Southern Materials Co., Inc.

SOUTHERN MATERIALS 257 Southern Materials Company, Inc. and Teamsters Local Union No. 822 and Truck Drivers & Helpers Union No. 592, both affiliated with International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America. Case 5-CA-4261 July 18, 1972 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND JENKINS On April 7, 1970, the National Labor Relations Board issued its Decision and Order in the above- entitled proceeding, finding that Respondent had violated Section 8(a)(5) and (1) of the National Labor Relations Act, as amended, by unilaterally discontinuing Christmas bonuses in 1968, and ordered the Respondent to cease and desist from the aforesaid unfair labor practices and take certain affirmative action necessary to effectuate the policies of the Act.' Thereafter, the Board applied to the United States Court of Appeals for the Fourth Circuit for enforcement of its Order. On July 9, 1971, the court of appeals issued its decision,2 disagreeing with the Board's finding that the "zipper clause" in the governing collective- bargaining agreement did not, by its terms, evidence that the Union waived its right to bargain over Christmas bonuses, but remanded for further Board consideration the issues of (1) whether the Union's agreement to the zipper clause was fraudulently induced so as to relieve the Union of the effects thereof, or (2) whether the phrase "hourly rate of pay" in the maintenance-of-standards clause in that agreement constituted words of art sufficiently broad to include the regularly, previously paid Christmas bonuses. The court also directed that a letter from the Regional Director to the parties dated March 12, 1969, dismissing the original charges, be admitted into evidence for consideration in assessing credibili- ty on the issue of whether the subject of the Christmas bonuses was mentioned during negotia- tions for that bargaining agreement. Pursuant to the Board's remand order of October 1, 1971, Trial Examiner Paul E. Weil, on March 23, 1972, issued his Supplemental Decision, attached hereto, wherein he reaffirmed the original finding 1 181 NLRB 958. 2 NLRB v Southern Materials Company, Inc, 447 F 2d 15(1971) 9 The Trial Examiner, in accordance with the direction of the Court of Appeals for the Fourth Circuit , considered the Regional Director 's letter dismissing certain portions of the original charge as it bears on the issue of credibility of the union representative . The Trial Examiner found it not persuasive and we see no reason for disturbing his credibility finding in this that the Respondent violated Section 8(a)(1) and (5) of the Act. The Trial Examiner again rejected Respondent's waiver defense, concluding that the Union did not clearly and unmistakably relinquish its right to bargain over the bonus. In doing so, the Trial Examiner relied on the credited testimony of the union representative that the Christmas-bonus issue was never explored nor mentioned during the negotiations, nor was the union chief negotiator aware at the time of the negotiations that a Christmas bonus had been paid in the past.3 Though we adopt the Trial Examiner's resolutions of credibility, and agree with his conclusion that Respondent violated Section 8(a)(5) of the Act, we do so solely on the grounds set forth infra. Firstly, we note our acceptance, as the law of the case, of the court's view that, if binding upon the Union, the zipper clause,4 by its terms, embodied a waiver of the right to bargain over all benefits. However, on the credited testimony, it is our opinion that the Union was relieved of the effects of that clause by virtue of the Employer's deceptive conduct during negotiations leading to agreement on that provision. Thus, the credited facts show that during those negotiations when the Union requested information as to benefits, including any bonus previously in effect at the Employer's operation, the Company flatly stated "no bonus is paid to any employee." During the ensuing negotiations, the Union was never informed as to the existence of the Christmas bonus and, as found by the Trial Examiner, at no time material to the negotiations had independent knowledge of the existence of that benefit. These facts amply support the Trial Examiner's finding that Respondent intentionally withheld information sought by the Union concerning the benefits it had been paying. The concealment of these facts was further compounded by discussions leading to agreement on the maintenance of standards clause . At that time the parties had submitted cross proposals, designed to freeze existing terms, with the Union seeking broad language covering all sorts of benefits and contingen- cies, and the Employer seeking a clause simply stating "no employee shall suffer a reduction in his hourly rate of pay by the execution of this agree- ment." Upon presentation of the Employer's propos- al, the union representative again asked the Employ- er what standards were in effect and requested a list regard 4 The so-called zipper clause in material part provides that the parties "voluntarily and unqualifiedly waive(s) the right and each agrees that the other shall not be obligated to bargain collectively with respect to any subject matter referred to or covered by this agreement or not specifically referred to or covered by this agreement " 198 NLRB No. 43 258 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of benefits enjoyed by the employees but not covered in the contract. The Employer countered by request- ing the union representative to provide a list of anything of this nature, and they would then, talk about it. When the question was asked by the Union "what are the men receiving," Respondent replied "we are talking increases, we are talking benefits. We are talking everything the men will receive above what they are receiving now." The Union, thus reassured that the employees had no risk of losing what they presently enjoyed, accepted the Respon- dent's version of the maintenance-of-standards clause. On these facts it is apparent that the Company deliberately concealed the existence of the Christmas bonus and misled the Union into believing that employees, under the circumstances, could not be prejudiced by a reduction in existing benefits during the term of the contract. This deceptive scheme involved issues highly relevent to the negotiations, and there can be no question that Respondent adopted this course to induce a surrender of contractual and statutory protection of employee interests. In these circumstances it would do violence to the principles of good-faith collective bargaining were we to give effect to the product of the Respondent's conduct. Instead we are satisfied and find that the Employer's misconduct effectively relieved the Union of any concessions contained in the zipper clause with respect to the Christmas bonus. Accordingly we reaffirm our original finding that Respondent violated Section 8(a)(5) by unilater- ally eliminating the Christmas bonus. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby affirms its Order previously issued herein and orders that the Respondent, Southern Materials Company, Inc., Norfolk, Virginia, its officers, agents, successors, and assigns, shall take the action set forth in the Board's previous Decision. TRIAL EXAMINER'S SUPPLEMENTAL DECISION ON REMAND PAUL. E. WEIL, Trial Examiner: On October 1, 1971, the Board issued its order reopening the record and remanding the proceeding in the above case to me for further hearing. i At the reopened hearing Respondent produced notes allegedly made by Whitehurst at the negotiating meeting of March 20 which state in relevant part Q Maintenance of standards-will we eliminate9 Want listing of "above standard" conditions to be contained in agreement or excluded-sick pay-Christmas-bad weather 9 The document was offered in support of Whitehurst's testimony I find no support in the document to the testimony that there was a discussion of sick This resulted from a decision of the United States Court of Appeals for the Fourth Circuit dated July 9, 1971, denying enforcement of the Board's Order herein and remanding the case for consideration of whether the Union was fraudulently induced to agree to the waiver clause in the contract; and whether the phrase "hourly rate of pay" in the maintenance-of-standards clause constituted words of art sufficiently broad to include the regularly, previously paid Christmas bonuses. The Board ordered me to prepare and serve on the parties a supplemental decision contain- ing findings of fact based upon the evidence received pursuant to the provisions of the remand, conclusions of law, and recommendations. 1. With regard to the consideration of whether the Union was fraudulently induced to accept the waiver clause in the contract, as I pointed out in my original decision in this matter, when the Union attempted to ascertain whether bonuses were paid by the Respondent, Respondent informed the Union that no bonuses were paid to any employee. Later when the Union, during the negotiations, asked the Respondent what benefits were paid, Respondent, instead of answering the Union's question, countered with the suggestion that the Union give Respondent a list of the benefits concerning which it wished to bargain. Respondent witness Whitehurst testified that bonuses were mentioned at negotiations during bargaining over a maintenance-of-standards clause. The Union's negotiator, Capone, testified that bonuses were never mentioned during negotiations. I stated in my original decision that, were it necessary to reach the issue, I would discredit Whitehurst's testimony. I am taught by the court that it is necessary to reach the issue; and, accordingly, I discredit Whitehurst's testimony and find that bonuses were not discussed at the meeting of March 20. 1 The court of appeals directed that I receive and consider the letter by which the Regional Director dismissed certain portions of the charge originally filed by the Union herein, on which this proceeding is based. The Regional Director therein stated with reference to sick leave and inclement weather pay, "it appears that at negotiations the Employer stated its position with respect to the proposed changes and at no time refused to discuss these matters at the request of the unions...." While I find the letter interesting, I do not find it persuasive with regard to the issue. Notwithstand- ing the Regional Director's resolution of whatever credibil- ity issue he faced, on the evidence before me, I credit Capone and discredit Whitehurst. Accordingly, in answer to the first question on remand, I find that the Respondent, as I intimated in my earlier decision, intentionally withheld information sought by the Union concerning the benefits it had been paying, with the purpose of concealing from the Union the fact that a bonus was paid. Whether this constitutes "fraud in the induce- pay, Christmas, and bad weather The notes, assuming their provenance, do not discse that the Union or the Respondent mentioned any details such as sick pay or bonuses It is notable that the document does not refer to the fact that the Respondent declined to give the Union a list of benefits which it sought and that the Respondent countered with a suggestion that the Union submit its list, which exchange is admitted by Respondent I find that the alleged notes, which were not offered at the original hearing, lend no support to the testimony of Whitehurst SOUTHERN MATERIALS ment" does not appear necessary for me to decide. The issue as I understand it is whether the negotiators consciously explored the Christmas bonus during the negotiations and I find that it was mentioned at no time during the negotiations. With regard to the second question on remand, whether the language "hourly rate of pay" constitutes words of art sufficiently broad to include the Christmas bonus, no evidence was offered by the Union. Respondent offered the testimony of an expert witness, a young man whose experience was entirely as a negotiator for employers, who testified that the term means nothing more than the explicit meaning of the words, that is to say, that the term had reference only to hourly wages. The Board and the courts have long held that the term "wages" includes all of the emoluments of employment such as bonuses; insurance, vacation pay, and so forth.2 I know of no general usage in my own experience and of no authority that the narrow term "hourly rate of pay" has any wider significance in labor relations. Accordingly, the second question posed in the remand must be answered in the negative. CONCLUSIONS In accordance with the findings above, I conclude that the issue of the continuing payment of the Christmas bonus was never explored during the negotiations nor was the Union's chief negotiator aware at the time of the negotiations that a Christmas bonus had been paid in the 2 Washington Hardware & Furniture, 175 NLRB 63 3 417 F.2d 1060. 4 Temkin Roller Bearing Co v. N L R B, 325 F 2d 746, 751 (C.A. 6, 1963), 259 past. Accordingly, I find that the contract, which contained no specific mention of the then existing benefits , does not operate to exclude the benefits, but merely, as pointed out by the circuit court operates to relieve either the Employer or the Union from its duty to bargain with regard the bonus. This is not a situation such as that found in Beacon Journal Publishing Co. v. N. L.R.B., 3 where the Union sought to bargain about the employer's unilateral altera- tion of a longstanding Christmas bonus . Rather the Union merely sought the continuance of the existing condition which had not been clearly and unmistakably relin- quished.4 I have credited the evidence that Respondent led the Union to believe that it (the Respondent) means to maintain all present benefits, and sought to conceal from the Union its theretofore regular payment of Christmas bonuses. Accordingly , the effect of the zipper clause is that the Company contracted to continue to pay Christmas bonuses. This being the case, the Company's unilateral discontinuance of the Christmas bonus was a violation of Section 8(d) of the Act in that the Company neither offered to bargain, nor maintained the Christmas bonus until the expiration of the contract. Accordingly, I conclude that Respondent violated Section 8(a)(5) of the Act by unilaterally discontinuing the Christmas bonus.5 In view of this finding, I conclude that the Order heretofore recommended by me, is an appropriate remedy for the violation found, and I recommend that it be so ordered. cert, denied 376 U.S. 971 5 New Orleans Board of Trade, Ltd 152 NLRB 1258.