Milwaukee Terminal Services, Inc.

MILWAUKEE TERMINAL SERVICES ]wilwaukee Terminal Services, Inc. and ,Teamsters "General" Local No. 200, affiliated with the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America. Case 30-CA-8684-1 6 January 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND CRACRAFT On 1 April 1986 Administrative Law Judge Richard A. Scully issued the'' attached decision. The Respondent filed 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 brief and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Milwaukee Terminal Services, Inc., Milwaukee, Wisconsin, its officers, agents, successors, and assigns, shall take the action set forth in the Order. Gerald McKinney, Esq., for the General Counsel. .John M. Loomis Esq., of Greenfield, Wisconsin, for the Respondent. Fred Perillo Esq., of Milwaukee, Wisconsin, for the Charging Party. DECISION RICHARD A. SCULLY, Administrative Law Judge. On a charge filed on 13 February 1985 by Teamsters "Gener- al" Local No. 200, affiliated, with the International Brotherhood of Teamsters, 'Chauffeurs, Warehousemen and Helpers of America (the Union), the Acting Region- al Director for Region 30 of the National Labor Rela- tions Board, issued a complaint on 4 April 1985 alleging that Milwaukee Terminal Services, Inc. (the Respondent) had committed violations of Section 8(axl) and (5) of the National Labor Relations Act (the Act). The Re- spondent filed a timely answer denying that it had com- mitted any violation of the Act. A hearing was held in Milwaukee, Wisconsin, on 25 and 26 June 1985 at which the parties were given a full opportunity to participate, to examine and cross-examine witnesses, and to present other evidence and argument. Briefs submitted on behalf of the General Counsel and the Respondent have been given due consideration. On the entire record and from my observation of the de- meanor of the witnesses, I make the following 282 NLRB No. 92 FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT 637 At all times material, the Respondent was a Wisconsin corporation with an office and place of business in Mil- waukee, Wisconsin, and was engaged in the business of providing local motor drayage services for other business enterprises. During the calendar year ended 31 Decem- ber 1984, the Respondent, in the course and conduct of its business, derived gross revenues in excess of $50,000 for the transportation of freight and commodities in interstate commerce pursuant to'arrangements ' with and as agent for various common carriers,operating between and among various States of the United States. The Re- spondent 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. II. THE LABOR ORGANIZATION INVOLVED the Respondent admits and I find that at all times ma- terial the Union has been a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts Since January 1982, the Union has been the exclusive collective-bargaining representative of the Respondent's employees in a unit consisting of all full-time and regular- part-time driver/dockmen at the Respondent's Milwau- kee, Wisconsin facility, excluding office and clerical em- ployees, salesmen, guards and supervisors. The parties' first collective-bargaining agreement was for the period 12 January 1982 through 12 January 1985. By letter dated 2 November 1984 the Union gave notice to the Respondent that it intended to negotiate changes in their agreement with respect to language, wages, and fringe benefits. The first negotiating session was held at the union hall on 4 December 1984, The Respondent was represented by General Manager G: Phillip Beitz and the Union by Business Representative Frank J. BUsalacchi and Ray- mond J. Ice, an employee and union steward. The meet- ing was brief with the Union presenting a list of its initial contract proposals, which called for a $1-per-hour in- crease in the $10.25 contract wage in the first year and increases of 50 cents per hour in each of 2 succeeding years and changes in the contract articles dealing with grievance and arbitration, seniority, funeral leave, sick days, vacations, holidays, health and welfare, workday and workweek, and IRA. The parties met again on 13 December and the Re- spondent presented its contract proposals, which did not include a specific wage offer, but indicated that wage rates "must be viewed in the context of total wage and benefit costs." The parties reached agreement on some of the proposed contract changes and agreed to "hold" others for further discussion. The next meeting was on 20 December. The Respond- ent presented a written analysis of the Union's wage and benefit proposals that -indicated that the Company had 638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD suffered a decline in productivity during the fourth quar- ter of 1984 and stated that it would need a 9.5-percent rate increase from Emery Worldwide , its principal cus- tomer providing approximately 95 percent of its business, in order to offset this decline in productivity and an ad- ditional rate increase of 5.97 percent to fund the Union's economic proposals. The analysis concludes with the statement that the Company feels it is extremely unlikely that it can obtain a 15.47-percent rate increase but may get a maximum of 8 percent . The Respondent offered a proposal freezing wages and weekly IRA contributions for 3 years at the then current levels, $10.25 per hour and $5 per week, respectively, and providing for an in- creased health and welfare benefit plan, the Milwaukee Area Truck Drivers (MATD) Plan B. The next negotiating session was on 4 January 1985.1 Beitz told the union negotiators that, if the Company could go to an alternative health and welfare program, he was sure that the Company could save 50 cents per hour, per man, and that he would apply that 50-cent sav- ings to the hourly wage, which would then remain the same for the duration of the contract. Beitz stated that he would issue a final offer at the next session. At the next meeting on 11 January , Beitz presented a written final offer containing several changes from the old contract that was to expire the next day, several of which had not been discussed previously by the parties. This final offer proposed a wage rate of $10.50 per hour after 30 days of employment. Along with the final offer was a written statement reiterating Beitz' previous pro- posal to increase the hourly wage to $10.75 if the alter- native health and welfare package the Company wanted was accepted. Beitz asked Busalacchi to take the Compa- ny's final offer to the, membership for ratification. Busa- lacchi responded that he felt the membership would reject this proposal. It was agreed that if the proposal were rejected the parties would continue to talk, that the Company would keep the benefits under the expiring contract in effect, and that the employees would not strike. On 13 January the employees held a meeting in which they voted to reject the Respondent's final offer. Busalacchi informed Beitz of the result of the vote on 14 January and another bargaining session was scheduled for 16 January. At that meeting, the parties went over the rejected offer and reached agreement on several points, while on others Beitz was to come up with clarifying language. At the end of the meeting, still unresolved were the issues of health and welfare, sick pay, and wages. The Union was seeking the MATD health and welfare plan, wanted to retain the sick pay provisions in the old contract, wanted something over and above the $10.25 per hour then in effect, and wanted the wage rates fixed throughout the 3-year, term of the contract without any reopeners. This meeting lasted approximately 2 hours and was described by Busalacchi as "excellent." At the next meeting on 28 January, the parties execut- ed a written extension of the prior contract through 10 February or the effective date of a new agreement, whichever occurred first. Beitz also submitted a revised i Hereinafter, all dates are in 1985 unless otherwise indicated. final offer, which included the changes that had been agreed to at the previous session, and proposed to con- tinue the expiring contract's terms with respect to health and welfare, sick days, holidays, IRA, and a wage of $10.25 per hour for the 3 years of the contract. Accord- ing to Busalacchi, during the course of that meeting the parties reached agreement on all the contract provisions including the $10.25-per-hour wage rate. However, Busa- lacchi told Beitz that he felt that he could definitely sell the contract to the membership if there were a wage in- crease in the first year. Beitz responded that he had a meeting scheduled with Emery Worldwide on 6 Febru- ary to seek a rate increase and that if he could secure an increase in rates then they could talk about an increase in wages. Beitz' testimony was that they agreed at this ses- sion on all issues except wages, but he acknowledged that he told Busalacchi that, if the Respondent got the rate increase it was seeking from Emery Worldwide, they could talk about a wage increase. The parties agreed to meet again on 7 February after Beitz' meeting with Emery Worldwide. Busalacchi told Beitz he would schedule a ratification meeting for 10 February and issued a notice of such a meeting on the following day. The parties met again on 8 February after Beitz' re- quest for a 24-hour delay in the meeting. Beitz asked to meet privately with Busalacchi at the union hall about a half-hour before the scheduled negotiation session. At this meeting Beitz handed, Busalacchi a letter, two con- tract proposals, one denominated "Final Offer" and the other "Alternative Final Offer," and a package of other documents. The letter from Beitz informed Busalacchi that the Respondent's request for a rate increase had been denied by Emery Worldwide and as a result the Respondent's wage offer was being reduced. The accom- panying "Final Offer" contained all the proposals Beitz and the union negotiators has agreed on on 28 January, as well as a wage rate of $6.75 per hour. The "Alterna- tive Final Offer" contained a $10.25-per-hour wage rate but reduced other benefits in an amount equal to the $3.50 wage reduction in the "Final Offer." Little was said during this private meeting and the formal negotiat- ing session with Ice in attendance followed immediately. Beitz presented the "Final Offer" as the Respondent's proposal and stated that the "Alternative Final Offer" was being presented not as a demand but as a possible way of mitigating the reduction in wages . Beitz stated that the Respondent had been unable to secure a wage increase from Emery Worldwide, that it found itself in "a surprisingly tight situation," and that this was all it was going to be able to do . Busalacchi told Beitz he would have the, membership vote on this proposal at the scheduled 10 February meeting and that he could call Beitz and inform him of the result of the vote . Busalac- chi told Beitz that he expected that the proposal would be rejected but that the membership would be on the job the following day and would not strike and that the par- ties were still negotiating. Busalacchi asked Beitz to let the Union's accountant examine the Respondent 's books and Beitz agreed. Beitz informed the union negotiators that if his offer were rejected on 10 February, he would implement its terms on 11 February. MILWAUKEE TERMINAL SERVICES 639 At the meeting on 10 February, `inembeshi Voted to reject the Respondent's latest final offer and Beitz was so informed in a telephone call from Ice, who said that the men would be at work as usual the next day. Beitz asked Ice if the, Union had a counterproposal and Ice re- sponded, "Not as of yet," He went on to say that the Union was open, for negotiation and that he hoped that the Company' was also. Beitz said that he was, and that he was sure they could come to some type of agreement. On 11 February, the Respondent implemented its final offer, which reduced wages by $3.50 per hour. b. Analysis and Conclusions Generally, Section 8(a)(5) prohibits an employer from unilaterally instituting changes regarding "wages, hours, and other terms and conditions of employment" , before reaching a good-faith impasse in bargaining.2 This is true even after the expiration of an existing contract - 3 An im- passe is considered to exist when bargaining has reached it state "at which the party asserting its existence is war- ranted in assuming that further bargaining would be futile."4 Whether there was an impasse is to be deter- mined according to the guidelines set forth in Taft Broadcasting CO., 5 as follows: Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good faith of the parties , in negotiations, the importance of the issue or issues as to which there is disagreement, the contemporaneous understanding of the parties as to the state of negotiations are all relevant factors to be considered in deciding Whether an impasse in bargaining existed. Applying the Taft Broadcasting criteria to the facts of this case, I find that the parties were not at impasse when the Respondent implemented its war offer on 11 February. There is no dispute that the question of wages was one of the most important issues being negotiated by the par- ties. Although their bargaining history was limited, in- volving a single prior agreement, the relationship was described by both Busalacchi and Beitz as , a good one and a previous Board charge filed by the Union had been deferred and resolved through arbitration. The in- stant negotiations had been carried on in an amicable, businesslike manner with each side making proposals, counterproposals, and concessions. As of 11 February, the date of implementation by the Respondent, there had been eight formal bargaining ses- sions. The Board does not apply "a rigid formula" in de- termining how many ' bargaining sessions are required before an impasse may exist, but considers the circum- stances in each case.6 The Union was entitled to , a rea- 2 NLRB v. Katz, 369 U.S. 736 (1962); Mihvaukee Spring Division, 268 NLRB 601 (1984). a Sacramento Union, 258 NLRB 1074 (1981); Dial Tuxedos, 250 NLRB 476 (1980). 4 E. I duPont & Co., 268 NLRB 1075 (1984); Patrick & Co., 248 NLRB 390 (1980). 5 163 NLRB 475,478 (1967). 6 Bell Transit Co., 271 NLRB 1272 (1984). sofiarle'opp`ortunityy",to study and evaluate the Respond- ent's final wage proposal.7 It did not get that opportuni- ty. The evidence is clear that at no time prior to 8 Feb- ruary did the parties ever discuss the possibility of a, re- duction in wages below the then current $10.25 per hour. The Respondent never proposed anything less than a "wage freeze" and had actually offered a wage in- crease ' of up to 50 cents an hour if the Union was willing to accept a less costly health and welfare package. The proposal of a $3 .50-per-hour reduction on 8 February was literally "out of the blue," without any prior warn- ing." It was perceived by the Union as "a stab in the back" and , was acknowledged by Beitz to be "so drasti- cally different from the levels we have been discussing throughout the negotiations." By the end of the negotiating session on 28 January, the parties had reached agreement on all aspects of a new contract except wages.9 Although not agreed to, it is clear that both sides contemplated a wage rate of not less than $10.25 per hour regardless of the outcome of the Respondent's 6 February meeting with Emery Worldwide concerning a rate increase.?° It appears that both Beitz and Busalacchi felt that if the Respondent se- cured enough of a rate increase from Emery Worldwide, there would be a higher wage rate, which Busalacchi be- lieved would help sell the contract , to the ',membership. The Respondent's 8 February proposal calling ' for a one-third reduction in hourly wages was a complete de- parture from the bargaining over wages that had gone on up to that point. Even accepting the Respondent's claim that this proposal was made in good faith and out of eco- nomic necessity, its demand that , the Union accept the $3.50-per-hour reduction in wages or an equivalent re- duction in other benefits or have it unilaterally imple- mented, denied the Union the full and adequate opportu- nity to negotiate that it was entitled to under the Act. i 1 At the meeting that Beitz arranged with Busalacchi before the formal bargaining session on 8 February, he showed, but did not give, Busalacchi copies of numerous documents and charts he had used in his presentation to Emery Worldwide, which allegedly justified the Re- spondent's position. Busalacchi testified that he paged 7 Crystal Springs Shirt Corp., 229 NLRB 4 (1977). 8 Although in response to the Union's initial proposal on 20 December 1984, Beitz stated that the Respondent would need a rate increase from Emery Worldwide in order to maintain the status quo with respect to wages, there is no evidence that the Respondent ever raised the possibili- ty of a wage reduction prior to 8 February or that any of its proposals, which called for a wage rate of $10.25 per hour or more , were made con- tingent on its obtaining a rate increase from Emery Worldwide.' On the contrary, Beitz testified that he was confident that the Respondent would get a rate increase at least sufficient to maintain the status quo, and its wage proposals reflected that confidence. 9 Although Busalacchi characterized their agreement as including a $10.25 wage rate, Beitz denied this and. I find it unlikely that they had actually agreed on it inasmuch as they had scheduled another session fol- lowing Beitz' meeting with Emery Worldwide to discuss whether the rate increase would be sufficient to permit a wage rate greater than $10.25. 10 After the 28 January session, Busalacchi had scheduled a 10 Febru- ary meeting . of the union membership to vote on the contract even before Beitz met with Emery Worldwide. ii See E. I duPont & Co, supra; Eddie's Chop House, 165 NLRB 861 (1967). 640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD through the documents but did not really understand a lot of them. The documents were not thereafter provided to the Union. Although Beitz agreed to the Union's re- quest to have its accountant look at the Respondent's books and records, this could not be done before the Re- spondent implemented its wage reduction proposal.12 Under the circumstances, the Union could not reason- ably be expected to evaluate the Respondent's proposal and engage in meaningful discussions in the time allot- ted.' 3 As for the contemporaneous understanding of the par- ties as to the state of negotiations, at the end of the bar- gaining session on 8 February Busalacchi informed Beitz that while he expected the Respondent's wage reduction to be rejected by the membership at the already sched- uled meeting on 10 February, there would be no strike and they would "continue to talk." For his part Beitz, on 10 February, informed Ice that he was still open for ne- gotiation and that he was sure they could come to some type of agreement. Beitz' testimony did not contradict that or establish that he believed the parties were at im- passe when he implemented the wage reduction. The Re- spondent argues that the Union was locked into an "un- realistic" position that rejected a wage freeze and insisted on a wage increase. The facts do not support this. The record establishes that the Union continued to seek a wage increase throughout the negotiations because, up until 8 February, the Respondent never, foreclosed the possibility that it would grant one. Beitz' letter of 8 Feb- ruary makes it clear that both sides had "hoped and ex- pected that some additional revenue would be forthcom- ing in the form of rate increases and that the company's position with respect to a new wage offer might change." Because the Respondent's minimum offer had been a wage freeze, he was obviously talking about a wage increase. It also establishes that, to the extent the parties had agreed on the other contract issues, they did so with the understanding that the wage rate would be no less than status quo. Until the Union had the opportu- nity to assimilate and analyze the Respondent 's wage re- duction proposal, its effect on the entire contract, and to formulate a position in the light of an entirely new and drastically different set of circumstances, there was no reasonable basis for the Respondent to conclude that fur- ther bargaining would be futile. The parties had not ex- hausted the likelihood of reaching an agreement. Given the fact that the possibility of a wage reduction had never even been discussed prior to 8 February, much of the bargaining that had occurred up to that point was ir- relevant and the parties were at a whole new starting point. I , conclude that on 11 February, when the Re- spondent unilaterally implemented its contract proposals, it did so in violation of Section 8(aX5) and (1) of the Act because it had not afforded the Union the bargaining op- 12 The Respondent seeks to fault the Union for not reacting to its wage reduction bombshell in the less than 72 hours it was allowed before implementation. However, the Respondent offered no explanation for its delay in pursuing its request for a wage increase from Emery Worldwide, although it knew, or should have known from the outset, that its bargain- ing position was dependent on the results of that request. 13 See Crystal Springs Shirt Corp., supra. portunity to which it was entitled and the parties were not at a bargaining impasse. CONCLUSIONS OF LAW 1. The Respondent, Milwaukee Terminal Services, Inc., is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By refusing to bargain collectively with the Union as the exclusive bargaining representative of the employ- ees in the appropriate unit by, on 11 February 1985, uni- laterally implementing its contract proposals and thereby reducing hourly wage rates of its employees without bar- gaining to impasse about such change, the Respondent has engaged in unfair labor practices in violation of Sec- tion 8(a)(5) and (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent engaged in unfair labor practices, I shall recommend that the Respondent be ordered to cease and desist therefrom and to take af- firmative action to effectuate the policies of the Act. Having found that the Respondent unlawfully unilater- ally reduced the hourly wage rates of unit employees, I shall recommend that the Respondent be ordered to re- store the wage rates to the status quo ante . I shall also recommend that the Respondent be ordered to make its employees whole for any losses incurred as a result of the Respondent's unilateral change in the wage rates by paying to each a sum of money equal to the difference between the hourly wages paid prior to 11 February 1985 and what they were paid for hours worked after that date, until such time as the status quo ante in wage rates is restored, plus interest, to be computed in the manner set forth in Florida Steel Corp., 231 NLRB 651 (1977).14 On these findings of fact ,and conclusions of law and on the entire record, I issue the following recommend- ed" ORDER The Respondent, Milwaukee Terminal Services, Inc., Milwaukee, Wisconsin, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with the Union as the exclusive bargaining representative of the employees in the appropriate unit by unilaterally changing the wages, hours, or other terms and conditions of employ- 14 See generally Isis Plumbing Co., 138 NLRB 716 (1962). Is If no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. MILWAUKEE TERMINAL SERVICES meat without first bargaining to impasse about such changes. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) On request, bargain collectively with the Union as the exclusive representative of the employees in the ap- propriate unit with respect to wages, hours, and other terms and conditions of employment and, if an under- standing is reached, embody such understanding in a signed agreement. (b) Make whole all unit employees who suffered losses in wages as a result of the Respondent's unlawful reduc- tion in wage rates on 11 February 1985 in the manner set forth in the remedy section of this decision. (c) Preserve and, on request, make available to the Board or its agents, for examination and copying, all payroll records, social, security payment records, time- cards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its Milwaukee, Wisconsin facility copies of the attached notice marked "Appendix."16 Copies of the notice, on forms provided by the Regional Director for Region 30, after being signed by the Respondent's au- thorized representative, shall be posted by the, Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director in writing within 20 days from the date of this Order, what steps the Re- spondent has taken to comply herewith. I6 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." APPENDIX NOTICE To EMPLOYEES PosTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government 641 After a trial in which all parties had an opportunity to present evidence, the National Labor Relations Board has found that we violated the National Labor Relations Act, and we have been ordered to post and abide by this notice. WE WILL NOT refuse to bargain collectively with Teamsters "General" Local No. 200, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive bargaining representative of our employees concerning wages, hours, or other terms and conditions of employ- ment. WE WILL NOT unilaterally change the wages, hours, or other terms and conditions of employment without first bargaining to impasse with your collective-bargaining representative. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL, on request, bargain with the- aforesaid Union as the exclusive representative of all employees in the appropriate unit and, if an understanding is reached, embody such' understanding in a signed agreement. WE WILL reinstate ,the wage rates, in effect immediate- ly prior to our unlawful change in wage rates on 11 Feb- ruary 1985. WE WILL make whole all employees for any losses re- sulting from our having unlawfully reduced wage rates on 11 February 1985, plus interest. MILWAUKEE TERMINAL SERVICES, INC.