Jones Dairy Farm

JONES DAIRY FARM Jones Dairy Farm and Local No. P-1236, United Food and Commercial Workers Union, AFL- CIO-CLC. Case 30-CA-9395 June 15, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On June 23, 1987, Administrative Law Judge Walter H. Maloney Jr. issued the attached decision. The Respondent filed exceptions and a supporting brief, to which the General Counsel filed an an- swering brief, and the Charging Party (the Union) filed an opposition." The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions as modified.2 On June 23, 1986,3 during an unrelated griev- ance meeting,4 the Respondent informed the Union that it was considering implementing a "rehabil- itation/work hardening" program for employees in- jured both on and off the job. The Respondent ex- plained that the program entailed assigning injured employees to light duty jobs at Opportunities, Inc., an unrelated, nonprofit facility that provides jobs for the handicapped and specializes in counseling, retraining, and rehabilitating disabled workers. The Respondent explained further that its interest in the program was based on a desire to reduce its work- ers' compensation insurance costs, and it requested the Union's support in the endeavor. Two days later, representatives of the Respondent, the Union, and the Respondent's insurer, EBI, toured the Op- portunities, Inc. facility . Although the Respondent had scheduled another meeting on the subject for July 8, Union President William Roberts notified the Respondent that, on advice of counsel, no union representative would attend . Thereafter, at a i Thereafter, on March 27, 1989, the Respondent and the Union filed copies of the decision of the Wisconsin Department of Industry , Labor, and Human Relations, Workers' Compensation Division in Castanon V. Jones Dairy Farm, and exceptions thereto, respectively. As that decision expressly omits consideration of the National Labor Relations Act, we find that it is not determinative of the issues presented in this case. 2 Among other things, the Respondent excepts to the inclusion of a vi- sitatorial clause in the recommended Order. As there exists no extraordi- nary circumstance which warrants altering the current practices and pro- cedures regarding discovery for compliance purposes , we shall delete this provision from the Order. See Cherokee Marine Terminal, 287 NLRB 1080 (1988) 3 Unless otherwise specified, all dates refer to 1986. 4 At all times material, the Respondent and the Union had in effect a collective-bargaining agreement that runs from November 9, 1985, to Oc- tober 1, 1988. 113 regularly scheduled grievance meeting held on July 14, the Respondent raised the matter again. Ac- cording to Willard Lenton, the Respondent's vice president for manufacturing, Roberts indicated that the Union was "not ready to set down on the matter in total detail" but did inquire how much the Respondent would pay employees, whether the program was bargainable, and whether it was a mandatory or nonmandatory subject of bargaining. Lenton urged that the Union meet with EBI to obtain answers to its questions; however, Roberts said any such meeting would have to take place after August 11 because of his union work sched- ule. No meeting between EBI and the union repre- sentatives took place and, on September 29 at an- other grievance meeting, the Respondent informed the Union that it would implement the program on October 15. On September 30, the Union requested that the Respondent delay implementation and meet with the Union. The Respondent agreed and met with union representatives on October 17.5 At this meeting, the Union stated that its major con- cern was with employees working off the premises. The Union also stated that it believed the program was covered by the collective-bargaining agree- ment and reiterated questions concerning whether it had the right to strike. 6 The meeting concluded with International Union Representative Bill Waters' saying that if the Respondent was going to institute the program, it would have to do so itself and that the Union could not embrace the pro- gram. Waters told the Respondent to "do what you have to do" and requested that the Union be kept informed as the program evolved. On November 3, the program was instituted, and on November 7, the Union filed a grievance re- garding it. On November 12, the Respondent ex- cluded from the program employees injured off the job because it believed that requiring their partici- pation might conflict with the sick pay provisions of the collective-bargaining agreement.? Finally, on 5 Employee Relations Manager William Shalhoub testified that Roberts phoned him and requested "a meeting," although Lenton testified that Roberts contacted Shalhoub and said the Union wanted to "negotiate" the matter. 6 The Respondent and the Union never definitively answered these questions. 7 Art. XVI-sick pay states, in pertinent part, that in accordance with the sick pay schedule. 1. Regular full-time employees with twelve (12) months or more of continuous service with the Company , who are absent because of physical disability due to sickness or accident (except where such disability is covered by the Workmen's Compensation Law of Wis- consin), where such disability is supported by acceptable medical evidence, shall receive Sick Pay 2 Subject to the other provisions of this Article, Sick Pay shall be payable for each period the employee is prevented by such disability from performing any and every duty pertaining to the employee's occupation. Continued 295 NLRB No. 20 114 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD November 13, the Union filed the 8(a)(5) and (1) charge that is the subject of this case. As ultimately implemented , the program entailed assigning employees injured on the job to light duty work at Opportunities , Inc., upon a doctor's certification that they could perform tasks within certain proscriptions (e.g., no lifting of 25 pounds or more). Employees so assigned were paid $4 an hour by the Respondent for their work at Opportu- nities, Inc. Pursuant to a disability formula , the em- ployees' temporary total disability benefit (two- thirds of the regular weekly salary) was partially offset by the $4 hourly wage. Employees who re- fused to perform light duty work at Opportunities, Inc. received the reduced temporary total disability benefit but not the $4 an hour they would have earned by participating in the program . Thus, em- ployees who refused to participate in the program incurred a reduction in their disability benefit. The judge concluded that the Respondent violat- ed Section 8(a)(5) and (1) of the Act by unilaterally implementing the program during the term of the collective-bargaining agreement . In so doing, he re- jected the Respondent's argument that the subject was mandated by state law and that the Respond- ent was not obliged to bargain about it . The judge further found that workers' compensation generally is a mandatory subject of bargaining, but that in this instance the program was a permissive subject because it constituted a proposal to modify or der- ogate the existing unit by requiring employees to work outside the unit.8 Having concluded that the program was a permissive subject, the judge reject- ed the Respondent's alternative contention that, in any event, it had bargained with the Union and im- plemented the program only after reaching im- passe. He also found no merit in the Respondent's contention that language contained in article XIV (the no-strike/no-lockout provision) of the collec- tive-bargaining agreement was tantamount to a "zipper" or waiver clause. We agree with the judge's conclusions that the state compensation law did not insulate the pro- gram from the bargaining obligations imposed by 5. In case of disability which would have been covered by this ar- ticle but for the fact that they are covered by the Workmen's Com- pensation Law of the State of Wisconsin, the employee, if eligible under this article, will receive the difference between what he re- ceived as compensation under said law and the amount he would have received under this article but for the exclusion of the disability because of his being covered by the Workmen's Compensation Law 8 In its exceptions, the Respondent restates arguments made before the judge and contends that the judge's analysis embraces no theory litigated at the hearing Although we note that this analysis was presented in the General Counsel's posthearing brief to the judge , our disposition of this case makes it unnecessary to pass on this exception. the NLRA.9 The Respondent's argument is a novel attempt to embrace the theory adopted by the Su- preme Court to sustain state minimum standards legislation in the face of employer contentions that the NLRA should outright preempt those laws. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987); Metropolitan Life Insurance Co. v. Massachu- setts, 471 U.S. 724 ( 1985). Just as in those cases the Act was held not to interfere with the financial benefits that state law granted to employees-one- time severance payments and minimum mental health benefits, respectively-at the employers' ex- pense, the Respondent asserts that the Act should likewise not interfere with the rights that Wiscon- sin law granted to employers to defray compensa- tion expenses through a light duty program. The Respondent, however, misconceives the import of the precedents. The Court's decisions do not go so far as to hold that state law may entirely supplant the Act and the bargaining obligations under it . Rather, the two statutory schemes can often peacefully coexist in our Federal system of Government . This is so de- spite the fact that a state law may set minimum standards for the benefit of employees below that employers will not be permitted to bargain. As the Court stated in Fort Halifax: Both employers and employees come to the bargaining table with rights under state law that form a "backdrop" for their negotiations . .. . Thus, the mere fact that a state statute pertains to matters over which the parties are free to bargain cannot support a claim of pre- emption, for "there is nothing in the NLRA .. . which expressly forecloses all state regu- latory power with respect to those issues . . . that may be the subject of collective bargain- ing."10 In the instant case, however, the option afforded to employers under Wisconsin compensation law to obtain light duty work for partially disabled em- ployees is not the type of minimum standard that would foreclose bargaining between the Respond- ent and the Union. As we understand it, the Wis- consin law does not mandate that an employer have in place a light duty work program. Although an employer that has light -duty jobs available that meet the restrictions imposed by a physician is af- forded the privilege of ameliorating its compensa- tion liability, in no sense would it be illegal not to 8 Wisconsin Workers' Compensation Act, 1985- 1986 Wis. Stat. § 102.01 et seq. 10 Fort Halifax Packing Co. v. Coyne, 482 U S. at 21 (citations omitted) JONES DAIRY FARM have such jobs or such a "program." 11 Thus, we think that the work hardening/rehabilitation pro- gram implemented by the Respondent is a bargain- able matter. Contrary to the judge, however, we find that the program is a mandatory subject rather than a per- missive subject of bargaining. In this regard, we note that although worker's compensation benefits are provided by state law, they nonetheless consti- tute "`emoluments of value' which accrue to 'em- ployees out of their employment relationship."' NLRB v. Central Illinois Public Service Co., 324 F.2d 916, 919 (7th Cir. 1963), quoting Inland Steel Co. v. NLRB, 170 F.2d 247, 250-251 (7th Cir. 1948). Moreover, temporary disability benefits affect active employees who, albeit disabled, have expectations of further employment with the Re- spondent.12 In finding that the program is a mandatory bar- gaining subject, we do not reject as irrelevant the judge's inquiry into whether implementation of this program would be in derogation of the bargaining unit and would consequently constitute merely a permissive subject of bargaining. That argument has at least surface appeal; for it is true that assign- ing employees to Opportunities, Inc. in effect re- moves them from the aegis of the collective-bar- gaining agreement and therefore might, at least on its face, be characterized as an "attack on the integ- rity of the established bargaining unit" as the phrase is used in Shell Oil Co., 194 NLRB 988, 995 (1972). Nevertheless, we find that such a finding is inappropriate under the circumstances presented here. As a general rule employees who are out of work owing to a temporary compensable disability remain unit employees. Though they are inactive because of injury, they are expected to return to active status. See Atlanta Dairies Cooperative, 283 NLRB 327 (1987). Having determined that the program is a manda- tory subject of bargaining, we next must decide whether the Respondent was free to implement the program in the circumstances of this case. For the reasons that follow, we find that the Respondent could not lawfully implement the work hardening program without the Union's affirmative assent. It is uncontested that the Union withheld such assent. The Respondent contends that the no-strike/no- lockout provision of the parties' collective-bargain- 11 Cf Bechtel Construction Y. Carpenters Local 1278, 812 F.2d 1220, 1222, 1226 (9th Cir. 1987). We note that the 1985-1986 Wisconsin Statute , § 102.35(3), which makes an employer's refusal to rehire a disabled employee unlawful when it has work available within the employee's physical capacity, specifies that such rehires are governed by, among other things, "the seniority provisions of a collective-bargaining agreement " 12 Compare Allied Chemical Workers Local I v. Pittsburgh Plate Class Co, 404 U.S. 157 (1971) 115 ing agreement clearly and unmistakably waives the Union's right to bargain about the rehabilitation work program and that therefore the Respondent was free to implement it unilaterally . We agree with the judge that the provision has no such effect. In pertinent part that provision states: 1. Since arbitration is provided for grievances, since the procedures of the National Labor Relations Board are available for claims of unfair labor practices , and since negotiation on matters not covered by this Agreement is to be deferred until the expiration of this Agreement, the Union will not call or sanction any strike, stoppage slowdown or other interference with work during the terms of this Agreement and the Company will not lock out any or all of its employees. [Emphasis added.] What this provision does is essentially preserve the status quo, during the term of the agreement, as to mandatory bargaining subjects not covered by the agreement, just as Section 8(d) preserves the status quo as to subjects covered by the agreement. Under Section 8(d) of the Act, neither party may compel the other to bargain during the term of the contract over any change in terms and conditions of employment that are established in the contract. NLRB v. Scam Instrument Corp., 394 F.2d 884, 886-887 (7th Cir. 1968), cert. denied 393 U.S. 980 (1968); Oak Cliff-Golman Baking Co., 202 NLRB 614, 616 (1973). This means that during the term of the agreement no change in a contractually cov- ered employment condition may be made unless there is mutual assent to the change . Ibid. The pro= vision quoted above places employment conditions that were not negotiated into the agreement on the same footing : negotiation on these matters is to be "deferred" until contract expiration. If negotiation is to be deferred, then neither party is free during the contract term either to insist that the other party bargain over the subject or to force the other party to submit to a unilateral change . We find no evidence of bargaining history in the record that contradicts the plain significance of this lan- guage.13 18 This provision may properly be characterized as a "zipper clause," but not all zipper clauses are alike . For example, this case is distinguish- able from Columbus Electric Ca, 270 NLRB 686 (1984), in which the clause provided that the collective-bargaining agreement was to super- sede "all prior agreements and understandings" and that it would be "the sole source of any and all rights ...... In the context of bargaining that indicated that the Union was aware that the provision contemplated eliminating all past practices not incorporated in the agreement, the clause was read by the Board as permitting the employer to eliminate, unilaterally, a Christmas bonus that had been given in the past but that was not included in the agreement . There is no counterpart to this limit- ed authorization of unilateral action in the agreement at issue in this case. Continued 116 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The Respondent's institution of the work hardening/rehabilitation program clearly constitut- ed a change in an existing condition not expressly covered by. the agreement. As described in the judge's decision, prior to the Respondent's institu- tion of the program, industrially injured employees stayed off the job until they were able to perform the work required of their positions , and they col- lected the full workmen's compensation benefit permitted during the period of their disability (i.e., two-thirds of their weekly salary). Consequently, the program as ultimately implemented varied the past practice. Nothing in the management-rights, sick leave, no-strike/no-lockout provisions or any other section of the collective-bargaining agree- ment permitted the Respondent to alter the status quo in the manner that it has in this case . Further, it is undisputed that the subject was not discussed during negotiations for the current contract. Be- cause this matter is not covered by the agreement, and because the agreement expressly states that bargaining regarding omitted matters is deferred until the agreement expires, we affirm the judge's conclusion that the Respondent was not free to alter the status quo without the Union's consent. In so doing, it violated Section 8(a)(5) and (1) of the Act. ORDER The National Labor Relations Board orders that the Respondent, Jones Dairy Farm, Ft. Atkinson, Wisconsin, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Refusing to bargain in good faith with Local P-1236, United Food and Commercial Workers Union, AFL-CIO-CLC as the exclusive collective- bargaining representative of its production and maintenance employees employed at its Ft. Atkin- son, Wisconsin plant. (b) Unilaterally changing terms and conditions of employment of bargaining unit employees by im- plementing the work hardening/rehabilitation pro- gram without the Union's consent. (c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. In Rockford Manor Care Facility, 279 NLRB 1170 (1986), the finding that the contract privileged the employer's unilateral action with respect to health insurance rested on both a zipper clause and a broad manage- ment-rights clause that affirmatively gave the employer the right to alter unilaterally any aspects of working conditions not controlled by the agreement. No such broad grant of authority is conveyed by the agree- ment in the instant case. Compare Pepsi-Cola Distributing Ca, 241 NLRB 869 (1979) (employer could not unilaterally eliminate bonuses simply on the bases of management-rights clause and a no-bargaining-obligation- during-contract clause). 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Make whole all the employees to whom the work hardening/rehabilitation program has been applied for any diminution in disability benefits that they have suffered by reason of their participation, or refusal to participate, in the program, with inter- est, as computed 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 copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at the Respondent's Ft. Atkinson, Wis- consin plant copies of the attached notice marked "Appendix." 14 Copies of the notice , on forms pro- vided by the Regional Director for Region 30, after being signed by the Respondent's authorized representative shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are custom- arily 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. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 14 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 Judge- ment Of The United States Court Of Appeals Enforcing An Order Of The National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to bargain in good faith with Local No. P-1236, United Food and Commer- cial Workers Union, AFL-CIO-CLC as the exclu- sive representative of the production and mainte- nance employees employed at our Ft. Atkinson, Wisconsin plant. WE WILL NOT unilaterally change the terms and conditions of employment of bargaining unit em- JONES DAIRY FARM 117 ployees by implementing the work hardening/- rehabilitation program without the Union's consent. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL make whole, with interest, all employ- ees to whom the work hardening/rehabilitation program has been applied for any diminution in disability benefits that they have suffered by reason of their participation, or refusal to participate, in the program. JONES DAIRY FARM Paul Bosanac, Esq., for the General Counsel. Herbert P. Wiedemann, Esq., of Milwaukee, Wisconsin, for the Respondent. Kenneth R. Loebel, Esq., of Milwaukee, Wisconsin, for the Charging Party. DECISION FINDINGS OF FACT STATEMENT OF THE CASE WALTER H. MALONEY JR., Administrative Law Judge. This case came on for hearing before me at Ft. Atkinson, Wisconsin, on an unfair labor practice complaint,' issued by the Regional Director for Region 30, which alleges that Respondent Jones Dairy Farm2 violated Section 8(a)(1) and (5) of the Act. More particularly, the com- plaint alleges that, during the term of a collective-bar- gaining agreement between the Respondent and Local P- 1236, United Food and Commercial Workers Union, AFL-CIO-CLC (the Union), the Respondent violated the terms of that contract and of its duty to bargain under Section 8(d) of the Act by unilaterally instituting a work-hardening/rehabilitation program in which tempo- rarily injured employees were required to participate if they desired to receive the full amount of temporary total disability payments due them under the Wisconsin Workers Compensation Act. Respondent has several de- fenses. It argues that the question of workmen's compen- sation payments is not a mandatory subject of bargaining and is covered exclusively by state law, and that state law in Wisconsin permits the Respondent to require re- ' The principal docket entries in this case are as follows : Charge herein filed by the Union against the Respondent on November 17, 1986; com- plaint issued against Respondent by the Director, Region 30, on January 7, 1987; Respondent's answer filed on January 14, 1987, hearing held in Ft. Atkinson, Wisconsin, on April 9, 1986. 2 The Respondent admits, and I find, that it is a Wisconsin corporation which maintains an office and place of business in Ft. Atkinson, Wiscon- sin, where it is engaged in the processing of pork sausage and other meat products. In the course and conduct of this business, the Respondent, in a 12-month period ending October 31, 1986, sold and shipped from its Ft Atkinson facility directly to points and places outside the State of Wis- consin goods and materials valued in excess of $50,000. Accordingly, it is an employer engaged in commerce within the meaning of Sec 2(2), (6), and (7) of the Act The Union is a labor organization within the meaning of the Act cipients of temporary total disability payments to per- form light work either at its own plant or at a rehabilita- tion facility during periods of convalescence. Respondent further argues that it bargained with the Union to im- passe over this question so it was authorized by the Act to implement its work-hardening/rehabilitation program unilaterally. Respondent also argues in the alternative that the Union impliedly consented to the implementa- tion of this program. Upon these contentions the issues herein were framed.3 1. THE UNFAIR LABOR PRACTICES ALLEGED Notwithstanding its name, Respondent Jones Dairy Farm is not engaged in dairying but operates a pork processing plant at Ft. Atkinson, Wisconsin, where it produces sausage and bacon for nationwide sale and dis- tribution. At present it employs about 130-140 produc- tion and maintenance employees. It is a family-owned operation and, for a period of many years, has been a party to a series of collective-bargaining agreements with the Charging Union covering its production and mainte- nance employees. The most recent contract came into effect on November 9, 1985, and expires October 1, 1988. Many of the jobs covered by the contract are arduous and physically demanding. In the fall of 1985, the Re- spondent was told by its compensation carrier that the insurance company no longer desired to continue to pro- vide workmen's compensation liability coverage because of the Respondent's poor experience and rating. Re- spondent then entered into a compensation insurance agreement with its present carrier, EBI. This contract does not require the establishment of a limited-duty reha- bilitation program. However, to reduce its premiums, the Respondent, with the cooperation of its present carrier, searched about for ways and means to provide its em- ployees a limited-duty rehabilitation program. One of the problems it faced was the fact that then, as now, Re- spondent has no limited-duty jobs within the bargaining unit or elsewhere at its plant to which injured employees can be assigned during what Wisconsin law refers to as the "healing period." Faced with these circumstances, the Respondent became seriously interested in retaining the services of Opportunities, Incorporated of Jefferson County (Wis- consin), a nonprofit organization which provides a range of therapeutic and rehabilitation programs for injured and handicapped persons. Among the services provided by Opportunities, Inc., are two work related programs carried on in factory settings located on the Opportuni- ties, Inc. premises at Ft. Atkinson. One plant is devoted to providing work opportunities for seriously and perma- nently handicapped individuals. Plant Two is operated for the benefit of persons with reduced impairment, either because of industrial injuries or other reasons, and is designed to assist such persons in work rehabilitation. Opportunities, Inc. obtains orders from 30 or more com- panies (including the Respondent) for products whose manufacture involves simple tasks which can be per- formed by persons having varying disabilities. Individ- a Errors in the transcript have been noted and corrected. 118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD uals referred to Opportunities, Inc. are assigned to jobs depending on the nature and degree of their disability. While working they are subject to the supervision of re- habilitation specialists employed by Opportunities, Inc., who provide counseling and assistance as needed . Oppor- tunities, Inc. is paid by the customers for whom produc- tion is completed . It is also paid a service fee, charged on an hourly basis, by individuals or employers who have employees working on its premises . Under arrange- ments which were concluded by the Respondent with Opportunities, Inc., the Respondent became obligated to pay such a fee for any employees referred to this pro- gram. In addition, an employer assigning its employees to work in this program will normally pay its employees an hourly wage for their services based on time actually worked, which earnings supplement reduced temporary disability payments made under the state workmen's compensation statute which are then reduced in accord- ance with a formula provided by state law.4 As dis- cussed later, the Respondent determined to pay its em- ployees assigned to work under this program a wage of $4 per hour, a figure which is about one -third the normal earnings provided under its collective-bargaining agree- ment with the Union. Necessarily, the nature and extent of any employee's activity is controlled by the employ- ee's physician, who must determine the extent of tempo- rary disability, the number of hours a partially disabled employee may work, and any limitations relating to the type of work which may be assigned. At a regular third step grievance meeting between company and union officials on June 23, 1986, the Re- spondent notified the Union that it was considering a return to work program and several other programs in the area of accident prevention and injury and health counseling. Respondent made available to the Union a company policy statement, addressed to all employees, which briefly outlined the goals and objectives of this program. The statement indicated that the contemplated programs would include accident prevention, health and safety counseling , rehabilitation therapy, work hardening to help injured employees reestablish confidence and strength prior to returning to their regular job, and "wellness" programs . On June 25, company and union officials, including a representative of the Respondent's compensation carrier, toured the premises of Opportuni- ties, Inc. to examine first hand the programs in place at that institution relative to rehabilitation of employees suf- fering industrial injuries. On July 14, at another griev- ance meeting, the topic of work hardening and rehabili- * The reduction-in-compensation payments made by a carrier to an in- jured employee doing limited-duty work is not a dollar-for-dollar reduc- tion. The formula used may leave an employee who performs productive work under this arrangement in a slightly better financial position than he would be if no such program had been put into effect, if the employee's earnings for doing limited-capacity work are added to the employee's temporary disability payments . Necessarily the amount paid for supple- mental work will determine this result If, as here, an employee refuses to participate and his compensation payments are reduced without any sup- plementation by actual earnings, he is obviously worse off financially than he was before this program was put into effect when no obligation to work was imposed as a condition for receipt of any compensation ben- efits. tation was again brought up by the Respondent but no agreement was reached with the Union. On October 17, a special meeting of union and compa- ny representatives was called at the Union's request. The Company was about to institute a work-hardening pro- gram under the auspices of Opportunities, Inc. However, at that time there was not in existence any specific docu- ment setting forth the specific elements of the program because the plan had not yet been finalized by the Re- spondent and Opportunities, Inc. Respondent's spokes- man told union representatives in general terms how it would work. In particular, they told union representa- tives that an employee who was drawing temporary dis- ability payments arising out of on -the-job injuries would be medically evaluated to determine if he or she could perform light work. If such work was authorized by a doctor, the employee would be assigned to work at Op- portunities, Inc., and would be paid an hourly wage by the Respondent. At this time the amount of the hourly wage may not have been determined .5 The Union was informed that any employee assigned to this program would find his weekly compensation payment reduced, as discussed above, but he would receive from the com- bination of the two sources more than he would receive solely from weekly temporary partial disability pay- ments. Union President William Roberts told the Re- spondent that the Union would not agree to the proposal and added, "Do what you have to do." On October 24, the Respondent gave the Union formal written notice that the program was being put into effect on November 3 and would apply to injuries due both to work related and nonwork related accidents . Among other things the letter stated: Injured or ill employees, both work related and non-work related, will be matched to "limited" duty jobs either at Jones Dairy Farm or at Carriers, In- corporated, a division of Opportunities, Incorporat- ed. The plant nurse at Jones Dairy Farm will coordi- nate the program between the employee, the medi- cal community, the respective insurance company, and the job site. Under this program, the employee, whether absent due to work related or non-work related injury or illness, will be compensated as we dis- cussed. In a letter dated October 31, 1986, the Respondent also notified each of its employees of this program and how it would operate. Early in November, the Respondent decided not to in- clude employees injured off the job in the new program because it felt that there might be a possible conflict be- tween a provision in the existing collective-bargaining agreement relating to sick pay and the operation of the 6 The Respondent determined that $4 an hour would be an appropriate sum to pay participants in this program based on its own wage scale and its evaluation of employee compensation in the area Respondent admits that it did not consult with the Union before arriving at this figure or putting it into effect. JONES DAIRY FARM 119 program. The Union was so informed . On November 11, the Union filed a grievance protesting the new program as it applied to job-related injuries . After the grievance was rejected at the first two steps of the grievance pro- cedure, the parties decided to hold arbitration in abey- ance pending the outcome of this proceeding , which had been initiated by a charge filed by the Union on Novem- ber 17. Between November 1986, and the date of the hearing, the Respondent assigned seven bargaining unit employees to work at Opportunities, Inc., as part of the work-hardening/rehabilitation program. All of them had been receiving temporary disability payments for work- related injuries. Four employees agreed to participate.6 Three refused to participate and suffered a reduction in total receipts for disability, having forfeited the $4 per hour paid by the Respondent as a supplementation for reduced temporary partial disability payments .7 All who did participate worked at the Opportunities, Inc. prem- ises under the supervision of rehabilitation counselors employed by that organization. II. ANALYSIS AND CONCLUSIONS A. Federal Preemption and the Validity of Wisconsin Worker's Compensation Laws In resisting the complaint in this case, the Respondent makes several alternative arguments relative to whether its proposal, implemented on November 3, 1986, to assign bargaining unit employees to nonbargaining unit jobs as part of a work hardening/rehabilitation program is or is not a mandatory subject of bargaining. Respond- ent takes the initial position that what it did is not a man- datory subject of collective bargaining under the Nation- al Labor Relations Act (NLRA) because its actions were authorized by provisions of the Wisconsin Workers Compensation Act, and state law not only permits such work assignments but also permits the Respondent and its insurance carrier to dock the weekly temporary dis- ability payments of persons assigned to this program, even if this means that a nonparticipating employee ends up receiving less in compensation benefits than he did before the program was implemented. To quote the Re- spondent's brief, The Company cannot be forced to forego its right to adopt this rehabilitation work program in collective bargaining with the Union unless the Compensation Act is pre-empted by the NLRA. There is no such pre-emption and consequently the program is not a mandatory subject of bargaining. ... Metropolitan Life8 makes it clear that a state regulatory law such as the Compensation Act is not pre-empted by the NLRA. Consequently, the Union cannot be required to bargain about employee rights under the Compensation Act, such as the level and scope of benefits or the requirement that the em- 0 Those who participated in the program were Arthur Buchholtz, Lloyd Christianson, Tom Gjertson, and Donald Mathison 7 Those who refused to participate were Dornan Pennell, Leslie Schlesner, and Roy Castanon. 8 Metropolitan Life Insurance Co. v. Massachusetts, 471 U S 724 (1985). ployer pay the full cost. Likewise, the Company cannot be required to bargain about its rights under the Compensation Act, such as the right to pay a temporary partial disability indemnity, rather than a temporary total disability indemnity , when the em- ployee is able to perform limited duty work. Respondent also argues that, if compensation benefits or its proposal are found to be mandatory subjects of bargaining, it did bargain with the Union in good faith to impasse and was entitled, under Benne Katz,9 to imple- ment these new proposals even during a contract term because the Union herein had waived any right to bar- gain about these matters by virtue of provisions found in the applicable collective-bargaining agreement. With reference to the major premise of this argument, both the Respondent and the Charging Party (and to a certain extent the General Counsel) have offered detailed positions based on Wisconsin law and the administrative procedures followed by the Worker's Compensation Di- vision of the Department of Industry , Labor, and Human Relations, which administers the Wisconsin Worker's Compensation Act, 1985-86 Wis. Stat. sec. 102.01- 102.75. Far from merely contending that Federal pre- emption does not exist , which was the issue in Metropoli- tan Life and other related cases, the Respondent's initial argument runs perilously close to being a claim of state preemption by occupation of the field, a result which would set the Supremacy Clause of the Constitution on its ear. Both the Respondent and the Charging Party wish to avoid any preemption of the Wisconsin Worker's Compensation Act by the NLRA. However, this issue must be addressed by focusing on the NLRA itself, not on Wisconsin law, because, to the extent Congress may have included compensation for industrial injuries with the ambit of the NLRA's definition of bargainable topics, nothing that Wisconsin may do, either by statute, admin- istrative regulation, or judicial decision, can overturn that definition. Garner v. Teamsters Local 776, 346 U.S. 485, 488 (1953).10 In 1935, Congress defined the duty to bargain collec- tively in good faith in the NLRA to include "wages, hours, and other terms and conditions of employment." That aspect of the definition, found in Section 8(d) of the NLRA, has not been revised to this day. In imposing this obligation on employers engaged in interstate commerce (and later on labor organizations), Congress did not item- ize each and every element to be embraced in its defini- tion of the duty to bargain.1I When the NLRA was en- acted, most but not all States had provided , within their respective boundaries, comprehensive schemes for com- pensating employees who had suffered industrial inju- 9 NLRB v. Katz, 369 U S 736 (1962). 10 "It is elementary that what Congress has constitutionally given, the state may not constitutionally take away." Auto Workers Local 232 v Wis- consin State Employment Board, 336 U.S. 245, 254 (1949). 11 "The National Labor-Management Act, as we have pointed out, leaves much to the states, though Congress has refrained from telling us how much. We must spell out from conflicting indications of Congres- sional will the area in which state action is still permissible." Garner e Teamsters Local 776, supra at 488 120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ries. 12 The protection afforded to employees under these statutory schemes was premised upon a new theory of payment wholly distinct from the previous common law theory of damages. Workmen's compensation payments were deemed to be a form of compensation for services rendered by an employee to his employer and, because of this fact, common law defenses to actions for civil damages-defenses such as the fellow servant rule and assumption of the risk-could no longer be asserted to defeat employee claims for hospital and medical benefits, as well as for temporary or permanent impairment of earning capacity. The principal focus of inquiry was not who was negligent, but whether the injury in question arose out of or in the course of employment, although the definition of coverage might vary in minor detail from State to State. C.J.S. Workmen's Compensation, sec. 7, p. 55. No party has pointed out to me, and I have been unable to discover, anything in the legislative history of the NLRA which specifically addresses the question of state workmen's compensation laws. Hence one must look to other "conflicting indications of Congressional will" to determine whether Congress intended to cover the subject in its definition of collective bargaining and, if it did, whether it intended to preclude the States from any power to legislate in that area by virtue of congres- sional power stemming from the Supremacy Clause. It is congressional intention, not a Federal constitutional pro- vision or the language of state laws and administrative regulations, which is the determinative factor. The definition of the duty to bargain was formulated by Congress at a time when at least some states had not yet acted to provide employees with workmen's compen- sation benefits. Moreover, the scope of coverage provid- ed by States which had enacted such laws was necessari- ly subject to wide variation. Some types of industries might be excluded by some state statutes, and other state laws might exempt from coverage other businesses simply on account of their size, thus leaving many class- es or categories of employees still subject to the vicissi- tudes of the common law when they sought redress for injuries sustained while performing bargaining unit work. These myriad differences in coverage almost defy sys- tematic analysis, and it was this situation which confront- ed Congress in 1935 when it imposed upon employers engaged in commerce a duty to bargain collectively. As discussed before, the prevailing, though not universal, perception of redress for industrial injuries had by then come to regard such payments as a form of compensa- tion for services performed, not as civil damages which iE By 1935, all States but Arkansas and Mississippi had enacted work- men's compensation laws. These two states passed workmen 's compensa- tion laws in 1939 and 1949, respectively. Florida and South Carolina were engaged in enacting workmen's compensation statutes in 1935 just as the NLRA was in its final stages of development. Wisconsin, whose laws are being litigated here by the Charging Party and the Respondent, was the first to enact a workmen's compensation statute. Ch. 50, Laws of 1911, effective May 3, 1911. See Digest of Workmen 's Compensation Laws in the United States and Territories, with Annotations, 11th Edition, Re- vised to Dec. 1, 1929, Compiled by F. Robertson Jones for Association of Casualty and Surety Executives, page xii; see also Schneider's Work- men's Compensation Statutes, 3d ed. (1941), and supplement to Third Edi- tion (1948). an employee might receive on the same legal footing (or perhaps on a less advantageous footing) as any stranger to the bargaining unit . Moreover, the language of Sec- tion 8(d) of the NLRA is broad and general . It encom- passes a whole host of items, most of which were chal- lenged at the outset as not being bargainable matters and which did not attain general acceptance in the catalogue of "wages, hours, and other terms and conditions of em- ployment" until each item had been litigated and de- clared to be such, either by the Board or a court. 13 If an employer contends that disability payments and health and hospitalization coverage for bargaining unit employ- ees for injuries sustained while doing bargaining unit work are outside the definition of Section 8(d) of the NLRA, it must necessarily argue that these subjects were of merely a "peripheral" concern to Congress when it enacted the NLRA, to use a phrase employed by the Supreme Court in discussing the preemptive power of the Act. ta In light of the many intimately related sub- jects which have been found to be well within the statu- tory definition of "wages, hours, and other terms and conditions of employment," it is idle to contend that compensation for injuries to bargaining unit employees sustained while doing bargaining unit work was some- how overlooked or excluded. Accordingly, I conclude that these matters are mandatory subjects of bargaining and that, in certain contexts, the Respondent was under a general obligation stemming from Federal law to negoti- ate concerning them with the exclusive bargaining repre- sentative of its employees. Having come to this conclusion, does it follow that the Wisconsin Worker's Compensation Act is wholly pre- empted by the National Labor Relations Act? Early on, the Supreme Court held that "by the Taft-Hartley Act, Congress did not exhaust the full sweep of legislative power over industrial relations given by the Commerce Clause." Weber v. Anheuser-Busch, Inc., 348 U.S. 468, (1955). This same premise was recently reaffirmed in the Supreme Court's latest decision in the area of Federal ra See, for example. Christmas bonuses-NLRB Y. Citizens Hotel Ca, 326 F.2d 501 (5th Cir. 1964). Pensions-Inland Steel Ca , 77 NLRB 1 (1948) Retirement benefits-Allied Chemical Workers Local I v. Pittsburgh Plate Glass Ca, 404 U S. 157 ( 1971). Group health insurance- W. W. Cross & Co. Y. NLRB, 174 F.2d 875 (1st Cir. 1949). Changes in health insurance coverage and premiums-Oil Workers V. NLRB (Kansas Refined Helium Co.), 547 F.2d 575 (D.C. Cir. 1976). Disability insurance-Borden, Inc., 196 NLRB 1170 (1972) Employer provided living accommodations-Elgin Standard Brick Mfg. Co, 90 NLRB 1467 (1950). Coffee at coffee breaks-Chemtronics Inc., 236 NLRB 178 (1978). Industrial safety-Boland Marine & Mfg. Co., 225 NLRB 824 (1976) Workloads-Beacon Piece Dyeing & Finishing Co., 121 NLRB 953 (1958). Sick leave-NLRB v. Katz, supra; Quality Engineered Products, 267 NLRB 593 (1983). Wages subject to Federal wage and price controls-Seryis Equipment Ca, 198 NLRB 266 (1972). Employee physical examinations-Leroy Machine Co. , 147 NLRB 1431 (1964). i4 San Diego Building Trades Council v. Garman, 359 U.S. 236 (1959), quoted with approval in Machinists Lodge 76 Y. Wisconsin Employment Relations Commission , 427 U.S. 132, 137 (1976). JONES DAIRY FARM 121 preemption under the NLRA. ("The National Labor Re- lations Act contains no express pre-emption provision." Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 19 fn. 14 (1987). In carrying out this general principle, the Su- preme Court, in Garmon, announced a functional test which is of considerable importance in this case: When it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by Section 7 of the National Labor Rela- tions Act, or constitute an unfair labor practice under Section 8, due regard for the federal enact- ment requires that state jurisdiction must yield. To leave the States free to regulate conduct so plainly within the central aim of federal regulation involves too great a danger of conflict between power assert- ed by Congress and requirements imposed by state law. [Garmon, supra at 244.] The practical applications of this functional test have in- volved asserted conflicts both between the NLRA and state law and also between the general Federal common law of arbitration developed under Section 301 of the NLRA and various state enactments, particularly state tort laws. 15 In both lines of cases, rather than resorting to sweeping pronouncements making grand assertions of Federal preemptive power, the Supreme Court has walked a varitable tight rope between state and Federal laws, and has sought, wherever possible, to permit a functional interplay which gives maximum scope to both enactments. t 5 This is particularly true when the state law under scrutiny is one which confers a benefit to em- ployees in an area in which the NLRA also requires bar- gaining.'' Hence, in Malone v. White Motor Corp., 435 U.S. 497 (1978), the Supreme Court upheld the validity of a Minnesota statute imposing a pension fund charge on all employers in that state who cease to operate a is See Allis-Chalmers v. Lueck, 471 U S. 202 (1985), and Electrical Workers IBEW v. Hechler, 481 U.S. 851 (1987). 16 See, for instance, Farmer Y. Carpenters Local 25, 430 US 290 at 305-306 (1977), upholding the validity of a cause of action against a union provided by California tort law for willful infliction of emotional stress allegedly inflicted upon a member who had been denied the serv- ices of its hiring hall. The union claimed that the regulation provided by the NLRA over hiring halls preempted the state civil suit . In comment- ing on these contentions, Justice Powell observed- On balance, we cannot conclude that Congress intended to oust state court jurisdiction over actions for tortious activity such as that alleged in this case. At the same time , we reiterate that concurrent state court jurisdiction cannot be permitted where there is a realistic threat of interference with the Federal regulatory scheme . Union dis- crimination in employment opportunities cannot itself form the un- derlying "outrageous" conduct on which the state court tort action is based, to hold otherwise would undermine the preemption princi- ple. Nor can threats of such discrimination suffice to sustain state court jurisdiction. It may well be that the threat, or actuality, of em- ployment discrimination will cause a union member considerable emotional distress and anxiety . But something more is required before concurrent state court jurisdiction is permitted . Simply stated, it is essential that the state tort be either unrelated to employment discrimination or a function of the particularly abusive manner in which the discrimination is accomplished or threatened rather than a function of the actual or threatened discrimination. 1 ° Federal labor law in this sense is interstitial , supplementing state law where compatible, and supplanting it only when it prevents the accom- plishment of the purposes of the Federal act. Metropolitan Life Insurance Ca v Massachusetts, 471 U.S 724 (1985) business or who terminate a pension plan, despite the claim that the NLRA made this matter a mandatory sub- ject for collective bargaining. In Metropolitan Life Insur- ance Co., supra, the Supreme Court held that Massachu- setts might lawfully require employers in that State to in- clude in company health insurance plans provisions for mental health coverage, in face of claims that this was a matter reserved for collective bargaining and that the state law accorded to unionized employees a benefit which they normally would not be entitled to except 'in the give-and-take of collective bargaining. Very recently the Supreme Court upheld a Maine statute which re- quired that all employers grant severance pay to employ- ees upon closing a factory. Fort Halifax Packing Co., supra. The Court found that this was a "valid and unex- ceptional exercise of the . . . police power" (at 20) in the face of a claim of preemption based on the assertion that the state statute would undercut an employer's ability to withstand a union's demand for severance pay during the course of negotiations. It is quite clear from these prece- dents that state-mandated benefits which are regularly accorded to union and nonunion employees alike as part of the exercise by a state of its police power are not pre- empted by the NLRA. This rule would apply to mandat- ed charges payable to a fund in order to safeguard bene- fits as well as to compensation payable directly, or through insurance carriers, to an employee beneficiary. These are simply minimum labor standards and serve as a floor on which negotiated wages and benefits rest. As to optional or discretionary benefits and requirements- matters which an employer may or may not accord to its employees or impose upon its employees-these are bar- gainable matters under the NLRA. There is no state pre- emptive power which can remove them from the area of negotiations established by the NLRA.' Thus, mandated payments under the Wisconsin Worker's Compensation Act are not preempted by Section 8(d) of the NLRA. However, a proposal to require employees to perform light duty in lieu of, or in addition to, receiving workers' compensation benefits is a negotiable matter because it is optional on the part of an employer to require this effort from its employees, and the proposal should be examined in the same light as any other mandatory subject of bar- gaining required by Section 8(d) of the NLRA. B. Respondent 's Proposal to Require Employees to Perform Work Outside the Bargaining Unit in Order to Receive Full Workers' Compensation Benefits It is one thing to hold that the general subject of op- tional workers' compensation benefits and requirements are mandatory subjects of collective bargaining. It is quite another thing to say that the terms of the Respond- ent's proposal which addressed this subject in the summer and fall of 1986 were mandatory subjects of col- lective bargaining . At issue here is the Respondent's re- quirement, ultimately imposed on a unilateral basis on or about November 3, that, in order to receive full workers' compensation benefits (or, more precisely, benefits com- parable to payments currently made under the company practice extant at that time), an employee would have to take light duty work at Opportunities, Inc., and receive 122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD reduced workers' compensation benefits which would be supplemented by a $4-an-hour wage established by the Respondent . There is no factual question that, before this time, any employee of the Respondent receiving tempo- rary partial disability compensation simply stayed off work throughout the healing period until he was able to resume his old job and received the portion of full com- pensation coverage to which the percentage of his loss would entitle him. If he were 50 percent disabled, so long as that disability remained, he would receive 50 per- cent of the maximum weekly payment established by Wisconsin law and computed under a formula set out in the statute . He was not required to perform any services, in or out of the bargaining unit, in order to collect. The contract between the parties to this case made provision for performance of light duty work by injured employees within the bargaining unit, but since there was never any light duty work available, no employee was ever re- quired to perform such work in accordance with this provision. Secondly, there is no dispute that the work performed by temporarily disabled employees assigned to work for Opportunities , Inc. was not bargaining unit work. Indeed, it was nothing like bargaining unit work. Fundamental to collective bargaining under the NLRA is the concept of the bargaining unit . It is a de- scription of the kinds, classes, and locations of employees for whom bargaining must take place and to whom the ensuing contract will apply . The bargaining unit defini- tion establishes the parameters of the discussion during negotiations, the employees who are affected, and the au- thority of the union to speak . It may be established by agreement; it often is mandated by the NLRA, as admin- istered by the Board, and it will be imposed upon both parties to negotiations by public authority when they cannot agree on the question . Wages, hours, and terms and conditions of employment covering the unit are mandatory subjects for bargaining; items which are ex- traneous to the unit or which affect others outside the unit are not. The Respondent classifies these subjects in two parts, mandatory and nonmandatory. A more accu- rate classification would be tripartite-mandatory, per- missible, and prohibited . A wide range of subjects can be included voluntarily in a contract which are permissible in character. Essential to the notion of a permissible sub- ject of bargaining is that the parties may talk about it but neither can insist to impasse that it be included in a con- tract. To do so is, in and of itself, an unfair labor prac- tice. NLRB v. Borg-Warner Corp., 356 U.S. 342 (1958). Matters relating to the scope of the bargaining unit are permissible subjects of bargaining. Canterbury Gardens, 238 NLRB 864 (1978); General Motors Corp., 120 NLRB 1215 (1957). At least one court has held that the terms and conditions of employment of individuals employed outside the bargaining unit are prohibited, not merely permissible, subjects of bargaining. Sperry Rand Corp. v. NLRB, 492 F.2d 63 (2d Cir. 1974). Consolidating several bargaining units of the same employer for the purpose of joint bargaining over issues common to all units is a per- missible but not a mandatory subject of bargaining. Shell Oil Co., 194 NLRB 988 (1972). This case presents the question of whether it is a permissible or a mandatory subject of bargaining to require unit employees to do nonunit work in order to collect full workers' compensa- tion benefits, a benefit conferred by state law upon them as bargaining unit employees. I conclude that it is a per- missible, not a mandatory subject. While there are numerous Board and court cases deal- ing with the right of an employer to farm out bargaining unit work, I know of no case which confers upon an em- ployer the right to farm out bargaining unit employees. This is precisely what the Respondent proposed to do and in fact did in this case. There is no basis for the Re- spondent's contention that its bargaining unit employees remain unit employees while working for Opportunities, Inc., at the latter's premises . Opportunities, Inc. is not a party to the contract between the Respondent and the Union. No employee working on the Opportunities, Inc. premises can invoke the provisions of that contract to protect himself while doing nonunit work. Neither that contract nor the bargaining which led up to it can estab- lish wages, hours, and terms and conditions of employ- ment in the Opportunities , Inc. shop. Any attempt by either party to insist to impasse on doing so would run afoul of the considerations discussed in Sperry Rand and Shell Oil Co. What the Employer herein said to its employees and their union is that, to enjoy in full measure a benefit paid for doing bargaining unit work, you must do nonunit work for another employer. The "wages, hours, and other terms and conditions of employment " established by the NLRA as mandatory subjects of collective bar- gaining are compensation to be given by an employer to its employees for work performed within the unit appro- priate for such bargaining, not for work performed in whole or in part in some other unit. Conditioning such compensation upon the performance of work else- where-a condition which would necessarily involve ne- gotiations concerning the kind, amount, and value of nonunit work and the compensation therefor-is "a uni- lateral attack on the integrity of the established bargain- ing unit." Shell Oil Co., supra at 995 . Accordingly, under Shell Oil, I regard such a proposal to be, at best, a per- missible subject of bargaining and thus one which cannot be implemented without the affirmative assent of the union. t 8 It is abundantly clear that it obtained no such assent herein.19 C. Waiver The Respondent justifies its action in taking unilateral action respecting the work hardening/rehabilitation during the contract term by contending that the Union 18 The rule on implementation after bargaining to impasse in good faith, laid down in the Katz case and relied on by the Respondent, can have no applicability to permissible subjects of bargaining since bargain- ing to impasse over a permissible subject is an unfair labor practice. Borg- Warner, supra. 19 There is absolutely no basis for the Respondent's argument that the Union agreed to its work-hardening/rehabilitation proposal. Roberts' statement at the October 17 meeting "Do what you have to do. We will take appropriate actions," expresses the opposite of agreement. The Union's prompt filing of a grievance followed by an unfair labor practice charge surely must have resolved any lingering doubt in the Respond- ent's mind that it had not convinced the Union of the propriety of its proposal. JONES DAIRY FARM 123 had waived its right to bargain over this subject by virtue of a "zipper" clause in the contract . While not containing usual language found in "zipper " clauses, the contract between the parties in this case does contain a provision which states: Since arbitration is provided for grievances, since the procedures of the National Labor Relations Board are available for claims of unfair labor prac- tices, and since negotiation on matters not covered by this Agreement is to be deferred until the expira- tion of this Agreement , the Union will not call or sanction any strike, stoppage, slowdown or other in- terference with work during the terms of this Agreement and the Company will not lock out any or all of its employees. The language quoted above is at least ambiguous con- cerning whether the Union agreed to waive any right to engage in additional collective bargaining during the contract term. However, assuming that the clause in question is construed to be a conventional "zipper" clause, it should be remembered that the waiver function accorded to such clauses has never been applied to excuse bargaining over unilateral changes in the status quo which are made by an employer during the contract term. Pepsi-Cola Distributing Co. of Knoxville, 241 NLRB 869 (1979), cited with approval in GTE Automatic Elec- tric, 261 NLRB 1491 at 1492 fn. 3 (1982). Moreover, it is difficult to see how a "zipper" clause can be applied to a permissible subject of bargaining since, in order to imple- ment such an item, an employer must do more than offer the union an opportunity to bargain . It must obtain its actual consent before proceeding . Accordingly, I con- clude that the Union herein did not waive its right to bargain. To summarize the findings and conclusions in this case, the subject of disability , health, and medical bene- fits to be paid to employees for injuries sustained while performing bargaining unit work is a mandatory subject of collective bargaining within the meaning of Section 8(d) of the NLRA. However, the Act does not preempt state laws imposing mandated benefits and charges with respect to these matters and requires bargaining on those benefits and charges which are optional under state law. The work hardening/rehabilitation proposal advanced by the Respondent in this case in the summer and fall of 1986 was a permissible but not a mandatory subject of collective bargaining because it conditioned the continu- ation of full benefits paid to bargaining unit employees for injuries sustained while doing bargaining unit work upon the performance of nonunit work . The Union could not be deemed to have waived its right to bargain over this proposal because it was only a permissible subject of collective bargaining which could not be implemented without the Union's consent . In light of these consider- ations, I conclude that, by unilaterally implementing its work hardening/rehabilitation program and by failing, through its insurance carrier, to pay to injured employ- ees the full amount of temporary disability payments to which they would be entitled in the absence of such a program, the Respondent herein violated Section 8(a)(1) and (5) of the Act. On the foregoing findings of fact and on the entire record herein considered as a whole, I make the follow- ing CONCLUSIONS OF LAW 1. Jones Dairy Farm is now and at all times material herein has been an employer engaged in commerce within the meaning of Section 2(2) of the Act. 2. Local P- 1236, United Food and Commercial Work- ers Union, AFL-CIO-CLC is a labor organization within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees em- ployed by the Respondent at its Ft. Atkinson, Wisconsin plant, exclusive of office clerical employees, grounds keepers, livestock buyers, agricultural employees, re- search and development employees, professional employ- ees, guards, watchmen, and supervisors defined in the Act constitute a unit appropriate for collective bargain- ing within the meaning of Section 9(b) of the Act. 4. At all times material herein the Union has been the exclusive bargaining representative of all of the employ- ees in the unit found appropriate in Conclusions of Law 3 for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. The Respondent unilaterally changed the terms and conditions of employment of bargaining unit employees by requiring that unit employees perform nonunit work as a condition for receiving the full amount of workers' compensation disability payments to which they would be entitled in the absence of such a program . Such a pro- posal is a permissible subject of bargaining and may be implemented only with the consent of the exclusive bar- gaining agent of unit employees. 6. By the acts and conduct set forth in Conclusion of Law 5, the Respondent herein violated Section 8(a)(1) and (5) of the Act. Those acts and conduct constitute an unfair labor practice which has a close, intimate, and substantial effect on the free flow of commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has committed vari- ous unfair labor practices , I will recommend that it be required to cease and desist therefrom and to take other affirmative action designed to effectuate the purposes and policies of the Act. I will recommend that the Re- spondent be required to make whole any employees who have been assigned to participate in its work- hardening/rehabilitation program outside the bargaining unit, regardless of whether they have or have not agreed to participate, for the difference between the temporary partial disability payments they have received since the institution of this program and what they would have re- ceived in temporary partial disability payments had the program not been instituted, in accordance with the for- mula established in the Woolworth case,20 with interest 20 F. W. Woolworth Ca, 90 NLRB 289 (1950) 124 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD thereon computed at the short-term Federal rate used to also recommend that the Respondent be required to post compute underpayments and overpayments of Federal the usual notice advising its employees of their rights and income taxes under the Tax Reform Act of 1986. New of the results in this case. Horizons for the Retarded, 283 NLRB 1173 ( 1987). 1 will [Recommended Order omitted from publication.]