The Dow Chemical Co.

372 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Dow Chemical Company, Indianapolis Division' and Oil, Chemical and Atomic Workers Interna- tional Union, AFL-CIO. Case 25-CA-3476 November 4, 1970 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND JENKINS On April 16, 1970, Trial Examiner Phil Saunders 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 Examiner's Decision. Thereafter, the General Counsel filed exceptions to the Trial Examiner's Decision and a supporting brief, and the Respondent filed an answering 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 hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions, the briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recommend- ed Order of the Trial Examiner and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. The name of the Respondent appears as amended at the hearing. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE PHIL SAUNDERS, Trial Examiner: This proceeding under Section 10(b) of the National Labor Relations Act, as amended, was heard in Indianapolis, Indiana, on various dates in December 1969.1 The complaint was issued September 30, on a charge filed by the Union on August 6, against the Dow Chemical Company, Indianapolis i All dates are 1969 unless specifically stated otherwise. 2 The proper name of the Respondent as amended and corrected at the trial. 3 All credibility resolutions made herein are based on a composite Division-herein the Respondent or the Company, and alleges violations of Section 8(a)(1) and (5) of the Act. Briefs were filed by both the General Counsel and the Company. Upon the entire record in the case and from my observation of witnesses, I hereby make the following: 3 FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Respondent has maintained its principal office and places of business at Indianapolis, Indiana, and Zionsville, Indiana, herein called the facility, and is engaged at this facility and location in the manufacture , sale, and distribution of pharmaceuticals and related products. During the past year, a representative period, Respon- dent, in the course and conduct of its business operations, purchased, transferred, and delivered to its facility goods and materials valued in excess of $50,000, which were transported to said facility directly from States other than the State of Indiana ; and during the past year, in the course and conduct of its business operations, manufactured, sold, and distributed at said facility, products valued in excess of $50,000, which were shipped from said facility directly to States other than the State of Indiana. By virtue of the operations set forth above, the Respondent, at all times material to this proceeding, is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union named in the caption of this Decision, and herein the OCAW or the Union, is a labor organization under the Act. III. THE UNFAIR LABOR PRACTICES The complaint alleges the Respondent threatened its employees that they would be permanently replaced if they refused to return and continued to engage in the unfair labor practice strike .4 The complaint further alleges the Respondent failed to bargain in good faith with the Union by maintaining a fixed purpose and intent not to reach any agreement, by making unreasonable and adamant contract proposals, and by refusing to grant existing and longstand- ing conditions of employment, including checkoff, union security, and bumping; and that the Respondent threat- ened to replace striking employees, and bargained individu- ally with employees. As pointed out, the Respondent is one of a number of divisions and plants which operate as a part of the corporate structure of the Dow Chemical Company. The corporate headquarters for Dow are in Midland, Michigan. Dow is organized into five geographic areas and one department. The five geographic areas are: the United States Area, the Pacific Area, the Latin American Area, the European Area, and Dow-Canada. It appears the Life evaluation of the demeanor of the witnesses and the probabilities of the evidence as a whole. * The strike started at midnight on March 17. 186 NLRB No. 58 THE DOW CHEMICAL COMPANY Sciences Department is organized on a product basis rather than by geographic area . The Indianapolis Division-Respondent in this case-is a part of the Life Sciences Department. The Indianapolis Division includes Diagnostic Products, Generic Drugs, Human Health Research and Development, and Rx Pharmaceuticals. Five separate installations are involved in this operation-a pharmaceutical manufacturing plant in Indianapolis, a biological manufacturing plant in Zionsville, a research laboratory in Zionsville, and two warehousing facilities in Indianapolis .5 This record shows that the employees of the facility involved herein, were first represented by a labor organiza- tion in 1940, and the labor organization was the Pitman- Moore Employees Independent Union, herein called the Independent Union. This labor organization continuously represented the employees in the facility from 1940 to 1968, and a series of collective-bargaining agreements were in effect throughout that period of times The most recent of these agreements was for the period from November 1965 to November 1968. On November 8, 1968, a Board election was conducted among Respondent's employees at its facility involved herein. There were four labor organizations on the ballot-OCAW, United Mine Workers, the Zionsville Local of the incumbent Independent Union, and the Indianapolis Local of the incumbent Union. The election was won by OCAW, and the Union was certified by the Board as bargaining representative of Respondent's employees on November 19, 1969.7 The 1965-68 contract with the Independent Union expired on November 17, 1968, and, as aforestated, the OCAW was certified 2 days later.8 Due to the change in the bargaining representative-and prior to any negotiations with OCAW,9 various administra- tive problems developed. The problems related primarily to use of bulletin boards, use of company premises for a union office, use of company telephones by employees for union business, an interim grievance procedure and paid time for employees to handle grievances, and the release of employees from work in preparations for the upcoming negotiations. The General Counsel maintains that Respondent's conduct during the 2-1/2 month interval between OCAW's certification and the start of contract negotiations on February 3, evidenced hostility toward the Union. Richard Oreson, a chief negotiator and an International representative for the Union, testified that in early December 1968 he had two discussions with Charles Carey, manager of industrial relations for Respondent: I asked Mr. Carey that it had been brought to our 5 Dow acquired the Indianapolis Division in 1960 Prior to that date, the Division was the Pitman-Moore Division of Allied Laboratories, Inc 6 GC Exh 9-A to 9-H and Resp Exh 13-A to 13-G 7 The appropriate unit certified was as follows. All employees of Respondent employed at its Indianapolis and Zionsville, Indiana, plants, including plant clerical employees, exclusive of all office clerical employees, salesmen, chemists, bacteriologists , members of the scientific staff, professional employees, guards, and all supervisors as defined in the Act. 8 The 1965-68 contract between the Respondent and the Independent Union contained provisions regulating Respondent's dealings with the Independent Union (GC Exh 9-H) It provided for participation in 373 attention that the bulletin board privilege had been taken away, the union offices were being taken away, the telephones were being taken away, the time permitted to handle union matters, paid time, was taken away, the right to have union leave for necessary union business was taken away, the curtailment of handling problems in the plant, that is grievances... . Later in December 1968, Oregon and other representa- tives of the Union had conferences with Carey and his assistant Gene Wade. The Union's International Repre- sentative Richard Watson also had meetings with Carey and Wade. The 1965-68 agreement gave the Independent Union the use of seven bulletin boards at Indianapolis and seven at the Zionsville plant, and following the certification of the OCAW the officers of the Independent Union were told that the bulletin boards were no longer available and the keys should be returned. However, in late December 1968 or early January, the Respondent and OCAW agreed that during the interim period OCAW would have the use of bulletin boards-at least three or four in Indianapolis and its same number at Zionsville. As soon as this agreement was reached, the keys to the bulletin boards were turned over to OCAW. Several years ago the Independent Union entered into a written lease agreement with Respondent providing for office space at the facilities in Zionsville at a monthly rental of $10. A few years later a second written lease was entered into between the same parties providing for office space at the Indianapolis plant at the same rental charge.i° Both provided for termination by either party on a 15-day notice. By letter dated November 20, 1968, Respondent notified both local presidents of the Independent Union that the leases were being terminated under the 15-day notice clause, and that the premises were to be vacated by December 6, 1968. The matter of office space for OCAW was then raised by Oreson in conversations with Carey, but plant space was not made available to the Union and in December 1968 the OCAW rented outside office space at both Zionsville and Indianapolis. However, Carey stated that at one of the meetings during the interim period Oreson told the Company they had rented space elsewhere and preferred to have their office space off the Company's premises. The subject never came up again during the interim meetings of the parties, and OCAW's contract proposals contained no reference or request for office space on Respondent's premises. Ralph Anderson, president of OCAW Local, and Richard Watson, an OCAW International representative, were also present at this meeting, and both were called as handling of grievances by shop stewards, members of the executive committee, the grievance committee , and the bargaining committee Members of the last two named committees were granted time off from work with pay to attend committee meetings, joint management meetings, and to investigate grievances . Also the secretary or the treasurer at each location was granted 4 hours paid time per week to handle union administrative duties Sec 12 of this contract provided for an employee health and safety committee with paid time for meetings with the Company. Sec. 15 provided for at least 14 bulletin boards to be used by the Union for the posting of notices 9 The first contract negotiation session was held on February 3. 10 Resp Exit 9 and 10 374 DECISIONS OF NATIONAL LABOR RELATIONS BOARD witnesses by General Counsel, but in no way refuted the testimony of Carey in these respects. The two union offices mentioned above each contained a telephone for the use of officers of the Independent Union, and when the leases were canceled these telephones were removed from the offices. OCAW then requested they be permitted to use company telephones, and in one of the interim conferences between the parties the Respondent mentioned the acuteness of their telephone situation.11 However, as Oreson admitted in his testimony, Carey then agreed that officers of OCAW could use company telephones for union business. The 1965-68 contract with the Independent Union contained a grievance procedure, and following certifica- tion, OCAW requested that the parties negotiate an interim grievance procedure. An interim grievance procedure was then discussed at meetings held by the parties, and on January 20 an interim grievance procedure was agreed to and signed by the parties. A number of grievances were thereafter processed under this interim procedure.12 It also appears that under the 1965-68 contract, members of the grievance committee and others were permitted time off from work with pay to investigate grievances and to attend grievance meetings. By letter dated January 31, the Company made it known that during the interim period no union official would be released for union business unless arrangements were first made with his supervisor, but that stewards would be released from their jobs with pay to investigate grievances provided certain conditions were met.13 This record also reveals that in certain instances OCAW stewards were given time off with pay to attend grievance meetings with management.14 The Union further asked that during the interim period, OCAW officers be released from work without pay to attend to union business matters, and this was agreed to. During the interim period, November 19, 1968, to February 2, 1969, there were 54 instances in which Respondent excused OCAW officers from work at the request of the Union, and in their preparation for the upcoming contract negotiations.15 The first contract bargaining meeting was held on 11 It appears the plants developed an overload telephone problem in the summer of 1968, and the Company was using the maximum number of extensions possible . In order to secure more extensions, the Company would have been required to install a new type of telephone equipment amounting to $250,000. In June 1968 the employees of the Company were advised in writing of the seriousness of the telephone problem and were requested to assist by eliminating or curtailing personal calls. See Resp. Exh. 11. 12 Resp. Exh. 5A-51. 13 See Resp. Exh. 8. 14 At one of the interim meetings it was agreed between the parties that if the Company would pay the cost of the motel room to be used for bargaining meetings, the Union would pay for its own committee's bargaining time. 15 In efforts to show that there were "sharp" limitations on the Union's use of facilities in comparison to the "liberal" granting of company facilities to the old Independent Union, the General Counsel presented testimony through several witnesses. Orvil Smithey, president of the former Independent Union at Indianapolis, testified as to various facilities in their plant office-that he could use the office any time he wanted, that there were no restrictions on his use of the office telephone , that prior to the advent of OCAW the stewards were allowed to "roam" in all departments to handle grievances, and that both officers and stewards of the Independent Union were paid for handling grievance matters. In 1968, Robert Wilhite was president of the Independent Union Local at Zionsville and prior had been steward and on the executive committee . He stated that February 3. Chief spokesman for Respondent at this meeting was Attorney Owen Neighbours, and chief spokesman for the Union was International Representative Richard Oreson. He acted as chief spokesman for OCAW through the bargaining meeting held June 13. Thereafter, International Representative Richard Watson acted as the union spokesman-16 At the meeting on February 3, there was a discussion on the interim grievance procedure and then the Union presented its initial proposal-General Counsel's Exhibit 12-A. Included in this proposal were requests for a union shop, checkoff, and under certain circumstances the bumping of employees.17 Neighbours testified that the Union's initial proposal was a complete departure from the 1965-68 contract with the Independent Union, and that only two clauses were identical with the 1965-68 contract. The OCAW proposal did not contain any equivalent clauses for three clauses that were in the 1965 contract-management rights, no-strike clause, and arbi- tration. The 1965-68 contract had a limited clause on bumping, and its checkoff clause was on a weekly basis. At the start of the second meeting on February 24-the parties again discussed the interim grievance procedure as it related to the number of union representatives who would be permitted to investigate a grievance. The Union submitted a written proposal on overtime distribution to supplement its original proposal.ls Respondent then presented its first written contract proposal.19 The parties reviewed the main points of difference between the union and company proposals. At this meeting Neighbours stated that the Company was opposed to both proposals on union shop and checkoff. He then informed the Union that checkoff was not granted to the old Independent Union in its first contracts, and while he was not precluding it from future contracts, the Company felt there should be a get- acquainted period before it granted any membership or checkoff clauses. The third meeting took place on February 27. At the start of the meeting the Union handed out material on the apprenticeship program. The Company agreed to consider under the old Independent Union officers were permitted to use the plant office 3 days a week, that he used the telephone freely, that the executive committee met on Respondent's premises and on company time. Wilhite testified that after OCAW was certified his telephone privilege in conducting union business was curtailed, and the executive committee meetings could not be held on company time. James Wethington and Virginia Merriott generally reiterated the testimony given by Wilhite and Smithey. 16 There is no contention that Respondent violated its bargaining obligations by a failure to meet at reasonable times and places with OCAW, and testimony shows that meeting dates were set at the convenience of both parties and that bargaining meetings were generally held at frequent intervals throughout the period of negotiations. The Company kept written minutes for each of the bargaining sessions which were introduced into evidence at the hearing . GC Exh. 18-A to 18-KK. These minutes do not purport to be a verbatim transcript, but do represent an accurate summary of the positions taken, arguments, and verbal proposals of the parties . The exhibits in this record also contain the written proposals and counterproposals of the parties. 17 After the Union was certified, Oreson requested certain company records and other information in order to prepare for negotiations, and by February 3 the Union had received practically all the material it had requested. 18 GC Exh. 12-B. 19 GC Exh. I1-A. THE DOW CHEMICAL COMPANY 375 it and report back at a later date. The parties then began a discussion on their two basic proposals, and the preamble clause was considered agreed to. Recognition clauses of both proposals were also discussed.20 The Company objected to the 40-mile provision, and pointing out that Board law regulates the issue of whether a new plant is an accretion to an existing unit with the Union automatically entitled to recognition, or whether the new plant is not an accretion with the result that the Union must prove its majority status before being entitled to recognition. The Union then agreed to set this matter aside for the time being. Section 2 of the Union proposal purported to define employees of the bargaining unit. The Company objected to the definition for the reason that it was different from the description of the bargaining unit as contained in the certification. The Union agreed to talk about this matter at a later time.. Under the Union's proposal the Company would be obligated to print, and pay for, copies of the contract and the OCAW bylaws to be distributed to employees. The Company stated it was unwilling to assume the full cost, but would share the expenses. The Company then presented its proposal on discrimination and it provided-in part-that the Union likewise would not discriminate against its members. Oreson objected to such a provision and fully stated his reasons for doing so. Neighbours informed the Union that the Respondent's management rights clause was taken from the 1965-68 contract with the Independent Union. On union shop Neighbours again pointed out the Company was not taking the position it would not agree to union shop in the future, but that the Company felt the employees should have a chance to get acquainted with the Union. In relationship to checkoff, the Company repeated that such a procedure tends to make people forget that they are paying dues because of automatic deductions and there should be a get- acquainted period. The last major item discussed at this meeting was the grievance procedure. Under the company proposal the ultimate method for resolving a dispute was resort to the courts, whereas the union proposal left the ultimate end open. The parties then attempted to reach agreement on the procedural steps of the grievance procedure, and Oreson verbally presented a counterpropo- sal on the steps of the grievance procedure. The Company agreed to consider this proposal and discuss it later on. At the beginning of the fourth meeting on March 6, the Company presented a counterproposal on the grievance procedure.21 The parties had differences as to the initial filing of a grievance and at what steps the steward- supervisor and International representative would enter. The Company agreed to the Union's request that working days be defined as "days exclusive of Saturday, Sunday and holidays," and the Company also agreed that certain grievance steps could be waived. The Union agreed to remove "age" from its recognition clause proposal. At the meeting on March 13 the Company handed out write-ups on the grievance procedure, and considerable time was spent discussing grievance procedure and arbitration.22 No agreements were reached. The parties also discussed clauses on intent and purpose, recognition, union security, checkoff, management rights, overtime, and probationary period. The Union passed out a copy of a proposed grievance form. The Company again repeated its opposition to a union-security clause in the initial contract with OCAW. The Union then mentioned an agency shop provision for consideration. At the sixth meeting on March 14 there were further discussions on the matter of grievances and attempts were made to reach an accord on the number of steps to be included in the grievance procedure. The parties then turned their attention to the proposals dealing with seniority. The Union presented a pay level sheet on unskilled, semiskilled, and skilled workers and various discussions ensued concerning the same. Later on during the day, the Union presented a revised pay level proposal to correct certain discrepancies earlier pointed out to them. The Company presented a counterproposal on its own seniority proposal. The Respondent proposal was that the length of the probationary period be reduced from 180 days, as set forth in its original proposal, to 90 days. The Union agreed to take this under advisement. Watson was then questioned on the Union proposal on temporary and semipermanent jobs.23 The negotiating meeting on March 17 started with a discussion on the Union's proposal relative to bumping.24 In the ;interchanging of remarks which followed, Neigh- bours stated that the Union was balancing employee choice against company efficiency; that movement of people is inefficient because employees are taken off a job he is familiar with and someone else must be trained; that the Company was interested in minimizing the amount of movement among employees; that bumping at layoff time-under the Union's proposal-would allow an employee to choose where he would go; that the Respondent's proposal would be much more efficient, and that the Company was willing to recognize seniority in such things as promotion, but in the displacement of employees they had to be efficient. Neighbours explained that under the company proposal-when the Company had a reduction in the work force-they would take out the least senior employee. Neighbours also pointed out that the Company did not like the limited bumping procedure contained in the 1965-68 contract, and that the OCAW bumping proposal was far broader in scope. During the afternoon session the Union handed out a written counterproposal providing for arbitration of all disputes except those involving production standards and safety and health.25 This involved step 4 procedure of any grievance not settled in accordance with step 3, and a panel would be requested from the Federal Mediation and Conciliation Services and an arbitrator would be selected from such a panel or list. The Company agreed to consider this counterproposal and to comment on it at the next meeting. 20 The union proposal provided that the Company would be obligated to recognize the Union as bargaining representative at any new plant established within a radius of 40 miles of any present location. 21 GC Exh. I l-b. 22 The Union continued to maintain that the steward must be present at the first stage of the grievance procedure. 23 See GC Exhs. I1-e and D and 128-1 and C. 24 During the negotiations and prior thereto, the Company made mention of a possible closing of the Indianapolis installations, and in such event the Union wanted these employees transferred to the nearby Zionsville plants. 25 GC Exh. 12-D. 376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Union then presented a verbal proposal on probation- ary period. The Union stated that it would accept the Company's latest proposal of a 90-day probationary period providing the Company would delete its paragraph on temporary employees, and the Company agreed to consider it. After a recess Neighbours reported the Company would agree to the Union's request that the temporary employee paragraph be deleted, and also stated the probationary period clause now appeared agreed to and the Company would rewrite the clause before the next meeting. Neighbours also asked the Union whether it objected to using the American Arbitration Association rather than Federal Mediation as a source for arbitration lists, and Watson stated the Union used both of them in their contracts. About 4:30 p.m. the parties reconvened and at this time Watson announced that the parties were "miles and miles apart"; that he felt the parties should sit every day until a contract was reached; that the Union was willing "to stay here tonight" to get an agreement, but if they could not reach h-a contract by midnight the employees would go out on strike. As aforestated, the strike began at midnight, and is still continuing. After the commencement of the strike, the Federal Mediation and Conciliation Service was contacted by the parties. Negotiating sessions were then scheduled for March 31, April 22, and May 2 and 15. At the meeting on April 22 the intent and purpose clause was discussed and the parties encountered difficulties in the proposal change of one word. The Union wanted the word "entire" changed to "basic"-and the Company countered with the word "complete." They also discussed the recognition and the nondiscrimination clauses. On May 2, the grievance procedure was brought up and the Union proposed that if the Company gave them the right to have a steward in the first step, and if the Company would drop their demands of final recourse to courts and substitute an arbitration clause with finality-then the Union would agree to a typical no- strike, no-lockout clause for the life of the contract. The meeting on May 15 was between the Federal mediator and the Company. By this time the Company had taken the position that they had given into the Union in their demand for a steward at the first step in the grievance procedure with the understanding that there would be no option at the prestep. The Company still wanted a final recourse to the courts instead of finality in an arbitration clause. At the meeting on June 4 the Union informed the Company that under leaves of absence they would go back to the old agreement provisions of the Independent Union with one addition-and that would be a union business clause. The Company indicated their general agreement with the above, but asked the Union to be more specific as to what was included under union business. Oreson then named the yearly conventions and educational schools held by the Union. Oreson also suggested the old agreement language on call-in and report-in pay but with double time for work on Sundays and holidays instead of time and one- half. Other aspects of overtime were then proposed by the Union and discussed by all parties. The Company agreed to the union business clause proposal, but no educational leaves-and agreed to 4 hours off per week to the Union's secretary-treasurer. On June 13 the Company presented its draft on leaves of absence and call-in pay,26 and the parties had additional talks on other aspects of this subject matter. Discussions were also had on overtime,27 shift starting times, bulletin boards, and safety and health. The Union suggested the clauses in the 1965-68 contract for the latter two subject matters. At the session on June 20 the Company submitted another draft on leaves of absence and, with a few items to be clarified, the parties reached a limited accord on this matter. The Union agreed to the Respondent's counterpro- posals, as aforestated, on bulletin boards,28 and on health and safety. The Union requested that the Company put its verbal vacation plan in a memorandum after the Company stated its vacation proposal would be similar to the one used in the past. There were also some further discussions on overtime, grievances, and possible arbitration proce- dures. Oreson stated the Union could agree for employees to take their grievances up with supervisors without a steward present at the initial step-if the Company would forsake its proposal for court decisions in the final determinations of grievances. For the most part the meeting on June 24 was concerned with discussions on the various proposals as relating to the grievance procedure. Some aspects of vacations were also brought up,29 and in seeking additional information for clarity the Union asked some questions on the subject matter of seniority. On July 1 the Union presented a counterproposal on seniority.30 Watson stated that this counterproposal entailed 85 percent of the Company's clauses including parts of the old contract, and that they had "gutted" the original proposal in an effort to reach an agreement with the Company. On July 9 the parties spent virtually all of the session on the seniority proposals, and mutual agreements were reached on several of the sections. On July 10 further discussions were had on seniority proposals and a few additional agreements were made with concessions by both sides. At this meeting the Company passed out copies of the agreed-upon contract provisions as of July 9 .31 At the session on July 16 the Company presented a revised draft setting forth seniority proposals which had been previously agreed on or partially so, and in discussions that followed a few additional agreements were made. Watson then informed the Company that three items were keeping them apart on seniority-the necessity for more transfers, more applications per year, and the need for some form of bumping privileges. On July 17 the parties reached full accord on pages one and two of the Company's revised draft on seniority, and further talks produced subsequent accords in several other areas. The Company once again explained the reasons for its opposition to bumping. At this 26 GC Exh. I I E. 30 GC Exh. 12-E. 27 The Company did not want to pay Saturday and Sunday overtime if 31 See GC Exh . 11-h. This exhibit shows agreements on recognition, an employee was off during the week . grievance procedures, leave of absence, bulletin boards, and accord on 28 GC Exh. I1 -F. several sections of the seniority proposals. 29 GC Exh. I IG. THE DOW CHEMICAL COMPANY 377 meeting Watson informed the Company that the Union would accept their management-rights clause.32 Provisions relating to hours of work was agreed to on July 24 and many of the sections and terms in respect to vacations were also agreed to. By this time the Union was asking for an agency shop and continuing their request for checkoff, and the Company again explained why it was opposed to these items as aforestated. The meeting on July 29 consisted for the most part of further discussions on bumping and overtime under the seniority proposals. On August 8 and 22 Watson stated that bumping was the most important issue remaining and that he was asking for a limited bumping procedure as contained in the old contract. The parties held two meetings in September, but very little was accomplished. At the session on September 22 some progress was made on proposals pertaining to the question of when supervisors could work, and Watson informed Neighbours that the Union would be agreeable to the Company's supervisors working clause if they would add the words "or until an absent or tardy employee can be replaced." On October 1 the Company agreed to the supervisors working provisions and accepted the suggestion by the Union for the additional words as indicated above. At the October 15 meeting, the Union presented in written form a package deal for a settlement of the outstanding contract issues and this package also included for the first time the Union's economic proposals.33 On October 21 the Company discussed the Union's package proposal-other than economic matters-and a few minor accords were registered on the seniority provisions. On October 29 and 30 the Company and the Union pointed out some differences still existing between them on the subject matters of overtime, holiday pay, report-in-pay, applica- tions, leaves of absence, vacations, and duration of the contract. Accords were reached on a no-strike clause, time and one-half for employees on occasions when they are called in for work, and the making of a quarterly seniority list. On November 4 the Company presented its economic package proposal.34 Neighbours stated that this was a proposal to settle all the money matters and was not to be accepted piecemeal. On November 11 Watson stated he was disappointed with the Company's 10 cents an hour pay raise proposal since the Union had asked for 30 cents an hour. They agreed to the vacation proposal by the Company, and dropped their demand for double time after 12 hours of work. There was also discussion on the pension or retirement plan proposal. At the session on November 13, a good deal of the morning was spent in questions and answers relative to the Company's pension plan and various credits the employees would receive from the previous profit-sharing plan. Watson stated that the pension proposal was a very good plan. The Company agreed on the Union's shift premium pay provision and $6.00 for safety shoes. The parties again met on November 17 and Watson named the economic and noneconomic matters still in issue. Neighbours repeated that the Company was not going to be agreeable to an agency shop clause, nor to returning strikers displacing replacement employees hired during the strike. At the conclusion of this meeting the parties were in accord that there were 9 or 10 remaining contract provisions still in issue.35 35 Union Position Agency shop An agency shop clause Check-off A check-off clause Overtime distribution Overtime to be dis- tributed equally by hours Bumping A bumping clause much broader than the one contained in the 1965 contract Promotion (how long 3 months must an employee wait after being promoted before he may apply for another promotion) Company Position No clause No clause Overtime to be distributed equally by turn No clause 6 months 32 See GC Exh. I 1-i and 12-f. 34 GC Exh. I In. 33 GC Exh. 12G. 378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On November 26 the Company presented their settle- ment proposal.36 The Company increased its general wage increase offer from 10 to 13 cents per hour, and also offered additional increases for skilled employees of 5 to 15 cents per hour: On the two items of amount of and exceptions to premium pay for Sundays and holidays, the Company agreed to double time for Sundays and holidays if the Union would agree to a continuous operation exception to premium pay for holidays. The Company proposed an excuse provision for holiday eligibility requirements in line with the Union's request. In addition, the Company proposed a dues collection table in each cafeteria as an alternative to checkoff, and on promotions, the Company agreed to the Union's request of a 3-month waiting period. The last regular negotiating meeting was held on November 28. At this session the parties initially discussed the return of strikers. By letter to the Company dated November 26, the Union had proposed that all striking Wages (including General wage increase effective date of the 25 cents an hour--no increase) position on effective employees be reinstated, and that the Company should consider this proposal as an unconditional offer to return all striking employees.37 On November 28-Watson stated, "The Union vigorously objects to the Company contacting each employee, and therefore, negotiating on an individual basis other than dealing with the Union." The Union then responded to the Company's written settlement proposal presented at the previous meeting. The Union accepted the Company's proposals on amount of premium pay for Sundays and holidays, excuses for holiday eligibility, and pWomotion waiting time. The Union rejected the Company's general wage increase offer of 13 cents per hour, but accepted the Company's offer on graduated increases for skilled employees. The Union rejected the dues table collection alternative to checkoff, and refused to agree to the continuous operation exception to holiday premium pay. After a short recess, the Company returned and offered to increase its general wage increase offer to 15 cents per hour, 10 cents of which would be retroactive to of General wage increase of 10 date cents an hour--- retroactive to February 3 Holiday eligibility Should be some excuses No clauses (excuse from day before recognized but Union did and day after requirement not specify which ones for certain kinds of absences) Amount of premium pay Double time for Sundays and holidays Exception to premium No exceptions unless pay for Saturday and Company agreed to union Sunday position on above Time and one- half A no-absence exception (an employee absent during the week for any reason other than Company scheduling not entitled to premium pay for Saturday or Sunday) There was also a noncontract item at issue. This was the damand that the Company would have paid to its insurance carrier in premiums for employees had the employees been at work rather than on strike. This noncontract item was dropped by the Union at the November 28 meeting. 36 GC Exh. I Ip. 37 GC Exh. 12h. THE DOW CHEMICAL COMPANY February 3, and the Company agreed to a checkoff clause on a monthly basis as proposed by the Union. Watson stated that the parties were still apart on return of strikers, wages, bumping, agency shop, overtime distribution, and the seven days continuous operation procedure as outlined in the Company's proposal of November 26. Near the conclusion of this meeting the Company asked for another recess, and on returning told the Union the Company would agree either to the overtime provisions in the 1965 contract (time and one-half but no continuous operation exception), or to its proposal of double time with a continuous operation exception. The Company informed the Union this was its final proposal, and the meeting ended with the Union's statement that it had no change in its position. General Counsel takes the position that Respondent does not operate as an independent and autonomous unit of parent corporation in labor relations matters, but rather that the course and content of the negotiations was controlled by Dow. General Counsel introduced into this record collective-bargaining agreements in effect at the numerous plants of Dow in the United States and Canada,38 and also subpoened several Dow officials from Midland, Michigan, in an effort to support this theory. Max Key testified that at present he is director of corporate administration, but in the periods relative hereto was director of corporate industrial relations. Key admitted he was aware of the negotiations at Indianapolis in 1969, and during 1969 visited many Dow plants in the United States including the Indianapolis division. Key testified his old office of corporate industrial relations functioned solely in an advisory capacity to the industrial relations directors of the Dow plants and furnished services only if requested to do so. He stated that no one in his office participated in any way in the preparation of proposals or the negotiations in this case. Key testified that since reorganization of the corporate structure during the last quarter of 1968, labor relations is not a corporate Dow responsibility and that all decisions concerning collective-bargaining negotiations are made by local management at each location and that this was so even prior to the 1968 reorganization. Key's salary is in excess of $75,000. James Hanes has been director of industrial relations for the U.S. area of Dow for about 1 year. Prior to his present job, Hanes was corporate director of labor relations and merely served in an advisory capacity on request from the various divisions of Dow, and has no direct responsibility or authority over them. Hanes acknowledged that he knew of the Union's organizational efforts at the Indianapolis Division, that he talked with Carey about it, and in the early summer of 1968 had made a visit to Indianapolis. He further acknowledged that copies of the numerous and different bargaining contracts with Dow, as aforestated, are kept in his office in Midland. Hanes testified that the final decisions on economic matters are made by local representatives of the Company, and that he merely attempts to keep track of developments on a nationwide 33 G.C. Exhs. 10A through 10FF. Many of these contracts contained provisions giving union shops or agency shops, granting checkoffs in several instances; and some of these bargaining agreements also contained 379 basis and then passes this information on to the divisions. Hanes is paid about $34,000 a year. Carl Carlson is the assistant director of labor relations for the U.S. area and has his office in Midland. Prior to the start of negotiations he was requested by Respondent to furnish certain information. Carlson was then invited by Charles Carey, director of industrial relations for Respon- dent, to attend the bargaining meetings and did so. Carlson stated he did not participate in any of the decisions concerning the Company's contract proposals or the negotiations, that the Company has no labor relations policies as such-and each location is autonomous, that while he discussed the negotiations with Hanes, he was never given any instructions pertaining to the Indianapolis negotiations, that Carey made the decisions as to the content of the various proposals by the Company, and that Neighbours prepared the proposals. Carlson receives $20,000 a year for his services. The complaint alleges Respondent violated the Act by threatening to permanently replace striking employees, soliciting employees to return to work, and bargaining individually with employees. This record shows that Respondent mailed letters to all bargaining unit employees on May 19 and July 28.39 The May 19 letter summarized the reasons for the strike and the issues, and also stated that the Union's proposals were unreasonable and represented a complete departure from what had been in effect and that the Company did not intend to sign a contract which placed unreasonable demands on the Company. This May 19 letter further pointed out that the plant was continuing to operate and that several employees had decided to return to work, stating "This is their right as well as yours and it is protected by law." The Company then commented on certain rumors and closed by stating that at the present time jobs remained available if employees exercised their right to return to work. The July 28 letter summarized the status of negotiations to this point and again pointed out that the Company was continuing to operate during the strike. The letter states, "Not only does the Company have a legal right to operate, but employees have the right to work if they wish just as those who wish to strike peacefully have a right to do so." The Company stated it was hiring permanent employees, and that, "under the law, the Company has a right to hire a new employee to do your job and when the strike is over the Company is not required to discharge the new employee in order to take you back." The Company then pointed out that at the present time the jobs of most strikers were still open, but the Company could not promise this situation would continue because the Company intended "to see that our work continues to be taken care of." Lonnie Wingo testified that on or about August 25, Supervisor Ed Mathews told him that if he wanted his old job he would have to "beat it back" because the Company was hiring men to replace the strikers, and the department in which Wingo worked would soon be filled. The complaint, as amended, alleges that on or about November 17 the company negotiator threatened employ- provisions relating to bumping in regards to employee promotions, layoffs, and reduction in force. 39 G.C. Exhs. 5 and 16. 380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ees they would be permanently replaced if they refused to return to work, and continued to engage in the unfair labor practice strike. At the November 17 session the Company advised the Union it was not agreeable to the return of strikers to displace replacements and this matter was then more fully discussed in the November 26 meeting during which Respondent handed out a written statement of its position.40 The Respondent's position was that no strikers had been terminated, and the Company would immediately reinstate all strikers for whom there presently were available jobs, but the Company would not release permanent replacements. However, those strikers for whom jobs were not presently available would be recalled as jobs became available. In making my final conclusions, I will turn first to the interim period from November 19, 1968, to February 3. The General Counsel argues that the Respondent's disparate treatment to the Union compared to the privilege enjoyed by the old Independent Union, aforestated, shows that the Company was not giving to permit the Union to operate at its Indianapolis and Zionsville plants. It has been clearly established that with the advent of a new and legally selected bargaining representative-the employer has the obligation to treat with the new representative and no other and for nondiscriminatory reasons may abrogate a part or all of the prior agreement with the deposed bargaining representative. However, although an employer's contractu- al obligations may expire under such circumstances, nevertheless, if the employees are represented by a bargaining agent, the existing terms and conditions of employment-that is, matters pertaining to the relationship between an employer and his employees, as distinguished from matters pertaining to the relationship between an employer and a union, must not be unilaterally changed and must be continued by the employer until bargaining thereon has culminated in an agreement or in an impasse. In the instant case, the matters of items in question were taken away from the Independent Union and from the officers of the Independent Union. Furthermore, OCAW did not elect its new officers until December 20, 1968, and election for OCAW stewards were still going on in January. It was not until January 6 when the Company was officially notified who the new officers were and it was not until January 22 when the Company was advised as to the OCAW stewards. Therefore, as a result of OCAW's delay in its internal structuring-the Company did not know for some time to whom to accord the contractual privileges contained in the 1965-68 contract.41 But regardless of the nicety in the above, the interim conduct on the part of the Company was presented to fill in the total bearing on the 8(a)(5) allegations and, in the final analysis, the Respon- dent advised OCAW, that it was willing to negotiate with it on interim problems that developed and the Respondent did in fact negotiate with OCAW concerning these interim problems, and such matters were pretty much resolved to the satisfaction of everyone concerned, as previously 40 Resp. Exh. 14. 41 General Counsel also elicited testimony that in 1968 Respondent held monthly meetings with the Independent Union's executive committee and the Independent Union's health and safety committee, but that after the certification of OCAW no such meetings were ever held. However, there is no evidence in the record to show that OCAW ever elected an executive detailed herein. The OCAW secured bulletin boards, was granted the use of company telephones for union business, received time off for officers and stewards of OCAW, and negotiated an interim grievance procedure. In view of the above it appears to me the General Counsel has failed to prove that Respondent engaged in conduct evidencing hostility toward OCAW during the 2- 1/2 month interim period between OCAW's certification and the start of contract negotiations . Furthermore, Respondent promptly furnished documents and data requested by OCAW for use in contract negotiations, and the Company was ready and willing to commence contract negotiations after OCAW's certification and informed the Union of this on several occasions , both verbally and in writing. The evidence in this record reveals that Respondent operated as a separate and autonomous unit in the conduct of labor relations at its facilities in Zionsville and Indianapolis . As pointed out, the credited testimony of the witnesses successfully refutes the theory of General Counsel that Dow has a centralized labor policy, and that Dow controls decisions concerning collective-bargaining negotiations at its plants. Decisions concerning company contract proposals and bargaining issues were made by Carey, after consultations with Neighbours and a commit- tee composed of Carey's staff, and also with the general manager's staff committee which consisted of the general manager and major department heads of Respondent. During the summer of 1969 Key and Hanes were given some information on the status of the situation in Indianapolis, but there is no evidence that Key or Hanes gave any instructions as to the negotiations and the contract issues involved, or that Carlson was called on for any decisions during the contract negotiations . In its brief the Respondent argues as follows : "General Counsel's own documentary evidence constitutes a further refutation to his theory. Thirty-one contracts from other locations of Dow are in evidence. . . . A review of these contracts reveals a wide divergence in terms and conditions of employment at the various locations . If General Counsel's theory of standardized policies and centralized control were correct, these 31 contracts would read the same. They do not." I am in accord with Respondent's summary as to the other contracts with Dow. Carey stated that since September, he had talked to Hanes on three occasions, and at such time Hanes told him that high ranking officials of OCAW had suggested to Hanes a meeting between the Union and the Company . Carey replied he was not willing to have such a meeting, and informed Hanes he would continue to handle the negotiations on a local level. This testimony stands undenied as no official of the Union stated otherwise, and this evidence lends additional weight to the Respondent's evidence that local people had the determining say-so 42 Turning now to the specific negotiation sessions and the allegations that the Company negotiated in bad faith: The committee or health and safety committee, or that OCAW ever requested that such meetings be held. 42 J. M. Leathers is U.S . operations director for Dow, and the General Counsel produced testimony that Leathers has spoken to management people of Dow on the subject of labor relations and wherein Carl Carlson was one of those present. However, I am unable to draw inferences that THE DOW CHEMICAL COMPANY law is clear that negotiations carved on in good faith, where there has been an open exchange of ideas, proposals, and counterproposals and an indication of willingness to compromise, cannot be found to be violative of Section 8(a)(5) of the Act simply because on some of the issues, even though they may be crucial, one or the other of the parties has been unwilling to recede from its position so as to yield to the contentions or demands of the other. The record in this proceeding of the negotiations and the proposals by the Respondent, its availability and participa- tion in 38 negotiating sessions since the Union was certified, and its willingness to sign an agreement, establish that the Respondent's conduct in the course of these dealings was in keeping with the spirit of the Act. The record here further clearly demonstrates that each item in the various proposals, was, at one time or another, openly discussed, and that full agreements were reached on several clauses. Partial agreements, in one phase or another, were also reached on numerous proposals. In several instances during the negotiations the Union adopted the proposals of the Company, but in other instances the Company accepted modifications. Prior to the certification of OCAW the Company had a bargaining relationship with the Independent Union for many years and a series of agreements had been in effect between them throughout this period of time, and the 1965-68 bargaining agreement had expired only 2 days before OCAW was certified. The initial OCAW proposal on February 3 represented a departure from these prior agreements, and a great many provisions contained in the OCAW proposal were either substantially different from provisions in the prior contract or were new clauses for which there had been no equivalent provision. Moreover, the OCAW proposal omitted any reference to management rights, a no-strike clause, and arbitration. Seven bargaining meetings were held prior to the strike. The first two meetings were taken up primarily with the presentation and explanation of the Union and Company initial proposals and during the next five meetings there was considerable discussion of these proposals, as afores- tated. During this period the parties agreed to the definition of working days, and the Company agreed that certain steps could be waived in the grievance proposal and also agreed to a probationary period more favorable to the Union. However, late on the afternoon of March 17, Watson let it be known that the Union was willing to continue the session that evening, but unless an agreement was reached by midnight, a strike would begin. Neighbours testified without contradiction that it would have been impossible for the parties to have worked out an agreement by midnight, as the major contract items were still unresolved, and it had been suggested and agreed earlier in negotiations that economic matters be postponed pending this happening had any impact on the particular negotiations involved here, and all the testimony is to the contrary 43 Watson testified that subsequent to June 20 the Union used the format proposals of the Company, and on clauses pertaining to recognition, management rights, adjustments of grievances, and others he largely adopted the Respondent's proposals in order to reach a contract He then went on to mention provisions or proposals the Union had to drop However, some of the items Watson testified to as "dropped" by the Union involved items on which the Union never presented a specific 381 developments on noneconomic matters and at the time the Union had not even presented its economic demands. I am not persuaded on this record that the Company had precluded bargaining on any of the major contract issues including union security, and checkoff. At no time did Neighbours ever tell the Union that the Company would never grant such clauses, but did inform the Union that the Respondent was opposed to them and then stated the reasons for this position, as aforementioned. Accordingly, I find no refusal to bargain by the Respondent prior to the stnke.43 The complaint alleges the Company refused to negotiate a checkoff provision 44 The Union's initial contract proposal contained a checkoff clause providing for the deduction by the Company of initiation fees and union dues on a monthly basis. On July 17 the Union submitted a written counterproposal on checkoff providing for the deduction of union dues on a weekly basis, and the Company did not agree to either of these proposals. As pointed out, the Company's initial proposal did not have any form of dues-collection form, but on November 26, the Respondent outlined a dues-collection alternative. Under this procedure the Company agreed to provide a dues- collection table in each of the Company's cafeterias one day per month as specified by the Union. A union officer would be excused from work at each location to collect union dues at the table from 11:20 a.m. to 1 p.m. without any loss of pay. The Union did not agree to this proposal. On November 28, however, the Company offered a checkoff clause providing for the deduction by the Company of union dues on a monthly basis. During the negotiations Neighbours informed the Union that it was not opposed in principle to checkoff, and at no time did the Company refuse to discuss such a clause. The Respondent remarked that the Independent Umon had not been given a checkoff provision in its first contract with the Company and Neighbours explained the Company felt there should be a get-acquainted period with the Umon and also made mention that taking dues out of a paycheck has the effect of reducing the check in the eyes of the employee and concealing from the employee the fact he is paying dues. As pointed out by the Respondent these arguments were made in an effort to persuade the Union that a checkoff clause should not be included in the contract, but Neighbours did not tell the Umon that the Company would never grant checkoff. Checkoff subject matter was discussed at six or seven of the bargaining sessions and of course, in the final analysis, the Company on November 28 offered a checkoff clause acceptable to the Union. The complaint specifically alleges that the Company refused to negotiate a union-security provision. The Union's initial contract proposal contained a union-shop clause. Later in the negotiations the Union submitted a proposal to the Company, and in other instances some of the clauses referred to by Watson appeared in the initial union proposal of February 3, but were never thereafter mentioned or brought up for discussion He also admitted that in a few instances , where he had stated on direct that the Union's proposal was dropped , a compromise had actually been worked out between the parties and which represented a gain to the Union 44 The 1965-68 contract with the Independent Umon contained a checkoff clause requiring the Company to deduct dues on a weekly basis 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD counterproposal on union security which provided for an agency-shop clause. The Company did not agree to either of these provisions, and did not propose any form of a union-security clause.45 Both the Union and agency shop proposals were frequently discussed at the various negotiat- ing meetings, and at no time did the Company refuse to discuss the subject matter or refuse to state its reasons for being opposed to such a clause. Neighbours also informed the Union that there had never been a compulsory- membership clause in effect at these plants and manage- ment was not favorable to it, and that the old Independent Union had received a maintenance-of-membership clause before it was granted an agency-shop clause in 1965, as aforementioned. The Company went on to make it clear that they were not saying a union-security provision would never be granted but there should first be a get-acquainted period in which the Union could demonstrate its responsi- bility. Both the Board and the Courts have held that an employer's refusal to grant a union-security clause in negotiations does not constitute bad-faith bargaining. See Frick Co., 161 NLRB 1089, 1104; and Star Expansion Industries, 164 NLRB 563, wherein the General Counsel argued the fact that the employer denied a union-security clause to the Union when such a clause had been in prior contract, and such was evidence of bad faith and indicative of the employer's intention to downgrade the union. The Board adopted the recommendation of the Trial Examiner that the allegations of the complaint with respect to 8(a)(5) violations be dismissed. In the instant case it is noted that the Company did agree to a checkoff clause which is a form of union security, and the Union made it clear that it was interested in a 1-year contract, and therefore only a short period would have elapsed before the issue of union security could have been presented once again. It is also alleged that the Respondent refused to negotiate an employee-bumping provision. The 1965-68 contract with the Independent Union contained limited bumping provisions, and in certain areas left considerable discretions and powers with the Company .46 The Union 's initial proposal contained various sections on bumping rights, and was not limited to layoff situations.47 On July I the Union submitted a written counterproposal on seniority which included a modification of its original bumping provisions.48 Under the union counterproposal bumping would apply only in a layoff situation. However, the Union omitted the several limitations on bumping contained in the 1965 contract except for the limitation that only the first employee to be transferred and the employee he displaced could exercise job choice. The Union's initial and counterproposal on bumping were discussed at various negotiation meetings, but the Company did not agree with 45 The 1965-68 contract with the Independent Union contained an agency-shop clause. 46 GC Exh. 9(h); sec. 9, pp. 12 and 13, and wherein if, as a result of layoff, it became necessary to transfer an employee from his regular job, the employee was given his choice of available jobs subject to the following limitations: (1) Only employees with at least one year's seniority were eligible. (2) The employee was required to state his choice within 6 hours after being notified he was to be transferred. (3) The employee could choose a job only of equal or lower rating. (4) The job chosen must be held by an employee with less seniority. (5) Transfer to the job was subject to Company approval based on either one and the Company did not present any bumping proposals of its own. The Company's main argument against the Union's bumping proposal was on the grounds of efficiency of operations, and the Company had consistently opposed bumping on this ground. The Company did agree that in the event it became necessary to reduce the number of employees in a particular working group due to a layoff, the first employee to be transferred out would be the least senior employee. The Company stated that in its opinion the primary purpose of seniority in a layoff situation was the right of senior employees to be retained at work. In these general respects Neighbours testified as follows: The remaining question, the one governed by bumping, is a question of by what process it determined what jobs those that remain will occupy. Now, at this point our argument as plant officials, that we can place an employee maybe where we need him, where we know somebody is going to leave, where we know there is going to be a need for an addition, where it will be least disruptive, where we know this employee has a particular skill. This is the more efficient way to do it. If the employee has a choice of where he goes that means just what it says. He can choose by whim, personal preference, presumably would not choose by efficiency as such. And he might go bump-and that is where the expression came from-if he had that right, bump off of a job fully occupied by somebody already there doing it well. And that person, in turn, having a right. And we argued that by far the more efficient thing was for the company to make this placement. We pointed out that we are interested in using the skills of people. And we are not interested in making people unhappy just to do it. We are not going to take a lab tech and put him on a broom. We have got use for him or her. We have got to have skills. We want to use them. -We will try to work this. This is their protection. The Company summarizes its position on bumping with the following: From the very first the Company had been opposed to bumping and had refused to grant such a clause. During the 1965 contract with the prior union, a grievance had been filed on the question of employee job choice in a layoff situation. A company representative granted the grievance and in his written answer stated that in the future the Company would operate in this manner. This was done without the knowledge or consent, and to the consternation of, the Company's labor relations department, but the Company felt bound by this commitment by one of its management representatives. skill, knowledge, ability, and physical fitness. (6) Only the first employee to be transferred and the employee he displaced had job choice; any remaining transfers were made by the Company without reference to employee job preference. (7) An employee who was not able to perform the work after a reasonable period could be moved to another job by the Company. 47 Employees on leave of absence could bump on their return and there could be bumping between shifts and locations , and employees would also be given several other bumping privileges . See GC Exh. 12(a), Secs. 4, 5, 6, 7, 8, and 9. 48 GC Exh. 12(e), Article VIII, section 3. THE DOW CHEMICAL COMPANY 383 In the 1959 negotiations, therefore, the Company agreed to a limited bumping clause along the lines outlined in the grievance answer. Although the Company did not like the clause, and would have liked to get rid of it, it had no reasonable bargaining occasion to do so. When OCAW presented its proposals for a complete redrafting of the prior agreement with brand- new approaches, the Company felt it was then able to redraft and/or omit those provisions of the 1965 contract which it did not favor. One of those was bumping. The Union's final proposal on bumping was broader in scope and considerably more unattractive to the Company than the limited provisions in the prior contract, and the Company thus opposed its inclusion in the contract. As noted, by November 17 there were only nine contract issues unresolved. These were agency shop, checkoff, overtime distribution, bumping, promotion waiting time, wages, holiday eligibility, amount of premium pay for Sundays and holidays, and an exception to premium pay. On November 26 the Company made acceptable conces- sions and compromise proposals on checkoff, premium pay for Sundays and holidays, holiday eligibility, and waiting time for promotions. This left five contract issues in dispute, and I have previously detailed herein the proposals, counterproposals, reasons, and arguments on the subject matters of agency shop and bumping.49 Watson stated that on overtime distribution only one word divided the parties, but otherwise they were in agreement. It appears the Union wanted overtime to be distributed equally by hours while the Company wanted it to be by turns or times 50 The overtime distribution issue was discussed at several sessions during the negotiations, and I submit that the Company's position on overtime distribu- tion is not evidence of bad-faith bargaining. The Union initially proposed a 30-cent per hour general wage increase-later 25 cents, and the Company initially proposed a 10-cent per hour general increase. On November 26 and 28 the Company offered to increase their proposal to 13 cents and then to 15 cents per hour and retroactive to February 3. As pointed out, the Company offered additional wage increases for skilled employees of 5 to 15 cents per hour. It should also be noted that the Company had granted improvements in fringe benefits. These included increases in pension benefits, insurance, shift premium pay, safety shoe allowance, and an additional paid holiday. Furthermore, the Company agreed to shorten the automatic wage progression schedule from 36 months to 12 months, with the result that employees could reach the top rate of their classification 24 months earlier than had been the practice under the 1965 contract. The Union was asking for 6 months. Relative to the exception to premium pay issue-on November 28, the 49 It should be noted here that the parties reached agreement on a comprehensive seniority article, and only bumping remained in issue. 50 The Company maintains the 1965 contract was ambiguous providing that overtime should be divided "as equally as possible." See GC Exh. 9(h), sec. 7. The Company argues that under the 1965 contract, there was variation between the departments in the handling of overtime distribution, and some departments equalized by turn, while other departments by hours, and for these reasons the Company objected to the language or clause of the 1965 contract which the Union was proposing. Company advised the Union that it would agree either to the overtime provisions of the 1965 contract (time and one- half with no exception) or to the Company's latest proposal of double time with the exception. This offer was rejected by the Union. In the final analysis-the General Counsel's case pretty much hinges on the subject matters of bumping, union security, and checkoff. In essence, his theory is that these three subject matters, in some form or content, were present in the 1965-68 contract and in various respects were also negotiated in other labor agreements with the parent company-and therefore, they had to be included in this contract in order to show good-faith bargaining on the part of the Respondent. In N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, the Supreme Court stated in the course of this decision: The Act does not compel agreements between employers and employees. It does not compel any agreement whatever. . . . The theory of the Act is that free opportunity for negotiation with accredited representatives of employees is likely to promote industrial peace and may bring about the adjustments and agreements which the Act in itself does not attempt to compel. Notwithstanding the holding and language in Jones & Laughlin- Congress subsequently amended Section 8(d) to provide that the obligation to bargain collectively "does not compel either party to agree to a proposal or require the making of a concession." In discussing the effect of that, amendment, the Supreme Court said it is "clear that the Board may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substan- tive terms of collective bargaining agreements" N.L.R.B. v. American Ins. Co., 343 U.S. 395, 404 (1952). Later the Supreme Court affirmed that view stating that " it remains clear that § 8(d) was an attempt by Congress to prevent the Board from controlling the settling of the terms of collective bargaining agreements." N.L.R.B. v. Insurance Agents, 361 U.S. 477, 487, (1960) . In H. K. Porter Co., Inc., 397 U.S. 99, the Supreme Court granted certiorari to consider whether the Board had the power to remedy the unfair labor practices by requiring the employer to agree to check off the dues of workers-396 U.S. 817-The Supreme Court held that while the Board does have power under the Act to require employers and employees to negotiate, it is without power to compel a company or a union to agree to any substantive contractual provision of a collective-bargaining agreement.51 In Porter the Supreme Court stated: It is implicit in the entire structure of the Act that the Board acts to oversee and referee the process of collective bargaining, leaving the results of the contest to the bargaining strengths of the parties. It would be 51 The dispute in Porter revolved around the union's desire to have the employer agree to checkoff the dues periodically from the company's wage payments to employees. The evidence showed that the company's objection was not because of inconvenience, but solely on the ground that the company was not going to aid and comfort the union, and efforts by the union to obtain some kind of compromise on the checkoff request were all met with the same response to the effect that the collection of union dues was the union's business and the company was not going to provide any assistance. 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD anomalous indeed to hold that while § 8(d) prohibits the Board from relying on a refusal to agree as the sole evidence of bad faith bargaining, the Act permits the Board to compel agreement in that same dispute. The Board's remedial powers under § 10 of the Act are broad, but they are limited to carrying out the policies of the Act itself. One of these fundamental policies is freedom of contract. While the parties' freedom of contract is not absolute under the Act, allowing the Board to compel agreement when the parties themselves are unable to do so would violate the fundamental premise on which the Act is based-private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract. The above cases put to rest any contentions that union security and bumping provisions could be mandated by the Union in the instant case , and there only remained for my consideration whether or not, in the total picture, such denials, coupled with the other surrounding events and incidents, amounted to a refusal to bargain in good faith; and the ultimate determination of whether the Company conducted its negotiations in good faith involves the ascertainment of motive or state of mind which can only be established by evidence taken from the totality of the Respondent's conduct. There also remains for final determination the allegations that the Company threatened employees that they would be permanently replaced, and bargained individually with them. Since I have found that the Company bargained in good faith, the strike must be deemed an economic one. It is well settled that when faced with an economic strike an employer has the right to continue his business by hiring permanent replacements , and is under no duty to terminate 52 Guyon Machinery Co, 155 NLRB 591, 618 53 N L R B v Fleetwood Trailer Co, 389 U S 75, The Lardlaw the replacements at the conclusion of an economic strike, and beforehand could so advise the employees .52 There- fore, the letters in question as aforementioned and the incident involving Wingo must be deemed in compliance with privileged communications. In essence, the Company has fully recognized that economic strikers remain employees, and has taken the position that it will offer them employment if additional help is needed or vacancies occur. This is as much as the Act requires.53 The events in this case extended over a considerable length of time and included an election , the displacement of the Independent Union which had been the bargaining agent for many years , an interim period, 37 or 38 bargaining sessions and a strike. Yet, in this record "there is no evidence whatsoever that Respondent , or any of its representatives, at any time made any statements disparag- ing OCAW, any statements opposing OCAW, any statements critical of OCAW, or any statements indicating union animus or opposition to the collective bargaining process." CONCLUSIONS OF LAW 1. Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent did not violate Section 8(a)(1) and (5) of the Act as alleged in the complaint. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, I recommend that the complaint be dismissed in its entirety Corporation, 171 NLRB No 175, C H Guenther & Son, Inc , 174 NLRB No 174