Seattle-First National Bank

SEATTLE-FIRST NATIONAL BANK Seattle-First National Bank and Employees' Association of Seattle-First National Bank. Case 19-CA-4115 June 16, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND JENKINS On March 5, 1969, Trial Examiner Maurice Alexandre issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision . Thereafter, 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 this 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 Recommended Order of the Trial Examiner, and hereby orders that Respondent, Seattle-First National Bank, Seattle, Washington, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION MAURICE ALEXANDRE , Trial Examiner : This case was heard in Seattle , Washington, on December 10, 1968, upon a complaint issued on October 7, 1968,' alleging that Respondent had violated Section 8 (a)(5) and (1) of the National Labor Relations Act, as amended . In its answer, Respondent denied the commission of unfair labor practices . The issue presented is whether or not Respondent violated the Act by its unilateral action in imposing a service charge upon unit employees for transacting purchases and sales of stock and securities on their behalf, and by its refusal to bargain about such charge. 691 Upon the entire record,' my observation of the witnesses, and the brief filed by the Respondent' I make the following: FINDINGS AND CONCLUSIONS' 1. THE UNFAIR LABOR PRACTICES A. The Evidence Respondent is a corporation chartered under the National Banking Act, with its principal office and place of business as well as a number of branches situated in Seattle, Washington, where it is engaged in rendering banking services. For a number of years, the Union has been recognized by Respondent as . the exclusive collective-bargaining representative of its employees in the following unit: All employees of the Respondent, at its banks in the State of Washington, excluding management trainees, confidential employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act. There are approximately 3,000 employees in the unit. So far as the record shows, the last collective-bargaining agreement between Respondent and the Union expired on October 31 , 1968.' Respondent maintains an investment service department which acts as agent in effectuating purchases and sales of stocks and bonds on behalf of customers, including both employees and nonemployees. Respondent has charged nonemployees a fee for this service, but from about 1940 until 1968 , it did not impose a similar service charge upon its employees. The above-mentioned agreement contains no reference to such service charge, and prior to July 8 such charge had not been the subject of negotiations, discussions or demands by the contracting parties. By letter dated July 8, Respondent informed the Union that because of the substantial increase in the volume of investment transactions effectuated on behalf of employees, it could no longer provide its investment service without charge; and it advised that effective August 1, certain fees would be charged its employees, both unit and nonutlit, for all investment transactions excepting those involving stock issued by Respondent. More specifically, the letter pointed out that during the preceding 5 years, the number of employee transactions had increased from 5 to 25 percent of total transactions Y'h ' Based on a charge filed August 20, 1968, by Employees' Association of Seattle-First National Bank (hereafter referred to as the Union). 'Respondent's unopposed motion to correct the transcript is granted. 'I deplore the failure to file a brief by counsel for the General Counsel. Although I did not expressly request him to do so, I fixed a date for such filing on the assumption that he would see fit to submit a brief, particularly in view of my recent reference to the failure to file a brief in H. C. Smith Construction Co., Case 19-CA-3907, TXD issued October 25, 1968. It seems to me that if a case is sufficiently important to be tried, it is important enough to be briefed. And where, as here , a case involves Legal issues which are less than routine, there is an even greater obligation on the part of counsel to assist the Trial Examiner by discussing their positions and the supporting authorities. 'No issue of commerce is presented . The complaint alleges and the answer admits facts which , I rind, establish that Respondent is an employer engaged in commerce and in operations affecting commerce within the meaning of the Act. Respondent also admits and I rind that the Union is a labor organization within the meaning of the Act. 'All dates referred to hereafter relate to 1968 unless otherwise specified. 176 NLRB No. 97 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD handled by Respondent; that during the preceding 18 months, employee transactions had increased 58.8 percent as compared with a 30.8 percent increase in total trade volume; and that employee transactions involving securities other than stock issued by Respondent had grown 100 percent during the same period . The letter advised that beginning on August 1, all employees would be charged one-half the regular nonemployee fee charged for all security transactions except those involving stock issued by Respondent, with a minimum fee of $2.50 per transaction. On one occasion before August 1, the Union spoke to Respondent about the matter. On that date, Respondent adopted a fee schedule which revised its then existing schedule in the following respects: Type of Security Old Rate New Rate Listed I cent to 5 10 cents per stocks cents per share , share ($5 minimum) depending on price Unlisted 5 cents to 25 10 cents to 37-1/2 stocks cents per share , cents per share depending on price ($5 minimum) Listed corporate bonds $ 1 per $1,000 ($2.50 minimum) No change Unlisted cor- porate bonds $2.50 per $1,000 No change Employee No charge 1/2 above fees transactions (except for stock issued by Respondent) By letter dated August 7 addressed to Respondent, the Union objected to the withdrawal of "established employee benefits" by the unilateral imposition of the above service charges, requested rescission of the charges, and offered to discuss the matter at a bargaining session. By letter dated August 12, Respondent took the position that the matter was not a mandatory subject of bargaining. The unfair labor practice charge herein followed. B. Analysis and Conclusions Section 8(a)(5) of the Act makes it an unfair labor practice for an employer to refuse "to bargain collectively" with the representative of his employees. Section 8(d) defines the quoted phrase as requiring good faith negotiations "with respect to wages, hours and other terms and conditions of employment . . . ." The theory of the complaint herein is that the Respondent had for many years followed a practice of effectuating investment transactions for its employees without charging a service fee therefor, that such practice constituted an employee benefit encompassed by Section 8(d), and that Respondent's withdrawal of that benefit from unit employees without negotiating with the Union as their majority bargaining representative violated Sections 8(aX5) and (1) of the Act. Respondent advances the following arguments to support its contention that it was under no obligation to bargain about the service charge imposed upon the unit employee:' (1) The collective-bargaining agreement in force at the time it imposed the charges recognized that Respondent possessed "the exclusive right and power to manage its business," and contained a grievance procedure which would have permitted a determination as to whether Respondent had the contractual right to impose the service charge unilaterally ., No grievance was presented respecting the service charge by the Union or any unit employee . The failure of the Union to follow the grievance procedure precludes an unfair labor practice finding. (2) The service charge was adopted solely because of economic necessity, was imposed uniformly upon non-unit as well as unit employees, and involved no element of union reprisal or discrimination. (3) Respondent's free investment service has not been regarded or treated as an employee benefit. (4) The number of unit employees utilizing the service, the number of transactions effectuated for them, and the dollar amount of the service charges involved were so insubstantial that they should be considered de minimis. I conclude and find that Respondent's conduct violated the Act. 1. Respondent's argument relating to the contractual grievance procedure amounts to a contention that the Board is without jurisdiction here because the question presented requires interpretation of the collective-bargaining agreement. This contention is without merit. Gravenslund Operating Co., 168 NLRB 72, in which an identical argument was rejected.' 2. Similarly without merit is Respondent's argument regarding the nondiscriminatory character of, and the legitimate motive behind, the service charge . "A finding of bad faith is not a prerequisite to finding an unfair labor practice in such a situation," i.e. a unilateral change in wages, hours or other terms or conditions of employment. N.L.R.B. v. Central Illinois Public Service Co., 324 F.2d 916 (C.A. 7); accord, Gravenslund Operating Co., supra. 3. In N.L.R.B. v. Central Illinois Public Service Co., supra, a public utility had for 36 years granted a 33-1/3 percent discount in the price of gas purchased by its employees for space heating. Holding that "the employee gas discount was an `emolument of value' which accrued to `employees out of their employment relationship"', the Court enforced the • Board's finding that the unilateral discontinuance of the discount violated the employer's obligation to bargain with the union with respect to "wages, hours and other terms and conditions of employment". The situation in the instant proceeding is analagous to that in Central Illinois. Although Respondent contends that its 28 year old free investment service has not been regarded or treated as an employee benefit, the fact remains that only its employees received the service without charge. Thus, the service, like the discount in Central Illinois, was an emolument of value which accrued out of the employment relationship, and is similarly encompassed by Section 8(d). 'Respondent admits, and I find, that at all times material, the Union has been the duly designated and recognized collective-bargaining representative of a majority of the employees in an appropriate unit, as described above. 'Respondent does not expressly assert that the Union has waived the right to be consulted regarding changes in the investment service fee, and there is no basis fora finding of waiver either in the terms of the contract or elsewhere in the record . A waiver must be "clear and unmistakable." Beacon Journal Publishing Co. v. N.L.R.B.. 401 F.2d 366 (C.A. 6), and cases there cited. SEATTLE-FIRST NATIONAL BANK A contrary conclusion is not required by the fact that the Respondent's contracts with the Union have not expressly referred to the free investment service, or that such service has not historically been the subject of bargaining between them. McCall Corp., 172 NLRB No. 55; Gravenslund Operating Co., supra. That a subject has not hitherto been introduced into the bargaining process does not mean that it must henceforth be barred as a matter for discussion . The duty to bargain is not and cannot be confined to subjects which the parties have discussed in the past. Similarly, controlling effect cannot be accorded to the fact that Respondent never referred its free investment service as a benefit in communicating with employees or potential employees . An employer's express reference to an employee privilege as a fringe benefit may constitute some evidence that he considers the privilege to be a part of the employees' wages or other terms or conditions of employment. See, e. g. N.L.R.B. v. Central Illinois Public Service Co., supra; Southland Paper Mills, Inc., 161 NLRB 1077; Westinghouse Electric Corp., 156 NLRB 1080. But his failure to refer to it as such does not require a contrary conclusion . The determination as to what is covered by Section 8(d) of the Act cannot turn on what an employer refrains from saying to his employees or potential employees. 4. In support of its de minim is argument, Respondent contends that an employer is not required to bargain about a benefit unless it has a significant impact upon the unit employees. Based upon statistical evidence introduced into the record relating to the period from January 1, 1966 through August 1968, Respondent points out that during any one calendar year covered by such evidence, only a small proportion of the unit employees (about 90 out of 3,000 or 3 percent) requested investment service which was free but is now subject to charge ; that of the total transactions effectuated by Respondent for all persons, only a small proportion (about 7 or 7-1/2 percent) were of the type now subject to the service charge payable by unit employees;' and that if the schedule now applicable to employees had been in effect during the first eight months of 1968, the cost to bargaining unit employees would have been only $655 .21. Respondent argues that the number of unit employees utilizing its investment service, the number of transactions requested by them, and the value of service charges involved, when compared to the corresponding figures relating to nonunit employees and nonemployee customers, are too small to warrant an unfair labor practice finding . It then cites several decisions in which the employee benefits found to have been unlawfully changed by unilateral action were described as having substantial value , as well as cases purporting to show that such benefits had a more substantial impact upon the unit employees than those here involved.' ' Alto gh the matter is not free from doubt , it would appear that Respondent has arrived at this percentage as follows. According to the statistical evidence, unit employees accounted for about 11 percent of all transactions, including thou involving stock issued by Respondent; of the unit employees utilizing Respondent's investment service, 65 percent engaged in transactions of the type now subject to a service charge, i.e., involving securities other than those issued by Respondent ; ergo, of the proportion (11 percent) of total transactions effectuated for unit employees, 65 percent thereof represented transactions now subject to a change. 'E.g., N.L.R.B. v. Central llllnotr Public Service Co., supra (gas discount which averaged $48 for each of 126 employees, constituting fewer than half the unit employees); Southland Paper Mills, supra, 161 NLRB 1077 (75 percent of employees utilized hunting privilege in employer's 693 I am not persuaded that what is here involved can properly be regarded as de minimis. Even if the above-mentioned percentages were to remain constant in the future, as Respondent appears to assume , the value of the investment service to unit employees using it would, over a period of years, be substantial. Moreover, I cannot accept Respondent's assumption . In view of the substantial increase in utilization of the investment service by Respondent's employees, including unit employees, it is at least possible that there may be further increases in utilization by unit employees . In addition , contrary to Respondent's implication, the decisions which it cites do not establish the minimum limits of substantiality, and are not dispositive of the issue here presented . A case which sheds greater light on the issue is McCall Corp., supra, in which the Board adopted the following finding of the Trial Examiner: Nor can the matter here be characterized as "trifling" or of little concern to employees simply because it involves only three vending machine food items." Involved in this proceeding is the Employer's power to unilaterally raise prices of any or all items furnished to employees, without giving the employees a chance to be heard . If Respondent can ignore its employees in raising milk and cheeseburger prices on one day, it can similarly ignore them in raising other prices the next day, and so on until an entirely new price structure is established.... Similar considerations apply here . For in addition to the question of Respondent's power to continue in effect the increase in investment service charges already imposed on unit employees, this case also involves Respondent 's power to increase the service charges for such employees even further without negotiating with their bargaining representatives. And if Respondent can ignore the bargaining representative with respect to its investment service, it might take the position that it can act unilaterally with respect to a number of other services which it has been giving to its employees , such as effectuating sales and purchases of stock issued by Respondent without charge, free checking accounts, rental of safety deposit boxes at half price, and purchase of bank money orders without charge.'' Over a period of years, the total value of all the services now and heretofore received by unit employees at a reduced rate or free of charge may be quite substantial indeed. The de minimis issue thus cannot be resolved merely by reference to the extent and value of utilization of the investment service during the limited period selected by Respondent, and without giving at least some consideration to the possible ramifications bf the conclusion reached . In Westinghouse Electric Corp., supra, the Board held that the employer violated the Act by refusing to bargain with the union respecting certain changes in food prices charged at the in-plant cafeterias used by the employees. Those changes consisted of a 5-cent increase in the price of each of the hot food entrees 1I k C eer. Inc., 161 NLRB 241 (15 to 20 percent discount on meat purchases by employees). "As noted, Respondent raised the vending machine prices of milk from 15 to 20 cents a pint, of cheeseburger deluxe from 30 to 45 tents, and of casseroles from 25 to 30 cents... . "None of these services has been referred to in the collective-bargaining agreements and none has been the subject of negotiations. Although Respondent has bargained with the Union respecting its practice of making loans to employees at less than prevailing interest rates, it might decide that that practice is also a nonmandatory subject of bargaining. 694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and a 1-cent increase in the price of carry-out coffee. The following language of the majority opinion is applicable here: The present dispute is not limited to the price of coffee, as the dissent implies, but extends to all prices charged at the cafeterias.... Experience tells us that disputes over plant conditions that may appear of minor significance to us, such as the length of relief periods, the schedule of prices charged for lunches, etc., can lead to the disruption of operations. In our view it is therefore within the objective and meaning of the Act to require parties to submit such controversies to the healing processes of collective bargaining. The Board's decision was enforced by a panel of the Circuit Court of Appeals for the Fourth Circuit, one Judge dissenting. 369 F.2d 891. Speaking for the majority, Judge Craven said: An increase in the prices charged for food offered in the only facility available to the employees unquestionably has substantial impact on the workers. The small amount of the increases in the price of coffee and hot dishes is not the measure of the importance of the issue. In determining whether a matter is a mandatory subject of bargaining, whether much or little is involved financially is not the controlling test. . The underlying philosophy of the Labor Act is that discussion of issues between labor and management serves as a valuable prophylactic by removing grievances, real or fancied, and tends to improve and stabilize labor relations. Experience teaches that major work interruptions may spring from seemingly trivial causes. Although the panel's decision was subsequently reversed on a petition for rehearing en bane, 387 F.2d 542, I am bound by the Board's decision in that case. McCall Corp., supra. 5. For the reasons set forth above, I reject Respondent's defenses and find that Respondent's practice of furnishing its investment service without charge to its unit employees was a mandatory subject of bargaining encompassed by Section 8(d) of the Act. I therefore further find that Respondent violated Sections 8(a)(5) and (1) by unilaterally abandoning that practice through its imposition of fees for rendering investment services to unit employees, and by its refusal to comply with the Union's specific request to bargain upon the imposition of such fees." CONCLUSIONS OF LAW 1. At all times material, the Union has been the exclusive bargaining representative of the employees in the following appropriate unit: "In Westinghouse Electric Corp., supra, the Board found that because the restaurant business involves the sale of many items , changing menus and constant and sharp fluctuations in the cost of food ingredients, it is impracticable to require consultation with a union before each change in price. Accordingly, the Board refused to hold that the unilateral price change was an unfair labor practice , and predicated its finding of a violation upon the employer's refusal to honor the union 's specific request for bargaining upon price changes made or to be made. Since the same impracticability does not exist with respect to the investment and other services rendered by Respondent to its employees , I find that Respondent's unilateral conduct was unlawful. All employees of the Respondent, at its banks in the State of Washington, excluding management trainees, confidential employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act. 2. Respondent has engaged in unfair labor practices within the meaning of Sections 8(a)(5) and (1) of "the Act by unilaterally changing its practices so as to impose upon employees in the above unit certain fees for rendering investment services to them, and by refusing to bargain with the Union, as the representative of such employees, concerning the imposition of such fees. 3. The aforesaid unfair labor practices affect commerce within the meaning of Sections 2(6) and (7) of the Act. THE REMEDY I shall recommend that Respondent cease and desist from its unfair labor practices and take certain affirmative action which I deem necessary to effectuate the policies of the Act. Specifically, I shall recommend that Respondent bargain with the Union upon request concerning the imposition of investment service fees upon unit employees, and make whole its unit employees for any monetary loss incurred by them as a consequence of Respondent's unlawful change in its practice of providing free investment services to them, by paying to each a sum of money equal to the fees which he paid to Respondent on or after August 1, 1968 for providing such services, with interest at 6 percent, to be computed in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. It is the Board's customary policy to ' direct an employer to restore the status quo where he has taken unlawful unilateral action to the detriment of his employees. American Fire Apparatus Co., 160 NLRB 1318. It is true that in New Orleans Board of Trade, Ltd., 152 NLRB 1258, the Board had failed to follow that policy on the ground that the employer had acted in a good faith but mistaken belief that he was not required to bargain concerning the discontinuance of employee bonuses, and had engaged in no other unfair labor practices. But thereafter, in the American Fire case, where Trial Examiner followed the New Orleans decision, the Board required the employer to make whole his employees for any loss incurred as the result of the unlawful withholding of a bonus. Although American Fire might be distinguishable on the ground that the discontinuance of the bonus was discriminatorily motivated, the Board has adhered to the remedy adopted in American Fire, and indeed has cited that decision, in cases which did not involve discriminatory motivation. Leeds & Northrup,Zm, 162 NLRB 987; Beacon Journal Publishing Co., 164 NLRB No. 98; Gravenslund Operating Co., supra, 168 NLRB No. 72. I must therefore conclude that the New Orleans remedy has been abandoned by Board sub silencio.' r RECOMMENDED ORDER It is recommended that Respondent, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: "A thou some courts have enforced orders restoring the status quo, others have not. See the collected citations in Beacon Journal Publishing Co v. N.L.R.B., 401 F.2d 366 (C.A. 6). SEATTLE-FIRST NATIONAL BANK (a) Refusing or failing to bargain with the Union concerning the payment of fees for investment services rendered by Respondent to its employees within the appropriate unit represented by the said Union. (b) Unilaterally altering its practice of rendering such investment services to such employees without charge. (c) In any like or related manner interfering with the rights of employees guaranteed in Section 7 of the Act. 2. Take the following affirmative action: (a) Upon request, bargain collectively with the Union concerning the payment of investment service fees by employees in the appropriate unit represented by the Union. (b) Make whole the employees in the appropriate unit for any loss they may have suffered by reason of Respondent's unlawful change in its practice of providing free investment services, in the manner set forth in the section herein entitled "The Remedy." (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all records necessary to analyze the amounts due under the terms thereof. (d) Post at its main office and at each of its branches in Seattle, Washington, copies of the attached notice marked "Appendix."" Copies of said notice on forms provided by the Regional Director for Region 19, shall, after being duly signed by a representative of the Respondent, be posted immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including 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 said Regional Director for Region 19, in writing, within 20 days from the date of the receipt of this Decision and Recommended Order, what steps the Respondent has taken to comply herewith." "If this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words, "the Recommended Order of a Trial Examiner" in the notice. If the Board's Order is enforced by a decree of the United States Court of Appeals, the notice will be further amended by the substitution of the words "a Decree of the United States Court of Appeals, Enforcing an Order" for the words "a Decision and Order." "If this Recommended Order is adopted by the Board , this provision shall be modified to read : "Notify the Regional Director for Region 19, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES 695 Pursuant to The Recommended Order of a Trial Examiner of The National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT refuse, upon request, to bargain collectively with Employees' Association of Seattle-First National Bank as the exclusive representative of the employees in the bargaining unit described herein, with respect to any fees imposed upon such employees for providing them with our investment services in effectuating sales or purchases of securities. The appropriate bargaining unit is: All employees of the Respondent, at its banks in the State of Washington, excluding management trainees, confidential employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act. WE WILL NOT unilaterally change our practice of providing such investment services without charge to employees in the said unit. WE WILL upon request , bargain with Employees' Association of Seattle-First National Bank, as the exclusive representative of all the employees in the said unit, with respect to any fees charged for providing our investment services to such employees. WE WILL make whole the employees in the said unit for any loss they may have suffered by reason of our unilateral change in our practice of providing such investment services without charge to them. WE WILL NOT in any like or related manner interfere with the rights of employees guaranteed in Section 7 of the National Labor Relations Act. Dated By SEATTLE-FIRST NATIONAL BANK (Employer) (Representative) (Title) 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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, Republic Building, 10th Floor, 1511 Third Avenue, Seattle, Washington, 98101, Telephone 583-7473.