United States Sugar Corp.

UNITED STATES SUGAR CORP. United States Sugar Corporation and Lake Local Lodge No. 57, International Association of Machin- ists & Aerospace Workers, AFL-CIO. Case 12-CA-3578 January 5, 1968 DECISION AND ORDER By MEMBERS BROWN, JENKINS, AND ZAGORIA On July 24, 1967, Trial Examiner Louis Libbin issued his Decision in the above-entitled proceed- ing, finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Ex- aminer's Decision. Thereafter, the General Coun- sel filed exceptions with a supporting brief, the Charging Party filed exceptions, and the Respond- ent filed exceptions with a supporting brief and a brief in reply to the General Counsel's exceptions and supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional 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, 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 Recom- mended Order ofthe Trial Examiner and hereby or- ders that the complaint herein be, and it hereby is, dismissed.' TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE Louis LIBBIN, Trial Examiner: Upon charges filed on July 21, 1966, by Lake Local Lodge 57, International Association of Machinists & Aerospace Workers, AFL-CIO, herein called the Union or the Machinists, the General Counsel for the National Labor Relations Board, by the Regional Director for Region 12 (Tampa, Florida), issued a complaint, dated October 7, 1966, against United States Sugar Corporation, herein called Respondent or the Company or U.S. Sugar. With respect to the unfair labor practices, the complaint as sub- sequently amended alleges, in substance, that, without an 11 impasse having been reached in negotiations for an agree- ment, Respondent locked out its employees on or about July 5 and July 15, 1966, until agreement on a new con- tract was reached on or about August 13, 1966, that Respondent engaged in this conduct for the purpose of forcing and requiring the Union to accede to its bargain- ing proposals and to undermine and discourage member- ship in the Union, and that Respondent thereby violated Section 8(a)(1) and (3) of the Act. In its duly filed answer, as subsequently amended, Respondent denies generally all unfair labor practice allegations. Pursuant to due notice, a hearing was held before me at Clewiston, Florida, on December 5 and 6, 1966, and on March 28 to April 1, 1967, inclusive. All parties ap- peared and were given full opportunity to participate in the hearing, to introduce relevant evidence, to examine and cross-examine witnesses, to argue orally, and to file briefs. On May 22, 1967, briefs were received from the General Counsel and the Respondent. Thereafter, the parties were invited by me to file reply briefs. On July 10, 1967, a reply brief was received only from Respondent. I have fully considered all briefs submitted by the parties. For the reasons hereinafter indicated, I find that Respondent has not engaged in any unfair labor practices within the meaning of the Act, and will accordingly recommend dismissal of the complaint in its entirety. Upon the entire record in the case, and from my obser- vation of the demeanor of the witnesses while testifying under oath, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Respondent United States Sugar Corporation operates a sugar mill at Clewiston, Florida, where it is engaged in the manufacture, sale, and distribution of sugar and re- lated products. Respondent annually ships from its mill in Clewiston, Florida, finished products, valued in excess of $50,000, directly to points located outside the State of Florida. Upon the above-admitted facts, I find that Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, the record shows , and I find, that Lake Local Lodge 57, Interna- tional Association of Machinists & Aerospace Workers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction; The Issues In 1942 Sugar Mill Workers Local 23211, a Federal labor union affiliated with the American Federation of Labor, was certified by the Board as the bargaining representative of Respondent's employees. Thereafter, successive 1-year contracts were executed by the parties. In a November 1964 AFL-CIO supervised election, Respondent's employees elected to become affiliated with the International Association of Machinists and were designated as Lake Local Lodge 57, the Charging 169 NLRB No. 4 12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Party herein called the IAM or the Union. The Respond- ent agreed to recognize the IAM which took over the administration of the existing contract with its expiration date of March 31, 1965. Prior to its expiration, the Respondent and the IAM commenced negotiations for a new contract. After some 15 to 16 bargaining sessions over a period of 5 to 6 weeks, the parties executed a new 1 -year contract, with an expiration date of March 31, 1966. Pursuant to the required notice, negotiations for a new contract began on March 15, 1966. By June 30, approxi- mately 30 negotiating sessions had been held without agreement being reached. In accordance with its normal practice after disassembly of the plant, Respondent had in the meantime laid off about 300 employees on May 28 for the annual "vacation-layoff" period, which normally preceded a work period for repair and reassembly of machinery. After the July 4th holiday, the 300 employees were not recalled, as they had been in past years. On July 15, Respondent shut down its plant and laid off the remaining approximately 75 to 100 unit employees "until an agreement has been negotiated." After the June 30 bargaining session, no further meetings were held until July 19. From then until August 13, the parties met nine times and finally reached agreement. All employees were recalled to work on August 14. The General Counsel contends, as the complaint al- leges, and the Respondent denies, that the layoff of July 15 and the failure to recall the other laid off employees after the July 4th holiday constituted a lockout in viola- tion of Section 8(a)(1) and (3) of the Act. The principal is- sues litigated in this proceeding are (1) whether the parties had reached an impasse on June 30, 1966, in the course of good-faith bargaining, and, (2) whether Re- spondent was warranted in taking the aforestated action, even in the absence of a bargaining impasse. B. Summary of Negotiations Prior to the Shutdown' The Union was represented at the negotiations by Grand Lodge Representative E'Dalgo, President Hollon, Recording Secretary Wilcox, and an employee commit- tee, with E'Dalgo as chief negotiator. After the 10th meeting, Grand Lodge Representative Usery was added to the Union's negotiating team and from then on was its chief negotiator. The Respondent was represented by Fred Sikes, vice president in charge of personnel and in- dustrial relations, his assistant, Earl Edwards, and Harry Vaughn, Jr., the son of Respondent's president. During the first two meetings, Sikes was the spokesman for Respondent. Beginning with the third meeting, Attorneys Fisher and Gignilliat of the law firm of Fisher & Phillips were added to Respondent's negotiating team. Either one or the other, or both, were present at all remaining bar- gaining sessions. Fisher was the chief negotiator for Respondent and, in his absence, Gignilliat assumed that role. 1. The first two meetings (March 15 and 28) At the first meeting held on March 15 the Union presented its written proposals for changes in the agree- ment. This covered everything except its wage proposals. The parties went through the proposals in a "general way," with the Union explaining the meaning and pur- pose of the proposed changes. At the second meeting held on March 28, which was a short session, Respondent asked the Union for clarification with respect to certain aspects of its proposals. Respondent proposed March 30 as the next meeting date, and the Union agreed. 2. The next eight meetings (March 30, April 4, 5, 6, 19, 20,2 1, and 22) As previously noted, Attorneys Fisher and Gignilliat appeared on behalf of the Respondent for the first time at the March 30 meeting. At this meeting Respondent presented its written proposal for a new contract. This comprised 23 pages; it admittedly was a "rather volu- minous" proposal and contained substantial language changes for much of the old contract. Respondent went through the proposals, explaining to the Union that the proposed changes fell into three general categories as follows: (1) the old agreement was rewritten in clear language which both parties would understand and which would put into the contract the entire understanding between the parties; (2) it related to provisions in com- pliance with the law as to maintenance of membership and discrimination against sex; and (3) it added clauses common to collective-bargaining agreements such as a no-strike clause. The parties agreed that "language" or noneconomic proposals, as opposed to "money" proposals, would be discussed and disposed of first, and this procedure was followed. Further bargaining sessions were held on April 4, 5, 6, 19, 20, 21, and 22, during which there were lengthy morn- ing and afternoon meetings wherein Respondent's proposals were discussed and explained. These meetings produced little meaningful movement toward a contract. E'Dalgo advised Respondent that progress would be slow because Respondent's proposals allegedly totally rewrote the agreement and that it would take time to educate the negotiating committe as to the effect of the changes so that the Union could advise the membership and be responsible to the commitments of the agreement. The Union also took the position that Respondent's proposals would make it almost impossible to air grievances, would result in vitiating previously won arbitration decisions, and were "a hundred degrees contrary to what people had been used to operating in the old procedure," and that the Union was thereby placed in the position of defending its gains for the past 20 years. Thus, E'Dalgo admitted that he "was very cautious as to entering into stipulations of changes." 3. The next 11 meetings (April 28 and 29, May 2, 3, 4, 5, 12, 13, 18, 19, and 20) As previously noted, Grand Lodge Representative Usery entered the negotiations as the Union's chief negotiator at the 11th meeting held on April 28. At that meeting, Usery stated that Respondent's proposals con- stituted a rewriting of 70 percent of the old agreement and a change in the context of the agreement, that that would make it difficult to arrive at an agreement in any reasona- ble length of time, that the Union wanted an agreement as soon as it could get one, but that it had to be one that could be negotiated and understood by the parties. ' The factual findings hereinafter set forth are essentially undisputed. UNITED STATES SUGAR CORP. 13 Further meetings were held on April 29, and May 2, 3, 4, 5, 12, 13, 18, 19, and 20. These meetings reflect a period of marked progress on the "nonmoney items." Outstanding issues were discussed, and the parties made proposals and counterproposals. Thus, at the instant hearing Attorney Gignilliat described the progress as "very, very good," and Attorney Fisher testified that progress was made "on many complex issues." By the 21st meeting on May 20 all of the "nonmoney" items proposed by Respondent and the Union were resolved, except for the four items set forth in the margin. a When Usery announced that he would not be available to meet until June 7, Respondent suggested that in order to save time the Union should submit its economic proposals for Respondent's consideration prior to the next meeting. The Union thereupon caucused, and toward the end of the May 20 meeting orally presented six economic proposals. Usery further informed Re- spondent that at a later time the Union would also pro- pose additional wage adjustments between various jobs, which were referred to as "inequities." 4. The next eight meetings (June 7, 8, 13, 14, 15, 16, 28, and 29) At the June 7 meeting the Union presented its written economic proposal which, in addition to the matters stated orally on May 20, contained the wage adjustments or "inequities." The Union also proposed a 1-year agree- ment from date of ratification, with wages retroactive to the expiration date of the old agreement. In the Respond- ent's view, the Union's economic proposals amounted to a 17.22-percent increase; exclusive of a proposed 6- percent bonus. The meeting closed with the Respondent promising to present a counterproposal the following day. The June 8 meeting started late and lasted only about 30 minutes due to the extremely inclement weather. Respondent presented its counterproposal on the economic issues. These reflected concessions in such areas as wages, holidays, and inequities. The proposed wage increase was made retroactive to the expiration date of the old contract. Respondent estimated that its proposal equaled, a 3.37-percent increase, plus the 6-per- cent bonus. Usery announced that he was disappointed in the proposal and that they were not anywhere near agreement; he stated that Respondent's proposals would be discussed at subsequent meetings. Further meetings were held on June 13, 14, 15, 16, 28, and 29, which were mostly concerned with economic ar- guments. Pensions, insurance for seasonal employees, and labor grade structures were also discussed. Usery ad- mitted that at the June 14 meeting "we got down to what I thought was some pretty hard bargaining on the Union's side." He testified that the Union sought to communicate its critical demands without withdrawing proposals and that "we didn't set forth anything as a final proposal, per se." At the June 16 meeting, Usery stated that it was the Respondent"s move to make another economic proposal and that this would get negotiations off "dead center." He admitted that his request for a second proposal by Respondent was not based on any concessions the Union had made but rather on the economic arguments it had ad- vanced. Usery admitted that at the June 28 meeting he and Fisher "both commented on the progress of negotia- tions, each stating we were highly disturbed that we were not reaching an agreement." He further admitted that in response to Fisher's question, Usery stated that "we are serious about all our proposals." Usery had told Fisher that he was in a firmer position now than he had been be- fore because at a recent meeting the membership was 100 percent behind him. Usery again argued that the Com- pany should make another proposal. Fisher replied that Respondent felt it was about at its limit on economic con- cessions in its June 8 proposal, and was not in a position to make additional concessions until the Union indicated "what would hit pay dirt." At the beginning of the June 29 meeting Usery advised that the Union had reviewed its position and agreed to a few modifications and concessions.3 Respondent then of- fered its second economic counterproposal. This represented an additional 1-to 5-cent increase over its previous wage offers, a different rate structure for in- creases, and a change in position as to granting leaves of absence. Respondent estimated that this offer equaled an increase of 5.74 percent, not including the 6-percent bonus. The parties discussed this proposal. Usery stated that the Union was "disappointed" with this offer, that "we were still a long way apart," and that he did not think Respondent was taking him seriously. Fisher replied that "I am taking it seriously and this is what concerns me, the fact that you are and appear to be firm on the position you are taking, and we have made two offers that we think are fair and substantial offers, and you are still at substan- tially the same place you were when you first made your' offer. That leads me to take you seriously, and I am sure the Company does." Before the meeting ended, Usery advised that the Union would present a counterproposal the following morning. 5. The meeting on June 30 The 30th bargaining meeting was held on June 30, with Federal Mediator McAllister present for the first time.4 Usery advised the mediator how many meetings had been held, that Respondent had submitted a proposal the previ- ous day, that it was now the Union's turn to submit one, and that the Union was having its proposal typed and would submit it after lunch. When Respondent and the mediator requested the Union to submit it orally at that time, Usery read the Union's proposal, which was then submitted in writing after lunch. In this proposal, the Union reduced its wage demands from 39 cents to 36 cents per hour for higher paid employees and from 19-1/2 cents to 18 cents per hour for lower paid employees. Other minor concessions were made. The Respondent re- garded this proposal as representing an increase of 14 to 15 percent, not including the bonus. Respondent ex- pressed great disappointment in the Union's proposal, and the parties recessed for lunch. P These four areas follows- (1) article VII, a provision for the Respond- ent to promulgate work rules; (2) article VIII, §§ 5 and 12, the stretch- out article and Sundays off for certain field employees, (3) article X, § 5, a union proposal on job promotion, and, (4) article XV, a proposal for leave of absence for union work. Usery admitted that there was agreement on the language of article VII on May 19. He also admitted that on June 29, the Respondent accepted the Union's position with respect to article XV The other items were not resolved until August 13, the date a con- tract was finally executed. 3 Such as withdrawing its request that odd cents be rounded off to a full cent, withdrawing its proposal for elimination of wage spread minimums, and withdrawing on the 15-cent field mechanic differential 4 Usery and Fisher had met informally on June 17 at which time they had agreed to call on the Federal Mediation and Conciliation Service. 14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the lunch period the mediator talked to each party separately. Fisher testified that during the after- noon session Our committee stated that we were not in a position to move further .... We stated that the Union's position was too far - we couldn't reach it; we had not enough leeway to possibly get within the range of their offer . We stated ... that we were not willing to make a further move until we could see some stated position firmly this time, because we had made two offers .. Mr. Usery stated that the Company's approximately six per cent - and, I be- lieve he stated it was - less two per cent, which he considered to be cost of living, would not get the job done. .. he again stated that we were not, in his words, I believe, "not in the ball park." We were not taking him seriously. I repeated again that we were taking him seriously, and that I had nothing to offer at this point, because it appeared to me that we were hope- lessly apart.5 Usery replied that he did not agree with Fisher's remark that they were hopelessly apart. He testified that he stated that We have moved; you have moved, and we have moved in our last proposal to you. In fact, it was my feeling we were just now getting down to true collec- tive bargaining, that there had been proposals and counterproposals and that we were dead serious.... Mr. Fisher stated, "We didn't expect to get all of the items out of the way, we didn't expect to get all of the wages out of the way, either; that we didn't expect to completely wrap it up; however, we thought that your proposal would be more responsive to the proposal we had made, and that we would be closer together," and that he felt that we hadn't moved very much, when in essence , we thought we had moved considerable .... Usery admitted that he stated that "we could reduce our proposals again, but not in the light in which the Com- pany had told us on this particular date." He further ad- mitted that the Company stated that this was not their "final proposal" but "they had to know where we were moving and we had to get off from some of the things we were talking about." Usery testified that at or near the conclusion of the meeting, Mediator McAllister made the following state- ment or words to this effect: It does not seem as though we can get anywhere. It looks like an impasse to me . Therefore, I am going to recess negotiations indefinitely, subject to call by either party or by me. Usery took exception to this statement, added that he did not think the mediator had been there long enough to make that type of judgment, and pointed out that there had been offers and counteroffers and that they ought to continue to bargain. The meditor then talked about arranging a proposed "summit" meeting at the Atlanta office of the Mediation Service between Fisher, Usery, and Pierce, the Regional Director of the Mediation Service. Fisher stated that he was available. Usery did not "close the door on it," but no definite meeting was set. The meeting had lasted about 2 hours. C. Events Immediately Preceding the Shutdown6 On July 1, 1966, the Union sent Respondent a tele- gram in which it stated, among other things, that the "Union stands willing and ready to meet and bargain in good faith to conclusion of a new collective bargaining agreement." That same day the Union circulated a letter to its members, announcing a meeting for July 7 at which a report would be made of the status of negotiations and Respondent's latest offer. Attached to the letter was a copy of the above-mentioned telegram to Respondent. Attorney Fisher answered the union telegram of July 1 by a letter to Usery dated July 6, stating that: We agree with the Mediator that our prolonged negotiations are at an impasse and feel that he acted wisely in recessing further meetings pending a call by him or by either of the parties. Your committee's position that the Company would have to "come a long way" if we expect to get an agreement would, based upon my knowledge of the Company's posi- tion, confirm that we are a long way apart. On the other hand, the Company is always available for further negotiations with your Union at any time. Should you feel that the positions of your commit- tee has changed so that further negotiations would be productive, we will be happy to meet with your Union upon request and on very short notice.7 Also, on July 6 Respondent's president, Vaughn, Sr., mailed and posted in the plant a letter to its employees, stating among other things that: We are making a conscientious effort to reach agree- ment with your elected representatives. We have made numerous concessions and have proposed wage increases ranging from 7 cents to 14 cents per hour, details of which I am pleased to note the Union expects to furnish you in your meeting Thursday of this week. We feel that our offer is extremely generous since it amounts to a package approximate- ly 6% retroactive to March 31, 1966. This, coupled with a bonus of 6%, makes our total offer 12%. When you consider that the President of the United States has established a guideline of 3.2% increase per year, we feel our offer to be most generous. We concur with the Union that you should make a special effort to attend this and all forth-coming meetings at which negotiations will be discussed so that you can ask questions and express your views on these most important matters. We are hopeful that our difference with your negotiating committee can shortly be resolved to our mutual satisfaction. On July 8, Usery advised Respondent and Fisher by tele- gram that the membership had rejected Respondent's latest offer by a vote of 313 to 8, and again reiterated that 5 Usery testified that it was at the opening of the meeting that Fisher stated that he felt "we were hopelessly dead locked." I deem it unnecessa- ry to resolve this inconsequential conflict. 6 Unless otherwise indicated, the findings in this section are based on exhibits in evidence , admissions and undisputed testimony , and a com- posite of mutually consistent testimony of Usery and Fisher. In a reply letter dated July 13, Union Representative E'Dalgo stated that "our minutes do not show in any way that he (the mediator) stated that the parties had reached an impasse," and took "strong issue" with Fisher "on this point." As previously found, Usery admitted that at or near the conclusion of the June 30 meeting, Mediator McAllister stated, "it looks like an impasse to me," and recessed negotiations indefinitely. UNITED STATES SUGAR CORP. 15 "we are willing and ready to meet at a mutually agreeable time and place." Meanwhile, each day during the week beginning with Tuesday, July 5, Fisher advised Pierce, the Atlanta Re- gional Director of the Federal Mediation and Concilia- tion Service, that he was available to meet and asked Pierce to contact Usery and schedule a meeting. Usery admitted that Pierce had called him several times that week before Friday, and that Usery was engaged in other important matters involving an airlines strike which com- menced that week. When Fisher learned that Pierce had been unable to schedule a meeting, Fisher himself placed a telephone call to Usery at his Cocoa, Florida, office on Saturday morn- ing, July 9. When Usery returned the call that morning, Fisher stated he had been advised by Pierce of his inabili- ty to reach Usery to schedule a meeting, and urged that it was "imperative that we got together and try to continue our negotiations." Usery expressed the same concern for the need of a further meeting but stated that he was tied up at the Cape, was out of his office a good deal, and that he could not at that time say when they could meet. They then discussed what each felt were the major issues between them and the possibility of a contract for a longer term than the traditional 1-year period as a way to "get over the hump" on wages and additional holidays by providing for deferred wage increases and deferred holidays. Usery admitted that Fisher did not say that this would do the job, but that he agreed to talk to President Vaughn about it. Fisher stated that he would be with Respondent in Clewiston, Florida, on Monday, July 11, and offered to meet Usery at that time in Clewiston or to fly that day to Usery's office in Cocoa. Usery replied that he had to be on the Cape on Monday and that he could not say at that time whether he would be available in Cocoa. The conversation ended with Fisher agreeing to telephone Usery on Monday, July 11, about arranging a meeting after Fisher had talked to Respondent's officials in Clewiston. On Monday, July 11, Fisher went to Clewiston and in- formed Respondent's officials about his and Pierce's ef- forts to schedule another meeting, and that Fisher was to call Usery that day. Fisher then telephoned Usery at Cocoa and his office advised that Usery was not availa- ble. Fisher left word for Usery to return the call, but Usery did not call that day. That afternoon, in reply to previous letters and telegrams circulated by the Union about their availability to meet, Respondent sent tele- grams to Usery and Pierce, stating Respondent's willingness to resume negotiations "any time and place designated by Mediation Service or requested by you." Fisher sent a similar telegram in his own name to the mediator. On Tuesday morning, July 12, Usery's office telephoned Clewiston for Usery who was returning Fisher's call of the preceding day. Usery stated he was sorry he had not returned the call the preceding day but that he had been too busy. Fisher asked when they could get together and whether Usery could come to Clewiston. Usery replied that he would have to check his schedule, and asked how long Fisher would remain in Clewiston. When Fishier stated that he planned to return to Atlanta that night, Usery promised to call Fisher at his home in Atlanta Tuesday night. During the conversation Fisher asked 'Usery what thought he had given to the subject matter they had discussed in their last telephone conver- sation on July 9. Usery replied that he had given it "quite a bit of thought," but that he had not had time to discuss it with Hollon, the president of the Local, and with Grand Lodge Representative E'Dalgo. He also stated that he thought they could work out something in that respect but that they would talk further about it the following day. Meanwhile, that day Respondent's officials discussed with Fisher the alternatives open to them in the event no meeting with Usery could be arranged for the immediate future. After canvassing the entire situation, Respond- ent's officials decided that "if we could not get a meeting which would give us some hope of getting more produc- tive negotiation," the only alternative left "was to go on and lay off the remainder of our employees, in hopes that that would force resumption of negotiations." Although tentative notices to that effect were prepared that day, the final decision was to take no action pending Usery's promised telephone call to Fisher that Tuesday night, July 12. On Wednesday morning, July 13, Fisher telephoned Respondent's officials in Clewiston and advised that Usery had not kept his promise to call Fisher the preced- ing night. The officials replied that they would proceed with the posting of the layoff notices. Later that morning, Usery telephoned Fisher at Atlanta. He stated he was sorry he had not called the preceding night. In response to Fisher's question, Usery agreed to meet with Fisher at Clewiston on July 19. This was the first time that the July 19 date was mentioned. Fisher did not at that time advise Usery of the contemplated shutdown. Fisher then im- mediately placed a call to Clewiston, but was unable to contact Respondent's officials until after lunch. He in- formed them of Usery's call and agreement to meet in Clewiston on July 19, and was advised that the shutdown notices had already been posted. They then discussed the advisability of canceling the layoff which was to be effec- tive at the end of the workday on July 15. President Vaughn decided to go ahead with the layoff because he had no reason to feel that the next meeting, which was still a week off, would be any more productive towards reaching an agreement. That afternoon, Fisher again telephoned Usery and advised him of Respondent's con- duct with respect to shutting down operations until a bar- gaining agreement was reached. Usery replied that he felt it was "the damnest thing that had ever happened to me since I'd been in the labor movement." The findings hereinabove set forth with respect to the scheduling of the July 19 meeting are based on the credited testimony of Attorney Fisher. Usery testified that in his July 9 telephone conversation with Fisher on Saturday, "we talked about a meeting, a future meeting. We talked about July 19 as our next meeting, and he was to call me on Monday." He further testified that July 19 was confirmed as the next meeting date in his telephone conversation with Fisher on the morning of July 12. Usery on the whole impressed me as a very forthright, honest, and credible witness. However, I am convinced that in this respect he was honestly mistaken. On two oc- casions on cross-examination, he admitted'that that "was probably the most hectic week" he had been in and that "as I said, that was about as hectic a time as I have ever been in." He also admitted that on July 11 Pierce read to him a letter which Pierce addressed to Fisher and in which Pierce described the following telephone conversa- tion he had with Usery on July 11: Mr. Usery advised me that at the present time his time was fully taken up with problems out of the present airline's strike and just as soon as his 16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD schedule would permit, he would phone me and ad- vise me as to what date he could meet for the purpose of discussing possible areas of settlement. Usery did not challenge the correctness of this statement when read to him by Pierce. His conduct in this respect is inconsistant with his testimony that he had already agreed to meet on July 19. Also, the previously men- tioned telegrams from Fisher and Respondent to Usery and the Mediation Service, sent late in the afternoon on July 11, in which they agreed to meet at "any time and place," are inconsistent with Usery's version of Satur- day's conversation on July 9. Upon receipt of these tele- grams, Usery made no protest that he had already agreed to a July 19 meeting date. Usery had testified that the purpose of Fisher's call on July 11, which Usery returned on July 12, was to confirm the July 19 meeting date. Yet, he makes no mention of this in his description of this telephone conversation on direct examination. It is only on cross-examination that he claims the July 19 date was confirmed in this conversation. Moreover, on direct ex- amination, he testified that it was in the telephone conver- sation on the morning of July 13 that "we confirmed the date on the 19 as a confirmed date for a meeting." This is consistent with Fisher's version. In addition, Usery ad- mitted on cross-examination that he "might have" agreed to call Fisher at his home on the night of July 12, and that "I wouldn't say that I did not" so agree because that "was about a hectic a time as I have ever been in." His telephone call to Fisher on July 13 is more consistent with Fisher's version of a promise to call on the night of July 12 to arrange a meeting date. Under all the circum- stances, I do not credit Usery's contrary testimony in this respect. D. The Shutdown As previously noted, on Wednesday, July 13, Respond- ent during the noon hour posted the following notice in the plant and sent messengers around to the various com- munities where the employees lived to mail similar notices to the employees. This notice, dated July 13, 1966, is addressed to the employees represented by the Union, and is signed by Respondent's President Vaughn, Sr. It recites the Company's concern with the status of negotiations , the inability of the mediator to arrange another meeting because of Usery's unavailability to meet during the airline's strike, and that the Company be- lieves the Union "is not bargaining in good faith" and is "deliberately stalling" until the fall in the belief that the Company would then be in a position where it would have to accept the Union's "unreasonable demands." The notice then states: In view of this, we have decided that we have no choice but to shut down. Accordingly, as of the end of the work day Friday, July 15, all employees of Machinists Lake Local No. 57 hold bargaining rights will be laid off (except a few on essential jobs). Work will not resume until an agreement has been negotiated. On July 15, the Respondent closed its operations, and laid off the remaining 75 to 100 bargaining unit em- ployees. This was in addition to the approximately 300 employees laid off on May 28, and who in preceding years were recalled shortly after the July 4 holiday. E. Summary of Negotiations After Shutdown (July 19, 20, 27, 28, and 29, August 3, 4, 12, and 13) Nine meetings were held in July and August after the shutdown, with a Federal mediator present at each meet- ing. The first union concession was made at the sixth meeting on August 3. An agreement was finally reached and a memorandum signed on August 13. The term of the agreement is from August 15, 1966, to February 18, 1968. All laid-off employees returned to work on August 14, 1966. F. Contentions of the Parties All parties concede that the purpose of the lockout in this case was to exert economic pressure upon the Union to arrive at an agreement satisfactory to Respondent. The parties further agree that the Supreme Court's decision in American Ship Buildings requires a finding that the lockout is permissible and lawful if it followed an im- passe in negotiations. The General Counsel, however, contends that no impasse existed prior to the lockouts, that any impasse which may have existed was not a bona fide one because Respondent had not bargained in good faith, and that any bona fide impasse which may have existed on June 30, 1966, was broken by the sub- sequent communications between Usery and Attorney Fisher prior to the shutdown. He therefore contends that the failure to recall the May 28 laid-off employees on or about July 5 and the layoff of the remaining unit employees on July 15 constitute an unlawful lockout in violation of Section 8(a)(1) and (3) of the Act. Respondent, on the other hand, contends that the parties reached an impasse on June 30, 1966, in the course of good-faith bargaining which made permissible the subsequent lockout of the laid-off employees and the remaining unit employees still at work. Respondent further contends that its action was motivated by signifi- cant economic justification which rendered the lockout permissible and lawful even in the absence of any im- passe. G. Concluding Findings 1. Good-faith bargaining At the instant hearing, the General Counsel stated, and Grand Lodge Representative Usery testified, that Respondent had not engaged in good-faith negotiations prior to the shutdown, both pointing to certain actions and events to support their contentions. Upon considera- tion of the entire record as a whole, I find, contrary to the contentions of the General Counsel and the Union, that Respondent engaged in good-faith negotiations with a sin- cere desire to reach agreement. Thirty bargaining ses- sions were held over a period of about 4 months. Any delays involved in scheduling meetings were at least as much attributable to the Union as to Respondent, although I am convinced that both parties acted in good faith in this regard. All outstanding issues were fully discussed. Respondent made proposals, counter- proposals, and concessions. All but four nonmoney items were resolved before any money proposals were sub- mitted. In due course, Respondent furnished the Union 8 American Ship Building Co. v. N.L.R.B., 380 U .S. 300. UNITED STATES SUGAR CORP. 17 with requested information and data. By June 30, only three nonmoney items remained unresolved, and agree- ment had already been reached on the language of one of these three. Respondent also made concessions and counterproposals on the money items. I am not per- suaded that the following enumerated actions and events criticized by the General Counsel and the Union, either singly or collectively, warrant a finding of bad-faith bar- gaining on the part of Respondent: a. Employing attorneys as negotiators and length and character of Respondent's proposal The Union criticized Respondent for employing skillful counsel as negotiators, and complained of Respondent's lengthy proposal and extensive language changes, claim- ing that it nullified gains which the Union had won in ar- bitration decisions. Respondent concedes that its proposal of March 30 was a lengthy one which contained substantial language changes for much of the old contract. It explained its reasons for its action in this respect both at the bargaining sessions and at the instant hearing, as follows. After the Union became the bargaining representative in 1964 and took over its predecessor's contract, Respondent be- lieved and contended that the Union had also agreed to recognize and to continue the oral understandings which Respondent had with the Union's predecessor. The Union disagreed, and took positions contrary to Respond- ent's understanding of the total agreement between the parties, which led to many grievances and to four arbitra- tion decisions. After the 1966 negotiations had com- menced, Respondent received the last two of the four ar- bitration decisions, referred to as the Black Decisions, which were adverse to Respondent's position and un- derstanding of the agreement between the parties. It was at that time and as a result of these decisions that Re- spondent, contrary to its past practice of doing its own negotiating, decided to employ experienced labor rela- tions attorneys to handle its negotiations and to write a contract which would set forth what both parties un- derstood to be their complete agreement and which would be understood by everyone, including experienced ar- bitrators. This accounted for Respondent's lengthy proposal and substantial language changes, and for Attor- neys Fisher and Gignilliat entering the negotiations at the third meeting on March 30. Needless to say, Grand Lodge Representatives E'Dalgo and Usery were also ex- perienced and skillful negotiators, as the record amply demonstrates. Under the circumstances, I find that Respondent's ac- tion and conduct neither disclose nor warrant any in- ference of bad faith. b. Delay in commencing negotiations During negotiations, the Union complained of the delay in commencing negotiations in view of Respond- ent's long proposal, the extensive language changes, and the fact that the old contract was to expire on March 30, 1966. The facts leading to the scheduling of March 15 as the first negotiating meeting are as follows: The Union gave timely notice of its desire to negotiate a new agreement on January 26, 1966. The Respondent responded on February 4, requesting a list of employees who would represent the Union in negotiations. On February 25, the Union furnished the list of seven em- ployees and Grand Lodge Representatives Usery and E'Dalgo, with Usery's name heading the list of negotia- tors. Thereafter, Sikes, Respondent's vice president in charge of personnel, contacted the Union and scheduled a meeting for March 15. The Union made no effort to seek an earlier meeting. The Respondent did not schedule an earlier meeting because at that time it had not yet received the two above-mentioned Black Decisions and was convinced from its past experience that a contract could be negotiated in 15 or 16 meetings. Under the circumstances, no bad faith may be imputed to Respondent. c. Cancellation of the contract The Union criticized the Respondent for canceling the 1965 agreement during negotiations. Article XX, section 5 of the 1965 agreement states, in r art, as follows: If after entering negotiations the parties fail to reach agreement on modifications or amendments by April 1st, 1966, at any time during which this agreement remains in full force and effect, either party may ter- minate the agreement upon 5 days written notice to the other. Pursuant to this provision, Respondent on April 22, 1966, notified the Union in writing of the termination of the contract as of May 1, 1966. This occurred at the end of the 10th bargaining session, after agreement on only four relatively minor issues had been reached. Although Usery headed the list of negotiators furnished to Re- spondent, he had not appeared at any of the meetings. Based on past experience, Respondent was convinced that participation by Usery would stimulate greater progress in the bargaining sessions. It took the foregoing action because, as Gignilliat testified, "our feeling was that if we terminated the contract Usery would come in and that negotiations would move faster." Termination of the agreement did in fact bring Usery into the nego- tiations and facilitate greater progress. Respondent had a lawful right to terminate the agree- ment. Its exercise of that right, under the circumstances hereinabove set forth, does not demonstrate any bad faith. d. Cancellation of the checkoff The Union complained because after cancellation of the agreement , Respondent unilaterally discontinued the checkoff. Article XVII, section 2 of the 1965 agreement states, in part, as follows: The corporation shall deduct from the pay of each employee who is a member of the Union and covered by this agreement, all Union membership dues in- cluding initiation fees (if payable), provided that at the time of such deductions there is in the possession of the Corporation a written assignment executed by said Union member. [Emphasis supplied.] After the contract was terminated '., Respondent discon- tinued its checkoff. However, as the above clause speci- fies, Respondent's checkoff obligation was linked to the period the contract remained in force. When the contract was terminated , the duty no longer existed . The Board has held that unilateral discontinuance of checkoff, under 18 DECISIONS OF NATIONAL LABOR RELATIONS BOARD these circumstances , does not demonstrate bad-faith bar- gaining violative of the Act.9 e. Failure to pay bonus During negotiations , the Union complained of Re- spondent's failure to pay the annual 6 percent customary bonus. In the past, Respondent has customarily paid an annual 6-percent bonus to its employees a few weeks after the grinding (harvesting) season and prior to the May vaca- tion period. In 1966 Respondent did not pay the bonus at the usual time . However, it is undisputed that in prior years the bonus had never been paid before the contract was consummated . Indeed , no contract negotiations were ever in progress when the bonus was paid in the past. Respondent regarded the bonus as a money item and specifically included it in its economic proposals. When the contract was finally consummated , the 6-percent bonus was paid as in prior years. I find no probative evidence of bad faith in Respond- ent's action in this respect. f. Failure to stipulate a recall date for employees laid off on May 28 Respondent's harvest or grinding season runs from the first of November of each year through the latter part of the following March. Immediately after the end of that season, the mills are stopped and there follows a period of disassembly for about 2 months. During this period, which runs until the middle or late May, the equipment is disassembled and inspected , and a determination is made as to the extent of needed repairs and parts to be ordered. Traditionally , a "vacation-layoff' period , involving about 300 employees , follows the disassembly period while the necessary parts are ordered and preparation made for the repair season . This period , during which most of the laid- off employees take their accrued vacations , runs from late May until shortly after the July 4th holiday , at which time they are recalled for the repair period which runs until about November 1. In the past, the return date, which had never varied more than I to 3 days after July 4, was specified in the layoff notice . In 1966 the annual layoff notice was posted on May 25 , to be effective on May 28. Although the notice indicated that the em- ployees would be recalled to work, it did not, unlike previous notices, contain a specific date for employees to report back to work . The Union complained of Respond- ent's departure from its past practice in this respect and of Respondent's failure to give the Union a specific recall date when requested in the June meetings. At the instant hearing Respondent explained its deci- sion not to give a specific recall date as follows: Respond- ent was engaged in contract negotiations which had gone on longer than any it had ever experienced , and did not know with any degree of certainty that it could arrive at a contract. It was therefore unable to make definite plans at that time concerning the extent of repairs or the start of planned capital improvements for fear of the economic consequences resulting from being caught in a work stop- page if they were unable to arrive at a contract . There was also a forthcoming acreage allotment hearing in June which might have a bearing on Respondent moving back the starting date of the mill. During the negotiating meetings Respondent merely told the Union that the acreage allotments had not been- determined and that the length of the repair season was unknown. Respondent deemed it to be poor bargaining strategy to point out the specifics of its vulnerability. In the past, contract negotiations were never under way when the "vacation layoff' occurred. Nor had there been any uncertainty in the past as to what repairs and im- provements could be made during the repair season. In the light of Respondent's overall conduct in the negotiations during the period from March 15 to June 30, I do not regard Respondent's actions in this respect as demonstrating that it had not engaged in good-faith negotiations. g. Failure to discuss union proposals The Union complained that its proposals were not discussed. The Union and Respondent had agreed to discuss non- money proposals first, and the Union admittedly had fewer nonmoney proposals than Respondent. Thus, Usery admitted that "the parties had agreed that we would seek to get all the contractual language out of the way before we would talk about economics,. per se. Therefore, many of our proposals being economic, by necessity, they was set aside." In any event, all company and union nonmoney proposals, except four, were disposed of by May 20, and there was adequate discus- sion of union proposals thereafter. No bad-faith characterization or motive may be im- puted to Respondent's conduct in this respect. h. Failure to furnish requested bargaining data During some of the meetings the Union complained of Respondent's failure to furnish certain data and informa- tion. While there was some delay in furnishing some requested information, the record shows that it finally was furnished before the parties began real discussions of economic items and well over a month before the shut- down. Compilation of some of the requested data was time-consuming and burdensome. Nevertheless, Re- spondent did furnish it, upon being reminded of the request. There never was any refusal to furnish any information. No bad faith may be inferred from Respondent's con- duct in this respect. 2. Impasse There is no exact or clearly defined definition of the term "impasse." In a recent decision finding an impasse, Taft Broadcasting Co., 163 NLRB 475, the Board stated: Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good faith of the parties in negotiations, the length of the negotia- tions, the importance of the issue or issues as to which there is disagreement, the contemporaneous 9 Bethlehem Steel Company (Shipbuilding Division), 136 NLRB 1500, 1502, enfd. in this respect, 320 F.2d 615, 619 (C.A. 3); Standard Oil Company of California, 144 NLRB 520, 521. UNITED STATES SUGAR CORP. understanding of the parties as to the state of negotia- tions, are all relevant factors to be considered in deciding whether an impasse in bargaining existed. ... an impasse is no less an impasse because the parties were closer to agreement than previously, and a deadlock is still a deadlock whether produced by one or a number of significant and unresolved dif- ferences in position. 10 In the instant case, the parties had engaged in many and lengthy bargaining sessions over a period of about 3-1/2 months. The first 21 sessions had been devoted exclu- sively to nonmoney items, by agreement of the parties. On June 30, the parties were meeting for the 30th time, and this time with the aid of a Federal mediator. Although numerous issues had been resolved and considerable movement towards an agreement had been made up to this point, there still remained some significant un- resolved differences in positions. They were still apart on the nonmoney issues of stretchout, Sundays off, and job promotion. On the economic issues with respect to which Respondent had already made concessions in two coun- terproposals, the difference between 14 to 15 percent and 5.75-percent increases, not including the 6-percent bonus, separated their economic proposals. This was not an insignificant difference, especially since Respondent had set for itself a maximum guideline of a 6-percent in- crease, not including the 6-percent bonus.11 They were also substantially apart on an expiration date for the con- tract. But even more importantly, each side took the posi- tion at that meeting that while its last proposal was not a "final" one, it would not move further unless the other side moved first; and neither side would move first. In view of the foregoing, Respondent and the mediator could reasonably conclude that the parties were at an impasse, and they so stated at that meeting. Thus, the situation on June 30 may be summed up as follows: The Respondent had not engaged in any bad- faith bargaining, as previously found. Both parties had taken strong and opposing positions on matters which had to be resolved to reach a contract. Each party had ex- plained its own position and had explored the opposing view. Both parties had bargained in good faith with a sin- cere desire to reach agreement. Each party considered that it had made considerable movement on the un- resolved issues but that the last proposal of the opposing party was too far out to be within range of being reached. Each party indicated that it was in no position to make any further concession unless the other party moved first. Each party took the position that it would not be the first one to make another move. In my judgment, an impasse in contract negotiations occurred on June 30, 1966, and I so find.12 The General Counsel further contends in his brief that "assuming, arguendo, that there was an impasse on June 30, 1966, subsequent communications between Respond- ent's counsel Fisher and Grand Lodge Representative Usery broke any such alleged deadlock." He has reference to the previously detailed telephone conversa- 1o See also the Trial Examiner's finding of an impasse in the American Ship Building case, 142 NLRB 1362, 1379-80, affirmed in this respect by the Board and the Courts. 11 In the discussion of his finding of an impasse in the American Ship 19 tions between Fisher and Usery on July 9, 12, and 13, in- sofar as they related to the possibility of using a longer term contract as a vehicle to "get over the hump" on wages and holidays. I do not agree. On June 8 Fisher was advised by telegram that the union membership had rejected Respondent's last proposal by a virtually unanimous vote. Usery admitted that in the July 9 conversation Fisher did not say that this would do the job but merely agreed to talk to President Vaughn about it. There is no indication in the July 12 conversation or elsewhere in the record that Fisher had by that time already talked to Vaughn about it. On the other hand, Usery stated in that conversation that while he had given it "quite a bit of thought" he had not had time to discuss it with Hollon, the Local's president, and with Grand Lodge Representative E'Dalgo. He further stated in that conversation that they would talk again about it the next day. The record contains no evidence that this matter was discussed again in the two telephone conversations on July 13, other than the remark volun- teered by Usery in the afternoon conversation that he still had not had time to talk with Hollon. It thus appears that exploration of this avenue as a means "to get over the hump" was contingent upon the Union first consulting with the Local and Fisher first consulting with President Vaughn, presumably to obtain their approval for proceed- ing in this manner. When Respondent's officials were in- formed by Fisher on the morning of July 13 that Usery had not kept his promise to telephone the preceding night to arrange a definite meeting date, they proceeded to post and to mail the shutdown notices. So far as the record shows, the aforestated contingency was not fulfilled by the time the shutdown became effective. Indeed, it was not until August 3, the sixth meeting after the shutdown, that the Union made its first concession. It was the shut- down and the lapse of time, with the approaching planting and harvest season, which broke the impasse. Under all the circumstances, I find that the bargaining impasse, which began on June 30, 1966, was not broken at any time before the shutdown became effective at the end of the workday on July 15. 3. Concluding findings I have found that an impasse in negotiations had been reached on June 30, 1966, in the course of good-faith bar- gaining and that this impasse continued in effect from that time until a period after the July 15 shutdown of opera- tions. Respondent was therefore privileged, without violating the Act, to lay off its employees at any time while the bargaining impasse was in effect beginning with June 30, 1966.13 Respondent's failure to recall the May 28 laid-off employees after July 4, stands on the same legal footing as its shutdown and layoff of the remaining employees on July 15, and is therefore equally privileged and lawful. For the same reasons, Respondent was acting within its lawful rights in electing not to cancel the shut- down when it was informed on the afternoon of July 13 Building case, supra, the Trial Examiner considered 8 to 9 cents "not a petty difference." 12 American Ship and Taft cases, supra 13 American Ship Building case, supra, 380 U S. 300, Union Carbide Corporation, 165 NLRB 254 350-212 0-70-3 20 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that Usery had finally agreed to another meeting on July 19. Accordingly, I find that Respondent's conduct in not recalling the laid-off employees after July 4 and in laying off its remaining employees on July 15 until a contract was negotiated did not violate Section 8(a)(1) and (3) of the Act. In view of my above findings, I deem it unnecessary to pass upon Respondent's additional contention that its ac- tion was motivated by significant economic justification and for that reason alone was permissible and lawful even in the absence of a bargaining impasse." Accordingly, I will recommend that the complaint be dismissed in its en- tirety. CONCLUSIONS OF LAW Respondent has not engaged in conduct violative of Section 8(a)(1) and (3) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law and pursuant to Section 10(c) of the National Labor Relations Act, as amended, I hereby recommend that the complaint against the Respondent, United States Sugar Corporation, Clewiston, Florida, be dismissed in its entirety. '4 By the same token, I deem it unnecessary to consider the impact of the Board's recent decision inEveninc News Association, 166 NLRB 219.