The Ingalls Shipbuilding Corp.

712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Ingalls Shipbuilding Corporation and Pascagoula Metal Trades Council, AFL-CIO. Case No. 15-CA-2089. July 93,1963 DECISION AND ORDER On December 12, 1962, Trial Examiner Henry S. Sahm 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 attached Inter- mediate Report. The Trial Examiner also found that the Respond- ent had not engaged in certain other unfair labor practices alleged in the complaint and recommended dismissal of those allegations. Thereafter, the Respondent and the General Counsel filed exceptions to the Intermediate Report together with supporting briefs. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connection with this case to a three- member panel [Chairman McCulloch and Members Rodgers and Leedom]. The Board has reviewed the rulings of the Trial Examiner made at the hearing, and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner to the extent consistent herewith. 1. In 1940, Metal Trades Department, AFL, was certified as the exclusive representative of Respondent's production and maintenance employees. Since 1949, the successive collective-bargaining agree- ments covering this unit have stated in the recognition article that Pascagoula Metal Trades Council, the Charging Party herein, is affiliated with Metal Trades Department and is authorized to act on its behalf as the bargaining agent for affiliated local unions having members employed at the plant. The Respondent moved to dismiss the complaint which alleges that Respondent had failed to bargain with the Council, contending that it has no obligation to bargain with any one other than Metal Trades Department, the certified union.' The Trial Examiner denied the motion to dismiss the complaint, holding that Respondent was es- topped, in view of the bargaining history since 1949, to deny that the Council is, in fact, the bargaining representative of the employees in the unit. Without limiting ourselves to the Trial Examiner's es- I We do not understand the Respondent's contention to be, as stated by the Trial Examiner, that the complaint is defective merely because the charge was filed by the Council and not by Metal Trades Department . It is clear that Respondent recognizes that anyone may file a charge and that the charge would be sufficient to support the com- plaint if the Council is, in fact , entitled to claim bargaining rights. 143 NLRB No. 74. THE INGALLS SHIPBUILDING CORPORATION 713 toppel theory, we also find that Respondent was required to bargain with the Council, both as the authorized agent of the certified union and as a continuation of the organization which was designated by vote of the employees as their representative.2 2. The substantive allegations of the complaint are that Respond- ent violated Section 8 (a) (1) and (5) : (1) by failing to furnish pertinent data regarding its production bonus system to the Council,, and (2) by dealing directly with groups of employees and reinstitut- ing the bonus system after agreeing with the Council to terminate it_ The Trial Examiner found a refusal to bargain as to (1) but not as to (2). For the reasons set out below, we find merit in the General Counsel's exceptions, and hold that Respondent's reinstitution of the bonus and dealing directly with groups of employees also constituted violations of Section 8(a) (1) and (5). For about 20 years prior to 1962, there had been in effect at Re- spondent's shipyard a production bonus or incentive system under which Respondent unilaterally set rates and norms for the piecework operations of a substantial percentage of its employees. The Re- spondent had unilaterally established the system, and had also ad- ministered it by setting and changing rates and ,norms without prior bargaining with the Council. None of the bargaining agreements prior to 1962 had referred to the bonus system. The Council, looking forward to negotiating a new agreement, wrote Respondent on December 28, 1961, that it needed information concerning the incentive system and requested Respondent to make available information and records pertaining to the piecework and incentive system, including rates and time studies. During negotia- tions, the Council also put forward a proposal that the Company would not engage in any piecework or incentive plan unless the price and norm had been agreed upon by the craft union involved and by the Council.' Respondent did not take the position during these negotiations that the Council had no right to information concerning the incentive system. Rather, it treated the Council's request for in- formation as a request for examination of its rate books, a request it refused to grant on the ground that the books contained confidential information concerning its competitive position. It was willing, how- ever, to explain the basis for any individual rate and to consider any rate dispute as a grievance not subject to arbitration. In view of 2 ,Compare the following cases which hold that an employer is obliged to bargain with a successor to a certified agent even though the certification has not been amended to re- flect the changed situation: The Pacific Telephone and Telegraph Company, and Bell Tele- phone Company of Nevada, 113 NLRB 478, 518-520; Cochran Co., Inc., 112 NLRB 1400, 1408; NLRB. v. Harris-Woodson Company, Inc., 179 F. 2d 720 ( C.A. 4), enfg. 85 NLRB 1215. 8 Ten unions exercise jurisdiction over work performed in the yards , and, together, con- stitute the Council. The Boilermakers Union was most directly affected by the incentive system, since many of the employees within its jurisdiction were on piecework. Other unions were also affected to a lesser degree. 714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the conditions imposed by Respondent, both as to the amount and type of data which it would make available, and the circumstances under which such data could be examined and studied, the Council believed that it would not have the information it needed to bargain intelligently on the formulation or effects of the bonus system. The parties then agreed that the bonus system would be eliminated com- pletely as an element in wage determination. Since previous contracts had not referred to the bonus system when it had been administered by the Respondent exclusively, the parties agreed that elimination of the bonus would also not be mentioned in the newly negotiated agreement. The Council then requested that the employees affected by the discontinuance of the bonus be given an additional hourly increase, but this was rejected by the Company. As set out in detail in the Intermediate Report, after the execution date of the new agreement, some of the employee groups that had been receiving incentive wages protested when they learned that these had been eliminated, and, over the objections of the Council and the individual craft unions affected, prevailed upon the Company to deal directly with them and to reinstitute the payment of incentive wages. On the basis of a variety of considerations set out in his Inter- mediate Report, the Trial Examiner held that by reinstituting the bonus system for those groups of employees that had protested its termination, Respondent committed no violation of Section 8(a) (5). We disagree with the Trial Examiner's holding because we regard the considerations upon which he relied as extraneous to the relevant issue in this case. In our view, the decisive consideration here is that the Respondent and the Council had agreed in their negotiations that the bonus system would no longer be utilized in wage determina- tions. It was a decision entered into with awareness of its possible consequences. During the negotiations, the Council, although generally opposed to the incentive system, had declared its willingness to have the sys- tem retained if it could participate in the significant rate-setting aspects. It was only because Respondent was loath to relinquish its exclusive control, as evidenced by its unwillingness to take even the first step, that of supplying necessary wage information to the Coun- cil, that agreement was reached to terminate the system entirely. In these circumstances, we do not agree with the Trial Examiner that termination of the system was obtained, at the Council's insistence, only because the Council also promised that the production of em- ployees previously paid -under the bonus system would not decline. Nor is there merit in the Trial Examiner's justification for his con- clusion that the Respondent acted properly in reinstituting the bonus, on the ground that it was for the direct benefit of the employees formerly on piecework who were not receiving adequate representa- THE INGALLS SHIPBUILDING CORPORATION 715 tion from their union. The Council represents 5,000 employees at the shipyard, of whom about 1,800 to 2,000 were compensated to some de- gree by incentive wages. The Council and its constituent unions were properly concerned over the fact that it had no effective control in the determination of wages for a substantial portion of the unit. We have no reason to believe that the Council, as exclusive bargaining representative for all the employees, desired to sacrifice for invidious reasons the interests of those employees who had previously been re- ceiving the bonus. The Council may properly have been more con- cerned with rectifying existing disparities between employees paid an hourly rate and those paid under the bonus system, than with con- tinuation of the wage system under which some employees received disproportionate benefits and in which it was not permitted to exercise its rightful function. We cannot say that the Council violated its obligation to represent all in its unit fairly when, after balancing the advantages and disadvantages of a piecework system to a large ma- jority of its members, it concluded that the bonus system should be terminated if it could not have an effective voice in administering it. In Ford Motor Co. v. Huffman, 345 U.S. 330, at 337, the Supreme Court said: Any authority to negotiate derives its principal strength from a delegation to the negotiators of a discretion to make such conces- sions and accept such advantages as, in the light of all relevant considerations, they believe will best serve the interests of the par- ties represented. A major responsibility of negotiators is to weigh the relative advantages and disadvantages of differing proposals . . . . Inevitably differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere exist- ence of such differences does not make them invalid. The com- plete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it repre- sents, subject always to complete good faith and honesty of purpose in the exercise of its discretion. The principles enunciated there are applicable to the present case. We also disagree with the Trial Examiner's conclusion that the Re- spondent's unilateral reinstitution of the bonus system was proper as a settlement of a grievance in conformity with the provisos to Sec- tion 9(a) of the Act. Section 9(a) gives to individuals and minority groups the right to take grievances directly to the employer "and to have such grievances adjusted, without the intervention of the bar- gaining representative, as long as the adjustment is not inconsistent 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with the terms of a collective-bargaining contract or agreement then in effect." The Trial Examiner held that the action of the dissident employee groups that were seeking restoration of the incentive sys- tem for themselves was an attempt to present a "grievance," whose adjustment would not be contrary to the terms of the bargaining agreement. The Trial Examiner relied on Douds v. Local 1250, Retail, Whole- sale Department Store Union of America, CIO (Oppenheim Collins & Co.), 173 F. 2d 764 (C.A. 2), as establishing that Section 9(a) "put an end to the distinction between `grievances' and other disputes," so that, as the decision puts it, "... insofar as the contract leaves open any points in dispute, present or future, the employees retain their common law right to bargain for themselves, singly or collectively." But since the decision holds that the matter there in issue, the reinstate- ment of certain discharged employees, was a "grievance" and not some other type of dispute, it is clear that the court itself recognized the language quoted above to be dictum (see opinion on petition for re- hearing, 173 F. 2d at 772). In a case factually more similar, another court of appeals rejected the proposition set forth in Douds, that every dispute is a "grievance," and specifically held that fixing wages or rates of pay for a large percentage of employees in a certified bar- gaining unit is not an adjustment of "grievances" within the meaning of the proviso to Section 9(a).4 We think this is the correct inter- pretation of the proviso, for, as the court there pointed out, if Section 9(a) put an end to the distinction between "grievances" and "other disputes," it would "obliterate the significant differences between a union certified as exclusive bargaining representative and a noncer- tified union or group." 206 F. 2d 442, 447-448.' Furthermore, even if we were to assume, arguendo, that reinstituting the bonus system was the "adjustment of a grievance," as interpreted by the Trial Examiner, we are satisfied that the so-called adjustment was inconsistent with the bargaining agreement and, for that reason alone, was not saved by Section 9 (a). The Respondent and the Coun- cil had come to a final and binding agreement as to the method of wage determinations and specific rates. The parties had bargained with respect to incorporating the bonus system into the wage scheme, and each, for its own reasons, had concluded that it preferred to have the system terminated rather than accept the other party's alternative proposal. To say, as the Trial Examiner does, that the Respondent's reinstitution of the same bonus system is not inconsistent with the con- tract, because the contract is silent on the matter, is to ignore the agree- 4West Texas Dttilities Co., Inc. v. N.L.R.B., 206 F. 2d 442 (C.A.D.C.). 5 See also J. I. Case Company v. N L.R B , 321 U S. 332, Dazey Corporation, 106 NLRB 553. THE INGALLS SHIPBUILDING CORPORATION 717 ment which the parties actually made. In any event, here the pay- ment of wage rates of a type not provided for under the agreement is clearly inconsistent therewith. Other reasons advanced by the Trial Examiner to support his con- elusion that resumption of the production bonus was not a violation of Section 8 (a) (5) are adverted to in the marginal note, and are rejected on the basis of the cases cited there.' 3. We agree with the Trial Examiner that the Union is entitled to data that will enable it to understand and evaluate the piecework rates and the standards on which they are based. We do not under- stand the Respondent's exceptions to this part of the Intermediate Report as questioning its obligation to make this information avail- able, despite its past conduct in nullifying the Council's requests there- for. Rather, the Respondent treats the Trial Examiner's finding as one that would require it to turn over its rate books to the Council. As to such a finding, it excepts on the grounds that the rate books are confidential, that the Council never requested their examination, and that, in any event, it has furnished some information and is willing to supply something more under proper conditions. We agree with the Trial Examiner that the Council did make proper requests on a number of occasions for pertinent wage data, and that Respondent was obligated to furnish information which the Council reasonably required for bargaining with respect to the bonus system' The Respondent did not satisfy this obligation by offering its officials to answer oral inquiries or to explain the basis for some particular rate or rates. The Council is entitled to receive all relevant information which it needs to carry out properly its function of bar- gaining with respect to the production bonus system, including the rate standards, and work norms for each operation, as well as such supporting data as the Respondent uses in determining any of the above. We agree with the Trial Examiner that Respondent has not substantiated its claim that the relevant data is "highly confidential" and that its disclosure would injure its competitive business position. We also agree with him, moreover, that confidentiality is not a defense to an obligation to furnish relevant wage data. O Even if we were to accept the Trial Examiner 's finding that the Respondent did not specifically intend to undermine the authority of the Union (though the record facts cer- tainly justify a contrary inference ), it was nevertheless an inherent consequence of its unilateral actions, N L.R B. v. Benne Satz, etc., d/b/a Williamsburg Steel Products Co., 369 U S. 736. Nor Is Respondent's direct dealing with employees in derogation of the Union's exclualve bargaining rights excused either because these employees benefited finan- cially from resumption of the bonus system, J. I. Case Company v. N.L.R.B., 321 U.S. 332, 338-339, or because Respondent thought it had a legitimate economic reason for such re- sumption, N.L.R.B . v. Morris Harris, et al., d/b/a Union Manufacturing Company, 200 F. 2d 656 (C.A. 5). *J. I. Case Company v. N.L.R.B., 253 F. 2d 149 (C.A. 7) ; N.L.R.B. v. F. W. Woolworth Company, 352 U.S. 938. 718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD However, the Board does not always require that information be furnished in the precise form and manner requested by a union, and if Respondent believes that the rate books contain business informa- tion that does not pertain to wage determinations, it may make the relevant wage data available to the Council in some other fashion .8 We leave it to the good faith of the parties, now that Respondent has been clearly apprised that it must supply incentive wage data of the kind set out above, to determine between themselves the conditions under which the Council's right of access to such data may be accom- modated to the Respondent's proper concern not to have business information of a confidential character revealed to its competitors.' THE REMEDY In addition to the remedy recommended by the Trial Examiner, that Respondent furnish the Council with data pertinent to the pro- duction bonus system, we shall also order the Respondent to take certain affirmative action designed to rectify its unilateral reinstitu- tion of the bonus system. It is the Board's customary policy to direct a respondent-employer to restore the status quo when it has taken unlawful unilateral action to the detriment of his employees. Although the General Counsel excepted to the Trial Examiner's failure to recommend appropriate affirmative and negative remedial provisions for those unfair labor practices engaged in by Respondent, he did not specifically request that Respondent be ordered to rescind the bonus system which it illegally resumed. Since its unilateral reinstitution has undoubtedly had a substantial effect upon the wage system provided for in the agreement, and since we are not in a position to know whether the employees now desire its rescission, we shall condition our order on whether the Council, as the bargaining representative of all the em- ployees in the unit, desires immediate termination of the bonus sys- tem or its retention, pending examination of the pertinent wage data and further bargaining with Respondent.1° ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, The Ingalls Ship- building Corporation, its officers, agents, successors, and assigns, shall : 8 See International Woodworkers of America, Local Unions 6-7, and 6-122, AFL-CIO (Pine Industrial Relations Committee, Inc., et al. ) v. N.L R.B., 263 F. 2d 483 (C.A.D.C.). 9 American Cyanamid Company (Marietta Plant), 129 NLRB 683. 10 Great Western Broadcasting Corporation d/b/a KXTV, 139 NLRB 93; Herman Sausage Co., Inc., 122 NLRB 168, 172; Superior Cable Corporation, 116 NLRB 1674. THE INGALLS SHIPBUILDING CORPORATION 719 1. Cease and desist from : (a) Refusing, upon request, to furnish Pascagoula Metal Trades Council, AFL-CIO, as the agent for the exclusive representative of all production and maintenance employees employed at its Pascaguola, Mississippi, shipyard, excluding managerial employees, supervisory employees, office clerks, instructors in the welding school or other craft schools that may be established by the Company, watchmen or policemen who are deputized, commissioned, or appointed by the city of Pascagoula, or other public authority, instrument men, inspectors, office porters, and cost-department clerks and checkers, with all per- tinent data, including rates, standards, work norms, and supporting data in regard to the production bonus system. (b) Making unilateral changes in wages and other terms and con- ditions of employment of employees in the appropriate unit described above, without consulting and negotiating with Pascagoula Metal Trades Council, AFL-CIO. (c) Bargaining with employees in the appropriate unit described above, as to wages and other terms and conditions of employment in derogation of the status of Pascagoula Metal Trades Council, AFL- CIO, as the agent of their exclusive bargaining representative. (d) In any like or related manner interfering with the efforts of Pascagoula Metal Trades Council, AFL-CIO, to bargain collectively. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, furnish to Pascagoula Metal Trades Council, AFL-CIO, all pertinent data in regard to the production bonus sys- tem, including rates, standards, work norms, supporting data, and all other information to which it is lawfully entitled. (b) Rescind the production bonus or incentive system now in effect for certain employees in the appropriate unit and revert to those wages and other terms and conditions of employment established under the present agreement, if Pascagoula Metal Trades Council, AFL-CIO, as the agent for the exclusive representative of these employees, so desires. (c) Upon request, bargain collectively in good faith with Pas- cagoula Metal Trades Council, AFL-CIO, with respect to the reten- tion or modification of the production bonus or incentive system now in effect. (d) Post at its Pascagoula, Mississippi, shipyard, copies of the at- tached notice marked "Appendix."" Copies of this notice, to be furnished by the Regional Director for the Fifteenth Region, shall, "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 "A Decision and Order" the words "A Decree of the United States Court of Appeals, Enforcing an Order." 720 DECISIONS OF NATIONAL LABOR RELATIONS BOARD after being duly signed by a representative of the Respondent, be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all such places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent 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 Respondent has taken to comply herewith. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL NOT refuse, if requested by Pascagoula Metal Trades Council, AFL-CIO, to furnish it all pertinent data, including rates, standards, work norms, and supporting data, in regard to the production bonus system. WE WILL NOT make unilateral changes in wages and other terms and conditions of employment without consulting and negotiat- ing with Pascagoula Metal Trades Council, AFL-CIO. WE WILL NOT bargain with employees in the unit represented by Pascagoula Metal Trades Council, AFL-CIO, as to wages and other terms and conditions of employment in derogation of the status of said Council. WE WILL NOT in any like or related manner interfere with the efforts of Pascagoula Metal Trades Council, AFL-CIO, to bar- gain collectively with us. WE WILL, if requested to do so by Pascagoula Metal Trades Council, AFL-CIO, furnish it all pertinent data in regard to the production bonus system, including rates, standards, work norms, supporting data, and other information to which it is legally entitled. WE WILL rescind the production bonus system now in effect for employees in the appropriate unit and revert to the wages and other terms and conditions of employment established under our present agreement with Pascagoula Metal Trades Council, AFL- CIO, if the Council so desires. WE WILL, upon request, bargain collectively in good faith with Pascagoula Metal Trades Council, AFL-CIO, with respect to THE INGALLS SHIPBUILDING CORPORATION 721 the retention or modification of the production bonus system now in effect. THE INGALLS SHIPBUILDING CORPORATION, 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, T6024 Federal Building (Loyola), 701 Loyola Avenue, New Orleans, Louisiana, 70113, Telephone No. 529-2411, if they have any question concerning this notice or compliance with its provisions. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon charges filed by the Pascagoula Metal Trades Council , AFL-CIO, on May 16, 1962, and thereafter amended on May 29, 1962, the General Counsel of the National Labor Relations Board by the Regional Director, issued his com- plaint dated July 19, 1962, and amended on July 23 , against The Ingalls Ship- building Corporation, herein called both the Respondent and the Company. The complaint alleges that the Respondent has violated Section 8(a)(5) and (1) of the Act.' Respondent filed its answer admitting certain allegations of the complaint but denying the commission of any unfair labor practices. Pursuant to notice, a hearing was held at Pascagoula, Mississippi, on August 7, 8 and 9, 1962, before Trial Examiner Henry S . Salim. All parties appeared at the hearing, were represented by counsel , and were afforded full opportunity to be heard, to produce, examine, and cross-examine witnesses, to introduce evidence, and were advised of their right to argue orally upon the record and to file briefs. The General Counsel and Respondent filed briefs on September 13, 1962. Various motions were made by the Respondent to dismiss the complaint . These motions are disposed of in the following findings of fact and conclusions of law. Upon the entire record in the case , and from observation of the demeanor of the witnesses, the Trial Examiner makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Respondent, a Delaware corporation, with an office and shipyard located in Pascagoula, Mississippi, and having approximately 5,000 employees , is engaged in the business of general shipbuilding . During the year 1961 , Respondent constructed 1 The relevant provisions of the National Labor Relations Act, as amended ( 61 Stat. 186, 29 U.S.C., Sees. 151, et seq .), are as follows: Sac. 8. (a) It shall be an unfair labor practice for an employer- (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7; (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9(a). Rights of Employees Sac. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities . . . . 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and delivered oceangoing and small vessels valued in excess of $50,000 from its Pascagoula shipyard to points directly outside the State of Mississippi , and purchased materials from points outside the State of Mississippi valued in excess of $50,000, which materials were delivered directly to its Pascagoula shipyard . No jurisdictional issue is involved as Respondent does not deny the allegations in the complaint aver- ring Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. It is found, therefore, that Respondent is subject to the jurisdiction of the Board. - H. THE UNION Pascagoula Metal Trades Council, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. Resolutions of Fact and Credibility The testimony concerning some of the incidents involved in this proceeding, particularly the dates and chronological sequence which led up to the filing of a charge in this case, are ambiguous and in some instances contradictory and in- complete as to specific dates and details so that findings of fact and resolutions of credibility made herein result from an attempt to reconcile the evidence in determin- ing what occurred and when. In attempting to supply coherence and consistency to those statements, acts, and dates which are ambiguous, inconsistent, and contradic- tory, necessary recourse has been made to the context of other facts and circum- stances in an effort to determine what occurred and when. HI. THE ALLEGED UNFAIR LABOR PRACTICES The Testimony 2 The Metal Trades Department, affiliated with the AFL-CIO, herein called De- partment, was certified by the Board on May 1, 1940, as the exclusive collective- bargaining representative of Respondent's production and maintenance employees .3 Beginning in 1940, a succession of collective -bargaining agreements were entered into between the Respondent Company and the Department. On June 1, 1942, the Metal Trades Department, the national body, which is composed of International unions and local metal trades councils, issued a charter to the Pascagoula Metal Trades Council, herein referred to as the Council 4 On January 13, 1949, a contract was executed by the said parties which contained a provision captioned "Recognition." This clause, which has appeared in every subsequent contract, including the current, contract, provides as follows: That the employer recognizes that the PASCAGOULA METAL TRADES COUNCIL is affiliated with the METAL TRADES DEPARTMENT of the AFL-CIO, and is authorized to act in its behalf as the bargaining agent for affiliated local unions having members employed in the Pascagoula Plant of THE INGALLS SHIPBUILDING CORPORATION, a DIVISION OF LITTON INDUSTRIES, Pascagoula, Mississippi. The Pascagoula Metal Trades Council is composed of the delegates from the 10 local unions to which some of the Company's production and maintenance em- ployees belong.5 Each union has a delegate on the Council and the Council's officers are elected by the delegates. The Metal Trades Department bargains through the Pascagoula Metal Trades Council and the Council bargains on behalf of all the local craft unions that comprise it. Some time before the then current contract between the unions and the Company is due to expire, the various unions elect one of their members to represent the local union on a negotiating committee. These elected individuals, comprising the negotiat- ing committee, along with the president and vice president of the Council, then enter into negotiations with the Company's representatives with a view to negotiating a new contract. 2 The word "Union" is used herein to include all the labor organizations involved in- cluding the Pascagoula Metal Trades Council. 2 23 NLRB 485 4 The Council does not have its own constitution and bylaws but is governed by that of the Metal Trades Department, the national organization. Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, Plumbers and Steamfitters, Teamsters, Machinists, Sheet Metal Workers, Carpenters, Painters, and Laborers. Not all of the employees in the unit are union members THE INGALLS SHIPBUILDING CORPORATION 723 When agreement is reached on rates of pay and working conditions, the agreement arrived at is then reported back to the Council and membership of the individual local unions and signed by the duly designated officials of the Metal Trades De- partment, Pascagoula Metal Trades Council, the various local craft unions, and the company officers. The Pascagoula Metal Trades Council has been a signatory to these collective-bargaining agreements since 1949. Goodman, an official of the Boilermakers Union, testified that although the col- lective agreement is submitted to the membership of the individual local unions for their approval "as a practical matter," this is not necessary as the contract can be executed by the Department, Council, and local unions without the approval of the individual unions' membership. This statement, however, is not credited as it stands undenied on the record that the negotiating committee, during the time preceding the execution of the current contract, referred a proposed agreement to the various local unions on or about March 6, 1962, but it was rejected by the members of the Boilermakers Union, whereupon negotiations were entered into again resulting in a contract being executed on March 16, 1962, which was then submitted to the membership of the Boilermakers Union.6 Moreover, Goodman in describing the procedure whereby the union officials were authorized to sign a proposed agreement, contradicted himself when he testified that each union submits the proposed contract to its membership at a meeting "for the purpose of reading the changes in the con- tract to their membership and letting their membership vote to accept or reject.... After it is voted on by the locals," he testified, ". . . the Council then notifies the Company that it has been accepted .. . " This testimony by Goodman shows, beyond a doubt, that contracts negotiated by the unions' officials require ratification by the membership of the various local unions before it becomes effective. The controversy in this proceeding arose when the then current agreement under which the unions and company were operating was due to expire on February 15, 1962. In anticipation of this expiration date, the union's negotiating committee and the company representatives began negotiations on January 8, 1962, in an effort to reach a new agreement. Before describing these negotiations it might be well to explain the bonus system which gave rise to and is the focal point of this proceeding. Since 1942 there has been a production bonus system in effect at Respondent's shipyard, under which system workers were rewarded for performance over and above a certain determined standard or base. Under this bonus system approximately 1,800 of Respondent's 5,000 employees were entitled to payments in excess of the regular or guaranteed wage as an incentive if they exceeded the productivity quota established for their particular craft. Since the inception of this bonus system, the productivity quota and the standards or base upon which the bonus is computed has been determined exclusively by the Company. Until the time the current contract was executed, not only was the bonus system never negotiated with the Union but every contract has been silent on this subject notwithstanding that the plan has been in effect for over 20 years. When negotiations for a new contract commenced in 1962, the Union demanded for the first time that bonuses should be a subject of negotiation and that the amount of the bonuses should be determined by both the Company and Union. On December 28, 1961, the Pascagoula Metal Trades Council, in anticipation of asserting this demand, wrote a letter to the Company stating: In making our preparations for negotiating a new contract the Union needs certain information concerning the incentive policy of the Company. We, there- fore, request that you make available to us all information and records pertaining to piece work and the incentive system used by the Company, including rates and time studies.7 The first of some 20 collective-bargaining conferences began on January 8, 1962, and extended to the following March 16 when the parties agreed on the terms of a contract. The subject of the bonus, however, was discussed for the first time at the meeting held on January 26. At that meeting, the Union requested that the bonus rates which heretofore had been set exclusively by the Company, should be a subject of negotiation and determined by the Company and Union jointly. To this end, the Union submitted a written proposal to the Company that reads as follows: e This is particularly cogent in view of two union members' testimony, detailed later on, that their union in explaining the provisions of the new agreement at a union meeting failed to apprise them that the bonus system, which is the crux of this proceeding, was eliminated. 7 The terms "bonus system" and "incentive system" are synonymous. 717-672-64-vol. 148-47 724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Company shall not engage in any piece work or incentive plans unless the price and norm has been agreed upon by the Craft Union involved and the Metal Trades Council.8 The Company's representatives agreed to take the matter under advisement but to defer its consideration until a later meeting. The next meeting at which the bonus matter was discussed occurred on February 5. The results of this meeting were inconclusive. The bonus system was again discussed at the meeting held on February 15. No agreement was reached but the conferees agreed to extend the current contract which expired that day pending continuing negotiations. It was also decided to arrange a meeting for the next day between the Company and officials of the Boilermakers Union as the bonus system primarily affected the members of that union. It was understood that any agreement which might be reached by this subcommittee was subject to confirmation by the full ne- gotiating committee. This meeting between the Boilermakers Union and Company was held on Feb- ruary 16. The Boilermakers officials' insistence that the contract should include a clause providing that any complaints with respect to the bonus system, particularly the determination of rates, should be adjudicated by arbitration was rejected by the Company.9 On the morning of February 17, the same conferees met, with the addition of one Guest, a vice president of the Respondent Company, who was present for the first time to explain how the bonus system operated. Guest, however, refused the Union's request to furnish the union negotiators with the norms and standards used in de- termining the bonus rate structure and how it is computed, whereupon the union representatives claimed they would be unable to negotiate bonus rates unless the Company gave them this information. The Company refused to furnish this in- formation alleging it would react to their competitive detriment in making bids for ship repairs and construction.1° The Union then proposed that the bonus be com- puted on a daily basis instead of a weekly basis as was the present arrangement. When the Company stated it could not agree to this proposal, the officials of the Boilermakers Union recommended that the bonus system should be eliminated. In its stead, the Union proposed a 50-cent increase in the hourly wage rate of those crafts affiliated with the Boilermakers. When no agreement could be reached on this proposal, the conferees agreed to recommend to the full negotiating committee that the bonus system should be abolished. The subcommittee participants at these bargaining sessions then reported to the full negotiating committee on the afternoon of February 17, that it was agreed to dis- continue the bonus system, the company officials stating, at that time, that it had "reluctantly" agreed to this. The company officials then requested the Machinists Union representative, whose members were the other craft besides the Boilermakers to be affected by the abolishment of the bonus, what his views were with respect to this question. The Machinists Union representative stated he favored the elimina- tion of all bonuses. The union representatives then withdrew from the meeting and held a caucus at which time they agreed to the elimination of the bonus. It was then agreed by the full negotiating committee to discontinue the bonus system but not before the Company stated that the record should show that this action was initiated by the Unions and at their request. Alexander, International representative of the Boilermakers, announced during this negotiating session that his union was opposed to bonuses but was agreeable to attempting to work out a bonus system "with reason- 8 The terms "piece work" and "incentive plans" have reference to what has been re- ferred to heretofore as the bonus system. 9 This proposal, stated the Union, was advanced in view of the Company's policy for the past 20 years that setting the bonus rates was its exclusive prerogative This is evi- denced by the fact that in the past whenever bonus rates were established for new jobs or existing rates changed by the Company, it did not give prior notification to the unions affected by such rate changes. The Company, on the other hand, has maintained con- sistently that the bonus system must be administered solely by It. Since the inauguration of the bonus system, the union acquiesced until negotiations commenced for the current contract. io Weeks, a company negotiator, testified that this information requested by the Union . determines all the scientific facts and figures [in setting] each particular rate," and it could not be disclosed as it might get into the hands of Its competitors and place the Company in a, disadvantageous competitive position in bidding for business Walker, the Company's director of labor relations, testified that the Company refused to turn over to the unions the "rate books which contain, the basic Information upon which the amount of the bonuses are computed. THE INGALLS SHIPBUILDING CORPORATION 725 able ground rules" which would furnish the Union with information as to what the daily norm would be; how the bonus rate was to be determined and in the event of disagreement, the establishment-of a grievance procedure which would provide for arbitration. Section 13 , Article XXX, of the Boilermakers constitution (General Counsel's Exhibit No. 15 ) reads as follows: DUTY TO ELIMINATE INCENTIVE SYSTEMS THE INTERNATIONAL BROTHERHOOD reaffirms its opposition to all wage incentive , work measurement, job evaluation and merit wage systems in industry. It shall be the duty of the International Brotherhood and all of its subordinate bodies, where such wage incentive , work measurement, job evalua- tion and merit wage system do exist, to seek in their collective bargaining agree- ments to achieve this end by eliminating or ameliorating such conditons. The last meeting at which the bonus was discussed was held on March 6. The Union requested, in view of the bonus being eliminated , which would result in a con- siderable monetary decrease in pay to the members of the Boilermakers Union, that the Company compensate the employees for this loss by agreeing to an hourly wage increase of 20 cents to be spread over a period of 2 years . No agreement was reached on this proposal. At this same meeting, company officials expressed their fear that the employees' production might not only decrease now that the parties had agreed to discontinue the bonus but also that the Company 's financial situation might be aggravated. With this concern in mind, the Company requested cooperation from the Union in order to maintain the same production standards as then existed . Union officials assured the Company that even though bonus payments were dropped they would cooperate in seeing that their members maintained the same production level that existed when the bonus system was in effect. With this assurance, the Company agreed to the abolishment of the bonus. A contract was executed by the parties on March 16 , 1962, to terminate Febru- ary 15, 1965, which provides an hourly wage increase of 7 cents the first year , 7 cents the second year, and 8 cents the third year, but no mention is made in the contract of the bonus system, nor have any of the contracts executed by the parties in the past made reference to the bonus system. When the Union requested that a provision be inserted in the contract stating that no bonus plan shall be established unless the price and norm were agreed upon by the local craft union involved, company officials replied that this was not necessary as the parties had agreed previously to discontinue the bonus itself The Boilermakers Union immediately thereafter called a meeting of its members to consider the provisions of the new contract. At this meeting the union officials failed to disclose to their members that the bonus had been abolished . The finding that the union officials made no mention at this meeting of the elimination of the bonus system is based on the credited testimony of Prassenos and Welborn , members of the Boilermakers Union. This finding is fortified by Welborn 's testimony that the union officials who explained the new contract, told them in answer to a question from the floor that "the bonus was not affected " Welborn further testified that Goodman, a union official, told him it was the Company that caused the bonus to be abolished . Corroborative of the finding that the union members were not in- formed at the meeting of the abolishment of the bonus system is the testimony of Howard B. Bennett , president of the Metal Trades Council , who admitted that "quite a few" of the employees had complained to him that they had not been informed about negotiations with respect to the bonus . Moreover, it is reasonable to assume that the members would have objected immediately at the union meeting if they had been told at that time that the bonus was eliminated . That this is a reasonable as- sumption is shown by the members immediately taking action to have the bonus restored when they later learned that it was no longer in effect. Shortly after the contract was approved by the membership at the union meeting. rumors began to circulate around the shipyard . that the bonus was eliminated. This rumor was confirmed as fact when union members went to Goodman 's office and, when asked by them , he stated that the bonus was no longer in effect. The employees were disturbed by this information and immediately took action to secure the reinsti- tution of the bonus system as its elimination entailed an average annual salary loss of approximately $ 1,500 for the machine burners, layout men, and machine operators Eighty-eight dissident members of the Boilermakers Union signed a petition request- ing that the bonus be returned to them. Some of the employees complained to com- pany officials who referred them to their union . The employees presented a.petition to Lambert, their president, and asked his help in processing the petition. He refused to have anything to do with it. They then took their petition to Goodman, Interna- 726 DECISIONS OF NATIONAL LAItOIt $ LATIONS BOARD tional trustee of Local 693 of the Boilermakers Union. Prassenos, one of the dis- sident union members, testified that when he presented the petition to Goodman and asked his aid in having the bonus reinstated, "[Goodman] flew off the handle there, said he didn't appreciate us issuing him ultimatums . . The employees were disappointed by the attitude of their union officers and this discontent was evidenced by production in the shipyard decreasing rapidly. With production dropping, complaints rife, and workers bitter, the Company became con- cerned about employees' morale and this deteriorating production situation. Appeals were made directly to the Union to consider reestablishment of the bonus system in order to solve the dilemma in which the Company found itself. When the Union displayed an impassive reaction, the Company took the initiative and arranged for the Union to meet with it in order to discuss the production decrease generally and the bonus question specifically. In preparation for this meeting, the Union wrote a letter to the Company on April 18, 1962, signed by the president of the Council and an official of the Boiler- makers Union, which reads as follows: Prior to contract negotiations in February 1962, I requested that our bargain- ing agent, The Pascagoula Metal Trades Council, write you a letter requesting all pertinent information on the incentive plan which has been operated by the Ingalls Shipbuilding Corporation for the past several years, but has not been covered by the collective-bargaining agreement. I have to this date, not received the information from you. I am again requesting this information so we can intelligently bargain with the Company on the incentive plan. I am again requesting this information at your earliest convenience. At this meeting in April, which the Company arranged with the Union to attempt to work out a solution to the critical situation then existing in the shipyard, the Company submitted a written proposal to the Union which provided that the same bonus system should be reestablished under the sole administration of the Company as it had been for the past 20 years. The meeting was inconclusive and at a second meeting, the Company presented another written proposal which was substantially the same as the first. The Union would not agree to either of these two proposals and, in turn, submitted a counterproposal, a few days later, around the end of April, which provided for the Company and Union to administer the bonus system jointly, and for the Company to furnish the Union with all information concerning the determination and computation of bonus rates. This was unacceptable to the Company. With prospects bleak that the Union would agree to the reinstitution of the bonus and production continuing to decrease, the Company's dilemma was accentuated further when a dissident group of riveters, a craft under the jurisdiction of the Boilermakers, notified the Company that unless their bonus was restored they would quit and accept employment with a competitor of the Respondent Company. Choquette, a company official, then notified Goodman of the situation with respect to the riveters. Faced with the riveters' threat, which was becoming increasingly imminent with the passage of time, the company officials notified the Union on or about May 5, 1962, that the matter had become so serious that it would be necessary to reinstitute the bonus payments for the riveters." A meeting was then held between this dissident group of riveters and the com- pany officials. There were no union officials present at this meeting. The riveters requested the Company to reinstate the bonus payments and approximately 6 or 7 weeks after its discontinuance their request was granted about the first week in May. When the dissident group of fabrication shop employees,12 who also come under the jurisdiction of the Boilermakers, and who had had little success in getting their union to initiate action to have their bonus restored to them, heard a rumor that the riveters had had their bonus payments reinstated, they asked Goodman, their union official, to ascertain if this were true. He contacted the Company and learned the riveters' bonus was restored to them although the company officials referred to it as "premium pay" based on the number and size of the rivets driven. Upon learning that the riveters' bonus had been restored and evidently recalling their union officials' apathy previously to initiate steps to process their petition re- "Goodman testified that both Choquette and Moran , company officials, notified him of the problem they were having with the riveters. 32 Layout men , machine burner men , and shipfitters. THE INGALLS SHIPBUILDING CORPORATION 727 questing reinstitution of their bonus,13 they did not report for work the following day, May 9,14 in order to focus attention on their plight with the hope that their union officers would be constrained to help them.15 On May 9, the day they did not report for work, this dissident group of union members again went to their union offices and requested Goodman, their representa- tive, to arrange for a meeting with the Company with a view to having their bonus payments reinstated. Goodman stated he was unable to contact the Company to arrange such a meeting whereupon a group of the rank-and-file union members, none of whom were union officials, arranged that same day for a meeting with the Com- pany on the following day.16 The company officials who agreed to the meeting told this dissident group to have their union officials attend this meeting. At this meeting on May 10, a committee of six which represented the dissident union members, refused to sit down with the president and another officer of their union and requested the Company to exclude them from the meeting. It was ex- plained to them that the law required their presence but they persisted, agreeing, however, that another union official, Goodman, might remain. Goodman, however, refused to stay under these conditions. However, Bennett, the president of the Pascagoula Metal Trades Council, remained during the meeting in the role, to quote him, merely as an "observer." The committee, all of whom were union members, presented a petition to the Company signed by approximately 200 of their fellow workers,17 requesting the reinstatement of their bonus and alleging that its elimina- tion had worked a great financial hardship on them. Prassenos, one of the committee representing the dissident group, testified that the elimination of the bonus entailed an average annual loss of $1,500 for the machine burners, layout men, and machine operators. Prassenos, whose testimony is credited, told the company officials they requested a meeting with them "because we couldn't get the proper union representa- tion. . Prassenos then turned to Bennett, the president of the Council, and asked him if the dissident group was violating the law or union regulations by meet- ing with the Company and Bennett assured him they were not. The matter at hand was then discussed by the conferees and the company officials advised that they would consider the dissident group's request. When the meeting ended, Goodman, the Boilermakers' official, who had waited outside the meeting room, was told by Choquette, a company official, that "they would probably have to reinstitute the bonus because production . . . was `shot to hell.' " The record fails to disclose that Goodman made any protest. The bonus was restored later the same day and Goodman was so notified by the Company that day. On May 10, a group of "drillers," another craft under the Boilermakers' juris- diction, complained to the Union that they wanted their bonus payments reinstated. A meeting was held with the Company on May 11 and a committee of three appointed by this dissident group of drillers 18 asked the company officials to return to the bonus system. The Company then asked the union officials who attended this meeting their views with respect to this request by the committee representing the dissident drillers. The union spokesman, Goodman, replied, "I have told the Company that the Union was not going to negotiate it until we had been supplied with this information that we asked for. [Goodman] said, `We cannot without the approval of the council negotiate this until this information is supplied.' " Goodman told the drillers' committee members, who were disturbed by the Union's position, that if they asked for the return of the bonus, "They were asking for it over the Union's objection." The bonus was reinstituted for the drillers around May 14, 1962. 13 Prassenos , a union member, when asked if his union told him they would attempt to have the bonus payments restored, testified* "They never did say they would -try to get it back." 14 They first notified Lambert, their union president, of their intention not to report for work the following day who, according to Prassenos said, "I'm not going to tell you not to ; I'm not going to tell you to . go with my blessing and don't make me out a liar and he went straight and told some company officials what we was going to do . . . " 15 The Pascagoula Metal Trades Council notified the Company by telegram the same day that this was an unauthorized work stoppage General Counsel's Exhibit No 5, article XII, section 5, page 22, provides that the Metal Trades Council shall be primarily re- sponsible for the prevention of work stoppages because of jurisdictional disputes 1s Prassenos, one of the dissident union members , who arranged the meeting, told Walker, a company official, that his group would not return to work until a meeting was arranged to discuss the reinstitution of their bonus 17 Evidently the petition which originally had 88 signatures was supplemented at the time of this meeting by an additional 112 signatures. 1e One member of this committee was not a ua!on member 728 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On May 15 a group of dissident Machinists Union members requested their busi- ness agent to arrange a meeting with company officials to discuss the bonus He agreed to their request but advised them he would protest their request for re- institution of the bonus because they were not a duly authorized negotiating com- mittee. On May 19 this dissident group of the Machinists Union met with company officials to request that their bonus be returned to them. The president of the Metal Trades Council attended the meeting at the invitation of the Company, as did the business agent of the Machinists, who voiced his protest to the bonus being reestablished by the Company for the members of his union. On May 21 the bonus was reinstituted for the employees of the Machinists craft. The Company, at the request of dissident groups of the melt welders, night-shift welders, and mold loft men, 19 all constituent crafts of the Boilermakers Union, arranged for individual meetings with these three groups in May and June to discuss their requests for reinstitution of the bonus as it had operated in the past 20 Officials of the Boilermakers Union and Pascagoula Metal Trades Council were invited by the Company to attend these meetings but they refused to do so on advice of their attorneys. Goodman testified that he told Choquette, a company official, that if the members of his Union wanted to process their grievance without the Union "that is perfectly all right with us . but we can 't meet with you to discuss an increase in wages at this time. ... Goodman, the Boilermakers official , also advised the Company that the executed contract could not be reopened to negotiate the bonus question as this was a matter of wages and not subject to amendment. More- over, he testified, if he attended these meetings, "the Company might consider that as not bargaining in good faith if we tried to reopen the contract right after it was signed." Goodman also testified that the reason he did not attend these meetings was because the employees ' complaints concerning the bonus should be processed under the grievance procedure provided for in the contract . Furthermore , Goodman testified that reinstitution of the bonus would be tantamount to an amendment of the contract which contains a provision stating that this cannot be done except by mutual consent of the parties 21 The melt welders , night-shift welders, and mold loft men had their bonus payments returned to them shortly after each of these crafts had their meeting with the Company. The Company justifies the reestablishment of the bonus payments to these various crafts on the ground that employees' production had decreased so drastically upon its elimination, that economic considerations compelled them to reinstate the bonus system 22 Moreover, the Company contends that not only did the Union breach its commitment to maintain production at the same level that it was before the bonus was eliminated , but the Union also failed to cooperate with the Company in working out a solution when it complained of the drastic production decrease Walker, a company official, testified that when he complained to Goodman , the Boilermakers union official, Goodman said, "that [the employees] know what a day's work is." In a patent reference to maintaining production, Prassenos, a member of the Boilermakers Union, testified that Goodman told the members at a union meeting that, ". . . we did not have to make our rate ; there was nothing that could be done about us not making our rate." Prassenos also testified that Lambert , their union president, told some of the members that "if they didn't hold the production up to . .. where it was before the bonus [was discontinued ] the [Company] would eventually come to us asking for [the bonus] to be reinstituted and negotiated as a 19 The mold loft men asked their union representative , Goodman, to attend a meeting they had arranged with the Company, but Goodman refused to meet with the Company stating this was not feasible "because the contract had already been signed " The mold loft men also failed to report for work 1 day 20 The majority of these dissidents were union members 21 See article XXIII, section 3 , page 41 , of General Counsel's Exhibit No. 5. 2. Walker, director of labor relations for the Company, testified that some of the em- ployees were producing "below half" of what they were when the bonus was in effect and that the unions failed to keep their promise to cooperate in seeing that their members maintained the same production they had before the bonus was eliminated Walker also testified that union officials told the Company 's employees they could ignore production standards and make their own determination of a fair day's work . He testified also that when the Company issued warning notices to those employees whose production decreased drastically , some as much as one-half , the Union protested these warning notices by filing grievances on behalf of those employees who had received such warnings and Goodman defended the individual employees ' production decrease on the ground that "these men knew what they could do personally and they should not be issued a warning slip " THE INGALLS SHIPBUILDING CORPORATION 729 contract." Landner, a member of the Boilermakers Union, testified that after the bonus system was discontinued, Goodman told him that it was not necessary for him to meet the production requirements which had been in effect before the bonus was eliminated. As experience had revealed that production decreased drastically by the elimina- tion of the bonus system and with the Union unhappy about the reinstitution of the bonus system, it was agreed by the Company and Union to have their respective industrial engineers meet. The purpose of the meeting was to attempt to resolve the bonus controversy. At the first of two meetings, on July 5, the Union submitted its proposal requesting information as to how the bonuses are computed. The Union insisted that bonuses are a mandatory subject of bargaining inasmuch as bonus payments are an integral part of wages. Therefore, contended the Union, the Com- pany is required to furnish this information. The Company informed the Union that its demands were unacceptable, alleging that if such information were obtained by its competitors, it would cause the Company serious harm in bidding on contracts. At the second meeting on the following day, the Union again requested from the Company the original data upon which the bonus rates are computed by the Company and also a copy of the rates. The Company refused to furnish the information for the reason stated above, whereupon the meeting adjourned on July 6, with no plans for any further meetings. On July 9 the Union wrote a letter to the Company, which reads as follows: This is to confirm the statements which were made to you the morning of July 6, 1962. The Union is unalterably opposed to the Company's unilateral introduction of any piecework program in the yard. We will vigorously oppose the unilateral introduction of any such program by all means available to us. We indicated to you that the Union is sincere in its desire to attempt to negoti- ate with Ingalls Shipbuilding Corporation a fair piecework program to cover certain designated work classifications. Such a program which would have to be agreed to by both parties, would have to contain the following minimum protections or ground rules: (1) Employees working piecework would have to be provided with a realistic opportunity to earn incentive premium; a realistic opportunity as we indicated would be at least twenty-five per cent (25%) of the designated classification base rate. (2) The company cannot change an established piecework standard un- less it institutes a significant change in operation, work conditions, and/or work method. We cannot be a party to any agreement whereby employees are financially penalized when they exercise their initiative and ingenuity. (3) The union if it is to intelligently participate in the administration of a piecework program must receive a copy of all piecework standards issued. It must further have the right to examine all wage incentive and work measurement data in the possession of the company relative to a piecework standard which has had a grievance filed against it. On July 10 the Company replied as follows: This acknowledges your letter of July 9, 1962. The demands outlined by the Union as the "minimum protection or ground rules" for the bonus system are substantially more restrictive than your initial proposals. We do not feel that you are sincere in your efforts to resolve our mutual problems when each com- promise solution offered by the Company is met with new and additional de- mands on the part of the Union. It is earnestly requested that you review your demands in the light of the Company's proposals, and advise when you may be prepared for further discussions. Before this exchange of letters in July, the Pascagoula Metal Trades Council had filed a charge on May 16, 1962, which was thereafter amended on May 29, 1962.23 The complaint issued on July 16, 1962, was amended on July 23, and hearings in this proceeding were commenced on August 7, 1962. =9 Neither charge makes any mention of the allegation in the complaint that the Respond- ent has refused to furnish the Union with information regal ding the bonus plan As to whether there is a sufficient relationship between the allegations in the complaint and the language in the charges Is not determined as this matter was not raised by the Re- spondent. See J. H. Rutter-Rem Manufacturing Company, Inc , 86 NLRB 470, 473. 730 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Issues 1. Did Respondent Company in dealing with dissident groups of employees whose production bonus had been discontinued violate Section 8(a) (5) when it reinstated the bonus? 2. Did Respondent fail to furnish the Union with necessary information regarding the bonus system in a manner violative of Section 8(a) (5)? 3. Should this proceeding be dismissed because the Metal Trades Department is the certified bargaining representative and not the Metal Trades Council which is the Charging Party? Contentions The General Counsel contends that when the Respondent met with the complain- ing groups of employees, regarding the elimination of their bonuses, after the current contract was executed, even though the Union was so notified and invited to attend, and the bonus system was reinstated without the consent of the Union, this was a violation of Section 8(a) (5). He substantiates this contention by pointing to a pro- vision in the parties' collective-bargaining agreement which states that the agreement shall not be amended or supplemented except by mutual consent of the parties thereto, reduced to writing, and duly signed by each.24 Respondent defends the charge by referring to Section 9(a) of the Act which provides that employee groups may have their grievances adjusted, without interven- tion of the bargaining representative, as long as the adjustment is not inconsistent with the terms of a collective-bargaining contract then in effect and, provided further, that the bargaining representative has been given an opportunity to be present at such adjustment. Respondent argues that its reinstitution of the bonus system was the adjustment of a grievance under the grievance procedure provided for in the parties' contract and was not inconsistent with the terms of the current contract. It was, claims the Respondent, not unilateral as the Union was invited to attend the meetings at which the reinstitution of the bonus system was discussed. The General Counsel's answer to this argument is that the protection of Section 9(a) can only be invoked when the grievance is not covered by the collective- bargaining agreement, and also, the adjustment sought in such procedure must not be inconsistent with such agreement. The Respondent also claims that it did not act unilaterally in reinstitution of the bonus system in that the quid pro quo for its agreement to eliminate the bonus was the Union's assurance that production would be maintained at the same level as when the bonus system was in effect. When the Union breached its agreement and the employees failed to maintain the same production they had prior to the abolishment of the bonus, the Respondent considered its agreement to abolish the bonus no longer binding because of a failure of consideration on the part of the Union and therefore, it had carte blanche to negotiate the reinstitution of the bonus with the dissident groups of employees. The General Counsel also alleges that the Respondent failed to furnish the in- formation requested in the Union's letters of December 28, 1961, and April 18, 1962, in order for the Union to bargain on the subject of the bonus system. Respondent defends this charge, alleging that the Union's letters were "two very vague requests for information" which prevented it from knowing what information was being requested and who was requesting it. Moreover, argues Respondent, its vice president was present at a negotiating session at which he was "available to explain the bonus system and answer any questions." Furthermore, contends Respondent, the indi- vidual rate data requested by the Union is considered highly confidential and the equivalent of a "trade secret," the divulgement of which would place it at a serious competitive disadvantage. Finally, states Respondent, the information requested in the Union's letter of December 28, 1961, was furnished in the course of the ensuing contract negotiations. Discussion The Reinstitution of the Bonus The keystone of the arch of collective bargaining is the exclusive authority of a union, upon its selection as bargaining representative by the majority of the employees in an appropriate unit, to represent and bargain for all the employees in that group. Based upon this concept, it would appear that bargaining on the part of an individual or a minority group of individuals is banned by the Act as an impediment to effective bargaining by the representative, chosen by a majority of the employees. However, u General Counsel's Exhibit No. 5, article XXIII , section 8, page 41. THE INGALLS SHIPBUILDING CORPORATION 731 this exclusive representative status is not as all-encompassing as it would seem as it is subject to the qualification that there is reserved to the employees, under certain circumstances, the right to deal directly with their employer. Prior to enactment of the Taft-Hartley Act in 1947, this reserved right was stated by Section 9(a) of the Act as follows: ... any individual employee or a group of employees shall have the right at any time to present grievances to their employer. To this proviso of the original Act was added the following language by the Taft- Hartley Act amendment of 1947: . and to have such grievances adjusted, without the intervention of the bar- gaining representative, as long as the adjustment is not inconsistent with the terms of a collective-bargaining contract or agreement then in effect: Provided further, That the bargaining representative has been given opportunity to be present at such adjustment. A case which dealt with Section 9(a), as originally enacted, was North-American Aviation, Inc.25 In that proceeding the collective-bargaining agreement provided in detail for a system of handling and disposing of employee grievances. Nevertheless, the employer unilaterally established a separate procedure for the settlement of grievances presented by employees individually. The Board held that where there was a grievance procedure already established as a result of collective bargaining between the employer and the exclusive representative of its employees, that the unilateral establishment of a separate grievance procedure was in derogation of the provisions in the contract treating of that subject and a refusal to bargain exclu- sively with said representative in violation of Section 8(a)(5). The Board stated that while employees have the right under Section 9(a) to present grievances indi- vidually, such grievances must be disposed of in accordance with the provisions of the collective-bargaining agreement. The Board, in the course of its decision, stated that "There is no distinct cleavage between collective bargaining and the settlement of grievances, whether individual or group." 26 [Emphasis supplied.] The order of the Board was set aside by the court 27 which held that the employer could not be ordered to cease the separate hearing and adjustment of his employees' grievances even though a complete grievance procedure had been established by the existing collective agreement. The court stated that "It is well to appreciate that the proviso of Section 9(a) is on its face a right preserved to the employee. No doubt the reason for this is that under the scheme of collective bargaining a bare majority controls the whole body of employees and that, in this circumstance, the right should be preserved, to the individual (or a group) to go to his employer with any grievance he may harbor notwithstanding any provision in the collective agree- ment. It may also be that the Congress intended, by this proviso, to assert the policy that individuals or group of individuals in spite of any agreement to the contrary may possess the right of registering their grievances with the employer." 28 The decision of the Board in the Hughes Tool Company case,29 decided in 1944, which involved Section 9(a), before its amendment in 1947, dealt with the extent to which a certified bargaining representative may participate in the adjustment of grievances. In this case, the certified union entered into a contract with the employer whereby grievances were to be processed by the union. A union which was not the certified bargaining representative of the employees was permitted by the em- ployer to represent some of the employees in the adjustment of their grievances. The Board held that the employer's conduct in adjusting grievances through a minority union was in derogation of the certified union's exclusive right to bargain and a violation of Section 8(a)(5) as was the employer's disposition of grievances through direct negotiation with employees without affording the certified union opportunity to participate. The Board based its findings upon the observation that grievances involve questions affecting all members of the bargaining unit and that they, there- fore, are properly the subject of collective bargaining. The Board consequently concluded that the bargaining mandate of the Act requires that the bargaining agent be permitted to negotiate for the adjustment of all grievances. The Board interpreted the proviso to Section 9(a) of the original Act as follows: Individual employees or groups of employees may appear in behalf of themselves at every stage of the - 44 NLRB 604 (1942). 21 Ibid., at page 611 136 F 2d 898 (C.A. 9) (1943). 136 F 2d 898, 900, footnote 2. 56 NLRB 981, enfd. as modified 147 F. 2d 69 (C A. 5). 732 DECISIONS OF NATIONAL LABOR RELATIONS BOARD grievance procedure, but the exclusive representative is entitled to be present and negotiate at each such stage concerning the disposition to be made of the grievance. Where, however, the exclusive representative refuses to participate in the adjustment of the grievance, the employer may deal with the aggrieved employees alone. The court sustained the Board's order that the employer cease and desist from adjusting grievances with anyone but the certified union and enforced that part of the order requiring the employer to notify the union in order for it to be present to protect its rights.30 The court in construing Section 9(a) of the Act, disagreed with the Board's view that all grievances do in fact present issues properly within the scope of the collective-bargaining process. Stating that some grievances may be concerned only with "some question of fact or conduct peculiar to the employee," the court held that the Act permitted the employer in such cases to make an adjustment directly with the employee without permitting the bargaining representative to participate The court added, however, that, even where the employer believes the grievance to be of this special personal character, he must notify the exclusive representative of the pendency of the grievance hearing so as to afford the representative an op- portunity to protect the bargaining rights of the employees within the unit by ascer- taining whether the grievance is in fact one of a personal character or whether it is properly the subject of collective bargaining. In a later case, the Board accepted the court's modification of its Hughes decision.31 The Board also held in the J. I. Case decision that although "the right of individual bargaining was subordinate to the collective agreement and to the collective bargain- ing rights of the statutory representative, and could not be exercised in derogation thereof," nevertheless, "an employee and his employer may bargain individually with respect to those aspects of the employment relationship which are not covered by a collective bargaining agreement, provided it is not inconsistent with the collective agreement, or does not amount to, or result from, or is not a part of an unfair labor practice." The Board also noted the court of appeals' acceptance of its view expressed in the Hughes Tool case that whenever the employee individually seeks to present a grievance to his employer, the statutory representative should be notified and "on its request . be admitted to the hearing .. . Shortly after the J. I. Case decision, Section 9(a) was amended in 1947 and the rights of individual and group grievants amplified by the addition of the following language: . and to have such grievances adjusted, without the intervention of the bar- gaining representative, as long as the adjustment is not inconsistent with the terms of a collective bargaining contract or agreement then in effect: Provided further, That the bargaining representative has been given an opportunity to be present at such adjustment. The legislative history of Section 9(a) reveals it was the Congress' purpose in amending this section to further circumscribe and diminish the majority representa- tive's participation in employees' complaints-in order to "add to the freedom of workers by permitting them not only to present grievances to their employers, as the old Board has permitted them to do, but also to settle the grievances when doing so does not violate the terms of a collective-bargaining agreement, which the Board has not allowed." 32 [Emphasis supplied.] The Senate in its report stated with respect to Section 9(a) the following: An amendment contained in the revised proviso for section 9(a) clarifies the right of individual employees or groups of employees to present grievances. The Board has not given full effect to this right as defined in the present statute since it has adopted a doctrine that if there is a bargaining representative he must be consulted at every stage of the grievance procedure, even though the individual employee might prefer to exercise his right to confer with his em- ployer alone. The current Board practice received some support from the courts in the Hughes Tool case (147 F. (2d) 756), a decision which seems inconsistent with another circuit court's reversal of the Board in N.L.R B. v. North American Aviation Company (136 F. (2d) 898). The revised language would make it clear that the employee's right to present grievances exists independently of the rights of the bargaining representative, if the bargaining representative has been 90 147 F. 2d 69 (C.A. 5) (1945). 'n J. I Case Co., 71 NLRB 1145 ( 1946). sa H.R. 245, 80th Cong, 1'st sess. p 7, Legislative History of Labor Management Rela- tions Act, 1947, vol. 1, p. 298 (U.S. Government Printing Office). THE INGALLS SHIPBUILDING CORPORATION 733 given an opportunity to be present at the adjustment , unless the adjustment is contrary to the terms of the collective -bargaining agreement then in effect 33 [Emphasis supplied.] Senator Murray in explaining Section 9 (a) stated: In further protection of the rights of employees and to insulate employers from possible charges of unfair labor practice charges, we have . clarified the right of individuals or groups to settle and adjust grievances under Section 9(a) of the Act whenever the bargaining agent although given the opportunity to participate, nonetheless does not indicate a desire to take part in the adjustment.34 [Emphasis supplied.] Representative Hartley stated: Section 8(a)(3) of the Amended Labor Act in the House bill provided that nothing in the Act was to be construed as prohibiting an employer from forming or maintaining a committee of employees and discussing with it matters of mutual interest, if the employees did not have a bargaining representative. This provision is omitted from the conference agreement since the Act, by its terms, permits individual employees, and groups of employees , to meet with the employer, and § 9(a) of the conference agreement permits employers to answer their grievances." 35 [Emphasis supplied.] After the reenactment of Section 9(a) in 1947 , a leading case interpreting it was Douds v. Local 1250, Retail, Wholesale Department Store Union of America, CIO (Oppenheim Collins & Co. ) 36 In that case, following certification of a majority un- ion, defendants , a minority union , had been enjoined from striking . After the issuance of the injunction , the minority union, on behalf of 51 strikers, requested the company to negotiate with it regarding the reinstatement of these strikers . The company re- fused to do so. The employees who were seeking reinstatement thereupon continued to picket the company's premises . The lower court found this was a violation of the injunction. Taking the view that inasmuch as the Act prohibits strikes which have for their purpose the forcing of an employer to adjust any "grievances" which the certified union had already adjusted by a collective-bargaining agreement , the court of appeals held that since it was not shown that there had been any collective-bargaining agree- ment which had adjusted the question of the reinstatement of the striking employees, the trial court had erred in finding that a violation of the injunction had occurred. The court, speaking through Judge Learned Hand, held that the minority union did not infringe upon the certified union 's exclusive bargaining status because the minority union's request to bargain with the company with respect to the reinstate- ment of the 51 strikers was an attempt to adjust a "grievance" as that term is used in the proviso to Section 9(a) of the Act . Significant also is the court's holding that the 1947 amendment of Section 9(a) "put an end to the distinction between" "grievances" and "other disputes " 37 The court pointed out that Section 9(a) of the Act, as amended in 1947, expressly gave the right to a "group " to adjust "grievances" without the help of the certified bargaining agent. The court held that until the certified union chooses to contract with the employer , and insofar as the collective- bargaining agreement leaves open any points in dispute, present or future, the employees retain the right to bargain for themselves, singly or collectively. However, held the court , any bargain made by such individuals or group is subject to the certified agent's power of cancellation. The court stated as follows: The single proviso of that section [9(a)] as it was in the [original] National Labor Relations Act, merely declared that "any individual employee or a group of employees shall have the right at any time to present grievances to their employer." It was possible to read this as meaning that "a group of employees" S. Rept 105 , 80th Cong , 1st sess., p. 24, Legislative History of Labor Management Relations Act, vol. 1, p 430 (U.S Government Printing Othce) 8493 Cong Rec. 5105, Legislative History of the Labor Management Relations Act, vol. II, p 1453 ( U S Government Printing Office). 3 H Conf. Rept. 510 on H R 3020, 80th Cong, 1st sess , p 45 173 F. 2d 764 (C.A. 2) (1949) 87 Id at pages 768 and 769 . See also Timken Roller Bearing Co v N.L R B , 161 F 2d 949 (CA. 6 ), where the court in rejecting the Fifth .Circuit's distinction in the Hughes Tool case between a "grievance" and a subject of collective bargaining Stated at page 955 "we do not view the term `grievances' as a term of art having a connotation differing from its meaning in ordinary use " See the section entitled "The Reinstitution of the Bonus, " supra, the italicized portion. 734 DECISIONS OF NATIONAL LABOR RELATIONS BOARD might adjust their "grievances" independently of any stipulations in an existing collective bargain between the employer and the certified agent of the "unit." However, as that obviously interfered with the finality of the certified agent's authority, the Board refused so to read it. The courts differed. The Ninth Circuit decided that there was no escape from so construing it; but the Fifth Circuit held that, although the proviso allowed not only the "presenting" of "grievances" but their adjustment, "grievances" must be understood to be limited to questions of minor importance. That court, moreover, went on to say that, although an individual may ask an "experienced friend to assist him, he cannot present his grievances through any union except the representative." When the Labor-Management Act was in Congress, the Senate Report declared that the "Board has not given full effect to this right"-that secured by the proviso of § 9(a)-"since it has adopted a doctrine that if there is a bargaining representative, he must be consulted at every stage of the grievance procedure, even though the individual employee might prefer to confer with his employer alone." The report then continued that the amendment made "clear that the employee's right to present grievances exists independently of the rights of the bargaining representative." Nevertheless the representative should be allowed to be present at the "adjustment" of the "grievance," if he wished; and the "adjustment" must not be inconsistent with the terms of any existing collective agreement. The amendment of the proviso and the second proviso which was then added, were almost in the same words; . . . This amendment put an end to the distinction between "grievances" and the other disputes. It may well be that it was proper to assume the existence of such a distinction, while the certi- fied agent's powers and the powers of a "group" were mutually independent; but any such necessity disappeared as soon as the authority of the certified agent was made expressly paramount. It then became the natural understanding that those "grievances," which could be "adjusted," comprised all disputes which could be covered in a collective agreement; and that meant every kind of dispute, for all disputes can be covered by a collective agreement. [Emphasis supplied.] The purpose or scheme, as so amended, seems to us consistent throughout. The certified agent's authority extends to all employees in the "unit," including those who have not voted for him; but his election and certification, as such, confer upon him only that authority; they do not, ex proprio vigore, affect the relations between the employer and the employees. They give him power to affect them by contract, but until he chooses to contract, and in so far as his contract leaves open any points in dispute, present or future, the employees retain their common-law right to bargain for themselves, singly or collectively. On the other hand, any bargain they may make is subject to his power to cancel it, for in so doing he acts for them as their agent, as much as though they had expressly authorized him to do so. His power to represent all within the "unit" is absolute and beyond question; but it does not automatically exclude them.38 It would appear, therefore, that the employer has the duty to bargain with the majority representative as to matters arising under the collective agreement. How- ever, as to matters not covered by the agreement, the employer may deal with individuals or groups, provided the settlement of the dispute is not inconsistent with any provision of the existing contract and the bargaining representative has been given an opportunity to be present. Conclusions The General Counsel's allegation in the complaint that the Respondent "since on or about March 1962 . . has refused to bargain in good faith with the Union" is not borne out by the evidence. Isolated and individual incidents cannot be used to make a finding of an unfair labor practice; the overall actions and totality of con- duct of the Respondent in the context of all the circumstances revealed by the evidence must be considered in resolving this allegation. A refusal to bargain is usually based on the totality of negotiations or a pattern of conduct rather than a single action determining whether the employer sought to defeat rather than promote agreement 39 Moreover, the test of good faith in bargaining that the Act requires of an employer is not a rigid but a fluctuating one, and is dependent, in part, upon 38 Id at pages 768 and 769. 39 N.L.R B. v. I B.S. Mfg. Co., et al., 210 F. 2d 634, 638 (C.A. 5). THE INGALLS SHIPBUILDING CORPORATION 735 how a reasonable man might be expected to react to the bargaining attitude dis- played by those across the table 40 In this connection, a vital factor which must be considered in determining whether the Respondent in this case is guilty of a refusal to bargain within the meaning of Section 8(a)(5), is the contemporaneous conduct of the Union. If the Union's conduct in this proceeding should be found to be tantamount to a refusal to bargain in good faith then such action may remove the possibility of negotiation. Accord- ingly, the Respondent cannot be guilty of a refusal to bargain if the Union itself is. not bargaining in good faith41 The Union's manner of carrying out its statutory bargaining responsibilities in the instant case leaves much to be desired. The Union's affirmative actions, including its failure to make a full disclosure to its members of what the contract provided with respect to the elimination of the bonus, its apathy in processing its members' complaints for reinstitution of the bonus, its, failure to carry out its assurance to the Company that it would cooperate in main- taining production, which was the quid pro quo for the elimination of the bonus, its refusal to meet in some instances with the Company to negotiate the dissident em- ployees' request for the restoration of their bonus-all these actions on the part of the Union were the antithesis of good-faith bargaining which removed the possibility of effective negotiations and thus precluded the existence of a situation in which the Company's own good faith could be tested. "If it cannot be tested, its absence can hardly be found." 42 There is nothing in the record to indicate that the Union which has represented Respondent's employees since 1940 has not enjoyed an unbroken record of har- monious and successful collective bargaining with the Respondent Company for the past 22 years. Nor is there anything in the record to indicate that at any time Respondent has ever evidenced any animus toward the Union or any reluctance to bargain with it on matters which it believed were appropriate subjects for col- lective bargaining. The record fails to suggest that the Company's reinstitution of the bonus system was designed to undermine, belittle, or diminish the Union's influence, but rather that it was compelled to take defensive unilateral action in order temporarily to extricate itself from a serious production dilemma initiated by a causal chain of events which eventuated in the disgruntled employees being encour- aged by their union not to meet production standards. These probative factors as well as the Union's refusal on several occasions to accept the Company's invitation to negotiate the bonus matter, cast doubt upon the General Counsel's contention that Respondent after 22 years of successful negotiations, suddenly began in March 1962 to refuse to bargain in good faith. A correlative incidence of a refusal to bargain is its tendency to interfere with, restrain, and coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act. The Trial Examiner fails to see in which way the unilateral action of the Respondent in restoring the employees' bonus was an independent interference, restraint, or coercion of the employees in the exercise of those rights guaranteed to them by Section 7 of the Act.43 In determining whether a unilateral act is violative of the statute, the evidence must be treated within the framework of the entire bargaining situation. There is no specific provision in the Act prohibiting unilateral action. A study of those cases involving unilateral action where a violation was found reveals that the employer engaged in such conduct before negotiations or during negotiations which disparaged the bargaining process or undermined or discredited the union in order to deprive it of the bargaining representation conferred by the Act 44 Therefore, in the absence of evidence showing that the unilateral action was motivated by an attempt to undermine or subvert the union, an employer can make unilateral changes if done in good faith and after unsuccessful consultation with the union.45 4° See N.L R B. v. Truitt Mfg. Co., 351 U.S. 149, 153-154: N.L.R.B. v. American Na- tional Insurance Co, 343 U S. 395, 409. 41 Superior Engraving Company v. N.L.R.B., 183 F. 2d 783, 794 (C.A. 7). 42 Times Publishing Company, et al., 72 NLRB 676, 682-683. 43 See N.L.R.B. v. Exchange Parts Company, 304 F. 2d 368, 373, 374, 376 (C A. 5). The provisions of Section 7 will be found in footnote 1, supra " See N.L R.B. v. Crompton-Highland Mills, Inc., 337 U.S. 217; N.L.R.B. V. Benne Katz, etc., d/b/a Williamsburg Steel Products Co., 369 U S. 736. 4e In Sam if. Jackson, et at., 34 NLRB 194, the Board found it was not a refusal to bar- gain where the employer after four meetings with the union and no agreement was reached, raised wages without prior submission or notification to the union. The Board stated that although unilateral determinations during the course of bargaining negotia- tions normally evidence bad faith, nevertheless, under certain circumstances, especially 736 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Respondent Company clearly fulfilled all the requirements of good-faith bar- gaining. There were joint discussions on appropriate subjects of collective bargain- ing. It never refused to meet with the Union. It had not sought to undermine or subvert the Union and the reinstitution of the bonus occurred after the contract was signed and not during negotiations. The employees themselves had bypassed their own union but only after they were refused help by the president of their union in having the bonus system reinstituted.46 Also, Goodman, the International trustee of the Boilermakers Union, who had taken over the affairs of the local within the past year, was singularly apathetic in processing the members' request that their bonus be restored to them. Equally significant is the failure on the part of the union officials to disclose to their members that the bonus system was discontinued when the contract was explained to them at a union meeting. Aggravating this dereliction of duty on the part of these same union officials was their attempt to deceive its members by misinforming them (when the members later learned the bonus was abolished) that its abolishment was attributable to the Company's insist- ence. Then too, the drastic reduction in production resulting from the discontinu- ance of the bonus system which placed Respondent in the untenable economic position of requiring it to seek the Union's cooperation that production would be maintained, which was not forthcoming-cannot give rise to a refusal to bargain finding against the Company. On the contrary, the Company not only welcomed but solicited bargaining with the Union in order to resolve the dilemma in which it found itself, occasioned by falling production, walkouts by employees and a refusal by the Union to attend some of the meetings arranged by the Company to resolve these difficulties. By the Union refusing to attend some of these meetings, it actually refused to bargain in that it not only contributed to the possibilities of a complete breakdown in collective bargaining but it also negated any likelihood of agreement, and thereby increased the possibilities of industrial conflict, contrary to the expressed purpose of the Act. Of major significance is the fact that the Union, at no time subsequent to the execution of the contract and until after the riveters' bonuses were reinstated, specifi- cally requested the Company to bargain with respect to the situation created by the elimination of the bonus system. Nor did the Union protest the Company's action in reinstituting the bonus, despite its having knowledge this was done. Moreover, the Union's apathy in cooperating to solve the production problem (which problem the Company had warned might result from discontinuance of the bonus) made difficult the Company's efforts to work out a solution for the decrease in production. In the light of existing conditions which confronted it, it would appear unreason- able to hold that Respondent Company's dealing with the dissident groups of em- ployees was an unfair labor practice when it is considered that the Union advised its members not to take seriously the Company's request to maintain production at the same level it was before the bonus was discontinued. The Company in this posture, was clearly entitled to take not only defensive action to abort the walkouts, to prevent the continuing fall in production and to ameliorate the employees' discontent but also to expect the cooperation of the Union in resolving this critical situation. Instead, the Union preferred to use this serious situation as a tactical weapon to exert pressure on the Company to abandon the bonus system which the Company had inaugurated and unilaterally administered for the past 20 years. Moreover, there is evidence showing the Union took this attitude in the hope and with the expectation that with employees walking off their jobs and production continuing to fall, the Union could capitalize on this situation and thereby force the Company to capitulate.47 Further- where the employer continues to discuss proposals with the union, it will not constitute a refusal to bargain if it was not intended to, and if it does not have the effect of dis- couraging collective bargaining. See N.L R.B. v. Landis Tool Company, 193 F. 2d 279, 281-282 (C.A. 3) ; N L R B. v. Bradley Washfountain Co., 192 F. 2d 144, 147, 148, 150-151 (CA. 7) ; Westchester Newspapers, Inc., et al, 26 NLRB 630; Montgomery Ward & Company, Incorporated, 39 NLRB 229; Bob Morgan Motor Company, Inc, 106 NLRB 334; Jordan Bus Company and Denco Bus Lines, Inc, 107 NLRB 717; W. W Cross & Company, 77 NLRB 1162, enfd 174 F. 2d 875 (CA. 1) ; Exposition Cotton Mills Com- pany, 76 NLRB 1289, 1291-1292; Quaker State Oil Refining Corporation, 107 NLRB 34; Frohman Manufacturing Co, Inc., 107 NLRB 1308. Cf. Bethlehem Steel Company (Ship- building Division), 136 NLRB 1500, where the Board held no violation when the uni- lateral action occurred following expiration of the contract. 48 See District 50, Local No. 13366, United Mine Workers of America (Stubnitz Greene Corporation), 117 NLRB 648, where it was held to be a violation of Section 8(b) (1) (A) ,for the union to refuse to represent employees in the processing of grievances. Accord, .Emmadine Farms, Inc., 138 NLRB 1098. 47 See page 728 and footnote 22, supra. THE INGALLS SHIPBUILDING CORPORATION 737 more, it is reasonable to infer from the Union's conduct, both affirmative and nega- tive, that it was interested in carrying out and applying its International Union's policy of discouraging bonus systems.48 Where, as here, the Company had bargained in good faith, its unilateral action in reinstituting the same bonus system was a legitimate economic weapon not inconsistent with its statutory duty to bargain in good faith as the Company had no obligation to continue operating on an unsound economic basis caused by the unprofitable reduction in production 49 The motivation for the Company's reinstitution of the bonus stemmed not from a desire to circumvent the Union but from economic necessity occasioned by the Union's breach of its com- mitment to cooperate in seeing that its members maintained production. Nor have the provisions of Section 9(a) of the Act been transgressed by the Respondent in its dealing with these dissident groups as Section 9(a) does not prevent employees under the circumstances here disclosed, from engaging in activities to protect their economic interests. Neither can this right guaranteed to employees by the Act to engage in concerted activities for purposes of collective bargaining and other mutual aid or protection be limited or proscribed by any provisions in the parties' collective agreement which would deprive the employees of their individual rights.50 While Section 9(a) gives exclusive bargaining status to the representative chosen by the majority of the employees in the unit, at the same time it "preserves the right of individual employees or groups of employees generally to present com- plaints to their employer and to have such complaints adjusted, independently of the rights of the bargaining representative and without the intervention of the bargaining representative," provided the adjustment is not inconsistent with the terms of the collective agreement and the union was afforded an opportunity to be present 51 [Emphasis supplied.] As the collective agreement in the instant case was silent with respect to the bonus system, this is a matter outside of and not covered by the bargaining contract and under Section 9(a) the various dissident groups had a right to take their complaints directly to the Company provided the Union was afforded an opportunity to be present.52 In a case decided in 1949, after Section 9(a) was amended, the Board held: "Even when an exclusive bargaining representative has been selected, Section 9(a) specifically permits any individual employee or group of employees to present grievances to their employer." 53 It was not violative of the Act, therefore, consider- ing the Union's conduct, for the Company to have dealt with the dissident groups with respect to the restoration to them of their bonuses. The Supreme Court also held before Section 9(a) was amended that an employer may bargain directly with his employees with respect to those aspects of the employ- ment relationship which are not covered by a collective-bargaining agreement pro- vided it is neither inconsistent with the collective agreement nor intended to interfere with employees' rights under the Act.54 Thus, the collective-bargaining agreement as finally consummated defines or establishes the permissible area within which such individual bargaining may take place. As the current collective agreement (as well as the other contracts negotiated over the past 20 years) is silent with respect to the bonus system, which heretofore had been exclusively administered by Respondent, the scope of bargaining between the dissident employees and the Company encom- passed the bonus system and so it was not inconsistent with the collective agreement then in effect.55 Moreover, before the bonus was reinstituted, the Union was invited by the Company on various occasions to attend meetings held with the dissident groups in order to express its views. The only exception was in the Company's meeting with the riveters. However, in the case of the riveters, there was no attempt at concealment as the Company on more than one occasion, not only notified the Union that the riveters were threatening to quit but also advised the Union that it appeared as if it would be necessary to restore, the riveters' bonus to them. Although apprised of the situa- tion and notified of the Company's intentions, the Union neither requested a meeting nor did it protest the Company's proposed action. Even after the riveters' bonus was reinstated the Union did not request a meeting with the Company to discuss its 48 See page 725 for this provision of the Union's constitution. 40 See Precrete, Inc., 132 NLRB 986. 60 Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 744. 51 N L R B. v American Manufacturing Company of Texas, 203 F. 2d 212, 216-217 (C.A 5). S. Rept 105, 80th C'ong, 1st sess , p 24. See page 732, supra 63Douds v. Local 1250, Retail, Wholesale Department Stoie Union of America, CIO (Oppenheim Collins & Co ), 173 F 2d 764 (C.A. 2). 63 Agar Packing & Provision Corp, 81 NLRB 1262, 1265 64 J. I Case Company v. N.L.R.B , 321 U.S. 332, 339-341 (1944). 66Douds v. Local 1250, supra. 738 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reinstitution.56 Consequently, there was no bypassing of the Union. This one iso- lated meeting with the riveters in a large shipyard involving seven company meetings with dissident groups over a period of 2 months is not considered sufficiently grave when considered in the context of the entire record to warrant the finding of an unfair labor practice as it was not motivated by an attempt to undermine the Union.57 The Company's meetings with the other groups of dissident employees in the con- text of employees' unrest and falling production which led to the bonus being rein- stated must be appraised as a whole and not in isolation. If the Company was under a continuing obligation to bargain as to this issue-so was the Union. The Union knew of Respondent's intention to reinstate the bonus yet the Union never requested the Respondent Company to bargain concerning it. If there is not a request, there cannot be a refusal. Here, the Union not only failed to offer to negotiate, but it even refused to attend some meetings to discuss the problem. It appears that the Union preferred to allow this production situation to deteriorate with the hope that its bargaining position would continue to improve with the passage of time. Under such circumstances, "the Board and the Courts have long held that an employer has no duty to bargain where the union has not signified its desire to negotiate." 58 The Act creates the mutual obligation for employers and unions alike to minimize industrial strife through collective bargaining: Section 8(b)(3) makes it an unfair labor practice for a union "to refuse to bargain collectively with an employer"; and Section 8(d) of the Act defines the collective-bargaining obligation of employers and majority representatives to include the duty "to meet at reasonable times and confer in good faith with respect to . . . any question arising" under their agreement. Section 204 states that in order to prevent labor disputes, employers and unions "shall whenever a dispute arises over the terms or application of a collective-bargain- ing agreement and a conference is requested by a party . . . thereto, arrange promptly for such a conference to be held and endeavor in such conference to settle such dispute expeditiously .. . Thus, the 1947 amendment of the Act, as well as the Labor-Management Reporting and Disclosure Act of 1959, evidence a con- gressional intent to enhance stability in labor relations by imposing additional re- sponsibility on labor organizations in order to discourage any conduct which would militate against this purpose. The Board has emphasized repeatedly that the duty to make prompt arrangements to meet and confer is a positive legal duty which is an essential part of the obligation to negotiate.59 Accordingly, the Union's refusal to meet with the Company and dissident groups on three occasions and merely attending another such meeting as a silent "observer" not only violated the mandate of these various provisions of the statute and stifled the very opportunity for dis- cussion, as well as agreement, but also showed a lack of repsonsibility in its dealings with both its members and the Company. To penalize the Company for reinstituting the same bonus system as existed for the previous 20 years, under circumstances which justified its business necessity, would penalize open dealing and reward the Union's employment of wily tactics, a result which it appears would produce rather than prevent industrial strife so Under such circumstances, the Company's reinstitution of the bonus was not an unfair labor practice, as the conduct complained of by the General Counsel was justified by O See Frohman Manufacturing Co., Inc., 107 NLRB 1308, 1313-1314, where unilateral wage increases were not held unlawful as the union had full knowledge of the employer's action and had indicated its acquiescence by its failure to protest until the time of the hearing in the case. Accord, Lloyd F. Richardson, Sr., at at., d/b/a Richardson Manu- facturing Company, 109 NLRB 136, 141; Allis-Chalmers Manufacturing Company, 106 NLRB 939, 949; Betty Brooks Company, 99 NLRB 1237, 1250 In Elgin J. & E. Ry. V. Burley, 327 U.S. 661, the Supreme Court held that where a party has knowledge of action taken, he may not stand by but he is required to take affirmative steps to protest; other- wise, his failure to do so may result in loss of his rights. 57 In Bob Morgan Motor Company, Inc., 106 NLRB 334, 335, the Board held the uni- lateral action of the company to be "isolated" and that it would not effectuate the policies of the Act to issue a remedial order as the record of the negotiators did not show any lack of good faith on the part of the company. 5s Montgomery Ward & Co., Incorporated, 137 NLRB 418. w See Burgie Vinegar Company, 71 NLRB 829; J. H. Rutter-Rex Manufacturing Com- pany, Inc, 86 NLRB 470, 474; Oates Bros., Inc., 135 NLRB 1295 (IR). 00 See R. L. White, et at., d/b/ra White's Uvalde Mines v. N L.R B., 255 F. 2d 564 (C.A. 5), where the company instituted wage increases wtihout prior negotiations with the union The court, at page 565, stated: "These particular increases were simply in line with their custom and practice and could not be said to be either restraint or coercion under 8(a)(1) or a refusal to bargain in good faith under 8(a)(5)." THE INGALLS SHIPBUILDING CORPORATION 739 business necessity and is consistent with the Company's legitimate rights to protect and continue its business. . such conduct is regarded as a legitimate weapon of economic warfare." 61 Accordingly, reinstitution of the bonus system, after the Com- pany's proposal, in the course of genuine good -faith collective bargaining to continue it, which the Union not only had left unaccepted in the negotiations, but also was reluctant to discuss after the contract was executed, is not an unfair labor practice.62 Moreover, to hold that what the Company did in self-defense in its efforts to protect its economic existence was a refusal to bargain in good faith would be a mechanistic approach not only devoid of the realities of industrial relationships but it would also ignore the employees' welfare in that the interests of the Union would be made of paramount importance to that of its members. This would be contrary to the purposes of the Act as the statute was enacted for the benefit and protection of em- ployees and not for unions 63 From the standpoint of the employees, the overall effect of the reinstitution of the bonus system redounded to their benefit as they not only received a 7-cent hourly wage increase 64 but they also had restored their bonus which amounted to an additional average annual wage increase of $1,500. It is self- evident, therefore, that the employees prefer their present wage scales to those which were in effect immediately after the current contract was executed. To hold the Com- pany guilty of an unfair labor practice under such circumstances would be tantamount to ignoring the employees' welfare, the purpose of the statute, and would exalt form over substance.65 Then too, the employees had exhausted their means of redress within the Union. Faced with the reluctance on the part of its union officials to process their complaint, realizing they could not depend upon their union, and aware of their relative inex- perience in such matters, they nevertheless were compelled to pursue the only course open to them, namely, the right accorded them under Section 9(a) to carry their complaint to the Company themselves. Under such circumstances, it is not believed that the collective agreement between the Union and Company which provides that the contract shall not be amended or supplemented except by mutual consent of the parties, could deprive the employees of their statutory rights or the privilege of self- help by dealing with the Company. To find the Company committed an unfair labor practice when it so dealt with the dissident groups would not only disregard but be contrary to the realities with which the Company was confronted, particularly when it is considered that the employees told the Company they lacked confidence in the fairness of the treatment accorded them by their bargaining representative and that the Company did no more than meet the wishes of a clear majority of those employees affected by the elimination of the bonus system.66 A union must serve its members in "complete good faith and honesty of purpose in the exercise of its discretion," without hostility to any 67 and it "is also under an affirmative constitutional duty equally to protect those rights." 68 Therefore, a union must act for and not against those whom it represents,69 and it is responsible for any actions which are not compatible with its status of certified bargaining representative.70 Among the most important of labor standards imposed by the Act as amended is that of fair dealing, which is demanded of unions in their dealings with em- ployees. See NLRB v. International Woodworkers, 264 F. 2d 649, 657, .. . (9th Cir.), cert. denied, 361 U.S. 816, . . . (1959). The requirement of fair dealing between a union and its members is in a sense fiduciary in nature and 01NL.RB. v. Potlatch Forests, Inc., 189 F. 2d 82, 86 (C.A. 9). 02 See N L.R B. v. Crompton-Highland Mills, Inc., 337 U.S. 217, where the court said that if the circumstances showed the employer acted in good faith, it could grant a uni- lateral wage increase if there was prior consultation with the union. See N L.R.B. v. Herman Sausage Company, Inc., 275 F. 2d 229, 234 (C.A. 5), where the court stated: "Generally speaking, the freedom to grant a unilateral wage increase 'is limited to cases where there has been a bona fide but unsuccessful attempt to reach an agreement with the union, or where the union bears the guilt for having broken off relations.' " °3 N L.R.B. v. Hymie Schwartz, d/b/a Lion Brand Manu facturing Company, 146 F. 2d 773, 774 (CA. 5) ; Inland Steel Company v. N.L.R B., 170 F. 2d 247, 258 (CA. 7). 04 See page 725, supra 05 See footnote 63, supra. 00 See Elgin, J. & E. Ry. v. Burley, 325 U.S. 77, 327 U. S. 661. 81 Ford Motor Company v. Huffman, 345 U.S. 330, 338. 61 Steele v. Somerville and Nashville Railroad Co, 323 U.S. 192, 198. 6D Id. at 202 ; Rockaway News Supply Company, Inc., 94 NLRB 1056, 1059. " Hughes Tool Company, 104 NLRB 318, 322. 717-672-64-vol. 148-48 740 DECISIONS OF NATIONAL LABOR RELATIONS BOARD arises out of two factors. One is the degree of dependence of the individual employee on the union organization; the other, a corollary of the first, is the comprehensive power vested in the union with respect to the individual. See NLRB v. International Woodworkers, supra. The Union is bound by law to represent all employees in the bargaining unit. The Union is the agent for employees and as such "is subject to a duty to use reasonable efforts to give his principal information which is relevant to affairs entrusted to him and which, as the agent has notice, the principal would desire to have ...." Reinstatement (Second), Agency § 381 (1958).71 The Union failed in its responsibility to its members not only in concealing from them that the bonus system had been abolished but also in its reluctance to process their complaints for its reestablishment. What then is the legal incidence of this dereliction of duty which gave rise to the employees' grievances? It has been held that there is no difference between a "grievance" and a matter which is a subject of collective bargaining. In Douds v. Local 1250, supra, the court, speaking through Judge Learned Hand, held that a grievance includes any dispute in connection with the employment relationship. The court stated that, when Congress amended Section 9(a) in 1947 by the addition of the "non-inconsistent" phrase, "This amendment put an end to the distinction between `grievances' and other disputes." 72 Judge Hand went on to state that ". . . insofar as the contract leaves open any points in dispute, present or future, the employees retain their common-law right to bargain for themselves, singly or collectively." It would appear therefore, in the case at bar, that these dissident groups of em- ployees had the right, and this "right exists independently of the rights of the bargain- ing representative" 73 and without the intervention of the Union,74 to effect a final settlement not inconsistent with the contract provided the Union was afforded the opportunity to be present. As the current contract is silent with respect to the bonus system, the reinstitution of it was not inconsistent with the collective agreement and could therefore be separately made.75 In Dazey Corporation, 106 NLRB 553, the Board citing Douds v. Local 1250, etc., supra, and N.L R.B. v. American Manufac- turing Company of Texas, supra, stated at page 555: Section 9(a) gives the right to individuals and minority groups to take certain grievances directly to the employer independent of the recognized bargaining representative. However, to invoke the protection of Section 9(a), such griev- ance must be outside of and not covered by the collective bargaining agreement. Furthermore, not only must the grievance sought not be covered by the agree- ment, but the adjustment sought in such procedure must not be inconsistent with such agreement. In this light and in view of the considerations delineated above, to hold that the Respondent Company's action in reestablishing its former bonus system (which had been exclusively administered by it for 20 years without any protest from the Union) was unilateral in character, in an invidious legal sense, is not warranted as there was International Union of Electrical, Radio and Machine Workers, AFL-CIO. Frigidaire Local 801 (General Motors Corporation) v N.L.R B., 307 F. 2d 679, 683 (C.A D C ). See The Wallace Corporation v N.L R B , 323 U.S. 248, 255, holding that the union must rep- resent "fairly and impartially" all members. 72173 F. 2d 764, 768-769 (CA. 2). It is noteworthy that the collective agreement in the case at bar provides for a grievance procedure which establishes a five-step method whereby "differences" between the Company and Union shall be adjusted. (General Counsel's Exhibit No 5, article XIV, page 23.) The parties themselves made no such distinction between "grievances" and "other disputes" because the grievance procedure provides in section 1 that, "Should differences arise between the Company and the union or its employees," that "the matter" shall be submitted to the grievance and arbitration procedures. [Emphasis supplied.] It would appear that the parties' use of the word "differences" in their contract, confirms the conclusion reached herein, as the parties themselves in their choice of the word " differences" used broader language than the term "grievances." Corroborative of this conclusion is the Board's interpretation of the word "differences" in Mid-West Metallic Products, Inc., 121 NLRB 1317, and discussed in Young Spring and Win e Corporation, 138 NLRB 643. See also page 731, supra. 73 S Rept. 105, 80th Cong , 1st sess , p 24. See page 732, supra. 74 N L.R B. v. American Manufacturing Company of Texas, 203 F. 2d 212, 216-217 (C.A. 5). 15 Douds v. Local 1250, eto., 173 F. 2d 764 (C.A. 2). THE INGALLS SHIPBUILDING CORPORATION 741 no conscious effort to undermine the authority and prestige of the Union 76 More= over, in the context of falling production, to which the Union's actions contributed, employee discontent and walkouts and the Union's cynical suggestions to its members with respect to maintaining production, which was a breach of its commitment to the Company that it would cooperate in seeing that production was maintained at the same level it was before the bonus was abolished, it is found that the reinstitution of the bonus system by the Company was a legitimate economic weapon not incom- patible with its duty to bargain in good faith.77 The Supreme Court in N L.R B. v. Insurance Agents' International Union, AFL- CIO (Prudential Ins. Co.), 361 U.S. 477, 494-496, implicitly recognized the use of employer self-help against union tactics and the legality of economic pressure devices as a protected defensive activity. Thus, the Court held there was no inconsistency between the application of economic pressure and the duty to bargain in good faith. The Court cited an article by Professor Cox in which the following rhetorical ques- tions were asked: "Is it an abuse of `bargaining powers' to threaten a strike at a de- partment store two weeks before Easter instead of engaging in further discussion, postponing the strike until after Easter when the employer will feel it less severely? Is it unfair for an employer to stall negotiations through a busy season or while he is building up inventory so that he can stand a strike better than the workers?" Merely to ask these questions is to answer them for such economic pressure devices are protected activities which are not inconsistent with good-faith collective bargain- ing.78 The process of free collective bargaining presupposes that economic pressure devices are available to both parties. On the Company's side, in the instant case, its reinstitution of the bonus system in order to protect its business cannot be the basis for an unfair labor practice finding. On the contrary, the reinstitution of the bonus system was a permissible defensive action and not an offensive weapon utilized to lessen the legitimate effectiveness of the Union, but rather a defensive measure utilized to combat drastic decreases in production.79 It is found, accordingly, that the reinstitution of the bonus system was a legitimate defensive economic measure employed by the Company as a means of self-help to counter the Union's tactics and thus justified by business necessity. Moreover, the reinstitution of the bonus system is consistent with the Respondent Company's funda- mental right to protect and continue its business and is not inconsistent with its statutory duty to bargain in good faith. This finding is premised also on the belief that when the information requested by the Union regarding the bonus system is furnished it, as recommended in the order infra, that the parties will then be in a salutary situation to start anew in their aborted negotiations with a view to resolving amicably their differences in an atmosphere consonant with the purposes of the Act generally and Section 8(a)(5) specifically. It is found, therefore, upon the basis of the entire record, and the applicable law, that the General Counsel has failed to sustain the burden of proving by a pre- ponderance of the credible evidence that the Respondent Company bargained in bad faith with the Union. Nor is the Trial Examiner persuaded that the evidence is substantial enough to support a finding that the Respondent's conduct constituted a refusal to bargain within the meaning of Section 8(a) (5) of the Act.80 Based upon 7" Bennett, president of the Council, at the meeting on May 10 between the Company and employees, assured the dissident group they were not violating the law or any union regu- lations by meeting with the Company. See page 727, supra 77 See Dubin & Gooch, Employer Unilateral Action, 37 New York University Law Review 666, June 1962 78 N L R.B v. Insurance Agents' International Union, AFL-CIO (Prudential Ins Co.), 361 U S 477, 494-495, and footnote 27 7e The Board in the Publishers' Association of New York City case, 139 NLRB 1092, re- cently upheld the legality of an agreement among newspaper publishers to shut down for defensive purposes when any one of them is faced with a grievance strike in breach of contract. The Board ruled that this agreement was a permissible defensive arrangement and not an offensive weapon utilized to lessen the legitimate effectiveness of the unions, but rather a defensive measure utilized to combat unauthorized work stoppages. The Board stated that in the last analysis, it is on the point of "reasonableness" that it rested its final decision and that it was unwilling to insulate the unions from a form of defensive action which reasonably seemed necessary to halt the stoppages The agreement to 'Shut down, held the Board, was an effective counteraction to the unions' work stoppages and thus did not exceed the permissible bounds of defensive action 80 Consolidated Edison Co. of New York, Inc v. N L R B., 305 U.S. 197, 229 ; N L.R B. v. Columbian Enameling & Stamping Co., Inc., 306 U S. 292, 299-300; Universal Camera Corporation v. N.L.R.B., 340 U.S. 474, 477. 742 DECISIONS OF NATIONAL LABOR RELATIONS BOARD these considerations, it will be recommended that the allegations of the complaint with respect to the refusal to bargain in good faith be dismissed.81 The Alleged Refusal To Furnish Information with Respect to the Bonus System The General Counsel alleges that since March 1962, the Respondent Company has refused to furnish information to the Union in regard to the bonus system and that this information is necessary in order to determine whether the standards upon which the bonuses are computed are correct, in order to enable the Union to under- stand, evaluate, and bargain with respect to the employees' bonuses. The Respondent denies this allegation and alleges that it has furnished the Union with all relevant information. It is true that the Company did supply much infor- mation but it is also uncontradicted that the Company refused to furnish the Union with a copy of the "rate book" which contains the data showing how the employees' bonuses are computed. As to this information, the Company avers that the Union has no legal right to it because its disclosure would place it in a serious position in bidding on contracts if this data were to get into the hands of its competitors. More- over, alleges the Company, this information is "highly confidential"-a "trade-secret" which for competitive business reasons cannot be divulged. Since the law is settled that an employer must supply a union with relevant wage information as an incident to its duty to bargain in good faith,82 the precise question here is whether Respondent Company's failure to furnish the data in the "rate book" is excused by the Company's insistence that it is so highly confidential that its dis- closure would reveal to its competitors vital "trade secrets" and thus place it in a disadvantageous position in bidding on contracts. The Company's characterizing the data which the Union requested when it asked for "all information and records pertaining to the bonus, including rate and time studies," as "highly confidential" and a "trade secret" does not necessarily make it so in the absence of evidence to substantiate the defense. Moreover, since the law provides that the Company has an affirmative duty to supply relevant data, its refusal to do so on its mere assertion that such data was highly confidential made it in- cumbent for the Company to substantiate its defense that divulgement of this infor- mation would place it in a serious position from a competitive standpoint. This it has failed to establish. Assuming arguendo that the Company's appraisal of this risk is in fact a realistic one, it would not constitute a defense to withholding this relevant data since the Act permits no immunity in such circumstances on the bare statement that it believes business, economic, or competitive considerations require infraction of settled law, no matter how much in good faith it believes that it is not obliged to furnish infor- mation.83 And as the court pointed out in Aluminum Ore Company v. N.L.R.B., 131 F. 2d 485, 487 (C.A. 7), "if there be any reasonable basis that this may have been confidential data of the employer before the passage of the Act, it seems to us it cannot be so held in the face of the expressed social and economic purposes of the Act." 81 See Libby, McNeill & Libby, 65 NLRB 873, where the Board held that the unilateral inauguration of an incentive plan by the employer was not per se an unfair labor practice unless there was proof that it was part of a plan to undermine the union. In Exposition Cotton Mills Company, 76 NLRB 1289, the Board held that the employer' s action in effectuating a wage increase offered the union during negotiations, without waiting for the union's final answer did not constitute a refusal to bargain "when appraised in the total context of the case" as the evidence failed to disclose bad faith on the part of the re- spondent in that the wage increase was not utilized as a means of undermining the union's prestige. See also W. W. Cross and Company, Inc, 77 NLRB 1162. The General Counsel in a recent opinion refused to issue a complaint upon a union's 8 (a) (5) charge that the company unilaterally discontinued payments of a Christmas bonus to employees, in effect for many years, since there was no reference in the contract to the bonus, and the union did not object in former years to the company's exclusive administration of it. Case No. SR-1425, July 7, 1961. 'Sinclair Refining Company v. N.L.R.B., 306 F. 2d 569 , 571 (C.A. 5) ; N.L.R.B. v. Yawman & Erbe Manufacturing Co, 187 F. 2d 947, 948-949 (C.A. 2) ; Oregon Coast Operators Association, et al, 113 NLRB 1338, 1345; Morganton Full Fashioned Hosiery Company and Huffman Full Fashioned Hosiery Mills , Inc., 115 NLRB 1267, 1271. 81 N L R B. v. Star Publishing Co., 97 F. 2d 465, 470 (C.A. 9) ; N.L.R B. v. Gluek Brew- ing Company and Bach Transfer and Storage Company, 144 F. 2d 847, 853-854 (C.A. 8). See Old King Cole, Inc. v. NL.R.B., 260 F. 2d 530, 532 (C.A. 6), where it was held that proscribed conduct is not excused because it is "based upon an erroneous view of the law." THE INGALLS SHIPBUILDING CORPORATION 743 The fact that the Union requested and the Company refused to furnish this same information during negotiations which eventuated in the current contract has caused the Trial Examiner to pause and give consideration to those Board cases which have held that a union waives its statutory right to receive information which it requested but abandoned during negotiations.84 However, the facts in this proceeding do not disclose unmistakably and unequivocally that in the course of the current contract negotiations the Union bargained away or waived its right to the information it requested.85 Inasmuch as the right to relevant data is a statutory right the Board will only find a waiver when the evidence is clear, unmistakable, and unequivocal.88 It is found, therefore, that the Union was entitled to the data which showed how the employees' bonuses were determined and computed in order for the Union to understand and evaluate the bonus system. The Company's refusal to furnish the Union with such information violated Section 8(a) (5) of the Act 87 The Pascagoula Metal Trades Council's Status as Charging Party The Metal Trades Department was certified on May 1, 1940, as the exclusive representative of the Company's production and maintenance employees. The Re- spondent contends that, since the charges in this proceeding were filed by the Pascagoula Metal Trades Council and not the Pascagoula Metal Trades Department, this is a fatal defect requiring dismissal of the complaint. Since 1949, all collective-bargaining contracts executed by the parties have con- tained the following recognition clause: That the Employer recognizes that the PASCAGOULA METAL TRADES COUNCIL is affiliated with the METAL TRADES DEPARTMENT OF THE A.F.L.-C.I.O and is authorized to act in its behalf as the bargaining agent for affiliated local unions having members employed in the Pascagoula Plant of THE INGALLS SHIPBUILDING CORPORATION, a DIVISION OF LITTON INDUSTRIES, Pascagoula, Mississippi. The Council since 1949 has been a signatory to all collective agreements and at no time has the Respondent questioned the Council's authority to represent its em- ployees. Based upon the bargaining relationship between the parties for the past 13 years, as detailed in the body of this report, as well as the recognition clause, cited above, it is found that there is no merit to Respondent's contention that the Council is not the bargaining representative for its employees in the unit described below. "Procedural regularity [is] not . . . an end in itself, but [is] . .. a means of defending substantive interests... ." 88 "Parties must take the consequences of the position they assume. They are estopped to deny the reality of the state of things which they have made appear to exist, and upon which others have been led to rely. Sound ethics require that the apparent and its effects and consequences should be regarded as if it were real, and the law so properly regards it." 89 IV. THE REMEDY Having found that the Respondent has refused to bargain with the Union in viola- tion of Section 8(a)(5) and (1) by refusing, on request, to furnish the Union with pertinent data in regard to the bonus system, it shall be recommended that the Respondent supply the Union on request the information to which it is entitled, to the extent that such information has not heretofore been furnished. In determining the scope of the remedy, it is the Trial Examiner's belief that Respondent in violating the Act did not intend to undercut the bargaining status of 84 International News Service Division of The Hearst Corporation, 113 NLRB 1067, 1070, 1071-1072; General Controls Co., etc, 88 NLRB 1341, 1342; Speadel Corporation, 120 NLRB 733, 739-741 85 See The Press Company, Incorporated, 121 NLRB 976 88 NLRB v. The Item Company, 220 F. 2d 956, 958-959 (C.A. 5), cert. denied 350 U.S. 905; Tide Water Associated Oil Company, 85 NLRB 1096, 1098; Hekman Furniture Company, 101 NLRB 631, where the Board stated: "The collective bargaining requirement of the Act is not satisfied by a substitution of the grievance procedure of the contract for Respondent's obligation to furnish the union with information it needed to perform its statutory functions." 87 N L R B. v. The Item Company, 220 F. 2d 956 (C.A. 5). 88 Fay v. Douds, 172 F. 2d 720, 725 (C.A. 2) 89 Casey v. Galli, 94 U.S. 673, 680. 744 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the statutory representative or otherwise to interfere with the Union . Therefore, because of the limited scope of the Respondent 's refusal to bargain, and because of the absence of any indication that danger of other unfair labor practices is to be anticipated from the Respondent's conduct in the past, it shall not be recommended that the Respondent cease and desist from the commission of any other unfair labor practices. CONCLUSIONS OF LAW 1. The Pascagoula Metal Trades Council , AFL-CIO, is a labor organization. within the meaning of Section 2(5) of the Act. 2. All production and maintenance employees at Respondent's Pascagoula, Missis- sippi, shipyard, excluding managerial employees , supervisory employees, office clerks, instructors in the welding school or other craft schools that may be established by the Company, watchmen or policemen who are deputized , commissioned or ap- pointed by the city of Pascagoula, or other public authority, instrument men, in- spectors, office porters, cost-department clerks, and checkers constitute a unit appro- priate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 3. The Respondent has refused to furnish information to the Union as detailed in the body of this recommended decision in violation of Section 8(a) (5). 4. The aforesaid unfair labor practice is an unfair labor practice affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.] Mid-West Towel & Linen Service, Inc. and Local 135, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehouse- men, and Helpers of America. Case No. 25-CA-1667. July 23,. 1963 DECISION AND ORDER On April 26, 1963, Trial Examiner James V. Constantine 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 attached Intermediate Report. The Trial Examiner also found that the Respondent had not engaged in certain other unfair labor practices alleged in the amended complaint. Thereafter, the Respondent and the General Counsel filed exceptions to the Intermediate Report and the Respondent filed a sup- porting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Leedom, Fanning, and Brown]. 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, the exceptions and brief, and the entire record in the 143 NLRB No. 90.