Sundstrand Castings Co.

414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Sundstrand Castings Company and Sundstrand Corpo- ration and Local 233, International Molders and Allied Workers Union, AFL-CIO. Cases 13-CA-11299 and 13-CA-11689 March 6, 1974 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On July 29, 1973, Administrative Law Judge Ivar H. Peterson issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Charging Party filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge as modified herein. On March 3, 1972, the Union filed charges in Case 13-CA-11299 alleging that the Respondent's institu- tion of an incentive pay plan and the disciplinary actions and layoffs arising out of the implementation of that plan constituted unfair labor practices. On May 4, 1972, Case 13-CA-11299 was settled by the Respondent and the Regional Director for Region 13; the Union did not appeal the settlement. On July 27, 1972, the Union filed charges in Case 13-CA-11689 alleging a refusal to bargain with respect to Respondent's decision to close its facilities and alleging also an unlawful failure to reinstate strikers who had offered to resume their work. A complaint was issued in Case 13-CA-11689 on September 20, 1972. On January 8, 1973, the Regional Director withdrew his approval of the settlement agreement in Case 13-CA-11299 and issued an amended consolidated complaint covering Cases 13-CA-11299 and 13-CA-11689. We have long followed a policy that settlement agreements will not be set aside absent a breach of their provisions or the commission of subsequent unfair labor practices.' It is undisputed that Respon- dent fully complied with the terms and conditions of the settlement agreement in Case 13-CA-11299. Furthermore, the Administrative Law Judge found, and we agree, that the Respondent committed no additional unfair labor practices. In these circum- stances, the policies of the Act are best effectuated by reinstatement of the settlement agreement in Case 13-CA-11299. Unlike the Administrative Law Judge, 209 NLRB No. 73 therefore, we find it unnecessary to consider the matters covered by that settlement agreement and, consequently, we do not adopt his findings with respect to such matters.2 CONCLUSIONS OF LAW 1. The Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent has not engaged in the unfair labor practices alleged in the amended consolidated complaint. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the amended consolidated complaint herein be, and it hereby is, dismissed in its entirety, and that the settlement agreement in Case 13-CA-11299 be, and it hereby is, reinstated. i See, e.g., Mohasco Industries, Inc (Laurens Park Miii). 172 NLRB 2079. 2 Specifically covered by the settlement were the complaint allegations concerning the installment of an incentive plan, all disciplinary action taken pursuant to it, the recall of employees who were laid off in anticipation of that plan, and the suspension of Preston Harris Not mentioned by the terms of that settlement agreement were the alleged discriminatory suspension and discharge of Willie Williams and Tom Bell, respectively. However, since both of those events occurred prior to the settlement, it may well be that, under the principle laid down by the Board in Steve's Sash & Door Co, 164 NLRB 468, 473, enfd. in relevant part 401 F 2d 676 (C A. 5), the Respondent's alleged unlawful treatment of them would be barred from litigation before us as presettlement conduct, unless the alleged violations were- (1) not known to General Counsel or readily discoverable through investigation , or (2) explicitly reserved from the settlement by the parties We find it unnecessary to resolve whether these two elements are present in the instant case , since, in any event, we agree with the Administrative Law Judge s disposition of the allegations concerning Williams and Bell on the merits. DECISION STATEMENT OF THE CASE IvAR H. PETERSON, Administrative Law Judge : I heard this consolidated proceeding in Chicago, Illinois, beginning on January 30, and concluding on February 2, 1973, upon the complaints issued by the Regional Director for Region 13, on September 20, 1972 and January 8, 1973. based upon charges filed on March 3 and July 28, 1972, by Local 233, International Molders and Allied Workers Union, AFL-CIO, herein called the Union, against Sundstrand Castings Company and Sundstrand Corporation , herein referred to as the Respondent. Briefly stated, the com- plaints alleged that early in 1972 Respondent unilaterally instituted an incentive pay plan in violation of Section 8(a)(5) and 8(d) of the Act; laid off 42 employees in anticipation of increasing production under the incentive pay plan: suspended employee Preston Harris under the plan and because of his position as a union committeeman; issued oral and written warnings to numerous employees SUNDSTRAND CASTINGS CO. for failure to achieve the incentive plan standards; and suspended employee Willie Williams for openly opposing the plan. The position of counsel for the General Counsel is that when the Union filed an unfair labor practice charge concerning the foregoing conduct, the Respondent formu- lated a scheme to force the employees into a strike so that the blame for the ultimate closing of the plant would be laid at the Union's door step rather than being attributed to the president and vice president of the Respondent, who had urged the purchase of the plant in 1967. Counsel for the General Counsel further contends that, in furtherance of this scheme, the Respondent terminated employee Tom Bell, and adopted a new policy of not resolving grievances. Afte; the strike began, so counsel for the General Counsel contends, the Respondent prolonged the strike by continu- ing the new grievance policy and denying severance pay to striking union employees, while granting severance pay to nonstriking, unrepresented, salaried employees. Finally, it is contended that when the unfair labor practice strikers unconditionally offered to return to work, the Respondent refused to reinstate them. Upon the entire record in the case, my observation of the witnesses as they testified, and careful consideration of the able briefs filed by counsel for all parties on or about March 26. 1 make the following: FINDINGS OF FACT 1. JURISDICTION Sundstrand Corporation and its wholly owned subsidiary Sundstrand Castings Company are both Delaware corpo- rations. Sundstrand Corporation maintains its principal office in Rockford, Illinois, whereas Sundstrand Castings Company maintained a plant in Chicago where it engaged in the manufacture of molded castings until about July 21, 1972, when operations ceased. Admittedly, both concerns are engaged in commerce within the meaning of the Act and meet the jurisdictional standards of the Board. I find that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. I further find that the Union is a labor organization within the meaning of Section 2(5) of the Act.1 III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background The parent corporation purchased the facility involved in the present case from Howard Foundry in 1967 and the operations of the foundry were assumed and continued by Sundstrand Castings. The evidence is uncontradicted that from the beginning of operations the Respondent lost money. The losses for 1969, 1970, and 1971 were $1,000,400, $2 million, and $840,000, respectively. For the I At the begining of the hearing the Respondent moved to dismiss certain allegations in the complaint for the reason that a settlement agreement had been entered into between the Respondent and the Regional Director in Case 13-CA-11299, dated May 4, 1972 Under date of January 8, 1973, the Regional Director withdrew his approval and set aside the settlement agreement, for the reason that since May 4 "new evidence establishes reasonable cause to believe that Sundstrand Casting Company committed unfair labor practices prior and subsequent to the signing of the 415 first 3 months of 1972 the loss was in excess of $715,000. Ben Weissman, who retired in September 1972 and theretofore had been in charge of personnel and industrial relations for the Respondent, testified that despite the fact that the Respondent spent considerable amounts for improved machinery and rearranged the shop layout, productivity continued to worsen and losses continued. Weissman further testified that customers who in the past had placed orders with Respondent refused to reorder because they were able to obtain the product elsewhere for a lower price. Robert Sugarman, counsel for the Union for approximately 10 years, testified that Philip Polgreen, Respondent's director of industrial relations, at one point offered to allow the Union to look at the books of Respondent Castings but not of the parent corporation. According to Respondent, performance reviews indicated that production at the foundry averaged 60 to 70 percent of accepted industry standards. In consequence, management decided it was necessary to increase the level of productivi- ty or to cease operations. One method was to counsel and discipline those employees whose production was the lowest, and the other was to devise an incentive system to reward employees who produced more than 90 percent of standard. Early in 1972 Respondent adopted a considerably firmer attitude toward employee productivity. Prior thereto, employees had worked at whatever rate they themselves chose. Management personnel determined to institute a system of progressive discipline for employees with the lowest rates of production. Accordingly, where verbal encouragement did not produce results, employees were given oral, and/or written warnings in an effort to improve their output or face further discipline. One employee, Preston Harris, was given a disciplinary suspension, which is here in issue. According to the Respondent, Harris' production was the lowest in his department (50 percent) and verbal efforts to improve his output had not succeed- ed; moreover, his job as coremaker was at the very beginning of the production line and, in consequence, the production rate of other employees in his department depended to a substantial extent upon how quickly he produced a core. The Respondent, therefore, argues that Harris was a logical employee with which to begin the disciplinary policy. The Respondent's evidence is that Harris was initially given an oral warning, followed by a written warning. Thereafter, he was suspended for a half day on Friday, February 11. When he returned the following Monday, and his performance apparently did not improve, he was given a 2-day suspension. Upon his return Harris improved his work output and has continued to maintain it. Counsel for the General Counsel contends that Harris was selected for discipline because he was a union committeeman. To the contrary, Respondent contends that above-mentioned Agreement. These unfair labor practices are set forth as allegations in the Notice of Consolidated Hearing issued on this date " He further advised that "the specific issues involved in the Settlement Agreement will be alleged as unfair labor practices in the amended complaint issued today. However, in those instances where there has been compliance with the Settlement Agreement we will seek no additional remedy." I denied the motion, without prejudice to its renewal ; it was not renewed. 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the uncontradicted evidence plainly supports the discipline meted out to him and that his subsequent improvement in production output demonstrates that the Respondent was warranted in considering him to be an unreasonably low producer and justifies the action taken against him. B. The Incentive Program Counsel for the General Counsel contends that the institution of the incentive plan constitutes a violation of Section 8(a)(5) of the Act. On the other hand, the Respondent alleges that the program was instituted only after it had reached a collective-bargaining impasse with the Union. James Lenoir, who had worked for the Respondent or its predecessor since October 1947, had been a committeeman for the Union from 1950 to 1957 and in the latter year was elected shop chairman, a position he held until the strike which began March 28, 1972. On November 30, 1971, Lenoir attended a meeting together with Walter Nezgoda, assistant shop chairman, Don Malaney, and Ben Weiss- man, vice president and general manager and industrial relations manager, respectively. At that time Malaney stated that he desired to put in an incentive plan, which he represented would permit the employees to make more money. Lenoir stated that he was not in a position to accept that proposal, but had to contact the International. Malaney cautioned Lenoir not to discuss this proposal with the union membership. Lenoir was also informed that if the plan were instituted, no employee would be disciplined if he did not come up to standard. On January 13, 1972, representatives of the Company and the Union, including one Tony Tnzna, assigned by the International, met to discuss the incentive plan. On January 28 representatives of the parties again met and on this occasion Malaney stated that he wished to put the incentive plan into effect as soon as possible. According to Lenoir, union representatives "explained to him still the membership had to approve this before it could be put into effect." Malaney stated that he would like to present the matter to the union membership himself. The following Monday Malaney did have meetings with employees and passed out literature concerning the incentive plan. In the meeting with night-shift employees Malaney, so Lenoir testified, explained "how badly he needed this plan in order for the plant to operate." An employee, Willie Williams, asked permission to speak and "got up and explained to the membership and Mr. Malaney and everybody else present that he had worked for a shop that had an incentive plan, the plan was no good." He further stated that "it was one of the worst things you could put into a plant." He recommended that the employees not accept it. At that point Malaney asked Weissman for the identity of the employee that had opposed the plan. C. The Discipline of Preston Harris According to the testimony of Fair, Malaney in early February 1972 told Fair and Martin that they had "to discipline and pressure the employees to accept the incentive plan" and added that they "are the two fellows to make this thing go." The day the incentive program was placed into effect, February 9, Harris, who was also a union committeeman, was given an oral warning by Foreman Pete Camerano with respect to the standard under the new incentive plan; Harris was warned that if he did not come up to "the rate that we have set" he would be suspended. Camerano informed Harris and Shop Chair- man Lenoir that he was acting under "orders." The following day, Harris was given a written warning by Camerano. The day thereafter, Camerano suspended Harris for a half day for failure to meet production standards. When Lenoir protested that this action was unfair, Camerano replied that he was acting under orders. The same day, McNeely called Martin and Fair into his office and told them that the Respondent had taken disciplinary action against Harris because he was "not up to standard." McNeely further informed them that he was going to "discipline guys on days" and that they would "have to discipline guys on nights, otherwise, if you don't, it will make us all look bad. You have to find something to discipline them for." In response, Martin and Fair said that they were not going to discipline employees for no reason. McNeely responded that the "guys are either innocent or guilty. In this case they are guilty. You will do it. [We] have to have it for a tool to fight with. [We want] Rockford to know that it wouldn't be our fault; it would be the Union's fault because [they] did not cooperate. Preston Harris was a good example for the men to start on, a good example to start on the committeeman to accept the incentive program." McNeely testified that it was his decision to discipline Harris and that he was aware on February 9 that Harris was a union committeeman. Harris was given a 2-day suspension on February 15 by Camerano, allegedly for failing to meet incentive stand- ards. Lenoir protested, saying, "Pete, I don't think this is right. Why are you picking on a union representative? You have got other employees in here not coming up to standard." On the first day of Harris' suspension, Lenoir had a conversation with Camerano concerning the new man who had replaced Harris. This was in the presence of Nezgoda. Lenoir asked Camerano how many pieces Harris had been turning out, and Camerano replied that it was somewhere in the neighborhood of 400 or better. Lenoir then asked how many pieces the new man had turned out and Camerano, according to Lenoir, replied, "No, Jimmy, he didn't come no where near what Preston had done." The following day Lenoir, in company with Nezgoda, asked the replacement employee how many pieces he had turned out, and at the end of the shift they returned to the man's machine and the replacement employee showed them the card which indicated that the number of pieces he had turned out was in the neighborhood of 370 or 375. To Lenoir's knowledge, the replacement employee did not receive any warning for poor production nor was he given a suspension. The Union filed two grievances concerning the Harris matter. The parties stipulated that on or about February 15 the Respondent issued oral or written warnings to 13-named employees "because of production deficiencies under the standard hour incentive plan." They further stipulated that on or about March 17, the Respondent issued oral and/or SUNDSTRAND CASTINGS CO. written warnings to 10-named employees, many of whom were included in the February 15 warnings, "because of production deficiencies under the standard hour incentive plan." D. The Suspension of Williams Williams began work on September 13, 1971, as a night- shift coremaker. On January 31, he attended one of the meetings in which company personnel urged the employees to accept the proposed incentive program. After Malaney finished speaking, Williams asked permission to speak and stated that the proposed program "is no good because I have just come out from under the same situation they want to set up here." He characterized the incentive program as "fast labor" rather than piece work. It is undisputed that after Williams spoke Malaney asked Weissman for the identity of the employee who had opposed the incentive plan. On February 8, McNeely and Plant Manager Valaska had a number of meetings in each department to inform the employees of the implementation of the incentive plan. In the core department, Williams stated that McNeely "was told in the meeting by me that this thing wasn't any good." McNeely testified that Williams was the only "name" he remembered of those who opposed the incentive program. Fair testified that on February 11, McNeely told him that the Respondent was giving Williams a 30-day suspension for "deliberately" "messing up" 70 castmgs. Fair argued that other men were doing the same type of work and that Williams should receive a verbal and written warning before being given a suspension. McNeely replied that Malaney had instructed him to give Williams a 30-day layoff, and that Williams and another employee "come from another plant where they had the incentive program. We have to get something on them to get them out of the plant altogether, so, otherwise them two guys will make it hard for the other guys to accept the incentive program." Martin and Fair protested this action to Weissman, but the latter stated that Malaney had ordered a 30-day suspen- sion. When Williams was informed by Fair of the suspension, Williams protested that he was merely follow- ing instructions given him by McNeely and Fair as to the amount of "paste" that should be applied to the gooseneck of the core machine. Fair told Williams that his suspension would commence after he completed his shift that day- During this meeting McNeely instructed Martin and Fair to observe Williams during the shift. There is considerable testimony that while observing Williams, Fair and Martin determined that the application of too much paste (five layers) as a sealer was the cause of the "scrap" product, inasmuch as the excessive paste ran inside the mold and caused holes in the metal product. Martin stated that Williams had "no business" being given a 30-day suspen- sion inasmuch as he was merely following instructions given him by Fair and McNeely. There is undisputed testimony that, approximately 1 month before the suspen- 2 Counsel elaborates on this by stating that it believed there would be no productivity increase so long as the work flow was such that the employees were not required to work harder, that is "if all of the work got done by working at 50% efficiency, why should they work at 80% efficiency'"' 417 sion, McNeely had instructed Williams and employees Jimmy Rhodes, Barlow and Cliff to "put the paste across the gooseneck five times to make sure we get a good seal." Before being suspended on February 11, Williams did not know that he was allegedly producing scrap, and had never received a reprimand on any matter. The day following the suspension of Williams, Martin and Fair met with Malaney. The latter stated that they had mishandled the matter and that he wanted "Willie Williams and the other guys out of here. Willie Williams is one of the guys who spoke up and who spoke against the incentive program at one of the employees' meetings." Under cross-examination, McNeely and Malaney admitted that Martin and Fair had protested Williams' suspension. Malaney testified that Martin and Fair "made an error in the performance of disciplinary action . . . when they disciplined the man, that he was to be gotten off the floor and sent home immediately ...." The Union filed a grievance concerning the discipline given Williams and it was processed through the grievance procedure. There is no showing that in any of the grievance meetings the Union contended that the discipline given Williams was in any manner related to his opposition to the incentive plan. It appears that Williams was not the only employee who spoke against the incentive plan; other employees expressed their opposition and, in fact, testimo- ny adduced by the Union is to the effect that the membership was almost 100 percent against the plan. E. The Layoff of Forty-two Employees on January 28 Paragraph 8 of the complaint alleged that the Respon- dent laid off 42 employees, who were members of the appropriate unit, on or about January 28, and that this action "was based, in part, on Respondent's decision that under the incentive pay program . . . there would be need for fewer employees because of increased production." On the other hand, counsel for the Respondent in his brief contends that the General Counsel failed to sustain his burden of proof that this action constituted a violation of the Act; indeed, he asserts that there "is not a scintilla of evidence in the record to support the allegations in the complaint that the layoff of 42 employees on January 28, 1972, was undertaken in part on account of the anticipated advent of the incentive plan." Respondent's counsel contends that both Weissman and Malaney explained that the decision to lay off was entirely unrelated to the wage incentive system and that the reasons for the layoff were (a) that General Motors, the Respondent's major customer, reduced its volume of orders and (b) apart from the foregoing the Respondent was overstaffed for the amount of work available.2 It is further contended that no evidence was produced by counsel for the General Counsel showing that the layoffs were in any way connected with the incentive plan. Rather, counsel for the General Counsel, it is asserted, relied entirely upon a pretrial affidavit signed by Weissman. In that document, executed March 20, Accordingly, it is contended that the Respondent simply reduced its work force to a level that could handle the work if the employees produced at an acceptable rate. 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Weissman is credited with saying the following: "On January 28, 1972. there was a reduction in the schedule because of G.M: s reduced requirements. There was a hope that because of increased production with the incentive program there would be less need for certain of the employees and therefore a total of 42 employees were laid off on January 28, 1972. All 42 employees would have been under the incentive program." As a witness, Weissman stated that that statement was made, "but that statement needs to have an explanation." Weissman testified that the Respondent "had to take a look at the total of its labor costs and a total of its productivity, together with the fact that General Motors had reduced the amount of products that they wanted from us." He further added that "it had been hoped that after these people were laid off, that if the productivity had come to someplace where he had hoped it would, these people would have been put back." He added that the foregoing "is my meaning when 1 say that the people were affected by the incentive." Weissman denied that the foregoing statement was "exactly what he told the agent of the Board." Weissman further testified that the statement was in error in reciting that "all 42 employees would have been under the incentive program." In fact, he stated, about 25 or 26 would have been under the incentive program and that the remainder were the least senior employees who were maintenance employees, and were not .,any part" of the incentive plan. F. The Termination of Tom Bell Bell had worked as a furnance operator with the Respondent and its predecessor for something over 24 years. On March 24, 1972, McNeely accused Bell of striking his foreman, Gupta Sudir. McNeely scheduled a first-step grievance meeting immediately after the alleged incident, but refused to allow the witnesses to the event to be present. Lenoir stated that he would not "sit in any meeting" without witnesses, and instructed Bell to go home. As Bell walked out of the front door at the plant, McNeely followed him into the middle of the street and shouted "you are fired. Don't come back." Bell and J. C. Harris, a witness to the alleged altercation, testified that no assault occurred and that Sudir and Bell merely engaged in a short conversation about the desirability of putting cold iron into a hot furnance. According to the testimony, Sudir walked away when Bell questioned his judgment in the matter. The testimony of Bell and Harris was not disputed. On the following workday, March 27, the first and second grievance step meetings were held. Admittedly, McNeely refused to permit the presence of the numerous witnesses to the incident. Moreover, McNeely testified that he never at any time thereafter talked to the witnesses to the alleged assault. The Respondent upheld the discharge. In the following 2 days, Lenoir approached Valaska on several occasions to request a meeting on the Bell matter, but Valaska stated on each occasion that he did not have the time. Lenoir testified that during 17 years of handling grievances as shop chairman the Company (1) never refused to allow witnesses in the early grievance stages; (2) never discharged an employee outside of the plant or after working hours; (3) never discharged an employee prior to the first two steps of the grievance procedure; and (4) that the plant manager had never refused to process a third grievance step no later than I day after the second step of the procedure. Fair testified that on March 24, the day following the alleged altercation, McNeely told him and Martin, "You know, Tom Bell struck a supervisor." Fair stated that he did not believe this and McNeely answered that Bell was discharged. Martin then stated, "George, you are making a big mistake. These guys will go out on strike." McNeely, so the testimony goes, replied "Good." This is what we want them to do. We want to let Rockford know if we close the joint it wouldn't be our fault. It is the Union's fault because they would not cooperate. If they walk out, they will take the monkey off the Company's back." On March 26, the Union voted to strike over unfair labor practices, including the discharge of Bell. As previously related, the strike began on March 28. About a week later, McNeely, Martin, and Fair were working in the plant. During the course of a conversation, Fair asked McNeely whether he believed that Bell had struck a supervisor. McNeely, according to the testimony, responded by stating, "No, I don't, but I have to protect my supervisors. The Company was using Tom Bell as a weapon to get the guys to walk out on strike so they could close the joint down." Bell was never reinstated. On June 29, during the course of the final grievance step, the Respondent refused to change Bell's discharge to a "quit" for purposes of future employment.3 On February 27 a union meeting was called and Lenoir spoke to the assembled members, stating that the Respon- dent was "in violation of unfair labor practices." He referred specifically to the incentive plan, employee discipline, Harris and Williams, and to the failure of the Respondent to process grievances. He stated that the Union intended to file unfair labor practice charges against the Respondent and the employees voted unanimously to strike. On February 29, the Union sent the Respondent a letter giving notice that "there was no adjustment satisfac- tory to the Union in connection with any of the grievances discussed at the fifth step meeting between the parties held on February 24, 1972." However, the Union did not strike at this time. On March 3, the Union filed unfair labor practice charges alleging violation of Section 8(a)(1).(3), and (5) and 8(d) of the Act. At a meeting early in March among McNeely, Martin, and Fair, in McNeely's office, McNeely stated that he did not think the employees "are going out." Martin, however, stated that "these guys are going out on strike. They are waiting until the time is right." McNeely then stated that that "is what we want them to do. We want to let Rockford know if the guys go out it is not our fault. It will take the monkey off the Company's back because the Union does not cooperate." He added that the Respondent did not intend to settle any grievances and "was not going to give an inch." He further stated that the Board "is going to rule i The agreement between the parties did not contain an arbitration clause Following the fifth grievance step, the Union is permitted to strike. SUNDSTRAND CASTINGS CO. in the Company's favor because we are planning to keep the point open. The only thing the Company was going to give on would be 15 minutes of the 30 minute dock." 4 The parties met on February 24 and March 2 to discuss a number of fifth-step grievances. They reached no resolu- tion. The Respondent stated that the incentive program would continue in effect and that disciplinary methods would continue to be used in connection with the plan. As previously noted, Bell was discharged on March 24 and Martin told McNeely that the termination of Bell would precipitate a strike. McNeely responded by stating that the Respondent wanted a strike in order to shift the blame of a permanent plant closedown to the Union. On March 26, at a union meeting, Lenoir informed the approximately 200 members present that following the last meeting with the Respondent it would "do nothing" on the grievances. He further told the membership that the Respondent had discharged Bell on the previous Friday afternoon, claiming that he had struck a foreman. The testimony is that some 4 or 5 members stated that they were present and that Bell did not touch the foreman. Lenoir also adverted to the Williams matter and stated that he felt that "this is unfair labor practice." In addition, the Union's attorney, Sugarman, spoke to the group, stating that unfair labor practices had been filed against the Respondent and that in his opinion the Respondent had committed unfair labor practices and, moreover, had committed contract violations. The employees voted virtually unanimously to strike as soon as possible. On the following day, March 27, McNeely asked Lenoir if the Union was going to strike. It is undisputed that McNeely told Lenoir that the "stuff you fellows have took in the last month, I wouldn't have taken it for nothing in the world. You should have been out of here long ago. How in the world you fellows took this stuff as long as you did, I wouldn't know." As previously stated, the Union went on strike on March 28. Early in April, McNeely stated to Martin and Fair that the Respondent "was using Tom Bell as a weapon to get the guys to walk out on strike so they could close the joint down." An informal settlement agreement was entered into by the Respondent and the Regional Office, approved by the Regional Director on May 4. The notice posted by the Respondent under date of May 26 provided that, the Respondent would not give oral or written warnings, suspension, or other discipline to employees because of production deficiencies as measured by the standards established in the incentive pay program; that it would not in any like or related manner interfere with, restrain, or coerce employees; that it would revoke the incentive pay program; that it would rescind and revoke any oral or written warning, suspensions, or other discipline given employees because of production deficiency; that it would make Harris whole for any loss of pay he suffered; and, if production warranted, the Respondent would offer to 4 The record shows, however, that it was not until May 10, and after a number of grievance sessions between the Company and the Union that the Company proposed a compromise on the "30-minute dock" grievance In consequence, counsel for the Respondent argues in his brief that "It is inconceivable that McNeely would accurately predict the terms of a 419 recall those employees who were laid off on January 28. The Union did not participate in this agreement. After the settlement agreement was entered into, Lenoir met with union members on many occasions at the union hall and on the picket line. The possibility of returning to work was discussed. According to Lenoir, many members referred to Williams and they thought he had been wronged by the Respondent and also to Bell in a similar vein. Lenoir testified that the members felt these were unfair labor practices and, according to him, stated, "We are not willing to go back when the company had done these people like they have been done, they won't do anything on it." Early in May, Martin, in the presence of Fair and McNeely, asked Malaney when the strike would be over. According to Fair, Malaney answered that "This thing won't be over soon. If the guys had come back in when the Labor Relations Board ruled in their favor, the company would have stayed over, but as they didn't, they let the company off the hook. We didn't lose the case after all." Fair testified that in about the middle of June Joe Varick, the chief engineer and superintendent of the maintenance department, stated that the Respondent "[w ]as looking for a way to close the place down to get Mr. Sadler and Mr. Taylor off the hook. The Union did exactly what Mr. Taylor and Sadler wanted them to do by walking out." .5 Lenoir further testified, without contradiction, that in mid-June Martin telephoned him and stated that he (Martin) had had a talk with McNeely that afternoon and that McNeely "told me that he was sent here at this plant ... to give the Union hell, not settle any grievances with them. That way maybe they would walk out." He further testified that he had been told by McNeely that Vice President Sadler "went out on a limb to buy this plant" and that if the Union walked out it would get Sadler "off the limb." McNeely also stated that supervisory and office personnel were receiving severence pay but that employees represented by the Union did not get any. The parties met four times in May and also on June 29. At these meetings fifth-step grievances and the effects of closing the plant were discussed. At the first meeting following the strike. Polgreen stated that the Respondent was considering ceasing its operations in Chicago. There was further discussion of fifth-step grievances including the matter relating to Bell and Williams; however, no resolution was reached. At a meeting on May 10, the Union offered to extend the existing contract for 1 year with no wage increases and accord the Respondent discretion regarding the incentive program. In addition, there was further discussion of grievances but no settle- ment was reached, although the Respondent offered to compromise 15 minutes of the "30-minute dock" griev- ance. At the May 19 meeting the Respondent rejected the Union's contract offer and informed the union negotiators that the Respondent would close. Attorney Sugarmen compromise taking place several months in the future" and urges this circumstance, among others , as reflecting adversely on the credibility of Fair s Taylor is vice president and Sadler is president of the parent corporation. 420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD proposed severance pay on the same basis as had been granted to employees who were severed in 1969 when the magnesium-aluminum division was closed. However, Polgreen indicated that severence pay would not be granted. Grievances were discussed, particularly the matters relating to Bell and Williams, but no agreement was reached. At the May 23 meeting Polgreen stated that the Respondent would not grant severence pay to union- represented employees but he did state that it would be granted to office and supervisory employees under a discretionary policy of the Respondent. No grievances were resolved. The final company-union meeting was held on June 29. The Union made an unconditional offer to return to work. The Respondent again refused the severence pay proposal, and offered no counterproposal. Grievances were dis- cussed and the Union accepted the 15-minute "dock" grievance settlement. The Union made a proposal that Bell's discharge be converted to a "quit" for purposes of his employment record, but the Respondent refused this suggestion . There was no settlement of other grievances. Employees reported to work on July 3 and 5. However, no employees were ever reinstated. The Respondent ceased all operations on July 21. When the magnesium-aluminum division of the Respon- dent closed in 1969, the Respondent granted severence pay to the approximately 600 union-represented workers in that division. The operative collective-bargaining agreement at that time provided that the Respondent "will not make any decision to permanently terminate any of its operations in any department or division of the company, until after prior notice to the Union, and after good faith collective bargaining with the Union in connection with any such decision." Fair testified that early in April McNeely stated, "These guys think that they're going to [get] severance pay, but they are going to be disappointed because the supervisors will get it, but they Won't." e The Respondent's firm decision to close the plant was announced at the May 19 meeting. Attorney Sugarman proposed that severance pay be granted on the basis of the formula used when the magnesium-aluminum division closed 3 years earlier. However, Polgreen stated that he did not think severance pay was appropriate in view of the Respondent's monetary losses. At succesive meetings, Sugarman also proposed severance pay but the Respon- dent refused to go along with that proposal and offered no counterproposals. stating there was no contractual obliga- tion to pay severance pay, that the Respondent had lost enough money already, and that union employees received benefits under the contract which the nonunion employees did not receive. After the strike began on March 28, and until the final closing of the plant, supervisory employees crossed the picket lines and performed the work of the strikers. About May 15 Taylor and Malaney met in the parent corporation's offices in Rockford. At that meeting Taylor advised Malaney that severance pay would be granted to salaried employees. The supervisory, office, and clerical employees were advised by Malaney on May 19 that they would receive severance pay, and it was subsequently granted them. According to the Respondent , there was a corporate policy on severance pay which was discretionary as applied to subsidiaries, such as the Respondent. This discretionary policy was applied to Sunstrand Casting Company's salaried employees in 1972 but not to union-represented employees because, according to Polgreen, "[t]here are things that the foundry or the union employees enjoy that office and supervisory employees do not enjoy" under the contract. The Respondent informed the Union at the May 23 meeting that the supervisory, office, and clerical employees would receive severance pay. Contentions and Conclusions 1. The incentive pay plan issue Counsel for the General Counsel argues that the Respondent clearly violated Section 8 (d) and Section 8(a)(5) of the Act by instituting the incentive program. He refers to the following interpretation of Section 8(d) of the Act rendered by the Board in C & S Industries, Inc., 158 NLRB 454, 457. The statutory intent to stabilize during a contract term agreed-upon conditions of employment is appar- ent from the provisions of Section 8(d) of the Act, which defines the obligation to bargain. That section not only imposes an obligation on each party to a contract to refrain from modifying the contract without complying with the notice and waiting period require- ments therein set forth, but also expressly provides that the "duties so imposed shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract of a fixed term, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract." In line with that provision, the Board has consistently held that a party does not violate its bargaining obligation when it refuses to discuss changes proposed by the other party in the terms of an existing contract. The Board has also held that an employer acts in derogation of his bargaining obligation under Section 8(d). and hence violates Section 8(a)(5), when he unilaterally modifies contractual terms or conditions of employ- ment during the effective period of a contract-and this even though he has previously offered to bargain with the union about the change and the union has refused. Thus, counsel points out that : (a) The incentive plan was put into effect on February 9, clearly within the duration of the contract, which has an expiration date of May 15, and, consequently, under Section 8(d)(4), the contract could not be unilaterally modified prior to May 15; (b) admittedly there was no agreement between the Union and the Respondent for the institution of the incentive pay plan; F It such he noted that, according to the Respondent, the decision to close was made on May 15 SUNDSTRAND CASTINGS CO. (c) admittedly the contract contained a wage provision setting forth minimum and maximum hourly rates; (d) it is undisputed that in 1969, during collective-bargaining negotiations, the Respondent proposed a wage incentive plan similar to the one it instituted on February 9 which was discussed and specifically withdrawn by the Respon- dent. (See G.C. Exh. 10.) Also, the Respondent proposed a broad management rights clause which specifically gave management the exclusive right to institute an incentive pay plan ; however, this proposal was withdrawn and a narrower management rights clause was included in the contract.7 On the other hand, counsel for the Respondent in his brief argues that the record shows that "it is clear that the Company implemented the program only after it reached a collective-bargaining impasse with the Union." He points to the following sequence of events: (a) On November 30, 1971, after preliminary discussion with local representa- tives of the Union , the Respondent notified the Interna- tional of its proposal to institute a wage incentive plan; (b) in December, International Representative Trizna was assigned to meet with the Respondent concerning the plan; (c) on January 13, representatives of Respondent and the Union met and discussed the plan ; (d) on January 28, representatives of the Respondent, including an industrial engineer, met with Trizna and other union representatives for a detailed discussion of the proposed program, and the Respondent's existing standards were discussed, which the Respondent proposed to incorporate into the program and at this meeting the Union suggested that the Respondent explain its proposal directly to the employees; (e) on January 31, management representatives conducted meet- ings with the employees to explain the program and the employees were assured that no one would be disciplined for failing to make incentive pay, that is , for failing to produce in excess of 90 percent of standard: (f) on February 3, the Union submitted the plan to the employ- ees, who rejected it, (g) only after the membership rejected the plan and continued insistence by the Union that the incentive system not be instituted without approval of the employees, did the Respondent decide that it had no alternative but to install the program unilaterally. Concerning the alleged violation of Section 8(d), Counsel for the Respondent refers to the Board's decision in Central Illinois Public Service Co., 139 NLRB 1407, enfd. 324 F.2d 916 (C.A. 7, 1963). In that case the Board stated at 1414: The contract modification restrictions of Section 8(d) apply, the Board has held, "to terms and conditions which have been integrated and embodied into a contract"; they do not refer "to matters relating to `wages, hours and other terms and conditions of employment' which have not been reduced to writing" Tidewater Associated Oil Company, 85 NLRB 1096, 1099; Allied Mills, Inc., 82 N LRB 854. Counsel argues that, in the present case, the contract was silent on incentives, with the consequence that there were r This clause provides "The management of the plant and the selection and direction of the working forces shall be vested exclusively in the 421 no terms or conditions in the contract that the Respondent sought to modify. In C & S Industries supra, the Board held that an employer violated Section 8(d) when it instituted a wage incentive plan in the face of a negotiated contract provision requiring that "there shall be no change in the method of payment of any employee covered by this agreement without prior negotiations and written consent of the Union." Moreover, counsel for the Respondent argues that in the present case the contract included a specific provision which bound the Union "on behalf of its members" to "cooperate with the company in encouraging by all available means an increase in the productivity of its employees, individually and collectively, in all divisions of the Company." Thus, counsel for the Respondent argues that by this "mutual cooperation" clause the Union "waived its right to arbitrarily reject the Company's good faith efforts to increase productivity through the institution of an incen- tive program." It further argues that, inasmuch as the plan incorporated the same work standards that were already in effect and guaranteed that there would be no reduction in wage rates, "the only conceivable reason for the rejection was that the employees simply objected to increasing production. By their unwillingness to cooperate in these dire circumstances, the employees breached their promise" contained in article VI, of the contract. When the employees rejected the plan, the Respondent had the following alternatives : (a) to continue as it was, thereby facing virtually certain plant closure, or (b) it could install the plan in the hope that this would save the foundry. The Respondent chose the latter course and counsel argues that this action "neither violated nor changed any contract provision and ... furthermore, this action was fully supported by Article VI of the agreement, as well as by the management rights clause." In my opinion, the C & S Industries case is distinguisha- ble. In that case, the agreement between the parties provided that "there shall be no change in the method of payment of any employee covered by this agreement without prior negotiations and written consent of the Union." No such provision appears in the present matter. To the contrary, the agreement provided that the Union would "cooperate with the Company in encouraging by all available means an increase of the productivity of the employees, individually and collectively, in all divisions of the Company." In my view, by this "mutual cooperation" clause, the Union relinquished its right arbitrarily to reject the Respondent's efforts in good faith to increase pro- ductivity through the institution of an incentive program. Inasmuch as the plan incorporated the same work standards as were already in effect and, moreover, guaranteed that there would be no reduction in wage rates, it seems fairly evident that the employees rejected the plan because they objected to increasing production . From this, I infer that the employees did not live up to the promise contained in article VI of the agreement. I do not view this as a "modification" of contractually established terms and conditions of employment , within the meaning of Section 8(d) of the Act. I conclude and find, therefore, that by company, subject to the terms of this Agreement " 422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD instituting the incentive plan under the circumstances outlined above, the Respondent did not violate Section 8(a)(5) or 8(d) of the Act. Accordingly, this aspect of the complaint will be dismissed. Inasmuch as I have found that the institution of the incentive pay plan did not constitute a violation of the Act, it necessarily follows that the layoff which flowed directly from the plan cannot be regarded as violative of Section 8(a)(5) or 8(a)(3) of the Act. 2. The discipline of Hams and the suspension of Williams Concerning the discipline of Harris, a union committee- man, it is evident that Foreman Camerano told Harris and Shop Chairman Lenoir that if Harris did not come up to production standards he would be suspended under "orders" given to Camerano. Moreover, McNeely told Martin and Fair that Harris "was a good example for the men to start on, a good example to start on the committeeman to get the guys to accept the incentive program." I conclude and find that the suspension of Harris was violative of Section 8(a)(3) and (1) of the Act. With respect to the suspension of Williams, it is undisputed that he was outspoken in his opposition to the incentive plan program at the January 31 meeting. Moreover, when McNeely and Valaska held meetings with employees in the various departments on February 8, Williams again spoke out against the plan, stating that "this thing wasn't any good." McNeely testified that Williams was the only "name" he remembered of those who opposed the incentive program. Fair testified that on February 11, McNeely told him that the Company was giving Williams a 30-day suspension for "deliberately" "messing up" some 70 castings. Fair argued that other men were doing the same type of work and that Williams should be given a verbal and written warning before being given a suspension. To this, McNeely responded that Malaney had ordered that Williams be given a 30-day layoff and that he and another employee, A. T. Staten, came from another plant where an incentive program was in effect and that the Respondent would "have to get something on them to get them out of the plant altogether, so, otherwise them two guys will make it hard for the other guys to accept the incentive program." When informed of the 30-day suspension, Williams protested that he was merely following instructions given him by McNeely and Fair concerning the amount of "paste" to apply to the gooseneck of the core machine. About a month before the suspension, McNeely had instructed Williams and three other employees "to put the paste across the gooseneck five times to make sure we got a good seal." After being informed of his suspension, McNeely instructed Martin and Fair to observe Williams during the balance of the shift. They did so and determined that the application of too much, i.e., five layers, was the cause of the scrap product. However, Martin stated that Williams had no business being given a 30-day suspension since he was merely following the instructions given him by Fair and McNeely. 3. The termination of Bell With regard to the termination of Bell, who had worked for the Respondent or its predecessor for something over 24 years, it is undisputed that on March 24, McNeely accused Bell of striking his Foreman Sudir. McNeely arranged for a first-step grievance meeting immediately but refused to permit the witnesses to the occurrence to be present. Shop Chairman Lenoir said that he would not attend any meetings without witnesses and instructed Bell to go home. Bell went out the front door and McNeely followed him into the middle of the street and shouted that Bell was fired and not to come back. Bell and J. C. Hams, a witness to the alleged incident, testified that no assault occurred and that Sudir and Bell merely had a short conversation concerning the desirability of putting cold iron into a hot furnace. According to the credited testimony, Sudir walked away when Bell questioned his judgment concerning the matter. Sudir did not testify. The first- and second-grievance step meetings were held on March 27 and McNeely again refused to permit the witnesses to the incident to be present. The discharge was upheld. The following 2 days, Lenoir approached Valaska on several occasions to request a meeting on the Bell incident but each time Valaska stated that he did not have time. The procedure in the Bell case was in marked departure from the prior history of handling grievances, according to the testimony of Lenoir. He stated that Respondent had never refused to allow witnesses at the early stages of the grievance, had never discharged an employee outside of the plant or after working hours, had never discharged an employee prior to the first two steps of the grievance procedure, and that the plant manager had never refused to process a third-step grievance no later than 1 day after the second step. According to Fair, the day following the alleged altercation McNeely told him and Martin that Bell had struck a supervisor. Fair responded that he did not believe this and McNeely stated that Bell had been discharged. Martin then stated that McNeely was "making a big mistake" and that the employees would go out on strike. McNeely responded that he agreed with him as "This is what we want them to do. We want to let Rockford know if we close the joint it wouldn't be our fault. It is the Union's fault because they would not cooperate. If they walk out, they will take the monkey off the Company's back." On the other hand, counsel for the Respondent asserts in his brief that the procedure followed with respect to the Bell grievance was in accord with the contract. Thus, he points out that article XVI, section 3, provides that before disciplinary action is taken, the foreman involved "shall advise the committeeman of the department and the shop chairman as to the reasons and circumstances and afford them an opportunity to discuss the case." There is no provision for having witnesses at such a disciplinary meeting. Moreover, section 5 of the same article specifical- ly excludes witnesses from the first step of the grievance procedure. According to the contract, witnesses are not permitted until step four of the grievance procedure. Accordingly, counsel contends that McNeely was only complying with the disciplinary procedure provided by the SUNDSTRAND CASTINGS CO. contract. Counsel points out that when Lenoir refused to participate in the meetings and-discuss the case, Bell left the meeting and McNeely "had no choice but to support his supervisor and assess the appropriate discipline. All of this is simply unrelated to any protected union activities." Concerning the contention of counsel for the General Counsel that the Respondent discharged Bell in order to "precipitate a strike by employees," counsel for the Respondent states that that charge "is baseless and without support. The Union had served notice of its intent to strike long before Bell's discharge. Furthermore, it is plain that the strike was caused by unsettled grievances relating to other matters, as the notice from the Union indicated .. . (the Union could not legally have struck over the Bell discharge until after it had been processed through the grievance procedure)." Although Foreman Fair testified that McNeely once stated that the Respondent had used Bell "as a tool to get the employees to go on strike," McNeely denied having made such a statement or having such an intention. In this respect, I credit McNeely inasmuch as it seems only logical that when told that Bell had struck Gupta he would take action to support his supervisor. I conclude that the preponderance of the evidence concerning the termination of Bell supports the position of the Respondent. Accordingly, the allegation that the Respondent violated Section 8(a)(3) and (1) of the Act by terminating Bell will be dismissed. 4. Alleged failure to process grievances After Bell's discharge the parties held a number of grievance meetings, but they were unable to resolve any of them. At a union meeting on March 26, Lenoir told the approximately 200 members in attendance that the Respondent would "do nothing" on the grievances and that Bell had been discharged allegedly for having struck a foreman. The record shows that some four or five members stated that they were present and that Bell did not touch the foreman. Both Lenoir and the Union's attorney, Sugarman, told the group that the Williams matter constituted an unfair labor practice and Sugarman added that unfair labor practice charges had been filed against the Respondent, and that, in his view, the Respondent had committed contract violations. The employees voted virtually unanimously to strike and did so on March 28. Early in April McNeely allegedly told Martin and Fair that the Respondent was using the Bell incident in order "to get the guys to walk out on strike so that they could close the joint down." The only evidence that the Respondent delayed in the handling of any grievance was that Plant Manager Valaska told Lenoir that he was too busy to meet with him on the Bell grievance on March 27 and on the morning of March 28.8 In this regard, it should be noted that the Respondent 8 Doubtless Valaska was busy on those days since the Union had taken a strike vote on March 26 and the union walkout (which took place on March 28) was imminent 9 In his brief, counsel for the Respondent states that "the real objections of the Union to the Company's grievance handling appears to be that the Company would not give in to the Union demands as it had done in the past " Counsel for the Respondent notes that the contract did not contain an arbitration clause and that the Union legally was permitted to strike over 423 had met with the Union and completed steps one and two of the Bell grievance procedure the morning of Monday, March 27, following his discharge the previous Friday. Counsel for the General Counsel, with respect to any other grievances, failed to show a single instance of delay on the part of the Respondent. Indeed, with respect to every grievance for which an approximate filing date was established, the record shows that the grievance was processed through the fifth step with expedition. Thus, the incentive system was installed on February 9 and the fifth- step grievance meeting over that matter and all related grievances was held on February 24. With regard to the Bell grievance, which was filed on March 27, it reached the fifth step of the grievance procedure on May 2. There was no evidence that any grievance failed promptly to reach the fifth and final step of the grievance procedure. I conclude, therefore, that the allegation of the complaint regarding delay or failure to process grievances is without merit.9 As far as appears, the Union never contended that the discipline given Williams was in any manner related to his opposition to the incentive system. Indeed, he was by no means the only employee who spoke out against the inventive plan. Many other employees vocally opposed it and, according to testimony submitted by the Union, the membership was nearly 100 percent against it. The issue pressed by the Union concerned whether the number of castings actually scrapped was only 31 instead of 51 and whether the Respondent could prove that it was Williams who caused the scrap. When the Union filed charges in Case 13-CA-11299 on March 3, it did not alleged that the suspension of Williams was violative of the Act; nor did the Union raise this issue before the Board when the settlement agreement was entered into in May. When charges were filed in Case 13-CA-11689, the Union still did not allege that the suspension of Williams was a violation of the Act. Thus, argues the Respondent, it "is clear that the Union regarded Williams' case as nothing more than a disputed disciplinary action, which is exactly what it was." The Respondent argues that uncontradicted evidence in the record establishes that Williams was disciplined for cause. He had been making identical cores for over 2 months without applying excess paste and then, all of a sudden, he produced several thousand dollars worth of castings that had to be scrapped. The Respondent points out that if it had "been intent upon getting rid of Williams because of his opposition to the incentive plan, it certainly could have fired him for causing the scrap. However, it chose the more lenient penalty, thereby showing its good faith. Williams returned to work on March 11, without further incident." I agree with the Respondent, for substantially the unsettled grievances , this, according to counsel for the Respondent, explains why it was "no surprise that the Company had been forced to yield on most past grievances." Counsel for the Respondent also notes that the Union "was equally adamant in its positions throughout the period involved In this regard, the record shows that the Union never offered to compromise a single issue. The Company offered to compromise on the only grievance for which settlement was reached, the '30-minute dock' grievance" 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reasons it advanced. Thus, the complaint as to Williams will be dismissed. 5. The settlement agreement in Case 13-CA-11299 The Regional Director and the Respondent entered into a settlement agreement under date of May 4. The evidence is uncontradicted that the Respondent took every action required of it pursuant to that agreement. Thus, it withdrew the incentive plan, revoked and withdrew all written and oral warnings allegedly issued pursuant to the incentive plan, paid Harris backpay for the time of his suspension, agreed to recall laid-off employees as jobs became available, and posted the required notices and advised the Regional Office of its actions. On the other hand, counsel for the General Counsel argues that the Respondent "committed new and independent unfair labor practices subsequent to entering into the Settlement Agreement." Thus, he asserts that the Respondent violated Section 8(a)(3) of the Act on June 29 by refusing to reinstate unfair labor practice strikers. Moreover, he states that on May 19 and thereafter the Respondent violated Section 8(a)(3) by denying severance pay to union employees. General Counsel argues that the Respondent's conduct between January and July "reveals a course of devious and flagrant conduct." He contends that the "virtual ramrodding of the incentive plan upon the employees by illegal discipline and the suspensions of Harris and Williams, followed by a calculated policy of unfair labor practices and refusal to resolve grievances in order to compel and prolong a strike, reflects the overwhelming bad faith by the Company." He contends that, by discharging Bell, the Respondent desired to "insure that the Union strike." Moreover, he asserts that the Respondent's conduct subsequent to signing the agreement "shows that its bad faith and antiunion animus was of a continuing nature." Finally, he urges that the settlement agreement had to be set aside in order to establish the various unfair labor practices which caused and prolonged the strike, and that by refusing to reinstate the strikers on June 29, thereby violating Section 8(a)(3) of the Act, the Respondent "forfeited any right to hide behind the Settlement Agreement." Finally, it is urged that the Regional Director "never put his imprimatur of compli- ance" on the agreement, inasmuch as under Board practice and "implicit in the terms of the Agreement" the latter "is not fully consummated until the Notice of Compliance letter is sent out." Counsel for the Respondent refers to the dissenting opinion of Chairman Miller in International Photographers, Local 659, IATSE, 197 NLRB 1 187, 1192 (1972), where the Chairman made the following observations: We have a very real interest in settling charges, since if it were not for the fact that over 90 percent of such charges are disposed of by settlement and other early methods of disposition at the regional level, this Board would be inudated by such a caseload that we would be totally paralyzed. Considerations of equity also require that a respondent which has in good faith bound itself to a course of complying with such an agreement should be entitled to rely on compliance therewith by the other party or parties, and not be subject to their whim or caprice in deciding to withdraw after a definitive agreement has once been executed. Indeed, if it becomes known that a party cannot rely on such agreements and if instead they are mere will o' the wisps doomed to disappear at the whim of the other contracting party, how can we expect respondents seriously to consider entering upon settlement discus- sions? Members Fanning and Kennedy, who constituted the majority in that case, held that the Regional Director did not commit reversible error in withdrawing approval of the settlement agreement and reopening the case for further proceedings, under the circumstances of the case. The majority stated: "While settlement agreements are entitled to be treated with sanctity and should not be lightly set aside, we recognize that circumstances can exist which warrant permitting withdrawal from a settlement agree- ment. Such is the case here." Following the execution of the settlement agreement, Shop Chairman Lenoir met with union members on numerous occasions at which the possibility of returning to work was discussed. Lenoir testified that many members felt that Williams and Bell had been wronged and that the Respondent had thereby committed unfair labor practices. In rrud-June Joe Varick, the chief engineer and superin- tendent of the maintenance department, told Fair that the Respondent was looking for "a way to close the place down to get Mr. Sadler and Mr. Taylor off the book, and that the Union had done exactly what Taylor and Sadler wanted them to do by walking out." It is not contradicted that in mid-June Martin telephoned Lenoir and stated that McNeely had told him (Martin) that McNeely had been sent to the plant "to give the Union hell, and not settle any grievances with them. That way maybe they would walk out." In his brief, counsel for the Respondent discusses the credibility of Foreman Fair, whose testimony he describes as "so improbable and filled with discrepancies and half- truths that it cannot be credited." Fair had been employed from September 1955 until the plant closed on July 21, 1972. In 1971 and 1972 he was a night supervisor over some 30 employees. I watched Fair closely as he testified, because it was a little difficult to understand him on account of a slight speech defect. In view of counsel's characterization of the testimony of Fair, I have carefully read the testimony bearing thereon and have considered the objective points made by counsel for the Respondent in his brief. Counsel makes the following points concerning the credibility of Foreman Fair: (1) He testified that in early March, in a conversation with McNeely, the latter told him that the Company was not going to give an inch on any grievances and that McNeely stated that "the only thing the Company was going to give on would be fifteen minutes of the thirty minute dock." By contrast, the record shows that it was not until May 10 and only after a number of grievance meetings with the Union that the Company for the first time proposed a compromise on the 30-minute dock SUNDSTRAND CASTINGS CO. grievance. In view of this, counsel submits that it is inconceivable that McNeely would actually predict the terms of a compromise taking place several months in the future," and that certainly in early March when the statement was allegedly made "the possibility existed that the Union would give in on the grievance and that it would not even have to be compromised, or that it might be compromised on a different basis." (2) Fair testified that he did not know about the defective castings made by Williams until McNeely came up and told him that Williams "had deliberately ruined 70 castings." However, McNeely testified that Fair came down and looked at the castings with Martin and McNeely before Williams' name was mentioned. Fair testified that his first concern when he learned of the scrap problem was why Williams should be suspended when he had a warning. Counsel argues that McNeely's version "is more probably," in that it would seem logical that a supervisor would be shown scrap produced by a man immediately under his supervision and that the scrap production would be his first concern rather than whether the employee involved had been given a warning. (3) Fair made no reference to his having instructed Williams concerning the application of past, thus leaving the impression that McNeely's alleged instructions were the basis for his believing the discipline too harsh. However, Williams testified that Fair gave him instructions on several occasions to "use plenty of paste" and that McNeely had not given him any instructions for at least a month. (4) Fair testified that the Respondent wanted to shut the plant down and wanted to have the employees walk out. Witnesses for the Respondent denied any such intention and, argues counsel, the record shows how unlikely it would be. Respondent had spent hundreds of thousands of dollars on plant equipment and was "trying desperately to operate the plant." (5) Counsel suggest that Fair's allegiance was with the unit employees and refers to the fact that when told that Bell had struck a supervisor, Fair's first comment was "I don't believe it." When informed that the incentive plan would be placed in operation he objected on the ground that the Union would not accept it, and he objected to disciplining employees for low production, contending that he had been instructed "to find something to discipline" them for whether they were "innocent or guilty." Finally, counsel points out that Fair attributed statements to either McNeely or Malaney which they categorically denied ever making. Counsel, therefore, submits that Fair's testimony, which is not corroborated, "cannot be credited as against that of McNeely, Malaney and other Company witnesses." While I am persuaded that Foreman Fair was sympa- thetic with the Union's cause, I am not convinced that he knowingly distorted his testimony to favor the position of the Union and counsel for the General Counsel. He has 10 1 have not overlooked the fact that he stated that the decision to change the "dock" from 30 minutes to 15 minutes was reached in early March, whereas, the preponderance of the evidence indicates that it actually was reached in May. I do not regard this discrepancy as warranting the rejection of his testimony While I recognize that the Respondent's witnesses denied the statements attributed to them by Fair, I am of the opinion that Fair did not fabricate out of whole cloth the remarks he 425 been employed by the Respondent since 1955 and during the last 2 years he had occupied the position of foreman over some 30 employees. Fair appeared to me to be a candid witness who responded to questions forthrightly and without hesitation. I do not believe that he colored his testimony to- favor the government's case and, accordingly, I conclude that he is entitled to be credited.io 6. Failure to recall strikers On July 3 and 5 the striking employees offered to return to work. As of either date, however, so argues the Respondent, it had eliminated most of their jobs pursuant to a plant closedown and the jobs that remained were being performed by office employees and supervisors. It urges that since they have been permanently replaced, they had no claim to job reinstatement, unless they were striking over unfair labor practices. The Respondent's position is that the strike was economic in nature from its beginning. However, it further contends that assuming that the institution of the incentive plan and the allegedly related discipline in layoffs were unfair labor practices, the settlement reached in May "eliminated those matters from strike consideration and converted the continuing strike into an economic strike." As we have seen, Respondent revoked its incentive plan, revoked all discipline allegedly assessed pursuant thereto, paid Harris backpay for the period of suspension, and informed the Union that the employees laid off would be recalled as soon as possible. Thus, argues the Respondent, "there were no longer any outstanding issues between the Company and the Union over the incentive plan or related discipline. Therefore, these matters, even if unfair labor practices, were not the cause of the continuation of the strike and cannot serve to make it continue as an unfair labor practice strike." I' Shop Chairman Lenoir testified, with respect to why the strike continued after May 4, that he had "talked with many of the members, and many of the members told me, they said, `Jimmy, we have Willie Williams, who we felt the Company did wrong; we have Tom Bell, who we felt the Company did wrong, and we feel that it is an unfair labor practice, and we are not willing to go back in there when the Company done these people like they have been done, they won't do nothing on it.' " Thus, the issue of whether or not the strike continued as an unfair labor practice strike turns on the resolution of the issues relating to Bell and Williams. As I have found above, the Respondent did not commit any violation of the Act in connection with the termination of Bell or the suspension of Williams. It follows, therefore, that the continuation of the strike cannot be ascribed to any unfair labor practices. It follows, therefore, that when the employees offered to return to work on July 3, they had been permanently replaced by supervisors and office ascribed to fellow supervisors. It seems to me to border on the incredible to attribute to Fair such animosity toward his employer of some 18 years as counsel for the Respondent suggests in his brief 11 In support, the Respondent cites A 0 Corporation, Smith, Granite City Plant v N LR B, 343 F.2d 103 (C.A 7, 1965), and Nelson B Allen, 149 NLRB 229 (1964) 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD workers and, moreover, the Respondent was engaged in winding down operations preparatory to closing the plant. Even if it be assumed that the institution of the incentive plan and the allegedly related discipline and layoffs were unfair labor practices, the May settlement agreement eliminated these matters from strike consideration and converted the strike into an economic strike. In the Nelson B. Allen case, supra at 245, the Trial Examiner stated, and the Board adopted his statement, that: After January 23 when valid offers had been made to all [pursuant to a Board settlement agreement], however, all remained on strike to seek a contract. Their status thus would change from unfair labor practice strikers, to economic strikers, unless it can be said that in pursuing such objective they were protest- ing an unlawful refusal to bargain. Since I have found that the Respondent was, by this time, meeting its statutory bargaining obligation, I must conclude that the continuing strike was for an economic object, and that the drivers who remained away became economic strikers. Moreover, the Respondent argues that even if it be assumed that the employees were unfair labor practice strikers it would have been an unreasonable requirement for the Company to have called them back. Polgreen testified that by the time the question of recall came up, the Respondent had closed its semi-steel division and was winding down operations in its investment division. Office employees were dividing their time between the office and the production floor and were doing the little production work that was left. Moreover, points out the Respondent, only 10 to 12 days remained before final shutdown and it would have taken a number of days to determine who should be recalled to what jobs under the terms of the contract. In addition, counsel for the Respondent points out that a question exists as to whether the request to reinstate made on July 3 was an appropriate offer, since, "it spoke in terms of reinstating all strikers rather than those for which positions were left. It was not until July 8, that the Union formally retreated from this position (R. Exh. 9) " The record shows that the Respondent advised the Union of the possible plant closing on May 2 and thereafter discussed with the Union possible ways and means of continuing operations. During this time Polgreen assured Attorney Sugarman that if the decision to close were made, the Respondent would be willing to bargain over the effects of the closing upon employees. At a meeting on May 19, the Respondent informed the Union of its final decision to close. On this occasion, Attorney Sugarman introduced the question of severance pay and asked what the Respondent's position was with regard to it. Polgreen responded that he did not think severance pay would be appropriate in view of the magnitude of the losses sustained at the foundry, but that Respondent would consider any firm proposal that the Union would make. Sugarman then proposed that severance be paid on the same basis as it had been paid in 1969 to the magnesium- aluminum employees. Polgreen told Sugarman that he would try to get him an answer that day. However, after being unsuccessful in attempting to reach his superiors by telephone, Polgreen informed Sugarman that the Company would take the question of severance pay under considera- tion and communicate with the Union at a later date. The parties met on May 23. At that time they discussed the severance pay plan for office and supervisory employees. The Union argued this severance plan was discriminatory in that it provided severance pay for unrepresented office employees but not for union-represented production employees. Polgreen took the position that there were many differences in benefits for the two groups, including, among other matters , pension contributions. Polgreen offered to make an analysis comparing benefits for office employees with the benefits of union-represented employ- ees. However, Sugarman did not ask that such an analysis be made and stated that he did not regard the difference in benefits as an adequate answer. Polgreen again stated that the Respondent's position that severance pay was not appropriate in view of the very substantial losses incurred at the foundry. Sugarman and Polgreen had two telephone conversa- tions late in May and early in June in which the subject matter of the discussion was substantially similar to what had been discussed at the May 23 meeting. On June 29, the parties had a meeting under the auspices of the Federal Mediation and Conciliation Service, where the issue of severance pay was discussed. Sugarman asked if the Respondent had a counterproposal and Polgreen respond- ed by stating that the Respondent had considered the severance pay request and had decided to deny it. In my view, the General Counsel has failed to sustain his burden of proving lack of good faith on the part of Respondent. All he proved is that with regard to a single issue the Respondent refused to accede a union demand, or conversely, that the Union refused to accede to a proposal of the Respondent. Section 8(d) of the Act provides that the requirement of good-faith bargaining "does not compel either party to agree to a proposal or require the making of a concession." It seems plain to me that the Respondent was not required to compromise its position and to give the Union more benefits upon the closing of the plant. It seems obvious that these are matters for bargaining and not subject to the judgment of the Board. As the court observed in Chevron Oil Company, Standard Oil Company of Texas Division v. N.L R.B., 442 F.2d 1067, 1074 (C.A. 5, 1971): Collective bargaining by its very nature is "an anneal- ing processing hammered out under the most severe and competing forces and counteracting pressures." N.L.R.B. v. Dalton Brick & Tile Corp., 5th Cir. 1962, 301 F.2d 886, 895. The Board is charged with the responsibility of overseeing and refereeing the bargain- ing process, but it is not empowered to compel, either directly or indirectly, concessions or otherwise sit in judgment upon the substantive terms of the agreement. It follows that "it is not for the Board to balance the scales or equalize or neutralize pressures in the name of lack of good faith." [Citations omitted.] General Counsel further contends that it was illegal discrimination for the Respondent to accord severance pay SUNDSTRAND CASTINGS CO. 427 to unrepresented office employees and not production employees who were represented by the Union. In this connection, it should be noted that the office plan makes no distinction between office employees represented by a union and those not so represented. It is further clear that if the production workers here were not represented by a union they still would have no right to participate in the office plan. In other words, the distinction is between office employees and production employees, and not between represented and unrepresented employees. In this regard, the Board and the Courts have consistently held that, in the absence of proof of unlawful motive, it is not an unfair labor practice for an employer to grant benefits to unorganized employees and withhold the same benefits from organized employees. See e.g., Chevron Oil Company, supra; Firestone Synthetic Fibers Company, 374 F.2d 211, 216 (C.A. 4, 1967); B. F. Goodrich Co., 195 NLRB 914 (1972); and Quaker Tool & Dye, Inc., 169 NLRB 1148 (1968). Thus in the Goodrich case, the Board stated that "[T ]he granting of new profit-sharing benefits to unorgan- ized employees but not to represented employees is not, standing alone, prohibited discnmination. The Act does not impose upon an employer the obligation to grant or confer upon represented employees the right to receive such benefits solely on the basis that like benefits were conferred elsewhere." In my opinion, the record evidence shows that, in view of the very substantial losses over the entire 5-year period that the Respondent operated the foundry, the Respondent had the compelling business justification for refusing gratui- tously to grant severance pay not required by the terms of the contract with the Union. Accordingly, I shall dismiss this allegation. CONCLUSIONS OF LAW 1. The Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By suspending employee Preston Harris the Respon- dent violated Section 8(a)(3) and (1) of the Act. 4. The aforesaid unfair labor practice is an unfair labor practice affecting commerce within the meaning of Section 2(6) and (7) of the Act. 5. In all other respects as alleged in the complaint, Respondent has not engaged in conduct violative of the Act. THE REMEDY In order to effectuate the policies of the Act, I find it necessary that the Respondent be ordered to cease and desist from the unfair labor practices found and from any like or related invasion of the rights of employees under Section 7 of the Act, and to take certain affirmative action. [Recommended Order omitted from publication.]