Handy Andy Associates, Inc.

208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Handy Andy Associates, Inc. and Chauffeurs, Team- sters and Helpers Union Local No. 150 , Inter- national Brotherhood of Teamsters , Chauffeurs, Warehousemen & Helpers of America. Case 20- CA-18324 31 October 1985 DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON On 18 April 1985 Administrative Law Judge James S. Jenson issued the attached decision. The General Counsel filed exceptions and a supporting brief, and the Respondent filed cross-exceptions and a brief supporting its exceptions and answering the General Counsel's exceptions. The National Labor Relations Board has delegat- ed 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 briefs and has decided to affirm the judge's rulings, findings,' and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Handy Andy Associates, Inc., Sacramento, California, its officers, agents, successors, and assigns, shall take the action set forth in the Order. I The Respondent has excepted to some of the judge's credibility find- ings. The Board's established policy is not to overrule an administrative 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 reversing the findings Jonathan J. Seagle, for the General Counsel. Robert L. Rediger (Jacinto & Hubbert), of Sacramento, California, for the Respondent. DECISION STATEMENT OF THE CASE JAMES S. JENSON, Administrative Law Judge. This matter was heard in Sacramento, California, on July 10 and 11 and September 11 and 12, 1984, pursuant to a charge and amended charge filed on August 25 and Sep- tember 8, 1983, respectively, and a complaint and amend- ed complaint issued on October 31, 1983, and June 19, 1984, respectively. The complaint, as amended , alleges that agents of the Respondent engaged in a variety of 8(a)(1), (3), and (5) conduct. The Respondent denies it engaged in any unlawful conduct. All parties were given full opportunity to appear, to introduce evidence; to ex- amine and cross-examine witnesses, to argue orally, and to file briefs. Briefs were received from both the General Counsel and the Respondent and have been carefully considered. On the entire record in the case, and from my observa- tion of the witnesses and their demeanor, I make the fol- lowing FINDINGS OF FACT 1. JURISDICTION It is admitted and found that at all times material herein, the Respondent was engaged in the operation of retail appliance stores and a related warehouse and deliv- ery service in Sacramento, California; that during the past 12 months its gross revenues exceeded $500,000 and it purchased and received products and goods valued in excess of $5000 from sources outside California; and that it is an employer engaged in commerce within the mean- ing of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED It is admitted and found that Chauffeurs, Teamsters and Helpers Union Local No. 150, International Brother- hood of Teamsters, Chauffeurs, Warehousemen & Help- ers of America is a labor organization within the mean- ing of Section 2(5) of the Act. III. ISSUES Chronologically listed below, the amended complaint alleges in substance: 1. That the Respondent has recognized the Union as the collective-bargaining representative of its truckdriv- ers, helpers, and warehousemen, a unit appropriate for collective-bargaining purposes, which recognition has been embodied in successive collective-bargaining agree- ments, the most recent of which was effective from April 1, 1981 to April 1, 1983.1 2. That Gary Fracolli and Ray Rabeneck are the Re- spondent's agents and supervisors.? 3. That on March 22, 1983, the Union requested the Respondent to furnish information regarding its intention to contract out all of the unit work, which the Respond- ent has failed and refused to do. 4. That about April 15, 1983, Fracolli: (a) Told employees they could keep their jobs only if they resigned from the Union. (b) Threatened employees that the Respondent would cease its warehouse operations and discharge them unless they agreed to accept the Respondent's contract propos- al. (c) Interrogated employees regarding the Union. 5. That about April 18, 1983, Fracolli and Rabeneck: (a) Interrogated employees regarding the Union. (b) Told employees the Respondent would engage in sham negotiations with the Union. I Admitted by the Respondent 2 Admitted by the Respondent 277 NLRB No. 29 HANDY ANDY ASSOCIATES (c) 'Told employees the Respondent would never sign a new contract with the Union. (d) Threatened to cease the Respondent's warehouse operations and discharge its employees unless they re- signed from the Union. (e) Promised employees fair treatment if they resigned from the Union. 6. That Rabeneck interrogated employees regarding the Union on several unknown dates in May 1983. 7. That about May 7, Rabeneck: (a) 'Told employees the Respondent would contract out its warehouse operation if the Union did not totally accept the Respondent's proposals. (b) Advised employees to seek employment elsewhere if the Union did not totally accept the Respondent's pro- posals. 8. That about May 28, 1983, the Respondent caused the termination of employee Jim Robbins because of his union interest and to discourage employees from engag- ing in protected activity, in violation of Section 8(a)(3). 9. That by certain of the conduct listed in paragraphs 4, 5, and 7 above, the Respondent bypassed the Union and dealt directly with its employees in violation of Sec- tion 8(a)(5). 10. That by the conduct listed in paragraphs 3, 4, 5, 6, and 7 above, Respondent has refused to bargain in good faith with the Union in violation of Section 8(a)(5). 11. That about August 6, 1983, the Respondent dis- charged its six unit employees and contracted out its warehouse and delivery operations in violation of Sec- tion 8(a)(3). The General Counsel seeks an order to reinstitute the Respondent's warehouse and delivery operations, to make whole all employees affected by its subcontracting out of the warehouse and delivery operations, and to bargain in good faith with the Union. The Respondent contends the decision to subcontract its warehouse and delivery operations was made on the basis of legitimate business considerations and prior to any of the occurrences alleged to constitute violations of the. Act; and that the credible evidence does not support the General Counsel's contention that the Section 7 rights of employees were violated, that Jim Robbins was constructively discharged, or that it violated Section 8(a)(5) in any manner. Thus, the principal issues to be resolved are: 1. Whether the Respondent' s agents interfered with, restrained, or coerced employees in the exercise of their Section 7 rights as alleged in paragraphs 4, 5, 6, and 7 above. 2. Whether the Respondent unlawfully caused the ter- mination of Jim Robbins. 21. Whether the Respondent unlawfully bypassed the Union and dealt directly with its employees. 4. Whether the Respondent unlawfully refused to fur- nish information concerning subcontracting to the Union. 5. Whether the Respondent unlawfully subcontracted the warehouse and delivery operations. 6. Whether the Respondent failed to bargain in good faith with the Union. 7. Whether the Respondent should be ordered to re- store its warehouse and delivery operations. 209 Credibility is a material issue, each of the parties con- tending its witnesses were the more credible . Indeed, there was considerable testimonial conflict, principally with respect to the statements attributed to Fracolli and Rabeneck which are alleged as violations of employees' Section 7 rights. There is also some conflict concerning negotiations. In deciding which of the conflicting ver- sions of events is more credible, I have given consider- ation to the demeanor of the witnesses while they were on the stand, their ability to recall past events and whether it was necessary to elicit facts through sugges- tive or leading questions, the positions occupied by the witnesses at the times relevant to the issues in the case and their possible interest in the outcome , the inherent probabilities in the accounts which they gave, and the weight of the evidence. I have also considered the fact the Respondent and the Union have had an amicable re- lationship throughout their years of dealing with each other. For reasons which will appear hereafter, I am convinced the testimony of the witnesses for each of the parties was credible in some respects and not credible in other respects. While I credit a witness in some, but not in all, respects, I do so upon the evidentiary rule that it is not uncommon "to believe some and not all" of the witness' testimony. NLRB v. Universal Camera Corp., 179 F.2d 749, 754 (2d Cir. 1950). IV. THE ALLEGED UNFAIR LABOR PRACTICES A. The Setting The Respondent is engaged in the operation of six retail appliance stores. This proceeding involves the sub- contracting out of the work performed at the warehouse and delivery service facility located on Roseville Road in the Sacramento, California area . At all times material herein, the Respondent has recognized the Union as the representative of its warehouse and delivery employees- truckdrivers, helpers, and warehousemen-working in and out of the Roseville Road facility. Collective-bar- gaining agreements covering those employees have been in existence for the last 10 or 12 years, the most recent of which was effective from April 1, 1981, to April 1, 1983. For an undisclosed number of years, the collective-bar- gaining agreement has contained the following provision: SECTION 22. SUBCONTRACTING The Employer may, sixty (60) days prior, notify the Union of his desire to subcontract out work covered by this Agreement. In the event the parties hereto are unable to agree on the severance of em- ployees whose work has been contracted out, their dispute shall be subject to the Grievance Procedure in Section 24 hereof. In the event the dispute goes to arbitration, the Employer agrees not to contract out said work until an arbitrator's award is re- ceived. Section 24 of the agreement covers a grievance proce- dure and provides that disputes concerning the meaning and/or interpretation of the agreement shall be submitted to a board of adjustment and, upon its failure to agree, to 210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD an arbitrator who shall hold a hearing and issue a written decision. It further provides: The arbitrator shall have no power to add to, sub- tract from, or otherwise change or modify this Agreement. The arbitrator's sole province shall be to determine the meaning of the specific language of this Agreement. Such decision will be binding upon all parties when notified... . Pending the de- cision of any question referred to the Board, work shall be continued in accordance with the provi- sions of this contract. The record shows that Gary Fracolli became the Re- spondent's general manager in the fall of 1981, at a time when the Company was experiencing economic prob- lems, having lost money in 4 of the last 5 years Fracolli determined that overhead was high, sales were not what they should be, and morale was low. Accordingly, he held a meeting with all employees, including warehouse and delivery employees, wherein he told them that the Company was not doing well and that he was going to reorganize it-"turn the Company around" and make it more efficient and profitable. The accounting department was reduced by six to eight people, and steps were taken to correct some of the problems in the warehouse and delivery operations, which included late deliveries, em- ployee morale, consumption of alcoholic beverages, in- ventory shrinkage due to pilfering, and low productivity. Certain policies were reaffirmed and reestablished in late December 1981 covering consumption of alcoholic bev- erages (G.C. Exh. 13), warehouse security (G.C. Exh. 14), and holidays (G.C. Exh. 15). In late March 1982, the board of directors directed a study be made by Rabeneck and Financial Secretary Saxton on ways to reduce ware- house and delivery costs. Accordingly, Rabeneck started exploring alternatives which would result in lower costs, and on April 12, 1982, received a proposal from Capital Delivery Systems to assume the "Home Delivery and Shuttle Operations emanating from your Sacramento warehouse." The Union was informed of the fact that warehouse and delivery costs were too high, and on April 22, 1982, Fracolli and Rabeneck met with Union Business Representative Jim Dyer, explained the prob- lems, and asked for economic relief. Several suggestions were made and Dyer stated he would talk to the em- ployees to see if they had any suggestions. Representa- tives of the Respondent and the Union met again on April 30, 1982, at which time Dyer made three sugges- tions: (1) the Respondent institute a 32-hour workweek; (2) work in excess of 8 hours be paid at straight time; and (3) employees perform maintenance and cleaning work when there was not enough warehouse and deliv- ery work to keep them busy. The Respondent felt the 32-hour workweek was not feasible; that no overtime was worked and the Union's proposal to forgo overtime pay was probably illegal; and that the employees re- ceived too high a wage to be used for maintenance and cleanup work. The parties met again on May 17, 1982, at which time the Respondent asked that the Union consid- er rescinding the contractual wage increase that had become effective April 1, 1982, rescind the "floating" holidays, and reduce call-in pay from 8 to 4 hours. Dyer agreed to take this proposal back to the men. At a May 28, 1982 board of directors meeting, Rabeneck reported "that he was working to keep warehouse expenses as low as possible and was looking for additional ways to reduce costs including alternate delivery methods and charges" to customers for deliveries. Union and compa- ny representatives met again on June 7 and 10, 1982, with no solution reached. On August 16, 1982, Rabeneck reported to the board of directors the results of the "in depth study of costs" of the warehouse and delivery operations which he and Saxton had prepared. The study compared the Respond- ent's costs with two alternate proposals from Capital De- livery, and disclosed that the delivery operations could be performed by an independent company at about one- half what it was costing the Respondent under the present system. B. Decision to Subcontract At its January 4, 19833 meeting, the Respondent's board of directors decided that "all work now done by Warehouse and Delivery personnel will be subcontracted and notice will be sent to the Teamsters according to Section 22 of the Collective Bargaining Agreement." Thereafter, Rabeneck contacted Elite Trucking and War- ehousing Systems, and was contacted by Almas Truck- ing Company, regarding subcontracting. Although Almas failed to submit a proposal, Elite submitted a pro- posal dated March 7. By letter dated February 22, Sunny Lee, the Respond- ent's attorney, advised the Union's secretary-treasurer as follows: Dear Mr. Bonilla: You are hereby advised on behalf of Handy Andy Associates, Inc., in accordance with Section 22 of said company's Collective Bargaining Agreement with your Union, that said company intends to con- tract out the delivery and warehouse work current- ly being performed at the warehouse located at 4320 Roseville Road, North Highlands, Calif. It is the company's intention to contract this work out as of April 23, 1983, therefore it is our desire to meet with you or your representative as soon as possible in order that this matter may be finalized by that date. I will call your office on February 25, 1983 to arrange for a meeting on the severance issue. On March 2, the first of a series of meetings was held between the Respondent's and the Union's representa- tives. While the Respondent sought to discuss the sever- ance terms of the affected warehouse and delivery em- ployees, Dyer declined to discuss severance, insisting in- stead on negotiating a new agreement which would eliminate the right to subcontract. Lee informed Dyer that if the Union refused to discuss severance, the Re- spondent would submit the issue to a board of adjust- ment and file a lawsuit to compel arbitration. Dyer asked 8 All dates hereafter are in 1983 unless otherwise stated. HANDY ANDY ASSOCIATES for the name of the company to whom the Respondent was going to subcontract, and was informed that no de- cision had been made. On March 3, Fracolli informed the warehouse and de- livery employees of the decision to subcontract the ware- house and delivery operations. By letter dated March 4 to Dyer, Lee requested a board of adjustment be con- vened pursuant to sections 22 and 24 of the collective- bargaining agreement to resolve the issue of severance. The parties met again on March 7. Lee, Fracolli and Rabeneck were present for the Respondent The Union was represented by Dyer and Lee Ishmel, with unit em- ployees Larry Lavagnino and Bill Atkins also present. Lee took the position that the meeting was only to dis- cuss severance as that term is used in section 22 of the contract Dyer responded that the Union's attorney had advised him not to negotiate severance, and that he' wanted to negotiate a new contract which would prohib- it subcontracting. Lee declined to negotiate a new con- tract at that point because the Respondent would not employ any unit employees after the unit work was sub- contracted.4 On March 14, the Union filed a charge in Case 20- CA-17786 alleging that the Respondent had refused to bargain over the terms of a new collective-bargaining agreement. On the following day, March 15, Lee wrote Dyer "demanding" that the Union proceed to arbitration over the issue of severance. Pursuant to a petition filed by the Respondent in the superior court, on March 15 an "Order to Show Cause" was issued ordering the Union to show cause why the court should not issue an order compelling it to submit the outstanding dispute over sev- erance to the arbitrator.5 On March 22, Dyer wrote Lee outlining a number of issues which he felt would "have to be discussed and re- lined prior to submission of the case to a Board of Arbi- tration." He concluded with the suggestion that they meet to arrange the format of negotiating a new contract "while every attempt is made to solve the problems of subcontracting bargaining unit work." On March 31, the Union's attorney wrote Lee requesting: [A]ll information and copies of all documents relat- ing to this subcontracting dispute, including but not limited to the following: 1) The name, address and telephone number of the company to which Handy Andy intends to sub- contract the work; 2) All documents, or other information, evidenc- ing or relating to the subcontracting agreement, if 4 I do not credit Dyer's testimony, elicited in response to a leading question, that he presented the Respondent with a written contract pro- posal on March 7 (G C Exh 4) The testimony and notes taken during negotiations by both Lee and Fracolli clearly establish that the Union's first written proposal was presented during the April 13 meeting Fur- ther, the suggestion he made to Lee in his March 22 letter (G C. Exh 5) "that we meet to arrange the format of negotiating the agreement while every attempt is made to solve the problems of subcontracting bargaining unit work," presupposes negotiations on a new contract had not yet begun s On May 18, the court granted the Respondent's "Motion to Compel Arbitration" and ordered that the matter be submitted to Arbitrator John Kagel on June 2 211 any, including the agreement itself or any docu- ments evidencing the specific terms of any agree- ment to subcontract bargaining unit work; 3) All documents or other information related to or evidencing the subcontractor's plans for the work to be subcontracted, and for the employees, inventory, and business of Handy Andy, 4) All information known to or in the possession of Handy Andy regarding the subcontractor and its employees, if any, and; 5) A breakdown, by employee, of all pay and benefits owed to each employee in the unit, includ- ing: a. Wages; b. Unused sick leave; c. Unused vacation and holiday benefits; d. Pension payments; e. Health and Welfare payments; and f. All other benefits not paid. While the information requested in item 5 above was fur- nished by the Respondent,6 the information requested in items 1 through 4 was not since the Respondent had not yet entered into a subcontracting agreement or selected a subcontractor. C. Negotiations Pending Arbitrator's Decision On April 5, the Union and the Respondent entered into the following agreement: 1. The Union hereby agrees to withdraw the re- fusal to bargain charge. 2. The Union and the Company hereby agree to meet and bargain over the terms and conditions of a new contract up until the time an arbitrator renders a decision on the severance of employees pursuant to Section 22 of the Collective Bargaining Agree- ment in effect at the time the Employer sent the February 23, 1983, Notice to the Union of its deci- sion to subcontract the warehouse work. 3. If no new agreement is reached at the time the Arbitration Decision is rendered, the Employer's duty to bargain with the Union ceases. Withdrawal of the unfair labor practice charge was ap- proved by the Regional Director on April 21. Pursuant to the April 5 agreement, the Respondent and Union met on April 13. While Dyer testified that he presented the Respondent with a "revised proposal," the purported "revised proposal" was not produced at the hearing. Rather, the credited evidence shows that the Union's initial contract (G.C. Exh. 4) was presented and discussed on this date.7 In effect, the Union proposed certain cost item increases and a provision prohibiting subcontracting, all of which the Respondent opposed The Respondent also made several proposals, but no agreements were reached. s R Exh 11 See fn 4 212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD About April 15, Fracolli went to the Roseville Road warehouse because, according to Fracolli, he wanted to find out if there was any excess warehouse space avail- able for leasing to the company that eventually would take over the warehouse and delivery work. The General Counsel contends he went there for the purpose of committing the unfair labor practices alleged in paragraph 10 of the amended complaint. There is con- siderable` testimonial conflict between the Fracolli and Andrews versions of what transpired. Fracolli testified that he called the warehouse before going to be sure An- drews would be there. Andrews denied he knew Fracolli was coming prior to his arrival. According to Andrews, Fracolli walked in, said hello, and walked to the other side of the warehouse; then Andrews drove his forklift over to,Fracolli: and I asked him if he needed any help and he said no. Then he asked me if we were alone. And I said yes. . . . He made a statement why-he couldn't understand why the men couldn't get out of the union to keep their jobs. I said, well, they were afraid of Ray Rabaneck [sic] and that they didn't want to lose the union benefits. He said that he still couldn't understand why they didn't want to get out of the union to keep their jobs. And he made reference to how good the company was doing and how everything was going and that he just couldn't understand why they couldn't get out of the union to keep their jobs. He said you only have three choices. "You either stay in the union and take the contract they give you which won't mean anything. Or you'll get out of the union and keep your job. Or we'll sublease and you won't have a job." And I told him that it didn't matter to me, that I would get out to keep my job but I didn't think the rest of the men would. And he said that he still couldn't understand them jeopardizing their future. And I asked him if I could tell the men what he had said, and he said "Well, you'll have to change the story because I'll swear that I never had this conversation with you." And at that, he left. Andrews testified that Fracolli mentioned each of the other employees by name and wondered what they would do. Fracolli denied he asked Andrews if they were alone in the warehouse since he knew they were; and he spe- cifically denied the other statements attributed to him by Andrews, including Andrews' assertion that Fracolli stated he would deny having had such a conversation. He testified that Andrews told him that he had called Rabeneck concerning decertification and Rabeneck had stated he could not discuss it with him but gave him a phone number or address to obtain information;" that s Andrews placed this conversation with Rabeneck as several weeks later Rabeneck recalled the conversation but not the month it occurred Andrews felt the men should decertify and expressed un- derstanding when Fracolli responded he could not dis- cuss that subject; that Andrews was angry about losing his job but that the Union and other employees apparent- ly did not take the subcontracting issue seriously because "they think that it's a ploy just to negotiate a better con- tract"; that Andrews thought the Company was serious and intended to subcontract, and proceeded to list the shortcomings of his fellow workers which he felt was the reason the Respondent was going to subcontract; that Andrews felt the Union had not done them any good and the men should decertify and get out of the Union. Fracolli went on to testify as follows: [H]e was upset because he felt he was going to be losing his job, that he had worked hard for this job, and he says, "If we don't sign this new contract, you're going to subcontract the warehouse and de- livery work, is that right?" And I said, "Yes, that is true." And that was, you know, our intent, and that's what we had told the union all the time, that was what was on the table, is that you know, because during this time we were in negotiations of a con- tract, and we said, "If you don't sign this contract, this is a proposal and we're talking about it, we're going to subcontract the warehouse and delivery operation." And that was our intent to do it. So, he restated that to me and I said, "Yes, that's correct." And he says, "Well, then we can either subcontract-we can either sign this contract, or you're going to subcontract, and the other only choice we've got is they can vote the union out and we can see what happens from there." My response was, "That's about the way it seems, Bob." Bob was very vocal that day and he was very upset, and the only thing that I told Bob Andrews that day is that I would not discuss with anyone else the conversation that we had. Fracolli also testified he told Andrews that he won- dered what the older workers would do when the Com- pany subcontracted. Although I am not convinced that either Andrews' or Fracolli's testimony is totally accurate, I believe that An- drews' is the more accurate. I do not credit Fracolli's testimony that Andrews made the statement that the em- ployees were confronted with three options: (1) subcon- tracting, (2) "sign this contract," or (3) "vote the union out and we can see what happens from there." Instead, I credit Andrews' testimony that Fracolli stated the Com- pany was doing wells and he could not understand why 9 Although the Respondent established that its warehouse and delivery costs were "excessive," the record also indicates that its overall oper- ations were doing well. See R. Exhs 20, 22, and'24, minutes of board of directors' meetings wherein the officers were voted bonuses. HANDY ANDY ASSOCIATES the men could not get out of the Union to keep their jobs; 10 and that the employees had three choices: (1) "stay in the union and take the contract they give you which won't mean anything," (2) get out of the union and keep your job, or (3) the Company will subcontract the unit work and the men will be out of a job . In this regard, it is noted that on April 15, the Respondent had not yet given the Union a contract proposal . Therefore, Andrews would not have known about it nor stated that an option was to accept the Respondent 's bargaining proposal as Fracolli seems to suggest . On the other hand, it is more likely that Fracollli, the Respondent's president and general manager, was aware of the proposal the Re- spondent intended to present to the Union on April 18 and made reference to it as one which "won't mean any- thing," as Andrews testified, because it would contain a subcontracting clause which the Respondent would exer- cise even if a collective-bargaining agreement was reached in the interim . This is the position the Respond- ent took with the Union after it made its first contract proposal on April 18.11 Further, I do not believe, as Fra- colli testified, that Andrews brought up the subject of decertification . According to Andrews, whom I credit, his first knowledge of decertification came from Raben- eck several weeks later in response to his own query as to how to get out of the Union, the seed for which ques- tion was obviously planted by Fracolli on April 15. I am further convinced that Andrews' critical remarks regard- ing his fellow employees were made on April 18 and not on April 15 as Fracolli testified . In sum, I find Andrews to be the more credible of the two witnesses . According- ly, it is found that by telling Andrews the employees had the choice of getting out of the Union and keeping their jobs or else the Company would subcontract and they would be out of jobs, the Respondent engaged in the un- lawful conduct alleged in paragraphs 10(a) and (b) of the amended complaint, thereby violating Section 8(a)(1) of the Act. The next bargaining session on April 18 was apparent- ly attended by several unit employees , including An- drews, who were concerned about what was going on in negotiations . Lee informed them the Respondent had given the Union notice that it was going to subcontract; that the Respondent had gone to court to compel arbitra- tion on the severance issue ; that although the contract expired on April 1, the Respondent had agreed to contin- ue the contract and negotiate until the arbitrator issued a decision, which was expected in June ; and that negotia- tions and the severance issue were two separate things. The Respondent presented the Union with a written pro- posal, General Counsel's Exhibit 7, which the parties proceeded to discuss . At the conclusion of the meeting, Fracolli and Rabeneck asked Andrews if he wanted to go for a beer. Andrews, who had already arranged to meet Robbins in a nearby pizza parlor, replied in the af- 10 Considered in context, this remark was clearly an inquiry that called for, and obtained, a response, and constituted unlawful interrogation as alleged in par 10(c) of the amended complaint Asociacion Hospital del Maestro, 272 NLRB 853 ( 1984). 11 The April 18 contract proposal continued the sec. 22 right to sub- contract 213 firmative, so the three went to the pizza parlor and joined Robbins, who was already drinking beer. Again, the testimony of the General Counsel's and the Respondent's witnesses is conflicting. Andrews testified that Rabeneck asked what he thought about the negotia- tions 12 and he responded he did not think an agreement would be reached;13 that Fracolli asked if he thought the men would "get out of the Union," and he replied they would not because they were afraid of Rabeneck and they wanted to keep their union benefits; 14 that Fra- colli stated he could not understand why the men would take a chance of losing their jobs;'S that the two em- ployees stated they would "get out of the Union" and work for $10 an hour, but did not think the other em- ployees would; that Fracolli apparently criticized him for being unable to persuade the other employees to get out of the Union in order to keep their jabs;16 that Fracolli said, "Can't you see that there won't be a contract? We'll never agree to a contract. We'll wait for the arbitrator. And then we'll just sublease it out" and "if the men would get out that there wouldn't be a fire list or a hit list . . . that nobody would be fired, that everybody would be the same";17 that Andrews responded there was not much he could do to change the other employ- ees' minds; and that Fracolli said that if the men would not get out of the Union "he would sublease and he wouldn't back down"; and "he would drag it out, that they would just keep changing the proposals. They would never agree on a contract. They would just wait. Everytime the union would come in and accept some- thing, they would turn around and change it."13 On cross-examination, Andrews admitted that he made dis- paraging remarks about the work habits of the other em- ployees because he felt that they needed to be repri- manded or removed if they weren't doing the proper job; that they were "taking too long on deliveries" and "were abusing the time"; that they were lazy and indif- ferent; that their interest was not with the Company; and that they would never change, and "you can fire them all."19 According to Andrews, Rabeneck called him sev- eral times after that and asked "if the boys had changed their minds yet. If they were going to get out," to which he responded in the negative.20 The record makes it clear that Rabeneck asked An- drews and Robbins what they thought of the negotia- tions which had taken place earlier that evening, and that the Respondent's agents looked upon those two as employees with whom they could carry on a confidential 12 Rabeneck admitted asking this question 12 Rabeneck testified Andrews responded that Dyer would not allow any of the other employees to attend the meeting which was definitely different from the information he had been getting. 14 Denied by Fracolli and Rabeneck. 11 Both Fracolli and Robbins denied the statement. 16 Denied by Fracolli. 17 Denied by Fracolli and Rabeneck. 1s The foregoing was corroborated in substantial part by Robbins, but denied by Fracolli and Rabeneck. 19 Robbins did not recall who made the derogatory remarks about the other employees, but corroborated Andrews' testimony in substantial part 20 Rabeneck denied asking Andrews or anyone else if the employees had changed their minds about getting out of the Union. 214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conversation. Andrews impressed me as a witness intent on giving accurate testimony, and I do not believe he fabricated this conversation which reiterated and expand- ed on the themes Fracolli had expressed 3 days earlier in the warehouse. The Respondent's argument that it had nothing to gain by making the statements attributed to it by Andrews and Robbins because it had already made a definitive decision in January to subcontract on the basis of cost, efficiency, and versatility is convincing. Thus, al- though I am convinced that Fracolli and Rabeneck made the statements attributed to them, I am convinced by the overall evidence that the Respondent did not use dilato- ry tactics or engage in sham bargaining as alleged. Ac- cordingly, I find that the General Counsel has proven the 8(a)(1) allegations contained in paragraph 11 of the amended complaint. I also credit Andrews' testimony that Rabeneck called him several times later and ques- tioned him as to whether the men were going to get out of the Union as alleged in paragraph 12. The next bargaining session was on April 25, for which the Union had prepared a document21 summariz- ing the parties' positions on each bargaining issue. The parties reviewed and discussed the issues and reached agreement on some. According to Dyer, he asked Re- spondent's representatives "if they had any information at this point . . . on how [sic] they were going to sub- contract the work to, And they stated that it was only two or three companies that they were talking to but nothing specific. . . . I asked as to what the proposal was, the cost of their subcontractor's proposal, so that we could be competitive in our proposal." According to Dyer, he received no response. On an undisclosed date in May, Fracolli and Rabeneck met Andrews and Robbins in a pizza parlor in Carmi- chael, California. Sometime following the March 3 notice to employees of the Respondent's intent to sub- contract, Andrews had informed Fracolli and Rabeneck that he and Robbins would like to become the subcon- tractors. Andrews was informed that they would be con- sidered and that the request would have to be submitted in writing. By letter dated May 7, the request was re- duced to writing.22 The pizza parlor meeting was in re- sponse to that letter, and was initiated by Fracolli. The two employees were informed that they had been elimi- nated from consideration as subcontractors for the ware- house and delivery operations for several reasons, includ- ing the fact they did not have the managerial expertise, equipment, or financing to start such a business.23 Ac- cording to Andrews, Fracolli stated that the Respondent was going to go through with the arbitration and sub- contract the work; that none of the employees would be hired by the subcontractor; 24 and that if the men were willing to give up their benefits he could not understand why they would not get out of the Union.2 s 21 R Exh 47, which was used as a guide throughout the rest of the negotiations 22 R Exh 9 2a Admitted in substantial part by Andrews on cross-examination za Corroborated in substantial part by Robbins. It is noted, however, that a subcontractor had not yet been selected 25 Denied by Fracolli and Rabeneck The parties engaged in lengthy negotiations on both May 16 and 26. Discussions were had on a variety of items and agreement made on a few. The Respondent continued to push for financial relief, better productivity, and a subcontracting clause, which the Union opposed. Sometime in the middle of May, Robbins told Raben- eck that he was considering another job offer and asked whether he should take it. According to Robbins, Raben- eck told him "that if the union didn't take the company's proposal that they were just going to sublease and .. . he'd take the other offer."26 Rabeneck testified he stated, "Well, Jim, we're going to subcontract and if I was you, in your position, being a family person, I would take it." It was under these circumstances that Robbins quit his job with the Respondent and accepted employment else- where. Although Dyer testified the next bargaining session took place on June 9, the record shows that it occurred on May 31 and that the parties again discussed the issue of severance and terms and conditions of employment for inclusion in a successor collective- bargaining agree- ment. With respect to subcontracting, the parties also discussed severance pay, retention of seniority in the event the Respondent discontinued subcontracting, health and welfare, and the length of time the employees would continue working. On June 1, the parties met again and the Union advised the Respondent that it was not willing to accept the Respondent's severance propos- al and that the arbitration should proceed as scheduled. On June 2, the severance issue was presented to Arbitra- tor John Kagel. On June 9, the parties met again to negotiate over the terms and conditions of a successor collective-bargaining agreement, at which time the Respondent submitted a re- vised proposal. The Respondent again proposed the in- clusion of a subcontracting clause, which the Union re- jected. Dyer also produced a Dun and Bradstreet report showing the Respondent was losing money. The next meeting to negotiate over the terms of a suc- cessor agreement was on June 27. During the meeting Dyer presented the Respondent with a revised proposal containing, inter alia, two options with respect to wages, health and welfare, pensions, and subcontracting.27 The proposals were explained and discussed, Dyer purported- ly stating that it was not the Union's final proposal but that it had gone about as far as it could without knowing who the subcontractor was going to be and what it would cost. The Respondent's witnesses admit that Dyer asked for the name of the subcontractor, which had not yet been selected, but deny he ever requested any cost information on the ground the Union wanted to be com- petitive with the subcontractor. On the same day, Lee wrote Dyer the following letter: Re: Re-Cap of Negotiations, June 27, 1983 (Revised Employer Proposal of June 9, 1983) Dear Jim: 25 Corroborated by Andrews 27 G.C Exh 10 HANDY ANDY ASSOCIATES I apologize for the rather short meeting today and any surrounding confusion of the company 's posi- tion in regard to your proposal to us and our pro- posal of June 9, 1983. Please be advised that I think we have the following issues still open: TERM OF AGREEMENT: We're at one year; you're at two years. Term is still open. Shouldn't be a problem. WAGES: Our 6/9/8 3 proposal, (g) is still open and based on a one-year term . We would not pro- pose any increase or any decrease in wages. In re- viewing your Plan A on wages, of course, the com- pany was in agreement on your proposed decrease, however, we have not proposed a decrease, nor do we propose one now. You explained that it was either option A or B on a total package. The wages issue is still open. HOLIDAYS: We are still proposing to eliminate the two holidays during the life of this agreement to be consistent with the office. The proposal on changing time and one-half to straight time is still on the table. VACATIONS: We accepted your proposal. SENIORITY : We are considering accepting your two-seniority list proposal with your language and our language at the top of page 2 of our 6/9/83 proposal. Further discussion may be necessary. SICK LEA VE: We will drop our proposal on the reduced bank . Further clarification may be neces- sary on 12(e), as evidenced by the discussion as to meaning between you and Ray. HEALTH & WELFARE AND PENSION: Our position on Health & Welfare and Pension is con- sistent with the overall operation and will be as pro- posed on the 6/9/83 proposal. SUBCONTRACTING: Our position on subcon- tracting will be as proposed on 6/9/83. LETTER OF UNDERSTANDING: As proposed 6/9/83. I think you will agree that the Employer has made substantial movement on the open issues of Vaca- tion and Seniority. If you feel it is appropriate to have another meet- ing, we will do so. Dyer claimed another bargaining session took place about a week later, at which time Lee stated the Re- spondent would not accept either the Union's plan A or plan B, and that the Company intended to subcontract the unit work. The Respondent's witnesses did not recall any bargaining meetings subsequent to June 27, nor were any minutes of such a meeting produced. I conclude Dyer was mistaken and that June 27 was the last negotia- tion meeting. D. The Arbitration Pursuant to the Respondent's petition and the superior court's May 18 order, the matter of severance was heard by Arbitrator John Kagel on June 2. The issue presented to the arbitrator was "[w]hat should be the severance 215 terms, if any, for the Employees of Handy Andy Associ- ates affected by subcontracting." The arbitrator's "Opin- ion and Decision" states that the parties stipulated, inter alia, that the Respondent had the right under the con- tract to subcontract out the warehouse and delivery op- erations; that Robbins had taken another job and quit ef- fective May 18; that the Respondent had not yet subcon- tracted the work but intended to "although that may not come to pass," but if it did, it would no longer employ anyone in the bargaining unit; and that "[t]he decision in this case will be binding with respect to any severance as the result of subcontracting noticed on February 22 even though the Agreement . . . has expired." On July 26, Arbitrator Kagel issued his Opinion and Decision,28 awarding the employees, excluding Robbins, 13 weeks of straight time pay and health and welfare benefits cover- age for each employee and his dependents. On July 22, the Respondent received a second propos- al from Elite Trucking and Warehousing Systems, the first having been dated March 7. On August 3, the Re- spondent signed a "Warehouse and Delivery Agree- ment," effective August 9, with Car-del, Inc., d/b/a AABCO, Inc. covering all warehouse and delivery work. On August 8, Andrews, the last of the Respond- ent's warehouse and delivery employees, was terminated. E. The Refusal to Bargain Paragraphs 14, 15, and 16 of the amended complaint allege that since March 22 the Union has requested that the Respondent furnish information regarding its inten- tion to subcontract out the unit work, which information is necessary to the performance of its function as the bar- gaining representative of the unit employees, and that since March 25 the Respondent has failed and refused to furnish the information. As previously noted, on March 31 the Union's attorney, in writing, requested "all infor- mation and copies of all documents relating to this sub- contracting dispute, including, but not limited to" the name of the company to whom the work was to be sub- contracted, the subcontracting agreement, the subcon- tractor's plans for the work, and all information regard- ing the subcontractor and its employees. Up to this point, the Respondent had received an April 12, 1982 proposal from Capital Delivery Service and a March 7, 1983 pro- posal from Elite Trucking and Warehousing Systems, but had not entered into a subcontracting agreement or se- lected a subcontractor. Hence, the information requested did not exist, nor was the Respondent obligated to fur- nish that information because of Section 22 of the agree- ment. See, e.g., Mid-West Sanitary Service, 272 NLRB 624 (1984). Dyer testified that at the April 18 negotiating meeting "and at most other meetings" he asked for the name of the company to whom the work was going to be subcontracted and the terms of the agreement, but that he received no response. He testified that on April 25 he again asked for the name of the subcontractor and was told that two or three were under consideration, and that "I asked as to what the proposal was, the cost of their subcontracting proposal, so that we could be com- 28 Attached hereto as Appendix A. 216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD petitive in our proposal," but again there was no re- sponse. He testified that on June 27, "We told Sunny Lee and the two representatives from the company that this . . . was about as far as we could go without really knowing the cost of the subcontractor's proposal so that we could be competitive, if we needed to be so. Again, we asked for that information. Who was going to be the subcontractor and what was the cost." Fracolli and Ra- beneck both specifically denied that Dyer ever asked for any information regarding the cost of subcontracting so that the Union could be competitive. I do not credit Dyer, whose testimony was susceptible to corroboration but was not corroborated. His recall of the negotiations was poor and a substantial portion of his testimony was elicited through suggestive and leading questions. I be- lieve that this portion of his testimony was fabricated., Accordingly, I credit the denials of the Respondent's witnesses that the cost information was ever requested. I further conclude that the subcontractor's proposals were not encompassed by the March 22 letter from Dyer or the March 31 letter from the Union's attorney requesting certain information. Accordingly, I recommend the dis- missal of paragraph 16 of the amended complaint. The amended complaint alleges that by engaging in the conduct alleged in paragraphs 10, 11, 12, and 13 the Respondent refused to bargain in good faith. Conceding that section 22 of the contract allowed the Respondent to subcontract the unit work, the General Counsel argues that the Respondent waived that right by entering into the non-Board settlement of the unfair labor practice charge in Case 20-CA-17786 whereby it agreed "to meet and bargain over the terms and conditions of a new con- tract up until the time an arbitrator renders a decision on the severance of employees pursuant to Section 22" of the contract. According to the General Counsel, the Re- spondent's bargaining in good faith was a condition precedent to it having the right to subcontract the unit work once the arbitrator issued his decision.29 The Gen- eral Counsel argues that "the statements by Fracolli to the unit employees establish that Respondent was not seeking to enter into an agreement but rather to force the employees to withdraw from the Union so that Respond- ent could operate the warehouse on a non-union basis." He also argues that "Fracolli's own testimony establishes that Respondent was engaged in a course of sham bar- gaining" in that he "testified that even if the Union had totally agreed to Respondent's bargaining proposal, which required immense concessions by the Union, Re- spondent would have signed a contract with the Union and then proceeded to subcontract the warehouse and delivery work anyway" pursuant to section 22, which the Respondent insisted be included in any subsequent agreement. 30 The Respondent points out that the decision to sub- contract was made prior to any allegations of antiunion conduct; and that Dyer admitted neither Fracolli nor Ra- beneck had ever said anything even hinting of antiunion 29 The Union stipulated before the arbitrator that the Respondent had the right under sec. 22 to subcontract 30 The Union was equally adamant that sec. 22 be excluded from any subsequent agreement animus and had described their 12-year relationship as "very good." It argues that the uncontradicted evidence shows that the decision to subcontract "was motivated by its desire to reduce its excessive costs and eliminate its economic problems, and to supply a proficient service to its customers." It is argued that the General Counsel failed to produce any evidence that anti union animus contributed to the Respondent's January 4 decision sub- contract. It is also claimed that "a review of the negotia- tions including the concessions and proposals made as well as the agreements reached therein, demonstrates that the Respondent approached negotiations with an `open mind' and a `sincere desire' to reach an agreement, albeit an agreement which contained a clause protecting the Respondent's right to subcontract its warehouse and delivery operations." Respondent further points out that under section 22 it did not have a duty to bargain over the decision to subcontract, and that it was pursuant to that section it furnished the Union with information rele- vant to the effects of the decision. An anaylsis begins with the undisputed evidence that in the fall of 1981, when Fracolli became the Respond- ent's general manager, the Respondent was experiencing economic problems, with particular problems existing in the warehouse and delivery operations. Corrective meas- ures were taken with respect to some of the problems, and on March 30, 1982, the board of directors directed that a study be made on ways to reduce costs. A propos- al to assume the warehouse and delivery operations was received from Capital Delivery Services. Meetings were held with the Union which did not prove fruitful. A rela- tive cost analysis disclosed that the warehouse and deliv- ery operations could be performed by an independent company at about one-half what it was costing the Re- spondent using its own employees. On January 4, 1983, the Respondent's board of directors, pursuant to section 22 of the collective-bargaining agreement, decided to subcontract the warehouse and delivery operations. Both the Union and the affected employees were notified. Upon the Union's refusal to discuss the subject of sever- ance benefits to be paid the affected employees, the Re- spondent invoked the contractual grievance procedure. Due to the Union's reluctance to take up the issue, the Respondent obtained a state court order compelling arbi- tration of the severance issue. In mid-March, the Union filed an unfair labor practice charge with the Board al- leging the Respondent was refusing to bargain over a new contract. On April 5, the Union and the Respondent entered into an agreement providing for withdrawal of the charge and that the Respondent would bargain over the terms and conditions of a new contract "up until the time an arbitrator renders a decision on severance," at which time "the Employer's duty to bargain with the Union ceases" in the event an agreement was not reached. Pursuant to the court's order, the issue of sever- ance was heard by Arbitrator Kagel on June 2. Section 24 of the collective-bargaining agreement provides that an arbitrator's decision is binding on all parties. At the arbitration, the parties stipulated that the Respondent had the right under the collective-bargaining agreement to subcontract and that the arbitrator's decision was binding HANDY ANDY ASSOCIATES on all of the parties. On July 26, the arbitrator issued his Opinion and Decision awarding the employees severance pay and benefits. In the meantime, the Respondent met and negotiated with the Union over the terms and condi- tions of a new contract. The evidence discloses that agreement was made on a number of issues, but that the parties remained apart on several issues. While I have found that Fracolli and Rabeneck engaged in unlawful conduct in an effort to induce employees to forgo union representation, the evidence does not disclose that the Respondent's conduct amounted to a refusal to bargain with the Union. The decision to subcontract was made prior to any unlawful conduct. The overall evidence es- tablishes that the decision to subcontract was made for legitimate economic reasons and was permitted by the collective-bargaining agreement. The Union conceded those points at the arbitration and both parties agreed to be bound by the arbitrator's decision. It is clear that the arbitration was intended to resolve the parties' contrac- tual dispute over subcontracting. There has been no con- tention that the arbitration was anything but fair and reg- ular. In these circumstances I reject the General Coun- sel's argument that the Respondent waived the contrac- tual right to subcontract by entering into the non-Board settlement of the unfair labor practice charge in Case 20- CA-17786. Rather, by reason of section 22 of the collec- tive-bargaining agreement, the Union waived its right to bargain over the decision to subcontract. See, e.g., Mid- West Sanitary Service, supra. Furthermore, the Board has often found discharges pursuant to an employer's deci- sion to subcontract work not to be violative of Section 8(a)(3) when, as here, the employer has demonstrated that the sole basis for its decision was predicated on eco- nomic or other legitimate business considerations. P. W Supermarkets, 269 NLRB 839, 840 (1984). Further, the evidence does not establish that the Respondent bypassed the Union and dealt directly with employees as alleged in paragraph 17, nor does it establish that the Respond- ent unlawfully caused the termination of Robbins as al- leged in paragraph 20. Accordingly, I recommend dis- missal of paragraphs 17, 18, 19, and 20 of the amended complaint and decline to recommend that the Respond- ent reinstitute its warehouse and delivery operations. To summarize, the Respondent violated Section 8(a)(1) of the Act as alleged in paragraphs 10, 11, 12, and 13 of the amended complaint, but did not engage in any other unlawful conduct. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By interrogating employees regarding their union membership and sympathies :; by telling employees they have the choice of getting out of the Union or the Re- spondent will drag out negotiations until after the arbi- trator issued a decision and then subcontract unit work and they will lose their jobs; and by telling employees they will not be fired if they get out of the Union, the Respondent violated Section 8(a)(1) of the Act. 217 4. The above-described unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 5. The Respondent has not committed any other unfair labor practices alleged in the amended complaint. THE REMEDY Having found the Respondent has engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed31 ORDER The Respondent, Handy Andy Associates, Inc., Sacra- mento, California, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Interrogating employees regarding their union membership and sympathies; telling employees they have the choice of getting out of the Union or the Respondent will drag out negotiations and then subcontract their work and they will lose their jobs; telling employees they will not be fired if they get out of the Union. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Post at its premises in Sacramento and North High- lands, California, copies of the attached notice marked "Appendix B."a2 Copies of the notice, on forms provid- ed by the Regional Director for Region 20, 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 conspic- uous places including all places where notices to employ- ees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. IT IS FURTHER ORDERED that the complaint be dis- missed insofar as it alleges violations of the Act not spe- cifically found herein. 31 if no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations , the findings, conclusions, and recommended 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 pur- poses 32 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 Nation- al 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." 218 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX A ISSUE: What should be the severance terms, if any, for the Employees of Handy Andy Associates affected by sub- contracting? AGREEMENT PROVISIONS: "SECTION 22. SUBCONTRACTING "The Employer may, sixty (60) days prior, notify the Union of his desire to subcontract out work covered by this Agreement . In the event the parties hereto are unable to agree on the severance of em- ployees whose work has been contracted out, their dispute shall be subject to the Grievance Procedure in Section 24 hereof. In the event the dispute goes to arbitration, the Employer agrees not to contract out said work until an arbitrator 's award is re- ceived." (Jt. Ex. 1, p. 10) Stipulations: The following matters were stipulated to during the hearing herein: 1. That the Company has the right under the Contract to subcontract out the warehouse and delivery oper- ations currently carried on at the warehouse location in Sacramento. 2. Employee Jim Robbins is not a current Employee of Handy Andy. 3. The Collective Bargaining Agreement was in effect on February 22, 1983 when notice of the Company's intent to subcontract was given to the Union. That Con- tract has since expired on April 1, 1983. It has not been renewed. No new Agreement has been- reached, and the Company and the Union are in negotiations for a new Agreement (Tr. 2). 4. Sections 29 and 30 of the Breuner's Local 250 con- tract have remained the same since the 1974- 1977 con- tract. Those provisions read as follows: "SECTION29 - CONTRACTING OUT "All work customarily performed by the Employer with its own employees shall be continued to be so performed unless the Employer decides otherwise at his sole discretion. No provisions of this collec- tive bargaining agreement shall be construed to limit the Employer's right at any time to subcon- tract all or any part of the work covered by this Agreement. "SECTION 30 - SEVERANCE PAY "(a) Employee(s) who have been permanently laid off because of the closing of a store or stores, or as a result of the Employer having contracted out work, (in accordance with Section 29 (hereof) shall receive days of severance allowance, based on his straight time hourly earnings at the time of separa- tion, and his years of continuous service, in accord- ance with the following schedule: "Employees with more than one year of continu- ous employment with the Employer but less than three (3) years' continuous employment shall re- ceive five (5) days' pay at their straight time rate. "Employees with three (3) consecutive years of employment with the Employer up to ten (10) consecutive years of employment shall receive ten (10) days' pay at their straight time rate. "Employees with ten (10) or more years of con- tinuous employment with the Employer shall re- ceive fifteen (15) days' pay at their straight time rate. "(b) An employee who meets the above conditions for severance pay shall nevertheless not be entitled to same if- "I. The employee is hired, in the event the Employ- er contracts out work, by the party to whom the work is being contracted. "2. The Employer offers the employee another posi- tion in the same geographical area, regardless of whether the employee accepts or rejects the offer of employment. "3. The employee is discharged for good cause in accordance with Section 23 hereof. "4. The employee accepts retirement benefits under Section 14 hereof or applies for same within thirty (30) days of his termination." (Co. Ex. 1, pp. 12- 13) 5. Mr. Robbins took another job and quit effective May 18, 1983. 6. The Arbitrator has been referred to Section 22 of the Agreement which essentially calls for what is charac- terized as an interest arbitration in this matter. 7. The Company has not as yet subcontracted the work pursuant to its notice but would represent that its intent is to subcontract it all, although that may not come to pass. If such subcontracting did occur, then all persons in the Bargaining Unit would no longer be em- ployed (Tr. 9-10). 8. The decision in this case will be binding with re- spect to any severance as the result of subcontracting no- ticed on February 22 even though the Agreement, Joint Exhibit 1, has expired (Tr. 11). 9. The Parties agree that any accrued vacation pay would be due any severed Employees (Tr. 14, 22) and that the Company would recall Employees in the event that it ceased subcontracting such work by the Employ- ee's past seniority. 10. The Arbitrator shall retain jurisdiction as to com- pliance with the terms of the Award herein (Tr. 29, 31). FURTHER BACKGROUND: The Company currently provides warehouse and de- livery service to three of its retail stores in Sacaramento and Modesto. Of the Employees who remain, they range in seniority with the Company from 9-3/4 years to 17- 3/4 years (Un. Ex 1). Their ages range from the mid- thirties to fifty-two (Tr. 80-84). There currently is one Warehouseman and four Drivers who also perform warehouse work as occasions arise. HANDY ANDY ASSOCIATES DISCUSSION: Late Exhibit: The Employer attached a proposed exhibit to its brief, such exhibit not being presented during the hearing. The Union objected to the consideration of the exhibit. The Employer subsequently withdrew the document and it was not considered herein. Obligation with Respect to Severance: The Employer maintains that there is no obligation in the A greement that severance pay be paid since Section 22 deals solely with the question of "severance". The Employer's position is not accepted for at least three rea- sons. The first is that the Employer itself maintains that it agreed to pay severance pay during 1975 negotiations. The Employer, however, did not call the Union's atten- tion to the fact that the typed 1975 Agreement which re- sulted from those negotiations did not contain its agree- ment to pay severance pay. The Employer thus cannot now be heard to contend that the 1971 adoption of Sec- tion 22 did not include the obligation of the Employer to negotiate, or to submit to the Grievance Procedure under Section 22 the question of severance "pay". Second, the term "severance" itself is an ambiguous one at best. Even if there was no aid to determine the Parties' intent as shown by the Employer's history of ne- gotiations, the most logical definition of "severance" would include severance pay. Otherwise, what the Em- ployer is maintaining is that the Union in agreeing to Section 22 allowing the Employer the unfettered right to subcontract away its work preserved nothing for its members of any value in agreeing to that provision, not- withstanding agreeing to submit the question of sever- ance to the Grievance Procedure. Third, this conclusion is additionally bolstered by the fact that the Employer agreed not to subcontract the work until an Arbitrator's award is received with respect to "severance." The only meaning that this provision could have would be to deal with the question of eco- nomic aspects of severance. The Employer offered no viable alternative as to what would be submitted to the grievance procedure or arbitration with respect to "sev- erance" other than the economic aspects thereof. Claimed Limitation on Severance Pay: The Employer's contention that past practice shows that no severance pay would be due, dealing with a clo- sure of a facility at Lake Tahoe, is not factually parallel to this case. The Union established that there were spe- cific circumstances which are not involved in this case with respect to the Sacramento situation (Tr. 66, 69). Bruener'r Contract: The Employer maintains that in 1975 the Union pro- posed and the Employer accepted that severance pay would be payable on subcontracting and, further, that severance pay amounts due would be that limited in the 1974-77 Brenner's contract cited above, with a maximum payout of fifteen days' straight time pay. As noted above, also, the Employer, notwithstanding maintaining that it agreed to this provision, knowingly realized that the pro- vision was not its 1975-77 Agreement and nonetheless did not call that to the Union's attention when the 1975- 77 Agreement was typed up. The Employer, therefore, left the Agreement as it was, namely, to submit the entire 219 issue of severance to the Grievance Procedure including arbitration as an interest arbitration. The intentional act of the Employer in not including the Bruener's provision in the Agreement precludes the Employer from now maintaining that Section 22 has the limitations of the Bruener's Agreement contained therein. Interest Arbitration as to Severance Pay: The Employer defined severance pay as follows: "A lump-sum payment, generally computed on the basis of length of service, made by an employer to a worker whose employment is terminated for causes beyond the worker's control, and which is in addi- tion to any back wages or salary due worker." (Er. Ex. 4) In addition, the Union cites another reference work to essentially the same effect, but which added: ". .. It [severance pay] is normally intended to help tide the employees over the period of unem- ployment immediately following termination. It also represents in part a payment in return for loss of job rights." (Labor Rel. Rep. (BNA) LRX 635 (1978)) In this case, additionally, this is not a situation where the plant closed or permanently ceased to operate, but in- volved subcontracting of work and the reason to do so would be for the economic advantage to the Employer. It is not inappropriate, in a severance pay interest arbi- tration of this nature to include consideration of that factor. The Union proposal with respect to severance is as follows: "SEVERANCE PAY: Handy Andy Associates, Inc. (hereafter `the Company') will pay each employee laid off due to subcontracting two weeks pay for each year of service worked by that employee. "HEALTH AND WELFARE BENEFITS: The Company will pay health and welfare benefits for all employees laid off as a result of subcontracting for 6 months after the date of subcontracting. "PENSION BENEFITS: The Company will pay pension benefits for all employees laid off as a result of subcontracting until December 1, 1983, or for three months after the date of subcontract- ing, whichever is later. "SICK LEAVE: Each employee laid off as a result of subcontracting will be paid for all sick leave accumulated as of the date of subcontracting." (Un. Ex. 2) The Employer maintains, as noted, that severance pay should be as the Bruener's contract from 1974 to 1977 shows; that the Union's contentions are unsupported by either specific evidence that the Grievants could not be employed elsewhere on leaving the Company and that no relevant provisions from comparable employers except the Bruener's contract was presented into evi- dence. Notwithstanding these contentions, and taking into consideration the Union' s arguments in favor of its pro- 220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD posals, thirteen weeks straight time pay for each Em- ployee, as well as thirteen weeks health and welfare cov- erage for himself and his dependents effective on the date of actual severance are found to be appropriate terms for severance pay. The Employer's contention that to grant health and welfare benefits would not be lawful does not take into account that this decision is pursuant to and, therefore, part of Section 22 of the 1981-83 Agreement between the Parties, Thus, it is supported by and is part of that Collective Bargaining Agreement under which such pay- ments may be lawfully made. Its expiration is irrelevant to this conclusion, this case arose thereunder and is being arbitrated thereunder as the Parties' stipulations show. The Union requests for payment of accumulated sick leave or for additional pension rights are denied. As will be seen in the decision herein certain provi- sions sought by the Employer as to eligibility for sever- ance pay are adopted, the Employer's request for an offset for unemployment compensation is denied. DECISION: 1. (a) Severance terms for the Employees of Handy Andy Associates affected by subcontracting notice on February 22, 1983 pursuant to Section 22 of the 1981-83 Agreement between the Parties shall be thirteen week's straight time pay and thirteen weeks of health and wel- fare benefits coverage for the Employee and his depend- ents, if any, effective the date of his severance due to the subcontracting. (b) An Employee shall not be eligible for severance pay if 1) he terminates his employment on his own accord prior to the effective date of his severance due to the subcontracting; 2) is offered a job and is actually hired by the Company which will be performing the sub- contracted work provided there is no break in employ- ment between his severance and such hiring; 3) if the Employee is discharged for just cause within the mean- ing of Section 10 of the 1981-83 Agreement prior to the effective date of severance; or 4) who accepts retirement fective date of severance and who is subsequently ac- cepted for retirement. 2. The Arbitrator, pursuant to the Parties' stipulation, retains jurisdiction in the event that there is any dispute with respect to the Employer's compliance with the terms of this Award. APPENDIX B 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 or- dered 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 protec- tion To choose not to engage in any of these protect- ed concerted activities. WE WILL NOT interrogate our employees regarding their union membership and sympathies. WE WILL NOT tell our employees that they have the choice of getting out of Teamsters Union Local 150 or any other union or we will drag out negotiations and then subcontract their work and they will lose their jobs. WE WILL NOT tell employees they will not be fired if they get out of Teamsters Union Local 150. WE WILL NOT in any like or related manner interefere with, restrain or coerce employees in their rights guaran- teed them by Section 7 of the Act. or who applies for retirement within 30 days of the ef- HANDY ANDY ASSOCIATES, INC.