Designcraft Jewel Industries, Inc.

DESIGNCRAFT JEWEL INDUSTRIES, INC. Designcraft Jewel Industries, Inc. and Amalgamated Jewelry, Diamond and Watchcase Workers Union, Local 1, International Jewelry Workers Union, AFL-CIO. Case 2-CA-16208 January 26, 1981 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND TRUESDALE On October 28, 1980, Administrative Law Judge Robert T. Snyder issued the attached Decision in this proceeding. Thereafter, the Respondent filed exceptions and a supporting brief and the General Counsel filed a brief in support of the Administra- tive Law Judge's Decision. 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, find- ings, and conclusions' of the Administrative Law Judge and to adopt his recommended Order.2 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, Designcraft Jewel Industries, Inc., New York, New York, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, except that the attached notice is substituted for that of the Administrative Law Judge. In adopting the Administrative Law Judge's conclusion that the Board should not defer to the arbitrator's awards. Chairman Fanning and Member Jenkins do not rely on Allantis Steel Companv. 245 NI.RB 814 (1979), and The Kansas City Star Company, 236 NLRB 866 1978) (Chair- man Fanning and Member Jenkins concurring and dissenting) Member Truesdale continues to adhere to both precedents. 2 In his notice, the Administrative Law Judge inadvertently omitted a portion of his recommended Order We hereby correct the notice to con- form to the Order. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT fail and refuse to furnish Amalgamated Jewelry, Diamond and Watch- case Workers Union, Local 1, International Jewelry Workers Union, AFL-CIO, or its ac- 254 NLRB No. 94 94 countants and agents, for examination, its list of customers, accounts payable journal, in- voices from suppliers, checkbooks, general ledger, general journal, chart of accounts, and computer summary sheets, as requested on May 8, 1979, and on September 7, 1979, for the period from January 1, 1978, to February 28, 1979. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employ- ees in the exercise of the rights guaranteed them under Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor or- ganization as a condition of employment, as authorized by Section 8(a)(3) of the Act. WE WILL furnish to Amalgamated Jewelry, Diamond and Watchcase Workers Union, Local 1, International Jewelry Workers Union, AFL-CIO, or its accountants, for examination, our list of customers, accounts payable journal, invoices from suppliers, checkbooks, general ledger, general journal, chart of accounts, and computer summary sheets, as requested on May 8, 1979, and on September 7, 1979, for the period from January 1, 1978, to February 28, 1979. DESIGNCRAFT JEWEL INDUSTRIES, INC. DECISION STATEMENT OF THE CASE ROBERT T. SNYDER, Administrative Law Judge: This case was heard before me in New York, New York, on June 23, 1980. The charge was filed by Amalgamated Jewelry, Diamond and Watchcase Workers Union, Local 1, International Jewelry Workers Union, AFL-CIO (herein called the Charging Party or the Union), on Feb- ruary 12, 1979, and the complaint was issued on March 30, 1979. The primary issue is whether Designcraft Jewel Industries, Inc, (herein called Respondent, Designcraft, or the Company), refused to bargain collectively with the Union, as a majority representative of its employees in an appropriate unit in violation of Section 8(a)(1) and (5) of the National Labor Relations Act (herein the Act), by failing to supply the Union with books and records showing sales and related data to enable the Union to de- termine whether to pursue to arbitration a grievance claiming subcontracting in violation of its collective-bar- gaining agreement with the Company. Respondent denied the material allegations of the complaint and in- terposed an affirmative defense that this proceeding should have been deferred to an arbitration award issued in a pending arbitration between the parties granting cer- tain of the information sought by the Union. 791 DECISIONS OF NATIONAL LABOR RELATIONS BOARD All parties have had the opportunity to present evi- dence, to examine and cross-examine witnesses, to argue orally, and to file post-hearing briefs. The General Coun- sel and Respondent filed post-hearing briefs which have been carefully considered. Based upon my observation of the demeanor of the witnesses, the record as a whole, and the post-hearing briefs, I hereby make the following: FINDINGS OF FACT I. JURISDICTION Respondent, a New York corporation, at all times ma- terial herein, has been engaged in the manufacture and nonretail sale and distribution of earrings, rings, and other jewelry ornaments from a principal office and place of business located at New York, New York, where it annually sells and ships such ornaments valued in excess of $50,000 directly to points outside the State of New York. Accordingly, I find, as Respondent admits, that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. I1I. THE ALLEGED UNFAIR LABOR PRACTICES A. Background The Union represented the Company's production em- ployees, including waxers, casters, and finishers, in col- lective bargaining for at least 30 years. Successive agree- ments were entered between the parties covering the em- ployees' wages, hours, and other terms and conditions of employment. The last agreement, made March 10, 1976, extended with certain changes an expired agreement, for the period March 1, 1976, to February 28, 1979.1 Among the provisions of the old agreement incorporated by ref- erence and continued under the extension agreement were the terms of a collective agreement between the Union and an employer's association for a period when the Company had been a member. One of the terms dealt with subcontracting as follows: Article XXXII Outside Work 32.1 The Employers agree that they will not send any work to outside shops while their employees, who are capable of doing the type, kind and quality of work are unemployed. Work which may be sent to outside shops under this provision of the Agree- ment shall be sent to shops having contractual rela- tions with the Union, provided such shops are capa- ble of doing the type, kind and quality of work re- quired. In the event that no such shops are avail- i There is no current agreement between the parties. Negotiations for a successor agreement terminated after one or two meetings arid the Union is unaware whether at the time of the instant hearing Designcraft contin- ued to employ any unit personnel able, Employers may send their work to non-union shops. 32.2 Nothing herein contained shall restrict, or in any way limit, Employers from buying merchandise or services from any source of supply. Notwith- standing the above, upon notice from the Union, the Employers will not buy from or sell to Employers who are being struck by Local No. 1. The 1976 to 1979 agreement also contained in article XXVIII a grievance procedure culminating in compul- sory and binding arbitration of all complaints, disputes, or grievances between the parties involving questions of interpretation or application of any of the provisions of the agreement. In April 1978, Union Financial Secretary-Treasurer Louis Herman received complaints from members em- ployed by the Company that Respondent had purchased and was operating a jewelry manufacturing enterprise, Jack Gutschneider Jewelry Co., Inc., while employees were laid off, in violation of article 32. Herman met with Respondent President Bernard Karcinell and Board Chairman Sam Beckerman to verify this information and to determine whether a breach of this provision had taken place. Herman was informed that Premier Cre- ations, Inc.,2 had purchased the Gutschneider shop for Designcraft for the purpose of doing casting for the trade. After it was determined that the business would not be lucrative enough it had been sold.3 Herman was satisfied with this information and left. However, he shortly received information that the Gutschneider oper- ation was doing casting work and waxing for the Com- pany. He went back to Karcinell who denied the accusa- tion but explained that the castings were being made for a Milton Lesner Division, that it had always been outside work, and that Lesner was no longer with the Compa- ny.4 Herman demanded documentation to support the claim of sale of Gutschneider. By covering letter dated May 24, 1978, Karcinell for- warded various documents to Herman. They show that on the same date, February 1, 1978, the Gutschneider fa- cility was purchased (through Premier) and then sold to A related company w hose president is Karcinell ' This story differs substantially from the explanation for the sale of Gutschneider which Karcinell told at the arbitration proceeding institut- ed by the Union to fix company liability and obtain relief for a breach of the no-subcontracting provision Karcinell testified that Nicholas Santillo, an old friend of 15 to 20 years acquaintance, had contacted him for help in gng into the jew elry manufacturing business. Santillo told Karcinell he could "do a good joh" for him As an accommodation to Santill, Karcinell testified that lie arranged for Premier to buy Gutschneider's premises anld to resell nimnediately to the Hartall Corporatiol Karcinell testified that this rnethod .tsa chosen to avoid "hassles" since Gutsch- nicider did not know Santillo, but did know the principals involved in Premier and would be williig to deal with them 4 his explanation is somewhat unclear and misleading An arbitration award i evidence discloses that a Lesner Corporation, whose president is also Karcinell and which did not maunfacture any jewelry, did pur- chase castings from outside sho)ps and sold certain rings not produced by Designcraft In July 176, Islcser nosed into Designcraft premises and a year later Designcraft began to phase out its own special jewelry produc- tion and began to do manufacturing work for Lesner, both castings and finished jewelry Furthermnore the relationship between Ilesner and De- signcraft was such that Karcinell had the authority to determine where l.esner sent its gold t he made ilt) castings 792 DESIGNCRAFT JEWEL INDUSTRIES, INC. a nonunion entity, Hartall Casting Corp. Significantly, the purchase price was agreed to be paid through the device of a 50-percent credit to Premier for all of its casting purchases from Hartall.5 Then, on June 21, 1978, Karcinell and Martin Stein- berg, executive vice president of Designcraft, came to the union office to discuss the eventual phasing out of the entire operation of Designcraft and Finecraft Jewel- ers, Inc., a subsidiary of Designcraft operating out of the same physical premises. The company officials told Herman they were going to close down the casting and waxing departments completely as of June and go out of business by the end of the year because sales were down and the business was not making any money. Casters and waxers then comprised 6 or 7 of the full complement of 20 unit employees. A discussion ensued regarding union demands for severance pay for those still employed who would be affected by the closing and backpay for those employees laid off while work had been subcontracted. A dispute arose as to what period of time was to be employed to compute backpay and no agreement was reached. The dispute was ultimately arbitrated under the contract. After a hearing held on September 29, 1978, an award was issued in which an arbitrator found that both Designcraft and Finecraft had subcontracted unit work while employees of both were on layoff in violation of article 32.1 of the contract.s The arbitrator ordered both companies to cease requiring their employees to finish castings produced by Hartall, to offer reinstatement to the employees necessary to perform the present volume of casting work which was still ongoing at the time, and to make the employees and the Union whole for any lost wages and contributions occurring as a result of viola- tions of article 32.1. The arbitrator retained jurisdiction to convene a further hearing at the Union's request made within 30 days of receipt of the award to determine the amount of backpay and contributions in the event of dis- agreement between the parties as to the amount of dam- ages. Within a few weeks of the award, on December 7 or 8, 1978, Respondent laid off an additional group of eight unit employees. A meeting was next held on January 11, 1979, between the parties and the arbitrator to attempt to resolve the amount of backpay due under the award. Present were Karcinell and Respondent's counsel, Stan- ley Israel, the arbitrator, Union attorney Roger Madon, Herman, and two other representatives from the Union. During the meeting, Karcinell, in response to an inquiry, indicated that sales were down and until they picked up the recently laid-off employees could not be called back. 7 5 The arbitration award referred to in fn. 3, supra, also notes that, from March through June 1978, Hartall made certain waxes which were in- voiced to Designcraft and were described in a May 24 letter from Kar- cinell to the Union as sales "from Hartall to Designcraft" and further, as agreed by both the Union and Company, beginning in July 1978, Hartall made castings and sold them to Designcraft It was at this time that De- signcraft ceased to do any waxing or casting and laid off its waxers. e The arbitrator concluded that art. 32.1 and 32.2 read together prohib- its the sending out of work during layoff, but permits the purchase of all other merchandise and services except for those involved in producing prohibited outside work. 7 As the backpay remained unresolved, after further hearing, an award was issued by the arbitrator on December 28. 1979, which, inter alia. B. The Union's Request for Information and Subsequent Interim Arbitration Awards By notice dated January 17, 1979, 8 addressed to De- signcraft and Finecraft, Union Attorney Madon demand- ed to arbitrate a dispute arising as a result of "Violation of Section 32 (outside work), and other pertinent sections of the contract, and past agreements between the parties when the employer improperly utilized outside shops while employees were laid off." The Union sought as a remedy, "Reinstatement for the affected employees, plus a make whole remedy for the affected employees, the Union, and the Welfare and Pension Funds." By letter dated January 22, addressed to Karcinell as president of Designcraft, Joseph Tarantola, president of the Union, sought to examine the company books. Tarantola first noted the recent substantial layoffs at both Designcraft and Finecraft and that Karcinell had attributed them to poor sales. Tarantola continued: As a result of these layoffs and your reasons for same, we are informing you that we wish to exer- cise our rights to examine your books to determine the status of the sales of the companies and to deter- mine whether or not any subcontracting has been, or is being done in violation of Article XXXII of the Collective Bargaining Agreement. A failure to respond to this letter five (5) work- ing days from its date will be considered by us to be another refusal to carry out your obligations under the collective bargaining agreement and a further violation of the National Labor Relations Act. By letter dated February 1, Respondent Attorney Israel responded in the following words: We believe your request is not justified under the terms of the collective bargaining agreement but, in any event, we assume the matter will be determined in the pending arbitration before the American Ar- bitration Association. Tarantola testified as to the union concerns which ulti- mately led to the demand for arbitration and request for information. Based upon the prior arbitration proceeding and award which disclosed the Company's purchase of the premises and equipment of Gutschneider through Premier and the resale to, and continuing relationship with, Hartall, including purchase of castings, a possibility existed that the most recent layoffs in December 1978 were attributable to contracting out work. Unless the Union could establish a relationship between sales and contracting work its claim of breach of article 32.1 would not prevail. For example, if sales remained fairly stable over a period of years, with fewer or no employ- ees, clearly the work had to be produced elsewhere and fixed the backpay In this award, the arbitrator referred to company statements that invoices showed that 67. 203 units (castings) had been produced b Hartall for Designcraft from the time of layoff of employees in July 1978 until the receipt of the first award in early December 1978. " All references to dates hereinafter will be to dates in 1979 unless oth- erwise specified. 793 DECISIONS OF NATIONAL LABOR RELATIONS BOARD company records would also disclose whether work there had been going to contracting shops. The request- ed information would verify if there had been a drop in sales as Respondent claimed as the basis for the layoffs. Tarantola did not want to proceed to arbitration without having the facts, without having sufficient knowledge and evidence to support the allegation of subcontracting in violation of the contract. On cross-examination, Tarantola indicated he had not specified the books to be examined because he did not know at the time of his letter how Respondent kept its books. The books sought were the Company's ledger books showing sales and whether or not any work had been sent out to subcontractors. Their examination would help determine whether payment had been made to people other than employees in the shop for work performed. If the records disclosed sales remained the same during the period of layoffs, Tarantola would have questioned the employees and pursued the matter to arbi- tration. If the books showed a decline in sales, he would have again discussed the matter with the Company and based upon the results of those discussions a decision would have been made whether or not to proceed to ar- bitration. A hearing was convened for May 8 before an arbitra- tor on the Union's January 17 demand. Before the merits were reached, Union Attorney Madon requested that the Company produce certain documents and records which he said he needed to properly prepare the Union's case. As to Designcraft, for the period January 1978 to Febru- ary 1979, these included: () a list of customers, (2) ac- counts payable journal, (3) invoices from suppliers, (4) checkbooks, (5) general ledger, and (6) a list of all non- bargaining unit employees. Madon also indicated he wanted to take a deposition of the Company's front office employees. The parties agreed that the Union's requests be deter- mined prior to the introduction of evidence on the griev- ance and that the arbitrator issue an interim award with his findings. In a memorandum submitted in support of its request, the Union, by its counsel, argued that al- though it had no evidence of any contract violation, since all such evidence was in the possession of Design- craft, it had a right to determine whether the Company was adhering to the provisions of the collective-bargain- ing agreement. Counsel asserted: "When evidence clearly shows that prior notorious transgressions with respect to the same disputed provisions have occurred, the right of discovery must mature into an entitlement not subject to any defense." As to the request for Designcrafts' customers list, union counsel contended that past litigation has shown that the Company could easily have subcontracted work shipped directly to its customers without having the sub- contracting arrangement properly reflected in its books. The list of nonunit employees or, in the alternative, the right to depose Karcinell or other named executives, would enable the Union to learn the identity of those limited number of employees who had authority to sign for unfinished products sent from, or delivered to, De- signcraft. Evidence of such transfers would support the claim of contracting out of the Company's work. Refer- ence was also made to the outstanding complaint in this proceeding which had been issued by the Board 2 months previously. Company Attorney Israel, by memorandum, disputed the arbitrator's jurisdiction to determine the Union's in- formation request. That jurisdiction, argued Israel, ex- tends only to the adjudication of "complaints, disputes or grievances." (Art. XXVIII.) Thus, any power to direct production must be ancillary. Since production is sought to ascertain if a violation exists the Union has no present complaint, dispute, or grievance and, since there is no contract clause requiring generally that the records be made available to the arbitrator, there is no jurisdiction to direct production. Assuming jurisdiction in the arbitrator, Israel next con- tended that the customer lists were confidential and the checkbook (in this case a computer printout check regis- ter), invoices (comprising thousands of totally extraneous items), and the other items requested were totally imma- terial. On June 29, the arbitrator issued an interim award finding that "the Union has the right to certain records which relate more directly to the pertinent contract clause regarding subcontracting, during a period when there may have been layoffs of covered employees. Other requests were denied because they are remote, un- reasonable, or too confidential." The award directed the Company to provide to the Union: 1. The Accounts Payable Journal, for the period of January 1978 to February 1979, to be inspected on the Company's premises. 2. The Company checkbooks for the period of January 1978 to February 1979. 3. The list of all employees of the receiving de- partment. 4. The list of all nonbargaining unit employees employed at the New York City facility. The Union retained a certified public accountant, Ber- nard Komorsky, to audit the records required to be pro- duced to determine whether or not the Company had used outside contractors and whether or not its oper- ations had declined and to report back to the Union in connection with the reduction of employment. Ko- morsky visited the Company for this purpose on August 13. Komorsky testified he was provided with a check reg- ister and computer purchase register for the period Janu- ary 1978 through March 1979 and was told that these were the records that were requested. The check regis- ter, a book of original entry, listed the date, payee, check number, and amount for each check issued on a particu- lar bank account. It also classified the check by broad general category, such as accounts payable, overhead items, or payment of taxes. It did not contain any infor- mation as to the specific nature of the disbursement of funds which it represented. The purchase register was a computer printout register which contained only dates, names, amounts, and an account code number. To the extent the purchase register recorded purchases which had been billed but not yet paid it also constituted an ac- 794 DESIGNCRAFT JEWEL INDUSTRIES, INC. counts payable journal in computerized form. However, it showed only the name of the Company from which a purchase was made, the date of the invoice, the amount of the purchase and, again, an account number to which the charge was posted. The accountant was not fur- nished with any definition of the code numbers or "chart of accounts" which would have indicated the nature of the expenditure. When Komorsky attempted to get infor- mation to clarify what he was examining he was told that what he had received was all that was being fur- nished to him. For example, Komorsky testified that in general audit procedures, an examination is made of some original documentation, such as invoices, on a spot check basis to verify the accuracy of the entry and the amount and nature of the expenditure. Although request- ed, no invoices were provided by the Company and Ko- morsky was told this was all the information that would be furnished to him. Without information as to the nature of the expendi- tures made for the period in question or production of invoices to show the nature of a charge incurred and the item purchased, Komorsky stated he was unable to render an opinion to the Union as to whether or not the Company had contracted out any of the unit work or whether its business had declined to a degree warranting a layoff. In accordance with the arbitrator's ruling, Komorsky was also denied access to the Company's general ledger in which summary entries are normally made, on a monthly basis, of all transactions made and entered for the period in the various original books of accounts. The general ledger thus constitutes a good starting point for a review of a firm's transactions since each entry provides a summary of entries made for the month in question in each of the books of original entry which the Company maintains. A review of the summary entries to columns for ac- counts receivable, sales, or cash receipts journals in the general ledger will normally disclose all of the sales and billing activity of the Company and the sources of that activity. The general ledger will also show whether the Company maintains journals or registers reflecting dis- bursements or if it keeps checking accounts other than those reflected in the purchase and check registers which were provided. When Komorsky asked to see a general ledger so that he could make sure that the books provided him repre- sented the sole ones of their kind and so he could exam- ine the full business transactions he was again rebuffed. On cross-examination, Komorsky acknowledged that certain filings the Company was required to make with the Securities and Exchange Commission would disclose financial information about its operations and that he had informed the Union of their availability. One form shows the result of operations and includes a balance sheet and income statement, containing income and expenses in summary form. Another constitutes a complete financial statement for the Company's fiscal year. The witness later disclosed, however, that these filings would not provide the same detail as the general ledger, nor would they disclose the sources of the various figures from the Company's various books of original entry. Komorsky also acknowledged that since the check register provided him listed names of the various payees, he did make a list of those who might be vendors (al- though the names revealed nothing to him) and gave it to the Union. Following the accountant's report to it of the results of his examination, at a reconvening of the arbitration hearing on September 7, the Union, by its attorney, made a motion to the arbitrator that he reconsider his earlier award of June 29. In support of its position, Komorsky appeared and testified before the arbitrator that the docu- ments produced in compliance with the first award were not sufficient to enable him to complete his audit. Based upon Komorsky's statements as to those documents he believed to be appropriate for determination of the issue before the arbitrator, the Union renewed its request for Designcraft's (a) general ledger, (b) general journal, (c) chart of accounts, (d) computer summary sheets, and (e) invoices. 9 Subsequently, in an award dated December 28, the arbitrator denied the Union's motion in the fol- lowing words: In reference to the Union's request for additional Company documents and records, beyond which was granted in my Interim Award dated June 29, 1979, please be advised as follows: The application for the production of additional documents, is denied. The documents I originally directed to be produced are adequate to enable the Union to properly administer the contract. To re- quire the production of the further documents would be unreasonable and unnecessary. Pending determination of the instant unfair labor prac- tice allegations the Union has refrained from pursuit of the grievance arbitration on its merits. C. Analysis and Conclusions It is well settled that the duty of an employer to bar- gain in good faith includes the obligation to disclose to its employees' collective-bargaining representative data relevant and reasonably necessary to its role as bargain- ing agent in the administration of a collective-bargaining I Although the phrase "general journal" appears as part of the stipula- lion proposed by Respondent. the Charging Party's acceptance of the stipulation appears to indicate that this journal was among the books originally requested It is not defined in the record. It has been defined under generally accepted accounting principles as a book of original entry containing entries that do not fit into the specialized books of origi- nal entry and "adjusting" entries needed to correct errors in other jour- nals and to record original entries for depreciation, year-end inventories. amortization of certain items, accural of expenses and taxes, and closing of income and expense accounts at the end of the fiscal period. Each journal entry is posted individually to the general ledger in contrast to the summary postings monthly from other books of original entry (I. Kel- logg, "How To Use Financial Statements," pp. 55-56 (2d ed 1978) The request for a chart of accounts represents an attempt at clarification of the items appearing in the Respondent's computer purchase register The "computer summary sheets." not otherwise defined, in all likelihood rep- resent the union conclusion that, inasmuch as the Company's records were being computerized, the general ledger might very well be main- tained in the form of computer summaries 795 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement.10 This obligation extends beyond the negoti- ation of a collective-bargaining agreement and encom- passes relations during the terms of an existing agree- ment, such as determining whether to file or support a grievance' and preparing a grievance for arbitration.12 There is no question that the Union had instituted a timely arbitration proceeding based upon an alleged breach of the 1976 to 1979 contract's prohibition against contracting out of unit work while unit employees were laid off and out of work. Respondent has not at any time disputed that the grievance presented a legitimate issue of contract violation.' 3 Further, the record amply sup- ports the Union's good-faith belief that Respondent's De- cember 1978 layoffs might very well have taken place at a time when unit work had been contracted out. Unit employees had complained that Respondent was engaged in subcontracting. The Company's most recent history of financial and business transactions culminating in a con- tracting relationship with Hartall commencing 6 months prior to the December layoffs pursuant to which Hartall produced castings for Designcraft on a continuing bases in violation of the contractual prohibition also lends added weight to the bona fides of the Union's position. On January 11, when President Karcinell expressly at- tributed the eight unit layoffs to lack of sales Respondent created an obligation either to substantiate the claim of inability to recall the unit employees or face the risk that its refusal to give information about its financial status substantiating its claim would violate its duty to bargain in good faith. As noted by the Supreme Court in a land- mark decision, N.L.R.B. v. Truitt Mfg. Co., 351 U.S. 149 (1956), recognizing the duty to provide information sub- stantiating a claim of inability to pay as an element of the statutory bargaining duty: Good-faith bargaining necessarily requires that claims made by either bargainer should be honest claims. This is true about an asserted inability to pay an increase in wages. If such an argument is im- portant enough to present in the give and take of bargaining, it is important enough to require some sort of proof of its accuracy, and it would certainly not be farfetched for a trier of fact to reach the conclusion that bargaining lacks good faith when an employer mechanically repeats a claim of inability to pay without making the slightest effort to sub- stantiate the claim. [Id. at 152-153.] 10 See, e.g., N.L.R.B. v. Acme Industrial Co., 385 U.S. 432, 435-436 (1967); Trustees of Boston University, 210 NLRB 330, 333 (1974); Mont- gomery Ward & Co., 234 NLRB 588 (1978) 'L See J. I Case Company v. N.L.R.B., 253 F.2d 149, 155 (7th Cir 1958); The Timken Roller Bearing Co. v. .VL.R.B., 325 F2d 746 (6th Cir. 1963), cerl. denied 376 U.S. 971 (1964); Curtiss- Wright Corporation, Wright Aeronautical Division v. N.L. RB., 347 F.2d 61, 65 (3d Cir. 1965). 12 See Fafnir Bearing Co. v N.L.R.B., 362 F.2d 716, 721 (2d Cir. 1966); The Kroger Company, 226 NLRB 512 (1976); Montgomery Ward & Co., 234 NLRB 588 (1978). 13 Whether, and to what extent, the Union may prevail in the still pending arbitration is not a matter with which the Board is, or should be, concerned. It is not an issue before this tribunal. However, the grievance itself must necessarily be examined if only to determine whether the Union's request for information is relevant and reasonably necessary to the intelligent performance of its function as bargaining agent See N.L.R.B. v. Acme Industrial Co.. supra. The Supreme Court more recently affirmed that same duty when an employer refused to respond to a union in- quiry concerning removal of plant machinery under an agreement containing employee protections against layoff or reduction in classification arising from subcontracting of work or movement of plant equipment to another company location, provisions similar in their work pres- ervation aspects to the clause which the Union seeks to enforce in the instant arbitration proceeding.' 4 While a presumption of relevance does not apply to the requested data herein, concerning sales and produc- tion, as it does to wage and related information,l5 never- theless the circumstances surrounding the Union's re- quest, particularly as testified to by Union President Tar- antola, demonstrate the relevance of the data sought, in particular "the potential value of such material as perti- nent data with which the Union should be supplied in order to assist it in its task of deciding whether to insti- tute grievance proceedings or use other policing tasks under the existing bargaining agreement and to guide the Union in contract negotiations themselves .... It is well within the responsibility of the Union in the instant case in executing its duty to protect the interests of the employees in the bargaining unit it represents to closely scrutinize all facts relating to any encroachment upon the rights of those unit employees to the end that a stable employment structure for the members of the bargaining unit may be maintained.""' The standard thus to be applied in determining rel- evance is quite liberal. It has been characterized as being of a discovery type in which the Board, when faced with a claim of refusal to furnish the requested information, only acts upon the probability that the desired informa- tion is relevant and that it would be of use to the union in carrying out its statutory duties and responsibilities. The application of this standard decides nothing about the merits of the union's contractual claims. 17 Applying this liberal standard for discovery to the Union's request for information, I conclude that the Charging Party was well within its rights, in acting upon the facts it had at hand, its knowledge of its past dealings with the Company, and its claim of breach of the con- tractual limitation on contracting out, when it made its initial request for examination of company books in Tar- antola's January 22 letter. Furthermore, the Union was fulfilling the responsibilities and obligations it owed to the employees-those laid off and those still employed- it continued to represent when it initiated this request. "Doubtlessly, as the exclusive representative of the Re- 14 See N L.R. B v. Acme Industrial Co., supra. i' See Boston Ilerald-Trav. Corp. v N.LR.B., 223 F.2d 58 (Ist Cir 1955) l Curtiss- Wright Corporation. Wright Aeronautical Division v. NL.R.B.. supra at 70. " See N.L.R.B. v Acme Industrial Co.. supra at 437, where the Su- preme Court, in fn. 6 quotes from Moore's Federal Practice on the more liberal standard as to relevancy applicable to a discovery examination. See also Westinghouse Electric Corp., 239 NLRB 106. 107 (1978), where the Board noted that "the union need not demonstrate that the informa- tion sought is certainly relevant or clearly dispositive of the basic negoti- ating or arbitration issues between the parties The fact that the informa- tion is of probable or potential relevance is sufficient to give rise to an obligatioil on he part of an employer to provide it." 796 DESIGNCRAFT JEWEL INDUSTRIES, INC spondent's employees, the Union has a vital interest and, indeed, the duty to see that its constituents are treated fairly by their Employer and that their contractual rights are respected and vindicated."'8 Tarantola's testimony makes clear that the Union's ul- timate decision whether to pursue the grievance further to arbitration on the merits of the contracting out dispute hinges on the results of its examination of the books and records it seeks. It is conceivable that a full disclosure of relevant data, including identification of the accounts to which various charges have been posted, a spot check of invoices, and a review of summary general ledger entries and any modifications or correction of errors in the gen- eral journal, may yet convince the Union that its claim of subcontracting lacks merit under the contract and should be withdrawn. Respondent's rejection of its obli- gation of relevant disclosure would force the Union to prematurely pursue and complete the arbitration process. As noted by the Supreme Court in N.L.R.B. v. Acme In- dustrial Co., supra at 438: Arbitration can function properly only if the griev- ance procedures leading to it can sift out unmeritor- ious claims. For if all claims originally initiated as grievances had to be processed through to arbitra- tion, the system would be woefully overburdened. Yet, that is precisely what the Respondent's restric- tive view would require. It would force the union to take a grievance all the way through to arbitra- tion without providing the opportunity to evaluate the merits of the claim. As the accountant Komorsky's testimony demon- strates, without a review of information necessary to enable it to make an intelligent evaluation of the prob- ability of success on the merits of its underlying griev- ance, the Union has been frustrated in its efforts to repre- sent the unit employees properly in the bargaining pro- cess. Respondent in its post-hearing brief, in reliance on Fifty Division, Hayes-Albion Corporation, 190 NLRB 146 (1971),19 argues that inasmuch as the Union's January 22 request for information was ambiguous no duty arises compelling the Company to respond affirmatively. While it is true that Tarantola's letter is phrased in general terms, there is no basis in the record for concluding that Respondent was confused as to the nature of the Union's request and it is clear that its inquiry related solely to company records which would sustain its sales related justification for the December layoffs. Respondent failed to object to Tarantola's request on this asserted ground. Also, the Union president's letter placed the Company on adequate notice as to the claims it was asserting and the information which, if produced, would resolve the alleged breach of contract. i' Trustees of Boston University, supra at 334 19 In Fifty Division, the Board affirmed a then Trial Examiner's finding that a union request for data relating to contracting out of oolroonm work was ambiguous since it failed to apprise he conpany whether the request related to new toolsuork traditionalls placed in outside shops or maintenance and repair on tools and dyes normall\ performed h tool room employees. In Puerto Rico Telephone Company v. N.L.R.B., 359 F.2d 983 (Ist Cir. 1966), the union asked the company to submit data that would prove to its grievance committee that certain layoffs were due to "economic reorganiza- tion" as claimed. The data requested were: (1) Volume of business during related periods, (2) earnings derived therefrom, (3) amounts saved through layoffs, (4) identi- fying whether anyone was performing the work of laid- off personnel, and (5) savings to the company derived from the layoffs. These demands were no more specific in terms of the precise books and records to be produced than was Tarantola's. As concluded by the court: The information requested by the Union was rel- evant in evaluating the pending grievances. The company claimed the layoffs were for economic reasons. The union merely wanted the company to prove that such economic reasons existed. Clearly the data concerning volume of business, earnings, wage savings due to layoffs, etc., became relevant once the company raised the economic issue as to the reason for the layoffs. [Id]. at 986-987. 20 Accordingly, I find that the Union's January 22 re- quest for information was sufficient to place the Compa- ny on notice and under an obligation to comply. Instead, on February 1, Respondent's counsel rejected the demand characterizing it as "unjustified under the terms of the collective bargaining agreement." I therefore con- clude that Respondent breached its duty to bargain in good faith in violation of the Act commencing on this date. Even assuming, arguendo, that Tarantola's letter wes ambigious, the Union's request was certainly sufficiently clarified on May 8 when its counsel listed six items com- prising data which it was claimed would aid it in deter- mining whether Respondent was evading its contractual obligations. Additions to and clarifications of that request were subsequently made on September 7. To the May 8 request, Respondent, by counsel, continued to argue, this time to the arbitrator, that the information sought was not germane, was in fact immaterial to the Union's claim of contract breach, and, since it was sought to determine if a violation exists, the Union had no present right to the information under the contract.2 Respondent has continued to reject the September 7 request denied by the arbitrator. Concerning the customer lists, to the arbitrator (but not in its post-hearing brief herein) Respondent contend- ed their production was precluded because of their confi- dentiality as trade secrets. The Union argued that the his- 20 See also I:llsiY)rrh Sheet Metal Inc., 232 NLRB 109 (1977). where the Board noted, inter aia,. in rejecting an employer refusal to furnish the union with information necessary for it to determine whether or not Re- spondent had been in compliance with its contractual obligations to con- tribute to certain fringe benefit funds, that "it would be anomalous indeed to require the Union to establish exactly the information it needs before we ould require Respondent to furnish it" Contra;st here the unanimity of Board and court analyss that it is precis cl bec-llc tile Ilion has the obligation and he right to procutire ilforiln;lloil plletii;llN ncessar 5 to evalate whelher or not a griesance shouiiltdbe ipirsued tha Ithe cniplo er has a stilatitors obligatioin It) iwlrlsi 797 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tory of company dealings derived from the past arbitra- tion revealed that it was possible, even probable, for sub- contracting arrangements not to be easily located on books and records and that the identity of customers would aid in determining whether work was shipped di- rectly to them from a producing company other than Respondent. Respondent has failed to adduce any evidence which would show that, were the list of Respondent's custom- ers to be made available to the Union, it would in any way be misused. 22 I conclude, on balance, on the facts adduced, including those disclosed in the prior arbitra- tions in which the Company was found to have breached the subcontracting provision under circumstances show- ing intricate financial transactions with third parties and entities in which Respondent's president had manage- ment interest and control, that nothing in the record warrants depriving the Union of its right to disclosure of this information. 23 To the extent Respondent also relied on a contention to the arbitrator (again, not in its brief herein) that pro- duction of any of the items sought would be burden- some, particularly related to invoices, I reject this de- fense as well. Komorsky, the Union's consultant, made it clear that invoices would be spot checked only during a review of the check and purchase registers made at Re- spondent's premises.2 4 A further Respondent contention, sought to be estab- lished on Komorsky's cross-examination, that the infor- mation sought was available from records required to be filed with the SEC, is also unavailing. Apart from the fact, as Komorsky testified, that these records would not satisfy the Union's demands, particularly with respect to the identity and sources of company purchases, "absent special circumstances, a union's right to information is not defeated merely because the union may acquire the needed information through an independent course of in- vestigation." 25 In its brief, Respondent also contends that the Board's Collyer26 policy insulated it from any obligation to comply with the Union's initial information request, at least until the matter was dealt with by the arbitrator. Respondent refers to the assumption stated in its Febru- ary response that the matter would be determined in the pending arbitration and that until the dispute in fact was ultimately addressed by the arbitrator the Company was 22 See Custom Excarating Inc., 228 NLRB 285 (1977), modified in other respects 575 F.2d 102 (7th Cir. 1978), where the Board rejected a claim of confidentiality arising from a union request for identification of the company's customers. See also Trustees of Boston University, supra, where the Board affirmed an Administrative Law Judge's rejection of a company assertion that disclosure of its physical plant budget and print- ing contracts would result in breach of confidentiality and possible damage to the University on a union request made during second and third steps of a grievance claiming elimination of the paint shop and layoff of its painters violated the agreement. In accord: The Kroger Com- pany, 163 NLRB 441 (1967); Curtiss-Wright Corporurion. Wright 4eronauti- cal Division, supra. 23 I have examined and conclude that application of the balancing test invoked in Detroit Edison v. N.L.R.B., 590 F.2d 290 (7th Cir. 1979), with respect to disclosure of individual test results of applicants for employ- ment, does not dictate any different conclusion here. 24 See The Kroger Company. 226 NLRB 512, 514 26 Id. at 513. 26 Collyer Insulated Wire. 192 NLRB 837 (1971). entitled to rely on the Board's policy deferring to avail- able arbitration a question of contract interpretation. Re- spondent would distinguish Montgomery Ward & Co., 234 NLRB 588 (1978), where the Board, in the course of denying the respondent's motion to dismiss which relied on application of the deferral doctrine, refused to defer the issue of the respondent's unwarranted delay of ap- proximately 3 months in complying with the union's re- quest, conduct completely at variance with Respondent's own prompt response to the Union's request. Yet the Board in Montgomery Ward & Co. took care to note that the issue of the respondent's delay in responding was nei- ther a matter of contract interpretation nor a procedural matter attendant to the arbitration process. Whether the union's request in the matter sub judice presents a con- tract issue or is ancillary to the arbitration will be exam- ined shortly. Other Board determinations make clear, however, that it will not permit an employer to defend successfully against an information request predicated upon a claim that the request itself presents an issue of contract interpretation cognizable under the Collyer de- ferral policy.2 7 It should also be noted that, although Respondent would have the Board find that Respon- dent's prearbitration refusal to produce the requested in- formation is insulated from a finding of violation because the issue was one which would, in all likelihood, be pre- sented to the arbitrator, at the same time Respondent has been consistent in its position before the arbitrator that he had no jurisdiction to consider the matter since, in its counsel's own words in his May 11 submission to the ar- bitrator, "Absent a clause in the contract (and there is none) requiring generally that the same be made avail- able to you, you have no power to direct production." Respondent may not be permitted to profit from the adoption of such inconsistent positions and reasoning. Underlying the Board's rejection of Collyer here must be the view enunciated uniformly by the Board and the courts in many of the decisions previously cited that no union should be required to proceed to an arbitration where information necessary to a full assessment of its claim has been withheld and which, if available, might well convince it to refrain from continuing the proceed- ing. In any event, as the collective-bargaining agreement does not contain any disclosure provision and as the con- tract does not otherwise indicate that demands for infor- mation are to be made through the grievance and arbitra- tion machinery, the existence of such machinery is no de- fense to an employer who has refused to supply relevant data upon a union's request. Finally, Respondent urges in its brief that the applica- tion of the Board's Spielberg28 policy dictates that the Board here exercise its discretion and defer to the inter- im arbitration awards of June 29 and December 28, 1979, decline to assert its jurisdiction, and dismiss the com- plaint. In a number of recent cases in which employers have defended against complaints alleging refusals to furnish unions with certain information on the ground that the 27 Worcester Polytechnic Institute, 213 NLRB 306 (1974); Unired-Carr 2Tennessee, a Division of TR W. Inc., 202 NLRB 729, 730-731 (1973). '2 Spielberg Manufacturing Company, 112 NLRB 1080 (1955). 798 DESIGNCRAFT JEWEL INDUSTRIES, INC. matter had been submitted to arbitration, the Board had measured this employer defense against the Spielberg standards. 29 Under those standards, in order to promote the voluntary adjustment of labor disputes but without abandoning its obligation to protect rights guaranteed by the Act, the Board will honor an arbitration award and thus will not interfere in disputes which the parties have submitted to arbitration where the proceedings have been fair and regular, all parties had agreed to be bound by the decision of the arbitrator, and the decision of the arbitrator is not clearly repugnant to the purposes and policies of the Act.30 To these original standards the has Board added a fourth. The Board will not defer to an ar- bitration award where the arbitrator did not pass upon the underlying unfair labor practice issue.3' Application of that standard requires that the unfair labor practice issue be both presented to and considered by the arbitra- tor.32 Recent decisions of the Board also confirm that this requirement may be met by an arbitrator's consider- ation of all of the evidence relevant to the unfair labor practice in reaching a decision rather than ruling on the unfair labor practice directly-an implicit resolution of the statutory issue.33 The Board has now reaffirmed a basic element of this standard, as applied to issues of dis- crimination, that it will give no deference to an arbitra- tion award which bears no indication that the arbitrator ruled on the statutory issue in determining the propriety of an employer's actions. 34 The burden of proving that the issue of discrimination was litigated before the arbi- trator is on the party seeking Board deferral. 35 It is clear that in the Board's application of the Spiel- berg policy to nondiscrimination issues, in particular in its application to the very issue of refusal to bargain in good faith by a refusal to produce information for the employ- ees' bargaining representative, it has consistently adhered to this fourth requirement. Thus, in The Kroger Company, supra, the Board refused to defer to an arbitration award that failed to deal with the issue of the employer's obli- gation to furnish data to the union on its merit but rather treated the union's request for information as a matter of compliance with the terms of the award best left for res- olution by the parties. Since the award did not resolve the unfair labor practice issue the Board did not regard it as controlling, citing Monsanto Chemical Company, supra as precedent. In Montgomery Ward & Co., supra, the Board concluded that, inasmuch as the Respondent's re- fusal to provide the requested information was not itself subject to the grievance arbitration provisions of the col- 2D See The Kroger Company, 226 NLRB 512: Montgomery Ward & Co.. 234 NLRB 588. 30 Spielberg Manufacturing Company. supra. 31 Raytheon Company, 140 NLRB 883 (1963): Monsanto Chemnical Com- pany, 130 NLRB 1097 (1961). 32 Suburban Motor Freight. Inc., 247 NLRRB No. 2 (1980). in which the Board expressly overruled Electronic Reproduction Service Corporation. et al. 213 NLRB 758 (1974), which had held to the contrary with respect to discharge or discipline cases; see Yourga Trucking Inc.. 197 NLRB 928 (1972); Airco Industrial Gases-Pacific. a Division of.4ir Reduction Compa- ny. Incorporated, 195 NLRB 676 (1972). 33 See Atlantic Steel Co., 245 NLRB 814 (1979); see also he Kaansas City Star Company, 236 NLRB 866. 867 (1978); and I.orain Division of Koehring Co., 234 NLRB 1060, 1062 (1978). 34 Suburban Motor Freight, Inc. upra. 3a Id. lective-bargaining agreement and was not presented to or considered by the arbitrator as a violation of the parties' contract, it was thus a procedural matter attendant to the arbitration process rather than a separate grievance sub- ject to arbitration to which the Spielberg doctrine was in- applicable. Respondent argues that, contrary to Montgomery Ward, on two separate days of arbitration hearing, the only issue litigated was the failure to produce the infor- mation. Moreover, submits Respondent, the second arbi- trator's award, by its very language, demonstrates that the arbitrator did not limit his inquiry to a question ancil- lary to the subcontracting issue but dealt directly with the issue of production vis-a-vis administration of the con- tract. For a number of reasons, I conclude that Respondent's attempt to distinguish Montgomery Ward is unavailing and that, as the unfair labor practice issue of production of information was not and, indeed, could not be dealt with by the arbitrator as a separate and distinct grievable dispute, there is no arbitration award to which the Board may defer. There is no adequate basis on which the result reached by the Board in Montgomery Ward & Co. may be distin- guished. Just as in Montgomery Ward, the Union's request for information has been treated as a procedural matter ancillary to the substantive issue of subcontracting. This is evidenced by several factors. First, the demand for ar- bitration only raises the issue of subcontracting. Second, nowhere in the agreement between the parties is the right to information addressed. Respondent counsel ac- knowledged this fact in his memorandum to the arbitra- tor in opposition to the Union's request described supra. The statements contained in that submission clearly indi- cate that Respondent viewed the arbitrator's authority to address the issue of production as an ancillary matter. Third, although Respondent, as noted, argues that the ar- bitrator must have found that the contract implicitly ad- dresses the issue of production, thereby making this a substantive issue, nothing in the award supports such a result. In fact, in the arbitrator's interim award he states, "The parties agreed that such Union's request be deter- mined prior to the introduction of evidence on the griev- ance and that I issue an Interim Award" [emphasis sup- plied]. The statement implies that the request for infor- mation was not a grievance or grievable issue; but, rather, was a procedural matter to be resolved prior to hearing evidence on the issue of subcontracting. The ar- bitrator's subsequent three-sentence ruling rejecting the Union's request for additional documents is fully consis- tent with his treatment of the Union's demand as one in aid of its claim of breach of the provision restricting sub- contracting and not as an independent dispute cognizable under any part of the agreement. Since the issue of pro- duction was dealt with as a procedural matter the Spiel- berg doctrine does not apply and I may not defer to the interim awards. Apart from the foregoing, there are additional reasons why no deference should be accorded to the arbitrator's awards. They relate to the fourth Spielberg standard. Even assuming the arbitrator treated the information re- 799 DECISIONS OF NATIONAL LABOR RELATIONS BOARD quest as raising a substantive issue under the contract, there is no evidence that he considered the unfair labor practice issue. In his interim award of June 29, the only rationale that the arbitrator offers for denying certain portions of the Union's request is that "they are too remote, unreason- able or too confidential." Nowhere in the award does he discuss the relevancy of the data requested; and it is well established that the primary consideration in determining the validity of a request for information is whether or not the material requested is relevant. See Westinghouse Electric Corp., 239 NLRB 106, 107 (1978). See, generally, the discussion supra. Absent any discussion of the issue under the Act, or a finding as to the relevancy of the material requested, Respondent has failed to meet its burden of proof and there is no basis for finding that the arbitrator explicitly or implicitly considered the issue under the Act. In the award issued December 28, the arbitrator denied the production of any other material on the ground that the material which had been produced was "adequate to enable the Union to properly administer the contract." It is conceivable that what the arbitrator had in mind here was a consideration of the Union's statutory responsibility of administering the contract as an aspect of its duty as the employees' exclusive bargaining repre- sentative.3 6 However, the argument, at best, only sup- ports the conclusion that the arbitrator made a finding as to relevancy regarding the information produced. It would require still an additional inference, not warranted or the basis of the language alone, to conclude that he made such a finding with respect to the additional re- quested information. In any event, I am not entitled to engage in speculation regarding what standard, if any, the arbitrator applied in determining that the Union's continued request for production of data should be denied when the arbitrator failed to make his reasoning explicit or to amplify his exceedingly brief ruling of De- cember 28.37 The fact remains that Respondent has failed to show that the arbitrator either considered or re- solved the question of the statutory responsibility of the Company to provide data reasonably and potentially nec- essary for the Union to fulfill its bargaining obligations. Even if the arbitrator could be held to have addressed the unfair labor practice issue, his conclusions are repug- nant to the Act. The Board has held that, where an arbi- trator's award is contrary to well established Board pre- cedent, the award will be deemed repugnant to the pur- poses and policies of the Act and not entitled to defer- ence under the Spielberg doctrine. See Alfred M. Lewis, Inc., 229 NLRB 757, 758 (1977), modified 587 F.2d 403 (9th Cir. 1978); Brewery Delivery Employees Local Union 46, etc. (Port Distributing Corp.), 236 NLRB 1175, 1178 (1978). In Alfred M. Lewis the employer instituted a pro- duction quota program without prior notice to the union, which affected the employees in terms of discipline and counseling. Grievances and unfair labor practice charges were filed as a result of this new system. Two arbitrators held that since the contract did not prohibit the company 3' See, e g, J. 1. Case (o. v. N. .R.B., supra at 1513 154. 31 See Banyard v. L.R.B., 505 F. 2d 342-349 (D.C. Cir. 1974) from instituting such programs they had not violated the agreement. Although the Administrative Law Judge de- ferred to the arbitrator's award, the Board noted that these decisions were contrary to Board precedent which has found such unilateral institution of work standards to be a refusal to bargain in violation of Section 8(a)(5). 229 NLRB at 757-758. As a result, the Board found that these arbitration awards were repugnant to the Act. Similarly, the arbitrator here, by ignoring the issue of the relevancy of the information sought by the Union, failed to follow well-established Board and court precedent in this area. It is clear from the arbitrator's first award that this standard was not employed. The award does not deny the Union's requests because the information was irrele- vant; rather, it does so on the grounds of confidentiality or unreasonableness. However, as earlier noted, employ- er contentions that the requested information is "confi- dential" have generally been rejected. In addition, Respondent, at the instant hearing, never contended that the information requested was irrelevant. The only contention implied was that the Union could discover the same information by using other public sources such as SEC filings. As earlier discussed, that ar- gument is unmeritorious. The Union is under no obliga- tion to utilize a burdensome procedure of obtaining de- sired information where the employer may have such in- formation available in a more convenient form. Thus, and for all of the foregoing reasons, no defer- ence may be accorded the arbitrator's interim awards. As I have concluded that the Union is entitled to production of the material sought, and as Respondent has, from its initial response, refused to comply, by its continuing con- duct it has engaged in and continues to engage in viola- tions of Section 8(a)(5) and (1) of the Act. I conclude that Respondent did not satisfy its bargain- ing obligation under the Act by producing for union ex- amination and audit only those books and records which the arbitrator found "relate more directly to the perti- nent contract clause regarding subcontracting." Based upon the foregoing analysis, I also conclude that each of the documents sought by the Union in its initial itemized demand and as later supplemented by it based upon its accountant's examination of those records which Respon- dent did produce3 8 constitute information which may be relevant to its task as bargaining agent as a matter of statutory right. The Union's exercise of this right thus re- quires production of those invoices which it may wish to check to determine and verify the source of any pur- chases or other transactions appearing on Respondent's ' IThe record fails to disclose whether Respondent in fact produced items 3 and 4 in the arbitrator's June 24 interim award. They are the list of all employees of the receiving department and all nonbargaining unit employees. Komorsky did testify that, when he sought additional data, he "as informed he had been provided with all the records he would be fur. riished Yet. Komorsky's testimony was concentrated on financial records ;Ind not employee lists To the extent the Union failed to include these lists among the documents on which it renewed its request before the ar- hitratolr on September 7, 1 am prepared to conclude that the Company did proside the lists for the Union's review and no useful purpose would he served hy requiring their producliton again in my proposed order herein 800 DESIGNCRAFT JEWEL INDUSTRIES. INC. books3 9 as well as the list of customers for all relevant periods,40 general ledger, general journal,4 1 chart of ac- counts, computer summary sheets, and all checkbooks or registers and accounts payable journals or purchase reg- isters, including those previously furnished, each of which may now be scrutinized by particular reference to the chart of accounts, general ledger, general journal, and computer summary sheets. This obligation survives the elimination of Respon- dent's waxing and casting operations, 42 and even the dis- continuance of all of its operations. 43 Upon review of the information to be produced, should the Union deter- mine to pursue the grievance through arbitration, a suc- cessful presentation before the arbitrator, depending upon the facts and circumstances then prevailing, could well result in monetary awards for employees and the Union and a requirement that the Company reinstate em- ployees whose layoff violated the subcontracting clause. 44 Of course, all such matters are clearly for reso- lution by the arbitrator under the parties' own agree- ment. Upon the basis of the foregoing finding of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. All production employees employed by Respondent at its New York, New York, facility excluding office and factory clerical employees, porters, messengers, watch- men, professional employees, and nonproducing foremen and all other nonproducing employees, and all supervi- sors as defined in Section 2(11) of the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein, the Union has been the exclusive collective-bargaining representative of the em- ployees described in paragraph 3 within the meaning of Section 9(a) of the Act. 5. By failing and refusing to permit an examination by the Union of its books to determine the status of its sales and to determine whether or not any subcontracting had been, or was being, done in violation of article XXXII of the collective-bargaining agreement, as requested on Jan- uary 22, 1979, and by failing and refusing to furnish the Union, or its accountants and agents, for examination, its list of customers, accounts payable journal, invoices from suppliers, checkbooks, general ledger, general journal, chart of accounts, and computer summary sheets, as re- quested on May 8, 1979, and on September 7, 1979, for a9 See Ellsworth Sheet Metal. Inc, 224 NRHB 1506. 1509 10 (1076) 40 See fn 22. supra and surrounding text. 41 Any modifications or corrections made in other books of original entry and general ledger will be recorded here 42 Trustees of Boston Universni. 210 N R 330) ' East Dayton Tx)l and D C(. 239 NRBt 141 (1978}: rmirnuage Sand and Gravel. Inc. 203 NI RB 102, 166 (1073) 44 See the discussion relating to the prior aluard and the tinioln's demand for arbitration i the current. suspended arbiltr;ltiton proceeding, supra. the period from January 1, 1978, to February 28, 1979, Respondent violated, and continues to violate, Section 8(a)(5) and (1) 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 Respondent has engaged in certain unfair labor practices, I find it necessary to order that Respondent cease and desist therefrom and that it take certain affirmative action designed to effectuate the poli- cies of the Act. Since Respondent has not made available certain of the various books and records which the Union has requested be produced for its examination and although having produced other books and records has not made available related documents which the Union has requested for its effective examination of them, I shall order that Respondent make available for examina- tion by the Union, or its accountants and agents, the books and records previously described in paragraph 5 of the Conclusions of Law. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER4 5 The Respondent, Designcraft Jewel Industries, Inc., New York, New York, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to furnish Amalgamated Jew- elry, Diamond and Watchcase Workers Union, Local I, International Jewelry Workers Union, AFL-CIO, or its accountants and agents, for examination, its list of cus- tomers, accounts payable journal, invoices from suppli- ers, checkbooks, general ledger, general journal, chart of accounts, and computer summary sheets, as requested on May 8, 1979, and on September 7, 1979, for the period from January , 1978, to February 28, 1979. (b) In any like or related manner interfering with, re- straining, or coercing its employees in the exercise of the rights guaranteed them under Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor organiza- tion as a condition of employment, as authorized by Sec- tion 8(a)(3) of the Act. 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Furnish to Amalgamated Jewelry. Diamond and Watchcase Workers Union, Local 1, International Jewel- ry Workers Union, AFL-CIO, or its accountants, for ex- amination, its list of customers, accounts payable journal, invoices from suppliers, checkbooks, general ledger, gen- eral journal, chart of accounts, and computer summary sheets, as requested on May 8, 1979, and on September 7, 4" I[l ti cci rlo exceptionl are filed as protllded by Sec 102 40 of the Rule, ailld Reulatiorisof lie Natiol al Labor Relations Boarid. lie findings, contclusorls a reconllllcndcdj Order herein shall. as pros . ied it) Sc 102 48 f Ih, Rules aiid Rtll;li ns, hbe adopted b the lit.:lardl and b elmte ils tlitnllluls. Ci1-tiil l s is, l ()ird ir r. rad l Il oiectiolls therelo shall he eilli saiscd for all purposes 801 802 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1979, for the period from January 1, 1978, to February thorized representative of Respondent, shall be posted by 28, 1979. Respondent immediately upon receipt thereof, and be (b) Post at its premises at New York, New York, maintained by it 60 consecutive days thereafter, in con- copies of the attached notice marked "Appendix." 4 6 spicuous places, including all places where notices to em- Copies of said notice, on forms provided by the Regional ployees are customarily posted. Reasonable steps shall be Director for Region 2, after being duly signed by an au- taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. ' In the event that this Order is enforced by a Judgement of a United (C) Notify the Regional Director for Region 2, in writ- States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ing, within 20 days from the date of this Order, what ant to a Judgment of the United States Court of Appeals Enforcing an steps Respondent has taken to comply herewith. Order of the National Labor Relations Board."