Charles Schaefer Sons, Inc.

CHARLES SCHAEFER SONS 409 Charles Schaefer Sons, Inc. and Local 462 of the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America. Case 22-CA-14408 27 August 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND CRACRAFT On 21 October 1986 Administrative Law Judge Joel P. Biblowitz issued the attached decision. The Respondent and the General Counsel filed excep- tions and supporting briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's, rulings, findings,' and conclusions and to adopt the recommended Order.2 ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis- missed. MEMBER CRACRAFT, dissenting. Because I disagree with my colleagues' conclu- sion that there was no meeting of the minds about the terms of a collective-bargaining agreement, I dissent from the dismissal of the complaint allega- tion that the Respondent violated Section 8(a)(5) of the Act by refusing to execute a written agreement. Since around 1967 the Respondent and the Union have been parties to a series of collective- bargaining agreements, recognizing the Board-cer- tified Union as bargaining representative for a unit ' 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 The General Counsel's motion to strike the Respondent's brief in sup- port of the Respondent's exceptions to the decision of the administrative law judge and in answer to the General Counsel's exceptions to the deci- sion of the administrative law judge and motion to reopen the record to receive evidence is denied The Respondent's statement in opposition to the General Counsel's motion to strike the Respondent's brief in support of the Respondent's ex- ceptions to the decision of the administrative law judge and in answer to the General Counsel's exceptions to the decision of the administrative law judge; statement in support of the General Counsel's motion to reopen the record to receive evidence; request for official notice of posthearing judicial proceedings and the Respondent's motion to reopen the record to receive evidence is granted to the extent we take judicial notice of the posthearmg arbitration proceedings and is denied in all other respects. of production and maintenance' employees. In Oc- tober 1985 the parties commenced bargaining for a contract to replace the one about to expire. In No- vember the parties, according to the judge, "reached full agreement on all the terms to be in- corporated into the contract" and signed a memo of understanding. Later, the Respondent refused to execute a written agreement because of a dispute over the number of employees the contract cov- ered. Under the circumstances of this case, I would conclude, contrary to the judge, the inquiry does end with the finding that the parties reached agree- ment on the terms to be included in a contract. The Respondent mistakenly believed it could take advantage of the Union's statement that the upper wage tier applied to the three employees then em- ployed in order to avoid a meeting of the minds. But, neither party sought to modify the unit de- scription or bargained about unit size.' Thus, on the facts of this case, I would find the parties bar- gained to agreement on contract terms to cover a unit both parties accepted, 3 and the Respondent violated Section 8(a)(5) by thereafter refusing to execute a written agreement.4 Cutter Laboratories, 265 NLRB 577 (1982). ' By no later than the 1982 contract, called production and warehouse. 2 Had the parties bargained about unit size or whether specific individ- uals were covered, this might be a different case. The parties' discussion about the two-tier wage system, in which the Union expressed concern that it not affect three currently working employees, does not constitute bargaining about unit size, particularly given the judge's finding that Re- spondent was aware the Union would insist unit size could vary depend- ing on the outcome of arbitration. 3 Because the Union was the certified representative, there was no dis- pute over the unit description Unit size, of course, may vary due to sub- sequent events Apparently, the judge believed discharging employees was a material subsequent event, even though the parties did not discuss it, and so the judge characterized the Union's reference to three currently working employees as a mistake on which the Respondent sought to cap- italize In my -view, however, the mistake was the Respondent's to be- lieve that the discussion about the two-tier wage system could be con- verted into a misunderstanding that would be fatal to an agreement That mistake was unilateral and deliberate A mistake by one party to an agreement, when not induced by acts of the other party, will not consti- tute grounds for relief Skyline Corp. v. NLRB, 613 F 2d 1328, 1334 (5th Cir. 1980) ' I need not decide whether, the discharged employees are "present" employees, "new" employees, or in the unit Under the facts of this case, those questions are simply not relevant to the inquiry_____ Gary A. Carlson, Esq., for the General Counsel. Lawrence Henderson,-Esq., for-dre-Respondent. David Grossman, Esq. (Schneider, Cohen, Solomon, Leder & Montalbano), for the Charging Party. DECISION STATEMENT OF THE CASE JOEL P. BIBLOwLTz, Administrative Law Judge. This case was heard by me on 30 July 1986 in Newark, New Jersey. The complaint, which issued on 13 June 1986, 285 NLR]B No. 78 410 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD and was based on an unfair labor practice charge filed on 29 April 1986 by Local 462 of the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union), alleges that Charles Schaefer Sons, Inc. (Respondent), violated Section 8(a)(5) of the Act by refusing to execute a collective-bar- gaining agreement with it, although the parties reached full and complete agreement on all the terms of the col- lective-bargaining agreement. Respondent, while denying that it refused to execute the agreement or that it has violated the Act by its conduct, admits that full agree- ment was reached by the parties on the terms and condi- tions to be incorporated, in the collective-bargaining agreement. On the entire record, including my observation of the- demeanor of the witnesses, and after consideration of the briefs filed, I make the following FINDINGS OF FACT 1. JURISDICTION AND LABOR ORGANIZATION STATUS There being no dispute, I find that Respondent is an employer within the meaning of Section 2(2), (6), and (7) of the Act and the Union is a labor organization within the meaning of Section 2(5) of the Act. II. FACTS AND ANALYSIS In 1967 the Board certified the Union as the collec- tive-bargaining representative for Respondent's employ- ees in the following unit: All production and mainte- nance ) employees employed at its Elizabeth, New Jersey location, excluding all office clerical employees, profes- sional employees, guards, and supervisors as defined in the Act. Raymond DeMilia, secretary treasurer of the Union since February 1982, negotiated the above-men- tioned collective-bargaining agreement effective 13 Octo- ber 1982 through 12 October 1985.2 On 29 March Respondent discharged 7 of its 10 regu- lar employees pursuant to information gathered by a se- curity employee hired to serve as an undercover employ- ee to investigate the employees. The reasons given for the discharges of these employees were,, principally, the use of alcohol and drugs on the job, timecard abuse, and, in one case, threatening a fellow employee with a knife. By telegram to Respondent dated 3 April, DeMilia wrote: "this telegram represents a grievance on behalf of the 7 employees whom you terminated last Friday, March 29, 1985. I will be in touch with you to discuss this matter." DeMilia also spoke to Respondent's execu- tive vice president, James Barbour, about the discharges, telling him that he had no choice but to proceed in the matter to arbitration. Barbour told him that he under- stood the Union's position, but he had an extensive file on the seven discharged employees. These discharged employees applied for unemployment benefits; Respond- 3 At a certain point, no later than the collective -bargaining agreement between the parties dated 24 November 1982, the word "maintenance" was changed to "warehouse " Other than that, and the change in location from Elizabeth to Union, New Jersey, the unit remains the same and ap- propriateness of it is admitted by Respondent 2 Unless indicated otherwise, all dates are for the year 1985 ent contested the claims. Their claims were granted on 19 June. , In May the Union sent Respondent a notice of its in- tention to arbitrate these seven discharges; the arbitrator was designated by the New Jersey State Board of Media- tion on 11 June. Procedural matters and witness difficul- ties delayed the opening of the arbitration until 19 No- vember; after that, the remaining hearing dates were 5 December, 12 December, 9 and 29 January 1986, on which date the hearing concluded. On 13 March 1986 the arbitrator issued his opinion and award in which he ordered that six of the seven discharged employees be reinstated and "be placed on the same status that he would have been as of" 1 August and 1 September. He found further that the discharge of the seventh employee was for just cause because he had threatened a fellow employee with a knife. As stated, supra, the principal justification given by Respondent for the discharges was the use of alcohol and drugs during working time and timecard abuse. The principal reason the arbitrator gave for ordering the reinstatement of six of the seven dis- charged employees was that Respondent had been aware of these activities for a long period and the activities had been condoned by Respondent: "The activities of the grievants had been condoned for years and management never gave them a clear, convincing and unequivocal warning that what had been condoned in the past would no longer be acceptable." Respondent is contesting this award and has not yet complied with it. Respondent is engaged in the nonretail sale of rock salt, which is used, primarily, on the road system in the State of New Jersey. Obviously this is a seasonal oper- ation, one where Respondent hired temporary employees during its busiest period from about December through March to supplement its regular work force. On 9 October the Union and Respondent met for the first time to negotiate a collective-bargaining agreement to replace the one set to expire 3 days later. In that meeting, the parties entered into an extension of agree- ment extending the collective-bargaining agreement through 15 November. DeMilia was the principal spokes- man for the Union, Barbour for the Respondent. At this negotiating session, and the two that followed, Respond- ent alleged that it needed a two-tier wage system and a lesser wage rate to remain competitive ; DeMilia said: "as long as it doesn't affect the three people that we have there at the premises now, and if we could get the Apocalypse peoples that we would agree to it." Both 3 There was abundant testimony regarding the Apocalypse operation. DeMilia testified that Apocalypse supplies drivers and warehouse em- ployees to Respondent He is not interested in the drivers , but as the Apocalypse warehouse employees work side-by-side with Respondent's employees whom he represents, and perform the same tasks, he requested that those employees be made part of the unit and he testified that Bar- bour agreed to this Barbour testified that he and another individual are the sole owners of Apocalypse; because it is not owned or controlled by Respondent, he rejected DeMilia's request that the Apocalypse employ- ees be added to his unit He testified that he and his co-owner originally established Apocalypse to supply drivers to Respondent and any other business entity. Shortly thereafter, Apocalypse began supplying Respond- ent and other employers with a seasonal operation with temporary em- ployees, including warehouse employees Apocalypse employees are gen- Continued CHARLES SCHAEFER SONS DeMilia and Barbour testified that during negotiations, when asked, DeMilia said that the upper level of the two-tier system would apply only to the three employees then employed, although he did not specifically say that the seven discharged employees would be excluded; in fact, during the negotiations nothing was said about the seven discharged employees. Barbour testified that during negotiations DeMilia was agreeable to the two- tier system "as long as it excluded the three people that remained in the unit at the time." At a meeting with the FIVI[CS mediator the parties signed a four-page "Memo of Agreement ," dated 18 No- vember, handwritten by the mediator.4 The agreement provides, inter alia, for a new title: "New Hires Only." The agreement also provides : "Co. to contribute $200 per year on behalf of the present employees , the employ- ees having the option to contribute on their own if need arises. The Co. will meet with employees involved before 15 April, to discuss." Although the language in this memo of agreement is not crystal clear, it deletes Martin Luther King's birthday and the employee's birth- day for new hires only. In addition it provides the wages for "New Hires" will range from $4.50 (warehousemen) to $4.90 in 1985 with 50-cent-an-hour increases in each of the following 2 years. Counsel for Respondent said that he would prepare the agreement. By letter dated 6 January 1986 , counsel for Respond- ent wrote to DeMilia that he had not been successful in obtaining a copy of the 18 November memo of agree- ment from FMCS, but "in an effort to get the contract signed as soon as possible, I have prepared a draft agree- ment based on my notes." Shortly after receiving this letter, DeMilia called counsel for Respondent and in- formed him of some items in the draft that he felt were in error. By letter dated 17 January 1986, counsel for Re- spondent informed DeMilia that he received the 18 No- vember memo of agreement and, on the basis of that he wished to add some items to the draft he had previously sent him. One of those items was Martin Luther Kings' birthday, about which he felt "that our agreement was to include this holiday for new hires, only if required by federal law."5 Shortly thereafter, while DeMilia was dis- erally skilled with a construction industry background, their pay ranges from $7 50 an hour to $26,000 a year salaried employees DeMilia alleges and Barbour denies that Respondent agreed to DeMilia's demand that the Apocalypse employees be added to the unit in exchange for DeMiha's agreement to a two-tier pay system ]However, the General Counsel's opening statement alleged that the sole reason for Respondent 's refusal to execute the agreement was due to Respondent 's insistence that the seven employees discharged on 29 March be considered as new employees under the two tier system In addition, the evidence establishes that it was solely the disposition of these seven employees, rather than the Apocalypse employees that caused the dispute here. Therefore, the fail- ure to accrete the Apocalypse employees to the instant unit will not be considered. _ 4 Due to the absence of a functioning copying machine , the parties did not receive a copy of this agreement until 2 months later. 5 Included in the draft agreement proposed by Respondent, and the 18 November memo of agreement , was a 120-day union-security provision as well as a 120-day probationary period ("the first one hundred twenty days of employment of an employee") during which an employee may be discharged for any reason and without just cause 411 cussing some of these changes with counsel for Respond- ent, he asked DeMilia if he ' would agree to name the three individuals, then on the payroll, in the contract. DeMilia said that he could not do that because by doing so he would erase the rights and privileges of the seven individuals in arbitration should they win the arbitration, There have been no further discussions between the par- ties regarding contract terms and the parties have never executed a new contract. Barbour testified that Respond- ent is prepared to sign the new agreement providing only the three existing employees were covered by the upper tier of the contract. Barbour testified that during negotiations DeMilia "re- peatedly kept saying" that the higher benefits would only apply to the three employees, and on that basis, he determined Respondent's costs for the new agreement. These costs were $200 yearly for each IRA, or a total of $600 two holidays and a 25-cent yearly increase for each of the three. "Otherwise I obviously would not have given away more of the store, if you will, knowing that there might have been other people involved." In an- swers to questions of counsel for the General Counsel, Barbour testified that during negotiations he was aware of the pending arbitration of the seven individuals,6 but stated: My feeling at the time we were going through this negotiation was that we had an absolute, ironclad case and that there was no chance that any of those men were coming back. They had already been, if you will, wiped from my memory for purposes of negotiation and I was not considering having to take them back at all. It never even entered my mind . . . . It never entered my mind so I never thought about it. Barbour also testified that he was aware that the arbitra- tor "had that power" to order the seven individuals rein- stated by Respondent, but there was only a "slim possi- bility" of Respondent losing the arbitration- "We thought it was more like one in a million." He testified that because he felt the chance of losing the arbitration was so slim, it did not play any part in the negotiations. The sole issue is whether Respondent unlawfully failed and refused to excute a written agreement . Respondent admits that it and the Union reached full agreement on all the terms to be incorporated into the contract. Re- spondent alleges that Barbour relied on DeMilia's com- mittment that only the three employees working at that time would be in the upper tier of wages and benefits in calculating what Respondent could afford to offer in a new agreement; if he were told that the seven discharged employees would also be in this category (if returned to work by an arbitrator) he would not have agreed to the benefits contained in the 18 November memo of agree- ment. Therefore, Respondent alleges, there was no viola- tion when they refused to execute the contract after the Union informed them that they would not specifically limit the upper tier to the three named individuals. The 6 The discharged employees had been employed by Respondent for up to 10 years and were earning between $8 and $8 25 an hour. 412 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD General Counsel argues that even though DeMilia as- sured Barbour during the negotiations that the upper-tier rates and benefits only applied to the three individuals, Barbour knew that what DeMilia meant was that it ap- plied to the three, plus the other seven if an arbitrator or- dered them back to work. Therefore, there was no mis- understanding, there was a meeting of the minds, and Respondent should be ordered to execute the agreement. Admittedly, during negotiations, DeMilia informed Barbour that the upper-tier benefits in the proposed agreement would apply only to the three employees.' I find, as argued by the General Counsel, that although DeMilia said three employees, Barbour was aware that he meant from 3 to 10 depending on the Union's success in the arbitration proceeding. Barbour was aware of the Union's grievance involving the discharges, its subse- quent demand for arbitration and the notice of arbitra- tion . I assume that he assisted Respondent's attorney in the procedural matters that delayed the opening of the hearing from June until 19 November and in the 5 hear- ing days of the arbitration. Respondent also filed a posth- earing brief. The arbitration commenced on the day fol- lowing the 18 November memo of agreement. Such pro- ceedings would not justify a person to conclude (as Bar- bour testified): My feeling at the time we were going through this negotiation was that we had an absolute, ironclad case and that there was no chance that any of those men were coming back. They had already been, if you will wiped from my memory for purposes of negotiation and I was not considering having to take them back at all. It never even entered my mind. Being aware of the scope of the arbitration, and the possibility of losing it, I find that Barbour was also aware that if the arbitrator returned the discharged em- ° Should it be relevant on appeal, I would credit DeMilia's testimony over that of Barbour He appeared to be testifying in a honest and truth- ful manner, and readily admitted telling Barbour that the higher benefits would only apply to the three employees On the other hand, as dis- cussed infra, I found Barbour's downplay of the arbitration proceeding and his testimony that "there was no" chance that the employees would come back, and that the issue had been wiped from his memory , disin- genuous Barbour was an experienced savvy businessman , he must have been aware of the seriousness of the matter ployees to work, it would not be as new employees; any other result would be ludicrous. They were longtime em- ployees earning $8 or $8.25 an hour. It is totally unrea- sonable to believe that after being successful in an arbi- tration, they would be returned to work at half their prior salary, as probationary employees, subject to dis- charge by Respondent without just cause. The inquiry, however, does not end there; rather, the ultimate question is whether the parties reached a meet- ing of the minds on 18 November and thereafter. It is not enough to say that Respondent, in its answer, admit- ted that the parties reached agreement with respect to the terms and conditions of employment of the employ- ees. In arriving at those terms and conditions, Respond- ent calculated his costs based on three existing employ- ees, rather than nine, the result of DeMiha's mistake and Barbour's attempt to take advantage of that mistake. The bottom line is Respondent based its cost on its attempt to limit the unit to three people; Barbour tried to "pull a fast one" on the Union, and when the Union finally made it clear to Respondent that the unit was possibly 10 it became clear that there was never a meeting of the minds here. I therefore find that Respondent did not vio- late Section 8(a)(1) and (5) of the Act when it refused to execute the agreement. CONCLUSIONS OF LAW 1. The Respondent is an employer 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. Respondent has not engaged in any conduct in vio- lation of the Act as alleged. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed" ORDER It is recommended that the complaint be dismissed in its entirety. 8 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