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, Washington, D.C.  20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.

Hempstead Lincoln Mercury Motors Corp.  and Local 917, International Brotherhood of Teamsters.  Case 29–CA–27601

December  20, 2007, 2007

DECISION AND ORDER

By Members Schaumber, Kirsanow, and Walsh

On August 9, 2007, Administrative Law Judge Joel P. Biblowitz issued the attached decision.  The Charging Party filed exceptions and a supporting brief, and the Respondent filed an answering brief.

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 decided to affirm the judge’s rulings, findings,1 and conclusions and to adopt the recommended Order.

ORDER

The recommended Order of the administrative law judge is adopted, and the complaint is dismissed.

 

 

 

 

 

   Dated, Washington, D.C.    December  20, 2007

 

 

 


Peter C. Schaumber,                       Member

 

 


Peter N. Kirsanow,                          Member

 

 


Dennis P. Walsh,                         Member

 

(seal)          National Labor Relations Board

 

 

Sharon Chau, Esq., for the General Counsel.

Richard Milman, Esq, (Marshall M. Miller Associates, Inc.), for the Respondent.

Gene Szuflita, Esq. (Belson & Szuflita), for the Charging Party.

DECISION

Statement of the Case

Joel P. Biblowitz, Administrative Law Judge. This case was heard by me on June 27, 2007, in Brooklyn, New York. The cmplaint , which issued on September 28, 2006, and was based upon an unfair labor practice charge that was filed on April 24, 2006, by Local 917, International Brotherhood of Teamsters (the Union), alleges that since in about December 2005,[1] Hempstead Lincoln Mercury Motors Corp. (the Respondent), failed and refused to tender increased payments to the Local 917 Pension Fund (the Fund), in accordance with the request of the Fund, or to set aside the payment previously made or to put the payments into an escrow or similar account, and did so without prior notice to the Union and without affording the Union an opportunity to bargain about the subject. It is alleged that by this activity, the Respondent violated Section 8(a)(1)(5) of the Act (the Act).

Findings of Fact

i. jurisdiction

Respondent admits, and I find, that it has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

ii. labor organization status

Respondent admits, and I find, that the Union has been a labor organization within the meaning of Section 2(5) of the Act.

iii. the facts

There is little dispute of the facts. The Union is the exclusive collective-bargaining representative for the Respondent’s service employees, including its used car department employees. The last collective-bargaining agreement between the parties was effective for the period November 1, 1998 to October 31, 2001. At the expiration of this agreement the parties executed a memorandum of agreement on October 30, 2001, extending the agreement to October 31, 2004, with changes in three areas: wages and health and welfare, not relevant, and pensions, providing that effective November 1, 2001, there would be a moratorium on pension contributions; effective November 1, 2002, the Respondent would resume contributions at the rate prior to the moratorium, $175 monthly for each unit employee, and effective November 1, 2003, there would be a $50 monthly increase in the contribution rate. Pursuant to these agreements, beginning in November 2002, the Respondent transmitted to the Fund $175 for each unit employee, and beginning in November 2003, transmitted to the Fund $225 for each unit employee. Although the parties were unable to agree on terms of a successor agreement to replace the memorandum of agreement that expired on October 31, 2004, the Respondent continued to transmit to the Fund $225 for each of the unit employees through November.

The Fund, by its board of trustees, sent a letter dated August 22 to all of its contributing employers, including the Respondent, stating, inter alia:

 

As you are aware, due to the poor investment markets and low interest rates over the past number of years, corporate, public and multi-employer pension plans throughout the United States are facing significant funding difficulties. Unfortunately, Local 917 Pension Fund’s (“Fund”) assets have not been able to keep pace with the Funds benefit liabilities.

The Fund needs a substantial contribution rate increase and future benefit accrual reductions in order to avoid a minimum funding deficiency under ERISA. The Trustees have taken the following action to avoid the funding deficiency…

The Fund requires a contribution rate increase of 20% from all contributing employers, effective as of November 1, 2005 in order to avoid a funding deficiency…Any employer who fails or refuses to pay this increase will be expelled from the Fund and be subject to withdrawal liability.

We will keep you informed regarding future developments. If you have any question about these changes, please contact the Fund office.

 

In November the Fund submitted its monthly health and pension report to the Respondent stating that the amount of $225 was due to the Fund for each bargaining unit employee for the month of October. For 20 covered employees the amount due was $4500 and the Respondent paid this amount to the Fund on about November 4. On December 2, the Fund submitted a remittance form for the month of November to the Respondent setting forth an amount of $270 due to the Fund for each of the 20 unit employees. This represented the 20-percent increase referred to in the August 22 letter. On December 8, the Respondent sent a check to the Fund in the amount of $4500, i.e., $225 per covered employee, to cover its 20 bargaining unit employees. By letter dated December 21, Joann Emmons, the fund manager, wrote to the Respondent:

 

We recently received your November pension contribution. As you are aware, the Board of Trustees directed an increase in the required contribution rate effective November 1, 2005, in order to improve funding of the plan.

 

You have failed to pay the increased rate. We are therefore returning your check to you. If you fail to pay the new rate on or before January 4, 2006, effective November 1, 2005, you will cease to be a contributing employer and you will be considered withdrawn from the Fund and you will be assessed withdrawal liability. [Emphasis supplied.]

 

The Respondent never paid the increased amount requested, and by letter dated January 26, 2006, Emmons notified the Respondent that, effective October 31, it ceased participating in the Fund and that it would be subject to withdrawal liability. On February 14, 2006, Emmons wrote to the Respondent stating that its withdrawal liability to the Fund was $349,300, to be paid in 20 quarterly installments of $19,312.50 and a final payment of $19,157.85. By letter dated February 9, 2006, counsel for the Respondent wrote to counsel for the Union requesting certain information regarding the Pension Fund. By letter dated February 17, 2006, Emmons provided counsel with some of the requested information, and stated that he was not entitled to other of the information requested.

Union President John Vacca and Respondent’s president, John Billard, each testified about discussions that they had regarding the proposed increase in the Pension Fund contributions. Vacca testified that in about September, Billard asked him about the increase, and Vacca told him that the 20-percent increase was needed because of the Fund’s financial difficulties. Billard asked him how much the increase would be, and Vacca said that he would provide him with the numbers, and a few weeks later, he provided Billard with this information. Vacca testified that at no time prior to December 1 did Billard, or any representative of the Respondent, tell him that the Respondent would not pay the additional 20-percent increase to the Fund, nor did any representative of the Respondent ask the Union to bargain over the effects of not paying the 20-percent increase. He further testified that to his knowledge, the Respondent never set aside any escrow or other account to cover these payments. Billard, whom I found to be a credible and believable witness, testified that prior to the August 22 letter, the Union never notified him of this increase in Pension Fund contributions, and that after receiving this letter he had numerous conversations with Vacca about the increase. Vacca told him that the Fund was under funded and that they had no choice. He told Vacca that the Respondent was not in a position to pay any more money: “We have a contract; why should we pay more money?” Vacca responded that it was a Federal law and they had to pay. He also testified that during this post August 22 period he told Vacca that they couldn’t afford the increase and asked if there was a way to work around it. Vacca said that there wasn’t: “You’re in or you’re out.” Billard also asked Vacca for concessions, but Vacca refused to give any. He never told Vacca during any of these conversations that the Respondent would not pay the 20-percent increase to the Fund.

iv. analysis

Counsel for the General Counsel stated that she is not alleging that the Respondent violated the Act herein by failing to include the 20-percent increase in its Fund payment on December 8. Rather, the alleged violation herein is that the Respondent failed to tender the increased payments to the Fund, or to set aside the amount due into an escrow or similar account, without prior notice to the Union and without affording the Union an opportunity to bargain about the subject.

The agreement that was effective from 1998 through 2001 provided for the precise amount of contributions that the Respondent was to pay to the Fund for each unit employee. The memorandum of agreement that was effective from 2001 through 2004 provided for a moratorium on payments to the Fund from November 2001 through November 2002, and after that the Respondent would resume making the contributions in effect prior to the moratorium, and effective November 2003, the Respondent would contribute to the Fund the sum of $225 for each unit employee. Neither the 1998 contract, nor the 2001 memorandum of agreement contain a savings clause that permits the Union or the Fund to unilaterally raise the amount of the employers’ contributions. The evidence establishes that throughout the period in question, and up to and including December, the Respondent made the contributions to the Fund as provided for in the contract and the memorandum of agreement. It is difficult to understand counsel for the General Counsel’s theory of a violation that would require the Respondent to give prior notice to, or bargain with the Union, prior to making its payment to the Fund when the Respondent had made no change in the terms and conditions of employment of its employees and was simply following the provisions of the 1998 collective-bargaining agreement and the 2001 memorandum of agreement. Further, the credited testimony of Billard establishes that after the Union notified him about the increase in the Fund payments, he told Vacca that the Respondent could not afford to pay the increase and asked the Union for concessions and whether there was anything else that the Respondent could do in lieu of the increased payments, thus establishing that the Respondent was attempting to bargain with the Union about the increased Fund payments.

Although I can certainly understand the concerns of the Union that the Fund was under funded, and while it may be that there is a proper venue for the Fund to recover the additional payments from the Respondent, this is not the proper venue. I therefore find that counsel for the General Counsel has failed to establish that the Respondent violated Section 8(a)(1)(5) of the Act, and recommend that the complaint be dismissed.

Conclusions of Law

1. The Respondent has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

2. The Union has been a labor organization within the meaning of Section 2(5) of the Act.

3. The Respondent did not violate Section 8(a)(1)(5) of the Act as alleged in the complaint.

On these findings of fact, conclusions of law and based upon the entire record, I hereby issue the following recommended[2]

ORDER

It is recommended that the complaint be dismissed in its entirety.

Dated, Washington, D.C., August 9, 2007

 


1  The Charging Party has implicitly excepted to some of the judge’s credibility findings.  The Board’s established policy is not to overrule an administrative law judge’s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect.  Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951).  We have carefully examined the record and find no basis for reversing the findings.

The judge properly found that the Respondent did not violate the Act as alleged in the complaint.  Contrary to the complaint allegations, the Respondent fulfilled its contractual obligations to the Union when it tendered its contributions—minus the requested increases—to the Pension Fund.  The most recent extension of the contract, which the parties continued in effect during the relevant events here, required only that the Respondent pay a predetermined amount of money per employee to the Pension Fund.  It is undisputed that the Respondent tendered these amounts to the Pension Fund.  However, the Pension Fund refused to accept the Respondent’s contributions because the Fund’s trustees had increased the required contributions for employers to remain in the Fund, and would not accept any amounts that did not reflect the increase.  The Respondent was not obligated by its contract with the Union to abide by such an increase, and thus, as found, was in full compliance with that agreement, i.e., it fulfilled its pension obligations under the expired collective-bargaining agreement.  In addition, the Respondent attempted to bargain with the Union about the trustees’ demand for increased fund payments.  Therefore, we find that the Respondent did not violate Sec. 8(a)(5) and (1) of the Act as alleged by the complaint.  See Richmond Homes, 245 NLRB 1205 (1979).

[1]  Unless indicated otherwise, all dates referred to relate to the year 2005.

[2]  If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all purposes.