Washington Hardware and Furniture Co.

GRAVENSLUND OPERATING CO. Gravenslund Operating Company d/b/a Washington Hardware and Furniture Co. and Retail Clerks Union No. 1612, Retail Clerks International As- sociation, AFL-CIO. Case 19-CA-3368 November 27, 1967 DECISION AND ORDER BY MEMBERS BROWN, JENKINS, AND ZAGORIA Upon charges filed in behalf of Retail Clerks Union No. 1612, Retail Clerks International As- sociation, AFL-CIO, hereinafter called the Union, the General Counsel for the National Labor Rela- tions Board, by the Regional Director for Region 19, issued a complaint against Gravenslund Operat- ing Company d/b/a Washington Hardware and Fur- niture Co., hereinafter called the Respondent, alleg- ing that the Respondent had engaged in and was en- gaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended. The Respondent filed an answer denying the commission of the alleged unfair labor practices. Copies of the charges, com- plaint and notice of hearing, and answer were duly served upon the parties. On September 22, 1966, all parties to this proceeding executed a stipulation in lieu of hearing to the Trial Examiner for findings of fact, conclu- sions of law, and decision. The stipulation states, in substance, that the parties agreed to submit the con- troversy for decision by the Trial Examiner in a completely stipulated statement of facts, that no oral testimony is desired by any of the parties, and that the charges, complaint and notice of hearing, answer, and the stipulation in lieu of hearing, together with certain exhibits, constitute the entire record in this case. Also on September 22, 1966, the Trial Examiner approved the stipulation, received the exhibits into evidence, set a date for the filing of briefs, and closed the hearing. On November 29, 1966, Trial Examiner David F.Doyle issued his Decision in the above-entitled proceeding, recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the Union filed exceptions to the Decision together with a sup- porting brief. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connec- tion with this case to a three-member panel. The Board has considered the stipulation in lieu of hearing, the Trial Examiner's Decision, the ex- ceptions and brief, and the entire record in this case, and hereby adopts the findings of the Trial Ex- aminer only to the extent consistent herewith. The record, as stipulated, establishes that in each year from 1950 through 1964, the Respondent has paid its employees a Christmas bonus computed on 513 the basis of the Respondent's evaluation of the ser- vices rendered by the recipients thereof. In 1965, however, subsequent to the events set forth below, the Respondent did not pay such a bonus. The record discloses that on July 27, 1964, the Union was certified as collective-bargaining representative of certain of the Respondent's em- ployees in an appropriate unit. Thereafter, the parties entered into negotiations for a collective- bargaining agreement. Although the record is silent with regard to the subjects discussed during negotiations, it does show that the Respondent's policy of paying bonuses was not discussed. Sub- sequently, on November 18, 1965, the parties en- tered into a 3-year agreement effective as of May 11,1965. The agreement provides, inter alia, for increases in wages and fringe benefits and also contains an ap- pendix which, after setting forth the classifications of employment, rates of pay, and a commission sales schedule, states that "It is expressly un- derstood that employees receiving more than the minimum compensation or enjoying more favorable working conditions than provided for in this agree- ment shall not suffer by the reason of its signing or adoption." The agreement also contains a grievance procedure which provides for binding arbitration on all matters pertaining to the proper application and interpretation of any and all of the provisions of this Agreement." Sometime during 1965, the Respondent uni- laterally decided that its economic position did not justify the payment of Christmas bonuses and, without notice to or consulation with the Union, refused to pay a 1965 Christmas bonus to the unit employees. Thereafter, the Union, through its secretary-treasurer, sent a letter captioned "Con- tract Interpretation" to the Respondent which stated that the appendix to the agreement "cover(s) any additional benefits and compensation not specifically outlined in the Agreement" and requested the reestablishment of, and discussion pertaining to, the discontinued "end of the Year bonuses." In its reply, the Respondent stated, inter alia, that it had no bonus program, but merely in- dulged in the right to "give gifts" when so moved. The Union then sent a letter to the manager of As- sociated Industries (apparently an employer representative) in which the Union's position as set forth above was iterated and requested advice as to how to resolve the problem. In his reply, As- sociated Industries' manager stated, in effect, that he assumed that Respondent's Christmas bonuses were "discretionary bonuses" which an employer was free to discontinue "if, in his judgment, he found it was no longer serving a useful purpose." There is no indication in the record that the Respondent's refusal to pay the 1965 Christmas bonus was subjected to or processed through the contractual grievance procedure. 168 NLRB No. 72 514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Trial Examiner, relying primarily on the Square D Co. case,' found, in effect, that the collec- tive-bargaining agreement between the Respondent and the Union is subject to conflicting interpreta- tions as to whether it covers the payment of Christ- mas bonuses, that the Board is without authority to interpret the agreement, and that the parties' con- tractual grievance procedure and not the Board is the proper forum for interpreting this primary con- flict which must be resolved in order to establish the possible existence of the alleged unfair labor prac- tices. The Trial Examiner concluded that because the parties have not resolved this conflict through the contractual grievance procedures, the Board lacks jurisdiction in the instant case because, in ef- fect, it has no cause of action before it, and, there- fore, cannot consider or determine whether the Respondent, by unilaterally deciding to discon- tinue, and by unilaterally discontinuing, the pay- ment of Christmas bonuses formerly paid to its em- ployees in the appropriate unit, violated Section 8(a)(1) and (5) of the Act. We do not agree. Contrary to the Trial Examiner, this is not a case in which the existence of alleged unfair labor prac- tices turns on an interpretation of the parties' col- lective-bargaining agreement. The issue presented for our consideration is simply whether the Re- spondent acted unlawfully by unilaterally discon- tinuing the payment of Christmas bonuses to unit employees without notice to or consultation with the Union. Resolution of this issue does not require an interpretation of the contract. Nor would the Board be divested of jurisdiction to adjudicate this dispute even if a construction of the contract was necessary in order to determine whether the Act has been violated.2 Having decided that the Board possesses the authority to act in this proceeding, we now turn to a consideration of whether the Respondent violated the Act. It has long been held that Christmas bonuses which are not gratutities and which have been paid with regularity over extended periods of time are not only an integral part of the wage structure, but also constitute a mandatory subject of bargaining.3 In view of the Respondent's regularity in the pay- ment of such bonuses over 15 consecutive years, we are persuaded that the Christmas bonuses are not mere gifts or "discretionary" bonuses4 as claimed, and that, as also has long been established, the Respondent's employees had the right to expect and rely on the continuation of such bonus pay- ments as part of their wages.5 It then follows that since the subject of Christmas bonuses was not discussed during negotiations and because the con- tract does not contain an express provision granting the Respondent the right to take unilateral action with regard thereto, the Respondent was under a statutory duty to bargain about its decision to dis- continue, and its discontinuance of, its past practice of paying such annual bonuses.6 The Respondent's unilateral actions which resulted in changes in the wages and terms of employment of its em- ployees, therefore, even though such actions may not have been taken in bad faith, violate its statuto- ry bargaining obligation.7 Accordingly, we find that the Respondent, by unilaterally deciding to discon- tinue, and by unilaterally discontinuing, the pay- ment of Christmas bonuses in 1965 to its employees in the appropriate unit, violated Section 8(a)(1) and (5) of the Act. We shall therefore order the Respondent to make its employees whole for the monetary loss suffered by them as a result of the unlawful withholding of the 1965 Christmas bonus, the amount of loss to be determined by the formula, as nearly as can be ascertained, used in making bonus payments in previous years,8 with interest at the rate of 6 per- cent per annum.9 THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in con- nection with its operations 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 thereof. THE REMEDY Having found that the Respondent has engaged in unfair labor practices within the meaning of Sec- tion 8(a)(1) and (5) of the Act, we shall order the Respondent to cease and desist therefrom and take certain affirmative action which we find necessary to effectuate the policies of the Act. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, the Board makes the following: 1 Square D Co. v N.L.R B., 332 F 2d 360 (C A. 9) Cf. N.L.R.B v. C & C Plywood Corporation, 385 U.S. 421,428-429. N.L.R.B. v Niles-Bement-Pond Company, 199 F 2d 713, 714 (C.A. 2), Zelrich Company, 144 NLRB 1381, enfd 344 F 2d 1011 (C.A. 5), Century Cement Manufacturing Company, 100 NLRB 1323 4 General Telephone Company of Florida, 144 N LRB 311, 313; The American Lubricants Company, 136 NLRB 946. W. W. Cross and Company v N.L R.B , 174 F.2d 875 (C.A. 1). New Orleans Board of Trade, Ltd., 152 N LRB 1258, Leroy Machine Co., Inc, 147 NLRB 1431, Jacobs Manufacturing Co, 94 NLRB 1214. 1 N.L R B. v. Katz , d/bla Williamsburg Steel Products Co., 369 U S. 736. " Although some difficulty may be encountered in computing the em- ployees' loss as a result of the Respondent's unfair labor practices, this is not a legitimate reason for denying them all compensation . The formula to be used in determining the amount of compensation due to the employees can be determined by agreement of the parties , or, if necessary, in a backpay proceeding. American Fire Apparatus Company, 160 NLRB 1318. 9 Isis Plumbing & Heating Co, 138 NLRB 716, Zelrich Company, supra GRAVENSLUND OPERATING CO. 515 CONCLUSIONS OF LAW 1. Gravenslund Operating Company d/b/a Washington Hardware and Furniture Co. is en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Retail Clerks Union No . 1612 , Retail Clerks International Association , AFL-CIO, is a labor or- ganization within the meaning of Section 2(5) of the Act. 3. All full-time and regular part-time employees employed by the Respondent at its retail outlet at 6 West Kennewick Avenue, Kennewick , Washing- ton, exclusive of guards and supervisors as defined in the Act, constitute a unit appropriate for the pur- poses of collective bargaining without the meaning of Section 9(b) of the Act. 4. The Union is, and at all times since July 27, 1964, has been, the exclusive certified representa- tive of all employees in the aforesaid unit for the purposes of collective-bargaining with respect to rates of pay, wages , hours of employment, and other terms and conditions of employment. 5. By unilaterally deciding to discontinue, and by unilaterally discontinuing, the payment of Christmas bonuses in 1965 to its employees in the appropriate unit , the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) 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. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Gravenslund Operating Company d/b/a Washington Hardware and Furniture Co., Kennewick, Wash- ington, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with the Union with respect to Christmas bonuses or any other term or condition of employment by uni- laterally effectuating changes in bonus payments or any term or condition of employment of its em- ployees in the appropriate bargaining unit in deroga- tion of the rights of the Union or any other labor or- ganization which employees may select as their ex- clusive bargaining representative. (b) In any like or related manner interfering with the rights of employees guaranteed in Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Pay to each of its employees in the ap- propriate unit the amounts due them for the 1965 Christmas bonus, to be computed in the manner set forth in this Decision and Order. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security pay- ment records, timecards, personnel records and re- ports, and all other records necessary to analyze the amount of backpay due under the Decision and Order. (c) Post at its place of business in Kennewick, Washington, copies of the attached notice marked "Appendix."10 Copies of said notice, on forms pro- vided by the Regional Director for Region 19, after being duly signed by Respondent's authorized representative, shall be posted by it 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 shallbe taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. MEMBER BROWN, dissenting: My colleagues conclude that the bonus matter in- volves an unfair labor practice within the Board's competency to resolve and that such resolution does not require an interpretation of the parties' -contract. The Trial Examiner, on the other hand, was of the opinion that the dispute exclusively in- volves a question of contract interpretation to be handled under the grievance and arbitration provi- sions of the operative agreement and that the Board was therefore without jurisdiction in the premises. The C & C Plywood and Acme Industrial cases cited by my colleagues should remove any doubt concerning the Board's authority to entertain this proceeding , and I join my colleagues in so finding. These Supreme Court decisions , it may be noted, were handed down after the Trial Examiner had is- sued his Decision herein. But I do agree with the Trial Examiner's finding of a contract dispute to which the grievance-arbitration provisions are ap- plicable. Although agreeing with the majority that the Board is empowered to act in this case, I would not reach the merits at this time. For, in situations of the sort involved here , it is my view that the Board should hold the case in abeyance pending utilization by the parties of their own grievance -arbitration method of resolving disputes . This procedure, I be- lieve , would best effectuate the statutory policy of promoting industrial peace and stability through the collective-bargaining process. l1 10 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals En- forcing an Order " 11 See my dissenting opinion in Thor Power Tool Company, 148 N LRB 1379,1381-83 336-845 0 - 70 - 34 516 DECISIONS OF NATIONAL APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT refuse to bargain collectively with Retail Clerks Union No. 1612, Retail Clerks International Association, AFL-CIO, by unilaterally changing Christmas bonuses or any other terms or conditions of employment of any employee in the appropriate bargaining unit in derogation of the rights of the Union. WE WILL NOT engage in any like or related conduct which interferes with, restrains, or coerces you in the exercise of the rights guaranteed you in Section 7 of the Act. WE WILL pay the 1965 Christmas bonus to our employees in the appropriate unit, with in- terest thereon at the rate of 6 percent per an- num. The appropriate unit is: All full-time and regular part-time em- ployees employed by the Respondent at its retail outlet at 6 West Kennewick Avenue, Kennewick, Washington, excluding guards and supervisors as defined in the Act. GRAVENSLUND OPERAT- ING COMPANY D/B/A WASHINGTON HARD- WARE AND FURNITURE Co. (Employer) Dated By (Representative) (Title) This notice must remain posted for 60 consecu- tive 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, 327 Logan Building, 500 Union Street, Seattle , Washington, Telephone 583-45 32. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE DAVID F. DOYLE, Trial Examiner: This proceeding, with all parties represented by counsel, was heard in Richland, Washington, on September 22, 1966, on com- plaint of the General Counsel and answer of the Respond- ent. The issue submitted for decision was whether the Respondent had violated Section 8(a)(1) and (5) of the LABOR RELATIONS BOARD National Labor Relations Act, as amended, by the Respondent's conduct in changing in December 1965, its policy of paying its employees a Christmas bonus, without notification to the Union and without bargaining with the Union on the subject of this change. i At the opening of the hearing herein on September 22, 1966, all counsel informed me in open court that they had agreed to a stipulation as to certain basic facts in the case and that, if I gave them additional time to confer, they might agree on additional stipulations which would sub- mit the controversy for decision on a completely stipu- lated statement of fact. I granted the request for addi- tional time and after conference of all counsel and those parties who were in attendance, all counsel informed me that they were willing to submit the issue for decision on a complete stipulation of fact. Thereafter, by agreement of counsel a document enti- tled, "Stipulation In Lieu of Hearing" was received in evidence. The document was signed by all counsel. The stipulation referred to a labor agreement between the Union and the Company, dated November 18, 1965 (Exh. 1) and to certain letters (Exhs. 3, 4, 5, and 6). The stipulation also referred to a document entitled "Com- parative Statement of Payroll Costs for Employees Sub- ject to Collective Bargaining." This was received in evidence as Exhibit 2. These documents will be set forth at length, hereinafter. After receipt of the documents, counsel for each party made a short statement of his contention on the issue. I approved of the stipulation, received the specified documents in evidence, and set a date for the filing of briefs. At that point the hearing was closed. Thereafter the General Counsel and counsel for the Company filed briefs which have been carefully con- sidered. FINDINGS OF FACT 1. THE BUSINESS OPERATIONS OF RESPONDENT The above-mentioned stipulation sets forth the follow- ing facts concerning the business operations of the Com- pany: 4. Respondent is, and has been at all times materi- al herein, a corporation duly organized under, and existing by virtue of, the laws of the State of Washington. Respondent is engaged at Kennewick, Washington in the retailing of general merchandise. 5. During its past fiscal year, Respondent, in the course and conduct of its retail store in Kennewick, Washington, had gross sales exceeding $500,000. During the same period, Respondent purchased and received at its Kennewick store goods and material 1 The charge herein was filed on April 14, 1966, by Thomas K. Cassidy attorney for the, Charging Party. The charge was amended on June 20. 1966, by Dorthey Harrold, an officer of the Union. The complaint herein was issued by the Regional Director for Region 19, Seattle, Washington, on June 27 , 1966 In this Decision, Retail Clerks Union No. 1612 , Retail Clerks International Association , AFL-CIO, is referred to as the Union; Gravenslund Operating Company d/b/a Washington Hardware and Fur- niture Co as the Company; the General Counsel of the Board and his representative at the hearing as the General Counsel ; the National Labor Relations Board as the Board , and the Labor Management Relations Act, 1947, as amended, as the Act GRAVENSLUND OPERATING CO. 517 from directly outside the State of Washington valued in excess of $50,000. 6. Respondent is, and has been at all times materi- al herein, an employer within the meaning of Section 2(2) of the Act, engaged in commerce within the meaning of Section 2(6) and (7) of the Act. H. THE LABOR ORGANIZATION INVOLVED Paragraph 7 of the stipulation reads as follows: 7. The Union is, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issue The issue in this case is whether or not the Respondent violated Section 8(a)(1) and (5) of the Act, refusing to bargain, by its conduct in circumstances stated in the stipulation hereafter set forth. B. The Stipulation of Fact in Lieu of Hearing Certain paragraphs set forth in the stipulation in regard to the business of the Respondent and the labor organiza- tion involved herein , have previously been set forth. The remainder of the stipulation of the parties reads as fol- lows: 1. The parties agree that the charge , amended charge, Complaint and Notice of Hearing, Answer, and this "Stipulation," together with the exhibits at- tached thereto, shall constitute the entire record in the case upon approval by a Trial Examiner of this Stipulation. 2. In the event a Trial Examiner approves this Stipulation, the parties request that he set a time for the filing of briefs. 3. Upon a charge filed by the Union on April 15, 1966, and amended on June 20, 1966, the General Counsel for the National Labor Relations Board, by the Regional Director for Region 19, issued a com- plaint on June 27, 1966 against Respondent . Copies of the complaint and charges were duly served upon Respondent. * 8. On July 27, 1964, in Case 19-RC-3468, the Union was certified by the National Labor Relations Board as the representative for the purposes of col- lective bargaining of the employees of Respondent in the following unit: All full time and regular part time employees employed by the Employer at its retail outlet at 6 West Kennewick Avenue, Kennewick, Washington, excluding guards and supervisors as defined in the Act. 9. The above described unit is now , and has been at all times material herein , an appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 10. Since about 1950 and prior to 1965 Respond- ent has paid to its employees in the unit described above in Paragraph 8 shortly before Christmas each year a bonus in the form of a check. The amount of the check for each employee has varied from year to year. Some employees have received a greater amount than other employees. The amount was not based upon profit, sales , or any particular formula, but the Respondent attempted to adjust the amount according to the value of each employee 's services to the Respondent. None of the employees were told at or prior to hiring that they would be paid a Christmas bonus. 11. On November 18, 1965 Respondent and the Union entered into a collective-bargaining agreement (Ex. No. 1). Respondent's policy of paying bonuses to its employees was not discussed in negotiations for the collective -bargaining agreement. 12. Respondent by entering into the collective- bargaining agreement referred to above in Paragraph 11 granted certain increases in wages and fringe benefits which increased costs to Respondent are summarized in Ex. No. 2. 13. In the year 1965 Respondent decided that its economic position did not justify the payment of Christmas bonuses. Respondent failed to pay said bonuses without giving notice to or offering to bar- gain with the Union concerning its decision. 14. On or about February 24, 1966, the Union, by letter (Ex. No. 3) requested that the bonus be reestablished. 15. On or about March 16, 1966, Respondent, by letter (Ex. No. 4) replied to the Union 's letter. 16. On or about March 22, 1966, the Union wrote a letter (Ex. No. 5) to Associated Industries of the Inland Empire, the Respondent 's representative for labor relations matters. 17. On or about March 25, 1966, Associated In- dustries of the Inland Empire replied (Ex. No. 6) to the Union's letter referred to in Paragraph 16 above. 18. Respondent continues to refuse to pay any Christmas bonuses to its employees for the year 1965. 19. This Stipulation is made without prejudice to any objection that any party hereto may raise in its brief to the Board as to the materiality or competen- cy of any facts stated herein. The above stipulation was executed on September 22, 1966, by Wesley M. Wilson , counsel for the General Counsel, James M. Koonz, counsel for Respondent, and Thomas K. Cassidy, counsel for the Charging Party. As stated in the stipulation it is undisputed that on November 18, 1965, the Company and the Union en- tered into a collective-bargaining agreement. The con- tents of this contract may be summarized in this report with the exception of one paragraph which is referred to in the correspondence between the parties, and an article setting up a grievance and arbitration procedure which I deem important to a proper resolution of the question in this case. Article I, Recognition and Bargaining Unit, states that the employer recognizes the Union as collective -bargain- ing representative for the employees in the appropriate unit. The Union agrees to furnish the Company with a union store card for display in the store. Article II, Union Security, provides that all employees of the Company shall become members of the Union on the 30th day following the date of employment, and shall remain members in good standing thereafter. The em- ployer will take steps to discharge employees, upon request of the Union , who fail to fulfill the financial aspect of membership in the Union . The employer also 518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agrees to furnish to the Union a list of the names of em- ployees employed, each 30 days. Article III, Discharge and Discrimination, states that the employer shall be the sole judge as to the competency and qualifications of employees. It also states that no em- ployee shall be discharged or discriminated against because of lawful union activity or for reporting to the Union a violation of the contract. The employer further, agrees that no employee shall be laid off while on vaca- tion. Article IV, Hours of Work - Work Week, provides for a 40-hour workweek for employees in giftware, housewares, small appliances, etc. It provides for a slid- ing scale of number of hours per workweek in the initia- tion of contract conditions. It sets. different hours for the workweek of employees in sporting goods, hardware, paints, etc. Article V, Work Schedules - Rest Periods, states that there will be regular work schedules, with rest periods in conformity with law, regular paydays, etc., and a lunch period of 30 minutes minimum and 1 hour maximum. Article VI, Holidays, states that there shall be six holidays for which the employee will be paid provided the employee meets certain preexisting conditions. Article VII, Vacations, sets up a system of vacations of various lengths based upon the hours which the em- ployee has worked in the previous month. Article VIII, General Conditions, states certain arti- cles of clothing will be furnished by the employer and laundered by the employee, and a procedure for visitors to employees during working hours, etc. Article IX, Grievances and Arbitration, is important to the resolution of the issue here presented so it is set forth in its entirety. ARTICLE IX Grievances andArbitration Section 1. All matters pertaining to the proper ap- plication and interpretation of any and all of the provisions of this Agreement shall be adjusted by the accredited representative of the Employer and the accredited representative of the Union. In the event of the failure of these parties to reach a satisfactory adjustment within seven (7) days from the date a grievance is filed in writing by either party upon the other, the matter shall be referred for final adjust- ment to a labor relations committee selected as fol- lows: Two (2) members from the Employer and two (2) members from the Union. In the event that the labor relations committee fails to reach an agreement within twenty-one (21) days from the date a grievance is filed in writing by either party upon the other, the four (4) shall select a fifth member or they shall request the Federal or State Mediation and Conciliation Service to submit a list of five (5) names of qualified arbitrators, from which the labor rela- tions committee shall select a fifth member, who shall be chairman, and the decisions of this commit- tee shall be binding on both parties. [Emphasis supplied.] Section 2. The Board shall meet and hand down a decision within five (5) days after completion of the hearing, which shall be final and binding on both parties. Any expense incurred jointly, through ar- bitration, shall be borne equally by the parties hereto. [Emphasis supplied.] Section 3. There shall be no strike, lockout or other economic action arising from the matter being ar- bitrated nor during the arbitration proceedings. Section 4. It is distinctly understood and agreed that the Board of Arbitration is not vested with the power to change, alter, or modify this Agreement in any of its parts. The arbitrator shall not decide on any subject, the condition of which is not specifically provided in this Agreement. [Emphasis supplied.] Section 5. In order to be recognized, all claims of violation must be made in writing thirty (30) days from the pay day such violation occurs. Said claims to be limited to the amount involved in the sixty (60) days, except in those cases where reports of viola- tions have been suppressed through coercion by the Employer. Article X, Savings Clause, provides for partial illegality of the contract. Article XI, No Strikes or Lockouts, states that during the life of the agreement there will be no strikes or lockouts. Article XII, Sick Leave - Jury Duty - Insurance, states procedures for employees in regard to these sub- jects. Article XIV, Duration, states the contract shall be in affect from May 11, 1965, to May 11, 1968, and thereafter from year to year unless 60 days' written notice of modification is given by either party prior to the an- niversary date. The contract is executed at this point by representa- tives of the parties. Attached to the contract is an appendix which sets forth the classification of employment and rates of pay. The second part of this document sets forth a commission sales schedule which sets forth the rate of commission on furniture and on major appliances, etc. At the end of this document there is the following paragraph which is referred to in the correspondence of the parties and is also very pertinent to the issue here involved: It is expressly understood that employees receiving more than the minimum compensation or enjoying more favorable working conditions than provided for in this Agreement shall not suffer by the reason of its signing or adoption. The exhibits mentioned in the stipulation are not lengthy so I will set them out in their entirety. These ex- hibits will be set forth in chronological order. On February 24, 1966, Dorthey Harrold, secretary- treasurer of the Union wrote the following letter to John Gravenslund of the Company. Mr. John Gravenslund Washington Hardware & Furniture 6 W. Kennewick Avenue Kennewick, Washington Re: Contract Interpretation Dear Mr. Gravenslund: We seem to have a misunderstanding concerning PM's, Spiffs, etc., concerning Commission GRAVENSLUND OPERATING CO. 519 Salesmen. My files show that I contacted Mr. Lyon on September 7 concerning the issue hoping that it would be corrected. I refer you to the last paragraph of page 10 of the Agreement. It is our position that this language does cover any additional benefits and compensation not specifically outlined in the Agreement. I also understand that the end of the Year bonuses were discontinued for this Year, and I believe the language in the above referenced paragraph also covers this. [Emphasis supplied.] I would request that the above be re-established with no loss to employees. I would be glad to arrange a meeting with Mr. Samish, State Mediator, for discussion if you prefer. Please advise. Very truly yours, Dorthey Harrold the occasion, ability, or the season may move an in- dividual each of us has the right to give gifts, how- ever this is not the right of any individual to expect nor to demand. When good will and respect are abused by the unseeming kind of attack which must have been made to have caused you to contact us on the delicate and personal matter, a breach of faith and loyalty has been exposed as a fault in the think- ing of the individual who has so naively attempted to enrich himself at the expense of anthers good will and generosity. We suspect that you have no other alternative than to contact us on whatever matters are requested of you however as we have stated in the past, we be- lieve that should any matters need our mutual con- sideration and attention we will be always ready and available to discuss them in person. Secretary-Treasurer Sincerely yours, On March 16, 1966, John Gravenslund, secretary-trea- Washington Hardware & surer of the Company, replied to Mrs. Harrold as follows: Furniture Co. Mrs. Dorthey Harrold Secretary-Treasurer Retail Clerks Local 1612 1305 Knight Street Richland, Washington John Gravenslund Secretary-Treasurer On March 22, 1966, Mrs. Harrold, secretary-treasurer of the Union, wrote to Mr. Charles Lyon, Associated In- dustries, as follows: Dear Mrs. Harrold: It is with some concern that I read your letter of February 24, 1966. First I realize that you must deal with all matters that are brought to your attention however I believe that the matters on which you have contacted us are certainly not a question subject to any discussion as a Union matter. You have indicated that you believe the matter of "Spills" comes under the jurisdiction of the contract, however upon anylizing [sic] the very nature of this matter you will find that this cannot be any figment of the imagination be construed as being anything other than the internal business of the management. "Spiff" is the term given to the inducement offered a salesman, or person who "Touts" a certain article or piece of goods to the buying public in preferance [sic] to another item. This method of incentive is used when it is deemed desirable by the management to stimulate sales on a particular item. "Spiffs" are placed on an item and removed from an item as it is deemed necessary and desirable by the management. Even in the matter of ethics it is questionable as to the justification for spiffs in-so-much as this very method of selling precludes the customer from receiving the very best and most factual information from the person who is selling. The other item with which you have been asked to concern yourself happens to impinge on a basic God Given Right which we or any other individual has the right to or not to indulge in. Gift is the proper and only terminology that can be applied to the matter which you have chosen to term "Bonus". We ask that you only investigate the matter stated in your letter and you will find that there is no program which can be termed such. From time to time and as Mr. Charles Lyon Associated Industries 221 Metropolitan Building South 11 Monroe Street Spokane, Washington Dear Chuck: Enclosed, you will find a copy of a letter that I sent to Mr. John Gravenslund, also his reply concerning P.M.'s, Spiffs and punch boards being taken away from the Commission Salesman . In addition, the salesmans [sic] business cards, which had been historically furnished by the Company, were discontinued. All of these changes came about Au- gust 1 , 1965, and I refer you to my letter dated Sep- tember 7 , 1965, to you. Since that date, Christmas bonuses' which had been past practice have been discontinued. It is our position that the Contract language does protect any employee who receives more than the minimum set forth shall not suffer by the signing or adoption of the Agreement. [Emphasis supplied.] We request that you advise us what steps will be taken to resolve these problems. The P.M.'s, Spiffs and punch boards have resulted in approximately $50.00 per month loss to the furni- ture salesman since August first. We urge you to give this request your earliest at- tention as it is overdue. Very truly yours, Dorthey Harrold Secretary-Treasurer On March 25, 1966, Charles R. Lyon, manager, As- 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sociated Industries of the Inland Empire , Spokane, Washington, wrote to Mrs. Harrold as follows: Dorthey Harrold, Secretary-Treasurer Retail Clerks International Association Local Union No. 1612 1305 Knight Street Richland , Washington 99352 Dear Mrs. Harrold: In addition to the communications which I have receivedfrom you, regarding contract interpretation at the Washington Hardware Company, I have also received informationfrom Mr. Gravenslund. I am at a loss to answer your letter as my interpreta- tion of what you have indicated is that the areas over which you express concern seemingly must be within the classification of management perogatives. Specifically, as it would apply to P,M .'s Spiffs and punch boards whatever they may be, or their pur- pose, I would have this to say: "P .M.'s and Spiffs are methods oftentimes used in the retail industry to direct the attention of salespeople to merchandise, which, for one reason or another it is desirable to sell immediately. To the best of my knowledge, which goes back quite a number of years in retailing, I have never known that a P.M. or Spiff was placed in effect with the thought that it would be perpetuated for any particular period of time. If the fee of a P .M. or Spiff is successful, then, the need of this procedure would end with the disposal of the particular item which is receiving the attention. Also, I have no knowledge that it is ever a requirement that an employer operate with a P.M. or Spiff program." If an employer has been furnishing business cards for his sales representatives and he feels that they are no longer needed, so far as I can see, he can discontinue furnishing them. If, however, he required that the employees purchase and use such cards, then, in my opinion, he would be making a request which could not be supported. As to the item of Christmas bonuses. Again; I would say that this is dependent upon the category of bonus that has been used in the past . I am not fully in- formed on this point. However, it is my assumption that this is a discretionary bonus, and, is not directly related to the amount of earnings of the individual employee. If, Mr. Gravenslund has been in the past, paying the discretionary bonus, it would occur to me that it could be discontinued because generally, bonuses are paid for reasons best known to manage- ment. Having some knowledge how bonuses are used in other operations, I do know that this can vary a great deal. Some employers seem to believe that the giving of a turkey satisfies their particular requirement in this regard . Others use a cash form of bonus. However again I must say that if this is dis- cretionary and has not been placed into effect as a regular part of compensation , then , in my opinion, the employer would be justified in discontinuing such a procedure if, in his judgment , he found it was no longer serving a useful purpose . [Emphasis sup- plied.] Under the circumstances, it would be my suggestion that you meet with Mr. Gravenslund and discuss this situation with him in order that you may learn all of the facts. Sincerely, Charles R. Lyon Manager Exhibit 2, comparative payroll costs, shows that pay benefits were conferred on the employees by virtue of the contract as follows: salaried employees ' cost per hour was increased 34.4 cents per hour, commission cost 18.7 cents per hour. Concluding Findings The stipulation in lieu of hearing executed by the parties on the date of the hearing sets forth all the facts upon which the question here presented must be an- swered. However, I deem it advisable to point out some important items of evidence which establish pivotal facts which require that the complaint herein be dismissed. It should be noted that the labor agreement between the Union and the Company was executed on November 18, 1965. The date upon which the contract was executed was approximately 32 days before Christmas in that year. The whole purpose of bargaining is to fix wages, hours, and other working conditions by agreement. For over 20 years bonuses, especially Christmas bonuses, have been considered wages and a mandatory subject for bargaining. The contract of the parties is silent on the subject of a Christmas bonus but it is patent from the letter of Dorthey Harrold, secretary-treasurer of the Union, dated February 24', 1966, that the Union by its "contract interpretation"believed that the bonus was covered by the last paragraph of page 10 of the agreement. On March 16, 1966, John Gravenslund, secretary-treasurer of the Company rejected Mrs. Harrold's interpretation of the contract as to the bonus on the ground that there was no prior program which could be termed a bonus and that therefore the contract gave no right to the Union to the bonus. Also, in her letter to Charles Lyon, Associated In- dustries, Mrs. Harrold again stated that "it is our position that the contract language does protect any employee who receives more than the minimum set forth shall not suffer by the signing or adoption of the agreement." This was a reiteration of Harrold's view that the contract covered the question of the bonus . Lyon also rejected Harrold's interpretation of the contract. In the issuance of the complaint herein , it appears that the General Coun- sel did not see or evaluate the meaning of this question of contract interpretation expressly stated in the correspon- dence. In similar fashion , apparently the General Counsel did not see or evaluate article IX of the contract, entitled "Grievances and Arbitration." This', article states, "All matters pertaining to the proper application and in- terpretation of any and all of the provisions of this Agree- ment shall be adjusted by" the grievance and arbitration scheme. These two facts, ignored in the General Counsel's presentation of the case are fatal to his cause of action. In the first place it has been settled law for many years that the Board is without authority to interpret, construe, GRAVENSLUND OPERATING CO. 521 or enforce labor agreements; that function has been left to the courts having jurisdiction, authority, and enforce- ment sanctions in those fields. In United Telephone Company of the West, 112 NLRB 779, the Board stated that the policies of the Act would not be effectuated by the Board's deciding whether a dispute between an em- ployer and a union arising out of the parties conflicting in- terpretations of a collective-bargaining contract con- stituted an unfair labor practice under the Act, and the United States Supreme Court in Association of Westinghouse, etc. v. Westinghouse Electric Corp., 348 U.S. 437, held that a breach of a collective-bargaining contract was not an unfair labor practice. Recently in Square D Co. v. N.L.R.B., 332 F.2d 360 (C.A. 9), the court had occasion to review this question and held that if the existence of an unfair labor practice was either directly or indirectly dependent upon the resolution of a primary dispute between the parties involving only the in- terpretation of the contract between the parties, the unfair labor practice complaint had to be dismissed. That seems to be the identical situation involved here. Furthermore, the existence of the arbitration clause in the contract has decisive results. In United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, and United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, the United States Supreme Court held that where a labor agreement con- tained an arbitration clause, the only action that a court could take initially in a suit for breach of contract under Section 301 of the Act, would be to order the dispute sub- mitted to arbitration, and the arbitrator would have exclu- sive jurisdiction to construe the contract. In Square D Co., supra, the Board took the position that the Steelworkers rationale was not applicable to the Board. In its learned decision the court explored the area of the Board's statutory duty and the necessity to effectu- ate the policies of the Act by giving full scope to the parties to set up arbitration procedures in their contract by which disputes between the parties would be settled. After quoting at length from the Board's Decision in Hercules Motor Corporation, 136 NLRB 1648, the court concluded that the basic dispute should have been sub- mitted to arbitration pursuant to the contract, and that in the absence of a decision of the arbitrator on this basic issue the Board was without jurisdiction to determine that the Company had committed unfair labor practices by the specific conduct involved. The authorities cited on this point also seem to be dispositive of the issue here. Lastly, in his brief counsel for the Company relies heavily on N.L.R.B. v. Nash-Finch Company, 211 F.2d 622, 625-626 (C.A. 8). As counsel for Respondent points out that case is nearly on all fours with the instant case. There, the court wrote the following: The Board stated its position in its decision, in part, as follows: "It is Respondent's contention that a contract which it entered into with the Union on July 23, 1951, and the events preceding the signing of that contract, spelled out a waiver or acquiescence by the Union in the elimination of the benefits. Like the Trial Examiner, we find this contention to be without merit. Viewed in the light most favorable to Respond- ent, the facts establish no more than an agreement on the part of the Union that Respondent be free of any contractual obligation to maintain the benefits for the duration of the contract. Respondent thus as- sumes that a union's willingness to forego contrac- tual obligation by the employer to maintain certain existing working conditions must also be viewed as a grant of permission by the union to the employer to alter those conditions without consulting it or bar- gaining collectively about them. We see no justifica- tion for such an assumption. A union might well be willing to concede the former without being willing to concede the latter." The Board also said: "We therefore find, as did the Trial Examiner, that elimination of life insurance, hospitalization, and Christmas bonus was not fully discussed or con- sciously explored preliminary to the signing of the July 23, 1951, contract and that the Union' s signing of this contract did not constitute a waiver of its statutory right that Respondent bargain with it re- garding any changes in these conditions of work." The Board concluded [as stated in 211 F.2d at 626-627] that the Respondent's discontinuance of the benefits not called for by the contract was motivated by its hostility toward the Union and was a violation of Sec- tion 8(a)(5), (3), and (1) of the Act. We consider untenable the position of the Board that, although the Respondent had assumed no con- tractual obligation to continue the insurance and bonus benefits which it had formerly provided for the employees represented by the Union, the respondent was obligated by law to continue such benefits unless and until it terminated them after further bargaining with the Union. Both the Union and the respondent in their bar- gaining were negotiating for an agreement complete- ly covering the obligations of the respondent toward its union employees during the period June 1, 1951, to May 31, 1952. The question of maintenance of the insurance and bonus benefits was not ignored in the negotiations between the parties to the agreement. The Union in the first draft of a proposed contract had inserted a "Maintenance of Standards" provi- sions which would have required the respondent to maintain its insurance and bonus plans for its union employees. This provision, however, was unaccepta- ble to, and was not accepted by, the respondent. Where parties to a contract have deliberately and voluntarily put their engagement in writing in such terms as import a legal obligation without uncertainty as to the object or extent of such engagement, it is conclusively presumed that the entire engagement of the parties and the extent and manner of their un- dertaking have been reduced to writing. Ford v. Luria Steel & Trading Corp., 8 Cir., 192 F.2d 880, 884 and cases cited. The following language from Printing & Co. v. Sampson, L.R. 19 Eq. 462, 465, has several times been approved by the Supreme Court of the United States: ". . . if there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the ut- most liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred, and shall be enforced by courts of justice." See Baltimore & Ohio S. Western R. Co. v. Voigt, 176 U.S. 498, 505 ... Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 356... . The respondent, we think, may not be convicted of an unfair labor practice for doing no more and no 522 DECISIONS OF NATIONAL less for its union employees than its collective bar- gaining agreement with them called for. [Emphasis supplied.] "And it is ... clear that the Board may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements." N.L.R.B. v. American National Insurance Co., 343 U.S. 395, 404. Whether the contract in suit should have contained the clause proposed by the Union requiring the maintenance of existing standards of employment, was "an issue for determination across the bargaining table, not by the Board." [Id.,] page 409 of 343 U.S., at page 832 of 72 S. Ct. It seems to us that what the Board has done, under the guise of remedying unfair labor practices, is to at- tempt to bestow upon the respondent 's union em- ployees the benefits which it believes the Union LABOR RELATIONS BOARD should have obtained but failed to obtain for them as a result of its collective bargaining with the respond- ent on their behalf. Our conclusion is that the Board is not entitled to the enforcement of its order. Its petition for enforce- ment is denied. Much the same rationale was expressed by the Ninth Circuit in Intermountain Equipment Co. v. N.L.R.B., 239 F.2d 480. In the opinion of the court written by the late Chief Judge Denman, the court followed the Nash- Finch case (supra) and cited it with approval. Much the same rationale is expressed in N.L.R.B. v. C & C Plywood Corp., 351 F.2d 224. Therefore, upon the stipulation of facts and the authorities set forth above, I find that the complaint herein should be, and hereby is, dismissed in its entirety.