Schweigers, Inc.

420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Schweigers, Inc. and Local 2357, International Asso- ciation of Machinists and Aerospace Workers, AFL-CIO. Case 18-CA-2782 August 27, 1970 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS MCCULLOCH AND JENKINS On April 23, 1970, Trial Examiner Josephine H. Klein issued her Decision in the above-entitled pro- ceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. The Trial Examiner further found that the Respondent had not engaged in certain other unfair labor practices alleged in the complaint, and recommended that such allegations be dismissed. Thereafter, the Respondent filed exceptions to the adverse portions of the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in 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 here- by affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and the brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the Recommended Order of the Trial Examiner and hereby orders that the Respondent, Schweigers, Inc., Watertown, South Dakota, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE JOSEPHINE H. KLEIN, Trial Examiner - Upon a charge filed against Schweigers, Inc (Respondent) by Local 2357, International Association of Machinists and Aerospace Workers, AFL-CIO (the Union or IAM) on May 13, 1969,' a complaint was issued on December 18. Pursuant to due notice, a hearing was held in Watertown, South Dakota, before the undersigned Trial Examiner on January 27, 28, and 29, 1970. The General Counsel and Respondent were represented by counsel and the Union by a Grand Lodge Representative . All parties were given opportunity to present evidence and to examine and cross-examine witnesses. The parties waived oral argument and thereafter the General Counsel and Respondent filed briefs. Upon the entire record, observation of the witnesses and consideration of the briefs, the Trial Examiner makes the following. FINDINGS OF FACT AND CONCLUSIONS OF LAW 1. JURISDICTIONAL FINDINGS A. Respondent, a corporation operating plants in Water- town, South Dakota, is engaged in the sale and service of truck and trailer equipment. In the course of its business, it annually purchases raw materials valued in excess of $50,000 which are shipped to its Watertown, South Dakota, plants directly from points outside South Dakota It annually sells products valued in excess of $50,000, which products are shipped directly to points outside South Dakota. Respondent is, and was at all times material herein, an employer engaged in commerce within the meaning of Section 2(6) and (7) or the Act 2 B. The Union is a labor organization within the meaning of Section 2(5) of the Act. If THE UNFAIR LABOR PRACTICES A. The Issues The complaint, issued on December 18, alleges that at all times since March 7 Respondent has refused to bargain in good faith with the Union, which was certified as the exclusive collective-bargaining agent for Respondent's pro- duction and maintenance employees' in April 1964. The complaint alleges certain specific acts as violative of the Act, in addition to an overall pattern of bad-faith or surface bargaining since March 7. The complaint further alleges that Respondent violated Section 8(a)(1) by threatening to discharge strikers and by advertising for workers to replace the strikers Finally, it is alleged that Respondent violated Section 8(a)(3) by discharging strikers. Respondent maintains that the alleged discharge of strik- ers and certain other specific alleged conduct, even if viola- tive of the Act, have been fully remedied by Respondent's compliance with a settlement agreement approved by the Regional Director on July 23. Respondent contends that it has no further obligation to bargain with the Union I Ecept where other«t,e Indiw,,ted all date , hercm arL in 1969 ' National Labor Relat,om Au a. amended (61 Stat 136 71 tit.u X19 19USC Sep ICI et,egI The propriet% of the unit i. not in quewon 185 NLRB No. 55 SCHWEIGERS, INC 421 because by November 4 the parties had bargained to an impasse and Respondent then had a good-faith doubt as to the Union's continuing majority status, which doubt Respondent sought to submit to the Board by filing a representation petition on November 12 (18-RM-699). Although the parties have not so argued the case, in the Examiner's opinion the first issue to be decided is whether Respondent violated the settlement agreement of July 23 or thereafter committed unfair labor practices war- ranting setting aside the settlement agreement Only if it is first determined that the settlement agreement was properly set aside and should not be reinstated, will it be in order to determine whether Respondent committed the presettlement violations alleged in the complaint. See Furr's Cafeteria, Inc., 179 NLRB No 35, fn 1. B. Background and Chronology The Union was certified in April 1964. In all negotiations after the certification, Respondent's chief bargaining spokes- man was Henry N Teipel, an independent management consultant with offices in Minneapolis. He was accompanied by Don Schweiger, sole owner and manager of Respondent, and Howard Landon, Respondent's sales manager. At all times in 1965 and thereafter, the Union's bargaining was conducted by Peter Popp, IAM Grand Lodge Representa- tive, accompanied by an employee committee At two of the meetings, another Grand Lodge Representative was also present. Except to the limited extent specified below, Teipel and Popp were the negotiators. An unfortunate clash of personalities between these two men appears to have colored much of the bargaining throughout! The parties' first collective-bargaining agreement was effective from April 1, 1966, through March 31, 1967. Two successive 1-year contracts were then executed, the last expiring on March 31, 1969 Prior to the expiration of the third contract, both Respondent and the Union gave notice of their desires to terminate. Negotiations for a new contract commenced on March 7, 19691 The second negotiating session, held on March 28, did not result in a new agreement Before the March 28 meeting, Popp attempted to enlist the aid of the United States Mediation Service, but there was no mediator available at that time However, Federal conciliator Simon Zuiker arranged and conducted all the negotiating sessions after March 28 At Mr. Zuiker's request, the Union postponed a strike originally scheduled to start April 1, the day after expiration of the contract. On April 23 a strike and picketing began 6 The next Popp testified that Grand Lodge Repre+entauic \ ogel ,uti ndcd thL Ia t meeting on November 4 hccau e Mr ZuikLr the medi,itorl thought a+ long as Teipel kept blo"ing up It meeung+ and I ii,i+ hl.... in,-, hai,k at hun he' picture " that another neii lace should wine into the' ' On the same day, Respondent was served with papers initiating an action by the Union in the United States District Court seeking to compel Respondent to arbitrate several grievances That action was tried in November and was awaiting decision at the time of the present heanng The Union understood that Respondent had agreed to extend the expired contract through April 22 Respondent denies that it had agreed to any such extension It is unnecessary for the purpose of this Decision to resolve any conflict on this point bargaining session, on May 8, also failed to achieve agree- ment on a contract. On May 13 the Union filed an unfair labor practice charge alleging that Respondent had refused to bargain in good faith since March 28 and had unlawfully discharged the strikers Both the strike and contract negotia- tions continued, with bargaining sessions being held on May 26, June 9 and 16, and July 11. On July 16 Respondent signed an informal settlement agreement, which was then signed on behalf of the Union and approved by the Regional Director on July 23 The settlement agreement provided, inter alia, that Respondent would bargain in good faith with the Union and would reinstate the strikers "upon their unconditional application to return to work " Again, both the strike' and contract negotiations contin- ued Negotiating meetings were held on August 5 and 19 and September 9, without successful consummation of an agreement. At a meeting convened on November 4 Respondent announced 'its refusal to continue negotiations on the grounds that the parties had reached an impasse and Respondent believed that the Union no longer represent- ed a majority of the unit employees Respondent reduced its position to writing in letter addressed to the Union on November 7 and on November 12 filed a petition for a Board-conducted election (18-RM-699) On November 29 the Union made a written request for the resumption of negotiations In its letter the Union maintained that no impasse existed and that Respondent had wrongfully withdrawn recognition and refused to contin- ue bargaining. Respondent did not reply to that letter On December 18 the Regional Director issued an order setting aside the settlement agreement on his conclusion "that the Employer has failed and refused to bargain with the Union in good faith" and "that the provisions of the settlement agreement have not been carried out by the Employer." Simultaneously the present complaint was issued alleging misconduct both before and after the settle- ment agreement On December 19 the Regional Director dismissed Respondent's election petition because of the pendency of the complaint. Respondent took no appeal from this dismissal.8 C. Alleged Postsettlement Misconduct 1. Refusal to bargain The complaint alleges that since March 7 Respondent has negotiated "in bad faith and with no intention of entering into any final or binding collective-bargaining agree- ment " In addition, it is alleged that since March 29 Respondent has refused to negotiate concerning "job ratings, job classifications and merit ratings" and the employee group insurance plans, which Respondent unilaterally changed on March 15. In the July settlement agreement Respondent had committed itself to bargain in good faith and, specifically, to meet "at reasonable times upon request" ' One striker returned to work on July 17 As of the time of the present hearing, the remaining 10 stnkers were still out ° This fact was verified from the Board's records, of which the Examiner takes official notice 422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and to "bargain, upon request . concerning changes in the group insurance plan." Respondent contends that it fully met its obligation under the Act and the settlement agreement until November 4, when the parties had reached an impasse, which relieved Respondent of the obligation to continue bargaining a The wage structure The present negotiations were for the fourth agreement between the parties The first agreement had taken 2 years to negotiate. The 1967 and 1968 agreements had been reached in two and three meetings, respectively, with a 2-week strike in 1968. At the first meeting in 1969, on March 7, Respondent offered a wage increase of 8 cents per hour Teipel credibly testified that the Company took the relatively unusual step of making a wage offer before noneconomic matters were disposed of to communicate its desire to reach agreement expeditiously He reasonably contended that the 8 cents was considered a substantial first offer in view of the fact that the 1966, 1967 and 1968 agreements had been reached at hourly increases of 10 cents, 10 cents and 15 cents, respectively. At the second meeting, on March 28, after being served in litigation brought by the Union, Respondent demanded elimination of the checkoff, the only contract change it sought. Teipel testified that this demand was purely strategic and it was not pressed to impasse. At the March 7 meeting the Union presented 26 numbered demands for contract changes.' These demands were reviewed seriatim and agreement was reached on some before the meeting adjourned. One of the Union's major demands was. "Delete present merit system. Provide job classifications. Provide 50 cents increase [across] the Board " The Union orally listed eight or nine classifications, within which it wanted automatic wage progressions to specified maximum rates The matter was discussed at virtually all subsequent meetings with Respondent stating its opposition to job classifications and automatic increases. Teipel said that the classifications were unnecessary in such a small plant; that Respondent's opera- tions did not call for highly skilled workers; and that the Company desired to continue its established policy of encouraging and rewarding individual performance. The Union's demand for job classifications with automatic wage progressions within classifications had been a promi- nent issue in the negotiations in 1967 and 1968 10 In those years the Company had successfully bargained for incorpo- rating into the agreement its long-established policy of periodic wage reviews and semiannual performance evalua- tions for merit increases to individual employees. The disa- greement between the parties was sharp and concerned basic principles. Although there were several unresolved issues between the parties, as the 1969 negotiations pro- gressed, they were more and more dominated by the issue Since several of the demands were multipart, the actual number was higher 10 There is no specific evidence as to whether this matter was also disputed in connection with the original contract , executed in 1966 of evaluation of individual ability versus job classification as the basis of determining wages and wage increases Both sides made some concessions on various issues On June 30, Respondent proposed a 3-year contract with annual increases of 10 cents, 12 cents and 15 cents, along with some other concessions The Union membership, agree- ing with Popp's opinion, rejected this offer. Job classifica- tions and automatic wage progression remained a Union demand and Respondent persisted in rejecting the demand. The Company did state that it might consider three classifi- cations of shop craftsman, shop assembler and shop helper, but Respondent offered no definitions of the three classifica- tions and the suggestion was abandoned without any discus- sion or serious consideration. The basic issue of individual wages based on merit versus job classifications with automat- ic increases remained the major subject of discussion, with no perceptible progress having been made thereon in the eight bargaining sessions held before July 26, when the settlement agreement was reached, subject to the Regional Director's approval On August 5, at the first meeting after the settlement, Respondent offered to adopt either the 3M or the National Metal Trades job evaluation plan, but the Union would not consider these " That meeting was ended by the mediator because, in Popp's words, "The Union took the position that we got to have the wage and job classification" and that "unless the union accepts the merit system and the job evaluation program and drop all other issues, there is no use meeting any more." Teipel was unable to attend the next meeting, on August 19, and Messrs. Schweiger and Landon bargained for Respondent. In the morning Popp presented a written proposal on job classifications and wages. He proposed five classifications of "production workers" and three in the "truck trailer and body mechanic department " The proposal called for automatic increases in specified amounts for each classification at the end of 30 days, 3 months and 6 months, with specified amounts available for merit increases thereafter. The Union proposal further provided that Respondent would state reasons whenever a merit increase was denied and denial would be subject to the contractual grievance and arbitration provisions of the col- lective-bargaining agreement 12 A discussion ensued, concerned primarily with the place- ment of individual employees within the suggested classifica- tion. Then, after a luncheon recess, Schweiger presented a countersuggestion of five named classifications, which coincided with Popp's proposed classifications of "produc- tion workers," with one title changed. Schweiger's proposal did not include any wage rates but there was some discussion " The plans were not described at the hearing The Company offered a copy of the 3M plan to the union negotiators for inspection but the offer was rejected IAM representatives would presumably be familiar with the National Metal Trades plan " There was an unresolved conflict between Popp and Teipel as to whether the denial of ment increases had previously been subject to grievance Popp apparently maintained that the Company had taken that position that denial of merit increases was not subject to grievance No such grievance apparently had ever been brought, Popp maintaining that the Union had simply recognized the futility of doing so Teipel, however, testified that Respondent considered such denial as grievable SCHWEIGERS, INC of that matter, with the Union translating its proposed wage ranges to Schweiger's alternative classifications. According to Popp , Schweiger was not unreceptive to the principle of automatic wage progression but felt he could not adopt Popp's detailed proposal in all respects because of the high wage level. Popp 's testimony continued. Q. On August 19th, was there any agreement between the Union and the company on wage rates? A. . After we discussed all this, Mr Schweiger thought we was too high. He also was happy with the idea of the classifications , and he says he wants, now he wanted a recess to study the union 's wages and classifications. . . So he got up, and when he got up, Mr. Landon says to me, "Say, Pete, if we grant you these wages and grant you this classifica- tion, have we got a contract?" I says, "If you grant us this and whatever has been granted to us in the past, I will even go better than that , I will reduce some $3.25 , just so we have a contract." So he says, "You will?" Then they both walked out smiling. Substantially corroborating Popp , Schweiger testified that he "had no objection to the classifications" but that the problems involved the placement of the employees within the classifications and "the subject of automatic wage pro- gression." Schweiger acknowledged that he had agreed that he "would seriously consider the subject discussed that day." At the next meeting, held on September 9, Teipel stated that Respondent would not agree to wage classifications and insisted upon retaining the Company's job evaluation and merit review system . According to Popp, Teipel "acted like he didn't hear" Popp's inquiries concerning the classifi- cations discussed at length during the August 19 meeting. Popp maintained that Teipel gave no explanation of Respondent's rejection of the job classification plan, but simply insisted on Respondent's most recent offer, which the Union membership had previously rejected. Teipel testified that he explained Respondent 's objection that the Union's proposal of August 19 "cuts the guts out of the Company's previous merit review program " His analysis disclosed that the Union 's demand provided automatic wage increases from two to three times as large as possible merit increases." This analysis is accurate." Wherever the truth lies as to extent of Teipel's explanation of the Company's position at the September 9 meeting, there is no dispute that the discussion became "heated" and the mediator ended the meeting before lunchtime. The General Counsel maintains that Respondent was guilty of refusal to bargain on September 9 when "Teipel refused to discuss job classifications , reverted to the merit- review proposals , and thereby withdrew agreement to the " Teipel's wording was that the schedule "shows about anywhere from two-thirds to three-fourths of the spread from the bottom to the top is automatic " " For example, for the highest classification the Union proposed a minimum hourly rate of $2 increased to $2 30 in 30 days, to $2 60 after 3 months, and $2 90 at 6 months, with an additional 35 cents then available for merit increases, up to a maximum of $3 25 per hour at the end of a year For janitor, the Union proposed a minimum of $1 80, increasing to $1 95 in 30 days, $2 10 in 3 months, and $225 in 6 months, with an additional 15 cents for merit increases 423 job classifications" which had been "proposed by Respond- ent." But, as Popp conceded, no agreement had been reached in the August 19 meeting His testimony itself indicates that Schweiger had shown himself amenable only to the possibility of five designated classifications and had declined to discuss wages as such. Schweiger's "proposal" of classifi- cations contained no reference to wage ranges or progression Agreement on classifications in itself would serve no purpose absent mutual understanding as to the use of which classifi- cations would be put, and there is no evidence that Schweiger indicated willingness to abandon merit evaluation as the dominant factor in employees' monetary advancement The conclusion is inescapable that, in their desire to reach ultimate agreement, Popp and Schweiger avoided discussion of the real issue in dispute It was Teipel's subsequent analysis which laid bare the insubstantiality of the apparent rapport between Popp and Schwefger." On all the evidence, the Examiner concludes that the General Counsel has failed to establish that on September 9 Respondent in bad faith withdrew a tentative agreement previously reached. On September 9 the parties were, as they had been for some time, deadlocked on the fundamental issue of wage determination. Nothing had changed by November 4, when the twelfth, the final, meeting was held. Popp's testimony leaves no doubt that the Union was not prepared to enter any contract without agreement on "the wages and job classifications "1fi That issue had been discussed at almost all of the 1969 meetings and in the course of negotiating the 1967 and 1968 agreements. There is no suggestion that the Union was prepared on November 4 to present any offer or argument calculated to change Respondent's position Thus, even if there were other unresolved issues," further negotia- tions would have been futile The General Counsel maintains that "the whole course of bargaining shows a fixed intent on the Respondent's part not to agree to relinquish control over wage rates and wage increases." This statement embodies an exaggera- tion of Respondent's position Respondent was offering across-the-board increases to existing employees. And it was committing itself to periodic reviews of wages generally and semiannual evaluation of individual employees. Popp " Presumably Teipel had been retained by Respondent for just this sort of analytical advice According to Popp, Teipel had caused Schwerger to stiffen his position on another item in the second bargaining session, on March 28 Popp testified "The [Union's] proposal number 7, at that time Mr Schweiger claimed he had no problem with that now Mr Tefpel then whispered to him, `Pete is trying to give you the shaft here' So then he said no afterwards, he pointed out, I suppose, the shaft we had been giving him " On cross-examination, Popp testified Q So in your opinion the merit review was probably one of the chief issues keeping the parties apart? A And the job classifications, none of them had a job classification Here is where an agreement would have resulted, what they had agreed to give me plus the wages and job classifications, then there would have been " It is not clear what, if any, substantial issues remained At one point Popp testified that the Union's "discrimination" clause remained a hard-core issue However, although the record is somewhat confused, it appears that on June 30 Respondent had offered to accept the Union's proposed "discrimination" clause as amended in a manner satisfactory to the Union The insurance issue is discussed below 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD testified that Respondent had refused to consider the denial of merit increases a subject to the grievance procedure in the contract, although on this point his testimony was somewhat confused. Teipel, however, testified that Respond- ent did consider the denial of merit increases to be a proper subject of grievance.1e The Union's 1969 demands included a provision that the denial of ment increases was to be subject to grievance. However, that provision appears not to have been specifically discussed because of the basic disagreement as to the wage structure. The record does not establish that Respondent was insist- ing upon unfettered control over wages; it shows only that Respondent was unwilling to relinquish as much control as the Union was demanding In any event, it is not per se an unfair labor practice for an employer to bargain for a contractual provision giving it unilateral control over a term or condition of employment. See NL.R B. v American National Insurance Co., 343 U.S. 395 On the other hand, insistence on virtually unfettered control over wages may constitute one factor evidencing an overall pattern of 'bargaining in bad faith with no desire to reach agreement. Tex-Tan Welhausen Co., 172 NLRB No 93, enfd. 419 F 2d 1265 (C.A 5); East Texas Steel Castings Co., 154 NLRB 1080 On the record in this case, the Examiner cannot conclude that Respondent's insistence upon merit evaluation as the corner- stone of its wage policy was violative of the Act Obviously it cannot be said Respondent's proposal was one which it knew the Union would certainly reject, in view of the fact that the Union had accepted it in three prior contracts Respondent had already made several concessions and, as heretofore noted, had offered a 3-year contract with annual across-the-board increases of 10 cents, 12 cents, and 15 cents per hour in addition to continuation of the existing merit increase provisions.19 Additionally, Respond- ent had proposed limited job classification plans, apparently retaining merit evaluation, but the Union had refused to consider them. It is clear, as the Federal mediator recognized, that by November 4, the parties' respective positions on wage determination policy had so hardened that further discussion was then impossible The General Counsel contends that if an impasse existed on November 4, it was broken on November 29, when the Union wrote a "come-down" letter and requested " Teipel apparently stated this position in the course of the negotiations Popp testified "During negotiations Mr Teipel would say it is covered And to make sure we all know about it, let's add the clause that the merit review is covered, but he would refuse Q And because you felt that the merit rating system was not subject to the grievance procedure you did not file any grievances9 A Right Subsequently after that because these grievances happened in the beginning " " Popp testified that on July I I the Union "accepted the wage offer" In view of the Union's continued insistence on job classifications with specified wage rates and automatic wage progression, it is difficult to understand what "acceptance" of Respondent's wage offer entailed As late as November 29 the Union's written proposal called for hourly rate increases ranging from 45 cents to 90 cents (all but one classification getting 60 cents or more) within 6 months Popp also testified that on July 11 the Union said it would agree to a 3-year contract only if there was a cost-of-living provision, to which Respondent had not agreed and which the Union had agreed to drop from its demands in a 1-year contract resumption of bargaining. In that letter Popp said that there were "still many open issues to talk about"; that he was "flexible about [his] job classifications and wage rate proposals"; and that "[t]he union has not made final demands " However, Popp's letter then proceded. Subject to agreement on a complete contract I propose these lower wage rates to go with Mr. Schweiger's job classification that I accepted. There followed a classification and wage rate schedule precisely the same as that submitted by the Union on August 19 except that each figure had been reduced by 5 cents There was no retreat from the Union's eight classifications," the amount and timing of automatic increas- es within classifications, or the amounts available for addi- tional merit increases Since Popp had indicated on August 19, when he presented the wntten proposal, that he was willing to lower the wage level he demanded, the November 29 proposal represented no new concession Thus there was no substantial change in the Union's position on the impasse issue. It is only "[w]here the position of one of the parties undergoes a substantial change" that an impasse can be said to have been broken so as to render further bargaining potentially fruitful Webb Furniture Corp., 152 NLRB 1526, 1529, enfd. 366 F 2d 314 (C.A 4); Sharon Hats, Inc., 127 NLRB 947, enfd 289 F.2d 628 (C.A. 5). In context, the Union's retreat of 5 cents per hour from its August 19 proposed wage schedule was "trivial or meaningless " N.L.R B. v Webb Furniture Corp., 366 F.2d 314, 316 (C A. 4), Transport Co. of Texas, 175 NLRB No 130 (TXD). On all the evidence, the Examiner finds that the parties bargained to an impasse on the wage structure issue and that the impasse was not broken by the Union's letter of November 29 b Group insurance Early in March Respondent announced to the employees changes in the Company's group insurance plan without consultation with the Union 2i Among the 26 demands for contract changes presented by the Union at the first negotiating session, on March 7, was adoption of the IAM health and welfare,plan at no cost to the employees. Popp complained of the Company's having made changes without bargaining with the Union. But, so far as appears, the Union did not direct any specific objections to the changes made in the existing policy but was concerned with securing adoption of the IAM plan. The Union's charge alleged the unilateral changes in the group insurance plan as violative of Section 8(a)(5) of the Act. In the settlement agreement of July, Respondent " ° Mr Schweiger had listed only five on August 19 " Respondent introduced undisputed evidence that the changes consti- tuted an "upgrading" of the policy, with increased benefits and premiums Respondent's evidence was also undisputed that the changes, effective March 15, had been required by the insurer, with Respondent given no alternative other than to adopt the new terms or have the coverage terminated The plan is voluntary for the individual employees and is financed jointly by the employer and participating employees SCHWEiGERS, INC specifically agreed to "bargain upon request , with [the Union] concerning changes in the group insurance plan " The matter was discussed at the first postsettlement bargaining session, on August 5 . According to Teipel and Schweiger, Schweiger stated that the existing plan had been studied by independent insurance agents who had unanimously stated that they could not offer better, or even as good , coverage at comparable cost. Schweiger further testified that the insurance had proved very satisfactory. Schweiger also testified that he said he was amenable to consideration of any alternative the Union might present which provided as good or better coverage at the same or lower cost Concerning the Union 's demand for adoption of the IAM funds , Teipel testified that he explained at some length that he had had considerable experience with jointly administered welfare funds and had found them generally unsatisfactory. Popp denied that Respondent had explained its position. He maintained that the Company representatives took an uncompromising , take-it-or-leave-it position that it would not consider any alternative to its existing plan under any circumstances . However, Popp also testified that Respondent refused his demand for data he needed "so [he] could give them a quote." He testified that, although the Company gave him the booklet describing the benefits, it gave provided data enabling him to "make a determination of relative costs." Thus Popp's testimony itself indicates that he believed himself free to submit an alternative plan for consideration . There is no indication that he ever serious- ly suggested consideration of any alternative other than the IAM health and welfare program, as originally demand- ed On all the evidence, and the demeanor of the witnesses, the Examiner credits Schweiger's and Teipel's testimony and finds that, while rejecting the IAM health and welfare program, Respondent left open the door for the Union to present for consideration an alternative insurance plan.22 However, the Union never renewed its request for relevant information . After August 5 the Union made no attempt to discuss the matter because, in Popp's words, "It was considered a dead issue . They had gave us no answer." So far as appears , it was not until its letter of November 29 that the Union again mentioned insurance coverage. In that letter, Popp said. I think your withdrawal of recognition was the wrong thing to do because we still have many open issues to talk about There is the insurance question that you agreed to bargain about. Popp did not suggest that he had any new proposal or argument to make on this issue. Under all the circumstances , it cannot be found that Respondent 's failure to reply to the November 29 letter constituted a breach of its commitment to "bargain , upon request concerning changes in the group insurance plan."23 " Respondent's evidence suggests that to be given any consideration, any alternative must, like the existing plan, be available to all Company personnel , not merely unit employees " In view of the impasse on the wage classification issue , it is difficult to see what purpose could be served by resuming negotiations to reopen an additional Union demand 425 On all the evidence, the Examiner concludes that Respondent was not guilty of any unlawful refusal to bargain in violation of either Section 8(a)(5) of the Act or the July settlement agreement in the period July 23 through November 4, when a genuine impasse existed c Frequenci of nieeltnes The fact that there were only four meetings after approval of the settlement agreement does not establish a refusal to bargain on Respondent's part. August 5, less than 2 weeks after approval of the settlement agreement , was the date set by the conciliator That meeting commenced at 9:30 a.m. and by 11:30 the discussion had become so "heated" that the mediator separated the parties and kept them separated when the session resumed at 1.30, after lunch The meeting was then terminated at about 2:40 p.m. Although Popp complained that Respondent would not devote sufficient time to negotiating and that meetings were prematurely ended to enable Teipel to make the afternoon plane to Minneapolis, Popp conceded that at the August 5 meeting the "Union took a position that we got to have the wage and job classification " and the meeting was adjourned when the mediator , having met separately with each side, said ' "that unless the Union accepts the merit system and the job evaluation program and drop all other issues , there is no use meeting any more " Before the participants left, the mediator scheduled a further meeting for August 19 The August 19 meeting, from which Teipel was absent, was very satisfactory to Popp. The next meeting, on September 9, was ended in the morning because the mediator "thought [the parties] were too heated up" and Popp expressed his agreement that "maybe it is a good idea we don't meet today because they are hot, or [Teipel] is putting on a good show, one or the two " Thereafter, on September 24, in response to a request for a compliance report, Respondent wrote to the Regional Compliance Officer, that, inter alia: It appears that the Employer and the Union have been at a Deadlock situation since the Union is insisting on the elimination of some clauses from the previous agreement and also the inclusion of several new clauses which the Employer feels are unnecessary and undesira- ble. The Union in our opinion , is unwilling to move off their many demands and there are many unresolved issues * Regarding meeting at reasonable times to bargain, I believe the Federal Conciliator's minutes would show that each meeting has been set a mutually agreed date At no time have we refused to meet at a time requested by the Union or the Federal Conciliator. These statements are fully supported by the evidence adduced at the present hearing. The conciliator then attempted to schedule a further meeting for October 22, but Teipel was unavailable on that date and it was set for and held on November 4 There is no evidence that the postponement represented bad faith "stalling" by Respondent. As set forth below, 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the November 4 meeting served further to harden an impasse. The evidence establishes that no useful purpose would have been served by extending that meeting, which was ended shortly after it began. There is no basis for concluding, as the General Counsel maintains, that potentially fruitful negotiations were prevent- ed by Teipel's haste to make a plane. On the record as a whole, the Examiner finds that the General Counsel has not established that Respondent failed and refused to meet at reasonable times for contract negotiations after July 23 2 Withdrawal of recognition a. The violation The only other postsettlement unfair labor practice alleged is Respondent's withdrawal of recognition of the Union on November 4. There is no dispute that on November 4 Respondent announced its refusal to bargain further not only because of the existence of an impasse and but also because of its doubt as to the Union' s continuing majority. At the hearing Respondent's counsel presented the Com- pany's good-faith doubt of the Union's majority only as alternative defense to the refusal-to-bargain allegation 24 However, Respondent's two positions cannot be treated as alternative defenses, with decision favorable to Respond- ent on the impasse issue being completely dispositive, since two separate unfair labor practices are alleged, i.e., refusal to bargain and refusal to recognize. The existence of an impasse may constitute a defense to a refusal-to-bargain accusation, but it cannot warrant withdrawal of recognition from the employees' bargaining representative. The distinc- tion is not merely technical, but, on the contrary, has important practical ramifications, not the least of which are an employer's obligations to resume negotiations if the union should alter its bargaining demands sufficiently to break the impasse, and to consult the union before making any changes in wages or terms and conditions of employment. The General Counsel and Respondent apparently view the determinative question as being whether by November 4 Respondent had bargained in good faith for a "reasonable time" after the settlement before questioning the Union's majority. I. M. Jaffe and Sons, 176 NLRB No. 66. W. B Johnson Grain Co, 154 NLRB 1115 enfd 365 F.2d 582 (C.A. 10); Poole Foundry & Machine Co., 95 NLRB 34, enfd. 192 F.2d 740 (C A. 4), cert. denied, 342 U S. 945; N.L.R.B v. Shurtenda Steaks, Inc., 397 F.2d 939 (C.A 10). In the Examiner's opinion, however, it is unneces- sary to determine whether Respondent bargained with the Union for a "reasonable time" after execution of the settle- " In his opening statement he said "Secondly, and failing the efficacy of the impasse defense, or in the alternative, we believe, we have good faith doubts that this union no longer represents a majority of the and as of the last meeting, namely, November 4, 1969, the company advised the union of this doubt and expressed to the union, so stating categorically, that it saw no further need for continued recognition on the part of the company toward the union " ment agreement because, for the reasons hereinafter set forth, it cannot be found that Respondent had a good- faith doubt of the Union's continuing majority Respondent asserts that "There is no dispute that the Union lacked majority status when the Company withdrew recognition at the November 4 meeting "25 Respondent bases its claim that the Union had lost its majority on the alleged fact that on November 4 it had working 9 full- time and 7 "regular part-time" employees, while only 10 employees were out on strike. In its brief Respondent says that "the Union lost its majority because the Company continued in operation and hired replacements for the eco- nomic strikers "26 While the General Counsel does not explicitly concede that the Union had lost its majority status, neither does he deny such loss, contending that "even if the Union did not represent a majority of the employees in the unit on November 4, a bargaining order here is nonetheless warranted " In the Examiner's opinion, Respondent's position is foreclosed by the settlement agreement, in which Respondent made an unqualified commitment to "offer immediate reinstatement" to all the strikers "upon their unconditional application to return to work." As recently as September 24, in a compliance report to the Board, Respondent had recognized continuing obligation in the following terms The personnel records of Schweigers, Inc. have been changed so the employees who went on strike have been changed from "Voluntary Quit" to "Current Employee." If any or all employees on strike ask for work, he or they will be immediately put to work. Thus, Respondent had waived any right it might have had to replace the strikers permanently. Without litigating the question of the nature of the strike, Respondent had, in effect, agreed to give the strikers the status of unfair- labor-practice strikers. Since Respondent by the settlement had, in effect, agreed to consider the strike as an unfair- labor-practice strike, "the Company is precluded from rely- ing on the number of replacements hired during [the] strike as evidence rebutting the presumption of continuing majority status." ` l R B % Ft is A 423 F 2d 1327 (C.A. 3) In addition, the record totally fails to support a contention that the strikers have been permanently replaced Even if the strike was purely economic and if Respondent had not by the settlement agreement renounced its right to replace the strikers permanently, the burden would be on Respondent to establish that they had been permanently replaced Elam v. N.L.R.B., 395 F.2d 611, 614 (C A D.C.). Respondent made no attempt to meet this burden. On the contrary, on questioning by the Examiner, Teipel clearly " In an opening statement at the hearing , Respondent's counsel claimed only a good-faith doubt, which Respondent attempted to have resolved by an election " In a letter to the Union on November 7, Respondent said "While both of us exercised over legal rights, you have, as a result, lost your majority status as representative of our employees Under these circum- stances, and as evidence of our good faith in this matter, we are petitioning the National Labor Relations Board for an election to resolve this ques- tion " SCHWEIGERS, INC 427 indicated that at least the 7 part-time employees were hired temporarily. In this connection, his testimony was, in part- . . . We hope[d] the strike would be resolved and we attempted to get it resolved and if it did then these men would be, of course, back at school and so on, so I would say that we did not originally hold them as men who were being hired on a permanent basis. TRIAL EXAMINER. Do you know whether they were told that this was a temporary job, in effect, pending resolution of the company's problems? THE WiTNESS: I think this was pretty well under- stood. These were men who were only here at the vocational school and graduating and moving on, and those that were hired in, say, April, many of them graduated in May or June and it was obvious that they would not continue even to reside here. While Teipel disclaimed intimate knowledge of Respondent'F operations, his testimony remains uncontradicted, since no other evidence was adduced on this issue. The fact that in May Respondent advertised in the local newspapers for employees, with one of the advertisements specifically seeking "permanent employees," does not alter this finding, as in view of Teipel's testimony that it was not until after the settlement agreement that the Company began to be concerned about the status of the new employees. Teipel testified A. . because we were very anxious on compliance and I was particularly concerned that the company incur no potential liability by not properly reinstating employees who might be coming back to work or offering too we so were continuously discussing who is working now and has anybody come back and if they did make sure you reinstate them right away, so we were in the process, I was continually inquiring on the head counting status to make sure we were not incurring any potential liability of backpay * . . it became very evident as we counted, when we started to count heads we discovered, I don't remem- ber exactly when this occurred, that we might be negotiating here with a minority-status union. After mulling this for some time and getting counsel on it, we finally agreed that we were probably in a rather dangerous position, especially if some of the currently working employees started to raise some kind of fuss Popp testified that, in response to Respondent's inquiries on August 5 and September 9, he had reported that all the strikers intended to return to work for Respondent at the end of the strike. According to overtime records in evidence, during the year proceeding the strike Respondent employed a maximum of 14 full-time employees within the bargaining unit. In other evidence, the maximum number of bargaining unit employees before the strike was placed at 16. It appears that additional employees, principally students, were cus- tomarily hired on only a temporary and/or part-time basis. It certainly cannot be assumed that Respondent intended to retain its November 4 complement of nine full-time and seven part-time employees if and when , in compliance with the settlement agreement , it reinstated the ten strikers on their request. Accordingly , with the strikers retaining employee status, Respondent had no legitimate basis for doubting the Union's continuing majority . Cf. N.L.R.B v. Frick Co, supra. The withdrawal of recognition on November 4 was, therefore, violative of the settlement agreement and of the Act, even though, as hitherto found, Respondent's obligation to bar- gain was suspended by the existence of an impasse reached after good-faith bargaining b. Effect of violation Ordinarily Respondent's unlawful withdrawal of recogni- tion, being a substantial violation of both the Act and the settlement agreement, would call for setting aside the settlement agreement and determination of the alleged pre- settlement unfair labor practices. However, such action appears unsuited to the special circumstances of the present case. In the settlement agreement Respondent committed itself not to deal directly with the employees There is no allegation or suggestion that Respondent has broken that promise. So long as the settlement is in effect and Respondent is bound to recognize the Union, direct dealing with the employees will be unlawful. Accordingly, no useful purpose would be served by determining whether the General Coun- sel has established, as alleged in the complaint, that Respond- ent bargained directly with the employees on March 29. A present finding that Respondent refused to bargain in good faith before the settlement agreement would lead to a bargaining order. But, as heretofore found, since the settlement agreement Respondent has bargained in good faith and an impasse has been reached. Regardless of the nature of Respondent's presettlement bargaining, it would not effectuate the purposes of the Act to order bargaining while a genuine impasse exists. To remedy the alleged presettlement unilateral change in the Company's insurance plan, the settlement agreement provided that Respondent would bargain concerning insur- ance As found above, that issue was negotiated and will be further bargainable if and when the impasse is broken. See Central Illinois Public Service Co., 139 NLRB 1407, 1417-20, enfd 324 F.2d 916 (C.A. 7). The only postsettlement violation, i.e. withdrawal of rec- ognition, basically centers around the status of the strikers. As noted above, the settlement agreement granted the strik- ers the rights of unfair-labor-practice strikers If the preset- tlement allegations of the complaint were litigated and the General Counsel were fully successful in establishing his contention that the strike was an unfair-labor-practice strike, the resulting order could give the strikers no greater rights than they had under the settlement agreement. On the basis of the foregoing considerations, the Examiner believes that the policies of the Act will be best effectuated by reinstatement of the settlement agreement which was set aside by the Regional Director and issuance of an order prohibiting Respondent from refusing to recognize the Union as the collective-bargaining representative of 428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent's employees This conclusion obviates the neces- sity of passing on the allegations of presettlement miscon- duct. then be held in abeyance pending a motion to dismiss the complaint upon full compliance herewith by Respond- ent.27 CONCLUSIONS OF LAW 1. Respondent, Schweigers, Inc., is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2 Local 2357, International Association of Machinists and Aerospace Workers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act 3 All production and maintenance employees, all mechan- ics, welders, trailer repairmen and blacksmiths; excluding the sales personnel, office employees, professional employees, guards and supervisors as defined in the Act constitute a unit appropriate for the purposes of within the meaning of Section 9(b) of the Act. 4. At all times material, the Union has been, and is still, the exclusive bargaining representative of all the employees in the appropriate unit for the purposes of collec- tive bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment, within the meaning of Section 9(a) of the Act. 5. By refusing to recognize the Union as the exclusive representative of its employees in the appropriate unit on November 4, 1969, and at all times thereafter, Respondent has engaged, and is engaging, in an unfair labor practice within the meaning of Section 8(a)(5) and (1) of the Act. 6. Respondent has not engaged in any unfair labor prac- tices other than as set forth in conclusion 5, above 7 Except as set forth in conclusion 5, above, Respondent has not failed to comply with the terms of the settlement agreement in this case approved by the Regional Director for the Eighteenth Region on July 23, 1969. 8. The unfair labor practice described in conclusion 5 above is an unfair labor practice affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has wrongfully withdrawn recognition of the Union as the representative of its employ- ees, the Examiner will recommend that Respondent be ordered to cease and desist from refusing to recognize the Union. A customary notice-posting requirement will be included For reasons explicated above, under the heading "Effect of Violation," the Examiner will not recommend issuance of an affirmative order to bargain. Rather, it will be recom- mended that the settlement agreement approved by the Regional Director on July 23, 1969, but set aside on Decem- ber 18, 1969, be reinstated Respondent's conduct will there- after be governed by that settlement agreement, as imple- mented by the order here recommended Although the Examiner has found that the General Counsel has not established the commission of other unfair labor practices warranting a remedial order, it will not be recommended that any portion of the complaint be dismissed at this time. Rather, it will be recommended that the settlement agreement be reinstated and the case RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, Respondent, Schweigers, Inc., its officers, agents, successors and assigns, shall 1. Cease and desist from: (a) Failing and refusing to recognize Local 2357, Interna- tional Association of Machinists and Aerospace Workers, AFL-CIO, as the exclusive collective-bargaining representa- tive of its employees in the following unit: All production and maintenance employees, all mechanics, welders, trailer repairmen and blacksmiths, excluding the sales personnel, office employees, professional employees, guards and supervisors as defined in the National Labor Relations Act, as amended. (b) In any like or related manner interfering with the nghts of employees guaranteed in Section 7 of the Act 2. (a) Recognize Local 2357, International Association of Machinists and Aerospace Workers, AFL-CIO, as the exclusive collective-bargaining representative of Respond- ent's employees in the above-described unit. (b) Post at its Watertown, South Dakota, plant copies of the attached notice marked "Appendix"" and of the notice, dated "7/16/69," attached to the settlement agree- ment approved by the Regional Director for Region 18 on July 23, 1969. Copies of said notices, on forms provided by the Regional Director for Region 18, shall, after being duly signed by its representative, be posted immediately upon receipt thereof and be maintained by it for 60 consecu- tive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken to ensure that said notices are not altered, defaced, or covered by any other material (c) Notify the Regional Director for Region 18, in writing, within 20 days from receipt of this Recommended Order, what steps Respondent has taken to comply herewith.29 " There appears to be no impediment to the issuance of a final order with respect to part of the complaint while other portions remain outstanding See I U E ( rudee Produ(n) v V L R B 426 F 2d 1243 (C A D C ), Federal Power Commission v Tennessee Gas Transmission Co,371US 145 " In the event no exceptions be filed as provided by Sec 102 46 of the Rules and Regulations of the Board, the findings, conclusions, recommendations , and Recommended Order herein , shall, as provided in Sec 102 48 of the Rules and Regulations , be adopted by the Board and become its findings , conclusions , and order, and all objections thereto shall be deemed waived for all purposes In the event that the Board's Order be enforced by a judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " " In the event that this Recommended Order be adopted by the Board , this provision shall be modified to read "Notify said Regional Director, in writing , within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith " SCHWEIGERS, INC 429 3. The settlement agreement approved by the Regional Director for Region 18 on July 23 , 1969, and set aside on December 18, 1969 , is hereby reinstated. 4. The present proceeding is adjourned indefinitely, pending final disposition on subsequent motion WE WILL NOT refuse or fail to recognize said Union as the exclusive collective -bargaining representative of our production and maintenance employees or in any like or related manner interfere with the rights of our employees guaranteed by Section 7 of the National Labor Relations Act, as amended. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a trial in which both sides had the opportunity to present their evidence, the National Labor Relations Board has found that we violated the law and has ordered us to post this Notice and we intend to carry out the order of the Board and abide by the following: WE WILL recognize Local 2357, International Association of Machinists and Aerospace Workers, AFL-CIO, as the exclusive collective-bargaining repre- sentative of our production and maintenance employees in Watertown , South Dakota. SCHWEIGERS, INC. (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered , defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be directed to the Board's Office, 316 Federal Building , 110 South Fourth Street, Minneapolis, Minnesota 55401 , Telephone 612-725-2611.