Memphis Furniture Mfg., Co.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Memphis Furniture Manufacturing Co. and United Furniture Workers of America, Local 282. Case 26-CA-8258 January 14, 1981 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO Upon a charge duly filed on February 1, 1980, by United Furniture Workers of America, Local 282, herein called the Union, and duly served on Memphis Furniture Manufacturing Co., herein called Respondent, the General Counsel of the Na- tional Labor Relations Board, by the Regional Di- rector for Region 26, issued a complaint and notice of hearing on April 24, 1980, in Cases 26-CA-8343 and 26-CA-8258, and thereafter severed them upon the execution of a settlement agreement in the former case. The complaint alleged with respect to the latter case that Respondent violated Section 8(a)(5) and (1) of the National Labor Relations Act, as amend- ed, by refusing to pay unit employees a Christmas bonus in December 1979. Respondent filed a timely answer to the complaint denying the commission of any unfair labor practices. Thereafter, on August 25, 1980, the General Counsel of the National Labor Relations Board filed with the Board in Washington, D.C., a stipu- lation entered into by the parties on August 19 and 20, 1980, wherein they, inter alia, (1) agree that Re- spondent failed to pay a Christmas bonus in 1979, (2) waive a hearing before an administrative law judge, and (3) request that the instant case, Case 26-CA-8258, be transferred directly to the Board and considered jointly with Case 26-CA-7551, which involved the same parties, and that the Board make findings of fact and conclusions of law and issue a Decision and Order in the instant case. By an order dated September 29, 1980, the Board approved the stipulation of the parties, denied the request that the instant case be consid- ered jointly with Case 26-CA-7551,1 ordered the instant proceeding transferred to the Board, and advised the parties to file briefs with the Board. Thereafter, the General Counsel filed a Motion for Summary Judgment 2 and Respondent filed a brief in opposition thereto. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- I The Board issued its Decision and Order in Case 26-CA-7551 on September 24. 1980, 252 NLRB No. 25. 2 In view of the parties' request that the Board issue a Decision and Order on the basis of the stipulated record, we shall treat the Motion for Summary Judgment as a brief. 254 NLRB No. 39 tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. On the basis of the stipulation, the Motion for Summary Judgment, the brief, and the entire record, the Board makes the following: FINDINGS OF FACT I. THE BUSINESS OF RESPONDENT Respondent is a Tennessee corporation engaged in the manufacture of furniture in Memphis, Ten- nessee. During the 12-month period preceding the stipulation, Respondent had direct inflow and out- flow of materials and products valued in excess of $50,000. The parties stipulate, and we find, that Respon- dent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and we find that it will effectuate the purposes of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED The parties stipulate, and we find, that United Furniture Workers of America, Local 282, is, and at all material times has been, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Stipulated Facts All production and maintenance employees, local and over-the-road truckdrivers, and warehouse em- ployees of Respondent constitute an appropriate unit for collective-bargaining purposes within the meaning of Section 9(b) of the Act. Following an election on or about May 20, 1977, the Board on September 15, 1977, certified the Union as the col- lective-bargaining representative of the unit em- ployees. At all times thereafter, the Union has been, and is now, the exclusive representative of all unit employees for the purposes of collective bar- gaining with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. From March 12, 1978, and continuing to March 12, 1980, Respondent and the Union were parties to a collective-bargaining agreement which provided the terms and conditions of em- ployment for the unit employees. On December 11, 1979, Respondent's counsel, Ted M. Yeiser, sent to Union President Willie Rudd a letter referring to article XV, the Christ- mas bonus provision of the collective-bargaining agreement, 3 stating that production and economic :' It provides as follows: "The Company shall continue its present dis- cretionary policy concerning the granting of gratuitous Christmas bo- rnuses. 330 MEMPHIS FURNITURE MANUFACTURING CO. Christmas bonus for 1979, and suggesting a meeting to discuss the matter. Yeiser and Rudd and other representatives of Respondent and the Union met on January 2, 1980, at which time Respondent de- scribed its business problems and offered a reduced bonus of $15 to employees with more than I but less than 5 years of service and $30 to those with longer service. The Union took the position that Respondent should adhere to the formula it fol- lowed in the past; namely, 20 and 40 hours of pay respectively for the two classes of employees. On January 3, the membership of the Union voted to reject Respondent's offer; and Respondent was so informed on the following day. Thereafter, Respondent, without the consent of the Union, failed to pay any Christmas bonus for 1979 to unit employees. B. Contentions of the Parties The General Counsel contends that the instant case is governed by the recent Decision involving the same parties and issue 4 wherein the Board held that Respondent violated Section 8(a)(5) and (1) of the Act by failing to comply with its promise to continue, for the life of its 2-year contract with the Union, payment of the Christmas bonus in the same manner as in preceding years. Respondent argues as follows in requesting dis- missal of the complaint herein: The language of article XV of the collective-bar- gaining agreement provides that Christmas bonuses are discretionary and gratuitous. It is settled law that such gratuities are not mandatory subjects of bargaining. As the parties freely agreed that Christ- mas bonuses are discretionary and gratuitous, the 1979 Christmas bonus is outside the scope of mat- ters which are mandatory subjects for collective bargaining. The clear language of the Christmas bonus arti- cle is buttressed by article I, "Purposes and Scope of Agreement," 5 which constitutes a clear and un- 4 Memphis Furniture Manufacturing Co.. supra. Art. I provides: Section 1. The purpose of this Agreement is to record the full terms agreed upon by the Company and Union on all matters subject to collective bargaining. Section 2 . .. [T]he parties acknowledge that during the negoti- ations which have resulted in this Agreement, each party had the un- limited right and opportunity to make demands and proposals, and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement. Therefore, the Company and the Union, for the life of this Agreement. each voluntarily and unqualifiedly waive the right and each agrees that the other shall not be obligated to bargain col- lectively with respect to any subject or matter referred to or covered by this Agreement, or with respect to any subject or matter not spe- cifically referred to or covered in this Agreement, even though such subject or matters may not have been within the knowledge or con- templation of either or both of the parties at the time they negotiated and signed this Agreement. mistakable waiver of the Union's right to bargain over the 1979 Christmas bonus.6 Even if it is assumed, arguendo, that the Christ- mas bonus is a mandatory subject for bargaining, Respondent did not violate Section 8(a)(5) and (1) of the Act because it did in fact bargain in good faith with the Union regarding that subject on Jan- uary 2, 1980. Although Respondent initially pro- posed that it pay no Christmas bonus for 1979, it did offer to compromise by paying less than the usual amount. However, the offer was unequivocal- ly rejected by the Union, which did not request any further negotiations or give any indication that it would accept an amount smaller than that pro- vided by the formula used by Respondent in the years up to and including 1977. 7 C. Discussion and Conclusions We agree with the General Counsel that the in- stant case is governed by the recent Decision8 wherein the Board deemed the language of the Christmas bonus provision of the contract unclear but resolved the ambiguity therein by holding, in light of the negotiations concerning said provision as well as the history of Respondent's regular bonus payments before and after the negotiations, that Respondent orally agreed to continue to pay the bonus for the life of the contract on the basis of the same formula as in the past. Respondent was therefore ordered to give retroactive effect to the Christmas bonus provision pursuant to said formu- la. As indicated above, Respondent contends that article I of the contract constitutes a waiver of the Union's right to bargain concerning the continu- ation of the Christmas bonus, and that, in any event, Respondent was under no obligation to pay the 1979 bonus because it did in early 1980 bargain in good faith with the Union, which refused to accept its compromise proposal. The cases cited by Respondent in support of its argument are inappo- site as they, unlike the instant proceeding, do not involve a contract which contains a Christmas bonus provision. As the Board has already con- cluded that said provision requires Respondent to pay its traditional Christmas bonus for the life of the 2-year contract, Respondent's contentions as to I Respondent cites Radioear Corporation, 199 NLRB 1161 (1972), and 214 NLRB 362 (1974), and Bancroft-. Whitney Ca. Inc., 214 NLRB 57 (1974). for the proposition that a similar "zipper" clause constituted a waiver of the union's right to bargain concerning the continuation of the Christmas bonus. I Respondent cites Century Electric Motor Company. 192 NLRB 1941 (1971), wherein it was held that the employer had bargained in good faith to impasse on the subject of a Christmas bonus and was therefore free to withhold it. n Memphis Furniture Manufacturing Co.. supru. 331 DECISIONS OF NATIONAL LABOR RELATIONS BOARD its good-faith bargaining and waiver are inapplica- ble to the situation herein because the Union in its dealings with Respondent properly continued to rely on the Christmas bonus provision of the con- tract by insisting on compliance therewith. In view of the foregoing, we find that Respon- dent violated Section 8(a)(5) and (1) of the Act by failing and refusing to pay its unit employees the 1979 Christmas bonus in accordance with the for- mula which it followed prior to 1978. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with its oper- ations described in section I, above, have a close, intimate, and substantial relationship to trade, traf- fic, and commerce among the several States and tend to lead to labor disputes burdening and ob- structing commerce and the free flow of com- merce. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices, we shall order that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent unlawfully failed and refused to pay Christmas bonuses to employees for 1979 as required by the collective-bargaining agreement then in effect, we shall order it to honor and give retroactive effect to the terms and condi- tions of the collective-bargaining agreement relat- ing to Christmas bonuses and make its employees whole for losses suffered by reason of its failure to honor and apply the provisions of the agreement, with interest to be computed in the manner set forth in Florida Steel Company, 231 NLRB 651 (1977). 9 CONCLUSIONS OF LAW 1. Memphis Furniture Manufacturing Co. is an employer engaged in commerce within the mean- ing of Section 2(2), (6), and (7) of the Act. 2. United Furniture Workers of America, Local 282, is a labor organization within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees, local and over-the-road truckdrivers, and ware- house employees of Memphis Furniture Manufac- turing Co., but excluding all office clerical and pro- fessional employees, salesmen, watchmen, guards and supervisors as defined in the Act, constitute a 9 See, generally, Isis Plumbing d Heating Co., 138 NLRB 716 (1962). unit appropriate for the purposes of collective bar- gaining within the meaning of Section 9(b) of the Act. 4. Since September 15, 1977, the above-named labor organization has been, and is now, the certi- fied and exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing since December 1979, and at all times thereafter, to bargain collectively with the above-named labor organization as the exclusive bargaining representative of the employees of Re- spondent in the appropriate unit, specifically by re- pudiation of the Christmas bonus due the unit em- ployees pursuant to its collective-bargaining agree- ment with the Union, Respondent has unilaterally and without the consent of the Union, modified the contract in mid-term in derogation of Respondent's bargaining obligation under Section 8(d) of the Act, thereby engaging in unfair labor practices af- fecting commerce within the meaning of Section 8(a)(5) of the Act. 6. By the acts described in section III, above, Respondent has refused to bargain with the Union and has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed them in Section 7 of the Act, and thereby has en- gaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Memphis Furniture Manufacturing Co., Memphis, Tennessee, its officers, agents, successors, and as- signs, shall: 1. Cease and desist from: (a) Unilaterally and without the consent of the Union failing and refusing to pay Christmas bo- nuses due employees under any collective-bargain- ing contract between Respondent and the Union or othewise unilaterally modifying the provisions of any such contract during its term. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: 332 MEMPHIS FURNITURE MANUFACTURING CO. (a) Honor and give retroactive effect, from De- cember 1979, to the terms and conditions of its March 12, 1978, collective-bargaining contract with the Union relating to Christmas bonuses, and make its employees whole for the losses incurred by them as a result of Respondent's failure to honor and apply the provisions of the contract in the manner set forth in the section of this Decision entitled "The Remedy." (b) Preserve and, upon request, make available to the Board and its agents, for examination and copy- ing, all payroll records, social security payment re- cords, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay and other redress due under the terms of this Order. (c) Post at its Memphis, Tennessee, place of busi- ness copies of the attached notice marked "Appen- dix." 1 0 Copies of said notice, on forms provided by the Regional Director for Region 26, after being duly signed by Respondent's authroized representa- tive, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. 'O In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." (d) Notify the Regional Director for Region 26, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. APPENDIX No-rTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILI. NOT unilaterally and without the consent of United Furniture Workers of Amer- ica, Local 282, fail and refuse to pay Christmas bonuses due you under any collective-bargain- ing agreement between us and the Union or otherwise unilaterally modify the provisions of any such contract during its term. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of your rights under Section 7 of the National Labor Relations Act, as amended. WE WILL honor and give retroactive effect to the terms and conditions of our March 12, 1978, contract with the Union as it relates to Christmas bonuses, and WE WILL pay each of you the amounts you lost since December 1979 with interest on the amounts due, because we did not pay the Christmas bonuses due under the contract. MEMPHIS FURNITURE MANUFACTUR- ING Co. 333