The Dow Chemical Co.

THE DOW CHEMICAL COMPANY 333 The Dow Chemical Company and United Steelwork- ers of America, AFL-CIO-CLC (formerly Interna- tional Union of District 50, Allied and Technical Workers of the United States and Canada) and Wil- liam J. Keith. Cases I-CA-7736, 1-CA-7821, and 1-CA-7873 June 28, 1974 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO On October 30, 1973, Administrative Law Judge John P. von Rohr issued the attached Decision in this proceeding. Thereafter, General Counsel, Respon- dent, and Charging Party each filed exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board hereby adopts as its Order the recom- mended Order of the Administrative Law Judge and hereby orders that the complaint be, and it hereby is, dismissed in its entirety. MEMBER FANNING, dissenting in part: I agree with my colleagues in their adoption of the Administrative Law Judge's finding that Respondent unilaterally announced and scheduled the change in the work shift from a 7-consecutive-days-on-and-2- days-off workweek to a 5-consecutive-days-on-and-2- days-off workweek in violation of Section 8(a)(5) and (1) of the Act. However, unlike my colleagues, I find that a cease-and-desist order is needed to remedy such violation and to guarantee that Respondent will bar- gain with the representative chosen by its employees. Additionally, I disagree; with my colleagues' adop- tion of the Administrative Law Judge's finding that the strike, beginning on June 7, 1971, was unprotected from its inception, because the Union failed to submit its dispute to arbitration in accordance with the griev- ance and arbitration provisions of the existing con- tract, which also contained a no-strike clause,' and that Respondent's unilateral conduct, although it con- stituted an unfair labor practice, was not of such seri- ous nature as to destroy the basis for collective bargaining. As found by the Administrative Law Judge, Re- spondent unilaterally and unlawfully announced that it would make changes in the work schedule which would affect 16 of the 19 employees working in its latex department. Such changes, the record shows, would have resulted in the reduction of the hourly rate of at least one employee, the senior head operator whose position would be eliminated causing him to be transferred to a new position which paid 18 cents less per hour. Additionally, the record contains the testi- mony of Gay, the latex department superintendent, who testified that, because of the reduction of hours worked and the elimination of overtime, weekend, and holiday premiums, he estimated the remainder of the employees in the latex department would earn approximately $570 less per year as a result of the announced change in schedule from a 7-consecutive- days-on-and-2-days-off workweek to a 5-consecutive- days-on-and-2-days-off workweek. Respondent's unlawful unilateral announcement of such proposed changes in working hours, which would have resulted in considerable loss of remunera- tion on the part of the employees, must necessarily have been viewed by the employees as a grave viola- tion of the bargaining obligations required of Respon- dent under the Act. In Arlan's Department Store,2 I dissented from the majority's affirmance of the Trial Examiner who had found that employees who had walked out, notwith- standing the no-strike clause in the contract, to pro- test the discharge of a steward, had not been engaged in protected concerted activity and could lawfully be discharged. The majority therein noted its refusal to accept a broad interpretation of the Supreme Court's decision in Mastro Plastics 3 and stated that the Court had merely rejected the extreme application which the employers sought to give to the general no-strike clause in their contract and upheld the Board's find- ing that the clause in question did not constitute a waiver of the employees' right to strike in protest against employer unfair labor practices characterized by the Court as "flagrant." Thus, the majority indi- cated that it would apply the test of experience, good 1 The no-strike clause in the contract provides that the Umon may engage in strike action after all steps of the grievance and arbitration provisions of the contract have been exhausted. The contract also provides, in addition to the five steps set forth in the grievance procedure, that the Union may not engage in a strike unless or until the Union has made a written request for arbitration after receipt of the step 5 answer, and arbitration has either been completed or refused by the Employer. 2 Arlan 's Department Store of Michigan Inc, 133 NLRB 802. s Mastro Plastics Corp., and French American Reeds Manufacturing Compa- ny, Inc v N.LR.B., 350 U.S 270 (1956). 212 NLRB No. 50 334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sense, and good judgment and would find that only strikes in protest against serious unfair labor practices should be held immune from general no-strike claus- es. The discharge in Arlan's was held, by the majority, to be a serious matter only to the individual involved, since the discharge was a result of a clash of personali- ties. Thus, the majority noted, such dispute, although constituting an unfair labor practice, should have been submitted to the contract grievance procedure. Moreover, the majority reasoned that such dispute was not serious in the sense noted by the Court in Mastro Plastics; i.e., "destructive of the foundation on which collective bargaining must rest." Although the facts in this case are somewhat differ- ent than Arlan's, I find that the views set forth in my dissent therein are equally applicable. In Arlan's, I interpreted Mastro Plastics as holding that a general no-strike clause in a contract for the term of that contract bars only the right to strike over disputes concerning the economic relationship between the employers and their employees, i.e., an economic strike, and does not bar a strike to protest unfair labor practices in the absence of an express waiver, since such strike, in my view, is outside the scope of the contract. In other words, it is my view that Mastro Plastics emphasized that it is the scope and coverage of the contract, and not the degree and kind of unfair labor practices which may be involved, which de- termines whether the employees have engaged in pro- tected activities. Applying Mastro Plastics to this case leads me to conclude that as Respondent engaged in an unfair labor practice in making its unilateral announcement of change in work schedule and in adamantly refusing to negotiate concerning such change, the employees strike against this unfair labor practice I was not barred by the no-strike clause in that contract and was protected activity. This being so, Respondent's dis- It is of course clear that the employees went on strike in protest of Respondent's unfair labor practice Thus, after Respondent announced its decision and refusal to negotiate concerning it, but indicated willingness to talk about the manner and timing of its implementation , the employees withheld strike action and attempted to utilize the grievance and arbitration procedures in an effort to get the decision changed In practical effect they had exhausted those procedures when Respondent 's officials flatly refused the Union's requests to agree to arbitrate the matter in a discussion initiated by Respondent's officials the day before they announced they were going to place the shift change into effect on June 7 The employees were apprised of all these developments, and struck rather than accept Respondent's unlaw- fully imposed change in rates of pay and conditions of employment Even accepting my colleagues ' premise that the strike violated the letter of the no-strike clause, the violation was technical in nature and does not warrant Respondent's rescission of the contract and withdrawal of recognition N L R B v. State Electric Service, 477 F 2d 749 (C A. 5, 1973): Local Union No 721, United Packinghouse, Food & Allied Workers, AFL-CIO v Needham Packing Co d/b/a Sioux City Dressed Beef 376 U S 247; Drake Bakeries Inc v Local 50, American Bakery & Confectionery Workers International, AFL- CIO, 370 U S 254 (1962) charge of the strikers and withdrawal of recognition from the Union were clearly in violation of Section 8(a)(1), (3), and (5) of the Act. Moreover, even applying the test of "experience, good sense, and good judgment" of the majority opin- ion in Arlan's, the unfair labor practice committed by Respondent must be judged sufficiently serious to warrant the employees taking concerted action out- side the grievance-arbitration provisions of the con- tract. The Respondent's unilaterally announced changes in the work shift schedules of the latex de- partment involved the reclassification of some em- ployees into lower paying classifications and substantial wage cuts for the other employees in the department. But the injury suffered by employees in the bargaining unit is not limited to this direct injury to virtually all the employees in the latex department. "For the real injury in this case is to the union's status as bargaining representative." 5 an injury affecting all employees in the bargaining unit. "Experience" in- forms us that wage reductions are among the most sensitive issues in labor relations. "Good sense" tells us that an unlawfully imposed wage cut will provoke employees into withholding their labor. "Good judg- ment" demands that before a no-strike clause be con- strued as applying to strikes protesting unfair labor practices there be clear and unmistakable language in the contract to that effect.' It demands as well consid- eration of the fact that the Union and the employees withheld strike action and continued to utilize the grievance provisions of the contract in an attempt to force the Respondent to the bargaining table up to the time that Respondent decided to implement the an- nounced change. Considering these circumstances, it is clear that responsibility for the strike rests more upon Respondent as perpetrator of the unfair labor practice than upon the Union and the employees who sought to utilize peaceful means of securing their stat- utory rights and only desisted therein when brought face to face with a fait accompli. There are few actions more "destructive of the foundation upon which col- lective bargaining must rest"' than unilateral action which undermines the status and authority of the col- lective-bargaining representative.8 Accordingly, even on the basis of Arlan's I find that the employees' strike was protected concerted activity 5 N L R B v C & C Plywood Corp, 385 U S 421 (1967) Moreover, in considering the seriousness of the unfair labor practice, it is relevant that the changes unilaterally made by Respondent were in essence the sort of changes which it unsuccessfully sought authority to make during collective-bargain- ing negotiations with the Union , and which it then vowed "to get during the life of this contract" 6 Mastro Plastics Corp, supra, 283 7 Mastro Plastics Corp, supra, 281 8 Unless it be Respondent's subsequent action of terminating the unfair labor practice strikers and withdrawal of recognition of the Union as their collective-bargaining representative THE DOW CHEMICAL COMPANY and did not violate the no-strike clause. For these reasons also, I would find that Respondent violated Section 8(a)(5) and (1) of the Act in unilaterally insti- tuting the shift changes and in rescinding the contract and withdrawing recognition from the Union on Au- gust 8, 1971 , and Section 8(a)(3) and ( 1) in terminating the employment of the striking employees because they refused to report to work on August 17, 1971. DECISION STATEMENT OF THE CASE JOHN P. VON ROHR, Administrative Law Judge: Upon charges filed commencing on June 30, 1971,I the General Counsel of the National Labor Relations Board, by the Regional Director for the First Region (Boston, Massachu- setts) issued a consolidated complaint on May 8, 1973, against the Dow Chemical Company, herein called the Re- spondent or the Company, alleging that it had engaged in unfair labor practices within the meaning of Section 8(a)(1), (3), and (5) of the National Labor Relations Act, as amend- ed, herein called the Act. The Respondent filed an answer denying the allegations of unlawful conduct alleged in the complaint. Pursuant to notice, a hearing was held before Administra- tive Law Judge John P. von Rohr in New London, Connect- icut, on July 10, 11, 12, and 13, 1973. Briefs were received from the General Counsel, the Charging Party, and the Respondent on September 10, 1973, and they have been carefully considered. Upon the entire record in this case and from my observa- tion of the witnesses, I hereby make the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The Respondent is a Delaware corporation with its prin- cipal office and place of business located in Midland, Mich- igan. Although it maintains plants throughout the United States, the only facility involved in this proceeding is its plant located at Allyn's Point, Ledyard, Connecticut, where it is engaged in the manufacture of plastics and other chemi- cal products. During the year preceding the hearing herein, this plant shipped products valued in excess of $50,000 to points and places located outside the State of Connecticut. During the same period it received goods and materials valued in excess of $50,000 from points and places located outside the State of Connecticut. Respondent concedes, and I find, that it is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 1 A charge and an amended charge were filed in Case 1-CA-7736 on June 30, 1971, and on December 21, 1972, respectively The charge in Case 1-CA-7821 was filed on August 20, 1971, and the charge filed in Case I-CA-7873 was filed on September 17, 1971. II. THE LABOR ORGANIZATION INVOLVED 335 United Steelworkers of America, AFL-CIO-CLC (for- merly International Union of District 50, Allied and Tech- nical Workers of the United States and Canada), is a labor organization within the meaning of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES A. Events Prior to the Strike Commencing on June 7, 1971 With but the few exceptions as will be noted, the facts in this case are not in dispute. The only plant involved herein is Respondent's facility located at Allyn's Point, Ledyard, Connecticut, where it is engaged in the manufacture of plas- tics and related products. The Respondent has recognized the Union as the collective-bargaining agent for the hourly rated (production) employees at this plant since approxi- mately 1954. The effective contract dates of the last of a series of collective-bargaining agreements were from Febru- ary 23, 1970, to February 26, 1973. At the times material hereto, the Company employed approximately 145 employees, of whom 19 were employed in the latex department, which is the department where the dispute herein arose. The manufacturing process in this de- partment, described as a basically "batch operation" begins with the introduction of various chemicals into large tanks called reactors. When the chemical process is completed, the liquid is transferred into a distillation unit and is then transferred into a cooling tank. It is then pumped to a holding tank where the latex is tested, filtered, and put into storage tanks. Martin Gay, who at all times material hereto was superintendent of this department, described this large- ly automated process as "basically, loading the kettle, watching the reactions, controlling the addition of ingre- dients, and then making the transfers down through the process." Prior to the occasion of the instant dispute, 16 of the 19 employees in the latex department worked a "7 and 2" schedule, i.e., they worked for 7 consecutive days and then had 2 days off. As will be discussed in greater detail below, in about the middle of May 1971, Respondent reached a decision to change this schedule to a regular 5-day work- week, i.e., to a "5 and 2" schedule.2 To accomplish this without laying off any of the employees, this change would involve the adding of an additional reactor cooler operator to each shift, the reduction of head operators from 4 to 3, reduction of drummer filter operators and latex testers from 4 to 3, respectively, and the adding of one handyman, all of which is illustrated as follows: 2 Although the reason for the change is perhaps immaterial, I have no doubt that it was premised on valid economic and business considerations. Thus, at the time of the decision the Company advised the Union that the reason for the change was to save on utility costs. Gay testified that the saving in electricity (which is used to produce steam) would approximate $800 to $1,000 per month In addition, Gay testified that the Company had lost one of its large customers and that its sales of latex had dropped off 8 to 9 percent from the preceding year 336 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 7 & 2 Shift 5 & 2 Shift Classifications Per Shift Total Per Shift Total Head operator 1 4 1 3 Reactor cooler oper. 1 4 2 6 Brui'aner filter oper. 1 4 1 3 Latex tester 1 4 1 3 Handyman 2 3 Utilityman z 1 19 19 Concerning the changes reflected above, the only em- ployee who would suffer a reduction in his hourly rate would be the least senior head operator whose position would be eliminated and who would be transferred to a reactor cooler operator position at a rate of 18 cents per hour less than his eliminated position.3 Further, because of the reduction in hours worked and the elimination of over- time, weekend and holiday premiums, Gay estimated that the other employees would earn approximately $570 less per year than they would on the 7 and 2 schedule. However, and as will be further discussed below, none of these changes actually were effectuated because of the strike which com- menced just prior to the opening shift on the morning of June 7, 1971, at which point the 5 to 2 schedule was to have been put into effect. The first word to the employees concerning the above- noted schedule change took place in early May 1971 at which time Superintendent Gay discussed it with the four head operators. This came to the attention of the Union steward in the department, Ronald Caron, and thereafter Caron attended a series of meetings held between Gay and all the latex department employees. In these meetings vari- ous mechanics of the proposed change were discussed. On May 21, William Sawickey, president of the Local Union, received a copy of a notice addressed to the "Latex Plant Personnel," dated May 20,1971, and signed by Super- intendent Gay, which announced that effective on Monday, May 31, the latex department would commence operating on a 5 and 2 shift schedule. On the afternoon of May 21, Sawickey had a meeting with Gay and several other compa- ny officials. Sawickey testified without contradiction that when he took the position that the matter was subject to negotiations, Personnel Manager James Johnson replied, "that he would be willing to discuss it, but as far as negotiat- ing, no." Sawickey thereupon invoked the grievance proce- dure,5 and the step 1 and 2 formalities were completed, with Respondent denying the grievance. After the meeting Saw- ickey called Francis McDermott, the Union's International representative who serviced the area, and apprized him of the situation. McDermott promptly sent a telegram to Re- spondent, stating that "any change made in the shift sched- ules, as threatened, will be considered a violation of the agreement." A meeting was held on Saturday, May 22, under step 3 of the grievance procedure. In addition to the local union officials, McDermott was also present at this meeting and 3 According to the unrefuted testimony of Gay, the employee to be so affected would be Stanley Angeloszek, whose rate of pay as head operator at $3 82 would have dropped to $3 64 as reactor cooler operator. 4 Although the notice was dated May 20, the record is not clear as to whether it was posted on May 20 or 21 5 Sawickey testified, "So at that time I found it fruitless to discuss the matter any longer, so f started the grievance procedure " the record is clear that from this point forward he acted as the principal spokesman and negotiator for the Union. Mc- Dermott voiced various objections to the schedule change, including the effects it would have upon the employees, and charged that the announced change would be a breach of the contract. With no agreement being reached, the parties met again in a continuation of the step 3 meeting on the following Saturday, May 29. As a result of this meeting, and while no basic agreement was reached, the Respondent postponed the previously announced effective date of the change (May 31) to Monday, June 7. The parties also agreed to meet again on June 3 for the purpose of holding a step 4 grievance meeting. On June 1 the Company submitted a written denial of the step 3 grievance. It is noteworthy that the following statement contained in this document express- es, in essence, the position which Respondent had taken all along with respect to the matter: This change in shift schedule is for economical reasons and the Company Committee does not agree that going from a 7-2 shift schedule to a 5-2 shift schedule must be negotiated but certainly are willing to discuss the mechanics of getting there. The June 3 meeting, will all the parties present, was at- tended for the first time by Frank Bartolomeo, the plant manager, who acted as principal company spokesman. A lengthy and argumentative discussion ensued, but no agree- ment was reached. The meeting ended with Bartolomeo stating that he would give the Union his answer on the following day. This he did by telephoning McDermott the next morning to advise him that, for reasons stated, Respon- dent would adhere to its plan for changing the schedule on June 7.1 Somewhat later on June 7 McDermott was approaching the plant in his car to see about another matter when he was hailed by Plant Industrial Relations Manager James John- son. Johnson advised that Frank Neering, industrial rela- tions manager of Respondent's Midland Division, wished to speak to him. McDermott thereupon accompanied Johnson to the office and a short while later there ensued a three-way telephone conversation between McDermott, Johnson and Neering, the latter having been called in Michigan. The upshot of this conversation was that although McDermott again protested the forthcoming schedule change in the la- tex department, Neering let it be known that he would uphold the decision of the local (Allyn's Point) management and that he would not interfere with the scheduled imple- mentation of the change. B. The Strike of June 7, 1971, and Ensuing Events International Representative McDermott met with local Union President Sawickey late in the evening of June 6, 1971. Sawickey testified that at this time McDermott in- formed him they would meet with the employees at about 8 a.m. the following morning, a Monday. Arriving at the plant at about 7 a.m. on June 6, Sawickey advised the men who were reporting to work that a special meeting, called by McDermott, would be held just outside the plant. At 6 Thereafter, on about June 17, Bartolomeo submitted a written answer to the Union which set forth in detail Respondent's reasons for denying the grievance THE DOW CHEMICAL COMPANY 337 about the same time the men at work in the plant on the late shift were notified of this meeting by a union steward, whom Sawickey had called earlier. Leaving the plant, these men joined the others and a meeting, with approximately 100 employees in attendance, was conducted by McDermott starting at about 8 a.m. McDermott related what had taken place at the grievance meetings with the company represen- tatives. A short while later Johnson came out to address the employees and give the Company's point of view. McDer- mott testified that after Johnson departed "the whole thing erupted," with the employees shouting that they were not going to work. He finally turned to Sawickey, he said, and stated, "Okay, Bill, that's the way the men are. We'll go down and notify the Company that the men don't want to go to work." The men did not return to work that day .7 The following day, June 8, the employees picketed with signs bearing the legend "Dow unfair to its union employees, members of Local 13744 on unfair labor strike." The picket- ing, with never any change of the legend on the signs, con- tinued until about April 1972. As to be expected, in the first days of the strike Respon- dent, by written and/ oral communications with various In- ternational and local union representatives, protested that the strike was in violation of the contract. In response to a telephone call from Industrial Relations Director Neering, Marlin Brennan, a vice president of the International, sent a letter to Neering dated June 7, 1971, advising that he had contacted Union Regional Director Earl Colandro and the President of the Local Union and "instructed them to order the membership back to work and process the grievance through the grievance procedure provided in the existing contract between Dow Chemical Company and District 50." 8 The record is clear, however, that the International Union in fact did not at any time during the strike direct or urge the men to return to work. On June 11, Bartolomeo met with Union Vice President Colandro at the Connecticut Yankee Motor Inn. Although nothing was resolved at this meeting, the Charging Party introduced a`deposition of Colandro, who is now deceased, the significant part of which appropriately warrants com- ment here and in which he stated as follows: We talked about the issue at hand, but the remarks that Mr. Bartolomeo made at that time were that he was more interested in getting rid of International Repre- sentatives of the union and Local union than he was in settling the dispute. Our meeting at the Connecticut 7 Without any personal reflection intended, McDermott clearly demon- strated on the witness stand by his entire demeanor as well as by his lengthy and emotionally charged responses to many of the questions put to him, that he is by nature a fiery, agressive, determined, and explosive-type individual. I am constrained to give little weight to his assertion that he advised the assembled employees not to strike but to return to work This case does not involve a spontaneous walkout or work stoppage. It was McDermott's deci- sion to assemble the men in the first instance and I find it hard to believe, any hp service notwithstanding, that McDermott did not have enough influ- ence among the men to have them do his bidding 8 Brennan testified that he was unable to contact Colandro after talking to Brennan, and that hence he sent the "routine" letter discussed above. Testifying also that at the time he was unfamiliar with the particular contract with Respondent's Allyn's Point plant, he said that about 2 days later he spoke to Colandro who told him "we have the right to strike under the provisions of that contract." Motor Inn served about as much purpose-actually served no purpose at all to this situation. We tried to resolve it. We told him we would go even into arbitra- tion with the thing but he refused on every angle and every approach that we made on it. Plant Manager Bartolomeo, called on rebuttal, denied making any remark to the effect that he was more interested in getting rid of union officials than he was in settling the strike. Bartolomeo impressed me as an honest and forth- right witness and I credit his testimony that he did not make any statement such as that attributed to him by Colandro in the above deposition. Moreover, I hardly think that Bar- tolomeo, with his experience and apparent intelligence, would have been so naive or foolish as to make any such union-baiting remark to a vice president of the Internation- al Union. Indeed, it is noteworthy that aside from Colandro's foregoing testimony, which I do not credit, there is no evidence in the entire record of any union animus on behalf of the Respondent. Returning to the chronology of facts, on June 11 Bartolo- meo also sent a letter to the employees and the union com- mittee, in which he stated, inter alia, that "illegal acts of violence and continued participation in the strike could subject you to legal remedies, disciplinary action and even discharge." Asking the employees to discontinue the "un- lawful strike" the letter further stated: I sincerely feel that the resolution to the problem lies in the grievance and arbitration procedure and ask you to encourage your Union leadership to return to the legal and in my opinion right means of solving this problem. Letters of similar content were sent to the employees by Bartolomeo on June 17 and July 13. By letter of July 23, Bartolomeo notified the employees that Respondent would commence hiring replacements on July 29, stating also that requests for reinstatement would be considered "as long as job opportunities remain," but that employees might be "delayed or prevented," from returning to work because of their "participation in unlawful activities pertaining to the strike." In the meantime, on June 10, union and company repre- sentatives held an unsuccessful meeting with state media- tion officials, in an attempt to resolve the dispute. On July 26 Respondent sent a letter to the Labor Commissioner of Connecticut advising him of its willingness "to submit the labor dispute resulting in said strike or walkout to arbitra- tion or mediation." A further meeting was held with a state mediation official, who met with the parties separately, in about the first week of August. However, this meeting also was of no avail. C. The Cancellation of the Contract; The Termination of Employees; Withdrawal of Recognition It is undisputed that Respondent rescinded the collective- bargaining agreement by letter, dated August 9, 1971. This letter which was signed by Bartolomeo and sent to Local and International Union officials, stated as follows: This is to notify you that because of the breach of the Collective Bargaining Agreement between the Allyn's 338 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Point Plant of the Dow Chemical Company and the Union which had as its effective date 2 /23/70, we here- by cancel the Agreement. On August 12, Bartolomeo sent a letter to the striking employees which stated as follows- We are currently in the tenth week of the strike which commenced on June 7, 1971. As you know I have pre- dominately relied on these letters to keep you informed of what I consider the true facts regarding the strike, its issues and its consequences. It has been a month since I discussed with you my need to evaluate the long-term operation of the Allyn's Point Plant. In the meantime some employees have been re- turned to work and we have hired a number of new permanent employees . I must continue to take further positive action in restoring the plant to standard oper- ating conditions by assuring the availability of employ- ees willing to work. Tuesday, August 17, 1971, at 4:00 p.m. will be the last day that request for reinstatement will be accepted. Requests for reinstatement should be made by person- ally coming to the Personnel Office of the plant and then, if accepted, report in ready to work when sched- uled. Your request will be individually considered. In considering your decision you should be aware that disciplinary action is being taken as to all employees involved in this illegal strike . This action could be writ- ten reprimands , suspension or refusal to reinstate. Respondent terminated the striking employees at 4 p.m on August 17. Bartolomeo's letter of August 18 to the strik- ing employees notifying them of this action stated in perti- nent part as follows: During the past ten weeks I have furnished you infor- mation about your status as a striker involved in the illegal and unprotected strike at the Allyn's Point Plant. By letters of June 11th and 17th, July 13th and 23rd, and August 12, 1971, I explained the Company's posi- tion concerning the strike and suggested that you con- sider requesting reinstatement . The August 13th letter stated that your request for reinstatement had to be received by the Company no later than 4:00 p.m. on August 17, 1971 to be considered. You failed to respond and did not request reinstate- ment by that time and date . By your involvement in the illegal and unprotected strike you forfeited any rights as an employee. The Company has accordingly termi- nated your employment. As of 4:00 p.m., August 17, 1971 your name was removed from the employee per- sonnel list and you are no longer an employee of the Dow Chemical Company. On or about August 26, Bartolomeo received a petition signed by 55 hourly employees which in pertinent part stat- ed, "We do not want or need the International Union of District 50, Local # 13744 at our plant." It is undisputed that the 55 employees who signed this petition constituted a substantial majority of the employees who were working for the Respondent at this time. There is no evidence, nor is there any contention, that Respondent in any way spon- sored, encouraged , or gave assistance in the circulation of this petition. On August 28, Bartolomeo sent a letter to the local presi- dent and International representative stating that the Com- pany had reason to believe "that the Union no longer represented a majority of the employees" and advising that "because of the lack of majority status and contract termi- nation . . . the Company no longer recognizes the Union as bargaining agent for our hourly rated employees at the Allyn's Point Plant." Respondent has not recognized the Union since this communication. D Additional Facts; Conclusions 1. The variance in contentions between the General Counsel and the Charging Party In discussing my conclusions in this case, I should first note that in large part the General Counsel has proceeded on a substantially different theory than that urged by the Charging Party. To put it briefly, both parties urge, as the complaint alleges, that on or about May 20, 1971, Respon- dent unilaterally announced the change in the operating schedule, as previously discussed herein, and that thereafter it refused to bargain over the matter , all in violation of Section 8(a)(1) and (5) of the Act. Here the positions change. Apart from a factual issue as to whether the Union complied with the grievance procedure of the contract be- fore going out on strike, the Union, relying upon the princi- ple set forth in Mastro Plastics Corp. v. N.L R.B., 350 U.S. 270 (1956), contends that the strike was caused by the Respondent's unfair labor practices and that hence, without anything further, Respondent's termination of the striking employees, its cancellation of the contract and its withdraw- al of recognition was in violation of Section 8(a)(1), (3) and (5) of the Act. The General Counsel, on the other hand, does not contend that the strike was an unfair labor practice strike ab initio. Thus, at the hearing, and more specifically in his brief, the General Counsel stated his position as fol- lows: "General Counsel takes the position that the unilater- alism engaged in by Respondent, even though an unfair labor practice, was not so serious so as to label the strike at its inception on June 7 a protected strike if, as alleged by Respondent, said employees went out on strike in violation of the contract's no-strike clause." Parenthetically, it may be noted that although the latter part of the General Counsel's statement reflects an obviously hedged position, it is inter- esting that the General Counsel does not in fact urge that Respondent's defense, to which he alludes, is lacking in merit. However, proceeding on a different theory, the Gen- eral Counsel does contend that the strike beginning on June 7, 1971, was subsequently converted into an unfair labor practice strike, particularly by reason of Respondent's can- THE DOW CHEMICAL COMPANY 339 cellation of the contract, hence that the termination of the striking employees, its rescission of the contract and its withdrawal of recognition were all in violation of Section 8(a)(1), (3), and (5) of the Act. 2. Unilateral action in changing the work schedule in the latex department Admitting that it would not negotiate with the Union concerning its decision to change the shift schedule in the latex department from a 7-2 workweek to a 5-2 workweek, Respondent contends that it had a right to do so under the terms of the then effective collective-bargaining agreement. Thus, Respondent relies on two of the contract provisions, the first of these being the management rights clause (art. II, sec. 2.1) which in pertinent part provides that the Com- pany shall have the right "to hire , promote, or demote .. . employees for due cause or lack of work or for other legiti- mate reasons . . ." and that "other rights and responsibili- ties belonging solely to the Company [include] .. . schedules of production and processes of manufacturing Respondent also points to Article 14, Section 4.1, entitled "Hours of Work," the pertinent provisions of which are as follows: (g) A 7 and 2 shift employee will follow the standard shift (1, 2, 3, 4) work schedule. An individual's shift schedule and scheduled days off may be changed as a result of: posting; bumping ; balancing the experience and training of personnel ; personnel problems; loan- out; training period ; temporary job; waiver - if request- ed and approved. (h) A 5 and 2 shift schedule using three employees in rotation has been established for 24 hours per day, five days a week for work coverage where one or more men per shift is required in a classification. (i) The provisions of this section may be modified only by mutual agreement of the Company and Union Committees. I am persuaded that none of the above contract provi- sions, either explicitly or implicitly, authorizes the Respon- dent to unilaterally change the work schedule of the employees from a 7-2 workweek to a 5-2 workweek in the manner and to the extent contemplated by the change which was to become effective on June 7, 1971.9 Thus, I think it clear that the right to "schedule production" does not authorize the unilateral changing of hours or days of work. In fact, the hours of work are specifically governed by article IV of the contract, the last clause of which pro- vides that any changes in that section may be modified only by mutual agreement of the parties. Further , it is notewor- thy that although section (g) of article 144 specifies that the schedule of an individual 7 and 2 shift employee may be changed under certain conditions , it appears clear that Respondent's announced change was not predicated upon any of the specific conditions set forth therein . Accordingly, 9 I reject Respondent's contention that no unfair labor practice involving unilateral action can be found because the announced change was never implemented Insofar as the issues in this case are concerned, the change in the work schedule was to all practical effect accomplished. and because I find that Respondent's unilateral decision to change from a 5-2 work schedule from a 7-2 work schedule was not sanctioned by the contract,10 I find and conclude that Respondent's unilateral announcement and scheduling of this change violated Section 8(a)(5) and (1) of the Act." See Long Lake Lumber Company, 160 NLRB 1475; Smith Cabinet Manufacturing Company, Inc., 147 NLRB 1506. In addition, the complaint alleges that Respondent's an- nouncement of the work schedule change in the latex de- partment, as discussed above, constituted a modification of the contract terms without complying with the requirements of Section 8(d) of the Act. However, the Board has held that "the breadth of Section 8(d) is not such as to make any default in a contract obligation an unfair labor practice, for that section, to the extent relevant here, is in terms confined to the `modification' or `termination' of a contract " C & S Industries, Inc., 158 NLRB 454. Indeed, although I have held that the contract did not authorize the Respondent unilaterally to take the action in question, it does not neces- sarily follow that this conduct also constituted a breach or substantial modification of the contract.12 In any event, and upon the entire record in this case, I am persuaded that Respondent's unilateral action here was not of such scope as to constitute a "modification" of the contract within the meaning of Section 8(d). Accordingly, it is recommended that this allegation be dismissed. 3. The Union's contentions The Union first of all contends that the strike action taken on June 7,1971, did not breach the collective-bargain- ing agreement and therefore was a protected strike from the outset. I find this contention to be without meet. Article VII, section 7.7 of the then effective contract con- tains a no-strike no-lockout provision which in pertinent part provides that the Union may not engage in a strike unless and until "all of the Bargaining and Grievance Proce- dure outlined in this agreement [steps 1 through 5] have been exhausted," the Union or the Company has made a written request for arbitration after receipt of the step 5 answer, and arbitration has either been completed or re- fused. 10 The waiver by a union of its statutory right to be consulted concerning wages, hours, and terms and conditions of employment must be clear and unmistakable. The Timken Roller Bearing Co v N L R B, 325 F 2d 746 (C A 6, 1963), cert. denied 376 U.S. 971 (1964). Moreover, and having considered all the evidence pertaining to the history of bargaining, I am satisfied that the evidence does not establish that the Union intended to grant Respondent the right to unilaterally change the 7-2 work schedule in the latex department. 11 Cf. Jos Schhtz Brewing Company, 175 NLRB 141, wherein the Board refused to exercise jurisdiction on the ground that the case should be left for arbitration under the contract's grievance and arbitration procedure, since the arbitral interpretation would resolve both the unfair labor practice issue and the contract interpretation issue in a manner compatible with the purpos- es of the Act. While it is arguable here that Respondent here also acted under color of a right, Respondent does not urge that the Board should defer the matter to arbitration . Accordingly, under MacDonald Engineering Co, 202 NLRB 748, I must conclude that the record evidence before me is insufficient for a finding that deferral is warranted See also Nedco Construction Corp., 206 NLRB No. 17 12 Thus, it might well be argued that contract is either silent or ambiguous with respect to the particular subject here at issue. 340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is undisputed that the parties completed and complied with the first four steps of the grievances procedure.13 Step 5 thereof provides as follows: Step 5. Should a satisfactory solution not be arrived at in Step 4, the Union chairman of the grievance com- mittee shall so notify the Plant Manager, or appointee, in writing and within ten days the Company shall ar- range for the unresolved case to be reviewed by the Midland Division Manager in charge of the Allyn's Point Plant of his appointees. The Union contends in its brief that "the telephone con- versation initiated by Neering on June 4 satisfied all the essential requirements of a step 5 meeting ...." In reject- ing this contention as without merit, the short answer to this is that the unequivocal requirements set forth in the above- quoted provision were obviously not complied with. Thus, not only is it undisputed that there was no written request to proceed with step 5, but Respondent submitted uncon- tested evidence showing that it had been the practice of the parties to always adhere to this requirement.14 Nor can I accept the Union's contention that the requirement of a written request was waived because Neering initiated the telephone conversation with McDermott on June 4. I find nothing in this act or the discussion which'followed to war- rant the conclusion that Respondent either directly or infer- entially gave any indication of waiving this requirement. Indeed, Neering credibly testified that during this telephone conversation he advised McDermott, inter alia, "not to do anything foolish, follow the grievance procedure." Finally, and with further respect to Respondent's contention, it is undisputed that there was no review of the grievance by the Midland Division Manager in charge of the Allyn's Point Plant, or his appointee, as provided in the step 5 provision. Thus, not only is there no evidence to establish that Harold Bosscher, then the Midland manager, ever appointed or authorized Neering to act in his behalf in the matter, but the record establishes, as the Union undoubtedly knew, that W. Fletcher had acted as Bosscher's appointee (also known as the appealsman) in the preceding 18 consecutive grievances that were brought through step 5.15 I also reject, as unsupported by the evidence, the Union's further contention that arbitration was requested by the Union and refused by the Respondent. In the first place, this contention may be put to rest merely by noting that the contract does not even contemplate arbitration until such time as the fifth step of the grievance procedure has been utilized and completed, which I have found it was not. However, assuming arguendo that there was compliance with step 5, it is undisputed that at no time was there fulfill- 13 It will be recalled that the Step 4 meeting was held on June 4, that Bartolomeo orally notified McDermott of Respondent's decision on June 5, and that a written answer was provided to the Union on June 17 14 Except in four instances where records were unavailable, the records reflect that there was a written request to proceed to step 5 in every grievance processed to this step under the 1966 and 1970 collective -bargaining agree- ments During this period there were a total of 36 such written requests to proceed to step 5 i5 Joint Exh. F merit of the remaining contractual prerequisites to the right to strike, namely, a request "in writing, within 30 days to proceed to arbitration" and a refusal by the Company to agree to arbitration.16 Finally, the Union contends that the June 7 strike was protected under the doctrine of the Mastro Plastics case, supra. In Arlan's Department Store of Michigan, Inc., 133 NLRB 802, and for reasons fully explicated therein, the Board rejected a rigid interpretation of Mastro Plastics and adopted the rule that "only strikes in protest against serious unfair labor practices should be held immune from general no-strike clauses." See also Atlantic Richfield Company, 199 NLRB 1224, for a further application of this rule. Upon the facts in this case, I find and conclude that Respondent's unilateral conduct, although found to be an unfair labor practices, was not of such serious nature as to be "destructive of the foundation of which collective bar- gaining must rest." 17 Indeed, as heretofore indicated, there is no evidence that Respondent held any union animous, the parties appear to have long enjoyed a harmonious relation- ship, and there is no evidence to indicate that Respondent wished "to rid itself of the Union." Moreover, here, as in Arlan's Department Store and Atlantic Richfield, supra, the contract grievance procedure was available for the peaceful resolution of the dispute. The Union having failed to submit the dispute in accordance with these provisions of the con- tract, I can but conclude and find that the strike beginning on June 7, 1971, was unprotected from its inception. 4. The alleged unlawful rescission of the contract The General Counsel contends, and the complaint alleg- es, that Respondent's cancellation of the contract on August 9, 1971, was violative of Section 8(a)(5) and (1) of -the Act. Respondent defends on the ground that this action was justified because the Union breached the contract by engag- ing in a strike which was proscribed by the no -strike clause. In support of its position , Respondent largely relies on Mar- athon Electric Mfg. Corp., 106 NLRB 1171 , involving a situ- ation where, as here, the Union engaged in a strike contrary to the provisions of a no-strike clause contained in the con- tract. In finding that the employer 's subsequent cancellation of the collective-bargaining agreement was not an unfair labor practice, the Board stated, "We find that the Respondent's unilateral cancellation of its contract with UE did not constitute a violation of Section 8(a)(5) and (1) of 16 A transcript of the Step 4 grievance meeting on June 3 reflects that during this lengthy meeting McDermott at one point did make spontaneous reference to the possibility of taking the matter to arbitration McDermott also testified , but Neering denied , that he (McDermott) also proposed arbi- tration during his telephone conversation with Neering on Jun 4 Whatever McDermott may have orally and spontaneously proposed during either dis- cussion , I think it clear that any such reference to arbitration related solely to immediate arbitration , and in any event, could not possibly be construed as complying with the specific requirements of the contract's grievance and arbitration procedure 17 Mastro Plastic Corp, supra THE DOW CHEMICAL COMPANY the Act, but was justified by UE's prior breach of the con- tract." 18 The General Counsel, on the other hand, relies principal- ly on certain dicta by the Court in N.L.R.B. v. State Electric Service, Inc., 477 F.2d 749 (C.A. 5, 1973),19 wherein the court stated that a union's breach of a no-strike clause is not "automatically" sufficient to breach the entire contract. I find the General Counsel's reliance upon State Electric to be misplaced because the facts in that case differ signifi- cantly from those in Marathon Electric as well as from those in the case at bar. Thus, when the Board decided that the employer's cancellation of the contract in State Electric was not justified, it based this finding upon the factual grounds that (1) the no-strike clause in question was a limited one and the union's work stoppage was not in violation of it; and (2) "the strike occurred as a result of the [employer's] failure to respond to the Union's request for recourse to the contractual procedure," and that even thereafter "the Union continued to abide by the contract by summitting the charge of the Company's failure to abide by the contract to the dispute settlement procedure of the contract ... . Neither of these circumstances are present in Marathon Electric or in the instant case. Indeed, as has been previously found, this is a case where the Union, not the Respondent, failed to comply with the grievance procedure. Further- more, insofar as State Electric is concerned, the Board in that decision gave no indication whatsoever that it intended to repudiate or modify the rule in Marathon Electric, supra; it appears simply to have declined application of that rule in the absence of a clear breach of contract by the Union. For the reasons stated above, I believe the rule expressed by the Board in Marathon Electric, supra, which it recently affirmed in Kellstone, Inc., 206 NLRB No. 27, to be applica- ble and controlling to the issue presented here 20 According- ly, I find that Respondent, by reason of the Union's breach of the no-strike provision in the contract, did not violate Section 8(a)(5) and (1) when it rescinded the contract 2t. Accordingly, it is recommended that this allegation of the complaint be dismissed. 16 In enforcing the Marathon case, supra, the Court in United Electrical Radio & Machine Workers of America (UE) Local 1113 [Marathon Electric Mfg Co J v. N.L R B., 223 F 2d 338, 341 (C.A D.C.), cert. denied 350 U.S. 981 (1956), stated. It is general law that one party to a contract need not perform if the other party refuses in a material respect to do so. And that rule applies to labor contracts Moreover, in cases where the breach is a strike in violation of a collective bargaining agreement, as in the instant case, application of the rule is supported by the rationale underlying such agreements. The prevention of strikes is one of the principal purposes of labor contracts and of the Act. A no-strike provision is `the chief advantage which an employer can reasonably expect from a collective labor agree- ment.' The walkout was a material breach which justified the subsequent rescission of the contract by the company. i9 Enforcing State Electric Service, Inc., 198 NLRB No. 77. 20 1 find the additional cases cited by the General Counsel and the Charg- ing Party, all of which I have considered, to be factually distinguishable and not decisive of the issue here 2i Pointing out that Respondent's letter to the Union of August 9, 1971, cited only "breach of the collective bargaining agreement" as its reason for cancelling the contract, the General Counsel and the Charging Party urge that no weight should be given to certain additional reasons, advanced and testified to by Plant Manager Bartolomeo, for taking this action. The addi- tional reasons -thus given by Bartolomeo include the following: (l) com- plaints he received from job applicants to the effect that they had been 341 5. The termination of the strikers withdrawal of recogni- tion Proceeding on the theory that the strike was converted into an unfair labor practice strike by Respondent's rescis- sion of the contract on August 9, 1971, the General Counsel alleges that the striking employees thereby became unfair labor practice strikers and that hence their termination by Respondent on August 18, 1971, was violative of Section 8(a)(3) and (1) of the Act. However, having found adversely to the General Counsel on the matter of the cancellation of the contract, it follows, and I find, that the strike was not thereby converted into an unfair labor practice strike. I also am unpersuaded by the General Counsel's further academic argument, as stated in his brief, that "Respondent cannot have his cake and eat it, too. After cancelling the contract, Respondent cannot thereafter justify the discharge of strik- ing employees by its reliance on the cancelled contract," The short answer to this is that whatever were Respondent's rights to discharge the strikers, these did not derive from the contract, but rather involve the question as to whether or not the action taken, under all the circumstances of this case, was prohibited or permissive under the Act. In sum, I must conclude, as the Board put it in The Kroger Co. (Cleveland Div.) 22 that "the striking employees forfeited any rights they may have and to reinstatement by partici- pating in the strike in violation of the no-strike provision of the ... contract then in effect." Accordingly, it is found that Respondent did not violate Section 8(a)(3) and (1) of the Act by its termination of the striking employees. 3 I also find that Respondent did not, as the complaint alleges, violate Section 8(a)(5) of the Act by withdrawing its recognition of the Union on August 28, 1971. This conclu- sion must follow in consequence of the aforenoted finding that Respondent validly terminated the strikers on August stopped, harassed and threatened when coming through the picket line for job interviews; (2) complaints from replacements hired after the strike that they were threatened with fines because they had violated union rules, that they would have to join the Union because of the union shop clause in the contract, as well as complaints from some of the employees who returned to work that charges had been filed against them threatening them with fines, and (3) the fact that the Company regarded its legal position to be buttressed by the Regional Director's dismissal, on August 6, 1971, of a refusal to bargain unfair labor practice charge which had been earlier filed by the Union. While the record does not permit a ruling on the merits of each of the aforesaid factual assertions by Bartolomeo, I have no doubt but these were matters which Bartolomeo in fact did take into consideration in finally reaching a decision to cancel the contract. However, since it is plain that Respondent's basic reason for taking this action was the Union's breach of contract, I think it clear that the addition reasons go more toward explaining the particular tiring of this action It seems to me that if an employer is justified in cancelling the contract in the first instance, surely it does not waive this right by deferring this action until such time as it has additional grounds therefor. 22 177 NLRB 769 23 See also United Furniture Workers of America, AFL-CIO, Local 270 [Fort Smith Chair Company] v. N.L R B., 336 F.2d 738 (C.A.D.C.), cert. denied 379 U.S. 838 (1964); N.L.R.B. v. Kaiser Aluminum & Chemical Corp., 217 F.2d 366, 369 (C.A 9). Furthermore, assuming arguendo that Respondent's rescission of the con- tract was an unfair labor practice, the General Counsel has not established that the cancellation of the contract in fact led to a prolongation of the strike. Thus, it is undisputed that there was never any change in the language on the pickets signs, in addition to which there is no evidence whatsoever to indicate any overt manifestation by the Union of any change in the initial objective of the strike after the rescission of the contract. 342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 18.24 The strikers no longer enjoying the status of employ- ees, Respondent was entitled to rely on the heretofore de- scribed petition on about August 26, 1971, signed by a majority of the employees then employed by Respondent that they did not wish the Union to represent them. Finally, the complaint alleges that Respondent violated Section 8(a)(1) of the Act in that its letter to the striking employees of August 12, 1971, which has been previously set forth in full herein, unlawfully "threatened to perma- nently replace them if they did not abandon the strike" and unlawfully "threatened them with disciplinary action when they abandoned the strike and returned to work." I find this allegation to be without merit. Suffice it to say that inas- much as the employees were engaged in an unprotected strike, it seems clear that Respondent was within its rights in advising them which of its legal perogatives it might exercise against them if they continued in this activity. I shall, accordingly, recommend that this allegation also be dismissed.25 , THE REMEDY I have heretofore concluded and found that Respondent engaged in unlawful conduct by unilaterally determining 24 Marathon Electric Mfg Corp supra, United Furniture Workers of Ameri- ca, Local 270 v NLRB, supra 25 I also reject as without merit the Union's contention that Respondent "condoned any strike behavior by offering the [strikers] reinstatement after August 9." Suffice it to note that in its letters from June I I through August 12, 1971, even though directly or indirectly appealing to the employees to abandon the strike and return to work , Respondent consistently indicated that it reserved the right to take whatever action against them it deemed necessary or appropriate Clearly , Respondent did not thereby demonstrate a "willingness to forgive the improper aspects of concerted activity, to wipe the slate clean " Confectionary and Tobacco Drivers and Warehousemen's Union, Local 805, !BTCWHA [M Eskin & Son] v N L R B 312 F 2d 108, 112-I 13 (CA 2, 1963) and announcing a change in the work schedule of employ- ees in the latex department. While normally I would recom- mend an order requiring Respondent to cease and desist from this conduct, to take certain affirmative action, and to post appropriate notices, I am persuaded that under the peculiar circumstances of this case no such order is warrant- ed or necessary. My reasons for this are threefold, namely; (1) Since the employees in the appropriate unit are no longer represented by the Union or by any other labor organiza- tion, it obviously is no longer possible to order Respondent to bargain affirmatively with any bargaining representative of the employees; (2) Inasmuch as Respondent did not in fact implement the announced change in the work schedule, there is no status quo ante to be restored and (3) Without relying on this reason alone, I think some consideration should be given to the fact that Respondent was agreeable to, and in fact did, consult with the Union concerning the mechanics of putting the 5-2 work schedule into effect, in addition to which it partially complied with the Union's request that the matter be deferred by postponing the effec- tive date of the announced change for I week. Clearly, this would seem a far cry from any "complete rejection of the bargaining principle." ORDER26 The complaint is dismissed in its entirety. 26 In the event no exceptions are filed as provided in Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes