Stepan Company

National Labor Relations Board - Administrative Judge Opinions

Feb 21, 2007

04-CA-034417 (N.L.R.B. Feb. 21, 2007)

JD–10-07
Fieldsboro, NJ
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
STEPAN COMPANY
And Case No. 4-CA-34417
UNITED ELECTRICAL, RADIO &
MACHINE WORKERS OF AMERCIA,
(UE), MACHINE TOOL & DIE LOCAL 155
Jennifer R. Spector, Esq.,
Of Philadelphia, Pennsylvania
For the General Counsel
Joseph Cohen, Esq.,
Of Pittsburgh, Pennsylvania
For the Charging Party
Adam C. Witt, Esq., and
David L. Christlieb, Esq.,
Of Chicago, Illinois
For the Respondent
DECISION
Statement of the Case
WALLACE H. NATIONS, Administrative Law Judge. This case was tried in Philadelphia,
Pennsylvania on November 7, 2006. The charge was filed by United Electrical, Radio &
Machine Workers of America, (UE), Machine Tool & Die Local 155 (Union) on January 24,
2006. The Union filed an amended charge on July 20 and a further amendment on July 26.
Region 4 issued Complaint and Notice of hearing on July 31. The Complaint alleges that Stepan
Company (Stepan or Respondent) engaged in certain conduct in violation of Section 8(a)(1), (3)
and (5) of the National Labor Relations Act (Act). Respondent filed a timely Answer, admitting,
inter alia, the jurisdictional allegations of the Complaint.
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel, the Union, and Respondent, I make
the following:
Findings of Fact
I. Jurisdiction
The Respondent, a corporation, engages in the manufacture and sale of specialized
chemicals at its facility in Fieldsboro, New Jersey, where it annually sold and shipped goods
valued in excess of $50,000.00 directly to points outside of the State of New Jersey. The
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Respondent admits and I find that it is an employer engaged in commerce within the meaning of
Section 2(2), (6), 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
As noted above, Respondent operates a manufacturing facility in Fieldsboro, New
Jersey. At all material times, its management at the facility consisted of Hector Cuello, Plant
Manager, Michael Prising, Production Manager, and Charlie Worden, Human Resources
Manager for Respondent’s Millsdale, Illinois plant. At all material times since it was certified on
January 18 or 19, 2005, the Union has represented the employees of Respondent in the Unit
described below:
All full-time and regular part-time production, maintenance and laboratory employees,
including Operators, Production Assistants, Maintenance Mechanics, E and I techs, Warehouse
Employees, Boiler Operators and Lab Technicians employed by Respondent at the Plant;
excluding all other employees, management employees, clerical employees, guards and
supervisors as defined by the Act.
The initial collective bargaining agreement between Respondent and the Union is
effective for the period November 28, 2005 through November 27, 2008. The Complaint alleges
that negotiations leading to this contract were conducted from April 2005 until about May 1,
2006. On or about January 17, 2006, as part of the negotiations, the Union, by letter, requested
the following information:
1. In any year prior to 2004-5, did Stepan Chemicals utilize the Hourly Wage Survey
Data collected by the chemical company association, which you previously supplied
to us, to determine the level of wage increases at Fieldsboro (decreases or freezes)
which it provided to employees now represented by our union? If your answer is
affirmative, please provide us with copies of all of those surveys for each year in
which such survey impacted wage actions taken by the Company from 1994 through
the present date.
2. Copies of any and all additional wage surveys used by Stepan Company in
evaluation and adjusting the wage structure for Fieldsboro employees from 1994 to
the present:
3. A listing of annual wage adjustments (increases, decreases, or freezes) provided to
Fieldsboro employees from 1994 to the present, which includes the following
information:
a. The amount of each such increase or decrease;
b. The effective date of each such increase or decrease;
c. The basis for calculating the amount of such increases or decreases;
d. The classifications which each increase, decrease or wage freeze affected;
e. Notation of years in which no increase was given, along with the reason no
increase was given.
The Union sought additional information in this letter, information which the General
Counsel does not deem relevant or necessary to the Union’s role as the Unit employee
representative. It is alleged in the Complaint that the Respondent thereafter refused to supply
the requested information for approximately two months. From on or about January 24, 2006
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until on or about May 4, 2006, the Respondent locked out it’s Unit employees. The Complaint
alleges that Respondent’s refusal to timely supply the requested information violated Section
8(a)(1), (3) and (5) of the Act and made unlawful the lockout for the period of time that
Respondent withheld the requested information.
A. Evidence Adduced Relating to the Complaint Allegations
1. Evidence Adduced by General Counsel
James Ermi is a field organizer for the International Union. He works with a number of
locals, including Local 155, on contract administration, grievances and contract negotiations. He
was the chief negotiator for the Union in bargaining for the initial contract. At the outset of
negotiations, on April 6, 2005, the Union presented Respondent with a complete proposed
contract, including wage proposals. The Union’s wage proposal represented an attempt to
address what some employees believed to be wage inequities between various job
classifications as well as proposing a five percent wage increase in all wage classifications in
the first year, and four percent increases for the other years to be covered by the proposed
contract. Stepan responded by deferring discussion of economic issues until all other issues
had been settled and did not make a wage proposal until November 30, 2005. In the period
between April and November, 2005, the parties met five or six times a month for bargaining.
Respondent’s bargaining committee consisted of Charles Worden, Stacie Santoleri, and
Mike Prising throughout the negotiations. Sitting in for some of the sessions were the Plant
Managers at the time, Damien Burke and Hector Cuello. At some sessions, Respondent’s
Mayberry New Jersey Plant Manager Don Watson sat in as did the Fieldsboro Human
Resources Manager. The Union’s committee consisted of Ermi as lead negotiator, and
committee employee members Frank Donaghy, Mark Bowman, George Olshansky, Ron
McCullough, Steve Cameron.
Ermi characterized the Respondent’s November 30 wage proposal as outrageous, as it
called for between a twenty five percent and thirty percent wage cut for most job classifications.
During the day of the 30th and the next day, December 1, the parties made a number of wage
proposals and counter proposals. There was some movement by both sides. Ermi testified that
in justification for its wage proposal, Respondent told the Union that it had been paying a
premium wage to the Fieldsboro employees for many years. Ermi added that the Respondent
stated that the wages at Fieldsboro were in the top seven or eight percent of industry wages in
the involved part of the country. Respondent noted that its other unionized facilities were
watching the involved negotiations and Respondent did not want to set a new standard or
pattern for all of its union represented facilities. Respondent also supplied the Union with an
area wage survey involving sixteen or seventeen companies compiled by the Ocean Spray
Cranberry Company.
Ermi testified that at the end of the day on December 1, the parties were not close on the
issue of wages. The Respondent, according to Ermi, was proposing a slight reduction in some
wage classification and/or a continuation of an ongoing wage freeze. The Union was mindful of
an alleged statement by the Respondent during the union organizing campaign in December
2004 or January 2005, that it had budgeted a three and a half percent wage increase for
employees in 2005. A Stepan document that Ermi had seen stated that the increase was
withheld because of contract negotiations. Based on Respondent’s alleged statement, the Union
believed that there were meaningful wage increases to be obtained for the first year of the
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contract.
The next bargaining session took place on December 7, 2005. The parties discussed
wages throughout the day and at the close of the session, Respondent presented the Union
with what it termed its last, best and final offer on wages. The parties left with an agreement to
meet the next day. At the next meeting, the Union counter proposed that the employees in the
wage classifications that Respondent proposed to reduce be red-circled and exempted from the
reductions for the duration of the contract. According to Ermi, the Respondent agreed to red
circle at least some of the affected positions. Ermi also testified that at this meeting, Worden, on
behalf of Respondent, noted that Respondent had not only relied on the Ocean Spray wage
survey, but had also looked at a wage survey taken by the New Jersey Chemistry Council.
Respondent offered to make this survey available to the Union if it wanted to see it. Both
surveys were given to the Union, though a cover page to the Chemistry Council survey was not
provided until on or about January 10, 2006. According to Ermi, Worden modified his earlier
claim that the Fieldsboro employees were in the top eight percent of area employers in terms of
wages to claiming that these employees were in the top ten percent.
Following the meeting on December 8, the Union held a vote and the Respondent’s offer
was rejected. The parties next met on January 10, 2006. At this meeting, Respondent was
represented by Worden, Cuello, Prising and Stepan’s Corporate Vice President Tony Zoglio.
This was the first session that Zoglio had attended. Ermi led the Union’s team as he had
throughout negotiations. The Union intended in this meeting to continue to address the wage
issue and an outstanding issue on benefits. At the outset of the meeting, the Union asked
whether there was an opportunity to have meaningful wage discussions. Worden responded
that the Company had made its final offer on wages, but was open to making some changes
within the framework of the offer. Zoglio then complimented the others on the number of
agreements that had been reached and offered justifications for Respondent’s stand on wages.
According to Ermi, Zoglio told the Union that the Fieldsboro wages were in the top quarter of
wages paid in the area, down from the top eight to ten percent characterizations made by
Worden. Zoglio stated that Respondent’s wage proposal was fair and was produced using the
same criteria that Respondent had routinely used in the past to set wages. These criteria
included wage surveys, plant profitability, industry forecasts for the upcoming years. Zoglio also
noted that the Fieldsboro plant’s sales had been on a steady decline since it lost a major
account a few years earlier.
Ermi’s affidavit to the Board on the subject to wage surveys being discussed at the
January 10 meeting reads:
“Both Worden and Zoglio said something like we’ve give you what we think is a
competitive wage offer, we’ve gone over the surveys, we need to adjust our wage scales”. Ermi
then said, “You guys have had every opportunity to adjust your wage scales for umpteen years.
Obviously, the company chose to pay the rates that it’s paying now. The only intervening event
we’re aware of was the January 6th vote for the men to join the union. Now you’ve decided that
you were paying these guys too much and you need to cut it or at least hold them.” “Zoglio said
Fieldsboro had seen a $9 million annual profit and loss before they lost Clairol [a major
account], and it had been a straight line annual decline since then.” Zoglio continued, “We’re
simply not going to pay the premium wages that we have in the past. We have done some
benchmarking, as we routinely do on wages in the South Jersey and Philadelphia area, and that
research puts Fieldsboro wages in the upper fourtile. We see our offer as a very livable contract
without any take-backs.” According to Ermi, the forgoing quotes are all that was said at the
meeting about profitability and surveys. Ermi admitted that Zoglio did not say the company had
used past wage surveys to make its contract proposal on wages. Ermi clearly believed that
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Respondent had historically relied on wage surveys when setting wage rates and had held that
belief since at least November 30, 2005. His notes of that bargaining session reflect that he
stated during that meeting: “I’m sure the company looked at wage surveys when you set up the
current wage structure many years ago.” On redirect he seems to contradict himself by testifying
at that point in his examination that he did not really believe that Respondent had used wage
surveys in determining wages prior to 2005.
Also on January 10, the Union filed a ULP charge alleging the Respondent failed to
implement the 3 and ½ percent across the board wage increase promised during the Union’s
organizing campaign in retaliation for other charges filed by the Union and in retaliation for the
employees’ voting in the Union. This charge was ultimately dismissed by the Region or
withdrawn by the Union. The Union had previously filed a charge alleging that the Respondent’s
wage proposals were made in retaliation for earlier charges filed. Ermi agreed that to make a
determination on the merits of these charges, it would be important to know what the Company
had done in terms of wage increases and how the Company determined to give wage increases
in the years before the employees elected the Union. Ermi agreed that the information sought
on January 17, 2006 related to the allegations in the charges the Union had filed.
On January 10, the Union proposed red circling employees who stood to have a wage
cut in the first year of the proposed contract and making a lump sum payment to employees in
lieu of an across the board wage increase. Nothing was agreed upon in this regard and the
Union then threatened to file additional charges with the Board based on the failure of
Respondent to live up to its electioneering statement that it was going to give employees a three
and a half percent wage increase in 2005. Ermi testified that he also said that what had
transpired at the meeting might generate some additional information requests. This latter
alleged statement is not mentioned in Ermi’s affidavit to the Board given in connection with this
case.
A couple of days later, the Union made the information request which is at the heart of
this proceeding. Ermi testified that the Union wanted the surveys the Respondent had used to
formulate its wages in the recent past and the current wage proposal. When asked on cross
examination why it wanted this information, Ermi testified that one reason was to determine
Zoglio’s credibility. Ermi testified that the Company told them in negotiations that it was not
claiming an inability to pay with regard to the wage issue.
Following the January meeting on the 10th, the Union conducted an unannounced 24
hour strike commencing at midnight of January 23. It characterized the strike as an unfair labor
practice strike. Ermi told Respondent that the only reason for the strike was Respondent’s
refusal to supply information on its investigation of the alleged harassment committed by
employee George Kudamaris that led to a warning. The warning was the subject of a grievance.
The strike ended when Ermi and other union officials and members showed up at the plant at
about 11:30 pm on the 23rd and used a phone at the plant’s gate to reach Prising. Ermi asked
Prising if Hector Cuello could come to the gate to meet him. When Cuello met with him, Ermi
announced that the strike was ending and the employees were making an unconditional offer to
return to work.1 Cuello informed Ermi that Respondent had decided to lock the employees out.
Cuello suggested that if Ermi wanted to talk further about the lockout, he should speak with
Worden. Using his cell phone, Ermi called Worden and reiterated the Union’s unconditional offer
to return to work.

1 The Union did not tell the Company it would not strike again.
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According to Ermi, Worden listened to Ermi and then asked if he could call him back as
he was nursing a sore throat and needed to take something if he wanted to continue talking.
According to Ermi, he again offered to return to work and Worden responded, “Well, you know
what, we have a company to run, we’re tired of all the bullshit games, the guys are locked out.”
Ermi testified that he inquired about what ‘games’ Worden was referencing. Worden replied,
“Well, all this stuff with the sick-out, the Board charges, and you know, everything, it’s just
everything. We’ve got a company to run. We have customers we have to satisfy.”2 Ermi testified
that he then said, “Charlie, I’m just asking you for more information. There are other Board
charges already filed that are being investigated. We just asked you for information. Have you
responded to that yet?” Worden responded that he believed that something had been mailed.
Ermi stated the he had not received anything. Worden said that the response went out on Friday
and Ermi noted that he had not been in his office all day and it might be there. He asked for time
to review the response and Worden again told him that the employees were locked out.
The following day, Ermi went to his office and read Respondent’s response to the
information request. Ermi characterized the response as a refusal to supply the requested
information. Ermi testified that at the time the lockout began the Union had not been supplied
with the information it wanted. Ermi also testified that if the information had been supplied and
supported Zoglio’s claim that there was a connection between the wage surveys for each year
and the wages set for each year, then the Union’s bargaining position would have been
affected. He testified that it would likely have forced the Union’s bargaining team to reevaluate
its wage proposal. If the surveys did not support Zoglio’s claim, then the Union would have dug
in even deeper in support of its proposal.
Respondent’s reply to the information request reads:
“I am in receipt of your letter of January 17, 2006. In that letter, you request voluminous
information regarding wage increases or adjustments, and the reasons for those increases and
adjustments. Of course, you have already filed a Charge with the NLRB regarding inter alia, our
proposals on wages, the reasons for those proposals, and an alleged failure to provide a
scheduled raise in wages. You knew of Stepan’s use of wage surveys, as well as our
profitability concerns, no later than November of 2005. However, it was not until you had filed
NLRB charges on these issues that you requested any further information. In fact, your
information requests largely mirror the requests for information we’ve received from the Region
in regard to these charges.
Thus, it is clear that your “information request” is nothing more than an attempt to
conduct discovery regarding your pending NLRB charges. As such, under established NLRB
precedent, we are under no duty to provide you any such information.
Please feel free to contact me with any questions or concerns. Also, we are still waiting
for your reply from our last meeting of January 10, 2006.”
Following their telephone conversation of January 23, Worden wrote to Ermi the
following:

2 On cross examination, Ermi admitted that Worden had not mentioned the Board charges in
this conversation, and further, that he Ermi, had in fact, asserted to Worden that the Board
charges were the reason for the lockout. Worden denied this assertion in the conversation.
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“I am writing to confirm our conversation from the night of January 23rd and in response
to your letter of today’s date. During our conversations, you indicated to me that the employees
were interested in ending the strike that the Union had initiated the night before, and that they
were willing to return to work at 12:00 am. I indicated to you that the Company was locking out
all bargaining unit employees at Fieldsboro as of 12:00 am. I explained the reasons for this
action to you as follows:
The Company put a good faith, Best and Final offer on the table back in December and,
when the employees voted it down, we received no additional proposals from the Union. Indeed,
as I stated to you, I left a message for you a week ago that we had expected to hear something
from the Union on or before January 20th (based upon your assurances to us when we met on
January 10th). Instead, we received an inappropriate information request and, subsequently, the
Union called employees out on strike. While the Company sent you a response to the
information request, you indicated that the Union had not yet reviewed it, as you had been on
the picket line.
Since the ratification vote, we have seen nothing but game-playing from the Union, and I
informed you that the Company is tired of waiting for this issue to be resolved. We must ensure
that we meet our customers’ needs, and, to do this, the Company requires a regular workforce
and labor peace. The lack of a contract and, consequently, the absence of a no-strike provision
(among other things) puts these requirements in jeopardy and, therefore, endangers the
Company’s business.
While you misinterpreted my explanation, accusing the Company of locking-out
employees in retaliation for the strike, I assured you that this was not the case. The Union’s
strike was simply the last straw in the Union’s game-playing. The Company cannot do business
under constant threat of intermittent strikes. Simply put, for the reasons explained above, the
Company must run its business and ensure that the needs of its customers are met.
Finally, in your letter of today’s date, you claim that the Union “requires” the information
requested in your January 24th letter “to meaningfully respond in bargaining to proposals and
statements made” by the Company representatives at our January 10th meeting. I fail to see
how this could be the case. After all, the profitability and wage surveys in question were
discussed in detail at the bargaining table. The surveys in question were provided to you.
Furthermore, the Company provided you with a presentation and detailed data on the
profitability issue. The Union never asked for additional information; nor did the Union indicate
that it was in any way hampered in its bargaining through a lack of any additional information.
Nothing has changed at the bargaining table such that the Union would now need this
information, especially given that you never asked for it previously.
In fact the Union did not request this information until after it had filed an unfair labor
practice charge regarding precisely these issues. This is not a coincidence. The Union is simply
seeking this information in an attempt to discover evidence concerning its charges against the
Company. As you know, this is improper. Thus, our response , as detailed in my prior letter to
you, remains the same.”
Following this letter, there was no communication between the parties until Ermi and
Worden spoke at the end of February or the first of March. The two men met and Worden gave
Ermi annual changes to the corporate wide employee health plan. Worden explained that the
changes were about to go into effect and he did not want the Fieldsboro employees to be taken
by surprise. Ermi remembered there was a passing comment made about the outstanding
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information request.
On the 22nd or 23rd of March, Ermi received another response to the information request.
In the letter accompanying the information provided, Worden wrote:
I am writing with regard to your Information request of January 17, 2006. As you know,
Stephan declined to provide you with the information requested therein, to the extent that you
did not already have it, on the grounds that it was clearly intended as a discovery device in
support of certain of the unfair labor practice charges that the UE had previously filed against
the Company. We have since been advised by Region 4 of the NLRB that the specific charges
in question will be dismissed. For that reason, I am enclosing herewith the information you have
requested.
In producing this information, you should be specifically aware that Stepan is in no way
waiving any right or ability to contest the merit of the UE’s charge concerning this issue, or any
other issue, before the NLRB. We continue to believe that the UE’s charges are without merit.
Further, the Company is in no way conceding that this information is at all relevant or necessary
for the purposes of collective bargaining. Quite the contrary, for example, you indicate in your
January 17th letter that you seek wage survey information from prior years to evaluate the
“impact” of wage surveys on the Company’s “current” wage proposal. As you are aware from
our discussions at the table, however, we did not refer to any wage surveys other than those
discussed at the table to develop the Company’s current wage proposals.” (The letter then goes
on to answer the specific questions posed by the January 17 letter).
The parties next met for bargaining on March 24. On the evening before this meeting,
Ermi, Worden and Union Representative Gene Elk met for a discussion. According to Ermi,
Worden expressed his angst about the situation that existed and said that Respondent had the
ability to rework some of the wage offer. Ermi testified that Worden said he could take a nickel
or so out of the second and third year proposals and put that money into the first year. The men
also talked about putting profit sharing back on the table. Worden told Elk and Ermi that profit
sharing might get back into the mix and he was giving them a “heads up” before they formally
met to bargain. When they did meet on the 24th, profit sharing was put back on the table, but no
real changes were made to the wage proposal. At this stage, there were also outstanding issues
relating to short term disability and the employees contribution to health care. Both were
considered by Ermi to be important issues.
There was no discussion of the information that Respondent had provided in response to
the January 17 letter, other than the Union representatives noting that it had the information with
them.
Subsequent to this meeting, as part of discovery for a New Jersey unemployment
compensation hearing, the Union acquired a spread sheet detailing the costs suffered by
Respondent as a result of the lockout. The document shows the estimated cost of the lockout as
of March 31 to be about 1.8 million dollars. The Union copied the document and then distributed
it to Stepan shareholders who attended the Company’s annual meeting on or about April 25.
Copies were also given to the Company’s operating officers in attendance at the meeting. Ermi
was of the opinion that the Company executives were unaware of this document until the Union
gave it to them. Two days after the shareholders meeting, Worden called Ermi and asked for a
meeting. The parties then met on May 1. Appearing for the company at this meeting were
Worden and Zoglio. According to Ermi, the two men made it clear they wanted to settle the
dispute once and for all. During the day, the Respondent and the Union reached agreement on
all outstanding issues. The evening after the agreement a couple of issues surfaced that
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needed attention and thus the parties met the next morning and worked through the issues.
The final agreement on wages was close to what had been proposed by Respondent in
January, but with what was called a schedule premium that amounted to almost a 3 percent
increase for all but five or six people in the bargaining unit. There was also a $1000 signing
bonus paid to the employees upon ratification. The five men in the maintenance department
who were not getting an hourly increase received a $1250 signing bonus.
2. Evidence Adduced by Respondent
There are no serious differences in the evidence put in the record by General Counsel
and Respondent. There are some minor variations, but they do not affect the outcome of this
proceeding. General Counsel disputes some testimony by Respondent’s chief witness to the
effect that he noted in either the November or December 2005 bargaining sessions that
Respondent had historically used wage surveys as part of the process of setting Fieldsboro
wages. Whether he noted this or not makes no difference in the decision making process.
Charles Worden is Human Resources Manager for Respondent’s Millsdale plant, located
in Elmwood, Illinois. Worden resides in Plainfield, Illinois. Prior to this position, he had been
corporate labor relations manager from 1999-2004. Stepan manufactures surfactant chemicals,
which are used in soap products and fabric softeners, and specialty chemical products. The
Fieldsboro plant makes surfactants. As Worden was the most experienced negotiator with
Stepan, he was made chief negotiator for the Respondent in the involved negotiations. The
Respondent has a bargaining relationship with the Union at its Anaheim, California plant. The
Fieldsboro bargaining unit has 38 employees, with the job classifications of operators, boiler
operators, warehouse employees, laboratory technicians and maintenance employees.
Before negotiations for the first contract commenced, the Union requested certain
information from Respondent including information relating to pay differentials and premium
pay, the current hourly rate of pay, and raises given during 2004-2005. Respondent supplied
this information. The parties met to negotiate 33 times between April 6, 2005 and May 2, 2006.
Worden traveled from Illinois to the Fieldsboro plant for each of these sessions, staying from
two to ten days each time. The Company’s final offer given to the Union on December 7, 2005,
came after the parties had met 29 previous bargaining sessions. As of the December 7 meeting,
the parties had reached tentative agreement on, inter alia, the following subjects: union security,
dues check-off, number of stewards, pay for employees on the bargaining committee, bulletin
boards, pay for holidays worked, need for approval for holiday pay in certain circumstances,
safety shoes, provision of uniforms, seniority, overtime and premium pay, limitation on hours
worked consecutively, hours of work, break time, a job bidding system, meal breaks and meal
allowances, a just cause standard for discipline, limitations on the use of verbal written
warnings, a grievance and arbitration procedure, bereavement pay, leaves of absence and plant
closure severance pay. Each of these subjects had been requested by the Union and the
agreement on each constituted a change in Respondent’s prior practice. As of December 7, the
open issues were: employee healthcare contributions, short term disability payments, personal
and sick days, attendance bonus and wages.
With respect to employee healthcare contributions, Worden testified that there had been
many proposals on this issue. As of December 7, 2005, the Company was proposing as the
maximum yearly employee contribution 22 percent for the duration of the contract, and the
Union proposed 15 percent for the first two years of the contract and 20 percent for the final
year. With respect to the short term disability issue, the Union proposed keeping the plan the
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Respondent had prior to negotiations and the Respondent proposed dropping the plan and
having employees use the New Jersey state temporary disability plan with a Company paid
supplement of $150. With respect to personal and sick days, the Respondent was offering three
days and the Union wanted five days. On the issue of an attendance bonus, the Union wanted
six hours of pay and the Company was offering five hours of pay.
Worden testified that discussions of the wage issue began on November 22, 2005 and
that the Respondents use of wage surveys was discussed on that date. Respondent on that day
offered the Ocean Spray wage survey which covered the wages and benefits of some nineteen
companies in the area of Fieldsboro. The Respondent also offered information on some four or
five other area companies that had given Respondent information about their wages and
benefits. Worden testified that this information was supplied to the Union as the Company felt
the Union’s wage proposals were out of line and high when compared with wages and benefits
being paid by companies in southern New Jersey. Worden also testified that the Fieldsboro
employees were already being paid more than employees working at Respondent’s unionized
Anaheim California plant.
According to Worden, at the December 7, 2005 meeting, the parties talked about wage
surveys the Company had used in the past and he specifically mentioned information obtained
from the New Jersey Chemical Industry Council. Worden believed that he mentioned that the
Company had used such surveys in the past to evaluate wage increases at Fieldsboro. Worden
testified that employee bargaining committee member McCullough responded that it did not
make any difference what the wage surveys said.
At one of the meetings in November and December, 2005, employee bargaining
committee member Jeff Thomas presented the Company with a cover page from a website
showing wage rates for 27 companies, only three of which were considered peers with Stepan.
Worden testified that Respondent went to the website and found that there were more than
three companies with operations similar to Stepan’s. Respondent then asked the Union to
provide more information with respect to those companies so that Respondent could compare
their wages with those paid by Respondent. The Union did not provide this information.
Respondent introduced all proposals made by the parties with respect to wages. The
company’s first wage proposal was given to the Union on November 30 and reflects first year
wage rates for the various job classifications ranging from a low of $21.76 an hour for
warehouse employees to a high of $25.42 for laboratory technicians and “A Operator-
continuous.” Respondent proposed raises of 58 cents per hour in each of the following two
years. The Union rejected this proposal and the Company came back with another one. This
one ranged from a low of $22.74 to a high of $26.00 for the first year with the same 58 cents
raise in the following two years. The Union countered with a wage scale that ranged from a low
of $26.50 per hour to a high of $28.50 for the first year, and raises and an approximate 85 cents
per hours increase in the last two years. This counter proposal was made either late on
November 30 or early on December 1. The Respondent then countered with wage rates ranging
from a low of $24.30 to a high of $26.20 and increases of 60 cents per hour in each of the
following two years. The Union countered with a proposed rate that ranged from $24.43 to a
high of $28.50 with most classifications receiving $27.00 per hour or higher. It also proposed
increase of about 80 cents per hour in each of the succeeding two years and a shift premium of
75 cents in the second year and 85 cents in the third year. Worden was unhappy with the Union
counter as it reflected very little movement.
The Respondent made yet another counter and the Union responded with one of its
own. Worden testified that this counter had an increase from the first counter. Respondent then
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made another counter offer with wage rates ranging from a low of $23.00 to a high of $26.25
with a raise of 60 cents per hour in the following two years. The Union made no counter, but
rejected Respondent’s counter. Respondent countered yet again with a wage scale that ranged
from a low of $23.20 to a high of $26.90 with a 65 cent per hour raise in the second year and a
60 per hour raise in the third year.
On December 7, the Company made what it termed its last and final offer on wages.
This offer proposed wage rates ranging from a low of $23.30 to a high of $27.00 with increases
in the last two years of 65 cents each year. The Union countered this offer with wage rates
ranging from a low of $24.07 to a high of 27.23 and increases of approximately 80 cents per
hour in the last two years. The Respondent rejected this counter and asked the Union to submit
Respondent’s last offer to the membership for a vote. By way of comparison of the competing
proposals as of December 8, 2005, the differences in hourly wages by classification for the first
year is as follows:
Lab Tech 75 cents
A Operator-Continuous 86 cents
B Operator 87cents
Warehouse $2.85
Production Assistant 77 cents
E & I Tech 83 cents
Mechanic A 83 cents
Mechanic B 87 cents
Boiler Operator Blue 87 cents
Boiler Operator Black 87 cents
One employee in the warehouse was to have his current wage red-circled and be
unchanged.
At no point in the bargaining about wages did the Union indicate to Worden that it
needed more information about the Company’s use of wage surveys. No one from the Union
indicated that they were lacking any information regarding wages, wage history or plant
profitability. The subject of Respondent’s 2004 wage freeze was discussed often. On December
8, 2005, employee bargaining committee member George Olshansky indicated to Worden that
the employees might go strictly by procedures which meant to Worden that there would be a
slow down in what was being done in the laboratory.
After the last offer was voted down, the parties met on January 10, 2006. Worden
remembers Zoglio saying that Respondent had used wage surveys in the past, had
benchmarked with wage surveys in the past and used them routinely in figuring wage increases
given to employees. According to Worden this was no different that what he had discussed with
the Union in the November – December, 2005 meetings. The matter of the loss of Clairol
business and the loss of some business from Unilever was first discussed in bargaining on
October 18, 2005. At that meeting Respondent made a presentation on the plant’s profitability
and financial state of the Fieldsboro operation. The loss of the Clairol and Unilever business
was part of this presentation.
At the January 10 meeting, the Company made no proposals with respect to wages, and
the Union did not request any wage history, wage survey information or information about
profitability. Worden testified that no one from the Union mentioned that they might seek further
information. At the meeting on January 10, the Union requested the cover letter for information
supplied it by Respondent on December 7. This letter was provided. The meeting ended with
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the Respondent waiting to hear from the Union. As noted earlier, the Union filed a charge with
the Board on January 10, 2006. Subsequently, on January 11, Respondent received a letter
from the Board requesting certain information related to the charge. Some of the information
requested by the Board is similar to information requested by the Union on January 17. In this
regard, the Board asked for a) A listing showing employee wage increases for the years 2000-
2005, showing date, names and classifications of employees and amount of wage increase; and
b) any documents related to the Employer’s decision to give or not to give a wage increase in
2005.
When Worden received the Union’s information request on January 17, 2006, he was
upset as he felt it was very similar to the information being sought by the Board in its
investigation of the Union’s charges. He further believed the Union was seeking this information
to bolster its case in support of its charges.
Worden, in an explanation for the Respondent’s lockout, noted that the Union on
November 8 and 9, 2005, had eighteen employees (almost 50% of the unionized work force)
call out sick. There had never been a mass call out before. At the next negotiating session,
Worden warned the Union that such action was not going to help negotiations and stated that it
should stop. The call out required Respondent to shut down part of the plant and/or run it with
salaried employees. The Union set up a “practice” picket at the plant on January 13, 2005.
Union members picketed with signs saying “Practice Picket, UE Local 155.” Next, the Union
engaged in a one day strike on January 23, 2006. The Respondent was forced to shut down the
plant totally for the 24 hour period of the strike. According to Worden, in his conversation with
Ermi at the strike’s conclusion, he told Ermi that the employees were being locked out because
of the sickout out and the one day strike. He added that the Company needed to run its plant
and needed labor peace. Worden denied mentioning the Board charges filed by the Union in his
discussion with Ermi. Worden hoped that the lockout would lead to a contract with the Union. All
of the bargaining unit employees were locked out though some had crossed the picket line
during the strike.
Worden testified that the Company needed to be able to service its customer and run its
plant without interruption. It brought in employees from all over the United States and kept the
plant running. On or about January 24, 2006, Worden received a letter from Ermi. This letter
reads:
“I am writing this letter to confirm our telephone conversation late last night and to
reiterate that our union and members repeatedly and unconditionally offered to return to work
last night. During my conversation with Plant Manager Hector Cuello and during my second
telephone conversation with you, Stepan responded by stating that until further notice our
bargaining unit members are not permitted to return to work.
In the event that you disagree with the above, please contact me as soon as possible so
that the union is aware of the specific nature of your disagreement with the above statements.
Please be further advised that I am in receipt of your letter [of] January 20, 2006, in
which you claim that Stepan is “under no duty [to] provide . . . information” which I requested on
January 17. Again, I must reiterate that the union requires the information requested in that
letter to meaningfully respond in bargaining to the proposals and statements made by your
representatives on January 10, 2006 that its wage offers were based on company profitability
and an area wage survey. I would therefore request that you reconsider your position and
provide the union with such information as quickly as possible so that the union may intelligently
respond to your proposals.”
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Ermi never provided any other reason for needing the information requested on January
17, 2006.
On February 16, 2006, Worden sent a letter to all Fieldsboro employees. The first two
paragraphs of the letter explain COBRA benefits for the locked out employees. The remainder
of the letter sets out the Company’s reasons for the lockout and expresses hope that it would
end soon with the signing of a contract. Prior to sending the letter, Worden met with Ermi
showing him the letter and asking if there was any hope for an additional bargaining session.
Ermi said that the Union’s position was unchanged. Ermi asked if the Respondent’s position had
changed and Worden said it had not. Ermi then said there was no sense in meeting.
Worden next talked to Ermi on March 14. Worden was at the Fieldsboro plant and called
Ermi to see if there was any sense in trying to meet and attempt to arrive at a contract. Ermi’s
response was similar to his response on February 16, and no meeting was scheduled.
Ermi called Worden on March 17 and requested a meeting and one was scheduled for
March 24, 2006. On March 20 or 21, Worden called Ermi and asked if they could meet on the
evening of March 23 to discuss some ideas that Worden had to get the parties to a contract.
During the calls of March 14 and March 17, Ermi mentioned nothing about his outstanding
information request.
On March 23, 2006, Worden met with Ermi and Elk. They talked about the outstanding
issues and Worden indicated that he might move some things around in Respondent’s proposal
to make it more appealing to the Union. In the meeting held the next morning, Respondent
capped its proposed employee health care contribution at twenty percent, down from its
previous 22 percent proposal. Respondent’s work performance proposal was dropped and in its
place a proposed schedule premium of 50 cents per hour was proposed. It changed the amount
that the employee bargaining committee members would be paid for their participation in
negotiations. It red-circled four employees who were already making more that the rates
scheduled in Respondent’s final offer. It increased the hourly wage proposals for the first year
by ten cents, taking five cents from each of the wage proposals for the next two years. It also
made an adjustment for weekend coverage by maintenance employees. It also made a
proposal on shift differential. The Union made no new proposals at this March 24, meeting.
Following the meeting it made a counter offers on various items, all but one of which was
rejected by Respondent. Respondent did agree on a proposal that maintenance employees
received 4 hours of pay at their regular rate for each week of on-call coverage. This pay will be
in additional to any pay they received for hours actually worked.
The Union took a vote on the modified final offer and rejected it by vote of 19 to 16.
When Worden was advised of the vote, he offered to add profit sharing to Respondent’s final
offer. The Union rejected this proposal. On March 29, 2006, Worden sent a letter to the Union
which detailed the changes Respondent had made to its last offer on March 24 and pointed out
that the profit sharing feature which it proposed to add amounted to 1.9 percent of base salary
in 2005. It also offered to move the effective date of the contract back to November 2005. It also
pointed out that in a conversation with the Union on March 27, Worden had set a deadline of
March 27 for the Union to accept the modified final offer or the Respondent would revert to its
previous final offer, made December 7, 2005. In the letter, Worden rescinded the deadline and
announced the modified offer was to remain the Company’s final offer. He then asked for further
discussions about the contract and for the Union to hold another vote.
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At no time during the meetings of March 23 or 24 did the matter of the information
request surface.
On April 10, 2006, Worden sent a letter to the bargaining unit employees pointing out the
value of the profit sharing feature which Respondent had added to its proposal and urging the
employees to prod the Union into another vote. Worden testified that he sent the letter to make
sure the rank and file employees knew of the profit sharing proposal.
Worden next contacted Ermi on April 26 or 27 to set up another meeting. They agreed to
meet on May 1. At the meeting were Worden, Zoglio, Ermi, and three employee negotiating
committee members. Zoglio told those present that they needed to get the contract settled. He
asked the employee negotiators to write down on note cards the top three or four items standing
in the way of finalizing the contract and that he would address them, noting that the parties
would stay until a contract was reached. The employee committee came up with five items:
short term disability, wages in the first year, the attendance bonus, shift differential, and one
other that Worden could not recall. The company then made a proposal addressing these
issues.
It increased the supplement for short term disability from $150 per week to $200 per
week. It added profit sharing, beginning January 1, 2007, to the final offer. It put back in the
work performance bonus at 4 hours pay. The wages in the first year remained the same, but
Respondent agreed to a 2.5% increase in year two and another 2.5% increase in year three. It
raised the schedule premium from fifty cents to seventy five cents. It also added a one time
$1000 payment in lieu of profit sharing for 2006. This constituted the changes to the last offer.
As Ermi noted, the $1000 payment was raised to $1250 for certain employees following the
meeting. This final offer was ratified by the employees.
At no time did the Company ever condition the end of the lockout on employees
resigning their Union membership, or on the withdrawal of the parties’ tentative agreement on
union security or dues check-off. There was never a threat by the Company that employees
could not return to work when the lockout ended. In fact, all thirty eight unit employees did return
to work.
Michael Prising, Respondent’s Production Superintendent at Fieldsboro, testified about
the Union’s activity leading to the lockout, mentioning the sick out, practice picketing and the
unannounced one day strike. He noted that at the time of the sick out, the Company was
making a special product and the sickout nearly caused the product to be ruined. Respondent
had to shut down all of the plant operations to have enough employees to make the involved
product during the sickout. The product is important to Respondent and is only made twice a
year.
During the practice picketing, a couple of tank trucks refused to cross the line and had to
be rescheduled.
With respect to the one day strike, Prising received a call from the on-call supervisor at
the plant about 11:00 pm. He had received a call from the Union’s chief steward saying the
Union was going on strike at midnight. Prising came into the plant about 11:30 pm and
attempted to find out the status of equipment and processes at the plant. In anticipation of the
strike, the employees had shut down the equipment by the time he arrived. Respondent’s
management spent the next day planning how to get back up and running. It pulled twenty to
twenty five employees from other locations and had them come to the Fieldsboro plant. During
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the strike, Prising went to the gate and was told the strike was a ULP strike in protest of the
discipline given employee George Kudamris and the refusal to supply information related to the
discipline.
Robert Mangold is Vice President of Stepan’s North American plant operations. He gave
a presentation during negotiations on October 18, 2005.At this presentation, he showed the
sales and financial data for all the Company’s North American operations, highlighting
Fieldsboro. It reflects a steady decline in the plant’s profitability and reflects that Fieldsboro had
the worse performance of any of Stepan’s plants from the standpoint of sales and profitability.
After the presentation, and up to January 17, 2006, the Union did not request any additional
information regarding the plant’s profitability.
Referencing the exhibit reflecting the cost of the lockout, Mangold testified that the
expenditure was worth it because it needed to continue to meet its customer’s needs. Any loss
of customers could be very expensive to the Company. The Company also went into lockout
mode because of safety concerns. Starting and stopping a chemical plant is very dangerous
and the Company could not rely on an intermittent work force. He testified that if an accident
occurred the costs associated with it could run into the millions. These reasons caused the
Company to institute the lockout until a contract and labor peace were achieved.
Anthony Zoglio is Respondent’s Vice President for its supply chain. With respect to the
January 10 bargaining session he attended, Zoglio testified that he mentioned “benchmarking”
as something done at all contract negotiations conducted by Respondent. He also noted the
business lost as a result of Fieldsboro losing the Clairol and Unilever accounts. This loss
caused the Respondent’s profit at Fieldsboro to drop from $9 million annually to $1 million
annually. He testified that the Union mentioned a wage freeze often in this meeting, claiming
that some employees had had their wages frozen for three years. Because of this alleged wage
freeze the Union was only interested in wage increases.
Zoglio was involved in the decision to lockout the Fieldsboro employees. He mentioned
as reasons for the lockout the same reasons articulated by the other management witnesses.
On March 6, he caused a letter to be sent to all Fieldsboro employees. This letter reads:
“The UE has made a lot of baseless accusations. In NLRB charges and otherwise, about
Stepan’s conduct during the course of negotiations. They claim that we locked employees out
as ‘punishment’ for organizing a union; that the Company seeks to impose a ‘wage freeze;’ and
that Stepan refused to bargain in good faith for a contract. I want you to know that the Company
has been careful to ensure that all of its actions throughout this process have complied with the
law. As such, we are comfortable that the NLRB will fully vindicate Stepan.
As Charlie Worden explained to you in his last letter, the employees have been locked
out because we need to be able to provide uninterrupted service to our customers without the
threat of intermittent work stoppages (e.g. the sickout and the 24 hour strike), and because we
want agreement on our proposal. The lockout has nothing to do with your having organized a
union. Think about that. Between April and December of 2005, Stepan went to the time and
expense of meeting with the UE bargaining committee on 30 separate occasions in the hope of
agreeing to a contract. Why would we have done this if we wanted to ‘punish’ the employees for
organizing, or if we didn’t want a contract with the Union?
We do want a contract. To that end, in those 30 bargaining sessions, Stepan and the UE
were able to reach tentative agreement on 26 separate Articles for a new contract. Those
agreements included an increase in your holiday pay; increase in your shoe allowance;
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provisions for uniforms, lab coats, and jackets; increases in premium and overtime pay;
increase in your meal allowance; extension of bereavement leave; increase from zero to three
personal days with pay; dues check-off directly to the Union; a union security clause; layoff and
recall by seniority; just cause discipline with binding arbitration; and severance in the event of
plant closure.
Stepan has not proposed a ‘wage freeze.’ On wages, the Company proposed increases
of between 4.8% and 5.5% over a three year contract. On health insurance, the Company
proposed to cap increases to employee’s co-payments (to restrict the Company’s ability to
increase) at 22%. On Short Term Disability, the Company proposed the benefits provided by the
New Jersey Temporary Disability Benefits Law, plus $150 per week supplement up to 26
weeks.
We think that these proposals represent a contract worth voting for. Otherwise Stepan
would not have proposed it. In fact, with the wage proposal we have on the table, Fieldsboro
employees would remain in the top 25% for wages paid to chemical workers in the Fieldsboro
area, even under the wage surveys reference by the Union. The fact is, the Company wants you
back to work under a fair contract just as much as you do, and this can happen as soon as your
certified bargaining representative, the UE, agrees to our proposals.”
Zoglio was present at the annual Stepan shareholders’ meeting in April. He testified that
several Union employees asked questions of management. These questions raised the alleged
wage freeze and the cost of the lockout. After the meeting Zoglio met with these employees. He
was struck by their level of concern and determined to have a meeting with the Union’s
bargaining committed to reach a contract. They did meet and an agreement was finally reached.
B. Findings and Conclusions
The result in this case turns on whether the Union’s information request was necessary
and relevant to its role in bargaining for a contract or, conversely, was wanted to support its
unfair labor practice charges filed with the Board. I firmly believe that the information was sought
solely for the latter purpose. Respondent did use wage surveys in preparing its wage proposals
for the negotiations and it timely supplied the surveys used in this regard. Its historical use of
surveys had nothing to do with its current wage proposal and everything to with the Union’s
allegations of unfair labor practices concerning the alleged wage freeze and Respondent’s
refusal to honor a wage increase allegedly promised during the campaign which resulted in the
Union’s selection as bargaining representative of the involved unit of employees. It is telling that
when the Union received the requested information, it made absolutely no use of the information
in the continuing negotiations.
The Union gave no credible explanation of how the information it sought related to the
ongoing contract negotiations or why its absence would preclude meaningful bargaining. As can
be seen from the facts set forth above, the parties had reached agreement on many substantive
issues and were clearly not near impasse on the remaining issues. There were still outstanding
issues other than wages over which the parties could have bargained had the Union chosen to
do so. Moreover, there was no reason the Union could not have bargained over wages in the
absence of the requested information. The Respondent had shown movement on the wage
issue. On the other hand, the information request was clearly related to the charges it filed with
the Board. The Union had filed Section 8(a)(3) charges alleging that the Respondent had
retaliated or discriminated against employees by failing to provide a 3% wage raise in 2005 and
by lowering its wage proposals at the bargaining table. One of the primary methods for
investigating allegations of discrimination or retaliation, absent direct evidence, is to determine
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whether the employer acted differently in similar situations prior to the “triggering event” that
purportedly caused the discrimination and/or retaliation. See, e.g., Pipefitters Local 198 Trust
Fund, 322 NLRB 112, 120 (1996). In this case, the “triggering events” would have been the
representation election (in the case of the Respondent’s purported failure to give employees the
“promised” 3% increase) and the first unfair labor practice charge file by the Union on November
17, 2005 (in the case of the Respondent’s purported retaliatory wage proposals).
Thus, to investigate the Union’s allegations of discrimination and retaliation, it would
make sense that the Union, and the Region for that matter, would look to Stepan’s wage
increases, and the reasons for those increases, prior to 2005, to ascertain whether they differed
in any way from the Company’s post-“triggering event” conduct so as to infer discriminatory or
retaliatory motive. The Region sought just that type of evidence in its information request of
January 11, 2006. The letter from the Region asked for, inter alia:
Employee wage increases(including effective dates) for the years 2000 through 2005;
and:
“Any documents related to the Employer’s decision to give or not give a wage increase.”
In the Union’s January 17, 2006 letter, it requested nearly identical information (albeit for
a longer period of time).
Both the timing of the Union’s information request and the information sought strongly
support Respondent’s position that the requested information was sought solely to support its
unfair labor practice charges and for no other reason. I totally agree.
As the Union’s motive in requesting the information had nothing to do with current
negotiations but was intended as a means of discovery to bolster its alleged Section 8(a)(3)
violation charge against Respondent, I find that Respondent was lawfully allowed to refuse to
comply with the information request. In Union-Tribune Publishing Co., 307 NLRB 25 (1992), the
union filed a charge against the employer, alleging that the employer had discriminated against
an employee in violation of Section 8(a)(3) by suspending and then terminating him. The
employee asked for information regarding the suspension and termination, and the employer
refused to provide it, citing the fact that there were unfair labor practice charges on the issue.
In upholding the employer’s refusal to provide the information, the Board explained that:
“…the rule is that an employer faced with a pending 8(a)(3) charge may legitimately
decline to provide to furnish information that may relate to the charge prior to the hearing. It
follows that an employer who declines to provide information on that basis, as the Respondent
did, has a valid motive for doing so.”
Id. at 26. “Any other rule,” according to the Board, “would, in effect, impose a discovery
requirement where none otherwise exists.” Id. Indeed, the Board held that the employer was
justified in refusing the information request because: “…[the] employer could reasonably have
believed that [the employee’s suspension and termination] might have become the subject of a
Board complaint.” Id. at fn. 6. Thus, the rule is simple: An employer need not produce requested
information where the employer reasonably believes that the subject of the information
requested may related to an unfair labor practice charge. Id.: Pepsi-Cola Bottling Co., 315
NLRB 882 (1994); Saginaw Control and Engineering, Inc., 339 NLRB 541, 544 (2003).
Aside from the Respondent’s refusal to comply with the January 17th information request
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until the Region acted on the unfair labor practice charges, the Region does not contend that
that lockout was unlawful. The Respondent has established that it was bargaining in good faith
and had substantial, non-discriminatory, reasons for the lockout. As I have found that the
Respondent lawfully refused to comply with the information request, there was nothing unlawful
about the lockout. I recommend that the Complaint in this case be dismissed.
Conclusions of Law
1. Respondent, Stepan Company, is an employer within the meaning of Section 2(2),
(6), and (7) of the Act.
2. United Electrical, Radio and Machine Workers of America (UE), Machine Tool and
Die Local 155, is a labor organization within the meaning of Section 2(5) of the Act.
3. The Respondent did not commit the unfair labor practices alleged in the Complaint.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended3
ORDER
The complaint is dismissed.
Dated, Washington, D.C., February 21, 2007.
____________________
Wallace H. Nations
Administrative Law Judge

3 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.