Charles Sportswear Mfg.

CHARLES SPORTSWEAR MFG. CO. Werner Kallman d/b/a Charles Sportswear Manufac- turing Company and Los Angeles Joint Board of the International Ladies' Garment Workers' Union, AFL-CIO. Case 21-CA-14283 August 30, 1977 DECISION AND ORDER BY MEMBERS JENKINS, MURPHY, AND WALTHER On November 2, 1976, Administrative Law Judge Bernard J. Seff issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Respondent filed a brief in opposition to the General Counsel's exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,' and conclusions 2 of the Administrative Law Judge only to the extent consistent herewith. THE REMEDY Having found that Respondent had engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist therefrom and that it take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent has failed and refused to sign the collective-bargaining agreement embodying terms of an oral agreement reached on November 13, 1975, we shall order that, upon request, Respondent sign said collective-bargaining agreement forthwith. In addition, we shall order that Respondent give effect to the terms of said agree- ment retroactive to October 1, 1975, and shall make i The Administrative Law Judge inadvertently omitted a line from the first paragraph of the portion of his Decision titled "I. Jurisdiction." Insert after the word "directly" and before the word "commerce" "to customers located outside the State of California and is, therefore, an employer engaged in." In the third paragraph of the section of the Administrative Law Judge's Decision titled "Respondent's Defenses," the Administrative Law Judge referred to Respondent's position on increases as having been justified by a cost-of-lis ing index of 5 points, when actually the contention was that it rose 5 percent. 2 No exceptions were filed to the Administrative Law Judge's conclu- sions that Respondent violated Sec. 8a}(5) and (1) of the Act. While the Administrative Law Judge found that complete agreement on the terms of a collective-bargaining contract had been reached by the parties, he failed to specify the date of such agreement. Based on the entire record herein, we find that agreement was reached on November 13. 1975. The Administrative Law Judge's proposed Remedy and Order also fails to require that 231 NLRB No. 130 employees whole for any losses they may have suffered by reason of its failure to execute and sign the aforesaid agreement with interest thereon to be computed in the manner prescribed in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), and Florida Steel Corporation.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Werner Kallman d/b/a Charles Sportswear Manu- facturing Company, Anaheim, California, his agents, successors, and assigns, shall: 1. Cease and desist from: (a) Granting unilateral wage increases without consultation with the Union. (b) Refusing to sign a written contract embodying terms of an oral agreement reached on November 13, 1975, with Los Angeles Joint Board of the Interna- tional Ladies' Garment Workers' Union, AFL-CIO. (c) Failing and refusing to give effect to the terms and provisions of the agreed-upon collective-bargain- ing agreement with the above-named Union from the date on which it was agreed that the contract take effect. (d) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Upon request sign the collective-bargaining agreement described in paragraph I(b), above. (b) Give effect to the terms of the bargaining agreement described in paragraph 1(b), above, retroactive to October 1, 1975, and make the employees whole for any losses they may have suffered in consequence of its failure to execute and sign the aforesaid agreement, with interest as set forth in the section herein entitled "The Remedy." (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, Respondent (1) sign that agreed-to contract, and (2) make whole the employees for any losses they may have suffered by its refusal to execute and give effect to the agreement, from October 1. 1975, the effective date of the agreed-to contract. Accordingly. we shall issue an Order and notice to conform to the violations found. We also note the Administrative Law Judge's erroneous statement that majority status of a noncertified union is presumed for I year after a settlement agreement is reached. Rather, that status is presumed for a reasonable period after such an agreement is signed. See Poole Foundry and Machine Company. 95 NLRB 34 k1951), enfd. 192 F.2d 740 (C.A. 4. 1951). This does not, however. affect our conclusions herein. I In accordance with our decision in Florida Sreel Corporation. 231 NLRB 651 (1977), we shall apply the current 7-percent rate for periods prior to August 25, 1977, in which the "adjusted prime interest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 percent. 797 DECISIONS OF NATIONAL LABOR RELATIONS BOARD all payroll records, social security payment records, contracts, personnel records and reports, and all other records necessary or useful to an anlysis of the amount of backpay due under the terms of this Order. (d) Post at its place of business at Anaheim, California, copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Region 21, after being duly signed by Respondent's representa- tive, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respon- dent to ensure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 21, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply here- with. In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL fulfill our obligation to bargain collectively with the Los Angeles Joint Board of the International Ladies' Garment Workers' Union, AFL-CIO, as the exclusive representative of our employees in the bargaining unit described below by signing a written contract embodying terms of an oral agreement reached with the Union on November 13, 1975, effective as of October i, 1975. The bargaining unit is: All of our employees employed at our Anaheim, California plant, excluding guards, professional employees and supervi- sors as defined in the Act. WE WILL reimburse our employees covered by the above-noted agreement for any monetary losses they may have suffered by our past refusal to sign the above-noted agreement, with interest. WE WILL give effect to the terms of the above- noted agreement from its effective date of October 1, 1975. WE WILL NOT refuse to sign the collective- bargaining agreement which we agreed to on November 13, 1975. WE WILL NOT grant wage increases without consultation with the Union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of rights guaranteed by the National Labor Relations Act. WERNER KALLMAN D/B/A CHARLES SPORTSWEAR MANUFACTUCRING COMPANY DECISION STATEMENT OF THE CASE BERNARD J. SEFF, Administrative Law Judge: This case was heard in Los Angeles, California, on April 22, 1976. The complaint alleges that Werner Kallman d/b/a Charles Sportswear Manufacturing Company, herein called Re- spondent, committed violations of Section 8(a)(l) and (5) in that certain wage increases were granted without consultation with the Union and, although the parties appeared to have reached full agreement on a collective- bargaining agreement, the president of Respondent Com- pany never signed this agreement. Respondent contends that no final agreement has ever been reached on the terms and conditions of the contract and denies the commission of any unfair labor practices. Upon the entire record, including my observation of the witnesses, and after due consideration of the posthearing briefs filed by both parties, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent has been engaged in the manufacture of clothing for various clothing manufacturers and has maintained facilities at 307 North Euclid Street, Anaheim, California. Respondent annually renders services valued in excess of $50,000 to companies located in the State of California, each of which, in turn, annually sells and ships goods and products valued in excess of $50,000 directly [see fn. I of the Board's Decision and Order in this proceeding] commerce within the meaning of Section 2(6) and (7) of the Act. Los Angeles Joint Board of the International Ladies' Garment Workers' Union, AFL-CIO, herein called the Union, is and has been at all times material herein a labor organization within the meaning of Section 2(5) of the Act. All of Respondent's employees employed at its Anaheim, California, plant, excluding guards, professional employ- ees, and supervisors, as defined in the Act; constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 798 CHARLES SPORTSWEAR MFG. CO. II. THE ALLEGED UNFAIR LABOR PRACTICES A. Background On March 18, 1974, Kallman, president of the Company, executed a recognition agreement. After the recognition agreement was signed, Respondent and the Union entered into negotiations. Inconclusive negotiations caused the Union to file unfair labor practice charges which resulted in a settlement agreement being executed by the parties and approved by the Regional Director for Region 21 on March 21, 1975. The first negotiation meeting attended by Silverstein (union representative) took place on May 5, when Silver- stein met with the Company's attorney, Schmidt, at the Union's office. The General Counsel contends that the Respondent and the Union came to a tentative agreement over holidays, vacations, retirement, health and welfare, bereavement leave, break periods, and call-in pay. The parties did not reach agreement on jury duty, workmen's compensation waiting period, initial wage increase, length of workweek, and the effective date of the contract. A second meeting between Silverstein and Schmidt was held on July 31 at the office of the Union's attorney. The parties went over the items which had been discussed at the May 5 meeting and concentrated on those items on which they could not agree. The Union abandoned its demands for sick leave, jury duty leave, and a decreased workmen's compensation waiting period. The parties agreed to a 40- hour workweek instead of 35 and to a cost-of-living increase based on 5 points rather than 3 points on the cost- of-living index. It is undenied that at the end of the meeting the only two issues remaining unresolved were the amounts of the wage increases and the effective date of the contract. There is some question concerning whether the subject of Respondent's becoming a manufacturer was discussed at this meeting. However, it is clear and uncontroverted that nothing was said to the Union to the effect that the signing of any contract was contingent upon Respondent's becom- ing a manufacturer. B. The Negotiation Meetings On August 13, a third negotiation meeting was conduct- ed among Schmidt, Silverstein, Feinberg, and Kallman in Schmidt's office. Initially, the parties discussed the am- ounts of the wage increases and came to an agreement on an increase of 15 cents per hour for hourly paid employees at the effective date of the contract and a 15-cent increase for hourly paid employees on the anniversary dates of the contract thereafter. With respect to the piece rate workers, the parties agreed to a 6-percent increase on the effective date of the contract, with 6-percent increases on the anniversary dates thereafter. The parties then engaged in a discussion of the effective date of the contract, with the Union insisting that the effective date should be determined to be as of the date of the signing of the agreement. Respondent presented a counterproposal, but since it was contemplating going into manufacturing, and inasmuch as an immediate effective date would be a problem to it, it requested the Union to be a little lenient and give it an effective date of October 1. This request of Respondent was agreed to by the Union as to the effective date. Following the August 13 meeting, Feinberg began preparing the contract in accordance with the terms of the agreement reached on August 13, and on September 10 turned copies of the agreement over to Silverstein for Schmidt's signature. Schmidt notified Region 21 of the impending agreement by letter dated August 19. The contract prepared by Feinberg is alleged by the General Counsel to accurately set forth the agreement reached on August 13, except for the minimum hourly wage rates discussed on page 3 and the figures used for quarterly reports for union funds set forth on page 7(a) which were filled in by Silverstein just prior to forwarding it to Schmidt. Upon receipt of the contract by Silverstein, he immedi- ately forwarded copies to Schmidt. After waiting for approximately 2 weeks without hearing from Schmidt, Silverstein called his office and found that Schmidt had not received a copy of the agreement. Thereafter, Silverstein caused a copy of the contract to be hand delivered to Schmidt. Again, after not hearing from Schmidt, Silverstein called his office. Silverstein asked if Schmidt had signed the contract, to which Schmidt replied that he had not since he had not yet discussed it with Kallman. Arrangements were then made for a meeting at Schmidt's office on November 13. On November 13, Silverstein and Business Agent Carlo Leone met with Schmidt at Schmidt's office. Silverstein asked Schmidt about Kallman's absence and was advised that Kallman was too busy to be there. Silverstein asked how they could conclude a contract because Kallman was not there, and Schmidt advised that he had full authority to negotiate. Schmidt said he had a series of modifications he wanted to make in the contract and then explained the following five new terms: (I) a change in the name of Respondent to Kallman Investment, Inc.; (2) a guarantee that Kallman's son, in the cutting service business at the same location, would not be bound by the contract; (3) an expansion of the geographical limitations imposed by the agreement for plant relocation to 15 miles; (4) a right of Respondent to work for nonunion jobbers in the event he could not get enough work from union jobbers; and (5) a right of Respondent to subcontract work to nonunion shops, provided there was a continuity of work within Respondent's shop. Silverstein agreed to all of the changes and advised Schmidt he would take the contract back for revision to conform with the proposed five changes. Similarly, as during the other meetings, nothing was said during the November 13 meeting to the effect that the signing of the contract by Respondent was contingent upon its becoming a manufacturer. The contract was redrafted, incorporating the changes requested by Respondent, and Leone contacted Schmidt and made an appointment to meet with him on January 5, 1976. Leone met with Schmidt at Schmidt's office on January 5, 1976, and gave him the contract. Schmidt looked over the agreement and said that it looked fine. Leone asked if there was anything else or any problems, to which Schmidt replied no. Leone asked if Schmidt could sign it and 799 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Schmidt said no, he would have to talk to Kallman about it just in case there was something else in the contract. Leone advised that was fine, but could they make another appointment. They agreed to the date of January 15, 1976, and Leone left Respondent attorney's office. From Schmidt's office Leone went directly to Kallman's shop where he met with him briefly at the shop door. Leone told Kallman that he had just come from his lawyer's office with the contract and Kallman advised that he was just getting in. Leone said everything that Kallman wanted was in the contract, and was there anything else Kallman wanted to talk about, or for Leone to take back to Silverstein. Kallman said he wanted to talk it over with his lawyer and did not want to sign then. He further said that he did not know if he was going to be a manufacturer or not and was losing money and was going to talk to his lawyer to see what to do about it. Kallman said he had been a member of the Union for years, he knew how it was run, but at that time he did not want to sign anything and he wanted to talk to his lawyer. Leone said that was okay and they had a meeting scheduled for January 15, 1976, and if Silverstein could make it, he would be there. Kallman confirmed that when Leone came to his premises on January 5, 1976, he told him that he was not going to sign anything unless someone held his hand and said it was okay. Additionally, Kallman testified that in January 1976 he was in no position to sign anything. General Counsel calls attention to the fact that it is uncontroverted that this was the first time Respondent asserted that it would not sign a contract until it became a manufacturer. Shortly before the meeting scheduled for January 15, 1976, Schmidt advised Leone that the meeting would have to be canceled because Kallman had been injured and could not attend. There has been no further contact between the parties since that time. Respondent's Defenses Respondent's defenses consist of a two-pronged argu- ment to the effect that (1) more than I year has elapsed since the signing of the original recognition agreement on March 18, 1974, and (2) the signing of a collective- bargaining agreement prior to Respondent's entering the the field of manufacturing would be tantamount to financial suicide in that (a) Respondent's existing business took a downturn during the last half of 1975, and (b) Respondent's customers would seek other contractors merely because Respondent had become a union shop. Respondent also argues that the bargaining unit is not an appropriate unit. This must have been a sheer afterthought because the settlement agreement sets forth the bargaining unit which is the same as that described, supra. The law is clear that, upon reaching agreement for settlement, the normal 1-year continued majority status would last until the year after the settlement agreement was reached. Furthermore, no mention of the bargaining unit was made by Respondent in the course of the bargaining negotia- tions. Respondent's question concerning the appropriate- ness of the bargaining unit is an argument without merit. It is apparent from the events which transpired during the negotiations that Respondent engaged in a protracted period of bad-faith bargaining. It raised a number of objections to the Union's proposed contract, such as asking that the workweek be 40 hours instead of 35 and that the cost-of-living increase should be an increase after every elevation in the cost of living of 3 points, whereas the Company requested that it be 5 points. The Union conceded the changes requested by Respondent and, despite this fact and despite the further fact that the Company acceded to the Union's request for a 15-cent-per- hour increase, the Company still refused to sign the contract. It was also admitted on the record that the Company granted a number of 15-cent-per-hour increases without consultation with the Union. These activities constitute a clear violation of the duty to bargain about wage increases, since these changes in the wage structure were not discussed with the Union, but were instituted on a unilateral basis. Both because of the granting of unilateral wage increases and the further fact that the Company refused to sign the contract when complete agreement took place, the Compa- ny engaged in violations of Section 8(a)(l) and (5). I so find. CONCLUSIONS OF LAW 1. Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Los Angeles Joint Board of the International Ladies' Garment Workers' Union, AFL-CIO, is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. Respondent has violated Section 8(a)(1) and (5) of the Act. THE REMEDY Having found that Respondent has violated the Act in certain respects, I shall recommend that it be required to cease and desist therefrom. In addition I shall recommend that Respondent be required to reimburse all employees for the wage increase they would have received if Respondent had lived up to the agreement it reached with the Union. [Recommended Order omitted from publication.] 800