Emeryville Research Center

504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Emeryville Research Center, Shell Development Company, a Division of Shell Oil Company and Association of Industrial Scientists. Case 20-CA-5181 July 9, 1970 DECISION AND ORDER By MEMBERS FANNING, BROWN, AND JENKINS On March 4, 1970, Trial Examiner Allen Sinsheimer, Jr., issued his Decision in the above-en- titled proceeding, finding that the Respondent had not engaged in certain alleged unfair labor prac- tices within the meaning of the National Labor Relations Act, as amended, and recommending the dismissal of the complaint. Thereafter, the General Counsel and the Charging Party filed exceptions to the Trial Examiner's Decision and supporting briefs. Respondent filed a reply brief Pursuant,to the provisions of Section 3(b) of the Act, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. .The Board has reviewed the rulings of the Trial Examiner, made at the hearing and finds that no prejudicial error was committed The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. MEMBER BROWN, dissenting: Contrary to the majority, I would reverse the Trial Examiner and find that Respondent violated Section 8(a)(5) and (1) by invoking the "competi- tive adder," without first bargaining with the Union. While the applicable agreement precludes negotiation with respect to merit increases, general wage increases are specifically made bargainable. In accordance with the Trial Examiner's finding in an earlier case, Emeryville Research Center, 174 NLRB 114, 1 would find that though the "competi- tive adder" was structured into the merit increase system, it was actually in the nature of a general in- crease which could not be implemented without prior negotiation. Thus, while the "adder" did not immediately raise the salary levels of any em- ployees, it was a fixed percentage uniformly applied to all receiving increases and was based on the type of objective criteria determinative of general salary levels, rather than the subjective considerations that normally come into play where merit increases are involved. Also significant is the fact that since the inception of the "competitive adder," Respon- dent has been able to dispense with any general in- creases. In these circumstances, it is my opinion that the "competitive adder" bears strong kinship to general increases, is founded on the principles normally governing such increases, and hence should not be considered as anything other than a transparent attempt to remove the critical issue of salary levels from the bargaining table. Nor can I agree with the Trial Examiner's alter- native finding that the Respondent satisfied its duty to bargain with respect to this issue. The "competi- tive adder" is an integral part of the guide curves. Union requests for information concerning the operation of the guide curves date back to 1966 and have not been honored despite an outstanding Board order requiring production of this data. Until the Union is afforded an opportunity to examine the information necessary to an understanding of the salary system, there can be no good-faith bar- gaining with respect to any component thereof. Ac- cordingly, I would find the refusal to bargain as al- leged in the complaint and issue an appropriate remedy. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE ALLEN SINSHEIMER, JR., Trial Examiner: This proceeding was heard at San Francisco, California, on April 29 and 30, May 1, September 29 and 30, and October 1, 2, and 3, 1969. The complaint herein, issued on February 18, 1969, and based on a charge filed August 27, 1968, alleges a violation of Section 8(a)(1) and (5) of the Act by unilateral announcement of salary increases and subsequent grant of said increases by Emeryville Research Center, Shell Development Company, a Division of Shell Oil Company, herein called Respondent. The foregoing will involve the application and construc- tion of a contract between the parties, the meaning of certain terms thereof, prior practice, whether the Respondent did grant a wage increase as alleged, and whether or not Respondent unilaterally did so in violation of statutory requirements with respect to bargaining. The questions presented are hereafter illu- minated by a statement of the issues. Upon the entire record, including observation of the witnesses, and after due consideration of the able briefs filed by the General Counsel, the Charg- 184 NLRB No. 53 EMERYVILLE RESEARCH CENTER 505 ing Party, and the Respondent, I make the follow- ing:' FINDINGS AND CONCLUSIONS I THE BUSINESS OF RESPONDENT Respondent is a Delaware corporation engaged in petroleum and chemical research in Emeryville, California. In the course and conduct of its business Respondent annually sells goods and services valued in excess of $50,000 directly to custormers located outside of California and annually purchases and receives goods valued in excess of $50,000 directly from suppliers located outside of California. Respondent admits, and I find, that at all times material, it has been, and is, engaged in commerce and in operations affecting commerce within the meaning of the Act. II THE LABOR ORGANIZATION INVOLVED The Association of Industrial Scientists (herein called Association) is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction and Background The complaint in paragraph VI alleges, Respon- dent's answer admits, and I find the following unit to be appropriate: All professional employees on the payroll of the Emeryville Laboratories of Respondent while employed in the classifications of Chemist, Junior Chemist, Physicist, Junior Physicist, Engineer, Junior Engineer , Chemical Abstractor, Assistant Librarian, Mathemati- cian , Junior Mathematician , Metallurgist and Junior Metallurgist, excluding all other em- ployees, members of management, guards and supervisors as defined in the Act. Paragraph VII of the complaint alleges: At all times since 1948 and continuing to date, the Association has been the majority representative for the purposes of collective bargaining of the employees in the unit described above in paragraph VI, and by virtue of Section 9(a) of the Act, has been, and is now the exclusive representative of all the em- ployees in said unit for the purposes of collec- tive bargaining with respect to rates of pay, wages or salaries , hours of employment, or other terms and conditions of employment. Respondent's answer asserts: With respect to paragraph VII, respondent alleges that salaries not wages are paid, that those salaries are not paid by the hour, that those salaries have been and are paid to the employees in the unit represented by the As- sociation on an individual basis, and that the Association has never undertaken to bargain collectively with respect to those individually paid salaries. Respondent admits the allega- tions of paragraph VII except to the extent they are inconsistent with the allegations of this paragraph. Paragraph VIII of the complaint alleges as follows: (a) Beginning on or about February 29, 1968, and continuing through on or about July 30, 1968, Respondent and the Association bar- gained about salary increases for the em- ployees in the unit described above in para- graph VI. (b) On or about April 10 and on or about June 28, 1968, Respondent announced to the Association that it was going to increase sala- ries unilaterally for employees in the unit described above in paragraph VI when Respondent had an obligation to bargain with the Association about such increases (c) Beginning on or about July 1, 1968, and continuing to date, Respondent had put into effect the salary increases described in para- graph VIII(b). Respondent's answer denies the allegations of para- graph VIII. Since 1948, the Respondent and the Association have been parties to successive collective-bargain- ing agreements covering the employees in the unit set forth above. The parties stipulated that throughout the bargaining history of the parties (commencing in 1948) article XII of the contract, sections 1 and 2, of the applicable contract herein, which was effective November 16, 1967, provides: 1. The present salary of each employee shall continue for service performed during the term of this Agreement subject to change by the fol- lowing means:' A. Individual employee merit increases made by the Company. B. Any general salary increases to em- ployees covered hereby as made by the Company for reasons other than individual merit. i The parties at the hearing stipulated that Frank H Douma was manager of personnel and industrial relations at Respondent's Emeryville Research Center, Shell Development Company, prior to July I, 1967, that E J Geg- gis replaced Frank H Douma on July 1, 1967, that Frank H Douma replaced E J Geggis as such manager in January 1969, and that E J Geg- gis and Frank H Douma , while acting as managers of personnel and indus- trial relations at Respondent 's Emeryville Research Center, were and are agents of Respondent acting on its behalf within the meaning of Section 2(13) of the Act The Respondent on December 12, 1969, filed a motion to correct the record in certain specified respects No opposition thereto has been filed I have checked each of the proposed corrections and find that they are proper and should be granted Accordingly, the motion to correct the record is granted 2 Art X11, secs 3 and 4, of the same contract , provide 3 The Company will present the Association with the following 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pursuant to the foregoing article XII of the con- tract , Respondent had at its sole discretion given merit increases under a system which used annually derived " guide curves " either from the inception of the contractual bargaining relationship in 1948 or shortly thereafter . Since about 1954 the new guide curves have become effective on July 1 . The nature of the curves and how they have been utilized will be set forth hereinafter . During the same period, the parties , from time to time, negotiated for general increases covering substantially all of the employees as more specifically detailed , post. Until about 1966 the Association raised no questions concerning or objections to the guide curves or their use . In 1966 the Respondent added an ele- ment to the curves called a " competitive adder" which it had not inserted or previously utilized in constructing the curves . The "competitive adder," a percentage increment which Respondent built into the guide curves, will be considered more fully hereafter. The Association then requested certain data con- cerning the curves and that the guide curves them- selves be furnished to it . Respondent failed and declined to do so. The Association filed charges and a complaint was issued against the Respondent. This resulted in Case 20-CA-4446, which was tried before Trial Examiner Eugene Kennedy between December 5, 1967, and March 14, 1968. The Board agreed with the Trial Examiner that the Respondent had violated Section 8 ( a)(5) by "refus- ing to provide the Union with the charts known as `salary guide curves,' current as of the date they were requested , a written explanation of the salary guide curves, merit ratings for employees in the bargaining unit and salary guide curves for the previous 5 years and a list containing certain infor- mation including academic degrees of employees and the principal type of work they have been en- gaging in." This case is now pending before the court of appeals . In the course of that decision, cer- tain references to the "competitive adder" were made which will be considered more fully hereinafter. On July 1, 1966, the Respondent for the first time included a "competitive adder " in making the guide curves which it utilized as part of its merit rating system . On July 1, 1967, it also included a "competitive adder" in constructing the curves and on July 1, 1968, it again inserted the "competitive A A list unidentified by names showing individual salaries of all employees by experience credit groups as of June 30 each year The list shall indicate individual salaries and merit ratings as of June 30 of both the current and preceding year(entrance salaries will be shown for individuals employed in the interim) In the event of a general salary increase during the year, the above list will be accompanied with a similar list showing salaries im- mediately before and after the general increase B A list showing groups of employees by years since first college degree as of January I each year This list will show only the median salary and number in each group Data will be combined wherever necessary to avoid showing groups of less than twelve (12) individuals adder" into the curves. The latter is the basis of the charge herein. In 1966, the insertion of the "competitive adder" led to an effort by the Association to obtain arbitra- tion of the Respondent's right to do so. Respondent refused to arbitrate and its refusal was upheld by a United States district judge. Because, pursuant to stipulation, no findings of fact and conclusions of law were made, the reasons for the dismissal of the Association's complaint seeking arbitration were not enunciated. No appeal was taken from the judge's ruling. The insertion of the adder into the curves in 1967 led to an unfair labor practice charge by the Association which was subsequently withdrawn by the Association assertedly in the belief that it would have to be referred to the General Counsel's office in Washington and would hinder the processing of the case then pending and involving the guide curves. Since the reason for withdrawal was neither developed nor appears material, for the purpose of this proceeding, I find only that the Association did, in fact, withdraw the charge that it had filed with respect to the 1967 competitive adder. The competitive adder introduced into the curves July 1, 1968, therefore, is the basis of the charge and complaint herein. B. The Issues The General Counsel and the Charging Party contend that the "competitive adder" amounts, in effect, to a general increase within the meaning of the term "general increase." The Charging Party in its brief also argues that the adder was "something basically new in the Company's salary administra- tion plan and something not contemplated by the contract." The General Counsel in his brief states- "the effect of the competitive adder on the guide curves is a subject on which the AIS has a right to bargain." Both contend that the Respondent has no right during the contract (or otherwise) to insert a "competitive adder" into the guide curves without first negotiating as to it with the Association. They also assert that the Respondent did not negotiate with the Association prior to inserting a competi- tive adder in 1968 (and that its action is so doing in the years 1966 and 1967 had been improper).3 The amount of this competitive adder was 3.5 percent in 1966, 4.5 percent in 1967, and 4.5 percent in 1968. The Respondent contends that the insertion of a "competitive adder" of a specified amount into the guide curves was inherent in its right to determine 4 The salary status of an individual employee inay be the subject of discussions between the employee and Management at any time but shall not be the subject of consideration beyond Step 2 of the Adjust- ment Procedure Article of this Agreement The parties agreed that there had been some changes, over the years, in sections 3A and 3B ' Since any asserted violations in 1966 and 1967 are clearly barred by Section 10(b) of the Act, consideration of matters at that time is by way of background for a fuller understanding of both the General Counsel's con- tentions and Respondent's asserted defenses EMERYVILLE RESEARCH CENTER merit increases and to derive and construct the guide curves as a rational standard for that purpose. Respondent contends that the "competitive adder," like numerous other changes that it had made without objection in constructing the guide curves in the past, was simply one element in deriving the guide curves The General Counsel on the contrary claims that , since it was based on economic ele- ments normally taken into account in determining general increases and since it raised the level of the guide curves, the competitive adder necessarily "in- volved or constituted a general increase. Respon- dent asserts that the insertion of the "competitive adder" into the guide curves per se would give no one an increase and did not necessarily lead to in- creases for substantial numbers of persons. Respon- dent also says the competitive adder has been predicated on competitive factors, items, and con- siderations rather than general economic elements. Respondent states that a "general increase," as used under the terms of the contract, means an in- crease given to almost every employee of a specific percent or amount at the same time. The Respon- dent, in addition, claims that it did not fail to bar- gain about the competitive adder in 1968 (or any other time) and asserts it discussed the adder pur- suant to the Association's request and was prepared to negotiate about it even though not obligated to do so. However, Respondent says the Association, although notified on April 10, 1968, that the Respondent intended to include a 4.5 percent adder in the curves on July 1 , 1968, did not ask to negotiate concerning it, propose a different amount , or object to its introduction until June 28, 1968. The Respondent further asserts that the matter in 1968 is now barred by Section 10(b) of the Act since the adder was originally inserted in 1966 and therefore the 6-month period has elapsed. It further contends that the adder has become a condition of employment as a result of its insertion in 1966 and 1967, that it was so recognized by the Association, and that Respondent accordingly need not bargain about it during the life of the contract. In considering the complaint herein , I note that the issues arose in conjunction with and during the life of a contract. They did not arise or appear to do so in 1968 in relation to a contract opening. The right to insert the adder or the obligation to discuss such insertion accordingly arose during the term of the contract. The contract involved became effec- tive as of November 16, 1967, to November 17, 1968. The questions therefore are what was the meaning of the term "general increase " as used in the contract and what did the grant of "individual employee merit increases made by the Company" involve or entail under the contract? In the latter connection the historical practice thereunder would appear to be particularly pertinent. So also histori- cal practice or application would appear to have a significant bearing on what meaning should be given to the term "general increase" as used in the 507 contract. There must also be considered and care- fully analyzed what the effect of the "competitive adder" is or may be I also note at this point in con- nection with both the foregoing and the entire matter that there is involved to some extent a matter of semantics, of Interpretatiton and meaning of terminology The latter, it appears to me, requires an analysis of prior practice in order to determine what was or was not covered by the con- tract and to ascertain the meaning and intent thereof I also note for further consideration that the Association did not seek to renegotiate certain matters during the renewal or open periods between contracts when it might have done so. Finally I note, as will develop, that there are professional qualified employees here involved and the wage structure does not appear to fit the classi- cal concepts relative to distinctions between "gen- eral" increases and "merit" increases, particu- larly in that the merit system with the guide curves has always incorporated certain competitive aspects or considerations and therefor directly or indirectly economic considerations Perhaps the difficulty herein stems, in part, from the inclusion over the years in the merit system of some elements which in most cases in a merit system involving production workers would not be involved or at least not determined by unilateral act of the employer. The principal questions for resolution appear to be. (1) What does the term "general increase" in- volve or mean under this contract) (2) What does the merit system involve and how do the guide curves relate to it? (3) What is the effect of the competitive adder on the salary structure? (4) Was the Respondent obligated to negotiate, during the contract, concerning the competitive adder? (5) Assuming an obligation to bargain as to the com- petitive adder, did Respondent in 1968 fail to negotiate or bargain concerning the competitive adder prior to July 1, 1968, or by putting it into ef- fect on July 1, 19689 C. The Facts 1. The guide curves (What are they? What has been their place in the wage-salary administration structure of Respondent?) There are 9 guide curves and they define some 10 bands. These appear on a paper having vertical and horizontal axis with the dollar figures on the vertical axis, with the highest figures on top and the lowest on bottom, indicating salary per month. Along the horizontal axis are numbers cor- responding to "Years of Experience Credit" rang- ing from the lowest on the left to the highest on the right. "Experience credit" means years of service with the Company plus an allowance which represents research experience from the date of the B.S. degree. Attached hereto as Appendix B is an il- lustrative but not an actual guide curve, since the 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD actual curves as set forth, supra, have not been furnished to the Association.4 Respondent uses these guide curves and merit ratings related thereto in order to give individual merit increases. The assigned merit ratings place an individual within 1 of 10 particular guide curve ranges from 1 at the top to 9 at the bottom These are numbered 1, 2, 3, 4, 5, 5a, 6, 7, 8, 9. There are accordingly 10 different merit ratings each con- forming to 1 of the 10 bands defined by the guide curves. The top is open to infinity and the bottom theoretically to zero. Under article XII, IA, above, the Respondent gives merit raises on an individual and not a group basis. Each year the Company examines each rated person in the bargaining unit individually to deter- mine whether to give the individual a merit raise pusuant to article XII, IA and, if so, how much. One of the matters considered is salary position with respect to the curves. This is indicated by his merit rating within the 10 bands and corresponds numerically to 1 of the 10 bands, and by his ex- perience credit which corresponds to a space along the horizontal span of the band. The factors in ad- dition to the curves which management considers in determining whether to give an individual a raise are otherwise subjective and qualitative, and these involve the time of the year that would be ap- propriate, what it thinks of the man, his prospects, potential, progress, etc. Respondent accordingly uses merit ratings and guide curves in making its subjective judgment as to what raise, if any, to pay an individual. Respondent has put a new set of curves into ef- fect every year since about 1948, and it has put a new set into effect on July 1 every year since 1954. It constructs the curves from data it obtains yearly from competitive companies. Originally, Respon- dent had included data from companies other than competitive ones but in 1954 or 1955 the number was reduced from about 28 to 10 or 11 (this number has also been 12 and most recently 9), and those were companies considered to be a competi- tive group. Ordinarily the data has been accumu- lated in the autumn of each year and the new curves announced about March of the following year. These curves accordingly would be based on data that would appear to be nearly a year old by the time they were put into effect on the following July 1. Since the inception of the curves and the merit system, the following changes, among others, have taken place: Initially the "curves" were three straight lines. The straight lines were changed to curves and the number increased from three to six to eight to nine, the present number. In dealing with and constructing the curves the Respondent has made various changes in the curves. Each year, as they are constructed anew, they have been higher than the year before. Changes have also included: the changes from the original straight lines to curves; the increase in number of curves, which increased the salary spread;' introduction of a PHD degree factor since 1963 in the upper left-hand quadrant to take into account that Respondent has more PHD's than its competitors; building an increment into the lower right-hand corner because Respondent didn't be- lieve the curves should taper off as much there; since at least 1964, Respondent has unilaterally smoothed the curves and made the slopes and the spaces between them look in its judgment more reasonable. This smoothing has changed the curves level in amount up to 3-1/2 percent. From 1957 to 1961 Respondent unilaterally built a percentage implement called the "plus factor" into all the curves above the median. This was an "anticipatory factor" intended to anticipate the movement of salaries during the year. It covered all employees in the upper salary brackets Since at least 1964, Respondent has also unilaterally built a percentage implement into the upper left-hand quadrant of the curves, this being an anticipatory factor meant to anticipate the movement of salaries during the year caused by increases in starting salaries. All of the foregoing- changes were made by the Respondent on its own. At no time did the Associa- tion make any request to negotiate concerning changes in these curves or the construction of the curves until the 1966 request for the guide curves referred to, supra. 2. The competitive adder The Respondent contends that the competitive adder which it introduced into the curves in 1966 did nothing more than make a further change in the curves which would anticipate the change in sala- ries that would occur in the year involved In other words, that it was seeking to anticipate or project the general change in competitive salary levels dur- ing that particular year, rather than to base the curves solely on previous data coupled with the kind of adjustments referred to above. The competitive adder was defined by the Respondent in a memorandum of April 17, 1968 (which was presented to the Association), as follows: DEFINITION COMPETITIVE ADDER Competitive adder is a percentage increment to the salary guide curves. The increment represents a forecast of the impact of a variety ' Appendix B (G C Exh 12) was drawn by an association representative on the basis of information furnished by Respondent and received without objection ' Respondent increased its spread because its competitors had increased theirs EMERYVILLE RESEARCH CENTER 509 of economic conditions on competitive salary levels. (It might more appropriately be called an "anticipatory factor.") The adder is arrived at through study of such economic indicators as, wage settlements in the major industries , trends in gross national product, overall demand for technical/profes- sional talent and inflationary trends-but is not limited to these. In sum , the objective of competitive adder (or anticipatory factor) is to ensure that we will maintain a competitive salary postition on a current basis, i.e., each year, when we mea- sure our salary levels against those of competi- tion, we should find that we have moved in consonance with that competition-as opposed to a less desirable " ahead-behind " situation. April 17, 1968 Although the above refers to a number of ele- ments as criteria used in arriving at the competitive adder, Respondent's witnesses Douma and Geggis testified that the reason for the adder was an effort to approximate the changes that would occur on the part of their competitors in the oil and chemi- cal industry and that this was the main considera- tion; namely, to maintain a comparable position with competition with respect to salary levels. The extent to which this effort were successful could largely be determined by whether the guide curves with the adder included, by adding it to the points that had been arrived at without the adder, would approximate new guide curves without an adder a year later.' The effect of the adder is, as set forth, to raise the level of the guide curves. Whether or not this affects salaries and how it affects salaries will be discussed hereafter. I note that in the previous deci- sion, 174 NLRB 114, dealing with the guide curves, the Trial Examiner stated "although the collective bargaining agreement specifically provides for bar- gaining for a general increase , by using the term competitive adder Respondent effected a unilateral general salary increase without bargaining about it with the AIS." In connection with this "finding" the parties stipulated in this proceeding that the prior case did not involve the question of whether or not the introduction of the competitive adder was an unfair labor practice' and further indicated that the matter of the nature of the adder was to be fully considered herein.' The General Counsel would not stipulate if the question of whether the adder was a general increase was litigated in the previous case.9 A consideration of the decision in the preceding case indicates that this "finding" was not necessary to the Board decision. The only item I consider of significance in this respect is that the matter of the adder did have a bearing on the necessity for the guide curves. I conclude that this is what the Board so found in making and arriving at its decision. I ac- cordingly consider that this "finding" of the Ex- aminer that the adder was a general increase was neither a formal finding nor a necessary part of the decision.10 This latter conclusion was arrived at by myself prior to noting that the Board itself in a brief filed with the court of appeals in the prior case has referred to the same finding and stated as follows therein at footnote 21: The Company has not been injured by the Trial Examiner 's gratuitous remarks (R. 30) that the Company's introduction of the com- petitive adder amounted to "a unilateral general salary increase without bargaining," since neither he nor the Board made such a for- mal finding. [Emphasis supplied.) Further- more , there is ample warrant for his suggestion that the procedures have important similarities: both "are based on salaries that competitors of [the Company] pay or will pay" and "have the effect of increasing the salary structure by an overall percentage" (R. 30). It is arguable, to say the least, that the Company could not ° Douma testified on direct examination Now, in 1966, did the Company put into its curves an anticipatory factor called the competitive adder'[ A Yes Q And what was that, what was the reason that management de- cided to do that then9 A The competitive salaries moved from year to year and in an- ticipation of this movement , in order to make sure that our people were paid competitive salaries, we built in this factor - anticipatory factor or competitive adder On cross-examination, Douma testified Q (By Miss Girard) Do you know, first of all, Mr Dourna, if the companies with whose systems you 're familiar and with whom Shell exchanges data-if any of those use some kind of anticipatory factor as Shell does in their salary administration system9 A I'm sure some do, but I couldn't tell you for sure who they were or precisely how they arrive at it I'm also confident that some don't The problem was really that when you collect data for a certain date as of one year and 12 months later you collect the same data for the same people and the salaries have gone up, then you know if you are going to keep your people competitive with those people you 're going to have to build in some kind of anticipatory factors They may have raised those figures by deciding to change everybody's classification from chemist to senior chemist, and yet this would have an impact on the average salary of the group And this sometimes frankly is done So our problem is to make sure that our people keep up , because you can lose a man just as fast because somebody offers him a senior position somewhere else, even though they claim they are paying their chemist position the same as yours even though most of their people are classified as seniors That's the problem you run into Seep 734 of tr Also p 73 thereof ° See particularly pp 72-73, eta(, oftr ° See p 734 The General Counsel appears to have left this open for con- tention by stating Miss GIRARD Your Honor , 1 will stipulate I think the facts of the other case show that the General Counsel and the Board do not allege in its complaint as an unfair labor practice the inclusion of the com- petitive adder But whether it is or is not a general increase mayor may not have been found in the other case to have been so as a fact with re- gard to the ultimate issue of the illegality or the legality of not supply- ing certain information to the AIS 1i As is evident herein the adder, at first , may appear to resemble a general increase but upon further detailed analysis I have concluded it is not 510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD refuse to bargain about the size of the competi- tive adder. I therefore am proceeding to consider the matter of whether or not the adder constitutes or is in the nature of a general increase from the record set forth herein after first noting what discussion, if any, was had with respect to the competitive adder in 1966, 1967, and 1968. In connection with negotiations in 1965 and 1966, starting about July 1965 the Association and the Company had a series of meetings, discussing the Company's position and what it did in constructing the curves as set forth above. According to the testimony of Respondent witness Douma, a member of the executive com- mittee of the Association in 1965, stated that the "Company had the absolute right to construct the curves." In the spring of 1966, about May 6, the Respondent proposed to the Association that it agree to Respondent's putting a 3-1/2 percent com- petitive adder into the curves. The Association refused to discuss this proposal. Association witness Magoon admitted that the Association advised the Respondent that a concern it had with respect to the competitive adder proposal was that "under the agreement the Association could not talk about the competitive adder." The Company also proposed to change the agreement so that the Association could talk about the matter. This proposal presented to the Association about June 2, 1966, by the Respon- dent involved a number of sections. Section 4(a) thereof provided:" "In addition as of July 1, 1966, each of the salary guide curves to be put into effect as of that date will be adjusted upward by 3.5 percent at all points." Section 4(b) thereof provided: "Effective as of July 1, 1966, Article XII paragraph 2 of the current Agreement shall be changed to read as follows: In order that either party may present its ideas con- cerning the general subject of wages, including a general salary increase, the Association and the Company shall meet upon request of either party for this purpose at reasonable times and intervals. No general increase under 113 above shall be put into effect until approved by the Association." (Emphasis supplied.) According to testimony of Respondent witness Douma, the Association said it wanted no part of the competitive adder and therefore wanted no part of this change in the agreement.12 Following these discussions in 1966, the first competitive adder was put into the curves on July 1, 1966. During the spring of 1966, there had also been discussions about a general increase. About 3 weeks after July 1, 1966, a general increase was agreed upon by the parties in the amount of 4-1/2 percent retroactive to October 1965 except for a small number of per- " Resp Exh 9 " As discussed hereafter , the Respondent in June 1968 again proposed to change the language of art X11 , par 2 According to Geggts, at that time in connection with a different association proposal, he suggested a modifi- cation of contract to cover it, although Respondent considered and sons who may have received 2 percent in April 1966. A few months thereafter in the fall of 1966, the Association requested another general increase of 7 percent. Association witness Eugene Magoon, former executive committee member, vice chairman, and chairman, testified the Association needed the 7-percent general increase it was requesting even though the adder had been put into the July 1, 1966, curves. After the adder was incorporated in the salary system, the Association executed two agreements, one in 1967 and the other in 1968. Both main- tained the same article XII and both gave the As- sociation the right to negotiate for general increases while at the same time maintaining the right of the Respondent to give merit increases. As set forth, the competitive adder was also in- corporated in the guide curves on July 1, 1967. Magoon testified that it was his understanding from what Douma told him in 1966 that the adder was to be in the guide curves each succeeding July 1 thereafter. In 1968 the meetings and discussions occurred which led to the instant case. In the fall of 1967, the Association had opened the contract for modifi- cation. It did not seek modification of article XII, sections 1 and 2, but of numerous other provisions. On January 5, 1968, certain negotiated modifica- tion changes were approved. During the fall 1967 negotiations, according to Geggis, the question of the adder came up indirectly in relation to an As- sociation contract proposal calling for the showing of an individual's placement on the guide curves at the time of announcement of a new raise. An as- sociation bulletin of January 17, 1968, explained "The Executive Committee felt that this was espe- cially important in giving a continuity to the salary picture under the new Competitive Adder System." On February 2, 1968, the Association requested a meeting with the Respondent to "continue the sa- lary negotiations of November 6, 1966 [sic].13 The Association wishes to further explore and discuss the system of salary administration that was begun on July 1, 1966 and is currently in use by the Com- pany." [Emphasis supplied.] William Leonard, Association executive commit- tee member, vice chairman September 1967, chair- man in February 1968 and committeeman to February 1969, testified the salary system referred to included the adder which had been introduced and put into the curves July 1 each year. Leonard stated that at the February 29 meeting the spokesman for the Association spoke about the adder and further testified. negotiated as to this proposal anyway Geggis said the Association did not request or pursue such modification 13 See G C Exh 4, Resp Exh 1 0 , re Nov 9, 1966, and Resp Exh 1 I , re November 1966 EMERYVILLE RESEARCH CENTER 511 He 14 stated that the unilateral introduction of the competitive adder was believed by the A.I.S. to be an unfair labor practice. Does that answer your question? * Well, it was also stated that we want to discuss the competitive adder now; we wanted to learn about it; we wanted to learn what the economic factors were that it presumably covered; and we wanted that information in addition to the usual type of information-that is, the qualitative description of the guide curves in preparation to the drawing up of a sa- lary proposal which the Committee intended to eventually give to Company representatives. The response was willingness to meet with us and discuss competitive adder as well as the guide curves qualitatively, and we did meet. Subsequently a meeting was held on April 10 at which Geggis for Respondent outlined the nature of the adder and agreed to write it down for the As- sociation, which was done and submitted to the As- sociation on or about April17 as set forth, supra. Leonard was asked by the Trial Examiner, "What did they say on April 10?" and he replied: THE WITNESS. That they presumed in the present economic picture that a competitive adder, which traditionally is applied- tradition the past few years-supplied on June 1st, would be on the order of 4.5 And I thought it was four percent. This is 4.5 TRIAL EXAMINER. Who made the statement) THE WITNESS Mr. Geggis. This is what they anticipated. Leonard also testified that at the April 10 meet- ing in the discussion concerning the adder. "Mr. Geggis stated that through the competitive adder 80 to 90% of the Group B15 members would receive raises." [Emphasis supplied.] In a bulletin issued April 30, 1968, the Associa- tion referred to the February 29 and April 10 meetings as follows: On February 29, in the first A.I.S -Manage- ment salary negotiations since November, 1966, the A I.S. asked for a presentation by Management of its Salary Administration. A.I.S members are aware that in the interven- ing period A.I.S. Executive Committees have opposed the Competitive Adder, unilaterally instituted by Management on July 1, 1966, and have attempted to obtain the salary Guide Curves and other salary information which the A.I.S. is entitled to have. The present need for a substantial upward adjustment in salaries as well as the determination of the A.I.S. to negotiate our salaries has led us to resume salary negotia- tions in spite of the handicap of bargaining without the desired salary data. The present discussions will lead into new salary proposals by the A.I.S. [Empahsis supplied.] In a second A I.S.-Management meeting on April 10, Mr Geggis presented the current Sa- lary Administration. Although the Salary Administration has been greatly modified over the years, its basic objec- tives have been to pay competitive salaries and within the Company to compensate on the basis of relative contribution with real dif- ferences between salaries of individuals. Shell has no "salary increase" budget item, the money needed to pay competitive salaries is fitted into the total budget. Each year old Guide Curves are discarded and new ones are derived. The derivation of Salary Guide Curves to be initiated on July 1, the start of each salary year, begins yearly with the averaging of 4800 pieces of salary data ob- tained as of September 1 of the previous year from 12 companies (names are confidential). Rough competitive curves are obtained by con- necting decile points of five year experience in- terval groups. Data for Ph.D.'s are isolated to obtain a correction to the average curves for Ph.D. content. There is smoothing of the data to give consistent decile spacings. The super- visors are removed from the data to give a new set of derived Guide Curves for Group B as discussed in terms of "Merit Ratings" in Mem- bers Bulletin S8-67, September 1, 1967. Finally, the Competitive Adder (or Anticipato- ry Factor) is added to all points of the derived curves to obtain the final Guide Curves. The Adder which Management projects for next year, starting July 1, 1967, (sic)'6 was announced as 4.5%. In addition Management intends to add a further small percentage (amount is con- fidential) to all points on the Guide Curves between 20 and 40 years Experience Credit. [Emphasis supplied. ] In the use of the final Guide Curves an in- dividual's actual raise is worked out between Supervisor, Department Head and Salary Su- This refers to outgoing Chairman Eastman who testified A Yes I made a statement that there were three major points The first point was that we wanted to continue salary negotiations 0 Mr Eastman, who made these points' A I did We wanted to continue salary negotiations which were broken off for want of data The guide curves had been requested, and although a e didn't have them, me ianted to try and reach an interim agreement is irhout then, Second of all, I emphasized quite strongly the A I S continued op- postition to the Company's continued use of the competitive adder without the agreement of the Association And, thirdly, I requested that the Company representatives present to us at the next meeting a full, complete, open presentation explaining what the competitive adder was-how it was derived, where it came from, and any other pertinent information about the method of salary administration in use [Emphasis supplied I ° Those employees represented by the Association 1° Apparently 1968 is intended 512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pervisor, but the department Head decides ac- tual placement in relation to the Guide Curves. The minimum raise is still about 5%. The fol- lowing definition of the Competitive Adder was given to us by Mr Geggis: (Then follows same as set forth, supra.) This explanation of salary administration provides us with an operational definition of the Guide Curves, but we still do not have the Guide Curves themselves. As set forth, Geggis furnished the information orally on April 10 concerning the adder and also by the written memorandum of April 17. At the April 10 meeting, Geggis informed the persons present with respect to a 4-1/2 percent adder to be inserted into the curves on July 1. The evidence reflects some difference as to exactly how this was posed. According to Leonard's final testimony, Geggis said on April 10 as set forth, supra, that they presumed the adder would be on the order of 4.5 percent. "This is what they anticipated " The bulletin of April 30 states as set forth: "The adder which Management projects for next year starting July 1, 1967 [sic] [should be 1968] was announced as 4.5%." Geggis testified as follows Now, in the course of telling the Association about that-well,-No, did you tell the As- sociation during that meeting before or after you read that statement what the Company planned to do with respect to the competitive adder in '68? A. Yes. I said that we would be putting 4 and a half percent as competitive adder in the construction of the guide curves for '67-'68. The above indicates the Company's stated posi- tion. How firm this may have been is a question. Leonard admitted that Geggis did not say he would not negotiate concerning the curves. Geggis testified credibly he was prepared to do so. The As- sociation did not ask to negotiate on April 10 con- cerning the adder, propose a different amount, or object to it. The statements above attributed to Geggis on April 10 do not reflect an inflexible posi- tion as to the adder. Geggis did not refuse further discussion and such was not requested by the As- sociation. The Association has claimed difficulty in bargain- ing about the adder without the guide curves. Respondent claims the Association can determine the effect of the adder from the salary lists it receives without the guide curves . In this connec- tion , Association witness Magoon admitted the As- sociation can determine the movement of salaries from year to year by reference to salary lists which it receives . I would also note in this connection that if the adder were a general increase, this should evidently enable the Association to bargain with respect to it. If the adder is not a general increase, but simply a factor in the guide curves, while the wage data might enable the Association to reach conclusions without the curves, this would appear both more difficult and less precise. But if the latter is true as to the nature of the adder then it would appear that the complaint would fail in its allega- tions of violation by Respondent's announcing or granting unilateral salary increases insofar as it is predicated on the introduction of the adder. 3. The MSDC proposal Following this, a meeting was held on June 6 at which the Association submitted a salary proposal setting forth minimum salary distribution curves (called MSDC's) which the Association categorized as a general increase proposal, but Respondent dis- agreed. Association witness Leonard testified that the MSDC's were not substituting for or instead of the guide curves. This June 6 proposal stated in part: Prior to July 1, 1966, negotiations between the A.I.S. and the management of Shell Development Company led to mutually ac- ceptable minimum salary increases for the professional staff at Emeryville Research Center. These salary increases were based on factors affecting the economic status of every- one in Group B equally; they were general in- creases put into effect at a mutually agreed time. Criteria for exclusions from these minimum increases were negotiated and agreed to by the A.I.S. membership. After July 1, 1966, management unilaterally changed this working relationship by introduc- ing the "competitive adder". It was claimed that this salary administration policy conforms to the practices of "significant competition" and that it was adopted in order to avoid the "ahead-behind" salary situation. The A.I.S. protested this unilaterally adopted change in salary administration on the grounds that it introduces economic factors which af- fect all Group B members equally, into the domain of individual salary increases and leaves no assurance that a Group B member's salary keeps up with the rising cost of living and increasing productivity. The implementa- tion of the policy since July 1, 1966, has led to a salary lag, especially large for persons with high experience credit. It appears that the at- tempt to get away from the "ahead-behind" situation for the group has led to an "only-be- hind" situation on an individual basis. The A.I.S. is willing to recognize a salary ad- ministration system which grants salary in- creases on an individual basis if the general economic factors which are part of such in- creases are subject to negotiation and provided that individual salaries of members of Group B are not allowed to fall below salary levels established by criteria set forth in this proposal. The right of the A.I.S. to request a general increase for all members of Group B is also maintained. [Emphasis supplied in preced- ing line only.] EMERYVILLE RESEARCH CENTER The proposal then states drastic changes are needed to correct inequities which it then discusses and subsequently makes a salary proposal. It says guide curves are not yet available. Also they are recomputed yearly and bear no direct rela- tionship to the curves used during the previous year. The proposal then asserts: (I) This feature makes it impossible for members of Group B to determine what changes in salary levels are planned for any year even though the percent "competitive adder" is ,announced. In fact, this system with the "competitive adder" applied to the curves ap- pears designed to mislead the members of Group B into believing the "addition" is to last year's salary levels. It seems rather meaningless to announce the percent "competitive adder" when it is added to, and computed on, an un- defined, secret base. [Emphasis supplied.] The letter of proposal then claims the guide curves do not conform to "professional-wide data" particularly those with high experience credit; that plans to bolster the system are inadequate; that management's definition of "significant competi- tion" is too narrow; that the present system cannot be adequately policed by the AIS; that management should depart from its present system of granting increases only when they amount to 5 percent or more, that the Association does not have access to information necessary to understand salary ad- ministration of employees in the Service Division." It then proposed: The A.I.S. proposes that salaries of Group B be administered according to the following three guidelines: (1) The merit guide curves used by manage- ment for salary administration will be such that they result in salary distributions which equal or exceed a set of Minimum Salary Distribution Curves (MSDC). By June 30, 1969, all salaries will equal or exceed the MSDC given in Figure 1 of the Appendix to this proposal. (It should be emphasized that the MSDC represent percentile distribution of salaries as a function of experience credit, are not directly related to merit, and are not intended to be the same as the Merit Guide Curves used by Management.) (2) Adjustments to the salaries of all Group B members will be made on or before June 30, 1968, to conform to the MSDC given in Figure 2 of the Appendix. (3) All Group B members of the Service Divi- sion will receive a general salary increase of 10% on or before June 30, 1968. APPENDIX The following procedure was used to deter- mine the percentile minimum salary distribu- tion curves given in Figures 1 and 2. 513 (a) Percentile salary distribution curves were constructed for 1965 by using percentile data points from the "all-industry" Tables of the 1965 National Survey of Professional Scien- tific Salaries. The resulting curves were cor- rected for Ph.D. content of the appropriate segment of Group B. Slight adjustments on the raw salary distribution curves were made to eliminate any negative slopes. The year 1965 was selected as a reference point because this was the last year in which a negotiated and agreed upon salary increase was put into ef- fect. (b) The MSDC's for 1968 and 1969 (Figures 1 and 2) were then derived from those of 1965 by addition of percentages reflecting rises in cost of living, increases in productivity, and Bay Area cost of living dif- ferentials. The MSDC curves 1 and 2 referred to above are attached hereto as Appendixes C(1) and C(2). The MSDC's accordingly are not a substitute for 'the guide curves. They would also be inoperative to the extent the salaries management pays on its own are in excess of the MSDC's minimum levels. They would be operative only to the extent raises the Respondent pays on its own with reference to its own curves during the salary year are less than the minimums set by the MSDC's. To such extent the MSDC's are intended to require Respondent at the end of the year to give additional raises to meet them. Raises included would not be in the same percentage amount and under the proposal would give more effect to experience credit. The Association considered that the curves were minimum salary distribution curves with a certain percentage in the top group (10) other percentages of persons in groups below and a certain percent- age (10) in the bottom group. They were not in- tended to alter Respondent's existing policy of giv- ing raises to group B members at varying times throughout the year. They were intended to result in an upward movement of Shell's salary guide curves. Association witness Eastman, executive committee member from March 1967 to September 1968, testified under these curves "not everybody but a large percentage should have received a raise in June." The MSDC's were to be complementary to but not a substitute for the guide curves. Eastman testified that in 1968 raises would vary from 0 to 25 percent on up and in 1969 from 7 to 20 or 30 percent under the MSDC's. The parties again met on June 18 to discuss the MSDC proposal. Respondent objected to the proposal on ground it was not a general salary in- crease as the term had been used at Shell under the contract-Association witness Eastman testified he had never heard of such a general increase at Shell Geggis and Douma both testified as set forth that a "general increase was to practically all employees " About 30 employees not covered herein 514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD at the same time and in the same amount." The MSDC's, after being presented on June 6, were discussed on June 18 and 25 (and in July). At the end of the meeting on June 25, the Association, through Leonard, asked Geggis whether the Respondent intended to put into the curves the 4- 1/2 percent adder on July 1. There is some dispute as to whether Geggis said he would announce it the next meeting or whether he said "yes."" In any event, on June 28, the question was again brought up at the beginning of the meeting . Geggis said that they were putting a 4.5 percent adder into the curves on July 1, the next workday. The adder was accordingly inserted on July 1. Thereafter, in July, there occurred further discussion of the MSDC proposal of the Association. Finally, on July 30, the Respondent rejected this proposal. The issues obviously posed by the foregoing are: First, whether or not the adder is in the nature of a general increase and if not whether the contract covers it. In order to evaluate this, I will first con- sider (a) what it actually does or does not do and (b) what certain data may or may not esta,blish with respect to the granting of wage increases at the Respondent in the past. Second is the question whether the Respondent either bargained or was expected to bargain or could have been expected to bargain with the Association concerning the adder during the period involved-that is whether any real request was made by the Association to so bar- gain concerning the adder. Third, whether or not there is any inconsistency between going ahead with-the introduction of the adder on July 1 before completing discussions as the the MSDC's. D. Additional Facts, Findings, and Conclusions First, with respect to the matters involved, is a contention of Respondent that Section 10(b) of the Act requires the dismissal of the complaint herein. Inasmuch as this would be dispositive, if applicable, and a necessary prerequisite to a valid charge and complaint, I am first considering the same although the ultimate conclusion I am reaching herein will not be affected thereby. Respondent evidently con- tends that the unilateral insertion of the adder into the curves in 1966, if it were an unfair labor prac- tice, should have been challenged within 6 months thereafter. The difficulty with Respondent's posi- tion is that the charge herein filed August 27, 1968, involved the adder inserted on July 1, 1968, not 1966, and the contract pursuant to which this adder was inserted was a renewed contract effective November 16, 1967, to November 16, 1968. This charge, filed August 27, 1968, accordingly involves an act of July 1, 1968 (less than 2 months before), which is to be construed under the current contract which was not even extant in 1966. Necessarily in- volved is interpretation and application of this con- 18 Leonard and Wald, Association witnesses, said Geggis said he would announce it subsequently Geggis testified he said "yes " tract effective in November 1967 to this act of July 1968 The legality of insertion of this adder would accordingly appear to be based on the time it was put into effect (July 1, 1968) under the contract then in effect. The legal or illegal act here in question is not legality of the contract but of an act on July 1, 1968, under all the circumstance. I ac- cordingly find Section 10(b) inapplicable. Another one of Respondent's contentions is that the adder is in essence a permanent part of the wage structure, that is a condition of employment and therefore something that could be unilaterally effected. In my judgment, this is intertwined and re- lated to the question concerning the interpretation and application of the contract, that is, what the Respondent may or may not do thereunder pur- suant to its right to give individual merit increases vis-a-vis what it must bargain about with respect to general increases. Accordingly I will consider this in conjunction with and as part of the discussion concerning the matter of whether or not the adder amounts to a general increase, and whether or not it is part of the merit system. 1. The adder as a general increase A principal question to resolve herein is what does the term "general increase" as used in this contract mean? The term "general increase" as used generally has some significance but I consider what the term means as used in the instant contract particularly pertinent. There is no question that as applied under the contract the parties have generally used the term "general increase" to connote an increase to all or almost all of the employees in a particular amount at the same time. Respondent witness Douma, who had been involved in salary administration since 1949, testified:19 Now, based on that experience, can you tell us what meaning the term "general increase" has at Shell? A. At Shell it's meant that the great majori- ty of the individuals get the same increase either in absolute terms or percentagewise at the same time. Q. And by "great majority," you mean in percentage terms like what? A. 98, 99 percent. Respondent witness John Dorin, who worked in personnel and industrial relations from 1951 to 1962, testified: Now, the general increases which were given from '51 to '62 from time to time, were they given to substantially everyone in the group? A. To my knowledge, they were given to everyone in the group. 0. At the same time? A. At the same time. 18 Since 1962, Douma has been manager of the Service Engineering De- partment EMERYVILLE RESEARCH CENTER Q And in the same percentage amount? A. In the same amount. According to Douma, in the 1965-1966 negotia- tions the Association took the position that "gen- eral" means "all and not some" and referred to a dictionary to support its position. Association wit- ness Magoon also testified that in 1965-66 the As- sociation had taken the position that a "general" with any exclusion was not a "general" at all. Magoon, on cross-examination, testified that since he commenced work for Shell in 1956 or 1957, ex- cept for 1965-66, in a general increase everyone got the same amount or same percentage In 1965-66, most received 4-1/2 percent retroactive to October 1965. According to Magoon, a number received 2 percent in April 1966. The percent receiving general raises was 98.8 with a total of five persons excluded because of declining merit ratings. Whether or not these five are ones who received 2 percent in April 1966 is not clear. General Counsel's Exhibit 16 indicates this general raise was 4.45 percent of the payroll. It follows that all but a few must have received the 4-1/2 percent general increase. Association witness Wald testified the last general increase was in 1965.20 Association witness Leonard testified that the Association's June 10, 1968, bulletin defines a "general" to in- corporate these three elements. The June 10 bul- letin reads: Prior to July 1, 1966, negotiations between the A I.S. and the management of Shell Development Company led to mutually ac- ceptable minimum salary increases for the professional staff at Emeryville Research Center. These salary increases were based on factors affecting the economic status of every- one in Group B equally; they were general in- creases put into effect at a mutually agreed on time . Criteria for exclusions from these minimum increases were negotiated and agreed to by the A.I.S. membership. I also note no denials of the foregoing from any of the Association witnesses although there was testimony by Douma for Respondent and Magoon, Association witness, that on a few occasions the As- sociation and the Company agreed to exclude ap- proximately 5 people out of the unit of about 400 from a general increase. Five were apparently so treated in 1964 and also in 1965.21 Such exclusion from general increases apparently were predicated on declining merit ratings. The practice relative to granting merit increases has been previously set forth. It should be noted that these were based upon the guide curves which were made up annually by the Respondent from the data set forth. These curves were adjusted in the respects enumerated, including increasing them to 20 Evidently referring to the increase agreed on in 1966, retroactive to October 1965 Testimony of Association witness Magoon is to similar ef- fect 2' G C Exh 16 indicates no exclusions in 1960, 11 in 1962, 5 in 1964, 515 take into account anticipatory factors in the upper half between 1957 and 1961 as well as the other adjustments for the PHD factor, changes in starting rates, experience, etc. In so doing, the Respondent took into account competitive wages paid by those firms considered to be comparable to it. This neces- sarily involved taking into account economic fac- tors which are inevitably involved in a competitive process. A principal difference between what these factors and those the competitive adder involve is one of time, for instance, the curves prior to the adder would incorporate competitive or other aspects as of a given time. In the circumstances when the curves were increased above the median from 1957 to 1961 to take into account anticipatory changes, these would involve contemplated changes, but to reach a decision as to these, economic elements would necessarily have to be considered. In the case of the adder, what it ap- pears to do is take into account economic aspects in the form of trends in gross national product, in- flationary trends, wage settlements in major indus- tries, and overall demand for technical/professional talent. The adder looks in futuro with respect to the movement of salaries of Respondent's competitors. There is no question that this takes into account items that would ordinarily be taken into account in effecting what is generally considered as a general increase. The same though, to a lesser degree, is true of items that were previously considered by the Respondent in adjusting the guide curves upwards on the basis of an analysis of its competition in the preceding period. Unless Respondent were to remain consistently behind its competition during the entire time, it would necessarily in effecting the guide curves have to be taking into account like factors in a perhaps more general way. The com- petitive adder was evidently included to take into account in futuro the same elements. Admittedly, this adder in the curves could eliminate the need for a general increase or a substantial part of the need for a general increase insofar as the em- ployees generally might be affected thereby. According to Magoon, Frank Douma said con- cerning the adder in May 1966 that one of its ef- fects was that anyone retaining a merit rating under the adder system would receive a raise22 within a 2- year 'period. Magoon additionally testified that Douma also said that "if the system worked as hoped for, the A.I.S. would have no need for a general increase." According to Leonard, in the 1968 meetings concerning the adder, Geggis stated that, through the competitive adder, 80 to 90 per- cent of the group B members would receive raises. These statements appear to be undenied, and in any event I credit Magoon and Leonard with respect thereto. and 5 in 1965 No "general" increase was given in 1961 or 1963 PY As reflected both in testimony and Resp Exh 15, "merit " increases have averaged over 5 percent ( at least since July 1964) 516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The latter makes it appear that there was an ef- fort to use the curves to avoid a general increase on the part of the Respondent. No doubt this may have been one of Respondent's reasons therefor. Respondent's competitors or those whom Respon- dent considered to be its competitors were not granting general increases but maintaining a wage policy which had not been granting such increases. It may be that Respondent was seeking to effect such a wage policy and avoid the need for a general increase by implementing through the adder its pol- icy with respect to merit increases. However, the fact remains that Respondent in pursuing this pol- icy was acting in a manner similar to its previous conduct with respect to merit increases but making one change therein-the adder. Admittedly, this was a substantial change but one that appears to substantially conform with prior conduct in establishing merit limits. Any merit system has to have certain limits. Ordinarily, these are bargained for by establishing minimums and maximums within a rate range which usually moves up when general increases are given. In this case, throughout the course of bargaining between the parties, the merit rate range system had been delegated to the Respondent, with the As- sociation from time to time negotiating for a general increase What the adder appears to do is to increase the limits of the curves and raise them higher than they would have been otherwise But this does not necessarily mean that "general in- creases" would be given to the employees as the term "general increase" has been understood either under the contract or in general usage. Each em- ployee still has to be given a merit rating that places him within a particular band or "rate" range and then a specific increase given to him whether there is or is not an adder. What the adder does is tend to raise the curves and therefore the probability of employees receiving larger increases. It does not follow that the employees would all get larger in- creases or any increase or the same amount of in- creases based upon the addition of the competitive adder. The likelihood appears to be that more in- creases will result and that the increases will be greater. This consequence would normally follow from the higher curves and the fact that average "merit" increases since July 1964 have exceeded 5 percent and since 1966 increased upward to 8 per- cent. However, this does not mean more to all, doesn't lead to the same amount, and doesn't result in increases at the same time. Neither does it follow that what has in fact occurred since 1964 and 1966 necessarily will occur So the question is, where does the competitive adder fit in the wage structure? Without a history of bargaining and without the contract, a cogent argu- ment can be made that, although the adder might not be a part of the usual merit system and although not the exact equivalent of a general in- crease, it would be an element in a wage system that should require bargaining. Before evaluating the question of whether under the contract, even though the adder may not be a general increase, it might be separate from the merit system as contem- plated therein, certain matters and data should be considered. First, it should be noted that the inclusion of the adder in the curves does not preclude or prohibit a request for a general increase . It is clear that the Association so understood and did seek a general increase after the inclusion of the adder. In the au- tumn of 1966 it requested an increase of 7 percent which was considered by Respondent and rejected in January 1967. In 1968, it requested a "general increase" for service engineering people. It also in- troduced evidence herein which, according to As- sociation witness Wald, established that salary levels should be adjusted upward from the point they were at the end of the last general increase in 1965 by 23 percent to bring them to the proper point in 1968.23 The Association contended in a statement which it read on July 17, 1968, that the adder is a general increase and asserted therein: It has been and is the opinion of the A I S., that the "Competitive Adder" is a general-type increase and thus is negotiable persuant [sic] to our contract. We base our policy on the fact that the economic factors used in setting the CA, namely increases in cost of living and productivity, are the same ones generally recognized as subject to negotiation for general salary increases. As you know, the proposal submitted by the A I S. to Shell management recognized these factors and used them to establish the MSDC. [Emphasis supplied] According to the testimony of Geggis and the state- ment of April 17, 1968 (supra), given to the As- sociation concerning the adder, the elements of cost-of-living and productivity do not "set" the competitive adder. Douma testified. TRIAL EXAMINER: All right. You refer there to wage settlements in the major-study of such indicators- it isn 't necessarily exclusive- such factors as: "wage settlements, trends in gross national product, overall demand for technical/professional talent and inflationary trends." And then you add. "but it is not limited to these." Now, are those essentially the factors9 THE WITNESS. Yes, these are the things we look at The words were carefully chosen, because we didn't want to give the impression that we have some kind of formula that we weight the wage settlement on the change in the GNP or we weight this. 13 After the adder was incorporated into the salary system , the Associa- tion executed two agreements , both giving it the right to negotiate for general increases EMERYVILLE RESEARCH CENTER 517 It's a matter of looking at these things and looking at the demand for professional talent and saying that in our view, because of these things, saying that if we build about four and a half percent into the curves our people will be paid competitively in the coming year. The following year you may look at exactly the same factors-and it's just a conclusion- it's just a feel for things that tells you five and a half might be the right guess. [Emphasis sup- plied.] The sole criteria which Respondent assertedly uses in determining whether a general increase is appropriate is whether there is a pattern among its competitors of paying general increases to profes- sional employees. Douma stated on direct examina- tion that in the 1966-67 negotiations concerning a general increase the Association presented to the Respondent some "cost of living and productivity figures." He then testified: Q. And did you make a statement to the As- sociation with respect to your views as to the relevance of those items? A. We had gone through this type of thing before, and I think I just repeated what they had heard me say before; that is, what we looked to was competitive parties and not to productivity and cost of living as a basis of sa- lary changes. Douma was subsequently asked on direct ex- amination. Q. Now, the question is: Did the Association reply to the Company's contention that it had never given generals on the basis of cost of liv- ing and productivity before? A. They acknowledged this to be true. Association witness Magoon confirmed that on numerous occasions ^ Douma or Respondent representatives stated "The significant competition does not warrant our giving an increase" or similar statements. [Emphasis supplied.] Association wit- ness Dorin testified that the general increases that were given by Respondent to the professionals from time to time coincided in time, with general in- creases "granted by oil companies in the industry." Dorin also testified- Q. And did Shell Emeryville ever pay a general increase in a period of time in which the oil companies in your survey did not? A. Not to my recollection. The question remains as to what was the key to granting of merit increases before and after the ad- dition of the adder. The Association issued a bul- letin containing certain data, attached hereto as Appendix D reflecting information that it had been furnished with respect to increases granted before and for 2 years after the inclusion of the ,adder. These reflect increases based upon the average number of employees employed throughout the year. In addition, the Trial Examiner requested data with respect to increases granted to those em- ployees who had worked throughout the entire year. The Respondent has objected to this data as not representing a proper basis but furnished such information which is set forth in Appendix E. Respondent's contention in essence is that it would be more accurate to use the average number of em- ployees to determine the granting or nongranting of general increases which it contends are given to those who are there at a given time. However, the Trial Examiner in order to evaluate and compare the preadder period with the postadder period, be- lieved it would be more effective and accurate to consider employees who worked throughout a given year and who might be expected to receive one or the other type of increase to ascertain what the effect of the adder might be. Obviously the latter would incorporate those regularly employed and reflect the extent to which those so employed received an increase during a given year.24 These data as set forth in Appendix D covering average number of employees reflect that there were more increases under the "merit" system (ex- cluding general raises) following the adder than be- fore. The number ranged from 1960 at 62.3 per- cent to a low of 41.8 percent in 1963 and to 56.6 percent in 1965, the year before the adder. In 1966-67, the percentage was 67.4 percent and in 1967-68, 72.8 percent. The number of "merit" in- creases was obviously higher after the adder than before and in the absence of any "general in- crease." The data respecting "merit" increase raises covering those persons who worked throughout the year in Appendix E went back to 1958 and showed highs of 73.59 in 1958 and 66.9 percent in 1960; lows of 46.1 in 1963; 64.0 percent in 1965; 66.4 percent in 1966, and after the adder, 74.9 percent in 1966-67, and 83.0 percent in 1967-68.25 Testimony also indicated that following the adder, in the course of 2 years, only a few people would not receive an increase. Even these figures, whether taking the average number of employees throughout the year or the total number who worked throughout the year, reflect that there was still a substantial number who did not receive a yearly increase after the inclusion of the competi- tive adder. This number, depending on which figures are used, was from about 25 to 32 percent during 1967 and from 17 to 29 percent in 1968. The number of those who were not receiving any increase ac- cordingly still remains substantial after the adder. Also, I have noted the change in eligibility require- ment for a merit increase from a year to 3 months after the adder. Respondent also presented 2" I note that eligibility for a merit raise after the adder was reduced from after the change 12 months to 3 months which could affect comparability data before and 25 These figures in 1966-67 and 1967-68 start with the end of June 427-835 0 - 74 - 34 518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD testimony of Douma that other factors besides the adder could be the cause of the increased percent- age of people receiving merit raises thereafter.26 I also note a question still would remain as to the amounts given in the years and when given. Appen- dix F provides some of this data although not necessarily all that might be pertinent. As previ- ously stated, the Association contended that it had not received a sufficient increase and was seeking a further general increase. Another question regarding the adder is: was the institution of the adder an insertion of something different from either a general increase or an ele- ment related to the merit system? I note first that the complaint appears to view the adder as per se effecting salary increases. Second, both the General Counsel and the Association have contended that the adder is tantamount to a general increase. The Charging Party, as previously set forth, also con- tends the adder is something "basically new in the Company's salary administration plan and something not contemplated by the contract." The General Counsel also asserts the effect of the adder on the guide curves "demonstrates that the adder is a subject on which the AIS has a right to bargain." The Respondent asserts that the adder is simply an additional element in the construction of the guide curves as part of the merit system under the con- tract. For reasons set forth both supra and post, I do not consider that the adder is something which ab- hors the contract. Rather I am finding that it is covered by the contract in the light of the meaning given to the contract by long-established practice thereunder. The complaint, as set forth, alleges that Respon- dent announced a unilateral increase in salaries and put these into effect on July 1, 1968. It is clear that the institution of the adder resulted in no salary in- crease at the time it was inserted. While the adder could result in a number of increases and in more substantial amounts and probably did so in nu- merous instances than would have occurred without the adder, it does not follow that the adder therefore is equivalent to a general increase that must be bargained about under the contract or to any salary increase per se. Appendix F also reflects monthly changes: in number of persons and percentage of persons in- creased; dollar amounts, including dollar range of increases; and range of individual percentage in- creases including low, average, and high. An ex- amination of these do not show general increases. They reflect the number monthly in varying amounts and percentages. There is reflected a higher individual percentage increase range follow- ing the adder but the significance of this is not evident since the number involved in the higher range is not enumerated. More significant is that the average range increased after the adder as shown in Appendix F, apparently by about 2 per- cent. Even so the allegations of the complaint con- sidered as set forth have not been established. The General Counsel cited C & C Plywood, 384 U.S. 903,27 in support of his contention that unilateral announcement and insertion of the adder in the guide curves was a violation. However, this case ap- pears to be inapplicable on the basis of the facts which did not reflect a contractual history, such as here, involving the development, use, and applica- tion of the guide curves by Respondent, herein, in effecting its merit system and granting merit in- creases. It is true the contract here (as there) referred to individual merit increases. But here the merit increases remained individual under a system of practice developed and acquiesced in under the same provisions of contracts for 18 years from 1948 to 1966, which provisions continued to be renewed thereafter, following the adder, to date.28 In addition, the question involved therein was a specific one as to bargaining about a change that eliminated a rate range and provided for the same rate for all employees in certain crews. At the most, the argument that could be made about the adder is that it may hinder, impair, or materially affect the Association's ability to bargain about a general increase, but the adder does not prevent the Association from so doing. Neither does it per se effect an increase. On this basis alone Y6 Douma testified A variety of factors go into the percentage of people getting raises, two depend on how much the competitive salaries move that we get the basis data from It would depend on the age of the group There are dust too many factors to just be able to say this and this alone was the cause of this He was then asked Q (By Mr Hellbron ) Is it the case that the fact that the competitive adder was in the curves and raised them somwhat was one of the fac- tors which contributed to the percentages being a little higher than the last column in those last two years than they were in the years im- mediately before' A Oh, yes But-on the other hand, the fact that we mentioned earlier-the decompression ( as corrected by Appendix A) factor-may have been a far higher factor in this than the competitive adder or the movement of the competitive salaries themselves- the base data TRIAL EXAMINER All right Where would the decompression (as cor- rected) factor-or how would that have been a bigger factor' THE WITNESS Well, since this went into the curves of people with 20 years' experience and beyond, it may have brought a number of them into a position where they could get a merit increase than anything else I dust say "may have " I'd have to sit down and look at the number of people in various places See, you get into the number of people who change their rating, and because it's a tight system, if you have 10 percent of the people at the top and, let's assume that we promote a lot of those people out, then this would in effect serve as a vacuum and pull up a lot of other people from Group 2 to Group I And this in itself will cause the people to move from 2 to I, to get increases All I am saying is there are a number of things that go into this makeup, and to just say this and this alone caused a change-you dust couldn't say it 27 Cf N L R B v Honolulu Star Bulletin , Inc , 372 F 2d 691 (C A 9) 28 Since this type of issue involves contract provisions, history, in- terpretation , construction, and application , resolution of cases may differ from case to case with varying results based on factual differences See N L R B v Honolulu Star Bulletin, supra , fn 27, distinguishing C & C Plywood, supra EMERYVILLE RESEARCH CENTER 519 it would appear that the complaint should be dismissed. As for the question of impairment of or impingement on the Association's ability to bargain for a general increase, this has been inherent in the merit system established and acquiesced in under contracts since 1948 with this Respondent. The guide curves, ratings, and increases thereunder necessarily have had an effect on bargaining for a general increase. It may well be true that the addi- tion of the adder has enhanced such effect. But as I previously noted the parties could have bargained in two successive periods prior to entering into new contracts in 1967 and 1968 to change this effect if such were desired, but they continued to operate under the same contractual provisions set forth in article Xii, sections 1 and 2. Although I question whether the adder per se became a "condition of employment" as contended by the Respondent in the face of Association's ef- fort to arbitrate such in 1966 and the filing of an unfair labor practice case thereafter in 1967, 1 con- clude, as found, that the adder is a rational exten- sion of the established merit guide curve system29 which had been established under the contract and which the Association did not seek to renegotiate on two successive occasions when it could have so done following the introduction of the adder.30 I am therefore finding that the term "general increase" as used in the contract does not encompass the competitive adder to the guide curves and ac- cordingly that the competitive adder in the curves does not amount to a general increase or any in- crease per se. 2. Did Respondent unilaterally effect the adder of July 1, 1968, without first fulfilling whatever obligation it may have had to bargain? In addition to the foregoing, Respondent argues that it did discuss and was willing to discuss the competitive adder and to bargain about it but that the Association did not choose to do so in 1968. This involves a consideration of several matters: First, whether Respondent was willing to discuss and bargain about the adder and whether the As- sociation sought to bargain about it; second, whether or not the Association proposal concerning MSDC's involved negotiations for a "general in- crease" as the term was used in the contract; and third, whether or not the Respondent was obligated to complete discussions as to the MSDC's before it was warranted in putting into effect the competitive adder on July 1, 1968. As previously set forth, the adder was first brought up during 1968 by the Association requesting an explanation of it. On February 2, 1968, the Association requested a meeting "to further explore and discuss the system of salary and administration that was begun on July 1, 1966 and is currently in use by the Company." [Emphasis supplied.] On February 29, a meeting as previously set forth was held. The Association asked Respon- dent for a presentation of its Salary Administration. At the February 29 meeting, John Eastman, out- going chairman of the Association Executive Com- mittee, according to Association witness Leonard, outlined the "history of the objection to the uni- lateral introduction of the competitive adder and stated that the Executive Committee believed that this was a violation of the National Labor Relations Act and asked the Company to open new full discussion at this point or in the near future of the competitive adder, as well as the salary system, per se, and inform what was to be the new executive committee members of the salary administration and the factors involved in deriving the competitive adder." Eastman testified: We wanted to continue salary negotiations which were broken off for want of data. The guide curves had been requested, and although we didn't have them, we wanted to try and reach an interim agreement without them. Second of all, I emphasized quite strongly the A.I.S.'s continued oppostiton to the Com- pany's continued use of the competitive adder without the agreement of the Association. And, thirdly, I requested that the Company representatives present to us at the next meet- ing a full, complete, open presentation explain- ing what the competitive adder was-how it was derived, where it came from, and any other pertinent information about the method of salary administration in use.31 On cross-examination, Eastman testified: Q. (By Mr. Heilbron ) The salary negotia- tions which on February 29th you told Mr. Geggis you wanted to continue, what were those salary negotiations for? A. For increased salary. 0. They were for a general salary increase, were they not?. A. Yes. Geggis testified concerning Eastman's position at this meeting: "As previously set forth , until the adder the Association never questioned the operation of that system Art XII, sec 2 provides that "no general increase under I B above shall be put into effect until approved by the Association " Evidently at no time prior to the adder did the Associa- tion consider that the guide curve system amounted to a general increase although admittedly the curves were higher every year '0 From this finding it follows that I find the adder is not outside the scope of the contract but is covered thereby Si Leonard corroborated Eastman's testimony and added as to the infor- mation concerning the salary administration "This was to be done in preparation for a salary proposal that the Executive Committee intended to submit to management " This latter would indicate that the Association's request for information concerning the adder was not for purpose of bar- gaining as to it but for use in connection with its own proposal 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD He did review the attitude of the Association in the course of that February 29 meeting, which was an attitude, as he explained it, of opposition to the competitive adder. But there was no reference to violation of the Act or anything like that. On April 10, as stated, the Respondent informed the Association concerning the nature of the merit system and the adder, including the matters and elements considered in connection therewith. Also, by the document dated April 17 set forth, supra, Respondent furnished these in writing to the As- sociation. Following that, there were meetings concerning MSDC's on June 6, 18, and 25. At the very end of the June 25 meeting, inquiry was made of Geggis whether the Respondent was going to put in the adder and Geggis, as set forth, replied "yes" at the very end of the meeting. The question was repeated at the June 28 meeting. Geggis amplified his answer that Respondent was going to put in the adder on July 1, which was the next workday. From the time on April 10, when the Respondent announced the "anticipated" or "projected" adder on July 1, there was no other effort to discuss or consider the adder by the Association and no stated objection thereto until June 28, 1968. In the past-1967 and 1966- the Association had not requested to bargain as to the adder although it had objected thereto. The question is what obligation to bargain could the Respondent have concerning a matter which the Association did not directly seek to bargain about? The Association's position appears in part to be that this would have been a futile act first because the prior acts and conduct of Respondent manifested such and second because it did not have the guide curves which were the subject of the preceding case. As to the first contention, prior conduct of Respondent might shed light on current conduct and attitudes but it could not per se in- definitely excuse all need for affirmative action by the Association. Further, when the Association sought information concerning salary administra- tion and the adder in February, it was furnished on April 10. As to the second contention respecting the nonfurnishing of the guide curves, the Associa- tion contends it could not bargain concerning the adder, and any action with regard to the adder on the part of the Respondent must necessarily be in violation of the Act. There is a certain logical force to this contention except it seems to say that until and unless the guide curves are furnished to As- sociation, any action that the Respondent takes with regard to salary items either pursuant to the contract or abhorrent to the contract is a violation unless the Association specifically agrees thereto. It appears to me that certainly within the framework of the contract, the Association, by continuing to enter into contracts, may be said to be agreeing to whatever such contract may entail.32 The conten- tion of the Association with regard to a continuing violation through the adder because of the non- furnishing of the guide curves accordingly appears to go too far.33 Both because of this and the fact that I consider the contract governing, I find that it was incumbent upon the Association to pursue bar- gaining concerning the adder in 1968 or at least have indicated much earlier than June 28 that it was objecting to the introduction of the specific adder on July 1, so that it would have been possible to have discussions and negotiations concerning the adder prior to June 28. The assertion as of June 28, the day before it was due to go into effect, that the Association objected to it, in my judgment comes too late under the circumstances. I am aware, as set forth, that the Association on February 29 in- dicated its continuing objection to the adder. It requested more data concerning the adder34 and then dropped the subject after April 10 until June 25 or 28. Another question involved is whether or not there is an inconsistency between the MSDC's and the adder and whether or not the MSDC's involved a general increase which might in some way con- flict with the possible effects of the adder. The answer to this appears to be that although the As- sociation contended the MSDC's involved a general increase, the fact is that MSDC's would not have resulted in a raise for everyone in 1968, but most people in the unit would have received an increase. However, the range of resulting increases would vary greatly. They would range from 0 to 25 per- cent in 1968 (and in 1969 from 7 percent to 30 percent). Eastman, as set forth, admitted that he had never heard of a "general" increase such as this at Shell. Second, since I here concluded that the adder was not a general increase, even if the MSDC's were, there would be no direct conflict. Similarly, even if the adder were a general increase, if the MSDC's are not there would appear to be no direct conflict. Whether or not there would be an indirect conflict would depend on the action of the parties and the overall circumstances-for instance the extent of the adder and what other determina- tions Respondent might make thereafter. In this respect, the Association itself indicated that it did not consider the MSDC's were in conflict with the guide curves. It asserted: (It should be emphasized that the MSDC represent percentile distribution of salaries as a function of experience credit, are not directly related to merit, and are not intended to be the same as the Merit Guide Curves used by management.) Leonard testified they were not intended as a sub- stitute for the guide curves with or without the " This does not imply any waiver of the Association's right to the data and information ordered by the Board in the prior case ' It also appears inconsistent for the Association to take this postition herein , after asserting in February that it was seeking to negotiate even without the guide curves 11 See testimony of Eastman, supra EMERYVILLE RESEARCH CENTER 521 adder in them. Eastman described them as a com- plement but independent. Eastman testified further: So we can just pin down a little bit more- the proposal was not meant as a subsitutue for management's salary guide curves? A. This proposal was meant as a comple- ment to the guide curves, not a substitute. Q. Right. And the idea was that management would have its set of curves on the one hand- A. Yes. Q. -into which it would put such factors as it felt like putting? A. Yes. Q. And during the salary year it would pay salaries with reference to those curves? A. Yes. Q. And then to the extent that the raises that it had made in doing its thing did not meet the minimums that the MSDC sets, why then management would have to pay more money to the people to meet the MSDC's? A. Yes. It is evident that MSDC's and the guide curves are independent of each other. The MSDC's con- template Respondent will construct its own curves and put into them the elements and increments it considers appropriate and pay salaries with reference to them during the year. The MSDC's are to be operative only to the extent the raises Respondent gives during the year do not meet the minimums set by the MSDC's. In the latter case, the MSDC's would require the Company to pay ad- ditional raises to meet them, apparently at the end of the year. It would therefore appear that by presenting the MSDC's the Association was either ignoring or otherwise not pursuing a discussion or negotiation as to the adder. This could well be on the basis that if the curves including the adder were unsatisfacto- ry the MSDC's would take care of any claimed in- adequacies in both individual and overall wages. The foregoing being the case, the Respondent could not be expected or required to complete negotiations with respect to MSDC's before putting into effect the adder. This is also supported by the fact that although the Respondent took the position that it did not have to negotiate as to the MSDC's at all, it did so voluntarily. Had the MSDC's in- volved a "general increase" which I have found they did not, Respondent would have had to negotiate concerning them. Since I have concluded that the MSDC's are not a "general" increase, as the term is used under the contract, it follows that Respondent did not have to negotiate concerning them. Since their negotiation was on a voluntary basis and it would not have been incumbent on Respondent to negotiate, there would appear to be no violation in inserting the adder without waiting to complete negotiations concerning the MSDC's even if there was conflict between the adder and the MSDC's. Admittedly, the situation herein is not a simple unencumbered one. The issues accordingly do not lend themselves to simple clearly delineated catego- ries or easy resolution. The problems arise because of the contractual provisions coupled with contrac- tual history and the wage system or structure developed thereunder. Based on all the foregoing, I have concluded that, under the contract, including history, practice, and circumstances herein, the competitive adder does not amount to a general in- crease. Neither does its introduction per se "put into effect ... salary increases," as alleged in the complaint. For that reason alone the complaint should be dismissed. Second, whether or not it may be said that the adder impairs or impinges bargaining for a general increase, there was no request for a specific general increase made herein. Further, whatever the adder may be, the Association did not pursue either discussions or negotiations as to it after April 10, 1968, but instead submitted a proposal, the MSDC's, which it admitted were independent of the guide curves with or without the adder. Although the Association had objected to an adder in 1966, 1967, and at the February 29 meeting, it had not pursued to finality its opposition thereto either in 196635 or in 1967.36 Herein on February 29, the Association first stated its continuing op- position, then asked to learn more about the adder. On April 10, it was explained and stated that an adder of 4.5 percent was "projected"37 for July 1, and on April 17 a written explanation issued. Then the MSDC's were proposed by the Association and discussed June 6, 18, and 25. On June 25, at the end of the meeting, Respondent was asked whether the adder was going in on July 1. Then again on June 28 the same question was asked and Respon- dent replied "yes," and on July 1 the adder became effective. Under these circumstances, it would appear that Respondent met any obligations it may have had with respect to bargaining as to the adder with the Association, unless the fact that it did not furnish the guide curves necessarily leads to a failure to bargain herein. I have previously concluded it does not and noted that Respondent had evinced willingness to discuss and consider the adder.38 Accordingly, I find and conclude that Respon- dent did not fail and refuse to bargain concerning the adder nor introduce it unilaterally on July 1, 1968, in derogation of any right the Association may have had to negotiate concerning it. The fact that Respondent acted July 1 after the Union ob- jected June 28-the last preceding workday-does ^ When it tried to take the matter to arbitration and went as far as a judgment against at by a U S district fudge 'e When it filed a charge and withdrew it 31 See discussion, supra, re how this was presented w Geggis testified that Respondent was and is prepared to negotiate as to the adder 522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not preclude such finding and conclusion. The Union had ample notice from April 10 concerning the "projected " adder to negotiate as to it but did not seek to do so . Respondent does not have to wait indefinitely to act nor to invite negotiations, but the Union should manifest in some manner within a reasonable time its disapproval of the proposed change and/or its desire to discuss and negotiate with respect thereto.39 Neither does a last-minute objection preclude ac- tion , particularly where no request to negotiate was then made.40 Leonard testified specifically that he did not ask to negotiate as to the adder when Geggis , at the end of the June 25 meeting , replied "yes" to a question of whether Respondent intended to put the adder in the curves on July 1 . Leonard did not object to the July 1 introduction of the adder on June 25 but did on June 28.41 Leonard also testified in response to a question of whether Respondent on June 28 said anything about the Association proposals that "they stated that they wanted to continue to discuss them-that the introduction of a competitive adder should not prevent further discussion of our proposal , and they wanted to continue ." Leonard also testified at two meetings he suggested use of a federal mediator. Leonard was then asked: Q. (By Miss Girard ) At either of these two meetings where the subject of mediation came up, was there any comment or discussion about whether the competitive adder would be delayed for this purpose? A. On our part we wanted to delay the in- stitution of the competitive adder and bring in a mediator. Q. Did you tell the Company that? A. Yes. Q. What did the Company say in response? A. Well, the first time this came up was on June 28th. Q. What was said by Shell in response to your remarks? A. As I recall-the response was: we will take that under advisement. Q. Did they reply to your remark about not putting the competitive adder into effect? A. No. Q. When was- A. Well, yes. I am sorry , they did reply. They stated they had a timetable to keep, if I recall correctly. [Emphasis supplied.] Geggis specifically testified that the Association on June 28 did not ask td negotiate with respect to the adder. There may or may not be conflict between Leonard and Geggis in this respect. Under all the circumstances herein, Leonard's request to bring in a mediator might or might not involve negotiation of the adder, the MSDC's or both. Precisely what was to be mediated or what the mediator was to do was not specified. I am aware that, according to Leonard, request was made to delay the adder and bring in a mediator and that the Respondent, ac- cording to Leonard, "stated they had a timetable to keep, if I recall correctly." This does indicate a desire to delay the adder and could reasonably mean discussions or negotiations were desired as to the adder. On the other hand, since neither had been sought between April 10 and June 28, there could be a question as to the purpose. Concededly the Association wanted to delay the introduction of the adder. However, assuming that the Association intended the mediator to effect negotiations concerning the adder, this was apparently not communicated to Geggis. Certainly there was no specific or explicit request to negotiate. Hence, Geggis' answer that there was no request to negotiate is literally true and may well have been completely so. In any event, whatever construction is taken of this discussion on June 28, 1968, I do not consider that the result herein would be affected thereby. I am, for all the reasons set forth above, finding and concluding that Respondent did not violate the Act as alleged and shall recommend that the com- plaint be dismissed. CONCLUSIONS OF LAW Upon the basis of the foregoing findings of fact and upon the entire record in this proceeding, I make the following conclusions of law: 1. Respondent is an employer engaged in com- merce within the meaning of the Act. 2. The Association is a labor organization within the meaning of the Act. 3. Respondent has not engaged in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act, as alleged. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact, conclusions of law, and upon the entire record in this case, it is hereby recommended that the com- plaint be dismissed in its entirety. 19 See Humble Oil and Refining Co, 161 NLRB 714 (1966), Shell Oil Company, 149 NLRB 305 (1964), see also Murphy Diesel Company, 179 NLRB 149, fn 1 (1969) and in TXD And see also Montgomery Ward Co, 137 NLRB 418, and White Consolidated Industries, Inc, 154 NLRB 1593 (1965) 40 See Shell Oil Company, supra " Leonard testified, as referred to supra, Eastman had objected to the adder's unilateral introduction on February 29 and Leonard, as spokesman, on June 28 objected to its being unilaterally introduced July 1, 1965 EMERYVILLE RESEARCH CENTER 523 YRS. EX P. CREDIT. 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 0 1300 1200 t 1100 00 1000 900 807 700 0 S 10 Is 20 25 s0 75 40 Years Experience Credit Figure 1. MINIMUM SALARY DISTRIBUTION CURVES FOR JULY 1, 1968 to JUNE 30, 1969 9/2$/69 2200 2100 2000 1900 1800 1700 1600 1500 1400 x i 1300 0S 1200 1100 01000 900 800 700 APPENDIX C(2) PERCENTILES 5 10 is 20 25 30 ss 40 Years Experience Credit Figure 2. MINIMUM SALARY DISTRIBUTION CURVES FOR JULY 1, 1967 to JUNE 30, 1968 523a DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX D Historical : Pre "Competitive Adder" Merit Raises General Raises % Total % Total Year % Rec'g Payroll % Rec' Payroll 1960 62.3 3 . 11 100 5.00 1961 46.2 2.33 a 1962 55.3 2.83 97.2(11) 4.86 1963 41.8 2.27 1964 43.2 2.35 98 .8(5) 1.98 1965 56.6 3.40 98.8(5) 4.45 6-year 2.72 average: 2.72 APPENDIX E SUMMARY OF MERIT INCREASES TO EMPLOYEES REPRESENTED BY ASSOCIATION OF INDUSTRIAL SCIENTISTS 1 958-68 1 2 No Fm Col. No. on 1 Rec ' g Col. 2 Payroll Increases as % of Period Thru Period this Period Col. 1 1958 249 3 07 73.5% 1959 427 266 62.3% 1960 419 280 66.9% 1961 371 191 51.5% 1962 365 220 60.3% 1963 360 166 46.1% 1964 369 185 50.2% 1965 386 247 64.0% 1966 381 253 66.4% 1966-67 389 2 91 74.9% 1967-68 384 319 83.0% 2.72 Raises , Overall 6-year average: 5.43% With "Competitive Adder" % Rec'g Exclusions % Payroll 7/1/66 7/1/67 67 .4 94 5.00% 6/3 0/ 67 6/30/68 72. 8 64 6.09% a) number of exclusions in parentheses EMERYVILLE RESEARCH CENTER 523b APPENDIX F SUMMARY OF MERIT SALARY INCREASES GRANTED TO EMPLOYEES REPRESENTED BY THE ASSOCIATION OF INDUSTRIAL SCIENTISTS JULY 1, 1964 - JUNE 30, 1968 No. 9 $ Increases Individual % No. Group Increased Increased Low Avg. Hi Low AvR. High 7/64 415 26 6.3 25 51 80 4.4 5.4 8.9 8/64 411 9 2.2 35 62 110 4.7 6.0 8.6 9/64 421 25 5.9 25 54 100 4.7 5.7 8.9 10/64 417 22 5.3 25 55 100 4.4 5.6 8.0 11/64 421 17 4.0 25 61 110 4.5 6.2 9.2 12/64 424 13 3.1 35 57 75 3.7 5.4 7.5 1/65 428 13 3.0 30 49 90 4.2 5.4 8.7 2/65 430 14 3.3 30 53 as 4.3 5.7 8.3 3/65 431 21 4.9 30 74 100 4.2 7.4 10.4 4/65 431 25 5.8 40 69 110 4.6 6.5 9.0 5/65 434 13 3.0 35 64 125 4.0 5.4 6.9 6/65 429 23 5.3 30 69 110 4.2 6.6 10.6 7/65 430 54 12.5 30 69 100 4.1 6.2 11.6 8/65 434 17 3.9 30 56 80 4.3 6.1 10.6 9/65 432 23 5.3 25 70 125 4.1 6.9 12.7 10/65 435 24 5.5 25 60 100 4. 2 6.1 8.9 11/65 437 13 3.0 40 64 120 4.7 6.5 11.2 12/65 436 12 2.8 40 64 100 4.7 5.2 8.8 1/66 436 19 4.4 40 63 125 4.1 6.1 9.7 2/66 437 11 2.5 35 60 125 4.5 5.9 11.1 3/66 440 22 5.0 30 59 100 4.0 6.1 9.3 4/66 443 11 - 2.5 35 56 80 4.9 5.3 7.0 5/66 449 9 2.0 45 63 75 4. 1 5.6 8.1 6/66 453 41 9.1 35 76 125 4.0 6.5 14.1 7/66 453 36 7.9 40 78 162 4.6 7.5 16.1 8/66 448 22 4.9 34 73 162 4.2 7.0 14.2 9/66 437 26 5.9 46 115 157 4.6 7.4 13.3 10/66 429 20 4.7 37 72 103 4.8 7.2 11.9 11/66 431 18 4.2 42 71 128 4.8 6.6 13.7 12/66 431 22 5.1 57 71 100 4.9 6.1 9.5 1/67 431 32 7.4 45 92 160 3.9 8.3 17.0 2/67 434 15 3.5 53 81 133 5.4 7.8 13.8 3/67 433 30 6.9 40 82 ,198: 4.3 8.1 16.1 4/67 434 26 6.0 38 82 157 4.5 7.4 13.2 5/67 432 19 4.4 56 97 186 4.6 7.9 14.5 6/67 428 37 8.6 63 106 169 6.2 8.8 14.0 7/67 433 42 9.7 61 91 138 4.7 7.8 15.6 8/67 434 32 7.4 55 89 171 4.7 8.1 14.4 9/67 441 29 6.6 51 90 150 4.6 7.6 14.8 10/67 442 19 4.3 60 90 140 5.5 7.6 10.6 11/67 434 22 5.1 71 101 140 5. 8 8.6 10.8 12/67 437 27 6.2 56 100 150 5.1 8.2 12.8 1/68 437 33 7.6 52 101 160 5.2 8.4 14.5 2/68 431 21 4.9 60 105 150 6.2 9.8 14.3 3/68 438 26 5.9 70 102 150 5.0 8.9 13.6 4/68 437 39 8.9 50 97 150 4.9 8.4 11.4 5/68 432 16 3.7 60 105 175 6.0 8.5 12.1 6/68 432 30 6.9 65 109 175 5.3 8.7 13.5 * Number in group for month is count as of last day of preceding month.