Image Systems, Inc.

370 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Image Systems, Inc. and International Association of Machinists & Aerospace Workers, District Lodge 94, Local Lodge 311 . Case 31-CA-15890 20 August 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS STEPHENS AND CRACRAFT On 18 March 1987 Administrative Law Judge George Christensen issued the attached decision. The General Counsel filed exceptions and a sup- porting 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 only to the extent consistent with this Decision and Order. The judge found that the Respondent did not violate Sections 8(a)(5) and (1) and 8(d) of the Na- tional Labor Relations Act by refusing to execute a written document embodying the full and complete agreement arrived at between the parties with re- spect to rates of pay, wages, hours, and other terms and conditions of employment. We find merit in the General Counsel's exceptions to the judge's findings and, for reasons set forth below, reverse the judge and conclude that the Respondent violat- ed the Act as alleged. The facts are set forth in full in the judge's deci- sion. In pertinent part, the record establishes that since 1983 the Union has been the exclusive collec- tive-bargaining representative of the Respondent's production and maintenance employees. On 27 March 19861 the parties agreed to extend their 1983-1986 contract, due to expire 31 March, during the period of negotiations for a successor contract and to make retroactive to 1 April any ne- gotiated modifications. The judge found, and we agree, that: the Respondent's bargaining representa- tive, Administrative Assistant Ray Gutierrez, was a supervisor and agent of the Respondent within the meaning of the Act; the parties met for negotia- tions on various dates between 27 March and 1 May; on 1 May the parties reached full and final agreement on all terms of a successor contract to be effective 1 April through 31 March 1987; the Union notified the Respondent on 1 May that the required employee ratification had been obtained; and the Respondent agreed that the Union would prepare a written document embodying the agreed- ' All dates are 1986 unless otherwise indicated on terms and forward copies of the document to the Respondent for signature. On 8 May the Union mailed copies of the successor contract to the Re- spondent, requesting execution. By letter dated 28 May the Respondent returned the documents, in- forming the Union that on 6 May it had filed for bankruptcy under Chapter 11 of the Bankruptcy Code and that "we have been advised by our law- yers not to sign any agreement with any third party until the U.S. Trustee is able to fully review our case and gives us the go-ahead." The Respond- ent has refused to comply with the Union's subse- quent requests that the negotiated collective-bar- gaining agreement be executed. The judge, citing the Supreme Court's opinion in NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984), stated that an employer does not violate the Act by failing to honor the terms of a collective-bargaining agreement following the filing of a bankruptcy pe- tition absent bankruptcy court authorization or di- rection. Further, noting that during the hearing he granted the General Counsel's motion to withdraw a complaint allegation that the Respondent unlaw- fully failed to give effect to the agreed-on terms, the judge concluded that the purposes of the Act would not be served by ordering the Respondent to sign the negotiated agreement. Accordingly, he recommended that the complaint be dismissed sub- ject to reinstatement based solely on circumstances related to the status of the bankruptcy proceedings. Contrary to the judge, we find the Respondent's refusal to execute the collective-bargaining agree- ment unlawful. Section 8(d) of the Act defines the duty to bargain collectively as the duty to meet and confer "in good faith with respect to wages, hours, and other terms and conditions of employ- ment, or the negotiation of an agreement . . . and the execution of a written contract incorporating any agreement reached if requested by either party . . . ." An employer violates Section 8(a)(5) and (1) of the Act by refusing to execute a written con- tract incorporating the terms of a collective-bar- gaining agreement reached with a union represent- ing its employees. H. J. Heinz Co. v. NLRB, 311 U.S. 514, 525-526 (1941); Princeton Holiday Inn, 282 NLRB 30 (1986). There is no question here that the parties reached agreement on 1 May re- garding all contractual terms. Further, the Re- spondent does not contest the accuracy of the doc- ument submitted to it for signature. Rather, the Re- spondent defends its refusal to execute the agree- ment solely on the basis of its involvement in bank- ruptcy proceedings. We conclude that the filing of its petition in bankruptcy did not relieve or sus- pend the Respondent's obligation to execute on re- 285 NLRB No. 56 IMAGE SYSTEMS quest the complete and final agreement negotiated by the parties.2 It is well settled that the institution of bankrupt- cy proceedings generally does not deprive the Board of jurisidiction or authority to entertain and process an unfair labor practice case to its final dis- position.3 However, in recommending dismissal of the instant complaint, the judge applied the Su- preme Court's holding in Bildisco, supra, that a col- lective-bargaining agreement is unenforceable, in an unfair labor practice proceeding, as to alleged breaches occurring in the period between the filing of a bankruptcy reorganization petition and the ac- ceptance of the agreement by the debtor-in-posses- sion. The judge concluded that it would not be ap- propriate for the Board to order execution of the contract here until the Bankruptcy Court "entered its order respecting whether or not [the Respond- ent] should execute the contract." The flaw in the judge's analysis is that it ignores Congress' modifi- cation of the Bildisco rule in the Bankruptcy .Amendments and Federal Judgeship Act of 1984, Pub. L. 98-353 § 541, 98 Stat. 333, 390-391 (1984), codified in 11 U.S.C. § 1113 (1984). Because the bankruptcy petition involved here was filed after the 10 July 1984 effective date of the amendments, Bildisco is not dispositive of this case.4 The 1984 bankruptcy amendments currently govern a debtor-in-possession's rejection of a col- lective-bargaining agreement. Briefly, the pertinent provisions (sec. 1113)5 provide that in order to 2 The complaint had also alleged that the Respondent violated Sec. 8(a)(5) and (1) by failing to give effect to the terms of the agreement ap- plicable to wages, hours, and working conditions However, the judge granted the General Counsel's motion at trial to withdraw this allegation on the bans of her representation that she had no basis for contesting that the Respondent was in fact honoring the terms of the agreement ' Olympic Fruit & Produce Co, 261 NLRB 322, 323 (1982), Phoenix Co., 274 NLRB 995 (1985) It is also well established that Board proceed- ings fall within the exception to the automatic stay provisions of the Bankruptcy Code for proceedings by a governmental unit to enforce its police or regulatory powers 11 U.S C § 362(b)(4). See Goldstein Co., 274 NLRB 682 (1985). 4 Sec 541(c) of Pub L 98-353 establishes the effective date of the amendments In reaching his conclusions that the Respondent did not violate the Act, the judge relied on a series of Board cases which applied Bildisco, a e., Edward Cooper Painting, 273 NLRB 1870 (1985), enfd. 804 F.2d 934 (6th Cir 1986); Market King, Inc., 282 NLRB 876 (1987), and Hawg-N- Action, Inc., 281 NLRB 56 (1986) As noted by the General Counsel, since the above cases involved bankruptcy petitions filed before the effec- tive date of the 1984 amendments, the cited cases were controlled by Bit- disco and thus are inapplicable to the issues presented here. 11 U.S C. § 1113 states § 1113 Rejection of collective bargaining agreements . (b)(1) Subsequent to filing a petition and prior to filing an applica- tion seeking rejection of a collective bargaining agreement, the debtor in possession or trustee (hereinafter in this section "trustee" shall include a debtor in possession), shall- (A) make a proposal to the authorized representative of the em- ployees covered by such agreement, based on the most complete and reliable information available at the time of such proposal, which provides for those necessary modifications in the employees 371 obtain a bankruptcy court's approval to reject a collective-bargaining agreement, a debtor-in-posses- sion, after filing its bankruptcy petition but before seeking rejection, must make proposals for "neces- sary modifications" to the employees' authorized representative accompanied by relevant informa- tion needed to evaluate the proposals and then meet and "confer in good faith" with the represent- ative. An application for rejection is approved only if the debtor-in-possession meets its bargaining obli- gations under the amendments, the employees' rep- resentative refuses to accept the debtor-in-posses- sion's proposals "without good cause," and the "balance of the equities clearly favors rejection." Thus, unlike in Bildisco; compliance with contrac- tual terms is required beyond the filing of a bank- ruptcy petition and, except in limited circumstances not relevant here, until action is taken by the bank- ruptcy court to permit rejection. We are mindful of our responsibility to decide the issue presented here in a manner which accom- modates the policies of the two Federal statutes in- benefits and protections that are necessary to permit the reorgani- zation of the debtor and assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably; and (B) provide . . . the representative of the employees with such rel- evant information as is necessary to evaluate the proposal (2) During the period beginning on the date of the making of a proposal provided for in paragraph (1) and ending on the date of the hearing provided for in subsection (d)(1), the trustee shall meet, at reasonable times, with the authorized representative to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement. (c) The court shall approve an application for rejection of a col- lective bargaining agreement only if the court finds that- (1) the trustee has, prior to the hearing, made a proposal that ful- fills the requirements of subsection (b)(1); (2) the authorized representative of the employees has refused to accept such proposal without good cause; and (3) the balance of the equities clearly favors rejection of such agreement. ' (d)(1) Upon the filing of an application for rejection the court shall -schedule a hearing to be held not later than fourteen days after the date of the filing of such application... . (2) The court shall rule on such application for rejection within thirty days after the date of the commencement of the hearing In the interests of justice, the court may extend such time for ruling for such additional period as the trustee and the employees' representa- tive may agree to If the court does not rule on such application within thirty days after the date of the commencement of the bear- ing, or within such additional time as the trustee and the employees' representative may agree to, the trustee may terminate or alter any provisions of the collective bargaining agreement pending the ruling of the court on such application. (e) If during a period when the collective bargaining agreement continues in effect, and if essential to the continuation of the debtor's business, or in order to avoid irreparable damage to the estate, the court, after notice and a hearing, may authorize the trustee to imple- ment interim changes in the terms, conditions, wages, benefits, or work rules provided by a collective bargaining agreement . . . The implementation of such interim changes shall not render the applica- tion for rejection moot (f) No provision of this title shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bar- gaining agreement prior to compliance with the provisions of this section 372 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD volved. Thus, we recognize that the -purpose of Chapter 11 of the Bankruptcy Code is to permit the successful rehabilitation of debtors. Likewise, regarding the alleged violation of the Act, we note the Supreme Court's statement in H. J. Heinz, that an employer's "refusal to honor, with his signature, the agreement which he has made with a labor or- ganization, discredits the organization, impairs the bargaining process and tends to frustrate the aim of the statute to secure industrial peace through col- lective bargaining." Id. at 526. Examining this case in light of those policies, we see no reason to suspend or excuse the Respond- ent's obligation to execute the written document embodying the parties' negotiated agreement. We know of no provision in either the Bankruptcy Code or the Act that precludes the application of the 8(d) definition of good-faith bargaining to the instant facts. Further, we find that the result reached here does not undermine the Bankruptcy Code's goal of enabling a debtor to restructure its business so as to continue in operation. Unquestion- ably, the opportunity to reject a collective-bargain- ing agreement under the procedures of section 1113 may be essential for a debtor to attain this goal. It does not follow, however, that our proscribing an employer's unconditional refusal to execute a nego- tiated agreement prevents that employer from at- tempting to reject the agreement under the bank- ruptcy amendments established by Congress in 1984. To the contrary, such a proscription, relating as it does to the formalization of a collective-bar- gaining agreement, is consistent with the scope and purpose of section 1113, which, as noted, specifi- cally was enacted by Congress to provide a proc- ess for determining the continued viability of a col- lective-bargaining agreement in the bankruptcy sit- uation. To that end, section 1113 establishes order- ly and efficient procedures by which a debtor can seek approval to reject a burdensome collective- bargaining agreement or obtain immediate interim contractual relief if necessary to sustain the debt- or's business. It stands to reason, therefore, that a bankruptcy court, in accepting the existence of a collective-bargaining agreement under section 1113, would also accept the execution of such an agree- ment, either voluntarily by the parties or pursuant to an order of the Board, as the culmination of the parties' bargain or, at the very least, as a ministerial act. Thus, our decision in no way interferes with an employer's actions before a bankruptcy court, taken pursuant to section 1113. Nor does our deci- sion imply that an application by the Employer for rejection of its collective-bargaining agreement would be without merits or infringe in any manner on the bankruptcy court's jurisdiction and author- ity to process the bankruptcy petition. Rather, by rendering a decision upholding by formal execution the bargain reached by the contracting parties, we are merely requiring that the Employer comply with the mandates of the two applicable statutes, the goals of which are entirely compatible in this instance. To rule otherwise, we run the risk of al- lowing the Employer to avoid compliance with terms and conditions of employment which have been agreed to by the parties and which the bank- ruptcy court, upon application, might determine cannot be rejected. Accordingly, notwithstanding that the Union did not request execution of the negotiated agreement until after the filing of the Respondent's bankrupt- cy petition, we find that the Respondent had an ob- ligation -to execute the agreement. We conclude that by failing and refusing to do so the Respond- ent violated Section 8(a)(5) and (1) and Section 8(d) of the Act. AMENDED CONCLUSIONS OF LAW Delete Conclusion of Law 7 and substitute the following. ' "7. By refusing to execute and sign the collec- tive-bargaining agreement agreed on between it and the Union, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Sections 8(a)(5) and (1) and 8(d) of the Act. "8. The above unfair labor practices affect com- merce within the meaning of the Act." REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative actions necessary to effectuate the policies of the Act.7 We have found that the Respondent violated its obligations under the Act by refusing to execute the contract embodying the terms of the agreement it reached with the Union on 1 May. To remedy that violation, we shall order the Respondent, on request, to sign such agreement. The Respondent shall be required to give retroactive effect to the B There is no evidence that the Respondent has applied to the bank- ruptcy court for approval to reject the collective-bargaining agreement at issue here. T As part of the remedy, the General Counsel seeks an order which will include a visitatortal clause authorizing the Board, for compliance purposes to obtain discovery from the Respondent under the Federal Rules and Civil Procedure under the supervision of the United States court of appeals enforcing the Order. We have concluded that under the circumstances of this case such a clause is not warranted IMAGE SYSTEMS terms of the agreement to its effective date of I April. ORDER The National Labor Relations Board orders that the Respondent, Image Systems, Inc., Culver City, California, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Refusing to ,1 bargain in good faith with Inter- national Association of Machinists & Aerospace Workers„ District Lodge 94, Local Lodge 311, with respect to rates of pay, wages, hours, and other terms and conditions of employment in the appropriate unit described below by refusing to execute the collective-bargaining agreement agreed to by the Respondent and the Union on 1 May 1986. The appropriate unit is: All production and maintenance employees employed by the Employer at its Culver City, California, facilities, excluding office clerical employees, supervisory employees, watchmen and/or guards, engineering personnel, techni- cians, draftsmen and field service, data service, administrative and marketing employees. (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 neces- sary to effectuate the policies of the Act. (a) Execute, on request by the Union, the con- tract on which agreement was reached on I May 1986. (b) Give retroactive effect to I April 1986 to the terms and conditions of employment of the collec- tive-bargaining agreement. (c) Post at its place of business in Culver City, California, copies of the attached notice marked `Appendix."g Copies of the notice, on forms pro- vided by the Regional Director for Region 31, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are custom- arily posted. Reasonable steps shall be taken by the Respondent to ensure that-the notices are not al- tered, defaced, or covered by any other material. s 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 " 373 (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. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities. WE WILL NOT fail or refuse to bargain collec- tively with the International Association of Ma- chinists & Aerospace Workers, District Lodge 94, Local Lodge 311, with respect to rates of pay, wages, hours, and other terms and conditions of employment of our employees in the appropriate unit described below by refusing to execute a copy of the agreed-on contract with the Union. The ap- propriate collective-bargaining unit is: All production and maintenance employees employed by the Employer at its Culver City, California, facilities, excluding office clerical employees, supervisory employees, watchmen and/or guards, engineering personnel, techni- cians,, draftsmen and field service, data service, administrative and marketing employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request by the Union, execute the collective-bargaining agreement on Which agree- ment was reached between us and the Union. WE WILL give retroactive effect to the terms and' conditions of employment of the collective-bargain- ing agreement to 1 April 1986. IMAGE SYSTEMS, INC. Ann Weinman, for the General Counsel. Herbert M. Ansell, of Los Angeles, California, for IAM. 374 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN , Administrative Law Judge. On 16 December 19861 I conducted a hearing at Los Angeles, California, to try issues raised by a complaint issued on 12 August based on a charge filed by Interna- tional Association of Machinists & Aerospace Workers, District Lodge 94, Local Lodge 311 (IAM) on 25 June and amended on 7 August. The complaint (as amended at the hearing) alleged, inter alia, for a substantial period IAM has been the ex- clusive bargaining representative of an appropriate unit of employees of Image Systems, Inc. (ISI ); after several bargaining sessions , TAM and ISI on 1 May agreed on terms for a contract governing the rates of pay, wages, hours, and working conditions of the unit employees; and since 21 May, ISI has been violating Sections 8(a)(1) and (5) and 8(d) of the National Labor Relations Act (Act) by refusing to comply with IAM requests to sign a written document embodying the agreed -on contract terms. In its answer to the complaint, ISI conceded the filing and receipt of copies of the original charge, the amended charge, and the complaint ; at times material ISI was a Delaware corporation with headquarters and a plant at Culver City, California, where it manufactured computer microfiche cameras and readers, ISI had sales valued at $1,300,000 in 1985 ; a unit consisting of all production and maintenance employees employed by ISI at its Culver City, California facility, excluding engineering personnel, technicians, draftsmen, field and data service employees, administrative and marketing employees , office clerical employees, guards and supervisors , was appropriate for collective-bargaining purposes within the meaning of the Act; since 1983 IAM has represented ISI employees within that unit covered by a 1983- 1986 contract be- tween ISI and IAM; between 27 March and 1 May, ISI and IAM met for the purpose of negotiating a successor to their 1983- 1986 contract ; and since 8 May , IAM has asked ISI to sign a written document allegedly embody- ing agreed-on terms for a successor to their 1983-1986 contract. ISI's answer denied at times pertinent - ISI's business affected commerce; TAM was a labor organization; Ray Gutierrez was assistant to the president , a supervisor, and an agent of ISI acting on its behalf ; IAM is still the ex- clusive collective-bargaining representative of the unit of ISI employees described in the preceding paragraph; by 1 May, ISI and IAM agreed on all terms for a successor to their 1983- 1986 contract governing the rates of pay, wages, hours, and working conditions of ISI 's employ- ees, and since 21 May, ISI has violated the Act by refus- ing to comply with IAM requests to sign a contract pur- portedly embodying agreed -on terms for a successor to the 1983-1986 ISI-IAM contract. ISI also stated in its answer it entered Chapter 11 bankruptcy proceedings on 6 May; it was unable to afford counsel to represent it in this proceeding ; and re- quested the Board defer any action pending ISI's filing I Read 1986 after further date references omitting the year of a viable reorganization plan with the bankruptcy court and entry by that court of an order or orders concerning the execution and implementation of any contract gov- erning the rates of pay, wages, hours, and working con- ditions of its employees. The issues created by the foregoing shall be resolved below. The General Counsel and IAM appeared by counsel2 and were afforded full opportunity to adduce evidence, examine and cross-examine witnesses, argue, and file briefs. The General Counsel argued orally. Based on my review of the entire record, observation of the witnesses, perusal of the oral argument, and re- search, I enter the following FINDINGS OF FACT I. COMMERCE In its answer to the complaint, ISI admitted in 1985 it sold goods valued at $1.3 million and neither admitted nor denied the complaint allegation in 1985 it sold and shipped goods manufactured at its Culver City plant valued in excess of $50,000 to customers located outside the State of California. ISI's failure to deny the latter allegation may be con- strued as an admission of its accuracy;3 in any event, evi- dence adduced at the hearing established in 1985 (and prior years) ISI sold and shipped goods manufactured at its Culver City, California plant valued in excess of $50,000 to customers located outside the State of Califor- nia.4 On the basis of the foregoing, I conclude at times ma- terial ISI was an employer engaged in commerce in a business affecting commerce within the meaning of Sec- tion 2 of the Act. II. LABOR ORGANIZATION IAM exists for the purpose, inter alia, of representing its members in bargaining collectively with their employ- ers concerning their rates of pay, wages, hours, and working conditions and is a signatory to approximately 100 collectively bargained contracts covering its mem- bers' rates of pay, wages, hours, and working condi- tions,5 including a 1983-1986 contract with ISI covering ISI production and maintenance employees/IAM mem- bers represented by IAM.6 2 Ray Gutierrez was subpoenaed by the General Counsel, appeared, and testified at the hearing On completion of testimony elicited by the General Counsel, he sought to enter an appearance and develop evidence on behalf of ISI The General Counsel objected on the ground Gutierrez previously stated he was not authorized by ISI to appear and participate in the proceeding other than as an observer I questioned Gutierrez and confirmed ISI authorized Gutierrez only to observe the proceeding and specifically denied him authority to represent or bind ISI I thereupon denied his request to enter an appearance and offer evidence on behalf of ISI 3 Sec 102 20, Board's Rules and Regulations * The undisputed testimony of ISI employee Ray Gutierrez S This finding is based on the undisputed testimony of IAM Business Representative Amador Chavez 6 Admitted by ISI in its answer IMAGE SYSTEMS 375 On the basis of the foregoing, I conclude at all materi- al times IAM was a labor organization within the mean- ing of Section 2 of the Act. III. RAY GUTIERREZ' STATUS Prior to 1985, Gutierrez was employed by ISI as export sales coordinator. Commencing 2 January 1985, ISI President Quraishi gave him the title of administra- tive assistant to the president and expanded his duties to include: monitoring orders; removing production and shipping bottlenecks; following work progress and re- porting thereon to Quraishi; preparing reports, contracts, memos, letters, etc ; meeting vendors, agents, dealers, distributors, and others, reporting their presentations and offers to Quralshi, securing and implementing his deci- sions thereon; and other and additional duties as Quraishi from time to time assigned to Gutierrez.? On 27 March, Quraishi advised Chavez ISI would be represented by ISI Plant Manager N. J. Koebel and Gu- tierrez in subsequent negotiations over the IAM request for modification of the 1983-11986 ISI-IAM contract cov- ering IS 1's production and maintenance employees. Koebel and Gutierrez met with Chavez and ISI employee/IAM shop steward Edwin Herrera later that day. Chavez gave Koebel IAM proposals for contract modification and Koebel and Chavez executed an agree- ment extending the terms of the expiring (31 March) ISI- IAM contract "during the period of negotiations" and agreeing any modification of the terms of the 1983-1986 contract would be retroactive to 1 April. When Chavez and Gutierrez next met, Gutierrez gave Chavez ISI's counterproposals for modification of the 1983-1986 extended contract and announced Koebel and Herrera were no longer employed by ISI.8 Following Koebel's departure from ISI's employ, Gu- tierrez became ISI's highest ranking employee under Quraishi and, in Quraishi's absence (for an average of 3 days each week), acted in his stead.9 Following their exchange of proposals, Chavez and Gutierrez met, made concessions and compromises, and on 1 May resolved all differences between them.la During the entire period (through 1 May), IAM was never advised of any withdrawal or change in Gutierrez' authority to bargain and enter agreements with IAM concerning the rates of pay, wages, hours, and working conditions of ISI's production and maintenance employ- ees. On the basis of the foregoing, I conclude at all materi- al times Gutierrez was ISI President Quraishi's adminis- trative assistant and a supervisor and agent of ISI acting on its behalf within the meaning of Section 2 of the Act. bargaining purposes of all production and maintenance employees employed by ISI, excluding office clerical employees, supervisory employees, watchmen and/or guards, engineering personnel, technicians, draftsmen, and -field service, data service, administrative, and mar- keting employees. At all times since, IAM has actively represented ISI employees within the unit and bargained with ISI on their behalf. No evidence was developed ISI ever ques- tioned IAM's majority representative status within the unit since July 1983 or had any objective grounds there- for.1 I On the basis of the foregoing, I find the unit described in the 1983-1986 ISI-IAM contract at all times since July 1983 has been and is appropriate for collective-bargain- ing purposes within the meaning of Section 9 of the Act and at all times since July 1983, IAM has been and is the exclusive bargaining representative of ISI employees within the unit. V. THE ALLEGED, AGREEMENT On 16 January, pursuant to the duration provision of the 1983-1986 ISI-IAM contract, IAM served written notice terminating the 1983-1986 contract on its expira- tion date (31 March) and requesting ISI meet and bar- gain with IAM over the terms of a successor contract. ISI Representatives Koebel and Gutierrez subsequent- ly met with IAM Representatives Chavez and Herrera; executed an agreement extending the terms of the 1983- 1986 contract during the period of negotiations and pro- viding any agreed-on improvements in the terms of the 1983-1986 contract would be retroactive to 1 April; ex- changed proposals and, counterproposals concerning the terms of a successor agreement; withdrew and compro- mised a number of their proposals; on 1 May reached final and full agreement on all terms of a successor con- tract for a 1-year term extending from 1 April through 31 March 1987, subject to employee ratification. Chavez secured such ratification immediately after final agree- ment was reached by Chavez and Gutierrez on the' terms of the successor contract. The same date (1 May), Chavez notified Gutierrez the unit employees ratified the agreement and they agreed Chavez would prepare a written contract embodying the terms of the new agreement and send several copies to Gutierrez for execution by ISI and return to IAM.12 On the basis of the foregoing, I conclude on 1 May ISI and IAM reached full and final agreement on all the terms of a successor contract covering the rates of pay, wages, hours, and working conditions of ISI employees within the unit. IV. THE UNIT AND IAM'S REPRESENTATIVE STATUS In July 1983, ISI executed a contract with IAM recog- nizing IAM as the exclusive representative for collective- T These findings are based on Gutierrez' job description and his testi- mony s The findings in the above two paragraphs are based on Chavez' un- contradicted testimony. 9 This finding is based on Gutierrez' testimony 10 This finding is based on Chavez' uncontradicted testimony. VI. THE ALLEGED VIOLATION On 8 May, Chavez mailed to Gutierrez eight copies of a written document containing the terms he and Gutier- 11 ISI admitted execution of the 1983-1986 contract and Chavez' testi- mony IAM actively represented ISI's production and maintenance em- ployees since July 1983 not only was undisputed, it was corroborated by Gutierrez. 12 The foregoing findings are based on Chavez' uncontradicted testi- mony and documentary support. 376 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD rez agreed on on 1 May governing the rates of pay, wages, hours, and working conditions of ISI's produc- tion and maintenance employees, effective 1 April and expiring 31 March 1987. When several weeks passed without his receipt of ISI- signed copies of the 1 May agreement, Chavez tele- phoned Gutierrez and demanded an explanation. On 28 May, Gutierrez responded with a letter stating: I have been advised by the Board of Directors that the company has filed Chapter 11 of the bankruptcy code as of May 6, 1986. Therefore, due to this situa- tion, we have been advised by our lawyers not to sign any agreement with any third party until the U.S. Trustee is able to fully review our case and gives us the go ahead. We expect to resolve the problem within the next 60 days in which time we expect to possibly be able to enter into an agree- ment with your union. Until then, I am returning the contracts that you sent me until we resolve the matter with the courts. At all times since, ISI refused to comply with repeated requests by IAM to sign the contract prepared by IAM setting out the rates of pay, wages, hours, and working conditions of ISI's production and maintenance employ- ees agreed on by Gutierrez and Chavez on 1 May.' s Normally an employer's refusal to sign a contract set- ting forth rates of pay, wages, hours, and working condi- tions it has agreed to, after negotiations with a labor or- ganization representing a majority of its employees within an appropriate bargaining unit, violates Sections 8(a)(1) and (5) and 8(d) of the Act. 14 The Board in a series of cases has interpreted Bil- disco' 5 as holding the public interest in the rehabilitation of a debtor/employer takes precedence over enforcement of a collective-bargaining agreement between a debtor/- employer and the labor organization representing his em- ployees, therefore the debtor/employer does not violate the Act by failing to honor the terms of such an agree- ment following the filing of his bankruptcy petition, absent bankruptcy court authorization or direction. 16 At the outset of the hearing I granted the General Counsel's motion to delete paragraph 10(b) of the com- plaint alleging ISI was not giving full force and effect to the rates of pay, wages, hours, and working conditions ISI and IAM agreed on on 1 May, on the basis of her representation she had no reason to doubt ISI was in fact honoring the terms of the 1983-1986 ISI-IAM contract as modified on 1 May. Neither IAM nor the General Counsel produced any evidence to rebut ISI's repeated 18 These findings are based on Chavez' undisputed testimony and sup- porting documentary evidence (the 28 May Gutierrez' letter, the 8 May proposed contract, and ISI's written refusals to repeated IAM's written demands ISI sign the proposed contract) 14 H J Heinz Co Y NLRB 311 U S 514 (1941) i5 NLRB Y Bildisco & Bildisco, 465 U S 513 (1984) 16 Market King, 282 NLRB 876 (1987), Hawg-N-Action, 281 NLRB 56 (1986), Edward Cooper Painting, 273 NLRB 1870 (1985) assertions' 7 it entered bankruptcy proceedings on 6 May, 2 days prior to the date IAM submitted its proposed con- tract to ISI for signature and consistently thereafter maintained it could not comply with the IAM's request to sign the 8 May contract until the bankruptcy court re- viewed the proposed contract and entered its order re- specting whether ISI should execute that contract. The foregoing leads me to the conclusion the purposes of the Act would not be served by entry of an order di- recting ISI to sign the 8 May proposed contract, rather, I recommend the complaint be dismissed, without preju- dice to its reinstitution in the event ISI withdraws or fails to pursue its bankruptcy action or that action is dis- missed, or ISI fails to cause the bankruptcy court to review the rates of pay, wages, hours, and working con- ditions of ISI employees which ISI and IAM agreed on 1 May and enter an appropriate order thereon. CONCLUSIONS OF LAW 1. At all pertinent times ISI was an employer engaged in commerce in a business affecting commerce and IAM was a labor organization within the meaning of the Act. 2. At relevant times Ray Gutierrez was a supervisor and agent of ISI acting on its behalf within the meaning of the Act. 3. All production and maintenance employees em- ployed by ISI at its Culver City, California facilities, ex- cluding office clerical employees, supervisory employees, watchmen and/or guards, engineering personnel, techni- cians, draftsmen and field service, data service , adminis- trative and marketing employees , at all pertinent times has been and is an appropriate unit for collective-bar- gaining purposes within the meaning of the Act. 4. Since July 1983, IAM has been the duly designated collective-bargaining representative of ISI employees within the above unit. 5. On 1 May, ISI and IAM reached full, complete, and final agreement on terms and conditions governing the rates of pay, wages, hours, and working conditions of ISI employees within the unit effective 1 April and con- tinuing through 31 March 1987 6. Since 8 May, ISI has refused to comply with IAM requests to sign a written contract embodying their 1 May agreement unless and until the United States Bank- ruptcy Court directs or authorizes ISI to do so. 7. The purposes of the Act would not be served by entry of an order directing ISI to sign the proposed con- tract, absent evidence ISI has withdrawn or failed to pursue its bankruptcy petition or that the petition has been dismissed, or that ISI has failed to cause the bank- ruptcy court to review the wages, rates of pay, hours, and working conditions of ISI employees which ISI and IAM agreed on on 1 May and entered an appropriate order thereon. [Recommended Order for dismissal omitted from pub- lication.] 17 In its answer to the complaint and subsequent communications of record