Premier Fabrics of California, Inc.

710 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Premier Fabrics of California , Inc and Oil, Chemical & Atomic Workers International Union, AFL-CIO, Local 1-128. Case 21-CA-14034 June 11, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS On March 5, 1976, Administrative Law Judge Roger B Holmes issued the attached Decision in this proceeding Thereafter, 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 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 Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Premier Fabrics of Cali- fornia, Inc , Los Angeles, California, its officers, agents, successors, and assigns, shall take the action set forth in said recommended Order 1 The Respondent has excepted to certain credibility findings made by the Administrative Law Judge It is the Board's established policy not to over rule an Administrative Law Judge s resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect Standard Dry Wall Products Inc 91 NLRB 544 (1950), enfd 188 F 2d 362 (C A 3, 1951) We have carefully examined the record and find no basis for reversing his findings DECISION STATEMENT OF THE CASE ROGER B HOLMES, Administrative Law Judge The charge in this case was filed on October 3, 1975, by Oil, Chemical & Atomic Workers International Union, AFL- CIO, Local 1-128, herein called the Union The complaint was issued on November 11, 1975, on behalf of the General Counsel of the National Labor Relations Board, herein called the Board, by the Regional Director of Region 21 The complaint alleges that Premier Fabrics of California, Inc, herein called the Respondent, has engaged in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, here- in called the Act Respondent filed an answer to the com- plaint and denied the commission of the alleged unfair la- bor practices The case was heard before me on February 5, 1976, at Los Angeles, California Briefs were filed by the General Counsel and by the Respondent and have been duly con- sidered Oral argument was made by the Charging Party at the hearing Upon the entire record and based upon my observation of the demeanor of the witnesses, I make the following FINDINGS OF FACT I JURISDICTION Respondent is, and has been at all times material herein, a California corporation and has been engaged in the wholesale distribution of drapery, slipcover, and uphol- stery fabrics, with a facility located at 2323 South Grand Avenue in Los Angeles, California Respondent, in the course and conduct of its business operations, annually purchases and receives goods valued in excess of $50,000 directly from suppliers located outside the State of Califor- nia Upon these admitted facts, I find that Respondent has been at all times material herein an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act II THE LABOR ORGANIZATION INVOLVED The parties stipulated at the hearing that the Union is now, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES A The Issues The principal issues raised by the pleadings are 1 Whether the Respondent and the Union reached a final and binding agreement on the terms of a collective- bargaining agreement, or whether the parties only reached a tentative agreement which was understood to be subject to final approval by the president of the corporation in New Haven, Connecticut 2 Whether the Respondent violated Section 8(a)(1) and (5) of the Act by its refusal to execute the collective-bar- gaining agreement B Background A Board-conducted representation election was held on March 21, 1975, in which a majority of the employees in the unit described below designated the Union as their col- lective-bargaining representative The Regional Director of Region 21 certified the Union on March 31, 1975, as the exclusive representative of the employees in the following appropriate unit All office clerical employees, including all credit de- partment employees and all order department employ- 224 NLRB No 112 PREMIER FABRICS OF CALIFORNIA, INC ees employed by Respondent at its 2323 South Grand Avenue, Los Angeles, California, facility, excluding all other employees, including all warehouse employ- ees, shipping and receiving employees, cutters, sample makers, outside salesmen, professional employees, guards, and supervisors as defined in the Act At the time of the election and certification of the Union, there were approximately eight employees in the bargaining unit There has been no prior collective-bar- gaining history in the office clerical unit involved in this proceeding or in any other unit at the Los Angeles facility C The Employer's Business Operations Respondent was previously owned by Herman Abbott, president of Premier Fabrics, Incorporated, located in New Haven, Connecticut A vice president of the corporation ran the Los Angeles facility at that time In the fall of 1973, all of the shares of stock of the Respondent were purchased by Lily Lynn, Incorporated Thomas Lerner has been vice president of the Respon- dent since August 1, 1973 Prior to that time he had served as general manager from January 15, 1973 Lerner is the only corporate officer located in California The president of the corporation is Joseph Anastasio who is located in New Haven, Connecticut In addition to its Los Angeles facility, Respondent has other warehouses in Atlanta, Georgia, and Cincinnati, Ohio About 80 percent of the purchases of goods for the Los Angeles facility are decided upon by the New Haven of- fice The remaining 20 percent are determined by Lerner, but in conjunction with the vice president of merchandis- ing in New Haven who has final authority over what goods are to be purchased Invoices to customers are sent out both from Los Angeles and from New Haven, depending upon what facility ships the goods to the customer A branch accounting office is located in Los Angeles, howev- er, the main corporate accounting office and the controller are located in New Haven Payments from customers re- ceived by the Los Angeles office are deposited in a transfer account at a bank and transmitted to the home office The budget is prepared in New Haven and sent to Lerner who is expected to operate within the budget guidelines In fiscal year 1975, total gross sales for the Los Angeles facility were about $1 4 million and for Lily Lynn gross sales were approximately $50 million for that period Sometime in 1974 Lerner gave wage increases to the Los Angeles employees and also gave them 2 weeks' vacation a year and sick leave Previously, the employees had received only a 1-week vacation and no sick leave Lerner did this on his own authority The increase in benefits displeased the New Haven office which instructed Lerner to revert to 1 week's vacation Lerner said that he told the New Haven office about the competitive nature of the industry in Cali- fornia, and Lerner prevailed and the increased benefits re- mained However, Lerner subsequently advised the office manager in Los Angeles, who handles the payroll, that any pay raises had to be approved by New Haven' i The facts in this section are based on Lerner's testimony which was not in dispute with regard to the foregoing matters 711 D Contract Negotiations Between the Respondent and the Union The first meeting for negotiating a contract between the parties was held on May 22, 1975 2 Present at the meeting which was held at the company premises were Thomas Lerner, vice president, and Leah Groveman, office manag- er, on behalf of the Respondent , and Arthur Maxwell, vice president, and Marilyn Fielder, steward and employee ne- gotiating representative , on behalf of the Union 3 Maxwell introduced himself at the meeting and ex- plained his authority to negotiate an agreement on behalf of the Union, but that the agreement would be subject to ratification by the employees According to Maxwell, Ler- ner also explained his authority as a vice president of the Respondent and said as far as he was concerned, they could reach an agreement if they did not change corporate policies Maxwell asked Lerner what he meant by that Lerner stated that the retirement plan and the medical plan were controlled by the corporate office in New Haven A complete contract proposal consisting of 11 typewrit- ten pages was presented by Maxwell to the Company The parties then proceeded to go through the entire agreement and the Union explained the application and intent behind each article of its proposal Lerner told the Union that he would respond to the proposed agreement Lerner stated that where he made no response , the Union could consider those articles to be agreed upon Lerner said that some of the items in the Union's proposal would have to have cor- porate approval-the retirement plan and medical plan Just before adjournment, Lerner informed Maxwell that he had given raises to the employees in the past, but that now business was down 4 Lerner testified that he explained the corporate structure to Maxwell at the first meeting Lerner said that Respon- dent was a branch office operating in Los Angeles and was part of a corporation which was owned by Lily Lynn Ler- ner said that he had the authority to negotiate as an officer of the Company, but that final approval would have to come from New Haven Lerner said that Maxwell told him the same thing-that Maxwell was the one to negotiate for the Union, but the agreement would have to be ratified by the employees Lerner stated that the only thing he told Maxwell about the medical plan and pension plan was that those two matters are handled by New Haven 5 2 Prior to the first meeting, the Union had requested by letter dated April 10, 1975 information from the Company concerning the employees' hiring dates, wage rates job classifications, fringe benefits, and related matters Respondent replied promptly on April 15, 1975, to the Union by letter in which the requested information was furnished 3 At the time of the hearing in this proceeding on February 5, 1976, Ms Fielder was no longer employed by the Respondent She was not called as a witness 4 The foregoing is based on the testimony of Arthur Maxwell whose testi- mony has been credited throughout this proceeding Maxwell gave the im pression of being a candid and truthful witness who was trying to recall these events as accurately as possible Where there are conflicts with his testimony I have found his testimony to be the most reliable and credible 5 At the hearing Lerner said that the pension plan is operated out of the New Haven office, but that it did not cover the Los Angeles employees up to that time The medical plan operated out of New Haven does give cover- age to the Los Angeles employees and employees in the other two branches 712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Office Manager Groveman was also present at the meet- ing When asked at the hearing what Lerner had told the Union about his authority in contract negotiations at the first meeting, she said, "He explained the structure of the entire Company, and started off by relating that we are just one branch of a few with a home office in New Haven and that we are responsible to them " She added that Lerner said, "-he could do all the negotiating and bring this con- stantly to the attention of New Haven " The second negotiation session was held on June 26, 1975, at the Company's offices The same persons were present According to Maxwell, Lerner informed the Union that the Company had lost a considerable amount of money over the last 6 months and that he wanted to give the Union a copy of a profit-and-loss statement Maxwell said that they discussed the losses of the Company and then Lerner submitted the Company's counterproposals Lerner said that the counterproposals were just for this particular location and that he had not lived by corporate policy over the last 2 years Lerner commented that, prior to the time that he took over the Company, the Company was run by corporate policy and the employees used to have a 1-week vacation regardless of their years of service and that the employees did not have any sick leave After Lerner took over the Company, he said that he gave the employees 2 weeks' vacation and sick leave However, Maxwell said that Lerner told him that now that the Union has come in, he would go back to corporate policy Max- well replied that dust because the Union was now here, he did not want to negotiate "retrogression" and have the em- ployees lose anything which they already had He said that Lerner "backed off that position" and then they began to discuss the Company's counterproposals After going through the Company's counterproposals at the second meeting, Maxwell said that Lerner told him that Lerner did not live by corporate policy and that Lerner wished that Maxwell would not live by union policy 6 He said that, as long as the Union was not insisting on jury duty and retirement pay Lerner had given the employees raises in the past and if business was up he would give them raises even if the Union was not there Maxwell related that Lerner also told him at the second meeting that the Company at this particular location rested wholly on his shoulder, that he basically owned this partic- ular location,7 that Lerner made the decisions on things which were not corporate policy, and that was why he gave the Union the profit-and-loss sheet for this particular loca- tion and not for New Haven Lerner stated that the Union had insisted on things that he could not give He gave, as an example, Easter Sunday as a holiday Lerner said that the Company could not give that At that point the Union 6 In his testimony Lerner denied emphatically saying this to Maxwell 7 Lerner denied telling Maxwell that he owned the Los Angeles plant and affirmatively testified to the ownership of the corporation by Lily Lynn I attribute the conflict here to a misunderstanding of the intent of what was said by Lerner In the context of this conversation, Lerner was speaking of the Los Angeles facility resting "wholly on' his shoulder and it appears that he was intending to convey that he had responsibility for this plant and its operation, rather than wholly owning the Los Angeles business The simi- larity in sounds and expressions apparently resulted in a misunderstanding withdrew its proposal to have Easter Sunday as a holiday Maxwell then asked whether the medical plan provided for dependent coverage, and Lerner responded that if the em- ployees wanted dependent coverage that he would work something out if one of the employees would come in and ask him at this meeting 8 Lerner testified that he had discussed the Company's counterproposals prior to the meeting with his New Haven office and that the Company's counterproposals were ac- ceptable to New Haven before he presented them to the Union at the second bargaining session Lerner said that the profit-and-loss statement which he gave to Maxwell showed a loss of $101,000 by the Los Angeles facility for the first 6 months By the time of the hearing, Lerner said that the Company had a considerable loss for the whole year in the operation of the Los Angeles facility He did not have the final figures for the year, but he said that New Haven termed it as "quite a disaster " On July 2, 1975, the third bargaining meeting was held at the Company with the same persons present Discussion of the proposals and counterproposals continued by the par- ties Lerner again brought up the losses of the Company, so the Union asked the Company about agreeing to a wage reopening provision Lerner asked Maxwell to work out the language and Maxwell agreed to do so in view of the Company's losses Among other things, the parties dis- cussed the proposals on union security, holidays, vacations, funeral leave, probationary period, promotions and demo- tions, and agreed to leave open severance pay and jury duty Prior to the July 2 meeting, the Union had distributed a pamphlet at the Company concerning the calling of a strike vote At the meeting Lerner wanted to know why the Union had passed out the pamphlet because he felt that they could reach agreement Maxwell said that the purpose of the pamphlet was so that he could get assistance from his International because of some of the matters on which Lerner was insisting Maxwell commented, "I was getting into an area of negotiating retrogression for the employ- ees " However, Maxwell told Lerner that this did not mean that the Union was going to pull the employees out on strike Lerner asked Maxwell to call off the strike vote and said that they could set up a subsequent meeting to reach agreement on all open items Whereupon, Maxwell spoke to the employees individually at the plant and told them that Lerner had said that they could reach agreement on all open items, therefore there was no need for assistance from the International, so they could call off the strike vote if they wanted to do so As a result of this, the strike vote was canceled 9 The fourth meeting between the parties took place on July 15, 1975, at the Company Alternate Steward Suzette Mitchell substituted for Ms Fielder, otherwise the persons present were the same ones as before The Company submitted its second counterproposals to the Union at this meeting Discussion of this set of counter- proposals then ensued After a lengthy consideration of the $ The proceding is based on Maxwell's account of the meeting The account of this third meeting was given by Maxwell PREMIER FABRICS OF CALIFORNIA, INC 713 union-security clause issue which had separated the parties, the Company withdrew its proposal for an open shop and agreed to the Union's proposal for a union shop In addi- tion, Lerner agreed to the Union's request for a holiday for each employee on his birthday However, Lerner requested that the birthday holiday agreement be put in a separate letter between the parties because he did not want the New Haven office to know about it Maxwell said that Lerner explained that the letter could be attached to the contract between the parties, but Lerner would "detach it when he sent the copies back to the New Haven office " At this session Lerner agreed to a 3-week vacation for the employees, funeral leave, and double-time pay for working 4 hours on December 24 and 31 The Union with- drew its demand for triple-time pay for holidays, overtime pay for lunch periods, and severance pay "because he was saying this wasn't corporate policy also," according to Maxwell The parties compromised on the leave of absence proposals After that the parties again discussed how Ler- ner could pay the employees for their birthdays without letting the New Haven office know about it Ms Mitchell suggested that the Company did not have to send the time- cards to New Haven, and Lerner responded that they would work it like that Then the parties proceeded to go through the entire contract again to see if there was any- thing which had been left open for discussion Nothing appeared to be left open, so Maxwell told Lerner that as far as he was concerned they had reached an agreement Lerner shook his hand and asked Maxwell if he thought that the employees would ratify it with only 10 cents an hour and all the wage openers Maxwell replied that he would take it to the membership and recommend it 100 percent Maxwell said he would explain the Company's loss, the fact that the Company had turned over their books, and they had reached agreement Lerner asked how soon it would be ratified and Maxwell said it would be on Friday of that week at an employee's house Maxwell said that Lerner assured him that as far as he was concerned, they did not change any corporate policy because the Union did not insist on the retirement plan or changing the medical plan which the employees then had, and the Union had agreed on wage reopeners Lerner assured Maxwell that if Lerner made money, the employees would get mon- ey because he had given them raises in the past, and he did not live by corporate policy Maxwell said that Lerner told him, if the employees rat- ified the contract, to prepare all of the material and drop it by just as they had agreed upon, and "he'll send New Ha- ven a copy of the agreement " Maxwell testified that he specifically asked Lerner at that time whether New Haven had to approve the contract and Lerner replied no because they did not get into the areas which were corporate policy concerning retirement plan, jury duty, and Easter Sunday Lerner said that he just wanted to send New Haven some copies Lerner said that as far as he was concerned they had reached an agreement 10 Suzette Mitchell, the alternate union steward who was present at the July 15 meeting, corroborated Maxwell's tes- timony that Lerner told Maxwell that New Haven did not 10 This is the credited version of the fourth meeting given by Maxwell have to approve the contract She recalled that the parties discussed the draft of the contract and the proposals from the Company, including sick leave, vacation, raise in wag- es, funeral leave, and union security She also recalled that Lerner said that there were two matters on which he did not have the authority to bind the Company and those were medical benefits and retirement With regard to the discussion of the union-security clause, she testified that "at first Mr Lerner wasn't so hot on the idea But at the end, at the end of that meeting, everything was agreed upon " Ms Mitchell said that Lerner asked Maxwell to give him a copy of the agreement to send to New Haven so that they could look at it She stated that Maxwell asked Lerner if New Haven would have to approve it and Lerner replied no, that they would not ti Lerner disputed the version given by Maxwell and Ms Mitchell Lerner said that he asked Maxwell for a copy of the agreement and told Maxwell "That I had to send it back to New Haven for their approval " Lerner acknowledged that he had wanted the birthday holiday provision contained in a separate letter addendum to the contract so that it would not be seen by the New Haven office Lerner explained that he wanted to give that benefit to the employees, but he felt that it would not meet with New Haven's approval in view of New Haven' s earlier reaction to Lerner's granting an increase in the amount of vacation and giving sick leave Lerner commented that "it would be like pouring salt on the wound " However, Ler- ner said that he subsequently persuaded Anastasio to agree to giving the birthday holiday Although the agreement on July 15 contained a union- security clause which Lerner had previously opposed, Ler- ner said that he told the Union at that meeting that the contract was acceptable to him Lerner explained the change in his position in this manner I changed my mind because I was faced with a strike vote, and I wanted, above all, to keep the Company running, and I was afraid that they would strike and United Parcel wouldn't be able to bring in shipments and I'd have to close up, and I figured it-I figured it would be better for me to sign an agreement, to okay an agreement here on that basis rather than close the Company Lerner testified that there were some items in the con- tract which he had agreed to, but which he felt New Haven would not agree to Those items included the Company's paying for accrued vacation pay and funeral leave Lerner said that Anastasio had previously instructed him that it was not corporate policy to include anything in a contract whereby the Company would pay employees for hours which were not worked Nevertheless, Lerner said that Anastasio subsequently agreed to those things in conversa- tions between Anastasio and him 11 At a later point in her testimony Ms Mitchell said that she assumed that Anastasio or someone else in New Haven would sign the contract in addition to Lerner However this assumption was based on the fact that there was more than one blank signature line on the contract after the Respondents name She said that there was no discussion as to who would sign for the Company or for the Union 714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On Friday, July 18, 1975, the employees voted to ratify the contract Ms Mitchell informed Lerner of this action on the following Monday During that week of July 21, Maxwell delivered a copy of the agreement to the Com- pany On August 8, 1975, Lerner mailed the contract and the following letter to Joe Anastasio, president of the Respon- dent, at the New Haven office Enclosed is the contract as negotiated between me and the union that I have agreed to The additions or deletions are in ink and have been done in accord with the union Please refer to Appen- dix A, wage rate and classification The credit manag- er is in management and does not apply to this partic- ular contract but since she voted in the election we had to include her in this contract Upon your scrutiny please confirm and I will call in the union to sign the contract I believe that this is a fair contract It took many long hours of patient and hard negotiations to arrive at this contract which I believe is fair and economically feasible for Premier Fabrics of California Sometime later in August, Lerner had a telephone con- versation with Anastasio in which the contract was briefly discussed Lerner said that Anastasio told him of some points that he wanted Lerner to convey to the Union, but since Lerner had previously scheduled a trip back East in the near future, Anastasio said he would go over the con- tract with Lerner when he came in During the last week of August, Maxwell received a tele- phone call from Lerner Maxwell said that Lerner told him that the New Haven office had taken a look at the agree- ment and they would like to know if there was any way possible to add to the union-security clause so that it would be effective from the date of contract signing Maxwell responded that it would not be any problem because he had certification cards for all of the employees at the Com- pany Maxwell said that Lerner then called his attention to some errors which Maxwell had made in the contract con- cerning matters which had been agreed to For example, Maxwell had not put "December 24th split shift, Decem- ber 31st split shift" as the parties had agreed Maxwell re- plied that it was no problem because he knew that those things had been agreed upon Also, Maxwell had not delet- ed the triple-time provision for holiday pay and had made an error in the year for the wage reopener which should have read January 15, 1976, rather than 1975 Then they discussed the credit manager's rate of pay in the contract Maxwell said that the rate of pay would stay in the con- tract, but that if the Company wanted to give the present credit manager the authority to hire and fire employees, then that would take her out of the bargaining unit How- ever, he said since the credit manager had not previously had that authority and had voted in the election, the Union felt obligated to negotiate that wage rate Maxwell said that Lerner replied that it would not pose any problem because Lerner would just not fill that job Maxwell said that would be fine with him Maxwell said that Lerner con- tinued by saying that the agreement looked good as long as they could put in that one item which New Haven had asked Lerner to talk with the Union about-"the date of contract signing on Union security, the rest of the lan- guage stays the same " Maxwell advised Lerner that he would have the proposed agreement ready for signature and that he was leaving on 2 weeks' vacation from the 1st to the 15th of September, but he would call him upon his return He said that Lerner replied, "as far as we're con- cerned, just get the agreement together and come in "12 Lerner made his trip back to New Haven around Sep- tember 15, 1975 At that time he discussed the agreement with Anastasio who, according to Lerner, stated-, That he said that he couldn't agree to the contract and for me to go back and work out without-work out the contract He wanted a tenure of time, a one-year tenure of time in the contract without wage openers, and no Union security clause, maintenance clause With regard to the rest of the agreement, Lerner said that Anastasio advised him that he would accept the bal- ance of the provisions Lerner testified that one of the rea- sons why Anastasio rejected the contract with the wage reopeners in it was because of the bad profit situation at the Los Angeles facility He said that Anastasio wanted a 1-year period of time for wage reopeners The parties met once again on September 25, 1975, at the Company with the same persons present who attended the July 15 meeting According to Maxwell, Lerner asked him why he had passed out the strike pamphlets before the meeting when they had reached agreement Maxwell told Lerner that the members of the Union had met prior to that meeting and Maxwell had told them that he had been trying to contact Lerner since Maxwell's return from vaca- tion The employees informed Maxwell that when he had called for Lerner that Lerner was in the facility, but that Lerner did not want to talk with Maxwell Therefore, Max- well said that was one of the reasons for his having the strike pamphlets distributed Also, Maxwell said that he felt it was time for him to contact the Federal Mediation and Conciliation Service because they had reached an agreement, talked about changes on the telephone which Lerner and the New Haven office wanted and some mis- takes in the contract, and now Maxwell had the corrected agreements ready for signature Maxwell said that Lerner then told him, "We changed our mind, that we're not going to sign the agreement" Maxwell asked why Lerner responded that he did not like the union-security clause, funeral leave, wage reopeners, strike and no-lockout clause, paying employees for having their birthday off, and also he did not have any money to negotiate a contract with that many wage reopeners in it Maxwell said that the Union's proposals had been based on the loss of profits by the Company and that he had gotten clearance from the membership to agree to the wage reopeners which the Company had wanted Lerner replied, "Well, I don't like it I've changed my mind " 12 Lerner did not go into detail regarding this conversation in his testimo- ny Instead, he said that he did discuss with Maxwell those things which Anastasio had mentioned to him during the period of time after his conver- sation with Anastasio and before he went back East PREMIER FABRICS OF CALIFORNIA, INC In addition, Maxwell said that before the meeting con- cluded on September 25 that Lerner told him that he should go out and talk with the employees Lerner said that he had talked with them and that they did not want a union in the plant Maxwell replied that they must be tell- ing Lerner one thing and telling Maxwell something differ- ent because Lerner kept "riding their back about the Union " Maxwell said that the Union was obligated to ne- gotiate because of its certification and he was not going out there and ask the employees whether they wanted a union Maxwell said that there had been a bargaining unit meet- ing just a few days prior to that day's meeting and the employees were still upset about the wage rate Therefore, Maxwell said that he was certain that the employees still wanted a union in the plant Maxwell said that Lerner told him, "Well, as far as we're concerned, we're not going to sign the agreement "13 Suzette Mitchell, who was also present at the September 25 meeting, testified that Maxwell asked Lerner at the meeting if he was ready to sign a contract She said that Lerner replied that there were a couple of points that he wanted to go back over and those points were the strike and lockout clause and the clause stating that an employee would have to join the Union after 30 days Lerner said that he did not want those clauses in the contract Maxwell said that the two clauses had to be in the contract because they were part of the agreement Lerner said that he did not want to agree to a contract with those two clauses Maxwell then asked whether he could presume that they were at an impasse and Lerner said yes, if those two claus- es stay in there Lerner testified that at the September 25 meeting he ad- vised Maxwell that New Haven did not agree on having wage openers and that they wanted some tenure of time Lerner said that he could not have a union maintenance clause He said that he told Maxwell that except for those provisions, the contract was acceptable The final conversation between the parties concerning the contract took place on October 1, 1975 14 At that time Maxwell telephoned Lerner and asked him if he had changed his mind about signing the agreement Maxwell told him that they had an agreement before the ratifica- tion, that Lerner had assured him and shaken hands with him that they had reached an agreement Maxwell asked him what was the problem Lerner replied that he was not going to sign the agreement with those articles in there involving no-strike and lockout, funeral leave, and union security Lerner reiterated that he had changed his mind and that he was not going to sign it E Analysis and Conclusion Based on the credited testimony of Maxwell, I conclude that the Respondent and the Union reached a final and binding agreement on a collective-bargaining contract dur- ing the telephone conversation between Lerner and Max- well during the last week of August 1975 The parties had 13 The preceding account is based on the credited testimony of Maxwell j4 Lerner did not testify with respect to an October 1 telephone conversa- tion with Maxwell 715 reached earlier agreement on a contract during the bar- gaining session held on July 15, 1975 That fact is really not in dispute as is demonstrated by Lerner's letter dated Au- gust 8, 1975, to Anastasio However, after mailing a copy of the agreement to Anastasio and talking with him by telephone, Lerner asked the Union to make one minor change in their previous agreement That change con- cerned only the effective date of the union-security clause The Union readily agreed to that change In addition, Ler- ner called Maxwell's attention to certain errors in the docu- ment which Maxwell had previously prepared Maxwell immediately acknowledged the errors and agreed to correct them Thus, during that telephone conversation during the last week of August 1975, all matters were fully and finally resolved between the Respondent and the Union All that remained was the preparation of a corrected document by the Union and for both parties to sign the corrected docu- ment The corrected document was subsequently drafted by Maxwell When the parties met on September 25, 1975, Lerner said that he had "changed my mind" and refused to execute the contract Lerner reaffirmed his refusal to sign the agreement in the subsequent telephone conversation between Maxwell and him on October 1, 1975 A refusal by an employer to execute an agreed-upon col- lective-bargaining agreement is violative of Section 8(a)(1) and (5) of the Act 15 Here the Employer clothed Lerner with the authority to negotiate a contract with the Union, but when Lerner had successfully done so, the home office in New Haven did not agree with what its officer and agent had done In effect, New Haven decided to "second guess" their negotiator who had agreed to a complete contract Apparently, Lerner was more amenable to concluding an agreement with the Union and more generous in agreeing to certain benefits than New Haven would have liked This is shown by Lerner's testimony about his desire to avoid a strike which he felt would cause the operation of the plant to be closed down Also, it is shown by the fact that Lerner agreed to giving the employees a holiday on their birthday, but he wanted to keep that fact from New Haven since he believed that New Haven would not be pleased with his giving that benefit At the start of the negotiations in May, Lerner only stat- ed two specific items which required approval by New Ha- ven because they were covered by corporate policy Those were retirement and medical plans Based on the credited testimony of Maxwell, I have concluded that Lerner did not inform the Union at that time, or at any other time, that any agreement reached with the Union would be sub- ject to final approval by New Haven At the July 15 meet- ing after the parties had reached agreement, Maxwell spe- cifically asked Lerner whether New Haven had to approve the agreement That question was occasioned by Lerner's request for copies of the agreement According to the cred- ited testimony of Maxwell and Ms Mitchell, Lerner affir- matively told the Union that New Haven did not have to approve the contract In view of this, I conclude that Ler- 15 H J Heinz Co v N L R B, 311 U S 514 (1941), Lozano Enterprises v N L R B 327 F 2d 814 (C A 9, 1964), N L R B v Industrial Wire Products Corporation, 455 F 2d 673 (C A 9 1972) 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ner had the authority to negotiate a final agreement on behalf of the Respondent and so indicated to the Union It was only later after a complete agreement had been reached that New Haven reneged on what Lerner had pre- viously agreed to with the Union In these circumstances, I find and conclude that the Re- spondent violated Section 8(a)(1) and (5) of the Act by refusing on or about September 25, 1975, to execute the collective-bargaining agreement which it had agreed to during the last week of August 1975 H J Heinz Co v NLRB , supra, Squire Shops, Inc, 218 NLRB 158 (1975), Lytron, Incorporated, 207 NLRB 554 (1973), Trade Mart, Inc, 204 NLRB 1 (1973) IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with the operations de- scribed in section I, above, have a close, intimate, and sub- stantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce Upon the basis of the foregoing findings of fact and upon the entire record, I make the following CONCLUSIONS OF LAW 1 Premier Fabrics of California, Inc, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act 2 Oil, Chemical & Atomic Workers International Union, AFL-CIO, Local 1-128, is a labor organization within the meaning of Section 2(5) of the Act 3 The following employees constitute a unit appropriate for the purposes of collective bargaining within the mean- ing of Section 9(b) of the Act All office clerical employees, including all credit de- partment employees and all order department employ- ees employed by Respondent at its 2323 South Grand Avenue, Los Angeles, California, facility, excluding all other employees, including all warehouse employ- ees, shipping and receiving employees, cutters, sample makers, outside salesmen, professional employees, guards, and supervisors as defined in the Act 4 At all times material herein, the Union has been and is the exclusive representative of all employees in the above-described appropriate unit for the purposes of col- lective bargaining 5 By refusing since on or about September 25, 1975, to execute the agreed-upon collective-bargaining agreement and to give effect to the terms and provisions of that agree- ment between the Respondent and the Union, Respondent has refused to bargain collectively with the Union and has engaged in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act 6 The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act THE REMEDY Having found that the Respondent has engaged in unfair labor practices in violation of Section 8(a)(1) and (5) of the Act, I shall recommend that it be ordered to cease and desist therefrom and that it take certain affirmative action to effectuate the policies of the Act Having found that Respondent has refused since on or about September 25, 1975 to execute the contract which was agreed upon by the Respondent and the Union during the last week of August 1975, I shall recommend that Re- spondent be required to execute that agreement forthwith and to give effect to the terms and provisions of that agree- ment retroactively to September 25, 1975 I shall further recommend that Respondent make whole its employees for their loss of wages and other benefits, which are provided for in the agreement, for the period on and after September 25, 1975, due to the Respondent's failure to give effect to the terms of the contract agreed upon with the Union 16 I shall also recommend that 6-percent interest per annum be added to any moneys The reason I have designated September 25, 1975, as the date on which to commence retroactive application of the contract is that is the date on which Respondent refused to execute the final corrected agreement The agreement it- self, which was introduced in evidence at the hearing as General Counsel's Exhibit 6, does not contain an effective date for the contract to commence The effective date was left blank and the record does not disclose whether the parties had agreed upon any effective date other than the date of execution of the agreement The termination date of the agreement is specified as January 15, 1977 In these circumstances, I have designated September 25, 1975, as the date that the agreement would have become effective but for the Respondent's unfair labor practices Finally, I shall recommend that the Respondent bargain, upon request, with the Union as the exclusive representa- tive of the employees in the above-described unit Upon the basis of the foregoing findings of fact, conclu- sions of law, and the entire record in this proceeding, and pursuant to the provisions of Section 10(c) of the Act, I hereby issue the following recommended ORDER17 The Respondent, Premier Fabrics of California, Inc, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Refusing to bargain collectively regarding rates of pay, wages, hours, and other terms and conditions of em- ployment with Oil, Chemical & Atomic Workers Interna- tional Union, AFL-CIO, Local 1-128, as the exclusive bar- gaining representative of the employees in the following 16 N L R B v Huttig Sash & Door Company, 362 F 2d 217 (C A 9, 1966) 17 In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board the findings conclusions and recommended Order herein shall, as provided in Sec 10248 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 PREMIER FABRICS OF CALIFORNIA, INC unit found to be appropriate for the purposes of collective bargaining All office clerical employees, including all credit de- partment employees and all order department employ- ees employed by Respondent at its 2323 South Grand Avenue, Los Angeles, California, facility, excluding all other employees, including all warehouse employ- ees, shipping and receiving employees, cutters, sample makers, outside salesmen, professional employees, guards, and supervisors as defined in the Act (b) Refusing to execute the collective-bargaining agree- ment with the Union which was agreed upon during the last week of August 1975, and which Respondent refused to sign on or about September 25, 1975 (c) Failing and refusing to give effect to the terms and provisions of the agreed-upon collective-bargaining agree- ment with the Union (d) In any like or related manner interfering with, re- straining, or coercing its employees in the exercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action which is neces- sary to effectuate the policies of the Act (a) Execute forthwith the collective-bargaining agree- ment with the Union which was agreed upon during the last week of August 1975, and which Respondent refused to sign on or about September 25, 1975 (b) Give effect to the terms and provisions of that col- lective-bargaining agreement retroactively to September 25, 1975 (c) Make whole its employees for their loss of wages and other benefits, which are provided for in the agreement, for the period on and after September 25, 1975, plus 6-percent interest per annum thereon (d) Bargain, upon request, with the above-named Union as the exclusive representative of all employees in the ap- propriate unit described above with respect to rates of pay, wages, hours, and other terms and conditions of employ- ment and, if an understanding is reached, embody such understanding in a signed agreement (e) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security records, timecards, personnel records and reports, and all other records necessary to ana- lyze the amounts of moneys due under the terms of this Order (f) Post at its Los Angeles, California, facility, copies of the attached notice marked "Appendix" 18 Copies of the notice on forms provided by the Regional Director for Re- gion 21, after being duly signed by an authorized represen- tative of the Respondent, shall be posted by the Respon- dent immediately upon receipt thereof, and be maintained 18 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading Posted by Order of the National Labor Relations Board' shall read Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " 717 by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, de- faced or covered by any other material (g) Notify the Regional Director for Region 21, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all parties had the opportunity to present evidence, the National Labor Relations Board found that we violated the National Labor Relations Act and has ordered us to post this notice WE WILL sign forthwith the collective-bargaining agreement with Oil, Chemical & Atomic Workers In- ternational Union, AFL-CIO, Local 1-128, which was agreed upon during the last week of August 1975 and which we refused to sign on or about September 25, 1975, and which covers our employees in the following appropriate bargaining unit All office clerical employees, including all credit de- partment employees and all order department em- ployees employed by the Employer at our 2323 South Grand Avenue, Los Angeles, California, fa- cility, excluding all other employees, including all warehouse employees, shipping and receiving em- ployees, cutters, sample makers, outside salesmen, professional employees, guards, and supervisors as defined in the Act WE WILL give effect to the terms and provisions of the collective-bargaining agreement referred to above retroactively to September 25, 1975 WE WILL make whole our employees in the bargain- ing unit described above for their loss of wages and other benefits, which were provided for in the agree- ment, for the period on and after September 25, 1975, plus 6-percent interest per year thereon WE WILL bargain, upon request, with Oil, Chemical & Atomic Workers International Union, AFL-CIO, Local 1-128, as the exclusive representative of all em- ployees in the appropriate unit described above with respect to rates of pay, wages, hours, and other terms and conditions of employment and, if an under- standing is reached, embody such understanding in a signed agreement WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act PREMIER FABRICS OF CALIFORNIA, INC