The Rath Packing Co.

RATH PACKING CO The Rath Packing Company and United Food and Commercial Workers International Union, AFL-CIO, CLC. Case 18-CA-8132 26 April 1985 DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 30 August 1984 Administrative Law Judge Walter J. Alprin issued the attached decision. The General Counsel and the Charging Party filed ex- ceptions and supporting briefs to which the Re- spondent filed ari answering brief. The Board has considered the decision and the record in light of the exceptions' and briefs and 'has decided to affirm the judge's rulings, findings,? and conclusions only to the extent consistent with this Decision and Order. The judge dismissed the complaint which alleges that the Respondent violated Section 8(a)(5) and (1) of the Act in February 1983 by (a) dealing di- rectly with its employees and (b) negotiating a sep- arate agreement with a local union providing for a decrease in employee wage rates, thereby unilater- ally modifying the terms of an existing collective- bargaining agreement. The General Counsel and the Charging Party have excepted to this dismissal, contending that a telegram dated 21 February 1983 and sent from the International Union to the Re- spondent placed- it on notice that the local union's authority to negotiate wage deferrals had been re- voked. They also argue, in response to the Re- spondent's affirmative defense, that a prior agree- ment between the Respondent and the seven locals which represents its employees, herein called the Rath Chain, which provided for certain wage de- ferrals, did not authorize the separate agreementre- ferred to in the complaint. We find merit to these exceptions. . The facts which are fully-set forth in the judge's decision are summarized as-follows: The Respond- ent and the International Union (or its predeces- sors)3 have been parties Jo a series of Master i In asserting jurisdiction, the judge found that the United Food and Commercial Workers International Union, AFL-CIO, CLC, herein called the International Union, is recognized by the Respondent as the exclusive bargaining agent of its employees No party claims that the International Union is not the exclusive representative Accordingly, we adopt this finding 2 The Charging Party has excepted to some of the judge's credibility findings The Board's established policy is not to overrule an adm inistra- tive law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall. Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for re- versing the findings 3 The Respondent's employees were originally represented by the United Packinghouse Workers of America , AFL-CIO, which, following 255 Agreements for approximately 40 years, the most recent of which, effective from 1 September 1979 to 31 August 1982, was extended to 31 August 19.85. This agreement covered seven of the Re- spondent's facilities: Waterloo and Columbus Junc- tion, Iowa; Dallas, Houston, and San Antonio, Texas; Morrow, Georgia; and Charlotte, North Carolina. The actions of the Respondent and Local 46 of the International, which represents unit em- ployees at the Respondent's Waterloo, Iowa facili- ty, are the subject of this proceeding. In 1979, the Respondent was experiencing finan- cial difficulties. With the knowledge and approval of the International Union, the Respondent and Local 46 negotiated two agreements, dated 13 April and 2 June 1979, which provided for various wage deferrals for Waterloo employees. Subse- quently, the collective-bargaining negotiations of the International Union and the Respondent in early August-September 1982- resulted in the execu- tion of two written agreements, both of which were signed on 2 September 1982. The "Memoran- dum of Agreement," which was executed by the International Union and the Respondent and ex- tended the 1979-1982 Master Agreement until 31 August 1.985, continued, with modification, the de- ferral agreements signed by the Respondent and Local 46 in 1979. Additionally, a supplemental agreement,4 to which the Respondent and the Rath Chain were parties, provided, in essence, that $20 of each employee's wage would be deferred and a 1968 merger, became the Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO Following a 1979 merger, the present Union, the United Food and Commercial Workers International 4 The supplemental agreement provides, in pertinent part that during the Rather Master Agreement a total of $20 in wages during each week shall be deferred and paid into the segregated fund set forth in paragraph 4 herein below 4 The parties have, in paragraph 3 above, agreed .upon the pay- ment of certain employees benefits into a segregated fund Such ben- efit payments, and any others which the parties may agree to add to this Agreement , will continue to be paid into the segregated fund in accordance with the terms of this Agreement An amount equal to a total of $4 00 in wages during each week shall be contributed to the ESOP (Employee Stock Operation Plan), for its first year funding, and the amounts will be actuarily determined thereafter on at least an annual basis The remaining amounts contributed to this segregat- ed fund may, as agreed by the parties , be utilized to purchase and install capital improvements and/or to fund advertising, sales ex- pense, and sales promotion expense The parties will meet on a peri- odic basis to review proposed expenditures which will be handled by a combination of written correspondence and telephone conference calls The Company will use its best efforts to take into account, in their proposed expenditures, the amounts contributed to the segre- gated fund by each participating plant The parties agree to utilize the segregated fund to the benefit of all of the employees of all of the plants The parties may agree upon other matters for which this money may be utilized The employee benefit payments which have been paid into the segregated fund shall remain as deferred and con- tingent obligations to be paid to the employees out of the before-tax profits of the Company as set forth below 275 NLRB No. 42 256 DECISIONS OF NATIONAL LABOR RELATIONS BOARD apportioned between the employee stock option plan and a capital expenditure fund.5 - On 13 February 1983 the Respondent informed Local 46 that additional wage deferrals were neces- sary. On 16 February Local 46 presented a propos- al to the Respondent's directors calling for, inter alia, a $2-per-hour wage deferral. On 17 February the Respondent's directors voted to seek a $2.50 per hour wage deferral to be paid into a ",`profit sharing fund" and to be effective for a period of 10 months. By letters dated 18 February 1983, the Re- spondent requested that the International Union and Local 46 agree to the proposed deferral. By telegrams dated 21 February 1983, the Internation- al Union advised the Respondent and -Local 46 that "no local union has been authorized . . . to act on behalf of the International Union to change any terms and conditions of the Master Agreement. 116 On 22 February International Union Representative Anderson met with officials of four of the locals in the Rath Chain to discuss the proposed deferral. At that meeting, Anderson expressly- directed the rep- resentative of Local 46 not to enter into any nego- tiations or conduct a membership vote on the pro- posed wage deferral. On 26 February the Local 46 membership nonetheless voted to accept the pro- posed-wage deferral which was put into effect on 28 February. As noted above, the judge dismissed the com- plaint in its entirety. He found that since at least 1979 the International Union had been aware of and had assisted in the formulation of locally nego- tiated contracts providing for wage deferrals for unit employees. Thus, he found that Local 46 had been given the authority to negotiate deferrals and that the Respondent relied on this grant of author- ity. He also noted that the International Union and Local 46, in negotiating these agreements, were willing to differentiate between a flat wage reduc- tion on one hand and a "deferral" with a provision for future, repayment on the other. In light of this distinction, the judge found that Local 46 had been given authority to bargain deferrals as long as the line between deferrals and concessions, e.g., flat wage reductions, was not crossed. Applying this analysis, he found that the 21 February 1983 tele- gram sent from the International to the Respondent did not "redefine that"line or reduce the Local's authority to agree to deferrals."7 He thus found that the telegram did not constitute -notice to the Respondent that bargaining authority,had been re- voked nor did it serve to effectively reassert the _ International Union's exclusive bargaining status. Accordingly, relying on Braeburn Alloy Steel Divi- sion, 202 NLRB 1127 (1973), -the judge found that the international Union, having acquiesced in local bargaining, was bound by the actions of Local 46 and that the Respondent did not violate the Act when it engaged in direct negotiations with Local 46 or executed an agreement with that local pro- viding for an additional wage deferral for its Wa- terloo employees. - It is, of course, well settled that it is the duty of an employer to bargain solely with a statutory rep- resentative and no other person or group.8 Howev- er, a bargaining representative may, by its actual delegation or course of conduct and acquiescence, confer upon. an agent actual -or apparent authority to act on its behalf.' Such authority may be re- voked, upon timely notice and in circumstances where a third party has not acted in reliance on the prior grant of authority.' 0 In applying these principles to the instant case, we find that the all-encompassing language of the 21 February 1983 telegram in advising the Re- spondent that "no local union has been authorized ,. . . to act on behalf of the International -Union to change any terms . . .' of the Master Agreement"" 1 clearly and effectively disavowed any grant of au- thority which previously may have been conferred, irrespective of whether the February 1983 agree- ment be considered a deferral or a concession. We also find that by receipt of this telegram, prior to the vote of the membership and implementation of the deferral, the Respondent was timely placed on notice that it could not enter directly into any ad- ditional agreement with Local 46.12_ 5 The judge also credited testimony that, in negotiating this agreement, the Respondent's attorney explained, with reference to par 4 of the sup- plemental agreement , set forth at fn 4 above, that the Employer's finan- cial situation would possibly require future deferrals to be negotiated di- rectly between the Employer and the locals However, the judge also found that it was never considered that the deferral contained in par 4 would increase above $20 per week per employee 5 The telegram more fully states - It has come to my attention that there may have been some local discussions in Waterloo with reference to the possibility of reducing terms and conditions set forth in the Master Agreement with your Company This will place you on notice that no local union has been authorized by the United Food and Commercial Workers Interna- tional Union, AFL-CIO, to act on behalf of the International Union to change any terms and conditions of the Master Agreement 7 He also found that the oral admonition by the International Union's representative Anderson to Local 46's representative did not constitute effective notice to the Employer - 8 Medo Photo Supply Corp v. I LRB,-321 U S 678 (1944) 9 Spriggs Distributing Co, 219 NLRB 1046, _1049(1975), Independent Stave Co, 148 NLRB 431 (1964) i° See Restatement 2d, Agency Secs 118, 119, and 135 (1957) " See also fn 6 • 12 We thus find the judge's reliance on Braeburn Alloy, supra, mis- placed In Braeburn Alloy, the Board found that an international union ac- quiesced in a respondent's direct dealings with its affiliated local in light of evidence that the international union's representative knew of direct contracts between the employer and the local, encouraged the negotia- tions, and took no steps to interpose the international's exclusive status or prevent the employer and local from communicating with each other RATH PACKING CO 257 . Further, -we reject the Respondent's argument that the 1982 supplemental agreement authorized the February 1983 agreement between the Re- spondent and Local 46. In doing so, we note that the record shows-that the 1982 supplemental agree- ment, to which the Respondent and the Rath Chain were parties,13 was negotiated with the knowledge and approval of the International Union. Nonethe- less, we conclude that the 1982 supplemental agree- ment did not privilege..the Respondent's actions in February 1983. First, we note that the supplemen- tal agreement expressly states that a "total of $20 in wages.during each week shall be . . . deferred." (Emphasis added.) The bargaining history, as found by the judge, also shows that the parties did not- consider a deferral in excess of $20. Thus, notwith- standing the credited evidence of an agreement to possible additional deferrals, the language of the contract, as supported by evidence of an intent consistent with this language, does not encompass the proposed deferral of an additional $2.50 per hour per employee. Further, the evidence shows that the supplemental agreement was executed on behalf of the seven locals which comprised the Rath Chain and it is premsumably these seven locals, together with the Respondent, which are referenced as "parties" in the language of that agreement. It is clear that the 1983 agreement be- tween the Respondent and Local 46, providing for wage deferrals, does not include all relevant par- ties. Finally, the 1982 supplemental agreement iden- tifies two funds for the placement of the deferred wages, the employee stock option plan and the capital expenditure fund. The 1983 agreement does not identify these funds. Thus, even assuming that the 1982 supplemental -agreement provided for the negotiation of additional agreements, the 1983 agreement does not satisfy what appears to be nec- essary conditions for additional agreements. Thus, we find that the 1982 agreement did not authorize the negotiation of the 1983 deferral agreement. Ac- cordingly, we find that, by negotiating and subse- quently executing an agreement providing for addi- tional wage deferrals with Local 46, the Respond- ent violated Section 8(a)(5) and (1) of the Act. REMEDY Having found, that the Respondent has engaged in certain unfair labor practices within the meaning of the Act, we shall order it to cease and desist therefrom and to take affirmative action designed to effectuate the policies of the Act. 13 The record shows that the supplemental agreement was signed by the Respondent's representative and representatives from each of four locals However, testimony shows that the agreement was adopted by all seven locals The Respondent shall make employees whole for losses suffered since 28 February 1983 as a result of its failure to pay contractual wage rates when it unilaterally and without the consent of the Interna- tional Union decreased the wages of its Waterloo, Iowa employees. Such sums shall be computed in the manner set forth in Ogle Protection Service, 183 NLRB 682, 683 (1970), with interest, as prescribed in Florida Steel Corp., 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). ORDER The National Labor Relations Board orders that the Respondent, The Rath Packing Company, Wa- terloo, Iowa, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Unlawfully bypassing the International Union as the exclusive collective-bargaining representative of its unit employees and dealing directly with its Waterloo, Iowa employees and Local 46. (b) Unilaterally, and without the consent of the International Union, modifying the collective-bar- gaining agreement between the Respondent and the International Union by reducing the wage rates, set forth in this agreement, of its Waterloo, Iowa em- ployees. (c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act. (a) Make whole all employees for losses suffered as a result of the Respondent's failure to pay its Waterloo, Iowa employees the wage rates set forth in the parties' collective-bargaining agreement. (b) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at its Waterloo, Iowa facility copies of the attached notice marked "Appendix." 14 Copies of the notice, on forms provided by the Regional Director for Region 18, after being signed by the Respondent's authorized representative, shall be - posted by the Respondent 'immediately upon re- ceipt and maintained for 60 consecutive days in 14 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 Na- tional Labor Relations Board" shall read "Posted Pursuant to a-Judgment of the United States Court of Appeals Enforcing an Order of the Nation- al Labor Relations Board " 258 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conspicuous places including all places. where no- tices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to ensure that the notices are not -altered, defaced, or covered by any other material. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 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 violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT bypass the United Food and Commercial Workers International Union, _AFL- CIO, CLC as the exclusive collective-bargaining representative of our unit employees by directly dealing with our employees and Local 46. WE WILL NOT unilaterally, and without consent of the International Union, modify the terms of our collective-bargaining agreement with the Interna- tional Union by reducing the wage rates, set forth in this agreement, of our Waterloo, Iowa employ- ees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed, you by, Seciion 7 of the Act. - WE WILL make whole all employees for losses suffered as a result of our-failure to pay the wage rates set forth in our collective-bargaining agree- ment with the International, with interest. THE RATH PACKING COMPANY DECISION On the entire record in this-case and from my observa- tion of the witnesses and their demeanor, I make the fol- lowing FINDINGS OF FACT I. THE PARTIES -AND JURISDICTION The Rath Packing Company (Respondent or Rath) has for many years been engaged in the meat packing indus- try on a nationwide basis. There are currently two pro- duction plants in operation, one each in Waterloo, Iowa, and in San Antonio, Texas, as well as branch operations in California, Indiana, Florida, Texas, Iowa, and Geor- gia. It admits and I find that . at all material times men- tioned in the complaint it was and still is an employer en- gaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. United Food and Commercial Workers International Union, AFL-CIO, CLC (the Charging Party or the International), which by 1968 and 1979 mergers includes the Amalgamated Meat Cutters and Butcher Workmen of America, and the United Packinghouse Workers of America; has been recognized by Rath as -exclusive bar- gaining agent since at least the 1940s in various master agreements and is -a labor organization within the mean- ing of Section 2(5) of the Act. Local Union 46 ' of the International (Local 46) is made up of Rath's employees at the Waterloo plant, and is a labor organization within the meaning of Section 2(5) of the Act. It is not a charg- ing party. 11. BARGAINING HISTORY 'AND WRITTEN AGREEMENTS The most recent master agreement between Rath and the International ran from September 1, 1979, to August 31, 1982, and was later extended to 1985 . The agreement and recognition clauses provide: AGREEMENT 1. This agreement made and entered into this 28th day of February, 1980 by and between The Rath Packing Company, hereinafter called the Company, and the United Food and Commercial Workers International Union, AFL-CIO, on behalf of the local unions recognized in various plants listed in Paragraph 2 below , hereinafter called the Union. STATEMENT OF THE CASE WALTER J. ALPRIN, Administrative Law Judge. The issue in this case is whether an employer violated Section 8(a)(5) and (1) of the National Labor Relations Act (the Act) by negotiating a wage deferral in a separate agree- ment with a union local without prior approval by the International union or inclusion in the master agreement. The charge was filed on March 28, 1983, the complaint issued on May 11, 1983, and hearing was held at Water- loo, Iowa, before me on March 29, 1984. A briefing date of May 3, 1984, was established, later extended to May 24, 1984, and briefs were submitted by the General Counsel, by the Charging Party, and by Respondent. RECOGNITION 2. The Company recognizes the Union as the sole and exclusive bargaining agency for the employees in the following bargaining units more fully de- scribed in Exhibit I attached hereto and made a part hereof, where the following locals of the Union are recognized as the exclusive bargaining agencies: 1. Waterloo 46 2. Charlotte 525 3. Dallas 54 4. Houston 722 5. Morrow, Ga. 442 RATH PACKING CO 259 6. San Antonio 171 7. Columbus Junction, Ia. 431 3. The Company will not bargain collectively with any other labor organization affecting employ- ees in the recognized units during the life of this agreement. In addition to the seven facilities covered in this master agreement, Rath has three production facilities which are covered by separate collective-bargaining agreements with either the International or one of its locals. The Waterloo facility is by far the largest of all of Rath's pro- duction facilities. In 1979, Rath was experiencing -severe financial diffi- culties and began negotiations on a plan by which em- ployees would receive a part of their wages in equity se- curities to- the point where' the employees would own a majority interest, and also would forego current payment of certain employee benefits "to be paid at a later date out of,profits." In furtherance of these plans, on April 13, 1979, Rath and Local 46 entered into the "1979 Inter- im Agreement" by which specific benefits were not to be paid employees when due, but would be paid into an escrow fund pending a conclusion of negotiations. Jesse Prosten, then vice president of the International's pack- ing house division, helped to devise and agreed in princi- ple with the concept of locally negotiated deferrals. On June 2, 1979, negotiations concluded successfully and Rath the Local 46 entered into the "Local Agreement" providing in part that- The Company and the Local Union agree that the terms and conditions of the Master Agreement W and of other Agreements now in effect between the Company 'and the Local Union or between • the Company and (the 'National Union) shall continue in effect and shall continue to apply to the Local P- 46 unit, except only that payment of certain por- tions of the wage and benefit payments required, therein shall be made as provided • in this Local Agreement: The local agreement in general provided for the deferral of 50 cents per hour ($20 per week based on 40 hours) from the payment of wages and benefits , to.be placed in the escrow fund established by the 1979 Interim Agree- ment, .. . until the stockholders of the Company and the membership of the Local Union have approved the terms of an agreement with respect to the acquisi- tion of 60% of the stock of the Company by or for the benefit of participating employees. The local agreement also provided for repayment of de- ferrals from a fund of one-half of any pretax profits, after meeting ERISA standards for funding the pension plan. On September 2, 1982, the International, "on its own behalf and on behalf of" the same seven local unions mentioned in the prior master agreement , entered into a memorandum of agreement with Rath,, extending the master agreement to August 31, 1985 . This memorandum of agreement recognized that "the Parties have currently negotiated a continuation of various special provisions of prior deferral agreements which will now expire at mid- night August 31, 1985 ." By this memorandum of agree- ment the International agreed that: 3. The Company shall be allowed to continue the existing deferral of certain vacation holiday and sick benefits pursuant to . . . an Interim Agreement dated April 13, 1979. The Company shall also be al- lowed to continue the existing deferral of certain Cola payments pursuant to a Local Agreement dated June 6, 1979, and otherwise . All of the afore- mentioned deferred benefits shall be subject to a supplemental agreement which will include a profit sharing provision. The memorandum was executed on behalf of the Interna- tional by Lewie G. Anderson. On the same date, September 2, 1982, Rath entered into an agreement with "the Local Unions covered by the Memorandum of Agreement dated September 2, 1982," providing in part 3. . . . that during the Rath Master Agreement a total of $20 in wages during each week shall be . . . deferred and paid into the segregated fund set forth in paragraph 4. herein below ._ . . 4. The parties have, in paragraph 3 above, agreed upon the payment of certain employee benefits into a segregated fund Such benefit payments , and any others which the parties may agree to add to this Agreement, will continue to be paid into the segre- gated fund in accordance with the terms of this Agreement. An amount equal to a, total of $4.00 in wages during each week shall be contributed to the ESOP, i for its first year funding , and the amounts will be actuarily determined thereafter on at least an annual basis. The remaining amounts contributed to this segregated fund may , as agreed by the parties, be utilized to purchase and install capital improve- ments and/or to fund advertising ; sales expense, and sales promotion expense: The parties will'meet on a periodic basis to review proposed expenditures which will be handled by a combination of written corre- spondence and telephone conference calls. The Com- pany will use its best efforts to take into account, in their proposed expenditures, the amounts contribut- ed to the segregated fund by each participating plant. The parties agree to utilize the segregated fund to the benefit of all of the employees of all of the plants. The parties may agree upon other mat- ters for which this money may be utilized. The em- ployee benefit payments which have been paid into the segregated fund shall remain as deferred and contingent obligations to be paid to the employees out of the before-tax profits of the Company as set forth in paragraph 5 below. [Emphasis added.] ' Employee stock option plan . 260 DECISIONS OF NATIONAL 'LABOR RELATIONS. BOARD It. apparently was never considered that the deferral would ever increase above $20 per week per employee, but it was recognized that the ESOP contribution por- tion would require adjustment up or down depending upon various fluctuating factors, until May 1982, when deferrals were to end. In addition to stock purchase, the fund was to be utilized, as stated, for capital improve- ments, fund advertising, and sales and sales promotion expenses..On behalf of the local unions the agreement was executed by David E. Simmons of the Dallas local, Donald J. Steven, of the San Antonio local, R. P. Ed- wards, of the Columbus local, and Charles T,Mueller, of the Waterloo focal. . Taylor, then, still an officer of Local.46, suggested to Lewie Anderson, who had become the International's vice president in the packinghouse division 2 years earli- er but because of other contract- matters had not been personally present for most of the negotiations, that they have a breakfast meeting with Rath's attorney, Charles Swisher, on September 2, 1982, prior to execution of the agreement. Swisher testified that at this meeting he spe- cifically called Anderson's attention to paragraph 4 of the agreement, to be entered into with the locals, ex- plaining that Rath's financial situation would possibly re- quire future deferrals to be negotiated directly between Rath and the locals, and at the same time' assuring him that these past, current and presumably future deferrals were not wage concessions and would not create a devi- ation from the master agreement entered into' with the International. Swisher further testified that Anderson had commented that he-was not going to sign the agreement involving the locals since he "did not want.the Interna- tional's name on any agreement that in any way indicates deviation or possible deviation from the International He said I understand it, but I am not going to sign it." Anderson's testimony flatly contradicts all of this,- stating that all the terms' of the agreement had been negotiated by that time and no conversation regarding paragraph 4 took place. The third person at the meeting, -Taylor, then an officer of Local 46 and now chief operating officer of Rath,, supported Swisher's account of the conversation, in that "Swisher pointed out the language, the deferral language in the local agreement and asked if this would be acceptable to Lewie and I . . . Lewie asked me what I thought and I said I think it gives us the authority we need and he agreed." - ' Rath's financial situation worsened, and on February 13, 1983, it told Local 46 that it required additional wage reductions of from $2 to $3 per hour. Swisher, in'testify- ing, used the word "deferrals" for such reductions, while Taylor testified that the word "concession" was first used, which so enraged the union officers that he sug- gested the reductions be wage deferrals. Three days later, on February 16, 1983, Local 46 convened a meet- ing with Rath's directors at which it presented a propos- al`for a "two dollar ($2.00) per hour deferral to'be put in an escrow account" effective March 7, -and that "Each month thereafter, after the approval of the Local Unions, the Union would release money from the' escrow to the Company up to the point -that we break even." The agreement was to be reviewed on October 1, .1983, and was subject to further conditions, including Taylor being offered the presidency of Rath, operations being reduced to Waterloo and one other plant, 20-percent salary re- ductions of "exempt" persons, and a "staff' personnel re- duction of 20 percent. The following day, February 17, 1983, Rath's directors voted''to attempt to negotiate a deferral of $2.50 per hour "into the profit sharing fund" for a 10-month period, and formation of an executive crisis committee to consider other proposals. A letter to this effect was sent-by Rath to Local 46 on Friday, February 18, 1983, and a similar letter-was simultaneously sent by Rath to the Interna- tional, seeking- its participation. On Saturday the Local agreed to allow members to vote on the proposal. On Monday, February 21, 1983, Anderson sent tele- grams to both Rath and Local 46, stating: It has come .to my attention that there may have been some' local, discussions in Waterloo with refer- ence to the possibility of reducing terms and condi- tions set forth in the Master Agreement with your Company. This will place you on notice that no local union has been authorized by the United Food and Commercial Workers International Union, AFL-CIO, to act on behalf of the International Union to change any terms and conditions of the Master Agreement. . The following day, Anderson called a meeting of repre- sentatives of Locals dealing with Rath, the so-called Rath Chain, stating that the proposal had to be consid- ered by the entire Chain. Mueller, the Waterloo Local representative, took the position that Local 46 was au- thorized by prior agreements to consider the proposal in- dividually, but was told by Anderson that this was not so With the possible exception of Mueller, -the Chain voted not to consider the proposal, and Mueller was spe- cifically instructed by Anderson, upon pain of union legal- action,, not to hold any discussions with Rath or conduct any membership vote on the proposal Howev- er, Local 46 voted sometime before the end of the month, and "overwhelmingly approved the deferral of wages." The Local stated that its action was "in con- formity with paragraphs 3 and 4 of the" agreement.2 III. DISCUSSION The analysis found in General Electric Co., 150 NLRB 192, 263-264 (1964), enfd. 418 F.2d 736 (2d Cir. 1969), is highly pertinent and remains a precise statement of appli- cable law: ' - ' The law is, of course, well settled that it is the duty of. an employer* to bargain exclusively with the chosen representative of his employees, - an obliga- tion which "exacts the negative duty to treat with no other." .. . It has, frequently been held violative of Section 8(a)(5) and (1) of the Act for an employ- er to attempt to bypass a designated bargaining 2 Testimony regarding a phone conversation between Swisher and An- derson sometime during this period, possibly before-and possibly after-the vote, I find-not only disputed but so uncertain and inconclusive by both parties regarding details as to be nondeterminative 'RATH PACKING CO - - 261 agent by dealing directly with employees, individ- ually or as a group, or, for that matter, similar to the situation here, with a representative of a seg- ment of a bargaining unit, such as, for example, a local where an International Union is the bargaining agent for a broader group. The charge in this matter was filed by the Internation- al, and lest we unnecessarily tarry in the quagmire. of whether the exclusive bargaining agent in the matter, at hand was the Local, the Chain of locals, the Internation- al, or some combination, let us hurry forward to Brae- burn Alloy Steel Division, 202 NLRB 1127,`.1128 (1973), which held that "conduct` acquiesced in,-and encouraged by, [the] bargaining representative" does not 'violate Sec- tion 8(a)(5) and (1) of the Act As Administrative Law Judge Roth wrote, with affirmation by the Board, "[A]n employer does not violate Section 8(a)(5) by dealing with a local union, even though the- parental Internation- al is the designated or certified collective-bargaining rep- resentative, - when the International has acquiesced in' such bargaining at the local level. . In sum, the Board looks to the realities of the relationship among the parties, not merely to the identity' of the designated or certified col- lective-barganing 'representative." M & M Transportation Co., 239 NLRB 73, 76 (1978), emphasis added.3 In the matter at hand, the International, as the Charg- ing Party, claims recognition-as,exclusive bargaining rep-' resentative. Assuming arguendo this to be the case, the General, Counsel failed to meet the defense of acquies- cence in bargaining with local unions on so-called defer- ral issues. Since at least 1979 'the International has • been aware of local agreements between the employer and Local 46 parallel with the master agreement between the same employer and the International. It has assisted. in their formulation, referred to them in the master agree- ment, and knowingly used them as a cloak to permit members of one local to break ranks with International solidarity where exigency required. It cannot here dis- avow its' acquiescence.4 3 See also Computer Sciences Corp, 258 NLRB 641, 645 (1981), Spector Freight System, 260 NLRB 86, 95 (1982), and Branch Motor Express Lines, 260 NLRB 108, 116 (1982) * For this reason it is not necessary to'rule on the testimonial conflict regarding the breakfast meeting of September 2, 1982 Anderson and the International were obviously aware of the two prior deferral agree- ments-the April 13, "1979- Intenm Agreement" and the June 2, 1979 "Local Agreement," as they are specifically referred to in the Interna- tional's agreement, executed by Anderson later on September 2, 1982 Even if the two earlier deferral agreements were not referred- to in the International 's extension of the master agreement, it is inconcievable that the International would not have knowledge of the joint action of four of its locals in agreeing to the September 2, 1982, deferral agreement The One may- question-whether the International, though having at times acquiesced, may not reassert its exclusive status. While such is not the claim here of the Interna- tional or of the General Counsel, it would appear clear that rights unilaterally, foresworn might be timely reas- serted, but only where a third party, here the employer, has not already taken action in reliance on the abdica- tion. In its warning telegram of February 21 the Interna- tional made no referance to the issue it had delegated to Local 46, of agreeing to "deferrals." Though in my opin- ion acceptance by -employees of anything other than agreed-upon wages in hand on payday, whether it be stock of questionable value or an in futuro right to theo- retical profits, constitutes a concession, both the Interna- tional and Local 46 were willing to differentiate between a flat, final wage reduction on the one hand, and, on the other, a deferral of a portion of wages with the possibili- ty of being made. whole at a later date. Local 46 was given the authority to bargain such deferrals so long as that line between, deferral and concession, whether real or illusory, was not crossed Here, the International's warning telegrams did nof ,redefine that line or reduce the Local's authority to-'agree to deferrals, and the oral admonition to the Waterloo member of the Rath Chain did not extend to the Employer. The action by Rath in reliance on the International's prior position would there- fore bind the International. ' CONCLUSIONS OF-LAW 1. The Respondent, The Rath Packing Company, is an employer engaged in commerce within the meaning of the Act, and United Food and Commercial Workers International Union, AFL-CIO, the Charging Party, is a labor, organization within the meaning of the Act. 2 The General Counsel has not established by- a pre- ponderance of the evidence that the ,Respondent has failed and refused, and is failing and refusing, to bargain collectively and in good faith with the representative of its employees. 3 The General, Counsel has not established by a pre- ponderance of the evidence that the Respondent has interfered with, restrained, and coerced, and is interfer- ing with, restraining, and coercing employees in the ex- ercise of the rights- guaranteed in Section 7 of the Act. [Recommended Order for dismissal omitted from pub- lication.] - issues governing -the decision herein are knowledge and acquiescence, which have been shown to exist Should a resolution of the testimonial conflict be later' required, however, I would credit the testimony of Taylor and Swisher, reflecting comments by each which would have been appropriate and expected - under the circumstances of the meeting