Murphy Motors, Inc.

MURPHY MOTORS, INC. Murphy Motors, Inc. and American Federation of Professional Salesmen. Case 13-CA-8809 August 13, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND ZAGORIA On June 9, 1969, Trial Examiner William W. Kapell 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 and the General Counsel filed a cross-exception and an answering brief. The Respondent filed a reply to brief of General Counsel.' 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, cross-exception and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations= of the Trial Examiner with the exception noted below. 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, as modified below, and hereby orders that the Respondent, Murphy Motors, Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Decision, as herein modified: 'The General Counsel's motion to strike Respondent 's reply to brief of General Counsel is hereby denied as lacking in merit. 'The General Counsel excepted to the failure of the Trial Examiner to provide that the year of the Union's certification be extended to begin on the date the Respondent commences to bargain in good faith with the Union as the statutory bargaining representative in the appropriate unit in accordance with Mar-Jac Poultry Company, Inc., 136 NLRB 785; Commerce Company d/b/a Lamar Hotel, 140 NLRB 226, 229, enfd. 328 F.2d 600 (C.A. 5), cert . denied 379 U.S. 817; Burnett Construction Company, 149 NLRB 1419, 1421, enfd . 350 F.2d 57 (C.A. 10). We find merit in this exception . Accordingly , the remedy is hereby revised to provide for such extension in the certification year in order to insure that the employees in the appropriate unit will be accorded the services of their elected bargaining agent for the period normally accorded for this purpose. 15 Add as the second indented paragraph of the notice the following: WE WILL, upon request, bargain collectively with American Federation of Professional Salesmen, as the exclusive representative of all employees in the unit found appropriate, for purposes of collective bargaining with respect to wages, hours, and other terms and' conditions of employment, as provided in the Board's Decision and Order, and, if an understanding is reached, embody such understanding in a signed agreement. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE WILLIAM W. KAPELL, Trial Examiner: Case 13-CA-8809, a proceeding under Section 10(b) of the National Labor Relations Act, as amended, herein called the Act, was heard in Chicago, Illinois, on April 24, 1969, with all parties participating pursuant to notice on a complaint' issued on January 29, 1969, by the Regional Director for Region 13 of the National Labor Relations Board, hereinafter called the Board, alleging violations of Section 8(a)(1) and (5) of the Act by Murphy Motors, Inc., hereafter called Respondent or Company. The complaint, as amended at the hearing, in substance alleges that Respondent has refused to bargain collectively with the Union, the duly certified bargaining representative of its employees in an appropriate unit, with respect to the terms and conditions of their employment, and has unilaterally changed and modified certain specified preexisting terms and conditions of their employment. In its duly filed answer, Respondent denied the commission of any unfair labor practices or that the Union is a labor organization within the meaning of Section 2(5) of the Act, and pleaded that, at all times material herein, the Union and its officers were engaged in a conspiracy to restrain trade and commerce in violation of the Sherman Act, and that it will not effectuate the purposes of the Act to accord the Union any relief thereunder. All parties were accorded full opportunity to be heard, to introduce relevant evidence, to present oral argument, and to file briefs. Respondent and the General Counsel filed briefs which have been duly considered. On the entire record' in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. COMMERCE, At all times material herein, Respondent has maintained its principal office and place of business in Chicago, Illinois, where it has been engaged in the retail distribution and repair of automobiles, trucks, and related products. During the calendar year 1968, the Respondent, in the course and conduct of its business operations, sold and distributed automobiles, trucks, and related products valued in excess of $500,000, of which products valued in excess of $100,000 were shipped to its place of business 'Based on a charge filed on December 19, 1968, by American Federation of Professional Salesmen , hereafter referred to as the Union. 'Pursuant to General Counsel's unopposed motion , the date of "10/26/69" appearing on p. 26, 1. 3 of the transcript is corrected to "10/26/68". 178 NLRB No. 9 16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly from locations outside the State of Illinois. Respondent admits , and I find , that at all times material herein, it has engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 11. THE LABOR ORGANIZATION INVOLVED As indicated above, Respondent denied that the Union is a labor organization within the meaning of Section 2(5) of the Act. It was stipulated during the hearing that the Union herein is the same organization which was involved in several prior Board proceedings' in which the Union was found to be a labor organization within the meaning of the Act, notwithstanding claims that it was not a bona fide labor organization and was engaged in violation of the Sherman Act. Furthermore, as appears in Case 13-RC-11494, a related representation proceeding involving the Union and Respondent, the Regional Director found the Union to be an organization in which employees, participate for the purpose of dealing with employers concerning wages, hours, and other terms and conditions of employment, and therefore a labor organization within the meaning of Section 2(5) of the Act. Following a Board-conducted election, the Regional Director, on August 1, certified the Union as the collective-bargaining representative of an appropriate unit of Respondent's employees. Thereafter, following the issuance of a Hearing Officer's report of a contested hearing involving the resolution of a challenged ballot, to which no exceptions were filed, the Board, on December 11, 1968,' issued an order affirming the certification of representative issued by the Regional Director. It would serve no useful purpose to reiterate or expound further the grounds on which the foregoing rulings were based, and as anticipated by Respondent, I find that the Union is a labor organization within the meaning of Section 2(5) of the Act.' III. THE ALLEGED VIOLATIONS OF SECTION 8(a)(5) A. The Failure of Respondent to Bargain with the Union As related above, the Union, following a representation proceeding, was certified as the collective-bargaining representative of a unit of Respondent's employees composed essentially of automobile and truck salesmen. It was stipulated that on August 17, the Union made written request of Employers Association of Greater Chicago, of which Respondent is a member, to bargain on behalf of Respondent, and on November 30, 1968, and January 23, 1969, similar requests were made directly of Respondent, but that no replies were received. Although Respondent attacked the validity of the election and certification in the related representation proceeding, the Board affirmed the certification issued by the Regional Director. It is settled policy of the Board that in the absence of newly discovered evidence, previously unavailable evidence, or "'Z" Frank, Inc.. 172 NLRB No. 254 ; Bonk Motor Sales, Inc., 173 NLRB No. 155 ; and Schmerler Ford, Inc., 175 NLRB No. 90. All dates hereafter refer to the year 1968 unless otherwise noted. 'Respondent stated at the hearing that in its answer it denied the Union was a labor organization and alleged it was engaged in a conspiracy to restrain trade and commerce in violation of the Sherman Act in order to preserve its pcsition on ultimate review that the Union was not entitled to any relief under the Act because its purpose was to effectuate an unlawful price-fixing agreement among the auto dealers in the area . The Board rejected those defenses in the cases cited above. special circumstances, issues concerning representation may not be relitigated before a Trial Examiner in an unfair labor practice case, which were or could have been litigated in the prior related representation proceeding.' The basic issue is whether Respondent was justified in failing to respond to the requests of the Union to meet and bargain . In view of the Board 's order affirming the Union's certification , and in the absence of tht, submission by Respondent of any new or previously unavailable evidence or special circumstances, I find that Respondent unlawfully ignored the Union's request to bargain in violation of Section 8 (a)(1) and (5) of the Act. B. The Alleged Unlawful Unilateral Actions of Respondent The complaint, as amended, alleges that Respondent unilaterally and without either notifying or affording the Union an opportunity to bargain, changed existing terms and conditions of employment of its employees by (a) on or about October 1 reducing their percentage of commissions on financial reserves' and insurance placed on cars sold, (b) on or about October 20 increasing the number of consecutive Sundays they were scheduled to work, and (c) on or about November 18 increasing the total number of hours they were scheduled to work. John Murphy, Jr., Respondent's president, testified that prior to October 1, company salesmen received 10 percent of the financial reserve and since that date the percentage has been reduced to 5 percent. Concededly, Respondent did not consult with the Union concerning the reduction. A similar reduction was also effected on the commissions for placing the insurance on cars sold. Murphy explained that prior to initiating the reductions on these commissions, the salesmen were required to perform the tasks of obtaining credit statements, shopping for insurance, and other work incidental thereto. Concurrent with the reductions, a new employee was hired by the Company to relieve the salesmen of the work previously involved in connection with the financing and insurance on car sales. Under this arrangement, the new employee was able to devote all his time on deals, especially those which on their face seemed uninsurable, and successfully completed many that formerly might not have been completed. Also, as a result, the salesmen were able to devote more time to selling cars and their income was thereby increased. Murphy, however, did not deny that the increases in the income of salesmen since the previous October could have been attributed to a seasonal factor, such as the advent of a new car model, and stated that corporatewise company sales were up. Joseph Bartoli, a salesman for Respondent since 1967, testified without contradiction that on October 20, Respondent instituted a new schedule of Sunday workdays, which required each salesman to work on four out of every five Sundays, whereas previous to that time each salesman was off every other Sunday. He testified further that on November 18, Respondent put into effect a new schedule of afternoon work hours pursuant to which salesmen were required to work from 2 p.m. to 9:30 p.m. on those days in which they had previously been required to work only from 4 to 9:30 p.m. Merlin Griffith, the 'National Labor Relations Board's Rules and Regulations, Series 8, as amended, Sec. 102.67(f) and 102 .69(c); and Clark's Discount Department Store, 175 NLRB No. 53. "'Financial reserve" is the profit accruing to Respondent for arranging the financing of a sale of a car by a bank on behalf of a purchaser. MURPHY MOTORS, INC. general secretary-treasurer of the Union , testified that the Union was never consulted about the changes in the work schedules for the salesmen. Conclusions The critical questions herein are whether the unilateral changes in commission compensation to the employees and/or the changes in their schedules of weekday hours and Sunday work were reasonably within the bargaining negotiations between the parties, and therefore required Respondent to notify the Union and afford it an opportunity to bargain concerning them. Respondent sought to justify these changes on the ground that they were matters concerning day-to-day operations of a de minimis character and wholly within the managerial rights of management . Yet, Respondent testified that the changes were considered over a period of several months before being adopted and implemented . Apparently, they were regarded as of such reorganizational importance as to require prolonged consideration . I find that these changes constituted material and significant modifications of the preexisting terms and conditions of employment. Although Respondent had the right to determine the need for a reorganization of its operations along more profitable and efficient lines, the Act imposed upon it the obligation to notify the Union of them , and to afford it an opportunity to negotiate concerning changes in the plan itself and the manner and timing of its implementation. Moreover, Respondent did not show any circumstances indicating that it was faced with an emergency requiring immediate action. Rather, Respondent deliberately determined , as a voluntary assertion of its own alleged prerogatives, that it would unilaterally effectuate the changes in its operations . Even accepting Respondent's contention that they were instituted solely for the economic purpose of augmenting profits and eliminating inefficiency , there were many questions which might probably have been the subject of collective bargaining if Respondent had not foreclosed bargaining by its unilateral action . As the Supreme Court remarked in Fibreboard Paper Products v. N.L.R.B. 379 U.S. 203, 214, cost-cutting decisions , even though not motivated by discriminatory consideration , are "suitable for resolution within the collective bargaining framework ," and "it is not necessary that it be likely or probable that the union supply a feasible solution but rather that the union be afforded an opportunity to meet management's legitimate complaints ...... Respondent also contended in justification of the changes in commissions that they resulted in increased earnings to the employees, but the evidence fails to substantiate that claim . Even assuming increases in earnings to employees following the changes in the commissions , they could just as well be attributed to an upsurge in sales concurrent with the advent of a new car model or to extension of the working hours prescribed by Respondent. In fact, the evidence does not establish whether the overall effect of the changes in the commissions has been to the detriment or benefit of the employees . I also find no merit in Respondent's contention that the increases in required hours and days of work were de minimis. Increasing a daily work period by 2 hours and requiring the salesmen to work on four out of every five Sundays instead of every other Sunday , patently constitute material and substantial changes in employment. Consequently, the substantial increases in the required number of weekday working hours and 17 Sunday work, regardless of whether the employees previously voluntarily worked longer hours than required, were mandatory subjects of collective bargaining, and their unilateral implementation deprived the Union of its bargaining rights. Accordingly, I conclude and find that Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally effectuating changes in the commissions paid to employees and their required hours and days of work . N.L.R.B. v. Katz , d/b/a Williamsburg Steel Products Co., 369 U.S. 736. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON , COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with the Respondent's operations described 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 foregoing findings of fact and upon the entire record , I make the following: CONCLUSIONS OF LAW 1. At all times material herein, Respondent has been engaged in commerce as an employer within the meaning of Section 2(6) and (7) of the Act. 2. At all times material herein , the Union has been a labor organization within the meaning of Section 2(5) of the Act. 3. Pursuant- to an election by secret ballot conducted by the Board, the Union has been certified at all times material herein as the exclusive bargaining representative of the employees in the following unit. All automobile and truck salesmen employed at the Employer's Chicago , Illinois location, excluding office and plant clericals, automobile mechanics, semi-skilled help, parts department employees , guards and supervisors as defined in the Act and all other employees. 4. At all times material herein , the Union has been and has remained the exclusive bargaining representative of the aforesaid employees for the purpose of collective bargaining in respect to wages, hours, and terms and conditions of work within the meaning of Section 9(a) of the Act. 5. The Union, since on or about August 17, has duly requested Respondent to bargain with it as exclusive bargaining representative pursuant to the aforesaid certification. 6. At times material herein , Respondent has refused to bargain upon request with the Union, and unilaterally and without notice or affording the Union an opportunity to bargain, changed the percentage of commissions paid to employees for arranging the financing and placing of insurance on cars sold by them and also changed the schedules of daily hours of work prescribed for employees and the number of Sundays worked by them, thereby violating Section 8(a)(5) and (1) of the Act. THE REMEDY Having found that Respondent has unlawfully refused to bargain with the Union, I shall recommend that it cease and desist therefrom and take certain affirmative 18 DECISIONS OF NATIONAL LABOR RELATIONS BOARD action designed to effectuate the policies of the Act. Having found that Respondent refused to bargain by unilaterally changing the percentage of commissions previously paid to employees for arranging the financing and placing of insurance on the sale of cars, I shall recommend that Respondent reinstate the status quo ante by restoring the commission rates in effect prior to such unilateral action, retroactive to the date when changed, and pay backpay to all employees in the unit since that date, in an amount equal to the difference, if any, between the commissions paid them and the amounts that they would have received had the commission rates not been unilaterally changed. Having found that the hours of weekday and Sunday work have been unilaterally changed, I shall recommend that Respondent reinstitute the schedules of weekday hours and Sunday work in effect prior to their changes. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law and the entire record in the case, I recommend that Murphy Motors, Inc., its officers, agents, successors, and assigns , shall: 1. Cease and desist from: (a) Refusing to bargain collectively with American Federation of Professional Salesmen as the exclusive bargaining representative of All automobile and truck salesmen employed at the Employer's Chicago , Illinois location, excluding office and plant clericals, automobile mechanics, semi-skilled help, parts department employees, guards and supervisors as defined in the Act and all other employees. with respect to rates of pay, wages, tenure of employment, other conditions of employment, and effectuating unilateral changes in wages or other working conditions. (b) Interfering with, restraining, or coercing employees in any like or related manner in connection with the exercise of the right to self-organization, to form labor organizations, to join or assist American Federation of Professional Salesmen, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a)(3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action which will effectuate the policies of the Act: (a) Upon request, bargain collectively with American Federation of Professional Salesmen, as the exclusive representative of all employees in the unit found appropriate, for purposes of collective bargaining with respect to wages, hours, and other terms and conditions of employment, and, if an understanding is reached, embody such understanding in a signed agreement. (b) Revoke the unilateral changes in commissions and schedules of daily and Sunday work assignments instituted on and after October 1, 1968, and revert to the commissions and scheduled hours and days of employment existing immediately prior to said date. (c) Make whole the employees in the appropriate unit for loss of pay, if any, they may have suffered by reason of the unilateral changes in commission as set forth in the section of this decision entitled "The Remedy." (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 to analyze the amount of backpay due under the terms of this Recommended Order. (e) Post at its plant in Chicago, Illinois, copies of the attached notice marked "Appendix."' Copies of said notice, on forms provided by the Regional Director for Region 13, after being duly signed by Respondent's representative, shall be posted by Respondent 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. (f) Notify the Regional Director for Region 13, in writing, within 20 days from the receipt of this Decision, what steps have been taken to comply herewith.' '1n the event that 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. In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order" shall be substituted for the words "a Decision and Order." '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." APPENDIX NOTICE TO ALL EMPLOYEES 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 to bargain collectively with American Federation of Professional Salesmen as the exclusive bargaining representative of all our employees in the following appropriate unit: All automobile and truck salesmen employed at the Employer's Chicago, Illinois location, excluding office and plant clericals, automobile mechanics, semi-skilled help, parts department employees, guards and supervisors as defined in the Act and all other employees. WE WILL revoke the unilateral changes on commissions on the financing and placing of automobile insurance on the sale of cars instituted on and after October 1, 1968, and revert to the commissions existing immediately prior to that date. WE WILL revoke the unilateral changes in the schedules of daily and Sunday work assignments instituted on and after October 20, 1968, and revert to the schedules of hours and Sunday work existing immediately prior to that date. WE WILL make whole the employees in thej appropriate unit for loss of pay, if any, they may have suffered by reason of the unilateral changes in commissions effected on and after October 1, 1968. MURPHY MOTORS, INC. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the right to self-organization, to form, join, or assist American Federation of Professional Salesmen, or any other labor organization, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a)(3) of the National Labor Relations Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. MURPHY MOTORS, INC. (Employer) Dated By 19 (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, 881 U.S. Courthouse and Federal Office Building, 219 South Dearborn Street, Chicago, Illinois 60604, Telephone 312-353-7570.