Charles Manufacturing Company

CHARLES MANUFACTURING COMPANY Charles Manufacturing Company and United Furni- ture Workers of America, AFL-CIO. Cases 15- CA-6640-2 and 15-CA-6815 September 19, 1979 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDAI.E On June 18, 1979, Administrative Law Judge Rob- ert Cohn issued the attached Decision in this proceed- ing. Thereafter, the General Counsel and the Charg- ing Party each filed exceptions and supporting briefs, and Respondent filed an answering brief. 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. 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. I We agree with the Administrative Law Judge that Respondent did not violate Sec. 8(aX5) of the Act when it automatically implemented a set of wage increases for unit employees on October 10, 1977. Respondent had unconditionally committed itself to making those wage increases when its president promised both their specific amount and effective date in a speech to employees on October 11, 1976, prior to the representation election cam- paign which resulted in the Union's certification. The wage increases there- upon became established "conditions of employment." See Libery Telephone & Communications, Inc., 204 NLRB 317 (1973). Respondent did not violate its bargaining obligation when it subsequently implemented the increases as promised because its conduct was devoid of any element of discretion. See State Farm Mutual Automobile Insurance Company, 195 NLRB 871, 890 (1972). This situation is distinguishable from cases wherein an employer continues, after a bargaining agent has been selected, unilaterally to exercise its discretion with respect to wage increases granted pursuant to certain wage review programs. See, e.g., Allis Chalmers Corporation, 237 NLRB 290 (1978). The Board has held that in such cases "[w]hat is required is a main- tenance of preexisting practices, i.e., the general outline of the program, however, the implementation of that program (to the extent that discretion has existed in determining the amounts or timing of the increases), becomes a matter as to which the bargaining agent is entitled to be consulted." (Empha- sis supplied.) See Oneita Knitting Mills, Inc., 205 NLRB 500, fn.l (1973); and see N. LR.B. v. Katz, Benne, etc., dibla Williamsburg Steel Products Co, 369 U.S. 736, 746 (1962). DECISION STATEMENT OF THE CASE ROBERr COHN, Administrative Law Judge: The above- captioned consolidated cases came on for hearing before me in Dothan, Alabama, on December 6, 1978, upon due notice. The issues presented for decision are: (1) whether Charles Manufacturing Company (Respondent herein), vio- lated Section 8(a)(5) and (1) of the National Labor Rela- tions Act, as amended (herein the Act), by granting certain wage increases to its employees in an appropriate unit rep- resented by the Union' in October 1977 during collective- bargaining negotiations with the Union; (2) whether, dur- ing the period from January 23-March 31, 1978, Respon- dent violated the same sections of the Act by failing and refusing to meet with the Union with sufficient frequency; (3) whether Respondent violated the same sections of the Act by refusing to continue negotiations with the Union following the receipt by Respondent of a petition from a majority of the employees in the unit indicating that they no longer wished to be represented by the Union; and (4) whether the economic strike called by the Union, on or about July 11, 1977, was converted into an unfair labor practice strike as a consequence of Respondent's aforesaid unfair labor practices.2 At the hearing the parties entered into a stipulation of facts which constitutes the entire record in the case. There- after, counsel for the General Counsel and counsel for Re- spondent filed post-hearing briefs which have been duly considered.' Upon the entire record, including arguments of counsel, I hereby make the following: FINDINGS AND CONCLUSIONS' 1. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts At all times material Respondent has operated a plant in Dothan, Alabama, where it is engaged in the manufacture and sale of furniture. Prior to 1977 its production and main- ' United Furniture Workers of America, AFL-CIO 2The original charge in Case 15-CA-6640-2 was filed October 17, 1977; the original charge in Case 15-CA-6815 was filed March 16, 1978. The original Order consolidating cases and notice of hearing was issued Apnl 25. 1978, and was amended on August 25, 1978. 3 Also subsequent to the hearing counsel for Respondent filed a motion to correct the record in certain respects, in which it was stated that such motion was made with prior knowledge and concurrence of counsel for the General Counsel. No objections to such motion having been filed by any party, the motion is hereby granted. ' There is no issue in this proceeding respecting the jurisdiction of the National Labor Relations Board or of the status of the Union as a labor organization within the meaning of the Act. The complaint alleges sufficient facts respecting the interstate operations of Respondent which are admitted in the answer of Respondent, upon which I may and do hereby find that Respondent is and has been at all times material an employer engaged in commerce within the meaning of Sec. 2(6) and (7) of the Act. The complaint alleges, the answer admits, and I find that at all times material the Union is a labor organization within the meaning of Sec. 2(5) of the Act. 245 NLRB No. 12 39 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tenance employees were not represented for purposes of collective bargaining by a labor organization. On October 11I, 1976, the employees were called together by Respondent's president, Charles Heyman. Jr., for the purpose of announcing to them certain changes in their wages and working conditions.5 Among other changes an- nounced by Heyman at that time were: (I) a discontinu- ance of the present retirement plan; (2) the institution of "funeral pay;" (3) an addition of"call-in pay": (4) a change in insurance coverage and contribution; and (5) a wage in- crease above the regular pay to employees who reach the age of 50 and have 10 years of continuance service on or before October 10, 1976, plus a general wage increase of approximately 27 cents per hour as of that date. It was also stated by Heyman, "On October 10, 1977, all hourly rated employees will receive an increase of 20 cents per hour and the hiring rate will go to $2.95 per hour." The record shows that on January 24, 1977, the Union filed a petition with Region 15 of the National Labor Rela- tions Board for an election to be held at Respondent's plant in a production and maintenance unit. Pursuant to such petition the Regional Director for Region 15 of the Na- tional Labor Relations Board conducted, on March 17, 1977, an election which the Union won. Consequently, on or about March 25, 1977, the said Regional Director certi- fied the Union as the exclusive collective-bargaining repre- sentative of the employees in the aforesaid production and maintenance unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. The record shows that commencing on or about March 27, 1977, the Union, by letter, requested collective bargain- ing of Respondent, and the negotiations commenced on April 18, 1977, and continued until March 31, 1978. During this period the Company and the Union met in negotiations 24 separate times, the length of such negotiations ranging from 4 to 4-1/2 hours. During this period of time each party made proposals and counterproposals, and agreement was reached on a substantial number of provisions on a proposed contract. However, complete agreement was nev- er reached. On or about March 31, 1978, Respondent re- fused and at all times thereafter is continuing to refuse to meet and bargain collectively with the Union because Re- spondent was presented, on or about March 29, 1978, with a petition signed by a majority of the employees in the bargaining unit which read: We want to get rid of the U.F.W. Union. We are the people that wish to petition for a revote (sic) on a union at the company that we work at. Meanwhile, on or about July 11, 1977, certain employees in the unit ceased work concertedly and went on strike and since that date have engaged in and are engaging in said strike. At its inception the strike was economically moti- vated. However, as noted above, the General Counsel con- tends that as a consequence and result of the Employer's alleged unfair labor practices commencing in October 1977 the strike became an unfair labor practice strike. ' As Heyman described it, he had some "good news and bad news" for them, but that the good news outweighed the bad news by many times. B. The Alleged Unilateral Wage Increase As previously described. on or about October 12, 1976. the president of Respondent, in a meeting in the plant with unit employees, announced a 20-cent across-the-board wage increase, effective October 10, 1977. During the nego- tiations between the Company and the Union which com- menced in late March 1977 which continued through March 1978, the parties concentrated initially on noneco- nomic items, putting off negotiations on monied items until the end of the negotiations. Accordingly. when time came in October 1977 for the implementation of the wage in- crease there had been no bargaining respecting that subject matter in the negotiations. On September 27, 1977, the president of Respondent wrote the Union's chief negotiator the following letter: I'm sure you and your committee are aware of our announcement last October 12. concerning the $.20 across the board wage increase, effective October 10, 1977. Unless you present valid reasons why we should not go ahead with the previously announced increase we will plan on implementing said increase effective October 10, 1977. Of course this increase would be without prejudice to further bargaining in our efforts to reach a contract. By letter dated September 30, 1977, the union represent- ative wrote the following letter in reply: I am in receipt of your letter of September 27, 1977 in which you advise that you plan to implement a 20C across-the-board wage increase on October 10, 1977. It is our position that such increase is too little and too late. It is also ill timed as we are currently in nego- tiations in an effort to reach a Union-Company Agree- ment. We feel that this is an issue subject to collective bar- gaining which should be properly discussed with the Union's committee at the bargaining table. Our Union will be proposing a substantial wage increase and it will be our proposal that such substantial wage in- crease be made retroactive to April 18, 1977. We look forward to discussing this matter with you at the bargaining table. There is nothing in the record to disclose that there were any negotiations at that time concerning the wage increase, and, accordingly, the Company implemented such wage in- crease on October 10, 1977, as announced. It is the conten- tion of the General Counsel that such wage increase consti- tuted a unilateral change in conditions of employment in violation of Section 8(a)(5) of the Act. It is the position of Respondent that since the announcement of such wage in- crease occurred in 1976, prior to the advent of the Union, the increase in 1977 was part of a preexisting program of wages and benefits, so that the implementation of the wage increase did not constitute a change in wages, hours, or working conditions in violation of the statute. In other words, Respondent contends that because the Employer, had committed itself to such wage increase the implementa- tion thereof was a mere continuation of the status quo, cit- ing N.L.R.B. v. Benne Katz, Alfred Finkel, and Murray 40 CHARLES MANUFACTURING COMPANY Katz, d/bla Williamshurg Steel Products Company. 369 U.S. 736 (1962). 6 Analysis and Concluding Findings In N.L.R.B. v. Katz, supra, the Supreme Court held that generally an employer may violate Section 8(a)(5) of the Act by making a unilateral change in conditions of employ- ment without necessarily finding the employer guilty of overall subjective bad faith. There is no allegation or con- tention of overall bad faith on the part of the Employer in this case. Rather, as previously noted, the issue on this as- pect of the case is whether Respondent's implementation of the wage increase in October 1977 constituted a change in working conditions in view of the announcement of such wage increase to the employees in October 1976. In Liberty Telephone & Communications, Inc., and Cen- tury Telephone Enterprises, Inc.,7 the Board, in reversing the Administrative Law Judge, stated as follows: Contrary to the Administrative Law Judge, logic and relevant authority decree that the definition of 'condition of employment' includes not only what the employer has already granted, but also what he 'pro- poses to grant.' The terms and conditions of employ- ment in a labor contract are fixed not by rigid formulas or stipulations but by the relationship between the em- ployer and the employees. It is the normal foreseeable expectations arising out of the relationship, including the expected weekly wage, the usual promotion policy, anticipated wage increases, customary bonuses and va- cations, and other announced or expected benefits, which constitute the terms and conditions of employ- ment. Hence in determining whether a particular mat- ter or program is a term and condition of employment which is subject to collective bargaining, the Board and courts have properly considered whether the pro- gram is a reasonable expectancy of the employment relationship, i.e., whether the program in fact acted as an inducement to employees to accept or continue em- ployment. In the Liberty Telephone case the Board found a Section 8(aX5) violation in respondent's action there in withdrawal of a previously announced wage increase even though it was subject to Internal Revenue Service approval since it created "a reasonable expectation of an increase to take place upon a contingency."' The Board concluded at 318: . . .the cancellation of the wage increase to the unit employees after they had selected the Union as their exclusive bargaining representative without consulting the Union or affording it an opportunity to negotiate constituted a change in their working conditions. By effecting such change without prior consultation with the certified bargaining representative of the employ- ees, Respondents violated Section 8(a)(5) of the Act and also interfered with the employees' right to have 'The parties stipulated that there had been no impasse on this issue, so there is no issue that the increase was implemented in connection with an impasse in negotiations. 7204 NLRB 317. 318 (1973). a In the instant case. of course. no such contingency existed. their representative consulted about changes in their conditions of employment in violation of Section 8(a)( 1 ) of the Act. In the instant case the Employer notified the Union of its intent to implement the wage increase unless the Union presented valid reasons why the Company should not carry out its promise and further stated that the increase would be without prejudice to further bargaining. Thus, Respon- dent clearly afforded the Union an opportunity to negotiate concerning the matter.9 There is no contention or allegation that Respondent subsequently refused to bargain about this or any other condition of employment in the negotiations. In view of all of the foregoing I find that Respondent did not violate Section 8(a)(5) of the Act by implementing the wage increase to unit employees on or about October 10. 1977. shall therefore recommend that this allegation and the complaint be dismissed. C. The Alleged "Frequency of Meetings" Violation The complaint alleges that since on or about January 23. 1978, Respondent refused to bargain with the Union in vio- lation of the Act by failing and refusing to "meet at reason- able times and confer in good faith with respect to wages, hours, and other terms and conditions of employment." The facts show that during the time under consideration, i.e., January 23, 1978, until March 31, 1978 (when Respon- dent withdrew from bargaining because it was presented with a petition from a majority of its employees, discussed more fully infra), the parties met on five separate occa- sions. '°0Additional meetings were scheduled in advance for April 3 and April 13 but were not held due to the filing of the employees' petition. The record reflects that during the period in question the Union requested Respondent to meet more frequently, to which Respondent's reply was, generally, that it was not available to meet more frequently than the dates which it suggested. On at least one occasion it cited as a reason for its failure to meet the fact that the company president was away on a business trip, which was undisputed in the rec- ord. The record also reflects that the union representative stated that he was unavailable to meet on five dates in March. The record further reflects that on one occasion Respondent's attorney, noting that a scheduled Board hear- ing for March 9 had been postponed, suggested to the union representative that an additional bargaining session be held on March 8. Finally, I note the statement in the stipulation that: The Respondent does not contend that, by reason of the schedules of its committee members, it was unable 'Thus, this case is clearly distinguishable from Chatham Manufacturng Company, 172 NLRB 1948 (1968), relied upon by counsel for the General Counsel, where the Board found that respondent made changes in the rates of pay of unit employees without giving the union advance notice of such changes. Compare Allis Chalmers Corporation. 237 NLRB 290. 291 (1978), where the Board found that "unilateral actions are violative even when they are made pursuant to an established company policy. f they are taken without affording the representative an opportunity to bargain. ° Januarv 23, February 9. February 27, March 8. and March 13. 41 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to meet more frequently than it did in the period be- tween January 23, 1978 and March 31, 1978, but con- tends that the number of times it agreed to meet was reasonable under the circumstances. Analysis and Concluding Findings Pertinent to the issue under consideration is the require- ment in the statute for the parties "to meet at reasonable times and confer in good faith with respect to wages, hours, and other other terms and conditions of employment."" As previously noted, there is no allegation in the com- plaint of overall lack of good faith bargaining, surface bar- gaining, or independent violations of Section 8(a)(1) of the Act. The record reflects that during the overall period of negotiations the parties met on numerous occasions and exchanged proposals and counterproposals-reaching agreement on some and not reaching agreement on others. No doubt, after a period of extended negotiations the Union was becoming more impatient and was extremely desirous of winding up the negotiations and arriving at an agreement. In a different context, one might view the Com- pany's conduct in not scheduling more meetings during the critical period to be further evidence of bad-faith bargain- ing. However, in the backdrop of the Company's overall conduct, previously described, its willingness to schedule a meeting voluntarily upon the postponing of the Board hear- ing, and the Union's unavailability on at least five occasions in March lead me to the conclusion that Respondent's con- duct in this regard was, under the circumstances, in reason- able compliance with the requirements of the statute, and I will therefore recommend that this allegation of the com- plaint be dismissed. D. The Alleged Refusal To Meet with the Union after March 31, 1978 The complaint alleges that since on or about March 31, 1978, and at all times thereafter Respondent has refused and is continuing to refuse to meet at any time and bargain collectively with the Union as the exclusive bargaining rep- resentative of the employees in the appropriate unit. As previously noted, Respondent concedes that it has refused to meet and negotiate with the Union since on or about March 31, 1978, in view of the receipt by it on March 29, 1978, of the petition signed by a majority of the unit em- ployees cited above.' In my view, the disposition of this issue is controlled by the principles explicated by the Board in Southern Wipers, Inc.,:" The principle applicable in the present situation has long been established. After the certification year has run, an Employer may lawfully withdraw recognition from an incumbent union because of an asserted doubt of the union's continued majority of (sic) its assertion of doubt is raised in a context free of unfair labor prac- " See Sec. 8(d) of the Act. n1 Thereafter, in April Respondent filed with the Regional Office of the Board, an RM petition (15-RM-338). Such petition was dismissed by the Region because of the issuance of the instant complaint. 1 192 NLRB 816 (1971). tices and is supported by a showing of objective con- siderations providing reasonable grounds for a belief that a majority of the employees no longer desire union representation. Here the Respondent engaged in no in- dependent unfair labor practices and Respondent's re- fusal to meet with the Union occurred more than a year after the certification. Consequently. the issue to be resolved is whether or not those 'objective consider- ations' existed justifying Respondent's doubt concern- ing the Union's majority status. Here, as in Southern Wipers, Respondent and the Union engaged in a number of bargaining sessions during the cer- tification year from March 1977 through March 1978. While such sessions were not fruitful as far as resulting in a collective-bargaining agreement, there is no context of un- fair labor practices or evidence of employer instigation or participation in the petition signed by a majority of the employees in the unit to the effect that they no longer desire to have the Union represent them in collective bargaining. Under the circumstances, these factors provide, in my opin- ion, "an objective basis which would properly furnish rea- sonable grounds for the Respondent to believe that the Union had lost its majority status."' Accordingly, I find that Respondent did not violate Section 8(a)(5) and (I) of the Act when, on or about March 31, 1978, it refused to recognize the Union as the agent of its employees. Accord- ingly, I shall recommend that this allegation of the com- plaint be dismissed. E. The Alleged Unfair Labor Practice Strike It having been found that Respondent did not commit the unfair labor practices alleged in the complaint, it fol- lows that the economic strike which commenced on or about July 11, 1977, was not prolonged and converted into an unfair labor practice strike as alleged in the complaint. CONcLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of the Act. 2. The Union is a labor organization within the meaning of the Act. 3. Respondent did not, as alleged in the consolidated complaint, engage in conduct violative of Section 8(a)(5) and (1) of the Act. Upon the basis of the foregoing findings of fact and con- clusions of law, and upon the entire record, and pursuant to Section IO(c) of the Act, I hereby issue the following recom- mended:" ORDER It is hereby ordered that the complaint herein be, and it hereby is, dismissed in its entirety. " Ibid m~ In the event no exceptions are filed as provided by Section 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings. conclusions, and recommended Order herein shall, as provided in Section 102.48 of the Rules and Regulations, be adopted b the Board and become its findings. conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 42