Intracoastal Terminal, Inc.

INTRACOASTAL TERMINAL, INC., ETC. 359 Intracoastal Terminal , Inc. and Louisiana Processing Company, Inc. and General Truck Drivers, Chauffeurs , Warehousemen and Helpers Local 270. Case No. 15-CA-1220. November 25, 1959 DECISION AND ORDER On May 15, 1959, Trial Examiner A. Bruce Hunt issued his Inter- mediate Report in the above-entitled proceeding, finding that the Re- spondents had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist therefrom and take affirmative action, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the Respondents filed exceptions to the Intermediate Report and the Respondents and the General Counsel filed 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 Bean and Fanning]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report and the exceptions and briefs, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner, with the modifications and additions noted below. 1. We agree with the Trial Examiner that the Respondents violated Section 8 (a) (5) and (1) of the Act by unilaterally instituting the following changes in the employees' working conditions, without notifying or consulting with the newly certified bargaining representa- tive : (1) Changing the workweek from Monday through Friday to Wednesday through Sunday, which operated to reduce the overtime earnings of the employees affected; 1 (2) shutting down one of the two plants and simultaneously laying off the employees who were not transferred to the remaining plant; 2 and (3) changing the vacation plan applicable to Negro employees in the unit.' The Respondents contend (a) that an impasse in bargaining with regard to a manage- ment prerogative clause freed them to take unilateral- action, and (b) that the Union acquiesced in or waived the unilateral changes. Like the Trial Examiner, we reject these contentions. As to (a), there is no evidence that the parties, in negotiating with respect to the in- definite language of the management prerogative proposals, contem- Fleming Manufacturing Company, Inc., 119 NLRB 452, 464-465. See Industrial Fabricating Inc., et al., 119 NLRB 162. 168, 189-190; California Foot- wear Company, 114 NLRB 765, 766, enfd. sub nom. N.L.R.B. v. Jack Lewis, et al., d/b/a California Footwear Company d Trina Shoe Company, a Corporation, 246 F. 2d 886 (C.A. 9) ; Brown Truck and Trailer Manufacturing Company, Inc., et al., 106 NLRB -999, 1000-1002. 3Phelps, Dodge Copper Products Corporation, 101 NLRB 360, 369, 387-359. 125 NLRB No. 31. 360 DECISIONS OF NATIONAL LABOR RELATIONS BOARD plated the specific changes in question. The Trial Examiner in effect found, and we agree, that there was no impasse revealed in this record.4 Nor would an impasse, assuming arguendo it had existed, operate in the circumstances here to relieve the Respondents of their duty to bar- gain with respect to those changes.-' As to (b), although the Board has recognized that a union may waive certain of its statutory rights,, to be effective the waiver must be expressed in "clear and unmistaka- ble" language.' We find no effective waiver or acquiescence on the part of the Union' 2. We agree with the Trial Examiner that the Respondents also, violated Section 8(a) (3) and (1) by the above-mentioned change in vacation plan.' On August 26, 1957, before the representation elec- tion and the certification of the Union, the Respondents posted a notice which stated a general policy to eliminate racial discrimination in employment conditions, including bonuses, promotions, and vaca- tions, and formally announced that, effective January 1, 1958, Negro, employees having 1 year of continuous service would be granted 2 weeks' vacation, equal to that accorded white employees. As properly found by the Trial Examiner, the August 26, 1957, formal announce- ment was prompted by earlier general complaints from the Negro em- ployees, and was motivated by racial and not union considerations., In October 1957, the Union, having won the election, was certified by the Board. In July 1958, when the vacation season arrived for that year, the Respondents repudiated the August 1957 award of equal vacation benefits to Negro employees, allowing them only the pre- existing 1-week vacation after a year of service. The Respondents contend that they decided to rescind the 2-week vacation policy for Negro employees in order to avoid charges of in- terference with the representation election. However, the record plainly indicates that the Respondents posted no announcement, as they did in August 1957, or in any other manner, direct or indirect, disclosed to the employees such decision to rescind either before the election or at any time prior to July 1958. Nor was the Union ap- 6 Among other things, we note that in their last letter to the Union before effecting the first of these changes, the Respondents wrote: . . I [the Respondents' attorney] stated [at the last bargaining session] that . . . possibly the parties had reached a state, of impasse. . . . I added, however, that I was not stating that an impasse had been reached. . 6 See N.L.R.B. V. Crompton-Highland Mills, Inc., 337 U.S. 217; I.B.S. Manufacturing, Company, et al., 96 NLRB 1263, 1268, reversed on other grounds sub nom. N.L.R.B. v.. I.B.S. Mfg. Co., et al., 210 F. 2d 634, 637 (C.A. 5). 6 See Beacon Piece Dyeing and Finishing Co., Inc., 121 NLRB 953; International News Service Division of The Hearst Corporation, 113 NLRB 1067, 1070; California Portland Cement Company, 101 NLRB 1436, 1439; The Item Company, 108 NLRB 1634, 1640, enfd. 220 F. 2d 956 (C.A. 5), cert. denied 350 U.S. M6, rehearing denied 350 U.S. 905; Tide Water Associated Oil Company, 85 NLRB 1096, 1098. 7 See Langlade Veneer Products Corporation. 118 NLRB 985, 987-988; I.B.S. Manu- facturing Company, supra, p. 1268. s As the General Counsel conceded the economic motivation of the other unilateral action, only this change was alleged to be a violation of Section 8(a) (3) of the Act. INTRACOASTAL TERMINAL, INC., ETC. 361 prised before July 1958, of this withdrawal of vacation rights, even though there were nine collective-bargaining sessions between October 1957 and January 1958. The Respondents' president testified that he did not remember whether the decision to revoke was made before the Union was certified. On the entire record, we are in agreement with the Trial Examiner's rejection of the Respondents' contention and with his finding that the decision to repudiate was made after the election and the Union's certification. In all the circumstances, it is -clear and we find that the Negro employees had reasonable cause to believe that their 2-week vacation rights were denied not for racial reasons, but because the Union had become the employees' certified representative, and that such a belief was the natural and probable consequence of the Respondents' unilateral action.9 Accordingly, we find, as did the Trial Examiner, that the Negro employees were dis- ,criminated against within the meaning of Section 8(a) (3) and (1) of the Act. ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the Respondents, Intracoastal Terminal, Inc., and Louisiana Processing Company, Inc., Harvey, Louisiana, their officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Unilaterally terminating any portion of their business opera- tions in which employees in the appropriate unit work, or laying off such employees as a result of such termination, or changing the schedules of work or vacation rights of such employees, without first ,consulting General Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 270, or in any similar or related manner refusing to bargain collectively with said Union as the exclusive representative of all production and maintenance employees at the Respondents' operations in Harvey, Louisiana., including leadermen, crane opera- tors, hyster operators, maintenance men, welders, and laborers, but excluding all office clerical employees, professional employees, guards, watchmen, foremen, and all other supervisors as defined in the Act. (b) Discouraging membership in said Union, or in any other labor organization, by withholding or refusing to grant to employees paid vacations under the vacation plan announced by the Respondents August 26,1957. (c) In any other manner interfering with, restraining, or coercing 'employees in the exercise of the right to self-organization, to form labor organizations, to join or assist said Union, or any other labor A See Radio Officers, Union, etc. v. N.L.R.B., 347 U.S. 17, 45, 51 ; Summit Minting Corporation v. N.L.R.B., 260 F. 2d 894, 898 ( C.A. 3) ; Crosby Chemicals, Inc., 121 NLRB 412. 362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD organization, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights 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. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Upon request, bargain collectively with said Union as the ex- clusive representative of all employees in the above-described appro- priate unit, and embody in a signed agreement any understanding reached. (b) Make whole their Negro employees, in the manner set forth in the section of the Intermediate Report herein entitled "The Remedy',` for any loss of paid vacations they suffered by reason of the Respond- ents' discrimination against them. (c) Preserve and make available to the Board or its agents all pay- roll and other records, as set forth in the section of the Intermediate Report herein entitled "The Remedy." (d) Post at their plants at Harvey, Louisiana, copies of the notice attached hereto marked "Appendix A." 10 Copies of said notice, to be furnished by the Regional Director for the Fifteenth Region of the Board, shall, after being duly signed by the Respondents' authorized representative, be posted by the Respondents immediately upon re- ceipt 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 (e) Notify the Regional Director for the Fifteenth Region in. writing, within 10 days from the date of this Order, what steps the Respondents have taken to comply herewith. 10 In 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." APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, in order to effectuate the policies of the National Labor Rela- tions Act, we hereby notify our employees that : WE WILL NOT unilaterally terminate any portion of our business operations in which employees in the appropriate unit work, or lay off such employees as a result of such termination, or change the INTRACOASTAL TERMINAL, INC., ETC. 363 schedules of work or vacation rights of such employees, without first consulting General Truck Drivers, Chauffeurs, Warehouse- men and Helpers Local 270, or in any similar or related manner refuse to bargain collectively with said Union as the exclusive representative of all production and maintenance employees at the Respondents' operations in Harvey, Louisiana, including leadermen, crane operators, hyster operators, maintenance men, welders, and laborers, but excluding all office clerical employees, professional employees, guards, watchmen, foremen, and all other supervisors as defined in the Act. WE WILL NOT discourage membership in said Union, or in any other labor organization, by withholding or refusing to grant to employees paid vacations under the vacation policy announced by us on August 26,1957. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of the right to self-organization, to form labor organizations, to join or assist said Union, or any other labor organization, to bargain collectively through repre- sentatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights may be affected by an agreement requir- ing membership in a labor organization as a condition of employ- ment as authorized in Section 8(a) (3) of the Act. WE WILL, upon request, bargain collectively with said Union as the exclusive representative of all employees in the above-de- scribed appropriate unit, and embody in a signed agreement any understanding reached. WE WILL make whole our Negro employees for any loss of paid vacations they suffered by reason of our discrimination against them. All our employees are free to become or remain, or to refrain from becoming or remaining, members in good standing in said Union, or any other labor organization, except to the extent that this right may be affected by an agreement in conformity with Section 8(a) (3) of the Act. INTRACOASTAL TERMINAL, INC., LOUISIA eNA PROCESSING COMPANY, INC., Employers. 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. ,364 DECISIONS OF NATIONAL LABOR RELATIONS BOARD INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This proceeding, based upon the complaint of the General Counsel and the answer -of the Respondents, Intracoastal Terminal, Inc., and Louisiana Processing Company, Inc., involves alleged violations of Section 8(a)(1), (3), and (5) of the National Labor Relations Act, 61 Stat. 136. A hearing was conducted by the duly designated Trial Examiner in New Orleans, Louisiana, on January 20 and 21, 1959, at which all parties were represented. The Respondents' motion to dismiss is denied for the reasons appearing below. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENTS Intracoastal Terminal, Inc., and Louisiana Processing Company, Inc., are a single employer within the meaning of the Act. The former corporation is engaged at its plant at Harvey, Louisiana, in receiving, storing, and shipping oil field materials which are owned by its customers. The processing company, which is no longer .in business, was engaged in grinding and processing barium sulphate at its plant which adjoined the plant of Intracoastal. Although each Respondent is a separate legal entity, they have identical officers, their stock is owned by the same persons, -and their labor relations and overall policies were determined by the same individual. During 1956, Intracoastal performed services valued in excess of $100,000 for an oil company which annually ships products of more than $50,000 value directly to points outside the State of Louisiana. There is no dispute, and I find, that at times material the Respondents constituted a single employer and were engaged in com- merce within the meaning of the Act. II. THE UNFAIR LABOR PRACTICES A. Preliminary statement; the issues The complaint alleges, the answer admits, and I find that: (1) the Union (General Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 270) is a labor organization; (2) all production and maintenance employees at the Respondents' operations in Harvey, Louisiana, including leadermen, crane operators, hyster operators, maintenance men, welders, and laborers, but excluding all office clerical employees, professional employees, guards, watchmen, foremen, and other super- visors as defined in the Act, constitute an appropriate bargaining unit; and (3) on September 24, 1957, an election was held, following which, on October 2, 1957, the Union was certified as the exclusive bargaining representative of all employees in the unit. Upon various occasions following the election, representatives of the Respondents :and the Union met for negotiations. There is no allegation that the Respondents :refused to bargain in good faith upon those occasions. Instead, our issues are: (1) Whether the Respondents refused to bargain collectively with the Union when, about March 1, 1958, the Respondents changed the work schedules of employees, thereby depriving employees of overtime pay, without first notifying the Union of the contemplated change and affording the Union an opportunity to discuss the matter. This issue involves only an alleged refusal to bargain in violation of Section 8(a)(5). We do not have an allegation that the deprivation of overtime work was also a discrimination in violation of Section 8(a)(3). This is so because the Respondents' motive in changing the work schedules was economic. (2) Whether the Respondents refused to bargain collectively with the Union when, about May 30, 1958, the Respondents discontinued the operations of Louisiana Processing Company and simultaneously laid off a number of em- ployees in the appropriate unit, without first notifying the Union of the contemplated discontinuance of operations and affording the Union and an opportunity to discuss the matter. Again, we do not have an allegation that the layoff of employees was in violation of Section 8(a)(3) because the Re- spondents' motive in discontinuing operations and in laying off employees was economic. (3) Whether the Respondents refused to bargain collectively and invalidly discriminated against employees by changing the vacation plan for 1958, thereby INTRACOASTAL TERMINAL, INC., ETC. 365 depriving some employees of as much vacation as they allegedly were entitled to, without first notifying the Union of the contemplated change and affording. it an opportunity to discuss the matter. Here, unlike in the two issues above, the Respondents' motive allegedly was retaliation for the employees' selection, of the Union to represent them in collective bargaining. B. Chronology of events On August 26, 1957, while petitions were pending before the Board in Cases Nos.. 15-RC-1549 and 15-RC-1574, the Respondents posted a notice to employees, saying that complaints had been received from the Negro employees, that a meeting of all employees had been held, and that as a result the Respondent confirmed their policy of "preventing as far as possible discrimination against the colored employees on the basis of color alone." The notice announced that effective immediately all employees. would be eligible for bonuses on the same basis and that employees would be up- graded on the basis of ability, without regard to race. We do not have an issue con- cerning those two provisions. The notice contained a third provision, as follows,. which was not fulfilled: Effective January 1, 1958, all employees, regardless of race, will be entitled to. two weeks vacation after on year of continuous service. During 1957 white employees who had been at work for a year were entitled to a paid vacation of 2 weeks. Negro employees of like service were entitled to 1 week's paid vacation. Thus, the effect of the new vacation policy, had it been carried out, would have been to double the vacation periods of eligible Negro employees. On the day that the above notice was posted, the Board issued its Decision and Direction of Election in the representation cases. On September 24, 1957, an election was held. Of 62 votes cast, 43 were in favor of the Union. There is no allegation or evidence that the Respondents' announced intent to end racial discrimination in em- ployment was motivated by a desire to cause the Union's defeat in the election. In- stead, as the Respondents said, they were motivated by the Negroes' complaints, against the unequal working conditions. On October 2, 1957, the Board certified the Union. During the remainder of the year, representatives of the Respondents and the Union met in eight bargaining ses- sions. Proposals and counterproposals were exchanged, discussions took place, but. an agreement was not reached. On January 10, 1958, the ninth session occurred. It too was unfruitful and later that day the Respondents wrote to the Union, saying that "possibly the parties had reached a state of impasse," that it would be useless to continue negotiations if the Union agreed, that the Respondents did not insist that there had been an impasse, and that the Respondents were willing to continue negotia- tions and to execute a contract embodying provisions upon which there had been. agreement. The Union did not respond to that letter and there was no further written communication between the Respondents and the Union until July 1958, as. described below. Prior to July, however, the unfair labor practices occurred. We next consider the factual situations relating to those practices, following which we turn to the resumption in negotiations. During 1957 and earlier, the Respondents were open for business 24 hours a day.. Work was so plentiful that sometimes employees were afforded opportunities to work a 7-day week with overtime pay above 40 hours. During early 1958, however, the volume of business decreased substantially. Adjustments became necessary. The General Counsel asserts that about March the Respondents unilaterally changed the work schedules of employees and deprived them of overtime pay for work on week- ends. According to the General Counsel, the regular workweek had been Monday through Friday, with overtime pay for work in excess of 40 hours, but the work schedules were changed so that employees were laid off on Mondays and Tuesdays. and were required to work on Wednesdays through Sundays without any overtime pay. Two witnesses, James Williams and Edward Landry, employees, testified in support of the General Counsel's contention, but the record does not warrant a find- ing that the adjustment affected every employee in the same manner. Lewis E. Hooper, president of the Respondents, testified that economic conditions made it necessary to lay off some employees and to eliminate overtime work, and that an. effort was made to divide the available work among the remaining employees so that each would receive 40 hours at his regular rate of pay. While Hooper's testi- mony is not always to be credited for reasons appearing herein, in this instance it receives support in the testimony of Williams. Thus, Williams testified that some- employees continued to work on Mondays through Fridays as theretofore, that the employees who did not work on Mondays and Tuesdays were afforded work on Satur-- 366 DECISIONS OF NATIONAL LABOR RELATIONS BOARD days and Sundays, and that the Respondents continued to pay overtime rates to em- ployees who worked more than 40 hours during a week . As we have seen, the Respondents' places of business were open around-the -clock, and in their brief they say: The services which respondents furnish their customers require that a work force be available seven days a week. . . . With the slowdown in respondents volume of business, the available work was spread out among all of the employees so that each would have, to the full extent possible, at least forty hours a week. This required that some employees work on Saturday and/or Sunday at straight time rates without overtime.. . . The record is clear that the reduction in overtime work and the change in the regular days of work for some employees were made by the Respondents unilaterally, without notice to the Union or opportunity to it to discuss the matter. The question, to be decided under "Conclusions" below, is whether the Respondents' failure to take up the matters with the Union was a refusal to bargain collectively. About May 30, 1958, without notice to the Union, Louisiana Processing Company went out of business. As we have seen, the bargaining unit was composed of em- ployees of both Respondents. Some employees who had worked for the processing company were transferred to the payroll of the other Respondent and continued at work. About six employees, who had the least seniority among employees in the unit, were laid off. Prior to the Board's Decision and Direction of Election above mentioned, each Respondent had maintained a separate payroll and, according to Hooper, had treated the employees "as two separate units." i During negotiations in 1957 following the Board's decision, as the Respondents say in their brief, they "proposed a seniority provision which reflected the two companies as separate departments. . [but] The union's proposal, on the other hand, was for a single seniority list." Neither party would agree to the other's proposal and the seniority issue was not resolved? Later, when layoffs occurred with the processing company's termination of business, they were consistent with the proposal which the Union had made that layoffs be according to low seniority in the single bargaining unit. The question to be dis- cussed under "Conclusions" below is whether the Respondents were obligated to afford the Union an opportunity to discuss the subjects before the termination of business and layoffs were decided upon. At the outset of this factual recital, we saw that during August 1957 the Re- spondents posted a notice to employees that, effective January 1, 1958, vacations would be awarded without discrimination because of race. We saw, too, that the effect of such change in vacation policy was to double the vacation periods of Negro employees. During 1958, however, the white and colored employees received un- equal vacations as in past years. The Respondents made no written or oral an- nouncement that the vacation provision of the notice of August 1957 was being re- scinded. The Respondents simply kept silent and it was not until the summer of .1958, when vacations were being scheduled, that the Negro employees learned that they would not receive vacations of 2 weeks. The record does not disclose the date of the Respondents' decision to repudiate the vacation provision of the notice of August 1957. Hooper, their president, testified that the Board's direction of election was re- ceived after the notice was posted, that he understood that any change in working conditions, whether to the employees' benefit or detriment, "would be looked upon in the same light as some intimidation or some act of reprisal," and that "rather than get involved in a situation where we could be charged with trying to entice [the em- ployees] in the election," the Respondents decided not to carry out the new vacation policy. The quoted testimony indicates that the decision to continue a racially dis- criminatory vacation policy was made before the election, but such conclusion is not warranted. This is so because the Respondents did not inform the employees of ;their decision and, therefore, did nothing to remove the possible "enticement" of em- ployees which Hooper professed to have seen in the notice. Moreover, Hooper also I Although the employees were so regarded by the Respondents, it does not appear that there had been occasions to lay off employees. 2 Hooper testified under rule 43(b) that, following the Board's decision, the Respondents no longer considered the employees as being in separate units. I discredit that testimony. Hooper was an argumentative witness who sought to avoid disclosure of information by professing a lack of recollection or knowledge. Moreover, James C. Rogers, a representa- tive of the Union, testified without contradiction that during negotiations Attorney Read proposed for the Respondents that there be separate seniority lists. Rogers' testimony, -coupled with the Respondents' written proposal, discredits Hooper's testimony. INTRACOASTAL TERMINAL, INC., ETC. 367 testified that he could not remember whether the decision was made before the Union was certified. I conclude that the decision was made sometime after the election 3 Under "Conclusions" below, we consider whether repudiation of the new vacation policy was discrimination in violation of Section 8(a) (3) as well as a refusal to bar- gain in violation of Section 8(a) (5). We now resume the discussion of the negotiations between the Respondents and .the Union. The last bargaining session mentioned above was on January 10, 1958. The next bargaining session was on September 23, following the unilateral changes in working conditions. Although the record contains testimony concerning two telephone conversations of undisclosed dates, along with exchanges of correspondence .during July, all of which relate to the inability of those parties to agree upon a mutually satisfactory date before September 23 for a resumption of negotiations, the testimony and the contents of the correspondence need not be recited. This is so because we do not have an allegation that the Respondents were dilatory in .meeting with the Union or sought to escape bargaining sessions. It suffices to say that negotiations resumed on September 23, that thereafter two or three sessions were held with the services of Federal mediators, and that no agreement was reached. C. Conclusions Before discussing the Respondents' failure to take up with the Union the matters set out above, it should be noted that the Respondents' duty to bargain with the Union continued for 12 months after the certification and that the 12-month period had not expired at any material time. Clark & Lewis Co., 122 NLRB 865. It should be noted too that the Respondents assert that an impasse in negotiations was reached by the date of the bargaining session in January 1958 and that all alleged unfair labor practices occurred thereafter. On the other hand, the General Counsel asserts that it is immaterial under the circumstances of this case whether there was an impasse. I agree with the General Counsel. I find, however, that the record 'does not contain evidence concerning the details of the bargaining sessions, that one cannot determine the precise issues upon which an impasse may have occurred, and that it may be assumed arguendo that an impasse was reached on a contract as a whole. But the existence of an impasse does not necessarily present a meritorious defense here. As the Board said in Central Metallic Casket Co., 91 NLRB 572: It is true that ordinarily a good faith bargaining impasse connotes the futility of further negotiations and, in the case of the employer-party to the collective relation, leaves that employer free to take certain economic steps not dependent upon the mutual consent of the union. . . The existence of the bargaining impasse does not destroy . . . the authority -of the representative to act within the sphere of its representation Ac- cordingly, as we have frequently held, a bargaining impasse does not relieve an employer from the continuing duty to take no action which the employees may interpret as a "disparagement of the collective bargaining process" or which amounts in fact to a withdrawal of recognition of the union's representa- tive status or to an undermining of its authority. . . . 1 The changes in work schedules; the cessation. of business by one Respondent We have seen that the Respondents, faced with a decrease in the.volume of their business, unilaterally changed the work schedules of some employees and sharply curtailed overtime work about March 1, 1958, and terminated the operations of Louisiana Processing Company and laid off employees about May 30, 1958. In defense, the Respondents contend that the changes in. work schedules were so in- substantial that they were not required to discuss the subjects with the Union. It is well settled, however, that regular and overtime hours of work are vital aspects of a During negotiations in late 1957 the Respondents proposed that all employees of 1 year's service receive vacations of 1 week and that those of 3 years' service receive vacations of 2 weeks. The substance of that proposal, which was unacceptable to the Union, was (1) that racial discrimination in vacations be eliminated, and ('2) to decrease the vacation period of white employees whose length of service was 1 or 2 years. The Respondents say in their brief : The 'respondents' plan . . . proposes the same vacation for the colored and the white employees. This proposal . . . was not necessarily a statement of the full extent to which the employer was prepared to go in negotiations . . . . If, at the time of this. proposal, the Respondents had given thought to repudiating the new vacation policy, they failed to tell the Union. 368 DECISIONS OF NATIONAL LABOR RELATIONS BOARD working conditions and that economic necessity does not excuse an employer's failure to discuss changes with the employees' representative. Fleming Manufacturing Coin- pany, Inc., 119 NLRB 452. The Respondents also contend that the Union, by its failure to respond to the Respondents' letter of January 10, 1958, in which the Respondents suggested that additional negotiations might be useless, showed a lack of interest in negotiating further. This contention also does not present a meritorious, defense. Although the Union did not respond to that letter, it did not otherwise in- dicate a lack of interest in its position as the employees' bargaining representative. In particular, the Respondents could not reasonably assume that the Union, ignorant of the Respondents' plans, would be uninterested in learning of, and in bargaining about, sharp curtailments of overtime work, changes in the workweek of some em- ployees so that they were required to work on weekends and to take their days of rest during normal workweeks, and the cessation of business by one of the Respond- ents with resulting layoffs of employees. Finally, the Respondents, pointing to their assertion that an impasse in negotiations had been reached, say that the changes in working conditions were consistent with a proposal which they had submitted to the Union during negotiations and which the Union had rejected. I disagree. That proposal, which is of the type commonly called a "management prerogative clause," provided inter-alia that there was no guarantee of a particular quantity of work to employees and that the Respondents reserved the right to curtail the labor force, to reduce the hours of work, and to determine the schedules of work. While it may be that the Respondents' proposal encompasses within its literal language such sweeping changes as the Respondents unilaterally established later, there is no evi- dence that the discussions of the proposal during negotiations were detailed or em- braced such changes. Indeed, it does not appear that during the negotiations in late 1957 and early 1958 the Respondents even envisioned drastic cutbacks in their businesses. Under these circumstances, it cannot be said that the Respondents put into effect unilateral changes in working conditions which they had proposed to the Union. I find that the effectuation of such changes without a word of notice to the Union amounted to a withdrawal of recognition from the Union and to an under- mining of its authority as the employees' representative, in violation of Section 8(a)(5) and (1).4 The complaint also alleges that the Respondents, in laying off employees when the processing company ceased business, unilaterally changed the established seniority system. As noted above, the Respondents had maintained separate payrolls and had treated the employees "as two separate units" before the Board's decision in the representation cases. The alleged change in the seniority system was in selecting employees for layoff according to their respective seniorities in the appropriate unit which consisted of employees of both Respondents. On the other hand, the Respond- ents assert that no change in a seniority system for layoffs has been shown because there is no evidence that a different system ever was used. The Respondents assert too that the employees who were laid off when the processing company ceased business were selected upon the seniority basis which the Union had proposed during negotiations. I do not believe that we need decide the allegation that there was a unilateral change in the Respondents' seniority system. The material facts are that the Respondents closed down a part of their operations and simultaneously laid off employees without notice to the Union. The unfair labor practice lies in the failure to afford the Union an opportunity to bargain collectively about these matters. It may be observed, however, that it is no defense that the system of select- ing employees for layoff had been proposed by the Union. Cf. D. D. Thomas, et al., d/b/a Thomas Brothers Wholesale Produce, 79 NLRB 982. On this and other issues, the Respondents cite various rulings by the General Counsels of the Board in their determinations not to issue complaints. The opinions of a General Counsel, the prosecuting arm of the Board, in issuing or refusing to issue a complaint, are not authority in the determination of issues before the Board. The Respondents also cite Speidel Corporation, 120 NLRB 733, in which the issue was the employer's payment of a bonus to some employees, and its failure to pay a bonus to other employees, during the life of a collective labor agreement. The Board held that during negotiations preceding the execution of the agreement the labor organization had acquiesced in the employer's position that bonuses were a "management prerogative," that there had been "a clear understanding between the parties that the subject of the bonuses would remain a 'management prerogative'," and that the labor organization thereby had "bargained away" or waived its interest in the subject of bonuses. The factual situation there is substantially at variance with our situation where the Respondents kept the Union in ignorance of changes to be made in working conditions. INTRACOASTAL TERMINAL, INC., ETC. 369 2. The Respondents' repudiation of the policy eliminating racial discrimination in vacations This issue involves the Respondents' unilateral repudiation of its announcement to employees that during 1958 the colored employees would be granted vacations upon the same basis as the white employees. As noted, the Respondents' decision to repudiate was not communicated to the employees until vacations were scheduled during the summer of 1958. Unlike the other issues discussed above, this issue involves an alleged violation of Section 8(a)(3) as well as Section 8(a)(5). The latter will be decided first. In defense, the Respondents argue that since the nondiscriminatory vacation policy was not to become effective until 1958, it did not become effective at all and that the racially discriminatory policy remained in effect. This defense must be rejected. From August 1957 when the nondiscriminatory policy was announced until the summer of 1958 when colored employees learned that they would not receive vaca- tions on an equal basis with white employees, that policy was calculated to serve as an inducement to colored employees to continue in the Respondents' service. The nondiscriminatory vacation policy was as much a condition of employment as any benefit previously enjoyed by employees. Cf. Armstrong Cork Company v. N.L.R.B., 211 F. 2d 843 (C.A. 5), enfg. 103 NLRB 133. The Respondents also assert that they would have been properly subject to a charge of having violated the Act if they had carried out the nondiscriminatory policy. The Respondents are mistaken. No party to this case contends that the Respondents had an invalid motive in announcing the end of its racial discrimina- tion. Since the motive for the nondiscriminatory policy was to rectify the com- plaints of Negroes against racial discrimination in employment, and since the motive was not to interfere with the employees' preelection activities, the Respondents were free to formulate and announce the new policy. Cf. Burns Brick Company, 80 NLRB 389. Once the new policy was announced, it became a condition of employ- ment notwithstanding that no colored employee would receive a vacation equal to the vacations of white employees until the following year. This is so for the reasons recited in the paragraph next above. Nevertheless, the Respondents, if not moti- vated by union considerations, were free to unilaterally repudiate the new policy so long as the employees were not represented by a collective-bargaining agent. When, however, sometime following the certification of the Union, the Respondents chose to repudiate the new policy by granting 1958 vacations on the old basis, their obligation was to inform the Union and to afford it an opportunity to bargain on the subject. Cf. Phelps Dodge Copper Products Corporation, 101 NLRB 360. Instead, the Respondents remained silent. I find that the Respondents, by unilaterally. repudiating the new vacation policy, violated Section 8(a) (5) and (1).5 The remaining issue is whether the Respondents' failure to carry out the new vacation policy was discrimination in violation of Section 8(a)(3). The complaint alleges that the Respondents repudiated the new policy because the employees had se- lected the Union as their representative and in order to discourage union membership and activities. In analyzing this issue, we begin with the facts that in 1957 and earlier the Respondents treated colored employees differently than white employees in the matter of vacations and that in August 1957 the Respondents' announcement of a nondiscriminatory vacation policy was made because the Negroes had com- plained, not because the Negroes were active in the Union. If the discrimination had been resumed in 1958 for the reason which caused it in earlier years, that is, because the Negroes are not Caucasians, there would have been no violation of Section 8(a)(3) because the discrimination in 1958 would have been founded in race, not "to encourage or discourage membership in any labor organization." But, 5It may be noted that, if the Respondents had proposed to the Union that the old policy be reinstated, the Union could not lawfully have agreed. This is so because the Union's position as the statutory representative of employees requires that it not agree to discrimination in employment based upon race. Whitfield, at at. v. United Steel- workers of America, et al., 263 F. 2d 546 (C.A. 5). But the fact that the Union would have been required to take a position contrary to that of the Respondents, If the Respond- ents had fulfilled their duty to inform the Union of the contemplated return to the old vacation policy, does not excuse the Respondents' failure .to inform it. Who can say what would have been the result of bargaining upon the subject? Perhaps the Union, in the give-and-take of bargaining, could have persuaded the Respondents to adhere to the new policy. Perhaps not. But only after good-faith bargaining to an impasse on the subject of racial discrimination in vacations would the Respondents have been entitled to unilaterally reinstate the old policy. 370 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as the Respondents in effect acknowledge, they reneged upon' their promise of equal`-' vacations because the Union had become the employees' representative-in other words, the Respondents would not have reneged if the Union had not been in the pic- ture, Two questions are presented. Were the Respondents, in renewing the racial discrimination, motivated by a deliberate intent to ' retaliate ' against employees for having designated the Union as their representative? If not, was the Respondents'` action. nevertheless violative of Section 8(a)(3) because it discouraged membership, in the Union? The General Counsel would answer each question in the affirmative. There is no evidence to show the number of Negroes in the bargaining unit, or` whether any of them was active in behalf of the Union or was so regarded by the' Respondents. Nor is there evidence that any representative of management said to, anyone that the renewal of racial discrimination in vacations was motivated by the action or votes of any Negro employees. In fact, there is no evidence of any inde- pendent violation of Section 8(a) (1). Although one may infer that the Respondents. were hostile toward the process of collective bargaining because the Respondents vio- lated Section 8(a)(5) as found above, in the absence of other supporting evidence- I cannot infer that the Respondents' renewal of racial discrimination in vacations was founded in a belief that Negro employees had been active in behalf of the Union. Accordingly, the first question is answered in the negative. Turning to the second question, the General Counsel contends "that where an employer takes action detrimental to the employees' working conditions, which action. would not have been taken but.for the organizational activities of employees, the action inherently discourages such activities although the employer may have acted in good faith. I agree that under the facts here a violation of Section 8(a) (3) must be found. At first glance it may seem that we have a unique situation where race discrimination is alleged and found to be violative of the Act. But that is not so. It is true that race was the cause of the original discrimination. But that cause ended with the announcement of the new vacation policy. When the Respondents' later repudiated that policy, they acted because of the presence of the Union, not because of the race of any employees. It follows that the Negro employees had no cause to believe in 1958 that their race was again the reason for discrimination in. vacations, but had cause to believe that the Union's presence was the reason. That . being so, I cannot.escape the conclusion that the Respondents' repudiation of the new policy had. a natural tendency to discourage Negro employees from joining the Union. . Cf. The Radio Officers' Union of the Commercial Telegraphers Union v. N.L.R.B., 347 U.S. 17, 74 U.S. 323. It matters not that the record is silent upon the subject of union activities by Negro employees. Even if no Negro was inter- ested in union representation before the Respondents' repudiation of the new policy, the fact remains that a natural tendency of the repudiation was to discourage union membership by Negro employees in the future. Cf. Radio Officers' Union, supra; Summit Mining Corporation v. N.L.R.B., 260 F. 2d 894 (C.A. 3), enfg. 119 NLRB. 1668. It also matters not that,the Respondents may have acted in good faith, be- lieving that adherence to the new policy would have been violative of the Act. If the Respondents so believed, they were mistaken .6 The doctrine that good faith does not excuse an unfair labor practice is well settled. Radio Officers' Union, supra.. I. find that the Respondents violated Section 8 (a)(3) and (1) of the Act. III. THE EFFECT OF' THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section II, above, occurring in con- nection with the operations of the Respondents described in section I, above, have a close, intimate, and substantial relation to trade, traffic and commerce among the several. States, and tend to lead. to labor disputes burdening and obstructing com- merce and the free flow of commerce. IV. THE REMEDY Having found that the Respondents have engaged in certain unfair labor practices, I shall recommend that they cease and desist therefrom and that they take certain affirmative action designed to effectuate the policies of the Act. In particular, I shall recommend that each Negro employee who was entitled to a paid vacation of 2 weeks in 1958, but who received a paid vacation of only 1 week, be made whole' for the discrimination against him by being given (1) an additional week's vacation with pay in 1959, or in the alternatve, (2) an amount of money equal to his weekly pay. If any such employee be no longer at work for the Respondents, he shall be made whole by the alternative method. I shall recommend also that the Respondents 6 The General Counsel does not concede that the Respondents acted in good faith. FORT WORTH STEEL AND MACHINERY COMPANY 371 preserve and make available to the Board or its agents, upon request , for examina- tion and copying, all payroll records, social security payment records, timecards, per- sonnel records and reports, and all other records necessary to analyze the amounts of vacation pay due under the terms of these recommendations . I shall recommend further, in order to make effective the interdependent guarantees of Section 7 of the Act, that the Respondents cease and desist from , in any manner, infringing upon the rights guaranteed in said Section. N.L.R.B. v. Express Publishing Co., 312 U.S. 426; N.L.R.B. v. Entwistle Mfg. Co., 120 F. 2d 532 (C.A. 4). Upon the basis of the above findings of fact , and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Union is a labor organization within the meaning of Section 2(5) of the Act. 2. All production and maintenance employees at the Respondents' operations in Harvey, Louisiana, including leadermen , crane operators, hyster operators, main- tenance men, welders, and laborers, but excluding all office clerical employees, pro= fessional employees , guards, watchmen, foremen, and other supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. The Union, on October 2, 1957, was, and at all times thereafter has been, the exclusive representative of all employees in such unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 4. By refusing to bargain collectively with the Union as the exclusive representa- tive of their employees in an appropriate unit, the Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 (a)(5) of the Act. 5. By discriminating in regard to the hire and tenure of employment of employ- ees, thereby discouraging membership in a labor organization, the Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 6. By interfering with, restraining, and coercing their employees in the exercise of the rights guaranteed in Section 7 of the Act, the Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2 (6) and (7) of the Act. . [Recommendations omitted from publication.] Fort Worth Steel and Machinery Company and International Molders and Foundry Workers of North America, AFL-CIO, Local #2. Case No. 16-CA-1203. November 25, 1959 DECISION AND ORDER On June 18, 1959, Trial Examiner Eugene K. Kennedy issued his Intermediate 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 Intermediate Report attached hereto. Thereafter the Respondent filed exceptions to the Intermediate Report and a supporting brief. 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 [Members Rodgers, Jenkins, and Fanning]. 125 NLRB No. 26.