### The HONORABLE RICHARD G. KOPF, United States District Judge 1 

### for the District of Nebraska, sitting by designation.



# United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________ No. 96-2904

___________ National Labor Relations * Board, * * Petitioner, * Petition for Review of the * Decision and Order of the v. * National Labor Relations Board. * Swift Adhesives, Division of * Reichhold Chemicals, Inc., * * Respondent. *

___________ Submitted: February 14, 1997 Filed: April 14, 1997

___________ Before BOWMAN and WOLLMAN, Circuit Judges, and KOPF, District 1 Judge.

___________ WOLLMAN, Circuit Judge.
The National Labor Relations Board (Board) found that Swift Adh esives (Swift) violated sections 8(a)(1) & 8(a)(3) of the National Labor Relation s Act ( the Act), 29 U.S.C. §§ 158(a)(1) & (a)(3), by withholding accrue d vacation benefits of former employees who were terminated following their participation in a st rike in the fall of 1993. The Board ordered Swift to pay the ac crued vacation benefits. We grant the Board’s petition fo r enforcement of the order.

### United Food & Commercial Workers Union, Local 576. 2 

### -2- I.
Under the terms of the collective bargaining agreement in effec t during pre-strike 199 3, employees who had been employed 196 calendar days wer e eligible for vacation benefits. Vacation was to be taken th e follow ing calendar year, but employees terminated for any reason coul d receive the vacation benefits for which they had become eligible. Thi s agreement expired on September 30, 1993, and the employees began a strike on Octo ber 1, 1993, after negotiations reached impasse. All strikin g employ ees had become eligible for benefits under the expired agreemen t prior to the strike.
On January 4, 1994, the U nion requested that Swift pay the striking 2 employees for their earned vacation days. Swift refused to pay unless the employee h ad actually worked 196 days in 1993, asserting that the 19 6 ac tual-days-worked requirement was part of Swift’s final offer afte r impasse and was therefore the relevant governing term. Accordingly, Swif t paid vacation benefits to seven employees who ha d actually worked 196 days in 1993, but denied vacation pay to fifteen employees who had been employe d for, but had not actually worked, 196 days.

A hearing was held before an administrative law judge (ALJ), wh o determin ed that Swift had violated the Act by refusing to pay th e accumu lated vacation benefits. The Board affirmed, finding that th e employees had accrued vacation benefits, that th e denial of those benefits was a direct result o f the strike, and that Swift had failed to establish a legi timate and substantial business reason for denying the accrue d vacation benefits.

### -3- II. We review the Board’s order with great deference and will enfor ce the order if the Board correctly applied the law and if its findings of fact are supported by subs tantial evidence on the record as a whole. See Town & Country Elec., Inc. v. NLRB , 106 F.3d 816, 819 (8th Cir. 1997); Universa l Camera Corp. v. NLRB , 340 U.S. 474, 490-91 (1951); 29 U.S.C. § 160(e). The Supreme Court has outlined the f ramework by which a violation of sections 8(a)(3) and (1) of the Act may be established. First, the Board must show “that the employer engaged in discrimi natory conduct which could have adversely affected employee rights to some extent.” NLRB v. Grea t Dane Trailers, Inc. , 388 U.S. 26, 34 (1967). Once this has been proved, the employer must establish “legitimate objectives” for taking th e complained-of action. See id
.
An em ployer’s discriminatory conduct can be shown by establishin g that the employees’ benefits were accrued and that the denial of payment was a pparently based on the employees’ participation in a strike. Se e Texaco, Inc. , 285 N.L .R.B. 241, 245 (1987). Benefits are accured if they were “‘du e and payable on the date on which the employer denied them.’ ” Conoco, Inc. v. NLRB , 740 F.2d 811, 814 (10th Cir. 1984) (quoting E.L . Wiegand Div., Emerson Elec. Co. v. NLRB , 650 F.2d 463, 469 (3d Cir. 1981))
. The striking employees had all been employed at Swift for at least 19 6 calendar days, the only requirement for eligibility under the pre-strike agreement. Moreover, that agreement provided that an employee terminated for any reason was entitled to receive the vacation benefits for which the y had become eligible. These facts constitute substantial evidenc e supporting the Board’s conclusion

### Swift argues that the fact that it paid vacation pay to the 3 

### seven employees who qualified under the new contract shows that it did not discriminate against strikers. This argument is unpersuasive, however, for it fails to rebut the fact that Swift treated the employees differently before and after the strike. -4- that the vacation benefits were due and payable. See Great Dane , 388 U.S. at 32 (vacation benefits were accrued because employees met condition s specifi ed in expired employment contract, despite fact employees wer e striking on date benefits could be claimed).
Likewise, substantial evidence supports the Board’s conclusion that Swi ft’s denial of accrued vacation benefits was apparently based on th e employees’ participation in the strike. When all employees strike, a s here, discrimination against striking employees lies in a difference i n treatm ent between the employees’ treatment before and after the strike
. See Kansas City Power & Light Co. v. NLRB , 641 F.2d 553, 557 (8th Cir
. 1981). Had the employees quit, been fired, or d ied before the strike they would have been entitled to their vacation pay.
Swift’s action could adversely affect the employees’ rights. It s conduct, when “considered from a common sense point of view, is bound to have a discouraging effect on present and future concerted activities,” fo r the co nsequence is that employees cannot strike without placing thei r accrued vacation pay in jeopardy. See id. at 559; see also Great Dane , 38 8 U.S. at 32 (“There is little question but that t he result of [a] company’s ref usal to pay vacation benefits to strikers [is] discrimination in it s simplest form.”). 3

The Board rejected Swift’s explanation that it was entitled t o unilaterally assert new terms regarding the accr ued vacation benefits once negotiations reached impasse. The Board concluded that already-accrue d vacation benefits were a non-mandatory subject

### -5-

of bargaining for whi ch Swift could not unilaterally implement terms. The rule that wages, hours, terms and conditions of employment are mandatory subjects of bargaining for which employers may unilaterally implement term s after impasse does not include accrued wages and benefits that are due and owing, as these items are debts arising out of contracts already concluded
. Se e R.E. Dietz Co. , 311 N.L.R.B. 1259, 1266 (1993). The Board’ s determination of the non-mandatory nature of accrued benefits “ha s reasonable basis in l aw and is not inconsistent with the structure of the Act.” LaTro be Steel Co. v. NLRB , 630 F.2d 171, 176 (3d Cir. 1980 ) (standard of review) (citing Ford Motor Co. v. NLRB , 441 U.S. 488, 49 7 (1979)). Thus, the Board did not misapply the law in determining tha t Swift’s right to impose terms relating to mandat ory subjects of bargaining after impasse did not constitute a legitimate and substantial reason for retroactively denying accrued vacation benefits.
Swift contends that its desire to ensure that employees work a significant portion of the year before receiving vacation benefit s justified its action. Although this purported justification migh t constitute a legitimate reason for changing the vacation benefits policy prospectively, it fails to justify denying benefits already accrued. Thus , the B oard did not err in finding that Swift had failed to show that it s denial of vacation be nefits was based on a legitimate business objective.
The Board’s order is enforced.

### -6- A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.