NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board,
International Association of Heat and Frost Insulators
and Asbestos Workers, Local No. 84 and
DST Insulation, Inc. Case 8–CB–10424
September 24, 2007
DECISION AND ORDER
By Chairman Battista and Members Liebman
and Kirsanow
This case raises the issue of whether the Respondent, International Association of Heat and Frost Insulators and Asbestos Workers, Local No. 84, violated Section 8(b)(3) of the Act by failing and refusing to bargain with DST Insulation, Inc. (DST). For the reasons below, we adopt the judge’s findings that the Respondent did not violate the Act and we dismiss the complaint.1
Facts
DST is a construction insulation contractor. On January 23, 2002, DST accepted the terms of, and agreed to be bound to, a multiemployer master agreement between the Respondent and Master Insulators’ Association of Akron, Ohio, and Builders Association of Eastern Ohio & Western Pennsylvania (the Associations), effective from July 1, 2001 to June 30, 2004. This created an 8(f) relationship between DST and the Respondent.
On March 19, 2004, pursuant to the contract renewal and termination provisions of the master agreement,2 DST, through its president, Skip Karl, notified the Respondent that “(d)ue to lack of support from Union people and the other Contractors following there (sic) own rules I will not be signing any new Contracts on or some time before July 1st, 2004.”3
Thereafter, the Respondent and the Associations entered into a successor master agreement with an effective term from July 7, 2004 to June 30, 2008. DST did not participate in negotiations for that agreement and did not sign the agreement. But, as discussed below, DST honored virtually all its terms and, in other respects, evinced an intention to be bound to the 2004–2008 agreement.
On November 11, 2004, the Respondent requested that DST recognize it as the 9(a) representative of DST’s insulation employees. The Respondent informed DST that it could either sign a formal recognition agreement or proceed to a Board election, and indicated a preference for the former. DST declined to execute the recognition agreement. The Respondent then filed a representation petition and, pursuant to an election held on March 25, 2005, the Respondent was certified on April 4, 2005 as the 9(a) representative of DST’s insulation employees.4
Following the certification, DST sought to negotiate a bargaining agreement with the Respondent. Karl testified that he made several calls to the Respondent beginning in April 2005 and left messages indicating a desire to bargain for a contract, but that the Respondent did not return his calls and nothing “concrete” developed. The Respondent contends that DST and the Respondent are presently contractually bound to the 2004–2008 contract (the new master agreement), that DST employs union members in accordance with the new master agreement, and that the Respondent has no duty to bargain for another contract.
Discussion
The Board has long held that a binding agreement may be formed even when the parties have not reduced to writing their intent to be bound. Haberman Construction Co., 236 NLRB 79, 85–86 (1978), enfd. 641 F.2d 351 (5th Cir. 1981). The inquiry is whether the party at issue has engaged in a course of conduct that manifests an intention to abide by the terms of the agreement. Whether a particular course of conduct demonstrates adoption of a contract is a question of fact. Arco Electric Co. v. NLRB, 618 F.2d 698 (10th Cir. 1980). This “adoption by conduct” doctrine applies to circumstances, as here, that arise under Section 8(f) of the Act. E.S.P. Concrete Plumbing, 327 NLRB 711 (1999).5
We find that the facts in this case establish that DST adopted by conduct the terms of the 2004–2008 master agreement and, therefore, the Respondent had no duty to bargain over terms of an entirely new contract.
As the judge found, DST engaged in substantial conduct manifesting an intent to be bound to the 2004–2008 master agreement.6 First, DST paid to its employees the new wages rates set forth in the 2004–2008 master agreement. Second, DST made fringe benefit contributions to the fringe benefits funds under the terms of the new agreement. Third, when a dispute arose as to the correct amount of contributions owing to the funds, DST acquiesced to a Stipulated Judgment Entry pursuant to a cause of action brought against it under the 2004–2008 agreement by the benefit funds in the U.S. District Court for the Northern District of Ohio, and paid amounts owing under the agreement. Fourth, DST honored the union-security clause of the contract, and deducted and remitted union dues at the new rates specified in the 2004–2008 master agreement. An obligation to pay dues is permissible only during the existence of a collective-bargaining agreement containing a union-security provision. See the union-security proviso to Section 8(a)(3). Fifth, DST used the Respondent’s exclusive hiring hall to secure employees as a union contractor. Sixth, DST corresponded and met with the Respondent in a manner that was consistent with the status of a union contractor. DST responded to the Respondent’s requests to identify the nonunion contractors that it was competing against and, as required by the 2004–2008 agreement, DST notified the Respondent of impending employee layoffs, and attended union-management meetings open only to union contractors.
Based on all of these circumstances, we find that DST adopted the terms of the 2004–2008 master agreement by its conduct. DST adhered to significant substantive terms of the successor union contract, deliberately held itself out as a union contractor, and obtained the benefits of a union contractor.7 See E.S.P Concrete Plumbing, supra (employer effectively held itself out as a union contractor by obtaining a union work project, acquiesced in a judgment against it for unpaid contributions to a union pension fund, and applied the collective-bargaining agreement to a project);8 Cab Associates, 340 NLRB 1391, 1401–1402 (2003) (adoption by conduct when employer complied with virtually all contract terms, employed union stewards at projects, deducted and remitted union dues, and made full payment to union pension and welfare funds); Marquis Elevator Co., Inc., 217 NLRB 461, 465–466 (1975) (adoption by conduct when employer adhered to terms of bargaining agreement, acquiesced in penalties imposed by the union for performance of unit work by supervisors, made monthly contributions to union funds, and used exclusive union hiring hall); Vin James Plastering Co., 226 NLRB 125 (1976) (adoption by conduct when employer adhered to terms of bargaining agreement, including payments to various benefit funds, and deducted and remitted union dues).
The General Counsel contends that DST did not hold itself
out as a union contractor or otherwise enjoy the benefits of a contractual relationship.
Relying on Marina Concrete Co., 312
NLRB 1103 (1993), the General Counsel
argues that DST was privileged to make unilateral changes after the expiration
of the 2001–2004 agreement and that its voluntary compliance with certain terms
of the expired contract and the 2004–2008 agreement did not bind it to the
latter agreement. However, that case is
distinguishable. The employer in
The dissent asserts that DST’s initial statement of March 19, 2004, tends to show that DST did not manifest an intention to be contractually bound. According to the dissent, this statement, although one of “evident inartfulness,” sheds light on the meaning of the DST’s subsequent conduct. We agree that the March 19 statement was “inartful” and, therefore, we look to DST’s overall conduct to discern the meaning of its intent. That conduct, as the dissent concedes, was DST’s adherence for many months to substantive terms of the successor contract, without deviation. And that longstanding conduct is plainly inconsistent with the notion that DST acted as a nonunion contractor that was not contractually bound. Even assuming arguendo that DST, on March 19, 2004, did not then intend to be bound to a contract to succeed the one expiring on June 30, DST’s conduct after June 30 shows that it did bind itself to the successor contract.
The dissent would have us find that DST was actually a nonunion contractor, without any contractual obligation, which only “voluntarily” honored the union-security provision—with no contractual basis. But, as mentioned above, to do so would place it in legal jeopardy. In addition, DST paid fringe benefit contributions to the appropriate union benefit funds, another manifestation of an employer who is acting as a contractually bound union contractor. DST also adhered to contractual wage rates. It took advantage of the Respondent’s hiring hall, exclusive to union contractors, to secure a work force. It informed the Respondent of DST’s nonunion competitors without claiming to itself be a nonunion contractor itself. It assented to its contractual obligations by entering into a consent judgment in federal court.
Our precedent, cited above, has long considered this course of conduct as compelling evidence that a party has manifested an intention to be contractually bound. Yet the dissent does not adequately distinguish these cases nor does it give sufficient weight to the many ways that DST manifested its intent to hold itself out as a union contractor, contractually bound. In these circumstances, we are not persuaded by the dissent’s reliance on DST’s March 19, 2004 “inartful” statement.
The dissent asserts that the Respondent did not actually believe that DST had adopted the contract by conduct. To the extent that such a belief would be relevant, a review of the evidence refutes that assertion. The Respondent’s business agent, Reth, testified that DST adhered to all of the above-noted contractual terms and that DST never claimed that it was not contractually bound. By letter of November 11, 2004, the Respondent requested that DST sign a 9(a) recognition agreement. Of course, a union that is party to an 8(f) contract can seek to become the 9(a) representative without negating the contract itself. At the hearing, Reth testified that he could not speculate about DST’s reasons for declining to recognize the Respondent as a 9(a) representative at that time. Reth testified further that perhaps DST was trying to have it both ways—that it wanted to be both union and nonunion. In context, it appears that Reth was referring to what, in his eyes, was the change from 8(f) to 9(a) status. In any event, there can be no doubt that the Respondent viewed DST as contractually bound at the time of the November 11 letter. We know that, because the Respondent stated in that letter that the terms of a 9 (a) relationship “will simply be our current Collective Bargaining Agreement” after the recognition agreement is signed, i.e. there was nothing more to bargain.
Our dissenting colleague points to the Respondent’s cover letter accompanying its election petition of January 31, 2005. Concededly, that letter refers to DST as an employer who was “formerly” bound to an 8(f) contract. Of course, that statement was true. DST was formerly bound to the 8(f) contract for 2001–2004. The issue in the instant case is whether DST was bound to the 2004–2008 contract, which the Respondent wished to convert to a 9(a) contract. As to that contract, the Respondent noted that DST was employing union members in accordance with the evergreen provision of the 2001–2004 contract. At the time, the Respondent maintained that DST had not provided timely notice to terminate and that the 2001–2004 contract had renewed itself. Whatever the merits of that position, it cannot detract from the point that, in fact, DST had bound itself to the new contract. For example, its wages and benefits reflected those in the new contract.
The dissent further contends that DST’s insistence on negotiating new contractual terms in April and June 2005, after the Respondent prevailed in a 9(a) election, shows that DST never manifested an intention to be bound in the first place. But, in our view, the practical effect of the election and certification was to have DST acknowledge directly, as a 9(a) contractor, what it had manifested by its conduct all along—that it was holding itself out as a union contractor that was contractually bound and receiving all the benefits that this may have entailed. That DST—so late in the game—belatedly sought to negotiate new terms does not establish the absence of a previous manifestation of assent through its prior unwavering conduct. In essence, DST’s insistence on new bargaining is simply the reflection of its erroneous view, repeated here, that there was no contract.
Finally, we disagree with the dissent’s claim that DST’s July 19, 2005 stipulation to the entry of a court judgment for contributions owed to union benefit funds cannot support the Respondent’s adoption-by-conduct argument, because DST earlier requested bargaining. Instead, as noted above, we find persuasive that the stipulation was pursuant to a cause of action brought against it under the 2004–2008 agreement. In our view, DST’s acquiescence to the Stipulated Judgment Entry indicated its belief that it was bound to that current contract.
Because we find that the Respondent permissibly took the position that DST was already contractually bound, we find that the Respondent did not violate Section 8(b)(3) when it declined DST’s request to bargain for a new contract. Accordingly, we shall dismiss the complaint.
ORDER
The complaint is dismissed.
Dated,
Robert J. Battista, Chairman
Wilma B. Liebman, Member
(seal) National
Labor Relations Board
Member Kirsanow, dissenting.
I find that the Respondent International Association of
Heat and Frost Insulators and Asbestos Workers, Local No. 84 (Union) violated
Section 8(b)(3) of the Act as alleged by declining to bargain with DST Insulation,
Inc. (DST). Unlike the majority, I find
that DST did not adopt by conduct the 2004–2008 agreement (the “current
agreement”) between the
My colleagues summarize DST conduct arguably favoring their finding. They give short shrift, however, to DST statements that militate against adoption by conduct. Foremost among these is the March 19, 2004 notice sent to the Union by Skip Karl, president of DST, in which Karl stated: “Due to lack of support from Union people and the other Contractors following there [sic] own rules I will not be signing any new Contracts on or some time before July 1st, 2004.” The contract in place at the time Karl sent this notice had a termination date of June 30, 2004. Thus, Karl’s notice conveyed his clear intent not to enter into any contract succeeding that one.
My colleagues note that Karl stated that he “would not sign a new contract on or before July 1, 2004” but “did not address . . . the issue of contract coverage after July 1, 2004” (emphasis added). In my view, this parsing of Karl’s language is at odds with its evident inartfulness. The plain-enough meaning of Karl’s statement was that he anticipated that a successor agreement (“new Contracts”) would be available for signature before the expiration date of the 2001–2004 agreement (the “predecessor agreement”) on June 30, 2004, and that DST had no intention of signing any such agreement, i.e., no intention of ever being bound by it “[d]ue to lack of support from Union people and the other Contractors following [their] own rules.”
So understood, Karl’s statement puts DST’s subsequent
adherence to particular terms of the current agreement in a different
light. Did that adherence signify that
Karl had changed his mind? The
Reth’s testimony is not the only indication that the
The
But, as stated above, the
DST also stipulated to entry of a court judgment concerning
contributions owed to union benefit funds.
But that happened on July 19, 2005—3 months after Karl’s first bargaining request, and more than a month after
his second request. Thus, DST’s July 19
stipulation cannot furnish adoption-by-conduct grounds justifying the
The majority suggests that it would be inequitable not to
find adoption by conduct here, quoting the Supreme Court’s statement in Jeff McNeff, Inc. v. Todd, 461 U.S. 260,
271 (1983), that “[n]othing in the legislative history of Section 8(f)
indicates that Congress intended employers to obtain free the benefits of
stable labor costs, labor peace, and the use of the union hiring hall. Having had the music, he must pay the
piper.” In Jeff McNeff, however, the employer entered into an 8(f) agreement
and then failed to make contractually required fringe benefit fund
contributions. In other words, that
employer did fail to “pay the piper.”
Here, by contrast, DST paid
the piper, and the piper then relied on those very payments to refuse to
bargain and to assert adoption by conduct.
Neither is DST, as the majority suggests, seeking to “secure all the
benefits of labor stability without any corresponding obligations.” DST has acknowledged its obligation to
bargain with the
In sum, viewed as a whole, DST’s conduct did not evince an
intent to be bound to the current agreement.
DST contradicted such an intent repeatedly: in March 2004 when it gave notice that it
would not sign the current agreement, in April 2005 when it sought bargaining
following the
Dated,
Peter N. Kirsanow, Member
National Labor Relations Board
Iva Y. Choe, Esq., for the General Counsel.
William D. Brady, Esq. and Joseph Allotta, Esq. (Allotta, Farley & Widman Co., LPA), of
DECISION
Statement of the Case
Karl H. Buschmann, Administrative Law Judge.
This case was tried in
On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs filed by the General Counsel and the Respondent, I make the following
Findings of Fact
i. jurisdiction
DST Insulation, Inc., a corporation, engaged in
the business of insulation contracting services at its facility in
ii. alleged unfair labor practices
The Union and DST International, Inc. (DST) have had a bargaining relationship pursuant to Section 8(f) of the Act since January 23, 2002, when DST executed an agreement accepting the terms and conditions of the collective-bargaining agreement, effective July 1, 2001 to June 30, 2004, between Master Insulators’ Association of Akron, Ohio, and Builders Association, as well as Local Union No. 84 (Jt. Exhs. 1, 2). When the 2001 agreement expired, a new agreement became effective from July 7, 2004 to June 30, 2008, between Master Insulators’ Association, the Builders Association and Local 84 (Jt. Exh. 3). The parties disagree as to whether DST became a party to the new “2004 agreement.”
ii. alleged unfair labor practices
The Union and DST International, Inc. (DST) have had a bargaining relationship pursuant to Section 8(f) of the Act since January 23, 2002, when DST executed an agreement accepting the terms and conditions of the collective-bargaining agreement, effective July 1, 2001 to June 30, 2004, between Master Insulators’ Association of Akron, Ohio, and the Builders Association as well as Local Union No. 84 (Jt. Exh. 3). The parties disagree to whether DST became a party to the new “2004 agreement.”
The Company maintains that on March 19, 2004, it
notified the
Due to lack of support from
Karl’s testimony was supported by a certificate of mailing showing that DST had proof of a mailing to Local 84 (GC Exhs. 4, 5). The Union denies ever receiving any communication to that effect from the Company, Rollin Reth, business manager for Local 84, testified that the Union did not have such a letter in its files and that he personally was unaware of such a communication from DST until the current controversy. In any case, DST did not sign a new agreement, it did not participate in the negotiations leading up to the 2004 agreement, but it complied with all the substantive terms of the new agreement.
By letter of November
11, 2004, the
All full-time and part-time insulation
installers and fabricators, including journeymen, apprentice and improvers employed
by the Employer from its residential office at
DST’s president Karl testified that he had left several messages with Local 84 requesting that the parties negotiate a contract.
The General Counsel argues that DST effectively terminated the July 1, 2001 to June 30, 2004 contract by letter of March 19, 2004, that DST did not become a party to the new contract, effective July 7, 2004 until June 30, 2008, and that the Union refused to bargain in good faith with DST. The Respondent argues that DST never properly terminated the collective-bargaining agreement which expired on June 30, 2004, and was still bound by it, that it failed to show unconditional and unequivocal intent to withdraw from the multiemployer bargaining unit and by its conduct in conformity with the current bargaining agreement is bound by it, and that the conversion from an 8(f) relationship to a 9(A) relationship had no effect on the agreements.
Analysis
Initially I find Karl’s testimony, supported by
other evidence, credible that DST had sent the letter, dated March 19, 2004 to
the Respondent. The letter informed the
However, the Company’s message of March 19, 2004 was not a clear or unequivocal repudiation of the existing bargaining agreement, nor did it in clear and unmistakenable language inform the Union that the Company no longer recognized the Union as the employees’ bargaining representative, it merely stated that the Employer did not intend to sign a new agreement. Arguably, DST remained obligated to abide by the terms and conditions of the expired contract.
In the meantime, the Respondent adhered to the
terms of the new collective-bargaining agreement, even though DST did not
participate in the negotiations for a successor agreement. According to the
Respondent, Karl also had not formally resigned from the multiemployer unit but
displayed a continued involvement with it. For example, the
I agree with the Respondent that the overwhelming
evidence shows that DST has complied with all aspects of the 2004 agreement. In
accordance with the new agreement, DST: (1) in December 2004, paid all relevant
fringe benefits as outlined in the Union’s letter of August 19, 2004, (2)
withheld the 7.5 percent union dues, an increase from the 5 percent in the
expired contract, (3) used the exclusive referral procedures, including the
Union’s out of work list, (4) informed the Union of impending layoffs and
disclosed to the Union its bids on nonunion construction jobs. In addition, the
Company’s president attended the
The General Counsel has not disputed any of
these contentions, stating that DST was privileged to make unilateral changes
following the expiration of the 2001 agreement not chose to follow the wage and
fringe benefit increases detailed in the 2004 agreement. The General Counsel
referred to Karl’s testimony that his reason for complying with the 2004 agreement
“was trying to keep up some sort of working communication with the Local to see
if we could work this out before it got this far” (Tr. 115). Relying on the
Board’s decision in Plasterers Local 337
(Marina Concrete), 312 NLRB 1103 (1993), the General Counsel argues that
DST which lawfully terminated its bargaining obligation to the Union, had the
right to comply with the terms of the contract without incurring any
contractual obligations and without any inference of an adoption-by-conduct.
The employer in that case, however, had informed the
Here, the Company’s President merely informed
the Union that it would not sign any new contracts, but left open the questions
whether he would continue to abide by the terms of the expired contract,
whether he considered himself to be a member of the Masters Insulator’s
Association and whether the relationship with the
Under these circumstances, I find that DST is
bound by the 2004 agreement, and that Karl’s repeated requests to bargain with
the
Based on these findings of fact and conclusions of law and on the entire record, I issue the following recommended2
ORDER
The complaint is dismissed.
Dated,