Harold W. Hinson, D/B/A Hen House Market No. 3 v. National Labor Relations Board

ON PETITION FOR REHEARING

In his petition for rehearing, petitioner makes three assertions, all directed toward a challenge of our enforcement of the Board’s remedy requiring petitioner to pay health, welfare, and retirement benefit contributions. We directed the Board to file a responsive brief to the petition. After due consideration, our opinion is modified by striking the last paragraph and the last two sentences of the next to last paragraph (including footnote 1), and inserting in lieu thereof the following:

The spirit of the National Labor Relations Act and the more persuasive authorities stand for the proposition that, even after expiration of a collective bargaining contract, an employer is under an obligation to bargain with the Union1 before he may permissibly make any unilateral change in those terms and conditions of employment comprising mandatory bargaining subjects within the meaning of § 8(d) of the Act. NLRB v. Cone Mills Corp., 373 F.2d 595, 598-599 (4th Cir. 1967); Industrial Union of Marine & Shipbuilding Workers of America, AFL-CIO v. NLRB, 320 F.2d 615, 619-620 (3d Cir. 1963), cert. denied sub nom, Bethlehem Steel Co. v. NLRB, 375 U.S. 984, 84 S.Ct. 516, 11 L.Ed.2d 472 (1964). See NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). Cf. NLRB v. Frontier Homes Corp., 371 F.2d 974 (8th Cir. 1967). It is clear that payments by petitioner into the Union’s health, welfare, and retirement benefit funds fall within the ambit of that mandatory classification. See Retail Clerks Union, No. 1550 v. NLRB, 117 U.S.App.D.C. 191, 330 F.2d 210, 215, cert. denied, 379 U.S. 828, 85 S.Ct. 41, 13 L.Ed.2d 31 (1964); W. W. Cross & Co. v. NLRB, 174 F.2d 875, 878 (1st Cir. 1949). Hence, we conclude that the disputed remedy in this case is appropriate, reasonable, and not ultra vires.2 See NLRB v. Strong, 393 *138U.S. 357, 89 S.Ct. 541, 21 L.Ed.2d 546 (1969); Overnite Transportation Co. v. NLRB, 372 F.2d 765 (4th Cir.), cert. denied, 389 U.S. 838, 88 S.Ct. 59, 19 L. Ed.2d 101 (1967).

Petitioner asserts that the recent Supreme Court decision in H. K. Porter Co. v. NLRB, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146 (March 2, 1970), mandates a result contrary to the one we reach. His reliance is misplaced. In H. K. Porter Co., the parties had never arrived at nor agreed to a collective bargaining agreement. The United States Court of Appeals for the District of Columbia Circuit found, and the Supreme Court did not question, that the lengthy bargaining impasse was due solely to the reprehensible intransigence of the Company in adamantly and unreasonably refusing to adopt a Union dues “checkoff” clause in the proposed contract. Relying upon § 8(d) and the general tenor of the Act, the Supreme Court held that the Board exceeded its remedial powers granted under § 10(c) when it specifically directed the Company to agree to and sign a contract containing the checkoff clause. Here, we have an entirely different situation. The parties had agreed to a subsisting collective bargaining agreement which included the health, welfare, and retirement benefit provisions. The order does not compel petitioner to agree to any new or different contract provision; it simply requires him to abide by an obligation once extant by reason of the binding contract but then continuing on after its expiration, in limited form, not by reason of the contract itself but because of-the dictates of the policy embodied in the National Labor Relations Act.

We have carefully considered § 302(c) (5) (B) of the Labor-Manageinent Act of 1947 [29 U.S.C. § 186(c) (5) (B)], relied upon by petitioner, and are convinced that it in no wise conflicts with the previously stated obligation of an employer vis-á-vis his employees’ bargaining representative subsequent to expiration of the contract. The statute makes illegal any payment by an employer of money or other thing of value to the representative of his employees, except, inter alia, when paid to a trust fund meeting specified requirements, one of which is that “(B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer. * * * ” Enacted in 1947, the statute was designed to remedy certain practices considered by Congress to be inimical to the integrity of the collective bargaining process. The concern was “with corruption of collective bargaining through bribery of employee representatives by employers, with extortion by employee representatives, and with the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control.” Arroyo v. United States, 359 U.S. 419, 425-426, 79 S.Ct. 864, 868, 3 L.Ed.2d 915 (1959). In order to remove the possibility of these abuses, “specific standards were established to assure that welfare funds would be established only for purposes which Congress considered proper and expended only for the purposes for which they were established.” Id. at 426, 79 S.Ct. at 868. See Blassie v. Kroger Co., 345 F.2d 58, 67 (8th Cir. 1965). Relying upon a literal construction of the phrase “written agreement with the employer,” petitioner asserts that no written agreement existed after February 3, 1968, when the collective bargaining agreement validly expired; that there can be no continuing duty to make payments to a wel*139fare fund in the absence of a collective bargaining agreement when Congress has specifically prohibited the same and has set forth criminal sanctions in § 302; that he committed no § 8(a) (5) violation in unilaterally terminating welfare payments after contract expiration and would indeed have suffered criminal penalties had he not done so; and that therefore the Board’s ordered remedy for petitioner to pay health, welfare, and retirement benefit contributions after February 3 is invalid.

There is a fatal gap in petitioner’s chain of reasoning, and it lies in his first link. The reference in § 302(c) (5) (B) to a “written agreement with the employer” does not comprehend solely a collective bargaining agreement to the exclusion of any other possible written agreement. A trust fund agreement separate and apart from the collective bargaining agreement would surely satisfy the statutory prerequisite. See Doyle v. Shortman, 311 F.Supp. 187 (S.D.N.Y., March 3, 1970). Here, Article XX of the expired collective bargaining contract refers to a “Trust Agreement” in existence into which health and welfare benefit contributions were to be made. Article XXIV refers to an agreement of August 7, 1964, which established the “Meat Cutters Local 576 and Employers Kansas and Missouri Pension Plan.” Petitioner certainly agreed to these separate trust fund agreements, not only because they are incorporated by reference into the collective bargaining contract itself, but also because he made contributions under each agreement from the date he purchased Hen House Market No. 3 to the date the subsisting collective bargaining contract expired on February 3. We believe that the two separate trust fund agreements in this case satisfy the requirement of § 302(c) (5) (B) for a “written agreement with the employer,” even after termination of the collective bargaining agreement on February 3, 1968.

We have previously alluded to petitioner’s limited obligation post contract expiration to maintain the status quo as to those terms and conditions of employment which are subjects of mandatory bargaining, until and unless he affords the Union an opportunity to bargain. Since the status quo is quite obviously defined by reference to the substantive terms of the expired contract, it follows that, in a limited and special sense, those pertinent contractual terms “survive” the expiration date. See NLRB v. Cone Mills Corp., supra,. In tandem with this “survival,” the separate trust fund agreements have a continuing viability for petitioner as marking the framework under which benefit payments will be administered and disbursed, thereby providing that safeguard which the framers of the statute clearly intended. The termination of February 3 did not negate or remove the status of these separate agreements as “written agreements with the employer.” Section 302(c) (5) (B) being satisfied in the first instance, petitioner’s challenge to the Board’s remedy must fail. Moglia v. Geoghegan, 403 F.2d 110 (2d Cir. 1968), cert. denied, 394 U.S. 919, 89 S.Ct. 1193, 22 L.Ed.2d 453 (1969), on which petitioner places considerable weight, is clearly distinguishable on its facts. In that decision, the Company had never entered into a written collective bargaining agreement “or any other written agreement * * * detailing the basis upon which payments were to be made by [the Company], on behalf of its employees, into the Trust Fund.” Id. at 115.

We are still satisfied that the remedy fashioned by the Board achieved an end which can fairly be said to effectuate the policies of the Act. Virginia Electric & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 87 L.Ed. 1568 (1943); Phelps-Dodge Corp. v. NLRB, 313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271 (1941); NLRB v. Drapery Manufacturing Co., 425 F.2d 1026 (8th Cir. 1970). Consequently, the Board’s order is entitled to enforcement.

The petition for rehearing is denied.

. Petitioner’s contention that the Union no longer represents the three meat department employees is lacking in merit. Both the trial examiner and the Board concluded on the basis of what is manifestly substantial evidence that petitioner had induced the three employees to,withdraw by promises of economic benefits and other subtle yet coercive practices that amounted to § 8(a) (1) violations. The law is clear that “[p]etitioner cannot, as justification for its refusal to bargain with the union, set up the defection of union members which it had induced by unfair labor practices, even though the result was that the union no longer had the support of a majority.” Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 687, 64 S.Ct. 830, 835, 88 L.Ed. 1007 (1944); Colson Corp. v. NLRB, 347 F.2d 128, 134-135 (8th Cir.), cert. denied 382 U.S. 904, 86 S.Ct. 240, 15 L.Ed.2d 157 (1965).

. We do not read NLRB v. Frontier Homes Corp., supra, as impinging in any way upon the legal support for the Board’s remedy in this case. Our recent decision in NLRB v. St. Louis Cordage Mills, 424 F.2d 976 (8th Cir., April 21, 1970), is not applicable. We denied enforcement in that case after concluding that the Company had not committed an § 8(a) (5) violation. Here, we find the refusal-to-bargain charges to be well-founded.

Petitioner claims that the remedy is punitive, in that he will be required to pay health and welfare benefits twice. Following termination of the contract on *138February 3, 1968, petitioner included the three meat department employees under a benefit plan previously initiated under his own aegis for the benefit of certain employees at his other retail grocery stores. But even if, in the end petitioner will have been obligated to defray duplicate fringe benefits for the three employees, he is certainly in no position to complain. As observed in Note 1, supra, the three employees were induced to withdraw from the Union — and thus to come under, by petitioner’s voluntary action, a different benefit program- — by petitioner’s own unfair labor practices.