Ship Shape Maintenance Co., Inc.

SHIP SHAPE MAINTENANCE CO. 289 Ship Shape Maintenance Co., Inc. and Building Service Employees International Union, Local 82, AFL-CIO. Case 5-CA-4630 December 15, 1970 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND JENKINS essentially the question whether Respondent, herein called the Company, had reached certain agreements with the Charging Party, herein called the Union, so that the Company's refusal to execute the agreements violated Section 8(a)(5) and (1) of the Act.' Upon the entire record, including my observation of the witnesses, and after due consideration of the briefs filed by General Counsel and by the Company, I make the following: On July 17, 1970, Trial Examiner Frederick U. Reel issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Trial Examiner and hereby orders that the Respondent , Ship Shape Maintenance Co., Inc., Washington, D.C., its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's recommended Order. I Our adoption of the remedy rests, however, upon his finding, with which we agree, that Respondent failed to execute contracts to which he had orally agreed, and therefore we do not pass upon the Trial Examiner's alternative recommendation that the same remedy would have been applicable even if such agreement had not been reached TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE This proceeding, heard at Washington, D.C., on May 18 and 25, 1970, pursuant to a charge filed the preceding January 16 and a complaint issued March 31, presents I The complaint alleged a refusal to sign five such statements After the close of the hearing Respondent signed two of the agreements and General FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY AND THE LABOR ORGANIZATION INVOLVED The Company, a Maryland corporation, engaged in the District of Columbia in furnishing custodial cleaning and related services to a number of buildings, is an employer engaged in commerce within the meaning of Section 2(6) of the Act. The Westchester Corporation, 124 NLRB 194, 196. The Union is a labor organization within the meaning of Section 2(5) of the Act. 11. THE UNFAIR LABOR PRACTICES A. Background For several years the Company has recognized the Union as the statutory bargaining representative of the custodial employees in various buildings in Washington to which the Company furnishes janitorial services. Each building has constituted a separate bargaining unit. At the time of the events here in question there were nine such units, five of which were originally involved in this litigation. Of the five units involved, four had been covered by contracts which expired late in 1969, and the fifth was a unit in which the Union had won no contract had been consummated at the time in question. Each of a Board election and had been certified in the spring of 1969 but the contracts provided that it shall "renew from year to year unless not less than sixty days prior to an anniversary date . . . written notice to the contrary is given by one of the parties to the other." Negotiations for contracts and for renewals were normally conducted on a rather informal basis between Company President Netterstrom and Union President Bailey at the office of either or even over the telephone. Frequently renewals of several contracts which had a common expiration date would be negotiated at the same meeting. The subject normally at issue in these meetings was wages, as the fringe matters (sick leave, holidays, vacations) are, as Bailey testified, "standard fringes that have been in one contract from one year to another." Netterstrom apparently made an occasional unsuccessful attempt to obtain changes in the checkoff and holiday provisions. When agreement was reached on a wage increase at a particular building, the practice of Bailey and Netterstrom was to apply the same wage increase in the case of other contracts scheduled for expiration in the near Counsel moved to withdraw the complaint as to those two The motion, unopposed, is herewith granted 187 NLRB No. 37 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD future ("within 30, 45 days, somewhere in that neighbor- hood," according to Netterstrom's testimony). B. The Meeting of August 15, 1969 Early in August 19692 Bailey telephoned Netterstrom, suggesting they meet to discuss a contract for the newly certified 12th Street unit and also to discuss two contracts which had expired, covering two other buildings, one on North Capitol Street and the other on K Street. The meeting was held in Bailey's office on August 15 After some negotiations, the two men compromised on a wage increase for 15 cents per hour over the rates being paid at each of the three units. They also agreed that the substantive provisions of the new contracts at North Capitol Street and K Street would be the same as the expired contracts, except for the increased wages, and that the "fringe benefits" at 12th Street would be identical to those in the other contracts . As Netterstrom testified, he agreed to "just the same standard agreement we had with them," although he made an unsuccessful effort to eliminate premium pay for certain holidays. After the foregoing matters had been concluded, Netterstrom, according to his own testimony, "mentioned about other units that we would have up to the first of the year coming open . . .." He asked Bailey if the Company "could expect the same thing in other contracts that we had that were coming up in the future ," explaining that he "needed to know this for the purpose of passing on costs, if possible, to our customers." Bailey thereupon named four buildings in which contracts were expiring (three of them on October 31, covering buildings on 17th Street, L Street, and Massachusetts Avenue, and the fourth expiring on December 31, covering a building on M Street), and in reply to Netterstrom's question indicated that the Union would expect the same 15-cent increase in each building. Netterstrom's testimony on direct examination continues: Q. When he told you what you could expect, did you say anything in reply? A. No, Dust said, "Well, can I rely on that?" And he said, "Yes." And I said, "Okay." At this point there is a conflict in the testimony. According to Bailey, Netterstrom said, "When it expires, write them up," and Bailey agreed to do so. Owens, another union representative who was present at the close of the August 15 meeting, testified that after Bailey said "The same 15 cents," Netterstrom responded, "Oh, what the hell. Write them up" or words of similar import and "threw his hands up." A few moments earlier, according to Owens, Netterstrom, in asking what rates the Union would seek in the remaining four buildings, said, ". . . there is no need wasting time coming back here or you wasting time coming up there." Netterstrom denied saying anything to the effect, "Oh, hell, write it up and send it to me. There is no sense coming down here anymore." He testified that when he replied "Okay" to Bailey's statement that the Union would request the same 15 cents, he meant merely that he had the answer to his question. He testified that at that time he did not agree in any way to new wage rates in the last four buildings. He further testified, however, that he relied on the anticipated 15-cent increase in subsequent negotiations with his "clients" at two of those buildings. C. Subsequent Relations Between the Parties Bailey had given his secretary, Dorothy Harding, standing instructions to send out over his signature, which she was authorized to affix, notifications that a contract was about to expire and that the Union requested a meeting to negotiate a new contract . Harding was aware that such notices should be sent out 60 days before the expiration date . She was on vacation from Monday , August 18, until Tuesday, September 2, 1969, and had not been apprised of what transpired in the conversation between Bailey and Netterstrom on Friday, August 15. Upon her return to work on September 2 she noted that the contracts at the L Street, 17th Street, and Massachusetts Avenue buildings were due to expire October 31 , and that the 60-day notices had not been sent. She promptly sent the Company the usual notice concerning those buildings, and signed Bailey's name to the letter, but Bailey himself did not become aware until some time in December that this letter had been sent. The Company made no response to the letter of September 2 which it received less than 60 days prior to the expiration of the three contracts in question . On the same date, September 2, Bailey sent the Company the proposed new contracts for the K Street and North Capitol Street buildings, which had been agreed to on August 15, continuing as to substantive matters (except for the increased wages) the contracts which had expired the preceding July. The Company did not execute these contracts until November 28, on which date the Company mailed the executed contracts to the Union. On December I Bailey wrote the Company enclosing the proposed contracts for four buildings , the three whose contracts expired October 31 and that for M Street where the contract was to expire on December 31. On December 8 company counsel wrote Bailey with respect to the contracts which had expired October 31, stating that the written notices to reopen were not timely served, and that accordingly the three agreements in question had been renewed for at least I additional year. The Company has continued to adhere to this position , and this litigation ensued. Bailey testified that he expected the new rates would go into effect at the three buildings in question on November 1, and that they would be reflected in wages received in mid-November. He learned about the third week in November that the new wages were not being paid, and a week to 10 days later forwarded the agreements to Netterstrom for signature . Bailey attributed his tardiness in submitting the written contracts to "pressing business" and to the fact that "I was dealing with I thought a responsible employer." On one previous occasion, involving a different employer, the Union's failure to submit timely notice led to an automatic renewal of a contract . However, in the instant case the Union apparently did not give written notice with 2 All dates subsequently mentioned herein refer to the year 1969 unless otherwise indicated SHIP SHAPE MAINTENANCE CO. respect to the M Street contract which expired December 31, 1969 (which, of course, is consistent with Bailey's theory that agreement as to that building had been reached on August 15), and according to company counsel the Company did not receive a proposal on that building until December 1, but the Company raised no issue as to the lack of a 60-day notice and put the new rates into effect. After the close of the hearing the Company signed contracts covering the M Street and 12th Street buildings.3 D Concluding Findings The issue between the parties lies in narrow compass' did the discussion between Bailey and Netterstrom on August 15 concerning the buildings in which contracts expired the following October 31 obviate the necessity of the Union's giving written notice to the Company by September 24 of the Union's desire to change the wage rates in the contract. If the question were an ethical or moral matter, it would not be difficult to decide. Netterstrom admitted giving the 15-cent wage increase in the buildings in which contracts expired in July and December 1969, and in the building in which the Union had recently become the bargaining representative. Other substantive provisions in the con- tracts are uniform throughout the buildings in which the Company deals with the Union, and were continued unchanged in the 1969 renewals. Moreover, Netterstrom admitted relying on the 15-cent increase in negotiating his rates with building owners in two of the four buildings which were the subject of his closing discussion with Bailey on August 15 here under scrutiny. In considering the legal aspects of the case, however, note must be taken of Netterstrom's testimony that he had not agreed in any way to wage rates for any buildings except those on the original "agenda" of that meeting. He further testified that when he asked Bailey what wage rates the Union would want at the buildings where contracts would expire later in the year and Bailey replied that the Union would want the same 15-cent increase, his (Netterstrom's) reply of "Okay" did not signify agreement but merely that he had the answer to his question. What must be decided here are questions of law and fact, not questions of morality. The primary fact in dispute is whether Netterstrom, after hearing that Bailey would ask for the same 15-cent increase in the remaining 1969 contracts, told Bailey to "write them up," thereby implying that he was satisfied and would sign the agreements. The quoted phrase is attributed to Netterstrom by both Bailey and Owens, but is denied by Netterstrom. Owens even added the colorful detail that Netterstrom "threw his hands up" and used a mild expletive to mark his concession or agreement. Unfortu- nately for the trier of fact forced to choose among such conflicting tales, all three men are interested witnesses, and their demeanor in their brief respective sojourns on the witness stand afforded little clue as to either their veracity 3 These contracts, attached as exhibits to the Company's brief, are for (- year terms The preceding contract at M Street was for a 2-year term The preceding contracts at the remaining three buildings were for 2-year terms, but the proposed contracts, attached as exhibits to the Company's brief, are for 1-year terms The original charge alleged that agreement had been reached on I-year contracts at all five locations On the entire record, and particularly in the light of the change to a 1-year term reflected in the two M Street contracts, and the execution of a I-year contract at 12th Street, I 291 or the comparative accuracy of their memories. As to their subsequent conduct, it may be said that Bailey's was consistent with his theory that agreement had been reached, while Netterstrom's, insofar as he relied on the 15-cent increase in negotiating with his customers, is somewhat inconsistent with his testimony that he left that meeting without agreeing in any way to those rates. Beyond all this, however, the sense of the situation seems to me to render the Bailey-Owens version more accurate than Netterstrom's denial. Negotiations in the past had been conducted on a relatively informal basis. The only subject which normally produced any controversy in their negotiations was wage rates. They had just concluded satisfactory negotiations covering wages for several build- ings in the city, and had agreed (despite Netterstrom's suggestion to cut back on paid holidays) to continue in effect in the new contracts all the other substantive provisions of the expiring agreements. The contracts at the three buildings here in issue (the M Street matter no longer concerns us; see fn. 1, supra) were due to expire October 31, and Netterstrom, as he testified, raised the question of the rates for those buildings for his own legitimate economic purposes It seems entirely reasonable for him to have said, as Bailey and Owens testified, "Write them up," signifying his readiness to accept the same contract at those buildings that he had just concluded for several others. I therefore find and conclude that at the August 15 meeting Netterstrom orally accepted Bailey's proposal for the new contracts at the L Street, Massachusetts Avenue, and 17th Street buildings, and that the Company's later refusal to execute those contracts violated Section 8(a)(5) and (1) of the Act. Finally, even if I am in error as to whether agreement was reached as to those contracts at the August 15 meeting, the record admits of no doubt but that Netterstrom at that time invited and received a union proposal for wage changes at those locations after the expiration of the existing agreement. Under those circumstances I find that the Company, having already commenced negotiations 75 days before the expiration date, waived the contractual require- ment for a 60-day written notice. It follows under this approach that the Company was guilty of a refusal to bargain with the Union in December when the Company took the position that the contracts had automatically renewed. Under this approach, of course, the matter remained "bargainable," but as a remedy for the refusal to bargain I would recommend the payment of wages due under the agreements submitted by the Union, for the record shows that wage increases granted in one building were customarily extended to others in which contracts expired at or about the same time. Here the record shows 15-cent increases as of September 1 on 12th Street and as of January 1 on M Street. A similar increase to remedy the refusal to bargain as to the three buildings where contracts find that the parties, on August 15, agreed that their contracts for the forthcoming year would be I-year contracts 4 The contracts were effective November 1, 1967 The renewal clause refers to written notice given "not less than 60 days poor to an anniversary date of this Agreement " The "anniversary date" is November 1, and 60 days prior thereto is September 2 (31 days in October plus 29 days in September) Netterstrom received the September 2 letter on September 4 or 5 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD expired October 31 would therefore appear proper. See International Union of Electrical Radio and Machine Workers v. N.L.R.B. (Ttidee Products, Inc.), 426 F.2d 1243 (C.A.D.C.). CONCLUSION OF LAW Respondent by refusing to execute the agreements submitted to it on December 1, 1969, covering the Massachusetts Avenue , L Street, and 17th Street buildings, and by adhering to the position that the Union had failed to give timely notice of a desire to negotiate with respect to the contracts at those buildings , engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and ( 1) and Section 2(6) and (7) of the Act. THE REMEDY I shall recommend that the Company execute the agreements in question and abide by their terms for the period commencing November 1, 1969. This, of course, does not preclude either party from bargaining for changes in such agreements at any time such bargaining would otherwise be appropriate. If, for example, those contracts would have expired prior to the tame of compliance with this Recommended Order, the parties would be free to bargain at an appropriate time for the subsequent period. It is the intent of this Recommended Order to treat those contracts as legally in effect as of November 1, 1969. As noted above, even if I were to find that agreement had not been reached on August 15, 1969, 1 would find a refusal to bargain in December, and would recommend as a remedy therefor (under the Tudee case) the payment of a 15-cent wage increase to all affected employees, effective Novem- ber 1, 1969, and continuing at least until the parties bargain in good faith to a contract or an impasse. Finally, as these wage rates should have been placed in effect on November 1, 1969, I recommend that interest be paid on the unpaid wages under the formula set forth in Isis Plumbing & Heating Co., 138 NLRB 716. See N.L.R.B. v. Huttig Sash & Door Co., 362 F.2d 217, 220 (C.A. 4, 1966). Accordingly, upon the foregoing findings and conclu- sions and upon the entire record in this case, I recommend, pursuant to Section 10(c) of the Act, issuance of the following: ORDERS Respondent Ship Shape Maintenance Co., Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Building Service Employees Union, Local 82, affiliated with Service Employees International Union, AFL-CIO, as the exclu- sive bargaining representative of All maids, porters, charwomen, scrubbers, and waxers employed by Respondent at 1900 L Street, N.W., Washington, D.C., excluding office clerical employees, guards, and supervisors as defined in the Act All maintenance employees employed by Respondent at Thomas House, 1330 Massachusetts Avenue, N.W., Washington, D.C., including porters, maids, charwom- en, scrubbers, and waxers excluding all clerical employees and supervisors as defined in the Act All porters, maids, charwomen, scrubbers, and waxers employed by Respondent at 808 17th Street, N.W., Washington, D.C., excluding office clerical employees, guards and supervisors as defined in the Act with respect to rates of pay, wages, tenure of employment, or other conditions of employment. (b) In any like or related manner interfering with the efforts of the above-named labor organization to bargain collectively on behalf of the employees in the above- described units. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Execute the contracts covering the above-named buildings which the Union sent the Company on December 1, 1969, and make such contracts effective as of November 1, 1969. (b) Make whole its employees, in the manner set forth in the section of the Trial Examiner's Decision captioned "The Remedy," for all losses sustained by them as a result of Respondent's failure to implement the new wage rates on November 1, 1969. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Recommended Order. (d) Post at the office buildings involved herein copies of the attached notice marked "Appendix."6 Copies of said notice, on forms provided by the Regional Director for Region 5, after being duly signed by Respondent's representatives, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 5, in writing, within 20 days from the receipt of this Decision, what steps have been taken to comply herewith.? S In the event no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, recommendations , and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes 6 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD" shall be changed to read "POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD" r In the event that this recommended Order is adopted by the Board, this provision shall be modified to read - "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith " SHIP SHAPE MAINTENANCE CO. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Building Service Employees Union, Local 82, affiliated with Service Employees International Union, AFL--CIO, as the exclusive representative of our building maintenance employees in the following buildings: 1330 Massachusetts Avenue, N.W. 808 17th Street, N.W. 1900 L Street, N.W. WE WILL sign the contracts covering those buildings which the Union submitted to us on December 1, 1969. WE WILL pay the wages called for in those contracts 293 effective November 1, 1969, with interest at 6 percent per year on all back wages due under those contracts. Dated By SHIP SHAPE MAINTENANCE Co., INC. (Employer) (Representative ) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be directed to the Board's Office, Federal Building, Room 1019, Charles Center, Baltimore, Maryland 21201, Telephone 301-962-2822.