Shurtenda Steaks, Inc.

SHURTENDA STEAKS, INC. 957 Shurtenda Steaks, Inc. and Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO Shurtenda Steaks, Inc. and Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO- Cases 27-CA-1837-2 and 1935. November 15, 1966 DECISION AND ORDER On August 5, 1966, Trial Examiner Irving Rogosin issued his Decision in the above-entitled proceeding, finding that 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. The Trial Examiner also found that Respondent had not engaged in certain other unfair labor practices alleged in the com- plaint and recommended dismissal as to them. Thereafter, the Respondent filed exceptions and a supporting brief. 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 these cases to a three-member panel [Members Fanning, Brown, 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 brief, and the entire record in these cases, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner. [The Board adopted the Trial Examiner's Recommended Order.] [The Board dismissed the complaint insofar as it alleges unfair labor practices not found herein.] DECISION OF TRIAL EXAMINER STATEMENT OF THE CASE These consolidated cases are before the Board on the complaint of the Gen- eral Counsel, issued December 15, 1965, alleging that Shurtenda Steaks, Inc., herein called Respondent, the Company, or the Employer, has engaged in unfair labor practices within the meaning of Sections 8(a)(1) and (5) and 2(6) and (7) of the National Labor Relations Act, as amended, (29 U.S.C. Sec. 151, et seq., 61 Stat. 136), herein called the Act.' Specifically, the complaint alleges that, since about October 29, 1965, Respondent has engaged in specified acts of interference, restraint, and coercion, and since about January 15, 1965, has refused to bargain with the Union as the exclusive 1 The original charge in Case 27-CA-1837-2 was filed and served on June 7, 1965 ; the charge in Case 27-CA-1935, on November 8, 1965. 161 NLRB No. 88. 958 DECISIONS OF NATIONAL LABOR RELATIONS BOARD bargaining representative of employees in an appropriate unit, despite the Union's majority status since December 29, 1964, by negotiating in bad faith, and by engag- ing in specified acts of unilateral conduct affecting terms and conditions of employ- ment of said employees, without prior consultation or negotiation with the Union. The complaint alleges, however, that on September 22, 1965, Respondent and the Union entered into a settlement agreement, in Cases 27-CA-1837 2 and 27-CA- 1837-2, approved by the Acting Regional Director, requiring Respondent, among other things, to bargain with the Union, and to refrain from making any unilateral changes in the terms and conditions of employment of the unit employees. The com- plaint further alleges that on December 15, 1065, the Regional Director vacated and set aside that portion of the settlement agreement relating to the allegations of refusal to bargain.3 Respondent's answer admits the jurisdictional and certain other allegations of the complaint, including the Union's certification, on January 7, 1965 (alleging, however, that the Union subsequently lost its majority through no fault of Respond- ent); the granting of a general wage increase, on November 24, 1965, but only after written notice to the Union; the execution of the settlement agreement, upon which Respondent relies; and, as an affirmative defense, relies on the "governing statute of limitations" as to all alleged unfair labor practices occurring prior to May 8, 1965.4 Hearing as held before Trial Examiner Irving Rogosin on January 18 and 19, 1966, at Denver, Colorado. All parties were represented by counsel, were afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce oral and documentary evidence relevant and material to the issues, to argue orally, and file briefs and proposed findings of fact and conclusions of law. All counsel waived oral argument but reserved the right to file briefs.5 The General Counsel filed a brief on February 24, 1966; Respondent filed a brief, and proposed findings and conclusions on February 23, 1966.6 Upon the entire record in the case, including my observation of the witnesses, their attitude and demeanor on the witness stand, and the briefs of the parties, the following findings are made: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Shurtenda Steaks, Inc., a Colorado corporation, with its principal place of busi- ness in Denver, Colorado, is, and at all times material herein has been, engaged at said location in the preparation, sale, and distribution of prepackaged steaks. In the conduct of its business, Respondent prepares, sells, and distributes annually at its Denver, Colorado, place of business, products valued in excess of $50,000 which are shipped directly to States outside the State of Colorado. Upon the basis of the foregoing, and the admissions in Respondent's answer, it is found that Respondent is now, and at times material has been, an employer engaged in commerce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Amalgamated Meat Cutters and Butcher Workmen of North America, Local Union No. 634, AFL-CIO, herein called the Union, is, and at all times material has been, a labor organization within the meaning of Section 2(5) of the Act. 2 Not presently involved in this proceeding. 3 The settlement agreement also disposed of certain allegations of 8(a) (3) violations. Apart from the remaining allegations, which are generally denied, Respondent's answer contains discursive evidentiary matter and argument, concerning events which occurred during several months prior to November 6, 1965, which are not the subject of proper pleading. 5 Counsel for the Charging Party, who was excused from further attendance before the close of the hearing, had been advised at the outset of his right to file briefs and proposed findings of fact and conclusions of law. None have been received on behalf of that party. 6In accordance with the findings and conclusions hereinafter made, proposed findings and conclusions 1(a), (b), (c), (d), 2, 3, 4, 10, 13A, 13C (ending with the semicolon) are granted ; all others are denied. SHURTENDA STEAKS, INC. 959 III. THE UNFAIR LABOR PRACTICES A. The refusal to bargain 1. The appropriate unit and majority representation therein In an election conducted by the Regional Director of Region 27, on Decem- ber 29, 1964, a majority of Respondent's employees in the appropriate unit described below, designated the Union as their exclusive representative for the purposes of collective bargaining, and on January 7, 1965, the Regional Director certified the Union as the exclusive bargaining representative of the employees in said unit, described as follows: All production and maintenance employees, including truckdrivers employed by the Employer at its Denver, Colorado plant; excluding office clerical employees, salesmen, driver salesmen, guards, professional employees, and supervisors as defined in the Act. The complaint alleges, Respondent's answer admits, and it is hereby found, that the above-described unit is now, and at all times material has been, an appropriate unit within the meaning of Section 9(b), and the Union is now, and at all times material has been, the exclusive representative for the purposes of collective bar- gaining of the employees in said unit, within the meaning of Section 9(a) of the Act.7 2. The Settlement Agreement On Septemer 22, 1965, Respondent and the Union executed a settlement agree- ment, in Cases 27-CA-1837 and 27-CA-1837-2, approved on the same date by the Acting Regional Director. This agreement provided that Respondent would make whole, in specified amounts, eight employees, all of whom indicated that they did not desire, and would decline reinstatement if offered them. Respondent fur- ther agreed to comply with all the terms and provisions of the customary notice to employees, attached to and incorporated by reference in the agreement, includ- ing a promise to bargain collectively with the Union as exclusive representative of the employees in the appropriate unit; to refrain from unilaterally subcontracting unit work, automating its production process, or making any other changes affect- ing wages, hours, and other terms and conditions of employment, without first notifying, and offering to consult and bargain with said Union; and to refrain in any manner from interfering with, restraining, or coercing its employees in the exercise of rights guaranteed under the Act. The agreement also provided that execution of the agreement by the Employer should not be deemed an admission that it had engaged in any unfair labor prac- tice. Approval of the agreement by the Acting Regional Director was to constitute withdrawal of the complaint and notice of hearing previously issued. On Decemer 15, 1965, following events later related, the Regional Director, by letter addressed to all the parties, vacated and set aside the settlement agreement in Case 27-CA-1837-2, "to the extent that it settled the refusal-to-bargain allega- tion" involved in that case. There is no issue as to Respondent's compliance with the settlement agreement insofar as the backpay aspect of the case is concerned.8 7 As will later appear, Respondent contends that, since on or about November 0, 1965, the Union has ceased to represent these employees through no fault of Respondent. This contention Is considered later. 8 (Throughout the course of the hearing, Respondent objected to the introduction of evidence regarding conduct antedating the settlement agreement, as well as of alleged un- fair practices occurring more than 6 months prior to the filing and service of the charge, as proscribed by Section 10 (b) of the Act. The evidence was received subject to a continuing objection, and, although Respondent made no formal motion prior to the close of the hearing to strike this evidence, the motion Is regarded as having been seasonably made, and is hereby denied.) The Board now holds that conduct prior to a settlement agreement may be considered as background evidence In evaluating postsettlement conduct alleged to constitute an unfair labor practice. Northern California District Council of Hod Carriers and Common Laborers of America, AFL-CIO (Joseph Mohamed, Sr., d/b/a Joseph Land- scaping Service), 154 NLRB 1384. Similarly, in an unfair labor practice proceeding, events occurring more than 6 months prior to the filing of the charge may be used to shed light on the true character of the matters occurring within the limitation period, and the use of such evidence does not violate Section 10(b) of the Act. N.L.R.B. v. Ritchie Manufac- turing Company, 354 F.2d 90 (C.A. 8), citing, Local Lodge No. 1424, International Asso- ciation of Machinists, AFL-CIO v. N.L.R.B., 362 U.S. 411, 416, 417 (1900). 960 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. The issues (1) Whether Respondent violated Section 8(a)(5) of the Act by refusing to bargain with the Union in good faith since September. 22, 1965, the date of the settlement agreement. (2) Whether such conduct violated the settlement agreement, warranting the vacating and setting aside of the refusal-to-bargain aspects of the settlement agreement. (3) Whether Respondent violated Section 8(a)(5) and (1) of the Act by refus- ing to bargain with the Union in good faith during the period covered by the settle- ment agreement. (4) Whether the Union waived the right to represent the employees in the appropriate unit at anytime after its certification. (5) Whether Respondent violated Section 8(a)(1) of the Act by certain acts of interference, restraint, and coercion, namely (1) stating to employees that they could not regret renouncing the Union; (2) causing a poll to be taken of employees in the unit to determine. whether they desire to be represented by the Union; (3) initiating a wage increase for said employees; (4) questioning the Union's status as exclusive bargaining representative; (5) transporting employees to a union meeting in company vehicles; and (6) attempts by its supervisors to gain admit- tance to the meeting. 4. The facts The evidence concerning the facts is not in substantial conflict. a. Introduction Respondent is engaged at its plant in Denver, Colorado, in the business of proc- essing, selling, and distributing fully cooked steaks or steak patties to super- markets and frozen food distributors. Respondent has generally employed between 18 and 19 production and maintenance employees (21 including part-time employ- ees), the majority of whom designated the Union as exclusive bargaining repre- sentative in the election held on December 29, 1964, which resulted in the certifica- tion of the Union on January 7, 1965. b. Events antedating the settlement agreement Gaio L. Boone is president of Respondent, in charge of the Company's finances and administration; David L. Barnes is executive vice president, in charge of sales. Both officers jointly control the Company's labor relations policies, although, according to Boone, he defers generally to Barnes in this area . Miles "Buzz" Wof- ford is plant superintendent, responsible for production at the plant, and is assisted by two foremen, Jim Barr, the day foreman, and Joe Clancy,- the night foreman. The Company operates two shifts. On November .17, 1964" apparently before the, advent of the Union,9 Respondent had entered into a contract with Superior Steaks, Inc., herein called Superior, of Dallas, Texas; for the processing of Respondent's products under its own formula. Within about a month Respondent became dissatisfied with this processor which, according to Boone, had failed to comply with the provisions of the contract. Respondent commenced negotiations to terminate this contract, and, on January 13, 1965,10 the termination became effective. Concurrently, with these ` negotiations, Respondent engaged in negotiations with the Walking" Corporation, herein called Walking, of Deriver, Colorado, for the processing of steaks under Respondent's specifications and a ready-mix formula, and, on January 25, executed a contract with Walking covering this production. In connection with this venture, Respondent dispatched some of its production employees to Walking to aid in establishing the operation. Respondent first began receiving production from Walking in March, although samples had been furnished by the processor earlier. The evidence is uncontroverted that Respondent did not notify or consult with the Union in advance,, or afford it an opportunity to bargain about its decision to subcontract a portion of its production. O The record does not establish when the Union first embarked on its organizational campaign at the plant. 19 Unless otherwise stated, all dates hereinafter are in 1965. SHURTENDA STEAKS, INC. 961 On January 15, G. W. Dean, secretary-treasurer of the Union , had written Barnes, with a copy to Harold B. Wagner, Respondent's attorney, notifying him of the Union's certification, and requesting a meeting at the Union 's office on Janu- ary 20. Wagner appeared at the Union's office on the appointed day. Dean and George W. Green , business representative of the local, as well as Business Repre- sentative Al DeWitt, who was only there briefly, were present. Neither of Respond- ent's officers nor any management representative , other than Wagner, attended the meeting. According to Dean's unrefuted testimony," discussion with Wagner centered chiefly on unfair labor practice charges which the Union had filed alleging discriminatory layoffs. Wagner stated that the filing of these charges had placed him in an untenable position so far as discussing contract negotiations with his principals was concerned , especially as neither Boone nor Barnes had ever had any dealings with a union before, and as Boone had "very violent objections to a Union," and was not even willing to discuss a union contract. Wagner, however, Dean testified stated that he has advised Boone that the law required Respondent to bargain with the Union, and told Dean that if the Union would withdraw the charges it would facilitate -his handling of Boone and Barnes. The Union agreed, and withdrew the charge the next day. At this meeting , Wagner asked the union representatives if they were prepared to submit a formal proposal. Dean told him that he was not, but furnished him with a copy of a collective -bargaining agreement entered into with Tad Steaks, Inc., another employer in the area, as a specimen of the type of contract the Union was proposing.12 Although there was general consideration of various features of the specimen contract, economic issues were not discussed. Instead, Wagner digressed to point out that the nature of Respondent's business was that of distributor rather than processor, and that Respondent did not intend to stay in business . Dean proposed that in that case the Union would like to "write a contract" at least for the period Respondent remained in business. There was, according to Dean, no discussion at this meeting of layoffs, equipment changes or subcontracting of production , mention being made only of the fact that Respondent intended to go out of business. Never- theless, Wagner indicated that he would submit the specimen contract to his client. On January 28, Wagner wrote the Union , enclosing a proposal, based on the contract form furnished by the Union, Which Wagner had submitted to manage- ment. The letter stated that, although the Company had no objection to some of the provisions in the form, without designating which , and believed others, without specifying, shoud be modified , asserted that others were not in the "joint interest" of the Company and the employees, and should be omitted . The letter continued, that the Company was willing to execute the form of the contract enclosed, and suggested that if the Union doubted that the proposal would be acceptable to the employees in the bargaining unit it should, nevertheless, submit the proposal to the employees for their decision. Referring to the complaint and notice of hearing , previously issued by the Regional Director in Case 27-CA-1700, dismissed the week before, Wagner stated ,in his letter that he had assured his client that the Union was acting in good faith, and' that he was confident that the Union wished to negotiate a contract "in an atmosphere of cooperation free of pressure and animosity ." The letter continued, that it now appeared that Wagner had been "over-optimistic," and pointed to the filing of new charges (by the Union, in Case 27-CA-1761, and by Rose Ortiz, in 11 Wagner did not testify, nor did he request an opportunity to do so in its answer, Respondent admits that Wagner "has been authorized from time to time to speak for Shurtenda only on subjects and within the limits specified by Mr. Boone or Mr Barnes " It is not contended that Wagner was not authorized to represent or act for Respondent, or that he exceeded his authority in any of the bargaining conferences On the contrary, the evidence warrants the finding , and it is hereby found , that at all times mentioned, Wagner was acting as agent of Respondent , that Respondent adopted and ratified his action on its behalf, and that Respondent is bound by his conduct is The copy of the specimen contract introduced in evidence , in which the name, Shurtenda , had been substituted for the name of the employer , bears the handwritten nota- tion at the top, "Proposal of [Union 's] to Shurtenda Steaks, Inc , Jan 20-65/G W. Dean." It is evident from the testimony of both Dean and Green that wage rates and other terms and conditions of employment were to be the subject of future negotiations. 264-188-67-vol. 161-62 962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Case 27-CA-1758),13 which justified the conclusion that the Union had no desire to negotiate a contract "on the basis of the common interests and desires of the company and the employees but in an atmosphere of pressure and antagonism." Observing that this conduct on the part of the Union might not render agreement impossible, Wagner declared that it could "go a long way toward making it more difficult." The letter continued that, as had been previously explained to the Union, Boone and Barnes were "primarily salesmen," and had been working for some months on plans to "decrease the company's meat processing activities with a view to terminating them altogether as soon as they can make the proper arrange- ments with processors located close to the markets." The letter concluded with a request for an early response "to the company's proposal." 14 Several days later, Green telephoned Wagner and told him that the contract proposal was not acceptable. Green pointed out that it gave the employees nothing that they were not already receiving, and that the employees would have no incentive for paying union dues-merely for the privilege of having existing con- ditions of employment reduced to writing. Green stated that the Union was rejecting the proposal without submitting it to the employees. Wagner argued that the Union should submit the Company's proposal to the employees so that they might reject or accept it. Green told him that the Union regarded this unnecessary. The next meeting was held on February 24, at the offices of the Federal Medi- ation and Conciliation Service, in Denver. Wagner was the only representative appearing for Respondent. Dean appeared for the Union, and a FMCS commis- sioner was also in attendance. Green, who was on vacation, was not.present.15 Discussion centered upon union security and maintenance of membership and arbitration. The meeting proved unproductive, and Dean, accusing Wagner of dilatory tactics, questioned whether he had ever consummated a union contract. Receiving no reaction, Dean repeated his remark. Wagner retorted that it was none of his "damn business," and the conference terminated abruptly. The union representatives attempted to schedule another meeting with manage- ment but were informed that both Boone and Barnes were out of town. On March 3, however, Wagner again wrote the Union, enclosing a copy of the Colo- rado statute relating to arbitration, which, he said, he had promised to do at the last meeting, and recommended the pertinent language of the statute in preference to the arbitration language contained in the Union's contract form. Advising that Boone and Barnes had returned, and. that he had obtained their views on some of the issues, Wagner requested a conference with the union representatives at his office the following week, at which Boone and Barnes would be present. In his letter, Wagner proposed the addition of two provisions to the proposal he had sumitted earlier: the first, reserved the right to decrease production, move all or part of its facilities, and to purchase all' or part of its products from other proc- essors; the second, reserved the right to grant merit increases based on "willing- ness, dilligence, efficiency and reliability." On March 16, a meeting arranged by the FMCS commissioner, was held at Wagner's office, with Dean and Green representing the Union, and Barnes and Wagner, attending on behalf of the Company. In the discussion of Respondent's January 28, proposal, Dean reiterated that it was unacceptable and did not warrant submission to the employees because the union representatives were confident it would be rejected. The management representatives disagreed, and stated that if 23 These charges alleged discriminatory layoffs, on January 22 , of employees , who were reinstated shortly afterward . The charge in Case 27-CA-1761,, filed on January 26, was withdrawn on March 1; that in Case 27-CA-1758, filed on January 25, was withdrawn on January 27. 14 It should be noted that Respondent had already executed a contract 3 days earlier with Walkling, subcontracting a portion of its production, without disclosing this to the Union. u According to Dean , the FMCS was notified immediately after the Union was cer- tified, and , after the first meeting with Wagner, Dean requested that agency to attempt to schedule a meeting as soon as possible . Consequently , this meeting, as well as the later one, on March 16, presently described , was scheduled by the commissioner. As secretary- treasurer of the Union , Dean had previously filed, on January 14, a notice of intent to strike with the Industrial Commission of Colorado , under the State statute, on or after February 15, 1965, because of "uncompleted negotiations ." A similar notice had been sent to FMCS. SHURTENDA STEAKS, INC. 963 the proposal were submitted the employees would accept it . The union representa- tives countered that they would recommend that the employees reject the proposal. There was no serious discussion of any substantive issues. Although Barnes expressed the hope that something might be accomplished and a contract signed, he repeatedly stated that, as he and Boone had equal authority, he could enter into no binding commitment without Boone 's approval, and that his function at the meeting was merely to engage in discussion of the proposals. At some point during this conference , Wagner raised the question of whether the Union actually represented a majority of the employees at the plant, and remarked, according to Green, "I don't believe you represent the people now." Wagner then proposed a joint meeting between management , including Wagner, and the Union, to be attended by all the employees. Dean stated that as far as he was concerned, if that was what the Company wanted, the Union would have no objec- tion , and that management would see for itself that the employees would reject the Company's proposal. Green, however, testified that the union representatives eventually said, "all right, if you think we don't represent the people , we will agree to this . We will have such a meeting." According to Barnes , when it was suggested that the Union no longer enjoyed the support of the employees, Dean announced that if that proved to be true , he would withdraw "because he [had] many more important things to do." The Union made several attempts to schedule such a joint meeting, and one such meeting was canceled due to the death of Wagner's brother and law partner. Meantime, late in May, a union meeting was held at which it was resolved to accept the union representatives ' recommendation to reject the Company's pro- posal. It was also concluded that the employees desired the Union to continue negotiations on their behalf. Several days later, on May 28, Respondent eliminated the night shift, and laid off 6 or 7 employees. On June 1, William Borges, referred to as night foreman, filed an unfair labor practice charge (Case 27-CA-1837), alleging the layoff as a violation of Section 8(a)(1) and ( 3) of the Act. This was followed , on June 7, by a further charge (Case 27-CA-1837-2), which included allegations of refusal to bargain, in violation of Section 8(a)(5). The cases were consolidated , and a com- plaint was issued on July 14, 1965 , which was disposed of by the settlement agree- ment of September 22, 1965, already mentioned. c. Postsettlement events Under the settlement agreement , Respondent agreed to bargain in good faith with the Union as exclusive bargaining representative of the unit employees, embodying any understanding reached in a signed agreement, and to refrain from making unilateral changes in wages, hours, or working conditions of those employ- ees. The same day the settlement agreement was signed, Attorney Wagner notified the Union in writing of proposed changes in personnel and duties of named employees , inviting the Union to communicate with Barnes, or, in the event of his absence, with Wagner, regarding any questions the Union might have. The Union registered no objection and made no reply to this letter. On October 1, Union Representative Green called Wagner and requested a meeting for the purpose of negotiations , as provided in the settlement agreement. Reminding Green that the Union had consented to a joint meeting with the employees, Wagner declined to hold any further bargaining conferences until the Union proved that it still represented a majority of the employees . Wagner sug- gested that a meeting for this purpose be held at the plant on Saturday , Novem- ber 6 . Green protested that Respondent was obligated to bargain under the settlement agreement and insisted on a meeting for that purpose. Wagner remained adamant. Late that month, Wagner phoned the Union, this time speaking to Dean, and repeated his request for a meeting at the plant which all the employees would attend . Although protesting at first , when Wagner insisted that the Union had promised to participate in such a meeting , Dean finally relented, remarking that it did not matter to him in the least, and said that he would have Green arrange the meeting. A week before the scheduled meeting of November 6, Green went to the plant and notified the employees of the meeting . According to Rose Ortiz (one of the three employees who had previously been laid off and later reinstated ), Green told her that the purpose of the meeting was to negotiate a contract . He also asked the employees whether they wanted a union meeting first, but they decided it was 964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD -unnecessary. The day before ,the scheduled meeting, Plant Manager Wofford noti- fied the employees that the Company wanted them all to attend. About the time of Green's visit to the plant, employee Virginia Mares, under- took a poll of the employees to determine their views regarding union representa- ,tion. On October 29, accompanied by women on the day shift, Mares met with Barnes, Boone, and Wofford, and reported to them that she had canvassed the women and determined that they no longer wished to be represented by the Union. Barnes expressed his gratification , and assured the group that they would have no cause to regret their decision.is On Saturday morning, November 6, at 10 o'clock, the meeting was held at the -plant. There is sharp disagreement between Wagner and the Union concerning the purpose of the meeting. According. to Wagner, the object was to determine whether -a majority of the employees still wished to be represented by the Union; accord- ing to Union Representatives Dean and Green, the purpose was to negotiate a contract. For reasons which will later appear, it is unnecessary to resolve this conflict.17 Present, on behalf of management, were Wagner, Executive Vice President Barnes, and Plant Manager Wofford. Also present were Foremen James Barr and Joseph Clancy. Representatives Dean and Green appeared for the Union. Floor -Ladies Clara Arellano and Eva Pacheco, and 11 employees, including Mares (con- stituting Respondent's entire production complement, except for 2 employees, who had not been notified of the meeting, and 1, who was out of town), completed the roster of those in attendance. Barnes opened the meeting by introducing Wagner. Green then stated that the purpose of the meeting was to negotiate a contract, and handed Wagner a copy of the Union's proposed contract.18 Wagner immediately retorted that that was .not the purpose of the meeting. "We are here," he is quoted as saying, "to deter- 36 Mares denied that she undertook the poll at Wofford's suggestion She admitted that he "might have called' her into the office" during October, "but not to talk to [heil about any Union representation." She did testify, however, that several days before the meeting of November 6, "After the girls-the majority had decided to go for Union [sic] (ob- viously meaning "had decided to renounce the Union), "yes, I did talk to him, and sev- eral of the girls, I imagine , have, too." According to her, the day of Gieen s visit to the plant, the women were "just talking in a group," and many of the women told her that they did not intend to go to the union meeting, their attitude being expressed in the remark, "They [the Union] haven't'done anything for me. Why should I go?" As a result ,of this general discussion, Mares testified, she emerged as spokesman for the group, whether she volunteered or was asked to act in this capacity is in some doubt According to her-testiniony, when the employees asked Green what the purpose of the union meeting would be, lie said that it was to discuss the meeting scheduled to be held at the plant Sylvester Easley, an employee (who has since left Respondent's employ), asked, "Discus& things like what, Mr. Green?" Green said there was a rumor that a majority of the em- ' ployees no longer wanted to be represented by the Union. Mares interjected that, since everyone was making excuses for not attending a union meeting, and as some employees were out of town, there would be no purpose in such a meeting. After some discussion, someone suggested that she, speak for the group, and she consented to do so Although she denied that she had been disaffected toward the Union because it had failed to secure a -'contract or wage increase for the employees, she admitted that she had asked Barnes for a-raise on - a number of occasions, the"last time probably iii September 1965, when he told her that he could not give her a raise because of the Union. As will later appear, the em- ployees did , in fact, subsequently receive a'- wage increase soon after the November G meeting., Mares' attitude and demeanor on the witness stand was generally hesitant, equivocal, and unconvincing, in decided contrast to her militant role in assuming the leadership in the movement to renounce the Union. The circumstances culminating in her polling of the employees gives rise to the suspicion that her action may very well have been instigated by management. However, such a finding is not essential in arriving at the findings ultimately made. 'TN. copy of minutes of this meeting, dated November 8, 1965, prepared by management, was introduced ' in evidence by the General Counsel. Findings as to what occurred are based, in part, on these minutes, as well as the testimony of employees and other witnesses who attended . The minutes recite that the meeting was called by "the Management of SHURTENDA STEAKS, INC." Is From the Company's minutes of the meeting , "Green: We are here to negotiate a new contract . Here is what I would like you to go over . ( Handing to Wagner a contract)." It is not altogether clear whether, in using the pronoun, "We," Green was referring to himself and Dean , or to the employees and both parties collectively. SHURTENDA STEAKS, IN C. 965 ,mine if the majority still desire union representation." Green asked whether Wagner meant that he would not negotiate with the Union, and whether he was "refusing to bargain in good faith." Wagner rejoined, "Yes, we refuse to bargain at this meeting . As you know, we are not required to bargain in the presence of the members. We will be happy to bargain in good faith, after this meeting, tomorrow, or any other time." Asked whether he had not agreed to call the meet- ing to negotiate a new contract, as provided in the notice posted on the bulletin 'board (an apparent reference to the notice to employees, attached to the settle- ment agreement ), Wagner declared, "I did not come here to discuss legalities." Dean interjected to ask whether Wagner had not agreed to negotiate in good faith at a "recent N.L.R.B. meeting." Wagner repeated verbatim his answer to Green's query. Green then pointed out some features of the proposed contract, including a wage scale of $2.10 an hour, for meat grinders, and wage scales for other job classifica- tions. At this juncture, employee Mares interrupted and asked permission to speak, declaring that she represented "all the girls here and it is the desire of the members, to no longer be represented by the union." Replying to Dean's questioning, Mares denied that Management had discussed this with her in any way, and asserted that the employees had "called [their] own meeting, and decided for [themselves]." Dean reminded her that the Union still represented the employees and would con- tinue to do so. Green remarked that it was not surprising that the employees had decided against representation by the Union "since management does everything ;possible to discourage [the employees] by lay-offs, threats [of discharge]" and the like. Dean asked whether Mares was expressing the desires of all the employees present. There was no dissent. Green interposed that the payment by Respondent of $1,500 in backpay furnished evidence of its unlawful conduct. Wagner rejoined that the payment did not constitute an admission of guilt, as was stated in the settlement agreement. An altercation followed between Green and Wagner. Finally, Dean proposed that if the management representatives would leave the room, the union representatives would poll the employees by secret ballot, "to see where the union stands." Wagner expressed approval, provided the union repre- sentatives would also leave. Dean refused emphatically, declaring that the Union does not conduct its meetings on company premises. Wagner retorted that the Company could not permit the Union to conduct a poll unless management repre- sentatives were also present or unless the union representatives left the room too. When, during the exchange, Wagner complained that Dean was repeatedly inter- rupting him, not permitting him to finish a sentence, Dean exclaimed, "You may finish all the sentences you like, we are leaving," and announced that there would be a meeting at 11:15 that morning at union headquarters, "to see if we strike this place," and "to see where we stand with you people," adding, "the majority of those present will carry the vote." With that Dean and Green departed. After they had left, Wagner asked whether there were any questions. Martinez, one of the employees, asked, "What brought this union mess on in the first place?" Wagner stated that about a year before, the employees had, "by a slim majority," designated the Union to represent them. Mares interjected, "Things are quite .different now than then. We used to have unreasonable foremen to work with." Mares asked Wagner what the employees should do. He said that this was a "free country;" that they should do as they pleased; that management had "no intention of telling [them] to attend or not to attend," but added, "If I had something on my mind, I would jump at the opportunity to express it," a statement which he repeated. Martinez pointed out that if all the employees did not attend the meeting, a majority of those attending might determine the outcome of the strike vote. The employees thereupon unanimously decided to attend, and about 10:35 a.m., with the floor ladies and foremen, left the plant, returning by 11:40. Foremen Barr and Clancy transported all but one of the group, including Floor Ladies Arellano and Pacheco, to union headquarters in company vehicles, arriving about 10:45 a.m. When the two foremen were observed leading the group into the building, Dean refused the foremen admittance. Arellano and Pacheco, how- ever, were permitted to enter. When the employees had assembled, the union representatives asked them whether they wanted to stand on the Union's last contract proposal and strike if the Company turned it down, assuring the employees that the Union would sup- port them if they decided to strike. Dean told them that, in the event of a strike, striking employees could receive $20 a week in strike benefits from the Inter- national Union, and that this could be supplemented from the Union's treasury. He 966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD assured them that the Union had paid strike benefits of $40 a week, and, in some instances, full pay, so that no one would suffer any hardship-in the event of a strike. During the discussion which ensued, Sylvester Easley. (a former supervisor, incidentally), and Mares were most vocal. Mares reiterated that the employees did not want the Union to represent them. According to Green's undisputed and credited testimony, Mares told the employees that the Company contended that it could not grant any merit or other increases as long as the Union was "in the picture," and that unless the Union were "able to negotiate something for them," the Company could not give them any more than they already had. Eventually, the union representatives asked the employees to decide the issue. by secret ballot.18 Dean and Green were asked to withdraw from the meeting, and, after some general discussion, Easley distributed slips of paper among the employees, and instructed them to vote "yes" or "no" on whether they were in favor of. the Union. After the employees had marked their "ballots," they placed them on a table, and summoned Dean and Green to return. The employees announced that they had voted, indicating the slips of paper which they had marked. Dean began opening the ballots, and, discovering that all those he opened bore a "No" vote, remarked that there was no point in continuing, and the remainder of the ballots was left uncounted. According to Dean, Easley stated that a strike was out of the question, because the Union "certainly wouldn't have the support of the people." Easley remarked that the Company had been "good to them," and suggested that "they would make more money if they didn't have the Union." 20 Dean commented that he did not intend to "walk [away] from this," that he believed the Union had a legal right to "inform the buying public" that the Company did not have a contract with the Union, and that the Union would probably do so. Dean admitted that he threatened Respondent with a boycott of its products. It does not appear, however, that the Union resorted to this tactic. Green declared to the employees that the Company had coerced the employees to renounce the Union, and that the' Union did not intend to "let the company get away with it." The following Moday, November 8, the Union filed the charge in Case 27-CA-1935. On November 15, Barnes notified the Union in writing that, "[p]ending further negotiations," the Company proposed to grant a 25-cent-an-hour increase to all employees below the rank of foreman or superintendent. The letter noted that the increase would appear in the pay check of November 24, unless there was objection by the Union.21 The letter, directed to Dean's attention, was not answered until 19 It is not altogether clear from the testimony what the issue was. According to Green, the "impression" he had was that the issue was "[w]hether the employees wanted to strike or not," though, he added, "I suppose in one respect it was also as to whether they wanted us to represent them." Dean put it somewhat differently. Prefacing his remarks with the comment to the employees, "it looks like we're getting the shaft . . . It looks like the com- pany has gotten to you people," Dean testified that the question to be balloted on was whether to strike or not. In a pretrial affidavit to the Board agent, Dean is quoted as saying, "I told them that this vote would determine whether they wanted a Union down there, and, I said that this was a strike vote." This is not necessarily inconsistent with his oral testi- mony at the hearing. It is evident, however, from the testimony of employees at the hearing that they regarded the question to be voted on as whether they desired union representation altogether. For reasons appearing hereinafter, it is unnecessary to resolve this apparent conflict. sa Easley did not testify. It appears from the Company ' s minutes of the meeting at the plant, that Easley reported to Plant Manager Wofford what had occurred at the union meeting, substantially as related. The minutes concluded with a recital that five of the women, including Mares, invited Foremen Barr and Clancy, as well as Easley, Barnes, and Wofford, to join them, and went to a restaurant where they were served drinks and lunch. The record is silent as to whether Respondent or its supervisors paid for the lunch. At any rate, no unfair labor practice is based on this incident 2' As pointed out in the General Counsel's brief, since the employees are paid weekly on Wednesday, for hours worked through the preceding Sunday, it is evident that the raise became effective November 15, the day Respondent notified the Union, so it is debatable whether Respondent's letter actually constituted advance notice. Since, however, there would still have been time to withhold the increase, if the Union had objected, the require- ment of prior notice was probably, satisfied, though not the duty to bargain about the proposed increase. SHURTENDA STEAKS, INC. 967 November 24, because of his absence from the city and his inability to reach the Union's attorney for several days after his return. Replying to Barnes' letter, Dean, referring to the phrase, "pending further negotiations," observed that if the Company intended to "open negotiations," the Union stood ready and willing to negotiate, and asked for a meeting for that pur- pose: Pointing out that the proposed wage increase was not the result of collective bargaining, but of unilateral action on the Company's part, Dean asserted that the Union had no objection to the increase, provided it was clearly understood that wage rates and working conditions would ultimately be determined by collective bargaining. On December 6, Respondent wrote the Union, enclosing a counterproposal to the one previously submitted by the Union, setting forth the terms by which Respondent "believe[d]" it would be "willing to be bound." Commenting on spe- cific provisions in the Union's proposed contract, Barnes asserted that, under the law of the State of Colorado, an employer was prevented from entering into an agency shop contract, which the Union had proposed in lieu of a union shop and maintenance of membership, whether designated as an agency or union shop, without a prior affirmative vote of at least three-fourths of the employees in the bargaining unit. Barnes suggested that if the Union was confident that the employ- ees would favor such a provision, an election be held for that purpose, and stated that if the required number of employees voted for a union or agency shop or variant of such union security, the Company "[would], of course, be under the obligation- of discussing this point with, you further." Barnes dismissed the subject of checkoff with the comment that it was, ' in effect, an "integral part" of the agency shop provisions, which Respondent was rejecting, and expressed doubt that it was "consistent with the interests and desires of either the employees or manage- ment," concluding that, if the Union presented a checkoff authorization from any employee, Respondent would be "glad to consider it further." The wage scale pro- posed by Respondent was a minimum of $1.25 to a maximum of $2.25, in effect, at the sole discretion of the employer. Substantially all the remaining provisions in the Union's proposed contract were summarily rejected. As for the duration of the contract, Respondent proposed no specific term, while indicating that a 2-year term was "much too long," considering the Union's loss of "actual support of the employees many months -ago," the fact that "the overwhelming majority of the employees do not want us to enter into a contract of any kind," and the approach- ing "anniversary of [the Union's] certification" only a few weeks away. "Under these circumstances," the letter concluded, "we do not think that it is consistent with the interests of either employees or our company to bind them and us for an extended time. However, we,shall be glad to discuss this with you further." On January 10, 1966, the Union acknowledged Respondent's letter of Decem- ber 6 and the accompanying proposal. The Union reminded Respondent that it had been trying, without success, for many months to arrange a meeting for pur- poses of negotiation, and, protesting that negotiations could not be effectively car- ried on by "merely exchanging proposals at long intervals through the mail," announced that the Union remained willing to meet at any time to negotiate a con- tract, and requested that Respondent advise whether it was willing to "sit down and bargain across the table." As far as the record discloses, Respondent made no response, and the matter proceeded to hearing on January 18. Contentions ; analysis; conclusions In its brief, Respondent contends that the only real issue is whether its conduct at the general meeting of November 6, constituted a wrongful refusal to bargain. This contention proceeds on the premise that consideration of all other unfair labor practice allegations is foreclosed by the settlement agreement of September 22, excepting the allegations of refusal to bargain, about December 7, 1964, in Case 27-CA- 1837-2, reinstated by the vacating of that portion of the settlement agree- ment, on December 15, 1965. As a corollary, Respondent maintains that evidence of unfair labor practices occurring prior to the settlement agreement, and more than 6 months prior to the filing and service of the charge upon Respondent , is barred by Section 10(b) of the Act. 968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD For reasons stated at the outset,22 these positions are not well taken.23 Respondent further contends that, in any case, the remaining allegations of the complaint are either unsupported by the record or, if supported, do not constitute unfair labor practices within the meaning of the Act. Dealing first with the allegations of the complaint concerning Respondent's con- duct antedating the settlement agreement, the General Counsel's case is based upon (1) a continuing refusal to bargain on demand, since January 15, 1965, by (a) fail- ing and refusing to bargain in good faith, and bargaining with no intention of con- summating an agreement, (b) failing and refusing, since March 16, 1965, and con- tinuing until November 6, 1965,24 to meet at reasonable intervals, and, by this, and other dilatory and evasive conduct, engaging in surface bargaining, but with a fixed purpose to avoid reaching agreement; (2) unilaterally, and without prior notice to or negotiation with the Union, in derogation of its status as collective-bargaining representative, making substantial changes and modifications in the terms and con- ditions of employment of the unit employees, by (a) subcontracting part of its pro- duction, about January 25, 1965, (b) introducing machinery, about April 15, 1965, resulting in displacement of unit employees, (c) discontinuing and laying off the entire second shift, and (d) introducing new machinery and effecting further layoffs, in June 1965. B. The allegations of refusal to bargain in good faith between January 15 and September 22 The evidence abundantly establishes that, beginning January 20, the date of the first meeting, Respondent engaged in an obstructive and dilatory course of conduct, calculated to subvert the collective-bargaining process and to undermine the Union as exclusive bargaining agent of the employees. At the outset, Respondent was represented, not by a responsible management offi- cial, but by an attorney, who apparently had no authority, except to receive pro- posals, and who was primarily concerned with inducing the Union to withdraw a pending unfair labor practice charge. This attorney's approach to collective bargain- ing was to impress upon the Union, only newly certified as bargaining agent, that at least one of Respondent's two principals, was unalterably opposed to unions and unwilling to discuss a contract until advised by the attorney that he was legally obli- gated to do so. Although requesting something in writing which he could take back to his principals, and engaging in perfunctory and desultory discussion of specimen contract provisions, the attorney kept returning to the thesis that Respondent did not expect to remain in business, a position hardly conducive to arriving at a collective- bargaining agreement The draft of Respondent's proposed contract, submitted on January 28, did little more than reduce to writing existing terms and conditions of employment. Although wage rates had not been discussed, the proposal provided for minimum hourly rates of from $1.25 to $1.60,25 in effect, at the sole discretion of the Employer. 22 See footnote S. xi Although not specifically raised by Respondent, it is noted that, in vacating the settle- ment agreement only as to the refusal-to-bargain charge, the Regional Director left the agreement undisturbed insofar as the disposition of the 8(a)(3) allegations were con- cerned. There is no contention that Respondent failed to comply with this aspect of the agreement. This poses the question, therefore, whether evidence relating to these allega- tions may be considered as background evidence in evaluating Respondent's postsettlement conduct. It would seem inappropriate to require the Regional Director to vacate the entire settlement agreement, (presumably thereby requiring the discharged employees to return the backpay awarded them), in order to redress the alleged refusal-to-bargain charges. On the other hand, to allow that portion of the settlement agreement dealing with the alleged discriminatory discharges to stand, while, at the same time, permitting considera- tion, as background evidence, of the alleged Section 8(a) (3) conduct, would be disruptive of the general policy to accord finality to settlement agreements, except where there has been a breach of such agreement. Evidence relating to the alleged discriminatory dis- charges was received, therefore, merely as part of the chronology of the events, and has not been considered in evaluating Respondent's postsettlement conduct 24 For the purposes of the present discussion, consideration of the evidence is limited to the period ending September 22, 1965, the date of the settlement agreement. 55 The wage rates appearing in the Union's specimen contract, admittedly not to be regarded as an indication of the Union's demands, provided for minimum hourly rates of $2.25 to $3.125, depending on classification, and increased pay after 90 days of employment. SHURTENDA STEAKS, INC . 969 A management rights provision and a grievance procedure, providing only for reasonable efforts to adjust grievances, without machinery for settlement of griev- ances remaining unsolved, was also included. Union-security provisions, and others, in the Union's specimen contract, were disposed of in a covering letter, stating that the provisions were not in the "joint interest of the company and the employees." A measure of the attorney's confidence in his proposals may be gleaned from his suggestion that even if the Union doubted that the proposal would be acceptable to its members, it should, nevertheless, "follow the standard practice" of submitting it to them for approval or disapproval. Again, the attorney took the Union to task for filing new unfair labor practice charges, after having dismissed earlier charges a week before, and attempted to shift the onus to the Union for creating an unfavor- able climate in which to engage in collective bargaining, as though the filing of an unfair labor practice charge, whether meritorious or not, could excuse Respondent from collective bargaining. And, again, announcement of the recurrent theme, that Respondent was contemplating eventual abandonment of its meat processing activi- ties altogether, as soon as necessary arrangements could be made, when, in point of fact, Respondent had already entered into a contract only 3 days earlier, without notifying the Union, for the subcontracting of a portion of its meat processing. It is, therefore, not surprising that the Union rejected Wagner' s proposal out of hand, as offering the employees no more than what they already had, without being obliged to pay union dues. This is not to suggest that, unless an employer, during negotiations, offers his employees improved terms and conditions of employment, a finding is warranted that he is bargaining in bad faith. His failure, however, to make a genuine and realistic offer under the existing circumstances is one element to be considered in evaluating his good faith. At the next meeting, on February 24, at which discussion turned chiefly on the issue of union security, and the grievance and arbitration procedure, again, only the attorney was present, on behalf of Respondent. It was at this meeting that the Union accused Respondent of "stalling." Although the Union attempted to arrange a further meeting, it was informed that both principals were out of town. On March 3, when Respondent's attorney notified the Union that his principals had returned and given him their views on certain issues, and proposed a meeting at which they would be present, he introduced two additional provisions, reserving further management prerogatives, both with respect to unilateral changes in production and processing facilities, and the right to grant merit increases, for all practical purposes, in its discretion. Far from representing any effort to reach an accord, these additional provisions could scarcely have failed to exacerbate the rapidly deteriorating relations between the parties. When the parties met, on March 16, Barnes attended, for the first time. Boone, however, was not present, and Barnes took refuge in this fact to announce that, since he and Boone had an equal interest in the Company, no contract could be consum- mated without Boone's consent, and that he alone had no authority to make any binding commitment. Despite Barnes' protestations that he would like to settle the contract, he stated that he had been unable to prevail on Boone to agree to any- thing, that he was in no position to agree to any terms, and could do nothing more than take part in discussion of the proposals. Merely to state these facts is to estab- lish the absence of good-faith bargaining on Respondent's part. In this posture of the negotiations , Respondent's challenge to the Union's status as majority representative, some 2 months after its certification and Respondent's insistence that it prove its continuing right to represent the employees, as a prereq- uisite to further bargaining, particularly in the absence of any showing of a reason- able basis for assuming that the Union had actually lost its majority, constitutes overwhelming evidence of lack of good-faith bargaining. Respondent had met with the Union on only three occasions, between January 20 and September 22, the date of the settlement agreement, despite the Union's efforts, both on its own initiative and at the instance of the FMCS. At none of these meetings purportedly held to negotiate a contract, was Respondent represented by a person authorized to enter into a firm commitment with regard to any terms or conditions of a contract. Even without taking into account Respondent's unilateral action during this period presently discussed, it is clear that Respondent was not bargaining in good faith with a genuine desire to reach agreement. It is, therefore, found that, by the foregoing conduct, including its dilatory and obstructive conduct; its failure to meet with the Union at reasonable times; its fail- ure to submit genuine and bona fide counterproposals fully realizing that the pro- posals made were totally unacceptable; by its failure to designate a representative 970 DECISIONS OF NATIONAL LABOR RELATIONS BOARD at bargaining meetings authorized to enter into binding commitments with the Union; and by requiring and insisting on and after March 16, that the Union estab- lish its right to represent the employees, despite the Union's certification; on Janu- ary 7, as a condition to further bargaining, especially in the absence of any reasonable ground for asserting a claim of the Union's loss of majority, Respondent has, from January 20 to September 22, failed and refused to bargain with the Union in good faith, thereby violating Section 8 (a) (5) of the Act. C. Unilateral changes and modifications in terms and conditions of employment 1. Subcontracting a portion of production It will be recalled that, on January 25, 1965, less than 3 weeks after the Union's certification, Respondent executed the agreement with Walkling providing for the subcontracting of a portion of its meat processing operation.26 It is undisputed that Respondent did not notify or consul with the Union in advance of its decision to subcontract any of its production, or afford the Union an opportunity to bargain about the subject. Respondent contends, however, that this subcontracting or "co-processing" was merely a "carry over or a continuation of a policy" which had existed prior to the advent of the Union. Respondent asserts that it had been under a similar contract with Superior Steaks, Inc., of Dallas, Texas, executed November 17, 1964. Dissatis- fied with this copacker's performance, it engaged in negotiations , from about Decem- ber 30, 1964, to January 13, 1965, to cancel this contract, and finally accomplished this on the latter date. Concurrently with these negotiations, Respondent maintains, it negotiated with Walkling, and reached the subcontracting agreement of Janu- ary 25. Respondent therefore contends, in effect, that since it had initially subcon- tracted a portion of its production before the'Union "[came] into the picture," its contract with Walkling, even though entered into after the Union' s certification, merely constituted continuation of a preexisting policy, and that it was under no obligation to bargain with the Union on this subject. This position might have had some merit if it had been shown that there had existed a long-established policy of subcontracting at Respondent's plant. As far as appears from the record, however, the,November 14, 1964, contract with Superior is the only other instance of subcontracting, and this occurred only somewhat more than a month before the representation election, on December 29.27 While the record does not disclose when the Union's organizational activity began, practical experi- ence would indicate that the activity commenced weeks earlier, depending, in part, at least, on whether the election resulted from a formal hearing or a stipulation for consent election. This is not to suggest, since it is neither alleged nor contended, that the subcontracting arrangement with Superior was entered into for the purpose of combating the Union's organizational campaign. What we are, concerned with is whether the mere existence of a subcontracting agreement, under which, according to Respondent, the subcontractor's work performance had proved unsatisfactory, for a period of 6 weeks before the representation election is sufficient to warrant a finding of an established practice of subcontracting before the appearance of the Union. To state the issue is to answer it. A single subcontracting arrangement in existence for a mere 6 weeks can scarcely furnish the basis for an established pol- icy of subcontracting. We turn then to the question of whether Respondent was under a duty to notify and consult with the Union before executing the subcontract with Walkling some 21/2 weeks after the Union was certified, even assuming that negotiations for that contract may have begun before the election and certification. It may now be taken as datum that an employer may not unilaterally subcontract a portion of his operations, even when this is done for economic reasons , without first notifying and consulting with the exclusive bargaining representative of his employees, and affording it an opportunity to negotiate about the decision. By failing 23 Actual production under this contract did not commence until March . Boone testified that he was uncertain whether Respondent used any "outside co-packer" during January and February . As will presently be seen , Respondent had been under contract with an- other copacker until January 13. 21 The General Counsel's brief overlooks or ignores the evidence concerning Respondent's agreement with Superior, on November 17, 1964, but relies instead on the agreement with Walkling, dated January 25 , 1965, executed after the election and certification. SHURTENDA STEAKS) INC. 971 to do so, an employer breaches his duty to bargain about a mandatory subject of collective bargaining, in violation of Section 8(a) (5) of the Act.28 It is indisputable, here, that on the date it executed its subcontract with Walkling, Respondent had been on notice for at least 2 weeks that the Union had been certi- fied, and that the Union had made a bargaining demand several days later. Assum- ing that negotiations had been under way between Respondent and Walkling prior to the date of the representation election, the evidence shows that the contract was not actually executed until more than 2 weeks after the Union's certification, and there was no showing that Respondent was under any legal commitment to Walkling prior to the execution of the contract. Thus, Respondent elected to enter into the contract with actual knowledge of the Union's status as exclusive bargaining repre- sentative, and its bargaining demand soon afterward. By so doing, Respondent as- sumed the risk and the consequences which its action entailed. Nor, can it be contended that the Union remained silent and acquiesced in Respondent's action in subcontracting a part of its production. The evidence dis- closes that Respondent dispatched some of its employees to assist in establishing the meat processing operation at Walkling. Thus, the employees were aware of the subcontracting operation, and it is logical to assume that this information was com- municated to the Union. This conclusion is supported by the evidence that, on Janu- ary 26, 1965, the day after the contract with Walkling was signed, the Union filed an unfair labor practice charge, alleging the discriminatory layoff, on January 22, of two women on the day shift. Considering that, according to Respondent, the con- tract with Walkling had been under negotiation for nearly a month, it is reason- able to infer that the layoffs on January 22 were undoubtedly in contemplation of the impending subcontracting operation. It should also be noted that, on January 28, 3 days after the actual signing of the contract with Walkling, Respondent's attorney notified the Union that Respondent had been working on plans "for some months" to decrease its meat processing activities and eventually terminating the operation entirely 29 Turning to the question of the effect of the subcontracting on the conditions of employment, job tenure, and employment security, records produced by Respondent disclose that in the period between January 1 and July 31, 1965, a substantial por tion of Respondent's total production was processed by Walkling.30 The effect on the job tenure of Respondent's employees is further shown by the layoff or discon- tinuance, on May 28, of the night shift production crew, affecting between seven and nine employees. With regard to this layoff, Boone testified that the Company was "caught up on orders"; that it had a backlog of 12,000 pounds of orders, representing 3 days' work on a one-shift operation. Additionally, according to Boone, the Company had accumulated an inventory-its "freezers were full of merchandise," and it had no place to put it. Further, Boone testified, the Company did not know how long the layoff would last, and the employees laid off were offered employment at another business which Boone owned.31 The night shift was resumed 2 or 3 weeks Z8 Fibreboard Paper Products Corporation, 138 NLRB 550, enfd. 322 F.2d 411 (CA D.C.), affd. 379 U.S. 203; cf. Town & Country Manufacturing Company, Inc., 136 NLRB 1022, 1027, enfd. 316 F .2d 846 (C.A 5). 29 This, of course, hardly constituted notification and opportunity for consultation and negotiation which the law requires. 30 According to a compilation prepared by Respondent , of the dollar and weight value of products processed during this period, out of a total of $876,328 in amount ( 1,586,719 lbs.), $113,134 (202,100 lbs .), was processed by Walkling. This processor's earliest pro- duction was in March ($8,868 for 14,220 lbs.), rising to $26,334 for 41,940 lbs. (nearly one-half of the dollar amount of goods processed by Respondent alone ), in April , Walkling's peak production during the entire period covered. No production by Walkling is shown for the months of January , February , and July (the month the flood, mentioned elsewhere, occurred ). Boone testified that Walkling was out of production longer than Respondent after the flood-at least throughout July-but that Walkling had its own warehouse, and had been building up inventory before shipping product to Respondent. In addition, accord- ing to Boone, Walking's production had been delayed because it was having financial dif- ficulties, and was awaiting approval of a loan from the Small Business Administration. Walkling's production in August amounted to $18,826 for 39,380 lbs., in September, to $20,285 for 33,640 lbs., declining to $972 for 1,500 lbs., in December, when Respondent showed a production of $84 ,328 for 161 ,390 lbs. 31 The record does not indicate whether any of these employees accepted this offer. 972 DECISIONS OF NATIONAL LABOR RELATIONS BOARD after the flooding of the plant, when the South Platte River overflowed on June 16, 1965, causing a shutdown of the plant. During this interval, orders were being received, and the Company's backlog mounted so that as soon as the plant was placed in operation on a production basis, Respondent recalled the employees on the night shift who had been laid off,-most of whom returned. It will be recalled that, on July 1, after receiving notice of the filing of the charge, Wagner notified the Regional Director that the three employees named had returned to work on June 29. In his letter, Wagner gave as the reason for the layoff, the installation of additional equipment, presently discussed, and "dimi- ution of orders." It is apparent from the figures for the month of April, the sub- contractor's peak period of production, and May, that the layoff of the night shift on May 28, was attributable, in whole, or substantial part, to the accumulation of inventory and the processing by the subcontractor. Boone's testimony, that a con- tributing factor, in the decision to discontinue the night shift was that Respondent had been encountering problems with the Department of Agriculture, Meat Inspec- tion Department, for exceeding its production quota of 20,000 pounds a month under its existing license, and that it had been confronted with a choice of acquir- ing a new plant or eliminating -the night shift, is not persuasive. Boone testified that Barnes had prevailed on the Department of Agriculture to permit it to con- tinue to operate on the assurance that Respondent had entered into a subcontracting arrangement with a copacker, and that after catching up with its orders, Respond= ent reduced production to one shift. However, Respondent did not hesitate to recall the night shift, even though, as will be seen from Respondent"s compilation of pro- duction, monthly production had far exceeded the quota of 20,000 pounds per month imposed by the Department of Agriculture. . Boone's additional reason for laying off the night shift, that production was more costly beacuse of premium pay and other cost factors, and the added cost of De= partment of Agriculture inspection on the night shift, requiring the payment of overtime to inspectors, is equally unconvincing, considering that these factors did not deter Respondent from recalling the night-shift employees several weeks later. It is true that, as the Board has held, even though an employer may be under an obligation to notify and bargain with the majority representative before subcon- tracting any of its operations, under certain circumstances, the obligation may be regarded as satisfied, and no violation will be found. Thus, "where the prima facie showing of violation inherent in the employer's unilateral action was overcome or `cured' by its overall bargaining conduct, both prior and subsequent to execution of the subcontract," the Board has dismissed a complaint alleging violation of Section 8 (a)(5) 32 The record of Respondent's overall bargaining conduct here, however, both prior and subsequent to the execution of the subcontract with Walkling, far from overcoming the effect of its unilateral action in subcontracting a part of its pro- duction, reveals, as has already become apparent, and, as will presently be shown, a rejection of fundamental and well-established principles of good-faith bargaining. Applying the significant criteria enunciated by the Board in the Westinghouse case,33 to the facts here, it is clear that the subcontracting "involved a departure from previously established operating practices, effected a change in conditions-of employment, [and] resulted in a significant impairment of job tenure, employment security, or reasonably anticipated work opportunities for those in the bargaining unit." It is, therefore, found that, by subcontracting a portion of its meat processing to Walkhng Corporation, on or about January 25, 1966, without prior notice to or consultation with the Union, as the duly certified bargaining representative of the unit employees, and without affording the Union an opportunity to bargain about the issue, Respondent has failed and refused to bargain with the Union, in voilation, of Section 8(a) (5) of the Act. 2., Introduction of new machinery The General Counsel contends that the acquisition of new machinery, which he characterizes in his brief, as "labor saving equipment," since the Union's certinca- 32 See, e g, Hartmann Luggage Company, 145 NLRB 1572; Twenty-ninth Annual Report of the National Labor Relations Board (1964), pp. 77-78 33 Westinghouse Electric Corporation (Mansfield Plant), 150 NLRB 1574; Thirtieth Annual Report of the National Labor Relations Board (1965), pp. 72-75. SHURTENDA STEAKS, INC. 973 tion, "falls into the same category" as the subcontracting issue. Admittedly, this was done unilaterally, without prior notice to or consultation with the Union, and without opportunity to bargain about the issue. Pointing to the admission, in Wag- ner's letter of July 1, 1965, to the Regional Director, that the three employees covered by the charge were laid off "because the further use of mechanical equip- ment and diminution of orders" had rendered their jobs unnecessary, the General Counsel maintains that the adverse effect of the introduction of new equipment upon the jobs of unit employees was irrefutable. Therefore, he contends that Respondent was obligated to bargain with the Union about this "automation." Respondent argues that the installation of new equipment had been under con- sideration long before the Union appeared at the plant; that the _new equipment resulted in "greater production and more jobs"; and that, in any event, it was one of the issues disposed of by the settlement agreement. Reference to the new equipment is to a buttermilker and breading machine, pur- chased, according to the invoice, dated July 1, 1964, at least 6 months before the Union was certified. According to Boone's undisputed testimony, negotiations for the purchase of the equipment had been begun several months before the date of the invoice. This machine, Boone testified, was acquired to replace a similar ma- chine which had not been functioning properly. When the replacement itself did not perform satisfactorily, after negotiations with the manufacturer, commencing in August 1964, and a visit by Boone and Barnes to the manufacturer's plant in Ohio, Respondent received delivery of a second replacement, in May 1965, some 4 months after the Union's certification. Since this machine represented a replace- ment for defective or obsolescent equipment, for the acquisition of which negotia- tions had been under way long before the Union's designation as majority repre- sentative, it cannot be said that Respondent was required to notify and bargain with the Union about the acquisition of this equipment, even though actual delivery of the last replacement occurred after the Union's certification. This is especially true in the absence of any showing that the acquisition of this machine resulted in significant impairment of the job opportunities of the unit employees. About the same time this equipment, originally scheduled for delivery in May 1964, was delivered (presumably some time before July 1, 1964, the date of the invoice), a conveyor, designed to work in conjunction with the breading machine, and part of the same system, was also delivered to Respondent. Early in the sum- mer of 1964, Respondent also began negotiations for a fryer, which was delivered in the fall of 1964, the exact date of which is not established by the record. Shortly before the flood of June 16, 1965,34 Respondent received an additional piece of equipment, "an improved automatic machine," described as a Hollymatic 500A patty machine, an improved model of a machine replacing a second hand machine which Respondent had been using for several years, and which had worn out and become obsolescent. The new machine, according to Boone, eliminated substantial loss of breakdown and down time. The buttermilker and breading machine, performed by automation the opera- tion which had formerly been performed manually. According to Boone, Respond- ent had been sustaining "heavy losses," estimated at $45,000, before installing this equipment, largely because Respondent had been attempting to operate with obso- lete equipment. The installation of this equipment (in conjunction with the con- veyor and the patty machine), "made it possible for [it] to stay in business." Although Boone conceded that the operation of this equipment enabled Respondent to achieve the same amount of production with fewer employees, he testified that Respondent did not lay off any employees but, instead, increased its sales to con- sume its production. William J. Borges, formerly employed by Respondent as production manager,35 testifying as a witness for the General Counsel, explained in some detail the pro- 34 Boone could only place the time as "a few days or perhaps a couple of weeks before the flood." -15 Borges, who was employed by Respondent from early 1964 until late 1965, testified that he was production manager from about January through May 28, 1965, the date of the layoff, supervising the night shift employees, denying that he was merely night fore- man, although he'admittedly performed "various jobs," including the job of meatman. As has already been indicated elsewhere, he filed an unfair labor practice charge on June 1, 1965, following the May layoff, and was awarded backpay but,not reinstatement, which he declined , as shown by settlement agreement. No issue was.-apparently raised as to his possible supervisory status. 974 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cedure in processing steaks. It is unnecessary to recount the procedure here, what is significant is that, according to Borges, the net result of the installation of the new equipment was the elimination of two of the four women previously assigned to bread steaks at the breading table, and a girl whose job consisted of removing the steaks from the fryer, who was eliminated by the installation of another conveyor.36 Thus, according to Borges, after the new equipment was installed, a total of six employees was engaged in the entire processing operation under his supervision on the night shift, as compared with eight, before the introduction of the new equip- ment. Based on a 2- or 3-week assignment on the day shift, Borges testified that the procedure was "somewhat similar," but more "experimental" on the day shift 37 Boone, on the other hand, maintained that, although the installation of the new equipment automated the operation, and the larger fryer, in conjunction with the conveyors, eliminated the work of one girl (who had formerly removed the steaks and placed them on a tray), the overall effect of the new equipment was to create more jobs. Boone explained that for a period of time in 1965, the Com- pany had operated at a loss, "was $45,000 in the red," was almost compelled to go out of business, and in this desperate situation, the Company decided to purchase the new equipment. Prior to the Union's certification, according to Boone, the Company's production had been about 50,000 pounds a month. The introduction of the new equipment made it possible for the Company to continue in business and provide its employees with jobs, even creating more jobs and greater security. Conceding that the automation caused a reduction in the number of jobs in the buttermilking and breading operation from 4 to 3 employees, as well as a reduction of one, on the Hollymatic machine, Boone testified that, as a result of the new equipment, production increased to the point where the Company was handling 174,000 pounds of meat in September 1965, as compared with 65,000 pounds, in January 1965. This, in turn, resulted in an increase in jobs in the shipping and packing departments, as well as in the cleanup department. Consequently, the Company's volume of business made it possible to avoid any layoffs, by shifting employees from one job to another. At the time of the hearing, according to Boone, Respondent was employing 19 persons, on both shifts, excluding. foremen, whereas, prior to the automation of its equipment, it had employed 18 persons, including shipping and cleanup employees, in addition to two part-time employees, making a total of 21 employees, as compared to 18 regular employees (plus occasional part-time employees), before the so-called automation. This, however, overlooks the fact that the increase, if any, was in shipping, packing, and cleanup rather than in production, where previous layoffs had taken place. Moreover, this evidence overlooks the admission in Wagner's letter of July 1, 1965, that the lay- offs of the three employees had been due, at least, in part, to the introduction of additional "mechanical equipment." As has already been seen, however, the buttermilking and breading machine had been ordered, and actually delivered, at least 6 months before the Union appeared on the scene. Because of malfunction, this equipment was replaced by the manufacturer, though not until May 1965, some 4 months after the Union's certification. The conveyors, used in conjunction with this machine, as well as the fryer, had also been ordered and delivered prior to the Union's certification. Only the Hollymatic machine, delivered shortly before the flood on June 16, 1965, was acquired after the advent of the Union, and this machine, though an improved model, was merely a replacement for an earlier, obsolescent model. In view of all these circumstances, and especially since the evidence of any actual reduction in jobs resulting from the introduction of new equipment, is too inconclusive to warrant an affirmative finding, it cannot be said that the acquisition 16 After the installation of the new machines, the equipment consisted of a buttermilker and breading table, a conveyor from the breading table to the fryer, and two conveyors carrying the steaks through the fryer. 87 Borges explained that the conveyor from the buttermilker to the fryer eliminated one girl, and the two conveyors from the fryer eliminated another girl, who had also acted as floor lady. Borges' actual recapitulation of the number of employees involved in each opera- tion, both before and after the installation of the new equipment, did not confirm his con- clusion. His evident confusion may have been due to the fact, as he testified, that there was "so much part-time [help] that [he couldn't] remember exactly." In view of this, and the obvious confusion in Borges' testimony, it cannot be said with any degree of cer- tainty that the installation of the new equipment actually resulted in a reduction in force. SHURTENDA STEAKS, INC. 975 by Respondent of the new equipment resulted in a change in conditions of employ- ment or a significant impairment of job tenure, employment security or reasonably anticipated work opportunities for the unit employees. It is, therefore, found that the allegations of the complaint that, by the intro- duction of new machinery at its plant, without prior notice or consultation with the Union, Respondent has refused to bargain with the Union, in violation of Section 8(a)(5) of the Act, have not been sustained, and it will, accordingly, be recommended that those allegations be dismissed. D. The allegations of refusal to bargain in good faith subsequent to the settlement agreement of September 22, 1965 The settlement agreement of September 22, required Respondent, among other things, to bargain collectively with the Union, as well as to refrain from unilater- ally subcontracting unit work, automating its production process, or making any other changes in the terms and conditions of employment, without prior notice, consultation and bargaining with the Union. Despite this, when the Union com- municated with Wagner on October 1, after the execution of the settlement agree- ment, Wagner reverted to the position, enunciated as early as March 16, that the Union no longer represented a majority of the employees, and refused to meet with the Union unless and until it proved its continued majority status. By this conduct, Respondent committed a flagrant breach of the settlement agreement, wholly apart from its underlying refusal to bargain. It is too well established to require extensive discussion or citation of authority that, in the absence of unusual circumstances, a certification by the Board, based on an election, of the status of a union as exclusive representative of the employ- ees in the bargaining unit, must be honored for a reasonable time, normally at least a year, inasmuch as it establishes an irrebuttable presumption of the majority status of the union 38 And this is so even if, within the certification year, the union has, without the employer's fault, lost a majority of the employees from its mem- bership.39 What constitutes "unusual circumstances" has been delineated by the Board, and is referred to by the Court in the Ray Brooks decision. No such circumstances are present here. It is evident that Respondent lost little time in repudiating that part of the settlement agreement dealing with the refusal to bargain. Thus, despite its under- taking to bargain with the Union in good faith, Respondent, while giving token observance to this agreement, by notifying the Union, the same day, of proposed changes in personnel and duties, and inviting questions (to which the Union admit- tedly did not object or reply), refused, on October 1, to meet with the Union until it established its majority status, and proposed that a meeting of the employees be held for this purpose at the plant. The Union's protestations that this demand contravened the terms of the settlement agreement fell on deaf ears. Finally, the Union was obliged to yield to Respondent's insistence, and the meeting was held on November 6. It is immaterial whether the purpose of the meeting was, as Respondent contends, to determine if the employees still desired to be representd by the Union, or, whether, as the Union contends, to ascertain whether the employees were willing to accept Respondent's so-called counterproposals or, as seems less probable, to negotiate a contract.40 Respondent's insistence that the Union conduct a poll of the employees for this purpose also, therefore, violated Respondent's statutory obligation to bargain with the Union, as well as to comply with the settlement agreement, executed less than a month earlier. 88 Ray Brooks v. N.L.R.B., 348 U.S. 96 (1954) ; N.L.R.B. v. International Shoe Corpora- tion of Puerto Rico, 357 F.2d 330 (C.A. 1) ; N.L.R.B. v. Holly-General Company, Division of Siegler Corp., 305 F.2d 670 (C.A. 9) ; N.L.R.B. v. U.S. Sonic8 Corp., 312 F.2d 610 (C.A. 1). 'DId. See also N.L.R.B. v. Warrensburg Board & Paper Corp., 340 F.2d 920 (C.A. 2). 'U The prospect of attempting to negotiate a contract with Respondent in the presence of employees , even if the body of employees had resolved itself into a committee of the whole for that purpose, gives some pause. But, even assuming that the Union, in a desperate effort to persuade the Company to fulfill its statutory obligation, may have consented to this wholly unorthodox and unlawful procedure, this would still not relieve the Company of the obligation to bargain. 976 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The fact that the poll was not actually taken by Respondent, or upon its plant premises, does not relieve it of the consequences of its unfair labor practice in requiring that such a poll be taken by the Union. Nor, in view of the Union's status as certified bargaining' agent, is is material that the poll, taken at union headquarters, may have demonstrated a disaffection by the employees toward the Union. Respondent appears to contend that, by agreeing to conduct the poll, and, in effect, to withdraw as statutory representative, if the results established that it no longer represented the employees, the Union waived, or has been estopped from asserting, its right to represent the employees. Since, according to Respondent, the results of the poll demonstrated that the employees no longer wished the Union to represent them, Respondent maintains that it was under no legal duty to bargain with the Union. This contention can only be based on a complete misconception of the status of a certified bargaining representative and the employer's statutory obligation toward it. A certified union is not required, in the absence of unusual circumstances adverted to earlier, to reestablish its majority status during the cer- tification year whenever the employer's whim or caprice may dictate. Moreover, passing the question of whether a certified union may voluntarily renounce its statutory right and obligation to represent the employees covered by the certifica- tion, a renunciation or waiver of such a fundamental duty may not be lightly inferred. This is not to overlook the evidence that Union Representative Dean is alleged to have stated to a management official that, if the Union had lost the sup- port of a majority of the unit employees, he would withdraw from the scene. Assuming that Dean was purporting to speak for the Union, rather than for him. self as an individual, such an impulsive remark, obviously engendered by the frustrations stemming from Respondent's dilatory bargaining tactics, can scarcely be regarded as manifestation of a waiver of the Union's statutory obligation.41 That the Union did not intend to abandon its right to represent the employees, is manifested by its refusal to conduct the poll on the premises of Respondent, or in the presence of management officials, and by its insistence, even after the poll at union headquarters (which, according to the Union, was merely for the purpose of canvassing sentiment about a strike), that, despite the apparent results of the poll, it intended to continue to represent the employees as their bargaining agent. More significant is the fact that, on November 8, 2 days after the so-called poll, the Union filed an unfair labor practice charge, alleging a refusal to bargain. Respondent can, therefore, scarcely maintain that the Union waived its right to represent the employees, either by the statement of Union Representative Dean, at the March 16 meeting, or on the basis of the results of the poll of its members. It should be borne in mind that, late in October, and within 2 weeks of the November 6 meeting, while Wagner was insisting upon the meeting for the purpose of ascertaining the union sentiments of its employees, employee Mares was con- ducting a poll of the employees to determine whether they wished to be represented by the Union. There is reason to suspect that she did so at the instigation of Plant Superintendent Wofford, although the record does not permit of an affirmative finding to this effect. It is unnecessary, however, to rely on suspicion or conjecture as to the circumstances which led to the poll of the employees at the plant, which Mares undertook, and her role as self-appointed spokesman for them at the union meeting held on November 6, following the meeting at the plant. The uncontrovertible facts are that the employees voted, at a Board-conducted election less than a year earlier, to have the Union represent them; that, pursuant to the results of the election, the Union was certified, on January 7; that, following the Union's bargaining demand, several days later, Respondent embarked on a course of dilatory conduct which could only have resulted in frustrating the bar- gaining process, engaged in what can only be described as sham bargaining, and unilaterally subcontracted a portion of its production, without prior consultation or bargaining with the Union. Moreover, despite the settlement agreement, in which it had categorically agreed to bargain with the Union, and while the Union's certification was still in force, Respondent refused to bargain with the Union unless and until it established to " Cf. N.L.R.B. v. Warrensburg Board & Paper Corp., 340 F.2d 920 (CA. 2), where the court held, affirming the Board, that the inclusion of a 30-day escape clause under a union- shop provision did not justify a finding that the union would make no claim to represent the employees and would waive its right following certification if the union did not represent a majority of the employees at the end of the escape period. SHURTENDA STEAKS, INC. 977 Respondent's satisfaction that it still represented the unit employees. Under these circumstances, any disaffection by the unit employees toward their duly certified bargaining agent , or loss of majority by the Union, must be attributed to Respond- ent's unfair labor practices. It is, therefore, found that the attempted repudiation by the unit employees of their certified bargaining agent , on November 6, during the certification year, was ineffective to deprive the Union of its representative status, and afforded Respond- ent no ground for refusing to bargain with the Union. E. Respondent's conduct subsequent to the November 6 meetings It is significant that, despite Respondent's contention that the poll of Novem- ber 6, demonstrated that the Union no longer represented a majority of the unit employees, Respondent engaged in conduct thereafter which was inconsistent with this position. After having procrastinated in its bargaining obligation until nearly the end of the certification year, and having accomplished what it had apparently set out to do-to dissipate the Union's majority-and after having insisted on a union poll, which, it believed established the Union's loss of majority, Respondent, nevertheless, continued its charade of collective bargaining. On November 15, Respondent notified the Union that, "pending further negotiations," it was grant- ing all employees a 25-cent-an-hour pay raise, effective with paychecks to be issued November 24, unless the Union objected. Thus, the Union was notified, but not afforded an opportunity to bargain about the raise. Respondent acted no less unilaterally, for having notified the Union in advance, having failed to afford the Union an opportunity to bargain about the proposed increase. Moreover, it placed the Union in the untenable position with its members of objecting, and thus depriving them of the raise, or of being precluded from asserting that Respond- ent had failed to bargain with the Union by granting the employees a unilateral increase. Thus, in one stroke, Respondent fulfilled the tacit promise made to its employees, on October 29, when it learned from Mares the reasons for her personal poll, while at the same time depriving the Union of any credit for the raise. Confronted with this dilemma, the Union did the only thing it could. Noting that the proposed wage increase was "purely unilateral," and not the result of collective bargaining, the Union replied that it had no objection to the increase, provided it was clearly understood that ultimate wage rates and working conditions would still be determined by collective bargaining. Thus, the Union's acquiesence in Respondent's unilateral granting of the wage increase cannot be regarded as a waiver of its right to be notified and consulted, and the opportunity to bargain about wage rates and other terms and conditions of employment. It is, therefore, found that Respondent's action in granting the wage increase, on November 15, constituted unilateral action in derogation of the exclusive bar- gaining agent, notwithstanding that Respondent notified the Union in advance that, unless the Union objected, it would put the raise into effect. By such action, Respond- ent failed and refused to bargain with the Union, in violation of Section 8(a)(5) of the Act. Equally surprising, in view of Respondent's contention that the Union no longer represented the unit employees, is Respondent's action in submitting to the Union, on December 6, a purported counterproposal. This counterproposal, however, con- sisted of little more than an embodiment of existing wages and terms and con- ditions of employment. The proposed wage scale provided for a range of between $1.25 and $2.25, at the sole discretion of the employer, with statutory overtime. The remainder of the proposals reserved to Respondent virtually absolute control over other terms and conditions of employment. In short, the proposals offered an agreement that was illusory rather than real. Moreover, Respondent's actual attitude toward the principle of collective bargaining is manifested by its reference in the letter of transmittal to the fact that neither the employees nor management desired to deal with the Union or negotiate a contract, and by calling attention to the approaching expiration of the certification year. This suggests that, while rejecting the principle of collective bargaining, and maintaining that the Union had lost its majority, Respondent was not averse to entering into a contract with the Union, provided it could do so upon its own terms. It is not surprising, therefore, that Respondent ignored the Union's reply of January 10, 1966, to Respondent's counter- proposals. 264-188-67-vol. 161-63 978 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is, therefore, found that by failing and refusing to meet at reasonable times, and bargain in good faith with the Union, since September 22, in violation of its obligations under the Act and the terms of the settlement agreement; by requiring the Union to conduct a poll of its employees on November 6, and conditioning further bargaining on the results of that poll; by its unilateral wage increase, on November 15, 1965, without affording the Union an opportunity to bargain about it; by failing to respond to the Union's reply of January 10, 1966, to Respondent's proposal of December 6, and to meet with the Union, as requested; and by the other acts previously set forth, Respondent has, at all times since September 22, refused to bargain with the Union in violation of Section 8(a)(5) of the Act.42 F. The alleged independent violations of Section 8(a) (1) Apart from the derivative 8(a)(1) allegations stemming from the findings relat- ing to the refusal to bargain, the General Counsel alleges that Respondent inde- pendently violated this section by (1) telling employees that they would not regret their decision to repudiate the Union; and (2) by having its supervisors transport employees to the meeting at union headquarters, on November 6, and attempting, to gain admittance to the union meeting. The first alleged violation is based upon the incident at the meeting, on Octo- ber 29, when employee Mares and other employees met with management repre- sentatives to report the results of the informal poll. It will be recalled that Barnes expressed gratification with the results, and told the group the employees would have no reason to regret decision. Had Barnes been, content to confine his remarks to an expression of appreciation, he would undoubt- edly have been entitled to the protection which the Act extends to expressions of views, argument, or opinion. However, when his enthusiasm impelled him to assure the employees that they would not regret their action, he was extending a thinly veiled promise of reward for the action already taken and future benefits which they could expect for adhering to their decision. That this was not merely a casual remark, prompted by a spontaneous reaction to the news of the employees' repu- diation of the Union, is manifest from the fact that the prediction actually bore fruit when, on November 15, some two weeks later, and less than 10 days after the November 6 poll, the employees were rewarded with the 25 cent wage increase. It is evident that Barnes' remark was a considered and deliberate, though less than subtle, promise of benefit to the employees for the renunciation of their bar- gaining representative. It is, therefore, found that, by Barnes' statement on Octo- ber 29 to the effect that the employees would not regret the action they had taken in abandoning the Union, Respondent has interfered with, restrained, and coerced its employees in the exercise of the right to self-organization guaranteed in Section 7, thereby violating Section 8 (a)(1) of the Act 43 The second instance of alleged independent 8(a)(1) violation relates to the incident, following the November 6 meeting at the plant, when Foremen Barr and Clancy, both admitted supervisors, transported employees to union headquarters, in company vehicles, and attempted to gain entrance to the union meeting. That these foremen actually meant to attend the meeting is evident from the fact that they attempted to enter the union hall, and would have done so, had they not been barred by a union representative. Although there was no showing that these fore- men had acted on instructions from management, in view of their supervisory status their conduct would, of course, be attributable to Respondent. The question arises, however, as to what prompted these men to drive the employees to the union meet- ing in company cars. Respondent's explanation that, when the union representatives, 42 In view of the withdrawal of certain of the charges alleging discriminatory layoffs, and the disposition of other such charges by the settlement agreement , for reasons stated, elsewhere, no finding of refusal to bargain is based on these layoffs . See footnote 23. Evidence was introduced at the hearing that the Union threatened to conduct a boycott of Respondent's products . There is nothing unlawful in such action as an economic means, of compelling a primary employer to bargain with the certified labor organization. More- over, such action would afford the employer no justification for refusing to bargain with, the Union. Nor, did the fact that the Union filed various unfair labor practice charges against the employer while the negotiations were in progress relieve the employer of the duty to bargain with the exclusive bargaining representative . See N.L R.B. v International' Shoe Corporation of Puerto Rico, 357 F.2d 330 (C A. 1). 48 Cf. Edro Corporation and Anasco Gloves, Inc., 147 NLRB 1166 , 1176; Cedartown Yarn. Mill8, Inc., 84 NLRB 1; Macon Textiles, Inc., 80 NLRB 1525, 1527. SHURTENDA STEAKS, INC. 979 announced at the meeting at the plant that there would be a meeting at union head- quarters later that morning, these foremen assumed that they, too, were invited strains credulity. Bearing in mind the circumstances under which the meeting at the plant was abruptly terminated, after the altercation over the taking of the poll on plant premises, it is unreasonable to believe that the foremen seriously believed they had been invited to the union meeting. It would, indeed, be a singular act of accommodation for an employer to transport employees to a union meeting in company vehicles unless it had an ulterior motive for doing so. Such motive is not difficult to discover. Here, the motive appears to be two-fold. First, to ascertain whether the employees would adhere to their determination to renounce the Union when polled in the privacy of their union headquarters, away from company influ- ence. Thus, the unsuccessful effort of the foremen to gain entrance to the meeting, in other words, an attempt to discover what took place at the union meeting. By this conduct, Respondent engaged in surveillance of the union activities of its employees or created the impression of doing so. Second, to make certain that all the employees, who, as Respondent already was aware, had indicated their rejec- tion of the Union, would attend and vote. For, as had already been pointed out by one employee after the meeting in the company office, the issue, whether it was to reject the Union or to support a strike, would be decided by a majority of those present and voting. It is, therefore, not the act of transporting the employees in company vehicles which constituted the vice of Respondent's conduct, but its purpose to ensure that these employees, who were known to favor disaffiliation from the Union, actually participated in the poll. It is, therefore, found, on the basis of the foregoing, under the particular cir- cumstances shown here, that, by engaging in or creating the impression that it was engaging in surveillance of the union activities of its employees, and by trans- porting employees in company vehicles to the union meeting, on November 6, under circumstances which could not have failed to convey to the employees Respondent's wishes regarding the poll to be conducted by the Union, Respondent has interfered with, restrained, and coerced its employees in the exercise of rights guaranteed in Section 7, thereby violating Section 8 (a) (1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent, set forth in section III, above, occurring in connec- tion with its operations, described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices, within the meaning of Section 8(a)(5) and (1) of the Act, by the conduct detailed above, it will be recommended that Respondent be ordered to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Although more than a year has elapsed since the certification, and some 4 months (as of the date of the hearing), since the settlement agreement, it will, nevertheless, be recommended, since the Union has not been afforded a reasonable opportunity to enjoy the fruits of its certification due to Respondent's unfair labor practices, that Respondent be required to bargain with the Union. As to the effect of the settlement agrement, the holding of the court, in a comparable situation, is applicable here: We, accordingly, agree with the Board's contention that [Respondent], by entering into the settlement agreement, thereby securing a withdrawal of the charges of unfair labor practices, is bound to bargain in good faith with the Union for a reasonable period of time after such agreement, without question- ing the Union's lack of a majority . . . While not an admission of past lia- bility, a settlement agreement does constitute a basis for future liability and the parties recognize a status thereby fixed . An entire structure or course of future labor relationships may well be bottomed upon the binding effect of a status fixed by the terms of a settlement agreement. If a settlement agree- ment is to have real force, it would seem that a reasonable time must be afforded in which a status fixed by the agreement is to operate. Otherwise, settlement agreements might indeed have little practical effect as an amicable and judicious means to expeditious disposal of disputes arising under the 980 DECISIONS OF NATIONAL LABOR RELATIONS BOARD terms of the Act. Thus, it follows that [Respondent], after having solemnly agreed to bargain with the Union, should not be permitted, within three and one-half months after the agreement, to refuse so to bargain, even if, as here, the Union clearly did not represent a majority of the employees. Poole Foun- dry & Machine Company v. N.L.R.B., 192 F.2d 740, 743 (C.A. 4); See also N. J. MacDonald and Sons, Inc., 155 NLRB 67. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, the following conclusions of law are made: CONCLUSIONS OF LAW 1. Respondent, Shurtenda Steaks, Inc., is, and at all times mentioned herein, has been, an employer engaged in commerce and a business affecting commerce, within the meaning of Section 2(6) and (7) of the Act. 2. Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO, herein called the Union, is, and at all times mentioned herein, has been, a labor organization, within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees, including truckdrivers employed by the Employer at its Denver, Colorado, plant; excluding office clerical employees, salesmen, driver salesmen, guards, professional employees, and supervisors as de- fined in the Act, constitute an appropriate unit for the purposes of collective bar- gaining within the meaning of Section 9(b) of the Act. 4. At all times mentioned herein, the Union has been, and now is, the exclusive bargaining representative of all the employees in said appropriate unit for purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By failing and refusing, at all times, on and after January 20, 1965, to bargain collectively with the Union as the exclusive representative of the employees in the appropriate unit; by subcontracting a portion of its production about January 25, 1965, without notification to or consultation with the Union; by requiring the Union, on and after March 16, 1965, and particularly on November 6, 1965, to conduct a poll of the employees in the appropriate unit to establish its status as exclusive representative of said employees; by unilaterally granting its employees a wage increase , on about November 15, 1965, without affording the Union an oppor- tunity to bargain about such wage increase; by failing and refusing to bargain in good faith with the Union, from and after the settlement agreement, dated Septem- ber 22, 1965, failing to comply with the terms and provisions of said settlement agreement, and insisting that the Union reestablish its right to represent the employ- ees in the appropriate unit, and by the totality of said conduct, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5), thereby interfering with, restraining, and coercing employees in the exer- cise of the rights guaranteed in Section 7, and violating Section 8 (a)( I) of the Act. 6. By tacitly promising or holding out promise of benefit to the employees on October 29, 1965, as an inducement to repudiate the Union as the exclusive bar- gaining representative of said employees, r}nd by fulfilling said promises, about November 15, 1965, through the medium of a wage increase; by engaging or creat- ing the impression of engaging in surveillance of the union activities of its employ- ees, and by providing transportation for the employees to ensure their attendance at union headquarters, on November 6, 1965, Respondent has interfered with, re- strained, and coerced its employees, in the exercise of the rights guaranteed in Sec- tion 7, thereby violating Section 8(a)(1) of the Act. 7. Except as found above, Respondent has not engaged in unfair labor practices alleged in the complaint. 8. The aforesaid unfair labor practices, found above, are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact, conclusions of law, and upon the entire record in the case, it is hereby recommended that Respondent, Shurtenda Steaks, Inc., Denver, Colorado, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing or refusing to bargain collectively concerning rates of pay, wages, hours of employment, and other terms and conditions of employment, with Amal- gamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO, as the exclusive bargaining representative of all the employees in the appropriate unit described above. SHURTENDA STEAKS, INC. 981 (b) Unilaterally subcontracting production, granting wage increases or making any changes or modifications concerning rates of pay, wages, hours of employ- ment, or other terms or conditions of employment, without prior notification to and consultation with the Union, and affording it an opportunity to bargain concerning such changes or modifications; provided that nothing herein shall be construed to require or permit Respondent to revoke, withdraw, alter or modify any wage in- crease or other economic benefit previously granted the employees. (c) Promising employees, tacitly or expressly, benefits as an inducement to re- nounce the Union as their exclusive bargaining agent. (d) Conducting or requiring polls of its employees, or assisting or participating in activities designed to determine the desires of its employees with regard to repre- sentation by the Union as bargaining agent, or insisting upon or requiring such polls as a prerequisite to further bargaining with the Unions. (e) Engaging in or creating the impression of engaging in surveillance of the union activities of its employees. (f) In any other manner interfering with, restraining, or coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as amended. 2. Take the following affirmative action, which, it is found, will effectuate the policies of the Act; (a) Upon request, bargain collectively with Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO, as the exclusive bargaining representative of all the employees in the above-described unit, and, if an understanding is reached, embody such understanding in a signed agreement. (b) Post at its plant at Denver, Colorado, copies of the attached notice marked "Appendix." 44 Copies of said notice, to be furnished by the Regional Director for the Region 27, after being signed by a duly authorized representative of Respondent, shall be posted immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to its employees are customarily posted. Reasonable steps shall be taken by Respond- ent to insure that such notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 27, in writing, within 20 days from the date of the receipt of this Decision, what steps Respondent has taken to comply herewith 45 In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order" shall be substituted for the words "a Decision and Order." 4u In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read: "Notify the said Regional Director, In writing, within 10 days from the date of thiss Order, what steps Respondent has.taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES 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, as amended, we hereby notify our employees that: WE WILL NOT fail or refuse to bargain collectively with Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 634, AFL-CIO, as the exclusive collective-bargaining representative of all the employee in the appropriate unit set forth below. WE WILL NOT unilaterally subcontract production, grant wage increases, or make any changes or modifications concerning rates of pay, hours of employ- ment, or other terms or conditions of employment, without prior notification and consultation with the Union, and affording it an opportunity to bargain concerning such changes or modifications; provided that nothing herein shall 982 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be construed to require or permit Respondent to revoke, withdraw, alter, or modify any wage increase or other economic benefit previously granted the employees. WE WILL NOT promise employees, tacitly or explicitly, benefits as an induce- ment to renounce the Union as their exclusive bargaining representative. WE WILL NOT conduct or require polls of our employees, or assist or par- ticipate in any activities designed to determine the desires of said employees with regard to representation by the Union as bargaining agent or insist upon or require such polls as a prerequisite to further bargaining with the Union. WE WILL NOT engage in or create the impression of engaging in surveillance of the union activities of our employees. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to join or assist said Union or any other labor organization, to bargain collectively through repre- sentatives of their own choosing, and to engage in any other concerted activities for the purpose of mutual aid or protection, or to refrain from any and all such activities, except to the extent that such right may be affected by an agree- ment in conformity with Section 8(a)(3) of the National Labor Relations Act, as amended. WE WILL, upon request, bargain collectively with said Union as the exclusive collective-bargaining representative of all the employees in the appropriate unit, and, if an understanding is reached, embody such understanding in a signed agreement. The appropriate unit is: All production and maintenance employees, including truck drivers employed by the Employer at its Denver, Colorado plant; excluding office clerical employees, salesmen, driver salesmen, guards, professional employees, and supervisors as defined in the Act. SHURTENDA STEAKS, INC., 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, 609 Railway Exchange Building, 17th and Champa Streets, Denver, Colorado 80202, Telephone 688-5850. Bilyeu Motor Corp. and General Drivers, Salesdrivers, Ware- housemen & Helpers Local Union 245, International Brother- hood of Teamsters, Chauffeurs, Warehousemen & Helpers of America. Case 17-CA--844. November 15, 1966 DECISION AND ORDER On August 2, 1966, Trial Examiner John H. Eadie issued his Decision in the above-entitled proceeding, finding that the Respond- ent had engaged in and was engaging in certain unfair labor prac- tices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Exam- iner's Decision. Thereafter, the Respondent filed exceptions to the Decision and a supporting brief, and the General Counsel filed excep- tions and a supporting brief. 161 NLRB No. 93.