Southland Dodge, Inc.

276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Southland Dodge, Inc. and International Association of Machinists and Aerospace Workers, AFL-CIO, Dis- trict No. 63. Case 6-CA-6391 August 6, 1973 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On March 19, 1973, Administrative Law Judge Lo- well Goerlich issued the attached Decision in this pro- ceeding. Thereafter, Respondent filed exceptions and a supporting 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 at- tached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order, with the following modifications.' 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 as modified below and hereby orders that Respondent, Southland Dodge, Inc., Pittsburgh, Pennsylvania, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as so modi- fied: 1. Delete paragraph 2(b) and substitute the follow- ing: "(b) Upon execution of the aforesaid agreement, give retroactive effect to the provisions thereof and make whole its employees for any losses they may have suffered by reason of the Respondent's failure to sign the agreement." 2. Substitute the attached notice for the Adminis- trative Law Judge's notice. ' Respondent has excepted to the Administrative Law Judge 's recommen- dation that it reimburse the Union for any loss of dues resulting from Respondent's unlawful refusal to sign the collective-bargaining agreement reached by the parties We find merit in the exception and shall delete this provision from the Order The Board has ordered dues reimbursement in appropriate cases only where employees have individually signed dues check- off authorizations There is no evidence of such signing in this case Accord- ingly , the proposed remedy is inappropriate Ogle Protection Service, Inc, 183 NLRB 682, Creutz Plating Corporation, 172 NLRB I APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government We have forthwith signed a written contract with International Association of Machinists and Aero- space Workers, AFL-CIO, District No. 63, effective October 5, 1972, a copy of which is posted with this notice. WE WILL give retroactive effect to the terms and conditions of the contract and we will make whole our employees for any losses they may have suffered by reason of our failure to sign the contract. SOUTHLAND DODGE, INC (Employer) Dated By (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 compli- ance with its provisions may be directed to the Board's Office, 1536 Federal Building, 1000 Liberty Avenue, Pittsburgh, Pennsylvania 15222, Telephone 412-644-2977. DECISION STATEMENT OF THE CASE LOWELL GOERLICH, Administrative Law Judge: The charge filed by District No. 63, International Association of Ma- chinists and Aerospace Workers, AFL-CIO, herein referred to as the Union, on November 2, 1972, was duly served by registered mail upon Southland Dodge, Inc., the Respon- dent herein, on November 2, 1972. A complaint and notice of hearing was issued on December 21, 1972. The complaint charged that the Respondent failed and refused to execute a written agreement embodying the terms and conditions agreed upon between the Respondent and the Union in violation of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, herein referred to as the Act. The Respondent filed a timely answer denying that it had engaged in or was engaging in any of the unfair labor prac- tices alleged. The case came on for trial on February 7, 1973, at Pitts- burgh, Pennsylvania. Each party was afforded a full oppor- 205 NLRB No. 54 SOUTHLAND DODGE, INC. tunity to be heard, to call, to examine and cross-examine witnesses, to argue orally on the record, to submit proposed findings of fact and conclusions, and to file briefs. All briefs have been carefully considered. FINDINGS OF FACT,' CONCLUSIONS, AND REASONS THEREFOR I THE BUSINESS OF THE RESPONDENT The Respondent , a Pennsylvania corporation with its sole location in Pittsburgh , Pennsylvania, is engaged in the sale and service of new and used automobiles and the sale of automobile parts. During the past 12 -month period, the Respondent has had gross sales in excess of $500 ,000. Dur- ing this same period, Respondent has received at its Pitts- burgh, Pennsylvania , location goods valued in excess of $50,000 directly from points outside the Commonwealth of Pennsylvania. The Respondent is now, and has been at all times materi- al herein, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act.2 11 THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act.3 III THE UNFAIR LABOR PRACTICES A. Pertinent Facts The following employees of the Respondent constitute an appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All service department and parts department employ- ees employed by the Respondent at its Clairton Boule- vard, Pittsburgh, Pennsylvania, location, including mechanics, body men, porters, new and used car prepa- ration men, wash and lubrication men, write-up men and counter men; excluding all office clerical employ- ees, salesmen, watchmen and guards, professional em- ployees and supervisors as defined in the Act. On or about August 2, 1972, a majority of the employees in the unit described in the paragraph above , by a secret- ballot election conducted under the supervision of the Re- gional Director for Region 6 of the Board , designated and selected the Union as their representative for the purposes of collective bargaining with the Respondent; and on Sep- tember 13 , 1972, the Board certified the Union as the exclu- sive collective-bargaining representative of the employees in said unit 4 'The facts found herein are based on the record as a whole and the observations of the witnesses 2 By answer the Respondent admitted the foregoing facts 3 By answer the Respondent admitted the foregoing facts. By answer the Respondent admitted the foregoing facts 277 About 20 employees are employed in the appropriate unit. Negotiations for a contract commenced September 7, 1972. Norman I. White, the attorney for the Respondent, was its chief negotiator and James W. Elnyczky, business representative for District 63, was the chief negotiator of the Union. At the third negotiation meeting on September 28, 1972, the Respondent orally presented a "final" offer. El- nyczky requested that the offer be committed to writing in order that he might submit it to the membership in such form. However, Elnyczky indicated that he would not rec- ommend that the offer be accepted. On September 29, 1972, the final offer, in writing, together with a letter from Attor- ney White, was forwarded to the Union. The written offer did not accurately in all particulars reflect the oral offer of September 28, 1972.5 The offer was submitted to 15 employees at a union meet- ing on October 2, 1972. Upon the recommendation of El- nyczky the offer was rejected. The vote was 14 to 1. By a vote of 12 to 3 the employees voted to reaffirm strike action. Elnyczky then phoned Attorney White and informed him that the offer was rejected and that the Union was willing to engage in future meetings to resolve the differences. White said he would contact the employer and call Elnycz- ky the next day. When Elnyczky did not receive a call from White the next day he contacted Edward Constentine, presi- dent of the Respondent, who was unable to give a definite answer. On the evening of October 3, 1972, Elnyczky again contacted Constentine and was informed that Constentine "didn't see no reason for no future bargaining," and that the "offer that was made on September 28 was their final offer." Later on the same evening Elnyczky talked with Attorney White who reaffirmed the position of President Consten- tine. On the morning of October 4, 1972, the Union established a picket line at the Respondent's premises. Only five em- ployees observed the picket line which persuaded the Union to cease the strike after 45 minutes of picketing in that the Union "didn't feel that it would be effective." The pickets were told by Elnyczky to inform the employees who were working that there would be a union meeting that evening at 51 Lounge. One of the pickets, Dwayne Hier, returned to work. Another employee, Thomas Kavanaugh, who had not observed the picket line, left the plant to get coffee for other employees in the shop at which time Elnyczky told him of the meeting. Three employees appeared at the meeting. It was agreed by all present that the Respondent's final offer be accepted. Following the meeting Elnyczky sent telegrams to Attor- ney White and William C. Lupton, secretary-treasurer of the Respondent, advising them that the Union accepted the final offer for a labor agreement made on September 28, 1972. In the telegram it was suggested that a meeting be arranged "to correct errors and insert omission in your writ- ten offer" and "execute the agreements." 6 On October 5, 1972, a letter of like import was directed to the Employer 5 In the letter it was stated, "Enclosed is what I hope accurately reflects the Company's final offer" 6 As noted above the written offer did not accurately reflect the oral offer of September 28, 1972 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by Elnyczky. During the week of October 9, 1972, Attorney White and Elnyczky discussed the "errors" and "omissions." The Respondent's written offer of September 29, 1972, was re- viewed "item by item." White agreed 7 to the corrections, the insertion of any omissions, and to the setting of an effective date for the pension provisions.8 At the conclusion of the conversation White and Elnyczky had agreed on all issues. White agreed that the errors were his errors and that "he would correct them and make a new draft and submit it to the employer and the employer would contact [Elnycz- ky] for a meeting to execute the agreement " On October 16 or 17 the draft agreement (G.C. Exh. No. 5) was prepared but the Union was not contacted to execute the agreement? When Elnyczky did not hear from the Respondent by Octo- ber 17 he called White who told him that the Respondent would not sign and that "their offer was void due to the fact that it was not acceptable to the employees." Elnyczky countered that "a handful of people showed up" at a meet- ing and "they, in fact, ratified it." A letter from White followed, dated October 24, 1972, in which it was stated in part "Southland Dodge will not execute a collective bar- gaining agreement embracing the terms of our final offer to the Union. . . . In as much as that final offer was never ratified by a majority of the employees and inasmuch as the company has no desire to force upon the employees terms and conditions of employment that they refuse to work under, the final offer is considered to be void.. .... (Em- phasis supplied.) B. Conclusions and Reasons Therefor In Section 8(d) of the Act it is stated: For the purposes of this section, to bargain collec- tively is . . . the execution of a written contract incor- porating any agreement reached if requested by either party. Apparently the Respondent does not claim that an agree- ment was not reached between Union Representative El- nyczky and Respondent Representative White. Nor is there any claim that White was not authorized to bind the Re- spondent.10 The claim is that the Union's acceptance via Elnyczky was no acceptance at all in that it did not repre- White testified We did talk and we did run through a list of items that Mr Elnyczky said I neglected to put in my letter that I sent him on September 29, that he received on October 2 And on those items which were, in fact, errors, that my written offer did not accurately reflect as had been stated at the negotiation table on the twenty-eigth [sic] I agreed with him that those statements should be changed and the written offer and the document, it should so reflect it White referred to the agreed-upon effective date for the pension as a "sweetener " 9 Of G C Exh 5 White said I believe as to the substantive issues that it covers, it represents our final position as we represented it to the Union I don't think there is any mistake in it or anything like that" White further observed, "There were some minor items, but I cannot say that, that they raised to the level of preventing us from coming to the meeting of the minds " is White testified, "I was chief spokesman for the company I prepared the written offers, actually I was the sole spokesman " sent a ratification "by a majority of the employees" of the Respondent," a condition precedent agreed to by the Union. Although the credible record is clear that the Respondent's final offer of a contract was never withdrawn by it prior to October 17, 1972, the Respondent insists that its offer was terminated by the Union's rejection of the offer on October 2, 1972,12 citing The Restatement of Contracts, § 34 and 35; Williston on Contracts 1957 Ed. § 50A; and Summary of Pennsylvania Jurisprudence, Contract (1955 Ed.) It is, nevertheless, clear that the legal theory relied on by the Respondent is not applicable to the facts in the instant case. Here, after the Union's rejection of the Employer's offer and its subsequent acceptance of the offer, the Employer and the Union resolved any remaining issues, and came to a meeting of the minds with the clear understanding that the agreement reached, when committed to writing, would be executed by the parties as agreed. Indeed there is no credi- ble evidence that either the Union or the employees rejected the Respondent's "final" offer (retendered during the week of October 9) after the meeting of the minds of White and Elnyczky and the offer was finalized in the form of General Counsel's Exhibit 5. The Respondent further insists that, "inasmuch as the Union stated that there would be a ratification vote before any final agreement came into being and no such ratifica- tion took place, no final agreement was reached." This contention fails because the credible record does not disclose that the Union agreed with the Respondent that the binding effect of the agreement was conditioned upon ratifi- cation of the agreement by a majority of the Respondent's employees or a majority of the union members among the Respondent's employees. This finding would be the same even if White's testimony on this subject were accepted, for it discloses only a procedure which the Union expected to follow. '3 Advice from the Union that the "agreement would be ratified by the employees" does not establish a condition precedent for the acceptance of the agreement. See Hou- chens Market of Elizabethtown, Inc., 155 NLRB 729, affd. 375 F.2d 208 (C.A. 6, 1967). In that case the "Union's finan- cial secretary and business representative, stated to the company's negotiators that any contract proposed or rec- ommended by him would have to be approved by the em- ployees." The Board held that the statements of the union representative did not impose a condition requiring ratifica- tion by the employees before the offer could be accepted by The record reveals ADMMISIAATIre LAW Juix a Well then I take it that the narrow issue before me is whether or not General Counsel's exhibit number 5 was accepted by the Union ArroiNEr Wxrre That is the way that I would frame the issue 12 In this respect it is significant that on October 4, 1972, when Elnyczky sought further negotiations after the rejection of the Respondent's offer, President Constentine said that he, "didn't see no reason for no future bar- gaining" and that the "offer that was made on September 28 was their final offer " Neither then, nor until after October 17, did the Employer actually inform the Union that its offer was withdrawn 13 White testified "I can't give you any specific date, I can only tell you that Mr Elnyczky advised me that this agreement would be ratified by the employees, and I remember specifically with respect to the agreement, that I proposed on September twenty-eigth, [ sic] asking him if he would recom- mend it and him telling me that he would not recommend it to the employ- ees SOUTHLAND DODGE, INC. the union. See also General Asbestos & Rubber Division, Raybestos-Manhattan, Inc, 183 NLRB 213. Indeed, "[i]f the ratification provision was important to the Company, and if the Company relied on the Union's statements that the contract would be submitted to the em- ployees, then such provision would have been incorporated in the Company's proposed contract. .."Houchens Mar- ket of Elizbethtown, Inc v. N.L.R.B, supra. Obviously it became important to the Company only after it sought a means to escape the signing of the contract. Moreover, had ratification by the employees been a con- dition precedent, the approval of the employees who attend- ed the meeting of October 4, 1972, at 51 Lounge wherein agreement to accept the Respondent's offer was voted, as far as the Respondent was concerned, was a sufficient ratifi- cation, for "it is for the union, not the employer, to construe and apply its internal regulations relating to what would be sufficient to amount to ratification." M & M Oldsmobile, Inc., 156 NLRB 903.14 In any event the Respondent's challenge came too late. The alleged ineffectiveness of the acceptance was not chal- lenged at the time (October 4, 1972), or within a reasonable time thereafter, but was belatedly challenged after October 17, 1972. See M & M Oldsmobile, Inc., supra at 906. Because an employer may not insist on a ratification of a collective-bargaining agreement by a "majority of the em- ployees" (See Wooster Division of Borg-Warner Corporation v. N.L.R.B., 356'U.S. 342 (1958) 15 the Respondent's refusal to execute a "written contract" upon the request of the Union constituted a breach of the Respondent's duty to bargain collectively within the meaning of Section 8(d) of the Act. That the Respondent insisted and is insisting on a ratification of its offer by a majority of its employees is borne out by the last line of its letter of October 24, 1972: "Of course, if the company and the union can agree on different terms and conditions of employment (which the employees are willing to work under and which the employ- ees ratify), we would have a contract." (Emphasis supplied.) Accordingly, the Respondent violated Section 8(a)(1) and (5) of the Act when, upon the request of the Union, it refused to execute the written contract incorporating the agreement reached by the parties H. J. Heinz Company v. N.L.R.B., 311 U.S. 514, 523, 524 (1941). Because of its ineffective strike the Union capitulated. Its capitulation was first accepted by the Respondent as its yielding to the final offer of the Respondent and was so treated by White in his conversation and agreement with Elnyczky. Apparently the Respondent reconsidered and sought an advantage in the Union's capitulation and weak- ness. Not only did such change of heart come too late to relieve that Respondent of the binding effect of its agree- ment but its unlawfulness was further compounded by its insistence that there be no contract unless ratified by a majority of its employees. 1° As noted above White was informed by Elnyczky, "we had this meeting where a handful of people showed up and they , in fact ratified it " 15 See also Houchens Market of Elizabethtown, Inc v. N L. R B, supra, at 211 CONCLUSIONS OF LAW 279 1. Respondent is engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The following unit constitutes an appropriate unit for the purpose of collective bargaining within the meaning of Section 9(b) of the Act: All service department and parts department employ- ees employed by the Respondent at its Clairton Boule- vard, Pittsburgh, Pennsylvania, location, including mechanics, body men, porters, new and used car prepa- ration men, wash and lubrication men, write-up men and counter men; excluding all office clerical employ- ees, salesmen, watchmen and guards, professional em- ployees and supervisors as defined in the Act. 16 4. The Union has been at all times material herein the exclusive representative of the employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By unlawfully failing and refusing to execute a written contract embodying the terms and conditions of the oral agreement reached with the Union, as found herein, Re- spondent engaged in unfair labor practices in violation of Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices affect commerce within the meaning of the Act. THE RECOMMENDED REMEDY It is recommended that the Respondent cease and desist from its unfair labor practices and take certain affirmative action deemed necessary to effectuate the purposes of the Act. It is further recommended that the Respondent sign the collective-bargaining agreement marked General Counsel's Exhibit 5; that it give effect to such written contract retroac- tively to October 5, 1972; and that it make whole its employ- ees for any loss of wages or other employment benefits they may have suffered as the result of the Respondent's failure to sign the contract. The loss of earnings under the recom- mended Order shall be computed in the manner set forth in F. W. Woolworth Company, 90 NLRB 289, and Isis Plumb- ing & Heating Co., 138 NLRB 716. During the period in which the Respondent has failed and will fail to conform to the provisions of the contract, certain benefits under the contract will be irretrievably lost to the employees and the Union, such as union representation, the daily use of the grievance procedure, and the use of the bulletin boards. Moreover, the union security requirements of the contract will lie dormant which may mean that em- ployees will refrain from paying their dues obligations to the Union under such provision. By Respondent's refusal to execute its agreement, the Respondent thus has nourished "free riders" among its employees and as to these "free riders," if any, it has caused a deprivation of dues which in part would have reimbursed the Union for its services ren- dered as is intended by the statute. Hence it is equitable that 16 The appropriate unit and the unit described in the contract are the same. 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the loss of such dues, if any, attributable to the Respondent's refusal to fulfill its statutory obligations ought to be restored to the Union. Accordingly, it is further rec- ommended that the Respondent reimburse the Union for any loss of dues commencing on October 5, 1972, and con- tinuing thereafter until the contract is executed by the Re- spondent. The deterrent effect (a remedial objective of the Act) of such recommendation is obvious. Upon the basis of the foregoing findings of fact, conclu- sions of law, and the entire record 17 in this proceeding, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 18 The Respondent, Southland Dodge, Inc., its officers, agents, successors, and assigns shall: 1. Cease and desist from failing and refusing to sign the written contract, General Counsel's Exhibit 5. 2. Take the following affirmative action necessary to ef- 17 There being no opposition thereto the General Counsel's motion to correct transcript is granted 18 In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided 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 fectuate the policies of the Act- (a) Forthwith sign the contract, General Counsel's Ex- hibit 5. (b) Upon execution of the aforesaid agreement, give ret- roactive effect to the provisons thereof, make whole its em- ployees for any losses they may have suffered by reason of the Respondent's failure to sign the agreement and make whole the Union for any loss of dues in the manner set forth in the section herein entitled "The Recommended Reme- dy" (c) Post at its Pittsburgh, Pennsylvania, establishment copies of the attached notice marked "Appendix." 19 Copies of said notice, on forms provided by the Regional Director for Region 6, after being duly signed by Respondent's repre- sentative, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said no- tices are not altered, defaced, or covered by any other mate- rial. (d) Notify the Regional Director for Region 6, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 19 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board "