Schaeff Namco, Inc.

SCHAEFF NAMCO, INC Schaeff Namco, Inc. and Lodge 1426, International Association of Machinists and Aerospace Work- ers, AFL-CIO. Case 18-CA-8537 31 July 1986 DECISION AND ORDER BY MEMBERS JOHANSEN , BABSON, AND STEPHENS On 26 November 1984 Administrative Law Judge Martin J. Linsky issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief, and the General Counsel filed cross- exceptions and a supporting brief. 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, I and conclusions only to the extent consistent with this Decision and Order. As set forth more fully in the judge's decision, the Respondent and the Union were parties to a collective-bargaining agreement effective from 1 September 1981 to 31 August 1984. Included in the agreement was article XX, section 3, a wage-re- opener clause for the third year, which provided: On August 1, 1983, the contract shall be re- opened for a period of thirty (30) days, which period shall end at midnight, August 30 (Aug. 30-31). The sole topic for negotiations shall be hourly wages. During this period either party may initiate economic action to support its po- sition, i.e., a strike or lockout, but if no action is taken within the opening period, the provi- sions of Article III shall be effective on August 31, 1983. If no action is taken and no agreement is reached, the Company shall put into effect its wage offer for the next year ef- fective September 1, 1983.2 In August 19833 the Respondent contacted the Union on several occasions in an attempt to post- pone the wage-reopener period. The Respondent informed the Union by letter on 30 August that if the Union would not agree to postpone the wage- reopener negotiation period, the Respondent would i The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 2 Art III, set forth fully in the judge's decision, is a broad clause pro- hibiting strikes, lockouts, or boycotts during the term of the agreement. a Unless otherwise indicated, all dates hereafter refer to 1983. 1317 put a 10-percent wage reduction into effect during the first full pay period in September. Although the parties met on 31 August, they were unable -to reach agreement on either a wage rate or -a post- ponement of the wage-reopener period. The Re- spondent then put the 10-percent wage reduction into effect. Thereafter, the Respondent and the Union filed unfair labor practice charges against each other al- leging that the other had failed to bargain in good faith during the wage-reopener negotiations. On 20 October the parties entered into a settlement agree- ment which provided that the parties would with- draw their charges; the Respondent would reinstate the old contract wages and pay employees for any wage loss resulting from the 10-percent wage re- duction; and article XX, section 3, of the contract would be modified as follows: On November 1, 1983, the contract shall be re- opened for a period of 14 days, which period shall end at midnight, November 14. The sole topic for negotiations shall be hourly wages. During this period either party may initiate economic action to support its position, i.e., a strike or lockout, but if no action is taken within the opening period, the provisions of Article III shall be effective on November 15, 1983. If no action is taken and no agreement is reached, the Company shall put into effect its wage offer for the next year effective Novem- ber 16, 1983. The parties met only twice during this 14-day re- opener period. The first meeting on 9 November lasted only 10 to 15 minutes, during which the Re- spondent proposed a 10-percent wage reduction and the Union agreed to present the Respondent's proposal to its membership. On 11 November a majority of the employees voted to reject the Re- spondent's wage reduction offer and to authorize strike action. On the same day, the Union notified the Respondent of the rejection of the offer, the authorization of strike action, the notification to the Federal Mediation and Conciliation Service (FMCS) of the dispute, and the Union's availability for negotiations during the week of 14 November. The parties next met on 14 November. At that meeting, the Respondent once again offered a 10- percent reduction in wages. The Union responded with an offer to freeze wages and suggested that, if wages were reduced, the contract should contain a provision to build back wages. The Respondent re- jected the offer of a wage freeze and stated that al- though it would consider a build back wage provi- sion, that provision would have to be linked to in- creased sales. When the Respondent proposed to 280 NLRB No. 150 1318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD extend negotiations for 1 more week, the Union in- dicated that it would have to check with its attor- ney before it could respond. The Respondent stated that it viewed the Union's response as a re- jection of the proposal to extend negotiations. The Union then raised a question concerning the em- ployees' right to strike in view of the notice re- quirements of Section 8(d)4 of the Act and the no- strike clause in the contract. Although the Re- spondent had provided the Union with a written memo setting forth the Respondent's view of the employees' rights under Section 8(d), the negotia- tion session ended with the Respondent promising to answer the Union's question whether the em- ployees would have the protection of the Act if they went out on strike. The Respondent never contacted the Union on this matter. That afternoon the Union sent a certified letter to the Respondent requesting a variety of financial information to aid its evaluation of the wage reduc- tion proposal. The letter was delivered on 16 No- vember, after the wage-reopener period had closed. The Respondent refused to provide the informa- tion, stating that although some of the requested in- formation might have been relevant during negotia- tions, negotiations had concluded pursuant to the language of the parties' settlement agreement. The Respondent then implemented its 10-percent wage reduction effective 21 November. The judge found that the Respondent had violat- ed Section 8(aX5) and (1) of the Act by unilaterally implementing the wage reduction without having bargained in good faith to impasse during the wage-reopener period. He reasoned that by negoti- ating during only two brief sessions, by failing to modify its bargaining position, by considering the Union's reasonable request to consult an attorney before responding as a rejection of its offer to extend negotiations, and by failing to respond to the Union's question concerning the application of 4 29 U.S.C. § 158(d). That section, in pertinent part, provides that a party to a collective-bargauung agreement may not terminate or modify that agreement unless it: (1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the ex- piration date thereof, or in the event such contract contains no expi- ration date, sixty days prior to the time it is proposed to make such termination or modification; (2) offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modification; (3) notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the existence of a dispute, and simul- taneously therewith notifies any state or Territorial agency estab- lished to mediate and conciliate disputes within the State or Terri- tory where the dispute occurred, provided no agreement has been reached by that time, and (4) continues in full force and effect , without resorting to strike or lockout, all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later Section 8(d), the Respondent had not bargained in good faith to impasse. The judge also found that in light of his conclu- sion that the Respondent had not bargained in good faith to impasse, the Respondent's refusal to provide the requested financial information consti- tuted an independent violation of the Act. Al- though the judge concluded that it was unneces- sary to address whether the requirements of Sec- tion 8(d) applied because of his finding of a viola- tion, he stated that Section 8(d) would appear to apply. The Respondent excepts to the judge's find- ings that it did not bargain in good faith to impasse and that Section 8(d) applies in this situation. We find merit in the Respondent's exceptions. Contrary to the judge, we find that the record fails to support a finding of bad-faith bargaining on the Respondent's part. In determining whether a party has negotiated in good faith, the Board scru- tinizes the totality of the party's conduct. See, e.g., Pipe Line Development Co., 272 NLRB 48, 49 (1984). Article XX, section 3, of the parties' con- tract, as modified by the 20 October settlement agreement, limited negotiations to the sole topic of hourly wages. It also set forth a specific time limit of 14 days in which to reach an agreement. The first session lasted only 10 or 15 minutes because the Union terminated the meeting in order to con- sult its membership regarding the Respondent's wage reduction offer. In light of these facts, we do not find two brief negotiation sessions to be evi- dence of bad-faith bargaining. Moreover, during the second session the Respondent offered to extend the negotiations for another weeks and stated that it would consider a wage build back provision. Finally, the Respondent's failure to modify its bargaining position is not bad-faith bar- gaining because an adamant insistence on a bargain- ing position is not itself a refusal to bargain in good faith. See, e.g., Times Herald Printing Co., 221 NLRB 225, 228 (1975); Atlanta Hilton & Tower, 271 NLRB 1600, 1603 (1984). Considering the totality of the Respondent's conduct, we cannot say that the Respondent bargained in bad faith during the wage-reopener period. We also disagree with the judge's conclusion that the Respondent could not unilaterally imple- ment its wage reduction because the parties were not at impasse. Assuming arguendo that the parties were not at impasse, we nevertheless find that the 5 Although the Respondent treated the Union's request to consult its attorney before responding as a rejection of this offer, we do not find this action to be evidence of bad-faith bargaining because the negotiations were scheduled to terminate later that day pursuant to the contract. Moreover, the Respondent had no obligation to extend this offer and the Union did not accept the offer SCHAEFF NAMCO, INC. parties' contract permitted the Respondent to im- plement its final offer of a 10-percent wage reduc- tion. Specifically, the language of article XX, sec- tion 3, as modified by the settlement agreement, opened the contract for hourly wage negotiations for 14 days, "which period shall end at midnight, November 14." The parties thus contemplated a limited amount of time in which to negotiate the third-year wage rates. The contract further provid- ed that if neither party had initiated economic action and an agreement concerning hourly wages had not been reached by midnight on 14 Novem- ber, the Respondent "shall" put its wage offer into effect. As the record demonstrates, the parties had not reached an agreement on the third-year wage rates nor had either party initiated economic action6 by the specified date. Pursuant to the agreed-to contractual language, the Respondent was required to put its wage offer into effect. Ac- cordingly, we find that regardless of whether the parties otherwise were at impasse in their negotia- tions, the parties' contract permitted the Respond- ent to implement its wage reduction offer.7 In light of our conclusion that the Respondent bargained in good faith until negotiations ceased pursuant to the contract, we find that the Respond- ent did not violate the Act when it refused to pro- 6 The General Counsel argues that the Union's vote to authorize a strike constitutes initiation of economic action . She argues that in light of the waiting period provision of Sec. 8(d), the Union initiated all econom- ic action it could lawfully take In light of our discussion, infra, that Sec. 8(d) does not apply, we disagree. 7 EPE, Inc, 273 NLRB 1375 (1985), does not require a different result here. The parties in that case had agreed to a 15-1/2-month contract, sub- ject to annual renewal, which included a permissive wage-reopener pro- vision. That provision, which permitted either party to reopen the con- tract for a limited period to discuss wage rates, stated that either party could cancel the "Agreement" after a 5-day notice if the parties had failed to reach an agreement on new wage rates by 15 December 1983 The facts established that the company "reopened" the contract by pro- posing wage increases that already had been given unilaterally to the em- ployees and were later found to be unlawful by the Board. After the company stated that its proposal did not contain any new money because it could not afford any increases , the parties failed to meet and, therefore, they did not reach an agreement on a new wage rate by the specified date. The company then canceled the collective-bargaining agreement after giving the union the requisite 5-day notice The judge found that the company had violated Sec 8(a)(S) by dealing in bad faith with the union because it had not validly reopened the contract when it submitted a proposal that was only a demand for approval of its prior unlawful action. He further found that even if the company had validly reopened the contract, the company still could not have lawfully canceled the col- lective-bargauung agreement He noted that the parties were not at im- passe, the wage-reopener provision by its terms permitted cancellation of only the wage-reopener agreement and not the entire collective-bargain- ing agreement, and the parties had not complied with the notice provi- sions of Sec 8(d). The Board in EPE adopted the judge's conclusions concerning the ab- sence of impasse and the noncompliance with Sec. 8(d), but found it un- necessary to rely on his conclusion that the wage -reopener provision did not permit the company to cancel the entire collective-bargaining agree- ment. Here, by contrast, we find no bad-faith bargaining, and we find that the contractual language gave the Respondent the right to imple- ment its wage reduction regardless of whether the parties had reached impasse. 1319 vide the Union with the requested financial infor- mation. The Union requested the information to aid its consideration of the Respondent's wage reduc- tion offer. The Respondent received the request after midnight on 14 November. Under the lan- guage of the contract, negotiations had ceased at that point and the Respondent was obligated to im- plement its wage offer. Consequently, the Union's request was no longer relevant to its bargaining duties, and the Respondent's refusal to provide the information was justified. We next turn to a consideration of whether the Respondent violated Section 8(d) of the Act by its unilateral implementation of its wage reduction offer. Citing the Supreme Court's opinion in NLRB v. Lion Oil Co., 352 U.S. 282 (1957), the General Counsel argues that the notice and waiting provi- sions of Section 8(d) apply to midterm wage-re- opener provisions such as article XX, section 3, of the parties' contract. Relying on the fact that the Respondent unilaterally implemented its wage re- duction only 9 days after the Union notified the FMCS of its intention to strike, the General Coun- sel contends that the Respondent's action violated the waiting requirements of Section 8(d)(4).8 Alter- natively, she argues that because Section 8(d)(4) prohibited the Union from striking, the Union initi- ated all economic action it could lawfully take when it authorized a strike. According to this argu- ment, the contract's wage-reopener provision (art. XX, sec. 3) therefore precluded the Respondent from implementing its wage offer because the Union initiated economic action during the relevant 14-day period. Contrary to the General Counsel, we find that Section 8(d) does not apply for the reasons set forth below. Although the Supreme Court in Lion Oil de- clared that the provisions of Section 8(d) apply to contract-reopener clauses, we find that the Court was addressing reopener clauses which permit a modification or termination of the contract.9 Indeed, Section 8(d) by its terms presupposes that the notice and waiting provisions are activated only when a party seeks to terminate or modify the contract.' ° In this case, however, no termination or modification of the contract occurred. The par- ties specifically left open the wage rates for the 8 See fn 4. 9 The contract considered in Lion Oil specifically permitted either party to "amend" the terms of the agreement , and the Court found that the union gave the company notice of its desire to "modify the contract." 352 U.S at 286 10 Sec 8(d), in pertinent part, states that "the duty to bargain collec- tively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modifi- cation" complies with the notice and waiting provisions of Sec 8(d) (em- phasis added) 1320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD third year and provided for a limited period of ne- gotiations in which to establish the new rates. In the event that the parties failed to reach an agree- ment or initiate economic action in a specified period, the contract provided that the Respondent "shall" implement its wage offer. Accordingly, when the Respondent implemented the wage re- duction, it did not modify the contract's terms. Rather, it acted pursuant to the contract's terms." If the Union had struck in support of its wage offer, it similarly would not have violated Section 8(d) because its wage offer would not constitute a modification of the contract. Instead, the strike would have occurred in order to obtain an objec- tive which the contract had not settled (the third- year wage rates). The procedural requirements of Section 8(d) therefore would have been inapplica- ble. See Mine Workers Local 9735 v. NLRB, 258 F.2d 146 (D.C. Cir. 1958). Moreover, an employee strike in support of the Union's position on third- year wage rates would not have resulted in the loss of employee status because the strike would not have sought to terminate or modify the contract. See Mastro Plastics Corp. v. NLRB, 350 U.S. 270 (1956). We therefore find that in light of the specific contractual language presented in this case, the provisions of Section 8(d) are inapplicable because neither party terminated or modified the contract. Accordingly, it was unnecessary for the Respond- ent to comply with the procedural requirements of Section 8(d) when it implemented its wage reduc- tion. Furthermore, the Union could have lawfully struck in support of its third-year wage offer during the 14-day reopener period. The Union therefore did not initiate all of the economic action it could have lawfully taken. The contract there- fore required the Respondent to implement its wage offer because the parties had neither reached an agreement nor initiated economic action. We conclude that the Respondent bargained in good faith during the wage-reopener negotiations and did not violate the Act when it unilaterally im- plemented the 10-percent wage reduction. We shall therefore dismiss the complaint in its entirety.' z 11 We do not agree with the General Counsel's contention that the 10- percent wage reduction modified the wage rates in effect pursuant to the settlement agreement. The settlement agreement, winch reinstated the second-year wage rates, was an attempt to place the parties where they were before the expiration of the initial wage-reopener period. The fact remains, however, that the contract did not set a wage rate for the third year. The Respondent's implementation of a third-year rate, in accord- ance with the contract's provision, therefore could not modify a third- year wage rate because no such rate existed. 12 During the hearing, the judge permitted the General Counsel to in- troduce into evidence, without written consent, a letter written by the Respondent's counsel to the Regional Director. The Respondent has ex- cepted to the judge's failure to find that the letter's introduction into evi- dence violated the Board's Rules and Regulations. In reaching our con- ORDER The complaint is dismissed. elusion that the Respondent did not violate the Act, we do not rely on the contents of that letter. We therefore find it unnecessary to address the merits of the Respondent's exception. Everett Rotenberiy, Esq., for the General Counsel. Soren S. Jensen, Esq., of Omaha, Nebraska, for Respond- ent. DECISION STATEMENT OF THE CASE MARTIN J. LINSKY, Administrative Law Judge. The trial of the complaint was held on July 16, 1984, in Sioux City, Iowa. The complaint had previously issued on June 18, 1984, by authority of the General Counsel for the National Labor Relations Board and was signed by the Acting Regional Director for Region 18. The complaint was issued following the filing of a charge by Lodge 1426, International Association of Machinists and Aero- space Workers, AFL-CIO (the Union) on November 25, 1983 . The complaint alleges that Schaeff Namco, Inc. (Respondent) violated Section 8(a)(1) and (5) of the Na- tional Labor Relations Act by failing to bargain in good faith with the Union in refusing to turn over financial and other information to the Union and by implementing a 10-percent wage reduction for unit employees. On the entire record in this case , to include posthear- ing briefs filed by the General Counsel and Respondent, and on my observation of the demeanor of the witnesses, I make the following FINDINGS OF FACT' 1. JURISDICTION Respondent admits and I find that it is an employer en- gaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. Further, Respondent admits and I find that it is an Iowa corporation with an office and place of business in Sioux City, Iowa, where it is en- gaged in the manufacture of farm machinery and imple- ments. II. LABOR ORGANIZATION Respondent admits and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES Respondent and the Union were parties to a collec- tive-bargaining agreement effective from September 1, 1981, to August 31, 1984. The agreement fixed wages for the first 2 years of the contract and contained a wage- reopener clause for the third year of the contract. 1 The General Counsel's motion to correct transcript is noted and cor- rected. SCHAEFF NAMCO, INC. Article XX, section 3 (the wage-reopener clause), of the contract provided as follows: On August 1, 1983, the contract shall be re- opened for a period of thirty (30) days, which period shall end at Midnight, August 30 (Aug. 30- 31). The sole topic for negotiations shall be hourly wages. During this period either party may initiate economic action to support his position, i.e., a strike or lockout, but if no action is taken within the open- ing period, the provisions of Article III shall be ef- fective on August 31, 1983. If no action is taken and no agreement is reached, the Company shall put into effect its wage offer for the next year effective September 1, 1983.2 During the wage reopener of August 1983 the parties were unable to reach agreement regarding either a new wage rate or whether to postpone negotiations on the wage reopener to a later date. Respondent, on August 31, 1983, put into effect a 10-percent wage reduction. In September 1983, both Respondent and the Union filed unfair labor practice charges against the other with the Board. Each alleged that the other had failed to bargain in good faith during the wage reopener. On October 20, 1983, the parties entered :nto a stipula- tion that settled the unfair labor practice, charges each had filed. The agreement provided, inter alia, that both Respondent and the Union would withdraw the charges they had filed. Further, Respondent would reinstate the wage rate as of August 30, 1983 (prior to the 10-percent wage rate), and make the employees whole for any loss of wages resulting for the 10-percent wage reduction. The parties also agreed to modify article XX, section 3, of their contract to provide as follows: On November 1, 1983, the contract shall be re- opened for a period of 14 days which period shall end at midnight, November 14. The sole topic for negotiations shall be hourly wages. During this period either party may initiate economic action to support his position, i.e., a strike or lockout, but if no action is taken within the opening period, the provisions of Article III shall be effective on No- vember 15, 1983. If no action is taken and no agree- ment is reached, the Company shall put into effect its wage offer for the next year effective November 16, 1983.9 2 Art III provided as follows: Article III Prohibition against Strikes, Lockouts or Boycotts Section 1. During the term of this agreement there shall be no strike, boycott, work stoppage, slowdown, sympathy strike or sus- pension or dimunition of work on the part of the Union or its membrs or any employee in the bargaining unit, nor shall there by any lockout on the part of the Company Section 2. The Union and its members further agree that they will in no way interfere with the business of the Company by sanctioning or conducting a boycott on the handling of goods procured from a source or destined to a point where a labor controversy may exist. It seems clear that the parties inadvertently failed to specifically change the reopener period from 30 days (August 1-30) to 14 days (No- 1321 Lastly, the stipulation settling the previously filed unfair labor practice charges provided that "The Union and the [Respondent] agree that in no event will wages be reduced in excess of 10 percent. Thereafter, the parties met on only two occasions, No- vember 9, 1983, for approximately 10 minutes, and on November 14, 1983, for approximately 1 hour. Respond- ent's only position was that a 10-percent wage reduction had to be agreed to by the Union because of the dire economic condition of Respondent. Respondent and the Union failed to reach an agreement concerning wages. Following the second meeting, the Union sent a letter re- questing financial data to Respondent which is set out at footnote 4.4 Respondent, without further contact with vember 1-14). The clear intent of the parties was that the reopener period would extend from November 1 through 14, 1983 See the D.C. Exh. 3. 4 The body of the letter provided, in pertinent part, as follows: This is pursuant to your recent request for a reduction in wage rates existing in the current labor Agreement between LAM Local 1425 and Schaeff-Namco. It should be pointed out from the outset that the IAM opposes all efforts to cut wages and benefits which were gained over the years through good-faith bargaining. Further, before the IAM can serious- ly consider such a request, it is necessary that we be furnished cer- tam information for operations at the plant . Such information should include annual data for each year for a period of not less than five years, plus comparable data that might be available for 1983. Specifically, the information required, for both the Company as a whole and the specific plant involved , is as follows: (1) Most recent available balance sheet with details as normally prepared by the Company. (2) Revenue and cost breakdown as follows, for the past five years: a. Revenues: Actual sales separated from any other income, such as sales of assets, investment income, etc. When feasible, include data in the number of units of production: Le„ value of shipments, units produced, etc. b. Costs: This should include a detailed breakdown (such as is normally contained in an auditor's supplementary report) of all costs of products sold, including administrative and selling ex- penses. This data should include wages, together with all fringe benefit costs (including pensions, insurance and payroll taxes) paid to members of LAM Local 1426 . Similar data should be provided for all nonrepresented employees. (3) Hours worked by a. Employees represented by IAM Local 1426 b Other hourly employees, and, c. All nonrepresented, salaried employees. (4) Copies of federal corporate income tax returns. (5) Copies of your reports for the Annual Survey of Manufactur- ers Reports (MA 100), or Form 1OK Reports of the SEC, which will tend to verify and confirm the revenue and cost data request- ed in item 2. (6) Any available operating and financial projections for the next year (7) Details concerning any cuts in wages and/or benefits of nonre- presented employees, including management personnel, initiated due to current financial situation. To repeat, the purpose of this and any other information which might be requested is to enable the Union to examine and analyze intelligently the extent to which labor costs affect the Company's current financial problems. The above-mentioned data will be treated on a confidential basis. Such data will be returned to the Company upon completion for our investigation, if desired. Further, the above information is being requested of and supplied by all other compa- nies seeking to enter "concession bargaining" with the JAM. 1322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Union, put into effect the 10-percent wage reduction, effective November 21, 1983. Respondent refused to furnish the bulk of the informa- tion requested by the Union on the grounds that al- though some of the information might be relevant during negotiations since negotiations were concluded and Re- spondent's last offer (and only offer) put into effect there were no more negotiations. The Union and the General Counsel claim that Re- spondent did not bargain in good-faith to impasse during the wage reopener and was therefore without authority to implement its last offer. Further, because the Union took action with a view toward a strike, it had initiated "economic action" within the meaning of article XX, section 3, of the contract and Respondent could not therefore put into effect its last wage offer. It is my conclusion that Respondent , if it had bar- gained in good-faith to impasse during the wage reopen- er period, would be legally entitled to put into effect its last offer, but in this case Respondent did not bargain in good faith to impasse during the reopener period, there- fore, it was without authority to put into effect the 10- percent wage reduction . The remedy, of course, would be for Respondent to return matters to the status quo ante, make the employees whole, and bargain in good faith. I note for the record that neither Respondent nor the Union have requested that the Board defer taking action in this case for the parties to seek resolution of the dis- pute through resort to the arbitral process . See United Technologies Corp., 268 NLRB 557 (1984). When the parties entered into the contract in Septem- ber 1981 , it seems clear that they envisioned the wage re- opener in August 1983 to concern itself only with how large a wage increase the bargaining unit employees should get and not with any sort of wage reduction. I credit the testimony of union negotiator Richard Stur- geon that during the negotiations in 1981 Respondent's spokeman Sam Jensen said with respect to the wage re- opener language (art. XX, sec. 3) "he said that if we did not strike the company reserved the right to put the wage increase into effect, but if you strike us you ain't going to get it." (Tr. 43.) In addition, Respondent, through Sam Jensen, wrote a letter to the Union on August 18, 1981, which clearly indicates that the wage reopener would concern itself only with a wage increase and not a wage reduction. (See G.C. Exh. 11.) Nevertheless, the language in the contract concerning the wage reopener is such that on its face a wage reduc- tion could result from the wage reopener talks. In addi- tion, when the parties settled their previously filed unfair labor practice charges in October 1983 and entered into a written stipulation, they agreed to a wage reopener in November 1983 which would be unlimited in regard to wage increases but as to wage decreases provided that "in no event will wages be reduced in excess of 10%." Although the contract specifies that Respondent shall put into effect its wage offer if no agreement is reached and no economic action, i.e., a strike or lockout, is taken, the contract does not prohibit Respondent from putting its last offer into effect if no agreement is reached but economic action has been initiated by the Union. Eco- nomic action is defined as a strike or lockout. The Union, as explained below, was not on strike when Re- spondent put into effect its last offer, nevertheless they had taken all the actions they could with a view toward going on strike without actually going on strike . In addi- tion, going on strike would have been illegal at the time the Respondent put its offer into effect (November 21) because 30 days had not expired since the Federal Medi- ation and Conciliation Service (FMCS) had been notified of the dispute between Respondent and the Union. The Union and Respondent, as noted earlier, had only two negotiating sessions during the November reopener. On November 9, 1983, Respondent and the Union met for approximately 10 minutes at the Howard Johnson Motel in Sioux City. Respondent made but one proposal, a 10-percent wage reduction, and the Union said it would present that proposal to its members. Two days later the proposals was presented to the membership and a strike vote was taken. Five of the six bargaining unit employees present voted to strike. At this time the unit varied between 5 and 16 in number . The Union, through Business Representative Richard Sturgeon, informed Re- spondent of the strike vote orally on November 11, 1983, and hand delivered a copy of a letter so advising Re- spondent that same day . The letter advised that the Union rejected Respondent's offer of a 10-percent wage reduction, that the Union was notifying FMCS of the dispute, that the employees had voted in favor of a strike, and that the Union was available to meet with Re- spondent to negotiate at any time during the week of November 14, 1983. On November 12, 1983, the Union sent a notice to the FMCS pursuant to Section 8(d) of the Act, i.e., the 30 days notice to FMCS which must be sent prior to the commencement of a strike or lockout when parties are terminating or modifying a collective- bargaining agreement. On November 12, 1983, Union Representative Stur- geon received a telegram at his home from Respondent setting up a meeting for November 14, 1983, at 9:30 a.m. Sturgeon called Coon, a representative of Respondent, to confirm that the Union would be at the meeting on No- vember 14. Coon at that time advised Sturgeon that Re- spondent had spoken with counsel and was waiving the written 30-day notice requirement to FMCS, the effect of which would be that if the employees went on strike Respondent would not consider them to be economic strikers and still employees and would not consider them to be striking in violation of Section 8(d) of the Act and, therefore, deprived of the protection of the Act as illegal strikers. The second and last negotiating session took place on November 14, 1983 . It lasted approximately 1 hour. Re- spondent did not modify its proposal of a 10-percent wage reduction. The Union proposed a 1-year extension of the contract and a 2-year wage freeze (i.e., a wage freeze for the third year of the 1981 to 1984 contract and for the 1-year extension). The Union suggested that if wages were cut, that a provision to build back wages be agreed on. Respondent said any build back would have to be tied to sales, that they would consider it, but Re- spondent said nothing further about this proposal. Re- SCHAEFF NAMCO, INC. spondent stuck to its one and only proposal of a 10-per- cent wage reduction. Respondent claimed its poor finan- cial picture mandated the wage reduction. Respondent presented no financial records or data to support its posi- tion, although the Union was undoubtedly well aware that in the prior 3 or 4 years the number of Respondent's employees had dropped from approximately 100 to ap- proximately 16. Respondent proposed that negotiations on the wage reopener be extended for 1 more week to November 21, 1983. The Union said it would have to consult with counsel before agreeing to the extension of negotiations. A reasonable request, but Respondent immediately said that because the Union was not promptly agreeing to extend negotiations, Respondent considered the proposal to extend negotiations to be rejected by the Union. During the meeting Union Representative Sturgeon was given a written memo by Respondent in which Respond- ent waived any rights it might have under Section 8(d) of the Act and stating that, in Respondent's opinion, no 8(d) notice was required to be given to FMCS. The memo did not address the "no strike no lockout" clause of the contract and its effect, if any, on the Union's right to strike. The November 14 meeting ended at approxi- mately 10:30 a.m. with one of Respondent's three repre- sentatives, Sam Jenson, promising to get back to Union Representative Richard Sturgeon about whether the em- ployees, if they went on strike, would still have protec- tion under the Act in light of the notice requirement to FMCS and the "no strike no lockout" clause of the con- tract. In other words, could the employees legally go on strike? I credit Sturgeon that Jensen did say he would get back to him over Jensen's less-than-clear denial that he said he would do so. (Tr. 160.) The Union returned to its office an prepared a letter requesting financial information from Respondent and sent the letter by certified mail that afternoon. Respond- ent implemented the 10-percent wage reduction effective November 21, 1983, and answered Respondent's letter by stating that, although the Union might be entitled to some of the requested data during negotiations, they were not entitled to it at that time because negotiations had concluded and Respondent was putting its last pro- posal into effect. It is my conclusion that Respondent was without au- thority to unilaterally implement the 10-percent wage re- duction unless they had first bargained in good faith to impasse during the reopener period, and I find that Re- spondent did not bargain in good faith to impasse during the reopener. Only two negotiating sessions occurred. The first one lasted 10 minutes. The second lasted ap- proximately 1 hour. Respondent never modified its posi- tion." The second and last session ended not with im- 6 T is case contrasts sharply with the Board 's recent decision in Bell Transit Co, 271 NLRB 1272 (1984), in which, although there were only three short negotiating sessions, the respondent had made three different proposals to the union . Each of the proposals was better then the one before for the employees, and the respondent implemented the best and last of its three proposals The Board found good-faith bargaining in Bell Transit Co. 1323 passe, but with Respondent's representative promising to get back to the union representative. The Respondent proposed to extend negotiations for 1 week, but consid- ered its proposal rejected when the union representatives said they wanted to consult with their attorney about an extension. Respondent's actions in this regard indicate it was not serious about further negotiations, and the Union's request to consult its attorney was most reasona- ble considering the 8(d) notice requirement issue and the "no strike no lockout clause" of the collective-bargaining agreement. More than 13 hours remained during the re- opener period (10:30 a.m. to 12 midnight, November 14), and Respondent never contacted the Union again, but simply implemented its proposal. Further, the uncontra- dicted testimony of Ronald Coon, Respondent's own witness, was that at no time during negotiations did any representative of either Respondent or the Union say that impasse had been reached. On the state of this record I cannot conclude that Re- spondent had exhausted the prospects of concluding an agreement. See Taft Broadcasting Co., 183 NLRB 475 (1967), petition for review denied 395 F.2d 622 (D.C. Cir. 1968). Because I conclude that Respondent could not unilat- erally implement its last offer as it had not bargained in good-faith during the wage reopener, I must conclude that good-faith bargaining should have continued. Ac- cordingly, when the Union sent its letter (which is set out at fn. 4) it was requesting relevant information to which it was entitled because Respondent was pleading inability to pay during the reopener, i.e., Respondent's representatives were asking for a wage reduction necessi- tated by Respondent's economic situation which was de- scribed as being "in distress, very bad." (Tr. 98.) Under these circumstances, the Union would be entitled to the financial data it requested in its letter. NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956). The remedy for these violations of Section 8(a)(5) of the Act, namely, the unilateral implementation by Re- spondent of a 10-percent wage reduction without bar- gaining in good faith with the Union and the failure to produce financial records and data relevant to Respond- ent's claim of inability to pay should be as follows: re- scission of the 10-percent reduction, commence bargain- ing in good faith, turn over the requested financial data to the Union, and make employees whole for any loss of earnings incured by the wage reduction. Lastly, Re- spondent should cease and desist from engaging in these or similar unfair labor practices. It is not necessary for me to address a matter discussed at length in the briefs of the parties, namely, whether the 8(d) notice requirement applies to midterm wage reopen- ers. It would appear that the 8(d) notice requirements do apply to midterm wage reopeners and that the parties cannot waive the applicability of Section 8(d) because the purpose of Section 8(d) is to allow Federal and state mediation services an opportunity to assist the parties in settling their differences so that the economic chaos and hardship caused by strikes and lockouts can be avoided. See NLRB v. Lion Oil Co., 352 U.S. 282 (1957). It is not necessary for me to address this issue because I have 1324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD concluded that even if the Union took strike action within the meaning of article XX, section 3, of the con- tract, Respondent was entitled to put its wage offer into effect on November 16, 1983, but only if Respondent bargained in good faith during the reopener period. Be- cause it did not bargain in good faith during the reopen- er, it violated the Act when it put their wage offer into effect. The record reflects that the Union did not, either 30 days after notice to FMCS or at any time, go on strike. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce, and in operations affecting commerce, within the meain- ing of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By unilaterally putting into effect a 10-percent wage reduction without bargaining in good-faith with the Union during a wage reopener and by refusing to produce relevant fmancial records requested by the Union to support Respondent's claim of financial inabil- ity to pay Respondent violated Section 8(a)(1) and (5) of the Act. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.]