Sea Bay Manor Home For Adults

SEA BAY MANOR HOME FOR ADULTS Sea Bay Manor Home for Adults and Local 144, Hotel, Hospital, Nursing Home & Allied Health Services Union, SEIU, AFL-CIO. Case 29-CA-6572 December 15, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On April 10, 1980, Administrative Law Judge Frank H. Itkin issued the atached Decision in this proceeding. Thereafter, the General Counsel and the Charging Party filed exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs, and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. The complaint alleges that Respondent violated Section 8(a) (5) and (1) of the Act by refusing to abide by its signed written agreement with the Union to submit all issues regarding wages, hours, and conditions of employment of its employees to binding arbitration, and by unilaterally changing the wage rates and other terms and conditions of employment of its employees without prior notice to the Union and without affording it an opportuni- ty to bargain concerning such changes. The Ad- ministrative Law Judge concluded that Respondent did not violate the Act as alleged; therefore, he dis- missed the complaint in its entirety. The relevant facts are undisputed. After the Union was certified on June 24, 1977,1 Respondent and the Union engaged in six collective-bargaining sessions. At the first and second bargaining ses- sions, held in August and September 1977, respec- tively, the Union submitted written contract pro- posals to Respondent. Respondent rejected these proposals, contending that it could not afford the provisions regarding wage increases or contribu- tion rates to certain benefit funds. Respondent's contract proposal was rejected by the Union at the third bargaining session in October. At the fourth bargaining session on December 7, Respondent re- jected a further contract proposal submitted by the Union. The Union, at the fifth bargaining session on December 19, proposed binding arbitration for i All dates hereinafter refer to 1977 unless otherwise indicated. "all terms and conditions of [its] proposal." Re- spondent, however, offered instead to increase the employees' wages by $20 per week and to go to fact-finding over its asserted financial inability to meet the Union's contract proposal. At the sixth and final bargaining session on June 7, 1978,2 Re- spondent rejected the Union's new contract pro- posals concerning wage rates and contributions. The parties again considered Respondent's proposal for fact-finding and a $20 increase in wages and the Union's proposal for binding arbitration. Each ini- tially rejected the other's proposal. After extensive discussion, however, Respondent's administrator and its attorney agreed to submit all issues regard- ing wages, hours, and conditions of the bargaining unit employees to binding arbitration. Respondent's attorney then prepared and its administrator signed a "stipulation of agreement" providing for binding arbitration. 3 The agreement further provided that it was to become effective subject only to ratifica- tion by the bargaining unit employees and the ap- proval of the Union's president. Later that same day, Respondent assembled its employees, at which time the Union's representa- tive explained to them "what arbitration would mean" and Respondent's administrator also spoke to them. Thereafter, the administrator left the room and a vote was taken among the employees which resulted in ratification of the parties' agreement. After advising Respondent of the employees' vote, the parties discussed the selection of an arbitrator. Later that evening, the Union's president signed the agreement. Thereafter, by letter dated June 16, 1978, Re- spondent's attorney advised the Union that Re- spondent was withdrawing its agreement to engage in binding arbitration because after "further discus- sion with the owners . . . it has been decided that . . . binding arbitration would be ill advised." The letter further expressed Respondent's preference for fact-finding as being more expeditious and less costly than binding arbitration, and requested the continuation of bargaining and that the Union con- tact it concerning the scheduling of further negoti- ations. The record contains no evidence that the Union made any further attempt to meet with Re- spondent. It is undisputed that Respondent subse- quently implemented its last wage proposal.4 2 The Union and Respondent were unable to meet between December 1977 and June 1978 because of other obligations There is m, allegation that this 6-month delay in resuming bargaining was unlawful 3 The "stipulation of agreement" read, in pertinent part: "[T]he parties hereby agree that all issues regarding the ages, hours, and conditions of employment of the employees of Sea Bay Manor Home for Adults shall be submitted to binding arbitration." ' The complaint, as noted above, alleged that Respondent unilaterally changed wage rates, hours of employment. and other terms and condl- Continued 253 NLRB No. 68 739 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Administrative Law Judge concluded that Respondent's breach of the agreement to submit all issues regarding the wages, hours, and conditions of employment of its employees to binding arbitra- tion was not violative of Section 8(a)(5). He found that under N.L.R.B. v. The Columbus Printing Pressmen & Assistants' Union No. 252, Subordinate to IP & GCU [R. W. Page Corporation], 543 F.2d 1161 (5th Cir. 1976), enfg. 219 NLRB 268 (1975), and N.L.R.B. v. Greensboro Printing Pressmen and Assistants' Union No. 319 [The Greensboro News Company], 549 F.2d 308 (4th Cir. 1977), enfg. 222 NLRB 893 (1976), an "interest arbitration" clause-requiring the parties to submit disputes over new contract terms and proposals to final and binding arbitration-is a permissive, rather than a mandatory subject of collective bargaining under the Act, and that the holdings in those cases were fully applicable here. The Administrative Law Judge, citing Allied Chemical & Alkali Workers of America, Local Union No. I v. Pittsburgh Plate Glass Co., Chemical Division, et al., 404 U.S. 157, 187-188 (1971), further reasoned that the remedy for a unilateral midterm modification of a permis- sive term lies in an action for breach of contract, not in an unfair labor practice proceeding. The Administrative Law Judge also concluded that Respondent's unilateral implementation of its last wage proposal was not unlawful. He found that on June 7, 1978, the date the stipulation agree- ment was executed, the parties were at an impasse since the stipulation agreement recited that "the parties have been unable to reach agreement after a prolonged period of collective negotiations" and that Respondent "had presented to the Union its last and final proposal reflective of the full extent of [its] ability to pay." As additional evidence of the existence of an impasse, the Administrative Law Judge noted that while Respondent's June 16 withdrawal from the stipulation agreement was ac- companied by a request for the continuation of col- lective bargaining, the Union did not pursue this offer. He thus found that, at the time Respondent implemented its last wage proposal, the impasse had not been resolved. Therefore, he concluded that Respondent's unilateral implementation of its "pre-impasse" proposal was not unlawful, citing Taft Broadcasting Co., WDAF AM-FM TV, 163 NLRB 475 (1967). For the reasons set forth below, we find that Respondent violated the Act as al- leged. The Board and the courts have held, as indicated by the Administrative Law Judge, that an interest arbitration clause, in itself, is a nonmandatory sub- tions of employment However, the evidence of unilateral changes here involved only wage rates. ject of bargaining. The cases cited by the Adminis- trative Law Judge involved a party's insistence to impasse on the inclusion in the parties' contract then under negotiation of an interest arbitration clause to apply to future terms and conditions of employment for a subsequent contract. It is clear that this type of interest arbitration clause is too remote from the terms and conditions at issue be- tween the parties at the time to be considered itself a mandatory subject of bargaining. Here, however, we are faced with a unique situa- tion, the resolution of which is not materially aided by the prior cases involving interest arbitration clauses cited by the Administrative Law Judge. Thus, the instant case, in contrast to prior cases, does not involve one party's insistence to impasse on the inclusion of an interest arbitration clause in the contract then under negotiation to be applied in a subsequent contract. Rather, here, the parties, after considerable bargaining over mandatory sub- jects with respect to the contract then under nego- tiation, voluntarily entered into an agreement to re- solve their differences over such terms by submit- ting them to binding arbitration. This agreement expressly was designed to establish all the terms and conditions of employment for the contract then under negotiation. Accordingly, it had an im- mediate and significant effect on the unit employ- ees. In these circumstances the parties' agreement was so intertwined with and inseparable from the mandatory terms and conditions for the contract currently being negotiated as to take on the charac- teristics of the mandatory subjects themselves. Indeed, the stipulation agreement was tantamount to a collective-bargaining agreement between the parties. In short, the Administrative Law Judge erred by attempting to apply to a unique set of facts the holdings of our prior decisions involving interest arbitration. Indeed, were we to adopt the Administrative Law Judge's approach, we would have to divorce the parties' executed agreement from the terms and conditions to which it relates. This we are unwilling to do. We further find that Respondent's repudiation of the stipulation agreement violated its statutory obli- gation to bargain in good faith. Thus, we have held that while a breach of contract is not ipso facto an unfair labor practice, it does not follow from this that when given conduct is of a kind condemned by the Act, it must be ruled out as an unfair labor practice simply because it happens also to be a breach of contract. 5 Further, while the Board does not have general jurisdiction to entertain questions ' C & S Induslries, Inc., 158 NLRB 454, 458 (1966), see also, B. N. Beard Company, 231 NLRB 191 (1977). 740 SEA BAY MANOR HOME FOR ADULTS concerning contract interpretation or to determine the extent of the parties' contractual rights, it is the Board's obligation to protect the process by which employers and unions may reach agreements with respect to terms and conditions of employment.6 And, where the breach of contract substantially in- fringes on the statutory rights of a bargaining rep- resentative or amounts to a substantial renunciation of the principles of collective bargaining, the Board has found a violation of the Act.7 Applying these considerations to the instant case, we conclude that Respondent's breach, without any substantial justification, of the agreement to submit all issues regarding wages, hours, and con- ditions of employment of the unit employees to binding arbitration substantially infringed on the Union's statutory rights. In this regard, the record persuasively demonstrates that the agreement was reached after considerable discussion between the parties concerning mandatory subjects of bargain- ing and that the agreement itself not only was the direct result of the collective-bargaining process but was central to it. Indeed, it was the basis on which that process was concluded. Thus, in the circumstances here, Respondent's failure to adhere to the stipulation agreement, which was so inextri- cably intertwined with mandatory subjects of bar- gaining and which was designed by the parties to have a vital and immediate impact on the employ- ees by establishing their current terms and condi- tions of employment, was tantatmount to the repu- diation of any collective-bargaining agreement. Re- spondent's conduct, therefore, amounted to a rejec- tion of the most basic of collective-bargaining prin- ciples-the acceptance and implementation of the bargain reached during negotiations.8 Accordingly, we conclude that Respondent's conduct constituted more than a mere breach of contract, and that the Board should exercise its jurisdiction to prevent Respondent from refusing to honor the stipulation agreement. To hold otherwise, we believe, would serve to undermine the express and fundamental policy of the Act to encourage the practice and procedure of collective bargaining as an important means for achieving industrial peace and stability. We therefore find that Respondent, by refusing to honor and abide by the stipulation agreement of a N.LR.B. v. C C Plywood Corp.. 385 U.S. 421, 428 (1966) ' See, e.g., Papercraft Corporation, 212 NLRI 240 (1974); Oak Cliff- Golman Baking Company, 207 NLRB 1063 (1973); Nedco Consiruction Corp.., 206 NLRB 150 (1973). 8 The Administrative Law Judge, in finding that Respondent's conduct was not unlawful, relied, in part, on Respondent's willingness to bargain as expressed in its June 16 letter to the Union and the latter's failure o pursue further negotiations. In view of our finding that Respondent's re- pudiation of the stipulation agreement amounted to a rejection of the principles of collective bargaining, any failure by the Union to pursue ne- gotiations was justified. June 7, 1978, violated Section 8(a)(5) and (1) of the Act. 9 As discussed above, the Administrative Law Judge also found that on or about June 7, 1978, the parties had reached an impasse which had not been resolved at the time, when Respondent unilaterally implemented its last wage offer. He, therefore, con- cluded that Respondent's unilateral change in wages was not unlawful. Contrary to the Adminis- trative Law Judge, we find that no genuine im- passe existed between the parties at the time that Respondent implemented the wage increase. Thus, as of June 7, the parties' willingness to arrive at a contract was evident from the fact that they had negotiated and agreed upon a method for resolving their differences over contract terms. Thus, in con- trast to an impasse situation which suggests the fail- ure to arrive at any agreement, here the parties as of that date had entered into an agreement at the conclusion of bargaining which would result in es- tablishing all the terms of their collective-bargain- ing agreement. Nor do we find that a genuine im- passe existed subsequent to June 16 when Respond- ent unilaterally implemented its last wage proposal. As of that time, Respondent, as we have found above, was engaging in an unlawful refusal to bar- gain by refusing to adhere to the stipulation agree- ment. In such circumstances, no legitimate impasse can occur. See Wayne's Olive Knoll Farms, Inc., d/ b/a Wayne's Dairy, 223 NLRB 260, 265 (1976). Ac- cordingly, we conclude that Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing the wage rates of the unit employees. CONCLUSIONS OF LAW 1. The Respondent, Sea Bay Manor Home for Adults, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Local 144, Hotel, Hospital, Nursing Home & Allied Health Services Union, SEIU, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 9 We emphasize that in finding this violation our declsion is a narrow, one limited to the particular and, in our view, unique circumstances of this case In this regard, we again underscore the facts that the stipulation agreement was voluntarily reached after considerable negotiations ox.er mandatory subjects of bargaining, it expressly was designed to establish aol the terms and conditions of employment for the contiact then under negotiation and, therefore, was inextricably intertwined with and insepa rahle from the mandatory subjects of bargaining themselves, and it vass central to the parties' collective bargaining and was the basis on which that process was coicluded In view of these particular factors, we filnd that Piuhidrgh Platir (lah Co,. upru, is inappl.site here lhat case, unlike the inltant case, illsd a midterm modificalion of a single permissivs terrl of a collectise-har- gaininlg agreenlt (rconlcernling benefits fr retired enploycs) which had noi suhstantial impact on ih the trnis ;d conditions of lemployllelit of the active employee, 741 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. All dietary employees, handymen, maids/ aides, service and maintenance employees, atten- dants, porters and receptionists-clerks employed by Respondent at its Brooklyn, New York, facility, ex- clusive of all other employees, watchmen, guards and all supervisors as defined in Section 2(11) of the Act, constitute an appropriate unit for the pur- poses of collective bargaining within the meaning of Section 9(b) of the Act. 4. Since June 24, 1977, the above-named laboi organization has been and now is the certified and exclusive representative of all employees in the aforesaid appropriate unit for the purpose of collec- tive bargaining within the meaning of Section 9(a) of the Act. 5. By refusing to abide by the stipulation agree- ment entered into between it and the Union on June 7, 1978, which provided for the submission to binding arbitration of all issues regarding the wages, hours, and conditions of employment of the unit employees, and by unilaterally changing the wage rates of the unit employees on or about June 16, 1978, in the absence of a genuine impasse in bargaining, Respondent has engaged in, and is en- gaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in unfair labor practices, we shall order it to cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act. Since we have found that Respondent unlaw- fully has refused to adhere to the terms of the June 7, 1978, stipulation agreement with the Union, we shall order it, upon request from the Union, to submit all issues regarding the wages, hours, and other terms and conditions of employment of its bargaining unit employees to binding arbitration pursuant to the stipulation agreement. Further, it is the Board's customary policy to re- quire restoration of the status quo ante insofar as practical where a respondent has taken unlawful unilateral action. Accordingly, we shall order Re- spondent, upon request from the Union, to reinstate the wage rates which existed prior to the time it unilaterally changed the wage rates of the bargain- ing unit employees on or about June 16, 1978. Our Order, however, is not to be construed as requiring rescission of any wage increase previously granted unit employees. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Sea Bay Manor Home for Adults, Brooklyn, New York, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Local 144, Hotel, Hospital, Nursing Home & Allied Health Services Union, SEIU, AFL-CIO, as the exclusive bargaining representative of the employ- ees in the appropriate unit, by refusing to honor and abide by the stipulation agreement entered into with the Union on June 7, 1978, in which the par- ties agreed to submit all issues regarding the wages, hours, and conditions of employment of the unit employees to binding arbitration. (b) Refusing to bargain collectively with the Union by unilaterally changing wage rates in the absence of a genuine impasse in bargaining. (c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act: (a) Upon request from the Union, honor and abide by the June 7, 1978, stipulation agreement with the Union. (b) Upon request from the Union, reinstate the wage rates that existed for unit employees prior to on or about June 16, 1978; provided, however, that nothing herein shall be construed as requiring re- scission of any wage increases which previously have been granted to unit employees. (c) Post at its Brooklyn, New York, facility copies of the attached notice marked "Appen- dix."' 0 Copies of said notice, on forms provided by the Regional Director for Region 29, after being duly signed by Respondent's authorized representa- tive, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Re- spondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 29, in writing, within 20 days from the date of this 10 In the event that 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 National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " 742 SEA BAY MANOR HOME FOR ADULTS Order, what steps the Respondent has taken to comply herewith. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL. LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Local 144, Hotel, Hospital, Nursing Home & Allied Health Services Union, SEIU, AFL-CIO, as the exclusive bargaining repre- sentative of the employees in the appropriate unit, by refusing to honor and abide by the stipulation agreement we entered into with the Union on June 7, 1978, in which we agreed to submit all issues regarding the wages, hours, and conditions of employment of our employ- ees to binding arbitration. WE WILL NOT refuse to bargain collectively with the Union by unilaterally changing wage rates in the absence of a genuine impasse in bargaining. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employ- ees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL, upon request, honor and abide by the stipulation agreement entered into on June 7, 1978, with the Union. WE WILL., upon request, reinstate the wage rates that existed for unit employees prior to on or about June 16, 1978. SEA BAY MANOR HOME FOR ADULTS DECISION FRANK H. ITKIN, Administrative Law Judge: An unfair labor practice charge was filed in this case by Local 144, Hotel, Hospital, Nursing Home & Allied Health Services Union, SEIU, AFL-CIO (the Union), on July 27, 1978. A complaint issued on August 28, 1978. The hearing was conducted in Brooklyn, New York, on May 16 and June 12 and 13, 1979. The General Counsel alleges that Sea Bay Manor Home for Adults (Respond- ent) violated Section 8(a)(1) and (5) of the National Labor Relations Act as amended, by engaging in the fol- lowing conduct: On or about June 7, 1978, Respondent [and] Local 144 signed a written stipulation agreeing to submit all issues regarding the wages, hours and other terms and conditions of employment of the employ- ees in the unit . . . to binding arbitration. On or about June 16, 1978, and at various times thereafter, Respondent refused to abide by its signed written stipulation with Local 144 . Since on or about June 16, 1978, Respondent unilat- erally changed existing wage rates, hours of em- ployment and other terms and conditions of em- ployment, without prior notice to the Union and without affording it an opportunity to negotiate and bargain with Respondent concerning such changes. Respondent denies that it has violated the Act as alleged. Upon the entire record, including my observation of the witnesses, I make the following findings of fact and con- clusions of law: FINDINGS OF FAC Respondent is admittedly an employer engaged in commerce as alleged. The Charging Party is admittedly a labor organization as alleged. All dietary employees, handymen, maid/aides, service and maintenance employ- ees, attendants, porters and receptionists-clerks employed by Respondent at its facility in Brooklyn, New York, ex- clusive of all other employees, watchmen, guards and all supervisors, admittedly constitute an appropriate bargain- ing unit as alleged. On June 24, 1977, the Board certified the Union as the exclusive bargaining agent of the em- ployees in this unit and the Union admittedly has been. and is, the exclusive bargaining representative of the unit employees as alleged. The parties thereafter engaged in some six collective-bargaining sessions, commencing during late August 1977 and ending on June 7, 1978. The pertinent evidence is summarized below. Union Representative Frank Russo testified that at the first bargaining session during late August 1977, or possi- bly prior thereto, the Union submitted to the Home its written contract proposals. See G.C. Exh. 3. According to Russo, There was some discussion back from the Employer stating that this proposal was ridiculous, it was ludi- crous, it was very expensive and the Employer couldn't afford this type of proposal .... The Union had requested from the Employer, where does he get his money, is it the same or different than hospitals or nursing homes. A discussion over these and related questions followed. A second bargaining session was held on September 21, 1977. The Union, according to Russo, "submitted an- other proposal" to the Employer at this session (see G.C. Exh. 4, Russo's notes of this meeting) and a third bar- gaining session was held on October 25, 1977. Respond- ent as Russo recalled, submitted its written contract pro- posal to the Union at this meeting. (See G.C. Exh. 6 and Resp. Exh. 2.) Russo further recalled: The Employer had once again raised the issue that he is not a nursing home or a hospital, and he doesn't get funded the same way as the nursing homes or hospitals get funded. Therefore, it is diffi- cult for him to agree to a type of a contract as pro- posed by the Union and these were a variety of things that were discussed. 743 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The fourth bargaining session was held on or about December 7, 1977. Russo testified that at this session he submitted a further proposal to Respondent. (See G.C. Exh. 7, Russo's notes containing this "additional propos- al.") Russo recalled that: [Tihere was an outburst at the meeting and they ac- cused me of bad faith bargaining, that the Union's earlier proposal . . . was less than this proposal . . . and that I have increased the Union's original pro- posal . . Respondent rejected the Union's proposal; "they could not afford that rate"; and further discussion ensued over these and related subjects. A fifth bargaining session was held on or about De- cember 19, 1977. Russo testified: The discussions at that meeting were basically the same as prior .... The Employer kept saying that he's on a fixed income . . . and he cannot afford to pay the type of contracts . . . which we have gained for other members in nursing homes and hospitals. Russo "proposed binding arbitration at that time" for "all terms and conditions of the Union's proposal." Russo explained: He [Administrator Blisko] said that he would submit . . . all his books and records to . . . whom- ever the Union may designate, whether it be an ac- countant [or] our auditors; he said he would submit all that information to our auditors . . . The Em- ployer had proposed fact-finding, I had proposed rather than fact-finding, because it was not binding .. , we would agree to go to binding arbitration The Employer, however, insisted "that he would rather go to fact-finding." The Employer "kept saying that he couldn't afford to pay . . . the wage increases that we were proposing, nor contribution rates to the various benefit funds." Russo further recalled that the Employer "had stated that he would give a $20 per week increase to the employees and go to fact-finding" and that the Union, instead, wanted "binding arbitration." The sixth and last bargaining session was held on June 7, 1978, at Respondent's facility.' According to Russo, the Union proposed "wages" and "contributions to the funds" from its "hotel master agreement." These "pro- posed wages at the hotel division rates" are less than "what the Union's contracts call for in the nursing homes and hospitals." Likewise, the proposed "health and welfare and pension fund" would be at the lesser "hotel rate." Russo testified: I The Union ad counsel for Respondent were unable to meet between December 1977 and June 1978 because of negotiations and strike issues involving a nursing home associatilon and the Union. There is no allega- tion here that this 6-month delay in resuming bargaining was unlawful There is also no allegation here that Respondent engaged in had-faith bargaining during the six sessions, as discussed above. Mr. Jones [counsel for Respondent] initially reject- ed this proposal and Mr. Blisko . . . simply said he cannot afford to make contributions to the funds at those rates. He said it's impossible. Then we went back to the discussion about the Em- ployer's proposed fact-finding with the $20 per week increase . . . and I proposed binding arbitra- tion. A discussion followed. Later, as Russo recalled, Mr. Blisko and Mr. Jones, when they had come back into the room, Mr. Jones had told-had said that they would agree to go to binding arbitration, and then I asked if they would continue the $20 per week increase, would that be included, and then Mr. Blisko said that if they would agree to go to binding arbitration, they will not agree to pay $20 per week increase in wages. He said he spoke to the owner, Mr. Blisko said, and then at that time I said that it would be agreeable to the Union, subject to ratification of the membership on the issue of submitting the contract to binding arbitration. Union Representative Russo then asked Respondent's attorney, Reginald Jones, to "draw up the agreement." Jones prepared in longhand the following "stipulation of agreement" (G.C. Exh. 8): WHEREAS the parties have been unable to reach agreement after a prolonged period of collec- tive negotiations; and WHEREAS the Employer has presented to the Union its last and final proposal, reflective of the full extent of the Employer's ability to pay; and WHEREAS the Employer has offered to sub- stantiate its inability to pay in excess of its last and final proposal by joint conference of the parties' ac- countants, which offer has not been accepted by the Union; THEREFORE, the parties hereby agree that all issues regarding the wages, hours and conditions of employment of the employees of Sea Bay Manor Home for Adults shall be submitted to binding arbi- tration. The selection of the impartial arbitrator shall commence immediately and, further, shall be con- cluded within two weeks from this date. This stipulation shall become effective only sub- ject to ratification by the employees of Sea Bay Manor Home and upon approval of Peter Ottley, President of Local 144. Blisko signed the agreement for Respondent. 744 SEA BAY MANOR HOME FOR ADULTS Russo, as he further testified asked Blisko to assemble Respondent's employees. Blisko caused the employees then at work to be sent to the dining room. There, Russo "read the stipulation" and "explained to them what arbi- tration would mean." Blisko was also permitted to speak to the assembled employees. Blisko later left the room and the employees, according to Russo, "unanimously approved the agreement of binding arbitration." 2 Russo informed Blisko and Jones that "the workers ratified unanimously the arbitration." The selection of an arbitra- tor was discussed. And, Union President Peter Ottley signed the agreement later that evening at the Union's office. Thereafter, by letter dated June 16, 1978, counsel for Respondent, Reginald Jones, apprised Union Representa- tive Russo as follows (G.C. Exh. 10): Upon further discussion with the owners of Sea Bay Manor Home for Adults, it has been decided that the submission to the collective negotiations be- tween the Home and Local 144 to binding arbitra- tion would be ill advised. Therefore, we hereby withdraw any agreement to engage in binding arbi- tration with respect to this matter and request the continuation of collective bargaining at your earliest convenience. It is our feeling that the benefits which the par- ties might expect to derive from binding arbitration may be achieved in a manner less costly to the Home. Specifically, the issue to be resolved is whether the Home can afford to implement wages and employment benefits in excess of those submit- ted to the Union in the Home's last and final pro- posal. The Home has offered to substantiate this in- ability to pay by disclosure of its financial books and records to a Union accountant. We still feel that this procedure is best suited to the resolution of the existing dispute. Since establishing the truth of the Home's finan- cial situation is the principle concern of both par- ties, we hope that you will be agreeable to accom- plishing this task by this less formal, but more expe- ditious procedure. We are hopeful that we can anticipate your coop- eration in this matter. Please contact the under- signed with regard to the scheduling of further ne- gotiations. The record does not show that the Union made any fur- ther attempt to meet with the Employer. And, it is undis- puted that the Employer subsequently implemented its last wage proposal. 3 2 There were, according to Russo, some 11 employees present at this meeting. See G.C. Exh. 9. There were, at the time, approximately 22 em- ployees in the unit. 3 On cross-examination, Russo acknowledged that the Employer "of- fered to disclose their books and records" to the Union's "auditors or ac- countants a few times"; that the Union instead wanted "binding arbitra- tion"; and that "prior to the June 7, 1978 agreement, . no terms and conditions had been agreed upon by and between" the parties--"there was no agreement reached on anything." Russo denied threatening the Employer with a strike "if there is no contract and no binding arbitra- tion." Further, Russo claimed that under the Union's constitution and bylaws, "a contract has to be ratified by a majority of the members that Joseph Blisko, administrator of Respondent's facility, testified that during the October and December 1977 bar- gaining sessions, ... I told Russo that . . . I can't affort this .... If you want, you can look it up in my books and records . . ."; and, further, that during the June 7, 1978, bargaining session: I told Mr. Russo that this is still the only propos- al-final proposal. I can't change anything . . . the last proposal which I gave him in December 1977 .... I said, this is the bottom line figure. I cannot afford to do any better than what I am giving you. If you want, you can still check my books and re- cords. Blisko proposed "fact-finding" to resolve their dispute. Russo proposed "binding arbitration." Blisko initially de- clined "binding arbitration." Blisko testified that Russo threatened to "pull a g-d-- f-ing strike in this place if you don't give it [binding arbitration] to me . . . ." Sub- sequently, however, according to Blisko, Blisko and his attorney, Jones, agreed to binding arbitration" Blisko tes- tified: Q. Will you tell us the circumstances under which you signed that agreement and what was said concerning arbitration and what was said concern- ing ratification? A. First of all, we had a break--before I told you about the break. I came back. I spoke to the owners. They told me not to go to arbitration, that we should still let him look at our books and re- cords. * * * A. [continuing] I came back after speaking to the owners-to the owner, and I told Mr. Russo that I still don't want to go to binding arbitration. And we started hassling for another two hours. The next thing I knew we signed this agreement, and I said. "Fine, this is the agreement you want. It will have to first of all be ratified by the majority of the em- ployees at Sea Bay Manor Home for Adults." Blisko acknowledged that he later spoke to Respondent's employees who were assembled in the dining room, where: I explained to them a little bit as far as what this agreement was, and that it has to be ratified by the employees at Sea Bay Manor. And, its up to you people, what you want to do. Blisko recalled that only nine employees were present at this meeting. Blisko was not present "when any vote was taken." Blisko acknowledged that he never later men- tioned to Russo "anything . . . concerning employees who were not present at that meeting .... " (Also see attend the meeting: "then the preidelit would hase to approve it", and the agreement becomes eff'ctise "If It Is signed h both parties " Russo asserted that there as "discussl,lon" betluccn hilnl and the Employer "concrnlllig what form the ratification AiSIC would take " 745 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Jones' letter to Russo, G.C. Exh. 10, dated June 16, 1978, which makes no reference to any alleged strike threat or a failure of ratification of the agreement.) I credit the testimony of Union Representative Russo as quoted and detailed above. While the record shows that Russo was at times an argumentative and unrespon- sive witness, I am nevertheless persuaded here that the above testimony of Russo truthfully and accurately de- picts what transpired during the bargaining sequence. Russo's testimony in this respect is substantiated in part by uncontradicted documentary evidence and in part by the testimony of Respondent's administrator, Blisko. In- sofar as the testimony of Blisko conflicts with the above testimony of Russo, I credit the testimony of Russo. Blisko did not impress me as a reliable witness. His testi- mony was at times vague, incomplete, and unclear. In particular, I do not credit Blisko's assertion to the effect that Russo had threatened a strike on or about June 7 unless Respondent agreed to binding arbitration. Nor do I credit Blisko's assertion to the effect that Blisko insisted that the arbitration agreement "will have to first of all be ratified by the majority of the employees" at Respond- ent's facility. These assertions are contrary to Blisko's subsequent course of conduct and, further, are not even cited in the letter of attorney Jones, written on June 16, wherein Jones voids the June 7 agreement. Jones did not testify. Discussion It is now settled law that an "interest arbitration" clause-requiring the parties to submit disputes over new contract terms and proposals to final and binding arbitra- tion-is not a mandatory subject of collective bargaining under the Act. See N.L.R.B. v. Columbus Printing Press- men & Assistants' Union No. 252, Subordinate to IP & GCU 543 F.2d 1161 (5th Cir. 1976). N.L.R.B. v. Greens- boro Printing Pressmen and Assistants' Union No. 319. 549 F.2d 308 (4th Cir. 1977). It is also settled law that the "remedy for a unilateral mid-term modification to a per- missive term lies in an action for breach of contract ... , not in an unfair labor practice proceeding . . ." See Allied Chemical & Alkali Workers of America, Local Union No. I v. Pittsburgh Plate Glass Co., Chemical Divi- sion, et al., 404 U.S. 157, 187-188 (1971). Thus, as the Board explained in United Mine Workers of America (Lone Star Steel Company), 231 NLRB 573 (1977): It was found that the employer's failure to abide by that [after-acquired] clause violated Section 8(a)(5) of the Act. It is clear that such a finding is permissi- ble only because the clause itself was deemed to in- volve a mandatory subject of bargaining. For, as the Supreme Court stated in Pittsburgh Plate Glass, supra, the Act does not require continued adherence to permissive as well as mandatory terms: "the remedy for a unilateral mid-term modification to a permissive term lies in an action for breach of con- tract . . . not in an unfair labor practice proceed- ing." Accordingly, in the instant case, the parties entered into an agreement on June 7, 1978, "that all issues re- garding the wages, hours and conditions of employment of the employees . . . shall be submitted to binding arbi- tration." This is clearly a permissive and not a manda- tory subject of collective bargaining. Respondent's breach of this agreement, some 9 days after signing the agreement and prior to the selection of any arbitrator, does not, under the circumstances present here, violate Section 8(a)(5) of the Act. Indeed, Respondent, in its letter of June 16, expressed a willingness to continue bar- gaining with the Union over the terms of an agreement and the Union apparently never pursued the Employer's offer. It is also settled law that "after bargaining to an im- passe, that is after good faith negotiations have exhausted the prospects of concluding an agreement, an employer does not violate the Act by making unilateral changes that are reasonably comprehended within his pre-impasse proposals." See Taft Broadcasting Co., WDAF AM-FM TV, 163 NLRB 475 (1967), enfd. 395 F.2d 622 (D.C. Cir. 1968). It is undisputed here that Respondent unilaterally implemented its last wage proposal after June 16, as al- leged. There is no allegation made in this case that Re- spondent, during its some six bargaining sessions cover- ing a 10-month period, bargained in bad faith. The par- ties were unable to agree upon economic terms and con- ditions of employment. The June 7 stipulation recites: "the parties have been unable to reach agreement after a prolonged period of collective negotiations" and the "Employer has presented to the Union its last and final proposal reflective of the full extent of the Employer's ability to pay. In short, I find and conclude that on or about June 7, 1978, the parties were at an impasse. The parties attempted to break this impasse through "interest arbitration." The Employer, however, withdrew from the "interest arbitration" stipulation and, instead, request- ed "the continuation of collective bargaining." The Union apparently did not pursue this offer and the Em- ployer implemented its last wage offer. Under these cir- cumstances, the impasse had not been resolved and the Employer's unilateral implementation has not been shown to be unlawful. Accordingly, the General Counsel has failed to prove the 8(a)(5) and (1) violations alleged here. I would there- fore dismiss the complaint. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce as alleged. 2. Local 144 is a labor organization as alleged. 3. The General Counsel has failed to establish by a preponderance of the evidence that Respondent violated Section 8(a)(5) and (1) of the Act as alleged. 4. The complaint will therefore be dismissed in its en- tirety. [Recommended Order for dismissal omitted from pub- lication.] 746