NLRB v. Swift Adhesives ( 1997 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 96-2904
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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. *
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Submitted: February 14, 1997
Filed: April 14, 1997
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Before BOWMAN and WOLLMAN, Circuit Judges, and KOPF,1 District
Judge.
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WOLLMAN, Circuit Judge.
The National Labor Relations Board (Board) found that Swift Adhesives
(Swift) violated sections 8(a)(1) & 8(a)(3) of the National Labor Relations
Act (the Act), 29 U.S.C. §§ 158(a)(1) & (a)(3), by withholding accrued
vacation benefits of former employees who were terminated following their
participation in a strike in the fall of 1993. The Board ordered Swift to
pay the accrued vacation benefits. We grant the Board’s petition for
enforcement of the order.
1
The HONORABLE RICHARD G. KOPF, United States District Judge
for the District of Nebraska, sitting by designation.
I.
Under the terms of the collective bargaining agreement in effect
during pre-strike 1993, employees who had been employed 196 calendar days
were eligible for vacation benefits. Vacation was to be taken the
following calendar year, but employees terminated for any reason could
receive the vacation benefits for which they had become eligible. This
agreement expired on September 30, 1993, and the employees began a strike
on October 1, 1993, after negotiations reached impasse. All striking
employees had become eligible for benefits under the expired agreement
prior to the strike.
On January 4, 1994, the Union2 requested that Swift pay the striking
employees for their earned vacation days. Swift refused to pay unless the
employee had actually worked 196 days in 1993, asserting that the 196
actual-days-worked requirement was part of Swift’s final offer after
impasse and was therefore the relevant governing term. Accordingly, Swift
paid vacation benefits to seven employees who had actually worked 196 days
in 1993, but denied vacation pay to fifteen employees who had been employed
for, but had not actually worked, 196 days.
A hearing was held before an administrative law judge (ALJ), who
determined that Swift had violated the Act by refusing to pay the
accumulated vacation benefits. The Board affirmed, finding that the
employees had accrued vacation benefits, that the denial of those benefits
was a direct result of the strike, and that Swift had failed to establish
a legitimate and substantial business reason for denying the accrued
vacation benefits.
2
United Food & Commercial Workers Union, Local 576.
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II.
We review the Board’s order with great deference and will enforce the
order if the Board correctly applied the law and if its findings of fact
are supported by substantial evidence on the record as a whole. See Town
& Country Elec., Inc. v. NLRB, 106 F.3d 816, 819 (8th Cir. 1997); Universal
Camera Corp. v. NLRB, 340 U.S. 474, 490-91 (1951); 29 U.S.C. § 160(e).
The Supreme Court has outlined the framework 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 discriminatory conduct which could
have adversely affected employee rights to some extent.” NLRB v. Great
Dane Trailers, Inc., 388 U.S. 26, 34 (1967). Once this has been proved,
the employer must establish “legitimate objectives” for taking the
complained-of action. See id.
An employer’s discriminatory conduct can be shown by establishing
that the employees’ benefits were accrued and that the denial of payment
was apparently based on the employees’ participation in a strike. See
Texaco, Inc., 285 N.L.R.B. 241, 245 (1987). Benefits are accured if they
were “‘due 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 196
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 they
had become eligible. These facts constitute substantial evidence
supporting the Board’s conclusion
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that the vacation benefits were due and payable. See Great Dane, 388 U.S.
at 32 (vacation benefits were accrued because employees met conditions
specified in expired employment contract, despite fact employees were
striking on date benefits could be claimed).
Likewise, substantial evidence supports the Board’s conclusion that
Swift’s denial of accrued vacation benefits was apparently based on the
employees’ participation in the strike. When all employees strike, as
here, discrimination against striking employees lies in a difference in
treatment 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 died before the strike they
would have been entitled to their vacation pay.
Swift’s action could adversely affect the employees’ rights. Its
conduct, when “considered from a common sense point of view, is bound to
have a discouraging effect on present and future concerted activities,” for
the consequence is that employees cannot strike without placing their
accrued vacation pay in jeopardy. See id. at 559; see also Great Dane, 388
U.S. at 32 (“There is little question but that the result of [a] company’s
refusal to pay vacation benefits to strikers [is] discrimination in its
simplest form.”).3
The Board rejected Swift’s explanation that it was entitled to
unilaterally assert new terms regarding the accrued vacation benefits once
negotiations reached impasse. The Board concluded that already-accrued
vacation benefits were a non-mandatory subject
3
Swift argues that the fact that it paid vacation pay to the
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.
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of bargaining for which 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 terms
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.
See R.E. Dietz Co., 311 N.L.R.B. 1259, 1266 (1993). The Board’s
determination of the non-mandatory nature of accrued benefits “has
reasonable basis in law and is not inconsistent with the structure of the
Act.” LaTrobe 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, 497
(1979)). Thus, the Board did not misapply the law in determining that
Swift’s right to impose terms relating to mandatory 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 benefits
justified its action. Although this purported justification might
constitute a legitimate reason for changing the vacation benefits policy
prospectively, it fails to justify denying benefits already accrued. Thus,
the Board did not err in finding that Swift had failed to show that its
denial of vacation benefits was based on a legitimate business objective.
The Board’s order is enforced.
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A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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