Powell Electrical Manufacturing Co. And Process Systems, Inc.

POWELL ELECTRICAL MFG CO 969 Powell Electrical Manufacturing Company and Proc- ess Systems, Inc. of Houston and International Brotherhood of Electrical Workers, Local Union No. 716, AFL-CIO. Cases 23-CA-10144 and 23-CA-10239 30 December 1987 DECISION AND ORDER BY MEMBERS JOHANSEN, STEPHENS, AND CRACRAFT On 13 May 1987 Administrative Law Judge Burton S. Kolko issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed limited cross-excep- tions and a supporting brief. The Respondent filed an answering brief to the General Counsel's limited cross-exceptions. The Charging Party filed an an- swering brief and brief in support of the judge's de- cision. 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 conclusions and to adopt the recommended Order as modified.3 1. We agree with the judge, for the reasons stated by him, that no impasse was reached by the parties prior to the Respondent's unilaterally imple- menting the terms and conditions of its second con- tract proposal. ' The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties The Respondent has excepted to the judge's order to reinstate all 62 employees listed in the complaint and Order (Appendix A) According to the Respondent, among the 62 are persons who either did not strike, have since died, resigned, accepted other employment, or have returned to work As is customary, we leave to the compliance stage a final determi- nation of those discnmmatees entitled to the relief granted in the Order The General Counsel has requested a visitatorial clause in the Order The request is denied 2 The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings 9 The General Counsel, in her limited exceptions to the judge's deci- sion, excepted to the failure of the judge to order that the employees who appear in Appendix A of the decision be made whole An examina- tion of par 2(d) of the recommended Order convinces us that the judge has provided the requisite relief However, the language of the notice is deficient and is corrected by the substituted notice In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be comput- ed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U S C § 6621 Interest on amounts ac- crued prior to I January 1987 (the effective date of the 1986 amendment to 26 U S C § 6621) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) In urging reversal on the issue of impasse, the Respondent relies on Lou Stecher's Super Markets, 275 NLRB 475 (1985), and Bell Transit Co., 271 NLRB 1271 (1984), revd. 788 F.2d 27 (D.C. Cir. 1986). Assuming the continued viability of Stecher's and Bell Transit, we find these cases factually dis- tinguishable. In Stecher's the finding of impasse was based on the parties' contemporaneous understanding of the state of the negotiations Their statements of "no way" to "get together" coupled with the subse- quent failure to meet were found to establish that each acknowledged the futility of further bargain- ing. Here, on the contrary, the judge found and the record supports that the parties were not yet at the stage of bargaining where either could reasonably believe that impasse had occurred. The Respondent relies on the superficial similarity of statements in Stecher's and the instant case while ignoring the different contexts, which lead us to conclude that serious bargaining on substantial issues was still possible in the instant case. In Bell Transit the Board found that the parties, having negotiated over the "critical" issue of wages, understood that they were either at im- passe, or had an agreement over wages, a core issue of a collective-bargaining agreement. The case involved a unique set of facts and the Board analysis in Bell Transit was rejected by the court of appeals. See Teamsters Local 175 v. NLRB, 788 F.2d 27 (D.C. Cir. 1986). Here, although the union representative indicat- ed the parties were far apart, he clearly intended to continue bargaining and saw room for movement. This is evidenced by his solicitation of Mediator Chandler's assistance in arranging further bargain- ing sessions. The parties had yet to bargain exhaus- tively over core economic issues. The relatively limited discussions engaged in do not provide a basis for the Respondent's alleged belief that fur- ther bargaining would have been futile. See McCor- mick-Shires Millwork, 286 NLRB 754 fn. 2 (1987). 2. Although the judge correctly found the Re- spondent could not lawfully withdraw recognition based on an employee petition because of other unfair labor practices, the judge also found that be- cause there was no employer misconduct in pro- curing the petition for decertification of the Union as bargaining representative, it was untainted and the Respondent was privileged to rely on the peti- tion as a basis for a good-faith doubt of the Union's continued majority status. Contrary to the judge, when, as here, an employer, prior to the signing of a petition, engages in conduct designed to under- mine employee support for, or cause their disaffec- tion with, the union, the petition is tainted and the 287 NLRB No. 100 970 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD employer will be precluded from relying on it as a basis for questioning the union's majority status and withdrawing recognition from that labor organiza- tion. Hearst Corp., 281 NLRB 764 (1986). Because of its unlawful unilateral changes, the Respondent was precluded from using the petition as a basis for a good-faith doubt of the Union's continued majori- ty status. Thus, it is unnecessary to rely on the judge's analysis referred to above on the "taint" issue. 3. We agree with the judge's conclusion that the Respondent's unilateral implementation of its second contract proposal prior to impasse convert- ed the economic strike into an unfair labor practice strike. The causal connection between the Re- spondent's unfair labor practice and the prolonga- tion of the strike was established. The Union had knowledge of the Respondent's unilateral imple- mentation of its last contract proposal. The Union informed striking employees of the Respondent's actions at the 23 August 1985 meeting and those present voted to continue the strike as an unfair labor practice strike. Further, we note that the Re- spondent's implementation of its last contract offer did adversely affect the employees' terms and con- ditions of employment. Indicative of this is the im- plementation or limitation on both grievances and the grievance and arbitration procedure. Thus, we find that when striking employees voted to contin- ue the strike in protest of the Respondent's con- duct, there was a change in the nature of the strike. See GSM, Inc., 284 NLRB 174 (1987). Moreover, as the judge noted, the Respondent's withdrawal of recognition of the Union clearly prolonged the strike and provided a separate basis for finding that the strike was converted to an unfair labor practice strike. See Brooks & Perkins, 282 NLRB 976 (1987); Vulcan Hart Corp. v. NLRB, 718 F.2d 269 (8th Cir. 1983). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that Respondents Powell Electri- cal Manufacturing Company and Process Systems, Inc., Houston, Texas, its officers, agents, succes- sors, and assigns, shall take the action set forth in the Order, except that the attached Appendix B is substituted for that of the administrative law judge. APPENDIX B 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 withdraw and withhold recogni- tion from and refuse to bargain with International Brotherhood of Electrical Workers, Local No. 716, AFL-CIO, as the collective-bargaining representa- tive of. All production and maintenance employees and crew leadermen in the Employers' plant, excluding office and clerical employees, fore- men and assistant foremen, engineers and draftsmen, timekeepers, guards and watchmen. WE WILL NOT change wage rates or other terms and conditions of employment of employees in the above-described bargaining unit without prior noti- fication to and bargaining with International Broth- erhood of Electrical Workers, Local No. 716, AFL-CIO as the representative of those employ- ees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain collectively with International Brotherhood of Electrical Workers, Local No. 716, AFL-CIO as the exclusive bargain- ing representative of all employees in the above-de- scribed bargaining unit, respecting rates of pay, wages, hours of employment, or other terms and conditions of employment, and, if any understand- ings be reached, embody such understandings in a signed agreement. WE WILL, on request by International Brother- hood of Electrical Workers, Local No. 716, AFL- CIO reinstate any terms of employment of employ- ees in the above-described bargaining unit that were unilateral changes following our unlawful POWELL ELECTRICAL MFG CO 971 declaration of impasse in bargaining on 22 August 1985. WE WILL make you whole for any losses of ben- efits that you have sustained because of our unilat- eral changes in your terms of employment follow- ing our unlawful declaration of impasse in bargain- ing on 22 August 1985, with interest paid on the amounts owed. WE WILL make you whole for any loss of earn- ings resulting from our failure to reinstate you after 17 October 1985 when we received your uncondi- tional offer to return to work. WE WILL reinstate the following employees as of 17 October 1985, discharging where necessary em- ployees hired to replace them: Knotts, Johnny P. Gonzales, Joe P. Limon, Dario L Grizzoffi, Alfred L. Rincon, Ramon Lira, Francisco Solis, Tony Chessher, Lester D. Ho, Can Vinh Stovall, Mary B Ho, Ky V Nguyen, Ut T. Nguyen, Louis N. Salazar, Antonio Nguyen, Hue Tran, Xuong P. Dean, M. Diane Randle, Iowine Faltesek, Leon F. Mumphord, Jr., Clarence A Vance, Stephen A Dixon, Jo Ann K Moore, Fern M Harger, Donald E. Lira, Frank J. Barron, Robert O. Trinh, Phuong V. Arredondo, Jose G. Venturi, Juan E. Rion, Mary B. Huynh, Quang C. Jones, Cleo C. Nguyen, Tho M. Tran, Thuyet V. So, Kim Holt, Kenneth A Ly, Luong Quach, Peter Ortiz, Pedro A Camarillo, Ramon G. Shane, David W. Turberville, Danny P. DePrima, Jr., Ellis C. Nguyen, Bang N. Nguyen, Cuong Q Garmany, George P. Faltesek, Michael L. Lang, Xuong S. Diep, Phat V. Tran, Trong Phan, Lieu D. Ly, Luong P. Ly, Hieu V Nguyen , Chau T. Chang, Frank Do, John T. Mosby, John A. Harris, James L. Herrin, Scott L. Kysar, Betsy Cu, Len V. Tran, Kien T. POWELL ELECTRICAL MANUFACTUR- ING COMPANY AND PROCESS SYS- TEMS, INC. OF HOUSTON John A. Ferguson Jr., Esq, for the General Counsel James J. Loeffler, Esq. (Chamberlin, Hrdlicka, White, Johnson & Williams), of Houston , Texas, for the Re- spondent. Patrick M. Flynn, Esq. (Watson, Flynn & Bensik), of Houston, Texas, for the Charging Party DECISION STATEMENT OF THE CASE BURTON S KOLKO, Administrative Law Judge. In the midst of bargaining for a contract to replace the expired one the Union called a strike. The Company declared that the bargaining was at an impasse, it implemented portions of what it had offered during bargaining, it re- placed those workers who were striking, and it refused further to recognize the Union as the employees' bar- gaining representative The General Counsel's complaint alleged that in doing these things the Company violated Section 8(a)(1), (3), and (5) of the National Labor Rela- tions Act, 29 U S C § 158 The Company denied that it violated the Act I agree with the General Counsel, as discussed below i 1. THE BARGAINING AND THE STRIKE Powell Electric Manufacturing Company is a Dela- ware corporation. Process Systems, Inc is a Utah cor- poartion. They jointly maintain an office and place of business in Houston, Texas, where they manufacture and sell electrical, distribution, and process control equip- ment (the Company). The Company was in a collective-bargaining relation- ship with the International Brotherhood of Electrical Workers, Local Union No. 716, AFL-CIO that dates back three decades. The latest contract was to expire on 5 August 1985. In July, the parties started bargaining for the next contract. They met on 17 and 31 July, on 1-2, 20, and 22 August, and on 4 September Just before the 22 August meeting the Union began its strike During the 22 August meeting the Company declared an impasse and announced implementation of its own terms and con- ditions of employment On 23 August the Union declared that its economic strike had been converted by the Com- pany to an unfair labor practice strike. On 17 October the Union presented the Company with an unconditional offer to reinstate all the striking employees, which ac- cording to the complaint the Company has failed to do The central issue that these facts present is whether the Company was correct in declaring on 22 August that the parties were at an impasse in their bargaining, for if so then the Company would have been within its rights in establishing terms and conditions of employment with- out further bargaining or even consultation with the Union, so long as the unilateral implementation was con- sistent with what had been bargained about NLRB v. Katz, 369 U S. 736 (1962) I The first charge was filed on 23 August 1985 The complaint first issued on 8 November 1985 The hearing was held in Houston, Texas, 6- 9 May 1986 Briefs were filed on 27 June 1986 972 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD An impasse in bargaining is a tough bear to wrestle be- cause it requires the Board to look back and determine nunc pro tunc whether one party was "warranted in as- suming . . . that further good-faith bargaining . . would have been futile." Alsey Refractories Co., 215 NLRB 785, 787 (1974). See Taft Broadcasting Co, 163 NLRB 475, 478 (1967), affd 395 F 2d 622 (D C. Cir 1968). Thus, we must start our inquiry by looking at the bargaining, although not in detail because there is no al- legation of bad-faith bargaining But we must understand where the parties were in their bargaining to find wheth- er Powell's negotiators reasonably concluded that it was fruitless to bargain further and that, therefore, Powell was entitled to implement its bargaining proposal with- out still further bargaining with the Union. A The Bargaining The contract was in effect until 5 August 1985. On 3 March 1985 the Union gave timely notice of its intent to open the contract for negotiations After an exchange of letters the parties began negotiating on 17 July 1985, in a session lasting 2 hours. The Union's assistant business manager and chief negotiator, Benny Reynolds, proposed numerous changes from the existing contract, going through them and the contract article by article In re- sponse, the Company's attorney, James Loeffler, replied that the Company had not had the time to prepare its proposal, but that it would be ready before the next ses- sion. The next session was 2 weeks later, on 31 July 1985, lasting for 2-1/2 hours The Company's president, Art Chamberlain, described Powell's economic plight The Company was losing money, was facing increased com- petition, and had cut some salaries The Company's posi- tion would be one of hard bargaining in good faith based on its increased competition and decline in business After that opening Loeffler presented to Reynolds the Company's first contract proposal, which did not follow the structure of the current contract It was a very dif- ferent proposal than the Union's The Company had costed out the Union's proposal, and was stung by its conclusion that the added cost in the first year alone would have been over $800,000. The Union's economic proposals headed in the opposite direction from the Company's. The Union wanted the Company to pay the full cost of the group insurance plan, automatic rather than merit wage increases, and improvements in the COLA formula. The Union also sought increased vaca- tion benefits, increased sick leave days, additional break periods, overtime after 8 hours, required overtime, and shift differentials. For its part, the Company's proposal included an expanded management-rights article, a most- favored-nations clause, a work rule and discipline article, expanded no-strike language, elimination of seniority as a factor in promotions and transfers, a merit wage increase change, a cut in paid jury days, proof of necessity for fu- neral leave, and a change in the shift differential from 6 percent to a set 50 cents an hour The essence of this meeting was that the Company's proposal was presented, with the Union flipping through it and asking questions The third bargaining session was held the next day, I August 1985, for 2 hours At this meeting, Union Attor- ney Patrick Flynn orally presented several counterpro- posals The parties also discussed the subjects of bulletin boards, rest periods, and union labels. The Union stated that its initial proposals on these subjects remained un- changed With respect to the Company's work rules pro- posal, Reynolds stated that the Union would submit spe- cific language on work rules and disciplinary procedures at a subsequent bargaining session The Union also pre- sented a dues-checkoff proposal and a political action committee checkoff proposal Loeffler asked Flynn to submit a package proposal summarizing the Union's oral and written proposals Reynolds responded that the Union would prepare a full written proposal and present it sometime after 2 August, the date of the next sched- uled bargaining session The fourth bargaining session was held on 2 August during the afternoon. It concluded at approximately 5 p m At this meeting the parties went over the Union's information request The Company provided some the information that the Union had requested. Loeffler then asked Reynolds specifically what the Union's position was on the Company's first contract proposal. Reynolds responded by telling Loeffler that "all those proposals that were not incorporated into counterproposals by the Union, addressed in our counterproposals, or direct pro- posals and were not under discussion, we rejected." Before the meeting concluded, Reynolds asked Loeffler if he had any objections to having a Federal mediator attend the next bargaining session. Loeffler responded that he had no objection On 5 August, the Union held a meeting of its mem- bers, and a majority of the members voted to strike. Reynolds testified that he told the membership that he felt the negotiations were progressing slowly, and that he wanted to be able to put pressure on the Company to move at a faster pace. A second vote was taken to give the Union's negotiating committee authority to call a strike if needed during the negotiations On 8 August, Reynolds hand-delivered to the Compa- ny's manufacturing manager, Tony McKeon, a copy of the Union's promised first full draft written contract pro- posal Reynolds did not discuss with McKeon any of the specifics of the Union's proposal on 8 August He gave McKeon copies of the proposal, stating that it constitut- ed a full draft of the proposals that had been promised.2 The fifth bargaining session began in the afternoon of 20 August and concluded at approximately 4:45 p in. Federal Mediator Jim Chandler was present pursuant to Reynolds' invitation At this meeting, the Union present- ed a slightly revised version of the Union's first full draft proposal. The parties went over it article by article Flynn pointed out certain language on which the parties had previously agreed. The remainder of the meeting was spent going over the Company's second contract proposal, which had been handed to the Union with a cover letter from Loeffler. (Jt Exh. 18 ) Reynolds marked out certain language that the Com- pany agreed to delete. The parties agreed to accept artl- 2 I credit Reynolds over McKeon that Reynolds said on 8 August that he was presenting the Union's "full draft" of the promised proposals, rather than the "final draft " POWELL ELECTRICAL MFG CO 973 cle II, section 2 as the complete management-rights clause. The parties discussed other sections, but did not reach agreement on the majority of these other items. Reynolds noted that article XXVII "Hourly Wages" was the first wage proposal submitted by the Company. It called for a wage freeze the first year and a 3-percent in- crease the second and third years The Union responded that it would return with a counterproposal on wages. There was no further discussion on wages at this meet- ing After the parties had finished going over the Compa- ny's second contract proposal, Loeffler asked Reynolds when the Union was going to strike, and he requested the Union's position on the Company's proposals Reyn- olds again responded that "if we had not addressed them, didn't have them under consideration or discussion, that we were rejecting their proposals as submitted." On 22 August at approximately 1 30 p m. the Union commenced its economic strike The sixth bargaining ses- sion had previously been scheduled to begin at this time, but because of the strike, did not begin until about 1 50 p m It lasted only until about 3 p m. McKeon was not present at this session, as he was occupied with the strike The meeting began with Loeffler immediately request- ing a position from the Union on the Company's propos- als Flynn responded by requesting the Company's posi- tion on the Union's proposals The parties agreed to caucus to consider their positions The Union returned from its caucus with a modified proposal, which Reynolds and Flynn detailed item by item The Company responded only to item 4, and a no- tation was made by Flynn that agreement had been reached on this item. According to Reynolds, the Com- pany did not respond to any of the other items, and did not present any counterproposals to the Union at the 22 August meeting As Reynolds testified, "The Company did not seem to be interested that day in negotiating " Loeffler stated that he believed the Union's proposal was too expensive and workable Loeffler then proceed- ed to describe the various subjects on which he believed the parties were still far apart. These subjects included, inter alia, work stoppages, stewards, probationary period, layoff and recall rights, training, seniority, vacations, leadermen, jury duty pay, sick leave, holidays, discipline, rest periods, hours of work, overtime, shift differentials, severance pay, benefit plans, supervisors working with tools, merit increases, dues checkoff, and wages and COLA Loeffler concluded by stating that it was unfortunate that the "Union had chosen to go to war" and that the Company would replace all striking employees and would implement certain articles and sections of the Company's second contract proposal3 Loeffler again The Company effectuated for 1 year its wage proposal made on 20 August, in effect a wage freeze Also implemented were other items from its 20 August "second contract proposal" dealing with management rights, employee freedom and security, promotions, filing of vacancies, and layoffs, hours of employment and overtime, work rules and employ- ee attendance, merit wage increases, shift differentials, report and call-in or call-back pay, jury service, funeral leave, supervisor, safety, physical examinations and company right to search, approved leave of absence, stated that it was unfortunate the Union had "gone to war," and that in his opinion "we had reached impasse " On 23 August the Union held a meeting of its mem- bers Flynn and Reynolds both spoke at this meeting. Reynolds testified that he told the members that in his opinion "the Company had implemented the provisions of their last offer prior to reaching impasse, and we felt we had an unfair labor practice strike . due to the fact that the Company had taken the action that they did," and he asked them "if they wanted to continue this strike as an unfair labor practice " The approximately 92 members present then voted unanimously to continue the strike as an unfair labor practice strike The Union's picket signs were changed to add language indicating that the strike was an unfair labor practice strike. B Impasse Vel Non The Board does not lightly find an impasse It requires that the parties must have reached "that point . in ne- gotiations when the parties are warranted in assuming that further bargaining would be futile "4 Futility is what must appear, not some lesser level of frustration, discour- agement, or apparent gamesmanship I cannot conclude that futility was apparent when the Company declared an impasse in negotiations. What the Company was, doing was fighting fire with fire, gamesmanship with gamesmanship, by sensing a tactical mistake in the Union's strike and exploiting the Union's error by forc- ing its own terms and conditions of employment on the workplace The Company was meeting the Union's hard bargaining and economic weaponry with its own This was economic warfare, hence the metaphor, but it was generated not by any impasse in the bargaining but by conscious decisions to "augment" the bargaining process with actions away from the bargaining table. I infer this from the timing both of the Union's strike and the Com- pany's declaration of impasse The strike occurred to hasten the pace of negotiations, and not without reason for the parties had been doing no more than sparring with each other. The Union was ne- gotiating from a posture of business as usual, a shopping list of add-ons to the existing contract The Company for the first time was using an attorney to do its bargaining, and the attorney made it clear that the Company was not going to let the Union call the shots So what consumed the first four meetings was merely posturing. It was not until the fourth meeting, on 8 August 1985, that the Union presented to Powell the first full draft of the pro- posals that until then the Union was making orally and piecemeal. And it was not until the fifth meeting, the last before the Union struck and the Company declared an impasse, that the Company responded to the Union's full draft with its second contract proposal On this company document was its first wage proposal, a wage freeze in the first year followed by a 3-percent increase in the second and third years. military service, holidays, vacations, sick leave, benefit plans, grievance and arbitration procedure, job classifications and hourly wage rates, and general work rules and regulations 4 Old Man's Home of Philadelphia, 265 NLRB 1632, 1634 (1982), quot- ing from Patrick & Co, 248 NLRB 390, 393 (1980) 974 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD As Attorney Loeffler put it in the following meeting when he declared an impasse, by following its first look at the Company's wage proposal with a strike instead of the promised counterproposal the "Union had chosen to go to war " And the Company decided to react in kind But to say that the fifth meeting created an impasse that was reinforced by the strike is to jump the gun I find that it was to soon in the process, with the full proposals from both sides having only just been exchanged in meeting five, for an impasse to have occurred in that meeting or in the sixth Let us again look at meeting number 5, held on 20 August, recalling in the prior meet- ing (8 August) the Union's oral proposal's were for the first time presented in writing At the 20 August meeting the Union presented a slightly revised version of the written proposals that it had handed out at the prior meeting, and the parties went over that document article by article Then they went over the document that the Company handed out, which was its second contract proposal. That document for the first time mentioned wages, on which the Union promised a counterproposal at the next meeting Then Loeffler asked Reynolds when the Union was going to strike and what the Union 's position was on the Compa- ny's proposals (the Company's first contract proposal had been made at the second meeting on 31 July) Reyn- olds said, as he had done in the meeting on 2 August, that "if we had not addressed them, didn't have them under consideration or discussion, that we were rejecting [them] as submitted " Respondent rests heavily on these statements and on the slim list of agreed-to items to justify its declaration of impasse. At the time the Union struck and Powell retali- ated by-declaring impasse, Attorney Loeffler was not in- correct in describing the various subjects on which he believed the parties were still far apart- work stoppages, stewards, probationary period, layoff and recall rights, training, seniority, vacations, leadermen, jury duty pay, sick leave, holidays, discipline, rest periods, hours of work, overtime, shift differentials, severance pay, benefit plans, supervisors working with tools, merit increases, dues checkoff, wages, and COLA This is, indeed, an im- pressive list, but all it showed was how little the negotia- tors had come past the posturing and sparring that pre- ceded the strike and the ensuing declaration of impasse As for Reynolds' statements of "rejection," I find that it strains credulity that with his acumen and experience Loeffler took what he heard seriously Reynolds on the stand impressed me as one who enjoyed the posturing of negotiating, and it strikes me that he was playing his own version of hardball with Loeffler. The latter was doing the same right from the start, and he maneuvered Reynolds to again "reject" the Company's proposals, thus precipitating the Company's declaration of impasse on 22 August. As Reynolds testified, "the Company did not seem to be interested that day in negotiating " What the Company was interested in was to turn the Union's strike to its own advantage, the route to which was opened through the declaration of an impasse that, I find, did not exist What Reynolds and Loeffler were competing for was control of the agenda The Union wanted to follow the format of the old contract; the Company in effect wanted to start from scratch What Reynolds was conveying to Loeffler was "let's do it my way," hardly the language of impasse when serious ne- gotiating had only just begun. The Company counters "the strike was in itself clear evidence that an impasse had been reached," citing Bi- Rite Foods, 147 NLRB 59 (1964) That being the case, it argues, its bargaining position was enhanced when during the 22 August meeting it learned that less than one-half of the employees were striking, with that en- hanced position the Company "was free to use its in- creased bargaining strength to its advantage," apparently by unilaterally imposing on the bargaining unit the terms and conditions of employment that it had offered the Union. Whether a strike may cause an impasse or be evidence that an impasse existed, here it is neither The strike was undertaken out of frustration with the pace of bargain- ing. Any "impasse" was caused by the Company's seiz- ing the opportunity of apparent union weakness to de- clare that the bargaining was at an end and that it would go on its own way It is bootstrapping for the Company to use the strike and its reaction to it as proof of an im- passe. This is not being pollyanish That there was no im- passe when the Company declared one is not to suggest that if the parties continued their sluggish bargaining in- definitely there would have been agreement on a new contract. Such a finding is not needed, nor could it be made without extra-record speculation, to find on this record that when the Company declared an impasse there was not one, even as far apart as the parties were. They had most of their work ahead of them, and judging by the opening sessions clearly had different goals in mind for a contract. Whether their differences ever would have been resolved cannot be known, but that is the nature of the process. It is for the parties through earnest, strenuous, tedious, frustrating, and hard bargain- ing to solve their mutual problem-getting a contract- together, not to quit the table and take a separate path Although the Company said that it needed to go its own way in order to run its business, that takes us nowhere. Of course the Company must run its business, and "busi- ness justification" as a defense under the Act is not un- known But the Company's need to run its business is a piety absent any further justification that passes muster under the Act. It merely reflects the Company's attitude in bargaining, that its economic condition required changes in work rules and wages. Bargaining with this position is one thing (and there is no allegation of bad- faith bargaining), unilaterally implementing it is another, and in so doing the Company violated Section 8(a)(5) and (1) of the Act. NLRB v. Katz, 369 U S 736. ii THE COMPANY'S WITHDRAWAL OF RECOGNITION At the behest of the Federal mediator the parties met again on 4 September Loeffler informed the Union that the Company had a good-faith doubt that the Union con- tinued to represent a majority of the employees and that the Company could not continue to recognize or to bar- gain with the Union The mediator then left, there was POWELL ELECTRICAL MFG CO 975 limited discussion about the basis for the Company's statement, and the meeting ended. The witnesses differed on whether Loeffler specifically mentioned a petition or merely referred to "external evidence " In any event, we know from the record that it was an employee petition that impelled the Company's action, albeit a petition that the Company did not show to the Union. It is well settled that an employer may not lawfully withdraw recognition from an incumbent union because of an asserted doubt about the union's continued majori- ty status (or as here the presumption of majority status following the expiration of its collective-bargaining agreement) Guerdon Industries, 218 NLRB 658 (1975). However, the employer may so act if the assertion of doubt is based on objective considerations sufficient to afford the employer a reasonable ground for believing that its employees no longer desire to be represented by the Union Celanese Corp., 95 NLRB 664 (1951); Terrell Machine Co., 173 NLRB 1480 (1969). Decertification pe- titions may be sufficient to cast doubt on a union's con- tinued majority status if signed by a majority of the em- ployees, and "will afford an employer a reasonable basis for withdrawing recognition from a labor organization, provided that, prior thereto, the employer has not en- gaged in conduct designed to undermine employee sup- port for, or cause their disaffection with, the union." Hearst Corp, 281 NLRB 764 (1986). Dresser Industries, 264 NLRB 1088 (1982) The first evidence that the Union might not be repre- senting a majority of the employees came during the 22 August meeting, when the Company learned through its count that only 45 percent of its employees were partici- pating in the strike Standing alone, employees' nonsup- port of a strike does not give rise to a presumption that they no longer desire union representation. Cutten Super- market, 220 NLRB 507 (1975). More usable evidence was received on 4 September, before the meeting sched- uled that day, when employee Frank Reed handed to the Company's then president, Art Chamberlain, an employ- ee petition signed by 52 percent of the employees stating their desire no longer to be represented by the Union Chamberlain testified that on 26 August 1985 employ- ee Greg Andrews accosted Chamberlain on the shop floor and asked him "what they could do on the shop floor to get rid of this union." Chamberlain told An- drews he would get back to him, and then called Attor- ney Loeffler, who told him that the requirement was for a petition with employees' signatures greater than 50 per- cent of the bargaining unit Loeffler also gave Chamber- lain "some language that could head up and be the lan- guage for the petition." Chamberlain testified that he "wrote it down and went back out into the shop and gave it to Greg, and said that this is the language that should be at the heading, and the names should be added to the list for the those that were interested. And I said, But I can't get involved in it." On 4 September 1985 truckdriver Frank Reed brought a petition to Chamberlain that had the heading language on it that Loeffler had given to Chamberlain who, in turn had given it to employee Andrews, stating that "We, the undersigned employees of Powell Electrical Mfg. Co and Powell Process Systems Inc. no longer wish to be represented by the International Brotherhood of Electrical Workers Local Union 716 " (U. Exh R 1 ) There followed, according to Chamberlain, "[ s]ome- where around 160, 161 [names] something like that" which represented "a little better than 52 percent" of the employees. After receiving the petition, on Loeffler's advice Chamberlain had McKeon verify the signatures "with signed job files, to look and see if the signatures looked like those that were employees that had signed up for work." Satisfied, Chamberlain notified Loeffler, who informed the Union that afternoon in the bargaining ses- sion that had been scheduled by the mediator The Union's brief sums up its own sentiments and those of the General Counsel's nicely (pp 6-7): Respondent, although it had the burden of proof on this issue, presented no testimony from any wit- nesses [about] who obtained the signatures; when the signatures were obtained; how the signatures were obtained; and what was said to the signers. Only the first page of the petition states that the "undersigned employees" no longer wish to be rep- resented by the Union. . The petition's further unreliability is demonstrated from the last page which has a series of un-numbered signatures.. . . Respondent offered no testimony from the employ- ee or employees who obtained the signatures and no testimony from any of the signers themselves No employees testified that they did not wish to be rep- resented by the Union. Moreover, no member of management testified that any employees expressed dissatisfaction with the Union to management, prior to the withdrawal save one. [Chamberlain testified that employee Greg Andrews asked how to get rid of the Union.] But the issue is not a narrow one of evidence to sup- port a factual change in employee sentiments. It is one of bona fides, the Company's, in using the petition to form and harbor a good faith doubt that it was dealing with a union that no longer represented the wishes of a majority of the bargaining unit employees.5 Nothing in Chamber- lain's testimony establishes employer misconduct that would taint the petition, and neither the General Counsel nor the Union through evidence, testimonial or real, even attempted to establish employer involvement ex- tending beyond a lawful response to an employee's in- quiry Where there is no management taint, the Board has accepted that an employer is "privileged to rely on [an informal] petition signed by a majority of its employ- ees as a basis for a good-faith doubt of the Union's con- tinuing majority status." Johns-Manville Sales Corp., 282 NLRB 182, 183 (1986). Accordingly, I find that the Company was privileged to rely on the petition as a basis for forming its good-faith doubt of the Union's majority status. The next question, then, is whether the Company on the basis of its good-faith doubt lawfully withdrew rec- 5 Here I draw the same distinction between a factual and good-faith basis for doubt as the Board did in Guerdon Industries, supra, 218 NLRB at 660 976 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ognition from the Union. As noted earlier, an employer's good-faith doubt on a union's continued majority status, "will afford an employer a reasonable basis for with- drawing recognition from a labor organization, provided that, prior thereto, the employer has not engaged in conduct designed to undermine employee support for, or cause their dissatisfaction with, the union." Hearst Corp., supra, em- phasis added It strikes me that an employer that (1) declares an im- passe in contract negotiations and (2) implements unilat- erally terms and conditions of employment that differ from those that had previously bargained for by the Union is acting in a manner "as to either affect the Union status, cause employee disaffection, or improperly affect [a] bargaining relationship itself" Guerdon Indus- tries, supra, 218 NLRB at 661. An employer's action taken unilaterally rather than in consultation with the employees' bargaining representative shows that repre- sentative to be ineffectual, a showing that can be a pre- cursor to the employees' attempt to "get rid of the Union." In the instant context when the Employer's uni- lateral action is found to be an unfair labor practice and precedes the employees' petition by 2 weeks, the proxim- ity of the former to the latter causes me to infer that the Employer's reliance on the employees' petition is tainted by its unfair labor practice. Therefore, I conclude that the Company's withdrawal of recognition of the Union is a violation of Section 8(a)(1) and (5) of the Act All production and maintenance employees and crew leadermen in Respondents' plant, excluding office and clerical employees, foremen and assistant foremen, engineers and draftsmen, timekeepers, guards and watchmen. 4. The Union has been and is the exclusive representa- tive of all the employees in the unit for collective bar- gaining the meaning of Section 9(a) and Section 8(a)(5) of the Act. 5. On 22 August 1985 Respondents unilaterally imple- mented new terms and conditions of employment with- out agreement having been reached with the Union, thereby violating Section 8(a)(1) and (5) of the Act 6. The strike that began on 22 August 1985 was con- verted to an unfair labor practice strike by the unfair labor practice strike described in paragraph 5, and was prolonged by that and by the unfair labor practice de- scribed in paragraph 7 7. On 4 September 1985 Respondents withdrew recog- nition from the Union without a valid basis for doing so, and thereafter refused to bargain with the Union, thereby violating Section 8(a)(1) and (5) of the Act 8. Respondents have failed to reinstate as of 17 Octo- ber 1985 the striking employees listed in Appendix A, thereby violating Section 8(a)(1) and (3) of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed8 III CONVERSION OF THE STRIKE For similar reasons, the Company's unilateral imple- mentation of its contract proposals converted the eco- nomic strike to an unfair labor practice strike. That action did more than "seriously imped[e] the success of the negotiations," Walker Die Casting, 255 NLRB 212, 225 (1981), it cut them off. When they resumed at the mediator's request, the Company quickly cut them off again by withdrawing its recognition of the Union. The employees had, therefore, ample reason on 23 August to change the nature of their strike 8 Accordingly, Re- spondent had a duty to reinstate immediately all the unfair labor practice strikers as of 17 October, the date of the Union's unconditional offer to return to work CONCLUSIONS OF LAW 1 Respondents are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.7 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act 3. The appropriate unit for collective bargaining within the meaning of Section 9(b) of the Act is: 6 In any event, the Company's unlawful withdrawal of recognition of the Union on 4 September is the type of conduct that the Board "has invariably concluded prolongs a dispute and thus converts an eco- nomic strike into an unfair labor practice strike " Brooks & Perkins, 282 NLRB 976, 981 (1987) r During 1985 Respondents purchased and received at their Houston, Texas facility products, goods, and materials valued in excess of $500,000 directly from points and places located outside the State of Texas ORDER The Respondents , Powell Electrical Manufacturing Company and Process Systems, Inc., Houston , Texas, and its officers , agents, successors, and assigns, shall 1 Cease and desist from (a) Withdrawing and withholding recognition from and refusing to bargain with International Brotherhood of Electrical Workers, Local Union No. 716, AFL-CIO, as the exclusive bargaining representative of employees in the following bargaining unit: All production and maintenance employees and crew leadermen in Respondent's plant , excluding office and clerical employees , foremen and assistant foremen, engineers and draftsmen, timekeepers, guards and watchmen. (b) Changing terms and conditions of employment of employees in the bargaining unit without notifying or bargaining with the Union. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. 8 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses POWELL ELECTRICAL MFG CO. (a) On request, bargain with the Union as exclusive representative of the employees in the unit described above concerning terms and conditions of employment and, if an understanding is reached, embody ,the under- standing in a signed agreement. (b) On request by the Union, reinstate any term and condition of employment of employees in the bargaining unit that it unilaterally changed after unlawfully declar- ing an impasse in negotiations on 22 August 1985. (c) Make employees in the bargaining unit whole for any loss of benefits resulting from the unilateral changes in their terms and conditions of employment. (d) Reinstate the employees listed in Appendix A to their former jobs or, if such positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges previously enjoyed, discharging if necessary any replacements hired after 21 August 1985; and make such employees whole for any loss of earnings resulting from the failure to rein- state them on 17 October 1985 with interest thereon to be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977), see generally Isis Plumbing Co., 138 NLRB 716 (1962). Employees for whom no employment is immediately available shall be placed on a preferential hiring list for employment as positions become available and before other persons are hired for such work. Priori- ty for placement on such list is to be determined by se- niority or some other nondiscriminatory test. (e) Preserve and, on request, make available to the Board or its agents for examination and copying all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (f) Post at its place in Houston, Texas, copies of the attached notice marked "Appendix A "9 Copies of the notice, on forms provided by the Regional Director for Region 23, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- 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 " 977 ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. APPENDIX A Knotts, Johnny P. Gonzales, Joe P Limon, Dario L. Grizzoffi, Alfred L Rincon, Ramon Lira, Francisco Solis, Tony Chessher, Lester D. Camarillo, Ramon G Stovall, Mary B. Turbeville, Danny P. DePrima, Jr., Ellis C. Nguyen, Louis N. Salazar, Antonio Garmany, George P. Faltesek, Micahael L. Dean, M. Diane Randle, lownie Faltesek, Leon F. Mumphord, Jr., Clarence A. Vance, Stephen A. Dixon, Jo Ann K. Moore, Fern M Harger, Donald E. Lira, Frank J. Barron, Robert 0 Trinh, Phuong V. Arredondo, Jose G. Venturi, Juan E. Rion, Mary B. Huynh, Quang C. Jones, Cleo C Nguyen, Tho M. Tran, Thuyet V. So, Kim Holt, Kenneth A. Ly, Luong Quach, Peter Ortiz, Pedro A. Ho, Can Vinh Shane, David W. Ho, Ky V. Nguyen, Ut. T. Nguyen, Bang N. Nguyen, Cuong Q. Nguyen, Hue Tran, Xuong P. Lang, Xuong S. Diep, Phat V. Tran, Trong Phan, Lieu D. Ly, Luong P Ly, Hieu V. Nguyen, Chau T. Chang, Frank Do, John T. Mosby, John A. Harris, James L. Herrin, Scott L. Kysar, Betsy Cu, Len V. Tran, Kien T.