Mar-Len Cabinets, Inc.

M\ R-I I N ( '\B1INI IN(' Nlar-I.cn ('ahinels, Inc. and Orange ('oini I)istrict ('ouncil of (arpenllers. L nited BrotlerhlH(ld of (Car- penters and Joiners of America. AFL-CI(). ('ase 21 (A 16(149 .IulN IX, 1979 D)I!(CISION ANI) ()RI)L R BY ('IIAIRMsN FANNIN(, ,\') MI Mlil RS .11 NKI,,S ANI) Mt RPIIY On March 29. 1979. Adminriistrative 1, a J uIge James T. Barker issued the attached )eecision i tlis proceeding. Thereafter, Respondent iled eceptions and a supporting hrief.l: Pursuant to the provisions of Sectionl 3(h) of the National labhor Relations Act. as amended. thlie Na- tional I.abor Relations Board has delegated its au- thorits in this proceeding to a; three-nileiher paniel. The Board has considered the record a;nd the at- tached Decision in light of the exceptions and hrief and has decided to affirml the rulings. findings. and conclusions' of the Admlin istra e I.aw Judge andl to adopt his recommen ded Order, as modified hercitl. ORD[)R Pursuant to Section 10(c) of the National Labthor Relations Act. ias anended. the National Labor Rela- tions Board adopts as its Order the recommended ()r- der of the Administrative LIaw Judge. as moditied he- low, and hereby orders that the Respondent, Mar- len Cabinets. Inc.. Anaheim. California, its officers agents, successors, and assigns. shall take the action set f)rth in the said recommended Order, as modified: I. Substitute the tlloving for pragr;tph 2(b): "(b) Make whole all outside employces fotr arn loss of wages or benefits incurred hb them as a result of Respondent's unilateral implementation of its bar- gaining proposals covering outside employees prior to September 8. 1977. with interest as prescribed in /Hor- ida Steel Corporation, 231 NLRB 651 (1977). See. generally, Ivis Plumrhing & Heating (Co. 138 NI.RB 716 (1962)." 2. Insert the following as paragraph 2(c) and re- letter the subsequent paragraphs accordingly I In finding that Rcspondent '.l.laled Sec Xa)(5) h flldlng t . g Ihe requisite 8(d(3)} notiCe. the Adminilsratise I.aw Judge distingulshed Jci lti,, Products. Ir . 229 Nl.RB 322 ( 19771 Whie s'c I gree v ith his cO, Iclusion. sue noted that in the Jcr lii case the Board wI nlot holding hllt Sc 8d) Ii sonly applicahle n a strike or lockout situation Rather, that caise lands Iir the principle thalt a respionden to an 8a)5s) charge nrla not. in the absence of a strike, raise as a delense that it i under no ohlgatiln Io hargain hec.iise the charging part) talled to gle proper 8() nrtice and the contrlact Ihere re was aultmaticall) renesed. -Ic) Itreer' e and. pon rqcest. niakle ,i ;llahl to lthe B 1m-d or its ;Igients. folr lellllllll ;tiand c()I Illg. all p;a.\ roll records. social seCUl-it pln.ll nt recolrds. tilllmccarl d per'onnel recolrds a rid reports. lrid i ll otller rcordls niecessarll ) to ri;alnl the Illo)Ill ()t' hack; l;! (due under the trmi of this ()rder." St Sulbitut te attl.ched notice for thailt of tie Adnliliistratie l .ak ud.gc Nol I l IOEI'I I)Y I:s P1()SII 1) Y ()R)O i R I IIII N AII)N,\I i.AII)R R IIIINS I B()\RI) A\l .\geCllc of, the I. litcd S;ltes ( i (,r l ICt WI 1 il s I retse to br hr;lr;ln [till ()ar;linge ( ouritD I)istrict ( Iril of (';Irpeliters. l rited r-oltherhiood of ( 'arperiters antili .oincrs oI Aimer- ica AlI (1(). hereli called the lnion, as tile e\clusv reprcsentatll\c of the cn.ilploces elm- plo\ed n the tillow'ing appropriate bargalliing LIllt: All inside cahbinelt I hbricators emiplo ed h, Mar-l.en (ahillts. Inc.. a:lt ii plant in Aria- heim,. (alitirrira. WvI \\t I S Il lIIrall\til ltihdre\v recollil- tioln I'roin the I liori its tlhe exclusie collectice- ha rga;lirllig rel-presenlAltltc of our inside emplo- ce.s. W \ tII I N rctfuse to bargain collecti el\ with te llortin. i1 Si olaltil of Sectlion 8(;1)(5) 1of the National I.abor Relations Act as amended. h uil rltrall inlmplementing bargaining propos- als subiitted to the l nion as bargaining repre- selntatlc tolr our outside eployees. and h tfail- ing Ito continlu to ull ltorce alnd eft'ct all he termis anrd conditions of an existinge collectie- bargainilg agreement w\ith the union, or arn other l hbor orgla iza tioni. Ior the req u ired period of time after giing notice to the Federal Media- tion and ('onciliation Ser, ice and the California State C(onciliation Ser ice. s provided bh Sec- tion 8(d) of the National Labor Relations Act as amended. Wi 5s i I No i any like or related miannier interfere with. restrain-;. or coerce emplo\ ces in the exercise of the rights guaranteed them by Section 7 of the Act. W[ VrII I . upon request. barga in collectivel in good I aith itlh the nioni as the exclusive collec- tive-ha rgaini ig representative of( eiploees in the inside unit and, if' an understianding is 243 NLRB No. 84 21 I)1( ISI()NS ()f NA I()N \A I AB()R RA I INS B()ARI) reached. emhod anIy Understanlding in a signed agreenien. lthe appropriatc hbargaining g unit is: All inside cabinet ftabricators employed by Mar-Len Cabinets Inc.. at its plant in Ana- heim. ('Calilfornila. WIt wii.l make whole all our outside employ- ees for any loss of wages or benefits they may have suffered as a result of our unilateral imple- mentation of' our collective-bargaining proposals covering outside employees prior to September 8. 1977. on which date full compliance with the notice requirements of' Section 8(d) of' the Act would have been achieved, with interest. MAR-IIN ('ABINIS, ISN(. I)D(CISION SIAIllMI NI ( 1111 CASt JAMIS T. BARKI R. Administrative LIaw Judge: Illis case was heard before me at Los Angeles. Calilornia. on Noveni- ber 2 1978. pursuant to it complaint and notice of hearing issued on [)ecember 23. 1977. by the Acting Regional I)i- rector for Region 21. The complaint, alleging violations of Section 8(a)( 1) and (5) of the National Labor Relations ,Act, as amended, hereinafter called the Act. is based upon an original charge and a first amended charge filed b Orange ('ounty District C(ouncil of Carpenters. United Brother- hood of (Carpenters and Joiners of America. A L ('10. herein called the I nionr, on November 4 and I)ecenimber 22. 1977. respectivel>. At the hearing, the parties were ac- corded full opportunity to make opening statements, to in- troduce relev;ant evidence. to examine and cross-examine witnesses, and to file briefi. Respondent and counsel flr the General Counsel timely filed briefl with me. Based upon the entire record in this case. mn observation of the wit- nesses. and the briefs of the parties. I make the following: IINI)IN(S (1 A I 1l. 1ll Atli R 0)R(\NiA\II)N INX)l \1 I) Ihe parties stipulate and I find that at all material times the I nion has been a labor organization within the mean- ing of Section 2(5) of thie Act. 2 lit. I II t (il l) I N I l It I ( )NI) (I A. 71e Ilcs Ihe principal issues in this proceeding are: (I) whether on ad after August 4 Respondent refused to bargain col- lectiel3 in good faith with the UInion as exclusi e collec- tive-bargaining representaltie of Respondent's inside cabi- net iabricators and outside cabinet installers: (12) whether on or about Augus 29 Respondent violated Section 8(d) and 8a)(5) of the Act b unilaterally implementing its final offer, submitted to the Inion covering the outside employ- ees. without giving the required 8d)(3) notice to the (Cali- fornia State (Conciliation Services: (3) whether the work stoppage b Respondent's inside cabinet ahricators which transpired on October 28 was caused b the untfair labor practices of Respondent; and (4) whether Respondent io- lated Section 8(a)(5) of the Act by withdrazwiing recognition trom the Union as the collectie-bargailning representative of the inside cbinet fabricators. Respondent denies the commission of any untair labor practices and contends, in substances, that the notice re- quirements of Section 8(d) were complied with insof;ar as the outside agreement was concerning: that at all tinles per- tinent it engaged in good-faith bargaining within the mean- ing of Section 8(d) and 8(;a)(5) of the Act with respect to the inside emploees: and that it withdrew recognition from the Irnion as bargaining representatire of' inside employees on or abolIt October 31 and thereafter refused to bargain col- lectivel with the nion because it entertained a reasonably based good-falth dubt as to the majority status of the tInion. B. Priionte Ii itsc I. Background facts I. I it BU!SINISS ()I1 RI SlP(IN)N IN Respondent is a C'alifornia corporation engaged in the business of fabricating and installing cabinets in Southern California. with an office and place of business at 1181 Blue Gum Street. Anaheim. California. In the normal course and conduct of its business opera- tions. Respondent annually purchases and receives goods and materials valued in excess of $50.000 directly from sup- pliers ltocated outside the State of ('alifirnia. The parties stipulate and I find that at all times material herein Respondent has been an employer engaged in com- merce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act. I Unless otherwise specified all dates refer to Ihe calendar year 1977 a. 7'1t seting ('ommencing in 1967 and for a period of ears thereafter until 1972 Cirilo (iomez and Epifanio Flores operated a partnership doing business under the name Reta's Cabinets. In 1972 the enterprise was incorporated, and its name changed to Mar-Len Cabinets. Inc. ('irilo G(omez became the principal stockholder of' the corporation and its pres- ident. Flores became vice president of' the Company. Since 1967 Respondent has been signatory to separate collective- bargaining agreements with the Union, designated by the parties as the outside agreement and the inside agreement. I or purposes of convenient indeniification. he term "Union" includes not only the Charging Party hul also .lcal inion No. 2172. United Broth- erhood o (Carpenters & Joiners of America. AFt. (IO. which administers the agreement [or the inside cabinet labricators 514 MAsR-I N ( BINI 1S. IN(C. respectic el .' I lie lormer cos ers emplo css emplo! led iIn the lowll ing described unit: All outside cabilet installers emploed b Respondetnt at construction jobsites located in counties of' I.os An- geles. In(o. Mono. Orange. Risverside. Sain ern;larlillo Imperial. Ventura., Santa Barbabra. San l.uis ()bispo. and Kern. ('alifornia. Employees comprising this unit are employees engaged in the installation of cabinets for Respondent at sarious con- struction jobsites in ('alif'ornia. In October 1977 Respon- dent employed Ifour outside employees. The inside agreement covers employees employed in the ifollowing unit: All inside cabinet fabricators emniployed b Respondent at its plant in Anaheim. ('alifornia. BEmployees comprising this unit are employees engaged in the fabrication of cabinets only at Respondent's Analheim plant. In October 1977 there were six employees in the in- side unit. The most recent agreenent covering outside eployees expired on June 15. 1977. while the most recent agreement covering inside employees expired on July 31. 1977. For a period of' several years prior to 1967 C'irilo Gomez was a member of the Union. its was lores. In 1967 when (;onez and Flores assumed ow nership of' Reta's Cabinets. Comez resigned his membership and lores retained his. F:lores remained a member of the I'nion at least until Octo- ber 27, 197X. h. Re,.ondcn iile hrgiiiing In a time period prior to March 3 ('irilo Gomez made a determination that the ('ompany was not making a reason- able profit. He reached this conclusion on the basis of profit-and-loss statements covering the two most recent fis- cal years. ending September 30, 1976. and September 30. 1975. respectively. and from 1977 trends which were dis- cernible from accounting statements which he had person- ally scrutinized. From his evaluation he noted that labor costs were running in excess of 50 percent. a percentage which, in his opinion. was unfavorable. In this context Cio- mez testified that in 1974 the C'ompany had bound itself to the current 2-year collective-bargaining agreements so as to avoid a threatened strike which would have impaired the Company's capacity to timely complete an important cabi- net order. Because of profit trends, labor cost consider- ations. and the effect of the bargaining agreements. Gomez decided that it was essential for the Company to negotiate Ihese agreements are known more Iormally as: (t) The carpenters I I southern counties memorandum agreement and 2) The master labor agree- ment, eleven southern (alifornia residential cabinel, school. and full mill manufacturing laminate. fabricate and cabinet finishing indusirles. ' The balance sheet for 1975 reveals a net operating loss of $13,944.18, while the 1976 balance sheet reflects a net operating income it $3.97235. of which S2.151 came from an income ax refund from a prior ear. In percent- age erms. the direct cost of labor and employee benefits oIr the fiscal ear ending 1975 was shown on the balance sheet to he 61 percent of the total cost of sales contrasted to 65 7 percent tr the fiscal ear ending September 30. 1976 Officer salaries decreased nearly $18.000 in 1976 as contrasted to 1975 collectile-hargaminig terms with the I nioni msllet suitable Ito the "economlic ecds" of the (onmpanr . \ccordinglli . (- mez and his partner. Epifanio Ilorec. pIreparled and dis- patched the following letter dated \March 3 to thle I nllon I'his letter is in regards to our union agrcment the Inside .AgreenmentJ which is due to epire June 311. 1977. I)ue to economic conditions we ee we cannot continue to operate protitahbl we hase heen erAlrtting in the red for the past three ears. At this Inme Itel we do not wish to continue in the L111on. h we\er we are willing to sit at the bargaining table ild barigaiii with ou it' ou , ish Ihe follo ving day (Gomez and lores ra smitted anl denti- cally \worded letter to the Union regarding the outside unit. Despite the reference in each of the letters tol an lleged June 30. 1977. expiration date ftr the agreements. Ihe par- ties stipulated that the March 3 letter reterrJed to the :ntsid agreement due to expire on Jul! 31. 1977. anid the larh 4 letter referred to the outside agreement due e\splrc on June 15. 1977. B5 letter dated March 18 the Ln ion1 notiied RCespondcnll that it could not accept calellation off the outside igree- ment. Thereafter. on March 22. the nion notitied the sIg- nator) prties to the outside agreemlent in writing. that it wished to reopen that agreenment tor amendmenl and mnodl- fication prior to the June 15 expiration date. (Copies of lthis written coimmunication were dispatched to) the appropriate Federal and state mediation and conciliation agencies. Subsequentl. by a letter dated March 23 Respondenit notified the Union that it was not its intention to cancel the outside agreement, hut that it was simpl, not renewing that agreement upon its expiration.' T'he memlorandum agree- ment incorporated into the outside agreement pro,ides that it shall remain in full orce and eflect until June Is. I'77. and shall continue frotnl ear to ear thereatter unless either part} shall gie written ntice to the other of a desire to change or cancel it at least 60 days prior o lJune 15. 1977. or June 15 of any succeeding ear. It pros ides further: All notices gien to the signator parties to the Master Lahor Agreement hb the L'nions shall constitute sufti- cient notice to the Contractor flr the purposes of this paragraph. The Contractors and the I[nions shall be bound by any, renevwals or extensions of ilie Master I abor Agreement and the Trusts Agreements. or any new agreements agreed to hb the signatory parties to the Master Labor Agreement unless aln apprtopriate written notice is given to the other parts at least sixt, (60) days prior to June Is. 1977. or an' suhsequent year of their intent not to be bound bh a new. re- newed or extended Agreement. Similarly. by letter dated April 1. Respondent notified the Union that it did not intend to renew the inside agree- ment. Respondent dispatched an appropriate notice of the proposed termination or modification of the inside agree- ment to the Federal Mediation and Conciliation Service on April 5. The ('alibfornia State Mediation and ('onCliliation "As in the previous March 4 communication Respondenl Ilco rrecttl re- ferred to the expiralion dale of the outside agreement. his time spect\ ing as June 31 I)I(' ISI()NS ()1 N I()NA I.A()BOR RKll AII()NS ()ARI) Ser ice hias no ccor d lat 1 ing received a cop t ( ie A pril In rspolnse. on April 15 lie I nit notilied Respondent of its idesire to riiodll inl ;aiuenld tle provisiunls of Ihe inside agrecitllenll itd telnmitiate such agreenlelt ill the evenil such lliodiictions or aillllenl elnlts were not resolved. (hioe credlibhl testified thait ihen lie dispa;lltched the March 3 anld 4 cor(respotdence: he intendel d to negotiate new; agreeienlts with the I nion. C. ']i' 1 trcl' t d II Uht'Io!ialiIo In mid-May (omeii cont;lacted Michael Merrilll a San D)iego ('aliftornii, attorney specialiing in the practice of labor law. In consultingt with Merrill (iomei outlined the economic circumstances lacing the ('onmpany and sought advice as to the correct manner of' proceeding in order to honor the obhligation of the ('ompanv to hargain with tile UJnion and reach collectise-barganirng agreement suitable to the economic circurlstances of the C('orpani. In this connection, fr Merrill's benefit, (ioime pointed out spe- cific provisions of the agreements hich he felt were partic- ulars burdensomle. As a result Merrill instructed (ionie to carefully review bhoth the inside aind the o utside agreemenits and to make specific note of' tile provisions which he felt were objectionable. Merrill requested (iomice to he pre- pared at their next meeting to suggest ailternaives to the objectionable provisions. At the second mneeting hetween Merril and (iomei the agreements were discussed pa;a- graph bh paragraph. In due course Merrill dispatched a letter dated lune 17 to the inion wherein he reiterated Respondent's intention to terminate the inside agreement upon its expiration. In the letter Merrill also asserted that Respondent was aware of its obligation to meet and bargain with the nion. 'lhe letter contained the further suggestion that ift' the U nion desired to meet t'r the purpose of negotiations, the meeting be scheduled at 3 p.m. on the at'ternoon of June 27 at Respon- dent's premises. Under cover letter of June 17. the linion. through its business representative rvan Osburn, tforwarded its bar- gaining proposals constituting amendments to the inside agreement. In its cover letter. the Union expressed a will- ingness to meet with principals of Respondent at ann time agreeable to both parties. One week later, on June 24. Leo iefiner. legal counsel lor Southern Califtornia ('onference of Mill Cabinets Unions, which negotiated the 1974 77 master labor agree- ment, the so-called inside agreement to vhich Respondent was a nonmember signatory. dispatched a letter to Michael Merrill identitying himsell'f as counsel for the U nion's signa- tory to the inside agreement. lte specified that the letter was written on behalf of the Union at the request of' Ervan Os- burn as a response to Merrill's own June 17 communica- tion. In substance, iefner noted ambiguity in both Mer- ' Ellen (iomez, wile of ('irilo (Gomez, tesitii ed that in the perlilnalnce of her office duties on hchalf of Respondenl she prepared aI notficalt in trm in quadruplicate and dispatched copies t "luur dlHerent plrlies." She could not recall whether a copy wits dispatched to the ('alhtornia State Mediation and ('onciliation Service. rill's conmtm01111 catiin of Jlune 17 and In earlier conlutniLtIations Journ Respondent relating to the terlirii- tion of existing agreenlents. (etinler requested Merrill to advise himn precisel 3 which agreement Respondent intended to terminate. (effner further expressed the desire of the l nioil to meet at a mutualIl convenient time and place or the purpose of negotiating should this he indicated h Mer- rill's repls. I hereafter, by letter dated Jul 13. Merrill re- sponded to (iettiner's June 24 communication stating the v illingness of Respondent to meet and bargain with the lnio c)oncerning "Successor" agreements covering both the inside antld outside employees, Proposals relating to each sepillate unit of' ermployees were transrlitted to the ilnion under co er olf the JulN 13 letter.' Subsequentl\ b letter of Jui 2() addressed to rvaanl ()sburn Merrill tn behalf of Respondent, scheduled separate August 4 negotiating meet- ings relating irst to the inside emploees anid then to the outside erIiplonces. Both meetiligs were to he held t Re- spotndent's pretmises. Negotiating sessions between Respondenlt and the I ilion were held on A ugust 4 and 31) and October 26 and 31. A. K. Ahbrailliar associated , kith Merrill's law irm. was present 11n behalf oI' Respondent at e;chl ol' the foultlr bargaining sessions.' Merrill was present at the August 4 bargaining session but was not present at the others. The Uinion was represenlted t all four meetinigs b\ Abe l.evy ,in antorney, anld at the first t hree hargaining meetings union representa- tives Bill erpening and FIrnie Beltran were present. :r an ()sburn attended the August 4 and 3() meetings. (iomez attended none o the bargaining sessions. lowever after each bargaining meeting he ~sas hriefeJd hb Abraha . 2. he alleged ulaWlfu cinduct a. 7ic AUXlr t 4 htrgiinltg vcs\ion At this initial bargaining session Michael Merrill served as the principal spokesman for Respondent while Abe Levy carried this responsibility for the Union. The parties first discussed the status of the outside agreenment. Levy took the position that cancellation of' the outside agreement had not been accomplished because the FMCS had not been noti- lied as required by Section 8(d) of the Act. Respondent disagreed with the UInion's position. The Union took the tirther position that Respondent was bound by the newly negotiated master labor agreement which would cover the outside employees, and therefore it was not required to ne- gotiate with Respondent concerning the outside employees. I'he parties then turned their attention to certain ground rules which would govern the course of bargaining ftir an inside agreement. They agreed that a contract covering in- side employees would be bargained for "as a whole," and as ' hese ploposals relating to he inside agreement are summarized and placed in perspecrie at Appendix A lomiled rom publicationl. a icounter- p;rt nimodified from an independent analysis of the record, o a helpful and accurate extraction contained in Generall ('Counsel's brietf. I Ahraham's professional credentials for serving on the negotiating eam represenling Respondent have not been challenged. He holds a masters de- gree with a specialization in labor relations and has taught collective bar- ganilg and labor relations at the university level. At the time of negotiatlions he was associated with Merrill's law firm in the capacit of a lalw clerk and was alltrending the niversitv of San D)iego La Schoxl. ,26 MAR-I.FN CABINETS. IN(' they agreed to a provision they could sign off on that provi- sion without committing themselves to the inclusion of that particular provision in any final agreement achieved. Fur- ther, the parties agreed that they retained their respective strike and lockout rights. They then entered into substan- tive discussions concerning the inside agreement. At the outset the Union advised Respondent that a new master agreement had been reached with the ('abinet Asso- ciation covering inside employees and was subject to ratifi- cation on August 16. The Union presented Respondent with a booklet representing the changes and advised Re- spondent that it was making this available for inltormna- tional purposes only and asserted that it did not represent a bargaining proposal. The Union stated that it was willing to negotiate on the terms of an inside agreement but noted that the demand for skilled employees was great, and em- ployees would choose to work at wage scales provided in the master labor agreement rather than at lower rates. Mer- rill stated that it had been "a bad year" for the Emnploer. and he stated his willingness to support this assertion wAith data. Levy responded that it was not in the best interest of the union members to accept a contract with less than the working conditions of the master agreement. lowexer. Levy assured Respondent that this was not a ake-il-or- leave-it proposition. Merrill then offered to increase 'wages 70 cents per hour without a cost-of-li ing provision in a contract of 2 years' duration. The I nion countered with a proposal of a 3-year agreement with a wage increase of $l per hour for each classification. Further. it as the Union's proposal that certain language changes and ringe benefit increases and modifications agreed to by the parties to the master agreement be made a part of any agreement here reached. Merrill responded that all fringe benefits had been deleted in the Company's proposal. and Merrill further noted that the Company was proposing to furnish its n health and welfare program. In this repect Merril noted that the Employer had been 'jacked around" by the trust fbr the outside employees, and this had influenced the pre- sent approach of the Emploer toward co erage tor the inside employees. Levy responded that he would listen to any proposal which the Company desired to make on fringe benefits and would be happy to study that proposal. low- ever. Levy stated that he felt that a bilateral trust such as contained in the master agreement was in the best interest of union members. Merrill then slated that the C(ompan. wished to do away with the pension fund and have no pen- sion benefits at all. In this regard he stated that few If' any employees ever saw the actual benefits of the fund. I.evN replied that the Union could not agree to that proposal because it would not be in the best interest of its member- ship to have no pension program at all. l.evy further noted the willingness of the Union to look at any health and wel- fare protection package that the Company might suggest. He added that the entire matter of health and welfare pro- tection and a pension fund was negotiable. Merrill then asked the Union to state its position with respect to the Company's earlier submitted proposals. Levy responded that the Union's own proposals were now off the bargaining table because a new master agreement had been negotiated Levy took the position that. as a consequence, the C(ompa- ny's counterproposals to those initial proposals of the Union had become moot. Merrill agreed to reiew the U!nion's proposals and slated his desire to schedule a subse- quent bargaining session. ev noted that he had no time available until August 30 and suggested that date tfOr the next meeting. Ihis date as agreed upon. Merrill stated that he would he expecting to receixe the : nions proposed changes to the health and wellaire and pension programs in the mail. The bargaining meeting ended on that note. It had lasted approxim;ately 45 minutes.' b. he .ui( glsl 30 teclin' As the first order of' substanti e business at this bargain- ing session the Union stated that it understood that since the last bargaining meeting the (Compa n! haLd made certain unilateral changes aflecting both the outside and the inside employees. Abraham, who vas the onl represenatie of the (ornpan present at this bargaining mectinrig stated that he wished to address each group separatel?,. With respect to the unilateral changes instituted for outside emplo ees. Abraham asserted that the Ilnion could determine the na- ture of those changes b retference to the bainglining propos- als which the (Corpan had submitted with respect to the outside employ ees. he l nion pressed Abraha l to disclose more specifically the nature of these changes, and \brahai adhered to his position that the determination ould he made through reference to earlier proposa;ls. .brahamn stated that he , as not prepared to discuss ma;lter pertailn- ing to the outside emplo, ees all fuirther a this time. Abralhamr then stated thalt to the best of his knowledge nIo unilateral changes had been made with resptect to the inside emplo!ees. lie asured the nion that nianaellient was continuing to make pa! mentts to the pension lrind. At this point in thle nleeting lI.e noted thit uliholln pro- posals had been presented to the (Cormpanl and he tated that he now \wished to heair the C(')llpiln's proposals. Abrahanm responded that the (ompan'l, was adslancing the salme proIosals is it did 1II the last meeting, including a wage increase of 7) cents per houlr o',er a1 2-cailr period and language changes to the presious co(tract as sublllitted inll the C(omlanns proposals. In cfflct, the :niion then modi- tied its preslous age proposal of' $1 per hout over the 3- !ear Ihle of tIhe conitract to provide tfor increases of 9() cents per hour tor each of the 3 sears of the contract. plus the language changes previousl? submitted in its other propos- als." he Un Iion asked i manaement had changed its pre- vilous position at all. Abrahaill stated that the (otmipatil was standing on its proposals made during the bargaining sessioi. lowever. he further stated that it' the nioin ad- ,anced proposals thlatl wre attractite to ill.nlctgelile which A ould assist the ('Cotpa ny in reaching its goals, the Ihc Iircgilllg fin ngs . rc hcd upon the riilen tipuotl l u hich t1 Ceidenc. thT supporting notes \ K A.hrahal;11lld the tcetinlln\ O t Michael Merrill hile I credit the lcstimnorn, it Merrill It the efiect that in discussing the uiupply-;nd-demrnnd eticlt oIt . lge c4 ale hel.u thal cn- lained in the naster labor greenment the spokntlall lot the nn ndtciale thai unIoIn rntcmher, uultld xercisc their pion ito o rk clc'ahere .at higher age,,. I relect il Illter ncc or nl!l11 Tt Ih. t I llon li.i\ll d e.n ithc A g iartl henetil pr-, Morns ,I the illt.iler lahlr I agrclmeitc l li .1 .ikc-lrt-ir-l l c-It hlts I he noltes ,Ai Ahr.ahm .Ak1n diuring the cOtll.¢ )tI Ithc Ai1tJL 4 tlcc ing are riLtnlsicti wullh al\ ItICh Inlterprelill.ll l I he nic" nlalcter .igremlcln prolrdcd lor mr c l c.inc .rl c n .lt 70 c.rln. 3( 1 cenis. .ain 1(l cetl . rcsC'[ilmc. \ OCr lc 1 i cir rirll ot thait agreement I)2( ISI()NS ()F NA IO()NAI. I.ABOR RELI.AIONS BOAR) Company "might have different proposals." Ahraham stated that Respondent could not he competitive at the wage levels proffered by the Union. Additionally. Abraham noted that the Company was advancing a new proposal calling for the deletion of section 6 of the former master agreement and the substitution of language indicating that inside men would be paid what the outside men were cur- rently receiving in the event the inside men were assigned to do unit work. Tlhe Union labeled this as "movement back- \ard." lowexer. Abraham responded that he did not so view the matter.' fie noted further that the Company was reinaining "'pat" on its present proposals, including a "staunch" position on the 70-cents-per-hour wage increase. lowever. Abraham noted that this 70-cent increase could be "broken" or allocated in any manner acceptable to the t nion. In this connection the Union noted that the ('om- panin was proposing to delete section I of the master agree- ment relating to wages. Abraham confirmed this. observing that the Company agreed to language which would commit the Company to pay the wage scale agreed upon by the partics during the course of' the instant negotiations. At this point in the meeting the Union asked Abraham to state the ('ompany's position with respect to paragraph 2(a) (overtime) of the master labor agreement. Abraham asked the I'niion i it intended to go through each and every sec- tion and subsection of that agreement in order to determine the (ompany's proposals. [le received a response to the effect that this was what the Union had in mind. Abraham thereupon stated that the Company was adhering to the earlier submitted proposals discussed during the last bar- gaining session. The Union urged the ('ompany to sign the master labor agreement and inquired why the Company was "so much different" from the other cabinetmakers cov- ered by that agreement. A discussion followed with respect to the nature of bargaining. At this juncture the Union asked to see the health and welfare plan which the Company was proposing as a substi- tute for section 17 of the master agreement. Abraham stated that he did not bring the plan with him but that if the Union wished to review it, he would send the Union the details. The Union took exception to the Company's inabil- it' to submit the details of the plan at that time but noted that it did desire to have the information dispatched to it. The discussion then turned to the pension plan. Abraham stated that the Company was proposing no pension plan. The Union then noted that the Company had liberalized the service requirements to qualify for paid vacation. Abra- ham verified this, and he summarized the details of the pro- posal. The Union then asked why seniority was being dropped, and Abraham answered that a seniority system "breeds inefficiency" and deprives the Employer of the right to assign his workers to the jobs for which they are best qualified. Abraham further noted that in order to stay in business the Company had to have an opportunity to run an efficient and effective shop. He asserted that seniority H Respondent had implemented its previous written proposal of $12 per hour fir outside employees. up from the prior s$980-per-hour level. Respon- dent took the view that this resulted in an actual indirect benefit to inside employees realizable as a consequence of the Company's new proposed sec 6. "deters" that eflort. The Union then noted that the arbitra- tion clause (sec. 10 of the master agreement) was being de- leted and stated that this allowed the Employer to termi- nate employees without just cause. lie asked if it were the intention of the Company to provide for no arbitration pro- cedure. Abraham answered that this was the intention but stated that although the grievance and arbitration proce- dures were being deleted, this did not necessarily mean that he Company would terminate employees arbitrarily or dis- criminatorily. He also stated that, to allay, the I nion's ears, the Company would agree to language which in principal expresses the concept that the [tmploy er would not dis- charge employees without just cause. In context of' this dis- cussion the Union observed that deletion of section II) would give the Union the right to strike over anN dispute during the term of' the agreement. 2 Abraham responded that although section 10 was being deleted, the ('ompany was also proposing a no-strike proposal. I ev reviewed this proposal and asked if' this were still the ('ompany's pro- posal. He received an affirmative answer. I he I nion coun- tered that it would accept a truncated version of' the ('om- pany's no-strike proposal. provided the ('ompany would accept the arbitrationl provision in the present contract. I'he ('ompany's no-strike proposal was as follows: It is underst:od and agreed that neither the onion nor the employees shall advocate support, or engage in a strike, slow-down, sit-down, or other tactic which in- terfires with or delays the [!mployer's scheduled pro- duction. The Union agrees that it will take all neces- sary steps to bring an' such action to immediate termination, upon request of the t'mployer. and that its failure to do so will subject it to liabilit 5 fr ans financial losses incurred by the employer, including. but not limited to operational expenses. loss profits. attorne lees and court costs. he Union specifically waives fir itself and the employees any otherwise la\w- ful right to observe, or to refuse to work behind, a picket line. The lInion proposed to accept all language of' the proposals up to and including the words "immediate termination" as they appear in the second sentence of the Company's pro- posal and to delete all language appearing thereafter. Abra- ham responded that he would like to leave that proposal on the table and to return to it later. The Linion acquiesced and thereupon stated that it wished to withdraw its pro- posal [sec. 20(m)] relating to the posting of a bond by an employer becoming deliquent in health and welfare and pension payments on more than one occasion during the contract term. Abraham accepted this withdrawal. here- upon, the Union proposed deletion of section 9 of the con- tract relating to the joint labor-management study commit- tee and requested a statement of position from the Company with respect to section 7 of that agreement relat- ing to the rights of union representatives. Abraham stated that the Company desired to delete section 7. The Union then requested a statement of company posi- tion with respect to section 8 dealing with rights and privi- leges of shop stewards. Abraham stated that the Company wished to delete that section and asked if there was any 2 I specifically credit A. K. Abraham in making this findinding 528 MAR-I.IN CABINI'S. IN(' good reason swhy this should not he done. The nion re- sponded that the shop steward is alwa xs accorded superse- niority. Abrahaml labeled this a "specious" argument and stated thait the C(ompany was adhering to its proposal to delete section 8. The lUnion responded that superseniorit was justified in order to protect the shop steward fromil ter- mination for his union activities and also to vest greater job security in the shop steward as an incentive for him to work in harmony with the Employer in increasing shop eficiency and minimizing grievances. Abraham stated that he was not convinced. The Union then asked for an explanation for differentiat- ing between the Company's operation and those of compa- nies that had signed the master labor agreement. Abraham stated that management wished to stay in business. and that he would be willing to demonstrate to the I nion that the Company was operating "in the red." ie added that the Company would open the books to the lUnion. The Union responded that it was not its concern it' the Company was not operating at a profit and asserted that it would be more appropriate to ascribe this lack of profit to mismanagement rather than to labor costs. The :nion spokesman added that the Union did not intend to work fr substandard wages just because the ('ompany did not know how to run its business. Abraham asked again if the Uinion wanted to look at the hooks and received a negative ansswer. with the explanation that this involved a management function which the Union did not intend to fulfill. In connection with this discussion the Union again stated that it did not know what differentiated the Company from the other enterprises that had signed the master agreement. In explanation it was stated that substantial differences ex- isted and possibly some of the terms and conditions of that agreement would not apply to the Company. In this context the Union summarized factors which it believed would dif- ferentiate one enterprise from another but noted that none of these factors was applicable to the Company. The Union added that it had no reason to consider the Company to be any different from any of the other employers signatory to the master agreement. The Union spokesman warned that his organization was considering economic action. Abra- ham asked if this meant that the Union would sign only the master agreement. The Union answered in the negative and stated that it would be happy to negotiate "every single issue." This led to a discussion of whether the master agree- ment fixed the minimum proposals being advanced by the Union. The Union stated that it would not accept wage rates lower than those contained in the new master agree- ment. The Union took the position that the service of one union member should be as valuable as the services of the next and should not be placed in different classes or catego- ries. The parties agreed that the meeting should be terminated at this juncture, and they scheduled a subsequent meeting for September 12. The meeting lasted nearly 2 hours."' Ihe findings , th respect Io he o'currences atl Ihe Augius 31g meeting are based primalrlls upon the note aiken h 'hralh ilam during the course o that meeting I ha.e also relied upon Ihe slpulaled docuitent containing the written sumnilar prepared hk Abe I as relailing to the subject meeting and ihe esllmolls o A K Ahbralhal C. 11 .7t'I'M V C 7t'tlLA ()1i1%1t' 1'l tlt'tl O h i On August 5 Merrill dispatched a letter to l.e\ on the topic enumeralted aIs "collective-bharglining for oulitside e1m- plotees of kMar-Len Cabinets. Inc." The content tl the let- ter was as f'ollovs: This will confirm our discussiolns at the )i)strlct Council of ('arpenters' office mn Santa Ana oln \Augst 4, with regard to those employees otf Mar-l et. Inc. represented or collective harga;ing purposes hby the Orange County District ('Council. Ater a dliscusSio 1 and review of correspondence. it ;ass agreed that Mar- I.en Cabinets Inc. gave timely notice to the union of proposed termination of' the agreement expiring .liune 15, 1977. However, you stated that 1Mar-len ('abhinets, Inc. did not give the 30-day notice to the ederal Me- diation and Conciliation Service specified in §8t(d the NI.RA. and that the Orange (ount\ D)istrict Council was accordingly taking the position ihalt tilhe expired agreement asas not properly terminated :and therefore your client considers Mar-l.en to he bound by the recently negotiated agreement co'ering outside employees. You advised me that the lonlh basis tor your client's contention that Mar-l.en did nt proper terminate the expired agreement was the lack of notice to the FMCS. You further advised that our client is usllmi to negotiate any point with us insofar as a modhtied agreement might be concerned. because it cnIteInd that Mar-l.en is bound hb the recently executed collec- tive bargaining agreement. Our position is entirely different rolm that ll hich you stated; we contend that Mar-l.en did give our client proper notice of proposed termination off the agreement expiring June 15, and it does not consider itself bhound by any successor agreement. It has ex- pressed its interest in negotiating a modified agree- ment. and it continues to he willing to meet wsith \ou and bargain in good faith to reach a ness agreement. It is not willing to sign the recently negotiated standard agreement. The negotiating proposals offered by Mar-len ('ahbi- nets. Inc. with regard to the outside employees asere contained in my letter dated July 13 to I.eo (jetfner. copies of which were directed to your clients at the District Council. Mar-Len ('abinets. Inc. ill imple- ment those proposals. and discontinue adhering to the provisions for wages, hours and working conditions set forth in the agreement expiring June IS. 1977 effecti.c with the opening of business on Monday, August 15. 1977. If your client changes its position and wishes to enter into negotiations over wages, hours and s orking conditions for the outside employees. we ill make ourselves available through Saturday. August 13, to meet with you to negotiate a modification af t he agree- ment expiring June IS. 1977. Thereafter, on or about August 8. Respondeitn m;iiled notices to the Federal Mediation and ('onciliation Ser\ice and to the State Mediation and Conciliation Ser\ice to the effect that a labor dispute existed belseen Respondernt and the Union concerning the outside ernpl!ces. DI)FCISIONS (): NA IIONAI. LABOR R.AFIONS BOARI) Subsequentl\. by letter dated August 19. Respondent no- tified each of its outside employees that it was implement- ing certain changes in wages and benefits. The text of the letter read as follows: This will confirm our discussion of 8/19/77. The union has refused to negotiate with us for a new collec- tive bargaining agreement covering your employment. We proposed to them a new hourly rate of $12.00 with- out any employer-paid fringe benefits. Effective today your pa) will be based upon this rate, as you were advised this morning. We are still willing to negotiate with the union it they change their position & agree to negotiate. Under the terms of our proposals to the union, the union shop required was deleted. You are free to remain a union member if you wish to do so, but you are not required to be a union member in order to continue working for Mar-Len Cabinets Inc. We appreciate our under- standing and the good work ou have performed for our company. On August 19 Levy responded to Merrill's letter of Au- gust 5 as follows: This is in reply to your letter of August 5. 1977 re- garding your client Mar-len Cabinets Inc. Your statement of our position with reference to the "outside agreement" is correct. I would, however ar- gue with your interpretation regarding your client's po- sition. According to the agreement that your client has executed in the past, he is bound by any renewals or extensions of the existing agreement unless he gives proper notice. He did not do so and therefore it is our position that your client is bound to the Carpenters Outside Agreement at the present time. I note. with great interest, that you do not make any mention of the fact that Section 8(d) of the NLRA clearly states that an agreement may not be terminated without giving the notice required in that Section. Ad- mittedly, by you, your client did not give such notice and he is, therefore, bound to the continuing outside agreement. I note with interest that you make no reference to the fact that we decided and agreed to continue nego- tiations on August 30th at I I a.m in our office located at 1200 North Main Street, Suite 206. Santa Ana, Cali- fornia, concerning the "inside" agreement. I thought that this was scheduled. If it is not please let me know. Thereafter, on August 22, Merrill wrote to L.evy as fol- lows: As you know, we are in complete disagreement with the position stated in paragraphs two and three of' your August 19 letter. Even assuming that Mar-Len ('abi- nets, Inc. did not earlier give notice to the Federal Me- diation and Conciliation Service, that does not bind them to a successor agreement. Further, they have per- formed their bargaining obligation fully by presenting you with negotiating proposals and stating their will- ingness to engage in good faith bargaining to reach a modified collective bargaining agreement. My letter did not refer to the August 30 meeting. because I intended no change in the arrangements ear- lier agreed upon. We shall plan to meet with ou on August 30. as indicated in your letter. d. N'golirion.l rshedhled compati /proposals sulmited On September 9 Merrill wrote to L.evy advising l.evy that it would be necessary to cancel the negotiation conference scheduled for September 12 and reschedule it following the conclusion of Levy's vacation on October 10.4 Merrill asked l.evy to contact him to make mutually satisfactory arrangements for further negotiations. Thereafter, on September 13. Abraham dispatched to l.evy a summars of the Company's medical plan to cover inside employees. On September 19 Abraham dispatched a communication to Levy correcting the proposal in certain particulars. On October 13 l.ev' sent a letter to Merrill advising Mer- rill of the desire of' the Union to meet at 2:30 p.m. on Wednesday. October 26. for the purpose of resuming and continuing negotiations. Merrill responded by letter of Oc- tober 18 agreeing to the suggested date and noting that one of the items the Company wished to discuss would be the matter of trust fund contributions."' e. The October 26 hbargaining eeting At the outset of the meeting the Union confirmed that it was withdrawing section 20(m) [bonding] both as to the language of the former collective-bargaining agreement and the proposed modification thereof' The discussion then turned to the question of the trust fund contributions. The Union stated that it could onl,, surmise that the trust would refuse contributions from nonsignatories such as the Com- pany in order to aoid a violation of Section 302 of the Act. A discussion followed wherein Abraham expressed concern that the employees be assured some interim health and wel- fare coverage. Hle suggested that the negotiations should commence with a discussion of the (Company's own health and welfare proposal. Thereupon, the Union compared the company plan to that in existence under the master agree- ment. The Union stated that it discerned substantial differ- ences in the two plans. Abraham responded that he did not discern those differences except in the obstetrical care, and he asserted that the Company was willing to discuss the addition of that type of coverage inasmuch as the Union plan contained it. The Union noted that its plan also had dental and vision coverage and asked Abraham the cost of the Company's proposed plan. Abraham responded that it was $57.70 with maternity benefits. Ie asked the cost of the Ulnion's plan and wvas told that the cost presently was $85.55 with scheduled increases to $120.15 by August I. 1979. The Ulnion added that while negotiations were going on if Respondent would sign an agreement to make contri- '4 here is no suggestilon nor is 1t alleged that dilatory tactics cre In volxed. hi Intlrmation In the possession of he (Compan, suggested Ihal the affih- ated trust funds had been instructed by the Union not Io accepi ringe hene- fit conributions fromn employers not signatilor to the current master aigree- ment. 530 \MAR-1FN (ABINI.IS. IN('. hutions to various trust funds. including the pension fund. at rates provided fo'r in the old agreement the t.'mon would accept this a a limited agreement and as a legitimale means of avoiding a violation of Section 302 of the Act. Abraham replied that under the ground rules established at the outset of the negotiations the parties could not fragment agreement on terms hut had agree to the whole contract le noted further that no problem would arise if the parties could achieve some "overall agreement" during the course of the present session. The Union interjected with an in- quiry as to whether there were an' changes in the ('ompa- ny's pension proposal. Abraham answered that there were none. Abraham answered. however. that the Compan was proposing a 4-sear agreement with a wage increase of 70 cents per hour the first year. no increase the second sear and a 10-cents-per-hour increase in both the third and fourth years of the proposed agreement. Abraham noted that this proposal was conditional upon union acceptance of Respondent's health and welfare proposal augmented b an option to the employees to have either maternity or den- tal coverage proposal and upon the further condition that the proposal be put to a secret-ballot ote of the inside employees, with implementation conditional upon a major- ity vote of those employees. The Union countered with an offer of a 3-year contract with a wage increase of 85 cents per hour each year. Abraham inquired if this meant that the Union was rejecting the wage and health and welfare proposals just proffered. The Ulnion replied that it was re- jecting those proposals in view of the fact that the health and welfare proposal represented a reduction in benefits. there was no provision for a pension fund, and the wage offer did not meet the Union's wage demands. Abraham noted that he failed to discern the connection between health and welfare benefits and pension benefits, and a dis- cussion of this ensued. This led to a proposal b Abraham on behalf of the Company that each employee be covered by life insurance at a value of $7,000 payable upon the death of the employee if the employee at that time is in the company employ. The Union did not respond directly to this proposal but noted that it believed company insistence upon the deletion of the arbitration provision coupled with insistence on a no- strike/no-lockout clause constituted an unfair labor prac- tice under the Act. The merits of this statement were evalu- ated, with the Union noting that the Company had never been required to go to arbitration with the Union. Abra- ham then focused discussion on the Company's wage and benefit proposal. The Union stated that it rejected the pro- posal except that it accepted the 70-cent-per-hour wage in- crease proffered by the Company in the first year. The Union added, however, that it would accept this first-year increment providing the Company agreed to an 85-cent- per-hour wage increase during the second and third years of a 3-year agreement containing a cost-of-living provision. Abraham replied that the proposal earlier put on the table was conditional, and as the Union was rejecting the health and welfare proposal it was. in fact, rejecting the entire wage proposal. The Union stated its disagreement with that view of the matter and noted that it would accept the Com- pan 's life ilsurance proposal but till ,staniled .a pensionl Thereupon Abraham asked it tile l nlll uiidertlnod that the C('onpans's proposal had been conditinrl;l . liid the Il ioll stated that it hiadl no such uniderSllldt.ilig and hadl indicaited lhat it as' wkilling to accept. Ahrahiani asked if the I nion had other proposals aind rtecCTixd a illigt] c all- swer. Abraham then inquired i this representled the t nionl's finall offer anid ls Ill that the I. nlon had1111 l\l enough and was, not going to go throuh i " haride." I he LInion charged that the (ompan;n\ had been h;argaining bad fiith. Abraham; ;asked it the tl Mon had "re;all\ cn- ceded i the wages" and inquired furlher whl t as thought that the prties were goil g through a cha rde. I he Irnion answered thait the ( oimpln r1 deJellor froni the prior agreement went to the heart (If whiat had hbeen oin on in the industry fOr the last 35 ears. \brhiah;in stited th;at he understood thllt the cl did not require une olf ie par- ties to agree with the other ld asserte d Ialit the ( n n11111\ was still anxious to talk, hut thal It there cere going h be no further "mooement" then it appeared fiat the piartics ,were at impasse. he t lnion asked if the parties were at impasse. and Abraham responded that he did not think they had reached that poilt becaus e the nion hd aid that it had not made its inal offer. and Abraham a;nswered in the negative, obser ing that there was much of lthe coin- tract to discuss. Hie stated that only w ages and health ind welfire had been explored. ie added th t the ( ompain knew that the Union had not presented its final oier. nd so he surmised that there must be some room for agree- ment. At this point the U nion asked if the position of the (onm- pany on union security had been altered. Abraham n- suvered that it had not altered and urged the L nion to how why the Conmpan!'s position should he different. The Union asked if' this was the ('onpan's final position on union securit Ahbrahm slated that there was still room tor agreement and inquired about an ageny shop or a mainte- nance of membership arrangement. Ihereupon the Ilnion offered to accept an agenc shop provision hereb, the employees would not be required to loin or remain mem- hers of the Union but must pa! the L nion a monthly ser- vice fee equivalent to monthly union dues. Abraham coun- tered with a proposal that one-quarter of the service fee o to the Union to cover representation costs and three-quar- ters of the fee go to charity. This was to he on the condition that all present employees who wished to do so would be released from membership in the Union when the contract was signed. giving them the option of pay ing the ser, ice fee as opposed to membership dues. Abraham noted. in this connection. that the Company was interested in protecting Section 7 rights of employees nor to join a union as well as to join one. The Union offered no immediate response to this proposal but asked about the paid holiday provision of section I I of the existing contract. Abraham requested the Union to respond to his agenct shop counterproposal. and the Union suggested that the proposal he tabled until the next meeting. The Union suggested that the present meet- ing be terminated. It had consumed approximatel 2 hours. "I Il)t (ISIONS OF NATIONAL. LABOR REIL.AI IONS BOARI) Ahraham suested that a meeting he held the follo'sing Friday. hut the Inion stated that Monday. October 31. was the earliest thai it could meet. The parties scheduled a rectlin tor 10:3( a.m. . on Monday, Octoher 31.' I. I/it et'ents /' October 7 At approximately 2:30 p.m. on October 27. ('irilo Ciomez observed union representatises Terpening and Beltran ,salking through the parking lot on shop premises. Comez approached Beltran and asked him why he was there. Bel- tran responded that he had come to "pull the men" and iomnle responded. "What do you mean you've come to pull the men? We are still in negotiations. aren't we?" Gomez was in'formed that the action was being taken because the C'ompany had no contract. Gomez answered, in substance. that this was true, but that there wits a further negotiating meeting scheduled for the following Monday. Terpening and Beltran asked permission to do so, and they proceeded toward the shop. (omez followed, and the union represen- tatives walked into the shop and started talking to the em- ployees. (omez intervened at this point, and to minimize the expenditure of' time he informed the employees to gather in a specified area so that the union representatives could talk with them as a group. The employees assembled. Present were Elpidio Gomez, brother of Cirilo Gomez; Ed- die Garcia: Oswaldo Godoy; Caesar Martinez: and Epi- fanio Flores.'" Terpening told them that the Union had de- cided to call a strike for the following day because there was no contract.' Elpidio G(omez responded that there had been no contract since August 31, that the contract had expired. He asked why after 2 months of waiting the Union was pulling the men off' the job. Some of the other employ- ees inquired why the Union's first contact after the expira- tion of the contract on August 31 had been for the purpose of notifying them that they were being pulled off the job. Elpidio Gomez noted that most of the group had been in the Union for a long time and inquired why the Union had not had the courtesy of at least informing the employees as to the course and progress of negotiations. Other inside em- ployees stated their desire to know what was being negoti- ated by the Union on their behalf. Some dissatisfaction was expressed with respect to some of the terms of the previous contract. The union representatives did not address these statements and inquiries.l9 The employees were told that a 1, These findings are based on the stipulation of the parties. the documents subsidiary to that stipulation, and the testimony of A. K. Abraham. I credit Abraham's testimony to the effect that the Union agreed. in principle, to the concept of an agency shop, but it is clear that the parties were in disagree- ment on the important substantive issues of the distribution of fees to be generated by application of this provision, and that, in a realistic sense,. the parties achieved no accord on the Company's agency shop proposal. i" Elpidio Gomez was employed at pertinent times as a cabinetmaker and held no ownership interest in the enterprise. I do not credit Elpidio Gomez' testimony to the effect that Bob Lynn was present at this meeting. ' The foregoing is based upon the credited and undisputed testimony of Cinlo Gomez. l' The testimony of Cirilo Gomez supports these findings. Gomez was not definitive with respect to the identity of the individuals other than himself who raised these questions, nor did he define the areas of employee dissatis- faction with the previous collective-bargaining agreement. picket line would be established the fl'llowing morning. F:mployees inquired whether they would be able to work behind the picket line, and they received no answer. 'I here- upon Cirilo Gomez addressed the union representatives in- quiring, "If you are going to set up a picket line out in front of the shop and they employees as union members cross the picket line, they are going to he subject to being lined. aren't they?" He received no answer, and he repeated the question. Again. no answer was given. The meeting termi- nated on this note, and the union representatives left the premises.!" g. The p'iAclinlg (afl rc'ltred o 'nixts Cirilo Gomez arrived at the shop at approximately 7:15 on the morning of Friday, October 28. Terpening was pa- troling outside the shop with a picket sign reading "Mar- Len Cabinets. On strike. No contract." No other pickets were patroling the premises. I'he inside employees were as- sembled in the parking lot. Gomez approached the employ- ces. and one of them recounted an occurrence in another shop where union members had crossed the picket line and had been subjected to fines. 'he employees expressed inde- cision as to whether to work or observe the picket line. T'he employees milled around in the parking lot for 15 minutes, at which time employee Bob Lynn told omez that he wanted to go to work. Gomez responded that work as available and Lynn could go to work, but Comez added that he did not want the employees to encounter trouble by crossing the picket line and incurring a fine from the Union. Lynn stated that he wanted to work, and Gomez told him that in order for him to work behind the picket line without being fined by the Union he would "probably have to re- sign" from the Union. Gomez advised Lynn to check with the Union. Gomez again added that he did not want the employees to get into any trouble. Lynn stated that he would check back with Gomez. Another inside employee, Juan (;odinez, also informed Gomez that he wished to report to work, and Gomez gave him the same instruction that he had imparted to Lynn. At 7:30 a.m., the normal starting time for the shift. Gomez proceeded to open the door and go into the shop. Some 30 to 60 minutes later Lynn contacted Gomez by telephone at the shop. Lynn told Gomez that he had talked with the financial secretary of the Union about resigning and had been told that he could not resign because it was against the Union's constitution. Gomez was not aware of any constitutional prohibition against resignation, and so he put Lynn on hold and contacted his attorney. Michael Merrill. He relayed Lynn's statement to Merrill, and Mer- rill advised Gomez that the Union could not prevent Lynn from resigning, and that Lynn could resign if' he chose to do so. Merrill advised Lynn to submit any resignation which he wished to offer by certified letter or to deliver it in per- son. Gomez conveyed this information to Lynn, who told Gomez that he was going to resign and would come back to :' The findings Aith respect to the picket line inquiries are based upon the credited and undisputed testimony of ('irilo Giomez. 532 MAR-I.IN (CABINE IS IN(C work. (iomez stated that this was entirely up to I.N nn. I.) nn responded that he was going to draft a letter of' resignation immediately and asked if' he could come hack to work. (Go- mez then asked Merrill if this would he satislactor andi Merrill gave him an affirmative answer. I.vnn was told that it was satisfactory tfor him to return to work. I'hereaftter Lynn came to the otfice of Respondent and presented to Ellen Gomez two letters dated ()ctober 28 addressed to the Union. One of' the letters was in script and the other was printed: both contained the following text: "1 Robert l.snn herehb resign my membership from the [Inion 2172." Both letters bore the purported signature ofl Robert l.ynn. Lynn asked Ellen Gomez to dispatch the letters by certified mail. and she did so after afixing the necessat postage which the Company supplied.2 IL.nn reported at approximately 10 a.m., telling C(irilo Gomez that he had sent his letter of resignation to the Union. I nn returned to work .2 After working hours on Friday. October 28, Edtie Gjar- cia also contacted Gomez by telephone and told him that he had contacted the Union and had been told that he could not resign because there was a strike in progress and a labor dispute existed involving the Ulnion anti Garcia's Employer. Garcia told omez that he was available for work the following day, hut Gomez told him that he did not wish Garcia to get in trouble with the Union and he fined. Gomez added that there was work available, hut the picket- ing was still in progress and as a union member he was subject to being fined. Gomez mentioned that to avoid being fined Garcia would have to resign from the Union before returning to work. Garcia stated that he would draft his letter of resignation that evening and mail it. Garcia tendered his resignation on Saturday, October 29. His letter declared his resignation effective October 29. Garcia re- turned to work on the date, telling Gomez that he had sent letters of resignation to the Union. Although the picketing continued on Saturday, October 29. both Garcia and Lynn worked in the shop. They were the only employees who worked behind the picket line on October 29.?2 On October 28 Epifanio Flores tendered his resignation from the Union after having informed Wendle Decker. sec- retary of the Union, during the course of a conversation with Decker that he was resigning his membership in the Union effective October 27.24 Thereafter, on Sunday eve- ning, October 30, Elpidio Gomez prepared his written resig- nation, and on Monday, October 31. at 7:30 a.m., Gomez reported to work at the shop. A single picket patroled the shop premises, and as Elpidio Gomez passed the picket pre- paratory to reporting to work he handed his written resig- nation to the picket. He then went into the shop and told 21 Ellen Gomez performs office duties and holds an ownership interest in the Company. 2 The foregoing findings are based upon the credited and undisputed tes- timonies of Cinlo Gomez and Ellen Gomez. as well as documentary evidence of record. Ellen Gomez was unable to explain why Lynn presented her with both a handwritten and printed letter of resignation. but she credibly testi- fied that this was the form in which the communications were presented to her by Lynn. 21 The credited testimonies of Clrio Gomez and Ellen Gomez support the foregoing findings. I have also considered the stipulation of the parties which is consistent with these findings. 2u Flores and his wife hold 50 percent of the st.k of Respondent Cirilo Gorimez that he had resigned rom the niont and wkas read to go to work. Gomez returned to work: (iarcia and I. nn were also working. (omez had had no prior know l- edge of the resignation of Garcia or I. nn from the I inlloi' Ihe parties stipulated that on October 31 Juan (Godinez tendered his written resignation from the nion. he cred- ited testintons of Ellen Gomez reveals that she prepared the typewritten colimmlunicaltiol, to the Linion. addressed the en- velope in which it was dispatched b. certified mail pre- pared the certified mnail formis, anid aflised the necessarN postage. She had earlier performed the satme ser, ices for [:lores I'he stationary, envelopes. alcd postage. totaling $2.08, were provided b the (ompan ()n Mlondas mniorn- ing, October 31. arciat. (odinez, Elpidio (iomez. and I. nn reported for work. No picketing transpired on I lues- day. November I. or at ans time thereafter. B! written communications dated November I ()Owaldo (Jodoy and C'easar Martinez subnitted their resignations from the Union effective November I and 3, respectiely :'- h. The it iilidralsl t 'rccr*ognlin On Frilda evening. October 28. Cirilo ome; had in- formed Merrill and Ahraham of the conversation which he had had with l.ynn concerning Lonn's desire to return to work and resign from the U nion. The follo ing day. Octo- ber 29, Comez contacted Merrill and Abraham and told them that Lynn and Garcia had returned to work behind the picket line. On Monday morning Abraham went to the plant at approximately 7 a.m., and when he arrived he ob- served Terpening picketing. As he watched from his an- tage point. Abraham observed Elpidio Gomez hand a pa- per to Terpening and proceed inside the shop. Then he saw Garcia approach Terpening and go into the shop. There- after. (iodinez came into the shop and spoke with (Cirilo Gomez who had arri ed on the scene. Abraham heard Godinez converse in Spanish with Gomez.: ' Gomez in- formed Godinez of the risks of being fined for working he- hind a picket line. Gomez offered Ellen Gomez assistance in preparing Godinez' resignation should he desire to resign from the Union. In this connection, however, Gomez re- quested Godinez to wait outside the shop until such time as Ellen Gomez reported for work. Later Abraham observed Ellen Gomez arrive and saw Godinez and Ellen omez engage in conversation. He then observed Ellen Gomez type some material and present it to Godinez who left the plant and presented it to Terpening. Thereafter Godinez came in the shop and went to work. Some 15 minutes later Abraham observed Godoy enter the shop and heard him tell Cirilo Gomez, in effect, that he did not wish to work behind the picket line, and he had secured a job elsewhere through the auspices of the Union. 2 The findings with respect to the resignation of Flores from the nion are based on a stipulation of the parties. The findings with respect to the resignation of Elpidio Gomez are based on his credited and undisputed tes- timony. The precise content and working of Gomez' resignation is not con- tained in the record is Documentary evidence of record supports this conclusion. 7 The record establishes that Cirilo Gomez was bilingual was skilled in the Spanish language as well as English. 533 I)t( ISI()NS ()f NAI I)NAI. I.ABOR R.AI IONS BOARI) Sonic 30 linutes later Abrallhall obsered another eil- ployee speak with (ioomez and heard his inquiry about the status of negotiations. (omeZ told him that there would he a meeting, and the employee said that he would check hack with (iomnic aroun ld noon. Ihe employ ecc lefl't 'Thireafter (;oniez and Abrahaln discussed the implica- tions and ramifications of the resignations, and they placed a call to Merrill. In a joint telephone conversatlion Merrill, Abraham and G(ome discussed the resign;ations, the reac- tion of the employees to the meetiing with the union repre- sentatives on the afternoon of October 27. the apparent frustration of the employees because of' their inability to obtain instructions and information concerning their rights or obligations with respect to observing or working behind the picket line, and their apparent disenchantment with their inability to obtain information directly from union representatives concerning the piogress of hirgaining. l)ur- ing the course of the conversation they discussed the legal ramifications of attending the negotiating session scheduled for that day. Merrill advised (iomez that the ('ompany should withdraw recognition of the Union on the basis of information which had been imparted to Merrill by (iome and Abraham during the course of their telephone conver- sation and during the previous days. 2 Gomez testified that he relied heavily upon the profes- sional advice of his attorneys in dealing with the Union over the terms and conditions of employment covering the inside employee group. tHe testified further that he desired to reach an agreement with the nion, and that following each of the bargaining sessions he met with and was briefed by Merrill and Abraham concerning the progress of nego- tiations. As a result of these consultations and on the basis of information imparted to him he reached the conclusion that neither economically nor financially could he operate under the terms which the Union was proposing for a new contract. Merrill testified, in substance, that economic exigencies confronting Respondent "in a large sense" dictated the pro- posals fashioned for submission by Respondent during the course of bargaining. Merrill further testified that deletion of the union-security provision of the existing agreement had economic significance in that employees obligated to pay dues under a union-security provision predictably look to their employer to offset that expense in the form of' in- creased wages. Moreover. Merrill testified that the Union had interpreted the existing union-security provision in an unlawful manner so as to require membership as a condi- tion of initial employment, and this exposed the Company to potential unfair labor practice charges at the hands of the existing complement of employees and to predictable litigation costs.0 12 Abraham's testimony does not disclose the identity of this employee. but the context of his testimony suggests that it was either Flores or Martinez. 2' The foregoing findings are based upon a consideration of the credited testimonies of Cinlo Gomez, A. K. Abraham, and Michael Merrill. 30 Merrill testified that the Union had insisted that Gomez' sons perfect union membership as a condition of initial employment with the Company. but he was not specific with respect to dales nor did he proffer any further details with respect to the asserted unlawful interpretation accorded the union-secunty provision in the past by the Union. i 71he Oc hto/r 31 t cting I'he parties met as scheduled on October 31. At the out- set of the meeting Abraham told Abe l.evy, who represent- ed the Iinion, that the (omrpany hadl a reasonable belief' b;sed upon sufficient objective evidence that the Union no longer represented a malority of the ('ompan?'s inside em-- plo ces. Abrahnam added that this released the ('ompan, front its obligation to hargain. I'he meeting ended." ('onclusions I. I'he failure to comply with Section 8(d)(3) The (General (Counsel correctly contends that Respondent violated Section 8(a)(5) of the Act bh changing g the terms and conditions of ermploy ment of enmployees in the outside unit without coimlplying with the requirements of' Section 8(1d(3) of the Act. 'This noncompliance resulted from the failure of Respondent to serve a notice of an intention to terminate or modit the terms of the existing outside agree- ment on the California State Mediation and ('onciliation Service. ['he statutory duty to bargain collectively includes com- pliance with the requirements imposed by Section 8(d) of the Act. Uinder this section no party to an existing collec- tive-bargaining contract "shall terminate or modify such contract, unless the party desiring such termination or modification" takes the following action: (3) notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the exis- tence of a dispute, and simultaneously therewith noti- fies any State or Territorial agency established to medi- ate and conciliate disputes within the State or lerritory where the dispute occurred, provided no agreement has been reached by that time; and (4) continues in full force and effect, within resort- ing to strike or ockout. all the terms and conditions of the existing contract for a period of' sixty days after such notice is given or until the expiration date of such contract, whichever occurs later. The Board has held, in effect, that an employer having the obligation to give notice under Section 8(d)(3) of the Act who nonetheless proceeds to terminate or modify an exist- ing collective-bargaining agreement without having served the requisite 8(d)(3) notice on the proper state agency vio- lates Section 8(a)(5) of the Act. See, e.g.. For Midwest The- atre.s. Inc., 158 NLRB 1096 (1966): ('rescent Bed Compans, Inc.. 157 NLRB 296 (1966): Pacific Grinding Wheel Co., In'., 220 NLRB 1389 (1975): see also Keystone Steel & Wire. Division o/ Keystone Consolidated Indus.trie.s, Inc.. 237 NLRB 763 (1978): N.L.R.B. v. Huttig Sash & Door (o.. Inc., 377 F.2d 964 (8th Cir. 1967). United States Gpsum Conmpany, 90 NLRB 964 (1950), is not to the contrary. Gyp- sum and its progeny, arguablvy supportive of the proposition that the notice provisions of Section 8(d)(3) come into play only in context of a strike or lockout, must he carefully construed and applied, giving full deference to the precise " The foregoing is based upon the stipulation of the parties and the docu- mentary evidence subsidiary thereto. 5'34 MAR-I.EN ('ABINFIS. IN(' circumstances in which compliance or noncompliance with the 8(d) notice provisions was deemed a matter of decision- al significance. e.g.. Ji Line Producls. Inc(.. 229 NLRB 322 (1977). and cases cited at In. 2.2 Having failed until August 8 to serve the notice required by Section 8(d)(3) of the Act upon the C'alifornia State Me- diation and Conciliation Service. Respondent was obligated to refrain from changing any term or condition of employ- ment covered by the existing collective-bargaining agree- ment for a period of 30 days. or until September 8. See (hauffilurs. Salesmen and ttelpers Local 572. Internalional Brotherhood oo f Teamster.s', (haut/ltfrs. 'arehouscmen and Helpers (/ America (Dar San (ofnmti.~sarl). 223 NI.RB 1003, footnote 2 (1976): Local o. 156. l,'nited Packiig- house Workers of Amlerica, A FI. (10 ((Da Quoin Packing Company) 117 NLRB 670 (1957). Hooker Chicuales & Pla.s- tics Corporation. 224 NLRB 1535 (1976). B changing the existing terms and conditions of employment for its outside employees on August 19 before the elapse of the 30-day period Respondent engaged in conduct which violated Sec- tion 8(a)(5) of the Act. Contrary to Respondent. its failure to comply with 8(d)(3) requirements was not cured by reason of the Union's March 22 letter to various employer-associations stating its wish to reopen the outside agreement for amend- ment and modification. Although copies of that letter were forwarded to both the Federal and California State Media- tion and Conciliation Services, this did not serve Respon- dent's purposes, for, in a direct fashion. by virtue of its earlier March 4 communication to the Union, Respondent had taken the initiative in seeking to reopen the existing agreement to modification or termination. In this regard the Board has held that the obligation to give the notices re- quired in Section 8(d)(3) of the Act resides with the party who first moves to reopen the existing contract, and this obligation does not shift to the other party to the contract regardless of positions taken by the parties in the negotia- tions. Royal Packing Company. 198 NLRB 1060. 1068 (1972), affirmed sub non Local No. 545, Amialgamated Meat Cutters and Butchers 4trAmen o' North Amentrica, AFL CIO v. N.L.R. B. 495 F.2d 1075 (D.C. Cir. 1974). It is essential in the instant record to conclude, as I do, that Respondent's March 4 letter to the Union relating to the outside agreement served as a notice to the Union of the Company's intention to terminate or. in the alternative. substantially modify the existing agreement. It is notewor- thy, in this respect. that the letter not on1v declared the wish of the Company no longer to "belong to the Union." but also stated a willingness to engage in bargaining discussions with the Union should the Union desire to meet lor that purpose. For its part, by virtue o'its letter of March 18. the Union did. in fact. invite further discussion of the (Compa- ny's stated intention to cancel the existing agreement. at the same time communicating the Union's unqualified refusal '2 In the case at har. clnlrar, to Jet .ti,, n .auloinlalti rcnew.al IsuIu is posed. for I find Respondent's Ma.irh 4 leiter sias stilcicnl t lr tor ltall re- newal ol the existing agreemenl iand 1to lull' cnmpl? with the noice require ments of Sec 8(dX I) of he Act to) acquiesce in cancellation and its desire to continlue a dialogue and contractual relationship." Nor as Respondent justified in making unilateral changes atl'ecting the outside emploNees bh reason of an asserted impasse in collective bargaining concerning that unit of emploIses. Isen ift' a genuine bargaining impasse had existed. this, on the facts of this case. does not eliminate thle necessity o' collpliance with the notice prtlsistons of Section 8(d)(3) of the Act. See ,\.I.. RB, . lnit.g .;L i & I)oor (C,,.. 377 I.2d 964. 968. 2. 'Ihe refusal to bargain inside unit Morever I ind that Respondent failed to honor its bar- gaining obligation under Section 8(d) to meet and confer in an honest and sincere effort to resolve ditterences and to reach a mutually acceptable agreement co\ering inside em- ployees. Section 8 (a)(5) of the Act requires parties to) collec- tive-bargaining negotiations "to enter into discussion with an open and fair mind. nd a sincere purpose to find a basis of agreemient." N. L. R. B. v. Herman au.a:zge (orpant, Inc.. 275 F.2d 229. 231 (5th ('ir. 1960). The Supreme Court has noted that collective bargaining "presupposes a desire to reach ulti mate agreement. to enter into a collectie-bargain- ing agreement." N. I.. R. B. . Insurance .gents ' Inlternational Ullion, At FL (CO [Prudcential Insluranlc (Co./. 3 6 1 U.S. 477. 485 (1960). I find that Respondent evinced bad faith as negotiations evolved and did so pursuant to a strategy which would foreclose agreement to contract terms on an, basis other than one requiring submission bh the nion to a decimation of' its status as the bargaining representative of' unit employees and a concomitant defeasance of' the right of the emploees to he represented hb a labor organization with genuine authorit, and power to administer contract terms and to represent and safeguard employee rights and interests. free from dependence upon the benevolence or beneficence of management. I reach this determination in full recognition of the principles enunciated b the Supreme Court in . . R. B. v. .4American 'National nsurance (CO.. 343 .S. 395 ( 1952), an( i N. . R. B. v. Insuratnce .-lgents' Inter- national nit.s.4t, 'i (/10 /Prudential Insurance ('o.. vu- pra: and 11 KA Porter Co., Inc. v. \'.I.R. B., 397 U!.S. 99 (1 970). The record establishes that management in the person of Cirilo Gomez, approached negotiations for a new contract with deep concern over the downward trend of profits and with certitude that to operate at levels of monetary return deemed desirable it would be necessary to diminish the po- tential economic impact of any successor agreemlent. In the abstract. I discern no bad faith from the fact that in enter- ing into contractual discussions with a labor organization an employer advances economically stringent proposals subst;intiall', at variance with terms of the more liberal counterpa;rt pro isions of' an existing collectie c-bargaining agreement. I find it necessa;lr. howeer. on the basis (of the " I hls the nllln cepressed lthe hpc that Rcspondent :)ould 'ontinue t emlp 0 "i TII nlcnlhers 1ln he contrl tllt Inlldttr '" Ihe re;lilles aire thai conlln*id emplio men of Ilnlll ncm erhr, could .and oduld. in the nliure oI thing. clsit *onl Imrolll aI isilllgnllS oin the prl ot Respondernt I cnltorri to wPages. hur,. nid ternis .aid condltlions ot emplo, nierlit ccptahle to the I non 535 IDEC)(ISIONS 01 NAIIONAI. ILABOR Rl.AIIONS BOARI) instant record, to determine whether, with respect to con- tiact proposals having direct cost implications here, Re- spondent bargained in the manner consistent with Section 8(d) of the Act. It is sufficient in context of the case at bar to conclude, as I do. that Respondent entered into negotia- tions with full intent to reach accord on an agreement with the Union if the Union would agree to a stringent reduction in employee benefits at or near the levels advanced by Re- spondent and l if the Uinion would acquiesce in deletion. or substantial modification, of provisions in the existing collec- tive-bargaining agrecrncnt covering union security: arbitra- tion: the right to strike and observe picket lines: plant ac- cess to union representatives: the rights of shop stewards: and seniority. I conclude that, in point of fact. Respondent entered negotiations with the expectation that the Union would not accept the fundamental dilution of its representa- tional authority implicit in these proposals. I further find that Respondent, in bad faith, adhered to these proposals throughout negotiations with the object in mind of forcing t breakdown in negotiations. The clear net effect of an adop- tion and implementation of the proposals would be a sub- stantial weakening of the bargaining power of the unit em- ployees and a material expansion of the perogatives of management to control virtually all elements of the work and employment relationships, essentially untrammeled by effective interposition of a bargaining representative. See Nreon Sign Corporation. 229 NLRB 861. 862 (1977).4 It is true that in advancing these proposals Respondent prof- fered economic justification, but I find that the cost implica- tions were so theoretical and marginal as to be pretextual. The cornerstone of Respondent's strategy was the union- security provision. Nothing in the statute required Respon- dent to agree to the retention of that clause in the contract. but the absence of good faith on the part of Respondent in suggesting deletion of the union-security provision is dis- cerned from the essentially specious explanation proffered by Respondent's bargaining representatives in justification for abolishing the clause. Thus Respondent advanced no convincing documentation for its assertion that the Union was or had been applying the clause in an unlawful man- ner, and Respondent's speculation as to the potential pro- spective litigation costs to be generated as a foreseeable consequence of retention of the clause served only to place Respondent in a position of grasping at straws in an effort to find justification for proposing an abandonment of the existing scheme of union security. he absence of good faith on the part of Respondent in treating with this impor- tant bargaining topic is further indicated by Respondent's response to the Union's counterproposal for an agency shop. The essentially patronizing scheme advanced by Re- spondent fbr dividing service fees to be paid under an agency shop arrangement was hardly consistent with honest endeavor to enhance the prospects for agreement on that fundamental issue of importance to the parties. The ioresee- able effect of Respondent's essentially frivolous counterpro- posal for the division of fees engendered through an agency In Nee,n SXin ('rp , bura. the Board obherved as liflow;s: While it appears that Respondents. prticulrl Industrial. required some financial relie, possibly Ito the extent hcir proposed wage and benefits cuts provided. heir intransigence on noneconomini issues as well is not explained or excused bh thai crcunmstancee shop agreement was to impose a damper upon union etfforts to resolve the issue and was indicative of an absence of good faith on the part of' Respondent. Respondent coupled its strategy with respect to union security with a proposal to delete the arbitration provision of the existing contract, with a urther proposal to prohibit strikes and to impose a waider upon the right of' eiploees to observe picket lines, Respondent argued that elimination of the arbitration clause would serve as insurance against potentially costly arbitration, and the imposition of a prohi- bition against strikes and observance of' picket lines would conduce to orderly scheduling of work, minimize work dis- ruptions, and result in consequential monetary savings to nianagemenl. lThe absence ol reasonable economic justliica- tion for elimination of' the arbitration provision is demon- strated by the record evidence revealing that the provision had not been invoked by the parties during the 10 years of the existing agreement. But the potential prospective effect of deletion of' the clause and prohibition against any and all strike action supported by a lawful picket line would be to leave the employees and their bargaining representative without any recourse in resolving grievances and challeng- ing supervisory decisions and actions. his, coupled with Respondent's adament insistence upon an abandonment of seniority. had the effect of' significantly expanding, in a po- tential but practical sense, the scope of management pre- rogatives. 'This expansion, under Respondent's proposals, was to be enhanced by circumscribing plant visitations of union representatives and by diminishing the status of stew- ards vis-a-rlis rank-and-file employees. The foreseeable re- sult to flow from the adoption of' these proposals would be a diminution in the quality and quantity of union igilance over management actions and an attenuation of' support offered the members by) and through the Union. In these circumstances I conclude and find that in treating in the manner described with the afloresaid proposals during the course of' the three bargaining sessions which marked the negotiations between the parties herein, Respondent evi- denced bad faith inconsistent with the requirements of Sec- tion 8(d) of the Act and violatlie ofl Section 8 (a)(5) of the Act. See (Gl ' Stat. Manult/cl'ture'r., Inc., 230 NLRB 558, 569 571 (1977): see also 7Tomco ( ommunicalions, Inc., 220 NILRB 636 (1975). enlorcement denied 567 F.2d 871 (9th (Cir. 1978). Contrary to Respondent, nothing in the conduct and strategems employed by its representatives during the course of the three bargaining sessions lends credence to its assertion that it was willing to continue the bargaining dia- logue particularly with respect to union security and arbi- tration. The impediments to agreement on critical noneco- nomic issues interposed by Respondent, for example. with respect to the agency shop matter and the advocacy of' a broad prohibition against strikes and employee observance at the picket lines superimposed upon an insistence on dele- tion of' the arbitration clause. lends little support to the no- ion that Respondent was approaching its bargaining obli- gatiion with the requisite good faith. "(Collective bargaining . .is not simply an ccasion fr purely liornmal meetings between management and labor, while each maintains an attitude of 'take it or leave it.'' NI.. R.B. v. Insurctl( .-get Uiion, 1 F. ( /0 /1)"rit ttial Insurancc ( o./, mupra. While 536 \MAR-I.IN (ABINI IS. INC the IUnion demonstrated a high degree of rigidit, with re- spect to its bargaining delmands in a posture and context of' the instant negotiations this does not serve to Xalidate Re- spondent's conduct. ('ompare IIanor Vining cand ( nirl r- ing C'orporatiorn. 197 N RB 1()057 (1972). Respondent had demonstrated its had faith prior to the October 27 strike. and if the negotiations became truncated in a manner de- priving Respondent of a full opportunity to hargain oer noneconomic matters. the fault lies primarily with Respon- dent for. in taking the initiative in canceling the scheduled October 31 meeting. Respondent did not possess a reason- ably based good-faith doubt as to the Union's continued majority status in the unit of inside employees. I further conclude, as a measure of' the absence of' good ftaith ith which Respondent approached the bargaining table. that Respondent's reliance upon events surrounding the strike was pretextual and not foreign to Respondent's declared objective of going "nonunion" or. in the alternatie. as dis- cussed above, of' substantially diminishing the status of the Union as the statutory bargaining representative of the in- side employees. Upon the entire record I conclude and find that Respon- dent failed to bargain in good faith with the nion coin- cerning the terms and conditions of employ'menlt for em- ployees in the inside unit. I further find that purposes of the Act require a directive to Respondent to. upon request. re- sume bargaining with the Union in a manner consistent with the requirements of Section 8(d) of' the Act. This reso- lution of the issue in no manner derogates from the admoni- tion of the Supreme Court in 11. Porier (Co. . L. R. B.. 397 U.S. 99 (1970), to the effect that the existing statutory scheme prohibits official compulsion at the hands of the Board or courts over the actual terms of a collectile-bar- gaining contract. 3. The withdrawal of recognition inside unit As noted above, I also find that Respondent violated Sec- tion 8(a)(5) of the Act by withdrawing recognition of the Union as the exclusive bargaining representative of the in- side employees. In so finding I reject Respondent's conten- tion that in withdrawing recognition it entertained a rea- sonably based good-faith doubt that the Ulnion commanded majority status in the unit. I also reject Respondent's asser- tion that it acted properly in refusing on October 31 to treat the Union as representative of the outside employees be- cause the Union had, in fact, lost its numerical majority. At that outset, the legal principles controlling the instant matter are not in dispute, and they are well summarized in the Board's decision in Burns Initrnational Security Ser- wices, Inc., 225 NLRB 271 1967). cited by Respondent in its brief. In Burns. the Board stated (at 272): ·.. the existence of a prior contract is sufficient to raise a dual presumption of majority. first that the union had a majority status when the contract wvas executed. and second that the majorit continued at least through the life of the contrac. These presumptions may be rebutted, however, bh evidence establishing that the unitn no longer en joys majority representative status. Also, even without such a showing of loss oft majority. an emploer may refuse to hbrgain iif he re- lies on a reasonably based doubt s to the continued milajority status of the union. As to a reasonahl, based doubt. two prerequisites for sustaining that delense are that the asserted doubt must be hased on o hjectice considerations and such doubt imust he raiecd in a con- text ree of' unfair labor practices. Respondent does not challenge the presumnptlion o maljorit, representative status residing with the It'ion at times perti- netl arising by virtue of the sulccesx\ e collectixe-hargaining agreements hetween the parties. But moving hbeynd this it appears clear that upon an application of the authoritativ e rationale articulated in Blurn. Respondent mayl not here invoke the good-faith doubt delense. This is so in a thresh- old sense because the defense is aldvanced in the flace oft' closel related unfair labor practices arising rom Respon- dent's failure prior to October 27 to bargain in good 'lith ith the [Inion concerning contractuall terms lor the very unit in which Respondent a\ers an eroson of union support occurred. See Pioneer Inn .ln('lest. d/'1hla Pite,,ccr n1,,1 lld Pioneer Innl Casino, 228 Nl RB 1263. 1264. 1265 ( 1977): cf. lT/i Broadca.sting, 1WD1)4F 71' , -1I1 ' if. 201 N RB 801 (1973). In this vein it is clear from the record that the ini- pact of the failure of Respondent to fulfill its statutors bar- gaining obligation on and after .August 4. as found, was direct and not incidental. for it caused the Lnion to resort to strike action and to thus confront unit eiployees. all of whom were longstanding members of the nion. with the unwelconmed choice of supporting the strike and losing \wage income or of crossing the picket line and facing the potential jeopardy of a union-imposed tine. IThe strike called by the nion on October 27 was called in further- ance of' the nion's bargaininig objectives which had been frustrated hby Respondent's unlawful bargaining tactics. and the strike caused unit employees to proffer their resigna- tions from the U!nion as a means of preserx ing a continuity of income which otherwise would have been sacrificed through observance oft' the picket line." The record clearly establishes that avoidance of' potential tines was the moti- vating reason for the resignations. and it is singularly note- worthy that in their discussions among themselves or with management the employees never expressed their motiva- tion for resigning in terms of a desire to oust the Union as their bargaining representative. ' Thus the unbroken causal relationship between Respondent's unlawful refusal to bar- gain and the purported loss of mninher.ship) among unit em- ploy ees is clearly established and warrants application of the sound equitable principle that a person may not he per- mitted to benefit from his own wrongdoinig. The conse- quence of' this cause-and-effect relationship is to foreclose Respondent from relying upon the resignations profttered hb four of the six unit employees during the interlude between Respondent's October 26 refusal to bargain and its subse- quent withdrawal tif recognition on October 31. But in any eent. Respondent's reliance upon a pur- ported loss of' numerical majority or the emergence of a ' k lheih r in uni ir lhbor pcitqc st'rlkc or I ril ,I ¢eLonl.l llf itiOl lsigilcd II orc Rc1pllndcnl hir n.odil. is bi h.lrgllll ng qri ratc 1 . Ihe strt ke ;.1 ,I dlrctl eIouI grotlh o)t Rspllden I t.lili, r it . h. rg;lin in gt,.d Imith ' ('.ire ttl scrulin oI the redited stimons OI o lpid (O I112/ periIl no it heir i 'lllll.] ln 537 I)3(llISIONS 01F NATIONAI ILABOR R.AFIONS BOARI reasonably based good-faith doubt as to the Union's contin- ued majority as of October 31 is specious when applied to the facts at bar. "Majority representation status." used in the context of Respondent's withdrawal of recognition, is not to he expressed in terms of formal membership in a labor organization hut means that a majority of employees in the unit wish to have the Union as their representative for collective-bargaining purposes. Celanese (orporatiol o America. 95 NLRB 664. 671 672: Pioneer Inn Associates. supra at footnote 3. For the purposes of this Decision it may be assumed that certain of the unit employees effectively resigned their membership in the Union prior to October 31. However, I find that they did not accompany their res- ignations with either declarations or actions of a type which the Board has treated as inconsistent with a desire for con- tinued representation by an incumbent bargaining agent. Initially I conclude and find that Respondent was not justi- fied in withdrawing recognition from the Union by reason of the knowledge coming into the possession of manage- ment prior to October 31 of (I) criticism leveled by unit employees against union indifference in reporting bargain- ing developments. or (2) the failure of the Union to main- tain contact with unit members, to candidly answer ques- tions put to them concerning bargaining matters, or to address the consequences of working behind the picket line. See, e.g.. Retired Persons Pharmlacv, 210 NLRB 443 (1974). enfd. 519 F.2d 486, 490 (2d Cir. 1975): GulfJ Machinenry Company, 175 NLRB 410, 413 (1969). Contrary to Respon- dent, this complaining did not signal dissatisfaction so fun- damental as to reasonably indicate a desire on the part of the employees to be rid of the Union. Retired Persons Phar- ma, s.upra; Davis & Hemphill. In<., 177 NLRB 282. 285 286 (1969). But beyond this the majority representative sta- tus of an incumbent bargaining representative may not be predicated upon a presumption that employees who join the strike at the outset but later abandon it have indicated their lack of support for the Union as their collective-bar- gaining representative. See Frick C(ompany, 175 NLRB 233 (1969): Coca Cola Bottling Works, Inc.. 186 NLRB 1050. 1053 (1970). Moreover, membership resignations submitted as here, by employees in order to avoid the foreseeable or likely impact of a union-imposed fine for crossing an estab- lished picket line may not be equated to a renunciation of a union's representative capacity or status. See Randel-East- ern Amhulance Service. 230 NLRB 542. 552 (1977). Cf: Beck Engraving (o., Inc., 213 NLRB 53 (1974): S & M Mufl/ilc- turing Company, 172 NLRB 1008 (1968). In sum, for the reasons stated, I reject Respondent's good-faith doubt contention. IV. tiil IFF1('I OF ift UNFAIR AB)R PRA('II('IS tI'P()N ('()MMI R('E The activities of Respondent set forth in section III. above, occurring in connection with the operations of Re- spondent described in section I, 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 of commerce. V. IIi- RKMII)Y lIaving found that Respondent has engaged in certain unfair labor practices. I shall recommend that it cease and desist therefrom and take certain affirmative action de- signed to effectuate the policies of the Act. Hlaving found that Respondent unilateralIl and unlaw- fully implemented collective-bargaining proposals covering its outside employees prior to September 8. 1977. thereby failing to comply fully with the provisions of' Section 8(d)(3) and (4) of the Act and thereby violating Section 8a)(5) of' the Act. I shall order Respondent to make whole its outside employees for any loss they may have suftered as a result of its unilateral implementation of its contract proposals for outside employees prior to September 8. 1977. Ilasing further found that Respondent has unla.fully withdrawn recognition from the Union and has failed and refused. upon demand, to bargain collectively with the Union as required by Section 8(d) of the Act. I shall order Respondent. upon request. to bargain with the Union as exclusive representative of the employees in the inside unit hereinafter found appropriate. (CO)N(CItUSIONS O1 l\ I. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The following units are separately appropriate for the purposes of collective bargaining: All outside cabinet installers employed by Respondent at construction jobsites located in counties of os An- geles, Inyo. Mono. Orange Riverside. San Bernardino. Imperial. Ventura Santa Barbara, San L.uis Obispo. and Kern. (California. All inside cabinet f;lbricaltors employed by Respondent at its plant in Anaheim. ('alifornia. 4. At all times material herein the Union has been the exclusive collective-bargaining representative of the em- ployees in the inside unit and was recognized as the exclu- sive collective-bargaining representative of employees in the outside unit until June 15, 1977. 5. By unilaterally implementing its bargaining proposals for employees employed in the outside unit prior to Sep- tember 8, 1977. on which date Respondent would have achieved full compliance with the notice requirements of Section 8(d)(3) and (4) of the Act. Respondent engaged in unfair labor practices in violation of Section 8(a)(5) and (1) of the Act. 6. By failing and refusing on and after August 4. 1977, to bargain in good faith with the Union as the exclusive col- lective-bargaining representative of employees in the inside unit and by unilaterally withdrawing recognition from the L nion as the exclusive collective-bargaining representative of said employees on October 31. Respondent refused to bargain in good faith concerning wages. hours, and employ- ment. and other terms and conditions of employment within the meaning of Section 8(d) of the Act in violation of Section (a)(5) and I ) of the Act. 538 MIAR-I.EN (ABIN. IS. IN(C. 7. The aforesaid unfair labor practices are un1tair labor practices afftlecting commerce witlhin the meaning of Section 2(6) and (7) of the Act. I!pon the fbregoing findings of fact. conclusions of laa. upon the entire record, and pursu;ant to Section 10(c) of the Act I hereb issue the following recommnended: ()RD)LR The Respondent. Mar-len ahinels. Inc.. Anaheim. California. its officers. agents. successors, and assigns, shall: (I) Cease and desist from: (a) Refusing to bargain collectivelb with the Union. upon request, as the exclusive representative of' emplo ees in the following appropriate bargaining unit: All inside cabhinet fabricators emploed h Respondent at its plant in Anaheim. (California. (b) Withdrawing recognition from the I nion as the ex- clusive representative of employees in the above-described appropriate bargaining unit. (c) Refusing to bargain collectively with the Utnion hb unilaterally implementing and giving effect to collecti\,e- bargaining proposals covering wages. hours. and terms and conditions of employment of emplo ees in the outside unit without full! complying with the requirements of Section 8(d)(3) and (4) of the Act at a time when the Union reta;ined the right to be recognized as the exclusive collective-bar- gaining representative of the utside employees. (d) In any like or related manner interfering with. re- " In the event no exceptions are filed as provided h Sec. 10246 of the Rules and Regulations of the Na ional I hbor Relations Board, the findings, conclusions, and recommended Order herein shall., as prov ided in Sec 102.48 of the Rules and Regulations. be adopted bs the Board and become its findings, conclusions, and Order, and all objections thereto shall he deemed waived tfor all purposes. straining, or coercing emplo.ees in the exercise of rights guaranieed under Section 7 of the Act. 2. Take the following affirmative aclion which is deered necessar\ to efectuate the policies of the Acl: (a) pon request. bargain colletivel, k itl ()range (Count \ District (ouncil of' (arpenters l nited l3rotlher- hood of('arpenters and Joiners of America. A I I. ('1() i.e., the entit herein called the Itnion, as the exclusi e repre- sentative of ill emploees in the inside unit. described abo, e. with regard to rates of pa. hurs f emplo IImenlt and other terms and conditions of' empl,i meilt a;nd. i all understanding is reached, embody such underst;andinig in a sigled agreement. (b) Make whole all outside employees lor an' loss of wages or benefits incurred b them as a result of Respon- dent's unilateral implementation of its bargaining proposals covering outside emploees prior to September 8. 1977. (c) I ost at its Anaheim (California. shop or facilit cop- ies of the attached notice marked "Appeindix B. " ' ( opies of said notice, on fornms provided b the Regional I)irector lor Region 21. after being duly signed b,, Respondent's a- thorized representative. shall be posted bh Respondenlt inm- mediately upon receipt thereof, and be maintained b it tor 60 consecutive days thereafter. in conspicuous places. in- cluding all places where notices to employees are customar- ily posted. Reasonable steps shall be taken b Respondent to insure that said notices are not altered. defalced, or cov- ered by anv other material. (d) Notlis the Regional D)irector for Region 21, iT writ- ing. within 20 days fromi the date of this Order, what steps Respondent has taken to comply herewith. " In the eent that this Order is enforced h a Judgmnent a I niled States ('ourt 'f Appeals. the words n the notice reading "Posted bh Order of the Natrlnnal I.lhabr Relations HBoard" shall read "Posted Pursuant t a Judg- ment of the nited States ('ourt ol Appeals Enforcing an Order of the Na- tional l.ahor Relalions Board" 539