Petition for a Writ of Certiorari — System Council T-4 v. National Labor Relations Board

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IN THE

Supreme Court of the Gnited States

Octoser Term, 1971.

em oa 646.

SYSTEM COUNCIL T-4, COMPRISED OF LOCAL

UNIONS 134, 165, 315, 336 AND 399 OF THE INTER-

NATIONAL BROTHERHOOD OF ELECTRICAL

WORKERS, AFL-CIO,

Petitioner,

Us.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT.

Roser? E. Firzcerap, Jr.,

Anna R. Lavin,

53 West Jackson Boulevard,

Chicago, Illinois 60604,

Attorneys for Petitioner.

THE GUNTHORP-WARREN c ‘ <B> sc

INDEX.

PAGE

MN NN ods sins eh 4s paweaencderene ree 2

GO any nas aoe sen cawa vac catia time 2

Questions Presented .......... 0... cece ccc ecceeeee 2

Statutory Provisions Involved...................... 3

Statement of the Case................ccccccccccece 4

Reasons for Granting tie Writ..................... 6

EE seas heen dkan chcacanieseredeeoree nas 12

MEE 60.45 can wae Cons als ee chavecencanee elit Al

Crrations.

Cases.

Darling and Company, 420 F. 2d 63.................. 11

Erie Resistor Corp., 373 U. S. 221.............. 6, 8, 9, 10

Fleetwood Trailer, 389 U. S. 375................ 6, 8, 9, 10

General Electric Company, 80 NLRB 510........... 6, 8, 9

Great Dane Trailers Inc., 388 U. S. 26... .6, 7, 8, 9, 10, 11, 12

Inland Steel Company, 170 F. 2d 247................ 9

Inland Steel Company, 77 NLRB 1.................. 8,9

Radio Officers v. Labor Board, 347 U. 8. 17......... 7, 9,11

Tex Tan Welhauser Company, 419 F. 2d 1265........ 7, 12

IN THE

Supreme Court of the Gnited States

Octroser Term, 1971.

SY erincnsenisn —

SYSTEM COUNCIL T-4, COMPRISED OF LOCAL

UNIONS 134, 165, 315, 336 AND 399 OF THE INTER-

NATIONAL BROTHERHOOD OF S#LECTRICAL

WORKERS, AFL-CIO,

Petitioner, .

vs.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR WRIT OF CERTIORAR: TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT.

To: The Honorable, the Chief Justice and Associate Jus-

tices of the Supreme Court of the United States: ©

Your petitioners, System Council T-4 Comprised of Local

Unions 134, 165, 315, 336 and 399 of the International

Brotherhood of Electrical Workers, AFL-CIO, pray that

a Writ of Certiorari issue to review the judgment of

the United States Court of Appeals for the Seventh Circuit

affirming a decision of the National Labor Relations Board

which found that the Illinois Bell Telephone Company

had not engaged in conduct in violation of Sections 8(a) (1)

and 3(a)(3) of the National Labor Relations Act, Title 29,

U. S. C. Sections 158a.

2

OPINIONS BELOW.

The opinion of the United States Court of Appeals for

the Seventh Circuit is officially reported as System Coun-

cil T-4, Comprised of Local Unions 134, 165, 315, 336, and

399 of the International Brotherhood of Electrical Workers,

AFL-CIO, at 446 F. 2d 815. It is also printed in the Ap-

pei. lix to this Petition. (App. A3)

JURISDICTION.

The judgment of the Court of Appeals for the Seventh

Circuit affirming the order of tne National Labor Rela-

tions Board was entered July 19, 1971. (App. A2) A

timely Petition for Rehearing was denied on August 11,

1971. (App. Al) The jurisdiction of this Court is in-

voked under Title 238, United States Code, Section 1254(1).

QUESTIONS PRESENTED FOR REVIEW.

1. Where employees are entitled to fringe benefits

under an existing collective bargaining agreement by the

maintenance of their employer-employee relationship, is

not the employer’s denial of pension, vacation and other

fringe benefits to striking employees a discrimination in

terms and conditions of employment in violation of the

National Labor Relations Act.

2. Does an employer’s statement issued to its striking

employees, which, on its face warns of loss of benefits to

those employees who continue on strike, constitute a threat

in violation of the National Labor Relations Axt, and con-

stitute conduct which is inherently destructive of employees’

rights sufficient to shift the burden to the employer to

require that a legitimate business justification for such

conduct be presented.

STATUTE INVOLVED.

Title 29, United States Code, Section 158.

§ 158. Unfair labor practices.

(a) It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or cuerce employees

in the exercise of the rights guaranteed in section 157.

of this title; :

(3) by discrimination in regard to hire or tenure of

employment or any term or condition of employment

to encourage or discourage membership in any labor

organization: Provided, That nothing in this subchap-

ter, or in any other statute of the United States, shall

pveclude an employer from making an agreement with

a labor organization (not established, maintained, or

assisted by any action defined in this subsection as an

unfair labor practice) to require as a condition of em-

ployment membership therein on or after the thirtieth

day following the beginning of such employment or the

effective date of such agreement, whichever is the

later, (i) if such labor organization is the repre-

sentative of the employees as provided in section

159(a) of this title, in the appropriate collective-

bargaining unit covered by such agreement when made,

and (ii) unless following an election held as provided

in section 159(e) of this title within one year pre-

ceding the effective date of such agreement, the Board

shall have certified that at least a majority of the em-

ployees eligible to vote in such election have voted to

rescind the authority of such labor organization to

make such an agreement: Provided further, That no

employer shall justify any discrimination against an

employee for nonmembership in a labor organization

(A) if he has reasonable grounds for believing that

such membership was not available to the employee

on the same terms and conditions generally applicable

to other members, or (B) if he has reasonable grounds

for believing that membership was denied or termi-

4

nated for reasons other than the failure of the employee

to tender the periodic dues and the initiation fees uni-

formly required as a condition of acquiring or retain-

ing membership ;

STATEMENT OF THE CASE.

Illinois Bell and the Petitioner, at times material, were

parties to a collective bargaining agreement (G. C. Exh.

2; Tr. 6).1 On May 8, 1968, the employees represented

by Petitioner began a strike against Illinois Bell. This

strike was concluded on or about September 23, 1968.

Approximately 11,800 employees in units represented by

the Petitioner were involved in this strike (Tr. il-12).

On June 4, 1968, Illinois Bell mailed to its employees in

units represented by the Union « document entitled ‘‘Im-

portant Message to All Employees’’: This document stated,

If you have been off the job cn an unpaid absence,

you should know it is a long-standing company practice

to adjust an employee’s net credited service date when-

ever the number of unpaid days of absence exceeds 30

consecutive deys. (Service dates are important in

computing such things as vacation allowances, benefits,

pension dates, and other items.)

If any employee who has not been reporting for work

because of strikes does report for work by June 6,

1968, no adjustment in the service date will be made.

But under this practice, any employee who has been

absent because of strikes and who does not report for

work by June 6 will have his service date adjusted by

the number of unpaid consecutive days absent in ex-

cess of 30.

All unions representing Illinois Bell employees have

been reminded of this practice and ad~ised that this

information is being distributed to all employees.

Inurnors Bett TeterpHone Company.

1. “*G. C. Exh.’’ refers to the General Counsel Exhibit in the

National Labor Relations Board proceedings below. ‘‘Tr.”’ refers

to the transcript of that proceedings. Certified copy of the tran-

script and exhibits has been filed with the Court.

5

The praciice referred to in this June 4 message to em-

ployees is not stated in General Counsel’s Exhibit 2, the

collective bargaining agreement relevant to this proceeding

(Tr. 7-8).

The collective bargaining agreement between the respond-

ent company and the unions (GC Ex. 2) was in effect during

the entire period of the strike. (Tr. 6 and 84)

Prior to the strike, the company determined an em-

ployee’s seniority by his service date. (Tr. 14, 18, 36 and

37, and GC Ex. 3) However, the company decided that

after the strike an exception would be made to the previous

policy. (Tr. 36) The company did not follow the contract

provisions or past company practice regarding vacation

time being considered as work time, even though the con-

tract was in effect during the time of the strike. (Tr. 71

through 84)

The contract provides that employees will receive vaca-

tions in varying amounts based upon the employee com-

pleting months or years of service. (Article XX, Section

1 of GC Ex. 2) The contract provides that no change

which would reduce or diminish the pension or disability

benefits of employees, will be made without the consent of

the Union. (Article XXIV of GC Ex. 2) The Union refused

to allow the company to add language to the collective bar-

gaining agreeient, Article XXI regarding adjustment of

‘the net credited service date because of strike time. (Tr.

95 and 96 and 112)

The company actually made changes on the employees’

personnel records to adjust the net credited service date

due to absence on strike. (Tr. 56-59; Charging Party Ex.

1, 2, 3, and 4)

The change of the net credited service date affected

length oz vacations, pension eligibility, sick disability bene-

fits, termination payments and telephone concessions. (Tr.

43-45; Respondent Exhibit 1)

REASONS FOR GRANTING THE WRIT.

This Court should issue its Writ of Certiorari to review

the decision of the Court of Appeals for the Seventh

Circuit in this case for the following reasons:

1. The Court of Appeals founded its decision upon the

rationale that there is a distinction between seniority

rights, which are acerued as a result of years of service,

and other fringe benefits such as pension, vacation, and

related benefits which, it said, arise from actual work

performed. This theory was ev-lved by the National Labor

Relations Board in its decision of General Electric Co.,

80 NLRB 510. By reaffirming the General Electric decision,

the Cireuit Court has failed to recognize that pensions,

vacations, and all other fringe benefits are predicated

upon the maintenance of the employer-employee relation-

ship under circumstances that provide for the continua-

tion of such rights.

The entitlement to fringe benefit continuation has been

recognized by this Court in its decisions in Erie Resistor

Corp., 373 U. S. 221, Great Dane Trailers, Inc., 388 U. S.

26, and Fleetwood Trailer Co., 389 U. S. 375. Where, as

here, the collective bargaining agreement of the employees,

who engaged in the strike, continued in effect throughout

the terms of the strike, the employees were entitled to

all fringe benefits which resulted from the continuation of

the employer-employee relationship.

The deprivation of these benefits is discrimination in

the terms and conditions of employment because it is in-

herently destructive of the employee’s right to engage in a

strike. Erie Resistor Corp., supra.

This presents a serious question which has not been,

but should be decided by this Court.

2. The Court below found that the employer’s state-

7

ment to the employees, that it was going to diminish their

fringe benefits if they remained on strike, was insufficient

to amount to a threat because the employer had the right

to give a warning of intent to do that which it was legally

entitled to perform.

However, it is, and has been, this Court’s holding that

conduct which has a tendency to inherently discourage

union activity is a threat within the meaning of the Statute.

Radio Officers v. Labor Board, 347 U. S. 17.

In addition, this Court has heid that a valid business

purpose must exist for any action by an employer which

has a discouraging effect upon the employee’s present or

future concerted activity. Great Dane Trailers, Inc., 388

U. S. 26.

‘The rationale of the Great Dane decision of this Court

has been interpreted by the Circuit Court of Appeals for

the Second Circuit to apply to a situation which would be

a threat under Section 8(a)(1) of the Statute as well as

discrimination under Section 8(a)(3). Tex Tan Welhausen

Company, 419 F. 2d 1265.

This Court should grant review of this matte | because of

the conflict between the decision below and this Court’s

decisions, and because of the split between the Seventh

Cireuit Court of Appeals and the Fifth Circuit Court

of Appeals.

I. ss

The fundamental error of the Court of Appeals, as with

the National Labor Relations Board beforeit, is that an

attempt is made to distinguish between the benefits which

arise from an employee's continuation in the employer-

employee relationship under a valid collective bargaining

agreement. The Circuit Court’s purported distinction

between what has been called seniority on the one hand,

8

and benefits related to work performed on the other hand,

is a result of the Board’s decision in the General Electric

Company case, 80 NLRB 510. However, the General Elec-

tric decision by the Board was erroneous as a matter of

law when issued, and has resulted in a patchwork of de-

cisions which have attempted to reconcile the purported

distinction between categories of employee’s rights where

no real difference exists.

The error that an employee’s right to seniority is dif-

ferent in nature from the employee’s right to other fringe

benefits, such as pension and vacations, has resulted in the

evolution of theories such as the ‘‘active work’’ theory and

the ‘‘years of service’’ theory, in order to ascertain if there

is an accrued right to fringe benefit entitlement. However,

it is clear that the attempts to distinguish between accrued

versus future fringe benefits entitlement is a fiction.

This Court, in its decisions of Erie Resistor, supra,

Great Dane, supra and Fleetwood, supra, emphasize the

employer-employee relationships as the basic source of

employee rights. Since the employer and empioyee rela-

tionship is the source of all employee rights under a col-

lective bargaining agreement (or even in the absence of

one), then a continuation of that relationship must result

in the entitlement to such benefits.

The original error of the Labor Board was its failure

to recognize this source ot employee rights. In the General

Electric case it found the company, there, guilty of violat-

ing the statute by having an improper motivation in that it

attempted to discriminate against its employees by moving

of the service date. The Board in that case held that

deferred benefits like retirement and vacation benefits are

a form of wages citing Inland Steel Co., 77 NLRB 1.

From this very general equating of deferred benefits

to wages, as allegedly set out in the Inland Steel case,

9

the Board reasoned that an employer need not pay such

benefits as vacation and pension to strikers. However, in

the Inland Steel case, supra, the Board stated that not

only are pensions and vacations like wages, but that they

are also within the scope of other conditions of employment.

The Seventh Circuit Court of Appeals, in enforcing the

Board’s order requiring that Inland Steel bargain with

the union, concerning pensions in particular, stated that it

found the Board’s rationale that retirement and pension

plans are conditions of employment to be sound and spe-

cifically affirms that aspect of the decision, Inland Steel

(1948), 170 F. 2d at 250 and 251.

Thus the Board, in the General Electric case, merely

seized upon one of the two relevant aspects considered by

both the Board and the Circuit Court in its affirmation °f

the Inland decision. That error is seen from the Seventh

Cirenit’s statement that it did not dispute Inland Steel’s

contention that the pensions paid to employees are in

reality a payment for an employee’s living up to the condi-

tion of maintaining the employee relationship for the

requisite number of years.

However, even if the theory postulated in the General

Electric case were valid when written, subsequent events,

embodied in the statutory amendments enacted by Con-

gress and the decisions of this Court, most notably Great

Dane and Fleetwood and Erie Resistor, have shown the

error of the previous theory. Following the issuance of

the General Electric decision, Congress added Section

9(c)(3) to the National Labor Relations Act. The section

guaranteed to economic strikers the right to retain an

interest in their employment.

This Court, in Erie Resistor, in part, relied upon

that amendment to uphold the Board’s ruling that an em-

ployer may not grant superseniority to strike replace-

10

ments. Carrying on this theory, this Court in the

Fleetwood Trailer, reasoned that an employee under

Section 2(3) of the Act continues to be an employee unless

he has obtained regular and substantially equivalent em-

ployment elsewhere, after heving gone on strike. This

Court has clearly followed the Congressional intent in

recognizing that strikers maintain their employer-employee

relationships and continue to be entitled to all of the rights

and benefits derivative therefrom.

This Court’s rationale in the Erie Resistor, Great Dane

and Fleetwood cases is predicated upon the concept that an

employee’s total service rendered to an employer should

result in benefits arising from that relationship. Thus an

employee who has pledged his life’s work to the employer

is necessarily entitled to vacations and a pension, based

upon his total employment. To conclude, as Jid the Court

of Appeals and the Board, that the employer may limit

the amount of vacation or pension rights of an employee

because he went on strike and credit him only for the

total actual work performed, is to forget that these rights

emanate from the entire term of employment, and the

offering of one’s total life work rather than hours and

minutes of service.

II.

The Court of Appeals concluded that no threat resulted

from the Employer’s message to the striking employees be-

cause it was merely a warning of the intent to make adjust-

ments in the employees’ net credited service date. Since

the Court found that the adjustment of the net credited

service date was not discrimination then it concluded that

there could be no threat to give the warning of its inten-

tion te engage in conduct the Court found permissible.

The Court adopted the theory of the majority of the

Labor Board that there is a distinction between seniority

11

and net credited service. As was argued above, no such

distinction should be made because all employee rights are

predicated upon the maintenance of the employer-employee

relationship.

As was argued by the Petitioner below, there is no neces-

sity for proof that the employer had the specific intent to

threaten or restrain or coerce its employees when it issued

the memo of June 4th. This Court has long recognized

that the specific proof of such intent is unnecessary where

the employer’s conduct inherently discourages union activ-

ities. Radio Officers v. Labor Board (1954), 347 U. S. 17,

45 et seq. This Court made it perfectly clear that an em-

ployer may not hide behind the fact that there is no proof

of intent to discourage union activities as long as the

natural consequences of his actions result in the discourage-

ment of union activity. This basic principle has been ap-

plied numerous times by this Court and many Court of

Appeals.

The decision of the Court of Appeals fails to mention

this Court’s decision in the Radio Officers case, supra, in

spite of the citation of that Court’s recent decision which

applied the rationale to a situation similar to the insiant

case. (See NLRB v. Darling and Company, 420 F. 2d 63)

The propriety of this Court’s decision in Radio Officers,

supra, is beyond question.

More importantly, the Circuit Court’s decision failed to

recognize that the Employer is under an obligation to come

forward with a legitimate business explanation for any of

its conduct which inherently discourages union activities.

Great Dane Trailer, supra. As the record now stands,

there is absolutely no legitimate explanation for the send-

ing of the June 4 message to the employees.

The Court of Appeals for Fifth Circuit has held that

this shifting of the burden of proof to the employer occurs

12

whether the conduct violated Section 8(a)(3) as discrim-

ination or Section 8(a)(1) as restraint. Tex Tan Wel-

hausen Company, 419 F. 2d 1265 (at 1271). Thus, the

Cireuit Court’s failure to apply the Great Dane criteria

has placed it in direct conflict with the Fifth Circuit.

Of even greater significance, the Circuit Court’s adoption

of the reasons set forth by the Trial Examiner and the

majority of the Labor Board for finding no violation has

resulted in the shifting of the burden of proof to the em-

ployees and the Petitioner. Therefore, instead of apply-

ing this Court’s Great Dane decision to the employer, the

Circuit Court has made a perverted application of the

rationale of that case to the Petitioner, and to the em-

ployees that it represents. The decision below is in direct

conflict with the Great Dane decision of this Court.

CONCLUSION.

Wherefore, for the above and foregoing reasons. peti-

tioners pray that a Writ of Certiorari be issued to the

United States Court of Appeals for the Seventh Circuit

in this case.

Respectfully submitted,

Rosert E. Firzceracp, JR.,

Anna R. Lavin,

53 West Jackson Boulevard,

Chicago, Illinois 69604,

Attorneys for Petitioner.

Al

APPENDIX A.

Unitep States Court or APPEALS.

For the Seventh Circuit.

Chicago, Illinois 60604.

Wednesday, August 11, 1971.

Before

Hon. Lutuer M. Swycert, Chief Judge

Hon. Joun Paut Stevens, Circuit Judge

Hox. Roserr A. SprecueEx, Circuit Judge

s

No. 18161

System Councit T-4, Comprised of

Local Unions 134, 165, 315, 336

and 399, of The International

Brotherhood of Electrical Work- | Petition for Review

ers, AFL-CIO, | of an Order of the

Petitioner, National Labor Re-

oe. lations Board.

Nationa Lasor Revations Boarp,

Respondent.

Ir is oRDERED by the Court that the petition for rehearing

filed in this appeal be and the same is hereby denied.

A2

-

APPENDIX B.

Unirep States Court or APPEALS.

For the Seventh Circuit.

July 19, 1971

Before

Hon. Lutuer M. Swycerr, Chief Judge

Hon. Joun Paut Stevens, Circuit Judge

Hon. Rosert A. Sprecuer, Circuit Judge

No. 18161

System Counci. T-4, Comprised of

Lecal Unions 134, 165, 315, 336

and 399, of The International

Brotherhood of Electrical Work-

ers, AFL-CIO,

Petitioner,

Vs.

Nationa, Lasor Revations Boarp,

Respondent.

+

4

Petition to Review

and Set Aside an

Order of the Na-

tional Labor Rcela-

tions Board.

This cause came on to be heard on the transcript of the

record from the National Labor Relations Board, and was

argued by counsel.

On consideration whereof, it is ordered and adjudged by

this Court that/the decision of the Petition to Review and

Set Aside the National Labor Felations Board entered in

this cause on November 24, 1969 be, and the same is hereby,

DENIED.

A3

APPENDIX C.

In tHE Unirep States Court or APPEALS

For the Seventh Circuit.

SEPTEMBER TERM, 1970 Aprit Sxssion, 1971

No. 18161

System Counci. T-4, Comprised of

Local Unions 134, 165, 315, 336

and 399, of The International

Brotherhood of Electrical Work- | Petition to Review

ers, AFL-CIO, and Set Asidé an

Order of the Na-

tional Labor Rela-

tions Board.

Petitioner,

Vs.

Nationa Lapor Revations Boarp,

Respondent.

J

July 19, 1971

Before Swycert, Chief Judge, Strcvens and SPRECHER,

Circuit Judges.

Sprecuer, Circuit Judge. This is a petition to review

and set aside an NLRB order’ dismissing a complaint

issued after unfair labor charges by System Council T-4

(‘‘Union’’) against the Illinois Bell Telephone Company.

We deny the petition.

1. The Board’s order is reported at 179 NLRB No. 119 (1969).

A4

L

The Union first charges the Company with a violation

of Section 8(a)(1) of the National Labor Relations Act.’

Approximately 11,800 employees in units represented by

the Union went out on strike on May 8, 1968, in support

of economic demands during contract negotiations. On

June 4, the Company mailed to its employees this docu-

ment, entitled ‘‘Important Message to All Employees’’:

If you have been off the job on an unpaid absence,

you should know it is a long-standing Company prac-

tice to adjust an employee’s net credited service date

whenever the number of unpaid days of absence ex-

ceeds 30 consecutive days. (Service dates are im-

portant in computing such things as vacation allow-

ances, benefits, pension dates, and other items.)

If any employee who has not been reporting for

work because of strikes does report for work by

June 6, 1968, no adjustment in the service date will

be made. But under this practice, any employee who

hase been absent because of strikes and who does not

report for work by June 6 will have his service date

adjusted by the number of unpaid consecutive days

absent in excess of 30.

All unions representing Illinois Bell employees have

been reminded of this practice and advised that this

information is being distributed to all employees.

The trial examiner, whose findings were adopted by the

Board, found that under the parties’ collective bargaining

agreement and practice the ‘‘net credited service’’ referred

to in the message determines length of vacations and

entitlement to pensions, sick benefits, terminatior pay,

and telephone concessions. Seniority, on the otner hand,

affects choice of vacation time, promotion eligibility,

choice of hours, and order of layoff and recall. The Union

2. U.S. C. § 158(a) states: ‘‘It shall be an unfair labor prac-

tice for an employer—(1) to interfere with, restrain, or coerce

employees in the exercise of the rights guaranteed in section 157

of this title. .

A5

concedes that the Company never did advance the seniority

date of any striker. But the Union alleges that the June

4 message, by warning of an adjustment in the net

credited service date, contained a threat to affect the

strikers’ seniority. Its argument is based on the fact that,

prior to May 8, an employee’s net credited service date

usually coincided with his seniority date. A threat to halt

accumulation of seniority during the remainder of the

strike, the Union states correctly, would restrain em-

ployees in violation of Section 8(a)(1). See NLRB v.

Erie Resistor Corp., 373 U. S. 221 (1963); Swarco, Inc.

v. NLRB, 303 F. 2d 668, 672 (6th Cir. 1962); cert. denied,

373 U. S. 931 (1963).

In deciding that the June 4 letter did not threaten

loss of seniority, the trial examiner relied primarily

on the language of the message, which mentions only net

credited service and not seniority. He noted that the letter

accurately stated which benefits would be affected by a

change in service date. We agree with the examiner’s

construction of the letter and believe that the following

facts cited by him support his conclusion:

(1) Personnel records were available for employees

to check for variances between seniority and service dates.

(2) Later in the strike, the Company made clear its policy

not to adjust seniority dates and offered to incorporate

an assurance to that effect in the new collective bargain-

ing agreement. (3) There was no evidence that the letter

had any impact on the effectiveness of the strike. (4) The

Union could have clarified the significance of the letter

if its members had been confused; it did not attempt to

do so. The Union points to the paucity of proof that the

Company’s practice as set forth in the message was in

fact ‘‘long-standing,”’ and to the fact that the Company

had never before communicated its practice to its em-

ployees, but these faults are easily explained—no strike

against Illinois Bell had ever lasted more than 30 days.

A6

There is substantial evidence in the record to support the

Board’s findings. Universal Camera Corp. v. NLRB, 340

U. S. 474 (1951); NLRB v. Walton Mfg. Co., 369 U. S.

404 (1962).

We therefore conclude that the June 4 message did not

threaten the strikers with loss of seniority. Of course it

did tell the strikers that their net credited service dates

would be adjusted if they remained on strike for more

than 30 consecutive days. But since the adjustment itself

was lawful, as we hold below, the warning of intent to

make the adjustment does not violate Section 8(a)(1).

Kansas Milling Co. v. NLRB, 185 F. 2d 413, 420 (10th

Cir. 1950).

I

The Union’s second charge is that the Company, in

moving ahead the strikers’ net credited service dates,

violated Section 8(a)(3)* by discriminating against those

employees who remained on strike more than 30 con-

secutive days.

Before reaching the merits oi this charge, we must con-

sider the Company’s contention that the Board should

not have entertained the 8(a)(3) charge because it was

not stated plainly in the complaint.‘ The complaint alleged

that the Company denied service credit for the period of

the strike after June 6 (para. V), and that such act

discriminated against its employees in violation of Section

8(a)(3) (para. LX). We believe the complaint was broad

enough to encompass the Union’s charge of discrimination

3. 29 U. S. C. §158(a) states: ‘‘It shall be an unfair labor

practice for an employer— ... (3) by discrimination in regard

to hire or tenure of employment or any term or condition of

employment to encourage or discourage membership in any labor

organization. . . .”’

4. General Counsel for the NLRB seems to have abandoned

the 8(a)(3) charge during the hearing, but the Union continued

to press it.

A7

in the adjustment of the service date. See Frito Co. v.

NLRB, 330 F. 2d 458 (9th Cir. 1964). Thus the substantive

issue is properly before us.

The Union’s argument begins with General Electric Co.,

80 NLRB 510 (1948), which held that an employer could

not suspend the accumulation of seniority during a strike,

but could halt the accrual of vacation and pension benefits.

_ The Board reasoned that, because vacation pay and pen-

sions are a form of deferred benefits,> and because an

employer is not required to remunerate strikers for work

not performed, denial of such benefits does not discriminate

against the strikers. Under General Electric, the adjust-

ment of the net credited service date does not violate

Section 8(a)(3).

The Union contends that subsequent Supreme Court

cases undermine the rationale of General Electric, so that

whenever an employer discriminates against any employee

rights, he must establish that his motive was not anti-

union. See NLRB v. Great Dane Trailers, Ine., 388 U. 8.

26 (1967); NLRB vy. Fleetwood Trailers Co., Inc., 389

U. S. 375 (1967).

A review of ‘‘fringe benefits’’ cases since General

Electric shows that there are two major categories of

benefits an employer may not withhold from striking

employees under Section 8(a)(3). The first category in-

cludes any benefit which will give a nonstriking employee

a preferred position over a striker on a long-term basis.

These benefits are not in the nature of compensation

for work performed; they are systems which give one

employee priority over another in choosing hours or

vacation times, or in setting an order for layoffs or promo-

tions. Examples of these cases are NLRB v. Erie Resistor

Corp., 373 U. S. 221 (1963) (giving ‘*super-seniority’’ to

replacement and returning strikers as insurance against

5. Inland Steel Co. v. NLRB, 170 F. 24 247 (7th Cir. 1948),

cert. denied, 336 U. S. 960 (1949).

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future layoffs); NLRB v. Fleetwood Trailers Co., Inc.,

389 U. S. 375 (1967) (hiring new employees when strikers

were available for reinstatement); NLRB v. Duncan

Foundry and Machine Works, Inc., 435 F. 2d 612 (7th

Cir. 1970) (rehiring strikers as ‘‘temporary’’ employees).

The other category of benefits an employer may not

deny consists of any rights earned by the employee before

the strike began. Withholding accrued benefits from

strikers is conduct ‘‘inherently destructive’’ of employee

rights and is an unfair labor practice unless the employer

can prove a legitimate business purpose. NLRB v. Great

Dane Trailers, Inc., 388 U. S. 26 (1967); NLRB

v. Duncan Foundry and Machine Works, Inc., 435 F. 2d

612 (7th Cir. 1970) (denying accrued vacation pay-

ments in both cases); Tex-Tan Welhausen Co. v. NLRB,

419 F. 2d 1265 (5th Cir. 1969), vacated on other grounds,

397 U. S. 819 (1970) (denying all vacation benefits because

employees were not at work on December 31 or were

absent more than 280 hours, where plan called for per-

centage payment according to annual salary).°

Conduct outside these two categories has never been

held to amownt to the sort of discrimination condemned

in Section 8(a)(3). In Tex-Tan Welhausen Co. v. NLRB,

supra, the company was allowed to compute vacation pay

as a percentage of annual salary, thus reducing the benefit

in proportion to the amount of strike time. The Board

in Mooney Aircraft, Inc., 148 NLRB 1057 (1964), enforced

366 F. 2d 809 (5th Cir. 1966), found no discrimination

where the company, which required one year of work for

vacation eligibility, refused to pay vacation benefits to

strikers who had not worked a full year when the strike

began. Health insurance premiums were called deferred

benefits in Ace Tank and Heater Co., 167 NLRB 663 (1967).

6. The fact that the employees were out on an unfair labor

practices strike was also a deciding factor in the court’s finding

of discrimination.

ee

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The employer was not required to make premium pay-

ments during the strike, but was forced to pay medical

expenses incurred after the uninsured striker returned

to work.

In Kimberly-Clark Corp., 171 NLRB No. 82 (1968),

the Board adopted the thorough analysis of Great Dune

by the trial examiner, who stated, ‘‘... I do not regard

the decision of the Supreme Court in Great Dane Trailers

... as precluding reliance on the often stated axiom that

an employer need not remunerate strikers for work not

performed.’’ 171 NLRB No. 82 at 13. He found no discrimi-

nation in the company’s denial of ‘‘service credits’’ (which

served a purpose similar to Illinois Bell’s net credited

service) during the period of the strike.’

We believe the Supreme Court in Great Dane and

Fleetwood Trailers did not intend to overrule General

Electric; we reaffirm the validity of its distinction be-

tween seniority (and the benefits traditionally dependent

upon it) and benefits related to work performed. Because

the benefits affected by the change in the net credited

service dates clearly fall into the latter classification,

we find there has been no discrimination to activate the

employer-burden rule of Great Dane. An employer may

not prefer a nonstriking employee over a striker on a

seniority list, but a company need not compensate a

striker—with wages or deferred benefits—for work not

performed.

The Union’s petition to set aside the NLRB order is

denied.

7. In Kimberly-Clark the examiner mentions a complaint

(abandoned by the union during grievance procedures) which

is also present in our case: An employee who was hired—for

example—in December 1958 and was on strike for five months

would have his net credited service date moved forward to March

1959. Instead of being eligible for three weeks’ vacation pay in

1968, he would not be eligible until 1969. We consider this result

a “‘comparatively slight’? harm to employee rights which the

Supreme Court condoned in Great Dane, 388 U. S. at 34.