Stockton District Kidney Bean Growers, Inc.

STOCKTON DISTRICT KIDNEY BEAN GROWERS Stockton District Kidney Bean Growers, Inc. and Packers and Farm Production Workers Local No. 604 , Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO. Case 20-CA-4100. June 8, 1967 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS BROWN AND JENKINS On March 3, 1967, Trial Examiner Martin S. Bennett 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. Thereafter, Respondent filed exceptions to the Trial Examiner's Decision and a brief in support thereof; the General Counsel filed a brief in support of the Trial Examiner's Decision; and the Charging Party filed an answer to Respondent's exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three- member panel. 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 the briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recommended Order of the Trial Examiner and hereby orders that the Respondent, Stockton District Kidney Bean Growers, Inc., Linden, California, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. ' The Trial Examiner's Decision contains minor inadvertent errors which do not affect our ultimate findings We hereby correct the third paragraph in the "Analysis and Conclusions" portion of the Trial Examiner's Decision by deleting the word "March" in two instances and inserting the word "May" instead TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE MARTIN S. BENNETT, Trial Examiner : This matter was heard at Stockton , California , on December 20, 1966. The 223 complaint' alleges that Respondent, Stockton District Kidney Bean Growers, Inc., had engaged in unfair labor practices within the meaning of Section 8(a)(5) and, derivatively, Section 8(a)(1) of the Act. Briefs have been submitted by all parties. Upon the entire record in the case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. JURISDICTIONAL FINDINGS Stockton District Kidney Bean Growers , Inc., is a California corporation engaged in the processing and distribution of beans at Linden, California . It sells goods and services valued in excess of $50,000 per annum directly to customers located outside the State of California . I find that the operations of Respondent affect commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Packers and Farm Production Workers Local No 604, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Introduction, The Issue The Union and Respondent were signatory to a collective-bargaining agreement for the period from March 2, 1965, through May 31, 1966. The General Counsel contends that during negotiations for a succeeding contract, Respondent rejected the Union's request for information in support of Respondent's claim of inability to pay increased wages and benefits and that this information was relevant and necessary to collective bargaining. Respondent admits that it refused the Union's request to open its books; concedes that financial and wage data must be disclosed when an employer pleads inability to pay; but, in effect, denies that it pleaded inability to pay during these negotiations. Respondent contends rather that it merely pleaded its unwillingness to pay during the negotiations. B. Refusal to Bargain 1. Majority representation in the appropriate unit The complaint alleges, Respondent admits, and I find that all production and maintenance employees of Respondent at its plant at Linden, California, excluding office clerical and professional employees, guards, and supervisors, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. The complaint further alleges, Respondent admits, and I find that since March 2, 1965, and at all material times thereafter, the Union has been and now is the representative of the employees in the above-described ' Issued August 30 and based upon a charge filed June 2. 1966, by Packers and Farm Production Workers Local No 604, Amalagmated Meat Cutters & Butcher Workmen of North America, AFL-CIO, herein called the Union 165 NLRB No. 32 224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD appropriate unit within the meaning of Section 9(a) of the Act. 2. Sequence of events The course of negotiations for a new contract is set forth below. While there are some conflicts, a resolution is not necessary for the evidence is ultimately considered in the light most favorable to Respondent; in that posture, a preponderance of the evidence supports the position of the General Counsel. The first negotiating meeting was held on April 13, with Manager Jack Lyons of Respondent; Executive Vice President Roderick Barklow of San Joaquin Employers Council, to which Respondent belongs for the purposes of collective bargaining; and Ynez Aguilar, president of the Union, participating. At this meeting, according to Aguilar, the Union asked for a number of improvements in working conditions, these including a union-shop clause; improved vacation and health and welfare benefits; and wage increases. Barklow stated that there was no money available for any wage increases because Respondent was receiving $13.75 per sack for beans as contrasted with $14.75 in the previous year. As I read the testimony of the witnesses for Respondent, this drop in prices was first raised at a meeting held on May 25. At the next meeting on April 27, according to Aguilar, Respondent proposed a change in the wages of lift drivers. It would seem that the drivers, under this proposal, would have made less money because a new classification of head lift driver at $1.90 per hour rather than $1.80 per hour was set up, but concomitant therewith Respondent proposed to reduce the wage rate of the lift driver to $1.50 per hour for the first 60 days and thereafter to $1.60, as contrasted with the old rate of $1.80 after the first 60 days. Contrary to Lyons, Aguilar contended that Lyons was present at this meeting. The next meeting was held on May 16 with Aguilar, Lyons, and Barklow present. Aguilar presented the Union's request for overtime for hours over 40 per week; paid holidays; health and welfare benefits; a union shop; and a checkoff of dues. According to Lyons, there was much talk but no agreement reached on this date. Barklow testified that Respondent then submitted its proposal for the lift drivers, described above. The parties next met on May 25. According to Aguilar, Respondent rejected the Union's proposal for a union shop. Respondent announced that it could not offer a wage increase because the price of beans in 1966 had dropped to $13.75 per sack, as contrasted with the 1965 price of $14.75 per sack. Lyons testified that he announced at this meeting that "We were in no mood for an increase in operating expenses" because of the drop in prices and "we did not see where it would be reasonable to increase our operating costs ..." As Barklow put it, "We would not be willing to make a general wage increase nor would we be willing to agree to fringe costs which the Union had proposed. And that meeting broke up...." Respondent offered only the new forklift scale and a minor change in seniority rules. The parties last met on May 31 under the auspices of a California State conciliator who caucused separately with them. Also present for the Union, and leading the discussion, was General Organizer Harold Benninger. The Union renewed its original proposals and, according to Lyons and Barklow, Lyons again stated that the farmers were in no "mood" to increase operating costs due to the drop in the price of beans. Later in the meeting, according to Benninger, he asked for an immediate 5-cent raise, the effect of which would have been minor because of the customary summer shutdown, and another in September; this was refused by Barklow. Benninger and Aguilar testified that, at this meeting, Benninger asked Barklow if Respondent was pleading "inability to pay" and Barklow replied in the affirmative. The latter, in turn, testified that he was well aware that this was a meaningful term which might subject his client to a Board order to bargain, that he deliberately refrained from its use, and that he answered the question in the negative. For reasons which appear below, I consider it unnecessary to resolve this conflict. Benninger and Barklow do agree that Benninger asked to inspect the company "books," following Respondent's refusal to make the requested increases, and that Barklow refused. I find that the Union was thereby seeking data in support of Respondent's position which was not available to the Union. 3. Analysis and conclusions Respondent has directed attention in its brief to an administrative decision by the General Counsel of the Board in 1959 wherein a plea of unwillingness to pay was treated as not constituting an unfair labor practice. NLRB General Counsel Administrative Ruling, No. F-1070. But, if I read and interpret current Board decisions correctly, the Board looks to the meat of the situation rather than to magic words in evaluating bargaining negotiations. In pure logic, I am unable to distinguish between a situation where an employer contends that it is unable to pay wage or fringe increases and one where it contends, as is the case here, that it is in "no mood" to pay increased benefits because of a claimed drop in prices, presumably with a resulting increase in operating costs and lack of funds. I am at a loss to appreciate any substantial distinction between the two terms; on either posture, the employer is equally unwilling to justify its position. Turning to the admitted testimony of Barklow and Lyons, Lyons stated on March 31, as he had on March 25, that the farmers who owned Respondent were in "no mood" to approve increases in operating costs because the price of beans had dropped $1 a sack for the current crop. Assuming this to be so, viz, that the price of beans had dropped from $14.75 to $13.75 per sack, one is immediately struck with the fact that this ignores another factor; obviously, the number of sacks sold in 1966, as contrasted with the number of sacks sold in 1965, is a cogent factor for consideration and evaluation because this would affect gross receipts and presumably the level of profits as well as available funds. In essence, then, I am unable to distinguish the language used by Respondent here from a plea of inability to pay. A declaration of "no mood" to pay wage increases, predicated on a drop in receipts, is therefore more than a naked unwillingness to pay and is tantamount to a plea of inability to pay. Respondent then proceeded to refuse to document its position, thus precluding the Union from presenting evidence that Respondent could afford the increase. See International Telephone and Telegraph Corp., 159 NLRB 145 (1966). The Board had approved language that "if granting economic benefits would, according to the Respondent, have the effect of reducing its competitiveness, it follows that the Respondent was asserting its financial inability to grant economic benefits." Wheeling Pacifiic Company, 151 NLRB 1192, 1225 (1965). See Peerless Distributing Co., STOCKTON DISTRICT KIDNEY BEAN GROWERS 144 NLRB 1510; Cincinnati Cordage and Paper Company, 141 NLRB 72; Tennessee Chair Company, Inc., 126 NLRB 1357; Celotex Corp., 146 NLRB 48; and West Side Transfer Co., 162 NLRB 699. As stated by the Court of Appeals for the Ninth Circuit in N.L.R.B. v. Western Wirebound Box Co., 356 F.2d 88: the principle announced in Truitt [N.L.R.B. v. Truitt Manufacturing Co., 351 U.S. 149] is not confined to cases where the employer 's claim is that he is unable to pay the wages demanded by the union. That sort of claim , rather, was held to be covered by the stated broad principles that good -faith bargaining necessarily requires that claims made by either bargainer should be honest claims, and that if an argument is important enough to present during bargaining sessions, it is important enough to require substantiation. We see no reason why, under the same rationale, an employer who insistently asserts that competitive disadvantage precludes him from acquiescing in a union wage demand, does not have a like duty to come forward, on request, with some substantiation. In both cases, the give-and-take of collective bargaining is hampered and rendered ineffectual when an employer mechanically repeats his claim but makes no effort to produce substantiating data. In one case as well as the other this sort of conduct runs counter to section 204(a)(1) of the Act, 61 Stat. 154 (1947), 29 U.S.C. § 174( a)(1)(1964), which admonishes both employers and employees to "exert every reasonable effort to make and maintain agreements concerning rates of pay, hours , and working conditions." It is true that in Taylor Foundry Company, 141 NLRB 765, 767, enforced per curiam , N.L.R.B. V. Taylor, 5 Cir., 338 F. 2d 1003, and Metlox Mfg. Co., 153 NLRB 1388 , the view is expressed that the principle announced in Truitt applies only where the employer claims inability to pay. However, the Board has a right to change its view as long as its new position is not erroneous . As previously indicated, we are of the opinion that the Board did not err here in giving a broader scope in the Truitt rule. [Emphasis supplied.] I find, on the fact of the testimony presented by the witnesses for Respondent , that Respondent, in effect, pleaded inability to pay or made a plea of equal scope at the bargaining sessions held on May 25 and 31, 1966. I further find that on May 31, it refused to document its position in support of this claim and that it has thereby refused to bargain in good faith within the meaning of Section 8(a)(5) and , derivatively , Section 8(a)(1) of the Act. See N.L.R.B. v. Celotex Corp., 364 F.2d 552 (C.A. 5). IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the Respondent's operations described in section I, above, have a close, intimate , and substantial relationship 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, I shall recommend that it cease and desist 225 therefrom and take certain affirmative action designed to effectuate the policies of the Act. Upon the basis of the foregoing findings of fact, and upon the entire record in the case , I make the following: CONCLUSIONS OF LAW 1. Packers and Farm Production Workers Local No. 604 , Amalgamated Meat Cutters & Butcher Workmen of North America , AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 2. Stockton District Kidney Bean Growers, Inc., is an employer within the meaning of Section 2(2) of the Act. 3. All production and maintenance employees of Respondent at its Linden , California , plant, excluding office clerical and professional employees , guards, and supervisors , constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Packers and Farm Production Workers Local No. 604, Amalgamated Meat Cutters & Butcher Workmen of North America , AFL-CIO, at all times material herein has been and now is the exclusive representative of the employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing on May 31, 1966 , to bargain collectively with the Union as the exclusive representative of its employees in the aforesaid appropriate unit , Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a)(5) and , derivatively, Section 8(a)(1) of the Act. 6. The aforesaid unfair labor practices 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 and conclusions of law, it is recommended that Respondent, Stockton District Kidney Bean Growers , Inc., Linden, California, its officers , agents, successors , and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Packers and Production Workers Local No. 604, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO , as the exclusive representative of its production and maintenance employees, by refusing, upon request, to furnish said Union with such record information and other probative material as will substantiate its claim of reduced receipts and inability to pay increased wages and benefits and will enable said Union to discharge its function as the statutory representative of these employees. (b) In any like or related manner interfering with the efforts of said Union to bargain collectively on behalf of the employees of Respondent. 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Upon request, furnish said Union with such record information and other probative material as will substantiate Respondent's claim of reduced receipts and inability to pay increased wages and benefits and will enable said Union to discharge its function as the statutory representative of these employees. (b) Post at its plant at Linden, California, copies of the 226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD attached notice marked "Appendix."2 Copies of said notice, to be furnished by the Regional Director for Region 20, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 20, in writing, within 10 days from the date of this Recommended Order, what steps have been taken to comply herewith.3 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 Relations Act, as amended, we hereby notify our employees that: WE WILL NOT refuse to bargain with Packers and Farm Production Workers Local No. 604, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, as the representative of our employees in the unit described below. The bargaining unit is: e 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 All production and maintenance employees, excluding office clerical and professional employees , guards, and supervisors. WE WILL, upon request, furnish the above-named labor organization with such record information and other probative material as will substantiate our claim of reduced receipts and inability to pay increased wages and benefits. WE WILL NOT in any like or related manner interfere with , restrain, or coerce our employees in the exercise of the rights guaranteed by Section 7 of the Act, except to the extent permitted under Section 8(a)(3) of the Act. STOCKTON DISTRICT KIDNEY BEAN GROWERS, 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, 450 Golden Gate Avenue, Box 36047, San Francisco, California 94102, Telephone 556-3197. be substituted for the words "a Decision and Order " ' In the event that this Recommended Order is adopted by the Board , this provision shall be modified to read "Notify said Regional Director , in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith "