Firch Baking Co. of Jamestown, Inc.

414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Firch Baking Company of Jamestown , Inc. and Local 15520, International Union of District 50, Allied and Technical Workers. Case 3-CA-4719 September 29, 1972 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On June 2, 1972, Administrative Law Judge' Owsley Vose issued the attached Decision in this pro- ceeding. Thereafter, Respondent filed exceptions and a supporting brief, and the General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs nand has decided to affirm the rulings, findings, and conclusions 3 of the Administrative Law Judge and to adopt his recommended Order .4 that no impasse had occurred at the time Respondent put into effect the "fair, firm offer." Quite apart from Respondent 's argument that N.LR B v. Gener- al Electric Company, 418 F.2d 736 (C.A. 2), sanctions its "fair, firm offer" bargaining strategy, which argument we do not pass upon here , Respondent's December 30 letter to the employees makes it clear that the "fair, firm offer" was not so much an offer as it was a promise to Respondent 's employees that a specified wage increase would be granted Inasmuch as the employees were promised the wage increase irrespective of its acceptance or rejection by the Union, before the increase had even been presented to the Union, therefore the wage increase was in fact a firm decision which removed the element of bargaining, and a fortiori, no good-faith bargaining impasse had resulted when the Respondent effectuated its "fair , firm offer." N.L.R.B v Benne Katz, etc, d/b/a/ Williamsburg Steel Products Co, 369 U S. 736; Terry Indus- tries of Virginia, Inc, 188 NLRB No. 102. ° Respondent contends here as it did unsuccessfully before the Administra- tive Law Judge that the complaint should be dismissed because the allega- tions of the complaint are unrelated to the underlying charge The charge was filed on December 29, 1971, at least 2 days before Respondent's acts found unlawful herein . It alleged a violation of Sec. 8(a)(1) and (5) in that Respon- dent "refused to meet at reasonable times for the purpose of bargaining and attempted to by-pass the contractual bargaining representative and deal directly with the employees in the appropriate bargaining unit" The com- plaint alleged in essence that Respondent refused to bargain with the Union in violation of Sec. 8(aXl) and (5) in that on or about January 2, 1972, Respondent unilaterally increased the wages and changed other benefits of its employees and bargained with individual employees rather than their union representative We find that the complaint alleged unfair labor prac- tices related to those alleged in the charge, and that the unfair labor practices grew out of the same course of conduct . N L R.B v. Fant Milling Company, 360 U S. 301 (1959) Therefore we find no merit in Respondent's contention. TRIAL EXAMINER'S DECISION ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that Respondent, Firch Baking Company of Jamestown, Inc., Jamestown and Olean, New York, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. i The title of "Trial Examiner" was changed to "Administrative Law Judge" effective August 19, 1972. 2 Respondent has requested oral argument on the question of the lawful- ness of its "fair, firm , final offer" bargaining strategy However, we agree with the Administrative Law Judge that the only question to be decided here is whether an impasse had occurred at the time Respondent implemented its "fair, firm offer" without the Union's consent. On the latter issue, the record, exceptions, and briefs adequately present the positions of the parties, and therefore Respondent's request is hereby denied. 3 In adopting the Administrative Law Judge's finding that Respondent did not bargain to impasse before unilaterally effectuating its economic propos- als on January 2, 1972, we find significant Respondent's letters distributed to its employees and the employee members of the Union's bargaining com- mittee on December 27 and 30, 1971 Attached to the December 27 letter was a copy of Respondent's letter to the Union enclosing its "fair, firm offer," which the Union did not receive until December 29 No bargaining sessions were held between December 27 and 30, when Respondent distributed an- other letter to the employees in which Respondent declared that. In the event that the union does not accept our fair, firm offer by the time that the contract expires [midnight January I, 19721, we have no alternative but to make our fair, firm offer to you directly And of course, we sincerely hope that you will accept it and continue on thejob Respondent effectuated its "fair, firm offer" on January 2, 1972, as it had stated it would, even though that offer had been on the table at only two bargaining sessions on December 30 and 31 before the offer was implement- ed. In our view, this conduct provides additional support for our conclusion STATEMENT OF THE CASE OWSLEY VOSE, Trial Examiner: This case was heard at Jamestown, New York, on March 27 and 28, 1972, pursuant to a charge filed on December 29, 1971, and a complaint issued on February 16, 1972. The only issue raised by the complaint is whether the action of the Respondent, herein sometimes called the Company, in instituting certain changes in wages and other conditions of employment dur- ing the pendency of collective-bargaming negotiations, vio- lated the Company's obligations under Section 8(a)(5) and (1) of the Act. The resolution of this question turns upon whether the parties had reached an impasse in the negotia- tions at the time the action was taken. Upon the entire record and my observation of the wit- nesses, and after due consideration of the brief filed by the Company, I make the following: FINDINGS AND CONCLUSIONS I THE BUSINESS OF THE COMPANY The Company is a division of Firch Baking Company, Inc., a Pennsylvania corporation, which is a wholly owned subsidiary of Kane-Miller Corp. The Company is engaged at Jamestown and Olean, New York, in the production, sale, and distribution of baked goods. During the year preceding the issuance of complaint the Respondent caused to be delivered to its Jamestown, New York, plant from out-of-state sources more than $50,000 worth of raw materials and supplies. Upon the foregoing undenied facts I find that the Company is en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 199 NLRB No. 62 FIRCH BAKING COMPANY 415 II THE LABOR ORGANIZATION INVOLVED Local 15520, International Union of District 50, Allied and Technical Workers, herein called the Union, is a labor organization within the meaning of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES A. The Respondent's Unilateral Action in .Violation of Section 8(a)(5) and (1) of the Act 1. Background The Company for some time in the past has had collec- tive-bargaining contracts with unions representing four units of its employees. Local 15520, the Union here in- volved, represents the employees in two of these units, one consisting of certain production employees working inside the Jamestown bakery, and the other consisting of the Company's various drivers, including wholesale driver- salesmen and transport drivers, and also sales clerks at the Company's thrift stores in Jamestown and Olean. The in- stant case involves the Company's alleged unilateral action during collective-bargaining negotiations with the Union as the representative of the employees in the latter stated unit, the drivers and sales clerks unit. The labor contract covering the employees in this unit, dated January 8, 1969, by its terms automatically renewed itself on midnight January 1, 1972, unless notice of a desire to cancel, terminate, or modify the contract was given the other party the requisite period before the automatic renew- al date. On October 27, 1971, the Union mailed to the Company a notice of its desire to modify or terminate the contract. As stated more fully below, the first bargaining session was held on November 10, 1971. Thereafter nine additional bargaining meetings were held in November, December, and January, 1972. At the insistence of the Company, all these meetings were held during nonworking hours. The Company's bargaining committee consisted of 11 members, including its president, vice president, secretary- treasurer, the Jamestown plant general manager, the office manager at Jamestown, the supervisor of terminal opera- tions at both Jamestown and Olean, three supervisors at Olean, and three supervisors at Jamestown, including one who supervised the tractor-trailer division. Secretary-Treas- urer James Cullen was the principal spokesman for the Company. John Dwyer, the president of the Company, at- tended only one or two meetings, including the first. The Union's bargaining committee was composed of Thomas Washington, an International representative of the Union, and six employee members, including Union Presi- dent Kenneth Eklund. Washington was the Union's princi- pal negotiator. The employees in the bargaining unit work a 5-day week, during days for the most part, and have Wednesdays and Sundays off. Because of the Company's continued in- sistence that all negotiations be carried on during nonwork- ing hours, this meant that the only sustained periods avail- able for negotiations were on Wednesdays and Sundays. 2. Sequence of events Because of the narrow issue in this case I find it unnec- essary to treat the discussions at the various bargaining meetings in detail. I believe that it will suffice if I state in general terms the events at bargaining meetings and the other intervening events which cast light on the question whether an impasse in the negotiations had been reached at the time the Company instituted the changes in wages and working conditions which the General Counsel complains were put into effect without adequate consultation with the Union. November 10, 1971 first bargaining meeting: The Union submitted a four-page document listing proposed changes in the existing contract, explained its proposals, and invited questions regarding them. One of the Union's new propos- als contemplated bargaining during working hours during the last week of the contract term. The Company took the position that it was not possible to have supervisors relieve union committee members so they could participate in the bargaining sessions, asserting that the supervisors could not be spared from the regular duties for the full day that would be required. The Union proposed to reduce the number of employee members on the bargaining committee so as to lessen the burden on the Company. However, the Company said that this would not work. November 17, 1971-second bargaining meeting: After a discussion of the Union's demands, which the Company characterized as "astronomical," the Company stated that, after evaluating future prospects, it would make a "fair firm offer" which it indicated would be both fair and final.I The Union proposed that the Company agree to engage in some bargaining during working hours to demonstrate its good faith and indicated that as little as 25 percent of the bargain- ing during working hours would satisfy it. The Company said this was impossible. November 30, 1971: The Company handed to each of the employees in the unit the first of its letters in its employ- ee communications program. The Company also mailed the letters to the employees' homes. This was the procedure followed with respect to all letters sent to employees in connection with its employee communications program. In the letter, after stressing the precarious condition of the Jamestown bakery as an independent entity and the need for giving management flexibility in its operations if the employees were to enjoy "a good, steady job," the Company invited the employees to communicate with company offi- cials and supervisors concerning the negotiations and to give their ideas and opinions. The Company also emphasiz- ed the need for scheduling a number of bargaining meetings before the contract expired and attached a proposed sched- ule of 15 meetings, all during nonworking hours. December 1,1971-third bargaining meeting: This meet- ing opened with a further discussion of future meeting i Admittedly in respect to making its "fair firm offer" and in conducting an employee communications program, the Company was patterning its bargaining strategy after that engaged in by the General Electric in N L.R B v. General Electric Co, 418 F 2d 736 (C A. 2), cert. denied 397 U S. 695. While the Second Circuit, with Judge Friendly dissenting in part, upheld the Board's findings of violations of Sec 8(a)(5) of the Act by General Electric, in the Company's view, the majority opinion of the Second Circuit sanctions its course of conduct in this case Because of the narrow issue presented by the complaint in this case I do not reach this question. 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD dates. International Representative Washington indicated that he did not negotiate on Sundays . The Union stated that the setting of bargaining dates was a matter to be mutually agreed upon and proposed that supervisors relieve the few employees involved on a reduced union bargaining commit- tee so that they could attend during working hours. The Union pointed out that this was what was done when the employees were sick or were on vacation . The Company's response was that it needed all its supervisors at the bargain- ing table. The Company presented a completely rewritten proposed draft of a contract covering most of the noneco- nomic matters dealt with in the 1969 contract . Included were union-security and dues checkoff provisions and a provision for compulsory arbitration. The provisions of the Company's proposed draft, as well as the Union's propos- als, were discussed but no agreement on any of the provi- sions was reached. The union committee left without any date being set for the next meeting . As it did so, Cullen asked Washington about a future meeting date . Washington replied that no further meetings were scheduled and that none would be until the Company made some concessions with regard to bargaining "on the clock." December 2, 1971: The Company issued its second let- ter in its employee communications program in which, after mentioning, among other things, Washington's refusal to meet on Saturday, December 4 (at 6 p.m.), unless the Com- pany agreed to meet at noon on Monday, December 6, it characterized Washington's action as "outrageous, arrogant and unfair, " and stated that it was the Company's intention, if Washington refused to meet on Saturday, December 4, except on condition that the Company also meet during working hours on the following Monday, to file unfair labor practice charges against the Union based on Washington's conduct. The Company wrote Washington a letter stating that his insistence on meeting during working hours on Decem- ber 6 constituted a refusal to bargain collectively and would be the subject of charges filed with the Board unless he ceased such insistence. December 7, 1971: Washington replied, stating that the Union was "willing to concede" that "most" of the bargain- ing be carried on during nonworking hours , but that it was unwilling to agree that "100%" be conducted in off-duty hours. The Company replied to Washington , refusing to ac- quiesce in Washington's insistence that the Company agree to some bargaining during working hours , stating that this "is tantamount to dictating the size of our Committee" and that the Company "needs the services of all its [committee] members at the bargaining table." The Company suggested bargaining meetings on Saturday and/or Sunday , Decem- ber 11 or 12, during nonworking hours. December 15, 1971 fourth bargaining meeting: Before commencing the negotiations the parties discussed the next meeting date. The Union urged that it was customary for supervisors to replace route salesmen when they were ill and that it saw no reason why they could not occasionally re- place three of the Union's six employee committeemen while they were attending bargaining sessions . The Union proposed Friday, May 17, at 9 a.m., during working hours, for the next meeting. From the discussions at this meeting and a prior telephone conversation between President Dwyer and Washington, the Union received the impression that the Company was acquiescing in holding the proposed Friday bargaining session during working hours . The Com- pany presented a rewritten proposed draft of the remaining noneconomic matters not covered in its December 1 draft. A discussion followed of the provisions of both the Company's December 1 and 15 drafts . The Union agreed to a number of the provisions of the Company's December 1 draft and to one of the provisions of the December 15 draft. The Company announced that its economic proposals, which it termed its "fair firm offer," would be forthcoming in the next day or two. The discussion turned to the next meeting date. From comments of company negotiators it appeared to the Union that the Company was going back on its tentative agreement to meet during working hours on the following Friday. To Washington's question as to whether there would be any repercussions if three employee members of the union bargaining committee attended this meeting during working hours , Cullen replied, "Yes," that the Company "would have to take whatever disciplinary actions were necessary under the circumstances." Washin- ton replied that he had been "tricked" into participating in this bargaining session and with that picked up his papers and walked out of the meeting room. The employee mem- bers of the bargaining committee quickly followed. December 17, 1971: The Company distributed its third letter in its employee communications program. It is devot- ed largely to the disagreement between the Company and the Union regarding "off-the-clock" versus "on-the-clock" bargaining and the consequent difficulties of scheduling' future bargaining meetings . The letter states, in part, as follows: As we have said time and time again, we can't allow the Union to dictate a condition that pulls the Supervisors away from the bargaining table so that the Union Com- mittee Employees can be at the bargaining table! What motive does Mr. Washington have for this? We also repeated our willingness to meet every day or night until December 31, 1971, with our whole Com- mittee, of course, but his offer was again brushed aside by Mr. Washington. So we are no further ahead than we were on December 1, and there are only 15 days until the contract expires. What does Mr. Washington propose to do then? We suspect that he will be looking for an extension of the labor contract to make up for the time that he has caused everyone to lose with his silly games! Well, there will be no extension of the contract. If Management cannot persuade Mr. Wash- ington to bargain in good faith and come back to the bargaining table, then we will have no alternative but to make our fair, firm, economic offer to the Union Committee by mail ! If this fair, firm offer is not accept- ed by Mr. Washington, and the time runs out on Mr. Washington then we will be legally entitled to make this offer directly to all of our employees-because we must keep the Bakery running! The livelyhood of 160 working people depend on Management to meet their responsibilities. The letter accuses Washington of acting unlawfully in at- tempting to obtain any bargaining during working hours FIRCH BAKING COMPANY 417 and concludes with an invitation to the employees to con- tact company officials or their supervisors if they have ques- tions or opinions to express. December 20, 1971: Company Negotiator Cullen met with Washington at Dunkirk, New York, in the presence of Federal Mediator Samuel Sackman. This meeting had been arranged by Sackman at the request of the Company. Cul- len opened the meeting by reiterating the Company's insis- tence that it could not allow supervisors to replace employee committeemen to enable them to participate in bargaining sessions during working hours. Washington with equal firm- ness replied, as Cullen testified, that "some on-the-clock bargaining had to take place or we would not be back to the bargaining table." Sackman proposed a meeting on Tues- day, December 28, at 6 p.m. (nonworking hours), Wednes-' day, December 29, at 10 a.m. (nonworking hours), December 30 at 2 p.m. (working hours), and 2 p.m. on December 31 (working hours). Cullen rejected Sackman's proposal and explained to Washington that bargaining on the clock "couldn't be because it would effect the opera- tions" and that it had never been done in the past in the sales department. Cullen persisted in his refusal to accept Sackman's "package" explaining after consulting President Dwyer in Erie, Pennsylvania, over the telephone, that it included "on-the-clock" bargaining dates and "we could not have supervision substituting for the Union Bargaining Committee." Washington indicated that he had wasted his time in coming to Dunkirk, stating that the Union "had gone 80 percent of the way in this and that was the end of it." This is Cullen's testimony. The meeting ended with no further meetings scheduled. December 27, 1971: The Company presented to the em- ployee members of the union bargaining committee a letter enclosing the Company's "fair, firm offer" regarding eco- nomic matters . The offer includes increases in wages, changed pension benefits, changed health coverage, and improved major medical benefits. The Company's offer was in outline form and not in the form of proposed contractual provisions. The details concerning the changes in the pen- sion plan were not set forth in the Company's offer. The Company distributed its fourth letter to employ- ees. Enclosed with the letter were copies of an exchange of telegrams between the Company and Washington concern- ing proposed meeting dates, a copy of the Company's letter to the Union enclosing its "fair, firm offer," and the offer itself. The letter states in part as follows: ... The Labor law has changed since we negotiated our last contract. The former practice whereby the Em- ployer started negotiations with an unrealistically low offer and worked upward, is no longer necessary. Man- agement has worked long and hard on the formulation of this fair firm offer, and we can sincerely say that it truly is as fair as it is firm. Our earlier letters have told you about our economic picture and how we have sur- vived where other bakeries have not . Moreover, this offer is substantially in excess of the 5.5% maximum allowed by the U.S. Government and of course is sub- ject to approval of and application to the Pay Board. As you know, an Employer's prices can be increased only 2-1/2% and the Price Board has already ruled that an Employer can not obtain approval of price increases to match even approved pay increases! As I have mentioned in my last letter to you, if the Union still refused to come to the bargaining table without imposing illegal conditions we will have no alternative but to file unfair labor practice charges against the Union with the National Labor Relations Board. Our labor attorney is now preparing these charges which will be filed with the National Labor Relations Board January 3 . Since time is running out, this offer will be made directly to all of our employees effective 12:01 a.m., January 2, 1972. We sincerely say that we agree with U.S. Mediator Sackman that there is no reason why that there has to be a strike on January 2, just because the contract expires. Looking back on all of what has happened these past two months with Mr. Washington, it appears that his motive right along has been to pull a strike against the Employer. There is no other reasonable explanation for his behavior. December 29, 1971: Washington saw for the first time the Company's "fair, firm" offer. Washington sent the following telegram to the Compa- ny: I AM STILL WILLING TO 00 75 PERCENT WITH THE COMPANY ON NEGOTIATION DATES AS LONG AS THE COMPANY SHOWS SOME GOOD FAITH. I WILL STILL MEET THE OFFER I MADE TO YOU IN MEDIATION ON DEC 20,1971 AT THE VINEYARD MOTEL . WE DO NOT WANT TO HOLD ALL THESE NEGOTIATIONS ON COMPANY TIME WE HAVE STATED THIS AT EVERY MEETING. WE ARE WILLING AND READY TO MEET IMMEDIATELY ON MUTUALLY AGREED TIME. The Union filed a charge with the Board's Regional Office alleging that the Company had violated Section 8(a)(5) and (1) of the Act by refusing to meet at reasonable times for bargaining purposes and by attempting to by-pass the Union and deal directly with the employees. December 30, 1971: The Company issued its fifth letter to the employees. In it, after informing the employees that their dues checkoff authorizations would expire on January 1, 1972, and explaining that they would be reimbursed for the January dues which had already been deducted from their paychecks, the Company stated , in part, as follows: As we have said, management has the responsibility to 160 working people and their families, of keeping the bakery running. The union will be legally entitled to strike at 12 :01 AM, January 2nd. We don't know if they will. We do know that the production and mainte- nance employees inside the bakery must continue to work because that contract with Local Union 14030 does not expire until March 11 , 1972. In the event that the union does not accept our fair, firm offer by the time that the contract expires, we have no alternative but to make our fair, firm offer to you directly. And, of course, we sincerely hope that you will accept it and continue on the job . In the event that any group of employees refuses to accept the offer, then they will be legally replaced by permanent new hires. We sincerely hope that this will not be necessary. December 30, 1971-fifth bargaining meeting: This meet- ing was arranged by Federal Mediator Sackman at the re- quest of the Company. The Company's economic offer was discussed item by item. Washington, declaring that the offer 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was neither fair nor firm, rejected it in its entirety. He never- theless continued to discuss various provisions of the offer with the company committee. A discussion of the Company's noneconomic proposals of December 15 ensued and the Union agreed to two provisions of this proposal at this meeting. The parties agreed to meet at 6 p.m. the follow- ing day for a further meeting. December 31, 1971-sixth bargaining meeting: The Com- pany presented the Union with a document elaborating upon, and setting forth in contract language , the Company's "fair, firm offer." The Company also provided the Union with a copy of the Kane-Miller Corp . Employees' Retire- ment Plan which is referred to in the Company's "fair firm offer," but did not furnish copies of the Kane-Miller Master Insurance Plan, referred to in its offer, which contains the details of the medical, surgical, and term life insurance cov- erage which the Company was proposing to substitute for the coverage provided under the 1969 contract . Copies of the documents setting forth the details of the previous cov- erage were given to the Union at this meeting , however. The parties first discussed the contract language in the Company's December 1 and 15 proposals . Then the parties turned to the Company's economic proposals . The various items were discussed several times . The Company sought to explain the advantages of the proposed retirement pro- grams. The Union retreated from its demand for 5-percent commission and accepted the Company's proposal for a 3 1/2-percent commission on drop sales. The parties also agreed on several other provisions of the Company's "fair, firm offer;" namely, provisions concerning eligibility for holiday benefits, various provisions relating to vacation benefits, and several miscellaneous noncost items. As the meeting ended at 11:45 p.m. Washington announced that he was going to have a Federal mediator at the next meeting. January 1, 1972: At midnight, when the 1969 contract expired, the Company put into effect its "fair, firm offer" in its entirety, including the various provisions for wage increases and improved employee benefits. January 4, 1971: The Company issued its sixth letter in its employee communications program in which it discussed the Union's charge filed with the Board and the asserted lack of foundation for such a charge . In the letter the Com- pany, after commenting that Washington was poorly ad- vised on labor law, stated that Washington had bargained "to a deadlock on an illegal condition"; i.e., Union's de- mand for "some" bargaining during working hours. The letter concluded with the announcement that "our unilat- eral offer to all of you has been in effect since 12:01 a.m. Sunday, January 2." January 6, 1972-seventh bargaining meeting: The parties discussed the Company's economic proposals which had been submitted in final form on December 31, after which the Company announced that it had put these proposals into effect on January 2. Emphasizing the finality of its action, the Company stated , as Washington testified, "that the law had been changed and they were able now to give us one offer. They didn't have to start low and the Union start high and work their way in between any more." Nei- ther of the parties changed positions regarding the eco- nomic actions taken by the Company. January 15, 1972: The Company issued its seventh let- ter to the employees in which it reported briefly on the bargaining session on January 6, 1972, and announced that a further meeting was scheduled for January 19. The letter concluded with an expression of thanks to the employees for continuing on the job despite the expiration of the contract. (At no time during the negotiations had any suggestion been made by the Union that a strike would occur upon the expiration of the contract if agreement were not reached by that time. Nor had the employees here involved gone out on strike in the past.) The Union held a meeting of its members at which the failure to reach agreement with the Company was discussed. It was decided to continue bargaining until February 1 and then decide what course to pursue. January 19, 1972-eighth bargaining meeting. The par- ties discussed contract language and some agreements were reached on noneconomic matters. The Union dropped a few items from its list of proposed contract changes. The Union asked if the Company was willing to move on any of the economic items. The Company replied that its offer (which had been put into effect) is "as fair as it is firm and it's firm as it is fair." January 23, 1972-ninth bargaining meeting: A further discussion of the Company's contract language took place and agreements were reached on a few items, including agreement by the Company to shorten its proposed proba- tionary period. The Company continued to insist on the Union agreeing to the Company's "fair, firm offer" on eco- nomic matters as a package. January 26,1972-tenth bargaining meeting: The Union agreed to two more provisions in the Company's proposals and dropped a number of items from its list of proposed contract changes, including proposed additional holidays, additional funeral leave pay, pay for time spent processing grievances, and company-furnished uniforms (under the ex- pired contract the Company paid one-half of the cost of the uniforms). The Company stated concerning its "fair, firm offer," as Washington testified, that "this was it, this was as far as they could go." The Union refused to agree to these proposals, but stated that it would submit the proposals to the employees in order to determine whether they would be acceptable to them. January 31, 1972: The Company handed to the employ- ees the eighth and final letter in its employee communica- tions program. In it the Company reported that it had met with the Union on January 23 and 26 and invited all the employees in the unit to a luncheon on the following Wed- nesday (their day off) to hear an explanation about the Company's contract language and to enable them to ask questions about the Company's proposals. February 1, 1972: At a union meeting the employees voted to accept the Company's proposals of December 1, 15, and 31 (the "fair, firm offer" concerning economic items), as modified during the negotiations. February 2, 1972: The provisions of all three of the Company's proposals were consolidated into a single doc- ument and submitted to the Union for proofreading. February 16, 1972. The consolidated proposals, consti- tuting a comprehensive collective-bargaining contract expi- ering on December 31, 1974, were signed by the Company and the Union. FIRCH BAKING COMPANY 419 3. Conclusions It is well settled that an employer who takes unilateral action regarding terms and conditions of employment then in the process of being negotiated with the exclusive collec- tive-bargaining representative of his employees violates his collective-bargaining obligations under Section 8(a)(5) and 8(d) of the Act unless the parties have reached an impasse in the negotiations . N.L.R.B. v. Katz, et al., 369 U.S. 736, 741-742. The Company does not dispute this legal proposi- tion, but contends that the record in this case justifies the conclusion that an impasse had been reached at the time it put its "fair, firm offer" containing its economic proposals into effect at midnight on January 1, 1972. I cannot agree. The Respondent announced its intention to place its "fair, firm offer" directly before the employees as a whole at midnight on January 1 simultaneously with its initial presentation of its economic proposals to the union commit- teemen and the employees as a whole on December 27. This was after only four bargaining conferences in November and December and before the Union's principal negotiator had even had a chance to see the Company's economic proposals. The negotiations were actually only getting start- ed at this time and there is no suggestion in the record that either of the parties regarded the negotiations as having bogged down over substantive matters at this early stage. The parties were still in the early, probing stage of the negotiations. On December 30, before the fifth bargaining meeting that evening, the Company in its letter to the employees reiterated its intention to go to the employees directly with its "fair, firm offer" upon the expiration of the contract whether or not the Union in the meantime agreed to its proposals. While the Union, at the bargaining session on the eve- ning of December 30, rejected the Company's "fair, firm offer" in its entirety, it agreed to meet the following evening for a further bargaining session. At this meeting on Decem- ber 31 the Union agreed to several provisions contained in the Company's "fair, firm offer." When this meeting termi- nated the Union announced that it would have a Federal mediator at the next meeting and it appears that both par- ties contemplated at this time that further meetings would be held. At this time the Union had not been furnished with copies of the Kane-Miller Master Insurance plan containing the details concerning the Company's proposed changes in medical, surgical, and term life insurance coverage, which were among the proposals which the Company stated in its letters that it intended to put into effect upon the expiration of the contract. Although the company insurance proposals contemplated a change in insurance carriers, the parties by the close of the December 31 meeting had only begun to discuss this change, which is an obligatory subject of collec- tive-bargaining. See Wisconsin Southern Gas Company, 173 NLRB 480, 483-484. After the December 31 bargaining meeting the parties held four more bargaining sessions in January and these negotiations culminated in a comprehensive 2-year collec- tive-bargaining contract which was signed by the parties on February 16, 1972. The facts of the case as a whole, in my opinion, clearly warrant the conclusion that no impasse had been reached when the Respondent took its unilateral ac- tion regarding its economic proposals at midnight on Janu- ary 1, 1972. The Respondent does not articulate the basis for its claim of impasse but instead relies almost exclusively on the Board's decision in Midwest Casting Corporation, 194 NLRB No. 91, which is discussed in some detail below. Some of the language in the Company's letters to the em- ployees in which it charged Union Representative Washing- ton with unlawfully bargaining "to a deadlock" over the Union's demand that the Company should agree to hold some bargaining sessions during working hours suggests that the Company may be contending that the parties were at an impasse over this issue. However, in view of the fact that the Union, in response to the prodding of the Company and a Federal mediator, ultimately capitulated and partici- pated in bargaining exclusively during nonworking hours, it is unreasonable to conclude that the parties were at an impasse over this issue when it placed its "fair, firm offer" into effect at midnight on January 1. And in view of the further fact that the Union bargained during nonworking hours on the evening of December 30 and until 11:45 p.m. on December 31 (New Year's Eve), just 1 day before the Company took the unilateral action herein complained of, it is manifestly unreasonable to say that the parties had reached an impasse over this issue at this time.2 With respect to the Board's decision in the Midwest Casting case upon which the company relies, the Trial Ex- aminer in that case concluded, with Board approval, on 2 It may be observed in passing that the Company's inflexible position on the issue of "on-the-clock" versus "off-the-clock" bargaining introduced a discordant note into the negotiations at the outset which rendered the nego- tiations unnecessarily difficult I do not believe that it is true , as claimed by the Respondent, that it required the services of all six of the minor supervisors whom it placed upon its bargaining committee (in addition to its five top officials) at each and every bargaining conference And this claim is not altogether consistent with the Company's further contention that it could not spare the services of these supervisors to substitute for any of the drivers on the Union's bargaining committees because it required them at their posts to perform their normal supervisory and servicing of customers functions. As the Union pointed out, the Company utilized some of these supervisors to substitute for drivers when they were ill or were on vacation. In my opinion the record warrants the conclusion that the Company did not seriously consider the resolution of this disagreement on any basis other than the Union's complete capitulation to the Company's demand that all bargaining be carried on during nonworking hours. While the Union was seeking to have at least 25 percent of the bargaining sessions conducted during working hours and with three employee committeemen present, had the Company had an open mind on this issue it is possible that the controversy could have been resolved on a basis that would have been more acceptable to the Company; i e , with a lesser percentage of time spent in bargaining during working hours and with fewer employee committeemen present . Because of the Company's rigid position on this issue, the parties never reached the question whether the committeemen should be paid for the time spent negotiating during working hours The Company never raised this as an objection to bargaining during working hours Of course the Union could not inflexibly insist on employee committeemen being paid for time spent negotiating. It is not my intention to suggest by this discussion that had the Respondent fully explored all of the possible alternatives that it could not have adhered to its position that all bargaining should be conducted during nonworking hours. In view of the Company's inflexible position on the issue of "on-the-clock" versus "off-the-clock" bargaining and the use made by the Company of the disagreement between the parties concerning this issue in its employee com- munications program, I conclude that the Respondent seized upon the dis- agreement between the parties on this issue as a vehicle for attacking the Union and disparaging the motives of the union representative in an effort to undermine the employees' support for the Union and thereby obtain a better bargain for itself. Whether this is a lawful bargaining strategy under the circumstances of the case is, of course, not before me because this issue was not raised by the complaint. 420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD facts quite similar to those in the case at bar, that the parties had reached an impasse on the wage issue before the em- ployer put his last wage offer into effect and that the employer's action, therefore, was not unlawful. In this con- nection the Trial Examiner noted that neither the union nor the employees protested against the employer's action and in fact "acquiesced in the wage increase and continued to work at the higher wage until such time as they chose to strike." The facts of the Midwest Casting case are distinguisha- ble from those in the case at bar in two respects, at least, in my opinion. In the Midwest Casting case at the bargaining meeting held the day before the employer announced that he was going to put into effect its final "wage package" regardless of whether the union accepted it or not, the nego- tiations were in such a deadlock that no further meetings were arranged. Also, the Federal mediator present at this meeting stated to both parties "that he felt there was no room for settlement." In the instant case, as found above, at the final meeting before the Company's economic offer was to become effective, progress in reducing the differ- ences between the parties was achieved, "which negated the proposition that there was not prospect of further move- ment." F. A. Reynolds Co., Inc., 173 NLRB 418, 424, enfd. 424 F .2d 1068 (C.A. 5). In addition, the December 31 meeting ended with the parties contemplating that further meetings would be held in which a Federal mediator would participate. With respect to the Trial Examiner's comments in the Midwest Casting case about the failure of the union or the employees to protest the employer's action in putting its "wage package" into effect, my reading of the cases con- vinces me that such failure to protest is without legal signifi- cance in cases such as this. As stated by the Trial Examiner, with Board approval, in Webb Furniture Corporation, 158 NLRB 1003, 1007, enfd. 366 F.2d 314 (C.A. 4): If I understand the controlling decisions of the Board then District 50 did not by mere silence on this issue during the last meeting with the Respondent agree that Respondent should have the right to continue unilat- eral action on wage increases. To the same effect are J. H. Bonck Company, Inc., 170 NLRB 1471, 1478, enfd. 424 F.2d 634, 638-639 (C.A. 5), and Bier! Supply Company, 179 NLRB 741. Upon all of the facts of the case, I conclude that the parties had not reached an impasse in any areas of the negotiations at the time the Respondent put into effect at midnight on January 1, 1972, the economic proposals first submitted by it to the union committeemen in summary form on December 27, 1971. Accordingly, the Company's unilateral action regarding its economic proposals violated Section 8(a)(5) and (1) of the Act. See Terry Industries of Virginia, Inc., 188 NLRB No. 102. Olean special helper and thrift store sales clerks at its Jamestown plant and Olean terminal, excluding office clerical employees, administrative employees, guards, professional employees, and supervisory employees as defined in the Act. 2. By putting into effect on January 2, 1972, the eco- nomic proposals previously submitted to the aforesaid Un- ion without bargaining collectively with it concerning these proposals to an impasse, the Respondent has engaged in an unfair labor practice in violation of Section 8(a)(5) and (1) of the Act. 3. The aforesaid unfair labor practice affects commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent violated Section 8(a)(5) and (1) of the Act by taking certain unilateral action regarding its economic proposals without first bargaining collectively to an impasse about such proposals, my recom- mended Order will direct that the Respondent cease and desist from such conduct. My recommended Order will also contain the usual affirmative provisions requiring the post- ing of notices and the furnishing of a compliance report. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER3 The Respondent, Firch Baking Company of James- town, Inc., Jamestown and Olean, New York, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Local 15520, International Union of District 50, Allied and Technical Workers, as the exclusive bargaining representative of the employees in the appropriate unit stated in the Conclusions of Law, above, by changing the wages, hours, or other terms and conditions of employment of the employees in the ap- propriate unit without bargaining collectively with the aforesaid Union to an empasse about such changes. (b) In any like or related manner interfering with, re- straining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action which is neces- sary to effectuate the policies of the Act: (a) Post at its plant at Jamestown, New York, and at its terminal at Olean, New York, copies of the attached notice marked "Appendix."4 Copies of said notice, on forms provided by the Regional Director for Region 3, after being duly signed by the Respondent's representative, shall be posted by the Respondent immediately upon receipt there- CONCLUSIONS OF LAW 1. At all times on and after October 27, 1971, Local 15520, International Union of District 50, Allied and Tech- nical Workers, has been the exclusive collective-bargaining representative of the Respondent's employees in the follow- ing appropriate unit: Wholesale driver-salesmen, wholesale extra driver- salesmen, transport drivers, extra transport drivers, 3 In the event no exceptions are filed to this recommended Order as provid- ed in Sec. 102.46 of the Rules and Regulations of the National Labor Rela- tions Board, the findings, conclusions, and Recommended Order herein shall, as provided in Sec. 10(c) of the Act and in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings , conclusions, and order, and all objections thereto shall be deemed waived for all purposes. 4 In the event that the Board's Order is enforced by a judgment of a United States Court of Appeals, the words in the notice reading : "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." FIRCH BAKING COMPANY 421 of, and be maintained by it for 60 consecutive days thereaf t- er, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or cqvered by any other material. (b) Notify the Regional Director for Region 3, in writ- mg, within 20 days from the receipt of this Decision, what steps have been taken to comply herewith.5 5 In the event that this recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read- "Notify the Regional Director for Region 3 , in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TOEMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government employees in the appropriate unit stated below without bargaining collectively with Local 15520 to an impasse about such changes. The appropriate unit consists of: Wholesale driver salesmen, wholesale extra driver- salesmen, transport drivers, extra transport driv- ers, Olean special helper, and thrift store sales clerks at our Jamestown plant and Olean terminal, excluding office clerical employees, administrative employees, guards and professional employees, and supervisory employees as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed in Section 7 of the National Labor Relations Act. Dated By After a trial in which all parties had the opportunity to present their evidence, it has been decided that we violated the law and we have been ordered to post this notice. We intend to carry out the order of the Board and abide by the following: WE WILL NOT refuse to bargain collectively with Lo- cal 15520, International Union of District 50, Allied and Technical Workers, by changing the wages, hours, or other terms or conditions of employment of our FIRCH BAKING COMPANY OF JAMES- TOWN, INC. (Employer) (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be direct- ed to the Board's Office, Ninth Floor, Federal Building, 111 West Huron Street, Buffalo, New York 14202, Telephone 716-842-3106.