Sefton Fibre Can Co.

360 DECISIONS OF NATIONAL LABOR RELATIONS BOARD- term. In deference to this salutary principle, I would disregard the expired contract and hold that the current agreement constitutes a bar to this petition. SEFTON FIBRE CAN COMPANY and DISTRICT LODGE No. 24, INTERNA- TIONAL ASSOCIATION or MACHINISTS , AFL, PETITIONER. Case No. 36-RC-965. July 23, 1954 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before E. G. Strumpf, hear- ing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organizations involved claim to represent employees of the Employer. 3. No question affecting commerce exists concerning the represen- tation of the employees of the Employer within the meaning of Sec- tion 9 (c) (1) and Section 2 (6) and (7) of the Act, for the following reasons: Since December 1950, the Employer and Intervenor (Printing Spe- cialties and Paper Products Local Union No. 387, AFL) have been in a collective-bargaining relationship covering the production and maintenance employees here involved at the Employer's Portland, Oregon, plant. On November 28, 1951, the contracting parties signed an agreement covering these employees, effective from December 1, 1951, to December 1, 1952, and subject to a 60-day automatic renewal clause for yearly periods thereafter. In the absence of timely notice, this contract was automatically renewed on December 1, 1952, for an additional 1-year period. On October 31, 1952, after the automatic renewal notice date of the above contract, the Petitioner, which separately represents a small group of maintenance employees at the Employer's plant, filed a peti- tion covering the other production and maintenance employees then represented by the Intervenor. A Board field examiner informed the Petitioner that a contract bar existed and the petition was withdrawn on November 13, 1952. Another petition was filed by the Petitioner on December 10, 1952, because Petitioner heard that the Employer and Intervenor were conducting new negotiations. This petition was dismissed by the Regional Director on January 14, 1953, on contract- bar grounds and, following the Petitioner's appeal, the Board sus- tained the Regional Director's action on March 27, 1953. 109 NLRB No. 64. SEFTON FIBRE CAN COMPANY ', 361 Thereafter, on Julie 18, 1953, about 31/2 months before the auto- matic renewal notice date of the renewed 1951 contract, the Employer and Intervenor signed a new agreement, referred to on its first page as "Labor Agreement, Corrugated and Fibre Container -Industry and Printing Specialties and Paper Products Unions Nos. 362, 380, 382, 387, 388, 1953-1955." On the second page of the new contract is a "list of companies party to the attached labor agreement," among which is the Employer's name, followed by a notation : "Admitted to the Bay Area Corrugated Group on May 29, 1953, to be effective June 16, 1953." The new contract extends from June 15, 1953, to June 16, 1955, subject to a 60-day automatic renewal clause for yearly periods. Although the new contract was separately signed by the Employer and the Intervenor's representatives, it would appear that the terms are substantially the same as those for other members of the multiemployer group. Brockman, the general manager of the Employer's Portland divi- sion, testified that he signed the new agreement on June 18 and that the others signed it before in San Francisco "when the coast agree- ment with the other plants was negotiated." He further testified without contradiction that the proposed inclusion of the Employer's Portland division in the coast Corrugated contract had "probably been a topic of conversation for a couple of years. . . . Then it cul- minated here in an understanding between the parties in the recent period of the spring of 1953." On June 18 or 19, the Petitioner was informed by employees that the Employer had offered the Intervenor a new agreement and that, on June 19, the employees would vote on whether or not to cancel the old agreement and enter into the new agreement embracing several other locals and firms. Thereupon, on June 19, the Petitioner sent the Employer a telegram, asserting its representation claim and request- ing contract negotiations. The telegram, which was delivered in the afternoon of June 19, was not answered by the Employer. A ma- jority of the Employer's employees, during the afternoon and eve- ning of June 19, affirmatively voted for affiliating with the Pacific Coast Corrugated and Fibre Container Agreement. The petition herein, requesting a unit limited to the Employer's employees, was filed on July 2, 1953, about 13 days after the Peti- tioner's demand for recognition and bargaining. The Petitioner contends that the new agreement is in effect a pre- mature extension of the renewed 1951 contract and therefore is no bar to an election.' The Intervenor opposes tliis contention on the ' The Petitioner does not, and could not successfully, claim that its demand for recog- nition was timely made before the consummation of the 1953 agreement Even assuming the new agreement was not consummated until the evening of June 19, after the Petitioner's telegram was received , the Petitioner 's demand was not perfected by the filing of a petition within 10 days and therefore it would not preclude that contract from operating as a bar. General Elect,sc X-ray Corporation, 67 NLRB 997. 362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD grounds that the June 1953 agreement was signed in good faith and was accepted by the employees, and that the employees received bene- fits under the contract.2 Although the Employer took no specific posi- tion on this issue, it appears to support the Intervenor's claim that the new contract is a bar. For the reasons indicated below, we find that the 1953 agreement prevents an immediate election. The premature-extension rule, like the contract-bar rule itself,3 is essentially a discretionary principle and in our opinion was not in- tended to be rigidly applied in every situation where a new agreement with an extended term was executed during the life of an existing contract. As the Board previously recognized in the Raytheon case,' circumstances surrounding the negotiation and execution of the new agreement may remove that contract from the ambit of the premature- extension rule. In the present case, as already mentioned, it is uncontroverted that the Employer and Intervenor had been discussing for several years the joining of a multiemployer bargaining group composed of related concerns in the area. These discussions culminated in the Employ- er's joining the group on May 29, 1953, effective June 16, 1953, and in the Employer and Intervenor becoming parties to the group's new contract which also became effective at about the same time. So far as the record shows, the execution of this contract by the Employer and Intervenor was intended solely to implement their long consid- ered determination to join in multiemployer bargaining and was ac- complished when the time was ripe for joining in the group bargaining. Under these particular circumstances, we believe that an exception to the premature-extension rule is warranted. We find that the pre- mature-extension rule should not be applied to this case and that, therefore, the new agreement bars a present determination of repre- sentatives. Accordingly, we shall dismiss the petition. [The Board dismissed the petition.] CHAIRMAN FARMER, concurring : I concur in this decision because I regard the premature-extension doctrine as unsound, and not because I think there is some kind of tragic in joining an employer association which justifies making an exception to the rule. If I thought the doctrine was valid, I would agree with Member Peterson that there is no basis for deviating from it in this case. f The Intervenor argues alternatively that the petition was prematurely filed with respect to the termination date of the renewed 1951 agreement . In view of our determination herein, we find it unnecessary to pass on this contention 8 N. L. R. B. v. Grace Company, 189 F. 2d 258 (C. A. 8). 4•Raytheon Manufacturing Company, 98 NLRB 785 and 98 NLRB 1330. SEFTON FIBRE CAN COMPANY 363 I reject the "premature-extension" doctrine as developed and ap- plied by the Board because it appears to me that it imposes unwar- ranted restraints on collective bargaining and freedom of contract and has the necessary effect of disrupting the stability of labor rela- tions which results from the existence of a collective-bargaining agree- inent. I fear that it has subconscious roots in the premise that an outside union which would like to represent the employees at a par- ticular plant is entitled to a standing assurance that it can obtain a representation election at predetermined periodic intervals , regard- less of the contract situation which may in fact pertain. The best that can be said for the rule is that it guarantees raiding unions the right to break into an existing employer-union relationship at rigidly fixed and unalterable intervals of time, regardless of whether or not there is a valid and subsisting contract in existence . But this can hardly be said to justify its continuance. . In order to achieve this complete predictability as a convenience to a raiding union, the rule subordinates the more immediate and, in my view, paramount right of the established union to engage in free and unhampered collective bargaining for the benefit of the em- ployees whom it represents. The fact is that the premature-exten- sion rule fashions a straitjacket for the contracting union, the employer, and the employees. This rule, in effect, says that, regard- less of economic justification and the dictates of sound and enlightened labor relations , the contracting union and the employer cannot reopen their agreement and negotiate a better one for a new term without becoming vulnerable to a rival petition . If such a petition is filed, the Board will disregard the valid existing agreement and order an election in midcontract term. The fact that such a so-called prema- ture reopening deprives the parties to the contract of its protection as a bar to a rival petition operates as a depressing deterrent to mid- term contract changes which might otherwise be made to the mutual advantage of the employer, the union, and the employees. A rule which has this effect is disruptive of labor relations and demonstrates above all else an oversolicitous attitude toward raiding unions. I recognize, of course, that the Act guarantees employees the right to select their representatives , but I do not think it can be demon- strated that abandonment of the premature -extension doctrine will deprive them of this right or even restrict it in any material way. The opportunity to select a new representative can still be afforded employees at reasonable intervals where there is genuine dissatisfac- tion with their bargaining agent without going to the extreme of en- couraging raiding expeditions. I certainly do not regard it as likely that unions and employers will prematurely renew and renew their contracts year after year as a device for heading off rival petitions . If there is evidence in a par- 364 DECISIONS OF NATIONAL LABOR RELATIONS BOARD titular case that this is their motive, that will be the time to set aside the contract as a bar. I would not fashion a general rule to fit the un- usual case, nor would I presume in every case that which happens only on the rarest of occasions. Member Peterson is quite right in saying that the Board has applied the premature-extension doctrine as a flat invariable rule wherever the contract was negotiated in advance of the renewal date, regardless of the existence of economic justification and irrespective of the bona fides of the parties. The cases which he cites show this beyond ques- tion, and they also disclose a patent inequity of the doctrine. I would apply the normal contract-bar rules to contracts of this kind, and would limit the premature-extension doctrine to those cases where it affirmatively appears that the contract was renewed ahead of the an- niversary date for the purpose of forestalling a change of representa- tives. This would protect against abuses and still afford free play to the collective-bargaining process and give proper recognition to the sanctity and stabilizing effect of genuine collective-bargaining agreements. MEMBER PETERSON, dissenting : I am unable to agree with the action taken herein by my colleagues. In my opinion, it represents an unwarranted departure from past Board precedents with respect to the premature-extension rule. At the outset, it seems advisable to review what that rule is and why it was adopted by the Board. The doctrine of premature extension provides that a contract extending the term of an existing earlier agreement will not bar a petition filed before the operative date of an automatic renewal provision contained in the earlier contract, or before the ter- mination date of the earlier agreement if it does not provide for auto- matic renewal. The Board has stated many times that the rule was necessitated by the mandate of the Statute guaranteeing freedom of choice of a bargaining representative to employees and was designed to preserve to employees the right to challenge the representative sta- tus of an incumbent union at predictable and reasonable intervals! As the Second Circuit very cogently pointed out in the Geraldine Novelty Co. case: 6 Any other conclusion would seat the existing representative per- manently in the saddle, since neither the rival union nor the em- ployees who desired a change could know when the new contract would be made and therefore could not foretell when it would be appropriate to start electioneering. The only practicable admin- a See Wichita Union Stockyards Company, 40 NLRB 369; Barber Motors, Inc., et al., 99 NLRB 193 ; National Gypsum Company, 96 NLRB 676 ; Consolidated Western Steel Corporation, 93 NLRB 1199 ; American Steel Foundries, 85 NLRB 19 ; and cases cited therein. 6 N. L R B. v. Geraldine Novelty Company, Inc., 173 F. 2d 14, 18 (C. A. 2). SEFTON FIBRE CAN COMPANY 365 istrative rule is the one the Board has adopted, namely, to allow campaigning during a reasonable time before the expiration of the current contract, or before the "Mill B date" if the contract has an automatic renewal clause. Turning to the instant case, I find merit in the Petitioner's conten- tion that the new agreement, which was entered into by the Employer and the Intervenor about 31/2 months before the automatic renewal notice date of the renewed 1951 contract, constituted a premature ex- tension of the latter contract and was therefore not a bar to the instant petition. In my opinion, the sole distinction between this case and the usual premature-extension case is the purely factual one that during the term of the existing agreement the Employer joined a multiemployer group. I do not believe that this fact justifies the different legal result which my colleagues have reached. Thus, the Board has applied the rule even though the names of the signatories to an extended agreement have changed, if the parties to both con- tracts remained essentially the same.7 In the present case, the imme- diate signatories to both contracts are almost identical. Also, the Board has held that, where an employer joins a multiemployer bar- gaining group shortly before a petition is filed, the employer's mem- bership in the group is too recent to render inappropriate a single- employer unit." Furthermore, the plight of the Petitioner presents a forceful illustration of how failure to apply the rule can enable an incumbent union to forestall a petition by a rival union and effec- tively thwart the desires of employees for a change in bargaining representative. Thus, on three separate occasions-October 31, 1952, December 10, 1952, and June 18, 1953-the Petitioner has filed peti- tions seeking to represent employees of this employer only to be met each time with a contract bar. Presumably, since October 1952 at least 30 percent of the employees have evinced an interest in being represented by the Petitioner. My colleagues hold that the premature-extension rule is inapplica- ble here because : (1) It is essentially a discretionary principle and, in their opinion, was not intended to be rigidly applied in every situa- tion where a new agreement with an extended term is executed during the life of an existing contract, citing the Raytheon case; and, (2) so far as the record shows, the execution of the contract by the Em- ployer and the Intervenor was intended solely to implement their long considered determination to join in multiemployer bargaining and was accomplished when the time was ripe for joining in the group bargaining. I do not find either of these reasons persuasive as a basis for avoiding the impact of the doctrine. 7 New Jersey Oyster Planters and Packers Association, Inc., 101 NLRB 538; Barber Motors, Inc., footnote 5, supra 8 See for example, Metro Glass Bottle Co , 96 NLRB 1008. 9 See footnote 4, supra 366 DECISIONS OF NATIONAL ` LABOR RELATIONS BOARD Regarding (1), I do not quarrel with the statement that the rule is discretionary, but disagree with the conclusion of my colleagues that it was not intended to be strictly applied. It is fundamental that if a rule is to be effective there must be few, if any, exceptions to it lest the exceptions become the rule. In recognition of this, the Board has applied the premature-extension doctrine even though : substantial benefits accrued to employees from the extended agree- ment which was obtained for them by contracting for a longer period;" an extended contract was necessary to incorporate a revised wage schedule for Wage Stabilization Board approval; 1 the con- tract was extended for economic reasons rather than to prevent a rede- termination of representatives;12 a majority of the employees affected i atifiecl the extension agreement;13 and, even though the extended con- tract was made upon the insistence of the employer and in response to appeals from public authorities to avert a strike.l4 In my opinion, the foregoing clearly reveals that the rule was not only intended to be, but has in fact been, rigidly applied, despite extenuating circumstances surrounding the making of the extended contract. The one exception which the Board has made was in the Raytheon case referred to by my colleagues. However, I regard that case as sui generis. Indeed, in our recent General Electric decision,15 we stated : "The Board however has made an exception to the pre- mature-extension doctrine only where, as in Raytheon Manufacturing, the petitioner actually participated in the negotiation of an extended contract and accepted the benefits under such contract." (Emphasis supplied.) Certainly, no such basis exists for making an exception here. With respect to (2), my colleagues appear to be reviving an issue which I thought had long since been laid to rest. Thus, by looking to the intent of the parties in executing their contract my colleagues are implicitly giving consideration as to whether it was entered into by them in good faith. However, until today, the Board has consist- ently held that the doctrine was applicable irrespective of the bona fides of the parties entering into the premature extension agreement.16 ... it is As the court pointed out in the Geraldine Novelty case : 17 11 immaterial whether the new contract was made in good faith before 10 National Gypsum Company, footnote 5, supra ; Consolidated Western Steel Corp, 93 NLRB 1199 ; Radio Corporation of America, 89 NLRB 1226. 11 Barber Motors, Inc., footnote 5, supra. 12 The Van Iderstine Company, 95 1VLRB 966; Standard Steel Spring Co , 90 NLRB 1805. 13 Worthington Corporation, 103 NLRB 1661 ; Louisville Railway Co , 94 NLRB 20; The Cornelius Company, 93 NLRB 368; Gimbel Brothers, Inc., 87 NLRB 449. 14 Albion Malleable Iron Co , 90 NLRB 1640. 15 General Electric Company (River Works), 107 NLRB 70 10 See for example, American Steel Foundries, footnote 5, supra; Celanese Corporation of America, 83 NLRB 103; Armstrong Cork Company , 80 NLRB 566 ; United States Finish- ing Company, 79 NLRB 699; and cases cited therein 17 See footnote 6, supra SEFTON FIBRE CAN COMPANY 367 the parties were aware of activities on behalf of the rival union or was merely a device adopted for the very purpose of defeating elec- tioneering for a change of representative." 18 In holding that the question of good faith plays no part in connection with the applica- tion of the premature-extension doctrine, the Board has stated that its concern is not the purpose, but the effect of such premature exten- sions.19 I have not been apprized of any valid reason for changing this salutary view. Indeed, in my opinion, by reintroducing the ele- ment of good faith in proceedings of this type my colleagues may well be opening a Pandora's box. Thus, if a showing of good faith can render a prematurely extended contract a bar, all the parties must be given an opportunity to offer evidence as to its presence or ab- sence. The result could be that a representation hearing involving this issue would assume the character of an unfair labor practice pro- ceeding. I do not believe that such a development would be con- sonant with sound administration of our contract-bar principles. However, even if the good faith of the contracting parties is now considered an element in determining the applicability of the pre- mature-extension doctrine, I seriously question whether it is present here. My colleagues base its existence upon their conclusion that the record does not affirmatively show that the extended contract was executed by the parties for any specific purpose other than to im- plement their long considered determination to join in multiemployer bargaining and was accomplished when the time was ripe for joining in the group bargaining. But it cannot be gainsaid that the Employer and Intervenor were also undoubtedly aware of the Petitioner's in- terest in the unit as demonstrated by the latter's petitions, the most recent of which had been dismissed on March 27, 1953, less than 2 months before the extended agreement was executed. Moreover, in my opinion, no satisfactory reason has been given why the contract- ing parties could not have waited until the end of the term of the existing agreement before joining in the group bargaining. Although the timing of the extended contract apparently coincided with the conclusion of the group's negotiations with the Intervenor on or about June 1953, there is nothing to show that the Employer could not have been made a party to the multiemployer contract when the existing agreement terminated, particularly in light of the fact that the new contract was separately signed by the Employer and the Intervenor's representative. Finally,- I think the departure here made from the premature- extension doctrine will encourage and prolong rival union activity at periods considerably in advance of the "Mill B" or termination dates 18 To the same effect , see National Gypsum Company, footnote 5, supra ; Houston Pack- ing Company, 71 NLRB 1232. 19 Standard Steel Spring Company, footnote 12, supra 368 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of existing contracts, and will probably require the Board and its Regional Directors to apply a more lenient policy with respect to en- tertaining petitions filed months in advance of what is now regarded as an appropriate time to institute proceedings looking towards a determination of representatives. It seems to me that the rule now adopted will stimulate early rival activity, because the union seeking to challenge the incumbent representative will find it necessary at all times to be able to make a claim of representation and support it by a petition within 10 days 20 and a showing of interest, lest it be foreclosed by the execution of a premature-extension agreement. Moreover, as the Board will not be able to justify dismissing petitions filed in midterm of an existing contract by pointing out that the pre- mature-extension doctrine provides a predictable time for filing rival claims, I believe many petitions which now would be dismissed as untimely will be processed or allowed to remain on file. The neces- sary result, in my opinion, will be to prolong rival organizing cam- paigns and thus detract from stability in bargaining relationships. In view of the foregoing, I would find that the premature-extension rule is applicable here and, as I would therefore find the new agree- ment between the Employer and the Intervenor not a bar, I would proceed to a determination of representatives. 20 General Electric X-Ray Corporation, 67 NLRB 997. AMERICAN LIBERTY OIL COMPANY and A. L. SPANN, PETITIONER and OIL WORKERS INTERNATIONAL UNION, CIO. Case No. 16-RD-113. July 23, 19.54 Decision and Direction of Election Upon a decertification petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Charles Y. Latimer, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organization involved claims to represent certain em- ployees of the Employer. The petitioner asserts that the Oil Workers International Union, CIO, hereafter referred to as the Union, the recognized representative of employees herein concerned, is no longer their exclusive representative as defined in Section 9 (a) of the Act. 3. A question affecting commerce exists concerning representation of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. 109 NLRB No. 52.