Glenmar Cinestate, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Glenmar Cinestate, Inc. and International Alliance of Theatrical Stage Employees and Moving Pic- ture Machine Operators, Local 370. Cases 5- CA-13095 and 5-CA-13531 September 28, 1982 DECISION AND ORDER BY CHAIRMAN VAN DE WATER AND MEMBERS FANNING AND ZIMMERMAN On April 26, 1982, Administrative Law Judge William A. Gershuny issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Re- spondent 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. The Administrative Law Judge concluded that Respondent bargained in good faith with the Charging Party Union in an attempt to reach agreement on a new contract. In affirming the Ad- ministrative Law Judge, we note that our decision is a narrow one. Thus, under normal circum- stances, the magnitude of the wage decrease pro- posed by Respondent along with its proposed sharp curtailment of other benefits would be strong evi- dence of bad-faith bargaining. However, in the present situation, such proposals must be scruti- nized in light of Respondent's economic condition. Basically, Respondent's evidence that it was experi- encing severe financial difficulties stands uncontro- verted. Counsel for the General Counsel did not refute Respondent's position that economic re- verses dictated its bargaining posture. Aside from counsel for the General Counsel's failure to put on evidence rebutting Respondent's claims of economic hardship, record testimony re- veals that never once did the Union request to see any of Respondent's financial books or records. In fact, during negotiations, representatives of the Union stated that both sides were bargaining in good faith, that the Union did not question Re- ' The General Counsel has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with re- spect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are iJ.correct. Standard Dry Wall Products. Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for re- versing his findings. 264 NLRB No. 35 spondent's integrity, and that it was not demanding to see Respondent's books. The Union made these statements at the same time that Respondent was proposing reductions in wages and other benefits. Thus, in the absence of evidence rebutting Re- spondent's economic justification for its actions, we will affirm the Administrative Law Judge's finding that Respondent did not engage in bad-faith bar- gaining in violation of Section 8(a)(5) of the Act. 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 be, and it hereby is, dismissed in its entirety. DECISION STATEMENT OF THE CASE WILLIAM A. GERSHUN', Administrative Law Judge: A hearing was held on February 11 and 12, 1982, in Washington, D.C., on consolidated complaints issued on May 27 and August 21, 1981, alleging a number of viola- tions of Section 8(a)(1), (3), and (5) of the National Labor Relations Act (herein called the Act), all stem- ming from contract renegotiations in late 1980. At issue principally is whether Respondent refused to bargain in good faith. Upon the entire record, including my observation of witness demeanor, I hereby make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I. JURISDICTION The complaint alleges, the answers admit, and I find that Respondent, engaged in the operation of movie the- atres in Richmond, Virginia, with annual interstate ship- ments in excess of $50,000, is an employer engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. 111. THE UNFAIR LABOR PRACTICES On March 10, 1978, Glenmar acquired District The- atres' six Richmond, Virginia, theatres, four of which are drive-in and two are indoor. Each category of theatres was, at the time of purchase, covered by a separate, but substantially identical, labor contract with Local 370. Typically, the indoor theatres are staffed by a projection- ist, manager, doorman, cashier, concession attendant, and usher. The Broad Street indoor theatre has two screens with seating capacities of 650 and 250. The Cloverleaf Mall indoor theatre has two screens with seating capaci- ties of 650 and 450. 236 GLENMAR CINESTATE, INC Local 370 has an ists, 5 of whom at t and, later, by Glenm, Two economic fac bargaining issue in t the bargaining relatic 370. The first relate which confronted G operation in Richm could obtain movies on a negotiated figur ceipts. In 1979, a ne cation in direct cor twin-screen theatre. lice of using box off negotiations was re: guarantees of large s The record indicate guarantee for "Super receipts), an amount net result was that market for the big n more financially sour The second releva perienced by Glenr strated by the follow eluding concessions) Indoor Theatres Drive-In Theatres $ Thus, from profits o 1979, Glenmar exper $13,000 in 1981. In addressing the separate and distinct ship must be conside last period is the subj Assumption of exis chased the theatres, contracts between D ering the theatres. T "attempt to persua accept" the contract part of preprinted st provided for hourly the two contract yea and $5.30 for the dr hour week at the F week at the Cloverle week at the drive-in every 30 days of ser, cation depending on into the Union's natil per employee. They for the grievance of tained no no-strike pr no specific manager tracts were voluntari active membership of 37 projection- fact that it was paying its projectionists at other theatres he time were employed by District $3.35 to $3.50 an hour and despite the further fact that ar the contracts had a full 2 years more to run, expiring on ctors are relevant to the good-faith April 14, 1980. Certainly through this first phase of the his case and form the backdrop for parties' relationship, the record simply does not permit onship between Glenmar and Local the suggestion, as contended by counsel for the General es to unforseen competitive forces Counsel, that Glenmar was embarked on a "premeditated rlenmar in 1979. its second year of course of bad faith bargaining designed to undermine and ond. Prior to that time, Glenmar eliminate the Union" (br., p. 15). of its choice from distributors based Extension of existing contracts: On January 30, 1980, 10 re based principally on box office re- weeks before expiration of the two contracts, Glenmar, w six-screen theatre opened in a IO- through counsel, advised Local 370 of its intention to re- npetition with the Cloverleaf Mall negotiate the contracts. By agreement, the parties met on A bidding war ensued and the prac- May 13, 1980, with Glenmar represented by its president, -ice receipts primarily as a basis for Nadler, and two attorneys, Siegal and Boardman, and placed by one requiring advanced Local 370 represented by business agent Bevan, union unums of money and of length of run. secretary Rose, and Glenmar projectionist Stinson. Local as, for example, that the advanced 370 proposed an increase in sick leave from 14 to 21 rman II" was $100,000 (regardless of man 11 was $100,000 (regardless of days; an increase in pension fund contributions from S.90 t Glenmar was unable to pay. The per shift to $1.15; a fourth vacation week; a health, wel- Glenmar was pushed out of the G .en.mar walms pse out ofrgr th fare, and life insurance plan; and a substantial wage in- honeymaking films by its larger and id competitors. crease over the life of a 2-year contract. Glenmar, it economic factor is the losses ex- through Siegal and Nadler, explained in detail and at tar subsequent to 1979, as demon- length the current industry conditions: one, a "terrible" Jing uncontroverted net income (in- decline in box office receipts and, two, uncertainty of data: profitability due to the new system of requiring the ad- vance payments of large sums of money for films. Re- peated references were made to Glenmar's payment of 1978 1979 1980 1981 $45,000 for the movie "Black Stallion," which produced 133.000 $144,000 $67,000 $87,000 box office receipts of only S20,000 and Local 370 was 4.000 (59.000) (78,000) (100,000) told of Glenmar's advance of $75,000 for "The Empire Strikes Back." Repeated references were made by Glen- mar to the new nonunion competition, the uncertanties )f $137,000 in 1978 and $85,000 in posed by the new bidding procedures, and the possibility -ienced losses of $11,000 in 1980 and of "significant problems" resulting from those factors. Glenmar then submitted two alternative proposals: one, good-faith bargaining issue, three an extension of the two contracts through the summer periods in the bargaining relation- season to permit it to see whether the new bidding pro- ered, despite the fact that only the cedure was going to continue, with Glenmar accepting ject of the complaint in this case. Local 370's sick leave proposal. The other, the reexami- rting contracts: When Glenmar pur- nation of the entire contract "with a fine tooth comb in there were in existence two labor order to economize," a step it would rather not take )istrict Theatres and Local 370 cov- since it necessarily would entail pay cut proposals. Local 'hose contracts obligated District to 370 proposed, as an economy measure, combining the de the prospective purchaser to position of theatre manager (a management position) s. The contract, consisting in large with that of projectionist (a bargaining unit position), tandard form union provisions, also with the manager being displaced by the Local 370 rates of $6.95 and $7.22 for each of member. Glenmar again emphasized that the theatres ars at the indoor theatres and $5.01 were not a profitable operation, that it was facing a ive-in theatres; for a guaranteed 57- crisis, and that it was asking for time. Discussions contin- iroad Street theatre, a 73-1/2-hour ued on May 29, with Glenmar reiterating the adverse eaf Mall theatre, and a 36-1/2-hour economic conditions, its need to economize, and the fact s; for I day's sick leave earned for that it was operating at a loss. Local 370 assured Glen- vice; for a maximum of 3 weeks va- mar of its desire to keep the theatres opened and to length of service; and for payments "help." Local 370 President Martin replied that "the onal pension fund of 90 cents a day boys didn't want an extension" because it had to main- provided for no health benefits or tain uniform terms among all theatre owners. He pro- f employee disputes and they con- posed a contract extension until September 1, 1980, with rovisions, no-checkoff provision, and a confidential 2-year contract thereafter calling for a 60- ment-right's provision. These con- cent wage increase over the life of the contract. Glen- ly assumed by Glenmar, despite the mar, in response, proposed an extension to September 15, 237 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with an increase in sick leave benefits and with an option on its part of then implementing the Union's 60-cent pro- posal or negotiating a completely new agreement. Local 370's bargaining representatives accepted the proposal and thereafter its membership ratified the agreement. Again, the record does not permit the suggestion that Glenmar, through this second phase of collective bar- gaining, was bent on eliminating the Union through a course of bad-faith bargaining. On the contrary, through May 29, Glenmar, faced with impending economic crisis, displayed that degree of flexibility and patience required by its statutory obligation to bargain in good faith with Local 370. Negotiation and impasse: The third and final phase of the bargaining relationship, out of which grew the in- stant unfair labor practice charges, was triggered by Glenmar's admittedly proper invocation on July 29, 1980, of its contract right to reduce weekly operating hours at the Broad Street theatre from 57 to 40. The reason: low attendance. Local 370 proposed first a 47- 1/2-hour week and then a 45-1/2-hour week. It also re- quested an early meeting, before the contract expiration date of September 15, 1980, to negotiate new contracts. By agreement, the parties met on September 2, 1980, and again on October 2 and November 15. The September 2 meeting was between Glenmar's at- torney, Boardman, and, principally, International Repre- sentative Ryan. Boardman reviewed the bargaining histo- ry to date and reiterated a number of times the financial problems confronting Glenmar: the new bidding proce- dures and its operating losses. He also stated that the period of contract extension during the summer season demonstrated that Glenmar's financial problems due to the bidding procedure would continue. Ryan indicated a willingness to reduce hours, but insisted that Local 370 needed minimum guarantee of hours. He suggested that operating costs should be lowered by eliminating nonbar- gaining unit positions. He acknowledged an awareness of Glenmar's financial difficulties, but concluded that the Union "couldn't go any lower." Boardman reiterated that, with declining theatre attendance, Glenmar could not raise ticket prices and could not guarantee hours of operation. Glenmar's written proposals, submitted to the Union on May 29, were again reviewed and Boardman assured Ryan that the proposals were not Glenmar's final word. Again, the Union raised the issue of possible spe- cial treatment for Broad Street projectionist Stinson, who was the senior Glenmar projectionist. The parties then agreed to a day-to-day extension of the contract pending their next meeting on October 2. The October 2 meeting again addressed a number of topics. Reporting pay was discussed and Glenmar indicated that the prob- lem could be worked out. The Union's major concerns- hours and wages-produced a union concession as to hours, but an unwillingness on the part of the Union to accept reduced wages. Glenmar's written proposals were discussed page by page and changes were effected: date of commencement of the contract, elimination of a job classification, inclusion of a nondiscrimination clause, in- clusion of an antilockout provision, and deletion of a promotion-demotion provision. Ryan stated that, if no objection were made to particular provisions, Glenmar should consider that Local 370 was in agreement. At the Union's insistance, Boardman indicated a willingness to drop the grievance-arbitration provision. He indicated flexibility on the terms of the contract, since Glenmar was seeking major wage concessions. Also, at the Union's insistance that Boardman cut through the usual negotiating process and tell them what Glenmar was willing to pay, Boardman replied that Glenmar was will- ing to pay $3.50 an hour to all projectionists, with a management position for Stinson (who would be permit- ted to remain a union member) and the payment of $7.22 per hour to temporary replacement projectionists fur- nished by the Union. Boardman showed union repre- sentatives a 2-week financial summary of operations at the Cloverleaf Theatre, which reflected an $880 loss for the period. International Representative Ryan responded that the Union was not questioning Glenmar's integrity and that the Union was not demanding to inspect Glen- mar's financial records. At Local 370's request, the meet- ing was adjourned to permit union representatives to consult with the membership concerning Glenmar's pro- posal and, again, the contracts were extended. Ryan parted by acknowledging that "both sides are bargaining in good-faith and both sides should consider the matter further." By letter dated October 9, Glenmar invoked its con- tract right to reduce operating hours at the Cloverleaf Theatre to 40 hours because of "economic circumstances beyond our control." On October 24, Bevan telephonically advised Board- man that the membership of Local 370 had rejected Glenmar's proposal, adding that wages were still the issue and, indeed, the only issue remaining. Another meeting on November 15 was agreed upon. By letter of October 30, Boardman recapitulated in detail the numerous changes in Glenmar's proposals agreed to at the October 2 meeting and reiterated its "bottom line" wage offer of $3.50 an hour for regular projectionists and $7.22 an hour for temporary replace- ment projectionists furnished by the Union. The November 15 meeting was short and began with the announcement by Local 370 that it rejected Glen- mar's proposals, that the issue was wages, that, if Glen- mar had really given its bottom line, unfair labor prac- tices charges would be filed, that it would go no lower than the current wage rate of $7.22 per hour, and that its members would continue to work until wages were re- duced. The parties agreed they were deadlock. Collec- tively bargaining thus came to an end, as no further meetings were requested. By letter dated January 23, 1981, Glenmar stated its intention to put into effect, as of January 30, 1981, its "last and final proposal" of $3.50 per hour, plus benefits, inasnmch as the parties "are at impasse." Local 370 re- plied, by letter dated January 27, that it "cannot accept any reduction in wages" and would not provide projec- tionist services at $3.50 per hour. On January 28, the projectionists struck and replacements and managers thereafter operated the projection equipment at $3.50 per hour or at their normal salary. 238 GLENMAR CINESTATE, INC. In early April, Boardman telephoned Bevan and of- fered $4 per hour if the projectionists would return. The following day, Boardman was advised that the member- ship had rejected the proposal. By letter of April 17, 1981, Local 370 requested reinstatement of the five strik- ing projectionists. By telephone, Bevan explained that his offer was not to return at $4 per hour. Boardman and Bevan agreed that a further meeting would be pointless. By letter dated February 6, 1981, Glenmar confirmed its willingness to reinstate the strikers at $4 per hour. None returned. It was not until March 9, 1981, 3 months after the last bargaining session on November 15, that Local 370 filed its first unfair labor practice charge alleging a refusal to bargain and it was not until July 16, 1981, 3 months after its demand for reinstatement by letter dated April 17, that the second charge was filed alleging a refusal to re- instate the five striking projectionists.' For reasons set forth below, I conclude that Glenmar did not fail to bargain collectively in good faith in viola- tion of Section 8(a)(l) and (5) of the Act, as alleged, that a genuine impasse in bargaining over wages was reached on November 15, 1981, and that, accordingly, the com- plaints must be dismissed in their entirety. The fatal flaw in the position of both the General Counsel and the Charging Party is that it totally ignores the realities of Glenmar's financial position in 1980, thus paving the way for a misinterpretation of the motives behind Glenmar's insistence on substantial wage reduc- tion and flexibility in its hours of operation. When all facts and circumstances are considered, as they must, N.L.R.B. v. American National Insurance Co., 343 U.S. 395 (1952), it becomes clear that Glenmar's position con- stituted at all times a good-faith effort to meet competi- tion which was operating in Richmond with lower labor costs and more advanced and modern equipment and facilities. Indeed, both the General Counsel and the Charging Party tacitly acknowledged Glenmar's plight through their silence in the face of Glenmar's decision to close two of the drive-in theatres and reduce drastically the operating hours of the two indoor theatres. Throughout their bargaining relationship, Glenmar's good faith is amply demonstrated: it voluntarily assumed I All findings )f fact herein are based on the credited testimony of Boardman which was supported by voluminous notes taken during the several bargaining sessions. The testimony of union representatives. on the other hand, was less of a reliable indicator of bargaining events. as it was based entirely on memory. Their credibility was tarnished somewhat by their denial, at the hearing, of an awareness of Glenmar's financial dif- ficulties. the industry's new bidding procedures, and wage rates paid by competitors in the area. Commonsense dictates that experienced local and International union officials and company projectionists who are engaged in serious negotiations would come to the bargaining table with an awareness of industry practices and local economic conditions. More- over, the fact that Local 370 itself proposed cost-cutting measures during negotiations and waited a particularly lengthy period of time before filing its first charge conflicts with its denial of an awareness of financial diffi- culties on the part of Glenmar and refutes, in part, its contention of bad- faith bargaining two existing labor contracts which provided for wages and benefits higher than those at its other operations; it agreed to extend those terms and conditions for another 8 months (to January 1981), despite its growing losses, to permit orderly collective bargaining to take place; it agreed to increase certain benefits; it offered its projec- tionists for the first time a means by which to grieve dis- putes with their Employer; it accepted the Union's pro- posal to offer preferential employment terms to senior projectionist Stinson; and it offered to reinstate the strik- ing projectionists at a wage rate higher than offered at the last bargaining session. Significant also are a number of facts: that, admittedly, all terms were agreed to except wages and hours; that union bargaining representatives acknowledged Glen- mar's good-faith bargaining and the existence of a genu- ine deadlock; and that it was the Union which ap- proached the bargaining table with a fixed intent not to back off its current $7.22 hourly rate with guaranteed hours, despite clear evidence of Glenmar's growing oper- ating losses. Considering the extensive three-phased bargaining his- tory of the parties, Glenmar's good-faith efforts through- out to reach an accord which would permit it to operate competitively and profitably, the importance of the issues of wages and guaranteed hours to both parties, and the understanding of the parties as early as November 15, 1980, that a genuine deadlock had been reached, I am compelled to conclude that impasse occurred on Novem- ber 15, 1980. Taft Broadcasting Co., WDAF AM-FM TV, 163 NLRB 475 (1967), enfd. 395 F.2d 622 (D.C. Cir. 1968). It necessarily follows that the five striking projection- ists were engaged from the outset in an economic strike and that Glenmar was tree to institute changes, as it did, reasonably comprehended within its final proposal. Tem- porary replacements were paid $3.50 per hour and the fact that salaried managers were used to operate those projectors for whom replacements could not be found is wholly irrelevant to the issues presented by the com- plaints as amended. Upon the foregoing findings of fact, conclusions of law, and the entire record and pursuant to Section 10(c), I hereby issue the following Recommend: ORDER 2 It is ordered that the complaints be, and the same hereby are, dismissed. 2 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the find- ings. conclusions, and recommended Order herein shall. as provided in Sec 102 48 of the Rules and Regulations, he adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes 239