Friendly Ford

834 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Valley Ford Sales, Inc., d/b/a Friendly Ford and International Association of Machinists and Aero- space Workers, AFL-CIO, District Lodge No. 87, Local Lodge No. 1309. Case 20-CA-7485 June 21, 1974 DECISION, ORDER, AND NOTICE TO SHOW CAUSE On May 11, 1972, International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 87, Local Lodge No. 1309, herein called the Union, filed the charge in this case and duly served it on Valley Ford Sales, Inc., d/b/a Friendly Ford, herein called the Respondent. About the same time, the Union filed a grievance concern- ing the same subject matter and, on May 30, 1972, the General Counsel deferred further proceedings pending the outcome of an agreed-upon arbitration. The arbitrator issued his opinion and award on January 11, 1973. Thereafter, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 20, issued a complaint on May 22, 1973, against Respondent, and an amendment thereto on August 30, 1973, alleging that Respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the National Labor Relations Act, as amended. Copies of the charge, complaint, and notice of hearing before an Administrative Law Judge were duly served on the parties to this proceeding . With respect to the unfair labor practices, the complaint alleges in substance that on May 1, 1972, Respondent made a unilateral change in a wage incentive plan without giving the Union notice thereof or an opportunity to bargain collectively concerning the change. On May 30, 1973, Respondent filed its answer to the com- plaint admitting in part, and denying in part, the allegations in the complaint, and raising affirmative defenses. On September 17, 1973, counsel for the General Counsel filed directly with the Board a Motion for Summary Judgment. Subsequently, on September 24, 1973, the Board issued an order transferring the proceeding to the Board and a NoticeTo Show Cause why the General Counsel's Motion for Summary Judgment should not be granted. Respondent there- after filed a response to Notice To Show Cause, entitled "Memorandum in Opposition to General Counsel's Motion for Summary Judgment." Upon the entire record in this proceeding, the Board makes the following: I Spielberg Manufacturing Company, 112 NLRB 1080 (1955). 211 NLRB No. 129 Ruling on the Motion for Summary Judgment As noted above, the complaint alleges that Respon- dent violated Section 8(ax5) and (1) of the Act by unilaterally rescinding its wage incentive plan. In its answer and affirmative defenses, Respondent con- tends, first, that such action was permissible under the management rights provision of its collective- bargaining agreement with the Union , and second, that in any event the Board, under its Speilberg' precedent, ought to defer to the award of the arbitrator who found that Respondent had a right to rescind the plan. In rejoinder, the General Counsel contends that the management rights clause of the contract does not constitute a waiver of the Union's right to require bargaining concerning the recission of the wage incentive plan, and that the arbitrator's decision and award is a substantial departure from precedent, is internally inconsistent, and, according- ly, is repugnant to the purposes and policies of the Act and ought therefore to be disregarded. We agree with Respondent. The underlying facts are not in dispute. For 30 more years, the Union has represented Respondent's shop employees in a multiemployer association unit. Successive contracts have established the minimum wages of the represented employees, but been silent concerning wages in excess of those minimums. About 1954, Respondent unilaterally instituted a wage incentive plan. About 1956, Respondent unilaterally abolished it for 1 or 2 months and about 1960, Respondent unilaterally modified the plan to provide for monthly rather than semimonthly com- putations. The plan continued in existence until May 1, 1972, when Respondent unilaterally abolished it. At no time did the Union ever seek to bargain about the plan, or modifications thereof. Respondent and other employer-members of the association have instituted and rescinded other incentive plans, without comment from the Union. At the time the plan was ended, in May 1972, there was in effect a master contract which provided, inter alia: SECTION IV. MANAGEMENT RIGHTS All matters except those pertaining to rates of pay, hours and conditions of employment as provided in this Agreement shall be considered the prerogative of the Employer . Management of the plant and the direction of the working forces, including, but not limited to the right to direct, plan, control plant operations and to set pro- duction schedules, to accept, reject and perform any and all types of work, to terminate or FRIENDLY FORD 835 discharge employees for justifiable causes and to relieve employees from duty because of lack of work or for other legitimate reasons, and the right to introduce new and improved methods and facilities, and the management of the properties, is exclusively vested in the Employer, provided, however, that any action taken under this section shall not conflict with the express terms of this Agreement. SECTION X. WAGE SCHEDULE Paragraph 2. The wage rates specified herein are minimum and no employee shall have his pay reduced as the result of the signing of this Agreement. Nothing herein shall prohibit the paying of higher rate of pay at the discretion of the Employer. (Section XIV contains a three-step grievance procedure providing for arbitration as the last step.) On the date of the rescission of the wage incentive plan, the Union and the Association presumably were bargaining for a new contract; however, at the arbitration hearing, the Union and the Respondent stipulated that "nothing they did or didn't do for negotiating that [new] contract would have any [e]ffect upon the merits or rights in this particular arbitration case." As noted above, the arbitrator's decision and award held that Respondent had a right unilaterally to terminate the incentive plan. The arbitrator found that the Union had waived its right to object to the termination of the incentive plan based on (a) section IV of the contract, the management rights clauses; (b) the Union's failure to challenge the discontin- uance of the plan in 1956 and the change made in 1960; (c) the Union's failure to negotiate concerning the plan at contract openings; and (d) the Respon- dent's implementation from time to time of other incentive plans without objections from or negotia- tions with the Union. In so deciding, the arbitrator first interpreted section IV, the management rights provision of the contract, which, in its first sentence, excepts "rate[s] of pay . . . as provided in this Agreement" from the prerogatives of management. The arbitrator conclud- ed that the incentive plan was not a rate of pay provided for in the contract and, accordingly, that it fell within the scope of management prerogative. In support of his conclusion, he found that the contract's wage provisions, including section X, the maintenance of standards clause, covered neither the broader category of wages above the minimums prescribed, nor incentive earnings in particular. In his consideration of the waiver issue, the arbitrator discussed Board and court precedents, some of which he found applicable2 and others, distinguishable.3 After cautioning that his authority was limited to the particular question before him, that of the unilateral termination of the incentive plan, he stated that the subject of other incentive plans might not have been waived by the Union and that Respondent's obliga- tion to bargain in the future on the general subject of incentive plans might still exist. In the recent Radioear4 case, which raised the question of whether certain clauses in a collective- bargaining agreement permitted an employer to discontinue the payment of "turkey money" to its employees, the Board decided to defer its decision to the parties' agreed-upon arbitral process. We there suggested some of the factors that an arbitrator might consider in determining whether the contract permitted such action. We said: The Trial Examiner . . . [relied] . . . on the principle that there must be a "clear and unequivocal" waiver of the right involved. We do not agree. Where the parties, as here, have engaged in the collective-bargaining process, as contemplated by the statute, and have executed a collective-bargaining agreement, setting forth the terms of their bargain, we are unwilling to ignore what has taken place at the bargaining table and decide the parties' dispute on the basis of a simplistic formula arrived at by this Board. While in some situations the rule of "clear and unequivocal" waiver may be a realistic appraisal of the bargain reached, in other situations it may not be. The answer does not, in our view, call for a rigid rule, formulated without regard for the bargaining postures, proposals, and agreements of the parties, but rather, more appropriately, should take into consideration such varied factors as (a) the precise wording of, and emphasis placed upon, any zipper clause agreed upon; (b) other proposals advanced and accepted or rejected during bargaining; (c) the completeness of the bargaining agreement as an "integration"-hence the applicability or inapplicability of the parol evidence rule; and (d) practices by the same parties, or other parties, under other collective- bargaining agreements. These are but a few of the many factors that could and would be considered by an arbitrator. 2 International Shoe Company, 151 NLRB 693 (1965); Speidel Corpora- 3 Tide Water Associated Oil Company, 85 NLRB 1096 (1949); N.L.R.B. v. tion, 120 NLRB 733 (1958); N.L.R.B. v. Nash-Finch Company, 211 F.2d 622 Citizens Hotel Company, d/b/a Hotel Texas, 326 F.2d 501 (C.A. 5, 1964). (C.A. 8, 1954); Intermountain Equipment Company v. N.LR.B., 239 F.2d 480 4 Radioear Corporation, 199 NLRB 1161(1972). (C.A. 9, 1956). 836 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is clear that the parties had ample opportunity to present to the arbitrator the kinds of evidence suggested by our Radioear decision. Indeed, the parties presented to him the relevant portions of the collective-bargaining agreement, and evidence of the negotiations for the contract, of the practices with respect to incentive plans engaged in by Respondent and other employers subject to the contract, and of the Union's response thereto. The arbitrator clearly considered and weighed this evidence in rendering his decision and making his award. Our dissenting colleagues would find the award repugnant to the Act, apparently fastening their view solely upon only one of the factors considered by the arbitrator; i.e., the silence of the contract on the specific subject of incentive wage plans. That silence apparently speaks so loudly to them that they have no need to weigh in the balance such other factors as past negotiating history, the past practice of both parties with respect to incentive matters, the lan- guage of other contract provisions, and others duly considered and weighed by the arbitrator. They seem also to ignore that when the Board, in the past, has been called upon to interpret agreements, as our colleagues seem so eager to do here, the Board has looked at many of the same factors as those considered by the arbitrator here. See, for example, some of the cases considered by the arbitrator, such as Speidel Corporation, 120 NLRB 733, and Interna- tional Shoe Company, 151 NLRB 693, in both of which the Board found and gave effect to an intent to permit unilateral action by employees when the contracts were silent on the issues involved, but where, after weighing all of the kinds of factors examined by the arbitrator here, the Board conclud- ed that an intent to waive was evidenced. We fail to understand why our colleagues are unwilling to accept the findings of an experienced arbitrator, selected by the parties, on such matters of interpretation, nor how they can find either in his award or in our willingness to accept it some violation of "principles of law thus established and maintained over the years." The only such principle we can divine is a principle that only this Board should interpret agreements-a principle which we long ago rejected in Spielberg, for reasons which are at least as valid now as they were then. As noted, the General Counsel contends that the arbitrator's decision is repugnant to the purposes and policies of the Act, and ought to be disregarded under Spielberg, because of alleged internal inconsis- tencies, purportedly to be found in that portion of the decision in which the arbitrator limited its scope to the unilateral termination of the incentive plan S It is therefore unnecessary to consider Respondent's defense on the merits that, under the management rights clause, the Union had waived its and in which he stated he had no authority to rule on whether the obligation to bargain on other incentive plans might still exist. We find no inconsistency, but rather an attempt by the arbitrator to limit his decision to the facts of the case before him. In any event, the inconsistencies alleged by the General Counsel fall far short of mandating a finding that the decision is repugnant to the Act. In these circumstances, we find that, both substan- tively and procedurally, the decision and award fall well within the parameters established by Radioear and satisfy the purposes of the Board's announced deferral policy. Contrary to the General Counsel, we conclude that the decision therefore is not clearly repugnant to the purposes and policies of the Act. Accordingly, as the arbitrator's decision satisfies the Spielberg standards, we find merit in Respondent's second defense, that the Board defer to that decision, and shall, accordingly, deny the General Counsel's Motion for Summary Judgment.5 However, as no party has requested dismissal of the complaint, we shall order the parties to show cause why the complaint should not be dismissed. ORDER It is hereby ordered that the General Counsel's Motion for Summary Judgment be, and it hereby is, denied. NOTICE TO SHOW CAUSE Notice is hereby given that cause be shown, in writing, filed with the Board in Washington, D.C., on or before July 9, 1974 (with affidavit of service on the parties to this proceeding), why the complaint herein should not be dismissed in its entirety. MEMBERS FANNING and JENKINS, dissenting: Since 1954, with minor changes, this Employer has paid his employee-mechanics an "incentive wage," amounting in some instances to 50 percent of an employee's pay. Although their collective-bargaining contract specified a minimum wage, the Union and the Employer had never bargained with respect to the substantial incentive rates enjoyed by the employees. On May 1, 1972, during the term of an existing contract, the Employer unilaterally discon- tinued the wage incentive plan without notification or bargaining with the Union. The first sentence of the management rights clause provides as follows: "All matters except those pertaining to rates of pay, hours and conditions of employment as provided in this Agreement shall be considered the prerogative of the Employer." Para- right to require bargaining about the unilateral termination of the incentive wage plan. FRIENDLY FORD graph 2 of the wage schedule provides: "The wage rates specified herein are minimum and no employee shall have his pay reduced as the result of the signing of this agreement. Nothing herein shall prohibit the paying of higher rate of pay at the discretion of the Employer." An arbitrator to whom this dispute was originally referred pursuant to the grievance-arbitration ma- chinery of the contract has ruled on the basis of his interpretation of the contract; i.e., the above-quoted sentence from the management rights clause and the Union's failure to insist upon its bargaining rights previously that such statutory rights have been waived by the Union. The majority, relying solely upon its precedent in Radioear Corporation, 199 NLRB 1161 (1972), holds that the arbitrator's decision is not repugnant to the policies of the Act and that the Board should defer to his ruling in this case. The issue before us is one of unusual importance in the administration of the Act. For 28 years it has been the established law of labor relations, enunciat- ed by this Board and approved by the courts of appeals and the Supreme Court, that employees cannot be held to have waived their statutory rights in the absence of clear and unmistakable evidence. Ignoring these long existing precedents, set forth below, the majority rejects the "clear and unequivo- cal" rule in favor of its own novel rule which permits the finding of a waiver of statutory rights on the basis of ambiguous, equivocal evidence, such as that relied on by the arbitrator in this case. As long ago as 1946 the Board refused to find that a union had waived its bargaining rights where, as here, the contract set forth a minimum wage rate, but was silent as to other incentive wage increments in the form of merit increases. J. H. Allison Company, 70 NLRB 377 (1946). In that case the employer had previously granted such increases on a unilateral basis without objection from the union. A few months after execution of a new contract the employer granted 31 merit increases without notifica- tion or bargaining with the union. The union requested information as to the names of the employees who had received the increases and the amounts. The employer refused on the ground of management prerogative. The Board found an 8(5) violation, a finding affirmed by the Court of Appeals for the Sixth Circuit in the following words: "Nor do we see logical justification in the view that in entering into a collective bargaining agreement for a new year, even though the contract was silent upon a controverted matter, the union should be held to 6 Tide Water Associated Oil Company, 85 NLRB 1096 (1949) Ibid at 1098. 8 California Portland Cement, 101 NLRB 1436, 1439 (1952), Hekman 837 have waived any rights secured under the Act, including its right to have a say-so as to so-called merit increases. Such interpretation would seem to be disruptive rather than fostering in its effect upon collective bargaining, the national desideratum dis- closed in the broad terms of the first section of the National Labor Relations Act . . .." N.L.R.B. v. J. H. Allison & Company, 165 F.2d 766, 768, cert. denied 335 U.S. 814 (1948). The court emphatically rejected the notion that the employer under the existing contract and practice did not have obligation to bargain about merit increases. "We think the logical deduction to be drawn from the opinions of the Supreme Court is that by virtue of the National Labor Relations Act the obligation of the employer to bargain collectively with representatives of its employees with respect to wages, hours and working conditions, includes the duty to bargain with such representatives concerning individual merit wage increases." Ibid, citing, among other cases, J. I. Case Co. v. N. L. R. B., 321 U.S. 332 (1944); Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342 (1944); Medo Photo Supply Corp. v. N.L.R.B., 321 U.S. 678 (1944). In 1949 the Board held that a management rights clause could not be interpreted as a waiver by a union of the employer's duty to bargain with respect to a retirement allow- ance plan.6 "We are reluctant," the Board said, "to deprive employees of any of the rights guaranteed them by the Act in the absence of a clear and unmistakable showing of a waiver of such rights." 7 In 1952 the Board stated the rule in stronger terms: "Assuming, without deciding, that this statutory right [to receive information for bargaining purposes] may be waived by a union, the Board will not, in any event, give effect to any purported waiver of such right unless it is expressed in clear and unequivocal language." 8 In 1953 Judge Clark, speaking for a unanimous Court of Appeals for the Second Circuit in N. L.R.B. v. Otis Elevator Company, 208 F.2d 176 (1953), rejected the employer's contention that the union had bargained away its right to time study informa- tion through operation of a management rights clause. In the atmosphere of collective bargaining, he held, the fact that a collective-bargaining agreement was silent as to a particular subject of bargaining did not warrant "the drawing of broad inferences of waiver from their silence would be disruptive rather than fostering of amicable relations." Ibid at 179, citing N. L. R. B. v. J. H. Allison & Co., supra. Consistently through the years the Board has adhered to this view. In C & C Plywood, 148 NLRB Furniture Company, 101 NLRB 631 (1952), citing Leland-Gifford Company, 95 NLRB 1306 (1951). M DECISIONS OF NATIONAL LABOR RELATIONS BOARD 414 (1964), the Board held that an employer violated Section 8(a)(5) by unilaterally granting a group of employees an incentive pay raise and refusing to bargain with their union about this matter. The Court of Appeals for the Ninth Circuit reversed (351 F.2d 224 (1965)) on the ground that interpretation of the parties' contract was for an arbitrator or a court, not the Board. The Supreme Court affirmed the Board's finding that the Union had not by contract clearly and unmistakably yielded its interest in bargaining about incentive pay. The Act's emphasis, the Court pointed out, was upon "the protection of free collective bargaining." (385 U.S. 421, 430 (1967).) On the same day the Court reversed the holding of the Court of Appeals for the Seventh Circuit in N.L.R.B. v. Acme Industrial Co., 351 F.2d 258 (1965), to the effect that the grievance-arbitration provision of a contract foreclosed intervention by the Board to require an employer to provide a union with information concerning the removal of machin- ery and the subcontracting of work. Again the Supreme Court upheld the Board's position that the union had not clearly and unmistakably waived its right to bargaining information despite the existence of grievance machinery leading to binding arbitra- tion. The issue of waiver of statutory rights as a consequence of a collective-bargaining agreement was explored in detail by the Supreme Court in Mastro Plastics Corp. v. N.L.R.B., 350 U.S. 270 (1956). There the contract provided in literal terms that the union would not "engage in any strike or work stoppage during the term of this agreement." Despite this language, the Court held that the employees had not thereby waived their right to strike in protest of the employer's unfair labor practices. A contrary interpretation, the Court pointed out, would deprive the employees of their statutory right to strike even though their employer ousted the union by coercion and threats of discharge, "Whatever may be said of the legality of such a waiver when explicitly stated, there is no adequate basis for implying its existence without a more compelling expression of it than appears in Section 5 of this contract." Ibid at 283. The consequence of the arbitrator's decision in the instant case is that some of these employees have had their wages reduced by as much as 50 percent and their Union has been denied the right to bargain for them on this matter, contrary to the provisions of the Act. The Board majority, applying its "announced deferral policy," holds that the arbitrator's decision is not under Spielberg repugnant to the purposes and policies of the Act. Asserting, with no precedent other than its own opinion, that the Board's clear and unequivocal rule with respect to waiver of statutory rights is a "simplistic formula" that will no longer be in effect, the majority reverses that rule, ignoring the long line of court decisions, including those of the Supreme Court, affirming the Board's historic position. We cannot agree that principles of law thus established and maintained over the years can so easily be thrust aside or simply ignored by an agency charged with the effectuation of the policies of this Act. This is not a question of deferring to the arbitral process in a matter involving essentially a question of contract interpretation with overtones of an unfair labor practice. This decision cuts deep into a basic statutory right, that which requires an employer to notify and consult with the representative of his employees before drastically reducing their pay, whether that pay is in the form of wages, bonuses, commissions, merit increases, or incentive plans. To hold, as the majority does, that a union's silence, its bargaining posture, the ambiguity of a management rights clause , or a zipper clause in a bargaining agreement may be sufficient, as in this case, to operate as a waiver of a mandatory subject of bargaining goes to the heart of this statute in denying employees the protection guaranteed them by Con- gress. As the courts have held, it is destructive of the collective-bargaining principle. We do not believe it is the function of this Board to look for ways and means whereby the parties to collective bargaining can selectively avoid their bargaining obligation. Rather, we think every effort should be made by this Board to assure employees of their full rights and their full protection under this Act.