Murphy Diesel Co.

MURPHY DIESEL COMPANY Murphy Diesel Company and District No. 10, International Association of Machinists and Aerospace Workers, AFL-CIO. Case 30-CA-960 October 15, 1969 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND ZAGORIA On July 24, 1969, Trial Examiner Ramey Donovan issued his Decision in the above-entitled proceeding, finding that the Respondent had not engaged in certain unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision Thereafter, the General Counsel filed exceptions to the Trial Examiner's Decision and a supporting brief, and the Respondent filed a brief in answer to the General Counsel's brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed The rulings are hereby affirmed The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions,' and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and orders that the complaint herein be, and it hereby is, dismissed in its entirety. In the circumstances of this case, we are satisfied that the Union was aware of the Respondent's intention not to pay a bonus in 1968 if its operations did not return a profit during that year, that the Union had adequate opportunity to apprise itself of the status of profit or Iack thereof, and that the Union was afforded every opportunity to bargain about elimination of the 1968 bonus during the long negotiations for a contract which concluded in November 1968, the Respondent's asserted inability to pay certain demands being in issue, but that the Union did not do so Solely for these reasons, we find that the Respondent did not violate Section 8(a)(5) and (I) of the Act by unilaterally eliminating the bonus for 1968, and there is insufficient evidence to establish that the discontinuance was unlawfully motivated and therefore violated Section 8(a)(3) and (1) TRIAL EXAMINER'S DECISION RAMEY DONOVAN, Trial Examiner The charge in this case was filed by District No. 10, International Association of Machinists and Aerospace Workers, AFL-CIO, herein called the Union, on January 15, 1969. A complaint , under date of February 20, 1969, was issued 149 by the General Counsel of the Board by the Regional Director of Region 30 of the Board The complaint alleges that on or about December 20, Murphy Diesel Company, herein called Respondent, or the Company, discriminatorily withheld an annual Christmas bonus to its unit employees and that, since that date, Respondent has refused to bargain with the Union by reason of Respondent's unilateral elimination of the aforesaid bonus without prior notice or consultation with the Union Such conduct is alleged to have been in violation of Section 8(a)(1),(3), and (5) of the Act. Respondent, in its answers, denies the commission of the unfair labor practices alleged and alleges that the bonus was a gratuity to which no right ensued to the Union and further alleges that the charge was not filed in good faith and also that the Union had acquiesced in the past in Respondent's discontinuance of similar gratuities and that the Union although advised in 1967 that there would be no bonus in 1968 had not requested bargaining thereon. With all parties represented, the case was tried in Milwaukee, Wisconsin, on April 3, 1969.' I JURISDICTION Respondent is a Delaware corporation with its offices and plant located in Milwaukee, Wisconsin. Respondent engages in the manufacture, sale, and distribution of diesel engines During the past year, a representative period, Respondent had sales valued in excess of $500,000. In that same period, Respondent sold and shipped, in interstate commerce, products valued in excess of $50,000 directly to customers located outside Wisconsin Respondent is an employer engaged in interstate commerce within the meaning of the Act and the Union is a labor organization within the meaning of the Act iI. THE ALLEGED UNFAIR LABOR PRACTICES Background Since approximately 1941 Respondent has recognized the Union as the collective bargaining representative in an appropriate unit of its employees, consisting of all employees engaged in production and in maintenance of the plant, including stockroom and shipping employees, but exclusive of foremen, chief inspector, engineering department personnel, tool design engineers, all clerical or office employees, and plant guards During this period, the Respondent and the Union have had a series of collective-bargaining contracts, the most recent of which is for a 2-year period from April 1, 1968 Over the years, various benefits or conditions of employment had been in existence at Respondent's plant From 1947 through 1967, Respondent had paid the bargaining unit employees an annual Christmas bonus The bonus was paid to each unit employee by separate check, a few days before Christmas, and was accompanied by a note from the Company president thanking employees for their cooperation during the year and extending season's greetings The giving of the bonus and the amount thereof was the determination of Respondent 'Subsequent to the hearing, the General Counsel filed a motion to correct the transcript on May 2, 1969 Respondent filed objection to the aforesaid motion The Examiner has read and considered the Motion and the Objection and the transcript of the testimony and hereby grants the Motion as appropriate and in conformity with the facts and utterances at the hearing 179 NLRB No. 27 150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD exclusively The bonus and the amount was not related to individual employee merit, earnings, or related factors The sole criteria used by the Company was whether its business earned a profit during the year and the business did operate at a profit from 1947 through 1966.1 The amount of the bonus was an arbitrary figure determined by the Company according to its own formula. Thus, from 1956 through 1967, unit employees with the Company 6 months to I year received $l5,' unit employees with the Company I year to 2 years received $25,1 unit employees with service of 2 years and over received $35,5 unit supervisors or leadmen received $50 6 In 1967, 123 unit employees received a total of $3,840.' From 1949 to 1954, the amounts of the bonus had been $5, $10, $15, $20, $25 and $35. This was changed by the Company in 1955 when the amounts were $10, $15, $20, $25 and $40, and, in 1956 another change was made by the Company in the amounts as described above for 1956 through 1967 During approximately the same period, 1947 through 1966, the Company gave to all employees, unit and nonunit, a Christmas turkey and a Christmas fruit basket The Company discontinued the turkey and basket after 1966 and did not give them in 1967 or 1968 An annual Christmas party for all employees financed by the Company had been discontinued by the Company about 7 years ago or around 1962. The Company had also financed an annual picnic in the amount of $1,200 for all employees until 1968 In 1968, the Company stated that it would contribute $400 toward the picnic but, when this was not acted upon, the picnic was discontinued. None of the above matters, the bonus, turkeys, fruit basket, party, or picnic had ever been the subject of negotiations between the Union and Respondent or embraced by the contracts, and the various changes made by the Company over the years, as described above, were made by the Company without notice to the Union and without negotiations or request for negotiations, and without grievances or complaints thereon The Company deducted government taxes from the bonus since it was required to do so and had been so advised. Cornwall, assistant secretary of the Company who had been in its employ since 1944, testified that the Company had also made withholding deductions on the turkeys and fruit baskets until there was a change in the law in that regard For at least 15-20 years Respondent had paid its nonunit personnel a sum of money by separate check at Christmas time in December Cornwall characterized the foregoing payment to nonunit employees as a deferred payment The General Counsel in his brief refers to the payment as a Christmas bonus Le Tendre, a witness called by the General Counsel, had worked for Respondent from 1960 to March 1968 as a layout draftsman In such a position he was one of the nonunit employees. He testified credibly that he had been hired by Respondent's assistant chief engineer, Kramer, who at the time of hearing, was the chief engineer. Kramer told Le Tendre when he hired him that Le Tendre would receive 20 percent of his annual wage as a bonus in December of each year. Thereafter, from 1960 through 1967, while Le Tendre was employed by Respondent, the 'The 1967 and 1968 situation is discussed at a later point 'Fifteen employees in 1967 'Twenty-four employees in 1967 'Seventy-nine employees in 1967 'Five in number in 1967 'There were 133 unit employees in 1967 but 10 were ineligible, apparently having less than 6 months service president of the Company came around the plant in December and gave Le Tendre an envelope with a separate check and a Christmas season greeting The check was for 20 percent of Le Tendre's salary for the particular year.' This payment was also made to other nonunit personnel and was a percentage of the individual's salary ' The record contains no precise figures on the annual total payments to nonunit personnel each December but Cornwall's guess was that it would be somewhere in the neighborhood of $75,000, more or less There were approximately 63-65 nonunit personnel The comparable figure for 133 unit employees' bonus in 1967 was, as we have seen, $3,840.11 As contrasted with the definitive statement to Le Tendre, when hired, to the effect that he would receive 20 percent of his annual wage as a bonus, there is the uncontroverted testimony of Becker who retired from Respondent's employ on January 31, 1969 after 32 years of service. At one time he had been a unit employee represented by the Union Becker had been the Respondent's general foreman since 1950 and as such he did the hiring of unit employees in the shop Becker states that in interviewing applicants for employment, if he found a suitable applicant, he would tell the applicant of the various advantages of working for Respondent and the conditions of employment, such as the wage rates, progression, vacation and pension provisions. He never mentioned the Christmas bonus since, he testified, he did not know in his own mind whether or not there would be a Christmas bonus in a particular year - there being nothing in the contract about a bonus In 1967, Respondent experienced its first net loss in its yearly business The net loss was $203,040 as contrasted with a net profit of $204,709 in the preceding year, 1966. In 1968, Respondent's net loss was $356,286 In a sense, the direct operational losses were even more substantial Before taxes, the next earnings in 1966 were $375,709, in 1967 the net loss was $398,040, in 1968 the net loss was $624,286 After taxes, the over-all net profit in 1966 was $204,709, the comparable figure for 1967, due to $195,000 in refunded taxes, was a net loss of $203,040; and for 1968, due to refundable taxes of $268,000, the net loss was $356,286 About the latter part of 1967, around November, steps were taken to negotiate a new contract between the parties The Union submitted a contract proposal to the Company Evidently to set forth its general economic situation as bearing on the upcoming negotiations, Respondent, through Daley, its plant manager, wrote to the Union on December 15, 1967. The letter states. To begin, we are not satisfied with our present economic picture No doubt it is clear in everyone's mind that our shipments of engines dropped steadily since last May Payment comes only from units shipped Many unpleasant things must be done in a situation such as we find ourselves today First expenditures must be drastically reduced This means 'Le Tendre received no such payment in 1968 since he had left in March 1968 and, of course, was no longer employed in December 1968 'Cornwall was uncertain whether or not the percentage figure used in the computation had remained constant over the years or whether different percentages were used in different salary brackets In any event, in the absence of other evidence, we regard Le Tendre's situations as basically typical of the situation of all nonunlt employees and apparently he was called as a witness to illustrate the nonumt situation "At the time of the hearing Respondent employed about 105 unit employees MURPHY DIESEL COMPANY 1 All purchases must be reviewed to allow only the vitally necessary items 2. No new purchases of equipment 3 Items such as the company's annual gift had to be suspended 4. Any increase in cost in any way must be postponed. [The letter then devotes two paragraphs to the economic problem of manufacturing costs and the fact that "our new engines just cost too much to produce"] There is one item of expense that Mr Houston [president of the Company] insisted on, in spite of strong advice against the expenditure, and that is that a Christmas bonus will be given this year However, it should be noted that next year there will be no Christmas gift unless there is a profit [Two paragraphs then discuss means of production improvement and express uncertainty "as to when we can get started on some sound plan of employee benefits in increased wages " Emphasis supplied] Negotiations for a new contract having been initiated, as we have seen, in the latter part of 1967, the parties thereafter met at various times in 1968. Evidently because a central element in the Company's position was its asserted poor financial posture, the matter of the Company's books came up at a meeting between the Union and the Company in February 1968. On this occasion the attorney for the Union examined the Company's books when proferred by the Company. Blumke, an employee of the Company for the past 23 years, a member of the union negotiating committee since December 1967, and a member of the executive board of District 10 and secretary of Lodge 339, testified that he was aware, in February 1968, that the Company had lost money in 1967 and in January and February 1968." Cornwall testified credibly in the Examiner 's opinion, that at a meeting , about March 12, 1968, between the Union and the Company negotiating committee subsequent to the occasion when the Union attorney had examined the Company books, he, Cornwall, had a brief conversation with Blumke. Although the subject of the bonus had not been raised directly in the negotiations, Blumke, apparently with reference to the Company's financial position, said "something to the effect that I suppose this means that the bonus will not be paid" and Cornwall said that, if financial conditions continued as they had been, he guessed that it was correct that the bonus would not be paid ' 2 The prior contract having expired on January 2, 1968, negotiations for a new contract took place from the Fall of 1967 to November 26, 1968, when agreement was reached on the terms of a new contract which was for a 2-year period from April 1, 1968. In the period aforementioned there had been a strike by the Union against the Company that lasted from August 12 to November 26, 1968. Court litigation had been initiated by the Company against the Union regarding the strike. The unit employees did not receive a Christmas bonus in December 1968, or thereafter. The nonunit employees did receive, in December, the 20 percent of their annual wage as in prior years. Other than as described previously, there was no announcement regarding the bonus by the Company to the Union or to employees. Nor had the Union sought to negotiate with the Company regarding the bonus or its status. "It appears evident that the perusal of the books had verified these facts "Blumke testified that he did not recall saying the above but he did not state, although asked, that he did not make such a remark CONCLUSIONS 151 The question of whether a Christmas bonus, given over a period of years by an employer to its employees and not negotiated or covered by contract, is embraced within the terms "wages, hours of employment, or other conditions of employment" under Section 9(a) and Section 8(a)(5) of the Act, is neither novel nor a matter of first impression insofar as the Board and the Courts are concerned. In 1940, the Board considered an employer-union issue that arose in 1938 concerning various employee benefits including paid holidays and Christmas bonuses." The facts in the case were that in 1936 the employer gave a bonus of 2 weeks' pay at Christmas but in 1937 and 1938, respectively, the Christmas bonus was $20 to each employee The Board held that the employer could not remove such matters from the obligation of collective bargaining or treat "such matters as gratuities to be granted and withdrawn at will. ." The Board's decision was enforced by the Court of Appeals 14 Another Court of Appeals, in dealing with Christmas bonuses, cited with approval the Singer decision of the Seventh Circuit as a case where "it was recognized that the payment of a bonus was a subject as to which an employer was bound to bargain collectively upon request" or, in effect, that the bonus constituted a mandatory subject of bargaining." Nor is the basis of or method used in computing the bonus, the determining factor in the conclusion as to whether a Christmas bonus is a bargainable subject ' 6 And the characterization of a benefit or a remuneration as a bonus, gift, or gratuity is not dispositive since the terms of Section 9(a) of the Act embrace "emoluments resulting from employment. . . and "direct and immediate economic benefits flowing from the employment relationship."" Accordingly, it is found that the Christmas bonus to the unit employees in the instant case is within the meaning of, and entailed the legal obligations of, Section 9(a) and Section 8(a)(5) of the Act When a matter, such as the instant unit bonus, is within the coverage of Section 9(a) of the Act, the legal consequence is two-fold, namely, the employer is obliged to bargain with the Union, upon request, about the bonus, and the employer is obligated, as a general proposition, to refrain from acting unilaterally on the bonus, as, for instance, by eliminating the bonus, or by decreasing or increasing the bonus, in much the same manner as unilateral action is proscribed as to an increase or decrease in hourly wage rates or other matters embraced "Singer Manufacturing Company , 24 NLRB 444 "Singer Manufacturing Co v N L R B, 119 F 2d 131 (C A. 7), cert denied 313 U S 595 'N L R B v Niles-Bement-Pond Company, 199 F 2d 713, 714, (C A 2) ""The fact that the amount of the Christmas checks was not related directly to employees ' earnings does not warrant a different result A direct or indirect relationship to other wages may, of course , serve to strengthen employees' reliance, on continuation of the practice and their treatment of the checks or bonus as wages However, this factor is not controlling," [citing Singer Manufacturing Company , supra/ General Telephone Company of Florida, 144 NLRB 311, 313, 314 In Tucker Steel Corp and Steel Supply Co . 134 NLRB 323, the employer for about 10 years from 1946 to 1956 had arbitrarily given its employees Christmas bonuses in such sums as $50, $75 and $100 based on the employer's inclination as to individual employees , in 1956 the employer decided that its prior method was too time consuming and' bonuses of 1 week's salary were given from 1956 to 1960 The type or basis of the bonuses was not a determining factor in the Board's decision that the bonuses were wages and conditions of employment "W W Cross Co v NLRB, 174 F 2d 875, 878 (CA 1) 152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by Section 9(a). In the instant case, the complaint allegation does not aver that Respondent ever refused to bargain with the Union about the bonus upon request, but does allege that Respondent violated Section 8(a)(5) and (1) of the Act by "unilaterally eliminating the Christmas hours" on or about December 20, 1968. It is further alleged that Respondent withheld and failed to pay the Christmas bonus to unit employees in 1968 because of the said employees' membership and activities in the Union, a discriminating action in violation of Section 8(a)(3) and (1) of the Act. As we have seen, in the instant case, the Company, for approximately 20 years, had, unilaterally, initiated, controlled, changed, administered, and given various emoluments and benefits to its employees in the form of turkeys, fruit baskets, annual partys and picnics and Christmas bonuses. We can appropriately characterize the foregoing as employee benefits flowing from the employment relationship Undoubtedly there would be a varying scale of receptivity and appreciation by individual employees towards different items in the foregoing list of benefits A married employee and his wife and six children might rate the annual picnic high in a scale of values. Aside from the intangible aspects of a picnic, it could be translated in monetary terms to the equivalent of a $10 or $15 or more bonus to an employee and his family. In varying degrees, the party would also have a value rating in tangible and intangible terms. This would also be true of the turkeys and fruit baskets. Even in our sophisticated and rather materialistic society benefits from one person to another are more commonly bestowed in the form of things rather than in cash although the recipient may, in his or her own mind, translate the gift coat, watch, or whatever, into terms of its cost to the giver. The ulterior motivated relationship between salesman, sales engineer, on the one hand, and the purchasing agent or buyer, on the other, is commonly characterized by dinner, drinks and entertainment paid for by the salesman rather than the giving of its equivalent in cash to the buyer. We accordingly perceive no essential distinction in the instant case between the party, picnic, turkeys, fruit baskets, on the one hand, and the bonus, on the other, insofar as the respective positions or rights of the employer and the Union are involved with regard to these benefits flowing from the employment relationship. We have therefore a long past history, in the instant case, of the Respondent's exercise of unilateral control over such employee benefits as described above, including bonuses. This past history was not one preceding the advent of the Union and inherited by the Union, where the Union, after its advent, sought to have a voice in such matters or protested changes therein; but rather it is a history of unilateral control of such benefits by Respondent that was exercised without any remonstrance or display of interest on the part of the Union in availing itself of its right to be heard on such matters.18 The Respondent' s unilateral control of these various employee benefits or conditions of employment, with the apparent acquiescence of the Union, included changes in the benefits which culminated in the eventual discontinuance of the turkeys, baskets, party, and picnic at different times. "There is no evidence that the Union 's acquiescence in Respondent's unilateral control was due to a belief that the Union had no right to be heard on such matters Indeed , the only evidence in the instant case as to how the Union regarded the various employee benefits aforementioned is the testimony of a 23-year employee and union officer , Blumke, who Neither the Respondent's unilateral control of the various benefits nor even the unilateral discontinuance of such benefits was of sufficient interest to the Union to give rise to any attempt to discuss such matters with the Respondent. As the various benefits, in turn, were unilaterally discontinued, the Union did not attempt to discuss the future prospects of the remaining benefits or to preserve them by contract incorporation. Eventually, when only the bonus had not been discontinued, the Union was apparently not even then sufficiently concerned to inquire about the future of the bonus or to seek to preserve it by referring to it in the contract. Not infrequently, when a union wishes to preserve some existing employee benefit but does not wish to accord the item the prominence and attention of a separate article in the contract, the Union will propose to the employer that the contract contain a "preservation of existing benefits clause." As the name implies, such a clause simply provides that any existing conditions that inure to the benefit of employees shall remain unchanged during the term of the contract. It is also true that union contracts quite commonly deal specifically with a great many details of the employment relationship when the details are regarded by the Union as sufficiently important. Thus, there may be contract specification that the employer will supply work gloves and a particular kind thereof; there may be details regarding work clothes and their laundering and how many items of such clothing will be furnished by the employer to each employee per week, there may be contract reference to details regarding sanitary facilities, including towels, soap and related items Indeed, union contracts, particularly when a union has been in a particular plant for many years and has had a series of contracts therein, usually cover all matters pertaining to the employment relationship of which the Union and its members are conscious and which they regard as important to them in their relations with the employer, or, at least, there usually will have been an attempt to cover such matters even though on particular items the employer may not have agreed to the proposed contract clause.' 9 This is of course not to say that all bargainable matters must be found in the four corners of the contract since no contract can be so prescient or so all embracing, and since a statutory right to bargain coexists with the contract. However, where, as in the instant case, there were during about 20 years of the Union's incumbency a number of fringe benefits of employment over which the employer exercised unchallanged unilateral control, including the elimination of such benefits, one by one, in various subsequent years, without any attempt by the Union to remonstrate or to participate in decisions or to preserve remaining benefits, there is reason to believe that the Union viewed such benefits as paternalistic vestigia in which it had no interest to participate or to preserve and testified that he regarded the Christmas turkeys, fruit baskets, party, picnic, and bonus "as wages " Wages are surely known to be a bargamable subject Moreover, if a union considers a matter to be important to itself and its members or if it wishes to be heard on certain subject, it will manifest its interest "One of many sound and persuasive "selling" points of a union to employees is that the Union will secure a written contract with the employer that will set forth in black and white the benefits and rights of the employees so that by picking up the contract the employee will know precisely what wages, vacation benefits , protection, and conditions of employment he is entitled to This situation is contrasted to the non-union shop where there is no contract or charter of rights and benefits and where the employee is solely dependent upon the employer's volition MURPHY DIESEL COMPANY 153 regarding which, for whatever reason (either as aforesuggested or for some other reason), it did not wish to bargain or to refer to or to memoralize in any way either in its contract or otherwise. In any event, in our opinion whatever the Union's motivation or the reason for its complete abstention from any aspect of the fringe benefits and for its manifest lack of interest in preserving or negotiating about such benefits, the employer could and did reasonably rely on this long history of union conduct when it eliminated the Christmas bonus as it had previously eliminated, unilaterally, the picnic, the party, the turkeys and the baskets of fruit. SO Apart from other considerations aforementioned but confirmatory thereof is the company letter to the Union in December 1967 This letter was within the ambit of negotiations and collective bargaining since it was written in response to the written contract proposal submitted by the Union for a new contract The General Counsel in his brief states "that Respondent's reference [in December 1967] to the possible elimination of the bonus . [in 1968] was merely a collective bargaining technique . . . this document was submitted by Respondent during negotiations purely as a negotiating position in response to the Union's proposal on various economic matters." The Examiner is aware that in contract negotiations both the Company and the Union are interested parties and that they are each seeking to protect, preserve and advance the interest of their respective constituents. If, as the General Counsel states, the December letter set forth the company's position regarding the negotiations, this was what the law requires There is nothing in this record that would lead the Examiner to conclude that the letter was not written in good faith. The plant manager who wrote the letter was not a witness and there is no other evidence upon which the Examiner can appraise the letter except the letter itself in a company-union background of contractual relations extending over 20 years." The letter impressed the Examiner as rather candid and as written, as it purported to be, by the plant manager of a relatively small company who was using his own language in stating things about which he was well informed. In any event it is a letter setting forth the Company's basic position with a minimum of rhetoric or flourish. The letter refers to the Company's poor and unsatisfactory business picture, a fact later confirmed by the Union's inspection of the '°Cf Tucker Steel Corp and Steel Supply Co , supra The instant case is not the situation of an employer who expressly assured the Union that it had no intention of diminishing fringe benefits, including Christmas bonus checks, and where the Board found that "Respondent's own assurances to the Union and to employees during negotiations effectively preclude it from relying on the Union' s failure to request bargaining on the subject as justification for its unilateral action " General Telephone Company of Florida. supra Here, in contrast , there were no such assurances and a rather clear picture of fringe benefits being eliminated, one by one, and as recently as 1967 and 1968 Moreover, in December 1967, the Respondent had advised the Union of its intention regarding the bonus for 1968 Nor do we perceive any significance to the fact that other fringe benefits that had previously been eliminated applied to all employees Unit employees were as much the beneficiaries as others in the general fringe benefits and presumably had as much interest therein And , of course , if interested, they had reason to be concerned about any benefits Moreover, a principal distinction between represented and unrepresented employees is that the latter, the union represented employees , have a representative who will protect their interest When, therefore, by acquiescence and inaction, in the face of the employer's elimination of various employee benefits , the Union allows the unit employees to undergo the same deprivation of benefits as the nonunit employees, the Union inaction is apparently deliberate and of some significance as a manifestation of the Union's attitude toward such fringe benefits books and by evidence in the instant record The letter states, in substance , that the business stance dictated that "the company's annual gift [the bonus ] had to be suspended" for Christmas 1967 It is then stated that in spite of "strong advice" to the contrary , apparently from the high management officials, the president , Houston, insisted that the Christmas bonus be paid in December 1967 Then follows the flat and definitive statement that the Company's position was, quite apparently including Houston, that "next year 119681 there will be no Christmas bonus unless there is a profit " In short, with a brief "within the family " reference that it was only due to the president's personal intervention that the bonus was going to be given for 1967, despite strong views that business economics dictated its elimination in 1967, the Union was being told that unless the Company operated at a profit in 1968 there would be no bonus in 1968. It is our opinion that the Respondent in the above letter advised the Union of its proposed action regarding the 1968 bonus The Union was thereby afforded a reasonable opportunity to probe, to test , to explore this bargaining subject and to request bargaining thereon including the submission of arguments and counter proposals.22 The General Counsel's characterization of the Respondent's December 1967 letter regarding the bonus as "a negotiating position" is therefore not the fatal imputation apparently intended by the characterization. The Respondent did not confront the Union, as in Citizens Hotel , supra, with a fait accompli. It was incumbant upon the Union, if it wished to negotiate about the bonus, to request such negotiations when the Respondent 's letter advised the Union of the Respondent's intention to discontinue the bonus Perhaps the Respondent would have refused to negotiate about the bonus but it was never put to the test . Throughout months of negotiations the Union never sought to raise, to explore, to negotiate about the bonus . The essence of Section 8(a)(5) of the Act is that the Union shall have a reasonable opportunity to bargain about matters embraced within Section 9(a) of the Act and it is illegal for the employer "to refuse" to bargain on such subjects . The vice in unilateral employer action is that the Union has not been afforded a reasonable opportunity to bargain on the particular matter and instead is confronted with an accomplished fact 21 We do not, in the circumstances of this case , regard the Respondent' s statement about the bonus in its letter as vague and indefinite and thus not qualifying as a statement of Respondent's intention that merited the Union's attention if it wished to bargain about the bonus 2' Nothing has been called to our attention to indicate that the relationship was other than a good , or, at least, a viable relationship "In N L R B v Citizens Hotel Company, 326 U S 501, 505 (C A 5), the employer in October 1961 decided to discontinue its bonus for Christmas 1961 The employer's department heads advised the employees that there would be no bonus that December and apparently signs were posted to that effect Thereafter, when the Union sought to negotiate a contract with the employer, it found itself confronted with a fait accompli insofar as the bonus was concerned The Court found that there had been an "impermissible unilateral change constituting a failure to bargain " The Court observed that "an employer must at least inform the Union of its proposed actions under circumstances which afford a reasonable opportunity for counter arguments or proposals " ""Normally an employer's statutory duty is simply to give notice to and, if necessary , discuss with a union any proposed changes in working conditions As a general rule, an employer is derelict in his bargaining obligation if he alters the established terms and conditions of employment without first notifying the representative of his employees , and, upon request, discussing the proposed change with that representative " Zenith Radio Corporation , 177 NLRB No 30 154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It was clearly stated that there would be no bonus in 1968 unless the Company operated at a profit. Since the letter was in response to the Union's proposed new contract containing various economic demands, the letter described the general business and financial posture of the Company and the picture given was that the business and financial picture was poor Subsequently, in negotiations in 1968, the Union, early in the year, February, examined the Company books and financial records.2d The Union thereby became aware that the Company had lost money in 1967 and that it continued to do so in January and February 1968 In an aside at a negotiation meeting in March 1968, Blumke, a member of the Union negotiating committee, remarked, in effect, that he supposed that the Company's bad financial position indicated that the bonus would not be paid.25 Cornwall, a company official, replied that if financial conditions continued as they were he guessed that it was correct that the bonus would not be paid. Negotiations on the new contract did not terminate until November 26, 1968, when a 2-year contract was agreed upon, to run from April 1, 1968 Since both parties regarded the Company's financial position as relevant and as a matter of interest to them in the negotiations, the Examiner believes that when negotiations concluded near the end of November 1968, the Union was aware that the Company was operating at a loss in 1968 It is true that the record shows simply that the Union looked at the books in February 1968, and ascertained that the Company operated at a loss in 1967 and in January and February 1968. However, since the Company's financial position was in issue, it is extremely unlikely that the Union would not have requested a look at the books again if it, in any way, suspected that the financial picture from March to November 26, 1968, had changed and that latter months would show a profitable operation. When an employer is pleading inability to pay in response to the economic demands of a union, it is fairly obvious that the Union will be keenly attuned to the financial condition of the employer since the Union's bargaining position on economic issues will be enhanced considerably if, in fact, the employer's business and financial posture is good or improved in contrast to the contention of poor business Either the instant union was aware, at least in general terms, that the Company's business and financial position was bad (as was the fact), not only in January and February 1968, but in succeeding months up to November 26 when a contract was agreed upon, or the Union was not interested in whether the Company was operating at a loss, as it had claimed, or whether it was operating at a profit. The Examiner does not believe that the Union was indifferent to the matter of whether the Company's business was as bad in succeeding months in 1968 as it had been in 1967 and in January and February 1968 or whether business had materially improved during the months of succeeding negotiations. In connection with our belief that the look at the company books in February 1968 gave the Union a reasonably representative picture of the state of the Company's financial posture and that the Union continued "Quite evidently the Company was pleading inability to pay and verification of the Company ' s financial position was appropriate "The Examiner is satisfied that the Union and its committee were aware of the contents of the Company ' s December 1967 letter when negotiating commenced Blumke at one point testified that he read the letter only a day or so before the hearing but he also said that in reading the letter its contents came back to him "but how they were given to me by word of mouth or by reading them , I can't answer that truthfully " to be generally aware that 1968 was a financially bad year for the Company, we have also considered the following. The Company manufactures and sells diesel engines The Union represented all the Company's production and maintenance employees including shipping room employees who numbered overall about 105 26 In a plant of such size, manufacturing relatively large units like diesel engines, the employees manufacturing the engines will have a fairly good general idea of the volume of work being performed, including the number of units being shipped daily, weekly, or monthly They will not have an accountant's information or precise balance sheet figures of profit and loss but they will have a general basis of knowing whether the plant is doing more or less business at particular periods or whether business is about the same as it was last month or last year and so forth For instance, the Union knew that the Company's business was bad in 1967 and in January and February 1968 A member of the Union negotiating committee was a production employee at Respondent's plant and had been such for 23 years In our opinion, the Union and the employees it represented knew generally how many units the Company was manufacturing and shipping in 1967 and in January and February 1968 when the Company was operating at a loss They knew that there were about 30 fewer unit employees in 1968 than in 1967 If there were approximately 105 production unit employees in February 1968, the employees and the Union would know if in March-November the Company had hired 10, 20, 30, 40 or 50 additional production employees or whether the complement remained at 105 or decreased; they would be aware of any material increase in overtime or whether it remained as it had been in January or February or whether it decreased; they would be aware if, in January and February, they had manufactured and shipped 50 engines a week, they were manufacturing and shipping approximately 40, 50, 60, 70, or 100 units a week in March-November 1968. In short, we believe that the Union did not request to see the Company books after February 1968, because it knew generally that business was as bad or worse from March-November 1968. Further confirmation of this conclusion is found in the fact that the Company's direct operational loss in 1968 was $624,286 as compared with a loss of $398,040 in 1967, and a profit of $375,709 in 1966. Such a substantial operational loss in 1968 as compared with even the loss of 1967 must have been reflected in the actual day-to-day work in the plant and, in our opinion, the employees and the Union were generally aware that, since, in 1967 the Company had operated at a loss, it was certainly not improving in 1968 With regard to the specific matter of the bonus on which the Company had informed the Union that there would be no bonus in 1968 unless the Company operated at a profit, the Union did not avail itself of the opportunity to bargain or to request bargaining on the matter Although for reasons previously stated, we believe that when the parties reached agreement on a contract on November 26, 1968, the Union was generally aware that the Company in 1968 was not operating at a profit, we will assume, arguendo, that the Union did not know whether or not the Company was operating at a loss or a profit In view of what the Company had told the Union of its intentions regarding the bonus, we believe that if the Union was interested in bargaining on the subject and protecting the interest of its members by being informed "Unit and nonunit employees together apparently totaled less than 200 MURPHY DIESEL COMPANY 155 as what might occur to the bonus, it would have raised the subject during negotiations including counterproposals and arguments, and if unsuccessful in changing the Company's intention, the Union could have made an inquiry, at least by November 1968, as to whether or not the Company had been earning a profit, if the Company had said it was not, the Union could have verified the assertion by a look at the books We believe that the Act in protecting the right of a union to bargain with an employer, envisages an opportunity to bargain and to request bargaining but that this right entails that the Union exercise some degree of reasonable diligence in availing itself of its right We do not find on the facts in this case that Respondent in eliminating the bonus refused to bargain with the Union by illegal unilateral action and we recommend dismissal of the Section 8(a)(5) and ( 1) allegation of the complaint. Before going on to another aspect of the case, we will discuss a contention of the General Counsel regarding the foregoing Section 8(a)(5) matters. Early in the hearing Cornwall testified that the 1965 bonus was not paid to the unit employees "based on the fact that the Company lost money." When asked as to when this decision was made, Cornwall said he was "guessing" but "I would say [it] probably would be towards the end of the year, yes", probably in November-December 1968 "because it would be at that time the final figures would be available " The witness said he was referring to the financial figures of the Company's operations in 1968 The General Counsel then asked the witness whether it was not true that, after this decision in November-December 1968, the Company eliminated the bonus in December 1968, "without advising the Union " Cornwall replied that "they [the Union] were not advised at that time [in November-December 1968] They had been advised prior to that time [by the letter of December 1967]." Based on this evidence, the General Counsel asserts in his brief that since the decision to eliminate the bonus was not made until November-December 1968, the Respondent cannot maintain that it had advised the Union of its intention or decision to eliminate the bonus prior to the time that it made its decision. We are not persuaded by this argument of the General Counsel for several reasons. The Company definitely advised the Union in December 1967, that there would be no bonus in 1968 unless there was a profit. There was no "maybe" or "perhaps." It was a simple equation of profit-no profit'no bonus. There is no evidence that the announced decision of December 1967 was ever reconsidered, or that the Company was debating whether the decision was still in full effect between December 1967 and November-December 1968 or that the Company was uncertain as to whether it would implement the decision The only "decision" made in 1968 regarding the bonus was to look at the financial picture of the Company for 1968 to see or to confirm that the Company had not operated at a profit for the year. This financial picture evidently was clear by at least the end of November and before Christmas 1968. The basic decision not to pay the bonus unless there was a profit had been made in December 1967, and the Union had been so advised at that time. The condition (profit or no profit) specified in the December 1967 letter was simply verified in the latter part of 1968 and the 1967 decision or intention was implemented in the latter part of 1968 after checking financial figures for the year. The Company would have been derelict if it discontinued the bonus without verifying that its own specified condition for the elimination of the bonus did in fact exist The situation may be compared to that in a school or college where the administration decided and issued a bulletin, in September 1967, that no member of the senior class would receive his diploma and be graduated in June 1968 unless his average for the year was "C" or better. In June 1968, 10 seniors did not receive diplomas and are not graduated They retain an attorney and some kind of a hearing is held on the matter At the hearing the assistant dean is asked by the complainants' attorney when the decision was made that the 10 named seniors would not graduate. The witness replies that on June 1, 1965, 2 weeks before graduation the names of all seniors and their averages for the year were listed Those whose averages were below "C" were eliminated from the list of graduates. The attorney for the complainants then argues that the decision not to graduate the 10 seniors was made on June 1, 1968, only 10 days before graduation and that such a last minute decision was obviously unfair and unilateral and without adequate notice In the Examiner's opinion, in the foregoing illustration , the basic decision was made in September 1967 as announced in the bulletin . In June 1968 , the prior decision was simply implemented by checking and verifying which students did not meet the condition set forth in the September 1967 bulletin, namely a "C" or better average for the academic year. We come now to the allegation that Respondent discriminatorily eliminated the unit employees' bonus because of their membership in and activities on behalf of the Union. There is, first of all, no separate Section 8(a)(1) evidence in the record that Respondent is an anti-union employer opposed to unions, union membership, or union activities. Instead there is a history of over 20 years of collective bargaining and contractual relations with the instant Union. The General Counsel's position , as we understand it from his brief, is that for over 20 years the Respondent paid a bonus to unit employees and non unit employees and that by withholding the bonus from the unit employees in 1968 but continuing to pay the bonus to the nonunit employees, "Respondent was directly discriminating against the employees represented by the Union." Further, it is asserted, that, in the past, when Respondent eliminated benefits such as the turkeys, baskets, party, and picnic, unit and nonunit employees "were affected equally." Finally, the General Counsel believes that Respondent's action is "suspect" because the bonus was eliminated approximately a month after the employees returned to work after their 3 month strike ended in November 1968. In a case such as this, where the parties have had a long and well established collective bargaining relationship, discriminatory motivation is not to be inferred lightly. By the same token, the long history cannot serve as a shield if the evidence does establish discriminatory conduct. The General Counsel's argument or implication that the elimination of the bonus a month after the 1968 strike ended indicates that it was discriminatory, presumably a reprisal for the strike, is not persuasive although we do not ignore the possibility. In our opinion , the evidence indicates that in December 1967, the 1967 bonus was almost eliminated within management's internal decisional process, and was paid only at the insistence of the president But, in the same context in December 1967, the Company stated unequivocally to the Union that the 1968 bonus would not be paid unless there was a profit for the year. This was about 8 months before any strike or, as far as appears, any mention of a strike Subsequently, the 156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Company did not operate at a profit in 1968 but at a substantial loss We therefore regard the argument that the timing of the elimination of the bonus after the strike indicated discrimination as unpersuasive The bonus was eliminated pursuant to a decision or an intention adopted well before and unconnected with the strike The fact that in the past, when Respondent eliminated the turkeys, baskets, party, and picnic, unit and nonunit employees were equally affected and all were deprived of these fringe benefits, stems from the fact that all the employees received the turkeys and so forth and when such benefits were eliminated all employees were deprived It would be something else if the Company continued to give the benefits to the non-unit employees while eliminating them as to the unit employees. As to the bonus situation, it is true that both groups of employees received an extra check at Christmas, generally referred to as a Christmas bonus The unit bonuses were $15, 25, 35, and 50 As we have seen, these bonuses bore no relationship to wages or salary and only related to length of service in a very limited way." If the non-unit employees received the same bonuses of $15 to $50 on the same basis as the unit employees or even if the bonuses were approximately similar, we might have a different situation before us However, the evidence is that the nonunit bonus was comparatively substantial and related directly to individual salary. On representative evidence in the record we use the figure for the nonunit bonus as being 20 percent of the individual's salary A nonunit employee such as Le Tendre, a draftsman, received 20 percent of his yearly salary as a bonus at Christmas He was told that he would receive the foregoing when he was hired and he did receive it every year he worked for the Company. Let us assume that Le Tendre was told that his salary was $6,500 and that he would receive 20 percent of his salary as a bonus in December. What did Le Tendre and his wife consider his salary to be and what, in fact, was it' In our opinion, it was $7,800 per year And, if during his 6 years with the Company, his salary was increased to $7,500, he was then earning $9,000 Assume that when Le Tendre started to work for the Company, the prevailing pay for draftsmen in the area was $7,500-7,800 per year Presumably, Le Tendre might not have accepted a salary of $6,500 from Respondent but he might have been quite willing to work for $7,500 Very little arithmetic was required to understand that Respondent would pay and was paying $6,500 plus 20 percent or $7,800, the prevailing wage If Respondent, who was evidently, paternalistically inclined, wished to tell Le Tendre that his salary was $6,500 but that Respondent would give him 20 percent of his salary as a Christmas check, that was presumably agreeable with the employee and others similarly situated However, if instead of the foregoing situation, assume that the prevailing wage for draftsmen in the area was $6,500. The Company informs Le Tendre that he will receive $6,500 plus 20 percent of this salary every December. In such a posture, Respondent, unlike in the first example, above, is paying its draftsmen $1,300 more than the prevailing wage In short, all its nonunit employees, perhaps 40 percent of its total complement, would be receiving salaries that were 20 percent above the prevailing rates for personnel in their classifications. We think it unlikely that an employer in an industrial area and in a competitive business was paying a "The criteria were 6 months to 1 year, $15, 1 to 2 years, $25, 2 years or more, $35, group leaders, $50 large group of its employees 20 percent more than the prevailing wage It is more likely that the situation was more of the nature of the first example that we gave above and that the 20 percent represented deferred wages which, when added to the regular weekly or monthly salary, gave the recipient the prevailing wage, give or take a little above or a little below or the same In any event, Respondent states that the 20 percent Christmas check to its nonunit employees represented deferred wages. While this alone does not establish the fact, we perceive nothing in the record to lead us to a different conclusion. Twenty percent of salary is a rather substantial figure, it is directly related to the wage or salary, it was, in our opinion, wages or salary and since it was not paid until December, it is appropriately described as deferred. The unit employees' bonus, on the other hand, was minimal, probably less than 1 percent of an employees' wage Although the Union had negotiated with the Company for over 20 years about wages and other items and had wage and related provisions in its contract, it never discussed or had anything in its contract about the bonus. If the Company was paying the prevailing union rate over the years but wished to defer 20 percent (or even 5 or 10 percent) of the wages until December so that such 20 percent of the wages could be called a Christmas bonus, the Union probably would not have agreed but, if it did, it certainly would have included this and all other aspects of wages in the contract. The unit bonus had remained unchanged for over 10 years despite inflation and the increase in wage rates The nonunit 20 percent "bonus," however, increased over the years since it was geared to increasing salaries, the latter increasing both under inflationary pressure and in accord with individual increases and promotions In our opinion, the nonunit employees' 20 percent bonus constituted wages and, quite evidently, deferred wages Elimination of the 20 percent of salary, since salary was for all practical purposes salary plus 20 percent thereof, would mean a 20 percent cut in salary. We doubt that any Company or any employees would regard such a cut as feasible or acceptable in this inflationary period The unit employees' bonus, in our opinion, did not constitute wages and was not regarded as wages by the Union and that is apparently why the Union never sought to negotiate about the bonus and to have it increase to keep abreast with inflation and other wage increases or to preserve it by incorporation in any wage contract clause. The unit bonus was, as we stated earlier, a benefit or emolument arising out of the employment relationship, a condition of employment, about which the Union could have bargained but did not choose to do so We are not attempting to propound or to argue the merits of contentions that might be made between the Union and the Company if the Union had chosen to negotiate about the bonus and to argue why the Company should do one thing or another about the unit bonus in relation to the Christmas checks to the nonunit employees We are simply examining the two bonuses to see whether the Company, as it claimed, did have a reasonable basis for regarding the two bonuses as of a different nature and whether it is credible that the Company acted for nondiscriminatory reasons. And this for the reason that the complaint allegation is that the Company paid one bonus but discontinued the other because the recipients of the latter were in the Union, were represented by the Union, and had engaged in a strike against the Company In short, the elimination of the unit bonus is alleged to have been discriminatory. MURPHY DIESEL COMPANY On the evidence in this record , we do not find that the elimination of the unit bonus was discriminatorily motivated Nor do we find illegal discrimination by imputation irrespective of motive 11 We recommend dismissal of the complaint allegation that Respondent violated Section 8(a)(3) and (1) of the Act CONCLUSIONS OF LAW For the reasons stated hereinabove Respondent has not violated Section 8(a)(1)(3) and (5) of the Act. RECOMMENDED ORDER It is recommended that the complaint be dismissed. 157 "In some situations , "proof of intent is unnecessary where employer conduct inherently encourages or discourages union membership " and in such situations " the employer could not , without violating Section 8(a)(3), discriminate in wages solely on the basis of such [Union] membership " Radio Officers Union (Gaynor News ) v N L R B, 347 U S 17, 45, 47 In the instant case, the evidence does not show that union membership or activities were the reasons for the elimination of the bonus