HBC Management Services, Inc.

National Labor Relations Board - Administrative Judge Opinions

Feb 1, 2019

05-CA-219166 (N.L.R.B. Feb. 1, 2019)

JD–15–19
Washington, D.C.
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
HBC MANAGEMENT SERVICES, INC.
and Case 05– CA–219166
NATIONAL UNION, UNITED SECURITY &
POLICE OFFICERS OF AMERICA
Brendan Keough, Esq., for the General Counsel.
Brad S. Miller, Esq. (Cooper & Miller, LLC),
Philadelphia, PA, for the Respondent.
DECISION
STATEMENT OF THE CASE
MICHAEL A. ROSAS, Administrative Law Judge. This case was tried in Washington,
D.C. on December 10, 2018. The complaint alleges that, since January 23, 2018, HBC
Management Services, Inc. (the Company or Respondent) has failed and refused to bargain
collectively with the National Union, United Security & Police Officers of America (the Union
or Charging Party) over wage rate increases in violation of Section 8(a)(5) and (1) of the
National Labor Relations Act (the Act).1 The Company denies the allegations and argues in the
alternative that any violation on its part for failing to bargain is precluded by the Union’s own
bad faith failure to bargain.
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel and the Company, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Company, a corporation, has been engaged in providing security, janitorial and
grounds-keeping services, including security services to the United States Department of the
Navy (the Navy) at the Washington Navy Yard Naval Sea Systems Command (NAVSEA) and
Military Sealift Command (MSC) in Washington, D.C. The Company, which also performs
services annually valued more than $50,000 in states other than the District of Columbia, admits,
and I find, that it is an employer engaged in commerce within the meaning of Section 2(2), (6),

1 29 U.S.C. § 151 et seq.
JD–15–19
Washington, D.C.
2
and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5)
of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
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A. The Company’s Operations
The Company, a division of the Hana Group, maintains offices in Honolulu, Hawaii,
Wayne, Pennsylvania and Alexandria, Virginia. Irwin Cockett, the Company’s president, is
based in Honolulu. Bradley Cooper, the chief operating officer, is based in Wayne, 10
Pennsylvania. Ursula Quan is director of human resources. From December 2017 until late
January 2018, Clifton Metaxa was director of operations. Charles Carroll and Chris Taylor
served for a portion of the relevant period as project managers at the Washington Navy Yard site.
All were agents and/or agents within the meaning of Sections 2(11) and 2(13) of the Act.
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B. The Company’s Contract with the Navy
1. Scope of the Contract
At issue is the Company’s service contract with the Navy in which it provides 20
approximately forty armed and unarmed security guards at the Washington D.C. Navy Yard (the
Navy contract). The Company won the contract by competitive bid in 2015. James Waite has
been the Navy’s contracting officer during the term of the Navy contract. Although formal
notifications were sent to Cockett, Cooper was responsible for the administration of the contract.
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The Navy contract is a one-year base contract with four option years beginning on
February 1 of each year at the Navy’s discretion. As a contractor providing services to the
federal government in an amount exceeding $2,500, the Company is subject to the Service
Contract Act (the SCA). The SCA mandates that federal government service contractors pay
their employees, at a minimum, a wage rate established by the Department of Labor (DOL). The 30
SCA does not, however, establish a maximum wage rate a contractor can pay its employees, nor
does it require the federal government to reimburse a contractor for an agreed to wage rate
arrived at through collective-bargaining. In circumstances where the wage rate negotiated
through collective-bargaining is greater than the minimum set by the DOL, that wage rate
replaces the minimum wage rate, provided the agency deems the wage rate reasonable.35
2. Applicable Federal Acquisition Regulations
As a service contractor doing business with the federal government, the Company is also
subject to Federal Acquisition Regulations (FAR) which provide guidelines for contractors 40
seeking modifications to current contracts, including wage modifications. FAR 22.1012-2,
Wage Determinations Based on Collective Bargaining Agreements, states, in pertinent part:
2. (b) For contractual actions other than sealed bidding, a new or changed collective
bargaining agreement shall not be effective under 41 U.S.C. 6707(c) if notice of the terms 45
of the new or changed collective bargaining agreement is received by the contracting
agency after award of a successor contract or a modification as specified in 22.1007(b),
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provided that the contract start of performance is within 30 days of the award of the
contract or of the specified modification. If the contract does not specify a start of
performance date which is within 30 days of the award of the contract or of the specified
modification, or if contract performance does not commence within 30 days of the award
of the contract or of the specified modification, any notice of the terms of a new or 5
changed collective bargaining agreement received by the agency not less than 10 days
before commencement of the work shall be effective for purposes of the successor
contract under 41 U.S.C. 6707(c).
3. (c) The limitations in paragraphs (a) and (b) of this subsection shall apply only if timely10
notification required in 22.1010 has been given.
4. (d) If the contracting officer has submitted an e98 to Department of Labor requesting a
wage determination based on a collective bargaining agreement and has not received a
response from the Department of Labor within 10 days, the contracting officer shall 15
contact the Wage and Hour Division by telephone to determine when the wage
determination can be expected. (The telephone number is provided on the e98 website.)
If the Department of Labor is unable to provide the wage determination by the latest date
needed to maintain the acquisition schedule, the contracting officer shall incorporate the
collective bargaining agreement itself in a solicitation or other contract action (e.g., 20
exercise of option) and include a wage determination referencing that collective
bargaining agreement created by use of the WDOL website (see 22.1008-1 (d)(2)).
Section 22.1010, “Notification to interested parties under collective bargaining
agreements” states in full:25
1. (a) The contracting officer should determine whether the incumbent prime contractor's or
its subcontractors' service employees performing on the current contract are represented
by a collective bargaining agent. If there is a collective bargaining agent, the contracting
officer shall give both the incumbent contractor and its employees' collective bargaining 30
agent written notification of –
a. (1) The forthcoming successor contract and the applicable acquisition dates
(issuance of solicitation, opening of bids, commencement of negotiations, award
of contract, or start of performance, as the case may be); or35
b. (2) The forthcoming contract modification and applicable acquisition dates
(exercise of option, extension of contract, change in scope, or start of
performance, as the case may be); or
40
c. (3) The forthcoming multiple year contract anniversary date (annual
anniversary date or biennial date, as the case may be).
2. (b) This written notification must be given at least 30 days in advance of the earliest
applicable acquisition date or the applicable annual or biennial anniversary date in order 45
for the time-of receipt limitations in paragraphs 22.1012-2(a) and (b) to apply. The
contracting officer shall retain a copy of the notification in the contract file.
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C. The Collective Bargaining Agreement
A portion of the Company’s security guards at the Navy Yard have been represented by
the Union for the purposes of collective-bargaining since the inception of the Navy contract in 5
2015. Since then, the parties have negotiated a collective-bargaining agreement in which the
Company has recognized the Union as the exclusive representative of the following employees
who constitute a unit appropriate for the purposes of collective-bargaining within the meaning of
Section 9(b) of the Act (the unit):
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All full-time and regular part-time security officers employed by the Employer at the
Washington Navy Yard NAVSEA and Military Sealift Command (MSC).
Excluded: All security officers holding the rank of lieutenant and above; and Project
Managers, Assistant Project Managers and Site Managers; all Officers and Directors of 15
the Employer; all nonsecurity employees; all office, plant, and facility clerical
employees; all other employees; all managerial employees, all confidential employees
and all supervisors as defined in the Act.
The CBA is effective from January 9, 2017 through January 31, 2020. Ishun Richards is 20
the Union’s national vice president and chief negotiator. ShaDawn Prince serves as the Union’s
executive director. Prior to the execution of the CBA, Richards and Metaxa or Cooper
communicated by email and telephone in December 2016 and January 2017. It was not until
January 9, 2017 when Waite, the Navy’s contracting officer, imposed a sudden deadline on the
parties to finalize the agreement by the end of the day. At that time, it took the parties 25
approximately six hours to negotiate the current wage rate identified in Appendix A of the CBA.
Given the hurried circumstances, however, Richards sought and Cooper agreed to include
language enabling the Union to pursue wage increases in the option years:
Pursuant to a prior Adoption and Extension of Collective Bargaining Agreement between 30
these parties, the parties have earlier agreed to meet to bargain over potential increased
rates for Wages that would go into effect on February 1, 2018 and February 1, 2019; or
alternatively, to bargain over wage reopener provisions relating to those respective dates.2
The CBA provisions at issue in this case relate employees’ wages (Article XXVI), 35
pensions (Article XXV) and health and welfare benefits (Article XXIV) state as follows:
WAGES
Effective February 1, 2017 $25.82/hour40

2 Apparently referring to other contracts, Cooper testified that negotiated wage increases were always
tied to the “beginning of an option period” because of the SCA’s mandate that wages in approved
collective-bargaining agreements become the wage determination. (Tr. 92-93.) Richards, however,
provided credible and undisputed testimony that the parties had no separate agreements that wage
negotiations had to be completed before the beginning of an option year. (Tr. 22, 29.)
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Pursuant to a prior Adoption and Extension of Collective Bargaining Agreement between these
parties, the parties have earlier agreed to meet to bargain over potential increased rates for Wages
that would go into effect on February 1, 2018 and February 1, 2019; or alternatively, to bargain
over wage reopener provisions relating to those respective dates.
5
HEALTH AND WELFARE
Effective February 1, 2017 $4.85/hour
Pursuant to a prior Adoption and Extension of Collective Bargaining Agreement between these10
parties, the parties have earlier agreed to meet to bargain over potential increased rates for Health
and Welfare that would go into effect on February 1, 2018 and February 1, 2019; or
alternatively, to bargain over wage reopener provisions relating to those respective dates.
PENSION15
Effective February 1, 2017 $1.25/ hour
Pursuant to a prior Adoption and Extension of Collective Bargaining Agreement between these
parties, the parties have earlier agreed to meet to bargain over potential increased rates for 20
Pension that would go into effect on February 1, 2018 and February 1, 2019; or alternatively, to
bargain over wage reopener provisions relating to those respective dates.
D. Union Seeks to Bargain over Wage Rate Increase
25
Given that the third option year in the Navy contract was scheduled to begin on February
1, 2018, Richards assumed that any proposed changes to employee compensation needed to be
submitted to the Navy prior thereto. Recalling the Navy contracting officer’s initial insistence
during the previous year that the parties conclude bargaining by a certain date, Richards emailed
Metaxa and Taylor on December 8, 2017 requesting that the Company bargain collectively about 30
wage rate increases pursuant to Appendix A of the CBA:
Good morning all, The Union would like to request to bargain for the members of the
Washington Navy Yard. This is in reference to the economic re-openers agreed to in the
last CBA. There are also language issues that the Union would like to address also. These 35
language proposals will be submitted soon. The Union is aware of the need to complete
negotiations by December 31, 2017 per the Contracting Officer.
On December 11, Dian Lloyd, a Navy contract specialist, emailed Cockett on behalf of
the Company a copy of the Preliminary Notice for Option Year 3. Cockett forwarded that form 40
to Cooper on December 12 for “FYI and action.” Neither Richards nor anyone else on behalf of
the Union was copied on that email or otherwise provided with a copy of the Navy’s notice.3
On December 13, Metaxa replied to Richards’ email but omitted any reference to the Navy’s
notice regarding Option Year 3 and downplayed the notion of a deadline:
45

3 Waite apologized to Richards for that “oversight” on November 27, 2018. (GC Exh. 4; Tr. 52-53.)
JD–15–19
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lshun, Greetings. I do not know if you've heard, but Chris Taylor no longer works for
HBC Management Services. He accepted a position with the government. I am filling in
as the PM until we hire someone for the position. I will be your POC for these
negotiations. Thank you for the email concerning the Navy Yard CBA. Yes, please send
me your economic and language proposal ASAP. We need to stay focused on getting this 5
done before the upcoming option year. Incidentally, I am not aware of a December 31st
deadline you refer to in your email. Please elaborate. Thank you.
On December 19, Cooper emailed the Preliminary Notice for Option Year 3 form to
Metaxa and Quan with the following instructions:10
[Ursula], please see the attached notice to exercise Option 3 of our RSGS contract. Note
the comment regarding our VETS 4211. This needs to be done before they can exercise
the option, and once filed, we need to inform the contracting office. Can you kindly keep
me updated? Tx.15
Cliff, you need to complete the attachment, as follows: Check the second and third boxes.
The second box is in respect of the ongoing negotiations with CBD union. The third box
is for the Navy Yard. Include a copy, but make a notation that the union has requested a
reopener on wages.4
20
E. The Union Submits its Wage Proposal
There was no communication over the next month between the Company and the Union.
In December 2017, however, Richards, Cooper and Metaxa were already engaged in protracted
wage negotiations concerning the security guard contracts at another agency. During those 25
negotiations, Cooper requested that Richards substantiate the Union’s wage proposals with
information from comparable security contracts. That requirement was rooted in the federal
government’s need for substantiation of proposed wage determinations exceeding set minimum
wage rates.
30
Between December 2017 and January 19, 2018, Richards attempted to obtain comparable
wage information from security contractors at other Navy or military sites but was unsuccessful
due to national security concerns. He ultimately generated a 3% wage increase proposal based
on the 2.4% wage increase granted to the United States uniformed services, plus .6% to account
for risk factors inherent in securing the Navy Yard.535
In the interim, on January 17, the Navy sent Cooper an Amendment of
Solicitation/Modification of Contract with the cumulative contract price increased to an
undisclosed amount but incorporating and continuing the initial CBA terms.6 The Union was not
copied on that correspondence. Without notifying the Union or including a statement that the 40

4 A copy of the completed form returned to the Navy was not offered into evidence, so there is no
proof that Metaxa submitted it with a notation that the Union requested a reopener on wages. (Jt. Exh. 5.)
5 Richards’ credible testimony regarding Cooper’s demand for comparable wage information, as well
as his efforts to produce such information was corroborated by Cooper. (Tr. 19-20, 33, 61-62, 93-94.)
6 The total contract price was redacted from the exhibit.
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Union had requested bargaining over the wage reopener, Cooper signed and returned the form to
the Navy on January 18.7
Two days later, at 6:50 p.m. on January 19, Richards emailed Metaxa, Cooper and
Charles Carroll attaching the Union’s proposal and outlining it as follows:5
1 was referring to your original email last year asking for them to be closed by the end of
the year. Attached is the Union proposal for the WNY Contract.
The 3% wage increase is based upon the raise the Uniformed Service members received
for 2018, 2.4% and the fact that the proposed improvements to security since the deadly 10
shooting in 2013 have yet to be completed and leave the employees still exposed to the
act repeating itself[.]
The Union is asking for an increase in the amount of personnel allowed to take leave at
any one time. It has come to the [Union’s] attention that the 5% number is insufficient for
the amount of personnel assigned to the contract. Also the way how vacation is 15
distributed for the most preferred dates of vacation, Independence Day, Thanksgiving,
Christmas Day and New [Year’s] Day has been a point of contention on the site so
different" language has been proposed to help resolve the situation.
Sick leave. The Presidential order mandates for 7 days of leave to be granted per year.
This contract is not yet eligible for that benefit. Thinking of the benefit of the employees 20
and the need of a softer transition for the company, the Union proposes to raise the sick
days to six (6) from five (5) for the upcoming year.
The detailed proposal was attached to Richards’ email as “Appendix A, Economic
Provisions USPOA/Hana Management, 2-28-2018.” It contained a wage increase proposal chart, 25
with an “Effective” date of “2-28-2018” proposing to increase unit employees’ hourly wage rates
from $25.82 to $26.59.8
On January 22, instead of responding to the Union, the Company decided to strategize
over the issue of how to tell the Union that it was too late to bargain over a wage increase for the30
period commencing on February 1. At 7:51 a.m., Metaxa emailed Cooper, “[c]hecking with you
before I respond that they missed the deadline for a wage adjustment for this option year. How
do you want to handle?” At 9:40 a.m., instead of immediately reaching out to Richards, Cooper
asked Metaxa for “timeline of communications” other than those contained in the email chain
provided between December 8 and January 19:35

7 Cooper assumed the Union would have been aware of the FAR regulations but conceded that there
was still time to negotiate until January 22. (Tr. 92-93, 122-24; Jt. Exh. 6.) However, his testimony that
he lacked any prior knowledge of the FAR requirement that the Union be notified of the Navy’s exercise
of the 2018 option year is simply not credible as the FAR provision that the Company relies on –
22.1012-2 – expressly refers to the union notice requirement at 22.1010. (Tr. 128-30.)
8 The Company’s answer averred that the Union’s reference to the wrong date rendered the proposal
“outside the scope of the referenced wage re-opener and therefore waived any further bargaining on that
provision.” Richards’ January 19 email, Cooper’s testimony and the Company’s position statement
eliminate any doubt that the Company understood Richards’ proposal to refer to the CBA’s reopener “for
[w]ages that would go into effect on February 1, 2018.” (Tr. 105-106, 112, 126; GC Exh. 2, 7.)
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We are past the deadline to incorporate any increases for the next option period, even if
we wanted to. We should continue discussions, but any economic change will not take
effect until 2019. Has HR done an updated wage survey? Depending on where we are in
what we are willing to do, that will dictate our response.9
5
Over five hours later, at 2:57 p.m., Metaxa replied that the “entire email thread is below.
They have been quiet all year until December 8th. Then nothing until this past Friday evening
[January 19].” About an hour later, Cooper replied, “[t]hat is what I thought. Any updated
survey on wages . . . or should I get HR going?” Metaxa replied that there had been no recent
surveys. Cooper replied, “I'll get HR moving. In the meantime, respond back to Ishun and 10
simply say you are in receipt of his email and we will respond shortly. CC me and Chuck. At
some point near (perhaps the next email to him), I . . . take over the communication. Cooper also
emailed Quan asking, “this one is for the Navy Yard. Will your recent update for Sam's DHS-
DC project suffice? Quan replied that “it should be fine.”
15
Metaxa wrapped up the exchange with Cooper at 4:02 p.m. by assuring him that he
would reply to Richards as directed. Rather than email Richards immediately, however, Metaxa
slow-walked a response to the following morning when he informed Richards that “[w]e are in
receipt of this email and will respond shortly. Thank you.”
20
Richards responded on February 6, 2018 that “[t]he Union is still awaiting a counter to
the last proposal.” Cooper replied a few minutes later that “Cliff no longer works for Hana. Mr.
Charles Carroll is the new PM for this project. We will be responding to your proposal.”
The Company pondered its response over the next several days. On February 6, Carroll 25
emailed Cooper, asking, “when would you like to discuss? Cooper replied that “I need to
organize first, Chuck. What is important to note is that the window for us to submit to the Navy
an adjustment based on increased CBA wages is gone. We, therefore can't agree to an increase
in the current option year. As soon as I get organized, I'll walk you through how we handle
these. I may have our outside counsel serve as lead negotiator. Ishun has proven to be difficult 30
to deal with, and he is likely to file an NLRB complaint. Carroll replied that he “[u]nderstood,
and asked, “[w]eren't they supposed to submit their proposal in December or January to meet the
contract option time line?
Despite Cooper’s assurance to respond, the Company has never responded to the Union’s 35
January 19 wage proposal and, on April 25, 2018, the Union filed unfair labor practice charges.10

9 Cooper, without further explanation, conceded on cross-examination that he “could have”
negotiated with the Union on January 22 and “could have” told Waite that the parties were still in the
process of negotiating wages, but chose not to. (Tr. 122-24.)
10 Regardless as to whether the charge was filed on March 6 or April 25, Cooper’s conceded that the
Company never intended to reply to the Union’s January 19 proposal. (Tr. 40, 70, 112-13, 125-26.)
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LEGAL ANALYSIS
The complaint alleges that the Company has violated Section 8(a)(5) and (1) of the Act
since January 23, 2018 by failing and refusing to bargain in good faith over wages pursuant to a
re-opener provision in the CBA. In support of the allegation, the General Counsel refers to the 5
Company’s failure, notwithstanding its promise on two occasions, to respond to the Union’s
January 19 proposal to bargain over wage increases.
The Company denies the allegation, asserting that it promptly responded to the Union’s
December 8 request to bargain by requesting a proposal “ASAP.” It further contends that the 10
Union’s bad faith delay in submitting a proposal over five weeks later and just three days prior to
the FAR ten-day deadline negated the Company’s duty to bargain. Finally, it asserts that the
length of the delay, which it considers to be six-weeks, is insufficient in the absence of other
wrongful conduct to make out a Section 8(a)(5) or (1) violation.
15
A. The Duty to Bargain
Section 8(d) obligates an employer to bargain in good faith with its employees’
representatives regarding “[w]ages, hours, and other terms and conditions of employment.” The
refusal to bargain collectively and good faith over such mandatory subjects of collective
bargaining violates Section 8(a)(5) and (1) of the Act. The employer’s duty to bargain in good 20
faith also applies to re-opener provisions in a collective bargaining agreement, a provision often
utilized by parties to reserve subjects of bargaining for future negotiation. See Speedrack, Inc.,
293 NLRB 1054 (1989) (“parties to a collective bargaining agreement can, by mutual consent,
include a reopener provision in the contract, by which they agree to open up specified subjects
for bargaining before the expiration date of the contract.”). 25
On December 8, the Union initiated the bargaining process over a wage increase to take
effect in February 2018. The Company responded by requesting a proposal as soon as possible.
Over the next five weeks, Richards, the Union’s negotiator, unsuccessfully searched for
comparable wages in order to generate a proposal. He engaged in such an effort because he 30
knew that the Company required justification for proposed wage rates. Richards finally
submitted a proposal to Cooper and Metaxa on January 19. Cooper and Metaxa discussed a
response on January 22, which was ten days prior to the start of the option year. They had
already decided, however, that they would not continue bargaining over a wage increase due to
the timing of Richard’s proposal. Rather than communicate that position to Richards on January 35
22, Cooper told Metaxa to simply inform the Union that the Company would “respond shortly.”
Metaxa then slow-walked that response to the next day, January 23, or nine days prior to the start
of the option year. Richards followed-up on February 6, stating that he was waiting for a
“counter to the last proposal.” A short while later, Cooper replied that Metaxa was gone,
mentioned his replacement and, once again, said that they “would be responding to your 40
proposal.” The Company, however, never did, and the Union filed an unfair labor practice
charge on March 6, which it refiled on April 25.
The duty to bargain in good faith requires that both parties have a “sincere purpose to
find a basis of agreement.” Health Care Serv. Group, 331 NLRB 333, 335 (2000). As a 45
threshold matter, the Company asserts that the Union’s over five-week delay in responding to its
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December 13 request for a proposal “ASAP” constituted bad faith, excused the Company from
further bargaining and precludes a finding of bad faith on its part.
The test for bad faith is one that involves looking at the totality of the circumstances, and
each case must turn on its own facts. NLRB v. Truitt Mfg. Co., 351 US 149, 153-54 (1956). In 5
determining whether a party breached its obligation, the Board considers whether a party’s
behavior, under the circumstances, reveals an intention to frustrate the bargaining process. See
Calex Corp., 322 NLRB 977, 987 (1997) (employer breached its duty to bargain by insisting on
once-a-month meetings when such insistence was motivated by “purposeful delay” and a goal
“not to reach an agreement with the Union”).10
Here, the evidence does not support a conclusion that the Union sought to frustrate the
bargaining process. The Union’s five-week delay was driven not by a desire to impede
bargaining, but by Richards’ attempts to obtain information from comparable security contracts
to substantiate the Union’s wage proposals – a condition known to be required by Cooper due to 15
government regulations requiring proof that the proposed rates were reasonable. During that
time, Richards was also involved in contentious bargaining with the Company on another
government contract in the Washington, D.C. area. Moreover, Richards’ experience from the
previous year, when Waite pressured the parties to arrive at an agreement in one day, eliminated
any incentive for Richards to delay producing a proposal. Due to the hurried circumstances at 20
the time, the Union reluctantly agreed to a lower wage rate than originally sought but succeeded
in including a wage reopener for future years.
Under the circumstances, there was simply no strategic benefit for Richards to
intentionally delay. See Crane Co., 244 NLRB 103, 112 (1979) (employer breached its duty to 25
bargain because it “evidenced a desire to procrastinate.”). Cf. New Brunswick General Sheet
Metal Works, 326 NLRB 915 (1998) (employer was excused from its bargaining obligations
where the union refused to negotiate in the presence of the company’s attorney); Louisiana Dock
Co. 293 NLRB 233, 235–36 (1989) (employers were released from their duty to negotiate over
mandatory subjects of bargaining when a union conditioned bargaining on employers’ 30
acceptance of an improper multilocation bargaining unit).
B. The FAR Notice Requirements
Pursuant to FAR 22.1012-2(b), federal service contractors are required to provide notice 35
of any modifications to their collective bargaining agreements to the agency at least ten days
before “commencement of the work” for the changes to be effective. The regulation further
states in the very next paragraph at 3(c), however, that such limitations “shall apply only if
timely notification required in 22.1010 has been given.” Conversely, Section 22.1010(b) states
that for the limitations in paragraph 22.1012-2(b) to apply, the contracting officer must notify the 40
employees’ collective bargaining agent in writing of, inter alia, the exercise of a contract option
at least thirty days before the option is exercised.
The CBA was incorporated by reference into the Navy contract. On December 11, 2017,
a Navy contract specialist notified the Company that the government was exercising its third-45
year option under the contract. The Navy neglected, however, to provide similar notification to
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the Union as required in FAR 22.1010 and 22.1012-2,11 This oversight negated the 10-day
regulatory deadline that served as the basis of the Company’s failure to bargain since the
applicability of FAR 22.1012-2 was, by its terms, conditioned on notice to the Union. Although
there is no evidence that Cooper knew that the Navy failed to notify the Union of the option year
renewal pursuant to FAR 22.1012-3(c) and 22.1010(b), these provisions factored into the 5
bargaining process because of what the Company failed to do. The Company abandoned the
bargaining process by promising responses to the Union’s proposal that never came. Had the
Company responded on January 22 or soon thereafter by communicating its position that the
Union’s proposal was untimely because of the ten-day notice requirement, the Union would have
been put on notice that the Company was relying on FAR 22.1012-2(b). Upon becoming 10
apprised that the Company was relying on that provision, the Union would have realized, as
Richards did in reaching out to Waite in November 2018, that the union notice requirement in
the very next paragraph had not been provided. Clearly, a little bit more communication on the
Company’s part would have provided it and the Union with a basis to seek an extension of time
to engage in bargaining from the Navy. 15
C. The FAR Deadline did not Negate the Duty to Bargain
The duty to bargain over a proposal exists even in circumstances where the proposal, if
accepted, would deprive the employer of an external benefit. National Fuel Gas Distribution 20
Corp., 308 NLRB 841,844 (1992) (employer was obligated to bargain with the union over a
proposed benefits plan even where the plan would cause the employer to lose an advantageous
tax status); see also Dynaelectron Corp., 286 NLRB 302, 304 (1987) (government contractor
was obligated to bargain over higher wages even where it feared its contract price might not be
sufficient to compensate it for the higher wages). 25
In fact, an employer may not refuse to bargain over a proposal even where the proposal
would bring the employer out of compliance with federal law, much less where agreeing to the
union’s proposal would merely cause the employer to risk the loss of a government benefit such
as reimbursement for wages. See Swanson Group, Inc. 312 NLRB 184, 185 (1984). Instead, the 30
employer’s remedy in such a situation is the same as it would be when faced with any other
undesirable proposal: the employer is free to raise its reservations during the bargaining process.
In Swanson Group, Inc., a successor employer argued that it had no duty to bargain with its
employees’ union because several provisions of the CBA between the union and the predecessor
employer would cause the employer to violate the SCA. The Board rejected this argument, 35
holding that the employer’s remedy was not to refuse to bargain, but simply to address its
concerns during the bargaining process: “If (the employer) believes that the clauses (of the
collective bargaining agreement) are illegal, it can negotiate a new agreement.” Id.
Thus, assuming arguendo that the FAR deadline applied to the Union’s request to 40
negotiate wage increases in order for the Company to receive federal reimbursements for any
wage adjustments, it was still bound by the duty to bargain. And even if the government refused
the proposed wage increases, the Company’s situation would still be no different from that of
any other employer subject to economic pressures that might influence its behavior at the

11 In contrast, the Navy did include the Union in its November 2018 notifications exercising its option
to extend the contract for the 2019 option year.
JD–15–19
12
bargaining table. In short, the economic constraints within which the Company had to operate
because of the FAR were “no different from the economic restrictions placed on any private
contractor by the marketplace.” Dynaelectron Corp., 286 NLRB at 304.
D. The Company’s Bad Faith5
As discussed above, the duty to bargain in good faith entails a sincere desire to reach
agreement. Health Care Serv. Group, 331 NLRB at 335. Determining whether a party has
breached that duty requires considering the mindset of the party in question, and whether the
evidence demonstrates that the party had an intent to frustrate the bargaining process, for 10
example, through delay. Calex Corp., 322 NLRB at 987. “The Board has held in numerous
cases that a party who limits and delays meetings has not met its obligation to meet and bargain.”
Lancaster Nissan, 344 NLRB 225, 227; see Health Care Serv. Group, 331 NLRB at 335-36
(holding that delaying tactics are an indicia of bad faith). It is an act of bad faith to
“unduly…impede the progress and consummation of negotiations.” Silby-Dolcourt Chemicals 15
Industries, Inc., 145 NLRB 1348, 1350 (1964).
The Company’s alternative argument – that its failure to bargain between January 23 and
the filing of charges was not an unreasonable period – is unavailing. It is not the period that
elapsed here, but rather, the Company’s evasiveness in failing to respond on or shortly after 20
January 22 that demonstrated its bad faith intention to frustrate the bargaining process. Its failure
to communicate at all, coupled with the absence of any valid reason for that failure, was enough
to establish a breach of the duty to bargain. See Elite Marine Serv., 306 NLRB 735, 737 (1993),
where the Board found a breach of the duty to bargain when an employer failed to respond to a
union’s request to negotiate after leading it on with assurances that the company would reach out 25
to set up a meeting.
The evidence strongly suggests that the Company’s failure to respond to the Union was
an intentional delay tactic. During the Company’s January 22 internal maneuvering that
followed Richards’ wage proposal, Cooper stated that “we are past the deadline to incorporate 30
any increases for the next option period, even if we wanted to . . . any economic change will not
take effect until 2019.” In Cooper’s February 6 email, he stated that because of the missed FAR
deadline, “we, therefore, can’t agree to an increase in the current option year.” This language,
coupled with the subsequent failure to respond to the Union, which continued as of the time of
the hearing, amounts to an abandonment of the bargaining process. See NLRB v. Montgomery 35
Ward, Co., 133 F.2d 676, 687 (9th Cir. 1943) (bad faith where an employer deliberately
refrained from responding to a union’s request for only three days when the employer knew all
along what its answer would be and deliberately refrained from answering in order to stall).
Under the circumstances, violated Section 8(a)(5) and (1) of the Act by refusing and 40
failing to bargain over the Union’s wage increase proposal on and after January 23, 2018.
CONCLUSIONS OF LAW
1. HBC Management Services, Inc. (the Company or Respondent) is an employer 45
engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.
JD–15–19
13
2. The National Union, United Security & Police Officers of America (the Union or
Charging Party) is a labor organization within the meaning of Section 2(5) of the Act.
3. By failing and refusing to bargain collectively and in good faith with the Union as the
exclusive collective-bargaining representative of employees in the following unit the Company 5
violated Section 8(a)(5) and (1) of the Act:
All full-time and regular part-time security officers employed by the Employer at the
Washington Navy Yard NAVSEA and Military Sealift Command (MSC).
10
4. The above-described unfair labor practices affect commerce within the meaning of
Section 2(6) and (7) of the Act.
REMEDY
15
Having found that the Company has engaged in certain unfair labor practices, I shall
order it to cease and desist therefrom and to take certain affirmative action designed to effectuate
the policies of the Act. Specifically, I shall order the Company to, on request, bargain in good
faith with the Union as the exclusive representative of unit respect to wage increases retroactive
to the period between February 1, 2018 and January 31, 2019 pursuant to the reopener provision 20
set forth in the extant collective bargaining agreement and, if an understanding is reached,
embody the understanding in a signed agreement. The Company shall also post and send by
electronic means, or by mail if it is no longer in business, an appropriate Notice to all employees
who were in the unit at any time during the relevant period.
25
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended12
ORDER
30
The Respondent, HBC Management Services, Inc., Wayne, Pennsylvania, its officers,
agents, successors, and assigns, shall
1. Cease and desist from
35
(a) Failing and refusing to bargain collectively and in good faith with the United Security
& Police Officers of America as the exclusive collective-bargaining representative of employees
in following appropriate unit:
All full-time and regular part-time security officers employed by the Employer at the 40
Washington Navy Yard NAVSEA and Military Sealift Command (MSC).

12 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the
findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted
by the Board and all objections to them shall be deemed waived for all purposes.
JD–15–19
14
(b) In any like or related manner interfering with, restraining, 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.
5
(a) On request, bargain in good faith with the Union as the exclusive representative of the
employees in the above-described unit respect to wage increases retroactive to the period
between February 1, 2018 and January 31, 2019 pursuant to the reopener provision set forth in
Article XXVI and Appendix A of the collective bargaining agreement effective January 9, 2017
to January 31, 2020 and, if an understanding is reached, embody the understanding in a signed 10
agreement.
(b) Within 14 days after service by the Region, post at its facilities in the Washington
D.C. Navy Yard copies of the attached notice marked “Appendix.”13 Copies of the notice, on
forms provided by the Regional Director for Region 5, after being signed by the Respondent’s 15
authorized representative, shall be posted by the Respondent and maintained for 60 consecutive
days in conspicuous places including all places where notices to employees are customarily
posted. In addition to physical posting of paper notices, the notices shall be distributed
electronically, such as by email, posting on an intranet or an internet site, and/or other electronic
means, if the Respondent customarily communicates with its employees by such means. 20
Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered,
defaced, or covered by any other material. If, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facility involved in these proceedings, the
Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current
employees and former employees employed by the Respondent at any time since January 23, 25
2018.
(c) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.30
Dated, Washington, D.C. February 1, 2019
___________________________________35
Michael A. Rosas
Administrative Law Judge

13 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 National Labor Relations Board” shall read “Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations
Board.”
APPENDIX
NOTICE TO EMPLOYEES
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT, upon request, refuse to bargain in good faith with the United Security &
Police Officers of America as the exclusive collective-bargaining representative of our
employees in following appropriate unit:
All full-time and regular part-time security officers employed by the Employer at the
Washington Navy Yard NAVSEA and Military Sealift Command (MSC).
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL, upon request, bargain in good faith with United Security & Police Officers of
America as the exclusive collective-bargain representative of our employees in the above-
described bargaining unit with respect to employee wage increases retroactive to the period
between February 1, 2018 and January 31, 2019 as set forth in Article XXVI and Appendix A of
the collective bargaining agreement effective January 9, 2017 to January 31, 2020 and, if an
understanding is reached, embody such understanding in a signed writing agreement.
HBC MANAGEMENT SERVICES, INC.
(Employer)
Dated By
(Representative) (Title)
JD–15–19
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the
National Labor Relations Act. It conducts secret-ballot elections to determine whether employees want
union representation and it investigates and remedies unfair labor practices by employers and unions. To
find out more about your rights under the Act and how to file a charge or election petition, you may speak
confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain
information from the Board’s website: www.nlrb.gov.
Bank of America Center, Tower II, 100 S. Charles Street, Ste 600, Baltimore, MD 21201-2700
(410) 962-2822, Hours: 8:15 a.m. to 4:45 p.m.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/05-CA-219166 or by using the
QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National
Labor Relations Board, 1015 Half Street, S.E., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE
ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR
COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (410) 962-2880.