Nabors Trailers, Inc.

NABORS TRAILERS Nabors Trailers, Inc. and International Brotherhood of Boilermakers Local Union 743 and Interna- tional Association of Machinists and Aerospace Workers, AFL-CIO. Cases 15-CA-10271 and 15-CA-10273 June 13, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND HIGGINS On September 27, 1988, Administrative Law Judge Philip P. McLeod issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief, and the Charging Parties filed a brief in response to the Respondent's exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, I and conclusions2 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, Nabors Trailers, Inc., Mansfield, Louisiana, its officers, agents, successors, and assigns, shall take the action set forth in the Order. i The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings The Respondent has also excepted to the judge's failure to pass on its unopposed motion to correct transcript We grant the motion 2 In adopting the judge's conclusion that the Respondent violated Sec 8(a)(5) and (1) by implementing a wage reduction without having bar- gained in good faith to impasse, we do not find that the Respondent en- gaged in bad-faith bargaining prior to implementing the unilateral change Instead, we note that the judge's phrasing of his conclusion merely reiter- ates the statutory language describing a party's bargaining obligation and did not imply that the Respondent's conduct at the negotiating table fell short of that standard prior to its precipitous alteration of wage rates However, we do not adopt the judge's statement in the section entitled "Analysis and Conclusions," that "[w]henever an employer wants to make severe reductions in wages or benefits, it can be said that in a very practical sense the parties are at impasse from the very start of negotia- tions " This is not an accurate statement of the law and should not be viewed as an appropriate point for analysis Charlotte N. White, Esq., for the General Counsel. Barry A. Hartstein, Esq. (Neal, Gerber, Eisenberg " and Lurie), Chicago, Illinois, for the Respondent. 1115 Paul Schmidtlein, Esq. (Blake & Uhlig, P.A.), Kansas City, Kansas, for the Charging Parties. DECISION STATEMENT OF THE CASE PHILIP P. McLEOD, Administrative Law Judge I heard this case on May 9 and 10, 1988, in Shreveport, Louisiana. The charges which gave rise to this proceed- ing were filed on April 6 and 7, 1987 An order consoli- dating cases, consolidated complaint and notice of hear- ing issued on May 21, 1987, and was amended on June 4 and November 24, 1987. As amended, the complaint al- leges, inter alia, that Nabors Trailers, Inc. (The Respond- ent), violated Section 8(a)(1) and (5) and Section 8(d) of the National Labor Relations Act, (the Act), by unilater- ally implementing changes in employees wage rates prior to reaching a valid bargaining impasse with the Unions and less than 30 days after giving notice to the Federal Mediation and Conciliation Service (FMCS) as required by Section 8(d) of the Act. In its answer to the complaint, as amended,' Respond- ent admitted certain allegations including the filing and serving of the charges; its status as an employer within the meaning of the Act; the status of International Broth- erhood of Boilermakers, Local Union 743 and Interna- tional Association of Machinists and Aerospace Workers, AFL-CIO (the Unions), as labor organizations within the meaning of the Act; and the status of certain individ- uals as supervisors and agents of Respondent within the meaning of Section 2(11) of the Act. Respondent denied having engaged in any conduct which would constitute an unfair labor practice within the meaning of the Act. At the trial, all parties were represented and afforded full opportunity to be heard, to examine and cross-exam- ine witnesses, and to introduce evidence. Following the close of the trial, all parties filed timely briefs with me which have been duly considered. On the entire record in this case and from my observa- tion of the witnesses, I make the following FINDINGS OF FACT 1. JURISDICTION Nabors Trailers, Inc. is a Delaware corporation li- censed to do business in the State of Louisiana, where it is engaged in manufacturing and distributing custom or- dered trucks and trailers. In the course and conduct of i The motion of Counsel for General Counsel to strike portions of Re- spondent's amended answer as untimely is denied Sec 102 23 of the Board's Rules and Regulations, Series 8, as amended, provides that "Re- spondent may amend its answer at any time prior to the hearing " Fur- ther, that section provides, "Whether or not the complaint has been amended, the answer may, in the discretion of the administrative law judge or the Board, upon motion, be amended upon such terms and with such periods as may be fixed by the administrative law judge or the Board " Respondent's amended answer dated May 4, 1988, was received by Counsel for the General Counsel within sufficient time to be included in the formal papers Counsel for the General Counsel did not seek any postponement or adjournment in order to present evidence in response to the amended answer, and there is no argument that Counsel for the Gen- eral Counsel was surprised or unduly prejudiced by Respondent's amend- ed answer The motion to dismiss is therefore denied 294 NLRB No. 93 1116 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD its business operations, Respondent annually purchases and receives at its Louisiana facility materials valued in excess of $50,000 directly from points located outside the State of Louisiana. In addition, Respondent annually sells and ships products valued in excess of $50,000 directly to customers located outside the State of Louisiana. Respondent is, and has been at all times material, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. LABOR ORGANIZATIONS International Brotherhood of Boilermakers, Local Union 743 and International Association of Machinists and Aerospace Workers, AFL-CIO are, and have been at all times material, labor organizations within the mean- ing of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Background Respondent has been in operation since the 1920's pro- ducing various types of trucks and truck trailers. In recent years, Respondent has manufactured large furni- ture vans and lowboys. For many years, Respondent's manufacturing facility has been located in Mansfield, Louisiana. Since about 1959, International Brotherhood of Boilermakers, Local Lodge 743 and International As- sociation of Machinists and Aerospace Workers, AFL- CIO have jointly represented and executed a single col- lective-bargaining agreement covering production and maintenance employees at the Mansfield facility. At the time the charges were filed herein, there were approxi- mately 125 bargaining unit employees. Respondent has sales outlets in Dallas and Houston, Texas, New Orleans, Louisiana, and Jackson, Mississippi. Respondent attempted to expand its business base in recent years, and opened a second manufacturing facility in Jacksonville, Florida This nonunion facility employed approximately 80 to 90 employees and was used to produce a specific type of trailer. Due to Respondent's poor economic condition, Respondent closed the Jack- sonville facility in August 1987. The most recent collective-bargaining agreement be- tween Respondent and the Unions covering employees at the Mansfield facility was in effect from March 23, 1984 to March 22, 1987. The agreement provided an annual reopener clause to negotiate wage rates from year to year. The agreement further provided: [I]n the event either party desires to amend, change, or terminate this Agreement, it shall give notice thereof at least 60 days prior to the expiration date, or any anniversary date thereof. Upon the giving of such notice, the parties shall meet within 10 days for the purpose of negotiating a new Agreement. In the event of such notice and if no Agreement is reached by the expiration date, or anniversary date, either party may thereafter terminate this Agree- ment upon 5 days written notice.- .. . B. Initiation of Collective Bargaining 1987 On or about December 18, 1986, Lester Boykin, who was then the Boilermakers international representative to Local Union 743 and the Unions' primary spokesperson with Respondent, telephoned Respondent's general man- ager, Harlon Blackmon. Boykin asked Blackmon to meet him in Shreveport, Louisiana, on December 22. Boykin and Blackmon met at a local restaurant. According to Boykin, he did not give Blackmon a specific reason for wanting to meet. Boykin testified that during the meeting he pointed out to Blackmon that employees had not re- ceived a raise in more than 2 years and asked that em- ployees be given a Christmas bonus According to Black- mon, Boykin also discussed the upcoming contract expi- ration. Blackmon testified that Boykin suggested Re- spondent consider a small wage increase and some type of bonus or profit sharing. At the conclusion of the meeting, Boykin and Blackmon walked out -together to their cars. Boykin testified that as they were parting, Blackmon asked Boykin if he was "going to send him a letter." Boykin responded, "Yes." Boykin then added, "But he didn't say what kind of letter and I didn't tell him what kind of letter." It is clear from Boykin's later testimony, however, and particularly from his comments to employees at a meeting on January 13, 1987, that Boykin purposely attempted to give Blackmon the im- pression that he would be sending a letter to open nego- tiations, while in fact he intended to recommend to em- ployees that the Union not open the contract. This is dis- cussed in greater detail below. On January 5, 1987, Boykin and Richard Booker, president of Boilermakers Local 735, spoke by telephone and decided to hold a meeting with employees on Janu- ary 13 to discuss and decide whether to open contract negotiations with Respondent. On January 9, 1987, Boykin telephoned Blackmon and requested to meet with Blackmon on January 19. Boykin again claimed that he did not tell Blackmon the reason for wanting to meet. Boykin acknowledged, however, that Blackmon asked Boykin if Boykin was going to write a letter, and Boykin again said yes. Blackmon as- serts Boykin called and set up a meeting date on January 12 and 13 to begin negotiations According to Blackmon, Boykin later called and rescheduled the meeting for Jan- uary 19. According to Blackmon, this meeting was also canceled by Boykin because Boykin was scheduled to have surgery and could not travel. On January 13, 1987, Boykin and Booker met with Re- spondent's employees. Boykin addressed the employees, telling them that he had recently seen a financial report filed by Respondent with the Securities and Exchange Commission. Boykin recommended that due to Respond- ent's financial condition, the collective-bargaining agree- ment not be opened. Boykin told employees that he had told Blackmon he would write Blackmon a letter con- cerning a meeting. Boykin told employees that Blackmon had never asked directly whether he intended to open the agreement. Boykin then said that he would send Blackmon a letter telling Blackmon the Union had decid- ed not to open the contract which he hoped would reach Blackmon on the last day the contract could be opened. NABORS TRAILERS Then Respondent would be untimely if it tried to open the agreement, and the contract would renew itself. Boykin told employees they should hope that Respond- ent would not open the agreement and the contract would be automatically renewed. Employees then voted unanimously not to open the collective-bargaining agree- ment. By letter dated January 19, 1987, Blackmon wrote to Boykin: In response to my telephone conversation with you of today, this is simply to confirm the fact that you will be sending us a letter this week telling us that you would like to exercise your options of the present labor agreement and open these options for negotiations This is also to confirm our desire to do the same We will be in touch with you to arrange a mutually acceptable time, -place and date to begin these negotiations shortly. Boykin never sent any response to Blackmon's letter of January 19. At about the same time as Blackmon's letter, Boykin wrote to Blackmon apologizing for canceling the January 19 meeting and stating : "I am undergoing an ex- amination and a series of test that may result in my being hospitalized for surgery." Thereafter, due to Boykin's health, negotiations were delayed until March 1987. C. Negotiations Preceding Respondent's Unilateral Change in Wages On March 2, Blackmon telephoned Boykin and ar- ranged for the first negotiating session to be held on March 11. At the first meeting on March 11, the Unions were represented by Boykin, Boilermakers International Rep- resentative John Yates, Boilermakers Union President Richard Booker, and Machinists Representative Leonard Smith. In addition, various employees helped comprise the bargaining committee. Representing Respondent were General Manager Blackmon and Controller Sam Derrick. Boykin introduced Yates as the new Interna- tional representative who would replace Boykin on his retirement effective April 1. After the introductions, Blackmon requested the Unions' proposal. According to Blackmon, Boykin stated that the Unions were not ready to present a proposal because he had been under a doc- tor's care for the last several weeks. Boykin, however, pointed out that the employees had not received a wage increase since 1983. Boykin denies stating that the Unions were not ready to present a proposal. According to Boykin, he replied to Blackmon's request for a pro- posal that since it was Respondent who opened the con- tract, the Unions expected a proposal from him. I do not credit Boykin's denial, but I find- that both Boykin and Blackmon are only partially correct. I credit Blackmon that in response to his request for a proposal, Boykin stated the Unions were not ready to present a proposal because Boykin had been under a doctor's care. I partial- ly credit Boykin, however, and find that he then went on to note it was Respondent who opened the contract and that the Unions expected a proposal from Blackmon. Neither party presented a proposal. In response to Boy- kin's remark that employees had not received a wage in- 1117 crease since 1983, Controller Derrick responded by giving a brief description of Respondent's dismal eco- nomic position and noted that Respondent had lost money each year throughout the collective-bargaining agreement. Respondent stated that it would have a pro- posal at the next meeting, which was agreed to be held on March 17. On March 17, the parties met as scheduled In addition to all of the individuals present at the first meeting, the second meeting was attended as well by John McGrath and Terry Taylor on behalf of the Machinists Union and Plant Production Manager Willie Bozeman on behalf of Respondent. At this meeting, Derrick gave a detailed review of Respondent's economic position, including its individual yearly and cumulative losses over the past 5 years. Derrick stated that losses for 1987 were at that time 1.7 million dollars which would likely rise to 2 mil- lion by year end. Derrick told the Unions that Respond- ent was considering ways to realign the facility, restaff, improve operating methods, increase productivity, reduce overhead, and expand markets Derrick told the Unions that Respondent needed a 28-percent wage re- duction. Respondent gave the Unions a new job list showing proposed wage classifications in order to arrive at the 28-percent reduction The Unions then caucused. After the caucus, Boykin asked Respondent to explain the nature of the document in detail. Boykin also stated that the Unions would study the proposal during the ad- journment prior to the next meeting. Machinists Interna- tional Representative John McGrath stated that if the Company was claiming poverty, the Unions reserved the right to audit Respondent's books. However, no request was made at that time, and the Unions did not offer any specific economic proposal at that meeting. The parties agreed to meet again the following day. On March 18, the parties met for the third time. Re- spondent and the Unions again discussed Respondent's economic condition. Blackmon told the Unions that labor costs constituted approximately 25 to 30 percent of Respondent's financial problems. Boykin responded that he had seen copies of Respondent's annual report which states that employee wage rates are in line with the com- petition. Derrick replied that Respondent was neverthe- less still losing substantial amounts of money and needed a 28-percent wage reduction. Boykin then questioned Re- spondent's job classification proposal, specifically re- questing what wage rates Respondent had in mind for the new job classifications. After a caucus, Respondent presented specific wage rates for the various job classifi- cations. The Unions told Respondent that they wanted indirect labor reduced instead of or in addition to direct labor costs included in wage rates for unit employees. Yates asked Blackmon to specify the losses of the Jack- sonville manufacturing facility. Blackmon and/or Der- rick told the Unions that separate records were not kept on the Jacksonville facility and he/they did not think it was possible to specify losses just for that plant. Boykin stated that Respondent's annual report reflected a 1.6 million dollar loss in 1986 which was caused by the Jack- sonville start-up. After some further discussion about the Jacksonville facility, Boykin stated that the Unions 1118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD would like to study Respondent's proposed wage rates in greater detail. Boykin suggested another meeting be held on March 23, and that date was agreed upon. On March 20, Blackmon personally delivered to Boil- ermakers President Richard Booker and Machinists President Leonard Smith, both of whom are employed by Respondent, copies of a letter which state: The Union and the Company have been meeting for the purpose of negotiating the contract. The Company submitted their proposal to the Unions at the bargaining table and the proposal was neither accepted, rejected, nor was a counter offer made by the Union. Since the contract officially terminates at the end of the day on March 22 we must assume that no agreement was reached and the Company hereby gives written notice to terminate the contract in 5 days as provided for in Article 25 of the contract. Certified copies of this letter were also sent to union rep- resentatives Boykin and McGrath. On March 23, the parties met again as scheduled. Yates told Respondent that the Unions understood the Company's proposal to include 33 job classifications at 11 different pay grades, or more than 300 possible wage rates. Yates stated that the Unions felt this was impracti- cal and difficult even for Respondent's own accounting department. Yates asked how such a system involving more than 300 categories for only approximately 125 em- ployees could be handled. Boykin asked if Blackmon was also considering modified job evaluations and Blackmon replied affirmatively. Boykin requested review of the job evaluation manual and asked Blackmon if it would be subject to negotiation. Blackmon said that the job eval- uation manual would not be subject to negotiation. Boykin then asked if the wages of people who were con- sidered indirect labor were also going to be reduced. Blackmon replied that they were not. At this meeting on March 23, the Unions presented a detailed contract proposal which included a proposed 12- percent wage increase for all employees. Respondent then requested a caucus to review the Unions' proposals. After reconvening, Respondent stated that the Unions' proposals seemed to ignore the problem Respondent had presented. The Unions offered to accept a reduction in wages provided all employees, including those consid- ered indirect labor such as salesmen , the repair depart- ment, and Respondent's central staff also take the same wage cut. Also at the meeting on March 23, Blackmon gave the Unions a document setting forth the various job titles and the number of employees needed in each classifica- tion at each pay grade. The parties discussed the pay grades, differences in pay, a comparison of skills, and the various jobs listed. The Unions again requested that Re- spondent be more specific concerning the manner in which the proposed wage reductions would be imple- mented. Specifically, Yates wanted to know what each employee was going to make under Respondent's pro- posal so that the Union could pass that information on to the employees . Respondent agreed to compile that kind of specific proposal that evening, and a meeting was scheduled for the following day. Also on March 23, Respondent mailed a letter to the Federal Mediation and Conciliation Service (FMCS) in Washington, D.C., giving notice of the ongoing negotia- tions with the Unions. At the fifth bargaining session on March 24, Blackmon presented a copy of the proposed wage rates for each of the employees which had been asked for the previous day. The Unions requested a caucus. After the caucus, the parties discussed various aspects of the total contract, but did not discuss wages again that day. Instead, the parties discussed such matters as layoffs, seniority, job postings, etc. Before -the meeting ended, Yates offered a minor concession by reducing the Unions' demand for a wage increase from 12 percent to 11 percent. Blackmon requested the Union to discuss Respondent's specific pro- posal with the membership. It is not clear whether the Unions agreed at that meeting to meet with employees, but it is clear that they did in fact do so. Before adjourn- ing, however, another meeting was scheduled for March 31. The Unions immediately called a membership meeting for that day after work. The Unions made copies of Re- spondent's proposed specific wage rates for each em- ployee, and made these available to employees at the meeting. At this meeting, Yates brought the membership up to date on the status of negotiations and presented Respondent's proposal for consideration by the employ- ees. No official vote was taken because no ballots were available, but an informal poll showed that Respondent's proposal was overwhelmingly rejected by employees. On March 25 , Blackmon posted a notice to employees at Respondent's Mansfield facility. This notice stated: The Unions and The Company have been meet- ing for the purpose of negotiating the contract. The contract official terminated at the end of the day on March 22 but with the extension of a 5 day grace period as provided for in Article 25 of the contract. On March 24, The Unions voted not to accept the Company's proposal. There will be NO lockout and the plant WILL be open as usual on Monday March 30 for those of you who wish to work. The new labor rates will go into effect at that time and they are posted on the Bulletin Board in the Clock House. There is a dispute whether the Unions were specifical- ly notified of Respondent's intent to place the new wage rates into effect. Oddly, Blackmon testified that no notice was given to the Unions. Local Machinists President Leonard Smith testified, however, that he and Local Boilermakers President Richard Booker were called into Blackmon's office and told that Respondent was going to implement its wage decrease proposal. On March 26 or 27, Yates telephoned Blackmon and told Blackmon he had heard about Respondent's inten- tion to institute the wage decrease. Yates told Blackmon not to implement the wage decrease, and that if Re- spondent did so, the Unions would file unfair labor prac- tice charges with the Board. Blackmon responded that in NABORS TRAILERS his opinion Respondent had done everything properly and that Respondent had to have the decrease. Respondent implemented its proposed wage decrease on Monday March 30, 1987. D. Events Following Respondent 's Reduction in Wages On March 31, the parties met again as scheduled. Boykin had retired and was therefore not present at that or future meetings. Yates continued as the Unions' pri- mary spokesperson . At the outset of this meeting, Yates again asked that Respondent refrain from implementing the wage deductions. Blackmon responded that the wage reductions had already been implemented the previous day. Respondent also mentioned that it had written to the FMCS The Unions then requested a caucus. After the caucus, Yates requested an audit of Respondent's books for each facility to determine whether Mansfield in fact contributed to Respondent's significant losses. Re- spondent then requested a caucus. After this caucus, Blackmon told Yates that Respondent had 'nothing to hide and agreed to open Respondent 's books. A meeting was set up for the following day for that purpose. Nei- ther party presented any new proposal at the' 'Meeting on March 31. - On April 1 , Yates and union representatives 'McGrath, Binning, and Smith met with Blackmon and:-Derrick to conduct an informal audit . Respondent presented income statements and balance sheets for the years 1981 through February 1987. These documents were reviewed by the Union and questions were answered. . On April 9, Respondent and the Unions met for their seventh time, the first time with a representative of the FMCS . During this session , Respondent andx'the Unions each reviewed their positions with the Federal Mediator. Respondent also presented a written proposal ' concerning various other changes it sought in the expired collective- bargaining agreement . Yates then stated that the financial information which the Unions had received the previous day did not differentiate between Mansfield and other fa- cilities The Unions were therefore unable to determine whether the bargaining unit contributed significantly to Respondent's losses. Respondent was then asked to supply profit and loss statements for each - branch. Der- rick responded that he was not sure whether he could supply that information separately for each facility Boi- lermaker Representative Beachamp challenged Derrick's inability to provide that information separately. Yates stated the Unions needed that information before they could recommend that employees in the bargaining unit accept a 28-percent wage reduction . Derrick then stated he would supply the information as requested. Beachamp asked Blackmon if he had the power to reinstate wage rates as they had been before . Blackmon answered that he did, and agreed to consider and discuss the matter with Respondent's president. Another meeting was scheduled for April 23 For reasons which are not clear, the meetings sched- uled for April 23 did not take place . Instead, the parties met again on April 29 . Beachamp stated that he had re- ceived a letter from Respondent listing operating figures for the Mansfield facility from 1983 through February 1119 1987. Beachamp noted, however, there were no figures for the individual branch operations . Blackmon respond- ed that he had not agreed to furnish figures for the indi- vidual branches because they had nothing to do with ne- gotiations.2 Blackmon was called out of the meeting When he returned, Blackmon told the Unions that al- though he had not agreed to furnish this information for the individual branches, he would do so. The meeting adjourned. On May 27 , the parties met again with a representative of FMCS . Blackmon was not present at this meeting, and the parties did not meet face to face. The Unions gave Respondent a new proposal which for the first time in- cluded a wage reduction for bargaining unit employees. The proposal was for a 5-percent reduction in wages for employees working prior to March 23, 1987 and much lower wage rates for employees hired after that date. The mediator took the Unions' proposal to Derrick. The mediator came back to tell the Unions that Derrick would give the Unions' proposal to Blackmon for a sub- sequent response. On June 11 and 12, the parties again met with a repre- sentative of FMCS. At the June 12 session, Respondent presented a wage reduction proposal which was substan- tially different from Respondent 's prior proposal. The June 12 proposal involved a 20-percent across-the-board pay cut for all employees. Under the previous proposal, some employees had little or no wage reductions and others received substantial reductions, thus averaging a 28-percent decrease This new proposal involved every- one accepting a 20-percent decrease from rates in the prior collective-bargaining agreement. On June 18, Respondent's new proposal was presented to employees for consideration . Employees again voted to reject Respondent's proposal , but at the same time voted not to strike. No effort was made to pursue further negotiations for several months. On October 1, the Unions met with Blackmon and presented another wage proposal. Black- mon said he would meet with Derrick to consider the proposal . Thereafter, the parties agreed to meet on Octo- ber 21 On October 21, the parties met for the last time with the representative of FMCS . At that meeting, Blackmon notified the Unions that Respondent had received an offer to purchase the facility and that even if an agree- ment was reached and ratified , he was without authority to sign an agreement pending negotiations for the possi- ble sale. Yates stated that while he believed this was the basis for another unfair labor practice charge, he was not interested in filing such a charge. Rather Yates stated if Respondent was not in a position to sign an agreement, the Unions wanted to wait and determine whether the facility would be sold. By letter dated November 25, Respondent notified the Unions, in part,' "It may be necessary to discontinue manufacturing at this facility." By letter dated Dece- meber 29, the Unions were notified of Respondent 's deci- 2 Respondent's bargaining notes from the prior sessions indicate that Blackmon agreed to furnish information for the Mansfield facility but re- fused to supply that information for the individual branch offices 1120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD sion, "to cease manufacturing operations on January 29, 1988." The letter continued: The Company has scheduled operations to fill all existing assembly and shipping commitments to ful- fill sales orders in a timely manner. As those prior commitments are satisfied the manufacturing work force will be placed on indefinite layoff reflecting the discontinuance of production. The Nabors parts and services centers will con- tinue to function, as well as the local Mansfield Parts and Service Branch . The Nabors Administra- tive Office will continue to support these on-going activities. Analysis and Conclusions Counsel for General Counsel argues that Respondent violated Section 8(a)(1) and (5) as well as Section 8(d) of the Act by unilaterally reducing employee wage rates on March 30, 1987, prior to reaching a valid bargaining im- passe in negotiations with the Unions and/or prior to the expiration of the period of time required in Section 8(d) of the Act. Respondent argues that Section 8(d) of the Act is not applicable to Respondent because it was the Union that "initiated" bargaining and/or because neither party threatened or intended a strike or lockout. Section 8(d) of the Act provides in pertinent part: [W]here there is in effect a collective bargaining contract . . . the duty to bargain collectively shall ... mean that no party to such contract shall ter- minate or modify such contract, unless the party de- siring such termination or modification- (1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof ... . (2) offers to meet and confer with' the other party for the purpose of negotiating a new con- tract or a contract containing the proposed modi- fications; (3) notifies the Federal Mediation and Concil- iation Service within thirty days after such notice of the existence of a dispute . . . and (4) continues in full force and effect, without resorting to strike or lockout, all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract, which ever occurs later ... . In United Artists Communications, 27,4 NLRB 75 (1985), affd. sub nom. IATSE v. NLRB, 779 F.2d 552 (9th Cir. 1985), cert. denied 477 U.S. 904 (1986), the Board adopt- ed the view that the burden of notifying FMCS as re- quired by Section 8(d)(3) rests exclusively with the party that "initiated" bargaining. Counsel for the General Counsel and the Unions argue that because Respondent sent the letter terminating the prior collective-bargaining agreement, it was therefore Respondent who "initiated" bargaining. Respondent argues that the Unions, by their words and by their actions, gave Respondent the impres- sion that they were going to open the contract, and, in doing so, it was the Unions who "initiated" bargaining. I find the position of Counsel for the General Counsel and the Unions to be more persuasive, and altogether consist- ent with the Board decision in United Artists, supra. In that case, the Board very clearly assigned the responsi- bility for sending the notice required by Section 8(d)(3) to the party who "initiates bargaining" by serving the notice referred to in Section 8(d)(1). I find that Respond- ent was the initiating party by serving notice to open ne- gotiations pursuant to Section 8(d)(1) and was responsi- ble for serving the notice required by Section 8(d)(3). There is no question that the Unions were engaging in some subterfuge to give Respondent the impression they intended to open negotiations when in fact they had no intention of doing so, hoping the contract would renew itself. It is equally obvious, however, that Respondent in- tended to open the contract whether or not the Unions did so-3 The record is quite clear that Respondent was not going to rely on the Unions' representations that they in- tended to 'open the contract. Rather, Respondent made sure to send its own letter dated January 19 , 1987, giving notice to open negotiations. Long before Respondent fi- nally sent its letter to . FMCS on March 23 notifying them of the ongoing "negotiations, Respondent knew that the Unions had not followed through with their ex- pressed intention to open negotiations and it was Re- spondent itself who had done so by its letter of January 19. Long before March 23 , all the gamesmanship be- tween the Unions and Respondent had ceased over whether the contract was going to be opened in a timely manner. Respondent knew that it had opened the con- tract and at some point realized that it should notify FMCS. That is the very reason why Respondent sent its letter dated March 23 . I conclude based on the facts of this case that Respondent was the "initiating party" within the meaning of United Artists. I find that Re- spondent was responsible for meeting the requirements imposed by. Section 8(d)(3) of the Act. I find that by in- stituting its wage reduction without giving FMCS the notice required by Section 8(d)(3) of the Act, Respond- ent violated Section 8(a)(1) and (5) of the Act.4 Respondent argues in its post-trial brief that the com- plaint is based solely on . alleged "technical" violations, including the fact that it unilaterally implemented a 28- percent wage reduction without bargaining to impasse with the Unions that represent its employees . Respond- ent's argument itself suggests part of the problem which gives rise to this case-that Respondent views its obliga- tion to bargain in good faith to impasse a mere "techni- ' In fact, to some extent the employer was planning to show the Unions a cruel irony by letting them open the contract and then surpris- ing them with a demand for a 28-percent wage reduction in negotiations. Neither the Unions nor Respondent engender any sympathy from their actions in this case. 4 Respondent's argument that Section 8(d) does not apply because nei- ther party threatened or intended a strike or lockout has been specifically rejected by the Board . Mar-Len Cabinets, 243 NLRB 523 ( 1979); enfg. in pan, denying in part 659 F.2d 995 (9th Cir. 1981); supplemental Board de- cision 262 NLRB 1398 (1982). NABORS TRAILERS 1121 cal" requirement. Respondent overlooks the fact that bargaining lies at the very heart of the relationship be- tween an employer and a union which represents its em- ployees. Requiring that an employer bargain in good faith to impasse before implementing significant changes in the wages, hours, and working conditions of employ- ees is designed to give both the employer and the union every opportunity to explore and attempt to resolve problems which are equally significant to both the em- ployer and the employees . It is for this reason that the Board has uniformly and consistently required that an employer bargain in good faith to impasse with the union which represents its employees before the employer insti- tutes unilateral changes. In the seminal case Taft Broadcasting Co., 163 NLRB 475, 478 (1967), the Board stated that impasse occurs "after good-faith negotiations have exhausted the pros- pect of concluding an agreement . . . ." The Board fur- ther stated: ` Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good faith of the parties in negotiations, the length of the ne- gotiations, the importance of the issue or issues as to which there is disagreement, a contemporaneous un- derstanding of the parties as to the state of negotia- tions are all relevant factors to be considered in de- ciding whether an impasse in bargaining existed Whenever an employer wants to make severe reductions in wages or benefits, it can be said that in a very practi- cal sense the parties are at impasse from the very start of negotiations. This may also be true where a union seeks very substantial increases in wages or benefits, but there is one very significant difference. When an employer seeks significant reductions, it is also in control of imple- menting those reductions. A union may well seek sub- stantial increases in wages or benefits, but it is not in control over whether such changes actually occur. As a result, when an employer seeks substantial reductions in wages or benefits, the union necessarily wants to avoid such cuts altogether or, if that is not possible, then to put them off as long as possible. Necessarily therefore there is some merit to Respondent's argument that the Unions in this case tried to avoid or postpone as long as possible the significant wage reductions demanded by Respond- ent. Be that as it may, I conclude based on the record herein that Respondent instituted its wage reduction without bargaining to impasse with the Unions. The par- ties had not reached irreconcilable differences in negotia- tions, but rather were still in the midst of bargaining when Respondent instituted its wage reduction on March 30, 1987. Although the parties had met five times before Respondent implemented its wage reduction, real sub- stantive negotiations were just beginning. At the first bargaining session , neither party had a proposal for the other. Respondent can hardly blame this on the Union when all along Respondent intended to seek a substantial wage reduction. At the second meeting during which Respondent proposed its 28-percent wage reduction, Re- spondent nevertheless did not even have a complete eco- nomic proposal. At the third bargaining session, Re- spondent proposed an unprecedented job classification system with 33 job titles, each having 11 pay scales, to cover only approximately 125 employees. By the end of the fourth bargaining session, the parties were still dis- cussing this cumbersome job classification system At the fifth and last meeting before Respondent implemented its wage reduction, the Unions reduced their demand for a wage increase from 12 percent to 11 percent. I agree with Respondent that this is not significant What is sig- nificant, however, is that Respondent did not once pro- pose a date or mention a deadline for the implementation of its reduction. When this fifth meeting ended on March 24, the parties scheduled another meeting for March 31. Respondent said nothing about any intention of imple- menting its reduction before the next meeting Nor did Respondent ever tell the Unions that any of its demands to that point represented a "final" position. Yet the very day after this meeting, Respondent posted a notice to employees notifying them that the reduction would be implemented the following Monday morning. As of the meeting on March 24, Respondent had not even submitted a complete proposal, much less a final offer. On April 9, 1987, Respondent presented a new written proposal which for the first time addressed vari- ous other changes Respondent sought in the expired con- tract. Piecemeal bargaining is itself considered evidence of bad faith. The fact that Respondent had not even made a complete proposal is also evidence that the par- ties had not reached impasse. Based on all the facts discussed above, I conclude that Respondent had not bargained to impasse with the Unions as of March 30, 1987, when Respondent imple- mented its wage reduction I find that by implementing its wage reduction without bargaining in good faith to impasse with the Unions, Respondent violated Section 8(a)(1) and (5) of the Act. CONCLUSIONS OF LAW 1. Respondent, Nabors Trailers, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Brotherhood of Boilermakers, Local Union 743 and International Association of Machinists and Aerospace Workers, AFL-CIO, are, and have been at all times material, labor organizations within the mean- ing of Section 2(5) of the Act. 3. The Unions jointly represent a single collective-bar- gaining unit consisting of all production and maintenance employees of the Respondent employed at its Mansfield, Louisiana facility, including truck drivers and leadman, but excluding office clerical employees, professional em- ployees, guards and supervisors as defined in the Act 4. By instituting its wage reduction without giving FMCS the notice required by Section 8(d)(3), Respond- ent violated Section 8(a)(1) and (5) of the Act. 5. By implementing its wage reduction without bar- gaining in good faith to impasse with the Unions, Re- spondent violated Sections 8(a)(1) and (5) of the Act 6. The unfair labor practices which Respondent has been found to have engaged in, as described above, have 1122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce within the mean- ing of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices in violation of Section 8(a)(1) and (5) of the Act, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Counsel for the General Counsel and the Unions seek a remedy requiring Respondent to restore the status quo ante by reinstituting the wage rates which existed prior to March 30, 1987 and by making employees whole for any losses incurred from the date of the wage reduction until the status quo ante is restored . Respondent on the other hand argues that an award of backpay would be unfair and burdensome compared to the "minor viola- tion" which has occurred . Respondent argues that if backpay is ordered, it should be limited to 30 days after notice was given to FMCS. Alternatively, Respondent argues that even in the "worst scenario" backpay should be limited to the period before June 12, 1987 , when Re- spondent tendered its "final offer" to the Unions. The appropriate remedy for a Section 8 (d) violation is more restrictive than the remedy for unlawful implementation of a wage proposal prior to a bona fide impasse. The Board has held that where an employer has failed to give the proper 30-day notice to FMCS prior to implementa- tion of a change in a contract, the backpay remedy is limited to the employees' losses from the date of imple- mentation to a date that is 30 days from the notice to FMCS. Mar-Len Cabinets, supra. In the case at hand, I have not found a violation of Section 8(a)(1) and 5 based solely on Respondent's failure to meet the requirements of Section 8(d). Rather, I have found that Respondent implemented its wage reduction without bargaining in good faith to impasse with the Unions. In such circum- stances, the appropriate remedy is to require restoration of the status quo ante and to make employees whole for any losses incurred from the date of the wage reduction until the status quo ante is restored . See Milwaukee Ter- minal Service, 282 NLRB 637 (1986); Dependable Building Maintenance Ca, 276 NLRB 27 (1985). I find such a remedy to be appropriate. Accordingly, on these findings of fact and conclusions of law, I issue the following recommended5 giving the Federal Mediation and Conciliation Service the notice required by Section 8(d)(3) of the Act. (b) Implementing wage reductions, or other reductions in the hours or working conditions of employees, with- out bargaining in good faith to impasse with the Unions that represent employees at the Mansfield, Louisiana fa- cility. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate policies of the Act. (a) Make whole bargaining unit employees for any loss of earnings or benefits they may have suffered as a result of the unlawful reduction in their wage rates from March 30, 1987, until employees were laid off and the fa- cility closed in January 1988, including interest thereon to be computed in the manner described in New Horizons for the Retarded, 283 NLRB 1173 ( 1987). (b) Preserve and, on request, make available to the Board or its agents for examination and copying , all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (c) Post at its Mansfield, Louisiana facility copies of the attached notice marked "Appendix."e Copies of the notice, on forms provided by the Regional Director for Region 15, after being signed by Respondent's authorized representative, shall be posted immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not al- tered, defaced, or covered by any other material. Fur- ther, in view of the fact that the facility has been closed and employees indefinitely laid off, copies of the appro- priate notice shall be mailed by Respondent to all bar- gaining unit employees at their last known address. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. ' 6 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 Na- tional Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the Nation- al Labor Relations Board." APPENDIX ORDER Respondent, Nabors Trailers, Inc., Mansfield, Louisi- ana, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Instituting wage reductions , or other reductions in the hours or working conditions of employees, without S If no exceptions are filed as provided by Sec . 102.46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec . 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- 1• NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency Of The United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. Section 7 of the National Labor Relations Act gives em- ployees these rights. NABORS TRAILERS 1123 To organize _ To form, join, or assist any union To bargain collectively through representatives of their own choice To act together for other mutual aid or protec- tion To choose not to engage in any of these protect- ed concerted activities. WE WILL NO'r institute wage reductions, or other re- ductions in the hours or working conditions of employ- ees, without giving the Federal Mediation and Concilia- tion Service the notice required by-Section 8(d)(3) of the Act. WE WILL NOT implement wage • reductions, or other reductions in the hours or working conditions of employ- ees, without bargaining in good faith to impasse with International Brotherhood of Boilermakers; Local Union 743 and International Association of Machinists and Aerospace Workers, AFL-CIO, the Unions that repre- sent employees at our Mansfield , Louisiana facility. WE WILL NOT in any like or related manner interfere with, restrain or coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL make whole bargaining unit employees for any loss of earnings or benefits they may have suffered as a result of the unlawful reduction in their wage rates from March 30, 1987, until employees were laid off and the facility closed in January 1988 , including appropriate interest thereon. NABORS TRAILERS, INC.