Brooks, Inc.

BROOKS. INC. 757 Albion Corporation d/b/a Brooks, Inc. and Local No. 1, International Union of Operating Engi- neers, AFL-CIO and Charles Hoffman. Cases 27-CA-4557 and 27-CA-4562 August 27, 1980 SUPPLEMENTAL DECISION AND ORDER BY MEMBERS JENKINS, PENELLO, AND TRUESDALE On April 12, 1977, the National Labor Relations Board issued its Decision and Order in the above- entitled proceeding' in which it found that the Re- spondent had engaged in certain unfair labor prac- tices in violation of Section 8(a)(5), (3), and (1) of the National Labor Relations Act, as amended, and ordered the Respondent to take certain affirmative action to remedy such unfair labor practices. On March 5, 1979, the United States Court of Appeals for the Tenth Circuit issued its judgment2 enforcing the Board's Order with the exception of the provisions requiring the Respondent to make its employees whole for their loss of pay. Prior to the issuance of the Board's Decision and Order, the Respondent had filed a motion to reopen the record to admit newly discovered evidence pertain- ing to the provisions of the Board's Order requir- ing Respondent to make its employees whole for their loss of pay. The Board denied the motion. In remanding the case, the court instructed the Board to reopen the record for the purpose of admitting the newly discovered evidence. On October 10, 1979, a hearing was held before Administrative Law Judge Leonard N. Cohen for the purpose of receiving the newly discovered evi- dence. On May 20, 1980, the Administrative Law Judge issued the attached Supplemental Decision. Thereafter, the Respondent filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority to a three-member panel. The Board has considered the record and the at- tached Supplemental Decision in light of the ex- ceptions and brief, and has decided to affirm the rulings, findings, 3 and conclusions of the Adminis- ' 228 NLRB 1365. 593 F2d 936 ' The Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect Standard Dry Wall Producs. Inc.. 91 NLRB 544 (1950), enfd 188 F2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing his findings 251 NLRB No. 104 trative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Albion Corpo- ration d/b/a Brooks, Inc., Denver, Colorado, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. SUPPLEMENTAL DECISION STATEMENT OF IHF CASE LEONARD N. COHEN, Administrative Law Judge: Pur- suant to an Order of the National Labor Relations Board, herein called the Board, issued on July 10, 1979, and a notice of hearing issued by the Acting Regional Director for Region 27 on July 13, 1979, a hearing was held before me in Denver, Colorado, on October 10, 1979. On April 12, 1977, the Board issued a Decision and Order' in the above-entitled proceeding in which it found that Respondent had engaged in certain unfair labor practices in violation of Section 8(a)(5), (3), and (1) and Section 2(6) and (7) of the National Labor Relations Act, as amended, and ordered Respondent to cease and desist therefrom, and to take certain affirmative action to remedy such unfair labor practices. Thereafter, the Board filed a petition for enforcement of its Order with the United States Court of Appeals for the Tenth Circuit, and Respondent filed a cross-petition for review of the Board's Order. On March 5, 1979, the court enforced the Board's Order with the exceptions of the provisions requiring Respondent to make its employ- ees whole for their loss of pay. 2 Prior to the issuance of the Board's Decision and Order, Respondent had filed a motion to reopen the record to admit newly discovered evidence. The Board denied Respondent's motion, find- ing that such evidence had no bearing on the allegations then before the Board. In remanding the case to the Board, the court instructed the Board to reopen the record for the purpose of admitting the newly discov- ered evidence pertaining to the provisions of the Board's Order requiring Respondent to make its employees whole for loss of their pay. A brief summary of the facts as previously found by the Board and adopted by the court is as follows: By late 1974, the Union represented in separate bar- gaining units Respondent's maintenance and janitorial employees. The I-year contract covering the approxi- mately eight maintenance employees was effective through June 14, 1975.3 The contract covering the ap- 228 NLRB 1365 (1977) 2 593 F2d 936 (10th Cir 1979) :' Unless otherxwise indicated, all dates hereinafter are in 1975 BROOKS. [N. 757 trative Law Judge and to adopt his recommended _ . _ 758 DECISIONS OF NATIONAL LABOR RELATIONS BOARD proximately 10 janitorial employees, herein called jani- tors, was effective through December 31. In early April, the Union sent its notice of intent to reopen the maintenance contract and, in the following 2 to 2-1/2 months, unsuccessfully attempted to get Re- spondent to meet and bargain with it over a new con- tract. On June 16, the maintenance employees struck Re- spondent and set up a picket line. The entire complement of janitors honored the picket line. Respondent almost immediately contracted with two independent contract- ing firms to perform the work previously done by the maintenance and janitorial employees. On the first day of the strike, Respondent's attorney, Weinshienk, called the Union's attorney, Simons, and in- formed him that, while Respondent was willing to bar- gain, it was then preparing a petition to determine the Union's majority status. Simons rejected the offer to bar- gain as ambiguous. On June 20, Simons called Weinshienk and the two at that time scheduled bargaining meetings for the follow- ing week. During the course of their conversation, Simons unconditionally offered to return all the employ- ees to work. By letter sent that same day, Simons con- firmed his offer. Respondent did not reply to Simons' offer until the parties' meeting of June 27. At that time, Respondent At- torney Gorsuch informed the Union that the janitors could be reinstated but that the maintenance employees could not return until "certain legal questions" were re- solved. At a meeting held on July 2, Respondent indicat- ed that, while it was willing to reinstate the janitors, it conditioned such reinstatement on a guarantee that they would remain at work for 30 to 60 days. Thereafter, this condition imposed by Respondent was changed to extend to a flat 60-day guarantee. The parties continued to meet and bargain throughout July and early August. Respondent, by its vice president, Torgove, offered a proposal for a new contract which would have provided for a reduction in the wages and benefits received by the maintenance employees. While calling for such a reduction, Respondent asserted that its proposals, nonetheless, provided for wages and benefits in excess of those received by either the temporary re- placements or maintenance workers at comparable area buildings. The Union, by its business manager, Crouch, rejected this offer and on August 1 countered with an offer to extend the expired contract for 1 year. This counteroffer was rejected and, on August 8, Respondent submitted its "final offer" which, while slightly higher than its original offer, still called for lower rates than provided for in the expired contract. The Union rejected this "final offer" and Respondent, on that same date, then offered the replacements permanent employment. Although the maintenence employees have never been reinstated, the janitors were reinstated in mid-October. The court affirmed the Board's findings and conclu- sions that Respondent had (I) violated Section 8(a)(l) of the Act by telling its employees that anyone who went on strike would never work for Respondent again; (2) violated Section 8(a)(5) and (I) of the Act by refusing to recognize to bargain with the Union, and (3) violated Section 8(a)(3) and (1) of the Act by imposing unlawful conditions on the reinstatement of unfair labor practice strikers. The court, however, refused to enforce that portion of the Board's Order requiring Respondent to make its maintenance employees whole for any loss of pay they suffered after August 8. In this matter, the court noted (593 F.2d at 940) that Respondent in its appellate brief argued: . . . that it bargained in good faith with the Union from late June until its offer of August 8 was re- fused, at which point impasse was reached. Albion asserts that it made a lawful unilateral change in terms of employment following this impasse in bar- gaining, and the decision to continue the strike beyond that point constituted revocation of the ear- lier unconditional offer to return to work. The strike purportedly continued thereafter purely on economic issues. Therefore, Albion urges, the award of lost pay should be limited to the period prior to the impasse in bargaining. In support thereof, the court continued [id. at 940-941]: . . .Albion moved the Board to reopen the record for the purpose of taking newly discovered evi- dence. Albion made an offer of proof that it and the Union reached an agreement with respect to the Brooks Towers janitorial employees in February 1976, after the close of the hearing in this case. At negotiations with the janitorial respresentatives, Torgove allegedly took a bargaining position very similar to that which he displayed in negotiations with Crouch the previous summer concerning the maintenance employees. The offer of proof further states that the agreement concluded in February 1976 provides for a substantially lower economic package than that enjoyed by the janitors under the prior contract. The motion to reopen was denied by the Board which stated the proffered evidence had no bearing on the question of Albion's good faith at the negotiations with the maintenance employees. We do not agree. In remanding the matter to the Board with instructions to reopen the record for the purpose of admitting the newly discovered evidence, the court stated (id. at 941): We are convinced, however, that this proffered evidence was not only essentially unavailable at the time of the hearing, but also has great bearing on the question of Albion's good faith. The offered evi- dence, which we assume to be true for present pur- poses, N.L.R.B. v. Ideal Laundry and Dry Cleaning Co., 10 Cir., 330 F.2d 712, 716, demonstrates that Albion was able within a few months of the negoti- ations here at issue to convince the Union that its financial plight justified a wage and benefit reduc- tion, for its Brooks Towers employees. The tenacity with which Albion maintained its position and the ultimate acquiescence of the Union thereto, when considered in the light of presently existing evi- BIROOKS. INC 7I5) dence of Albion's financial dilemma strongly sup- ports the assertion of good faith. At the hearing on remand, all parties were afforded the full opportunity to appear, to introduce evidence, and to examine and cross-examine witnesses, to argue orally. and to file briefs. Counsels for the General Counsel and Respondent filed briefs which have been carefully con- sidered. Upon the entire record of this case and from my ob- ser\vation of the witnesses and their demeanor, I make the following: FINI)IN(GS OI FACI 1. IV\t) IENCI P'RtSI-NSI'tI) A II l. ROPlNI.1 EtlARING A. Background4 Prior to the June strike, the janitors performed their duties in both the commercial as well as in the noncom- mercial areas (hallways, apartments, and common space) at Brooks Towers, a large apartment and office building complex in downtown Denver, Colorado. The 1977-78 collective-bargaining agreement listed five separate job classifications or designations with wages, as of October 7, 1975, ranging from a low of $2.83 an hour to a high of $4.26 an hour. Although the record is far from clear, it appears that none of the 10 janitors employed during the calendar year 1975 were employed in the highest pay classifications and the large majority of the 10 were em- ployed in the lower classifications with hourly wages ranging from $3.21 an hour to $3.63 an hour. When Respondent, on October 10, finally made its un- conditional offer to its janitors, only 6 of the original 10 indicated to Respondent that they intended to return to work.5 Apparently Respondent had by at least mid-Sep- tember been informed that only half of the original unit would accept its offer for, during that month, Respond- ent Vice President Torgove called Sam Crouch, the Union's business manager, and asked if the Union could help secure additional janitors. Crouch declined to do so on the grounds that it was not the Union's responsibility to find new employees. About the same time that the five strikers returned, Respondent hired six new employees to replace those strikers who refused its offer. Of those six new employ- ees, five, a Korean family comprised of a father and his four children, had been employed by the janitor contrac- tor working exclusively in the commercial portions of the building since mid-June.6 The father acted as a "kind of superintendent of the family" and received a rate of $3.08 an hour while his four children received a rate of $2.83 an hour.7 Torgove testified that. during the period of the strike that the contractor was performing the janitorial serv- 4 The act, se f rh In this sectll, n re nor In dispute ' UltimateNl. o1l fit.e of the strikillg e nlployees did ill fact accept Re- spindenl's offer ' The sixth nes crmpplosc apparentl5 had not %rrked al the building prior to ) tobher 7 The wagce rates oif hese fie c did not change he ilhe neu. collc tise-hargaining gree mnt llcaelll ilnto effect ices, Respondent discovered that the cleaning of the commercial areas of the building' could be completed in 5 hours rather than the normal shift of 8 hours. There- fore, unlike the five returning strikers who worked a minimum of 8 hours a day, these new' emploxces ere employed at all times on a 5-hour shift per night. As will be set forth in some detail below, the Union's negotiating team for the upconming bargaining sessions leading to the news collective-hargaining agreement ,,as composed of Crouch and the four remaining employees who had worked for Respondent prior to the June strike. During these negotiations, Respondent proposed and the Union agreed that the union-security and checkoff provi- sions be changed to specifically exclude those janitorial employees who performed work exclusively in the conm- mercial areas. Additionally, Respondent proposed and the Union agreed that a new classification, that of a working foreman, be created and excluded from the union-security provisions. The article by which Respond- ent recognized the Union as the exclusive bargaining rep- resentative for all its janitorial employees was not changed from the prior agreement. The explanation re- garding this apparent inconsistency is less thian clear. While fully admitting that the terms and conditions of the new collective-bargaining agreement were not il- tended nor had been applied to either those employees performing exclusively in commercial areas or to the working foreman, these employees were, nonetheless in the opinion of Respondent, represented by the Unionl. Crouch's testimony on this point is scarce and vague. It appeared that he, in agreement with Torgove, believed that the contract's terms and conditions did not appl to either of these classifications. Unlike Torgove, however, it does not appear he ever felt that by virtue of the rec- ognition clause of the contract the Union represented either classification. Further, Crouch testified that during the negotiations in early 1976 he was not aware that Re- spondent was currently employing an5y janitors other than the initial reinstated strikers. Crouch admitted that, although he was aware that 10 janitors were employed prior to the June strike and that Respondent had sought and elicited his aid in securing new employees. at no time during these negotiations did he ever ask Rcspond- ent about this subject. B. Negotiations for the Aew Contract On October 30 and 31, Respondent and the Union, re- spectively, notified the other of their intent to open the 1974-75 collective-bargaining agreement for renegoti- ation. Between mid-November and early February 197h. a total of six separate negotiation sessions were held which ultimately led to the execution of a new collec- tive-bargaining agreement effective February 1, 197h. through February 28, 1977. °0 The parties met for the The cleaning of these portions f he buildineg. inIike tlite paillir lli could oitI he performed it tight aft,r Iht e.lOis, C - regl.lr hulsli. hours 5 i]att D)ecem er. i, on, tIhe ft,.c rlurll.si \llltiit.irtIl Itt R i d cl% n ephs " I.ttle fai aLil disputie cxists regarding the itegltlliolS 1.1 iItI . ll iltrs oIlt.l thilet foll"I', i recItation {I t s is hij.cd I I iorgyS C, Ic- ( Ollllll^d I)ICtISI()NS ()F NAI()NAI. LABOR RELAIO()NS BOAR) first time on November 18. ] ] For this meeting, as in all the following ones, Respondent was represented by Tor- gove.12 As noted above, the Union's negotiating team consisted of Crouch and the four returning janitors. Ad- ditionallv, a mediator from the Federal Mediation and Conciliation Service was present at all the meetings. At the outset, Torgove explained in some depth Re- spondent's financial plight. According to Torgove, Re- spondent had a serious negative cash flow, short-term li- abilities that exceeded short-term assets and a negative net worth with respect to all assets and liabilities. Spe- cifically, lorgove explained that Respondent was in de- fault with the first mortgage lender and was then cur- rently attempting to work out an arrangement with it. Additionally, Torgove stated that Respondent was con- tinuing to discover liabilities left over from the prior management that exceeded their cash supply and, there- fore, they had a constant and running battle with credi- tors. Further, Torgove indicated to the Union some of the other steps it was then undertaking in an effort to savec the building. : These efforts included getting the I'ublic Service Company to put tenants in individual util- ity meters instead of common ones \whichi Respondent paid and reneswed anid contitued efforts at renting the unoc0cupi Ced apartenl lts i the comiplex. The meeting ended wilh the suggestion by the Federal mediator that the Union prepare a proposal for the next meeting. The second negotiation took place on January 2, 1976. At this meting, the Union orally presented a proposal which provided for a -year contract with identical lan- guage from the expired agreement with the sole excep- tion of the wage provisions. The Union in its initial pro- posal sought a 10-cent-an-hour wage increase to be re- ceived April 1, 1976. Torgove answered by again reciting Respondent's financial problems in a fashion similar to what had been stated in their first meeting. Additionally, Torgove discussed the contract which the Union had with Prudential Systems, Inc. of Colorado who owned and operated the Executive Tower Inn, herein called the Executive Tower, a high rise office and motel complex located in the same block and adjoining Brooks Towers.14 According to both Torgove's and Crouch's tiriioni I orgovec ipressed mle with his ahilit to recall ith sotme degree of clarity the discussions ill the bargaining tlahle. Although his tes- imllony Fir the mnos part is consistent with that of Torgole, Crouch, the onlty other witness to testily regarding the negotiations, was less able to recall wilh spccificity the details regarding this bargaining t' It appears, based upon careful reading of the correspondence ex- changed between orgosre and Crouch during Nosember and December regarding Respondent's unsuccessful aempts to obtain from the niron copies of collective-bargaininig agreements the Unlion had ith other em- ployers im Ihe area, that Torgove may have inadvertently misplaced the daite for the first session a week or two earlier than it actually iiccurred tin ay evet it is clear tiha the first bargainlling sessioti did tlke place durilg Ithe calendar year ar 178. m While Attorney (iorsu h v: as presenl for soellc if nol ill o' the Jain uary and Februalry sessiills, it appears Iliat lol-gose 5. al Respinlldenlt chief spoikeslnallt all limes ' lorgove estitfied wvithout conltradiction tihait tlhese explanatios were essitiallly Ihe saillT ones tha l had beenr rlade o Cr(uch during the lncgo- tliallt iIn Jul)y and August flr the engineers' cotnract '4 Ih conltracl for tie xecnutive 'rower was executed by he 'm- ployer ad the niolln on Jatluary 5 1975, aid covered the periodl f )e- ceniber 6, 174. o December 5, 1977 I'his agreement prsovided the 1ol- ihlwg age scale effeclive II t)ecclber 6h 1974, 175 ad 19'7h, fr tihe testimony, the Executive Tower is the most comparable building in Denver to the Brooks Towers. 5 In light of both the Union's contract with the Execu- tive Tower and its own financial problems, Respondent requested a second proposal from the Union. 6 The par- ties agreed to meet for the third bargaining session on January 7, 1976." At the January 7 meeting, the Union did not have a second proposal prepared so each side caucused and Re- spondent prepared, in writing, an offer which was pre- sented to the Union. This proposal provided for the fol- lowing changes from the expired collective-bargaining agreement: 1. Deletion of the union-security and checkoff provi- sions. 2. Increase in the probationary period from 30 to 90 days. 3. Deletion of two holidays and employee's birthday as paid holidays. 4. Increase from 8 to 10 years the necessary length of service required to earn 3 weeks' vacation. 5. Limit jury duty paid to a maximum of 10 days. 6. Limit the employer's contributions under the health and welfare provisions to employees swith at least I year seniority. 7. Deletion of rest periods. 8. Expansion of the management-rights clause. 9. A -year contract. 10. Change of job classifications simply to inspectors anid housepersons, with a wage rate of $2.65 an hour for inspectors, $2.55 an hour for new housepersons, and $3.03 an hour for housepersons who had been employed for more than an unspecified number of years. Finally, Respondent's proposal provided that the unfair labor practice charges/complaint regarding the janitorial employees then currently pending before the Board would be withdrawn. Crouch disagreed on the deletion of the Union's secu- rity and checkoff provisions; however, he did agree on the I-year wait for health and welfare contributions. Ad- ditionally, Crouch objected to the withdrawal of the unfair labor practice charges/complaint allegations as re- lating to the janitorial employees. The parties then brief- ly discussed the concept of maintenance membership and the cost of various life and health insurance plans. No resolution was reached with regard to Respondent's pro- posal and the parties agreed to meet again the following week. Regarding both the withdrawal of the unfair labor practice charges/complaint and the $3.03-an-hour pro- posed rate for experienced housepersons, Torgove testi- inspector ad housepersonls., respectively: $2 6h, $2 35 $2 8X. 2.55 and $3, $2.75 . Apparernlly , other high rise combinatioll office aid apartment citmplex was then i existcnce in the Denver area "; Crouch teslified tlat he did nor cnlsider the terms of the Executive Il wer's contract as relcant tI thre I rooks liowers' negoiation since the former'. contract 'Ais the first contracl on a lew huilding According CTrouch. a "contrlct i like a haby II growvs each time You build on what yu get and this being the first cnlracil it didn't have the goodies tha a contractl, an older contract, ould have" 7 Additionally, at this llceeilg the parties agreed that the Union would lnolt strike pCllel d g nlegotillati ls 760) BROOKS, INC 7 1 fled that these two proposals were interrelated. During this period of time, all parties were discussing, through counsel, possible settlement of the outstanding complaint. Suggestions were made by either the General Counsel or counsel for the Union to settle the matter on the basis of 80 percent of the backpay due the striking janitorial em- ployees by virtue of their unlawfully being denied rein- statement upon request. Torgove testified that Respond- ent could not afford a lump sum payment and as an alter- native offered as settlement to pay an extra 48-cent-an- hour increase in its wage proposal rate of $2.55 an hour to those striking employees who ultimately returned to work. This proposal was later rejected by the four em- ployees at a meeting they held with Crouch prior to the February 2 bargaining session. The employees apparently decided they would rather take their chances on eventu- ally receiving a lump sum payment ordered by the Board in lieu of the extra 48-cent-an-hour increase in wages. On January 12, the parties met for the fourth bargain- ing session. During the course of this meeting, the parties reached agreement on the following items in Respond- ent's January 7 proposal: The increase in the probation time, deletion of the three paid holidays, increase in the time necessary for the 3 weeks' vacation, limitation on jury duty, deletion of breaktime, contract length of I year, and a change in the job classifications from five separate classifications as set forth in the expired agree- ment to simply two job and pay classifications for house- persons-those with experience and those without. Items that were still unresolved by the conclusion of this meet- ing were union-security and checkoff provisions, Re- spondent's trust fund contributions, the pending NLRB charges/complaint, the management-rights clause, and wages. Respondent, again during this meeting, reviewed the subject of wages vis-a-vis its financial situation. During the course of this or one or the two prior January meet- ings, Respondent offered to open its books to the Union to verify its financial situation. Crouch declined and ex- plained at the hearing his reasons for failing to exercise this right as follows: I would consider that that would be a waste of time. It is very rare that I have negotiations with the company that don't cry poor mouth . . . just about every negotiation I have you know the com- pany contends that they are losing money and they are going broke. I had no reason to believe that Brooks Towers would be any different from any other employer especially based on the observation of the contractors that were coming into the build- ing, repairs that were being made on the building at that time it seemed to me that if they were that hard up they certainly wouldn't be spending that kind of money. " 'z Torgoe tetified that, during this period of time. Respondent u as repairing a nonoperative air-conditioning system at a cost orf $5(0,(X, cor- reeling the 'I V antenna at a cost (if a few thousand dollar, and perform- ing normal maintenance such a rcpair of appliances and pailling sacall apartmenls Additionally, Recpondelt nmay ha,e been repairing and redo ing the sidewalks at this linle Although Crouch at least in part based his belief that Respondent was not in financial trouble on the basis of the repairs that Respondent was then engaged in, he never at any time during negotiations raised this subject. The parties next met on January 15 for the fifth bar- gaining session at which time they discussed all outsltanld- ing issues except wages. Agreement was reached on a modified union-security checkoff clause (see subsec A above) and apparently Respondent's trust fund contribu- tions. On February 2, the parties met for the sixth and final time. Torgove ent through a schedule of wages re- ceived by janitors employed at five local building conl plexes including Executive ower. l: Based on the infor- mation Torgove obtained from these employers, lihe argued to the Union that the janitors employed by Re- spondent were the highest paid in the Denver area. Tor- gove cited that these other employers paid their janllitll- al employees wages ranging from $2.15 an hour to 2s55 an hour. "° Additionally. Torgove informed Crouch thui a major portion of Respondent's income camle front apartment rentals and that, therefore, Responldent v, as for all practical purposes an apartment house. Forgoc further stated that matny apartment houses were merel! paying the Federal minimum wage and that Responideint was offering something more than that. Crouch acknol I- edged to Torgove that local apartment houses were indeed paying the minimum wage for their janitors. At this February 2 meeting, the Federal mediator noted that the unfair labor practice hearing had alread been held. Respondent therefore withdrew its offer to settle the charges filed with respect to the janitors' rein- statement. Respondent then raised its outstanding wage offer from $2.55 an hour to either S2.60 or $2.70 an hour 2 plus the $62 a month health and welfare contribution for all janitors with more than 44 months' seniority. 2 2 After a union caucus, Crouch returned and made a counter- offer of $2.75 an hour for employees with 44 months' se- niority and $2.55 an hour for new employees. Crouch testified that, during the caucus with the four member employees, they indicated that they would accept whatever offer they could get from Respondent '" The other four employecrs ere three bank building,, anld .I Ilrg hotel he banks named were unorganized and the hotel .a, apparenitl organized by aeother labor organi/ation Z° Crouch testified that he preselnled l uring negotialions a career ser,- ice survey prepared by the Count of Den'er hich allegedll 5 ho cd that. of the approximalely 44 enploy crs included in the urc. the prr- vailing rate for janitors was $3 45 an hour Torgosle denied that Crouch during negotialions Aith the ailtors, ever presented a counlt ursey indicating a prevailing rate He did idlit thtll Crouch offered such a uirxe dluring the Iegotiationts for Ihe rnailc - nance employees In ati enl. Respondent argues that any such ursc would be insahlid since it ould inc-lude lanlitor, employedl h h, in- dustries such as packing horises I need nol rsols e this conflict III tie testinony and svill for the purpo,ses of this Decision treat Cro,u h', tesll- monly on this particular politn ill the light mol faorable tlo t f (iCniril Co unsel ' iorgovce initially letified hal Respondent rised thls fftr to 52 0( an hour Her. in his nexrl cten le he ited this figure ia, 2 i111 hour It is nolt lear hlich figure i, corrTcC All four of the rrtlailillg firmier mnpl(!ce' iho, Cr1nlpr lMc Ic Unilion's nieglatiron tinlal hald n rilre thani 44 nioniths' sllitor ROOKS, INC ifI 7(2 I).tECISI()NS ()F NATIONAl L.ABOR REI.ATI()NS )ARI) since they had already lost 3 months' wages, had been unable to get unemployment compensation, and could not afford to take another strike. Crouch testified that neither during this caucus nor in his previous discussions during meetings with the four employees was the subject of the Employer's financial condition ever discussed. While, as noted above, Crouch's memory regarding the negotiations was generally vague and imprecise, his testimony regarding the basis or rationale upon which employees explained to him why they would accept Re- spondent's proposals was quite clear and convincing. Ad- ditionally, it was entirely consistent with his earlier stated belief that Respondent was not facing a financial crisis. 2 Respondent accepted the Union's counterproposal and on February 17 the new l-year contract covering the period February I, 1976, to February 28, 1977, was ex- ecuted 24 fl. NAI YSIS ANI) CONCLUSIONS A. The Janitors' VNegoliations The General Counsel in essence contends that the newly discovered evidence establishes that Respondent did not bargain in good faith with the Union in the nego- tiations which ultimately led to the execution of the new collective-bargaining agreement for the janitorial em- ployees. Additionally, the General Counsel contends that this subsequent conduct constitutes further evidence of Respondent's bad faith in its prior dealings with the Union over the maintenance employees. Contrary to these contentions, I am not persuaded that the evidence regarding Respondent's conduct at the bargaining table from mid-November 1975 to mid-February 1976 estab- lishes any such bad faith. 25 Respondent from the very outset of the negotiations informed the Union of its precarious financial situation. That the specifics of this condition were explained in some detail on several occasions prior to the date agree- ment was reached is not in dispute. Respondent even of- fered the Union the opportunity to review its financial records to satisfy itself that Respondent was neither fa- bricating nor overstating the severe economic problems it faced. The Union did not avail itself of this opportunity to review Respondent's financial records. Additionally, no : ' fhis finding, of course, is il no way indicative that this belief was '"re.linahly" held in these circumstances. 24 lorgove lestilied that, prior to his meeting. Respondenl's resident manager inlformed him tihat the four janitors were doing all exceplioluall g (d iJoh and i recogliioln of their performance, Respondent agreed to the tIion'rls cunlerprioposal to raise the rate to $2.75 an hour 's In reaching this colncliusltn, I have excluded from cotsldelalion the tacli that Rspondelit unlawfully refused the janitors' alid unconditional iffer of reinlstallellt for smnie 3 1/2 months. ]The court, in remanlding ilth case fr the purpose of taking this new evidence, was fully cognizant i' Respondenll' prior refusal Moreoer. an even more drastic situaliton wa;s presented in the negotiationls with the maintenance employees where Respondent unlawfulls refused their unconditional offer to returni to work while those negotiations were in progress In iew of the above, anid ino finldirg,s and coTncIISIoims with regard to the issue of whether Re- spilnldent was ever hable on coninc the I.'rion hau its financial plighr justi- liid a a ug. ardutn blr ih/ junifor, I need notl reach the speci fic quest ion ol whether Resp<nlldenit' utilaiwful failure to reinstate the janitors affec ted is othlerwise good-falith negotiatiotns evidence was offered that at any time during the negotia- tions did the Union in any way indicate to Respondent that it questioned or disbelieved those financial represen- tations. Based on the record evidence, I have no alterna- tive but to find that Respondent, during the entire period of time material herein, was in fact int a severe financial condition. Respondent, in further support of its bargaining posi- tion seeking a reduction in the wages and benefits to be received in the new contract by the janitors, also cited to the Union the fact that other employers in the [)enver area paid their janitors wages either equal to or less than those it had offered at the third bargaining session on January 7. Included in this comparison group was the Executive Tower, a motel and office building complex adjacent to the Brooks Towers. The Union also repre- sented the employees there and that contract called for wage increases to $2.55 an hour as of December 175, the exact same figure contained in Respondent's initial offer here. Additionally, Respondent at the February 2 bargaining session argued and the Union acknowleged that area apartment complexes paid substantially lower rates than Respondent was offering. At the final bargain- ing session, Respondent raised its initial offer by either 5 or 6 cents an hour. After the Union caucused they coun- tered with an offer which would raise the wage rate for experienced personnel to $2.75 an hour. Respondent ac- cepted and the agreement was subsequently reduced to writing and executed. 2i Notwithstanding the above, the General Counsel argues that Respondent's treatment of the six new em- ployees hired during October 1975, when compared to its treatment of the returning employees, constitutes evi- dence of its bad-faith bargaining. In support of this argu- ment, the General Counsel contends that Respondent unilaterally ignored the terms and conditions of the still existing contract when it both initially set the wages for new employees and failed to enforce the union-security provisions of the contract as to them. Further, the Gen- eral Counsel argues that Respondent ignored "its plea of poverty" and rewarded the new nonunion employees by its failure to reduce their wages once the Union had agreed to exclude them from the new contract's cover- age. These contentions are simply not supported by the record. With regard to the issue of the wages paid to the six new employees, four of the six were paid the starting rate of $2.83 an hour as called for in the then existing contract for the classification of janitors; one was paid the starting rate of $2.93 an hour, the rate called for in the classification of lobby custodian; and, one, the father of the four janitors mentioned above, received a starting rate of $3.08 an hour, the contract's starting rate for "crew leader." Torgove testified without contradiction that the father was employed to generally oversee the work of his children. Therefore, contrary to the General =e Apparently little discussion took place at ant of the bargaining ses- sions regarding those features of Respondent's initial proposal which had the effect of reducing or polentiallN reducing the benefit package the em- ployees would recive Respoindel pripoise d td the Unionil apparentl', readily Icccpted these lmodifications BR)O(KS INC. 7h, Counsel's naked assertion, Respondent did not unilateral- 1y set the terms of employment of its new employees but instead applied to them the wage provisions of the the n existing contract. With regard to Respondent's compliance with the union-security provisions of the contract, the General Counsel cited no authority and I am aware of none for the proposition that an employer has a statutory duty, absent a valid request, to notify the bargaining repre- sentative when new bargaining unit employees are either hired or when they complete their initial 30 days of em- ploymetl. 'I7 Finally, as to the General Counsel's contention, that Respondent's bad-faith bargaining is further demonstrat- ed by its generous behavior to these new employees as evidenced by its failure to subsequently reduce their wages, it is likewise without merit. Respondent justified not reducing the new employees' wages on the grounds that they, contrary to the bargaining unit employees, did not receive the $62-a-month fringe benefits provided for in the contract. When one adds the hourly rate of the fringe benefits to the hourly rate received under the new, contract, the janitors covered by the union contract, in fact, received compensation at a higher rate than did the new employees. In this context, I do not find that Re- spondent's failure to reduce the wages received by the nonunion employees was an unreasonable business deci- sion which adversely reflected upon its overall good faith in dealing Hwith the Union at the bargaining table over the janitorial employees. To summarize the above, the newly discovered evi- dence establishes that Respondent, in the negotiations over the janitors, took a bargaining position similar to that previously taken in the negotiations concerning the maintenance employees. By maintaining this strategy, Respondent was ultimately successful in reaching an agreement with the Union for a new collective-bargain- ing agreement which provided for a substantially lower economic package than previously enjoyed by the jani- tors. Further, the record before me does not demonstrate that Respondent adopted and maintained its bargaining strategy for other than legitimate business considerations occasioned by its severe financial condition. Likewise, :7 Crouch testified that he was at all times during the negotiations un- aware of the elustence of the new janitors and believed that the four re- lurting strikers comprised Respondent's entire anitorial work force How Crouch could have reasonabl held such a belief is puzzling ndeed First, Crouch was aware that prior to the trike Respondent employed 10 janitors Second. Crouch admitted that, at some point prior to the Octo- her reinstatement, Respondent unsuccessfully sought his aid in recruiting or securing additional individual, to replace the nonreturning strikers Therefore. Crouch would have had to: ha e known, had he gis en the mailer the slightest thought. that Respondenrt must ha e hired additional employest I perform janlitorial work Yet. at no time did he seek tic find out this infornatiol In these circumslances, the fact that the union-,ecu- rllt ad checkoff pro.,isiins of the old contralt were not applied o the six new employees is attributable to Crouch's self-induced ignorance arid not to any miscol)nduct on the part (,f Respondent That Respondent did not somehouw mislead the Union is to these ne', employees' existence is further confirmed by the fact tIha Respondeclt specifically proposed the exclusion of the working foremen and all jlarllo- rial employecs performinlltg exclustr el i commercial areas from the rle Coltract Crouch. orl behalf l o te ion, agreedL t these proposl.s t 1s unrealistic to beliets that (riouch did so btche.irig that tIhere t crc ro such emplo>ee',s tien ctploed Respondent's treatnlent of its new lonultlionl employees vis-a-eis its returning strikers does not demonstrate a dis- criminalory or antiunioni motivatlion. B. EJJ'ct of the Janitors' Negotiols on Mirlitenocc ,N'egoua tiol. Reaching this conclusion does niot by itself relie\e me of further responsibility with regard to the underlying question of whether Respondent violated Section 8(a)(5) in its bargaining over the maintenance employees, The court clearly stated that the new evidence would have a great bearing on the question of Respondent's good faith. However, the court did not hold that a resolution favor- able to Respondent with respect to the janitors' bargain- ing would compel the Board to reverse its findings and conclusions on the ultimate question. I interpret the court's holding as merely instructing the Board to fully and carefully reconsider the evidence of the niegotiations with the Union over the maintenance employees in light of this new evidence. In any event, it is respectfully submitted that the pre- ferred evidence does not factually hase the effect the court assumed it would have. The court, in considering the import of the evidence as contained in Respondent's offer of proof, assumed that, by virtue of the Union's ultimate agreement to a contract which provided for a substanltial age aid benefit reduction, the Union had thereby been conlvinced that Respondent's economic plight justified such relief The weight of the evidence does not bear out this s- sumption. Crouch. the Union's business manager and chief nego- tiator, testified that at no time did he accept or believe that Respondent in fact faced a serious financial condi- tion. e, in effect, ignored Respondent's representations in this matter, as well as the offer to review its records, as so much bargaining posturing by an employer , ho had successfully withstood a strike. Instead, Crouch arltl apparently the four members of the bargaining coninit- tee chose to rely on their on observationls that Re- spondent was spending considerable amounts of io(lnce in the repair and renovation of the complex. The ax isdoi or the reasonableness of Crouch's belief is niot the issue, merely the fact that such a belief was held and apparent- ly shared by the employees. In accepting Respondenlt's eventual proposal of S2.75 an hour, the employees were apparently motivatecl niot by a realization that Respond- ent could not pay nmore hut by a realization that Respond- ent would not pay more. As discussed above, the record evidence demonstrates that Respondent asserted in good faith its economic pro- posals when dealing with the Union over the janitors. Applying the law of the case and ascribing this same mo- tivation to Respondent in its negotiations with the Unrion over the maintenance employees does not, conltrar to Respondent's contention, legitinmatize its ciduct at the bargaining table. At the same time that bargaining oer the maintenance employees as taking platce, Respond- ent was comlilrtting ctserious uifaill labor practice, , hichl directly ill tlpecl cdl a I 'lll'llt lis anttlT hair- gaiing. In this egard. Rspullett a hild arlter l threat- ROKS. INC. Th3 764 I)FCISIONS ()OF NA'II()NAL LABOR RELATIIONS BOARD ened that an employee who went on strike would never work again for Respondent. (2) initially engaged in dila- tory behavior and then outrightly refused to bargain for a 5-day period, (3) threatened to file a groundless decer- tification petition at the same time it eventually agreed to commence bargaining, and (4) imposed unlawful condi- tions on the reinstatement of unfair labor practice strik- ers. In the following discussion I will focus only on the issue of Respondent's refusal to reinstate the striking maintenance employees during the bargaining except on the condition that the Union agree to a contract accept- able to Respondent. Respondent contends that this con- duct was justified by the economic dilemma it was facing. While this economic situation may have been so serious as to justify its proposing a reduction in wages, no evidence was offered which would establish that Re- spondent had such a compelling and immediate econom- ic necessity that would justify its continuing refusal during negotiations to reinstate the entire bargaining unit except on its own terms. The Board, in its initial Decision in this matter, 228 NLRB 1365, 1368, fn. 16, stated: Respondent's recourse was, of course, to attempt to get the Union, at the bargaining table, to agree to reduced wages for unit employees and, failing that, to bargain in good faith to impasse at which point it could lawfully institute those wage rates last offered the Union as a good-faith basis for settlement. In its brief to the court, Respondent answers the Board and argues: This solution ignores the realities of the situation as it existed at that time. To bring the maintenance workers back at a salary level higher than the em- ployer could continuously maintain without any in- dication that the Union would agree to any wage reduction (resulting in the employer being forced to implement a wage reduction without agreement) could very well have engendered bitterness and consequent action on the part of these persons in- cluding returning to the picket lines and disruptive conduct in the building itself. To require this kind of useless and potentially dangerous act is contrary to common sense and the National Labor Relations Act. Respondent's scenario is highly speculative and smacks of unwarranted crystal ball gazing. It is at least as likely that the maintenance employees, observing the apparent ease with which Respondent secured temporary replace- ments at reduced wages to fill in during the strike, would have, as in the case of the janitorial employees 8 months later, eventually reached an agreement mutually accept- able to all. From this vantage point of time, one can only speculate as to what would have happened had Respond- ent met its statutory duty. Any doubts in this area must be resolved against Respondent who was the party whose conduct created the situation. Carrying Respondent's arguments one step further, one could imagine that an employer faced with a similar fi- nancial situation could merely assume that its employees would never accept a wage reduction and, rather than waste the time in fruitless negotiations that would inevi- tably lead to an impasse, simply chose to shortcut this "useless and potentially dangerous" procedure by dis- charging its employees and replacing them with individ- uals willing to work at lesser rates. Mr. Justice Stewart's concurring opinion in Fiberboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, 224-225 (1964), is instructive here: Analytically, this case is not far from that which would be presented if the employer had merely dis- charged all its employees and replaced them with other workers willing to work on the same job in the same plant without the various fringe benefits so costly to the company. While such a situation might well be considered a Section 8(a)(3) violation upon a finding that the employer discriminated against the discharged employees because of their union af- filiation, it would be equally possible to regard the employer's action as a unilateral act frustrating nego- tiation on the underlying questions of work scheduling and renumeretion, and so an evasion of its duty to bar- gain on these questions, which are concededly sub- ject to compulsory collective bargaining. [Emphasis supplied.] In the case at bar, Respondent knew that, to reach an agreement acceptable to it, it would have the difficult task of convincing the Union to accept a substantial re- duction in wages and benefits. When the employees struck and later offered to return, Respondent was given the tool it thought it needed to obtain a favorable con- tract. Respondent seized upon the fact that the entire bargaining unit was in essence on an involuntary strike as its edge in the negotiations. Continued bargaining while Respondent operated at a lower cost by the use of tem- porary replacements would have the natural consequence of unfairly strengthening Respondent's bargaining posi- tion with the concomitant loss of bargaining power by the Union. In these circumstances, no meaningful bar- gaining over wages was possible so long as the reinstate- ment of the unfair labor practice strikers was used as a bargaining bait by Respondent to force acceptance of its terms. Florida-Texas Freight, Inc., 203 NLRB 509, 510 (1973), enfd. 489 F.2d 1275 (6th Cir. 1974). It follows therefore that no good-faith impasse could exist since the breakdown in the negotiations was at least in part attrib- utable to Respondent's unlawful conduct in failing to re- store the status quo ante. See Wayne's Olive Knoll Farms, Inc., d/b/a Wayne's Dairy, 223 NLRB 260, 265 (1976). In light of the above and based on the record as a whole, I conclude that a valid impasse in the mainte- nance negotiations did not exist and that Respondent's conduct in treating the Union's rejection of its "final offer" as a revocation of its earlier unconditional offer to return to work was without merit. BROOKS, INC 7t5 Recommended Order I recommend that the Board reaffirm its findings and conclusions with regard to the bargaining over the main- tenance employees and the appropriate remedy ordered therein.