Cominco-American, Inc.

638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Cominco-American, Incorporated and Deer Lodge Min- ers' Union Local No. 834 , affiliated with United Steel- workers of America, AFL-CIO, Deer Lodge, Montana and Philip Struna. Cases 19-CA-4366 and 19-CB-1441 May 21, 1970 By CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND JENKINS DECISION AND ORDER On February 5, 1970, Trial Examiner Richard D. Taplitz issued his Decision in the above -entitled proceed- ing, finding that the Respondents had not engaged in the alleged unfair labor practices , and recommending that the complaint be dismissed, as set forth in the attached Trial Examiner's Decision. Thereafter, the Gen- eral Counsel filed exceptions and a brief, and the Respondent Company and the Respondent Union each filed cross-exceptions and a brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in con- nection with these cases to a three-member panel. The Board has reviewed the rulings of the Trial Exam- iner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and cross-exceptions and briefs, and the , entire record in these cases and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner, as modified herein. We agree with the Trial Examiner's concluding finding that the Respondents did not apply any arbitrary or discriminatory criteria in keying the complainants' sen- iority, and subsequent layoff, to their length of service within the unit. We further agree with his Recommended Order to dismiss the complaint on this basis. We accord- ingly find it unnecessary to consider or adopt the Trial Examiner's other bases for reaching this result. ` Initially, we do not agree that the collective-bargaining agreement clearly and unequivocally provided that sen- iority should include length of service with the Respond- ent Company at its other mines outside the unit. Rather, we find that the seniority provisions, which appear in article V and cover six printed pages of the contract, when read as a whole, are sufficiently ambiguous to necessitate resort to parol evidence for their proper interpretation. We further find that this evidence clearly shows that the parties had intended to include only periods of temporary promotion from the unit to staff positions outside the unit. We note that the seniority lists posted by the Company, and also submitted to the Union, pursuant to Section (h) of article V of the contract, did not contain the names of any of the com- plainants during the period of their service at the Compa- ny's other mines not within the present unit. We further note that there is no evidence that the contract provision, stating that employees should be laid off in the inverse as giving unit employees bumping rights with respect to junior employees at other company mines not within the unit-a likely compensatory provision if the Union- were indeed surrendering rights of unit employees in favor of senior employees at other company mines out- side the unit. In addition, we note that as a result of the disagreement over seniority, the parties agreed in their subsequent renewal contract that unit employees would not accrue seniority for periods of more than 30 days during which they worked for the Company outside the unit. Although the Company at first applied a different interpretation, on January 14, 1969, it finally agreed that the Union's interpretation should be applied. As the Trial Examiner concedes, it would not have been unlawful for the contract in the first instance to provide for seniority based on length of service within the unit. We do not pass on the Trial Examiner's further finding that the Act is violated if seniority is based on arbitrary criteria or standards unrelated to union membership or activity. Rather, we rely here on the fact that the Respondents were truly motivated by the Union' s legiti- mate desire to fully represent the employees in the unit, as contrasted with other company employees out- side the unit, when the Union insisted and the Company finally agreed to limit the seniority list to unit work. We find no merit in the General Counsel' s argument (contrary to the Trial Examiner's finding) that the con- tracting parties engaged in a per se violation of the Act, regardless of the justice of their reasons, by chang- ing a seniority provision of the contract during the term of that contract. As the Trial Examiner pointed out, when economic reasons require a reduction in force which, as here, necessarily results in loss of employment to some of the unit employees, it cannot be said that either the Union or the Company acts improperly in agreeing that the selection should be made on the basis of seniority within the unit rather than on the basis of length of service with the Company outside the unit. ORDER Pursuant to Section 10(c) of the National Labor Rela- tions Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and orders that the com- plaint herein be, and it hereby is, dismissed in its entirety. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE RICHARD D. TAPLITZ, Trial Examiner: This case was tried at Butte, Montana, on November 4, 1969.' The complaint dated August 22, as amended at the hearing, alleges that Cominco-American, Incorporated, herein called Respondent Company or the Company, violated Section 8(a)(1) and (3) of the National Labor Relations order of company seniority, had ever been construed ' All dates are in 1969 unless otherwise specified 182 NLRB No. 92 COMINCO AMERICAN, INC Act, as amended, and that Deer Lodge Miners' Union Local No 834, affiliated with United Steelworkers of America, AFL-CIO, Deer Lodge, Montana, herein called Respondent Union or Local 834, violated 8(b)(1)(A) and (2) of the Act Respondent Company and Respondent Union filed answers by which they each admitted some and denied other factual allegations of the complaint but denied that they had violated the Act The complaint was based on charges filed by Philip Struna on April 22 in Case 19-CA-4366 and on July 14 in Case 19-CB-1441 These cases were consolidated with the issuance of complaint All parties appeared at the hearing and were given full opportunity to participate, to adduce relevant evidence, to examine and cross-examine wit- nesses, to argue orally and to file briefs Briefs which have been carefully considered were filed on behalf of the General Counsel, Respondent Company, and Respondent Union Issues I Whether Local 834 violated its duty of fair repre- sentation and therefore Section 8(b)(1)(A) and (2) of the Act by successfully demanding that the Company take away companywide seniority from six employees and substitute therefor seniority based only on continu- ous work performed within the bargaining unit covered by a collective-bargaining agreement between the Com- pany and Local 834, when that contract proviued for company seniority 2 Whether the Company violated Section 8(a)(1) and (3) of the Act when it acquiesced in Local 834's demand that it lower the seniority status of said six employees and subsequently discharged said employees because of their lowered seniority standing Upon the entire record' of the case and from my observation of the witnesses and their demeanor, I make the following FINDINGS OF FACT I THE BUSINESS OF THE COMPANY The Company is a Washington corporation engaged in the State of Montana in discovery, mining , and produc- tion of metals, chemicals, and fertilizers During the 12 months preceding the issuance of the complaint, the Company's gross volume of business in Montana exceeded $500,000 with the dollar volume of sales to customers outside the State of Montana exceeding $50,000 The complaint alleges, the answers of both the Compa- ny and Local 834 admit, and I find that the Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act 2 The Company filed a motion to correct the transcript of the record In the absence of any objection the motion is granted as follows P5 I 12 83 should be 8(a)(3) P 23 I 20 relative should be relevant Coon should be Koon wherever it appears Her sel should be Hartsell wherever it appears P 146 1 25 833 should be 8(a)(3) II THE LABOR ORGANIZATIONS INVOLVED 639 The complaint, as amended, alleges, the answers admit, and I find that Respondent Union and Phillipsburg Mine and Millmen 's Union, Local 24 of the United Steelworkers of America, AFL-CIO, herein called Local 24, are both labor organizations within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES A The Operations of Respondent Company Respondent Company is a multistate organization operating an ammonia nitrate fertilizer manufacturing plant in Nebraska, a lead and other base metals mine in Missouri, electronics material fabrication plant and warehousing facilities in Washington, and various phos- phate mines in Montana In the past, the Company operated two separate groups of mines in Montana One group was collectively known as the Brock mine and the other as the Douglas mine The Company has a collective-bargaining agreement with Local 834 cover- ing the Brock mine which includes "the Company's mines near Garrison and Avon , Montana , namely the Anderson, Brock, Graveley, Gimlet and Luke mines, and any other operations of the Company in the vicinity thereof " The Company's Douglas mine was cov- ered by a collective-bargaining contract with Local 24 and included "the Company's Douglas Operations, near Phillipsburg, Montana, and any other operations of the Company in the vicinity thereof " The Douglas operation consisted of both a mine and a mill As of the date of the trial, the Company' s only remaining operation in Montana was part of the Brock group B The Transfer of the Six Employees to the Douglas Mine In the fall of 1964, the Luke mine in the Brock group was closed About that time the six employees named as discriminatees in the complaint were trans- ferred from the Brock to the Douglas mine One of these employees was Philip Struna who began work for the Company at the Brock mine in 1950 and was transferred to the Douglas mine on December 2, 1954 Struna was transferred by Les Koon, then mine superin- tendent of the Brock mine , who told Struna that because the Luke mine closed down the blacksmith from Luke was coming to Brock and that Struna would have to go to Douglas Struna answered that he did not want to go and Koon replied that he had to go or else Struna then went to see George Smilonich, who was president of Local 834 and told him of the objection to the transfer Smilonich told struna that he would see what he could do about it The following day, Smilonich told Struna that Struna had to go because the Company could place the men where they wanted to Aubrey Kimble started work at the Luke mine in 1957 and was transferred to Douglas on November 29, 640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1964 Kimble was also told of his transfer by Les Koon who told him that he could be better used in Douglas and asked if he was interested in going there Koon also told Kimble, who was a skip tender operator, that there was no job open for skip tender operators at Brock Creek or anywhere else but that there were jobs with good pay at Douglas Leo Palen started work at the Brock mine in 1962 and was transferred to Douglas on November 21, 1964 Koon told him that he was going to get bumped and asked whether he would go to Douglas as a motorman Palen consented to go Lawrence Haptonstall started work at the Brock mine in 1952 and was transferred to Douglas on November 1, 1964 Koon told him to go to Douglas The remaining two transferees were Ora Bain, who started work in 1957 at the Luke mine and was trans- ferred to Douglas on November 29 1964, and Joseph Simonich who started at the Brock mine in 1959 and was transferred to Douglas on November 4, 1964 All six of the above-named employees, who will be referred to herein as the six transferees, when they were transferred to the Douglas mine received seniority credit for their previous employment with the Company for vacation, pension, health and welfare and holiday purposes, but not for layoffs and job bidding purposes For layoff and job bidding their seniority dated only from the date of transfer to the Douglas mine The six transferees received the two different types of seniori- ty pursuant to the provisions of the collective-bargaining contract between the Company and Local 24, which provided that with regard to such matters as vacations "Company service" was to apply and defined company service as "the employee's total accumulated service with the Company at any operation of the Company whether broken or continuous " With regard to such matters as layoff, the contract provided that company seniority was to control and stated that "Company seniority shall be established on the basis of the employ- ee's continuous service with the Company at the Compa ny's Douglas operation according to the records of the Company "a In the fall of 1968, it became known that Respondent Company was going to close down the Douglas operation At that time, Mine Superintendent Dave McSkibbings informed Gordon Owsley, who was president of Local 24, that the mine would be closed The six transferees asked Owsley to find out what would happen to them Owsley had another conversation with McSkibbings in which McSkibbings said that it was the Company's view that the six transferees were going back to the Brock operation with all their seniority for all purposes This same theme was repeated in a number of conversa- tions Aubrey Kimble was told by Foreman McOmber 3 The parties to this contract were Montana Phosphate Products Company and Phillipsburg Mine and Miilmen s Union Local 24 of International Union of Mine Mill and Smelter Workers It was stipulated that Montana Phosphate Products Company is now named Cominco American Incorporated and that in 1967 the International Union of Mine Mill and Smeltr Workers merged with and became known as the United Steelworkers of America AFL-CIO that he wanted the men to stay on until everything was salvaged and that there was no question that they would be transferred to Brock Creek with all their rights McOmbre told Struna that the Douglas shutdown was nothing for him to worry about because he had a job at Brock, that the six oldtimers would go back to Brock the same way that they went over to Douglas and that they would go back as old men 4 C The Return of the Six Transferees to the Brock Mine As the cleaning up and closing down of the Douglas operation neared completion, the six transferees were once again transferred, this time back to Brock Simonich returned to Brock on September 23, 1968, Palen on November 16, 1968, and Struna, Bain, Kimble, and Haptonstall on December 11, 1968 When Struna returned to Brock, he was put to work in the mechanical department Another employee, Dennis Lietzow, complained to George Smilonich, the president of Local 834, that the job filled by Struna was one that should have been open for bidding On December 12, 1968, Smilonich called Les Koon, who by that time had become superintendent of the Brock operation, with the complaint and Koon answered that they could work Struna for a period of 20 days according to the contract Smilonich filed a grievance over Struna filling the bid job The grievance, which at the time was oral but was later reduced to writing, is as follows DEC 22, 1968 Nature of Grievance The union contends that the company is in viola- tion of Section G Article V of the Seniority clause by placing an employee of the Doughlas [sic] opera- tion into the Brock operation in the mechanical department and not posting the job for mechanic Filed December 23, 1968 Article V , Section (g) of the contract reads as follows The Company shall have the right to transfer any person in its employ , who is not within the definition of employee covered by this agreement, to a job classification within the definition, and to assign to him a job commensurate with his qualifications and Company seniority , PROVIDED that if such person was at one time classified as an employee covered by this agreement , he shall be assigned to a job not less favorable than the Leo Palm testified that when he moved from Brock to Douglas which was in 1964 he asked Mine Superintendent Les Koon what would happen to his seniority and Koon answered that he would lose his department seniority but not his pension and vacation seniority From the context of this conversation and in view of the seniority provisions in the contract between the Company and Local 24 I believe that this entire conversation had reference to Palm s seniority at Douglas rather than at Brock and therefore was not inconsistent with the findings made above COMINCO-AMERICAN, INC. 641 one he would have held had he not been transferred from a job classification covered by this agreement. On December 18, 1968, at a meeting between the Company and Local 834, the grievance was discussed. George Smilonich, the president of Local 834, headed a union delegation and Robert K. Barcus, the manager of operations for the Company, headed the company group. At this meeting , Local 834 took the position that the job given Struna was one which had to be posted and that Struna should not have been placed in that particular job because he should have been counted as a new man. The Company took the position that Struna could hold the job for 20 days without bidding and that when it came to bidding rights Struna had full company seniority which meant seniority dating back to his date of employment with the Company in 1950. To support its contention that Struna had full company seniority, the Company relied on article V, section (g), of the contract which is set forth in full above. The Union contended that that section applied only to employees who left the bargaining unit because of promotion to a staff or salary job and then later came back to the bargaining unit. Barcus was asked to contact Personnel Manager Martin in Spokane who had negotiated the contract.- Another meeting was held on December 30, 1968, with Barcus once again acting as spokesman for the Company and Smilonich for Local 834. The Company told Local 834 that Personnel Manager Martin's notes did show that the intention of article V, section (g), was to protect unit employees who were promoted to staff and then returned to the unit. However, the Compa- ny referred the Union to the general language in the beginning of article V dealing with seniority in support of its contention that Struna was entitled to company seniority. Article V, section (a), reads: "Company senior- ity shall be established on the basis of the employee's continuous service with the Company according to the records of the Company." In the preamble of the con- tract, Cominco-American, Incorporated, is referred to as "the Company" and the bargaining unit set forth in the contract refers to "the Company' s mines near Garrison and Avon, Montana, namely: The Anderson, Brock, Graveley, Gimlet and Luke mines, and any other operations of the Company in the vicinity thereof.. . . Local 834 took the position that the Company' s interpre- tation of • the seniority position was improper and that under such an interpretation the Company would have the right to bring persons employed by it into the bargain- ing unit with full seniority even from its out-of-state operations. Local 834 further took the position that anyone leaving the bargaining unit for 90 days would have to come back as a new man. At the same meeting, Barcus told Local 834 that there would be a considerable cutback of employees early in 1969 and this led to a further discussion of seniority problems with Local 834 contending that the seniority provisions only covered those employees who worked in the mines named in the contract. There was no agreement reached at this meeting . Les Koon, superintendent of the Brock opera- tions, was also present at this meeting. He credibly testified that one of the Local 834 spokesmen said that the local people at Brock wouldn't stand for the Douglas people taking their jobs and reminded the Company of a past occasion when there had been contract difficul- ties . Though the Local 834 spokesman did not mention a strike, the contract difficulties he referred to had resulted in a walkout and Koon got the impression that if the Company persisted in its seniority position for Struna and the others there was going to be a strike. However. Barcus testified that there is a good deal of heat as -well as give and take at grievance meetings and as far as he was concerned he did not consider the Local 834 statement to constitute a strike threat. On January 9, the Company posted a seniority list at the Brock mine. On this list, the six transferees were given their full company seniority based on their original dates of hire with the Company. The list con- tained the rankings of 208 employees and out of these 208 the 6 transferees had the following ranking: Struna 16, Haptonstall 22, Bain 54, Kimble 55, and Simonich 64. On January 10, Respondent Union filed the following grievance with regard to this seniority list: The Union states the Co. has violated our agree- ment by placing employees of the Doughlas [sic] operation into the Brock W. S. operation in improp- er order on the seniority list Dated January 9, 1969. They were not carried on the Brock W. S. seniori- ty list while they were at the Doughlas [sic] opera- tion. The Union feels that Doughlas [sic] employees should be listed according to the starting date at Brock W. S. Dated January 10, 1969, by Geo. Smilonich. On January 14, 1969, Respondent Company capitulat- ed to the Union' s demand . On that date, the Company sent Local 834 the following letter: Mr. George Smilonich, President Deer Lodge Miners' Union Local 834 Deer Lodge, Montana 59722 January 14, 1969 Subject: Disposition of Grievance No. 8 Brock Seniority Listing Dear Mr. Smilonich: The opposing views of Company and Union in this grievance were the subject of extensive discus- sion at a regular grievance meeting on December 18, 1968 , and a special meeting on December 30, 1968. Present and participating in these meetings were: For the Union: George Smilonich, Mike Grey, Donald Merritt, Richard VonBergen, George Kalafatich For the Company: Robert Barcus, Leslie Koon, John Hyvonen, Hartsell Young Inasmuch as these meetings involved full discussion of the issues, but did not lead to a settlement of the difference, it is assumed that Steps 1 and 2 of the grievance procedure have been satisfied, 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and the Company hereby offers its response in Step 3, as required by the Articles of Agreement. The Union contends that the Company violated the agreement when, on a seniority list posted January 9, 1969, it assigned seniority positions to former Douglas operation employees on the basis of their continuous service with the Company, according to the records of the Company. The Union feels that these employees should be listed according to their starting date at the Brock-Warm Springs operation. The Company believes that the seniority list in question is properly ordered in compliance with Article V, Section (a) of the Articles of Agreement . In its meetings with the Compa- ny, nevertheless, the Union Grievance Com- mittee was unanimous in its position. As this is a matter of interest to the employees and the Union, the Company hereby grants the adjustment requested, and will issue an amended seniority list responsive to the Union request. Yours very truly, /s/R. K. Barcus R. K. Barcus Manager Montana Phosphate Operations On the same date, January 14, the Company posted a new seniority list which gave the six transferees seniori- ty credit only from the date on which each was trans- ferred back to the Brock operation. On that list of 205 employees Simonich was 181 , Palin 201, Bain 202, Haptonstall 203, Kimble 204, and Struna 205. On January 17, the Company laid off 58 employees as a consequence of a reduction in force. The order of layoff was based on the seniority list which was posted on January 14 and all six transferees were laid off." Soon after the layoff, Les Koon told Struna that the Company was willing for them to come back to work if Local 834 would let them. Koon also told Kimble shortly after the reduction in seniority that the Company had been talking and fighting with Local 834 and that it couldn't do any more. At a regularly scheduled meeting of Local 834 on January 28, Struna, Bain , Simonich, and Haptonstall complained about the seniority that was given them. It was pointed out that Koon had told them when they left Brock to go to Douglas that they could come back and retain their seniority. Some of the members of Local 834 suggested another meeting with the Compa- ny. One was scheduled for February 3." At the February 3 grievance meeting , all six transferees were present together with a delegation from Local 834 headed by Smilonich and a delegation from the Company headed by Barcus. Local 834 did not change the position it had taken in the December 18 or 30, 1968, meetings or in its grievance of January 10. Koon was asked if he had told the men that they could come back to Brock with their seniority and Koon replied that he hadn't quite said that but that he had told them that they would have a job when they came back. The Union took the position that nothing was going to change and nothing did. By a memorandum of agreement dated July 11, 1969, which by its terms was effective July 1, the Company and Local 834 renewed their contract for 3 years with certain changes. One of these changes was in article V, section (g), which was changed to read: Any person within the definition of "employee" covered by this agreement who is transferred to a position not covered by the agreement, shall be credited with his full seniority until thirty (30) days following transfer, but will not continue to accrue seniority following the elapse of thirty (30) days from the transfer until such time as he may have occasion to return to a classification covered by this agreement and resume the accumulation of his seniority. Smilonich credibly testified that article V,, section (g), of the seniority provision has been discussed in every negotiation and that Local 834 has consistently been trying to remove it.7 D. Analysis and Conclusions 1. The contract provisions As set forth above , the contract between the Company and Local 834 which was in effect at the time that the six transferees were reduced in seniority provided that company seniority was to be established on the basis of the employee's continuing service with the Company. The term "employee " was defined in the contract as a member of the bargaining unit , but the company was defined to be "Cominco-American , Incor- porated," which included the entire Company whether within or without Local 834's bargaining unit. It is clear that the parties did not intend the word "Company" to be limited to that part of Respondent Company which had bargaining relations with Local 834 in the Brock bargaining unit because that unit was set forth in terms of only some of the operations of Respondent Company which were : "the Company' s mines near Garrison and Avon , Montana." As the contract defines Company It was stipulated that Joseph Simonich was recalled at the Brock mine on July 3 but declined the offer on July 13 " Leo Palin credibly testified that he tried to attend a meeting of Local 834 on January 14 but he was not allowed in and an unidentified person told him to leave because he was lust there to cause trouble However, there is no showing that any responsible agent of Local 834 sanctioned or was even aware of this exclusion from the meeting in any event, as is noted above, at the following meeting four of the transferees did attend the Local 834 meeting and another session with the Company was scheduled ' The above findings of fact are a composite of the testimony of a number of witnesses, of stipulations , and of information contained in exhibits which were received in evidence There were no substantial contradictions in the testimony of the witnesses with regard to these findings COMINCO-AMERICAN, INC. 643 in terms of the overall operation of Respondent Company and as it also provides that company seniority is to be established, I find that the contract is clear and unequivocal with regard to seniority. As of the date that each of the six transferees were transferred back to Brock, each became an "employee" within the bar- gaining unit and each was entitled under the contract to company seniority. Local 834 points out that such a construction of the seniority provision would allow the Company to transfer employees from out of state and to their bargaining unit with seniority. However, whether or not that is true Local 834's distaste for the possible consequences of the contract clause is not a sufficient basis for distorting the clear language of that clause. It is no difficult matter to draft language which would give a narrow base for seniority. Local 24 had a contract with the Company, which provided for seniority based on service with the Company at the Company's Douglas operation. Both Local 834 and the Company are in a poor position to maintain that the seniority provisions of the contract do not mean what they say, particularly where the Company as late as January 14 took the position in its letter to Local 834 that article V, section (a), required the transferees to be given full company seniority. A similar situation is present with regard to interpreta- tion of article V, section (g), of the contract which, as set forth in full above, provides that the Company can transfer any person in its employ who is not an employee covered by the agreement to a job classification within the bargaining unit and to assign him a job commensurate with his qualifications and company sen- iority, with the provision that if such person were at one time within the unit and was transferred out of the unit, he will not get a less favorable job when he is transferred back. Local 834 takes the position that this clause applied only to employees who leave the bargaining unit for staff positions and later return to the bargaining unit. The difficulty with that position is that it simply is not supported by the language of the contract clause. The clause is very clear. It gives the Company the right to transfer any person in its employ back into the bargaining unit with company seniority. Once again Local 834's contention that such an interpretation would reach too far does not take away from the clear meaning of the words in the contract. Until December 30, Compa- ny Manager of Operations Barcus interpreted the con- tract in terms of what the contract actually said which meant that the six transferees would have full company seniority. After that he agreed wih Local 834 that the intention of the parties when they negotiated the contract was to provide for employees who took staff positions and thereafter returned to the bargaining unit . However, whether or not the parties meant what they said, what they said is perfectly clear and unequivocal and it calls for companywide seniority for the six transferees. Local 834 demanded that the Company use departmen- tal (in the sense of the Brock mine group) seniority rather than company seniority. I have found that the contract called for companywide seniority. When the Company acquiesced to the Union's demand, the parties to the contract in effect orally modified the existing contract to provide for Brock rather than company seniority. Though Local 834 spoke in terms of an "inter- pretation" of the contract, I believe that the word "inter- pretation" is misused, and what they did was change the contract. A recapitulation of the essential facts comes down to this: the six transferees were transferred from Brock to Douglas where, under the Douglas contract, they had ony mine (Douglas) seniority. The six transferees were later transferred back to Brock where, under the Brock contract, they had and were given full company seniority. The Company then acquiesced to a demand from the Union and orally agreed to a change of the contract to provide for mine (Brock) rather than company seniority. As a result, the six transferees were lowered in seniority and thereafter were discharged. It remains to be considered whether such a contract change consti- tutes a violation of the Act. 2. The duty of fair representation Paragraph 10 of the complaint alleges that one of the reasons that Local 834 demanded that the six transfer- ees be reduced in seniority was that the transferees were members of Local 24. There is no evidence in the record to support that allegation . The mine (Brock) seniority which Local 834 sought was coextensive with seniority in the Local 834 bargaining unit, but that in no way establishes that there was any discrimination on the basis of union membership or nonmembership. General Counsel does not argue in his brief that the Company or Local 834 was discriminating against mem- bers of Local 24. The only issue present here involves the duty of fair representation and the ramifications of that duty. Where a statute gives a union the right to act as the exclusive bargaining agent for employees; a concomi- tant duty is created which requires the union to exercise that right fairly, impartially and in good faith. The United States Supreme Court has applied the duty of fair representation concept to the Railway Labor Act, Steele v. Louisville and Nashville Railroad Company, 323 U.S. 192 (1944), and Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 323 U.S. 210 (1944); to civil suits involving union action on seniority, Ford Motor Co. v. Huffman, 345 U.S. 330 (1953); and to union action with regard to seniority lists in suits under Section 301 of the Act. Humphrey v. Moore, 375 U.S. 335 (1964). The Board has held that the same standard is applicable to unfair labor practice cases. Miranda Fuel Company, Inc., 140 NLRB 181, 185, 186, enforcement denied 326 F.2d 172 (C.A. 2, 1963). In the Miranda case, the Board found that a union and an employer violated the Act when the union caused the reduction of an employee's seniority status in a manner that was not sanctioned by a collective contract. The Board held: . . . Section 7 thus gives employees the right to be free from unfair or irrelevant or invidious treat- 644 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment by their exclusive bargaining agent in matters affecting their employment This right of employees is a statutory limitation on statutory bargaining representatives, and we conclude that Section 8(b)(1)(A) of the Act accordingly prohibits labor organizations, when acting in a statutory representa tive capacity, from taking action against any employee upon considerations or classifications which are irrelevant, invidious, or unfair In addition, the Board held that the union and the company violated Section 8(b)(2) and 8(a)(3), respec- tively, of the Act because the Union's failure to represent the employee fairly had adversely affected his employ ment status On that issue, the Board held We further conclude that a statutory bargaining representative and an employer also respectively violate Section 8(b)(2) and 8(a)(3) when, for arbi- trary or irrelevant reasons or upon the basis of an unfair classification, the union attempts to cause or does cause an employer to derogate the employ ment status of an employee Where a union causes an employer to discriminate against an employee by reducing his employment status and no legitimate employer or union purpose is served thereby, union membership is unlawfully encouraged It is a violation of Section 8(a)(1) and (3) of the Act for an employer by such discrimination to encourage union membership It is also a violation of Section 8(b)(2) of the Act for a union to cause an employer to so discriminate The Court of Appeals for the Second Circuit refused to enforce the Board's Miranda decision However, a majority of that Court did not rule on the question of whether the breach of the duty of fair representation was an unfair labor practice and the Board has continued to apply the duty of fair representation doctrine In Hughes Tool Company, 147 NLRB 1573, the Board found that racial discrimination in the processing of grievances violated Section 8(b)(1)(A), (2), and (3) of the Act In Galveston Maritime Association, 148 NLRB 897, enfd 368 F 2d 1010 (C A 5, 1966), it held that racially discriminatory work quotas imposed by the union violated the same sections of the Act In Local Union No 12, United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO, 150 NLRB 312, enfd 368 F 2d 12 (C A 5, 1966), the Board found that a union's failure to process grievances relating to racially segregated plant facilities violated the Act and the Court of Appeals for the Fifth Circuit enforcing the Board's order agreed that a breach of the Union's duty of fair representation did constitute an unfair labor practice under the Act Racial discrimination with regard to hiring halls has also been found to violate the Act Cargo Handlers, Inc, 159 NLRB 321, Houston Maritime Association, Inc , 168 NLRB 615 All these cases were predicated on the union's duty of fair representation The United States Supreme Court has not yet ruled on the question of whether the duty of fair representation can properly be applied to the unfair labor practice sections of the Act In Vaca v Sipes, 386 U S 171 (1967), the Supreme Court was presented with a preemp- tion question involving a State Court's jurisdiction over a union's allegedly arbitrary failure to process grievances to arbitration The Court found that the State Court did have concurrent jurisdiction but that the failure to fairly represent had not been proved In reaching that conclusion, the High Court traced the evolution of the fair representation doctrine from the early cases under the Railway Labor Act In treating this duty of fair representation as an accepted part of the law, the High Court referred to "the NLRB's tardy assump- tion of jurisdiction in these cases " Though that remark is susceptible of several interpretations, it appears that the Miranda doctrine is in tune with the High Court's thinking The duty of fair representation is an established legal principle, but application of this principle to the particular facts of a case involve an interpretation of the word "fair " There is no difficulty in such cases as Hughes Tool Company, supra, Galveston Maritime Association, supra, and the other cases where racial discrimination motivated the Union's conduct Such discrimination is overtly invidious, unfair, and unrelated to any lawful union objective In the instant case, Local 834 endeav- ored to have established a departmental (in the sense of mine group) seniority rather than company seniority There is nothing inherently right or wrong with either type of seniority Ordinarily a company and a union can agree on either type of seniority or no seniority at all without violating the Act The problem in this case is that agreement between the Company and Local 834 to use departmental seniority came at a time when a contract between them was in force which provided for company seniority, and the new agreement providing for departmental seniority took away from the six trans- ferees rights which had been created for them by the original contract In Ford Motor Co v Huffman, supra, the United States Supreme Court held that a union did not violate its duty of fair representation in its handling of a seniority question where military veterans were given seniority credit for prehire military service The Court said, "A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion " In determining whether a union's action is "unfair," "invidious" or "arbitrary," consideration must be given to whether the union's action bears a reasonable relation ship to its function as a bargaining agent Cf The Dispatch Printing Company, 177 NLRB No 58 In the Miranda case the Board found that (140 NLRB at 188 , 190) "Under pressure from some employees in the unit, the Union sought to have [the discriminatee] forfeit his contract seniority, first on one groundless basis and finally on another basis which the circuit court agrees to have been `in conflict with the agree ment ' " The Board held that this reduction in seniority did not serve a legitimate union purpose and violated the duty of fair representation The reduction in seniority followed the discriminatees taking an early leave of absence and there was no provision in the contract COMINCO-AMERICAN , INC. ' 645 for a loss of seniority on such grounds . The Board went on to hold: Furthermore , even if the Union's insistence on this interpretation can somehow be construed as a demand for a modification of the agreement, as the minority seems to imply-a modification to which the employer was subsequently forced to agree-it seems to us that the Union again hardly met its obligation of fair dealing by insisting on the retroactive application of the modified section 8, in circumstances which made it clear that [the discriminate] had no reason to anticipate any change in his rights under the contract or to believe that, if the contract changed , it would be applied retroac- tively to deprive him of his seniority standing. The sacrifice of [the discriminatee] to placate the other drivers does not, in our opinion , comport with the requirements for fair dealing. In spite of the many factual similarities between Miranda and the instant case, it appears that in the Miranda case the Board was concerned with what it considered to be a vendetta against the particular employee rather than with a serious question of seniority standards. In Humphrey v. Moore, supra , the "duty of fair representation " issue was raised in the context of a merged seniority list which resulted when an employer absorbed parts of another company. The other compa- ny's employees were dovetailed into the employer's seniority list . If the other company' s employees had been given the seniority of new employees , the employ- ees in the employer' s original bargaining unit would, of course , have ended up much ahead in terms of seniority . This relative reduction was held to be within that wide range of reasonableness that was to be allowed to statutory bargaining representatives . In Ford Motor Co. v. Huffman, the seniority of certain employees had been lowered by the granting to veterans of seniority credit for prehire military service . This seniority credit was put into effect by a supplementary agreement which, it would appear , changed the contract to the detriment of certain employees . As' it gave credit for past military service , it had a retroactive effect . The United States Supreme Court held that such conduct did not violate the duty of fair representation. many unforseeable contingencies in a collective-bargain- ing relationship to justify making the words of the contract the exclusive source of rights and duties." As that Justice also pointed out: "If the collective bargaining is to remain a flexible process , the power to amend by agreement and the power to interpret by agreement must be coequal." In the instant case I have found that the Company and Local 834 changed the contract to provide for departmental (Brock mine group) seniority rather than company seniority . I do not believe that the mere change of a contract during the contract term in itself is a violation of the Act even though some of the employees within the bargaining unit benefit from the change and others are hurt by it . There is nothing in the Act which prohibits bargaining during the term of a contract or modifying the contract at any point . By the nature of any change in a seniority system the increase in any employee ' s seniority standing is going to have to be at the expense of another employee 's seniority stand- ing. Yet , seniority is a mandatory subject of bargaining. It is a subject in which a union clearly has a legitimate interest . I cannot find that Local 834's demand for departmental rather than company seniority violated the Act. There can be arguments about which type of seniori- ty is preferable for a particular situation but that type of argument is properly made at the bargaining table rather than in an unfair labor practice case . A company and a union have a terribly difficult decision to make when there is a limited number of jobs available and more employees on hand than are needed for those jobs. Any seniority system that is selected will result in some of the employees being injured . If such decisions are based on the union membership of the employees, a violation of the Act is clear . Similarly , the Act is violated if the criteria used is based on racial discrimina- tion or on other arbitrary standards that are not keyed to any legitimate employer or union purpose. However, the General Counsel has not established that any such arbitrary criteria were used in the instant case where Local 834 sought to have seniority keyed to service at the Brock mine group which was the Local 834 bargaining unit . I therefore will recommend that the complaint be dismissed in its entirety. Upon the foregoing factual findings and conclusions, I come to the following: 3. Conclusions I have found that the contract in effect at the time that the six transferees were reduced in seniority called for company seniority . Under Section 8(d) of the Act, the parties to a collective agreement are not required to bargain about any modifications to the terms of an outstanding contract where the modifications are to take place within the period of the contract . However, in order for a viable relationship to exist between a compa- ny and a union , it is not unusual for the parties to look upon a contract as a living document which is subject to change'' whenever the parties feel that it is necessary. As Justice Goldberg said in his concurring opinion in Humphrey v. Moore, supra, "There are too CONCLUSIONS OF LAW 1. The Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Local 834 is a labor organization within the meaning of Section 2(5) of the Act. 3. The Company and Local 834 have not engaged in the unfair labor practices alleged in the complaint. RECOMMENDED ORDER Upon the basis of the foregoing findings and conclu- sions, it is hereby recommended that the complaint be dismissed.