Frito-Lay, Inc.

400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Frito-Lay, Inc. and General Drivers, Warehousemen and Helpers Local Union No. 89, Affiliated With International Brotherhood of Teamsters , Chauf- feurs, Warehousemen and Helpers of America. Cases 9-CA-5351 and 9-RC-8204 August 27, 1970 DECISION, ORDER, AND CERTIFICATION OF RESULTS OF ELECTION BY MEMBERS FANNING, MCCULLOCH, AND JENKINS On April 9, 1970, Trial Examiner Eugene F. Frey issued his Decision in the above-entitled proceeding, finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examin- er's Decision. He further found that certain other conduct of the Respondent had not interfered with the election in Case 9-RC-8204 held on August 29, 1969, and recommended that the Union's Objec- tion 2 and the quasi-objection raised in the section of the Regional Director's Report entitled "Other Conduct" in that case, be overruled, and that the results of the election set forth in the tally of ballots in that case be certified. Thereafter, the Union and the General Counsel filed exceptions to the Trial Examiner's Decision and the General Counsel filed a brief in support of his exceptions. The Respondent filed cross-exceptions to the Decision, a brief in sup- port of the cross-exceptions, and an answering brief to the exceptions of the General Counsel and the Union. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this proceeding to a three- member panel. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are here- by affirmed. The Board has considered the Trial Examiner's Decision,' the exceptions, the cross-excep- tions, the briefs, and the entire record in this proceed- ing, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ' As we have adopted the Trial Examiner's conclusion that Respondent did not engage in any conduct which justifies setting aside the results of the election in Case 9-RC-8204, which the Union lost, we deem it unnecessary to pass upon the discussion by the Trial Examiner of ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board hereby adopts as its Order the Recom- mended Order of the Trial Examiner, and orders that the complaint be, and it hereby is, dismissed in its entirety. As all the objections have been overruled, and as the Petitioner in Case 9-RC-8204 has failed to secure a majority of the valid ballots cast, we shall certify the results of the election. CERTIFICATION OF RESULTS OF ELECTION It is hereby certified that a majority of the valid votes has not been cast for General Drivers, Ware- housemen and Helpers Local Union No. 89, Affiliated with International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, and that said labor organization is not the exclusive repre- sentative of the employees in the unit found appropriate within the meaning of Section 9(a) of the Act, as amended. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE EUGENE F. FREY, Trial Examiner The issues in Case 9-CA-5351 are whether or not Respondent, Frito-Lay, Inc , gave its employees a wage raise on August 23, 1969, contrary to past practice, thereby coercing its employees just before a Board election, and refused to bargain with the above-named Union as bargaining agent of its employees in an appropriate unit, after the Union had attained majority status in said unit, in violation of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, 29 U.S.C Sec. 151, et seq. (herein called the Act) The issues arise on a complaint issued December 29, 1969, by the Board's Regional Director for Region 9, ' and answer of Respondent admitting jurisdiction, denying the commission of any unfair labor practices, and alleging affirmatively that the wage raise was based on economic factors unrelated to the pendency of a Board election noted below, and economic decisions made long before the Union appeared at the plant involved herein. At close of the hearing all parties waived oral argument, but have filed written briefs which have been duly considered by the Trial Examiner in preparation of this Decision.' ' The complaint issued after Board investigation of charge filed Septem- ber 25, 1969, by the Union ' On February 24 and March 20, 1970, Respondent moved on notice to correct certain errors in the official transcript As no opposition to said motions has been received, the motions are granted and the the requirements for proving a violation of Sec 8(a)(5) based on a transcript is hereby deemed corrected in the particulars stated in the card showing See Irving Air Chute Co., Inc, 149 NLRB 627, 629 Cf motions, which are hereby marked in evidence as Resp Exh 38 and N L R B v Givice/ Pac Ring ( o Inc 395 U S 575 39 185 NLRB No. 47 FRITO-LAY, INC 401 In Case 9-RC-8204, the Union filed a petition on June 30, 1969, for certification as bargaining agent In that case, pursuant to a stipulation for certification upon consent election signed by Respondent and the Union July 23, 1969, a Board-conducted secret-ballot election was held on August 29, 1969, among 11 transport drivers at the Louisville plant in the appropriate unit found below. The Union lost by a vote of six to five and thereafter filed objections to conduct affecting the results of the election. After due consideration the Regional Director for Region 9 issued his report on October 31, 1969, recommending that the objections be overruled and the results of the election be certified according to the tally of ballots. On January 9, 1970, the Board directed a hearing on (1) the Union's Objection 2 which charged that the August 23 raise to unit employees interfered with the conduct of the election and influenced them to vote against the Union, and (2) "Other Conduct" cited by the Regional Director, consisting of, certain remarks and conduct of Respondent's vice president Lyman S. Bennett to unit employees on the day of the election The Board ordered that the hearing on these issues be consolidated with the hearing before a Trial Examiner in Case 9-CA-5351. The Regional Director consolidated the two cases for hearing by order of January 20, 1970. The cases were tried before me February 12 and 13, 1970. Upon the entire record in the case, including my observa- tion of the witnesses on the stand, I make the following- FINDINGS OF FACT as the best way to resolve the issue of representation. The course of the representation proceeding in Case 9- RC-8204 has been stated above. On September 2, 1969, while the Union's objections to the election were pending, it formally renewed its demand for recognition, which Respondent rejected on September 8, relying on the results of the election B. The Majority Status of the Union Respondent and the Union agreed in the representation case, Respondent now admits, and I find that all transport drivers employed at Respondent's Louisville, Kentucky, plant, excluding all production employees, maintenance employees, shipping and receiving employees, commission route salesmen, office clerical employees, guards, supervisors as defined in the Act, and all other employees, constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act. On the basis of signature of cards by seven drivers on June 21, 1969, as found below, I find that on June 21, 1969, the Union was chosen by a majority of the drivers in the above unit as their representative for collective bargaining, and thereby became the representative of all drivers in the unit for that purpose, within the meaning of Section 9(c) of the Act. C The August 23 Wage Increase I JURISDICTION , AND STATUS OF THE UNION Respondent is a Delaware corporation engaged in the manufacture, sale, and distribution of food products in plants located in various States. Its Louisville, Kentucky, plant, is the only one involved in this case. In the 12 months prior to issuance of the complaint, Respondent had a direct inflow of food products, goods and materials to its Louisville, Kentucky, plant valued in excess of $50,000. Respondent admits, and I find, that it is and at all times material herein has been an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act The above-named Union is a labor organization within the meaning of Section 2(5) of the Act II THE ALLEGED UNFAIR LABOR PRACTICES The main issue in the consolidated case is whether a wage raise announced to drivers at Louisville on August 23, 6 days before the election, was given deliberately, or under circumstances requiring the conclusion that it was designed, to influence employees in their voting and to undermine the majority status of the Union, thereby violat- ing Section 8(a)(5) and (1) of the Act, and in consequence requiring that the election be set aside' The Louisville drivers were called to a meeting at a local motel on Saturday, August 23, 1969, which was attended by six officials of Respondent's southeastern zone.4 At the outset Bennett introduced himself to the drivers, said he hoped to get to know them better in the future,' that since the Company had been reorganized in the last year it had many problems and had made mistakes and would probably make more, but it hoped to handle problems as they arose. He asked the drivers to show their confidence A. Preliminary Events On June 21, 1969, the Union began an organizing cam- paign among employees at the Louisville plant when eight transport drivers employed there signed cards authorizing the Union to act as their bargaining agent After the cards were given to the Union on June 22, on June 23 it sent Respondent a formal request for recognition as bargaining agent of the majority of the transport drivers, in which it offered to permit an examination of signed cards by Respondent or a third party. On June 26, Respondent declined the request, expressing its good-faith doubt of the Union's majority status and suggesting a Board election A secondary issue in the representation case is whether remarks of company officials to the drivers on August 28, the day before the election, were coercive and contained definite promises of future benefits if the drivers voted against the Union , such as to affect the election The officials were Lyman Bennett, vice president for manufacturing for the zone, Plant Manager Wallace Fields and Personnel Manager Larry Harrison and his assistant , James Heslm , of the Louisville plant, Assistant Zone Traffic Manager Thomas C Reed, and Zone Traffic Manager William Van Arsdale The Southeastern zone covers 10 states in the southeastern part of the United States , and includes manufacturing plants and distribution centers at Memphis, Tennessee , Louisville , Kentuc- ky, Jacksonville , and Orlando , Florida, Chamblee , Georgia, New Orleans, Louisiana, and Greensboro , North Carolina Bennett had held this zone position a little over a year 402 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in the Company in the coming election and give it a chance to solve "our problems" without the intervention of the Union. Reed introduced himself to the men as acting zone traffic manager appearing for the traffic manag- er, John Reeder, who was recovering from surgery, and said he would probably' be coming to the plant more often to see the drivers and get familiar with their problems, dust as Manager Reeder had done in the past year. There was some discussion of problems brought up by the drivers Van Arsdale then announced the drivers would be getting a raise in compensation effective September 7, 1969, which consisted of a raise from one-half cent to 1 cent per case of products handled, from 2.33 cents to 3.00 cents per mile of travel, and an increase in the double-drop allowance for layover stops at the Nashville distribution center, when- ever a driver had to wait there to drive another truck to Louisville. These increases gave total weekly raises to drivers ranging from $20 to about $35. At the same time Harrison announced that life insurance benefits of the drivers would increase because the premium deduction from their pay would increase in proportion to their increased compen- sation . Van Arsdale read off the increased compensation for each run under the new rates, so that the drivers could write down the figures for each run on the new schedule sheets in their hands. The drivers then bid on the runs and were awarded runs selected by them according to their seniority.6 General Counsel bases his claim of violation of the Act on (1) the timing of the announcement of the wage raise, without prior notice to the drivers, while a question concern- ing representation (QCR) was pending and particularly only 6 days before the election, after (2) preliminary remarks of Bennett at the bid meeting in effect asking the drivers to vote against the Union and give Respondent a chance to solve "problems" (such as pay raises) without the inter- vention of the Union, since there was some dissatisfaction among the drivers when they did not get a raise at a meeting in June when the change in zone manufacturing operations and the need for rebidding of transport runs was first made known to them, (3) speeches of Bennett and Reed to the drivers the day before the election, asking them to vote against the Union and thus give Respondent another chance to correct any mistakes they had made in the past, and (4) Lorenz' testimony that Harrison told him in the week of September 2 that the grant of the wage raise just before the election was "a chance we had to take," in response to Lorenz' accusation that the raise at that time was an unfair labor practice. It is well settled that grant of benefits to employees while a QCR is pending and specifically timed to come just before a Board election may present strong evidence of coercion and interference with employees' rights freely to choose their bargaining agent by resort to Board process,' but the Board has recently held that the grant of benefits These facts are found on credible and mutually corroborative testimony of drivers Lorenz, Vincent, Greene, Cunningham, and officials Bennett, Reed and Harrison Testimony of any of these witnesses at variance with the findings is not credited ' NL R.B v Exchange Parts Co, 375 U S 405, 409,4 10 in such circumstances will violate the Act only if it appears that the employer's action was altered from the normal course of its business operation by the presence of the Union and pendency of the QCR, that the Board will examine all the facts and circumstances of the questioned conduct in deciding this issue; and that the employer has the burden of showing that its action was taken for economic reasons wholly unrelated to the pending QCR.e In light of the affirmative defense that the raise here was based on economic factors unrelated to the pendency of the QCR and on decisions made long before those events, these principles require a careful review of the events and circumstances of Respondent's operations prior to and after the Union's appearance at the plant.' On this subject the record discloses the following facts, which are found from uncontradicted and mutually corroborative testimony of witnesses of General Counsel and Respondent and documen- tary proof- In the course of an internal reorganization of Respondent in 1968, it appeared that demand for and sales of corn chips (called by trade names of Fritos and tortilla (or Doritos) chips) in the southeastern zone had been rising rapidly. Prior to August 1969, these products were not made in any of the seven plants in the zone, so that most of its demand therefor had to be met by extensive and expensive transport of corn chips into the zone from plants in other zones, such as Indianapolis, Indiana, Wash- ington, D C., Brentwood, Maryland, and Tulsa, Oklahoma. Based on the changing sales requirements, top management of Respondent in Dallas, Texas, began to formulate plans for increasing the manufacturing operation at the Memphis plant to include corn chips, and early in February 1969, advised Bennett in the Southeastern zone of the decision, including a projected timetable for plant expansion and alteration and installation of new equipment running through July 15, and a target date of September 1 for actual production, it was made clear that completion of this plan would make the Southeastern zone independent of other manufacturing zones for its corn chip requirements, would eliminate the need for common carrier transport of those products into the zone, and also require substantial revision of the distribution system by company trucks within the zone. In the meantime, in March 1969, Respondent held its usual annual bid meetings of transport drivers at all plants in the zone, at which drivers were permitted to rebid on all transport runs involving their respective plants, on the basis of seniority. This was done in accordance with company practice over the past 20 years, to give drivers opportunities to change runs which had changed in mileage ' Dorn's Transportation Company, Inc, 168 NLRB No 68, Marshall Durbin & Company of Jasper, Inc, 179 NLRB No 170, New Fern Restonum Co, 180 NLRB No 95 ' In this connection the Board has recognized that many factors affecting an employer's business, including fluctuations in the cost of living and the labor market, may well occur during the pendency of a QCR and render wage adjustments advisable or necessary, and the Act does not require a finding that any such adjustment while an election is pending is automatically an unfair labor practice Champion Pneumatic Machinery Co, 152 NLRB 300, 305-307 FRITO-LAY, INC 403 and other factors affecting compensation to the driver,10 because of changes in sales and other economic factors during the preceding year. At these meetings, Respondent announced and gave the drivers raises in their base and total compensation which was likewise in accordance with past practice. In giving raises at these meetings, zone officials always expressed appreciation for the drivers' past work and their hope for continued loyalty and cooperation from them. About mid-March, 1969, the Memphis expansion plan and timetable was disclosed to the employee relations depart- ment of the Southeastern zone, with directions to work out necessary changes in workforce at all plants to handle the extra production and changes in the transportation system. That department in April gave advance notice of the decision to the zone traffic manager with orders to work out detailed changes in the transportation system which would mainly involve changes in the number and extent of truck runs between all plants and the amount of products to be handled. In working out employee changes during April, May, and June, the employee relations depart- ment reviewed the compensation of all workers affected by the changes. In considering the compensation of drivers, it took into account increases in the cost of living index and the price index, and the pay practices of competitors, and determined in June that Respondent was behind its competitors both in compensation and in type and extent of fringe benefits for drivers. Another factor considered was Respondent's decision in June to operate its trucks at 80-85 percent capacity, down from a 90-95 percent load, which would mean a pay cut for most drivers due to reduction in cases handled per run." Based on these factors, the zone employee relations department late in June recommended to top management a broad wage raise for all zone drivers, involving increases in mileage pay, case handling allowance , stop allowances, and a new allow- ance for delays and breakdowns enroute.12 After review by top officials including the company budget department in June and July, top management early in August decided to adopt most items of the recommendation, and authorized the zone employee relations department to include the accepted items in pay raises to be given drivers in a bid meeting to be scheduled in August because of the extensive changes in runs caused by the Memphis expansion. This decision was confirmed by an intercompany memo to the zone on August 13. i° Respondent's transport drivers are paid a weekly wage for each run, figured on the basis of mileage driven, cases of products handled, and number of interchange loads at certain distribution points When runs are changed and must be rebid , the drivers are given sheets with the details of the revised runs, and the compensation each will pay, a week or 10 days before the bid meeting (held on Saturday) so that they can study the data to decide the runs they will bid on " The reduction in capacity was caused by a decision to have extra space on trucks at all times to take care of unusual fluctuations in sales demand as well as frequent sales promotion campaigns each year which required sudden peak loads of products transported, which in the past had required extra runs or common carrier transportation " This matter went to top management for decision because it involved changes of working conditions and pay for about 93 drivers in the whole zone, and addition of seven drivers in the zone (one or two at Louisville alone) and the added labor cost alone would run well over $100,000 and affect the existing budget for the year The zone traffic manager had received advance notice of the need for revision of transportation schedules in April, but did not get details of the overall changes in the supply and distribution patterns until June 18. On June 24, he advised his plant traffic managers to plan on running their trucks at the indicated reduced capacity and eliminating all common carriers, in preparation for rescheduling and rebidding all runs effective the week of August 17, 1969. On July 31, Dallas headquarters advised the zone of a firm date of August 18 for corn chip production and August 25 for tortilla chip production at Memphis, with specific directions for handling of interim supply there- of. In July the zone traffic manager worked out the detailed revisions of all truck routes in the zone, and prepared new bid sheets for each run, for distribution to and examina- tion by all drivers in the zone before the coming bid meeting. In the first or second week of August he also received from the employee relations department the new wage rates, and on the basis thereof he prepared tables of new average weekly compensation for all runs in the zone, as revised The bid meeting was scheduled for Saturday, August 23, because the zone production department advised the zone traffic department early in August that full production of the new products at Memphis would not be achieved until September 7 so the traffic department chose Saturday, August 23 for rebidding of the runs The zone traffic manager gave the new schedules to all branch traffic manag- ers on or before August 18, with detailed instructions to give the drivers advance notice of the runs and the effective date of September 7 The Louisville drivers received their new bid sheets on or about August 18. The events at the August 23 bid meeting have been found above The Louisville drivers first received knowledge of the Memphis expansion, and its probable effect on their runs, at a meeting on Saturday, June 21, which was attended by the same company officials as at the March bid meeting. At this meeting zone traffic manager John Reeder outlined the Memphis plant expansion and the changes which it would cause in the zone operations, and said that this would cause changes in the Louisville runs which would have to be rebid in consequence. He also said there might have to be two or more rebiddings of runs a year thereafter because of the Company's expansion and growth. In the course of the discussion, Reeder complimented the drivers on their work, saying he considered them professional driv- ers. One driver asked why they were not getting pay of professional drivers, if they were such drivers. Reeder threw a dollar bill across the table to that driver, commenting "that is a good question." Another driver asked whether the men could get extra pay for layovers at the Nashville, Tennessee, distribution center, when they had to wait for another trailer Reeder said, no, that was part of his job Another driver asked if there would be a pay raise on the rebidding of the runs. Reeder said, no, and then after a hesitation, said "wait a minute," that he could not say for sure if they would get a raise, because they had received one at the annual bid meeting, and because of the way the company budget was set up, it would be hard to give them another raise at the time of the bid meeting, 404 DECISIONS OF NATIONAL LABOR RELATIONS BOARD so he could not promise one at that time, but there might possibly be one at the first of the year. The meeting closed with the usual steak dinner for the drivers, as at past bid meetings. After it was over the drivers talked outside the restaurant about the meeting, and seven of them gathered privately in a tavern in another part of town, where they had a long discussion about Reeder's remarks, with some indicating they were not satis- fied. All talked about what a union could do to help them better their jobs, and finally all decided they wanted the above-named Union to represent them about their prob- lems. Driver Vincent then went home to get some Teamster authorization cards which he had left over from a previous organizing drive at the plant, and brought them to the tavern, and the seven drivers read them and each signed a card 13 Six of the drivers met with agents of the Union on the morning of Sunday, June 22, and gave one agent the seven cards signed on the 21st. One agent told them at the time that under Board law there were two ways to get recognition from the Employer, one through a Board election and the other through a demand for recognition based on a card majority. On his query of them, the drivers indicated they understood this, and told him they had signed their cards to have the Union represent them for collective bargaining. There is no proof that Respondent knew anything of these concerted activities of the drivers, so it is clear from the Union's demand for recognition of June 23 and Respondent's reply of June 26, that Respond- ent first learned of the drivers' adherence to the Union on June 24 or 25. I also find that the Union attained majority status among the drivers when seven out of 11 in the unit found above signed the cards on June 21 .14 13 The signers were: Larry W. Lorenz, Sr., Robert L Poore, Jr., Buster E. Greene, George H Carroll, Edward L. Vincent, Fred Strunk, and James W Nokes Harry M. Cunningham signed a card at his home later that evening, James C. Whitehouse signed one on June 24, John W Coffman signed one on June 25, and Joseph Brown signed one on June 28. 16 Respondent argues that the proof falls short of establishing that the seven who signed on the 21st knew they were signing them to have the Union represent them, and that it shows only that they signed after talk about having an election While the drivers present at the tavern meeting had done a lot of drinking during the evening, and were hazy about what was said about an election, none testified clearly that anyone present made a definite representation that the cards would be used only to get an election; on the other hand, all indicated clearly that they knew what the cards were for, after reading, their wording, and that signing of the cards was the first step in having the Union represent them for bargaining, and the only way it could do so was by having a majority of drivers sign the cards One or two drivers indicated in testimony that they understood from the long discussion that an election would be a later step in the process of securing representa- tion, another driver, Greene, gives some indication that the men felt signature of the cards did not assure the Union's entry into the plant as bargaining agent until after an election, and that a majority of signed cards was needed to get an election, but he also indicated he knew signature of the cards was a request to the Union to bargain for them. However, all testified consistently that they wanted the Umon to help them in their "problems" and signed the cards to have the Union act as their agent for that purpose Only Poore, called by Respondent, testified that the drivers indicated that if all signed the cards they "could get an election for the Union," but this is far from saying that the cards would be used for no other purpose than to get an election, or that an election was the dominant or controlling purpose of signing. With the conflicting testimony of the drivers as to what was said about an election, the proven facts that they read the cards and knew what On August 28, the day before the election, the Louisville drivers were called into a meeting with zone officials, at which Bennett and Reed told the drivers how the Compa- ny had helped them in the past, asked them to "think it over" and give the Company another chance to try to correct any mistakes they had made in the past without the intervention of a union, by voting "no" at the election. The Zone Employees Relations Manager explained to them the mechanics of marking their ballots, indicating where they could mark the ballot "yes" for the Union or "no" against it. He also asked them to vote "no."" C. Contentions of the Parties, and Final Conclusions of Fact The sequence of corporate events following the initial decision for the Memphis plant expansion as found above presents cogent support for the defense that the August wage raise came as a normal outgrowth of that operational change in the southeastern zone, and supports an inference that it would have been given according to normal company practice, whether or not the Union had appeared on the scene and raised a QCR. General Counsel concedes the legitimacy of the Memphis expansion plans and the corpo- rate actions implementing them through August, but argues that various circumstances show the pay raise for Louisville drivers was not a part of that implementation but was conceived only after the Union's demand for recognition and deliberately carried to completion by the sudden announcement of it a few days before the election. First, he points to the fact that the planning and formula- tion of the raise was entirely by word of mouth, in contrast they meant before signing them, and that the cards are unambiguous in their designation of the Union as a bargaining agent, serve to resolve any doubts raised by conflicts in the testimony in favor of the conclusion that the signed cards are persuasive proof on the status of the Union. I find from all their testimony, as well as from credited testimony of some drivers and union agent Marcus Judd about the discussion on this subject at the meeting of June 22, that the seven knew before they signed that the cards would authorize the Union to represent them as their bargaining agent, and that they signed them for that purpose. I find the cards reliable proof of the majority status of the Union on June 21, 1969. 31 These events are found from credited and uncontradicted testimony of drivers Cunningham and Lorenz The latter witness also testified that at some indefinite time in the week of September 2, he casually asked Harrison, employee relations manager at Louisville, why the Compa- ny had given the drivers a raise just before the election came up, giving his view that it was a violation of the Act, and that Harrison replied "It was a chance we had to take." Harrison admitted he may have spoken to Lorenz at some time during that week during his normal activities at the plant, but denied categorically Lorenz' testimony about the talk Although Lorenz gave two statements in September and October, 1969, to a Board agent, this discussion was not mentioned in either, and his only explanation was that "just a little while ago I recalled that Larry had said it." Testimony of Zone Employee Relations Manager Hoffman shows that after the Union's demand for recognition was received, all zone officials were given a refresher course in what the empI \,t could and could not do under the Act in the course of a union organizing campaign, and it is a fair inference that Harrison was familiar with these guidelines before and after the election In light of Lorenz' weak explanation as to why this conversation had never before been mentioned to the Board, and the lack of any proof of similar comments by company officials previously during the pendency of the QCR, or of any similar indications of coercive antiunion conduct, I conclude that Lorenz' story is an afterthought conjured up to try to show a coercive motive for the August 23 pay raise, and therefore discredit his testimony and credit the denial of Harrison FRITO-LAY, INC 405 to the continuous written documentation of the various production and transportation phases of the Memphis expan- sion itself. The record shows that from the first formal announcement of the expansion decision on February 10, 1969, to the achievement of full expanded production at Memphis, at least 18 separate intercompany memoranda about various aspects of the expansion passed between top management and southeastern zone officials and between the latter and production and traffic officials in the various plants and distribution points in the zone In contrast, the record shows that Zone Employee Relations Manager Hoffman sent only one memo dated July 16, 1969, to top management recommending and justifying only one part of the total wage raise package, i.e, the breakdown and delay allowance, and that top management sent only one memo of August 13, 1969, to the zone, authorizing the pay raise to the extent found above On its face, the contrast in the documentation of the two basic aspects of the expansion seems enough to require some explanation. I have found above that As early as mid-March the zone employees relations department , which handles all personnel matters including wages, was apprised of the Memphis expansion plan and the need for review of the work force requirements. Hoffman , manager of that department, worked on it in April and May He was advised from time to time of the progress of plant alteration and evolution of the new distribution system , as memos on it issued to the zone . When a detailed outline of the changes in zone distribution was issued to the zone on June 16, advising that the changes would require "a complete rebidding of runs within the southeastern zone," this was a clear mandate to Hoffman to review driver wages throughout the zone, because it had long been company policy and practice to give all drivers in the zone a raise annually at the time they bid on runs early in the year, in order to bring their pay in line with changes in rates paid by competitors, the cost of living, and other economic factors. Hoffman's testimony shows that he gathered data for the review by telephone talks and personal discussions with other company personnel and competitors , from which he made notes, and examination of economic publications and reports, and then had verbal discussions with other zone officials and top management about his conclusion that zone drivers' compensation was basically behind the times and competi- tors' rates, and would in many instances be further reduced by the proposed changes in the distribution system. This resulted in his formal written recommendation of the pay raises, documented in part by the memo of July 16 noted above. I find nothing significant in his failure to send formal memos around the Company about his detailed actions in gathering and reviewing data before he made his formal recommendation, because it is clear that all top management wanted was his final recommendation, and the justification therefor , not the details of his spade work in collecting data, reviewing it and reaching his conclu- sion . The issuance of the final recommendation of July 16 in written form appears necessary and natural because it would affect about 93 drivers in the zone , and involved a large amount of money (when put into effect it actually cost $ 127,000 a year), and thus had to be reviewed by top management in conjunction with its budget officers. Hence, I see no significance in the fact that Hoffman's work on the pay raise did not appear in writing until his final recommendation , particularly since General Coun- sel offers no proof that his department acted differently in this respect from its operations with respect to past pay raises . In addition , the normality of his course of action on it is made more clear by the fact that the pay study was triggered by a company decision of June 16, before the drivers joined the Union or it made its demand for recognition Hoffman 's course of action there- after leading to the raise recommendation does not appear to have been shortened , hastened or otherwise vaned from normal practice in any way suggesting that he was affected by the advent of the Union I reach the same conclusion about the written decision of top management of August 16 authorizing the partial pay raise, which issued only after review by top management along with budgetary officials of the cost and advisability of the raise in the light of expected savings in transportation expense through elimination of common carrier transportation into the zone after the Memphis plant was in full production . It is also noteworthy that the decision affected all dnvers in the zone, not just those operating out of the Louisville plant, which was strictly in accordance with past driver raise practices General Counsel claims an indication of the abnormality of the raise appears in an admission of Assistant Zone Traffic Manager Reed that Respondent normally grants only one raise to drivers a year, at the time of the annual bid meeting, and that in the 8 years before 1969 there had been only two raises in 2 years . Accepting his statement as fact (it is supported in part by testimony of driver Cunningham), it tends to prove only that second pay raises in any year were infrequent but also shows they were not unknown or unique. Their infrequency cannot be called significantly abnormal in light of credible testimony of Hoffman and Reed , as supported by that of Cunningham and Vincent, establishing that for many years past drivers pay was reviewed and raises given to all dnvers in the zone at the time that changes in distribution pattern or other economic factors indicating the need of pay raises, and that there had been two rebidding of runs in 1962, 1963, and 1965 , as well as in 1969, due to the growth of the Company and increase in sales, which changed production and distribution patterns . Hence, the announce- ment of the second 1969 pay raise, while a QCR was pending, was at most a circumstance requiring Respondent to adduce cogent proof to show the economic need and motive for it, which burden Respondent has met for the reasons stated herein. General Counsel relies on the testimony of Hoffman to the effect that the changes in zone runs required by the Memphis expansion increased the average pay of Louis- ville drivers under existing rates, although the average for the whole zone was reduced , arguing that this shows there was no economic necessity for the August raise to the Louisville drivers This argument would have some merit if those drivers had in the past been treated separately or differently from all other dnvers in the zone for pay purposes or otherwise, but the testimony of Hoffman, Cun- ningham and other dnvers, which I credit , shows that 406 DECISIONS OF NATIONAL LABOR RELATIONS BOARD it has long been a company practice to hold meetings for rebidding of runs, with concurrent wage raises, for all drivers in the zone at the same time, to keep wage rates for all drivers in the zone uniform. Hence, it cannot be said that the raise to Louisville drivers was a special benefit to them dust because their pay for the new runs under the old rates would have been on average a little above their pay for the old runs, especially where the new bid sheets with pay at the old rates, given out beforehand showed that some of them, like Cunningham, would actually get less pay, so that in those instances the pay raise would in part compensate for that reduction. On all these facts I cannot find that the raise, insofar as it benefited Louisville drivers, was deliberately designed to give them a special benefit for coercive reasons, particularly where the zone- wide raise came as normal company action arising out of the Memphis expansion which was conceived and imple- mented long before the Union came on the scene, as found above Finally, General Counsel stresses (1) the announcement of this raise was a unique event, totally unexpected by the drivers at Louisville because they had already received their annual raise and were told by a zone official in June that they could not expect another one at the coming bid meeting, and (2) Respondent gave no persuasive explana- tion for timing it dust 6 days before the election, when the actual raise did not become effective until 9 days after. As to (1), I have already found that a second raise in one year was not a unique or abnormal event under company raise practices, and that at the June 21 meeting with drivers the zone traffic manager indicated his doubts whether they would get another raise at the coming bid meeting, in view of the March raise and budgetary problems; in giving this opinion, however, he did not flatly rule out another raise, as General Counsel suggests. Hence, the announcement of the August 23 raise cannot be consid- ered an unexpected reversal of a prior decision, such that it carried a message of a special promise of immediate benefit designed to induce votes against the Union. The timing is suspicious, of course, under the authorities cited above," and also because Respondent had recently been adjudged guilty of a violation of the Act in a unique announcement of companywide benefits to drivers in its Eastern division only 2 days before an election late in 1966." The record shows, however, that it was long company practice to announce raises for drivers at the bid meetings, and not before, so the lack of prior announcement here is not significant in itself. It also appears from intercompany correspondence and credible testimony of zone officials that the original target date for expanded production at Memphis was about August 14, with the new runs tentatively scheduled to start August 18, and top management directed the zone traffic manager to prepare new run schedules and issue them to drivers beforehand in the usual course to meet these dates. The bidding of runs was usually set about 2 weeks before the target date of full production under normal company practice, in order to give drivers 16 See also Triangle Plastics, inc 166 N L R B 786 11 Frito-Lay, Inc., 169 NLRB No 115 the intervening time to get acquainted with the new runs The zone traffic manager accordingly prepared new run schedules, with new bid sheets showing pay for each run based on the old rates, about August 8, with instructions to release the bid sheets to all zone drivers in preparation for bidding. However, due to engineering and construction delays at Memphis, top management was compelled twice to put the production target date back to a final date of September 7, with the bid meetings set for August 23. The zone traffic manager then issued the new run schedules to all drivers for consideration about a week before the 23rd. That date, a Saturday, was chosen for bidding so that the drivers would have the ensuing 2 weeks in which to get familiar with their new runs, before they became fully operative on September 7, and also so that the drivers would not have to change fully to the new runs during the period of peak volume, with many overloads, always encountered in the week before Labor Day and on that weekend itself In this period, called by Bennett an emergency situation, Memphis was not yet at full production of corn chips, so Respondent was still compelled to procure most of them from outside the Southeastern zone, using both common carriers, overload trucks, and rented equipment, to handle the peak volume before Labor Day. In addition, the zone traffic manager did not want to call back all drivers in the zone from their holiday weekend for a bid meeting on August 30 These facts persuasively show that all zone drivers including the Louisville group would have rebid their runs, and received the wage raise, as much as 2 weeks before the actual event, but for construction delays in the Memphis expansion which cannot be charged to any company design or action from antiunion motives, so far as the record discloses. Thus, the final choice of August 23 was dictated by outside factors, not by the QCR The Union argues the August 23 announcement was coercive because there was no evidence of economic harm to Respondent if it had been delayed until September 7. The obvious answer is that such delay would have been contrary to established company raise practices, which might well have raised questions and discontent about rebidding without the usual raise among 82 other drivers in the zone, particularly a large group in the Atlanta area where a large competitor was located It would also have made it impossible for all drivers in the zone to bid intelligently on the revised runs, for they needed to know what each new run would pay under the increased wage rates before they made their choice. More important, such delay, contra- ry to past practice and sound economic factors, would have violated the very duty placed upon Respondent by Board decisions, to act on the question of granting or withholding benefits as it would have if the Union were not present. Deutsch Co., 178 NLRB No. 95; Globe Construc- tion Co., 162 NLRB 1547. In addition, delay of the announcement until after the election might well have been held to be a violation of the Act and interference with the Board's election procedure See Ralph Printing & Litho- graphing Co., 158 NLRB 1353, fn. 3, and Texas Electric Cooperatives, Inc., 160 NLRB 440, 461. Finally, I can find nothing unique or unusual in the manner and circumstances of the August 23 wage announce- FRITO-LAY, INC ment, which would indicate deliberate coercive action. It occurred at a normal Saturday bid meeting dust before the drivers bid for runs, after the officials present had introduced themselves, made preliminary and complimenta- ry remarks to the drivers, and listened to driver complaints. The meeting ended with a steak dinner for the drivers. All this was in accordance with longstanding bid and pay raise practice, of which the drivers were well aware." On all these circumstances, I cannot find the decision in the prior Frito-Lay case supra, apposite or controlling on the facts." On the whole record, I conclude that Respondent has adduced substantial and persuasive evidence adequate to establish that the September 7 wage raise was given to drivers throughout its Southeastern zone as a result of economic changes in the zone conceived and started long before the advent of the Union and implemented in the normal course both before and after the advent of the Union, and that the announcement of the raise on August 23 throughout the zone including the Louisville plant came in the normal course of and was dictated by these economic changes, and that Respondent took these actions for reasons unrelated to the appearance of the Union and the pendency of the QCR, and that General Counsel has not sustained the ultimate burden of proof that the announcement was made for coercive purposes and to induce the Louisville drivers to vote against the Union. I grant Respondent's motion to dismiss paragraph 6 of the complaint based on the wage announcement of August 23.20 I also find that this conduct did not interfere with the election. In the absence of coercive conduct in the August wage announcement, or any other unfair labor practices charged or proven, 21 which are of such a character as to preclude " ° The only variations from a normal bid meeting were remarks by a company official admitting past company mistakes and the request to the drivers to show their confidence in the Company and allow it to "solve our problems" by voting against the Union, which remarks were followed by the announcement of the wage raise However, neither General Counsel nor the Union made any impressive argument on the basis of these remarks just before the announcement, and since they were about the same as company officials had made to the same dnvers at the June 21 meeting before the advent of the Union, I cannot conclude that they indicated an antiunion or coercive purpose in the August announcement " Kellwood Company, Ottenheimer Bros Mfg Div v NLR.B, 411 F 2d 493 (C A 8), cited by General Counsel, does not control, because it is inapposite on the facts, and does not support his contention otherwise in that case the announcement of wage raise was accompanied by state- ments palpably telling the employees it was given to show them they did not need a union to get such benefits , the Court upheld the finding of violation on the basis of this context as well as the timing of the announcement, but then said (p 497) "These factors do not make the granting of the wage increase itself a violation of Section 8(a)(1)" and rejected any such finding for lack of evidentiary support in the whole record A similar antiunion context does not appear in the case at bar, even considering the remarks of Bennett at the August 23 meeting '° See Deutsch Co, supra, cases cited in fn 19 above, and Nalco Chemical Company, 163 NLRB 70, and Havatampa Cigar Corporation, 175 NLRB No 109 1 have carefully considered other authorities cited by General Counsel and the Union and find them inapposite on the facts " i find that the remarks of Bennett and Reed to Louisville drivers on August 28 as found above, which did not include any reference to the wage announcement of August 23 nor any other express or implied mention of past or future benefits, were far too general and vague to convey to the drivers any promise of future benefits This 407 a fair election, the remaining issue raised by General Counsel and the Union is whether Respondent's initial refusal of the demand for recognition, after the Union obtained clear majority status in the appropriate unit as found above, was in itself an illegal refusal to bargain in violation of Section 8(a)(5) and (1) There is no proof that (1) Respondent knew or had any reason to suspect before it received the Union's demand that it had achieved majority status on June 21, 1969, or (2) that Respondent had rejected the collective-bargaining principle or engaged in conduct designed to undermine the Union or dissipate its majority status, or to prevent the holding of a fair election Hence, it cannot be said that its expression of a good-faith doubt of majority status and failure to accept the offer of a check of the authorization cards, in person or through a third party, was per se made in bad faith or otherwise demonstrated a desire to avoid recognition of the Union at all costs, especially where Respondent at the same time suggested resort to a secret ballot election as the best way to settle the issue of representation, and the Union followed that suggestion by filling its petition in Case 9- RC-8204, in which Respondent cooperated to secure a consent election.22 I therefore conclude that the record herein does not preponderantly establish Respondent's bad faith in refusing to recognize the Union without a Board election. I grant Respondent's motion to dismiss paragraphs 8 and 9 of the complaint on that issue, and will recommend that the complaint be dismissed in that respect. CONCLUSIONS OF LAW 1. In Case 9-CA-5351 Respondent has not engaged in any of the unfair labor practices charged in the complaint 2. In Case 9-RC-8204 Respondent has not engaged in any conduct in the form of its announcement of a wage raise on August 23, 1969, or otherwise, which inter- fered with the rights of employees so as to prevent a free choice in the election of August 29, 1969. RECOMMENDED ORDER Having found that Respondent has not engaged in any unfair labor practices as alleged in the complaint, I will recommend that the complaint herein be dismissed in its entirety. speech was not the subject of any objection to the election , and not argued by the Union in its brief I find that the speech was not conduct affecting the results of the election " It is well settled that to establish an employer's failure or refusal to grant recognition to a union on the basis of a card showing violates Sec 8(a)(5), the General Counsel has the burden of proving not only the majority status of the union in the appropriate unit, but also that the employer in bad faith declined to recognize or bargain with the Union Joy S.lk Mills, Inc, 85 NLRB 1263, enfd 185 F 2d 732 (CAD C), and where the record does not establish facts showing a rejection of the collective-bargaining principle , or coercion of employees to undermine the union and its status , or other conduct which would prevent the holding of a fair election, General Counsel does not sustain the requisite burden of proof of bad faith refusal of recognition Arthur F Derse, Sr, etc 173 NLRB No 30, Seymour Transfer, Inc., 179 NRLB No 5, Poughkeepsie Newspapers, Inc 177 NLRB No 123 408 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Having found that Respondent has not engaged in any the quasi-objection raised by the section of the Regional unfair labor practices or other conduct which tainted the Director's Report entitled "Other Conduct" in that case, election of August 29, 1969, or would prevent the holding be overruled, and that the results of the election set forth of a fair election, in the future, I shall recommend that in the Tally of Ballots in the case be certified. Objection 2 of the Union filed in Case 9-RC-8204, and