Conoco, Inc.

548 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Conoco, Inc. and Chauffeurs, Teamsters and Helpers Local No. 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO.' Cases 20- CA-17833 and 20-CA-18135 16 December 1987 DECISION AND ORDER 'By CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON On 8 March 1984 Administrative Law Judge James M. Kennedy issued the attached decision. The General Counsel filed exceptions and a sup- porting brief, and the Respondent filed an answer- ing brief and a motion to disregard the General Counsel's exceptions. 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, 2 and conclusions3 only to the extent consistent with this Decision and Order. The complaint alleged that the Respondent's fail- ure and refusal to meet and confer with the Union regarding grievances filed 10, 17, and 23 May 19834 constituted a failure and refusal to bargain in good faith in violation of Section 8(a)(5) and (1). The judge found that the contract expired in Janu- ary at. the latest; that the grievances at issue were filed 10 May or thereafter; and that the terminal closed 9 May. He found that, because the griev- ances did not specify and the record does not con- tain any evidence concerning when the incidents i On 1 November 1987 the Teamsters International Union was read- mitted to the AFL-CIO Accordingly, the caption has been amended to reflect that change 2 The General Counsel has excepted to some of the judge's credibility findings The Board's established policy is not to overrule an administra- tive 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 re- versing the findings We note that the judge miscued Bob's Big Boy Family Restaurants, which is reported at 264 NLRB 1369 (1982) - Absent exceptions, we adopt pro forma the judge's finding that the Re- spondent unlawfully proposed a restriction on employees' rights to seek legal redress in forum such as the courts or the Board The Respondent's motion to disregard the General Counsel's excep- tions as not conforming to the Board's Rules and Regulations is denied 3 We agree with the judge that the complaint allegations concerning the Respondent's failure to bargain over the decision to close the Elk Grove Terminal lack merit and should be dismissed We find that the de- cision did not turn on labor costs and therefore, under Otis Elevator Co, 269 NLRB 891 (1984), was not a mandatory bargaining subject Members Johansen and Babson additionally find that, under any of the views expressed in Otis Elevator, supra, the Respondent was not obligated to bargain with the Union over its decision to close the terminal 4 All dates are in 1983 unless indicated otherwise underlying the grievances occurred, he could not determine whether they occurred during the life of the contract. The judge distinguished the instant case from Nolde Bros. v. Bakery & Confectionery Workers Local 358, 430 U S. 243 (1977), by empha- sizing that the Nolde contract required the employ- er to process all grievances, contractual or not; that the Nolde contract expressly covered severance pay because it governed the cessation of employ- ment; and that the plant closed only 3 days after the contract expired. The judge concluded that the grievance procedure here did not have a life beyond contract's expiration insofar as these four grievances are concerned.5 He therefore dismissed this complaint allegation. We disagree. In our view, the Respondent here, unlike the em- ployer in Nolde, did not refuse to arbitrate a griev- ance. Rather, the Respondent failed and refused to discuss or even respond to the four grievances. It is well settled that the unilateral abandonment of a contractual grievance procedure after a contract expires violates Section 8(a)(5) of the Act. See Bethlehem Steel Co., 136 NLRB 1500 (1962), enfd. in pertinent part sub nom. Shipbuilders (Bethlehem Steel) v. NLRB, 320 F.2d 615 (3d Cir. 1963); reaffd. in Indiana & Michigan Electric Co., 284 NLRB 53 (1987). Accordingly, we' find that the Respondent violated Section 8(a)(5) and (1) of the Act by fail- ing and refusing to process the four grievances filed 10, 17, and 23 May.6 AMENDED CONCLUSIONS OF LAW 1. Substitute the following for Conclusion of Law 4. "4. By failing and refusing to process the griev- ances filed 10, 17, and 23 May 1983, the Respond- ent violated Section 8(a)(5) and (1) of the Act." 2. Add the following as Conclusion of Law 5. "5. The above-described violations of the Act constitute unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. 5 The grievances allege violations of the subcontracting, seniority, and sick leave provisions of the parties' contract e For reasons set forth fully in Chairman Dotson's partial dissent in In- diana & Michigan, supra, he "would hold that the postexpiration duty to follow contractual grievance procedures generally survives only as an ad- junct of the limited postexpiration duty to arbitrate grievances that in- volve rights 'arising under' the expired contract and that are subject to postexpiration arbitration by the terms of the contract " (284 NLRB 53) He would overrule Bethlehem Steel, supra, to the extent inconsistent with this view Chairman Dotson agrees, however, that the Respondent here violated Sec 8(a)(5) by repudiating its statutory duty (irrespective of spe- cific contractual procedures) to meet and confer with a bargaining repre- sentative about employee grievances E g, Storall Mfg Co, 275 NLRB 220, 221 (1985) 287 NLRB No 55 CONOCO, INC. 549 THE REMEDY Having found that the Respondent violated Sec- tion 8(a)(5) and (1) of the, Act, we shall order that it cease and desist therefrom, take certain affirma- tive action designed to effectuate the policies of the Act, and post an appropriate notice. We shall order the Respondent to process the four grievances filed 10, 17, and 23 May, 1983 in accordance with the grievance procedure in the 1979-1982 collective- bargaining agreement. ORDER The National Labor Relations Board orders that the Respondent, Conoco, Inc., Elk Grove, Califor- nia, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Making proposals during collective-bargain- ing negotiations which, if agreed on, would de- prive employees of free access to the courts and/or the National Labor Relations Board for the pur- pose of vindicating or attempting to vindicate legal rights that have been legislated for their protection. (b) Refusing to bargain collectively with Chauf- feurs, Teamsters and Helpers Local No. 150, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL- CIO by refusing to process the four grievances filed 10, 17, and 23 May 1983 in accordance with the grievance procedure in the 1979-1982 collec- tive-bargaining agreement. (d) '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) On the Union's request,' process the four grievances filed 10, 17, and 23 May 1983 in accord- ance 'with the grievance procedure in the 1979- 1982' collective-bargaining agreement. (b) 'Post at its Elk Grove, California facility copies of ;the attached notice ' marked "Appendix."'' Copies of the notice, on, forms provided by the Re- gional Director for Region 20, 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 customarily posted. Reasonable steps shall be taken by the Respondent ' 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 " to ensure that the notices are not altered, defaced, or covered by any other material. (c) 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 make proposals during collective- bargaining negotiations which, if agreed on, would deprive employees of free access to the courts and/or the National Labor Relations Board to vin- dicate or attempt to vindicate rights that have been legislated for their protection. WE WILL NOT refuse to bargain collectively with Chauffeurs, Teamsters and Helpers Local No. 150, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, AFL-CIO by refusing to process the four griev- ances filed 10, 17, and 23 May 1983 in accordance with the grievance procedure in the 1979-1982 col- lective-bargaining agreement. 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 the Union's request, process the four grievances filed 10, 17, and 23 May 1983 in accordance with the grievance procedure in the 1979-1982 collective-bargaining agreement. CONOCO, INC. Nancy Recko, Esq., for the General Counsel Christina Richard and Julia M. Giller, Esqs., of Houston, Texas, for the Respondent. Chuck Brooks, Esq., of Sacramento, California, Business Representative, Teamsters Local 150 550 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD DECISION STATEMENT OF THE CASE JAMES M. KENNEDY, Administrative Law Judge This case was tried before me at Sacramento, California, on September 14 and 15, 1983,1 pursuant to a consolidated complaint that was issued on August 19 It is based on charges filed by Chauffeurs, Teamsters and Helpers Local No. 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union) on March 28 and June 17, respectively. The con- solidated complaint alleges that Conoco, Inc. (Respond- ent) has engaged in certain violations of Section 8(a)(1) and (5) of the National Labor Relations Act Issues The transactions complained of arise from Respond- ent's closure of a truck terminal located at its bulk plant in Elk Grove, California. In essence the General Counsel contends that the terminal was closed as part of a course of bad-faith bargaining Specifically, the complaint claims that Respondent conditioned a new collective-bargaining' agreement on the omission of the successorship clause contained in previous agreements, and conditioned a con- tract on the Union's agreement to require employees to utilize the proposed contract's grievance procedure before exercising rights granted to them by local, state, or Federal laws, including the National Labor Relations Act. In addition it contends that Respondent made an unlawful threat to close the terminal, closed it, laid off and/or terminated employees in the bargaining unit, and thereafter gave the work to a "subcontractor." All this supposedly occurred without notice to the Union and without giving the Union an opportunity to bargain over either the decision to close or the effects of the closure. Finally, the complaint alleges that Respondent has failed to respond to certain grievances that were thereafter filed under the no-subcontracting, seniority, and sick leave clauses of the expired agreement. Respondent denies it violated Section 8(a)(1) or (5) concerning its conduct. It contends that it attempted to bargain in good faith regarding the drivers, but the Union refused to believe Respondent's assertion that the facility was financially unviable. Furthermore, it denies conditioning the contract on the two clauses in question and asserts that the closure was made solely for econom- ic reasons, contending it was not legally obligated to bar- gain over the decision to close. It also contends that it offered the Union an opportunity to bargain over the ef- fects of the closure, but the Union declined. Finally, it asserts that the collective-bargaining contract had ex- pired several months before the grievances were filed and that the grievances are not the type that must be processed after a contract's expiration. ' Unless otherwise indicated all references to dates are 1983 FINDINGS OF FACT 1. RESPONDENT'S BUSINESS Respondent is a corporation engaged, inter aha, in` all„ aspects of the petroleum business, including exploration,., crude oil transport, refining, product transport, and the retail and commercial sale of petroleum products. Al- though the record does not clearly show, Respondent does business in California and many other states. It admits that during the past 12 months it 'has sold and shipped products, goods, and materials valued in excess of $50,000-directly across state lines and admits it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. IF LABOR ORGANIZATION INVOLVED' Respondent admits that at all material times the Union, has been a labor organization within the meaning of Sec- tion 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background In the course of its California operations, Respondent until recently has operated a small bulk plant and truck terminal at Elk Grove, California, about 12 miles south of Sacramento. Prior to October 1, -1982, it was operated by Douglas Oil Company, one of Respondent's corporate subsidiaries. In 1981, Respondent was purchased outright by DuPont Corporation. As a result of that takeover Re- spondent was reorganized in October 1982. As part of the reorganization Douglas Oil Company was dissolved and absorbed into the Conoco system. Shortly thereafter Respondent, in order to raise cash to reduce DuPont's debt arising from the purchase, began to sell various Conoco facilities. This included the sale of the Douglas, Refinery in Paramount, California (preceded by the layoff of the entire Douglas corporate headquarters staff that had been located there), and the closure of the main Douglas transport terminal in Paramount. There is-testi- mony that the sale and closure of the Paramount head- quarters, refinery, and transport terminal constituted the disposal of three-quarters of what had previously been Douglas Oil. The only former Douglas facilities that Conoco then had left in California were a small'refinery and terminal in Santa Maria and some terminals and/or' bulk plants in Vallejo, Martinez, Lodi, San Jose, Redding, and Elk Grove. ' Elk Grove, the focus of this case, at least until its clos- ing on May 9, consisted of a small liquid asphalt bulk plant and truck terminal. The terminal operated an as- phalt spreader and support tanker together with four or five light oil (motor fuel) tankers. . The asphalt was normally obtained from the Santa Maria refinery via rail. The Elk Grove bulk plant would then mix the liquid asphalt into various asphalt products. This in turn, depending on the customer's wish, was either delivered to the customer via Respondent's asphalt tanker equipment, or picked up by a common carrier or the customer's own vehicle. Customers often utilized Re- CONOCO, INC spondent's asphalt spreader , but such equipment was available elsewhere and customers used those as well The light oil tankers were used to supply service sta- tions in the Sacramento/Sierra foothill area . Although the vehicles were parked in Elk Grove, virtually all the fuel was actually obtained from an independent supplier, Ammoil , Inc., which had a fuel terminal in West Sacra- mento. Respondent, in operating all these vehicles , was con- sidered to be a "private carrier" and authorized by law only to carry its own products either to its own locations or to those of its customers . It was not licensed as a common carrier. Furthermore, the Elk Grove asphalt business was a seasonal one. Traditionally Respondent has shut down the asphalt mixing plant' during the winter months. The vehicles normally assigned to Elk Grove were reassigned to other terminals . Sometimes the drivers were sent with the vehicles; sometimes they were placed on temporary layoff status. Respondent's Elk Grove drivers have been represented by the Union for many years. The most recent collec- tive-bargaining agreement was in effect from August 1, 1979, through July 31, 1982. During the course of the 1982-1983 negotiations the expiration date was extended on several occasions . There is a dispute about whether it was also extended to the late winter or early spring of 1983. It is undisputed that during the last 3 months of 1982 and the first 3 months of 1983 the Elk Grove facility was operating at a steady loss The financial records present- ed by Respondent show that since the Conoco takeover in October 1982 until the end of March 1983 Respondent lost slightly more than $82,000 operating that facility. The Douglas figures were not presented for the earlier portion of 1982 but there was widespread testimony that the facility was only marginal at best. The General Counsel does not challenge either the figures or the testi- mony. B. The Testimony Relating to Collective Bargaining During 1982/1983 The principal union bargainers were Chuck Brooks, a business representative, who was on two occasions joined by the Union's chief executive officer, Secretary- Treasurer Al Bonilla. These were the only two union of- ficials to testify, although during some of the negotia- tions other business agents occasionally appeared. Re- spondent had two chief negotiators , Industrial Relations Manager Joe Watson and Director of Labor Relations Ron Teague . Teague took over for Watson beginning January 11, 1983. Assisting them were Jerry Carson, a division manager from Respondent 's surface transporta- tion department, Jack Cummings, who had been the di- rector of transportation for Douglas , and Max Burgess, the Elk Grove terminal manager Neither the Union's bargaining team nor Respondent's bargaining team re- mained the same throughout the negotiations . The princi- 2 Respondent did not mix the liquid asphalt with aggregate for paving jobs That was done by the paving contractor 551 pal bargainers were Brooks for the Union and Watson, followed by Teague, for Respondent. 1. The July 1982 meeting It is fair to say that although bargaining began in July 1982 Brooks deliberately held it to a slow pace Simulta- neous with the Elk Grove negotiations, the California Area Tank Agreement was being negotiated on a multiunion/multiemployer basis. Local 150, the Union in- volved here, was a party to that bargaining. Brooks read- ily agreed that he wanted to know what the "industry standard" was going to be before quickening the bargain- ing process with Respondent Similarly, Watson and Carson were also aware of the multiemployer bargaining They directed their principal attention to problems aris- ing from the proposed shutdown of the Paramount refin- ery and to negotiating a separate agreement covering the terminal in Santa Maria . The Santa Maria terminal was larger than Elk Grove and Respondent hoped to utilize any contract that it reached with the Teamsters Local in that city as a means of settling Elk Grove Thus, neither party attempted to negotiate with any seriousness until January 1983. Nevertheless, there is testimony regarding the early Elk Grove negotiations that is pertinent here. Brooks tes- tified that during the July 27, 1982 meeting, Watson ad- vised him of the sale of the Paramount refinery. That in- formation prompted Brooks to ask about the viability of Elk Grove. He testified that one of Respondent's nego- tiators said the prospects at Elk Grove were good Brooks says he gave Watson a copy of the areawide pro- posal that was then being discussed elsewhere. Watson testified that in July he sought a "flat con- tract" from the Union saying Respondent was going to try to operate Elk Grove but needed competitive terms to do so. He said Respondent would ask for greater flexi- bility in light of the DuPont pressure Watson does not recall any discussion of the successors and assigns clause in July. He remembers Brooks questioned the viability of Elk Grove and asked if Respondent planned to close it. Watson said he replied it was not Respondent's intention to do so but wanted it "competitive , not marginal " The only immediately significant occurrence on July 27 was a decision to extend the expiring contract to August 15, 1982. Subsequently there was a- telephone conversation between Brooks and Cummings in which the contract was extended to August 31, 1982. On August 31 the contract was extended through September 30, 1982, and on that date extended again through Octo- ber 20, 1982. 2 The October 22, 1982 meeting The next collective-bargaining meeting was conducted on October 22, 1982. It did not last very long Brooks read to Watson, Cummings, and Carson a copy of the area wide proposal , but said it was not the Union's pro- posal to Respondent There was some small discussion 3 A "Flat" or "white paper" contract are slang terms for separately ne- gotiated single employer agreements that are quite different from the complex multiemployer agreements 552 DECISIONS OF THE NATIONAL, LABOR RELATIONS BOARD about the health and welfare fund premium increase that was coming due. ' Brooks'says he asked Watson if the Elk Grove facility was to be sold; Watson assured him that it was not. On cross-examination Brooks said Secretary-Treasurer Bonilla was present during the entire meeting He then agreed that the company negotiators did speak about the "shaky" conditions of the facility. It was then that he asked Watson if Respondent was going to sell, and Watson replied they were not. Brooks conceded Watson also said, "One never knew what Conoco would do " He denied being,told that Elk Grove was on shaky financial grounds asserting, "No, Elk Grove has always been in the black, that's what they tell me, and the drivers." Brooks was asked if by the time of the October 22 meeting Respondent had delivered to the Union 'a copy of its initial contract proposal. Brooks replied he could not recall. He said he "believes" the first time he saw the company proposal was at the January 11, 1983 meeting. In addition, he could not recall Bonilla saying to Watson that he had seen the proposal and was "disappointed" in Watson. Bonilla testified he was not present when the meeting began, but once he arrived, he stayed until it ended. Then he modified his testimony saying he was "in and out," explaining, "I don't try to get too involved in what Chuck's affairs are." Bonilla did recall Brooks bringing Respondent "up to, date" on the multiemployer tank agreement and says they did not discuss Elk Grove in particular. He said he was not present during any portion of the October 22 meeting in which there was a discus- sion of the economic future of Elk Grove or a discussion of its losses. On cross-examination Bonilla said he was not aware that Respondent was taking a different posi- tion than it had in the past. He does remember Watson saying DuPont was requiring each facility to meet its own obligations and that terminal managers were to be held responsible for the success of each facility Bonilla recalls Watson saying the successors and as- signs clause in the old contract had been removed in contracts elsewhere. He replied he did not care what Watson did with the other locals, "We've got a good op- eration here, the company is making money and we don't need it." He denied Watson ever, referred to the need for flexibility and, possibility of a sale in all seg- ments of Respondent's operations. He, like Brooks, denied telling Watson that he had seen the company proposal and was disappointed in it, but also said he "doesn't think" the Company gave the Union any contract proposal beforehand The basis for his belief is that Brooks never told him they had. Watson said that by the October 22 meeting he knew the Paramount refinery would definitely be closed. Moreover, he said, the former Douglas retail outlets were being realigned with another Conoco subsidiary, Kayo Oil, and they were already bargaining with the Santa Maria terminal. He says the October 22 meeting occurred sometime after a large company meeting near Durango, Colorado, after which Respondent's contract proposals were developed. Thus, he was fully prepared with this material for the October 22 meeting According' to Cummings, a contract proposal had been prepared after the Durango meeting and sent by Federal Express to Plant Manager Burgess in Elk Grove, and Burgess had caused it to be delivered to the Union prior to October 22. Cummings asserted that on October 22 he saw a company envelope in Brooks' file (although not the one used-by Federal Express) that led him to believe Brooks had received the company proposal. Both Watson and Cummings testified that during the course of the October 22 meeting, Bonilla told them he was "disappointed" in the position Watson had taken in the company proposal and that Bonilla's remark con- firmed to them that the Union had, indeed seen it. In ad- dition, there was discussion of the successors and assigns clause and the union-security clause that had been omit- ted from Respondent's proposal. Watson said he told Brooks that the elimination of the successors and assigns clause as well as the union-security clause were impor- tant to the Company that wanted them out of the con- tract. Watson recalled Bonilla replying that whether there was a "flat contract or not, there would not be a contract without successors and assigns language." Watson remembered that both Brooks and Bonilla ac- cused Respondent of intending to close Elk Grove. Watson said he again replied they were not, but Bonilla said, "Go ahead and close the damn thing." Bonilla denied making that statement. Watson says all three com- pany officials, himself, Carson, and Cummings, respond- ed that Elk Grove was not then economically viable but believed the elimination of the successors and assigns clause would make it easier to sell the facility He said Brooks then read them the proposed multiem- ployer settlement. Afterwards 'Watson told Brooks that. Respondent's proposal was being made, at other loca- tions, including Santa Maria., He remembered Bonilla re- plying that he did not care what went on at other places but he was not going to have "that shit" in his contracts. In addition, concerning to retroactivity, Watson told Brooks and Bonilla that because this was "concession bargaining," ;Respondent wanted retroactivity "to go both ways." He said the Company expected "takeaways" to be retroactive The meeting ended with an agreement to extend the collective-bargaining contract through No- vember 30. That, was confirmed by Carson's letter of Oc- tober 26 '3. The December 1982 meetings Although Brooks and Bonilla adamantly testified that the next two meetings occurred on December 2 and 4, the General Counsel and Respondent stipulated that the next meetings, in fact, occurred on December 6 and 8. The December 6 meeting began at Fulton 's Prime Rib Restaurant for dinner, it ended in pub crawling and per- sonal conduct that neither side wished to pursue at the hearing. Apparently the evening was a fiasco The par- ties were nevertheless willing to talk about what oc- curred over the successors and assigns clause. Brooks said that during the evening Watson told him the Union would "have to stipulate out of the agreement " the suc- cessors clause as Respondent would not have one. He said Watson told him if the Union insisted on a succes- CONOCO,. INC 553 sors clause they "probably would have to close the plant or wouldn't have a contract." Brooks told him it was a negotiable item and asked what would be given in return, suggesting health and welfare, maintenance of benefits, cost-of-living allowance, guaranteed hours, or something He said Watson, however, had nothing to offer but agreed that those were negotiable items. He said Watson told him the Company's proposals were being accepted by Local 51 in Santa Maria Bonilla also testified that Watson told him the succes- sors clause would have to be removed from the contract and if the Union could not agree to that there was no sense in negotiating Bonilla said Watson told him that if there was no contract he would move the equipment from the terminal. Bonilla told Watson to stick that issue "in his ear." He said there was no discussion of the eco- nomic situation in Elk Grove; Watson never said Elk Grove was in trouble. Bonilla knew Elk Grove was a seasonal business but did not think the seasonality of the business had much impact on its economic success. Bon- illa's principal recollection of that meeting is counseling Brooks to avoid a "ruckus" with Watson The December 8 meeting was an early morning break- fast at Lake Tahoe among Brooks, Carson, and Watson. According to Brooks, Watson repeated his "no succes- sors clause" demand saying the Union would have to get rid of that clause before there would be any movement by the Company. He remembered Watson saying that if the Union could not do that there was no use in continu- ing; for more than likely Elk Grove would be closed. Brooks said Watson again requested a "white paper con- tract" and he agreed to that Brooks denied that during the breakfast meeting Carson ever explained to him how Respondent evaluated terminals financially and further denied that Carson and Watson told him they would be evaluating Elk Grove on the basis that was described Watson testified they began the December 8 meeting by trying to put aside any personal animosity that may have arisen 2 days before. With that out of the way he said he again told Brooks that Respondent wanted the successors and assigns clause out, but did say that in ex- change he would "give relief' with respect to the de- manded omission of the union-security clause. He said much of the meeting was spent by Carson explaining to Brooks how Respondent evaluated the economics of the terminal and how each facility competed for Conoco capital. Carson explained that Respondent compared the lowest common carrier rates against the value of Re- spondent staying in the trucking business, pointing out that recent deregulation had brought the common carrier rates down. According to him, because Respondent could not take advantage of the common carrier rate, its profit margin was down significantly. Watson recalled that at some point during the discus- sion Brooks said he was not sure the successors and as- signs clause was enforceable anyway. Watson testified he believed they had reached an agreement to leave the union-security clause in the contract if the successors and assigns clause was out. That is denied by Brooks. 4. The January 11 meeting The next meeting was conducted on January 11. It was at this meeting that Ron Teague took Watson's place as Respondent's lead negotiator. Brooks testified he presented Respondent with a con- tract proposal, but Teague refused to look at it saying he knew it contained master contract language and Re- spondent did not want any part of the master Brooks did not disagree with Teague's perception, but said he asked Teague to go through it to determine what could be put in a "white paper" contract He said Teague re- plied he wanted no part of the master freight language, which included a successors clause, saying Brooks should "get serious" with his proposals. At that point, according to Brooks, Teague presented him with the Company's first proposal Brooks said he looked at it briefly and then asserted they had "taken the guts out of the old contract", yet he asked for time to absorb it After a break Teague again referred to the suc- cessors clause and told the Union to get serious about to its proposals. The meeting then ended. Unlike his testimony about the October 22, 1982 meet- ing, on cross-examination Brooks specifically denied seeing any company proposals before January 11. He admits, however, that despite his awareness that the Company wished to avoid master agreement language, the Union's January 11 proposal was just a retyped ver- sion of the master. And, somewhat disingenuously, he had titled the document "Douglas Oil Co. of California," contending he had never been "officially notified" that Douglas had become Conoco. The proposal consists of 42 single-spaced pages for the 6 or fewer employees to be covered During cross-examination Brooks was defensive and had a tendency to argue with counsel. After some spar- ring he admitted the Santa Maria contract that had been negotiated with a different local would not have been consistent with the master agreement language of his January 11 proposal. The inconsistency may well have prohibited seasonal transfers to Santa Maria, a practice that had been used in the past to avoid seasonal layoffs. Also during cross-examination, he denied saying the company proposal of January 11 was a "rape"; he denied telling Teague that his style of negotiating was to repro- pose the same thing six different ways, until a company tired of it and accepted it. Furthermore, Brooks denied Teague ever told him how the Santa Maria contract ne- gotiations had gone or how Respondent had changed its proposals during bargaining there He then said he "couldn't recall" it Moreover, he could not recall if Teague told him the Santa Maria contract had contained a maintenance of membership clause even though Re- spondent's first proposal there had not. Finally, Brooks denied Teague told him Respondent wanted to pay com- petitive wages, but even if they were obtained, such con- cessions would not guarantee that the terminal would remain open. According to Teague, he repeated to Brooks on sever- al occasions during the January 11 meeting that the Elk Grove Terminal was in danger of closing. He says he told Brooks that the economics were such that it did not 554 DECISIONS OF THE NATIONAL" LABOR RELATIONS BOARD appear Elk Grove could remain open even if an agree- ment were reached. He explained, "What we were trying to do was to give it any kind of prolonged activity, we were hoping to reach an agreement that he [Brooks] could live with and we could take back to our operating management and say, 'Hey, we've gotten some relief in some key areas Will this buy any time?"' In addition, Carson told Brooks the terminal was not making money, there were problems with the competi- tion due to deregulation and the volume was too low. He also mentioned the general rundown condition of the terminal. - According to Teague, the main item discussed during that meeting was an attempt to resolve the successors and assigns issue. He said Watson had reported to him that the clause appeared to be a strike issue with the Union. Teague said he ' wanted to see if he could get Brooks to give the Union's position across the table on that clause and hoped to be able to reach an agreement on that issue first Teague said at one point in the meeting all the parties were rummaging around looking for the company pro- posal. He observed a copy in Brooks' materials, in addi- tion the Company produced a second copy.' Teague said that during the discussion of the company proposal Brooks accused the Company of trying to "rape the con- tract " He 'agreed that when Brooks gave him the Union's proposal he told Brooks it appeared to be the master contract retyped Teague said he suggested that Brooks call, the business agent in Santa Maria to discuss what had occurred there. Teague remembered a discus- sion of wages (denied by Brooks) in which Brooks told Teague that the Union was not concerned with how the wages were to be calculated or their manner of payment so much as he was concerned with obtaining "parity." Teague recalled that he replied Respondent was "not ne- gotiating for parity", Respondent wanted to be "com- petitive," i.e , to pay a lower wage rate than other firms. He remembered saying the wage rate for Elk Grove might even be less than that settled on in Santa Maria. Teague testified that at the time of the January 11 meeting no collective-bargaining contract was in effect. According to Teague the contract had expired when the last extension ran out on November 30, 1982. He says he told Brooks at the end of the January 11 meeting that the only things that were now being extended were wages and fringe benefits.s Brooks said he agreed to contact Respondent to sched- ule the next meeting He said that on January 23 or 24 when he spoke with Teague about the next meeting, 4 There was some confusion in the record about whether G C Exh 15 or R Exh 8 was the Company's proposal In fact the two are identical except that G C Exh 15 is entitled "Santa Maria " It may well be that Brooks had a copy of the Santa Maria proposal delivered to him in Octo- ber rather than the one for Elk Grove Even if that were so it would have made no difference for both proposals were identical However, all I can conclude from this record is that counsel had momentarily con- fused them for clerical purposes Whatever the facts may have been all three company officials-Watson, Teague, and Carson-had testified that they observed, on different occasions, a copy of the company proposal in the Union's hands prior to January 11 5 In this respect the notes Teague took contemporaneously with the meeting tend to corroborate him See R Exh 3(a) Teague told him the Union had to be serious and to get the successors clause out of the contract On cross-exam- ination he denied telling Teague the Union was not ready to discuss the elimination of the successors and as- signs clause and did not recall telling Teague he wanted to see the Santa Maria agreement Brooks claims a meet- ing had been scheduled for January 24 and he had not canceled it Teague says a meeting had been tentatively scheduled for January 24, but was not held because Brooks was awaiting a copy of the Santa Maria agree- ment. He remembers this because on either January 15 or 17 he called Brooks from a Houston suburb. When he asked Brooks if he had reconsidered the successors and assigns clause, Brooks replied that he had not heard from the Santa Maria business agent. Teague says he called again the next week, this time from Minnesota, and Brooks again said he had not received the Santa Maria contract Teague said the next occurrence was a letter from the Union dated February 17 suggesting several dates. Teague said he took the first date that the Union suggested, March 15. It was held as scheduled. 5 The March 15 meeting According to Brooks, Teague advised him during the March 15 meeting that the Company had decided to keep three pieces of equipment at Elk Grove, one asphalt spreader, one asphalt transport, and a set of light oil trailers. Furthermore, Brooks said the company team ad- vised him that it would try to keep three employees em- ployed, plus possibly a fourth. Brooks concedes that Teague told him that whether Respondent would be able to maintain the employment of those people and keep the equipment in Elk Grove depended on the nature of the contract that was negotiated Again, according to Brooks, Teague said Respondent wanted the successors clause out. Furthermore, he said Respondent wanted the seniority clause omitted, no cost-of-living provision, and no health and welfare maintenance of benefit provisions. The latter two items had not been in previous contracts. They told him that to make the terminal viable, they were not going to have any master contract language. He said the Company did not make any economic pro- posal. Brooks then testified there was a discussion with re- spect to the "protection of rights language" regarding members honoring picket lines. There also was some dis- cussion over the no-subcontracting language with Teague saying Respondent wanted the right to subcon- tract when necessary. The expired contract had prohibit- ed it, but in fact there had been a longstanding practice of occasionally farming out certain light oil hauling to common carriers, usually Fredericksen Tank Lines Fre- dericksen's drivers are also represented by the Union. There was also some discussion of the grievance pro- cedure. Brooks said he proposed an abbreviated arbitra- tion procedure that eliminated briefs, a written record, and called for an arbitrator's bench decision. He said Teague took "exceptions" to that saying employees had been going to other sources (i e., other forums) rather than first using the grievance procedure. CONOCO, INC 555 It should be observed here that Respondent's initial contract proposal contained some unusual language in the grievance article, that language, section 9, reads as follows Employees must first submit any and all disputes arising out of any terms of employment, wages, hours and working conditions provided for in this before exercising any rights to have any other fed- eral, state or county court, NLRB, EEOC, OSHA or other types of judicial body hearing disputes for settlement. The Union's proposal and the Company's proposal on the grievance procedures were quite different It is, how- ever, Respondent's proposal recited above that is under attack in this complaint. Nonetheless, the only discussion that actually occurred over grievance procedure appears to be Brooks' testimony described above In any event, continuing with the March 15 meeting, Brooks reported Teague as again rejecting, as the Com- pany had previously, the health and welfare maintenance of benefits clause saying even Respondent's management personnel did not have that benefit. Brooks remembered Teague saying the Union's 72-hour notice language prior to taking economic action for failing to pay health and welfare premiums was unacceptable. Brooks also remembered Respondent presented a modification of its original proposal (G C Exh. 18) later in the meeting. It contains a seniority clause, but it did not appear to be as extensive a seniority clause as the Union's earlier or later proposals Furthermore, it contin- ues to require employees to submit to the grievance pro- cedure before exercising rights to go to any other forum. It did eliminate the reference to EEOC and OSHA On cross-examination Brooks testified that although he knew the industry was in trouble, he nonetheless pro- posed an uncapped COLA clause at that time Moreover, he was evasive regarding the application of the 72-hour notice clause He said the Union never invoked that clause until after there had been a court decision finding a company to have been in arrears He agreed he told Teague that the March 15 proposal had "taken the guts out" of the agreement. He reported someone told him Elk Grove would operate as a two-truck terminal, but denied Teague told him the terminal would close if it could not make it as a two-truck terminal He agreed Teague told him that whether it was kept open depended on what kind of contract was negotiated Finally, he denied ever saying during this meeting that there was no way he would agree to "that shit in Santa Maria" or that he would strike until "hell freezes over." Teague testified that the meeting opened with Carson telling Brooks that he "foresaw" the terminal surviving as a reduced operation-one spreader truck and one light oil truck Teague said that Brooks expressed no concern when he heard that They reiterated again their concern regarding Elk Grove's viability but to Teague it ap- peared Brooks was not listening. The parties then went through the first company proposal, followed by the second proposal. He remembered Brooks saying he wanted to look the second one over and to respond with a complete proposal. He asked for an adjournment. At that point Teague recalled Brooks repeating a state- ment he had made earlier, that it was Brooks' form of negotiation to submit six proposals, slightly modified, until a company would agree. Teague responded that for three drivers Brooks had to be more realistic and get down to business He said he reminded Brooks they were operating without a contract. They again talked about the reduced amount of equipment. At that point Brooks asked some questions about whether there was any hope of bringing the trucks back. Teague replied there was not Brooks asked if employees would be laid off and either Teague or Carson told him they could foresee that if Elk Grove was going to survive, the three people would be operating two trucks Carson told Brooks that the best the spreader truck could do was to "break even" and they hoped to be able to make a little money with the light oil At one point there was some discussion of subcontracting and Brooks asked if farmouts would con- tinue as they had in the past Carson responded that they would. Teague said it was not until the March 24 meeting that he and Carson began referring to the reduction as a "permanent reduction " Teague agreed that during the March 15 meeting the parties proposed streamlining the grievance procedure. Teague said there was a company proposal under which Brooks recognized that the "double step" of past con- tracts was not required; Brooks said he thought some- thing could be worked out there Teague remembered, however, that when the Santa Maria agreement was discussed, Brooks again said he "would never have any of that shit in his jurisdiction " Teague said Brooks told him there was no way he was going to agree to that type of contract. Teague denied Brooks' testimony that the successors and assigns language was discussed at the March 15 meeting In general, Carson corroborates Teague. 6. The March 24 meeting Another meeting was scheduled for March 24. At that meeting Brooks submitted another lengthy proposal (G C. Exh 19) He said Teague looked at it and said, "Apparently you haven't got the message " Teague ac- cused Brooks of proposing master agreement language. Brooks said that the language he was proposing was "the only language [he could] live with at Elk Grove." Brooks testified Teague said, "We're right back where we started We're worlds apart " He remembered Teague saying the Company had given the Union pro- posals, what they were willing to negotiate on, and would not accept proposals from the Union other than the things they had presented. Teague listed items (G C. Exh. 19) that Respondent could not live with, the suc- cessors clause, the picket recognition language, subcon- tracting, seniority, grievance procedures, cost of living, deadheading pay, guaranteed maintenance of benefits, health and welfare, and change of operations He flipped through General Counsel's Exhibit 19, reading off those objections as he spotted them 556 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On cross-examination, Brooks asserted at first that General Counsel's Exhibit,19 was "strictly a white paper contract between Elk Grove and Local 150." He then admitted that he had copied much of the language, from other contracts including a clause requiring mandatory retirement at age 70. Despite his earlier , desire to stream- line the grievance procedure, the new grievance proce- dure (G C. Exh. 19) is complex and,quite different from that contained in the expired contract or any of its earli- er proposals. Brooks asserted that despite his proposal he was there to negotiate every article they wanted to discuss with him Once again he denied saying there was no way he would agree to the Santa Maria contract or that he was negotiating for the industry and Conoco would be treat- ed no differently. Teague testified that the March 24 meeting began with Brooks presenting him with General Counsel's Exhibit 19,' orally adding a sick leave proposal. It appeared to Teague that it had been retyped from other agreements and included a lot of language from the master. He said it did not address itself to Elk Grove and appeared'to be consistent with Brooks' earlier statements that he was ne- gotiating "for the industry." Teague observed that it continued to contain an uncapped COLA clause for a terminal that was not economically viable and the suc- cessors and assigns clause . He said the language that demonstrated how far apart the parties were was the in- clusion of the • mandatory retirement clause. He said it was identical to that in the Western 'Tank Agreement, observing that it is a management-type proposal, not a union one. He said such clauses had arisen during the 1970s when there had been legislation dealing with re- tirement ages and management proposed them. To Teague, its inclusion demonstrated that Brooks was simply not meeting the issues head on. Teague said Brooks told him the Company's proposals were "in 'no way acceptable" to the Union but that the March 24 proposal was the only language that the Union would agree to. Teague once again said the company team advised Brooks of the economic shakiness of the terminal He said shortly thereafter as lunchbreak was being declared, Brooks turned to his assistant, Helen Myers, and said, "After lunch they will tell us they are closing the terminal." He then turned to, Teague saying, "Don't take it personally." Teague said he was puzzled by those remarks. After returning from lunch Teague sought and ob- tained' a private discussion with Brooks in the hallway. He said during their discussion Brooks was quite angry accusing the Company of,wanting an agreement simply so it could sell the facility. Teague said Brooks told him he would rather see the terminal closed or strike it until hell freezes over before he would ever agree to the Santa Maria "shit." They returned to the table and once again discussed the successors and assigns clause, the uncapped COLA and the subcontracting clause that restricted farmouts Teague says-Brooks reiterated that he was negotiating for the industry. Teague, frustrated, asked if Brooks was "negotiating for the loss of jobs." He observed that no employee was present; he had hoped Brooks would s bring some. The meeting ended with Brooks saying he would never accept the Santa ,Maria contract and that he would "see you, in court." Teague said that at no time during the course of nego- tiations, despite the fact that Respondent's officials were continuously advising Brooks of the economic difficulties the Company was having, did Brooks ever seek confir- mation by asking for the Elk Grove financial records. Brooks agreed he never asked for such records, but as- serted that he was never told that there was any eco- nomic difficulty at Elk Grove, implying that he did not know he needed them 7 The closure announcement Watson testified that due to the' number of closures over the past few years it had become part of Respond- ent's policy to personally advise the employees of clo- sures giving them as much lead time as it could He said he felt it was only fair to meet them face-to-face on such a topic. On April 12 Watson and Carson conducted such a face-to-face meeting at Elk Grove with all the employ- ees. They told them the terminal would be closed in 30 to 45 days. Watson said that he tried to telephone Brooks that evening to advise him of the decision but could not reach him, so he directed Teague to do so. On the fol- lowing day Teague sent a wire to that effect signing Watson's name. The facility was actually closed on May 9. On April 21, Carol Livingston, an attorney for the Union, wrote Teague "demanding a meeting to discuss your proposal to close" the Elk Grove facility. She accused Respond- ent of closing it to avoid bargaining in good faith, to sub- contract the work, and to avoid a union contract. She asked that he contact Brooks to arrange a meeting. Julia Giller, an attorney from Respondent's labor relations de- partment, acknowledged the letter on April 25 and a meeting was ultimately scheduled. Her letter said the purpose of the meeting was "to negotiate, only the effects of the closure." Prior to scheduling the meeting Brooks wired Teague saying he wished to set a meeting up "to negotiate the wages, hours and conditions of employ- ment for our members." 8. The May 17 meeting A meeting was thereafter scheduled for May 12. On May 10 it was rescheduled to 'May 17. The, May 17 meeting was somewhat different from the previous meet- ings. For the first time employees were actually present as part of the Union's negotiating team .6 For the Compa- ny Watson returned to the negotiations , he was accom- panied by Teague. According to Brooks he told Watson and Teague that he was there to negotiate wages and hours for the Elk Grove employees. He informed them that unfair labor 6 Previously Brooks had not allowed employees to be present during the negotiations Shop Steward Art Lincoln had at one point requested to attend a meeting and although Brooks had said he could come, told Lincoln he could not ask any questions On hearing that, Lincoln decided it would be nonproductive to attend CONOCO, INC practice charges had been filed and offered to withdraw them if Respondent would bring the trucks back and return the employees to work He said Watson told him he was not there to negotiate wages, hours, and condi- tions but only to "speak of the closure of the plant." During the course of the meeting Brooks asked Watson why Respondent had not answered several grievances that had been filed on May 10 and 17 relating to alleged violations of the no-subcontracting clause and the senior- ity clause of the old contract. Brooks said Watson replied he did not feel they were arbitrable The May 17 grievances of course had been filed only that day and realistically had no chance to be digested, much less resolved. All three grievances contended that Respondent had violated an article of the 1979-1982 contract. One claimed a violation of the subcontracting clause of the Western States Area Master Agreement; another claimed a violation of the seniority clause and demanded informa- tion pursuant to a section of the California area supple- mental agreement (renewed by a second grievance on May 17). Later, and similarly treated, was a May 23 grievance regarding the alleged violation of the sick leave provision of the Western Area Tank Agreement supplement to the Western States Area Master Agree- ment. With respect to how the grievances would be proc- essed Brooks gave the following testimony: Q. (By Ms Richard): Did you have a grievance procedure in effect9 A Certainly Q. You weren't operating under a contract, were you9 A. No. Q. And you were' extended only as to wages and benefits, weren't you? A. No, no, we weren't Q Did Mr. Teague tell you in the January 11 meeting that the contract was being extended only as to wages and benefits? A No, he did not. Q. Did he tell you that in the March 15 meeting? A. No, he did not. Q. Did he tell you that in the March 24 meeting? A. He did not Also on cross-examination Brooks was asked if the May 17 meeting had been arranged to discuss the effects of closure. Counsel asked . "Didn't he [Teague] telephone you, in fact, to set up a meeting to discuss the effects of the closure on the employees?" [Emphasis added ] Brooks re- plied: "After I sent him a telegram requesting meetings " Although Brooks did not directly answer the question, it appears to me that his answer is an affirmative one. Watson testified that at the outset of the May 17 meet- ing Brooks said he was there to negotiate a contract. Watson replied that there had been ample time to do that but now the Company was present to negotiate over the effects of the closure He said Brooks made no proposals regarding the effects but asked if the Company was will- ing to bring back the equipment. 557 Teague testified the Company had come prepared to deal with issues regarding severance pay, employee transfers, past due benefits, accrued holidays, sick leave and vacations. He thought it odd that Brooks raised none of those subjects. Teague said "the Company" initiated a discussion of vacation and sick leave as one of the employees had ear- lier said a vacation check had been mistakenly drawn. They turned a corrected check over to him. There was also some discussion of health and welfare contributions made on the employees' behalf Essentially, Teague said, the Union raised no questions in an effort to bargain over the effects of the closure He does remember that at one point Brooks asserted he had not been told the terminal was in danger of closing. Since May 17 there have been no further negotiations. The Company has removed all the trucks from the facili- ty. Although liquid asphalt is still sold by the bulk plant it is on a "cash and carry basis." Customers who wish to purchase liquid asphalt now send their own vehicles, or a vehicle they have hired, to the terminal to pick up and deliver the loads. With respect to the light oil operation, all hauling is handled by an independent company, Fre- dericksen Tank Lines. It operates much as Respondent formerly did. Its tank trucks pick up motor fuel from the Aminoil terminal in West Sacramento (occasionally from another supplier) and deliver to the same stations that Respondent formerly serviced directly. The principal dif- ference is that instead of the trucks being dispatched by Respondent's lead driver or dispatcher at Elk Grove, the service stations now call Fredericksen directly to advise them of their needs. Payments to Fredericksen for the fuel delivered to those stations are made by Respondent. To the extent that it may be relevant, Bob Lewis, the vice president and assistant general manager of Freder- icksen Tank Lines, testified about the above matters He is responsible for Fredericksen's truck operations, includ- ing dispatching. He testified that between March 1982 and May 1983 Fredericksen had hauled for Respondent on a "spotty basis" He said that in May 1983 he met with some officials of Respondent, including Terminal Manager Burgess, who inquired whether Fredericksen could handle some increased traffic Lewis has been in the trucking business for 40 years. He said his firm has a collective-bargaining contract with Teamsters Joint Council No. 38 covering three locals, in- cluding the Charging Party, Local 150. He testified that the amount of business that Respondent supplied his firm would not support a full-time truck in his fleet Thus, de- spite being called by counsel for the General Counsel in support of her case, at least some of his testimony cor- roborates Respondent's economic analysis. Brooks had earlier testified that the Fredericksen con- tract had been settled after "a couple of negotiation ses- sions." Brooks also had contended that the delay in ne- gotiating the Fredericksen contract was due to the death of Lewis' predecessor However, Lewis gave contrary testimony. He said his predecessor had died in August 1982 and that before an agreement was reached with Local 150, there were approximately half a dozen meet- ings over a 4-month period. Lewis said the contract Fre- 558 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD dericksen signed was a "white paper" or "flat" agree- ment separate from the master tank contract IV ANALYSIS AND CONCLUSIONS A. Facts and Credibility Before specifically analyzing each allegation in the complaint, I must observe that the course this bargaining relationship took is quite unusual . Brooks had a tendency to accuse Respondent of various misdeeds separate and apart from conduct at the bargaining table. Although I have not specifically adverted to it in the factual section of this decision , he tended to blame Respondent for the slow negotiations during 1982 and later blamed Respond- ent for nearly each and every postponement . None of these are alleged to be violations of the Act, but as he was examined about them , it became apparent that early negotiations were delayed in order to give the multiemployer/multiunion groups the opportunity to set the industry patterns Indeed, the Fredericksen negotia- tions appear to have been handled in much the same way. On one occasion negotiations were delayed by Brooks' hospitalization Moreover, Brooks' conduct tends to suggest that it was he, not Respondent , who did not wish to reach an agreement . He claimed he had no idea that the Elk Grove Terminal was in financial straits Yet, given the overwhelming evidence to the contrary , his assertion to that effect is quite disingenuous . And, the manner in which he presented contract proposals to Respondent seems odd Brooks said he had no difficulty in accepting a "white paper" concept for Respondent . Even so, his first response was to retype a master agreement and present it as if it were a white paper agreement Later, he submitted , another proposal which , while modified, was certainly not a white paper agreement Why was he willing to give a white paper contract to Fredericksen during this same time frame but not to Respondent9 Was it because he was aware that Respondent 's terminal was - in financial difficulty? Did he actually fear Respondent was going to close no matter what the Union did) Keep- ing in mind that in November Respondent had laid off three drivers, leaving a driving , complement of only three, it seems quite likely that Brooks believed he had bigger ' and more important fish to fry elsewhere If Brooks was aware that the only way Respondent's Elk Grove facility could survive was with a wage rate less than that negotiated with Respondent 's competitors, such a concession would have defeated the Union's suc- cesses elsewhere . The question then is whether the Union had any reason to give Respondent what it wanted because it could predict that Respondent would not survive much longer in any event A public admis- sion to that effect, however, would have been politically unpalatable. How could Brooks explain to his member- ship that he was engaging in a course of conduct de- signed to allow the closure of a facility permitting union members to become unemployed ? To admit that to his membership would be entirely unlikely Yet, from a policy standpoint could Brooks do anything else? He had a large number of employees in the industry covered by the master agreement as well as independent contracts and could not very well give concessions to Respondent that had not been given elsewhere In balancing the com- peting interests, it appears Brooks made a conscious deci- sion to insist on the Industry wage rate , as well as other matters, knowing Elk Grove would not long survive. At least that way, he reasoned , the industry standards would be maintained and that would benefit the membership generally even if Respondent 's employees were sacri- ficed In fact Brooks' remark of March 24 to his assistant- perhaps facetious, but nonetheless sanguine-supports this conclusion. He told her "After lunch they will tell us they are closing the terminal." Then to Teague: "Don't take it personally ." Clearly Brooks was aware of the financial situation and just as clearly he was admit- ting his proposals did not tend to resolve the real issues Thus, it appeared to me Brooks was well aware that Respondent was in danger of closing despite his remon- strations to the contrary . Indeed Brooks was substantial- ly certain that the Conoco takeover of Douglas would result in either a closure or sale. He knew Respondent's insistence on deleting the successors and assigns clause was to facilitate the sale of the bulk plant and terminal. This was punctuated by the sale of the Paramount Refin- ery and Respondent's negotiations in Santa Maria. It was further emphasized by Respondent's negotiators, Watson and Carson in the beginning and later Teague, to the effect that no matter what contract might be negotiated for Elk Grove, Respondent still might have to close it. Thus, the only question in Brooks' mind was when that might occur His testimony to the contrary is disbe- lieved, for it is simply an effort to deflect membership criticism over his decision to let Elk Grove go. Indeed much of Brooks ' testimony should be viewed in that light . Accordingly, I conclude that the Union was well aware, beginning at least in October 1982, that Respond- ent was in financial difficulty and, absent contractual relief, would be closed or otherwise disposed of. In fact, paragraph 12(a) of the complaint amounts to a concession by the General Counsel that such was the case. That paragraph has a strange allegation . It contends that in furtherance and support of Respondent's demand for a collective-bargaining agreement on March 15 and 24, and on April 12, Respondent , apparently through Teague, threatened to close the Elk Grove terminal. Supposedly, that amounts to a, ^ violation of Section 8(a)(1) and (5) of the Act However , aside from whether it violated the Act, it amounts to a near admission that the Union knew Respondent was likely to close. Given the General Counsel's failure to in any way challenge the financial data presented by the Company the com- plaint itself becomes a binding concession of fact on the point. Oddly, Brooks', testimony tends to deny the allega- tion . He claims he.was never actually told the facility would be closed before April 13. I suppose -it can be said, truthfully , that Respondent never gave Brooks a specific date for the intended closure beforehand, but that was because, as Teague and Carson testified, Re- spondent hoped to obtain concessions from the Union in order to keep it open. Brooks, however, was beyond making such concessions , as noted above CONOCO, INC B The Threat to Close In any event, paragraph 12(a) must be dismissed on Section 7 grounds. First of all no employee was present at the negotiation sessions on the dates in question. Thus, the allegation cannot constitute a threat to employees that they would lose their jobs if Respondent did not get its way in negotiations Furthermore, even assuming that such a statement might be evidence of bad-faith bargain- ing, bad faith is usually provable independently by objec- tive means Frankly, the allegation, even if it were sup- ported by fact, adds nothing to the complaint It should be dismissed C. Conditioned Bargaining Paragraph 10(a) of the complaint alleges that Respond- ent "demanded as a condition of commencing collective bargaining that the Union agree to omit" from any new contract the successorship clause that had appeared in prior agreements. The General Counsel contends that Respondent's attitude on this subject amounted to a "take it or leave it" attitude Respondent asserts that it did not impose such a condition although it did omit the clause in its first proposal that it said was submitted to the Union prior to the October 22 meeting. It points to evidence that there was not even any serious discussion of the topic until the January 6, 1983 meeting. Thus, it argues, the condition, if that is what it was, was not present at the outset of bargaining. It further argues that it was entitled to demand elimination of the clause so long as its negotiations were conducted in good faith. One of the odd factual features of this negotiation is that Respondent's financial weakness became a real strength at the table Because the Union knew Elk Grove was in danger of closing, it could not exercise economic action with any hope of success. Respondent, through Watson and Teague, both highly experienced bargainers, recognized the anomaly and used it to advan- tage. In effect, they said to the Union: Either help us out of our financial distress by granting our demands or close us thereby putting your membership out of work. Given these facts, together with its concern for indus- try standards, the Union simply was unable to find a so- lution. Neither end was desired. It could not, for policy reasons, compromise; neither could it strike, for that would have resulted in an immediate shutdown Yet the General Counsel is, in effect, asserting that Re- spondent's recognition of weakness as strength amounts to a bad-faith, unyielding attitude. It certainly is true that Respondent badly wanted the elimination of the succes- sors clause; moreover, it was willing to insist on it to the point of forcing the Union's hand. Even so, it does not appear to me that such conduct amounts to bad faith. Respondent was in the process of selling large pieces of the former Douglas Oil properties It was attempting both to maximize the sale prices and to eliminate non- profitable or marginal locations. Clearly a unionized fa- cility without a successorship clause was a more market- able facility than one without. Discussions over that topic simply crystalized early in bargaining what would have crystalized later, for there was no way to avoid the 559 issue Brooks recognized that early on , yet he believed he had a job to do and could not yield the point either A successorship clause is normally considered to be a mandatory subject of bargaining 7 As such, parties are privileged to bargain in good faith over, and to take ad- vantage of, their respective economic strengths or weak- nesses to achieve their end. In other words, they may bargain to impasse on the topic NLRB v. American Na- tional Insurance Co , 343 U. S 395 ( 1952). It appears they did that here 8 D. The Illegal Demand Section 10(b) of the complaint alleged that Respondent in its two written proposals made an illegal demand. That relates to the last paragraph in the grievance pro- posal in which it proposed a restriction on an employee's right to seek legal redress in forums such as the courts or the NLRB 9 It is clear that such a proposal is, per se, illegal It would restrict free access to the courts and the Board. See Matlock Truck Body Corp. v. NLRB, 94 LRRM 2456, 2461 (1976). (Special Master's Report), adopted 94 LRRM 2463 (6th Cir. 1976) 10 Although it may be true that in Matlock the employer insisted on such a clause, and such insistence has not been shown here as a per se violation I have no choice but to order it remedied. It may be that Respondent had a legitimate purpose in mind, to try privately to resolve disputes before they became a matter of public record. However, the clause would have prevented employees from resort- ing to statutory procedures that they have every right to use. It may be argued, however, that because it is uncon- scionable it is unenforceable, and no doubt that is so. Yet it does not follow that its unenforceability renders it in- nocent. It would still have the chilling effect of causing employees to believe they could not seek redress under Congressional, legislative, or NLRB auspices. Public policy cannot countenance an unconscionable restriction such as this. Although I find the proposal to be unlawful as against public policy and although I shall issue a remedial order therefor, nonetheless it does not follow that the mere proposition of the article had any real bearing on the bargaining process First of all there appears to have been virtually no discussion about the proposals Brooks does not contend that he concerned himself with them. 7 Lone Star Steel Co v. NLRB, 639 F 2d 545 (10th Cir 1980) 8 Marriott Corp, 264 NLRB 1369 (1982), is not to the contrary Recog- nizing that the difference between partial closure and subcontracting is not always readily apparent, the Board there held that bargaining over the decision to close/subcontract is mandated only when the issues are "suitable for resolution" through collective bargaining It recognized that significant changes in operation are not suitable, neither are decisions lying at the core of entrepreneurial control Here the decision to go out of the private hauling business fits both categories Collective bargaining could not resolve Respondent's problems and Respondent followed its discussions with an "entrepreneurial core" decision to remove itself from the hauling business Moreover, the Union's inability to face Respond- ent's economic problems subjectively demonstrates that the topic was not suitable for resolution by collective bargaining It either could not or would not deal with the economic situation at Elk Grove 9 It did reduce, in its second proposal , the restrictions insofar as they related to the EEOC or OSHA 10 Compare NLRIJ v Laborers Local 304, 730 F 2d 768 (9th Cir 1984), Lodge 743 Machinists v United Aircraft Corp, 337 F 2d 5 (2d Cir 1964) 560 DECISIONS OF THE NATIONAL, LABOR RELATIONS BOARD Indeed Brooks proposed something else. Whatever might be said about the negative impact of the proposal, it cer- tainly had no effect on the Company's decision to close Elk Grove That was purely a matter of economics E. Bargaining Over the Decision to Close Paragraphs 12(b), 13, and 14 of the complaint alleged that Respondent transferred its vehicles and thereafter closed its terminal without first notifying the Union and giving it an opportunity to bargain over that decision. With respect to the transfer, it appears that during the winter months the trucks, per the seasonal custom, except for one-or two, had been transferred to the Santa Maria terminal Elk Grove was a seasonal operation and certainly they could be better utilized in an area not sub- ject to the rainy winter weather normally seen in the Sacramento area. Thus, to some extent, Respondent was, merely doing what it had always done during the winter months. However, the decision to transfer the trucks to Santa Maria was later converted to a permanent transfer That decision was part and parcel of Respondent's entre- preneurial decision to cut its losses at Elk Grove The Union has not complained of the layoff of employees in November for that purpose and ridding itself of most of the equipment for the same purpose is not much differ- ent. In any event since the Supreme Court's decision in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981), it has become quite clear that an employer has no obligation to bargain over a decision to close a facility,' i at least where the economic situation would not justify continued operation In that case the Supreme Court held that an economically motivated business shutdown is not a mandatory bargaining subject. In rendering that conclusion it weighed the employer's need to operate freely in deciding on an economic shutdown against 'any benefit the union might get from participating in the de- cision: It observed that if a union were given the right to participate, by labeling a decision to close as a mandato- ry topic, it would likely become "a powerful tool for achieving delay, a power that might be used to thwart management's intentions in a manner unrelated to any feasible solution the union might propose." Indeed, there are in this case facts, already adverted to, demonstrating that delay was one of the Union's pur- poses. The Union could make no feasible alternative sug- gestions It could not think of any. All it could do was to "hang on" and hope Here it is undisputed that the Elk Grove facility was operating at a loss Moreover, there is no claim that the decision was discriminatorily motivat- ed. In these circumstances, the complaint simply lacks substance and should be dismissed F. Effects Bargaining Secondly, paragraph 14 alleged that Respondent failed to meet and deal with the Union .regarding the effects of the closure . The facts, however, simply do not bear the General Counsel out Brooks, in his testimony recited above, virtually admitted that during the telephone call " See also Weather Tamer v NLRB, 676 F 2d 483 (11th Cir 1982) to arrange the May 17 meeting , Teague told him that the Company intended to negotiate over the effects of the closure Moreover; Respondent's attorney Giller in her letter of April 25 had mentioned to Union Attorney Liv- ingston that the next meeting would be "to negotiate only the effects of the closure." (Emphasis added ) The letters, the telephone call, and the meeting occurred shortly after the closure and it is inconceivable that Brooks really thought, as he testified, that he was present 'at the May 17 meeting to negotiate , a contract Instead, it ap- pears he went through a charade attempting to impress the employees who were present that his sole purpose was to negotiate 'a ' contract. Nevertheless, the Company came to the meeting for) the purpose of negotiating over the effects: It was prepared to discuss topics normally discussed in negotiations such as severance , transfer, and fringe benefit coverage . Yet Brooks made no effort to pursue those matters Under the circumstances, I con- clude that Respondent met its obligation to meet and bargain over the effects of the closure G. The Grievances Paragraphs 15-18 of the complaint alleged that Re- spondent "failed and refused to meet and confer with the Union" regarding the grievances filed on May 10, 17, and 23. The complaint alleged this to be a repudiation of the collective-bargaining contract in violation of Sections 8(a)(5) and 8(d). Respondent contends that the contract had expired on November 30, 1982, with the last exten- sion. It agrees that it continued to pay the wages and fringe benefits as set forth in the old agreement Howev- er, certainly Teague told Brooks at the-March 25 negoti- ations that the Company had extended only the wages and fringes 12 Thus, I credit Teague's testimony that beginning at least on January 11 when he entered the negotiations, no contract was in existence, though it'may have been ex- tended for a limited-period by operation of law. Section 8(d) of the'Act, in part, states. "where there is-in effect a collective-bargaining contract covering. employees in an industry affecting commerce, the duty to bargain collec- tively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desir- ing such termination or modification- . - . -(4) continues in full force and effect, without resorting to strike or lockout, all the terms and conditions-of the existing con- tract for a period of sixty days after 'such notice [re- quired by subparagraphs (1) and (3)] is given oi"until the expiration date of such contract, whichever occurs later." It is the General Counsel's burden of proof, of course, to show that the notice provisions of Section 8(d) have not been given There is no evidence in this record one way or the other Moreover, when the General Counsel moved early in the proceeding to strike an 8(d) allega- 12'With respect to Teague's corroborative bargaining notes, I observe that the General Counsel did not object to the receipt of the company officials' notes During the testimony, it was apparent that Brooks like- wise had taken notes but these were not offered Although I do not draw an adverse inference against the Union for failing to provide its notes, Teague's notes buttress Respondent's view CONOCO, INC - 561 tion from the complaint, I, denied it. Thus, the General Counsel had every opportunity to show that Respondent had somehow failed in its duty under Section 8(d) to continue the contract. It appears therefore that,even if the contract were extended by operation of law from November 30, 1982, that extension died on January 29 Thus, the duty to maintain the contract for the 60-day period of Section 8(d)(4) appears to have been met This is not to say that Respondent had no obligation to bar- gain or that it could unilaterally change matters without first bargaining with the Union, it simply is to observe that the agreement had expired 13 It is true that under certain circumstances the griev- ance and arbitration procedure will be allowed to sur- vive. These invariably deal with incidents that have oc- curred prior to or are closely connected to the expiration of the contract, not subsequent matters. The Supreme Court in Nolde Bros. v. Bakery & Confectionary Workers Local 358, 430 U.S. 243 (1977), discussed that problem It held that grievances that arise under the contract or from the termination of the contract itself must be proc- essed under the terms of the expired contract. Although Nolde Bros. appears to be support for the notion that the grievance-arbitration procedure survives the contract's expiration, its facts suggest that it did not in all cases. As Justice Stewart observed in his dissent, the Board has so held. See Sterling Drug, 185 NLRB 241 (1970), recog- nized by the Court in Gateway Coal Co. v. United Mine Workers, 414 U S. 368 (1974) Nolde Bros. presented the question of whether the em- ployer was obligated to process grievances over sever- ance pay; the contract there covered "all" grievances that might have arisen, whether contractual or not. Moreover, the plant was closed only 3 days after the contract expired. The dispute under litigation arose over the amount of severance pay called for by the contract. The Court based its conclusion on the fact that sever- ance pay was expressly covered by the contract as it governed the cessation of employment. . In each instance here, the grievances were filed on May 10, 1983, or thereafter without specifying when the underlying incidents occurred; neither is there any proof regarding when they occurred I cannot simply presume that the alleged breaches took place during the life of the contract or the life of the contract as-extended by law 14 13 Compare S & W Motor Lines, 236 NLRB 938 ( 1978), and Cardinal Operating Co, 246 NLRB 279 (1979) . - 14 On May 3, 1983, Terminal Manager Max Burgess issued a warning notice to driver Art Lincoln regarding a commingling of light oil prod- ucts The notice stated it was issued pursuant to a clause in the apparent- ly expired agreement The General Counsel asserts that its issuance tends to confirm that the contract had been extended at least until May I have This case is, therefore, unlike Nolde Bros The contract expired at the latest ' in January. The closure was not until May,9, and the grievances, filed thereafter do not claim that the incidents occurred prior to the expiration. Accordingly, I did not see that Nolde Bros., applies here, I am, therefore, bound by Hilton-Davis, supra, and find that the grievance procedure in the instant case did not have life beyond the contract, insofar as these particular grievances are concerned Therefore, as the General Counsel has failed to meet its burden of proof on the issue, this allegation should be dismissed. 15 On the foregoing findings of fact and on the entire record in this case, I make the following CONCLUSIONS OF LAW 1. Respondent, Conoco, 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. Respondent, during the course of its bargaining with the Union, proposed an illegal grievance clause that tended to deprive employees of the right to seek legal re- dress either through the courts or before the Board; the mere making of such a proposal is a violation of Section 8(a)(5) and (1) and the good-faith requirements of Sec- tion 8(d) 4. The General Counsel has failed to prove by a, pre- ponderance of the evidence that Respondent in any other manner violated the Act as alleged. THE REMEDY Having found that Respondent engaged in certain vio- lations of Section 8(a)(5) and (1) of the Act, I shall rec- ommend that it be ordered to cease and desist therefrom and to take certain affirmative action necessary to effec- tuate the policies of the Act. - [Recommended Order omitted from publication.] considered the'argument and conclude that while it tends to show the contract had not expired, it is not conclusive The parties had adopted a formal way of extending it in 1982-invariably confirmed in writing They did not do so in 1983 and given the fact that other extensions had been reduced to written form, the absence of such confirmations by the actual negotiators significantly outweighs Burgess' note to the contrary Accordingly, I do not give it any importance is Although it may be argued that American Sink Top Co, 242 NLRB 408 (1979) has modified, the Hilton-Davis rule, its facts closely parallel Nolde Bros The facts presented here do not To the extent that Digmor Equipment, 261 NLRB 1175 (1982) asserts that American Sink Top is con- trolling, again I see a Nolde Bros factual distinction Indeed , Digmor ap- peared to overstate the breadth of American Sink Top If the Board had wished to specifically overrule Sterling Drug, it has had ample opportuni- ties, but has not yet done so