Borden, Inc.,

396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Borden, Inc., Chemical Division Thermoplastic Prod- ucts and Local 553, International Chemical Workers Union, AFL-CIO. Case 1-CA-22419 22 April 1986 DECISION AND ORDER BY MEMBERS DENNIS, BABSON, AND STEPHENS On 6 September 1985 Administrative Law Judge Steven M. Charno issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel resubmitted her brief to the judge. 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 as modified.' REMEDY Because the Respondent engaged in an unfair labor practice, it shall be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the purposes of the Act, including the requirement that it shall, on the Union's request, bargain over the severance pay issue without insisting on employee execution of a general release as a condition of agreement. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, Borden, Inc., Chemical Division Ther- moplastic Products, Boston, Massachusetts, its offi- cers, agents, successors, and assigns, shall take the action set forth in the Order as modified. 1. Substitute the following for paragraph 2(a). "(a) On the Union's request, bargain over the severance pay issue without insisting on employee execution of a general release as a condition of agreement." 2. Substitute the attached notice for that of the administrative law judge. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to bargain with Local 553, International Chemical Workers Union, AFL-CIO, concerning severance pay. WE WILL NOT continue to insist on the execution of a general release by employees whose jobs have been eliminated as a condition for the granting of severance pay. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on the Union's request, bargain over the severance pay issue without insisting on em- ployee execution of a general release as a condition of agreement. BORDEN, INC., CHEMICAL DIVISION THERMOPLASTIC PRODUCTS Avrom J. Herbster, Esq., for the General Counsel. James A. King Jr., Esq., of Columbus, Ohio, for the Re- spondent. DECISION STATEMENT OF THE CASE STEVEN M . CHARNO, Administrative Law Judge. In response to a charge filed on 2 October 1984, a com- plaint was issued on 5 March 1985 which alleges that Borden, Inc., Chemical Division Thermoplastic Products (Respondent) has violated Section 8(a)(1) and (5) of the National Labor Relations Act, by failing and refusing to bargain collectively in good faith with Local 553, Inter- national Chemical Workers Union , AFL-CIO (Union). Respondent's answer denies the commission of any unfair labor practice. A hearing was held before me on 15 April 1985 in Boston, Massachusetts.' Briefs were thereafter filed by the General Counsel and Respondent under extended due date of 22 June 1985. ' We shall modify the judge's decision to provide the standard Board remedy for the 8(a)(5) violation the judge found , insisting to impasse on a permissive subject of bargaining, and to conform with the General Coun- sel's requested remedy See, e g, North Carolina Furniture, 121 NLRB 41 (1958) See also Big John Food King, 171 NLRB 1491 (1968) i At the hearing, the parties entered a comprehensive stipulation re- solving virtually every factual issue in the proceeding The only disputed issue remaining concerns statements made at a meeting on 23 July 1984, and there are only minor variations in the testimony presented on this issue 279 NLRB No. 59 BORDEN, INC 397 FINDINGS OF FACT 1. JURISDICTION Respondent is a corporation engaged in the production of polyvinylchlonde (PVC) and related products, which maintains an office and place of business in Leominster, Massachusetts. During the calendar year 1984, Respond- ent, in the course and conduct of its business in Massa- chusetts, shipped products valued in excess of $50,000 to points outside the State and purchased and received goods valued in excess of $50,000 from suppliers outside the State It is admitted, and I find, that Respondent is an employer within the meaning of the Act. The Union is admitted to be, and I find is, a labor or- ganization within the meaning of the Act. II THE ALLEGED UNFAIR LABOR PRACTICES A. Background During the 20 years Respondent has produced PVC products at its Leominster facility, its production em- ployees have been represented by the Union. As of Janu- ary 1984, there were approximately 140 such employees in the facility's bargaining unit.2 The most recent collec- tive-bargaining agreement between Respondent and the Union, which expires 26 January 1986, incorporates a letter agreement between the parties dated 11 February 1980, which states: In confirmation of our discussions during the recent labor agreement negotiations , it was agreed that in the event of the closing of the Borden, Inc., Chemi- cal Division, Thermoplastics Products, Leominster, Massachusetts facility, the company will meet with the union in an effort to, and in good faith, negoti- ate a severance agreement. B. Negotiations In November 1983, Respondent discontinued produc- tion of PVC latex and permanently laid off three em- ployees in its polyco department. On 11 April 1984,3 Re- spondent informed the Union that the polyco department at the Leominster facility would be closed and the re- maining 15 to 20 employees in that department would be laid off. At a meeting between the parties the following day, the Union sought severance pay for the laid-off em- ployees pursuant to the 1980 letter agreement . Colvin Henderson, Respondent's employee relations manager, maintained that the Company's action was a layoff and Respondent would not offer severance pay. He stated, however, that Respondent would aid the affected em- ployees in securing other employment. Subsequently, the 2 The appropriate bargaining unit is admitted to be All hourly production and maintenance employees (including boiler- room licensed fire person), shipping employees, over-the-road truck drivers and all hourly laboratory technicians employed at the Leom- inster facility, but excluding all other employees, executives, supervi- sors, assistant supervisors, office employees, watch persons, guards, chemists, laboratory technicians and professional employees, and all other supervisors as defined in the National Labor Relations Act, as amended 9 All dates hereinafter are 1984, unless otherwise indicated remaining employees in the polyco department were laid off. On 19 June, Respondent sent the Union a letter which stated that additional production and maintenance em- ployees would be laid off for a 1-month period com- mencing 24 June. At a meeting between the parties in early July, Michael Formato, Respondent's area labor re- lations manager, reiterated Respondent's position that bargaining concerning severance pay was not appropri- ate under the 1980 letter agreement because the plant was not being closed . On 18 July Respondent informed the Union by letter that the 1-month layoff would be ex- tended "until resin sales warrant additional product from the Leominster manufacturing facility." On 23 July the parties met again. At that meeting, Henderson indicated that the Leominster facility would not be shut down but would be used solely as a terminal, employing approximately 30 workers. He further indicat- ed that at least one of four conditions must be met before Respondent could profitably recommence production at Leominster: (1) capital investment must be made to reduce the high production costs resulting from old equipment, (2) a large competitor must leave the market, (3) a new product which could be produced at the facili- ty must be developed, or (4) a sudden "tremendous up- swing" in business must take place. Henderson admitted that Respondent could not predict when any of these conditions might be met and stated at the close of the meeting that Respondent was prepared for the first time to discuss the issue of severance.4 In his testimony during the hearing, Henderson noted that his 23 July statement concerning severance constituted "a rather no- ticeable change" from Respondent's prior position of re- fusing to recognize that the 1980 letter agreement in any way controlled the negotiations between Respondent and the Union. On 26 July Henderson sent a letter to all laid-off em- ployees which noted that they had been "laid-off with no definite date of recall" and discussed their rights to cer- tain employee benefits. That discussion did not take into account any possibility that the employees would be re- called. At a meeting on 10 August, the Union contended that, because Respondent planned to cease production at Leominster, the 1980 letter agreement should be imple- mented. Formato, who was present for Respondent, maintained that a shutdown was not occurring . He did, however, propose that laid-off employees be given an option of retaining their layoff status and recall rights for 3 years or of severing their employment and receiving severance pay in an amount equal to 16 hours of pay for each year of employment by Respondent. On 28 August the parties again met and Jack McIner- ney, Respondent's director of corporate labor relations, stated that all employees must elect one of the two op- tions by 1 October. The parties agreed that the severance agreement would cover present employees as well as those previously laid off. Following additional discussion 4 The testimony of Henderson and the Union's representative to this effect is supported by both parties' notes of the meeting 398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD concerning the details of severance pay, McInerney stated that employees who elected severance would be required to sign a release and gave a copy of a proposed release to the union representatives . That document re- leased Respondent from claims for wages, employment, reemployment, reinstatement, and "any and all causes of action whatsoever" which an employee might have against Respondent as a result of his employment. At a grievance meeting on 13 September, Respondent gave the Union a detailed summary of the 10 August proposal which outlined the two options and the require- ment that a release be executed by employees opting for severance. At the Union's request during a 26 September telephone call, Formato extended the deadline for em- ployees to exercise the option to 15 October. The parties met for the last time on 2 October. After brief negotiations, they reached complete agreement on every term and condition of the severance agreement except the wording of the release. The Union's repre- sentatives expressed their concern that the release pro- posed by Respondent would extinguish an employee's right to prosecute civil and statutory health or safety claims. This concern arose from the fact that the vinyl chloride produced at Leominster is either a known or suspected carcinogen, the use of which is specifically governed by OSHA regulations. The Union's representa- tives stated their willingness to agree to a release which extinguished all contractual rights as well as any rights engendered by the termination of employment, but indi- cated that they could not agree to the general release proposed by Respondent. Formato informed the Union that unless the agreement, including the requirement of a general release, was signed by 3 p.m. that day, Respond- ent would take it off the table. The agreement was not signed, and there have been no further negotiations be- tween the parties concerning severance. The production facilities at Leominster have remained idle since July 1984, and none of the affected employees have been recalled. The work formerly done there has been transferred to Respondent's plants in Louisiana and Illinois, and the Leominster facility has been used exclu- sively as a terminal for the consolidation and shipment of products produced elsewhere. The Leominster facility has never previously been shut down for such an ex- tended period, nor has it previously been used as a termi- nal. Production machinery at the facility has been moth- balled and 30 managerial employees (of approximately 100) who worked at the facility have been terminated. Although Respondent expended between $250,000 and $400,000 during mothballing to ensure that it could easily restart the plant, it has no present plans to recommence production and cannot predict when it might do so. C. Discussion The General Counsel contends that Respondent violat- ed Section 8(a)(1) and (5) by bargaining to impasse over a permissive subject of bargaining, the wording of a re- lease. That contention raises three questions for consider- ation: (1) whether Respondent was under a duty to bar- gain concerning severance pay; (2 ) whether the parties reached impasse; and (3) whether a general release is a permissive subject of bargaining. 1. The duty to bargain An employer's decision to shut down part of its oper- ations undisputedly creates an obligation to bargain about the effects of that decision on bargaining unit em- ployees. See, e.g., First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981); NLRB v. Production Mould- ed Plastics, 604 F.2d 451 (6th Cir. 1979); National Termi- nal Baking Corp., 190 NLRB 465 (1971). Notwithstand- ing the foregoing principle and the specific requirements of the 1980 letter agreement, Respondent contends that it never incurred an obligation to bargain because the Leominster plant was never shut down. In support of this position, Respondent points to the terminal operation conducted at the facility and to its expenditures to ensure that production equipment could be used in the future. Respondent's attempt to characterize the shutdown of production at Leominster as temporary is not supported by the record. Production has been halted for the longest period in the facility's history. The occurrence of any of Respondent's conditions precedent to recommencing op- eration is highly speculative, and Respondent cannot provide any estimate of when the Leominster facility might again be used to produce PVC products. As noted above, Respondent's 26 July letter does not contemplate recall of any of the bargaining unit employees to whom it was addressed . Finally, Respondent's willingness in October 1984 to release its entire work force by allowing them to opt for severance is inconsistent with its argu- ment that the facility has not been shut down. For these reasons, I conclude that Respondent has closed a part of its operation and is obligated to bargain over the effects of that action. This conclusion is in no way negated by the fact that workers are still employed at the plant. Those employees are engaged solely in shipping and transferring products-functions never previously per- formed at the plant. Similarly, the mothballing of pro- duction equipment merely evidences the exercise of pru- dent business judgment, not an imminent recommence- ment of production. Respondent appears to contend in the alternative that, even if it had an obligation to bargain, the scope of that obligation is narrower than would be the case if Re- spondent were negotiating a complete collective-bargain- ing agreement . Without citing any authority, Respondent argues on brief: While making no offer of any kind would clearly be a refusal to negotiate were the entire collective bar- gaining agreement at issue, I submit, just as clearly in this context, where the only issue is will a sever- ance package be offered to supplement an existing and ongoing collective bargaining agreement the Company is not obligated to offer a thing. Respondent's thesis is without merit. Once a statutory obligation to bargain exists, the parties are required to engage in good-faith bargaining. The fact that the goal of their negotiations is not a comprehensive collective-bar- gaining agreement cannot affect this requirement. BORDEN, INC 399 2. Impasse The Board in Taft Broadcasting Co., 163 NLRB 475, 478 (1967), enfd. 395 F.2d 622 (D.C. Cir. 1968), stated that an impasse occurs "after good faith negotiations have exhausted the prospects of concluding an agree- ment." This definition describes the situation in the present case. Here, the parties negotiated until they had reached agreement on every term and condition of a sev- erance agreement, except for the wording of the release which employees would be required to sign. When it became impossible to reach agreement on that point through further good-faith negotiation, the parties had reached an impasse. Respondent's argument that an impasse did not occur because it withdrew its offer misconstrues the Board's holding in Nordstrom Inc., 229 NLRB 601 (1977). That case concerned the nature of offer and acceptance in a situation where impasse had not yet been reached. The Board there held that one party cannot unilaterally create an enforceable contract by agreeing to the portion of an offer relating to a mandatory subject of bargaining while rejecting the remaining portions of the offer which relate to permissive subjects. Nordstrom is thus legally and factually inapposite to the instant situation. was designed to establish all the terms and condi- tions of employment for the contract then under ne- gotiation. Accordingly, it had an immediate and sig- nificant effect on unit employees. In these circum- stances the parties' agreement was so intertwined with and inseparable from the mandatory terms and conditions for the contract currently being negotiat- ed as to take on the characteristics of the mandato- ry subjects themselves. The relationship between the permissive and mandato- ry subjects of bargaining in this case does not exhibit the interdependence required by the Board in Sea Bay Manor Home. Obviously, severance pay can be paid pursuant to a severance agreement without the execution of a re- lease. If Respondent's argument were accepted, it would mean that a permissive subject of bargaining would become mandatory whenever it was presented together with a mandatory subject. That is not the law. I there- fore conclude that there is not a sufficient nexus between severance pay and a general release to inextricably inter- twine the two subjects of bargaining. See NLRB v. Bart- lett-Collins Co., 639 F.2d 652 (10th Cir. 1981), cert. denied 452 U.S. 961 (1981). 3. Mandatory or permissive In NLRB v. Borg-Warner Corp., 356 U.S. 342, 349 (1958), the Supreme Court stated that "good faith does not license the employer to refuse to enter into agree- ments on the ground that they do not include some pro- posal which is not a mandatory subject of bargaining." Thus, the final issue to be resolved is whether the subject of bargaining over which impasse was reached, a general release, is a mandatory subject of bargaining. Although Respondent appears to admit that a general release is not in and of itself a mandatory subject of bar- gaining,5 it argues that the release "was so intertwined with severance pay as to be a mandatory subject is this context even if not in others." Initially, it should be noted that the requirement of a general release was not a part of Respondent's initial severance pay proposal and does not appear to have been added as a quid pro quo for any concession to the Union. In any event, Respond- ent's position is based on a misreading of the Board's holding in Sea Bay Manor Home for Adults, 253 NLRB 739 (1980). There, the Board found that a permissive term, interest arbitration, rose to the level of a mandato- ry term when the parties agreed to use interest arbitra- tion to establish each and every provision of the collec- tive-bargaining agreement then being negotiated The Board stated (page 740) that the agreement to employ in- terest arbitration 6 The Board has consistently held in other contexts that attempts to condition the execution of an agreement upon the relinquishment of a future legal right violate the statutory bargaining obligation See Laredo Packing Co, 254 NLRB 1 (1981), Stackpole Components Co, 232 NLRB 723 (1977), Peerless Food Products, 231 NLRB 530 (1977), Heider Mfg Co, 91 NLRB 1185 (1950) These cases indicate that the correct focus is on the nature of the right proposed to be extinguished In that context, it is clear that a general release of all future claims arising in any way from a prior employment is too attenuated from the actual terms and condi- tions of that employment to be a mandatory subject of bargaining 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. All hourly production and maintenance employees (including boilerroom licensed fire person), shipping em- ployees, over-the-road truck drivers and all hourly labo- ratory technicians employed at Respondent's Leominster facility, but excluding all other employees, executives, supervisors, assistant supervisors, office employees, watch persons, guards, chemists, laboratory technicians and professional employees, and all other supervisors as defined in the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material, the Union has been and is the exclusive representative of all the employees in the afore- said unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By demanding as a condition of consummating a severance agreement affecting employees in the aforesaid unit that the Union agree to a proposal requiring em- ployees whose jobs had been eliminated to sign a general release, Respondent has engaged in and is engaging in an unfair labor practice in violation of Section 8(a)(1) and (5) of the Act. 6 The aforesaid unfair labor practice affects commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Because Respondent engaged in an unfair labor prac- tice, it shall be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the purposes of the Act, including the requirement that it 400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD shall, at the request of the Union, enter into and execute the 2 October 1984 severance pay proposal, with the ex- ception of the provision requiring employee execution of a general release. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed6 ORDER The Respondent, Borden, Inc., Chemical Division Thermoplastic Products , Leominster Massachusetts, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively over a severance pay agreement with the Union as the bargaining repre- sentative of the employees in the unit described above. (b) Demanding as a condition of consummating a sev- erance agreement that the Union agree to a proposal re- quiring employees whose jobs had been eliminated to sign a ' general release or to any other proposal not in- volving terms or conditions of employment. (c) 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. 6 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 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) At the request of the Union, enter into and execute the 2 October 1984 severance pay proposal, with the ex- ception of the provision requiring employee execution of a general release. (b) Post at its Leominster, Massachusetts facility copies of the attached notice marked "Appendix." Copies of the notice, on forms provided by the Regional Director for Region 1, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (c) Mail a copy of the attached notice marked "Ap- pendix" to each of its employees who would be covered by the 2 October 1984 severance pay proposal. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. r 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 "