Central Virginia Electric Cooperative

CENTRAL VIRGINIA ELECTRIC COOPERATIVE Central Virginia Electric Cooperative and Interna- tional Brotherhood of Electrical Workers, Local 467. Cases 5-CA-11335 and 5-CA-11685 January 14, 1981 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND ZIMMERMAN On August 29, 1980, Administrative Law Judge Bernard Ries issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting 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 brief and has decided to affirm the rulings,2 findings, 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 Respondent, Central Virgin- ia Electric Cooperative, Lovingston, Virginia, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. i Respondent's request for oral argument is hereby denied a tihe record, the exceptions, and the brief adequately present the issues and the positions of the parties. 2 Resxondent has excepted to certain credibility findings made hb the Administrative Law Judge It is the Hoard's established policy not to overrule an administrative law judge's resolutions with respect to redi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect Standard Dr' Wall Products, Inc, 91 NLRB 544 (1950), enfd. 188 F2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing his filidinlgs DECISION BERNARD RIES, Administrative Law Judge: This matter was heard in Lynchburg, Virginia, on March 24- 25, 1980. The complaints raise questions as to whether Respondent violated the collective-bargaining obligations imposed upon it by Section 8(a)(5) of the National Labor Relations Act, as amended. I Briefs have been received from the parties. On the basis of the briefs, the demeanor of the witnesses, and the entire record, 2 I make the following findings of fact, conclusions of law, and recommendations. I The pleadings establish that it is appropriate for the Hoard to exercise jurisdiction over Respondent 2 Errors in the transcript have been noted and corrected 254 NLRB No. 46 Respondent provides electrical energy to customers from its facilities at Lovingston, Appomattox, and Pal- myra, Virginia. On July 10, 1978, the Charging Party was certified as the collective-bargaining representative of Respondent's 68 or 69 field and maintenance employ- ees. On August 3, 1978, the first negotiating meeting was held. Bargaining continued until shortly before the hear- ing in these cases commenced, but no agreement was reached. Based on a charge filed by the Union in August 1979, a complaint in Case 5-CA-11335 issued on October 24 of that year, alleging that Respondent had violated Section 8(a)(5) and (I) of the Act. The operative paragraph reads: Since on or about February 26, 1979, Respondent has failed and refused and continues to fail and refuse to bargain collectively in good faith with the Union and has instead engaged in a course of con- duct designed to undermine the Union's status as collective-bargaining representative in the unit set forth above in paragraph 5, by the following acts and conduct: (a) maintaining and basing its collective-bargain- ing position upon the Union's alleged liability for the cost to Respondent of a subcontractor; (b) failing and refusing to offer any meaningful contract proposals for the Union's consideration; (c) continuing to assert that further collective- bargaining meetings were futile unless the Union was willing to accept Respondent's proposal; (d) since on or about April 15, 1979, granting a seven percent wage increase to non-unit employees, while offering a wage increase no greater than three percent to unit employees; (e) unilaterally subcontracting bargaining unit work on or about June 15, 1979, and thereafter [sic] laying off unit employees, at a time when collec- tive-bargaining negotiations were continuing and impasse had not been reached. After the Union had filed another charge on Novem- ber 30, 1979, a complaint in Case 5-CA-11685 was issued on January 9, 1980. The allegations of the princi- pal paragraph are identical to those set out above, with three exceptions: The paragraph begins, "Since on or about October 4, 1979," instead of "February 26, 1979"; and subparagraphs (c) and (d), above, are omitted. By order of January 18, 1980, the Regional Director consoli- dated the two cases for hearing. At the hearing, counsel for the General Counsel stated that, despite the omission of subparagraphs (c) and (d) from the second complaint, all five specific allegations of the original complaint were to be considered vital. The General Counsel's post-hearing brief, however, does not address three of the five allegations. The brief states the "issues" as follows: 1. D)id Respondent engage in bad faith surface bargaining by insisting upon recouping from its em- ployees various amounts paid to a subcontractor 417 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hired to perform unit work before, during, and after a two-week strike? 2. Did Respondent violate Section 8(a)(5) of the Act during the course of negotiations with the Union, and at a time when no impasse existed, by instituting unilateral changes in terms and condi- tions of employment? The argument on brief addresses only these two issues, and I must therefore assume that the General Counsel no longer attaches any independent significance to the other three complaint allegations. The reference to "surface bargaining" in the first stated issue is repeated in the ar- gument on that issue, but the General Counsel is not wholly consistent thereafter. The findings ultimately re- quested by the brief are that "Respondent violated Sec- tion 8(a)(l) and (5) of the Act by insisting upon recoup- ing from its employees various amounts of money paid to a subcontractor" and that Respondent, on two theories, violated the Act by "unilaterally awarding unit work to a subcontractor and permanently laying off unit employ- ees .... " No finding of "surface bargaining," as such, is expressly urged.3 Similarly, the five-point remedy re- quested by the General Counsel makes no allusion to sur- face bargaining; the most closely related proposed reme- dial provision is that Respondent be ordered to "Cease and desist from insisting upon recoupment of money from its unit employees through a wage proposal." As drawn, the pertinent complaint allegation appears to be an amalgam of some evidentiary pleadings which point to an ultimate claim of "bad faith" or "surface bar- gaining" (e.g., the reference in subpar. 7(d) to offering a greater wage increase to nonunit employees than to unit employees certainly sounds like a basis for asserting bad faith) and, as well, pleadings which might constitute in- dependent violations (e.g., the unilateral subcontracting of bargaining unit work alleged in subpar. 7(e)).4 None- theless, paragraph 7, while not including the more cus- tomary language of "surface bargaining" (such as "Re- spondent bargained without the intention of reaching agreement"), does state that Respondent refused to bar- gain "in good faith . . . and has instead engaged in a course of conduct designed to undermine the Union's status as collective-bargaining representative .... " At the hearing, counsel for Respondent specifically noted his understanding that surface bargaining was being al- leged: "However, I know the intricacies, if you will, of a surface bargaining 8(a)(5) charge which is what the Gov- ernment has alleged here." Counsel thereafter went on to attempt to demonstrate aspects of the bargaining rela- :' "Surface bargaining" has been variously described as "concealing a purposeful strategy to make bargaining futile or fail," V.L R B. Herman Sausage Company. Inc., 275 F.2d 229, 232 (5th Cir. 1960): 'giving the union a runaround while purporting to be meeting with the union for the purpose of collective bargaining,'" V.L.R B. v .4hI .an- ufacturing Company, 161 F.2d 8 (5th Cir. 1947); "Sophisticated prcltrense in the form of apparent bargaining," Continental Insurance ('o. N.LR.B., 495 F.2d 44, 48 (2d Cir. 1974). 4 Unilateral subcontracting. of course, might sometimes be evidence of bad faith. but the facts relating to the subcontracting of the rigll-of-ssay work in June and October 1979. as shown below, do not reasonably appear to rall into the mold of a deliberate attempt to circumvc t Ihe Union or disparage it. The issue, at least, was clearly not litigated on that premise. tionship which could arguably be considered indicia of overall "good-faith" on the part of Respondent. It thus would seem that the complaint has been read by the parties, and may be considered, to contain an alle- gation of "surface bargaining." The fact that the General Counsel has, on brief, effectively abandoned three of the five specific allegations, leaving only one which truly sounds in bad faith and another which appears to be more malum prohibitum than malum in se, presents some- thing of an obstacle to reaching a broad conclusion of "surface bargaining." It is, to say the least, unusual for a surface bargaining conclusion to rest on a single facet of the negotiations, compare, e.g., Tomco Communications, Inc., 220 NLRB 636 (1975), although such a result is by no means impossible. I shall discuss the issues as posed by counsel for the General Counsel in his brief. The first issue pertains to Respondent "maintaining and basing its collective-bar- gaining position upon the Union's alleged liability for the cost to Respondent of a subcontractor." As noted above, bargaining began on August 3, 1978, at which time the Union made a complete contract pro- posal with the exception of wage rates. On August 17, Respondent countered with a similar noneconomic pack- age and, on August 30, Respondent submitted another contract, this one proposing three wage increases of 7 percent in 1979, 1980, and 1981. Respondent again of- fered the proposal, with some changes, on September 10. On September II, about half of the unit employees went on strike; the strike ended on September 23. Beginning on August 28, Respondent hired a subcon- tractor named Stackhouse, Incorporated, of Goldsboro, North Carolina, to perform extended work.5 During the week of August 28, seven Stackhouse employees, using various kinds of equipment, each put in almost 40 hours of work; Respondent reimbursed Stackhouse for the labor and machinery rental. Thereafter, in every week between September 1978 and February 2, 1979, any- where from 10-15 Stackhouse employees and, once as many as 25, were used by Respondent, and Respondent paid Stackhouse for the men and machinery. 6 Apparently only one bargaining session took place during the strike, on September 22, and the parties did not meet again until February 6. At that meeting, Her- bert Larrabee, chief negotiator for Respondent, told Lawrence Hogan, principal spokesman for the Union, that Respondent's prior offer was no longer on the table, 7 and he "talked about recouping around $270,000 some dollars of alleged losses that the Cooperative lost due to the strike and before and since." On February 26, when the parties met again, Respon- dent made a new contract offer which incorporated most of its earlier proposals, changed some, liberalized some, " Actually, as noted inj.u, Slackhouse employees first performed some linited work for Respondent on August 8. " Respondent's witness testified that Respondent cntinued to subcon- tract work to Stackhouse regularly after February 2. and up to the date of tie hearing, but the Stackhouse invoices i evidence are for the period only through early February 7 Indeed, Respolndent had specified i a proposal of September 15 that, unless the strikers returned to work b September 18, its "total package offer should be considered withdrawn 418 CENTRAL VIRGINIA ELECTRIC COOPERATIVE and included a new wage increase schedule: a 3-percent increase in 1979, a 3-percent increase in 1980, and a 6- percent increase in 1981. Larrabee stated that Respon- dent had decreased its wage offer "in order to recoup the money lost or the money they will have to pay Stackhouse in order to keep them on the site to guard against a strike." Abandoning the $270,000 figure earlier used, Larrabee asserted that the Stackhouse costs from September to February had amounted to a total of $131,000, and that the wage offer reduction from 7-7-7 percent to 3-3-6 percent represented an attempt to re- cover that cost. After February 26, Larrabee persisted in this position and, at Hogan's request, in March and April sent to Hogan written explanations of the Stackhouse ex- penditures from August through January. At the hearing, Larrabee confirmed Hogan's account. He indicated that, as he had told Hogan, Respondent had engaged Stackhouse in August, prior to the strike, be- cause of fear of such an occurrence; that the Stackhouse employees had worked during the strike in place of the missing employees;8 and that Respondent continued to employ them thereafter for fear that another unan- nounced strike, especially during the "storm season" in January and February, might erupt. It is somewhat difficult, on this sketchy record, to get a firm grip on the activities of the Stackhouse employees after the strike ended. These employees, usually number- ing 12 or 13 a week, were doing, according to Larrabee, "bargaining unit work." Since, after the strike terminat- ed, Respondent had reinstated the strikers whom it had not permanently replaced during the strike, it presum- ably had, as of the end of September, a full complement. One would suppose that, with a complete regular work force employed after September, Respondent would not have needed a dozen or more Stackhouse employees each week to perform "bargaining unit work," but that is what Larrabee testified.9 There is no indication that the Union commented on the fact that Stackhouse employees were being used to perform such work, although Hogan testified that he had seen them doing line work several times. I o Respondent defends its bargaining position on brief as follows: The Union understood Respondent's obligation to continue operations at all times, and without regard for that duty and the expense to be imposed upon Respondent, proceeded to go out on strike. Respon- dent believes the expenses thus incurred cannot rightfully be passed on to consumers, and believes it was thus justified in attempting to "recoup" funds s As noted, perhaps half of the 68-69 employees struck, and 6 or so were permanently replaced The Stackhouse invoices show that. while the strike was on, 25 Slackhouse employees worked during September 11-16, performing 235 hours of overtime, and II worked during Septem- ber 18-23, with 98 hours of overtime. I He speculated that they might have been doing some other sort of work as well, but he could not say what it might have been. 'o The exhibits show that, in most weeks after the strike, solme of the Stackhouse employees worked small amounts of overtime spent for the subcontractor by reducing the wage offer. Respondent incurred expenses, most of which would have been unnecessary had the Union dem- onstrated respect for the statute requiring advance notice of an intended work stoppage at a public util- ity. Had the Union demonstrated a willingness to comply with the law, Respondent could have re- tained subcontractors during the 30 day notice period (R. 318-321). Due to the ever present threat of a strike, and the union negotiator's proven inabil- ity to prevent a strike (R. 82-83), the Respondent's position of public trust required that subcontractors be available at all times. The reference to "the statute requiring advance notice" is to a provision of the Virginia Code requiring that written notice be furnished to the Virginia Depart- ment of Labor and Industry prior to a public utility strike. Hogan testified that, while the Union did not give written notice of the strike, it "gave verbal notice through a Federal mediator as we have done in the past." Since Respondent first engaged a substantial number of Stackhouse employees to begin work on August 28, and since these employees were purportedly hired in anticipation of a strike, it would appear that Re- spondent in fact had ample notice of the strike which began September 11. The claim that week after week thereafter, even up to the time of the hearing (some 18 months), anywhere from 10-15 Stackhouse employees were retained simply "[d]ue to the ever-present threat of a strike" is, I think, implausible. The Union plainly "lost" the September strike. and some half dozen or more of the strikers were permanent- ly replaced. Although Larrabee testified that there con- tinued to be "rumors" of another strike, he did not supply any specifics about these rumors. While I am in no position to categorically conclude that Respondent did not entertain fears of a second strike, and that it did not cater to that fear by hiring 10-15 subcontractor em- ployees per week, I am quite dubious about the claim. Certainly, 10 or 12 employees would not have made much of a dent in any second strike which might have succeeded in attracting most or all of the work force of 68 or so employees. More to the point, however, I see no basis for Respon- dent's assertion that, in order to guard against another strike, it "incurred expenses, most of which would have been unnecessary"; expenses which "cannot rightfully be passed on to consumers" and which must therefore be taxed against the unit employees. The notion of attempt- ing to "recoup" from the future wages of unit employees the moneys expended by Respondent on Stackhouse em- ployees and equipment from August to February seems peculiarly baseless and inappropriate. Although there are various reasons for so concluding, a fundamental and pervasive one is that Respondent did not incur any substantial additional costs-certainly not to the tune of $131,000-by hiring Stackhouse. Given 419 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Larrabee's testimony that the work done by Stackhouse was "bargaining unit work" and not "make-work," it fol- lows that what the Stackhouse employees did prior to the strike was work for which Respondent would have paid its regular employees-or someone-in any event. The same analysis applies to the work done by Stack- house during the strike: Had the unit employees not struck, Respondent would have paid them their regular wages for the work which was instead done by Stack- house.'2 And, of course, the same logic holds true for the post-strike period. Thus, the idea of assessing the entire Stackhouse ex- pense for the August-February period against the unit employees is exceedingly harsh and unrealistic. The im- plicit claim that Respondent was attempting to recover strike-related "losses" is fallacious since, on the reason- able assumption that Stackhouse was giving a day's work for a day's pay, there were no losses. 3 It is obvious that Respondent willingly hired Stackhouse, particularly after the strike, to do work which needed to be done, and un- doubtedly received a proper return on its investment. The rationale given by Respondent for offering its own employees less wages after the strike is thus, in my view, reduced to a sham, and a knowing sham at that.14 The mendacity of the claim is pointed up by the incon- sistency of its application; although Respondent contin- ued to employ Stackhouse workers long after February, with Larrabee telling Hogan that "they were still afraid of a strike," Respondent chose not to attempt to "recoup" the post-February Stackhouse costs, and did not explain, either to Hogan or at the hearing, the rea- soning behind the seemingly arbitrary cutoff date. Re- spondent's brief states: "it was thus apparent to all that the Respondent had no alternative course of action but to engage subcontractors when the strike became immi- i Indeed. as will be discussed in connection with the right-of-vwaN crevw, below. Respondent contended at least as far as that particular work was involved, that Stackhouse was able to do the job at a substan- tial aving. It may well be, furthermore, that had Respondent performed the ubcontracted work by us of its regular employees, it would have incurred significant overtime costs, and that it thus further decreased ex penses by employing Stackhouse L' In fact, according to letters from Larrabee to Hogan in April and May, Respondent saved a substantial amount of money during the strike The letters state that wages not paid to striking employees from Septem- ber 11 23 amounted to $28,(X): that Respondent paid about $6,6(X) fior tempolrary and permanent replacements ad overtime during that period; and that Respondent paid Stackhouse about $17,(XXi for labor and equip- menli during the period. : When asked, Larrabee could not say that Stackhouse had insisted that its a condition of making itself available for emergency work. Re- sponldent must keep a minimum numher oif Stackhouse employees under contract on a weekly basis, and I am sure Respondent would have at- tempted to demonstrate any such improbable requirement had it existed. a" Included in the $131,0X) figure is an invoice fr $12,786 which cannot reasonably be thought o be work done in fear of a strike, and which involved a very minor labor coist. Invoice number 843178 shows that "cable and transfiirmer installation," and other work, was started and completed by Stackhouse on August 8, just 5 days after the first negotia- tion ession and prior to the submission of a contract proposal by Re- sporndent. The labor cost involved was about $300. Stackhouse performed no other work for Respondent until August 28. Nonetheless. the entire $12,780 was included in the $1311.(X) which Respondent sought to "recoup " Similarly. the nion as to be charged with the cost of Stack- house employees used during a severe storm in January even though Larrabee at first conceded (hut later retracted) that the employees would have been hired for that purpose in any event nent, and to retain the subcontractor for as long as the threat of a strike continued." But Larrabee testified that the "threat" had not ceased even at the time of the hear- ing: "Stackhouse [is] still being employed by the Cooper- ative for this same original purpose of a fear of a strike." The fact that Respondent decided to stop levying the Stackhouse costs against the unit employees as of Febru- ary, despite the fact that the ongoing circumstances had not, in Respondent's view, changed, indicates the spuri- ous nature of the attempted offset. In February, for some reason, it became acceptable to "pass on to consumers" the "strike-related" Stackhouse costs. With this background, the decision by Respondent to reduce its prestrike '5 wage offer from 7 percent a year for 3 years to 3, 3, and 6 percent may be viewed in more than one way, and none of the alternatives is consistent with the statute. At the very least, it may be said that the claim that recoupment from future wages of employees was necessary or justified because of the September strike was a dishonest contention; as shown above, Re- spondent did not lose anything by hiring the subcontrac- tor and, as well, the $131,000 recoupment amount includ- ed sums which under no circumstances could have been considered as related to any strike-defense contention. In N.L.R.B. v. Truitt Manufacturing Co., 351 U.S. 149, 152 (1956), the Supreme Court stated: "Good-faith bargain- ing necessarily requires that claims made by either bar- gainer should be honest claims." And in N.L.R.B. v. J. P. Stevens & Co., Inc., Gulistan Division, 538 F.2d 1152, 1165 (1976), the Fifth Circuit made the broad pronounce- ment: "Every position on issues of mandatory bargaining . . . must reflect a legitimate business purpose, otherwise the company has not bargained in good faith." See also United Steelworkers of America, AFL-CIO [Roanoke Iron & Bridge Works, Inc.] v. N.L.R.B., 390 F.2d 846, 852 (D.C. Cir. 1967). Minimally, Respondent has failed to satisfy this test of honesty and legitimacy. A more vicious characterization, and one which seems appropriate to me, may be applied to Respondent's modi- fication of its wage offer-that it was inspired by a desire to punish the unit employees for engaging in the Septem- ber striket' and by a more ultimate objective of under- mining the status of the Union as the collective-bargain- ing representative. Since Respondent must have known that it had incurred no losses, as such, by employing the Stackhouse employees and receiving the value of their services; since Respondent padded its "recoupment" figure, presumably with full knowledge, by adding in amounts which could not conceivably be considered in- cludable under its "strike-defense" contention; and since t l.arrabee twice testified that the original 7-7-7 offer was made only "to settle the strike" and "to end the strike " n this, he was wrong. That offer was made on August 3() 11 days before the strike began. I Respondeit does not directly urge that I find that the strike was illegal under the Virginia statute; the evidence does not establish that proposition; and I deem it unnecessary to consider the issue. Whatever the abstract conclusion might be, Virginia law is preempted by Federal law in this field, and therefore the Union was not obliged to furnish any notice in order to strike lawfully E g., NLR.B. v Stare of New York., 436 F Supp 335 (D.CN.Y. 1977), affd without opinion 591 F.2d 1331 (2d Cir 1978). Moreover, Respondent never sought to invoke any sanc- tions against the Union, under either body of law, and it condoned the strike by reinstating all the unreplaced strikers. 42() CENTRAL VIRGINIA ELECTRIC COOPERATIVE Respondent betrayed the tenuous nature of this conten- tion by arbitrarily selecting a cutoff date after which there would be no recoupment although the circum- stances remained identical, it is fair to say that this sham was not simply an existential aberration, but was, rather, a purposeful event. The underlying purpose must have been at least to penalize the employees for participating in the strike and probably, and more comprehensively, to make a wage offer, under the "recoupment" pretext, which the employees could not possibly consider accept- able and which might eventually result in unseating the Union as bargaining agent. This latter theory becomes the more convincing in the light of the evidence relating to a contemporaneous wage increase given to the nonunit employees, whose number Larrabee estimated at "possibly" 30-40. Al- though, beginning around February, Larrabee began to tell Hogan that Respondent's financial condition was in serious decline, 7 Respondent nonetheless in April grant- ed a 7-percent increase to the nonunit employees while continuing to offer only 3 percent to the bargaining unit. L This relative and unexplained largesse at a time of financial weakness could scarcely have had any effect upon union supporters other than the foreseeable one of making plain to them the consequences of union repre- sentation. 9 In these circumstances, I believe that it is appropriate to infer that Respondent was engaged in surface bargain- ing, as alleged. It substantially lowered its wage propos- al, undoubtedly the most significant item in the package, in response to the strike and on a pretext so patently spe- cious as to certify that the Union would never accept the offer. It must be concluded that Respondent was bar- gaining "without serious intent to adjust differences and to reach an acceptable common ground," N.L.R.B. v. In- surance Agents' International Union, AFL-CIO [Prudential Insurance Co.], 361 U.S. 477, 485 (1960). As framed by counsel for the General Counsel, the second issue is: "Did Respondent violate Section 8(a)(5) of the Act during the course of negotiations with the Union, and at a time when no impasse existed, by insti- tuting unilateral changes in terms and conditions of em- ployment?" The dispute here is over certain subcontracting to Stackhouse, in June and October 1979, of work done by 17 The record appears to support this contention II is clear. however, that Larrabee always identified Respondent's financial condition and the recoupment requirement as separate and independent imperativ'es Hogan testified that, while Larrabee spoke of both, "they ere Io different things" Larrabee testified that. on February 26. he "explained that the reason why the figures were at 3 and 3 was because of our concern about recouping this $131.000." It As of the time of the hearing, almost 20 months after bargaining had begun, the represented employees had received no wage increase In 1979, Respondent had gradually moderated its proposal and, by February 1980, was offering 3 percent for the first year, 3 percent for the first 7 months of the second year and 4 percent for the last 5 months, and n percent for the third year. 9 Although the record affords no details about other comparative per- sonnel costs attributable to unit and nonunit personnel, the conitract pro- posals do not indicate any large new cost items proposed by the Union for the represented employees It appears that neither side conlemplated any changes in the existing benefit plans. for example right-of-way crews. 2 0 At the meeting of February 6, 1979,2 1 Larrabee mentioned to Hogan that Respondent was considering the contracting out of some of the right- of-way work, but that he had nothing further to present since the matter was still being studied. At that time, Larrabee testified, Respondent's management was facing serious business difficulties and had become aware that other electric cooperatives in Virginia used subcontrac- tors, rather than their own employees, for right-of- ay work, finding the subletting of such work to be molt ef- ficient and less expensive. Larrabee also testified that he told Hogan on February 6 that Respondent was making a study in Palmyra of the efficacy of contracting out the work. Hogan's only response at the time was to object. At a meeting on February 26, Larrabee again stated that the right-of-way study was in process, and he "ad- vised the Union to participate in that, in that process'' Hogan once more simply objected to any subcontracting of the work.2 2 At the March 16 meeting, Larrabee a;gain spoke of the possibility of subcontracting the work, and said that "if the Union has any objections to it then could they come up with some alternative." At this meeting, or perhaps an earlier one, Hogan suggested that the elimination of employees could be done by attrition rather than layoff. On May 23, Larrabee sent Hogan the following letter: As we advised you in former bargaining sessions, the Central Viginia Electric Cooperative has been contemplating for economic reasons to discontinue the use of some of our right-of-way crews and would plan to utilize subcontractors where these duties are necessary, as is the practice with otter Virginia electric cooperatives. We would plan to reduce our right-of-way crews at Lovingston from the current level of two cre ws to one crew, and to completely lay off the right-of- way crews at Appomattox and use subcontractors at that location. We plan to proceed with our plans commencing on or about 6-1-79. Due to this business decision the junior right-of-way axeman at Lovingston. Mr. J. W. Gormes, will be laid off effective 6-1-79 At Appomattox, also effective 6-1, the following right- of-way axemen will be laid off: Messrs. T. M Jotes, W. N. Kelso, Billy Coleman, and D. L. Johnson. The right-of-way lead man at Appomattox will also be laid off-Mr. A. D. Slough-on that same date. 21 Right-of-say) employees clear wooded areas so that ther rslker may hav e access to the ulility poles and fatdinles 2 All dales hereafter refer to 1979. 22 In reciitig the course of events on this ubject, I rely printl.lri on Larrahee's testimony, which was more comprehensiec and orderl tha;n Hogan's. That is not to say that I am convinced by everything Ih;ll I ar rabee had to say Although he appeared to be a bright ad honest 'it- ress. he contradicled himself, or %was contradicted by documentar? cxi- dence. more than once I this are;,. however Hogan testified lhal Ihe possible silbcontracmlilg of righl-of-way work alas "quite frecqttltl Iy mentioned by I.arrabee between F-ehruary and Junre ad he is not called in rebuttal to deill specifically anytlhing testified to b .Larrabec Hogan's "quite freqtenitls phrase I would lotl-. is soniet) hat rlnl.h'.ldilg. according to I arrhabee, he referred to Ithe sutlble. prior to Jtln 5 Onl) briefls n F:ehriuar\ 6 and 2 and M.rc Ih 421 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Due to business reasons there is no expectation of recall in the future. We are again communicating to you and recog- nize our obligations to bargain with you regarding the impact on employees from our decision. We would appreciate your input on this matter as soon as possible. As you recall, in one of our former bar- gaining meetings you had commented in response to my statements to you on this same matter that, per- haps, this situation could be handled by normal at- trition; however, since there is little turnover in these classifications, this alternative would not be feasible. We would be willing to explore any other areas you would suggest. Unless we hear from you by letter or telephone further, we will plan to proceed with the layoffs as outlined. Hogan's response to this letter was a mailgram regis- tering "strong . . . protest" against the proposed action and asking for a meeting. Respondent consequently did not take the personnel actions planned for June 1, and Larrabee met with Hogan on June 5. At that time, Larrabee explained to Hogan the results of the Palmyra study which had concluded that the Stackhouse cost for the right-of-way work was less than half of Respondent's own cost. Hogan objected to an overhead factor used in the study, and also offered two alternatives, one being that the idea of subcontracting should be abandoned and the other being that attrition should be allowed to take its gradual toll. Larrabee told Hogan that he had reviewed the attrition possibility with management and had been told, based on turnover data, that normal attrition would not be effective for 10-12 years. On June 11, Larrabee again wrote to Hogan. He re- viewed in some detail the discussions on the right-of-way matter, and explained again why the attrition approach was not acceptable. He announced that, based on the data reviewed, "the Cooperative has decided to reduce the Lovingston Cooperative right-of-way crews from two to one and completely eliminate the use of the Co- operative right-of-way crew at Appomattox, effective 6- 15-79 .... " Larrabee also gave specifics as to the layoff of the same six employees referred to in the May 23 letter. The letter finally offered to provide "any fur- ther information you desire." On June 13, Hogan sent a mailgram "object[ing] strenuously" to the layoffs and or- dering, "Do not lay off," but the employees were termi- nated as scheduled. Respondent proceeded to lay off the remaining right- of-way employees in October. At a bargaining meeting on October 24, according to Larrabee, he "indicated to the Union that we were going to proceed now with the next stage; and [Hogan] objected, but I indicated that we had to proceed based upon the further extension of our planning that it would not be to the best interests of the economic position of the Cooperative to delay any longer." On October 25, Larrabee sent a telegram to Hogan which stated: Re CVEC negotiations and meeting 10-24-79 per our discussions following right of way crew em- ployees will be terminated permanently effective immediately with no expectation of recall due to the business reasons we reviewed with you and in accordance with the practices reviewed with you in the handling of the former terminations. There followed the names of 11 employees. The arguments advanced by opposing counsel on brief pass-almost-like ships in the night. The principal con- tention made by Respondent is that it "was under no ob- ligation to bargain over the decision to subcontract, but recognized and fulfilled its obligation to bargain over the impact on employees." The General Counsel argues that the case is governed by the principle that "an employer violates Section 8(a)(5) of the Act by, during the course of negotiations with its employees' bargaining representa- tive, and at a time when no impasse exists, instituting unilateral changes in terms and conditions of employ- ment." 23 It seems to me that the governing precedent of Fibre- board Paper Products Corp. v. N.L.RB., 379 U.S. 203 (1964), clearly establishes that the decision to subcontract the right-of-way work was a mandatory subject of bar- gaining under Section 8(a)(5) of the Act. The relevant factors in Fibreboard basically apply here: The Company's decision to contract out the mainte- nance work did not alter the Company's basic oper- ation. The maintenance work still had to be per- formed in the plant. No capital investment was con- templated: the Company merely replaced existing employees with those of an independent contractor to do the same work under similar conditions of employment. Therefore, to require the employer to bargain about the matter would not significantly abridge his freedom to manage the business [379 U.S. at 213]. There is some fleeting testimony in this record about the use by Stackhouse of "mechanical" as opposed to "manual" methods of work, but not enough to serve as a basis for an argument that, had Respondent not chosen to subcontract, it might for some reason have felt com- pelled to change to a "mechanical" method involving a major capital expenditure. 2 4 The situation here was much like the one the Court considered in Fibreboard: The Company was concerned with the high cost of its maintenance operation. It was induced to con- 2:' Respondent does make a succinct secondary argument, that if it iwere required to bargain over the decision, it did so, and in fact bar- gained to impasse. The General Counsel also offers short arguendo con- tentions that, even if impasse were reached on the contract as a whole, the right-of-way proposal presented on June 5 was a new and different proposal, and was also offered as a fuai accomph. 24 The only slightly specific allusion to this subject in the testimony is a statement by Larrabee that, on June 27, he and Hogan had "long dis- cussions on the cost of the right-of-way trucks, and a point that I was making that the Cooperative would not have to make fined equipment commitments for trucks that run $50,X00 when the subcontractor could handle that, which is the practice in all the other, most of the other coo- peratives" 422 CENTRAL VIRGINIA ELECTRIC COOPERATIVE tract out the work by assurances from independent contractors that economies could be derived by re- ducing the work force, decreasing fringe benefits, and eliminating overtime payments. These have long been regarded as matters peculiarly suitable for resolution within the collective-bargaining frame- work, and industrial experience demonstrates that collective negotiation has been highly successful in achieving peaceful accommodation of the conflict- ing interests.[Ibid.] I conclude, therefore, that the decision to substitute subcontracted employees for Respondent's own right-of- way employees was one about which Respondent was required to bargain collectively, pursuant to the dictates of Section 8(a)(5). 25 E.g., American Cyanamid Company v. N.L.R.B., 592 F.2d 356, 360-361 (7th Cir. 1979). The General Counsel's primary "failure to bargain to impasse" argument runs as follows. At the outset of ne- gotiations, "the parties agreed to the total package con- cept of bargaining where agreement must be reached on all proposals before signing a collective-bargaining agree- ment." 26 In a comprehensive management rights propos- al made by Respondent on August 30, by which Respon- dent would have retained for itself considerable author- ity, the only reference to subcontracting was "the Coop- erative has and retains all rights to manage its business · . . including but not limited to the exclusive right in accordance with its judgment to: . . . Sub-contract work not regularly performed by personnel in the unit, or when such regularly performed work overload [sic] which duration does not justify hiring of additional per- manent employees ... ." By its further offer of September 15, Respondent with- drew all proposals effective as of September 18 if the strike had not ended by that time. Notwithstanding this withdrawal, the Union, on September 22, "agreed" to the Cooperative's management rights proposal, and did so again in a proposal of January 18. As explained by Larrabee at the hearing, Respondent's February 26 pro- posal effectively resurrected Respondent's original man- agement rights clause, and the Union again "agreed" to it on that day. 2 7 The General Counsel states, "The question to be an- swered is whether or not an impasse had been reached on the total package when Respondent instituted its uni- lateral change." He argues that since, as the record shows, there was fluidity in the positions of the parties throughout the negotiations, and since the parties were bargaining on a "total package" basis, no impasse was reached on the complete package which might have per- mitted Respondent unilaterally to implement one or more of its components, here specifically a subcontract- ing arrangement. Alternatively, he contends that, even if impasse were reached, the June subcontracting was a new and different creature from what had been proposed 25 The parties stipulated. I should note, that Respondent had "econom- ic motivation and justification" for the change to subcontracting. Z As far as I know. however, every contract is negotiated on the same essential premise. 27 The parties, however, did not initial the management rights clause as "tentatively agreed to," which they had done with respect to four other articles at the beginning of negotiations and tentatively accepted at the bargaining table on the subject of subcontracting. The General Counsel relies for his primary argument on, inter alia, the recent case of Winn-Dixie Stores, Inc., 243 NLRB 972, 973 (1979), where the Board stated that it is "well settled that an employer violates Section 8(a)(5) of the Act by, during the course of negotiations with its employees' bargaining representative and at a time when no impasse exists, instituting unilateral changes in terms and conditions of employment." 2 8 In Winn-Dixie, the employer put into effect an interim wage increase which it had offered to the union, and the union had rejected, during negotitations for an agreement. A distinction may exist between the Winn-Dixie kind of case and this one, in that the issue of whether Respon- dent should subcontract the right-of-way work, although it was discussed at the bargaining table during the course of negotiations, was, arguably, not truly and intimately linked to the proposed collective-bargaining agreement. Respondent had tentatively made, and the Union had tentatively agreed to, a contract proposal relating to sub- contracting rights which would obtain in futuro in the event that the parties ever reached agreement. The right- of-way subcontracting in 1979 was an ad hoc issue of more immediate concern which, as I see it, the parties discussed, as a matter of convenience, at the bargaining table at which they were negotiating a contract. Thus, a possible, although hardly compelling, differ- ence between the Winn-Dixie sort of case and the present case may lie in the fact that the wage increases given in the Winn-Dixie cases were directly and inextricably en- twined with the proposals on the table, and the subcon- tracting here was thought to be a one-shot expedient, not so closely bound to the contract demands. Nonetheless, although the Board's thorough analysis in Winn-Dixie ap- pears to speak essentially to changes made during negoti- ations which may have an effect on those negotiations (e.g., "Clearly this duty requires more than going through the motions of proffering a specific bargaining proposal as to one item while others are undecided and merely giving the bargaining agent an opportunity to re- spond"), I cannot believe, on reflection, that the Board would require any less than bargaining "to impasse" about any change in a mandatory subject of negotiation, whether or not it is considered separable from the con- tractual collective-bargaining process itself; the Board's analysis in Winn-Dixie of the nature of the 8(a)(5) obliga- tion makes any other conclusion untenable. The necessary implication of the General Counsel's primary argument seems to be that, unless the parties have reached an impasse in their total negotiations, an employer may not put into effect a change relating to one or more components thereof, whether or not he may be said to have separately reached impasse with the union as to the issue of implementing those individual 28 The Board noted that the Court of Appeals for the Fifth Circuit im the prior case of Winn-Dixie Stores. Inc. v N. R. B.. 567 F 2d 1343. 1349 (1978). had rejected a similar holding. saying that the employer had satis- flied its duty to bargain where "it gave the union notice of its desire to raise wages and met with the union in a bargaining session at which the union presentled counterproposals" 423 DECISIONS OF NATIONAL LABOR RELATIONS BOARD items. The several references in Winn-Dixie to the "status" and "state" of the general negotiations, and other such allusions, suggest that the General Counsel is correct, while other language points in a contrary direc- tion. Atlas Tack Corporation, 226 NLRB 222 (1976), enfd. 559 F.2d 1201 (Ist Cir. 1977), cited in Winn-Dixie, seems to support the General Counsel's formulation, although in that case, unlike here, there was no discussion at all with the union before the changes were implemented. Federated Publications, Inc., 221 NLRB 778 (1975), enfd. 555 F.2d 144 (6th Cir. 1977), also cited in Winn-Dixie, while not conclusive on the subject, seems to focus on the fact that no impasse as to wages had occurred at the time the employer instituted a wage increase. N.L.R.B. v. Benne Katz. etc., d/b/a Williamsburg Steel Products Co., 369 U.S. 736, 746-747 (1962), appears to say at one point that separate bargaining to impasse about a single implemented item might have been acceptable (where the company put into effect merit increases about which, inter alia, the parties had been bargaining, "the union may properly insist that the company negotiate as to the procedures and criteria for determining such increases." Dicta in N.L.R.B. v. Crompton-Highland Mills., Inc., 337 U.S. 217, 224 (1949), may be read to indicate that certain unilateral action is permissible even though impasse as a whole has not been reached. ("We do not here have a unilateral grant of an increase in pay made by an em- ployer after the same proposal has been made by the em- ployer in the course of collective bargaining but has been left unaccepted or even rejected in those negotiations. Such a grant might well carry no disparagement of the collective bargaining proceedings. Instead of being re- garded as an unfair labor practice, it might be welcomed by the bargaining representative, without prejudice to the rest of the negotiations.") It is not entirely clear to me, after reviewing the fore- going authorities, that despite the amount of notice and consultation with respect to implementing a specific change in working conditions, an employer is precluded from implementing that change if no impasse has been reached as to the entire contract. 29 I think a firmer foun- dation for finding a violation may be found, however, in the General Counsel's alternative argument that the June subcontracting decision was presented as a fail accom- pi. : 0 2,' That certainly would not be the view of the Fifth Circuit. Wlnn- Dixrie Stores Int: v. N.L.R.., supra. 30 Of course, if the General Counsel's position is doctrinally correct. then a violation of Sec 8(a)}(5) has been made out apart from my conclu- sions hereafter. since there was plainly no impasse between the parties as to the entire contract at any pertinent time, The eneral Counsel is also on somewhat surer ground ill the follow- ing argument: "Assuming for the moment that impasse had been reached sometime during 1979, it is contended that Respondent instituted a sub- contracting proposal that was not properly presented to the Union and bargained over. . In effect bargaining never took place prior to Re- sponldent implementing an entirely different proposal from what the par- tiff had agreed to" He is here alluding to the principle of NL.R.B. v Crompton-Highland Mls Inc, supra at 225, where the Supreme Court held it unlawful for an employer, without consultation with the union, to put into effect rates of pay "which are substantially different from, or greater than, any which the employer has proposed during its negotia- lions with such representative." Application of such a doctrine here would, however, require a finding that the actual subcontractinlg done was connected to the contract bargaining in process which, as discussed, An employer is entitled to develop a proposal fully before presenting it to a union. Joseph Macaluso, Inc., d/ b/a Lemon Tree, 231 NLRB 1168, 1176, fn. 35 (1977); The Lange Company, A Division of Garcia Corporation, 222 NRLB 558, 563 (1976). The decision embodied in that proposal, however, "may not, under Section 8(a)(5), be a 'final' one"; the law "enjoins an employer who has made such a decision to retain sufficient flexibility of purpose as to be receptive to union arguments and coun- terproposals which may result in a rescission or modifi- cation of the plan .... " J. P. Stevens & Co., Inc., 239 NLRB 738, 749 (1978). I believe that the evidence clearly shows that, with regard to the decision about subcontracting, in contradis- tinction to the issue of the effects of such a decision, 3 1 Respondent had a closed mind on the former subject and effectively presented the Union with a fait accompli when it announced its plan in May. While, according to Larrabee's unrebutted testimony, he made three references to the ongoing "study" of the subcontracting issue between February and May, and urged the Union to participate in it, the invitation was obviously not a very concrete one. The last such refer- ence prior to his May 23 letter, according to Larrabee, was on March 16. More than 2 months later, on May 23, Larrabee sent the letter announcing that Respondent "plan[s] to proceed with our plans commencing on or about 6-1-79," and naming the employees to be laid off. In this letter, Larrabee made a statement which, I be- lieve, can only be read to mean that Larrabee thought he was obliged to do no more than bargain about the effects of the decision, in contrast to the decision itself: "We are again communicating to you and recognize our obliga- tions [sic] to bargain with you regarding the impact on employees from our decision" (emphasis supplied). Larra- bee, an adjunct professor of labor law at Virginia Com- monwealth University, an arbitrator, and a labor consul- tant for 30 years, presumably chose his written words advisedly, despite his more comprehensive testimony (which also recognizes the distinction between decision and impact) that he had advised the Cooperative that "we had an obligation to bargain with the Union on the decision and the impact on employees and that we could not proceed as a Cooperative until that obligation has been concluded." The May 23 letter solicited Hogan's "input on this matter as soon as possible"; otherwise, "unless we hear from you by letter or telephone further we will plan to proceed with the layoffs as outlined." After Hogan, on May 26, sent a mailgram protesting the layoffs and saying that the parties "should meet and attempt to settle this or any other issues as soon as possible," the layoffs may possibly have its problems: and would further still necessitate an in- quiry into whether there swas adequate bargaining, which was totally absent ill Crompon-Ilighland. :" As Respondent's brief acknowledges, the law has so developed that an employer may be obliged to bargain about a decision itself as well as its impact on employees, or about only the latter E.g., N.L.R.B. v. Royal Plating and Polishing Co., Inc., 350 F.2d 191, 196 (3d Cir 1965); Morrison Cajeteriai sv N'L.R.RB. 431 F.2d 254, 257 (8th Cir. 197()). 424 CENTRAL VIRGINIA ELECTRIC COOPERATIVE were postponed and a meeting was scheduled for June 5.32 At this meeting, Larrabee showed Hogan the study of the Stackhouse right-of-way subcontracting experience at Palmyra. Larrabee testified that Hogan "reviewed it and questioned the entire study." He further testified that Hogan particularly protested that the overhead factor applied to Respondent's own right-of-way work was in- valid. Larrabee then said that he "went back to the Co- operative and asked that a study be made on the reason that this overhead factor of 100 percent was used, be- cause, quite frankly, I had a concern myself on the point." Larrabee identified Respondent's Exhibit 5 as the analysis of the overhead factor thereafter made by the Cooperative. He subsequently conceded, however, that the analysis had not been made by June II, when he wrote his next letter to Hogan, nor did he ever furnish a copy of the analysis to Hogan. At the hearing, Larrabee completely shifted gears on the importance of the overhead factor and his feeling about it. He testimonially moved from having asked Re- spondent to look into the issue because, "quite frankly, I had a concern myself on the point" to "I didn't have any doubts about the 100 percent factor, personally, because I had discussed this on the phone with the Cooperative, and I was satisfied, but I asked them to go make another check" and "I felt totally comfortable with the subject of overhead as far as the benefit and the staffing that they had at the Cooperative, I was totally comfortable with that 100 percent factor. The Union had questioned it, and I just went back and asked the Cooperative to look further into it." Thus, although Larrabee testified that Hogan had "continually challenged the data on the survey at Palmy- ra," and despite his own "concern" about the validity of the study, he proceeded to effect the layoffs without having in hand the study of the disputed factor which, at least at one point, Hogan had been challenging and which study Larrabee had thought worth ordering even after he had assertedly been made "totally comfortable" about it by his client. The suggestion here is that Larra- bee had no sincere, open-minded interest in actually bar- gaining with Hogan about the decision. Other testimony by Larrabee also indicates that Re- spondent had made its final and irreversible decision before its May 23 announcement to the Union. Asked by Respondent's counsel when the "ultimate decision" was reached, Larrabee said: The ultimate decision was made during the end of May or right around June. End of May. I sent a letter, May-I believe it was May 23rd, I referred to. It was during the month of May that the deci- 32 Larrabee testified that the May 23 letter was sent "in advance of the June 5 meeting to-so that we could have a more meaningful discussion" of the subcontracting at that meeting. Obviously, however, and as Larra- bee later appeared to concede, the June 5 meeting had not been set as of May 23; the letter, which announced an intention to "proceed with the layoffs as outlined" unless Larrabee heard otherwise, meant that the lay- offs scheduled for "6-1-79" would necessarily have preceded June 5 Thus, the intention, assertedly held on May 23, of having "a more mean- ingful discussion" with the Union on June 5. could not in fact have exisl- ed on the earlier date. sion was made and communicated to the Union by, I believe, a May 23rd letter I sent, and then dis- cussed that with the Union in the June 5 meeting, based upon the studies that we made. While I would not want to place undue emphasis on Larrabee's choice of words, in this subtle area in which an employer may make a tentative decision but niust nonetheless remain open to a change of heart, this sort of language, particularly when coupled with the May 23 recognition of Respondent's obligation only "to bargain with you regarding the impact on employees from our decision," does strongly indicate that Respondent's mind was made up by May 23 and that it had no intention of engaging in any meaningful discussion of that decision. That was the impression left on Hogan, a good witness, from the beginning: I think it was offered to me as a take it or leave it proposal more or less and 1 offered the solution of possibly attrition which they immediately said no to. I asked if there were other jobs they could put them in. They said no. I really didn't get any re- sponse or any type of movement at all. It was just a we have to do this thing. It therefore appears that Respondent had a fixed and unyielding attitude as to the June subcontracting, and proceeded with it despite the pendency of a seemingly substantial question about the validity of the study which Larrabee had been telling Hogan about for months but which Hogan never saw until after the original date for layoff of six employees, despite Hogan's having "contin- ually challeng[ed]" the survey, and despite Hogan's obvi- ous desire, as evidenced in his mailgrams of May 2 and June 13, to use any weapon available to him to attack the decision. The evidence pertaining to the October layoff of the remaining 11 right-of-way employees fur- ther confirms that Respondent had no intention of bar- gaining openly and sincerely with the Union about the subject. In his May 23 letter, Larrabee wrote that the Union had previously been advised that Respondent had been contemplating the discontinuance of "some" of the right- of-way crews.3 3 So far as the record shows, Larrabee did not expressly broach the possibility of further layoffs until October 24.34 On that day, at a contract bargaining session, he "indicated to the Union that we were going to proceed now with the next stage." When Hogan ob- jected, Larrabee "indicated that we had to proceed based upon the further extension of our planning that it would not be to the best interests of the economic position of the Cooperative to delay any longer." 35 On the follow- 3 Hogan also testified that Larrabee's February reference as to "some" of the crews 4' Larrabee did say that he made a reference "at one of the meetings with the Union that the additional experiences we would have from June 15th until we moved to the second stage would be further evidence that we felt that was a ise decision" (whatever that may mean) Given I.ar- rabee's apparent proclivity to remember eents erroneously. this may vwell have not been said as Hogan testified that, as he recalled, he offered he same ptiles in October "as s.e offered to the prior one " 425 DIECISIONS OF NA FIONAL LABOR RELATIONS BOARD that the II1 named employees would be terminated "ef- fective immediately" without expectation of recall, "due to the business reasons we reviewed with you and in ac- cordance with the practices reviewed with you in the handling of the former terminations." Larrabee, as shown above, testified that he told Hogan on October 24 that Respondent "had to proceed" with the remaining layoffs. He further testified that he had been told by management that "experiences have shown that this is the right thing to do, go ahead with the rest of the layoffs. And I so advised the Union." In addition, Larrabee testified that he told Hogan that "it would be necessary to go ahead with the further layoff of the right-of-way crews." The peremptory tenor of the lan- guage used plainly implies that there was no room for flexibility. The entire bargaining session on October 24 lasted, according to Larrabee, only 25 minutes.3a In N.L.R.B. v. Insurance Agents' International Union, AFL-CIO, supra, 361 U.S. at 485, the Supreme Court pointed out that "the mere meeting of an employer with the representatives of his employees" is insufficient for purposes of Section 8(a)(5); "the essential thing is rather the serious intent to adjust differences and to reach an acceptable common ground....." There must be, ac- cording to the Court of Appeals for the Fifth Circuit, "an open and fair mind, and a sincere purpose to find a basis of agreement .... " Globe Cotton Mills v. N.L.R.B., 103 F.2d 91, 94 (5th Cir. 1939). 37 The evidence discussed above indicates to me that Re- spondent did not approach bargaining with the Union on the subject of subcontracting the right-of-way work with the requisite "open and fair mind."" S In this respect, the Board's recent Winn-Dixie decision, supra, is apposite. The stipulated facts showed that by letter, and then at 38 Larrabee was less than consistent at the hearing in describing the reasoning which led to the decision in October. At one point he said that there was "not enough work for the men to do" and that Respondent had "held off laying off the second group of people, to see if the business situation would turn-to make a turn, that had not happened." Later he testified that the delay was caused less by the needs of the business than by a desire to analyze the subcontracting experience: "The management wanted to proceed and see if it's possible-if we're definitely satisfied with the results we're going to get from the standpoint of coverage in that area. Also, there was a downturn There was a beginning downturn in the need to have right-of-way crews, but it had not come to fruition till the end-towards the end of the year." "a Like the Fifth Circuit, Winn-Dixie Stores, Inc. v. N.L.R.B., supra, N.L.R.B. v. Citizens Hotel Company, d/b/a Texas Hotel, 326 F.2d 501, 505 (196 4 ) (negotiations over a change in working conditions do not "necessarily have to exhaust themselves to the point of the so-called im- passe"), the Fourth Circuit has taken the position, as to day-to-day con- tracting out involving only the possible loss of overtime to unit employ- ees, that "ull-scale collective bargaining in this context seems indeed burdensome and inappropriate," District 50. United Mine Workers of America, Local 13942 [Allied Chemical Corporation] v. N.L.R.B.. 358 F.2d 234, 238 (1966). The court went on to note, however, that "[t]here is a difference between a decision to close a department with consequent lay- offs, and decisions to subcontract which may result in less serious depri- vations." Ibid. I do not believe that either court, examining the statutory obligation to "confer in good faith" would say that conferring with a closed mind would satisfy that obligation 38 note that Respondent's brief is principally devoted to the claim that Respondent "was under no obligation to bargain over the decision to subcontract, but recognized and fulfilled its obligation to bargain over the impact on employees"; only shortly does the brief further contend that "la]ssuming, arguendo, that Respondent was under an obligation to bar- gain over the decision, that obligation was fulfilled." three bargaining meetings, the employer sought to imple- ment a wage increase immediately, but the union ex- pressed opposition on each occasion. The Board not only held that the employer had failed to bargain to impasse prior to its institution of the increase following the last meeting, but it also inferred from the stipulated facts that the employer had not bargained with an open mind (243 NLRB at 975): We find here that Respondent's conduct concern- ing the wage increase falls within the above descrip- tion of ritual or pro forma bargaining. The facts show that, from the time it announced it wage pro- posal, Respondent intended to implement the in- crease regardless of whether the Union agreed or objected to it. Thus, Respondent stressed that the proposed increase would be "put into effect imme- diately." When the Union rejected the proposal and suggested bargaining first as to other related "money" matters such as premium pay and benefits, Respondent adhered to its position and at the par- ties' meeting on July 2 in effect informed the Union that the increase would be implemented with or without the Union's acquiescence. In these circum- stances, and in the absence of an impasse, Respon- dent's offer "to bargain" about the wage increase was really more in the nature of a proposal that the Union accept the increase "or else." In other words, the Union was not so much presented with an op- portunity to bargain about the wage increase as it was afforded a chance to give approval to Respon- dent's decision to grant it. Even under the most per- missive or limited view of the bargaining process, such conduct on the part of Respondent did not constitute good-faith bargaining, and we so find. A similar conclusion is warranted here. Respondent only glancingly referred to the possibility of subcontract- ing until May 23, at which time it announced what Lar- rabee referred to as the "ultimate" decision, telling the Union only that it recognized its obligation to bargain "regarding the impact on employees" resulting from "our decision." Thereafter, it met with the Union at the request of the latter. It may be argued, from the fact that Larrabee showed Hogan a copy of the study on June 5, that Respondent was allowing the Union to delve into the decisional process itself; but since Larrabee simply let slide into oblivion an arguably valid contention made by Hogan about the study, which gave even Larrabee "con- cern," and proceeded nolens volens with the layoff on June 15, it is difficult to say that Larrabee was making anything more than a gesture in exhibiting the study. The sudden onset of the previously undiscussed October layoffs, in which Larrabee declared on October 24 that "it would be necessary" and Respondent "had to pro- ceed" with the termination of the 11 men, and sent a telegram the following day laying the men off "immedi- ately," is further confirmation that, from the beginning, the Union had been on a collision course with a steam- roller. On this evidence, and under the precedents, I feel obliged to conclude that Respondent did not bargain 426 CENTRAL VIRGINIA ELECTRIC COOPERATIVE about the subcontracting with an "open and fair mind, and a sincere purpose to find a basis of agreement." Globe Cotton Mills v. N.L.R.B., supra, and I conclude that it thereby violated Section 8(a)(5). 39 CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(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. By bargaining in bad faith in collective negotiations with the Union, in and after February 1979, and by re- fusing to bargain about subcontracting decisions effected in June and October 1979, Respondent has violated Sec- tion 8(a)(5) and (1) of the Act. 4. The aforesaid unfair labor practices affect commerce within the meaning of the Act. THE REMEDY As the Board held in Fibreboard Paper Products Corpo- ration, 138 NLRB 550, 554-555 (1962), with the approval of the Supreme Court, the appropriate remedy for Re- spondent's refusal to bargain about the subcontracting of the right-of-way work is to require reinstitution of that work by Respondent. Should Respondent desire to sub- contract the work again, it may do so if, after appropri- ate bargaining in good faith, it has not been otherwise persuaded by the Union. Fibreboard, 379 U.S. at 215-216, also approves the entry of an order obliging Respondent to offer reinstatement of the terminated employees to their former positions without prejudice to their seniority or other rights and privileges, and to make them whole for any losses suffered by them, less interim earnings, computed as prescribed in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest as set forth in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), and Florida Steel Corporation, 231 NLRB 651 (1977). I shall, furthermore, recommend entry of the customary cease- and-desist order and posting of the traditional notices. The certification year, under the circumstances of this case, should run for 5 months from the time Respondent commences to bargain in good faith, since the first evi- dence of bad-faith bargaining here occurred on February 6, 1979, some 7 months after certification. Upon the above findings of fact, conclusions of law, and the entire record in the case, and pursuant to Section 10(c) of the Act, I hereby issue the following recom- mended: 3 Although the theory underlying this conclusion differs somewhat from that alleged in the complaint. it is clearly akin to the violation con- tained therein, and the issue was thoroughly litigated. I could, I suppose, simply conclude that the subcontracting swas done prior to impasse, as the complaint asserts: it seems to me that a more accurate summary of the transaction was that Respondent concluded that it did not have to, and therefore did not, bargain at all about the decision to contract out ORDER4 0 The Respondent, Central Virginia Electric Coopera- tive, Lovingston, Virginia, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain in good faith for a collective- bargaining agreement, and about changes in mandatory subjects of bargaining, with International Brotherhood of Electrical Workers, Local Union 467, as the exclusive representative of its employees in the following appropri- ate bargaining unit: 4 All employees employed by the Respondent at its Lovingston, Virginia, Appomattox, Virginia, and Palmyra, Virginia, locations, including working foremen, linemen, groundmen, servicemen, auto me- chanics, mechanics helpers, head mechanic, meter readers, meter testers, maintenance of transformers, right-of-way foremen, right-of-way axemen, stock clerk, storeroom clerk, work order clerk, safety coordinator, assistant to storeroom clerk, engineer- ing assistant, draftsmen and janitors, but excluding office clerical employees, technical employees, pro- fessional employees, guards and supervisors as de- fined in the Act. (b) In any like or related manner, interfering with, re- straining, or coercing employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action deemed neces- sary to effectuate the policies of the Act: (a) Reinstate the right-of-way work previously per- formed by its employees represented by the Union, and offer to those employees immediate and full reinstate- ment to their former positions without prejudice to their seniority or other rights and privileges, and make them whole for any loss of pay suffered by them in the manner set forth in the section above entitled "The Remedy." (b) Bargain collectively, upon request, with the Union as the exclusive bargaining representative of Respon- dent's employees in the appropriate unit with respect to wages, hours, and other terms and conditions of employ- ment. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, time- cards, personnel records and reports, and all other re- cords necessary or useful to determine the amount of backpay due and the rights of reinstatement under the terms of this Order. "o 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 findings, 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 aised for all purposes. 41 For the purpose of determining the effective period of the certifica- tion, the initial year of certification shall be deemed to run for 5 months after the date Respondent commences to bargain in good faith with the Union. 427 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (d) Post at its places of business in Virginia copies of the attached notice marked "Appendix." 4 2 Copies of said notice, on forms provided by the Regional Director for Region 5, after being signed by Respondent's representa- tive, shall be posted by Respondent immediately upon re- ceipt 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 cov- ered by any other material. (e) Notify the Regional Director for Region 5, in writ- ing, within 20 days from the date of this Order, what steps Respondent has been taken to comply herewith. 42 In the event that this Order is enforced by a Judgment of a; Unitcd States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Hoard" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Elnforcinlg an Order of the National L.ahor Relations Board APPENDIX NOTICE To EMPILOYEES POSTED BY ORDER OF THE NATIONAI LABOR RIl.ATIONS BOARD An Agency of the United States Government After a hearing at which all parties presented evidence, the National Labor Relations Board has ordered us to notify our employees that: WE WILL NOT refuse to bargain collectively in good faith with International Brotherhood of Elec- trical Workers, Local Union 467, as the exclusive representative of our employees in the appropriate unit, either in negotiating for a bargaining agree- ment or as to changes in wages, hours, and other terms and conditions of employment. WE WIll NOT in any like or related manner in- terfere with, restrain, or coerce our employees in the exercise of the rights guranteed them by Section 7 of the National Labor Relations Act, as amended. WtE wit.L reinstitute right-of-way operations pre- viously performed by our employees represented by the Union. WE wil.L bargain collectively, upon request, with the Union as the exclusive bargaining representative of our employees in the appropriate unit with re- spect to wages, hours, and other terms and condi- tions of employment. WI wil.l. offer to those employees discharged as a result of the subcontracting of our right-of-way operation immediate and full reinstatement to their former positions without prejudice to their seniority or other rights and privileges, and WE WILL make them whole for any loss of pay suffered by them as a result of our subcontracting that operation with- out appropriate bargaining. CENTRAI VIRGINIA E C IRIC COOPERA- I VE. 428