Waddell Engineering Company, Inc.

279 305 NLRB No. 29 WADDELL ENGINEERING CO. 1 The Charging Party contends that the Respondent’s exceptions and brief argue evidence not contained in the record. We find that they comply with the Board’s Rules and Regulations. We have not, however, considered arguments or statements not supported by the record. 2 The Respondent and the General Counsel have excepted to what they perceive as a finding that there was agreement between the par- ties regarding severance. Any such finding would be inconsistent with the judge’s other findings, conclusions of law, and rec- ommended Order. In the interest of clarity, we find that there was no agreement regarding severance. 1 The Respondent’s answer denied that a second unfair labor prac- tice charge, namely, that filed in Case 4–CA–19122 was filed or served. The charge itself bears an official Region 6 time stamp re- flecting that it was in fact filed on August 7, 1990. The record in- cludes a proof of service with respect to this document, and the Gen- eral Counsel’s express statement on the record to this effect was not countered by further denial or proof. Accordingly, the allegations in the complaint, in this respect, are presumptively correct. They are sustained. 2 As indicated, the Respondent is not represented by counsel. Its posthearing brief was filed by Charles W. Coward, Jr., that firm’s president and chief operating functionary. In its most salient aspects, this document seeks to justify the Respondent’s action on the basis of a philosophical discourse concerning the inherent objectives and rights of managers. Respect for, and acceptance of law as a restraint upon that authority is hardly given empirical weight in that discus- sion. There is always the temptation to assist small businessmen, particularly those troubled financially, as they sail alone into this un- charted statutory web. Here, however, the Respondent’s penchant for combining contradiction with arrogant defiance of statutory obliga- tion should be carefully considered before compromising the long- standing body of precedent defining just what constitutes ‘‘good faith.’’ Waddell Engineering Company, Inc. and Inter- national Brotherhood of Electrical Workers, Local Union No. 1841, AFL–CIO. Cases 4–CA– 18660 and 4–CA–19122 September 30, 1991 DECISION AND ORDER BY MEMBERS DEVANEY, OVIATT, AND RAUDABAUGH On February 13, 1991, Administrative Law Judge Joel A. Harmatz issued the attached decision. The Re- spondent filed exceptions and a supporting brief, and the General Counsel filed cross-exceptions. The Charg- ing Party filed a letter opposing the Respondent’s ex- ceptions and brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs1 and has decided to affirm the judge’s rulings, findings,2 and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the rec- ommended Order of the administrative law judge and orders that the Respondent, Waddell Engineering Com- pany, Inc., Riverside, New Jersey, its officers, agents, successors, and assigns, shall take the action set forth in the Order. David Faye, Esq for the General Counsel. Charles Coward Jr., of Riverside, New Jersey, for the Re- spondent. Richard C. McNeill Jr., Esq. (Sagot, Jennings & Sigmond), of Philadelphia, Pennsylvania, for the Charging Party. DECISION STATEMENT OF THE CASE JOEL A. HARMATZ, Administrative Law Judge. This case was tried in Philadelphia, Pennsylvania, on November 30, 1990, upon an initial unfair labor practice charge filed on February 14, 1990,1 and a consolidated complaint issued on September 28, 1990, alleging that the Respondent violated Section 8(a)(5) and (1) of the Act both by dealing directly with employees concerning health insurance benefits and modification of a subsisting collective-bargaining agreement through a switch, without consent of the employee represent- ative, in health insurance carriers. The complaint further al- leged that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing to bargain as to the effects of a close- down decision, and, thereafter, by refusing, in the face of continued operations, to participate in contract renewal nego- tiations. In its duly filed answer, the Respondent denied that any unfair labor practices were committed. Following close of the hearing, briefs were filed on behalf of the General Counsel and the Respondent.2 On the entire record, including my opportunity directly to observe the witnesses while testifying and their demeanor, and after considering the posthearing briefs, I make the fol- lowing FINDINGS OF FACT I. JURISDICTION The Respondent, a New Jersey corporation, is engaged in the manufacture of air handling equipment from its facility in Riverside, New Jersey. In the course of that operation, the Respondent, during the calendar year preceding issuance of the complaint, purchased and received goods valued in ex- cess of $50,000 directly from points outside the State of New Jersey. The complaint alleges, the answer admits, and I find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, and I find that International Brotherhood of Electrical Workers, Local Union No. 1841, AFL–CIO (the Union) is a labor organization within the meaning of Section 2(5) of the Act. 280 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 3 A cost/coverage comparison between Guardian and three other carriers was given to the Union at that time. (G.C. Exh. 4.) Among the differences discussed, was the fact that some unit employees had dependents in far off sections of the country, raising the problem of accessibility to a local health maintenance facility. 4 In its posthearing brief, the Respondent states that ‘‘the Union declined to discuss various options.’’ Nevertheless, the above is based upon the credited, uncontradicted testimony of George Elwell. It shows that, on request of the Respondent, it met concerning the proposed change in contract terms, listened to the Respondent’s pro- posals, and argued against them. The Union disagreed with substi- tution of carriers, but it is unfair to suggest that it refused to discuss that possibility. 5 See G.C. Exh. 5(a). Attached to this document was a news article from Nation’s Business descriptive of the emergence of steep in- creases in health insurance costs, its causes and consequences. (G.C. Exh. 5(b).) III. ALLEGED UNFAIR LABOR PRACTICES A. Preliminary Statement The complaint in this case charges the Respondent with independent 8(a)(5) violations in three distinct areas. The first, pertaining exclusively to health insurance, occurred a few months prior to expiration of a subsisting collective-bar- gaining agreement. In this respect, the complaint alleges that the Respondent unlawfully refused to bargain, initially, by dealing directly with employees concerning the substitution of health carriers, and, later, by actually changing carriers under conditions constituting a midterm modification of that contract. The balance of the allegations focus upon the period fol- lowing expiration of the contract. There is no dispute that, after expiration, renewal negotiations were aborted when the Respondent announced an intention to close down. For this reason, bargaining resumed, but the focus was a severance package, rather than a new contract. According to the pro- ponents of the complaint, these latter negotiations were bro- ken off by the Respondent under circumstances constituting an unlawful refusal to bargain. An additional 8(a)(5) and (1) allegation is founded upon the Respondent’s refusal to re- open renewal negotiations, pursuant to request of the Union made upon learning that the plant continued in operation. B. Concluding Findings 1. The Respondent’s obligation to bargain During times material to this proceeding, the Union re- mained the statutory representative of employees in the pro- duction and maintenance unit. Its standing in this respect was solemnized through a long-bargaining history, marked by successive contracts, the most recent of which expired on July 17, 1990. No challenge to the Union’s majority standing is made, and since, at the time of the hearing, the Respond- ent’s operations continued, the presumption of continuing majority prevailed, and the Respondent’s obligation to bar- gain in good faith remained an enforceable statutory concern. 2. Health insurance a. The facts The most recent collective-bargaining agreement was for an effective term of July 17, 1988 to July 17, 1990. Article 14, section 4 thereof, in material part, states: The Employer agrees to maintain in full force and ef- fect for the life of this Agreement for each employee . . . . Major Medical benefits with Guardian Life In- surance Company of America. In addition, hospitaliza- tion and medical benefits with Dental and Prescription Plans shall be provided for all employees with Guard- ian Life Insurance Company. In addition, article 1, section 1.3 states: No alteration or amendment of this Agreement shall be valid unless reduced to writing and signed by represent- atives of the parties, and approved by the International President of the Union. The Respondent, during the term of the contract, became disenchanted with the Guardian health plan, claiming that it could not afford an increase in premiums. In September 1989, union representatives met with Charles Coward, the Respondent’s president, who advised of the cost increases, expressing a desire to switch to a less expensive HMO plan. Through Business Manager George Elwell, Coward was in- formed that because of the ‘‘choice’’ factor, the benefits were dissimilar,3 and that ‘‘he just couldn’t change insurance plans that was negotiated in the contract . . . that if any changes were going to be made, that had to be voted on [b]y the membership to be approved.’’4 Thereafter, the Respondent turned its attention to employ- ees. By memorandum dated October 6, 1989, Coward in- formed employees of the Guardian premium increase, stating further that the Respondent ‘‘cannot afford to absorb this in- crease.’’ The memorandum listed a number of specified op- tions, including substitution of another carrier, or a variety of diverse coverage reductions under Guardian’s program. How- ever, continuation of the status quo was not among them. Employees were asked to put their comments concerning these and other alternatives ‘‘in writing.’’5 When the Union learned of this memorandum, it requested a meeting, which was held on October 17, 1989. Elwell stat- ed that Coward should first contact the Union before commu- nicating in this fashion with the employees. He accused Coward of negotiating with employees, explaining that ‘‘in no way can we change the insurance because the contract specifies the Guardian life insurance.’’ Coward responded that he had to do something because of the cost. Elwell again stated that you ‘‘can’t change the insurance without taking it back to the membership for a vote.’’ He insisted that the Respondent abide by the contract, observing that the Guard- ian plan could be renegotiated upon expiration in July 1990. Nevertheless, in November 1989, Coward conducted a meet- ing with all employees on this issue. The cost comparison sheet was distributed. (G.C. Exh 4.) According to Coward, he informed them that: [W]e had some significant financial issues to deal with, that I felt that there were other options in order to keep the company whole, and that I needed as much assis- tance from as many people as I could find, people as well as ideas, and that we had already done some pre- liminary investigations. This is what we had done, we would like other people’s ideas. 281 WADDELL ENGINEERING CO. 6 Initially, the Regional Director deferred consideration of the charge pending arbitration in accordance with Collyer Insulated Wire, 192 NLRB 837 (1971). Due to opposition of the parties, on May 11, 1990, the Region rescinded this procedure. (G.C. Exh. 11.) Ultimately the initial complaint issued on July 27, 1990. 7 In surveying the employees, Coward delivered the message that it could not afford the plan contracted for, and their assistance was necessary ‘‘in order to keep the company whole.’’ Coward nevertheless insists that he did not solicit employee preferences on this occasion, merely requesting review of the options listed on General Counsel’s Exhibit 4. Yet, his pre- hearing affidavit, confirmed that employees responded with a ‘‘couple’’ saying they wished to go with the HMO while Shop Steward Frank Jacobsen indicated that he was in favor of U.S. Healthcare. On December 14, 1989, Elwell was informed by Shop Steward Jacobsen that the Respondent was going to replace Guardian with an HMO, but first would hold a vote among the employees. Elwell told Jacobsen was that no vote could be held. In December 1989, the Respondent, without union consent, elected to replace Guardian with U.S. Healthcare, an HMO, effective January 1, 1990. On December 18, 1989, the Union filed a grievance on the health care change. (G.C. Exh. 6.) On January 12, 1990, a grievance meeting was held, at which the Union insisted upon reinstitution of the Guardian plan, while threatening to pursue a variety of remedies, including the filing of unfair labor practice charges. Coward replied that he had to do something and that he acted only because of the cost factor. On January 15, 1990, the Union’s attorney wrote Coward, announcing an intention to arbitrate the change. The latter re- sponded on January 19, 1990, as follows: May I share a bit of background of this problem. 1989 was a bad year for our little company. Our pro- ductivity dropped sizably and wage increases in July combined to give us some financial surprises. I was forced to be as frugal as possible. When the health in- surance increase was announced I met with the Union and the employees mentioned that we could not afford the increases and asked for suggestions. After several discussions with all involved, we settled on another car- rier with a lower rate, but similar coverage. All but one employee accepted this change. George Elwell [sic] was offered several opportunities to actually participate in these discussions and did so initially. I am willing to chat further with others but am not willing to incur any costs that I cannot pay for. I men- tioned to George that I cannot afford the cost of Arbi- tration or litigation. We have quite a few unpaid in- voices back to March of 1989 which have to be paid if we are to stay in business. [G.C. Exh. 8.] On January 15, 1990, the Union’s attorney wrote the Re- spondent reiterating its intention to arbitrate, and stating that unfair labor practice charges might also be filed. The fol- lowing suggestion was included: The filing of the above does not preclude our resolution of this problem, and in light of the financial difficulties you have outlined . . . kindly contact me as soon as possible and advise me as to whether you would be willing to open the Company’s books and records to an audit by the Union. The Union’s ability to determine the extent of your Company’s financial difficulties would be extremely helpful to the satisfactory resolu- tion of this problem. [G.C. Exh. 9.] On February 14, 1991, the Union filed refusal-to-bargain charges based upon substitution of health carriers and direct dealing with employees. (G.C. Exh. 1(a).)6 b. Direct dealing Once designated by a majority, a labor organization ac- quires exclusive status as the employee representative. This status derives from Section 9 of the Act and has been de- fined, from the earliest days of the Act, as exacting, ‘‘the negative duty to treat with no other.’’ NLRB v. Jones & Laughlin Corp., 301 U.S. 1, 44 (1937). Generally speaking, it is unlawful for an employer, to seek to revise employment terms through direct appeals to employees outside the pres- ence of the statutory bargaining representative. Whether in- tended or not, even absent union animus, such conduct tends to undermine the status of the employee representative and is inconsistent with the principles of good-faith bargaining. This case does not present the first occasion, in which an employer has sought to substitute carriers by engaging in an end run on collective bargaining. In this area, the Board, heretofore, has deemed employers to have overstepped the line and violated Section 8(a)(5) where employees were sim- ply surveyed on carrier options, and where after discussing a possible change in insurance plans with employees, the em- ployer arranged a meeting between them and an insurance representative. Kirby’s Restaurant, 295 NLRB 897 (1989); NLRB v. Wallkill Valley Hospital, 866 F.2d 632 (3d Cir. 1989). In this case, undisputed evidence shows that the Respond- ent went even farther in driving a wedge between employees and their Union. Here, not only were the employees sensibili- ties evoked by Coward’s unverified claims of inability to pay,7 but he now asserts that he exacted an accommodation from them: After several discussions with all involved, we settled on another carrier with a lower rate, but similar cov- erage. All but one employee accepted this change. Coward adds: ‘‘There have been no criticisms of my actions or the company’s actions by the employees that I know of.’’ Any defense grounded upon employee reaction fails to sur- vive the warning articulated in 1944 by the Supreme Court in Medo Photo Corp. v. NLRB, 321 U.S. 678, 684 (1944), wherein it was stated that: ‘‘it is a violation of the essential principle of collective bargaining and an infringement of the Act for the employer to disregard the bargaining representa- tive by negotiating with individual employees, whether a ma- jority or minority, with respect to wages, hours and working conditions.’’ The Respondent also contends that it was free to terminate the relationship as the Union no longer represented the em- ployees. This argument is unaccompanied by evidence of loss of majority. Instead, it is argued that the Union’s protes- 282 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 8 The Board’s decision in L.W. Le Fort Co., 290 NLRB 344 (1989), cited by the Respondent, is entirely consistent within this un- broken line of authority. No contract breach was involved there. In- stead, that case concerned an employer’s right to implement a final proposal following a genuine impasse in renewal negotiations. In fact, in that very case, the Board held that the employer violated Sec. 8(a)(5) by unilaterally changing health and welfare programs. 9 Apart from being a product of unlawful activity, employer dec- larations as to the elicited intent of employees is among the least re- liable forms of nonprobative hearsay. 10 The Union apparently attempted to avail itself of this option through its letter of February 9, 1990. (G.C. Exh. 9.) tations of the health care change was tantamount to abandon- ment of employees and signified ‘‘that the employees were not represented by the union.’’ Thus, he argues that: ‘‘The union obviously endeavored to impose its will by being sig- natory to the grievance.’’ There is no merit in this view. Op- position to the midterm modification was a rightful represen- tational prerogative, and, under no conceivable circumstance, would such action afford management an opportunity to ab- rogate its bargaining obligation. No matter how onerous the contract, the relationship’s future is not a matter of manage- ment choice, but is relegated exclusively to the judgment of employees. ‘‘To allow employers to rely on employees’ rights in refusing to bargain with the formally designated union is not conducive to industrial peace, it is inimical to it.’’ Brooks v. NLRB, 348 U.S. 96, 103 (1954). Under the statutory scheme, where unit employees in sufficient number oppose the union’s judgment, they enjoy a protected right, at an appropriate time, to take steps to formally renounce col- lective bargaining. There is no evidence, whatever, of any such movement on the part of employees in this case. In sum, the Union’s opposition to the proposed change in health carriers offered no legitimate predicate for Coward’s pleading poverty directly to the employees, and in the con- text of meetings independent of their representative, attempt- ing to secure relief from a contract term that he viewed with disfavor. Medo Photo, supra, 321 U.S. at 687. By virtue of this direct attempt to undermine the Union, the Respondent violated Section 8(a)(5) and (1) of the Act. c. The change in carriers As for the actual substitution of carriers, the Respondent defends its action as an economic decision benefiting the Company and the employees, which was implemented with employee consent. This is an insubstantial defense. The Board has stated that ‘‘Neither a claim of economic necessity nor a lack of subjective bad-faith intent, even if proven, con- stitutes an adequate defense to an allegation that an employer has violated Section 8(a)(5) of the Act by failing to abide by provisions of a collective-bargaining agreement.’’ Flood City Brass, 296 NLRB No. 28 (Aug. 22, 1989), and cases cited therein, unreported in Board volumes.8 Also irrelevant is the employer’s understanding, or knowledge, that the change re- flects the communicated will of employees. The duty to bar- gain with the exclusive agent would be illusory, indeed, if excused on the basis of concessions exacted by the employer directly from employees, or if secondary to an employer’s self-serving, subjective interpretation of what it hears from them.9 In Medo Photo Corp. v. NLRB, supra, the Supreme Court discounted the fact that a majority of employees agreed to reject unionization in the context of ‘‘direct deal- ing’’ which produced a promised wage increase. Unlike Medo Photo Corp., here there was no attempt at bribery. However, the Respondent’s none-to-subtle references to the future of the Company would naturally stir concern among employees as to whether they were deciding upon a health plan or their jobs. Yet, the choice would be made without objective means of verifying management’s representations. The statute envisions the collective-bargaining agreement as a stabilizing influence upon the basic labor-management relationship. To that end, as a general rule, election petitions will not be processed and employers are not free to question representative status during the contract’s term. As is true of any enforceable commitment, such contracts are subject to change solely upon mutual assent. Oak Cliff-Golman Baking Co., 207 NLRB 1063, 1064 (1973). Even in cases presenting a plea of extreme hardship, the Act requires that demands for modification be filtered through a process of open and frank discussion, augmented by the statutory agent’s enforceable access to information permitting scrutiny of self-serving claims of inability to pay.10 The statutory scheme assumes that, once the books are opened, good sense will prevail, and, in the final analysis, the vital interests of all will be recog- nized. Here, the Respondent arrogated to itself the role of de- termining what is best for employees, and met with them, outside the presence of their chosen representative, to achieve their endorsement of an abrogation of a contract in furtherance of management’s own financial interests. This course of conduct plainly runs afoul of the Court’s admoni- tion in Medo Photo, supra, that: ‘‘The statute was enacted in the public interest for the protection of the employees’ right to collective bargaining and it may not be ignored by the em- ployer, even though the employees consent . . . at least where the employer is in a position to secure any advantage from these practices.’’ 321 U.S. at 687. Accordingly, as the undisputed evidence establishes that the Respondent changed terms of an existing contract with- out assent of the Union, it thereby violated Section 8(a)(5) and (1) of the Act. 2. The negotiations Concerning this sector of the case, the complaint alleges that the Respondent violated Section 8(a)(5) and (1), first, by refusing to bargain over the effects of its declared intention to close, and, thereafter, when it continued to operate, by re- fusing to participate in contract renewal negotiations. As will be recalled, the most recent contract was sched- uled to expire on July 17, 1990. In that connection, the par- ties exchanged proposals on June 25. Negotiating sessions were held on July 2, 10, 16, and 23, 1990. At the July 23 meeting, the Respondent, through Coward, announced that the plant would close at the end of that month due to a lack of business. At this juncture, on request of the Union, Cow- ard agreed to negotiate concerning possible severance bene- fits. In the meantime by letter of July 25, the Respondent in- formed the Union as follows: This note will confirm our discussion on Monday in- dicating that because of economic conditions, we will cease manufacturing and discharge our workforce at the end of July or at the latest mid-August 1990. 283 WADDELL ENGINEERING CO. 11 G.C. Exh. 25. As indicated, in 1989, the Union had initiated grievance action concerning the Respondent’s change in health plans. By the above letter, Coward declared that his firm would not partici- pate in arbitration. We wish you and your group the best of luck. [G.C. Exh. 14.] In a letter to the American Arbitration Association dated Au- gust 1, the Respondent wrote: The economic laws of life have finally made their deci- sion. We will cease manufacturing products next week. We have retained only four production employees who will be discharged within the week. All equipment has been sold and a new tenant has started to move in. [Emphasis added.]11 On August 1, the parties met to negotiate a severance package. Coward stated that he had been advised by his legal counsel that he was obligated merely to pay 3-day severance pay together with one month’s insurance. The Union coun- tered with a demand for 6 month’s insurance, all accrued va- cation pay and severance pay of $200 for each year of serv- ice, with 1 weeks’ pay for those with less than 1-year serv- ice. Coward indicated he would consider this proposal. By letter of August 2, the Respondent, in material part, in- formed the Union: I believe your suggestion was wise—i.e. there are certain people who have been with us a long time and those who are recently employed. I do have deeper feelings for those who have spent the longer times with us . . . . There are certain other factors which also apply. They are: 1. The contract with the union expired on 7/7/90 [sic]. I guess the result of this is that we are now a non-union operation. 2. Formal litigation has commenced between the company and the NLRB based on a complaint filed by the union. In the absence of the union dropping the charges, one could assume that the union and the company are adversaries——a situation which is not conducive [sic] to a quick and equitable severance pay settlement. May I suggest that the company will do its best to assist each leaving employee to re-enter the work force and try to assist the employee with certain health bene- fits. We discussed these items during our meeting on 8/1/90. We will do our best to meet these needs on our own. I believe that if the union continues to be in- volved that the employees will not benefit as well as if the company is free to do the best that it can do on its own. [G.C. Exh. 15.] By letter of August 3, the Union advised the Respondent that, contrary to the Respondent’s indications, the plant con- tinued to operate, while insisting that those employed be cov- ered by a collective-bargaining agreement. A meeting was re- quested for Monday, August 6, to discuss this issue. Strike action was among the options mentioned. (G.C. Exh. 16.) On August 7, the Respondent, through Coward, replied: We have about three days of work left (certainly no more than a week), two people will be retained for gen- eral clean up. There have been no changes in wages, work hours or working conditions. I just don’t under- stand—If you feel that a strike would solve a problem, then I guess you are entitled to feel so. I just don’t un- derstand what problems have arisen. [G.C. Exh. 17.] On August 7, the Union filed additional unfair labor prac- tice charges based upon the Respondents refusal to negotiate either a new agreement or a plant closing settlement. (G.C. Exh. 1(f).) On August 8, the Union by telephone attempted to sched- ule a meeting concerning a severance package. Coward re- plied that he could not do so, as he was too busy, but that he would consider the possibility of some form of monetary compensation. By letter of August 9, the Union informed the Company as follows: This is to confirm our telephone conversation of Au- gust 8. During that conversation I told you that Waddell is still a Union Shop. Since our members are still work- ing, we want to negotiate a new contract as soon as possible. Alternatively, if you are closing the plant, we want to sit down and negotiate a settlement. Please contact me as soon as possible, so that this matter may be settled to everyone’s best interests. [G.C. Exh. 18.] As I construe the events, August 13 marked a radical shift in the Respondent’s position. On that date the Respondent wrote the Union: As we discussed on the telephone, as well as by let- ter, we have met twice and negotiated a settlement package. There is no value in any further meetings. If you wish to communicate, kindly do so through your attorney. [G.C. Exh. 19.] By letter of that same date, the Respondent wrote a Board agent, addressing the closure and severance issues as follows: 1. The company has not accepted any new orders and is finishing old work which should be finished by 8/15/90. 2. The company and the union did meet on at least two occasions negotiating times [sic] & conditions of plant closings. I accepted the suggestions made by the union which I confirmed in my letter of August 2. [G.C. Exh 20.] Still in operation, on August 20, the Respondent wrote the Union as follows: The best laid plans . . . . As you know we had sold our equipment and were to have closed operations by August 31, 1990. The reason was that our manufac- turing operation was loosing [sic] a sizeable amount of money each month. The people who contracted to purchase our equip- ment cancelled their written offer last week. The land- lord also is questioning our leaving date. 284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 12 Elwell testified that, contrary to the Respondent’s documented position, negotiations between the Company and the Union never produced agreement on any form of settlement package. It may well be the case that, from his point of view, no agreement was achieved that Coward was willing to implement. Yet, apart Elwell’s testi- mony, there was no proof, whatever, refuting the fact that as of Au- gust 29, the Respondent had, in writing, and without any mistake of fact, accepted the Union’s offer. Nevertheless, because the Union was represented by counsel, I can only assume that Elwell reached his conclusion with full knowledge of the facts and their legal impli- cations. Indeed, The General Counsel’s continued prosecution of the severance pay allegation is totally irreconcilable with the resolution of that issue with finality during the bargaining process. Accord- ingly, since the existence of a ‘‘settlement agreement’’ was far more beneficial to union interests than the terms of any remedial order herein, Elwell’s insistence as to the absence of a settlement had all the reliability of a declaration against interest, hence, it is assumed that there was more to the matter than revealed by the evidence on this record. In any event, the claim by Coward that an impasse had been reached is patently frivolous, when considered in light of the single negotiation meeting on the severance issue, and his repeated assurances that an agreement had been reached. 13 Each and every ameliorative expressions offered by Coward has been viewed with utmost suspicion, given his evasiveness and pro- pensity to manipulate facts to whatever end might be considered use- ful at the time. 14 Coward states that because the Company was not soliciting ad- ditional business, but completing existing contracts, no purpose would be served ‘‘[t]o continue bargaining over a sinking ship.’’ This was Coward’s position dating back to July 23. Yet, on Novem- ber 30, he remained unable to predict when production demands fi- nally would dry up. The uncertainty, alone, suffices to support a continuing obligation to bargain over a new contract. See Benchmark Industries, 269 NLRB 1096, 1098 (1984). In the face of past erro- neous estimates concerning closure, as well as Coward’s lack of cre- dulity, the only fair assumption is that representational interests of employees will continue into the indefinite future. 15 Facially, these findings might be taken as inconsistent. For, on the one hand, a violation is premised on the assumption that the Em- ployer is going out of business, while a second, assumes continuing operations. Here, however, the offenses emerge from an evasive pat- tern which, at different stages, made it impossible to identify just which constituted the appropriate mode of bargaining. In other words, this record does not supply an answer as to whether Coward intended to close or invoked that concept as a handy means of en- forcing his subsequent declaration on August 2 that ‘‘we are now a non-union operation.’’ (G.C. Exh. 15.) As the duty to bargain in good faith, in either context, was breached, a remedy is warranted with respect to both. Our plans are still firm, i.e., to close the plant, how- ever, I will need a month or so to plan for, and hold an auction or find another buyer for the equipment. In- quiries have been sent to prospective purchasers. We have decided to pull back some contracts already given out and work in a much scaled back manner. This will give the fellows more income than unemployment compensa tion and provide some revenue to offset our losses. This plan is based on a month to month sched- ule until the equipment is sold. [G.C. Exh. 21.] Consistent with its proposal at the negotiating meeting of August 1, and apparently in response to statements in the Re- spondent’s letters of August 13, the Union on August 20, wrote the Respondent confirming that the settlement con- sisted of: 1. Six months of hospitalization insurance for all em- ployees. 2. All accrued vacation to be paid to all employees. 3. All employees with less than one year of service to receive one week’s pay. 4. All employees with one or more years of service to receive $200.00 per year of service. [G.C. Exh. 22.] Prior to this letter, Respondent’s declarations that an ac- cord on the severance issue had been achieved constituted an unambiguous acceptance of the sole offer made by the Union. If there was any question as to the terms of that agreement, they would have been erased by the Union’s tac- tical response of August 20. Yet, instead of disputing the Union’s definition of the terms of its proposal, the Respond- ent twice thereafter clarified that this was the offer that it had accepted. First, by letter of August 22, Coward stated as fol- lows: This note is in response to yours concerning settle- ment. Negotiations were held three weeks ago and were closed upon acceptance of your offer. [G.C. Exh. 23.] Again, by letter of August 29, Coward answered an inquiry by a Board agent stating that further bargaining concerning effects was unnecessary ‘‘since we accepted the union of- fers.’’ (G.C. Exh 27.) As shall be seen, Coward seemingly would later ignore his formally stated position in this regard, by defending the ‘‘ef- fects bargaining’’ allegation on grounds that a bona fide im- passe had been achieved.12 This penchant for duplicitous posturing also became evi- dent in connection with contract renewal. Here, the Respond- ent repeatedly fended off the Union’s requests for continued discussion by expressing an intent to close. However, as of the hearing, operations continued and no definite date existed for termination. Indeed, when questioned as to his expecta- tions, Coward first replied: ‘‘We have work left for about one month, a month and a quarter,’’ but then stated that it was possible that operations might continue for 2 or 3 months. Since first declaring his intention to close on July 23, the Respondent’s entire course of conduct was indicative of bad faith and a rejection of the principles of collective bar- gaining. Through its chief operating functionary, Coward, the Respondent gave birth to a variety of mind-boggling incon- sistencies, if not outright lies,13 all thrown at the Union as a roadblock to negotiation either on the renewal issue14 or a severance package.15 The evidence, beyond peradventure, establishes that the Respondent offended the duty to bargain on both counts, and thereby violated Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent violated Section 8(a)(5) and (1) of the Act by dealing directly with employees concerning a manda- tory subject of collective-bargaining, and by modifying an existing collective-bargaining agreement by changing health 285 WADDELL ENGINEERING CO. 16 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and rec- ommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all purposes. 17 If 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 Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.’’ insurance carriers without assent of the exclusive collective- bargaining representative in the following appropriate unit: All hourly rated production, shipping, and mainte- nance employees, excluding office, sales, adminis- trative, professional, and executive employees and su- pervisors within the meaning of the Act. 4. The Respondent violated Section 8(a)(5) and (1) of the Act by, without reaching a bona fide impasse, terminating negotiations over the effects of its declared intention to close the plant, and by refusing, on request of the Union, in the face of ongoing operations, to participate in negotiations for a contract to cover employees in the aforedescribed collec- tive-bargaining unit. 5. The above unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain unfair labor practices, it is recommended that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Having found that the Respondent unlawfully modified a subsisting collective-bargaining agreement by changing health insurance programs, it shall be recommended that the Respondent make whole employees in the appropriate unit for any and all losses sustained by reason of diverse eligi- bility, coinsurance, benefits, or any and all further variations in the plans, with interest as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987). The reimbursement order shall extend to all periods, continuing until such time as the Respondent bargains to a genuine impasse upon this issue, or effectively reinstates the Guardian policy in effect prior to January 1, 1990. The General Counsel contends that the Respondent should be ordered to rescind the U.S. Healthcare plan and to immediately restore the previously existing Guardian health plan, ‘‘without any lapse in cov- erage.’’ Despite the scope of the reimbursement order, the recommended Order shall be broadened to include such pro- visions for two reasons. First, in Arno Moccasin Co., 274 NLRB 1515 (1985), such a remedial formulation was ap- proved. Second, as an HMO, the U.S. Healthcare plan im- poses limitations upon physician choice, which cannot be re- lieved by reimbursement without imposing considerable risk upon employees who select doctors or medical services unsanctioned by that plan. On these findings of fact and conclusions of law and on the entire record, I issue the following recommended16 ORDER The Respondent, Waddell Engineering Company, River- side, New Jersey, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain in good faith with the Union con- cerning the rates of pay, wages, hours, and working condi- tions of employees in the following appropriate unit: All hourly rated production, shipping, and mainte- nance employees, excluding office, sales, administra- tive, professional, and executive employees and super- visors within the meaning of the Act. (b) Refusing to bargain in good faith by dealing directly with employees concerning a mandatory subject of collective bargaining. (c) Refusing to bargain in good faith by changing health insurance carriers without assent of the Union, thereby modi- fying terms of an existing collective-bargaining agreement. (d) Refusing to bargain in good faith by refusing, upon re- quest, and without impasse, to continue negotiations over the effects of its declared intention to close the plant. (e) Refusing to bargain in good faith by refusing, on re- quest of the Union, in the face of ongoing operations, to en- gage in contract renewal negotiations on behalf of employees in the aforedescribed collective-bargaining unit. (f) In any like or related manner interfering with, coercing, or restraining employees in the exercise of their rights guar- anteed by Section 7 of the Act. 2. Take the following affirmative action necessary to ef- fectuate the policies of the Act. (a) Bargain in good faith with the Union concerning wages, hours, and terms and conditions of employment of employees in the aforedescribed collective-bargaining unit. (b) Rescind the U.S. Healthcare plan, and immediately re- store for employees in the aforesaid collective-bargaining unit, without lapse in coverage, the Guardian health plan in effect at at times prior to January 1, 1990. (c) Reimburse employees in the appropriate unit for any and all losses sustained by reason of diverse eligibility, coin- surance, benefits, or any and all further variations between the plans sponsored by U.S. Healthcare and Guardian, with interest, and as specified in the remedy section of this deci- sion. (d) Post at its facility in Riverside, New Jersey, copies of the attached notice marked ‘‘Appendix.’’17 Copies of the no- tice, on forms provided by the Regional Director for Region 4, after being signed by the Respondent’s authorized rep- resentative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in con- spicuous places including all places where notices to employ- ees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that said notice is not altered, defaced, or covered by any other material. Should the Re- spondent close its facility prior to completion of the 60-day posting period, it shall mail individual copies of the notice to each member of the collective-bargaining unit who was employed on January 1, 1990. (e) Notify the aforesaid Regional Director in writing with- in 20 days from the date of this Order what steps the Re- spondent has taken to comply. 286 DECISIONS 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 The National Labor Relations Board has found that we vio- lated the National Labor Relations Act and has ordered us to post and abide by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representatives of their own choice To act together for other mutual aid or protection To choose not to engage in any of these protected concerted activities. WE WILL NOT refuse to bargain in good faith with the International Brotherhood of Electrical Workers, Local Union No. 1841, AFL–CIO concerning the rates of pay, wages, hours, and working conditions of employees in the following unit: All hourly rated production, shipping, and mainte- nance employees, excluding office, sales, administra- tive, professional, and executive employees and super- visors within the meaning of the Act. WE WILL NOT refuse to bargain in good faith by dealing directly with employees concerning their rates of pay, wages, hours, and working conditions. WE WILL NOT refuse to bargain in good faith by declining, upon request of the Union, and without impasse to continue negotiations should we decide to close the plant. WE WILL NOT refuse to bargain in good faith by declining, on request of the Union, in the face of ongoing operations, to engage in contract renewal negotiations on behalf of em- ployees in the aforedescribed collective-bargaining unit. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL bargain in good faith with the Union concerning wages, hours, and terms and conditions of employment of employees in the aforedescribed collective-bargaining unit. WE WILL rescind the U.S. Healthcare plan, and imme- diately restore for employees in the aforesaid collective-bar- gaining unit, without lapse in coverage, the Guardian health plan which was in effect immediately prior to January 1, 1990. WE WILL reimburse employees in the appropriate unit for any and all losses sustained by reason of diverse eligibility, coinsurance, benefits, or any and all further variations be- tween the plans sponsored by U.S. Healthcare and Guardian, with interest, and as specified in the remedy section of this decision. WADDELL ENGINEERING COMPANY, INC.