Mckesson Drug Co.

MCKESSON DRUG CO McKesson Drug Company and Warehouse, Process Ing & Distribution Workers' Union , Local 26, International Longshoremen's and Warehouse men's Union Case 21-CA-25100 November 18 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On October 7 1987 Administrative Law Judge George Christensen issued the attached decision The General Counsel filed exceptions and a sup porting brief, and the Respondent filed a brief in response to the General Counsels 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 I and conclusions2 and to adopt the recommended Order ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis missed I The General Counsel has excepted to some of the judge s credibility fmdmgs The Board s established policy is not to overrule an administra live law judge s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products 91 NLRB 544 (1950) enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for re versing the findings i The judge reopened the record and accepted in evidence a memoran dum of Decision and Order issued after the close of the hearing by the United States District Court for the Central District of California in a suit filed by the Union to compel arbitration of the grievance at issue in this case The district court held in its decision that there was no execut ed collective bargaining agreement in operation at the time of the alleged termination on which the grievance was based and that the Union had not established that the Respondent had otherwise created a new collec tive bargaining agreement Accordingly it denied the Union s motion Following issuance of the judge s decision the Respondent filed a request with the Board to supplement the record to include another memoran dum of Decision and Order issued by that court in a related case filed by the individual grievant In the absence of objections we grant the Re spondent s request The district court in the subsequent case found its ear her decision that no collective bargaining agreement existed between the parties to have a preclusive effect as to that issue in the related litigation Because we agree with the judge and the court that no contractual re quirement that the Respondent arbitrate the grievance existed when the grievance arose we find it unnecessary to decide whether the district court s decisions should be given preclusive effect in our determination of this issue Member Cracraft notes that in addition to the General Counsels con ceding the Claeys grievance did not arise under the 1981-1984 contract the complaint does not allege the arbitration provision of the 1981-1984 contract survived the contracts expiration She therefore finds it unnec essary to pass on the issues discussed in Indiana & Michigan Electric Co. 284 NLRB 53 (1987) 747 Jean C Libby for the General Counsel John S Schauer (Seyfarth Shaw Fairweather & Gerald son) of Chicago Illiniois for the Respondent James G Varga of Glendale California for Local 26 DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN Administrative Law Judge On 6 and 7 May 1987 I conducted a hearing at Los An geles California to try issues raised by a complaint issued on 27 January 1987 based on a charge filed on 21 November 1986 and amended on 4 December 1986 by Warehouse Processing & Distribution Workers Union Local 26 International Longshoremen s and Warehouse men s Union (Union) The complaint alleged McKesson Drug Company (MDC) violated Section 8(a)(1) and (5) of the Act by re fusing to arbitrate the termination of employee Larry Claeys MDC conceded the termination and refusal but denied it thereby violated the Act The sole issue is whether MDC violated the Act by refusing the Union demand it arbitrate the Claeys terms nation The General Counsel the Union and MDC appeared by counsel and were afforded full opportunity to adduce evidence examine and cross examine witnesses argue and file briefs The General Counsel and MDC filed briefs Based on my review of the entire record observation of the witnesses perusal of the briefs and research I enter the following FINDINGS OF FACT' I JURISDICTION AND LABOR ORGANIZATION The complaint alleged the answer admitted and I find at all pertinent times MDC was an employer engaged in commerce in a business affecting commerce and the Union was a labor organization within the meaning of the Act II THE ALLEGED UNFAIR LABOR PRACTICES A Unit Representative Status and Recognition The complaint alleged the answer admitted and I find at all pertinent times the following MDC employees con stituted and constitutes an appropriate unit for collective bargaining purposes within the meaning of the Act All warehouse employees engaged in work requir ing physically handling and/or scrutinizing or in the use of detailed knowledge of the specific loca tion of the Company s merchandise in the Compa ny s Anaheim and San Diego warehouses but ex ' While every apparent or nonapparent conflict in the evidence has not been specifically resolved below my findings are based on my examina tion of the entire record my observation of the witnesses demeanor while testifying and my evaluation of the reliability of their testimony therefore any testimony in the record which is inconsistent with my find rags is discredited 291 NLRB No 117 748 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD eluding supervisors management professional con fidential administrative sales trainees sales repre sentatives clerical employees and guards It further alleged that at all pertinent times the Union represented a majority of MDC s employees within the above unit and was recognized by MDC as their exclu sive collective bargaining representative B Bargaining History and the 1984 Negotiations For several years prior to 1984 the Union and MDC through a local association of wholesale druggists nego tiated and executed a succession of contracts covering the rates of pay wages hours and working conditions of MDC employees within the unit described above includ ing a contract executed (after a strike) on 26 February 1982 effective from that date through 28 February 1984 2 Prior to the 28 February 1984 contract expiration MDC withdrew from the employer association and note feed the Union it would in the future negotiate as a sepa rate individual employer The Union subsequently served timely notice on MDC terminating the contract on its expiration date of 28 February 1984 and requesting negotiation of a new contract The contract expiring 28 February 1984 contained inter alia the following provisions ARTICLE II OPERATION OF AGREEMENT Section 3 Contract Changes The Union and Bergen Brunswig Drug Company Ladco Laborato nes Inc LAD Drug Company McKesson Drug Company and Morgan & Sampson Inc and their respective successors and assigns each agree one with the other that this Agreement may be amend ed or supplemented only by a written agreement be tween and executed by the Union and all of such five (5) employers and that no agreement between any one of such employers and the Union shall be enforceable unless the same is made in writing duly executed and with the written approval of the other four (4) employers ARTICLE III UNION RECOGNITION Section 1 Bargaining Unit The collective bar gaining unit consists of all the Company s ware house employees engaged regularly in work requir ing a majority of working time in physically han dling and/or scrutinizing or in the use of a detailed knowledge of the specific location of the Compa ny s merchandise in the Company s warehouses shipping and receiving clerks truck drivers and maintenance men at the existing City of Commerce Santa Fe Springs Covina Rosemead Van Nuys Gardena Anaheim Goleta and San Diego Califor ma warehouses of the Company but excluding all display and/or sample workers chemists salesman office or clerical employees guards professional employees and supervisors Section 3 Recognition The Company recognizes the Union as the exclusive representative of all the employees in the bargaining unit defined in Section 1 above for the purpose of collective bargaining in respect to rates of pay wages hours of employ ment or other conditions of employment ARTICLE VIII UNION SECURITY Section 1 Subcontracting The Company shall not hereafter use subcontractors in situations where sub contracting is not presently being used by one or more of the five (5) employers signatory hereto unless in the Company s judgment such subcontract ing is advisable for more efficient or more economi cal operation Hereafter before entering into a sub contract (other than a renewal subcontract) if such subcontract may cause the immediate layoff of any employee the Company shall first discuss with the shop steward of the facility involved its decision and the effect on the employees who may be laid off as a result of implementing such decision the failure of the Company to so discuss shall be grieva ble Section 5 Termination Upon the termination of this Agreement in accordance with Article XXVI or otherwise each and every term and provision of this Agreement including Article VIII Section 6 (Check off) and Article XXV (Grievances and At bitration) shall cease to have any further force and effect provided however that Article XXV may continue to be utilized (subject to the terms and conditions therein) with reference to any written grievance which was being processed as of the time of such termination 2 The previous contract expired 28 February 1981 and no successor contract was signed until the 26 February 1982 execution of the contract expiring 28 February 1984 ARTICLE XXV GRIEVANCES AND ARBITRATION Section 2 Grievance Steps If an employee or group of employees feel they have a grievance the matter shall be disposed of as follows (b) STEP TWO If the grievance is not settled in the first step within four (4) hours within seven (7) working days thereafter but not later than the time limits specified in Section 6 it maybe presented in writing to the Company MCKESSON DRUG CO Section 6 Time Limits. Any grievance not pre sented to the Company in writing as provided above within seven (7) working days of its occur rence (unless it is so presented within seven (7) working days of the time when by reasonable dili Bence the existence of the basis for the grievance should have been discovered) shall be waived for all purposes Failure to take any of the steps specs fled in this Article within the time limits prescribed (unless waived or extended by written agreement between the Company and the shop committee) shall constitute an irrevocable abandonment of the grievance and arbitration ARTICLE XXVI TERM OF AGREEMENT This Agreement shall be effective on the date of its execution and shall continue in full force and effect to and including February 28 1984 and shall be automatically renewed from year to year thereaf ter unless within the period of December 16th to December 30th (of 1983 or a later year) both dates inclusive either party hereto serves on the other a written notice to terminate the same in which event this Agreement will terminate as of March 1 1984 (or on the later March 1st thereafter immediately following such notice) If no such notice is served within the dates prescribed this Agreement will be automatically renewed for the following year to March 1st and so on from year to year unless ter minated as herein provided APPENDIX A WAGE SCHEDULE Maintenance Man Maintenance Carpenter Truck Driver-1 1/2 ton Truck Driver-Light Shipping Clerk Receiving Clerk Filler Checker Checker Return Goods Checker Stock Clerk-Book Scanner Asst Shipping Clerk Asst Receiving Clerk Fork Lift Operator Truck Operator Acid Worker Order Packer Freight Handler Elevator Operator Full Pack Order Filler Janitor Swamper Order Filler Stock Clerk Shelf 749 Explanation , All of the above classifications and rates are ap plicable to each of the warehouses subject to this Agreement having work coming within any of such classifications MDC and the Union met to negotiate a new contract on 26 January 2 9 23 and 24 February 1984 on the latter date they reached tentative agreements3 on all provisions for a new contract Those agreements inter alia included agreements to include the following provi sions in the new contract 4 ARTICLE 2 OPERATION OF AGREEMENT Section 3 Contract Changes The Union and McKesson Drug Company and their respective successors and assigns each agree one with the other that this Agreement may be amended or supplemented only by a written agree ment between and executed by the Union and McKesson Drug Company and that no Agreement between the employer and the Union shall be en forceable unless the same is made in writing duly executed and approved by both parties Section 5 Termination Upon the termination of this Agreement in ac cordance with Article 26 or otherwise each and every term and provision of this Agreement includ mg Article 8 Section 6 (Check Off) and Article 25 (Grievances and Arbitration) shall cease to have any further force and effect provided however that Article 25 may continue to be utilized (subject to the terms and conditions therein) with reference to any written grievance which was being proc essed as of the time of such termination ARTICLE 3 UNION RECOGNITION Section 1 Bargaining Unit The Collective Bargaining Unit consists of all of the Company s Warehouse employees engaged in work requiring physically handling and/or scruti nizing or in the use of detailed knowledge of the specific location of the Company s merchandise in 3 Tentative in the sense the agreements would not be final and binding on MDC and the Union until ratified by majority vote of MDC employ ees affected thereby approving the agreements and the execution by MDC and the Union of a contract containing written language setting forth the agreements 4 I base this finding on the testimony of Michael Millet MDC Director of Industrial Relations for MDC s Drug and Health Care Group plus supporting documentation 750 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the Company s Anaheim and San Diego Ware houses including but not limited to those classifica tions listed in the Wage Schedule but excluding Su pervisors Management Professional Confidential Administrative Sales Trainees Sales Represents tives Clerical Employees and Guards Section 3 Recognition The Company recognizes the Union as the exclu save representative of all the employees in the bar gaining unit defined in Section 1 above for the pur pose of collective bargaining in respect to rates of pay wages hours of employment or other condi tions of employment ARTICLE 8 UNION SECURITY Section 1 Subcontracting The Company may utilize subcontractors if in the Company s judgment such subcontracting is advisa ble for more efficient or more economical oper ations Before entering into a subcontract (other than a renewal subcontract) if such subcontract may cause the immediate layoff of any employee the Company shall first discuss with the shop stew and of the facility involved its decision and the effect on the employees who may be laid off as a result of implementing such decision the failure of the Company to so discuss shall be gnevable the grievance should have been discovered) shall be waived for all purposes Failure to take any of the steps specified in this Article within the time limits prescribed (unless waived or extended by written agreement between the Company and the shop committee) shall constitute an irrevocable abandon ment of the grievance and arbitration ARTICLE 26 TERMS OF AGREEMENT This Agreement shall be effective on the date of the execution and shall continue in full force and effect to and including February 28 1987 and shall be automatically renewed from year to year thereaf ter unless within the period of December 16th to December 30th (of 1986 or a later year) both dates inclusive either party hereto serves on the other a written notice to terminate the same in which event this Agreement will terminate as of March 1 1987 (or on the later March 1st thereafter immediately following such notice) If no such notice is served within the dates prescribed this Agreement will be automatically renewed for the following year to March 1st and so on from year to year unless ter minated as herein provided APPENDIX A Truck Driver Shipping/Receiving Clerk Filler Checker ARTICLE 25 GRIEVANCES AND ARBITRATION Section 2 Grievance Steps Any assignment of work over which a grievance has arisen shall be carried out until the grievance is settled through the established grievance procedure If an employee or group of employees feel they have a grievance the matter shall be disposed of as follows (b) Step Two If the grievance is not settled in the first step within five (5) working days thereaf ter or seven (7) working days for discipline and dis charge grievances but not later than the time limits specified in Section 6 it may be presented in writ mg to the Distribution Center Manager (or desig nated representative) Section 6 Time Limits Any grievance not presented to the Company in writing as provided above within five (5) working days of its occurrence (unless it is so presented within five (5) working days of the time when by reasonable diligence the existence of the basis for Explanation All of the above classifications and rates are ap phcable to each of the warehouses subject to this Agreement having work coming within any of such classifications MEMORANDUM of AGREEMENT The parties to the Labor Agreement between McKesson Drug Company and I L W U 26 hereby agree that should the Company add employees in the following classifications these classifications would be within the jurisdiction of Local 26 Maintenance Man Maintenance Carpenter Truck Driver-1 1/2 Ton Truck Driver-Light Order Filler Checker Return Goods Checker Stock Clerk-Book Scanner Asst Shipping Clerk Asst Receiving Clerk Fork Lift Operator Truck Operator MCKESSON DRUG CO 751 Acid Worker Order Packer Freight Handler Elevator Operator Full Pack Order Filler Janitor Swamper Stock Clerk-Shelf Order Dispatcher Lab Workers Lab Workers-Light FOR McKESSON DRUG COMPANY FOR I L W U 26 C Postnegotiations Events Following the 24 February 1984 tentative agreements the Union accepted MDC s offer to prepare a written document setting forth the agreed on changes from pro visions contained in the expired contract for Union use in presenting the agreements to MDC s affected employees and MDC s offer to make facilities at its premises avail able for conducting union meetings to explain the agree ments reached in the negotiations and conduct a vote MDC provided the promised document on 1 March 1984 with a cover letter stating Attached is the typed form of the tentative agreement reached during collec tive bargaining and the Company s final offer I trust this fairly represents our agreements Should you seek clarifi cation please do not hesitate to call The Union raised no questions concerning the accura cy of the language setting out the agreements reached during negotiations and the Union utilized its contents in early March 1984 to explain the agreements reached to the affected employees at the union conducted contract ratification meetings A majority of the affected employ ees voted to approve and ratify the agreements at the meetings The Union promptly notified MDC they had a new contract MDC expressed its gratification stated it would send three of the new contracts to the Union for signature and would remit to the Union three of the new contracts signed by MDC on receipt of the union signed new contracts As promised on 12 March 984 MDC sent the Union three copies of the new contracts containing the agree ments the parties reached during negotiations (as set out in the new contract language last stated above) and set out in the document furnished the Union on 1 March 1984 In its cover letter MDC stated Naturally we have proofread it however please review it yourself Should you find an error it is unintentional In late March 1984 in reliance on the union statement in early March they had a contract MDC placed in effect the economic changes the parties agreed to in ne gotiations 5 Almost a month passed without MDC receiving the requested union signed new contracts or any word from the Union On 7 April 1984 MDC sent a letter to the Union offering to pick up the union signed new con tracts On 17 April 1984 the Union responded with a letter requesting the new contracts be modified in a number of respects prior to execution For the most part the Union requested the correction of typographical errors The Union also proposed however 1 To amend section 1 of article 3 (Recognition) and the memorandum of agreement attached to the new con tract to add three job classifications to the latter and to add language recognizing the Union as the exclusive col lective bargaining representative of employees perform ing work in all the classifications listed in the memoran dum including the three additions 2 To carry over unchanged in section 1 of article 8 (Subcontracting) the language of the expired contract 3 To amend section 6 of article 25 (Grievance Time Limits) by providing a 7 working day rather than 5 working day limitation on the filing of disciplinary and discharge grievances 6 Changes 1 and 3 above were neither proposed by nor agreed on by the parties during negotiations 2 above while proposed during negotiations by the Union was resolved by the parties agreement to the inclusion of MDC s modified proposal On 2 May 1984 MDC prepared revised contracts con taining corrections of the typographical errors in the ear her document and sent them to the Union with a cover letter stating the enclosed contracts accurately reflected the agreements reached by the parties during negotia tions including their agreements concerning the Ian gauge of section 1 of article 3 section 1 of article 8 sec tion 6 of article 25 and the attached memorandum of agreement and requested the Union sign the contracts On 31 May 1984 the Union responded with a letter stating it would sign the contracts only if the changes in section 1 of article 8 section 6 of article 25 and the clas sification order filler and rates of pay thereforewere added to the wage schedule (dropping the demand for revision of section 1 of article 3 and the memorandum of agreement) 7 MDC responded on 19 June 1984 with a letter point ing out the inclusion of the order filler classification and wage rates in the wage schedule would mean a re duction in the wages of employees performing that work (they were being classified and paid as filler/checkers) and offered in the interest of securing a final and effec tive contract to include a rate schedule for that classifi cation in the new contract noted in the same interests (and despite the absence of either a proposal or agree ment) MDC would agree to amend section 6 of article 25 to provide a 7 rather than 5 working day limitation for filing discharge and disciplinary grievances but re fused to deviate from the parties agreed upon language for section 1 of article 8 MDC enclosed an amended page for inclusion in the contracts sent to the Union on 2 6 In apparent recognition the language of sec 6 effectively nullified the 7 working day appeal time for discharge and disciplinary grievances es tablished in step two Claiming the parties agreed to its proposed correction of sec I of I Including a substantial general wage increase of 70 cents per hour art 8 and sec 6 of art 25 during negotiations 752 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD May 1984 containing the change the Union sought with respect to section 6 of article 25 and requested the Union execute the contracts forwarded on 2 May 1984 as amended by the enclosed page By 6 August 1984 MDC had not received any re sponse to its 19 June 1984 request so its manager of labor and employee relations Mike Millet who conduct ed the negotiations on behalf of MDC and authored the communications subsequently addressed to the Union telephoned the Union s chief negotiator Union President Luisa Gratz Gratz persisted in her refusal to sign the contracts without the article 8 section 1 language the Union demanded Millet pointed out that was not what the parties agreed that MDC had placed in effect all the economic changes the parties agreed on during negotia tions including a substantial increase in wages and stated MDC was contemplating withdrawal of the wage increases until the contract was signed a Gratz responded if the Company retracted the wage increases there would be a strike The next word MDC received from the Union was a 27 August 1984 letter stating the Union was withdrawing its demand for inclusion of an order filler wage sched ule in the new contracts accepting MDC s agreement to its demand for a 7 rather than 5 day limitation on filing disciplinary and discharge grievances as a postnegotia tions amendment of section 6 article 25 of the new con tract stating we have a dispute over what language should constitute section l article 8 of the new contract and renewing its demand MDC agree to its postnegotia tions demand for the inclusion of the language of the ex pired contract as section 1 article 8 of the new contract On 12 September 1984 MDC responded the language of section 1 article 8 of the new contract was the Ian guage the parties agreed to during the 9 February 1984 negotiations as a matter of principle MDC would not agree to any change and rejected the union postnegotia tions demand for any substitution MDC renewed its re quest the Union sign the contracts sent to it on 2 May 1984 as amended by MDC s postnegotiations demand for a change in section 6 article 25 and advised the Union MDC had decided if the Union persisted in its refusal to sign those contracts MDC would proceed without a signed labor agreement nevertheless abiding by the agreement reached in contract negotiations and ratified by the membership The only subsequent union response was a delivery to MDC of three contracts signed by the Union containing the substantive contract modifications of section 1 of ar ticle 3 and section 1 of article 8 it demanded after the February 1984 negotiations concluded with agreement on all terms for a new contract MDC never signed and returned to the Union the con tracts signed by the Union and sent to MDC nor did the Union ever sign and return to MDC the contracts signed by MDC and sent to the Union 8 Because of the terms of the language of the agreed on art 26 1 e that the negotiated changes in rates of pay wages hours and conditions of the affected employees (from those set out in the expired contract) shall be effective on the date of its (the new contracts) execution (Emphasis added) From late March 1984 (when MDC placed in effect the wage increases and other economic changes agreed to by the parties during the February 1984 negotiations) through June 1986 MDC honored the agreements reached by the parties during the February 1984 negotia tions In the one instance during that period an employee notified the Union she no longer would pay union dues to it the employee resigned prior to the union invocation of MDC assistance to secure her dues payments During the same time period MDC discontinued monthly MDC Union grievance committee meetings provided for in both the expired and tentative new contracts but processed and amicably resolved (in their early stages) five grievances brought by the Union utilizing provi sions of the tentative new contract as a guide to their resolution In July 1986 however when the Union grieved over Larry Claeys separation from employment and demand ed his reinstatement and pay for time lost MDC refused to process the grievance on the ground Claeys chose to voluntarily quit his employment rather than face arrest for alleged theft MDC persisted in that refusal when the Union amended its grievance to alleged MDC construc tively discharged Claeys The Union demanded MDC arbitrate the Claeys gnev ance stating it would seek a court order compelling MDC to arbitrate the grievance if MDC refused to arbi trate Receiving no response the Union filed a petition in United States district court seeking such an order In its petition the Union asserted the contract signed by the Union and sent to MDC was in existence and effect par ticularly the provision requiring MDC to arbitrate griev ances arising under and during the term of that alleged contract MDC filed an answer to the petition denying the exist ence of any contract between MDC and the Union and any agreement to arbitrate The court sustained MDC s position and denied the union petition In early 1987 the parties met negotiated terms for a new contract effective on a subsequent date following employee ratification and execution That new contract was not retroactive D Analysts and Conclusions The General Counsel and the Union contend because the parties on 24 February 1984 reached agreements on provisions for a new contract including an arbitration agreement MDC violated the Act by refusing to comply with the Union s July 1986 demand that MDC arbitrate the Claeys grievance That argument ignores the fact the arbitration agree ment contained in the 1981-1984 MDC Union contract was specifically and generally terminated by language contained in that contracts and the new contract agree ments reached in February 1986 were specifically condi 8 See sec 5 of art II and art XXV of the 1981-1984 contract repro duced supra MCKESSON DRUG CO 753 tioned on their incorporation in a written signed con tract 10 While it is true in February 1984 the parties reached agreements on all terms for a new contract those agree ments were tentative and conditioned on execution of a written contract The parties reached a subsequent im passe over such execution resulting in union possession and refusal to sign MDC signed contracts containing the agreements reached in negotiations (plus MDC accept ance of one of the Union s postnegotiations amendment demands) and MDC possession and refusal to sign union signed contracts containing the agreements reached in negotiations plus two of the Union s postnegotiations amendment demands The Board normally refuses to require an employer to arbitrate grievances arising during a contractual hiatus As the Board has stated The obligation to arbitrate cannot be created or maintained solely by operation of the Act It would be inappropriate to remedy the Re spondent s repudiation of its contractual commit ment to arbitrate by ordering arbitration of the nine hiatus grievances unless that commitment extends under Nolde to those particular grievances 11 We conclude the rights invoked in each grievance do not arise under the expired con tracts within the meaning of Nolde We there fore conclude the Respondent had no contrac tual obligation to arbitrate any of the nine hiatus grievances Accordingly we shall not order the processing of those particular grievances to arbitra tion here 12 In this case there was a contractual hiatus between 28 February 1984 (when the 1981-1984 arbitration agree ment and contract were specifically and generally termi nated) and the spring of 1987 (when MDC and the Union executed a new arbitration agreement and con tract) This appears sufficient basis for dismissal of the General Counsels and the Unions complaint MDC vio lated the Act by refusing to arbitrate the Claeys griev ance for clearly no contract containing any arbitration agreement existed when the Claeys grievance arose The General Counsel and the Union argue MDC nev ertheless should be required to arbitrate the Claeys griev ance on equitable grounds contending by its 12 Septem ber 1984 letter stating it would abide by the agreements reached during the February 1984 negotiations and its subsequent conduct MDC led the Union to believe MDC would arbitrate any grievances that arose during the contractual hiatus 10 See sec 3 of art II of the 1981-1984 contract and sec 3 arts 2 and 26 of the MDC proposed and union proposed 1984-1987 contracts 11 The General Counsel conceded the Claeys grievance did not arise under the 1981 -1984 MDC Union contract and therefore Nolde Bros V Bakery Workers Local 358 430 U S 243 (1977) is inapplicable 12 Indiana & Michigan Electric Co 248 NLRB 53 ( 1987) also see American Gypsum Co 285 NLRB 100 (1987) To similar effect 0 Connor Co Y Carpenters Local 1408 702 F 2d 824 (9th Cir 1983) It is undisputed on pragmatic grounds (to avoid a strike and consequent disruption of its operations) MDC advised the Union on 12 September 1984 it was going to abide by the agreements reached during the February 1984 negotiations and that between February 1984 and July 1986 MDC observed most of the agreements reached in negotiations13 and amicably resolved five grievances by resort to terms of the agreements reached during negotiations It is apparent however MDC did so to avoid the strike the Union threatened if it failed to comply with the economic terms of the agreements and processed the five grievances in compliance with its gen eral legal obligations Neither the 12 September 1984 letter or the conduct just described however support the conclusion MDC led the Union to believe it would arbitrate any griev ances the parties were unable to resolve amicably to the contrary the Union s declaration of its intention to strike in the event MDC failed to comply with the wage agree ment reached in negotations supports the conclusion the Union was aware during the contract hiatus (and follow ing impasse) both parties were free to act unilaterally in certain areas i e during the hiatus MDC could not en force the Union s no strike agreement reached in the 1984 negotiations and the Union could not enforce MDC s agreement to arbitrate employee/union grievances Nor does the fact MDC placed in effect the economic terms agreed upon in February 1984 and processed grievances during the contractual hiatus support such a conclusion since those actions equally support the conclusion MDC took those actions to avoid a work stoppage 14 The cases cited by the General Counsel in support of its equity argument15 are inapplicable In each of those cases the employer deliberately misled the union repre senting its employees by agreeing to be bound by the terms of a contract while avoiding signing the contract undercutting the contracts terms at the same time it was representing to the union it was complying therewith and seeking and accepting union assistance and ceased recognizing the union and discharged its members when the union learned of the deception and sought contract execution and compliance In this case MDC neither en gaged in deceit nor misrepresented its actions and hon ored its economic commitments if there was any decep tion, it lies in the union representation to MDC the par ties had a contract inducing MDC to place in effect the economic changes agreed upon followed by a series of union efforts to secure modifications in the agreements reached as its price for signing a contract containing those agreements The General Counsel and the Union further contend in any event MDC violated Section 8(a)(5) and (1) of the Act by departing from its final offer in negotia tions to arbitrate grievances arising after 1 March 1984 This argument while ingenious has no merit 13 Not including the agreement for monthly meetings of a grievance committee 4 0 Connor Co v Carpenters Local 1408 ibid Cardinal Operating Co 24o NLRB 279 (1979) S & W Motor Lines 236 NLRB 938 (1978) 15 FML Supply 258 NLRB 604 (1981) and Vin James Plastering Co 226 NLRB 125 (1976) 754 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The arbitration agreement was conditioned on and contemplated the arbitration of grievances arising under and alleging violations of a term or terms of a written signed contract MDC and the Union never entered into such a contract so neither the Union s no strike agree ment nor MDC s arbitration agreement ever became viable 16 I therefore conclude MDC did not violate Section 8(a)(5) and (1) of the Act by refusing to arbitrate the Claeys grievance CONCLUSIONS OF LAW 1 At all pertinent times MDC was an employer en gaged in commerce in a business affecting commerce and the Union was a labor organization within the meaning of Section 2 of the Act 2 MDC did not violate the Act by its July 1986 and subsequent refusals to arbitrate the Claeys grievance On these findings of fact and conclusions of law and on the entire record I issue the following recommend ed' 7 ORDER 18 American Gypsum supra Indiana & Michigan Electric Co supra Cardinal Operating Co supra and S & W Motor Lines supra also see Mid American Milling Co 282 NLRB 926 (1987) and General Counsel s Administrative Memorandum Libby Corp Case 17-CA-12472 119 LRRM 1305 (1985) The complaint is dismissed 19 If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended Order shall as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all put poses