1986.
In lieu of immediate compliance with the amended Code,
IRS Advance Notice 88-131 gave pension plan sponsors the
option of four model amendments as a stopgap. The IRS re-
quired one of these model amendments to be adopted by
March 31, 1989, in order to protect the tax exempt status of
the Plan. Subsequently, then, the Respondent could make a
substantive amendment to the Plan in accordance with the
Internal Revenue Code. And this, according to a memo in
evidence, was to take place at a board of directors meeting
in June 1990. No additional amendment, however, was ever
adopted, because, according to the Respondent’s witnesses, it
filed a voluntary petition in bankruptcy on March 26, 1992.
By its letters to employees dated December 20, 1990, how-
ever, it appears the Respondent intended this amendment to
be permanent.
This case is about the adoption of model amendment three
(cessation of benefit accruals) which, according to witnesses
for the Respondent, occurred at the board of directors meet-
ing on February 28, 1989. Other evidence of record, how-
ever, suggests adoption of the amendment took place much
later, which would imply that the February date was put on
it to comply with the March 31, 1989 deadline though the
deadline was subsequently extended to December 31, 1990.
If this case required a specific finding that the amendment
in question was adopted by the Respondent on February 28,
1989, I would be hard pressed to make it.
According to their testimony, none of the Respondent’s
managers involved in the Plan’s administration knew of the
amendment prior to late 1990. IRS Form 5500 submitted by
the Respondent to the IRS for 1989 (dated October 15, 1990)
shows the most recent amendment to the Plan to have been
November 6, 1987. There is no indication of an amendment
in 1989. And testimony of the Respondent’s corporate coun-
sel and president as to the Board meeting is not convincing.1
During negotiations with the Union in June 1989, the Re-
spondent made no reference to the amendment. Nor did the
Respondent furnish a copy of the amendment, notwithstand-
ing the Union’s request for material concerning the Plan,
which reasonably included any amendments. The Respondent
did produce other material.
Finally, amendment 1 was unilaterally implemented on
November 6, 1987, and the employees were notified by
memo of January 4, 1988, just 2 months later—not almost
2 years, as the Respondent contends with the amendment
here. No reason appears, nor was one suggested by the Re-
spondent, why adoption of the amendment was kept from the
Union during negotiations and for nearly 2 years.
From all the above, it appears that the amendment was
adopted sometime after the March 31, 1989 deadline, prob-
ably in mid to late 1990. But precisely when the amendment
was adopted is not material here. What is material is that the
Respondent did amend the plan to cease accrual of benefits
for all participants. The propriety of what the board of direc-
tors did is not here for decision. The issue here is whether
the Respondent violated Section 8(a)(5) in adopting the
amendment, assuming regularity of the Board’s action.
On or about December 20, 1990, the pension plan commit-
tee mailed to each plan participant a memorandum announc-
ing that the Plan had been amended, the effect of which was
to freeze benefit accruals as of January 1, 1989. Copies of
this memorandum were received by employees and officers
of the Union within a few days of December 20, 1990.
There had been no previous notice to the Union of this
amendment. Specifically, during negotiations for a new col-
lective-bargaining agreement in 1989, the Respondent did not
tell the Union that such an amendment had been, or would
be, passed by its board of directors.
747TROJAN YACHT
B. Analysis and Concluding Findings
1. The 10(b) defense
The Respondent contends that the Union had notice of the
plan amendment ‘‘probably prior to the formal December,
1990 notice.’’ This is based on letters from Nieves R.
Cardenal (senior manager, employee benefits) to John E.
Riggs of May 15, 1990, Billy Tribble of July 5, 1990, Elmer
G. Sensenig Jr. of October 1, 1990, and Wayne L. Warner
of October 22, 1990, wherein it was stated, ‘‘Your benefits
in the attached have been calculated through 12/31/88. Your
entitlement to benefits based on years after 12/31/88, if any,
will not be determined until the plan is amended to comply
with the new laws. At that time, if you are entitled to any
additional benefits, you will be so informed.’’
Counsel argues that this notice to retirees was notice to the
Union that the Plan had been amended. Therefore, the
charges, having been filed on June 12, and served on June
21, 1991, were more than 6 months beyond notice to the
Union of the Respondent’s act which was alleged to con-
stitute an unfair labor practice.
I reject this argument. There is nothing in these letters
which suggests that the Respondent had in fact amended the
Plan. Indeed, at the time the letters were written, Cardenal
did not herself know of the amendment, though some future
amendment is referred to in the letter. In any event, the
Union was not notified and there is nothing in this record to
suggest that a letter to a retiree would be known to officials
of the Union.
If in fact the Plan was amended when testified to by wit-
nesses for the Respondent, that fact was kept from the
Union. The amendment was said to have occurred on Feb-
ruary 28, 1989. Subsequently there were negotiations be-
tween the Respondent and the Union. The Plan was dis-
cussed, but nothing was said about the amendment. I con-
clude that whenever made, the Union was uninformed of the
amendment until the general notice to employees by letter
dated December 20, 1990, of which the Union had notice no
earlier than December 22.
According to the evidence of record, the memorandum,
though dated December 20, was not actually mailed until De-
cember 21. It could not have been delivered until after De-
cember 21 and therefore was not notice to the Union before
December 22, which was within the 6-month period set forth
in Section 10(b). See MacDonald’s Industrial Products, 281
NLRB 577 (1986), and St. John Medical Center, 252 NLRB
514 (1980).
2. The Respondent’s unilateral modification of the
collective-bargaining agreement
Unquestionably, a pension plan is a term or condition of
employment and a mandatory subject of bargaining. Such is
therefore a matter not subject to unilateral modification dur-
ing the term of a collective-bargaining agreement unless the
company has retained the specific authority to do so.
The Respondent does not deny it unilaterally changed the
Plan. The Respondent contends it had the right to do so by
virtue of (a) the management-rights clause of the contract,
(b) the zipper clause of the contract, and/or (c) express lan-
guage of the pension plan.
The Respondent also argues that the specific amendment
here was required by law, hence there was nothing to nego-
tiate. The IRS, however, gave the Respondent its choice of
four permissible amendments. Which to adopt was clearly
something about which it could have negotiated with the
Union. I, therefore, do not accept this argument as a basis
for dismissing the complaint.
The General Counsel and the Union couch the issue in
terms of waiver—whether the Union waived its 8(d) right
that the Respondent could not make a midterm change in the
Plan. They argue, as the Supreme Court has held, that waiver
of a statutory right ‘‘must be clear and unmistakable,’’ and
will not be inferred from general contract language. Metro-
politan Edison Co. v. NLRB, 460 U.S. 693, 708 (1983). And
they argue that neither language in the collective-bargaining
agreement nor the bargaining history of the Plan supports a
conclusion that the Union clearly and unmistakably waived
its right to have the Plan apply unchanged during the course
of the agreement.
While waiver may be a way of viewing this matter, I am
more inclined to consider this a case of contract interpreta-
tion. This is not a case where the collective-bargaining agree-
ment is silent. The parties agreed to language by which the
bargaining unit employees would be covered under by the
Plan. Therefore, the ‘‘clear and unmistakable’’ standard is ir-
relevant. See Chicago Tribune Co. v. NLRB, 974 F.2d 933,
937 (7th Cir. 1992); Electrical Workers IBEW Local 47 v.
NLRB, 927 F.2d 635, 641 (D.C. Cir. 1991).
Thus, I conclude that neither the management-rights nor
the zipper clause is particularly germane. There is nothing in
the management-rights clause which would suggest that the
Respondent retained the right to alter the pension plan, or
any other item of compensation. The zipper clause states, in
effect, that the parties bargained on all mandatory subjects
and the contract represents their total agreement. This means
that midterm neither party could demand bargaining on a
subject not covered in the contract claiming that the parties
had not previously bargained about it. It does not mean,
however, that absent specific authority to do so, either party
could unilaterally change a term of the agreement.
What is germane is language in the collective-bargaining
agreement concerning the pension plan, and the language of
the Plan. Specific wording in the Plan allows the Respondent
to terminate it at will and to amend it to conform to the In-
ternal Revenue Code. Therefore, the issue is whether an
amendment necessitated by the Internal Revenue Code could
be unilaterally adopted as to those employees who are also
covered under the collective-bargaining agreement.
From the outset of their bargaining relationship, the Re-
spondent and the Union have discussed the pension plan.
During each period of negotiations for a renewal collective-
bargaining agreement, particularly including that of 1989, the
Plan was considered. Typically the Union made certain de-
mands concerning the Plan which the Respondent rejected on
grounds that the Plan covered all of its 1200 to 1300 or so
employees, whereas the Union represented only 300.
Further, the Plan was changed midterm in 1980. The
Union decided not to grieve this fact after being advised that
the amendment added to benefits. And a new Plan was insti-
tuted in 1985.
In any event, during contract renewal bargaining, terms of
the Plan were always subject to negotiation. That the Union
748 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 In Rockford Manor Care Facility, 279 NLRB 1170 (1986), simi-
lar language in the collective-bargaining agreement, along with a
management-rights and a zipper clause, allowed the respondent to in-
stitute unilaterally a different health plan during the term of a collec-
tive-bargaining agreement.
3 Compare TCI of New York, 301 NLRB 822 (1991) (Member
Cracraft dissenting) where bargaining history in addition to a zipper
clause was sufficient to allow a unilateral midterm change in a con-
dition of employment on which the collective-bargaining agreement
was silent.
always accepted the Respondent’s adamant position does not
somehow mean that specific provisions of the Plan and the
collective-bargaining agreement are not binding on the
Union.
The language which incorporates the pension plan into the
collective-bargaining agreement, as of 1989, states the Plan
will be maintained in the same manner and to the same
extent such plans are generally made available and ad-
ministered on a corporate basis.2
And specific provisions in the Plan, set forth above, clear-
ly retained to the Respondent the power to alter it in cir-
cumstances such as here (a change in the Internal Revenue
Code), or terminate it.
The General Counsel and the Union rely on T.T.P. Corp.,
190 NLRB 240 (1971), wherein the Board held that similar
language did not permit an employer to change a unilaterally
implemented pension plan, since the existence of the plan
was a condition of employment and there was no reference
to it in the collective-bargaining agreement. In finding a vio-
lation in T.T.P. Corp., supra, it was noted that the collective-
bargaining agreement had no management-rights or zipper
clause.3
More recently, however, in Mary Thompson Hospital, 296
NLRB 1245 (1989), the Board concluded that pension plan
language similar to that here permitted unilateral midterm
modification, where the collective-bargaining agreement spe-
cifically incorporated the pension plan language.
The facts here are between T.T.P., supra, where there was
no mention of the plan in the collective-bargaining agree-
ment, and Mary Thompson, supra, where the plan was incor-
porated in the collective-bargaining agreement by reference.
Here, the parties specifically agreed that the companywide
Plan would apply to bargaining unit employees; however,
there is no specific language stating that the terms of the
Plan were in the collective-bargaining agreement.
Nevertheless, I conclude this case is much closer to Mary
Thompson, supra, and to T.T.P., supra, The language making
the Plan applicable to bargaining unit employees is: ‘‘The
above plans will be maintained in the same manner and to
the same extent such plans are generally made available and
administered on a corporate basis.’’ This can only mean that
bargaining unit employees will benefit from the Plan to the
same extent as all other employees.
If the benefit clauses apply, necessarily so do the proviso
clauses, unless they are specifically modified by language in
the collective-bargaining agreement. The only such modifica-
tion agreed to by the parties relates to the minimum benefit,
which in the agreement is set at $10.50 per month per year
of benefit service.
The provision allowing the Respondent to alter, or termi-
nate, the Plan at any time was obviously known to the
Union’s negotiators. Clearly, the parties could have nego-
tiated a limitation on this. So far as I can tell from this
record, the Union never sought to limit that power as to bar-
gaining unit employees. During several sets of negotiations,
the Union always agreed to the Respondent’s proposal that
the pension plan would apply as written on a corporatewide
basis.
I conclude that the specific terms of the pension plan, to
which the Union was bound as a signatory to the collective-
bargaining agreement, allowed the Respondent to make uni-
lateral midterm modifications. Therefore, the Respondent did
not violate Section 8(a)(5) in adopting amendment 2.
[Recommended Order for dismissal omitted from publica-
tion.]