Opinion ID: 417967
Heading Depth: 1
Heading Rank: 2

Heading: Reimbursement for Employee Negotiators

Text: 16 Midstate claims that its failure to pay the per diem, travel, and lodging expenses of employee negotiators for bargaining sessions held during the strike was not an unfair labor practice. The Company argues first that it was not contractually obligated to make such payments. According to Midstate, the procedural agreement, which provides for reimbursement of employee negotiators' expenses, expired at the same time as the underlying collective bargaining agreements. Although there is no expiration date to the supplemental agreement, the Company contends that the parties assumed the agreement would expire along with the collective bargaining agreements. But the ALJ found, and the Board apparently agreed, that the agreement was intended to remain in effect until a new joint collective bargaining agreement was reached. It appears that all other provisions of the agreement were observed until the new pact was reached. Moreover, the Company, which drafted the agreement, could have specified an earlier expiration date if that was its intention. The impetus for a joint agreement covering three units, one of which was 200 miles away from the others, came from the Company; it obviously recognized that some employee negotiators would have to travel substantial distances to attend the negotiations until they were concluded. Under the circumstances, we cannot say that the Board erred in determining that the agreement remained in force during the strike. 17 The Company argues that even if the agreement was in force during the strike, the Company's good faith refusal to pay the disputed expenses did not violate the Act. The Board, however, makes the opposite argument: that even if the agreement had expired, the Company's refusal to reimburse the employee negotiators violated Secs. 8(a)(1) and (5) of the Act. We agree with the Board's position. 18 We think substantial evidence supports the Board's determination that Midstate violated Secs. 8(a)(1) and 8(a)(5) of the Act by refusing to reimburse employee negotiators for bargaining session expenses incurred during the strike. Section 8(a)(1) makes it an unfair labor practice for an employer to interfere with employees' right to engage in concerted activity for mutual aid, in this case, with their right to strike. Section 8(a)(5) requires an employer to bargain collectively with employees' representatives concerning the terms and conditions of employment. It is well established that under Sec. 8(a)(5), as defined in part by Sec. 8(d), an employer may not unilaterally modify or repudiate a contract provision relating to a mandatory subject of collective bargaining. Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 185-86, 92 S.Ct. 383, 400-401, 30 L.Ed.2d 341 (1971). The Board has previously held that reimbursement of negotiators' lost wages constitutes a term or condition of employment that is a mandatory subject of bargaining. See Axelson, Inc., 234 N.L.R.B. 414, 415 (1978), enforced, 599 F.2d 91, 94-95 (5th Cir.1979). In this case, the Board determined, and we agree, that reimbursement of per diem, travel, and lodging expenses similarly involves a mandatory subject of bargaining because it inure[s] to the benefit of all of the members of the bargaining unit by contributing to more effective collective-bargaining representation and thus 'vitally affect[s]' the relations between an employer and employee. Id. at 415. Thus, by unilaterally discontinuing reimbursement payments, the Company violated Secs. 8(a)(1) and 8(a)(5) of the Act. 19 This holds true even if--contrary to the Board's view and our own--the ground rules agreement had expired. For as the Board points out, it is well settled that an employer may not unilaterally alter an existing term or condition of employment without first notifying and bargaining with the Union. See Firch Baking Co. v. NLRB, 479 F.2d 732, 735 (2d Cir.), cert. denied, 414 U.S. 1032, 94 S.Ct. 461, 38 L.Ed.2d 323 (1973). 20 The Board's finding that the Company violated Sec. 8(a)(3) by refusing to reimburse the expenses of the employee negotiators is also supported by substantial evidence. The Supreme Court has held that:Under Sec. 8(a)(3), it is unlawful for an employer by discrimination in terms of employment to discourage membership in any labor organization, which includes discouraging participation in concerted activities ... such as a legitimate strike. 21 NLRB v. Erie Resistor Corp., 373 U.S. 221, 233, 83 S.Ct. 1139, 1148, 10 L.Ed.2d 308 (1963) (citations omitted). 22 Discrimination under Sec. 8(a)(3) need not consist of a disparity in the treatment of different classes of employees. NLRB v. Borden, Inc., 600 F.2d 313, 320 (1st Cir.1979), remanded and aff'd after remand, 645 F.2d 87 (1st Cir.1981). As the First Circuit noted, the Act speaks to discrimination on the basis of union activity. Id. In the case now before us, the Board found that discontinuing the expense payments attached a penalty to strike activity. In that sense, the Company's action was discriminatory within the meaning of Sec. 8(a)(3). 23 The standard for determining whether such action violates Sec. 8(a)(3) is set forth in NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 1797, 18 L.Ed.2d 1027 (1967) (emphasis in original): 24 From this review of our recent decisions, several principles of controlling importance here can be distilled. First, if it can reasonably be concluded that the employer's discriminatory conduct was inherently destructive of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is comparatively slight, an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct. Thus, in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him. 25 The Board found in this case that the refusal to pay negotiating expenses was inherently destructive of employee rights, and therefore a violation of Sec. 8(a)(3). We believe that this was correct. By discontinuing travel and per diem payments to employee negotiators once the strike began, the Company penalized the employees for going out on strike. There is evidence that the Company's chief negotiator told the Union that his own personal view was that he didn't think the negotiators should be paid if [they] were on strike and not working, although this was not the Company's stated rationale. But the payments to the negotiators were not wages for working, which would cease when the work did. The payments were part of an agreement by which the Company had secured the Union's assent to joint negotiations at a place 200 miles from the area where some of the negotiators worked. This does not mean, of course, that the Company had to agree in the first place to reimburse the negotiators. But having done so, it could not simply cancel the agreement because the Union was on strike. 26 Moreover, the Board was entitled to reject the Company's defense that its decision not to pay the amounts in question was made in good faith and was based on the reasonable belief that the procedural agreement had expired. In support of its argument, the Company cites Vesuvius Crucible Co. v. NLRB, 668 F.2d 162 (3rd Cir.1981). In that case, the employer refused to pay accrued vacation benefits to striking employees because of its legitimate and good faith interpretation of the expired contract. Id. at 166. The Board rejected the employer's argument because the Board found that the employer's interpretation of the contract was incorrect. The Third Circuit ruled in favor of the employer, holding that 27 in the absence of proof of anti-union motivation or a finding that the company's conduct was inherently destructive of employee rights, a non-discriminatory refusal to pay benefits to all employees based on a good faith interpretation of the labor contract is insufficient to make out a violation of the National Labor Relations Act. 28 Id. at 168 (footnote omitted). 29 We think, however, that this case is closer to NLRB v. Borden, Inc., 645 F.2d 87 (1st Cir.1981), in which the employer's actions undercut its alleged good faith reliance on the terms of the collective bargaining agreement. In this case, although the Company repudiated its obligation to pay negotiating expenses, it nonetheless continued to act as if the procedural agreement were otherwise still in effect. Thus, the Company continued the joint negotiating procedures that it had initiated until a new, single collective bargaining agreement was reached, which was ratified in accordance with the ground rules agreement. 30 In any event, we agree with the Board's finding that the failure to pay the expenses at issue was inherently destructive of employee rights. Therefore, the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Great Dane, supra, 388 U.S. at 34, 87 S.Ct. at 1797; see NLRB v. United Aircraft Corp., 490 F.2d 1105, 1110 (2d Cir.1973); cf. NLRB v. Martin A. Gleason, Inc., 534 F.2d 466, 471-74 (2d Cir.1976). Accordingly, even if the Company's conduct was predicated on a good faith interpretation of the contract, that is not dispositive. Cf. NLRB v. M & M Oldsmobile, Inc., 377 F.2d 712, 716 (2d Cir.1967) (in some situations it is not enough that an employer is convinced he is right). On the record before us, we do not feel justified in overriding the Board on this issue. 31 For the reasons stated above, we enforce that portion of the Board's order relating to the per diem, travel and lodging expense issue, and deny enforcement of that portion of the Board's order relating to the wearing of the disputed T-shirts.