Pacific Grinding Wheel Co., Inc.

National Labor Relations Board - Board Decisions

Oct 21, 1975

220 N.L.R.B. 1389 (N.L.R.B. 1975)

PACIFIC GRINDING WHEEL CO
Pacific Grinding Wheel Co., Inc. and International
Chemical Workers Union , Local 614, AFL-CIO.
Cases 19-CA-6852 and 19-CA-7239
October 21, 1975
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS FANNING
AND JENKINS
On February 18, 1975, Administrative Law Judge
James T. Rasbury issued the attached Decision in
this proceeding. Thereafter, the General Counsel
filed exceptions and a supporting brief, and the Re-
spondent filed a brief in support of the Administra-
tive Law Judge's Decision.
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 in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified herein.
The Administrative Law Judge found, inter alra,
that Respondent violated Section 8(a)(5) of the Act
by terminating the existing collective-bargaining
agreement without complying with the notice re-
quirements of Section 8(d) of the Act and, thereafter,
Respondent engaged in further violations of Section
8(a)(5) by: (1) failing to meet with the job evaluation
committee and/or grievance committee as requested;
(2) unilaterally changing payday dates, overtime pay,
and the workweek; (3) failing to deduct and remit
union dues as required by the collective-bargaining
agreement; and (4) ignoring union written grievances
and refusing to permit a union representative to at-
tend an employee's disciplinary conference. The Ad-
ministrative Law Judge further found that Respon-
dent interrogated employees and attempted to
persuade them to abandon the Union, thereby violat-
ing Section 8(a)(l) and (5) of the Act. We agree with
these findings, but, in addition, also find that after
June 25, 1974, Respondent violated its statutory obli-
gation to bargain collectively with the Union; that
the economic strike which commenced on June 10,
1974,' was thereby converted into an unfair labor
practice strike; and that the September 9 wage in-
crease which Respondent unilaterally put into effect
was a violation of Section 8(a)(5).
By way of background, the Respondent has recog-
1 Unless otherwise stated, all dates occurred in 1974
1389
razed the Union as its employees' bargaining agent
for approximately 20 years. The most recent labor
agreement between the parties was effective from
May 1, 1972, until May 1, 1974. On September 19,
1973, the Respondent attempted to reopen the con-
tract. Although it did not give proper notice to the
Union and failed to comply with Section 8(d)(3) of
the Act, the Respondent took the position that the
contract was terminated.
In the early stages of the bargaining negotiations,
the Union took the position that Respondent's repu-
diation of the existing collective-bargaining agree-
ment was unlawful and that the agreement was in
full force and effect-a position which the Adminis-
trative Law Judge correctly found to be legally justi-
fied. Although during this period the Union agreed
to listen to Respondent's proposals, it did not consid-
er itself free to engage in meaningful bargaining until
after February 19, when it gave Respondent notice of
its desire to negotiate a new agreement. Respondent's
first written contract proposal was submitted to the
Union early in the negotiations and it provided, inter
alia, for a wage increase in return for certain changes
in the job classification system and in premium pay.
Another full contract proposal, in writing, was sub-
mitted to the Union on June 7 and, like the original
proposal, it offered a wage increase for changes in
premium pay and job classifications. This latter pro-
posal was submitted to the Union's membership and
rejected and, on June 10, the employees went out on
strike.
After the commencement of the strike, there was a
dramatic change in Respondent's bargaining propos-
als. The first such proposal was by June 25 letter to
the Union and, in it, Respondent eliminated several
substantive terms which had been a part of the previ-
ous offer of June 7. Among the items which Respon-
dent wished to delete was the union-security clause, a
provision which had been included in every collec-
tive-bargaining agreement between the parties since
their relationship was established in 1955. A bargain-
ing session was held on July I I at which no progress
was made and, on July 15, Respondent made a new
wage proposal which offered an increase in the start-
ing rate for employees, but in all other respects pro-
vided for substantially lower rates than had been of-
fered in the June 7 proposal. In fact, in some
instances, employees were currently being paid at
rates higher than those in the July 15 proposal and
this prompted Respondent to offer to "red circle" the
rates of those so affected. On August 19, the parties
again met in a negotiating session and, on August 20,
Respondent offered another new wage proposal
which was less than had been offered in the July 15
proposal; it was also significant in that it failed to
220 NLRB No. 214
1390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
renew the July 15 offer to "red circle" the rates of
those employees who were earning more than the
proposed rates would pay
In concluding that Respondent did not engage in
overall bad-faith bargaining, the Administrative Law
Judge failed to consider the fact that each of
Respondent's proposals after the commencement of
the strike was in turn more regressive than its prede-
cessor and that there is no documentary evidence to
support Respondent's claim that its proposals were
prompted by economic considerations 2 While it may
be true, as the Administrative Law Judge stated that
there is no evidence to show that Respondent's pro-
posals were "set in concrete," it hardly demonstrates
an approach to bargaining which seeks to reach a
mutually satisfactory agreement when, without ade-
quate explanation, each proposal is decidedly less fa-
vorable than the last one, and nothing in the way of
a significant compensatory proposal is offered Nor
is it significant, on the facts of this case, that the
Union was adamant in its bargaining position be-
cause , as previously noted, such a reference is to the
early stages of the negotiations when the Union was
attempting to preserve a legal position which we have
found it was entitled to maintain
On the basis of this evidence, we conclude that
commencing with the June 25 proposal, Re-
spondent's intention was to avoid reaching agree-
ment and to humiliate the employees' bargaining
representative Certainly, no union can be expected
to act favorably on a proposal simply out of fear that
the next proposal will be even more unfavorable
This is the very antithesis of collective bargaining as
defined in Section 8(d) of the Act
Accordingly, we find that on June 25 and thereaf-
ter Respondent engaged in overall bad-faith bargain-
ing in violation of Section 8(a)(5) of the Act We also
find that, as a result of this conduct, the economic
strike of June 10 was prolonged and converted into
an unfair labor practice on June 25 Finally, because
of Respondent's bad-faith bargaining no impasse
was reached in the negotiations and, therefore,
Respondent's unilateral action in implementing a
wage increase on September 9 was a further violation
of Section 8(a)(5)
THE REMEDY
Having found that Respondent engaged in certain
unfair labor practices we shall order that it cease and
desist therefrom and that it take certain affirmative
action necessary to effectuate the policies of the Act
2 We would draw an adverse inference from Respondent s failure to intro
duce in evidence documents which it claimed would support its economic
defense
Respondent will be required to reimburse any and all
employees for any loss of wages which may have oc-
curred because of the Respondent's unilateral and
premature termination of the contract and subse-
quent disregard for its provisions up to May 1, 1974,
the date on which the contract would have expired
pursuant to the Union's notice to the Company Re-
spondent shall also be required to reimburse the
Union for any dues it may have failed to deduct from
the employees' paychecks and transmitted to the
Union as required by the contract until its expiration
on May 1, 1974 Any loss of earnings, because of the
failure to comply with the contract shall include 6
percent interest per annum Isis Plumbing & Heating
Co, 138 NLRB 716 (1962)
Inasmuch as we have found that the Respondent
engaged in bad-faith bargaining and unilateral action
and that by such action converted the economic
strike into an unfair labor practice strike,' we shall
also order the Respondent to cease and desist from
bad-faith bargaining and unilateral action 4
CONCLUSIONS OF LAW
1 Respondent is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7)
of the Act
2 The Union is a labor organization within the
meaning of Section 2(5) of the Act
3 By failing to give notice as required by Section
8(d)(3) of the Act, Respondent has unlawfully disre-
garded the terms and provisions of a lawful labor
management contract and has thereby violated Sec-
tion 8(a)(5) and (1) of the Act
4 By its course of action in interrogating and at-
tempting to persuade employees to abandon the
Union and return to work, Respondent has violated
Section 8(a)(5) and (1) of the Act
5 By its course of action in engaging in bad-faith
bargaining Respondent has violated Section 8(a)(5)
and (1) of the Act
6 By its course of action in unilaterally imple-
menting a wage increase, Respondent has violated
Section 8(a)(5) and (1) of the Act
7 By its premature and unlawful termination of
the labor management contract, Respondent violated
3 Because the strike became an unfair labor practice strike all striking
employees who apply or who have applied unconditionally for reinstate
ment shall be immediately reinstated by Respondent with backpay if they
suffered any loss of earnings by the Respondents failure to reinstate them
from the date 5 days after such unconditional application Any backpay
shall be computed in accordance with the formula in F W Woolworth
Company 90 NLRB 289 (1950) and shall include interest at the rate of 6
percent per annum Isis Plumbing & Heating Co supra
' The unilateral action was a wage increase implemented on September 9
1974 Our decision herein is not to be construed however as requiring that
the Respondent rescind any benefit granted to the employees
PACIFIC GRINDING WHEEL CO 1391
Section 8(a)(5) and (1) of the Act in a number of
instances, including such specific acts as failure to
withhold union dues and remit same to the Union,
failure to meet with the job evaluation committee,
failure to process union grievances, failure to recog-
nize the right of a union representative to be present
at an employee-supervisor meeting relating to disci-
plinary action to be taken against said employee, and
unilaterally changing the paydays as well as the
workweek and certain premium paydays
8 The appropriate bargaining unit is All produc-
tion , maintenance , and machine shop employees (ex-
cept machinists covered by Machinists contract), ex-
cluding, however, clerical employees, executives,
guards, professional employees and supervisors as
defined in the National Labor Relations Act
9 The strike of employees in said unit commenc-
ing on June 10, 1974, became and continued as an
unfair labor practice strike after June 26, 1974, by
reason of Respondent's unlawful bargaining tactics
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 as modified
below and hereby orders that the Respondent, Pacif-
ic Grinding Wheel Co, Inc, Marysville, Washing-
ton, its officers, agents, successors, and assigns, shall
take the action set forth in the said recommended
Order, as herein modified
1 Add the following as paragraph 1(c) and rede-
signate present paragraph 1(c) as 1(d)
"(c) Unilaterally implementing wage increases
and engaging in bad-faith bargaining "
2 Add the following as paragraph 2(b) and rede-
signate the subsequent paragraphs accordingly
"(b) Make the employees and the Union whole for
any losses suffered by reason of Respondent's unfair
labor practices in the manner set forth in the section
of the Decision and Order entitled `The Remedy ' "
3 Substitute the attached notice for that of the
Administrative Law Judge
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had a chance to
give evidence, the National Labor Relations Board
has found that we violated the National Labor Rela-
tions Act, as amended, and has ordered us to post
this notice
The Act gives all employees these rights
To engage in self-organization
To form, join, or help unions
To bargain collectively through a represen-
tative of their own choosing
To act together for collective bargaining or
other mutual aid or protection
To refrain from any or all these things ex-
cept to the extent that membership in a union
may be required pursuant to a lawful union-
security clause
WE WILL NOT do anything that interferes with,
restrains, or coerces employees with respect to
these rights More specifically,
WE WILL NOT prematurely cancel or otherwise
disregard the terms and working conditions of
any lawfully negotiated labor agreement be-
tween Pacific Grinding Wheel Co, Inc, and the
International Chemical Workers Union, Local
614, AFL-CIO, or any other labor organization
WE WILL NOT interrogate or otherwise commu-
nicate directly with our employees in an effort to
encourage them to abandon the Union and/or
negotiate directly with our employees to encour-
age them to return to work
WE WILL NOT unilaterally implement wage in-
creases
WE WILL NOT fall or refuse to bargain collec-
tively and in good faith with the Union as the
statutory representative of our employees in the
bargaining unit described below regarding wag-
es, hours, and other conditions of employment
WE WILL NOT in any other manner interfere
with, restrain, or coerce our employees in the
exercise of their rights as guaranteed in Section
7 of the Act
WE WILL, upon requests, bargain collectively
with the International Chemical Workers
Union, Local 614, AFL-CIO, in the following
appropriate bargaining unit
All production, maintenance and machine
shop employees (except machinists covered
by Machinists contract) excluding, however,
clerical employees, executives, guards, profes-
sional employees and supervisors as defined
in the National Labor Relations Act, as
amended
WE WILL reimburse all employees for any loss
of wages occasioned by our unilateral action in
disregarding the wages, hours, and working pro-
visions of that certain agreement existing be-
1392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tween the Company and the Union which ex-
pired on May 1, 1974
WE WILL reimburse the Union for any loss of
dues occasioned by our failure to deduct and
remit the same to the Union as required by that
contract which expired May 1, 1974
PACIFIC GRINDING WHEEL CO, INC
DECISION
STATEMENT OF THE CASE
JAMES T RASBURY , Administrative Law Judge A hearing
in Case 19-CA-6852 was held in Seattle , Washington, on
May 21 and 22 , 1974, based upon charges of unfair labor
practices filed by International Chemical Workers Union,
Local 614 , AFL-CIO (herein Union), alleging that the Re-
spondent Company had engaged in violations of Section
8(a)(1) and (5) of the National Labor Relations Act, as
amended (herein called the Act) The complaint was dated
March 20 and served on all parties The Respondent's an-
swer, admitting certain allegations of the complaint, but
denying that Respondent had committed any unfair labor
practices , was received on May 2, 1974
The parties arrived at an informal settlement agreement
in Case 19-CA-6852 (see Joint Exh 1(a) and (b)) which
was approved by the Administrative Law Judge and the
hearing continued indefinitely pending receipt of informa-
tion from the General Counsel that Respondent had com-
plied with the settlement agreement and a request for the
Admimstrative Law Judge to issue an order closing the
case
A new charge was filed by the Union on July 29 and
amended on September 10, 1974 A complaint in Case
19-CA-7239 was issued on September 26, 1974, alleging
Respondent to have violated Section 8 (a)(1) and (5) of the
Act
A motion to resume the hearing in Case 19 -CA-6852
and to consolidate said case with Case 19-CA-7239 was
filed with the Division of Judges in San Francisco dated
October 9 , 1974 Nothing in opposition to the General
Counsel's motion was received from the Respondent, al-
though Charging Party's counsel did file a response to mo-
tion to consolidate cases
An Order was issued October 17, 1974, consolidating
said cases After a further written amendment to the com-
plaint, an Order was issued on October 23 setting this con-
solidated hearing for November 18, 1974 The Respon-
dent's answer in Case 19-CA-7239 was undated, but
again acknowledged and admitted certain allegations
of the complaint but denied the commission of any alleged
unfair labor practices and affirmatively pleaded that
Respondent's bargaining position was based upon good
business considerations , and that it was the Union that had
bargained in bad faith
Upon the entire record in these cases , and from my ob-
servations of the witnesses , I make the following
FINDINGS OF FACT
I JURISDICTION
Respondent is, and at all material tunes herein has been,
a State of Washington corporation with its principal offices
and headquarters in Marysville, Washington, where it is
engaged in the preparation and manufacture of abrasive
grinding wheels and related abrasive products During the
past calendar year, Respondent purchased goods and ma-
tenals valued in excess of $50,000 directly from points out-
side the State of Washington , purchased goods and materi-
als valued in excess of $50 ,000 from firms within the State
of Washington who in turn purchased those goods from
outside the State of Washington or made sales to or per-
formed services for customers located outside the State of
Washington valued in excess of $50,000 On the basis of
these admitted facts, I find that Respondent is now, and
has been at all times material herein , an employer within
the meaning of Section 2(2) of the Act, engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act
II THE LABOR ORGANIZATION INVOLVED
The International Chemical Workers Union , Local 614,
AFL-CIO, is now , and has been at all times material here-
in, a labor organization within the meaning of Section 2(5)
of the Act
III THE ALLEGED UNFAIR LABOR PRACTICES
A The Issues
In the initial hearing (19-CA-6852), the issues raised by
the pleadings may be stated as follows ( 1) Did Respon-
dent wrongfully and illegally treat an existing labor con-
tract as terminated prematurely" In this regard , the com-
plaint alleged (a) "improper" notice and (b) failure of
Respondent to comply with Section 8(d)(3) of the Act (2)
There were specific acts, allegedly violative of the labor
agreement and past practice , which , if true , would be indic-
ative of the Respondent 's alleged illegal course of conduct
in prematurely regarding the labor management agreement
as terminated (3) There were acts of direct bargaining with
employees , suggestions of union abandonment and wrong-
ful interrogation of employees , all allegedly violative of
Section 8(a)(1) and (5) of the Act
The gravamen of the second complaint (19-CA-7239)
relates to (1) retrogressive offers and/or bad -faith bargain-
ing by Respondent , (2) refusal of Respondent to furnish
information necessary for bargaining , (3) instituting
changes in working conditions without first bargaining
with the Union about said changes , all of which were viola-
tive of Section 8(a)(5) and (1) of the Act Additionally,
General Counsel contends that the conduct of Respondent
after June 24 converted an economic strike into an unfair
labor practice strike
PACIFIC GRINDING WHEEL CO 1393
B The Evidence
The testimony of the witnesses and the evidence present-
ed at the hearing indicate the following factual situation
The Union has been the bargaining representative for
"all production, maintenance and machine shop employees
(except machinists covered by Machinists contract), ex-
cludmg, however, clerical employees, executives, guards,
professional employees and supervisors as defined in the
amended National Labor Relations Act" since at least
1955 The most recently executed agreement was dated
July 24, 1972, and, ostensibly, was intended to cover the
period from May 1, 1972 until May 1, 1974 However, the
relevant language of article XXI, term of agreement, per-
mitted termination, amendment or revision of the
contract's provisions upon 60 days' written notice I
On September 17, 1973,2 the Respondent advised the
Union that it wished to "revise" the agreement, but con-
cluded the letter with a paragraph that, arguably, suggests
that it meant to terminate the contract if suitable revisions
could not be agreed to by the parties 3 The parties met on
October 22 and numerous negotiating meetings were held
thereafter 4 At least as early as the November 6 meeting,
Respondent made clear the intent of its letter of September
17, namely, that it was a letter of termination in the event
the parties failed to reach agreement It should be noted,
however, that Respondent 5 acknowledged that it had not
i The entire clause reads as follows This agreement shall be binding on
both parties when signed by the qualified representatives of each and shall
remain in full force and effect until May 1 1974 unless sooner terminated
This agreement may be terminated amended or revised in any of its provi
sions dunng its existence provided sixty (60) days written notice of the
desire to terminate amend or revise be given by either party to the other
and unless one of the parties hereto notifies the other of its desire to termi
nate amend or revise this agreement by written notice given sixty (60) days
poor to the expiration date then this agreement will continue in full force
and effect for the next succeeding year
2 Hereinafter all dates will be in the year 1973 unless otherwise indicated
3 The entire letter read as follows
Mr Sam Dagastino President
International Chemical Workers Union
Local 614
Everett Washington
Dear Mr Dagastmo
In accordance with article twenty-one we wish to revise our agreement
dated May 1 1972
It is our wish to mutually accomplish long term economical goals utiliz
ing the most modern production methods
In line with this certain revisions could be negotiated along with up
dating the present wage scale to compensate for the recent unprece
dented inflation and living costs which would have long term mutual
benefits for both employees and Pacific Grinding Wheel Company
There are numerous thoughts which we would like to explore with your
negotiating committee dunng the next 60 days with the hope that mu
tually we can accomplish a revised agreement without a lapse in perpe
tuity
Yours truly
Krusse Caroe
Vice President Manufacturing
4 At the time of the first hearing on May 21 1974 there was testimony
indicating the parties had met 24 times In November at the trial of the
consolidated cases there was testimony indicating the parties had met on 34
occasions
at any time notified either the Federal or State mediation
and conciliation service of an impending labor dispute On
November 8, Respondent wrote to the Union, suggesting
that the contract be extended until November 30 (G C
Exh 6) The Union never acknowledged any of the
Respondent's various extension proposals On December
4, Respondent wrote to the Union, indicating that it was
willing to "continue to work without a contract", and
would "continue to meet with your negotiating commit-
tee " (G C Exh 7) On December 11, the Union advised the
Respondent that it regarded the contract as being in full
force and effect but it would be willing to continue to meet
if the Respondent had any further suggested revisions (G
C Exh 8)
There followLd a series of violations of the "contract"
stemming from the fact that Respondent was of the opin-
ion that the contract had been legally terminated The Re-
spondent failed to meet with the union members of the job
evaluation committee and/or the grievance committee as
requested (see GC Exhs 10, 11, and 12), changed the
payday dates, overtime pay provisions, and the workweek
(see G C Exh 14), ceased deducting and remitting union
dues, ignored union written grievances [see G C Exhs
15(a), (b), (c), (d), and (e)] 6 and denied an employee the
right to have a union representative present at a discipli-
nary conference 7 Nevertheless, while Respondent stuck
with its position that the "contract" had been terminated, it
continued to meet in good faith and discuss proposals for a
new contract with the Union On February 19, 1974, the
Union gave the Company notice of its desire to negotiate a
new agreement and clearly expressed its desire to terminate
the contract if agreement was not reached by May 1 or by
any mutually agreeable extension to the agreement
Meanwhile, there was undenied testimony that during
this period of time, Bob Easton, swing shift foreman, had
invited five employees 8 to his office and there a general
discussion concerning the Company's negotiating position
occurred This was a rather crude attempt to negotiate or
bargain directly with the employees On another occasion,
fixed as February 13, 1974, by witness Larry Powers, Eas-
ton engaged in a conversation calculated to "unsell" the
Union and to encourage Powers to support the Company
Negotiations were continuing between the parties at the
time of the first hearing-May 21, 1974-but, in accor-
dance with the Union's notice to Respondent, all would
agree at that point there was no contract in existence 9 Ne-
gotiations for a new labor-management agreement contin-
5This fact taken fiom the testimony of Krusse Caroe vice president of
manufacturing and the officer who signed the letter of September 17 advis
ing the Union of Respondents request to make revisions
All during this time the Union consistently contended that the contract
was in full force and effect but there is testimony in the record from the
union president to the effect that the Union never sought to process the
grievances to arbitration as provided for in the contract
7 The resulting discharge was discussed with union representatives (see
G C Exh 16) and is not a matter with which we are here concerned Most
of these contract violations were acknowledged by Krusse Caroe in his letter
dated February 18 sent to the Board (G C Exh 18)
a Gary McClellan Lynn Speckert Jack Phillips Russell Munson and
John Nunnally
9 The settlement agreement and notice relating thereto for Case
19-CA-6852 are set forth in full and attached as Exhs A and B to this
Decision [omitted from publication]
1394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ued, following the settlement agreement At the June 7
meeting, Respondent presented a complete contract pro-
posal incorporating a number of language changes, but
which included an 8-percent pay raise for the first year of
the contract and a 4-percent pay raise for the last 6 months
of a proposed 18 months' contract 10 The proposals were
discussed with opposition being voiced by the Union to
practically all of the suggested changes, including the ter-
mination date However, a general meeting of the Union
was called the next day, at which the general membership
rejected the company proposal and voted to strike on June
10, 1974 Another negotiating session was held on June 14,
but nothing significant was accomplished On June 25, Da-
gastino received a letter from Caroe, expressing
Respondent's intent to delete various items from their June
7 proposal, all of which were regarded by the Union as
more onerous and not to their liking 11
The next negotiating session occurred on July 11, 1974,
and was attended by a mediator who kept the parties in
separate rooms No progress occurred at this meeting On
July 15, 1974, the Company, by letter, presented a new
wage proposal to the Union which it stated had been pre-
sented to the mediator at the July 11 bargaining session
(G C Exh 25) This proposal sets up only three classes of
employees with provision for "within class" upward wage
movements at periodic intervals In contrast, the June 7
proposal had provisions for 14 different single-rated job
classifications The top rate in the June 7 proposal was
greater than the top rate in the July 15 proposal, but the
starting rate provided for in the July 15 proposal was great-
er than that in the June proposal Additionally, the offer
included a willingness to red line (or red circle) rates of
employees whose former rates would exceed the proposed
rates' The next negotiating session occurred on August
19, 1974 The lack of progress can only be gleaned from
Respondent's letter dated August 20 which sets forth some
17 areas, or items, of disagreement between the parties In
addition, a slightly different wage proposal was set forth
with indications of the broad classifications (A, B, or C)
into which each of the various jobs would be placed within
each department (G C Exh 26) Respondent indicated in
this letter, that, if requested, it was willing to prove that
good business considerations dictated its wage proposal
On August 26, 1974, an attorney representing the Union
requested proof that good business considerations dictated
their wage proposal The letter requesting the information
was never answered, although the credited testimony clear-
ly indicates that the Company had explained its gradual
decreasing profits and its higher-than-industry-average
10 According to Sam Dagastino the Local union president this was the
Company s third such complete proposal
11 The changes included elimination of union shop clause a change in the
supervisors performing bargaining unit work clause tightening of control
over probationary employees a change in the seniority status of an employ
ee who refused a promotion and extension of time for temporary job assign
ments
12 The term red line or red circle has reference to a rate which is in
excess of the current rate for a given job but which rate management agrees
to retain for the particular individual involved so long as the particular
individual remains in that particular job With the passage of time as the
wage rates are raised and employees change job classifications the red line
rates disappear
wage rates as well as its higher-than-average-community
wage rates Moreover, there is testimony indicating that
Respondent's counsel and Union's counsel engaged in con-
siderable economic rhetoric at the negotiating session of
August 19
A final meeting occurred between Mr Hornbeck, execu-
tive vice president of Respondent, and Mr Wood, vice
president of the International Chemical Workers Union,
on September 6, 1974 Frank Schappil, a mediator, also
attended the meeting, but apparently there were no other
company or union representatives present Hornbeck testi-
fied that at this last meeting between representatives of the
parties, he explained the Company's position on all the
various issues, including the current economic problems as
well as what could be expected in the future Mr Wood did
not testify, but Hornbeck stated that Wood explained the
Union's position According to Hornbeck, Wood took the
position that any new contract would have to include a
substantial wage increase, the union shop , and agreement
by the Company to return all of the striking employees to
work 13
On September 13, 1974, Respondent advised the Union
that in view of the continued impasse, it was instituting the
wage schedule and classifications, effective September 9,
that had been proposed to the Union on August 19, 1974
Meanwhile, the evidence indicates that during August
and September, there were several individual conversations
between lower level supervisors and rank-and-file employ-
ees Larry Olson testified that Harold Hanson, a foreman,
spoke to him and two other employees on September 18
about returning to work According to Olson, Hanson said,
"that we could have our jobs back that we had prior to
June 10 and we would be paid the same wages and the
same benefits that we had before we went out on strike "
Employee Dale Phillips testified that about mid-Septem-
ber, Burt Robinson, who had something to do with produc-
tion control, "asked me if I would consider a job that paid
$1,000 a month, and I told him it would depend on more
details other than just pay He said the only thing that was
really pertinent was that the Company would require me to
go back in at my old job before the strike for 1 week before
I could get into this other deal that he was talking about "
Charles Jacobson testified that Ed Murray, allegedly a
foreman in the vitrified department, had called him on the
telephone on August 10 and tried to encourage him to re-
turn to work, and indicated if he did not that he might end
up on the ovens (meaning in a common laborers' fob)
Norman Schedin testified that on August 26 Foreman
Harold Hanson told him and Arthur Olson, a leadman, "I
am not offering you a job, but I do know that if you want
to come in, you can get 1 cent an hour more than you were
making before you went on strike "
Employee Ernie Perrault testified that during the first
week of October 1974, Harold Hanson had stopped on his
way out of the plant and had asked him what it would take
to get him back to work
13 Although neither Wood nor Schappil was called to testify Hornbeck s
testimony as to Wood s position is corroborated by Dagastino in his testi
mony of what Wood related to him had occurred at this September 6 meet
mg
PACIFIC GRINDING WHEEL CO
C Respondent 's Defense
The essence of Respondent 's defense is that the allega-
tions of the complaint are too narrowly drafted to state a
cause of action and the limited evidence on these narrow
issues was insufficient to prove an 8(a)(1) and (5) violation
Moreover , Respondent argues, its entire course of conduct
was consistent with good business practices designed to
restore a business to an acceptable profit margin and there-
by benefit all concerned and thus it has never bargained in
bad faith Respondent further argues that until the second
complaint (19-CA-7239) is proved , the events encom-
passed within the informal settlement of Case 19 -CA-6852
may only be used as background
D Analysis
Section 101 9(e)(2) of the Board's Statement of Proce-
dures, Series 8, as amended, provides "In the event the
Respondent fails to comply with the terms of an informal
settlement agreement, the Regional Director may set the
agreement aside and institute further proceedings" It is
well established that a settlement agreement may be set
aside where independent evidence of subsequent or contin-
uing unfair labor practices reveal a breach of the agree-
ment Tompkins Motor Lines, Inc, 142 NLRB 1, 3 (1963),
enforcement denied on other grounds 337 F 2d 325 (C A
6, 1964), accord United Dairy Co, 146 NLRB 187, 189
(1964) Thus, if Respondent has committed subsequent or
continuing unfair labor practices of the same or related
type, then it violated the terms of the settlement agreement
and the Regional Director may be deemed to have acted
properly in setting it aside The threshold question to be
resolved is whether Respondent committed any subsequent
or continuing violations after the settlement agreement was
executed on May 22, 1974 (involving Case 19-CA-6852)
In giving consideration to any postsettlement conduct al-
leged to be violative of the Act, I shall, consistent with
Board policy, consider the presettlement conduct of Re-
spondent only as background evidence in appraising
Respondent's motives and objectives 14
The May 22 settlement agreement provided, inter aka,
that Respondent would not interrogate employees about
their union sympathies or activities, would not suggest to
employees that they abandon or renounce the Union, and
would not undermine or attempt to undermine the exclu-
sive status of the Union by bargaining directly with em-
ployees As was set forth supra, in sec III, B , herein,
the testimony clearly discloses three undenied instances of
Foreman Harold Hanson carrying on conversations with
employees the meaning and intent of which can only be
interpreted as an effort on the part of Respondent to sug-
gest to employees that they abandon the Union and/or as
an attempt to undermine the exclusive status of the Union
by bargaining directly with the employees Similarly, the
14 Northern California District of Hod Carriers and Common Laborers of
America AFL-CIO (Joseph Mohamed Sr An Individual d/b/a Josephs
Landscaping Service) 154 NLRB 1384 fn 1 (1965) enfd 389 F 2d 721 (C A
9 1968) Steves Sash and Door Company v N L R B 401 F 2d 676 (C A 5
1968) Globe Gear Company 198 NLRB 422 In 1 (1972)
1395
testimony of Dale Phillips is undenied The remarks made
to him by Supervisor Burt Robinson can only be interpret-
ed as an effort on the part of Respondent to deal directly
with the employees to the exclusion of the bargaining rep-
resentative Good-faith bargaining by the Employer re-
quires at a minimum recognition that the statutory repre-
sentative of the employees is the one with whom it must
deal and that it cannot bargain directly or indirectly with
the employees 11 I find then that Respondent engaged in
postsettlement conduct of a similar type as that which was
to have been corrected by the settlement agreement Such
conduct is violative of Section 8(a)(1) and (5) of the Act
and fully justified the Regional Director in setting aside the
settlement agreement
Having determined that the settlement agreement was
properly set aside because of the wrongful postsettlement
conduct of the Respondent, I shall turn to a consideration
and analysis of the evidence relating to both Case
19-CA-6852 and Case 19-CA-7239
While the use of the word "revise" by Respondent in its
initial letter to the Union is clearly something other than
"terminate," nevertheless the language of the last para-
graph coupled with the Respondent's acknowledged course
of conduct from the very beginning causes me considerable
concern as to any lack of understanding between the par-
ties as to what was intended by Respondent's letter to the
Union opening the contract for revisions If this were
Respondent's only illegal conduct in connection with treat-
ing the contract as terminated, I would be hard-pressed to
find this aspect of Respondent's conduct violative of the
Act 16 Respondent's course of conduct made it clear what
was intended This dispute does not turn, however, on such
an elusive subjective question as the intent of Caroe's Sep-
tember 17 letter, because Respondent clearly and admit-
tedly failed to comply with Section 8(d)(3) of the Act 17
15 General Electric Co 150 NLRB 192 (1964) I have not found the mci
dent involving employee Charles Jacobson and Ed Murray to be a violation
because proof that Murray is a supervisor is too vague and uncertain
16 This because the development of the law relating to labor management
relations has tolerated a greater degree of looseness in the language used by
the principals than in other areas of the law See 48 Am Jur 2d Labor and
Labor Relations §1208
17 The relevant portion of Sec 8(d) reads as follows
For the purposes of this section to bargain collectively is the perfor
mance of the mutual obligation of the employer and the representative
of the employees to meet at reasonable times and confer in good faith
with respect to wages hours and other terms and conditions of em
ployment or the negotiation of an agreement or any question arising
thereunder and the execution of a written contract incorporating any
agreement reached if requested by either party but such obligation
does not compel either party to agree to a proposal or require the
making of a concession Provided That where there is in effect a collet
rive bargaining contract covering employees in an industry affecting
commerce the duty to bargain collectively shall also mean that no
party to such contract shall terminate or modify such contract unless
the party desiring such termination or modification-
(1) serves a written notice upon the other party to the contract of
the proposed termination or modification sixty days prior to the ex-
piration date thereof or in the event such contract contains no expi
ration date sixty days prior to the time it is proposed to make such
termination or modifications
(2) offers to meet and confer with the other party for the purpose
of negotiating a new contract or a contract containing the proposed
modifications
(3) notifies the Federal Mediation and Conciliation Service within
Continued
1396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Section 8(d) of the Act sets forth what is meant by collec-
tive bargaining including an obligation on the party elect-
ing to terminate a labor contract to notify the Federal
Mediation and Conciliation Service and the similar state
agency, if any, within 30 days after such notice ( meaning
the September 17 letter) of the existence of a dispute Fail-
ure to fully comply with the requirements of Section 8(d)
before terminating a contract is a breach of the duty to
bargain collectively and violates Section 8(a)(5) and (1) of
the Act 18 Respondent admittedly did not notify the Feder-
al Mediation and Conciliation Service prior to treating the
contract as canceled and I find Respondent guilty of vio-
lating Section 8(a)(5) and (1) of the Act
Thereafter Respondent undeniably committed numer-
ous violations of the "contract" terms, each of which
would be in the nature of a refusal to bargain and violative
of Section 8(a)(5) of the Act and I so find These unlawful
acts included failure after December 1973 to withhold
union dues from employee paychecks and remit same to
the Union, failure to meet with the job evaluation commit-
tee as requested, failure to process union grievances, fail-
ure to recognize the right of a union representative to be
present at an employee-supervisor meeting relating to dis-
ciplinary action to be taken against the employee, unilater-
ally changing the paydays as well as the workweek and
certain premium paydays 19
In addition, I find the two undenied instances of Fore-
man Bob Easton interrogating, suggesting, and encourag-
ing employees to abandon the Union to be independent
acts of interference, restraint, and coercion calculated to
inhibit the employees in the exercise of their Section 7
rights and thus violative of Section 8(a)(1) of the Act
General Counsel also alleged Respondent's act of notify-
ing the Union that Respondent could no longer provide the
facilities for union meetings, as a unilateral cessation of
policy and past practice by Respondent and thus violative
of Section 8(a)(5) of the Act (see G C Exh 17) Providing
a union financial and material assistance, such as allowing
union meetings to be held on company property, can be
damaging evidence of an employer violation of Section
8(a)(2) of the Act Undoubtly this is what Respondent had
reference to in its letter notifying the Union of its change in
policy Under all the circumstances it does not appear that
an 8(a)(2) violation of the Act relating to this Respondent
and this Union would ever be found, nevertheless I find
nothing wrong in Respondent taking appropriate steps to
thirty days after such notice of the existence of a dispute and simul
taneously therewith notifies any State or Territorial agency estab
fished to mediate and conciliate disputes within the State or Territory
where the dispute occurred provided no agreement has been reached
by that time and
(4) continues in full force and effect without resorting to strike or
lockout all the terms and conditions of the existing contract for a
period of sixty days after such notice is given or until the expiration
date of such contract whichever occurs later
18 The Crescent Bed Company inc 157 NLRB 296 (1966)
19 Under normal circumstances these types of contract violations would
more appropriately be handled under the grievance and arbitration machin
ery provided for in the contract See Collyer Insulated Wire 192 NLRB 837
(1971) However in the context of this case whether Respondent has wrong
fully repudiated the entire contract there is no alternative except to find
each of the allegations of contract violations as a refusal to bargain in
violation of Sec 8(aX5) of the Act as I have done
protect itself against any unforeseen allegation of violating
the law regardless of how remote I shall recommend dis-
missal of this allegation of the complaint
Before turning to a consideration of the real heart of this
labor dispute, there should be some comment or consider-
ation given to General Counsel's allegation that Respon-
dent violated Section 8(a)(5) of the Act, in that it refused to
furnish the Union with information necessary to fulfill its
statutory duty as collective-bargaining representative of
the employees This allegation stems from a comment in
Caroe's August 20, 1974, letter, indicating a willingness to
prove that their proposal could be justified by good busi-
ness considerations Thereafter, on August 26, 1974, Steven
Frank, the Union's attorney, requested such proof in
writing The Company did not specifically respond to
Frank's request This issue, however, is not to be confused
with a plea of poverty The evidence indicated that Re-
spondent made clear, and the Union understood, Respon-
dent was not pleading poverty or inability to pay which
would have opened up the Company's financial records to
the Union in order to prove its position The Company's
position was that it did not immediately respond because
(1) there was another negotiating session scheduled within
the next few days and it felt the matter could be handled
then, and (2) the author of the letter had only appeared at
one past negotiating session (at this point there had been
some 30 negotiating sessions) and the record does not indi-
cate that he appeared at any others, and (3) if the Union
wanted proof, all it had to do was ask at the next bargain-
ing session I shall recommend dismissal of this allegation
of the complaint for the following reasons (1) The request
was not for "data" that was exclusively within the control
of Respondent and thus something Respondent was with-
holding to the detriment or frustration of the Union's bar-
gaining obligation (2) The request was for "reasons" or
"argument" to justify the company proposals This infor-
mation the Respondent had been furnished at each negoti-
ating session, although the Union consistently refused to
"buy" it Moreover, when viewed in the totality of the bar-
gaining picture, I find it impossible to treat this mere fail-
ure to respond to a letter as an adamant refusal to provide
necessary and relevant information If the negotiating ses-
sions had continued, I am certain Respondent would have
continued to supply the Union with its reasons (proof) why
its proposals were rooted in good business considerations f°
Respondent's failure to answer Frank's letter, viewed in a
posture most favorable to General Counsel, can only be a
technical violation of the Act for which the remedy-pro-
vide the Union proof of the validity of Respondent's posi-
tion-would be an empty gesture I shall recommend dis-
missal of this allegation of the complaint 21
I turn now to a consideration of what I prefer to regard
as the primary or underlying problem involved in this labor
20 From my many years experience in the negotiating of labor manage
ment contracts I am convinced that neither side ever truly listens and
hears the other side but at best only politely waits its turn to speak
21 See N L R B v Truitt Mfg Co 351 U S 149 (1956) Curtis Wright
Corporation Wright Aeronautical Division v N L R B 347 F 2d 61 (C A 3
1965) and international Woodworkers of America Local Unions 6-7 [Pine
Industrial Relat ons Committee] v N L R B 263 F 2d 483 (C A D C 1959)
for views as to furnishing information as it relates to good faith bargaining
PACIFIC GRINDING WHEEL CO 1397
dispute , namely, is Respondent guilty of bargaining in bad
faith9
The duty to bargain in good faith is an obligation to
participate actively in the deliberations so as to indicate an
intention to find a basis for agreement This implies both
an open mind and a sincere desire to reach an agreement
as well as a sincere effort to reach a common ground The
presence or absence of intent must be discerned from the
record All the relevant facts of a case must be studied in
determining whether bargaining in good faith has oc-
curred , i e, the totality of conduct is the standard through
which the quality of negotiations is tested 22
An article -by-article comparison of Respondent 's first
total contract proposal with the contract that expired on
May 1, 1974, fails to reveal an attitude or intent of a party
that was entering into negotiations in bad faith The pro-
posal included all of the usual "musts" desired by a
union 23 It also provided for revisions in some of the work-
ing rules , but included a rather generous 9-percent wage
increase So far as the record reflects, the Union's only
reaction was a flat "Not " There is no proof of any counter-
proposals or even enlightened discussion , on the part of the
Union So far as the record reflects, the Union 's only posi-
tion was a unanimous rejection of the Respondent's pro-
posal During this period , the parties met frequently and
Respondent further reflected its "good faith ," albeit mis-
takenly, by expressing a willingness to continue the con-
tract in effect while negotiations continued
The Company's third complete contract proposal sub-
mitted on June 7, 1974, is once again not the proposal of a
company seeking to foist upon a bargaining representative
something that no self-respecting union could tolerate It
was not until after the Union went on strike , June 10, 1974,
that Respondent substantially changed its bargaining posi-
tion and , even then, there is no evidence to indicate that
these proposals were "set in concrete" from which there
was no retreating So far as the evidence is concerned, it
was the Union-not the Company-that took an adamant
position and said "these things we must have or no con-
tract "
Bypassing the bargaining representative is, as I have
heretofore found, a violation of good -faith bargaining A
reciprocal of such a determination places a responsibility
on the bargaining representative to share in the responsibil-
ity of mutually reaching agreement Bargaining collectively
refers to a bilateral procedure whereby both the bargaining
representative and the Employer jointly seek to set wages
and working conditions for the employees Viewed in its
totality, as reflected by all the evidence submitted by the
parties, it cannot be said that Respondent is responsible for
the failure to reach agreement Not only did the Union "set
its feet in concrete ," when it expressed to the Respondent
what terms a new agreement must contain , but before ne-
gotiations were ever commenced (May 5, 1973 See Resp
Exh 8 ) an International representative of the Union ex-
22 Taken from The Developing Labor Law ed by Charles J Morris pub
by the Bureau of National Affairs Inc Case citations omitted
23 Including inter aha a union shop clause dues deduction arrange
menu seniority life and hospitalization insurance provisions job bidding
liberal vacations 10 paid holidays annually funeral allowance and a griev
ance and arbitrat on procedure
pressed suspicion and distrust of the Company in a not too
subtle intimidation effort Such an attitude is not condu-
cive toward reaching agreement The Union must share
equally in the task of reaching agreement and, while I shall
order the Company to bargain with the Union because of
violations found herein , the Union should likewise lay
down its battle -axes and enter the negotiations with some
willingness to compromise in an effort to reach agreement
As the Supreme Court has said , "The basic theme of the
Act was that through collective bargaining the passions,
arguments and struggles of prior years would be channeled
into constructive , open negotiations leading hopefully to
mutual agreement " 4 An employer is not required to bar-
gain upward and may seek to bargain away benefits so
long as he bargains in good faith On the other hand, a
union is entitled to the maintenance of existing conditions
until it agrees otherwise or a bona fide impasse has been
reached 2
It follows from what I have related that the Company
has not been responsible for the continuation of the eco-
nomic strike which started on June 10 , 1974, and I am
unable to find the Respondent 's course of conduct to have
been responsible for converting an economic strike into an
unfair labor practice strike Clearly , an impasse was
reached in the summer of 1974 and the wages instituted on
September 9, 1974 , had been offered to the Union in Au-
gust
IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of Respondent set forth above , occurring
in connection with the Respondent's operations described
in section I, above , have a close , intimate , and substantial
relationship to trade, traffic , and commerce among the sev-
eral States , and tend to lead , and have led , to labor dis-
putes burdening and obstructing commerce and the free
flow of comererce
V THE REMEDY
Having found that Respondent engaged in certain unfair
labor practices , I shall recommend that it be ordered to
cease and desist therefrom and that it take certain affirma-
tive action necessary to effectuate the policies of the Act
Respondent will be required to reimburse any and all em-
ployees for any loss of wages which may have occurred
because of the Respondent 's unilateral and premature ter-
mination of the contract and subsequent disregard for its
provisions , up to May 1, 1974 , the date on which the con-
tract would have expired pursuant to the Union 's notice to
the Company Respondent shall also be required to reim-
burse the Union for any dues it may have failed to deduct
from the employees' paychecks and transmitted to the
Union as required by the contract until its expiration-
May 1, 1974 Any loss of earning, because of the failure to
comply with the contract, paid to employees shall include
24 H K Porter Company Inc 397 U S 99 (1970)
2s Tube Lok Products 209 NLRB 666 (1974)
1398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
6 percent interest per annum Isis Plumbing & Heating Co,
138 NLRB 716 (1962)
CONCLUSIONS OF LAW
I Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act
2 The Union is a labor organization within the meaning
of Section 2(5) of the Act
3 By falling to give notice as required by Section 8(d)(3)
of the Act, Respondent has unlawfully disregarded the
terms and provisions of a lawful labor management con-
tract and has thereby violated Section 8(a)(5) and (1) of the
Act
4 By its course of action in interrogating and attempt-
ing to persuade employees to abandon the Union and re-
turn to work, Respondent has violated Section 8(a)(5) and
(1) of the Act
5 By its premature and unlawful termination of the la-
bor management contract, Respondent violated Section
8(a)(5) and (1) of the Act in a number of instances, includ-
ing such specific acts as failure to withhold union dues and
remit same to the Union, failure to meet with the job evalu-
ation committee, failure to process union grievances, fail-
ure to recognize the right of a union representative to be
present at an employee-supervisor meeting relating to dis-
ciplinary action to be taken against said employee, and
unilaterally changing the paydays as well as the workweek
and certain premium paydays
6 The appropriate bargaining unit is All production,
maintenance, and machine shop employees (except ma-
chmists covered by Machinists contract), excluding, how-
ever, clerical employees, executives, guards, professional
employees and supervisors as defined in the amended Na-
tional Labor Relations Act
[Recommended Order omitted from publication ]