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N.L.R.B. v. General Time Corp.

*fn*: May 13, 1981.


Petition for Enforcement from the N.L.R.B.

Before Fairchild, Chief Judge, and Sprecher and Wood, Circuit Judges.

Author: Sprecher

The National Labor Relations Board has applied to this court for enforcement of its order issued against the Westclox Military Products Division of General Time Corporation ("Company"). The question we must decide is whether substantial evidence on the record as a whole supports the Board's finding that the Company violated Sections 8(a)(1) and (3) of the National Labor Relations Act, ("Act")*fn1 by deferring payment of vacation pay to striking employees who were members of the United Steelworkers of America AFL-CIO-CLC ("Union").


The Company is engaged in the production of military timing devices. The Union has served as the exclusive collective bargaining representative of the Company's production and maintenance employees since 1971.*fn2

Each year, for the last 20 years, the Company has scheduled a plant shutdown and workforce vacation during the last two weeks in July. Since at least 1966, the collective-bargaining agreements between the parties have explicitly set forth that period as the Union members' first two weeks of annual vacation. These collective-bargaining agreements also contained a formula for determining the amount of vacation pay due based on the employees' "straight time" earnings during a portion of the "vacation year," which ran June 1 to May 31. The contracts did not set forth when vacation pay was to be received by Union members in relation to the time of the plant shutdown. Since 1966, however, all of the Company's employees have received vacation pay for the last two weeks in July on the Friday before the Monday that vacation was scheduled to begin.*fn3

The most recent collective bargaining agreement ran from June 7, 1976 through June 2, 1979. The parties failed to reach an agreement upon a new collective bargaining agreement, and, consequently, the Union struck on June 3, 1979. The Union remained on strike until August 29, 1979, when a new contract was ratified by the Union membership.

During the strike, the Company engaged in its normal July shutdown. The plant was shut down from Monday, July 16, through Friday, June 27. The Company paid vacation pay to all non-Union employees on Friday, July 13. Among those receiving such payments on July 13 were skilled craft unit employees represented by the International Association of Machinists ("IAM") who did not cross the Union's picket line.

The Company did not distribute vacation pay to the striking employees on Friday, July 13. Nor did the Company pay vacation pay on other dates thereafter, when requested by the Union. By letter dated July 30, the Company notified the striking employees that it was "not quarreling that eligible employees have vacation pay coming" but "since we do not have a contract the question of when this vacation pay is payable is an unresolved issue." The striking employees did not receive their vacation pay until after August 29, when a new contract was ratified.

The Union instituted this proceeding before the N.L.R.B. in response to the Company's refusal to distribute vacation pay until the new collective bargaining agreement was ratified. The Board found, in agreement with the Administrative Law Judge, that the Company violated Section 8(a)(3) of the Act by deferring the payment of vacation pay of its employees because they were engaged in protected concerted activity. In addition, the Board also found that the refusal to pay vacation pay was a violation of Section 8(a)(1) of the Act.

The Board's order requires the Company to cease and desist from continuing the unfair labor practices and from, in any like or related manner, interfering with, restraining or coercing employees in the exercise of their rights guaranteed by Section 7 of the Act. The Board's order also requires the Company to make whole, with interest, all striking employees for any loss of wages they may have suffered as a result of the Company's failure to pay them vacation benefits on July 13. The Company must post appropriate notices, and, upon request, must make available to the Board or its agents, for examination and copying, all payroll records, time cards, personnel records and reports, and all other records necessary to analyze and compute the amount of backpay due. We enforce the Board's order.


An employer violates Sections 8(a)(1) and (3) of the Act if he unjustifiably denies accrued vacation pay to striking employes. N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 32, 87 S. Ct. 1792, 1796, 18 L. Ed. 2d 1027 (1967); N.L.R.B. v. Knuth Bros., Inc., 584 F.2d 813, 816 (7th Cir. 1978); Flambeau Plastics Corp. v. N.L.R.B., 401 F.2d 128, 135-36 (7th Cir. 1968), cert. denied, 393 U.S. 1019, 89 S. Ct. 625, 21 L. Ed. 2d 563 (1969). Paying vacation benefits to a group of employees while withholding them from others is "discrimination in its simplest form." Great Dane, 388 U.S. at 32, 87 S. Ct. at 1796. Postponement, as well as outright denial, of vacation benefits to striking employees violates the Act. See Allied Indus. Workers, AFL-CIO Local 289 v. N.L.R.B., 476 F.2d 868, 878 (D.C.Cir.1973).

Thus, an employer is guilty of an unfair labor practice unless it can show that the refusal to grant vacation pay was justified in that it was motivated by legitimate objectives. Great Dane, 388 U.S. at 34, 87 S. Ct. at 1797, System Council T-4 v. N.L.R.B., 446 F.2d 815, 819 (7th Cir. 1971), cert. denied, 404 U.S. 1059, 92 S. Ct. 740, 30 L. Ed. 2d 747 (1972) ("Withholding accrued benefits from strikers is conduct "inherently destructive' of employee ...

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