NLRB Cases Archive 1960 - 1995, LABOR-RELATIONS 1993-94 CCH-NLRB ¶15,590, NOEL FOODS DIVISION OF THE NOEL CORPORATION and GENERAL TEAMSTERS LOCAL 524, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO., (Dec. 16, 1994), National Labor Relations Board, (Dec 16, 1994)

NOEL FOODS DIVISION OF THE NOEL CORPORATION and GENERAL TEAMSTERS LOCAL 524, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO.

315 NLRB No. 131.Case Nos. 19-CA-21094 and -21330. December 16, 1994 David G. Heilbrun, Administrative Law Judge..

Before Gould, Stephens and Devaney.

James C. Sand, for General Counsel. Gary E. Lofland (Lofland & Associates), Yakima, Washington, for Respondent. Kenneth Pedersen (Davies, Roberts & Reid), Seattle, Washington, for Charging Party. [1]

Threats--Job Security--Replacement of Strikers.--By informing employees that they would be permanently replaced if they went on strike and that permanent replacements had been hired, an employer interfered with its employees’ right to engage in protected activity. In fact, the employer had not obtained permanent replacements for all strikers, and it effectively terminated those employees who heard the threat but, nonetheless, joined the strike. Section 8(a)(1).

Back reference: ¶3770.567.

Discharges--Forced Quit--Nonunion Operation.--By informing an employee that it was operating nonunion, with the result that he quit his employment, an employer constructively discharged the employee based upon his union affiliation. The employer effectively forced the employee to choose between working and retaining his union representation. Section 8(a)(3).

Back reference: ¶4075.2301.

Unilateral Changes by Employer--Work Conditions--Final Offer Before Impasse.--By unilaterally changing terms and conditions of employment of its bargaining unit employees, without first bargaining to a valid impasse with a union, an employer violated its bargaining duty. Although negotiations between the union and employer were foundering at the time the employer implemented its final offer, there did not exist a genuine impasse because the breakdown in negotiations was proximately caused by the employer’s serious unfair labor practices. Section 8(a)(5).

Back reference: ¶3120.10.

From Text of Board’s Decision

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, [2] and conclusions only to the extent consistent with this Decision and Order.

The issues before us concern certain alegedly unlawful actions taken by the Respondent in response to an economic strike called by the Union and engaged in by approximately 50 employees. The complaint alleges that the Respondent effectively discharged numerous employees, in violation of Section 8(a)(3) and (1) of the Act, when several of its supervisors informed them that if they close to strike they would be permanently replaced, in effect as soon as they began to withold their services, even though the Respondent had not obtained permanent replacements for all the potential strikers at the time the statements were made. The complaint also alleges that the Respondent constructively discharged many of the employees, again in violation of Section 8(a)(3) and (1), by informing them that the Respondent would become, or had become, “nonunion” when the strike commenced. The complaint further alleges that, because of the numerous unlawful discharges, the Respondent did not bargain to a lawful impasse and consequently violated Section 8(a)(5) and (1) by unilaterally implementing the terms of its final bargaining proposal some 2 weeks after the strike had begun. Finally, the complaint alleges that the Respondent violated Section 8(a)(3) and (1) by refusing to pay strikers accrued vacation pay unless they resigned, while continuing to pay vacation benefits to nonstrikers.

The judge found that the Respondent did not violate the Act in any respect. [3] The General Counsel has excepted, and contends that each of the alleged violations should be found. For the reasons discussed below, we find merit in some of the exceptions. Thus, we find that the Respondent unlawfully terminated numerous employees who engaged in the strike after being threatened with permanent replacement, constructively discharged an employee who quit his employment because he was informed that the Respondent was operating nonunion, and unilaterally changed terms and conditions of employment of unit employees without first bargaining to a valid impasse.

Facts

The Respondent is a wholesale grocery distributor with operations centered in Union Gap, Washington, a suburb of Yakima. It serves businesses in other cities in Washington and other States. The Union represents a unit of the Respondent’s warehouse employees (with certain exceptions), truckdrivers, and service and sales personnel. The parties’ collective-bargaining relationship extends back for about 10 years. The most recent collective-bargaining agreement was effective from August 29, 1987, until August 29, 1990.

The parties negotiated during the late summer of 1990 for a successor agreement. [4] By late August, the parties still had not reached agreement on three issues: the amount of the Respondent’s contributions to the Union’s pension plan, the type of health benefit plan for unit employees, and the exclusion of salesmen from the bargaining unit. On Wednesday, August 29, the parties agreed to substitute a company health care plan for the existing union health benefit plan, and apparently also agreed that salesmen would be excluded from the unit. They were still some distance apart on the pension contribution issue, however; the Union proposed a 15-cent-per-hour increase for each of the 3 years of a new contract, and the Respondent countered with an offer of a one-time increase of 7 cents an hour. The Union put the Respondent’s offer to a vote of the membership late that afternoon. The employees voted to reject the offer and to strike at midnight. The strike that began that night is conceded to be an economic strike; there is no allegation or contention that it was either caused or prolonged by the Respondent’s alleged unfair labor practices.

The Respondent was notified of the outcome of the strike vote about 8 p.m., and immediately took steps designed to enable it to continue to operate as normally as possible during the anticipated strike. Shortly before 9 p.m., Human Resources Manager Dave Cummins telephoned Employment Plus, a personnel agency that already had been seeking applicants on the Respondent’s behalf for possible use as striker replacements. The agency’s co-owners, Chris Wellner and Erin Hale, were told by Cummins and Mike Noel, the Respondent’s general manager, to get as many potential striker replacements as possible to the Respondent’s facility by midnight. Wellner and Hale began contacting individuals who had responded to the agency’s help-wanted advertisement for the Respondent during the past 2 days. They ultimately obtained 15 replacements that night; those individuals reported for work around midnight.

Meanwhile, at about 9 p.m., Mike Noel called a meeting of the Respondent’s managers. Noel informed the managers that the Respondent intended to obtain permanent replacements for the strikers, and discussed the legal and practical consequences of doing so. He also told the managers to telephone the unit employees and find out who intended to strike and who did not. Pursuant to that instruction, Operations Manager Rod Robbins, Traffic Manager Ed Shirely, Day Warehouse Supervisor Don Miller, and Chemical Beverage Manager Jim Foster called numerous unit employees during the night of August 29-30. Robbins, Shirley, Miller, and Foster made a number of statements during those telephone calls that are alleged to be unlawful. The gist of those statements was that anyone who went on strike would be permanently replaced; some employees testified that they were told that they wuld be permanently replaced if they did not report to work on their next scheduled shift. Employees were also informed that, as of midnight, the Respondent would be operating nonunion. [5]

At about 10:15 p.m. on August 29, Robbins called a meeting attended by employees on the night shift at the warehouse, as well as by several swing shift workers who had not yet gone off duty. At that meeting, Robbins made further allegedly unlawful statements, again to the effect that strikers would be permanently replaced and that the Respondent would become nonunion at midnight.

After the strike and picketing commenced at midnight, and during the ensuing days and weeks, the Respondent’s supervisors made additional remarks to employees that are alleged to be unlawful. Those statements again were that strikers would be permanently replaced and that Respondent was now operating nonunion.

On September 10, the parties held their first bargaining session following the commencement of the strike. A Federal Mediator was present, and the parties made their proposal through him, rather than face to face. The union negotiators told the mediator that their chief concerns were for increased contributions to the Union’s pension plan and for the reinstatement of all strikers. The Respondent’s negotiators testified that they countered by proposing to replace the union pension plan with the Respondent’s own pension plan and to delete the union-security provision. They also testified that they told the mediator that some of the strikers had been permanently replaced and that the process of replacing others was continuing. The Union’s witnesses testified that the mediator informed them that the Respondent was proposing to end union security and to substitute the Noel pension plan for the union pension plan, and claimed either to have permanently replaced all strikers or to have placed them on a preferred hiring list. [6] In any event, the union negotiators were unwilling to consider ending the strike unless all strikers were reinstated, and left the bargaining session.

By letter dated September 11, the Respondent reiterated its contract proposal of the previous day (with minor modifications), and stated that if the Union had not responded by September 14, the Respondent would deem its offer rejected. The Union did not respond. By letter dated September 18, the Respondent declared impasse and implemented the terms of its final offer, retroactive to September 1, except for the provisions concerning union security and arbitration, which the Respondent did not claim could be implemented without the Union’s agreement.

During the strike, several strikers asked representatives of the Respondent if they would be receiving vacation pay at the time of their scheduled vacations. They were informed that they could not receive vacation pay unless they resigned. A few strikers did resign and receive their vacation pay; others did not resign and did not receive the payments sought. As for the nonstrikers, Mike Noel announced at the beginning of the strike that all vacations were canceled until further notice; later, however, nonstrikers were allowed to take vacations on a case-by-case basis.

Analysis

1. The “permanent replacement” statements

The General Counsel first alleges that the Respondent effectively discharged numerous employees by telling them that strikers would be permanently replaced, at times when insufficient replacements had been obtained to replace all the potential strikers. [7] The judge found that the Respondent’s supervisors made a variety of such statements, but that the statements were not unlawful. The General Counsel excepts. To the extent discussed below, we find merit to the General Counsel’s exceptions.

Operations Manager Robbins testified that he announced at the night-shift meeting on August 29, less than 2 hours before the strike was to occur, and in separate conversations with other employees on the same night, that striking employees would be permanently replaced and that the Respondent had hired permanent replacements. [8] The judge found that at the time these statements were made, “the task of marshalling a measurably complete replacement program was not yet even under way.” Contrary to the judge and to our dissenting colleague, we find that Robbins’ remarks constitute an unlawful threat of termination under the rationale of American Linen Supply Co. [9] Accordingly, we find that those night crew employees who did not yield to the unlawful threat and engaged in the strike were effectively terminated in violation of Section 8(a)(3) at midnight on August 29, and that day-shift employees who were threatened by Robbins that evening and who joined the strike on the morning of August 30 were similarly unlawfully discharged.

The Board has held that an employer who informed lawful economic strikers that they had been permanently replaced, when in fact the employer had not obtained such replacements, terminated the strikers in violation of Section 8(a)(3). [10] The Board reasoned that a false statement that permanent replacements had been obtained effectively resulted in witholding from strikers the right to return to their unoccupied jobs solely because they went on strike. In American Linen, the Board extended this rationale to false statements about permanent replacements made to employees shortly before the commencement of a strike. There, the employer distributed a memorandum to employees about 10 minutes before 7 a.m., the starting time for work, informing them that if they did not return to work at 7 a.m., “you are permanently replaced.” The Board found that the employer made a false statement when it indicated that the striking employees would be permanently replaced by 7 a.m., because it was unlikely under the circumstances that the employer actually had obtained replacements for the strikers. The Board concluded that such a false statement constituted an unlawful termination threat, and that the employer unlawfully terminated the employees who did not abandon the strike by the deadline.

The Respondent’s actions in this case are very much like those of the employer in American Linen. According to Robbins’ testimony and that of many employees who attended the night-shift meeting on August 29 or received a call from him that evening, Robbins stressed that a strike was called to begin at midnight and that the company would then become nonunion. In emotional terms, Robbins told the employees that they would have to make the choice that was best for them. He told them that if they chose to strike, they would be permanently replaced. Robbins also testified that he told employees at the night-shift meeting and in separate phone calls that the Respondent had hired permanent replacements. Robbins’ remarks were made less than 2 hours before the strike was scheduled to begin.

Robbins’ statement that if the employees struck they would be permanently replaced, viewed in context, is virtually identical to the employer’s statement in American Linen. Robbins clearly identified midnight on August 29 as a deadline. The emphasis on a rapidly approaching deadline and the necessity to make a choice at that deadline indicated to employees that a choice to strike would result in immediate permanent replacement. [11] In this regard, we see no significant difference between the American Linen employer telling employees that if they engage in a strike which will occur within 10 minutes, they “are” permanently replaced, and Robbins telling them that if they engage in a strike which will begin in less than 2 hours, they “will be” permanently replaced. The message is the same in both cases: if employees join the strike when it begins, they will be permanently replaced at that time.

Our dissenting colleague argues that Robbins did no more than imply that the Respondent intended to exercise its right to replace strikers permanently when it could do so. He relies on Chromalloy American Corp. [12] to find that Robbins’ remarks were a lawful expression of the employer’s right to hire permanent replacements. In that case, the employer sent letters to employees who were already on strike, urging them to return to work and informing them that if they did not return by a certain date, the employer would take steps necessary to exercise its right to permanently replace them. The Board found that the employer’s letter merely notified employees who were already striking that it intended to exercise its legal right to obtain permanent replacements if they did not return to work. The letter was consistent with the law and did not threaten that employees would be deprived of their rights in a manner inconsistent with Laidlaw Corp. [13]

We are not persuaded by the dissent’s argument that the statements at issue here are of the same type as those analyzed in Chromalloy American. There, the employees were already on strike. The letter mentioned a specific date for employees to return to work, but that date was not imminent. Further, the letter expressly stated that the employer would take necessary steps to obtain permanently replacements, making it clear to employees that the process of permanent replacement had not yet begun and would not begin until the date mentioned in the letter. Here, in sharp contrast, the employees were not yet on strike. They were told they had to make a decision in a matter of a few hours to either continue in theier jobs or to strike and be permanenely replace. There was nothing in Robbins’ remarks which expressly indicated that the process of replacement had not yet begun. To the contrary, Robbins admitted that he also told the employees that permanent replacements had been hired. This admission dispels any uncertainty concerning the import of Robbins’ statements to the employees that they would be permanently replaced if they engaged in the strike. [14]

Our dissenting colleague discounts Robbins’ admission by “doubting” that Robbins made the statement he claims to have made. He takes this unusual step of questioning an admission in the absence of any showing that Robbins gave contrary evidence at an earlier point in the investigation, left his job holding a grudge against the Respondent, or engaged in any other activity which would give cause to question the veracity of his admission. [15]

The principal reason given by the dissent for rejecting Robbins’ admission is that employees did not corroborate his statement. We are not persuaded by this reasoning. It is true that no employees testified that Robbins told them that the Respondent had “hired replacements.” On the other hand, the employees did not contradict Robbins’ admission. They testified that Robbins told them, shortly before midnight on August 29, that a strike was called for midnight and that if they chose to strike, they would be permanently replaced. In our view, it is not significant that the employees made no reference to the hiring of replacements. In the face of the deadline that was presented to them, the phrases “you will be permanently replaced” and “the company has hired permanent replacements” reasonably could be viewed as conveying the same message of immediate replacement.

For these reasons, we rely on Robbins’ statement that he told employees that the Respondent had hired permanent replacements. That statement, made at a time when the Respondent had not in fact hired permanent replacements for all the potential strikers, gives conclusive support for the finding that the Respondent’s actions come within the scope of American Linen and constitute an unlawful threat of termination.

Of the employees who attended the night crew meeting on August 29, only Tom Glass, Jim Stiltner, Leo Hull, and Bret Lombard joined the strike at midnight. For the reasons explained above, we find that those employees were effectively terminated. [16] Richard Wilson (through his wife Susan), James Doll (through his wife Mary), Mary Layman, Greg Bolin, Roger Layman, and Chuck Foster (through his wife Mardi) were recipients of Robbins’ telephoned threats on the evening of August 29, but joined the strike rather than work as scheduled on the morning of August 30. Those employees also were effectively terminated. [17]

2. The “going nonunion” statements

According to the credited testimony, the Respondent’s supervisors made statements to numerous employees to the effect that the Respondent was “going nonunion” or would be a nonunion shop, with newly imposed Noel benefits, at midnight on August 29. [18] Other employees were informed by the supervisors shortly after the strike began that the Respondent was now operating nonunion. Although the judge found that those statements were made, he rejected the general Counsel’s contention that they constituted constructive discharges of the employees to whom they were addressed. He reasoned that the remarks were made in a context free of union animus, and that the Respondent in fact continued to recognize and bargain with the Union. He concluded that “the context does not therefore support an unlawful sort of rebuke to statutory rights, but must instead be thought of only as reasonably and objectively meaning that a collective-bargaining relationship, which by its terms was to expire, did expire that night.” The General Counsel excepts.

With one exception, which we discuss below, we agree with the judge that the Respondent did not constructively discharge employees when its supervisors told them the company would operate nonunion as of midnight on August 29. We do not adopt the judge’s reasoning, however. An employer may not unilaterally abrogate its relationship with an incumbent union unless the union has lost the support of a majority of the employees, or unless the employer has a good-faith doubt, based on objective evidence, that the union has lost its majority status. [19] In the absence of either condition, the employer may not lawfully inform the employees that it will no longer recognize the union, because if it does, it effectively forces them to choose between continued employment and the continued exercise of their statutory right to representation. [20] Faced with such a Hobson’s choice, an employee rather than accept the loss of his bargaining representative is constructively discharged in violation of Section 8(a)(3) and (1). [21] That the Respondent may not have acted out of animus against the Union, as the judge found, is immaterial. [22] The judge’s finding that there was no “unlawful sort of rebuke to statutory rights” because the Respondent’s supervisors meant only that a collective-bargaining relationship was to expire is altogether inexplicable. Contrary to the judge, the parties’ collective-bargaining relationship did not end on August 29; only their contract did. We do not find it reasonable to suppose that the employees, on being informed that the Respondent was about to start operating “nonunion,” would infer that the supervisors were merely telling them something they already knew, i.e., that the contract was about to expire. We think the only reasonable construction to place on the supervisors’ statements was that, as of midnight on August 29, the employees would no longer be represented by the Union. [23]

Despite our disagreements with the judge’s analysis, however, we adopt (with one exception) his finding that the employees were not constructively discharged when the Respondent’s supervisors told them the company was going nonunion. Although it is unlawful for an employer to force his employees to abandon either their bargaining respresentative or their jobs, an employee who is presented with that choice nevertheless is not constructively discharged unless he does, in fact, quit. [24] With few exceptions, the Respondent’s employees did not quit. [25] Many of them participated in the strike, but striking is not the same as quitting. [26] . Some of the strikers testified that they eventually obtained employment elsewhere, but going to work for another employer does not, ipso facto, establish that they quit their jobs with the Respondent. [27]

We find, however, that striking driver Mitch Cruz did indicate to the Respondent that he had abandoned any interest in returning to work if the company was operating nonunion. Cruz testified that in early December, Ed Shirley called him and said that a driver was quitting and that Shirley wanted Cruz to come back to work. Cruz asked Shirley whether it would be a union or nonunion situation, and Shirley replied that “it’s a nonunion shop from now on.” Cruz then said that they had nothing more to talk about, because he did not want the job. [28] Thus, Cruz turned down Shirley’s job offer, apparently for the sole reason that Shirley had said it would be a nununion job. We find that, in declining Shirley’s offer of employment under these circumstances, Cruz did not simply indicate that he intended to remain on strike, but instead stated, in effect, that he had no intention of returning to work for the Respondent--in short, that he quit. Because he quit rather than work under nonunion conditions, Cruz was constructively discharged in violation of Section 8(a)(3) and (1). [29]

Strikers Charles Wickenhagen, Jerry Cooper, and Tom Hamel, in response to statements or inquiries by the respondent’s agents, made remarks similar to Cruz’ regarding their unwillingnes to work under nonunion conditions. We find, however, that none of those employees were constructively discharged.

Wickenhagen testified that his supervisor, Pat Stump, told him that if he did not return to work he would be permanently replaced, and that the shop would be nonunion; Wickenhagen replied that he would not come back under those circumstances. Wickenhagen had already joined the strike, [30] however, and Stump did not make him a tangible job offer of the sort Shirley made to Cruz. We find that Wickenhagen’s comment, in this setting, can as readily be construed as an intention to remain on strike as it can an abandonment of his prestrike job, and we therefore find that the General Counsel has not shown, by a preponderance of the evidence, that Wickenhagen quit rather than work under nonunion conditions.

Both Cooper and Hamel testified that they indicated to Supervisor Wright that they would not return to work under nonunion conditions; however, neither testified that any representative of the Respondent had previously informed them that the company was going to operate nonunion. As the General Counsel does not contend that any employee was wrongfully treated on the basis of statements he may have heard from sources other than the Respondent (even though the substance of the statements, as in the cases of Cooper and Hamel, may have originated with the Respondent), we do not find that either employee quit because of any unlawful statement made by the Respondent.

In summary, we find that only Cruz was unlawfully constructively discharged when informed that the Respondent was operating nonunion, because we find that he, alone among the employees, quit because the Respondent forced him to make the choice between working and retaining his union representation. Although others were similarly informed, the record does not support a finding that they quit in response; hence they were not constructively discharged.

3. The unilateral implementations

As we have noted, the Respondent declared impasse and implemented most of the terms of its final offer to the Union on September 18. [31] The General Counsel argues that a lawful impasse could not be reached because of the 8(a)(3) violations allegedly committed by the Respondent before it declared impasse, and therefore that the implementation of the Respondent’s offer violated Section 8(a)(5) and (1). Having found no 8(a)(3) violations, the judge found that the Respondent had lawfully declared impasse, and dismissed the 8(a)(5) allegation. In his exceptions, the General Counsel argues only that the 8(a)(3) violations alleged preclude the finding of a lawful impasse. In this regard, the General Counsel stresses that the Union broke off negotiations in September over the Respondent’s refusal to agree to reinstate all the strikers on the ground that some or all had been permanently replaced, despite the General Counsel’s contention that most if not all of the strikers had been discriminatorily discharged and thus could not have been lawfully denied reinstatement. [32]

We find merit in the General Counsel’s exceptions. Although an employer who has bargained in good faith to impasse normally may implement the terms of its final offer, it is not privileged to do so if the impasse is reached in the context of serious unremedied unfair labor practices that affect the negotiations. [33] Here, the negotiations foundered in part because the Respondent refused the Union’s demand that all strikers be reinstated as a group. That refusal was based on the Respondent’s representation that some or all of the strikers had been permanently replaced. As we have found, however, numerous strikers had been unlawfully discharged and could not lawfully be permanently replaced. The breakdown in negotiations thus was the proximate result of the Respondent’s serious unremedied unfair labor practices. Accordingly, we find that the Respondent was not entitled to declare impasse and that it violated Section 8(a)(5) and (1) when it unilaterally implemented portions of its final contract proposal.

4. The requirement that strikers resign in order to receive accrued vacation pay

It is undisputed that a number of strikers requested that they be paid for their accrued vacation time during the strike, and that the Respondent informed them that they would not have to resign in order to receive the requested payments. The complaint alleges that by refusing to pay the strikers their accrued vacation pay, while paying for the vacations of nonstrikers, the Respondent discriminated against the strikers in violation of Section 8(a)(3) and (1). The judge rejected this contention. He found that the Respondent’s actions were dictated solely by the needs of the operation; that “the status of being a paid vacationer and, simultaneously, an active economic striker, cannot coexist”; and that there is no evidence that strikers who returned to work were denied their vacation rights. [34] The General Counsel excepts. Again, we agree with the judge’s finding but not with his reasoning.

The judge’s finding that the Respondent’s actions were dictated solely by the needs of the operation is not borne out by the record. Although the Respondent canceled all vacations at the outset of the strike, it began to allow at least some of the nonstrikers to take their accrued vacations once the strikers’ functions had been covered. Just how the needs of the operation would be served by denying vacation pay to strikers, who were performing no services for the Respondent, while allowing some nonstrikers to take paid vacation, is not explained by the judge. The judge’s assertion that one cannot be a paid vacationer and an economic striker at the same time is wrong as a matter of law. Dane Trailers, Inc., [55 LC ¶11,973] 388 U.S. 26 (1967), the Supreme Court enforced the Board’s finding that the employer had violated Section 8(a)(3) by denying vacation benefits to strikers while providing them to nonstrikers. That the Respondent did not punish returning strikers by denying their claims for vacation benefits is some indication of a lack of animus on the Respondent’s part, but, as we shall see, that fact is not dispositive of this matter.

The appropriate analysis of this issue is set forth in Texaco, Inc., [1986-87 CCH NLRB ¶18,871] 285 NLRB 241 (1987). In Texaco, the Board announced that the question of whether an employer violates Section 8(a)(3) or (1) by withholding benefit payments from disabled employees on commencement of a strike will be resolved by applying the test for unlawful conduct set forth in Great Dane. Under that test, the General Counsel bears the prima facie burden of proving some adverse effect of the benefit denial on employee rights. That burden can be borne by showing that the benefit was accrued--i.e., that it was due and payable on the date it was denied--and that it was withheld on the apparent basis of a strike. If the General Counsel makes that required showing, the burden then shifts to the employer to prove that it had a legitimate and substantial business justification for withholding the benefit. The employer may make that showing by proving that the employees’ collective-bargaining representative explicitly waived their right to be free from such discrimination or coercion, or by demonstrating reliance on a non-discriminatory contract interpretation that is reasonable and arguably correct. Even if the employer proves business justification, the Board still may find that it acted unlawfully if the conduct is found to be “inherently destructive” of important employee rights or motivated by antiunion intent. [35] Although Texaco concerned the denial of disability, health insurance, and pension benefits, the analysis is equally applicable to the withholding of vacation benefits from strikers. [36]

To determine whether the General Counsel has carried his prima facie burden of establishing that the strikers were denied vacation benefits that were accrued--that is, due and payable--we must first specify exactly what benefits are alleged to have been withheld. The complaint alleges that the Respondent refused to pay strikers accrued vacation pay on their request. It does not allege a refusal to allow strikers to take accrued paid vacations. The strikers who testified that they had asked about receiving vacation benefits all stated that they had asked for vacation pay, not to take paid vacations. [37]

We must, therefore, determine whether the General Counsel has proved that the right to receive vacation pay (in lieu of taking paid vacation) was an accrued right. To make that determination, we turn first to the language of the collective-bargaining agreement. Article 6 of the agreement (which was unchanged in the Respondent’s final offer) provides that employees shall accrue vacation benefits according to their tenure of services. Paragraph 6.2 states that “Pro-rata vacation shall be paid to all employees with one (1) year or more of service who are laid off, quit, or are discharged ... on the basis of one-twelfth (1/12) of vacation pay earned per month.” There is no indication in Article 6 that employees may receive vacation pay in lieu of vacation under any circumstances other than those listed in paragraph 6.2.

We find that the contract does not provide for employees’ receiving vacation pay in lieu of vacation except in the above-enumerated circumstances, but instead contemplates their taking time off from work with pay. Both Mike Noel and Human Resources Manager Dave Cummins testified without contradiction that it is the Respondent’s established policy that employees are paid for vacation when they take vacation, and that employees could not get vacation pay without taking vacation unless they resigned or were terminated. The General Counsel does not dispute that testimony. [38] and the evidence does not establish that the Respondent ever previously deviated from its stated policy. On this record, we find that the benefits the strikers sought--vacation pay in lieu of taking vacation--were not contained in the contract and had not been conferred in the past. We therefore find that the General Counsel has failed to carry his prima facie burden of establishing that the benefits the Respondent denied were accrued. [39]

Moreover, even assuming for the sake of argument that the General Counsel had established a prima facie case, the Respondent established a legitimate and substantial business justification for refusing to pay vacation pay to strikers who did not resign. The Respondent showed that it relied on a nondiscriminatory contract interpretation that is reasonable and arguably correct. Article 6 of the collective-bargaining agreement provides for vacation with pay, but does not provide for vacation pay in lieu of taking time off except for employees who have resigned or been laid off or discharged. In this regard, “vacation” is commonly understood to be a respite from work. Because the Respondent’s interpretation of the contract is reasonable on its face and consistent with the common understanding of the meaning of “vacation,” and because there is no contrary contract language and no evidence of contrary past practice or interpretation, we find that the Respondent has established a sufficient rebuttal, even assuming the General Counsel had made out a prima facie case. [40]

Finally, we find that the Respondent’s refusal to pay vacation pay to strikers unless they resigned was not “inherently destructive” of employee rights, nor was it motivated by antiunion animus. The Respondent’s refusal was not discriminatory; as we have noted, there is no evidence that the Respondent ever deviated from its policy, reflected in the language of the contract, of not paying vacation pay to employees in lieu of their taking vacation, and there is no evidence that nonstrikers were treated more favorably than strikers in this respect. As the judge found, returning strikers apparently were not denied their vacation rights, and one witness (Berghoff) testified that he was told that to receive vacation pay he would have to either resign or wait until the strike was over. Thus, it is clear that the Respondent was attempting not to divest the strikers of their vacation benefits, but to postpone their enjoyment of those benefits until they returned to work (and could take vacations from work) [41] or, pursuant to the contract, resigned.

The General Counsel relies on Great Dane Trailers, supra and on Texaco, Inc., [1988-89 CCH NLRB ¶l5,291] 291 NLRB 508 (1988), and Glover Bottled Gas Corp., [1988-89 CCH NLRB ¶15,413] 292 NLRB 873 (1989), in support of this allegation of the complaint. We find those cases distinguishable from this one. In Great Dane, unlike this case, the parties’ contract explicitly provided that employees could continue to work and receive vacation pay in lieu of taking vacation; thus, vacation pay arguably was an accrued benefit for strikers. [42] Moreover, the employer in Great Dane, unlike the Respondent, proffered no legitimate business justification for its actions. [43] In Glover Bottled Gas, the employer denied vacation (and bereavement) benefits to strikers after they had returned to work, and did so on the basis of a contract interpretation that was neither reasonable nor arguably correct. [44] The employer in Texaco was found to have acted lawfully when it canceled all vacations (for both strikers and nonstrikers) at the outset of a strike, because it relied on a reasonable and arguably correct interpretation of the collective-bargaining agreement and also on established practice which the Board found to have evolved into a term and condition of employment. [45]

For the foregoing reasons, we find that the Respondent’s refusal to pay vacation pay to strikers in lieu of vacation unless they resigned was not a denial of an accrued benefit, and that even if it was, the Respondent has shown that it had a legitimate and substantial business justification for its action. We further find that the Respondent was not motivated by antiunion intent and that, because it did not treat strikers differently from nonstrikers in this respect, its actions were not “inherently destructive” of important employee rights. Accordingly, we affirm the judge’s dismissal of this allegation of the complaint.

[Partial Dissent]

Member Stephens, dissenting in part: Unlike my colleagues, I do not find that Rod Robbins’ statements on the evening of August 29 constituted threats to terminate employees who joined the strike that night, or that employees who heard those statements and walked out that night or early the next morning were unlawfully discharged. Because I agree with my colleagues that no other employees were discharged, either actually or constructively, until long after the Respondent declared impasse and unilaterally implemented most of the terms of its final offer on September 18, I find that the impasse was lawful and that the Respondent did not violate Section 8(a)(5) by making the unilateral changes. [46] In all other respects, I agree with the majority.

When the Respondent informed the employees that they would be permanently replaced if they walked off the job, or if they failed to report for work as scheduled, it did no more than inform them of its intention to exercise its right to hire permanent replacements for economic strikers. Unlike my colleagues, I find that such statements do not falsely imply that the strikers would be replaced immediately, but only that the Respondent intended to replace them when it could do so. In Chromalloy American Corp., [47] the Board found that the employer lawfully informed its striking employees that if they were not at their jobs at the beginning of certain specified workdays, “then management will take the necessary steps to permanently replace those who have not returned to their jobs.” The Board found that the employer had simply informed the employees that they were subject to permanent replacement. [48] In this case, as in Chromalloy American, the Respondent’s statements do not imply that strikers who fail to report by a date and time certain, or who walk off the job at the commencement of the strike, will be, in effect, terminated. In this regard, the cases are distinguishable from American Linen Supply, [49] in which the employer warned strikers that if they did not report to work by the starting time for work (which was only some 10 minutes away), “you are permanently replaced.” Such a statement falsely implies that they have no “right to return to their unoccupied jobs simply because they have gone out on strike.” Id. Here, however, Robbins made his statement further in advance, and the statements had some basis in fact, since the Respondent had made arrangements to obtain qualified replacements from a temporary employment agency, and some of those replacements in fact arrived around midnight. I therefore agree with the judge that the Respondent did not threaten to discharge employees by telling them they would be permanently replaced if they honored the strike, or effectively discharge the employees who joined the strike in spite of hearing those statements. [50]

Hence, Robbins’ testimony that he announced at the night-shift meeting on August 29 that the Respondent had hired permanent replacements and that he made similar statements in individual conversations that evening with Susan Wilson and with employees Bolin, Mullinex, and Lombard does not--in the circumstances here--require a finding of unlawful threat of termination under the American Linen analysis because the statement to which he testified did not falsely indicate to employees that they would be immediately precluded from returning to their jobs if they went on strike. In any event, I doubt that Robbins phrased the statement in the way to which he testified. Susan Wilson, Bolin, Mullinex, and Lombard all testified at the hearing, and none of the four corroborated Robbins’ account. None of the witnesses who attended the night-shift meeting on August 29 testified that Robbins stated on that occasion that permanent replacements had been hired. [51] I think it highly unlikely that statements as powerful as those Robbins claims to have made would not be remembered by any of the employees to whom they were supposedly addressed. [52] And even if Robbins did make those statements and the employees forgot them, I think it logically impossible to find that employees were effectively given notice of discharge by statements they did not recall having been made.