J. Josephson, Inc.

1188 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD J. Josephson, Inc. and District 65, United Automo- bile, Aerospace, and Agricultural Implement Workers of America, AFL-CIO. Case 22-CA- 14518 12 February 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSON AND BABSON On 10 July 1987 Administrative Law Judge El- eanor MacDonald issued the attached decision. The Respondent filed exceptions and a supporting brief, and the Charging Party filed a brief in oppo- sition to the Respondent'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, and conclusions' and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, J. Joseph- son, Inc., South Hackensack, New Jersey, its offi- cers, agents, successors, and assigns, shall take the action set forth in the Order. I In affirming the judge's conclusion that no valid impasse existed on 31 December 1985, the time of the Respondent's unilateral action, we find it unnecessary to rely on her discussion and analysis of the parties' bargaining history after 31 December 1985 Marta Figueroa, Esq, for the General Counsel James B. Clark, Esq (Mauch, Peterpaul, Clark & Vitolo, P.A.), of Springfield, New Jersey, for the Respondent Ellen F Moss, Esq., of New York, New York, for the Charging Party. DECISION STATEMENT OF THE CASE ELEANOR MACDONALD, Administrative Law Judge. This case was tried in Newark, New Jersey, on 18 Feb- ruary 1987. The complaint alleges that Respondent, in violation of Section 8(a)(1) and (5) of the Act announced that it would make unilateral changes in terms and con- ditions of employment and implemented the changes without negotiating to impasse with the Union Respond- ent alleges that the parties had negotiated to impasse. On the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the General Counsel, Respondent, and the Charging Party, I make the following' FINDINGS OF FACT 1. JURISDICTION Respondent, a corporation located in South Hacken- sack, New Jersey, annually manufactures, sells, and dis- tributes wall coverings and related products valued in excess of $50,000 directly in interstate commerce. I find that Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that District 65, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL- CIO is a labor organization within the meaning of Sec- tion 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A The Negotiations The Union represents the following unit of employees of Respondent. All production and maintenance employees includ- ing shipping and receiving employees employed by Respondent at its South Hackensack, New Jersey facility, but excluding all artists, leadmen, styling strike-off employees, styling technicians, color com- puter operator, warehousemen, sales employees, ad- ministrative employees, office clerical employees, professional employees, guards and supervisors as defined in the Act. The first collective-bargaining contract between the parties had a term from 28 April 1983 through 30 No- vember 1985. In early November 1985, Respondent and the Union began negotiating for a successor agreement. The testimony of the witnesses differs somewhat about the precise dates of the earliest meetings between the parties and the dates of the earliest exchange of demands. This discrepancy arises from a failure of memory rather than from any willful distortion of the facts I find that all the witnesses in the instant case testified truthfully to the best of their abilities When the record contains dif- fering accounts of the dates when certain meetings oc- curred, I will rely on the testimony of Respondent's chief representative to the negotiations, James B. Clark, Esq, which was based on accurate and detailed notes taken contemporaneously with the negotiations The wit- nesses generally agreed about the substance of the nego- tiations The parties' first negotiating session was held on 14 November 1985. Al Dicker, vice president of the Union, went over the Union's demands in great detail.2 The 36 I The record is corrected so that wherever the administrative law judge is referred to as "hearing officer," the title will read "Administra- tive Law Judge " 2 Dicker led the union negotiating team, which included Vice Presi- dent Bill Tate, Organizer Jimmy Hodges, and an employee negotiating committee The Employer was represented by Clark and its team includ- ed Gile Goodman and his son, Mark Goodman, the owners of Respond- ent, as well as other managers of the Company 287 NLRB No. 121 J JOSEPHSON, INC 1189 demands included a $30-per-week wage increase each year, an improved medical plan, three additional holi- days, various changes in language to the existing con- tract, changes relating to leadmen, improvements in va- cation and bereavement entitlement, provisions relating to job security, and more money for safety shoes The parties met a second time on 20 November 1985 At this meeting the Company presented its proposals. In support of its position, the Company explained that it was being hurt by foreign imports and that it needed to cut production costs by replacing its slow and outdated machinery. The EPA had fined Respondent for polluting the atmosphere and an apparatus costing $600,000 was needed to meet legal air quality standards. In order to generate new business, the Company wanted to create new sample books of wallpaper In all, the Company needed to raise $3 million to permit it to stay in oper- ation and compete successfully The Union suggested that one way of achieving savings was for the Company to switch to the union pension and medical program The Company responded that it did not wish to join a program with a potential withdrawal liability The Com- pany's written proposals presented at this meeting includ- ed a 2-day reduction in holidays, a 3-day reduction in sick leave, reduction in worker's compensation, and a re- duction in washup time from 15 minutes to 5 minutes. The proposals also contained provisions relating to tem- porary shutdowns, recalls, crew size, and other changes in language The Company wished to change its insur- ance carrier and adopt a plan offered by Massachusetts Mutual; employees who wished dependent coverage would now have to pay $7.50 per week for this feature. The Company stated that it expected economic conces- sions from the Union including a wage reduction. The parties met again on 6 December 1985. Mark Goodman made a detailed presentation of the problems faced by the Company He said he and his father were willing to invest $3 million if the Union gave commit- ments on increased productivity and cost containment, including a wage reduction. Clark spoke again, stating that the Company would not extend the contract beyond 1 January 1986 On that date, there would be a 10-per- cent reduction in wages, cessation of contributions to the educational fund, a cut in sick leave, a cut in washup time to 5 minutes, a cut in worker's compensation, and as of 1 February 1986, employees would have to contribute to the health and welfare plan. The fourth negotiating session took place on 19 De- cember 1985. The Union began by stating its rejection of the Company's proposals. The Union asked that the Company withdraw its ultimatum and negotiate. The Union acknowledged the Company's problems but said it would not bargain under threats or coercion Dicker said the parties would be able to resolve their differences, and the Union offered to meet every day in view of the im- minence of the 1 January 1986 deadline Clark said the company position was "not chiseled in stone" but that if there were no agreement by 1 January, the Company would implement its proposal Mark Goodman explained that the Company had to order the air pollution reduc- tion equipment by 15 January 1986 in order to satisfy the EPA of its good intentions by the 27 January EPA dead- line The Union discussed its problems with the Compa- ny's job-security proposals including proposals relating to leadmen, bumping, layoffs, and transfers to new ma- chines. At the next meeting on 23 December, the Union changed certain of its proposals The most significant union changes in position included a reduction in its wage demand from $30 to $25 per week, a reduction in the holiday and vacation demand, and an indication that the safety shoe demand had been dropped. The Compa- ny then responded to each of the Union's proposals and rejected most of them The Company did not change its wage or health and welfare proposals. The Union sug- gested that a mediator be called and the Company agreed. On 26 December 1986 the parties met with the media- tor. Each side explained its position to the mediator. The seventh meeting took place on 31 December 1985, again with the mediator. The Company improved its hol- iday proposal, worker's compensation proposal, sick leave proposal, and it withdrew certain other proposals The parties agreed to lengthen the grievance filing period and to change the bereavement provisions The Company did not change its 10-percent wage cut propos- al. It said this was a final offer The Union said it would not accept a contract which provided no raises for 3 years A long time was spent resolving an issue relating to leadmen and the parties discussed ways of avoiding the $7.50 charge for dependent health coverage. At the end of the meeting, Dicker spoke to Clark, Gile Good- man, and the mediator. Dicker said he could see where the parties were going; the Union was "not going to look for a lot of money, we understand the problems," but the Union needed a "token" on wages. The Union would also not insist on a lot of the demands it had made initial- ly. Dicker said he would try to convince the employees to go along with a modest increase and he asked Clark to postpone the unilateral changes slated for 1 January 1986 including the wage cut, and changes in washup time and education funds. Dicker asked, "Why don't you hold off until we meet? I think we're making progress and we can be able to settle " Clark said he could not hold off the changes and he mentioned that the next pay- roll was already arranged Clark said the Company would go ahead with the changes On 1 January 1986 the Company instituted the 10-per- cent wage cut and other changes it had previously de- manded of the Union The parties next met on 9 January 1986 The Company gave the Union a new position on many terms- The wage proposal was now for a freeze' in the first contract year retroactive to January 1, a 2-percent increase the second year, and a 2-1/2-percent increase the third year The $7.50 charge for dependent coverage under the health plan was not to take effect until December 1986 The Company had changed its proposal with respect to their subjects as well The Union said the parties were very close and if the medical plan problem could be worked out they would be able to wind up the entire contract. 1190 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The parties next met on 30 January. There was a lengthy discussion of the health plan proposal. Language regarding leadmen, warnings, and transfers was agreed to. The parties stated their positions on various open items and moved closer to agreeing to a wage provision. At the next negotiation session on 6 February, the par- ties discussed the health plan in great detail and reached agreement on worker's compensation. When they next met on 13 February, the parties dis- cussed the medical plan again ; the Union accused the Company of negotiating in bad faith and walked out of the negotiations. The Company then distributed its con- tract proposals to the employees and eventually agree- ment was reached In March the parties signed a memorandum of agree- ment . Wages were frozen for the first year of the con- tract and were increased by 2 and 2-1/2 percent, respec- tively, in the second and third years. However, the freeze of wages was made retroactive to 17 February 1986 Thus, the 10-percent reduction in wages from 1 January to 16 February was never corrected. B. Discussion and Conclusions From the facts described above it is clear that no im- passe existed on 1 January 1986 when Respondent made the unilateral changes in wages and working conditions. The facts show that at the first negotiating session the Union went through its demands. At the second session, the Company described its proposals. At the third session on 6 December, the Company described its financial con- dition in detail and said that if the contract were not set- tled by 31 December it would institute unilateral changes. At the fourth and fifth meetings, the parties ne- gotiated and discussed their respective positions. The Union offered to meet every day and the Company said its position was not chiseled in stone The Union reduced its wage and other demands. A mediator was called in and the parties briefed the mediator at the sixth session: On 31 December, the date of the Company 's ultimatum and the seventh bargaining session, the Company modi- fied its proposals and both parties discussed a great many issues in detail. Agreements were reached regarding some issues. The Union said it understood the Compa- ny's problems and was not looking for a large wage in- crease, it just needed a "token." This was a significant breakthrough on the all important issue of wages. These facts show constant discussion and movement by the parties. On one of the critical issues, wages, the facts show that the Union was moving toward the Com- pany's position. There was significant progress on 31 De- cember, the very day before Respondent instituted uni- lateral changes, including a 10-percent reduction in wages. It cannot be said that negotiations were exhausted and that further discussions would have been futile. The Union kept asking for further discussions and at the very next meeting on 9 January, Respondent materially changed its proposals including the wage proposal. Clearly, the parties were not firmly entrenched in their positions. The fact that the parties were not close on money issues does not indicate that the negotiations had reached an impasse it shows that the parties still had many hours of bargaining ahead of them in order to dis- cuss and then resolve their differences . By 1 January 1986, the parties had met only seven times, and only twice with the mediator . Impasse is not indicated by the mere number of issues still open between the parties. The summary given above shows not that further negotia- tions would have been futile, but that the negotiations were lengthy and difficult due to the nature of the issues confronting the Company and the Union. Moreover, Respondent 's announcement at the third bargaining session that it would make unilateral changes on 1 January 1986 was a failure to bargain in good faith in that it was not predicated on actual impasse having been reached by that date. I find that Respondent violated Section 8(a)(5) and (1) by taking unilateral action on 1 January 1986. See Taft Broadcasting Co., 163 NLRB 475 ( 1967), enfd . sub nom. Television Artists (Taft Broadcasting) v NLRB, 395 F.2d 672 (D.C. Cir. 1968); Towne Plaza Hotel, 258 NLRB 69, 78 (1981 ) (recent union concession and expression of willingness by union to consider employer's proposals shows no impasse existed), Marriott In-Flite Services, 258 NLRB 755, 766 (1981), enfd 729 F .2d 1441 (2d Cir. 1983), cert denied 464 U S 829 (1983) (no impasse based on short period of time after intervention of the media- tor); Henry Miller Spring Co, 273 NLRB 472 ( 1984) (no impasse based on continuous negotiations involving con- cessions and agreements and a final lengthy session during which some items were settled); SGS Control Services, 275 NLRB 984 (1985) (recent concessions and statement that differences could be worked out show no impasse was reached). CONCLUSIONS OF LAW 1. The following employees of Respondent constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. All production and maintenance employees includ- ing shipping and receiving employees employed by Respondent at its South Hackensack, New Jersey facility, but excluding all artists, leadmen, styling strike-off employees, styling technicians, color com- puter operator, warehousemen, sales employees, ad- ministrative employees, office clerical employees, professional employees guards and supervisors as defined in the Act. 2. At all times material , the Union has been the exclu- sive representative of all employees within the appropri- ate unit described above for purposes of collective bar- gaining within the meaning of Section 9(a) of the Act. 3. By threatening unilaterally to implement changes and by unilaterally implementing changes in terms and conditions of employment on 1 January 1986, at which time no bargaining impasse existed , Respondent refused to bargain in violation of Section 8(a)(5) and ( 1) of the Act. THE REMEDY Having found that Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and J. JOSEPHSON, INC. 1191 (1) of the Act, I shall recommend that it be required to cease and desist therefrom and that it take certain affirm- ative action designed to effectuate the policies of the Act. Respondent having unlawfully reduced wages, it must make the employees whole for loss of earnings and other benefits sustained from 1 January through 16 February 1986. Backpay shall be complied in a manner consistent with Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987). On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed3 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. (d) 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 NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government ORDER The Respondent, J. Josephson, Inc., South Hacken- sack, New Jersey, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Threatening unilaterally to implement and unilater- ally implementing changes in the terms and conditions of employment, in the absence of a bargaining impasse of its employees in the appropriate unit described above. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Make all employees whole for any losses they may have suffered as a result of Respondent's unlawful changes in the terms and conditions of employment as of 1 January 1986 in the manner set forth in the remedy section of the decision. (b) 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. (c) Post at its South Hackensack facility copies of the attached notice marked "Appendix."4 Copies of the notice, on forms provided by the Regional Director for Region 22, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- 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 . l02 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses- 4 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 ." The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered 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 representatives of their own choice To act together for other mutual aid or protec- tion To choose not to engage in any of these protect- ed concerted activities. WE WILL NOT threaten unilaterally to implement and WE WILL NOT unilaterally implement changes in the terms and conditions of employment for employees in the unit described below without bargaining in good faith with District 65, United Automobile, Aerospace, and Agricultural Implement Workers of America, AFL- CIO. All production and maintenance employees includ- ing shipping and receiving employees employed by Respondent at its South Hackensack, New Jersey facility, but excluding all artists, leadmen, styling strike-off employees, styling technicians, color com- puter operator, warehousemen, sales employees, ad- ministrative employees, office clerical employees, professional employees, guards and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL make whole all bargaining unit employees for any losses they may have suffered as a result of our unlawful unilateral changes in the terms and conditions of employment, with interest. J. JOSEPHSON, INC.