Associated General Contractors of North Dakota

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Associated General Contractors of North Dakota and Laborers' International Union of North America, Local No. 580, AFL-CIO; Bricklayers, Masons and Plasterers International Union of America, Local No. 4, AFL-CIO; United Brotherhood of Carpen- ters and Joiners of America, Local No. 1091, AFL- CIO; International Association of Bridge, Struc- tural and Ornamental Iron Workers, Local No. 793, AFL-CIO; International Union of Operating Engi- neers, Local No. 49, AFL-CIO; and International Brotherhood of Teamsters, Chauffeurs, Warehouse- men & Helpers of America, Local Nos. 74, 116, 123 and 581. Case 18-CA-5781 September 25, 1979 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On May 10, 1979, Admininstrative Law Judge Donald R. Holley issued the attached Decision in this proceeding. Thereafter, Respondent, the Charging Parties, and the General Counsel each filed excep- tions and a supporting brief. In addition, the Charg- ing Parties filed an answering brief to Respondent's exceptions, and Respondent filed an answering brief to the exceptions of the General Counsel and the Charging Parties. 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 ' In adopting the Administrative Law Judge's conclusion that Respondent violated Sec. 8(aX5) of the Act by insisting to the point of impasse upon the inclusion of a no-conflicting-agreements clause in its collective-bargaining agreement with Carpenters Local 1091. We do not adopt his finding that the clause itself was unlawful. Although there is always the possibility that a tribunal of competent jurisdiction might find Respondent's proposed no- conflicting-agreements clause violative of the Federal antitrust laws (Cf. Dolly Madison Industries, Inc., Richmond Dairy Division, 182 NLRB 1037 (1970)), we do not pass on that issue. In this connection. we note that, regardless of the legality of the no-conflicting-agreements clause, it does not constitute a mandatory subject of bargaining under the Act because the clause does not sufficiently affect the "wages, hours and other terms and conditions of employment" between Respondent and its employees in the bargaining unit. N.L.R.B. v. Wooster Division of Borg-Warner Corporation. 356 U.S. 342, 350 (1958). See also Covington Furnirure Mfg. Corp., 212 NLRB 214, 216 (1974), and cases cited therein. In adopting the Administrative Law Judge's recommended remedy, we specifically disavow his gratuitous remarks regarding the question of whether an award of litigation expenses would have been appropriate had Respon- dent's lawsuit been found violative of Sec. 8(aX I) of the Act. conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein.2 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, as modified be- low, and hereby orders that the Respondent, Associated General Contractors of North Dakota, Bismarck, North Dakota, its officers, agents, succes- sors, and assigns, shall take the action set forth in the said recommended Order, as so modified: i. Substitute the following for paragraph l(b): "(b) In any like or related manner interferring with, restraining, or coercing employees in the exer- cise of their rights guaranteed by Section 7 of the Act." 2. Substitute the following for paragraph 2(c): "(c) Notify the Regional Director for Region 18, in writing, within 20 days from the date of this Order, what steps have been taken to comply herewith." 2 We have modified par. l(b) of the Administrative Law Judge's recom- mended Order to include the full remedial language. In his recommended Order, the Administrative Law Judge also inadver- tently stated that Respondent must notify the Regional Director for Region 18 within 20 days of the receipt of his Decision, rather than from the date of his Decision. Accordingly, we have made the necessary corrections. DECISION STATEMENT OF IHE CASE DONALD R. HI.I.EY, Administrative Law Judge: Upon an original charge filed on April 18, 1978. and an amended charge filed on June 28. 1978, the Acting Regional Director for Region 18 of the National Labor Relations Board issued a complaint against Asssociated General Contractors of North Dakota (herein called Respondent or AGC), on Sep- tember 18. 1978, alleging, in substance, that Respondent had violated Section 8(aX 1) and (5) of the Act by: (1) Insti- tuting a suit against the Charging Unions in a North Da- kota state court to prohibit and enjoin them from "sub- scribing to, administering and enforcing" the terms of a collective-bargaining agreement entitled "Coyote Project Stabi!ization Agreement Job 110 Mercer County, North Dakota." and; (2) Insisting to the point of impasse during negotiations with United Brotherhood of Carpenters and Joiners of America, Local No. 1091, AFL-CIO (herein called Carpenter Local), upon inclusion of a no-conflicting- agreements clause in their collective-bargaining agreement. Respondent filed timely an answer denying it had com- mitted the unfair labor practices alleged. Pursuant to notice, a hearing was held before me at Bis- marck, North Dakota. on October 24, 1978. The parties waived the right to engage in oral argument at the conclu- sion of the hearing, and each of them have filed post-hear- ing briefs which have been carefully considered. 245 NLRB No. 50 328 ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA Upon the entire record in the case, the briefs, and from my observation of the witnesses. I make the following: FINDIlN(S ()F FA( I 1. Jl'RIS)I('tION As admitted, Respondent, a North Dakota corporation. is an association of employers who are engaged as contrac- tors in the building. heavy, and highway construction in- dustry, which exists for the purpose of representing its em- ployer members in collective bargaining for wages, hours, and terms and conditions of employment for the employees of its employer members. During the year ending Decem- ber 31, 1978, the employer members of Respondent collec- tively, in the course and conduct of their business opera- tions, derived gross revenues in excess of $500.000 and purchased goods and materials valued in excess of $50,000 which were transported and delivered at employer mem- bers' facilities and jobsites in the State of North Dakota. Upon these admitted facts, I find that Respondent is an employer engaged in commerce within the meaning of Sec- tion 2(2), (6). and (7) of the Act. II. SAIUS OF LABOR OR(iANIZAHlONS It was admitted, and I find, that the Unions identified in the case caption above are each labor organizations within the meaning of Section 2(5) of the Act. Ill. TIHE AlI.LEGED UNFAIR IABOR PRACTI('ES A. The Alleged 8(a)(l Violations The General Counsel's major contention in this case in that Respondent violated Section 8(a)( I) of the Act by insti- tuting suit against the Charging Unions in a state court to compel them to cease abiding by the terms of a collective- bargaining agreement executed by the Building and Con- struction Trades Department, AFL-CIO, 14 International Unions,2 and three (3) national contractors who engage in the construction of power plants. The facts, which are un- disputed, are chronologically set forth below. Respondent has maintained contractual relations with the local unions involved in this case for a number of years. During the course of their relationships they have agreed to include in their contracts restrictions on the right of the parties to contract with others. Thus, the most recent con- tract between Bricklayers, Masons and Plasterers' Interna- l All dates are 1978, unless otherwise indicated. 2 International Association of Heat and Frost Insulators and Asbestors Workers; International Union of Boilermakers, Iron Ship Builders. Black- smiths, Forgers and Helpers: International Union of Bricklayers and Allied Craftsmen; United Brotherhood of Carpenters and Joiners of America; In- ternational Brotherhood of Electrical Workers; International Union of Op- erating Engineers; International Association of Bridge. Structural and Orna- mental Iron Workers Laborers' International Union of North America: International Brotherhood of Painters and Allied Trades: Operative Plaster- ers; and Cement Masons' International Association of the United States, Tile and Composition Roofers; Sheet Metal Workers International Associ- ation; and United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industr) of the United States and Canada tional Union of America, Local No. 4, AFL CIO (Brick- layers local), contains. inter alia, the foillowing provisions:' (a) The employees agree not to enter into any agree- ment with their employees, covered by this agreement, which in any way conflicts with the terms and provi- sions of this agreement. (b) The union agrees not to enter into any agree- ment with any individual Employer or group of Em- ployers engaged in work classified as building con- struction within its jurisdictional area which conflicts or differs in any way with the provisions of this agree- ment,. As revealed by the record, Respondent's current contracts with Laborers International Union of North America, Lo- cal 580, AFL CIO (Laborers local), United Brotherhood of Carpenters and Joiners of America, Local 1091. AFL-CIO (Carpenters local), and International Association of Bridge, Structural and Ornamental Iron Workers. Local 793, AFL CIO (Iron Workers local), each contain no-conflicting- agreements clauses substantially the same as the clauses which appear in the Bricklayers local contract.' Respondent is currently signatory to two (2) collective- bargaining agreements with International Union of Operat- ing Engineers. Local 49, AFL-CIO (Operating Engineers local), covering the heavy/highway and building divisions. Each contract contains a provision entitled "Conflicting Agreements," which states:5 The contractors agree not to enter into any agreement with their employees on whose behalf the union has been granted recognition hereunder, individually or collectively, which in any way conflicts with the terms and provisions of this agreement. The Union agrees not to enter into any agreement with any individual contractors or group of contractors competing in the same kind of work as herein specified. which provides for his, its, or their employees less favorable wages, hours and conditions, than as herein specified. without extending the same wage, hours and conditions to the contractors who are parties to this agreement. While Respondent is signatory to a statewide collective- bargaining contract with International Brotherhood of Teamsters, Chauffeurs. Warehousemen and Helpers of America, Locals 74, 116, 123 and 581 (Teamsters locals). that contract contains "no-conflicting agreements" or "most favored nations" clause which purports to limit the Union's right to enter collective-bargaining contracts with other employers. Prior to September 1977, Bechtel Power Corporation (Bechtel), commenced the performance of a contract with Otter Tail Power Company to erect the Coyote No. I Fossie Fuel Power Plant in Mercer County, North Dakota. Bech- tel and its subcontractors, some of whom are members of Respondent association, abided by the wage and benefit I See G .C. Exh. 4 page 4 (current agreement) and G.('. Exh. 3. page 4 (1976 78 contract). 4 See G.C. Exh 2. art. XI: art. Ill in both G.C Exh 51976 78 contract) and G.C. Exh. 7 art. XVIII respectively s G.C. Exh. 8, art. IX (heavy/highway division contract) and G.('. Exh. 9. art. VI (building division contract) 329 DECISIONS OF NATIONAL LABOR RELATIONS BOARD provisions of the applicable local union contracts from in- ception of the Coyote No. I project until September 5, 1977. Effective September 5, 1977, Bechtel insisted that its subcontractors abide by the terms of a collective-bargaining contract which had been negotiated and signed by the building and construction trades department, AFL-CIO, by 14 international unions and Bechtel, Stearn-Rogers, and E.C. Lummas Company-Kaiser Engineers, Inc. The agreement which is entitled "Stabilization Agreement." specifies the wages, hours, and working conditions appli- cable at, inter alia, the Coyote site. It suffices for the pur- poses of this factual summation to observe that the wages paid employees under the terms of the stabilization agree- ment differ slightly from those paid under the various local union agreements with Respondent, and other terms and conditions of employment vary somewhat from those pro- vided in local agreements. Bechtel is neither a member of Respondent association nor signatory to any of Respondent's collective-bargaining agreements with the local unions. Likewise, neither the building and construction trades department nor the inter- national unions, which are signatory to the Bechtel stabili- zation agreement, are parties to any contract with Respon- dent association. At some time prior to September 5, 1977. the Charging Parties in the instant case were instructed by their respec- tive international unions to service the stabilization agree- ment which was in effect between Bechtel and the interna- tional unions. "Servicing" meant that the local unions would refer employees to the power plant project, receive and handle grievances, and conduct a general policing of the collective-bargaining agreement. The local unions fol- lowed the instructions of their respective international unions, and began "servicing" the stabilization agreement. In January 1978 Respondent filed a lawsuit in North Da- kota District Court. Fourth Judicial District, Burleigh County, against the local unions. Respondent alleged, in effect, that by honoring the Bechtel stabilization agreement the Laborers' local breached article VI, section 2 of its con- tract; that the Bricklayers local breached No. I I of its con- tract; that the Carpenters local breached article III of its contract; and that the Iron Workers local breached article XVIII of its contract. The complaint alleged that the Oper- ating Engineers breached articles IV and IX of its respec- tive contracts by honoring the Bechtel stabilization agree- ment. The Teamster locals were named in the complaint, but no specific contractual breach was alleged.6 In the complaint filed with the North Dakota state dis- trict court, Respondent prayed: That the court enjoin defendant unions from subscrib- ing to, administering and enforcing the terms and con- ditions of (The Bechtel Stabilization Agreement) at the Coyote # I (Power Plant Project and other projects in the State of North Dakota). G.C. Exh. 12] 'Counsel for Respondent indicated during the instant hearing that Re- spondent did not seek to obtain a temporary restraining order against the Teamster Locals, but it did seek a determination that the Teamster Locals were legally obligated to adhere to the terms of the AGC-Teamster contract when working on the Coyote project. When it filed the above-described lawsuit, Respondent filed a motion for temporary injunction wherein it sought: The court to issue a temporarx injunction upon proper notice enjoining defendant unions, their officers, repre- sentatives, agents, servants, members, attorneys and employees and each of them, from subscribing to, ad- ministering and enforcing the terms and conditions of' (The Bechtel Stabilization Agreement) at the Coyote I and Antelope Valley Projects in Mercer County,. North Dakota. [G.C. Exh. 131 The North Dakota state district court judge subsequently dismissed the complaint for reasons not necessarily ger- mane or dispositive of the issues before the instant forum. Thereafter, Respondent prosecuted an appeal to the North Dakota State Supreme Court. and such appeal is being ac- tively pursued. Analysis and Conclusions The sole 8(a)( 1) issue raised by the pleadings in this case is whether Respondent "interfered with, restrained and co- erced" employees by instituting and prosecuting a lawsuit in state court to prohibit and enjoin the Charging Unions "from subscribing to, administering, and enforcing" the terms of the stabilization agreement described hereinabove. In Clvde Tavlor. d/b/la Clyde Tavlor Conmpanv,7 the Board refused to find an 8(a)( ) violation for the employer's obtaining a state court injunction banning peaceful picket- ing by the union. The Board reasoned that it "should ac- commodate its enforcement of the Act to the right of all persons to litigate their claims in court, rather than con- demn the exercise of such right as an unfair labor practice." Citing, inter alia. Television Wisconsin, Inc., 224 NLRB 722 (1976), the General Counsel contends that the Clyde Tqvlor principle is not applicable in the instant case because the Board will find an 8(a)(1) violation where a litigant in- stitutes a state court action to enforce an unlawful contrac- tual provision. The General Counsel misinterprets Televi- sion Wisconsin. While that case did involve a contractual union-security provision which was unlawfully broad, the Administrative Law Judge, with Board approval, found the union there involved violated the Act because its object in instituting a damage action against employees was to pun- ish them for having worked during a strike and for circulat- ing a decertification petition. The Board, without expressly mentioning Television Wisconsin, explained the rationale behind such finding of an 8(a)( I) violation recently in Power Systems. Inc., 239 NLRB 445 (1978). It there indicated that institution of a civil lawsuit by an employer or labor organi- zation does not constitute a violation of the Act unless it is a tactic calculated to restrain employees in the exercise of their rights under the Act. In footnote 18 of Power Systems the Board summarizes cases in which the Clyde Taylor prin- ciple has been applied. Noteworthy among those decisions are Retail Clerks Union Local 770, Chartered by Retail Clerks International Association, AFL- CIO (Hughes Mar- kets, Inc.), 218 NLRB 680 (1975), and Bergman v. N.L.R.B., 577 F.2d 100 (9th Cir. 1978). Thus, in the Retail Clerks case, the union instituted a lawsuit in a state court (which 1 127 NLRB 103 1960). 330 ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA was removed to the U.S. District Court) to enforce an arbi- trator's award which found that the union was, by virtue of contract provisions, entitled to request that employees of another employer-Saba Prescription Pharmacy--maintain membership in the union as a condition of employment. Although the Board concluded that the contract provisions relied on by the Union violated Section 8(e) of the Act because they were intended to "protect. acquired, or re- claim work for union members generally" (outside the im- mediate bargaining unit), it held that institution of the law- suit did not violate Section 8(b(4)(ii)(A) or 8(b)(I )(A) of the Act as alleged because the Union's "conduct in resort- ing to the courts to confirm the arbitrator's award was done in good faith to enforce a colorful contract right and was not the kind of tactic calculated to restrain employees or employers in the exercise of rights guaranteed by the Act."' Similarly. in the Bergman case the United States Court of Appeals for the Ninth Circuit affirmed the Board's dis- missal of a complaint which alleged that a union violated Section 8(b)(3) by suing an employer under Section 301 stating, inter alia (at 104): Moreover. Clyde Taylor has been deemed controlling in instances where, as here, the litigation was premised upon alleged contractual violations, Sullivan & Associ- ales, supra. Los A.ngeles Building & Construction Trades Council. AFL CIO, supra, Operating Engineers., .ocal 12, 220 NLRB 530 (1975), regardless of the merits of the claims. Id at 538-39 In the instant case, Respondent's lawsuit is bottomed upon a contention that the local unions violated their con- tract with AGC by choosing to apply the stabilization agreement rather than comply with their local agreements on the Bechtel jobsite. No employees were expressly named as defendants in the legal action, and the General Counsel does not contend that Respondent was motivated to file the suit by a desire to engage in reprisal against employees be- cause they exercised the rights guaranteed by the Act. While the lawsuit was based in part (as to four locals) on no-conflicting-agreements clauses,9 no such unlawful con- tract provisions support that portion of the suit directed against the Operating Engineers locals or the Teamsters lo- cals. Moreover. the suit is, in effect, one to compel specific performance of contracts. In sum, considering the entire record, I conclude Respon- dent's suit was filed in good faith to enforce colorable con- tract rights. Since the evidence fails to reveal that Respon- dent's object in filing the suit was to engage in reprisal against specific employees, I conclude the action was not a tactic calculated to restrain employees or employers in the exercise of rights guaranteed by the Act. Accordingly. I find that Respondent has not violated Section 8(aX)() of the Act as alleged by instituting or prosecuting a lawsuit against the I See also International Union of Operating Engineers, Local No. 12 (Robert E. Fulton), 220 NLRB 530 (1975), where the Board found that a union did not violate the Act by instituting a Sec. 301 lawsuit to enforce a subcontract- ing clause which violated Sec. 8(e) of the Act. I find for reasons set forth hereinafter that such clauses are clearly unlaw- ful as contended by the General Counsel. See United Mine Workers ofAmer- ica v. Pennington, et a., 381 U.S. 657, 664-666 (1965). charging parties in the state court. I recommend dismissal of the allegations in question. B. The Alleged 8(a)(5) I tolation Paragraph 9 of the complaint alleges that Respondent violated Section 8(a)(5) of the Act b insisting to the point of impasse, during negotiations with the Carpenters local, that the parties include a no-conflicting-agreements clause in their collective-bargaining agreement. The facts are in dispute. I. The General ('ounsel's evidence The General Counsel sought to prove the violation al- leged through the testimony of Eugene Vogel, business agent of the Union. at the time of negotiations, which ex- tended from March 27. 1978. to May 8. 1978. Thus. Vogel testified that several weeks prior to March 27 the Union sent AGC a complete contract proposal. Thereafter, the parties met for the first time on March 27. The Union was then represented by Vogel and three members of the Union's negotiating committee. During the first meeting Vogel indicated that Respondent, represented by McCoy. its executive director, his assistant Peterson, and Virgil Har- dy, gave the Union a complete proposal and requested that it be submitted to the membership for a vote. Subsequent to the meeting the membership rejected this agreement. Although Vogel could not place the date of the second negotiation session, the record records it was held on April 17. According to Vogel, the Union was represented at the second session by himself and a union attorney. Frcd Krae- mer. He testified that AGC was represented by McCoy. Virgil Hardy, Peterson, and John Kelly. AGC's attorney.' ° Vogel's recollection of the meeting was that the Union pro- posed to remove article Ill from the contract, thus eliminat- ing the no-conflicting-agreements language contained therein."' AGC rejected the proposal, and the Union then proposed the "most favored nations" clause contained in the contracts between the operating Engineers local and AGC.'2 Vogel testified his understanding was that the two ' McCoy, using notes prepared at the time negotiations were held. esti- fied that Attorney Kelly attended the first negotiation session and Attorney Kraemer attended the second session. He testified that Kell) did not attend the second session or any other session attended by Kraemer. I credit McCoy and find that Attorney Kelly did not attend the April 17 session. " See G.C. Exh. 6 (1977-78 contract) and G.C. Exh. 7 (1978-79 contract). Art. Ill of each contract is entitled "Conflicting Agreements" and provides: The Employers agree not to enter into any agreement with employees individually or collectively, which in any way conflicts with the terms and provisions of this Agreement. Local Union 1091 agrees not to enter into any agreement with any individual employer or group of employers, engaged in building construction or work classified as such, which conflicts of differs in any way with the terms and provisions of this Agreement. "G.C. Exh. 8 (art. IX) and G.C Exh. 9 tart. VI) which are entitled "Con- flicting Agreements" provide: The contractors agree not to enter into any agreement with their em- ployees on whose behalf the Union has been granted recognition here- under, individually or collectively, which In an) way conflicts with the terms and provisions of this agreement. The Union agrees not to enter into any agreement with any individual contractor or group of contrac- tors competing in the same type of work as herein specified, which provides for his, its or their employees less favorable wages,. hours and (Coninued) 331 DECISIONS OF NATIONAL LABOR RELATIONS BOARD attorneys agreed on the clause from the Operating Engi- neers' contracts, and he indicated he specifically recalled that McCoy commented "He wouldn't have any problems with it [the most favored nations clause]." Vogel indicated he returned to the membership after the second negotiation session and that he and Union Attorney Ron Hilden presented the revised contract to the member- ship and they voted in favor of all provisions except the wage provision. Between the second meeting and the last bargaining ses- sion, which was held on May 8. Vogel indicated he tele- phoned McCoy to indicate that an unspecified member of his bargaining committee had resigned. He claims that McCoy commented they had changed committees in 1977 and he would not meet with a new committee again." On May 8 Vogel and McCoy met without their respective bargaining committees and reached an agreement on wages, the only open issue. Thereafter, Vogel telephoned McCoy to indicate that they had reached final agreement, and McCoy indicated he would have the agreement typed. At some unspecified time after May 8 Vogel was asked by the AGC's secretary to come to the office and proofread the contract before she duplicated it. Vogel testified that while reading the agreement he noted that the no-conflict- ing-agreements clause appeared at article III of the con- tract. He claims he brought the matter to McCoy's atten- tion observing he understood they had agreed to replace the clause with the "most favored nations" language found in the operating engineers contract. He testified McCoy's re- ply was "that's what it is and that's that .... If you don't want to take that put your pickets up." Vogel testified he agreed to sign the contract after registering his protest. 2. Respondent's evidence In agreement with Vogel, McCoy indicated AGC sub- mitted a complete contract counterproposal to the Union on March 27. Respondent proposed retaining article Ill the (no-conflicting-agreements clause) in their proposal. McCoy agreed the membership rejected the proposal. With respect to the second bargaining session, McCoy referred to notes he had taken at the time of the session and testified that Attorney Kraemer was in attendance, but At- torney Kelly was not. McCoy acknowledged that the Union proposed deletion of article Ill from the contract and asked for the treatment afforded to the Teamsters-no provision restricting contracting by the Union-and indicated he re- jected the counterproposal. He agreed that the Union then proposed the "most favored nations" clause found in the operating engineers agreement, but testified that he under- stood that as a state court suit involving the conflicting agreement clause was pending it was agreed the language would stay "as is." He testified his notes supported his rec- conditions than as herein specified, without extending the same wages. hours and conditions to the contractors who are parties to this agree- ment. 'J In his brief the General Counsel submits I should find that such conduct violated Sec. 8(aX I) and (5) even though it was not alleged as a violation. In my view, the General Counsel could have attempted to amend the complaint during the hearing after hearing the testimony. As he did not. I conclude the matter was not fully litigated and decline to consider the matter. ollection as he had noted "as is" on the appropriate section of the contract. McCoy testified he did not agree on April 17, or at any other time, to the "most favored nations" language. McCoy testified he recalled that Vogel visited the AGC office to review the contract after it had been typed. He stated he could not recall that Vogel had objected to inclu- sion of the no-conflicting agreements clause and he stated he did not recall telling Vogel, in effect, that if he did not like the no-conflicting-agreements clause, he could strike because that was it. '4 Analysis and Conclusions Careful review of the record, including the testimony summarized above, convinces me that the parties did not reach a meeting of the minds on the "no-conflicting agree- ments" clause or the "most favored nations" clause from the operating engineer contract on April 17. Therefore, con- trary to the General Counsel's contention, I conclude the evidence offered was insufficient to establish that the oper- ating engineers language had been agreed upon on April 17 and that McCoy thereafter intentionally substituted the no- conflicting-agreements language in the final contract draft. I am convinced, however, that Vogel did ask McCoy when he was proofreading the contract why the "no-conflicting agreements" rather than the "most favored nations" lan- guage appeared in the contract and I credit Vogel's asser- tion that McCoy replied "that's what it is and that's that. ... If you don't want to take that put your pickets up." As Vogel then immediately decided to accept the contract as it was, the narrow issue to be resolved is whether AGC vio- lated Section 8(a)(5) and (1) as alleged through McCoy's statement to Vogel. In agreement with the General Counsel. I conclude that Respondent violated the Act by insisting that the no-con- flicting-agreements clause be included in its contract with the Carpenters local for the reasons set forth below. While Respondent and the Charging Parties each con- tend that the no-conflicting-agreements clause under con- sideration is not necessarily unlawful, I note that the provi- sion provides in plain language that the signatory union is prohibited from entering agreements with other employers which conflict or differ in any way with its agreement with AGC. In United Mine Workers of 4merica v. Pennington, et al., 381 U.S. 657 (1965), the Supreme Court stated: We think it beyond question that a union may con- clude a wage agreement with the multi-employer bar- gaining unit ... and that it may as a matter of its own policy, and not by agreement with all or part of the employers of that unit, seek the same wages from other employers. But there is nothing in the labor policy indicating that the union and the employers in one bargaining unit are free to bargain about wages, hours, and working condi- tions of other bargaining units or to attempt to settle these matters for the entire industry. On the contrary. the duty to bargain unit by unit leads to a quite differ- 14 McCoy's "I don't recall" testimony did not impress me. I credit Vogel's version of the occurrences in the AGC office on the occasion in question. 332 ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA ent conclusion. The union's obligation to its members would seem best served if the union retained the ability to respond to each bargaining situation as the individ- ual circumstances might warrant, without being straight-jacketed by some prior agreement with the fa- vored employees. Pennington, supra, at 664, 666. The Board analyzed the Pennington case when it consid- ered the legality of a "most favored nations" clause in Doll Madison Industries, Inc., Richmond Dain Division 182 NLRB 1037 (1970). It there indicated that a contractual provision like the provision considered in Pennington, which provided that the union would impose upon all other coal operators in the area the terms of the agreement without regard to their ability to pay, would be unlawful because (at 1038): . . the union by reason of the clause there involved abandoned the right to which it and those of its mem- bers who were employed by other employers were enti- tled under the Act to bargain collectively with such other employers concerning substantial terms and con- ditions of employment-and this to the detriment of itself and other members, thereby frustrating the pur- pose of the Act. Applying the teachings of Pennington and Dollv Madison to the instant case, it is clear that the no-conflicting-agree- ments clause which Respondent insisted be included in its collective-bargaining agreement with the Carpenters local is unlawful as it definitely straitjackets the Union in its nego- tiations with other employers just as the clause in the Pen- ninglon restricted that Union. Having determined that the no-conflicting-agreements clause under consideration is unlawful, I turn to the im- passe issue. As stated by the Board in Taft Broadcasting Co.. WDA F AM-FM TV, 163 NLRB 475, 478 (1967), appeal dismissed 395 F.2d 622 (D.C. Cir. 1968): "Whether a bargaining im- passe exists is a matter ofjudgment. The bargaining history. the good faith of the parties in negotiations, the length of the negotiations, the importance of the issue or issues as to which there is disagreement, the contemporaneous under- standing of the parties as to the state of negotiations are all relevant factors to be considered in deciding whether an impasse in bargaining existed." An impasse is created, not by simple exchange of proposals and rejections on a sub- ject, but "when further bargaining on an issue is futile." Dallas General Drivers, Warehousemen and Helpers, Local Union No. 745, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, (Empire Terminal Warehouse Co.) v. N.L.R.B., 355 F.2d 842, 844 (D.C. Cir. 1966). In the instant situation, Vogel testified he was convinced when McCoy informed him that the no-conflicting-agree- ments clause was going to stay in the contract and the Union could picket if it did not like it that McCoy was not willing to discuss the subject further. Significantly. McCoy did not dispute Vogel's assertion: he simply stated he did not recall the exchange. In my view, McCoy's discussion with Vogel compells a conclusion that further bargaining on the no-conflicting-agreements issue was futile at the time under discussion as McCoy's adamant statement of position reveals he was taking a final stand. Consequentlb. I find that the parties reached impasse on the no-conflicting- agreements clause when Vogel questioned the presence of the clause in the draft of the contract. As the clause in question was unlawful, it automatically follows that it was a nonmandatory subject for bargaining and it is well settled that an employer or a union violates the Act by bargaining to impasse over a nonmandatory subject of bargaining. N. 1.. R.B. v. Wooster Division of Borg-Warner Corp.. 356 U.S. 342 (1958). Accordingly. for the reasons stated. I find that Respondent violated Section 8(a)( I) and (5 as alleged by insisting to the point of impasse upon the inclusion of a no-conflicting-agreements clause in its agreement with the Carpenters local. IV. til. FFECi OF ItIE UNFAIR LABOR PRA( I(tES L PON COMMER( F The activities of Respondent set forth in section III. above, occurring in connection with the operations of Re- spondent described in section 1, above, have a close, inti- mate, and substantial relationship to trade, traffic, and com- merce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. IHE REMFDY Having found that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)( 1 ) and (5) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative ac- tion designed to effectuate the policies of the Act. Having concluded that Respondent did not violate Sec- tion 8(a)(1) of the Act as alleged by instituting and pros- ecuting the state court lawsuit, I find that the General Counsel's request that the Charging Unions he reimbursed for their legal fees and cost incurred in defense of the state court lawsuit and in this case is unwarranted. Assuming, arguendo, that Respondent had violated Section 8(a)(1) by instituting the lawsuit in question, I would, nevertheless, find that litigation expense would not be recoverable as the lawsuit did not constitute "frivolous litigation." Having de- cided that a reimbursement remedy is not warranted. I find it is unnecessary to discuss or rule on the General Counsel's request for interest at the rate of 9 percent on money found due. CONCLUSIONS O)F LA%\ I. Respondent is an employer within the meaning of Sec- tion 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Charging Unions are labor organizations within the meaning of the Act. 3. The bargaining unit described below constitutes a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act:" 15 The appropriate unit allegation and the Union'S majority salus were admitted In Respordent's answer 333 DECISIONS OF NATIONAL LABOR RELATIONS BOARD All full-time and regular part-time carpenters and ap- prentices employed by the employer members of the Respondent, excluding all other employees, office cleri- cal employees, professional employees, guards and su- pervisors, as defined in the Act. 4. At all material times herein the Union represented a majority of employees in the appropriate unit and has been the exclusive representative of said employees for the pur- pose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By insisting to the point of impasse that an unlawful no-conflicting-agreements clause be included in its contract with the Carpenters local on or about May 8, 1978, Respon- dent violated Section 8(a)(5) and (1) of the Act. 6. The aforesaid are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. 7. Except as specifically found herein above, Respondent has not violated the Act. Upon the foregoing findings of fact, conclusions of law, and upon the entire record in this proceeding, and pursuant to the provisions of Section 10(c) of the Act, I hereby issue the following recommended: ORDER'6 The Respondent, Associated General Contractors of North Dakota, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Refusing to bargain with United Brotherhood of Car- penters and Joiners of America, Local 1091 by insisting during contract negotiations, to the point of impasse, on inclusion of a no-conflicting-agreements clause in any re- sulting agreement. (b) In any like or related manner restraining or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which is neces- sary to effectuate the policies of the Act: I 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. (a) Cease maintaining and enforcing or giving effect to article III of its current collective-bargaining agreement with United Brotherhood of Carpenters and Joiners of America, AFL-CIO, Local 1091. (b) Post at its main office and principal place of business copies of the attached notice marked "Appendix."'7 Copies of said notice, on forms provided by the Regional Director for Region 18 of the Board, after being duly signed by Re- spondent, shall be posted by it immediately upon receipt thereof, and be maintained for 60 consecutive days there- after, in conspicuous places, including all places where no- tices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 18, in writ- ing, within 20 days from the receipt of this Decision, what steps have been taken to comply herewith. 'T In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the Na- tional Labor Relations Board." APPENDIX NOTICE TO EMPLOYEE S POSTED BY ORDER OF ItE NA tONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain with United Broth- erhood of Carpenters and Joiners of America, AFL- CIO, Local No. 1091 by insisting during contract nego- tiations to the point of impasse upon inclusion of a no- conflicting-agreements clause in any resulting agree- ment. WE WILL NOT in any other like or related manner interfere with, restrain, or coerce employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. WE WILL cease maintaining, enforcing, or giving ef- fect to article Ill of our current collective-bargaining agreement with United Brotherhood of Carpenters and Joiners of America, AFL-CIO, Local No. 1091. ASSOC(IATED GENERAL CONIRACTORS OF NORIH DAKOTA 334