Liberal Market, Inc. The

THE LIBERAL MARKET. INC The Liberal Market, Inc. and General Truck Driv- ers, Chauffeurs, Warehousemen and Helpers of America, Local Union 957, affiliated with the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America. Case 9-CA-13037 September 30, 1982 DECISION AND ORDER BY MEMBERS JENKINS, ZIMMERMAN, AND HUNTER On February 12, 1981, Administrative Law Judge Joel A. Harmatz issued the attached Deci- sion in this proceeding. Thereafter, the General Counsel, the Charging Party, and Respondent filed exceptions and supporting briefs, and Respondent filed an answering brief. On July 14, 1981, the Board issued a notice of opportunity to submit statements of position regarding the impact on this proceeding of the U.S. Supreme Court's opinion in First National Maintenance Corporation v. N.L.R.B.' Thereafter, the General Counsel and Respondent filed statements of position. 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, briefs, and statements of position and has decided to affirm the rulings, findings,2 and conclusions of the Administrative Law Judge, as modified herein, and to adopt his recommended Order. The complaint alleges that Respondent violated Section 8(a)(5) and (1) by closing its warehouse and garage operation without affording the Union an opportunity to bargain about the decision to close and by negotiating its most recent contract covering the warehouse and garage units although it knew it intended to eliminate those units. The Administrative Law Judge recommended that the complaint be dismissed in its entirety. In so doing, he concluded that it was appropriate under Spiel- berg Manufacturing Company, 112 NLRB 1080 (1953), to defer to an arbitrator's award which found that Respondent had no obligation to bar- 452 U.S. 666 (1981). 2 The Charging Party contends that the Administrative Law Judge's findings and conclusions are the result of bias and prejudice. After a care- ful examination of the entire record, we find no merit in this contention. Although the Administrative Law Judge's expression of views in the early stages of the hearing, and allegedly prior to the opening of the hearing, were overly broad and do give us some concern, we do not find that the Charging Party thereby was denied due process. We note in this regard that the Administrative Law Judge afforded all parties full oppor- tunity to adduce evidence bearing on the issues and to develop a com- plete record. 264 NLRB No. 109 gain about the decision to close and that it had not bargained in bad faith by failing to reveal the con- templated closure during negotiations. Thus, the Administrative Law Judge found that the arbitra- tion proceedings were fair and regular, that all par- ties had agreed to be bound by such proceedings, that the arbitrator specifically had addressed the unfair labor practice issues raised in the complaint, and that the arbitrator's resolution of these issues was not "repugnant to the policies of the Act." We agree that deferral to the arbitrator's award is ap- propriate, for the following reasons. The determination of whether an employer has a duty to bargain over a decision to close a portion of its operations involves a delicate balancing of several competing interests. Under the facts pre- sented here, whether Respondent had a duty to bargain about the decision to terminate its ware- house and garage operation would have been a close question under Board precedent prior to the Supreme Court's opinion in First National Mainte- nance, and would present an even more difficult question since the issuance of that opinion. Al- though, as noted by the Administrative Law Judge, various Board members have expressed differing views as to the appropriate standard to be applied in determining whether an arbitrator's award is "repugnant" to the Act, in our opinion it cannot be said that the arbitrator's resolution of the duty-to- bargain issue here is repugnant to the policies of the Act, especially in light of the Supreme Court's First National Maintenance opinion. Further, for the reasons set forth by the Administrative Law Judge, we also find not repugnant to the Act the arbitrator's conclusion that Respondent did not bar- gain in bad faith by failing to disclose, during nego- tiations, its consideration of closing the warehouse and garage operation. Accordingly, we shall defer to the arbitrator's award and dismiss the complaint in its entirety.3 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 complaint herein be, and it hereby is, dismissed in its entirety. MEMBER JENKINS, dissenting: Contrary to my colleagues, I would not defer to the arbitrator's award. Moving to the merits of the 3 In view of our Decision herein, we find it unnecessary to reach the Administrative Law Judge's general discussion of the circumstances under which the Board will defer under Spielberg. 807 DECISIONS OF NATIONAL LABOR RELATIONS BOARD complaint, I would find that Respondent violated Section 8(a)(5) and (1) of the Act as alleged. In my view, and contrary to the majority, there is no question but that under Board law prior to the Supreme Court's opinion in First National Maintenance, supra, Respondent was obligated to bargain regarding the decision to close its ware- house and garage operation. Indeed, although my colleagues would have it otherwise, the 8(a)(5) complaint on the instant facts would not have pre- sented a "close" question. Thus, a key factor in cases involving partial closing is the nature of the relationship between the closed portion and the re- maining business operation. In this respect the facts here are similar to those in Ozark Trailers, Incorpo- rated, 161 NLRB 561 (1966). In Ozark, the employ- er was engaged in the manufacture, distribution, sale, and service of refrigerated truck bodies. It shut down an integrated portion of its total oper- ation, a plant which manufactured some of its truck bodies, and contracted out this work to another firm. Based on Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203 (1964), in which the Court held that the Act required bargaining about a deci- sion to subcontract, the Board concluded that the employer had a duty to bargain regarding its deci- sion to close a portion of its integrated operations. The Board found that the employer's partial clos- ing decision was subject to collective bargaining because its decision, like decisions to subcontract, was of "vital concern to both labor and manage- ment." In addition, the Board found that problems of labor cost and other terms and conditions of em- ployment-factors which were relied on by the employer in deciding to close the plant-were tra- ditional subjects of bargaining and thus were sus- ceptible to resolution through negotiations. Here, Respondent operates a chain of retail gro- cery stores which it supplied for many years through its warehouse and delivery trucks. As the Administrative Law Judge found, the warehouse and garage operation was an integral part of Re- spondent's retail business. Respondent did not pro- vide wholesale grocery items, warehouse space, or delivery service to any other company. Respondent now has closed this integral portion of its total op- eration and contracted with an outside firm to pro- vide identical services. The decision to close was based in significant part on Respondent's negotiat- ed labor costs and was obviously of vital concern to the employees who lost their jobs. Thus, based on Ozark, Respondent clearly had a duty to bar- gain about the decision to close its warehouse and garage operation.4 Nor does the Supreme Court's opinion in First National Maintenance in any way undermine the continuing validity of Ozark, especially as applied to the present case. I note that the Court's holding in First National Maintenance is limited specifically to the particular facts of that case, which were dramtically different from those in Ozark and those herein. Thus, in First National Maintenance, unlike Ozark or the present case, the employer had no in- tention of utilizing the services of another employ- er to perform work previously done by its dis- charged employees, the union could play no signifi- cant role in resolving the employer's economic dif- ficulty, the employer did not abrogate ongoing ne- gotiations or an existing contract, and the closing did not change the employer's operations in a way similar to the opening of a new line of business or to going out of business. Additionally, the Court in First National Maintenance specifically did not overrule Fibreboard. Thus, Supreme Court decisions now define the outer bounderies of the law with respect to an em- ployer's obligation to bargain about a decision to cease a portion of its operations. Balancing the em- ployer's management rights, the employees' em- ployment and collective-bargaining rights, and the relative efficacy of bargaining over a particular de- cision, the Court, in Fibreboard and First National Maintenance has identified specific situations where an employer must bargain and where it need not bargain, respectively. Of course, on the spectrum between Fibreboard and First National Maintenance, there are myriad factual situations involving partial closings. Whatever the limit of an employer's obli- gation to bargain regarding such decisions, I think it evident that the facts presented in Ozark and in the present case are quite close to the Fibreboard end of the spectrum. In fact, it is frequently diffi- cult to draw a clear line between a Fibreboard-type subcontracting and an Ozark-type partial closing.5 See National Family Opinion, Inc., 246 NLRB 521, 526 (1979). In concluding that this Respondent did not have a duty to bargain, the arbitrator relied on the Summit Tooling Company6 line of cases which 4 I note that the Administrative Law Judge's analysis of the facts and case law led him to the identical conclusion regarding the controlling au- thority herein. AWD, sec. II,C, par. 6. s Indeed, the Administrative Law Judge found that Respondent's warehouse and garage closing "had all the earmarks of classic contract- ing out of functions historically performed on an in-house basis with the use of payroll employees to employees of an independent contracting firm." ALJD, sec. Ill,C, par. 6. 6 195 NLRB 479 (1972). 808 THE LIBERAL MARKET, INC. holds that an employer had no duty to bargain about a decision to close an entire business oper- ation which is separate and distinct from another business run by the same employer.7 However, the arbitrator merely asserts that the Summit Tooling line of cases is controlling without providing any relevant specific factual findings to support his con- clusion that the present case is similar to Summit Tooling. As noted above, there is no evidence whatsoever that Respondent's warehouse and garage operation was a business separate and dis- tinct from its retail stores. In fact, all the evidence points to exactly the opposite conclusion. Thus, be- cause the arbitrator's award is inconsistent with and contrary to the applicable Board precedent, I find the repugnant to the Act and I would not defer to it under Spielberg. Finally, for the reasons discussed above, I also would find that under the applicable Board case law, Respondent violated Section 8(a)(5) and (1) by refusing to bargain about the decision to close its warehouse and garage op- eration. I would find further that Respondent's failure, during negotiations, to notify the Union that it was considering closing the warehouse and garage op- eration violated Section 8(a)(5) and (1). The par- ties' negotiations for the most recent contract began in April and continued through the end of July 1978. In June 1978, Respondent decided to analyze its warehousing and delivery costs as com- pared to purchasing its stock from wholesalers. By July, it had discovered that it would have saved over $400,000 in the fiscal year which ended April 30, 1978, had it bought directly from wholesalers. Near the end of July, figures covering roughly the first quarter of Respondent's then current fiscal year indicated its warehouse and delivery costs had increased 19 percent and 46 percent, respectively, over the previous year. After agreement was reached on a new contract, Respondent calculated the additional costs it would incur to be in excess of $160,000 each year over the next 3 years. Thus, prior to agreeing to the new contract, Re- spondent knew the cost of its warehouse and garage operation was rising dramatically and, therefore, that the closing of that operation was in- creasingly likely. In this context, by agreeing to a contract which raised its labor costs by an addi- tional $160,000 each year, Respondent was assuring that closing its warehouse and garage operation would be the only reasonable alternative and, pre- dictably, Respondent closed that operation very 7 See also Grey-Grimes Tool Company. Inc.. 221 NLRB 736 (1975), and Kingwood Mining Company, 210 NLRB 844 (1974). As noted in my dis- sent in Kingwood, I do not believe that the rationale of Summit Tooling should have been applied to the facts of Kingwood. shortly after computing the additional wage costs under the new contract. Thus, by failing to inform the Union of the probable consequences of in- creased wages under the new contract, Respondent essentially lulled the Union into assenting to a con- tract which assured the demise of the bargaining units covered by the agreement. Respondent there- by, in clear violation of the Act, made a sham of the bargaining process. See Vac-Art, Inc., 124 NLRB 989 (1959), and Royal Plating & Polishing Co., 148 NLRB 545 (1964). 1 find the arbitrator's conclusion to the contrary is repugnant to the Act and not entitled to deferral. Accordingly, I would reach the merits of this complaint allegation and would find that Respondent's failure to notify the Union of its contemplated closing of the warehouse and garage operation constituted bad-faith bargain- ing in violation of Section 8(a)(5) and (1). DECISION STATEMENT OF THE CASE JOEl. A. HARMATZ, Administrative Law Judge: This proceeding was heard by me upon an unfair labor prac- tice charge filed on October 3, 1978, and a complaint issued on June 26, 1979, alleging that Respondent violat- ed Section 8(a)(5) and (1) of the Act by, during the course of collective-bargaining negotiations, concealing its intention to eliminate the collective-bargaining units covered thereby, and thereafter by announcing the elimi- nation of said collective-bargaining units without afford- ing the charging Union the opportunity to negotiate with respect to its decision in that regard. In its duly filed answer, Respondent denied that any unfair labor practices were committed and specifically set forth certain affirmative defenses. Consistent there- with, on October 10, 1979, Respondent filed with the Board in Washington, D.C., a Motion for Summary Judgment submitting that all issues relevant to the unfair labor practice allegations in said complaint were resolved by an arbitrator and that the Board should defer to said opinion and award inasmuch as it satisfied the standards set forth in Spielberg Manufacturing Company, 112 NLRB 1080 (1955). By Order dated March 26, 1980, the Board, Member Penello dissenting, expressed that the matter in controversy raised "substantial and material issues which can best be resolved at a hearing before an administrative law judge." At the same time, the Board indicated that the denial of Respondent's Motion for Summary Judg- ment was without prejudice to renewal of the Spielberg defense before an administrative law judge. Pursuant thereto, a hearing in the above proceeding was held before me in Dayton, Ohio, on September 22, 1980. Following the close of the hearing, briefs were filed on behalf of the General Counsel and Respondent. Upon the entire record in this proceeding and consid- eration of the post-hearing briefs, it is hereby found as follows: 809 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT I. JURISDICTION Respondent is an Ohio corporation engaged in the processing, distribution, and retail sale of grocery, meat, and related products from numerous retail grocery stores located in several States, including the State of Ohio. During the 12-month period preceding issuance of the complaint, a representative period, Respondent derived $500,000 in gross revenues from said operations, and pur- chased and received goods and materials valued in excess of $50,000, which were shipped to its Ohio facilities di- rectly from points located outside the State of Ohio. The complaint alleges, the answer admits, and I find that Respondent is, and has been at all times material herein, an employer within the meaning of Section 2(2) of the Act, engaged in commerce and in operations af- fecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVO LVED The complaint alleges, the answer admits, and I find that General Truck Drivers, Chauffeurs, Warehousemen and Helpers, Local Union 957, affiliated with the Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, is, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues This case presents a difficult issue as to whether the Board should exercise its discretion to give binding force to an arbitration award which specifically disposed of the very allegations set forth in the Instant unfair labor practice complaint. See Spielberg Manufacturing Compa- ny, supra. Following the arbitration, the General Counsel in comport with the procedure authorized in Dubo M.anu- facturing Corp., 142 NLRB 431 (1963), instituted said complaint, assertedly because under the Spielberg doc- trine the arbitrator's award was not entitled to deference because it was "repugnant to the policies of the Act." Thus, over strong objection on behalf of Respondent, the General Counsel urges that, on the instant record, it be found that Respondent violated Section 8(a)(5) and (1) of the Act, (i) by concealing during contract negotiations possible elimination of the very units in which bargaining was taking place, and further (ii) by unilaterally deciding to eliminate said units while denying the Union the op- portunity to negotiate with respect to its decision in that regard. B. The Basic Facts Respondent operates a chain consisting of a number of retail grocery stores in Southwestern Ohio and Northern Kentucky. Employees at all of said outlets have been represented for collective-bargaining purposes by labor organizations affiliated with the AFL-CIO. This controversy emerges from two grocery ware- houses and a garage located in Dayton, Ohio, referred to as the Victory Street and Concord Avenue facilities. The warehouses inventoried grocery products for distribution to the retail stores and the garage serviced Respondent's delivery vehicles. Respondent also operated a meat distribution center in Dayton, Ohio, which warehoused meat and dairy prod- ucts for distribution to the retail stores. Employees at that location were also represented by an AFI.-CIO af- filiate. The Charging Party had represented the employees at Victory Street and Concord Avenue facilities for a number of years in separate appropriate collective-bar- gaining units consisting of warehouse employees on the one hand and mechanical-maintenance employees on the other. The contracts that had emerged through collec- tive bargaining for such employees, though separate, were substantially identical in all material respects. During the spring of 1978, Respondent and the Charg- ing Party commenced contract renewal negotiations. Be- tween April 27 and July 27, 1978, the parties engaged in negotiations, with seven separate sessions conducted until a tentative agreement was reached on the latter date. On July 28, 1978, the tentative agreement was approved; it was ratified by the employees on July 30, 1978, with an effective date of August 1, 1978.1 A few days later, on August 12, 1978, the Charging Union was served by Respondent with a letter, reciting as follows: Pursuant to the requirements of Article III, Sec- tions 4 and 5, of our current collective-bargaining agreement, the Liberal Market, Inc., hereby gives the Union written notice of its intentions to close the Concord Avenue warehouse and Victory ware- house and garage effective at the close of business, December 9, 1978. Further, the Liberal Market, Inc., offers to nego- tiate with the Union regarding all conditions per- taining to the closure as it affects any bargaining unit employee. Please contact me regarding this at your earliest opportunity. The Union was orally informed that while Re- spondent was prepared to negotiate regarding the impact of the closing upon the employees, it would not bargain with respect to the decision itself. In October 1978, phase out operations began in con- nection with the Victory Street facility and on Decem- ber 9, 1978, similar operations began at Concord Avenue. Thereafter, Respondent purchased its merchandise re- quirements from Super Value, Inc., an independent ware- house operation servicing retailers in the area. On October 3, 1978, the Charging Union filed the unfair labor practice charge giving rise to this proceed- ing. Subsequently, on October 18, 1978, the Union initiat- ed a grievance which resulted in the appointment of I The agreement was not actually signed until August 3, 1978. 810 THE LIBERAL MARKET, INC. David L. Beckman, as an arbitrator to resolve the matter under the contractual grievance procedure. Pursuant thereto, on November 30, 1978. the Regional Director for Region 9 informed the Charging Party and Respond- ent that investigation of the unfair labor practice charge pending before the Board "should be held in abeyance and should be deferred to the grievance-arbitration ma- chinery pursuant to the policy set forth in Dubo Manu- facturing Corp., 142 NLRB 431." The hearing before the arbitrator took place on De- cember 5 and 16, 1978. His award issued on February 14, 1979. C. Concluding Findings Of the issues resolved by the arbitrator, two were sub- stantively indistinct from those raised by the instant com- plaint.2 Thus, he concluded that Respondent's conceal- ment during negotiations of its considerations concerning an alternative to continued operation of the warehousing and garage functions did not warrant a finding that Re- spondent was guilty of bad-faith bargaining. The arbitra- tor further determined that under Board precedent. Re- spondent had no duty to bargain with respect to its deci- sion to eliminate said operations. The threshold question is whether said award, and its rejection of the unfair labor practice allegations presently in issue should be disregarded so as to afford the Union independent determination by the Board. At the outset it is noted that Respondent's assertion to the contrary is compatible with, and finds its roots in, a comprehensive national labor policy dedicated to the resolution of indus- trial disputes through peaceful processes. Access to the National Labor Relations Board weighs heavily within that overall design. Yet those processes do not stand alone. For voluntary arbitration has been endorsed by both the judiciary, acting under the auspices of Section 301 of the Act, and the National Labor Relations Board, as a dispute settlement medium, which, if encouraged, would contribute to a lessening of industrial strife. Yet, acceptance of arbitration signaled the opportunity for protracted delays in dispute settlement. Many labor- management disputes would thereby fall potentially within the jurisdiction of multiple forums; namely, the courts, the Board, and that afforded through contract ar- bitration. The delay and waste attendant in access to multiple forums had been reckoned with in the past and was not unfamiliar. Concepts had evolved previously whereby separate dispute settlement systems, if appropri- ate, would be required to recognize the exclusivity of the other. To that end the Supreme Court, in an effort to reduce conflicts between the National Labor Relations Board and the courts, approved the doztrine of preemp- 2 The arbitrator in his award defined the issues before him in material part as follows: (2) Did the Company violate the National Labor Relations Act in view of the allegations by the Union that the Company: .. (I) failed and refused to negotiate concerning its "decision to close the warehouse and to subcontract" the warehouse work; and (2) engaged in bad faith negotiations by signing the 1978-1981 labor agreement with the "intention of unilaterally terminating said agreement prior to its expiration date?" tion or primary jurisdiction,3 to restrict the court's from intruding with respect to areas "arguably" delegated by Congress to an expert administrative body. Similarly, with the advent of arbitration, the Court articulated a "presumption of arbitrability" to remove temptation from within the judiciary to usurp the authority contractually conferred upon arbitrators, by themselves deciding the merits of grievances under the guise of determining arbi- trability. 4 In 1955, the Board, in like spirit, seemingly pioneered the effort to extend deference to the arbitral process as an exclusive means of dispute settlement in ap- propriate cases. At that time, the Board in its discretion narrowed the opportunity for a party to renege on assent and revitalize by unfair labor practice charges grievances adversely resolved with apparent finality through con- tractual dispute settlement machinery. Thus, through its Spielberg decision of that year, the Board announced that it would yield to the arbitral process and afford conclu- sive weight to the results thereof if said proceeding ap- peared to have been fair and regular, if all parties had agreed to be bound thereby, and if the decision of the arbitrator was not "clearly" repugnant to the purposes and policies of the Act. With the foregoing in mind, it is noted that in this case, the General Counsel concedes that the arbitration proceeding was fair and regular and that all parties agreed to be bound. Furthermore, the arbitrator rejected the Union's grievance on all counts in a written award which specifically addressed itself to the very issues raised by the complaint in this proceeding. Nonetheless the finality thereof is contested by the General Counsel on grounds that the arbitrator failed to draw proper con- clusions from the facts presented to him and that he mis- applied and misinterpreted Board law in reaching his conclusions. Thus, it is argued that the award was repug- nant to statutory policy as those terms are used in Spiel- berg, supra, 5 s See, e.g., Joseph Garner et al. v. Teamsters Chauffeurs and Helpers Local Union No. 776 (AFL), 346 U.S. 485 (1953). 4 See. e.g., United Steelworkers of America v. Warrior & Gulj .avigation Co., 363 U.S. 574 (1960); United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960); United Steelworkers of America v. Enterprise Wheel d Car Corp., 363 U.S. 593 (1960). 5 It is necessary to point out that the Union, before the arbitrator, did not restrict the remedy it sought to the rights conferred under the Na- tional Labor Relations Act. In addition it was urged that the Employer's action in refusing to bargain over the decision to close violated the gov. erning collective-bargaining argument. From the structure of the award and the manner in which it was organized, it does not appear that the arbitrator's reasoning with respect to the contract issues were intended as a separate basis for disposition of the statutory issues. Thus, in rejecting the Union's contractual assertion, the arbitrator reasoned that the parties to the negotiations contemplated closure, and agreed as to what would transpire "if the Company closed or relocated a warehouse .... " Con- trary to the Union's position, he concluded that "the negotiators did not agree to prohibit the Company from closing the warehouse, nor did they agree to negotiate whether the warehouse should or should not be closed." The General Counsel attacks this reasoning as at odds with the waiver test applied by the Board in assessing whether a party has waived statutory rights through collective bargaining. Pursuant to the latter, a labor organization may be deemed to have relinquished a statutorily con- ferred right only through evidence of a clear and unmistakable declara- tion. See, e.g., Tide Water Associated Oil Company. 85 NLRB 1096 (1949). While I would agree with the General Counsel that the arbitrator's at- tempt to reconcile the intent of the negotiators on the evidence before Continued 811 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The arbitrator's rationale and conclusion with respect to the issues generated by Respondent's unilateral action are set forth below: The next question is whether the Company vio- lated the National Labor Relations Act in view of the allegations by the Union that the Company: (I) closed the warehouse for discriminatory reasons; (2) failed and refused to negotiate concerning its "deci- sion to close the warehouse and to subcontract the warehouse work .... " First of all the evidence preponderated in favor of the conclusion that the decision to close the warehouse operation was motivated by economic reasons. The Company's capital subsidized the oper- ation since the 1974-75 fiscal year. The Company was caught in an industry downturn in profitability. Its total accumulated losses exceeded $4,000,000.00 and the losses were accelerating. In my judgment the evidence fails to support the allegation that the Company closed the warehouse for discriminatory reasons. The Supreme Court of the United States in its important decision on subcontracting recognized the distinction between conditions of employment and decisions concerning the basic scope of an enter- prise or decisions as to where to put investment capital. In Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, 57 L.R.R.M. 2609 (1964). Justice Steward wrote a concurring opinion to highlight that distinction. He said: [T]here are . . . areas where decisions by man- agement may quite clearly imperil job security, or indeed terminate employment entirely. An en- terprise may . . . resolve to liquidate its assets and go out of business. Nothing the Court holds today should be understood as imposing a duty to bargain collectively regarding such managerial decisions, which lie at the core of entrepreneurial control. Decisions concerning the commitment of investment capital and the basic scope of the en- terprise are not in themselves primarily about conditions of employment, though the effect of the decisions may be necessarily to terminate em- ployment.... [T]hose management decisions which are fundamental to the basic direction of a corporate enterprise . . . should be excluded from that area. 379 U.S. at 223, 57 L.R.R.M. at 2617. What the Company had done in this case is ter- minate an identifiable part of its business and the distinct functions it performed. Other cases have recognized the right of a Company to make similar decisions. See N.L.R.B. v. Adams Dairy, Inc., 350 him led to a result which could not be substantiated under the Board's waiver test, as I construe his decision the matter is of no moment. Thus, he simply ruled that if the Union had a right to negotiate, the substantive terms of the contract did not impose any such duty upon the Employer, and its source lay elsewhere. Thus, this aspect of the award in my opin- ion involved no attempt to reconcile the rghts and obligations inuring to the parties under the Act and hence is irrelevant to the present inquiry in view of my ultimate disposition. F.2d 108, 60 L.R.R.M. 2084 (8th Cir. 1965), cert. denied, 382 U.S. 1011 (1966); Summit Tooling Co., 195 N.L.R.B. 736 (1975); and Kingwood Mining Co., 210 N.L.R.B. 844 (1974). In view of the foregoing authority it is my finding that the Company had no duty under the National Labor Relations Act to bargain over whether it should or should not get out of the grocery wholesaling and warehousing business. The Company has the right to make such a decision. The General Counsel argues that the above constituted a determination repugnant to the policies of the Act. In support, it is argued that the arbitrator, based on factual misconceptions, applied the wrong statutory test. While the General Counsel would concede that no duty to bar- gain would normally attend a decision to "terminate an identifiable part of its business and the distinct functions it performed," it is claimed that this was not the nature of the operations in question. Contrary to the arbitrator. it is asserted that this case merely presents closure of a portion of a single integrated enterprise, which under Board law, is subject to the obligation of prior consulta- tion and bargaining. In this regard, counsel for the Gen- eral Counsel correctly observed that the warehouse op- erations and garage served Respondent's retail stores only, having no independent reason to exist. According- ly, the General Counsel argues that a contrary result is dictated by the Board's holdings in Ozark Trailers, Incor- porated, 161 NLRB 561 (1966), and Blue Grass Provision Co., Inc., 238 NLRB 910 (1978). I would agree with the General Counsel that Respondent's decision involved re- placement of employees in its existing units by a vendor who would supply not only inventory but the same serv- ices previously furnished by the former. Furthermore, the revenues fueling Respondent's operations were gen- erated at the retail level. Though the availability of stock is essential to such an operation, it would be difficult to persuade that the "nature and scope" of such an oper- ation is influenced by the identity of the warehousing source. The latter is merely a support service, integrated with others, to facilitate retail sales. Thus, Respondent's action did not result in the elimination of a distinct, unre- lated phase of its operations of a type which would not be subject to the duty of prior consultation. Thus, this is not a case involving a closedown through which Re- spondent removed itself from all or part of its immediate revenue producing operations. 6 Instead, economically speaking, the entire transaction had all the earmarks of classic contracting out of functions historically per- formed on an in-house basis with the use of payroll em- ployees to employees of an independent contracting firm. It would seem that Respondent could not effect such a change in a manner consistent with its statutory obliga- tions without affording the Union an opportunity to bar- gain over the decision. The foregoing represents my own analysis of what I perceive to be the controlling authority. However, I cannot say that the result reached by the arbitrator is lacking in support under Board precedent. For excep- 6 Cf. Summit Tooling Company. et aLt, 195 NLRB 479, 480 (1972). 812 THE LIBERAL MARKET. INC tions exist within the Board's general policy that manage- ment decisions to shut down a segment of operations, eliminating employees so engaged, and then continuing to realize a profit on those same operations through the utilization of independent contractors, is subject to a duty to bargain. Thus, in Kingwood Mining Company, 210 NLRB 844 (1974) (Members Kennedy and Penello, with Member Jenkins dissenting), it was held on authority of Summit Tooling Company, supra, that a coal vendor had no duty to bargain over its decision to eliminate totally its mining operations. This, despite the fact that it contin- ued thereafter to sell and process coal mined by employ- ees of independent contractors. Thus, the revenue pro- ducing aspect of its operation remained the same at all times. In dism the refusal-to-bargain allegations, the panel majority stated as follows: The decision of Respondent to close out its mining operations was manifestly a major one and entailed a substantial withdrawal of capital investment. To require Respondent to bargain about such a basic management decision would significantly abridge its freedom to manage its own affairs and is not con- templated by the Act. Here, the arbitrator relied specifically upon Kingwood Mining Company, in concluding "that the Company had no duty under the National Labor Relations Act to bar- gain over whether it should or should not get out of the grocery wholesaling and warehousing business." 7 One could quarrel endlessly as to whether said management determination was a "major one" and "entailed a sub- stantial withdrawal of capital." Nonetheless, Kingwood Mining seems virtually indistinguishable from what tran- spired in the instant case.8 It is apparent from the above that the arbitrator con- sidered the statutory issues expressly submitted by the Charging Party herein, and ultimately resolved it on the basis of Board precedent, which at least in part facially supports his conclusion that no duty to bargain would exist with respect to Respondent's decision to eliminate the warehouses and the garage. While one might dis- agree with his result, any such difference would entail a picking and choosing from a body of decisional law which is not subject to synthesis in a fashion permitting clear cut distinctions between that which is and that which is not a management decision "essentially financial and managerial in nature," involving a "significant in- vestment or withdrawal of capital" affecting the "scope and ultimate direction of an enterprise .... " 252 7 Independent research fails to disclose that the Board subsequently disavowed Kingwood Mining. The Board's decision in that case was af- firmed by the United States Circuit Court of Appeals for the District of Columbia, without opinion. (Case No. 741566, June 26, 1975.) a In addition to Kingwood Mining, the Board recently reaffirmed the view that a decision to cease operations and terminate employees is not necessarily subject to a duty to bargain, even though the employer has not eliminated itself from the particular line of business. Thus, in National Car Rental System, 252 NLRB 159, 162-163 (1980) (Chairman Fanning and Members Jenkins and Penello), it was concluded that an employer had no duty to bargain over the decision to cease operations at one site, while transferring a portion of its operations from that location to a new facility some 20 miles away, and selling the balance of its business to an independent firm NLRB at 163. Simply stated, there is ample room for honest, reasonable disagreement with respect to the ap- plication of Board precedent in this area. As for the remaining issue, the General Counsel con- tends that "the arbitrator had before him substantial and virtually conclusive evidence showing that Respondent had negotiated with the Union in bad faith during the 1978 contract negotiations by conducting those negotia- tions while simultaneously conducting a serious study leading to the abolition of the very bargaining unit the Union was negotiating for, without ever informing the Union of such a potential until after it had signed a new 3-year agreement incorporating a 'no-strike' clause." In his award, the arbitrator acted upon the following facts prior to rejecting the claim of bad faith: The Company has been in the retail grocery busi- ness for over fifty years. Some of its employees have accumulated a great deal of seniority. For ex- ample, Charles W. Dozier, Sr. testified that he began working for the Company in July of 1936 at the age of 16 years. The losses from operations have created debts. The Company owes $6.9 million in notes payable and $9.6 million in accounts payable. Approximately $4 million of the accounts payable are past due. With respect to the industry in which the Company operates, figures intro- duced into evidence indicate that the average profits for retail grocery chains went from 86 percent of sales in 1975 to 43 percent in 1977. Three major grocery store chains recently have gone bankrupt; namely, Fernandez Markets of Boston, Allied Supermarkets of Detroit and Food Fair of Philadelphia, the seventh largest supermar- ket chain in the country. With the Company's financial problems it began experiencing difficulty in obtaining ad- ditional credit. Additionally, the evidence indicates that some of the Company's suppliers tightened their credit limits and re- fused to ship any further products until invoices had been paid. Some of such suppliers were Campbell's Soup, Kraft American Home Cheese, Chef Boyardee, LaChoy and Scott Paper. One of the company officials testified that grocery warehouses generally have in stock 95 to 96 percent of the items they normally carry and, at any given point in time, are out of stock on only 4 to 5 per- cent of their merchandise. Recently, however, the Com- pany averaged approximately 15 percent "out-of-stock" in its grocery warehouse. In November 1977, an employee of Super-Valu made a presentation to the Company urging the Company to consider buying from Super-Valu. He pointed out the fee structure used by Super-Valu. At that time, the Compa- ny decided to make no changes. In June 1978, Ted Wells, who had become president of the Schear Group, the holding company which owns Liberal, requested Herbert Dotterer, the Company's new controller, to prepare a new analysis comparing the Company's cost of warehousing and delivering its own grocery items with the cost of purchasing grocery sup- plies directly from grocery wholesalers. Dotterer pre- pared the analysis in July, 1978. He stated that he used 813 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the fee structure quoted by Super-Valu in November 1977. Under Dotterer's analysis the Company would have saved approximately $418,000 if it had bought from Super-Valu during the 1977-78 fiscal year. He turned his analysis over to the president and the chairman of the board of the Schear Group. On July 29, 1978, Dotterer received data on the cost from the Company's warehousing and distribution oper- ations for the fiscal year beginning May 1, 1978. From the computer printout, the indication was that as of July 27, 1978, total warehouse expenses for the fiscal year were $628,418. That figure amounted to 1.8 percent of net sales. Those figures compared with a l-year earlier printout showing that the costs had been $458,675 which represented 1.47 percent of net sales. The Company ex- perienced an extraordinary Food and Drug Administra- tion expense during one of these periods, but without considering that expense, the figures indicated that the total costs increased by approximately 19 percent. The costs of transporting the goods from the grocery warehouse to the retail outlets or stores also increased. As of July 27, 1978, the costs were $75,595 greater than during the same period the previous year. That amount- ed to a 46-percent increase in costs. Negotiations between the Company and the Union cul- minated in a new collective-bargaining agreement, which was ratified on Sunday, July 30, 1978. The vice president of personnel, Douglas Winnie, testified that he prepared an analysis of the additional direct and indirect costs under the new contract and gave that analysis to the president of the Company, Bob Mann. The analysis esti- mated that in the first year of the contract, assuming the same level of business and no increase in man-hours or the number of employees working under the contract, that the additional costs would be approximately $160,000 to $180,000. From that figure in the second year there would be an additional $162,000 and in the third year there would be an additional $164,000 on top of that. Thus, under his analysis the total additional costs of the negotiated new labor agreement over its 3-year life exceeded $1 million. By the end of the first week of August 1978, Schear Group officials concluded that Liberal should discontin- ue the warehousing and delivery operations and start buying its grocery products from a wholesale supplier who would deliver directly to the retail stores. Winnie stated that he was informed of the decision on August 9, 1978. On August 12, 1978 he sent the following letter to the Union: Pursuant to the requirements of Article III, Sec- tions 4 and 5 of our current Collective Bargaining Agreements, The Liberal Market, Inc. hereby gives the Union written notice of its intent to close the Concord Street Warehouse and Victory Warehouse and Garage, effective at the close of business De- cember 9, 1978. Further, The Liberal Market, Inc. offers to nego- tiate with the Union regarding all conditions per- taining to the closure as it affects any bargaining unit employee. Please contact me regarding this at your earliest opportunity. After announcing its decision to close the warehouse operation and receiving bids from grocery wholesalers, Liberal determined to purchase its merchandise for the retail grocery stores from Super-Valu. The Company ne- gotiated supply and retailer agreements with Super-Valu, and these agreements were executed in December 1978. The goods remaining in the warehouse on December 9, 1978, were sold to Super-Valu. The goods were loaded out by the Company's warehousemen and transported to Super-Valu's warehouse by Liberal Drivers. The warehousemen and drivers who work for Super- Valu are represented by the same local union as is in- volved in this case. As was true of the denial of bargaining with respect to the closedown decision, the arbitrator on the above facts rejected the claim of bad faith founded upon the employ- er's failure to disclose during negotiations its involve- ment in an investigation of the feasibility of continued operation. In this latter connection, the award recites as follows: The next question is whether the Company violated the National Labor Relations Act in view of the al- legations by the Union that the Company: . . (3) Engaged in bad faith negotiations by sign- ing the 1978-1981 labor agreement with the "inten- tion of unilaterally terminating said agreement prior to its expiration date? The allegation by the Union that the Company bargained in bad faith during the 1978 negotiations is not supported by a preponderance of evidence. A decision to close a significant portion of one's busi- ness could never come at a right or proper time, es- pecially where long-term employees are involved. Such occasions are sad and unsettling. However, the preponderance of the evidence does not support a conclusion that the Company bargained in bad faith during the 1978 negotiations. In summary, I find no violation of the National Labor Relations Act as alleged by the Union. There is no claim that the factual findings lacked sub- stantiation in the record before the arbitrator. Contrary to the allegations in the complaint, there is no direct evi- dence disclosing that "Respondent negotiated collective- bargaining agreements with the Union . .. while know- ing that it intended to eliminate said units...." or that a final determination had been made on closure of the warehouse and the garage prior to the culmination of bargaining. At best, the record simply confirms that the Company in 1977 had studied that possibility, reopened it in 1978, but that the matter remained in an inchoate state of contemplation during the negotiations which culminat- ed through achievement of tentative agreements on July 27, 1978. Finally, it does appear that the Union was not informed during those negotiations that the Company 814 THE LIBERAL MARKET, INC. was considering possible discontinuance of the ware- house operations. In assigning error to the arbitrator's failure to find "bad faith," the General Counsel relies upon a number of factors, including (1) the speed with which the 1978 ne- gotiations were concluded; (2) the fact that neither party sought changes in contract language, confining the issues to economic items; (3) the fact that Respondent during the negotiations expressed no need for contractual or monetary belief; and (4) that the negotiations were re- duced to the "meaningless" through subsequent elimina- tion of the warehouse and garage facilities. On behalf of the complaint, it is argued that in such circumstances Re- spondent's concealment of the possible shutdowns was tantamount to bad-faith bargaining. However, the General Counsel cites no precedent that such nondisclosure of nonfinal, though relevant, internal deliberations, constitutes a violation of Section 8(a)(5) and (1) of the Act. The cases cited to this effect are not clearly supportive of his view. Thus, in Vac-Art, Inc., 124 NLRB 989, 997 (1959), a trial examiner concluded that an employer's disclosure during the course of negotiations as to a closedown, without having previously notified the Union as to plans to take this step, was "a most glar- ing example of bad-faith bargaining." In that case, how- ever, the violations found did not refer to or embrace any affirmative duty of disclosure, and the holding ap- pears limited to a conclusion that such conduct was merely "indicia" of bad faith. Nor does Royal Plating and Polishing Co., Inc., 160 NLRB 990 (1966), command the interpretation of the General Counsel herein. There the employer had arrived at a final decision to close the plant during the course of negotiations, but did not dis- close said intention until 3 weeks after a new contract had been executed. In addition, the nondisclosure was accompanied by facts reflecting that the respondent de- liberately misled and sought to allay union suspicion con- cerning possible closedown, thereby substantiating the trial examiner's conclusion that respondent "acted as ... with a deliberate purpose in mind . . . to avoid bargain- ing with the Union." (160 NLRB at 992-993.) Thus, the nondisclosure involved there was considered with other factors, which together were indicative of bad faith. In any event, to extend Vac-Art, Inc. and Royal Plating, supra, to the instant facts would ignore the fundamental difference which exists between circumstances where in the course of negotiations a management decision to ter- minate the operation affected by negotiations is finalized, and one in which that possibility is merely subject to in- vestigation during bargaining, but acted upon thereafter when the cost of the new contract might be assessed, weighed, and considered against other facts relevant to a conclusion as to whether or not continued operation is feasible. The instant case on the findings made by the ar- bitrator, and substantiated by the record made before me, might be construed as showing no more than the latter. In this respect, the General Counsel's challenged to the aware on the bad-faith issue boils down to a quarrel with the propriety of the inferences drawn by the arbi- trator, for I am made aware of and independent research fails to disclose that employers, in order to fulfill their statutory duty to bargain in good faith, must disclose in the course of negotiations all contemplated, studied, or considered matters that might after culmination of agree- ment be decided upon, and placed into effect, to the det- riment of unit employees. To impose a duty of disclosure on a per se basis in such circumstances might well exac- erbate and prolong negotiations by statutorily required injection of a "red herring" which might never come to pass. The better approach is to relegate such issues to the conventional means of assessing subjective bad faith; namely, inference drawing on the total record. As for the legal effect of the arbitration award, the issue presented is a qualitative one requiring an assess- ment of the degree of condonable error, if any, which the Board will accept before overturning the "final" result bargained for by the parties. Through Spielberg, the Board has subscribed to the policy encouraging the peaceful settlement of disputes through contractual arbi- tration, while manifesting sensitivity toward the damage to be wrought upon private dispute settlement arrange- ments through unrestrained administrative intervention. At the same time, Spielberg preserves the integrity of the arbitral process as a means of vindicating statutory guar- antees to employees by assuring that the results thereof not be "repugnant to the policies of the Act." However, absent an arbitrator's direct repudiation of the statute,9 what is and what is not within this standard has not always been uniformly accepted by the various members of the National Labor Relations Board. While the ordi- nary meaning of the language thereof is suggestive of a restrictive policy of review, with more than simple error required before the Board will disregard an award, ex- amination of Board precedent fails to reflect either con- sistency of application or indeed that various Board members view their role as so limited. Recent decisions, though hardly ever undivided, sug- gest that absent "indisputable" factual error' ° the Board will not dishonor awards because factually discrepant." 9 See, e.g.. Douglas Aircraft Ca, 234 NLRB 578 (1978) (Chairman Fan- ning, Members Jenkins and Murphy, with Member Penello dissenting), B. & L. Motor Freighl. Inc., 253 NLRB 115 (1980) to In Pincus Brothers. Inc., 237 NLRB 1063 (1978) (Members Jenkins, Murphy, and True'dale), the panel rejected an arbitration award, where on the face of the findings by the arbitrator the employee was clearly engaged in protected activity The arbitrator had found that the employ- ee was terminated for unprotected activity. The Board stated as follows: Employee distribution of handbills to other employees expressing views as to wages, hours, and working conditions normally consti- tutes protected concerted activity. However, an employee engaged in such activity may engage in conduct of such a nature that the em- ployee loses the protection of the Act. We recognize that in some cases there may be reasonable disagreement as to whether or not that point is reached. In such cases we will not refuse to defer to the arbitrator's award simply because we would have reached a different result. For the reasons set forth below, however, we find that . .. [the dischargee's] .. conduct . . constituted protected concerted activity and that there can be no reasonable disagreement as to this finding See also Sea.-Land Service, Inc., 240 NLRB 1146 (1979). " Contra: Owners Maintenance Corp., 232 NLRB 100 (1977) (Chairman Fanning and Members Jenkins and Murphy). There, the award involved the discharge of two employees. The arbitrator concluded that while the assigned reason for the terminations did not constitute just cause, the evi- dence did not conclusively establish that the grievants were discharged for engaging in union activity The Administrative Law Judge, whose Continued 815 DECISIONS OF NATIONAL LABOR RELATIONS BOARD See, e.g., American Bakeries Co., Inc., 249 NLRB 1249 (1980) (Members Penello and Truesdale, with Member Jenkins dissenting), and Kansas City Star Company, 236 NLRB 866 (1978) (Members Penello and Murphy with Member Truesdale concurring; Chairman Fanning and Member Jenkins dissenting). However, the standard of accuracy imposed on arbi- trators with respect to the interpretation and application of Board law appears to be more stringent. In this re- spect, abject purity seemed to be the order of the day when in 1960, the Board in Hershey Chocolate Corpora- tion, 129 NLRB 1052, affirmed the following as an ap- propriate definition of the standard of review: . . . an arbitrator's findings of fact, validly arrived at, will be accepted by the Board; but his conclu- sions following therefrom, affecting matters within the Board's jurisdiction will be accepted only if they represent a correct interpretation of the Act. 1 2 The foregoing would tend to slice deeply into the "final- ity" of arbitration. Pursuant thereto, awards which entail resolution of unfair labor practices, would be reviewable routinely by the National Labor Relations Board on the law. Arbitrators would be charged not only with the degree of expertise held by the administrators of the Act, but with the vision of seers where Board precedent is either unclear, subject to shifts in policy, or both. The limited latitude afforded arbitrators under this approach not only detracts from the desirability and utility of pri- vate dispute settlement machinery,' 3 but fails to recog- nize that accuracy within that process is not always nec- essary to the vindication of the public interest. In this regard, the Third Circuit Court of Appeals in N.L.R.B. v. Pincus Brothers, Inc., 620 F.2d 367 (3d Cir. 1980), stated as follows: The National policy in favor of labor arbitration recognizes that the societal rewards of arbitration outweigh a need for uniformity of result or correct resolution of the dispute in every case. The parties are not injured by deference to arbitration because it is the parties themselves who have selected and findings were adopted by the Board panel, refused to give binding effect to the award, stating as follows: . .the arbitrator's conclusion that the discharges stemmed from reasons other than union considerations was speculative and does not meet the requirements of the substantive evidence rule. His decision was not only based upon guessed facts outside the record but on no actual facts at all. Such a finding is repugnant to law and violates due process of law. The arbitrator's dictum, therefore, which holds that the discharges were not unlawful within the meaning of Section 8(aX3), is not binding under Speilberg. i' 129 NLRB at 1067. 13 In Associated Press v. N.L.R.B., 492 F.2d 662 (D.C. Cir. 1974), the Circuit Court of Appeals for the District of Columbia Circuit cautioned as follows: We think it clear that submission to grievance and arbitration pro- ceedings of disputes which might involve unfair labor practices would be substantially discouraged if the disputants thought the Board would give de novo consideration to the issue which the arbi- tration might resolve. Such dicouragement would be contrary to the Supreme Court's efforts to effectuate the congressional desire to sup- port "administrative techniques for the peaceful resolution of indus- trial disputes." agreed to be bound by the arbitration process. To the extent that the parties surrender their right to a subsequent full hearing before the Board or a court, it is a voluntary waiver, consistent with the national policy. In any event, Hershey Chocolate, supra, was effectively modified in 1962 when a divided Board, in International Harvester Company, 138 NLRB 923 (1962), confirmed that arbitrators were to be afforded leeway in construing Board precedent, if not "palpably wrong." Thus, the ma- jority (138 NLRB at 929) stated: . . . we need not decide these questions in deter- mining to accept the arbitrator's award since it plainly appears to us that the award is not palpably wrong. To require more . . . would mean substitut- ing the Board's judgment for that of the arbitrator, thereby defeating the purposes of the Act and the common goal of national labor policy of encourag- ing the final adjustment of disputes, "as part and parcel of the collective bargaining process." Later, members of the National Labor Relations Board debated the meaning and relevance of the "palpably wrong" test,14 but recent precedent suggests a rededica- tion to the cautious abstinence reflected in International Harvester, supra. Thus, awards have been endorsed where they evidenced "reasonable" determinations by ar- bitrators, who specifically considered statutory issues even though the Board, had it reached the merits, might have applied the law differently. 15 In Associated Press, 199 NLRB 1110, 1114 (1972) (Chairman Miller and Members Kennedy and Penello), a Board panel declined to pass independently upon the statutory issue, where the arbitrator had done so in a "well-reasoned" opinion. This result was reached even though a close question of Board policy was involved, requiring interpretation of Section 302(c)(4) of the Act. Also in Pacific Southwest Airlines Inc., 242 NLRB 1169, 1170 (1979) (Members Penello and Truesdale, with Chairman Fanning dissent- ing), a panel majority deferred to an award under similar conditions. Thus, the majority declined to pass upon whether they would have applied Board precedent in the same fashion as the arbitrator, noting that the arbitrator's analysis did "no substantial violence thereto." Although the foregoing is representative of a less than exhaustive sampling of Board experience in this area of the law, based thereon, it is clear that the Board will not reject an award simply because it differs with the arbitra- tor's interpretation of the facts.' 6 Here, however, the ar- "4 See Douglas Aircraft Company, 234 NLRB 578 (1978). 15 See Arnold Junior Fenton, Inc., 240 NLRB 202 (1979) (Chairman Fanning and Members Jenkins and Penello). '^ See Terminal Transport Co., 185 NLRB 672 (1970), the Board re- versed a Trial Examiner's failure to defer to an award, stating as follows: In our opinion, the Trial Examiner exceeded his authority under the Spielberg doctrine in rejecting the award . . . because he would have reached a different result on the evidence presented to the arbitration panel. .... Under established Board policy, the validity of an award is not to be determined on the basis of whether the Board would reach the same result on the record made before an arbitrator Continued 816 THE LIBERAL MARKET. INC. bitrator's determination that no duty to bargain existed with respect to the decision to close the facilities was challenged as entailing a misapplication of Board policy. In this regard Board holdings with respect to Spielberg's standard of "repugnancy" afford no ready solutions, for the principles that control are more adaptable to articula- tion than application with certainty. Nonetheless, it seems the Board will not defer, if the arbitrator is unmis- takably in error, but will, if the arbitrator's construction is reasonable and within a debatable area. On balance, I find that the award's disposition of the unilateral action issue falls within this later class. Kingwood Mining Co., supra, upon which the arbitrator relied has not been spe- cifically overruled. The Board's decision in that case of- fered a like result on facts not materially different. Ac- cordingly, the arbitrator's construction of the statutory issue, when considered in that light cannot fairly be deemed unreasonable or as having substantially violated published Board policy. The arbitrator's finding with respect to the "bad faith" issue warrants no different result. The question of wheth- er the "concealment" constituted bad-faith bargaining turns upon inference drawn on the totality of the facts. Those on which the arbitrator relied are not subject to dispute, and from them he concluded that Respondent bargained in good faith. Although the arbitrator's deter- minationi in this regard swas expressed in conclusory terms and was riot accompanied by articulation of ration- ale, the Board has stated: "It is not necessary . . that the arbitrator phrase his findings in terms of judicial evi- dentiary standards, such as 'proof beyond reasonable doubt' or by a preponderance of the evidence."17 And the fact that "differing inferences" might be drawn by the Board does not justify intervention by the latter where that drawn by the arbitrator relates reasonably to the facts before him.8S I find that as Respondent's non- Also in United Parcel Service. Inc.. 232 NLRB 1114, 115 (Members Jen- kins, Penello, and Murphy), the Board reversed an administrativc law judge's rejection of an award where the latter did so simply because he differed with the arbitrator's conclusion as to the motivation underlying a discharge. The Board panel stated: We find that the reasons advanced by the Administrative Law Judge for declining to defer does [sic] not furnish a sufficient basis Isic) for departing from the Board's established polioy of giving binding effect to arbitral decisions made in conformity with the Speiltbrg [sic] criteria. The fact that the arbitration panel reached a result con- trary to that of the Administrative Law Judge does not warrant a departure from that policy. 17 United States Postal Service, 241 NLRB 1253, 1254 tMernbers Pen- ello, Murphy, and Truesdale, with Chairman Fanning and Member Jen- kins dissenting). ts American Bakeries Co.. supra; Arnold Junior Fenton. supra. See, e.g.. United Steelworkers of America v. Enterprise Whet, Car Corp., 363 U.S. 593, 599 (1960). disclosure of its nonfinal deliberations as to events which might never have come to pass was at least arguably in- offensive to the principles of good-faith collective bar- gaining, the conclusion of the arbitrator consistent there- with was founded upon admittable inference and hence was "rnot clearly repugnant to the purposes and policies of the Act." In sum, all issues within the province of the Board herein had been specifically and voluntarily submitted by the Charging Party to arbitration while its unfair labor practice charges were pending. The arbitrator acted pur- suant to authority conferred by the parties and their agreement that his determination be final. The unfair labor practice issues wire litigated before him and his ul- timate determination did not "clearly" impinge upon un- ambiguously defined, fundamental purposes of the Act or any specific provisions thereof't In short, the degree of error therein, if any, was too slight to nullify the award's conformity with the Spielberg criteria, and, accordingly, elements of our comprehensive national labor policy fos- tering private dispute settlement procedure prevail over the Board's admitted authority to determine and redress unfair labor practices. Therefore, the complaint herein shall he dismissed in its entirety. CONCI1USIONS OF LAW 1. Respondent is an employer within the meaning of Section 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. Respondent did not violate Section 8(a)(5) and (1) of the Act by closing its warehouses and garage without affording the Union an opportunity to bargain as to its decision to do so, and by failing to disclose during 1978 collective- bargaining negotiations that such action was under study and consideration. Based upon the foregoing findings of fact and conclu- sions of law and the entire record in this proceeding and pursuant to Section 10(c) of the Act, I issue the follow- ing recommended: ORDER2 0 It is hereby ordered that the complaint herein be, and hereby is, dismissed in its entirety. '1 Cf. Dreis & Frump Manufacturing, Inc. 221 NLRB 309 (1975); Al- bertson's Inc., 252 NLRB 529 (1980). 20 In the event no exceptions are filed as provided by Sec. 102 46 of the Rules and Regulations of the National l.abor Rclations Board, the findings, conclusions, and recommended Order herein shall, as provided im Sec 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waised for all purposes. 817