General Electric Company, Apparatus Service Division

DECISIONS OF NATIONAL LABOR RELATIONS BOARD General Electric Company, Apparatus Service Divi- sion and International Union of Electrical, Radio and Machine Workers, AFL-CIO-CLC and its Local 620. Case 9-CA-16866 September 29, 1982 DECISION AND ORDER BY CHAIRMAN VAN DE WATER AND MEMBERS FANNING AND ZIMMERMAN On April 14, 1982, Administrative Law Judge Philip P. McLeod issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and the Re- spondent filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. 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 PHILIP P. MCLEOD, Administrative Law Judge: On May 21, 1981,1 a charge was filed against General Elec- tric Company, Apparatus Service Division, herein called Respondent, by International Union of Electrical, Radio and Machine Workers, AFL-CIO-CLC and its Local 620, herein collectively called the Union. The charge was subsequently amended on July 1. A complaint and notice of hearing issued on July 10, alleging that Re- spondent had violated Section 8(a)(l) and (5) of the Na- tional Labor Relations Act, as amended, herein called the Act, during January !981 by unilaterally subcontract- ing work designated as "heavy helper work" without prior notice to, or bargaining with, the Union. In its answer to the complaint, Respondent admits the filing and service of the charge: that it is a New York corpora- tion engaged in the service of mining equipment at its Charleston, West Virginia, service facility; and that it is an employer within the meaning of the Act. Respondent further admits that it has been party to an established collective-bargaining relationship with the Union since 1950 and has had successive collective-bargaining agree- All dates hereoi refer to the year 1981, unles otherwise indicated. 264 NLRB No. 56 ments covering a production and maintenance bargaining unit at its Charleston, West Virginia, service center. Re- spondent denies having engaged in any conduct which would constitute an unfair labor practice. A hearing was held before me in Charleston, West Virginia, on December 17, 1981, at which all parties were represented by counsel and were afforded full op- portunity to be heard, to examine and cross-examine wit- nesses, and to introduce testimony. Thereafter, the Gen- eral Counsel and Respondent filed briefs which have been duly considered. Upon the entire record in this case, and from my ob- servation of the witnesses, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent, a New York corporation, is engaged in the service of mining equipment at its Charleston, West Virginia, facility. During the past 12 months, a repre- sentative period, Respondent, in the course and conduct of its operations, shipped from its Charleston, West Vir- ginia, service facility goods and materials valued in excess of $50,000 directly to points outside the State of West Virginia. Respondent admits it is, and has been at all times material herein, an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 11. LABOR ORGANIZATION International Union of Electrical, Radio and Machine Workers, AFL-CIO-CLC and its Local 620, collectively constitute a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Allegations and Issues As indicated above, the complaint alleges and the General Counsel contends that during January 1981 Re- spondent unilaterally subcontracted work designated as a "heavy helper work" without prior notice to, or bargain- ing with, the Union. In January 1981 employee Kermit Reed, who was classified as "heavy helper" and had performed janitorial work for Respondent for a number of years, was hospi- talized. Reed notified Respondent that he would be hos- pitalized for some time, and this case relates to a portion of Reed's work which Respondent subcontracted when Reed became hospitalized. When Reed returned to work in July 1981, Respondent ceased subcontracting the work in question and again assigned it to Reed. In July 1981, Reed retired, and a portion of the work was again sub- contracted. At the hearing and in its post-hearing brief, counsel for the General Counsel argues that Reed was forced or tricked into retiring. In the post-hearing brief, counsel for the General Counsel states in part, "Argu- ably, Reed's forced or tricked retirement in effect consti- tutes a constructive discharge. By abolishing Reed's posi- tion and by forcing or tricking Reed into retirement, Re- spondent has in effect violated Section 8(a)(5) of the 306 GENERAL ELECTRIC COMPANY Act." At the hearing, Reed was called as a witness by counsel for General Counsel, and Respondent objected to Reed's testimony about the circumstances of his retire- ment. There is no allegation in the complaint regarding Reed's retirement in July and I ruled that testimony re- garding his retirement would be received solely to the extent it might bear some relationship to the specific alle- gation in the complaint regarding subcontracting or to the issue of whether a remedy would be appropriate even if Respondent were found to have violated the Act by subcontracting the work in January 1981. In response to my ruling, counsel for the General Counsel stated, "Yes, this is on the impact theory only." In view of the representation by counsel for the General Counsel at the hearing, I do not consider the circumstances of Reed's retirement as giving rise to any issue that he was con- structively discharged in violation of Section 8(a)(5) of the Act. Respondent argues that pursuant to the Board's deci- sion in Westinghouse Electric Corp. (Mansfield Plant), 150 NLRB 1574 (1965), it had no obligation to bargain with the Union about subcontracting janitorial services when Reed became hospitalized. Respondent further argues that the Union waived its right to bargain over subcon- tracting of unit work by virtue of language contained in the national agreement between it and the Union, that Respondent did in fact give notice to and bargain with the Union in January 1981 about subcontracting a por- tion of Reed's work while he was hospitalized; that the issue of Respondent's subcontracting of work after Reed's retirement in July 1981 is not properly before the Board; and that if such later subcontracting is properly before the Board, Respondent did not violate the Act with respect to such later subcontracting. B. The Facts Kermit Reed has been employed by Respondent since May 3, 1974, during which time he has performed janito- rial services. Reed, who unfortunately suffers from a sub- stantial hearing loss and a severe speech impediment, has been designated as a "heavy helper" which has allowed him to earn a higher wage rate than it would be possible for him to earn if classified as a janitor. Reed, who worked a full-time 40-hour work schedule, cleaned the vast majority of the area comprising the first floor of Re- spondent's Charleston facility. The area cleaned by Reed included the lunchroom (408 square feet), locker room (302 square feet), men's restroom (132 square feet), and the shop area (approximately 24,000 square feet). Since 1972, and continuing to the present, Respondent has used an outside contractor to perform janitorial serv- ices on the second floor of its Charleston facility which includes office space and restroom areas totaling approxi- mately 4,246 square feet. This contractor has also been used regularly to clean that portion of the first floor of the facility which comprises the production office (416 square feet) and instrument laboratory (625 square feet). On January 23, 1981, Reed went on vacation. On Jan- uary 26, prior to entering the hospital on January 28, Reed informed his supervisor, Roland Price, that he was going to be hospitalized and that he would be out of work for some time. Reed also told Price that he intend- ed to retire once he returned to work. After using his va- cation leave, Reed was placed on sick leave until he re- turned to work in early July 1981. Upon being notified by Reed that he would be out of work for some time, Price decided to divide the majority of Reed's work among the various bargaining unit em- ployees. More specifically, each employee was to be re- sponsible for cleaning his/her own area. Price decided to assign cleaning of the restroom, locker room, and lunch- room to Kanawha Janitorial Service which was already cleaning the other areas of the facility described above. Kanawha started performing this additional work on February 2. Within a few days of his conversation with Reed, Price notified David Turley, president of the Local Union, of his plans to have the first floor lunchroom, restroom, and locker room cleaned by Kanawha. This notification occurred prior to the time Kanawha actually started performing the work on February 2. Also prior to February 2, Richard Freer, Respondent's facility man- ager, met with Turley and other representatives of the Union to discuss pending grievances. Turley acknowl- edges that this meeting occurred in January. At the time of the meeting the Union was aware of Respondent's plan or intention to subcontract a portion of the work which had been performed by Reed for in the meeting the Union proposed to Respondent that it recall one of the employees who was then on layoff to perform Reed's janitorial work. Freer responded that he intended to phase out the janitorial work. On January 30, 1981, the Union filed a grievance protesting the subcontracting of janitorial work to Kanawha. 2 Respondent continued to use Kanawha Janitorial Serv- ice to clean the downstairs lunchroom, locker room, and men's restroom in addition to the other areas which it normally cleaned until early July 1981 when Reed re- turned to work from sick leave. When Reed returned to work in July, Respondent again assigned these duties to Reed. Approximately 3 weeks after returning to work, Reed retired. During this short period when Reed re- sumed duties, Reed and Price had a conversation which unquestionably hastened Reed's retirement. The testimo- ny of Reed and Price regarding this conversation is vir- tually identical except in one small but important respect. According to Reed, Price approached him one day while at work and told Reed, "Buddy3 if you don't hurry up and retire, you [are] going to go to jail." According to Reed, Price did not say why Reed might go to jail, and Reed did not ask Price why. According to Reed, about a week later Price took Reed into Price's office and again spoke to him about retirement. On this occasion, accord- ing to Reed, Price told Reed, "If you don't hurry up and retire, you [are] going to get in trouble." According to 2 What discussions, if any, toxk place between Respondent and the Union after February 2 during the processing of this grievance are not reflected in detail in the record The grievance did not result in binding arbitration and there is no issue herein ,ith regard to application of the Board's "Collyer" deferral doctrine (192 NLRB 837 (1971)) since the grievance procedure specifically excludes issues of subcontracting ' It appears that "Buddy" is a nickname which Price and Reed each used in addressing the other and aas not intended nor received as being derogator, 307 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Reed, he did not ask Price why he might get into trou- ble, but simply informed Price that he did not want to get in trouble and that Friday of that week would be his last day. Although Reed admitted that while on sick leave he had applied for and obtained social security benefits and that he was receiving such benefits when he returned to work in July, Reed denied that the conversa- tion with Price occurred in the context of him receiving such benefits while continuing to remain employed. Price agreed that Reed's testimony was accurate insofar as the statement or statements attributed to him by Reed. Price, who I found to be a very straightforward witness and whose testimony I credit, explained that these conversa- tions were initiated one day when Reed passed by while Price happened to be standing outside his office. Price and Reed were engaged in a casual conversation during which Reed commented to Price that he had received his first social security check. Price, somewhat amazed, replied, "What?" Reed responded, "Yeah, I got my first Social Security check." Price then took Reed into his office and asked Reed, "Are you telling me you got your Social Security check and you're still working?" Reed replied, "Yeah, that's right, Buddy." Price responded, "Well, Kermit, you can go to jail behind that." Specifi- cally, I credit Price that his statement or statements to Reed about the possibility of going to jail arose in the context of Reed receiving social security benefits while continuing to work and in no other context. Price's de- meanor was unusually candid and straightforward; from his testimony it was clear that he bore no hostility what- ever toward Reed, did not care whether Reed continued to work or retired, and had no reason for wanting to coerce, trick, or even persuade Reed into retiring. Fur- ther, Reed admitted on cross-examination that what Price had told him played no part in his decision wheth- er to retire; i.e., that Reed was going to retire in any event. From Reed's admission, I conclude that Price's statement to Reed did not affect Reed's decision whether to retire but that it served only to hasten Reed's retire- ment date. IV. ANAL.YSIS AND CONCI USION It is well established that the contracting out of work done, or which may be done, by employees in a bargain- ing unit is a mandatory subject of bargaining. Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203 (1964). It is also well settled, however, that the Board's prohibition against unilateral subcontracting of unit work was not in- tended as laying down a hard and fast rule to be me- chanically applied regardless of the situation involved. Westinghouse Electric Corporation (Mansfield Plant), 150 NLRB 1574, 1576 (1965). In Westinghouse, the Board noted: As the Supreme Court has indicated in a broader context, even where a subject of mandatory bar- gaining is involved, there may be "circumstances which the Board could or should accept as excusing or justifying unilateral action." * * * In the Fibreboard line of cases, where the Board has found unilateral contracting out of unit work to be violative of Section 8(a)(5) and (1), it has invariably appeared that the contracting out involved the de- parture from previously established operating prac- tices, affected a change in conditions of employ- ment, or resulted in a significant impairment of job tenure, employment security, or reasonably antici- pated work opportunities for those in the bargaining unit. Although not expressly stated as such by the Board in its Westinghouse decision, it has come to be generally recog- nized that an employer's unilateral subcontracting of unit work will not be held to be an unfair labor practice where it satisfies the following five criteria: (I) the sub- contracting is motivated solely by economic consider- ations; (2) it comports with the company's traditional methods of conducting its business operations; (3) it does not vary significantly from prior established practices; (4) it does not have a demonstrative adverse impact on em- ployees in the bargaining unit; and (5) the union had the opportunity to bargain about changes in existing subcon- tracting practices at general negotiating meetings. Both counsel for the General Counsel and counsel for Respondent recite these five criteria and devote consid- erable discussion to each of them separately. While coun- sel for Respondent argues that each of the five criteria is met, he also argues that the most critical of the criteria is the affect which the subcontracting will have on bargain- ing unit employees. I agree with that argument. He also argues that, without an adverse impact on the existing working conditions, an employer's decision to subcon- tract does not violate its obligations under 8(d) of the Act even if the other criteria are not met. None of the cases which he cites in support of that statement, howev- er, make an express holding to that effect. Nevertheless, the determinative significance of the adverse impact cri- teria is expressly recognized by counsel for the General Counsel in his brief wherein he states, "The single most important aspect of the Westinghouse decision was that the decision to subcontract had no adverse impact on any employees in the unit." Both counsel cite, and coun- sel for the General Counsel significantly relies on, the Board's decision in Weston and Brooker Company, 154 NLRB 747 (1965), where an employer's unilateral action, consisting of eliminating a single job classification, was found by the Board to constitute a violation even though the change involved only one employee. This case is the most extreme example cited by either party wherein the Board found a violation in such circumstances. Respond- ent cites numerous other cases where no violation was found where it can be argued that the impact of unit em- ployees was significantly greater than that in Weston and Brooker Company, supra. In this regard, Respondent cites American Oil Company, 171 NLRB 1180 (1968); General Electric Co., 240 NLRB 703 (1979); General Tube Co., 152 NLRB 850 (1965); Union Carbide Corporation, 178 NLRB 504 (1969); and the very recent case of General Motors Corporation, Inland Division, 257 NLRB 820 (1981). What constitutes "significant impairment of job tenure, employment security, or reasonably anticipated 308 GENERAL ELECTRIC COMPANY work opportunities" pursuant to the Westinghouse deci- sion has been left to a refining process of case-by-case decisions, no formula being given by which one can divine whether in a given case subcontracting has result- ed in significant detriment to the bargaining unit. Coun- sel for the General Counsel argues in his brief that "The present case involves the loss of at least 7-1/2 hours of bargaining unit work per da,." thereby attempting to draw an obvious parallel to Wiiton and Brooker Compa- ny, supra. The record herein does not support that argu- ment, however, and in fact establishes something substan- tially different. Prior to Reed going on sick leave in January 1981, his assigned duties were to clean the downstairs lunchroom, locker room, men's restroom. and shop area. The com- bined area assigned to Reed was 25,149 square feet. When Reed became hospitalized, cleaning of the shop area (24,307 square feet) was assigned to other bargain- ing unit employees, by each employee being required to clean up his own area. Only cleaning of the lunchroom, locker room, and downstairs restrooms were subcon- tracted to Kanawha Janitorial Service. The total area subcontracted to Kanawha equaled only 842 square feet and represented only 3.3 percent of the area which Reed had regularly cleaned. Conversely. 96.7 percent of Reed's area continued to be cleaned by bargaining unit employees. Witnesses proffered by the General Counsel estimated that the work subcontracted to Kanawha took between 2 to 3 hours per day to complete. Using even their esti- mate, the amount of work subcontracted was not sub- stantial. More accurate than such estimates, however, are the actual time records of Kanawha Janitorial Service which show that the portion of Reed's work subcon- tracted to Kanawha amounted on the average to ap- proximately 6.25 hours per week. From a time stand- point, therefore, the additional work subcontracted to Kanawha represented only 15.6 percent of Reed's 40- hour work schedule. By any analysis, it must be conclud- ed that the amount of work which had been performed by Reed and which was subcontracted to Kanawha was minimal. Counsel for the General Counsel argues that the record shows Respondent's primary reason for subcon- tracting the work to Kanawha was expediency rather than economics and that therefore Respondent has not met the first Westinghouse criterion listed above. I believe counsel for General Counsel misunderstands the import of that first criterion by applying it too literally. By con- ceding as counsel for the General Counsel does that ex- pediency was Respondent's motivation, she effectively concedes that Respondenlt has met the first criterion. The "economic considerations" with which the Board is and should be primarily concerned might be expressed differ- ently as "business exigencies." In enunciating the first criterion, the Board is primarily concerned that Re- spondent not be motivated by unlawful considerations but rather by business considerations. Since, as counsel for the General Counsel concedes, Respondent was clearly not motivated by any sinister or unlawful motive in subcontracting the \work it did in January 1981 when Reed became hospitalized. and instead was motivated solely by business concerns, I conclude that Respondent has met the first Westinghouse criterion. Whether Respondent's subcontracting does or does not meet the second and third Westinghouse criteria is open to some argument. Clearly, the work actually subcon- tracted had previously been performed exclusively by Reed for a number of years, and in that sense subcon- tracting of that work cannot be said to "comport with Respondent's traditional method of conducting its oper- ations." Further, the only time Respondent ever subcon- tracted cleaning of the areas which were cleaned by Reed was for a period of 6 months during 1973, and therefore it can be argued that Respondent's subcontract- ing in 1981 does not "vary significantly from prior estab- lished practice" as that term is used in the third Westing- house criterion. Both arguments are advanced by counsel for the General Counsel and, I believe, beg the question. It is undisputed that much of the janitorial work at Re- spondent's Charleston, West Virginia, facility has been done by an outside janitorial service for numerous years. The second floor office area and restroom as well as the first floor production offices and instrument laboratory have been cleaned by outside janitorial services since at least 1972, prior to the time Reed was hired by Respond- ent. The significant fact is that subcontracting of janitori- al service work was not a new way of carrying out Re- spondent's operations. That portion of Reed's work sub- contracted to Kanawha was simply an extension of a long-established method of operation. Counsel for the General Counsel also argues that the evidence presented fails to demonstrate that the Union had an opportunity to bargain at previous general negoti- ating sessions about changes in existing subcontracting practices. Although not a factor controlling my decision in any event, I find this argument incredible because counsel for the General Counsel itself expressly acknowl- edges that, in negotiations going back to 1963, the Union has proposed, and the parties have negotiated concern- ing, a limitation upon subcontracting. Respondent has never been willing to agree to such a provision, and, before a contract has ultimately been agreed to, the Union has always withdrawn that demand. This is not to say that the Union has ever agreed to allow Respondent to freely subcontract bargaining unit work. Rather, it re- flects that not only has the Union had the opportunity but that the parties have in fact engaged in repeated bar- gaining about Respondent's existing practices of subcon- tracting bargaining unit work. Considering all of the factors described above, but noting specifically and relying primarily on the fact that the amount of work subcontracted by Respondent to Kanawha Janitorial Service which previously had been performed by Reed was so slight as to be de minimis and have no demonstrable adverse impact on unit employees, I find that Respondent has not violated Section 8(a)(5) and (I) of the Act as alleged in the complaint, and I will therefore recommend that the complaint be dismissed in its entirety.4 4 In view of mrn con.hilions herein. I find it unneccssary ino. and do not. consider the other defenses adsanced bs Respondent, including the Continued 309 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCI USIONS OF LAW 1. Respondent, General Electric Company, Apparatus Service Division, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Respondent has not engaged in unfair labor prac- tices within the meaning of Section 8(a)(5) or (1) of the Act by the conduct alleged in the complaint. Upon the basis of the findings of fact, conclusions of law, and the entire record herein, I hereby issue the fol- lowing recommended: argument that the Union waived its right to bargain about the subcon- tracting of unit work by virtue of language contained in the national agreement between the parties. ORDERS Upon the basis of the foregoing findings of fact and conclusions of law, it is recommended that the complaint be dismissed in its entirety. 5 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, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 310