Moore of Bedford, Inc.

MOORE OF BEDFORD 721 Moore of Bedford, Incorporated and Textile Workers of America, AFL-CIO. Cases 5-CA-4324 and 5-CA-4599 January 7, 1971 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING, BROWN, AND JENKINS On June 29, 1970, Trial Examiner Thomas A. Ricci issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative actions, as set forth in the Trial Examiner's Decision. Thereafter, the Respondent and the General Counsel filed exceptions to the Trial Examiner's Decision and supporting briefs. 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 as modified below.I We agree, for the reasons set forth in the Trial Examiner's Decision, that the Respondent by its adamant position in its resolve to change article VI section 4, which provided for a grievance-arbitration procedure in regard to the establishment of incentive rates, violated Section 8(a)(5). In our opinion the record and the course of bargaining support the Trial Examiner's conclusion that the Respondent's purpose was to remove the Union as a voice in the determina- tion of what two-thirds of the employees would be paid for their work and indicated an insistence upon the right to set wages at will throughout the life of the contract without regard to the existence of a bargain- ing agent as spokesman for the employees. We find no merit, contrary to our dissenting colleague, in the position that the Respondent was merely attempting to permit itself greater flexibility in changing rates so long as a specified earning level was maintained, and that its adamant position in this regard was motivated solely by a willingness to i The Respondent has requested oral argument This request is hereby denied as the record, the exceptions, and the briefs adequately present the issues and the positions of the parties 2 More specifically in this connection , we note that , contrary to the terminology of the dissenting opini in , the Respondent at no time indicated a willingness to negotiate over the "earnings level" of its employees Rather, it insisted at all times that the contract provide only a basic hourly rate of $ 1 70, in which as noted, in no way reflected the actual earnings level of its employees, with the Union being permitted to grieve or proceed to arbitration if the incentive rates adopted unilaterally by the Respondent produced earnings of less than $1 70 per hour Indeed retention of article negotiate over the earnings level rather than subject itself to possible arbitration over the approximately 2,000 separate piece-rate changes generally made each year. The record shows that most employees were paid far more than the so-called established "specified earning level" and that the average rate of pay for the employees in question well exceeded such base rates. Thus, it was in fact the incentive rates, not the base rates, which established the employees' pay .2 Accordingly, it is clear that while the impasse appears to have occurred over grievance machinery rather than unilateral control of wages, and the Respon- dent's apparent hard bargaining appears to be directed only at the grievance-arbitration provision, the Respondent's position carried with it unilateral control over the effective wages which would be paid to the incentive pay employees. The insistence upon bargaining such a provision to an impasse by a Respondent has previously been held by the Board to be violative of Section 8(a)(5).3 Nor do we find support for the contention that it was the Union rather than the Respondent which chose to create the impasse over the Respondent's proposal to eliminate the grievance-arbitration ma- chinery. In our view the record fully supports the findings of the Trial Examiner that the Respondent never receded throughout the bargaining from its position that the expired contract was intended to restrict arbitration to the base wage rate and that the Respondent's entire purpose was to assure that it would not be limited in its setting of incentive wages. We find no factual basis for concluding that the Respondent ever receded from this position. As the dissent correctly emphasizes, the Union was indeed insistent throughout on retaining the right to arbitrate the effect of piece-rate changes and was not open to any compromise on this issue. Both logic and the record indicate that if the Respondent had in fact offered at any time to continue the expired contract's provisions regarding piece rates, as contended in the dissent, there would have been no basis for disagree- ment. As it turned out, the Union went on strike for almost a year to attempt to get the Respondent to change its fixed position in this regard. In the circumstances, we do not think it significant, there- fore, that the Union did not discuss the "alternative" proposal before the strike, since the strike proposal in VI as in the old contract but with the other modifications sought would have had the same effect Under these circumstances, it cannot be said that the Respondent was bargaining in good faith concerning the "earnings level" and, in fact, it appears that the Respondent's aim was to remove the actual level of earnings from the area of collective bargaining. That this is so becomes more apparent when it is recalled that the Respondent was seeking to avoid an arbitrator's award holding that such earnings level was arbitrable 3 Tex Tan Welhausen Company, 172 NLRB No. 93, enfd. 419 F.2d 1265 (C A 5), judgment vacated and case remanded to circuit court 397 U S 819, reaffirmed in relevant part 434 F 2d 405 187 NLRB No. 87 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD no way changed the Union's basic position of wanting to preserve the right to arbitrate piece rates, and would have made no change in the attitudes of the union members. Nor do we find any significance in the fact that the Union had negotiated an almost identical clause to the one proposed by the Respondent, and so firmly resisted here, at another employer's plant. The record shows that at the other plant it was a first contract, and, unlike the instant situation, there was no long- established background of bargaining in which arbitration of earnings levels had become an accepted part of the contractual relationship. It was not the minimum base rate, but the average earnings received under the incentive system here which the Union considered as the wage rate, and an integral part of the wage structure . And indeed this was how the contract was interpreted in a series of arbitration awards. Accordingly, we do not think that because the Union willingly agreed to a provision, resisted here, in a different bargaining situation with another employ- er that the Union was thereby bound to waive its right to bargain over wages. THE REMEDY We agree with the Trial Examiner that to remedy the Respondent's unlawful refusal to fulfill its statutory obligation that it be required, on request, to bargain with the Union, as the exclusive representa- tive of its employees in the manner set forth in the Trial Examiner's Recommended Order. We also agree with the Trial Examiner that the strike which started on January 28, 1969, was an unfair labor practice strike and that the strikers made an unconditional offer to return to work in December 1969. However, the Trial Examiner apparently inadvertently failed to provide a remedy. Accordingly, in addition to the remedy set forth in the Trial Examiner's Decision, we shall also order that, in the event the Respondent has not done so, the Respondent reinstate such strikers to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, dismissing, if necessary, any employees hired to replace them. We shall also order that, in the event of Respondent's refusal to reinstate them upon their December 1969 request, the Respondent make whole those discriminatees, by payment to each of them a sum of money equal to that which they would normally have earned as wages from 5 days after the date on which application was made for reinstatement to the date of the Respondent's offer of reinstatement, such loss to be computed in the manner set forth in F. W. Woolworth Company, 90 NLRB 289, with interest at the rate of 6 percent per annum to be added to the backpay and to be computed in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. 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, as herein modified, and hereby orders that Respondent, Moore of Bedford, Incorporated, Bedford, Virginia, its officers, agents, successors, and assigns , shall take the action set forth in the Trial Examiner's Recommended Order as modified below: 1. Add the following paragraphs 2(b),(c), and (d) to the Trial Examiner's Recommended Order and reletter subsequent paragraphs accordingly: "(b) Offer to the employees who made an uncondi- tional offer to return to work in December 1969 reinstatement to their former or substantially equiva- lent positions, without prejudice to their seniority or other rights and privileges, in the manner set forth in the section of this Decision entitled "The Remedy," dismissing, if necessary, any employees hired to replace them, and make each of them whole for any loss of pay suffered by them as a result of its failure to reinstate them within 5 days after their unconditional application, with interest thereon at 6 percent. "(c) Notify immediately the above individuals, if presently serving in the Armed Forces of the United States, of the right to full reinstatement, upon application after discharge from the Armed Forces, in accordance with the Selective Service Act and the Universal Military Training and Service Act. "(d) 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 and appropriate to facilitate the checking of the amount of backpay due and the reinstatement rights of the employees involved." 2. In footnote 3 of the Trial Examiner's Decision substitute "20" for "10" days. 3. Substitute the attached Appendix for the one attached to the Trial Examiner's Decision. CHAIRMAN MILLER, dissenting: I would not find an 8(a)(5) violation on the facts of this case. The negotiating problem arose out of a preexisting dispute between the parties under the old contract as to whether employees had a sort of vested right in existing piece rates or whether the somewhat ambiguously drawn provisions of that agreement were intended only to guarantee a certain earnings level and to leave the Company free to change rates so long as earnings opportunities did not fall below a contractually prescribed level. A series of arbitration MOORE OF BEDFORD 723 disputes were decided adversely to the Company's contention. As a result, in the next negotiation the Company proposed to revise the contract language so as to permit it greater flexibility in changing rates so long as a specified earning level was maintained. It expressed a willingness at various points in the negotiations to negotiate over the earnings level but was firm in its position of wanting to take this approach rather than to submit to possible arbitration each adjustment, pointing out that there were as many as 2,000 separate piece rates in its structure although there were only about 130 production and mainte- nance employees. The decision of the Trial Examiner rests upon the theory that the Employer was attempting to insist upon unilateral action in an area where he is not entitled, under the law, to have unilateral rights and that he insisted upon this presumably nonmandatory subject of bargaining to a point of impasse. In my view, he erred, both as to the facts and as to the law. It is not, in my view, illegal for an employer to insist on channeling piece-rate disputes in the manner proposed, so long as the earnings level figure is negotiated in good faith, providing at least that the employer does not select so arbitrary and capricious an earnings level that one could interpret his propos- als as a subterfuge for the purpose of achieving a total elimination of all piece-rate disputes from the grievance and arbitration procedures. Furthermore, the record indicates that it was the Union, rather than the Employer, which chose to create the impasse over this Employer proposal even though a number of other items remained unresolved. After a number of meetings in which the issue was discussed, the Company prepared alternate proposals, one of which included the proposal to limit arbitration in the manner which I have described, and included wage increases of 8 cents immediately and 7 cents a year later. The second alternative provided for lower increases (6 cents each year) but states, "This offer by the Company is for a 2-year contract and with the exception of some mutually agreed on main body changes, the contract including the aforementioned Article 6, remains in its present form." The reference to the "aforementioned Article 6" would apparently have continued the old contract's provisions regard- ing piece rates. The Trial Examiner, however, finds that the second alternative was intended to refer to the revised, rather than the original article 6. This finding seems to me to be at odds with the plain language of the proposal. The testimony of the union representa- tive at the hearing was that this alternative proposal was never read to the employees or discussed with them, although he testified that the alternative proposal had never been withdrawn prior to the strike. It appears, therefore, that the strike began without any full exploration of available alternatives. It is difficult under these circumstances to find that any impasse existed at this point, or that the Company had created any impasse which could be said to have existed. Bargaining meetings continued during the strike, during which it again appears that the impasse, if any, was created by the Union. Thus, on March 6, although other issues still remained unresolved, the union representative admitted that he stated to the Company's negotiators, "that this [the piece rate arbitration issue] was the key issue and that it had to be resolved . . . before it would be possible to proceed to a discussion of the other open issues." And in May, when a Federal mediator suggested that rate disagtkements or grievances be taken out of the arbitration procedure with the understanding that the no-strike clause would not bar strikes over such disputes during the contract term, the Union, after considering this alternative at lunch, stated that the Union could not agree to this alternative. While the Company also indicated it did not look favorably upon such a proposal, it would seem obvious that the Union which made the initial response was certainly as adamant, if not more so, than the Company and it is difficult to blame any impasse on the Company, if indeed the brief exchange over this alternative can be regarded as having created an impasse. It is necessary, in assessing the entire conduct of both parties, to recognize that the record shows that an almost identical clause to the one proposed by the Employer here had been accepted by this same Union at another employer's plant-Craddock Terry. It is also significant that this dispute arose after 20 years of what the Trial Examiner refers to as "amicable and fruitful collective bargaining" between the Respon- dent and the Union. All facts considered, it appears to me that the parties both engaged in good-faith bargaining, but were unable to resolve an important issue. Both parties "stood on principle." That may not produce a contract, but neither does it violate our Act. I would therefore conclude that this is not a case in which a finding of 8(a)(5) violations should appropriately be made. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT insist, as a condition to entering 724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD into an agreement with Textile Workers Union of America, AFL-CIO, or any other exclusive bargaining representative of our employees, upon contract provisions which would grant us the uncontrolled right to fix rates of pay for piecework unilaterally and at the same time deny to the employees their right to file grievances as to rates of pay for piecework. WE WILL offer to the employees who made an unconditional offer to return to work reinstate- ment to their former or substantially equivalent positions, without prejudice to their seniority and other rights and privileges, dismissing, if necessar- y, any employees hired to replace such employees, and WE WILL make each employee whole for any loss of pay suffered by them as a result of our failure to reinstate them within 5 days after their application. WE WILL bargain collectively with Textile Workers Union of America, AFL-CIO, as the exclusive representative of our employees in the bargaining unit described below with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an understanding is reached, embody such under- standing in a signed agreement. The bargaining unit is: All production and maintenance employees in our Bedford, Virginia, plant, excluding office clerical employees, watchmen and supervisors as defined in the Act. MOORE OF BEDFORD, INCORPORATED (Employer) Dated By (Representative ) (Title) We will notify immediately the above-named individ- uals, if presently serving in the Armed Forces of the United States, of the right to full reinstatement, upon application after discharge from the Armed Forces, in accordance with the Selective Service Act and the Universal Military Training and Service Act. 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. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE THOMAS A. Ricci, Trial Examiner: A hearing in the above-entitled proceeding was held before the duly designated Trial Examiner on March 18 and 19, 1970, at Bedford, Virginia, on complaint issued by the General Counsel against Moore of Bedford, Incorporated, herein called the Respondent, or the Company. Separate charges were filed on February 27 and December 22, 1969, and the final complaint issued on February 9, 1970. The question presented is whether the Respondent refused to accord proper recognition to the Textile Workers Union of America, AFL-CIO, herein called the Union, and thereby violated Section 8(a)(5) of the Act. Briefs were filed by the General Counsel and the Respondent. Upon the entire record and from my observation of the witnesses, I make the following: 1 FINDINGS OF FACTS 1. THE BUSINESS OF THE COMPANY The Respondent is a Virginia corporation with its principal place of business in Bedford, Virginia, where it is engaged in the manufacture of furniture. During the last 12 months, a representative period, it received revenues in excess of $50,000 for products which it sold and shipped directly to points located outside the Commonwealth of Virginia. I find that the Respondent is engaged in commerce within the meaning of the Act and that it will effectuate the policies of the Act to exercise jurisdiction herein. 11. THE LABOR ORGANIZATION INVOLVED I find that Textile Workers Union of America, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICE A. The Issue After 20 years of amicable and fruitful collective bargaining the Respondent and the Union started negotia- tions late in 1968 for a new agreement to replace an expiring one. Many proposals and counterproposals were exchanged, agreement was reached on a number of items, but the parties came to an impasse over the Company's desire to alter certain language with respect to the method for setting piecework wage rates and its related grievance and arbitration provision. The relevant clauses which the Respondent proposed and adamantly insisted on are set out verbatim in the complaint, and it is alleged it was unlawful for the Company to have insisted on their acceptance. I A posthearing motion by the General Counsel to correct an obvious misprint in the complaint and certain typographical errors in the transcript is granted MOORE OF BEDFORD There was a strike over this issue, and the complaint goes on to allege it was an unfair labor practice strike As a separate item, the complaint also alleges that the Union one day unconditionally offered to return all the strikers to their jobs and that the Respondent refused them reinstatement The Respondent denies the assertion of an unconditional offer to return The essential argument against the Company is that it wanted the Union to agree that it, the Company, should be free to set piecework wage rates dunng the life of the contract however in its judgement it thought proper, while the Union surrendered , in writing, any right to question the correctness of the changing rates, to file grievances about them, indeed, to talk with management about them at all Chief among the defense contentions is the assertion that because the number of specific piecework rates to be set is very great, too much "management and employee time" would be "tied up" if the Company has to discuss the rates with the Union, that all this would be disruptive of the "process of manufacture " No attempt was made to explain why the many gnevances over these same rates had presented no unsurmountable problem in the past The Respondent also disputes the allegation that it insisted on the arrangement to impasse There is a further defense, advanced rather obliquely, that the Company really desired, and had a nght to insist on, a reduction in the earnings of the employees B The Facts Negotiations With about 130 production and maintenance employees the Company manufactures upholstered furniture, one- third of the employees are hourly-paid and the other two- thirds are paid at incentive piecework rates, the price for each detailed operation always changing, as set by timestudy and methods industrial engineering techniques, and as required by the ever-changing styles of furniture The number of separate and distinct operations evaluated and fixed total upwards of 2,000 in any given year The contract has always provided that the Company could set wage rates in this fashion and that the Union could file grievances when employees felt the rates were unfairly established and even go to binding arbitration on the questions There was always a minimum earning guaran- teed piece rate work employees, the contract signed in 1965 set it at $1 28 per hour plus 25 percent, a 1967 addendum to the agreement raised the minimum amount to $1 70 per hour There were many grievances filed over the years with respect to this setting of the piece rates and all were adjusted In 1968 for the first time in the Company's history, four such disputes were taken to arbitration And the question to the arbitrator, of course, was whether the rates at issue had been set in accordance with whatever the then current contract provided on the subject Like all other contracts dealing with incentive piecework rates, and perhaps inevitably because of the nature of the subject, this one too left much to be desired in its lack of clarity and precision The Company argued the arbitrator must look to the minimum rate guaranteed, $1 70 per hour, and that so long as the employee in the end earned that much per hour worked, that was all he could demand The contract said 725 nothing else about money, and if in the past the employees had grossed more than that on the average , it meant only that the Company had not set the rates correctly, somewhat generously above its contract obligations , or that the employees had worked with commendable diligence The contention was based on the following provision of the existing contract "New piece rates shall be so fixed that an employee who is not a learner, trainee , or sub-standard worker can, with the exercise of incentive effort , earn not less than twenty-five percent (25%) above the piece rate base of $ 128 " After all , according to the Company, the entire purpose of an incentive wage system is that the employees should be encouraged to earn more, with consequent greater production and profit to the employer The Union took a different view It argued it was the intent of the contract as a whole that new rates would always be set so as to maintain the average wages the employees had in fact been earning , that they should compare in this sense to existing rates in comparable operations It rested its position on the following language of the contract "Article VI, Section 4 Piecework rates may be changed by the Employer upwardly or downwardly dunng the term of this agreement , due to method changes or changes in job content , provided such change will reflect the extent of the change made, and provided they will be so set that an incentive employee who is not a learner, trainee, or substandard worker can, with the exercise of incentive effort, earn not less than twenty-five percent (259o) above the piece rate base, which percentage is the established differential under standard conditions " And in further support the Union pointed to the fact that for several years the employees had in fact earned considerably above the minimum guaranteed amounts For the year 1965 the average earnings of piece rate workers was $2 11 per hour, from September 1966, to June 1967 it was $2 44 per hour, and for September 1968 to November 30, 1968, it was $2 54 per hour These figures are calculated by averaging the average earnings in each of eight classifications or categories of employees , recognizing that there may be a greater number of employees in one category than in another On this disagreement, the true issue taken to arbitration, the arbitrator agreed with the Union He did not determine what rates would have been proper in the specific four grievances used as vehicles to put at rest the major question, but asked the parties instead to settle them amicably on the basis of his decision as to how the contract should be read They did, and in consequence one employee was paid several hundred dollars With their contract by its terms due to expire on December 31, 1968, the parties started negotiations for renewal in November There were a number of meetings in November, December, and January, many proposals were exchanged in writing and orally , economic and otherwise There would be no point in detailing what all these matters involved, what terms were agreed on and what remained unresolved The Company made clear during the confer- ences, and as candidly admitted at the hearing, that one of its objectives was to so change the contract that in future any dispute over the setting of piecework rates would be decided on the basis of its reading of the earlier contract, 726 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the view that had been rejected by the arbitrator. Indeed its insistence always has been that the arbitrator erred, that even the old contract made the minimum guaranteed earnings the true and final test as to the correctness of later setting of rates . Be that as it may, the government asserts that it was this issue , on which the Company never receded, that caused the strike and that all the other matters discussed have nothing to do with this case. The General Counsel said on the record the issue is a relatively narrow one and indicated that if there was nothing wrong with the Respondent's adamant position in its resolve to change article VI, section 4, of the old contract , the complaint must be dismissed, for in no other respect is there direct evidence of antiunion animus or illegal conduct . It would also follow, in that case, that the strike was a purely economic one. Moreover, although the Respondent altered the phrasing of its critical proposal from time to time in the effort to persuade the Union to accept it, the variances in language are of no moment and therefore need not be spelled out in detail here. It is clear that the one set out in the complaint in substance reflects the issue involved to the extent that anything the Respondent proposed in writing shed light on this proceeding. It reads as follows: Article VI(4)-The Company shall have the sole determination in the establishment of incentive rates. Rates may be changed by the Company upwardly or downwardly during the term of this agreement, due to changes in methods, materials, equipment, job assign- ment, changes in the job content and the clerical errors; provided such change or changes reflect the extent of the change made; and provided that incentive rates will be so set that an employee who is not a learner , trainee, or substandard worker, can, with the exercise of incentive effort, earn not less than $1 .80 per hour. Article VI (5)-The grievance procedure, including arbitration, of the disputes arising under this Article, shall be limited to determining whether or not the Employee is getting the hourly rate for the job; or in the case of piece workers , whether the Employee can, with the exercise of incentive effort, earn not less that $1.80 per hour. C. Impasse • The Strike A bargaining session took place in the morning of January 28, 1969; the employees went out on strike that afternoon. The Respondent took pains to prove the Union had authorized the strike. Its reason was because the Union's 30-day notice of dispute to the Federal Mediation and Conciliation Service, as required by Section 8(d)(3) of the Statute, had not been given until January 7, 1969. Wayne Demoncourt, director of the Union, tried to hold back on this question, but the record shows clearly the Union did authorize the strike that day, and I so find. As will appear below, the Respondent contends that because the strike constituted a technical violation of Section 8(d) by the Union, it, the Respondent, was in no event obligated to reinstate any of the strikers when late in the year they offered to return, conditionally or unconditionally. That matter goes to the duty to reinstate returning unfair labor practice strikers and will be discussed below. The impasse between the parties , and the resultant strike, came about because of the Respondent's adamant insistence on its piece rate setting and related grievance and arbitration clause . John Boardman, the company president, who was present at the January 28 meeting, testified the conversation "revolved around the fact that there was very little point in discussing anything unless we would clarify this issue of arbitration and the Union never even discussed, to my knowledge, or pursue our proposal." As Dernoncourt recalled: "The meeting centered around the discussion on the earnings of piece rated employees and that the Company's proposal limited the arbitrability of piece rates in the event they were reduced." In the words of the Company's lawyer, who was also present, the disagree- ment was "over whether or not Mr. Boardman had said he would not cut rates and Mr. Boardman had said . . . stated that he has said and there was a little argument back and forth on that. And then Mr. Boardman did go on and explain in some detail, really in great detail , why the constant exposure, unlimited exposure , to the arbitration of some two thousand rates could hamstring the operation of the Company, ...." And when the employees gathered to decide a course of action during the noon hour , and voted to strike, "There was a motion put on the floor by one of the members that the Company's position hadn't changed on the clause that was disturbing them or giving them the right to cut wages and they didn't see any use." The same single refrain ran through the postelection meetings aimed at settling the strike . Uncontradicted testimony by Dernoncourt as to a February 5 meeting: . . both parties agreed that this was key [sic] that would unlock the situation . That as long as the position on Article Six, Sections four and five, that we couldn't, settlement was very . . . almost impossible." The Union proposed "that if the Company would give us in writing assurance that employees' average earnings would not decrease as the result of new rates set by the company on new styles, that we could solve the issue ." The Company refused. On the 20th Dernoncourt offered an agreement whereby only unresolved grievances could be arbitrated "under the same procedure that the arbitrator had ruled prior in his case." At a March 6 meeting, still attempting to break the deadlock, the Union suggested "we would negotiate a straight hourly rate for these employees." Finally, on May 13 the Union again proposed "putting expected average hourly earnings in the article , a straight hourly rate." At one point the Union even offered to accept the revised article VI in return for freedom to strike during the life of the contract. All this the Company rejected. The testimony of its own witness supports the finding that it was this sole question that provoked the strike . Cutler Mason, the industrial engineer, said that at one meeting after the strike the Union "established the position that Article Six was the difficult point and there was no use discussing any other issue, economic or otherwise, until this was resolved." The witness also recalled talk of a moratorium, suggested by a mediator ; all other parts of the contract to take effect and the sole issue of rate setting and their arbitration held in abeyance for a fixed period . No dice. Whatever its demand was, the Respondent pushed it to impasse. In its brief the Company points to a document MOORE OF BEDFORD received in evidence as proof that it offered to withdraw the demand to limit the area of arbitration , evidence which it says now precludes any finding that it insisted upon the proposal too forcefully . The Company made certain alternative proposals at a meeting on January 6, 1969, and to assure that the employees understood the idea reduced it to writing for their consideration . The document was distributed to the employees , they discussed it at a meeting on the 9th, and voted to reject it. The document reads as follows: MEMO TO : ALL EMPLOYEES SUBJECT: ALTERNATE COMPANY ECONOMIC OFFERS ON CONTRACT NEGOTIATIONS After many, many sessions and long, continuous study and bargaining , the company offers are spelled out in this letter. There have been certain agreed on changes in the main body of the contract, but with the exception of Article 6 , we shall here only describe the company's monetary proposals . (Although agreement to the monetary offers must mean agreement to the main body changes.) These offers are retroactive to the contract date of agreement (January 1, 1969) only through Monday, January 6, 1969 . Otherwise , as directed by the Bargaining Committee and company the old contract shall be in force. FIRSTALTERNA TE PROPOSAL. The first alternate proposal is for a three year contract . The change in Article 6 centers around the opportunity for incentive or piece work people to earn not less than the job rate for the job , where heretofore, (in the present contract) it is stated that the incentive or piece work operators will have the opportunity to earn not less than $1 .70 per hour . Since the proposed job rates are : Upholsterers, except Outsiders, $2.00; Cutters, Sewers, and Outsiders $1.90 and all other incentive workers $ 1.80. This is understood to mean that the point of acceptable or non -arbitrable earnings would be these job rate values rather than the present $1.70. The piece work guarantee however , will still be at $1.70. Hourly Paid Employees: The offer for hourly paid employees is an additional .08 cents per hour effective now, and an additional .07 cents per hour effective 7/l/70. Incentive Rated Employees- The company offer is an additional 3% now, and an additional 2 1/2 effective 7/l/70. Insurance: The company offer is an additional $500. Life Insurance (to $2500.) effective now, and an additional $500. Life Insurance (to $3000.) effective 7/1/70. Hospital Room & Board: The company offer is an increase to $20. per day for an employee and dependents effective now and increasing to $22 . per day for an employee and dependents effective 7/1/70. The remaining benefits (Hospital Extras-80 % Doctor's Visits-$4.00; Surgical-$375.00; Weekly Accident and Sickness-$25.00 ; Major Medical-to $10,000.) remain the same. The weekly premium contribution by the 727 employee having one or more dependents will be $1.00. As before, the premium for the employee will be paid by the company. SECOND ALTERNATE PROPOSAL: This offer by the company is for a 2 year contract and with the exception of some mutually agreed on main body changes, the contract including the aforemen- tionedArticle 6, remains in its present form. Hourly Paid Employees: The company offer is an additional .06 cents per hour effective now and an additional .06 cents per hour effective 1/ 1/70. Incentive Rated Employees: The company offer is an additional 3% effective now. Insurance: The company offer is an addition to Hospital Room & Board daily benefits to $22. per day for employees and their dependents effective now. The other benefits, (Life Insurance-$2000.; Hospital Extras-80%; Doctor's Visits-$4.00; Surgi- cal-$375.00; Weekly Accident and Sickness-$25.00; Major Medical-to $10,000.) remain the same. The weekly premium contribution by the employee having one or more dependents will be $1.00. As before, the premium for the employee will be paid by the company. With regard to incentive rates : There will be no comparisons used in establishing of piece rates, and grievances on piece rates or incentive rates will be processed one at a time. In either offer the following conditions hold: (1) The packers (boxers) will be put on an incentive plan but will receive the offered hourly increases until that time. (2) The cutters will have the benefit of working on a direct incentive plan, but will receive the offered hourly increases until such time as the plan is arranged. (3) The finishers will revert to (agreed to) plant wide guarantee and job rate, from their present temporary guarantee andjob rate. (4) Piece work increases offered by the company will not apply to (a) bag sewing, bench tufting, or cushion stuffing rates (b) Miscellaneous pay (cleaning tables, changing tanks, etc.) (c) Sewing services or cutting room bonuses. (5) Finishing and Cushion Fabricating increases will be adjusted upward to reflect agreed to piece work increases offered by the company. (6) A training rate of $1.85 per hour computed on a weekly basis (or individual piece rate earnings whichev- er is higher) will be given for the first 480 hours of employment or transfer, in order to encourage new upholsterers and cover sewers to learn the job. Inartful as the wording of the second alternative proposal may have been, clearly it was intended to suggest that the Company's proposed revision of article VI would be included in that proposal too and not extension of the clause as it had stood in the expiring contract. There is no question this is how the Union and the employees understood it and that this is how the Company knew they understood it. All that happened thereafter, as detailed above, confirms the conclusion. On this point the most significant circumstance is that nothing was said to indicate the Company ever receded from its position that the old 728 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contract was intended to limit arbitration, and that the Company's entire purpose was to assure that there would not again be an arbitration decided on the same basis as in the past. And finally, no mention of such a proposal-radically departing from all the Company said before and after the strike-was made on the very day that the employees voted to quit work. D. Analysis and Conclusion Two realities of industrial relations must be kept in mind at the outset. (1) An inherent aspect of any timestudy method for setting incentive piecework wage rates is that the employer acts unilaterally when it fixes rates in the continuously changing process of production. The contract has always so read in this case too: "Piece work rates may be changed by the Employer upwardly or downwardly during the term of this agreement ...." And any question of fairness or unfairness that may arise, ordinarily, as in this case also, are resolved by the grievance procedure. This is an established method of doing business, it has never been held unlawful, and, unless it be proscribed, must be deemed perfectly proper in this plant also. (2) Wages go to the heart subject matter of any collective- bargaining agreement, and no citation of authority is necessary to support the cardinal rule of law that the employer is duty bound to discuss them, to bargain about what they shall be, with the employees' bargaining representative. When the wages are fixed in the contract-as in the usual case of hourly pay, or predeter- mined piecework compensation-he discusses them with the union, and, as agreed by the parties, the wages are written into the contract. When he sets them after the contract has been signed-because he chooses to utilize a timestudy incentive method to determine constantly changing piecework rates-he bargains about them when he sets them, or immediately thereafter if the bargaining agent for any reason believes they are wrong, either because his method violated the rules set out in the contract or because the contract is silent on the subject and the union deems them unfair. But be it before or after the agreement is signed, bargain about them he must, and the fact the employer uses a timestudy engineering method does not alter the rule of law. (N.L.R.B. v. Berkley Machine Works, 189 F.2d 904 (C.A. 4).) When the critical phrases in the contract proposal, without which the Respondent would in no circumstance sign any agreement, are considered together with the reality of what the current wage rates were and what the Company intended them to be in the future, the conclusion is inescapable that its purpose was to remove the Union as a voice in the determination of what two-thirds of the employees would be paid for their work throughout the life of the contract. It all starts with exclusive power in the Respondent to fix the rates: "The Company shall have the sole determination in the establishment of incentive rates." The first of the two proposed clauses, article VI (4), ends by guaranteeing that experienced workers would "earn not less than $1.80 per hour." In arguing that this guaranteed amount is all the Union could talk about in future grievances, all it could ever insist had been agreed on as wages, the Respondent reads the contract as though $1.80 an hour were the contractually established regular wage. It was not, as the contract reads, and it was not intended to be. In fact, $ 1.80 per hour, as then proposed, and $1.70 per hour, as set out in the expiring agreement, bore no relationship to what all these employees had long been paid and what they were going to be paid in the future. Between the opening phrase-giving the Company the right to set the rates-and the closing one-setting the $1.80 minimum-the proposal admitted the Company's obligation to consider "changes in method, materials, equipment, job assignment, changes in thejob content and the clerical errors," when it did alter piecework rates. And it was in keeping with that provision, also found in the past contracts, that the actual earnings of the employees had for years been far in excess of the floor amount always written into the agreement ; it averaged about 40 cents per hour more in 1965 , 74 cents more in 1967, and 85 cents more in 1968. And while there is indication the Company looked forward to bringing about some reduction in these average earnings, it is absolutely clear there was no intent to pay the employees anything comparable to the minimum rates. Not only did the proposals themselves say changes in rates must continue to bear a relationship to "changes in job content," but the Respondent's bargaining representatives kept telling the union negotiators no reductions in take-home pay would occur. The company president even offered a side letter to that effect. Moreover, at the hearing the Respondent reaffirmed its intent to pay in excess of the minimum stated in its proposed contract. It is in the light of these facts that the second clause proposed, article VI (5), must be evaluated . It provides that "The grievance procedure , including arbitration ... shall be limited to determining . . . whether the employee [pieceworkers] can . . . earn not less than $1 .80 per hour." This means nothing less than total exclusion of the piece rate setting prerogative reserved to the employer from grievance and arbitration. Restated, it directly bespeaks insistence on the right to set wages at will throughout the life of the contract as though there existed no bargaining agent as spokesman for the employees . Throughout its brief the Respondent does not contend otherwise . The affirma- tive defense that it would be too much trouble for the Company to be bothered with the Union on matters of this kind has no merit. It matters little whether what the Respondent demanded of the Union be described as a contract unacceptable "by a self-respecting union," N. L. R. B. v. Reed & Prince Mfg. Co., 205 F.2d 131 (C.A. 1), or agreement on a nonbargainable issue, N.L.R.B. v. Wooster Division of Borg - Warner, 356 U.S. 342. To insist to the point of impasse that a union remove itself as the bargaining agent in so broad and significant an area of collective bargaining is not good-faith bargaining as required by the Statute. As the Board stated in Alba- Waldensian, Inc., 167 NLRB No. 101, "Its [the employer's] insistence upon retaining the right unilaterally to control during the contract term an item as vital to an agreement as wages appear to us ... the clearest manifestation of bad faith." In L. L. Majure Transport Co., 95 NLRB 311, the employer, among other restrictive contract proposals , insisted on "the right . . . to increase or MOORE OF BEDFORD 729 decrease wages unilaterally" while denying "establishment of a grievance procedure," and the Board characterized the position as "proposed shackles for the Union, while reserving unrestrained freedom for itself . Such a contract, if entered into, would have amounted to a formal negation of the collective bargaining principle." A more directly analagous situation was presented in Tex-Tan Welhausen Company, 172 NLRB No. 93, where the proposed contract contained no base rate in dollars and cents but provided only for the usual nebulous timestudy engineering concepts for setting ever-changing piecework rates. The Board's holding was: "It is found that by insisting upon a contract which would grant it the uncontrolled right to fix rates of pay for piecework unilaterally and would deny to the employees their right to file grievances as to rates of pay for piecework Respondent refused to bargain in violation of Section 8(a)(5)." I am unable to distinguish that case, in principle, from the one at bar merely because the Respondent here offered to agree to minimum base pay in fact bearing no relationship to the pay which its employees had always received and which it was clearly intended they should continue to be paid. I find, in the circumstances of the record as a whole, that by insisting to impasse on the Union's acceptance of its proposed contract article VI (4) and (5) the Respondent refused to bargain in violation of Section 8(a)(5) of the Act. E. The September 16, 1969, Meeting The strike was still in progress in September. On December 18, 1969, the Union told the Company without equivocation that the strike was over and all strikers wished to return to work. The complaint alleges there was an unconditional offer to return all the strikers, both on September 16 and on December 18, and that in each instance the Company unlawfully refused to reinstate them. Wtih respect to the September incident, the General Counsel made clear at the hearing that the intendment of the allegation is that even assuming this was not an unfair labor practice strike, it was the Respondent's failure to reinstate strikers who had not been replaced, and whose jobs were still open, that constituted violations of Section 8(a)(3) of the Act that day. As to the December offer to return, the General Counsel explained that in the event this was only an economic strike, no unfair labor practice was committed, because there is no proof of refusal to take strikers back to jobs still then open. It is Dernoncourt's oral testimony that is said to prove an unqualified offer to return all the strikers in September. By that time there had been no meeting between the parties for over 4 months, and the Company's operations had never been discontinued. On the subject of what was said that day, a meeting arranged by the conciliation service, Dernoncourt testified somewhat ambiguously and evasive- ly. He was not a persuasive witness. He started by saying "the Union proposed that we accept the Company's proposition on limitation of arbitration for one year and that the people returned to work ...." Rephrasing: "The Union then proposed that the employees return to work and that the parties continue negotiating to try to arrive at a contract." Here his words seemed to combine two ideas as a suggestion that contract settlement and abandonment of the strike came hand-in-hand. He then admitted he did not say, either to the company representatives or to the mediator, that his offer was an unconditional one. He also said he did not recall whether the company lawyer asked was it an unconditional offer to return or not. As Mason, the industrial engineer, recalled it, Dernonc- ourt entered the room with the mediator and said "eighty- one people wished to return to work and that we had some things to discuss and that we had to sit down and hammer out a contract." Mason also testified that at this point Gardner, the company lawyer, asked was this an uncondi- tional offer and Dernoncourt replied , "No." James Holdren, the general manager , corroborated Mason that the union agent replied to Gardner it was not an unconditional offer. He quoted Dernoncourt as saying: "we want to work out an agreement whereby the people be returned to their jobs . . . there are some conditions that need to be worked out . . . we need a contract that can be ratified by the people." And finally, Gardner gave like testimony, all uncontradicted by Dernoncourt: ". . . Mr. Dernoncourt sat down and said, `The employees wanted to come back to work.' And I said, `Well, that's fine. Is this an unconditional offer to return to work on behalf of the employees?' And he said `No, it is not.' He said, `I would like to talk about a one year contract and a total package that will get ratification by the employees.' " The Company expressed surprise at the turn of events and said it would have to consider its position and decide on what its proposals for a settlement would be . It also said there might not be any substantial number of job openings then. It did not thereafter, and has not since, hired any new employees except returning strikers. The parties did not meet again until December 18, when Dernoncourt told the Company in so many words he was offering to return the strikers "unconditionally." Dernoncourt has been for 30 years a union negotiator involved in collective-bargaining conferences and strikes. He certainly knows the difference between an offer to make a strike settlement and an unconditional abandonment of strike by the employees. He knew what to say when he was of that frame of mind 3 months later. There is no reason for not crediting the testimony of the company witnesses that he admitted to them his offer in September had strings attached. I find that the Union did not offer to return the strikers to work at that time and shall therefore dismiss this allegation of the complaint. The complaint alleges, the answer admits, and I find that all production and maintenance employees of the Respon- dent at its Bedford, Virginia, plant, excluding office clerical employees, watchmen and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. The Respondent does not dispute the complaint allegation that at the time of the events, both before and after January of 1969, the Union was the exclusive bargaining agent of the employees involved . It asserts only that towards the end of the year, about the time the employees abandoned the strike, the Union had lost its representative majority status. In view of the unfair labor practices committed in the early part of the year, and which provoked the strike, I find that the Union was at all times 730 DECISIONS OF NATIONAL LABOR RELATIONS BOARD material herein and still is the exclusive representative of all employees in the appropriate unit within the meaning of Section 9(a) of the Act. F. Unfair Labor Practice Strike; Unconditional Offer to Abandon the Strike The record shows without question that the reason why the employees struck in January of 1969 was to protest against the Respondent's unlawful refusal to bargain with their Union ; it follows this was an unfair labor practice strike. It is equally clear that in December of 1969 the employees unconditionally offered to abandon the strike and return to work. In the circumstances they were entitled to be restored to their former positions, and the Respondent obligated to release striker replacements if necessary to make place for the returning strikers . And it is immaterial, in the circumstances, that the Union may not have complied with the filing requirements of Section 8(d) of the Statute before inception of the strike . See, Mastro Plastics Corp. v. N.L.R.B., 350 U.S. 270. IV. THE REMEDY It having been found that the Respondent, in violation of the Statute, unlawfully refused to bargain with the Union, it must be ordered to cease and desist from such practices and to bargain with the Union in good faith as the Statute requires, on demand. V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent, set forth in section III, above, occurring in connection with its operations de- scribed in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. Upon the basis of the foregoing findings of fact, I make the following: CONCLUSIONS OF LAW 1. The 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. All production and maintenance employees of the Respondent at its Bedford, Virginia, plant, excluding office clerical employees, watchmen and supervisors as defined in the Act, constitute a unit appropriate for purposes of 2 In the event no exceptions are filed as provided by Section 10246 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. 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 collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein the Union has been, and is now, the exclusive representative of all the employees in the appropriate unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, and other conditions of employment, within the meaning of Section 9(a) of the Act. 5. By refusing to bargain collectively with the Union as the exclusive representative of all its employees in the appropriate unit the Respondent has engaged, and is engaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The unfair labor practices described above are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) 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, I recommend that Moore of Bedford, Incorporated, Bedford, Virginia, its officers, agents, successors and assigns, shall: 1. Cease and desist from insisting, as a condition to entering into an agreement with the Union or any other exclusive bargaining representative of its employees in the appropriate unit, on contract provisions which would grant it the uncontrolled right to fix rates of pay for piecework unilaterally and at the same time deny to the employees their rights to file grievances as to rates of pay for piecework. 2. Take the following affirmative action which I find will effectuate the policies of the Act: (a) Upon request, bargain collectively with the Union as the exclusive bargaining representative of all employees in the appropriate unit described above, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment and if an understanding is reached embody such understanding in a signed agreement. (b) Post at its place of business in Bedford, Virginia, copies of the attached notice marked Appendix.2 Copies of said notice, on forms provided by the Regional Director for Region 5, after being signed by the Respondent's representative, shall be posted by the Respondent immedi- ately 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 the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify said Regional Director, in writing, within 20 days from the receipt of this Decision, what steps it has taken to comply herewith .3 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." 3 In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read : "Notify said Regional Director, in wasting, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith