Town & Country Olds/Cadillac/ - Honda

SALINAS VALLEY FORD SALES Salinas Valley Ford Sales, Inc.; Bob Wills Dodge, Chrysler, Plymouth Inc.; Segel Enterprises, Inc., d/b/a Town & Country Olds/Cadillac/- Honda and International Association of Ma- chinists and Aerospace Workers, AFL.-CIO, District Lodge N. 98, Local Lodge No. 1824. Cases 32-CA-5953 and 32-CA-6183 30 April 1986 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND JOHANSEN On 12 August 1985 Administrative Law Judge Gordon J. Myatt issued the attached decision. The General Counsel filed exceptions and a supporting brief, and the Respondents filed a brief in answer to 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 only to the extent consistent with this Decision and Order. The sole issue before the Board in this case is whether the Respondent, Salinas Valley Ford Sales, Inc.,' violated Section 8(a)(3) and (1) of the Act by failing to reinstate economic strikers Ivan San Nicholas, Robert Boranda, and Larry Robin- son to their former jobs.2 The judge dismissed the complaint in its entirety. While we agree with his disposition of the allegations concerning Robinson, we disagree with his rulings on the allegations con- cerning San Nicholas and Boranda. With respect to employee San Nicholas, the judge found that the Respondent was under no ob- ligation to offer him reinstatement to his former job on the departure of his replacement because, in his view, San Nicholas had "acquired regular and sub- stantially equivalent employment" elsewhere. We disagree. As the judge correctly points out, under Laidlaw Corp., 171 NLRB 1366 (1966), enfd. 414 F.2d 99 (7th Cir. 1969), economic strikers who uncondition- ally offer to return to work are entitled to full rein- statement to their former jobs upon the departure of their replacements unless they have, in the i The General Counsel has excepted only to the judge's failure to find that the Respondent , Salinas Valley Ford Sales, Inc , unlawfully refused to reinstate three economic strikers to their former jobs upon the depar- ture of their replacements As the only issue before the Board involves Salinas Valley Ford Sales, Inc, the term "Respondent" in this decision refers only to that employer 2 During the strike, the Respondent hired permanent replacements for San Nicholas, Boranda, and Robinson, as well as for other strikers 679 meantime, obtained regular and substantially equiv- alent employment elsewhere, or the employer can show that it has a legitimate and substantial busi- ness reason for not reinstating the striker. The burden of showing that a striker has obtained regu- lar and substantially equivalent employment rests with the employer.3 Further, the question of what constitutes "regular and substantially equivalent employment" is determined not by a "mechanistic application of the literal language of the statute," but rather through the objective appraisal of sever- al factors, both tangible and intangible, including the desire and intent of the employee concerned.4 An employer's belief, however honest or reasona- ble, that a striker has obtained regular and substan- tially equivalent employment is not sufficient to meet that burden.5 Here, the Respondent claims that it did not recall San Nicholas to his former job as general cleanup janitor because it had learned that San Nicholas had obtained employment with another employer, Monterey Peninsula Ford, and that San Nicholas had informed it that he was happy work- ing with that employer. However, other than its own assertion that San Nicholas was happily em- ployed at Monterey Peninsula Ford, the Respond- ent produced no evidence to show that that job was substantially equivalent to the job San Nicho- las had held with the Respondent prior to the strike, and that it constituted regular, rather than part-time or temporary, employment. Under these circumstances, we find that the Respondent has not met its burden of showing that San Nicholas has acquired "regular and substantially equivalent em- ployment." Accordingly, we find that the Re- spondent's failure to recall San Nicholas to his former job on the departure of his replacement vio- lated Section 8(a)(3) and (1) of the Act, as alleged. We also disagree with the judge's finding that the Respondent was justified in not recalling em- ployee Boranda to his former job6 on the departure 8 See Arlington Hotel Co, 273 NLRB 210, 216 (1984) See also Little Rock Airmotive, 182 NLRB 666 (1970), enfd in relevant part 455 F 2d 163 (8th Cir 1972) 4 Little Rock Airmotive, supra Although the Board in Little Rock Air- motive declined to set "hard and fast guidelines " what factors might be deemed relevant in determining whether a striker has obtained "substan- tially equivalent employment," it noted that "such factors as fringe bene- fits (retirement, health, seniority for purposes of vacation , retention, and promotion), location and distance between the location of the job and an employee's home, differences in working conditions, et cetera, may prompt an employee to seek to return to his old job " 182 NLRB at 666 5 Arlington Hotel Co, supra at 216 6 Boranda was classified as a "body and light frame technician " Al- though initially employed in the body shop, Boranda was subsequently transferred to the frame shop approximately 2 months prior to the strike to replace an injured employee The Respondent's president, Ron Fne- berg, testified that Boranda's job function was "to try to handle the frame shop " 279 NLRB No. 89 680 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of his replacement, Richard Glew.7 The judge found that the Respondent was not required to re- instate Boranda because : (1) Boranda had obtained regular and substantially equivalent employment with another employer, and (2) he did not possess the "heavy duty frame work" skills that Glew had which permitted the Respondent to use Glew in an enlarged work capacity. The judge's finding that Boranda had obtained regular and substantially equivalent employment is based solely on the Respondent's claim that Bor- anda had gotten a higher paying job as a "body man" with "Auto Center in Salinas." Other than this bald statement, the Respondent presented no evidence to indicate that the job Boranda purport- edly held with "Auto Center" constituted regular employment or was substantially equivalent to the job he held with the Respondent prior to the strike. In the absence of such evidence, we find that the Respondent was not justified in refusing to recall Boranda to his former job on this basis. Nor, in our view, was the Respondent justified in refusing to reinstate Boranda because of his al- leged lack of "heavy duty frame work" skills. As noted, the Respondent bears the burden of showing that it had a legitimate and substantial business reason for not reinstating an economic striker on the departure of his or her replacement. Here, the business reason proffered by the Respondent for not recalling Boranda to his former job on the de- parture of his replacement, Glew, was that Bor- anda did not possess the "heavy duty frame work" skills that Glew possessed. However, the Respond- ent has not shown what, if any, changes occurred in its operations during the strike to have warrant- ed its claimed need for skills greater than those it required at the start of the strike. Absent such a showing, the fact that Glew was more qualified than Boranda is an insufficient basis on which to refuse to recall Boranda when Glew departed." Contrary to the judge's finding, there is at any rate no evidence in the record to suggest that the em- ployee the Respondent hired to replace Glew in fact possessed "heavy duty frame work" skills. Under these circumstances, we find that the Re- spondent has not established a legitimate and sub- stantial business reason for not recalling Boranda to his former job upon the departure of his replace- ment, and that its failure to recall Boranda violated Section 8(a)(3) and (1) of the Act, as alleged.9 7 Fneberg testified that Glew was replaced by "somebody hired off the street " 8 See Lehigh Metal Fabricators, 267 NLRB 568, 575 (1983), enfd mem 116 LRRM 3264 (3d Cir 1984) B Contrary to his colleagues, Chairman Dotson agrees with the judge that the Respondent presented a legitimate and substantial business reason for not recalling Boranda to his former job Thus, he notes that the evi- We do, however, agree with the judge that the Respondent had a legitimate and substantial busi- ness justification for not recalling employee Robin- son to his former job. The record in this regard re- veals that, prior to the strike, Robinson had been employed by the Respondent as a journeyman technician at its truck store. In that capacity, Rob- inson was trained to work on small automatic transmissions for trucks, known as "540 Allison transmissions," and 8.2 litre diesel engines, known as "Detroit diesels." The Respondent's president Frieberg testified, without contradiction, that after the strike began the amount of work available on Allision transmissions and Detroit diesels declined and that, during the same period, it began to work almost exclusively on a new type of engine, known as "FABCO diesel." According to Frieberg's un- disputed testimony, the Respondent received work orders for the complete overhaul of 35 FABCO diesel engines from a company known as Merit Packing. Frieberg further testified that, because of the special nature of the FABCO engine, it was re- quired to hire mechanics who were classified as FABCO repairmen. The record indicates that after the strike began, the Respondent hired employee Steve Sides, who was skilled on FABCO engines, to replace Robin- son. When Sides left the Respondent's employ, the Respondent hired employee Ron Jackson, who also was skilled on FABCO engines, to replace Sides. Frieberg testified that he did not recall Robinson to his former job on the departure of Sides because he had been informed by his truck store service man- ager that Robinson would be unable to perform the work that was available on the FABCO engines. On the above facts we find, contrary to the Gen- eral Counsel's contention, that the Respondent has demonstrated a legitimate and substantial business reason for not recalling Robinson to his former job. Thus, it is clear that, during the strike, the Re- spondent's engine repair operations changed dra- matically from "540 Allison transmission" and "Detroit diesel" repair work to work that in- volved, almost exclusively, repair of the newer type "FABCO diesel" engines. In view of the changed nature of its engine repair operations, and inasmuch as the undisputed evidence reveals that Robinson was unable to perform this type of repair dence presented by the Respondent, showing that Boranda could not per- form "heavy duty frame work" and that this skill had become an integral part of the job responsibilities previously performed by Boranda, was un- disputed Under these circumstances, Chairman Dotson finds that the Re- spondent has met its burden of proof Further, in view of his agreement with the judge that the Respondent has substantial business justification for not reinstating Boranda, Chairman Dotson finds it unnecessary to de- termine whether Boranda had obtained substantially equivalent employ- ment SALINAS VALLEY FORD SALES work, we find that the Respondent was justified in refusing to reinstate Robinson on the departure of his replacement, Sides. 10 CONCLUSIONS OF LAW 1. The Respondents, Salinas Valley Ford Sales, Inc.; Bob Wills Dodge, Chrysler/Plymouth, Inc.; Segel Enterprises, Inc., d/b/a Town & Country Olds/Cadillac/Honda, are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824 is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. The Respondent, Salinas Valley Ford Sales, Inc., has violated Section 8(a)(3) and (1) of the Act by refusing to reinstate to their former positions economic strikers Ivan San Nicholas and Robert Boranda, after they unconditionally offered to return to work, when vacancies in those positions were created by the departure of their replace- ments. 4. Salinas Valley Ford Sales, Inc., and the other Respondents, have not engaged in any of the other unfair labor practices alleged in the amended con- solidated complaint. REMEDY Having found that the Respondent, Salinas Valley Ford Sales, Inc., violated Section 8(a)(3) and (1) of the Act by refusing to reinstate employ- ees Ivan San Nicholas and Robert Boranda to their former jobs upon the departure of their replace- ments, we shall order it to cease and desist from engaging in such conduct and from, in any like or related manner, infringing upon its employees' Sec- tion 7 rights. The Respondent shall also be re- quired to offer Ivan San Nicholas and Robert Bor- anda immediate and full reinstatement to their former jobs or, if those positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights and privileges previously enjoyed, and to make them whole for any loss of earnings they may have suffered by reason of the Respondent's discrimination against them. The discrimmatees shall be entitled to back- pay, with interest, from the date of the departure of their replacements until such time as the Re- spondent makes them a valid offer of reinstatment. The backpay, with interest, shall be computed in the manner prescribed in F W. Woolworth Co., 90 10 In view of our finding that the Respondent was substantially justi- fied in refusing to reinstate Robinson, we find it unnecessary to determine whether Robinson, as found by the judge, had obtained "regular and sub- stantially equivalent employment" elsewhere 681 NLRB 289 (1950), and Florida Steel Corp., 231 NLRB 651 (1977). ORDER The National Labor Relations Board orders that the Respondent, Salinas Valley Ford Sales, Inc., Salinas, California, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Discouraging membership in International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824, or any other labor organization, by refus- ing to reinstate economic strikers, who have un- conditionally offered to return to work, to their former positions when vacancies in those positions are created by the departure of their replacements. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act. (a) Offer employees Ivan San Nicholas and Robert Boranda immediate and full reinstatement to their former positions, vacated by their replace- ments, or, if those positions no longer exist, to sub- stantially equivalent positions without prejudice to their seniority or any other rights and privileges previously enjoyed discharging, if necessary, any employee hired by the Respondent to fill the va- cancy created by the departure of their replace- ments, and make them whole for any loss of pay they may have suffered by reason of the discrimi- nation against them in the manner described in the remedy section of this decision. (b) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at its facility in Salinas, California, copies of the attached notice marked "Appen- dix."" Copies of the notice, on forms provided by the Regional Director for Region 32, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly upon receipt and maintained for 60 consecutive days in conspicuous places including all places i i 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 " 682 DECISIONS OF NATIONAL LABOR RELATIONS BOARD where notices to employees 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. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT discourage membership in Inter- national Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824, or any other labor organization, by refusing to reinstate economic strikers, who have unconditionally offered to return to work to their former positions when vacancies in those po- sitions are created by the departure of their re- placement. 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 offer Ivan San Nicholas and Robert Boranda immediate and full reinstatement to their former positions vacated by their replacements or, if those jobs no longer exist, to substantially equiv- alent positions, without prejudice to their seniority or any other rights or privileges previously en- joyed and WE WILL make them whole for any loss of earnings and other benefits resulting from their discharge, less any net interim earnings, plus inter- est. SALINAS VALLEY FORD SALES, INC. T Hopkins, Esq., for the General Counsel. Richard H. Harding and Judy S. Coffin, Esqs. (Littler, Mendelson, Fastiff & Tichy), of San Francisco , Califor- nia, for the Respondents. DECISION STATEMENT OF THE CASE GORDON J. MYATT, Administrative Law Judge. On a charge filed by International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824 (the Union) against Salinas Valley Ford Sales, Inc. (Valley Ford), Bob Wills Dodge, Chrysler Plymouth, Inc. (Wills Dodge), and Segel Enter- prises, Inc., d/b/a Town & Country Olds/Cad- illac/Honda (Town & Country Cadillac),' the Regional Director for Region 32 issued a consolidated complaint and notice of hearing on 20 January 1984. An amended consolidated complaint and notice of hearing was issued by the Acting Regional Director for Region 32 on 15 June 1984. The amended complaint alleges, inter alia, that Respondents violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act, 29 U.S.C. § 151 et seq. Specifically, The amended consolidated complaint al- leges that the Union is the exclusive collective-bargain- ing representative of employees of the three Respondents in appropriate units . Further, that the Respondents tradi- tionally engaged in group negotiations with the Union, although each signed a separate agreement , and these ne- gotiations have resulted in successive collective-bargain- ing agreements; the latest of which was effective from 1 September 1980 through 31 August 1983. That during negotiations for a successor to the latest agreement, Re- spondents refused to bargain in good faith with the Union by: (1) stating it was their mutual desire to "throw [the Union) out"; (2) refusing to present meaningful counterproposals despite numerous concessions by the Union; (3) failing to give their negotiator authority to make binding decisions during the negotiations; (4) can- celling scheduled negotiating sessions; (5) failing to submit proposals in a timely fashion; (6) submitting re- gressive bargaining proposals without justification; (7) implementing, in September 1983,2 the final collective- bargaining proposal offered to the Union without first bargaining to impasse or without prior consent from the Union. The amended consolidated complaint alleges this conduct violated Section 8(a)(5) and (1) of the Act. The amended consolidated complaint further alleges that the employees engaged in a strike from 2 to 21 Sep- tember and that the strike was caused or prolonged by the alleged unlawful conduct of the Respondents. In the alternative, the complaint alleges the strike was an eco- nomic strike. Finally, the amended consolidated complaint alleges that on termination of the strike, the Union made an un- conditional offer on behalf of the striking employees to return to work. It further alleges that each of the Re- spondents failed and refused to immediately reinstate cer- tain striking employees to their former positions or to substantially equivalent positions. In the alternative, it is alleged that each of the Respondents failed and refused to recall certain named strikers to their former or sub- stantially equivalent positions in a nondiscriminatory manner or in accordance with a striker-recall agreement made with the Union. The amended consolidated com- plaint alleges Respondents violated Section 8(a)(1) and (3) of the Act by this conduct. The Respondents filed an answer in which they admit- ted certain allegations of the amended consolidated com- ' Although the consolidated complaint cites Town & Country Olds/- Cadillac/Honda as the business name of this Respondent, all of the testi- mony and record documents refer to the name Town & Country Cad- illac/Olds/Honda 2 Unless otherwise indicated, all dates herein refer to 1983 SALINAS VALLEY FORD SALES plaint, denied others, and specifically denied committing any unfair labor practices. Respondents' answer also as- serted, by way of an affirmative defense, that certain portions of the amended consolidated complaint were barred by Section 10(b) of the Act. A hearing was held in this consolidated matter on 30 May and 16 and 17 August 1984 in Monterey, California. All parties were represented by counsel and were afford- ed full opportunity to present relevant and material evi- dence and to examine and cross-examine witnesses. Briefs were submitted by the parties and have been duly con- sidered. On the entire record in this case3 and on my observa- tion of the witnesses while testifying, I make the follow- ing FINDINGS OF FACT I. JURISDICTION The pleadings admit, and I find, that Respondents Valley Ford, Wills Dodge and Town & Country Cadil- lac are California corporations engaged in the business of the retail sales of automobiles; each with a place of busi- ness located in Salinas, California. During the 12-month period preceding the issuance of the amended consolidat- ed complaint, each of the Respondents derived gross rev- enues in excess of $500,000 in their business operations and each purchased and received goods or services in excess of $5000 directly from sources located outside the State of California. Based on the above, I find each of the Respondents is an employer within the meaning of Section 2(2) engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II THE LABOR ORGANIZATION INVOLVED International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824 is a labor organization within the mean- ing of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. Background Facts As noted, the history of the collective-bargaining rela- tionship discloses the Respondents and the Union have been parties to successive collective-bargaining agree- ments over the years. The bargaining unit, about which there is no dispute, at each dealership is defined as fol- lows: All full-time and regular part-time journeymen ma- chinists, pleasure car mechanics, truck mechanics, electrical machinists, welders, metal, body and fender men, radiator repairmen, trimmers, spray- men, color matchers, stripers, sanders, rubbers, lu- bricators, car washers, polishers, gas pump attend- ants, pick-up and delivery employees, janitors, ap- prentices and painters employed by [the individuals 9 Counsel for the General Counsel submitted a posthearing motion to correct certain errors in the official transcript This motion is granted and the transcript is corrected 683 Respondent]; excluding all other employees, office clerical employees, guards and supervisors as de- fined in the Act. The operations of Valley Ford, the largest of the three dealerships, include a new-car dealership, a body and service shop, and a new truck dealership and shop locat- ed in a separate facility several miles away from the car dealership. Valley Ford has maintained a bargaining rela- tionship with the Union for over 10 years and there are approximately 40 employees in the bargaining unit.4 The uncontroverted testimony of Leo Piper, president of Wills Dodge, indicates that Wills Dodge employs ap- proximately eight bargaining unit employees. Its oper- ation consists of a new-car dealership with a body and service shop. Wills Dodge has had a bargaining relation- ship with the Union since approximately 1973. Similarly, Town & Country Cadillac is a new-car deal- ership with a body and service shop. The undisputed tes- timony of Les Segel, president of Town & Country Cad- illac, indicates there are approximately 18 employees in the bargaining unit. Further, that Town & Country Cad- illac has maintained a bargaining relationship with the Union for approximately 10 years. Over the past 10 years, the three Respondents have negotiated jointly with the Union but each has signed a separate collective-bargaining agreement In 1977, 1980, and again in 1983, the Respondents were represented by Mel Roberts in their contract negotiations with the Union.5 The undisputed testimony discloses that from the time negotiations first were handled by Roberts, Re- spondents followed a consistent pattern in the manner in which their bargaining procedures were conducted. First, the Respondents would meet with Roberts to define their bargaining goals and to establish the param- eters within which he was to attempt to negotiate an agreement on their behalf. Roberts had authority to con- summate an agreement for the dealers as long as he did not exceed the parameters established by them. Normally the dealers did not attend the actual bargaining sessions. They engaged in this practice out of a desire to avoid direct confrontation with the employee members of the Union's negotiating committee.6 As the bargaining pro- ceeded, Roberts would meet periodically with the deal- ers to update them on the progress of the negotiations and to reassess, if necessary, the guidelines imposed on him by the dealers. The unrefuted testimony indicates that during the negotiations for collective-bargaining agreements prior to 1983, the Union never questioned Roberts' bargaining authority or manner in which he ne- gotiated for the Respondents. 4 The above is based on the unrefuted testimony of Ron Freeberg, president of Valley Ford 5 Roberts is a labor consultant and president of the California Employ- ers' Council 6 Customarily, the negotiating committee for the Union consisted of of- ficials of the Union and three shop stewards-from each of the dealer. ships 684 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. The 1983 Negotiations 1. The prenegotiation events The record establishes that several months before the expiration of the 1980-1983 agreement, the Union and Roberts exchanged timely notices of intention to termi- nate the existing agreement on expiration and requested negotiations for a successor agreement. (See G.C. Exhs. 3-4.) The parties also exchanged their initial proposals for the new agreement.7 Prior to this, Roberts met with the three Respondents to determine their bargaining ob- jectives for the upcoming negotiations. Piper testified the Respondents felt that they were losing money in their service shops under the terms of the existing agreement. Because of the economic downturn experienced general- ly by automobile dealerships and because they were the only unionized dealerships in the area, Respondents felt they were unable to compete with local nonunion shops unless they received relief by tying the wages of their mechanics to job productivity. In order to achieve this, Respondents determined that any agreement negotiated would have to contain a "flat-rate" wage provision. By use of the flat-rate, Respondents sought to reduce the "unproductive" or "unapplied" time experienced in their service departments. The testimony defined "unproduc- tive" time as the difference between the time it takes a mechanic to do a specific job and the time actually charged to the customer. According to the unrefuted tes- timony, when a specified service job is required, the service writer looks up the flat-rate in the "Chilton" manual. This manual gives the number of hours it should take a competent journeyman mechanic to perform the particular service job and the customer is billed based on those hours for the labor charges. Should the mechanic take longer than the manual allows to accomplish the job, the dealer has to write off or absorb the excess time as nonproductive or unapplied time. The testimony of the Respondents indicate they experienced substantial losses due to unapplied time of their mechanics in their service departments. Frieberg testified Valley Ford lost approximately $65,000 in unapplied time in 1982 and Piper testified that Wills Dodge was getting only 5-1/2 productive hours from its mechanics in an 8-hour day. For these reasons, Respondents made the flat-rate provi- sion the cornerstone requirement in the bargaining pa- rameters established for Roberts.8 2. The negotiation meeting of 12 July On 12 July, Kenneth Mitchell, business representative of the Union, met with Roberts at the latter's office to go over the respective contract proposals. Mitchell stated Respondents' proposals contained a flat-rate provi- sion and he told Roberts the Union was opposed to any form of a flat-rate wage proposal. According to Mitchell, he and Roberts discussed various agreements reached in ° See G C Exh 2 for the Union's initial proposal and G C Exh 6 for the initial proposal of Respondents 8 Respondents' bargaining guidelines included , among other things, the deletion of an existing holiday and changing the date of another, changes in the seniority provisions, changes in the existing grievance procedures, and modification of the vacation and pension plan language other areas involving dealerships and Roberts stated Re- spondents' flat-rate proposal "would be taken off the table somewhere down the line" in the negotiations and the parties would agree to a wage increase of $1.40 an hour over the term of the contract.9 No agreement was reached on any of the bargaining issues at this meeting since it was an exploratory meeting between the two representatives. Roberts' testimony differed in one major aspect with that of Mitchell concerning this first meeting.1° Roberts denied telling Mitchell at this meeting that Respondents' flat-rate proposal would come off the table during the course of the negotiations. Roberts maintained that the wages connected to productivity (flat-rate) was a key issue with Respondents. Although there were no further meetings in July, the record indicates Roberts sought unsuccessfully to sched- ule meetings with the union representative during that month. On 28 July he wrote to Mitchell complaining about the Union representative's "unavailability for nego- tiation meetings" and stressing the shortness of time before the current agreement expired. (See R. Exh. 2.) 3. The bargaining session on 4 August The parties met on 4 August for a full negotiation ses- sion at the offices of Roberts. Mitchell was accompanied by the three shop stewards as part of the union bargain- ing committee. They went over the proposals of the Union and Respondents item by item. Mitchell testified the Union opposed any change in the holiday provisions. He stated the Union took the position that, although they might not get any additional holidays, they would not give up any already gained through collective bargain- ing. Regarding the wage proposal, the Union sought a $2-an-hour increase over the life of the agreement and adamantly opposed the flat-rate proposal of Respondents. Mitchell further testified the current agreement con- tained two workweeks; one from Monday through Friday and the other from Tuesday through Saturday. The undisputed testimony indicates that none of the Re- spondents used the latter workweek with the exception of Town & Country Cadillac for a brief period. The Union sought to eliminate the Tuesday through Saturday workweek and Roberts rejected this proposal, maintain- ing that Respondents intended to utilize it at some time in the future. Roberts' affidavit reveals that various other 9 It should be noted at this point that Mitchell gave an affidavit to a Board agent concerning this initial negotiation meeting In this affidavit, Mitchell did not mention that Roberts said the flat-rate proposal would come off the table during the course of negotiations 10 Prior to the hearing in this matter, Roberts suffered a stroke which left him in a disabled condition Roberts appeared at the hearing as a wit- ness but his speech was impaired He was undergoing therapy to help correct this impairment He asserted , however, that his memory was not affected by his condition In addition to his oral testimony , Roberts gave a written "deposition" concerning the events that occurred during the ne- gotiations with the Union-to which all parties stipulated was accurate except for one statement attributed therein to the union representatives (See G C Exh 7) Further, Roberts gave an affidavit to a Board agent which was incorporated by reference in the "deposition" and was intro- duced into evidence as R Exh 4 In setting forth Roberts' statements, consideration is given herein to all of the above documents and to his oral testimony SALINAS VALLEY FORD SALES items were discussed. On some there was agreement, on others no agreement, and some items were marked for later consideration. 4. The meeting on 12 August The parties met on 12 August at the offices of Roberts to continue their negotiations . The union representatives submitted a counterproposal to Roberts in which some concessions were made regarding three proposals made by Respondents at the last meeting . No agreement was reached on the overall collective -bargaining agreement and Roberts advised the union representatives that he would meet with the Respondents prior to the next ne- gotiation session. (See G.C Exh 7.) 5 The bargaining session of 18 August On 18 August the union bargaining committee met again with Roberts at his offices. Roberts submitted an- other counterproposal to the Union regarding the Re- spondents' latest adjustments to the grievance procedure. (See G.C. Exh. 8(a).) In addition, he submitted a written position statement from Respondents regarding the need for a wage provision tied to productivity. In this state- ment, Respondents urged the Union to respond with a counterproposal concerning wage rates based on produc- tivity. (See G.C Exh. 8(b).) No agreement was reached between the parties and a further meeting was scheduled for 24 August. The Union requested that a representative from each of the dealerships be present at the next scheduled meeting in order to explain and clarify the Union's proposals. 6. The bargaining sessions on 24 August The parties met as scheduled on 24 August in the morning at a neutral site in Salinas. Three representatives of the Respondents accompanied Roberts. Quentin Miller, the directing business agent of the Union, accom- panied Mitchell and the three shop stewards. Mitchell testified that each side reviewed their proposals in the morning session. Roberts' statement indicates that the Union began the negotiations by countering the position taken by management at the last negotiation session There was considerable discussion regarding Respond- ents' insistence on changes in the ratings of the journey- man classification and tying the wage rates to the pro- ductivity schedules contained in the factory warranty manuals and the Chilton flat-rate manual. Roberts' writ- ten statement indicates that the union representatives op- posed any form of a wage rate tied to productivity. Piper testified that Segel was the primary spokesman for the Respondents in attempting to explain their economic need for a wage rate based on productivity. Piper stated the union steward on the bargaining committee who was employed at Segel's dealership took issue with the rea- sons advanced by Segel at this meeting. According to the written "deposition" of Roberts, the union represent- atives stated that "rather than accept a wage rate based upon productivity, they would lose their membership." Piper testified that Miller said he would give up the membership before he would agree to a flat-rate wage 685 provision. i i The parties agreed to adjourn to permit Re- spondents' representatives to caucus. Because the dealers did not wish to have any further direct confrontation with any of their employees on the union bargaining committee, they chose not to return to the negotiations and instructed Roberts to continue to represent their po- sition when the bargaining session resumed. Roberts and the union bargaining committee resumed negotiations in the afternoon. Roberts presented manage- ment's counteroffer to the Union's proposals. The Union in turn presented Roberts with a counterproposal on the grievance and arbitration procedure (see G.C. Exh. 9(a)) and a proposal relating to "moonlighting." (See G.C. Exh. 9(b).) During the course of the bargaining session, Roberts dropped the dealers' original request that the employees give up a holiday and proposed language which would substitute a floating holiday for the Friday after Thanksgiving, which was recognized as a holiday in the existing agreement. Roberts also agreed to the Union's proposal regarding the grievance and arbitration procedure and the moonlighting provision. On the other outstanding issues the parties remained in disagreement. 7. The meeting on 26 August Negotiations resumed on 26 August at the offices of Roberts. The written statement of Roberts reveals that the parties reviewed the status of their contract propos- als. There was no movement by either side regarding those matters which they had not previously agreed on. The union representatives refused to consider any wage proposal based on productivity nor did they submit any counterproposal on this subject to the Respondents. 8. The bargaining session on 30 August A further negotiation session occurred on 30 August. Again, this meeting was held at the offices of Roberts. Miller also attended this meeting as part of the union bargaining committee.12 Roberts presented a counterproposal on behalf of Re- spondents. It classified journeymen mechanics at four dif- ferent levels and based their wages on a percentage of the flat-rate production. Wage increases for each year of the life of the agreement were offered to heavy-duty truck mechanics Present service employees were to be "red-circled" at the current wage rate but new hires were to be paid at a lesser rate with periodic increases thereafter. (See G.C. Exh. 10.) The union representatives countered with a proposal for a 40-cent-an-hour increase for all journeymen mechanics and subsequent increases of 70 cents and 90 cents The Union's counteroffer also asked for higher rates of pay than Respondents were proposing for new hires. No agreement was reached and the parties agreed that they would meet on the following day, at which time Roberts would submit Respondents' As previously noted, in the stipulation regarding Roberts' written statement, the union representatives and the General Counsel refused to stipulate to this comment attributed to the union representatives by Rob- erts 11 Roberts' notes do not reflect that Miller was present at this meeting, but Miller testified he attended this bargaining session 686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD final proposal to the Union for submission to the mem - C. The Poststrike Events bership. 9. The meeting on 31 August Mitchell testified the parties were scheduled to meet at 10 a.m. on this date. i 3 According to Mitchell, Roberts did not arrive until 1 p.m. Contrary to Mitchell, Roberts denied during the course of his testimony that he arrived 3 hours late for this meeting. Roberts submitted Respondents' final proposal to the Union. (See G.C. Exh. 11.) This offer contained yet an- other version of the flat-rate wage proposal for the jour- neymen mechanics.14 Respondents' proposal provided a guarantee of $12.40 an hour (the amount in the existing agreement) for all hours worked with an incentive of $13.40 an hour if a journeyman's billable hours equaled or were less than the hours stated in the flat-rate manual. Wage increases were offered to the heavy-duty mechan- ics and the body shop employees under this proposal. However, Respondent asked for reductions in the hourly wage rate for current service employees and all new hires in this category would be paid at a wage rate lower than the current employees. The parties failed to reach an agreement Mitchell tes- tified the flat-rate and holiday provisions were in conten- tion. Mitchell further testified that he told Roberts the membership would not buy a flat-rate wage provision. He stated that if Respondents gave an across-the-board increase to all mechanics, Respondents' final offer would be acceptable to the Union. According to Mitchell, Rob- erts replied that the Respondents had to have a flat-rate system for the mechanics. Mitchell agreed to present Re- spondents' final offer to the membership that day but in- dicated he would urge them to reject it. Mitchell held a membership meeting with the employ- ees that afternoon and presented Respondents' final offer. The members rejected it by a vote of 56 to 3. Mitchell stated they objected to the flat-rate provision for jour- neymen mechanics and the trading of the day after Thanksgiving for a floating holiday. The members voted 55 to 4 to engage in a strike. Mitchell testified he called Roberts by telephone that evening to inform him of the rejection of Respondents' final proposal and that the employees would go on strike on 2 September. He stated the date was selected to allow Respondents a day to change their bargaining position. According to Mitchell, Roberts said he was sorry the final offer was rejected but it was what the dealers wanted as "they wanted to get rid of the Union anyway." When questioned about this statement during his testimony, Roberts denied telling Mitchell in this con- versation that Respondents wanted to get rid of the Union. 13 Roberts' notes, in evidence, indicate the meeting was scheduled for 1030 am 14 The unrefuted testimony indicates that the flat-rate could only apply to journeymen mechanics because there was no flat-rate manual for heavy-duty truck mechanics or for body shop personnel The employees struck the dealerships on 2 September. All the unit employees at Wills Dodge and Town & Country Cadillac and most of the employees at Valley Ford went out on strike. The unrefuted testimony of each Respondent shows that they implemented the terms of their final offer either on 1 or 2 September. Over the course of the strike, a number of employees abandoned the strike and returned to work.15 In the interim, Re- spondents began to advertise for and hired permanent re- placements for the striking employees. Wills Dodge hired 3 permanent replacements, Town & Country Cadil- lac hired 6, and Valley Ford hired 19. While the strike was in progress, there were several meetings between the parties. The first occurred on 8 September and was attended by Miller and Mitchell for the Union and Roberts for the Respondents. The discus- sion centered primarily on the flat-rate proposal of Re- spondents and Roberts sought to explain it to the union representatives. Mitchell testified that Roberts' explana- tion seemed to differ from his understanding of the flat- rate system previously rejected by the Union The par- ties agreed to meet again on 12 September. When they met on 12 September, Roberts was accom- panied by the principals from each of the Respondents. 16 Respondents submitted a written explanation regarding its final proposal including the operation of the flat-rate provisions. The document also provided for a modifica- tion of the pension provisions to allow Wills Dodge to set up IRA accounts for its employees rather than using the Union's pension plan. In this document, Respondents stated agreement was "contingent upon granting amnesty for each employee who returned to his former position." (See G.C. Exh. 12) During the meeting, Frieberg explained in detail the operation of the flat-rate proposal to the union represent- atives using the written document as a basis for his expla- nation. According to Frieberg, Miller stated he now un- derstood Respondents' flat-rate proposal and felt he could sell it to the membership. 17 The parties also dis- cussed Respondents' amnesty position regarding return- ing employees who abandoned the strike. Mitchell took the position that any discipline of these employees by the Union was none of Respondents' business and the Union was free to impose any kind of disciplinary action it felt warranted. 111 After the meeting, the union representatives met with the membership and informed them of Respondents' ex- planation regarding the final proposal. The members 16 One striking employee crossed the picket line and returned to work at Wills Dodge and 14 employees did so at Valley Ford, although 3 of the returning employees at Valley Ford later rejoined the strike " Fneberg (Valley Ford) testified the Respondents had received infor- mation from striking employees that they were confused about what the flat-rate provision actually meant and how it would be applied There- fore, the principals of the dealerships attended this meeting to clarify their position for the union representatives 17 Miller testified the flat-rate proposal as explained was not a straight flat-rate provision He stated it was one with a guaranteed base rate and an incentive if the flat-rate time were met by the mechanics is In actual fact, none of the employees who abandoned the strike were disciplined by the Union SALINAS VALLEY FORD SALES voted to reject Respondents' proposal as explained. Mitchell later informed Roberts of the membership action and expressed the view that the amnesty clause was the main reason for the rejection. The Respondents met as a group and decided that they were in a better bargaining position because of the number of striking employees who were returning to work. They directed Roberts to withdraw the final pro- posal submitted to the Union in order to gain time to consider their new bargaining posture with the Union. Roberts thereupon sent a letter to the Union on 19 Sep- tember stating that the final offer was formally with- drawn. He indicated in this letter that Respondents were available for further negotiations with the Union. (See G.C. Exh. 13) Mitchell and Miller met with Roberts on 20 Septem- ber. At the Union's request, a Federal mediator was present. When asked by the mediator why Respondents had withdrawn their final proposal, Roberts stated it was because the dealers had beaten the Union. Roberts indi- cated, however, that Respondents would continue to ne- gotiate with the Union. The parties went over their re- spective positions and Roberts informed the union repre- sentatives that Respondents would submit modifications of the withdrawn proposal at a subsequent date. He also insisted that an amnesty provision was necessary to pro- tect those strikers who crossed the picket line and re- turned to work. Following the meeting, the union representatives met with the striking employees and informed them that Re- spondents had withdrawn the final offer. The employees voted to return to work unconditionally and to have the union representatives continue negotiations with Re- spondents. Mitchell thereupon called Roberts to advise him that the strike was over and the employees, were prepared to return unconditionally the following morn- ing. Roberts indicated he was uncertain if all the employ- ees were needed because business at the dealerships had been slow They agreed the employees would be re- turned on an "as needed" basis by each Respondent based on seniority in their job classifications. In reassessing their position after the strike was termi- nated by the Union, Respondents decided they wet e now in a stronger bargaining posture and they could insist on further revisions to the terms offered the Union in their final proposal. Piper (Wills Dodge) testified Respondents felt they not only needed an amnesty provision for em- ployees who crossed the picket line but also a modifica- tion of the union-security provision in the expired agree- ment to allow the replacements to decide whether they wanted to become members of the Union. Piper stated Respondents also wanted to retain the right to schedule Saturday work and to set the hours for the shop employ- ees. Although Respondents felt they were now in a posi- tion to force the Union to accept a 100-percent (straight) flat-rate system, Piper stated they decided against this in order to better obtain an agreement with the Union. Piper further testified Respondents felt they could obtain better health and welfare coverage for the employees at less cost if the dealers joined as a unit in seeking such coverage. 687 Mitchell and Miller met with Roberts and the Federal mediator again on 28 September. Mitchell recalled that Roberts said "anything the parties had agreed to was still agreed to." He stated Roberts said there would be some changes in Respondents' proposals. Mitchell left the meeting before it concluded. Miller testified Roberts said the negotiations would have to start from "square one" and all agreements were off the table. He too recalled that Roberts indicated he would submit modifications of the proposed contract items to the Union. According to Miller, after Mitchell left the meeting, the parties were attempting to agree on a date for a subsequent meeting Miller stated he ques- tioned whether Roberts had authority to negotiate an agreement and Roberts said, "His hands were tied by Respondents and this was the way they wanted it." Miller requested a complete written proposal from Re- spondents and Roberts promised to present it at their next meeting. Roberts' affidavit indicates the parties went over the contract provisions of the expired agreement on 28 Sep- tember and he indicated those items which Respondents would submit modifications His affidavit reveals he in- formed the union representatives that agreement on any section or clause was contingent on acceptance or rejec- tion of the contract as a whole. (See R. Exh. 4.) During the course of his testimony at the hearing, Roberts denied that the union representatives questioned his bar- gaining authority and he further denied telling the union representatives "his hands were tied" by Respondents. The record shows that the parties were scheduled to meet again on 6 October. This meeting was canceled by the mediator. Another meeting was set for 7 November but was canceled by Roberts because of a scheduling conflict. Mitchell, Roberts, and the mediator met again on 16 November at a restaurant in Salinas. Mitchell testified the mediator asked Roberts if he had any new proposals from Respondents. Roberts replied that he did not have them with him and, according to Mitchell, stated Mitch- ell was naive if he thought Respondents would sign an agreement with the Union. Mitchell further stated that Roberts said he would negotiate with the union repre- sentatives for a year and never reach an agreement. When questioned as a witness, Roberts denied making the statements attributed to him by Mitchell. Roberts specifically denied telling Mitchell he was naive if he thought Respondents would sign an agreement with the Union and he further denied that he (Roberts) stated he would meet with the Union for a year and never reach an agreement. Mitchell testified Roberts left the meeting for approxi- mately an hour and returned with a written copy of Re- spondents' modifications to his prior proposals. Among other things, the proposals presented by Roberts omitted the union-security provision, granted management sole discretion in the training and assignment of apprentices, and granted management sole discretion in setting the hours of work and the workweek. The wage rate for journeymen mechanics was the incentive flat-rate pro- posal contained in the prior final offer. However, Re- 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD spondents offered a larger wage increase for current service employees than proposed in the previous offer and accepted the Union's grievance and arbitration pro- vision. (See G.C. Exh. 14) A subsequent meeting between the parties was sched- uled for 6 December. Roberts canceled this meeting be- cause Respondents had not secured the information nec- essary to formulate their new health and welfare propos- al for presentation to the Union. Mitchell testified that Roberts told him that if the Union wanted to schedule any further meetings, it should do so through the media- tor. No meetings between the parties was scheduled after 6 December. D. The Returning Strikers The complaint sets forth names of striking employees of each Respondent that the General Counsel contends were not recalled or were not recalled in accordance with the strike settlement terms. At the hearing, records were made available to the General Counsel and testimo- ny was given regarding certain of these employees and whether their replacements were still employed by Re- spondents. At the conclusion of the case, the parties stip- ulated that all employees named in the complaint about whom there was no testimony would be dismissed from the complaint by the General Counsel. Subsequently, in his brief, the General Counsel moved to dismiss the names of certain other employees based on the testimony contained in the record. Consequently, only the follow- ing striking employees of Respondent Valley Ford remain alleged as discriminatees in the complaint: Roberts Boranda Larry Robinson Ivan San Nicholas The uncontroverted testimony discloses that Boranda was a body shop employee working as a light frame me- chanic. During the strike, Boranda was permanently re- placed by an employee named Glew. Sometime after the termination of the strike, Glew left his job at Valley Ford. Kenneth Hadley, service manager of Valley Ford, testified he received information that Boranda was em- ployed on a job paying a higher wage rate than he had been receiving at Valley Ford. When Glew quit, Hadley did not attempt to call Boranda but replaced him with a new hire who possessed greater skills than Boranda. The new hire had experience on heavy-duty frame work which permitted him to be assigned work as both a light and heavy frame mechanic. Larry Robinson was a journeyman mechanic working in the truck shop of Respondent Valley Ford. During the strike, Robinson was permanently replaced by an em- ployee named Sides . On 18 January 1984 Sides quit his job with Valley Ford. Fneberg testified that at the time, management was aware that Robinson was working as a mechanic with another dealership. At the same time, Valley Ford's business requirements dictated that it now fill the vacant mechanic position with a person who pos- sessed repair experience on "Fabco" trucks because of a demand for such repair service . Robinson had not worked on Fabco equipment and therefore did not qual- ify for this position. Valley Ford filled the position va- cated by Sides with a new hire who possessed the requi- site Fabco repair experience. Ivan San Nicholas was a general cleanup employee for Valley Ford. While on strike, San Nicholas was perma- nently replaced by an employee named Cannon. The re- placement left Valley Ford's employment in November 1983. Hadley testified that shortly after the strike ended in September, he was informed by San Nicholas' supervi- sor that San Nicholas was employed at another Ford dealership and was happy with his job. After Cannon left, Valley Ford did not recall San Nicholas because it was aware of his current employment. Concluding Findings The first issue to be considered here is Respondents' affirmative defense asserting the amended allegations contained in the amended consolidated complaint are time-barred by Section 10(b) of the Act.' 9 These allega- tions assert in the alternative that the strike was an eco- nomic strike and each of the Respondents refused to recall certain named employees in a nondiscriminatory manner or in accordance with the strike settlement agreement with the Union Wills Dodge was also includ- ed in this portion of the amended allegations although not so cited in the original consolidated complaint, nor were any of its employees specifically named in the timely filed, underlying charge in Case 32-CA-6183. However, this charge named all of the Respondents as violating Section 8(a)(3) by refusing to recall striking em- ployees upon an unconditional offer to return to work and specifically set forth certain named employees of Re- spondents Valley Ford and Town & Country Cadillac. (See G.C. Exh. 1(c).) In my judgment, Respondents' assertion that the amendments are barred by the 6-month limitation period of Section 10(b) is without merit. There is no contention that the charges in either case were not timely filed. Fur- thermore, the charge in Case 32-CA-6183 cites all of the Respondents as violating Section 8(a)(3) by failing to re- instate striking employees upon an unconditional offer to return; albeit only specific employees of Valley Ford and Town & Country Cadillac were named therein. The amendments objected to by Respondents merely plead this same strike in the alternative as an economic strike. Thus it is based solely on matters arising out of the same course of events set forth in the timely filed charge. Nor is the General Counsel precluded from including Wills Dodge in the amendments because that Respondent was named along with the other two Respondents in the un- derlying charge as violating Section 8(a)(3) by refusing to reinstate striking employees. I find, therefore, that Section 10(b) of the Act did not bar the General Counsel from amending the original consolidated complaint in these cases. See Pankratz Forest Industries, 269 NLRB 33 (1984). Turning to the merits of the instant cases, the General Counsel contends Respondents violated Section 8(a)(5) 19 Although counsel for Respondents represented at the heanng that this issue would be addressed in her brief, she failed to do so SALINAS VALLEY FORD SALES of the Act by engaging in bad-faith bargaining generally and by implementing the terms of their final proposal without first bargaining to impasse with the Union. For these reasons, the General Counsel contends, foremost, that the strike herein was caused and prolonged by Re- spondents' alleged unfair labor practices The bargaining obligation under Section 8(d) of the Act20 has been defined by the Board in numerous cases over the years. A succinct expression of the factors to be considered in determining whether this obligation has been met is found in the Board's decision in Chevron Chemical Co., 261 NLRB 44 (1982). There, the Board stated (id at 46) . in ascertaining whether the duty to bargain in good faith has been complied with, it must be re- membered that Section 8(d) does not "compel either party to agree to a proposal or require the making of a concession . ." Thus the Board does not, "either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective-bargaining agreements." N.L.R.B. v. American National Insurance Co., 343 U S 395, 404 (1952). On the other hand, as stated by the Supreme Court, "[T]he Board has been af- forded flexibility to determine . . . whether a party's conduct at the bargaining table evidences a real desire to come into agreement. . And spe- cifically we do not mean to question in any way the Board's powers to determine the latter question, drawing inferences from the conduct of the parties as a whole." [Footnotes omitted]. N.L.R.B. v. Insur- ance Agents' International Union, AFL-CIO (Pruden- tial Insurance Co.], 361 U S. 477, 498 (1960). It is undisputed in the instant cases that prior to the expiration of the 1983 agreement, the Respondents, as was their practice in the negotiations of the two preced- ing agreements, established bargaining parameters for Roberts Further, that Roberts had authority to negotiate an agreement with the Union within those parameters or within any subsequent modifications of the parameters made by Respondents The record also discloses that prior to the strike on 2 September, the parties met dili- gently to discuss their various proposals, although nn the latter part of July Roberts had occasion to complain in writing about the failure of the union representatives to be available for bargaining sessions. It should be noted at this point that the parties had seven bargaining sessions between 12 July and the final session on 31 August I credit the testimony of each of the Respondents that they made the cornerstone of their bargaining proposal the securing of mechanics' wages tied to productivity. 20 Sec 8(d) provides, in pertinent part to bargain collectively is the performance of the mutual obliga- tion of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negoti- ation of an agreement or any question arising thereunder, and the execution of a written contract incorporating any agreement leached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a con- cession 689 Each of the Respondents testified in a straightforward and candid manner Moreover, I take notice of the eco- nomic conditions which prevailed at that time in the automobile dealership business. Thus, I find their expla- nations plausible in that they had to find some means to make their service shops profitable in order to compete with nonunion dealerships . I do not credit the statement of Mitchell that Roberts told him at the first negotiation session on 12 July that the flat -rate wage proposal would "fall off the table" as negotiations proceeded. Rather, I find Roberts' denial to be more worthy of belief. Al- though Roberts' speech was impaired as a consequence of his stroke, he did not impress me as suffering from an impaired memory nor was his testimony inconsistent with his written statements about the events Thus, I find it highly improbable that Roberts would have made such a comment to Mitchell regarding this critical bargaining issue Moreover , I note that Mitchell made no mention of this statement by Roberts in the affidavit given to the Board agent investigating the Union's charges against the Respondents. Because the affidavit was given when the events were fresher in his memory, surely Mitchell would have mentioned this crucial statement if it had in fact been made by Roberts The record shows that in the bargaining sessions prior to the strike each side submitted proposals and counter- proposals . Respondents initially sought to eliminate two holidays, reduce rates of pay for service employees, change the insurance provisions , modify the grievance procedure, and to install a flat-rate system for the me- chanics. The Union sought wage increases across-the- board, changes in the workweek provisions, increased in- surance coverage , and changes in seniority and vacation provisions among other things . As the negotiations pro- ceeded, concessions were made by both sides on a number of issues. For example, Respondents accepted the Union's proposals on the modification of the griev- ance procedure, reduced its demand to eliminate two holidays to changing the day after Thanksgiving to a floating holiday, accepted the Union's moonlighting pro- vision, and sought to retain the current service employ- ees at their present pay level with a lower rate of pay for new hires in that category. The Union in turn dropped its workweek demands, its insurance demands, and reached agreement on the sick leave provision The record shows the sticking points were the holiday provi- sions, the seniority provisions, and the Respondents' flat- rate proposal. It is undisputed that the Union was adamantly opposed to any form of a flat-rate wage provision and adhered to this position throughout the negotiations prior to the strike It is equally apparent that Respondents felt just as strongly that they had to have some form of a wage pro- vision geared to productivity for the mechanics in any agreement arrived at by the parties. This is evidenced by the fact that the principals of the dealerships attended the bargaining session on 24 August, contrary to their bargaining practices, in an effort to convince the union bargaining committee of their economic need for such a wage provision. The Union, however, refused to submit any counterproposals involving a flat-rate system and 690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD continued to request across-the-board, albeit reduced, wage increases . Indeed, Miller stated the Union would rather lose its members than accept a flat-rate wage pro- vision. Thus I find that when the union membership rejected Respondents' final offer on 31 August and voted to strike, the negotiations were deadlocked and bargaining was at an impasse . There had been seven meetings be- tween the parties up to this point; six of which entailed in-depth discussion of the issues under negotiation. The respective positions of the parties were advanced in good faith and neither party was willing to move on the criti- cal issues . Indeed, Mitchell testified the members voted to reject Respondents' final offer because of the holiday and flat-rate proposals, and the record clearly establishes that Respondents were insistent that a flat-rate system was necessary for their continued operations. See Hi- Way Billboards, 206 NLRB 22, 23 (1973). Nor does the fact that concessions were made during the negotiations on other matters preclude a finding of impasse in the ne- gotiations here. It is more than evident that the flat-rate system was an issue of "overriding" importance in the negotiations and "the parties were still not close to reaching agreement" at the time of the rejection of Re- spondents' final proposal. E. L. duPont & Co., 268 NLRB 1075 (1984). I do not credit Mitchell's testimony that when he noti- fied Roberts of the rejection of Respondents' final pro- posal, Roberts stated Respondents wanted to get nd of the Union. Roberts specifically denied making such a statement and I find this denial worthy of belief. Mitch- ell's testimony in this regard appeared to me to be of- fered solely in an effort to support the Union's claim of wrongdoing on the part of Respondents rather than as an accurate recital of the events that occurred. In light of the above, I find Respondents were free to make the unilateral changes after the expiration of the then-existing collective-bargaining agreement. Because these changes were consistent with the terms of Re- spondents' final proposal to the Union, no violation of the Act has been committed. Western Publishing Co., 269 NLRB 355 (1984); E. I. duPont & Co., supra. Regarding the negotiations after the strike commenced on 2 September, I find the General Counsel has also failed to demonstrate Respondents refused to bargain in good faith with the Union. The unrefuted testimony dis- closes that a number of the striking employees crossed the picket line during the course of the strike and re- turned to work. On 8 September Roberts met with the union representatives and explained the operation of the flat-rate system implemented by Respondents. They met again on 12 September with the principals of the Re- spondents present to explain in detail the operation of the flat-rate system they had put into effect. As Miller testi- fied, it was not a straight flat-rate wage provision but rather was one with an incentive containing a guaranteed base for the mechanics. Respondents also insisted on an amnesty provision for those employees who crossed the picket line. Thereafter, Respondents determined their bargaining position with the Union was now stronger because of the faltering strike and they withdrew the prior final offer. This is evidenced by Roberts' candid statements to the mediator at the meeting on 20 September that Respond- ents withdrew their prior offer because they had beaten the Union. Roberts and the union representatives met with the Federal mediator on 20 and 28 September. At these meetings, Roberts clearly indicated Respondents would make further changes in the proposals last offered to the Union. I do not draw the conclusion urged by the General Counsel that Roberts' statement to Miller at the 28 Sep- tember meeting indicates he lacked authority to negotiate an agreement with the Union. Miller testified he ques- tioned whether Roberts had authority to negotiate an agreement and Roberts stated his hands were tied by Re- spondents. Not only did Roberts deny making such a statement but he also denied his bargaining authority was ever questioned by the union representatives. I credit Roberts' denial and find that he made no such statement to Miller at this meeting But assuming such a statement was made, it does not indicate any change in the bargain- ing authority Roberts possessed in negotiating with the Union. It is evident that at the time of this meeting Re- spondents were formulating new parameters for Roberts' negotiations with the Union based on their new-found bargaining strength The record also establishes that Roberts informed the union representatives and the medi- ator that further proposals would be submitted on behalf of the Respondents. Were such a statement made (a fact which I do not find), it would not indicate that Roberts lacked bargaining authority but, rather, would buttress the testimony of Respondents and Roberts that once they established the new bargaining parameters, Roberts pos- sessed full authority to negotiate an agreement with the Union. Subsequent meetings were scheduled with the media- tor on 6 October and 7 November. The first was can- celed by the mediator and the 7 November meeting was canceled by Roberts because of a scheduling conflict. The meeting on 6 December also was canceled by Rob- erts because Respondents had not secured sufficient in- formation to formulate their revised health and welfare proposal to submit to the Union I do not view any of the cancellations by Roberts as evidence of dilatory tac- tics during negotiations. Rather, it is more than apparent that the cancellations were caused by valid and legiti- mate reasons. Therefore, I do not infer from this con- duct, contrary to the contentions of the General Counsel, that Respondents were seeking to avoid reaching an agreement with the Union. In this same vein, I do not credit the testimony of Mitchell that Roberts stated during the 16 November meeting with the mediator that Mitchell was naive if he thought the Respondents would sign an agreement with the Union, and that Roberts would negotiate with the Union for a year and never reach an agreement. It is evi- dent from the negotiations conducted after the expiration of the then-existing collective-bargaining agreement that Respondents were desirous of securing an agreement with the Union, but on terms reflecting their new bar- gaining strength. I find it highly implausible and, indeed, improbable that Roberts, an experienced labor consult- SALINAS VALLEY FORD SALES ant, would have made such a statement in the presence of the Federal mediator. In my judgment, Mitchell's tes- timony in this regard was no more than an attempt to salvage a bad situation by seeking to attribute wrongdo- ing to Respondents through their negotiator Moreover, Roberts' testimony that Respondents wanted to negotiate a new agreement after the strike terminated was fuither substantiated by the testimony of Piper. Piper credibly testified that after the strike faltered, Respondents felt they were in a position to insist on a 100-percent flat-rate system for the mechanics but abstained from doing so be- cause they wanted to reach an agreement with the Union Accordingly, I do not credit Mitchell's testimony concerning the statements he attributed to Roberts during the meeting on 16 November. Nor do I find Respondents were engaging in bad-faith bargaining by withdrawing their previous final proposal and seeking to gain even more favorable terms in their subsequently modified proposals submitted to the Union. It is well established that once a union has lost a strike during negotiations for a collective-bargaining agree- ment, the employer can capitalize on its new-found eco- nomic strength "to retrieve some of the economic bene- fits it lost in prior contracts" without violating the good- faith bargaining provisions of the Act World Publishing Co., 220 NLRB 1067, 1071 (1975), OMalley Lumber Co., 234 NLRB 1171 (1978); Hickinbotham Bros., 254 NLRB 96 (1981). Therefore, the new proposals submitted to the Union by Respondents, while seeking modification of the union-security and health and welfare provisions and in- vesting management with discretion to establish the workweek and hours of work, were not so regressive as to be evidence of bad-faith bargaining. Rather, the subse- quent proposals merely reflected Respondents' awareness that the economic strength had shifted to them and, as a consequence, presented an opportunity to secure even more favorable terms in any agreement reached with the Union In sum, I find Respondents' overall bargaining con- duct, prestrike and poststrike, does not demonstrate that Respondents engaged in any unlawful conduct in negoti- ating with the Union Accordingly, the allegations of the amended consolidated complaint relating to Respondents' alleged violations of Section 8(a)(5) of the Act must be dismissed for lack of proof by a preponderance of the credible evidence in the record. It follows, therefore, that the strike herein was an eco- nomic strike engaged in by the employees of the Re- spondents in support of the Union's bargaining demands. Because it is found that Respondents did not commit any unlawful acts during the strike, the strike remained an economic strike through its termination by the Union. Hence, the reinstatement rights of the striking employees must be determined under the standard applied to eco- nomic strikers. As noted, during the hearing, the General Counsel contended only those strikers about whom testimony was presented were alleged to be discriminatees and the par- ties stipulated dismissal of the complaint allegations con- cerning all other named strikers. As further noted, the General Counsel moved in his brief to dismiss the allega- tions relating to additional strikers named in the com- 691 plaint. This motion is granted Therefore, the reinstate- ment issues remaining in this matter involve only three striking employees of Respondent Valley Ford. The law regarding reinstatement rights of economic strikers is set forth in the Board's decision in the Laidlaw case,21 based on the Board's application of the Supreme Court's decisions in the Fleetwood Trailer,22 and Great Dane Trailers cases.23 Laidlaw holds as follows regarding the reinstatement rights of economic strikers at 1369- 1370: . . . economic strikers who unconditionally apply for reinstatement at a time when their positions are filled by permanent replacements: ( 1) remain em- ployees; and (2) are entitled to full reinstatement upon the departure of replacements unless they have in the meantime acquired regular and substan- tially equivalent employment, or the employer can sustain his burden of proof that the failure to offer full reinstatement was for legitimate and substantial business reasons. Applying these principles to the facts found in the in- stant cases, I find Respondent Valley Ford has not vio- lated the Act regarding the reinstatement rights of the three alleged discriminatees. First, the undisputed evi- dence establishes that employee Boranda was permanent- ly replaced during the strike. When the replacement de- parted, Valley Ford's manager was aware that Boranda was employed on a job receiving higher wages than he received in Valley Ford's employ. In addition, Respond- ent hired a new employee for this position who pos- sessed greater skills, i.e, the employee could do both light and heavy frame work while Boranda was only qualified as a light frame mechanic. Laidlaw provides that when an unconditional applica- tion to return to work is made on behalf of economic strikers, the employer has an obligation to seek out the striking employees as their positions are vacated by per- manent replacements unless the strikers have acquired regular and substantially equivalent employment or the employer establishes a legitimate and substantial business reason for not doing so. Here, Boranda did in fact have equivalent employment which paid higher wages and Respondent's management was aware of this. Further- more, the new hire possessed greater skills for the vacan- cy thereby enabling Respondent to utilize him in an en- larged work capacity. In my judgment, these undisputed facts not only demonstrate that Respondent Valley Ford had a legitimate and substantial business reason for not seeking out striker Boranda but also establish that the striking employee had secured regular and substantially equivalent employment elsewhere. I find, therefore, that Respondent Valley Ford's Laidlaw obligation had been met in these circumstances and it was under no duty to recall economic striker Robert Boranda to the vacated position. 21 Laidlaw Corp, 171 NLRB 1366 (1968), enfd 414 F 2d 99 (7th Cir 1969) 22 NLRB v Fleetwood Trailer Co., 389 U S 375 (1967) 11 NLRB v Great Dane Trailers, 388 U S 26 (1967) 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Similarly, Respondent Valley Ford was aware that striker Larry Robinson was regularly employed as a me- chanic at another dealership at the time his permanent replacement left Respondent 's employment. Additionally, Respondent's business requirements dictated that it now fill this position with a mechanic who possessed work experience on Fabco trucks; a work experience which Robinson did not possess. In light of the change in the job requirements and considering that Respondent's man- agement was aware that Robinson had secured regular and substantially equivalent employment elsewhere, I find no Laidlaw violation was committed when Valley Ford failed to offer the vacated position to Robinson. Finally, regarding Ivan San Nicholas , Respondent's management was aware at the time his position became vacant than San Nicholas had secured employment at an- other dealership and was contented with his new job. As with the other alleged discriminatees, I find San Nicholas had acquired regular and substantially equivalent em- ployment and Respondent was not obligated to seek out this striking employee as his position became vacant. In view of the above, I find the record here does not establish that Respondent Valley Ford discriminated against any striking employee in terms of satisfying its re- instatement obligation under the Laidlaw principles. Ac- cordingly, these allegations of the amended consolidated complaint are dismissed. CONCLUSIONS OF LAW 1. Respondents, Salinas Valley Ford Sales, Inc.; Bob Wills Dodge, Chrysler/Plymouth, Inc.; Segel Enter- prises, Inc., d/b/a Town & Country Olds/Cadillac/- Honda are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Association of Machinists and Aero- space Workers, AFL-CIO, District Lodge No. 98, Local Lodge No. 1824 is a labor organization within the mean- ing of Section 2(5) of the Act. 3. Respondents herein have not engaged in any of the unfair labor practices which are alleged in the amended consolidated complaint for the reasons which have been set forth above. [Recommended Order for dismissal omitted from pub- lication.]