Delta Sandblasting Company, Inc.

• Decision Date: 16 October 2018
• Docket Number: 32-CA-180490,20-CA-176434
• Parties: Delta Sandblasting Company, Inc. v. International Union of Painters and Allied Trades, District Council 16.
• Court: National Labor Relations Board

Delta Sandblasting Company, Inc. and International Union of Painters and Allied Trades, District Council 16.

Nos. 20-CA-176434, 32-CA-180490

United States of America, National Labor Relations Board

October 16, 2018

DECISION AND ORDER

John F. Ring, Chairman

On September 15, 2017, Administrative Law Judge Mara-Louise Anzalone issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, which the Charging Party Union joined, and the Respondent filed a reply brief. The Union filed cross-exceptions and a supporting brief, the Respondent filed an answering brief, and the Union filed a reply.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.^[1]

The Board has considered the decision and the record in light of the exceptions, cross-exceptions, and briefs and has decided to adopt the judge's rulings, findings, ^[2]and conclusions as modified below, to amend the remedy, and to adopt the judge's recommended Order as modified and set forth in full below.^[3]

This matter arises from the parties' negotiations over a successor contract after their collective-bargaining agreement expired in August 2015. We affirm the judge's finding that the General Counsel failed to establish that a “meeting of the minds” over the terms of a successor contract had been reached. The judge therefore correctly dismissed the allegation that the Respondent violated the Act by refusing to execute a successor contract.^[4] For the reasons stated below, we also affirm the judge's finding that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally reducing its contributions to the employees' pension fund in March 2016 without providing the Union notice and the opportunity to bargain.^[5]

The Respondent performs marine sandblasting and painting services in the San Francisco Bay area, and its unit employees have been represented by the Union for many years. By its terms, Section 18.1 of the parties' 2008-2015 collective-bargaining agreement (the 2008-2015 CBA) required the Respondent to contribute to the Pacific Coast Shipyards Pension Fund (pension fund) at the rate specified in Wage Schedule A. The record shows that in 2007 and 2008, the Respondent contributed to the pension fund at a rate of $1.95 per hour worked per employee. However, in 2008, the pension fund notified the Respondent that the fund had entered critical status as defined by the Pension Protection Act of 2006 (PPA). The PPA requires that a critically underfunded pension fund adopt and implement a rehabilitation plan designed to resolve its underfunding. In accordance with the PPA, the pension fund adopted and implemented a rehabilitation plan that increased pension fund contribution rates. The pension fund then notified contributing employers, including the Respondent, of these increased rates. Section 18.4 of the 2008-2015 CBA states that the Respondent and the Union have the “joint responsibility . . . to instruct the Trustees of the applicable Pension Plans to take appropriate action to eliminate any underfunded liability that currently exists.”

The record does not indicate the rates paid by the Respondent from 2009 to 2013. But the record does show that the Respondent contributed to the pension fund at the rate required under the rehabilitation plan from April 2014 forward, and at the time the 2008-2015 CBA expired on August 31, 2015, the Respondent was contributing to the pension fund at the rate of $9.78 per hour. The Respondent continued to contribute at this rate until January 2016, when it increased its contribution rate to $11.38 per hour. In each case, these were the rates required by the pension fund under its PPA-mandated rehabilitation plan. Moreover, Wage Schedule A for 2014-2015 lists a pension contribution rate of $8.18 per hour, with a planned increase to $9.78 per hour on January 1, 2015. In these circumstances, we affirm the judge's finding that those rates were incorporated into the 2008-2015 CBA.^[6]

In March 2016, the Respondent, without providing the Union with notice or an opportunity to bargain, reduced its pension contribution rate to $1.95 per hour. The Respondent informed the pension fund by letter that it did not “have the money at this time to pay the mandatory (critical status) amount due.” Notably, the Respondent did not assert that it was ceasing making pension fund contributions at the rehabilitation plan rate because it was not required to make them. To the contrary, it admitted in its letter to the pension fund that the “critical status” rate-i.e., the rate required under the rehabilitation plan-was “mandatory.”

The Respondent advances that argument now. It does not dispute that it has an obligation to maintain the status quo of its pension fund contributions while it bargains for a successor contract with the Union. Instead, the Respondent argues that its status quo obligation only requires it to make pension fund contributions at a rate of $1.95 per hour. We reject this contention. As noted above, we have found that the $9.78 per hour rate was incorporated into the parties' agreement and was applicable at the time the agreement expired. Moreover, it is undisputed that the Respondent paid the escalating rehabilitation plan rates both before and after the 2008-2015 CBA expired in August 2015, which further bolsters our conclusion that those rates were incorporated into the parties' agreement and thus were part of the status quo the Respondent was obligated to maintain.^[7] See, e.g., Triple A Fire Protection, Inc., 315 NLRB 409, 414 (1994) (following the expiration of a collective-bargaining agreement, an employer must maintain the status quo of all terms and conditions of employment that constitute mandatory subjects of bargaining until the parties either agree on a new contract or reach an impasse in negotiations), enfd. 136 F.3d 727 (11th Cir. 1998), cert denied 525 U.S. 1067 (1999).^[8]

We reject the Respondent's contention that requiring payment of the rehabilitation plan rates incorporated into Wage Schedule A forces the Respondent to violate Section 302(c)(5)(B) of the Labor Management Relations Act (LMRA).^[9] LMRA Section 302(c)(5)(B) requires that employer payments to an employee trust fund, such as the pension fund here, be made pursuant to “a written agreement” that specifies “the detailed basis on which such payments are to be made.” Although it is not the responsibility of the Board to enforce this provision of the LMRA, neither does the LMRA “bar the Board, in the course of determining whether an unfair labor practice has occurred, from considering arguments concerning Section 302 to the extent they support, or raise a possible defense to, unfair labor practice allegations.” BASF Wyandotte Corp., 274 NLRB 978, 978 (1985), enfd. 798 F.2d 849 (5th Cir. 1986).

We find that the requirements of Section 302 are satisfied on the facts of this case. An employer's obligation to make fringe benefit contributions has “been enforced in a variety of circumstances, absent a signature to a current collective bargaining agreement.” Bricklayers Local 21 of Illinois Apprenticeship and Training Program v. Banner Restoration Inc., 385 F.3d 761, 770 (7th Cir. 2004), cert. denied 544 U.S. 999 (2005). Indeed, “the Board has consistently held that an expired contract, under which the obligation to make payments to the fringe benefit funds arose, is sufficient to meet the ‘written agreement' requirement of Section 302(c)(5)(B).” Concord Metal, Inc., 298 NLRB 1096, 1096 (1990). The Board and courts have also noted that compliance with Section 302(c)(5)(B) may derive from sources other than a collective-bargaining agreement. See Hen House Market No. 3 v. NLRB, 428 F.2d 133, 139 (8th Cir. 1970) (“A trust fund agreement separate and apart from the collective bargaining agreement would surely satisfy the statutory prerequisite.”). The LMRA requires “merely a writing detailing the bases on which the contributor's payments are to be made on behalf of the employees.” Richmond Homes, 245 NLRB 1205, 1213 (1979). Furthermore, multiple documents may be read together to meet the requirements of the LMRA. Id. Thus, a collective-bargaining agreement that references a trust agreement setting forth the detailed basis on which payments are to be made satisfies the requirements of the LMRA. Carpenters St. Louis Council (Ficken Construction), 276 NLRB 682, 692 (1985).

Hen House Market No. 3 provides guidance for the matter at hand. There, the Eighth Circuit found that the requirements of Section 302(c)(5)(B) were satisfied by references to the trust fund agreements within the expired collective-bargaining agreement, where the employer had made payments pursuant to the trust fund agreements. Similarly here, the rehabilitation plan rates were incorporated into the expired agreement via Wage Schedule A and Section 18.4, and the Respondent made contributions for at least 2 years at those rates. Thus, as in Hen House Market No. 3, the Respondent “certainly agreed” to the rehabilitation plan rates “not only because they are incorporated by reference into the collective bargaining contract itself, but also because [it] made contributions” pursuant to the rehabilitation plan's terms. Hen House Market No. 3 v. NLRB, 428 F.2d at 139. The expired 2008-2015 CBA, by recognizing the parties' obligation to eliminate underfunding and by incorporating the plan's rates in Schedule A, satisfies Section 302(c)(5)(B)'s requirement for a “detailed basis . . . specified in a written agreement.”

Moreover, it is undisputed that the rehabilitation plan rates were validly adopted and implemented by the pension fund pursuant to the PPA. The courts do not appear to have considered the interplay between LMRA Section 302 and the PPA to date. However, the PPA specifically authorizes pension plans to impose...