Universal Fuels, Inc.

National Labor Relations Board - Board DecisionsApr 19, 1990

298 N.L.R.B. 254 (N.L.R.B. 1990)

254 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Universal Fuels, Inc. and Michael W. Anderson. Cases 5-CA-18660 and 5-CA-18978 April 19, 1990 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS DEVANEY AND OVIATT Upon a charge filed by the Charging Party on February 17, 1987, and amended on May 26, 1987, in Case 5-CA-18660, and a charge filed by the Charging Party on July 2, 1987, in Case 5-CA- 18978, the General Counsel of the National Labor Relations Board, on August 28, 1987, issued an order consolidating cases, amended complaint, con- solidated complaint, and notice of hearing against the Respondent alleging that it violated Section 8(a)(1) of the Act.' The Respondent filed a timely answer to the complaint denying that its conduct violated the Act and moving to dismiss. On January 13, 1989, the parties jointly moved to transfer the proceedings to the Board, without benefit of a hearing before an administrative law judge, and submitted a proposed record consisting of the parties' stipulation of facts and attached ex- hibits including the formal papers. On March 8, 1989, the Deputy Executive Secretary, by direction of the Board, issued an order granting the motion, approving the stipulation, and transferring the pro- ceedings to the Board. The Respondent and the General Counsel subsequently filed briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record in the case, the Board makes the following FINDINGS OF FACT 1. JURISDICTION The Respondent, Universal Fuels, Inc., an Ala- bama corporation, with an office and place of busi- ness in Lexington Park, Maryland, is engaged in aircraft fuel transportation for the United States Navy at the Patuxent River Naval Air Station, Lexington Park, Maryland. During the 12 months preceding August 28, 1987, a representative period, the Respondent, in the course and conduct of its business, performed aircraft fuel transportation services for the United States Navy valued in excess of $50,000. In the same period the Respond- ' The amended consolidated complaint superseded a complaint issued earlier m Case 5-CA-18660. The Regional Director subsequently granted the Charging Party's request to withdraw certain allegations of the un- derlymg charges and ordered that the corresponding paragraphs of the amended consolidated complaint be withdrawn. ent purchased and received supplies valued in excess of $5000 directly from points outside the State of Maryland. The Respondent's operations have a substantial impact on the national defense of the United States. We find that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. We fur- ther find that the Union, the American Federation of Government Employees, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES The issue is whether the Respondent has violated Section 8(a)(1) of the Act by maintaining certain rules permitting the imposition of discharge or dis- cipline on employees for misrepresentations con- cerning their benefits or claims for pay or employ- ment. A. Facts The Respondent and the Union had a collective- bargaining agreement effective from May 1, 1986, until September 1, 1989, which covered wages, hours, and other terms and conditions of employ- ment . Since August 19, 1986, the Respondent, pur- suant to article IX, section 2 of the collective- bar- gaining agreement has maintained the following rules: Just cause for the purpose of discipline or for the purpose of discharge, or either, shall in- clude: . . . misrepresentation in connection with any employee benefit . . . misrepresenta- tion of any material fact in connection with any claim concerning his employment or his pay.. . . During contract negotiations the Respondent pro- posed the language of article IX and the Union sought and obtained three modifications to the arti- cle unrelated to the quoted portion. B. Contentions of the Parties 1. The General Counsel's contentions The General Counsel argues that the rules con- stitute an impermissible restriction on the employ- ees' Section 7 rights to discuss wages and benefits. The General Counsel argues that the Board has consistently held that communications that are oth- erwise protected concerted communications do not lose their protected character merely because they are false, but only when they are deliberately and maliciously false. Because the quoted rules prohibit mere misrepresentations on topics that may well be 298 NLRB No. 31 UNIVERSAL FUELS part of protected concerted activities, the General Counsel argues that the rules are unlawfully broad. The General Counsel argues that the inclusion of the quoted rules as part of a collective-bargaining contract agreed to by the Union does not make it lawful because the Supreme Court and the Board have held that an agreement cannot waive employ- ees' Section 7 rights to communicate.2 2. The Respondent 's contentions The Respondent argues that the challenged rules could not reasonably be interpreted by an employ- ee to prohibit protected activity3 because they do not facially apply to union or concerted activities, but rather appear to deal with matters such as falsi- fying insurance claims, reasons for absence, or timecards. With regard to the first rule (misrepre- sentation in connection with an employee benefit), it argues that "employee benefits" is universally un- derstood to refer to subjects such as insurance or vacations, which are expressly provided for in the collective-bargaining agreement. It argues that the rule reasonably requires that employees refrain from making false representations concerning enti- tlement to benefits and' that no reasonable employ- ee could interpret it to restrict protected activities. With regard to the second rule (misrepresentation of any material fact in connection with any claim concerning his employment or pay), the Respond- ent argues that this "obviously" deals with time- keeping requirements. Further, it argues that be- cause prohibited misrepresentations must be "in connection with a claim" for an individual's em- ployment or pay, the rule cannot reasonably be in- terpreted to encompass general misrepresentations concerning employment or pay. Finally, the Respondent argues that the Union waived the employees" Section 7 rights that are in- volved in this case by agreeing to the quoted rules.4 C. Discussion The rules in question concern employee benefits and pay, both of which are common topics for pro- tected concerted communications. The second rule also encompass most protected communications, in_ cluding those about benefits and pay. Truthful communications' about these topics are clearly within the protection of the Act. Moreover, be- cause of the importance of communication between 2 Citing Massey-Ferguson, Inc., 246 NLRB 1100, 1101 (1979), and NLRB v. Magnavox Co. of Tennessee, 415 U S. 322 (1974) 3 Citing NLRB v. Certified Grocers of Illinois, 806 F.2d 744 (7th Cir. 1986). 4 Citing Magnavox, supra; NLRB v. Mid-States Metal Products, 403 F.2d 702 (5th Cir. 1468), and NLRB v. United Technologies, 706 F.2d 1254 (2d Cir. 1983). 255 employees to other protected concerted and union activities, the Act's protection extends to state- ments that are false, provided that the misrepresen- tation is not deliberate or malicious. As the Board stated in Walls Mfg. Co.:5 Employees do not forfeit the protection of the Act if, in voicing their dissatisfaction with matters of common concern, they give curren- cy to inaccurate information, provided that it is not deliberately or maliciously false. The Board has consistently found that rules which prohibit the making of "false, vicious or ma- licious statements" violate Section 8(a)(1) because they include within their proscription false state- ments that may nonetheless be protected .6 As the court stated in enforcing the Board's Order in American Cast Iron Pipe Co., supra: We agree with the Board that the major flaw in [these] rules is that they proscribe "false" as well as "vicious or malicious" statements... . Punishing employees for distributing merely "false" statements fails to define the area of permissible conduct in a manner clear to em- ployees and thus causes employees to refrain from engaging in protected activities. .. . These rules' prohibit and punish employees se- verely for "false" statements about the compa- ny; the rules are not limited to disloyal false statements. If disloyalty is the problem [the employer] seeks to address, it must do so di- rectly rather than through an impermissibly broad rule. Similarly, the Board has found unlawful a rule that prohibited discussion of the "hospital affairs, patient information and employee problems." In Pontiac Osteopathic Hospital, 284 NLRB 442 (1987), the Board adopted the judge's finding that this rule was unlawfully overbroad and his reasoning that: [The] ban could reasonably be construed by employees to preclude discussing information concerning terms and conditions of employ- ment, including wages, which, could fall under the broad categories of hospital affairs and em- ployee problems. While Respondent might have a substantial and legitimate interest in limiting or prohibiting discussion of some as- pects of its affairs, or of its employees' person- al problems, and certainly of patient informa- tion, it has offered no justification for the 5 137 NLRB 1317, 1319 (1962), enfd. sub nom. Ladies Garment Work- ers, 321 F 2d 753 (D.C. Cir. 1963). s American Cast Iron Pipe Co., 234 NLRB 1126 (1978), enfd. 600 F.2d 132 (8th Cir. 1979), Radisson Muehlebach Hotel, 273 NLRB 1464 ( 1985), St Joseph Hospital Corp, 260 NLRB 691 (1982) 256 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD broad policy stated in its confidential informa- tion rule. We find that the rules here are unlawfully broad because they could reasonably be understood as en- compassing conduct protected by the Act, includ- ing conduct manifesting employees' disagreement with their collective-bargaining representative's po- sition regarding contractual provisions. The rule pertaining to misrepresentations con- cerning employee benefits, for example, might rea- sonably encompass the employees' good-faith mis- interpretation of a provision in the collective-bar- gaining agreement-one that perhaps the union and the employer did not agree with or one that com- pared contractual benefits unfavorably with bene- fits provided under a rival union's contract. The rule pertaining to misrepresentations of ma- terial fact concerning employment or pay claims has similar problems. It could reasonably be under- stood as encompassing claims for pay or employ- ment entitlements that failed to disclose facts that employees might inaccurately believe were not ma- terial to their entitlements under the contract. Fur- thermore, it is not an unreasonable reach to read the term "claim" in the broader sense of grievance of some sort, so that this rule might also reasonably be read as threatening disciplinary sanctions for voicing employment grievances on the basis of facts that turn out to be wrong. And again, such claims might imply criticism of the incumbent union that negotiated the collective-bargaining agreement or might represent interpretations of the agreement with which the Union disagreed. We certainly cannot agree with the Respondent's con- tention that the rule "obviously deals with time- keeping requirements," because it does not even mention timekeeping.? We, of course, do not dispute that the Respond- ent has a substantial and legitimate interest in pro- hibiting, as it argues, "such matters as falsifying in- surance claims, falsifying the reasons for absence, falsifying a claim for funeral leave, [or] falsifying time cards." Furthermore, we do not dispute that the rules might reasonably be read as applying to such matters. As noted above, however, they can reasonably be read as also encompassing activity protected by Section 7 of the Act. To paraphrase the court of appeals' statement in American Cast Iron Pipe Co., quoted above, if falsification of time- ' Because we are applying a reasonableness standard in determining how these rules might be read , we are not at odds with the standard ap- plied by the Seventh Circuit in Certified Grocers, supra, on which the Re- spondent relies. The court declined to enforce the Board's order in that case because it deemed the Board 's construction of the particular "Yule" in that case unreasonable . The rules here are different and, for the rea- sons set forth above, we believe they could be reasonably read as infring- ing on Sec. 7 rights. cards or claims for funeral leave are the problems that the respondent seeks to address, it must do so directly, not through an impermissibly broad rule. Finally, we reject the Respondent's contention that the rules are lawful because they are included in a collective-bargaining agreement with the Union. Under the principles of NLRB Y. Magnavox Co. of Tennessee, supra, 415 U.S. at 325, a union may not waive employees' rights relating to their choice of a bargaining representative-"whether to have no bargaining representative, or to retain the present one, or to obtain a new one."" Although Magnavox dealt with a general prohibition on the distribution of literature that prohibited the distri- bution of views opposing or supporting the incum- bent union, and the rules at issue here are not ex- pressly related to the status of an incumbent union, we believe the rules here are equally destructive' of employees' rights to oppose or support an incum- bent union. Employees should be free, for example, to voice their views concerning what the contract grants them as to pay and benefits, whether or not their union and their employer take a different view; and, unless they, are engaging in deliberate or malicious falsehoods, they should be free to make invidious comparisons between their pay and bene- fits and those of employees working under con- tracts with other unions. Because the rules here reasonably can be read as infringing on these free- doms, the Union effected an invalid waiver of the employees' rights by agreeing to the rules.9 We a In the underlying decision in Magnavox (195 NLRB 265 (1972)), the Board had abandoned a distinction made in Gale Products, 142 NLRB 1246 (1963), between employees' Sec. 7 conduct in support of a union (which the Board had found a union could waive) and protected conduct in opposition to the incumbent (which could not be waived). 9 We do not agree that our holding here is necessarily inconsistent with United Technologies, supra, on which the Respondent relies The court's decision was based in part on its view that the Board was collat- erally estopped by an earlier decision finding a lawful waiver of the rule in question . Although the court also held that finding the waiver lawful was consistent with the Supreme Court 's decision in Magnavox, such a holding would not control the instant case. The Court found the rule there acceptable because it viewed it not as a total ban on in -plant solici- tations, but only a time- and-place limitation-barring such activity during "paid" time on the employer's premises . As explained above, the rules at issue here could be read as totally prohibiting employee commu- nications concerning pay or benefits if they are maccurate. The Respondent's reliance on Mid-States Metal Products, supra, is mis- placed. That decision , which enforced a Board order requiring the em- ployer to cease and desist from maintaining an overbroad no-solicitation and no-distribution clause in the collective-bargaining agreement, in fact essentially foreshadowed the Supreme Court's later decision in Magnavox. The Respondent's reliance on Electrical Workers IBEW Local 1212 (WPIX, Inc.), 288 NLRB 374 (1988), is also misplaced. That case in- volved a contract provision governing seniority for employees who took leaves of absences to work for their union-a provision the Board found lawful because it neither conferred gains nor imposed losses on those em- ployees in comparison with employees who continued to work in the unit and thus it neither encouraged nor discouraged union activity. The provi- sion had nothing to do with employee communications concerning em- ployment conditions. UNIVERSAL FUELS 257 find that the Union here could not waive the em- ployees' rights to protected communications by agreeing to the rules in question. CONCLUSIONS OF LAW 1. Universal Fuels, Inc. is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The ' Respondent has violated Section 8(a)(1) of the Act by maintaining in its collective-bargain- ing agreement with the union rules that state: Just cause for the purpose of discipline or for the purpose of discharge, or either, shall in- clude: . . . misrepresentation in connection with any employee benefit, . . . misrepresenta- tion of any material fact in connection with any claim concerning his employment or his pay. .. . 4. The, unfair labor practice affects commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in an unfair labor practice in violation of Section 8(a)(1) of the Act, we shall order it to cease and desist and take certain affirmative action designed to effectuate the policies of the Act.10 ORDER ercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Expunge from its collective-bargaining agree- ment the following definitions of what constitutes just cause for the purpose of discipline or for the purpose of discharge: misrepresentation in connection with any em- ployee benefit, . . . misrepresentation of any material fact in connection with any claim concerning his employment or his pay. (b) Post at its facility in Lexington Park, Mary- land, copies of the attached notice marked "Appen- dix "11 Copies of the notice, on forms provided by the Regional Director for Region 5, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly 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. (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 11 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 Nation- al 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." The National Labor Relations Board orders that the Respondent, Universal Fuels, Inc., Lexington Park, Maryland, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Maintaining rules in its collective-bargaining agreement with the American Federation of Gov- ernment Employees, AFL-CIO to the extent that they provide that Just cause for the purpose of discipline or for the purpose of discharge, or either, shall in- clude: . . . misrepresentation in connection with any employee benefit, . . . misrepresenta- tion of any material fact in connection with any claim concerning his employment or his pay. . . . (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- 10 The complaint requested a visitatonal provision. Under the circum- stances of this case, we find it unnecessary. See Cherokee Marine Termi- nal, 287 NLRB 1080 (1988) 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 ordered us to post and abide by this notice. WE WILL NOT give effect to any rules in our col- lective-bargaining agreement with the American Federation of Government Employees , AFL-CIO, to the extent that they provide that Just cause for the purpose of discipline or for the purpose of discharge , or either , shall in- clude : . . . misrepresentation in connection with any employee benefit, . . . misrepresenta- tion of any material fact in connection with any claim concerning his employment or his pay. 258 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD WE WILL NOT in any like or related manner interfere with, restrain , or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL expunge from our collective -bargain- ing agreement with the American Federation of Government Employees, AFL-CIO the following definitions of what constitutes just cause for the purpose of discipline or for the purpose of dis- charge: misrepresentation in connection with any em- ployee benefit , . . . misrepresentation of any material fact in connection with any claim concerning his employment or his pay. UNIVERSAL FUELS, INC.