Operations In Fiscal Year 1988 - National Labor Relations Board

Unfair Labor Practices 677. Other IssuesIn Lynn-Edwards Corp., 28 the Board accepted a remand fromthe United States Court of Appeals for the Ninth Circiiit, whichhad vacated the Board's earlier Decision and Order." Onremand, the Board found, contrary to the administrative lawjudge, that an Employee Stock Ownership Plan (ESOP), by statutorydefinition, is a retirement plan within the meaning of theEmployee Retirement Income Security Act of 1974 (ERISA),"even if the ESOP is funded from company profits. Premised onthis fmding, the Board concluded, contrary to the judge, that theeligibility provisions in the respondent's ESOP did not violateSection 8(a)(1) .31 The Board, however, reaffirmed that part ofthe judge's Conclusions of Law in which he found that "Respondenthas violated Section 8(a)(1) of the Act . . . by maintainingthose portions of existing booklets and documents whichcontain related explanatory material" because these materialssuggested that coverage of employees would automatically bewithdrawn as soon as they became represented by a union orthat continued coverage under the plan would not be subject tobargaining, distinguishing Handleman Co." and A. H. BeloCorp. 33 from the instant case.In reaching the determination that the respondent's ESOP wasa retirement plan, the Board considered that the respondent'sESOP was expressly designed pursuant to a 1983 amendment tocome within the statutory purview of ERISA. The Board furtherconsidered that ESOPs, such as the one in question, are in factcreated under and defmed by ERISA and related regulations.Moreover, an examination of the ERISA defmition of an employeepension benefit plan confirms that ESOPs are merely subspeciesof federally regulated employee retirement benefitplans. 34 In finding that the respondent's eligibility provision didnot violate Section 8(a)(1), the Board noted that the provisiondid not automatically terminate the employees' benefits upon se- .lection of the union as their exclusive representative. Rather, theBoard reasoned, it provided that the benefits may only be terminatedif retirement benefits for the covered employees are thesubject of good-faith bargaining and the employees' benefits arefunded pursuant to the collective-bargaining agreement. Thus,28 290 NLRB No. 28 (Chairman Stephens and Members Johansen and Babson)..29 282 NLRB 52 (1986), vacated and remanded 825 F.2d 413 (1987).80 Pub. L. 93-406, 88 Stat. 829 (codified as amended 29 U.S.C. § 1001-1462, and m various sectionsof 26 U.S.C.).31 The respondent's ESOP included an eligibility provision that states:[N]otwithstanding any provision to the contrary, no employee covered by a collective-bargainingagreement between an Employee representative and the Employer shall become a Participant inthe Plan, provided that retirement benefits of said class of Employees was the subject of goodfaith bargaining between the Employee representative and the Employer, and said Employee's retirementbenefits are being funded pursuant to said collective-bargaining agreements.32 283 NLRB No. 65 (Mar. 31, 1987).33 285 NLRB No. 106 (Sept. 16, 1987).2429 U.S.C. § 1002 (2)(A).