American Oil Co.

56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of Respondent, be posted by Respondent immediately upon receipt thereof, and be maintained by it for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by Respondent to insure that such notices are not altered, defaced, or covered by any other material. (d) Promptly mail or deliver to said Regional Director signed copies of the at- tached Appendix for posting, Kiewit willing, at all jobsites of Kiewit within the States of Oregon and Washington. (e) Notify the Regional Director for Region 19, in writing, within 20 days from the date of the receipt of this Decision, what steps Respondent has taken to comply herewith.le 19If this Recommended Order is adopted by the Board, this provision shall be modified to read : "Notify said Regional Director, In writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL MEMBERS Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions Act, we hereby notify you that: WE WILL NOT cause or attempt to cause Peter Kiewit Sons' Co., to lay off Darwin T. Chapek or any other employee of the said Employer or otherwise cause or attempt to cause the said Employer to discriminate against any employee in violation of Section 8(a)(3) of the Act. WE WILL NOT in any other manner restrain or coerce employees in the exercise of rights guaranteed in Section 7 of the Act except in a manner permitted by Sec- tion 8 (a) (3) of the Act. WE WILL make whole Darwin T. Chapek for any loss of pay he may have suffered by reason of his discharge by Peter Kiewit Sons' Co. WE WILL notify Darwin T. Chapek and the aforementioned Employer, in writ- ing, that we have no objection to the employment of Chapek in any capacity satisfactory to the said Employer. HOISTING AND PORTABLE ENGINEERS LOCAL No. 701, INTERNA- TIONAL UNION OF OPERATING ENGINEERS, AFL-CIO, Labor Organization. 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 with the Board's Subregional Office, 612 Lincoln Building, 208 Southwest Fifth Avenue, Portland, Oregon, Telephone No. 226-3361, if they have any question concerning this notice or compliance with its provisions. American Oil Company and Independent Oil Workers Union Local No. 117, affiliated with Independent Oil Workers Union Na- tional. Case No. 17-CA-2264. April 22, 1965 DECISION AND ORDER On May 11, 1964, Trial Examiner William J. Brown issued his Decision in the above-entitled proceeding, finding that the Respond- ent had not engaged in any unfair labor practices alleged in the com- plaint and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. 152 NLRB No. 7. AMERICAN OIL COMPANY 57 Thereafter, the General Counsel and the Charging Party filed excep- tions to the Decision with supporting briefs. The Respondent filed cross-exceptions and a brief in support of the Trial Examiner's Decision.' Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel [Members Fanning, Brown, and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and cross-exceptions, briefs, and the entire record in this case, and hereby adopts the findings, con- clusions, and recommendations of the Trial Examiner only to the ex- tent consistent herewith. The Trial Examiner found that the Respondent over the years contracted out, without notice to or consultation with the Union, a substantial amount of unit work that could be, and sometime was, per- formed by unit employees. He also found that neither the employees in the mechanical department nor the employees in craft classifications then employed as laborers were either laid off or worked reduced hours as a result of contracting out the pump installation job to Natkin, although, had the work not been contracted out, laborers in craft classifications would have been employed on that job at craft rates. In the circumstances of this case, including the consideration that there was no real change in terms and conditions of employment of the employees in the bargaining unit, we adopt the Trial Examiner's con- clusion that the Respondent did not violate Section 8(a) (5) and (1) of the Act as alleged in the complaint.2 Accordingly, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts the Recommended Order of the Trial Examiner, and orders that the com- plaint herein be, and it hereby is, dismissed. 1 The Respondent's request for oral argument is hereby denied as the record , excep- tions and cross-exceptions , and briefs adequately present the issues and the positions of the parties. 2 American Oil Company, 151 NLRB 421. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE This proceeding under Section 10(b) of the National Labor Relations Act, as amended, hereinafter sometimes referred to as the Act, originated with a charge 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD filed August 15, 19631 by the above-mentioned Charging Party, hereinafter some- times referred to as the Union. The complaint, issued on November 18 by the General Counsel of the National Labor Relations Board acting through the Regional Director for the Board's Region 17, alleged the commission by the above-mentioned Respondent, hereinafter sometimes called the Company, of unfair labor practices defined in Section 8(a)(5) and (1) of the Act. Respondent's duly filed answer denied the commission of the unfair labor practices alleged. Hearing was held on the issues raised by the complaint and answer before Trial Examiner William J. Brown at Independence, Kansas, on January 21 and 22, 1964. The parties appeared as noted above and participated fully in the hearing with full opportunity to present evidence and argument on the issues. Subsequent to the hearing all parties filed briefs with the Board which have been fully considered. Upon the entire record in this proceeding, and on the basis of my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT EMPLOYER The Company, a corporation organized under the laws of the State of Maryland, owns and operates a refinery at Neodesha, Kansas, where it is engaged in the manu- facture and sale of petroleum products. At the Neodesha plant the Company an- nually manufactures, sells, and ships directly to purchasers located outside the State of Kansas petroleum products valued in excess of $50,000. It appears, as the Com- pany concedes, that it is an employer engaged in commerce within the scope of Section 2(6) and (7) of the Act. The volume of commerce is sufficient to justify and require the Board's assertion of jurisdiction. II. THE LABOR ORGANIZATION INVOLVED The Union, as appears from the pleadings and evidence herein, is a labor organiza- tion within the scope of the definition set forth in Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction and summary of events In 1954 the Union was certified, pursuant to proceedings under Section 9 of the Act, as the representative of the Company's production and maintenance employees with certain exclusions not here in question. The parties have since then engaged in collective bargaining. At the time of the events which form the basis of the instant case the parties were operating under a collective-bargaining agreement executed April 19, 1962, to run for a term expiring October 8, 1963, with certain renewability provisions. The agreement covers the production and maintenance unit and a separate clerical unit. Within the production and maintenance unit, seniority is recognized within three established divisions: mechanical, process, and technical service. Within a fourth division, labor pool, an employee acquires only plant seniority until the individual works at one or another of the more skilled classifications. The evidence reveals that in the negotiations leading to the 1962-63 agreement, the Union proposed a clause which would prohibit the contracting out of work which unit employees were qualified to perform while such unit employees were either laid off or cut back from their craft classification; to this the Company asserted that subcontracting was a management prerogative.2 The agreement contains a comprehensive grievance procedure permitting the processing as a grievance of any "question" and providing for monthly meetings of the plant manager (or his designatee) and union representatives on the third Thurs- day of each month. Unresolved grievances may be referred to arbitration provided they involve, inter alia, the modification or discontinuance by the Company of past policies, practices, customs, or usages relating to working conditions. i Dates hereinafter relate to the year 1963, unless otherwise indicated 2 This appears from the testimony of union officials , Kammerer and Holper, both of whom impressed me as credible . Their testimony also reveals that the Company was willing to discuss the subcontracting here complained of after the event. There does not appear to have been a charge filed respecting the Company 's position on the general subject of contracting out as asserted in the bargaining sessions . Neither would such an assertion in the course of bargaining furnish any reasonable basis on inferring an adamant opposition on the subject. AMERICAN OIL COMPANY 59 The evidence indicates that the traditional maintenance classifications-boiler- maker-welder, brick mason, carpenter, electrician, instrument mechanic, insulator, machinist, pipefitter, and painter-are included in the Company's mechanical division and that employees have progressed to varying seniority levels in one or more of the maintenance classifications while retaining their plant seniority for purposes of placement at work on labor assignments in event of shortage of work in their higher- rated classifications. In the Company's processes, production units are regularly shut down for inspection and overhaul in a step known in the industry as a "turn- around." The turnaround involves a substantial increase of work opportunities in the skilled maintenance classifications and, as a consequence, employees with sub- stantial amounts of plant service necessarily will have accumulated, as a result of turnaround assignments, some craft classification seniority. It is evident, however, that when a turnaround is not in process, some junior craftsmen will be reduced to lower classifications, normally the labor pool. During the pendency of the 1962-63 agreement the Company contracted out to a Kansas City, Missouri, contractor, Natkin & Co , hereinafter called Natkin, the job of removing a circulating gasoline pump and installation of a new pump in place thereof at the Neodesha refinery. Natkin commenced the work on or about July 18 and completed the work by July 29. No prior notice was given the Union of the Company's solicitation of bids on the pump relocation job and the Union apparently first acquired knowledge thereof when one of the employees observed Natkin's men at work. On July 18 or 19, in the course of the regular monthly meeting between union and management representatives, the Union protested the assignment of the work to the outside contractor particularly in view of a reduction of job opportunities in the preceding month. The management representative for the mechanical depart- ment, Weems, stated that the department felt they needed the outside help to accom- plish the task. The work in question called for performance of skills possessed by company employees. Shortly prior to the award of the contract to Natkin some 10 employees in the unit represented by the Union had accepted early retirement and severance pay as an alternative to layoff. There is also uncontradicted testi- mony that at the time Natkin was performing the pump relocation work, there were several mechanical department employees with craft seniority who were working in labor classifications and at the lower laborer rate. I find that the evidence clearly establishes that the contracting out to Natkin resulted in money losses to company employees who would have worked on the pump relocation had it not been con- tracted out to Natkin. There is evidence tending to indicate that the Company over the years has regu- larly contracted out numerous jobs which could be and sometimes were performed by unit employees and that the matter of contracting out was widespread and re- current. The question is as to whether it had become in effect so solidified as a condition of employment that the award of the job in question to Natkin was not any alteration of an existing term or condition of employment. B. The contentions of the parties The issues emerging from the complaint and answer, the evidence and arguments, relate to two main topics: (1) whether the Company acted unilaterally in letting out to Natkin, the outside contractor, the pump relocation job, and (2) whether, unilateral or not, the company action in letting out the pump relocation job was a change in existing working conditions. The briefs of the General Counsel and the Charging Party are essentially homologous and contend: (1) subcontracting of "unit work" is a mandatory subject of collective bargaining under Town & Country Manufacturing Company, Inc., et al., 136 NLRB 1022, enfd. 316 F. 2d 846 (C.A. 5) and Fibreboard Paper Prod- ucts Corp., 138 NLRB 550, enfd. sub nom. East Bay Machinists, Local 1304, 322 F. 2d 411 (C.A D C.) cert. granted 375 U.S. 963 [affd. 379 U.S. 203], whether it resulted in elimination of an entire bargaining unit or in a temporary curtailment of its job assignments and as a consequence an employer may not unilaterally sub- contract even through economic and nondiscriminatory motives; (2) there has been no fulfillment of the bargaining obligation by execution of the collective-bargaining agreement; and (3) subcontracting of work of the type here involved has not been a practice in the past and even if it had, there is no showing that the Union was aware of it and is on that account estopped from complaining, estoppel being in- applicable against the Government in any event. Respondent, on the other hand, asserts (1) that Town & Country and Fibreboard are erroneous statements of the law but even if they are considered as correct ex- positions of the law they are distinguishable by virtue of their involvement with 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD irretrievable elimination of work whereas the present case involves the letting out of a single small job; (2) there has been no change in working conditions in view of the long-established pattern of contracting out of similar jobs; and (3) the subject of contracting out was fully bargained in sessions preceding execution of the cur- rent agreement and the Company was left free to continue contracting out. C. The circumstances surrounding the Natkin contract As the parties agree, there is little dispute as to much of the factual pattern against which the issues herein have developed. Yet, the parties are poles apart as to the inferences and conclusions to be drawn from established data and there is of course some substantial disagreement as to one major issue, viz, whether or not like work had been regularly done by outside contractors in the past. The uncontradicted evidence of General Counsel's witnesses established that sub- contracting was discussed in the bargaining sessions preceding execution of the 1962-63 agreement. Local Union President Lewis Kammerer testified that he at- tended most of the negotiating sessions and that the Union requested a clause which would prohibit the subcontracting out of work at any time when employees were on layoff or cutback from their craft rates and were qualified to do the work in question. According to Kammerer the Company took the position that contracting out was none of the Union's business. The testimony of Union Secretary-treasurer Bill Holper, who also attended some of the negotiating sessions preceding the 1962-63 agreement, is generally corrobora- tive of Kammerer. There is no contradictory evidence and I find these witnesses credible. It must be taken as established, and I find, that the discussions preceding the execution of the agreement which was in effect at the time of the events here in question included a union demand for a limited prohibition against subcontracting and a management rejection thereof. The agreement thereafter concluded is silent on the subject. The agreement establishes, within the production and maintenance unit, three seniority divisions: process, technical service, and mechanical, with, apparently, a separate seniority group of laborers prior to their working on a job within one of the three foregoing divisions. The employees primarily affected by the contracting out involved in the instant case are employees of the mechanical division which in- cludes the gamut of craft-type skills. The agreement contains provisions, particu- larly in sections 7.8: B, C, and D; 7.15: B. 3 and 13.1, confirmatory of the testimony of several of General Counsel's witnesses on cross-examination to the effect that the nature of the Neodesha refinery's operations is such that there are recurring periods of diminution of work in operating units with concomitant increase of tasks in the mechanical division. There results an accumulation, in the course of time, of seniority in the several mechanical divisions crafts on the part of employees who normally spend the majority of their worktime on operating or labor assignments. Illustrations of the foregoing are seen in the situations of several of General Counsel's witnesses. Thus the testimony of pipefitters Ivan Anveres, Wayne Smith, and Warren Wiles established that only during turnarounds would there be such a plentitude of skilled craft-type assignments that they could be sure of employment at their higher rates. Wiles conceded that he worked about half his worktime at labor assignments and at labor rates and Smith's testimony revealed that he works more hours as a laborer than he does as a pipefitter. There was a turnaround of major proportions in April 1963 and all employees of the mechanical division appear to have been employed at their higher qualifica- tions. It is reasonable to assume that the turnaround which resulted in an increase of job opportunities for the mechanical department craftsmen with any substantial seniority also resulted in curtailment of operators' jobs while the production equip- ment was down for inspection and repair. The situation was apparently reversed sometime in June and the mechanical department was notified that there would be a necessity of laying off 10 of the mechanical department employees. This threat of layoff was cared for, as noted above, by arranging early retirement for nine work- ers and severance pay for one. Sometime prior to May 21, the Company invited proposals for the job of install- ing a new loading rack blending pump. The specifications called for the bidder to furnish labor and materials. Since the latter item was not to include motor, pump, starter, breaker, and pushbutton station, it is apparent that the labor element was a major component of the cost of the job. The pump in question, supplied by the Com- pany, was a new Peerless pump; the electric motor was one taken from the rack pump house. AMERICAN OIL COMPANY 61 By written communication dated June 28 the Company awarded the job to Natkin & Co. of Kansas City , Missouri, Natkin entered on the work about July 18 and completed the work on July 29. The work involved removal of an existing pump and motor, repairs as necessary to the existing foundation and installation of the new pump with its transferred motor. The work in question as appears from the un- contradicted testimony of several mechanical department employees was work of the type which had been at least sometimes, performed in the past by employees of the mechanical department. There is no doubt on the evidence but that company employees were qualified to do the work in question and that if the work were assigned to the Company's mechani- cal department there would have been substantial work at the craft classifications and rates for boilermaker-welders, electricians , pipefitters, machinists, and carpenters as well as work for the laborers of the mechanical department. The substantiality of the work opportunities appears from testimony of General Counsel 's witnesses. There was work for laborers in digging foundations , pouring concrete, and digging holes for stanchions. Other classifications of employees who could be employed would include electricians, machinists, pipefitters , boilermaker-welders, and carpenters . According to the credited testimony of Leslie Chamberlain, a boilermaker-welder, the Natkin job involved some 60 to 70 welds and about the same number of man-hours on the job; similarly Edgar Neer, a company electrician, testified that he had worked on a similar installation in the past and it involved 6 man-days of electrician 's work. D. The prior history of contracting out The major factual dispute in the instant case relates to the prior history of con- tracting out. There appears to be a dispute both as to the prior history of contracting out the particular type of work involved in the Natkin job, and the prior history of con- tracting out other types of work which employees of the mechanical department could perform or did perform on occasion in the past. The General Counsel's position is that the work involved in the Natkin job had always previously been performed by company employees except when performed as part of installation of a new operating unit. Respondent asserts that the distinction between new units and alterations of existing units is, insofar as location or relocation of a pump is concerned , one with- out a difference. The superintendent of the Company's mechanical and engineering divisions , Robert Colwell, submitted a tabulation of all instances of location and relocation of circulat- ing pumps at the Neodesha refinery in the period subsequent to 1955 up to the date of hearing. The tabulation, in evidence as General Counsel 's Exhibit No. 3 lists 92 instances of location and/or relocation of circulating pumps. Of these, in 52 in- stances the work was performed by company employees and in the remaining 42 cases the work was let out to contractors. According to Colwell all instances of contractor work were in connection with installation of a new unit except in the case of the July 1963 contract awarded to Natkin. Also according to Colwell , a new unit has reference to new production facilities resulting from construction. Colwell also explained, however, that company employees have in several of the instances tabulated in the exhibit worked on pump installation in connection with installation of a new unit. It must be concluded from analysis of General Counsel 's Exhibit No. 3 and the un- contradicted and credited testimony of Colwell that sometimes employees work on pump location and/or relocation both on existing units and in connection with new units and that from 1955 to the time of the critical events herein considered whenever outside contractors performed this work it had been in connection with new units. The most significant item in Colwell 's testimony appears to be his assertion that work of the type here in question had in the past been performed on occasion by company employees and on occasion by contractors and their employees. It is clear from the uncontradicted and credited testimony of pipefitters Shaw, Anveres, Smith, and Wiles and that of boilermaker-welder Elam that they, or em- ployees in their classifications , would have had employment at the craft rates on the pump relocation in July had the work not been contracted out. By virtue of the Company's decision to contract out they had employment only in the lower-rated labor classifications. E. Conclusions respecting the contracting out The General Counsel and the Charging Party contend that the decision in Town & Country and Fibreboard apply here and require the conclusion that the uni- lateral contracting out to Natkin of the pump relocation work was a unfair labor prac- 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tice in the nature of a refusal to bargain. Respondent, on the other hand, asserts that Town & Country and Fibreboard do not correctly state the law, that even if they did they would not be applicable here where there has been no permanent elimination of a whole or part of the unit and, finally, that in any event the Respondent satisfied any bargaining obligation by discussion in the negotiations preceding the currently effective agreement. Town & Country Mfg. Co., 136 NLRB 1022, involved a situation in which within 1 month after the union's certification and while its initial contract proposal was under consideration, the employer, only 3 days after advising the union of its willingness to discuss the matter of discontinuing its trucking operations, in an abrupt and uni- lateral volte-face, terminated the operation in question and contracted the work out in a permanent abandonment of trucking operations accompanied by the sale of the company trucks. The Trial Examiner characterized the employer's action as a clear rejection of the collective-bargaining principle and conduct in derogation of the union's representative status. In affirming the Trial Examiner's decision, the Board, reversing its earlier decision in the first Fibreboard Paper Products Co. case, 130 NLRB 1558 (Member Fanning dissenting), concluded, at 1027: . In our opinion, the precedents cited and discussed by the majority and minority decisions in that case support the conclusion that the elimination of unit jobs, albeit for economic reason, is a matter within the statutory phrase "other terms and conditions of employment" and is a mandatory subject of collective bargaining within the meaning of Section 8(a) (5) of the Act . . . Experience has shown . . . that candid discussion of mutual problems by labor and manage- ment frequently results in their resolution with attendant benefits to both sides. Business operations may profitably continue and jobs may be preserved. Such prior discussion with a duly designated bargaining representative is all that the Act contemplates . But it commands no less. The Board's Order in Town & Country was granted enforcement, Town & Country Manufacturing Company, Inc., et al. v. N.L.R.B. 316 F. 2d 846 (C.A. 5). The court does not appear to have accepted or rejected the Board's view that the Act requires bargaining over a management decision to contract out a portion of an employer's op- eration, but rather to have grasped at the Board's contention that the bargaining order was warranted in the circumstances of the particular case including "overwhelming evidence" of antiunion motivation in the contracting out decision. The Fibreboard decision, 130 NLRB 1558, was reconsidered on petition of the charging party and the second Fibreboard decision, 138 NLRB 550, is cited by the General Counsel as authority in the instant case. In the second Fibreboard case the Board majority held that under the authority of the Supreme Court decision in Order of Railroad Telegraphers v. Chicago & Northwestern Ry. Co., 362 U.S. 330, it had no alternative but to rule that a company's decision to subcontract work theretofore performed by its employees was a mandatory subject of bargaining. The Board's Order required the company to cease and desist from unilaterally sub- contracting work or otherwise making changes in terms and conditions of employ- ment without consultation with the designated bargaining agent. In granting enforcement of the Board's Order in Fibreboard, the Court was care- ful to adjudicate the validity of the Board's Order on the basis of the factual pattern underlying it. Thus the Court noted that the unilateral contracting out of the company's maintenance operation resulted in the discharge of the entire 73-man maintenance group and the extinction of the bargaining unit; on these facts, the Court held the Board was warranted in concluding that the employer committed an unfair labor practice by the unilateral action. East Bay Union of Machinists, Local 1304 (Fibreboard Paper Products Co.) v. N.L.R.B., supra. With respect to Respondent's contention that Town & Country and the second Fibreboard case are erroneously decided and do not correctly state the law, the con- tention must necessarily be rejected by the Trial Examiner. Insurance Agents International Union (Prudential Insurance Co.), 119 NLRB 768 I accept as authoritative the Board's holding in these cases that subcontracting of an employer's operations is a mandatory subject of collective bargaining as to which an employer is under a duty to refrain from unilateral effectuation of change. Respondent has asserted, in the alternative, that even assuming arguendo that Town & Country and Fibreboard do correctly state the law they are readily dis- tinguishable on a significant basis from the facts in the instant case in that the instant case does not involve elimination of unit jobs. I do not accept Respondent's con- tention in this regard. Rather I agree with General Counsel's assertion that there is no significant or operative difference between permanent elimination or abolition AMERICAN OIL COMPANY 63 of a job and temporary elimination of the job. In the case at bar there were sub- stantial man-hours involved in the prior instances where company employees worked on location and relocation of circulating pumps. While man-hours are not known for the cases where contractors performed the work, in the 52 cases where com- pany employees did the work the man-hours involved in 30 such instances exceeded 160 man-hours. The work involved is substantial, far from de minimis, and it does not appear to present any real difference insofar as the obligation to bargain is con- cerned from situations where the work is permanently lost to the unit. The sole difference is one as to the extent of the damage. Accordingly, in disagreement with Respondent I would hold Town & Country and Fibreboard applicable to situations where the contracting out is a temporary loss of work as distingished from contracting out on a permanent basis of a portion of company operations. The question before me is, however, not one as to generalized concepts as to the nature and extent of the duty to bargain. The issue in the case assigned to me is whether in the instance alleged in the complaint the Respondent engaged in a re- fusal to bargain by its July subcontracting to Natkin without prior notice to and consultation on request with the Union. Since I iegard Town & Country and Fibreboard applicable to the type of contracting here involved and since the evidence establishes beyond peradventure of doubt that there was no prior notice to the Union of the Natkin contract I would find a refusal to bargain if the subcontracting altered existing terms and conditions of employment unless the Union had, in the circum- stances, no right to demand bargaining The question to be resolved is, then, whether award of Natkin contract altered existing terms and conditions of employment. The evidence is plain that it did not. Contracting out of pump locations and relocations had been a practice firmly estab- lished over the years as appears from the tabulations of instances of such work contained in General Counsel's Exhibit No. 3, described above. While the inter- rogation of the Company's mechanical division superintendent, Robert Colwell, by the General Counsel and the Charging Party sought to establish some distinction between prior instances of contracting out pump location jobs and the Natkin con- tract, with reference to whether or not they were a part of a new unit or were regarded as capital expenditures, the distinction suggested would not appear to have significance The essentials are that the work is of the same type that is done sometimes by unit employees and sometimes by contractors. There is no convinc- ing indication that the work involved in the Natkin job is any different from that which theretofore had been, on frequent occasions, let out to contractors. The Company also contends that, in addition to the work of pump location and relocation, it has over the years contracted out a large number of other jobs which could have been and, in some 90 percent of the types of jobs listed, actually had on occasion been, performed by employees of the Company's mechanical division. Respondent's witness John Brewer, presently supervisor of maintenance, planning, and coordination and prior to January 1, 1963, for 11 years general foreman of the mechanical division, prepared Respondent's Exhibit No. 2 from company records of 21,000 purchase orders for the 5 years, 1959 to 1963. The exhibit contains a listing of some 1,300 items let out to contractors which items represented jobs which could be, and according to Brewer, in 90 percent of the items had sometimes been per- formed by unit employees. It appears from interrogation of Brewer by the Charging Party, however, that in the preparation of the exhibit Brewer and his assistants, with no suggestion or in- dication of anything less than complete good faith on their part, made certain as- sumptions as to the capacities and actions their maintenance employees. On the basis of the Charging Party's exposition of the weaknesses of this exhibit in this aspect, I am not disposed to place reliance on it as a reliable listing of work done by contractors which was actually performed by unit employees. The weaknesses in the exhibit appear to have come to light through the combination of the pene- trating inquiry of counsel and the candor and truthfulness of the witness. Al- though I discount the exhibit, I do accept the testimony of Brewer, who impressed me as credible, as clearly establishing that over the years there has been substantial contracting out of work that could be and sometimes was done by unit employees. The conclusion that there had been substantial contracting out of unit work receives some, though not overwhelming, support from the evidence indicating that the Union sought in the 1962 negotiations a clause which would prohibit contracting out when unit workers were on layoff or cut back from their craft classifications. The undisputed testimony of union officials, Kammerer and Holper, to the effect that the subject of contracting out was discussed in negotiations preceding the execu- tion of the 1963 agreement gives rise to opposing contentions as to whether by 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD such discussion and subsequent agreement on a contract silent on the subject, the Company may rely on a waiver by the Union of any right to raise the question as to contracting out during the pendency of the agreement. In this area of contention the General Counsel and the Charging Party place prin- cipal reliance on the Board's decision in Proctor Manufacturing Corporation, 131 NLRB 1166. Respondent asserts that decision is inapposite. I read Proctor Manu- facturing as distinguishable in the significant respect that in Proctor the employer made no contention in the precontract bargaining that establishment and revision of piece rates (the analogue of contracting out here) was a management preroga- tive. In the instant case, however, as appears from the testimony of the union officials, the Company here did bluntly assert in the bargaining the position that contracting out was a management prerogative. No charge of unfair labor prac- tice appears to have been filed at the time nor in any of the many previous cases of contracting out work of locating circulating pumps or other jobs performed and/or performable by unit employees. Notwithstanding the inapplicability of the Proctor decision, general principles of interpretation would seem to require the conclusion that in view of the breadth of the scope of the obligation to bargain prior to unilateral action on so vital a matter as the employment opportunities of unit employees I would regard the Act as im- posing on the employer here the duty to advise the Union of an intent to contract out work performed and/or performable by unit employees and to hear the Union's position in reasonable patience and attention appropriate to business exigencies prior to taking action. Were it not for the history of past action recounted above, I would find a refusal to bargain here. In view of my finding that Respondent has not, as alleged in the complaint, changed existing working conditions of employees in the unit, I conclude that the General Counsel has failed to make out an unfair labor practice within Section 8 (a) (5) and (1) of the Act, on the part of the Company. Upon the basis of the foregoing findings of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. The Company is an employer engaged in commerce within the purview of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the purview of Section 2(5) of the Act. 3. The Company is not shown to have engaged in the unfair labor practices alleged in the complaint. RECOMMENDED ORDER Upon the basis of the foregoing Findings of Fact and Conclusions of Law, it is recommended that the complaint herein be dismissed. Detroit Stage Employees' Union, Local No. 38, International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, AFL-CIO and Radio and Television Broadcast Engineers Local Union 1218, International Brotherhood of Electrical Workers, AFL-CIO and Kaiser Broadcasting Corporation. Case No. 7-CD-123. April 22,1965 DECISION AND DETERMINATION OF DISPUTE This is a proceeding pursuant to Section 10 (k) of the National Labor Relations Act, as amended, following a charge filed by Kaiser Broad- casting Corporation, herein called the Employer, alleging that Detroit Stage Employees' Union, Local No. 38, International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators 152 NLRB No. 11.