General Electric Co.

844 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD General Electric Company and United Electrical, Radio and Machine Workers of America, Local 618 (UE). Case 6-CA-19774 September 29, 1990 DECISION AND ORDER BY MEMBERS CRACRAFT , HIGGINS, AND DEVANEY On December 7, 1988 , Administrative Law Judge John H. West issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed an exception and supporting memorandum. The Charging Party filed a cross-exception, joining in the General Counsel's exception . The General Counsel and Charging Party also filed briefs in opposition to the Respondent's exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions' and to adopt the recommended Order as modified. The judge found, and we agree, that the Union did not waive its right to bargain over General Electric's subcontracting of bargaining unit work. In so concluding, however, the judge states that there must be an express mention in the agreement of an intention by the Union to waive bargaining on the decision to subcontract in order to have a clear and unmistakable contractual waiver of that statutory right. We find this to be an overstatement of the importance of express contract terms in es- tablishing a waiver, for a waiver may also be found when the contract language is not so specific but the history of prior contract negotiations demon- strates that the subject was discussed and con- sciously yielded.2 The judge did consider and reject General Electric's claim that the parties' bar- gaining history revealed such a waiver. We have examined those provisions urged by General Electric to constitute a waiver of the I The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties z Columbus Electric Co , 270 NLRB 686 (1984) (evidence of intent to waive a right is gleaned from examination of all the surrounding circum- stances including but not limited to bargaining history , the actual con- tract language, and the completeness of the collective-bargaining agree- ment) See also Rockwell International Corp, 260 NLRB 1346 ( 1982) (in which an employer relies on a purported waiver to establish its freedom unilaterally to change terms and conditions of employment not contained in the contract, the matter at issue must have been fully discussed and consciously explored during negotiations and the union must have con- sciously yielded or clearly and unmistakably waived its interest in the matter). Union's decision bargaining rights, including, inter alia, the management-rights clause and the zipper clause, and, like the judge, find no language suffi- cient to establish a clear and unmistakable waiver of the Union's right to bargain over the subcon- tracting of on-site work. Nor, in agreement with the judge, do we find evidence that the Union con- sciously relinquished its statutory right to such de- cision bargaining at the bargaining table.3 The General Counsel and Charging Party have excepted to the judge's failure to include language in his notice to employees making clear that the re- quired restoration of the status quo ante applies to all affected bargaining unit employees and not solely to the mailroom and photolab employees. As noted by the General Counsel , the judge indicated in his recommended remedy that the Respondent is required to restore the status quo ante by abrograt- ing its involved subcontracts , offering to restore its employees to the positions they held before its un- lawful action, and by making the employees whole for any loss of wages resulting from its unlawful conduct. The judge's recommended Order provides for such restoration for each of the "involved" em- ployees. The judge's recommended notice to em- ployees, however, appears to limit the required res- toration to the mailroom and photolab employees. We find merit to the General Counsel 's excep- tion, as the Respondent's subcontracting of the mailroom and photolab work caused a number of employees in addition to the eight mailroom and photolab employees to be adversely affected when mailroom and photolab employees exercised their rights to bump other bargaining unit employees, who then bumped still other employees farther a The Respondent asserts that it was the Union here that was unwilling to bargain and that the Union did not request bargaining, but that in any event it did fulfill its bargaining obligation and the parties were at im- passe. The evidence shows that the Respondent had made the decision to subcontract prior to notifying the Union of that decision , that it initially informed the Union that one contract had already been awarded , and that it has maintained throughout that it has the right to subcontract without decision bargaining under its national agreement with the Union Further, the Respondent refused to rescind its subcontracting decision in response to union demands that it do so even when the Union filed grievances re- garding the subcontracting decision prior to implementation Although the Respondent offered to reconsider its subcontracting decision after the Board issued a complaint in the case and after the subcontracting had been implemented , the Union properly took the position that it was unable to engage in effective decision bargaining at that time unless the Respondent restored the status quo ante by first returning its members to their presubcontracting positions The parties did engage in effects bar- gaining, but that bargaining does not fulfill the Respondent's obligation to bargain regarding the subcontracting decision Finally, the Respondent's claim that the Union's rigid opposition to the subcontracting and failure to affirmatively make concrete proposals regarding concessions constitut- ed a legitimate impasse has no merit in view of the fact that the Union here was clearly presented with a fait accompli. San Diego Van & Storage Co, 236 NLRB 701 (1978 ), cited by the Respondent , is inapposite be- cause there the company notified the union of a contemplated change in its operations and offered to discuss the proposed change before any firm decisions had been made. 296 NLRB No. 106 GENERAL ELECTRIC CO. down the line . Although the affirmative provisions of the judge's recommended Order may be con- strued to include those additional employees, we shall clarify his Order by requiring that all employ- ees affected by the subcontracting be offered resto- ration to their former positions and made whole, and shall modify the notice to employees accord- ingly. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, General Electric Company, Erie, Penn- sylvania, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modi- fied. 1. Substitute the following for paragraph 2(b). "(b) Abrogate its subcontracts for the work of the mailroom and the photolab at Respondent's Erie, Pennsylvania facility and offer to restore all of its employees affected by that subcontracting to the positions that they held before its unlawful action." 2. Substitute the following for paragraph 2(c). "(c) Make each of the affected employees whole by providing them with backpay in the manner set forth in the remedy section of the administrative law judge's decision." 3. Substitute the attached notice for that of the administrative law judge. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to bargain collectively with United Electrical, Radio and Machine Workers of America, Local 618 (UE) about subcontracting the work of the mailroom and photolab at our Erie, Pennsylvania facility. 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 abrogate the involved subcontracts and offer those bargaining unit employees affected by that subcontracting reinstatement to the posi- tions that they held before our unlawful action and WE WILL make them whole, with interest, for any loss of wages or benefits they may have suffered as 845 a result of our failure to bargain over the decision to subcontract unit work. GENERAL ELECTRIC COMPANY Suzanne C. McGinnis, Esq. and Leone P. Paradise, Esq., for the General Counsel. Arthur E. Joyce, Esq. and Stacey M. Weinsheimen, Esq., of Fairfield, Connecticut, and John S. Reichner, Esq., of Erie, Pennsylvania, for the Respondent. Robin Alexander, Esq., of Pittsburgh, Pennsylvania, for the Charging Party. DECISION STATEMENT OF THE CASE JOHN H . WEST, Administrative Law Judge. This case was tried in Erie, Pennsylvania, on March 30 and 31, 1988. A charge was filed on January 20, 1987, by United Electrical Radio and Machine Workers of America, Local 618 (UE), an amended charge was filed November 20, 1987, and a complaint was issued on November 16, 1987, against General Electric Company (G.E.). The complaint alleges that Respondent violated Section 8(a)(1) and (5) of the National Labor Relations Act as amended (Act) by refusing to bargain with the Union by announcing its decision to subcontract on-site bargaining unit work in the mailroom and photolab at Respondent's Erie facility without prior notice to the Union and with- out having afforded the Union an opportunity to negoti- ate and bargain about this decision as the exclusive rep- resentative of the employees in the unit . Respondent denies violating the Act as alleged asserting as a defense that the 1985-1988 national agreement between Respond- ent and the Union includes a clear and unmistakable waiver of any statutory duty to bargain during the con- tract term over a decision and the effects of a decision to subcontract bargaining unit work. Upon the entire record, my observation of the wit- nesses, and after due consideration of the briefs filed by the General Counsel, the Respondent and the Charging Party, I make the following FINDINGS OF FACT 1. JURISDICTION Respondent is a Pennsylvania corporation engaged, inter alia, in the manufacture of locomotives at its place of business in Erie. The complaint alleges, the Respond- ent admits, and I rind that it is now 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, and the Union has been a labor organization within the meaning of Section 2(5) of the Act. 11. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts The parties stipulated that there is performed onsite, at Respondent's plant, at a minimum, approximately 10 hours of work a week that was formerly performed by 846 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD photolab employees who were at that time represented by Local 618; that some of this work is performed by people who are working in the mailroom; and that all of the mailroom work that was formerly done by hourly employees represented by UE is being done by an out- side contractor onsite. At Erie, G.E. manufactures locomotives, transit equip- ment, motorized wheels, drilling motors and heavy equipment. It employed approximately 6000 people in the transportation systems business at Erie in October 1986. Of this number about 200 were salaried employees represented by Local 618. When G.E. was at its peak in the late 1970s or early 1980s it had about 13,000 people employed at the Erie facility. About 1000 of this number were in Local 618. Ronald Flowers, who was president of Local 618 of the United Electrical Workers at the time, testified that on October 6, 1986, he attended a meeting in the union relations conference room at the General Electric site in Erie at about 3 p.m.; that others present were Dee Engle, the business agent, William Hodges, the chief plant steward, Howard Pollock, G.E.'s manager of union relations, Roger Eck, the senior negotiator and Bill Harvey, who is also a senior negotiator; that the meeting was called by Pollock to inform the union representa- tives that G.E. had made the decision to subcontract the photolab and mailroom work; that the union representa- tives indicated that they did not agree with the decision to subcontract and they wanted to know the reason for it; that the company officials indicated that they were trying to get their costs in line; that the Union requested the cost savings figures and G.E. agreed to provide them; that it was agreed that another meeting would be held to discuss the effects on the employees involved; that the Union demanded that the decision be rescinded but the Company indicated that the decision had been made and that was it; and that this was the first time that Local 618 had any information from G. E. regarding its decision to subcontract the mailroom and photolab work. In the G.E. News, General Counsel's Exhibit 4, dated October 6, 1986, it is indicated "In meetings today union officials were informed by the General Electric Compa- ny of its decision to subcontract mail, photographic, over-the-road trucking, and janitorial services at its Erie facility." Local 618 filed grievances on October 9, 1986, regard- ing the subcontracting of the photolab and mailroom work, General Counsel's Exhibits 5(a) and 5(b), respec- tively. The grievances demanded that G.E. stop the sub- contracting, keep all Local 618 members on their jobs, and make the individual members whole for all losses suffered.' ' G.C. Exhs 5(c), (d), and (e) refer to the second step of the grievance procedure All are dated October 13, 1986, and 5(d) states that "the com- pany [violated] Article I [of the involved collective-bargaining agreement , G C Exh 2] by unilaterally instituting mid-term contract modifications, without notification or written request for bargaining to permanently replace Union represented workers " And G C Exh. 5(e) contends that "the company . [violated] Article IV of the UE-GE Na- tional Agreement by announcing unilateral changes in wages, hours and working conditions of Union represented bargaining unit photographers Flowers testified that he attended a meeting in G.E.'s union relations conference room on October 10, 1986; that he, along with Engle, Hodges, Marilyn Bardo, and Mike Griffing represented the Union, and Pollock and Eck represented G.E.; that G.E. representatives indicat- ed that the approximate cost savings on the photolab was $50,000 and on the mailroom it was $34,000; that the G.E. representatives indicated that they were mistaken in indicating earlier that the contract had been let regarding the mailroom; that G.E. refused to provide a list of the bidders; that G.E. said that they were going to subcon- tract the work somewhere around November 10, 1986; that most of the meeting dealt with the effect of the sub- contracting on members; that the Union made another demand that the subcontracting be rescinded and G.E. representatives denied the demand indicating that G.E. had the right under the contract to do it; that with re- spect to benefits which would accrue to the effected em- ployees, Pollock said that under the plant closing article XXIII there are rate retention benefits that would apply but that is the only thing that would be available under the contract; and that Pollock told the union representa- tives that the employees could be discussed informally or the Union could go through the grievance procedure. Subsequently (apparently on October 16, 1986) another meeting was held with the same representatives of the Union present, and Pollock and Harvey represented G.E. Flowers testified that most of the meeting involved dis- cussions on placement of the people; and that Pollock wanted to know in what arena the people would be dis- cussed since the Union had filed grievances on this issue. On October 23, 1986, the union representatives met again with the same company representatives. Flowers testified that most of the meeting dealt with what was going to happen to the employees involved; and that Pollock indicated that the Company was looking at some bids. On October 28, 1986, another meeting between union and company representatives was held. Flowers testified that they finalized a lot of the discussions regarding cer- tain of the involved employees; that the union represent- atives asked about the subcontractors and the company representatives said that they did not know yet who the subcontractors were going to be; that as a result of the discussions one employee, Betty Szymecki, who had al- ready submitted her retirement papers, was allowed to withdraw them and remain an employee for a couple of weeks until G.E. gave her a lack of work notice which allowed her to collect unemployment; and that two other employees, Bud Seib and Mary Lou Maison, were al- lowed to work until the end of the year before they went out on lack of work notices. Shortly after it was informed of G.E.'s decision to sub- contract, the Union forwarded the following undated letter to the Company, General Counsel's Exhibit 6(a): and mailroom clerks prior to and without bargaining in good faith with UE Local 618 . We demand this be done immediately and those adversely affected be made whole for all losses suffered " GENERAL ELECTRIC CO. Dear Mr. Pollock: As you and your colleagues are aware , UE Local 618, as the collective bargaining representative of the non-exempt salaried workers at the Erie facility, has for some time expressed concern about Compa- ny decisions to subcontract work which is capable of being performed by members of the bargaining unit. Our opposition to subcontracting in general, and in particular to that which has an adverse impact upon the wages, hours and working condi- tions of bargaining unit employees, is well known to yourself and to other management representatives. We are therefore deeply concerned with the de- cision of the Company, announced to us without any warning on Monday, October 6, 1986, to use subcontractors to perform any and all photo lab and mail room work . We believe this decision represents a new and dangerous attack on the job security of our bargaining unit members . So far as we are aware, the Company has never until now engaged in the wholesale and permanent elimination of bar- gaining unit classifications in this fashion . We find it particularly insidious that the work in question will continue to be performed at the Erie works on an ongoing basis by employees of other companies. Moreover, by your act of issuing public statements concerning this matter at or about the same time you first informed us of it, you have in effect pre- sented us with a fait accompli. We regard your ac- tions not only as wrong , but also as an act of bad faith. It is our view that this proposed action by the Company represents a violation of the 1985-1988 UE-GE National Agreement. Any substitution of contractors for bargaining unit employees in the way you intend would require in our view, the agreement of the Union. As you know, we are pur- suing this matter through the grievance procedure. In order to discharge properly our obligations to our members under the grievance procedure and also to gauge what the effects would be if we were to agree to the Company's scheme, we are request- ing the following information in writing: 1. When was the decision to subcontract the photo lab and the mail room work made and by whom? 2. What are the names and addresses of the pro- posed subcontractors? 3. What date does the Company intend to begin these subcontractual arrangements by? 4. What are the current average manhours per month calculated separately for photo lab and mail room work as performed by bargaining unit em- ployees, and what is the Company's estimated [sic] of these figures under the subcontractual arrange- ments? 5. What are the comparative costs of performing photo lab work with unit employees as opposed to using contractors? What are the comparative costs of the mail room clerk work? 6. What is the Company's best estimated [sic] of the overall effect of the implementation of this deci- 847 sion on bargaining unit employees? Please include estimates on the number of jobs eliminated, number of displacements resulting from the job eliminations, logs of earnings for those displaced, any changes in the prospects for reemployment of currently laid off employees with recall rights, and finally reemploy- ment prospect for those who would be laid off as a direct result of the proposed subcontracting. Furthermore, if any plans currently exist to re- place Bargaining Agent employees with outside contractors, we wish to be informed of such plans well in advance. In closing, we look forward to prompt receipt of the information we have requested. In the mean- time, we urge the Company to reconsider what we strongly believe is an ill-advised decision that is in violation of our Agreement, and that is not in the best interest of the employees we represent or of the Company. And the Company replied in the following letter, Gen- eral Counsel's Exhibit 6(b), dated October 30, 1986: Dear Mr. Flowers: This is in response to your letter of October 17, 1986 concerning various matters related to subcon- tracting. Your letter, in addition to requesting cer- tain information, made several claims that I feel need a response. First , you have claimed that we presented the UE with a fait accompli. I think the situation involving the truck drivers shows that not to be true. Secondly, you have asserted that the Company's proposed action represents a violation of the 1985- 1988 GE-UE National Agreement. As you know, the Company and the UE engaged in substantial discussions concerning job security in general, and subcontracting in particular, during the 1985 negoti- ations. Regulting from these discussions was a com- prehensive job and income security provision which provides certain benefits to employees who are di- rectly impacted by a Company decision to transfer or subcontract ongoing work . In spite of the efforts of the Union to restrict management's right to sub- contract bargaining unit work, there is absolutely no such restriction of that right. On the contrary, the Agreement provides for the giving of certain notice of management decisions to subcontract on- going production work, and provides certain bene- fits to employees adversely affected by such a sub- contracting decision . Nothing in the Agreement otherwise limits management in deciding how work is to be performed . Your failure in your letter to in- dicate any language in the Agreement which would be violated by subcontracting is an implied recogni- tion of the fact that the Agreement was not violat- ed. We feel that the subject of the effects on your members of a Company decision to subcontract to work have been fully and comprehensively covered by the Agreement. However, without waiving our position that we have no obligation to bargain with 848 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD you on this subject, we will provide you with infor- mation relevant to your gauging the effects of this subcontracting decision on your membership. In that regard, it does not appear that when and by whom the decision was made, and the identity of the proposed subcontractors are relevant to gauging those effects . If you think our conclusion is incor- rect, we would be glad to hear from you why you think the information is relevant . As far as the timing for implementing subcontracting arrange- ments, we have evaluated quotations from potential subcontractors and are in the process of awarding contracts. It is our belief that the current average man- hours per month for bargaining unit employees in the Mail Room is approximately 693 hours, and likewise for the bargaining unit employees in the Photo Lab. This calculation was based on an as- sumption of four persons in each unit working 40 hours each per week in a month consisting of 4.33 weeks. While we believe that the subcontractor for the Mail Room work will supply four people work- ing a comparable number of hours, we feel that comparisons strictly between the work currently performed by bargaining unit employees in the Mail Room and subcontractor employees would not nec- essarily lead to meaningful conclusions . In the first place, those comparisons would not take into ac- count the nature of all the duties that we anticipate the Mail Room subcontractor will assume and, in addition, the possible changes in the amount of man-hours that support the supervisory functions presently dedicate. The same also probably would hold true for the Photo Lab, although it is clear at the present time what number of man-hours a pro- posed subcontractor might dedicate to the perform- ance of the duties we would contract to have per- formed. I do not see what relevance comparative costs have to an assessment of the effects on members of the bargaining unit of a decision to subcontract. If you do see a basis for relevance, I would like to know what it is. In any event, it is not clear wheth- er your request encompasses the overall costs (such as, but not limited to, support functions and other items) of performing the work internally, or just the costs of compensation and benefits for the members of the bargaining unit . With respect to the latter, the compensation and benefits costs of the eight po- sitions we presently estimate will be directly im- pacted are approximately $235.512. If that is of help in assessing the effects of subcontracting on your membership. With respect to those eight positions which would be eliminated by subcontracting , we present- ly anticipate that six employees affected will be eli- gible to displace, two employees affected will not displace but will opt for certain benefits available pursuant to Article XXIII (based on our discus- sions). The six employees eligible to displace should be eligible for rate guarantees so the initial impact of subcontracting on their earnings should not be of any significance. It is clear that the displacement of employees as a result of a decision to subcontract may have an un- favorable impact on the reemployment prospects of those employees having recall rights who are cur- rently on layoff. With respect to overall reemploy- ment prospects for those eventually laid off as part of the displacement process, and those currently on layoff, that depends in large part on future business conditions and needs which, at the present time, do not appear to be encouraging for the near term. If you have any questions concerning the forego- ing, or would like any additional information, I would be glad to meet with you to discuss it. Flowers testified that the net effect to the Union was the loss of eight jobs; that the mailroom work, after the subcontracting, was still performed in the mailroom; that he had to give up his office as president of the Union be- cause he went back to the production and maintenance unit; that another employee, Maison, was chief steward in building 14 of G.E.'s Erie complex and when she went out on layoff her access to the members she served was only through the Company's union relations office; that when he requested the Company to negotiate with the Union over the decision to subcontract during the course of the above-described meetings , the Company's "position was that the decision was made. If you [the Union] want to talk about the people, we'll talk about the people, that's it"; that the Union did not make any proposals with regard to the subcontracting because the Company "told us the decision had been made and there was no-no negotiations in process to make a proposal"; that the above-described grievances "wound up being submitted to arbitration which the Company wouldn't agree to"; that the Union requested arbitration of these grievances but under the contract the Company is only required to arbitrate grievances dealing with discipline; that, as president of Local 618, he attended national ne- gotations in 1982 and 1985 between UE and G.E.; that subcontracting was an issue of discussion in the 1982 and 1985 negotiations; that the Union sought restrictions on subcontracting in both of these negotiations and it sought advance notification; that in the past G.E. announced a decision to subcontract vis-a-vis that it was considering subcontracting; that the Union did request to bargain about the decision to subcontract "[o]n at least a couple of occasions....' ; that he could not recall in any of the above-dedcribed meetings with officials of G.E. that the Union indicated that it would be willing to look at con- cessions if the Company were willing to discuss the sub- contracting decision ; and that Local 618 did not propose any concessions to G.E. after the subcontracting was an- nounced because "Pollock said the decision was cut and dried. They had made the decision . There would be no negotiations." Flowers sponsored General Counsel's Exhibits 7 and 8 which are the Union's handwritten notes of the meetings it had with G.E. on October 16 and 10, 1986, respective- ly. The former is erroneously dated 10-10-86. The notes GENERAL ELECTRIC CO. were taken by Bardo, who is the Union's secretary of stewards council. Walter Palmer, who works in G.E.'s graphic arts de- partment at its Erie facility and who at the time of the hearing was president of Local 618, testified that on De- cember 11, 1987, he attended a meeting at which Pollock handed him the following letter, General Counsel's Ex- hibit 9(a), which is dated December 11: As you know the NLRB has issued a complaint in Case 6-CA-19774 on allegations that the Compa- ny did not bargain with respect to the subcontract- ing of certain mailroom and photo unit work. This work was originally farmed out on 11 /17/86. The subcontracts in both cases allow the Company to cancel the contracts on 30 days notice. It is the Company's position that it has no obliga- tion to bargain with you with respect to subcon- tracting decisions. The National Agreement gives the Company the right to make unilateral subcon- tracting decisions. That was the result of the 1982 and 1985 negotiations . It is also the Company's posi- tion that you had the opportunity to discuss this matter in 1986. However, since the Union feels strongly about this subject and apparently feels that it did not have a full opportunity to bargain about the mailroom and photo unit subcontracting, I am indicating to you at this point in time that the Com- pany is willing, without waiving its position that it does not have any obligation to bargain on this issue, to reconsider the subcontracting and is willing to cancel the subcontracts and bring the work back to the facility provided the Union is willing to con- sider making proposals for wage rate reductions or any other realistic proposal that would meet the Company's cost objectives. To that end, I am en- closing information as to what it presently costs the Company to do this work on a subcontract basis. Attachment Photo Unit o Estimated 1987 costs (assuming work stayed in- house) - Total: $201,000 - Compensation and benefits for 4 people: $149,000 o Estimated 1987 costs for Contracted Services - Total: $48,000 - Portion of total for Contractor's labor: $33,600 o Estimated 1988 costs for Contracted Services - Same as 1987 since rates have not increased Mailroom o Estimated 1987 costs (assuming work stayed in- house) - Compensation and benefits for 4 people: $121,000 o Estimated 1987 costs for Contracted Services: $68,600 o Estimated 1988 costs for Contracted Services: $59,900 849 Notes: Costs attributable to administration and management supervision required if work remained in-house not included. By letter dated December 16, 1987, General Counsel's Exhibit 9(b), Palmer responded as follows: I am writing to you in response to your letter of December 11, 1987 regarding the complaint issued by the NLRB in case number 6-CA-19774. While we are certainly willing to engage in bar- gaining with you concerning the subcontracting of mail room and photo unit work subject to the pro- visions of the national agreement, we are not able to treat your letter as a genuine offer to begin good faith bargaining for the following reasons: 1. Your letter conditions bargaining on the Union's willingness to meet the Company's cost ob- jectives; 2. You continue to assert that the Company has no obligation to bargain; 3. After the complaint issued and within days of your letter the sinks in the photo unit were torn out; 4. The Company has not restored the status quo ante and members are still suffering from unemploy- ment and loss of back pay as a result of the Compa- ny's actions; and 5. You have been aware of the Union's "strong feelings" on this subject for over a year, suggesting that the Company is more interested in being able to assert that it has offered to bargain for purposes of the NLRB hearing that has been scheduled for January than in responding to the Union's concerns. As you well know, good faith bargaining requires give and take on both sides. To condition bargain- ing on the Union's willingness to make proposals that meet the estimated costs of the subcontractors already employed by the Company is merely offer- ing the Union the opportunity to "take it or leave it" and is itself a violation of § 8(a)(5). Moreover, to begin bargaining prior to restora- tion of the status quo ante would require the Union to bargain from an unequal position. While we certainly are prepared to negotiate if the Company manifests its intentions to bargain in good faith, we are unwilling to engage in discus- sions under the present circumstances. We would be pleased to discuss this matter fur- ther if the Company is prepared to restore the status quo ante and affirm that it is not insisting that its cost objective be met. To do less than this would allow the company to benefit from the unfair labor practices it has committed. If the Company is prepared to revise its stance as outlined above, please let me know. [Emphasis in original.] And by letter dated December 22, 1987, General Counsel's Exhibit 9(c), Pollock responded as follows: Dear Mr. Palmer: 850 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD I was disappointed to receive yesterday your letter (dated December 16) in response to mine of December 11. Because you cancelled our meeting on the 15th and asked for additional time to re- spond, I'd hope that your letter either would have indicated a willingness to sit down and discuss real- istic concessions that the Union would be willing to make in light of the Company's cost objectives, or would have itself contained some proposals. In- stead, what I got was a legalistic, formalistic reply. Apparently the Union is more interested in legal posturing than in good faith discussions. So there is no misunderstanding of what I think was perfectly clear from my letter, the Company was and is willing, without waiving its position on subcontracting decisions, to sit down and discuss with the Union any realistic proposals it has for bringing the work back into the facility . In that regard, my objective in providing you cost informa- tion in my December 11 letter was to enable you to consider the Company 's cost objectives in formulat- ing any response you deemed appropriate . It's un- fortunate that you've chosen to interpret my pro- viding that cost information and suggestion of its importance to us as some sort of precondition to consideration of any proposal , since that was never intended to be the case. In closing, I repeat once more that we are willing to meet with you and discuss any proposals you might have to return the work in question to the fa- cility. I would hope that your proposals would ad- dress our cost concerns in a realistic fashion. Given the tone and content of your letter, however, it ap- pears to me that you don't have now, and never had, any intention to bargain on this issue. By letter dated January 4, 1988, General Counsel's Ex- hibit 9(d), Palmer wrote to Pollock as follows: Dear Mr. Pollock: We take strong exception to both the tone and the substance of your December 22, 1987 letter. While you are now apparently prepared to concede that the Company may not condition bargaining on the Union's willingness to meet your cost objec- tives, it appears that you are still not prepared to re- store the status quo ante in order to get the stage for good faith bargaining. While this comes as no surprise given the Company's lack of good faith in this matter as set forth in our December 16, 1987 letter, we refuse to be party to such a charade. If and when you are prepared to restore the status quo ante and bargain in good faith please advise us ac- cordingly. And by letter dated February 3, 1988, General Coun- sel's Exhibit 9(e), Pollock wrote to Palmer; Dear Mr. Palmer: I've received your letter of January 4, 1988, which seems to me to be simply more legal postur- ing. In light of that letter and your admission during our meeting of December 22 that you had no inter- est in making any concessions whatsoever, it is clear to me that Local 618 continues to have no intention of bargaining in good faith over the issue of subcon- tracting in the mail room or the photo lab. Please understand that I can appreciate your position, as it is consistent with the UE's longstanding position that it will not ever make any concession that will reduce the benefits or wage rates of its members; however, your position and legal posturing indicate to me that any further discussion of this issue would not be fruitful.2 Palmer testified that the Company, to his knowledge, had never provided the Union with the information which is attached to General Counsel's Exhibit 9(c) before December 11, 1987; that at the December 11, 1987 meeting Pollock said that he figured "the job would be worth approximately six-twenty an hour" ; that the mailroom salary for unit members was approximately "ten dollars and some odd cents an hour"; that the higher rated unit jobs in the photo lab at that time were approximately $ 12 per hour; that sometime in December 1987, after the exchange of the above-described letters began, Pollock asked him to attend a hearing where Pol- lock said to him "apparently you have no intention of sitting down and . . . [making] any conclusion[s] whatso- ever over the subject"; that he told Pollock at this meet- ing I don't have the authority to institute a second-tier wage system in this plant; that should be a subject for national negotiations. If you want to put the mailroom and photo house back in order the way it was, I'll be glad to sit down and talk about any- thing; that the mailroom work performed is the same type of work that was performed in the mailroom before the mailroom work was subcontracted and the physical ap- pearance of the mailroom is the same as it was before the subcontracting in October 1986; and that he has seen an outside photographer being brought through his depart- ment with an escort taking pictures of people doing their daily work routines. Ronald Dalbec testified that he worked in the photo- lab at G.E.'s Erie facility for 24 years; that he now works in the reproduction and microfilm department of graphic arts at G.E.'s Erie facility ; that he works in the same building as the mailroom , which remained at the same location after the work was subcontracted; that some of the work now performed by people in the mail- room was formerly performed by photolab employees, viz, the pulling and filling of negatives for reprints; that now outside photographers come into the plant to photo- graph equipment , and special events, which work was formerly performed by bargaining unit employees who worked in the photolab; and that when he was removed 2 Palmer testified that he answered the letter indicating that he could not sit down and negotiate another subtler contract and "if we want to put things back together, fine, we'll sit down and talk " GENERAL ELECTRIC CO. from his photo job he received a rate guarantee pursuant to the national contract. Richard C. Barnes, who is a senior buyer at G.E.'s Erie facility, testified that he has been involved in sub- contracting for 8 years and subcontracting has been going on at G.E. for at least the 24 years that he has been there; that he has subcontracted , among other things, keypunching, which is also done by represented employees at the plant ; that he was involved in the sub- contracting of the mailroom and photolab work; that he supplied information to Jim Weigel , G.E.'s financial ad- ministrator, who drafted a project appropriation request for the photolab and the mailroom , Respondent's Exhib- its 8 and 11, respectively; that the project appropriation requests show an after tax cost savings of $52,000 and $26,000 for the photolab and mailroom , respectively; that contracts were let for both the photolab and the mail- room, see Respondent's Exhibits 9 and 12, respectively,3 and both the contracts and the renewals thereof contain clauses allowing the termination of the contract by either party with 30 days' written notice; that with respect to photography services, approximately 20 percent is onsite and 80 percent is offsite ; that he did not know whether available keypunchers of G.E. were already fully em- ployed when he subcontracted the keypunching work; that he was not aware of any grievance being filed over the keypunching work which was being subcontracted; and that he has subcontracted jobs in graphic arts, and he did not know the reason why the subcontracting was done. Pollock testified that in 1986 G .E. had only built about 200 locomotives and it had only 35 or 36 locomotives on order for the following year; that prior to July 1982 G.E. had work transfers and subcontracting and it noti- fied the Union of its decision and did not bargain about the decision; that in 1982 G.E. agreed to give 6 months' notice when it was going to transfer ongoing production work, see the 1982 National Agreement, Respondent's Exhibit 1; that G.E. did not bargain about decisions with respect to work transfers or subcontracting as a result of the 1982 or 1985 National Agreement ; that at a meeting with union representatives on October 6, 1986, he ad- vised that the mailroom work , involving four unit mem- bers, and the photolab work , involving four unit mem- bers, would be subcontracted;4 that he erroneously told the Union on October 6, 1986, that the mailroom con- tract had been let; that 3 days later he called another meeting with the Union and advised them of his errors;5 that at the October 10, 1986 meeting with the union rep- resentatives they discussed the effects of the subcontract- ing and the Union asked him to rescind the subcontract- ing;6 that the Union did not at the October 10, 1986 meeting offer to look at the situation in terms of conces- sions to meet G.E.'s cost objectives ; that another meeting was held with the union representatives on October 16, 5 Both are dated November 17, 1986. 4 Respondent's typed notes of the meeting were received as R Exh 13. 5 Respondent 's typed notes of the meeting were received as R Exh 14 6 Respondent 's typed notes of the meeting were received as R. Exh 15 851 1986,' at which he asked the Union which arena-the in- formal meetings or the grievances-they wanted to uti- lize; that another meeting was held with the union repre- sentatives on October 23, 1986,8 at which the effects of the subcontracting were discussed; that in his above-de- scribed October 30, 1986 letter to the Union he men- tioned the truckdrivers because G.E. and the drivers' representative were in the process of reaching an agree- ment which obviated the need to subcontract ; that he supplied Local 618 with what he thought was the perti- nent information and it did not indicate that the informa- tion was insufficient; that the Union did not ask to bar- gain about the decision to subcontract after his October 30, 1986 letter and before the contracts were let; that at no time prior to the letting of the contracts did the Union offer any concessions or indicate they were will- ing to offer concessions to meet the Company's cost ob- jectives; that while he did not tell the Union prior to the letting of the subcontracts that he would not bargain about the decision he did preclude bargaining after the subcontracts were let; that another meeting was held with union representatives on December 22, 1987, at which, Palmer indicated that he was not willing to make concessions, he did not have the power to negotiate and settle, and he was not interested in engaging in a dia- logue about concessions;9 that he never made a distinc- tion between offsite and onsite work with respect to noti- fication to the Union; that G.E. did not give 6 months' notice to Local 618 regarding the subcontracting of the mailroom or photolab work; that the concessions he ne- gotiated with Local 506 did not involve the drivers' hourly rate but rather dealt with when the drivers were on the clock and the fact that they would sleep in their trucks every other day; that while Union Business Agent Engel requested specifications for the bids that were put out by G.E. on the mailroom, he, Pollock, refused to provide them; that during the aforementioned October 1986 meetings he never solicited any proposals regarding wage reductions over the subcontracting of the mail- room and the photolab; that he has no idea what the hourly rate of the current mailroom employees is; that it was his position prior to 1982 that it was management's right to subcontract; and that G.E. did not give 6 months' notice because it did not involve ongoing pro- duction work as is specified in the agreement. Bernard Hanley, who is retired and formerly was the manager of national contract administration at G.E., tes- tified that prior to July 1982, G.E. announced its deci- sions to subcontract; that occasionally G.E. would notify the Union that it was considering subcontracting but G.E. did this without waiving its position that it had the right to make these decisions without bargaining; that G.E.'s position that it did not have to bargain about sub- contracting decisions "was based on the management rights clause, the zipper clause, in conjunction with the ° Respondent's typed notes of the meeting were received as R Exh 16 8 Respondent's typed notes of the meeting were received as R. Exh. 17. 9 Respondent's typed notes of the meeting were received as R Exh 21 852 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD discussions that were held during negotiations on sub- contracting and the 1970 letter agreement," Respondent's Exhibit 7;10 that he participated in the 1982 UE national negotiations which were coordinated bargaining sessions involving the UE and the International Union of Elec- tronic, Electrical, Salaried, Machine and Furniture Workers of America (IUE); that he was a member of G.E.'s bargaining team at the UE table and he sat on the contract language subcommittee during the 1982 negotia- tions; that job security was discussed at the 1982 negotia- tions and subcontracting came up in that the Union "wanted limitations on the company 's ability to make these decisions .... [it] sought benefits to ameliorate the effects of the decision .... [a]nd ... [it] sought ad- vance notice so that . .. [it] could input into the deci- 10 The management-rights clause in the 1985-1988 National Agree- ment, G C Exh 2, reads as follows. Article XXIX Management Authority The Union and the Locals recognize that subject only to the ex- press provisions of this Agreement, the supervision , management and control of the Company's business, operations and plants are exclu- sively the function of the Company The "zipper" clause in the same agreement reads as follows. Article XXX Issues of General Application This Agreement, the 1985 Settlement Agreement , the 1985 Wage Agreement, the 1985 Pension and Insurance Agreement , the 1985 Savings and Security Program Agreement and the 1985 Apparatus Service Shops Agreement between the parties are intended to be and Shall be in full Settlement of all issues which were the subject of col- lective bargaining between the parties in national level collective bargaining negotiations in 1985 In the absence of mutual agreement, none of such issues may be reopened or otherwise made the subject of collective bargaining, strike, or lockout during the term of this Agreement , as set out in Article XXXIII, except in conjunction with a proposal for modification of this Agreement under the provisions of Article XXX II And the January 27, 1970 letter agreement signed by E W Bickford for G.E. (and hence sometimes referred to as the Bickford letter) reads as follows This letter is intended to get out our mutual interpretation of the intent and application of Section 2 of Article XVIII of the GE-UE National Agreement with respect to the transfer of jobs from any UE location In that connection Section 2 means that in any cases where the Company informs the union that certain work and/or jobs will be transferred away from any GE-UE location, the Company will with- hold the effectuation of such transfer until any grievance directly af- fecting the work or jobs to be transferred which was actually pend- ing at the time of Company notification , or instituted within three (3) days after such notification , shall have been processed through the grievance procedure. It is mutually agreed that any such grievance shall be the subject of expeditious treatment in the grievance procedure, as follows. an appeal of the grievance from any step of the grievance procedure to the next step must be accomplished within one week after the Com- pany's answer shall have been given at the lower step and the griev- ance meeting at each successively higher step mugt be held within one week after the appeal is received or such longer time as maybe mutuall agreed upon. In addition , in any case in which the parties agree to arbitrate any such grievance, the Company will, but only if the parties mutually agree, withhold transfer of the affected work or jobs until the arbi- trate decision shall have been received. The provisions of this letter of understanding will not affect the Union's rights under Section I of the Article XVIII If the Union agrees to the foregoing, please so indicate by signing in the space indicated below Hanley testified that the management-rights and "zipper" clauses in sub- stance have remained unchanged at least since 1970 sion-making process";" that the subject of subcontract- ing was specifically addressed in the 1982-1985 National Agreement, Respondent's Exhibit 2, in the work transfer definition and income security article; t 2 that the subject of advanced notice of G.E.'s decision of the implementa- tion of a decision to subcontract appears in a separate letter agreement dated June 27, 1982, Respondent's Ex- hibit 1 ;' 3 that in the case of work transfer the work must II Portions of Respondent's typed notes of the GE-UE National nego- tiations in May and June 1982 which were sponsored by this witness were received as R Exhs 25-29 12 The article, which is located on p 64-65 of the agreement, reads, as here pertinent, as follows. Article XXIII Job and Income Security 1. Definitions (a) The terms "plant closing " and "to close a plant" mean the an- nouncement and carrying out of a plan to terminate and discontinue either all Company operations at any plant , service shop or other fa- cility or those Company operations which would result in the termi- nation of all employees represented by the Union at that location when those employees do not have displacements rights Such terms do not refer to the termination and discontinuance of only part of the Company's operations at any plant , service shop or other facility (except as specifically provided in the paragraph above) nor do the termination or discontinuance of all of its former operations coupled with the announced intention to commence there either larger or smaller other operations Any employees released by such latter changes will be considered as out for lack of work and will be subject to provisions applicable to those on layoff Also, such terms do not refer to the transfer or sale of such oper- ations to a successor employer who offers continued employment to Company employees Company employees who are not offered con- tinued employment by the Company or by successor employer will be considered as out for lack of work and will be subject to provi- sions applicable to those on layoff. (b) The term "plant closing date" means the day when benefits for the terminations of represented employees begin because of a plant closing (c) The terms "transfer of work," "to transfer work," and "work transfer" mean the discontinuance of ongoing production work at one location coupled with the assignment of the same work to a dif- ferent location, including subcontracting the same work to another employer, if such assignment of work would directly cause a de- crease in the number of represented employees performing such work at the first location a The separate letter agreement reads as follows This letter sets forth the agreement of the Company and the Union with regard to Company notice to the Union concerning plant clos- ing, work transfer and installation of robots or automated manufac- turing machines during the term of the 1982-1985 GE-UE National Agreement With respect to a plant closing, the Company will give notice of its decision to close a plant a minimum of six (6) months in advance of the plant closing date to the Union, the Local involved and to employees concerned . Such notice will include identification of the plant to be closed , the Local involved and the date when termina- tions of represented employees because of the plant closing are ex- pected to begin. With respect to a transfer of work, the Company will give notice of its decision to transfer work a minimum of six (6) months in ad- vance of the effective date of the work transfer to the Local in- volved Such notice will include identification of the work to be transferred and the anticipated date of the transfer of work With respect to the installation of robots or automated manufac- turing machines, the Company will give a minimum if sixty (60) days notice to the Local involved before the use of a robot or an automat- ed manufacturing machine for production in a work area Such notice will include a description of the function of the device, the expected decrease in the number of represented employees as a direct consequence of the use of the device and the anticipated date of the use of the device for production Continued GENERAL ELECTRIC CO. be transferred from the plant facility but not in the case of subcontracting ; that this distinction was made clear in the guidelines that G.E. put out, on rate guarantee, Re- spondent's Exhibit 30; that the primary purpose of the Advance Notification and Rate Guarantee Guidelines was as a guide and instructions to operating management but they were given to the Union; that the above-de- scribed 1970 letter agreement is attached as an appendix to the original 1982 National Agreement ; that after the 1982 National Agreement G.E. gave the Union notice of its decision to transfer work or subcontract and it did not give notice of the Company's consideration; that subcon- tracting decisions where work was done on the premises were not treated any differently than where work was done offsite; that the 1985 negotiations were a coordinat- ed bargaining situation and he was a member of G.E.'s contract language subcommittee; that during the 1985 ne- gotiations the Union "wanted to put restrictions on sub- contracting, primarily whereever the subcontracting would affect someone on layoff. They also wanted to extend the rate guarantee to employees who were doing other-than-ongoing production work, and they wanted advance notice"; 14 that as a result of the 1985 negotia- tions G.E. (1) modified the definition of work transfer to eliminate the ongoing production work requirements which, in effect, gave employees who are not on ongo- ing production work rate guarantee , (2) modified the ad- vance notice letter to include the restriction on ongoing production work so employees received the benefit but not notice, (3) increased the rate guarantee from 26 weeks to 39 weeks, and (4) included other related bene- fits such as special early retirement bonus, special contin- ued severance pay and special placement procedures; that the above-described 1970 letter agreement is still in effect under the 1985 National Agreement; that subcon- tracting the work to be done onsite is more common than subcontracting the work done offsite and most of the maintenance and janitorial type of work is onsite; 15 that the above-described rate guarantee guidelines were promulgated and issued unilaterally by G.E. with no dis- cussion with UE; that he participated in the "big" table discussion between G.E. and UE; that G.E. does not make any proposals at the "big " table; that he was not present for the actual negotiations, which were conduct- ed at the small table in either 1982 or 1985; and that during the 1982 negotiations when the subject of ad- vance notice was raised by the Union it was always in the context of the Union wanting the notice in order to have input into company decisions. Dennis Rocheleau, who works as a consultant in union relations at G.E.'s corporate headquarters in Fairfield, Connecticut, testified that he was a member of G.E.'s "small" table bargaining team at the negotiations for the If this letter is consistent with your understanding of our agree- ment concerning the obligation of the Company to give notice to the Union on these subjects, please so indicate by signing on behalf of the Union in the space provided below 14 Portions of Respondent's typed notes of the GE-UE National nego- tiations in May and June 1985 sponsored by this witness were received as R Exhs 32-39 is Hanley testified that, of the hundreds of grievances submitted at the third level from the beginning of 1986 to the end of 1987, 15 involved subcontracting of work with 10 involving work done offsite 853 National Agreement in 1982; that, with respect to sub- contracting, the Unions, at the 1982 negotiations, wanted (1) to place restrictions on the Company's right to sub- contract, (2) advance notice of G.E.'s intention to sub- contract and to have input into that decision, and (3) to improve the benefits that would be applicable to people affected by those decisions; 1 a that during the 1985 nego- tiations on the national agreement, extending the benefits of rate guarantee to employees effected by work transfer and subcontracting where the work was not ongoing production work were topics of discussion;' 7 that in 1985 (1) the requirement that ongoing production work be involved in order to qualify for rate guarantee in a subcontracting situation was eliminated, (2) the rate guar- antee was expanded from 26 to 39 weeks, (3) special re- tirement bonus, special continued termination pay and special displacement procedures were provided , and (4) the words "production work" were inserted into the no- tification letter in order to limit it; and that after 1982 G.E. gave the Union notice of G.E.'s decision to subcon- tract. On rebuttal, Boris Block, who is retired and who was the general secretary-treasurer of UE from 1975 to No- vember 1985, testified that he was involved in negotia- tions with G.E., as here pertinent, in 1982 and 1985; that there are 12 or 13 other unions which participate in the coordinated bargaining committee in negotiations with G.E.; that G.E. does not make any offers at the "big" table or preliminary discussions; that commitments or agreements are reached at the "small" table meetings; that in 1982 he sat at the "big" table and then at the "small" table; that the UE was concerned about job se- curity going into the 1982 negotiations;' 8 that every fact of job security, including subcontracting , was discussed at the 1982 negotiations; that the major causes of the Union's loss of jobs in 1982 were plant closings, plant movement, technological improvements , and cutbacks; that subcontracting was not a major cause of loss of jobs in 1982; that advance notice was a big issue during the 1982 negotiations; that the Union told G.E. during the 1982 negotiations that it wanted the advance notice from G.E. so as to have the opportunity to get into discussions and try to change what G.E. was planning to do; that G.E. agreed to give the 6 months' notice and "there were no conditions ... [t]here was nothing about waiv- ers, or giving anything in return for it ...."; that at no time at any collective-bargaining session he attended with G.E. has there been any discussion about the Union waiving its right to bargain over subcontracting deci- sions; that G.E. did not make any proposals to limit the Union's right to bargain over subcontracting during the 1982 or 1985 negotiations; that G.E. did not propose any modification of the management-rights clause or the issue 16 Portions of Respondent's typed notes of the small table meetings at the national agreement in June 1982 were received in evidence as R. Exhs 40-47. 17 Portions of Respondent 's typed notes of the small table meeting on June 19, 1985, were received as R. Exh 48 General Counsel introduced other portions of Respondent's notes at the aforementioned 1982 and 1985 negotiating sessions is Prior to going into negotiations the Union sought information from G E. regarding, inter alia, job security G.C. Exh 10 854 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD of general application clause during the 1982 or 1985 ne- gotiations; that in the 1982 negotiations the Union sought to "[b]an all subcontracting while employees are on layoff, or where subcontracting would result in layoff, furlough or short hours for employees ," Respondent's Exhibit 49; and that while G.E. took the position during 1983 discussions regarding the work transfer from Hudson Falls to Mexico that the UE had waived its rights the Union responded We-no way did we ever agree to any waiver. They had nothing to demonstrate that we had agreed to a waiver, either in negotiations or in con- tract. They had nothing to demonstrate that they had ever requested a waiver or had asserted there was a waiver in negotiations . I mean, because some- body sits around and says a waiver, doesn 't make it a fact that there's a waiver. Flowers, on rebuttal, testified that G.E. has subcon- tracted Local 618's work before October 1986 but it in- volved overload situations where G.E. had more work than it could handle with its employees, where G.E. had to get work out in a limited period of time, or where G.E. did not have the equipment or the skills to do the work; that when G.E. subcontracted out Local 618's work when there was no question of capability or over- load and Local 618 knew about it, Local 618 either filed a grievance or discussed the matter with management to try to get it rectified; that the Union won some of these grievances and sometimes after a discussion with man- agement the subcontracting ceased; that since the plant has 22 buildings there very well could be subcontracting somewhere in the plant that the Union was not aware of and G.E. is not in the practice of giving Local 618 notice before subcontracting Local 618's work; that Local 618 was not aware that G.E. was subcontracting out keypunch work in the powerhouse; that he did not know of any prior instance where Local 618 bargaining unit employees were displaced by people who came onsite; and that he did not recall G.E. giving advance notice to Local 618 regarding subcontracting prior to October 1986.19 Palmer, on rebuttal, testified that when Barnes said he subcontracted a hundred graphic art jobs, what he meant was orders which could consist of two pages of repro- duction; that G.E. has subcontracted graphic work when Local 618 members were out sick and a job had to be done before they returned so as to meet a completion date; that he did not know of any cases of subcontracting of graphics work when Local 618 members were avail- able and had the time to do the work; and that in the last 2 weeks before he testified herein there was an overload situation in graphics because five or six people were out sick with the flu. B. Contentions On brief, General Counsel contends that it is well es- tablished, under court and Board law, that an employer iii Flowers believed that G.E. notified the Union about the transferring of a product line to G .E's Grove City. Pennsylvania site in 1981 must give notice to and, on request, bargain with the ex- clusive bargaining representative of its employees over a decision to subcontract unit work, a mandatory subject of bargaining, where the decision turns on labor costs or where "all that is involved is the substitution of one group of workers for another to perform the same task in the same plant under the ultimate control of the same employer," First National Corp. v. NLRB, 452 U.S. 666 (1981); Fibreboard Corp. v. NLRB, 379 U.S. 203 (1964); Collateral Control Corp., 288 NLRB 308 (1988), and Otis Elevator Co., 269 NLRB 891 (1984); that Respondent vio- lated Section 8(a)(1) and (5) when, on October 6, it an- nounced its decision to subcontract onsite bargaining unit work in the mailroom and photolab without prior notice to the Union and without having afforded the Union an opportunity to negotiate and bargain as the exclusive representative of Respondent's mailroom and photolab employees; that the right to be consulted about changes in existing terms and conditions of employment is a right given by statute and not one obtained by a contract, and the courts and the Board will not assume a waiver by a union of its statutory right to bargain over changes in terms and conditions of employment, such a waiver must be clear and unmistakable, and it can only be found when the Union's intent to waive is clear and unmistak- able from all the evidence submitted; that the manage- ment-rights clause does not constitute waiver since there is no language in the clause which gives Respondent the right to subcontract bargaining unit work, nor is there any language in the clause which even suggests that the Union waives its rights to decision bargain over subcon- tracting; that the fact that a collective-bargaining agree- ment contains a zipper clause does not mean that a union has clearly and unmistakably relinquished its right to bar- gain over all mandatory subjects of bargaining or is such a clause a grant to an employer of the right to change, unilaterally, existing terms and conditions of employ- ment; that there is no language in the zipper clause which reveals a clear and unmistakable waiver by the Union over its right to negotiate with Respondent over a decision to subcontract and Respondent's reliance on the zipper clause to support a waiver is unfounded, particu- larly in view of the absence of any record evidence that the Union had consciously yielded its statutory right to decision bargain over subcontracting by its agreement to the zipper clause; that the Union did not waive its right to decision bargain in the 1982 or the 1985 collective- bargaining negotiations; that waivers of a statutory right, purportedly manifested at some bargaining table will not be lightly inferred and, therefore, when particular sub- jects have been discussed during contract negotiations, proof, standing alone, that the contracting parties may not have subsequently dealt with the matter specifically within their resultant document, will not be considered a clear waiver manifestation; that there is nothing in the 1982 or 1985 negotiations which supports a claim of waiver by Respondent and no imaginative assemblage of the record evidence indicates a clear and unequivocal waiver, either contractual or statutory, of its right to de- cision bargain over the subcontracting of the mailroom and the photolab work; that the Union did not waive its GENERAL ELECTRIC CO. right to decision bargain by past practice, by its failure to object or inaction or by the 1970 Bickford letter; that there is nothing in Local 618's past conduct which re- motely indicates a pattern of acquiescence by Local 618 in response to Respondent's subcontracting, or a waiver of its right to decision bargain over the subcontracting of bargaining unit work and in the absence of notice of a change in working conditiong a union cannot be held to have waived its right to decision bargain ; that even if Respondent had previously subcontracted bargaining unit work without bargaining with the Union, a union's ac- quiescence in previous subcontracting does not operate as a waiver of its right to bargain over such contracting for all time; that the facts show that the Union opposed Respondent's decision to subcontract in that it demanded rescision of Respondent's decission and requested bar- gaining over the decision, it requested Respondent's cost information to be used in such bargaining, and it filed grievances and an unfair labor practice charge over Re- spondent's decision; that there is no requirement that unions grovel or undertake futile acts in order to impress upon recalcitrant employers the seriousness of their inter- est in bargaining, Armour & Co., 280 NLRB 824 (1986); that effects bargaining does not constitute a waiver of the Union's right to decision bargain; that the Bickford letter does not establish a waiver by the Union of its right to decision bargain since it contains no language re- garding or referring to waiver and to establish waiver of a statutory right, that right must be clearly and unmistak- ably relinquished; and that any assertion by Respondent that the conduct of Local 506 of the UE in a subcon- tracting context waives Local 618's right to decision bar- gain is unsupported by case law and common sense. Charging Party, on brief, argues that in spite of all G.E.'s legal arguments about waiver, it has the burden to prove that the UE clearly and unmistakably waived its statutory right to bargain over subcontracting; that G.E. made its position extremely clear that it felt that it had an absolute right to make unilateral decisions regarding subcontracting and was prepared only to bargain over the effects of its decision; that in addition to the Union's oral demands to bargain over the decision, whose timing is disputed by the Company, the Union demanded the specific information it felt it needed in order to bargain, and G.E. understood that much of the information sought pertained only to decision bargaining and re- sponded by agreeing only to provide information rele- vant to effects bargaining; that where the employer has made clear its position that it has no obligation to bar- gain with the Union, the Board has held that a union demand for bargaining would have been futile and was not required, Intersystems Design Corp., 278 NLRB 759 (1986); that there was no express waiver prior to 1982, and no extrinsic evidence was presented regarding this period of time; that subcontracting is not mentioned in the involved management authority or "zipper" provi- sions or Bickford letter and consequently, Respondent's reliance on these provisions to establish waiver is mis- placed; that the involved 1982 and 1985 agreements do not contain a waiver; that nothing in any of the relevant contractual provisions or letters concerning notice refer in any way to the obligation to bargain regarding a deci- 855 sion to subcontract work or to a waiver of such statutory right by the Union; that Respondent may not rely on ex- trinsic evidence where the contract language is clear; that even if extrinsic evidence is permitted , G.E. cannot show waiver; that any proposals seeking to impose limi- tations on the Union's right to bargain over subcontract- ing decisions would have come from the Company, not from the UE and it is undisputed that there were no company proposals in either 1982 and 1985 to expand the management authority or zipper clauses or to limit the Union's right to bargain over a company decision to sub- contract; that G.E.'s position appears to be that the Union gave up its right to bargain over the decision to subcontract as a guid pro quo for obtaining a 6-month notice of such decision and contractual benefits once such a decision was implemented; that such a waiver was not implicit in the Union's proposals and it did not ex- plicitly occur during the course of negotiations; that no waiver can be implied from the proposal by the Union of language which is more comprehensive than rights con- ferred by statute even where, as in the case of its propos- al to ban subcontracting, the proposal was subsequently rescinded; that the Union did not waive its statutory right to decision bargaining as the quid pro quo for above-described article XXIII benefits or a 6-month notice of plant closing or transfers of work ; that even if extrinsic evidence is considered it merely confirms at no time in the course of negotiations did the UE waive its right to insist on decision bargaining with G.E. regarding subcontracting; that while G.E. may attempt to argue that because the Union made certain proposals regarding subcontracting during negotiations, the zipper clause pre- cludes the Union from enforcing its statutory rights during the period of the contract , such an argument has no merit since the zipper clause in the UE-GE 1982 and 1985 contracts is relatively narrow and does not purport to "wipe the slate clean " but rather, it only precludes ne- gotiations during the period of the contract over subjects which are contained in the agreements or which were discussed during negotiations; that the Board has recog- nized that the purpose of a zipper clause is essentially to "maintain the status quo, not to facilitate unilateral change" and will not find a waiver unless the evidence is unequivocal, Angelus Block Co., 250 NLRB 868, 877 (1980); that here the zipper clause does not refer to sub- contracting on its face and the Respondent introduced no bargaining history to show that the parties under- stood the zipper clause to preclude decision bargaining where required by a statute or that a waiver of the Union's statutory right was ever raised or discussed; that this is the first time that GE gave the Union formal notice of a subcontracting decision and under these cir- cumstances, even if the Company were able to show past acquiescence it would not preclude the Union from in- sisting on its statutory rights in this case, Litton Systems, 283 NLRB 973 (1987); that no waiver by past practice may be established as a matter of law, however, and even if it could, there can be no doubt that where Local 618 officials became aware that their work was being performed by subcontractors, although bargaining unit members were available and capable of doing the work, 856 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD they registered an objection and sought either through informal discussion or through the grievance procedure to rectify the matter ; that even if GE could establish that Local 506 of UE waived its right to decision bargaining over subcontracting through a failure to object on previ- ous occasions, Local 618 is a separate, independent local and in no way may be bound by such actions; and that while it is anticipated that G.E. will claim that Local 618 officials waived their right to bargain over the Compa- ny's subcontracting decision by agreeing to bargain over the effects, the evidence clearly demonstrates that this was not in fact the case. On brief, Respondent argues that while it does not dis- pute that this is a classic Fibreboard, supra, subcontract- ing case in that the subcontracting involved the substitu- tion of the employees of an independent contractor for the Respondent's own employees and was done to save labor costs, it had the right , however, to unilaterally sub- contract bargaining unit work by virtue of a contractual waiver of the Union's right to bargain; that in this case, it is clear that the contract language when read in light of the past practice and negotiation history gives the Re- spondent the right to subcontract bargaining unit work unilaterally; that there are three articles of the parties' agreement and two side letter agreements which, when read together and in light of the 1982 and 1985 bargain- ing history and the past practice, constitute a clear and unmistakable waiver of the Union's right to bargain about subcontracting decisions ; that the contract provi- sions include a broad management-rights clause, an ex- tensive article on job and income security, and a "zipper" or wrap-up clause; that the letter agreements are (1) a 1970 letter detailing an expedited grievance- processing procedure dealing with the transfer of jobs from any UE location and which requires that the Re- spondent withhold the effectuation of any such transfer of jobs until the grievance has been fully processed through this procedure, and (2) a letter agreement setting forth certain notice requirements that apply to plant clos- ing, work transfer, and automation decision in the con- text of language affirming the unilateral right of the Company to make such decisions ; that from the 1982 ne- gotiation history it is clear that the UE sought advance notice of decisions that impacted on job security includ- ing subcontracting, it did this to obtain an input into the decision-making process, and the "UE was attempting to reverse what had been given away in the past-the right to negotiate and bargain about these types of decisions [since] [t]here is no other way to read the persistent demand for advance notice which fully supports the Company's position that it had the right to make unilat- eral subcontracting decisions," Respondent's Briefs 18 and 19; that the Union attempted to restrict subcontract- ing in 1985 by seeking an outright ban of subcontracting except in special situations or advance notice so the Union could input into the decision-making process; that as a result of the negotiating process what the Union got instead was ( 1) notice of the Respondent's decision to subcontract 6 months in advance of implementation where (a) the subcontracting involves ongoing produc- tion work and (b) the subcontracting would result in a net decrease of the employees doing the work in ques- tion, (2) certain rate guarantee protection without regard to the ongoing production work requirement, and (3) the right to delay the effectuation of a subcontracting deci- sion, which involves work or jobs leaving the unit, while expedited grievance discussions are held under the 1970 letter agreement which is still in effect between the par- ties; that what the Respondent obtained from the 1982 and 1985 negotiations was the right to continue making unilateral decisions with respect to work transfers, in- cluding subcontracting, within the parameters of the re- strictions which were negotiated; that if that right was not clear before 1982, it was clear after that date; that the "zipper" or wrap-up clause of the parties contract applies; that the combined impact of the contract lan- guage, negotiation history and practice clearly demon- strates a waiver; that a management-rights clause will support a waiver in appropriate circumstances such as where the bargaining history indicates that the parties contemplated unilateral decision making; that while it is understandable that the Union would be upset over a subcontracting decision that directly impacted the Local's president and a chief steward , this case simply does not belong before the Board in that the Union is conveniently forgetting the bargain that was struck in 1982 and which was amplified in 1985, namely, the in- creased benefits and the obligation of the Respondent to provide notice of certain types of job security decisions including subcontracting before the decisions were im- plemented were part of a bargain and the other side of the bargain was that the Respondent retained the right to make these decisions unilaterally ; that if what happened in 1982 did not make it abundantly clear that the UE waived its right to bargain about subcontracting deci- sions, the waiver certainly flows from what followed in that Block admitted that the Respondent took the posi- tion that there was a waiver of the UE's right to bargain about work transfer and subcontracting decisions in the context of a dispute over a work transfer situation in late 1982 or early 1983; that Local 618 does not have a sepa- rate agreement with the Respondent but rather Local 618 is one of a number of separate bargaining units cov- ered by a national agreement and the National Agree- ment applies by its terms to all these units; that the inter- pretation of the National Agreement, as amplified by past practice and negotiation history, is as equally appli- cable to the Union as it is to any other bargaining unit listed in the Preamble of the National Agreement; that the language of the agreement cannot constitute a waiver as to one bargaining unit and not to another and any waiver arising from the National Agreement is equally applicable to all units covered by the agreement; that if there was any doubt on that score the doubt was un- equivocally erased when the Respondent issued its "Ad- vance Notification And Rate Guarantee Guidelines" in September of 1982 right after the 1982 negotiations; that the Union received a copy of these guidelines and there is no evidence that they ever quarreled with this inter- pretation; that the Respondent has consistently applied the rate guarantee provisions to the subcontracting of bargaining unit work regardless of whether the work is done at the site or away from the site; that in this very GENERAL ELECTRIC CO. case employees affected by the subcontracting of the mailroom work and the photolab work received the rate guarantee; that the Respondent did not refuse to bargain about its decision to subcontract the mailroom and pho- tolab work; that Pollock specifically asked on October 10, 1986: "is there anything you'd like to discuss on the decision to subcontract?" and the reply that Pollock re- ceived was that the Union demanded that the subcon- tracting decision be rescinded; that while Pollock admits that he stated he would not bargain about the decision to subcontract, this statement came in the grievance proce- dure, after the subcontracts had been let; that while Flowers maintains that this statement was made prior to the letting of the subcontracts, his testimony simply is not credible; that the Union simply was not authorized to bargain with respect to wage concessions and its ap- proach was to get the Company to rescind the decision by pressure tactics including pressure on one of the po- tential subcontractors, informational picketing, a strike, and by getting the Erie City and county councils to pass resolutions protesting the subcontracting; that bargaining simply was not on the Union's agenda; that after the Oc- tober 10, 1986 meeting there was no further duty to bar- gain about the decision to subcontract since the parties were at impasse and as late as October 30, the Respond- ent made it clear that the situation was not a "fait ac- compli"; and that notwithstanding this there was no pro- posal from the Union. C. Analysis As noted above, Respondent concedes that this is a classic Fibreboard, supra, subcontracting case. Respond- ent maintains as an affirmative defense, however, that there was a contractual waiver of the Union's right to bargain over the decision. The record does not support this assertion. To have a contractual waiver of the involved statutory right, the waiver must be clear and unmistakable. Metro- politan Edison Co. v. NLRB, 460 U.S. 693, 708 (1983). There must be an express mention in the agreement of an intention by the Union to waive bargaining on the deci- sion to subcontract. No such express mention is made in any of the documents Respondent introduced herein in its attempt to meet its burden of proof, namely, to show that there was a waiver. Additionally, Respondent has not demonstrated that the Union expressly, at the bar- gaining table, made a concious relinquishment, clearly in- tending and expressly bargaining away its statutory right. As the Charging Party contends, at the bargaining table it was attempting to obtain something in excess of its statutory right. The fact that Respondent was not specifi- cally precluded in the involved agreement from subcon- tracting does not mean that Respondent was conciously and expressly given the right by the Union to subcon- tract without first bargaining with the Union pursuant to the statute. Respondent's own notes of the October 6, 1986 meet- ing, a portion of which is attached here as appendix A, with officials of the Union, Respondent's Exhibit 13, and its G.E. News, General Counsel's Exhibit 4, demonstrate that at that point in time the Union was presented with a fait accompli. The Union was not accorded the opportu- 857 nity to bargain. Nonetheless, the Union took that action which clearly indicated to G.E. that it wanted to bargain regarding the decision to subcontract the work of the mailroom and the photolab. The terms of a settlement agreement between G.E. and another union, Respondent's Exhibit 31, are not rele- vant herein unless G.E. could demonstrate that in some way UE was bound by the terms of the agreement. Al- though given the opportunity, G.E. failed to demonstrate that there was any reason for binding UE by an agree- ment to which it was not a party. From the documents introduced herein and from the testimony about the involved negotiations and what did or did not occur before, on, and after October 6, 1986, it is clear, and I find that the Union's right to bargain over the decision to subcontract was not intentionally relin- quished by the Union. Accordingly, there is no merit, in my opinion, in Respondent's affirmative defense. Re- spondent's failure and refusal to bargain regarding the decision to subcontract violated Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By announcing on October 6, 1986, its decision to subcontract onsite bargaining unit work in the mailroom and photolab at Respondent's Erie, Pennsylvania facility without prior notice to the Union and without having af- forded the Union an opportunity to negotiate and bar- gain, Respondent failed and refused to bargain collective- ly in good faith with the representative of its employees, and Respondent thereby violated Section 8(a)(1) and (5) of the Act. 4. The foregoing unfair labor practice affects com- merce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent violated Section 8(a)(1) and (5) of the Act by failing and refusing to bargain with the Union over the decision to subcontract, Respondent shall be ordered to cease and desist therefore, and to take certain affirmative action designed to effectuate the poli- cies of the Act. Respondent's failure to bargain prior to the involved subcontracting can be fully remedied only by restoration of the status quo ante. Therefore, Respondent shall be ordered to abrogate its involved subcontracts, offer to restore its employees to the positions which they held before its unlawful action, and make those employees whole for any loss of wages resulting from the Respond- ent's unlawful conduct. Backpay shall be based on earn- ings which the involved employees would normally have received during the applicable period, less any net inter- im earnings, and shall be computed on a quarterly basis in the manner set forth in F W. Woolworth Co., 90 NLRB 289 (1950), with interest thereon computed in the 858 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD manner provided in New Horizons for the Retarded, 283 NLRB 1173 ( 1987).20 The Respondent, shall be required to bargain with the Union over the decision to subcontract the work of the photolab and mailroom at Respondent 's Erie, Pennsylva- nia facility. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed21 ORDER The Respondent, General Electric Co., Erie, Pennsyl- vania, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to bargain collectively in good faith with United Electrical Radio and Machines Work- ers of America, Local 618 (UE) with respect to the deci- sion to subcontract the work of the mailroom and the photolab at Respondent's Erie, Pennsylvania facility. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. 20 Under New Horizons, interest is computed at the "short-term Federal rate" for the underpayment of taxes as set out in th 1986 amendment to 26 U.S C § 6621 Interest accrued before 1 January 1987 (the effective date of the amendment) shall be computed as in Florida Steel Corp, 231 NLRB 651 ( 1977). 21 If no exceptions are filed as provided in Section 102.46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusions, and recommended Order shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings conclusions, and Order, and all objections to them shall be deemed waived for all purposes. (a) Bargain in good faith with the Union concerning any decision to subcontract the work of the mailroom and photolab at Respondent's Erie, Pennsylvania facility. (b) Abrogate its subcontracts for the work of the mail- room and the photolab at Respondent's Erie, Pennsylva- nia facility and offer to restore its involved employees to the positions which they held before its unlawful action. (c) Make each of the involved employees whole by providing them with backpay in the manner set forth above in the remedy section of the decision. (d) Preserve and, on request , make available to the Board or its agents for examination and copying , all pay- roll records, social security payment records , time cards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (e) Post at its Erie, Pennsylvania facility copies of the attached notice marked "Appendix B."22 Copies of the notice, on forms provided by the Regional Director for Region 6, after being signed by the Respondent's author- ized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecu- tive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 's 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."