Central Rufina

696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD refrain from any or all such activities, except to the extent that such rights may be affected by an agreement requiring membership in a labor organiza- tion as authorized in Section 8(a)(3) of the Act. TRW INC., TRW MICHIGAN DIVISION, 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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 500 Book Building, 1249 Washington Boulevard, Detroit, Michigan 48226, Telephone 226-3244. Sucesion Mario Mercado E Hijos d/b/a Central Rufina and Sindi- cato De Obreros Unidos Del Sur De Puerto Rico . Case 944-CA- 2115. November 1, 1966 DECISION AND ORDER On March 16, 1966, Trial Examiner Jerry B. Stone issued his Decision 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 Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision together with a supporting brief.l 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 brief, and the entire record in this case, and finds merit in certain of the Respondent's exceptions. Accordingly, the Board adopts the findings of the Trial Examiner only to the extent that they are consistent herewith. The Trial Examiner, relying basically on Fibreboard,2 found, in effect, that the Respondent, although economically motivated, vio- lated Section 8 (a) (5) and (1) of the Act by unilaterally deciding to cease prematurely its sugarcane grinding operation for the 1965 grinding season, by unilaterally subcontracting the unit work of grinding such of the sugarcane as remained to to be ground during this season, and by thereafter refusing to bargain with the Union 1 At the hearing , the Trial Examiner permitted the Association of Sugar Producers of Puerto Rico to intervene in this proceeding for the limited purpose of filing a brief with the Trial Examiner. ' Fibreboard Paper Products Corporation, 138 NLRB 550, enfd. 322 F.2d 411 (C.A.D.C.), affd. 379 U.S. 203. 161 NLRB No. 59. SUCESION MARIO MERCADO E HIJOS 697 in grievance meetings concerning these unilateral actions, thereby continuing the Respondent's original unlawful conduct. We do not agree. The Respondent has a mill located in Puerto Rico where it is engaged in the business of grinding sugarcane into raw sugar from cane which is grown on farms owned by individual members of the partnership of which the Respondent is comprised and by indepen- dent sugar farmers. The Union is the certified representative of the Respondent's grinding mill employees and has a collective-bargaining agreement with the Respondent. We are not herein directly con- cerned with the Respondent's agricultural pursuits. Relevant to this proceeding, however, are the general characteristics inherent in the Puerto Rican sugar industry and the seasonal nature and operating methods involved in the Respondent's grinding business. In this regard, the record shows that, in Puerto Rico, the sugar year is divided into two unequal segments; the slack season, during which time cane is grown and the grinding mills are readied for the coming season, and the grinding season. The grinding season begins when the cane is ripe, and traditionally ends when the supply of cane is exhausted, or, if the cane supply is not exhausted, then when there is insufficient remaining to continue grinding operations economically; when abnormal weather conditions, such as excessive rain, adversely affect the percentage of recovery of raw sugar, which averages only 10 percent under normal conditions; or when terminated by a "force majeure," a force beyond the control of man. Accordingly, there is no fixed time for either beginning or ending grinding operations, and such timing has never been a subject of bargaining. With regard to the controversy in issue, the record shows, as indicated above, that the Respondent's business is seasonal in nature and can begin only when the cane is ripe. Once the cane is cut, how- ever, it must thereafter be ground as soon as possible in order to avoid a rapid deterioration, or loss, of sugar content. An uninter- rupted production-line method of operation is thus required to obtain the best yield possible. With these factors apparently in mind, the Respondent purchased and installed new machinery and equipment in 1964 in preparation for the 1965 grinding season. The Respondent also obtained bank loans for the aforesaid purchases as well as for repairs and other improvements to its mill, financing sugarcane crops, and generally readying itself for the 1965 season. As was cus- tomary, the Respondent pledged, as collateral for the loans, its forthcoming grinding season's sugar production. On February 11, 1965, the Respondent began grinding operations for this season . Almost from the outset, however, and continuing 698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD throughout its entire 1965 grinding season, the Respondent's mill developed mechanical troubles which severely curtailed its production outflows despite continuing but unsuccessful efforts to solve the problems. Although the Respondent continued to grind, it did so at a greatly reduced rate and was, therefore, unable to process the grain fast enough. Consequently, the Respondent unilaterally sub- contracted the grinding of 21,000 tons of cane to other mills through- out the entire 1965 season in order to avoid spoilage of cane which was ready for grinding. There is no contention, however, that the Respondent acted improperly or was obligated either to notify or consult with the Union with regard to this subcontracting. In this connection, it is to be noted that the Respondent has in the past unilaterally subcontracted grinding work to other mills. This was done in 1951, and again in 1956, when the Respondent suffered tur- bine breakdowns and was unable to grind such cane as was ready for grinding and which otherwise would have rotted. In addition, the Respondent also unilaterally ceased grinding operations in the 1964 season and contracted out this work because there was insuffi- cient cane on hand to warrant a continuation of grinding. The Union was fully aware of the mechanical difficulties at the mill and, moreover, was notified by the Respondent as early as March 2, 1965, that "if the [mechanical] difficulties could not be corrected .. . Respondent would have to cease grinding and have the cane ground elsewhere." The Union, however, neither protested nor sought to bargain in this regard. Although the Respondent continued to grind, it did so at a steadily decreasing rate so that by the second week in May it was actually grinding at a monetary loss. The Respondent's lowered production yield caused it to fall in arrears in the payments on its bank loans, and this, in turn, brought notification from its bank that the bank had stopped the Respondent's credit lines and was going to recall the Respondent's loans. Accordingly, on May 12, 1965, with the grinding season drawing to a close and with 37,124 tons of cane remaining to be ground, the Respondent decided to cease grinding at a loss and to subcontract this amount of cane to other mills for grinding. On May 21, the Respondent ceased its grinding operations for the 1965 season and contracted out this work.4 These actions, however, were not unprecedented, for, as indicated above, the Respondent had unilaterally taken similar actions in 1951 and 1956. 3In 1965, the Respondent ground 155 ,898 tons of cane. During each of the previous four grinding seasons , the Respondent ground an average of 322,949 tons , the least amount ground during any of these seasons being 309 ,144 tons. 6 The Trial Examiner found that the Respondent enjoyed economic benefits by its sub- contracting arrangement The record, however , shows that the small amounts gained by the subcontracting arrangement were far overshadowed by the huge losses sustained by the Respondent and resulted in large net losses to the Respondent. SUCESION MARIO MERCADO E HIJOS 699 In addition, the record shows that there have been numerous instances in the past where Puerto Rican ' sugar mills had ceased grinding operations before all of the ready cane had been ground because of serious mechanical breakdown, and that both management and labor considered such a situation to be a "force majeure." Thereafter, the Union, exercising the provisions of the grievance procedure contained in the contract between the parties, notified the Respondent that the cessation of grinding constituted a lockout in violation of - the contract and that "we claim for each worker the amount of $225.00 for time lost, inasmuch as sugar cane sent to other mills would have been sufficient for five (5) more weeks of forty (40) hours each, grinding sugar cane at Central Rufina" (Respondent's mill).5 The parties subsequently met on several occasions to discuss the foregoing claim along with other grievances not relevant here. The Respondent explained fully the reasons for its actions, but refused to submit the Union's claim to arbitration, or enter into discussions regarding this grievance, contending that its actions were lawful. At the conclusion of the Respondent's 1965 grinding season, the Respondent began repair operations in preparation for the following season and, as it had always done in the past, employed such of its regular mill employees as were necessary for this work. In view of all of the foregoing, we cannot conclude, as did the Trial Examiner, that in the circumstances of this case the Respond- ent's unilateral decision to subcontract and its contracting out of unit work constitutes a "premature" cessation of grinding operations in violation of Section 8(a) (5) and (1) of the Act within the mean- ing of the Supreme Court's decision in Fibreboard. Instead, we agree with the Respondent that the facts in the instant case are readily distinguishable from the facts presented in Fibreboard. Unlike Fibre- board and related cases, the Respondent in the instant case was not seeking to gain an economic advantage at the expense of its employees or of the Union. Rather, the Respondent was faced not only with the inability to operate efficiently because of matters beyond its control, but, also, in view of the curtailment of its bank credit on which the Respondent's operation was completely dependent, with the inability to operate at all. It would appear, therefore, that in the circumstances of this case, the factors which led to the Respondent 's decisions to "Beyond comparing the amount of cane ground daily by the Respondent in 1965 with the amounts ground daily in the preceding 4 years, and considering that each grinding season was subject to different conditions and began and ended on different dates, there is no way of definitely ascertaining the exact duration of the Respondent's 1965 grinding season. Although the Union claims, in effect, that the season would have been extended by 5 weeks, Respondent's engineer estimated that with the Respondent's defective machinery , it would have taken the Respondent 75 days to grind the cane remaining to be ground. Evidence in the record indicates that in Puerto Rico , the grinding season is normally over by June 30, although some mills may finish in May and others in July. 700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD subcontract and to terminate its grinding are not "peculiarly suit- able for resolution within the collective bargaining framework"; 6 on the contrary, it seems certain that no amount of give-and-take in bargaining negotiations could have forestalled the Respondents' inevitable decision to cease operations for the season. Moreover, it it a well-established principle in the Puerto Rican sugar industry that a "force majeure" may be sufficient cause for curtailment of the grinding season, and Respondent's response to the "force majeure" present in this case was consistent with its past practice and the past practice for the Puerto Rican sugar industry generally. Finally, we emphasize our recent statement that "our condemnation in Fibre- board and like cases of unilateral subcontracting of unit work was not intended as laying down a hard and fast new rule to be mechani- cally applied regardless of the situation involved." 7 We also disagree with the Trial Examiner's implied finding that the Respondent violated Section 8(a) (5) and (1) by failing to bar- gain with the Union with regard to the effect of the shutdown on the employees. To the extent that the Respondent was so obligated, we believe that the Respondent satisfactorily discharged this obligation. The record clearly shows in this regard that the Union at no time questioned the Respondent's right to subcontract unilaterally in accordance with established traditions in the sugar industry, that the Union was informed of the Respondent's problem and of the impend- ing shutdown nearly 21/9 months prior to the cessation of grinding, that subsequent to the shutdown the Respondent met with the Union on several occasions during which times the Union listed its griev- ances and the Respondent fully explained the reasons which com- pelled a curtailed season. Moreover, it is clear that the Union at no time either expressed an interest in or requested bargaining as to the results flowing from the subcontracting of the grinding work. Instead, the Union argued that the Respondent's cessation of grind- ing operations constituted a lockout, in violation of its contract, and merely presented, through the grievance procedure, a claim for wages allegedly lost. Whether or not the Respondent's refusal to arbitrate the claim constituted a breach of the collective-bargaining agreement, it did not, in itself, constitute a violation of Section 8 (a) (5) and (1) of the Act.,' Accordingly, we shall dismiss the complaint. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. CFibreboard Paper Products Corp, 379 U.S 203, 213-214. Westinghouse Electric Corpo,ation (Mansfield Plant), 150 NLRB 1574. e Cf. Textron Puerto Paco (Tricot Division), 107 NLRB 583, 584. SUCESION MARIO MERCADO E HIJOS 701 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE Upon a charge and an amended charge filed on June 23 and September 23, 1965, respectively by Sindicato Obreros Unidos Del Sur De Puerto Rico (herein some- times called the Charging Party or Union), the General Counsel for the National Labor Relations Board, by the Regional Director of Region 24 (Santurce , Puerto Rico), issued a complaint dated September 23; 1965, against Sucesion Mario Mer- cado E Hijos d/b/a Central Rufina (herein sometimes called Respondent ), alleging violations of Section 8(a)(5) and ( 1) of the Act. The essential issue is whether Respondent was obligated to notify and bargain with the Union concerning its actions in ceasing grinding operations for the current season and contracting for grinding, during the current season, of the remaining sugarcane (for the season). The Respondent's answer filed in this matter admits many of the facts , denies the commission of unfair labor practices, and alleges certain affirmative defenses. Briefly stated , the main issues raised by the pleadings concern ( 1) whether Respondent (a) unilaterally (without notice to the Union ) decided to shut down its grinding mill during the season of 1965 and contracted grinding work to other mills, (b ) shut down its grinding mill, contracted grinding work to other mills, and laid off its employees involved in the grinding operations , and (2 ) whether Respond- ent refused to negotiate in good faith concerning grievances concerning its "shut down" and "layoff" of employees. In connection with the above issues the Respondent 's answer averred that the "shut down" was caused by factors beyond Respondent 's control, that the decision to "shut down" in the sugar grinding industry has been solely an exclusive preroga- tive of Respondent's management, and that the "shut down" decision placed employ- ees in the position of being "agricultural labor" and therefore the "ex-employees" were not employees within the meaning of Section 2 (3) of the Act. The Respond- ent's answer averred that it did negotiate in good faith concerning grievances relat- ing to the "shut down" but that if it did not that it had not violated the Act since the matter involved was governed by the terms and conditions of the collective- bargaining agreement and the Union had not exhausted its remedies under other sections of the law. Pursuant to appropriate notice, a hearing was held before Trial Examiner Jerry B. Stone at Ponce, Puerto Rico, on December 6, 7, 8, and 9, 1965. The General Counsel and the Respondent were represented at the hearing , participated therein, and were afforded the right to present evidence , to examine and cross-examine wit- nesses, to offer oral argument, and to file briefs . Briefs were filed by the General Counsel , the Respondent, and the Association of Sugar Producers of Puerto Rico, and have been considered.' Upon the entire record in this case and from my observation of the witnesses, the following findings of fact, conclusions of law, and recommendations are made 2 FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER INVOLVED The facts pertaining to the business of the Employer involved are based upon the pleadings and admissions therein .3 Sucesion Mario Mercado E Hijos d/b/a Central Rufina (Respondent) is and has been at all times material herein a civil law partnership organized and doing business under the laws of the Commonwealth of Puerto Rico. At all times material herein Respondent has maintained its principal office and place of business at Guayanilla, Puerto Rico, and has been at all times material herein engaged in said plant and location in the elaboration, processing, sale, and distribution of raw sugar. During the 12 months preceding September 23, 1965, the Respondent caused to be shipped directly to the Commonwealth of Puerto Rico from points and places outside thereof, goods and materials valued in excess of $50,000. During the 12 months preceding September 23, 1965, the Respondent caused to be refined, sold, and distributed products valued in excess of $50,000, which products were sold and 'The Association of Sugar Producers of Puerto Rico was granted the limited right of filing a brief with me in this case 2All credibility resolutions made with respect to the witnesses' testimony are based on a composite evaluation of witness demeanor and logical consistency of the evidence. 3 Certain amendments as to the complaint and answer were allowed at the hearing. 702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD transferred to purchasers in the Commonwealth of Puerto Rico, said purchasers in turn shipping said products valued in excess of $50,000 to points outside the Commonwealth of Puerto Rico. During the 12 months preceding September 23, 1965, the Respondent caused to be shipped to its plants goods and materials valued in excess of $50,000 from sellers located within the Commonwealth of Puerto Rico, said goods and materials valued in excess of $50,000 having been shipped to said sellers directly from points located outside the Commonwealth of Puerto Rico. Considering the foregoing and all of the evidence in the case, I conclude and find that the Respondent is now and has been at all times material herein an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act4 H. THE LABOR ORGANIZATION INVOLVED The facts pertaining to the labor organization involved are based upon the plead- ings and admissions therein. Sindicato Obreros Unidos Del Sur De Puerto Rico (the Union) is now and has been at all times material herein a labor organization within the meaning of $ee- tion 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Preliminary issues Unless indicated otherwise, the facts relating to the preliminary issues herein are based upon the pleadings and admissions thereto. 1. The appropriate unit All production and maintenance employees employed by the Respondent at its Central Rufina, Guayanilla, Puerto Rico, mill but exclusive of all office clerical employees, analysts, administrative and executive personnel, guards, and supervisors, as defined in the Act, constitute a unit appropriate for the purpose of collective bar- gaining within the meaning of Section 9(b) of the Act. 2. Selection of the Union-certification of Union's status On or about February 13, 1963, the majority of the employees of Respondent in the unit described above, by a secret-ballot election conducted under the super- vision of the Regional Director for Region 24 of the National Labor Relations Board, designated and selected the Union as their representative for the purpose of bargaining with Respondent and on or about February 21, 1963, said Regional Director certified the Union as the exclusive collective-bargaining representative of the said unit. The Respondent's answer denied in effect the complaint allegation that the Union had continued to be the exclusive bargaining representative of the employees in the appropriate unit described above. The evidence reveals, however, that a collective- bargaining agreement between the Respondent and the Union was in effect from January 16, 1963, to December 31, 1965. Considering all the foregoing and the absence of evidence to offset the presumptions therefrom, I conclude and find as follows: At all times since February 21, 1963, and continuing to date, the Union has been the representative for the purposes of collective bargaining of the employ- ees in the unit described above, and by virtue of Section 9(a) of the Act has been and is now the exclusive representative of all the employees in said unit for the purposes of collective bargaining with respect to rates of pay, hours of employment, and other terms and conditions of employment. B. Backgrounds The Respondent has been engaged in the operation of its mill at Guayanilla, Puerto Rico, for approximately 70 years . The operation of Respondent's mill is 4 The Respondent admitted the foregoing conclusion of law except as answered In a special defense that the "shut down" of operations (around May 22, 1965) changed the status of the "employees" to "agricultural laborers " and eliminated the status of "em- ployees." As indicated later in this Decision, in accordance with and wtihin the meaning of the decision and approved remedial action in Fibreboard Paper Products Corp. V. N L R B., 379 U.S. 203, I find no merit to Respondent's referred to contention. 5 The background facts are based upon the credited testimony of Juan V. Diaz. SUCESION MARIO MERCADO E HIJOS 703 intertwined with the flow of sugarcane from the farms nearby. Thus, after the sugar cane has been cut, it is transported to the mill for processing into sugar. A byproduct of the cut sugarcane is bagasse which is used as a fuel supply to run the boilers at the mill . The sugarcane processed at Respondent 's mill comes from farms owned by Respondent, from farms owned by partners in Respondent's civil law partnership, and from independent farmers.6 1. Sending of cane to other mills 7 Juan V. Diaz, manager of Respondent, credibly testified to the following effect: (1) that Respondent had only had two or three instances in the past 70 years wherein it had had to have sugarcane processed at other mills ; (2) that in 1956, because of problems with a "turbine," Respondent had made arrangements with other mills to grind sugarcane so as to avoid spoilage and rotting of the cane at Respondent's mill; (3) that after the turbine problem was solved in 1956, the Respondent, with difficulty, resumed its own grinding operations ; (4) that Respond- ent had promptly handled a situation in 1951, similar to the above-described 1956 situation); (5) that Respondent at the end of 1964 grinding season had sent sugar- cane to other mills for grinding because the amount of sugarcane was insufficient to maintain Respondent's normal operations ; (6) the Respondent, almost from the beginning of the 1965 grinding season (February 11, 1965 ) and until May 21, 1965, had sent sugarcane to other mills to avoid spoilage and rotting ; (7) that Respondent on the above occasions that it sent sugarcane to other mills did so without prior notification or discussion with the Union; and ( 8) that the complete cessation of seasonal operations on May 22, 1965 , was the first time in Respondent's history that such had happened because of mechanical failures. The amount of sugarcane sent by Respondent to other mills in the 1956 grinding season (referred to in ( 6) above ) was 21 ,001.87 tons and included sugarcane from Respondent's farm, from the farms of partners in Respondent 's civil law partner- ship, and from farms of independent farmers. Considering all the foregoing and all of the evidence in this case , I am con- vinced and conclude and find that the facts do not reveal that Respondent has an established past practice of subcontracting the grinding of the sugarcane to other mills as related to the actions in May 1965 and described later herein. 2. The grinding season .8 The Respondent's grinding season operation for 1964 was from around Janu- ary 26 to around June 14, 1964. During this season Respondent encountered pro- duction and mechanical problems which resulted in an unsatisfactory grinding season from Respondent's viewpoint. During the "dead" season (June 14, 1964, to around February 11, 1965-when made) the Respondent undertook a compre- hensive and expensive renovation program. 3. Problems during the 1965 grinding season 9 The Respondent commenced its 1965 grinding season at its mill around Febru- ary 11, 1965, and continued its grinding operations until May 22, 1965. The Respondent encountered many problems in its operations and in the related growth of the sugarcane crop. Climatic conditions (drought-and rains) interfered with the cycle of growth of crops and potential sugar yield. The main problems however were those of mechanical breakdowns and failure of equipment. For efficiency in total operations the crops must mature timely, be cut timely, and processed timely at the grinding operation. Problems at any stage of the cycle may have an adverse effect on the ultimate sugar yield and profit therefrom. The mechanical problems besetting the Respondent from February 11, 1965, and thereafter, as previously 6 The named suppliers of sugar cane all normally had their sugar cane processed at Respondent's mill. 7 The facts as to the sending of sugar cane to other mills are based upon exhibits and the credited testimony of Juan V. Diaz. 8 The facts as to the 1964 grinding season are based upon the credited testimony of Juan V. Diaz. 9 The facts as to the problems besetting the Respondent during the grinding season are based upon a composite evaluation of the credited testimony of Porrata , Torres, Sosa, and Diaz and the production records. 704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD indicated, necessitated the sending of some sugarcane (between February 11 and May 21, 1965) to other mills to eliminate spoilage and rotting of the sugarcane. The Respondent's grinding operations produced substantially below the estimated normal production for the period of time involved herein (February 11-May 21, 1965). Although at all times prior to May 1965 the Respondent attempted to solve its mechanical problems, it was unable to do so. The Respondent finances its operations by boirowing money from the banks for repairs, etc., and, as the grinding operation commences, in pledging the sugar produced for money with which to pay back the earlier loans. During the 1965 grinding season, as a result of the effect of the mechanical problems on production, this financial cycle was interfered with and Respondent was unable to timely repay its loans. The First National City Bank (branch in Ponce, Puerto Rico), around May 1, 1965, commenced complaining about the security of loans to Respondent and apparently suggested that Respondent that steps to insure the payment of such loans. During the period of time, May I to May 22, 1965, the Respondent continued to try to solve its mechanical problems unsuccessfully. On May 12, 1965, the cycle of production was of such a nature that instead of using its own bagasse (residue from grinding of sugarcane) Respondent had to get bagasse from other mills to use as fuel for its boilers. 4. Respondent's May 1965 decision to cease operations, etc.ro On May 12, 1965, the Respondent decided that it must make other arrangements for the completion of the sugarcane grinding, that it should contact nearby mills and obtain contractual considerations for the diverting of sugarcane to such mills for grinding, and that it should stop its 1965 sugarcane grinding. On May 12, 1965, or shortly thereafter, the Respondent contacted several nearby mills with reference to entering into agreements concerning the grinding of sugar- cane which normally would have been ground at Respondent's mill. 5. Arrangement with Central Mercedita, Inc." After May 12 and before May 20, 1965, the Respondent had three or four meetings with officials of "Central Mercedita, Inc." On May 20, 1965, Respondent and Central Mercedita, Inc., exchanged letters reflecting the agreement of the parties as to the grinding of sugarcane normally ground at Respondent's mill. These letters are herein set out. Central Mercedita, Inc. Mercedita, Puerto Rico Gentlemen: May 20, 1965 We are confirming conversations had between your Messrs. John Serralles Tristani, Felix J. Serralles Nevarez, and Pedro Juan Santiago, with our Messrs. Pedro H. Porrata and Juan V. Diaz, yesterday evening. As you were informed, we have decided to end the operations of our Central Rufina during the present grinding season and to send you, to be ground, the sugar cane that is ripe and ready to be cut that has not been cut as yet which, on May 13, 1965, and according to the list we showed you and left with you, had been estimated on that date as being about 80,000 tons of sugar cane belonging to our company and the farmers. You will proceed to grind this sugar cane at your Central Mercedita under the following terms and conditions agreed to in said conversation: 1. We shall be free to deliver daily all the sugar cane that personnel and equipment available permits. 2. You shall pay the following hauling and unloading rates for this sugar cane: a. From the Guayanilla and Yauco areas, one dollar and twenty-five cents ($1.25) per ton. b. From the Sabana Grande, San German, Lajas and Hormigueros areas, one dollar and seventy-five cents ($1.75) per ton. 10 The facts as to Respondent's May 1965 decision to cease operations are based upon a composite of the credited testimony of Diaz and Porrata. n The facts as to Respondent's May 1965 arrangements with Central Mercedita are based upon a composite of the credited testimony of Juan V Diaz, Porrata, and Pedro Juan Santiago. SUCESION MARIO MERCADO E HIJOS 705 3. You will pay us a one dollar ($1.00) bonus per ton of sugar cane, as a bonus, for each ton of sugar cane belonging to the company or to the farmers that is delivered to you to be ground. This bonus is in addition to payments for sugar, molasses and others that the federal and insular rules and laws establish, and same is also applicable to sugar cane sent by us to that mill for grinding prior to this date and pursuant to our prior conversations and commitments. 4. You have knowledge of the contract of sale of raw sugar signed by us with the Galban Lobo Puerto Rico, Inc. company, of which Puerto Rican American Sugar Refinery, Inc. is the guarantor It is agreed that it shall be considered as sugar delivered by us under said contract, the total amount of sugar produced by the cane belonging to this company and to the farmers that is delivered for grinding at yosr mill, and that in this same manner a five cent premium per hundred pounds-4f sugar above the average price agreed to in said contract will be paid to us in the final liquidation of the contract of sale of raw sugar we have referred to above. Very truly yours, MARIO MERCADO E Hijos (S) Marico Mercado Riera By: MARIO MERCADO RIERA Du ector-Manager APPROVED: CENTRAL MERCEDITA, INC. Messrs. Mario Mercado e Hijos Central Rufina Guayanilla, P.R. Gentlemen: We wish, through this means, to make a clarification in regards to the agreement for the grinding of sugar signed by us on this date, that nothing of what is mentioned in same must be interpreted as limiting our right to termi- nate the grinding at Central Mercedita at any time in which, due to insufficient unloading, because of a drop in the produce or for any cause including force majeure, in our opinion , it is anti-economical to continue grinding. Very truly yours, CENTRAL MERCEDITA, INC. ACCEPTABLE: but for similar reasons we cutting of sugar cane to be ground. O.K. MARIO MERCADO E Hijos (S) Mario Mercado Riera MARIO MERCADO RIERA Director Manager (S) O. de Aragon Executive Vice President reserve the right to suspend the 6. The Union's knowledge of problems 12 It is clear that the Union knew of the serious mechanical problems affecting Respondent's operations and the effect of such problems on the potentiality of a cessation of operations. On February 16, 1965, the Union filed a grievance concern- ing 90 persons not hired at the beginning of the season . During the discussion of this grievance on March 2, 1965, the Respondent's position was that improvements and new machinery eliminated the need for the 90 persons because of elimination of certain manual operations. Diaz credibly testified that in discussing the grievance he stated in effect that the necessity of the grievance committee might be eliminated inasmuch as the Respondent was contemplating discontinuance of operation as it could not go on because of the pool operation of the factory. Porrata credibly testified to the effect that in discussions with the Union that he had told Jose Caraballo (for the Union) that if the difficulties could not be corrected that Respondent would have to cease grinding cane and have the cane ground elsewhere. 12 The facts as to the Union 's knowledge of Respondent ' s problems are based upon a composite of the credited testimony of Ratael Torres Lugo, Angel Rodriguez , Juan Morales Vasquez, Boris D Perez, Juan V. Diaz, and Pedro Porrata. 264-188-67----vol. 161- 4 6 706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Rafael Torres Lugo (referred to sometimes herein as Torres ), president of Local 7 of the Union, credibly testified to the effect that he visited Respondent's mill twice weekly and that he knew of the mechanical problems affecting operations of the Respondent . The facts reveal that a common characteristic of sugarcane, not timely cut, is a lower sugar yield. I am convinced that in an operation such as the Respondent's that a considerable number of employees and experienced labor leaders would know the reasonable expectation of the lower sugar yield problem where operations were affected by mechanical problems.13 It is reasonable to believe and I am convinced that the workers involved at the mill would discuss the problems with Torres and that Torres and the employees would communicate with Jose Caraballo (president of the Union ) about the problems and the effect on their hours of work.14 7. Lack of notification or discussion with Union-as to termination of grinding 15 At no time prior to the commencement of its effectuation of its decision to terminate its grinding operations and to divert sugarcane to other mills for grinding did the Respondent notify (or discuss with) the Union of the said decision. The foregoing fact is not seriously disputed in the evidence or in the briefs . Jose A. Carraballo credibly testified to the effect that the Respondent did not notify him or discuss with him prior to the evening of May 22, 1965, its decision to cease operations and to divert its and others' sugarcane to other mills for grinding. Rafael Torres Lugo (president of Local 9 of the Union-at Respondent's mill) only learned from employees at the mill on the evening of May 21, 1965, that Respondent was ceasing its grinding operation.16 On May 21, 1965, Respondent's supervisor (in charge of personnel and super- visor of the factory) notified the various shifts that the Respondent would complete its production work on May 22, 1965, at 6 a.m.17 On May 22, 1965, the Respond- ent ceased grinding sugarcane at 9 a.m. and the employment of its employees for grinding season work was terminated as of the end of the morning shift on May 22, 1965. Around 9 a.m. Rafael Torres Lugo was at Respondent's mill and saw Gen- eroso Rullan Rodriguez ( Respondent's supervisor of the factory and person in charge of personnel ). Rafael Tones Lugo asked Generoso Rullan Rodriguez what was happening. Generoso Rullan Rodriguez told Rafael Tones Lugo that the "grinding was stopped." On May 22, 1965, approximately at 6:05 p.m., Pedro M. Porrata (Respondent's general counsel ), transmitted a telegram addressed to Jose Caraballo (president of 33 Respondent contends that the fluctuation in dues transmitted to the Union per check- off agreement constitutes some notice of Respondent 's operational difficulties . Since the dues are not directly related to the amount of employees ' wages , I do not find that the evidence of weekly payroll amounts is of intelligible probative evidentiary value. 14I do not credit Jose Caraballo 's testimony to the effect that he did not know of the mechanical problems besetting the mill, or to the effect that the employees had not dis- cussed such problems with him, or to the effect that Porrata (or others of the Respondent) had not discussed such problems with him. 15 The facts as to Respondent's failure to notify the Union of Respondent's May 1965 decision , re : termination of operation, etc., are based upon a composite of the credited testi- mony of Caraballo and an evaluation of the total consistency of all of the evidence. 111 discredit Rafael Torres Lugo's denial that he learned from employees about the cessation of grinding operations on May 21, 1965. I attach weight to the statement in his sworn affidavit of July 14, 1965, to the effect that he did learn from employees of the cessation of grinding on the evening of May 21, 1965 . I do not credit Generoso Rullan Rodriguez' testimony to the effect that he told Rafael Torres Lugo ( around 5 to 6 p.m. on May 21, 1965 ) that there was a possibility that the grinding season might be stopped, and to the effect that he did not see Rafael Torres Lugo on May 22, 1965 . I find it hard to believe , as revealed by Generoso Rullan Rodriguez ' other testimony that he would un- qualifiedly tell the employees that the grinding season was finished and yet tell Rafael Torres Lugo that there was a "possibility " I am convinced that Generoso Rullan Rodriguez was unsure of his testimony and that he was confused as to the timing . I credit Rafael Torres Lugo in his testimony to the effect that lie was not at the mill on the evening of May 21, 1965 , and that he saw Geneioso Rullan Rodriguez on May 22, 1965, and that Generoso Rullan Rodriguez told hiin at that time of the cessation of grinding. 17 Based upon Rullan's credited testimony SUCESION MARIO MERCADO E HIJOS 707 the Union). Porrata's telegram set forth "we have tried to communicate with you by telephone fruitlessly. Please call us. Thank you." Jose Caraballo, in fact, did not receive the referred-to telegram until May 24, 1965.18 8. Porrata-Caraballo conversation-May 22, 1965 ie Around 7 p.m. May 22, 1965, Porrata (general counsel for Respondent) visited Jose Caraballo (president of the Union) at Caraballo's home. Porrata told Cara- ballo that Respondent could not grind cane any more that season, that the engineers could not correct the mechanical problems for grinding, and that Respondent was in trouble because the bank had stopped Respondent's credit. Caraballo asked where the sugarcane was to be ground. Porrata told Caraballo that Respondent had been considering the centrals in the area and that Respondent was going to send the sugarcane to Serralles (Central Mercedita). Caraballo told Porrata that the Union represented the employees at Central Mercedita, that this was a good choice. Cara- ballo told Porrata what he estimated would be the number of grinding days at Central Mercedita. Porrata told Caraballo that the Respondent had checked with the engineer to see what could be done with the mill, and that Caraballo's union workers could be used for repair work on the mill. 28 Pedro M. Porrata (general counsel for Respondent) credibly testified to the effect that he had had a "heart condition" and that a deposition of his testimony had been made for that reason. The parties stipulated a substantial portion of Porrata's testimony from the deposition taken. Porrata also testified in answer to a few questions. It was evident from observing Porrata testify that the effort of testifying was taxing upon his condition. From reading the stipulated portions of Porrata's testimony and observing and hearing his testimony at the hearing, I am convinced that the strain of testifying and the com- plexities of the issues and questions involved resulted in an implication in some of his testimony not intended by Porrata. Porrata impressed me with his demeanor as a truthful and honest witness attempting to tell a complete and truthful story. Considering Porrata's testimony as a whole, I believe his answers on cross-examination to the effect that he did not remember communications to the Union prior to May 22, 1965, as to the decision to terminate grinding on May 22, 1965, and to the effect that after the bank had com- municated about the problem of loans (around the first of May) that the communications with the Union were on May 22, 1965, and in grievance meetings wherein the Respondent told the Union that the bank had stopped the credit. The record reveals that the only Incidents of grievance discussion after May 1965 concerned the grievances after the May 22, 1965, shutdown. Considering the totality of all of the evidence and the prob- abilities thereof, I am convinced that the telephone calls, referred to in the May 22, 1965, telegram, and in the testimony relating thereto, occurred on May 22, 1965. Any implication in Porrata's testimony contrary to the foregoing is not believed to have been intended as such, and in any event, considering a composite of evaluation of Porrata's demeanor as a witness and the logical consistency of all the evidence, is not credited. ie The facts as to the Porrata-Caraballo conversation are based upon a composite of the credited testimony of Porrata and Caraballo. The general thrust of what occurred is not in great dispute. Caraballo testified to the effect that Porrata referred to sending the sugar- cane to Central Mercedita, San Francisco, and Guanica. The sugarcane in fact was diverted to the three mills. Elsewhere in the testimony Diaz referred to contacting the three referred to centrals but referred to making arrangements with Central Mercedita. Whether Porrata or Carraballo's version as to the central or centrals is believed does not affect the overall meaning of the facts. Considering the arrangement as revealed by the letters between Respondent and Central Mercedita, I find that the preponderance of the evidence favors a finding as set out in the finding of facts. Caraballo's'testimony appears to conflict with Porrata's as to what Porrata said with reference to whether all employees would be employed on repair work. Considering the testimony of both Porrata and Caraballo and the logical consistency of all of the evidence, I am convinced that Porrata simply told Caraballo that all union workers would be used on the repair work that could be used and that Porrata did not use descriptive words to reveal either that "all" would be used or that only a "few" would be used. I am convinced that Porrata understood that he was conveying that such employees as would be necessary would be used on repairs, and that Caraballo construed that the amount of repair work was sufficient to keep all of the employees employed and believed that this was what Porrata was saying. The testi- mony of Porrata and Caraballo inconsistent with the finding of facts herein, accordingly, is discredited. 708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD When Rafael Torres Lugo was at Respondent's mill on May 22, 1965, he observed that the Respondent's grinding employees were not working.20 On May 23, 1965, Rafael Torres Lugo and several of Respondent's employees, including Bar- tolo Caraballo (vice president of Local Union No. 9) and Juan Galazara, visited Jose Caraballo and reported to him the fact that Respondent's grinding employees were not working Jose Caraballo construed this report as being contrary to the situation as reported to him by Porrata.21 On Monday, May 24, 1965, about 9 a.m., Jose Caraballo and Rafael Torres Lugo went to Respondent's mill and ascertained that the grinding employees were not being employed at Respondent's mill. 9. Diversion of sugarcane to other Mills 22 After May 22, and to June 29, 1965, sugarcane normally destined for Central Rufina was diverted to other centrals. In accordance with Respondent's agreement with Central Mercedita, Inc., 30,505.15 tons of sugarcane was diverted to Central Mercedita, Inc. Of this sugarcane 20,222.65 tons belonged to Respondent, 9,704 63 tons belonged to partners in Respondent's civil law partnership, and 577.87 tons After May 22 and to June 29, 1965, sugarcane normally destined for Central Rufina was diverted to centrals other than Central Mercedita, Inc. Of the latter sugarcane 864.96 tons belonged to Respondent, 1,750.85 belonged to partners in Respondent's civil law partnership, and 4,003.31 tons belonged to independent farmers. 10. Events concerning the grievance meeting 23 At sometime between May 24 and June 8, 1965, the union officials checked with their attorney. The Union then through Jose Caraballo transmitted a letter on June 8, 1965, to Porrata (for the Respondent). Caraballo's letter set forth a request for a meeting of the Complaints and Grievances Committee to be held at the Union's office on June 14, 1965. The requested meeting, among other things, was to be held concerning grievances as to the May 22, 1965, layoff. The June 8, 1965, letter asserted, among other things, in effect that the Union had not been notified as to the reasons for the May 22, 1965, layoff, that the Union was inter- ested in resolving the problem as a grievance although it could defend its and the employees' rights by other methods, and that the Respondent was not living up to its contractual obligations. The Union claimed $225 for 5 weeks' work for each worker affected by the May 22, 1965, layoff. Following the receipt of the Union's letter of June 8, 1965, and at sometime prior to June 11, 1965, Attorney Cuprill (one of Respondent's counsels) tele- phoned Jose Caraballo and requested postponement of the suggested June 14, 1965, meeting on the grounds that Cuprill would be out of town and in the United States on such date. On June 11, 1965, Jose Caraballo (for the Union) transmitted a telegram to Porrata (for the Respondent) referring to Cuprill's telephonic request, denying the same, and insisting that the meeting be held but agreeing to a post- ponement to 2 p.m. on June 14, 1965. On June 14, 1965, Porrata (for the Respondent) and Jose Caraballo (for the Union) discussed the setting of a meeting date. Porrata denied the imputations of contractual violations in the Union's letter of June 8, 1965, and in Caraballo' s tele- gram of June 11, 1965. Porrata asserted that the Respondent could not meet on June 14, 1965. Porrata and Caraballo agreed to a grievance meeting on June 21, 1965, at 9 a.m. Porrata, on June 14, 1965, transmitted a confirming letter as to the June 14, 1965, conversation with Caraballo. On June 21, 1965, the parties met at the office of the Depaitment of Labor in Yauco, Puerto Rico. Among those present representing the Union were Jose Cara- ballo and Rafael Torres Lugo. Among those present representing the Respondent were Porrata and Juan V. Diaz. Caraballo spoke at length concerning various cases of grievance including the grievance as to the May 22, 1965, layoffs. One of the grievances referred to was one concerning a man named Rodriguez. This grievance was not one of the specific grievances referred to in Caraballo's June 8, 1965, 21 The facts are based upon Torres' credited testimony. u This finding of fact is based upon Caraballo's credited testimony 22 The facts are based upon a composite evaluation of Diaz' credited testimony and exhibits in the record. 2a The facts are based upon a composite of the exhibits and the credited testimony of Porrata, Diaz, Caraballo, Torres, and Angel Rodriguez. SUCESION MARIO MERCADO E HIJOS 709 letter. Caraballo mentioned that he would like to have a letter concerning the May 22, 1965, layoff for use as to employees' unemployment benefits. Respondent's representatives (Porrata and Diaz ) told Caraballo that the Respondent had acted in the cases referred to within its rights and was not obliged to discuss anything with the Union . Caraballo insisted that the parties discuss the grievances . Respond- ent's representatives (Porrata and Diaz ) thereupon told Caraballo to give them specific details as to each grievance. The parties agreed that Caraballo would furnish such details and that the parties would meet again on June 23 , 1965, around 10 a.m. in Porrata's law office. Caraballo, after the June 21 , 1965, meeting, prepared a letter (dated June 21, 1965 ) summarizing the details of the various grievances (including the grievances as to the May 22, 1965, cessation of grinding ) and had the same delivered to Porrata's office on June 21, 1965 . The content of Caraballo's June 21, 1965, letter was substantially similar to his June 8 , 1965, letter with the exception of the addi- tion of a grievance concerning money due a man named Rodriguez. On June 23, 1965, Jose Caraballo and several others for the Union, appeared at Porrata's law office at the designated time. Caraballo informed Porrata's secretary of their presence and in turn were informed by Porrata 's secretary that Porrata was busy with several persons. Around 11:45 in the morning Caraballo, under- standing that Porrata always left his office for the day at noon, decided to leave. Caraballo, thereupon, went to San Juan, Puerto Rico, to file unfair labor practice charges in the instant case. On the same day, June 23, 1965, Caraballo returned from San Juan, Puerto Rico, to his home. That afternoon, Porrata called Caraballo and told Caraballo that Caraballo had left without having the meeting. Porrata suggested that there be another grievance meeting at Porrata's office. Caraballo proposed that the meeting be held in the office of the Department of Labor (located at Yauco, Puerto Rico ). Caraballo and Porrata agreed on a meeting on June 28 , 1965, in the office of the Department of Labor. On June 25, 1965, Porrata transmitted a letter to Caraballo in which Porrata (for the Respondent ) denied the Union 's allegations of contract violations and bad faith therein. On June 28 , 1965, the Union and the Respondent held the grievance meeting as scheduled. Among those present for the Union were Jose Caraballo, Rafael Torres Lugo, and Angel Rodriguez . Among those present for the Respondent were Porrata, Juan V. Diaz, Weasler (an attorney for the Respondent ), and Sosa.24 Jose Caraballo stated the Union's position as regards to the various alleged grievances including the grievance concerning the May 22 , 1965, cessation of grinding, layoff of employees, and diverting of sugarcane to other centrals. Juan V. Diaz (for the Respondent ) expressed the Respondent's reasons for the May 22, 1965, cessation of grinding , layoff of employees, and diverting of sugarcane to other centrals . The reasons for the May 22, 1965, action, as asserted by Diaz, were inefficiency of operations , the bank's iefusal of loans, and the bank's recommenda- tion that the sugarcane be sent to other mills. Caraballo asked Diaz to name the bank involved but Diaz did not do so. Caraballo asked Diaz if Porrata had told the truth to the effect that all employees would be used on repairs of the mills. Diaz told Caraballo that employees necessary for work on repairs would be used. Diaz asked Caraballo about the contract terms for the next grinding season. Cara- ballo told Diaz that discussion of the next contract was premature at this time. Diaz told Caraballo that the problems must be settled , and that if the Union insisted on its claims, that the central would never grind any more. Diaz told Caraballo that the Respondent had acted correctly in its actions and that there was nothing to discuss about the grievances. Caraballo (for the Union) proposed arbi- tration of the grievances and proposed the names of three arbitrators . Diaz told Caraballo that he would like to wait until July 10, 1965, to answer the Union as to whether Respondent would accept the Union 's proposed arbitrators or whether Respondent would propose others. During the meeting of June 28, 1965 , the parties discussed other grievances than the one concerning the May 22 , 1965, cessation of grinding. At sometime in the meeting Porrata told the parties that the numerous complaints had tired him and left the meeting. The parties continued to discuss various grievances after 24 Cuprill ( an attorney for the Respondent ) was also present at one or both of the June 21 and 28 1963 , meetings 710 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Porrata left.25 The Respondent after the June 28, 1965, meeting (and as of the hearing in this matter) did not answer the Union's request as to the proposed arbitrators. 11. Conclusions In summary with respect to Respondent's May 1965 decision to cease grinding operations, to layoff the employees involved in the grinding operations, and to divert its and other sugarcane to other mills for grinding, it is noted (1) that the Respondent was economically motivated in its decision and (2) that the Respond- ent did not afford the Union an effective opportunity to bargain about said decision prior to the effectuation of said decision on May 21 and 22, 1965. The General Counsel contends that the instant case is controlled by the decision of the Supreme Court of the United States in Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203. The Respondent contends that the facts involved in the instant case are distinguishable from the facts involved in the Fibreboard case and that under the rationale of Fibreboard case that the facts do not reveal a violation. Respondent's brief asserted, inter alia, as follows: Perhaps we anticipate the General Counsel's argument, but we do believe he places considerable reliance on the Supreme Court's decision in the Fibre- board case. Any reference to the Fibreboard case should keep two highly significant points in mind . First, the decision to contract out the maintenance work in Fibreboard did not change the basic operations of the company involved. The maintenance work was let out under a terminable contract on a cost-plus basis. The contractor performed the same work previously per- formed by company employees on company premises with company machines and equipment. The contractor was under the direct control of the company. The company directly enjoyed the benefits of the contractor's work. Second, the Supreme Court in Fibreboard carefully limited its decision to the facts presented in that case. At page 209 of 379 U.S., Mr. Chief Justice Warren, who wrote the majority opinion, stated: We agree with the Court of Appeals that, on the facts of this case, the "con- tiacting out" of the work previously peifoinied by members of an existing bargaining unit is a subject about which the National Labor Relations Act requires employees and the representatives of their employees to bargain collectively. [Emphasis supplied.] At page 215 of 379 U.S., the opinion continues: We are thus not expanding the scope of mandatory bargaining to hold, as we do now, that the type of "contracting out" involved in this case-the replace- ment of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment-is a statutory subject of collective bargaining under §8(d). Our decision needed not and does not encompass other forms of "contracting out" or "subcontract- ing" which arise daily in our complex economy. [Emphasis supplied.] With respect to the foregoing I note that Respondent in the instant case did enjoy some benefits from the arrangements concerning the diverting of sugarcane to Central Mercedito, Inc. Thus the Respondent received a $1 bonus per ton of sugarcane diverted to Central Mercedita, Inc. The Respondent, also, apparently benefited from greater financial return as to its own sugarcane (because of more timely processing and less loss of yield) or at least suffered less loss therefrom. In essence the same work as involved in the grinding of sugarcane at Respondent's mill was performed at the other mills in what would appear to be substantially similar employment conditions. Although the work was not performed on the same premises, the arrangements constituted in effect transfering work from Respondent which normally was performed by Respondent's employees to another mill to be performed by the employees of the other mill. In my opinion such distinctions as existed do not vary the impact of the application of the Fibreboard decision on the instant case. Contrary to Respondent's contention, I interpret the decision of the Supreme Court of the United States in Fibreboard as not limiting its finding to the precise factual situation involved in that case, but as limiting its finding therein to the z Shortly after the meeting it appears that Porrata had a serious heart attack. SUCESION MARIO MERCADO E HIJOS 711 type of "contracting out" involved-the replacement of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment. The Respondent in his brief asserts that issues herein should include (1) to what extent was the grinding season for 1965 out of control of Respondent and (2) to what extent were the decisions of management matters solely within the discretion of management. In essence the above issues really raise again the question of man- agement prerogatives and mandatory subjects of bargaining. As indicated previously, the Supreme Court's Fibreboard decision impels a finding that Respondent's May 1965 decision was a mandatory subject of bargaining. The facts reveal that Respondent did decide, regardless of motivating reason, in May 1965 to take the action of cessation of grinding operations, of layoff of grind- ing employees, and of making arrangements to divert sugarcane to other mills. The Supreme Court of the United States in the Fibreboard decision discussed a comparable problem of difficulty in possibility of resolving economic problems. The Court pointed out that problems involved in "contracting out" to gain econo- mies by reducing the work force, decreasing fringe benefits, and eliminating over- time payments had "long been regarded as matters peculiarly suitable for resolu- tion within the collective bargaining framework, and that industrial experience demonstrates that collective negotiations has been highly successful in achieving peaceful accommodation of the conflicting interests." The Court also pointed out at 214: Yet, it is contended that when an employer can effect cost savings in these respects by contracting the work out, there is no need to attempt to achieve similar economies through negotiation with existing employees or to provide them with an opportunity to negotiate a mutually acceptable alternative. The short answer is that, although it is not possible to say whether a satisfactory solution could be reached, the national labor policy is founded upon the con- gressional determination that the chances are good enough to warrant sub- jecting such issues to the process of collective negotiation. The Supreme Court of the United States in the Fibreboard decision pointed out further with reference to the facts in that case at 214: As the Court of Appeals pointed out, "it is not necessary that it be likely or probable that the union will yield or supply a feasible solution but rather that the union be afforded an opportunity to meet management's legitimate com- plaints that its maintenance was unduly costly." From the foregoing it is clear that, even if the problems facing the Respondent were of such a nature that there might appear scant probability of the Union's furnishing a solution, the national labor policy is founded on the congressional determination that the chances are good enough to warrant subjecting such issues to the process of collective bargaining. The Respondent 26 argues in effect that the problems of the sugar industry in Puerto Rico are so unique that the Respondent's May 1965 decision (cessation of grinding, etc.) was a decision solely within management's prerogative. It would appear that in most cases involving decisions to subcontract or of cessation of operations the equities of the situation would constitute a basis for argument as to the emeigency nature of the need for decision. It would appear that the problem involved in each case would depend on the facts concerning the need for decision and the time needed to effectively face the problem. In this case it is clear that there was ample time within which the Respondent could have notified the Union of its definitive type of decision prior to actual final determination and effectuation of the decision. Under such circumstances I see no reason why the National Labor Policy should be applied differently toward the Respondent or toward the Puerto Rico sugar industry in general. The Respondent in his brief asserts that issues herein should include (1) whether the Union had knowledge of the financial, mechanical, and physical condition prevalent at Rufina in 1965 and (2) whether there was an obligation on the Union to initiate "negotiations" with Respondent to the extent operations might have effect on working conditions of its members. "The Association of Sugar Producers of Puerto Rico was granted the limited right of the hearing herein to file a brief in this matter Substantially the Sugar Producers' brief concurs with Respondent's contention and brief. 712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The facts are clear, that the -Union did know, of then mechanical problems and physical conditions prevalent at Respondent' s mill in a general but not necessarily specific way. The facts do not reveal that the Union knew of Respondent's financial problems prior to May 22, 1965, or until, after the effectuation of Respondent's May 1965 decision (to cease grinding, to lay off employees, and to divert the sugarcane for grinding elsewhere). It would appear logical'that the party desiring a change in the employment rela- tionship in the instant case was the Respondent. It would also appear logical that the party desiring a change in the employment relationship is the party who has the burden of instituting negotiations concerning the same and not the party from whom adverse change in position is desired. I find no. reason, under the facts of this case, to place the burden of initiating negotiations with respect to Respondent's May 1965 decision on the Union. The Respondent also contends in effect that the Union should have utilized forums other than the National Labor Relations Board to obtain a remedy for its problem. The Respondent refers to the collective-bargaining agreement between the parties, to an arbitration clause, to the Commonwealth Labor Relations Act (Puerto Rico), and to Section 301 of the National Labor Relations Act. The rationale of Smith v. Evening News Association, 371 U.S. 195, 199; Spielberg Manufacturing Company, 112 NLRB 1080; and George E. Light Boat Storage, Inc., 153 NLRB 1209, all impel a rejection of this contention. It appears clear that the existence of other forums for possible remedies does not oust the jurisdiction of the National Labor Relations Board to remedy unfair labor practices. I find nothing in the facts pertaining to this case to support a declination by the National Labor Relations Board of its jurisdictional power herein. Considering all of the facts in this case, I am convinced that-the rationale of the majority opinion of the Supreme Court of the United States in Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, controls the decision in•this case.27 In accordance with the Fibreboard decision it is clear that Respondent's May 1965 decision (to cease grinding operation, to lay off employees, and to divert sugarcane (by arrangement) to other mills for grinding) was a mandatory subject of bar- gaining. Respondent's referred-to May 1965 decision and the execution thereof without prior notification to the Union constituted a refusal to afford the Union an opportunity to bargain and a refusal to bargain over such decision within the meaning of Section 8 (a) (5) and (1) of the Act 28 The General Counsel alleged and contended that Respondent refused to bargain over grievances pertaining to Respondent's May 1965 decision to cease grinding operations, to lay off employees, and to divert sugarcane to other mills. It is clear that the facts reveal (1) that Respondent during the grievance meetings (June 21 and 28, 1965) consistently took the position that it had: (a) the right to unilater- ally make the referred-to May 1965 decision, and (b) that it was not obligated to bargain about the decision; (2) that Respondent discussed the reasons for its May 1965 decision; (3) that Respondent made no proposals to remedy the effects of the May 1965 decision; and (4) that Respondent failed to cooperate with the selection of arbitrators. The Board in Town & Country Manufacturing Company, Inc., 136 NLRB 1022 at page 1030, referred to the problem involved concerning remedial action for the employer's unilaterally subcontracting its trucking operations without bargain- ing with the Union over the decision to do so. The Board stated "it would be an exercise in futility to attempt to remedy this type of violation if an employer's decision to subcontract were to stand. No genuine bargaining over a decision to terminate a, phase of operations can be conducted where that decision has already been made and implemented." The Board went on to say in effect that meaningful bargaining could only be effected by restoration of the status quo of the employees adversely affected by the unilateral action. Applying the rationale of the Board in the Town & Country Manufacturing Co., Inc., case to the facts of the instant case, it would appear that genuine or meaning- ful bargaining over the grievances pertaining to the Respondent's May 1965 uni- 21I note that much of the Respondent's argument relies on the minority opinion of the Court. In accordance with and within the meaning of the decision and approved remedial action in Fibreboard Paper Products Corp. v. N.L.R B., supra. I find no merit to Respond- ent's contention that its May 1965 decision changed the status of the employees involved to agricultural laborers or persons outside the protection of the Act. SUCESION MARIO MERCADO E HIJOS 713 lateral decision (and implementation thereof) to cease grinding operations, to lay off employees, and to divert sugarcane to other mills, would only be possible were the Respondent to clearly accept the principle that the employees adversely affected by the implementation of May 1965 decision be made whole for loss of wages resulting from said decision. The Respondent's conduct in the grievance meeting (June 21 and 28, 1965) reveals that Respondent did not consider that there was any obligation to make the adversely affected employees whole for loss of wages resulting from the May 1965 unilateral decision . The facts also reveal that Respondent has not pro- posed agreements or entered into agreements which in effect would make the adversely affected employees whole for loss of wages. Thus facts reveal that Respondent by its conduct in the grievance negotiations (June 21 and 28, 1965) has not remedied the unfair labor practices resulting from its May 1965 unilateral decision (to cease operations , to lay off employees, and to divert sugarcane to other mills). The Respondent's conduct as regards to the June 21 and 28, 1965, grievance meeting and thereafter constitutes in effect a continuation of its refusal to bargain over its unilateral May 1965 decision indicated previously . I thus con- clude and find that the evidence reveals a continuation in the grievance meetings (June 21 and 28, 1965 ) and thereafter of Respondent's conduct of May 1965, as regards its unilateral decision , in violation of Section 8(a)(5) and ( 1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the operations of the Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and the Commonwealth of Puerto Rico and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the Respondent has engaged in unfair labor practices , it will be recommended that Respondent cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. It has been found that the Respondent has refused to bargain collectively with the Union as the exclusive representative of the employees in the appropriate unit. It will, therefore, be recommended that the Respondent, upon request, bargain collectively with the Union as such representative , and in the event that an under- standing is reached , embody such understanding in a signed agreement 29 Since the Respondent's unilaterally made May 1965 decision 30 and implementa- tion thereof 31 resulted in the termination of its employees in the appropriate unit, it will be recommended that the Respondent be ordered to make whole 32 such employees for any monetary loss resulting from Respondent 's unilateral action.33 The backpay provided herein shall be computed in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289, with interest thereon. Isis Plumbing & Heating Co ., 138 NLRB 716. CONCLUSIONS OF LAW 1. Sindicato Obreros Unidos Del Sun De Puerto Rico is a labor organization within the meaning of Section 2(5) of the Act. 2. Sucesion Mario Mercado E Hijos d/b/a Central Rufina is a employer engaged in commerce within the meaning of Section 2 ( 6) and (7) of the Act. 3. All production and maintenance employees employed by Sucesion Mario Mercado E Hijos d/b/a Central Rufina at its Central Rufina, Guayanilla , Puerto Rico, mill, but exclusive of all office clerical employees , analysts, administrative 21 It is noted that the collective -bargaining agreement in existence at the time of the May 1965 unilateral decision expired on December 31, 1965 8O To cease grinding operations , to lay off employees , and to make arrangements to divert sugarcane to other mills for grinding. 11 The decision was made and implemented without prior consultation or bargaining with the Union. 12 Since the cessation of grinding was designed to affect only the 1965 grinding season there appears no necessity for a reinstatement order. 83 Town & Country Manufacturing Co . Inc ., 136 NLRB 1022. '714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and executive personnel , guards, and supervisors, as defined in the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of the Act. 4. Sindicato Obreros Unidos Del Sur De Puerto Rico has been since Febru- ary 13, 1963, and at all times since has been the exclusive representatives of all -employees in the aforesaid appropriate unit for the purpose of collective bargain- ing within the meaning of the Act. 5. By Respondent's decision in May 1965 unilaterally deciding to cease its seasonal sugarcane grinding operation , to lay off its grinding employees, and to make arrangements to divert sugarcane from its mill to other mills for grinding, by implementation of its aforesaid decision by ceasing its sugarcane grinding operations, by laying off its grinding employees, and diverting sugarcane from its mill to other mills for grinding, without having consulted with the Union or having -engaged in collective bargaining about these matters, and by failure to negotiate in good faith as to grievances about these matters , the Respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1 ) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.] Humble Oil & Refining Company and Local 866, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 22-CA-2598. November 1, 1966 DECISION AND ORDER On July 15, 1966, Trial Examiner David London issued his Deci- sion in the above-entitled proceeding, finding that Respondent had not engaged in and was not engaging in certain unfair labor prac- tices as alleged in the complaint, and recommending that the com- plaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel. filed excep- tions to the Trial Examiner's Decision and a supporting brief, and Respondent filed 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, Jenkins, and Zagoria]. 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 briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner. [The Board adopted the Trial Examiner's Recommended Order and dismissed the complaint.] 161 NLRB No. 64.