Aqua-Chem, Inc.,

1108 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Aqua-Chem, Inc., Cleaver Brooks Division and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers, AFL-CIO. Case 26-CA-9795 May 26, 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND BABSON On June 10, 1983, Administrative Law Judge Phillip P. McLeod issued the attached decision. The Respondent filed exceptions and a supporting brief and the General Counsel filed cross-excep- tions and a supporting brief, and an answering brief. 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 conclusions2 as modified herein. The judge concluded that the Respondent had violated Section 8(a)(3) by maintaining and enforc- ing a policy which discriminated against certain un- reinstated strikers in the filling of postlayoff vacan- cies. For the reasons set out below, we agree that the Respondent violated the Act in recalling laid- 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 mcorrect. 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. Contrary to the judge's statements in sec. III,B of his decision, the Re- spondent's manufacturing manager, Neil Bone, did not characterize em- ployee Rosemary Taylor as an unreinstated striker, and there is no evi- dence that the Respondent did not have Taylor's correct address. The record shows only that Taylor did not return to work after the Respond-. ent attempted to recall her. Moreover, contrary to the judge's further statement in sec. III,B, the record shows that the Respondent stipulated that there were employees on the unremstated striker list who were "qualified to perform the jobs of certain of the laid off employees, striker replacements." These inadvert- ent errors are insufficient to affect the results of our decision. 2 In adopting the judge's conclusion that the Respondent violated Sec. 8(a)(1) by its August 1982 letter to unremstated strikers threatening cutoff of reemployment rights should they fail to furnish written notice within 5 days of intention to retain these nghts, we rely solely on the fact that the threat of termination was contained only in the letters to unreinstated strikers and not in similar letters it sent to laid-off striker replacements. Accordingly, we find it unnecessary to rely on the judge's discussion of Charleston Nursing Center, 257 NLRB 554 (1981), for the proposition that an employer may never require replaced strikers to respond to such a re- quest at the risk of losing reinstatement rights We shall dismiss the allegations that this conduct also was violative of Sec. 8(a)(3) and (5) We note the absence of any evidence that the Re- spondent adversely altered the reinstatement rights of the strikers who did not respond to the letter and the absence of any evidence that the Respondent unilaterally changed their terms and conditions of employ- ment. off striker replacements over more senior unrein- stated strikers in May-August 1982. Regarding the May-August 1982 recalls from layoff, we note that the Respondent's production and maintenance employees commenced an eco- nomic strike in March 1980. In April 1980, the Re- spondent began hiring permanent replacements for its striking employees. The strike ended in August 1980 when the Respondent executed a new collec- tive-bargaining agreement which included a strike settlement agreement. The agreement provided, in pertinent part, that the strikers were deemed to have made an unconditional offer to return to work and that they would be returned to work as job vacancies occurred. At the time, the Respond- ent had some 94 employees, composed of 69 per- manent striker replacements and 25 former strikers who had abandoned the strike. In December 1981, the parties negotiated a new collective-bargaining agreement and, while the provisions were not in- cluded in the later contract, they agreed to abide by the provisions of the earlier agreement pertain- ing to the reinstatement rights of strikers. Since the end of the strike and through the hearing before the judge, several replacements had terminated their employment and the Respondent had recalled strikers to replace them. The Respondent has not hired any new employees. In March 1982, the Respondent had a work force of 88 employees. It then laid off 15 employ- ees, 14 of whom were striker replacements. In May 1982, it laid off another employee. There had been no layoffs at the Respondent's facility since 1973, except for one brief layoff 6 or 7 years before. At the time of the March 1982 layoff, the Respond- ent's manufacturing manager, Neil Bone, advised the employees in a group that owing to a lack of work they were being laid off. He said that their life insurance would be canceled on March 26 and their medical insurance would be canceled after April 30; he advised the employees to look for an- other job or put in for unemployment; and he said that the layoff was for an indefinite period. On the same date as the group meeting, the Respondent sent letters signed by Fabrication Foreman Ken Stokes to the employees to be laid off indicating that "due to the current economic business condi- tions, the [Respondent] is forced to reduce its work force." The letter then noted the upcoming cancel- lations of various insurance coverage and conclud- ed: "Please make sure that your current address on file is your correct address as your last paycheck and any recall correspondence will be mailed to the address on file." It also indicated that "[the Re- spondent] will make every effort to return you to work as soon as possible. If you have any ques- 288 NLRB No. 121 AQUA-CHEM, INC. 1109 tions, please contact me." Bone testified that he had participated in the decision to lay off employ-- ees in March 1982 and that he did not know at the time the decision was made how long the layoff would last because the economic situation was bad. Bone testified at the hearing in November 1982 that there had not been too much change since the layoffs. In May 1982, however, the Respondent began recalling certain employees from layoff. It recalled one employee, who was a striker replacement, in May; it recalled another employee in July and two in August. Of the three recalled in July or August, two were striker replacements. It then laid off an- other employee in October. In recalling the em- ployees, the Respondent did not consider recalling any of the remaining unreinstated strikers. The Re- spondent took the position that its layoff of re- placements did not create any vacancies to which the unreinstated strikers were entitled to be re- called. Alternatively, the Respondent contended that even if the layoffs did create vacancies, the Union had waived the strikers' rights to recall to their positions in the strike settlement agreement. The judge concluded that the Respondent had violated Section 8(a)(3) by maintaining and enforc- ing a policy which effectively afforded replace- ments superseniority over unreinstated strikers. The judge noted that economic strikers who have been permanently replaced but who unconditionally offer to return to work are entitled to be reinstated upon the departure of the replacements. Laidlaw Corp., 171 NLRB 1366 (1968). 3 The judge found that the replacements' layoff for a prolonged, in- definite period did constitute their departure from the Respondent. Accordingly, he found that the later reopening of positions constituted vacancies to which the unreinstated strikers were statutorily entitled to be recalled over less senior laid-off re- placements. He distinguished this case from Ban- croft Cap Co., 245 NLRB 547 (1979), in which po- sitions opening up after certain layoffs were found not to be "vacancies" which the employer was ob- ligated to offer to unreinstated strikers. The judge noted that the layoffs at issue in Bancroft were of short duration and due to a shortage of material, hence not resulting in the "departure of replace- ments." It was thus distinguishable from the instant case in which, he concluded, the layoffs were pro- longed and for an indefmite period leading, in the judge's estimation, to the "departure of replace- ments" under Laidlaw. The judge further rejected the Respondent's contention that, in the strike set- tlement agreement, the Union had waived the strik- Enfd. 414 F.2d 99 (7th cir. 1969), cert. denied 397 U.S. 920 (1970). ers' rights to recall in these circumstances. The judge noted that in negotiating that agreement the parties had not discussed the recall rights of unreim- stated strikers in the event that the replacements were laid off. As noted above, we agree with the finding of a violation but we do so for the following reasons. We note initially that we disagree with the judge's analysis of this issue insofar as he reasoned that an economic layoff of permanent replacements for a prolonged indefinite period is per se a vacancy that triggers the unreinstated strikers' Laidlaw rights.4 In this regard, we find that this analysis fails to sat- isfactorily take into account the employer's right to permanently replace economic strikers and to assure the replacements of the permanency of their positions. NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938). A replacement could hardly be called "permanent" were we to find that every layoff for an indefinite period creates a vacancy which activates a striker's reinstatement rights. See Giddings & Lewis, Inc. v. NLRB, 675 F.2d 926 (1982), denying enf. 255 NLRB 93 (1981). On the other hand, a strike also does not termi- nate the employment relationship of a striker. Thus, Section 2(3) of the Act provides that an indi- vidual whose work ceases as a result of a labor dis- pute remains an employee if he has not obtained any other regular or substantially equivalent em- ployment. Clearly, replaced economic strikers who unconditionally offer to return to work are entitled to reinstatement upon the departure of replace- ments unless the former strikers have acquired reg- ular and substantially equivalent employment or the employer can sustain its burden of proving that its failure to offer reinstatement was for legitimate and substantial business reasons. Laidlaw, supra. Thus, the key question presented in cases involving the layoff of permanent replacements is whether the layoff in fact signified the departure of the re- placements under Laidlaw with the consequent cre- ation of a vacancy which triggers the strikers' rights to reinstatement when the vacated position again opens up. This issue appears to be an open question 3 which we resolve today in the following manner. We find that the proper resolution of the ques- tion of whether the layoff of a permanent replace- ment signifies the departure of the replacement under Laidlaw must be achieved by properly bal- 4 For the reasons relied on by the judge, we agree with his conclusion that the Union did- not waive. the strikers' recall rights in the strike settle- ment agreement. 5 See, e.g., Medallion Kitchens, 275 NLRB 58 fn. 2 (1985), enfd. 806 F.2d 185 (8th Cir. 1986). There is some brief discussion of the issue at fn 1 of Bancroft Cap, supra. 1110 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ancing each of the rights identified above. As noted by the Supreme Court in discussing a related issue in NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378 (1967): "It is the primary responsibility of the Board . . , to 'strike the proper balance be- tween the asserted business justifications and the in- vasion of employee rights in light of the Act and its policy." (Quoting NLRB v. Great Dane Trailers, 388 U.S. 26 (1967).) We find that such a balance can be struck in the following fashion. When it is alleged that an employer has violated Section 8(a)(3) by recalling laid-off permanent replacements ahead of unreinstated strikers, we shall require the General Counsel to first establish a prima facie case that the layoff truly signified the departure of the replacements under Laidlaw and thus created va- cancies to which the unreinstated strikers were en- titled to be recalled. In this regard, the General Counsel will be required to show that a strike has occurred; that the strikers have made an uncondi- tional offer to return to work; that a layoff of per- manent striker replacements has occurred; that the replacements were recalled from layoff instead of the former strikers; and that, based on objective factors, the laid-off permanent replacements had no reasonable expectancy of recall. Cf. Bancroft Cap Co., 245 NLRB 547 fn. 1. The objective factors rel- evant to the replacements' reasonable expectancy of recall would include, inter alia, evidence con- cerning the employer's past business experience, the employer's future plans, the length of the layoff, the circumstances of the layoff, and what the employee was told regarding the likelihood of recall. See, e.g., Atlas Metal Spinning Co., 266 NLRB 180 (1983); Bancroft Cap, supra. Once the General Counsel has established a prima facie case that a Laidlaw vacancy exists to which the striker is entitled, the burden shall shift to the employer to show that in fact no such Laidlaw vacancy oc- curred or that its failure to recall the striker was otherwise based on legitimate and substantial busi- ness justifications, such as those identified in Fleetwood Trailer, supra, 389 U.S. at 379. In this fashion, we shall properly balance the strikers' Laidlaw rights against the employer's Mackay rights. 6 We do not deem the burden placed on the 6 Our concurring colleague disagrees with our analysis and would allo- cate the parties' respective burdens differently In this regard, he would not require the General Counsel to establish the existence of a vacancy as an element of the violation alleged, but would require that the employer prove that a vacancy did not exist as justification for failing to recall a stnker. Contrary to our colleague's contention, neither Laidlaw nor Fleetwood Trailer supports the allocation of burdens m this fashion. Both cases are factually distinguishable, and neither addresses the precise ques- tion presented here, i.e., whether the layoff of a permanent replacement creates a vacancy to which an unremstated striker must be recalled upon the employer's restaffing the position In both LauIlaw and Fleetwood Trailer, "vacancies" clearly existed and, accordingly, the respective em- ployers could not lawfully engage new hires rather than recall their un- General Counsel to be inconsistent with the Laid- law principle that an economic striker who has been permanently replaced but who unconditional- ly offers to return to work is entitled to be reinstat- ed upon the departure of a striker replacement. We do conclude that to activate that right the General Counsel must present a prima facie case that the re- placement's departure has created such a Laidlaw vacancy. Turning to the case at hand, we find that the General Counsel has established a prima facie case that the Respondent's March 1982 layoff of the re- placements created vacancies to which the unrein- stated strikers were entitled to be recalled when the positions subsequently opened up. Thus, we conclude that the General Counsel has met the burden of establishing that those laid off had no reasonable expectancy of recall when laid off. In this regard, we note that employees were advised that the layoff was due to a lack of work and was for an indefinite period, that their insurance bene- fits were to be canceled, and that they should look for another job or apply for unemployment com- pensation. We find that this evidence establishes that, based on objective factors, those laid off had no reasonable expectancy of recall at the time of the layoff. See, e.g., High Energy Corp., 259 NLRB 747, 761-762 (1981). We acknowledge that the Re- spondent mailed a letter to those laid off indicating that the Respondent would make every effort to return them to work as soon as possible. We do not, however, view this vague representation as sufficient to undermine the evidence noted above establishing that those laid off did not have a rea- sonable expectancy of recall. Tomadur, Inc., 196 NLRB 706 (1972). We thus conclude that the General Counsel has established a prima facie case that the layoff cre- ated Laidlaw vacancies to which the unreinstated strikers were entitled. Accordingly, the Respondent is obliged to show that no Laidlaw vacancy oc- curred or that its failure to recall the strikers was based on legitimate and substantial business justifi- cation. We note that the Respondent has argued only that the Union waived the strikers' rights to reinstatement. In these circumstances, we conclude reinstated strikers absent legitunate and substantial justification. (We of course retain the Fleetwood rule that the initial burden is on the employer to show that the replacements in question were in fact permanent.) Our colleague points out that an employer generally will have superior knowledge of the facts underlying its layoff of replacements We ac- knowledge that this is so, but find it insufficient to warrant allocating the burdens as our colleague would do. In this regard, we note that virtually every respondent in every unfair labor practice case may have superior initial knowledge of the facts underlying its actions which are alleged to be in violation of the Act. This, however, never relieves the General Counsel of her burden of establishing all elements of the violation al- leged. AQUA-CHEM, INC. that the Respondent has not met its burden. 7 Ac- cordingly, we agree with the judge's conclusion that the Respondent has violated Section 8(a)(3) by recalling replacements before um-einstated strikers. ORDER The National Labor Relations Board orders that the Respondent, Aqua-Chem, Inc., Cleaver Brooks Division, Greenville, Mississippi, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to reinstate Henry Holmes and other unreinstated strikers to their former or sub- stantially equivalent positions when jobs were available following their unconditional application to return to work. (b) Threatening to terminate the recall rights of economic strikers if they fail to renew their request for reinstatement. (c) 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) Offer Henry Holmes and any other tuirein- stated strikers who have been denied reinstatement to positions available following their unconditional applications to return to work, immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent posi- tions, without prejudice to their seniority or any other rights or privileges previously enjoyed. (b) Make whole Henry Holmes and any other unreinstated strikers who have been denied rein- statement to available positions following their un- conditional applications to return to work for any loss of earnings and other benefits suffered as a result of the discrimination against them by pay- ment to each of them of a sum of money equal to the amount he/she normally would have earned from the date of the discrimination to the date of Respondent's offer of reinstatement, less net interim earnings, with backpay to be computed in the manner prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Re- tarded. 8 7 As noted, we agree with the judge's conclusion that the Union did not waive the strikers' recall nghts. 8 In accordance with our decision m New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after January 1, 1987, shall be computed 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 accrued prior to January 1, 1987 (the effective dab- of the 1986 amendment to 26 U.S C. § 6621), shall be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977) (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its Greenville, Mississippi facility copies of the attached notice marked "Appendix."9 Copies of the notice, on forms provided by the Re- gional Director for Region 26, 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 to ensure that the notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. MEMBER JOHANSEN, concurring. I agree with my colleagues that the Respondent unlawfully denied recall to unreinstated strikers ahead of laid-off striker replacements in violation of Section 8(a)(3) and that its August 1982 letter to the strikers further violated Section 8(a)(1). I write separately, however, to express my disagreement with a test that places the burden of proving "va- cancies" on the General Counsel where it is shown that the striker replacements have been placed on prolonged and indefinite layoff and the strikers have unconditionally offered to return to work. As the Supreme Court has explained in NLRB v. Fleetwood Trailer Co.,' if an employer refuses to re- instate striking employees after they have uncondi- tionally offered to return to work, the effect is to discourage employees from ex- ercising their rights to organize and to strike guaranteed by [Sections] 7 and 13 of the Act. . . . Accordingly, unless the employer who re- fuses to reinstate strikers can show that his action was due to "legitimate and substantial business justifications," he is guilty of an unfair labor practice. Thus, recognizing the potential for deleterious con- sequences to the exercise of fundamental Section 7 9 If this Order is enforced by a judgment of a United States court of appeals, the words m 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." 389 U.S. 375, 378 (1967), quoting NLRB v Great Dane Trailers, 388 U.S. 26, 34 (1967). 1112 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD rights, the Court and the Board have consistently placed the burden on the employer to show that its replacements are permanent. Both Fleetwood and Laidlaw Corp., 171 NLRB 1366 (1968), hold that a former striker's "right to the job does not depend on its availability at . . . application, and the strik- ers are entitled to reinstatement absent substantial business justification. . . ."2 Further, the Court has specifically rejected the notion that it is the Gener- al Counsel's burden to show "that the jobs of complainants ha[ve] not been absorbed or that they are still avail- able." Such proof is not essential to establish an unfair labor practice. It relates to justifica- tion and the burden of such proof is on the employer.3 In the face of precedent plainly establishing that "[t]he burden of proving justification is on the em- ployer,"4 the majority requires the General Coun- sel to establish as part of her prima facie case that replacements have departed without reasonable ex- pectancy of recall. This requirement is said to be based on an accommodation of the employer's right to assure permanency to its replacements under the Mackay Radio doctrine. 5 First, nothing in Mackay Radio suggests that striker replacements should be extended assurances of permanency supe- rior to those accorded other employees subject to layoff. such as nonstriking employees or reinstated strikers. Second, this allocation of burdens disregards the fundamental evidentiary principle that "the burden of proving a fact is said to be put on the party who presumably has peculiar means of knowledge ena- bling him to prove its falsity if it is false." Wheth- er a striker's job has been filled by a permanent re- placement and whether the layoff of that replace- ment has created a vacancy are, ultimately, ques- tions of fact. The relevant facts are peculiarly within the knowledge of the employer and the re- placement, both of whom are allied in interest against the General Counsel. The strength of their alliance is borne out in a number of Board deci- sions7 and calls into question the inherent reliabil- 2 Laidlaw, 171 NLRB at 1369 (emphasis in original). 3 Fleetwood, supra at 378, fn 4, quoting NLRB v. Great Dane Trailers, supra at 34. 4 Id. at 378 5 NLRB v. Mackay Radio & Telegraph Co., 304 US 333 (1938). 6 Wigmore 9 Evidence § 2486 (Chadbourn rev 1970) 7 See, e g., Ace Drop Cloth Co. 178 NLRB 664 (1969) (employer's claim rejected that a vacancy was temporary where replacement on ma- ternity leave expressed no intentions to return to work), Wisconsin Pack- ing Co., 231 NLRB 546 (1977) (employer's claim rejected that terminated replacements whom it contacted to fill vacancies instead of unremstated strikers were on "leaves of absence") ity of the evidence on which the majority asserts it would rely to establish whether the General Coun- sel's burden has been met—i.e., evidence of what the replacement was told bearing on the reason- ableness of his expectancy of recal1.5 Twenty-five years ago, the Court in NLRB v. Erie Resistor, 9 declined to extend its holding in Mackay Radio to sanction superseniority for striker replacements, deferring there to the "generous in- terpretation" of the right to strike Congress ex- pressed in Section 13 of the Act:i° [A] strike when legitimately employed is an economic weapon which in great measure im- plements and supports the principles of the collective bargaining system.11 Because the reallocation of burdens set forth in the majority opinion will disturb the balance of the economic weaponry established by Congress and preserved in Court and Board opinions defining the rights of strikers and their replacements, I cannot accept their analysis. 3 In contrast, no such motivation affects the reliability of this evidence when it is submitted to support the determination of voting eligibility of laid-off employees in a Board election. See, e.g , Higgins,. Inc., 111 NLRB 797, 799 (1955). 373 US. 221 (1963). 10 Id. at 234 " Id. 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 refuse to reinstate Henry Holmes and other unreinstated strikers to their former or substantially equivalent positions when jobs are available following their unconditional application to return to work. - AQUA-CHEM, INC. 1113 WE WILL NOT threaten to terminate the recall rights of economic strikers if they fail to renew their request for reinstatement. 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 offer Henry Holmes and any other un- reinstated strikers who have been denied reinstate- ment to positions available following their uncondi- tional application to return to work immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent po- sitions without prejudice to their seniority and other rights and privileges, and WE WILL make them whole for any loss of earnings or benefits suf- fered by reason of the discrimination against them less any net interim earnings, plus interest, AQUA-CHEM, INC., CLEAVER BROOKS DIVISION Karen M. Clayborne, Esq., for the General Counsel. James F. Honzik, Esq. (Lindner, Honzik, Marsack, Hayman & Walsh), of Milwaukee, Wisconsin, for the Respondent. Curtis Orman, of West Point, Missouri, for the Charging Party Union. DECISION STATEMENT OF THE CASE PHILIP P. McLEota, Administrative Law Judge. This case was heard before me on November 3 and 4, 1982, in Greenville, Mississippi. It originated from a charge filed on July 23, 1982, and later amended on August 31, 1982, in the above-captioned case against Aqua-Chem, Inc., Cleaver Brooks Division (Respondent), by International Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers & Helpers, AFL-CIO (the Union). On September 9, 1982, a complaint and notice of hear- ing issued alleging that Respondent violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act. In its answer to the complaint, Respondent admitted cer- tain allegations, including the filing and serving of the charge, its status as an employer within the meaning of the Act, the status of the Charging Party as a labor orga- nization within the meaning of the Act, and various facts regarding the history of collective bargaining between Respondent and the Union. Respondent denies having engaged in any conduct that would constitute an unfair labor practice. At the trial all parties were represented and were af- forded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence. Fol- lowing the close of the trial, both Respondent and the General Counsel filed timely briefs, which have been duly considered. On the entire record in this case, and from my obser- vation of the witnesses, I make the following FINDINGS OF FACT I. JURISDICTION The complaint alleges, and Respondent admits, that Aqua-Chem, Inc., Cleaver Brooks Division is a corpora- tion with an office and facility in Greenville, Mississippi, where it is engaged in the manufacture of boilers. In the course and conduct of its business, Respondent annually sells and ships from its Greenville facility products, goods, and materials valued in excess of $50,000 directly to points located outside Mississippi. Respondent also an- nually purchases and receives at its Greenville, Mississip- pi facility products, goods, and materials valued in excess of $50,000 directly from points located outside Mississip- pi. Respondent is, and has been at all times material, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. LABOR ORGANIZATION International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act,. III. THE UNFAIR LABOR PRACTICES A. Allegations and Issues The primary issue in this case relates to Respondent's admitted failure to reinstate economic strikers to work when positions became available at various times follow- ing the conclusion of an economic strike. Respondent argues that its failure to offer available positions to un- reinstated economic strikers did not constitute an unfair labor practice because laid-off permanent replacements were available and because the Union waived the rights of strikers to these positions in its strike settlement agree- ment with Respondent. The complaint also alleges that Respondent violated Section 8(a)(1) of the Act by send- ing a letter to unreinstated strikers advising them that their reinstatement rights would be terminated if they did not respond within 5 days of receiving the letter. Re- spondent argues that it had substantial business justifica- tion for sending the letter to unreinstated strikers and consequently its actions did not violate the Act. The General Counsel also argues that by sending the letter referred to above, Respondent altered the employment status of those employees who did not respond, thereby violating Section 8(a)(3) of the Act and that because Re- spondent sent the letter without first notifying and af- fording the Union an opportunity to negotiate and bar- gain with respect to it, Respondent violated Section 8(a)(5) of the Act. Respondent denies these additional and/or alternative theories advanced by the General Counsel. B. The Facts The facts proffered by the General Counsel in support of its position are relatively simple and are in large part uncontested. Since March 1976, the Union has been the 1114 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD exclusive collective-bargaining representative of Re- spondent's production and maintenance employees at its Greenville, Mississippi facility. Respondent and the Union have been parties to past successive collective-bar- gaining agreements. In January 1980 Respondent and the Union began negotiations for a new agreement to suc- ceed the one which was to, and did, expire on March 5, 1980. When this agreerhent expired, a strike began on March 6, which was participated in by all the approxi- mately 106 unit employees. Although it initially shut down all production, on April 28, 1980, Respondent re- opened its facility and began hiring permanent replace- ments. The strike terminated on August 11, 1980, at which time the parties executed a "strike settlement agree- ment." This "strike settlement agreement" consisted of three parts. The first part contained substantive provi- sions of a new collective-bargaining agreement. The second part contained provisions regarding the recall of strikers to work. The third part dealt with discipline of certain strikers for having engaged in alleged strike mis- conduct. The terms of this agreement are discussed in greater detail below. This strike settlement agreement ex- pressly confirmed that the strike was terminated and that striking employees were considered to have made an un- conditional offer to return to work. At the time this agreement was negotiated on August 11, Respondent was operating with 69 permanent replacements and 25 employees who had abandoned the strike and returned to work. Since the end of the strike on August 11, 1980, Re- spondent has hired no new employees. Over the ensuing months, several of the strike replacements left for various reasons and were replaced by yet-unreinstated strikers. As the August 1980 collective-bargaining agreement was approaching its expiration, the parties, on December 4, 1981, amiably negotiated a new collective-bargaining agreement effective from December 6, 1981, through December 5, 1984. Sections 2 and 3 of the August 11, 1980 strike settlement agreement regarding reinstatement of strikers and discipline of certain employees were not included in that later agreement. In conjunction with that later agreement, however, the parties on December 5, 1981, agreed to continue to abide by those provisions defining recall rights of unreinstated strikers contained in the August 1980 strike settlement agreement. As of March 27, 1982, Respondent had a work force of 88 individuals, 33 of whom were strike replacements. On March 27, Respondent laid off 15 of the 88 employ- ees. Fourteen of those laid off were strike replacements. Employees laid off were told that Respondent's econom- ic picture was bad, that their life insurance and medical insurance would be canceled, and that the layoff was in- definite. In testimony, Respondent confirmed that this was an accurate representation of its economic situation at the time. On May 25, 1982, Respondent laid off an ad- ditional employee for the same reason. On May 26, 1982, Respondent recalled Larry Evans, a strike replacement classified as a machine operator. Three other employees were recalled by Respondent on July 26 and August 2 and 9, 1982. Two of these were strike replacements. On October 4, 1982, Respondent in- definitely laid off yet another employee for lack of work. Respondent stipulated that in making the recalls on May 26, July 26, and August 2 and 9, it did not consider any of the 28 yet-unreinstated strikers for those positions. Respondent further stipulated that the unreinstated strik- er list, containing the names of 28 yet-unreinstated strik- ers, includes individuals who are qualified to perform the jobs of laid off strike replacements who were later re- called. The facts advanced by the General Counsel in support of its other allegations are also uncontested. On August 18, 1982, Respondent sent a letter to all 28 unreinstated strikers. The letter reads in its entirety: You have not been at work at Cleaver Brooks, Greenville since March 6, 1980, when the Union began a strike at that location. The Company and Union have entered into a strike settlernent Agree- ment which grants you reinstatement rights under certain conditions. This is a specific request to you to notify the Company in writing whether you desire to maintain your recall (reinstatement) rights with the Company. You can do so by mailing a letter to the plant or by coming in and signing a memo to that effect. If the Company does not hear from you within five workdays of your receipt of this letter, it will take your name off the unreinstat- ed striker list and your employment rights at the Company will be terminated. Respondent did not consult with or notify the Union before sending this letter. The letter was sent only to un- reinstated strikers. No similar letter was sent to laid-off strike replacements. Twenty of the 28 yet-unreinstated strikers received their copy of this letter. Of those 20 who received the letter, 4 did not contact Respondent as requested. Of the eight who did not receive copies of the letter, one individual apparently heard about the letter through some other source, because that individual con- tacted Respondent. Seven of those eight, however, did not contact Respondent. The relatively simple facts found above constitute the substance of the General Counsel's case. Respondent argues that its failure to offer positions to unreinstated strikers in the May, July, and August 1982 recalls from layoff did not constitute an unfair labor practice because laid-off permanent replacements were available and be- cause the Union waived the rights of strikers to these po- sitions in the August 1980 strike settlement agreement with Respondent. Much of the testimony in this case re- lates to the August 1980 strike settlement agreement and negotiations preceding it regarding Respondent's position that the Union waived rights that strikers may have had to these positions. I find as follows: After the strike had been in progress for 3 months, and Respondent had hired several permanent replacements, Respondent and the Union met on June 5, 1980, in the presence of a mediator in order to -continue negotiations. At this meeting, Respondent's primary spokesman was Thomas J. Toole, vice president of personnel and indus- trial relations. The Union's primary spokesman was AQUA-CHEM, INC. , 1115 Curtis Orman, International representative. At this meet- ing, Toole submitted a written proposal on behalf of Re- spondent which contained three sections. The first con- tained Respondent's prestrike proposals regarding sub- stantive contract provisions. The second contained a pro- cedure for the reinstatement of strikers, and the third contained a proposal regarding discipline for strikers al- leged to have engaged in strike misconduct. The second section, regarding the reinstatement of strikers, reads in its entirety: The parties recognize that the Company has hired permanent replacements. Upon abandonment of the strike employees will be re turned to work as job va- cancies occur. Employees shall be returned to a job position when it becomes vacant. (a) The employees will be returned by their Department Classification Seniority in the Department in which the vacancy occurs provided the employee has the present abili- ty to immediately perform the work available. (b) Prior to hiring new employees when there are no employees with the present ability to immediately perform the work available with Department Classi- fication Seniority in the Department then the most senior employee possessing the present ability to im- mediately perform the work shall be offered the job. (c) If no employee is available under (a) and (b) hereof the employer may hire new employees who are able to immediately perform the work available or prior to hiring new employees who need to be trained return the most senior employee who pos- sesses the same basic requirements necessary for such training as would apply if the Company were hiring new employees. The intent of this provision is to return employees to work while the Company maintains efficient operations. An employee who fails to return to work within five work days of no- tification by certified mail to the last address given to the Company by the employee of available work under this procedure or who refuses to take a job offered under this procedure shall forfeit all future reemployment rights. No part of Respondent's June 5 proposal was accepted by the Union at this meeting. Regarding the reinstate- ment of strikers, Orman informed Took that the Union wanted a guarantee of unconditional reinstatement of all strikers immediately. Respondent, who had already hired a substantial number of permanent replacements, would not agree to this. Toole and John Plant, Respondent's operations manager, assured the Union that the recall provision for strikers contained in Respondent's proposal would enalble strikers to return to work before anyone else was hired. Toole also assured Orman that Respond- ent's proposal meant no new employees would be hired if there were unreinstated strikers with the ability to per- form needed work. Toole testified that at the June 5 meeting there was discussion regarding the words "as vacancies occur" found in Respondent's proposal. Toole testified that he and Plant stated these words meant that Respondent wonld guarantee strikers would be returned to their jobs and regain their seniority before Respondent hired any other employees or moved people within the plant through job posting to a higher or different job classifi- cation. Orman testified that the word "vacancy" was never defined during negotiations and that the term "va- cancy" as used in the strike settlement agreement was never discussed in relation to language used in any sub- stantive contractual provision. I credit Orman. It is clear that the Union's immediate and consistent reaction to Re- spondent's proposal regarding reinstatement of strikers throughout the June 6 meeting was to insist on immedi- ate reinstatement of all strikers. There was simply no reason for the parties to engage in discussion regarding the specific meaning and limitation of the term "as va- cancies occur." It is clear from the testimony, including that of Toole himself, that while Respondent at the June 5 meeting may have made certain assurances that its striker reinstatement proposal would guarantee certain rights to strikers, it did so only in positive terms and not by way of circumscribing or limiting the reinstatement right of strikers. Thus, I find that while Respondent gave such assurances, it did not do so in the context of limit- ing, or even defining, the term "as vacancies occur." As previously indicated, the parties did not reach any agree- ment on any portion of Respondent's proposal at this meeting. After the June 5 meeting, Leonard Beauchamp, an- other International representative, became involved in negotiations. Thereafter, Beauchamp served as the Union's primary spokesman From June 5 until the next negotiation session, held on August 11, 1980, Beauchamp and Toole had several telephone conversations in which they attempted to work out the parameters, and later the details, of a collective-bargaining agreement. Both Toole and Beauchamp testified concerning these telephone con- versations. Although on direct examination Toole at- tempted to testify regarding the substance of these con- versations, he later admitted that he could not testify with regard to any specific conversation without first re- ferring to notes he had taken during the conversation. - Toole testified that he was very careful to take accurate notes during these conversations and that his notes in many cases represented exact quotes of what was said. I have carefully examined the notes, which were intro- duced as exhibits herein. The notes are both lengthy and detailed, and in many instances I consider them to be better evidence of what took place during some of those conversations than the testimony of either Toole or Beauchamp. The notes reflect that telephone conversa- tions took place between Toole and Beauchamp on July 1, 3, 10, 11, 16, 22, 23, 28, and 31 and August 1, 4, and 7. The vast majority of these conversations related solely to substantive contractual matters and have no special relevance to this case. The notes as a whole reflect that the length of the proposed contract was a major issue be- tween the parties. Toole's notes of the conversation that took place on July 1, for example, contains the following statement: Term of agree[ment] is as critical as method of Re- turning [strikers]. 1116 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The notes, however, do also reflect considerable detail regarding the return of strikers to work. The notes of the conversation which took place on July 3 reflect that Toole opened the discussion regarding the return of strikers to work by telling Beauchamp that Respondent was not trying to break the Union, that the Union was trying to break itself, and that if the Union continued to turn down Respondent's June 6 proposal it was forcing Respondent to hire more replacements. The next conver- sation, which took place on July 10, was devoted largely to discussion regarding the return of strikers to work. Toole remarked that Beauchamp and employees both had told him that the primary problem was when em- ployees would return. Toole observed that various people had suggested 10 strikers be returned to work im- mediately. Toole then said that Respondent had consid- ered this as well as its business needs and that it did need "a few more people now." Toole told Beauchamp that Respondent had the option of hiring more replacements or working with the Union in order to return a few strik- ers to work. Toole's notes then contain the following: Proposal: We need a few people. I'm talking five now. As a guarantee. Perhaps more later as business improves—but I will not guarantee that. Five is door opener—It gives you Union repre- sentation. (one of first five is on Comm.) —this is between you and I. —you come to us through mediator with propos- al that if five emp are returned you can deliver a ratified contract—we'll accept. Later notes of that same conversation contain the follow- ing: If you accept now —workers get guaranteed return procedure. —guarantee of five —more will come if business [improves] If you don't accept—you'll force us to hire more replacements. The notes of this conversation reflect no response by Beauchamp to Toole's remarks. Notes of their conversa- tion on July 22, however, reflect that the Union again re- jected Respondent's June 6 proposal, including that por- tion relating to the return of strikers. The notes of that conversation vividly reflect that the Union's primary concern related to,the length of the proposed contract. Respondent was insisting on a contract of no more than 1 year. The Union saw that as an attempt by Respondent to lay the groundwork for ousting the Union at some point in the future. Consequently, the Union demanded a contract of at least 2 years. The following statements contained in Toole's notes clearly reflect the position of the parties at the end of that conversation: Local people won't accept—lust anything." They recognize they may never get back. . . . . We're back to square one. Is company willing to adjust term of agreement. "Then we got to go to war." If you won't change position on term—its war. I'll go down fighting. On the next day, July 23, Toole and Beauchamp had another conversation. The notes of that July 23 meeting suggest that there was a much different tone to the con- versation. Specifically, Respondent made a new offer. Of particular significance was the fact that Respondent pro- posed to extend the term of the contract to 21 months. Regarding the return of strikers, Toole's notes contain the following as the fifth part of its new proposal: Procedure for returning strikers—As outlined in 6-5-80 procedure. Respondent promises "five emp" return within one wk of U ratification of this final move. The final portion of Respondent's July 23 proposal con- tains the following statement: We [Respondent] want from you: (a) pre ratification assurance. (b) Union calls mtg and proposes this deal to company—through FMCS. (c) If proposed to us in this manner you have my assurance of our acceptance. From Toole's notes, it appears that the July 23 conver- sation was devoted exclusively to Toole outlining the new proposal as described above. Notes of the July 28 conversation reflect it was in that conversation Beau- champ responded to Respondent's new proposal. In the July 28 conversation, Beauchamp told Toole there was no way the Union could accept Respondent's proposal "as proposed." Beauchamp told Toole they could work it out, but that there were some problems. The first prob- lem had to do with the fact that Respondent's proposal called for the new contract to expire just before Christ- mas. The second problem had to do with the call-back procedure of strikers. Toole's notes contain the following statements. Call Back Procedure. They have questions—this is equal or substantial employment. i.e.—call back to janitor if they refuse—they'll . . . They think we'll maneuver around it. Lynn wants Strike Settlement agreement to "Say what law says" (abandonment of strike.) It appears from Toole's notes that after Beauchamp ex- plained the problem the Union had with Respondent's proposal, the conversation terminated. The next conversation between Beauchamp and Toole took place on July 31. A large part of that conversation had to do with discipline of strikers alleged to have en- gaged in strike misconduct and the fact that the wage in- crease proposed by Respondent was to be prorated over AQUA-CHEM, INC. 1117 the remainder of calendar year 1980. Regarding the return of strikers to work, the first page of notes of that conversation reflects the following: PROB "People not understanding" RTN TO WORK—No real prob. Using words they're not familiar w/ "present ability to 'mined perform" LB-Quest. of Reassurance. Ability & sen.—we'll have no problem there. RTN TO WORK Procedure is Contrary to Con- tract—layoff Recall Procedure. Most would come back. Toole's notes reflect that he and Beauchamp then dis- cussed the discipline of people alleged to have engaged in strike misconduct and, later, the prospect of prorating the proposed wage increase. In a conversation on August 1, Beauchamp formally replied to Respondent's new proposal. Toole's notes re- flect that Beauchamp's response contained a proposed modification regarding the recall of strikers to work. In this particular instance, however, Toole's notes are un- derstandable only by referring to the testimony of Toole and Beauchamp. As already indicated in some of the notes quoted above, Beauchamp had expressed objection to Respondent's proposal regarding the return of strikers to work because, in Beauchamp's view, it did not allow strikers the same rights they had under the law and the prior contract between the Union and Respondent. Spe- cifically, Beauchamp's complaint was that pursuant to the terms of the contract an employee on layoff, when recalled to work, had the right to refuse a lower grade job and still retain reinstatement and seniority rights. Beauchamp wanted strikers who were recalled to work to have the same right that employees on layoff had under the contract. Toole testified, and his notes reflect, that he responded to Beauchamp by telling Beauchamp that section 5.7 of the collective-bargaining agreement, which defines the rights Beauchamp was referring to, ap- plied only to layoffs and not to the return of strikers. Toole told Beauchamp that the rights of unrecalled strik- ers would be those contained in the language of Re- spondent's June 5 proposal, not the collective-bargaining agreement. Toole's notes regarding the August 1 conversation and later conversations of August 4 and 7, tend to be less de- tailed and more sketchy than his notes of earlier conver- sations. This may well be due to the fact that the parties were getting closer to reaching agreement. I credit Beau- champ that he proposed additional language be added to the strike settlement agreement to protect the strikers' right to refuse a lower grade job and still retain seniority and reinstatement rights, The additional language that Beauchamp proposed, i.e., "within the same job grade," was agreed to and appears in the fmal strike settlement agreement. Beauchamp was also concerned whether strikers would continue to accrue seniority while await- ing recall and what seniority strikers would have once they returned to work, and I credit Beauchamp that he discussed these concerns with Toole. Beauchamp told Toole that the Union wanted strikers to be able to con- finite to accrue seniority while awaiting reinstatement. This was rejected by Respondent. Beauchamp then pro- posed that once strikers returned to work their seniority dates would be that which they held prior to the com- mencement of the strike, thereby assuring in the future that their seniority would include the period of the strike. In order to clarify these rights, Beauchamp pro- posed additional language be added to the recall proce- dure. This language, which is found in the final strike settlement agreement, provides: The seniority of returned strikers shall be that which they held prior to the strike. The seniority of replacements shall be that of their date of hire. The final negotiation session occurred on August 11, 1980, at which time the parties executed a "strike settle- ment agreement." The Union was represented at the meeting by five individuals, including Orman and Beau- champ. Beauchamp continued to act as the Union's pri- mary spokesman at that meeting. Respondent was repre- sented by three individuals, including Toole, who re- mained Respondent's primary spokesman, As Toole had requested in the telephone conversation with Beau- champ, Beauchamp presented the offer which, after minor modifications, became the basis of the strike settle- ment agreement. Respondent insisted that the sentence, "The above wages and benefits are effective as of the signing of this agreement" be deleted, and it was. At the August 11 meeting, there was brief discussion regarding the procedure for recalling strikers. Beauchamp, who I credit, testified he made the statement at that meeting that it was his understanding of the striker recall proce- dure that for all purposes the strikers have seniority which would be greater than that of strike replacements unless some unreinstated strikers on the recall list were not recalled for a considerable length of time, in which case strike replacements might at some point catch up with unreinstated strikers as they were not accruing se- niority until they returned to work.' The final agreement executed on August 11 contains three parts. The first part contains provisions regarding the substance of a col- lective-bargaining agreement that was to remain in effect for 20 months. The second contains provisions regarding Beauchamp does not claim and there is no evidence to indicate that Respondent confirmed Beauchamp's understanding to be correct. I do not take Beauchamp's testimony to reflect a joint understanding about the meaning of the recall procedure. do, however, consider it as evidencing the Union's understanding of that procedure and take that into account in determining whether the Union waived any statutory rights of employ- ees. In crediting Beauchamp that he made the statement described above at the August 11 meeting, I note Toole testified that there was a discus- sion at some time to the effect that unreinstated strikers did not have se- niority in the bargaining umt until they were reinstated, at which time they would assume all of their past seniority. I do not credit Toole that specific statement was ever made by either him or Beauchamp. Rather, I conclude that the only statement made by either Toole or Beauchamp similar to that reported by Toole was during their telephone conversation in relation to whether unreinstated strikers would continue to accrue se- nionty for the period they were off work due to the strike and until such time as they were in fact returned to their jobs. I also note that both Beauchamp and Toole agree there was never any discussion concerning the rights of unreinstated strikers in the event of a layoff of strike re- placements. 1118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the reinstatement of strikers. This section of the agree- ment is identical to Respondent's June 5 proposal except for the deletion of two words and the insertion of addi- tions requested by Beauchamp in his telephone conversa- tions with Toole described above. Section three of the final agreement is identical to the third section of Re- spondent's June 5 proposal regarding discipline of em- ployees alleged to have engaged in strike misconduct. The August 11 agreement expressly confirmed that the strike was terminated and that striking employees were considered to have made an unconditional offer to return to work. Analysis and Conclusions The General Counsel argues that once it is established economic strikers have made unconditional offers to return to work, certain rights automatically accrue to them pursuant to the Board's well recognized and long accepted decision in Laidlaw Corp., 171 NLRB 1366 (1968), enfd. 414 F.2d 99 (7th Cir. 1969), cert. denied 397 U.S. 920 (1970). The General Counsel argues that one such Laidlaw guarantee is that an employer cannot dis- criminate against strikers with respect to seniority in lay- offs solely on the basis of protected strike activity. Trans- port Co. of Texas, 177 NLRB 180 (1969); Wisconsin Pack- ing Co., 231 NLRB 546 1977. She argues that a recall procedure favoring laid-off strike replacements who have less seniority than unreinstated strikers without business justification amounts to an unlawful grant of supersenior- ity to the replacements. Giddings & Lewis, 255 NLRB 93 (1981), enf. denied 675 F.2d 926 (7th Cir. 1982). The General Counsel argues that the Board's decision in Gid- dings & Lewis is determinative of the issue in this case. Respondent's argument is more difficult to state simply. It is perhaps done best by quoting a portion of Respondent's brief in which it sets forth five enumerated arguments of law in capsulized version. The argument runs as follows: (1) "The Respondent could not hire new employees before reinstating strikers," citing Laidlaw Corp., supra, (2) "Where there is good faith bargaining, employee reinstatement rights can be waived," citing United Air Craft Corp., 192 NLRB 382 (1971), (3) "Un- reinstated economic strikers are not laid off employees," citing Bancroft Cap Co„ 245 NLRB 547 (1979), (4) "A layoff does not create a vacancy," citing Bancroft Cap Co., supra, (5) "The determination as to when a vacancy occurs 'must be viewed in the context of the practice and past considerations," citing Bancroft Cap Co., supra. Respondent argues that during the 1980 negotiations with the Union, it succeeded m obtaining an agreement from the Union pursuant to which striking employees would be returned to work "prior to hiring new employ- ees . . . as job vacancies occur." Respondent argues that it "has the right to enjoy the benefit it had negotiated which involved a waiver on the part of the Union." A review of the cases in this area leads me to conclude that the General Counsel has the better argument. The starting point from which to analyze any case in this area must be the Board's decision in Laidlaw, supra at 1370 in which the Board held: Economic strikers who unconditionally apply for reinstatement at a time when their positions are filled by permanent replacements: (1) remain em- ployees; and (2) are entitled to full reinstatement upon the departure of replacements. . . . [Emphasis added.] Relying on United Air Craft Corp., supra at 385, Re- spondent argues that it has "the right to enjoy the benefit it had negotiated which involved a waiver on the part of the Union." I read the Board's decision in United Air Craft Corp. as being more limited. The Board therein stated: The Board is charged with the exclusive respon- sibility of vindicating the public policy as defined by Section 1 of the Act. It follows that the Board is not bound by any private adjustment of rights guar- anteed by the Act. But it does not also follow that because the Board is not required to place its impri- matur upon private adjustments of statutory rights, it may not in the exercise of its discretion accept a particular private adjustment as conforming to the policy of the Act and therefore deserving of ap- proval by the Board. The Board then specifically considered the question "Whether to modify Respondent's obligation as defmed in the recall agreement in view of Laidlaw." After doing so, it then concluded, "In these circumstances, we be- lieve that it will best effectuate the policies of the Act to adopt the agreement of the parties as determining the re- instatement rights of the economic strikers." Thus, the Board's decision in United Air Craft Corp. leaves to the Board whether to recognize a waiver of statutory rights which may be contained in a strike settlement agreement. The Board is not required to do so. I fmd it unnecessary, however, to consider whether the Board should recog- nize the agreement of the parties in this case if it were found to be a waiver of statutory rights. I am convinced that the record fails to establish that such a waiver oc- curred, but rather establishes the contrary. Respondent's argument that a waiver of statutory rights occurred in this case is flawed in several respects. A great portion of Respondent's brief is devoted to the proposition that the term "vacancy" used in the recall procedure is defined by reference to the substantative collective-bargaining agreement and has the same defini- tion as the term "job opening" therein. I fmd no support for this argument. Rather, Respondent's argument con- tains a substantial internal inconsistency. Respondent argues that the "strike settlement agreement" was a com- plete, "interrelated" document while at the same time maintaining that the recall procedure itself is not a part of the labor agreement and, therefore, is not subject to the grievance/arbitration provision of the labor agree- ment. The testimony of vice president of personnel and industrial relations Toole most vividly reflects this incon- sistency. Toole testified in part: The lay-off language of the contract pertains to recall of laid off employees. The strike settlement language pertains to the reinstatement of strikers — AQUA-CHEM, INC. 1119 and the two are separate and are governed by each situation. [Emphasis added.] While not expressly stated as such, part of Respondent's argument is that a collective-bargaining agreement which gives laid-off employees rights superior to all other em- ployees constitutes a waiver of strikers' rights and gives laid-off striker replacements rights superior to replaced strikers. Thus, Respondent argues that pursuant to the collective-bargaining agreement, "Laid off employees do have an absolute right. . . of recall during the period of seniority retention." The argument continues: Laid off employees were entitled to recall in the re- verse order of their layoff. They remain employees, under the contract, until they lose seniority. There can be no vacancy under the contract as long as there is an employee holding a right to a job. This specific contract language is not applicable to un- reinstated strikers because they are not laid off em- ployees, Respondent's logic at this juncture is flawed in two major respects. First, its substantial reliance on Bancroft Cap Co., supra, for three of its five major arguments quoted above is entirely misplaced. These three argu- ments are drawn entirely from the administrative law judge's decision in that case. Perhaps intentionally, Re- spondent's reference to this case completely ignores the Board's decision, particularly that part in which the Board states,, "We qualify [the judge's] analysis regarding layoffs and vacancies . . . ." In that same portion of the Board's decision, the Board goes on to state: We rely particularly on the fact that the layoffs in- volved here were for periods of only 2 to 7 days and were due to shortages of materials. Thus, on the facts of this case, we agree with the Administra- tive Law Judge's conclusion that there were no va- cancies which respondent was obligated to offer to unreinstated strikers. The Board's decision in that case stands for one very specific and very narrow point. Namely, that a layoff of very short duration due to a shortage of materials does not create vacancies which an employer is then obligated to offer to unreinstated strikers. To state it differently, such layoffs do not result in "the departure of replace- ments" as that term is used in the Board's Laidlaw deci- sion. Respondent's citation to Bancroft Cap Co. for any other point is erroneous., The second major flaw in Respondent's logic at this juncture is its failure to acknowledge requirements which both the Board and the courts have long held necessary for a waiver of statutory rights. It is not enough that there be some contractual provision which is arguably contrary to or inconsistent with statutory rights in order for there to be a waiver of such rights. Rather, the Board and Federal courts alike have consistently re- quired that for an effective waiver of statutory rights to be found, there must be a "clear and unmistakable" intent expressed either in the language of the collective- bargaining agreement itself or at the bargaining table before the agreement is consummated. See American Cy- anamid Co., 185 NLRB 981 (1970); Wisconsin Aluminum Foundry Co., 173 NLRB 1160 (1968), enfd. 440 F.2d 393 (7th Cir. 1971); Weltronic Co, 173 NLRB 235 (1968); Fed- eral Compress & Warehouse Co., 166 NLRB 664 (1967), enfd. in relevant part 398 F.2d 631 (6th Cir. 1968); Timken Roller Bearing Co., 138 NLRB 15 (1962), enfd. 325 F.2d 746 (6th Cir. 1963); Perkins Machine Co., 141 NLRB 98 (1963); Jacobs Mfg. Co., 94 NLRB 1214 (1951). The same test is applied where an employer claims that a union has waived the statutory rights of employees to re- instatement on the termination of an economic strike. See George Banta Co., 256 NLRB 1197 (1981), enfd. 686 F.2d 10 (D.C. Cir. 1982). My review of the negotiating ses- sions between the parties and the numerous telephone conversations between Toole and Beauchamp reveals no credible evidence on which to base a conclusion that the parties understood, discussed, or even assumed that the strike settlement agreement would exclude unreinstated strikers from reinstatement in the event of a layoff of re- placements. Certainly it was agreed that no new employ- ees would be hired if there were unreinstated strikers with the ability to do the work. This is unequivocally and expressly what the strike settlement provides. I find no waiver or limitation of statutory rights of recall, and certainly none that might be considered either clear or unmistakable. It is undisputed that there was no discus- sion concerning the recall rights of reinstated strikers in the event of a layoff of replacements. At the time of the 1980 negotiations, it had been 6 or 7 years since Re- spondent experienced a layoff, and the only classifica- tions considered during those negotiations were returned strikers, replacements, and unreinstated strikers. It was Respondent who throughout negotiations insisted con- sistently and steadfastly that the collective-bargaining agreement and the provisions of the strike settlement 'agreement dealing with the reinstatement of strikers were separate and unrelated. I reject Respondent's argument that the recall rights of strikers, and the definitions of terms in the recall procedure, are now to be determined by reference to the collective-bargaining agreement. The record here reflects that there was no specific discussion between the parties during the 1980 negotiations regard- ing a layoff of replacements and the rights of unreinstat- ed strikers. Thus, it is impossible to conclude that the parties reached a "clear and unmistakable" agreement re- garding the rights of unreinstated strikers and laid-off re- placements. It is unknown whether the parties' failure to discuss this issue was due to oversight or, as is more likely, a failure to recognize its eventual importance. What is clear is that the parties did not negotiate a clear and unmistakable waiver of statutory rights. Statutory rights take precedence over contractual ambiguity. Am- biguous use of the term "vacancy" in the strike settle- ment agreement must therefore be controlled by the stat- utory definition of rights pursuant to the Board's deci- sion in Laidlaw Corp. and cases that have followed it. In fact, in spite of all the convoluted arguments propounded by Respondent, the only real issue is whether the pro- longed, indefinite layoff of strike replacements consti- tutes their "departure" under Laidlaw. My holding is a 1120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD narrow one. I find that the prolonged, indefinite layoff of strike replacements does constitute such a departure, and that when more work becomes available for which addi- tional employees are needed, a vacancy is created to which yet unreinstated strikers are entitled over less senior strike replacements.2 Based on all the above, I find that when the strike re- placements were laid off under the circumstances present in this case, it constituted their "departure" as that term is used in Laidlaw Corp., and a sufficient interruption of the employment relationship resulted such that unrein- stated strikers were entitled to be given preferential con- sideration for future vacancies that might arise. The Union neither waived this statutory right in the strike settlement agreement nor during negotiations. Accord- ingly, I find that Respondent maintained and applied an unlawful recall procedure that had the effect of accord- ing superseniority to strike replacements over unreinstat- ed strikers, and Respondent has thereby violated Section 8(a)(1) and (3) of the Act. Regarding Respondent's August 18, 1982 letter to un- reinstated strikers, Manufacturing Manager Neil Bone testified that it was precipitated by a problem that Re- spondent had in contacting one of the unreinstated strik- ers when Respondent was in a position to offer her avail- able work. Bone testified that on July 29, 1982, Respond- ent wrote to Rosemary Taylor telling her that Respond- ent wanted her to return to work on August 2. Taylor apparently did not reply to the letter, and at the end of 5 days, Respondent then recalled another employee, Yvonne Threadgill. Respondent allowed Threadgill 5 days in which to return to work. As a result of those delays, Respondent lost approximately 10 workdays during which it might otherwise have gotten production from an employee. According to Bone, two active em- ployees had to be assigned the work during the period of the delay, thereby causing Respondent to lose produc- tion in the area where those two other employees nor- mally work. As a result of this experience, Respondent drafted and mailed the August 18 letter to all the yet un- reinstated strikers. Respondent's reason for mailing the August 18 letter to unreinstated strikers is neither logical nor consistent. As Respondent concedes, the August 18 letter was mailed only to the unreinstated strikers. Rosemary Taylor, however, was not an unreinstated striker. Taylor was a striker, but she had previously been reinstated. Thereafter, she was laid off. Respondent's attempt to recall Taylor was not an attempt to recall an unreinstat- Respondent spends some portion of its brief arglig that the Board erred in Giddings & Lewis, supra, and that the Seventh Circuit correctly overturned the Board's decision. This argument is, of course, misplaced for as an administrative law judge, I am required to follow Board cases where they are inconsistent with those of various circuit courts. I note too that the facts in Giddings & Lewis tend to distinguish it from the in- stant case Giddings did not deal with an actual layoff of permanent strike replacements but rather with policies which the employer adopted and published to deal with the possibihty of Ilayoffs at some point in the future. Neither the Board nor the circuit court dealt with the question of whether the length and character of layoffs affect whether there is a de- parture of replacements pursuant to Laidlaw In view of my limited find- ings in this case, I see no conflict necessarily arising between it and the circuit court's decision in Giddings & Lewis. ed striker but rather an employee on layoff pursuant to the collective-bargaining agreement. Respondent's failure to have the correct mailing address of Taylor was not due to the fact that unreinstated strikers had not kept in contact with Respondent. It was due to the fact that Re- spondent had not kept current mailing addresses of active employees. Why then did Respondent mail the August 18 letter only to unreinstated strikers and not to laid-off employees, reinstated strikers, and permanent re- placements alike? Respondent's answer to this question does not ring true. Its asserted answer is that a problem such as that caused by a short-term layoff (i.e., Rosemary Taylor) is magnified when 2-1/2 years have elapsed since the last employee-employer contact, as was the case with at least certain of the unreinstated strikers. Respondent also answers the questions posed above in part by noting that while employees laid off in 1982 were not sent copies of the August 18 letter, they were sent a letter in which they were asked: Please make sure that your current address on file is your correct address as your last paycheck and any recall correspondence will be mailed to the address on file. Both of Respondent's partial answers to the question posed above fail to answer or even address why Re- spondent took it upon itself to treat the two groups dis- parately. To the laid-off employees, Respondent simply asked that they maintain their current address on file. To the unreinstated strikers, Respondent took it upon itself to threaten them that if they failed to respond within 5 workdays, Respondent "will take your name off the un- reinstated striker list and your employment rights . . . will be terminated." Respondent's disparate treatment belies its asserted business justification for sending the August 18 letter to unreinstated strikers. Charleston Nurs- ing Center, 257 NLRB 554 (1981), could not be more on point. In that case, the Board holds: [Vie conclude that, although an employer may le- gally request replaced economic strikers to furnish current information about their interests and rein- statement, an employer may not require replaced economic strikers to respond to such a request or risk losing their reinstatement rights. In its brief, Respondent both quotes out of context from and misconstrues the Board's decision in Charleston Nursing Center. The Board's holding in that case, howev- er, is so clear that further discussion regarding Respond- ent's argument on this point is unnecessary. I find that Respondent's letter of August 18 constitutes an express threat to terminate the employment rights of unreinstated strikers for failing to respond to its letter and thereby violates Section 8(a)(1) of the Act.3 3 In view of the above, I find it unnecessary to decide whether Re- spondent's sending the August 18 letter had the effect of changing the employment status of unreinstated strikers who did not respond to the letter in violation of Sec. 8(aX3) or whether by sending this letter with- out having afforded the Union an opportunity to negotiate and bargain with respect to it, Respondent thereby violated Sec. 8(a)(5) of the Act. Continued AQUA-CHEM, INC. 1121 CONCLUSIONS OF LAW 1. Respondent Aqua-Chem, Inc., Cleaver Brooks Divi- sion, is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2.. International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL- CIO is a labor organization within the meaning of Sec- tion 2(5) of the Act. 3. By promulgating, maintaining, and enforcing a policy and practice which discriminates against unrein- stated strikers in the filling of postlayoff vacancies, Re- spondent has interfered with, restrained, and coerced Henry Holmes and its other employees who are unrein- stated strikers in the exercise of their rights guaranteed Manufacturing Manager Bone testified that if a vacancy occurred in the future, he did not know what would be done as far as Respondent making any effort to contact unreinstated strikers who did not respond to Respondent's August 18 letter. The General Counsel's theory of a dis- criminatory change in job status is based solely on Bone's lack of knowl- edge about how such individuals would be treated as compared to other employees. Since Respondent's threat to template reinstatement rights is express and in clear violation of Sec. 8(a)(1) of the Act, I find it appropri- ate in my Order to require that Respondent cease and desist from threat- ening such, action or from carrying out the threat. them by Section 7 of the Act, and Respondent has there- by engaged in unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 4. By threatening its employees with termination of their reemployment rights if they did not respond to Re- spondent's letter of August 18, 1982, Respondent has en- gaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(1) of the Act. 5. The unfair labor practices that Respondent has been found to have engaged in, as described above, have a close, intimate, and substantial relationship to trade, traf- fic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce within the mean- ing of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices in violation of Section 8(a)(1) and (3) of the Act, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative actions necessary to effectuate the policies of the Act. [Recommended Order omitted from publication.]