Ketchikan Pulp Co.

KETCIIIKAN PULP COMPANY 279 All production and maintenance employees including laborers, mes- sengers, weighers, dryer operators, and warehouse operators, but excluding all office and clerical employees, rice graders, guards, watch- men, professional employees, extra or seasonal employees, and super- visors as defined in the Act. [Text of Direction of Election omitted from publication.] MEMBER RODIIERS took no part in the consideration of the above Decision and Direction of Election. Ketchikan Pulp Company and International Brotherhood of Elec- trical Workers, Local Union No. 1548, AFL-CIO 1 and Interna- tional Association of Machinists, Local Lodge No. 1375, AFL- CIO 2 and International Union of Operating Engineers, Local -No. 302, AFL-CIO 3 and Construction and General Laborers, Local 1331, International Hod Carriers, Building and Common Laborers Union of America, AFL-CIO,4 Petitioners. Cases Nos. 19-RC-1639, 19-RC-1656, 19-RC-1657, and 1.9-RC 1667. Tan- uary 31,1956 DECISION AND DIRECTION OF ELECTIONS 5 . Upon separate petitions duly filed under Section 9 (c) of the Na- tional Labor Relations Act, a consolidated hearing was held before Gilbert Nowell, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed.' Upon the entire record in these cases, the Board finds : 1. The -Employer is engaged in commerce within the meaning of the Act. 1 Herein called the IBEW. s Herein called the IAM. a Herein called the Operating Engineers. A Herein called the Laborers. 3 The Employer's request for oral argument is hereby denied , as the record and briefs fully present the issues and the positions of the parties. 9 The hearing officer did not rule on the admissibility of the following matters offered Into evidence by the parties : ( 1) A pamphlet relating to the financial structure of the Puget Sound Pulp and Timber Company, offered to establish the financial relationship be- tween the Employer herein and that company ; ( 2) letters relative to the recognition by the Employer of the current bargaining agent approximately 1 year ago , offered to estab- lish that the Employer employed a full complement of employees at that time; (3) a leaflet used by the IBEW during the organizational campaigns, offered to establish that the IBEW favors the industrial form of organization ; and (4 ) a pamphlet entitled CoI- -lective Bargaining in the Pacific Coast Pulp and Paper Industry , published in 1948, offered to show the pattern of bargaining in the paper and pulp industry on the west coast. We rule on these matters as follows : Matters (1), (2), and (3) are rejected as irrel- evant to the issues of this proceeding ; matter (4) is admitted into evidence. 115 NLRB No. 51. 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. The labor organizations involved claim to represent employees of the Employer.7 3. The Employer and the Pulp and Sulphite Workers assert that their current bargaining contract is a bar to the petitions filed herein. Section 28 of the contract in question provides in pertinent part: This Agreement shall be in effect from June 1, 1954, up to and including May 31, 1959, except as hereinafter provided : (b) This Agreement may be modified as to any provisions except the termination provisions in this SECTION 28 as fol- lows : Either party desiring any such modification shall mail to the other party notice in writing by registered mail sixty (60) days prior to June 1, 1955, or prior to any subsequent June 1st on which this contract is in effect, that a modification is de- sired... . (c) If notice of desire for modification has been given, the parties shall, as soon as agreeable to the parties following such notice, meet for collective bargaining. . . . Any agreement on modification arrived at in such negotiations and approved by a majority of the membership of the Signatory Union who vote in the referendum which shall be conducted for the purpose, shall be binding upon the parties to this Agreement... . (d) In case negotiations conducted in accordance with (c) break down, either party may terminate this Agreement upon the 'expiration of ten days' notice in writing, mailed by registered mail, to the other party. Pursuant to section 28, the Pulp and Sulphite Workers notified the Employer of its desire to modify the contract on February 28, 1955. The petitions herein were filed on March 11, 1955; April 19, 1955; and May 6, 1955 (the date of the hearing). We hold that the contract is not a bar for the reasons stated in General Electric Company, 108 NLRB 1290.' Here, as in that case, the modification clause is unlimited in scope, in that either party`' may require negotiations with respect to any or all of the contract. Failing agreement with respect to the modification, either party may then terminate the agreement. As was said in the General Electric case : "Under this provision, once notice is given nothing remains of the entire contract but the meaningless terminal date, which is itself 4 International Brotherhood of Pulp, Sulphite and Paper Will Workers, Ward Cove Local 738, AFL-CIO, herein called the Pulp and Sulphite Workers, was permitted to inter- vene on the basis of its contractual interest. International Woodworkers of America, AFL-CIO, herein called the IWA, was permitted to intervene on the basis of its showing of interest 8 Board Member Rodgers agrees with Members Murdock and Peterson that the General Electric case is inconsistent with Rohm & Haas, 108 NLRB 1285. For the reasons indi- cated in his dissent in Rohm & Haas, Board Member Rodgers would overrule that case. KETCHIKAN PULP COMPANY 281 subject to extinction. Viewed realistically, this contractual provision insures no greater stability than does the usual automatic-renewal clause. . . ." It is true, as the Employer argues, that the contract in the General Electric case is distinguishable in that there only the employer could terminate the contract if, as a result of the failure of the parties to agree, the union first engaged in strike action. However, this distinc- tion has no real significance from the viewpoint of stability in labor relations. For, not only does the absence of the strike prerequisite make the termination of this contract easier for the Employer to ac- complish, but termination is made available to the Pulp and Sulphite Workers as well. Accordingly, as the petitions herein were timely filed with respect to the modification clause and the notice given thereunder, we find the contract is not a bar to this proceeding,' and that questions affecting commerce exist concerning the representation of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. 4. The Pulp and Sulphite Workers are currently recognized as the bargaining representative of all the production and maintenance em- ployees of the Employer. The IBEW seeks to sever and represent in a separate unit electrical preventive maintenance employees and maintenance electricians. The IAM seeks to sever and represent in a single unit machinists, mill- wrights, auto mechanics, and welders attached to the machine shop. The Operating Engineers seeks to sever and represent a separate unit of powerplant employees. The Laborers and IWA each seeks a unit of production and maintenance employees excluding the employees pe- titioned for by the IBEW, the IAM, and the Operating Engineers. In the alternative, the Laborers seeks an overall unit of production and maintenance employees. The Employer and the Pulp and Sulphite Workers contend that only the existing plantwide production and maintenance unit is ap- propriate. They argue, in substance, that severance of craft units is precluded, because of the integrated nature of the Employer's opera- tions, and because a substantial segment of the Pacific Coast pulp and paper industry, of which it is said the Employer is a part, is organ- ized on an industrial basis. We reject these contentions, as it is the Board's policy to permit the severance of craft and departmental units, except in specified industries, not including the pulp and paper industry." 9In view of our holding that the contract is not a bar , there is no need to pass upon the question , raised by the Employer, of whether the contract may operate as a bar for 2 or 5 years. w See American Potash .4 Chemical Corporation, 107 NLRB 1418 ; and Southeo n Paper- board Corporation, 112 NLRB 302. 282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Unit Sought by the IBEW The Employer employs 16 electricians. Nine of the electricians work in the general plant on the day shift, 4 work on revolving shifts in the general plant, and 3 are assigned by the chief electrician to shift work in the woodroom. On the day shift electricians are supervised by the chief electrician or the assistant chief electrician. On the night shifts electricians are under the supervision of a shift foreman who, at that time is the general supervisor over the entire plant; the elec- tricians assigned to the woodroom are under the supervision of a woodroom foreman. The shift foreman and the woodroom foreman,., however, do not concern themselves with the technical aspects of elec- trical work. All the electricians except those assigned to the wood- room report to, and work out of, the electrical shop, which is located in the maintenance building. The Employer's electricians are classified as "A," "B," "C," or "D,"' electricians. An "A" electrician, according to the contract between the Employer and the Pulp and Sulphite Workers, "is a man who could qualify as a journeyman workman in his trade." "A" electricians are either hired from the outside on the basis of previous experience or are trained by the Employer. In general, the Employer recruits men who possess the necessary mechanical aptitude for job openings in the electrical department from within the plant, and as these men ac- quire experience under the Employer's training program, they advance within a separate promotion ladder from "D" to "A" electrician. This process usually requires about 4 years. , The electricians are responsible for the installation, maintenance, and preventative main- tenance of electrical equipment at the Employer's plant. They per- form only duties associated with the electrical craft. On the basis of the,foregoing, it is clear that the electricians com- prise a separate, distinct homogeneous group of craftsmen. Accord- ingly, the electricians may if they so desire be represented as a sepa- rate craft group by the IBEW, which has traditionally represented such groups.1' Unit Sought by the IAM The machinists and the welders attached to the machine shop are supervised by a machine shop foreman. The Employer employs 7 machinists. Like the electricians described above, the machinists are hired either because of their previous experience or are recruited from within the plant and trained by the Employer. They advance within a separate promotion ladder from "D" to "A" machinist. An "A" machinist also "is a man who could qualify as a journeyman workman in his trade." Machinists perform the greater part of their work in 11 Southern Paperboard Corporation, supra. KETCHIKAN PULP COMPANY 283 the machine shop located in the maintenance building.' They repair' and rebuild mechanical equipment. They work to close tolerances and operate machine drills, milling machines, shapers, planers, and other machine tools usually associated with the machinist craft. The Employer employs 24 millwrights. They are supervised by a lead millwright. Like the electricians, the millwrights are either hired because of their previous experience or are recruited from within the plant and trained by the Employer. They too advance within a separate promotion ladder from "D" to "A" millwright. An "A" millwright is also a man who "could qualify as a journeyman." The millwrights are responsible for installing, lining up, and overhauling production equipment. The welders the IAM seeks work in the machine shop and are super- vised by the machine shop foreman. They do welding not only for the machinists but also for electricians and other employees. The auto mechanics are supervised by the machine shop foreman. These employees do automobile repairs of the usual nature, such as installing bearings on axles and crank shafts, connecting rods and wheels, and changing spark plugs. They do similar repairs on a large crane, a towboat, lift trucks, and bulldozers. On the basis of the foregoing we find that the machinists and the millwrights are craftsmen, and that together they may be represented as a separate craft unit by the IAM, which has traditionally repre- sented such groups." As it appears that the welders the IAM is seeking are not assigned to work regularly with the machinists and millwrights, we shall not include them in the voting group." Nor shall we include the auto mechanics, as it does not appear that they are craftsmen.14 Unit Sought by the Operating Engineers The powerplant employees sought by the Operating Engineers work in a building called the power and recovery house. In addition to the powerplant, this building houses an acid plant. The acid and powerplants are separated by a wall, but utilize a common control room. The powerplant employees tend boilers, turbines, evaporators, and other powerplant equipment. They produce and maintain a supply of steam and power for the plant's operations. In addition they "re- cover" materials which are used as fuel for the power unit and are re- used in the production process. Some of the powerplant employees were hired because of their previous powerplant experience; others were transferred from within the plant and trained by the Employer. v Campbell Soup Company, 109 NLRB 475, at 476. u Clayton & Lambert Manufacturtng Company, Ordnance Division, 111 NLRB 540. u Armour and Company, 110 NLRB 587, at 589. 284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On the day shift, the powerplant. employees are separately supervised; on other shifts a powerplant shift foreman also supervises the em- ployees in the acid plant. Except for cleanup men, hog fuel tenders; and barkpress operators, the powerplant employees advance within a separate promotion ladder. It appears that the powerplant employees constitute a distinct group of employees of the sort to which the Board customarily grants the privilege of severing, if they wish, from an existing overall unit, and that they are sought by a union which traditionally represents such employees. Contrary to the contentions of the Employer and the Pulp and Sulphite Workers, we do not deem this privilege to be affected by the fact that the powerplant employees recover materials which are, in part, reused in the production process.15 Accordingly, we shall direct that elections be conducted in the fol- lowing voting groups of employees at the Employer's Ketchikan, Alaska, plant : A. All electrical preventative maintenance employees and mainte- nance electricians, excluding supervisors as defined in the Act. B. All machinists and millwrights, excluding welders , auto me- chanics, and supervisors as defined in the Act. C. All powerplant employees, excluding supervisors as defined in the Act. D. All production and maintenance employees, including welders and auto mechanics, but excluding employees in groups A, B, and C, office clerical employees, guards, professional employees, and super- visors as defined in the Act. If a majority of employees in voting groups (A), (B), or (C) select a union seeking to represent them separately, those employees will be taken to have indicated their desire to constitute a separate bargain- ing unit and the Regional Director conducting the election is in- structed to issue a certification of representatives to the labor organ- ization selected by the employees in each group for such unit, which the Board in such circumstances, finds to be appropriate for purposes of collective bargaining. On the other hand, if a majority of the em- ployees in any of voting group (A), (B), or (C) do not vote for a union which is seeking to represent them in a separate unit, that group will appropriately be included in the production and maintenance unit and their votes shall be pooled with those in voting group (D) ,16 and the Regional Director conducting the election is instructed to issue a cer- 76 See Rayonier, Inc., 110 NLRB 1191, at 1192-1193 19 If the votes are pooled , they are to be tallied in the following manner : The votes for the union seeking the separate unit shall be counted as valid votes , but neither for nor against any union seeking to represent the more comprehensive unit ; all other votes are to be accorded their face value, whether for representation in a union seeking the com- prehensive group or for no union. American Potash & Chemical Corporation, 107 NLRB 1418, at 1427. KETCHIKAN PULP COMPANY 285 tification of representatives to the labor organization selected by a majority of employees in the pooled group, which the Board, in such circumstances, finds to be a unit appropriate for the purposes of col- lective bargaining. [Text of Direction of Elections omitted from publication.] MEMBER BEAN, concurring : In agreeing to direct an election in this case, I have fully considered but finally found without merit the basic argument made by the In- tervenor and my dissenting colleagues. They strongly urge that be- cause this contract becomes terminable at will after modification notice is given, the Board must hold that even then it assures sufficient sta- bility in labor relations to fall within the contract-bar rule enunciated in the Rohm & Haas 11 decision. This argument places words above the realities of industrial life; the aptness of a descriptive phrase can hardly substitute for a clear indication of the intention of parties to a contract. Unlike the situation here, Rohm & Haas presented the parties' final agreement instead of a purely temporary, or stopgap contract intended as only a provisional arrangement. There was nothing in that case to indicate any intention other than to let the fully executed and compre- hensive contract stand for a reasonable length of time. What did not appear affirmatively, either on the face of the contract or in the sur- rounding circumstances, was the precise extent of the period during which the parties intended that particular agreement should continue to exist. The rule of Rohm & Haas was born of the Board's earlier holding with respect to contracts of indefinite duration, which provide neither a fixed term nor a method for termination. It was there de- cided that when the bargaining parties complete their negotiations and execute an initial full and final agreement, but fail to establish a fixed duration period, the Board would read into their agreement a necessary intention to abide by the contract for a reasonable period of time, gen- erally held to be 2 years.18 As there is no substantial difference between contracts of indefinite duration and those terminable at will, this same construction was placed upon the latter type of agreement in Rohm & Haas. In each instance, however, the Board was dealing with new and fully negoti- ated contracts which set out the complete and final settlement on all issues. And in neither of those situations did it appear that the con- tracting parties did not intend to live up to their signed settlement for any period other than a reasonable time. 17 108 NLRB 1285. 18 Filtrol Corporation, 74 NLRB 1307, at 1309. 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Quite to the contrary, there is no equivocation here as to the inten- tion of the Employer and the Intervenor. If the contract modification notice of February 28, 1955, meant anything, it announced clearly that the Intervenor did not intend to be bound by the agreement, but rather aimed then and there to undertake complete renegotiation of the sub- stantive terms agreed upon a year earlier. In turn, the express lan- guage of the contract made this same notice serve as the Employer's release from any further term obligation. There is no occasion, there- fore, and indeed there would be no warrant for the Board to speculate as to the parties' reasonable intent, or to read into what remained of their contract any intent at variance with that expressed by the parties. More analogous to the situation at hand are those contracts which provide that at the end of a fixed period negotiations for changes shall take place, and that pending agreement on new conditions of employment, the earlier agreement shall continue in effect. Such a contract, whether called of indefinite duration or terminable at will, has never been accorded contract-bar validity for the very reason that the parties intend it to serve only as an interim or shortlived agree- ment.19 In any event, the Board made it clear after issuance of its Rohm & Haas decision, that it did not thereby intend to hold that any con- tract which may be described as terminable at will, will serve to bar an election for a fixed period of time. In Bridgeport Brass Company, the contract parties executed a comprehensive agreement which by its terms was to remain in effect until a later one should be negotiated. It was intended that the agreement would be replaced by another when the complement of employees had become larger. The Board refused to apply the principle of Bohm d Haas and stated : "Despite certain broad language in that [Bohm d Haas] decision, it is clear that the Board did not intend to, and did not, overrule . . . that line of cases . . . in which the Board had refused to recognize a temporary contract of indefinite duration as a bar to a representation proceed- ing." 20 [Emphasis supplied.] There can be no question but that, after modification notice was given, pursuant to the contract now before us, all that was left was a stopgap or purely temporary modus vivendi arrangement. I cannot say that in such circumstances there exists that stability in labor relations which is the sole and funda- mental justification for the entire contract-bar doctrine. MEMBER PETERSON, dissenting: I do not agree with my colleagues that elections should be directed herein. The majority holds that the existing contract between the Employer and the Pulp and Sulphite Workers is not a bar, relying is Worthy Paper Company Association, 80 NLRB 19, 21; Union Bag & Paper Corpora- tion, 110 NLRB 1631, at 1634, and Westinghouse Electric Corporation, 111 NLRB 497. 20 Bridgeport Brass Company, 110 NLRB 997 , at 998, footnote 5. KETCHIKAN PULP COMPANY 287 on the General Electric case al Because the contract permits yearly modification of any or all provisions of the contract and, failing agree- ment, allows either party to terminate the contract on 10 days' notice, my colleagues hold that the contract does not insure the degree of in- dustrial stability necessary to operate as a bar to the rival union pe- titions. I do not wish to imply that I consider the position taken here- in by Chairman Leedom and Member Rodgers to be in in any manner inconsistent with that espoused in the General Electric case. On the contrary, my difference is essentially with the views expressed in the latter case and those following it which I believe are now demonstrably lacking in merit. Because my disagreement with my colleagues is a fundamental one, I feel it necessary to advert to the origin and his- tory of certain aspects of the Board's contract-bar rule. The declared statutory policy is to encourage the practice and procedure of collective bargaining between an employer and the majority representative of his employees and also to protect the right of the employees to select and change their representative.22 The ultimate effectuation of the first objective lies in the execution of a collective-bargaining contract which fixes the employer-employee relationship by resolving ques- tions as to the wages, hours, and working conditions of the employees. With respect to the second objective, its ultimate effectuation lies in the holding of a Board election which enables the employees to ex- press their wishes concerning their bargaining representative. How- ever, these two objectives, both of which the Act is intended to foster and protect, must be balanced and harmonized whenever the Board is asked to hold a representation election among a group of employees who are covered by an existing collective-bargaining contract. The Board must then decide between industrial stability, which is inherent in the existing contract, and the employees' right to change their bar- gaining representative, which is made effective by a Board election. To aid in the solution of this seeming conflict between statutory ends, the Board evolved what is known as the contract-bar rule. In the very early days of the Wagner Act, the Board held that em- ployees could change bargaining representatives at any time-even in the face of an- existing contract.23 This position was soon aban- doned and the rule that a representation election would not be con- ducted during the lifetime of a valid contract was enunciated.24 Of course, the rule has since been amplified and qualified. However, I submit that the Board has been following, with the exception of .the General Electric line of cases, a definite pattern in the development of the rule which is in harmony with, and responsive to, the dynamic 21 General Electric Company, 108 NLRB 1290. 82 Section 1 of the Act. See also Sections 7, 8 (a) (5 ), and 8 (b) (3). = New England Transportation Company, 1 NLRB 130 24 National Sugar Refining Company of New Jersey, 10 NLRB 1410. 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD character of labor relations. The trend has been clearly in the direc- tion of encouraging and promoting industrial peace and stability rather than permitting employees to change their representative too readily. It is amply illustrated by Board decisions dealing with the duration of contracts, and the effect of their modification, or extension. Contract duration: In the late 1930's, the Board held that a 1-year contract would bar a determination of representatives'25 but that no contract which had been in effect for more than 1 year could foreclose an election." However, in the early 1940's this position was modified and a 2-year contract was held a bar when it was shown that the longer term was customary in the industry 27 Thereafter, beginning in 1945, a 2-year contract was presumed to be reasonable and was held to pre-, clude an election unless the petitioning union demonstrated that such agreements were not customary in the industry.28 Then, in 1947 the Board held that a 2-year contract was reasonable per se and would operate as a bar to an election, even in the face of a contrary custom in the industry.29 In so holding, the Board pointed out that during the early years of the Act when collective bargaining was in its ex- perimental and transitional period, it was especially necessary to place emphasis upon the right of workers to select and change their repre- sentatives, but that the time had come when stability of industrial relations could better be served, without unreasonably restricting em- ployees in their right to change representatives, by refusing to inter- fere with bargaining relations secured by collective agreements of 2 years' duration. A few months after this decision, the Board stated that the same reasons of industrial stability impelled the conclusion that contracts of indefinite duration or those of unusually long terms should during their initial 2-year period be a bar to a representation proceeding.3° Finally, in June 1954, in the Bohm & Haas case,31 the Board held that a contract terminable at will by either party would henceforth bar an election for a 2-year period. In this decision the Board stated that the end objective of the basic policy to achieve stability in labor" relations necessarily was the collective-bargaining agreement which results from negotiations between employer and bargaining agent; 25 See footnote 19. supra 2 See Columbia Broadcasting System, 8 NLRB 508. - 27 See for example Owens-Illinois Pacific Coast Company, 36 NLRB 990. 29 See for example, Uxbridge Worsted Company, Inc., 60 NLRB 1395. 29 Reed Roller Brat Company. 72 NLRB 927. It was also indicated that evidence of custom would still be regarded as germane where the contract was for more than 2 years. And, in 1953 the Board held a bar to an election collective-bargaining agreements up to a term of 5 years , if a substantial part of the industry concerned was covered by contracts having a similar term. See General Motors Corporation, Detroit Transmission Division, 102 NLRB 115. sa Puritan Ice Company, 74 NLRB 1311 ; see also, Benson Hosiery Mills, Inc.. 84 NLRB 654. 31 Rohm & Haas Company, 108 NLRB 1285. KETCHIKAN PULP COMPANY 289 and, that therefore, a contract-bar rule which, absent other compelling considerations, negates an agreement reached pursuant to a good-faith collective bargaining was not consonant with the purposes of the Act. Extension or modification of contracts: In 1942, the Board an- nounced the premature extension doctrine which provided that when parties to an existing contract entered into an agreement extending its term or executed a new contract for a longer period than the term of the existing contract, neither the new nor the existing contract would bar a petition thereafter filed .12 In 1946, application of the doctrine was qualified by the Board's holding that the petition would prevent operation "of the contract as a bar only if it was filed at any time before the automatic renewal date of the existing contract or before its expiration date, if it did not provide for automatic re- newal.33 Then, in June 1949 in the Republic Steel case 34 the Board pointed out that going so far as to hold a prematurely extended con- tract immediately nugatory tended to upset the industrial stability brought about by established bargaining relationships because this frequently resulted in reasonable collective-bargaining arrangements being disturbed in the middle of their original contract period. Ac- cordingly, the Board stated that the premature extension of a contract would no longer in itself render the extended agreement ineffectual as a bar during the period that the original contract would have remained in effect had it not been so extended. In the early 1940's, as a corollary to the original premature exten- sion doctrine with respect to the extension of the terminal provision of an existing contract, it was the Board's practice to hold with regard to the substantive provisions that the contract was inoperative as a bar if the parties (1) undertook modification of any of those provi- sions in the absence of a reopening clause '15 or (2) negotiated or modified substantive provisions beyond the scope of a reopening clause in the contract,38 or (3) negotiated substantive provisions which, al- though within the compass of a reopening clause, undertook virtually to rewrite the contract. 37 Soon thereafter, the Board liberalized its practice to. some extent when it decided that if the parties had a broad modification clause in their contract they could make extensive changes in the substantive provisions during its term without rendering the contract vulnerable to a rival union petition. 38 Once again the Board 32 Wichita Union Stockyards Company, 40 . NLRB 369,; Memphis Furniture Company, 51 NLRB 1447. e? rorthwestern Publishing Company, 71 NLRB 167 ; Greenville Finishing Company,. Inc., 71 NLRB 430. 84 Republic Steel Corporation, 84 NLRB 483. 85 See for example, Chapman Valve Manufacturing Company, 40 NLRB 800. 31 See for example, Olin Industries, Inc., 67 NLRB 1043. 87 See for example, Duquesne Light Company, 71 NLRB 337. 89 S ct W Fine Foods, Inc., 74 NLRB 1316. 390609-56--vol. 115-20 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD -gave as its reason for the change the necessity for encouraging stability in bargaining relationships. In 1951, in the Western Electric case,39 the Board recognized that :there was a direct relationship between its premature extension doc- trine as revised by Republic Steel and its past practice with respect to the effect of mid-term modification of the substantive provisions of -contracts. The Board stated that in performing the continuing func- tion of effectuating the purposes of the Act, it was necessary to adjust ,the contract-bar rule by applying the principle enunciated in Republic ,Steel with respect to the terminal date of a contract to cases where the :parties voluntarily undertake modification of any of the substantive :provisions of their collective-bargaining agreement during its term. Accordingly, the Board ,held that whether or not the contract con- -tained a modification clause, and regardless of the scope of the clause, if provided for in the contract, the parties might renegotiate or modify ..any of the substantive provisions of the contract during its term, if ,done by mutual assent, without opening up the contract to an otherwise prematurely filed petition 40 The Board there pointed out that sta- bility would be achieved in relatively large measure, at a minimum .sacrifice of the sometimes conflicting statutory policy of protecting -employees' freedom to change their representatives; that as time had -gone on, employees had become increasingly familiar with their col- -lective-bargaining rights under the Act and had acquired a better knowledge of the unions available and chosen to represent them; and that this being so, an apposite modification of the contract-bar rule to ..encourage continuity would not operate seriously to prejudice any party concerned. In the midst of these salutary and progressive changes in the Board's contract-bar rule with regard to the duration, extension, or -modification of contracts, the Board announced its decision in the General Electric case .41 It is my carefully considered opinion that - this case and those which followed it, 42 including the instant one, represent a retrogressive step and should be reversed. In essence, the General Electric type case involves a contract for a --fixed term (5 years in the instant case) which contains a clause permit- ting modification at stated intervals of any substantive provision and making the contract in effect terminable at will if the parties fail in- -their negotiations to reach agreement. It is said that a contract with ae Western Electric Company , 94 NLRB 54. *0 The Western Electric decision was subsequently followed by the Board in Frances H. -Leggett and Company, 106 NLRB 217; Westinghouse Electric Corporation , 106 NLRB 1233 ; Laycob Flat Company, 107 NLRB 1009; Land O'Sun Dairies, Inc., 107 NLRB 1195. 41 See footnote 16, supra. 49 See for example , General Electric Company ( Newark Lamp Works etc.), 108 NLRB -1294, General Electric Company, 109 NLRB 747; General Electric Company, 109 NLRB -1372; Westinghouse Electric Corporation, 110 NLRB 872 ; Westinghouse Electric Corpo- ration, 111 NLRB 497. SETCHIKAN PULP COMPANY 291 such a clause does not insure any real degree of stability. Obviously, the General Electric rule is clearly inconsistent with the policy an- nounced in Rohm & Haas. Thus, the Board, in effect, concludes that a contract for a fixed term which is subject to defeasance only if certain events occur in mid-term does not sufficiently stabilize the bargaining relationship to warrant finding it a bar, but a contract which is ini- tially terminable at will does have such an effect. I am unable to accept this distinction. For, to say as the Board did in the General Electric cases, and, that once notice is given under the General Electric type clause "nothing remains of the entire contract but the meaning- less terminal date, which is itself subject to extinction," is to disregard completely the fact that negotiations to modify the substantive provi- sions must break down entirely before the termination aspect of the clause ever comes into play. Moreover, even if negotiations fail, although the parties then have the right to terminate the contract, one must be equipped with a pre- science which I do not claim to possess in order to conclude that they will exercise their right.43 Indeed, it is not at all inconceivable to me that, despite the fact that the parties reach an impasse in their negotiations, they might still prefer to maintain and continue their established bargaining relationship rather than dissolve it. Thus, having engaged in bargaining sessions, which are frequently long and arduous, having discussed in detail the numerous subjects, proposals, and counterproposals which usually arise in the drawing up of a con- tract, and having finally arrived at an agreement, the parties might well be reluctant and unwilling, under these circumstances, to scrap their contract and thus sacrifice the mutual benefits achieved. Fur- thermore, if consideration is given-and in my opinion it should be- to the intent of the parties when they include a General Electric type clause in their fixed-term contract, I think it manifest that their prin- cipal desire and expectation is that their bargaining relationship shall continue for the full specified period, that the purpose of the modifica- tion aspect of the clause is to enable them to conform the substantive provisions of their contract to changing circumstances and economic conditions, and that the termination part of the clause is the least significant feature and the one to be exercised, if at all, as a last resort. In the General Electric case the assumption is made-quite incorrectly, I believe-that the opposite is true. On the other hand, where the parties have a contract which is terminable at will in the first instance, as in Rohm cC Haas, if either one of them becomes dissatisfied at any time, then it really can be said 431 agree with the majority that it is not significant that unitize the situation here, in the original General Electric case, footnote 16, supra, the employer could terminate the contract if, as a result of the failure of the parties to agree, the union first engaged in strike action. 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that once notice is given of a desire to exercise the privilege to ter- minate nothing remains of the entire contract. However, I do not mean for a moment to imply that therefore such a contract does not have a stabilizing effect upon bargaining relations . For, as the Board pointed out in the Rohm & Haas case, the stability in this kind of con- tract lies in the fact that it is presented for Board consideration only when the parties wish to continue their bargaining relationship. Only then is it asserted by the parties as a bar. If the parties were not satisfied with their agreement one or the other would exercise his privilege under the contract to terminate it and that would dispose of the problem. Accordingly, to disregard such a contract has the effect of disrupting harmonious and settled relations between the par- ticular employer and labor organization and bringing disagreement and conflict where peace had formerly obtained. I agree completely with this view. However, it should be noted that in the General Elec- tric type contract if the parties fail to agree on modifications of the substantive provisions , that contract likewise in effect becomes termin- able at will. It seems to me that when this situation occurs, then parity of reasoning requires the same conclusion as the Board drew in Rohm cf Haas with regard to the contract's stabilizing effect upon the bargaining relationship. In Rohm & Haas, the Board observed that the record showed the employer and contracting union had engaged in harmonious relations for more than 5 years and stated that this fact emphasized that the former rule governing contracts terminable at will would have had the effect of disturbing industrial peace. It should be similarly noted that in the instant case there is uncontroverted testimony that section 29 of the contract, with which we are particularly concerned here, is identical with a section of the Uniform Labor Agreement of 1950 be- tween the Pacific Coast Association of Pulp and Paper Manufacturers and the International Brotherhood of Pulp, Sulphite & Paper Mill Workers and the International Brotherhood of Papermakers. That agreement, in which the Employer's managing stockholder and the Pulp and Sulphite Workers are participants, has a background of 21 years of negotiating history during which it has never been terminated, except by expiration at the end of the contract term. It is my judgment that if there was merit in holding as the Board did in Rohm & Haas that the contract was a bar to an election for 2' years and I believe there was-then, a fortiori, a General Electric type contract should likewise be a bar for its full term , provided such term is not unduly long under the principles previously discussed. There are other related difficulties which I have with the General Electric line of cases. For one thing, in my opinion, the effect of these decisions is to grant to rival union petitioners a gratuity to which KETCHIKAN PULP COMPANY 293 they are not entitled. Thus, as the Board stated in Western Electric ) 44 rival union petitioners normally expect, and are expected, to file for change of bargaining representatives only at the appropriate time be- fore the contract's automatic renewal or expiration date, as the case may require. There is no sound reason for governmental encourage- ment of a practice of filing at a time entirely dependent upon the for- tuity of the contracting parties' mutual undertaking to modify their contract while it is still current. I think this view is equally applica- ble to the General Electric type contract, since as I have previously indicated, there is no basis for conclusively assuming that the under- taking will be unsuccessful or that it will necessarily result in termina- tion of the contract. And, if the parties should eventually terminate the contract, it would seem that rival unions would have no more diffi- culty in ascertaining that fact than they do now with respect to any contract which is terminable at will. Moreover, to hold such a con- tract a bar will not prejudice the employees, as they stand to gain in the form of benefits becoming immediately available as a result of contract provisions freely negotiated, in light of changed conditions by their employer and the incumbent union. Finally, the original General Electric case appears to me to be to some extent inherently inconsistent. Thus, at first blush, it seems that the Board was concerned almost exclusively with the termination aspect of the clause as being the feature disruptive of industrial sta- bility. But, closer examination discloses that the decision establishes another prerequisite before the contract is rendered ineffectual as a bar, namely, the clause must also provide for broad modification of the contract's substantive provisions. Thus, the Board's decision in Dick Brothers 45 was distinguished on the ground that there the clause provided only for limited modification of the contract's substantive provisions 46 This was also the basis for the decision in Anaconda Copper 47 which followed the General Electric case. However, the Western Electric decision, which held that a broad modification by the parties of any or all the substantive, provisions of a contract dur- ing its term did not open up the contract to a petition, was overruled to the extent that the parties have a General Electric type clause in their contract. I do not profess to know, nor have my colleagues to my knowledge ventured to explain, why a clause which permits narrow modification of certain limited and specific substantive provisions and makes the contract in effect terminable at will if the parties fail to reach agreement fosters any greater degree, of industrial stability than it does if it permits broad modification. I had thought-and I still 44 See footnote 35, supra 45 Dick Brothers, Inc., 107 NLRB 1054. 46 See footnote 6 of the General Electric case, supra. 47 Anaconda Copper Mining Company, 112 NLRB 1347. 294 , DECISIONS OF NATIONAL LABOR RELATIONS BOARD do-that the rationale of Western Electric cogently and persuasively laid to rest any such argument.48 In view of all the foregoing considerations , I would overrule the entire line of General Electric cases. Accordingly, I would hold the instant contract a bar to a present determination of representatives for at least a period of 2 years and I would therefore dismiss the petitions-49 MEMBER MURDOCK, dissenting : I fully subscribe to the analysis of the law and the conclusions reached in Member Peterson's dissent, which substantially reflects the views I have consistently separately expressed or joined in since the Western Electric Co. case 80 as That the General Electric deviation from the preceding trend may not be a permanent one is indicated by subsequent decisions in which the Board has again emphasized sta- bility in industrial relations . For example , the Board recently held that where a con- tract contains coterminous modification and termination clauses, a broad notice to modify is not to be construed as an intent to terminate and the contract is a bar , if provision is ,expressly made that in the event such notice is given, the contract will be automatically renewed for another full term. It is said that , under these circumstances, a proposal for modification of the contract and the action taken thereon do not unstabilize the existing contractual relationship to such an extent as to preclude the application of the usual contract-bar rule. Mallinckrodt Chemical Works, 114 NLRB 187 ; Michigan Gear & Engi- neering Company, 114 NLRB 208. Another example which can be given is the increasing number of restrictions that-the Board has been placing upon the application of its schism doctrine-which is an excep- tion to the contract -bar rule. Thus , fewer contracts are being found not a bar because of alleged schisms. See Saginaw Furniture Shops, Inc , 97 NLRB 1488; Sylvania Elec- tric Products Company, 100 NLRB 357 ; Pepsi-Cola Buffalo Bottling Corp., 107 NLRB 990; A. O. Smith , Corporation, 107 NLRB 1415; Weatherhead Company, 108 NLRB 719. Finally, reference can be made to a number of decisions in which the Board has held that, under certain circumstances , a contract not formally executed until after the filing of a representation petition is nevertheless a bar to an election . Here, again the Board has acted in favor of maintaining stability of bargaining relationships See Oswego Falls Corp, 110 NLRB 621; Natona Mills, Inc., 112 NLRB 236; Phelps Dodge Refining Corpora, tion, 112 NLRB 1209; Mervin Wave Clip Company, Inc., 114 NLRB 157. - 4G In view of the fact that the contract has not been in effect for 2 years, it is unneces- sary for me to pass upon whether sufficient evidence has been presented to prove that a substantial part of the industry concerned is covered by contracts of 5 years' dura- tion. See Duncan Foundry and Machine-Works, Inc., 107 NLRB 298. ' so 94 NLRB 54 ; see also my dissenting opinions , e. g., General Electric Co., 108 NLRB 1290; I merican Lawn Mower Co., 108 NLRB 15$9, and Grifllth Rubber Mills, 114 NLRB 712. Riteway' Motor Parts Corp.,' Petitioner and Garage, Parking & Service Station Employees Union, Local 596, AFL-CIO. Cabe No. 4-ISM-179. January 31,1956 DECISION AND DIRECTION OF ELECTIONS Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Eugene M. Levine , hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. i The name of the,Employer appears as4corrgcted'at-the bearing 115 NLRB No. 52.