NLRB v. Scam Instrument Corporation
| Decision Date | 26 June 1968 |
| Docket Number | No. 16599.,16599. |
| Citation | 394 F.2d 884 |
| Parties | NATIONAL LABOR RELATIONS BOARD, Petitioner, v. The SCAM INSTRUMENT CORPORATION, Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Marcel Mallet-Prevost, Asst. Gen. Counsel, Allison W. Brown, Jr., Burton L. Raimi, Attorneys, N. L. R. B., Washington, D. C., Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, for petitioner.
George L. Plumb, Chicago, Ill., Peer Pedersen, Chicago, Ill., for respondent; Pedersen & Houpt, Chicago, Ill., of counsel.
Before KNOCH, Senior Circuit Judge, and CASTLE and KILEY, Circuit Judges.
This case is before the Court upon the petition of the National Labor Relations Board to enforce an order of the Board issued on May 8, 1967, against the respondent, The Scam Instrument Corporation. The Board's decision and order are reported at 163 NLRB No. 39.
The Board found and concluded that Scam violated Section 8(a) (5) and (1) of the National Labor Relations Act, as amended, by unilaterally modifying the benefit payment schedule of a group health insurance policy which Scam was required to carry for its employees under its collective bargaining agreement with the Union1 representing the production and maintenance employees in Scam's Skokie, Illinois plant. The Board further concluded that the change in insurance benefits so effected constituted a modification of the collective bargaining agreement in violation of the requirements of Section 8(d) of the Act. The Board's order requires Scam to cease and desist from unilaterally modifying the existing terms and conditions of employment and from unilaterally modifying the collective bargaining agreement without complying with the provisions of Section 8(d). Affirmatively, the order requires Scam to remove, retroactively, the rider modifying the insurance benefits, to make its employees whole for any loss suffered, and to post designated notices.
The record discloses that the collective bargaining agreement between Scam and the Union covering the two year period ending September 1, 1966, contained a provision obligating Scam to maintain during such contract period certain insurance coverage for the employees represented by the Union. The particular coverages and the benefits payable were set forth in an attached schedule. The employee coverage was furnished at Scam's expense, but the monthly cost to an employee for medical and hospital services coverage for dependents was $9.82 for an employee with one family member, and $15.78 for an employee with two or more family members. Except in the case of the "major medical" coverage neither the bargaining agreement nor the insurance policy contained a "nonduplicating" provision allowing the benefits to be reduced by amounts the employee received from coinsurance obtained from other sources. Neither the agreement nor the policy reserved to Scam or its insurance carrier a right to modify the insurance coverage or benefits during the contract period.
In February 1965, without notification to or consultation with the Union, Scam and its insurance carrier agreed to the addition of a rider to the insurance policy. The rider issued in late February. It added a "nonduplicating" provision to the policy applicable to the medical and hospital services benefits. The rider provided for a reduction in the scheduled benefit payment in event a benefit was payable (or the item of hospital or medical service was furnished) because of like coverage of the employee or his dependent under some other group insurance or group benefit system involving participation by an employer in the form of contributions or payroll deductions. It provided like reduction in the scheduled benefit where the other benefit was due to coverage afforded by any statute.
The Union first became aware of the policy change in early May 1965, when a Scam employee reported receiving a reduced insurance payment, and upon investigation a Union representative discovered that the rider had been added to the policy. Scam's personnel manager when questioned about the change promised to investigate and assured that Scam...
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