Hayward Dodge, Inc.

434 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Hayward Dodge , Inc. and Automobile Salesmen's Union Local 1095, United Food and Commer- cial Workers, AFL-CIO, CLC. Cases 32-CA- 8781 and 32-CA-8941 January 17, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On July 13, 1988, Administrative Law Judge Jer- rold H. Shapiro issued the attached decision. The Charging Party filed an exception and a supporting brief.1 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 brief and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Hayward Dodge, Inc., Hayward, California, its officers, agents, successors, and assigns, shall take the action set forth in the Order. ' The Charging Party has excepted only to the judge's finding that by virtue of the Respondent's February 19, 1987 written notice to the Charging Party of its intention to implement its last and final contract proposal, the Respondent effectively gave the Charging Party substantial- ly more than 72 hours' notice of its intention to terminate the parties' ex- tension of the collective-bargaining agreement that expired January 31, 1987. Daniel F. Altemus, Jr. and Karen Clopton, Esqs., for the General Counsel. David Miller (Hoyt, Hoyt, & Miller), for the Respondent. David A. Rosenfeld (Van Bourg, Weinberg, Roger, & Ro- senfeld), for the Charging Party. DECISION STATEMENT OF THE CASE JERROLD H. SHAPIRO, Administrative Law Judge. I conducted a hearing in this consolidated proceeding in 1988 on February 9 through 12 and February 16 through 17. The hearing was based on unfair labor practice charges filed by Automobile Salesmen's Union Local 1095 (Union),' and on an amended consolidated com- plaint,2 issued on behalf of the General Counsel of the ' The charge was filed in Case 32-CA-8781 on Mar. 17, 1987, in Case 32-CA-8941 on May 20, 1987. 2 The amended consolidated complaint issued January 12, 1988, and was further amended at the hearing. National Labor Relations Board (Board) by the Board's Regional Director for Region 32, which alleged that Hayward Dodge, Inc. (Respondent) was engaging in unfair labor practices within the meaning of Section 8(a)(1), (3), and (5) of the National Labor Relations Act (Act). Respondent , in its answer to the amended consoli- dated complaint , denied the commission of the alleged unfair labor practices.3 The amended consolidated complaint , as amended during the hearing, alleges Respondent violated Section 8(a)(1) of the Act, when in early December 1986 its Sales Manager Basil Lamaestra threatened employees it would be futile for them to support the Union , and when its General Manager Mark Lane engaged in the follow- ing conduct : During the period from December 1986 through January 1987 told employees Respondent in- tended to get rid of the Union ; about December 19, 1986, and February 2, 1987, threatened employees with dis- charge if they supported the Union ; about January 5 and March 11 , 1987, threatened employees with onerous working conditions if they supported the Union; about January 30, 1987, threatened to retaliate against employ- ees if they supported the Union ; about February 2, 1987, prohibited employees from talking with other prounion employees and promised employees benefits if they re- frained from supporting the Union ; and, about February 3, 1987, questioned employees about the union sympa- thies of other employees and solicited and directed em- ployees to report the union sympathies of other employ- ees. The amended consolidated complaint also alleges that "[c]ommencing on or about September 17, 1986, and continuing thereafter until on or about May 1, 1987 Re- spondent `flooded' its sales floor by hiring inexperienced salesperson employees and by increasing the size of its work force from approximately 20 to approximately 30 employees , for the purpose of decreasing individual em- ployees' commissions and in order to cause the termina- tion of employees," and further alleges that Respondent engaged in this conduct because its employees joined or supported the Union and that by engaging in this con- duct Respondent violated Section 8(a)(3) and (1) of the Act. Lastly, the amended consolidated complaint, as amend- ed at the hearing, alleges Respondent has refused to bar- gain within the meaning of Section 8(a)(5) of the Act, as follows: about April 1, 1987, and about September 1, 1987, Respondent unilaterally implemented the terms and conditions of employment set forth in its February 19, 1987 collective-bargaining proposal made to the Union and implemented that proposal at a time when the par- ties' collective-bargaining negotiations had not reached a lawful impasse; since September 1, 1987, and continuing to the date of the hearing in this case , Respondent has unilaterally changed the terms and conditions of employ- ment of its employees represented by the Union and en- 3 In its answer Respondent admits it is an employer engaged in com- merce within the meaning of Sec. 2(6) and (7) of the Act and meets the Board's applicable discretionary jurisdictional standard . Also, in its answer, Respondent admits that the Union is a labor organization within the meaning of Sec. 2(5) of the Act. 292 NLRB No. 55 HAYWARD DODGE gaged in this conduct without affording the Union an op portunity to bargain, and, by its overall acts and con duct, including the above described unilateral conduct and the above described alleged 8(a)(1) and (3) viola tions, Respondent has engaged in bad faith bargaining with the Union On the entire record from my observation of the de meanor of the witnesses, and having considered the posthearing briefs filed by the parties,4 I make the fol lowing FINDINGS OF FACT I THE ALLEGED UNFAIR LABOR PRACTICES A The Setting Respondent, a wholly owned subsidiary of the Tasha corporation, is a California corporation with its place of business in Hayward California, where it is engaged in the sale and service of motor vehicles Respondent is one of approximately 14 motor vehicle dealerships owned and operated by the Tasha corporation Hank Kahaca turian also known as Hank Turian is the owner and president of the Tasha corporation During the time material, the responsibility of operat ing Respondent was delegated by Tunan to Mark Lane who from September 6, 1986, until July 9, 1987, was Re spondent's vice president and its general manager During this period Basil Lamaestra was employed by Lane as Respondents sales manager Respondent s answer to the amended consolidated complaint admits that Lane and Lamaestra were agents of Respondent and supervisors within the meaning of Section 2(11) of the Act Since 1972 the Union has been recognized by Re spondent as the exclusive collective bargaining represent ative of Respondents salespersons Respondent and the Union have entered into a series of collective bargaining agreements covering the salespersons, the most recent of which was effective from February 1, 1984, through Jan uary 31 1987 (the 1984-1986 agreement) On December 23 1986 and on a number of other dates thereafter rep resentatives of the Respondent and the Union met for the purpose of negotiating a collective bargaining agreement to succeed the 1984-1986 agreement but were unable to reach a new agreement B The Alleged 8(a)(1) Violations 1 Lamaestra s comments to Barich The complaint paragraph 6, alleges Respondent vio lated Section 8(a)(1) of the Act on December 3 and 4 1986 when Sales Manager Lamaestra threatened em ployees it would be futile for them to join or support the Union In support of this allegation the General Counsel relies on Warren Barich s testimony Barich was hired by Respondent on December 3 as a salesperson He was 4 On April 19 1988 Respondent submitted a Motion to File Reply Brief and on April 26 1988 counsel for the General Counsel filed an opposition to this motion Respondents motion is denied 435 hired by Lamaestra who worked with him previously at another dealership Barich testified that the day Lamaestra asked him to come to work, Lamaestra informed him that the Union represented the salespersons, but not to worry about the union or being in the union because we don t plan to have it around here Barich further testified that the next day, when he began work for Respondent while in the sales office talking with Lamaestra about his job duties he told Lamaestra that one of the girls men tioned to him he had to join the Union Barich ques tioned Lamaestra about joining the union Barich testi feed Lamaestra responded by telling him not to worry about going to the Union and joining it `because we don't plan on having them here, we re going to blow them out anyway Lamaestra testified he hired Barich He did not testify about the above described remarks Barich attributed to him Nonetheless, I have discredited Barich's testimony because his testimonial demeanor was poor and his credi bility was impugned by his 1982 grand theft misdemean or conviction,5 and was further impugned by the fact that when he filled out his employment application for his job with Respondent, he falsely wrote he had never been convicted of a crime 6 Also, as I have found infra, Barich falsely testified about other matters of significance in this proceeding Lastly, in evaluating Barich s credibil ity it is relevant that he had reason to be hostile toward Respondent because Respondent discharged him and he believed his discharge was unjustified It is for these rea sons that I have discredited Banch s above described tes timony I therefore shall recommend that this allegation be dismissed in its entirety 2 Lane s comments to Cooper The General Counsel contends Respondent violated Section 8(a)(1) of the Act when late in January 1987 job applicant Michael Cooper was told by Respondents gen eral manager, Lane that Respondent was trying to get rid of the Union This contention is not encompassed by S The California Penal Code defines grand theft in substance as the taking of over $400 in money labor or real or personal property 6 Lamaestra credibily testified he did not know about Banch s criminal conviction I reject Barich s testimony that Lamaestra knew about his conviction In any event when Banch falsely wrote on his employment application that he had not been convicted of a crime there is no evi dence that he relied on anything Lamaestra said ' The sole evidence that Lamaestra indicated to employees other than Banch that Respondent intended to get rid of the Union is the testimo ny of salesperson Howard Mundey that in mid March 1987 at a salesper sons meeting Lamaestra told the salespersons he was unhappy about having to take off from work that day to attend a meeting with the Union for contract negotiations but for the salespersons not to worry be cause the union is not going to be here and he did not want the Union to tell him how much he was supposed to pay his employees However when asked on direct and cross examination to repeat his testimony Mundey significantly failed to include the portion of his prior testimony in which he attributed to Lamaestra the words the union is not going to be here I also note Mundey s testimony is inherently implausible be cause it is undisputed that Lamaestra had absolutely nothing whatsoever to do with the contract negotiations between Respondent and Union he was not one of the Respondents negotiators did not attend a single ne gotiation session and was apparently never consulted by management about Respondents bargaining position 436 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the complaint's allegations, but I have considered it be- cause the matter was fully litigated. Late in January 1987 Cooper, in response to a newspa- per advertisement, applied for a job with Respondent as a salesperson. He testified he went to the Respondent's place of business and, after filling out a job application, was interviewed by General Manager Lane. During the interview, when Cooper asked "if this was a union store," Lane, according to Cooper, answered by stating, "it's kind of up in the air. We're trying to get the fucking union out of here right now." Lane testified he did not recall interviewing Cooper for a job and testified that when job applicants came to be interviewed that he did not conduct the interviews, which were conducted by one of Respondent's sales managers . Lane further testified he never made the above-described remarks attributed to him by Cooper. I credit Lane's testimony because: (1) Lane's testimoni- al demeanor, which was good, was better than Coo- per's;" (2) Lane was no longer employed by Respondent when he testified, having been discharged several months prior to the hearing, and as a result of the discharge, which angered him, appeared to be a disinterested wit- ness with no bias in favor of Respondent;9 and (3) Lane's testimony that job applicants, such as Cooper, were interviewed by one of Respondent's sales managers and not by him, was corroborated by Sales Manager Lamaes- tra's testimony. It is for these reasons that I credited Lane's above-described testimony. I therefore find the General Counsel's contention that Lane told Cooper Re- spondent was trying to get rid of the Union is not sup- ported by credible evidence. 3. Lane's comments to Parry, Frye, Mundey, and Barich The amended consolidated complaint alleges that through General Manager Lane Respondent violated Section 8(a)(1) of the Act by engaging in the following conduct: During the period from December 1986 through February 1987 threatened employees Respond- ent would get rid of the Union (complaint par. 7(a)); about February 2, 1987, threatened to discharge employ- ees if they joined or supported the Union (complaint par. 7(b)); and, about February 2, 1987, prohibited employees from talking with other employees because of their union activities, and promised employees benefits if they re- frained from engaging in union activities (complaint par. 7(f)). In support of these allegations the General Counsel relies on the testimony of Warren Barich, Edward Frye, and Howard Mundey. Mundey, an inexperienced automobile salesperson, was hired by Respondent on February 2, 1987, as a salesper- son. He testified that on February 2, with two other in- experienced salespersons-Brian Parry and Ed Frye- 8 Lane generally impressed me as a sincere witness who , despite the passage of time which had obviously dulled his memory about certain matters, was conscientiously attempting to recall the events he was ques- tioned about. 8 I note that at one point during the hearing , Lane, with obvious sin- cerity, testified, " I had done no preparation prior to coming to this trial. I really don't care one way or another and did not care about [Respond- ent]. I really have no true feelings." who were also hired the same day, he met with General Manager Lane in the presence of Sales Manager Lamaes- tra and Crew Chief Barich, at which time Lane intro- duced everyone and welcomed Frye, Mundey, and Parry to Respondent's employ. Mundey's testimony about what was stated by Lane during this meeting, follows. Lane, immediately after introducing everyone and wel- coming Frye, Mundey, and Parry, told them Respondent was in the middle of union negotiations but for Frye, Mundey, and Parry not to worry about the negotiations because the Union "probably would not be here, he was going to blow [the Union] out." Lane then stated that Frye, Mundey, and Parry were the "new wave" of sales- men because they were going to have the unique oppor- tunity to be trained by Chrysler at a Chrysler training school, and told them that if they followed his instruc- tion they would have a job for life, but if they did not follow his instructions he would "blow [them] out, he would burst [their] bubbles." Lane, according to Mundey, also told them their salary would be $1500 a month plus commissions and told them not to worry about the older salesmen, whom he referred to as the "old timers," because he stated "he was going to blow them out" and instructed Frye and Parry not to associate with the "old timers" because the "old timers" would give them bad sales advice and explained that he had certain standards he wanted his salespersons to follow and the older salespersons did not follow his standards. More specifically, Lane explained he wanted his salesper- sons to be "go getters" and to go out and meet custom- ers, whereas, the older salespersons in Respondent's employ just sat back and waited for customers to come to them. Lane stated he wanted to train Frye, Mundey, and Parry to sell cars his way, which was a more aggres- sive way than the older salespersons were using. Mundey further testified that after the above-described February 2 orientation meeting that he, Parry, and Frye attended a Chrysler training school for 2 days and when they returned to Respondent's premises later that week to work, that Lane again met with them10 and told them "if you guys are ready to sell cars over the weekend that he would guarantee [them] the $1500" and also told them "not to talk to the other salesmen and just to hang out in our tight little group."11 Frye, an inexperienced automobile salesperson, who, like Mundey, was hired on February 2, 1987, testified he attended the February 2 orientation meeting in Lane's office with Mundey, Parry, and Barich, and further testi- fied that later during the week, after having attended training school, he was present at another meeting in Lane's office with Mundey, Parry, and Barich. He was 10 According to Mundey neither Lamaestra nor Barich was present at this meeting. 11 Mundey testified it was never indicated to him that the monthly draw advanced to him against his commissions would be less than $1500. This testimony is false because prior to his February 2 meeting with Lane he was given a document by Respondent to read and sign, entitled "com- pensation plan," which he in fact signed and which stated, among other things, that his monthly compensation would be $1000 as called for by the Respondent's contract with the Union , the 1984- 1986 agreement. It is undisputed that Mundey, as well as Frye and Parry, were in fact paid $ 1000 a month as called for by the 1984- 1986 agreement. HAYWARD DODGE unable to recall whether Lamaestra was present at either of these meetings and was unable to differentiate be tween the two meetings with respect to what Lane stated Frye s testimony concerning these meetings fol lows Lane told Frye Mundey, and Parry that the reason they had been hired was because Lane wanted to get rid of some of the deadwood in the dealership He told them they would learn to sell cars and work with Barich who would be their crew chief Lane also in structed them to deal only with Barich and not to associ ate with the other salespersons he stated they should be cordial to the other salespersons but not to get buddy, buddy" with them Lane also stated that when Frye, Mundey, and Parry returned from training school, if they were ready to sell cars by that weekend he would guarantee them $1500 a month but if they needed more time he would guarantee them $1000 a month and ex plained that the faster they qualified as salespersons the more money they would earn He told them they were to do things his way, that he wanted them to be aggres sive salespersons and stated that the other salespersons in Respondents employ, whom he had previously referred to as deadwood, were not aggressive and as a result were not selling cars Lane assured Frye, Mundey and Parry that if they did things his way, they would have a job for life Frye also testified that at one point during one of these two meetings, either himself, Mundey or Parry asked Lane a question about the Union He testified he did not remember the question or which of them asked it but testified that Lane answered, don t worry about joining the Union because he intended to blow the Union out of there This was Lanes only reference to the Union at either meeting Barich, who began work for Respondent on December 3 1986 and was employed as a salesperson and then as a crew chief in charge of a crew of salespersons 12 testi feed that at the February 2 orientation meeting, at which Sales Manager Lamaestra was present only briefly that Lane made the following statements to newly hired salespersons Frye Mundey and Parry Lane explained to them he was the great motivator and would guaran tee them $1500 a month" 3 and stated he did not want them talking to any of the union people out there and warned them that if talked to the union people he would burst Frye s, Mundey s and Parry s bubble and they d be out and told Frye, Mundey and Parry that we were going to blow the union out and also told them they might be going to school Barich also testified that immediately after the above described February 2 orientation meeting that Lane, in Lamaestra s presence explained to Barich that Lane s 12 There is no contention that Banch as a crew chief was a supervisor within the meaning of Sec 2(11) of the Act 13 Banch testified that during this time period the monthly guarantee for all salespersons was $1500 This testimony was incorrect because the undisputed evidence is that during this period Respondent pursuant to the terms of its 1984-1986 agreement with the Union paid $1500 a month only to those salespersons in its employ for more than 90 days and paid its new hires $1000 It is undisputed that Frye Mundey and Parry were paid $ 1000 a month 437 reason for not wanting Frye, Mundey or Parry talking with the union workers was Lane did not want them [referring to Frye Mundey, and Parry] joining the union and he did not want the other guys knowing about it [re ferring to the fact that Frye Mundey and Parry had not joined the union] Barich further testified that after Frye Mundey and Parry had attended training school that Lane later that week, in Barich s presence met with them briefly before they went to work and told them they would be work ing on Barich s crew and to keep away from the union people Lastly, Barich testified that sometime between his date of hire on December 3, 1986 and the middle of Decem ber 1986, that Lane, in Lamaestra s presence told Barich they were going to blow the fucking union out Respondent s general manager , Lane who assumed that position on September 6 1986, testified he met with Frye Mundey and Parry a few days after their hire and after they had attended the Chrysler training school and that neither Lamaestra nor Barich were present during this meeting, which lasted approximately 10 minutes Lane s description of what took place at this meeting follows Lane welcomed Frye, Mundey, and Parry and wished them luck and told them they should not hesitate to speak to the sales manager if they had questions and ex plained Respondents remuneration plan In this last regard he explained to them among other things they would be paid $1000 a month as a draw against their commissions and after they had been employed for awhile this would be increased to $1500 which was the maximum draw He told them they were professional and as professionals they were responsible for waiting on customers in a professional manner and advised them to steer away from those salespersons who did not have a good attitude or a good perspective about selling cars but to associate with those salespersons who they thought could help them In order to determine which salespersons were the top producers Lane advised them to look at the number of cars sold by Respondents sev era! salespersons which figures were posted periodically on Respondent s sales board and to talk to the salesper sons with high productivity and learn the reason for their success Lane also instructed them not to congre gate in groups because customers did not like to see groups of salespersons congregating in an area and told them they should circulate around the dealership and that once a customer came onto the premises to be sure to bring the customer into the area of the sales floor where the sales offices were located Lane stated that once they became skilled automobile salespersons there would be a future for them for life in selling cars in any part of the country or in any city Lane denied telling them they might have a job for life with Respondent or words to that effect Lane testified that neither at this meeting nor at any other time did he tell Frye, Mundey, or Parry or any of the other salespersons that he was going to blow the union out or say words to that effect Rather Lane testi feed he did not speak to employees about the Union be 438 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cause Marcia Hoyt, Respondents lawyer, instructed him not to say anything to the salespersons about the Union and not to talk about the Union with the employees and further instructed him that if employees asked him a question concerning the Union that he should refer them to their union representative Lane testified he followed Hoyt s instructions Respondent s sales manager Lamaestra, testified he never attended a meeting that Lane had with Frye, Mundey, and Parry but that the only employee meetings he attended were the usual sales meetings, which in volved all the salespersons He further testified he never heard Lane tell Frye Mundey, or Parry they would be paid $1500 a month as a draw against their commission or tell them or any of the other salespersons that the Union would be blown out or tell employees not to associate with older salespersons For the reasons set forth immediately below, I reject the above described testimony of Frye, Mundey, and Barich insofar as it relates to the complaints unfair labor practice allegations The testimonial demeanor of Lane and Lamaestra, which was good, was better than the testimonial demean or of Frye, Mundey, or Barich Lane, as I have discussed supra, having been abruptly discharged by Respondent and having been angered by his discharge was a disinterested rather than a witness biased in favor of Respondent Lane s testimony that he did not engage in any of the alleged illegal conduct attributed to him was corroborat ed in substantial part by the testimony of Sales Manager Lamaestra, whose testimonial demeanor was good As I have discussed in detail supra the credibility of Barich whose testimonial demeanor was poor was fur ther impugned by his grand theft conviction and the fact that he lied about that conviction when he applied for work with Respondent Barich Frye and Mundey were not truly disinterested witnesses They were discharged by Respondent and subsequent to their discharges when they submitted affi davits to the Board during the investigatory stage of this case had reason to believe that if the Board determined the Union s unfair labor practice charge was meritorious, that they would be named as discriminatees 14 Barich s testimony that Lane told him the reason he did not want Frye, Mundey or Parry to talk with the union workers was that Lane did not want them to join the Union and did not want the union workers to know that they had not joined the Union is inherently implau sible because it is undisputed that the salespersons hired by Respondent during the time material including Frye, Mundey, and Parry, were each told by Respondent that pursuant to the contractual union security clause they were required to join the Union and were instructed by Respondent to go to the Union for that purpose 14 In fact Banch Frye and Mundey among other terminated salesper sons were named as discriminatees in the initial complaint issued on July 31 1987 in this proceeding However as a result of a further investiga tion by the Board s General Counsel the Board s Regional Director by Order dated November 18 1987 withdrew the allegations of the coin plaint that named Barich Frye and Mundey as discriminatees Frye s, Mundey s, and Barich s testimony that Lane told Frye Mundey and Parry, at an orientation meeting, that Respondent intended to blow the Union out, was not mutually corroborative and differed in certain signifi cant respects Mundey testified that after introducing ev eryone and welcoming Frye, Mundey, and Parry that Lane brought up the topic of the Union by stating Re spondent was in the middle of union negotiations but that Mundey, Frye, and Parry should not worry about negotiations because the Union probably would not be there because Lane was going to blow the Union out On the other hand, Frye testified that either Frye or Parry or Mundey asked Lane a question about the Union and Lane answered that question by stating that Frye, Mundey and Parry did not have to worry about joining the Union because he intended to blow the Union out 15 Barich s testimony concerning this subject is that at some point during the orientation meeting, Lane explained that we were going to blow the union out Barich did not state the context in which Lane supposedly ex pressed this remark More specifically, Barich did not corroborate Mundey's testimony that Lane made this statement in the context of remarking about the Re spondent s contract negotiations with the Union nor did Barich corroborate Frye's testimony that it was made in the context of Lane remarking that the three newly hired salespersons did have to worry about joining the Union Frye s, Mundey s and Barich s testimony concerning Lane s statement that Frye, Mundey and Parry should not talk or associate with the other salespersons em ployed by Respondent was not mutually corroborative and differed in certain significant respects Mundey testi fled Lane told them not to associate with the old timers and that the reason he did not want them to as sociate with the old timers was those salespersons would give them bad sales advice and Lane had certain standards he expected his salespersons to follow and the old timers did not follow those standards and went on to explain that the old timers were not aggressive enough Frye testified Lane told them only to deal with Barich and not to associate with the other salespersons and stated that while it way -4ll right for them to be cordial to the other salespersons not to get buddy buddy with them According to Frye although Lane at another point during the meeting criticized the salespersons whom Lane referred to as deadwood as not being ag gressive enough Lane did not, as Mundey testified give an explanation for his instruction that Frye, Mundey, and Parry not associate with the deadwood Barich testi fled that when Lane told Mundey Frye, and Parry not to associate with the other salespersons that Lane did not refer to them as `old timers as Mundey testified, or as 15 Frye s testimony that Lane stated that Frye Mundey and Parry did not have to worry about joining the Union because he intended to blow the Union out warrants the inference that the question to which Lane was responding was whether Mundey Frye and Parry were obligated to join the Union As I have noted supra it is undisputed that during the time material all of Respondents new hires were instructed by Respond ent that they were obligated under the contractual union security clause to join the Union and were asked by Respondent to go to the Union for that purpose Under the circumstances Frye s testimony which was not corroborated by either Frye or Banch is inherently implausible HAYWARD DODGE 439 deadwood, as Frye testified, but testified that Lane re ferred to them as union people, and further testified Lane told Frye, Mundey, and Parry that he did not want them talking to any of the union people out there and to keep away from the union people and warned that if they spoke to them that he would burst Frye s, Parry s, and Mundey s bubble' and they would be ter minated Neither Frye nor Mundey testified that Lane threatened them with reprisals, including termination, if they spoke with other salespersons Also unlike Mundey, who testified that Lane explained that Frye Mundey, and Parry should not associate with other salespersons because he feared they would be given bad sales advice, Barich testified that Lane gave no explanation during the orientation meeting for this instruction, but testified that immediately after the meeting Lane explained to Barich he did not want the three inexperienced new hires to talk with the union workers because he did not want them to join the Union and did not want the other salesper sons to know that they had not joined the Union As I have noted supra, Barich's testimony in this respect is in herently implausible It is for the above reasons that I find there is no credi ble evidence to support the alleged violations of Section 8(a)(1) of the Act set forth in paragraphs 7(a) and (f) of the amended consolidated complaint 16 and of that part of paragraph 7(b) alleging that on or about February 2, 1987, Respondent threatened to discharge employees if they joined or supported the Union 17 1 therefore shall recommend the dismissal of those allegations 4 Lane s conversation with Barich The complaint paragraph 7(g), alleges in substance that on or about February 3, 1987 , Respondent through General Manager Lane violated Section 8(a)(1) of the Act by interrogating employees about their union activi ties and the activities of other employees and by direct ing and soliciting employees to report about the union activities of other employees In support of this allega Lion the General Counsel relied on Barich s testimony Barich testified that a few days after February 2 1987 he walked into Lane s office and interrupted a conversa tion between Lane and Sales Manager Lamaestra and Lane asked Barich and Lamaestra if there was a strike how many people they thought would stop work and support it Barich answered that probably approximately 16 The General Counsel in his posthearing brief does not contend there is evidence to support the part of par 7(f) alleging that on or about Feb ruary 2 Lane promised employees benefits if they refrained from engag mg in union activities In this respect I note that even if I were to credit the testimony of the General Counsels witnesses it would not establish that in offering to pay Mundey Frye and Parry $1500 a month rather than the $1000 they were entitled to under the terms of the 1984-1986 agreement that the increased amount of money was offered to them in the form of a promise of increased benefits if they refrained from engag mg in union activities In any event as I have found supra Lane credibly denied offering them a guarantee of $1500 a month 17 Regarding the other portion of par 7(b) which alleges that on or about December 19 1986 Lane threatened to discharge employees if they joined or supported the Union the General Counsel in his posthear mg brief does not point to any evidence supporting this allegation and my examination of the record fails to reveal such evidence I therefore shall recommend the dismissal of that allegation 10 salespersons would strike 18 When Lane asked wheth er Barich knew this for sure, Banch asked if Lane wanted him to find out, and Lane told him to "go find out Barich then left Lane's office and went to the sales floor and spoke individually to each of the approximate ly 15 salespersons on the floor at that time and asked each of them `how their feelings were and just what do you think about this union thing and what do you guys think about the strike Barich testified that some of those he questioned indicated they would support a strike and others indicated they would continue to work After he finished questioning the salespersons, Barich tes tified he returned to Lane's office and told Lane that ap proximately 9 or 10 salespersons whom he had ques tioned had indicated they would support a strike Lane asked for their names Barich asked if Lane would rather have him write out the names Lane answered in the of firmative, so Barich wrote out the list of the names of those salespersons whom had indicated they would sup port a strike and gave this list to Lane Lane testified he did not instruct anyone to find out which employees would strike and Lamaestra testified that there was no discussion in his presence between Barich and Lane about which employees would go out on strike I do not believe Barich s above testimony because his testimonial demeanor was poor and, as discussed supra, Barich was not a disinterested witness and, besides having poor demeanor his credibility was further im pugned by his grand theft conviction and the fact he lied about that conviction when he applied for work with Respondent Also when Lane testified he did not instruct anyone to find out which employees would strike and when Lamaestra testified there was no discussion be tween Lane and Barich in his presence about which em ployees would go out on strike, Lane s and Lamaestra s testimonial demeanor was good It is for the above rea sons that I find there is no credible evidence to support the alleged violations of Section 8(a)(1) of the Act set forth in paragraph 7(g) and therefore shall recommend the dismissal of those allegations The complaint at paragraphs 7(c) and (e) alleges in substance that Respondent through General Manager Lane violated Section 8(a)(1) of the Act on or about January 5 and March 11 1987 when it threatened em ployees it would impose more onerous working condi tions if they joined or supported the Union, and on or about January 30, 1987 when it threatened to retaliate against employees if they joined or supported the Union In his posthearing brief counsel for the General Coun sel makes no contention there is any evidence to prove the allegations encompassed by paragraphs 7(c) and (e) of the complaint and my review of the record has failed to uncover such evidence I therefore shall recommend that these allegations be dismissed 18 Barich s testimony is silent whether Lamaestra answered Lanes question 440 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD C The Alleged 8(a)(3) and (1) Violations ased witness in view of his discharge by Respondent Also when he submitted his affidavit to the Board during the investigatory stage of this case, he had reason to be heve that he would be named as a discriminatee, if there was merit to the Union s unfair labor practice charges For all the aforesaid reasons, I do not believe Barich s testimony Barich also testified that in December 1986 during the first 2 weeks of his employment, he was with Lane and Lamaestra discussing a strike that had occurred at an other dealership where Lamaestra and Barich had worked several years previously when Lane asked Barich how he thought things would go if there was a strike at Respondents place of business Barich testified he told Lane he thought it would not cause any problem Then, when asked by counsel for the General Counsel if there was a discussion during this conversation about the tactics Respondent would use if there was a strike, Barich testified there was such a discussion but testified it was difficult for him to recall what was said and that all he could remember about the discussion was we talked about how it went and how we thought we would make it here, probably the same way However, on fur ther reflection Barich testified that the words used by Lane during the conversation had something to do with first of all hiring people, green peas as he called them which were new people who did not know anything about the business and getting the crews going and put ting the guys on edge and having most of them leave When asked if he could remember anything else that was said during the conversation Barich testified, I in having a hard time remembering Like I say it s been a year and testified he was not able to recall what else was said Neither Lane nor Lamaestra were questioned about the above described remarks attributed to Lane Nonetheless, I do not believe Barich s testimony His tes timonial demeanor was poor and as I have discussed supra he was not an unbiased witness and his credibility was impugned by his grand theft conviction and the fal sification of his employment application Moreover it is evident from the way in which Barich s testimony was given that he had a very poor recollection of what Lane said during the meeting in question Also his testimony that Lane mentioned something about hiring inexperi enced salespersons in order to put the other salespersons on edge and cause them to quit makes absolutely no sense because Lane as Barich testified was supposed to have stated that this was one of the tactics Respondent would use if the salespersons stopped work in support of the Union s strike Respondents salespersons are represented by the Union for purposes of collective bargaining The amount they earn depends on the number of motor vehicles they sell inasmuch as their earnings are based on the commis lion they receive for each motor vehicle they sell As I have noted supra the 1984-1986 agreement between Re spondent and the Union was scheduled to expire on Jan uary 31 1987 and despite meeting on a number of occa sions from December 23, 1986, through April 2, 1987 the parties were unable to negotiate a successor agree merit 1 The evidence The amended consolidated complaint alleges that com mencing on or about September 17 1986 and continuing until on or about May 1, 1987, Respondent flooded its sales floor by hiring inexperienced salespersons and by increasing its sales force from approximately 20 to ap proximately 30 salespersons, and alleges Respondent did this for the purpose of decreasing employees commis sions and to cause the termination of employees, and fur ther alleges Respondent engaged in this conduct because of its employees union membership and activities, there by violating Section 8(a)(3) and (1) of the Act The evi dence pertinent to this allegation is set forth in this sec tion In support of this allegation as well as the allegations that Respondent independently violated Section 8(a)(1), the General Counsel presented evidence, described in detail supra, that Sales Manager Lamaestra told salesper son Banch that Respondent did not intend to have the Union represent its salespersons and intended to blow out the Union, that General Manager Lane told apple cant Cooper Respondent was trying to get rid of the Union, that Lane told salespersons Banch Mundey, Frye, and Parry that he intended to blow out the Union and warned Frye Mundey and Parry that he would terminate them if they talked to any of the sales persons represented by the Union For the reasons set forth supra I rejected this evidence Likewise, I do not believe Barich s testimony that he overheard Lane admit that Lane was flooding the sales floor with too many salespersons for the purpose of causing salespersons to quit and do not believe his fur ther testimony that Lane told him if there was a strike, Lane intended to hire inexperienced salespersons for the purpose of 'putting the guys on edge and having most of them leave My reasons for disbelieving Barich s testi mony follows Barich testified that a week before his March 15, 1987 discharge he had just finished talking on the telephone in one of the sales offices immediately adjacent to the sales floor when the following occurred He observed Lane and another man standing directly in front of Bar ich s office approximately 20 feet from where Barich was sitting Barich had never seen this man before and did not know his name Barich testified he observed Lane bend his head toward the stranger so as to prevent others from hearing what he was saying, but that never theless Barich overheard Lane state what I in doing is keeping the floor flooded out so that hopefully these guys will quit at which point according to Barich, both Lane and the man he was talking to observed that Barich was looking in their direction so they walked off to the side and Barich was unable to hear anything else that was said Lane, whose testimonial demeanor was better than Barich s, specifically denied making the remark attributed to him As I have discussed in detail supra the credibility of Barich whose testimonial de meanor was poor, was further impugned by his grand theft conviction and the falsification of his employment application Also as discussed, Barich was not an unbi HAYWARD DODGE Dunng the first 7 months of 1986, Respondent sold substantially fewer motor vehicles than in 1985 and was losing money in 1986, whereas in 1985 it had made a profit In August 1986, to remedy this situation, Re spondent s owner hired as Respondents vice president and general manager Mark Lane an experienced sales motivator with a history of success in increasing the sales of automobile dealerships Lane assumed his position as general manager the first week of September 1986 and subsequently instituted a program to stimulate sales This program included increased cash bonuses and incentives, sales contests, better work schedules, salespersons were relieved from performing nonsales duties, a customer re lations manager was employed, the hours of the service department were extended in an effort to encourage cus tomers to buy cars from Respondent, training programs were improved and guest speakers spoke to the salesper sons about the products they were selling Also in an effort to attract more customers, Lane substantially in creased the Respondents inventory of automobiles and substantially increased the advertising budget During the period from September 1986 through January 1987 Respondent spent approximately $55,000 a month for ad vertising and during the months of February and March 1987 more than doubled this expenditure, spending ap proximately $125,000 in each of those months for adver tising In November, when the value of Respondent's in ventory of motor vehicles totaled between $4 and $5 mil lion, Lane placed orders for additional motor vehicles so as to increase the inventory to $6 5 million These new cars were delivered from the manufacturer during the period from December through February 1987 Lane s campaign to increase the sales of the dealership was a success During the 8 months prior to Lane s em ployment, January through August, Respondent sold 1427 units or an average of 178 3 a month whereas from September through December it sold 956 units or an av erage of 239 a month In fact during Lane s tenure of employment-September 1986 through June 1987-Re spondent ranked as the number one Dodge dealership in Northern California in terms of the number of motor ve hicles it sold 19 However Respondent still lost money During the calendar year 1986 it lost over $462 000 and lost money during the majority of the months in which Lane was employed It was Lane s inability to operate the dealership at a profit, which resulted in June 1987 in his discharge It is undisputed that Lane wanted his salespersons to be aggressive in their dealings with customers and felt that some of the salespersons who were there when he became general manager were not aggressive enough in their sales techniques and was unhappy about this It is also undisputed that Lane's belief that high volume sales required aggressive salespersons was a belief he had held for several years and which he felt was responsible for 19 Dunng the period from September 1986 through May 1987 Re spondent sold the following number of motor vehicles September-249 October-226 November-200 December-281 January-169 Febru ary-193 March-209 Apnl-172 and May-187 I note that December was an abnormally high month for sales because of the change in Federal tax laws effective the next year which encouraged customers to purchase their new cars before the end of the 1986 tax year 441 his previous successes in selling automobiles at other dealerships In September, when Lane became general manager, Respondents salespersons were divided into two shifts those on the first shift began work when the dealership opened for business and left at 3 p in, whereas those on the second shift began work at 3 p in and left when the dealership closed for business in the evening In either late January or early February 1987 Lane stopped using two shifts and switched to a four crew system Under this system Respondents salespersons, with a few excep tions, were divided roughly into four separate crews each crew having its own crew chief 2° The crews start ed and ended their workdays at different hours, i e , one crew began work at 8 a in and left at 3 30 p in and an other began work at 11 am and left at 3 p in The crews work schedules were arranged so that approxi mately 3 or 4 hours a day there was an overlap of three of the crews In other words for a period of approxi mately 3 or 4 hours daily approximately 75 percent of Respondents sales force was on the sales floor together Lane testified his reasons for establishing the four crew system were as follows The competition between the crews, which Lane encouraged by a series of contests and bonus programs designed to reward salespersons based on the sales of their crew, was calculated to mote vate the salespersons to sell more cars, the more experi enced salespersons who had been appointed crew chiefs were in a position to give assistance to those salespersons on the crews with less or no experience, the new system gave the salespersons 4 consecutive days off once a month and enabled them to know what their work schedules would be for a 12 month period and the new system allowed Respondent to hold smaller training ses sions and allowed its salespersons to leave the sales floor to check out Respondents inventory which was scat tered over a two block area Lamaestra, Respondents sales manager, testified that during the period he was employed when Respondent maintained its four crew system, that it hired between 5 and 10 inexperienced salespersons-known as green peas because they had no prior experience selling auto mobiles Lamaestra testified the reason for employing in experienced salespersons was there was a shortage of ex perienced salespersons in the industry and as a result there were not enough experienced applicants to fill job vacancies 21 In this regard, the record reveals that during the period involved in this case it was difficult for automobile dealerships to hire experienced salespersons because the demand for experienced salespersons had in creased significantly because of the opening of new deal erships including those dealerships that were selling automobiles that had only recently come onto the market, i e the Hyundai Barich testified in December while talking with Lane he mentioned that an automobile dealership he had for merly worked for used green peas -inexperienced 20 I note that one of the four crew chiefs appointed by Lane was the Union s steward 21 Lamaestra and Lane each testified in effect that in the past prior to working for Respondent they had hired inexperienced salespersons 442 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD salespersons to meet customers and bring them into the sales office, where Barich would "slam the deals togeth- er." Lane, according to Barich's testimony, stated he thought this was an excellent idea because "he felt the union people that were there were prima donnas" and stated "he just did not care for them at all" because "they were slow paced" and that "the young kids would go out there . . . and grab the deals and bring them up with excitement and stimulate business." This was Bar- ich's testimony given during his direct examination. During cross-examination, Barich testified in effect that, rather than use the phrase "union people," Lane used the term "older people." Barich testified that Lane stated, "he felt that the older people who were there were prima donnas and that perhaps some new people would stimulate things, would stimulate business." Assuming Lane made these remarks'22 I find he did not use the term "union people," as Barich initially testified, but used the term "older people," as Barich later testified on cross-examination. Barich also testified that in January 1987, shortly before the February 2 hire of inexperienced salespersons Frye, Mundey, and Parry that Lane asked Barich to review the applications of the persons who had applied for jobs as salespersons and to have those whom he felt would be good salespersons come in for an interview. The next day Barich advised Lane that he had asked five of the applicants to come in for interviews. Barich testi- fied that Lane responded by stating that when the appli- cants came in for the interviews that Barich should walk them around the dealership as if he was planning to hire them so that "the prima donnas would get real tight." Lane testified that in March 1987 he learned from a leaflet shown to him by a salesperson that the Union in- tended to call a strike by Respondent's salespersons in support of the Union's bargaining position. Lane testified he met with his sales managers early in March 1987 and they discussed how Respondent would operate in the event of a strike and that during this period Respondent's lawyer sent him a strike preparation kit and Lane in- structed Respondent's business office what steps to take in case there was a strike. Lamaestra, one of the two sales managers, testified Lane indicated he was con- cerned about which of the salespersons would support a strike called by the Union. Lane testified that he was not in fact concerned about the salespersons striking because the shop steward for the Machinists Union, the union that represented the employees employed in Respond- ent's shop, had advised Lane that under no circum- stances would the shop employees honor the salesper- sons' picket lines if they went out on strike. It is undis- puted that Sales Manager Lamaestra told the salesper- sons, at one of their regular scheduled sales meetings, that if a strike occurred he would like to see all of them remain at work and there would be work available for those who decided not to strike, but it would be fine if 22 As I have indicated supra, I am extremely reluctant to credit Bar- ich's testimony concerning any matters of significance because of his poor testimonial demeanor and the several other factors, supra, which impugn his credibility. some of them decided not to work on account of the strike. Regarding the number of salespersons employed during the time material, the only competent and reliable eMidence on this subject is General Counsel's Exhibits 16(a)-(d), information taken from the Company's payroll and other business records kept during the normal course of business, which encompassed the period December 1, 1986, through March 31, 1987.23 During this period of time, Respondent employed the number of salespersons set forth as follows:24 December 1, 23 salespersons; De- cember 1 through 16 the number fluctuated between 22 and 23; December 17, it increased to 24, and on Decem- ber 22 it increased to 25; it remained at the 25 level until January 13 and from January 13 to February 2 fluctuated between 23 and 24 salespersons;25 February 2, with the start of the four-crew system and the commencement of the employment of inexperienced salespersons, the number of salespersons in Respondent's employ increased from 23 to 26; February 10, it increased to 28; February 17, it increased to 29; February 18, decreased to 28; fluc- tuated between 26 and 28 between February 18 and March 12; March 12, increased to 30; fluctuated between 29 and 30 between March 12 and March 16; March 16, decreased to 25; March 18, increased to 27; and, from March 28 to the end of the month fluctuated between 26 and 28,26 with 26 having been employed since March 28 23 General Manager Lane testified that when he began work for Re- spondent during the first week of September 1986 that he "suspects" there were approximately 24 to 28 salespersons employed, or approxi- mately 26, give or take a few, and further testified that by December 1986 the sales force had increased from about 26 to about 28 or 30 and that in March 1987 Respondent employed between 22 and 24 salesper- sons. Sales Manager Lamaestra testified that during the September 1986- March 1987 period the number of salespersons fluctuated constantly be- tween 20 and 25. Crew Chief Barich testified that when he started work on December 3, 1986, Respondent employed approximately 19 or 20 salespersons and that beginning in late January or early February 1987, when the four-crew system was instituted, Respondent employed ap- proximately 30 salespersons. I have not relied on Lane's, Lamaestra's, or Barich's above-described testimony because when it is compared with the information contained in G.C. Exhs. 16(a)-(d), based on Respondent's business records kept during the normal course of business, it is obvious that their testimony concerning the number of salespersons employed during the times material was completely unreliable. This is not surpris- ing given the nature of the evidence involved and the passage of time. In my opinion the only competent and reliable evidence concerning the number of salespersons employed during the time material is set forth in G.C. Exhs. 16(a)-(d), information compiled from Respondent's payroll records kept during the normal course of business. 24 G.C. Exhs. 16(a)-(d) list the names of the salespersons employed by Respondent during the period December 1, 1986, through March 31, 1987, and show the dates of hire and termination of those hired and ter- minated during that period. I relied on these exhibits in reaching my con- clusions concerning the number of salespersons employed during the period of December I, 1986, through March 31, 1987. In doing so I con- cluded that a salesperson was employed on the date the exhibits state he or she was hired or terminated, making the assumption that the employee started work on the hire date and worked on the day of his or her termi- nation. In the case of Reynaldo Rivera I concluded his employment ter- minated January 30, 1987, the termination date shown on a document contained in his personnel file. Lastly, I concluded that Kim Primrose and Michael Levy, whose names do not appear on G.C. Exh. 16(d), were employed during March 1987 inasmuch as the record as a whole reveals that they were employed during that month and there was no showing that either of them were terminated in February 1987. 25 For a period of I day, January 23, it reached a total of 25. 26 On one day during this period, March 22, the number dropped to 25. HAYWARD DODGE to the end of the month There is no record evidence whatsoever as to the number of salespersons employed after March 31, 1987 The record (G C Exhs 16(a)-(d)) further reveals that during the period from December 1 1986, through March 31, 1987 Respondent hired 26 salespersons and that 22 were terminated, referring to discharges or vol untary quits More specifically, the record shows 6 hires and 3 terminations in December, 2 hires and 4 termina tions in January, 6 hires and 3 terminations in February, and 12 hires and 12 terminations in March Regarding the dates of the hires and terminations during the months of February and March the record (G C Exhs 16(a)-(d)) shows three hires February 2, two hires February 10, one hire February 17 one termination February 17, one termination February 27, one termina tion February 28, one hire March 3 one hire March 11, two hires March 12, one hire March 15, one hire March 16, two hires March 18, one hire March 20, two hires March 23, one hire March 24, one termination March 12, six terminations March 15, two terminations March 20, one termination March 21, one termination March 25, and one termination March 27 2 Discussion The complaint alleges that commencing on or about September 17, 1986, and continuing thereafter until on or about May 1 1987, Respondent flooded its sales floor by hiring inexperienced salespersons and by increasing the size of its sales force from approximately 20 to 30 employees, and that it did this for the purpose of de creasing individual employees commissions and in order to cause the termination of employees and further al leges that Respondent engaged in this conduct because its employees joined or assisted the Union, thus violating Section 8(a)(3) and (1) of the Act For the reasons set forth below this allegation is without merit Initially, I note the evidence does not support the alle gation that Respondent flooded the sales floor by adding approximately 10 more salespersons, an increase of approximately 50 percent to its sales force Rather the record shows that during the 2 month period from De cember 1 1986 to February 2 1987 that the number of salespersons in Respondents employ constantly fluctuat ed between 23 and 2527 and during the succeeding 2 month period from February 2 1987 through March 31 1987 the number of salespersons constantly fluctuated between 26 and 28 28 The record also reveals that during the period between December 1 1986 and March 31 1987 that 22 salespersons left Respondents employ and all 22 were replaced by new hires and that in addition to hiring of these 22 replacements 4 other salespersons were hired during this 4 month period In other words, when the 2 month periods of December 1-February 2 and February 2-March 31 are compared the record re veals that the number of salespersons employed during 27 On 3 nonconsecutive days during this period the number of salesper sons dropped to 22 28 During this period the number of salespersons dropped to 25 on 3 nonconsecutive workdays and on 3 nonconsecutive days increased to 29 and on 2 nonconsecutive days increased to 30 443 the latter period increased by three or four This increase cannot be characterized, as alleged in the complaint as a flooding of the sales floor with additional salesper sons 29 Rather it constitutes only a modest increase of between approximately 13 and 15 percent from the number employed previously Regarding the allegation that Respondent flooded the sales floor by hiring inexperienced salespersons the record reveals that during the first 3 months of 1987 Re spondent hired between 5 and 10 inexperienced salesper sons of whom approximately 4 were hired during the period in February and March 1987 when Respondent increased its complement of salespersons by between ap proximately 13 and 15 percent Having found that during the 2 month period of Feb ruary 1987 through March 31 1987 Respondent hired approximately four inexperienced salespersons and in creased its complement of salespersons by three or four, the question to be decided is whether the General Coun sel has made a prima facie showing that this conduct was discriminatorily motivated and, if so, whether Respond ent has proven it would have hired three or four more salespersons including the inexperienced ones, even in the absence of the employees union sympathies and/or activities For the reasons set forth below, I find the General Counsel has failed to make a prima facie show mg of a violation In evaluating Respondents motivation for increasing its complement of salespersons and hiring inexperienced salespersons it is highly significant that there is no credi ble evidence of any statement or other conduct by Re spondent that would warrant the inference Respondent was antagonistic toward Respondents salespersons for being represented by the Union or for being union adher ents, or was antagonistic toward them because it ap peared that the Union intended on asking them to cease work to engage in a strike against Respondent in support of the Union s position at the bargaining table Although General Manager Lane was unhappy with several of the salespersons he was unhappy with them not because of union considerations but because they did not subscribe to his aggressive sales techniques, which he felt were es sential to increase Respondents sales volume Indeed during the times material to this case all new hires were instructed by Respondent to go to the Union and join the Union as required by the contractual union security provision Also in late January or early February 1987 when Lane implemented the system of four sales crews, the union shop steward at the dealership was designated by Lane to be one of the four crew chiefs not the type of conduct for an employer that was supposedly engaged in a course of conduct designed to cause its prounion salespersons to voluntarily terminate their employment 29I recognize that in late January or early February 1987 Respondent instituted its system of four sales crews which resulted in approximately 75 percent of its sales force being on the sales floor together each day for a period of approximately 3 or 4 hours The complaint does not allege that the system of four sales crews was instituted for improper discrimi natory reasons and there is no evidence of this Quite the contrary as described supra General Manager Lane instituted this system of four sales crews because of legitimate business considerations as part of his program to increase sales 444 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD That Respondent was not antagonistic toward its em ployees because of their union sympathies or activities is further shown by the fact that in March 1987 when Sales Manager Lamaestra spoke to the salespersons about the possibility of a strike being called by the Union, he told the salespersons it would be fine if they stayed away from work in support of the Union s strike Counsel for the General Counsel does not contend and the record does not reveal there was anything significant about the timing of Respondents disputed conduct with any kind of union activities Quite the opposite it was early in February 1987 approximately 1 month before Respondent was informed that the Union intended to call the strike, when Respondent hired three inexperienced salespersons and commenced to increase its complement of salespersons Respondents employment of inexperienced salesper sons was perfectly understandable and not unusual given the lack of job applicants with automobile sales expert ence Given the fact that Respondent during the months of February and March 1987, in an effort to attract more customers, purchased over a $1 5 million worth of auto mobiles for its inventory and doubled the amount of money it spent on advertising the modest 13 or 15 per cent increase in the number of salespersons in its employ dunng that period does not seem extraordinary 30 Nor is Respondents conduct of substantially increasing its in ventory of cars for sale and substantially increasing the amount of money it spent for advertising to bring adds tional customers to the dealership during the months of February and March 1987 the type of conduct Respond ent would have engaged in if it was as the General Counsel claims engaged in a course of conduct designed to reduce its prounion salespersons sales opportunities in order to force them to terminate their employment or to afford Respondent an opportunity to fire them for poor productivity 31 The fact that Respondent was losing money does not make its employment of the additional salespersons suspect inasmuch as the employment of sev era] additional salespersons added very little to Respond ent s costs because salespersons are not salaried or hourly wage earners but are paid a commission for each car they sell It is for all the above reasons that I find the General Counsel did not make a prima facie showing that Re spondent when it increased the number of salespersons and employed inexperienced salespersons was motivated by salespersons union sympathies or activities In reach mg this conclusion I considered that during the period from February 2 through March 31 1987, the period of time during which Respondent increased its sales force sales were substantially lower than December 1986, when Respondent employed fewer salespersons '32 and 30 As I have indicated supra there is no reliable evidence in the record concerning the number of salespersons employed after March 31 1987 31 I note that the amended consolidated complaint does not allege that any of Respondents salespersons were terminated for their union sympa thies or activities or were constructively discharged as a result of Re spondent s conduct and there is no evidence of this 32I agree with the General Counsel that the sales figure of 209 for March 1987 is misleading because 58 of these vehicles were sold by sales also considered that General Manager Lane did not ex plain why Respondent increased its complement of sales persons during the February-March period even though it was a slow sales period 33 Nevertheless when these factors are viewed in light of the whole record, specifi cally the considerations discussed above, they are insuffi dent to warrant the inference that the union membership and/or activities of Respondent s salespersons was a factor that motivated Respondent when it hired inexperi enced salespersons and increased the number of salesper sons in its employ during the months of February and March 1987 from the number that had been employed during the preceding 2 month period Based on the foregoing I find the General Counsel has failed to make a prima facie showing that it was the union membership or activities of its salespersons that motivated Respondent to hire inexperienced salespersons and to increase the number of salespersons in its employ during the months of February and March 1987 I there fore shall recommend the applicable complaint allega tions be dismissed in their entirety D The Alleged 8(a)(5) and (1) Violations 1 The evidence Respondents collective bargaining contract with the Union (the 1984-1986 agreement) was effective by its terms from February 1 1984 to January 31 1987 Sec tion 20 of the agreement provides that if neither party, prior to 60 days before the January 31 1987 anniversary date gives the notice of desired changes this agreement shall be automatically renewed for another year, and where such timely reopener notices have been given section 20, among other things further provides The parties shall promptly arrange for and enter into negotia tions in respect to the specific changes desired In the event the parties mutually agree by the anniversary date on the changes proposed in the sixty (60) day notice or on other changes in place of those proposed the same shall be incorporated into and made part of this Agree ment Pursuant to section 20 of the agreement the Union and Respondent by letters dated November 26 1986, in formed one another that they desired to make changes in the terms of the 1984-1986 agreement specified which sections of the agreement they desired to change and asked that negotiations be scheduled The parties in their respective letters each specifically stated that they re served the right during contract negotiations to amend, change add to or revise the list of changes enumerated in their reopening letters person Mark Buehl who did not work on the sales floor with the other salespersons and whose clientele consisted of a special group of custom ers regarded by other dealerships as high credit risks 33 As I have found supra Lanes testimony that Respondents comple ment of salespersons fluctuated between 22 and 24 dunng the times mate rial was not credible But considering the nature of the testimony-the number of salespersons employed approximately 1 year prior to the hear ing-it is not readily apparent that he deliberately fabricated this testimo ny rather than that the passage of time simply dulled his memory con cernmg the specific numbers involved HAYWARD DODGE In December prior to the parties first negotiation ses sion, Respondents principal negotiator Attorney Marcia Hoyt met with Respondents owner, Hank Turian and its general manager Mark Lane Turian gave Hoyt an idea of what he expected from the upcoming contract negotiations He said he wanted a new compensation program that tied compensation to productivity and felt that the 30 percent commission for all sales34 was too high and that a 25 percent commission rate for salesper sons who did not sell an average number of automobiles was more appropriate and that salespersons who sold more than 15 units per month should receive a higher rate of 35 percent or 40 percent Turian also stated he wanted to increase the pack to 4 percent because the cost of getting a motor vehicle ready for sale had in creased substantially and, with respect to other current terms and conditions of employment, advised Hoyt, as follows No increase in current vacation benefits, a re duction in the minimum commission, an increase in the number of holidays and in the number of hours Respond ent could be open for business the removal of the sales person who handled fleet sales from the bargaining unit a revised grievance procedure that would reduce the number of stale grievances, the salespersons health wel fare, and pension benefits to be covered by Tasha Corpo ration s plans rather than the Union s plans Turian also informed Hoyt that because of serious financial difficul ties Respondent needed financial relief if it was to con tinue to operate The parties held their first negotiation meeting on De cember 23 1986 and from December 23 through April 2, 1987 held 13 negotiating sessions Attorney Hoyt was Respondents spokesperson for purposes of the negotia tions President Salvaressa was initially the Union s spokesperson and thereafter Daniel Bullen, a representa tive of the Union s International Union, assumed that po sition a The December 23 1986 negotiating session Present at this negotiating session were Union Presi dent Salvaressa and Union Business Agent Yates Ken dricks and for the Respondent Attorney Hoyt and Gen eral Manager Lane Prior to the meeting Salvaressa and Hoyt had agreed to exchange contract proposals Both came with written contract proposals Nonetheless at the outset of the meet ing they each stated they did not have a contract propos al to submit Hoyt threatened to file an unfair labor prac tice charge with the Board if the Union did not submit a proposal Salvaressa and Kendncks left the room and re turned in approximately 20 minutes with a one page typed proposal dated December 22 Hoyt asked Sal varessa to explain some of the items in the proposal Sal varessa stated he did not intend to discuss the Union s proposal until Respondent submitted its proposal Hoyt 34 The 1984- 1986 agreement called for salespersons to receive a 35 percent commission for all motor vehicles sold but as also called for in the agreement what actually took place was that the salesperson re ceived a commission of 30 percent with the remaining 5 percent being paid to an employee classified as a closer whose job it was to assist the salesperson in structuring the terms of a sale in order to get as much money as possible from the customer and to close the sale 445 tried to get him to discuss that part of the Union s pro posal that called for the deletion from the 1984-1986 agreement of the section dealing with closers Sal varessa responded by stating he wanted to see Respond ent s proposal before they started to negotiate and stated he did not believe Hoyt was in a position to begin nego tiations without a company proposal and that he did not believe she was there to negotiate a contract Hoyt wrote on a piece of paper that Respondent was propos ing to delete the contractual provisions dealing with closers and handed it to Salvaressa who repeated he would not negotiate until Respondent submitted a con tract proposal Hoyt stated she only recently had spoken with Respondents owner Turian and had not had time to put together a full and complete contract proposal but would submit a full and complete proposal to the Union by the end of the month The meeting concluded with the parties agreeing to meet again on January 5 1987 During the December 23 bargaining session General Manager Lane stated the dealership was losing money and could not continue doing business in that fashion without either going out of business or ending up in bankruptcy He told the union negotiators that the sales force just stood around on the sales floor and did not prospect for customers and as a result were not selling as many motor vehicles as they were capable of selling Lane who had dust started working for Respondent in September 1986, stated he expected his salespersons to be more aggressive In the contract proposal it submitted to the Respond ent at the December 23 bargaining session the Union proposed the following changes in the 1984-1986 agree ment The deletion of the section dealing with closers an increase in Sunday premium pay from $0 to $75, an in crease in minimum sales commission from $100 to $200 a reduction of the pack for domestic motor vehicle from 2 percent to 1 percent and for imported motor vehicles from 3 percent to 2 percent 35 an increase from $500 to $750 in the bonus for selling 10 vehicles a month and from $1000 to $1500 for selling 15 an increase in the monthly draw from $1500 to $2000 for salespersons em ployed for more than 90 days and from $1000 to $1500 for those employed less than 90 days an increase from $175 to $350 in the monthly payment to salespersons in lieu of the use of a demonstrator automobile, an increase in the number of weeks of vacation for salespersons em ployed for 5 or more years36 and whereas the 1984-1986 agreement provided that vacation pay be a lump sum of money i e $300 for 1 weeks vacation the Union pro posed that vacation pay be computed as a percentage of a salespersons prior earnings i e , a weeks vacation to be paid at 1/52 of the prior year s earnings as A salespersons commission is based on a percentage of the gross profit of the transaction The pack which is a percentage of the vehicle s factory invoice refers to the cost to the dealer of preparing delivering and getting ready a motor vehicle that is sold The pack is deducted from the gross profit prior to figuring the salespersons commission thus the higher the pack the lower the salesperson s commission 36 The agreement provided that after 5 years a salesperson would re ceive 3 weeks of vacation The Union proposed that after 5 years they would receive 4 weeks vacation and after 7 years 5 weeks 446 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On December 24 Hoyt spoke with Clarence Washing ton a mediator employed by the Federal Mediation and Conciliation Service, and asked that he attend the sched uled January 5, 1987 bargaining session Washington did not attend this session because in agreement with Union President Salvaressa he stated he believed it would be premature for him to become involved at such an early stage Hoyt testified she contacted Washington because she thought there was going to be difficulty in the nego tiations, because of Salvaressa s refusal at the December 23 negotiating session to discuss the Union s proposal and because it had been Hoyt s experience with the Union in negotiations involving other employers, that the negotiations went more smoothly with a mediator present On December 30 Hoyt instructed her secretary to send the Union the contract proposal she had prepared On the morning of January 5, 1987 Salvaressa received by mail a letter signed by Hoyt, which stated, enclosed please find the counter proposal [of Respondent] to your initial proposal When Salvaressa discovered there was nothing enclosed in the letter he telephoned Hoyt and advised her of this and Hoyt responded by stating she in advertently had failed to enclose the Company s propos al Salvaressa received the proposal from Hoyt at the start of the January 5 negotiating session held later that day b The January 5 1987 negotiating session Respondents contract proposal submitted to the Union on January 5 was a complete contract proposal It in cluded changes in sections of the 1984-1986 agreement which were not among the sections listed in Respond ent s November 26 reopening letter, which specified the sections of the agreement Respondent wanted to change In its January 5 contract proposal Respondent sought to change virtually every section of substance in the 1984- 1986 agreement and to add several new provisions of substance to the agreement These changes were favor able to Respondent and almost all of them took away or reduced employees wages and benefits enjoyed under the agreement The Union s lawyer David Rosenfeld 37 took the position, which he expressed to Hoyt, that only those sections of the agreement listed in the parties re spective November 26 reopening letters could be the subject of negotiations Hoyt objected A substantial part of the 2 1/2 hours that this session lasted consisted of Rosenfeld reviewing each of the items contained in Re spondent s January 5 proposal and advising Hoyt wheth er they were properly open for negotiations or not 38 31 This was the only negotiating session attended by Attorney Rosen feld For the remaining sessions Sullen was the Union s spokesperson and was accompanied by Salvaressa and/or Kendricks Attorney Hoyt was Respondents spokesperson at each of the negotiating sessions except for one of the sessions held in February 1987 and was usually accompa flied by General Manager Lane 38 The record reveals that toward the very end of the January 5 bar gaining session or at the next bargaining session the Union s negotiators indicated they were prepared to negotiate concerning all of the items set forth in Respondents January 5 proposal but would do so without waiv ing the Union s position that legally the only subjects open for negotia tion were those encompassed by the parties November 26 reopening let ters But in reviewing the proposal there was some discussion about some of the items it contained The meeting ended with Hoyt stating she desired to conclude the negotia tions as quickly as possible and referring to the Union s position that the negotiations were limited to the sections of the 1984-1986 agreement enumerated in the parties November 26 reopening letters, stated she would not tol erate that kind of bullshit and that if it took Federal mediation she would get a Federal mediator involved immediately The Union s negotiators refused to agree to this stating it was not necessary to call in a Federal me diator at that point It is undisputed that during this negotiating session as well as during other sessions, Hoyt and Lane told the union negotiators that the reason Respondent submitted its January 5 proposal which took away and reduced numerous benefits currently enjoyed by the employees was that under the provisions of the 1984-1986 agree ment Respondent was unable to operate competitively and was losing money and because of this could not afford to operate without the changes in the 1984-1986 agreement set forth in its January 5 proposal Respondents January 5 contract proposal changed the existing agreement as follows (1) deleted the truck salesman classification (2) changed the definition of Fleet Buyer from someone operating a business with five or more vehicles to someone who had been issued a bona fide fleet number by a manufacturer (3) deleted the classification of closer , (4) changed that part of the union security agreement that stated that employees shall become and remain union members as a condition of em ployment to read that employees shall meet the financial obligation required to become and remain union mem bers as a condition of employment (5) the agreement stated Sunday work was voluntary for employees and al lowed them to work on just three holidays-Memorial Day Independence Day and Labor Day-and restricted the number of employees Respondent could employ on those three holidays and on the day after Thanksgiving and the days after Christmas and New Year s Day which were also voluntary workdays for the employees, whereas Respondent proposed that all of these provisions be deleted from the agreement and Respondent be al lowed to operate on Sundays and holidays without limi tation during the hours from 10 a in to 7 p m 39 (6) Re spondent proposed to be open for business from 9 a in to 8 p in on Saturdays and from 8 30 a in to 9 p in during weekdays, whereas under the agreement Respondent during the period May I through October 31 operated on Saturdays from 9 a in to 6 p in and during weekdays from 9 a m to 9 p in and during the period of Novem ber I through April 30 operated from 9 am to 8 p m, (7) the agreement placed stringent limits on Respondent s ability to schedule special sales events, whereas Respond ent proposed it be allowed to schedule 12 special sales events per year with unlimited hours, (8) deleted the pro vision that prohibited Respondent from requiring or per mitting employees to work more than 8 hours a day 39 Under the 1984-1986 agreement on Sundays and on the three hole days it was allowed to open for business Respondent could operate from 11 am to5pm HAYWARD DODGE 447 during the week and more than 9 hours on a Saturday (9) changed the provision that stated Respondent shall adjust the floor time so that all employees shall have equal advantage to read simply employer shall rotate floor time , (10) under the agreement the employees regular workweek was defined as Monday through Sat urday, whereas Respondent proposed the workweek be Monday through Friday or Tuesday through Saturday, or Wednesday through Sunday, (11) under the agree ment Respondent could not require a salesperson to attend a sales meeting on his or her day off and the agreement required that employees weekly work sched ules be posted no later than the Friday preceding each workweek, whereas Respondent proposed that a sales person be required to attend sales meetings on his or her day off and deleted the language that work schedules be posted ahead of time, (12) under the agreement employ ees were paid a 35 percent commission for each motor vehicle they sold,40 regardless of the number sold whereas Respondent proposed that the amount of an em ployee s commission be tied to the number of motor ve hicles sold and proposed specifically that salespersons who sold 1 through 10 motor vehicles a month receive a 25 percent commission, 11 through 15 motor vehicles, a 30 percent commission and for the sale of 16 or more motor vehicles, a 35 percent commission, and whereas the agreement provided for a minimum commission of $125 for the sale of a new motor vehicle, Respondent proposed a minimum commission of $100, (13) proposed raising the pack for domestic vehicles from 2 percent to 4 percent and for imports from 3 percent to 4 percent 41 (14) deleted that part of the agreement that gave employ ees the right to `shop any trade,' namely to have other dealerships appraise a customers trade in and if another dealerships appraisal exceeded Respondents appraisal by more than $100, the salesperson had the right to sell the trade in to the other dealership if Respondent refused to meet the higher appraisal price (15) deleted the part of the agreement that gave employees the right to engage in fleet business and proposed that all fleet sales be ex cluded from the coverage of the agreement (16) in creased the pack for used motor vehicles from $175 to $250, (17) deleted the incentive bonus provision under which salespersons received a $500 bonus for selling 10 motor vehicles a month $1000 for selling 15, and $100 for each vehicle sold over 15 (18) under the agreement salespersons employed for 90 days or less received a $1000 a month draw and those employed for more than 90 days received a $1500 a month draw, whereas Re spondent proposed a new classification for salesperson called beginner salesperson which it defined as some one who had not been employed by Respondent for 6 months continuously within the past 3 years, and Re spondent proposed that beginner salespersons receive an $800 monthly draw and, with respect to all the salesper sons in its employ proposed if they earned less than their monthly draw that the deficit not be automatically re 40 As noted supra although the rate of commission under the agree ment was 35 percent the salespersons only received 30 percent as the ad ditional 5 percent was paid to the unit employee employed as a closer 41 As described supra raising the pack had the effect of reducing the salesperson s commission moved from their record after 90 days as provided in 1984-1986 agreement, (19) under the agreement each salesperson was furnished a single itemized statement each month concerning all of their sales whereas Re spondent proposed separate itemized statements be issued after each sales transaction during the month (20) delet ed the section of the agreement which provided that demonstrator automobiles be furnished to each salesper son or in lieu of furnishing a salesperson with a demon strator pay him or her $175 a month, (21) deleted the section of the agreement prohibiting Respondent from soliciting donations or contributions from union mem bers, except by agreement of the Union (22) under the agreement a terminated employees vacation pay could be prorated for that part which was less than 1 month whereas Respondent proposed to delete this (23) under the agreement if salespersons commissions were miscal culated or they were otherwise underpaid, they could only collect backpay for 60 days and if it was shown that they were underpaid for more than 60 days Respondent was required to pay a specified sum of liquidated dam ages to a charity, whereas Respondent proposed to delete the liquidated damages provision and thus limit its backpay obligation to 60 days, and further proposed that all employees compensation grievances be submitted to Respondent in writing within 5 days of the occurrence that gave rise to the grievance whereas under the agree ment the employees had 30 days to file such a grievance (24) proposed to delete the section of the agreement pro viding for health and welfare benefits for retired employ ees, (25) proposed to modify the contractual grievance and arbitration procedure by eliminating the Board of Adjustment, which was a part of the grievance machin ery by limiting the arbitrators authority to award back pay to no more than 30 days from the date the grievance was filed and by deleting that part of the agreement that permitted a party to engage in economic action-strikes or lockouts-if the other party failed to comply with an arbitrators decision (26) deleted that part of the agree ment that stated it was not a violation of the agreement s no strike clause for an employee of Respondent to refuse to cross a sanctioned picket line and (27) proposed dif ferent language to replace the language in that section of the agreement entitled Term of Agreement In addition to proposing the above described changes in the existing agreement Respondent proposed the fol lowing new provisions (1) A provision allowing Re spondent to terminate any salesperson for lack of per formance if he or she sold less than 10 motor vehicles a month unless Respondent felt there were circumstances justifying the employees failure to meet this minimum unit sales requirement (2) a provision that moneys owed by employees to Respondent could be charged back against vacation pay or commissions, (3) a combined zipper and management rights clause which, in sub stance, provided that the terms of the parties' agreement were subject to change only by a subsequent written agreement, that the waiver or breach of any term or con dition contained in the agreement did not constitute a precedent, that Respondent had the right to unilaterally change the terms and conditions of employment not cov 448 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ered by the agreement, that "no right or function of management shall be limited by any practice or course of conduct or otherwise than by express provision of this Agreement," and that any "function not expressly limited by this agreement may be exercised unilaterally by the Employer"; and (4) proposed a most-favored-nation clause, which provided that if the Union entered into an agreement with an automobile dealership operating within Respondent's geographical sales area, which con- tained terms and conditions more advantageous to that dealership than those contained in the Union' s agreement with Respondent, or should the Union permit a dealer- ship under contract with it within Respondent's geo- graphical sales area to operate under more advantageous terms and conditions than provided by the Union's agreement with Respondent, the Respondent would be privileged to adopt the advantageous terms and condi- tions, provided it notified the Union in writing it intend- ed to implement such terms or conditions. During the January 5 bargaining session, the negotia- tors engaged in the following discussions about the pro- visions included in Respondent's contract proposal. Regarding the deletion of the classification of closer from the agreement, Hoyt explained Respondent no longer employed closers because its two sales managers now did the work previously performed by closers and because the sales managers were statutory supervisors they should not be covered by the contract. Salvaressa, after satisfying himself that the sales managers were stat- utory supervisors, agreed to delete closers from the cov- erage of the agreement. Regarding the exclusion of fleet sales from the cover- age of the agreement, Salvaressa stated the Union was concerned Respondent would take the position that sales to customers who were members of credit unions or automobile associations were fleet sales. Hoyt stated this was not Respondent's intent, it considered the sale of an automobile to a business enterprise to be a fleet sale, and agreed to furnish the Union with a definition of fleet sales. Regarding the termination of employees who sold less than 10 motor vehicles a month, Hoyt explained Re- spondent's salespersons were averaging only 5 or 6 sales a month, that some were barely earning their draw, and others were not even earning their draw, and it was be- cause of this that Respondent needed the right to termi- nate employees for poor productivity without the threat of employees' grievances. Salvaressa stated that while the Union did not object to Respondent terminating em- ployees for poor productivity, it felt Respondent's pro- posal was far too strict. Hoyt stated this was not suffi- cient, that Respondent wanted a definition in the agree- ment of what constituted unsatisfactory productivity be- cause it was tired of being faced with a grievance each time it discharged a salesperson for unsatisfactory pro- ductivity, and asked the Union to come up with such a definition. The Union's negotiators indicated they could not agree to this concept. Regarding the proposed classification for beginner salespersons and the proposal that the beginner salesper- sons receive a lower draw, Hoyt explained that the pro- posal was based on a provision included in a contract that the Union had with another dealership and stated that if it was good enough for the other dealership it was good enough for Respondent. Regarding the proposals concerning Sundays and holi- days and working hours and lower commissions, Hoyt explained that Respondent's competition was open longer hours and open on holiday and Sundays and paid less than Respondent, so in order to successfully compete Respondent needed those changes in the agreement. Regarding the most-favored-nation clause, Hoyt ex- plained that when she reviewed the Union's contract with other dealerships she had discovered there were three or four contracts where employers received a better deal than Respondent, especially in the area of holidays, hours of work, and commissions, and because Respondent needed to be competitive with other union dealerships, the most-favored-nation clause was neces- sary. Bullen remarked that that union's International had encountered a lot of problems with that type of a clause in the retail food industry. Bullen and Attorney Rosen- feld stated the Union would never agree to it. Regarding Respondent's proposal dealing with accrued vacation pay for terminated employees, Rosenfeld ques- tioned the legality of deleting prorata vacation pay. Hoyt told him that in making this proposal she relied on an opinion from the State of California's labor commissioner and would furnish him with a copy of the opinion. Regarding the employees' pension benefits, the 1984- 1986 agreement provided for Respondent to make monthly contributions to the Automotive Industries Pen- sion Trust Fund (Fund) on behalf of its employees and that the contributions and benefits were to be the same as provided to the shop employees represented by Inter- national Association of Machinists Local 1546 (Machin- ists Union). The 1984-1986 agreement, with respect to the employees' health and welfare benefits, provided for Respondent to provide life insurance, hospitalization, dental care, vision care, and prescription drugs for its employees and their dependents by paying a monthly sum to the fund and that the premium paid and benefits provided were to be the same as provided to Respond- ent's shop employees who were represented by the Ma- chinists Union. In its January 5 proposal Respondent stated it would submit its proposal on pension and health and welfare fringe benefits when it received information from the Union concerning the cost of the existing bene- fits, including anticipated cost increases. During the Jan- uary 5 bargaining session Hoyt told the union negotiators she knew that the pension benefits cost $165 a month and was just asking for information concerning the cost of the health and welfare benefits. The union negotiators in- dicated that Union Representative Kendricks would get this information. Regarding the proposed deletion of the contractual provision providing retired employees with health and welfare benefits, Hoyt explained it was not in all the Union's contracts and because Respondent was having fi- nancial problems and there were not very many retirees, it felt this was a logical place to cut back its expenses. Regarding Respondent's grievance proposal, Hoyt ex- plained that it had been taken from the contract of an- HAYWARD DODGE other union and that Respondents reason for including the time limits was that some grievances had been filed by employees as many as 2 years after the act or event that was being grieved and Respondent wanted griev ances filed promptly and processed expeditiously so it did not have several grievances hanging over its head continuously Attorney Rosenfeld indicated the Union would consider this proposal, but indicated that the Union would like to stay with the old language c The January 13 1987 negotiating session On January 13, 1987, Hoyt and Bullen the parties' principal negotiators, met for breakfast prior to the Janu ary 13 negotiating session at Bullen s request, to discuss the negotiations Bullen told Hoyt he had asked for the breakfast meeting because there seemed to have been a lot of hostility at the January 5 bargaining session and he wanted to know why 42 Hoyt replied the main reason for the hostility was that Union Attorney Rosenfeld had taken a bargaining position that Hoyt felt had stymied negotiations and she did not like to play games Also Hoyt noted that the relationship between the parties had not been that good recently because Respondent thought Union President Salvaressa had been filing a lot of un meritorious and stale grievances and after filing them did not process them expeditiously and, as a result griev ances were not being resolved for long periods of time Bullen stated he realized there were problems with the way in which the Union had been handling its affairs and that the Union s officials were being given instructions on how to process grievances more expeditiously On the subject of the contract negotiations Bullen stated that from the look of Respondents January 5 con tract proposal it appeared as if Respondent was trying to get rid of the Union Hoyt denied this and stated that if Respondent s aim was to get rid of the Union it would not have hired Hoyt to negotiate but would have hired another law firm which she named and that the fact Re spondent was not proposing to replace the health and welfare program contained in the 1984-1986 agreement with its own plan showed Respondent was not trying to get rid of the Union Hoyt also explained her method of negotiating a contract In this respect she told Bullen don t expect a lot of play in there [referring to Re spondent s bargaining proposals] because I don t like to sit [at numerous negotiating sessions] I like to come in and get things done and done now So if you see 25% commission and you propose 45% don t expect to end up at 30% or 35% Its not going to happen Bullen asked what she was looking for in the contract Hoyt replied that the main reason the existing agreement was `killing Respondent was it prevented Respondent from competing against its nonunion competition whom she stated were paying lower commissions and were open all hours of the day and without any restrictions on Sundays and holidays Hoyt also explained that Respondent felt it 42 Bullen did not have first hand knowledge about the parties collec tive bargaining relationship because he was employed not by the Union but by the Union s International and had been called on by Union Presi dent Salvaressa to conduct the Union s negotiations 449 was important that the salespersons commissions be tied to productivity During the January 13 bargaining session , the negotia tors reviewed Respondents January 5 proposals It is un disputed that even though the Union at the January 5 bargaining session expressed reservations about which subjects were open for bargaining, that the parties in fact at this meeting and at subsequent meetings acted as if ev erything was open for negotiations It is undisputed that during this meeting Respondent again raised the topic of its poor financial condition Lane stated Respondent would lose over $100,000 that month if business did not improve and Hoyt stated Respondent could not afford to agree to any economic increases in the existing agree ment because Respondent was losing money The only agreements reached at this meeting was an agreement to reaffirm the parties prior agreement to delete the con tractual provision concerning closers and that, as pro posed by the Union in its December 23 contract propos al, an agreement that a salesperson after making a sale would be furnished with a voucher listing the customer s name gross profit, commission earned and stock number The parties by the end of this meeting, reviewed ap proximately 50 percent of the Respondents January 5 contract proposal The major areas of discussion are briefly summarized below On the subject of commissions, the Union, which had proposed the 35 percent rate contained in the existing agreement, now proposed a commission of 30 percent for 1 through 5 sales a month 35 percent for 5 through 10 sales 40 percent for 11 through 15 sales 45 percent for 16 through 20 sales, and, 50 percent for 21 or more sales Hoyt rejected this proposal She stated that considering the financial needs of Respondent, the Union s proposal was totally unwarranted Bullen stated, This is a begin ning Just look at the proposal and see what we've done Hoyt replied that the Union had given salesper sons who were poor producers a 30 percent commission and the good producers a 50 percent commission and that the Company could not afford to pay 50 percent and pointed out that Respondent , under its proposal, had raised the commission structure up to 35 percent, where as it was currently only 30 percent 43 On the subject of Sunday and holiday work Hoyt stated that to compete against its nonunion competitors Respondent needed to be able to require its salespersons to work Sundays and holidays The union negotiators in dicated they objected to this and to Respondents further proposal to delete the $75 bonus paid to employees for holiday work under the existing agreement Bullen pro posed Respondent pay its salespersons 45 percent com mission for all cars sold on Sundays and holidays rather than a bonus for working those days Hoyt stated this would result in the Company not making any money on the cars it sold Bullen stated the Union would agree to making Sunday and holiday work mandatory for em ployees if it was limited to 10 salespersons who would 43 As noted supra under the existing 1984-1986 agreement the com mission rate was 35 percent for all cars sold of which the salespersons received only 30 percent and the closer received 5 percent 450 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD be selected for Sunday and holiday work by inverse se- niority. Hoyt rejected this proposal, stating Respondent needed the flexibility to employ more than 10 because Sunday and holidays were big sale days and, with re- spect to Bullen's inverse seniority suggestion, stated it would be too difficult to administer because salespersons very frequently had intermittent employment with Re- spondent, which made it difficult to determine their rela- tive seniority dates. Bullen asked Hoyt to consider his proposal and Hoyt stated she would consider it. On the subject of the pack, Bullen stated Respondent's proposed pack was too high. Hoyt replied that the pack, which took into account the Respondent's expenses in preparing the motor vehicle for sale, had been increased in order to cover Respondent's increased cost in prepar- ing a motor vehicle for sale. Bullen proposed a change in the pack from the Union's December 23 proposal. The record is not clear regarding the content of the propos- al.44 On the subject of Respondent's right to discharge em- ployees, Bullen proposed that the parties include a clause in the agreement permitting Respondent to discharge em- ployees for "just cause." Hoyt rejected this and stated that Respondent's only concern was to be able to termi- nate employees for lack of productivity and for other conduct that was really outrageous such as theft or fight- ing and that a "just cause" provision would pose prob- lems. During this meeting, Bullen proposed and Hoyt agreed to extend the existing agreement on a day-by-day basis with the understanding that the party who wished to ter- minate the agreement would give 72 hours' notice to the other party of its intent to terminate the agreement.45 The January 13 meeting ended with Bullen indicating he was involved in several different negotiations and be- cause of this might find it difficult to schedule further ne- gotiations and asked if Hoyt could work around his schedule. Hoyt stated she was flexible regarding when and where to meet and stated she would even meet at Bullen's office in Sacramento, California, if it was more convenient for him. They agreed to resume negotiations on January 21 and 22, 1987. d. The January 21, 1987 negotiating session The negotiators at the next negotiation session,. held on January 21, 1987, continued their review of Respondent's January 5 contract proposal, where they had left off at the end of the January 13 bargaining session. Also Re- spondent gave the Union another written proposal, this one involving those portions of Respondent's January 5 contract proposal that had been reviewed at the January 44 In its December 23 proposal the Union proposed that the pack for domestic motor vehicles be 1 percent and for imports 2 percent. Sal- varessa testified that during the January 13 session the Union increased these percentages by one-half percent, whereas Bullen testified the Union increased its proposal on the domestic pack by three-fourths percent and that its proposal for imports remained the same. 45 I recognize that Hoyt at one point during the hearing, while at counsel table, stated she did not recall agreeing to give 72 hours' notifica- tion of Respondent's intent to terminate the agreement. However, when she testified under oath she did not refute Bullen's testimony that she in effect agreed to give such notice. Bullen's testimony was corroborated in significant respect by Salvaressa's. 13 bargaining session. It was either at this meeting or the next one that Union Representative Kendricks furnished Hoyt with the cost information about the current agree- ment's health and welfare program. However, Kendricks only provided cost information for 1 year and because Respondent was proposing a 3-year contract, Hoyt asked him to get cost information for the remaining 2 years. Kendricks stated he would try to get this information, 'Also, during this meeting, Bullen for the first time indi- cated that until the Union could determine whether, as Respondent claimed, it was in financial difficulty, the Union felt that discussion concerning economic items should be placed on hold. An examination of Respondent's written proposal given to the Union's negotiators on January 21, a propos- al involving those parts of its January 5 proposal, which had been reviewed at the January 13 negotiating session, reveals Respondent made significant changes in its Janu- ary 5 proposal, only in these respects: (1) in its January 5 proposal Respondent proposed that employees' working hours on Monday through Friday be 8:30 a.m. to 9. p.m., whereas its January 21 proposal changed the 8:30 a.m. starting time to 9 a.m.; (2) the January 5 proposal pro- vided that the employees' regular workweek was Monday through Friday, Tuesday through Saturday, or Wednesday through Sunday, whereas the January 21 proposal changed this to Monday through Sunday and also added the proviso that each employee shall have 1 full day off each week; (3) the January 5 proposal on the subject of commissions proposed a 25-percent commis- sion for 1 through 10 monthly sales; 30 percent for 11 through 15, 35 percent for 16 or more monthly sales, whereas in its January 21 proposal Respondent proposed a 25-percent commission for a 1 through 9 monthly sales, 30 percent for 10 through 14 monthly sales, and 35 per- cent for 15 or more monthly sales; (4) the January 5 pro- posal provided for a 4-percent pack on all new motor ve- hicles, domestic or foreign, whereas the January 21 pro- posal provided for a 3.75-percent pack on the sale of do- mestic vehicles; and (5) whereas the January 5 proposal deleted the contract provision concerning the right of a salesperson to shop a trade, the January 21 proposal pro- vided that a salesperson had the right to shop a trade for a 48-hour period after he or she closed the deal, with the proviso that the salesperson must possess a specified amount of liability insurance to cover his or her driving of the vehicle while shopping the trade. In reviewing the remainder of Respondent's January 5 and January 21 proposals, the parties' negotiators during the January 21 negotiating session engaged in the follow- ing discussions. On the subject of Respondent's proposal to delete the demonstrator provision in the existing agreement, Gener- al Manager Lane informed Bullen that Respondent could not afford to pay for the cost of the demonstrators be- cause its insurance costs for the demonstrators had tri- pled to approximately $10,000 a month and it was diffi- cult to sell the demonstrators, which were in poor condi- tion after being driven by salespersons. Lane also noted that some of the salespersons did not have automobile in- surance and the driver's licenses of others had been re- HAYWARD DODGE yoked Hoyt stated that when she reviewed the Union s contracts with other employees she had noticed that some of the contracts did not include a demonstrator program for the employees and stated Respondent could not afford such a program On the subject of Respondents proposal to delete the charity provision in the existing agreement , Hoyt asked why this provision was in the agreement Kendricks ex plained that employers would sometimes coerce employ ees to contribute money to the employers favorite char ities Hoyt suggested that the Union draft specific Ian guage that dealt with this problem Such language was proposed by the Union s negotiators and accepted by Hoyt Regarding vacations, Hoyt stated she had two prob lems with the Union s vacation proposal First it in creased the Respondents cost by adding an additional week of vacation for the more senior employees and second it calculated vacation pay on the basis of a per centage of the employees yearly earnings, which was not acceptable to Respondent because by using this method of computation, it was impossible for Respond ent to figure its vacation costs Also, Hoyt explained Re spondent did not feel it was right for an employee who was terminated prior to the end of the month to be given vacation pay for the full month and Respondent was proposing to just pay for the last full month in which the employee worked On the subject on Respondents proposal to delete the provision that provided health and welfare benefits for retired workers, Hoyt stated Respondents reason for de leting it was that it was a cost item that was not included in other Union contracts The Union s negotiators stated this provision had to be in the contract On the subject of the beginner salespersons classifica tion, the Union s negotiators proposed that a beginner salesperson be defined as any employee hired with less than 6 months of industry experience or has more than 5 consecutive years of break in the automobile sales indus try On the subject of Respondents proposal to be allowed to schedule 1 special event a month or 12 a year with unlimited hours the Union countered with a proposal for 1 special event per quarter or 4 a year with Respondent being allowed to remain open until 10 p in on the week end of each special event Regarding Respondents most favored nation clause Bullen stated the Union was adamantly opposed to it and would not under any circumstance agree to it Hoyt ex plained Respondent needed the provision because if an other dealership got a better deal from the Union than Respondent Respondent wanted the same deal On the subject of Respondents proposal making Sunday work part of the employees regular workweek, the Union took the position that Sunday would continue, as under the existing agreement to be a voluntary work day e The January 22 1987 bargaining session During the January 22 bargaining session Respondent gave the Union a written proposal covering those parts of Respondents January 5 proposal that had been re 451 viewed at the January 21 session An examination of this proposal reveals Respondent changed its January 5 pro posal, only in these respects its January 5 proposal de fined a beginner salesperson as an employee not em ployed by Respondent for 6 months continuously within the past 3 years of date of hire, whereas the January 22 proposal changed this to within the past 2 years of date of hire and, its January 5 proposal defined fleet buyer as a customer who was issued a bona fide fleet number by a manufacturer, whereas in its January 22 proposal, in response to the Union's concern that its January 5 pro posal could encompass individual buyers, Respondent re defined fleet buyer as being a business whether a sole proprietorship firm partnership or corporation, with a bona fide fleet number issued by a manufacturer Also, at the January 22 bargaining session, the Union submitted a written proposal dealing with seniority ter mination, grievance arbitration, sales meetings held during employees days off and Sunday and holiday work The terms of this proposal and what was said about them follow The parties current agreement did not include any kind of a seniority provision The Union s January 22 se niority proposal defined how seniority was to be com puted and provided in substance that employees laid off for lack of work would be laid off and recalled by se niority Hoyt stated this provision, which was apparently taken from a union contract in another industry, would not work in the automobile sales industry In its January 22 proposal involving employees termi nation, the Union proposed in substance to limit termina tions for just cause' to establish a system of progres sive discipline before an employee could be discharged for absenteeism or for unsatisfactory work performance and obligated Respondent on request, to furnish the ter mmated employee with a written reason for his or her termination limited when during the workweek Re spondent could layoff or terminate an employee for in competence required Respondent to notify the Union in writing when it terminated an employee required that a discharged employee file a grievance with the Union within 7 days from the date of discharge and gave the Union 14 days in which to file a grievance protesting the discharge This proposal also required employees who quit to give 2 weeks notice of their intention to quit and that employees who quit or were terminated were to be paid all the moneys Respondent owed to them The negotiators reviewed the Union s above described termination proposal and Hoyt pointed out there was no just cause provision for terminations in the parties ex isting agreement nor in any contract that the Union had with an employer in the automobile industry and stated Respondent did not intend to have it in its agreement Also at this point there was discussion concerning Re spondent s proposal to terminate salespersons who sold no more than 10 motor vehicles a month In this regard Hoyt stated if there was going to be a contract provision dealing with discharging employees for incompetency that Respondent wanted it to be worded in terms of em ployee productivity because that was Respondents main concern Regarding the requirement that employees give 452 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD notice before quitting Hoyt stated it was a fine proposal but she did not think it would work in the automobile sales industry and regarding the proposal that Respond ent pay the moneys it owed to terminated employees, Hoyt stated this was what Respondent was required to do by law and she had no problem with such a provi sion Hoyt also stated she would consider the other parts of the Union s January 22 termination proposal The negotiators discussed the Union s proposed grievance/arbitration provision at length, and eventually agreed that Hoyt would take the Respondents and the Union s proposals on the subject and try to combine them into a proposal acceptable to everyone The Union s January 22 proposal concerning salesper sons coming to sales meeting on their days off provided in substance that employees required to attend any meet ings on his or her day off would be compensated $25 if they lived between 0-15 miles from the dealership and as much as $50 if they lived 50 miles or more from the dealership, and paid various other amounts between $25 and $50 if they lived between 15 and 50 miles away 46 There is no evidence that the parties discussed this pro posal The Union s January 22 proposal concerning Sunday and holiday work permitted Respondent to schedule a minimum of 10 salespersons on Sundays, as opposed to 8 under the existing agreement, and permitted the schedul ing of a minimum 10 salespersons on Memorial Day, In dependence Day, and Labor Day as opposed to 8 under the existing agreement, and further provided that if an insufficient number of salespersons volunteered for Sunday or holiday work that Respondent would sched ule the necessary number of employees for Sundays and holidays by inverse seniority-the least senior to be scheduled first-and also provided that volunteers would be able to request specific shifts by seniority for Sunday and holiday work There is no evidence that the parties discussed this proposal I note that under the existing agreement Sunday work was optional for employees as was work on those three holidays that under the agree ment Respondent was permitted to operate As de scribed supra Respondent in its January 5 proposal had proposed that Sundays and all holidays be part of the employees regular work schedule and that Respondent be allowed to remain open on virtually every holiday During this meeting Bullen requested that all monetary or economic items be placed on hold until the Union was furnished with information about the state of Respond ent s financial condition, and asked if Respondent would open its books for the Union to look at Hoyt agreed to do this but stated she wanted someone who was quali fled to analyze the financial statements of an automobile dealership Bullen stated the Union would attempt to employ Harry Polland to examine Respondents books Hoyt stated that Polland would be acceptable The parties agreed to resume negotiations on January 27 and 28 and agreed to a series of four more negotiation meetings to be held in February 1987 Also toward the end of the meeting Hoyt asked Bullen to supply her 46 Respondents January 5 proposal required off duty salespersons to attend meetings on their days off without compensation with a complete union counterproposal in writing and do this prior to the scheduled January 27 meeting Bullen agreed to draft such a proposal and suggested that Hoyt come to his office in the Sacramento area on January 26 to pick up the proposal and at that time they could review it together and he would answer her questions Hoyt agreed f The January 28 1987 negotiating session On January 26 Hoyt drove the approximately 90 miles to Bullen s office and was given the union proposal that Bullen had drafted but was informed by his secretary that he was at a meeting and would not be able to meet with her that evening to discuss the proposal Also at that time Hoyt was notified that Bullen would be unable to meet the next day so the meeting scheduled for Janu ary 27 was canceled and the next bargaining session took place on January 28, as previously scheduled by the par ties The Union s January 26 written proposal was not in fact a proposal It was a recapitulation of what the Union believed was the state of the negotiations items the parties had agreed on, disagreed on, those on hold and those withdrawn The January 28 bargaining session was an all day ses lion Respondent submitted its written response to the proposals that had been made by the Union during the January 22 bargaining session and modified its January 22 proposal in certain respects Hoyt told the union negotiators that to meet the Unions concern about Respondents proposal concerning increased employee working hours Respondent was pro posing the following If a salesperson asked for permis sion to leave prior to his or her work shift and if business was slow Respondent would not be unreasonable in de ciding whether to permit the salesperson to leave early if requests for additional days off were submitted at least 10 days prior to the dates requested Respondent would consider such requests and not act unreasonably in deny ing them and Respondent would post employees work schedules no later than Friday of the preceding work week 47 Hoyt also told the union negotiators Respondent would agree to the union proposal that Respondent shall adjust floor time including Friday weekend and holiday work if it was qualified by a proviso reading so that all employees shall have equal opportunity, rather than equal advantage, as proposed by the Union Bullen stated he thought this would be accepta ble but wanted to check with Union President Sal varessa Eventually the parties reached agreement on that proposal Regarding Respondents written response to the Union s January 22 proposals Respondent rejected the Union s seniority proposal proposed that Respondent be permitted to terminate employees for cause rather than just cause as proposed by the Union rejected the pro posals concerning the progressive system of disciplinary warnings and the proposal that employees be furnished 47 This latter proposal was a part of the existing agreement but had been deleted by Respondent in its January 5 proposal HAYWARD DODGE the reason in writing for their terminations rejected the proposal that laid off employees or those discharged for lack of competency be terminated only at the end of the workweek rejected the proposal that within 7 days of terminating an employee Respondent was obliged to fur nish the Union notice of said termination accepted the proposal that employees who quit or were terminated be promptly paid all moneys owed by Respondent accepted the proposal concerning the 7 and 14 day time limita tions on the filing of discharge grievances, and accepted the proposal that employees who intended to quit give 2 weeks notice to Respondent, but proposed that Re spondent be allowed to accept such notice immediately Regarding the Union s January 22 grievance arbitra tion proposal Respondent rejected certain provisions, ac cepted others, and proposed that the liquidated damages and claims limitations provisions in the 1984-1986 agree ment be made an integral part of the grievance arbitra tion procedure, and proposed that the arbitrators author ity to award backpay be limited to no more than 60 days In its January 5 proposal Respondent had proposed a 30 day backpay limitation On the subject of Sunday and holiday work, Hoyt told the union negotiators Respondent rejected the union pro posal, which would have permitted Respondent to schedule a minimum of 10 salesperson on Sunday and holidays and to use inverse seniority to schedule sales persons on those days if there were insufficient volun teers In its January 5 proposal Respondent had proposed that Sundays and holidays be made a part of the employ ees regular workweek On the subject of employees attendance at meetings called by Respondent during their days off Respondent which had previously proposed that off duty employees be required to attend such meetings without compensa tion now proposed they be compensated $20 The Union countered with a proposal that Respondent pay them $30 if they were required to come to the dealership for such a meeting more than once in a 4 week period 48 Hoyt stated Respondent would consider this proposal Regarding health welfare and pension benefits and the cost of such benefits to Respondent, the existing agreement provided for parity with the health welfare and pension provisions contained in Respondents con tract with the Machinists Union the union that repre sented Respondents shop employees Hoyt had previous ly asked the Union to furnish her with information about the costs of the health and welfare benefits provided for under the Machinists Union contract and during the Jan uary 22 negotiating session was furnished this informa tion for the next 1 1/2 years Based on this information and the fact Respondent knew its cost for pension bene fits under the Machinists Union contract was $165 a month per employee Respondent in its January 28 pro posal made the following health welfare, and pension proposals Employer Proposal on Health & Welfare Cost of Kaiser Health Plan SS-Pension Maintain Cur 46 As noted supra the Union previously proposed that if off duty em ployees were required to come to the dealership for meetings on their days off they be compensated anywhere from $25 to $50 depending on the distance of their residences from the dealership 453 rent Contribution Rate There is no evidence that this proposal was discussed during this meeting However Hoyt testified in effect that Respondents January 28 health and welfare proposal provided for substantially less benefits for the employees than were being received under the 1984-1986 agreement g The February 9 1987 inspection of Respondents books and records As noted supra during the January 22 bargaining ses sion Hoyt agreed to open Respondents books and records for the Union s inspection so that the Union could determine whether, as Respondent claimed it was losing money The parties also agreed to delay any fur ther negotiation on economic items until after the Union inspected Respondents books and records Hoyt was ad vised by Union Representative Kendricks that the Union had employed Harry Polland to review Respondent s books and records and gave Hoyt his telephone number Subsequently Hoyt tried unsuccessfully to contact Pol land by telephone in an effort to arrange for him to visit Respondent s premises to conduct his inspection During the January 28 negotiating session, Hoyt told Kendricks about her lack of success in having Polland return her telephone calls Kendricks contacted Polland and told Hoyt that Polland said he was too busy to review Re spondent s books and suggested to Kendricks that Debra McEwan, a certified public accountant, do the review Kendricks gave Hoyt McEwan s telephone number One or two days later Hoyt telephoned McEwan and they agreed that McEwan would visit Respondents premises on February 9, 1987, at 10 am to review Respondent s books and records and that prior to that date McEwan would write Hoyt describing what books and records she needed to conduct her review On February 2, 1987, McEwan wrote Hoyt and described the books and records she needed Hoyt gave the letter to Respondent s business manager, Janice Peterson, with instructions to make the records available On February 9, McEwan with an associate visited Re spondent s facility and reviewed the books and records provided by Respondent All the books and records re quested by McEwan which existed, were furnished except for some of Respondents Department of Motor Vehicle sales records, which were not available at the time and Respondents payroll tax and income tax re ports which were at the facility of Respondent s parent company, the Tasha Corporation When advised of the missing materials McEwan stated she would do the best she could with the information available but indicated she would not be able to do as thorough an analysis of Respondents financial situation as would have been the case if the missing records were available Neither at the time nor at any other time did McEwan or any repre sentative of the Union ask that arrangements be made for McEwan to review the missing documents McEwan and her associates spent approximately 4 1/2 hours at Re spondent s facility on February 5 reviewing Respond ent s books and records Based on her February 9 inspection of Respondent s books and records McEwan advised Union Business 454 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Representative Kendricks as follows Respondents fi nancial statement for the calendar year 1986 showed a profit of $116 054, certain items listed as expenses in Re spondent s books of account were not justified certain other items listed as expenses in Respondents books of account were not really expenses, certain sums of money mentioned in Respondents books of account should have been treated as income but were not, and that during 1986 Respondent lost $250 000 of sales during the period it was in the process of moving its facility, which would not occur in 1987 In view of the aforesaid circum stances, McEwan told Kendricks that realistically it could be said Respondent had made a profit of $697 432 in 1986 and that in her opinion Respondent was not in any financial difficulty h Respondents financial situation In 1985 Respondent had a before tax profit of $327 127 In 1986 Respondent had a before tax loss of $462 194 In 1987 Respondent had a before tax loss of ap proximately $757 688 Respondent in fact lost substantial ly more than this in 1987 because, apparently due to Re spondent s poor financial condition Respondent s parent company, the Tasha Corporation excused Respondent s debts for rent, management fees, legal fees and property taxes totally almost $500,000 which had been paid in 1987 by Tasha on behalf of Respondent The above described profit and loss figures are based on the testimony of Steven Bonovich a certified public accountant, who has regularly audited Respondent s books of account for the past several years His testimo ny was based on Respondents books of account and fi nancial statements which, when he testified were present in the hearing room in the possession of the General Counsel and the Charging Party His testimony was not challenged Under the circumstances I infer that the records would have supported his testimony There is no evidence to support McEwan s testimony that Respond ent s financial statement for the calendar year 1986 showed that it made a profit of $116 054 McEwan was not asked to explain the basis for this testimony and no financial statement was produced to support her testimo ny Quite the opposite Respondents financial statements for 1986 as Bonovich testified reveal that it suffered a before tax loss of $462 194 McEwan s testimony that certain expense items in Re spondent s books of account were not really expenses or were not justified and her testimony that certain sums of money should have been treated in Respondents books of account as income was refuted by the credible testi mony of Bonovich who convincingly demonstrated that each of the items referred to by McEwan had been prop erly and justifiably treated as an expense in Respondent s books of account and that the moneys referred to by McEwan had been properly not treated as income Regarding McEwan s assertion that Respondent lost $250,000 in sales during the move of its facility in 1986, Bonovich testified there was nothing in Respondent s books and records or the circumstances of the move that supported such an assertion McEwan testified that her conclusion Respondent lost $250 000 in sales during its move was not based on Respondents books and records but that during her February 9 visit to the dealership an unidentified man whom she testified was with manage ment of some form, told her that they lost $250 000 during this year because of the move Respondents books of account show that its sales in 1986 totaled approximately $1 5 million less than in 1985 The record does not contain dollar sales figures for 1987, however, it is apparent from the number of cars sold by Respondent in 1987 as compared to 1985 and 1986 that this downward trend in sales income continued in 1987 Thus in 1985 Respondent sold 2686 motor vehicles, in 1986 it sold 2383 motor vehicles and in 1987 it sold 1966 motor vehicles The record reveals that throughout the year on both a daily and monthly basis Respondent is aware of the fi nancial state of its business It receives daily reports, which show its sales, gross profits on sales and the number of cars sold and receives a monthly financial statement that indicates whether it has been operating at a profit or a loss i The February 10 1987 negotiating session Hoyt at the end of the last negotiating session held January 28, asked Bullen to draft a written contract pro posal to present at the next session scheduled for Febru ary 10 and Bullen replied, 111 see what I can do No such written proposal was presented by Bullen at this meeting The parties at the February 10 negotiating session con tinued to discuss the noneconomic items in dispute By the end of this meeting they had reached substantial agreement on major portions of the grievance arbitration provision except for the time limits for initial filing of grievances and the extent of the arbitrators authority Bullen stated the Union felt the time limits being pro posed by Respondent were too restrictive whereas Hoyt took the position that the lack of time limits in the cur rent agreement has resulted in numerous stale greivances On the subject of the arbitrators authority Hoyt pro posed that all matters be arbitrable whereas Bullen stated the Union wanted certain matters excluded from arbitration Bullen also stated that the Union could not accept Respondents proposed zipper management rights clause and rejected Respondents term of agreement pro posal which in substance provided for a 60-90 day re opening notice and deleted the provision in the exisiting agreement which required that the parties list the par ticular sections of the agreement that they desired to change, when they transmitted their reopening notices Toward the end of this meeting Union Representative Kendricks informed Hoyt of the results of McEwan s February 9 review of Respondents financial records as well as the results of Kendrick s survey concerning the hours of operation of other dealerships doing business in the immediate vicinity of Respondent Kendncks stated he had conducted a survey of the hours of operation of the dealerships doing business in Respondents immediate vicinity He gave Hoyt a copy of the survey, which listed 50 dealerships all of whom were open for business during the same or similar hours as Respondent except for approximately eight, who HAYWARD DODGE were open longer hours The majority of the eight ex ceptions were owned by Respondents parent company Hoyt after reviewing the survey, told Kendricks she was not impressed by it because it did not include all the dealerships in the geographical area from which Re spondent drew its customers but was limited to the area immediately adjacent to Respondents business, thus it did not include all of Respondent 's competitors Hoyt also stated that even if only one of Respondents com petitors was open for extended hours, it adversely affect ed Respondents ability to compete On the subject of McEwan s February 9 review of Re spondent s books and records, Kendricks stated that Re spondent s contention that it had been losing money was not true and advised Hoyt of McEwan s above described conclusion that Respondents financial statement for the year 1986 showed it had made a profit and of her further conclusion that a review of Respondent 's books and records had revealed that the amount of this profit ap peared to have been substantially understated Kendricks stated that McEwan s overall assessment was that Re spondent felt it was not making as much money as it would like to be making Hoyt questioned McEwan s competence , disputed her conclusions , insisted Respond ent was losing money despite what McEwan had con eluded, and stated Respondent could not afford to con tinue to lose money and in order to survive it needed the cutbacks in the existing agreement that had been pro posed j The February 11 1987 negotiating session The February I1 negotiating session began with Hoyt presenting a complete written contract proposal that set forth the items on which tentative agreement had been reached as well as Respondents position on all the unre solved items Bullen later during the meeting verbally modified the Union s position on several disputed items Also, after having considered the Union s new proposals concerning employee compensation Hoyt informed Bullen she felt the Union had not moved sufficiently in that area and as a result negotiations were at dead center and asked the Union to submit another proposal concerning employees compensation Bullen replied he would submit such a proposal at the next negotiating ses Sion Respondent s February 11 proposal modified its prior proposal as follows ( 1) Respondent withdrew its propos al modifying the union security language in the 1984- 1986 agreement (2) Respondent qualified its definition of a beginner salesperson-someone employed less than 6 months by Respondent-with the proviso that Respond ent at is discretion could advance a beginner salesperson to regular salesperson at any time during the 6 month period, (3) Respondents initial proposal deleted the pro vision in the 1984- 1986 agreement that prohibited it from requiring employees to work on the 8 contract holidays and prohibited employees from working on any of those holidays and also deleted the provision in the 1984-1986 agreement that limited the number of employees Re spondent could employ on the day after Thanksgiving, and the days before Christmas and New Years Day whereas Respondent's February 11 proposal reinstated 455 the above described language except for the part that forbade employees from working on any of the contract holidays, and the contract holidays were reduced from 8 to 5 (4) Respondent which previously proposed em ployees be paid $20 for being required to attend sales meetings on their days off, agreed with the Union s pro posal that such employees be paid $30 once every 4 weeks for being required to attend such meetings (5) Re spondent , which previously proposed that all salesper sons receive a 25 percent commission for up to 9 sales a month 30 percent for 10 to 14 monthly sales 35 percent for 15 or more monthly sales, now proposed that the top commission for its regular salespersons be 30 percent for the monthly sale of 10 or more motor vehicles and that beginner salespersons receive a 25 percent commission on all sales, (6) Respondent which previously proposed a 4 percent pack on imported motor vehicles and 3 75 percent on domestic motor vehicles, now proposed to reduce the pack on the sale of domestic motor vehicles to 3 5 percent, (7) the existing agreement contained a scheduled of incentive bonuses for the sale of motor ve hicles that Respondent had proposed to delete in its en tirety, whereas its February 11 proposal contained a $500 incentive bonus for the monthly sale of 15 or more motor vehicles, (8) Respondents proposal that it be per matted to discharge for lack of performance any employ ee who failed to sell 10 motor vehicles a month was changed from 10 to 9 motor vehicles, (9) on the subject of health, welfare, and pension benefits, Respondent s February 11 health and welfare proposal provided for current plans for employees only with co payments on prescription drugs, dental and vision [and ] no life insur ance increase and with respect to pension benefits provided for Respondent to contribute $ 100 per month It is plain that Respondents new pension pro posal was a substantial reduction from its prior proposal of a monthly contribution of $165 and while its new health and welfare benefit proposal was better in some respects than its last proposal it was worse for the em ployees insofar as it expressly stated it did not cover their dependents whereas its prior proposal was ambigu ous in this respect There is no evidence that the parties discussed the subjects of health, welfare or pension ben efits either at this negotiating session or at any of the subsequent negotiating sessions The Union at this negotiating session modified its prior contract proposals , as follows (1) In response to Re spondent s proposals that it be allowed 12 special sales events per year the Union initially countered with 4 and now proposed 5 a year (2) the Union which previously proposed a 30 percent commission for the sale of 1 to 5 motor vehicles a month , 35 percent for 5 through 10 sales, 40 percent for 11 through 15 sales 45 percent for 16 through 20 sales, and 50 percent for 21 or more monthly sales, now proposed a 30 percent commission for 1 through 8 monthly sales 35 percent for 9 through 10 sales and 40 percent for 11 or more monthly sales, (3) the Union which previously proposed a minimum com mission of $200 for each sale, now reduced this to $175, (4) the Union, which previously proposed a 1 percent pack for domestic motor vehicles and a 3 percent pack 456 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD for the sale of imported vehicles, now proposed a 1 75 percent pack for domestic sales and a 2 percent pack for imported car sales, (5) the Union which had previously proposed 1 week paid vacation after 1 year of employ ment computed at 1/52 of the employees prior year earnings, 2 weeks after 2 years computed at 2/52 3 weeks after 3 years computed at 3/52 4 weeks after 5 years at 4/52 and 5 weeks after 7 years at 5/52 now proposed I week of paid vacation after 1 year computed at 1/52 of the employees prior year earnings, 2 weeks after 2 years at 2/52 3 weeks after 5 years at 3/52 4 weeks after 10 years at 4/52, and 5 weeks after 15 years at 5/52 (6) the Union, which previously proposed that journeymen (regular) salespersons received a monthly draw of $2000 and beginners $1500 now proposed $1750 for journeymen and $1250 for beginners, (7) in response to Respondents proposal to delete the provision in the 1984-1986 agreement that required Respondent to fur nish each salesperson with a demonstrator vehicle for $175 a month the Union proposed that in lieu of a dem onstrator vehicle salespersons would receive car ex penses, which would be tied to their productivity, namely if a salesperson sold between I and 8 motor ve hides a month he or she would be paid $175 for car ex penses, $225 for the monthly sale of between 9 and 12 motor vehicles and $275 for the monthly sale of be tween 13 or more motor vehicles (8) in response to Re spondent s proposal that employees receive a $500 incen tive bonus for the monthly sale of 15 or more motor ve hides, the Union proposed they be paid $650 for the sale of 10 or more motor vehicles a month Also during this bargaining session, Hoyt stated Re spondent would agree to a 6 month limitations period for backpay claims-the amount of Respondents backpay obligation under the contractual grievance procedure- rather than the 2 month period it had been proposing provided that the Union agree to delete the liquidated damages provision from the existing agreement Bullen rejected this proposal and stated the Union would be willing to discuss those matters if Respondent agreed to withdraw its proposed most favored nation clause k The February 12 1987 negotiating session Present for Respondent at the next negotiating session held February 12 as its principal negotiator was Hoyt s associate Attorney David Miller who had been present during the February 11 meeting at which time Hoyt ex plained to the union negotiators that he would be Re spondent s negotiator at the February 12 meeting be cause Hoyt due to an emergency would have to be absent The February 12 bargaining session was a continuation of the parties discussion of those portions of the Re spondent s and Union s proposals that had been discussed during the February 11 session No new proposals were submitted by either party Miller stated he would inform Hoyt about what had occurred at the meeting Bullen asked Miller to inform Hoyt that the Union felt there was no justification for the takeways," which Respond ent was proposing because the Union had concluded that Respondent was not losing money as it claimed and that under the circumstances the Union felt the Union s most recent proposals were reasonable and that Hoyt should seriously consider them 1 The February 13 1987 negotiating session The next negotiating session, held February 13, began with Hoyt presenting to Bullen a written contract pro posal entitled Hayward Dodge Bottom Line Proposal which in its preamble stated it represented Respondent s bottom line offer and also stated that Respondent un derstood that at the next negotiation meeting scheduled for February 17 that the Union would present its bottom line proposal and that Respondent would review the Union s proposal in good faith in an effort to reach an agreement The only difference between Respondent s February 13 and February 11 contract proposals was that the February 11 proposal provided for 12 specific sales events a year whereas the February 13 bottom line offer provided for 10 such events Hoyt during this meeting advised Bullen she was un happy about Bullen s failure to submit a new contract proposal at this meeting and advised him that since the Union had given her nothing to work with that the Re spondent s February 13 bottom line offer is the best we came up with and stated she expected a counterpro posal from Bullen at the next negotiating session The sole agreements reached by the parties during this meeting involved two proposals made by the Union, one dealing with no strike and no lockout and the other with that section of the agreement dealing with the term of the agreement and the manner in which the agreement could be reopened for negotiations in The February 17 negotiating session Due to Marcia Hoyt s sudden illness the Respondent s principal negotiator for the greater part of the next nego tiating session held on February 17 was Attorney Ralph Hoyt Hoyt s associate with Hoyt attending part of the meeting The meeting began with the parties resuming their discussion of Respondents February 13 offer where they had left off at their last meeting They had a lengthy discussion about the contractual grievance arbi tration procedure, in particular about Respondent s desire to speed up the grievance arbitration process and its desire to place a limit on its backpay liability under the contract The parties also reviewed Respondent s February 13 proposals in their entirety and during this review the Union indicated that its position on Respond ent s most favored nation clause proposal was a flat ass no and with respect to its proposal dealing with the amount of the employees sales commissions Respondent indicated for the first time that the proposal was meant to encompass both new and used car sales The only changes made by either party in their prior bargaining positions was the Union modified its bargain ing position in two respects It changed its vacation pro posal by dropping the fifth week of vacation it had pro posed for those employees employed 15 or more years and regarding employees' sales commissions proposed that those who sold between 1 and 8 vehicles a month be paid a 30 percent commission, those who sold between 9 and 13 be paid a 35 percent commission and those who HAYWARD DODGE sold 13 or more be paid a 40 percent commission, where as it previously had proposed to pay 35 percent commis sion to those who sold between 9 and 10 vehicles and 40 percent commission for 11 or more vehicles The meeting ended without another meeting being scheduled Rather it ended with Respondents representa tive stating Respondent would draft a final contract pro posal that it would transmit to the Union for submission to the Union s membership to vote on Bullen stated that if the Respondents final contract proposal included the most favored nation proprosal that he would not guaran tee that it would be submitted to the membership for a vote n Respondents February 19 1987 last and final offer' By letter dated February 19, 1987, Hoyt transmitted to Bullen Respondents final offer This document entitled Last and Final Offer of Hayward Dodge stated it was the last final and best offer of the [Respondent] and asked that it be submitted to the bargaining unit employ ees for them to vote on and advised the Union that should this proposal be rejected or otherwise not rati feed, it shall nonetheless be implemented effective March 1, 1987 ' The Respondents February 19 last and final offer was substantially identical to its February 13 proposals in all respects except for the following ( 1) Respondent previ ously had defined beginner salespersons as those not em ployed by Respondent for a period of 6 months of con tinuous employment within the past 2 years of the date of hire or rehire whereas now Respondent proposed that this be changed to 4 months of continuous employment within the past 18 months of the date of hire or rehire (2) Respondent had previously proposed that it be al lowed to schedule 10 special sales events per year with unrestricted hours, whereas it now proposed it be al lowed to schedule 8 special sales events per year with sales hours from 8 a in to 12 p in , (3 ) Respondent previ ously had proposed to delete the section of the 1984- 1986 agreement that provided that no employees shall be required or permitted to spend more than 8 hours at work on any weekday and not more than 9 hours on Sat urday whereas it now proposed that except as otherwise allowed no employee shall be required to spend more than 8 hours at work on Monday through Thursday and Sunday or more than 9 hours on Fridays Saturdays or holidays (4) Respondent previously had proposed that anyone failing to sell 9 or more units per month was sub ject to termination for lack of performance whereas it now proposed to change this to 8 units o Bullen and Hoyt discuss Respondents last and final contract offer It is undisputed that soon after he received the Union s February 19 last and final offer contract offer that Bullen contacted Hoyt and at Bullen s request she agreed not to implement the offer and agreed to a March 16 negotiat mg session Hoyt s testimony concerning her conversations with Bullen which resulted in the March 16 negotiation meet 457 ing, follow Hoyt testified that on February 23 Bullen telephoned her at home during the evening and asked how he could persuade her not to implement Respond ent s last and final contract proposal Hoyt responded by stating that the Union would have to place some propos als on the bargaining table that would enable Respondent to negotiate, that thus far the Union had given Respond ent nothing Hoyt cautioned Bullen not to except much movement from Respondent, explaining that if there was to be any movement it would merely be to rear range the dollars or percentages in the final offer and stated Respondent was the bottom line Hoyt further testified that later the same evening Bullen telephoned again and stated he had spoken to Union President Sal varessa who was off soul searching on the nuts and bolts of the contract, the really hard issues, which Bullen referred to as the Union s sacred cows Hoyt informed Bullen that if the Union gave Respondent something to negotiate on she would consider his request that Respondent not implement the terms of the Febru ary 19 last and final contract offer but otherwise Re spondent intended to implement the terms of that offer The next day according to Hoyt, Bullen informed her he believed there was a possibility for movement in the Union s bargaining position Hoyt replied that under the circumstances she would agree to hold off implementing the Respondents last and final contract offer and agreed to meet for negotiations on March 16 in the presence of a Federal mediator but advised Bullen she expected him to furnish Respondent with a complete written proposal Bullen testified he telephoned Hoyt on February 24 at which time he told her that he did not feel the parties were at an impasse in their negotiations that he felt there was room for further negotiations and that it would be a shame if Respondent went ahead and implemented its last and final contract offer on March 1 because it would throw everything into litigation and ruin the bar gaining atmosphere Bullen further testified he also ad vised Hoyt that Salvaressa was examining the disputed items and was soul searching where he was relative to the scared cows referring to the provisions in the 1984- 1986 agreement that the Union felt were very scared and that Respondent wanted to modify or delete Hoyt, Bullen testified, responded by agreeing not to implement the Respondents last and final contract offer and by agreeing to meet for negotiations on March 16 in the presence of a Federal mediator 49 On February 24 Bullen wrote Hoyt confirming their March 16 negotiation meeting and confirming that Re spondent s February 19 last and final contract offer would not be implemented He ended his letter by stat ing it is our hope that the March 16th neogtiation ses lion will be fruitful and it is our intent to make addi tional movement at that meeting ' On February 26 Hoyt wrote Bullen as follows 49 To the extent Bulllen s testimony can be interpreted as constituting a denial that Hoyt asked him to submit a complete written contract propos al and a denial that Sullen agreed to submit such a proposal I reject Bul len s testimony and credit Hoyt s 458 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD I am writing you so there is no misunderstanding regarding our delaying implementation of our last and final offer We believe an impasse does exist, and please understand that our last offer is just that While there always may be room for slight adjust ment, as I indicated to you by phone, if there is to be any movement, it would merely be to rearrange the dollars or percentages in the final offer Hay ward Dodge is at the bottom line We have had over a dozen negotiating sessions, yet it was not until I advised you that Hayward Dodge would implement its final offer that you stated to me you had Rich really soul searching' on the Union s positions I can only state that I wish this could have occurred earlier on in negotiations In conclusion, I reiterate that for all intents and purposes our last and final offer is on the table, and we are at impasse I agreed to meet with you on March 16 1987 and delay implementing until that time, hoping that the Union can find an agreement can be reached To do so will take significant revi sion to or deletion of those Union sacred cows as you call them Hayward Dodge must be competi tive-both union and non union-and cannot do so with restrictive and non sensical work provisions which the Union has clung to throughout negotia tions I am hoping that this two week hiatus will serve a useful purpose for realistic reflection on your part as to what is needed by Hayward Dodge to remain competitive in this business p The March 16 1987 negotiating session On March 16 the parties negotiators met at Hoyt s office under the supervision of Clarence Washington the Federal mediator The negotiators did not speak directly with one another Rather they met with Washington in different rooms and Washington acted as a conduit The meeting ended with Hoyt and Bullen in Washington s presence, talking briefly Washington initially met with Hoyt and Hoyt ex plained to him Respondent's bargaining position and in the process told him that Respondents bargaining pose tion was firm with respect to its proposals dealing with compensation productivity Sunday and holiday open mg hours of operation grievance/arbitration, the time limits for filing an initial grievance retirees health and welfare, and demonstrators Washington then met with the Union Negotiators Bullen Salvaressa and Kedricks and advised them of Respondents above described position During Washing ton s meeting with the union negotiators, Bullen verbally transmitted proposals to Washington to give to Hoyt Bullen was unable to remember what he said to the me diator in this respect He was only able to remember that the proposals that he gave to Washington covered maybe four or five items Salvaressa s testimony con cerning the proposals that Bullen told Washington to give to Hoyt can only be characterized as vague and evasive and he admitted he had no independent recall of any of the proposals that Bullen transmitted to Washing ton He testified he merely had an idea of some of the issues invovled He then testified that the Union made counterproposals dealing with commissions, monthly draw, and hours of work More specifically he testified that the proposals that Bullen gave to Washington in cluded a two step commission structure of 30 and 35 per cent 5 0 a minimim commission rate of $125 per sale 51 a monthly draw identical to the amounts set forth in the 1984-1986 agreement, S2 and an additional hour of work for Saturday and Sunday in comparison to what was contained in the 1984-1986 agreement But, later in his testimony when asked to state the proposals that Bullen gave to Wahhington to transmit to the Union concerning commissions or hours of work or the draw Salvaressa testified he was not able to remember Considering Salvaressa s admittedly poor memory of what Bullen stated to Washington about the Union's March 16 proposals, considering Salvaressa s vague and evasive testimony on that subject, considering Salvares sa s inability to remember what Bullen said to Washing ton about commissions or the draw, and considering Bill len s inability to corroborate Salvaressa s testimony on the subject of what Bullen stated to Washington con cerning the Union s March 16 proposals, to be unreliable and for this reason I reject his above described testimony in its entirety Federal Mediator Washington, after speaking with the Union s negotiators, returned to the room where Hoyt was waiting and told her that the Union had given him a verbal counterproposal for Hoyt s consideration and communicated the terms of that proposal to Hoyt Hoyt testified that the proposal, as communicated to her by Washington, did not address all the items that were still in dispute, but did include more items than those that Hoyt had previously indicated to Washington that Re spondent was firm about Hoyt testified in effect that the sole change in the Union s March 16 proposal, as submit ted to her by Washington when compared with the Union s prior proposal was that the Union had reduced its vacation proposal by 1 week She testified that when compared with the Union s prior proposal there was very little movement in the March 16 proposed and fur ther testified that the March 16 union proposal did not reflect any movement at all on the disputed items that Hoyt had previously advised the Union that Respondent considered important such as hours of operation holi days compensation productivity and demonstrators The March 16 bargaining session ended with Hoyt and Bullen meeting together briefly with Federal Mediator Washington Washington started the conversation by stating it seemed as though the parties were having prob lems communicating Bullen stated he thought Hoyt had become hostile and that her letter to him of February 26 was hostile Hoyt stated she was upset because Bullen had not as promised submitted a written contract pro 50 The Union s last commission proposal had been 30 percent for monthly sales of I through 8 motor vehicles 35 percent for monthly sales 9 through 10 and 40 percent for the sale of 1 l or more 51 The Union had previously proposed a minimum commission of $175 per sale 52 The 1984- 1986 agreement provided for a monthly draw of $1000 for beginners and $1500 for journeymen The record reveals that the Union s last proposal on this subject was $1250 for beginners and $1750 for jour neymen HAYWARD DODGE posal to her and stated that his failure to do so had hin dered negotiations, and that as far as she was concerned the Union should submit Respondents February 19 last and final contract offer to employees for a vote Bullen stated he did not do this because the proposal included a most favored nation clause He asked Hoyt whether that clause was negotiable Hoyt answered yes 53 Bullen stated he did not intend to negotiate about anything until Hoyt removed the most favored nation clause from Re spondent s last and final contract offer and stated that if Hoyt did this, Bullen would then submit a new proposal dealing with wages, compensation, productivity, and hours Hoyt stated she did not intend to withdraw the most favored nation clause until she could review what Bullen intended to propose Bullen replied by stating he could not allow the employees to vote on Respondent s February 19 last and final contract offer as long as it in cluded the most favored nation clause Hoyt responded by stating that Bullen should either submit a new con tract proposal to Hoyt at this time or submit the Re spondent s last and final contract offer to the employees for a vote Bullen answered, We 11 do what we have to do The meeting ended at this point with Hoyt stating take it back to the membership and let me know what they say No further negotiations were scheduled The above description of Hoyt s March 16 conversa tion with Bullen was based on Hoyt s testimony Bullen s testimony differs in significant respects He testified their conversation took place immediately after the mediator told him Hoyt had stated there were certain areas in which Respondents bargaining position was inflexible He further stated that he and Hoyt discussed these no flex items but was not able to recall which items they discussed He testified that he told Hoyt if Hoyt was prepared to move in certain areas, the Union was pre pared to move in certain areas, but again was unable to remember which areas he mentioned Hoyt, according to Bullen, replied by stating she still had to meet with Re spondent s owner Turian on these heavy issues and stated that the parties still had to address themselves to the subject of the employees' hours of work Bullen testi fled he responded by stating that this subject would be addressed at an appropriate time and that at that time the Union would be able to make some movement in that area and had already made some movement In this last regard he testified he informed Hoyt that the Union s proposal permitting employees to volunteer for Sunday work gave Respondent everything it needed Bullen fur ther testified that during this conversation he advised Hoyt Respondent would have to withdraw its most fa vored nation clause because the Union would never agree to a contract that included such a clause and also indicated to Hoyt that the Union could not move in certain areas Lastly, Bullen testified he advised Hoyt he intended to recommend to the Union that the unit employees not be allowed to vote on Respondents Feb ruary 19 last and final contract offer because there were 53 Hoyt s undemed and credible testimony is that during one of the earlier negotiation meetings held in February 1987 she advised Sullen that the most favored nation clause was something that there was room for movement on or words to that effect 459 certain proposals contained in that offer that would dras tically change the terms and conditions of employment of the employees employed by Respondent and have an adverse effect on the rest of the Union s membership within that geographical area I rejected Bullen s above described testimony and credited Hoyt's version of what occurred because when they testified about that conversation, the testimonial de meanor of Hoyt which was good, was better than Bul len's which was not so good q On March 20 1987 Respondent implements the terms of its last and final contract offer On March 19, 1987, Bullen telephoned Hoyt s office and left a message for her that in substance stated he had not submitted Respondents last and final contract offer to the employees to vote on that because he considered it to be a potentially injurious contract he had sent it to the Union s International Union to determine whether it was permissible to have the employees vote for its ac ceptance, and he did not know when he would hear from the International Union On March 20, 1987, Respondents general manager, Lane, posted a memorandum at the dealership, addressed to all of Respondent s sales employees, which read as fol lows The last and final offer of Hayward Dodge has been implemented effective 12 01 AM March 20, 1987 Hours and days of work will be changed of fective immediately All items affecting compensa tion will be effective April 1, 1987 If you have any questions, ask your union representative That same day Lane notified the Union by letter that this memorandum had been distributed to all of Respondent s sales employees As set forth in the above described memorandum the terms and conditions of employment set forth in Re spondent s February 19, 1987 last and final contract offer were implemented except for Respondents health wel fare, and pension proposals nor did Respondent raise the packs 54 r The April 2 1987 negotiating session On April 2, 1987 at the request of the Federal media tor the parties resumed negotiations Like their last bar gaining session the parties negotiators did not talk face to face rather Federal Mediator Washington met with them separately Also present was Mike Day, the busi ness representative for the Machinists Union the union that represents Respondent's shop employees Day informed Hoyt that the health, welfare, and pen sion provisions contained in Respondents February 19 last and final contract offer could not be accepted by the trust fund that administered those provisions and that parity with the health and welfare provisions contained 54 Respondent was unable to implement its health welfare and pen sion proposals because the trust funds involved refused to accept Re spondent s contribution payments 460 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD in the Machinists Union contract, which was the Union's bargaining position, must include life insurance and or- thodontia benefits. Hoyt modified Respondent's February 19 last and final contract offer by proposing to increase Respondent's health and welfare contribution payments and the bene- fits that such increased payments would provide, to in- clude life insurance and orthodontia benefits, plus other benefits, and, with respect to the pension benefits, pro- posed to increase its monthly contribution payments per employee from $100 to $165 for the first year of the con- tract and proposed to renegotiate that provision after the contract's first year. Hoyt also proposed that the sales- persons currently employed on Respondent's payroll, whether journeymen or beginners, be "red circled" to in- sulate them from the proposed (and in fact already im- plemented) reduction in commissions and reduction in other benefits, including the reduction in health and wel- fare benefits. Hoyt repeated her previous request that Bullen pro- vide Respondent with a complete written contract pro- posal. Bullen agreed to do this. The parties agreed that Hoyt would pick up the Union's written proposal the next day at the Union's office. The meeting ended without another negotiating session being scheduled by the parties or by the Federal media- tor. s. The Union's April 2, 1987 contract proposal On April 3, 1987, as arranged by the parties at the April 2 negotiating session, Respondent transmitted to the Union a written counterproposal in response to the Union's February 19 last and final contract offer. This counterproposal, referred to as the April 2 counterpro- posal, stated that it was being submitted "as a package proposal" and that "if any section is rejected the entire is rejected." In short it was an all-or-nothing proposal. The Union's April 2 counterproposal significantly modified its prior sales commission proposal by calling for a 30-percent commission for all motor vehicles sold regardless of the number sold or whether they were sold by a regular or a beginner salesperson, whereas its prior commission proposal had called for a 30-percent commis- sion for monthly sales of I through 8 motor vehicles, 35- percent for the sales of 9 through 10, and a 40-percent commission for the sale of 11 or more.55 Also the ss I note, as I have found infra, that the Union's April 2 counterpro- posal insofar as it dealt with employee commissions was still far apart from Respondent's proposal on this subject. Thus, Respondent's proposal, which was tied to employee productivity and which differentiated be- tween regular and beginner salespersons, called for regular salespersons to be paid a 25-percent commission for monthly sales of I through 9 motor vehicles and a 30-percent commission for monthly sales of 10 or more, and for beginner salespersons to receive a 25-percent commission on all sales . I also note that becasue the closer received 5 percent of the 35-percent sales commission paid under the 1984- 1986 agreement and be- cause the nonunit employees now doing the work formerly done by the closers no longer received this 5 percent, but are paid a salary by Re- spondent, that the cost to Respondent of the Union's April 2 commission proposal was approximately the same as its cost under the 1984-1986 agreement's provision. Union's April 2 counterproposal withdrew the Union's previous vacation proposal and for the most part accept- ed Respondent's proposal that the vacation provisions of the 1984- 1986 agreement be followed. Likewise, with re- spect to several of the other economic items in dispute, the April 2 counterproposal proposed that the provisions of the 1984-1986 agreement be followed. An examination of the Union's April 2 counterproposal reveals that, for the most part, in those instances where it was proposing that the economic terms of the 1984-1986 agreement be followed, it was either identical or substantially identical to the Union's bargaining position immediately prior to the counterproposal. But, in at least two instances that involve the contract provisions dealing with the pack and incentive bonuses, the Union's April 2 counterpro- posal, by proposing the terms of the prior agreement, sought substantially greater benefits for the employees than had been previously proposed by the Union during the February 11 negotiating session. Also when the April 2 counterproposal is compared with the terms of Re- spondent's February 19 last and final offer, as modified during the April 2 negotiating session, it reveals that the Respondent and the Union were still far apart in their negotiations concerning the following items: The defini- tion of beginner salespersons; employees' working hours including those proposals dealing with holiday and weekend hours; employees' remuneration, including those proposals dealing with commissions for regular and beginner salespersons, minimum commission, pack, right to shop trades, fleet sales, incentive bonuses; demonstra- tors; claims limitation; retiree health and welfare; and the section dealing with the term of the agreement. Also in- asmuch as the Union's April 2 counterproposal rejected outright Respondent's proposed most-favored-nation clause, its zipper/management-rights clause, and its pro- posal giving it the right to discharge employees for lack of performance if they failed to sell a minimum number of motor vehicles each month, it is clear that the parties were still far apart with respect to those items. Hoyt did not respond to the Union's April 2 counter- proposal by arranging for another negotiation meeting nor by communicating with the Union concerning the proposal. She testified that her reason for not responding to the proposal was that the meeting of April 2 ended with the Federal mediator advising her that he would get back to the parties to arrange for another negotiating session, and testified she was waiting for the mediator to schedule another negotiating session. t. The communication between Hoyt and Salvaressa On April 29, 1987, Hoyt and Salvaressa met at Re- spondent's premises, pursuant to Salvaressa's request, to discuss a grievance filed by the Union protesting the ter- mination of 17 employees and the Respondent's unilateral implementation of its February 19 last and final contract offer. During this meeting Hoyt asked whether Sal- varessa had heard from the Federal mediator. Salvaressa stated "no" and stated he thought Hoyt was supposed to contact the mediator. Hoyt replied, "no." There was also a discussion about whether Hoyt had ever notified the Union that she rejected the Union's April 2 counteroffer. HAYWARD DODGE Salvaressa stated Hoyt never rejected the offer Hoyt re plied by stating, Well I in rejecting it now ss On May 26, 1987 during a telephone conversation be tween Hoyt and Salvaressa about Respondents health and welfare contribution payments Salvaressa stated Re spondent was still operating under the terms of the 1984- 1986 agreement and that health and welfare payment contributions were to be made pursuant to the provisions of that agreement Hoyt replied by stating Respondent was not operating under the terms of the 1984-1986 agreement but it had implemented its February 19 last and final contract offer and was operating under the terms of that offer Salvaressa and Hoyt also discussed whether Hoyt had previously advised Salvaressa that Respondent was rejecting the Union s April 2 counter offer Hoyt stated she had told him this during their above described April 20 meeting, whereas Salvaressa denied Hoyt stated this to him at that time On May 27, 1987 Hoyt wrote Salvaressa as follows In reference to our conversation of yesterday s date as I stated to you in the presence of Mark Lane while we met in his office over the outstand ing salesmen s grievances, the last proposal of the Union was rejected I further stated that I had heard nothing further from the Federal Mediator to which you replied that you were going to call him I can only assume that since I still heard nothing from the mediator that you did not attempt to reach Mr Washington Regarding the trust fund payments, I will instruct my client to make payments consistent with our last and final offer to the Trust Funds If the tender of payments is rejected the monies will be placed in an escrow account If coverage of the employees ceases, I will further instruct my client to direct all inquiries to you On May 29, 1987 Salvaressa wrote Hoyt, as follows In response to your letter dated May 27 1987 at no time did you mention to me that the last propos al from the Union was rejected you said that you were waited [sic] to hear from the Federal Mediator for another meeting Regarding the trust fund contributions, as per our conversation 5/26/87 I totally dispute this we are still working under the same agreement and the trust fund contributions remain the same u Silva meets with Turian During the spring of 1987 Fred Silva the Union s re tired president, was asked by International Union Repre sentative Bullen to meet with Hank Turian Respondent s owner in an effort to help the Union negotiate a con tract with Respondent Bullen explained to Silva that the Union s negotiations with Respondent had not made much progress because of Respondents insistence on several takeaways Subsequently Silva met with 56 1 have credited Hoyt s rather than Salvaressa s testimony concern mg this meeting because Hoyt impressed me as the more credible witness I also note that Salvaressa did not specifically deny Hoyt told him at this meeting that she rejected the Union s April 2 counteroffer 461 Turian twice in the summertime (June or July) and in September The summer meeting, a luncheon meeting, was held at a restaurant with only Silva and Turian present Silva indicated he was not sure he knew why the Union s offi cials had asked him to talk with Turian and asked Turian, What s the problem Turian stated that the parties negotiators were having difficulty in reaching a collective bargaining agreement Silva asked if there was anything he could do to help matters Turian stated Silva could help by again becoming union president because in his opinion Silva was a reasonable person to deal with Silva stated he would like to sit down with Turian like in the old days and negotiate the agreement Turian told him he did not think this was possible because things had changed, the economics had changed, that it cost more to operate the dealership now and he had hired an attorney to negotiate for him Silva stated he did not really care to negotiate with lawyers and indicat ed he did not want to negotiate with Respondent s lawyer, Marcia Hoyt because he did not think she was qualified, that he felt she created a lot of problems and was unreasonable Turian replied he was committed to having an attorney negotiate for Respondent and indicat ed he did not like dealing with Union President Sal varessa because of Salvaressa s lack of experience in the automobile sales business Silva tried to persuade Turian to agree to sit down with him and negotiate an agree ment Turian reiterated that things had changed since the days Turian had become personally involved in the ne gotiations with Silva and stated that now he would not sit down with Silva and negotiate unless his attorney was present because he did not know all the facts about the contract, that he just knew the highlights and did not be lieve Silva knew all the facts Turian also stated he did not think Silva had the authority to negotiate on behalf of the Union and indicated he could not negotiate an agreement with Silva unless Silva returned to the Union as president The meeting ended with Silva stating he did not know all the facts concerning the negotiations and would contract Turian again when he learned them The above description of the summer meeting between Turian and Silva is based on Turian s testimony Silva s testimony differs considerably He testified they dis cussed specific items that had been in dispute during the contract negotiations-the most favored nation clause the pack incentive bonuses and demonstrators-and Turian explained that the reason Respondent had pro posed all the so called takeaways was it was losing money and Turian offered to prove this to Silva and the meeting ended with Turian suggesting they meet again approximately in a week or two The September 1987 meeting was also a luncheon meeting Present was Tony Caruso Respondents new general manager who started work for Respondent late in August 1987 As was the case at their first meeting Silva asked Turian to sit down with him like they had done in the past when Silva was union president and ne gotiate an agreement And like the first meeting, Turian explained it was no longer possible for him to personally become involved in the negotiations because the eco 462 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD nomic picture was not the same as it had been in the past, that Respondent was losing money and if Silva wanted to negotiate Silva would have to start from scratch and deal with Respondent's attorneys who were handling the negotiations , that it was not possible for Turian to fire his current negotiators and sit down and make a deal with Silva . When Turian indicated he was firm in not being able to sit down and negotiate an agreement with him, Silva stated the reason the Union had called on him to meet with Turian was to see if he could break the barrier that had developed between Turian and the Union and that Silva really did not know what he was doing talking with. Turian. Silva informed Turian that the Union was adamantly opposed to deleting the demonstrator provision from the parties' agreement , as proposed by Respondent , and also stated the Union would never enter into an agreement with Respondent so long as Respondent continued to insist on a most-favored-nation clause in the agreement. Turian, after Silva explained the meaning of such a clause, stated the Union had contracts with several other dealerships, which differed from his contract to the bene- fit of those dealerships and that Turian did not under- stand why another dealership should get a better con- tract than Respondent and, for that reason , his lawyers were insisting on a most -favored-nation clause in the agreement. Turian also stated that it was not his inten- tion that the most-favored-nation clause prevent the par- ties from reaching an agreement and stated if the Union gave Respondent the economic relief it was demanding, Respondent would withdraw its demand for a most-fa- vored-nation clause . However, Turian was insistent that the rest of the economic proposals included in Respond- ent's final contract offer, especially the commission struc- ture, remain in any agreement reached by the parties in view of the financial losses Respondent had been experi- encing and told Silva that Caruso was coming into the business as a 50-percent partner and it was their intention that in 5 years Caruso would buy out Turian's interest, so it was important that Respondent start making a profit. At one point, when Turian stated Respondent was losing money, Silva remarked that Respondent's most recent general manager, Lane, had not managed the dealership properly. Turian agreed that in the past Re- spondent had employed bad managers and had lost money during Lane's tenure, but stated there was no way Respondent could operate profitably with the con- tract that the Union was proposing. The meeting concluded with Turian stating he would talk to his negotiators and determine whether they could send Silva a contract proposal that did not include the most-favored-nation clause. Silva replied he needed to get additional information about the contract negotia- tions because he did not have all the facts. The above description of the September 1987 meeting between Turian and Silva is based on Turian's testimony. Silva's testimony differs considerably. Silva testified Turian volunteered he had experienced problems with his previous General Manager Lane, who Turian stated "was making statements as, the god damn Union, we gotta get them out of here and you guys . . . won't have a Union." Silva replied that Respondent's present manag- er, Caruso, had made the same statements to employees and that statements like that added "fuel to the fire." Turian replied he would make sure it did not happen again because management should not be telling employ- ees things like that. Silva further testified that he and Turian discussed some of Respondent's contract propos- als which had prevented the parties' negotiators from reaching an agreement and testified Turian explained that these proposals were justified because Respondent was losing money and in support of that assertion gave Silva a financial statement that showed Respondent was losing money, but Silva in effect told Turian he did not believe the financial statement. The meeting ended, according to Silva, with Turian stating Respondent could live without some of the Respondent's contract proposals such as the most-favored-nation clause and the higher pack, and stated he would meet again with Silva in approximately 1 week or so and give Silva a new proposal and stated, "Let's see if we can put this thing to bed." It is undisputed that neither Turian nor any other rep- resentative of Respondent ever thereafter submitted a new contract proposal to either Silva or to the Union. Regarding the above-described meetings between Turian and Silva, I credit Turian's and reject Silva's tes- timony, in each instance where their testimony differs. My reason for doing this is that Turian's testimonial de- meanor was better than Silva's, which was not as good.5 7 v. Hoyt's November 1987 meeting with Bullen In November 1987, after the complaint against Re- spondent issued in this case, counsel for the General Counsel asked Hoyt if there was any possibility of the parties settling this case short of litigation , and when Hoyt stated there might be such a possibility, counsel for the General Counsel arranged for Hoyt and Bullen to meet alone at Hoyt's office. During Hoyt's and Bullen's November 1987 meeting each modified their prior contract proposals to some extent. Hoyt refused, however, to modify Respondent's bargaining position in these respects : Hours of operation; Sunday and holiday openings; its compensation proposals insofar as the proposal tied compensation to productivi- ty; its proposal that it be allowed to discharge employees who failed to sell a certain minimum of motor vehicles; and its proposal that employees not be furnished demon- strator automobiles or a sum of money in lieu of demon- strator automobiles . Bullen also refused to yield on cer- tain disputed items that the Union viewed as "sacred cows," explaining to Hoyt that Union President Sal- varessa was not willing to compromise on any of the dis- 57 I have considered that Caruso testified "yes" when asked whether during the September meeting Turian told Silva, "I 'll get a proposal for you and get back to you." However, this testimony is not inconsistent with Turian's testimony that he advised Silva he would talk to his nego- tiators and determine whether they could send Silva a proposal that did not include the most-favored -nation clause . I also note that the record re- veals that Caruso, who was not a participant in Turian's conversation with Silva, had virtually no memory at all of what they said to one an- other, thus it is not surprising that his recollection of what Turian stated was faulty. HAYWARD DODGE puted items that the Union viewed as sacred cows some of which were being insisted on by Respondent The result was that Hoyt and Bullen were not able to settle the matter w Respondents unilateral changes between late August 1987 and January 1988 As described in detail supra, on March 20, 1987, Re spondent unilaterally changed the terms and conditions of employment of the employees represented by the Union by implementing its last and final contract offer, except for the sections dealing with health and welfare, pensions and packs It is also undisputed that on Septem ber 1, 1987 Respondent unilaterally changed the terms and conditions of employment of its union represented employees, as follows Prior to September 1 pursuant to Respondents ample mented last and final contract offer, regular salespersons received a 25 percent commission for the sale of I through 9 motor vehicles per month, and a 30 percent commission for the sale of 10 or more motor vehicles per month, whereas effective September 1 1987, regular salespersons received a 25 percent commission for the sale of 1 through 8 motor vehicles per month and a 30 percent commission for the sale of 9 or more motor vehi Iles per month Prior to September 1, pursuant to Respondents imple mented last and final contract offer Respondent could discharge a salesperson for failing to sell eight or more motor vehicles a month whereas on September 1 1987, Respondent notified its salespersons that effective that date they could be discharged if they failed to sell nine or more motor vehicles for 2 months in row As I have indicated supra a salespersons commission is based on a percentage of the gross profit of the trans action The term pack refers to the cost of preparing de livering and getting ready the vehicle that is sold In order to compute the salespersons commission the pack, which is a percentage of the vehicles factory invoice, is deducted from Respondents gross profit on the particu lar transaction thus the higher the pack s percentage the lower the salespersons commission Prior to September 1, 1987, Respondents pack for domestic vehicles was 2 percent of the vehicles factory invoice and for imported vehicles was 3 percent of the factory invoice 58 The record also reveals that prior to September 1 besides the 2 percent pack for domestic and the 3 percent pack for imported vehicles, Respondent imposed an additional pack of $152 per vehicle, referred to as the pack on weather and interior guard which the salespersons complained about On September 1 Respondent raised the percentage pack on domestic vehicles from 2 percent to 3 percent and eliminated the additional $152 pack charged the salespersons for weather and interior cherm cal guard The record reveals that as a result of this change in the pack that in some instances the amount of a salespersons commission on a transaction increased, in 58 1 note that even though Respondent s implemented last and final contract offer included a pack of 3 5 percent for domestic vehicles and 4 percent for imported vehicles Respondent did not implement that part of the offer 463 other cases there was no change, and in other cases the salespersons received less of a commission As described in detail supra starting in approximately late January 1987 or early February 1987 Respondent changed from a system of employing two crews of sales persons who worked two shifts a day during the week days to a system of four crews of salespersons who worked staggered shifts on those days However in either December 1987 or January 1988 Respondent went back to a system of employing two crews of salesper sons, one crew worked from 9 am to 3 p in and the other worked the remainder of the workday from 3 to 9 p in, Monday through Friday The work schedule of the two crews was structured so that each Tuesday the salespersons employed on one crew and on each Thurs day the salespersons employed on the other crew were required to work 12 hours a day Previously under the terms of the 1984-1986 agreement and under the terms of the Respondents last and final contract offer imple mented about March 20, 1987 no salesperson was re quired to work more than 8 hours a day on Monday through Thursday It is undisputed that Respondent was open for business on New Years Day in 1988 and that New Years Day was recognized as a legal holiday under both the terms of the 1984-1986 agreement and Respondents last and final contract offer implemented on March 20 1987 However while the 1984-1986 agreement provided that no employee shall be required or permitted to work on the premises of the employer on legal holidays, the Re spondent s March 20, 1987 last and final contract offer specifically deleted that part of the 1984-1986 agreement Under the circumstances the General Counsels conten tion that Respondent unilaterally changed the term and condition of employment by requiring the salespersons to work on New Year's Day in 1988 is without merit In its memo distributed to the salespersons on Septem ber 1, 1987, entitled Economic Proposals to be Imple mented, Respondent indicated it intended to implement certain proposals dealing with among other things the monthly draw it paid to beginner salespersons the com missions it paid to beginner salespersons, the way it pro rated the vacation pay of salespersons who were das charged or quit, the amount of Respondents monthly pension fund contributions the salespersons health bene fits and retired employees health and welfare benefits When the aforesaid proposals are compared with the terms of Respondents February 19, 1987 last and final contract offer which Respondent implemented on March 20, 1987, it reveals there are no differences be tween the aforesaid `Economic Proposals to be Imple mented and Respondents February 19 last and final contract offer Also there is no showing that any of the aforesaid Economic Proposals to be Implemented,' set forth in the September 1 memo to the employees dif fered from the employees terms and conditions of em ployment then in effect Under these circumstances there is no meet to the General Counsels contention that Respondent acted unilaterally on September 1 1987 by implementing a lower commission rate for beginner salespersons by making changes in the benefit pro 464 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD gram," and by "a prorated pay out formula for vacation time of terminated employees." Under the parties' 1984-1986 agreement salespersons who sold 10 motor vehicles in a month received an in- centive bonus of $500 in addition to their regular com- mission; an incentive of $1000 for selling 15 motor vehi- cles a month; and for selling over 15 vehicles a month an additional bonus of $100 per vehicle in excess of 15. Re- spondent eliminated this program of incentive bonuses when about March 20, 1987, it implemented its last and final contract offer, which provided for the salespersons to receive only one incentive bonus and that was a $500 bonus for selling 15 or more vehicles per month. It is un- disputed that from the time Anthony Caruso replaced Lane as Respondent's general manager , late in August 1987 that Respondent did not pay its salespersons the in- centive bonus of $500 when they sold 15 or more motor vehicles per month. The 1984-1986 agreement contained a union-security clause that required employees, as a condition of employ- ment, to join the Union after 30 days of employment. The union-security clause also included a further provi- sion which stated that "[i]n order to assist in the oper- ation of this agreement, it is agreed" that, among other things, Respondent was obligated to notify the Union of the names of employees who quit or were terminated and required that when an employee was hired the em- ployee report immediately to the Union. Respondent's last and final contract offer included the aforesaid provi- sions. It is undisputed that from the date Caruso became Re- spondent's general manager, in late August 1987, he did not notify the Union about the termination of salesper- sons and with respect to new hires, initially Caruso sent all of them to the Union for a referral slip, but in ap- proximately October or November 1987 told the new hires that since Respondent did not have a collective- bargaining contract with the Union that they could use their own discretion whether they wanted to go down and join the Union. Subsequently, in January 1988, ap- parently in response to the Union's threat to discipline employees who worked on legal holidays under the terms of the 1984-1986 agreement, Respondent informed the employees that the 1984-1986 agreement was no longer in effect and because of that the contractual union-security clause was not enforceable, which, Re- spondent told the employees, meant that the Union could not discipline them unless they were union members and Respondent advised the employees that those employees who wished to remain union members should do so and those who chose to withdraw from the Union in order to avoid the possibility of union discipline had the right to take a withdrawal from the Union. As I have described in detail supra, on January 13, 1987, Bullen, the Union's principal negotiator, and Hoyt, Respondent's principal negotiator , agreed that when the 1984-1986 agreement terminated on January 31, 1987, that the parties would extend the agreement on a day-by- day basis, with the further understanding that if one of the parties wanted to terminate the agreement it would give the other party 72 hours' notice of its intent. The General Counsel and the Charging Party urge that the 1984-1986 agreement is still in effect because neither party has given the 72-hour notice of intent to terminate the agreement. This contention borders on the frivolous because by virtue of its February 19, 1987 written notice to the Union of its intent to implement its last and final contract proposal, in the place of the 1984-1986 agree- ment, Respondent effectively gave the Union substantial- ly more than 72 hours' notice of its intention to terminate the 1984-1986 agreement. 2. Discussion a. The alleged bad faith bargaining The complaint alleges and the General Counsel con- tends that, in violation of Section 8(a)(5) and (1) of the Act, Respondent bargained with the Union in bad faith without any intention of reaching an agreement. The law is settled that in determining whether a party has negoti- ated in bad faith without any intention of reaching an agreement, it is necessary to evaluate the entire course of the bargaining and all the relevant circumstances sur- rounding the bargaining. In support of his argument that Respondent engaged in overall bad-faith bargaining, counsel for the General Counsel relies on the following factors: Respondent proposed to eliminate or substantial- ly modify almost every provision of substance in the 1984-1986 agreement, and proposed to eliminate or sub- stantially reduce almost all the employees' economic ben- efits encompassed by the agreement, and proposed other more onerous terms and conditions of employment, and lied when it claimed it made these proposals because it was losing money; Respondent's bargaining position con- cerning health, welfare, and pension benefits is evidence of its overall bad-faith bargaining; Respondent refused to submit a contract proposal to the Union at the parties' first negotiating session, even though Respondent previ- ously had prepared such a proposal for submission; Re- spondent proposed to change sections of the 1984-1986 agreement, which were not listed in its letter notifying the Union of its intention to reopen the agreement for negotiations; Respondent attempted to have a Federal mediator participate in the negotiations from the very be- ginning of the negotiations; Respondent took the position that the negotiations had reached an impasse, even though the Union had just modified its bargaining pro- posals; Respondent's general manager stated he intended to get rid of the Union and blow out the Union; and Re- spondent hired an excessive number of salespersons, in- cluding inexperienced salespersons, in order to discrimi- nate against employees because of their union sympathies and activities. For the reasons set forth below, I find the factors relied on by the General Counsel, when viewed separately or altogether, fail to establish Respondent en- gaged in bad-faith bargaining. Even though Respondent proposed to eliminate or substantially modify almost every provision of substance in the 1984-1986 agreement and to eliminate or, substan- tially reduce almost every economic benefit encompassed by the agreement, and to establish more onerous terms and conditions of employment, this does not, under the circumstances of this case, demonstrate Respondent en- HAYWARD DODGE 465 tered into negotiations with an intent to frustrate the bar gaining process and avoid reaching an agreement with the Union As described in detail supra, all of Respond ent s bargaining proposals those dealing with noneco nomic matters as well as economic ones were based on legitimate business considerations which were explained to the Union In support of its economic proposals, which substantially reduced employees existing wages and benefits Respondent explained it was losing money and competing against employers whose hours of bust ness and workers productivity were not governed by the restrictive terms of the 1984-1986 agreement that its position with respect to grievance and arbitration was prompted by its experience with the stale grievances and other problems generated by the current grievance arbi tration procedure, and that its most favored nation pro posal was prompted by the Union s contracts with other employers containing more favorable provisions than those in the 1984-1986 agreement Respondents explana tion for making these and its other proposals, which ex planation are set forth in detail supra, were all based on legitimate business considerations Nor does the record contain sufficient evidence to refute Respondents expla nations for its various bargaining proposals 59 None of Respondents explanations were so unreasonable or it logical to warrant the conclusion that by offering them Respondent demonstrated an intent to frustrate the bar gaining process and avoid reaching an agreement I also note that Respondents proposal that all the employees currently employed by Respondent would be red cir cled in order to insulate them from Respondents pro posed wage and benefit reductions militates against the inference that the magnitude of the decrease in the em ployees economic benefits proposed by Respondent constitutes evidence of bad faith bargaining It is for all the foregoing reasons that I find the content of Respond ent s bargaining proposals fails to demonstrate Respond ent made those proposals with an intent to frustrate the bargaining process, rather than for a legitimate purpose The evidence pertinent to the General Counsels con tention that Respondents bargaining about employees health and welfare and pension benefits constitutes evi dence of its overall bad faith bargaining is as follows In its January 28 1987 contract proposal Respondent pro posed to pay for the cost of the Kaiser Health Plan SS one of the plans provided for under the health insurance provisions of the 1984-1986 agreement,60 and proposed to maintain the current rate of pension contnbution pay ments which was $165 a month per employee under the terms of the 1984-1986 agreement The parties did not discuss these proposals However Respondents principal negotiator, Hoyt, testified in effect that under the Janu ary 28 health and welfare proposal employees would 59 Respondent did not lie as contended by the General Counsel and the Union when it advised the Union it was losing money The evidence supra, shows that in 1986 Respondent lost over $462 000 and in 1987 lost over $700 000 and in 1986 its total sales of motor vehicles dropped sharp ly from 1985 and in 1987 dropped sharply from 1986 60 The January 28 proposal was silent regarding whether employees dependents were covered by that proposal They were covered under all the health plans provided pursuant to the terms of the 1984 - 1986 agree ment have received substantially less benefits than they were currently receiving under the 1984-1986 agreement be cause the January 28 proposal did not grant employees the life insurance dental vision and prescription drug benefits they were currently receiving On February 11, 1987 Respondent modified its above described January 28 health and welfare and pension proposals It now proposed to reduce its monthly pen sion contribution payments from $165 to $100 per em ployee and to use the $65 taken from the pension contri button payments to increase employees health benefits to include life insurance, dental, vision, and prescription drug benefits This proposal specifically excluded em ployees dependents from the plan s coverage and like the previous proposal granted employees substantially less health benefits than they were receiving under the terms of the 1984-1986 agreement Once again the par ties did not discuss these proposals On April 2, 1987 Respondent modified its above de scribed February 11 health and welfare proposals, by proposing to increase its health and welfare contribution payments and to increase the benefits that the increased contribution payments would provide, to include in creased life insurance and orthodontic benefits as well as other increased health benefits and with respect to pen sion contributions proposed to increase its monthly con tribution payment per employee from $100 to $165 for the first year of the contract and to renegotiate its pen sion proposal after the conclusion of the contract's first year Respondent further proposed that all the employees currently employed would be red circled to insulate them from among other things the proposed reduction in health and welfare benefits 61 As I have found supra Respondent had a legitimate explanation for proposing to reduce employees econom is benefits including health welfare, and pension bene fits When this circumstance is viewed in the context of Respondents efforts to make its health and welfare pro posal more acceptable to the Union by proposing to red circle all of its current employees so they would not suffer a reduction in their benefits and by proposing to maintain the current level of pension contributions for all employees, it is clear that the General Counsel has failed to prove that Respondents bargaining stance about health welfare and pension benefits is evidence that it was bargaining in bad faith with no intention to reach an agreement It is not evidence of bad faith bargaining that during the first bargaining session Respondent refused to submit a contract proposal to the Union until after Respondent first considered the Union s proposal even though Re spondent had previously prepared a contract proposal to submit to the Union It was not unreasonable for Re spondent to first consider the Union s contract proposal and after considering that proposal to revise its already prepared proposal and submit a full and complete con tract proposal at the next bargaining session, rather than Si As I have found supra although Respondent on March 20 1987 on plemented its February 19 1987 last and final contract offer it did not implement the health welfare and pension part of that proposal 466 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD submit the outline of a proposal it had prepared prior to considering the Union's proposal. Likewise it was not evidence of bad -faith bargaining for Respondent to have included among its bargaining proposals changes in sections of the 1984- 1986 agree- ment that were not listed in its letter notifying the Union of its intention to reopen the agreement for negotiations. In this regard , I note the Union's initial contract propos- als, like Respondent's, included changes in sections of the 1984-1986 agreement which were not among the sections listed in the Union's reopening letter, and the Union's re- opening letter, like Respondent's specifically stated the Union reserved the right during contract negotiations to revise, amend, change, or add to the list of changes enu- merated in its reopening letter. In other words, the Union's representatives, as well as Respondent's, inter- preted the 1984-1986 agreement as not limiting negotia- tions to the contract sections specifically designated by the parties in their reopening letters. It was only when the Union's lawyer entered the picture that the Union took this position . Under the circumstances, Respond- ent's interpretation of the 1984-1986 agreement as allow- ing it to propose changes in the sections of the agree- ment not designated in its reopening letter, cannot be viewed as evidence that Respondent was bargaining in bad faith. Also without merit is the General Counsel's contention that Respondent's bad-faith bargaining is evidenced by Hoyt's attempt to have a Federal mediator participate in the negotiations immediately after the initial bargaining session. Hoyt's effort to have a mediator enter the nego- tiations at that time is not type of conduct that consti- tutes an indicia of bad-faith bargaining . This is especially true in the instant case because Hoyt 's reason for asking the mediator to participate in the negotiations was not unreasonable; she thought the negotiations were going to be difficult because of Union President Salvaressa 's refus- al at the first negotiating session to discuss the Union's bargaining proposal with Hoyt and Hoyt's prior experi- ence in negotiating collective-bargaining agreements in- volving the Union was that the negotiations went more smoothly when a mediator was present. Hoyt's position that negotiations had reached an im- passe when Respondent made its February 19, 1987 last and final contract offer, a position she voiced to the Union, may have been premature , when measured against the legal definition of impasse, but there is no evidence that Hoyt was not acting in good faith when she arrived at this conclusion . By February 19 the parties had held 11 negotiating sessions and even though the Union had modified its bargaining position in certain re- spects, the parties were still far apart on virtually each of the several disputed economic proposals that the parties viewed as crucial to a new agreement . What was even more significant from Hoyt's point of view was that the Union by its contract proposals had indicated it was ada- mantly opposed to either eliminating or reducing any of the economic benefits contained in the 1984-1986 agree- ment, except for the possible exception of the provision dealing with incentive bonuses, whereas the essence of the Respondent's bargaining position was that it needed relief from the economic provisions contained in the 1984-1986 agreement because it was losing money and could not compete successfully against some of its com- petitors. However, the Union had ignored Respondent's bargaining position . Rather the Union had informed Re- spondent that because the accountant employed by the Union to review Respondent 's financial records had ad- vised the Union that Respondent was making a profit and that the Respondent's claim that it was losing money was false, the Union did not believe there was a justifica- tion for any of Respondent's proposals that reduced em- ployees' wages and other economic benefits . In view of these circumstances-the parties were not close to reach- ing agreement on any of the disputed economic propos- als and the Union erroneously believed Respondent was operating at a profit and did not need the economic relief it was requesting-its is hardly surprising that Hoyt con- cluded that negotiations had deadlocked . Thus, while Hoyt's conclusion that negotiations had reached an im- passe as early as February 19, 1987, may not have been legally correct, it cannot be said that she was acting in bad faith when she reached this conclusion. Lastly, with respect to the General Counsel 's conten- tions, as I have found supra, there is no credible evi- dence that Respondent 's general manager told employees Respondent intended to get rid of the Union or blow out the Union, and the record fails to establish Respondent hired an excessive number of salespersons, including in- experienced ones, for the purpose of discriminating against employees because of their union sympathies or activities. In evaluating the evidence to determine whether Re- spondent engaged in bad-faith or surface bargaining, be- sides the above-described factors relied on by the Gener- al Counsel , I considered Hoyt's statement to Bullen that Respondent's last and final contract offer was "just that" and that, regardless of any bargaining movement by the Union, Respondent was at the "bottom line " and did not intend to change the terms of that offer. I have also con- sidered that Respondent did not attempt to schedule an- other negotiation meeting after its receipt of the Union's April 2 bargaining proposal, even though that proposal constituted a substantial modification of the Union's prior proposal. Hoyt's statement that Respondent 's February 19 last and final contract offer was the "bottom line" that Re- spondent did not intend to modify, does not warrant the inference Respondent was engaged in unlawful surface or bad-faith bargaining, rather than lawful hard bargain- ing. For to infer from Hoyt's comment that Respondent would refuse to negotiate with the Union even if the Union modified its prior bargaining position, would "lend too close an ear to the bluster and banter of nego- tiations" and "would frustrate the Act's strong policy of fostering free and open communications between the par- ties." Allbritton Communications, 271 NLRB 201, 206 (1984). Regarding Respondent's failure to schedule another negotiating session after its receipt of the Union's April 2 bargaining proposal , which proposal constituted a sub- stantial change from the Union's prior proposal, the record reveals that the April 2 negotiation meeting HAYWARD DODGE ended without another meeting being scheduled and with Hoyt believing that any further negotiation meetings, like the April 2 meeting itself, would be scheduled by the Federal mediator Thereafter Hoyt and Salvaressa en gaged in a dispute over who should contact the Federal mediator to schedule another meeting Hoyt informed Salvaressa that it was Hoyt s understanding from talking with him that Salvaressa was going to call the mediator and that Hoyt assumed because she had still not heard from the mediator that Salvaressa had not attempted to contact him Salvaressa disputed this and told Hoyt that his recollection was that Hoyt had indicated to him she was waiting to hear from the mediator for another meet ing This is where the matter ended, with neither Hoyt nor Salvaressa contacting the mediator to schedule an other meeting In short both parties were equally to blame for the mediator's failure to schedule another meeting In analyzing Respondents conduct to determine whether it was engaged in unlawful bad faith bargaining, rather than lawful hard bargaining, I find it noteworthy that Respondent's conduct in certain significant respects, when viewed in its totality, is more consistent with good faith rather than with bad faith bargaining In this regard, the record reveals Respondent met its bargaining obligation by meeting regularly and frequently with the Union, by presenting numerous written proposals, by ex plainmg and justifying its proposals to the Union, by agreeing to the presence of a Federal mediator to help the parties reach an agreement, and by supplying the Union with requested financial information 62 It is also noteworthy that Respondents approach to bargaining was cooperative in certain significant respects Respond ent provided the requested financial information and bar gaining proposals in a timely manner,63 Respondent at tempted to accommodate the busy negotiating schedule of the Unions principal negotiator 64 Respondents prin cipal negotiator in an effort to move the negotiations along drove the approximately 90 miles to the office of the Union s principal negotiator to pick up a copy of the Union s latest contract proposal and to meet with the Union s negotiator to discuss the contents of that propos al 65 Respondent agreed to extend and in fact extended 82 During the February 9 1987 review by McEwan of the Respond ent s books and records she was supplied with all the books and records she requested which were then available at Respondents facility Nei ther McEwan nor the Union ever asked Respondent to arrange for McEwan to review the records which on February 9 were not available at Respondent facility There is no evidence that such a request would have been futile Rather the record indicates Respondent would have complied with such a request ss Indeed it was Respondent rather than the Union which displayed a sense of urgencj in arranging for the Union s accountant to come to its premises and review its financial records ea As described supra during the January 13 1987 bargaining meeting Sullen indicated he was involved in negotiations involving several other employers and because of this it would be difficult for him to schedule further negotiation meetings with Respondent and asked if Hoyt could work around his busy schedule Hoyt replied she was flexible on where and when she met and stated she would be amenable to meeting at Bul len s office in Sacramento-a distance of approximately 90 miles from Hoyt s office-if that would be more convenient for Bullen 65 I note that when Hoyt arrived at Bullen s office to pick up the Union s contract proposal and meet with him to discuss that proposal she learned Bullen was unable to meet with her and also discovered that 467 the 1984-1986 agreement, when the parties failed to reach agreement on a successor contract by the contrac tual anniversary date, and, pursuant to its agreement to extend the 1984-1986 agreement, Respondent continued to inform newly hired salespersons that they were obli gated to visit and join the Union pursuant to the agree ment s union security clause The aforesaid circum stances, when viewed in their totality, do not portray an employer that was bargaining in bad faith without any intention of reaching an agreement rather they warrant the inference that Respondent was engaged in good faith, albeit hard, bargaining I also note that the record reveals the Union, as well as Respondent, was using hard bargaining tactics Thus, from the start of the negotiations the Union took the po sition that it would not under any circumstances enter into an agreement that included Respondents proposed most favored nation clause 86 And at the March 16, 1987 negotiation meeting, the Union in effect refused to bar gain any further with the Respondent about employees wages, compensation, hours, and productivity unless Re spondent agreed to drop its demand for the most fa vored nation clause Previously the Union had persuaded Respondent to postpone implementing its last and final contract offer by promising Respondent that at the March 16 bargaining session the Union would transmit to Respondent a complete and written contract proposal containing changes from its prior proposal During the March 16 meeting not only did the Union fail to signifi cantly modify its prior contract proposal but also failed to submit a written contract proposal to the Union as promised and, as indicated above, advised the Union it would submit a new bargaining proposal dealing with wages compensation, productivity, and hours only if Re spondent dropped its demand for a most favored nation clause but refused to reveal its new proposal unless Re spondent first committed itself to withdrawing its demand for a most favored nation provision Clearly, to intelligently evaluate the Respondents bargaining post tion and the content of the Respondents bargaining pro posals it is necessary to consider the probable effect on Respondents state of mind of the Unions above de scribed hard bargaining tactics, as well as the effects on Respondents state of mind of the Unions erroneous belief, expressed to Respondents negotiators on several occasions that Respondent was lying when it claimed its business was losing money It is for all the above reasons that after reviewing the entire course of the parties bargaining and the totality of the circumstances surrounding that bargaining I have concluded that Respondent was engaged in good faith, albeit hard, bargaining 67 the contract proposal that Sullen had prepared was not in fact a new proposal but was simply a recapitulation of what the Union believed was the state of the current contract negotiations BB The only explanation that the Union offered to Respondent for its adamant opposition to the most favored nation clause was that the Union s International union would not permit it to accept such a clause 67 Although Respondents illegal unilateral changes found infra might be evidence of bad faith bargaining in other contexts I am of the opinion that the totality of Respondents conduct as described above does not establish an intent not to reach an agreement 468 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD b. The alleged unilateral implementation of the terms of Respondent's last and final contract offer On March 20, 1987, Respondent unilaterally imple- mented the terms of its February 19, 1987 last and final contract offer, except for the provisions dealing with em- ployees' packs and health, welfare, and pension benefits. The General Counsel takes the position, as alleged in the complaint, that by engaging in this unilateral conduct Respondent violated Section 8(a)(5) and (1) of the Act. Respondent's defense is that on March 20, 1987, when it implemented its last and final contract offer, the bargain- ing negotiations were at an impasse. An employer violates his duty to bargain if, when ne- gotiations are sought or are in progress, he unilaterally institutes changes in existing terms and condition of em- ployment. NLRB v. Katz, 369 U.S. 736, 741-743 (1962). The principal exception to this rule occurs when the ne- gotiations reach an impasse. When impasse occurs, the employer is free to implement changes in employment terms unilaterally so long as the changes have been pre- viously offered to the Union during bargaining. Huck Mfg. Co. v. NLRB, 693 F.2d 1176, 1186 (5th Cir. 1982), and cases cited. Because neither party is required to "make concessions or to yield any position fairly main- tained" in collective bargaining (NLRB v. Blevins Pop- corn , 659 F.2d 1173, 1187 (D.C. Cir. 1981)), impasse is "a recurring feature in the bargaining process." Bonanno Linen Service v. NLRB, 454 U.S. 404, 412 (1982). Some of the relevant factors used to determine wheth- er an impasse exists are "the parties' bargaining history, the good faith of the parties in negotiations, the length of negotiations, the importance of the issue or issues as to which there is disagreement [and] the contemporaneous understanding of the parties." :Taft Broadcasting Co., 163 NLRB 475, 478 (1967), affd. sub nom. Television Artists AFTRA, Kansas City Local, 395 F.2d 622 (D.C. Cir. 1968). A genuine impasse in negotiations exists only where the parties have exhausted all avenues for reach- ing agreement and there is "no realistic possibility that continuation of discussion at that time would have been fruitful." Television Artists AFTRA, Kansas City Local v. NLRB, 395 F.2d 622, 628 (D.C. Cir. 1968). There is no impasse where one of the parties makes concessions that are not "trivial or meaningless" (NLRB v. Webb Furni- ture Corp., 366 F.2d 314, 316 (4th Cir. 1966)), for a con- cession by either party "on a significant issue in dispute precludes a finding of impasse even if a wide gap be- tween the parties remains because under such circum- stances there is reason to believe that further bargaining might produce additional movement." Old Man's Home of Philadelphia v. NLRB, 719 F.2d 683, 688 (3d Cir. 1983). The essential question is whether there has been movement sufficient "to open a ray of hope with a real potentiality for agreement if explored in good faith in bargaining sessions." NLRB v. Webb Furniture Corp., supra. Applying the foregoing standards to the instant case, I find that the parties had reached an impasse in their ne- gotiations, when on March 20, 1987 Respondent unilater- ally implemented the terms of its last and final contract offer. This finding is based on the totality of the follow- ing objective considerations. As I have found supra, the evidence does not establish Respondent was engaged in bad-faith bargaining, rather Respondent bargained with the Union in good faith with a sincere desire to reach an agreement . Nor was this a situation where the parties were bargaining for an initial collective-bargaining contract, rather since 1972 they had successfully negotiated several collective-bargaining con- tracts. Early in the negotiations the parties realized the im- portance of Respondent's proposals, which reduced and eliminated employees' current wage and economic bene- fits and added to the agreement a most-favored-nation provision and a provision giving Respondent the right to discharge employees for failing to sell a minimum number of motor vehicles. Respondent placed the Union on notice that it viewed the above-described proposals as having paramount importance to the economic well being of Respondent and that the Union's failure to accept the necessity of such takeaways would deadlock the entire bargaining process. On the other hand, as viewed by the Union and explained by the Union to Re- spondent, Respondent's above-described bargaining pro- posals were unacceptable to the Union because if accept- ed they would mean a serious loss to its members em- ployed by Respondent and would constitute a "potential- ly dangerous" collective-bargaining contract for the Union's membership employed by other employers. In short early in the negotiations both parties realized that agreement would be possible only if they were able to resolve their dispute concerning Respondent's proposed takeaways. At the end of the March 16, 1987 negotiating session, after 12 negotiating sessions, the parties were still far apart on all the significant issues that they realized had to be resolved before an agreement was negotiated. These issues involved Respondent's bargaining proposals dealing with compensation, hours of operation, Sunday and holiday openings, productivity, demonstrator motor vehicles, compensation in lieu of demonstrator motor ve- hicles, and the most-favored-nation provision. Not only was there still an extremely wide gap between the par- ties' bargaining positions concerning all the aforesaid matters, it is significant that a substantial number of the Union's bargaining proposals called for Respondent to increase employees' current economic benefits and, except for the Union's incentive bonus proposal, not one of the Union's proposals accepted the idea of a decrease in any of the employees' current economic benefit. The reason for the disparity between the parties' bargaining positions is that based on the opinion of the accountant it had employed to review the Respondent's business records, the Union thought Respondent's business was making a profit, instead of losing money as claimed by Respondent,68 and based on a survey of Respondent's competitors the Union believed that Respondent's hours of operations, including Sunday's and holiday's, were comparable with Respondent's competition.69 The Union 88 As I have found supra, the Union's belief that Respondent was making a profit and not losing money was erroneous. 89 This survey considered only the employers doing business in the geographical area adjacent to Respondent's business. The Union did not Continued HAYWARD DODGE 469 advised Respondent it did not believe Respondent s claim that it was losing money, but thought it was making a profit, and disbelieved Respondents further claim that it was unable to operate competitively under the terms of the 1984-1986 agreement Respondent re plied that the Union s accountant had misinformed the Union about the state of Respondents financial condi tion that Respondent was losing money despite what the accountant said, and that the Union s survey was mis leading because it did not cover all of Respondents com petition Viewed against this background-the Union s sincere belief that Respondent did not have a legitimate basis for seeking relief from the economic provisions of the 1984-1986 agreement and Respondents equally sin cere belief that it had legitimate reasons for seeking such relief-it is not surprising that the parties as of the start of the March 16 negotiating session had not made any perceptible progress in resolving any one of the disputed contract issues which the parries realized had to be re solved if they were to negotiate a contract The fact that prior to March 16 the parties had modified their respec tive positions in certain insignificant respects, as de scribed in detail supra, did not constitute, under the par ticular circumstances of this case, real progress toward reaching agreement on any of the critical issues This is so because Respondent remained unyielding in its basic bargaining position that in order to operate profitably and competitively it needed relief from the economic terms of the 1984-1986 agreement, whereas the Union remained unyielding in its basic position that no such relief was necessary because Respondent was not losing money as it claimed and was not operating at a com petitive disadvantage as it claimed but was making a substantial profit operating under the terms of the 1984- 1986 agreement In view of the parties above described unyielding bargaining positions the modifications they made in the bargaining proposals prior to March 16, 1987 did not constitute the type of bargaining movement which, when viewed in the context of what occurred on March 16 was reasonably calculated to give the parties hope that continuation of the negotiations following the March 16 negotiation meeting would be fruitful What occurred during the March 16 bargaining session reveals that the parties held irreconcilable positions on all the critical issues that divided them and reveals that there was no reason for either of the parties to reason ably believe a continuation of discussions would have been fruitful In a discussion between Hoyt and Bullen which took place shortly before the March 16 meeting and which concerned Respondents last and final con tract offer, Hoyt told Bullen that Respondent s last and final contract offer was just that and that Respondent believed the negotiations were at an impasse and that to break the impasse the Union at the March 16 meeting would have to submit a new bargaining proposal that showed some movement in the Union s bargaining posi survey the entire geographical area from which Respondent drew its cus tomers I also note that the Unions survey revealed that some of the dealerships located in Respondents immediate geographical area albeit only a few operated for longer hours and had more flexibility to operate on Sundays and holidays than Respondent currently enjoyed under the terms of the 1984-1986 agreement tion involving the critical issues that divided the parties Bullen stated that the Union s president was searching his soul to determine whether or not the Union, so as to reach agreement with Respondent would be willing to sacrifice any of the sacred cows contained in the 1984- 1986 agreement and promised Hoyt that at the March 16 meeting the Union would furnish Hoyt with a written contract offer which that contain proposals showing movement from Respondents previous proposals How ever, despite Bullen s assurances, at the March 16 meet mg the Union did not change its bargaining position as to any one of the critical issues that the parties knew they would have to reach agreement on if they were to negotiate a contract Rather, in response to the Respond ent s last and final contract offer and in response to Hoyt s statement that Respondents bargaining position, as expressed in Respondents last and final offer, was firm with respect to its proposals dealing with compensa tion, productivity, Sunday and holiday openings, hours of operations grievance arbitration the time limits for the filing of an initial grievance, retirees health and we] fare, and demonstrators the Union presented a verbal proposal at the March 16 meeting, which when com pared to the Union s prior contract offer did not make any additional movement on any of the crucial issues in dispute, the only change made by the March 16 proposal in the Union s bargaining position was to reduce its vaca tion demands by 1 week Thus it is not surprising that the March 16 meeting ended with neither party asking for another negotiation meeting and with the Federal mediator not scheduling another bargaining session 70 Any doubt that the negotiations were hopelessly dead locked by the end of the March 16 negotiation meeting is removed by the conversation between Bullen and Hoyt toward the end of the March 16 meeting Bullen in formed Hoyt that the Union did not intend to bargain about anything until Respondent dropped the most fa vored nation clause from its last and final contract offer and stated if Respondent did this the Union would then submit a new proposal dealing with wages, compensa tion productivity and hours Hoyt who previously during the March 16 meeting and at one of the February negotiation meetings had told Bullen that Respondent s most favored nation proposal was a negotiable subject responded to Bullen by stating she did not intend to withdraw the most favored nation proposal until Bullen explained to her what he proposed to offer the Respond ent as a quid pro quo for dropping it Bullen refused to reveal what the Union would propose if Hoyt committed herself to withdrawing the most favored nation proposal Hoyt responded by stating that Bullen should either submit a new proposal right then and there or submit Respondents last and final contract offer to the employ ees for a vote Bullen answered we 11 do what we have to do and on March 19, 1987, in effect informed Hoyt that the Union did not intend to submit a new contract proposal to the Respondent, but was in the process of checking with its International Union to see whether it 70 See NLRB v Cambria Clay Products 215 F 2d 48 55 (6th Cir 1954) (failure of mediator to schedule further negotiation meetings creates an inference of impasse) 470 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD could submit Respondents last and final contract offer to the membership, even though the offer was a potential ly injurious" collective bargaining contract In other words, after advising Respondent that it intended to search its soul to determine whether it should agree to sacrifice any of the sacred cows contained in the 1984- 1986 agreement as the Respondent was proposing in its last and final contract offer, the Union on March 16 re sponded to Respondents last and final contract offer by submitting a contract proposal which did not modify the Union s prior bargaining position with respect to any of the disputed items which the parties regarded as crucial to the negotiations of an agreement This circumstance when viewed in the light of what had occurred during the previous negotiation meetings-after 11 negotiation sessions there was still a wide gap separating the parties on all the issues crucial to the negotiation of an agree ment, there had been insignificant bargaining movement by the parties on those issues prior to the March 16 bar gaining session and the Union sincerely believed that Respondents business was making a profit and that Re spondent had absolutely no justification for any of its to keaway proposals-was reasonably calculated to lead Respondent to believe that negotiations were hopelessly deadlocked Lastly the length of the negotiations here is entirely consistent with an impasse finding It is well settled that parties to negotiations are not required to engage in fruitless marathon discussions at the expense of frank statement during negotiations (NLRB v American Na tional Insurance Co 343 U S 395 404 (1952)), and that there is no rigid formula for assessing how long the par ties must negotiate before impasse occurs Teamsters Local 745 v NLRB, 355 F 2d 842, 845 (D C Cir 1966) Here the parties by the end of the March 16 bargaining session had held 12 bargaining sessions They knew well before the March 16 session which of the disputed eco nomic issues had to be resolved in order for anew bar gaining agreement to be successfully negotiated and by the end of the March 16 session had discussed the essen tial differences in their bargaining positions on numerous occasions But there was simply no way to square the Respondents insistence on wage and benefit takeaways from the existing agreement with the Unions position that no takeaways were justified because Respondent s claims that it was losing money and not operating com petitively under the terms of the 1984-1986 agreement were not true Under these circumstances and consider ing what occurred during the parties March 16 bargain ing session the Respondent at the end of the March 16 session had every reason to reasonably believe that fur ther negotiation meetings with the Union would not break the parties deadlock I have considered that during the April 2 1987 negoti ating session which was called by the Federal mediator that Respondent, as described in detail supra modified its last and final contract offer in certain significant respects and that the next day the Union also modified its bar gaining position in certain significant respects 71 The General Counsel urges that this conduct indicates there was no bargaining impasse on March 20, 1987 when Re spondent unilaterally implemented the terms of its last and final contract offer I do not agree Huck Mfg Co v NLRB, 693 F 2d 1176 (5th Cir 1982), and the other cases cited by the General Counsel, involve situations where the parties to the negotiations engaged in conduct which indicated that further negotiations would be fruit ful and engaged in this conduct before, as well as after the employer s unilateral conduct Here, as I have found supra, the record shows that when Respondent unilater ally implemented the terms of its last and final contract offer on March 20 1987, there was no realistic possibility that continuation of discussion at that time would have been fruitful In view of this circumstance it would be in equitable for me to rely on the Respondents or the Union's postimpasse conduct to find that no impasse oc curred previously Moreover, to rely solely on postim passe conduct to find that no impasse had occurred pre viously would result in an unworkable rule of law be cause it is normal during collective bargaining negotia tions for an impasse to occur and subsequently to be broken and then to recur and to be broken again, and for negotiations to continue in this fashion See Bonanno Linen Service v NLRB 454 U S 404, 412 (1982) (impasse is a recurring feature in the bargaining process ) It is for the reasons set forth above, that I find an im passe in contract negotiations had occurred when on March 20, 1987 Respondent unilaterally changed the terms and conditions of employment of its employees represented by the Union by implementing the terms of its last and final contract offer I further find that these changes had been previously offered to the Union during the bargaining which produced the impasse I find, there fore that Respondent having taken the unilateral action discussed above, did not thereby violate Section 8(a)(5) and (1) of the Act Accordingly, I shall recommend dis missal of the relevant complaint allegations c The alleged unilateral conduct which postdated the unilateral implementation of Respondents last and final contract offer The complaint as amended at the start of the hearing, alleges that since approximately September 1 1987 and continuing to date, Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing the terms and conditions of employment of the employees represented by the Union In support of this allegation the General Counsel presented, as described in detail supra uncontro verted evidence that Respondent during this time period in several respects unilaterally changed the terms and conditions of employment of the employees represented by the Union as follows In late August 1987 stopped paying employees an incentive bonus of $500 for selling 15 or more motor vehicles in late August 1987 stopped notifying the Union of the names of the employees who parties next met Respondent would substantially modify its last and final There is no evidence that during the March 16 negotiating session contract offer or that the Union would also modify its bargaining post that Respondent had any idea that subsequent to that session when the Lion HAYWARD DODGE quit or were discharged ,72 on September 1, 1987, in creased employees commissions from 25 percent to 30 percent for selling 9 motor vehicles per month on Sep tember 1 , 1987, notified employees that if they failed to sell 9 or more motor vehicles in a month they were be paid a 25 percent commission for each motor vehicle sold the following month regardless of the number of ve hicles sold during the second month, whereas previously they were paid a 30 percent commission if they sold 10 or more motor vehicles during the second month on September 1 1987, notified the employees that effective that date they could be discharged for failing to sell 9 or more motor vehicles for 2 months in a row whereas pre viously employees could be discharged for failing to sell 8 or more motor vehicles in a single month on Septem ber 1, 1987 in connection with the computation of em ployees commissions for the sale of domestic motor ve hicles, raised the pack from 2 percent to 3 percent and eliminated the additional pack of $152 charged employ ees for weather and interior guard get ready in Decem ber 1987 or January 1988 began to regularly require em ployees to work 12 hours a day on Tuesday and Thurs day, whereas the employees previously were required to work only 8 hours on those days None of the above described unilateral changes in em ployees terms and conditions of employment had ever been proposed by the Respondent to the Union nor were any of them reasonably comprehended within the terms of Respondents preimpasse last and final contract offer which was as I have found supra , lawfully implemented on March 20, 1987 Under these circumstances by insti tuting each of the above described unilateral changes in the employees terms and conditions of employment, Re spondent violated Section 8(a)(5) and ( 1) of the Act 73 CONCLUSIONS OF LAW 1 Hayward Dodge, Inc, the Respondent is an em ployer engaged in commerce within the meaning of Sec Lion 2(6) and (7) of the Act 2 Automobile Salesmen s Union Local 1095, United Food and Commercial Workers AFL-CIO CLC, the Union is a labor organization within the meaning of Sec tion 2(5) of the Act 3 All full time and regular part time automobile sales persons employed by the Respondent at its Hayward California facility excluding all other employees, guards and supervisors as defined in the Act constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act 72 As noted supra Respondent was obligated to furnish the Union with this information under the terms of the 1984-1986 agreement and by Re spondent s last and final contract proposal which it implemented on March 20 1987 in place of the terms of the 1984-1986 agreement 7 'The General Counsels contention Respondent s abrogation of the contractual union security clause constituted a violation of Sec 8(a)(5) and (1) of the Act is without merit An employers duty to enforce a union security provision is extinguished on the expiration of the contract in which the union security provision was included See Bethlehem Steel Co 136 NLRB 1500 1520 (1962) affd 320 F 2d 615 (3d Cir 1963) Here as I have found supra the parties 1984 1986 agreement expired prior to Respondent s abrogation of the agreement s union security provi sion Accordingly Respondents noncompliance with the union security provision was not unlawful 471 4 Since February 1, 1972, the above named Union has been, and is now, the exclusive representative of all em ployees in the aforesaid bargaining unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act 5 Respondent violated Section 8(a)(5) and (1) of the Act when , without notifying or bargaining with the Union, it unilaterally changed the bargaining unit em ployees terms and conditions of employment as follows In late August 1987 stopped paying employees an incen tive bonus of $500 for selling 15 or more motor vehicles per month , in late August 1987 stopped notifying the Union of the names of the employees who quit or were discharged, on September 1 1987 increased employees commissions from 25 percent to 30 percent for selling 9 motor vehicles per month on September 1, 1987, notified employees that if they did not sell 9 or more motor vehi Iles a month, they would be paid a 25 percent commis sion for each motor vehicle they sold the next month re gardless of the number of vehicles they sold during the second month, on September 1, 1987, in connection with the computation of employees' commissions for the sale of domestic motor vehicles, raised the pack from 2 per cent to 3 percent and eliminated the additional pack of $152, in December 1987 or January 1988 began to regu larly require employees to work 12 hours a day on Tues days and Thursdays 6 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec tion 2(6) and (7) of the Act 7 The Respondent has not otherwise violated the Act REMEDY Having found Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing employees wages, hours, and other terms and conditions of employ ment I shall recommend that it cease and desist there from and take certain affirmative action in order to effec tuate the policies of the Act The remedy should be fash ioned with a view toward restoring the status quo ante which will prevent the Respondent from gaining advan tage by its unfair labor practices and will place the in ,lured parties as nearly as possible in the same position as if the law had been obeyed In this regard , I shall recom mend that Respondent, among other things, on the re quest of the Union revoke until such time as Respondent negotiates with the Union in good faith to agreement or impasse thereon all the unilateral changes that hereto fore in this Decision have been found to have violated the Act and to make the unit employees whole for any financial loss they may have suffered by reason of the aforesaid unilateral change, with interest as prescribed in New Horizons for the Retarded 283 NLRB 1173 (1987) However, nothing here shall be construed as requiring the Respondent to revoke any increases in wages or other benefits it has heretofore granted See Staters John sonville Meats, 174 NLRB 693 (1969) 472 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed74 ORDER The Respondent, Hayward. Dodge, Inc., Hayward, California, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with Automobile Salesmen's Union Local 1095, United Food and Com- mercial Workers, AFL-CIO, CLC, as the representative of the employees in the appropriate unit described below, by unilaterally changing wages, hours, or other terms and conditions of employment of the unit employ- ees. The appropriate unit is as follows: All full-time and regular part-time automobile sales- persons employed by Respondent at its Hayward, California facility, excluding all other employees, guards and supervisors as defined in the Act. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) On the request of the above-named Union, revoke the unlawful unilateral changes in the employees' rates of pay, wages, hours, and other terms and conditions of em- ployment described in this decision, which were placed into effect by Respondent in the appropriate unit, until such time as Respondent negotiates with the Union in good faith to agreement or to impasse. (b) Make whole the employees in the appropriate unit who have been employed during the time material for any loss of pay or other benefits they may have incurred as a result of Respondent's unlawful unilateral changes of the rates of pay, wages, hours, and other terms and con- ditions of employment, which were described in this de- cision, with interest as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987), and continue such payments until such time as Respondent negotiates in good faith with the Union to agreement or to impasse. (c) Preserve and, on request, make available to the Board or its agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (d) Post at its place of business copies of the attached notice marked "Appendix."7:` Copies of said notice, on 74 If no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the finding,, conclusions, and recommended Order shall, as provided in Sec. 102.4.8 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. 75 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of forms provided by the Regional Director for Region 32, after being signed by Respondent's authorized represent- ative, shall be posted by Respondent immediately upon receipt and maintained for 60 consecutive days in con- spicuous places including all places where notices to em- ployees 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 Re- spondent has taken to comply. IT IS FURTHER ORDERED that the complaint allegations not specifically found are dismissed. the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 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 or- dered us to post and abide by this notice. WE WILL NOT refuse to bargain collectively with Automobile Salesmen's Union Local 1095, United Food and Commercial Workers, AFL-CIO, CLC as the repre- sentative of the employees in the appropriate bargaining unit described below, by unilaterally changing the wages, hours, or other terms and conditions of employ- ment of the unit employees. The appropriate bargaining unit is, as follows: All full-time and regular part-time automobile sales- persons employed by us at our Hayward, California facility, excluding all other employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request by the above-named Union, revoke the unlawful unilateral changes in the rates of pay, wages, hours and other terms and conditions of em- ployment which we have instituted in the appropriate bargaining unit, until such time as we negotiate with the Union in good faith to agreement or an impasse in nego- tiations is reached. WE WILL make whole the employees in the appropri- ate bargaining unit for any loss of pay or other benefits they may have suffered as a result of the aforesaid unilat- eral changes, with interest, and continue such payments until such time as we negotiate in good faith with the Union to agreement or to an impasse. HAYWARD DODGE, INC.