Longhorn Machine Works, Inc.

LONGHORN MACHINE WORKS 685 Longhorn Machine Works, Incorporated and Interna- tional Union of Electrical, Radio and Machine Workers, AFL-CIO. Case 23-CA-4356 August 24, 1973 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND JENKINS it inappropriate in this case to depart from existing policy with respect to remedial orders in cases involving 8(a)(5) violations and therefore find no merit in said cross-exceptions Accordingly, as we do not believe that the unfair labor practices herein warrant unusual remedial action, we shall adopt the remedy recommended by the Administrative Law Judge See Tyson's Foods, Inc, 187 NLRB 525, Jackson Farmers, Inc, 186 NLRB 337, Whiting Corporation, 188 NLRB 500 DECISION STATEMENT OF THE CASE On March 30, 1973, Administrative Law Judge Benjamin A. Theeman issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief, and the Charging Party filed cross-exceptions. 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, brief, and cross-exceptions and has decided to affirm the rul- ings, findings,' and conclusions of Administrative Law Judge and to adopt his recommended Order.' 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, Longhorn Machine Works, Incorporated, Kyle, Texas, its officers, agents, succes- sors, and assigns, shall take the action set forth in the said recommended Order. i In adopting the Decision of the Administrative Law Judge, we do not adopt his reliance on hostile declarations and activities of Respondent Presi- dent Brown that were part of a prior unfair labor practice case which was settled between the parties to find that the previous animosity toward the Union also motivated Respondent's intent and course of action during the current bargaining sessions which we have found to be violative of Section 8(a)(5). Like the Administrative Law Judge, we have, however, relied on this evidence to provide background for the violations found Local Lodge No 1424, International Association of Machinist v N L R B [Bryan Manufactur- ing Co 1, 362 U S 411 (1960) The Charging Party has filed cross-exceptions to the failure of the Ad- ministrative Law Judge to recommend a remedy which would make it whole for the amount of money it has lost in organizational expenses as a result of Respondent's refusal to bargain The Charging Party also seeks a compensa- tory remedy requiring payment to employees for probable losses resulting from the unlawful refusal to bargain In addition, the Charging Party requests that the Respondent be required (1) to mail the remedial notice to the homes of the employees, (2) to provide the Union access to the company bulletin boards in the plant; (3) to maintain and provide the Union upon request a current list of names and addresses of the employees for a period of I year following the Board's Decision and/or court enforcement thereof, and that pending the negotiation of a collective-bargaining agreement, the Company is ordered to submit to binding and impartial arbitration the termination of any unit employee at the request of the Union on the claim that such termina- tion was without Just cause After considering the cross-exceptions, we deem BENJAMIN A. THEEMAN, Administrative Law Judge: The complaint in this case issued on August 3, 1972, based on a charge filed by International Union of Electrical, Radio and Machine Workers, AFL-CIO (the Union) on May 17, 1972. It alleges that Longhorn Machine Works, Incorporat- ed (the Respondent or the Company) has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, 29 U.S.C. Sec. 151, et seq (the Act) by unlaw- fully refusing to bargain collectively with the Union (a) on November 17, 1972, when in bad faith during negotiations it withdrew agreement from contract provisions reached at previous bargaining sessions; (b) commencing with Novem- ber 17, 1972, in that it negotiated in bad faith with the Union with no intention of entering into a final or binding collective-bargaining agreement; (c) commencing with No- vember 17, 1972, in that it negotiated in bad faith with the Union with the overall goal of causing its employees to strike so that new employees could be hired as permanent replacements; (d) on January 10, 1972, in that it unilaterally discontinued its practice of crediting broken periods of em- ployment towards seniority; and (e) on May 11, 1972, in that it unilaterally discontinued its practice of awarding gold watches to employees completing 10 years of service. Respondent in its answer denies the unfair labor practices. A hearing was held before me on October 17, 18, 19, and 20, and November 6 and 7, 1972, in Austin, Texas, after due notice. All parties appeared and were represented by coun- sel. They were given full opportunity to participate, adduce evidence, examine and cross-examine witnesses, and argue orally. Briefs were submitted which have been fully consid- ered. Upon the record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT I BUSINESS OF THE RESPONDENT Respondent, a Texas corporation, is engaged in the man- ufacture of pipe nipples and forge fittings at its plant in Kyle, Texas. During the 12 months preceding August 1972, Respon- dent, in the course and conduct of its business, purchased goods valued in excess of $50,000 from firms located outside of Texas and such goods were shipped directly to Respon- dent from points outside Texas. It is found, as admitted, that at all times material in this proceeding Respondent has been engaged in commerce 205 NLRB No. 119 686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD within the meaning of Section 2(6) of the Act. II THE UNION It is found, as admitted, that at all times material in this proceeding the Union is a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues The issues are sufficiently set forth in the above statement of the facts. B. Credibility of Witnesses The main thrust of this proceeding deals with the hap- penings that occurred at 32 bargaining sessions that oc- curred between the dates of October 21, 1971, and September 29, 1972. The union negotiating committee of four persons was headed up by International Representa- tive Raymond Mendez, who was the active negotiator. The other three union members were employees of Respondent, who were consulted by Mendez from time to time but did not actively participate in the negotiations.' The Respondent's negotiating team was composed of Clifford G. Shawd and E. T. Robertson. Shawd, since 1944 a man- agement consultant dealing principally in personnel matters and labor relations, was hired by Respondent in March 1971 specifically to deal with the Union. Robertson was Respondent's superintendent of manufacturing since 1968. He testified he had neither participated in nor had previous experience in collective bargaining. His function at the ses- sions was to explain Respondent's operations when the need arose. Mendez and Shawd each took notes of the events of the 32 meetings. Mendez testified in this proceeding using his original notes. Shawd condensed his notes and indexed them. In doing so Shawd deleted "things that were not of particular significance and [added] a very few instances of information . . . which came to mind as [he] was working through the notes." In testifying Shawd used both sets of notes. The respective notes of the witnesses were made available to opposing counsel for inspection and use in cross-examination. The record shows no instances of any significance where Mendez varied from his notes . The re- cord shows a number of instances where Shawd on signifi- cant matters varied from his notes on direct testimony and corrected himself on cross-examination.' The testimony of all witnesses has been considered. In evaluating the testimony of each witness, demeanor was relied upon. On this basis, it is concluded and found that Robertson was not a credible witness and that, on occa- sions, Shawd was less than credible . The conclusions made as to these witnesses are confirmed by a study and analysis of each one's testimony. In each, as to material matters, their testimony was vague , equivocal, inconsistent, and con- 1 Some of them took notes of occurrences 2 Instances of these vanations will be shown from time to time hereafter tradictory.3 Mendez was found to be a credible witness. The absence of a statement of resolution of a conflict in specific testimony, or an analysis of such testimony, does not mean that such did not occur. See Bishop and Malco, Inc., d/b/a Walker's, 159 NLRB 1159, 1161. Further, to the extent that a witness is credited only in part, it is done upon the eviden- tiary rule that it is not uncommon "to believe some and not all of a witness' testimony." N L.R B. v. Universal Camera Corporation, 179 F.2d 749, 754 (C.A. 2, 1950). C. Background 1. The Union is certified; the appropriate unit On July 8, 1971, a Board-conducted election among Respondent's production and maintenance employees re- sulted in the selection of the Union. On July 16, 1971, the Union was certified. As admitted and so found the appro- priate unit for the purpose of collective bargaining was: All production and maintenance employees including truck drivers employed at the Employer' s facilities lo- cated one mile north of Kyle, Texas on the west access road of IH 35, excluding all other employees, clerical employees, guards, watchmen and supervisors as de- fined in the Act. 2. Respondent's antiunion activities commenced before the election' Respondent, prior to and after the election by act and threat to employees, clearly showed its opposition to the Union. Joe E. Brown was president of Respondent and took active charge of its management and operations. He threat- ened various employees of the dire consequences that would result if they became union.5 About 3 weeks before the election, Brown came to the machine on which DeLeon was working. He told DeLeon he was against the Union and would sell the plant to others that knew how to get along with unions. A few days later he told DeLeon he had no choice but to sell the plant "like a broken-down old horse" About the same time, Brown told Mosqueda that even though a new machine was being installed, "I could still close the g-ddam place any time I want to." A few days before the election, Brown again spoke to DeLeon, took a $5 bill out of his pocket and offered to bet DeLeon "five to one-that within three of four months you all are going to wish you hadn't voted the union in" The day before the election a meeting of 25 to 30 employees was addressed by Shawd and Brown. Shawd was telling them why they should not vote for the Union when Brown interrupted to say he wasn't going to have any truck with the Union. ... he was going to close the g-ddam place down, 3 Examples will be shown hereafter ' These actions were prior to the 10(b) period and some were part of a previously settled unfair labor practice case They were received as back- ground evidence 5 These findings are based on the undenied testimony of employees De- Leon, Mosqueda , and Arredondo and were admitted in evidence as back- ground material LONGHORN MACHINE WORKS 687 move out of his ranch and sit on top of the hill, .. . "All you son of bitches going to vote for the union tomorrow better bung your knives because I am going to have mine." He reached in his pocket and opened his knife. About a week before the election, Arredondo re- ceived his paycheck. He found it short because Re- spondent had not included overtime pay for the July 4 holiday.6 He spoke to his foreman, Shoemaker, about it. The latter told Arredondo, "All of this is because of the Union." He also said that they were "going to have to go by the book. Those are union regulations." Arre- dondo told him that when things settle down "may be we have a better chance." Shoemaker responded, "Well that is what you think. It's going to get worse you just wait and see." D. Respondent and Union Start Negotiations on October 4, 1971, Which Continue to September 29, 1972 1. Preliminary moves The Union did not commence negotiations with Respon- dent immediately after certification. On October 4, 1971, Eddy Felan, the union representative, sent Respondent a letter requesting (a) a meeting for the purpose of negotia- tions; and (b) that Respondent furnish the Union with cer- tain employment and classification data. Shortly afterward Felan was scheduled by the Union to go to Florida and Raymond Mendez took over negotiations. Failing to get either a positive response to the October 4 letter or the requested information from Respondent,' Mendez tele- phoned Shawd and arranged for the first negotiation session held on October 21, 1971. This was the first of 32 sessions. The last one was held on September 29, 1972. 6 This nonmclusion constituted a change in Respondent 's pay practices Previously, employees were paid time and a half if they worked on a holiday Respondent's action is not alleged as an unfair labor practice r Robertson 's testimony is not credited that on October 15, 1971, he had mailed a response to the Union , including the necessary data This finding is made even though Respondent put into evidence a post office receipt showing that a piece of registered mail was delivered to the Union on October 18, 1971 Respondent did not produce either a copy of the October 15 letter or a copy of the allegedly enclosed matenal Robertson first identified as the data enclosed in the letter three pages of material shown him by the General Counsel. This identification was retracted when it was shown that the materi- al had been prepared for a November 1, 1971, Board hearing and bore a notary's certification dated October 25, 1971 Robertson then delcared that the matenal without the notarization was enclosed in the October 15, 1971, letter On cross-examination, he retracted that identification again by stating, to identify that this was the one in response directly to [the Union's) letter off the top of my head, I don't remember " Again, on cross-examina- tion, Robertson was shown another set of data prepared by Respondent bearing a date October 14, 1971 The latter set was a combination of typewnt- ten and written material, in rough form when compared to the first-men- tioned data Robertson stated that "conceivably" the October 14 set could have been the enclosure On redirect examination , Robertson testified he did not know if the notarized document was mailed on October 15-and then continued, "Well, it was one or the other No I don't know " This conflicting testimony is set forth without additional comment it speaks for itself in strong support of the finding that Robertson was not a creditable witness 2. Ground rules; 31 articles were discussed dunng the negotiations The parties agreed upon the ground rules for negotiation in the first session. It was decided that a complete contract was not to be submitted, but the different articles were to be dealt with one at a time and disposed of accordingly. Either party could "present a proposal, try to do away with it, and then go on to the next." Either party in the future could "go back to the agreed portion of the proposals if they conflicted with anything that we were talking about at the time." 8 During the sessions, some 31 items were discussed.' Twenty were agreed upon. Of the latter, accord was reached on 13 by April 20, 1972;'0 on the other 7 through May 31 with the assistance of a Federal mediator at the meetings.I I No article in its entirety was agreed upon from that date through the last bargaining session on September 29, 1972. Eleven articles were proposed and not agreed upon. The discussions between the parties involving six of those and two that were agreed upon, are dealt with in some detail hereafter 12 to show (a) the course of the negotiations and (b) the behavior of the parties with respect thereto. The analysis dealing with these eight items, combined with Respondent's union animus and the two illegal unilateral actions shown below,13 lead to the conclusion that Respon- dent was not bargaining in good faith as required by Section 9(d) of the Act.14 Such bad-faith bargaining constituted a refusal by Respondent to bargain with the representatives of its employees in violation of Section 8(a)(5) and 8(a)(1) of the Act. E. Respondent's Illegal Unilateral Actions During the Bargaining Sessions Respondent had no written policy establishing seniority. The records show that employees received two benefits that were dependent on length of service. One was vacations; the other was a gold-watch award. As to vacations, the policy of Respondent was that an employee was eligible for 1 week's vacation after 12 months employment; and 2 weeks dunng each year thereafter.15 As to gold watches, an em- 8 Also, it was agreed that "all matters were tentative until final signatures were affixed," and the final contract would require ratification by the union membership 9 The use of the word "item" is inclusive of articles in the proposed con- tract subparagraphs in a particular article, and some items agreed upon orally with no particular designation 10 They were preamble, bulletin board, plant visitation, leaves of absence, term of contract, grievances, jury duty, holiday failing on weekend, injured employees, funeral leave, probationary employees, shutdown by the Compa- ny, and break periods 11 They were safety and sanitation, strikes and lockouts, contracting and subcontracting, nondiscrimination, union responsibility, purpose and intent, and discipline and discharge, and some but not all the work rules therein 12 Sec F(l) through (8) 13 Sec E(l) through (6). 14 Sec 9(d) of the Act defines collective bargaining as "the mutual obliga- tion to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment, or the negotiation of an agreement or any question arising thereunder but such obligation does not compel either party to agree to a proposal or require the making of a concession 15 When Robertson became superintendent in 1968 he posted on the Continued 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployee received a gold watch after 10 years of service. 16 While the negotiating sessions were in progress, Respondent unilaterally (a) on January 10, 1972, discontinued its prac- tice of crediting broken periods of employment towards seniority; and (b) on May 11, 1972, it discontinued its prac- tice of awarding gold watches to employees completing 10 years of service. It is found, as shown hereafter, that each unilateral act of discontinuance was a refusal to bargain. Each act showed that Respondent continued its union ani- mus unabated. Each act gave color to and supported the conclusion that Respondent was negotiating with the Union in bad faith.17 In furtherance of this thought, the two acts of discontinuance will be dealt with before treating with the bad-faith bargaining issue. 1. Respondent's practice and custom of crediting broken periods of employment towards seniority The General Counsel contends that in January 1972 Re- spondent unilaterally discontinued its practice of crediting broken periods of employment towards seniority, i.e., Re- spondent then started to consider each returning employee after a break in service as a "new employee" from the date of his return. Respondent in its brief admits that in 1972 Robertson told returning employees they were "being re- hired as new men." Respondent's brief asserts that there is no testimony that the employee's status as a "new man" affected his vacation entitlement; nor is there testimony that refutes Robertson's statement "that since 1968, the last hire date determined an employee's seniority . . . and that, to the extent such policies constituted a form of recognition of seniority, Respondent's policy and practice with respect to vacation . . . remained unchanged."18 Respondent's as- sertions are incorrect. Entwined in Respondent's vacation policy grew the cus- tom and practice of dealing with employees who left and returned. The record shows that Respondent, from the earli- est time mentioned in the record, credited returning em- ployees with previous service for the purpose of determining vacation entitlement. An example of this practice was em- ployee Mendoza. He started working for Respondent in February 1954, quit in October 1959, and returned 7 months later on May 2, 1960. In May 1961, he received 2 weeks' Company's bulletin board, policy bulletin 2, effective date January 1, 1969, which read as follows Each FULL time employee who has completed one year (12 months) service will be allowed one ( 1) week (5 working days) vacation with pay based on a forty (40) hour week at regular base pay Each year there- after, two (2) weeks (10 working days) based on a forty (40) hour week will be allowed i6 The gold-watch policy was not stated in written form 17 In the afternoon of May 11, 1972, following the bargaining session, the employees struck As stated below, the strike arose from Respondent's refusal to bargain and is found to be an unfair labor practice strike. is Robertson's testimony was not in keeping with these assertions. He testified that in actual practice the Company policy whit regard to vacations whether written ( "[the Company] had a written policy but it wasn't fol- lowed") or unwritten whether dealing with broken or unbroken periods of employment, "was discretionary" with management , and "subject to vari- ance." He testified further that such was the policy before January 10, 1972, and it "has not . . been changed since .11 vacation as a matter of course. Another variant to the vaca- tion policy was payment of wages to employees in lieu of vacation. During the same period of time, the record shows that when employees wished to work instead of taking vaca- tion (whether 1 or 2 weeks) Respondent permitted them to do so and paid the vacation money extra. The record shows that for the 2 weeks' vacation some employees took the 2 weeks off or worked I or both weeks under the pay arrange- ment. Each of the following employees testified from his own experience and knowledge that the foregoing custom and policies existed at Respondent from the time they were first employed: Carlos Mendoza who started in 1954; Martin DeLeon in 1961; Refugio Arrendondo, Jesus Silgiero, Fer- min Ybarra, each started In 1964; and Juan Mosqueda in 1970.19 In addition to Mendoza, the record contains the follow- ing examples of the operation of Respondent's vacation policy. DeLeon, after 7 years, quit Respondent in 1968. He returned November 17, 1969. There was no discussion with any supervisor about seniority. DeLeon took 2 weeks' vaca- tion in 1970 and again in 1971. He testified he took "one- week vacation off and . .. worked right on through the other one, got paid for both of them." 20 Ybarra, after 3 years, quit Respondent in 1967 and returned in 1968. In January 1969, he received 2 weeks' vacation. The foregoing shows, contrary to Respondent's assertion and Robertson's testimony, that subsequent to 1968 broken periods of employment were credited to an employee's sen- iority 21 and that the last hire "did not determine an employee's seniority." 22 Accordingly, on the basis of the foregoing and on the record as a whole, it is found that, since at least 1954, Respondent maintained a policy and practice of crediting broken periods of employment to an employee's seniority for vacation purposes and further that in keeping with the custom the date of last hire did not determine the employee's seniority. 2. Conclusion that on or about January 10, 1972, Respondent unilaterally ceased to credit broken periods of employment After quitting in September 1971, Ybarra returned to work on January 10, 1972. He was hired by Supervisor 19 Robertson testified that he didn't question the employees' testimony that the continued their prior seniority after a break in employment 2 This system of I week off and I week paid was arranged with his supervisor, Dabelgott , who did not testify in this proceeding No question was raised that DeLeon was entitled to 2 weeks 21 This conclusion is further supported by Respondent's treatment of Men- doza when it awarded him a gold watch for 10 years' service As stated above, Mendoza was away for a 7-month period from October 1959 to May 1960. In 1966, after some employees were given watches, Mendoza spoke to Super- visor Shoemaker about such an award Shoemaker told him he would get it, but he would have to make up the time that he lost when he quit. In October 1966, Mendoza was awarded his watch Apparently, the 10-year period was computed from the time he first came to work It is further supported by Robertson, himself, who testified that he did not question that events such as listed above occurred 22 It is noted that Respondent did not introduce its employment records to substantiate Robertson's statement that last hire determined the employee's seniority , or to show instances where broken periods of employ. ment were not credited to seniority LONGHORN MACHINE WORKS Dabelgott. He then spoke to Robertson, who filled out Ybarra's W-2 tax form. At the time, Robertson told Ybarra that Respondent had new rules and that he (Ybarra) was going to be a new man. DeLeon had a similar experience and conversation with Robertson when he returned in Janu- ary 1972.23 In April 1972, Silgiero stayed away from work for 2 weeks. A day or two after his return, Robertson told him that he "was starting as a new man." 24 At the same time, he asked Silgiero to sign a W-4 tax form. A conversation between Robertson and Mendoza held in January 1972 confirmed the fact that Respondent was hir- ing as new employees the old employees who had had a break in service. After the return of Ybarra and DeLeon, they told Mendoza about Respondent's "new man" policy. Mendoza then spoke to Robertson. The latter told him that any man who quit his job and came back "lost everything they had" and would "start as a new man." 25 Robertson testified that his custom of telling a rehired employee that he was a "new man" existed prior to 1972. This statement is not supported or corroborated in any way and is not credited. Robertson also testified that in 1972 he told the returning employees they were "new men." In one case, he testified that the "new man" statement occurred in the following manner : Robertson was explaining to the re- turning employee how to fill out a required W-4 tax form. The employee responded, "Just like a rehire, I mean, just like a new man." Robertson merely repeated, "Just like a new man," and that was how the "new man" story got started. This version of Robertson's also is not credited. The story does not agree with Robertson's first version that he customarily told returning employees they were " new men." The multiplicity of explanation for the "new man" story lends further support to its being discredited. Finally, Rob- ertson testified that he told Ybarra he was a new man be- cause Ybarra had quit. Such a statement was contrary to the practice and customs already shown. From the above, it is clear that in January 1972, when Robertson told Ybarra and DeLeon they were new employ- ees, he was also telling them that each as a returning em- ployee would only get I week's vacation the first year in- stead of the 2 they were entitled to. He was telling them that Respondent's previous policy and practice was no longer in effect.26 In doing so, Robertson unilaterally changed the conditions of employment of the employees without con- sulting with or negotiating with the Union. Such an action under the circumstances of this case is a refusal to bargain violative of Section 8(a)(5) and (1) of the Act.27 23 It is noted in this connection that Ybarra and DeLeon each had previ- ously quit and previously returned without loss of seniority 24 As stated above, Silgiero for the past 7 years was getting 2 weeks' vacation 25 Robertson did not deny this conversation with Mendoza Of Mendoza, Robertson testified , "I wouldn't doubt Carlos He is an honorable man " 26 This also applies to Robertson 's statements to Ybarra and Silgiero 27 See Purolator Products, Inc, 160 NLRB 80, 81, Cloverleaf Cold Storage Company, 160 NLRB 1484, 1485 Unilateral action by itself "amount[s] to a refusal to negotiate about the affected conditions of employment . " and the Board "may hold such unilateral action to be an unfair labor practice in violation of Section 8(a)(5) without also finding the employer guilty of over- all subjective bad faith " N L R B v Benne Katz d/b/a Williamsburg Steel Products Co, 369 U S 736, 747 (1962). However, this case goes beyond the Katz doctrine and shows that Respondent has bargained in bad faith, and 3. Respondent had a practice and custom of awarding gold watches to employees with 10 years of service 689 The parties are in accord that Respondent had estab- lished the custom of awarding gold watches to employees to honor 10 years of service. The General Counsel contends that in the bargaining session of May 11, 1972, Respondent unilaterally discontinued this custom. Respondent, as testi- fied to by Robertson and asserted in its brief, contends that the custom had not been halted but still continues. The record, as hereinafter shown, supports the General Counsel's contention. By unilaterally discontinuing the gold-watch awards on May 11, 1972, Respondent violated Section 8(a)(5) and (1) of the Act.28 It is so found 29 The subject of gold watches first came up at the bargain- ing session of December 14, 1971, when Mendez informed Shawd that four employees had completed 30 10 years of service." Shawd answered that the matter would be taken care of at a future date. During March 1972, three of the men listed above received their watches. Respondent bought a watch for the fourth employee who quit before it was awarded 32 At the meeting of April 11, Mendez asked Shawd what Respondent's position was "on the ten-year service watches." Shawd said, "He didn't wish to answer at that time." At the next meeting on April 20, when Mendez asked about gold watches, Shawd answered that he had intended to speak to Brown about it, but had overlooked doing so in talking about another matter. "Gold watches" surfaced again at the May 11 meeting. Mendez testified the conversation went as follows: I asked him about the gold watches. And Mr. Shawd verbally said, "We will discontinue the practice of pass- ing out gold watches because Mr. Brown has indicated to me that the watches are not taken in the context that they are given out, and that the employees are pawning the gold watches, so Mr. Brown has been hurt by this and therefore he will discontinue the practice of pass- ing out gold watches." I indicated to the Company that this was a benefit that the employees were looking forward to, and were they going to give anything in return for this benefit. That we had indicated that a week's vacation after ten years this unilateral action is part of the overall bad-faith pattern 28 See fn 27, supra 29 This finding takes into consideration the fact that Robertson and Shawd at the hearing and Respondent in its brief take the position that the 10-year award still continues The later assertions constitute ( 1) a recanting of Respondent's unilateral action of May 11, 1972, and (2) a reinstatement of the 10-year gold-watch award policy Respondent' s change in position 6 months after its unilateral action in no way eradicated either its illegal action or the initial adverse effect of that action on the Union and on the bargaining process, nor does it warrant the nonissuance of an order in light of the fact that the action is part of the pattern of bad-faith bargaining found herein "' Shawd's notes reflected that the subject came up at the January 11, 1972, meeting 31 They were Feliz Mendoza, Ramon Costello, Ramon Pompa, and Dom- ingo Lombardo 2 The watch was properly engraved. The record does not indicate that Respondent was not willing to award it to the employee 690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD service, instead of the watches, would be acceptable to the Union. Mr. Shawd said, "No, nothing in return." Shawd testified as follows:33 We went on to other subjects under economics and came to watches and I stated, "We prefer to discontin- ue the watch presentation as it has not been accepted. The good will gesture on the part of the Company has been wasted." Mr. Mendez said, "You are taking away a benefit." I stated again that the watches were not appreciated or prized as intended as a presentation in recognition and they were pawned in some cases. 4. Conclusion that on May 11, 1972, Respondent unilaterally ceased to award gold watches Respondent places great weight on the fact that Shawd used the words "We prefer to discontinue the watch presen- tation...... Respondent asserts that such language may not be read or understood to mean actual discontinuance of the practice. Rather that the language could be read only to mean that the subject was open to negotiation and discus- sion; that, in fact, the custom was not discontinued. The precise words used by Shawd are in doubt. It is not improbable, in view of the finding herein, that Respondent was bargaining in bad faith, that the Shawd/Robertson ver- sion were the words Shawd used. Whatever the words were, it is not considered essential that the exact words be de- termined in order to find what Respondent's intent was when Shawd gave Respondent's position to Mendez. The circumstances under which the conversation occurred and the record as a whole lead to the reasonable conclusion that the intent of Shawd was that the "gold watch" award be forthwith discontinued. If he used the word "prefer," Shawd did so to give technical or surface effect to the idea that he was holding the gold-watch item as "a subject for negotia- tion." Shawd testified that he had had to talk to Brown to find out what the policy of Respondent was as to the "gold watch" awards. When he spoke to Brown the latter told him that the watches were not being appreciated by the employ- ees nor prized as intended and some were even pawned. After this conversation, Shawd told Mendez that he now had the "firm position from the Company ... and gave it" to Mendez. Brown was the officer of Respondent who final- ly passed on the gold-watch policy. In the light of Brown's strong and positive statement, it is unreasonable to con- clude that his "firm position" as to gold watches was "nego- tiate." It is reasonable to conclude that Brown wanted the 33 Robertson confirmed Shawd He testified Mr Shawd said that the Company preferred to stop giving gold watches And, well , I don't remember the rest of the details regarding it, other than the fact that he preferred, the Company did, preferred to stop giving gold watches. Robertson also confirmed that Mendez told Shawd, "You have taken away a benefit from the employees " discontinuance of the practice because of the treatment of the awards by the employees.34 Whatever Shawd's language, Mendez accepted Shawd's statement as that of discontinuance. This was clearly shown from his response that Shawd was "taking away a benefit" from the employees. Shawd did not deny Mendez' assertion, but accepted Mendez' interpretation when he explained again that the watches were not being appreciated as intend- ed, were being pawned, etc. Acceding to Respondent's posi- tion, Mendez asked for I week's vacation 35 as a substitute for the gold watches. Shawd said, "No, nothing in return." The subject was not brought up again during the remainder of the sessions. In the full context of the bargaining negotiations between the Union and Respondent, it is reasonable to conclude that Respondent on May 11 unilaterally halted the practice of awarding gold watches to its 10-year employees, and did so without consulting with the Union. This conclusion is sup- ported by the continuing union animus shown by Respon- dent and the illegal 1972 vacation action, and is in keeping with the pattern of bad-faith bargaining found hereinafter.36 5. The employees strike on May 11, 1972 Respondent's employees struck the Company about 2 p.m. on May 11, 1972. The events immediately preceding the strike follow. As stated, the Federal mediator had been present at the bargaining sessions since April 28, 1972. On May 8, he sent both parties a letter containing articles he thought might be acceptable to both to be dealt with at the May 11, 1972, meeting. The night of May 10, 1972, the employees at a union meeting unanimously authorized a strike. The May 11 meeting opened with a discussion of some of the items in the mediator's letter. A nondiscrimination clause was agreed upon. Recognition and discipline and discharge were accepted by the Union but rejected by Re- spondent. After lunch, the mediator asked if the parties could agree on any of the items left open that morning. Mendez stated he was willing to accept the proposals of the mediator. Shawd answered that he was trying to protect the Company from undue encroachment and to give it freedom to operate. To that end, he was proposing safeguards. At the moment, he was willing to "meet and continue to meet and propose and negotiate." Arbitration was taken up next. Shawd offered to amend his proposal to make a disciplinary layoff in excess of 5 days subject to arbitration. The Union rejected the offer. Discipline and discharge was again dis- cussed. Checkoff came up next. Shawd stated his position 34 It is recognized that the conclusions are inferences But it is considered that, under the circumstances herein, the inferences are well founded and permissible Cf Shattuck Denn Mining Corporation v N L R B, 362 F 2d 466, 486 (C A 9, 1966), dealing with an 8(a)(3) situation 36 Shawd testified that Mendez asked for 3 weeks 36 The language of the Court of Appeals for the Fifth Circuit in Armstrong Cork Company v N L R B, 211 F 2d 843, 847 (C A 5, 1954), is appropriate here, "Good faith compliance with Section 8(a)(5) and (1) of the Act presup- poses that an employer will not alter existing 'conditions of employment' without first consulting the exclusive bargaining representative selected by his employees, and granting it an opportunity to negotiate on any proposed changes " Unilateral changes , such as that involved here, as the court stated, "naturally [tend] to undermine the authority of the certified bargaining agent and [violate ] the above sections of the Act " LONGHORN MACHINE WORKS was unchanged. Mendez asked Shawd if there was any change in Respondent's economic package. Shawd said Respondent's offer still stood, "Wages you get 10 cents and a holiday of your own choosing." 37 Shawd when asked said he had no answer with regard to Respondent's position on Christmas bonuses. Shawd then told Mendez that Respon- dent was discontinuing the practice of awarding gold watches. After this, Mendez met with the mediator but not in the presence of Respondent's representatives. He told the medi- ator about the unanimous strike vote and asked the media- tor to inform Shawd of that fact. The mediator did so. Shawd had no comment. Mendez left the meeting to hold another meeting of the employees, at which the occurrences at the session were discussed. Mendez and the committee were instructed to go back and make another effort at ob- taining agreement from Respondent Shawd told Mendez there was no reason for his moving from his present posi- tion; that he was willing to meet, to bargain, and to negoti- ate. Mendez and Shawd agreed on May 18 for the next meeting. The employees were told of the events, struck, and estab- lished a picket line. The strike is still pending. 6. Conclusion that the strike is an unfair labor practice strike The record shows that a number of items, including eco- nomic issues, were the subject of bargaining on May 11. The record also shows that Respondent was engaged in the fol- lowing unfair labor practices at the time the strike was called: (1) Respondent had engaged in bad-faith bargaining since November 17, 1971;38 (2) on January 10, 1972, Re- spondent had unilaterally discontinued crediting broken pe- riods of employment to seniority; and (3) on May 11, 1972, the day of the strike, Respondent unilaterally discontinued the practice of awarding gold watches to 10-year employees. The record does not reveal the stated causes for the strike of the employees. The existence of the foregoing unfair labor practices at the time of the strike compel the inference that they, among other items of disagreement, were the cause of the strike. It is well established that, under these circumstances, "the strike was caused, at least in part, by the Respondent's breaches of its bargaining obligation and was, from its inception, an unfair labor practice strike." Stuart Radiator Core Mfg. Co, 173 NLRB 125, 126. See N.L.R.B. v. Comfort Inc., 365 F.2d 867, 874 (C.A. 8, 1966), and N.L.R. B. v. Texas Coca-Cola Bottling Co, 365 F.2d 321, 322 (C.A. 5, 1966). F. Negotiations by Respondent Showing Bad-Faith Bargaining It is not considered necessary to deal with every action of Respondent to show that it negotiated in bad faith. The 37 The Union had previously asked for 97 cents across the Board, including fringe benefits 3 The charge herein was filed May 17, 1972 November 17, 1971, is the beginning of the 10(b) period established under the Act for the filing of charges 691 General Counsel referred to eight subjects to show Respondent's illegal action. They are union recognition, checkoff, seniority, jury duty, safety and sanitation, strike and lockout, insurance, and arbitration. With the exception of safety and sanitation, each of these items significantly evidences the fact that Respondent has negotiated in bad faith. Such a showing is sufficient without going into greater detail.39 Accordingly, each of the above items will be dealt with separately and in the order given to show how they contributed to the stated violation. 1. Union recognition 40 On November 9, 1971, the Union offered the Respondent a union recognition clause reading as follows: The Company recognizes the Union as sole and exclu- sive collective bargaining agent for all production and maintenance employees including truck drivers em- ployed at the employer's Kyle, Texas machine shop, but excluding all other employees including clerical employees, guards, watchmen and supervisors as de- fined in the Act. The quoted language is that of the certification of the Union after the election. Shawd wanted to change the language to include, among other things, the location of the plant. This was done. He ended by saying he would make a counterpro- posal. In December Respondent stated that it wished to add a one sentence paragraph to the clause reading as follows: The Union representation is limited to the employees designated above and does not apply or pertain to the work. Shawd explained that the purpose of the addition was to enable Respondent to bring in people from outside to use its machines and facilities. When asked by Mendez if "this would not displace the bargaining unit employees?" He said, "Frankly, if you want an honest answer, yes." 41 Men- dez countered that the Union would agree to other employ- ees coming in and doing limited work, or management trainees coming in and using Respondent's facilities, so long as Respondent would identify them to the Union and state what their position was going to be. Shawd responded, ` ... this does not satisfy us." No agreement was reached. Both parties withdrew their proposals. The meeting on April 28'42 opened with a Federal media- tor present. The first clause taken up was union recognition 39 This will prevent an already too detailed decision from becoming longer 40 This clause was discussed at a greater number of meetings than shown in this subsection The fact that a meeting is not listed does not mean that the item was not brought up there Only significant negotiations are discussed herein The same action will be adopted for the other seven items listed. 4 Shawd in response to a question by counsel admitted "that technically it could happen but it was not the intent " Shawd did not agree that Mendez asked the question at this session but admitted on cross-examination that Mendez did so at several meetings and that he agreed with Mendez each time 42 According to Shawd, there was a long discussion about "union jurisdic- tion and other matters connected with recognition" at the meeting of April 20 His testimony contains no other details Mendez does not include the Continued 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as amended by Respondent 43 The mediator pointed out that there was really nothing in Respondent's proposal that would abrogate [management's rights] to manage the busi- ness. He proposed to add, "nothing in the clause abrogates management in its right to manage the business as spelled out in Article so and so." a4 The Union accepted the mediator's proposal. Respondent rejected the mediator's proposal on three grounds- ( 1) the management rights clause had not yet been agreed upon; (2) the proposal did not direct itself to the problem contained in Respondent's proposal; and (3) the question of jurisdiction. To the mediator's statement that the management rights clause would be agreed upon, Respondent answered "your propos- al does not direct itself to the problem in the clause in the Company's proposal." 45 The article was then put aside. Before the next meeting of May 5, the mediator sent to both parties copies of articles he proposed to settle the dif- ferences that existed. He proposed the following union rec- ognition clause: 46 The Company recognizes The Food Processors and Allied Workers Local Union No. 113 and the Interna- tional Union of United Brewery, Flour, Cereal, Soft Drink, and Distillery Workers of America, AFL-CIO, as the sole representative of all production and mainte- nance employees employed at the Employer's 2600 Southwest Military Drive, San Antonio, Texas, plant, including shipping and receiving employees, ware- house employees, truck drivers, sanitation employees, plant clerical employees, cafeteria employees and qual- ity control employees, but excluding all office clerical employees, professional employees, guards, watchmen and supervisors, including lead persons as defined by the Act. The Union accepted the proposal allowing for the necessary name and other detail changes. Respondent rejected the clause because it was duplicative of the Union's original proposal and "did not approach the problem" Respondent had in recognition. Shawd explained that Respondent "wanted specific exclusion of Union jurisdiction over the work, that what [Respondent was] trying to do was maintain the Company's authority over its own facilities and equip- ment and property." On May 9, 1972, the mediator sent both parties another letter containing other proposed articles. One of them was discussion in his testimony In any event, Shawd does not indicate that an%thing was accomplished at this meeting 3 Sometime during this session , Respondent offered to substitute the work jurisdiction for representation in the sentence it had proposed 44 The article "so and so" referred to the management rights clause which had not yet been numbered or agreed upon 45 The record does not show that Shawd explained in detail during the session what the "problem" was On cross -examination, he testified Q Well, you made reference yesterday several times to the problem that was presented What is this problem? A The problem is that under some circumstances where there is a union there arises arguments about who can work on this job and who can be removed from this job , who can come into the plant or come to the door of the plant and perform some work for their own benefit and I didn't want a jurisdiction agreement 46 As is evident, this is a recognition clause from a collective-bargaining agreement between another union and another company a union recognition clause that he had drafted as a compro- mise . At the May 11, 1972, meeting, the Union said it would accept it. Respondent did not. Shawd told the mediator that Respondent's thought was that "the Union represent the employees and not the work." The mediator told Shawd that Respondent had that. Respondent offered to insert the words "or who shall perform the work" after the word "plant" in the third line of section 447 The Union objected. The mediator then proposed that the words "nor who among the employees can perform the work" be inserted instead of Respondent's suggestion. Shawd rejected the mediator's proposal, stating as he had before that "this did not address itself to the problem [Respondent was] trying to cure by the second paragraph in [the original] Company proposal." At the next meeting on May 18, the mediator's union recognition proposal was brought up again. The mediator proposed that the words "nor the selection of the work force" be substituted for Respondent's words "or who shall perform the work," for insertion in paragraph 4. The Union accepted the proposal. Respondent rejected it stating:48 They wanted the latitude to bring other people in to work in the plant that did not belong to the bargaining unit, individuals to use the facilities . . . employees from Blank Company could come in and work in the facility and would not belong to the bargaining unit, would not be employees of Longhorn Machine, but would do the work and displace employees in the bar- gaining unit. The mediator then proposed to substitute as an insert the words "nor the selection of the work force or who shall perform the work." The Union accepted the change. Re- spondent rejected it, even though it included the language Shawd had proposed on May 1149 He offered no reason for the rejection. At the May 31 meeting,50 the mediator asked Shawd if he still objected to the language insertion last proposed by the mediator on May 18. Shawd mentioned that he would like the insertion to read "nor the selection of the work force nor who shall perform the work." When Mendez agreed to that, Shawd stated that he had not made a proposal but was working on the language. Shawd then proposed that he would accept the above language as an insertion in section 4 provided the sentence of his counterproposal of December 47 The issue between the parties centered around this section which reads as follows Section 4 In representing the employees, the Union makes no claim to usurp the right of Management to determine the work which will be performed at the Kyle, Texas plant, nor the right of management to determine its sources of supply, the machinery or processes it utilizes or its methods of sale, distribution or shipment of its finished product. 48 The excerpt in the text is from Mendez' testimony Shawd testified I pointed out that that does not meet the problem because that refers to the bargaining unit Mr Mendez said, "You are not talking about the employees." I explained, " It does apply to employees in their work assignment and to whomever may be brought in or permitted to come in to perform work in the plant or on the premises" 49 Shawd on cross-examination admitted this 50 From the credited testimony of Mendez Shawd's account of this meet- ing is vague and confusing LONGHORN MACHINE WORKS 7 were added. The following discussion then occurred: Mr. Shawd made the statement that he has made previ- ously about not being encroached upon, and that they want to have the right to be able to have people come in and use their machines or . . . employees of another company to come and use their facilities and their ma- chines to produce products that they would want to produce. And I asked Mr. Shawd if this means displacing the bargaining unit employees. Mr. Shawd said, `To be frankly honest with you, this could happen.' Q. . . . What happened then? A. The Union made a proposal to Mr. Shawd that we would agree to people coming in and doing limited work, limited work tasks, or individuals designated for Company management positions, as long as the Com- pany would identify them to the Union and what their position was going to be, that there wouldn't be any problem. The Company said this was not acceptable. At the next meeting on June 6, Shawd in answer to Men- dez' question stated he was firm in his position that he wanted his proposal of December 7 and tried to convince Mendez of its merits . At the June 29 meeting, Shawd brought up his December 7 proposal again offering to change the work "representation" to "jurisdiction." Men- dez, indicating that the words were synonymous, rejected the proposal. According to Shawd, Mendez at this time said, "As long as you don't bring a truckload of people to do the work we don't object." At the meeting of July 7, Shawd proposed the following as a substitute for Respondent's one-sentence paragraph of December 7: Section 2. In representing the employees, the Union recognizes the Company's jurisdiction and makes no claim to jurisdiction over or to usurp or interfere with the free exercise of the right of the Company to de- termine the work which will be performed at the Kyle, Texas plant and/or who shall perform such work, the right of the Company to determine its source of supply and the machinery or processes it utilizes or the sale of shipment of its products or outlets for distribution of its products. Mendez pointed out that Shawd was now offering a para- graph as a substitute for what originally had been a simple sentence. The sentence as Mendez read it said the same as the paragraph, except that the latter was more complex and made more definite the intention of Respondent to put a clause in the contract to do away with the security of the employees in the bargaining unit. Shawd pointed out he was trying to avoid an undue encroachment on "the Company's rights and prerogatives." Mendez reminded Shawd of the Union's obligation to represent the employees in the bar- gaining unit as set out in the certification . Shawd responded 693 that they were meeting and the Company was bargaining in good faith. Finally, Mendez told Shawd that, if they put the paragraph in the management rights clause, the Union would agree to it, if Respondent agreed to checkoff. To this Shawd responded, "Let's not kid ourselves about that. We don't want check-off." After lunch at the same meeting, Mendez gave Shawd a handwritten proposal as a counter to Shawd's additional paragraph. It read as follows: We mutually agree that there will be occasions when the Company may allow the use of their facilities and machinery to other individuals or companies for their use in manufacturing components alien to the normal flow of normal production. When this occasion is prev- alent the company will notify the Union no later than 3 days before the beginning of such operation and of any layoff, if impending, due to such operation. Shawd objected to the use of the word "alien," but neverthe- less the offer was not accepted by Respondent. At the meeting of August 11, Mendez brought up union recognition again. Mendez pointed out that much time had been spent on this subject. Shawd answered that Respon- dent was unwilling to move unless his section 2 was includ- ed in the clause because the Company "needed it in order to operate." After further talk, Shawd repeated his previous statement that he wanted the right "to bring in people from Blank Company to work there, people that did not belong to the bargaining unit." He stated as before that they would "displace bargaining unit employees." Then he continued that such displacement "might be good for the Company and good for the employees." His explanation of the last remark was that Respondent could "bring in more work and maybe later on they (the displaced employees) can be re- hired." After lunch on August 11, Shawd made the following handwritten proposal to replace his section 2 proposal of July 7. When he presented it, Shawd told Mendez, "I am not too sure it is exactly what we want." 51 In representing the employees, the Union recognizes the Company's jurisdiction and makes no claim to ju- risdiction over or to usurp or interfere with the free exercise of the right of the Company to determine the work to be performed and/or who shall perform such work, the right of the Company, at its determination and discretion, to enter into any arrangement or under- standing which will assign or permit the use of its ma- chinery, equipment or facilities to or by individuals who are not members of the bargaining unit or are not employees of the Company or by other employees for their use in performing work which may be for the benefit of the Company or for the benefit of the em- ployer or party so using such machine, equipment or facilities. In drafting this proposal, Shawd agreed with Mendez that 51 On direct examination, Shawd testified he made this proposal on August 11, on cross-examination , that he made it on July 7 694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD he had not taken into consideration the employees then in the bargaining unit because the Company "would want the right to replace them." Again Mendez told Shawd he would accept even this proposal if it were included in the manage- ment clause provided Shawd agreed to checkoff. Again Shawd said, "No." At the meeting of August 17, Mendez asked Shawd if he had worked anything out on recognition. Shawd said, "No," but he thought that at the last meeting it was agreed that Respondent's last proposal "would be in the recognition clause or in the management rights clause." Shawd contin- ued that he wanted his clause in the contract "somewhere with the same effect. . . . . At the meeting of September 29,52 Shawd stated he would try to adopt Mendez' suggestion and put "the Company draft on recognition in management rights"; that it would "take some working it but we will try." 2. Checkoff Both parties agree that "checkoff" was discussed at the first meeting on October 21, 1972. Then, Mendez gave to Shawd for his information a checkoff authorization card used by the Union. At that time, Mendez told Shawd that he understood that Respondent was opposed to the check- off. At the November 9 meeting, along with other proposals the Union submitted a checkoff provision.53 Shawd stated he would speak to his principals about the proposal. Mendez brought tip checkoff at the November 16 meet- ing. Shawd opposed it voluntarily. He informed Mendez that the Company's computer could not handle the check- off; that he did not know for sure.54 A little later in the meeting Shawd brought up a management rights clause. Mendez offered to accept it provided Respondent accepted the checkoff. Shawd refused.55 Checkoff was not discussed again until the meeting on February 25, 1972. At that time, Mendez explained to Rob- ertson the basis for checkoff. Shawd rejected it at that stage because he considered it to be a nuisance, had serious doubts about its legality, "because it was a matter of aiding a union" and Respondent did not wish to take on the ac- counting problem.56 No agreement was reached. On April 11, 1972, Respondent proposed a new and dif- ferent management rights clause to replace the former man- agement rights clause it had proposed.57 Mendez, as to the new clause, told Shawd that his "offer still stands, that I was swapping even, management clause for check-off." 58 52 At the meeting of September 15, according to Shawd, there was a long discussion on "Union jurisdiction over the work" without any results 53 The language of the proposal never came up for discussion 514 Shawd did not mention the capability of the computer again 55 At the next meeting, Mendez repeated the "swap" offer, Shawd main- tained his position 56 Shawd testified that he told Mendez, "We don't want it We have given you reasons You do want it So we will negotiate Something may develop " On cross-examination on this subject, Shawd testified to "about a dozen reasons" for opposing the check-off " He "had serious doubts of its legality because it was a matter of aiding a union because having read the labor law I had the impression that aiding a union was illegal It was one of the reasons I was opposed to the check-off I am not an attorney" 57 On cross-examination, Shawd admitted that Mendez had accepted the first clause conditioned upon Respondent's acceptance of checkoff Shawd responded that neither he nor Brown wanted check- off. A little later in the meeting, the subject of checkoff came up again. Shawd stated that Respondent had not changed its position and did not want checkoff for the reasons al- ready stated. On April 20, Mendez again made his standing offer to Shawd to "accept management rights as proposed by the Company if they accept our check-off." Mendez was "will- ing to maybe even modify the check-off." Shawd said, "No, not today." April 28 was the first meeting at which the Federal media- tor was present. After his review of the positions of the parties as to certain clauses, Mendez informed him of the standing offer of the Union to accept management rights in exchange for checkoff. Respondent's opposition to checkoff was noted.59 At the May 5 meeting, the mediator proposed to Shawd that Respondent trade the management rights clause and Respondent's proposed recognition clause for checkoff. Shawd "didn't accept it at this time because Respondent didn't want the check-off." 60 At the next meeting, in re- sponse to a question from the mediator about checkoff, Respondent reported no change in its position. At the May 11 meeting, the mediator went down the list of unresolved issues and checked Shawd's position on each. As to checkoff, Shawd stated, " . .. the Company was still not in favor of it for the reasons stated and by reasons of the absence of the reasons why [Respondent] should accept it?" The following conversation between Mendez and Shawd occurred at the meeting on May 316i Mendez asked Shawd: How about the proposal I made to you on Check-off, swapping it for Management Rights clause. Mr. Shawd indicated that they were not a collecting agency for Union dues, that check-off tended to coerce employees into belonging to the Union, and that there- fore they were opposed to having a check-off in their plant, and they were not going to be collecting agents for the Union, let the Union do their own dirty work. [Mendez] told Mr. Shawd that they collected for van- ous and sundry agencies, like the United Fund, Red Cross, what have you, insurance companies. Mr. Brown even collected for his loan business that he had there. So I said, "What would be wrong with having a dues check-off?" se On cross-examination, Mendez stated that his acceptance of the man- agement rights clause was conditioned upon Shawd's acceptance of the checkoff A little later in this meeting, Shawd proposed a nondiscrimination paragraph In some rather confusing testimony, Shawd stated that Mendez accepted it and suggested that Shawd include it in the management rights clause, and that Shawd agreed to this 59 On cross-examination, Shawd testified that Mendez had stated that under the management rights clause Respondent was retaining "control over everything" but nevertheless indicated willingness to accept it if Respondent would accept checkoff Further Mendez adopted the position that the Union would swap checkoff for whatever management rights proposal was on the table, and this union proposal continued in effect thereafter unchanged. 60 According to Shawd's testimony Mendez made no mention of this proposal 6 From the combined testimony of Mendez and Shawd LONGHORN MACHINE WORKS He said he didn't want to go into it at that time. Shawd also told Mendez that checkoff "means collecting from men who don't want to pay." Also that he had given other reasons, such as "coercion is implied in it" and "the men are not free to cancel out." He also stated that "the Company would be aiding a Union which I think ought to be illegal." In response to Mendez' offer to correct the checkoff, Shawd answered, "Well, it is a chore the Company does not feel obligated to take." At the meeting on July 7, Respondent's amended propos- al on recognition came up to which Mendez objected.62 Again Mendez told Shawd that if he placed the language in the management clause he would agree to it, if Shawd agreed to checkoff. Shawd responded, "Let's not kid our- selves. We don't want check-off.. . 63 A month later on August 11, Shawd proposed an amend- ed recognition clause which Mendez proposed be included in the management rights clause, if Shawd would accept the checkoff. Shaw said no he leaned away from checkoff. The next meeting, on September 15, opened with a discus- sion on checkoff. Mendez asked Shawd if he was ready to agree. Shawd again told him he didn't "intend to agree and didn't know if he would ever agree." Shawd admitted that at no time did he make any counter- proposal on checkoff to Mendez. He admitted further that there existed a number of items he could have proposed but did not, even though it was Respondent's position that any negotiation on checkoff depended on Mendez' making a proposal that "would make it more palatable" to Respon- dent 6`' 3. Seniority At the opening meeting, the Union requested information of Respondent showing the date of hire, rate of pay, and classification as the basis for a seniority roster. Shawd said it would be supplted.65 Toward the end of the meeting on November 9, Mendez, without making any proposal, asked both Robertson and Shawd what their feelings were about seniority. Robertson answered, "he didn't know anything. The only thing that he knew about seniority was bad...." Shawd remarked that what "he thought about seniority was it was phony." 66 A 62 See section on union recognition, above 63 Or "let's not kid ourselves, we are not agreeing to the check-off " 64 On cross-examination, he agreed that the following would have been a permissible proposal by Respondent Q But you could have offered a proposal that the escape period be every six months or every four months if you wanted to give the employ- ees who didn't want to pay the Union any more a way out, couldn't you? A What do you mean that I could have" Q Well, a counter proposal on check off so instead of it being on an annual basis, the escape period-like ten days before and ten days after the anniversary date-permit a man to do it for a shorter period A That would have been permissible to have proposed 65 The information was handed to Mendez at the meetings of March 9 and 16, 1972 Shawd testified that at the April 20 meeting he gave Mendez a "new seniority list" The record gives no further details on this new list 66 On direct examination , Shawd testifying from his notes stated that at the November 9 meeting Mendez presented some 10 proposals, one of which was seniority, as to the latter, he made no comment because it was complicated and required study On cross-examination, he admitted that the last-men- 695 union seniority proposal was submitted for negotiation on December 14 67 It was passed for study and further action. No action was taken on the proposal until February 25 when three of the subsections were agreed to and others left open. Respondent's position according to Shawd was that "seniority in many cases had been a burden on operations and a cause of considerable interference and the Company wanted to avoid that in the Seniority Clause." At the March 10 meeting, the Company submitted a counterproposal on seniority that incorporated a section dealing with probationary employees.68 There was much discussion but no agreement. At the March 17 meeting, Mendez and Robertson worked out a classification system which both thought would be operative. After lunch, Shawd stated that the system was not workable in Respondent's plant. His point was that there was no essential difference among the jobs; they all required about the same degree of skill and responsibility and that the system was unacceptable. At the March 23 meeting, Robertson and Mendez again worked on different classification groups for seniority purposes in order to ena- ble the men to have a system under which promotion, demo- tion, and layoff could be controlled.69 After the work was completed, Shawd again stated it was unacceptable because it "didn't fit in with Respondent's set up." ° Shawd also stated that "it was practically impossible to establish a sen- ionty program based upon job differences." Mendez asked the question that if there were no distinction among the classifications how would the employees exercise seniority to move up in the job or in his wage rate. Mendez proposed an automatic system of rate progression which was rejected. Efforts at classification of employees ceased after this ses- sion. At the April 26 meeting, the mediator stated he would submit a seniority clause for the approval of both parties. He did so at the May 5 meeting by offering a copy of a honed testimony was error He also admitted that he had made the "phony" comment, but perhaps he had been confused on the date Finally, he admit- ted that the seniority proposal was made, but during the December 14 meet- ing This proposal contained nine subsections and is too lengthy to be repro- duced here. Sections will be referred to hereafter as the need anses 68 Shawd testified from his notes that this proposal was submitted on March 10 and also March 28 The March 10 date is found to be correct 69 Robertson does not deny that he worked out the classification system twice with Mendez His testimony, not in accord with Shawd's, as to what occurred is general and vague Q . I just asked you did you spend considerable time-with Mr Mendez in working on classifications and job descriptions" A All right Q What was the product of the joint effort by yourself and Mr Mendez" A Well, it ended up like I was saying, that I felt that it would be unfair to, as an example, have one man called a lathe operator, have one man called a chucker operator, when they both would do basically the same thing, and in a lot, in most cases, handle the same parts, but due to a technicality in job classification be paid different rates of pay, everything else being equal So this is what it really boiled down to Q Did you discuss this problem with Mr. Mendez? A Yes, sir, he was aware of it I talked to him 70 Shawd in essence affirmed the conversations between himself and Men- dez Again testifying from his notes, he placed a conversation on March 28 instead of March 23 as does Mendez Shawd testified he reported to Mendez that he "had investigated [the classification question] with the shop manage- ment and found it unacceptable to them 696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD seniority clause in what was called "the Glasstron contract." Discussion followed and continued on this clause through the May 31 meeting. Some language changes were made. The main point of disagreement arose from the 6-month penod provided therein for recall after layoff of employees. Shawd asked for a 3-month recall period. The Union point- ed out that its original seniority proposal called for a 12- month penod. According to Shawd, at the meeting of May 31, he told the mediator that the Company's first proposal as amended by the Glasstron clause would be acceptable to him "if any conflicts are removed"; that Respondent would "accept the new in place of what had been agreed to where there is conflict"; that this acceptance was based upon a 3-month recall period. Again Mendez objected to the 3 months but stated he would go along with 6 months. The question was passed. On June 6, Respondent submitted an amended seniority proposal which incorporated the Glasstron proposal as pre- viously amended by Respondent. Discussion occurred. Again the main point of disagreement was the recall period in layoff. Mendez again asked Shawd if he was adamant about the 3-month penod. Shawd answered that he was willing to go to 2 months if that suited Mendez.71 On this note, discussion stopped. On August 17, the parties agreed to the first two para- graphs of the Company's proposal on seniority. Discussion on other sections produced no agreement, particularly on the question of 3 versus 6 months for the period of recall. Again the question of eliminating conflict arose. Mendez asked Shawd if he would accept so much of the seniority clause as had been agreed upon, eliminating the items in conflict Shawd replied this would take some study On September 29, 1972, Shawd submitted a new seniority proposal, which also included the "Glasstron" clause. There was much discussion on Respondent 's proposal. Many items were agreed to, but the parties were still apart on the 3-month/6-month recall period. In response to Shawd's in- sistence that it be 3 months, Mendez pointed out that Re- spondent could close down for that short a time and reopen with all employees as new employees. Shawd then verbally proposed that a man on layoff for 60 days or more loses his seniority. Shawd did not change his position, though Men- dez pointed out to him that the Glasstron proposal origi- nally provided for a 6-month period and that Shawd himself had changed that to a 3-month period. 71 Shawd does not deny that he answered "2 months " In direct examina- tion, he testified that at this meeting Mendez and he were "hung up on the 2 months and 3 months recall " The continuation of his testimony is not clear and has some indication in it that Mendez made the 2 months' statement rather than Shawd He continued Mr Mendez said, "We are apart on 3 months We want 2 months, and then said , "We are still hung up on 2 months " I said, "I guess so " The record clearly shows that 2 months was mentioned Both Shawd and Mendez so testified As the record stands, it is unreasonable to conclude that Mendez made the statement He had origi- nally asked for 12 months recall , indicated his willingness to accept the 6 months of the Glasstron clause , and flatly rejected Shawd's 3-month period It is conceivable that Shawd was being facetious when he said 2 months, but facetiousness under these circumstances was completely out of place That Shawd made the statement and in all seriousness is supported by the fact that later at the September 29 session he proposed a 60-day period of recall for laid-off employees , a period consistent with the 2 months mentioned above For the foregoing reasons and on the record as a whole, the Mendez version of this occurrence has been credited Shawd denied that he made the verbal proposal that a man on layoff for 60 days or more loses his seniority; that Mendez was wrong when he testified that Shawd had said that. Shawd stated he had mentioned 60 days but not in connection with layoff. On cross-examination, Shawd in- sisted on testifying on this subject "from memory." He was asked what was his 60-day proposal. He answered, "Let me testify from memory on that because it is clear in my mind that I was proposing . . . that an employee absent over 60 days but being continued on the roll would not accumulate benefits of service time for the period which exceeded the 60 days. This had nothing to do with layoff and recall." On the record as a whole and for the reasons hereinafter set forth, Shawd's version of this conversation is not credited. Shawd's testimony on direct examination does not agree with his testimony on cross-examination. Shawd testified on direct on November 6. He referred to Mendez' example of the 3-month shutdown. He continued, "We want to provide that an employee does not accumulate seniority while off on leave of absence over 60 days." After Mendez disagreed, Shawd "explained that this referred to absence in excess of 60 days when the man was on leave. It was not associated with layoff and recall." Shawd testified on cross on November 7, 1972, the day after his direct testimony. Were the words as clear in Shawd's memory as he asserted during cross, no reasonable explanation is shown why Shawd did not use those words on direct. When told how he testified on direct he re- sponded, "I don't recall saying it that way. I was attempting to say it as I have said this morning; to the point that the first 60 days would be treated as just normal absence." The foregoing clearly shows that Shawd's capacity for verbatim recall is not good. This conclusion is supported by his gener- al testimony on the stand even when testifying from his notes. Despite Shawd's statement that he was quoting from me- mory the language he used at the September 29 meeting, his memory was not good in dealing with notes he took of the meeting. On cross-examination, Shawd agreed with the General Counsel that his rough notes of the meeting showed the quotation "We want to provide that employee does not accumulate seniority while off over 60 days." These words were written in blue ink with a wide-tip pen. Shawd agreed that inserted on the notes in green ink with a ballpoint pen were the words "leave of absence." He testified that he had inserted the last three words after September 29, but had no recollection when he had looked at the notes after Septem- ber 29,72 or when he had made the insertion, nor could he testify precisely why he inserted the words.73 It is further pointed out that at the December 14, 1971, session, an article dealing with and entitled "Leave of Ab- sence" had been proposed. It had been the subject of discus- sion at several meetings thereafter and finally had been agreed upon by Shawd and Mendez on January 11, 1972. On September 29, 1972, Shawd made no reference to this 12 Shawd stated that he had not looked at the notes in preparation for trial but that even though he knew there weren't any future sessions, " it didn't hurt to go through them and see in preparation for any meeting that mtAht come " Shawd testified, "I think I remember doing it when I realized that the notes didn't say what I was trying to say " LONGHORN MACHINE WORKS article.74 It is considered reasonable that Shawd would have done so if he were talking about leave of absence. The record contains no explanation of his failure to do so. This failure is made more inexplicable by the fact that the article provides for a 30-day leave of absence and the loss or reten- tion of seniority resulting therefrom. The inconsistency be- tween the time period agreed upon and the 60 days proposed by Shawd, absent other facts, strongly supports the conclusion that Shawd did not mention leave of absence on September 29, 1972. Cisneros, a member of the union negotiating committee, was present at the September 29 meeting. He testified that he took notes at the meeting. He read from his notes the statement "Company proposed that an employee on layoff more than 60 days cumulative does not gain seniority" and testified that he recalled no "reference to leave or absence of leave" at the meeting. Respondent did not question Cisneros. Mendez in rebuttal to Shawd testified from his notes that, as to this proposal, "The Company proposed the loss of seniority if a man is on layoff for a period exceeding more than 60 days." 75 No questions were asked of Mendez either. On the record, as a whole and in keeping with the fore- going analysis, it is found that at the September 29, 1972, meeting Shawd verbally made a counterproposal that em- ployees lose seniority if they are on layoff for more than 60 days.76 4. Jury duty At the first meeting, Mendez asked Shawd and Robertson for information concerning certain employment practices and customs at Respondent's shop including that of leave forjury duty. On November 9, Shawd with Robertson pre- sent told Mendez that Respondent's policy was to give the employee leave for fury duty and to pay the employee the difference between the employee's pay and the amount the court paid for jury duty. On March 9, 1972, Mendez and Shawd agreed on a clause incorporating the stated policy, again in Robertson's presence.77 During the 30th meeting, on August 17, Mendez pointed out to Shawd that he had agreed to the jury duty clause based on the information given to him by Robertson and thus had negotiated some of the employees' rights away. It turned out that Robertson had given Mendez erroneous information. In actual practice, Respondent paid employees full pay while on jury duty. The fee paid by the court was additional pay for the employee. Robertson testified that he learned about the actual prac- tice concerningjury leave some time after the November 9, 1971, meeting but could not account when or how he did so. Robertson also could not remember whether he had 74 Another fact pointing to inconsistency in Shawd's memory 75 As stated above, Mendez' notes had been made available to Respondent for inspection 76 As mentioned above, it is considered significant in this discussion that Shawd in the meeting of June 6 made a similar proposal in connection with layoffs He proposed a 2-month period of recall to replace 3 months 77 Shawd testified that the exhibit containing the approved clause showed the "amendments which t suggested, which had to do with referring to the hours the employee was required to be away for jury duty " 697 informed Shawd that the practice was different than he had origninally stated. Shawd on cross-examination admitted that he told Mendez after checking with Robertson that the practice was to pay the employee less jury pay. He testified, however, that it "may have developed" that he learned what the actual policy was but had no recall on it. 5. Safety and sanitation At the second meeting, on November 9, 1971, the Union among other proposals set out a safety and sanitation clause of two paragraphs. Shawd was not satisfied with it and wished to make some amendments. He stated he would make a counteroffer. At the next meeting, Shawd offered his version consisting of the two paragraphs offered by the Union, plus a third of his own. The Union took it under consideration. At the next meeting, on December 7, Mendez told Shawd the Union was in "complete agreement with the full text of that proposal." Shawd said, "What is wrong with it." Mendez answered, "there was nothing wrong with it ... the Union was prepared to agree to it." Shawd, think- ing that there was possibly something in the paragraph that he "hadn't read into it," withdrew the proposal saying "he had to study it . . . to revamp it." 78 Mendez said he would not consider the withdrawal as bargaining in bad faith. No further action was taken with regard to this article until Apnl 28. Then the mediator checked the open articles to determine how they stood. Shawd, upon inquiry, agreed to the article without change. 6. Strike and lockout At the meeting on April 20, Respondent proposed a strike and lockout clause (hereafter referred to as the strike clause). It contained a third unnumbered paragraph read- ing: An employee while on strike shall accumulate no ser- vice credit toward seniority or toward any benefit pro- vided wholly or in part by the Company. The Union stated it would make answer at a future meeting. The meeting continued with several other proposals. Re- spondent then proposed an untitled paragraph of which has been referred to by the parties as "Strikers Forfeiting Bene- fits" (hereafter referred to as forfeits clause). This paragraph read: An employee who is on strike shall forfeit all wages which might otherwise have become due for service in the period he is on strike and all benefits as they would otherwise apply during such period as he is on strike 78 On direct examination, Shawd testified that Mendez had said the Com- pany had itself in a "trap " On cross-examination on November 7, 1972, the General Counsel pointed out to Shawd that his notes did not contain the word "trap " Shawd agreed but stated that he nevertheless recalled the state- ment to that effect, "You are getting yourself in a trap, yes sir " This recall dealt with a conversation occurring on December 7, 1971 The probabilities of it being recalled and in exact words are considered small This is not an especially significant item But Shawd's treatment of it does indicate, as Shawd's testimony with regard to seniority (see sec F,3, supra) shows, that his testimony is unreliable 698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD except in a case where the employee shall have paid for such benefits in advance in the amount and as provided in the normal procedure for such payments for such period and he shall not accrue seniority or credit for service toward qualifying for any wage increase or ben- efit during such period as he is on strike unless other- wise provided by applicable law. This also was passed without discussion. At the next meet- ing, on April 28, 1972, with the mediator present the strike clause was approved by both parties. The agreement was evidenced by the appearance below the third unnumbered paragraph the word "agreed," the date, and the initials of Shawd and Mendez. No further discussion on the subject occurred until the June 29 meeting. In the meantime, the strike on May 11 had taken place. On June 29, Mendez asked about vacations due the employees on strike. Shawd responded that under the forfeits clause all "people on strike forfeit all rights." Men- dez objected, saying that the strike clause had been agreed to on April 28 and did not contain the forfeits clause. Shawd replied, "Well as far as I am concerned that is the answer to your question on vacation, the people on strike forfeit all their rights." 79 Neither clause was discussed thereafter. The remainder of this section deals with the resolution of the contention by Respondent that the agreement reached at the April 28 meeting included the forfeits clause without change. Respondent in its brief states that "During the ses- sions presided over by the mediator, the parties reached agreement on . . . strike and lockouts."There is no further discussion . On cross-examination, Shawd testified that the intention of the parties was that the forfeits clause was included as written as an integral part of the strike clause. On the record as a whole and as shown in the following analysis, it is determined that Respondent's assertions are incorrect; that on April 28 the parties agreed to the strike clause proposed by Respondent without change; and that the forfeits clause was neither agreed upon nor included in the strike clause.80 On direct testimony, Shawd testified that at the April 28 meeting the mediator questioned the Union about some language in the strike clause. After that "this clause was agreed." Shawd identified the strike clause as the item he was talking about. In response to further questioning from Respondent's counsel , Shawd stated that the clause also referred to the forfeits clause which he called "the next page." Shawd gave no further direct testimony on this sub- ject, The strike clause and forfeits clause were received in evidence. Nothing in the record supports Shawd's statement that the forfeits clause was the "next page" of the strike clause. The two clauses were proposed at different times at 79 On direct testimony , Shawd made no mention of the discussion at the June 29 meeting On cross-examination, Shawd admitted that his notes for the June 29 meeting did not show the discussion that Mendez testified to above as occurring then He explained the lack by saying, "My notes are incomplete from time to time and it could have happened for that reason " He did not deny that the discussion occurred nor that he said that the forfeits clause was his response to Mendez' question s° Shawd's testimony that the forfeits clause was included in the strike clause is not credited the April 28 meeting without reference to each other; nor does the one refer to the other in content. The format of each shows that the forfeits clause was not intended as part of the strike clause. Both clauses were prepared by Respon- dent and are typewritten. The strike clause is double- spaced, the forfeits clause single-spaced. The only handwrit- ing on either is on the strike clause.81 Examination shows clearly (a) that the language of the third paragraph of the strike clause and the language of forfeits clause overlap and are duplicative to a large extent, (b) that the forfeits clause is less liberal for the employee than the third paragraph of the strike clause. On cross-examination, Shawd admitted that the third paragraph of the strike clause was not deleted when he initialed it on April 28, but he declared that, never- theless, the forfeits clause was included without change or indication to that effect in either clause. On cross-examination, Shawd was vague and contradic- tory about the events by which the forfeits clause was in- cluded in the strike clause. First, Shawd stated that on April 28 "a positive deletion of the [third] paragraph" in the strike clause "was overlooked." He then altered that statement by stating that that was "his impression" of what happened at the time. A. I made the statement that that was my impres- sion at the time. Now, maybe in the pressure of things I overlooked crossing it out and saying definitely it was deleted. To my mind it is a matter of duplication. The paragraph on the second page duplicates and expands the paragraph at the bottom of the first page and I wasn't particularly concerned about it because it would come out in the wash anyway when we reviewed the thing. Nothing was agreed to so definitely that it couldn't be changed. That was established in the early meetings. Everything was tentative so I knew this could be worked out. The record shows that none of the foregoing impression was conveyed to Mendez. Finally, Shawd stated that the third paragraph of the strike clause had been agreed to, "the whole page was agreed to," but the forfeits clause was ac- cepted as a substitute. Despite this alleged agreement of substitution, it was the strike clause that was initialed at the bottom without any indication of change, with the third paragraph unmarked and without a line stricken out 82 7. Insurance At the meeting on November 9, 1971, Respondent in- formed Mendez that Blue Cross and Blue Shield coverage existed at the plant, with separate coverage for administra- tive personnel and for the production and maintenance em- ployees. The production and maintenance employees paid the entire premium on their coverage. Respondent contri- buted nothing. Only four production and maintenance em- ployees carried insurance. si The word "agreed," the date 4-28-72, and the initials of Mendez and Shawd 82 Other exhibits in evidence that were changed or were proposed to be changed show without exception inclusions, delineations, etc LONGHORN MACHINE WORKS Nothing further was said on this subject until January 1972 when Mendez stated he would have some insurance company representatives present to make proposals. On March 9, at the Union's request insurance agents presented three insurance proposals to the meeting. Shawd requested the information for study.83 When it was given to him, he stated that Respondent, "might not want to go into a group insurance plan." At the March 14 meeting, Shawd stated that Respondent could beat the Union's proposal made; and that Respondent had asked two insurance companies to prepare proposals. At the next meeting, the results of a Texas tuberculosis test earlier given to the employees were announced, showing that 29 out of the 67 employees had a positive reaction.84 Mendez pointed out that these facts emphasized the need for insurance. Shawd made no comment. No further discus- sion occurred until the meeting on April 12, when Mendez asked Shawd for Respondent's position on group insurance. Shawd stated he "didn't wish to answer at that time." Later in this meeting, Mendez requested a 97-cent across thc- board increase for the employees to include the cost of insurance and other fringe benefits. Respondent refused. Mendez asked what Respondent's position as to insurance was in view of the fact that the 97 cents included insurance. Shawd answered that because of the high incidence of tu- berculosis among the employees "the Company was not ready to go into an insurance program...." At the meet- ing on April 20, the insurance question came up again. Shawd's response according to his notes follows: We went on to insurance and I told Mr. Mendez . . . that we decided not to enter into the proposed program at this time but that it was subject to negotiation and I explained to him again that it was quite untimely for two reasons. We were not prepared to go into the ex- pense of the program and, too, the tuberculosis situa- tion had not been clarified. There was some discussion. I told Mr. Mendez we are always open to negotiations which this is our best offer today. Insurance was not brought up again thereafter. On cross- examination, Shawd stated he was aware that insurance companies would exclude the tuberculosis employees from insurance coverage. Shawd added that in his opinion it was foolish for any insurance company to present such a pro- gram to Respondent; and though he believed it would be untimely, then, he had no thoughts as to when it might be timely. 8. Arbitration At the session of November 9, 1971, the Union submitted its proposal on arbitration, containing three sections, num- bered 1, 2, and 3. Respondent made its counterproposal on 83 At this meeting, one of the insurance men informed Shawd that Respondent's present insurance plan was not bona fide under Texas law because the Company was not making a contribution 84 One employee was required to be hospitalized 699 November 16, 1971, also containing three sections, but numbered I, II, and III . Both proposals were discussed on December 14 without any results. On January 27, 1972, the parties dealt with the Union's proposal in some depth . The Union modified its proposal in agreement with some of Shawd's suggestions.85 Respon- dent then requested that sections II and III of its proposal be added to what had already been agreed upon. Mendez pointed out that section II provided for "performance stan- dards" by employees that did not exist and section III, among other things, prevented the Union from representing the grievant at the arbitration proceeding . In response: Mr. Shawd said that he didn't like arbitrations, that some university professor [could] come down there and stick his nose into our business and tell us what we are supposed to do. That discipline and discharge was the Company's prerogative, and they had the right to disci- pline and discharge employees without out . . . outsid- ers telling them how to do it. Mendez pointed out that Shawd's request nullified what had earlier been agreed upon and that under Shawd's request arbitration was rest acted to discharge cases based only upon violation of a published work rule. Mendez suggested that Shawd take "a good hard look" at the work rules which Shawd said he would do.86 At the next meeting, on February 15, section III of Respondent's proposal was discussed. Shawd explained that the arbitrator under that proposal would make his decision only "on such evidence as had been timely received by the Company and on the evidence submitted by the Company." The evidence referred to here was that which the Union and Respondent was required to submit to the Company under the third step of Respondent's grievance procedure propos- al. Mendez asked Shawd to study Respondent's proposal and to come up with something different. At the next meet- ing, at Mendez' suggestion, Shawd diagrammed on the blackboard the operation of section III of Respondent's proposal dealing with the presentation of "a grievance in case of discharge for violation of work rules or contract provision." At the March 16 meeting, Mendez again pointed out to Shawd that the latter's proposal only brought discharge cases up for arbitration. He asked Shawd to show him how under Shawd's proposal any other gnevance could be brought up for arbitration. Shawd stated that it could. When Mendez asked "How?" Shawd replied that if he were sitting in Mendez' position he "certainly would find a way." Shawd went no further. A little later, Shawd stated that he 85 The record is somewhat confusing as to what occurred at this meeting Mendez indicates that Shawd agreed to the union proposal but wanted some of the Company's sections included Shawd testified that he agreed to section I of the Union's proposal Later he testified that, when the mediator stated at the May 18 meeting that the three sections of the Union's arbitration proposal had been agreed upon, Shawd told him he had agreed only to sections 1 and 2 Shawd changed his testimony again on cross-examination to state he had agreed only to section I 86 From Mendez' testimony Shawd's testimony as to this meeting was, "We had a discussion on Arbitration and agreement was reached on section I of the union draft 11 700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD would bring in a new proposal on arbitration. Arbitration was not referred to again until March 28. Mendez asked Shawd to change his position particularly with regard to section III because he was preventing the Union from effectively representing the employees, a duty the Union assumed because of its certification. There was talk of impasse at this meeting. Shawd indicated that the parties were not at an impasse and that Respondent "will negotiate and continue negotiating for as long as" the Union wished. Arbitration was brought up again at the April 11 and 12 meetings with no change in position by either side. On April 20, Shawd proposed an amendment to section III in "an effort to smooth out and remove some of the objections that Mr. Mendez had found in it." Further, the amendment was, as Shawd put it, "for the protection of the employee" and to show "the fairness of the Company in its dealing with the employees." Shawd proposed to insert in section 111 87 after the words "such rule, regulation or provision of the agree- ment," and before the words "he may be restored," the following: "and/or the grievant was 'guilty' due only to his having followed specific and clear instructions received from his supervisor after the grievant had protested the assignment, out of which the disciplinary action arose, for a valid reason of safety or valid interpretation of a work rule, regulation or contract provision." There was discus- sion but no conclusion. On April 28, the mediator opened the meeting by listing the open issues. For arbitration, he stated he would try to find some suitable language to submit to the parties. On May 1, he mailed to the parties a form entitled "Grievance Procedure" that was a combination of arbitration and griev- ance. At the May 5 meeting, the Union accepted the mediator's proposal. Respondent rejected it. Respondent 87 Sec III, as originally proposed by Respondent, follows- A grievance, subject to the provisions of this Agreement and alleging the violation of this Agreement and pertaining to any disciplinary ac- tion, including discharge, which action was based upon a violation of a provision, work rule or regulation in or provided for in this Agreement or upon failure to comply with the terms and provisions of this Agree- ment shall not be subject to arbitration , provided in case of discharge only and only in such case in which the grievant denies his guilt and presents a timely grievance as provided in this Agreement and in so doing and at the same time presents the full and complete evidence of his innocence which he would have an arbitrator review , then in such case only, the sole question of whether the grievant was guilty of the violation or failure on which the disciplinary action was based may be submitted to arbitration. In such case the Company's decision and ac- tion shall stand, provided, should the arbitrator, basing his ruling on only such evidence as had been timely received by the Company and on the evidence submitted by the Company rule that the grievant did not commit the violation alleged and/or had not failed to comply with such rule or regulation or provision, he may be restored to his former position or at the Company's option, a position of substantially equal compensa- tion basis, together with such compensation as he would have received computed at his wage rate at the time of his termination for forty (40) hours per week for the elapsed period dating from the third work day following the receipt of the grievance and the grievant's supplied evi- dence of his innocence by the Company and terminating on the last work day prior to his re-assignment or the fifteenth day following close of the arbitration trial whichever date is earlier but less any amount received by him or due him during such award period in wages, commis- sions or other compensation from any source proposed that in addition to discharge for violation of a work rule or provision of the agreement as stated in section III they were willing "to provide for arbitration of discipli- nary discharge of over one week." 88 The record does not show any action by either party in reference to this propos- al. At the May 11 meeting, the mediator offered both parties an arbitration clause, again combining grievance and arbi- tration. The Union accepted it, but the Company rejected it. Shawd then proposed that section III be further amended to provide that "a disciplinary layoff in excess of five days" was subject to arbitration. The Union objected on the basis that an employee innocent of any infraction had no re- course for a layoff of less than 5 days. At the May 18 meeting, the mediator dealt with section II of Respondent's first proposal. To meet the fact that there was no production standards in the shop, he proposed that the words, "if same have been negotiated" be inserted after the reference therein to production standards.89 Arbitration was again discussed at the May 31 meeting. Shawd again proposed that section III be amended to in- clude disciplinary layoff in excess of 5 days. Mendez count- ered with 2 days. Shawd remained steadfast. The mediator then proposed that section III be amended to make it more acceptable to the Union.90 Mendez accepted the proposal. Shawd did not. At the June 6 meeting, Shawd gave Mendez an exposition on how the arbitration would work. Mendez liked what Shawd said and asked Shawd to rewrite section III so that it would express what Shawd had just explained. Shawd said he would try. At the June 29 meeting, Shawd presented his amended section III, a somewhat longer article than his proposal of April 20. Mendez pointed out that the later article was more stringent than the first in that (1) in the later article the employee was cleared of violation if it was shown that he had followed "specific and clear" instructions from his su- pervisor, whereas the later required that the instructions from the supervisor be "clear and repeated"; (2) backpay started after 4 days where in the former it started after 3 days; and (3) the later proposal did not include any provi- sion for arbitration of disciplinary layoff such as Respon- dent had previously verbally offered but restricted arbitration to discharge cases as had Respondent's original proposal. No agreement was reached on this amendment. At the meeting on August 17, Mendez asked Shawd if he had any intention of changing his position on arbitration. Shawd answered "Not at this time." Mendez continued stating objections to the fact that under the then proposal he was unable to take a grievance to arbitration where disci- plinary action occurred short of discharge. Shawd again explained to Mendez how he interpreted section III. When he finished, Mendez again told him, "If you write down what you just finished saying I am pretty sure we would be closer together . . . its a heck of a lot different than your proposal." Shawd chose not to write it. He told Mendez ss According to Shawd's testimony. 69 This amendment accepted by both parties not later than the meeting of June 6. Shawd testified that he accepted it at the May 18 meeting. 90 The record does not show what language was proposed It was rejected because it would require a remodeling of sec III LONGHORN MACHINE WORKS what he had said was "what the language in his proposal said." Mendez pointed out to Shawd again that the section III made no provision for innocence. Again no agreement was reached. At the September 15 meeting, Mendez referred to the last proposal of Shawd's and told him he would accept it if Shawd deleted certain limiting language and included the term "disciplinary layoffs" in place of it. Shawd rejected the proposal. Then Shawd told Mendez that Mendez had agreed to the language of Respondent's last proposal in a contract with another company, Standard Electric in San Antonio. Shawd produced a copy of the agreement 91 Men- dez told Shawd that the specific language was not in an arbitration clause of the Standard Electric contract but in a combined arbitration and grievance clause.92 Further, he told Shawd that he, Mendez, would agree to the use of the same language in the proposed contract in the same context it was used in the Standard Electric. Shawd did not accept the proposal,93 stating it did not satisfy Respondent's needs. At the last meeting, on September 29, Mendez restated his objection that Respondent's arbitration proposal limited ar- bitration to a "specific grievance, which is discharge." Shawd again offered "disciplinary layoff exceeding five days as being arbitrable." No action occurred and the arbi- tration clause rested there. 9. Conclusion that Respondent showed bad faith in its bargaining with the Union a. Contentions of the parties The General Counsel's position is that Respondent did not bargain in good faith commencing with the November 17, 1971, session 94 Respondent maintains that it did "no more than hard bargaining which neither violated the Act nor evidenced bad faith...." Upon the record as a whole and as herein discussed, it is found that Respondent's entire course of conduct showed its intention to bargain and nego- tiate so as to avoid its good-faith bargaining obligations in derogation of its duty under Section 8(d) and in violation of Section 8(a)(5) and (1) of the Act.95 91 Pertinent parts of the agreement were received in evidence. 92 The Standard Electric contract had a separate arbitration provision. 93 Shawd testified Mendez said `Give me that and I will agree to it.' I said, 'The clause does not satisfy the point but you have agreed to the point.' 94 See In 38, supra 95 This finding takes into consideration the factors that Shawd and Mendez actually agreed to a number of items during their negotiations and the flexibility of the ground rules that were originally established . The existence of these factors do not negate the conclusion of bad-faith bargaining nor diminish the concept that Respondent's overall design was to appear to bargain in good faith when in fact its motive and intent was not to reach agreement with the Union The "ultimate issue whether the Company con- ducted its bargaining negotiations in good faith involves a finding of motive or state of mind which can only be inferred from circumstantial evidence." NLRB v. Reed & Prince Mfg Co, 205 F 2d 131, 139-140 (C A 1, 1953), cert. denied 346 U.S 887, N L R B v Texas Coca-Cola Bottling Co., 365 F.2d 321, 322 (C.A. 5, 1966) That determination is made by "drawing inferences from the conduct of the parties as a whole." N L R B v Insurance Agents' International Union, AFL-CIO, 361 U S 477, 498 (1960), N L R B v. Stanis- laus Implement Co, 226 F 2d 377, 381 (C A 9, 1955) 701 b. Legal principles involved Under Section 8(a)(5) and Section 8(d), Respondent was not required to "make concessions or yield any position fairly maintained." H. K. Porter Company, Inc. v. N.L.R.B., 397 U.S. 99, 106 (1970); N.L.R.B. v. National Insurance Co., 343 U.S. 395, 404 (1952); N.L.R.B. v. Holmes Tuttle Broad- way Ford, 465 F.2d 717 (C.A. 9, 1972). But this does not mean "that the Board is prohibited from examining the contents of the proposals put forth. The Board `must take some cognizance of the reasonableness of the position taken by an employer in the course of bargaining negotiations' if it is not to be `blinded by empty talk and by the mere surface motions of collective bargaining.... " N.L.R.B. v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (C.A. 1, 1953), cert. denied 346 U.S. 887. See Kayser-Roth Hosiery Co. v. N.L.R. B., 430 F.2d 701, 702-703 (C.A. 6, 1970); see also Vanderbilt Products, Inc. v. N.L.R.B., 297 F.2d 833 (C.A. 2, 1961). In judging a party's compliance with Section 8(a)(5) and (d), the "Board has been afforded flexibility to determine .. . whether . . . conduct at the bargaining table evinces a real desire to come into agreement." This determination is made by "drawing inferences from the conduct of the parties as a whole." The question is one of "mixed fact and law...." N.L.R.B. v. Insurance Agents' International Union, supra, 361 U.S. at 498. There is a duty "to enter into discussion with an open and fair mind, and a sincere purpose to find a basis for agreement. . .." N.L.R.B. v. Herman Sausage Co., 275 F.2d 229, 231 (C.A. 5, 1960). And although this duty does dictate the reaching of agreement, it does ban the "mere pretense at negotiation with a completely closed mind and without [a] spirit of cooperation and good faith..... N.L. R.B. v. Wonder State Mfg. Co., 344 F.2d 210, 215 (C.A. 8, 1965). Indeed, "to sit at a bargaining table, or to sit almost forever, or to make concessions here and there, could be the very means by which to conceal a purposeful strategy to make bargaining futile or fail." N.L.R.B. v. Herman Sausage Co., supra, 275 F.2d at 231. Moreover, "rigid adherence to proposals, which are predictably unacceptable to the em- ployee representative, may be considered in proper circum- stances as evidencing a predetermination not to reach agreement." Sweeney & Co., Inc., 176 NLRB 208, 212 (1969), enfd. in pertinent part 437 F.2d 1127 (C.A. 5, 1971). c. Respondent showed continuous animus towards the Union Respondent, by specific actions and comments by Presi- dent Brown,96 has shown continued animosity against the Union since its certification. This antipathy toward the Union continued unabated after the negotiations began97 Specific actions violative of Section 8(a)(5) have been set forth in section E, above. The time period covered by these 96 As set forth in sec C, 2, above. 97 It is well settled that events occurring prior to the 6-month period set forth in Sec. 10(b) or prior to a settlement agreement are relevant in determin- ing the motivation underlying subsequent conduct See Maphis Chapman Corporation v. N.L.R.B., 368 F 2d 303. 304 (C.A 9) and cases cited therein; Brady Aviation Corp., 115 NLRB 1304; and Local x..odge No 1424, JAM v. N L R B lBryan Manufacturing Co ], 362 U.S 411 (1960); M R. & R. Truck- ing Co, 178 NLRB 167. Northern California District Council of Hod Carriers, 154 NLRB 1384, In. I. 702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD actions extends from January through May 1972. These actions show an adamant refusal on the part of Respondent to accept the Union as the collective-bargaining representa- tive of the employees and constitute an attempt to under- mine its representative capacity. It is impossible to reconcile the animosity that motivated Brown's speech and actions, and caused the specific violations of Section 8(a)(5), with an intent or desire to reach bargaining accord. It is reasonable to conclude that such animosity also motivated Respondent's intent and course of action during the bar- gaining sessions98 All these items form a matrix constituting a totality of conduct yielding bad-faith bargaining within the legal principles set out in section b, above. The analysis of the following eight items supports this conclusion. d. Recognition An aim of the Act is to establish labor management peace by collective bargaining. A keystone to that peace is the certification of a union as the exclusive bargaining rep- resentative of the unit of employees. This goal is achieved by the Union in many instances with difficulty due to oppo- sition from management and opposing unions. It also re- quires the expenditure of a great deal of time, energy, and finances. Once attained it is a prize that is zealously guarded and the Act protects it. It is understandable then and rea- sonable that the Union will strongly object to and contest any action or conduct that tends to undermine or erode its certification or its position as the sole collective -bargaining agency for the unit. There is no question that Shawd as an admitted expert in the labor relations field was familiar with the foregoing principles. Admittedly, Shawd proposed his recognition clause and its many ramifications, knowing that the "employees of other firms" or, to put it another way, " employees of Respondent's choosing" would replace the unit employees. It needs no clairvoyant to foretell that in a short time such replacements would spell the end of the Union's representa- tive capacity. Further, it is entirely reasonable to conclude that no Union would agree to the insertion of a clause leading to the destruction of its own position." Such a clause is "predictably unacceptable" to the Union. Respondent's offer and insistence thereon indicates "a pre- determination not to reach agreement , or a desire to pro- duce a stalemate, in order to frustrate the bargaining and undermine the statutory representative." i By attempting to destroy the unit, Shawd was not giving full recognition to the Union as the duly designated bargaining agent of those employees. This was not actual bargaining. For, as one court observed a long time ago, "There could be no 98 See Borg-Warner Controls, A Division of Borg-Warner Corporation, 198 NLRB No. 93, where it was pointed out by Chairman Miller in his dissent that evidence of union animus or hostility of the bargaining process, and conduct independently violating Sec 8 (ax5) of the Act, are especially signifi- cant in a determination of bad-faith bargaining . if a party at the bargaining table espouses a position for the purpose of destroying or even crippling the other party to the negotiations, he has not bargained in good faith as required by the Act." United Steelwork- ers of America, AFL-CIO v N LR.B, 390 F.2d 846 (C A.D.C., 1967), cert denied 391 U.S 904 (1967) Language used by the Board in Stuart Radio Core Manufacturing Co, Inc, 173 NLRB 125. genuine bargaining as contemplated by the Statute until complete recognition had been granted as the Act re- quires." 2 Shawd, at all times, intended to adhere to the principles that the union representation "does not apply or pertain to the work." This was the language he used in the second paragraph of his recognition proposal on December 7. Sub- sequently he proposed several amendments purporting to change its language and its meaning and to soften its intent. The changes were more verbose than the original, but, as Shawd admitted, each would permit the unit employees to be replaced. At the hearing, Shawd was asked on cross- examination if he could state the essence of what he was holding out for. Reading from an exhibit, he quoted the sentence of his December 7 proposal, including the above- quoted words. It is clear from this testimony that Shawd had no intention of varying from his original proposal. Such "rigid adherence to proposals, which are predictably unac- ceptable to-the employees' representative, may be consid- ered in proper circumstances as evidencing a pre- determination not to reach agreement." Sweeney Co., Inc., supra. The latter point is strongly accentuated by Shawd's refus- al to reach agreement on the recognition article and particu- larly by three events.; The first occurred at the meeting of May 18. The mediator offered a compromise proposal which included language proposed by Shawd. Shawd reject- ed the compromise and offered neither excuse nor explana- tion for the rejection of his own language. The second occurred at the May 31 meeting. The parties were still dis- cussing the insertion in section 4 of the recognition article dealing with the control of work. Shawd proposed the use of the words "nor the selection of the work force nor who shall perform the work." When Mendez agreed, Shawd withdrew agreement, stating he had not made a proposal but was "working on the language." The third occurred at the meeting of August 11 with Shawd's statement that the displacement of the unit employees was for their benefit; that through their replacements the Respondent could "bring in more work and later on they (the displaced em- ployees) can be rehired." Mere restatement of this explana- tion is sufficient to show its patent unacceptability. e. Checkoff Checkoff is a mandatory subject for bargaining. United States Gypsum, 94 NLRB 112, 113; Reed & Prince Manufac- turing Company, 96 NLRB 850, 857, enfd. 205 F.2d 131 (C.A. 1, 1953), cert. denied 346 U.S. 887 (1953). The Su- preme Court in H. K. Porter Company, Inc., supra, held that the Board is without power to compel a company to grant a union a contract clause providing for checkoff of union dues .4 The right to refuse to agree to a particular proposal or to make a concession with regard to it may not be used 2 McQuay Norris Manufacturing Company v N L R.B, 116 F.2d 748, 751 (C.A. 7, 1940) ' Other events occurred that are not as striking as these three and are contained in sec F,1, above, e g , Mendez' offer that Kesponaent may use employees of other employers upon notice to the Union. ' The court left undisturbed the Board's decision that the Company had violated Sec. 8(a)(5) by refusing to bargain in gooa faith on the issue of checkoff. H K Porter Company, Inc., 153 NLRB 1370. LONGHORN MACHINE WORKS 703 "as a cloak . . . to conceal a purposeful strategy to make bargaining futile or fail." N.L.R.B. v. Herman Sausage Com- pany, Inc., supra at 232. It takes more than mere "surface bargaining" (N.L.R.B. v. Whittier Mills Co., 111 F.2d 474, 478 (C.A. 5, 1940), or "shadow boxing to a draw " (Stone- wall Cotton Mills v. N.L.R.B., 129 F.2d 629, 631 (C.A. 5, 1942), cert. denied 317 U.S. 667), or "giving the Union a runaround while purporting to be meeting with the Union for the purpose of collective bargaining." (N.L.R.B. v. Ath- ens Mfg. Co., 161 F.2d 8 (C.A. 5, 1947). See also Sweeney & Co., Inc., supra. The account of the negotiations with regard to the check- off clause set forth in section F,2, above,5 shows that Re- spondent, "while freely conferring, did not approach the bargaining table with an open mind and purpose to reach an agreement consistent with the respective rights of the parties." Majure Transport Co. v. N.L.R.B., 198 F.2d 735, 739 (C.A. 5, 1952). The detailed account of the negotiations between Mendez and Shawd involving checkoff show clearly that Shawd ex- pressed a willingness to negotiate and to continue to negoti- ate checkoff. In fact, he did no negotiating. Mendez gave Shawd the union checkoff card at the first negotiating session. At the second session, he gave Shawd the Union's proposed checkoff clause. At no time for the remainder of the 32 sessions was the language or other aspect of these items discussed. The subject of checkoff came up many times, particularly when Mendez offered to swap management rights for checkoff. Shawd's response was always a flat "no" or a delaying answer putting off negotiations. Respondent's true position with regard to checkoff was revealed during the April 11 meeting when Shawd stated to Mendez "that neither he nor Brown wanted check-off," and in the September 15 meeting when he said, "No, I don't intend to agree to check-off." Shawd raised the question of legality of checkoff, hiding behind the facade that he was not a lawyer. The legality of checkoff was not in question. It is improbable that with Shawd's long experience and expertise in the labor field he did not know what the legal status of checkoff was. His professed doubt of its legality cannot be accepted with any degree of seriousness. It is concluded that Shawd had no purpose in raising illegality other than to obstruct bargain- ing. Shawd also opposed checkoff on the grounds that it was a nuisance, that Respondent did not wish to be a collection agency for the Union. Mendez pointed out to Shawd that the Company collected from employees for the Red Cross, the United Fund, and the Blue Cross; and that "Mr. Brown even collected for his loan business that he had there." Neither Shawd nor Robertson denied these assertions. The record does not clearly show that these collections occurred during working hours. The inference is that they did. To that extent, the situation parallels those instances in Board 5 As with recognition , other events relating to checkoff, not as significant as those in this section , are contained in set F,2, aoove, e g , Shawd's propos- al of a new management rights clause after Mendez had agreed to accept the previous one conditioned on Shawd's accepting checkoff , Shawd's admission that there were counterproposals he could have made but did not, such as, to the escape clause; and Shawd's questionable information that the comput- er was unable to handle the checkoff experience dealing with no-solicitation rules where a com- pany maintains a permissive attitude toward other solicita- tion but refuses to permit union solicitation. It is established Board law approved by the courts that a company may not prohibit the solicitation of union membership or union ac- tivities during working time on company property if it per- mits other solicitations and other nonwork activities to occur. Under such circumstances, the prohibition against the union activity is in derogation of employees' rights un- der Section 7 of the Act .6 There is no intention herein to find that Respondent's refusal to agree to checkoff for the reason stated by Shawd is violative of the Act. But it is found that Respondent's collection of various funds when it was unwilling to collect union dues is evidence of union animus, and supports the inference that Respondent was not bargaining in good faith in its unqualified rejection of checkoff. Shawd also advanced the position that checkoff was a form of coercion; that it constituted the collection of dues from employees who did not wish to pay. Shawd produced no evidence in support of this statement. The Board rejected this argument in Kayser-Roth Hosiery Company, Inc., 176 NLRB 999, 1000, wherein it adopted the findings and con- clusions of the Trial Examiner7 and pointed out that the voice of the union representative was the voice of the em- ployees unless there was,evidence to the contrary. Throughout the 32 sessions when checkoff was men- tioned, Shawd specified his willingness to negotiate, or to continue to negotiate on that item. Viewing these statements in the light of his expressed intentions that neither he nor Brown wanted checkoff, that he had no intention of agree- ing to checkoff and did not know if he would ever agree, it became apparent that Shawd was engaged in bargaining behavior that "reflect[ed] a cast of mind against reaching agreement" (N.L.R.B. v. Katz, supra, at 747; see also Reed & Prince Manufacturing Company, supra) and manifested a lack of "serious intent to adjust differences and to reach an acceptable common ground...." See N.L.R.B. v. Insur- ance Agents' International Union, AFL-CIO (Prudential In- surance Co.) supra.8 f. Seniority Shawd set the tone for negotiations on seniority when at the November 9 meeting he told Mendez that he knew only "bad" things about seniority and what "he thought about seniority was it was phony." At the next meeting, Shawd said Respondent wanted to "avoid" seniority? Bad-faith bargaining by Shawd with regard to seniority became strongly evident in two specific instances: (1) the 6 See Ridgewood Management Company, Inc., 171 NLRB 148, enfd. 410 F.2d 738 (C.A 5, 1969), cert. dented 396 U.S. 832 'Now Administrative Law Judge 8 This bad-faith attitude was highlighted by Shawd at the 30th bargaining session on August 18 , 1972. Shawd told Mendez that Mendez was the salesman and Shawd was the buyer, that it was up to Mendez to take all the action, that Shawd was there just to listen, "If you can sell me on it, O.K." Such a "show me" attitude was evidence that Shawd was not going forward with "an affirmative duty to do anything," or contributing to the "affirmative efforts of two parties . . . to make a collective bargain " Montgomery Ward & Company, 37 NLRB 100, 122 9 Seniority is a customary subject of collective bargaining U S Gypsum, supra 704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD classification system; (2) Shawd's proposal of 2 months' recall for employees on layoff. (1) Robertson admittedly was superintendent of manu- facturing for Respondent. The Union before the meeting had requested information on classification as a basis for a seniority roster. Later, Robertson supplied the information. At the March 17 meeting, Mendez and Robertson worked out a classification system that both thought workable. Shawd then declared it was not workable in Respondent's plant. Again, at the March 23 meeting Mendez and Rob- ertson worked up a classification system. Again, Shawd vetoed the system, stating that he had investigated the ques- tion "with the shop management and found it unacceptable to them." It is quite clear from the foregoing that Shawd permitted the Union to enter into the long process of com- piling a classification system to no avail. There was no reason given why Mendez should not have relied on the fact that the classification system he was devising together with Respondent's superintendent of manufacturing was perti- nent and material to the negotiations. Neither Shawd nor Robertson stated that the labor would be fruitless; that Shawd, or the "shop management." 10 had veto power over Robertson on a matter dealing with the operations of the plant which normally would be under the control of a super- intendent of manufacturing. It is concluded from the fore- going that Shawd's in-and-out tactics about classification are further evidence of the basic intention of Respondent to hinder negotiations and not to arrive at agreement with the Union. (2) Section F,3, above, sets out in detail the course of the bargaining between Mendez and Shawd that dealt with the attempt to arrive at a seniority clause including the Glas- stron proposal made by the mediator on April 28, 1972. The apparent point of disagreement was the period of recall after layoff. Shawd apparently was holding hard for 3 months; Mendez equally hard for 6 months. Shawd's real intent, however, was to get no agreement on this subject at all. This fact became evident when he made his proposal on September 29 11 that the period of recall he wanted was 60 days. Shawd made this proposal despite the fact that he had held out since May 31 for a 3-month period. Can there be any doubt in view of the course of the negotiations that Shawd made the 60-day proposal knowing that the Union could and would not accept it and that it would be a rock upon which the negotiations would founder? The answer is obvious. Shawd's 60-day proposal after 4 months of holding out for 3 months gives rise to a strong inference that Shawd had no intention of adjusting the difference or of attempting to reach a period of time acceptable to both Union and Respondent. On the foregoing and the record as a whole, it is found that Respondent's actions with regard to seniority support the conclusion that Respondent was not acting in good faith with regard to overall bargaining. 10 It is noted that "shop management" is a term that is not defined and quite vague in the use given it No explanation was given by either Shawd or Robertson of the relationship in the management scale between Robertson and "shop management " The last meeting held by the parties. g. Jury duty As shown in section F,4, above, Mendez and Shawd on March 9, 1972, agreed to a clause that employees on jury duty shall be paid regular pay less his jury fee. The agree- ment was based on information given to Mendez by Rob- ertson in Shawd's presence that such was the practice in the Company. This information was erroneous. The actual practice was that Respondent paid full pay to an employee onjury duty. The employee kept his jury fee also. Robertson and Shawd testified that they learned about the actual prac- tice some time after the second meeting on November 9, 1971, but they never corrected the information they had given Mendez. At the 30th meeting on August 17, 1972, Mendez pointed out to both of them that he had agreed to the clause based on their information, and thus had given some of the employees' rights away. Shawd did nothing, and said nothing in response. The record does not show how much the jury pay was, nor how often employees were called for jury duty. It is recognized that the amounts involved are not large sums except comparatively. To employees earning small hourly sums as were the employees here,12 the loss may be compar- atively great. No conclusion is drawn from the facts herein that Robertson and Shawd deliberately misled Mendez when they first gave him the jury pay information. It is kinder to conclude that they were mistaken. But the evi- dence does show that at least one of them was aware of the actual practice when agreement was reached on March 9. It may be said for Respondent that there was no legal obli- gation on its part to correct the erroneous impression under which Mendez was laboring. Supposedly Mendez could have checked the information given him. Nevertheless, there is little question that Shawd and Robertson were aware that Mendez had relied upon the information he was given by them when he agreed to a different jury pay system than the practice that was current at the plant. The basic premise of collective bargaining is "good faith." A premise that applies with equal strength, to both parties. But adhering to technicalities and remaining quiet when the situation demands that the knowledgeable party speak up to avoid harm to the other is acting neither in equity nor good faith. Respondent's course of conduct with regard to jury duty resulted in depriving the employees of a right they had long enjoyed. Respondent offered nothing in return. Such conduct is strong evidence of bad-faith bar- gaining. h. Safety and sanitation As shown in section F,5, above, on December 7, 1971, Shawd proposed and Mendez accepted a safety and sanita- tion clause. Because of a statement by Mendez, Shawd with- drew the proposal for further study. Four and a half months later, prompted by the Federal mediator, Shawd produced the proposal again and again agreed to it. The General Counsel points out that the nonaction shows Respondent failed to grasp the fact "that it too had an obligation to take affirmative efforts to arrive at an agreement." There is no 11 Employees involved here earned between $1.60 and $1 80 per hour LONGHORN MACHINE WORKS showing that Mendez pressed for the clause or asked about it after Shawd withdrew it. It may be inferred that Respon- dent knew to the full extent what it proposed when it first proposed it. But, Respondent's withdrawal action alone is insufficient to support a conclusion of bad-faith bargaining. Further, as to the conclusion herein that Respondent has indulged in bad-faith bargaining, it is considered that Respondent's 4-1/2-month withdrawal played no signifi- cant part. i. Strike and lockout As shown in section F,6, above, agreement on the strike and lockout clause was reached on April 28, 1972, with the Federal mediator present. The clause approved was com- plete in itself and was proposed by Shawd. No further dis- cussion on this clause occurred until June 29 after the employees' strike had been in existence for about 1-1/2 months. At the June 29 meeting, Shawd advanced the position that the clause was not in fact the one agreed upon but included the forfeits clause he had proposed later in the April 28 meeting. To all intents and purposes, the June 29 action constituted a disavowal of his previous agreement to the strike and lockout clause. In support of his action, Shawd referred to the ground rules first established by the parties 13 that "Nothing was agreed to so definitely that it couldn't be changed... . Everything was tentative...." This statement only em- phasizes the equivocal nature of Shawd's testimony in deal- mg with negotiations. First, he stated that the forfeits clause had been incorporated in the agreement. He then back- tracked when, without informing Mendez, he stated he was acting according to the ground rules because the approval was only tentative and the incorporation of the forfeits clause was something he could straighten out later. Finally, he admitted that the initialling had occurred but the forfeits clause was nevertheless accepted as a substitute. No indica- tion of any reservation is shown on the exhibits in evi- dence.14 As already emphasized, the forfeits clause by examina- tion could not have been intended as part of the strike clause unless the third unnumbered paragraph was first eliminated or changed. In view of all the circumstances herein, it is concluded that Shawd as an experienced practi- tioner in this field by reversing himself on the strike and lockout clause and insisting upon the inclusion of the for- feits clause engaged in a delaying tactic intended to prevent the parties from arriving at agreement. Such an action sup- ports the conclusion that Respondent was bargaining in bad faith. j. Insurance Group insurance is a mandatory item for bargaining. W. W. Cross & Company v. N.L.R.B., 174 F.2d 875, 878 (C.A. 1, 1949); General Motors Corporation, 81 NLRB 779. As shown in section F,7, above, Respondent failed to bar- 13 See sec. D,3, above 14 As already stated, Shawd's testimony on this subject is not credited 705 gain on this issue. At the March 9, 1972, meeting, insurance representatives supplied by Mendez made three proposals. Respondent re- jected them because it "might not want to go into a group insurance plan." On March 14, Shawd stated that it was having two insurance companies prepare proposals for pre- sentation to Mendez. Those proposals never materialized. On April 20, he told Mendez that there were two reasons why the Company did not want to go into group insurance; one, it was untimely because the tuberculosis situation had not been clarified; and two, it was too expensive. He closed the discussion by saying "we are always open to negotia- tions [but] this is our best offer today." The General Counsel properly contends that Shawd was not acting in good faith in bargaining on insurance. It was not good faith to offer to "beat" Mendez' insurance propos- als and then fail without explanation to present any propos- als. The reasons offered by Respondent for not dealing with insurance were captious. (1) The excuse of clarification of the T.B. matter had no merit. Shawd was aware at all times that employees who had T.B. would not be included among the employees covered by group insurance. Thus, the exis- tence of the T.B. results was no deterrent to the making of an offer. (2) Shawd never showed how costs prevented Re- spondent from offering an insurance. No valid reason was offered by Shawd for not making a counterproposal in order to reach some agreement. Under these circumstances, it is found that Respondent's actions in relation to insurance was additional evidence to show that it was bargaining in bad faith. k. Arbitration As with seniority, Shawd displayed his antipathy to arbi- tration early in the bargaining sessions. It was "No universi- ty professor was going to come in and tell Respondent how to discipline and discharge its employees." Respondent's actions with regard to arbitration-15 to a certain extent paralleled those it used in connection with seniority. As negotiations went forward, Respondent, instead of making concessions in order to reach agreement, toughened its stand. The anticipated result was nonagreement. Section III of Shawd's first arbitration proposal on No- vember 16, 1971, provided that the arbitrator could find the employee not guilty if it was shown "on the evidence sub- mitted by the Company that the grievant did not commit the violation alleged and/or had not failed to comply with such rule or regulations or provision..... On April 20, 1972, Shawd proposed a modification of section III, characterized by Shawd as being "for the protection of the employee." The April 20 proposal added limitations that made a finding of not guilty by the arbitrator more difficult. It provided that the grievant must show (a) that he had violated the rule "due only to his having followed specific and clear instruc- tions received from his supervisors; (b) after the grievant had protested the assignment out of which the disciplinary action arose, for a valid reason of safety or a valid interpre- tation of a work rule, regulation or contract provision 15 Arbitration is a mandatory subject for collective bargaining. United States Gypsum, supra. 706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ...." In any instance where the grievant failed to show the existence of these elements, the arbitrator's finding must be against the employee. On June 29, Respondent made an amended proposal that further toughened its stand. The supervisor's instructions had to be "clear and repeated" instead of "specific and clear" as was provided in the April 20 amendment. Backpay for an innocent employee instead of starting from the third workday after the filing of the grievance, as stated in the earlier proposal, started from the fourth workday. Finally, the proposal did not contain a provision for arbitration of a disciplinary layoff as Shawd had verbally stated it would. The foregoing shows clearly that, in the course of the bargaining on arbitration, Respondent offered progres- sively onerous amendments to its proposals. There can be no question that it knew that the Union having rejected the lighter offer would not accept the heavier. Such conduct is not carrying out the duty ". . . to enter into discussion with an open and fair mind and a sincere purpose to find a basis for agreement. . . ." N.L.R.B. v. Herman Sausage Co., su- pra. Surely "rigid adherence to proposals, which are pre- dictably unacceptable to the employee representative, may be considered in proper circumstances as evidencing a pre- determination not to reach agreement." Sweeney & Co., Inc., supra. Another strong indication of Shawd's intention not to reach agreement on arbitration was his action with regard to the Standard Electric contract. Shawd late in the negotia- tions referred to the language proposed in the latest amend- ed section III and told Mendez that he had agreed to such language when Mendez negotiated a contract with the Stan- dard Electric Company. Clearly, the point of Shawd's state- ment was to get Mendez to agree to Shawd's proposal. Mendez pointed out to Shawd that the language in the context of the Standard Electric contract had not the same effect as in Shawd's proposal; and that it was contained in a clause differing from that proposed by Shawd. Neverthe- less, Mendez told Shawd he would accept the same clause in the present contract. Shawd rejected Mendez' offer say- ing it would not be satisfactory to Respondent. Respondent's pattern of proposal and withdrawal of pro- posal upon indication of acceptance by Mendez without good cause, after it has been the subject of extended nego- tiations, was intended to and did broaden the area of dis- agreement between the parties. Such action is inconsistent with a genuine desire to resolve differences between the parties,16 and is further evidence of Shawd's determination not to arrive at agreement. CONCLUSIONS OF LAW 1. The Respondent, Longhorn Machine Works, Incorpo- rated, is and at all material times has been an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union, International Union of Electrical, Radio 16 M F A Milling Company, 170 NLRB 1079, 1098. See also, American Seating Company of Mississippi v N L R B, 424 F 2d 106 (C A 5, 1970), McCann Steel Company, Inc, 190 NLRB 12, Shovel Supply Company, 162 NLRB 460. and Machine Workers, AFL-CIO, is and at all material times has been a labor organization within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees including truckdrivers, employed at the Employer's facilities located 1 mile north of Kyle, Texas, on the west access road of IH 35, excluding all other employees , clerical employees, guards, watchmen, and supervisors , as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining. 4. Since on or about July 16, 1971, the Union has been and is the exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 5. Respondent has engaged and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act by the following acts: (a) On or about January 10, 1972, the Respondent re- fused, and is refusing to bargain with the Union by unilater- ally discontinuing its practice of crediting broken periods of employment towards the employees' seniority without noti- fication or consultation with the Union. (b) On or about May 11, 1972, the Respondent refused and is refusing to bargain with the Union by unilaterally discontinuing its practice of awarding gold watches to em- ployees completing 10 years of service without notification to or consultation with the Union. (c) Since on or about November 17, 1971, the Respon- dent refused and is refusing to bargain collectively in good faith with the Union. 6. The strike of the employees on May 11, 1972, was caused and prolonged by the unfair labor practices herein found to have been engaged in by Respondent, and there- fore became an unfair labor practice strike. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, it will be recommended that it cease and desist therefrom and from like or related invasions of the employees' Section 7 rights, and that it take certain affirmative action designed to effectuate the purposes and policies of the Act. It has been found that Respondent unilaterally and ille- gally changed the conditions of employment of its employ- ees thereby engaging in unfair labor practices in violation of Section 8(a)(5) and (1) of the Act, which change caused the employees loss of benefits that accrued after the dates of the respective unilateral actions: (1) January 10, 1972, 2 weeks' vacation to those employees entitled to them under the custom and practice then in effect at Respondent's plant; or (2) May 11, 1972, a gold watch award to employees reaching 10 years of service thereafter. To correct such loss, it will be recommended that Respon- dent make whole each employee who suffered loss of a gold-watch award or loss of vacations by reason of the Respondent's illegal unilateral change in working condi- tions. Having found that the Respondent engaged in unfair LONGHORN MACHINE WORKS labor practices in violation of Section 8(a)(5) and (1) of the Act, which conduct caused and prolonged the unfair labor practice strike which began on May 11, 1972, it will be recommended that the Respondent cease and desist from such unfair labor practices, or other like or related conduct. In accordance with the normal practice of the Board, see Ideal Baking Company, Inc., 172 NLRB 1183, it will be recommended that Respondent, upon application, offer to all its employees who engaged in the strike beginning May 11, 1972, reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, dismissing, if necessary, any em- ployees hired to replace the striking employees, and that the Respondent make whole those strikers who are entitled to reinstatement for any loss of pay they may suffer by reason of the Respondent's refusal, if any, to reinstate them, upon request, by payment to each of them of a sum of money equal to that which he normally would have earned as wages during the period beginning 5 days after the date on which he applies for reinstatement and terminating on the date of the Respondent's offer of reinstatement, such loss to be computed in the manner set forth in F. W. Woolworth Com- pany, 90 NLRB 289, and Isis Plumbing & Heating Co., 138 NLRB 716. 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: ORDER 17 The Respondent, Longhorn Machine Works, Incorporat- ed, Kyle, Texas, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively in good faith with the Union as the exclusive bargaining representative of all the Respondent's employees in the appropriate unit of all pro- duction and maintenance employees, including truckdri- vers, employed at the Employer's facilities located 1 mile north of Kyle, Texas, on the west access road of IH 35, excluding all other employees, clerical employees, guards, watchmen, and supervisors as defined in the Act. (b) Making or effecting any changes in the wages, hours, or other terms and conditions of employment of the em- ployees in said unit without first giving notice to their collec- tive-bargaining representative and affording such representative an opportunity to bargain collectively with respect to such change. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, person- nel records and reports, and all other records necessary to analyze the amounts of backpay due, if any, and the rights of employment under the terms of this Order. (d) In any like or related manner interfering with, re- straining, or coercing its employees in the exercise of rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action which will effec- tuate the policies of the Act: (a) Upon request, bargain collectively in good faith with the Union as the exclusive bargaining representative of all 707 the Respondent's employees in the appropriate unit referred to above in paragraph 1(a) of this Order. If an under- standing is reached, such understanding will be written out in a signed contract. (b) Upon application, offer to the Respondent's striking employees reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privi- leges, and make them whole for any loss of pay, in the manner set forth in "The Remedy" section of this Decision. (c) Make whole each employee for the loss of a gold- watch award or vacation that he incurred, as set forth in "The Remedy" section of this Decision. (d) Post at its facilities in Kyle, Texas, Copies of the attached notice marked "Appendix."IS Copies of said no- tice on forms provided by the Regional Director for Region 23, after being duly signed by the Respondent's representa- tive, 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 the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 23, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 11 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 18 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 " APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government Pursuant to the recommended Order of an Administra- tive Law Judge of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that: After a trial at which all sides had a chance to give evi- dence, an Administrative Law Judge of the National Labor Relations Board has found that we violated the National Labor Relations Act, and has ordered us to post this notice. The Act gives all employees these rights: To engage in self-organization To form, join, or help unions To bargain collectively through a representative of their own choosing To act together for collective bargaining or other 708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mutual aid or protection To refrain from any or all these things except to the extent that membership in a union may be re- quired pursuant to a lawful union-security clause. WE WILL, upon request, bargain in good faith with International Union of Electrical , Radio and Machine Workers, AFL-CIO, as the exclusive collective-bar- gaining representative of all our employees in the ap- propriate unit of all production and maintenance employees, including truckdrivers, employed at the Employer's facilities located I mile north of Kyle, Tex- as, on the west access road of IH 35, excluding all other employees, clerical employees , guards, watchmen, and supervisors as defined in the Act. If an understanding is reached, such understanding will be written out in a signed contract. WE WILL make good to our employees any loss they may have sustained by reason of our unilateral action (1) on January 10, 1972, of discontinuing giving 2 weeks' vacation to employees with broken periods of employment; and (2) on May 11, 1972, of discontinu- ing awarding gold watches to employees who have completed 10 years' service. WE WILL NOT refuse to bargain in good faith with the above Union as the exclusive collective-bargaining rep- resentative of all such employees in such unit. WE WILL NOT unilaterally make any changes in the hours, wages, and other terms and conditions of em- ployment of our employees in the said bargaining unit without first giving notice to the above-named Union and affording said Union an opportunity to engage in collective bargaining with respect to said proposed change. It has been found that the Company's employees, on May 11, 1972, began a strike caused and prolonged by the Company's unfair labor practices. Therefore- WE WILL, upon their application, offer to our employ- ees who continue lawfully on strike reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions without prejudice to their seniority or other rights and priv ileges, dismissing, if necessary, any employees hired to replace striking employees, and we will make each employee whole for any loss of pay suffered as a result of our failure to reinstate the employees within 5 days after the applica- tion to return to work Dated By LONGHORN MACHINE WORKS, INCORPORATED (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, Dallas-Brazos Building, 1125 Bra- zos Street, Houston , Texas 77002, Telephone 713-226-4271.