Simpson Lee Paper Co.

SIMPSON LEE PAPER COMPANY 781 Simpson Lee Paper Company and Local 13120, International Union of District 50, Allied and Technical Workers of the United States and Canada. Case 7-CA-7854 November 24, 1970 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND JENKINS On August 6, 1970, Trial Examiner Josephine H. Klein issued her 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, together with a supporting brief, and the Respondent filed an answering brief to the General Counsel's exceptions and 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 hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendation of the Trial Examiner. Charging Party by its special representative. All parties were afforded full opportunity to be heard and to examine and cross-examine witnesses. Oral argument was presented on behalf of the General Counsel and Respondent. A brief has since been filed by Respondent. Upon the entire record, observation of the witnesses, and consideration of Respondent's brief, the Trial Examiner makes the following: FINDINGS OF FACT 1. PRELIMINARY FINDINGS A. Respondent, a corporation organized under the laws of the State of Washington and having its principal offices in San Francisco, California, is engaged in the production and sale of paper and products at several locations in Washington and Michigan. It maintains an installation at Vicksburg, Michigan, the only facility here involved. During the calendar year 1969, a representative period, Respondent, in the course and conduct of its business, purchased and caused to be transported to its Vicksburg plant products valued in excess of $50,000 directly from points outside Michigan. During the calendar year 1969, a representative period, Respondent, in the course of its business, manufactured and sold at its Vicksburg installa- tion products valued in excess of $500,000, of which products valued in excess of $100,000 were shipped from said installation directly to points outside Michigan. Respondent is now, and has been at all times material herein, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.i B. The Union is, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. II. THE UNFAIR LABOR PRACTICE A. The Issues ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and orders that the complaint herein be, and it hereby is, dismissed. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE JOSEPHINE H. KLEIN, Trial Examiner : This proceeding was heard in Kalamazoo, Michigan, on June 16, 1970, on a complaint issued on May 7, 1970, pursuant to a charge filed on March 31 , 1970, by Local 13120, International Union of District 50, Allied and Technical Workers of the United States and Canada, the Union, against Simpson Lee Paper Company, Respondent. At the hearing the General Counsel and Respondent were represented by counsel and the I National Labor Relations Act, as amended (61 Stat 136, 73 Stat 519, 29 U S C Sec 151, el seq ) The complaint alleges that Respondent violated Section 8(a)(5) of the Act in November 1969 by deciding to discontinue its established practice of giving Christmas turkeys to its employees, such decision allegedly having been made "by Respondent unilaterally and without prior notice to or bargaining with the Union," which represents the hourly paid employees at the Vicksburg plant. Respondent contends that the complaint should be dismissed and the Union relegated to resolution of the issue through arbitration. Substantively, Respondent maintains that it did notify and bargain with the Union to the extent required by law. B. The Facts Since 1946 the Union has been the recognized bargaining agent for Respondent's hourly rated production and maintenance employees at the Vicksburg plant. There is presently in effect a collective-bargaining agreement effective from February 15, 1968, through January 26, 1971. In every year between 1951 and 1968, inclusive, 186 NLRB No. 109 782 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent gave a Christmas turkey to each of its Vicksburg employees, whether hourly paid or salaried. No provision for the Christmas turkeys has ever been included in the parties' collective-bargaining agreements and prior to the events here involved the inclusion of such a provision in the agreement was never discussed. Under a consistent practice, sometime early in December the Company announced in its house newspaper and on the plant bulletin boards when and where the turkeys would be distributed. A week or so before Christmas each employee received with his paycheck a card which he would then present for his turkey at the specified time and place, a day or two before Christmas. Similar, but not uniform, customs apparently prevailed in Respondent's other plants. In some, turkeys were given at Thanksgiving time rather than at Christmas. Early in November 1969, Respondent's corporate management, in San Francisco, decided, for the purpose of cost reduction, to eliminate all holiday turkeys. On or about November 6, Kenneth' A. Perkins, Respondent's vice president in charge of industrial and public relations, telephonically informed R. G. Millard, plant manager of the Vicksburg mill, of the Company's decision. Perkins advised Millard that a written notice of the decision would be forthcoming and instructed him to arrange for a meeting with the salaried employees and the union representatives "to forewarn both parties such notice would be forthcom- ing." On November 7, a memorandum of the decision was sent by Perkins to the managers of all the plants. That memorandum was received at the Vicksburg plant on or about Monday, November 10. Lloyd E. Campbell, manager of industrial relations at the Vicksburg mill, testified that on November 7, after receiving Perkins' telephone call, he convened the salaried employees and told them of the elimination of the turkeys. He also testified that on the same day he convened a brief special meeting with the union shop committee for the same purpose. However, two union committee members testified unequivocally that they could not recall and had no record of any such special meeting. In a pretrial affidavit, Union President Richard Lee Flinn had stated that he learned of the decision at a meeting with company representatives in October. At the hearing he testified that November was the correct month and his prior error arose from his not having had his notes with him when he was interviewed by the Board agent. In a pretrial statement given to a Board agent, Campbell had not mentioned any special meeting with the union committee about the turkeys early in November. He testified that when he spoke to the Board agent he did not recall that special meeting but that Respondent's counsel has thereafter reminded him of it.2 Counsel did not testify. On all the evidence, the Examiner concludes that, as the union committeemen testified, they first learned oflelim- ination of the Christmas turkeys at their regular meeting with management on November 11, as set forth below.3 2 Counsel apparently actively participates in Respondent's dealings with the Union. 3 The Examiner disavows any doubt concerning the honesty of either Campbell or Respondent's counsel . All four witnesses in this case were forthright and testified honestly to the best of their recollection. 4 "Whitey" Litton, Respondent's personnel director in Vicksburg, also frequently attends. There is no evidence, one way or the other, as to whether objections Millard and Campbell, for Respondent, regularly meet with the union shop committee on the second Tuesday of each month.4 At the meeting on November 11 Millard and Campbell informed the union committee of the elimination of the turkeys and showed them Perkins' memorandum to the plant managers. That memorandum concluded: The Company regrets this action, but in keeping with other programs presently being implemented or being contemplated in an effort to reduce our cost of doing business, it is necessary for us to discontinue holiday gratuities. In discussing the matter with the union committee, Mildred and Campbel also referred to Respondent's currently adverse economic situation and general cost-reduction program. There is no evidence that the Union doubted or questioned such statements or requested any supporting data. At the November II meeting the Union protested the Company's decision, arguing primarily that the resultant lowering of employee morale would, in the long run, cost the Company more than the price of the turkeys. Campbell and Millard acknowledged the validity and cogency of the Union's opinion, but stated, in effect, that they were powerless to do anything since the decision was a "corporate ruling." However, they said they would reexamine the decision in the light of the Union's arguments and would communicate the union committee's views to corporate management and report back. Campbell and Millard then spoke by telephone with Perkins. They expressed their opinion, in essential agree- ment with that of the union representatives, to the effect that elimination of the Christmas turkeys was false economy because of the inevitable reduction in efficiency consequent upon lowered employee morale. Perkins considered this argument but concluded that the value of uniformity of treatment among all Respondent's employees outweighed the possible disaffection among the hourly paid employees at the Vicksburg mill .5 On November 12, the day after the union committee had been informed, the memorandum from the home office was posted on the bulletin boards at the Vicksburg plant. Pursuant to a decision of the membership at a union meeting, a grievance was filed on November 19. Respon- dent rejected the grievance on the ground that no contract violation had been shown. When the union representatives continued to object, the company representatives suggested that the matter be submitted to arbitration. When the company representatives, in answer to the Union's inquiry, said that the expenses of arbitration should be borne by the loser, the Union concluded that arbitration was "too costly" and decided, instead, to submit the matter to the Board .6 The question was again raised by the union committee at were voiced by other employees either at Vicksburg or at other plants. s On cross-examination, Union President Flinn testified: A. . . . it was discussed but we figured it was too costly, and would break a small union if we had an arbitration case. Q. Is that the point when you sought to place the matter in the hands of the NLRB? A. This is right . We have seen other rulings and so we wrote and found out where we stood with Them. SIMPSON LEE PAPER COMPANY the regular meetings with company representatives held on December 9, 1969, and January 15, 1970.7 The discussion generally was the same at all the meetings. In the course of the discussions the Union made alternative proposals, such as turkeys at Thanksgiving and hams at Christmas in 1970 to make up for the absence of turkeys in 1969. Respondent apparently rejected these suggestions and maintained that the matter should be covered in the collective-bargaining agreement. On June 11, 1970, after the present complaint had been issued, company officials offered to assure turkeys for Christmas 1970 and to consider including a provision for annual turkeys in the next collective-bargain- ing agreement, which would be negotiated around Decem- ber 1970 to replace the existing agreement, due to expire on January 26, 1971.8 C. Discussion and Conclusions 1. Term of employment v. gratuity In its brief Respondent apparently abandons its conten- tion, propounded at the hearing, that Christmas turkeys were a pure "gratuity" and thus could be given or withheld in Respondent's unqualified discretion. Such contention must be rejected. It is well established that any such bonus or "gift" consistently bestowed for a considerable period of time is considered a component of wages or a term or condition of employment. As such, even though not expressly provided by contract or agreement with the employees' collective- bargaining agent, it cannot be discontinued by the employer before the Union has l been',given notice and an opportunity to bargain. , Wald Mfg. Co., 176 NLRB No. 119 (TXD), enfd. 426 F.2d 1328 (C.A. 6); Stark Ceramics, Inc., 155 NLRB 1258, enfd. 375 F.2d 202 (C.A. 6); The Beacon Journal Publishing Co, 164 NLRB 734, enfd in pertinent part 401 F.2d 366 (C.A. 6), Progress Bulletin Publishing Co., 182 NLRB No. 135; N.L.R.B. v. Citizens Hotel Co, 326 F.2d 501, 503 (C.A. 5) and cases there cited. 2. Arbitration Respondent maintains that, having filed a grievance in the matter, the Union should be required to proceed by arbitration rather than by litigation before the Board. This position must also be rejected. The grievance and arbitration provision of the collective- bargaining agreement by its terms applies only to differences between the parties "as to the meaning and r This date was stipulated However, although it is immaterial, the correct date was probably January 13, which was the second Tuesday of the month A There was no evidence that the Company's proposal was presented as an offer of settlement of the present complaint When testifying, Perkins in effect repeated the Company's offer 9 N L R B v Standard Oil Co, 196 F 2d 892 (C A 6), does not hold, as Respondent contends, that "if the parties use the grievance procedure to resolve disputes between them, then the grievance procedure ought to be followed and pursued to conclusion, and the Board shouldn't interfere " In Standard Oil the court held that the matter there in dispute between the parties "is a complaint or a dispute and involves both the questions of a violation of the terms of the agreement and an interpretation of it " The case was remanded to the Board for the receipt of evidence relative to 783 application of the provisions of this agreement" and to disputes "under the provisions of this agreement." The agreement further provides that "the Arbitrator shall have no authority to add to, subtract from, alter or modify this agreement." Holiday turkeys are not provided in the contract. Thus the question appears to be nonarbitrable. At the least, the question of arbitrability might unnecessarily complicate and prolong the dispute. See Progress Bulletin Publishing Co., 182 NLRB No. 135, fn. 3. And, in any event, the Board would not be without jurisdiction "even if a construction of the contract was necessary in order to determine whether the Act has been violated." Gravenslund Operative Co., 168 NLRB No. 72; Wisconsin Aluminum Foundry Co., 173 NLRB No. 176, fn. 7. Without examining the ramifications and reach of the Board's discretionary authority to defer to arbitration ((Office and Professional Employees, etc. v. N.L.R.B., 419 F.2d 314, 317-320 (C.A.D.C.)), the Examiner finds that the present case is not appropriate for such course. Progress Bulletin Publishing Co., 182 NLRB No. 135; Gravenslund Operating Co., 168 NLRB No. 72.9 3. The nature and extent of bargaining The General Counsel maintains that Respondent did not meet its statutory bargaining responsibility because it presented the Union with an unalterable and irrevocable decision . 10 Respondent concedes that before it notified the Union it had "decided" to eliminate Christmas turkeys for Christmas 1969. But Respondent denies that the decision was "unalterable and irrevocable." The decision was made at the "corporate office" and announced, in effect, as an order to the various plants. It covered all of Respondent's employees, both production workers and salaried employees, including executive personnel. Perkins testified that the various plant managers would have had authority to override his general order after discussing the matter with him. He conceded , however, that none of the local managers did exercise that asserted authority. Both Perkins and Campbell indicated , however, that the authority of local managers to disregard the home office decision would be limited to situations where such action was necessary to prevent a strike.ii Campbell testified: A. . . We are given authority by the corporate office to do whatever we feel we have to do to keep things moving. Now, a decision like this, if we were faced with people walking out on the street , we could make the decision to give them turkeys, yes. whether the dispute did fall within the contractually provided grievance procedure Nothing in the court's opinion suggests that arbitration must be pursued absent a "contractual obligation to arbitrate " N L R B v Knight Morley Corp, 251 F 2d 753, 760 (C A 6) io The crucial allegations of the complaint are "On or about November 7. 1969, Respondent reached a fixed and unalterable decision to discontinue the distribution of turkeys to its employees in the unit The decision was made by Respondent unilaterally and without prior notice to or bargaining with the Union." ii Perkins also testified that, because the turkey matter had been submitted as a grievance, Campbell and Millard had room "to reach a decision that would have reflected the circumstances " The Examiner gives no weight to this consideration because , as previously stated, the turkey matter was not within the purview of the grievance procedure 784 DECISIONS OF NATIONAL LABOR RELATIONS BOARD TRIAL EXAMINER: What happens to uniformity? THE WITNESS: Uniformity is out the door if somebody goes on strike. It would have been a problem, no question. TRIAL EXAMINER: If you had the authority, why didn't you exercise it? THE WITNESS : Because we felt uniformity over- weighed this particular matter and, frankly, I thought the union had given up on it. At one time one of the union members said to me we only have one outstanding grievance. We were talking about another grievance, and I hesitated and I said yes, and this to me indicated they had given up on the turkey grievance. TRIAL EXAMINER: [Do] you think [that] had they walked out, you could have restored the turkeys? THE WITNESS: It is something that would have had to be done-something would have had to have been done. I don't know. We might have left them out. With uniformity throughout the Company obviously an important consideration, it seems most probably that the corporate office would retain final decision as to whether to run the risk of or suffer a strike at a particular plant. And the union committeemen creditably testified that in their discussions of the matter Millard and Campbell clearly indicated that they were powerless to do any more than transmit the Union's views to Perkins and request reconsideration of the decision by the corporate office. In the Examiner's opinion, the evidence as a whole establishes that, while Millard and Campbell were consult- ed by Perkins, and their views were carefully considered, they did not have any realistic or effective power to override or disregard final decisions made by the corporate office. Millard and Campbell thus did not have the power to give Christmas turkeys to the Vicksburg employees in 1969 without Perkins' consent. It does not necessarily follow from Millard's and Campbell's inability to accede to the Union's demands that Respondent failed to meet its statutory obligation to bargain. The Examiner cannot conclude that Respondent failed to meet its statutory obligation merely because the Union was not afforded an opportunity to discuss the matter directly with a representative of the corporate office, where the companywide decision was made. In the first place, there is no evidence that the union representatives ever requested any such opportunity. It appears that over the years the Union has dealt exclusively with local representatives of the Company, with Perkins participating, at most, infrequently in contract negotiations. Union President Flinn testified that "there are a lot of things in the meetings that come up where [Millard and Campbell] can't make a decision. They have to find out through the corporate office." So far as appears, this situation has not previously been a source of union dissatisfaction. Campbell and Perkins credibly testified that Millard and Campbell transmitted the Union's views to the corporate office. Since the Vicksburg officers agreed with the Union's views, it is reasonable to assume that their advocacy was at least fair to the Union. But the corporate office, after hearing the arguments, decided that the need to cut costs 12 As set forth above, Campbell thought he had informed the Union committee of the decision on November 7, 4 days before the regular and the desirability of uniform treatment of all employees were more important than meeting the expressed disgrun- tlement of the Vicksburg production employees. So far as appears, the Union did not question the Company's professed need to cut costs. As previously stated, the corporate decision was made around November 6, communicated to the Union on November 11, and announced to the production employees on November 12. At first blush it might seem that Respondent acted with unseemly haste in announcing on November 12 that turkeys would not be given at Christmas time, some 6 weeks later, and that this haste bespeaks an unwillingness to bargain. However, as stated above, in some mills Respon- dent had customarily distributed turkeys for Thanksgiving Day rather than for Christmas. Since the turkey announce- ment traditionally had been made in Vicksburg early in December, it is reasonable to infer that the employees at the "Thanksgiving" plants would expect their announcement early in November. That being so, manifestly an announce- ment to the employees could not be delayed long after the corporate decision was made. And, since the 1969 decision applied companywide, it would be reasonable for Respon- dent to make the negative announcement around the same time in all the mills. To have made the announcement only at the "Thanksgiving" plants would probably have created misunderstanding and ill-will. It might well have been preferable for the Respondent to give the Union more than 1 day's notice before announcing the decision to the employees generally. Campbell testified that usually the Company tries to give the Union as much advance notice as possible of impending action.12 Union representatives testified that it was the usual practice for Respondent to give the Union committee ]-day advance notice of proposed actions, including such substantial matters as layoffs. There is no suggestion that the Union had previously found such advance notice unsatisfactory. In any event, the complaint alleges as violative of the Act only an "unalterable" decision made on or about November 7; it does not allege lack of adequate notice. The fact is that the matter was fully discussed between Respondent and the Union on two occasions before Christmas, with ample time for the reversal of the action as to the production workers in Vicksburg if the Union had been able to convince Respondent. Union representatives testified that they were given the opportunity to express their views fully and to present alternative proposals, both before and after Christmas. At no time did the company representatives cut off discussion. Union President Flinn apparently did not believe the Company's position was "unalterable," testifying that he raised the matter with Campbell and Millard after the first meeting because he "thought in the meantime they had talked to the corporate office and told them some of [the Union's] reasons and maybe the corporate office had changed their mind." For his part, Campbell credibly testified that he and Millard hoped the problem would be solved either by the Union's acceptance of the action as being in the best interest of all meeting. SIMPSON LEE PAPER COMPANY 785 concerned or by relaxation of the corporate office's position. The simple fact is that bargaining was conducted at least to the extent appropriate to the gravity of the situation. In the vernacular, the Union learned that "You can't win them all." And not all has yet been lost. Both Flinn and Argetsinger, the union committeemen who testified, confirmed that on or about June 11, 1970, Respondent's representatives agreed to give turkey for Christmas in 1970 and to bargain about including such a provision in negotiating the parties' next agreement. Flinn testified that in the discussions "it was said that the place for arguing this was at contract time . . . and we all agreed this was a good place to have it, in the contract, to make sure we would have it." Respondent Vice President Perkins earnestly and convincingly testified that he was still willing "[i]n all good faith" to discuss the turkey issue in negotiations for the next collective-bargaining agreement and has recently offered to bargain about the matter now, before expiration of the current agreement. While Respon- dent's offer to negotiate after the fact would not alone be a defense to a charge of unlawful unilateral action (Wisconsin Aluminum Foundry Co., supra, 173 NLRB No. 176), it is entitled to consideration as one factor in appraising the Company's total course°of conduct. This is particularly true where, as here, it was the Union which dropped the matter and the Company never refused to discuss it. Finally, it should be emphasized that there is no suggestion of union animus on the part of Respondent throughout the quarter-of-a-century bargaining history between the parties . The 1969 turkey decision was not discriminatory, but rather affected all Respondent's employees, both organized and unorganized, including executive personnel. On all the evidence, the Examiner finds that the General Counsel has not established that Respondent committed any unfair labor practice in connection with the elimination of Christmas turkeys in 1969. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(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. It has not been established that Respondent engaged in any unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that the complaint herein be dismissed in its entirety.