Cutter Laboratories, Inc.

CUTTER LABORATORIES, INC. Cutter Laboratories, Inc. and International Long- shoremen's and Warehousemen's Union, Local 6. Case 32-CA-3483 December 2, 1982 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND ZIMMERMAN On March 26, 1982, Administrative Law Judge Roger B. Holmes issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Re- spondent filed a brief in support of the Administra- tive Law Judge's Decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. The amended complaint alleges that Respondent violated Section 8(a)(5) and (1) of the Act by refus- ing to reduce to writing and execute the current collective-bargaining agreement between Respond- ent and the Union. The Administrative Law Judge recommended dismissal of the complaint based on his conclusion that the parties had a mutual misun- derstanding with respect to one issue and that they therefore failed to reach a full agreement. We dis- agree with the Administrative Law Judge and, for the reasons set forth below, we find the alleged violation. The relevant facts are not in dispute. The parties have maintained a collective-bargaining relation- ship since the 1940's and have executed a succes- sion of collective-bargaining agreements, the most recent of which was effective from September 2, 1976, through September 1, 1979. In October 1977, Respondent instituted a health and welfare plan, re- ferred to as the Cutter Plan, for the benefit of its salaried nonunit employees. The plan gave salaried employees benefits which were in some respects superior to those benefits provided to unit employ- ees. Several months later, the Union demanded that the Cutter Plan benefits be applied to unit employ- ees. 1 After several meetings, the parties resolved the benefits issue on May 18, 1979, by executing a The Union invoked art. XIV of the 1976-79 collective-bargaining agreement which provided: "There shall be no discrimination against Union members as regards participation in any present or future Compa- ny benefits granted employees of the Company generally." 265 NLRB No. 78 letter of understanding which stated: "Effective September 1, 1979, the Company agrees to put into effect for the bargaining unit employees the same benefits granted to the salaried employees on Octo- ber 1, 1977." The letter of understanding then listed the Cutter Plan benefits in the same manner as they were listed in a letter dated July 22, 1977, sent by Respondent to its salaried employees. The letter of understanding did not, however, contain the following language from the 1977 letter: "The payment of benefits and the operation of the plans will be subject to the terms and conditions of the issuance contracts and/or Company policies gov- erning each plan." There is no evidence that the parties discussed including such language in the letter of understanding prior to its execution. Between August 16 and October 1979,2 Re- spondent and the Union met on 10 occasions to ne- gotiate a new collective-bargaining agreement. At a bargaining session conducted on August 23, the parties mutually agreed that neither party could submit new contract proposals after August 31. During these negotiations, the parties did not dis- cuss employee health benefits other than to confirm their prior agreement to integrate the Cutter Plan pursuant to the May 18 letter of understanding. The negotiations for the new collective-bargaining agreement culminated early in the morning of Oc- tober 6, when the parties averted a strike by sign- ing a settlement agreement. The handwritten settle- ment agreement listed 14 items which the parties had agreed upon to modify the previous collective- bargaining agreement and to form the new agree- ment. With regard to the inclusion of the Cutter Plan benefits, item 13 of the settlement agreement stated: "Integrate benefits letter of 5/18/79 effec- tive 9/2/79, as part of the contract." At the time the settlement agreement was reached, Respondent agreed to reduce the agreement to writing, and have galley proofs prepared for a new contract. On October 6, Respondent implemented all terms of the collective-bargaining agreement under the set- tlement agreement. Subsequent to the signing of the October 6 set- tlement agreement, the parties met five times in late 1979 and early 1980 to discuss contract-related issues. Some issues discussed were matters of sub- stance, while others involved technicalities or spec- ification of contractual language. For example, after implementing the Cutter Plan for unit em- ployees, Respondent began utilizing a new leave of absence form. The new form required employees to provide medical certification after 3 days of ab- sence rather than after 5 days of absence as pro- 2 All dates hereafter are 1979 unless otherwise indicated. 577 DECISIONS OF NATIONAL LABOR RELATIONS BOARD vided under the 1976-79 contract. The Union took the position that the 5-day requirement was proper. At an October 22 meeting, the issue was resolved in accord with the Union's position. Pursuant to the parties' agreement, Respondent prepared galley proofs of the new collective-bar- gaining agreement and sent them to the Union in February or March 1980. On March 14, 1980, the Union sent Respondent a list of "errors and dis- putes." The list included numerous spelling and other technical errors. With regard to disputes, the letter noted three items: the disability premium issue discussed below; "reprimand letters"; and the "literature helper classification." All matters on the list were subsequently resolved by the parties with the exception of the issue of whether Respondent's obligation to pay premiums for employees on dis- ability was limited to 90 days or 1 year. The parties ultimately decided to submit the issue to binding arbitration, as provided in the collective-bargaining agreement. The arbitration hearing was conducted July 28, 1980, and an award of February 2, 1981, upheld the Union's position. At the arbitration hearing, Respondent acknowledged that it had a current collective-bargaining agreement with the Union. By letter to Respondent dated April 17, 1980, the Union requested that the printed contract list certain job classifications and their corresponding wage codes. Respondent refused the request. It is undisputed that after Respondent refused the Union's initial request, the Union dropped the matter. At no time did the Union predicate its sign- ing the contract on Respondent's agreement to in- clude the classification codes in the printed agree- ment. Finally, on April 25, 1980, Respondent's director of labor relations, Paul Mahan, presented the union representative with a document which stated in pertinent part: It is understood that the Cutter Comprehen- sive Employee Protection Program of benefits, in existence on September 1, 1979 will apply to I.L.W.U. Local 6 bargaining unit employ- ees. It is further understood that if at any time in the future, limitations or qualifications to the plan as to benefits or entitlements are applied to the Cutter Comprehensive Employee Pro- tection Program, that such limitations or quali- fications will also apply to employees covered by this agreement. It is undisputed that the language of this document, referred to as the "caveat language," had not been a subject of the parties' previous negotiations, nor was it included in the settlement agreement or the galley proofs prepared by Respondent. Respondent insisted, however, and continues to insist, that the caveat language be included in the printed con- tract. It refuses to sign the contract without this language. Respondent takes the position that the caveat language is a clarification of item 13 of the settlement agreement, and that its insistence on such language is necessitated by the Union's posi- tion, apparently stated at another grievance meet- ing, that it would accept only increases, not de- creases in Cutter Plan benefits. The Administrative Law Judge found that the parties had a mutual misunderstanding about the meaning of item 13 in the settlement agreement. He further found that the parties, having failed to reach a meeting of the minds about integration of the Cutter Plan into the contract, had failed to reach a final agreement which Respondent would be required to reduce to writing and sign. We dis- agree. We reject as without merit the Administrative Law Judge's assertion that there was no meeting of the minds or that item 13 by its terms is ambiguous. By the plain meaning of item 13, which incorpo- rates by reference the equally unambiguous May 18, 1979, letter of understanding, Respondent and the Union evinced their intention to integrate the specifically described Cutter Plan benefits into the collective-bargaining agreement. 3 Although the parties did not discuss details regarding the oper- ation of the Cutter Plan, it is clear that further ne- gotiations on the issue were not contemplated by either party.4 As far as the contract itself was con- cerned, agreement had been reached and the Octo- ber 6 terms of agreement were intended by the par- ties to be final and binding. The decision to prepare the galley proofs, the implementation of all new contractual provisions, the parties' agreement to submit to arbitration an issue raised under the new collective-bargaining agreement and directly relat- ed to integration of the Cutter Plan, and Respond- ent's admission of a contract relationship at the ar- bitration hearing were all acts which belied Re- spondent's contention that a binding agreement had not been reached.5 s The cases cited by the Administrative Law Judge are factually distin- guishable. In those cases, the critical language itself was on its face am- biguous. In this case there is no ambiguity about the parties' intention to give the Cutter Plan benefits to unit employees, nor is the language uti- lized, i.e., "put into effect," ambiguous. 4 We note that if Respondent failed to negotiate to include the caveat language because of its lack of attention or carelessness, it would never- theless be held to have assented to the contract as then wntten due to the "fault" of its negotiators. See Oil, Chemical and Atomic Workers Interna- tional Union and its Local 7-507 (Capital Packaging Company), 212 NLRB 98 (1974). 5 See, e.g., 7brrington Construcrion Company, 235 NLRB 1540, 1545 (1978). 578 CUTTER LABORATORIES, INC. We also reject Respondent's contention that the Union's April 17, 1980, request to include the job classification codes in the written agreement ex- cused Respondent's subsequent insistence on the caveat language. Unlike Respondent, the Union dropped its request, and did not thereafter refuse to sign the agreement. As a matter of law, neither Re- spondent nor the Union was privileged to insist on its respective proposal. Midvalley Steel Fabricators Inc., 243 NLRB 516 (1975). While parties may modify a collective-bargaining agreement by mutual consent, one party may not condition sign- ing the contract on the modification. Here, Re- spondent belatedly introduced the caveat language which clearly modified item 13 by adding to the terms of the letter of understanding and which cannot be said to reflect the parties' original agree- ment. Respondent then unlawfully made the inclu- sion of the caveat language the sine qua non to its signing the contract. We need not decide here whether the Union or Respondent is correct in its interpretation of whether Respondent may decrease Cutter Plan em- ployee benefits under the October 1979 contract, since there is no indication that it has attempted to do so. Rather, we specifically hold that an agree- ment was reached which integrated the Cutter Plan benefits described in the letter of understanding into the parties' collective-bargaining agreement, and that that agreement did not include the express caveat language. Accordingly, we find that by re- fusing to reduce to writing and execute the collec- tive-bargaining agreement reached by the parties on October 6, 1979, Respondent has violated Sec- tion 8(aX5) and (1) of the Act. REMEDY Having found that Respondent has engaged in an unfair labor practice within the meaning of Section 8(a)(5) and (1) of the Act, we shall order Respond- ent to cease and desist therefrom and to take ap- propriate remedial action to effectuate the policies of the Act. Respondent will be directed to reduce to writing and execute the collective-bargaining agreement, upon the Union's request, and to bar- gain with the Union as the exclusive representative of the employees in the unit described below. While we are cognizant of the fact that the com- plaint does not allege that any employees have suf- fered financial losses as a result of Respondent's un- lawful refusal to reduce to writing and sign the col- lective-bargaining agreement reached October 6, 1979, in order to assure that the policies of the Act are effectuated we shall direct Respondent to give retroactive effect to the contract to the extent it has failed to do so, and to make whole any em- ployees who may have sustained monetary losses, with backpay to be computed in the manner set forth in Ogle Protection Service, Inc., 183 NLRB 682 (1970), with interest thereon as set forth in Florida Steel Corporation, 231 NLRB 651 (1977).6 AMENDED CONCLUSIONS OF LAW Insert the following as new Conclusions of Law 3 and 4: "3. By failing and refusing to reduce to writing and execute the collective-bargaining agreement between the Union and Respondent, as reached and agreed upon by the parties on October 6, 1979, Respondent has engaged in and is engaging in an unfair labor practice within the meaning of Section 8(aX5) and (1) of the Act. "4. The aforesaid unfair labor practice affects 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, Cutter Laboratories, Inc., Berkeley, California, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain with the Union by failing and refusing to reduce to writing and sign a collec- tive-bargaining agreement reached by the parties on October 6, 1979. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them under Section 7 of the Act. 2. Take the following affirmative action: (a) Upon request of the Union, reduce to writing, sign, and give retroactive effect to the collective- bargaining agreement reached by the parties on October 6, 1979, and make whole any employees covered by the contract for any monetary losses they may have suffered as a result of Respondent's refusal to reduce to writing and sign the contract in the manner set forth in the remedy section of this Decision and Order. (b) Upon request, bargain with the Union as the exclusive representative of all the employees in the following units: All employees set forth in Appendix B of the collective-bargaining agreement between Cutter Laboratories, Inc., and International Longshoremen's and Warehousemen's Union, See, generally, Isis Plumbing & Heating Ca, 138 NLRB 716 (1962). 579 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Local 6, effective by its terms for the period September 2, 1976, through September 1, 1979. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ing, all payroll records, social security payment records and reports, and all other records neces- sary to analyze the amount of backpay, if any, due under this Order. (d) Post at its Berkeley, California, place of busi- ness copies of the attached notice marked "Appen- dix." 7 Copies of said notice, on forms provided by the Regional Director for Region 32, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by them for 60 consecu- tive days thereafter, in conspicuous places, includ- ing all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by Respondent to ensure that said notices are not al- tered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 32, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 7 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 the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain with Inter- national Longshoremen's and Warehousemen's Union, Local 6, by failing and refusing, upon request, to reduce to writing and to sign a col- lective-bargaining agreement. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employ- ees ifi the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL, upon request of the Union, reduce to writing, execute, and give retroac- tive effect to the collective-bargaining agree- ment reached October 6, 1979, and WE WILL compensate any employees covered by the contract for any monetary losses they may have sustained as a result of our refusal to reduce to writing and sign the contract. WE WILL, upon request of the Union, bar- gain with the Union as the exclusive repre- sentative of the employees in the following unit: All employees set forth in Appendix B of the collective-bargaining agreement between Cutter Laboratories, Inc., and International Longshoremen's and Warehousemen's Union, Local 6, effective by its terms for the period September 2, 1976, through Septem- ber 1, 1979. CUTTER LABORATORIES, INC. DECISION ROGER B. HOLMES, Administrative Law Judge: Based upon an unfair labor practice charge filed on March 16, 1981, by International Longshoremen's and Warehouse- men's Union, Local 6, the General Counsel of the Na- tional Labor Relations Board issued a complaint on April 30, 1981, alleging violations of Section 8(aXl) and (5) of the Act by Cutter Laboratories, Inc. The General Coun- sel's complaint was amended at the hearing. (See G.C. Exhs. 14 and 15.) The hearing was held on November 9, 1981, at Oak- land, California. The time for the filing of post-trial briefs was extended to January 13, 1982. The General Counsel's motion to correct the transcript, which was filed with his post-trial brief, and which has not been op- posed, is hereby granted so that the record will more ac- curately reflect what was stated at the hearing. FINDINGS OF FACT I. JURISDICTION AND LABOR ORGANIZATION The Board's jurisdiction is not in issue in this proceed- ing. The Respondent is engaged in the manufacture of pharmaceutical supplies at its facility located in Berkeley, California. The Respondent's business meets the Board's direct outflow jurisdictional standard. The status of the Charging Party as being a labor or- ganization within the meaning of the Act also is not in dispute. Such status was admitted in the pleadings. II. THE WITNESSES AND CREDIBILITY RESOLUTIONS Two witnesses were called to testify at the hearing in this proceeding. They are James W. Ryder, who is a business agent of the Union, and Paul Mahan, who is the director of labor relations for the Respondent. Both of the witnesses demonstrated that they had extensive knowledge of the events which gave rise to the issues in- volved in this proceeding. Understandably, they viewed the events from different perspectives and reached differ- ent conclusions. Nevertheless, most of the pertinent facts are not in dispute. In making the findings of fact to be set forth herein, I have relied upon portions of the testi- mony from each witness. In addition, I have relied upon the documentary evidence introduced by the parties at the hearing and various stipulations which the parties agreed upon. 580 CUTTER LABORATORIES, INC. A. The Events Before October 6, 1979 Among the facts which are not in dispute in this pro- ceeding are those which are set forth in paragraphs 6 through 9 of the General Counsel's complaint. (See G.C. Exhs. I(c) and (e).) Those admitted allegations are as fol- lows: 6. The employees of Respondent set forth in Ap- pendix B of the collective bargaining agreement de- scribed in paragraph 7, herein called the Unit, con- stitute a unit appropriate for the purposes of collec- tive bargaining within the meaning of Section 9(b) of the Act. 7. Since on or about the late 1940's, and at all times material herein, the Union has been the designated exclusive collective bargaining representative of the employees in the Unit, and since said date the Union has been recognized as such representative by Respondent. Such recognition has been em- bodied in successive collective bargaining agree- ments, the most recent of which was effective by its terms for the period September 2, 1976 to Septem- ber 1, 1979. 8. At all times since the late 1940's, the Union, by virtue of Section 9(a) of the Act, has been, and is, the exclusive representative of the employees in the Unit, for the purpose of collective bargaining with respect to rates of pay, wages, hours of employ- ment, and other terms and conditions of employ- ment. 9. On or about August 2, 1979, Respondent, by letter, agreed to meet with the Union to bargain collectively with it as the exclusive collective bar- gaining representative of said employees in the Unit with respect to their rates of pay, wages, hours of employment, and other terms and conditions of em- ployment. Introduced into evidence as General Counsel's Exhibit 2 was a copy of the collective-bargaining agreement be- tween the Union and the Respondent, which is referred to in the General Counsel's complaint paragraphs 6 and 7 quoted above. General Counsel's Exhibit 5 is a copy of a letter dated July 22, 1977, from the Respondent's president to the sal- aried employees of the Respondent at its Berkeley and Emeryville locations. The letter describes "a program of major improvements in many of our employee benefits." In October 1977 the new benefit plan went into effect for the salaried employees of the Respondent. Introduced into evidence as General Counsel's Exhibit 3 was a copy of a booklet entitled, "Cutter's Comprehensive Employee Protection Program." On the back cover of the booklet, there is a "Statement of Your Rights Under ERISA," and also the following statement: "This booklet is intend- ed to outline the principal features of the Cutter Com- prehensive Employee Protection Program. The state- ments in this summary are subject to the terms of the contracts between Cutter and the insurance companies involved." The names of the two insurance companies appear after that statement on the back cover. About 6 or 8 months after the new benefit plan went into effect for the salaried employees of the Respondent, the union business agent at that time asserted to Mahan that the Union felt that article XIV of the collective-bar- gaining agreement between the parties entitled the bar- gaining unit employees to participate in the new benefit plan. Article XIV of the collective-bargaining agreement stated: "There shall be no discrimination against Union members as regards participation in any present or future Company benefits granted employees of the Company generally." (See G.C. Exh. 2, p. 25.) Initially, Mahan did not agree with the Union's view, but the Company and the Union held several meetings wherein that matter was discussed. The result of those meetings was a "letter of understanding" between the parties. It is dated May 18, 1979. A copy of that document and an addendum thereto was introduced into evidence as General Counsel's Ex- hibit 4. Among other things, the "letter of understand- ing" between the Respondent and the Union states: "Ef- fective September 1, 1979, the Company agrees to put into effect for the bargaining unit employees the same benefits granted to the salaried employees on October 1, 1977." With regard to his view of that "letter of under- standing," Mahan said at the hearing "I was intending to give them the Cutter plan and all its aspects." Prior to October 6, 1979, representatives of the Re- spondent and representatives of the Union met for the purpose of negotiating a new collective-bargaining agree- ment on August 16, 23, 30, and 31; September 4, 11, 13, and 14; and October 2 and 5, 1979. (See G.C. Exh. 14.) At the first negotiating session for a new contract in 1979, both sides exchanged contract proposals. During the second negotiating session, the parties agreed that there would be a cutoff date for submitting any new con- tract proposals. That cutoff date was the fourth negotiat- ing session, which was held on August 31, 1979. Copies of General Counsel's Exhibit 3, which has been de- scribed above, were distributed to all of the Company's employees and also copies were given to the union rep- resentatives between July and September 1979. The Union was not shown copies of the contracts between the Respondent and the insurance companies. According to Mahan, the Union did not make a request to see those particular documents. B. The Events on October 6, 1979 At the hearing, the parties entered into the following stipulation, which is reflected in General Counsel's Ex- hibit 13: On various dates between August 16, 1979 and October 6, 1979, Cutter Laboratories and Interna- tional Longshoremen's and Warehousemen's Union, Local 6, met for the purpose of negotiating a new 581 DECISIONS OF NATIONAL LABOR RELATIONS BOARD collective bargaining agreement covering the em- ployees in the Unit described in paragraph 6 of the Complaint. On October 6, 1979, after a negotiating session in the offices of the Federal Mediation and Concilia- tion Service, Cutter Laboratories and ILWU, Local 6, executed a Settlement Agreement [G.C. Exh. 6] embodying the terms that the parties had agreed upon to modify the 1976 to 1979 collective bargain- ing agreement and form a new collective bargaining agreement. Cutter Laboratories agreed to reduce the agree- ment to writing and have galley proofs prepared for a new contract. Introduced into evidence as General Counsel's Exhibit 6 was a copy of a document which is entitled "Settle- ment Agreement." It is dated October 6, 1979, and it is signed on behalf of both the Respondent and the Union. Prior to that agreement being reached by the parties, a strike of the Respondent's unit employees had been au- thorized, and the Respondent had been put on notice of a strike deadline of 8 a.m. on October 6, 1979. However, there was no strike by the unit employees because of the agreement being reached that day. The "settlement agreement" between the parties is handwritten, and it covers two pages. Among the items reflected in that agreement is item 13 which states: "Inte- grate benefits letter of 5/18/79 effective 9/2/79, as part of the contract." As described in the previous section of this Decision, the benefits letter referred to above is the one which was introduced into evidence at the hearing as General Counsel's Exhibit 4. With regard to the "settlement agreement" negotiated between the parties, Mahan testified at the hearing: "It represents the culmination of a little over a month's bar- gaining. The agreement was reached at the end of the session at the Federal Mediation and Conciliation Serv- ice that was mentioned, where all of the 14 points listed here were the points of agreement and were to be the basis of the new contract between Cutter Laboratories and ILWU Local 6, and were to be incorporated into the body of the old contract, the previous existing con- tract." C. The Events After October 6, 1979 Subsequent to the signing of the "settlement agree- ment" described in the previous section of this Decision, the parties met on October 22, 1979; November 29, 1979; January 18, 1980; March 7, 1980, and April 16, 1980, "for the purpose of negotiating a collective bargaining agreement covering the employees in the unit." (See General Counsel's amendment to complaint, which was received into evidence as G.C. Exh. 14 and which was admitted to be true.) General Counsel's Exhibit 7 is a copy of a letter dated November 2, 1979, from the Union to the Respondent regarding "some problems" which pertained to the par- ties' "settlement agreement." After October 6, 1979, Ryder said there were several indications that there were problems concerning the im- plementation of the "settlement agreement." Several dis- cussions took place between Ryder and Dave Ertmer, the Respondent's personnel manager, "about the issue of the leave of absence forms in particular." According to notes made by Ryder, one such meeting took place on October 22, 1979. The plant nurse, Virginia Baldwin, was also present. General Counsel's Exhibit 8 is a copy of a "Request for Leave of Absence" form, which Ryder said had not been used by Respondent for unit employ- ees prior to October 6, 1979, although that form had been used for salaried employees. According to Ryder, two questions were raised at that meeting. One question pertained to whether a medical certification was required after 3 days or after 5 days of absence. That question was resolved in agreement with the Union's position that no medical certification was required for the first 5 days of an absence. Another question pertained to section 5 on General Counsel's Exhibit 8. The parties stipulated: "There was a dispute between the parties which existed after October 6, 1979. The dispute concerned the period of time during which the Company would be obligated to continue to provide health and welfare and pay premiums therefor during a period of disability. The union said that period should be 12 months. The employer said that period should be 3 months. It went to arbitration by agreement of the parties and the arbitrator sided with the Union and said it should be 12 months." (See G.C. Exh. 17, which is a copy of a letter dated March 25, 1980, from the Union to the Respondent, wherein the Union requested arbitration of the issue. See further G.C. Exh. 18, which is a copy of a letter dated April 21, 1980, from the Union to the Respondent, wherein the Union also requested ar- bitration of the issue.) Introduced into evidence as Gen- eral Counsel's Exhibit 19 was a copy of the transcript of the proceedings held on July 28, 1980, before Arbitrator Adolph M. Koven. Introduced into evidence as General Counsel's Exhibit 20 was a copy of Arbitrator Koven's Opinion and Award, which was issued on February 2, 1981. It was stipulated at the hearing that the Union had made a proper demand on the Respondent to execute a collective-bargaining agreement on terms which the Union thought were appropriate and with which the Re- spondent disagreed. (See G.C. Exh. 11, which is a copy of a letter dated February 20, 1981, from the Union to the Respondent. See further G.C. Exh. 12, which is a copy of a letter dated February 25, 1981, from the Union to the Respondent.) Respondent's Exhibit I is a copy of a letter dated March 18, 1980, from the Union to the Respondent. In pertinent part it states: Enclosed is a copy of the mistakes found in the contract galley, which is referred to Errors and Disputes. If we come across any more mistakes, I will contact you. Those items in dispute, and especially short-term disability, will have to be agreed upon before the language can be finalized. 582 CUTTER LABORATORIES, INC. General Counsel's Exhibit 9 is a copy of a document submitted by the Union to the Respondent and which is entitled, "Errors and Disputes in the Galley 3-14-80." Introduced into evidence as General Counsel's Exhibit 16 was a copy of a letter dated April 17, 1980, from the Union to the Respondent wherein the Union requested that certain additional job classifications be made a part of the contract. Ryder explained at the hearing that those particular job classifications had never been includ- ed in the past contracts between the parties, although, in his view, the matter had been resolved in a 1971 arbitra- tion proceeding. He acknowledged at the hearing that the subject matter of General Counsel's Exhibit 16 had not been raised during the 1979 contract negotiations. The Respondent did not agree to the Union's request set forth in General Counsel's Exhibit 16. According to Ryder, the Union ceased to press the issue, but he stated at the hearing that the Union had never advised the Re- spondent that the Union had dropped the matter raised in General Counsel's Exhibit 16. Ryder said, "It's a desire, but a dead issue in terms of this contract." On April 25, 1980, during a grievance meeting on an- other matter, the Respondent submitted a document to the Union which pertained to item 13 in the October 6, 1979, "settlement agreement." A copy of that document was introduced into evidence at the hearing as General Counsel's Exhibit 10. In pertinent part, it states: It is understood that the Cutter Comprehensive Employee Protection Program of benefits, in exist- ence on September 1, 1979 will apply to I.L.W.U. Local 6 bargaining unit employees. It is further understood that if at any time in the future, limitations or qualifications to the plan as to benefits or entitlements are applied to the Cutter Comprehensive Employee Protection Program, that such limitations or qualifications will also apply to employees covered by this agreement. At the hearing, Mahan gave his opinion that it had been "patently obvious" that the unit employees would participate in the benefits granted to the Company's em- ployees generally, and if those benefits were changed, then the unit employees, like other company employees, would receive either increased benefits or decreased benefits. However, Mahan said that subsequently it was revealed to him that the Union's view was that the unit employees would only receive increased benefits if bene- fits were changed by the Company, and not any reduc- tion in benefits. Mahan testified, with regard to General Counsel's Exhibit 10, "The purpose of it was to clarify the fact that the changes in those benefits could be either improvements or downward changes, after I was in- formed by the Union in a grievance meeting that they would accept only changes for the better and no possible changes on the down side." Mahan also testified with regard to General Counsel's Exhibit 10, which he had drafted: I consider it clarification of the contract provi- sion after the Union informed us in a grievance meeting that they didn't intend to abide by the terms of the Cutter comprehensive protection pro- gram, that they were going to accept only changes for the better and none for the worse. It clarifies that the Union participates in the Company benefit program which is provided for all employees of the Company generally, and which may be amended by the Company as it sees fit, either to improve the benefits or to decrease the benefits. * * S * . It is intended to clarify item 13 on the settlement agreement when the contract was signed-the cur- rent contract which is in effect now was signed, which said that we will integrate the benefits pro- gram with the present agreement. According to Mahan, there had been no discussion of the Union's position regarding what became item 13 during the 1979 contract negotiations. He said the issue had not been raised by either party during the contract negotiations, and that there had been no discussion of the benefits plan other than simply adopting the May 19, 1979, "letter of understanding." Mahan said at the hear- ing, "That's all there was. That's what we agreed to do, put that May 18, '79 package into the contract." Ryder said at the hearing with regard to the Union's response to the Respondent's document which became General Counsel's Exhibit 10: "Rather rapid and sharp. This had absolutely nothing to do with the negotiations. It's six months past the time of the contract. This is properly before us in 1982 at the time of new negotia- tions. It's completely unacceptable." Ryder summarized the Union's position: "That we would sign the contract if the corrections that had already been agreed to and the disputes that had already been settled, in terms of our clarifying the various issues, were put in galley form and that General Counsel's 10 was not part of that." During the course of the hearing, the parties stipulated that the Respondent and the Union had met and resolved all of the problems concerning the implementation and interpretation of a new collective-bargaining agreement effective during the period of 1979-82 with the proviso on that stipulation that the parties reserved the right to litigate three issues: (1) the clause set forth in General Counsel's Exhibit 10, which has been described above; (2) the job classifications referred to in General Counsel's Exhibit 16, which has been described previously, and (3) the matter regarding payment of premiums which issue went to arbitration and which has been described previ- ously. In Mahan's view, the Respondent and the union do have a signed contract, but "We just haven't printed it." The past practice in five contract negotiations has been for the parties to sign settlement agreements. Mahan said the printed booklets had not been signed by the parties in the past. Mahan testified: "My position is that the con- tract is already signed and it is in effect. I will print- which I don't think is the same as signing at all. I will 583 DECISIONS OF NATIONAL LABOR RELATIONS BOARD print and issue the little yellow booklet when that caveat language is in the benefits section because the Union told me that it had no intention of abiding by the intent and the content of that booklet." (G.C. Exh. 3.) The Respondent has made one change in the health and welfare benefits plan since October 6, 1979, and that was to increase the major medical benefit maximum. D. Conclusions In Vallejo Retail Trade Bureau and its Employer-Mem- bers, 243 NLRB 762 (1979), Administrative Law Judge Timothy D. Nelson, whose decision was adopted by the Board, held at page 767: Preliminarily, it is concluded that, subjectively, the parties were on entirely different wavelengths in all of the discussions leading to and including the signing of the May 24 letter of understanding. Thus, to the extent that "subjective" intentions are ever divinable ex post facto, the record as a whole shows that each party approached the 1978 negotiations with a wholly different notion of the meaning of the expression "across-the-board." It is therefore tempting to rely uncritically on the hoary maxim of the law of contracts that, absent a "meeting of the minds," there is no mutually bind- ing agreement. The temptation is avoided, however, because the expression, "meeting of the minds" in contract law does not literally require that both par- ties have identical subjective understandings on the meaning of material terms in the contract. Rather, subjective understanding (or misunderstandings) as to the meaning of terms which have been assented to are irrelevant, provided that the terms them- selves are unambiguous "judged by a resonable standard." Pittsburgh-Des Moines Steel Company, 202 NLRB 880, 888 (1973), and authorities cited herein. See also, e.g., Rockwell Printing and Publishing Co., Inc. d/b/a Monument Printing Co., 231 NLRB 1215, 1220 (1977), and authorities cited therein. Here, all parties point to the same instrument by which formal "assent" was manifested, i.e., the May 24 letter of understanding; and yet, each party urges, as previously described, that the same terms have different meanings. In the present case, the evidence reveals that the par- ties have two entirely different understandings of what they thought that they agreed to in item 13 of their Oc- tober 6, 1979, "settlement agreement." Perhaps due to the lack of any discussion during the 1979 contract nego- tiations regarding that particular subject matter which became item 13, the parties' understandings did not sur- face until an April 1980 grievance meeting. At that point, it finally became known that each party thought they had agreed to something different from that which the other party said had been agreed to. The wording of item 13 of General Counsel's Exhibit 9 requires reference back to the earlier "letter of under- standing" dated May 18, 1979, which is General Coun- sel's Exhibit 4. However, the language of neither docu- ment literally precludes the contrary viewpoints subse- quently advocated by the union or by the Respondent. Of course, the Respondent also points to the statement on the back cover of the Respondent's booklet, which is General Counsel's Exhibit 3. However, that statement also does not preclude the Union's view that it had not agreed to give unilateral control to the Respondent to decrease the benefits for unit employees. On the other hand, the Respondent apparently believed that the state- ment on the back cover was a clear indication that the Respondent could decide to increase or to decrease bene- fits for all of its employees by altering the Respondent's contracts with the insurance companies. I conclude that there was a mutual misunderstanding by both parties of what they thought they had agreed to in item 13 of General Counsel's Exhibit 9. Particularly in the absence of any discussion during the 1979 contract negotiations of the subject matter of what became item 13, 1 conclude that there is an ambiguity in item 13 as to what the parties had really agreed to, and that there was truly no "meeting of the minds" with respect to item 13. The language of the item itself and the documents re- ferred to above are not so clear as to rule out the differ- ing understandings urged by each party. Finally, I con- clude that the mutual misunderstandings by the parties with respect to item 13 shows that the parties did not reach full agreement on all of the terms of a new collec- tive-bargaining agreement. See Butchers' Union Local 120, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO (United Employers; Inc.), 154 NLRB 16, 26 (1965): "Misunderstanding exists where the words or other acts of the parties indicate assent, but one or both of the parties in fact intend something different from what the words or acts express." Restatement, Con- tracts § 501. Administrative Law Judge Maurice M. Miller, whose decision was adopted by the Board, held at pages 26-27 of that decision: "When such misunder- standings are due to the fault of one party, and the other party understands the transaction according to the natu- ral meaning of the words or other acts, both parties are bound by that natural meaning. When, however, misun- derstandings may be traced to ambiguity for which nei- ther party is to blame, or for which both parties are equal- ly to blame, and the parties differ in their understanding, their seeming agreement will create no contract." In this connection, see also Oil, Chemical and Atomic Workers International Union and its Local 7-507 (Capital Packag- ing Company), 212 NLRB 98, 107-108 (1974). See further B. F. Goodrich Chemical Company, a Division of the B. F. Goodrich Company, 232 NLRB 399 (1977), where Ad- ministrative Law Judge Ralph Winkler, whose decision was adopted by the Board, held at 400: "What does emerge in my opinion is a mutual misunderstanding con- cerning inclusion of the qualifying language at issue here, for which misunderstanding neither party is at fault." See also Sunshine Hotels Limited d/b/a Outrigger-Maui, 226 NLRB 31 (1976); Construction and General Laborers No. 304, Laborers International Union of North America, AFL-CIO, 228 NLRB 247 (1977). In view of the foregoing, I conclude that a preponder- ance of the evidence does not establish that the Respond- 584 CUTTER LABORATORIES, INC. ent has violated Section 8(aX1) and (5) of the Act as al- leged in the General Counsel's complaint, as amended. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce and in an industry affecting commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. The Respondent has not engaged in the unfair labor practice alleged in the General Counsel's complaint in this proceeding for the reasons which have been set forth above. [Recommended Order omitted from publication.] 585