Toledo Blade Co.

626 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The Toledo Blade Company and Toledo Typographi- cal Union No. 63. Case 8-CA-16067 June 15, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT Upon a charge duly filed by the Union, the Gen- eral Counsel of the National Labor Relations Board by the Acting Regional Director for Region 8 issued a complaint and notice of hearing dated September 30, 1983. The complaint alleges that the Respondent engaged in certain unfair labor prac- tices within the meaning of Section 8(a)(5) and (1) of the National Labor Relations Act. About February 10, 1984, the parties entered into a stipulation of facts and jointly petitioned the Board to tranfer this proceeding directly to itself for findings of fact, conclusions of law, and the is- suance of a decision and order. The parties stipulat- ed that they waived a hearing before an administra- tive law judge, the making of findings of fact and conclusions of law by an administrative law judge, and the issuance of an administrative law judge's decision and recommended Order. The parties also agreed that the charge, complaint, and notice of hearing, answers, and stipulation of facts, and the exhibits attached thereto and made a part thereof constitute the entire record in this case and that no oral testimony was necessary or desired by the par- ties. On June 4, 1984, the Board issued its Order ap- proving the stipulation and transferring the pro- ceeding to the Board. Thereafter, the General Counsel, the Charging Party, and the Respondent filed briefs in support of their respective positions. On July 7, 1987, the Board heard oral argument on behalf of the parties and amicus the American Fed- eration of Labor and Congress of Industrial Orga- nizations (AFL-CIO), the American Newspaper Publishers Association, and the Council on Labor Law Equality. Thereafter, the General Counsel, the Charging Party, the Respondent, and the AFL-CIO 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 stipulation, the briefs, the entire record in this proceeding, and the able argument of counsel and makes the following FINDINGS OF FACT I. THE BUSINESS OF THE EMPLOYER The Toledo Blade Company, the Respondent, is an Ohio corporation with facilities in Toledo, Ohio, and is engaged in the publication and distribution of a daily newspaper, The Toledo Blade. Annually, the Respondent in the course and conduct of its business operations derived gross revenues in excess of $200,000; held membership in, or sub- scribed to, various interstate news services; pub- lished various nationally syndicated features; and advertised various nationally sold products. The parties stipulated, and we find, that the Respondent is now, and at all times material has been, an em- ployer engaged in commerce and in operations af- fecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The parties stipulated, and we find, that the Charging Party is now, and at all times material has been, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts The Respondent publishes The Toledo Blade, a daily newspaper in Toledo, Ohio. The Charging Party has represented the Respondent's composing room employees for a number of years, and the Re- spondent and the Charging Party have been parties to successive collective-bargaining agreements. In the 1976-1979 and 1979-1982 collective-bar- gaining agreements between the Respondent and the Charging Party the following language ap- peared in article V, section 5: The Company shall have the right to offer other retirement and/or separation incentives in amounts, under terms and conditions, and for periods of time that the Company shall in its sole discretion deem appropriate, and the Union waives the right to raise a dispute or ar- bitrate with respect thereto. The parties stipulate that the intent of article V, section 5 as negotiated is to permit the Respondent to make retirement and/or separation incentive offers directly to individual employees, with the Charging Party having no right to participate in discussions between the Respondent and individ- uals concerning the acceptance, rejection, or changes in the retirement and/or separation incen- tive offers. 295 NLRB No. 68 TOLEDO BLADE CO. The 1979-1982 collective-bargaining agreement expired March 21.1 The parties had been negotiat- ing a successor agreement since approximately February. About April 23 Respondent demanded, as a condition of consummating any collective-bar- gaining agreement, that the Charging Party agree that any agreement contain the article V, section 5 provision. All contractual issues have been resolved with the exception of the aforementioned clause, con- cerning which the parties bargained to impasse. B. Contentions of the Parties The General Counsel and the Charging Party contend that the Respondent's insistence to impasse on this contractual provision involving an allegedly nonmandatory subject of bargaining, namely, the waiver of the Charging Party's statutory right to represent unit employees concerning retirement and/or separation incentives, constitutes a per se violation of Section 8(a)(1) and (5) of the Act. They further argue that the subject contractual provision permits the Respondent in effect to un- lawfully bypass the exclusive bargaining represent- ative and to negotiate individually with bargaining unit members, thereby forcing the Charging Party to relinquish its statutory role as representative of unit members. They assert that the Respondent en- gaged in bad-faith bargaining by insisting on the clause. The Respondent contends that the contractual provision involves a mandatory subject of bargain- ing and that it may lawfully insist on its inclusion as a condition to agreement on any new collective- bargaining agreement. The Respondent further argues that, because the employees have lifetime job guarantees that prevent the Company from forcing retirement or other separation incentives on them, its conduct in negotiating to retain the right to deal directly and noncoercively with employees in this very limited area does not tend unlawfully to undermine the Charging Party's status or other- wise constitute bad-faith bargaining. C. Discussion The issue here is whether the Respondent may lawfully insist as a condition of consummating any collective-bargaining agreement that the agreement contain a provision waiving the Charging Party's right to participate in the Employer's negotiations with individual bargaining unit members on early retirement and separation incentives. It is well set- tled that the parties to collective-bargaining negoti- ations may bargain to impasse regarding subjects I All dates refer to 1982 unless otherwise specified 627 within the scope of "mandatory" bargaining (i.e., "wages, hours and other terms and conditions of employment") while it is unlawful to insist on "per- missive" subjects as a condition to reaching agree- ment. NLRB v. Borg-Warner Corp., 356 U.S. 342, 349 (1958). Thus the Board's characterization of a proposal as "mandatory" or "permissive" deter- mines whether the proposing party may insist that the clause be included in the collective-bargaining agreement. 2 We find that the contractual provision in dispute is a mandatory subject of bargaining. Initially we note that the specific subject matter of the provi- sion-retirement and separation incentives-has been held to be a mandatory subject of bargain- ing.3 Because such matters are terms and condi- tions of employment within the meaning of Section 8(d) of the Act, both the Respondent and the Charging Party have a statutory right to bargain to impasse concerning retirement and separation in- centives.4 The contractual provision herein would require the Charging Party to waive its statutory right to act as exclusive collective-bargaining rep- resentative for any affected employee. However, inclusion of such a waiver provision in the'propos- al does not "transform" it from a mandatory to a permissive subject of bargaining.5 In this respect, the proposal is similar in effect to other waiver-of- bargaining clauses such as certain management- rights and zipper clauses that have been held to be mandatory subjects of bargaining. NLRB v. Ameri- can National Insurance Co., 343 U.S. 395, 409 (1952); NLRB v. Tomco Communications, 567 F.2d 871 (9th Cir. 1978). It is well established that it is not illegal per se for an employer to propose and bargain concerning a broad management-rights clause or a zipper clause and this is true regardless of the fact that in- herent in such clauses is the proposed waiver of the unions' statutory bargaining rights.6 2 Primary responsibility for determining the scope of this statutory duty to bargain is vested with the Board . Ford Motor Co. v. NLRB, 441 U S. 488, 496 (1979). If reasonably defensible, the Board's decision in this area should not be rejected by a reviewing court even though the court may prefer another view of the statute Id. at 497. 8 Baltimore News American, 230 NLRB 216, 217-218 (1977), enfd as modified 590 F 2d 554 (4th Cir. 1979), A. S. Abel! Co., 230 NLRB 17, 18 (1977), enfd as modified 590 F.2d 554 (4th Cir. 1979). * The "ballot clause" in issue in Borg-Warner, supra, is distinguishable because it "settle[d] no term or condition of employment" and "deal[t] only with relations between the employees and their unions " 356 U S. at 350. 5 The contractual provision herein further contemplates that retirement/separation incentive packages not be subject to arbitration This aspect of the proposal , affecting the scope of arbitration , is also a mandatory subject of bargaining See United States Gypsum Ca, 94 NLRB 112 (1951). 6 American National Insurance, supra at 409; Tomco Communications, supra at 879 (holding that a zipper clause is nothing but a diluted form of waiver and so is governed by the same principles that apply to a manage- ment functions clause) 628 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The retirement/separation incentives proposal here would allow the employer to deal directly with unit employees in the area of retirement/- separation incentives, hence involving a waiver of statutory rights in a narrow area .? The clause gives Respondent the right only to offer retirement or separation incentives . They cannot be forced on employees. The Respondent bargained to impasse on the retirement/separation incentives provision. Nothing in the record, however, reveals that the Respondent's total bargaining posture indicated a desire to avoid reaching an agreement. Under these circumstances, we conclude that the Respondent did not bargain in violation of Section 8(a)(5) and (1) of the Act by its insistence to impasse on the retirement/separation incentives provision or its overall course of conduct in negotiations with the Charging Party.8 T Indeed, the provision in question was included in the two most recent collective-bargaining agreements between the parties, and the parties reached agreement on all other subjects in the instant agreement Cf. Modern Mfg. Ca, 292 NLRB 10 (1988), finding that the respondent en- gaged in unlawful surface bargaining when , inter slut, it "repeatedly de- manded the right to act unilaterally on virtually every subject that the par- ties negotiated." (Emphasis added ) 8 Unilateral implementation of such a proposal may not be privileged. See Colorado-Ute Electric Assn., 295 NLRB No. 67 (June 15, 1989). Our dissenting colleague concedes, as he must, that "the clause here addresses a mandatory subject of bargaining ." Our dissenting colleague also acknowledges that the Respondent could lawfully insist to impasse on a retirement/separation incentives clause modeled on the management rights clause considered in American National Insurance, supra, that "con- templated initial unilaterial action by the employer." Our dissenting col- league concludes, however, that the clause before us is a permissive sub- ject of bargaining because it "involve[d] one-on-one negotiations with the employees with the door shut to union participation of any sort ." Thus, the dissent rests entirely on a purported distinction between clauses, such as the one in issue in American National Insurance, which "contemplate initial unilateral action by the employer " and are mandatory subjects of bargaining, and clauses, such as the one in issue here , which "substitute .. an individual negotiation process for the collective process contem plated by the Act" and are permissive subjects of bargaining We believe that our dissenting colleague offers a distinction without a difference. When an employer acts unilaterally with regard to a mandato- ry subject of bargaining, it is directly setting employees' terms and condi- tions of employment without any consultation with a labor organization. In such an instance, "the real injury . . is to the union 's status as bar- gaining representative." NLRB Y. C Bi C Plywood Corp., 385 U S 421 fn 15 (1967). Indeed, it is for these reasons that, in general, unilateral changes in mandatory subjects of bargaining are proscribed by Sec 8(a)(5) as a "refus[al] to bargain collectively ...... In other words, re- gardless of whether the employer engages in unilateral action or in direct dealing, the right that is infringed on is the same In fact, the terms are often used synonymously, as in Modern Mfg., supra, 292 NLRB 10, a case relied on by our dissenting colleague In view of the foregoing, we find it highly anomalous, to say the least, that our dissenting colleague would reach different outcomes in these kinds of cases depending on whether, in his view, the clause privileged initial unilateral action or direct dealing. Finally, on the facts of this case, our dissenting colleague's distinction is devoid of meaning. Our dissenting colleague does not dispute that the Respondent can only offer retirement or separation incentives, they cannot be forced on employees . Therefore, the Respondent is simply not in a position to make a unilateral change with respect to this subject matter. Rather, the Respondent must secure the employees' consent, which can only be achieved through the process of negotiation CONCLUSION OF LAW The Respondent did not violate Section 8(a)(5) and (1) of the Act. ORDER The complaint is dismissed. CHAIRMAN STEPHENS, dissenting. I. As correctly framed by the parties themselves, the issue in this case is whether the contractual proposal that the Respondent-Employer insisted on to impasse settled a term or condition of employ- ment that could unduly undermine the representa- tive status of the Union. If the question is answered in the negative, the complaint, which alleges a per se violation of Section 8(a)(5), must be dismissed. If, however, the Respondent's proposal settled no term or condition of employment, or in any event, is deemed to undermine the representative status of the Union, then a violation must be found. My colleagues in the majority, applying the man- datory-permissive dichotomy of Borg-Warner,' find that the provisions would settle a term of employ- ment, involving retirement and severance benefits, and therefore as a mandatory subject of bargaining, entitles the Respondent to insist on it to impasse. Thus, the complaint is ordered dismissed. The ma- jority does acknowledge that the proposal would entail a "waiver" of the Union's right to bargaining in the sense of jointly participating in the negotia- tion of compensatory benefits. However, the ma- jority concludes that such a waiver is a "narrow" one, both in terms of subject matter and in the sense that the Employer can only offer but not "force," its proposed terms on individual employ- ees. Were we writing on a cleaner slate, circa 1950, my colleagues' reading of Section 8(a)(5), as ap- plied to the instant record, might have persuasive appeal.2 For there is no evidence that the Re- spondent unilaterally attempted to circumvent the Union and deal with the employees without its per- mission or knowledge. Moreover, the barren record before us does not show that the Respond- ent desired to avoid reaching a contract with the Union, or that it conducted its negotiations with a closed mind or otherwise in bad faith over the allo- cation of responsibility for determining early retirement/separation benefits. Indeed, the Union had twice previously agreed to the provisions now under review. However, I believe, that whatever i NLRB v. Borg-Warner Corp., 356 U.S. 342, 349 (1958) E See Cox & Dunlop, Regulation of Collective Bargaining by the Nation- al Labor Relations Board, 63 Harv . L. Rev 389, 403-404 ( 1950). TOLEDO BLADE CO. 629 latitude commentators thought the Board may have had at one time in finding , on a record such as this one, insufficient evidence of improper bargaining has long since been foreclosed by the Supreme Court's interpretation of the statute itself.3 In short, my colleagues inadequately come to grips with the pertinent decisions of the Court and gloss over the ones on which they do rely. II. The facts, as submitted by a sparse stipulation, are quite simple. In negotiations for a collective- bargaining agreement to succeed the expired 1979- 1982 agreement, the Respondent insisted that it would not sign a new agreement unless it con- tained the following clause: The Company shall have the right to offer other retirement and/or separation incentives in amounts, under terms and conditions, and for periods of time that the Company shall in its sole discretion deem appropriate, and the Union waives the right to raise a dispute or ar- bitrate with respect thereto. The parties further stipulated that such a clause (with an additional provision not here relevant) had been agreed to by the Union in two previous bargaining agreements (1976-1979 and 1979-1982) and that what the Respondent sought to achieve through the clause was not simply to determine such incentives on its own and unilaterally imple- ment them, but rather to "make retirement and/or separation incentive offers directly to individual employees" and to exclude the Union from any participation in "discussions" between the Re- spondent and the individuals concerning their "ac- ceptance, rejection, or changes" in the offers. The purpose of obtaining this individualized ne- gotiating authority is rooted in the dynamic changes that have taken place in the newspaper in- dustry.4 Rapid technological innovations, brought on by the computer, had rendered many jobs, such as those in the typical composing room, redundant and obsolete. To overcome the natural resistance of the organized sector to the adoption of these labor- saving developments, the industry agreed, through collective bargaining, to pay a "very high" price, which as explained by an amicus during oral argu- s See Fibreboard Corp. v. NLRB, 379 U S. 203, 217, 219 fn. 2 (1964) (Stewart, Douglas, and Harlan, J.J., concurring) ("There was a time when one might have taken the view that the National Labor Relations Act gave the Board and the courts no power to determine the subjects about which the parties must bargain . . But too much law has been built upon a contrary assumption for this view any longer to prevail 4 See generally Tr oral argument at 115-118 (Mr. Charles Cole, Amer- ican Newspaper Publishers Assn , appearing as amicus in support of Re- spondent-Employer) ment, "came in the form of guaranteed lifetime jobs for employees whose services were no longer needed or would no longer [be] need[ed] in the future."5 However, because of the unexpectedly rapid pace of innovation , job redundancy proved even higher than expected and in turn the lifetime job guarantee evidently proved to be more expen- sive than estimated . Thus, the industry hit on the strategy of realizing cost savings by "buying out" the lifetime employment guarantees on an individ- ual basis. These buyouts took the form of so-called retirement or separation incentives.6 In the instant case, Toledo Blade obtained from the Union in two previous contracts the authority to negotiate such buyouts directly with employees without the Union's involvement. But during negotiations for a new contract in 1982 , the Union refused to renew this provision. As noted before, so far as we know, there is no evidence that the Respondent engaged in any bad-faith bargaining. III. No one disputes that matters pertaining to com- pensation, whether it be in the form of retirement benefits, lump-sum severance benefits, or payments for retraining fall within the meaning of "wages" in Section 8(d). As such, they are items over which an employer and a union are under a mandatory duty to bargain. In the vast majority of instances, a consummated agreement will specify the substan- tive standards, jointly arrived at during contract negotiations, that "will fix for the future the rules of the employment for everyone in the unit."7 5Id at 116. 6 The stipulation refers to the benefits as "other retirement and/or sep- aration incentives," but it contains no description of what these might entail. During oral argument , an amicus appearing in support of the Re- spondent stated that these incentives were "not unusual" for the newspa- per industry and variously took the form of (1) "early retirement," (2) "retraining of employees to perform another kind of work," and (3) "re- leasing employees with a nest-egg so they could pursue higher education or other careers for the balance of their productive years " Id at 118. The latter item would seem to be one -time lump-sum payment, whereas an early retirement benefit is usually a periodic payment of a determina- ble benefit paid over the life of the retiree For purposes of resolving the legal issue before us it makes no difference what form the incentive bene- fit takes, and for the sake of convenience are generally referred to throughout this opinion as buyout or retirement benefits. 7 Hughes Tool Co. v. NLRB, 147 F.2d 69, 72 (5th Cit. 1945). Retirement benefits are a good example of a subject that must be delin- eated in great detail in the collective -bargaining agreement, which gener- ally incorporates by reference pension plan documents . The latter are very technical, covering a broad range of subjects (including coverage, benefit levels, participation, vesting, fidicuiary obligations, and other mat- ters of administration) Congress added to the complexity, when it en- acted, in 1974, the Employer Retirement Income Security Act (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq ERISA establishes comprehensive, minimum standards for assuring that whatever benefits an employer promised during a worker's employment years would be paid during his retirement years. Pension plans customarily make provision for early retirement, and the benefit is generally calculated in accordance with a formula that takes into account such things as an employee's age, Continued 630 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD What takes place during the life of the contract is the application of the standards to the employees without substantial refinement or bargaining over the standards themselves. The buyout proposal here does not fit this mold. It contains no substan- tive formula by which to compute any of the forms of benefits contemplated by it. Neither the Union nor the unit employees would have any notion at the commencement of the contract term either what sort of buyout an employee might be expect- ed to receive or the value of it, should he decide to give up his lifetime job guarantee . For that matter, the Respondent might not have any idea either. Moreover, the proposal provided for the almost total exclusion of the Union from the negotiations that the Respondent might initiate with individual employees." In essence, the buyout payments would be at whatever amounts the employer could persuade the employees to accept in face-to-face, one-on-one meetings. Both the Respondent and the majority analogize the buyout proposal to the management rights clause, which the Supreme Court reviewed in NLRB v. American National Insurance Co., 343 U.S. 395 (1952). There the Board had attempted to declare as per se unlawful any employer insistence to include any such clauses in the collective-bar- gaining agreements. The Supreme Court flatly re- jected this hard-line position, finding it out of step with the prevalence of "management functions" clauses in many U.S. labor agreements, some of which had been endorsed by the War Labor Board. The Court curtly observed: Whether a contract should contain a clause fixing standards for such matters as work scheduling or should provide for more flexible treatment of such matters is an issue for deter- mination across the bargaining table, not by the Board. If the latter approach is agreed upon, the extent of union and management par- ticipation in the administration of such matters is itself a condition of employment to be settled by bargaining. Id. at 409 [emphasis added]. accrued service, salary, and a discount factor, the latter of which is used to compute what the actuarially reduced value of a normal retirement benefit will be at the time of early retirement . As one authority has noted, plans subject to collective bargaining will commonly provide for a specified percentage discount for each month by which early retirement precedes the normal retirement date . See generally D. McGill , Funda- mentals of Private Pensions at 117-120 (5th ed . 1984). "Respondent's counsel during oral argument conceded that under its proposal the employees could not insist on the presence of their union representative. However, he asserted that the Employer could always ter- minate discussions and the Employer "set no limits" on an employee's right to consult with the union representative . Tr. oral argument at 25. Still, the Union could not enlarge its role beyond that of sideline coach, because, according to the stipulation , the contract proposal required the Union to waive the right to raise a dispute or arbitrate with respect to any buyout offer. In the abstract, there is admittedly no great leap in the logic from the above-quoted rationale to the argument that the Respondent here is simply bar- gaining over the extent to which Union and man- agement will respectively participate in the settling of early retirement benefits, namely, no role for the Union and an exclusive role for management. However, in my view neither the holding nor facts of American National Insurance permit this logic to run the full course asserted here . The holding is limited to two propositions: (a) Not all management functions were per se beyond the bounds of what an employer could lawfully insist on , and (b) the employer could insist on the particular manage- ment functions clause at issue there-a clause pro- viding that certain subjects9 were within manage- ment's sole discretion to set initially and could be maintained if, through the grievance process (which excluded arbitration) the union failed to persuade it to change its mind about particular de- cisions taken pursuant to the clause. Id. at 398, 409. Equally significant , the clause did not contemplate direct negotiations between employer and employ- ees on the subjects included in the clause. Thus, the Court in American National Insurance had no occasion to reexamine, much less retreat, from the proscriptions against direct employer-employee dealing, which the Court itself had articulated in the earlier case of Medo Photo Supply Corp. v. NLRB, 321 U.S. 678 (1944). In Medo, which my majority colleagues do not discuss, the Court affirmed the principle that a em- ployer whose employees are represented by a labor organization has a duty to recognize and negotiate with that representative as to any changes in the employees' terms and conditions of employment, and further that it may not negotiate directly with the employees on such matters . Indeed, even if em- ployees seek such individual bargaining and are con- tent to exclude the union from the negotiations on the subject in question, the employer violates its statutory obligation by engaging in such negota- tions behind the union's back. 10 Bargaining on an individaul basis is simply "subversive of the mode These are hiring; promotion; discharging , demoting, or disciplining for cause; work scheduling 10 Of course, if a majority of the employees repudiated the union as their collective-bargaining representative for all purposes and such a re- pudiation may be honored under Board law (e.g., it is not a product of the employer's unfair labor practices and it did not take place during the initial certification year), the employer is free to deal directly with indi- viduals. The union in such a case is merely a former representative, and the employer has no obligation to deal with it on any subject . J. I. Case Ca Y. NLRB, 321 U.S. 332, 337 (1944). There is no contention in the present case that a majority of the employees had repudiated the Union. TOLEDO BLADE CO. 631 of collective bargaining which the statute has or- dained," the Court observed (Id. at 684).11 It is true that strictly speaking the issue in Medo Photo was not whether the employer had bargained in bad faith with the union in violation of the pre- cursor of Section 8(a)(5). Unlike here, the employ- er in fact had not attempted to secure from the union the right to deal directly with the unit em- ployees over any employment terms. Rather, the employer dealt with the employees without union knowledge or approval, which the Court found constituted an 8(a)(1) interference with the employ- ees' Section 7 rights. The proof of the interference was, of course, in the pudding , for as an immediate result of these negotiations the employees repudiat- ed the union as their bargaining representative.12 Thus, it is arguable that the holding of Medo Photo does not address the precise issue in the in- stant case in which there is no evidence that the Employer is attempting to jettison the Union by direct dealing with employees. But it is apparent that in deciding Borg-Warner Corp., supra, which - was decided after American National Insurance, supra, the Court incorporated the animating princi- ples of Medo Photo into the definition of good-faith bargaining under Section 8(a)(5). In Borg-Warner, the Court confronted the ques- tion whether an employer might violate Section 8(a)(5) simply by insisting on certain types of pro- posals as a condition to execution of the collective- bargaining agreement . Of relevance here was a ballot proposal requiring a secret vote among em- ployees on whether to accept or reject the employ- er's last offer, whether to strike, and whether the contract once adopted should be amended, modi- fied, or terminated. The Court characterized the clause as lawful if agreed to by both parties, but held that the employer could not lawfully insist to impasse. It noted that the ballot clause did not reg- ulate the employer-employee relationship on any particular condition of employment but rather dealt r i The Court cited , inter alia, its decision in Order of Railroad Telegra- phers Y. Railway Express Agency , 321 U.S. 342 (1943), a Railway Labor Act case handed down the same term, in which it had noted that the terms granted to individuals may be of interest to the entire unit and that thus a union must be free to bargain over "exception[s]" to the rules as well as over the rules generally applicable to all. Id. at 347. The Court in Railroad Telegraphers did also note that it "may be agreed that particular situations may be reserved for individual contracting" but this appears in context to refer to an "agreement" arrived at through collective bargain- ing "that the Company should be free to negotiate with the agents [i.e., employees] severally " Ibid. The Respondent has seized on a similar state- ment in J. I. Case, supra, to justify its conduct here. But the Court's ob- servation in that case that "it is possible for the collective bargain to pre- scribe only minimum rates or maximum hours or expressly to leave cer- tain areas open to individual bargaining" (321 U.S at 338 , emphasis added), also appears to contemplate mutual agreement, not necessarily unilateral insistence. 12 The Court did sustain a refusal-to-bargain violation under Sec. 8(a)(5), but it was grounded on the employer's refusal to recognize the union following the employees' induced repudiation of the latter. with the relations between the employees and their union. In the latter regard, the Court, citing Medo Photo, found that the proposal weakened the inde- pendence of the union by enabling the employer "in effect, to deal with its employees rather than their statutory representative." 13 In my view, the retirement incentive clause on the instant case suffers from some of the same infir- mity as the strike-ballot clause in Borg-Warner. To be sure, the clause here addresses a mandatory sub- ject of bargaining.14 However, the clause does not simply reserve to the Respondent the unilateral dis- cretion to devise an individually tailored package of benefits that is payable to an employee who is eligible for retirement. Rather it would shove the Union aside and establish a regime of direct negoti- ation one-on-one with employees themselves.15 In two respects, the Union's ability to exercise its re- sponsibilities as exclusive bargaining reprsentative would be undercut. First, an eligible employee would be deprived of the benefit of the Union's ne- 's 356 U.S. at 350 In response to the employer's argument that the secret ballot clause was merely a less restrictive variation of a no -strike clause, which is concededly a mandatory subject of bargaining, the Board opinion in Borg- Warner contains the following explanation: the strike-ballot clause here, while incidentally limiting the indi- vidual's right to strike, is primarily concerned with the mechanics of testing the statutory representative's power to call a strike or to ter- minate or amend the contract during its term-a purely internal matter unrelated to any condition of employment . Indeed, the strike- ballot clause is in essence a procedure designed to force all employ- ees in the unit, as individuals, to pass upon the Respondent's last offer. In our opinion, the requirement that employees be given an opportunity to vote on the Respondent 's last offer or to terminate or amend the contract, is simply an attempt to resolve economic differ- ences at the bargaining table between an employer and the statutory agent by dealing with the employees as individuals . In principle, there is little, if any, difference between an employer taking individual propos- als directly to the employees and an employer requiring that the bargain- ing representative obtain approval or disapproval of any economic propos- al as a condition precedent to the representative's exercise of statutory powers Either situation is in derogation of the status of the statutory representative and thus violates the exclusive representation concept embodied in the Act Indeed , insistence on a strike ballot clause means only that the union must dilute its authority , diffuse its re- sponsibility, and ultimately dissipate its strength . . It is thus ap- parent that . . . we do not predicate our conclusion on the theory that the continued representative status of the Union might be lost by a majority vote on any issue balloted upon , but rather on the fact that the requirement of a poll among the employees consitutes [sic] a subversion of the collective bargaining process. Borg- Warner Corp., 113 NLRB 1288, 1295 (1955) (emphasis in original de- leted and other emphasis added). It is noteworthy that four justices in Borg- Warner believed that the Court's holding was incompatabile with American National Insurance, supra, thus suggesting that there may well be some tension between the two decisions. 14 Fn. 7, supra See also Baltimore News American, 230 NLRB 216, 217-218 (1977), enfd. 590 F.2d 554, 556 (4th Cir. 1979). is See Modern Mfg. Ca , 292 NLRB 10 (1988). In the course of uphold- ing a finding of unlawful surface bargaining by an employer, the Board stressed that the employer's "insistence that it retain the ability to deal directly with unit employees [through a proposal to enter into individual contracts without the union 's prior approval and a subsequent proposal to give out bonuses or create an incentive program] strikes at the very heart of the Union's representative function to bargain collectively on behalf of the unit employees " 632 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD gotiating clout and its expertise in evaluating the merits and advisability of a retirement offer. In short, the Union would not be able to shield em- ployees from any overreaching leverage by the Employer. Second, the Union could not effectively monitor the incentive program from the standpoint of its impact on the pool of financial resources available to the unit as a whole. 1 6 Notwithstanding these perils to the bargaining process, the Act does not foreclose the Union itself from voluntarily exposing itself to them. This may seem like a curious feature of the Act. But as the Board repeatedly has emphasized , the Act is an ac- commodation of many competing considerations. Just as the process is worthy of protection, so is the freedom of the employee's exclusive representa- tive to obtain terms and conditions that in its view best satisfy the economic goals and aspirations of the employees. Thus a union is entitled to decide for itself whether the financial incentives that the employer is willing to make to induce agreement on a provision is worth accepting certain con- straints on the union's bargaining role. Moreover, it may be part of the customs and practices of a par- ticular industry that employers will negotiate di- rectly with certain classifications of workers on certain aspects of employment, the publishing in- dustry having a long history of this.'' Thus, it would plainly not be unlawful for the Union here to agree to the incentive program , as it had in two previous contracts. But the Union nevertheless re- tains the right to reevaluate the situation and to reassert its prerogatives in bargaining for a new contract, as it has done here. At the same time, I do not view the Respondent here as having its hands tied in the face of the Union's fixed opposition to its proposal . It is not barred from presenting at the bargaining table retirement/separation incentives in a management functions clause modeled on the one considered in American National Insurance, supra.' 8 As noted 16 Cf. Wood v. National Basketball Assn., 809 F.2d 954, 961 (2d Cir. 1987) (Winter, J.) ("recognition of a right to individual bargaining with- out the consent of the exclusive representative would undermine the status and effectiveness of the exclusive representative , and result in indi- vidual contracts that reduce the amount of wages or other benefits avail- able for other workers.") 17 See Cox & Dunlop, Regulations of Collective Bargaining by the Na- tional Labor Relations Board, 63 Harv. L Rev 389, 409-410 & fn. 71 (1950). ib In suggesting this alternative , I am assuming that even under the unique circumstances of this case , involving lifetime employment guaran- tees, which employees obtained under the two previous contracts, that the Union could still be required to negotiate modifications in those pro- visions insofar as they affect current employees in the unit . The parties would have the discretion to decide on a clause "fixing standards" by which the lifetime guarantee provisions are modified to require early re- tirement or a clause that provides "for more flexible treatment ," involv- ing the "extent of union and management participation in the administra- tion" of the modifications See American National Insurance, 343 U S. at 409, quoted in pertinent part in text infra. The provision at issue in the above, that clause contemplated initial unilateral action by the employer, but it did not involve one- on-one negotiations with the employees with the door shut to union participation of any sort.' 9 In sum, I disagree with my colleagues that the "specific subject" of the clause at issue here was simply retirement incentives. Rather the essence of the proposal was the substitution of an individual negotiating process for the collective process con- templated in the Act. 20 I similarly disagree with instant case is most analogous to "flexible " approach embodied in the management rights clause in American National Insurance. I do not view this case as analogous to the situation in which an em- ployer wants to obtain a modification of retirement benefits, which have already vested in particular individuals who have retired from the work force. Cf. Wei mer v. Kurz-Kasch, Inc., 773 F.2d 669, 672-673 (6th Cir. 1985) ("A union may choose to forego nonvested retiree benefits in future negotiations in favor of more compensation for active employes. The union may not, however, 'bargain away retiree benefits which have already vested in particular individuals,"' quoting Allied Chemical & Alkali Workers Y. Pittsburgh Plate Glass, 404 U.S. 157, 181 fn. 20 (1971)). 19 Cf. Long Lake Lumber Co., 182 NLRB 435 (1970), affd. sub nom. Woodworkers Local 3-10 Y. NLRB, 458 F.2d 852 (D.C. Cir. 1972), in which the Board rejected allegations of bad-faith bargaining by an em- ployer who had proposed a broad management rights clause . The Board upheld the clause even though it related to matters on which the contract was left silent, reasoning that the proposal would not have precluded future bargaining . The management au- thority Respondent demanded was only to take initial action without consulting the Union in advance . Once such action was taken, the Union would have the right, and Respondent the correlative obliga- tion, to subject the action taken to post hoc review under the griev- ance procedures where the Union would be afforded the opportunity through give and take discussions to obtain a change in manage- ment's action. 20 My colleagues suggest that my dissent articulates a "distinction without a difference" (leading to an anomalous result) between an em- ployer unilaterally changing a term or condition of employment without prior union consultation (unlawful under NLRB v. C & C Plywood Corp., 385 U.S. 421, 429 fn. 15 (1967)) and an employer dealing directly with employees under the clause at issue here (which I supposedly would find unlawful). With all respect, my colleagues misstate both the distinction I make and the conduct that I would find unlawful The principle articulated in C & C Plywood is wholly irrelevant here; we are not confronted with an employer actually implementing unilaterally, without union approval, a substantive change in an existing contract . Nor do I posit that an employ- er cannot have the benefit of a clause, agreeable to the union, that per- mits direct dealing with employees . Indeed, I suggest just the opposite. The critical distinction that I advance hinges on the type of provision that an employer can insist on to impasse (absent evidence of bad faith)- on the one hand, a clause modeled after the one in American National Insurance by which the employer could unilaterally effectuate the retire- ment of an employee, with the union having the opportunity afterwards to grieve over the terms of retirement, including the manner of retire- ment and amount of the annuity, and on the other hand , a clause (like the instant case) that contemplates direct negotiation with employees over the terms and conditions of retirement, without any meaningful participa- tion by the bargaining representative over such terms, either during the negotiation of the contract itself or during the life of the contract That the former may be lawfully insisted on to impasse and the latter cannot is a legally cognizable difference, as the Supreme Court's opinions in Ameri- can National Insurance and Borg- Warner make clear, and such distinction creates no anomaly. My colleagues also reiterate their point that the clause here is saved by the fact that the employer can only "offer" retirement benefits to the in- dividual employees and that it still must achieve agreement through the "process of negotiation." To hold that the mere offer of terms directly to employees does not unlawfully bypass the union simply ignores the set- tled law Charles Parker Ca, 285 NLRB 56 (1987) (employer violated Sec 8(aX5) by presenting written contract proposal directly to employ- ees). TOLEDO BLADE CO. 633 the majority's implication that the absence of evi- nonmandatory subjects of bargaining by virtue of dence as to the Employer's intent to avoid reach- the fact that they seek to compel a union's accept- ing an agreement is dispositive of this case. As ance of its displacement as bargaining representa- Borg-Warner indicates, the absence of bad faith tive. Accordingly, I dissent from the dismissal of does not legitimate insistence on proposals that are the complaint.