Bacardi Corp.

422 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Bacardi Corporation and Congreso de Uniones In- dustriales de Puerto Rico. Case 24-CA-4818 30 September 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON Upon a charge filed 1 July 1983 and amended 17 August 1983 by Congreso de Uniones Industriales de Puerto Rico, the General Counsel of the Na- tional Labor Relations Board issued a complaint on 12 August 1983 and an amended complaint on 28 June 1984 against the Respondent, Bacardi Corpo- ration, alleging that it had violated Section 8(a)(5) and (1) of the National Labor Relations Act. Copies of the complaint, amended complaint, and notice of hearing were served on the Respondent, which filed timely answers denying the commission of any unfair labor practices. On 4 February 1985 the parties and the General Counsel moved the Board to transfer the instant proceeding to the Board without benefit of a hear- ing before an administrative law judge, and they submitted a proposed record consisting of the formal papers and the parties' stipulation of facts with attached exhibits. On 10 May 1985 the Board issued an order granting the motion, approving the stipulation, and transferring the proceeding to the Board. The General Counsel and the Respondent filed briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record in this case, the Board makes the following findings. I. JURISDICTION The Respondent is a Delaware corporation with its principal office and place of business and plant at Catano, Puerto Rico, where it is engaged in the manufacture, sale, and distribution of rum and re- lated products. The Respondent, in the course and conduct of its business operations, annually manu- factures, sells, and distributes at its plant products valued in excess of $50,000 of which products valued in excess of $50,000 were shipped from the plant in interstate commerce directly to points and places located outside the Commonwealth of Puerto Rico. Accordingly, we find that the Re- spondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE UNFAIR LABOR PRACTICES A. Issue The issue presented is whether the Respondent violated Section 8(a)(5) and (1) of the Act by refus- ing to arbitrate grievances after the expiration of the parties' collective-bargaining agreement. B. Facts The Union was certified as representative of an appropriate unit of the Respondent's employees on 10 October 1979. The parties thereafter executed a collective-bargaining agreement that contained grievance-arbitration provisions and was effective from 1 June 1980 through 31 May 1983. The Union informed the Respondent on 11 April 1983 of its intent to seek modification in the contract and to negotiate a new one. On 31 May 1983 the Re- spondent notified the Union of the termination of the collective-bargaining agreement as of that date and also that dues checkoff would be discontinued. No extension of the contract was agreed to after the expiration date. On 16 January 1984 the Union began a strike that lasted until 6 September 1984. The parties signed a new collective-bargaining agreement on 6 September 1984, effective from that date until 5 September 1987. About 13 June 1983, 31 October 1983, 13 Janu- ary 1984, and 24 January 1984 the Union requested that the Respondent meet to discuss and/or arbi- trate grievances concerning, respectively, the 10 June 1983 disciplinary suspension of employee Bello, the October 1983 refusal to reinstate employ- ee Rodriguez, the 9 January 1984 discharge of em- ployee Baez, and the 20 January 1984 discharge of employee Alduen. On all four occasions the Re- spondent refused to comply with the Union's re- quest to arbitrate the merits of the grievances on the ground that the expiration of the collective-bar- gaining agreement rendered the grievance-arbitra- tion clause ineffective. The parties did, however, submit to arbitration the threshold question of the arbitrability of the Bello suspension. The Respondent indicated that by so doing it did not intend to waive any defense, in- cluding that of nonarbitrability. On 3 May 1984 the arbitrator rendered an award finding that Bello's grievance was not arbitrable solely because the col- lective-bargaining agreement was not in effect at the time the facts occurred. The parties also initiated an arbitration hearing on Rodriguez' grievance, at which time the Re- spondent raised its claim of nonarbitrability due to the contract's expiration. Pursuant to a motion by the Union, the arbitrator, on 27 November 1984, "shelved" the case while the parties pursued the ar- 286 NLRB No. 36 BACARDI CORP. 423 bitrability issue before the Board. The Union ini- tially sought to take to arbitration the grievances of Baez and Alduen, but proceedings were suspended before hearing while the arbitrability issue was before the Board in this case. During the contractual hiatus, the parties also ar- bitrated the grievance of employee Arce. On 17 April 1984 the arbitrator issued an award finding that the grievance was nonarbitrable both because the contract had expired and because the Union and grievant had specifically waived their right to arbitrate concerning the discipline imposed. C. Contentions of the Parties The General Counsel contends that the Respond- ent violated Section 8(a)(5) and (1) of the Act by repudiating the postcontract operation of the griev- ance-arbitration provisions of the expired collec- tive-bargaining agreement and refusing to submit the disputed grievances to arbitration on their merits.' The General Counsel argues that the arbi- tration clause embodied in the 1980- 1983 agree- ment was a term and condition of employment that the Respondent could not change without bargain- ing with the Union. Citing Nolde Bros.2 and Ameri- can Sink Top Co.,3 the General Counsel also con- tends that (1) the disputed grievances are arguably grounded in the collective-bargaining agreement; and (2) there is no express language limiting the duration of the arbitration clause to the life of the agreement, nor any other indication in the stipulat- ed record that the parties intended their arbitration duties to terminate with the collective-bargaining agreement. Finally, the General Counsel argues that the Respondent's refusal to waive the expira- tion of the collective-bargaining agreement as a de- fense to these grievances is a de facto refusal to ar- bitrate them. The Respondent contends that it was at all times willing to submit the disputed grievances to arbitra- tion and that it did so regarding the grievances of Bello and Arce, prevailing in each instance in its argument that the postexpiration grievances were nonarbitrable. The Respondent further contends that none of the disputed grievances were arbitra- ble because the disciplinary actions and the em- ployees' conduct that resulted in that action, oc- curred after the expiration of the collective-bar- gaining agreement on 31 May 1983, and none of the employees' grievances involved rights or bene- fits that accrued or vested during the expired con- tract's term. D. Discussion and Conclusions In Indiana & Michigan Electric Co., 284 NLRB 53 (1987), the Board recently considered and clari- fied the scope of the duty to arbitrate grievances after the expiration of a collective-bargaining agreement. We specifically rejected the theory pos- ited here by the General Counsel that there was a statutory duty to adhere to an arbitration proce- dure independent of any contractual commitment to do so. We further held, however, that an em- ployer violate Section 8(a)(5) of the Act when it engages in conduct tantamount to a wholesale re- pudiation of a limited postexpiration contractual duty to arbitrate, as that duty is defined in Nolde In accord with the rationale of Indiana & Michi- gan, we find that the General Counsel has failed to prove a violation of Section 8(a)(5). Although the Respondent clearly believed that it had no postex- piration duty to arbitrate, it was willing to test this belief with respect to any individual grievance by submitting the question of arbitrability to an arbi- trator. Such conduct can hardly be characterized as a wholesale repudiation of the postexpiration ar- bitration process, including the presumptive con- tinuing duty to arbitrate grievances "arising under the contract" within the meaning of Nolde and In- diana & Michigan.4 The General Counsel essential- ly argues that the Federal statutory policy encour- aging arbitration of disputes precludes a party even from asserting contract expiration as a defense against a grievance in arbitration. On the contrary, Nolde itself clearly established that contract expira- tion can toll the obligation to arbitrate some or all grievances. We view submission of this theshold question of postexpiration arbitrability to an arbi- trator to be entirely consistent both with the par- ties' contractual commitment to arbitration and with the statutory policy encouraging arbitration. Based on the foregoing, we find that the Re- spondent has not violated the Act. Accordingly, we shall dismiss the complaint. CONCLUSIONS OF LAW 1. Bacardi Corporation is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Congreso de Uniones Industriales de Puerto Rico is a labor organization within the meaning of Section 2(5) of the Act. 3. Bacardi Corporation has not violated Section 8(a)(5) and (1) of the Act. d R d t h h 1 espon ent ac e at t e The General Counsel does not contend t unlawfully concerning Arce 4 Although not dispositive here, we note that the Board in Indiana & " 2 Nolde Bros Y Bakery Workers Local 358, 430 U S 243 (1977) arising Michigan rejected the broad interpretation of the meaning of 3 American Sink Top Co, 242 NLRB 408 (1979) under" in Nolde and American Sink & Top, supra. 424 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ORDER The complaint is dismissed. MEMBER JOHANSEN, concurring. I agree, for the following reasons, that Respond- ent did not violate Section 8(a)(5) of the Act by its actions concerning grievances filed after the expira- tion of the parties' collective-bargaining agreement. At issue here is the Respondent's alleged refusal to arbitrate four grievances filed during a contrac- tual hiatus extending from 31 May 1983 to 6 Sep- tember 1984. The Respondent took the position that it need not arbitrate the four grievances be- cause the expiration of the contract rendered the grievance arbitration clause ineffective. Normally, a consistent refusal to arbitrate postex- piration grievances because of contract expiration would, in my view, establish a wholesale repudi- ation of the postexpiration arbitration obligation and thus constitute a violation of Section 8(a)(5) of the Act unless it is proved that the parties did not intend that arbitration provision to survive contract expiration. All grievances here involved specific contract rights. As I stated in my concurring and dissenting opinion in Indiana & Michigan Electric Co., 284 NLRB 53 (1987), such grievance disputes must be deemed as being over provisions of the expired contract and thus be found to "arise under" the ex- pired contracts within the meaning of Nolde Bros. v. Bakery Workers Local 358, 430 U.S. 243 (1977). Thus, the parties are obligated to arbitrate these sorts of grievances. Nonetheless, I find no violation here. The Re- spondent's position was not, in fact, one of refusing to arbitrate postexpiration grievances. Significantly, the Respondent was willing to submit to an arbitra- tor the threshold issue of the arbitrability of all dis- puted grievances. By so doing, the Respondent met its obligation to arbitrate. Contrary to the General Counsel, the Respondent did not undercut its will- ingness to arbitrate by reserving the right to argue nonarbitrability to the arbitrator. Rather, the Re- spondent placed the resolution of the grievances in the proper forum-i.e., before the arbitrator. I join my colleagues in dismissing the complaint.