G. Zaffino And Sons, Inc.

456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD G. Zaffino and Sons, Inc. and Shopmen's Local Union No. 455, International Association of Bridge, Structural and Ornamental Iron Work- ers, AFL-CIO. Case 29-CA-10582 20-May 1985 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS. HUNTER AND DENNIS On 17 January 1985 Administrative Law Judge Raymond P. Green issued the attached. decision. The General Counsel filed exceptions and a sup- porting brief, and the Respondent filed an answer- ing brief. The National Labor Relations Board has consid- ered the decision and the record in light of the ex- ceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recommended Order. ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis- missed. DECISION STATEMENT OF THE CASE RAYMOND P. GREEN, Administrative Law Judge. This case was heard by me on March 20, 21, and 23, 1984. The charge in this proceeding was filed on July 8, 1983, and a complaint was issued on October 31, 1983. In sub- stance, the complaint alleges: (1) that Respondent has ne-. gotiated with the Union in bad faith, with no intention of reaching a contract; and (2) that "some time within six months prior to the filing of the instant charge, Respond- ent unilaterally changed existing wage rates and other terms and conditions of employment by giving employ- ees' . . . a unilateral wage increase without having bar- gained in good faith with the Union concerning such change, and without having reached an impasse with the Union." FINDINGS AND CONCLUSIONS 1. JURISDICTION It is agreed by all parties that G. Zaffino and Sons, Inc. is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. It also is agreed that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. BACKGROUND This is one of a group of related. cases ' all of which have _a long history of litigation Insofar as relevant, the background is described below. For a period of time prior to 1975, Zaffino had main- tained a collective-bargaining relationship with the Union on an independent, as opposed to multiemployer, basis. (Before 1975, the Union also bargained with an employer association called the Allied Building Metal In- dustries, Inc.) As a result, Zaffino and other independent companies which bargained with the Union came to have a history of executing a series of successive con- tracts which basically were referred to as the standard independent contract. Over a period of time there evolved a degree of difference between the standard in- dependent contracts and the Allied contracts. In early 1975 Zaffino along with other companies which were not members of the Allied Building Metal Industries, Inc. (the Allied 'Association), decided to form their own multiemployer association called the Independ- ent Association of Steel Fabricators. One of the new As- sociation's. goals was to achieve parity with the contract held by the Allied Association. Bargaining between the Union and the Independent Association commenced on June 10, 1975. No contract having been reached by June 30, 1975, the Union com- menced a strike on July 1, 1975. From July 1 to late - August there was a hiatus in negotiations, albeit one of the Independent Association's members signed a separate contract with the Union. (That action provoked some litigation which is described in NLRB v. Independent Assn. of Steel Fabricators, 582 F.2d 135 (2d Cir. 1978), cert. denied 439 U.S. 1130 (1979).) In late August and through October 1975, negotiations were held between the Union and the Independent Asso- ciation. However, as both sides stuck- to their guns on a number of issues, not much progress was made. In Octo- ber the spokesman of the Association advised Local 455 that another union -was interested in organizing the em- ployees involved. Subsequently, between November 1975 and January 1976, some of the employer members of the Independent Association • entered into contracts with Local 810 International Brotherhood of Teamsters, an action later held to be unlawful by the Board - and the Second Circuit Court -of Appeals at 231 NLRB 264 (1977) and 582 F.2d 135. 1 In early January 1976, the Union and the Allied Asso- ciation reached a contract settlement. On January 14 the Union offered the wage and fund package to the Inde- pendent Association on the same basis as had been agreed to with the Allied Association. However, the In- dependent Association, desirous of parity, offeied to accept the exact same terms as had been agreed to with the Allied Association. The Union refused. On January ' On various days in February, March, April, June, and September 1984 I heard a number of other cases where the facts were substantially related to the instant case These were Roman Iron Works Inc, 29-CA- 10583, 29-CA-10582, Achilles Construction Co, 29-CA-10585, The Peele Co, 29-CA-10584, and Koenig Iron Works Inc, 29-CA-10586. As the cited cases were not consolidated for hearing with the present case, I shall, in due course, issue separate decisions in each of these 275 NLRB No. 67 G. ZAFFINO & SONS 16, Local 455 was notified that 19 of the Independent Association's members had withdrawn from the Associa- tion On January 20, the Union notified the Association that it did not consent to such withdrawals It further ad- vised that any agreement made between it and the Asso- ciation's remaining members would be binding on those- employers who had attempted to withdraw without the Union's consent. On January 23, 1975, Local 455 met -with three em- ployers who had not withdrawn from the Independent Association. At this meeting the parties present reached an agreement, although the three employers stated that they were not authorized to represent the Association. Thereafter, in late January, five employers signed the January 23 stipulation, albeit refusing to do so on behalf of the Independent Association. Meanwhile, the strike was continuing against the other members of the Independent Association who had not signed contracts with Local 455. The Union thereupon sent two letters to the employers who had withdrawn from the Independent Association, one requesting that they implement the January 23 stipulation,2 and the other requesting reinstatement of the striking employees. Two employers did execute agreements identical to the January 23 stipulation and did reinstate the striking em- ployees. The 17 others, including Zaffino, did not. In light of the situation summarized above, Local 455 filed various unfair labor practice charges. Also an unfair labor practice charge was filed against the Union. All of those cases were consolidated for trial and ultimately led to a series of decisions by the Board and the Second Cir- cuit Court of Appeals reported at 231 NLRB 264, 582 F.2d 135, 252 NLRB 922, and 681 F.2d 130 (1983). Inso- far as relevant to the present case, certain former mem- bers of the Independent Association, including Respond- ent, were ordered to bargain on an individual basis (as opposed to a multiemployer basis) with Local 455. Also, certain employers who had executed contracts with Local 810 were ordered to abrogate such contracts and withdraw recognition with that Union. Zaffino, unlike some of the other companies, did not enter-into a contract with Local 810. However, as it did not renew its contract with Local 455, it did not contin- ue to follow the terms of the expired contract.3 As a consequence, since 1975 it operated as if it were, de facto, a nonunionized company and unilaterally esta- bished its own terms and conditions of employment during the 7-year period during which the litigation pro- ceeded. By the time the court of appeals issued its last decision on June 6, 1982, the Company employed five bargaining unit employees, two of whom had been employed before the 1975 strike and three having been hired in 1980 and 1981. Also, the two owners of the business, who are men in their seventies, no longer were interested in the growth of their business. 2 On the theory that their withdrawals from the Independent Associa- tion were untimely and therefore they were bound to execute any agree- ment made between the Union and the remaining members of the Asso- ciation 3 For example, upon expiration of that contract, Zaffino ceased making payments to the vanous trust funds as required by the contract 457 Concluded Findings After the court's June 6 opinion, the Union sent a letter on June 8, 1982, to Roman and other companies asking to start negotiations. On July 12 the Union sent another letter requesting information including the names and addresses of employees. On August 18, 1982, a meeting was held between Wil- liam Colavito, president of Local 455 and Stanley Israel, a labor attorney representing Zaffino and seven other companies (These were Roman Iron Works, Inc., Achil- les Construction Co., The Peele Co., Koenig Iron Works, Mello Metal Products, Inc., Master Iron Craft Corp., and Mohawk Steel Fabricators, Inc.)4 At this time, Colavito presented as the Union's proposal certain wage increase demands plus the same Standard Inde- pendent contract which these companies had rejected in 1975. Israel, on behalf of his clients, told Colavito that they would not agree to the Standard Independent Con- -tract and would each insist on negotiating contracts suit- able to themselves. Following the August 18 meeting, Colavito and Israel (sometimes accompanied by his client) held a series of about 14 meetings through November 21, 1983. In this respect, it appears that although negotiations for each company represented by Israel were kept more-or less separate, there were occasions when discussions at a meeting for Company A related to some or all of the other companies. This often occurred when there was discussion of demands: and counterproposals relating to "non economic" contract language. Thus, although it is clear that Israel was negotiating separately for each com- pany, there was a degree of overlap during the negotia- tions. As noted above, the complaint in this case alleges that Respondent made unilateral wage increases during the course of the negotiations without there having been an impasse. More specifically, the complaint alleges that such wage increases occurred "some time within six months prior to the filling of the instant charge" The problem with this allegation is that the evidence simply does not show any wage increases given by the Compa- ny during the period alleged. It certainly is true that there was evidence of wage increases given in July and August 1982 (some time after the bargaining had com- menced). But such increases were not alleged as violative and cannot be found unlawful because they occurred outside the 10(b) statute of limitations period.5 It also is true that the General Counsel elicited evidence that at a negotiation on October 31, 1983, Angelo Zaffino said that two employees had received wage increases in August 1983. However, the complaint does not allege these latter wage increases as being violative of-the Act and the General Counsel never moved to amend the complaint to encompass these August 1983 alleged uni- lateral wage increases. Respondent for its part objected to the relevancy of this evidence, did not attempt to ° Of these companies , Master, Mohawk , and Melto signed contracts with Local 455 (Master's contract with the Union was received in evi- dence ) 5 January 8, 1983, is the cutoff date for,purposes of Sec 10(b) of the Act 458 . DECISIONS OF NATIONAL LABOR RELATIONS BOARD meet it, and • did not proffer any evidence to explain or justify these raises. As there was no evidence to-support the allegation of unilateral changes as alleged by the complaint, and as the only wage increases . granted during . negotiations oc- curred either outside the 10(b) period or at point outside the scope of the complaint, I shall recommend that this allegation be dismissed. Gehnrich & Gehnrich, Inc., 258 NLRB 528 (1981); Camay Drilling Co., 254 NLRB 239 fn. 9 (1981). , The other issue in this case-is the General Counsel's allegations that Zaffino entered into negotiations in bad faith and "with no intention to enter into any final or binding collective bargaining agreement." - ' - ` Section 8(d) of the Act, which defines the duty to bar- gain, does not' compel either party to a collective-bar- gaining relationship, to agree to a proposal; or to make 'a concession. Therefore, insofar as mandatory subjects of bargaining (generally relating to wages, hours, and terms and conditions of employment), the Act does not require either party to yield or compromise its position. In this respect, the'Supreme Court 'in NLRB v. American Insur- ance Co., 343 U.S. 395, 404 (1952), stated: [T]he Board • may not, either directly- or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements. - - The Court further stated in H. - K Porter Co. v. NLRB, 397 U.S. 99, 107-108 (1970): - It is implicit in the entire structure of the Act that the Board acts to oversee and-referee' the process of collective bargaining, leaving the results of the con- test to the bargaining strengths of the parties . . . . While'the parties' freedom of contract is not abso- lute under the Act, allowing the Boardto compel agreement ` when the parties themselves' are unable to agree would violate 'the fundamental premise on which the--Act is based-private bargaining under governmental supervision' of the procedure alone; without any official compulsion over the- actual terms of the contract. It also is clear that it was the intention of -Congress to permit (within limits) employers and unions to - utilize their relative economic strengths vis-a-vis each other, as part of the bargaining process.6 As pointed out by the Supreme Court in NLRB v. Insurance Agents, 361' U.S. 477, 489 (1960): - ' The presence of economic weapons.in reserve, and their actual ; exercise, on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized . . . the truth of the ' matter is that at the present statutory stage of our national labor relations policy, the two fac- tors-necessity for good-faith bargaining between 6 There are of course statutorily defined limits upon each side's use of economic power Thus, for example, Sec 8(b)(4)(B) prohibits a union from, engaging in secondary boycotts, and Sec 8(a)(3) would preclude an employer from discharging-employees who join or support a union parties, and the availability of economic pressure devices to each to make the other party incline to agree on one's terms-exist side by side. It therefore is not necessarily unlawful for the stronger side to make demands or take positions consistent with its strength. Quite obviously, the respective strength of a union versus a company in bargaining is largely depend- ent on the support of the employees it represents, their willingness to strike, and the vulnerability of the compa- ny to a strike. See, for example, World Publishing Co., 220 NLRB 1065, 1071 (1975), enfd. 545 F.2d 1138 (8th Cir. 1976). Furthermore, collective bargaining is basical- ly a two-way street. Thus, while a union may lawfully make demands designed to improve existing employee wages and benefits, there is nothing in the Act which denies an employer the right, for its part, to demand give backs.', Where the parties are negotiating to replace a prior contract, neither side is precluded from seeking modifications to its own advantage. The act simply does not preclude an employer from demanding that various provisions of the old contract be modified, altered, or even eliminated: Thus, in the present case, when the General Counsel argues that the Respondent sought to modify or eliminate contractual provisions contained in the contract or eliminate contractual provisions con- tained in the contract which expired in 1975, Iam. unim- pressed as to the materiality of such a fact. Although it is not illegal for a company to engage in hard bargaining, Section -8(a)(5) of the Act nevertheless requires the company to bargain in good faith, which is essentially defined as a willingness to enter into a con- tract. NLRB v. Insurance Agents, supra at 485. Thus, al- though a company may use its relative strength to press for contract terms favorable to itself, it may not use its strength to engage in futile or sham negotiations with the intention of never reaching an agreement. NLRB v. Herman Sausage Co., 275 F.2d 229, 232 (5th Cir. 1960). As stated in Abingdon Nursing Center, 197 NLRB-781, 787 (1972). Good faith, or the want of it, is concerned essential- ly with a state of mind . . . . That determination must be based upon reasonable inference drawn from the totality of conduct evidencing the state of mind with which the employer entered into and participated in the bargaining process . . . -. All as- pects of the Respondent's bargaining and related conduct must be considered in unity, not as separate. fragments each to be assessed in isolation. In the instant case negotiation commenced on August 12; 1982, and ended on November 21, 1983. During that the time there were about 14 meetings specifically direct- ed to Zaffino but there also were other meetings where matters relevant to Zaffino were discussed. There is, in my opinion, no evidence that the Company refused to meet the Union at reasonable times and places. The evidence shows that -at the start of negotiations, Colavito presented to each company represented by Israel the Standard Independent Contract. This form of contact was rejected-by Israel who stated that each com- G. ZAFFINO & SONS 459 pany desired to negotiate its own terms Although Israel told Colavito that certain of his clients were not going to supply the addresses of their employees, he did indicate that Zaffino would turn over this information to Local 455. This was done on Spetember 7, 1982. At the next meeting on September 20, Israel tendered a marked up copy of the Standard Independent Contract with the name Melto written in. Israel said that the doc- ument also 'represented the offers of various of his other clients, including Zaffino, except that (1) whereas Mello would not agree to union-security and checkoff provi- sions, the others would, and (2) whereas Mello wanted the contract to run for 6 years from October 1, 1982, to September 30, 1988, the other companies (including Zaf- fino) wanted 5-year contracts 'to run to September 30, 1987. As to wage rates and other economic items, Israel said that each company would make its own economic offers at a subsequent time. There is a dispute as to whether Isarel on behalf of Zaffino made an economic counterproposal on Septem- ber 20, 1982. According to Colavito he did not. Accord- ing to Israel he made an identical wage offer for Zaffino and Achilles which was cost-of-living increases each year less 1 percent. In my opinion it is unnecessary to resolve the above dispute as it appears that by.mutual consent, the first 6 'or 7 months of bargaining primarily revolved around contract language differences inasmuch as Zaffino's proposed contract was significantly different from' the Union's proffered Standard Independent Con- tract. In this respect, Zaffino and the other companies in- volved were demanding many and sizeable give backs on mandatory subjects of bargaining such as seniority, vaca- tions, holidays, subcontracting, etc. Israel also made it plain from early on in the negotiations' that the compa- nies would not agree to contribute 'to the various multi- employer trust funds called for in the Union's proposed Standard Independent Contract. In this respect, Zaffino had made contributions to these funds before the 1975 contract expired but had ceased making such payments when it expired.7 At the time of these negotiations, Zaf- fino had neither a pension plan nor a health insurance plan for its employees. Its only fringe benefits were holi- days and vacations. During the negotiations (in July 1983), the Company offered to obtain Blue Cross and Blue Shield coverage for its employees. It also offered, on August 9, 1983, to make payments of 15 cents per hour per employee to a single. employer pension plan which had immediate vesting or to improve welfare ben- efits At meetings during November and December 1982, the parties discussed' at considerable length their respec- tive "language" proposals. Although there were many differences there also were some agreements. (See, for example, Israel's letters to the Union on December 21, 1982, and April 11, 1983.) On March 7, 1983, Israel wrote a letter to Colavito setting forth each company's contract offer. As to Zaf- fino's economic offer, this was as follows: ' The Standard Independent Contract calls for employer contributions to a pension fund, a welfare fund, an annuity fund, a vacation fund, an apprenticeship and training?und, and a severance pay fund 1. Five year agreement, retroactive to October 1, 1982. - 2. Retention of existing benefit levels and terms. 3. Across the board wage increases to employees on the payroll on the date of the increases (6/1/83, 6/1/84, 6/1/85, 6/1/86, and 6/1/87) equal to cost of living increases on that June over the prior June, - less 1% With receipt of Israel's March 7, 1983 letter, - it seems clear that at least by this time Zaffino was -tendering a complete contract offer which was capable of acceptance by the Union. Although this offer (and subsequently in-- creased offers) may not have been to the Union' s-liking, it did represent a complete contract covering wages, hours, and other terms and' conditions of employment. Thus, among other things, the Company's offer included- (1) wage increases.over 5 years, (2) union-security and checkoff provisions, and-(3) grievances-arbitration proce- dures., 8 Moreover, between March 7 and November 21, 1983, the evidence shows that the- Company made fur- ther concessions. Thus, as noted above, the Company of- feted in July and August, respectively, (1) to purchase a Blue Cross-Blue Shield Plan at 50 cents per hour, per employee and (2) to make a contribution to a single em- ployer pension fund or, at the Union's option, to buy greater welfare benefits. Also on July '28, 1983, Zaffino changed its wage offer to offer wage- increases of 60 cents per hour per employee on June 1 of each year of its proposed contract. _ Notwithstanding the- 'above, the General Counsel points to a number of evidentiary factors from which she argues that I should infer surface bargaining. The salient points are: (1) The General Counsel argues that the Company reneged on offers it previously had made. In one respect she asserts that Zaffino reneged on its initial offer to agree to sections 4 and 5 of'the Standard Independent Contract. Sections 4 and 5 are titled respectively "Union Security" and "Checkoff of Union Dues." Section ' 4 (union security) also contains a union hiring hall provi- sion. The General Counsel's argument is that when Israel on behalf of Zaffino said that Zaffino would agree to section 4, it therefore agreed also to the hiring hall pro- 8 Zaffino's contract offer is unlike those in cases such as Continental Insurance Co Y NLRB, 495 F 2d 44 (2d Cir 1974), NLRB Y A-I King Size Sandwiches, 732 F 2d 872 (11th Cir 1984), cert denied 105 S Ct. 508 (1984), American Parts Systems, 232 NLRB 41, 47-48 (1977), and San Isabel Electric Services, 225 NLRB 1073, 1079 fn 7 (1976) In the cited cases the companies were found to have engaged in surface bargaining where their contract offers insisted on broad no-strike clauses while at the same time refusing to offer any effective means of resolving contract disputes In that class of cases, it may be said that the companies made illusory contract offers because the contracts offered were, in effect, un- enforceable and/or required the unions to waive their representation functions Zaffino's offer also is distinguishable from cases where companies in- sisted on contracts of unreasonably short or long duration See, e g , Holmes Tuttle Broadway Ford, 186 NLRB 73 (1970), enfd 465 F 2d 717 (9th Cir 1972) See also Mooney Aircraft, 132 NLRB 1194 (1961 ), where the administrative law judge, in an opinion adopted by the Board, con- cluded that the respondent's insistence on a 5-year contract without a wage reopening clause was evidence of surface bargaining in the context of other evidence showing an unwillingness to reach agreement 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD visions. 'Israel-on'the other hand credibly testified that he said that Zaffino would agree to union-security - and checkoff provisions (contained in secs. 4 and 5), but never agreed to a union hiring hall. As I do not find that Zaffino at any time agreed to a union hiring hall I do not find that it reneged on a previously agreed to provision. At most, there was simply a misunderstanding. (2) The General Counsel contends that the Company's insistence on a provision which would permit it to sub- contract is evidence of its intention to avoid reaching an agreement. Her argument appears to be that if the-Com- pany was able to obtain such a clause, it theoretically could subcontract out all of its business and eliminate the bargaining unit. - As to the subcontracting contention, the last contract which Zaffino had' maintained with Local 455 (expired in 1975), and the `Standard Independent Contract proferred by the Union at,the outset of these negotiations, contains a no subcontracting provision at section 20. Initially, Re- spondent proposed that section 20 simply be deleted. -Subsequently, however, Respondent asked for a clause that would explicitly allow it to subcontract. (The Union had agreed to such a clause in its contract with Master Iron Craft Corp.) - - The subject of subcontracting has traditionally been considered a mandatory, subject of bargaining which means that either side may insist on its position regarding the subject. Thus, a union would clearly be within its right if during negotiations it insisted on a ' clause which precluded all subcontracting by a company.9 By the same token I can see, nothing illegal in a company refus- ing to agree to subcontracting restrictions dr alternative- ly'-insisting on a right. to subcontract during the life of the labor agreement. To hold otherwise would, in effect; impose a lack of mutuality in collective bargaining which I do not believe was envisioned by Congress. In the present case there is no evidence that Zaffino was taking its positions vis-a-vis subcontracting because it, in fact, intended to' take the draconian step of eliminating the bargaining unit. All that can be said is that Israel intend- ed to give the Company the option of subcontracting if economic circumstances made that desirable. I therefore do not believe that the Company's position regarding subcontracting is evidence of surface bargaining in the context of this case. " (3) The General Counsel correctly notes that the'Com- pany wanted significant give-backs from the last contract it had with Local 455. However, there had been a 7-year hiatus between the expiration of that contract and the re= sumption of negotiations and a great many changes had- evolved in the employer's terms of employment during the interim. Moreover, I do not perceive the Act to pro- hibit a company from demanding give-backs. Collective bargaining is a two way street and each side is entitled to try to get the best deal possible for itself. Given the stat- utory scheme, if a unioii does not 'have the economic muscle to back up its demands, it cannot ask the Board to compel an employer to make a contract offer more to its liking: As the evidence in this case demonstrates that - Respondent made various complete contract offers, the General Counsel cannot, in my opinion, assert that the Company had no intention of reaching an agreement simply because those offers were viewed unfavorably by the Union. Accordingly, it is recommended that this alle- gation of the' complaint be dismissed. CONCLUSIONS OF LAW 1. Respondent G. Zaffino and Sons, Inc. is and has been at all times material herein an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. - 2. Shopmen's Local Union No. 455, International As- sociation of Bridge, Structural and Ornamental Iron Workers, AFL-CIO is and has been at all times material herein a labor organization within, the meaning of Sec- tion 2(5) of the Act. 3. The Employer has not violated the Act in any re- spect as alleged by the complaint. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- edio ORDER It is recommended that the complaint be dismissed in its entirety. I should note, however, that there are certain types of subcontracting 10 If no exceptions are filed as provided by Sec 102 46 of the Board's clauses which are illegal pursuant to Sec 8(e) of the Act For a discus- Rules and Regulations, the findings, conclusions, and recommended sion of so-called union signatory clauses in the context of Sec 8(e) see, Order shall, as provided in Sec' 102 48 of the Rules, be adopted by the for example, Retail Clerks Local 1288, 163 NLRB 817 (1967), enfd 390 Board and all- objections to them shall be deemed waived for all pur- F 2d 856 (D C Cir 1968) poses