Pittsburgh-Des Moines Steel Co.

PITTSBURGH-DES MOINES STEEL COMPANY 855 Pittsburgh-Des Moines Steel Company and United Steelworkers of America, Local Union 4028, AFL-CIO. Case No. 20-CA- 1391. September 4, 1959 DECISION AND ORDER On October 16, 1958, Trial Examiner David F. Doyle issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the copy of the Intermediate Report at- tached hereto. Thereafter, the General Counsel and Charging Party filed exceptions to the Intermediate Report and supporting briefs, and the Respondent filed a reply brief. The Board has reviewed the rulings of the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rul- ings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and briefs, and the entire record in this case,' and finding merit in the exceptions, hereby adopts only those findings and conclusions of the Trial Examiner which are consistent with our decision herein. The sole issue in this matter is whether the Respondent's exclusion of the striking employees at its Santa Clara, California, plant from its 1957 bonus, was discriminatory in violation of Section 8(a) (3) of the Act. As detailed more fully in the Intermediate Report, Respondent's established practice over a 20-year period has been to declare a Christ- mas bonus of general application as a voluntary matter 2 to all of its plants and groups of employees each year in which the earnings were sufficient to warrant a bonus. Prior to 1957, Respondent's general practice was either to pay a bonus to all 'its employees or to none 3 In 1956, for example, the Respondent declined to declare a bonus for Santa Clara or Pittsburgh employees, even though the operations at these locations were profitable, since the overall earnings would not permit a general bonus. On this occasion, Fegtly, vice president of the Respondent's Pacific Coast operations and a member of its board of directors, gave the foregoing explanation to the Santa Clara em- ployees because, as he testified, he believed they were entitled to an explanation in view of their good record of performance. I The Charging Party's request for oral argument is hereby denied, as the record and the briefs, in our opinion, adequately set forth the facts and positions of the parties. 9 During bargaining negotiations in 1956, the Steelworkers asked that a past practices' section be incorporated in the contract, pursuant to which the Christmas bonus would become a bargaining issue instead of a matter solely within the discretion of the Respond- ent, but the Respondent refused to agree. 8 However, in 1951 the Respondent excluded from the general bonus the production and maintenance employees at its Pittsburgh plant who had engaged in a 46 -day strike. 124 NLRB No. 107. 856 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In 1957 the production and maintenance employees at Santa Clara engaged in a 57-day strike, which was concluded shortly prior to the 1957 bonus declaration. This was the only strike of Respondent's em- ployees in 1957. The strike was settled on the basis of a 15- or 16-cent- average hourly pay increase for the strikers. In subsequently declar- ing a bonus of general application. the Respondent's board of directors adopted a resolution which made only one exclusion, in the following language: "except that no Christmas gift is to be made to the striking employees4 at the Santa Clara plant." In explanation of the exclu- sion of "the striking employees," Fegtly testified that "The lengthy strike at Santa Clara in 1957 obviously affected the earnings of the Santa Clara plant for that year. It was determined that the hourly employees at the other plants should not be penalized." Subsequent to the board of directors' action Fegtly, in discussing the bonus with Jones, the Charging Party's international representative, reminded Jones of the fact, noted above, that the employees at Pittsburgh had not received a bonus when they had engaged in a strike. Later, Bar- rett, personnel manager,' stated that the striking employees ". . . had pretty well fixed the bonus situation, ..." and "he could'n't see why the Company should give us (i.e., striking employees) a $20,000 gift, when we, through our actions, the men in the Union, caused the Com- pany to lose $150,000 through a strike." The Respondent maintains the 1957 Christmas bonus was based entirely on economic considerations, asserting that its action with re- spect to the bonus merely represented the customary objective appli- cation of the five-factor formula which has been acceptable to the Bureau of Internal Revenue for tax purposes for many years. The factors allegedly considered were : (1) Overall results from all plants; (2) overall productivity from all. plants; (3) results at individual. plants; (4) productivity at each plant; and (5) continuity of the work effort at each plant. In measuring productivity, the Respondent considers its administrative account as its "most effective barometer." This involves a cost accounting procedure, allegedly satisfactory to the Bureau of Internal Revenue, pursuant to which direct shop labor is charged as sales overhead, and, therefore, "if there is an inefficiency of operation, steel not moving out of the plant as rapidly as it should, the account would very rapidly show loss." It is, therefore, evident that under this cost accounting procedure, during a, long strike period the administrative cost becomes very high as fixed costs continue to a considerable extent while production is low. 6 Emphasis supplied. Contrary to the Trial Examiner , in view of Barrett's position , we find his statement relevant to the question of the Respondent ' s motive in excluding striking employees from the bonus . Like the Trial Examiner , however, we assign no weight to statements, not herein detailed , attributed to other individuals. PITTSBURGH-DES MOINES STEEL COMPANY 857 The Trial Examiner based his recommendation that the complaint be dismissed primarily upon his finding "that the weight of the evi- dence establishes that the action of the Board of Directors in Decem- ber 1957 in voting a Christmas gift was based entirely on economic considerations, and was not discriminatorily motivated with refer- ence to the employees represented by the Union." This finding, in turn, rested for the most part on his crediting of the Respondent's conclusionary testimony that the bonus was declared without dis- criminatory intent and merely represented the objective application of the Respondent's five-factor formula. We conclude, however, con- trary to the Trial Examiner, that the weight of the evidence clearly establishes the Respondent's discriminatory motivation in excluding the striking employees at its Santa Clara plant from its Christmas bonus in 1957, namely, that it did so in order to penalize such em- ployees for engaging in a long, costly strike, and to discourage its employees from engaging in similar strikes in the fu.iture.6 Thus, as set forth hereinabove, the Respondent's action giving rise to this proceeding was contrary to its general practice of treating all plants alike with respect to payment of a bonus, the only departure in the past from this general practice having similarly been related to a prolonged strike ; moreover, the Respondent had no difficulty in departing from its general practice when the result was to penalize employees who had engaged in a prolonged strike, but did not deem it possible to depart from this practice when the result would have been to reward these same employees for their work performance. The fact that the bonus resolution defines the excluded group as "striking employees" is persuasive evidence of discriminatory moti- vation. Further evidence of such motivation is contained in the above-noted statements of Fegtly and Barrett. These circumstances in our opinion outweigh the conclusionary self-serving testimony on which the Trial Examiner relied, and establish that the Respondent denied the bonus to the striking employees in order to penalize them for engaging in a long strike and not because of permissible economic considerations. Nor do we reach a different conclusion, even if we assume as al- leged by Respondent that the denial of the bonus to the striking em- ployees stemmed solely from its application of the five-factor formula, without conscious intent to discourage strike activity on the part of its employees. Of the five factors, the first two, overall results at all 6 Contrary to the apparent conclusion of the Trial Examiner, it is too self-evident to require citation that the fact that the Respondent may have retained absolute discretion to declare or withhold a bonus does not constitute 'a license to the Respondent to exercise such discretion in a manner constituting discrimination in violation of Section 8(a) (3) of the Act. Nor is the fact that the Respondent may have had no animus against union activity, generally, controlling here, where the question is whether the Respondent's actions were motivated by opposition to a specific form of union activity, namely, a pro- longed strike. 858 DECISIONS Or NATIONAL LABOR RELATIONS BOARD plants and overall productivity at all. plants, relate to the question of whether any bonus is to be granted. If the answer is affirmative, as it was in 1957, Respondent then considers three factors, results at each plant, productivity at each plant, and continuity of work effort at each plant, to determine whether employees at individual plants shall share in the bonus. It is worth noting that while the Respond- ent's overall profit and loss standing "is of prime consideration'"' I in the application of the first factor, an individual plant's profit and loss standing "is no way a determining factor" in determining whether the individual plant is to participate in the bonus. At this stage the most important factor appears to be that of productivity at the indi- vidual plant in the application of which "profound and controlling consideration is given to the administration cost results." As already indicated, the administration cost account automatically shows an unfavorable balance in the event of a prolonged strike. Of course it is true that that account may also show an unfavorable balance in the absence of a prolonged strike, as indeed has happened with respect to Respondent's Pittsburgh plant. However, the record shows that the only time this "most important barometer" of an individual plant's productivity has been found to preclude the granting of a bonus, has been during the years in. which the plant involved experienced a pro- longed strike. This may or may not be due to the fact that one of the factors considered relates to the continuity of work effort at the plant, but, however explained by Respondent, the conclusion is inescapable that in applying its five-factor formula, to deny the Santa Clara em- ployees a bonus, Respondent discriminated against such employees solely on the basis of their participation in a prolonged strike. It is of course obvious that such discriminatory treatment tends to dis- courage future strike action by Respondent's employees. It is of no avail to Respondent that its action may have been uninfluenced by animus towards the Union, or by a conscious intent to discourage employees from engaging in prolonged strikes. As the Supreme Court noted in Radio Officers' Union, etc. v. N.L.R.B., 347 U.S. 17, at page 45: Thus an Employer's protestation that he did not intend to en- courage or discourage must be unavailing where a natural con- sequence of his action was such encouragement or discouragement. Concluding that . . . discouragement will result, it is presumed that he intended such consequence. In such circumstances intent to [dis] courage is sufficiently established. We find, therefore, in accord with the Radio Officers' decision, that by withholding its 1957 Christmas bonus from "striking employees," 7 Unless otherwise indicated the quoted statements in this paragraph are taken from Respondent's brief to the Board. PITTSBURGH-DES MOINES STEEL COMPANY 859 thereby restricting the compensation of such employees to the level agreed to by their bargaining representative, while at the same time granting the Christmas bonus to employees in other units, and thereby increasing their compensation above that called for in applicable col- lective bargaining agreements, Respondent violated Section 8(a) (3) and8(a) (1) of the Act.' THE EFFECT OF TIIE UNFAIR LABOR PRACTICE UPON COMMERCE The activities of the Respondent set forth above, occurring in con- nection with its operations described in section I of the Intermediate Report, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor dis- putes burdening and obstructing commerce and the free flow of commerce. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order that it cease and desist therefrom and take certain affirmative action to effectuate the policies of the Act, in- cluding payment to the employees at its Santa Clara, California, plant, of the Christmas bonus for 1957 which they were denied because of the Respondent's discrimination against them. The amount of the bonus to be paid to each employee entitled thereto shall be com- puted in a nondiscriminatory manner on the basis of such formula as the Respondent normally utilizes in computing the payment of a bonus to its employees. In computing the bonus, the period of the strike shall be treated in the same manner as any other type of absence from work. 8 See also Crosby Chemicals, Inc., 121 NLRB 412; Wheeling Pipe Line, Inc., 111 NLRB 244, enfd. 229 F. 2d 391 (C.A. 8). We disagree with the Trial Examiner's conclusion that the decisions in Speidel Corporation, 120 NLRB 733; N.L.R.B. v. Nash-Finch Com- pany. 211 F. 2d 622 (C.A. 8) ; and Intermountain Equipment Company v. N.L.R.B., 239 F. 2d 480 (C.A. 9), require a different result. In those cases no violation was found where the employers involved granted bonuses to unrepresented employees, but not to represented employees, because an employer has the right to restrict the compensa- tion of represented employees to that agreed to by their bargaining representatve, while setting the compensation of unrepresented employees at whatever level it deems proper, so long as the employer does not intend thereby to discourage union membership or activity. In such circumstances the mere act of instituting different modes or levels of payment does not inherently discourage union membership so as to warrant a finding of violation of 8(a) (3) under the Radio Officers' theory. In the instant case, however, Respondent granted a bonus to various groups of represented employees, but withheld it from "striking employees" represented by the Union in a separate appropriate unit. The fact that the bonus was within Respondent's management prerogative, clearly indicates that Respond- ent has restricted the "striking employees" to their bargain, -while granting nonstrikers compensation in addition to that agreed to in the collective-bargaining contracts governing their terms and conditions of employment. Such discrimination can have no other effect than to discourage employees from exercising their right to strike, for it serves notice that such action on their part will preclude them from sharing in any bonus the Respond- ent may choose to grant in the future. 860 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the foregoing findings of fact, and upon the entire record in this case, the Board makes the following : CONCLUSIONS OF LAW 1. Pittsburgh-Des Moines Steel Company is engaged in commerce within the meaning of the Act. 2. United Steelworkers of America, Local Union 4028, AFL-CIO, is a labor organization within the meaning of Section 2 (5) of the Act. 3. By excluding the striking production and maintenance employ- ees at its Santa Clara, California, plant from its 1957 Christmas bonus, the Respondent has engaged in and is engaging in an unfair labor practice within the meaning of Section 8 (a) (3) of the Act. 4. By interfering with, restraining, and coercing employees in the exercise of the rights guaranteed in Section 7 of the Act, as herein found, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Upon the basis of the entire record, and pursuant to Section 10(c) ,of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Pittsburgh-Des Moines Steel Company, its officers, agents, successors, and assigns, :shall : 1. Cease and desist from : (a) Discriminating against the production and maintenance em- ployees at its Santa Clara, California, plant, or its other employees, by excluding such employees or groups of employees from any bonus of general application to its employees, because they have engaged in a strike, or other concerted activity for the purpose of collective bar- gaining or other mutual aid or protection. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist United Steelworkers of America, Local Union 4028, AFL-CIO, or any other labor organiza- tion, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the Act. PITTSBURGH-DES MOINES STEEL COMPANY 861 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act: (a) Pay to the production and maintenance employees at its Santa Clara, California, plant the Christmas bonus for 1957 which they were denied because of striking, in the manner set forth hereinabove in the section entitled "The Remedy." (b) Preserve and make available to the Board or its agents upon request, for examination and copying, all payroll records, social- security payment records, timecards, personnel records and reports, and all other records necessary to determine the amount of said bonus payment due said employees. (c) Post at its plant at Santa Clara, California, copies of the notice attached hereto marked "Appendix." 8 Copies of said notice, to be furnished by the Regional Director for the Twentieth Region of the Board, shall, after being duly signed by the Respondent's authorized representative, be posted by the Respondent immediately upon receipt thereof and maintained by it for 60 consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for the Twentieth Region in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith. MEMBER BEAN, dissenting : I cannot agree with the majority that the Trial Examiner was wrong in dismissing the case against the Respondent. Briefly, the facts show that in 1957 the Respondent's board of di- rectors awarded a bonus to the employees at most of its plants, but excepted the employees who had shut down the Santa Clara plant f or 2 months by an economic strike. The Trial Examiner credited the testimony of various directors that their reason or motive for excepting the strikers was, not a desire to penalize them for their union activity or representation, but merely a recognition of the various economic factors involved in declaring and distributing the bonus. These factors included the obvious inability of the struck plant to show a profit out of which the bonus could be paid, and flie lower wages of the unrepresented employees at the struck plant, who had received no wage increase to correspond with the one negotiated, for the strikers by the union. 9In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order." 862 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On these facts the Trial Examiner followed the holding of the Speidel case (120 NLRB 733) that it is not unlawful for an employer to pay a bonus to his unrepresented employees and withhold it from those represented by a union, where the employer was motivated by economic consideration, such as the desire to correct his wage struc- ture. There is no valid basis for reversing the Trial Examiner's credibility finding as to the Respondent's economic motive, and I do not understand that my colleagues of the majority are doing so. Rather, I believe they are holding, as a matter of law, that an em- ployer may not take his financial situation into account in declaring a bonus, insofar as it includes losses resulting from a strike. Instead, the employer must limit evaluation of his financial situation, say the majority, to economic factors existing "independently of" and "di- vorced from" the strike. It is from this basic reasoning that I must dissent. I would adopt the Trial Examiner's findings and recommendations, and dismiss the complaint. MEMBER RODGERS took no part the in the consideration of the above Decision and Order. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL NOT discriminate against the production and main- tenance employees at our Santa Clara, California, plant, or any other employees by excluding such employees from any bonus of general application to our employees, because they have engaged in a strike, or other concerted activity for the purpose of col- lective bargaining or other mutual aid or protection WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form labor organizations, to join or assist United Steelworkers of America, Local Union 4028, AFL-CIO, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agree- ment requiring membership in a labor organization as a con- dition of employment as authorized in Section 8(a) (3) of the Act. PITTSB1JRGH-DES MOINES STEEL COMPANY 863 WE WILL pay the striking production and maintenance em- ployees at our Santa Clara plant the bonus for 1957 which they were denied because of our discrimination against them. PITTSBURGH-DES MOINES STEEL COMPANY, Employer. Dated----------- ----- By------------------------------------- (Representative ) ( Title) This notice must remain posted for 60 days from the date hereof, and must not be altered , defaced, or covered by any other material. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This proceeding is brought under Section 10(b) of the National Labor Relations Act, 61 Stat. 136, pursuant to a complaint issued by the General Counsel of the National Labor Relations Board against the Respondent Company.' The complaint dated June 26, 1958, alleged that the Company had engaged in unfair labor practices proscribed by Section 8(a) (1) and (3) of the Act by dis- criminating in regard to the hire, tenure, terms, and conditions of employment of certain employees at its Santa Clara plant, and by restraining and coercing these employees in the exercise of the rights guaranteed them in Section 7 of the Act. The complaint specified that the discrimination was effected by the failure of the Com- pany to give to the employees, who are represented by the Union, a Christmas gift,2 because they had participated in a strike called by the Union. The answer of the Company denied the commission of unfair labor practices, but admitted certain facts concerning the operation of the Company, and the repre- sentative authority of the Union. Pursuant to notice a hearing was held at San Francisco, California, on July 28, 29, 31, 1958, before the duly designated Trial Examiner. The parties were represented by counsel, or union officers, who were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce relevant evidence. At the close of the hearing the parties were given an opportunity to argue orally and to file briefs. All parties filed briefs, which have been considered. Upon the entire record in the case, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY The Company is a Pennsylvania corporation which is engaged in the fabrication and sale of steel products, with manufacturing plants located at Pittsburgh, Pennsyl- vania; Des Moines and West Des Moines, Iowa; and Santa Clara and Fresno, Cali- fornia. The Company also maintains warehouses located in Santa Clara, Fresno, Sacramento, Stockton, and El Monte, California. Its principal office is located at Pittsburgh, Pennsylvania. The Company's operations are divided into three divisions. The Eastern Division is operated from the Company's head office at Pitts- burgh, Pennsylvania. The Mid-West Division is headquartered at Des Moines, Iowa, and all operations of the Company's Western Division are directed from the office located at its plant at Santa Clara, California. In this proceeding, Pittsburgh-Des Moines Steel Company is referred to as the Company or the Respondent; the Charging Party, United Steelworkers of America, Local Union 4028, AFT CIO, as the Local or the Union, and its parent labor organization, United Steelworkers of. America, AFL-CIO, and its affiliates, as the Steelworkers : the General Counsel of the Board and his representative at the hearing, as the Gvn;'ral Counsel ; the National Labor Relations Board, as the Board ; and the Labor Manage:eent Relations Act of 1947, as amended, as the Act. 2 The General Counsel referred to the payment at Christmas time as a "bonus," while counsel for the Company referred to it as a "gift." Both terms are used in this report to designate the payment. 864 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the calendar year ending December 31, 1957, the Company sold and shipped from its Santa Clara plant products valued in excess of $50 ,000 to points outside the State of California. It is conceded by the Company that its Santa Clara plant is part of a multistate enterprise, and that the total sales of the entire enterprise shipped directly outside the State during 1957 exceeded $250,000. Upon the pleadings , I find that,the Company is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. The Hierarchy of Management C. A. Fegtly, a vice president and director of the Company, and the manager of its Western Division, was the principal witness for the Company. According to his testimony, 70 percent of the stock of the Company is owned by John E. Jackson, the Company's president; W. R. Jackson, the Company's secretary-treasurer; and a sister of these men. The named individuals are the children of the founder of the Company. The two Jacksons form an informal executive committee , and are in direct charge of the Company's daily operations; W. L. Jackson having charge of all engineering, production, and manufacturing , and John E . Jackson having charge of all financial matters. The 30 percent of stock not owned by the Jacksons is in the hands of various employees of the Company. The Company has the conven- tional board of directors, but from Fegtly's testimony, it is clear that the Jacksons, as majority stockholders, officers, and as the executive committee, have a secure control of the corporation's affairs and policies. II. THE LABOR ORGANIZATION INVOLVED; THE UNIT OF EMPLOYEES Upon the pleadings, I find that the United Steelworkers of America, Local Union 4028, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. Upon the pleadings , I find that the Union has been and now is the bargaining rep- resentative of the employees comprising a unit of production and maintenance workers at the Company's Santa Clara plant. For many years past the Company and the Union have been parties to collective-bargaining agreements covering the employees in said unit. III. THE ALLEGED UNFAIR LABOR PRACTICES The Issue It is undisputed that on September 5, 1957, the employees at the Santa Clara plant, in the unit represented by the Union, engaged in an economic strike, which was finally settled on November 23, 1957. In the ensuing week the men returned to work , and normal operations were resumed on approximately December 1, 1957. It is likewise undisputed that on December 9, 1957, the Company, by its board of directors , voted a "Christmas Gift" to all its plant employees, including its employees at the Santa Clara plant, except the employees in the unit which had engaged in the strike. The General Counsel contends that the failure of the Company to give a Christmas gift to these employees was discriminatory and in violation of the Act ; while the Company contends that its action was not discriminatory , but was based solely on economic considerations in accordance with its long -established practice and policy in regard to its Christmas gift to employees. Undisputed Facts; Background of Labor Relations C. A. Fegtly, previously identified, testified without contradiction to certain facts concerning the Company's background of labor relations. Counsel for the parties stipulated to others. These sources disclose that in 1937 the Steelworkers organized the production and maintenance employees of the Pittsburgh plant. The Des Moines plant was organized by the Ironworkers , a different union, at an unspecified date. The Santa Clara plant was organized in 1947, and the Union has been the bargain- ing representative of the production and maintenance workers since that date. The other western operations are organized as follows: at Sacramento-the Teamsters; at Stockton-the Teamsters and Ironworkers; at Fresno-the Teamsters and Iron- workers; and at El Monte-the Steelworkers. The undisputed testimony of Fegtly establishes that the above-named unions ac- quired recognition from the Company without unusual difficulty. When a union presented proof to management that it represented the employees in an appropriate PITTSBURGH-DES MOINES STEEL COMPANY 865 unit, the management uniformly recognized the bargaining authority of the union. Once contractual relations were established, they were continued through a series of contracts of the parties. Strikes and the Bonus Apparently the relationship of the Company with the Union and its parent, the Steelworkers, was a reasonably satisfactory one. Counsel stipulated as to the occur- rence of certain strikes and the payment or nonpayment of the Christmas gift, and that stipulation reveals that the negotiation of contracts rarely involved strike action. ,It is undisputed that the Christmas gift was instituted by the Company prior to 1946. It was paid at Christmas time to all employees-including production and maintenance workers, skilled or unskilled; clerical and office employees; and super- visory employees. It was also paid without regard to union affiliation or the lack thereof. As instituted and maintained throughout the years, management exercised the exclusive prerogative of deciding (1) if a gift would be paid at all; (2) how much of corporate funds would be devoted to payment of the gift; and (3) who would receive a gift, and of how much. In the course of 20 years, strikes occurred and bonuses were paid or not paid. There appears to have been no uniformity in the manner in which the Company treated employees who had struck in the course of the year, at Christmas time. The undisputed facts on these points, strikes and gifts, may be summarized as follows: In 1946 a Christmas bonus was paid to all employees, although a strike of 12 days' duration occurred at Pittsburgh in this year. In 1947 it was paid to all employees except those at the Pittsburgh plant, where a strike of 12-14 days occurred during the year. In 1948, 1949, and 1950, all of the employees were again paid a bonus. In 1951 all were paid a bonus except the Pittsburgh employees in the production and maintenance unit of the Steelworkers, in which a strike of 46 working days' duration occurred in the year. In 1952, 1953, 1954, and 1955, a bonus was paid to all employees except to the employees at the Fresno plant, which was acquired by purchase in August of 1955. In 1956 no bonus was paid to any employees. A strike of 11 weeks' duration occurred at Des Moines in this year. In 1957 it was paid to all employees except those in the production and mainte- nance unit at the Santa Clara plant represented by the Union. The Santa Clara strike lasted 57 working days. It is the failure of the Company to pay the bonus to these men, which is under examination here. In the above summary it should also be noted that the Company paid a bonus to all employees at the Santa Clara plant in the years 1948 through 1955. Points at Issue 1956 During 1956 the record of production and profit of the Santa Clara plant was considered satisfactory by Fegtly. However, according to his testimony, the Com- pany had lost a considerable sum during that year in its operations in Spain and on a job in the East called the Fort Randall Project. Fegtly went East sometime before Christmas to meet with the Jacksons and attend a meeting of the board of directors. From Fegtly's discussion with W. R. Jackson it appeared that the Jacksons had decided that the Company's business record in the year 1956, and the business prospects for 1957, did not warrant the payment of a bonus .to any of the employees. According to Fegtly, he pointed out to the Jacksons and to the board of directors that -the Santa Clara record was good and that the men, on the merits of their work, should be paid a bonus. However, the board of directors decided, because of general economic conditions and restrictions imposed on the Company by the banks, that it would be inappropriate to make a gift to anyone that year. Fegtly testified that when he returned to Santa Clara he felt that he owed an explanation to the men as to why a bonus was not being paid in view of their good record of performance during the year. On December 15, 1956, he called the em- ployees together at the Santa Clara plant. He explained to the men that the opera- tions of the Company in Spain had not been successful and that the Company had sustained very heavy losses on the Fort Randall job, and that the Pittsburgh and Santa Clara plants had made money, but that the Des Moines and Fresno plants had not, and that the directors had determined that the overall business picture was not good, so they had decided not to pay a Christmas bonus. 525543-60-vol. 121 56 866 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Several employees 3 testified, giving a different version of Fegtly's speech to them. They agreed that he referred to the operations in Spain and the Fort Randall job, but testified that he excused the Company's not giving a bonus to Santa Clara, in view of Santa Clara's good showing, by saying "if one plant didn't get it, no one got it," or "if they couldn't pay one, they wouldn't pay any." For his part, Fegtly denied that he made any statement to the effect that if one plant did not get a bonus none would, or that he said all plants but Santa Clara had lost money on their operations in the course of the year. Up to 1956 there was no effort made by the Union to change the situation whereby the granting of a Christmas gift was exclusively a management prerogative. How- ever, in the negotiations for a new contract in September of 1956, the Union trans- mitted to the Company a typewritten copy of proposed changes in the contract.4 Among the proposed changes was one marked, "Section 8: 1. Add past practice Section." In the negotiations which followed, Carl Jones, International representa- tive of the Union, explained what the Union meant by this particular demand. He said that the employees appeared to be satisfied with Fegtly's treatment of them, but the Union wished to be sure that the same benefits would accrue to the union members if someone were to replace Fegtly. The Union wanted to insert in the contract "a past practice clause" which in substance would guarantee that all the customary practices and procedures of the Company would be continued in the future. Fegtly demurred, saying that the past practice clause would clearly cover the Christmas gift, and that the Christmas gift would then become a contract matter between the Union and the Company, and would not,be a gift as management had always considered it. Fegtly said that the Company would resist any efforts to add a past practice clause to the contract which would in any way change the voluntary nature of the Christmas gift. The Union also said that the past practice clause would cover certain safety practices which it desired to put in the contract. Fegtly agreed that the safety measures which were then in force should be in the contract, and he agreed that provisions regarding those specific measures could be added to certain appropriate paragraphs. Fegtly in his testimony pointed out in the contract certain sections which were added pursuant to this expressed desire of the Union. They dealt with physical examination of employees engaged in spray painting, and clauses guaranteeing compliance by the Company with all State and Federal safety regula- tions. The Union made no further demand concerning the inclusion of the Christmas gift in the contract and, as it was finally executed, the contract contained no refer- ence to the Christmas gift .5 1957 The contract between the parties, dated September 1, 1956, provided for a re- opening on the subject of wages by notice given 60 days prior to September 1, 1957. The contract was opened pursuant to this clause and negotiations were begun in the fall of 1957. On September 5, 1957, the Union struck to enforce its wage de- mands. The only persons at the Santa Clara plant engaging in the strike were the production and maintenance unit represented by the Union. Fegtly testified that the Company did not attempt to operate the fabricating plant in the course of the strike. However, all employees engaged in other activities at the Santa Clara plant continued to work, These employees were engaged in sales, administration, ac- counting, or field construction operations. A few worked in the toolhouse, and a few were watchmen and gardeners. On November 23, 1957, representatives of the Union and the Company met, and it was agreed that the Union would accept the last offer of the Company. It then developed that many of the striking employees had obtained work at other plants during the strike, and these employees wished to give some notice to their temporary employers that they were leaving their temporary employment to return to the Santa Clara plant. The company and union representatives agreed that approximately 1 week would be afforded the striking employees to give notice to their temporary employers and to come back to work at Santa Clara. Operations of. the Santa Clara plant were resumed on a normal scale on approximately December 1, 1957. Proof of Motive It is undisputed that in December 1957 the Company voted to pay a Christmas bonus to all the employees of the Company in the United States, with the exception of those in the unit represented by the Union at the Santa Clara plant. It is like- 3 Witnesses Tracy, Bower, Beck, Wallace, Duncan, and Wakefield. i The proposed changes are Company's Exhibit No. 2 in evidence. 5 The contract is Company's Exhibit No. 1 in evidence. PITTSBURGH-DES MOINES STEEL COMPANY 867 wise undisputed that the strike of those employees was the only strike at any plant of the Company during that year. It is the contention of the General Counsel that this action of the Company was retaliatory in nature and was designed to discourage membership in the Union. In an effort to prove this fact, he called several employee witnesses. David O. Tracy, the president of the Union and an employee in the unit, testified that on or about December 18-19, 1957, he was working at his usual place near the shop office around 11 a.m. At about that time Fegtly came into the shop and talked for a few moments with James Bruce, who is the foreman in the plate shop. When Fegtly left, Bruce walked over to Tracy and told him that Fegtly had in- structed him to tell Tracy that if anyone asked Tracy why the men weren't getting the bonus he was to say it was because they had been on strike. The only persons present when Bruce made this statement to Tracy were Bruce and Tracy himself. Tracy also testified that on another occasion he was in the presence of employees Wallace, Wakefield, and Duncan, when Wallace asked Foreman Kruse why the men didn't get their bonus. Kruse answered because the men "had to strike." Tracy also testified that on July 22, 1958, he was in a negotiating meeting with Barrett and Fassett, who represented the Company. The subject of the bonus was raised by the Union on this occasion. The Union asked to have the bonus written into the contract. When they came to that item, Barrett said, "It looks like we are putting a stop to all bonuses from now on to you fellows." Barrett also said on this occasion that the action of the Union had lost $150,000 to the Company and he couldn't see why the Company would have to pay the union members a gift of $20,000. Also on this occasion someone asked Fassett who made the decision on the Christmas bonus, and Fassett replied that as far as he knew it was the board of directors. The union representatives asked him specifically about 1957, and Fassett replied that as far as he knew the board of directors decided the question. In denial of this testimony, Foreman Bruce testified that he had been an employee of the Company for approximately 30 years and had been employed at the Santa Clara plant since October 1937. He had previously worked at the Pittsburgh plant in the production and maintenance unit, and in 1947, the year of the strike at Pitts- burgh, he engaged in the strike and received a Christmas gift in that year. Bruce also said that formerly he was a member and president of the Union at Santa Clara. Bruce said he did not know who determined whether a Christmas gift would be given, or the basis for determining the amount of the gift or who would get a gift. He also said he was never told by anyone that the reason the men did not get a Christmas gift was to penalize them because they had engaged in a strike. As to the statement attributed to him, Foreman Kruse testified that he began his employment with the Company on May 13, 1957, and that at the time the state- ments were allegedly made by him, he did not know who determined whether a Christmas gift would be given; nor did he know the basis for determining Christmas gifts or who would get them. He said that he was never told by anyone that the reason the Santa Clara production and maintenance employees represented by the Union were not given a Christmas gift was to penalize them because they went out on strike. In denial of Tracy's testimony, Fegtly testified that he had no occasion to discuss with Bruce the reason why the employees were not granted a bonus, and that he had no recollection of ever discussing with Bruce the reasons why the production and maintenance employees did not get a Christmas gift. Carl Jones, the international representative of the Steelworkers, who has been mentioned as participating in the negotiation of the 1956 contract, testified that around January 15, 1958, he learned that the Company had not paid a bonus to the employees at Santa Clara. Shortly thereafter he had lunch with Fegtly and dis- cussed other labor problems with that official. As they were driving back to the plant from their luncheon, he told Fegtly that he had been advised that the Company was wrong in not paying the bonus to the men, and it was the Union's belief that it could force the Company to pay the bonus. He told Fegtly that it would create better relations to pay the bonus than have the Union go after it in some other way. He told Fegtly that if the Company didn't pay the bonus the Union intended to press the issue. According to Jones, Fegtly replied that if the Union pressed the issue he would discuss it with his people, but his sympathies would not be with the Union on the issue and, further, some other members of the Union back East did not re- ceive the bonus when they struck the Pittsburgh plant. Jones also testified that on the morning of March 14, 1958, he discussed the matter of the bonus with Barrett, the personnel director of the Company. In talking to Barrett concerning other problems, he asked Barrett when the Company was going to pay the Christmas bonus. Barrett replied that he supposed it would be 868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD paid when the board of directors of the Company ordered it paid. The men then fell to discussing the matter, and Barrett said that he didn't believe that the Company was morally obligated to pay a gift to the men after they had taken economic action against the Company which had cost it in excess of $100,000. Jones also testified that in the 1958 negotiations, which had taken place about a week before the hearing, he had again raised the question of the bonus with Barrett, pointing out that it was not a nice thing to penalize the men by denying the men a Christmas bonus just because they struck the plant. Barrett replied that the men had taken economic action, that it cost the Company what he estimated to be $150,000, and he ,.1n't think that the Company should be obligated under those cir- cumstances to giv. the men a gift which would cost in his estimation about $30,000. Jones disputed Barrett's estimate of the cost of the bonus, saying it would be closer to. $15,000. Earlier in July 1958 they had discussed the matter along the same lines. According to Jones, in that conversation Barrett said that the economic action taken by the men had cost the Company an estimated $150,000 and that it would cost about $30,000 to pay the bonus and that he didn't think that the men should get it, under those circumstances. Robert Barrett testified that he was employed by the Company in June 1957 as personnel manager, and that he learned only indirectly that the determination of Christmas gifts was made by the board of directors in Pittsburgh. He said that he did not know,anything about the factors which the board of directors considered in arriving at the determination to pay a bonus, or in determining how much the bonus would be, or who would get it. Barrett testified that no company representa- tive had told him that the denial of Christmas gifts to the union members was to- penalize them for the strike. He said that the only statement he could have made was to the effect that "it looks like you fellows put a stop to all bonuses." And this was based on his opinion and not on fact. Barrett said that all discussions with him concerning the bonus came up in 1958, a period of a few weeks before the hearing, in the course of negotiating a new contract with the negotiating com- mittee of the Union. In discussing a union proposal to include the bonus in the contract, he had made estimates about the cost of the strike. He said that when he made such estimates in the discussion he always prefaced it by saying that he had no direct knowledge of the cost of the strike but that based on various guesses he believed that the strike had cost the Company's operations at least $100,000, possibly $150,000. Barrett said he had no knowledge or means of gaining knowl- edge of what the total cost of the strike to the Company had been, or what the total cost of the Christmas gifts to the employees would be. He said that all the statements attributed to him were his own opinions and impressions and were given to the Union in the course of negotiation on the proposal to include the bonus in the. contract. The Basis for the Christmas Gift The principal witnesses for the Company were Fegtly, previously referred to,. and Thomas G. Morris, the assistant secretary and assistant treasurer and a director of the Company, who testified to the manner in which the Company took action on the Christmas bonus. Fegtly testified that in all the time he was connected with the Company, the granting of a Christmas bonus had been the exclusive prerogative of the board of directors of the Company in consultation with the executive com- mittee. Fegtly testified that as a director and officer of the Company, he knew the manner in which a Christmas gift was voted to the employees of the Company. He said that there were five factors which were considered by the board of directors- in determining whether a Christmas gift should be given. The factors were: (1) the overall result from all plants; (2) overall productivity of all plants; (3) results at individual plants; (4) productivity at each plant; (5) continuity of work effort at each plant. He said that first consideration was given to overall results and overall produc- tivity at all plants. This factor was considered to determine whether the Company's operation at all plants, in the course of the year, had produced such corporate profits that the Company could afford to give a bonus. If the determination resulted in a negative finding, that there were insufficient funds resulting from operations to render a bonus feasible, there was no further consideration on the subject of a gift. That was the result reached by the board of directors in 1956. If consideration of the first two factors was resolved in the affirmative, considera- tion of the other factors then took place. In considering the third factor, results at individual plants, the profit and loss. statement was not a determining factor, because the profit and loss figure on an individual plant basis did not afford the board of directors an insight as to where PITTSBURGH-DES MOINES STEEL COMPANY 869 the profit or loss might have arisen in the plant's operation, since there were at each plant several different types of operations, such as field construction operations, engineering operations, and manufacturing and fabricating operations. Since there was no standard by which these individual factors could be measured, the board of directors usually gave controlling consideration to the "administration cost results." The Company considered this to be the best available barometer to measure operational productivity. Both Fegtly and Morris testified, without contradiction, as to the Company's bookkeeping procedures, which set up the administration cost accounts. Morris testified that by standard bookkeeping procedures, certain costs of doing business, which could not be allocated to a particular contract, were assembled in a general account as debits or costs. A certain proportion of each payment for work per- formed was credited to this general account. The balance or imbalance of these figures, which are kept on a monthly basis, was accepted by the Company as the true, current barometer of the productivity of the various operations at each plant. Fegtly testified that the board of directors relied almost exclusively on a study of these figures in determining how much a gift should be to each plant, and to each type of operation. The last factor to be considered was the continuity of work effort. This term meant the likelihood of future profits from continuous operation. Under this heading, the board of directors considered the economic future of the Company as a whole, the economic health of the country, general business prospects, prospects of Government spending, etc. This was necessary because money paid as a gift could not be recaptured if the Company were to encounter an unprofitable period in the foreseeable future. Fegtly testified that the board of directors, in 1957, considered -these factors, and passed a resolution worded as follows: Motion was made by L. E. Anderson that a Christmas Gift to Plant Employ- ees be paid, amounting to: Pittsburgh ------------------------------------------- $51,550.10 Des Moines------------------------------------------ 36,477.70 Fresno ---------------------------------------------- 6,173.60 Other Warehouse personnel in California, except that no Christmas Gift is to be made to the striking employees at the Santa Clara Plant----------------------------- 5,376.36 The motion was seconded and carried. Fegtly testified that none of the board of directors discussed "penalizing" the employees in the unit because of their strike, and he said that the phraseology "striking employees" in the resolution was descriptive, to distinguish those employees from employees engaged in sales, administration, accounting, construction, tool- house, and watchmen and gardener, all of whom had worked the entire year. He said that the employees here involved were not granted a Christmas gift, on the basis of economic considerations only. On cross-examination, Fegtly was interrogated very closely as to what the strike had cost the Company. Fegtly's response was that the Company did not know how much the strike had cost; that all costs in relation to productivity would be reflected in the administration costs account, but that it was impossible to tell whether other economic reasons caused part of the loss, or all of it, or how much could be attributed to the strike. Fegtly said that it was impossible to identify costs of a strike; that the cost of the strike would only be reflected in the general administra- tion cost of doing business. The General Counsel examined Fegtly and Morris at length in an apparent effort to show that the Company's conduct in granting gifts was not consistent with a transcript of the administration cost accounts which were in evidence.6 However, this examination failed to achieve its purpose. Disparate Treatment of Santa Clara Employees When questioned about the fact that the "other employees" at 'Santa Clara were granted a bonus, Fegtly explained that in 1957, in settlement of the strike, the employees in the production and maintenance unit received an increase of 12 to 20 cents an hour on a sliding scale, with the average being somewhere between 15 and 16 cents. The "other employees" in the plant, who had worked all year, had 6 Company's Exhibit No. 3. 870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD received no similar increase . Increases for those employees are considered on an individual merit basis, and not on a blanket basis. The above is not an exhaustive narration of the evidence, but is a summary of the contentions of the parties, and the highlights of the evidence presented by each. Concluding Findings Upon the credible evidence, I find that the General Counsel has failed to prove by a preponderance of the evidence that the Company committed the unfair labor practices alleged in the complaint. Several considerations constrain me to that conclusion. After an examination of all the evidence, I am not persuaded that the Christmas gift was withheld from the employees because of the Company's desire to discrimi- nate against them, or effect a reprisal against them for the strike, or to discourage membership in the Union. Morris, in his testimony, which is undisputed and which I accept, stated that the books of the Company, including the administration cost account, were kept in accordance with standard bookkeeping procedure. According to Fegtly, the board of directors based its decision to pay or not pay a Christmas gift to its employees on the basis of economic considerations and production records, as determined by the "five factor formula." The testimony of these two directors to the effect that the denial of a gift to the employees in the production and mainte- nance unit was based solely on economic considerations is direct evidence of men who participated in the decision of the board of directors, and who are familiar with their deliberations on the subject. True, Fegtly, as manager at Santa Clara, and as a director of the Company , is an interested witness to the extent that in this proceeding his, and his fellow directors' conduct is under examination. But aside from that circumstance , this record discloses no point on which his testimony was impeached, and affords no reason for the rejection of Fegtly's testimony. Judged on the basis of his demeanor and bearing while on the stand, he appeared to be a fair, frank, and truthful witness. I have credited his testimony fully. On the other hand, the testimony of the witnesses presented by the General Counsel was not persuasive. To establish that the board of directors acted discriminatorily, the General Counsel has sworn a group of union officers, and adherents, who have an interest in the bonus, who quote the words of minor supervisors at the Santa Clara plant as proof of the motivation of the board of directors, who met in Pittsburgh in December 1957. Notable in this regard is the testimony which attributes to Kruse, foreman of the welding department, and to Bruce, foreman in the plate shop, a knowledge of why the employees were not voted a Christmas gift by the board of directors. Both foremen testified that they had no knowledge on this subject, and at least by inference denied the statements attributed to them. In the light of the foremen's testimony, I am not persuaded that they had any knowledge of the board of directors ' motivation in this matter, or made the state- ments attributed to them. While a foreman's testimony as to why a man in his department was discharged, by himself or his immediate superior, may be acceptable and persuasive as to the motivation behind the man's discharge, the testimony of a shop foreman as to the motivation of the board of directors in taking specific official action, is not credible, absent a showing of some special knowledge on his part. Especially is this true here, where apparently no one in the Company, outside the board of directors, knew the procedure followed in considering a Christmas gift, until it was disclosed in this proceeding. The testimony of International Representative Jones and Union President Tracy as to statements made by Barrett, the personnel director at Santa Clara, in the course of negotiations in 1958, is likewise devoid of that quality which inspires belief in the auditor. It is a fundamental principle of labor relations that, at the bargaining table, representatives of unions and companies may talk freely on all issues, so that collec- tive bargaining may be carried on in an atmosphere of freedom. The effort of the Union and the General Counsel to use the arguments and opinions of Barrett, made in the course of the 1958 negotiations, to establish a discriminatory motive at- tributable to the board of directors in the December 1957 meeting is, on its face, a distortion of these remarks, by removing them from their context of the bargaining table. Barrett's arguments, statements, opinions, or speculations, elicited by the Union's questions and counterarguments in the 1958 negotiations, are of questionable probative value in establishing the motivation of the board of directors at the Decem- ber 1957 meeting. The statements attributed to Barrett, viewed in the light of his testimony, which I credit, are nothing more than his conjectures or speculations on this subject. Therefore, upon the credited testimony of Fegtly, Morris, Kruse, Bruce, and Bar- rett, I find, specifically, that the weight of the evidence establishes that the action of PITTSBURGH-DES MOINES STEEL COMPANY 871 the board of directors in December 1957 in voting a Christmas gift was based en- tirely upon economic considerations, and was not discriminatorily motivated with reference to the employees represented by the Union. There are other considerations which lead me to the same conclusion. From all the evidence, it appears that the relationship of the Company with all the unions who represent its employees was a relatively friendly one. When employees chose a representative, the Company recognized the representative, and thereafter bargained with it. Occasionally contract negotiations were marked by strikes, but these were settled in the normal course of events. There appears to be no animus on the part of management toward any of the unions. Indeed, when the 1957 strike at Santa Clara was settled, the strikers were granted a week's time by the Conpany to terminate their temporary jobs and return to work. The action of the board of directors rela- tive to the Christmas gift of 1957, must be judged against this background of amicable labor relations. As part of this relationship, it is undisputed that for 20 years the giving of a Christmas gift was considered by all concerned to be a prerogative solely of manage- ment. When it was given, it was in addition to all wages, fringe benefits, etc., due to employees under their union contracts. Specifically, for 20 years the labor contracts, covering wages, contained no reference to the Christmas gift. In 1956 the Union sought, by the insertion of a past practice clause, to extend coverage of the wage agreement to the Christmas gift. The Company resisted this effort of the Union on the ground that the Christmas gift was not a part of wages, but was a free gift, paid by the Company when in its judgment business operations warranted it, in addition to all wages and benefits paid under the contract. Ultimately, the wage contract was signed without any reference to the gift or past practices. From this, I conclude that the gift, at least for the duration of that contract, was not a part of wages, by agree- ment of the parties. And I can find in this record no conduct of the parties which has changed that situation. As a result of this conduct, the Christmas gift remained a prerogative of management, something which might be given to the employees, or withheld, in the absolute discretion of the board of directors. In 1957, a strike of 57 working days, approximately 22 percent of the work year, occurred in the manufacturing operations at Santa Clara. Despite this local work stoppage the overall operations of the Company were profitable. Although the testi- mony of Fegtly is to the effect that the cost of the strike is not reflected on the books of the Company, except as a cost of doing business, and is merged with other figures, there can be no doubt that the strike occasioned a financial loss to the Company and reduced the productivity record of the unit of men on strike. In that posture of affairs, the board of directors granted a Christmas gift to its employees who qualified in the directors' judgment under its five factor formula, and withheld it from the unit here involved, whose record of production in the directors' judgment was not up to standard. Under its contract with the Union, this decision was exclusively a man- agement prerogative. A case resembling the facts in the instant case was before the Board and the Federal Court in N.L.R.B. v. Nash-Finch Company, 211 F. 2d 622 (C.A. 8). In that case an employer who had previously provided life insurance, hospitalization, and a Christmas bonus to his employees, discontinued them unilaterally after his employees had joined the union, and the union in bargaining negotiations had ac- quiesced in the omission of these benefits from the contract. The Board held that under those circumstances the union had not waived its rights "regarding any changes in these conditions of work." Nevertheless, the court held that the failure to include those benefits in the contract was conclusive. In disposing of the question there presented, the court said: The respondent, we think, may not be convicted of an unfair labor practice for doing no more and no less for its union employees than its collective bar- gaining agreement with them called for. "And it is . clear that the Board may not either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements." N.L.R.B. v. American National Insurance Co., 343 U.S. 395, 404, 72 S. Ct. 824, 829. . . Whether the contract in suit should have contained the clause pro- posed by the Union requiring the maintenance of existing standards of employ- ment was "an issue for determination across the bargaining table, not by the Board." At page 409 of 343 U.S., at page 832 of 72 S. Ct. It seems to us that what the Board has done, under the guise of remedying unfair labor practices, is to attempt to bestow upon the respondent's union em- ployees the benefits which it believes the Union should have obtained but failed to obtain for them as a result of its collective bargaining with the respondent on their behalf. 872 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In Intermountain Equipment Company v . N.L.R.B., 239 F . 2d 480, (C.A. 9) the court of appeals quoted the above passage in the Nash-Finch Company opinion, in reaching a similar result. Recently the Board, in Speidel Corp., 120 NLRB 733, applied the reasoning of the Nash-Finch and Intermountain Equipment cases, and found that an employer did not violate the Act by paying an Easter bonus to its unrepresented employees and withholding such bonus from employees represented by the union , since ( 1) such disparate treatment of employees is not inherently unlawful; (2) there was no evi- dence of antiunion conduct on the part of the employer; ( 3) pay of employees repre- sented by the union was substantially higher than that of unrepresented employees and the employer was concerned about the imbalance in the wage structure ; and (4) the employer had reasonable basis for believing that its employees and union con- curred in the employer's position that payment of bonuses was solely a management prerogative. [Recommendations omitted from publication.] Halben Chemical Co., Inc. and Local 284, Association of Process- ing, Maintenance and Distributing Workers of America and Local 14149, Oil, Chemical and Atomic Workers International Union, AFL-CIO, Party to the Contract. Cases Nos. 2-CA- 5751 and 2-CA-6203. September 4, 1959 DECISION AND ORDER On June 4, 1959, Trial Examiner Robert E. Mullin issued his Inter- mediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Inter- mediate Report attached hereto. Thereafter the Respondent Com- pany and Local 14149, Party to the Contract, filed exceptions and supporting briefs. Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three- member panel [Chairman Leedom and Members Rodgers and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and the briefs, and the entire record in the case, and hereby adops the findings, conclusions, and recommendations of the Trial Examiner. ORDER Upon the entire record in this case and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent , Halben Chemical Co., Inc., its officers, agents , successors, and assigns, shall: 124 NLRB No. 116.