Taylor-Winfield Corp.

TAYLOR-WINFIELD CORP. 457 Taylor-Winfield Corporation and United Steelworkers of America, Local Union 8337, AFL-CIO-CLC. Case 8-CA-9195 June 30, 1976 DECISION AND ORDER BY MEMBERS JENKINS, PENELLO, AND WALTHER On April 30, 1976, Administrative Law Judge Al- vin Lieberman issued the attached Decision in this proceeding. Thereafter, the General Counsel filed ex- ceptions and a supporting brief, and the Respondent filed an answering 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 briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER 1. Did respondent violate Section 8(a)(5) of the Act by, in bad faith, offering the United Steelworkers of America, Local Union 8337, AFL-CIO-CLC (Union), a pension plan having less value with respect to employee retirement income than the pension plan then in effect? 2. Did respondent and the Union bargain with each other to an impasse? 3. Assuming an affirmative answer to the foregoing question, did respondent violate Section 8(a)(5) of the Act by unilaterally changing its employees ' terms and condi- tions of employment? Upon the entire record 4 upon my observation of the witnesses and their demeanor while testifying, and having taken into account the briefs submitted by the General Counsel and respondent 5 and the arguments made by the parties,6 I make the following: FINDINGS OF FACT 7 1. JURISDICTION Respondent, an Ohio corporation, is engaged at Warren, Ohio, in the manufacture of welding equipment. Respon- dent annually ships goods valued at more than $50,000 to customers located outside the State of Ohio. Accordingly, I find that respondent is engaged in commerce within the meaning of the Act and that the assertion of jurisdiction over this matter by the National Labor Relations Board (Board) is warranted. 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 complaint be, and it hereby is, dis- missed in its entirety. DECISION STATEMENT OF THE CASE ALVIN LIEBERMAN, Administrative Law Judge: The hear- ing in this proceeding, with all parties represented, was held before me in Warren, Ohio, on several days between November 18 and December 3, 1975, upon the General Counsel's complaint I dated September 3, 1975,2 and respondent's answer. In general, the issue litigated was whether respondent violated Section 8(a)(5) of the Nation- al Labor Relations Act, as amended (Act) .3 More particu- larly, the questions for decision are as follows: i During the hearing the complaint was amended by substituting the fol- lowing paragraph for par 11(d)• "Commencing on or about April I i, 1975, and continuing thereafter, Respondent has offered to the Union a pension benefit plan having considerably less value with respect to employee retire- ment income than the pension benefit plan then applicable to the employees in the collective bargaining unit described above in paragraph 6, and there- by refused to bargain collectively and is refusing to bargain collectively with the representatives of its employees, and thereby did engage in and is engag- ing in unfair labor practices within the meaning of Section 8(a)(5) of the Act ' 2 The complaint was issued pursuant to a charge filed on May 23, 1975 11. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of the Act. III. INTRODUCTION Briefly, this case is concerned with events related to bar- gaining between respondent and the Union. Among these were respondent's claimed bad faith offer to the Union of a pension plan stated in the complaint as being less valu- able respecting employee retirement income than the pen- sion plan then in effect,8 and respondent's unilateral 3 In pertinent part Sec 8(a)(5) of the Act provides Sec 8(a) It shall be an unfair labor practice for an employer- (5) ♦ ♦ to refuse to bargain collectively with the representatives of his employees, Issued simultaneously is a separate order correcting obvious errors in the stenographic transcript of the trial in this proceeding included in this order are corrections sought by respondent in a motion to correct the re- cord [Order omitted from publication ] 5 Although represented by counsel, the charging party did not file a brief 6 Although all the arguments of the parties and the authorities cited by them, whether made orally at the hearing or appearing in the briefs of the General Counsel and respondent, may not be discussed in this Decision each has been carefully weighed and considered 3 Respondent's motion made at the conclusion of the hearing, upon which I reserved decision, is disposed of in accordance with the findings and con- clusions set forth in this Decision 8 At the hearing this pension plan was frequently referred to as the "pre- sent pension plan" and it will be similarly referred to in this Decision 225 NLRB No. 60 458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD changes in terms and conditions of employment . The fore- C. The Present Pension Plan going, the General Counsel contends, constituted viola- tions of Section 8(a)(5) of the Act. Respondent denies that the pension plan it offered the Union had less value in terms of employee retirement in- come than the present plan. Admitting its unilateral changes in its employees' terms and conditions of employ- ment, respondent argues that it was privileged in making the changes because an impasse had been reached in its bargaining with the Union. IV. PRELIMINARY FINDINGS AND CONCLUSIONSI0 A. The Union's Certification In July 1974, the Union filed a representation petition. On September 9, 1974, after prevailing at an election held on its petition , the Union was certified as the bargaining agent of respondent's employees in a unit described in the complaint as consisting of "all office clerical and technical employees." 11 B The Merit Review System Before the Union filed its representation petition respon- dent maintained in effect a merit review system pursuant to which an employee progressed from the minimum to the maximum rate of pay for his position. While the system was in operation an employee's work was reviewed and evaluated each year on about his employment anniversary date. If deemed warranted as a result of this review, the employee received a merit increase in wages. In this man- ner the employee moved from the lowest rate to the top rate established for his job. Upon the filing of the Union's representation petition respondent stopped granting merit increases. However, the merit review system was not abandoned. As Nicholas Pernice, respondent's personnel manager, testified con- cerning this, "the merit reviews were continued [up to the point . . . of actually making the merit increase effective] during the period when the system was not operating." Because of the suspension of the granting of merit in- creases the wages of respondent's employees were not raised between July 1974 and April 14, 1975,12 when, as will be shown, they received a $50-a month increase.13 9 Notwithstanding that the Union submitted no brief , it became apparent during the hearing that its contentions concerning the issues in this case are similar to the General Counsel's Accordingly, the contentions of the Gener- al Counsel and the Union will bejointly referred to hereinafter as the Gen- eral Counsel's contentions 10 The purpose of these findings and conclusions is to furnish a frame of reference within which to consider the facts relating to respondent's alleged unfair labor practices To the extent that the contentions of the parties relate to the findings and conclusions made here they will be treated here, al- though they, as well as the findings and conclusions , may again be consid- ered in other contexts 11 All subsequent mention of "employees" in this Decision without fur- ther designation will have reference to the employees in this unit 12 All dates hereinafter mentioned without stating a year fall within 1975 13 The wage increase granted by respondent on April 14 is alleged in the complaint as being one of the violative unilateral changes made by respon- dent Also alleged in the complaint as a violative unilateral change is respondent's reinstitution on the same day, as will appear below, of the merit review system For many years respondent's employees have been cov- ered by a voluntary contributory pension plan, the salient features of which are as follows: 1. Employees who desire to participate in the plan con- tribute 2 percent of the first $7,800 of their annual salary and 4 percent of the excess. 2. For each year of service a participating employee ac- crues as a retirement benefit 1 percent of the first $7,800 of his annual salary and 1.8 percent of the excess. Upon retir- ing the employee receives as his monthly retirement benefit the sum of each year's accrual divided by 12. 3. Vesting occurs at age 45 after 15 years of service. 4. A participating employee may retire at age 65. If he continues to work beyond age 65, he accrues no additional retirement benefits. 5. A participating employee retiring because of disabili- ty must wait 12 months before receiving retirement bene- fits. D. The Bargaining 14 Between November 6, 1974, and April 11, 1975, inclu- sive, respondent and the Union met for the purpose of bargaining 18 times without arriving at a contract. Not- withstanding this, there is no contention by the General Counsel, except with regard to pensions, that respondent bargained in bad faith. Even in this area the General Counsel does not argue that respondent engaged in general bad-faith bargaining. As he stated at the hearing, respondent's absence of good faith in its negotiations over pensions consisted only of offering "a pension system that would pay out less benefits than the existing pension sys- tem" 15 The Union's chief negotiators were Vernon Boyer and Thomas Clancy, representatives of the United Steelworkers of America (USW), the Union's parent body. Among the other negotiators for the Union were Leroy Conklin and Phillip Guerra, respectively its president and vice presi- dent. The principal negotiator for respondent was Nicholas Pernice, its personnel manager, who has had much experi- ence in negotiating collective-bargaining agreements, hav- ing been so engaged on behalf of respondent and other employers since about 1964. At the conclusion of each bargaining session, except that of April 11, the parties either agreed upon the date of the next meeting or agreed upon a definite method for fixing that date. Although the parties met many times, not every meeting was eventful. The critical meetings were those held on No- vember 6 and 26, 1974, January 30, March 12 and 25, and April 1, 2, 8, and 11. 14 As noted, one of the issues in this case is whether, as contended by respondent, its bargaining with the Union resulted in an impasse fs In accordance with this argument the General Co„nscl , as set forth earlier, amended the complaint to allege that respondent violated Sec 8(a)(5) of the Act by offering the Union "a pension benefit plan having considerably less value with respect to employee retirement income than the [present] pension plan " Whether this was in fact the case will be con- sidered later TAYLOR-WINFIELD CORP. 459 At the meeting of November 6, 1974, the first bargaining session, the Union presented for respondent's review a draft of a proposed contract 16 which included a provision, section 2B, captioned "Local Working Condition," recit- ing in pertinent part, "Practices and/or customs, written or oral, which provide benefits that are in excess of or in addi- tion to the benefits established by this Agreement shall re- main in effect for the term of this Agreement." 17 The Union's draft contained no details as to rates of pay, nor did it contain a pension plan. The parties next met on November 26, 1974. By the close of this meeting, as Boyer, a chief negotiator for the Union, testified, the Union and respondent were in agreement on "at least 85 percent of the contract language ... in all sections of the contract other than economics." On January 30 the Union presented its pension plan, the principal provisions of which follow: 1. All employees would be covered on a noncontributo- ry basis. 2. Retirement income would be computed in accor- dance with the formula set forth in the present plan, pro- vided that the pension to be received by any retiree would not be less than an amount calculated on the basis of $12 a month for each year of service. The Union's rationale for proposing these alternative benefit formulas was that the longer service, higher salaried employees would fare better under the former than they would under the latter, whereas the reverse would be true regarding lower salaried employ- ees with relatively short periods of service. 3. Disability pensions on the basis of $12 a month for each year of service would be payable after 5 months from the date of disablement, provided an employee had 10 years of service. 4. Employees would be eligible for early retirement after 10 years of service. 5. Vesting would occur after 10 years of service. 6. Employees' contributions to the present plan would be returned upon termination of employment with interest computed at a rate of 5 percent a year. 7. Employees remaining at work beyond age 65 would continue to accrue retirement benefits. At the meeting of March 12 respondent made its first proposal on wages and presented a counterproposal as to pensions. Included in respondent's wage proposal was a provision for a merit review system similar to that then in effect. This was rejected by the Union. The pension plan offered by respondent at this meeting provided, as the Union's did, that it would cover all em- ployees and that it would be noncontributory. It differed from the Union's proposal in several significant areas, in- cluding the pension benefit formula and the interest rate payable on the return of employees' contributions to the present plan. Concerning the latter, respondent proposed that the in- terest rate be 3 percent a year, whereas the Union had proposed 5 percent a year. Regarding the former, instead of the alternative formulas sought by the Union respon- dent proposed as a substitute, a single formula which, un- like that contained in the present plan, would furnish re- tirement income to all retirees figured on the basis of $10 a month for each year of service.) At the meeting of March 25 respondent presented its second wage offer. This, like its predecessor, also made provision for a merit review system. Unlike the former pro- posal, however, it contemplated an automatic progression from the minimum to the midpoint of the rate range for the position involved. Thereafter, wage increases were to be on a merit basis. As was the case with the first merit review system proposed by respondent, this, too, was rejected by the Union. During the meeting held on April 1, respondent made its third wage proposal. Because the Union had twice previ- ously rejected a merit review system no mention of such a system appeared in this proposal. However, in the discus- sion attendant upon respondent's wage offer respondent's negotiators again recommended a system for merit review and the Union once more voiced its rejection. On April 2 respondent presented its fourth wage propos- al to the Union 19 which, like its third, and for the same reason, contained no reference to a merit review system. At this meeting in addition to a discussion of wages there was bargaining on pensions resulting in agreement on several important points. Thus, the parties agreed that disability pensions be pay- able after 6 months from the date of disablement, provided the employee concerned had 15 years of service; that the interest rate on the return of employee contributions to the present plan be computed at the rate of 3 percent a year; that pensions vest after 10 years of service; that employees remaining at work beyond age 65 would continue to accrue retirement benefits; and that early retirement could take place at age 55 after 15 years of service. The foregoing agreements resulted from compromises made during the course of give-and-take bargaining. There were also changes in position but not agreement, on other facets of the parties' pension proposals. Among these was the Union's suggestion that the present pension plan be continued with modifications as to the contribu- tion formula, provided that the minimum pension to be paid to any retiree be computed on the basis of $10 a month for each year of service.20 At the April 8 bargaining session there was discussion on the Union's 2B proposal. Being unwilling to agree to the inclusive past practice provision in the form presented by the Union on November 26, 1974,21 respondent requested, 18 As aptly stated in respondent's brief "this difference in pension benefit proposals would prove to be a steel wall for the parties " And, as will be seen, it was one of the principal issues, if not the principal issue, over which barpining ultimately foundered 1 Each of respondent's successive wage proposals brought the parties closer to agreement in this area of negotiations 20 It will be remembered that the Union originally sought a noncontribu- tory pension plan calling for a minimum pension calculated at the rate of $12 a month for each year of service and that respondent countered with an offer, on which it stood throughout the negotiations, of a plan, also noncon- tributory, but providing that the monthly income to all retirees be calculated 16 G C Exh 9 by multiplying the number of years of service by 10 17 There was much bargaining over this matter, which was referred to at 21 Although earlier set forth, the Union's 2B proposal is repeated here for the hearing, and will at times be referred to in this Decision, as the 2B or ready reference Captioned "Local Working Conditions," it provided, inso- past practice issue Continued 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as it had done many times before without success, that the Union list the specific practices to which it made reference. It was equally unsuccessful on this occasion. In this regard, at no time through the meeting of April II did the Union furnish respondent with such a list By the end of the April 8 bargaining session the parties had agreed upon virtually all items, except those relating to economics, customarily found in collective-bargaining con- tracts. Thus, agreement had been reached on, among other things, union security, checkoff, grievance adjustment ma- chinery, hours of work and scheduling holidays, vacations, seniority, safety and health, and sick leave. The parties were still apart on the 2B issue, wage rates, and pensions. The April 11 meeting was a long one, starting at 10 a.m. and ending at 7 p.m. Unlike previous bargaining sessions it was, as characterized by Pernice, respondent's principal negotiator, "a highly charged, emotional meeting where a lot of tempers flew." The discussion during the early part of the meeting relat- ed to wages and the 2B matter. Concerning the former, respondent made an offer, some parts of which were ac- cepted by the Union. Respondent's wage offer, its highest to this date, considered as a whole, would have resulted in a salary increase of about $52 a month.22 Regarding the 2B issue, the Union substituted for its original proposal one purporting to define the term "Local Working Conditions" and providing that "such ... work- ing practices as agreed to shall be continued and appear in an appendix of this agreement." At the same time, as Clan- cy, a principal negotiator for the Union, testified, he under- took to "submit at the next meeting a list of the practices that the [Union] wanted to include [in the appendix] " The parties' attention then turned to pensions. This was the last item taken up on April 11. It consumed most of the meeting's bargaining time and much heat was generated while the subject was on the table. At the outset both parties stood on their previous pen- sion proposals As the session wore on without any move- ment by either party the Union's negotiating committee caucused. At their caucus the Union's bargainers decided, as Clancy testified, to "propose to the Company without any modification, without any minimum, the present pen- sion plan as is." Upon the resumption of bargaining, the Union's negoti- ators, in accordance with their decision at caucus, pro- posed that the present pension plan be continued without change. During the ensuing lengthy discussion the Union made it clear, as Clancy recounted, that "the present pen- sion plan is a must." With equal adamancy Pernice, respondent's chief negotiator stated, as Clancy further tes- tified, that respondent's "pension position ... was the same as [it was on] April 2." When it became apparent that respondent was unwilling to move in the pension area in the direction sought by the far as relevant, that "Practices and/or customs, written or oral, which pro- vide benefits that are in excess of or in addition to the benefits established by this Agreement shall remain in effect for the term of this Agreement" 22 Guerra, the Union's vice president and one of its negotiators, testified that this wage offer amounted to an increase of between $52 and $54 a month Pernice stated that it constituted an increase of $51 90 a month Union; i.e., the continuation of the present pension plan, characterized by Clancy, as noted above, as a "must," Boy- er, the Union's other principal negotiator, announced to Pernice, as the former testified, "when the Company has something further to offer, call us." On this note of finality the April 11 meeting closed. In view of the contention by respondent that its bargain- ing with the Union ended in an impasse, it is pertinent to note the "understanding" of the negotiators on both sides of the table "as to the state of negotiations" at the conclu- sion of the April 11 meeting.23 In this regard Pernice, respondent's chief negotiator, made the following state- ments at various times during his lengthy testimony not only as a witness for respondent, but also as a witness for the General Counsel. 1. "I was very definitely and positively of the opinion that we reached a stalemate . . . because of the position the Union had taken in three consecutive meetings, the second, the eighth, and the eleventh [of April]; and like I said, the eleventh was a highly and emotionally charged meeting. [I]t was very obvious that we were not making any progress whatsoever. [The Union was] adamantly sticking to [its] position [on] the pension plan and the 2-B areas. The Company was also." 2. "[I felt] an impasse had been reached at that .. . meeting . . . for one thing by the unusual manner in which it was adjourned by Mr. Boyer [a principal negotiator for the Union] standing up and saying `If you have anything further to offer, call me.' That was a very unusual situation. We always sat down and made some arrangements to set up a further meeting." 3. "It was obvious that the parties were not moving in the pension or the 2B area. We were not moving from our position and the Union was not moving from [its] position. If that isn't a stalemate, then I don't know from my expen- ence what is a stalemate." 4. "We had been discussing back and forth across the table in a highly emotional atmosphere the pension propos- al, what the Union wanted and what the Company was willing to do, and what [it] was not willing to do; and each party kept insisting on their positions. The Union kept in- sisting on the present pension plan, and the Company said, `We are not going to give you the present pension plan.' After you repeat that a dozen times, tempers flare, and they did. You can't sit there hour after hour. The Union said `No' and the Company said `Yes' and vice versa. While this was going on [, Boyer,] the staff representative of the Steelworkers Union stood up and said `If you have got anything further to offer, call me.' If that is not a stale- mate, then in my experience I don't know what a stalemate is. We weren't budging, and the Union wasn't budging." 5. "[A]t the conclusion of that meeting [I] felt [absolute- ly] that an impasse had been reached." Conklin and Guerra, respectively the president and vice president of the Union and also members of its negotiating committee, likewise testified concerning their "under- standing . . . as to the state of negotiations" at the end of the April 11 meeting. In this regard, Conklin stated: 23 Taft Broadcasting Co, WDAFAM-FM TV, 163 NLRB 475, 478 ( 1967), affd 395 F 2d 622 (C A D C, 1968) TAYLOR-WINFIELD CORP. 461 1. "[On] pensions . . . we were very far apart on what the Union was asking for, and what the Company was offering." 2. "[W]e were very much in disagreement, particularly on pensions . . . . I was wondering where do we go from here, because I felt we were . . . at odds with the pension plan to the point where we didn't know where we were going to go. We weren't going to make any progress talking to each other." 3. "I felt that . . . the union and the company were far apart and, in fact, we had reached an impasse." 4. "[T]here appeared to be no hope [that the company would offer the present plan, and the union was not pre- pared to accept the plan as it had been offered by the company.] As near as I could discern [the company was fixed . . . on the proposed plan and the union was fixed on its position that it would not accept what the company had offered.]" 5. "I felt [regarding pensions the company's position was fixed and] I felt we [the Union] had gone as far as we could." Concerning the matter here under discussion Guerra gave the following testimony: 1. "[T]he pension area was the one area we felt we had to come to an agreement on to get a contract, and that was the one area that we were just miles apart on." 2. "[B]oth sides were . . . holding fast as to what they were after [on pensions]." 3. "At the conclusion of the ... meeting, the Company had made a statement that [it] had gone as far as [it] could with what was offered, and we [the Union] were standing fast." 4. "I got no indication [that the Company . . . would move at all on the formula of $10 per month] . . . . I think it was made clear [that the Union would not accept the Company's offer on the pension benefit]." Also bearing on the issue of whether the parties had reached an impasse in their bargaining on pensions are statements made at the hearing by Boyer and Clancy, the Union's principal bargainers. Thus, Boyer testified that the Union was not "on April 11 ... or at any time prior to the filing of the charge, willing to agree to the pension benefit formula which had been suggested . . . and offered by the Company." In like vein, Clancy said that "the Union was [not] on April 11, 1975, willing to accept the pension pro- posal that the Company had offered." As I have already several times mentioned, respondent argues that the parties had reached an impasse in bargain- ing on at least two issues. These respondent states, on brief, were "the pension benefit formula and . . . the past prac- tice clause or `2-B' clause." "Whether a bargaining impasse exists is a matter ' of judgment. The bargaining history, the good faith of the parties in negotiations, the length of the negotiations, the importance of the issue or issues as to which there is dis- agreement, the contemporaneous understanding of the par- ties as to the state of the negotiations are all relevant fac- tors to be considered in deciding whether an impasse in bargaining existed." Taft Broadcasting Co., etc., 163 NLRB 475, 478, affd. 395 F.2d 622 (C.A.D.C., 1968). Regarding the first "relevant factor" mentioned by the Board in Taft-"bargaining history"-there is none be- tween respondent and the Union. To the extent disclosed by the record, neither the Union nor any other labor orga- nization ever in the past bargained with respondent on be- half of the employees here concerned; namely, respon- dent's office clerical and technical employees. For such value as it might have insofar as respondent's bargaining history is concerned, I note that for many years a sister local of the Union has represented respondent's production and maintenance employees and, as Boyer, a representa- tive of USW, testified, that union has had "a good working relationship with [respondent]." "[T]he good faith of the parties in negotiations" is the second "relevant factor" mentioned in Taft. As to this, there is no contention by the General Counsel, except re- specting pensions, that respondent bargained in bad faith. Even in this area, as earlier set forth, the General Counsel does not claim that respondent bargained generally in bad faith. Respondent's bad-faith bargaining regarding pen- sions, the General Counsel asserted at trial in accordance with his complaint, as amended, consisted only of offering to the Union "a pension system that would pay out less benefits than the existing pension system." As will be shown below, however, this argument is not supported by the evidence. I find, therefore, that respondent did bargain with the Union in good faith. The next "relevant factor" to be considered is the "length of the negotiations." In this regard, the negotia- tions between the parties, although not resulting in agree- ment upon a contract, encompassed a period of more than 5 months during which time the parties met and bargained 18 times. It is apparent, in view of this, that the bargaining was sufficiently lengthy to satisfy the "relevant factor" here under consideration. The fourth "relevant factor" stated in Taft is "the impor- tance of the issue or issues as to which there is dis- agreement." That the pension issue over which the parties disagreed is an important issue can not be gainsaid. The final "relevant factor," explicated in Taft to be used as a guidepost in determining whether an impasse arose during the parties' bargaining on April 11, is "the contem- poraneous understanding of the parties as to the state of the negotiations." As I have pointed out above, it was the "understanding" of negotiators on both sides of the table that on April 11 respondent and the Union had, in fact, arrived at the point of irreconcilable disagreement on the pension issue. Accordingly, I conclude that the parties, on April 11, had reached an impasse in their bargaining on the issue of pensions.24 In reaching the foregoing conclusion I have also taken into account the atypical manner in which the April 11 bargaining session ended. At the close of each of the previ- ous 17 meetings the parties agreed upon the date for the following meeting or upon a definite method for fixing that date. This was not done on April 11. Instead, after a long, 24 This being the case, it is unnecessary to decide whether the parties were also at an impasse on the 2B issue , for "a deadlock as still a deadlock whether produced by one or a number of significant and unresolved differ- ences in positions" Taft Broadcasting Co, supra at 478 462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD emotional, highly charged discussion on pensions Boyer, a principal negotiator for the Union, brought the meeting to an end by standing up and proclaiming to respondent's bargaining agents that they should inform the Union when respondent had "something further to offer." No other meeting having ended on such a note of finality, it is, in my opinion, another and important "relevant factor" in de- termining that the parties had stalemated in their pension negotiations. V. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts, Contentions, and Conclusions Concerning Respondent's Alleged Violations of Section 8(a)(5) of the Act by Its Pension Plan Offer As noted,25 the complaint, as amended, alleges that re- spondent violated Section 8(a)(5) of the Act by offering the Union "a pension benefit plan having considerably less value with respect to employee retirement income than the pension benefit plan then applicable to the employees in the collective bargaining unit." The General Counsel con- tends that respondent was motivated by bad faith in mak- ing this offer. It will be demonstrated that the evidence does not show that the pension plan offered by respondent, to which the allegation makes reference, in fact had "less value with respect to employee retirement income" than the present plan. The absence of evidence to support the allegation obviates an inquiry into respondent's motive in offering the plan. It is undisputed that, as testified by Frederick Bass, whose expertise as a pension actuary was abundantly es- tablished, "70 percent of [the people ... presently enrolled in the pension plan] would have earned greater benefits under [respondent's] proposed plan than they would have earned under the present plan." The employees falling within the remaining 30 percent, those having longer periods of service and earning higher salaries than the other 70 percent, would have received a smaller raw benefit 26 under respondent's proposed pension plan (proposed plan). Nevertheless, the proposed plan would have provided them with benefits not available un- der the present plan. Among these additional benefits are the following: 1. The proposed plan would have covered all employees, whereas the present plan covers only those employees mak- ing the required contributions. The inclusive coverage of the proposed plan would, therefore, provide a retirement income to the long service, higher salaried employees who refrained from enrolling in the present plan because of the necessity of contributing a not inconsiderable portion of their salary. 2. The present plan is contributory, whereas the pro- posed plan would have been noncontributory. As earlier found, employees enrolled in the present plan are required to contribute 2 percent of the first $7,800 of their salary and 4 percent of the excess 27 As Bass testified, this contri- bution, not required by the proposed plan, "can [be] look- [ed] at [as] additional money that the employees would have to put away for their retirement, and therefore greatly increasing the value of the . . . retirement income." 3. Under the proposed plan employee contributions al- ready made into the present plan would have been re- turned upon retirement with interest computed at the rate of 3 percent a year. "This," as Bass also testified, "further enhances the value of . . . retirement income for employ- ees, because it is additional money to provide them with benefits." 4. The present plan provides that employees retiring be- cause of disability must wait a year before receiving retire- ment benefits. The proposed plan would have cut the wait- ing period to 6 months. 5. Under the present plan employees earn no additional benefits by continuing to work beyond age 65. The pro- posed plan would have changed this by permitting the ac- crual of retirement benefits by employees remaining at work beyond age 65. 6. The proposed plan would have allowed early retire- ment at age 55 after 15 years of service. Insofar as can be ascertained from the record, the present plan does not con- tain a corresponding provision. It is not open to question that 70 percent of the employ- ees would have received a larger retirement income under the proposed plan than provided for by the present plan. Regarding the remaining 30 percent, although their raw benefit would have been smaller under the proposed plan than the raw benefit furnished by the present plan, the pot would have been sweetened, so to speak, by the inclusion of the foregoing benefits contemplated by the proposed plan which are not available under the present plan. Overall, therefore, I find that the proposed plan does not, as alleged in the complaint, have "less value with re- spect to employee retirement income than the [present Plan]." Accordingly, I conclude that respondent did not violate Section 8(a)(5) of the Act by offering the proposed plan to the Union. B. Facts, Contentions, and Conclusions Concerning Respondent's Alleged Violations of Section 8(a)(5) of the Act by Unilaterally Changing Terms and Conditions of Employment On April 14, 1975, the first business day following the impasse in bargaining which, as found, occurred on April 11, respondent unilaterally granted its employees a general salary increase of $50 a month and, in addition, reactivated and implemented its merit review system. This was done pursuant to recommendations made by Nicholas Pernice, respondent's personnel manager, because, he testified, "it had been several months since the employees received a wage increase ;28 [that their] morale was going lower by the day [and that this] was reflected in [their] work perfor- mance." 27 Pursuant to this formula the contribution of a senior engineer earning 25 See fn 1, above $15,600 a year (G C Exhs 2, 3, and 4 and C P Exh 1) is $468 a year 26 Bass defined the term "raw benefit" as being "the number of dollars 28 I have found, in this regard, that the employees had received their that a retiree would receive each month " previous salary increase in July 1974 TAYLOR-WINFIELD CORP. 463 The General Counsel contends that by instituting the foregoing changes in terms and conditions of employment unilaterally respondent violated Section 8(a)(5) of the Act. Respondent argues, and I agree, that the unilateral changes it made were privileged because of the impasse reached in its bargaining with the Union. It is well settled that after an impasse in bargaining be- tween an employer and a union the employer may unilater- ally change terms and conditions of employment . In doing so, however, he may not exceed what was offered to,29 or rejected 30 by the Union. I find that the unilateral action taken by respondent on April 14 following the impasse in bargaining that occurred, as has been determined, on April 11 remained within the foregoing limits. Insofar as the general salary increase is concerned, I have found that respondent's wage proposal made at the April 11 bargaining session, its highest to that date, consisted of a package which would have resulted in a salary increase of about $52 a month. Accordingly, by granting an increase of $50 a month after the impasse re- spondent did not exceed what it offered during the bar- gaining. Concerning the reactivation of the merit increase system, it has been found that respondent proposed that this be done on three occasions while bargaining was in progress and that each time this proposal was rejected by the Union.31 This being the case, I find that by reactivating the merit review system respondent stayed within the permissi- ble bounds of employer unilateral action following an im- passe in bargaining. Accordingly, I conclude that respondent did not violate Section 8(a)(5) of the Act by unilaterally changing its em- ployees' terms and conditions of employment. Having also concluded that respondent did not violate Section 8(a)(5) by offering the proposed pension plan to the Union, and no other violation of the Act having been alleged in the complaint, my order will provide for the complaint's dis- missal. Upon the foregoing findings of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent has not violated Section 8(a)(5) or (1) of the Act in any manner alleged in the complaint. Upon the foregoing findings of fact and conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommend- ed: 29 N L R B v Benne Katz, et a!, d/b/a Williamsburg Steel Products Com- pany, 369 US 736, 745 (1962), Eddie's Chop House, Inc, 165 NLRB 861, 863 (1967) 30 N L R B v Crompton-Highland Mills, Inc , 337 U S 217, 224 (1949), Ht-Way Billboards, Inc, 206 NLRB 22, 23 (1973), reversed on other grounds 500 F 2d 181 (CA 5, 1974); Vickers, Incorporated, 153 NLRB 561, 562 (1965) 31 Briefly recapitulating my findings in this regard, ment review proposals were made by respondent , and rejected by the Union, at the meetings held on March 12 and 25 and April I ORDER32 It is ordered that the complaint be, and the same hereby is, dismissed. 72 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 Order herein shall, as provided in Sec 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclu- sions and Order and all objections thereto shall be deemed waived for all purposes