Atlantic Research Corp.

ATLANTIC RESEARCH CORP., DESOMATIC PRODUCTS DIV. 285 WE WILL NOT interrogate employees concerning their union activities, ask employees to report to management concerning the union activities of other employees, tell employees that they will be discharged for union activities, or tell employees that their union activities are under surveillance by management. WE WILL NOT in any other manner interfere with, restrain, or coerce our em- ployees in the exercise of their right to self-organization, to form, join, or assist any labor organization, to join or assist Textile Workers Union of America, AFL-CIO, 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, and to refrain from any or all 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 National Labor Relations Act. WE WILL offer Robert E. Wright immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority and other rights and privileges, and make him whole for any loss of pay he may have suffered as a result of the discrimination against him. All our employees are free to become, or remain, or to refrain from becoming or remaining members of any labor organization, except to the extent that this right may be affected by an agreement executed in conformity with Section 8(a)(3) of the Act. BURLINGTON INDUSTRIES, INC., VINTON WEAVING COMPANY PLANT, Employer. Dated------------------- By------------------------------------------- (Representative) (Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. Employees may communicate directly with the Board's Regional Office, 707 North Calvert Street, Sixth Floor, Baltimore, Maryland, Telephone No. 752-8460, Ex- tension 2100, if they have any question concerning this notice or compliance with its provisions. Atlantic Research Corporation, Desonlatic Products Division and International Union of Electrical , Radio and Machine Workers, AFL-CIO. Case No. 5-CA-2183. August 27, 1963 DECISION AND ORDER On May 6, 1963, Trial Examiner Paul Bisgyer issued his Interme- diate Report in the above-entitled proceeding, finding that the Re- spondent had not engaged in the unfair labor practices alleged in the complaint and recommending that it be dismissed, in its entirety as set forth in the attached Intermediate Report. Thereafter, the Gen- eral Counsel and the Charging Party filed exceptions to the Interme- diate Report and a supporting brief, and the Respondent filed a reply 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 [Chairman McCulloch and Members Rodgers 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 Interme- diate Report, the exceptions and briefs, and the entire record in this 144 NLRB No. 39. 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD case and hereby adopts the findings, conclusions, and recommenda- of the Trial Examiner. [The Board dismissed the complaint.] INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This proceeding was heard by Trial Examiner Paul Bisgyer on October 9 and 10, 1962, in Washington, D C., on the complaint of the General Counsel issued on the basis of a charge filed on June 1, 1962, and the answer of Atlantic Research Cor- poration, Desomatic Products Division, herein called the Respondent or Desomatic. The issue litigated was whether the Respondent, in violation of Section 8(a) (5) and (1) of the National Labor Relations Act, failed to perform its statutory duty to bar- gain in good faith with International Union of Electrical, Radio and Machine Workers, AFL-CIO, herein called the Union, the duly certified representative of the Re- spondent's employees in an appropriate unit, with respect to rates of pay, wages, hours, and other conditions of employment. The parties waived oral argument. Thereafter the General Counsel and the Respondent filed briefs which were carefully considered. The Respondent's motion to dismiss the complaint, on which I reserved decision at the hearing, is now granted in accordance with my findings and conclu- sions set forth below. Upon the entire record and from my observation of the witnesses, I make the following: FINDINGS AND CONCLUSIONS 1. THE BUSINESS OF THE RESPONDENT The Respondent, a Virginia corporation, is engaged in the manufacture of indus- trial dehumidifiers and other products at its Desomatic Products Division in Alex- andria, Virginia. It annually receives at this plant shipments of goods valued in excess of $50,000 directly from points located outside the Commonwealth of Virginia. The products manufactured in this plant valued in excess of $50,000 a year are shipped to points outside that State. Accordingly, I find that the Respondent is engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act and that it will effectuate the policies of the Act to assert jurisdiction herein. If. THE LABOR ORGANIZATION INVOLVED It is not contested, and I find, that the Union is a labor organization within the meaning of Section 2 (5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The evidence' 1. The Union's certification; summary of subsequent events Pursuant to a consent election held on February 23, 1962,2 the Union was certified on March 7 as the exclusive bargaining representative of the Respondent's employees at its Desomatic Products Division, excluding office clerical employees, salesmen, guards, watchmen, professional employees, and supervisors as defined in the Act. Desomatic is one of about 12 divisions located at the Respondent's Edsal Road industrial complex in Alexandria, Virginia,3 and employs about 30 employees in the bargaining unit. As of the time of the hearing, Desomatic was the only division the Union had organized.4 The Union's campaign to organize employees of other i Unless otherwise indicated, the factual findings herein are based on substantially un- contradicted testimony. 2 All events herein occurred in 1962 "In addition to the divisions in this industrial complex, the Respondent also owns and operates Prewitt Plastics Division which is located some 300 yards from Desomatic • a part of Solid Propellant Division which is in Gainesville, Vir R+inia ; Sloane Division and U.S Flare Division, which are in California, and Northeastern Division in New Hampshire. 4 The only other unionized division In the Respondent's entire operation Is the Sloane Division in California which is under a collective-bargaining contract with the Rubber Workers Union ATLANTIC RESEARCH CORP., DESOMATIC PRODUCTS DIV. 287 divisions, which was in progress during the contract negotiations for Desomatic em- ployees related below, has not met with similar success. Shortly after its certification, the Union sent the Respondent a letter requesting negotiations. Enclosed therein was the Union's proposed contract which contained some 35 articles embracing a wide range of subjects commonly found in collective- bargaining agreements, including a demand for a general wage increase of 30 cents an hour and other economic benefits. The proposed contract served as a basis for discussion at the ensuing bargaining sessions which began on March 21 and continued through May 17. In all the parties held nine meetings during this period,5 the last two being attended by a Federal conciliator. Because of the parties' inability to reach agreement on a contract, the Union broke off negotiations on the latter date. In an effort to resolve fundamental differences, a so-called "summit" meeting between Dr. Sloan, chairman of the Respondent's board of directors, and Mr. Hartnett, secretary- treasurer of the Union, was held 2 weeks later at the suggestion of the Federal con- ciliator. This, too, proved fruitless. Thereafter, on June 1 the Union filed the charges herein with the Board, alleging that the Respondent unlawfully refused to bargain in good faith with the Union. Following the filing of the charges and for about 4 months, contract negotiations remained in a state of suspension. During that period, the Respondent notified the Union that, in accordance with its established pay review procedures, it recommended a number of employees for merit increases. The Union assented or did not object to the contemplated increases mentioned in the earlier notifications. However, it requested negotiations with respect to the later proposed increases. Also during this hiatus in bargaining, the Respondent, after securing the Union's approval, created a leadman job classification and promoted four employees to those jobs and made available to Desomatic employees the benefits of a newly acquired companywide accident insurance plan. On September 26, at the Union's request,6 a final meeting was held which also was unproductive. Substantially the same matters that caused a stalemate in the earlier negotiations between the parties were stumbling blocks to this renewed attempt to reconcile their differences. The General Counsel attributes this inability to achieve agreement to the Respond- ent's bad-faith bargaining. He urges that this attitude is reflected in the positions the Respondent took at the bargaining table relating to merit increases, overtime after 8 hours work in a day, holidays, vacations, and the Christmas bonus; its disposition to take unilateral action; and its disparagement of the Union and its officers in literature it distributed or posted in the Desomatic shop while the Union was seeking to organize other divisions of the Respondent. These matters will be separately treated below. 2. The Respondent's bargaining positions There is no question that the Respondent was willing to, and at all times did, confer with the Union when requested to do so. It is equally clear that the Re- spondent discussed all propsals put on the bargaining table, fully explained its positions and offered counterproposals dealing, not only with the subjects to be considered below, but also with such matters as the scope of arbitration, hours, call-in pay, restrictions on work that supervisors and nonunit employees may perform, premium pay for Saturday and Sunday work, and job classifications. As a result of the negotiations, the parties were able to agree on some items and to concur in principle on others with details to be worked out in later negotiations. However, they were far apart on many other matters, including a general wage increase, other monetary items, arbitration, and checkoff. As indicated above, the General Counsel singles out the Respondent's positions with respect to five subjects as demonstrating an attitude of disregard of its statutory bargaining obligation. We now turn to these subjects. a. Merit increases One of the most serious obstacles to agreement was the parties' irreconcilable dif- ferences respecting merit increases. Upon acquiring the Desomatic plant in 1961, the Respondent instituted a formalized merit pay review system as a method of evaluating an employee's work performance for the purpose of determining his 5 These meetings were held on March 21 and 29; April 3, 4, 10, 24, and 25; and May 16 and 17. e Apparently due to a misunderstanding between International Representative John R Sullivan, the chief negotiator for the Union, and James W. Crowley, manager of the Respondent's legal department, as to whether Sullivan had conditioned the resumption of negotiations upon the Respondent's changing its bargaining position with respect to merit increases, there was a short delay in reopening negotiations 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD eligibility for a wage increase. Under this system, the employee is rated regularly at 7-month intervals on the basis of quality of work, quantity of production, depend- ability, judgment, cooperation, and potentiality.? Area wage standards are also taken into consideration, as well as the nature of the employee's duties in order to correct inequities due to a large extent to the absence of job classifications. This latter situation was remedied during negotiations by the parties' ability to agree upon job descriptions for all but about two classifications. Extensive discussions were had on the subject of merit increases and the Union's related wage demands. The Union proposed a general wage increase 8 and provision for certain automatic increases. The Respondent's response was to reject any idea of a general wage raise, although it was prepared to give certain increases to adjust inequities. Instead, it insisted on reserving to itself as a management prerogative the right to grant individual periodic merit increases pursuant to its established pay review system, which it urged was basic to its philosophy of rewarding meritorious performance.9 It, however, offered to discuss and negotiate with the Union every contemplated increase and the amount, explain the reasons, and consider the Union's position. Because of its fundamental opposition to the theory of individual merit increases, the Union refused to accept the Respondent's proposal. It expressed the firm view that the Respondent's offer to negotiate merit increases, as indicated above, was not realistically an offer to bargain, as the Union understood bargaining to be, for the reason that the Respondent retained the final word on whether or not to grant an increase. However, the Union's chief negotiator, International Representa- tive John R. Sullivan, stated that the Union could go along with individual merit increases if the Respondent would agree to submit to arbitration, or to some "other effective negotiating means," any controversy involving the Respondent's decision to grant or refuse an increase. Although the Respondent was amenable to resolve other disputes by arbitration and offered a written proposal to that effect, it refused to relinquish to an arbitrator or other third party its right finally to decide, after discussion with the Union, whether or not an employee was entitled to a merit in- crease, with one exception, where a charge of discrimination, as defined in the Union's proposed contract, was involved. In the latter event the Respondent was willing to go to arbitration. At the last bargaining session which resumed on September 26, the Respondent modified its earlier proposal to agree to a three-step automatic progression to a fixed job rate and restricting a given merit increase to an amount not in excess of 10 percent of the job rate. The proposed modification was not acceptable to the Union which adhered to its position that "some effective way to appeal . . . [the Respondent's] decisions" had to be provided if negotiations under the Respondent's proposal could be "fruitful." It is also noted that throughout the negotiations the criteria for determining eligibility for a merit increase under the Respondent's system were never questioned by the Union because, as Sullivan testified, "we never agreed to merit increases" as such. b. Overtime in excess of 8 hours a day As of the time of the hearing, the Respondent's business has been predominantly of a Government nature. Under the Walsh-Healey Act, only such work, as dis- tinguished from private work, performed by employees in excess of 8 hours a day must be compensated at the rate of time and a half. Because a small percentage of its business has been private, the Respondent has found it infeasible to maintain 7If an individual does not receive a rating entitling him to a wage increase, he is put on what is called a consideration list and his work performance is reviewed every 30 days until a change is made. 8 Originally, the Union requested a 30-cent-an-hour wage increase across the board from which it later receded at one of the bargaining sessions in favor of a 15-cent economic package. Presson Shane, the Respondent's vice president in charge of Desomatic, admitted that he indicated at that meeting that the 15-cent package looked attractive to him. However, according to his uncontradicted testimony which I credit, after being advised by the Respondent's other negotiators that the Union's certification and checkoff demands were still open questions, Shane immediately asked International Representative Sullivan for his position on those matters and when Sullivan declined to commit himself, Shane became noncommittal on the economic package. 9 A. provision in the Respondent's contract with the Rubber Workers Union covering the Company's employees at the Sloane Division in California recognizes the Company's right to grant increases "within the merit range" on the basis of the Company's evaluation of the employees' performance. That contract also provided that the granting or failure to grant a merit increase may not be a basis of a grievance subject to the grievance procedure. ATLANTIC RESEARCH CORP., DESOMATIC PRODUCTS DIV. 289 separate work records. As a result it has been its practice to pay its employees time and a half for all work over 8 hours a day, whether Government or not. In the negotiations the Union insisted that the Respondent write this practice into the contract. The Respondent agreed but with the qualification that provision be made for the contingency-not immediately foreseeable-when the proportion of private work materially increased, in which event it would be free to eliminate premium rates for that type of work. The Union, however, declined to accede to this qualification. 10 c. Holidays It has been the Respondent's practice to recognize eight holidays as so-called observable holidays when the plant is normally closed down. If the holiday falls on a weekday or a Sunday when it is celebrated the next day, employees are paid for that day. He is not, if it falls on a Saturday. There is also another exception to this practice in case all eight observable holidays occur, or are celebrated, on a weekday.li In that event, the employees do not receive holiday pay for one holiday, usually Veterans Day, November 11, when the plant is kept open.12 To furnish a fund for holiday pay (and this also applies to vacation pay), the Respondent uses an accrual system whereby, in accordance with a set formula, a sum of money is credited monthly to each employee's account at the rate he is then earning. Since holiday pay is computed on the basis of his rate of earnings when the holiday occurs, there may be occasions when the employee's account is insufficient to provide holiday pay at his latest rate due to a wage increase or promotion received earlier in the year. In such a case, the Respondent permits him to overdraw his account to the extent of his weekly wages, which the Respondent normally withholds as a matter of policy. Such overdraft remains as a liability to the Company which is, in effect, secured by the employee's withheld wages. As part of its economic proposals, the Union initially demanded nine paid holidays. This proposal it later reduced to eight. The Respondent, on the other hand, offered six guaranteed paid holidays at the employee's then rate of pay, regardless of the day on which the holiday fell or the state of the account.13 In support of its pro- posal the Respondent discussed at length with the Union its existing accrual system, its dissatisfaction with its operation, which was unduly complex and confusing to both rank-and-file and higher level employees , and its desire to replace it with a guaranteed pay plan.14 According to the testimony of James W. Crowley, manager of the Respondent's legal department, the Company arrived at six guaranteed holidays after studying its actual experience with the accrual system and concluded that this figure was the nearest whole number to equal the maximum of seven accrued holidays the Company paid under that system. The Union, however, was not persuaded by the Respondent's proposal or explanation, insisting that the net effect of that proposal was to give Desomatic employees two holidays less than those enjoyed by employees of other divisions in the same industrial complex.15 11 It is also noted that the parties were In disagreement , among other things, with respect to time and a half for Saturday and double time for Sunday work, and over the question of voluntary as against compulsory overtime. 11 According to the testimony of James W. Crowley, manager of the Respondent's legal department , this happens about once in 7 or 8 years. 13 Crowley also testified that he Inadvertently failed to mention this practice in the letter he sent to the Union in compliance with the Union 's request for information con- cerning terms and conditions of employment at Desomatic. 13 Employees at the Respondent's nearby Prewitt plant and at its Northeastern plant also are given six guaranteed paid holidays, although the employees of the other divisions in the Edsal Road industrial complex are entitled to paid holidays in accordance with the accrual system It appears that within the past few years 1959 was the only year when six holidays fell or were celebrated on a weekday. "Crowley testified that the Company 's personnel office had recommended to the Com- pany's executives and accounting department the abandonment of the holiday and vaca- tion accrual system in all divisions . However, because of the opposition of the accounting department, which views the accrual system as necessary to facilitate the closing out of Government cost-plus contracts, the required executive approval for the companywide change could not be secured . However, Desomatic, whose business is predominantly fixed fee as distinguished from cost-plus, has obtained the required approval for the pro- posed change from the divisional management, which is all that Is required. 15 There is conflicting testimony by Sullivan and Crowley, which I find unnecessary to resolve, as to whether the Union In supporting its position for eight guaranteed holidays, 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Notwithstanding extensive discussion and argument on both sides neither party would budge from its position until the September 26 meeting. After the Union unsuccessfully renewed its demand for eight paid holidays, which it asserted the Respondent had granted the Rubber Workers Union at its Sloane plant in California, the Union requested the Respondent to continue its accrual system and incorporate it in a consummated agreement. The Respondent, however, reiterated its decision to terminate the accrual system and rejected the Union's proposal.16 d. Vacations At the time of the hearing the Respondent's vacation policy was based on the accrual theory previously discussed in connection with holiday pay. However, the formula, according to which vacation pay accrued, was different. The policy allowed employees to accrue 2 weeks' vacation pay after 1 year of service and 3 weeks' vacation pay after 6 years of service, at the wage rate they were earning at the time of the monthly accrual. Apparently, the Union was not initially interested in this vacation plan and offered its own proposal whereby employees would receive a 1-week paid vacation for 6 months' service; a 2-week paid vacation for 1 year's service; a 3-week paid vacation for 5 years' service; and a 4-week paid vacation for 10 years' service. The Re- spondent countered with a vacation plan similarly predicated on the idea of guar- anteed payments at the wage rate earned at the time the employee takes his vacation but less generous than that proposed by the Union. Specifically, the Respondent offered a 1-week paid vacation at the completion of 1 year of service; a 2-week paid vacation at the completion of 3 years of service; and a 3-week paid vacation at the completion of 7 years of service.17 As in the case of holidays, the Respondent ex- plained in detail its dissatisfaction with the then existing vacation accrual system. While conceding that its proposed 1-week vacation provision was virtually a reduction in benefits, the Respondent expressed the view at the negotiations that guaranteed benefits for the senior employees were better than those given under the accrual system. The Union, on the other hand, rejected the Respondent's proposed vacation plan for the asserted reason that it reduced benefits that were then allowed employees. Since the Union made no headway with its proposal, it offered at the final Septem- ber 26 meeting to accept the vacation accrual system then in effect but to no avail because of the Respondent's asserted desire to terminate it. e. Christmas bonus It has been the Respondent's practice to grant employees a Christmas bonus based on the employee's length of service, initiative, and his contribution to the Company's advancement. As a result of such distribution the previous year at Desomatic 80 percent of the employees received a bonus of approximately $40 and 20 percent received an additional sum up to $20 as a reward for merit. The Union's contract proposal provided for bonuses to be "applied on a uniform basis and are to be com- puted on a percentage basis of yearly earnings." The Respondent offered to con- tinue its policy of determining the gross amount of the bonus, the recipients and the specific sums to be allocated without any discrimination as defined in the Union's pointed out during the discussions that the Union was only negotiating for a year during which eight holidays under the Respondent's accrual system fell or were celebrated on a weekday for which employees would be paid 16 There is some testimony by Sullivan to the effect that certain of the Respondent's representatives stated during negotiations that the Respondent was willing to continue its present holiday and vacation benefits as long as a contract was not concluded On cross- examination, Sullivan testified that at the final bargaining session when the Company re- jected the Union's request to write into the contract its accrued holiday and vacation system, Sullivan asked the Respondent's spokesman what the Company would do with respect to the accrual system if no agreement was reached, and the spokesman answered it would stay as it was for the time being at least. In view of all the testimony in the record relating to the discussions at the bargaining table, I am not convinced that the Respondent proposed discontinuance of its accrual system only for the purpose of contract negotiations and to prevent consummation of an agreement. 17 The Respondent has no provision for 3-week paid vacations at the Prewitt, North- eastern, or U.S. Flare plants Under the Sloane contract, 10 years' service is a pre- requisite for a 3-week vacation However, all the divisions at the Edsal Road industrial complex use the accrual vacation plan with the benefits outlined above. ATLANTIC RESEARCH CORP., DESOMATIC PRODUCTS DIV. 291 proposed contract. The Union rejected this offer, insisting on negotiating the amount of the bonus and the recipients.18 3. Alleged unilateral action a. Merit increases After the Union's certification, the Respondent, pursuant to its periodic pay review system, rated and authorized a merit increase for four employees effective April 1. At the April 3 bargaining session, the Respondent requested the Union to approve these increases, which it did.19 Further merit increases were apparently not given while negotiations were in progress. After negotiations broke down on May 17, the Respondent, by letter dated July 27, notified the Union as the employees' collective- bargaining representative that, in accordance with its established merit system, it had reviewed and recommended specified wage increases for four-named employees, and a merit promotion for a fifth employee, all effective as of July 1. Although the Respond- ent did not request negotiations respecting these increases,20 neither did the Union, which did not answer the letter. On August 21, the Respondent again notified the Union as its employees' representa- tive that similar pay reviews under its existing merit system were made with respect to seven-named employees and specified increases were recommended for them effec- tive as of August 1. In this letter, the Respondent also asked for its approval or expression of views. In reply, the Union proposed that these merit increases should be negotiated when contract negotiations, which it had previously requested, were re- sumed 2' On September 17, written notice of six additional contemplated increases 22 effective September 1 was given to the Union whose approval or statement of views was also solicited. Because of the Union's indicated position, the Respondent with- held the August and September increases. However, when negotiations were resumed on September 26, these increases were not brought up for consideration. b. Accident insurance plan Sometime before July 10, the Respondent made arrangements with an insurance carrier for a new accident insurance plan available to employees in all the Respond- ent's plants at a reduced group rate. Under this plan the Respondent did not contribute to the payment of any premiums. The Respondent thereafter distributed to all its employees, except those at Desomatic, a memorandum dated July 10 in which it set forth the advantages of this plan, its provisions, and the substantial savings made possible by group participation. Also attached was an application to be completed if the employee wished to take advantage of this program. Because Desomatic employees were represented by the Union, the Respondent on July 13, submitted the insurance plan to the Union for its approval before making it available to the Desomatic employees for their participation. By letter dated July 30, the Union stated that "we will not stand in the way of your insurance program," although it was a subject for negotiation. Upon receipt of this letter, the Respondent made the plan available to Desomatic employees. ' At a recess during the final September 26 meeting, one of the Respondent's negotiators testified, the Respondent's bargaining team formulated a proposal whereby the Respondent would continue to determine the total amount to be allocated but which, as the Union proposed, would be distributed uniformly among unit employees on a fixed percentage of yearly earnings. However, since this new proposal required approval of the Company's board of directors, it was not communicated to the Union at that meeting 10 According to the credited testimony of Respondent's Vice President Shane, who im- pressed me as a reliable and accurate witness, it has been the Respondent's practice not to notify employees in the unit of contemplated increases before discussing the matter with the Union 20 Vice President Shane credibly testified that he relied on advice of company counsel that, since there was a bargaining impasse, it was not necessary to request negotiations on the subject. n Gaynor Tipple was one of the beneficiaries of the increases As vice president of the local union, Tipple, who was also acting chairman of the shop negotiating committee, was given a copy of this letter by the Company, as it was customary to do 22 Employee Gregory J. Gonsolves, who was in this group and was recommended for an increase, was about a month earlier denied an increase because of insufficient production and put on probation after a unilateral review by the Respondent 727-083-64-vol. 144-20 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD c. Establishment of leadmen classification; promotions On July 24 the Respondent wrote the Union that in its management judugment it determined that it was necessary to designate leadmen in certain departments. It therefore proposed establishing such a job classification, set forth the additional duties leadmen would be required to perform, and provided a 25-cent hourly differential. In addition, the letter named four employees whom it proposed to fill these jobs. In the July 30 letter, in which the Union consented to the application of the insurance plan to Desomatic employees, the Union also agreed to "upgrading leadmen." 4. Respondent's antiunion literature As indicated previously, the General Counsel relies on certain antiunion literature distributed among employees or posted on the Company's bulletin board in the Desomatic shop some time after the Desomatic representation election and before contract negotiations were instituted , as evidence of the Respondent 's reluctance to bargain in good faith with the Union. It appears that during that time the Union was engaged in a drive to organize employees of other divisions, although, according to David Delker, head of the Respondent's labor relations office, the only actual campaign of which the Respondent was aware was that conducted at the Gainesville, Pine Ridge, plant. It is undisputed that, in opposing the Union's organizational campaign, the Respond- ent distributed among employees at plants other than Desomatic a memorandum dated February 28 addressed to "All Atlantic Research Employees," and a letter dated March 5, directed to "Dear Fellow Employee." 23 There is also credible testimony 24 that Pat Mayo, foreman of the Desomatic shop, passed out copies of the letter dated March 5 to employees in his shop and that a copy of the February 28 memorandum was posted by an unidentified person on the shop's bulletin board above the employees' timeclock for about a week or a week and a half. In the February 28 memorandum, the Respondent's president referred to the Union's success at the Desomatic shop; stated that the selection of the Union means that outsiders will try to dictate the relationship between the Company and employees and that the Company's long- established policy of providing advancement based on merit was not possible under union rule; and finally, importuned employees not to sign an authorization card for the Union as it will be the "first step in bringing a strife-ridden union into your divi- sion." The March 5 letter brought to the attention of employees editorial comment relating to the Union's "bargaining and strike history" and intraunion rivalry which "makes this union totally unworthy" of their support. As counterpoint, the letter also emphasized that the Company will always recognize the employees' right to join or not to join a union. There is also uncontradicted testimony in the record that after the Desomatic election a cartoon was posted by an unidentified individual on the same shop bulletin board over the timeclock. This cartoon, which remained there for a few weeks, showed a group of humorous figures, sometimes described as "nebbishes," with the subtitle "NOW THAT WE'RE ORGANIZED-WHAT THE HELL DO WE DO?" B. Contentions of the parties-concluding findings The General Counsel contends , in substance, that the Respondent, in violation of Section 8(a) (5) and ( 1) of the Act, failed to discharge its bargaining obligation in three respects-by insisting during negotiations on reserving to itself the right to grant merit increases to the employees in the unit ; by bargaining in bad faith as reflected in the Respondent's total conduct; and by taking unilateral action regarding merit increases, leadman promotions , and the institution of a group accident insurance plan. The Respondent, on the other hand, denies that it was remiss in any manner in performing its bargaining obligation. It has long been settled that an employer violates Section 8 (a) (5) and (1) of the Act if it fails to bargain in good faith with its employees ' representative or, absent any contractual provision permitting it, takes unilateral action with respect to any term or condition of employment without affording the Union an opportunity to 23 According to the uncontradlcted testimony of David Delker, which I credit, another document dated March 16 was distributed among employees at the Gainesville plant only. In it the Respondent attacked the Union's asserted irresponsibility and salesmanship 24 The Respondent did not produce as a witness Pat Mayo, admittedly a supervisor, to contradict the above testimony if it was untrue. ATLANTIC RESEARCH CORP., DESOMATIC PRODUCTS DIV. 293 negotiate concerning such matters.25 This principle is generally embodied in Sec- tion 8(d) which defines the bargaining obligation as requiring the parties, inter alia, "to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms or conditions of employment, or the negotiation of an agree- ment .. .." Although this obligation does not "compel either party to agree to a proposal or require the making of a concession," it does contemplate, as the Board and the courts have uniformly held, a willingness to enter the discussions "with an open mind and purpose to reach an agreement consistent with the respective rights of the parties." 26 Simply entering "upon a sterile discussion of union management differences," 27 is not sufficient. Essentially then, the "ultimate issue whether the Company conducted its bargaining negotiations in good faith involves a finding of motive or state of mind which can only be inferred from circumstantial evidence." 28 On the basis of all the facts and circumstances in this case, I find that the pre- ponderance of the evidence does not establish that the Respondent failed to perform its statutory bargaining obligation. As fully discussed earlier in this report, the Respondent met and conferred with the Union at 10 bargaining sessions and 1 top- level meeting, at which extensive discussions were had on a variety of subjects, re- sulting in agreement on some matters and disagreement on others. I am unable to find, as the General Counsel urges, substantial basis for inferring bad faith in the positions taken by the Respondent in the areas of disagreement relating to merit in- creases, overtime in excess of 8 hours a day, holidays, vacations, and the Christmas bonus. Specifically, the Respondent's insistence on reserving to itself as a manage- ment prerogative the right to grant individual merit increases was not in derogation of its bargaining obligation. There is no question that there was full negotiation and a complete exchange of views regarding this subject 29 Moreover, apart from the fact that the Respondent modified its original proposal and offered an initial three- step automatic increase and a limitation on the amount of merit increases above the job rate, its proposal did not exclude the Union from bargaining over individual merit increases. Concededly, the Respondent offered to discuss in advance with the Union any contemplated increase, its reasons and amount, and to furnish it with necessary information. However, the Union rejected the proposal unless the Respondent also agreed to submit disputes involving merit increases to an arbitrator or some other third party to whom the Union could "effective[ly]-appeal" the Respondent's de- cisions." Although the Respondent was willing to submit to arbitration such con- troversies only where based on charges of discrimination for union or personal rea- sons, as well as grievances involving other subjects, it would not agree to make merit increase disputes otherwise arbitrable for it meant surrendering to third parties the right to determine such increases. Undoubtedly, this position was not barred by the Act,30 nor will it support an inference of bad faith. I also do not find evidence of spurious bargaining in the Respondent's proposal regarding overtime in excess of 8 hours a day.31 The record is clear that the Re- zs It has been held that an employer's unilateral action without consulting the Union not only is a manifestation of bad faith (N.L R B. v. Crompton-Highland Mills, Inc., 337 U.S. 217), but also is itself a circumvention of his statutory duty imposed by Section 8(d) of the Act to "meet . . . and confer" with the employees' bargaining representative, re- gardless of the employer's state of mind (N L.R B. v. Benne Katz etc., d/b/a Williamsburg Steel Products Go, 369 U.S. 736). Moreover, even where there has been bargaining to impasse on a subject, the employer has no license to grant a greater benefit than that offered the union at the bargaining table without affording the union an opportunity for further bargaining (ibid). 20 L. L. Majure Transport Company v. N L.R B., 198 F. 2d 735, 739 (C.A. 5) ; see also, NL.R.B. v. Darlington Veneer Company, Inc, 236 F. 2d 85, 88-89 (CA 4). 27N L R.B. v. American National Insurance Co., 343 U.S. 395, 402 28 N L R B v. Reed & Prince Manufacturing Company, 205 F. 2d 131, 139-140 (C.A. 1), cert. denied 346 U.S. 887. ^ Contrary to the General Counsel's contention, the evidence does not show that the Respondent refused to bargain about the criteria to be followed under the pay-review system. This subject was never raised by the Union because as Sullivan, its chief spokes- man, testified, "we never agreed to merit increases." 80 Cf N.L.R.B. v. American National Insurance Co., supra. It is quite clear that the Respondent was not obliged to yield to the Union's demands simply because the Respond- ent's pay-review system was a source of great dissatisfaction to the Desomatic employees and was one of the cardinal reasons for the Union's success in organizing them, as Sullivan testified, or because the Union was engaged during negotiations in a drive to organize employees of the Respondent's other divisions. 31 It is noted that the parties were far apart on the Union's other overtime proposals, as for example, time and a half for Saturday and double time for Sunday work. 294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD spondent was willing to write into a consummated contract its practice of paying premium rates for such overtime, whether the work performed was Government or private. However, it sought to reserve the right to discontinue paying such daily overtime rates when the proportion of private work compared to Government work substantially increased . I find this proposal not so unreasonable as to impugn the Respondent's bargaining attitude , although generally it is not for the Board to pass judgment on the merits of a proposal 32 With respect to holidays and vacations , the Respondent offered as a counter- proposal to the Union's proposal of guaranteed paid holidays and vacations a similar plan but definitely not as liberal . After lengthy negotiations in which neither party would retreat from its position, the Union finally requested that the Respondent's accrual system be incorporated in a contract. This the Respondent refused to do because of its desire to abandon the accrual system which proved to be confusing and unsatisfactory to Desomatic management and employees. While it may well be that the Respondent 's proposal did not provide benefits equal to those allowed under the accrual system, which reduction in benefits under other circumstances may mani- fest bad-faith bargaining, I am not persuaded that in light of the facts in this case the Respondent's proposal was dictated by a "cast of mind" 33 intent on preventing agree- ment, or by a desire to discriminate against represented employees. Nor am I convinced that the Respondent's proposal to continue its existing Christmas bonus practice reflected a determination not to reach agreement with the Union. As previously indicated, under this practice, the Respondent's board of directors fixed the gross amount of the bonus which it divided among the employees in a manner awarding a modest additional sum for merit. This method of allocation was not acceptable to the Union which proposed that the amount of the bonus be negotiated and that individual bonuses be uniformly computed on the basis of a percentage of yearly earnings 34 Turning to the alleged unilateral action, it is clear from what I have previously found that the Respondent did not take unilateral action with respect to merit increases determined in accordance with its pay review system , leadman promotions, or the institution of the accident insurance plan, without securing the Union's assent.35 In those cases where the Union refused to give assent and requested bargaining (i.e., respecting the August and September proposed increases ), the Respondent withheld granting them. Significantly, when negotiations were reopened the following Septem- ber 26, the Union did not even bring up these matters for discussion.36 In the cir- cumstances, the Respondent 's conduct can scarcely be regarded as the antithesis of good-faith bargaining . Moreover, in disagreement with the General Counsel, I find no compelling evidence of bad faith in the fact that the Respondent, in accordance with custom developed during the negotiations, furnished employee officers of the local union, who were also on the shop negotiating committee , copies of the letters sent to the Union in which it proposed the above action . Obviously, this was not bypassing the Union or calculated to undermine it. In view of the foregoing, I am not entirely persuaded that the Respondent engaged in sham negotiations or otherwise disregarded its bargaining obligation . In so doing, I find that the literature distributed to Desomatic employees or posted on the shop bulletin board before negotiations were instituted insufficient to warrant a contrary 33 Cf N L R B. v Reed & Prince Manufacturing Company, supra, at p 134 33 N.T R B v Benne Katz, etc., d/b/a Williamsburg Steel Products, 369 U.S 736, 747 34 The General Counsel's contention is patently untenable that the Respondent did not vest its negotiators with authority to bargain as required by the Act simply because the Respondent's negotiators withheld submitting a modified Christmas bonus proposal formu- lated at a recess during the September 26 meeting until they first received approval from the Company's board of directors. The record plainly shows that the Respondent's repre- sentatives possessed adequate authority to negotiate a collective bargaining agreement Nor do I find supported by the record the General Counsel's assertion that the Respondent during negotiations reneged on its acceptance of a 15-cent-an-hour economic package and thereby also displayed bad-faith bargaining. As previously discussed, there was never an unequivocal acceptance of that economic package. 3s Although the Respondent's July 27 letter notifying the Union of contemplated in- dividual merit increases did not also specifically request its approval or expression of views as did the Respondent's later letters concerning other contemplated increases, the Union did not respond or otherwise request bargaining on thoseincreases Cf. N L R B v United Brass Works, 287 F. 2d 689, 697. 36 Contrary to the General Counsel's contention , I do not regard the Respondent 's periodic review of employee Gonsolves' performance, its decision not to give him a merit increase, and its warning to improve , as constituting unilateral action prohibited by the Act ROBBINS & MYERS, INC. 295 conclusion. In the final analysis, it appears to me that Respondent 's attitude through- out the negotiations was one of hard bargaining which the Act plainly does not forbid. Accordingly, as I find that the General Counsel has failed to sustain the allegations of the complaint, I shall recommend dismissal of the complaint. RECOMMENDATION Upon the basis of the foregoing findings and upon the entire record in the case, I recommend that the complaint herein be dismissed. Robbins & Myers, Inc. and International Union, United Auto- mobile, Aerospace and Agricultural Implement Workers of America, AFL-CIO, Petitioner. Case No. 9-RC-5310. August 27, 1963 DECISION AND DIRECTION OF ELECTION Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, a hearing was held before Cassius B. Gravitt, Jr., hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are, hereby affirmed. 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 McCulloch and Members Rodgers and Brown]. Upon the entire record in this case the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organization involved claims to represent certain em- ployees of the Employer. 3. A question affecting commerce exists concerning the representa- tion of the employees of the Employer within the meaning of Section 9(c) (1) and Section 2 (6) and (7) of the Act. The Petitioner, which represents the production and maintenance employees, seeks a unit of office and plant clericals and technical em- ployees. Alternatively, it seeks an election in any unit or units the Board finds appropriate. The Employer objects to the single unit, contending that three separate units of office clerical, plant clerical, and technical employees, respectively, are appropriate. While the prin- cipal issue is the composition of the unit or units, the parties also dis- agree on the exclusion of certain individuals alleged to be supervisory or professional employees, as noted hereafter. The Employer's Operations The Employer manufactures electric motors, fans, pumps, hoists, cranes, and ventilation equipment in its five plants comprising some 60 144 NLRB No. 32.