Fine Organics, Inc.

158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Fine Organics, Inc. and Paint, Chemical, Clerical, Warehouse & Industrial Workers Union, Local 1310, International Brotherhood of Painters & Al- lied Trades, AFL-CIO. Cases 22-CA-5349 and 22-CA-5633 October 22, 1974 DECISION AND ORDER BY MEMBERS JENKINS, KENNEDY, AND PENELLO On April 18, 1974, Administrative Law Judge Ivar H. Peterson issued the attached Decision in this pro- ceeding. Thereafter, the Respondent filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and brief and finds merit in certain of the Respondent's excep- tions. Accordingly, the Board has decided to affirm the rulings, findings, and conclusions of the Adminis- trative Law Judge, only to the extent that they are consistent with this Decision and Order. The Administrative Law Judge found that the Re- spondent engaged in the following unlawful conduct: threatened its employees with economic reprisals be- fore and during a strike which began on March 12, 1973, and ended on April 27, in violation of Section 8(a)(1) of the Act; suspended Edward Masterson for 3 days on June 12, in violation of Section 8(a)(3), and discharged him on September 26, in violation of Sec- tion 8(a)(3) and (4); and refused to bargain with the Union between February 27 and April 27, 1973, and between May and October or November 1973. We do not agree with any of the foregoing findings for the reasons discussed below. The Union filed its unfair labor practice charge in Case 22-CA-5349 on March 16, 1973, while a strike was in progress, alleging violations of Section 8(a)(1) and (5). The Respondent and the Union entered into a settlement agreement on April 27, approved by the Acting Regional Director on April 30, which ended the strike by offering immediate and full reinstate- ment to the striking employees. The agreement also provided for Respondent to post a notice in its plant that it would cease and desist from refusing to recog- nize and bargain with the Union, from threatening its employees with economic reprisals for engaging in union activities, and from in any like or related man- ner interfering with, restraining, or coercing its em- ployees in the exercise of the foregoing correlative rights, or the right to refrain from such activities. Following the settlement agreement, the Union filed another charge, Case 22-CA-5633, on October 5, 1973, in which it was alleged that Respondent did not bargain in good faith between May and October 1973, and that Masterson's suspension and ultimate discharge on September 26 was discriminatorily mo- tivated. The Regional Director investigated these lat- er allegations and administratively determined there was reasonable cause to believe that the Respondent had engaged in unfair labor practices since the ap- proval of the settlement agreement and therefore is- sued on November 21, 1973, an order withdrawing approval of and setting aside informal settlement agreement. On November 23, 1973, the Regional Di- rector issued an Order Consolidating Cases (22- CA-5349 and 5633), Complaint and Notice of Hear- ing, the basis on which the instant hearing was con- ducted by the Administrative Law Judge. As found by the Administrative Law Judge, within I week of the settlement agreement's approval by the Regional Director, the Respondent began bargaining negotiations with the Union, which represented the production and maintenance employees. The first meeting was held on May 4 and one-half of the Union's demands were discussed; the remaining de- mands were discussed at the next meeting of May 7, at which time the Respondent's attorney told the Union that he was being replaced as Respondent's negotiator. On May 14, Respondent's stock was purchased by another company, Hexcel Corporation, but this nei- ther presented any significant hiatus in the bargain- ing negotiations nor raised any successorship issue, as the Respondent continued to recognize the Union. The operation continued under the same name with substantially the same managerial, supervisory, and employee complement producing the same products. The next bargaining session was held on May 22, with Hexcel's personnel officer, R. E. -Nelson, as chief negotiator. Subsequent meetings were conduct- ed on June 7, July 9, August 9, September 14, Octo- ber I I and 12, and November 8, 1973, most of them varying from 3 to 6 hours' duration, according to Edward Kmon, the Union's business agent and chief negotiator. Following the August 9 meeting, the Union re- ceived two letters from the Respondent dated August 15 and 27.1 In the first letter, the Respondent stated that, "It seems apparent that we have reached an impasse in our negotiations. Among the items on which we have reached an impasse are our proposals on life insurance, [retirement] savings plan and pen- Both letters were also posted on the plant's bulletin board. 214 NLRB No. 2 FINE ORGANICS, INC. sion plan. We have indicated to you in our negotia- tion meetings that we do not believe it is proper for the employees to suffer the loss of these standard Hexcel benefits during this time." The letter also stated that the benefits would be implemented during September and October. The August 27 letter pro- posed additional benefits it desired to provide to its employees: company-paid major medical insurance, a stock purchase plan, overtime pay on shift differen- tial, a workweek provision, and prorated bonus pay- ments. No mention was made of implementing these proposals, some of which had been discussed at earli- er meetings, until after the bargaining sessions of September 14, October 10 and 11, attended by a mediator assigned by the New Jersey State Media- tion and Conciliation Service. During the latter three meetings, all remaining proposals that had not been discussed earlier were covered and the parties agreed to a variety of additional provisions, which included a change in the workweek, company-paid medical benefits, a life insurance program, sick pay, and a job progression system. At the end of the October I I meeting, according to Nelson's uncontradicted testimony, it was agreed that the parties were at an impasse. and, that they were not going to reach a total agreement. No further meeting was • scheduled. Following the October 11 meeting, the Respondent sent another letter, dated October 11, to the Union, stating that it intended to put into effect the four benefits referred to in its Au- gust 27 letter and three additional provisions, all of which had been discussed by the end of the October I1 meeting;' and some of them had been agreed to by the parties. The October I l letter also stated, "It appears that we will not be able to reach a contract at this time because of our disagreement with the union shop issue." The letter also said that the pro- posals were being made "without prejudice to further bargaining on these or any other items." The Union replied by letter, dated October 16, objecting,."to your putting into effect these so called changes" and stated that, "In the event that you do however put them into effect it is to be without prejudice to fur- ther negotiations on these•and any other issues." The Respondent began implementing certain of these benefits during October and November. The last bar- gaining session was held on November 8, having been arranged by the mediator, and was of short du- ration, with the union-shop issue providing major discussion. 1. In concluding that the Respondent violated 2 The Administrative Law Judge found that the proposed prorated bonus benefit had not been discussed during the negotiations . The record shows, however, that this item was discussed as a substitute for a Christmas bonus which Respondent sought to eliminate during the negotiations. 159 Section 8(a)(5) of the Act, the Administrative Law Judge accepted the General Counsel's contention that Respondent met with the Union from May through October, with no intention of entering into meaningful negotiations or reaching a collective-bar- gaining agreement. The Administrative Law Judge also characterized Respondent's bargaining position as intransigent and inflexible, and that it approached the bargaining table with a predetermined position and would not, for any reason, alter this stance. From our examination of the record, it does not sup- port the conclusion reached by the Administrative Law Judge. By the end of the August 9 meeting, virtually all proposals and counterproposals had been discussed and agreement as to some provisions had been reached. That hard bargaining was indulged in by both parties is best illustrated by Union Representa- tive Kmon's direct testimony concerning this bar- gaining session: "Well, again we went through every damn thing and we tried to resolve what we could, give and take on both sides." When asked what else happened at the August 9 meeting, Kmon replied, "We did reach an impasse right then and there."' Even the Administrative Law Judge stated on the record, after Kmon had completed his testimony of detailed discussions of all eight. meetings since May 22 and while R. E. Nelson, the Respondent's chief negotiator, was in the midst of being cross-examined as to his version of the negotiations, that "it seems point clear, to me that the company engaged in dis- cussion, they reached some agreement, the parties couldn't agree on certain things. It is definitely my understanding that good faith bargaining did not necessarily involve reaching agreement on all mat- ters." . The decision of the Administrative Law Judge also states that Respondent, throughout the negotiations, refused to discuss a wage increase, claiming that it was, a matter of corporate policy for wages to be re- viewed and adjustments granted once during the course of a year and, since the employees.had al- ready received a wage increase on January 1, further discussion of that issue was barred. The record shows, however, that Respondent had no rigid na- tionwide policy, because it admitted that circum- stances varied from plant to plant; moreover, during the October II bargaining session, Respondent did change an earlier position on the wage issue by pro- posing a retroactive wage increase, plus an increase effective January 1, 1974. 7 Although this testimony was not mentioned by the Administrative Law Judge . it accords with the position of the Respondent and Respondent's statement in its August 15 letter to the Union. 160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On these facts we do not agree that the Respondent's postsettlement bargaining reveals that it did not intend to reach agreement or that it took an intransigent or inflexible position or otherwise bar- gained in bad faith. Accordingly, we find no viola- tion of the Act in these respects. Nor can we agree with the Administrative Law Judge that by its letters of August 15 and 27 and October 11 the Respondent made unlawful unilateral changes in working conditions. The evidence is clear that a bargaining impasse existed after the August 9 meeting. This impasse was eliminated when bargain- ing resumed on September 14 in the presence of a mediator. However, another impasse occurred at the October II meeting, at which agreement had been reached on a variety of major and minor items, but the parties took adamant positions on certain other matters, primarily wage rates and a union-security clause. It is clear that the letters of August 15 and 27 were sent during the period of impasse from August 9 to September 14 and put into effect benefits which had been offered (and some of which had been agreed to) during the negotiations. Similarly, the let- ter of October I 1 was sent after an impasse had been reached and was an implementation of benefits of- fered to the Union during bargaining. It is well set- tled that under these circumstances, where a valid impasse has been reached and the benefits put into effect have been offered to and discussed with the bargaining representative, the implementation of such benefits is not violative of Section 8(a)(5) and (1) of the Act.4 Accordingly, contrary to the Admin- istrative Law Judge, we find that the circumstances in this case do not establish a violation of Section 8(a)(5) and (1) of the Act. 2. The settlement agreement previously discussed, which had first been approved by the Regional Di- rector on April 30, 1973, and later vacated on No- vember 21, 1973, prior to the issuance of the com- plaint herein, provided for the Respondent to post a notice that it would cease and desist: from engaging in threats of economic reprisal because its employees had engaged in concerted or union activities (alleged violations of Section 8(a)(I) of the Act); from refus- ing to recognize and bargain with the Union (alleged violations of Section 8(a)(5)); and from "in any like or related manner" interfering with, restraining, or coercing employees in the exercise of their rights to self-organization and to engage in concerted activi- ties for the purpose of collective bargaining or other mutual aid and protection or to refrain from such activities. The agreement also settled a strike by pro- viding for the reinstatement of all striking employ- ees; and the Respondent has posted the aforesaid 4 See N.L.R.B. v. Katz, et a!., 369 U.S. 736, 745 (1962). notice and complied with the remaining terms of the agreement. Because we have found that the Respon- dent did not violate the Act subsequent to the settle- ment agreement, we shall reinstate the settlement agreement without passing upon the conduct that oc- curred prior thereto.' 3. The findings of the Administrative Law Judge that the Respondent suspended Masterson on June 21, in violation of Section 8(a)(3) and then dis- charged him on September 26, in violation of Section 8(a)(3) and (4),6 are not supported by the record. Masterson was hired in September 1972 and worked at various jobs in the Respondent's plant, where it is engaged in the manufacture of chemicals and related products. He was the Union's chief shop steward, was a picket line captain during the strike, and served on the Union's negotiating committee. The strike was.settled on April 30, 1973, and Master- son claimed that thereafter Respondent's foremen changed their attitude toward him by reminding him to observe the time he spent during break periods. Masterson testified that prior to the strike which started on March 12 he received a warning letter from Respondent for carelessness on the job. He was cleaning a tank on the plant's second floor and brushed some chemical material that fell through a grating and splashed a maintenance man on the floor below. The reprimand also noted that he had allowed a chemical to flow down the sewer instead of to an outside storage tank; and concluded by stating that future infractions of proper work conduct will result in further disciplinary action "including the [sic] time off or discharge." On June 12, Masterson was given a 3-day suspension for smoking on the roof of the plant. The incidents which resulted in Masterson's dis- charge occurred during the midnight-to-8-a'.m. shift of Saturday, September 22. He was working on the top floor of the plant operating a centrifuge (a ma- chine similar to a huge,washing machine into which raw materials are placed and from which chemicals are extracted) and operating a drying machine (which dries the chemicals). There is a bench near the machinery which is used by the operator to watch its operations. Only Masterson was working on this floor. s Mohasco Industries. Inc., (Laurens Park Mill), 172 NLRB 2079. fn. I (1968): Conroe Creosoting Company, 149 NLRB 1174 (1964). As we find hereinafter that the Respondent did not violate Sec. 8(a)(3) and (4) of the Act by its suspension and discharge of Masterson. we need not consider whether such violations would have warranted the setting aside of the settle- ment agreement where, as here , the settlement did not relate to violations of Sec. 8(a)(3) and (4). a The complaint, in addition to the 8(a)(3) allegation as to Masterson. also alleges that he was discharged in violation of Sec. 8(a)(4) because the Union had filed a charge in Case 22-CA-5607 relating to his suspension of June 12: this charge was subsequently withdrawn by the Union, but the new one filed in Case 22-CA-5633 covers this matter. FINE ORGANICS, INC. After the shift started, about 1:30 a.m., Production Foreman Schreck was making the rounds and found Masterson asleep on the bench. He told Salvatore, Masterson's immediate supervisor, to go upstairs to the centrifuge area "and check it out, [Masterson] is up there sleeping." While Salvatore was on his way up the stairs, he saw a spillage on the floor below the centrifuge area and rushed up to the next floor, shook and woke up Masterson, and told him that there was a spill. No serious damage to any equip- ment on either floor resulted from the spillage, but production time was lost due to cleanup operations. During the same shift, about 4:15 a.m., Salvatore was making his regular rounds and found Masterson asleep again. He left the area to notify Schreck and on their way back to the centrifuge area, spillage was again noted on the mill floor below; in addition, wa- ter had entered the drying machine. In addition to the cleaning operations that followed, the drying pro- cess was substantially slowed down. The Administrative Law Judge found that the Re- spondent would not have suspended and discharged Masterson for the respective roof smoking and spil- lage incidents, but for his union activities. In his view, the Respondent was anxious to get rid of Mas- terson, it knew of and condoned the practice of em- ployees' smoking in restricted areas and sleeping dur- ing working hours, and used his derelictions as a pre- text for his ultimate termination. We do not agree. Even if the Respondent was aware that' employees were engaging in such conduct, the record does not show any condonation on the part of Respondent of any such misconduct. Thus, Ortleb, Respondent's manager of manufacturing and engineering, who handed Masterson the suspension letter, while testi- fying concerning the chemical plant's safety rules and explaining the inherent dangers of smoking in restricted areas, especially on the roof which had ventilation ducts that could release flammable fumes and cause an explosion, admitted having seen, ciga- rette butts on the roof, but made clear that no one had ever been reported to have actually been caught in the act of smoking in that area. With respect to the incidents of September 22, the record does show that employees on the midnight'shift did go to the locker- room during their break periods, when a relief man would take over their job, and hide behind the lock- ers to take a nap. This is not what Masterson did. He fell asleep while on duty. Although the record indi- cates that the centrifuge machine malfunctions about two or three times a year, this time it occurred twice in one night and the evidence is clear that, had Mas- terson been paying attention to his work, the two spillage incidents during the same shift could have been avoided or minimized. 161 We have also taken into account that Schreck, the shift foreman, did not like Masterson because of an incident that occurred during the strike and was probably waiting for Masterson to do something wrong. Masterson was only suspended by Schreck immediately after the second spillage incident. How- ever, it was Ortleb who terminated Masterson on September 26, and then only after he fully discussed the events of September 22 with Masterson and Su- pervisors Schreck and Salvatore on September 24 and 25. Under all of the circumstances, we find insufficent basis to hold that Respondent's concern about an employee's smoking in a restricted area of its chemi- cal plant or sleeping on the job was a sham. Accord- ingly, we cannot find that the evidence preponder- ates in favor of a conclusion that Masterson's union activities motivated Respondent to suspend and.dis- charge him in violation of Section 8(a)(3) and (4) of the Act. We shall therefore dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the complaint here- in be, and it hereby is, dismissed in its entirety, and that the settlement agreement in Case 22-CA-5349 be reinstated. DECISION STATEMENT OF THE CASE [VAR H. PETERSON, Administrative Law Judge: I heard this case in Newark, New Jersey, on January 8, 9, and 10, based upon charges, filed in Case 22-CA-5349 by Paint, Chemical, Clerical, Warehouse & Industrial Workers Union, Local 1310, International Brotherhood of Painters & Allied Trades, AFL-CIO, herein called Local 1310 or the Union, and in,Case 22-CA-5633 by Local 1310 that the Respondent, at Sayreville, New Jersey, has engaged in and is now engaging in certain unfair labor practices af- fecting commerce within the meaning of Section 8(a)(l), (3), (4), and (5) and Section 2(6) and (7) of the Act. On November 23, the Acting Regional Director issued an or- der consolidating the cases and a complaint and notice of hearing against the Respondent alleging violations of Sec- tions 8(a)(1), (3), (4), and (5) of the Act. In its answer, the Respondent denied the commission of any unfair labor practices. Upon the. basis of the entire record in the case and my observation of the witnesses as they testified, and a careful consideration of the briefs filed by counsel for the General Counsel and counsel for the Respondent on or about March 14, 1 make the. following: 162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent, a New Jersey corporation, and a whol- ly owned subsidiary of Hexcel Corporation, a California corporation, has maintained its principal office and place of business at 205 Main Street, Lodi, New Jersey, and vari- ous other places of business in that State, including a plant at 880 Main Street, herein called the Sayreville plant. It is engaged at these plants in the manufacture, sale, and distri- bution of chemicals and related products. The only facility involved in this proceeding is the Sayreville plant. Admit- tedly, during the preceding 12 months, the Respondent manufactured, sold, and distributed at the Sayreville plant products, goods, and materials valued in excess of $50,000 of which products, goods, and materials valued in excess of $50,000 were shipped from the Sayreville plant in interstate commerce directly to States of the United States other than the State of New Jersey. I find that the Respondent is an employer engaged in commerce within the meaning of Sec- tion 2(6) and (7) of the Act, and that Local 1310 has at all times here material been a labor organization within the meaning of Section 2(5) of the Act. The following persons occupy the positions set opposite their names and admittedly are supervisors and agents of the Respondent: Howard Reeves-Executive Vice President Robert Ortleb-Manager of Manufacturing' and Engineering Robert Sayers-Foreman Frank Schreck-Foreman Andrew Swiderski-Foreman II. THE ALLEGED UNFAIR LABOR PRACTICES A. Background The parties agree that all production and maintenance employees, including warehousemen employed at the Sayreville plant, but excluding all office clerical employees, professional employees, laboratory employees, guards, and all supervisors as defined in the Act, constitute a unit ap- propriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. The Respondent, however, denies that on or before February 25, 1973, a majority of the employees in the foregoing unit designated and selected Local 1310 as their representative for the pur- poses of collective bargaining. According to the complaint, Local 1310, on or about March 12, requested that the Re- spondent bargain collectively with it and at all times there- after the Respondent refused to recognize and bargain with the Union. A strike occurred on or about March 12, which, according to the complaint, was prolonged by the Respondent's unfair labor practices. Thus, it is alleged that, on or about March 1; Foreman Frank Schreck warned its employees that they would suffer economic re- prisals, including the loss of all their benefits, if they be- came or remained members of the Union or gave it any assistance or support; it further alleged that, on or about March 13, Robert Ortleb, manager of manufacturing and engineering, told employees that they were engaging in a wildcat strike and that the Respondent would sue them and take away their homes and cars if they became or remained members of Local 1310 or gave it any assistance or support; it is also alleged that, on or about March 12, Ortleb warned its employees that they could be discharged for engaging in a strike which began on March 12. On or about April 27, the Respondent and Local 1310 executed an informal settlement agreement in Case 22-CA-5349, which was approved by the Acting Regional Director on or about April 30. . Briefly stated, the complaint alleges that the Respon- dent, from February 27 until April 27, unlawfully refused to bargain with the Union in violation of Section 8(a)(I) and (5) of the Act; threatened employees with economic reprisals if they became or remained members of Local 1310; and threatened to sue them for engaging in a strike and picketing in violation of Section 8(a)(1) of the Act; refused to bargain between May and October 1973, by meeting with the Union but with no intention of entering into meaningful negotiations or reaching agreement; un- lawfully suspended employee Edward Masterson for 3 days in June because of his sympathy for and activities on behalf of the Union; and, on September 22, suspended Masterson and thereafter discharged him on September 26, all in violation of Section 8(a)(l) and (3) of the Act, and, by discharging Masterson because Local 1310 filed an unfair labor practice charge on his behalf concerning his suspen- sion, violated Section 8(a)(1) and (4) of the Act. The settlement agreement entered into on April 27 and approved by the Acting Regional Director on April 30 pro- vided that the Respondent would cease and desist from refusing to bargain with Local 1310; threatening employees with discharge or loss of benefits or other reprisals because they engaged in concerted or union activities; in any like or related manner interfering with, restraining, or coercing employees in the exercise of their Section 7 rights; and would offer immediate and full reinstatement to employees upon their making an unconditional application for rein- statement; and, upon request, recognize and bargain col- lectively with Local 1310 as the exclusive representative of the employees in the foregoing appropriate unit and, if an agreement were reached, embody it in a written and signed memorandum. The complaint further alleges that on or about June 12 the Respondent suspended Masterson and discharged him on or about September 26 because he joined or assisted the Union. In addition, the complaint alleges that since on or about May 7 the Respondent has negotiated with the Union in bad faith and with no inten- tion of entering into a final or binding agreement, and, on or about September 22, unilaterally instituted a pension plan and changed the payroll week without consultation with the Union and, on or about October 19, unilaterally granted wage increases, eliminated the Christmas bonus program, and changed its established sick leave program. B. The Alleged Initial Refusal To Recognize the Union In late 1971, in response to employee complaints con- cerning wages and working conditions, Ortleb selected two FINE ORGANICS, INC. employees, Stanley Rowlands and Kenneth Mantovany, to discuss with him matters of mutual concern. These same two employees, in 1972, were selected by Ortleb and met with the Respondent concerning wages and working condi- tions which would be in effect for the following year. A petition designating Rowlands, and Mantovany as repre- sentatives of the other employees was placed on the bulle- tin board and, at various times before the end of 1972, this document was executed by a substantial number of em- ployees. Approximately four meetings were held between October and December 1972 concerning the application of terms and conditions of employment for the period begin- ning January 1973 through December 31 of that year. At the first meeting, the employee-representatives sub- mitted a list of demands to Ortleb, who stated that he had to take the list to the Lodi plant where the Respondent's main office was located. The demands submitted requested a wage increase, additional holidays, severance pay, and the institution of a job classification system. Following this, two additional meetings were held to consider the de- mands, but no agreement was reached. On or about De- cember 31, a final meeting was held at which Ortleb speci- fied the wage increase as an improvement in working con- ditions which employees would receive in the coming year. In reply, Rowlands stated that the employees would not be. satisfied with the proposals. Ortleb responded that the wage increase and life insurance benefits that were offered were all that the Company would give at that time and that Rowlands should return to the employees and "sell the package to them." Rowlands stated that he did not believe that the package could be sold, but that he would commu- nicate the Respondent's position to the employees. At the close of the meeting, no agreement or memorandum of any kind was executed. Later on Rowlands told Ortleb that he had discussed the Respondent's proposal with the employ- ees and that they were dissatisfied with it. In January, Local 1310 commenced an organizational drive among the Respondent's employees and shortly thereafter obtained signed authorization cards from a num- ber of them. On January 29, the Union filed a representa- tion petition with Region 22 and at the same time informed the Respondent by letter that its employees had designated the Union as their bargaining representative. On February 8, an informal conference was scheduled in the Regional Office to discuss the Union's petition and the possibility of entering into a consent election agreement. The Union was represented by its attorney, John Craner, and its business agent, Edward Kmon, while Respondent was represented by its attorney, Carl Nitto. At this meeting, Nitto proffered a document, to which was attached the list of signatures of employees, designating Rowlands and Mantovany to rep- resent them in negotiations with the employer, and Nitto asserted that this constituted a contract bar to an election. The Union, rather than delay the proceeding, elected to withdraw its petition in order to have sufficient time to contact the employees to ascertain the validity of the docu- ment that was asserted to be a bar to the Union's petition. On February 18, a meeting was held in Sayreville which was attended by approximately 12 employees. They indi- cated to the representatives of the Union that they were unaware of the existence of any agreement between the 163 Respondent and the employees and that before being shown the document by the Union that evening they were totally unaware of its existence. A second meeting was held on February 25, which was attended by approximately 12 employees. At the conclusion of that meeting, these em- ployees voted unanimously to affiliate with the Union. Fol- lowing that, Attorney Nelson advised the Respondent in a letter dated February 27 that the employee organization which had been instituted by the Respondent had voted to affiliate with the Union and that the Union then repre- sented the employees. Nelson further advised that the statement of policy presented to the Regional Office had been carefully considered and that the Union did not be- lieve that it constituted a valid collective-bargaining agree- ment. Nelson asserted that, at best, the document could be considered to be the Respondent's last proposal in the course of the bargaining process. The Respondent did not reply to the letter. Not long thereafter, Business Agent Naughton of the Union got in touch with the Respondent to discuss the recognition of the Union and the recent dis- charge of an employee. During the course of a telephone conversation with Howard Reeves, the Respondent's exec- utive vice president, Reeves told Naughton that the Respondent's legal department advised him that the Union was not the bargaining representative of the Respondent's employees. In another meeting the Union held with the Respondent's employees on March 10, the employees were informed of the Respondent's refusal to recognize the Union. The 12 employees present at the meeting voted unanimously in favor of the strike action and on Monday, March 12, a picket line was established at the Respondent's premises. During the course of the strike, ap- proximately 16 out of the unit of 17 participated by engag- ing in picketing and other activities in support of the strike. During the first few days of the strike, Assistant Manag- er Paul Arthurs came from the Respondent's premises to speak with.Masterson who had recently been elected chief shop steward and who was also serving as a picket captain. Arthurs told Masterson. that Ortleb wished to speak with him and that he should come into the plant for that pur- pose. Masterson replied that he would come in if he could be accompanied by a union representative. In response.. Arthurs stated that this was'not possible and left the picket line area. Shortly thereafter, Ortleb came out to the picket line and approached Rowlands, who had recently been elected assistant shop steward, and asked him to come into the plant to speak with him. Kmon, who had arrived at the picket line shortly before, told Ortleb that the Union repre- sented the Respondent's employees and that if Ortleb wished to talk with anyone he should talk with Kmon. Ort- leb paid no attention and turned towards Rowlands and asked, "Stanley?" Rowlands replied: "You heard the man." Ortleb then turned his attention to Masterson, who did not respond, and thereupon Ortleb left the area.- On the second day of the strike, March 13, Ortleb again came out to the picket line and presented a letter to the employees then performing picket duty. The letter stated that the Respondent "has a long history over thirty years of good relations with its workers-and wishes to maintain good and friendly relations with its people. We have a con- 164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tractual agreement with you that has been reviewed by the NLRB. This agreement is valid and binding on both sides: You are in violation of that agreement." The letter went on to state that a "wild-cat strike is a highly irresponsible ac- tion. We do not believe you are aware of the possible con- sequence of this action. You could legally be discharged or replaced." The letter then offered employees the opportu- nity to come back to work, and stated that they had the right to talk with the Respondent and negotiate, and that they also had a grievance procedure which had not been used. It concluded by stating that the Board "maintains that we have an agreement with you Fine Organics em- ployees. We cannot transfer representation to another group without due NLRB process, even if this were deemed the right course of, action." In addition to distrib- uting the letter, Ortleb spoke with several of the employees and informed them that they were engaged in an illegal strike and that, as a consequence, they could lose their homes and their automobiles. During the course of the strike, on several occasions, Foremen Schreck, Swiderski, and Sayers spoke with pickets and told them that if the Union represented the employees and negotiations com- menced, the employees would lose the benefits they then enjoyed, including shift differentials. Kmon filed an unfair labor practice charge on March 16, alleging that the Respondent had violated Section 8(a)(1) by threatening employees concerning their sympathy for and activities on behalf of the Union. In addition, the, charge alleged that the Respondent violated Section 8(a)(3) and (5) of the Act by discharging an employee and by refusing to bargain with the Union. Early in April, Attor- ney Nitto got in touch with Kraner, the-Union's counsel, and discussed the possibility.of resolving the matter. As a result, Kraner and Kmon met with Nitto in the latter's office and, in response to Nitto's inquiry concerning the Union's position, the union representative replied that the matter could be resolved by granting the Union recogni- tion and paying the employees for time lost during the strike and that the parties should commence negotiations for an agreement. Nitto declined the proposal. Thereupon, the Union caucused and then reduced its demand for back- pay during the period of the strike from full pay (approxi- mately $22,000) to half pay (approximately $11,000). In addition, the Union proposed that the Respondent 's state- ment of policy, with-the addition of a union-security provi- sion, a checkoff clause, and a grievance. and arbitration procedure be adopted as a collective-bargaining agree- ment. In response, Nitto stated that he thought this would be acceptable but that he would have to consult by tele- phone before committing his client here. Thereafter, Nitto stated that he could not accept the offer and.was only authorized to sign a letter of recognition: The Union agreed with this proposal, withdrew its 8(a)(3) charge, and., proposed an informal settlement agreement with respect to the remaining 8(a)(1) and (5) allegations. The settlement agreement was thereafter executed by the parties, as relat- ed above.''. Following' the settlement agreement, the parties began. negotiations in an effort to arrive at a collective-bargaining agreement. A number of meetings were held which will next be discussed. The first meeting was held on May 4, and at that time the Union presented a list of demands which the parties proceeded to review. When this meeting ended, approxi- mately one-half of the proposals had been discussed. Re- spondent made no proposals at this session. They next met on May 7, when they discussed the remainder of the Union's proposals. On behalf of the Respondent, Carl Nit- to, Respondent's attorney, indicated that he could not ac- cept or reject the proposals and that he was merely seeking clarification of them. Nitto, near the end of the meeting, stated that he was being replaced and that he would there- after no longer represent the Respondent in the negotia- tions. The Respondent's stock was purchased by Hexcel Cor- poration on May 14. When the parties met on May 22, the Respondent was represented by Ortleb and one R. E. Nelson, personnel vice president of Hexceb The Union, at the request of the Respondent, again outlined the proposals previously sub- mitted inasmuch as Nelson, chief spokesman for the Re- spondent, was unfamiliar with them. Nelson made certain proposals concerning insurance coverage, pension plan, and a profit-sharing plan which he stated were "corporate policy." The Union agreed to study the Respondent's pro posals, but no agreement was reached with respect to any particular item. When the parties met on May 31, Arthurs was present as a member of the Respondent's negotiating team. The-Union asked certain questions concerning the insurance, pension, and profit-sharing plan which the Re- spondent had proposed at the previous meeting. In reply, the Respondent stated that these plans' were "corporate policy" and asked that they be immediately accepted by the Union so that the plans could be implemented by the Respondent at its Sayreville location. After some discus- sion, the Union's representatives stated ihat they wished to• reach agreement on a complete package which could then be submitted to the employees, and 'stated that they could not deal in "bits and pieces." At the close of the meeting, the Respondent had not accepted or rejected any of the Union's proposals and the Union did not agree to those made by the Respondent in the areas of insurance, pen- sion, and profit sharing., When the parties met on June 7, the Respondent again asked for immediate acceptance of its life insurance, pen- sion."plan, stock saving, and stock purchase plan which it had previously proposed. Representatives' of the Union stated that the Union felt that its "pension plan was more beneficial to the employees and that it, rather than the Respondent's plan, should be adopted.='The Respondent again stated that its plans were "corporate policy." There was further discussion of the Union's demands but, except for the language.to be incorporated in the recognition clause, no agreements were reached. The Respondent spe- cifically rejected the Union's proposals concerning union security, check off, grievance procedure, the performance of unit work by foremeii,'and all monetary issues. Respon- dent did indicate that it would submit proposals of its own on these subjects at a later date. The meeting scheduled for July 6 was canceled at Nelson's request inasmuch as he had a conflicting commitment. The parties met on July 9, at which time the Respondent submitted its counterpropo FINE ORGANICS, INC. 165 sal. The work rule portion was virtually identical with the statement of policy that had previously been prepared and was originally interposed as a bar to the Union's petition, as described above. The Union proposed a standard union- security clause and the Respondent replied that it would not agree to any union-security arrangement . The Union proposed a clause which would prohibit supervisors from performing bargaining unit work. The Respondent refused to agree to such a proposal and insisted that supervisors would perform such duty. The Union proposed a grievance procedure culminating in arbitration and the Respondent counter-offered with a procedure which terminated with the plant manager but allowed the Union to strike upon 10 days' notice. In reply to the Union's request for additional sick days, the Respondent proposed that unused sick days would be accumulated up to a limit of 25, with no provi- sion for further storage of unused time. Concerning senior- ity and promotions, the Respondent proposed that it be the sole judge of the qualifications of all employees. In addi- tion, the Respondent asserted that it would not recognize shop stewards designated by the Union. The parties reached agreement with respect to job classifications, dis- tribution of overtime, and a recognition and savings clause. The witness for the Respondent recounted that at the end of the meeting the parties were apart on all economic is- sues, holidays, vacations, sick leave, the effective date of the contract, seniority, superseniority for shop stewards, hours of work, overtime provisions, shift differentials, at- tendance bonus, Christmas bonus, advanced scheduling of shifts, life insurance, pension plan, savings plan, change in the pay period, and stock purchase plan. At the August 9 meeting, the parties agreed that a medi- ator designated by the New Jersey State Mediation and Conciliation Service, one Richard Kosten, be present. In order to inform the mediator of the position of the parties, the Respondent prepared a document entitled "Status of Negotiations." As made clear therein, there were very few areas of agreement between the Respondent and the Union at that time. The Union sought a wage increase of 75 cents per hour and an increase in holidays and alloted sick days. It also proposed an increase in the existing Christmas bo- nus, changes in the Blue Cross-Blue Shield Plan, a major medical plan, and a plan for the provision of dental care and eye glass service. In response, the Respondent stated it would not discuss monetary issues on the ground it was Hexcel policy to offer one wage increase a year and that the employees had already received a wage increase within the previous 12 months. The Respondent again reiterated its desire to enroll its employees in pension, life insurance, stock savings, and stock purchase plans that it had previ- ously proposed and to change the workweek to conform with the uniform practice within the Hexcel corporation. Aside from agreeing on a "successors and assigns" clause; the parties did not reach agreement on any major issue. Following this meeting, the Union received two letters from the Respondent dated August 15 and 27, respectively. In the earlier letter, the Respondent stated that it intended to implement its life insurance, retirement, savings, and pension plans, as of September 1, in spite of the fact that no agreement had been reached on the subject. Copies of this letter, and the second as well, were posted on the bulle- tin board before the Union could possibly have received the document. In the August 27 letter, the Respondent out- lined four other employee benefits: company-paid major medical insurance, stock purchase plan, overtime pay on shift differential, prorated bonus pay, and a change in the standard workweek. In response to the Respondent's let- ters, the employees were asked to sign cards in order to enroll in the plans being provided. The record clearly shows that at no time before the posting of the letters had the payment of a prorated bonus been discussed. On the contrary, the Union proposed increases in the Christmas bonus which was eliminated by the institution of a prorat- ed bonus plan. At the September 14 meeting, the Union reduced its wage proposal from 75 cents to approximately 32 cents an hour. In addition, it made further concessions by with- drawing its demand for a dental and eye glass plan and proposed changes in its vacation program.' The Union also indicated, through the mediator,. that it would consider a maintenance of membership provision rather than the full union-security provision that it had originally requested. The parties did agree on a change in the workweek and a provision allowing plant visitation by union representa- tives, provided that they first obtain permission from the Respondent so its production would not be interrupted. The Respondent did not alter its provision with respect to union security, management rights, the performance of bargaining unit work by foremen, grievance procedure, or any other issue of substance. The parties next met on October 10 and 11, and dis- cussed the issue of union security and again Respondent stated that it was corporate policy that such a provision could not be incorporated into any collective-bargaining agreement. The Union, in response, presented a copy of the collective-bargaining agreement between Hexcel and the International Chemical Workers' Union, Local 422, and pointed out that that agreement contained a union- security provision and a grievance and arbitration proce- dure, all of which the Respondent had refused to grant the Union on the ground that such matters were against corpo- rate policy. Nonetheless, the Respondent refused to alter its position. The Union made further concessions with re- spect to its previous position. It accepted the Respondent's proposal concerning the accumulation of sick days, with- drew its proposal concerning long-term disability, and agreed that foremen could perform bargaining unit work 10 percent of their worktime. Finally, the Union accepted the Respondent's life insurance program, sick pay, major medical plan, the change in the workweek, and the job progression system. Aside from these concessions, which were accepted by the Respondent, there were no agree- ments reached on any other items in dispute. The Respon- dent proposed a wage increase of 8 cents retroactive to July, plus a 24-to-30-cent-per-hour increase effective Janu- ary I. After the October II meeting, the Respondent advised Kmon in a letter of the same date that it would, as soon as 1 Originally the Union had demanded 3 weeks' vacation after 5 years of service. and proposed instead 3 weeks after 8 years and completely with- drew its demand for a 5 weeks' vacation after 25 years. 166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD possible, implement its proposals with respect to major medical insurance, overtime pay on shift differential, pro- rated bonus payment, sick leave, the change in the work- week, the stock purchase plan, and the change in the wage structure reflecting increases of 3 and 5 cents an hour to offset changes in the Respondent's bonus program. The Respondent's letter stated the inability to reach an agree- ment with the Union was attributable to a disagreement with respect to the union-shop issue. Despite the Union's objections, timely communicated to the Respondent, the Respondent did implement the described proposals which may be summarized as follows: 1. Company-paid major insurance. 2. Overtime pay on shift differential to be included in base pay when computing overtime. 3. Prorated bonus payment-a 5-cent-per-hour in- crease in wage rates in lieu of year-end Christmas bo- nus; in addition, the payment of 3 days' pay to each employee to be made at the time of the change in the workweek, representing a prorated bonus for the first 9 months of the year, terminating such benefit. 4. Sick leave-conversion to Hexcel standard sick program which provided for the accrual of unused sick leave at a half day per month. In addition, em- ployees would receive 3-cent-per-hour pay adjust- ments effective January 1, to offset the previous semi- annual payment of unused sick leave. 5. The workweek was changed to a period beginning 12:01 Monday and ending at midnight the following Sunday, with a payday on Friday, following the end of the workweek; retroactive pay in lieu of unused sick leave and 3 days' pay in lieu of a bonus was paid at the time the changeover was effected. 6. The Respondent stated that it was no longer possi- ble to have employees participate in the stock pur- chase plan beginning September 1, but proposed parti- cipation beginning with the second phase of the plan, March 1. 7. The Respondent altered the wage rates to reflect the 3-cent sick leave and 5-cent bonus adjustment. At a November 8 meeting arranged by the mediator, there was no movement by the parties.. The Respondent's foregoing proposals had already been implemented in their entirety. C. The Discharge of Masterson Masterson was employed by the Respondent in Septem- ber 1972 and was assigned to the reactor area. Thereafter, Masterson was assigned to the centrifuge, where he was given a brief period of on-the-job training. During the course of the strike previously described, Masterson served in the capacity of chief shop steward for the Union and as picket line captain.. When Ortleb desired to negotiate with the employees during the strike, he approached Masterson who replied that he would only do so if the union represen- tative were allowed to accompany him into the plant. Mas- terson was also among the employees whom the Respon- dent threatened with reprisals because they had engaged in a strike on behalf of the Union. At the conclusion of the strike, Masterson, as chief shop steward, was appointed along with Rowlands to the negotiating committee. Masterson testified that as soon as the strike was over and he had returned to work the Respondent changed its attitude toward him and began to carefully watch his Iunchbreaks and his presence in the lockerroom. On June 12, Masterson received a 3-day suspension for allegedly smoking on the roof of the plant. Although the Respondent has a rule against smoking on the roof, the record shows that employees have, in the past, smoked on the roof on numerous occasions without reprisal. In addition, the rec- ord shows that on a number of occasions there were ciga- rette butts present on the roof, that Masterson and others had previously smoked at that location, and at least once Shift Foreman Frank Sayers observed Masterson smoking without reprisal of any kind. At the start of the shift on September 8, Ralph Skelton, an employee, overheard Schreck tell Tom Salvatore, a new foreman-trainee, to keep an eye on Masterson. Later, Skel- ton eavesdropped on the same two supervisors and heard Schreck tell Salvatore to go up to the centrifuge on the fourth floor where Masterson was assigned to see if he was sleeping. Salvatore went to the centrifuge area and, when he returned, informed Schreck that Masterson was in a prone position but was not sleeping. On the other hand, Salvatore denied that Masterson was not sleeping or that he had so reported to Schreck. On Saturday, September 22, Masterson was again as- signed to work on the centrifuge. At the start of the shift, at approximately 11:45 p.m., Skelton and another employee overheard Foreman Schreck tell Salvatore to "keep an eye" on Masterson. After the shift started, Schreck told Salva- tore to go upstairs and check on Masterson in order to ascertain whether he was sleeping. About 15 minutes later, Salvatore returned and reported that although Masterson was in a prone position he was not sleeping.2 Skelton, real- izing the damage to Masterson, his fellow employee, went around the back of the building and up a catwalk to the fourth floor. He told Masterson that he had overheard the conversation between Schreck and Salvatore and warned him to be careful. When Skelton returned to the first floor, he again overheard Schreck tell Salvatore that "it will take time, but we will eventually get him.". Skelton admitted to Schreck and Salvatore that he had warned Masterson and was reprimanded for his conduct. About 1:30 in the morning, Foreman Schreck again told Salvatore to go to the fourth floor centrifuge area and check if Masterson was sleeping. Schreck testified that he had seen Masterson asleep, but, rather than wake him up, summoned Salvatore for corroboration. On Salvatore's way up, he saw spillage coming from the big trap on the second floor. He ran upstairs and Masterson, according to Salvatore, got up from his lying down position and took care of the problem. Salvatore then went downstairs to help Schreck who was cleaning up. 2 It should be noted that before this Skelton had talked with Foreman Sayers about the Union and Sayers indicated that the Respondent would eventually get rid of Masterson. Later. Schreck. angry at Masterson's strike activity. told Skelton he would "eventually get him." FINE ORGANICS, INC. Later in the evening, Masterson experienced a "rough load" on the centrifuge, which occurs many times during the year. Based on previous experiences, Masterson purged by stopping the feed in an attempt to let the material in the centrifuge dry up and settle down. When the machine en- tered the wash phase, Masterson's counter-measures were no longer effective, and the machine, running rough, shut itself off. As a result, water from the centrifuge fell into the hopper and dryer and some liquid trickled down on the floor of the mill below. Peter Shuhala, a maintenance man, was advised of the spill and, after covering the mill to. pre- vent damage, proceeded up to the centrifuge area to ascer- tain the cause. Shuhala could not recall exactly what oc- curred and testified that either he or Masterson started the centrifuge. The machine was out of service a short period of time and there was no damage to any of the equipment. In addition, Skelton testified that during the course of the evening, after the foregoing incident, he warned Mas- terson that the supervisors were watching him. Skelton re- lated that during the course of this conversation that eve- ning he heard Schreck tell Salvatore that he would "get Masterson that night." It is rather interesting that, with so much to learn about a new plant, Schreck had Salvatore check on Masterson, one of many employees in the plant that night, on several occasions. In my view, Skelton's testi- mony was given forthrightly with sharp recall of events of that evening. He candidly related that he had slept on numerous occasions in the plant. Some hours later, when Masterson had a rough load, which is a common occur- rence, the centrifuge began to vibrate and the automatic cutoff switch shut off the machine. Masterson was unable to restart the centrifuge until the machine came to a com- plete stop and some water from-the centrifuge flowed into the hopper and wet some product. The production process involves wetting the product and in the instant case the only consequence was that the material had to be dried a longer period of time. There was no damage to the mill or the machinery and the Respondent's production did not measurably suffer. Before this spillage, Schreck's foreman again climbed the four flights of stairs to the centrifuge area to check on Masterson and again testified that he was sleeping. Although Schreck hated Masterson, according to his testimony, he wanted a witness to the incident and again returned to the first floor of the plant to summon Salvatore to observe the sleeping employee. Once again, the spillage occurred in the interim, and by the time main- tenance man Shuhala reached the scene Masterson was awake and attending to his machine., Thus, twice in one evening the Respondent's supervisors, in an alleged quest for corroboration, allowed Masterson to allegedly sleep while his machine was in operation and in the few minutes required to summon a witness the operation of the centri- fuge went awry. Schreck, the experienced foreman and his assistant Salvatore, although they were in full charge of the plant, allegedly needed guidance concerning the situation' and took no action until 6 a.m., 2 hours after the second incident allegedly occurred and after they communicated with Respondent's plant manager. Masterson was suspend- ed at approximately 6:30 a.m., 1-1/2 hours before the end of the shift. The following Monday and -Tuesday, Ortleb conducted his own investigation of the incident and after 167 allegedly considering the matter determined to discharge Masterson. I am persuaded that Masterson was a thorn in the Respondent's side, and particularly Schreck who hated him because of their confrontation and because he believed that the advent of the Union threatened his job. The record shows that sleeping is a common occurrence in the plant and, even if Masterson was guilty of the alleged infraction, it would have been overlooked and gone unnoticed, but for Masterson's union activity. Even Salvatore, until he had received instructions from Schreck with regard to Respondent's policy toward Masterson, overlooked and failed to record a similar incident 3 days earlier. It seems evident that the Respondent was out to get Masterson and did so in reprisal for engaging in protected activity, in vio- lation of Section 8(a)(1) and (3) of the Ac t.3 At about 4:15 a.m., while making his regular rounds, Salvatore visited the centrifuge area and found that Mas- terson was asleep. He then left the area to notify Schreck and, in the meantime, water began to flow from the centri- fuge which, by that time, was not operating properly.4 Sal- vatore went upstairs and met Masterson, who was wide awake, and Shuhala, attending to the machine.' At approx- imately 6 in the morning, after talking with Ortleb, Schreck suspended Masterson. The following Monday and Tuesday, Ortleb discussed the events of the previous Friday with Schreck, Salvatore, and Masterson. In addition, he delivered a copy of the charge, filed by Local 1310, to Respondent's Lodi plant and discussed Masterson's discharge with Reeves and with Nelson in California. On September 26, Ortleb decided to terminate Masterson and a letter was sent him advising him that he had been suspended for 3 days on June 12, because of a "serious infraction of proper work conduct," and that, as a result of "another infraction of proper work conduct on September 22, 1973, your employment at Fine Organics is hereby terminated." Discussion and Conclusions Counsel • for the General Counsel argues that the Re- spondent, by refusing to recognize and bargain with the Union upon receipt of a timely demand for recognition in an appropriate unit and at a time when the Respondent had no doubts that the Union represented a large majority of its employees, violated Section 8(a)(l) and (5) of the Act. Elaborating on this point, counsel states that on February 27 the Union clearly represented a majority and the Re- spondent, by a letter of February 27, was advised that the 3 Even if Masterson was asleep on September 22. which he steadfastly denied , the record clearly reveals that sleeping is a common occurrence on the third shift, tolerated by management, and was used here as a pretext for discharging.. Masterson. The existence of valid grounds for discharge is clearly no defense to an unfair labor practice when discriminatory motive is a factor in the employer's decision. See N.L.R.B. v. S1.mons Manufacturing Co., 328 F.2d 835. 837 (C.A. 7, 1964). "The product. which had to be redried, was not damaged. 5It should be noted that Salvatore testified, contrary to Skelton, that Masterson was also sleeping the first time he visited the area. Although Salvatore testified that he saw Masterson asleep twice that night , he made only one entry in the log which appears to refer to the first incident and does not mention the spillage at all. 168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees who were members in the association which the Respondent had created voted to affiliate with Local 1310. Moreover, by letter dated January 25, the Union had ad- vised the Respondent that it had been designated by the Respondent's employees as their exclusive collective-bar- gaining representative. However, the Respondent refused to recognize the Union, apparently because it preferred to deal with the employees directly. As we have seen, a strike commenced on March 12 and it was not until April 27 that the Respondent acknowledged the Union's existence and recognized it as the representative of its employees for bar- gaining purposes. At no time did the Respondent state that it doubted the Union's majority status. To the contrary, the Respondent threatened its employees with reprisals and made every effort to deal with Rowlands and Masterson as individuals or as representatives of the organization it had created 2 years previously, rather than with the Union. It is, of course, true that the Board has held that an employer, absent the commission of unfair labor practices, may resist a claim for recognition on the part of a labor organization and insist that it demonstrate its majority sta- tus in an election conducted by the Board.' However, counsel for the General Counsel argues that in the present case the Respondent opposed such a demonstration by as- serting that its statement of policy, which it had unilateral- ly propounded, constituted a bar to the petition filed by the Union. He notes that the Respondent attempted to rely on a document which had neither been seen nor signed by any of the employees or their representative in an effort to thwart the desires of its employees to be represented by the Union. Thus, he states that the determination of the Re- spondent "to avoid dealing with any union is dramatically demonstrated by a clause in its Statement of Policy which purports to waive the right of its employees, for the life of the agreement, from seeking any formal certification by the Board." He points out that when the Union went on strike the Respondent "embarked upon a campaign to. destroy its majority status, which, at that time, was fully demonstrated by the participation of 16 of Respondent's employees in a unit consisting of approximately 17 people." Despite this, he argues that the Respondent sought to undermine the Union's majority status by attempting to bargain with Rowlands and Masterson without the presence of the Union's representative and by "threatening employees with economic reprisals, law suits, loss of their homes and their cars, and with discharge." This conduct, it is asserted, con- stituted violations of Section 8(a)(l) and (5) of the Act. On the other hand, counsel for the Respondent contends that the bargaining was "run-of-the-mill," and that neither was more adamant than the other. He contends that if either party "could be said to have unreasonably taken a position, that would be the Union's position on the Union shop," inasmuch as, in his view, the Union "notified the Company it would not sign a contract without the Union shop." It is his position that the implementation of certain benefits was not unlawful because the Respondent "could not be expected to stop operating its business just because the, Union did not want to agree to certain provisions in the 6 Linden Lumber Division, Summer & Co., 190 NLRB 718 (1971). contract." In sum, he contends that the parties had reached an impasse and that therefore the Respondent was "free to do as it did-implement the benefits it had offered to the Union." I am convinced that counsel for the General Counsel has the better of the argument and, accordingly, I conclude and find that the Respondent violated Section 8(a)(5) and (1) of the Act by its conduct by withholding recognition from the Union during the period from February 27 to April 27. Moreover, I find that the Regional Director prop- erly revoked the April'27 settlement agreement on Novem- ber 24, in view of the fact that the Respondent, by its sub- sequent conduct, further violated Section 8(a)(5) and (1) of the Act. In addition, the record shows that the Respondent, by Supervisors Schreck, Sayers, and Swiderski, on or about March 13, warned employees that if the Union were recog- nized as their representative they would suffer economic reprisals, including loss of benefits then enjoyed. As we have seen, Rowlands testified without contradiction that, during the strike, these three supervisors told employees that the strike was a "wildcat strike and that the employees would lose everything they had." In addition, the Respon- dent informed employees by letter that the strike was ille- gal and that those who participated in it could be dis- charged or replaced. Moreover, Ortleb and A'rthurs assert- ed that the strikers would be sorry and that they could lose their homes or automobiles. I further conclude that the strike which commenced on March 12 was'caused by the Respondent's unfair labor practices and that at no time did the Respondent' doubt the Union's majority status. To the contrary, the Respondent threatened employees with repri- sals and attempted to deal'with Rowlands and Masterson as individuals or in the capacity of representatives of the organization the Respondent had created 2 years previous- ly. It is the position of counsel for the General Counsel that by meeting with the Union from May through October, with no intention of entering into meaningful negotiations or reaching a collective-bargaining agreement, the Respon- dent further violated Section 8(a)(5) and (1) of the Act. As we have seen, Respondent's attorney, Nitto, was given au- thority to recognize the Union but was not authorized, as part of an overall settlement, to agree to any backpay to reimburse the employees for wages lost as a result of the Respondent's unfair labor practices or to 'enter into sub- stantive negotiations for an agreement which would have as its core, the Respondent's own statement of'policy. In fact, Nitto was only authorized to adopt the Respondent's statement of policy, in toto, as a final collective-bargaining agreement. Despite the apparent imminence of a purchase of the Respondent's stocks by the Hexcel Corporation, no notice of this was given to the Union. At the second meeting on May 7, Kmon continued to review and explain the propos- als that had previously been submitted and it was not until the latter part of that meeting that anyone informed, the Union that Hexcel had purchased the stock of the Respon- dent and that there would be a change in the identity of the Respondent's representation at the bargaining table. Nel- son, Hexcel's personnel vice president, testified that he did FINE ORGANICS, INC. not have authority at any time prior to May 14 with respect to the Respondent and, therefore, was justified in conceal- ing the stock purchase from the Union and allowing the Union to continue to negotiate with Nitto, although it had already been determined that he would be replaced. Ort- leb, however, clearly had authority to inform the Union of the imminence of the purchase and could have suggested a postponement of the meetings in order to eliminate the necessity of meaningless negotiations. By this conduct, the Respondent caused the Union, in effect, to negotiate with a lame duck representative and at the third meeting was compelled to cover the same ground with Nelson, the new representative of the Respondent, as had been previously covered with Nitto. When Hexcel's representative handled the negotiations, the Respondent introduced proposals on the subjects of pension, life insurance, and a stock savings and pension plan which were characterized as "corporate policy." These policies were not submitted as a counteroffer to the Union but as items that were inherent in Hexcel's ownership and which represented the way in which these benefits would be afforded to the employees. It is plain that the rigid stance of the Respondent with regard to these benefits is readily apparent by its unilateral implementation of these benefits during the course of the negotiations without af- fording the Union the opportunity to fully discuss these issues in the context of a complete collective-bargaining agreement which the Union could present to the Respondent's employees for their approval. It seems clear that the Respondent did not give any meaningful consider- ation to the Union's proposals and, on August .15, despite the fact that one item, namely prorated bonuses, had not even been discussed "took the proposals to the employees." Inasmuch as the negotiations were still in their infancy and there was no justification for direct communication to the employees, it appears that the Respondent desired to un- dermine and diminish the stature of the Union. On August 15, the Respondent announced that its proposals on life insurance, retirement, and the savings and pension plan would be implemented on September 23. At that point, there had been four negotiating sessions with Nelson, who had assumed responsibility as chief spokesman and, it seems clear, no valid impasse had been reached. Although Nelson used the word "impasse" in characterizing the sta- tus of negotiations prior to the August 9 meeting where a mediator, by mutual agreement, was present, it appears that that impasse was caused by the Respondent's insis- tence on its "corporate policy proposals" and not because the Union was inflexible or unwilling to alter its position. Indeed, the Respondent did not even conduct its wage study until several weeks later, and by the end of the Au- gust 9 meeting, the last one prior to the unilateral imple- mentation of the benefits, did not even make a, wage offer. It would seem clear that there was need for further negotia- tions as exemplified in the continued efforts of the media- tors and the additional proposals that were made by both parties after August 15. An employer may lawfully imple- ment proposals only when'they have previously been of- fered to the Union and "also when negotiations have reached a valid impasse. See N. L. R. B. v. Katz, 369 U.S. 736 (1962). 169 The intransigent position of the Respondent is further revealed with regard to Hexcel's corporate benefits when. on August 27, it again proposed certain items to the Union and placed a copy of a letter on the employees' bulletin board in the plant before the Union had an adequate op- portunity to receive the Respondent's letter embodying those items. The Respondent specifically rejected all of the Union's proposals and, in lieu thereof, proposed either an established Hexcel program or reserved to itself discretion on the issue of management rights. Consideration of the proposal the Respondent first submitted to the Union on July 9 indicates quite clearly that the Respondent had no intention of according the Union any meaningful role in the representation of its employees. As previously noted, the Respondent refused to agree that supervisors who are excluded from the unit be restricted in any way from the performance of unit work. The proposed grievance ma- chinery submitted by the Respondent effectively consisted of no more than steps ending with Ortleb, with no recourse to either Hexcel, the parent company, or to any neutral third party other than the courts. Respondent agreed that the Union would have the right to strike over such disputes provided, however, it have 10 days' notice of its intention to do so and that such action commenced within a 20-day period. At the outset, the Respondent refused to recognize shop stewards for the Union, and insisted it would be the sole judge of employees' qualifications with respect to pro- motions. Also, the Respondent refused to consider any form of union security or to agree to an arrangement for the checkoff of dues on behalf of the Union. Although the Respondent contended that its position on these issues was one of principle, it offered no explanations for the inclusion of such provision in its own plant in Cali- fornia. Later, the Respondent explained that it did not agree to a checkoff because it did not want to have in its possession information concerning the union activity of its employees and the administration of a checkoff by the Re- spondent would frustrate such a desire. Surely, if it desired to do so, the Respondent could effectively resist a tempta- tion to discriminate against its employees because of their membership in or payment of dues to the Union, and such a justification for refusing•to acceed to the Union's request seems obviously contrived. The inflexibility of the Respondent's bargaining position on these and other issues is even clearer when we consider its October 11 letter to employees. There, the Respondent asserted that the only obstacle to reaching an agreement with the Union-concerned the disagreement the parties had with respect to the union-shop issue. According to the Re- spondent, this disagreement placed employees in the posi- tion of not being able to enjoy the benefits which the Com- pany at that time was willing to offer. Therefore, the Re- spondent attempted to place the onus for the loss of these benefits on the Union, although, as we have seen, it was the Respondent's own unyielding position with respect to the Union's proposals regarding grievance procedure, manage- ment rights, seniority, and other issues of importance to the employees that caused the loss of these benefits.'Through- out the negotiations, the Respondent refused to discuss a wage increase, claiming that it was a matter of corporate policy for wages to be reviewed and adjustments granted 170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD once during the course of a year and, since the employees had already received a wage increase on January 1, further discussion of that issue was barred. Despite this position, the Respondent had no reluctance in proposing and imple- menting certain benefits, such as major medical insurance, life insurance, and a stock savings and purchase plan, as these items were "corporate policy benefits" and proposed by the Union. Inconsistently, the Respondent argued that it was inappropriate to receive more than one wage adjust- ment in a given year while at the same time offering sub- stantial benefits during that same time interval. The foregoing implemented benefits clearly placed the Respondent's employees in a better position than they were before, except that these benefits were deliberately in derogation of the Union's bargaining status and the fact of their implementation was communicated by Respondent directly to its employees, thereby evading its duty to deal with the Union. Nelson further exemplified Respondent's unyielding bargaining position when he discussed the Respondent's position on wages. In the "Status of Negotiations" submit- ted to the mediator, and Respondent stated: "It is the Company's position that wages and benefits should be re- viewed and adjusted again January 1, 1974, therefore the monetary proposals are not listed." On cross-examination, Nelson was asked whether that position signified that the Respondent would not discuss wages for 1973, as an increase had already been unilateral- ly granted as of January 1 of that year. He testified as follows: Q. Now, is that to signify that at this point in the negotiations, the company position was that there would be no discussion as to the 1973 wages, pure wage increases as they have been already granted uni- laterally as of January 1, 1973? A. Yes, as I indicated several times , our position was that there should be no change but we discussed it many times. We at no time refused to discuss mone- tary items. Q. Well, if you hadn't refused to discuss monetary items why weren't they summarized for the conciliator in this status of negotiations which the company pro- posed? A. Our position was at that time that the monetary issues should be adjusted as of January 1, 1974. We were not proposing a change at that time. Thus it appears that although Nelson was willing to dis- cuss wages and, so far as it appears, any other subject as well, he approached the bargaining table with a predeter- mined position and would not, for any reason, alter his stance. At all times, the Respondent steadfastly adhered to a position on every major item which would constitute a ba- sis of a collective-bargaining agreement. The Respondent even insisted that the current sick leave plan be amended to conform to Hexcel's policy, despite the.fact that employ- ees would thereby suffer a loss.' The Respondent's offer of a wage increase late in negotiation consisted of no more than a replacement for unused sick leave and exchange for the Christmas bonus which also was unilaterally terminat- ed. Although the Respondent characterized its proposal as a wage increase, in reality it constituted nothing more than a realignment of benefits already possessed by its employ- ees. 111. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth above, have a close, initmate, and substantial relationship to trade, traf- fic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce. IV. THE REMEDY Having found that the Respondent has engaged in unfair labor practices, it will be recommended that it cease and desist therefrom and take certain affirmative action de- signed to effectuate the policies of the Act. Upon the basis of the' foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondent, Fine Organics, Inc., is an employer within the meaning of,Section 2(6) and (7) of the Act. 2. Paint, Chemical, Clerical, Warehouse & Industrial Workers Union , Local 1310, International Brotherhood of Painters & Allied Trades, AFL-CIO, is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. By questioning employees concerning their union and concerted activities, the Respondent violated Section 8(a)(1) of the Act. 4. By making promises of increased benefits to employ- ees if they would withdraw from the Union , the Respon- dent violated Section 8 (a)(1) of the Act. 5. By granting increased benefits, thereby attempting to bribe the employees to abandon the Union , the Respon- dent violated Section 8(a)(1) of the Act. 6. By suspending and later discharging Edward Master- son, the Respondent violated Section 8(a)(1), (3), and (4) of the Act. 7. By refusing to bargain collectively with the Union, which represented a majority of the employees in the ap- propriate unit found above, the Respondent violated Sec- tion 8(a)(5) and (1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. [Recommended Order omitted from publication.] 7 The Respondent's plan previously provided that employees be paid for all of their unused allotment of 6 days per year. The Respondent's proposal, later implemented unilaterally , removed the provision for payment at the, end of the year and provided for accumulation of unused time up to 25 days, with the remainder lost.