Colorado-Ute Electric Association, Inc.

COLORADO-UTE ELECTRIC ASSN. Colorado-Ute Electric Association, Inc. and Interna- tional Brotherhood of Electrical Workers, Local No. 111. Cases 27-CA-8959, 27-CA-8959-2, and 27-CA-8981 June 15, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On April 30, 1986, Administrative Law Judge Gordon J. Myatt issued the attached decision. The General Counsel and the Charging Party filed ex- ceptions and supporting briefs, and the Respondent filed an answering brief. On July 7, 1987, the Board heard oral argument on behalf of the parties and the amicus, the Ameri- can Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the American Newspa- per Publishers Association, and the Council on Labor Law Equality. Thereafter, the Respondent, the Charging Party, the General Counsel, the AFL-CIO, and the Council on Labor Law Equali- ty filed supplemental briefs. 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, the able argument of counsel, and the supplemental briefs and has decided to affirm the judge's rulings, find- ings,' and conclusions only to the extent consistent with this Decision and Order. The judge dismissed the complaint allegation that the Respondent acted unilaterally in granting merit increases to employees without meeting its bargaining obligation with the Union. We agree with the General Counsel's and Charging Party's exceptions that the judge's dismissal of this allega- tion should be reversed. The Respondent and the Charging Party (the Union) were parties to a collective-bargaining agreement covering office and clerical employees 1 The judge found that at the parties' August 22, 1984 bargaining ses- sion, Company President Girt Krumins "reminded the Union negotiators that under the terms of the agreement covering the operations and main- tenance employees, Respondent was permitted to pay those employees above the contract rates based on a merit decision by management." The record reveals, however, that the operations and maintenance employees did not work under a merit pay system similar to the program the Re- spondent proposed for the office and clerical employees, and that Kru- mins' reference to operations and maintenance employees at the August 22 session concerned the practice of allowing the Respondent to "double- Jump" those employees, see judge's decision fn. 6, a practice also allowed under the office and clerical employees' collective-bargaining agreement Contrary to the judge's finding in part IV,B, of his decision, employee Joan Hiss' total wage increase in January 1985 amounted to 9.8 percent. The raise included an 8-percent merit increase. These corrections do not affect the result in this case. 607 with a term extending from September 11, 1983, to September 13, 1986.2 The contractual wage rates for each job classification were contained in seven progression steps. Advancement from step to step was based on tenure. Employees advanced one step a year, except for the first two steps, which were completed in 6 months each. In late July 1984 the parties commenced midterm wage negotiations under the contract's wage re- opener provision. From the outset the Union insist- ed on an across-the-board (ATB) wage increase for the unit employees. The Respondent, on the other hand, insisted that any increase in wages would have to be through the institution of some form of merit program under which individual employee merit increases would be granted at times and in amounts determined by management and would not be subject to the contract's grievance proce- dure. The Union rejected the Respondent's merit wage proposals. At a meeting on September 5, the parties' 10th bargaining session, with no agreement yet reached on any wage terms, the Respondent presented a written proposal it termed its "final offer." The proposal retained the existing contractual progres- sion steps and wage rates, but added a merit pay system on top of these rates. The proposal ex- plained the operation of merit pay program as fol- lows: The merit increase program will provide em- ployees the opportunity of receiving additional increases based on their individual perform- ance and contribution on their job. The amount and frequency of such merit increase will be determined by the Division Head and President and will not be subject to the griev- ance procedure. The proposal further stated, "If Final Offer reject- ed, the Company reserves the right to impasse its proposal." On September 6 the Union submitted the Re- spondent's offer to the employees for a vote. The employees voted to reject the proposal. On Sep- tember 12 the Respondent notified the Union that the Respondent considered the parties to be at im- passe and that the Respondent would implement its final offer on September 23. At bargaining sessions on September 18 and 19 the Respondent resubmit- ted its September 5 offer and continued to assert its intention to implement the proposal on September 23, while the Union again rejected the offer and reasserted its opposition to the proposed merit wage program. In a letter to the Union dated Sep- 2 There were about 72 employees in the unit 295 NLRB No. 67 608 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tember 24 the Respondent announced that it had begun implementing its merit pay program and that it would "deliver the results of that implementa- tion" to the Union at the next bargaining session. The next bargaining session took place on Sep- tember 27. Company negotiator John Gibson pre- sented to the Union a handout detailing the results of the first set of merit reviews. According to the handout, 44 of the 47 employees reviewed received merit increases. The merit increases ranged from 2.2 percent to 8.5 percent. Union negotiator Robert Mason asked Gibson if the handout was a proposal. Gibson replied that the handout reflected the Re- spondent's implementation of its final offer and was not a proposal. Mason asked whether there was any way to question an employee's merit increase. Gibson stated that the employee could see the ap- propriate division head or the company president. Mason then asked if the Union could talk to man- agement on behalf of the employee. Gibson said no. On October 3 at the next bargaining session Gibson asked the union negotiators what they thought of the September 27 handout. Mason an- swered that the Union rejected the Respondent's implementation proposal . Gibson insisted that the handout represented the Respondent's implementa- tion and was not a proposal . Mason then asked if Gibson meant that the Respondent would not ne- gotiate regarding the implementation . Gibson re- plied that the Respondent would not. On October 30, 1984, the Respondent notified the Union by letter that it had conducted merit re- views for the 26 employees who had not been re- viewed earlier and listed the merit increases grant- ed. Thereafter, commencing in 1985, the Respond- ent sent the Union letters about every month listing the individual employee wage increases that had taken effect the previous month.3 At the October 3 bargaining session and at the eight sessions that followed, the Union continued to press for an ATB increase and to express its un- willingness to accept the terms of the Respondent's merit wage program. The Union proposed, among other things, that the parties establish a joint union- management committee that would develop criteria for merit increases and devise the manner in which disagreements over merit increases would be re- solved, that employees be guaranteed written sum- maries of their merit wage evaluations , and that employees have the right to grieve and arbitrate merit increases or that there be a special union- management committee to hear and decide employ- ee appeals. The Respondent rejected these union 3 The listed increases included both merit and step increases. proposals and continued to insist that "individual performance" and "contribution on the job" were the only criteria necessary, that the amount and frequency of merit increases should be determined solely by management and should not be subject to the grievance procedure, and that the only appeal should be to the company president. Negotiations ceased after a meeting held March 27, 1985, with the parties having reached no agreement. The administrative law judge found that the Re- spondent's insistence on its merit wage proposal did not amount to a failure or refusal to bargain in good faith. Further, the judge found that the par- ties had reached a valid impasse after the Respond- ent's September 5 proposal was rejected, and that having reached impasse the Respondent was there- fore free to implement the proposal when it did so. The General Counsel and the Charging Party argue, inter alia , that the judge failed to address the allegation that the Respondent acted unilaterally in granting merit increases even if the parties had reached a valid impasse. They contend that the Re- spondent's September 5 proposal sought the Union's waiver of its statutory right to bargain over the timing and amounts of employee merit in- creases. Having failed to secure that waiver from the Union, the Respondent therefore acted unilater- ally in violation of Section 8(a)(5) of the Act when, under the guise of implementing its final offer, it proceeded to grant merit increases without consult- ing with the Union about timing and amounts. We agree with the General Counsel and the Charging Party in this respect.4 It is well established that merit wages are a man- datory subject of bargaining. NLRB v. Katz, 369 U.S. 736, 745 (1962). The bargaining obligation en- compasses a duty to bargain over the procedures and criteria for granting merit increases to employ- ees. Id. at 746-747. Even where a merit program with procedures and criteria is lawfully in place, the actual granting of merit increases under the program may involve substantial discretion. The implementation of a merit pay program, to the extent that implementation involves discretion in determining the amounts or timing of the increases, is a matter as to which the bargaining agent is enti- 4 However, we find no merit in the General Counsel 's and the Charg- ing Party's contention that the Respondent's proposal concerned a per- missive subject of bargaining. The specific subject matter of the Respond- ent's proposal, merit wage increases , has been held by the Supreme Court to be a mandatory subject of bargaining . NLRB v. Katz, 369 U.S. 736, 745 (1962) See also Sec. 8(d) of the Act defining the duty to bargain as including the obligation to confer with respect to "wages ." As discussed infra, the Respondent's proposal would require the Union to waive its statutory right to bargain over the merit increases' timing and amounts. The inclusion of this waiver provision in the Respondent 's proposal does not "transform" it from a mandatory to a permissive subject of bargain- ing. See Toledo Blade Co., 295 NLRB 626 (1989) COLORADO-UTE ELECTRIC ASSN. tied to be consulted. Oneita Knitting Mills, 205 NLRB 500 fn. 1 (1973). The Respondent's September 5 proposal provid- ed for the establishment of a merit wage program but gave very few details concerning how merit in- creases would be determined or granted. The only stated criteria for the employees' merit increases were "individual performance" and "contribution on their job." The proposal set no minimum or maximum for the merit increases, nor did it fix times when the increases would or could be grant- ed. Instead, the proposal stated simply that the timing and amount of the merit increases "will be determined by the Division Head and President." Not only did the proposal provide no role for the Union in the initial determination of the increases' timing and amounts, the proposal also exempted management's decision on these matters from union or employee challenge through the contractual grievance procedure. Clearly, then, the implementation of the Septem- ber 5 proposal would involve virtually unlimited discretion in determining the timing and amounts of merit increases . These are matters over which the Union has a statutory right to be consulted. In proposing to exclude the Union from this exercise of discretion over employees wages, the Respond- ent was seeking the Union's waiver of its statutory rights under Section 8(a)(5) of the Act. The Board requires that a waiver of bargaining rights under Section 8(a)(5) not be lightly inferred but must be clear and unmistakable. Park-Ohio In- dustries, 257 NLRB 413, 414 (1981), enfd. 702 F.2d 624 (6th Cir. 1983). Here, despite earnest effort, the Respondent was unable to secure the Union's waiver of its right to bargain over the merit in- creases' timing and amounts. The Union never agreed to contractual language waiving its right to bargain. Nor does the parties' bargaining history establish a waiver. The Union, both before and after impasse, expressed its opposition to the Re- spondent's merit proposal for, among other things, precisely the fact that it would exclude the Union from participation in the merit pay program. Contrary to the judge's conclusion, the Respond- ent's unilateral exercise of discretion and granting of merit increases was not privileged by impasse. We agree with the judge that the Respondent did not fail or refuse to bargain in good faith by insist- ing on its merit wage proposal,5 and that the par- s See Retchhold Chemicals, 288 NLRB 69 ( 1988) (Reichhold Chemicals II), modifying Retchhold Chemicals, 277 NLRB 639 (1985) (Reichhold Chemicals 1), cited by the judge In agreeing with the judge that the Respondent did not fail to bargain in good faith by insisting on its merit increase proposal , Member Johan- sen does not rely on the judge's finding that the proposal was "not unrea- sonable." In Member Johansen's view, the Board should not attempt to 609 ties' impasse after the rejection of the Respondent's September 5 offer was a lawful impasse. The Re- spondent was free to insist to impasse as a condi- tion to agreement on any wage terms that the Union agree to waive the statutory rights at issue here. But the Respondent's freedom to pursue this end and to exert this bargaining pressure to obtain the end does not carry with it a right, once having failed and reached impasse , to proceed with imple- mentation of the final offer as if the Respondent had successfully secured the Union's waiver. Section 8(a)(5) of the Act requires that an em- ployer bargain with the union before effecting changes in terms and conditions of employment. But if the parties reach good -faith impasse in nego- tiations, the employer generally does not violate Section 8(a)(5) by thereafter implementing changes consistent with those proposed to the union. Taft Broadcasting Co., 163 NLRB 475 (1967), enfd. sub nom. Television Artists AFTRA v NLRB, 395 F.2d 622 (D.C. Cir. 1968). That the employer is free to implement changes after reaching good-faith im- passe is another way of expressing the axiom that the employer's duty to bargain over proposed changes does not imply a duty to agree to the union's counterproposals or to make a concession. See Section 8(d) of the Act. The employer's duty to bargain does not give the union a right to veto the proposed changes by withholding consent. If the parties have bargained to good-faith impasse and the union has been unable to secure conces- sions or agreement to its proposals, then the em- ployer may proceed to implement the changes it proposed to the union in negotiations. Consider, as a typical example, a case where an employer proposes in negotiations for a new con- tract that wages should be reduced from $7 an hour to $6 an hour. The union proposes that wages be increased to $8 an hour. The parties insist on their respective positions until they reach a good- faith impasse in negotiations. Having reached a point where further bargaining would be fruitless, Section 8(a)(5) does not require the employer thereafter to pay its employees $8 an hour as the union demanded, or to abandon its proposal and leave wages at $7 an hour. The employer is free to implement its proposal and pay employees $6 an hour. In the example above, the employees have no statutory right to be paid $8 or $7 an hour rather than $6 an hour, thus the Act does not require that the employer obtain the union's consent before evaluate the reasonableness of a party's bargaining proposals, as distin- guished from bargaining tactics, in determining whether the party has bargained in good faith. Retchhold Chemicals L See his dissenting opinion in Reichhold Chemicals II. 610 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD paying $6 an hour. The Act only requires that the employer propose the wage rate and bargain with the union in good faith before implementation. Where an employer proposal seeks the union's waiver of statutory rights, however, impasse is no substitute for consent. An employer may insist to impasse as a condition of agreement that the union agree to a no-strike clause. Shell Oil Co., 77 NLRB 1306 (1948). Absent the union's agreement, howev- er, the employer is not thereafter free to implement its proposal by firing striking employees. Here the Respondent insisted to impasse that em- ployees be eligible for wage increases on the basis of merit, that merit be defined as "individual per- formance" and "contribution on the job," and that the merit increases be granted at times and in amounts determined solely by management . Having reached impasse, the Respondent was free to con- sider employees for merit increases and to base its consideration on the criteria mentioned above, for neither of these aspects of its proposal involved the waiver of a statutory right. Employees have no statutory right to be awarded wage increases only on the basis of tenure rather than merit, nor do they have a statutory right not to have merit wage increases based on these two criteria. The employee's bargaining representative does have the right, on the other hand, to be consulted over the timing and amounts of merit increases before the increases are granted . Having failed to secure a waiver of the Union's statutory right to bargain over the merit increases' timing and amounts, the Respondent was not free to grant in- creases without consulting with the Union about these matters. The Respondent never did so. In- stead, it presented the Union with the results of its merit reviews after increases had already been granted. Further, when the Union was shown the first set of merit increases in September 1984, it in- quired whether the Respondent would negotiate over the increases, and whether the Union could approach the Respondent on an employee's behalf if the employee was dissatisfied with a merit in- crease. In both instances, the Respondent answered no. We conclude that the Respondent 's failure and refusal to bargain with the Union over the timing and amounts of merit increases violated Section 8(a)(5) of the Act. AMENDED CONCLUSIONS OF LAW 1. Substitute the following for Conclusion of Law 3. "3. By unilaterally granting merit wages in- creases to employees without offering to bargain with the Union over the timing and amounts of the increases, the Respondent violated Section 8(a)(5) and (1) of the Act." 2. Delete Conclusions of Law 4 and 5 and re- number the subsequent paragraphs. 3. Add the following as Conclusion of Law 6. "6. The Respondent has not otherwise violated the Act." THE REMEDY Having found that the Respondent has engaged in unfair labor practices , we shall order it to cease and desist and take certain affirmative action de- signed to effectuate the policies of the Act. Specifically , we shall order the Respondent to bargain with the Union over the timing and amounts of employee merit increases . Further, we shall also order the Respondent, on the Union's re- quest, to cancel the wage increases unlawfully granted to employees through the Respondent's unilateral action. Nothing in our Order, however, should be construed as requiring the Respondent to cancel any wage increase without a request from the Union. See Taft Broadcasting Co., 264 NLRB 185 fn. 6 (1982). ORDER The National Labor Relations Board orders that the Respondent, Colorado-Ute Electric Associa- tion, Inc., Montrose, Colorado, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Unlawfully soliciting striking employees in order to induce them to abandon support of the strike and of International Brotherhood of Electri- cal Workers, Local No. 111 by promising them in- creased wages and longer hours of work. (b) Threatening employees for engaging in lawful strike activity. (c) Granting merit wage increases to employees without offering to bargain with the Union over the timing and amounts of increases. (d) 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. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) On request, bargain with International Broth- erhood of Electrical Workers, Local No. 111 over the timing and amounts of employee merit wage in- creases. (b) If the Union requests, cancel wage increases unlawfully granted to employees through the Re- spondent's unilateral action. COLORADO-UTE ELECTRIC ASSN. (c) Post at its Colorado facilities copies of the at- tached notice marked "Appendix."6 Copies of the notice, on forms provided by the Regional Direc- tor for Region 27, after being signed by the Re- spondent's authorized representative, shall be posted by the Respondent immediately upon re- ceipt and maintained for 60 consecutive days in conspicuous places including all places where no- tices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to ensure that the notices are not altered, 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. CHAIRMAN STEPHENS, concurring. I concur in the result in this case. 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment 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 had ordered us to post and abide by this notice. WE WILL NOT unlawfully solicit striking employ- ees in order to induce them to abandon support of the strike and of International Brotherhood of Electrical Workers, Local No. 111 by promising them increased wages and longer hours of work. WE WILL NOT threaten you for engaging in lawful strike activity. WE WILL NOT grant merit wage increases to you without offering to bargain with the Union over the timing and amounts of the increases. 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, on request, bargain with the Union over the timing and amounts of employee merit wage increases. 611 WE WILL, if the Union, requests, cancel wage in- creases unlawfully granted to employees through our unilateral action. COLORADO-UTE ELECTRIC ASSOCIA- TION, INC. Michael W. Breeskin and Arturo E. Roybal, Esq., for the General Counsel. Carol A. Curran, Esq., of Montrose, Colorado, for the Respondent. Marlene J. Joens, Assistant Business Manager, of Denver, Colorado, for the Charging Party. Joseph M. Goldhammer and Dennis E. Valentine, Esq. (Brauer Buescher, P.C.), of Denver, Colorado, on the brief for the Charging Party. DECISION STATEMENT OF THE CASE GORDON J. MYATT, Administrative Law Judge. On several charges filed by International Brotherhood of Electrical Workers, Local No. 111 (the Union) against Colorado-Ute Electric Association, Inc. (Respondent) in September 1984 and January 1985, the Regional Director for Region 27 consolidated the cases and, on 12 March 1985, issued a consolidated complaint and notice of hear- ing. Essentially, the consolidated complaint alleges that during wage-reopener negotiations Respondent failed to bargain in good faith with the Union, engaged in surface bargaining, and unlawfully implemented the term of its wage offer during negotiation. The complaint also al- leges that the wage provisions implemented by Respond- ent exceeded the proposal it made to the Union. In addi- tion, the complaint alleges that Respondent bypassed the Union and engaged in direct dealing with an employee concerning wage. All of the above conduct is alleged to have been in violation of Section 8(a)(5) of the National Labor Relations Act (the Act), 29 U.S.C. § 151 et seq. The complaint further alleges that during an economic strike that occurred while wage negotiations were in progress, Respondent, acting through a supervisor, promised an employee higher wages and more hours of work to induce the employee to abandon his strike activ- ity. This conduct is alleged to be in violation of Section 8(a)(1) of the Act. Finally, the complaint alleges that during the same strike Respondent, through a supervisor, threatened an employee with reprisal for engaging in strike activity. This conduct is also alleged to be in viola- tion of Section 8(a)(1) of the Act. Respondent filed an answer in which it admitted certain allegations of the consolidated complaint, denied others, and specifically denied committing any unfair labor practices. A hearing was held on this matter on 20 and 21 August 1985 in Montrose, Colorado. All parties were represented at the hearing and afforded opportunity to examine and cross-examine witnesses and to present ma- terial and relevant evidence on the issues. Briefs were submitted and have been duly considered. On the entire record in this case, and on my observa- tion of the witnesses who testified, I make the following 612 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT 1. JURISDICTION The pleadings admit, and I find , that Respondent is an incorporated cooperative association engaged in the busi- ness of generating, transmitting, purchasing, and selling electrical energy at wholesale rates to it member associa- tions, who in turn distribute the energy at retail rates to customers throughout Colorado. Respondent's principal office and place of business is located in Montrose, Colo- rado, and it operates other facilities and power plants at Craig, Hayden, and Nucla, Colorado. In the course of its business operations, Respondent annually purchases and receives goods, materials, and services valued in excess of $5000 directly from points located outside the State of Colorado. Respondent also annually derives gross reve- nues in excess of $250,000 from it business operations. On the basis of the above, I find that Respondent is, and has been at all times material herein , an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The pleadings admit, and I find, that International Brotherhood of Electrical Workers, Local No. 111 is a labor organization within the meaning of Section 2(5) of the Act. III. MOTIONS REGARDING THE PLEADINGS The consolidated complaint alleges in paragraph 11 that Respondent failed and refused to bargain collective- ly with the Union by engaging in certain specified con- duct. This conduct is set forth in several lettered sub- paragraphs of paragraph 11. Subparagraphs 11(a) and (b) allege as follows: (a) Since on or about September 5, 1984, Re- spondent has, during wage reopener negotiations, insisted to impasse, that wages received by employ- ees consist of a set minimum hourly rate and merit increases which would be determined solely at the discretion of management, and not subject to the grievance procedure. (b) On or about September 23, 1984 , Respondent implemented its impasse proposal. Respondent's counsel contended at the conclusion of the General Counsel's case, and again in her brief, that the above subparagraphs do not affirmatively allege any conduct which violates the Act. Respondent's counsel asserts, and continues to assert , that under the case law Respondent may lawfully negotiate to impasse and then implement the terms of its proposal ; provided such im- plementation is consistent with the final offer made to the Union. Thus, Respondent argues for the dismissal of subparagraphs 11(a) and (b) on the grounds the General Counsel failed to affirmatively plead that the conduct de- scribed therein constituted unfair labor practices. Coun- sel for the General Counsel , in response to Respondent's motion, sought to amend this portion of the consolidated complaint to substitute the expression "invalid impasse" for the word "impasse." The General Counsel's motion was denied. The General Counsel also asserted that when read together, subparagraphs 11(a) and (b) were sufficient to plead unlawful conduct by Respondent. Re- spondent's motion to dismiss was denied at the hearing with permission to renew it in Respondent 's brief. Although this portion of the pleadings appears to be unartfully drawn , I am persuaded, after a review of all of the actions of paragraph 11, that Respondent's motion to dismiss subparagraphs (a) and (b) should be denied. Sub- paragraph 11(e) states that by the conduct set forth in subparagraphs 1l(a)-(d),1 "Respondent has sought to un- dermine the Union's status as representative of Respond- ent's employees in order to discourage employees from supporting the Union for the purposes of collective bar- gaining, and had engaged in surface bargaining." When read in conjunction with subparagraph 11(e), it becomes apparent that the General Counsel is affirmatively alleg- ing, among other things, that the conduct described in subparagraphs (a) and (b) constitute surface bargaining. Since surface bargaining by a party is unlawful, I find the General Counsel had affirmatively pled that the con- duct in the disputed subparagraphs constitutes unfair labor practices . Moreover, the record fully demonstrates Respondent was not confused or misled regarding the thrust of these allegations of the complaint and that it suffered no prejudice in the preparation or presentation of its defense against them . Accordingly, Respondent's renewed motion to dismiss subparagraphs 11(a) and (b) of the consolidated complaint is denied. IV. THE ALLEGED UNFAIR LABOR PRACTICES A. The Wage Negotiations 1. The bargaining prior to implementation of Respondent's final offer The record reveals there is very little factual dispute regarding the event leading up to or occurring during the wage-reopener negotiation between the parties. The Union and Respondent are parties to a collective-bar- gaining agreement covering Respondent 's office and cler- ical employees. In addition, the Union represents Re- spondent's operating and maintenance employees under a separate collective-bargaining agreement. The term of the current clerical agreement is from 11 September 1983 to 13 September 1986. (See A. Exh. 1.) The pay rates for each job classification in the office and clerical unit are contained in seven progression steps and the basis for ad- vancing in the progression step is the amount of time an employee has worked for Respondent. 2 ' Subpar. 11(c) alleges Respondent bypassed the Union and engaged in direct dealing with a unit employee Subpar 11 (d) alleges Respondent unilaterally granted unit employees wage increases without bargaining with the Union and that the wage increases were in amounts greater than Respondent offered to the Union during negotiations. 2 Although there are seven progression steps in each job classification, employees reach the last step upon their sixth year of employment. The first step or hire-in rate is completed in 6 months and the employee then advances to the second step for the next 6 months . Thereafter, each pro- gression step is yearly. COLORADO-UTE ELECTRIC ASSN. 613 Included in the current agreement is a provision for the reopening of negotiation for wages by either party upon the giving of the prescribed notice prior to 8 Sep- tember 1984.3 The Union gave Respondent notice pursu- ant to the wage-reopener provision on 8 June 1984.4 (See it. Exh. 2.) Negotiations on this matter began between the parties on 31 July. Because of the nature of the alle- gations, it is necessary to summarize in some detail the events that occurred during the individual bargaining session. However, that there is little factual dispute con- cerning the bargaining events is evidenced by the de- tailed bargaining notes kept by both parties and submit- ted as part of the record.5 The Union's bargaining team initially consisted of Marlene Joens and Donald Shaputis , assistant and senior assistant business managers, respectively, of the Union, and several unit employees including Joan Deskin (nee Hiss), as steward at Respondent's Craig facility. Joens was initially the chief spokesperson for the Union. Re- spondent's bargaining team was headed by John Gibson, manager of personnel and labor relations , and included other management representatives. First Bargaining Session-31 July The Union proposed a 9-percent across-the-board (ATB) wage increase for all classifications . Gibson re- jected this proposal as being unrealistic and "in another world." Gibson asserted Respondent was under pressure from other businesses in the community because Re- spondent's wage rates were higher than the rates which prevailed in the area. Gibson stated a wage increase was not necessary because of the built-in pay raises contained in the progression steps . Respondent proposed a single rate range for each job classification with a merit in- crease system based upon a supervisor 's evaluation of an employee's performance. Gibson stated there was "only so much money in the pot to spend." The Union rejected Respondent's merit increase proposal and stated the per- centage level for an ATB increase was negotiable. The Union further suggested that the parties could agree to freeze the current first and second 6-month hire-in rates. No agreement was reached at this meeting. Second Bargaining Session-14 August The parties met in the morning at Respondent's head- quarters in Montrose and the Respondent continued to urge adopting a merit increase program. Gibson stated Respondent wanted to reward those employees whose work performance was over and above the norm. The Union asked the Respondent to come up from it's pro- posal of nothing for an ATB increase and suggested they could then split the difference between any offer made by the Respondent and the 9 percent proposed by the Union. Respondent continued to insist that any increase would have to be a merit increase. When the Union asked who would determine whether an employee was entitled to such an increase, Gibson responded this would be at the sole discretion of the employee's super- visor. The Union then asked whether Respondent could guarantee that no favoritism or disparate treatment would occur under its merit proposal . Gibson responded in the affirmative and the Union then questioned how this could be accomplished . Gibson was unable to re- spond to this question . Gibson continued to reject the Union's request for an ATB wage increase . The Union proposed that Respondent could reward superior work performance by continuing the practice of "double- dumping" allowed under the current collective -bargain- ing agreement.6 In the afternoon session , the Union proposed a 7-per- cent ATB increase and a freeze on the present hire-in rates. Respondent rejected this proposal as being too high and because it did not contain a merit factor for re- warding an employee who was at the top of the progres- sion steps.' The Union continued to reject any form of a merit wage increase, stating the Respondent had used this system before the Union became the bargaining rep- resentative and that was the reason the employees sought union representation. Third Bargaining Session-15 August Robert Mason, the business manager of the Union, joined the union negotiating committee . The Union con- tinued to insist on a 7-percent ATB increase and a freeze on the hire-in rates. Respondent continued to insist on a merit increase program . The Union asked to look at Re- spondent's merit proposal and proposed that the parties agree to submit their offers to a third-party arbitrator. Respondent rejected the idea of using a third party to settle their differences. Since Respondent's merit increase proposal had not been reduced to writing, it was unable to present one to the Union. The parties met again in the afternoon and Respondent submitted its first written proposal to the Union. (See A. Exh. 6.) In this proposal Respondent sought to eliminate the progression steps contained in the current collective- bargaining agreement by establishing minimum, mid- point, and maximum wage rates for each job classifica- tion. The minimum rates equaled the current second 6- month step rate contained in the existing agreement. The maximum rate amounted to an increase of approximately 3.9 percent above the top step for each classification 3 The specific provision in the exiting agreement for the wage reopener is contained in art 32 and provides, in part, as follows: (d) . . it is specifically agreed that either party may elect to ne- gotiate wages included in Appendix B by giving notice to the other party not less than eighty-five (85) days, nor more than ninety-five (95) days prior to midnight , September 8, 1984 and midnight, Sep- tember 14, 1985 . . 4 Unless otherwise indicated , all dates hereafter refer to the year 1984. The Union's notes on the bargaining sessions are contained in the record as A. Exh 49 and Respondent's bargaining notes are in the record as R. Exh. 50 a "Double-dumping" was described as the practice of permitting Re- spondent to award above-average work performance by granting an em- ployee a double step progression instead of the usual single step 7 Throughout the negotiations , Respondent maintained that an ATB in- crease was unfair to employees who were at the top of their progression step. Because these employees could no longer receive additional wage increases by advancing through the progression steps, an ATB increase actually provided them with a smaller percentage of a wage increase than employees still eligible for future step progression At the hearing, Re- spondent submitted charts demonstrating this adverse impact on the top- step employees. (See R. Exh. 2.) 614 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD with the exception of the materials control clerk, the work order clerk, and the inventory control clerk. These latter job classifications were frozen at the current rate in the existing agreement . The proposal also contained gen- eral guidelines to be followed by supervisors in awarding merit increases to individual employees . These tracked the guidelines followed by Respondent's supervisors in evaluating employees' work performance. They were based on three categories ; more than satisfactory , satis- factory, and less than satisfactory (MSL). The guidelines also indicated proposed amounts of increases for the "M" and "S" categories and none for the "L" category. It also contained a proposed schedule of the frequency that employees would receive a merit review but stated that the amount and frequency of individual employee in- creases was not subject to the grievance procedure. Gibson also told the union negotiators that supervisors would not be compelled to follow the merit factors sug- gested by the guidelines nor were they compelled to give increases in the amounts contained in Respondent's pro- posal. Gibson stated the supervisors could grant more or less than the suggested amounts. He told the union repre- sentatives that the amount and frequency of the wage in- creases was solely at the discretion of the supervisors, who would determine when employees were performing satisfactory work. Fourth Bargaining Session-16 August When the parties met at this negotiating session, the Union rejected Respondent's proposal in its entirety and insisted on an ATB wage increase . The Union cited pos- sible personality conflicts between employees and super- visors as well as budget restraints preventing the grant- ing of merit increases to worthy employees. The union representatives also stated that the merit review process would nullify the grievance procedure ; employees would be reluctant to file grievances against supervisors if they thought they were going to jeopardize their merit in- creases. The Union further protested that Respondent's professed concern over rewarding employees who were at the top steps of their job classifications contradicted the terms of this proposal since these employees would only be able to receive merit increases solely at the dis- cretion of their supervisors.8 After rejecting Respondent's 15 August proposal, the Union offered a proposal of a 6-percent ATB increase for all job classifications with a freeze on the hire-in rates at the current level. The Union further proposed that if Respondent felt some employees deserved more in wages, Respondent should evaluate them in 6 months and if they were satisfactory, grant them an additional 3- percent increase . Respondent rejected the Union's pro- posal, stating that it needed to look at the senior employ- ees and their long service. Further, Respondent objected to having any limitation on the merit increases or being locked into a 3-percent increase later. The Union sought to determine what amount the Respondent had put aside for the merit increases and Gibson informed the Union 8 The record establishes that 22 unit employees were at the top of their progression steps. there was no "merit kitty." He stated Respondent had not set aside a designated amount for the merit increases. Fifth Bargaining Session-20 August In this session the Respondent formally rejected the Union's proposal of a 6-percent ATB increase with an additional 3 percent in 6 months for those employees who Respondent determined were worthy of additional wages. Gibson informed the union representatives that a merit system was the only one Respondent would accept. He stated that the best contributors (employees) should get the most money. The Union then proposed that Respondent grant an across-the-board wage increase and get rid of any unproductive employees. Shaputis suggested the Respondent allow the employees to choose between the across-the-board and merit proposals. Gibson responded that Respondent did not want to put a number on the merit increases which would limit it. He also stated that the parties had a third alternative which was to do nothing with the existing wage structure. Sixth Bargaining Session-21 August At this bargaining session Respondent continued to insist that it would only accept a merit system for wage increases. However, Gibson now proposed that the merit review be determined by the appropriate division head and Respondent's president rather than by the supervi- sors of the employees. The Union objected to Respond- ent's proposal and stated that it would cause conflicts be- tween employees vying for wage increases . The union representatives asked Respondent to submit two propos- als and let the employees decide which one they pre- ferred; one for an ATB wage increase and the other for a merit system wage increase. Gibson refused, stating, "It's not a good way." He told the union representatives Respondent would only submit one proposal and that it would be a merit system proposal. The parties met again that afternoon. Respondent sub- mitted another written proposal to the union representa- tive. (See A. Exh. 7.) In this proposal, Respondent re- tained the existing progression steps for each job classifi- cation and proposed that the existing wage structure continue as the minimum wage rates . Respondent's pro- posal established merit increases as the means for em- ployee wage increases and provided that the frequency and the amount of the merit increases would be deter- mined by the appropriate division head and Respondent's president . The proposal submitted by Respondent ad- hered to Respondent's prior position that the merit in- creases would not be subject to the contract grievance procedure. The union representatives rejected Respond- ent's proposal as being less than the last written offer submitted by Respondent . The Union countered with a proposal for an ATB increase or an ATB increase cou- pled with a merit system. 9 a Respondent's president, Girts Krumins, testified that in the initial stages of the negotiations, Respondent's merit increase proposal was in an embryonic stage. It basically included minimum and maximum wage rates with no progression steps for each job classification . As the negotiations progressed and Respondent took into account the Union 's objections to Continued COLORADO-UTE ELECTRIC ASSN. 615 Seventh Bargaining Session-22 August When the parties met, the Union again proposed a combination of an ATB increase coupled with some form of a merit increase for deserving employees. Re- spondent rejected the offer and Gibson questioned whether the parties were at an impasse. Shaputis replied they were not and stated, "There are all kinds of ways to go, but you only want one way." The parties met again in the afternoon and Krumins, Respondent's president, participated in the negotiations. Krumins told the union negotiators that Respondent was paying its clerical employees higher wages than existed in the labor market in which Respondent operated. He stated Respondent's customer were in agriculture and mining, and these businesses were currently experiencing serious financial problems. Krumins stated Respondent had to maintain the stability of its prices and this could only be accomplished by more efficient productivity. Since management's support employees (office and cleri- cal employees) were essential to promoting overall pro- ductivity, Krumins insisted management wanted to reward this group by merit increases which recognized more than minimum contractual performance . Krumins also reminded the union negotiators that under the terms of the agreement covering the operations and mainte- nance employees, Respondent was permitted to pay those employees above the contract rates based on a merit decision by management. After Krumins spoke to the union negotiators, Gibson presented them with another written proposal. (See A. Exh. 8.) He stated this was Respondent's final offer. In this proposal, Respondent maintained the existing pro- gression steps as the minimum hourly rates effective 9 September. The proposal also sought to install a merit system program effective the same date . The increases were to be determined by management and approved by Respondent's president and they were to be based on an employee's performance . Finally, the merit increases were not to be subject to the contract grievance proce- dure. The Union rejected this proposal, stating it was no different from the proposal submitted by Respondent on 15 August. The union representatives suggested that the parties secure assistance from a Federal mediator . Gibson again at this point asked if the parties had not reached an impasse. The union representatives denied the parties were at an impasse. They contended the Respondent had not compromised in any way. Respondent insisted, on the other hand, that it was offering the Union a mini- mum hourly wage with no locked -in maximum. Re- spondent's representatives maintained this system was necessary to enable Respondent to reward productivity. Eighth Bargaining Session-29 August A Federal mediator met with the parties at this ses- sion. In addition, Kermit Dacus, an International repre- sentative of the Union, joined the Union's bargaining its proposal, Respondent began to refine the details of its merit increase plan. Thus, according to Krumins, Respondent proposed to retain the progression steps for each job classification and eliminate the first -line su- pervisors as the individuals who determined when merit increases would be granted to the employees committee . Joens informed Respondent's representatives that the unit employees had met and rejected Respond- ent's merit increase proposal . She stated 49 employees signed a petition supporting the Union's ATB wage in- crease request. Joens then submitted a new union propos- al calling for a 4-percent wage increase for all job classi- fications . Gibson rejected the Union 's offer on the ground that it provided everyone with a flat amount. He asserted Respondent's rate-payers would object. Re- spondent continued to insist on a merit increase program. Gibson offered a one-time payment of $100 to each unit employee if the Union accepted Respondent 's merit system. The Union rejected this offer, saying it only amounted to an increase of .0066 percent for each em- ployee. Ninth Bargaining Session-30 August The union representatives formally rejected Respond- ent's one-time payment of $ 100 to each employee. The union representatives also took issue with the propriety of negotiating Respondent's merit increase proposal. The Union accused Respondent of attempting to change the contract wage structure. According to the union repre- sentatives, this was not the proper subject of a wage re- opener but, rather, belonged in general negotiations for an entire collective-bargaining agreement. Respondent rejected the Union's contention concerning the impropri- ety of its merit system proposal. Tenth Bargaining Session-5 September The parties met again with the Federal mediator on 5 September. Respondent formally rejected the Union's proposal for a 4-percent ATB increase. (See A. Exh. 10.) The Union then proposed the parties leave the wage structure as it was in the existing agreement and Re- spondent make a one-time payment of $ 1000 to each unit employee. Respondent rejected this proposal outright. Gibson presented the union representatives with a copy of Respondent's latest proposal. This document was entitled "Final Company Offer." (See Jt. Exh. 11.) Re- spondent's latest proposal also incorporated the progres- sion steps of the exiting agreement as the minimum hourly rates for each job classification and provided for a merit increase program. The amount and frequency of the merit increase were to be determined by the appro- priate division head and Respondent's president . As with the prior proposals submitted by Respondent, this pro- posal stated the amount and frequency of the merit in- creases were not subject to the grievance procedure. The offer by Respondent contained the statement that if it were rejected, Respondent "reserve[d] the right to 'im- passe' its proposal." The Union made a counterproposal calling for a 4-per- cent ATB increase while freezing the first 6-month hire- in rate. The Union's counterproposal also granted Re- spondent the right to move any employee upward through "accelerated progression" in the wage steps. This accelerated progression was to be in effect on a trial basis for a period of 1 year. (See Jt. Exh. 12.) Respond- ent rejected the Union's counteroffer and stood by its final proposal. Gibson requested that the union represent- 616 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD atives take its proposal back to the membership for a vote. 2. The continuing negotiations and Respondent's implementation of its final wage proposal The record discloses that after the bargaining session on 5 September, the union representatives submitted Re- spondent's final offer to the unit employees. The employ- ees rejected Respondent's proposal and Shaputis notified Gibson of this action. On 12 September, Gibson wrote to Joens and informed the union representative that Re- spondent considered an impasse to exist regarding the wage negotiations. He notified Joens that Respondent would implement its final wage proposal on 23 Septem- ber. (See Jt. Exh. 13.) Mason sent a mailgram to Re- spondent requesting further negotiations commencing 17 September. (See Jt. Exh. 14.) On 18 September, the unit employees engaged in a strike against Respondent and began picketing Respond- ent's facilities. Although the strike was in protest of the failure to come to an agreement on wages for the office and clerical employees, many of the operations and maintenance employees supported the strike and engaged in picketing. During the strike, the Union maintained a telephone "hot line" at its office to keep callers informed about the status of the negotiations . Gibson's undisputed testimony discloses that he called the "hot line" on two occasions; 20 and 24 September. In response to the first call, he re- ceived a message recorded by Mason. This message stated the Union would submit another wage offer to Re- spondent "to resolve the impasse" in a peaceful manner. The 24 September message, also by Mason, stated that Respondent had rejected the Union's proposal for "re- solving the impasse." Eleventh Bargaining Session- 18 September The parties met on 18 September and Mason became the chief spokesperson for the Union. The mediator was not present at this meeting . Gibson handed a letter to the union representatives in which he referred to a statement by Shaputis that the Union had a proposal to break the impasse in the negotiations . t ° (See Jt. Exh. 15.) The bar- gaining notes reveal that Respondent adhered to its final proposal of 5 September and again advised the union representatives that it would implement the terms of this proposal on 23 September. At this meeting, Dacus stated Respondent's merit increase proposal had "deadlocked" the negotiations. Gibson rejected the Union's offer of a 4-percent ATB increase and asked the Union to submit another proposal . Respondent's bargaining notes indicate that Mason responded to this request by stating, "Hell no, we won't give you a proposal." crease proposal of 5 September. Respondent also contin- ued to assert its intention to implement the merit pro- gram on 23 September. Thirteenth Bargaining Session-20 September The parties did not meet face-to-face on this date but submitted proposals to each other through the mediator. The Union submitted a written offer for "breaking the impasse and ending the strike." (See A. Exh. 17.) The Union's proposal offered several options: (1) Submit the wage proposals of both parties to an arbitrator with in- structions that the arbitrator was to choose one or the other; (2) submit both proposals to an arbitrator who would have latitude to construct a "fair and equitable" wage agreement; and (3) Krumins to meet with the unit employees, with union representatives present, to explain Respondent's wage offer and the parties would be bound by a secret-ballot vote of the unit employees accepting or rejecting Respondent's wage proposal. The strike-set- tlement offer proposed by the Union was rejected by Re- spondent. Fourteenth Bargaining Session-27 September This meeting was called by the Federal mediator. Gibson gave the union representatives a tabulation show- ing the first merit increases implemented by Respondent. The performance standards utilized by Respondent during the merit reviews were individual job perform- ance and contribution on the job . (See A. Exh. 21.)11 No additional proposals were submitted by either party at this meeting. Fifteenth Bargaining Session-3 October The parties met at the request of the mediator. The union representatives asked for the basis on which Re- spondent's officials decided whether an employee was entitled to a merit increase. Gibson responded that it was a management function and the criteria used was of per- formance and contribution on the job as determined by the division heads and Respondent's president. The union representatives complained that the standards applied by Respondent were purely subjective. The Union submitted another wage proposal to Re- spondent at this meeting. This latest union proposal called for a 3.5-percent ATB increase effective 8 Septem- ber, with the employees who had received merit increase retaining those increases . Any employees not reviewed within 90 days of 23 September would be reviewed and given increases consistent with the increases granted on 23 September. The union proposal called for the creation of an Incentive Raise Committee, composed of three Union and three management representatives , to devise Twelfth Bargaining Session- 19 September The parties met with the Federal mediator on this date. The Union insisted on its 4-percent ATB wage pro- posal and Respondent continued to adhere to its merit in- 10 According to Gibson, the union representatives took the position that the strike broke the bargaining impasse " In a subsequent communication to the unit employees on 28 Septem- ber, Respondent summarized the results of the initial implementation of its merit review program. Respondent noted that there were 72 unit em- ployees and merit reviews had been given to 47 of them Of this number, 44 received merit increases and 3 employees received no increase after the merit review. The merit increases ranged from 4 percent to 8 5 per- cent and the average increase for the employees was 5 6 percent In this communication Respondent informed the employees that the remaining 25 employees would be reviewed within 90 days (See A. Exh. 22.) COLORADO-UTE ELECTRIC ASSN. 617 the manner and means by which merit increases would be granted in the future and how disagreements would be resolved. (See A. Exh. 23.) The Union also orally re- quested that a written summary be given after each em- ployee's merit review . Respondent rejected the Union's proposal. Gibson indicated, however, that Respondent could possibly accept the Union's request that everyone reviewed would retain the wage increases as proposed by Respondent. Further, that Respondent would agree to review the balance of the employees within 90 days of 23 September and grant increases on the same basis as the initial increases. Later during this same meeting Respondent submitted another written proposal to the Union. This proposal contained the same terms as Respondent 's 5 September offer in that the current progression steps constituted the minimum hourly wage and merit increases were based on job performance and contribution on the job. As in the prior offer, the amount and frequency of the merit in- creases were to be determined by the division heads and Respondent's president and were not subject to the grievance procedure . In addition, however, Respondent offered a one-time payment of $ 100 to unit employees not receiving a merit increase between 23 September and 20 December; payment of this one-time amount was to be made on or before 31 December. (See Jt. Exh. 24.) Respondent also proposed mutual release by the parties for actions arising out of the strike and an agreement not to take any action against striking employees or employ- ees who crossed the picket line. (See Jt. Exh. 25.) Sixteenth Bargaining Session-4 October When the parties met, the union representatives reject- ed Respondent's offer of the prior day. The Union ob- jected because there was no provision for grieving the merit increases and there was no union input regarding the standards to be used in the merit reviews. The Union submitted a new proposal asking for 8.5- percent ATB increases effective 8 September and the es- tablishment of an Incentive Raise Committee. This com- mittee was to develop objective criteria for merit in- creases and the manner in which disagreements would be resolved. (See Jt. Exh. 26.) Respondent rejected this latest offer from the Union. As the meeting progressed, the Union submitted an- other offer which consisted of two options "for breaking the impasse and ending the strike." (See Jt. Exh. 27.) This proposal involved interest arbitration and the first option required submission of Respondent's last and final offer and the last offer of the Union to an arbitrator to choose between the two. The second option entailed the submission of the last offers of the parties to an arbitrator to fashion a "fair and equitable" wage agreement. Re- spondent also rejected this proposal. The parties did not meet again until 5 November. In the interim, Gibson forwarded a report to the Union in- dicating that Respondent had completed the merit re- views of all of the remaining unit employees . The report revealed that 26 employees were reviewed and 25 re- ceived merit increases ranging from 3 to 8 . percent. The average increase was 5 . 14 percent. (See Jt. Exh. 28.) Seventeenth Bargaining Session-5 November Shaputis became the chief spokesperson for the Union at this meeting . The Union orally proposed that Re- spondent grant a 4-percent ATB increase in 1984 and a 5-percent ATB increase in 1985 . The Union also request- ed that a joint committee be set up to design a merit in- crease program and develop the criteria which would be used in granting these increases. The product of the com- mittee's work would be the subject of negotiations in 1986. The union representatives indicated that the Union preferred not to have any merit increases at all, but was willing for the parties to establish a joint committee to develop the standards for a merit program. Eighteenth Bargaining Session-6 November At this meeting, the Respondent rejected the Union's oral proposal of 5 November . Gibson stated that across- the-board increases did not solve the problems of the longer service employees . He told the union representa- tives that the Respondent would not lock in 1985 wage increases in the current negotiations. He further stated that there was no need to establish an incentive raise committee because Respondent had already developed the guidelines for the merit program. When the union representative protested this was after the fact and that Respondent never gave the guidelines to the Union in advance, Gibson stated that job performance and contri- bution on the job were the criteria of the merit program. The Union continued to press for specific guidelines in judging whether an employee deserved a merit increase and Gibson informed them that Respondent 's guidelines had already been stated. The parties agreed at this meet- ing that Krumins would meet with unit employees on 13 November to explain how the merit increase program worked. 12 Nineteenth Bargaining Session-7 November At this meeting the parties devoted their discussion to the Union's proposal for the establishment of a joint committee to study and develop a merit increase plan with an appeals procedure. The union representatives were urging a process whereby it would have some rep- resentational input when an employee felt his or her merit review was not fair or just . No agreement was reached during these discussions. Twentieth Bargaining Session-5 December Gibson presented another written proposal to the union representatives at this meeting. In this proposal, Respondent offered a 4-percent increase in the step pro- gressions for all classifications effective 15 September 1985 and the elimination of the first 6-month hire-in rate. 12 The record reveals that on 13 November, Krumms met at Respond- ent's headquarters with the unit employees from all of Respondent's fa- cilities Representatives from the Union were present during this meeting. Krumins explained the operation of the merit increase program to the employees. During this meeting , Krumins informed the employees that Respondent was no longer using the "MSL" ratings (more than satisfac- tory, satisfactory, and less than satisfactory) on the merit increase notifi- cations. 618 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Respondent proposed that each employee receive at least one merit review between 23 September 1984 and 14 September 1985 and at least one other between 15 Sep- tember 1985 and 16 September 1986. Respondent contin- ued to insist that the amount and frequency of the merit increases would be determined by the appropriate de- partment head and Respondent 's president and would not be subject to the contract grievance procedure. Re- spondent proposed that in the event an employee took issue with the results of the merit review, the employee could request a meeting with Respondent 's president and could have a union representative present at the meeting. (See Jt. Exh. 30.) Although the union representatives found some parts of Respondent's proposal to be acceptable, they rejected other portions and made a counteroffer. The union rep- resentatives asked for a 4-percent increase in the step progressions effective 8 September 1984 and another 4 percent the following year. The union representatives also requested that employees receive a written summary of their evaluations when undergoing a merit review, and that the summaries contained provisions for the re- viewed employees to agree or disagree with the evalua- tion and the reasons for their position. Respondent countered with another offer which re- jected the written summary during merit reviews. Gibson stated employees could appeal directly to Re- spondent's president and have a union representative present during the appeal . Respondent also offered a 2- percent increase in the step progressions effective 6 Janu- ary 1985 and an additional 3 percent effective 15 Septem- ber 1985. Twenty-First Bargaining Session-6 December At this meeting, the union representatives sought to discuss the need for summaries of the merit evaluation and the criteria used by Respondent's officials in evaluat- ing the employees. The union representatives proposed that the merit system utilized by Respondent become null and void at the end of the contract term. They also proposed that once an employee was granted a merit in- crease, there would be "no take aways" to reduce that employee's rate. The union negotiators requested that Respondent grant a 3 .5-percent increase in the progres- sion steps effective 6 January 1985 and an additional 4- percent increase on 15 September 1985. The union repre- sentatives contended these increases would not affect any employees currently on the payroll , since they were less than the increases the employees had already received. In the afternoon, Respondent rejected the Union's pro- posal stating that there would be no written summaries given to employees during their merit reviews , Gibson assured the Union that Respondent would not use any form of take aways to reduce any merit increase granted an employee . Respondent rejected the Union's proposal for the percentage increases in January and September. Gibson submitted a new written offer to the Union. In this offer, the Company proposed to increase the pro- gression steps in all classifications by 2 percent effective 6 January 1985 and by 3 percent effective 15 September 1985. As with its last proposal, Respondent proposed to eliminate the first 6-month hire-in rate from the progres- sion steps. In addition, the Respondent continued to insist that the amount and frequency of the merit in- creases would be determined by the appropriate division head and Respondent's president and not be subject to the contract grievance procedure . Respondent's proposal also contained a provision that if an employee felt im- properly treated during a merit review, the employee could appeal directly to Respondent's president and could have a union representative present during the meeting. (See A. Exh. 31.) Gibson told the union repre- sentatives that Respondent had already granted employ- ees merit increases exceeding 5 percent and that there were no more negotiated moneys available for the em- ployees. The union representatives countered with a proposal of a 3-percent increase in January in the progression steps and an additional 4 percent in September 1985. The union representatives also continued to insist that em- ployees be provided a written summary of their merit re- views. Gibson rejected the idea of written summaries and proposed that if the Union accepted the Respondent's offer, a one-time cash payment of $ 100 would be given to each unit employee when the agreement was ratified. The union representatives rejected Respondent's propos- als. Twenty-Second Bargaining Session-26 March 198519 The Union continued to request that a joint committee be established to define Respondent's merit review crite- ria. They also wanted documentation concerning the guidelines followed by management in the merit review and what the merit review themselves entailed . Addition- ally, the union representatives sought to have the merit review program subject to the grievance and arbitration procedure of the collective-bargaining agreement. Gibson took the position that employees could grieve only if they did not receive the contract minimum rates for their job classifications . He offered to submit a new wage proposal to the Union on the following day. Twenty-Third Bargaining Session-27 March 1985 Respondent gave a new wage offer to the union repre- sentatives at this meeting. Similar to the prior proposals, this proposal was a combination of increases in the step progressions for each job classification and the Respond- ent's already instituted merit increase program . Respond- ent offered a 4-percent increase in the wage steps effec- tive 30 June 1985. It dropped the language that stated the amount and frequency of the merit review was not subject to the grievance procedure of the collective-bar- gaining agreement . In its place, Respondent provided the amount and frequency would be at the sole discretion of the employer and determined by Respondent 's president 19 The parties met on 26 and 27 March 1985. Although the bargaining notes and the written proposal presented by Respondent at these sessions are part of the joint exhibits, the General Counsel argues the testimony and documents relating to these meetings are not relevant to the allega- tions of the complaint The argument of the General Counsel in this regard was rejected and these meetings are set forth to provide the com- plete factual account of the wage negotiations between the parties. COLORADO-UTE ELECTRIC ASSN. and the employee's division head . It also provided for employee appeal from the royalty of the merit review di- rectly to Respondent's president and permitted the em- ployee to have an appropriate union representative pre- vent during the appeal . (See R. Exh. 3.) Gibson took the position at this meeting that if merit review were not granted within the stated time period , this would be sub- ject to the contract grievance procedure. However, the amount and frequency of the merit review was not sub- ject to the grievance procedure. In the afternoon meeting of this bargaining session, Respondent submitted another written proposal to the Union. The sole difference between this proposal and the one presented in the morning was that Respondent now proposed to increase the progression steps by 2 percent effective 16 December 1984 and 2 percent effective 16 June 1985. (See A. Exh. 36.) The meeting concluded with the parties unable to resolve their differences. B. The Alleged Direct Dealing with a Unit Employee Joan Deskin (Hiss) was a union steward at the Craig facility and during the negotiations, she was a member of the Union's bargaining committee.14 According to the undisputed testimony, Hiss contacted Krumins on 8 Oc- tober and requested that he come to Craig to explain Re- spondent's merit program to the unit employees there. Krumins met with the employees at Craig on 14 Octo- ber. In explaining the operation of Respondent 's merit in- crease program, Krumin told the employees it was possi- ble for management to grant an employee a merit in- crease at the same time the employee received a progres- sion step increase. During the discussion with the em- ployees, Hiss informed Krumins that the merit increase she received on 23 September was not fair. Krumins asked Hiss to meet separately with him after the meeting. When Krumins and Hiss met, Hiss complained about the amount of her merit increase. 15 Hiss itemized the duties she performed on the job and Krumins stated he was not aware of a number of the things she had indicat- ed. According to Hiss, Krumin told her to wait until her next step increase. ta Hiss agreed but advised Krumins that if she were not satisfied, she would contact him again. The unrefuted testimony establishes that Hiss received a progression step increase as well as an additional merit increase in January 1985. The total wage increase re- ceived by Hiss amounted to 8 percent . Hiss spoke to her supervisor and asked if the increase were not too high. Her supervisor replied that he did not think so but that he had nothing to do with the amount, since the decision was made in Montrose (Respondent's headquarters). 14 During the event set forth here , Hiss was not married and all refer- ences in the record are in terms of her maiden name . At the time of the hearing, she was no longer a union steward. is The documents the Respondent submitted to the Union indicate that Hiss received a 4-percent merit increase on 23 September. (See Jt Exh. 21.) 16 Krumin's testimony regarding this statement differs somewhat from that of Hiss Krumins stated he told Hiss that she would be reviewed again at the time of her next step increase 619 C. The Incidents During the Strike As noted, when the unit employees went on strike over the wage negotiation , many operations and mainte- nance employees engaged in a sympathy strike and pick- eted with them. Clarence Koch, a plant vehicle mainte- nance mechanic at the Hayden facility , was one of these employees. Koch testified that on 18 September, he was on the picket line when he saw his supervisor, James Squires, driving an ash truck into the plant. Koch stopped Squires and climbed on the running board of the truck to speak with him.17 Koch asked Squires how things were going and Squires complained he was tired from working so hard . Koch then asked who was doing the diesel mechanic work and Squires responded that he was hoping Koch would do it. According to Koch, when he replied he could not because he was on strike, Squires said the employee could resign from the Union and Respondent would pay him $24 an hour for a 12- hour day for 7 days a week . 18 Koch indicated that the Union would fine him more than he would make if he returned to work during the strike . Koch testified Squires then told him the Union could not fine him if he resigned. Squires admitted having a conversation with Koch on this date. He also admitted he told the employee he was working 12 hours a day 7 days a week at double time. Squires stated he spoke to Koch as a friend and had not been authorized by anyone in management to make any offer to Koch to abandon the strike and return to work. Squires acknowledged he told Koch he could return to work if he secured a lawyer and took the proper steps to resign from the Union . He was unable to recall whether he told Koch that the employee would earn double time and work 7 days a week if he returned to work. The second incident alleged to have occurred during the strike also involved Koch . On 24 September, while on picket line duty, Koch was instructed by the strike captain to follow a bus which Respondent used to trans- port employees to and from their homes to the Hayden facility during the strike. Koch's mission was to check the bus when it discharged passengers to see if any union employees were working during the strike. The undis- puted testimony reveals that strikers regularly were as- signed to trail Respondent's bus for this purpose when it left the plant. It is also undisputed that in trailing the bus Koch did not drive dangerously or attempt to interfere in any manner with the progress of the bus; nor did he make any threatening gesture toward the occupants or engage in conduct which would attract attention to the fact that he was following the bus . His wife, Linda, and striking employee Penny Libby were in the automobile with Koch at the time. When the bus stopped at a parking lot at a Holiday Inn in Craig (approximately 7:40 p.m.), a male got out and came over to the driver's side of Koch's car and spoke through the window . According to Koch, the in- 17 Koch and Squire were friends and normally rode to and from work together in a carpool. 18 At the time of the strike, Koch was earning $12 34 an hour and working a 40-hour week 620 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD dividual stated, "You asshole, if you think you're going to follow this bus and find out where I live, you've got another thought coming." Koch replied he was no asshole and neither was the individual who was con- fronting him. Koch asserted that it was a public highway and he could drive where he wanted. The man then told Koch he knew who he was and that he would watch Koch's schedule and "would get him when this is over." The individual then returned to the bus. Libby, who was sitting in the rear of Koch's car, identified the individual as John Rudisaile, a fuels supervisor at the plant. Libby lived on the same street as Rudisaile and dealt directly with him on several occasions during the course of her work at the Hayden plant . After the incident, Koch took Libby to her home.19 Koch notified the union official of the incident with Rudisaile. Koch was contacted by a coworker, Jeffery Crawford, the following day concerning the confrontation with Ru- disaile. Koch was told by Crawford that Rudisaile had called Crawford's home the night before asking if Craw- ford could contact Koch. Crawford stated Rudisaile ex- plained that he had "blown up" at Koch and wanted to apologize to him . In explaining the incident to Crawford, Rudisaile said he thought Koch might be a burglar. Both Crawford and Koch testified they dismissed this explana- tion after Koch informed Crawford that Libby was in Koch's automobile at the time. Rudisaile admitted confronting Koch in the Holiday Inn parking lot. He also admitted on cross-examination that after the inception of the strike , strikers in automo- biles followed Respondent's bus every evening as it left the Hayden facility. In explaining why he accosted Koch in the parking lot, Rudisaile stated that an automobile followed Respondent's bus the evening before when he was being taken home. He testified that when he was let off at his street, he became concerned and went to the home of a neighbor. After the automobile left, he then went to his own home. According to Rudisaile, later that same evening, the neighbor informed him that someone with a knife appeared at his door and the neighbor called the police. Rudisaile also admitted, on cross-examination, that when Koch's automobile was identified by the occu- pant of the bus on the night of the incident, they were no longer concerned about being followed because they felt they had nothing to fear from Koch. Charles Hogue, station superintendent of the Hayden facility, testified that prior to the strike he met with all of his managers and supervisors and explained what their conduct was to be during the strike . Hogue stated he in- structed them not to converge with the striking employ- ees and to pass through the picket line "as low key" as possible. Hogue further testified that management did not authorize any of the supervisors or management employ- ees to offer strikers higher wages to return to work; nor were they to threaten any of the striking employees.20 19 Both Libby and Linda Koch corroborated Koch 's testimony as to the conversation that took place with Rudisaile. 29 Krumin also testified that management was specifically instructed not to talk to the strikers on the picket line or to make any offer to them. Hogue further testified that after he was made aware of the incident involving Koch and the two supervisors, he held another meeting with all of his managers and super- visors. He repeated his prior instructions that the super- visors and managers were not to converse with or make any offer to the picketing employees. Concluding Findings A. The Bad-Faith and Surface Bargaining Issues Counsel for the General Counsel and Charging Party argue, with some degree of persuasiveness, that the merit increase proposal itself and Respondents unyielding in- sistence on this method of a wage increase demonstrate Respondent was engaging in lengthy negotiations with- out an intent to reach an agreement with the Union on the wage issue. Further, they contend the merit proposal, coupled with Respondent's negotiating posture at the bargaining table, the unilateral implementation of the merit program (assertedly without having reached a valid bargaining impasse), and the incident of direct deal- ing with an employee regarding her wage increase all es- tablish that Respondent was not bargaining in good faith with the Union. The principal contention underlying these arguments is that Respondent's merit increase pro- gram completely excluded the Union from exercising any representational participation, whatsoever, in this most vital area of the employment relationship , namely, wages of the unit employees. In support of their arguments, the General Counsel and Charging Party rely heavily on several Board deci- sions in which, unlike the instant cases, the parties were negotiating for a complete collective-bargaining agree- ment, but where the employers were insisting on an un- fettered right to grant merit increases at their sole discre- tion.21 See Smythe Mfg. Co., 247 NLRB 1139 (1980) (employer rigidly insisting on an open shop provision, a grievance procedure which severely limited the union's role, and a merit wage increase system which completely excluded the union from any participation in its oper- ation); Struthers Wells Corp., 262 NLRB 1080 (1982) (em- ployer insisting on altering jurisdictional clause to permit it to deny recognition of union as representative of em- ployees performing unit work, insisting on a merit in- crease program at employer's sole discretion, and insist- ing on elimination of posting and bidding procedures to permit it to unilaterally control promotions), enfd. as modified 712 F.2d 465 (3d Cir. 1983); A-1 King Size Sandwiches, 265 NLRB 850 (1982) (employer inflating on merit increase program at its sole discretion with no re- course to the union because of employer's insistence on broad management-rights and no-strike provisions. Also, insistence on removal of discharge, discipline, layoff, and recall provisions from contract grievance and arbitration procedure), enfd. 732 F.2d 872 (11th Cir. 1984). Respondent contends, in an equally persuasive manner, that it was legitimately seeking a two-tier wage structure 81 The General Counsel contends that the evidence of bad faith is more graphically demonstrated in the instant matter since the parties here were focusing only on one issue-wage-as opposed to bargaining over numerous issues in a complete collective-bargaining agreement COLORADO-UTE ELECTRIC ASSN. consisting of guaranteed minimum wages and a merit in- crease system. Respondent argues that neither the wage proposal itself nor its conduct during the negotiation es- tablish Respondent was negotiating in bad faith or going through the motions of bargaining without an intent to reach an agreement . In support of this argument, Re- spondent asserts that its proposals were not "demonstra- bly unreasonable," that it explained to the Union the un- derlying reasons for its wage proposal position, and that it met diligently with the Union in an effort to resolve their differences. All of this, Respondent argues, demon- strates that it was not engaging in surface or bad-faith bargaining but, rather, that it was employing hard bar- gaining tactics to achieve its negotiation objective. Cases of this nature, involving allegations of bad-faith and surface bargaining during negotiation, are not easily resolved. The line of demarcation between hard bargain- ing and surface bargaining is neither bright nor well de- fined. The boundaries of the bargaining obligation, how- ever, are well established and it is within this framework that the particular fact of each case must be considered. As the Supreme Court long ago stated, "The Board [in determining whether the statutory bargaining obligation has been satisfied] may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective -bargaining agree- ments." NLRB v. American National Insurance Co., 343 U.S. 395, 404 (1952). The Court also recognized that in ascertaining whether good-faith bargaining occurred during negotiations , "the Board has been afforded flexi- bility to determine . . . whether a party's conduct at the bargaining table evidences a real desire to come into agreement," and that this determination is made by "drawing inferences from the conduct of the parties as a whole." NLRB v. Insurance Agents Union, 361 U.S. 477, 498 (1960). See also NLRB v. Holmes Tuttle Broadway Ford, 465 F.2d 717, 719 (9th Cir. 1972). Thus, it is neces- sary to consider the totality of the circumstance in each case to determine whether the good-faith bargaining ob- ligation has been met. In keeping with these principles, the Board in recent decision stated, "It is not the Board's role to sit in judg- ment of the substantive terms of bargaining, but rather to oversee the process to ascertain that the parties are making a sincere effort to reach agreement ." Rescar, Inc., 274 NLRB 1 (1985). Also Reichhold Chemicals, 277 NLRB 639 (1985). In spite of this language, however, the cases demonstrate the Board does, with Court sanc- tion, consider the content of bargaining proposal in eval- uating the total circumstances when determining whether good-faith bargaining has occurred during contract nego- tiations. A-I King Size Sandwiches, 265 NLRB 850 ( 1982), enfd. 732 F.2d 872 (11th Cir. 1984); Chevron Chemical Co., 261 NLRB 44, 46 ( 1982); Seattle-First National Bank v. NLRB, 638 F.2d 1221, 1225-1226 (9th Cir. 1981); Pease Co. v. NLRB, 666 F.2d 1044 (6th Cir. 1981); NLRB v. Wright Motors, 603 F.2d 604 (7th Cir. 1979); NLRB v. Tomco Communications, 567 F.2d 871 (9th Cir. 621 1978); NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131 (1st Cir. 1953), cert. denied 346 U.S. 887 (1953).22 In the Wright Motors case, the court pointedly articu- lated one of the foremost reasons why it is necessary to consider the bargaining proposals when determining whether parties are bargaining in good faith . There, while affirming the caveat "that neither the Board nor the courts should sit in judgment on the substantive terms offered by parties negotiating in good faith," the court went on to state:23 Sometimes, especially if the parties are sophisticat- ed, the only indicia of bad faith may be the propos- als advanced and adhered to. The fact that it may be difficult to distinguish bad faith bargaining from hard bargaining cannot excuse our obligation to do so. Considering all of the circumstances developed in the record and applying the principles set forth above, I con- clude the record evidence does not warrant a finding that Respondent bargained in bad faith or engaged in ne- gotiations without intent to reach an agreement with the Union on the wage issue. Rather, the facts here demon- strate Respondent engaged in hard bargaining and ad- hered to a legitimately held position during the wage-re- opener negotiations. It is readily apparent from the outset of the negotia- tions that the Union was insisting on across-the-board (ATB) wage increases. It is equally apparent Respondent was insistent on instituting a merit system whereby em- ployees would receive wage increases at times and in amounts determined solely by management, and the exer- cise of this discretion would not be subject to the con- tract grievance procedure. The fact that Repondent's merit system proposal was unacceptable to the Union be- cause it eliminated the Union from any effective repre- sentational participation in its operation does not, stand- ing alone, indicate Respondent was bargaining in bad faith. As the Court noted in the Pease Co. case, "a lack of good faith may not be found merely because a party attempts to secure provisions that the other party deems unacceptable." 24 Nor does the fact that Respondent was insisting that the operation of the merit increase system be removed from the contract grievance procedure evi- dence a lack of good faith . The mere insisting on conces- sion which limit the representational function of a union in some respects does not, without more , establish bad faith in collective bargaining. Reichhold Chemicals, supra; cf. NLRB v. Tomco Communications, supra at 613. While Respondent's merit increase proposal , initially and as modified during the negotiations, may be deemed harsh from the Union's prespective, it was not "so un- usually harsh, vindictive, or unreasonable" so to warrant the conclusion that it was offered in bad faith. Chevron Chemical Co., supra at 46. The Union's negotiators were 22 In a recent decision, the Board specifically noted that unreasonable bargaining demands during negotiations constitute an example of conduct demonstrating lack of good faith . Atlanta Hilton & Tower, 271 NLRB 1600, 1603 (1984). 23 NLRB Y. Wright Motors, 603 F.2d at 609-610. 24 Pease Ca Y. NLRB, 567 F.2d at 1049. 622 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD informed initially, and throughout the numerous bargain- ing sessions, of the reasons why Respondent was insisting on a merit increase program : (1) it wanted to be able to reward those employees whose job performance exceed- ed the norm ; and (2) it wanted to correct the inequities an ATB increase would have on the overall increases re- ceived by employees at the top of their wage steps. Fur- thermore, at no time during the negotiations did Re- spondent seek to reduce the current level of employee wages.25 When Respondent presented its initial written proposal to the Union at the third bargaining session, it sought to eliminate the wage progression steps and sub- stitute minimum, mid-level and maximum rates for each job classification . Examination of this initial proposal re- veals that the minimum and midlevel rates offered by Respondent were extracted from the existing progression steps of the current collective-bargaining agreement and the maximum rates exceeded the top step rates by at least 3 .5 percent. This constituted the bottom tier or the guaranteed rates for each job classification . All increases beyond these rates were to be subject to Respondent's merit program. In its subsequent proposals, commencing at the fifth bargaining session, Respondent abandoned its stand on the elimination of the progression steps and in- corporated them in toto as the bottom tier for each suc- cessive wage proposal submitted to the Union during the negotiations . Thus, the record does not warrant an infer- ence of bad faith from the terms of Respondent's merit increase proposal. The next issue to be considered is whether Respond- ent's conduct demonstrates that it was engaging in nego- tiations without a sincere desire to resolve its difference with the Union and reach an agreement. In my judg- ment, the record does not support such a finding. To the contrary, the recital of the bargaining proposals and tac- tics employed by both parties throughout the lengthy ne- gotiations graphically illustrate that the parties were en- gaging in the very process contemplated by the Act. Respondent met with the Union during 23 lengthy bar- gaining sessions spanning a timeframe from 31 July 1984, to 27 March 1985.26 In eight of these sessions , the par- ties used the assistance of a Federal mediator . The wage proposal submitted by Respondent and its bargaining posture throughout the negotiations were consistent with its stated bargaining objectives; i.e., to institute a wage structure which would combine a guaranteed minimum wage equal to the existing wages and a merit increase system based on management's sole discretion and not subject to the contract grievance procedure. Respond- ent's firm insistence on its wage proposal and its rejec- tion of the Union's wage offers, including the numerous concessions made by the Union, do not establish that Re- spondent was negotiating without an intention of reach- ing an agreement with the Union. As the cases illustrate, a party may stand firm on a position it deems reasonable 25 This is not to suggest that if Respondent were seeking wage reduc- tions, it would necessarily warrant a finding of bad faith. However, that Respondent was not seeking such a reduction is a factor to be considered in assessing the total circumstances here 86 The 23 bargaining sessions include the one session on 20 September where the parties did not meet face to face but submitted proposals through the Federal mediator. and fair and such insistence , of itself, does not constitute evidence of bad faith . Atlanta Hilton & Tower, supra at 1603 (and the cases cited therein ). See also Hamady Bros. Food Markets, 275 NLRB 1335 (1985); Pease Co. v. NLRB, supra at 1049. Thus, I find Respondent's conduct at the bargaining table embodied none of the characteristics that would in- dicate it was not sincerely attempting to reach an agree- ment with the Union on the wage issue . Its negotiator was vested with full authority and met diligently with the union negotiators through 23 bargaining sessions; Re- spondent's insistence on a wage package coupling guar- anteed minimum wages with a merit increase program not subject to the grievance procedure was not unreason- able; the wage proposals offered by Respondent during the bargaining session, both prior and subsequent to the implementation of its 5 September final offer, were con- sistent; and Respondent did not engage in any deceptive practices or attempt to mislead the union negotiators in any manner during the bargaining sessions. Nor does Respondent's conduct away from the bar- gaining table demonstrate that it was negotiating in bad faith. The General Counsel and Charging Party contend that Respondent's president, Krumins, engaged in direct dealing with employee Joan Hiss on 8 October concern- ing her wages and that as a result , Hiss subsequently re- ceived an 8-percent wage increase in January 1985. This factor is cited as evidence that Respondent was negotiat- ing in bad faith and attempting to undermine the Union's representative status in order to discourage employee support for the Union. The record facts, however, do not support this contention, and I find that no inference of bad faith can be drawn from this incident. Hiss was a union steward at the Craig facility and a member of the Union's negotiating team meeting. It was after Respondent implemented its 5 September final offer that he made the request for Krumins to come to the Craig facility and explain the operation of the merit in- crease program to the unit employees there . Following the meeting, Hiss complained privately to Krumins be- cause he only received a 4-percent increase as a result of her merit review on 23 September . She also recited a number of duties she performed and Krumins acknowl- edged that he was not aware of all of this. Krumins nei- ther promised Hiss an additional wage increase nor did he state a set amount that she could expect to receive. Krumins simply told the employee to wait until her next progression step increase and she would be reviewed again. Contrary to the General Counsel and Charging Party, this incident does not establish that Respondent was en- gaging in direct dealing with Hiss. First of all, Hiss was the union steward and representative at the Craig facili- ty. Her complaint regarding her wage increase as an em- ployee cannot be divorced from her representative status as the union steward . Thus, Hiss the union steward was in fact representing Hiss the employee . Additionally, there is no evidence whatsoever that Krumins promised Hiss she would receive an additional merit increase at the time of her next step progression. He merely indicat- ed to the employee that she would be reviewed at that COLORADO-UTE ELECTRIC ASSN. time and suggested she wait until then . I find nothing here which suggests Krumins was negotiating individual- ly with Hiss concerning her future wage increase. He simply informed the employee that she would undergo another merit review when she was entitled to her next step increase . Therefore, I find that Krumins was not en- gaging in direct dealings with Hiss regarding her wages. Nor was his conduct such that it demonstrated he was attempting to bypass and undermine the Union during the negotiations. In sum, I find the evidence of Respondent 's overall conduct during the wage-reopener negotiation does not sustain an inference that Respondent was bargaining in bad faith. Rather, these circumstances more appropriate- ly demonstrate Respondent was engaged in hard bargain- ing and was relying on its economic strength to achieve its bargaining objectives. B. The Impasse Issue The General Counsel and Charging Party contend the parties had not bargained to a valid impasse on the wage provisions when Respondent implemented the terms of its final proposal on 23 September. In my judgment, the record evidence compel a contrary conclusion, and I find a valid impasse in negotiation had occurred when Respondent unilaterally implemented its wage proposal. The case law is well established on this point. When an employer unilaterally changes a condition of employ- ment that is a mandatory subject of bargaining , he vio- lates the Act because he has circumvented the statutory duty to negotiate with the bargaining representative of his employee. NLRB v. Katz, 369 U.S. 736, 743 (1962). Where the parties have reached a genuine impasse in ne- gotiations, however, an employer is free to unilaterally implement changes in employment terms and conditions; provided those changes are reasonably consistent with the terms last offered to the Union during negotiations. Id. at 745; Hamady Bros. Food Markets, supra; Western Publishing Co., 269 NLRB 355 (1984); Taft Broadcasting Co., 163 NLRB 475 (1967), enfd . sub nom. Television Art- ists v. NLRB, 395 F.2d 622 (D.C. Cir. 1968). As the Board stated in Taft Broadcasting, the following factors are to be considered in determining whether parties have reached a genuine impasse in collective bargaining: Whether a bargaining impasse exist is a matter of judgment. The bargaining history, the good faith of the parties in negotiations , the length of the negotia- tions, the importance of the issue or issues as to which there is disagreement, the contemporaneous understanding of the parties as to the state of nego- tiations are all relevant factors to be considered in deciding whether an impasse in bargaining existed. 27 Applying these factors to the instant case, I find there was a genuine impasse in bargaining when Respondent implemented its last wage offer . Respondent's last wage proposal was submitted at the 10th bargaining session on 5 September. The record clearly demonstrates that 27 Taft Broadcasting, supra at 478. 623 throughout all of the bargaining sessions the Union was insisting on ATB increases and Respondent was equally adamant that the wage structure consist of minimum contract wage rates for each job classification, with a merit increase program operated solely at management's discretion and not subject to the contract grievance pro- cedure. During the course of the 10 bargaining sessions, proposals and counterproposals were exchanged by the parties with no agreement on the central elements of either party's wage offers. The Union adhered to its ATB increase demand, although it progressively reduced the amount of the increase, and Respondent firmly ad- hered to its minimum guaranteed wages with a purely discretionary merit increase system. While concessions were made by both sides, there was no retreat by either on the type of wage increase that ul- timately would be put into effect. For example, by 5 September, the Union had reduced its initial ATB demand in graduated amounts from 9 percent to 4 per- cent and proposed a freeze on the level of the initial hire-in rates of new employees . At one bargaining ses- sion, the Union also proposed combining ATB increases with some form of a merit system which permitted Re- spondent to reward deserving employees by accelerated movement through the progression steps . Respondent changed its initial proposal so that first-line supervisors were removed from the operation of the merit increase program and the discretion (as to when and in what amounts increases would be granted) was vested in the appropriate division head and Respondent 's president. Respondent also abandoned its initial efforts to eliminate the current wage steps as the minimum contract wage rate. Finally, Respondent offered a one-time payment of $100 to each unit employee if the Union accepted its merit increase proposal. These concessions, however, failed to cause any movement by either party on the cen- tral issue dividing them; i.e., the Union's demand for ATB wage increases and Respondent's adamant insist- ence on a wage structure consisting of minimum guaran- teed wage rates and the discretionary merit increase system. Thus, it is evident that when Respondent's final offer was rejected on 5 September the parties were dead- locked in their negotiations . They had met diligently over the course of 10 lengthy bargaining sessions, utiliz- ing the assistance of a Federal mediator in several. The sole issue of their negotiations was the wage proposal and at the time of Respondent's final offer on 5 Septem- ber, they were as divided on this issue as they were when negotiations began on 31 July. Furthermore, their subsequent meetings on 18 and 20 September-prior to the date Respondent unilaterally implemented the terms of its final offer-failed to break this deadlock. That an impasse existed at this point is even more clearly reflected by the evidence showing the under- standing of the parties themselves. After the Union re- jected Respondent's final wage proposal of 5 September, Gibson's letter to Joens on 12 September clearly indicat- ed Respondent considered the negotiations to be dead- locked. Although this view would be considered self- serving if only expressed by Respondent, the record re- 624 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD veals this was also the understanding shared by the union negotiators. When the parties met on 18 September, the unrefuted evidence establishes that the meeting was initi- ated by Union Representative Shaputis, who informed Gibson that the Union had a proposal "to break the im- passe." Further evidence that the union representative considered the negotiations deadlocked is found in the recorded messages made by Mason on the Union's "hot line" to keep employees informed about the status of the negotiations. The unrefuted testimony establishes that Mason's message on 20 September stated the Union would make another wage offer to Respondent in order to "resolve the impasse" in a peaceful manner. Indeed, the written proposal submitted by the Union to Respond- ent on that date contained the following prefatory sen- tence: "The UNION proposes three options to the COMPANY for breaking the impasse." (Emphasis added.) (See Jt. Exh. 17.) Again, on 24 September the Union' s message advised callers that Respondent had rejected the Union's propos- al "for resolving the impasse." Hence, the record fully establishes that the parties con- sidered their negotiations deadlocked when the Union re- elected the final offer made by Respondent on 5 Septem- ber. I find no merit in the contention of the Charging Party that the use of the term "impasse" by the union representatives was the result of a layman's understand- ing and without full knowledge of its legal implications. The bargaining notes and the testimony demonstrates that the representatives for the Union were experienced negotiators who fully comprehended the meaning of this term and its role in collective bargaining. I also reject the argument of the General Counsel that the Union's continued movement toward compromise during the ne- gotiations overrides any characterization it may have made about the status of the negotiations. The record shows that Respondent's merit increase proposal was un- acceptable to the Union even though the Union made compromises and alternative proposals during the negoti- ations. Nor does the fact that the parties continued negotiat- ing after Respondent' s unilateral implementation of its final proposal in any way vitiate the finding of an im- passe here. The critical question is whether the negotia- tions were deadlocked on the date the unilateral imple- mentation occurred (23 September), and I find the record amply demonstrates they were indeed deadlocked at that point. Cf. Financial Institution Employees Local 1182 v. NLRB, 738 F.2d 1038, 1043 (9th Cir. 1984). Ac- cordingly, I find that the parties had reached a genuine bargaining impasse when the Union rejected Respond- ent's final offer and, therefore, Respondent was free to implement the terms of its final proposal on the date that it did. Finally, the General Counsel and Charging Party argue that Respondent's implementation of its merit in- crease program exceeded the terms of the final wage proposal made to the Union on 5 September. In my judgment, the record also fails to support this contention. Under the terms of Respondent's final proposal, the amount and frequency of the merit reviews and increases were solely at the discretion of Respondent's division heads and its president. Thus, no limitations were con- tained in Respondent's wage proposal regarding the number of times an employee could receive a merit review or the percentage of wage increase that could be granted. In addition, Respondent's wage proposal re- tained the wage progression steps of the current collec- tive-bargaining agreement, thereby enabling some em- ployees to receive a step increase at the same time they received a merit wage increase. The record reflects that the Union's negotiators were informed this could occur. In addition, Respondent's president informed the em- ployees that it was possible they would receive step in- creases in conjunction with merit increases. I find, there- fore, that the record does not establish that Respondent's implementation of the terms of its wage proposal was in- consistent with the terms of the final wage offer made to the Union on 5 September. C. The Incidents During the Strike There is no significant dispute about the circumstances surrounding the two incidents involving striking employ- ee Koch and Supervisors Squires and Rudiasiles, respec- tively. In the Squires' incident, the record discloses that Squires told Koch on 18 September that if the employee returned to work, he would receive double wages and work 7 days a week.28 When Koch stated the Union would fine him more than he would earn if he returned to work, Squires told the employee he could resign from the Union. Regarding the Rudisaile incident, the record discloses that Koch was in his automobile trailing the bus from the Hayden facility in order to determine which employees were working during the strike. Further, that Rudisaile became angry when he observed the bus being followed and confronted Koch at the Holiday Inn. I credit the tes- timony of Koch, his wife, and Libby and find that during the confrontation Rudisaile told Koch he knew who he was and that he would watch Koch's schedule and get him when (the strike) was over. While Respondent does not seriously contend that these incidents did not take place, it argues that it is not liable for the conduct of Squires or Rudisaile because all supervisors had been instructed by management not to threaten or make any promises to the striking employees. Respondent further asserts it disavowed the unauthorized conduct of Squires and Rudisailes by convening a meet- ing of all supervisors, after it learned of the two inci- dents, and reiterating its prestrike admonition to them. I find Respondent's defense here to be without merit. It is more than apparent that Squires' comments to Koch constituted nothing more than a solicitation of the em- ployee to abandon the strike and his support of the Union on the strength of a promise that the employee would receive double his normal wages if he returned to work. It is well settled that such solicitations to striking employees, which encompass promises of benefits, vio- late the Act. Pittsburgh & New England Trucking, 238 28 Since Squires could not recall whether he mentioned double wages to Koch, I find Koch's testimony regarding this statement to be a more reliable account of what was said In all other respects, the testimony of Koch and Squires was in essential agreement. COLORADO-UTE ELECTRIC ASSN. NLRB 1706, 1707 (1978); American Steel Bldg. Co., 208 NLRB 900 (1974). Nor can Respondent avoid responsi- bility for Squires' unlawful solicitation; even though it was not authorized and was specifically prohibited by Respondent's higher level management . The supervisors were cloaked with apparent authority to speak on behalf of management and there is nothing in this record which would have indicated to Koch that Squires was acting contrary to management's instructions. Indeed, the fact that Squires and Koch were personal friends only served to enhance the impression that Squires was speaking on behalf of management. See Pittsburgh & New England Trucking, supra. Similarly, it is equally apparent that Rudisaile threat- ened to retaliate against Koch for engaging in lawful strike activity at the time of the incident in the parking lot. It is axiomatic that such threats are inherently de- structive of the rights guaranteed employees under Sec- tion 7 of the Act. That Respondent also specifically pro- hibited such conduct by its supervisors does not relieve it of the responsibility for Rudisaile 's actions any more than it did in the case of the Squires' solicitation. Finally, the station superintendent's meeting with the supervisors at the Hayden facility , after both incidents became known, also fails to absolve Respondent of the responsibility for the unlawful conduct of Squires and Rudisaile . There is nothing in the record which demon- strates Respondent's purported disavowal of the unlawful actions was ever made known to any of the employees. Therefore, the impact of this unlawful conduct was never dissipated or nullified . I find, therefore, that Re- spondent violated Section 8(a)(1) of the Act when Super- visor Squires unlawfully solicited employee Koch to abandon the strike and return to work . I also find that Respondent committed an additional violation of Section 625 8(a)(1) when Supervisor Rudisaile threatened employee Koch for engaging in lawful strike activity. CONCLUSIONS OF LAW 1. Respondent Colorado-Ute Electric Association, Inc. is an employer within the meaning of Section 2(2) en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Brotherhood of Electrical Workers, Local No. 111 is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent did not refuse to bargain in good faith with the Union during the wage-reopener negotiations between the parties and, therefore, did not violate Sec- tion 8(a)(5) and (1) of the Act. 4. Respondent did not violate Section 8 (a)(5) and (1) of the Act by unilaterally implementing the terms of its wage proposal after the parties bargained in good faith to a valid impasse. 5. Respondent did not engage in direct dealing with employees concerning their wages and, therefore, did not violate Section 8(a)(5) and (1) of the Act. 6. Respondent violated Section 8(a)(1) of the Act by promising an employee increased wages and longer hours of work in order to solicit that employee's aban- donment of the strike and his support of the Union. 7. Respondent violated Section 8(a)(1) of the Act by threatening an employee for engaging in lawful strike ac- tivity. THE REMEDY Having found that Respondent has engaged in unfair labor practices, it shall be ordered to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. [Recommended Order omitted from publication.]