Wrought Washer Manufacturing Co.

WROUGHT WASHER MFG. CO. 75 Wrought Washer Manufacturing Co. and United Steelworkers of America, AFL-CIO. Case 30-CA-997 May 24, 1972 DECISION AND ORDER By CHAIRMAN MILLER AND MEMBERS JENKINS AND PENELLO On June 24, 1970, Trial Examiner William F. Scharnikow issued his Decision in the above-entitled proceeding, finding that the Respondent had en- gaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in the case, and finds merit in certain of Respondent's exceptions. The Trial Examiner found that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally instituting and maintaining a new wage incentive plan modifying the wage incentive provi- sions of the collective-bargaining agreement. In so finding, the Trial Examiner rejected Respondent's claim that the dispute was essentially one for resolution by an arbitrator under the applicable grievance procedure. The collective-bargaining agreement contains a grievance procedure culminating in final and binding arbitration, and the Respondent and the Union have agreed to submit disputes over the meaning and application of the collective-bargaining agreement to that grievance procedure. This case involves alleged unilateral changes in the existing incentive provisions of the collective-bargaining agreement and centers on the meaning of those provisions and whether Respondent has gone beyond them. Thus, the dispute herein involves the meaning and application of a provision of the collective-bargaining agreement and is a matter which the parties have voluntarily agreed to resolve by means of the grievance proce- dure.' For these reasons, we shall not consider the merits of the dispute at this time but shall defer to the parties' grievance procedure.2 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board orders that the complaint herein be, and it hereby is, dismissed; provided, however, that: Jurisdiction of this proceeding is hereby retained for the limited purpose of entertaining an appropri- ate and timely motion for further consideration upon a proper showing that either (a) the dispute has not, with reasonable promptness after the issuance of this Decision, either been resolved by amicable settle- ment in the grievance procedure or submitted promptly to arbitration, or (b) the grievance or arbitration procedures have not been fair and regular or have reached a result which is repugnant to the Act. MEMBER JENKINS, dissenting: For the reasons set forth in Member Fanning's and my dissents in Collyer Insulated Wire, 192 NLRB No. 150, and for the reasons stated in the decision of the Trial Examiner,3 I think the Board neither can nor should require the issue of violation of Section 8(a)(5) of.the Act to be determined by an arbitrator instead of this Board. Therefore, I would proceed to the merits of the case. I In fact, the matter was the subject of a grievance, but it was not taken to arbitration 2 Collyer Insulated Wire, A Gulf and Western Systems Co, 192 NLRB No. 150 3 The Trial Examiner's misunderstanding of my position, and the Board's decision, in Jos Schhtz Brewing Company, 175 NLRB 141, was corrected in my dissent in Collyer TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE WILLIAM F. SCHARNIKOw, Trial Examiner : The com- plaint in the present case was issued on the basis of unfair labor practice charges filed by the Union (United Steel- workers of America, AFL-CIO) and alleges that the Respondent (Wrought Washer Manufacturing Co.) has committed unfair labor practices affecting commerce within the meaning of Sections 8(a)(1) and (5) and 2(6) and (7) of the National Labor Relations Act, as amended, 29 USC Sec. 151 et seq., herein called the Act. With respect to the unfair labor practices the complaint alleges in substance that the Respondent has refused to bargain with the Union in good faith and has thereby engaged in unfair labor practices within the meaning of Section 8(a)(5) and ( 1) of the Act, in that, on and since February 14, 1969, and without affording the Union adequate notice and an opportunity to bargain, the Respondent modified an existing collective-bargaining agreement with the Union which includes a wage incentive plan and other general provisions covering the wages, 197 NLRB No. 14 76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hours, terms , and conditions of employment of an appropriate bargaining unit of the Respondent's pro- duction and maintenance employees for the period from September 21, 1968, to September 21, 1970 , by unilaterally instituting and since maintaining a new wage incentive plan known as the "Press Usage Plan." As amended at the hearing, the Respondent 's answer, although admitting the appropriateness of the bargaining unit and the existence of its current contract with the Union containing an incentive plan covering the employ- ees in the unit, denies committing the unfair labor practices alleged in the complaint Furthermore , the Respondent "specifically denies that it modified the existing collective- bargaining agreement by unilaterally instituting and maintaining a new incentive plan known as the `Press Usage Plan' or that the institution of the said plan occurred without affording the Union adequate notice and an opportunity to bargain before instituting said plan." In addition , the Respondent asserts in its amended answer that the basic issue in the present case involves an interpretation of the terms of its existing collective-bar- gaining agreement with the Union which, under the collective-bargaining agreement , should have been submit- ted to arbitration . The Respondent therefore contends that the Board either has no jurisdiction or should not, as a matter of policy, exercise jurisdiction in the present case. Pursuant to notice, a hearing was held at Milwaukee, Wisconsin, on March 3 and 4, 1970, before the Trial Examiner duly designated by the Chief Trial Examiner. The General Counsel, the Respondent , and the Union appeared by counsel and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues. At the beginning of the hearing, the end of the General Counsel's case, and at the close of the hearing, counsel for the Respondent moved, in accordance with the position stated in its amended answer, that the Board refrain from exercising jurisdiction in the present case and should dismiss the complaint, since the issue is one of contract interpretation which , as a matter of policy, should be decided by arbitration under applicable provisions of the current contract between the parties . On each occasion, I deferred decision on the motion , advising counsel at the conclusion of the hearing that ruling on the motion would be made in my Decision and that counsel, in the meantime, should brief their respective positions both on the motion and on the merits of the general issues presented by the evidence under the pleadings . Since the hearing, I have received and considered briefs from the General Counsel and counsel for the Respondent and the Union . For the reasons hereinafter set forth , I deny the Respondent's motion to dismiss the complaint and to refer the parties to arbitration under the contract. Upon the entire record in the case , and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent, Wrought Washer Manufacturing Co., is a Wisconsin corporation which maintains its principal office and plant at Milwaukee , Wisconsin , where it is engaged in the manufacture of metal washers and stampings. During the calendar year preceding the is- suance of the complaint , the Respondent in the course and conduct of its business operations, sold and shipped goods and materials of a value exceeding $50,000 directly to points outside the State of Wisconsin . During the same year, Respondent purchased and received goods and materials used in its business operations valued in excess of $50,000 directly from points located outside the State of Wisconsin . I find, as the complaint alleges and the amended answer admits , that the Respondent is, and has been at all material times, an employer engaged in commerce and in operations affecting commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union, United Steelworkers of America, AFL-CIO, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. The Issue The issue in the present case is whether the Respondent committed unfair labor practices within the meaning of Section 8(a)(5) and (I) of the Act on and since February 14, 1969, by unilaterally instituting and maintaining, over the Union's objections and without in any event affording the Union adequate notice and an opportunity to bargain, a new wage incentive plan known as the "Press Usage Plan" (PUP) which, in its application to toolsetters and other press service employees , modified the existing wage incentive provisions of an "Earnings Opportunity Plan" (EOP) contained in the current 1968 - 1970 contract between the Respondent and the Union. B. The Bargaining Relationship between the Respondent and the Union The Union has represented the Respondent's production and maintenance employees and bargained with the Respondent on their behalf since 1937. As a result, the Union and the Respondent have negotiated and entered into a , long series of collective-bargaining agreements covering these employees, the last and current agreement being a 2-year agreement executed on September 21, 1968, and expiring on September 21, 1970. The bargaining relationship has apparently been generally amicable, although there were purely economic strikes on contract bargaining issues in 1952 (a 4-week strike), in 1955 (a 13-week strike), in 1960 (a 1-week strike), and in 1968 (a 14-week strike). There is no dispute , and I find, that, under the provisions of Section 9(a) of the Act and during the relevant past history of this continuous bargaining and contractual relationship up to and including the present time, the Union has been, and is, the exclusive representa- tive of an appropriate bargaining unit consisting of all production and maintenance employees of the Respon- dent, excluding apprentices, office clerical employees, professional employees , guards, and supervisors as defined in the Act. WROUGHT WASHER MFG. CO. 77 C. The Earnings Opportunity Plan (EOP) and the Eventual Incorporation of the Basic Plan in the Collective-Bargaining Agreements 1. Inception of the Earnings Opportunity Plan (EOP) in 1948 In 1948, the Respondent formulated a wage incentive plan known as the "Earnings Opportunity Plan," which has since been referred to as the EOP. The Respondent's stated purpose in this 1948 EOP was "to compensate employees for the effective use of their working time . . . [and] to cover as many employees as practical either individually or in groups." This, the EOP proposed to do, by the development of individual or group "performance standards" as the measure of the work expected in a given unit of time from the individual or group "under normal conditions," as "established by time study, past performance, budget or such other means as may be found to be practical, just and equitable," including in each case a "loading" of the "performance standard" with a reasonable fatigue and personal time allowance. In the cases of the "Raw Materials Group" and the "Shipping Group," initial performance standards on a weekly basis were immediately established although provision was made permitting the possible future estab- lishment of individual standards for some of the employees in these groups. As to otherjobs generally, including press operations and tool setting, the 1948 EOP expressly provided for the possible future establishment of individual performance standards but further provided that "where it is impractical to establish individual performance stand- ards for the jobs of certain employees . . . rendering direct services to other employees participating in the Earnings Opportunity Plan, such service employees may, aft-r proper notice be paid a premium earning above his hourly rate based upon a portion of the premium earnings of the employee or employees he serves," i.e., of his "guide group." 1 To enable computation of incentive pay or "Premium Earnings," the 1948 EOP introduced the term and concept of "standard hours" to measure the actual performance of employees in terms of the number of hours their perform- ance would have taken had they worked at the pace set for them in their performance standards. This involved a simple arithmetical conversion of the "performance stand- ards" (expected production per hour) to a "time standard" ("allowed time per piece or operation")-a factor which, when multiplied by the actual unit production of the employee, yielded his "standard hours." 2 On this base, the 1948 EOP formulation defined the "hours saved" (or as an alternate term, the "earned premium hours") as "any excess of standard hours over actual hours." Finally, the 1948 EOP provided that "premium earnings" (i.e., incen- tive pay) were to be "extra earnings, at one half the individual employee's regular hourly day work rate, paid to I As will appear, the term, "guide group," was later used when the plan was made part of the collective-bargaining agreements with the Union after 1958 2 Although the necessity for this conversion is not spelled out, it is implicit in the detailed provisions of the 1948 EOP formulation. The "time standard" factor was clearly the reciprocal of the "performance standard" him for job performance superior to that called standard, or for any excess of standard hours over actual hours on a given job or job run (hours saved)." With the formula for "premium earnings" thus fixed at one half the individual day rate for "hours saved" ("standard hours" less actual hours) and with "standard hours" based upon individual production, the 1948 EOP formulation noted that the term "hours saved" "may be expressed as [either the] number of hours saved, or as the percentum ratio of standard hours to actual hours." 2. Incorporation of the basic EOP in the collective-bargaining agreements The Respondent gave the Union and the employees copies of the 1948 EOP in December 1948 and put the EOP into continuous effect thereafter. But it was not until 1958 that the EOP provisions, restated in concise form but without material omission or change in substance, were incorporated in the collective-bargaining agreements with the Union. In the 1958 contract and in all contracts since then, the provisions have been repeated in identical language, except that in the 1964, 1966, and 1968 contracts, the percentage of reduction of the service employees' derivative incentive has been changed to a 2-1/2 percent reduction from the incentive percentage of the guide group.3 As set forth in the current 1968-1970 contract, which contained no reopener provision, the relevant provisions were the following: 11.8 The incentive plan heretofore instituted by the Company shall be subject to the provisions of the exhibit entitled "Wrought Washer Mfg. Co. Incentive Plan" hereto attached. WROUGHT WASHER MFG. CO. INCENTIVE PLAN BASIC PLAN 1. It is the purpose of the Plan to offer participants an opportunity to earn additional compensation for increased effort and productivity. 2: To the extent that it is practical to do so, employees within the bargaining unit will be placed on individual incentives. Employees not covered by individual incentives will be covered by a group incentive to the extent that it is feasible to establish a group incentive for such employees. Service employees shall participate in relation to the incentive earnings of the employees served by them. 3. Incentive rates will be established by the Company through the use of timestudy, standard data obtained through a series of timestudies, [or]4 past performance. An incentive standard shall include an incentive allowance, necessary delay allowances, and fatigue and personal time. and has since been expressed and used in decimal form See the formulas set forth below in the "Basic Plan" as later incorporated in the collective- bargaining agreements 3 What the reduction had previously been, is not shown by the record 4 The parties stipulated that the word "or' appearing in the contracts at this point should have been "or " 78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD METHOD OF CALCULATING EARNINGS UNDER THE PLAN The pay of an employee under the Plan is based upon the premium hours earned by the employee. The premium hours and the earned pay of an employee are arrived at as follows: Premium hours = Factor x Number of Units minus Actual Hours Earned Pay = Premium Hours plus Actual Hours x Day Rate METHODS OF DETERMINING THE INCENTIVE STANDARD The standard will be expressed in strokes, pounds, or units per hour which must be produced by the operator in order to earn day rate, and 20% above day rate. Said standards will be arrived at as follows: Individual Incentive Jobs Strokes /Unit per Hour for Day Rate = 60 Minutes Factor (in Minutes) Strokes /Unit per Hour for 20% Incentive 84 Minutes Earnings = Factor (in Minutes) Group Incentive Jobs Units per Hour for Day Rate (based on a one 60 Minutes week average ) = Factor (in Minutes) Units per Hour for 20% Incentive earnings (based on a one week 84 Minutes average ) = Factor (in Minutes) METHOD OF PAYMENT 1. The premium earnings on individual incentive jobs shall be computed on a daily basis, reported on a weekly earnings statement, and included on the employee's weekly paycheck. 2. The premium earnings on group incentive jobs shall be computed weekly, based on a one week average, reported on a weekly earnings statement, and included on the employee's weekly paycheck. 3. The premium earnings for service employees will be reported on a weekly earnings statement and included on the employee weekly paycheck. 4. Service employees who have received incentive on the basis of the incentive earnings of their guide group shall receive an incentive based upon the earnings of their guide group over 102 1/2%. The current 1968-1970 contract thus adheres to the format and scheme of the 1948 formulation of the EOP, providing for the establishment and maintenance of individual and group incentive rates and the derivative incentive for service employees based upon their "guide group" in accordance with specific formulas; making no provision for the coverage of any employee under more than one of these incentive formulas; but, aside from these limitations, giving the Respondent leeway to extend coverage of the EOP to employees'not previously covered, and to transfer employees from group or "guide group" incentives to individual performance incentives upon standards fixed by timestudy or past performance. The Respondent has exercised this freedom from time to time (presumably upon notice to the Union) and has given the Union not only copies of the original 1948 formulation of the EOP but copies of the contemplated changes within the general framework of the plan. D. The Press Usage Plan of February 14, 1969 1. The situation with respect to setup men and other service employees under the EOP and the 1968-1970 contract up to February 14, 1969 The Respondent's use of automatic-feed washer presses and stamping presses in Building # 1, has required, in addition to press operators, the employment of toolsetters or setup men and other service men such as crane operators, hitchers, weigher-timekeepers, and material servers.5 As I have noted, the 1948 EOP contemplated the possibility of establishing individual standards and incen- tives for toolsetters, and for about 3 years (but not during the 6 years immediately before the present hearing), it appears from the testimony of Union Vice President and Time Study Man Clement Wolfert, that two men were trained and worked in a combined operator-setup man classification and were paid different individual EOP incentives for the respective times spent by them in setting up and then in operating several of the automatic-feed presses. But this practice was abandoned and in the last 6 years up to February 14, 1969, there was no attempt by the Respondent to establish or maintain any separate individu- al performance standards or individual incentive rates for setup men on the automatic or stamping presses. Nor, up to February 14, 1969, did these setup men ever operate the presses although the 1948 EOP provided that, "Employees assigned to setting up automatic feed washer presses are expected for that part of their time not used in setup work, to directly assist the persons operating the presses he has set up." For this "press assistance" did not involve operation of the presses but merely prepositioning the sheets of material for the operator, wiping oil from them, and removing scrap as the press was operated. Furthermore, as the Respondent's Works Manager Ray Christenson testified , although the Respondent kept track of "press assistance" time as a matter of accounting, the setup man was not given a performance standard nor paid an incentive therefor. In the nature of the press operation , the setup men had idle time between setting up the presses , and there were times that the operators had to wait for setups. The Respondent had made attempts to use idle time of this sort in the plant. In 1966 , it had a dispute with the Union as to whether in their idle time , watchmen and firemen in the 5 Hand-feed press operators set up their own presses and are therefore not within the purview of this discussion, nor were they affected by changes later made by the Press Usage Plan of February 14, 1969. WROUGHT WASHER MFG CO power house should sort washers. In the contract negotia- tions that year, the Respondent proposed a provision that "the Company shall have the right to the efficient utilization of the work time of its employees" and, according to the testimony of Union Local President John Helstowski, one of the examples given by Works Manager Christenson was the desirability of using the idle time of setup men. But the Union rejected this proposal and it never became part of the collective-bargaining agreements. The Union never receded from this general position although, according to Works Manager Christenson, two of the Union's committee (Clement Wolfert and Robert Fucile) each spoke twice to Christenson early in 1969 about whether "there was some way to eliminate the down time [of the press operators] because the down time or the idle time was reducing the incentive earnings of the press operators, which in turn reduced the incen- tive earnings of the groups." In sum, under the 1968 contract and up to February 14, 1969, the setup men for the automatic-feed presses and the stamping presses in Building # I did not operate the presses, were not given an individual performance stand- ard nor individual incentive or premium pay for their performance, but instead, along with the other press service men, were given merely an EOP derivative incentive based upon the premium earnings of the press operators they served as their "guide group." 2. The Press Usage Plan On February 14, 1969, the Respondent submitted to the Union's local grievance committee a copy of a 6-page plan entitled "The Press Usage Plan 'P.U.P.' " The PUP as thus submitted covered "The Building # 1 service employees," i.e., the setup men on the automatic-feed washer presses and the stamping presses, and the crane operators, hitchers, weigher-timekeepers, and material servers. Omit- ting unessential language for the purposes of the present case and the sixth page containing an illustrative table of its application, the PUP's provisions and the Respondent's explanatory comments were as follows: The purpose of this plan will be to allow the service employees in Building # 1 to increase their incentive earnings in addition to the regular E.O.P. that each service employee now earns from his guide group. This plan is based on increasing the number of press cutting hours per shift for each press operator and the total number of press cutting hours per shift for each department in relation to the number of service men's hours required to operate the department. .. . A study has been made of the number of press cutting hours for each press operator and the number of service men's hours for each press cutting hour and the following standards have been arrived at from past performance records: Press cutting hours per service man's hour for Main Floor Auto. Feed Washer Presses = 1.384 Press cutting hours per service man's hour for Balcony Auto. Feed Washer Presses = 1.290 79 Press cutting hours per service man's hour for Stamping Presses = .981 When in the foreman's judgment it will not adversely affect the press usage time, he may give a service man permission to operate a specified press for a specified period of time. Such permission will not be granted unless the foreman is satisfied the servicing of all presses will be adequate and not be hampered by such permission. This will increase the press usage hours and decrease the service men's hours, and because the ratio of the number of service men's hours to press cutting hours has been decreased, it will increase the PUP incentive earned for all service men in the department. When a service man is operating a press under the above stated conditions, he shall be paid 1. His regular service man's day rate 2. Plus the regular E.O.P. for that particular press for his hours and his production, calculated on his day rate 3. Plus the press usage plan incentive that is earned by his service group, calculated on his day rate. The presses will be grouped in departments as follows: Main Floor Washer Presses Balcony Washer Presses Stamping Presses Each department will have it's press usage plan incentive (P.U.P.) computed separately on a weekly basis on the combined results of the first, second, and third shifts for the given week, and will be based on the service man's day rate, and will be paid in addition to the service man's regular E.O.P. which is based on his guide group's performance less 2.5% based on his day rate. The method used for computing the press usage plan (P.U.P.) percentage earnings on a weekly basis for a given department is as follows: Total Washer Press Cutting Hours for the Week Total Service Men's Hours Press Usage Hours per Service Men's Hours Weekly Avg. Press Usage Hours per Service Men's Hours Weekly Avg. % 100 P.U.P. Standard 2 Earnings Weekly Average The P.U.P. percentage earned and the E.O.P. percentage earned will each be applied to the service 80 DECISIONS OF NATIONAL LABOR RELATIONS BOARD man's day rate and the cents per hour so calculated separately under each plan will be added to the service man's day rate. The Building # 1 Craneman and Building # I Hitcher will receive 1/3 of the P.U.P. incentive earnings of the main floor washer press department, the balcony washer press department, and the stamping department. The Building # I Craneman and Hitcher will be required to continue to service in an efficient manner other processes or work in Building # 1. In order to make this plan work, there will have to be an interchange of tool setters and press operators within a department... . 3. The Respondent's institution of PUP over the Union's objections On Friday, February 14, 1969, the Union's local grievance committee, including Staff Representative Fred Kelber, Local President John Helstowski, and Local Vice President Clement Wolfert, met with Works Manager Ray Christenson, Superintendent Donald Wanek, and another supervisor of the Respondent at the office of the Respon- dent's attorney to consider several grievances. After some discussion of these grievances, the Respondent's attorney said "That the company had something very desirable to offer the Union which would enable [its] members to earn more money, and also enable the Company to increase their productivity." He then passed out copies of the "Press Usage Plan" which has just been set forth and read it to the union committee. Christenson also gave an explanation of the plan and answered questions put to-him by the union committee. This was the first time the PUP had been mentioned to the Union. Helstowski and Kelber, speaking for the Union at this meeting, made various objections to the PUP and also asked for time to study it before the Respondent put it into effect. Manager Christenson testified that the only union objection made at the time was that the PUP would give the employees only half the contemplated saving in increased productivity, but Superintendent Wanek testified that although this was "the primary objection," there were other objections as well, including a questioning of "how the base ... standard that is in the PUP standard was set." Christenson and Wanek agreed in their testimony, however, that the union representatives did not then make any claim that the PUP was inconsistent with, or violative of, the EOP provisions in the current contract. But despite this testimony of the Respondent's witnesses, I credit the testimony of Staff Representative Kelber and Local President Helstowski, and find, that at this meeting on February 14 they objected to the PUP not only because the Respondent would be giving employees only half the saving in productive time, but also because the incentive would be computed on a weekly rather than a daily basis, it would benefit only a few employees and overload the service men, and its basic ratio of press cutting hours to service men's hours was doubtful and had to be checked by the Union. Furthermore, contrary to Christenson's and Wanek's testimony, I also credit the testimony of Kelber and Helstowski and find that Kelber told the Respondent's representatives at this meeting that "under the [existing] contract, you have no right to put [the PUP] in," especially without giving the Union "a chance to at least thoroughly study the plan and make further suggestions on it"; that Helstowski, too, said that since it concerned wages, institution of the PUP "would be a violation of the contract," unless the Union agreed to it; but that Christenson said that the application of the PUP to the service employees was "strictly voluntary," and that the PUP would be put into effect by the Respondent. In answer to the Union's request for time to study the PUP before the Respondent put it into effect, Christenson said that "we would like to put it into effect on the following Monday, which was February 17th" but, upon Helstowski's request for a chance to examine the relevant "past performance records that we used to establish our time values," Christenson agreed to arrange such an examination and to make retroactive corrections of any mistakes that might be discovered. On the following morning, Saturday, February 15, Union Vice President Wolfert was given figures by Supervisor Chycinski which Chycinski told him represented the service men's and the operators' time for the 6-year period upon which the Respondent had based the PUP. As Christenson had told the union representatives, the Respondent instituted the PUP on Monday, February 17, and has continued to keep it in effect since then. On February 25, 1969, the members of the Union's local bargaining committee filed a grievance setting forth essentially the substance of the objections voiced by them in the February 14 meeting, and on March 6 the Union's representatives met with the Respondent's officials includ- ing Christenson and Wanek. At this meeting on March 6, as well as in writing the next day, the Respondent rejected the grievance. The Union has not resorted to the arbitration procedures under Article 9 of the 1968 contract which provides for arbitration following the inability of the parties to settle grievances based upon any "claim [arising] between the Company and the Union or any of the employees represented by the Union as to the meaning and applica- tion of this agreement...." Instead, on March 25, 1969, the Union filed the unfair labor practice charges against the Respondent which are the basis of the present complaint and which alleged that: Since on or about February 17, 1969, and at all times thereafter, the [Respondent] employer by its officers, agents and representatives has unilaterally installed a new incentive system, namely P.U.P. (Press Usage Plan) for a small portion of its employees. Said system was installed without the agreement of the Union and in contravention of the Agreement reached by the parties in negotiations. E. Evaluation of the Parties' Positions Concerning the Nature of the PUP The primary question presented in this case is whether the PUP was, and is, a new incentive plan. In essence, the General Counsel and the Union contend that the PUP established a new wage incentive plan, changing and departing from the general scheme and format of the EOP in the collective-bargaining agreements, WROUGHT WASHER MFG. CO. in that (1) the PUP provided for a group incentive both for voluntarily participating and nonparticipating setup men in addition to their EOP incentive based upon the performance of the press operators as their guide group; (2) the PUP provided a new incentive formula for the computation of this additional incentive; and (3) because it thus has given the setup men an additional group incentive under a new formula, the PUP cannot be regarded as an extension of the individual or group EOP incentives to the setup men as might have been permitted under the EOP provisions of the collective-bargaining agreement. On the other hand, the Respondent contends that the PUP was not, and is not, a new incentive plan but merely a permissible adaptation and extension to the press depart- ment personnel of the same EOP formula already incorporated in the collective-bargaining agreements.6 The Respondent makes this argument, relying upon the testimony given by Superintendent Wanek and Manager Christenson against the background of their construction of the EOP, the 1968 contract, and the provisions of the PUP, and the asserted analogy of the EOP incentives paid in the shipping department. Actually, Christenson's testimony made no contribution to an understanding of the particular points now under consideration for he did not testify concerning the apparent addition of a new incentive for setup men under PUP nor about whether the PUP formula is identical with the basic EOP formula. And, upon analysis, Wanek's testimony in my opinion serves to support the General Counsel's and the Union's contention that PUP has in fact added a new incentive based upon a substantially changed formula. Thus the testimony of Wanek and the language of the PUP itself show that under the PUP the setup man who voluntarily operates a press receives the individual EOP incentive of a press operator for the time he operates the press, and that in addition he and nonparticipating setup men received both an EOP derivative group incentive based upon the production of the presses served by them and a PUP group incentive based upon an improvement of the normal ratio of press cutting hours to service hours. On this evidence, it appears clear and I find, in agreement with the General Counsel and'the Union, that the PUP has given the setup men for their setup time a new group PUP incentive in addition to their derivative EOP incentive; that the PUP was not the permissible change from an EOP group to an EOP individual incentive contemplated by the EOP; and that, in these two respects at least, the PUP represented material changes from the contractually adopted and existing EOP plan.? 6 In its brief (at p 14), the Respondent states its general position as follows The express purpose of the Respondent's Basic Incentive Plan is to offer a voluntary program whereby participants are given an opportu- nity to earn additional compensation for their increased effort and productivity It further requires that employees not covered by individual incentives will be covered by a group incentive to the extent that it is feasible to do so Through P U P, the Company has provided its tool setters with an opportunity to earn additional compensation for their increased productivity, accordingly, by instituting the plan, the Respondent has lived up to the mandate of this provision The uncontradicted testimony of Wanek and Christenson, the only witnesses who testified as having expertise in analyzing and interpret- 81 Superintendent Wanek's testimony, contrary to the purpose for which the Respondent offered it and the conclusion which Wanek urges the Board to draw from it, also shows that the PUP formula differs from the EOP formula in the contract, in that the term and concept of "standard hours" which he used interchangeably for both formulas in an attempt to show their identical operation, actually are quite different in each of the two formulas because they are based upon different "factors." In the EOP contract formula, the "factor" is the "time standard" or "allowed time per piece or operation" in terms of "strokes [or] units per hour," and is expressed in the decimal portion of an hour allowed per "stroke [or] unit" as determined by time study or "past performance." In the PUP formula, the "factor" has a completely different base. The "standard" is the "press cutting hours per service man's hour" determined by "past performance," and the resulting "factor" used to compute PUP incentive has no relation to the "strokes or units per hour" basic to the EOP formula. Instead, the PUP "factor" is the ratio between "press usage [or cutting] hours" and "service hours." This difference in the two formulas is apparent from a reading of the basic 1948 EOP formulation and the provisions of the EOP as incorporated in the 1968-1970 contract,8 and of the PUP formulation submitted to the Union on February 14, 1969.9 Moreover, the difference in the formulas and their basic "factors" is also apparent from Wanek's testimony in which, using figures and making computations shown on two of the Respondent's exhibits, he made a lengthy, detailed comparison between the application of the EOP formula to the shipping department group for the week ending January 14, 1970, and the application of the PUP formula to the set up men for the week ending May 3, 1969. It thus appears from the evidence that, contrary to the conclusion Wanek and the Respondent would have the Board reach, the PUP formula is quite different from the EOP and the'contract formula and its bases and that, in this respect as well as in its provision for a group incentive for the setup men and other service men in addition to their EOP derivative incentive, the PUP represented a substantial change and modification of the EOP as incorporated in the 1968-1970 contract. F. Conclusions All that remains to be done in deciding the present case is to apply to the foregoing facts the pertinent legal principles established by and under the Act. ing incentive systems, was that the P U P was nothing more than applying E 0 P to a situation which had not been previously covered by the Plan As Wanek has demonstrated, the formula used in determining earnings under P U P is identical to the formula used in EOP 7 At one point in his testimony, Wanek in answering the General Counsel's question, agreed that the PUP gave a participating setup man three incentives, thereby including as one of these incentives the individual EOP incentive for his production while operating a press But he later corrected himself, by excluding the press operator's individual EOP incentive for time spent in operating a press 8 See sec 111, C, I and 2, above 9 See sec 111, D, 2, above. 82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Wage incentives are a mandatory subject for collective bargaining.10 Accordingly, the Respondent and the Union in their bargaining over the years had established the EOP as a comprehensive wage incentive system with a definite pattern and formula and had incorporated the EOP in each of their collective-bargaining agreements since 1958. The current 1968-1970 contract containing these wage incen- tive provisions makes no provision for reopening any of its terms for renegotiation or modification during its 2-year period and, contrary to the Respondent's suggestion, I find that the Union did not attempt to do so through Vice President Wolfert's and Bargaining Committee Member Fucile's requests of Manager Christenson in late 1968 or early 1969 that some way be devised to eliminate down time for the press operators because of its reduction of the press operators' and the service men's incentive earnings. These requests were informal, made no suggestion of what should or could be done, and certainly did not indicate any desire or overture on the part of the Union to modify or change the EOP wage incentives or other provisions in the recently executed 1968-1970 contract. At most they indicated that the Union was interested in devising a possible operating method for minimizing the operators' down time, for example, by the Respondent's securing and using more presses or more service men. Nor could Wolfert's and Fucile's requests reasonably be taken by Manager Christenson as a suggestion by the Union that service men be permitted to operate the presses-a suggestion which the Union had successfully opposed during the contract negotiations in recent years-since obviously such a course would not have had the effect of reducing the press operator's down time but would, if anything, have had just the opposite effect. The Respondent's institution and maintenance of the PUP over the Union's objections constituted a modifica- tion of the wage incentive provisions of the 1968-1970 contract during the contract period and at a time when none of the contract terms were open for renegotiation, and was therefore violative of the Respondent's collective- bargaining obligation as defined by Section 8(d) of the Act.11 That the PUP was beneficial to some of the employees and provided that their participation should be "voluntary" is immaterial.12 For the Respondent's unilat- eral action dislocated the current wage pattern and balanced arrangement established by the contract for all the employees. In addition, by offering an inducement to the setup men to serve part time as press operators, the PUP accomplished what the Respondent had been unable to accomplish by bargaining and disturbed the pattern of occupational classifications which has become a term or condition of employment in the bargaining unit. Even were it to be assumed, contrary to the primary conclusions just set forth, that, despite Section 8(d) of the 10 East Texas Steel Casting Co, 154 NLRB 1080 11 NLRB v C & C Plywood Corp, 385 U S 421, John W Bolton & Sons, Inc, 91 NLRB 989, C & S Industries, 158 NLRB 454, 457-460, The Scam Instrument Corp, 163 NLRB 284, 288-289, enfd 394 F 2d 884 (C A 7) 12 Pittsburgh Plate Glass, Chemical Division, 177 NLRB 911, John W Bolton & Sons, Inc, supra 13 Cookeville Shirt Company, 79 NLRB 667, Mooney Aircraft, Inc, 138 NLRB 1331 Act, the Respondent was entitled to raise the question and to bargain about the PUP on February 14, 1969, it cannot be said that the Respondent did bargain in good faith with the Union. For, its insistence upon putting the PUP into effect on the next working day after it presented the PUP to the Union, despite the Union's objection to the new plan and its request for more time to consider the matter, did not afford the Union the adequate time or opportunity to examine and appraise the Respondent's proposal which are required as an essential element of good-faith bargaining under the Act.13 On the foregoing considerations, I conclude, as the complaint alleges, that the Respondent committed unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act on and since February 14, 1969, by unilaterally instituting and maintaining over the Union's objections and without in any event affording the Union adequate notice and an opportunity to bargain, a new wage incentive plan known as the "Press Usage Plan" (PUP) which, in its application to toolsetters or setup men and other press service employees, modified the existing wage incentive provisions of an "Earnings Opportunity Plan" (EOP) contained in the current 1968-1970 contract between the Respondent and the Union. IV. RULING ON THE RESPONDENT'S MOTION TO DEFER TO ARBITRATION AND DISMISS THE COMPLAINT The Respondent's motion that the Board abstain from exercising jurisdiction in this case and refer the Union to arbitration of the question of interpretation of the contract, the EOP, and the PUP under the procedures provided by the contract, is based upon the Board's decision in Joseph Schlitz Brewing Company, 175 NLRB 141, the provision of Section 203(d) of the Labor Management Relations Act (29 USC, Sec. 173(d)), and the language of a number of judicial and Board decisions recognizing the desirability of leaving questions of contractual interpretation and applica- tion to the decision of an arbitrator whenever the contract makes provision for such a procedure.14 Since 1955, the Board has recognized this policy favoring arbitration despite the provision of Section 10(a) of the Act conferring exclusive jurisdiction upon the Board in unfair labor practice cases unaffected "by any other means of adjustment or prevention that has been established by agreement, law or otherwise," and has held with judicial approval in the Spielberg line of cases 15 that in unfair labor practice proceedings it will accept the decisions of arbitrators made under applicable contract procedures, provided it appears that the arbitration proceedings are "fair and regular, all parties had agreed to be bound, and the decision of the arbitration panel is not clearly repugnant to the purposes and policies of the Act." 16 The Board, without relinquishing its ultimate jurisdiction and 14 United Steelworkers v Warrior and Gulf Navigation Co, 303 U.S. 574, United Steelworkers v American Manufacturing Co, 563 U S 564, International Harvester Co, 138 NLRB 923, affd 327 F 2d 784 (C A 7), cert denied 377 U S 103 and cases therein cited. 15 Spielberg Manufacturing Company, 112 NLRB 1080 See also N L R B v Auburn Rubber Co, Inc, 384 F 2d I (CA 10); and Ramsey v. N L.R B, 327 F 2d 784 (C.A 7), cert denied 377 U S 1003 16 Spielberg, supra, at 1082 WROUGHT WASHER MFG. CO. responsibility to decide unfair labor practice issues, has thus given a limited review to the arbitrator's decision and has rejected it, making its own findings de novo, only when it has appeared that the arbitrator's decision has not satisfied the Board's standards.17 And in the course of this review of the arbitrator, it has afforded the losing party before the arbitrator an opportunity to present its position and evidence in the unfair labor practice proceedings. The Board's Schutz decision, issued by a majority of a three-member panel on March 27, 1969,18 extended the Board's policy of encouraging arbitration under existing contract provisions by applying it to certain situations in which, although arbitration was available, the charging party in an unfair labor practice case has refused or failed to resort to it. In Schlitz, the Trial Examiner had found, in accordance with the charging union's interpretation and contrary to that of the respondent-employer, that their current contract did not permit any change in existing practices with respect to relief periods, that the respondent had nevertheless unilaterally changed its relief practice; and that (as the Board summed up the Trial Examiner's conclusion), "The Respondent in implementing its change in relief periods, during the term of the contract, did not comply with Section 8(d) requirements, and thereby violated Section 8(a)(5) and (1) of the Act." The Board reversed the Trial Examiner and dismissed the complaint without reaching the merits of the case, and for a decision of the underlying question of contract interpretation, referred the parties to arbitration under the arbitration provisions of the contract. In the course of reaching this conclusion in Schutz, the Board observed, as the Trial Examiner had found, that "there was no claim of any antiunion motivation in Respondent's actions;" that the Respondent and the Union had collective-bargaining agreements "since the turn of the century . . . [and] have enjoyed many years of a satisfactory strike-free working relationship," and that, "The substantive controversy . . [in the unfair labor practice case] is unaggravated on either side and emerges only if the Union's interpretation of the contract is fully accepted." Finally, the Board expressed the gist of its decision in the following passage- We believe that where, as here, the contract clearly it N L R B v Auburn Rubber, supra, enfg in part 156 NLRB 301 18 Members Brown and Zagoria joined in the decision, with Member Jenkins dissenting 19 In Unit Drop Forge Division, etc v N L R B, 412 F 2d 108, (C A 7), which was decided by the court on June 13, 1969, the court affirmed the Board's pre-Schbtz refusal to defer to available arbitration in 171 NLRB 600 (Full board decision issued on May 21, 1968, with Members Brown and Zagoria dissenting) In dictum in Eastern Illinois Gas and Securities Co, 175 NLRB 639, In 1, the Board with Member Brown dissenting and urging deferral to arbitration, the majority of the Board in finding a Section 8(a)(1) violation stated merely that the question presented was "not an issue which falls within the special competency of an arbitrator to determine " In Boston Edison Company, 176 NLRB 942 (decided June 24, 1969) and McLean Trucking Company, 175 NLRB 440 (decided on April 21, 1969), the Board panel majorities decided the merits of the cases and on this basis dismissed the complaints, without finding it necessary to consider the Respondents' contention that the dismissals should be based upon the Unions' failure to proceed to available arbitration (In both of these cases Member Brown concurred in the result but would have dismissed the complaints for failure to proceed to arbitration) in Cello-Foil Products, 178 NLRB 676, a Board panel dismissed the complaint on the merits, noting that the time limit for arbitration under the contract had expired, although Member Zagona 83 provides for grievance and arbitration machinery, where, the unilateral action taken is not designed to undermine the Union and is not patently erroneous but rather is based on a substantial claim of contractual privilege, and its appears that the arbitral interpretation of the contract will resolve both the unfair labor practice issue and the contract interpretation issue in a manner compatible with the purposes of the Act, then the Board should defer to the arbitration clause conceived by the parties...." Since Schutz, there have been no decisions of the Board or the courts in which the Schbtz principle has been applied, modified, or overruled, and therefore no instruc- tive development of the general area in which the Board apparently expects it should and will be applied.19 This lack of definitive instruction presents a Trial Examiner with peculiar difficulties. When faced with a motion to defer to available arbitration at the beginning of a hearing, he has no way of evaluating it without first taking much if not all the evidence on the merits and considering it in the light of the parties' apparent or expressed positions so that he may determine whether all questions pertinent to the unfair labor practice issues are arbitrable and thus subject to full disposition by an arbitrator. To enable the Trial Examiner to rule upon the motion, the parties are therefore necessarily put, in most instances, to a submission of their evidence and opposing positions bearing upon the merits and the result to be expected is that the Trial Examiner as well as the Board itself will have before them the complete basis for deciding the unfair labor practice question. While this, it is true, is the usual course which is pursued in a Spielberg situation, there, at least, unlike under Schutz, the unfair labor practice question is finally determined by the Board either upon acceptance or rejection of an existing arbitrator's decision. In Schutz, however, the Board not only found that the charging union should have resorted to arbitration but dismissed the complaint, rendering it impossible for the Union if it thereupon pursued that course to secure a review by the Board of an eventual arbitrator's decision (as in Spielberg) because of the obvious difficulties imposed by the time limitations of Section 10(b).20 It was because of these circumstances that I received all stated that he would also have dismissed the complaint because of the charging union's failure to resort to arbitration In Union Carbide Corp, 178 NLRB 504 (which the Respondent cites and relies in part upon in the present case), a Board panel while considering the charging union's failure to arbitrate allegedly excessive subcontracting , considered it only as one element in the evidence , and dismissed the complaint generally on the menu Finally , in its just issued decision in Progress Bulletin Publishing Company, 182 NLRB 904 (the only one of these decisions in which there has been any reference to the Schbtz decision), a Board panel majority consisting of Members Fanning and Jenkins with Member Brown dissenting, found a Section 8(a)(5) violation in the employer's unilateral termination of a customary but not contractual Christmas bonus, and held specifically that the charging union's failure to resort to an existing contractual grievance-arbitration procedure did not fall within the Schbtz rule since it did not present a question of contract interpretation nor therefore an issue which was clearly "arbitrable " 20 Perhaps the solution in a debatable Schbtz situation, would be for the General Counsel to retain the unfair labor practice charges, notifying the parties that he will issue a complaint only if the Respondent refuses to go promptly to arbitration or if, upon both parties' promptly proceeding through arbitration , it appears that the charging party still presses for a Board decision and the General Counsel then believes that the arbitrator's (Continued) 84 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the evidence on the merits in the present case before attempting, as I now do, to rule upon the Respondent's motion for a deferral to arbitration and a dismissal of the complaint. With the evidence before me, upon my consideration of the findings I have necessarily made, and upon my understanding of the import of the Schhtz decision, I deny the Respondent's motion to defer to arbitration under the contract for the following reasons: 1. The Respondent's interpretation of the contract as permitting it to institute the PUP in the present case was "patently erroneous" and its unilateral institution of the PUP was therefore not "based on a substantial claim of contractual privilege." 2. It does not appear "that the arbitral interpretation of the contract will resolve both the unfair labor practice issue and the contract interpretation issue," since the Respon- dent's defense to the unfair labor practice accusation is based not only upon its asserted interpretation of the contract as justifying its action, but also on its contention that, even so, it bargained with the Union on the PUP as required by the Act, a matter which would clearly not be within the ambit of an arbitrator's power to decide under the contract arbitration clause. 3. The contract interpretation issue does not present such a peculiarly complex question as might be regarded as requiring the special expertise of an arbitrator with his possible acquaintance and understanding of the "common law of the shop." 21 4. The unfair labor practice found upon the evidence I have discussed requires a Board remedy and order for the guidance and control of the parties in their day-to-day contacts and in future contract negotiations, and not merely the decision of an arbitrator. V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the business opera- tions of the Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce between the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. VI. THE REMEDY Having found that the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, I will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. decision has not completely and satisfactorily disposed of the unfair labor practice issues under the Spielberg standards Such a procedure would encourage and give proper play to arbitration, would be fair to the parties under their contract, would make it unnecessary in some cases for the Board to intervene, but would still reserve to the Board the opportunity to decide It has been found that the Respondent violated the Act by unilaterally instituting its Press Usage Plan (PUP) on or about February 17, 1969. In order to effectuate the policies of the Act, it is recommended that the Respondent rescind the Press Usage Plan (PUP) and cease and desist from unilaterally creating new or additional incentive pay plans for the employees in the bargaining unit during the term of the present collective-bargaining agreement and the effec- tive term of any future collective-bargaining agreement between it and the Union without first reaching agreement with the Union concerning such changes. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondent, Wrought Washer Manufacturing Co., is an employer engaged in commerce within the meaning of the Act. 2. United Steelworkers of America, AFL-CIO, herein referred to as the Union, is a labor organization within the meaning of the Act. 3. All production and maintenance employees of the Respondent, excluding apprentices, office clerical employ- ees, professional employees, guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein, the Union has been, and still is, the exclusive representative of all the employees within said appropriate unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment, within the meaning of Section 9(a) of the Act. 5. The Respondent committed unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act on and since February 14, 1969, by unilaterally instituting and maintaining over the Union's objections and without in any event affording the Union adequate notice and an opportunity to bargain, a new wage incentive plan known as the "Press Usage Plan" (PUP) which, in its application to toolsetters or setup men and other press service employees, modified the existing wage incentive provisions of an "Earnings Opportunity Plan" (EOP) contained in the current 1968-1970 contract between the Respondent and the Union. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.] the unfair labor practice question and issue an appropriate order should it appear necessary 2i See dissenting opinion of Justice Douglas in N LR B v. Strong, 393 U S 357, 364-366 and cases and authorities there cited