Sun Oil Company of Pennsylvania

SUN O1. COMPANY OF PENNSYI.VANIA Sun Oil Company of Pennsylvania and Local 7-937, Oil, Chemical and Atomic Workers International Union, AFL-CIO. Cases 25-CA-8131 and 25-CA 8410 (formerly 9-CA 10551) September 20, 1979 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On July 27, 1977, Administrative Law Judge Joel A. Harmatz issued the attached Decision in this pro- ceeding. Thereafter, the General Counsel filed excep- tions and a supporting brief, and Respondent filed cross-exceptions, a brief in support of the Administra- tive Law Judge's Decision, and an answering brief to the exceptions of the General Counsel. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. The Administrative Law Judge found, and we agree, that the General Counsel failed to establish that Respondent unlawfully refused either to bargain with the Union regarding severance pay benefits at Respondent's Louisville, Kentucky, or Clermont, In- diana, terminals or to grant such benefits. Our dis- senting colleague, however, contends that the record herein establishes that Respondent refused to grant severance benefits to employees represented by locals affiliated with the Charging Party (herein called OCAW), while granting such benefits to employees represented by independent unions, that "the only ba- sis for the different treatment accorded the OCAW affiliated locals established on this record is the very fact of their OCAW affiliation," and that Respon- dent's policy was discriminatory on its face. The flaw in this analysis is, quite simply, that the record does not establish that Respondent discriminated against employees represented by OCAW affiliates. The only evidence in this case of Respondent's al- leged hostility toward OCAW is the statement, by a supervisor at the Louisville terminal to an employee prior to the affiliation of the local union with OCAW, that if the local decided to affiliate Respondent would replace its drivers with outside hauling contractors. The complaint did not allege any unlawful state- ments, and the General Counsel, while excepting to the Administrative Law Judge's finding that this com- ment did not establish Respondent's hostility toward OCAW. does not contend that the Board should find that this statement violated Section 8(a)( 1 ) of the Act. In any event, this one comment is too flimsy a foun- dation to support a finding that Respondent was de- termined to punish employees for choosing to be rep- resented by OCAW. The dissent further argues that two prior Board de- cisions. Sun Oil Compatnv of Pennslvlania. 228 NLRB 1063 (1977). and Sun Oil Companyl of Pennslvalnia, 228 NLRB 1072 (1977). demonstrate that Respon- dent manifested an "antagonistic attitude toward af- filiated locals." These decisions, however, indicate no such attitude. Both cases were concerned solely with the issue of whether Respondent refused to recognize local unions after they affiliated with OCAW; antago- nism toward OCAW was not discussed or found in either case, and, indeed, the Administrative Law Judge, affirmed by the Board, specifically stated that she made no finding of bad faith.' In these circumstances, we cannot agree with Member Jenkins that the record herein establishes that Respondent's refusal to grant severance pay at the Louisville and Clermont terminals was motivated by hostility toward OCAW, and we agree with the Administrative Law Judge that Respondent's conduct here was not so "inherently destructive of important employee rights" that an unfair labor practice should be found even in the absence of proof of such a mo- tive. Accordingly, we adopt the Administrative Law Judge's recommendation that the allegations of the complaint that Respondent violated Section 8(a)(3) and (I) of the Act be dismissed. We further agree with the Administrative Law Judge that the preponderance of the evidence herein does not establish that Respondent unlawfully re- fused to bargain about severance benefits. Thus, at the Clermont terminal five meetings were held at which Respondent and the Union discussed sever- ance pay, and at all of those meetings Respondent said that it was willing to negotiate the subject. The Union made only one explicit proposal, which was rejected by Respondent, and did not reply to Respon- dent's later statement that it was willing to receive any proposal on the issue that the Union wanted to make. At Louisville, there were two meetings at which severance pay was discussed; at the first Re- spondent stated that severance pay was a negotiated item which it could not discuss because of the im- pending election on affiliation, and at the second meeting Respondent said no benefits would be ex- 228 NLRB at 1068. fn. 13; 228 NLRB at 1076, fn. 16. Moreover, the United States court of appeals denied enforcement of the Board's Orders in these cases. Sun 01l Compamn of Penn.rlvania v. V ' LRB, 576 F.2d 553 (3d Cir 1978). 245 NLRB No. 11 59 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tended "at this time." The Union did not make any further proposal. As the Administrative Law Judge found, Respondent did not foreclose negotiation but, on the contrary, expressed willingness to bargain. In these circumstances, we conclude that the record does not establish that Respondent refused to bargain about severance pay, and we shall therefore dismiss the 8(a)(1) and (5) allegations of the complaint. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Or- der of the Administrative Law Judge and hereby or- ders that the complaint be, and it hereby is, dismissed in its entirety. MEMBER JENKINS, dissenting: I would, for the reasons set forth below, find that Respondent violated Section 8(a)(), (3), and (5) of the Act, as alleged. Respondent maintains petroleum storage and dis- tribution terminals on a regional basis in various sec- tions of the United States. In most instances truckdrivers, warehousemen, dispatchers, and garage maintenance mechanics employed at those terminals are represented in separate units by nonaffiliated in- dependent labor organizations. Prior to 1975, em- ployees at the Clermont and Louisville terminals had been separately represented by independent unions which had collective-bargaining agreements with Re- spondent. While these agreements were in effect, em- ployees at each location voted to affiliate with the Oil, Chemical and Atomic Workers International Union, AFL-CIO (OCAW). Despite Respondent's opposi- tion to the affiliations, the Board certified Local 7-937 as collective-bargaining representative of the Cler- mont employees on November 4, 1975, and of the Louisville employees on June 11, 1976. Respondent, however, refused to honor the union-security clause of the Clermont agreement and thereby violated Sec- tion 8(a)(5) of the Act. (228 NLRB 1063 (1977).) Beginning in 1975, Respondent commenced a reor- ganization study geared to promoting marketing op- eration efficiency which contemplated job loss and dislocation at terminals represented by independent and affiliated unions. Its Huntington, Indiana, termi- nal, where employees were represented by an in- dependent union, was one of the first to experience job reductions. There, Respondent offered transferred drivers a severance package on a "one shot" basis which included benefits which were geared to length of service and age, early retirement, educational as- sistance, employment assistance, and severance pay. Similar benefits were offered at other terminals to separated employees represented by independent unions. Pursuant to its reorganization program, five bar- gaining-unit employees at Clermont were laid off in July and August 1976. Prior to the implementation of the layoff, the question whether the severance benefits offered at the Huntington terminal and other in- dependent union terminals would be available to Clermont employees was raised several times by the Union, and each time it was advised that it would not be offered but that Respondent was willing to discuss the matter again. Thus, on May 5, 1976, Donald Cox, president of the local Union, asked Respondent whether severance benefits comparable to those at the Huntington terminal would be available to Clermont employees. Norman Sortman, Respondent's manager of transportation in the Midwest, indicated that no severance package was contemplated "at that time." On June 17, 1976, in response to a further inquiry, the Union was informed that the Company did not plan to make benefits available but was willing to negoti- ate concerning the matter. On June 29, 1976, in re- sponse to a formal union demand for separation pay based on length of service, Respondent replied that it still did not wish to offer benefits "at that particular time" but was willing to bargain concerning the mat- ter. In a letter dated July 2, 1976. Respondent con- firmed its refusal, stating "[we] have concluded that no sound basis exists for granting [your]" request for separation benefits. It stated again that "management remains willing to again meet on this subject if you wish." On July 20, 1976, at the final meeting before the layoffs became effective, Respondent again indi- cated that severance pay benefits would not be made available but acknowledged that it had granted sever- ance pay at some terminals but not at others. Respondent's conduct with regard to severance pay at the Louisville terminal was similar to its conduct at Clermont. Thus, in April 1976, while affiliation with OCAW was under consideration, Clifton E. Sawrie, Respondent's terminal supervisor, stated to Judy Droddy, an employee and union official, that, if the employees decided to affiliate with OCAW, the Com- pany probably would replace Louisville terminal drivers with outside hauling contractors.2 In a May 7, 1976, meeting Respondent announced the elimination of eight positions and responded to the Union's re- quest for severance pay that the matter was negotia- ble but that the Company could not discuss it "at that time" because of the impending election on affili- ation. On July 15, 1976, after certification, Union President Cordy again raised the question of sever- I would find this statement to be a threat and clearly coercive, in viola- tion of Sec. 8(aX)(). It also illustrates the hostility of Respondent towards the affiliation efforts of its independent locals. 60 SUN OIL COMPANY OF PENNSYLVANIA ance pay to which Frederick Zwegat, Respondent's area transport manager for the central region, re- sponded that, to his knowledge, no OCAW affiliate would be offered severance pay. The Administrative Law Judge found that Zwegat's reply did not abso- lutely foreclose the grant of severance benefits but, instead, indicated that no such benefits would be ex- tended "at the time." Nevertheless, he also found that Zwegat acknowledged that, although no OCAW lo- cals had received special termination benefits, em- ployees in units which were not affiliated with OCAW had. These facts clearly establish a company policy of granting severance benefits to employees represented by nonaffiliated locals on the one hand, while denying such benefits to employees represented by OCAW lo- cals on the other. The only basis for the different treatment accorded the OCAW affiliated locals estab- lished on this record is the very fact of their OCAW affiliation. In short, the record demonstrates a com- pany policy that is discriminatory on its face and thus is itself clear evidence of Respondent's hostility toward the Union. As the Supreme Court pointed out in N.L.R.B. v. Great Dane Trailers, Inc., even absent independent proof of unlawful motive, when in fact a respondent employer has: . . .engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate ob- jectives since proof of motivation is most accessi- ble to him. [388 U.S. 26, 34 (1967).] In the instant case the Administrative Law Judge missed the mark by likening the situation here to those instances where the Board has suggested that mere failure to grant, in the course of good-faith bar- gaining, identical benefits to units represented by dif- ferent labor organizations (or to unorganized versus organized units of employees) is not a per se violation of Section 8(aX3) of the Act. As pointed out in Chev- ron Oil Company, Standard Oil Company of Texas Di- vision, 182 NLRB 445, 449 (1970): It has long been an established Board principle that, in a context of good-faith bargaining, and absent other proof of unlawful motive, an em- ployer is privileged to withhold from organized employees wage increases granted to unorga- nized employees or to condition their grant upon final contract settlement. [Emphasis supplied.]3 See Shell Oil Conpany, Incorporated and Hawaii Emnployers' Council, 77 NLRB 1306. See also Florida Steel Corporation, 220 NLRB 260 (1975), and 220 NLRB 1201 (1975), both of which suggest, at least by implication, that the Administrative Law Judge's reading of Board precedent in sec. D.2, of his Decision may well be overly broad. The Administrative Law Judge apparently reasoned that Respondent's disparate treatment of OCAW rep- resented employees is saved from a finding of unlaw- fulness because it reflects a policy undertaken "with respect to a potential conflict in bargaining and repre- sented an effort to serve the Employer's interest therein." The record in this case establishes the error of the Administrative Law Judge's findings in this regard. In the first place, Respondent asserted that separation benefits given to independent locals were granted on a one-time basis only. Nowhere in the record is it shown that independent locals receiving such benefits in any sense "negotiated" for such benefits. Rather, they were "offered" severance pay without negotia- tion as to terms and without any company request for corresponding concessions. Furthermore, nowhere is it explained how the grant or the denial of such a "one shot" benefit could be used as a bargaining chip in connection with negotiations with the OCAW lo- cals that were not scheduled to begin for several months, long after Respondent's reorganization plans had been implemented and after the OCAW mem- bers who were to be laid off had been terminated without severance pay benefits. Thus, the record here plainly establishes that Respondent's claim that it de- nied separation benefits to the OCAW locals as a "bargaining tool" is nothing but a smokescreen and an afterthought, and that the purpose of Respon- dent's policy was to retaliate against employees who had already selected OCAW affiliation and to chill the enthusiasm of other employees for such affiliation. In support of this conclusion, it cannot be overem- phasized that Respondent here never bargained in good faith with the OCAW locals about severance pay. Even under the Administrative Law Judge's reading of the record4 it is apparent that Respondent declined to negotiate at the time about separation benefits in connection with the layoffs which were then occurring. By no stretch of imagination or se- mantics could Respondent meet its obligation to bar- gain about the effect of its organizational changes by some vague references to the possibility of discussing separation benefits at some later time after the reorga- nization had been effected. Indeed, the Administra- tive Law Judge specifically found that Respondent met the Union's inquiries about severance pay by stating "no such benefits would be extended 'at the time.'" It is axiomatic that an employer's obligation to bargain is not satisfied by "shadow boxing to a ' In this connection there is ment to the General Counsel's point that. for the most part., the Administrative Law Judge did not discredit testimony inconsistent with the result he reached on the basis of the demeanor of the witnesses but rather because it was not "logically consistent" with his analb - sis of the case. Hence, to the extent his analysis of the case is erroneous, so too are his credibility resolutions suspect. 61 DECISIONS OF NATIONAL LABOR RELATIONS BOARD draw."5 Nor, even assuming arguendo an employer intends to bargain at some later unspecified date, can it be said that the employer bargains in good faith when, as here, he declines and fails to bargain over issues such as the effects of a layoff at the time the layoff occurs. Put another way, the obligation to bar- gain cannot itself be deferred unilaterally without vio- lating Section 8(a)(5) of the Act. I have no difficulty reconciling the fact that Re- spondent denied severance benefits to a non-OCAW affiliated unit at its Detroit facility with the conclu- sion that, as a matter of corporate policy, Respondent denied such benefits to OCAW affiliated units while granting them to non-OCAW affiliated units. It ap- pears uncontroverted on the record that there were special and, as far as we know, legitimate reasons why severance pay was denied at the Detroit local.6 For the reasons discussed herein, there were no such legitimate reasons for denying severance pay to the OCAW affiliated units, and the only reason for such treatment was discriminatory. Hence, the treatment accorded Detroit employees, insofar as Respondent's policy is involved, can be considered as nothing more than an exception that proves the rule. In my view, the record demonstrates Respondent's opposition and hostility to locals which affiliated with OCAW or other International unions,7 and estab- lishes also that this opposition resulted in the adop- tion of a companywide policy to withhold separation benefits from employees represented by OCAW locals and to grant such benefits to unaffiliated locals. The application of this policy at Clermont and Louisville because of their affiliation with OCAW was discrimi- nation based on the employees' choice of their collec- tive-bargaining representative and was, therefore, a violation of Section 8(a)(3) of the Act. It also is clear to one that Respondent's conduct also interfered with the employees' selection of the bargaining representa- tive, in violation of Section 8(a)(1). Respondent's cor- porate policy of denying separation benefits to affili- ated locals precluded meaningful bargaining on this matter at the local level. I regard as mere sham the continued assertion of Respondent's representatives of their willingness to discuss separation benefits at the Clermont and Louisville terminals while repeat- 5N.L.R.B. v. Herman Sausage Company, Inc., 272 F.2d 229, 232 (5th Cir. 1960). 6The General Counsel noted that the layoffs in Detroit coincided with discharges and resignations in connection with a theft investigation con- ducted by Respondent at that location, a location which appears to have been particularly troublesome for Respondent. As the Administrative Law Judge found, Respondent "declined to afford such benefits at that location because of a lack of productivity at that facility and disharmony in the historic bargaining relationship." I Respondent's antagonistic attitude toward affiliated locals also was mani- fested in the prior Sun Oil case at Clermont (228 NLRB 1063), and in the Sun Oil case at Owosso (228 NLRB 1972). edly stating they were not available. Since Respon- dent had an obligation to bargain with respect to the effects of its reorganization which resulted in dis- charges, I would find that its refusal to do so violated Section 8(a)(5) of the Act. DECISION STATEMEN OF I HF. CASE JOEl. A. HARMATZ, Administrative Law Judge: A hearing in this consolidated proceeding was conducted in Indian- apolis, Indiana, on January 4 and 5, 1977, pursuant to an Order dated November 15, 1976, whereby the Regional Di- rector for Region 25 consolidated a complaint issued on September 28, 1976, in Case 25 CA-8131, with a complaint issued on October 22, 1976, in Case 25-CA 8410 (formerly 9-CA-10551).' The respective complaints allege that Re- spondent violated Section 8(a)(3) and (1) of the Act by re- fusing to grant certain named employees special separation benefits in order to discourage their membership in the Union and violated Section 8(a)(5) and (1) of the Act by refusing to bargain, upon request, concerning special sepa- ration benefits with the Union representing the employees in the separate appropriate units. In duly filed answers Re- spondent denied that any unfair labor practices were com- mitted. After close of the hearing briefs were filed by the General Counsel and Respondent. Upon the entire record in this proceeding, including my observation of the demeanor of the witnesses while testify- ing and due consideration of the post-hearing briefs, I make the following: FINDINGS OF FACT 1. JURISDICTION Respondent is a Pennsylvania corporation with facilities at Clermont, Indiana, and Louisville, Kentucky, the loca- tions involved in this proceeding, as well as various other locations throughout the United States from which it is en- gaged in the wholesale sale and distribution of petroleum and related products. During the 12-month period preced- ing issuance of the complaints, a representative period, Re- spondent sold and caused to be shipped directly from its Clermont and Louisville facilities goods valued in excess of $50,000 to States other than Kentucky and Indiana. respec- tively. The complaints allege, the answers admit, and I find that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 11. THE LABOR ORGANIZATION INVOL.VED The complaints allege, Respondent at the hearing admit- ted, and I find that Local 7-937, Oil, Chemical & Atomic Workers International Union, AFL-CIO (OCAWIU), is a I The original charge in Case 25-CA-8131 was filed on August 2, 1976. The original charge in Case 25-CA-8410 (formerly 9 CA 10551), was filed on August 12, 1976. 62 SUN OIL COMPANY OF PENNSYLVANIA labor organization within the meaning of Section 2(5) of the Act. III. THE AI.I.E(iED UNFAIR LABOR PRACTIICES A. The Issues Did Respondent violate Section 8(a)(1), (3), and (5) of the Act by withholding severance benefits not available under the terms of subsisting collective-bargaining agreements from certain bargaining units represented by local unions affiliated with the OCAWIU while granting such benefits to employees represented by independent unions? B. Background Respondent maintains petroleum storage and distribu- tion terminals on a regional basis in various sections of the United States. It appears that truckdrivers, warehousemen, dispatchers, and garage and maintenance mechanics em- ployed at those terminals are, in most instances, represented in separate units by nonaffiliated independent labor organi- zations. Prior to 1975 employees at the Clermont and Louisville terminals had been separately represented by independent unions which were party to collective-bargaining agree- ments with Respondent, having effective terms of January 1, 1974, through December 31, 1976. While said agreements remained in effect employees at each location engaged in efforts to affiliate with teh OCAWIU. Following private affiliation votes conducted at each location the Board, after conducting separate elections, certified Local 7-431 OCA- WIU as the collective-bargaining representative of the Cler- mont employees on November 4, 1975, and as the collec- tive-bargaining representative of Louisville employees on June I I, 1976.2 In the meantime, beginning in 1975, Respondent com- menced economic studies, looking toward widespread reor- ganization of its distribution and sales operations to pro- mote greater efficiency in its marketing operations. It was contemplated that the innovations, when finally made, could result in job dislocations. Prior to the implementation of the changes company representatives appeared at the various terminals to notify employees as to the possible ad- verse impact of the reorganization, to afford assurances that all modifications would be economically oriented, and to stress that changes would be made with a view towards preserving as many jobs as possible. Ultimately, in the spring of 1976, the determination was made to proceed with the reorganization. This decision entailed the elimination of unit work in the various terminals represented by both in- dependent unions and those represented by affiliated labor organizations, including the OCAWIU. This proceeding does not relate to any form of job dislo- cation that may have occurred after the expiration of 1974- 2 Respondent opposed the affiliation at both locations. Indeed, at the Cler- mont facility Respondent declined to honor the union-secunty clause of the applicable collective-bargaining agreement. This conduct was the subject of a refusal to bargain charge which was sustained by the Board at 228 NLRB 877 (1977). 1976 collective-bargaining agreements. In effecting the elimination of jobs, resulting from implementation of the reorganization plan, Respondent, insofar as this record shows, complied fully with the seniority and related provi- sions of the various collective-bargaining agreements in the separate terminal units. Indeed, there is no claim, allega- tion. or evidence that Respondent in any sense engaged in unfair labor practices in the decision to give effect to the reorganization plan, its announcement, or its implementa- tion. Solely involved here is the question of whether Respon- dent violated Section 8(a)(1), (3) and (5) of the Act by its failure to provide special severance benefits to employees in the units represented by Local 7-937 OCAWIU in Louis- ville, Kentucky, and Clermont Indiana, respectively. The collective-bargaining agreements in effect at those locations and elsewhere at the time of the job dislocations in question did not sanction the extension of such benefits. Nonetheless, the General Counsel's claim of illegality in the denial of such benefits at said locations rests essentially upon Re- spondent's admitted opposition to the affiliation of the in- dependent unions at those locations with the OCAWIU and the fact that Respondent afforded such benefits to most other terminals whose employees were separately repre- sented by independent unions. A more detailed statement of the facts pertaining to de- velopment of the issue at the Clermont and Louisville loca- tions is set forth below. C. The Facts I. The Clermont terminal The first meeting between management and union repre- sentatives at Clermont concerning the effects of the reorga- nization program upon that unit was held on May 5, 1976.3 At that time, Normal Sortman, Respondent's manager of transportation in the Midwest, informed Local 7-937 repre- sentatives as to the possible elimination of three mainte- nance mechanics due to a contemplated change in the method of performing service station maintenance work as well as a reduction in the number of stations to be main- tained. Sortman also advised the Union as to the possible adverse effects of other aspects of the reorganization upon certain drivers and garage mechanics. At this meeting, Don Cox, the president of the Union, asked if separation benefits of the type offered to employees at the Huntington termi- nal4 would be made available to those dislocated at Cler- mont. The Company responded by indicating that as far as it could see at the time no severance package would be offered at Clermont because the contracts were different. On June 17 a second meeting concerning effects of the reorganization was held between management and union officials at Clermont. At that time Sortman explained that studies in progress pointed to the possible utilization of ex- change agreements which could require the transfer of I All dates refer to 1976 unless otherwise indicated ' Employees at Huntington were represented by an independent union. Earlier. in fall 1975. a change in operations at Huntington required transfer of two drvers. The Company offered a severance package at that time on a "one shot" basis. 63 DECISIONS OF NATIONAL LABOR RELATIONS BOARD product from Clermont to Robinson, Illinois. The Union was informed that the Company was considering the fol- lowing four possible alternatives to facilitate the exchange: (I) use of company drivers then located in Robinson, (2) continued use of Clermont drivers to deliver products from that terminal, (3) relocation of Clermont employees to Rob- inson, or (4) use of common carriers to deliver the product. At that meeting the Union was also informed that two rather than three maintenance employees as previously an- nounced would be separated. At this point the Union again inquired if there would be any separation benefits made available to the affected maintenance men. The Union was informed that the Company did not plan to make benefits available, but that it would be willing to negotiate concern- ing that matter.5 On June 29 the third and final meeting was held at Cler- mont concerning the effects of the reorganization plan on jobs at that facility. Respondent informed the Union that, as had been contemplated, a decision was made to move certain product distribution responsibility from Clermont to its Robinson, Illinois, terminal, and that the Company had exercised its option to utilize drivers then employed at the Robinson terminal, thereby eliminating the positions of three drivers and one garage mechanic from the Clermont unit. The Union again asked if anything would be done for represented employees to be adversely effected. Respondent then inquired if the Union had a specific proposal. After a recess the Union presented a formal demand for separation pay based on length of service. The Company replied that it still did not wish to offer benefits at that particular time but indicated that if the Union wished to bargain the Company was amenable to negotiations. This response was appar- ently memorialized by letter dated July 2, 1976, from J.W. Dulaney, a human relations representative, to Donald Cox, which recited in material part as follows: We have explored and carefully considered your above requests and have concluded that no sound basis exist for granting it. However, management remains willing to again meet on this subject if you wish. The final labor-management meeting at Clermont mate- rial to this proceeding was held on July 20 and pertained to management's decision to transfer certain delivery opera- tions from Clermont to Dayton, Ohio. When the Union again raised the severance pay issue Respondent indicated that such benefits would not be made available at that time. In response to an inquiry by Cox the Union was advised that the Company had paid severance pay at some places but not at others. Don Cox, in describing generally the Company's posture concerning severance pay benefits, relates that while the Company did not agree to provide the separation benefits it The above finding is based upon the credited testimony of Normal Sort- man. Contrary thereto, the union president, Don Cox, testified that he was informed flatly by management that there would be no severance benefits at Clermont. To the extent that his testimony conflicts with that of Sortman, I credit the latter. Cox struck me as laboring under a questionable capacity for recollection, while prone to substitute self-serving interpretation, opinion. and argument for matters which he could not clearly recall. Furthermore, Sortman's account, when considered against other aspects of the record, seemed the more probable. never closed the door on discussion of any union proposal with respect to it. Indeed, later, when contract renewal ne- gotiations opened, although the union proposal omitted any request for severance benefits Cox admits that at a negotiat- ing session on December 17 the Company expressed its willingness to receive at the next bargaining session any proposal the Union might make on the issue of severance pay. The Union never made any such proposal. 2. The Louisville terminal Employees at Respondent's Louisville facility, who for many years had been represented by an independent union, apparently commenced efforts to affiliate with the OCA- WIU subsequent to such activity at Clermont. On March 28, 1976, an internal membership vote was taken in which the affiliation proposition was favorably received. On May 26, 1976, an election was conducted on an RM petition filed by Respondent, following which Local 7-937 OCAWIU was certified as bargaining representative for the employees at the Louisville terminal. The meetings in Louisville to apprise employees of the possible effects of the reorganization upon their unit opened on March 24. At that time regional and local representa- tives of management met with union representatives, indi- cating that the Company was considering a product ex- change program whereby product would be purchased from another oil company whose bulk station was in Lex- ington, Kentucky. The economics of such action and its possible impact upon the Louisville unit in terms of the most efficient way of obtaining product from the Lexington source and distributing it was discussed, as was the possibil- ity of utilizing a common carrier to haul the product. That meeting was followed by another labor-manage- ment meeting held on May 7. At that time Respondent announced that it would implement the Lexington ex- change agreement, and that in consequence of this arrange- ment the positions held by seven drivers and one garage mechanic would be eliminated, with two of the drivers to be relocated to Lexington. It was also pointed out by manage- ment that a common carrier would be utilized to haul prod- uct out of Lexington in the interest of avoiding downtime on company equipment which would be sustained were a company driver used. With this information the Union re- quested severance pay. The answer afforded on behalf of Respondent was that such benefits would have to be bar- gained for, that it was a negotiable item, but that the Com- pany could not discuss it at that time because of the im- pending election on the affiliation question. On July 15, after certification of Local 7-937 OCAWIU, an information meeting was conducted among all available employees represented by the Union. At that time the em- ployees were informed that as a result of another exchange agreement with Pennzoil an additional truckdriver job would be eliminated from the Louisville unit. The Union again asked whether the individual affected would receive severance pay. A conflict in testimony exist as to the nature of the Company's response. Bruce Cordy, the Union's pres- ident, insists that Frederick Zwegat, Respondent's area transport manager for the central region, responded to the request for severance pay by indicating that to his knowl- 64 SUN OIL COMPANY OF PENNSYLVANIA edge "no OCAW affiliate would be offered severance pay . . it was a gift of the company."6 I was not convinced that Cordy, Andrews, and Vaught provided an accurate account of what was said on that occasion. In my opinion, the testi- mony of Zwegat, as corroborated by Robert Ankeny, the transport supervisor of the Louisville terminal, was more logically consistent with other aspects the record, and gen- erally I deemed them as the more reliable witnesses.' Con- trary to the evidence offered through the employee wit- nesses, I find that Respondent did not in absolute terms foreclose the grant of severance benefits to OCAW units or make any statements to that effect. Instead I find that when Cordy raised the severance pay issue Zwegat indicated that no such benefits would be extended "at the time." This was followed by Cordy's inquiry as to whether any other OCA- WIU unit had received this special termination package. Zwegat responded by indicating that, although he could speak only for his area, to the best of his knowledge none had received it. Finally, Cordy asked whether Zwegat was aware of any other units which were not affiliated with OCAW which had received a special termination package. Zwegat responded affirmatively without mentioning specific terminals. Cordy concedes that after the July 15 meeting the Union never again requested separation benefits. D. Concluding Findings 1. The alleged refusal to bargain The separate complaints covering the Louisville and Clermont units include substantially identical allegations that Respondent violated Section 8(aX5) and () by refusing "... to negotiate and discuss in good faith with the Union matters with respect to early retirement, employment bene- fits continuation or termination benefits and related mat- ters." No challenge is made to Respondent's bargaining stance with respect to any other matter or aspect of its per- formance during the time frame covered by this proceeding. There is no dispute that the units at Clermont and Louis- ville were covered by a subsisting collective-bargaining agreement at all times material to this allegation. It is also undisputed that severance benefits were not authorized by those contracts, and accordingly the Union, in seeking those benefits, was in effect making a demand for economic concessions over and above the Employer's contractual ob- ligation. Under established statutory policy employers, during the term of a collective-bargaining agreement, as a general proposition are under no statutory obligation to meet and confer with respect to proposals by a union to alter the existing employment terms. On the other hand, it is also true that, notwithstanding the existence of a contract, ab- sent a waiver employers must negotiate as to the effects of * The General Counsel attempted to corroborate Cordy through Louisville employees Glen Andrews and Edward Vaught. ' It is significant that Ankeny, when called as an adverse witness by the General Counsel, related his account of the disputed colloquy during the July 15 meeting before any other witness was examined as to that subject matter. His testimony conformed in all substantial respects with that subse- quently given by Zwegat. unilateral changes involving mandatory subjects of collec- tive bargaining which have a detrimental impact upon the collective- bargaining unit. It is in the light of this latter obligation that the General Counsel's refusal to bargain al- legations shall be assessed. Respondent, although refusing to agree, by virtue of the credible evidence engaged in no conduct in connection with the severance pay issue reflective of a breach of the duty to bargain in good faith. The issue was discussed in a context in which neither Union at either location offered anything in exchange, and in view of the impending contract renewal negotiations no impropriety emerged, for the Company did not foreclose discussion but repeatedly expressed a willing- ness to further negotiate. The evidence does not substanti- ate the alleged 8(a)(5) and (1) allegations pertaining to the units at Clermont and Louisville, and those allegations shall be dismissed. 2. The alleged discrimination The claim that the refusal to grant severance benefits at Clermont and Louisville violated Section 8(aX3) and (1) requires consideration of two alternative theories. First, it is necessary to assess the General Counsel's contention that independent evidence substantiates the view that this action was specifically motivated by Respondent's opposition to the affiliation votes at those locations. If not, the question nonetheless remains as to whether such allegations may be sustained on the basis of Radio Officer's Union of the Com- mercial Telegraphers Union, A.F.L. [Bull Steamship Co.] v. N.L.R.B., 347 U.S. 17, where the Board was authorized to find 8(a)(3) violations with respect to certain forms of em- ployer conduct so prejudicial to employee interests as to be unlawful despite the absence of specific proof of a pro- scribed motivation. As for the evidence bearing upon specific motivation, the General Counsel's claim of discrimination derives its pre- dominant thrust from Respondent's admitted opposition to the decision by employees at Clermont and Louisville to affiliate with the OCAWIU.' This, together with Respon- dent's grant of a severance package at other terminals rep- resented by unaffiliated independent labor organizations' provides impetus to the General Counsel's position in this ' Judy Droddy, an employee at the Louisville facility and an official of the Union representing employees at that location, testified that in April she had a conversation with Clifton E. Sawrie, Respondent's terminal supervisor at that location. Droddy testified, over Sawne's denial, that if the employees decided to affiliate with OCAW the Company would be more than likely to go to outside hauling contractors because studies supported the view that their use would be cheaper. Although I credit Droddy over Sawrie in this respect as the more believable witness, this statement was made in a casual conversation, in which personal views and opinions were being exchanged between Sawrne, Droddy, and another employee. In my opinion it would be a gross abuse of the inference drawing process to telescope this isolated remark into a conclusion that Respondent's general policy with respect to severance benefits, as subsequently manifested, was tainted by the animus evident in this ill-considered statement by a relatively low level supervisor. 9 It is clear. however, that Respondent did not afford a severance package to all units represented by independent labor organizations. Thus. uncontra- dicted evidence establishes that at the Detroit, Michigan terminal, such benefits were requested by an independent union, but denied in connection with layoffs resulting from the 1976 implementation of reorganization mea- sures. Respondent's credited testimony indicates that it declined to afford such benefits at that location because of a lack of productivity at that facility and disharmony in the histonc bargaining relationship. 65 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respect. However. when considered against the total record these factors do not support a conclusion that Respondent's disparate action was specifically motivated by a desire to vent reprisal against employees at Louisville and Clermont because of their designation of the OCAWIU or that such measures were designed to undermine the OCAWIU's rep- resentative status at those facilities. Foremost to my refusal to draw an inference to that ef- fect is my belief of Respondent's testimony as to the reason for its actions in this regard. On balance, the suspicion gen- erated by the affiliation background is offset entirely by the highly plausible nature of, and the straightforward and honest testimony of the witnesses offered to substantiate. the defense. Consistent therewith, I find that the decision as to whether severance benefits would be granted at a par- ticular locale was made after examination of the situation at each terminal. including the bargaining relationship at the individual facility. Where the bargaining relationship at a particular facility had been harmonious and cooperative the benefits were offered. At Clermont and Louisville, like that at Detroit, where the relationship between union and management had been difficult, separation benefits were withheld. More specifically at the Clermont facility, man- agement's experience at that location had been marked by persistent efforts on the part of the Union to resist Respon- dent's attempts to increase efficiency and profitability and to accept adjustments in the contract which unions at other locations were willing to accept. It also appears that nego- tiations leading to execution of the 1973 agreement were protracted and difficult. Based on its past experience at Clermont, the Company anticipated that the contract re- newal negotiations to open in late 1976 would be difficult and complicated. This was predictable not only from past experience but also because the OCAWIU was now a par- ticipant, and Respondent anticipated that the Internation- al's bargaining policy would include demands beyond the relm of local need. Under such circumstances Respondent deemed the separation benefits at Clermont as an effective economic bargaining item which could be utilized in the contract renewal negotiations. As was true of Clermont, the situation at Louisville, from management's point of view, was assessed as also lacking compatibility, with the Union assuming an inflexible pos- ture with respect to management demands in the past. Here too, in view of the intervention of OCAWIU with its na- tional policy bargaining, Respondent anticipated difficult negotiations on contract renewal and elected to withhold the severance pay benefit issue as an economic tactic for use in that collective-bargaining process. Nonetheless, the inquiry does not end simply because the proof fails to establish an unlawful motive. In the years following its decision in Radio Officers' Union, supra, the Supreme Court had expounded in a number of different contexts upon the circumstances in which violations of Sec- tion 8(a)(3) inure, despite the absence of independent proof of an intent to encourage or discourage union membership. Thus, while such independent proof is lacking here, it is necessary to explore whether a violation exists under that line of cases. Pivotal to this examination is the summary of governing principles articulated by the Supreme Court in N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, at 34: From this review of our recent decisions. several principles of controlling importance here can be dis- tilled. First, if it can reasonably be concluded that the employer's discriminatory conduct was "inherently de- structive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer intro- duces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is "comparatively slight." an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substan- tial business justifications for the conduct. Thus, in ei- ther situation, once it has been proved that the em- ployer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him. Here, insofar as the credited evidence discloses, Respon- dent's alleged discriminatory action was taken with respect to a potential conflict in bargaining and represented an ef- fort to serve the Employer's interest therein. The Board has been admonished by the Supreme Court to proceed cau- tiously before condemning conduct where invoked to fur- thef'a party's position at the bargaining table. In N.L.R.B. v. Insurance Agents' International Union, AFL CO, 361 U.S. 477, 497-498 (1960), the Court criticized the Board for its per se regulation of the economic weapons utilized in connection with a bargaining dispute, stating as follows: when the Board moves in this area ... it is functioning as an arbiter of the sort of economic weapons the par- ties can use in seeking to gain acceptance of their bar- gaining demands. It has sought to introduce some stan- dard of properly "balanced" bargaining power, or some new distinction of justifiable and unjustifiable, proper and "abusive" economic weapons into the col- lective bargaining duty imposed by the Act.... We have expressed our belief that this amounts to the Board's entrance into the substantive aspects of the bargaining process to an extent Congress has not coun- tenanced. Later, in reversing the Board and holding that an em- ployer does not violate Section 8(a)(1) or 8(a)(3) when, after a bargaining impasse, represented employees are locked out for the sole purpose of bringing economic pressure to bear in support of legitimately held bargaining positions, the Su- preme Court, in American Ship Building Co. v. N.L.R.B., 380 U.S. 300, 316-317 (1965) again condemned Board regu- lation of a bargaining stratagem. In doing so the Court stated as follows: The Act prohibited acts which interfered with, re- strained, or coerced employees in the exercise of their rights to organize a union, to bargain collectively, and to strike; it proscribed discrimination in regard to ten- ure and other conditions of employment to discourage membership in any labor organization. The central purpose of these provisions was to protect employee self-organization and the process of collective bargain- 66 SUN OIL COMPANY OF PENNSYLVANIA ing from disruptive interferences by employers. Having protected employee organization in countervailance to the employer's bargaining power. and having estab- lished a system of collective bargaining whereby the newly coequal adversaries might resolve their disputes, the Act also contemplated resort to economic weapons should more peaceful measures not avail. Sections 8(a)(l) and (3) do not give the Board a general author- ity to assess the relative economic power of the adver- saries in the bargaining process and to deny weapons to one party or the other because of its assessment of that party's bargaining power. From the foregoing it is apparent that, at a minimum, cer- tain forms of economic action on the part of employers to protect their positions in collective bargaining are beyond. the interdict of Section 8(aX3) and (I) of the Act, and must, perforce, be deemed "to serve legitimate business interests." It is true that a lockout involves a type of economic pres- sure distinct from the conduct under consideration here. But few would argue that Respondent's disparate action with respect to severance benefits had an impact even ap- proaching the offense to employee rights evident in any form of lockout. Aside from infringing upon an otherwise legitimately in- voked business judgment calculated to influence collective bargaining, to find an inherently bad motive here would also clash with Board precedent in which deference has been extended to realities faced by employers operating on a multifacility basis, dealing with different labor organiza- tions as the representative of various employees in a num- ber of distinct collective-bargaining units. With respect to such employers, the quality of the bargaining relationships will undoubtedly vary from those of harmony and mutual cooperation to those marked by acrimony to the point of creating considerable labor relations problems on a con- tinuing basis. The law has not been construed by the Board so inflexibly as to require employers to deal equally with exclusive representatives in all units and to forego the exer- cise of munificence selectively to maintain the spirit of har- mony evident in certain of its bargaining relationships.' 0 In Anheuser-Busch, Inc., 112 NLRB 686, 690-691 (1955), the Board upheld the presumptive lawfulness of an employer's disparate action in granting a benefit to one unit repre- sented by one labor organization while withholding that benefit from a second unit represented by a different labor organization. In recognition of the various legitimate cir- cumstances under which an employer might act in that fashion, the Board stated as follows: In the situation with which we are here confronted the disparity of treatment stems from a grant of an economic benefit to employees in a separate bargaining unit, represented by its own bargaining representative, without according the same treatment to employees in another separate bargaining unit, represented by another to "The Act does not impose upon an employer the obligation to grant or confer . . . benefits solely on the basis that like benefits were conferred elsewhere." The B. F Goodrich Company, 195 NLRB 914, 915 (1972). See alo Swutrand Castings Company and Sundstrand Corporation, 209 NLRB 414, 427 (1974); Meredith Corporation, 194 NLRB 588 (1971); Bancroft- Whitney Co., Inc., 214 NLRB 57, 61 (1974). bargaining representative. That the Act was so designed as to afford groups of employees of an employer the utmost freedom in their choice of a bargaining repre- sentative by permitting them to select such representa- tives in separate bargaining units, indicates that the statutory scheme did not contemplate that disparate treatment among employees in different separate units along unit lines would, by itself, give rise to a finding of discrimination. To hold otherwise would create a wholly unrealistic requirement that would impose in- tolerable conditions on an employer who had concur- rent bargaining relationships with separate bargaining agents representing separate units of employees in the same or other plants of the employer. As we view it, an untold variety of factors and circumstances may exist which from the very nature of the different units and from the differences in bargaining relationships would render any attempt at inferring discriminatory motiva- tion both speculative and futile. In our opinion, where. as here, the employer accords an economic benefit to the employees in a separate unit represented by its own bargaining agent without according like treatment to the employees in another unit represented by another bargaining agent, there is clearly no inherent unlawful intent. In such circum- stances, as no such inherent unlawful intent exists, an inference of such motivation cannot be drawn from the disparity of treatment alone: it must necessarily be predicated on other independent evidence. In sum, the.right to organize and bargain collectively does not include guaranteed equality of employer conces- sions through bargaining among various bargaining units, and statutory remedies do not save employees harmless from economic disadvantages sustained in consequence of an employer's exercise of economic perogatives as a counter measure to the tactical actions manifested by their statutory bargaining agent." Finally, the right to hold the line and to preserve for tactical reasons benefits or concessions in ad- vance of collective bargaining where the bargaining history deems that a prudent course cannot be distinguished in terms of its legitimacy from other lawful actions taken by employers in more direct support of their bargaining posi- tions. I find that the grant of severance benefits to various units in consequence of the 1976 cutbacks resulted, at best, in only a "comparatively slight" impairment of the statu- tory rights of employees at the Louisville and Clermont ter- minals, where such benefits were denied. Accordingly, there being no substantial proof that the Employer's conduct in this regard was motivated by a desire to eliminate the OCA- WIU as bargaining representative at the latter locations or as a reprisal for employee affiliation with that labor organi- zation at those sites, it is found that the General Counsel has failed to establish that Respondent violated Section i" In American Ship Conmpany v. N.L.R.B., supra at 312 313, the Supreme Court stated: "It is true that the employees suffered economic disadvantage because of their union's insistence on demands unacceptable to the em- ployer, but this is also true of many steps which an employer may take during a bargaining conflict, and the existence of an arguable possibility that someone may feel himself discouraged in his union membership or discrmi- nated against by reason of that membership cannot suffice to label them violations of Section 8(aX3) absent some unlawful intention." 67 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 8(a)(3) and (1) of the Act in this respect. Accordingly, it shall be recommended that the complaint herein be dis- missed in its entirety. CONCI.USIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent did not violate Section 8(a)(l), (3), or (5) of the Act by refusing to bargain with the Union represent- ing employees in the units at Louisville, Kentucky, and Clermont, Indiana, with respect to the severance pay bene- fits or by refusing to grant such benefits to employees at said terminals. Upon the foregoing findings of fact, conclusions of law, and the entire record in this proceeding and pursuant to Section 10(c) of the Act I hereby issue the following recom- mended: ORDER'2 It is hereby ordered that the complaint herein be, and it hereby is, dismissed in its entirety. 12 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 68