Arkansas Louisiana Gas Co.

National Labor Relations Board - Board Decisions

Aug 31, 1965

154 N.L.R.B. 878 (N.L.R.B. 1965)

878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Information regarding provisions of this notice and compliance with its terms
may be secured from the Regional Office of the National Labor Relations Board,
849 South Broadway, Los Angeles, California, Telephone No. 688-5204.
Arkansas Louisiana Gas Company and Local 729, International
Chemical Workers Union , AFL-CIO. Case No. 16-CA-2091.
August 31,1965
DECISION AND ORDER
On June 11, 1965, Trial Examiner Ramey Donovan issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in and was engaging in certain unfair labor prac-
tices within the meaning of the National Labor Relations Act, as
amended, and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the attached Trial
Examiner's Decision. The Trial Examiner also found that the
Respondent had not engaged in certain other unfair labor practices
alleged in the complaint. Thereafter, the Respondent and the Gen
oral Counsel filed exceptions to the Trial Examiner's Decision and
supporting briefs, and the Respondent filed an answering brief. The
Respondent and the General Counsel also filed motions to correct the
record, with the General Counsel filing cross-exceptions to the Re-
spondent's motion.' The corrections requested by the General Coun-
sel are unopposed. The record is amended accordingly.
Pursuant to the provisions of Section 3(b) of the Act, as amended,
the National Labor Relations Board has delegated its powers in
connection with this case to it three-member panel [Members
Fanning, Brown, and Zagoria].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Trial Examiner's Decision, the exceptions and briefs, and the entire
'With respect to the Respondent 's motion, the record shows that on page 505 of the
transcript, witness T . O. Perry testified that the May 22, 1964 , letter of the Respond-
ent, announcing its unilateral decision on wage increases , was sent ". . . to the em-
ployees and to the International Representative ." Respondent contends that the testi-
mony should read, "We sent the letter to the employees ' International Representative."
The General Counsel has no recollection of the actual testimony , but contends that the
Respondent 's version of the testimony has no material bearing on the ultimate con-
clusion of bad-faith bargaining . Having considered the contentions of the parties, we
accept the Respondent's version of Perry's testimony and hereby grant the Respondent's
motion to amend the record. However , in our view the corrected record does not require
alteration in the Trial Examiner's findings and conclusions.
154 NLRB No. 72.
ARKANSAS LOUISIANA GAS COMPANY 879
record in the case, and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner with the modifications set
forth below.'
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act,
as amended, the National Labor Relations Board hereby adopts as
its Order the Recommended Order of the Trial Examiner, and orders
that the Respondent, Arkansas Louisiana Gas Company, Texarkana,
Texas, its officers, agents, successors, and assigns, shall take the action
set forth in the Trial Examiner's Recommended Order.'
2 We agree with the Trial Examiner that the Respondent, since April 15, 1964, has
failed to bargain in good faith and has thereby violated Section 8(a)(5) and (1) of the
Act. Accordingly, we find it unnecessary to pass upon the legal effect of the Supreme
Court's decision in American National Insurance Co., 343 U.S 395, 407-408, on the con-
clusions which may be drawn from the Respondent's insistence upon its proposed man-
agement rights clause, nor do we adopt the Trial Examiner's conclusion with respect
thereto
8 The telephone number for Region 16, appearing at the bottom of the Appendix attached
to the Trial Examiner's Decision, is amended to read: Telephone No. 335-2145.
TRIAL EXAMINER'S DECISION
The original charge in this case was filed by Local 729, International Chemical
Workers Union, AFL-CIO, herein called the Union, on July 29, 1964. The com-
plaint issued under date of September 18, 1964. Hearings were held in Texarkana,
Texas, on November 4, 5, and 6, 1964, before Trial Examiner Ramey Donovan.
The issue in the case is an alleged violation of Section 8(a)(1) and (5) of the
Act. Simply stated, the question is did the Arkansas Louisiana Gas Company, herein
called the Respondent, fail to bargain in good faith with the certified Union regard-
ing the terms of a collective-bargaining contract.
Upon the entire record in this proceeding, including observation of the wit-
nesses, the oral argument, and briefs, I make the following:
FINDINGS OF FACT
1. JURISDICTION
Arkansas Louisiana Gas Company is a Delaware corporation, having its prin-
cipal office and place of business in Shreveport, Louisiana, where it is engaged in
the producing, purchasing, transporting, distributing, and selling of natural gas.
Respondent operates a gas distribution facility at Texarkana, Texas, which is the
facility involved in this proceeding.
On an annual basis, Respondent, in the course of its business, purchased, trans-
ferred, and delivered to its Texarkana facility goods, materials, and services valued
in excess of $50,000, of which goods, materials, or services valued in excess of
$50,000 were transported to its Texarkana facility directly from States other than
the State of Texas.
Respondent is engaged in commerce within the meaning of Section 2(6) and (7)
of the Act and the Union is a labor organization within the meaning of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
Pursuant to an election conducted by the Board on August 7, 1963, the Union was
certified on August 15, 1963, as the collective-bargaining agent for an appropriate
unit at Respondent's Texarkana facility.' Thereafter, the Union communicated with
Respondent and a mutually agreeable meeting time was arranged.
1 Of 47 eligible voters, 31 voted for the Union and 13 voted against, with 1 ballot being
challenged.
The General Counsel introduced in evidence letters and other campaign material issued
by Respondent during the preelection campaign. Such evidence indicates tuat Respond-
ent was opposed to unionization of its employees.
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The parties met on the following dates and for approximately the following
periods: ( 1) September 25, 1963, 3 to 4:30 p.m.; ( 2) October 29, 10 : 30 a.m. to
10.30 p.m.; ( 3) November 7, 4 to 11 : 45 p.m.; ( 4) November 18, 2.20 to 5 20 p.m ;
(5) December 17, 10:20 a.m . to 5:10 p.m.; ( 6) December 18, 9:30 a in to 3:45 p.m.;
(7) February 13, 1964, 9 a .m. to 4:50 p.m .; ( 8) February 14, 9 to 11 45 a.m.; (9)
March 5, 2 to 4:45 p.m.; ( 10) April 14, 10 to 11.05 a.m.; (11) April 15 , 1:30 to 3:40
p.m.; and ( 12) July 1, 10:17 to 11 : 42 a.m.
The principal union negotiator at these meetings was Williamson , an International
representative , assisted by Hyde, another International representative , and a com-
mittee of employees from the bargaining unit The company negotiating team was
headed by Perry, the Respondent 's director of employee relations With Perry were
Shell, manager of the Texarkana district ; Diller, manager of the Louisiana-Texas
division ; and Breedlove , personnel assistant and assistant to Perry. Except as
noted hereinafter , Williamson and Perry can be described as the spokesmen for
their respective sides at all meetings. They were also the principal witnesses at
the hearing . Hyde, the only other witness , testified briefly , comparatively speaking.
The record contains detailed evidence , both testimonial and notes, concerning all
the meetings . I have heard and read the evidence with care but believe that it is
unnecessary to delineate the details of the article by article , clause by clause, and
word by word discussions between the parties at every meeting
The basic pattern was that at the first meeting the Union submitted a proposed
written contract to the Company . Following articles dealing with recognition and
with the term of the contract , there was , inter alia, a no strike -no lockout article;
a dues checkoff provision ; provisions dealing with bulletin boards and job steward;
leave of absence ; a grievance procedure applicable to "any dispute , grievance or
difference arising between an employee and the Company ," with binding arbitration
as the ultimate step ; provisions dealing with holidays, vacations , funeral leave, jury
duty, and related matters; severance pay; workweek and hours ; seniority ; an article
forbidding foremen from performing work normally done by bargaining unit employ-
ees, referred to herein as the foreman or supervisor working clause ; an article for-
bidding the contracting out of work that could be performed by bargaining unit
employees , referred to herein as the contracting out clause ; and provisions relating
to uniforms . No proposal on wages was made by the Union. The Respondent at
the first meeting submitted a list of subjects that it believed should be covered in
the contract negotiations . These subjects were- recognition ; cooperation ; seniority;
pay; promotions ; holidays; vacations ; leaves of absence ; grievances ; insurance , retire-
ment; physical examination ; safety; no strike; management 's rights; term.
At the second meeting Respondent submitted a complete written contract pro-
posal that, in general , followed the outline of subjects that it had submitted at the
initial meeting . From this point on , and in succeeding meetings , the parties dis-
cussed the company proposal and the union proposal, article by article and almost
word by word There was hard bargaining but progress was made. Respondent
opposed strongly various union proposed provisions while on other provisions
Respondent stated that it would consider the Union 's objections and alternatives.
At a succeeding meeting, Respondent would then delete a word or clause from its
own contract proposal and would, on occasion , adopt language from the union
proposal. Using as the basic document its original contract proposal that was
submitted at the second meeting, the Respondent submitted at succeeding meetings
four complete contract proposals to the Union . These succeeding proposals were
in effect revisions of Respondent 's original proposal and the revisions reflected dele-
tions, changes , and additions that had resulted from the bargaining between the
parties? Respondent 's revised contracts were submitted at the &d, 7th , 9th, and 12th
meetings.3
Before considering the basic issues that divided the two parties in their contract
negotiations , a brief word is in order regarding the relatively substantial time gaps
between some of the meetings Since it is Respondent that is charged with a vio-
lation of the law, we are principally interested in whether Respondent engaged in
2 Certain changes in the last submitted proposal were in a different category and will
be discussed at a later point in this Decision.
3 Taking its original contract proposal, Respondent , in its succeeding proposals followed
this procedure : At the third meeting , Respondent 's contract had certain words and clauses
underscored in red pencil to indicate changes proposed by the Union and agreed to by
Respondent as shown. Changes in subsequently submitted contracts were underscored in
green , blue , and brown so that the last submitted contract had underscoring in red , green,
blue and brown , showing the various revisions. Deletions were not discernible except
by comparison of subsequent with prior submitted contracts.
ARKANSAS LOUISIANA GAS COMPANY 881
a pattern of dilatory tactics to unduly prolong and delay negotiations. The record
evidence does not establish a pattern of delay on Respondent's part. As far as
appears, Respondent was available for meetings and did meet upon request although
the initiative for particular meetings was exercised by the Union and the Federal
mediator.4
On December 18, 1963, the sixth meeting, the Union submitted its first wage
proposal. The proposal was made orally by Williamson at the meeting, appar-
ently near the close. The proposed rates when compared with existing rates
involved increases. Respondent's contract proposals had provided for the existing
rates. At the December 18 meeting there was no discussion by the parties regarding
the proposed union rates.
Throughout the negotiations, the parties bargained hard about the major and
the minor issues. From the standpoint of importance to the parties and difficulty
of resolution, the major disputes concerned the Respondent's management rights
clause; the contracting out work clause; supervisor working clause, and wages.
These were the issues on which the least progress was made in resolving differences.
Also difficult issues were the checkoff of union dues; certain aspects of seniority;
and hours of work.
From the time of its initial contract proposal, Respondent firmly insisted upon
its management rights clause and stated that it considered the clause essential .5
The Union expressed strong opposition to the clause on the ground that it, in
effect, negated the Union's certified status as bargaining agent and that it was a
clause wholly unacceptable to the Union. The clause was discussed at various
meetings but the positions of the parties remain unaltered. The Union stated that
it was not opposed to a management rights clause as such and at one meeting
proposed a substitute management rights clause 6 This was not acceptable to
Respondent nor was the union proposal to adopt management rights clauses in
certain named existing contracts. Respondent's position was that it considered
its proposed clause essential in the light of recent decisions of the courts and arbi-
trators and that the clauses proposed by the Union did not meet the problem.
On contracting out work, the Union wanted an express contract ban on such con-
tracting out. The Respondent refused to agree to such a provision and among the
specified rights in Respondent's management rights clause was the right to contract
out work. Respondent stated that the size of its work force was such and its method
of operation was such that the right to contract out work was essential. Accord-
ing to Respondent, its work force would handle normal day-to-day tasks such as
providing gas to a newly built private dwelling. But, if a whole subdivision of
homes was being constructed, Respondent deemed it, or might deem it, essential
to contract out all or part of the work. The same considerations were used by
Respondent in rejecting the Union's proposed contract ban or supervisors perform-
ing bargaining unit work. Respondent's position was that situations arose where,
under its existing practice, which it wished to continue, it was necessary for a super-
visor to perform unit work. One of the rights reserved under Respondent's man-
agement's rights clause was the right to have supervisors perform unit work, pro-
viding it was not used to bring about a layoff of unit employees.
Regarding wages, the Respondent's original contract proposal contained the
existing rates. At the eighth meeting on February 14, the Union listed wages,
together with about six other items, as one of the major items that would have to
be resolved in order to reach agreement. At the ninth meeting on March 5, 1964,
which was relatively brief, wages was mentioned by the mediator as one of the
subjects that the Union considered of major importance. The discussion of wages
apparently did not go much beyond the Respondent's expressed view that a wage
4 A mediator, at the request of the Union, was present at the fourth meeting and there-
after. The indication is that the mediator arranged the meetings although there
was apparently no reason why the parties could not have also proposed meetings The
original mediator died after participating in some of the early meetings. Another
mediator participated for one meeting (possibly more than one) and a third mediator
then participated. It also appears that Williamson was ill at some point during the
period of the negotiations
5 Article 13 of Respondent' s proposed contract, entitled "Management Rights," is set
forth in Appendix A of this Decision.
6 "The Union recognizes that the Company has the exclusive duty and right to manage
plant. This managerial function includes the right to hire, fire for cause, and further
has the right to direct the work, provided however, that this is not in any manner to
abridge the right of the Union or employees as provided for in this agreement
206-446-66-vol. 151 57
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
revision was not timely . The 10th meeting on April 14 , 1964 , was inconsequential
since a new mediator had appeared , stating that he was taking the place of the
original mediator who had died It also appeared that Sparks , a vice president of
the International Union and one of its regional directors , was to arrive later in the
day to confer with the mediator. The union committee was thereupon excused and
there were no negotiations between the Union and Respondent on April 14.
At the April 15, 1964, meeting , Sparks , Williamson , and Hyde were present for
the Union . Present for the Company was its same negotiating team. The Federal
mediator was also present . Sparks did not testify but Williamson states that at
the beginning of the session the Union met separately with the mediator Accord-
ing to Williamson , Sparks told the mediator to inform the Respondent 's representa-
tives that the present position of the Union was that it had come prepared to sign
a contract and that it would sign the contract if the Company would do two things,
move in the economic area by granting a wage increase of 10 to 15 cents an hour
and agree to a provision against contracting out work when such contracting out
would deprive unit employees of employment . The mediator then met separately
with Respondent 's representatives . According to Perry and the Respondent 's notes
of the meeting , the mediator informed Respondent 's representatives that the Union
would accept the contract [Respondent 's basic contract proposal as revised on three
occasions ] if it contained an economic consideration and contained a provision
banning contracting out work and work by supervisors where it would result in
laying off employees . The company representatives then adjourned to consider
the union proposal and later met alone with the mediator Respondent informed
the mediator that the rates of Texarkana were the same as the rates throughout its
system and that it felt obliged to stand by its existing rates and preserve uniformity
in its distribution operations . It does not appear what , if anything , the Company
said to the mediator about the contracting out or supervisor working provisions.
Thereafter , at the same session, the mediator brought the parties together. The
Company stated to the Union substantially what it had said to the mediator regard-
ing wages and said that a wage increase was not timely .? Sparks said that the
Union was there to bargain and to sign a contract but that he did not feel that
the Company was willing to bargain. He asked whether there was any money
involved in the company proposal, whether as much as a 5 -cent increase was possi-
ble. The Company said no. At this point , Sparks picked up the typed contract
proposal of the Company and tossed it on the table at which the parties were sitting.
According to Williamson , Sparks said , as he threw down the contract in front of
Perry, "the Union accepts that language, sign the contract forgetting the wage
increase ." Williamson 's testimony is to the effect that the meeting thereafter
ended, with the mediator stating that the next meeting would be called by him and
that it would be held in Texarkana.
Before describing Respondent 's version of what was said by Sparks on April 15
when he threw the contract on the table , we will first consider Williamson 's testi-
mony, quoted above . Taken literally , Sparks' words, as described by Williamson,
meant that Sparks said to the Company that the Union accepted the company
contract and was prepared and would sign the contract even without a wage increase
("forgetting the wage increase"). If this was said, I had the greatest difficulty in
understanding why the Union did not sign the contract at that time , on April 15.
Sparks clearly had the authority to sign and had stated that very fact to the medi-
ator and to the Company . I had the same difficulty in understanding why the Com-
pany did not sign the contract on April 15 when and if Sparks had made the
foregoing statement of union acceptance, since, according to Williamson, Sparks
was agreeing to the company contract , including existing wage rates . Even more
inexplicable , under the premise we are considering , is the total absence of any word
or effort by the mediator to have both parties sign the contract on April 15 when
the Union accepted the company contract . Finally, since the next meeting of the
parties was not held until July 1, 1964, why did either the Union, the Company,
or the mediator not endeavor to meet and sign an allegedly agreed-upon contract
(in negotiation since September 1963) until 21/2 months after agreement was
reached on April 15, 1964.8
v There was no mention or discussion by either party with the other of contracting out
or supervisor working provisions.
a In his brief, the General Counsel states ( p. 8), ". . . it is undisputed that Sparks
unequivocally indicated to the company representatives that the Union was accepting
the Company ' s latest contract proposal ( which was first proposed at the February 13,
ARKANSAS LOUISIANA GAS COMPANY 883
Perry, the chief company representative , decribing the portion of the April 15
meeting where Sparks tossed the contract on the table , states that as Sparks tossed
the document he said, "is there any money in this proposal ?" The Company said
that it stood on its proposal of existing rates , explaining the nature of its operation
as a utility . Perry states that the meeting adjourned shortly thereafter .9 On cross-
examination , the General Counsel asked Perry:
what did you understand by Mr. Sparks throwing his contract down in
front of you and saying in effect that the matter was all settled except for
wages ; what did you understand that to mean'
A. In the first place, I do not exactly recall Mr. Sparks making this state-
ment and there were two other conditions which the mediator had mentioned
to us had to be settled which includes contracting out [and] supervisory work,
and as to what Mr. Sparks is concerned , I interpreted it to mean that as long
as there was no agreement on wages there was no agreement on the contract
and the contract negotiations were still wide open.
I have set forth above my findings regarding what the Union said in private to
the mediator at the April 15 session , as well as what the mediator said the Com-
pany in private on the same occasion and what the Company responded to the
mediator . It has also been found that when the parties were brought together on
April 15, after separate conversations with the mediator , that Sparks , in words or in
substance asked the Company whether the company contract did or could pro-
vide some wage increase and that, as he spoke, he tossed the contract on the table
in front of Perry. As described more fully above , Perry replied in substance that
no wage increase was being proposed by the Company . I do not believe that I can
determine exactly what Sparks did say at that point but upon careful consideration
of all factors and all the evidence , I conclude that in substance Sparks stated that
the Union was ready to consummate negotiations and sign the contract except for
wages but that the Company apparently was not , in view of its refusal to offer any
wage increases . I believe that the meeting thereupon concluded without further
discussion by the parties.'°
1964 , session and discussed at succeeding sessions through the April 15 session-
GC 22 ) and that the Union was willing to sign it , forgetting the wage increase."
This would seem to indicate that the General Counsel is stating that the Union accepted
the contract even without a wage increase . But in the next sentence of the brief, it is
stated* "Counsel [ the General Counsel] submits that the Company had full knowledge at
the April 15, 1964 session that wages were the only remaining unresolved major [ in a foot-
note at this point of the brief, it is stated that "The parties had not agreed on the term
of the collective bargaining agreement "] issue preventing complete agreement" This
indicates that counsel has interpreted the phrase , reportedly used by Sparks , "forgetting
the wage increase ," as meaning , "except" on the matter of a wage increase In Short,
Sparks is viewed as having said , the Union accepts the contract except for the wage
provision , wherein the Union is holding out for a wage increase . This appeals to be
a correct interpretation but Williamson's testimony , as reported , is not very clear in
phraseology.
0 The Company's notes of the meeting on this aspect read :
"Mr. Sparks asked the Company if there , was any money in the Company proposal.
The Company stated no . The Union stated that they were willing to negotiate and
they did not feel the Company was willing to negotiate . The Union can make a
decision to sign and it is up to the Company.
Mr. Zimmerman [ the mediator ] summarized the position of both parties.
The Union left at 3 BO p.m. . . .
Mr. Zimmerman adjourned at 3:40 p in. with no future meeting being scheduled."
10 Although the Union had initially informed the mediator on April 15 that wages and
contracting out (and possibly supervisor working ) were the issues to be resolved and the
mediator so advised the Company in private , the matter of wages was the only one
raised by the Union when it spoke to the Company It is possible that if the Company
had offered a wage increase on April 15 , the Union might have also raised the matter of
contracting out. However , when it appeared that no wage increase was being offered,
Sparks, in our opinion , did make a last ditch effort by offering to accept the contract if
a wage increase was offered.
The Company ' s notes of the July 1 , 1964, meeting state , inter alia, "Williamson and
Zimmerman [ the Federal mediator ] stated that Vice President Sparks had agreed [on
April 15] to sign the offered contract except for money."
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I am of the opinion that on April 15, at the meeting, Respondent became aware
that if the Company offered a wage increase, the Union would accept the company
contract; or, and minimally, the Company at least became aware that a wage increase
or something in the area of a wage increase would materially and substantially
advance the stage of bargaining between the parties and bring them closer to con-
summation of a contract
There was no further communication or effort to achieve communication by or
between any of the parties until May 22, 1964, when Perry wrote to Williamson 11
Perry testified that, in addition to sending the letter to Williamson, he also sent
the letter to the employees. Williamson discussed the May 22 letter with the union
membership at some point in the period between receipt of the letter and June 5, 1964.
The next communication from either party to the other was a letter of June 5,
1964, from the Company to the Union.12 About June 5 or 6, before receipt of the
Company's June 5 letter, Williamson accidentally encountered Perry at the Shreve-
port Airport. Williamson, who had been in contact with the Federal mediator,
advised Perry that a meeting of the parties had been arranged for July 1. William-
son said that he looked forward to the meeting and that perhaps a contract could
be signed. He remarked that he had "a couple of issues of a minor nature that the
[Union] wanted to clear up and that was to get the seniority straight . " in
accordance with the company letter of May 22. The record does not show what,
if anything, Perry said but apparently it was unexceptional and not adverse.
The Union did not reply in May or June to the Company's letter of May 22
except to the extent that Williamson made some reference to the letter on about
June 5 when he accidentally encountered Perry at the airport, as above-described
11 "We have just completed a periodic review of the company's job classifications, start-
ing rates , and initial progression , as a result of which an adjustment throughout our un-
organized gas distribution operations was made effective May 16, 1964 In order to in-
corporate these adjustments into the proposed bargaining agreement which is currently
under negotiation with you as the representative of certain of the company's employees
in Texarkana , we are forwarding herewith a revised Exhibit A to the Company ' s current
contract proposal.
"Further, since this adjustment has already been placed in effect in our other operations
as indicated above as of May 16, 1964 , we would like to place the same changes into
effect on May 16, 1964 for some of the employees you represent even though the collec-
tive bargaining agreement itself is still under negotiation It should be understood that
it is not the purpose or intent of this letter that it should operate to reduce the rates of
any present employees , although employees in certain classifications whose rates are less
than those on the attached Exhibit A will be increased to the rate indicated
Accordingly , if you will indicate the Union's concurrence by signing and returning to us
the attached copy of this letter we will proceed to place the new starting rates and
application of the two-year progression in effect as of May 16, 1964, without prejudice
to the rights of the respective parties with respect to further negotiations for a collec-
tive bargaining agreement.
Very truly yours,
Accepted and Agreed to this
- day of 1964
By (S) J. S. Williamson T O. Perry,
Director of Employment Relations
ec: Federal Mediation and Conciliation Service"
12 "In an effort to continually improve the hospitalization benefits for employees and
their dependents , we have recently completed arrangements with Union Life Insurance
Company to increase the maximum surgical benefit from $225 to $ 300. This change is
effective for surgical procedures performed for 'outpatient ' surgery or during hospital
confinements commencing June 1, 1964 , and thereafter. A form of Certificate Rider and
Schedule of Operations , to be attached to the company 's group insurance booklet and
incorporating the changes , is attached.
"The present plant is in effect in the bargaining unit which you represent in Texarkana,
and as to which we are currently negotiating . Since this adjustment which is to be
made at the company's expense has already been placed into effect in our other operations
as indicated above as of June 1, 1964 , it is our wish to place the same changes into effect
on June 1, 1964, for the employees who have continued their group insurance coverage
even though the collective bargaining agreement itself is still under negotiation Ac-
cordingly , if you will indicate the union ' s concurrence by signing and returning to us
the attached copies of this letter, we will proceed to place the above stated adjustments
into effect as of June 1, 1964, without prejudice to the rights of the respective parties
with respect to further negotiations for a collective bargaining agreement "
ARKANSAS LOUISIANA GAS COMPANY 885
However, on June 19, 1964 , Williamson did sign the acceptance space on the June 5
letter and returned it to the Company. Williamson did not sign the acceptance
space on the May 22 letter until around July 4, 1964. And he then mailed it to the
Company.
The next occurrence and the first meeting of the parties since April 15, 1964, was
on July 1, 1964 Williamson and Hyde were present for the Union. The com-
pany representatives were Breedlove, Diller, Shell, and Lowry.13 As explained
to the Union at the meeting, Perry, the Company's chief negotiator, had gone to
Fort Worth to attend a funeral and was therefore not present. As far as appears,
this was the fact and Perry was out of town for that day.14
The July 1, 1964, meeting commenced with Mediator Zimmerman stating that
the meeting had been called at Williamson's request for the purpose of discussing
the Company's letter of May 22. Breedlove distributed a new draft, dated June 29,
1964, of the Company's proposed contract.15 The most recent changes in the
contract proposal were underscored in brown crayon or brown pencil." William-
son expressed surprise that the Company had made changes in its contract proposal
inasmuch as he said that the various articles in which changes were now made had
previously been agreed to by the Union with the Company. Breedlove, in substance,
acknowledged that there had been prior agreement on various articles that had
now been changed in the Company's present proposal 17 Williamson and Zimmer-
man also stated that, on April 15, Sparks had agreed to sign the Company's proposed
contract except for wages. Zimmerman did observe, however,-that he thought all
agreements were subject to the total package. Williamson said this was true but
a total package is obtained by agreement on article by article and that the Union
had not changed its position on articles previously agreed upon . Breedlove explained
that the Company believed that recent court and arbitration decisions made the
changes necessary. As Williamson testified, he took Zimmerman aside, at the meet-
ing, and told him that Sparks had accepted the Company's proposed contract on
April 15 and Williamson, on July 1, was simply there to sign the contract after
clarifying some details in the Company's May 22 wage proposal. Most of the
meeting was devoted to Williamson 's efforts to clarify the specific application regard-
ing unit employees of the Company 's May 22 wage proposal. The parties discussed
the details and the employees affected and their wage rates Williamson expressed
himself as satisfied on this score and obtained assurance that the May 22 offer on
wages was still on the table and was still a valid offer . 18 The meeting ended at
this point with no proposal by any party for another meeting on any particular date.
Subsequent to the July 1 meeting, Williamson informed Sparks of what had
transpired at the meeting and Sparks instructed him to contact the Union' s attor-
ney. This was done, and upon legal advice , Williamson then signed the acceptance
13 Diller was about to retire as manager of the Louisiana Texas division of the Com-
pany and Lowry was his successor.
14 The Company kept notes or minutes of all the meetings and the notes or minutes
were received in evidence . When offered by the Company at the hearing, the General
Counsel stated that he did not object to the authenticity of the notes and did not voice
other objection . Perry, the only company witness at the hearing , described the keeping
of the notes and vouched for their general accuracy. Breedlove apparently made the
notes at the meetings and then went over them with Perry before they were typed in
final form Perry was not present at the July 1 meeting and Breedlove took his place
as company spokesman at that session The indication is that Lowry may have taken
the basic notes on July 1 While the notes are basically hearsay , and represent the work
of interested parties, I have found the notes , when compared with other evidence, to be
an effort to represent the events at the meetings in a generally accurate manner In
fact, the General Counsel, in his brief , has quoted various statements in the notes in
support of some of his contentions With discretion , I have not ignored the notes but
have considered them together with other material in the record
15 General Counsel's Exhibit No. 25 Aniong other things, the contract contained the
new wage rates referred to in the Company's letter of May 22
18 Prior to July 1, the latest company contract proposal had been submitted on March 5,
1964, and that was the document before the parties thereafter , including April 15, 1964,
and until the July 1 meeting.
"One of the articles referred to by Williamson in this category was article 12 which
he understood had been agreed to on February 13 Breedlove admitted that there had
been agreement on the article.
"Williamson testified that there was complete agreement concerning the Company's
proposed May 22 wage increase.
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
form on the Company's May 22 letter regarding wages and mailed it to the Com-
pany. A refusal-to-bargain charge was filed by the Union against the Company on
July 29, 1964. There was no contract between the parties after July 1.
On August 31, 1964, an employee petition to decertify the Union (an "RD"
petition) was filed with the Board's Regional Office. The Union wrote to the
Company on September 23, 1964, requesting a meeting to conclude negotiations and
suggesting dates in October for a meeting. The Company replied on September 30,
stating that in its judgment the Union no longer represented a majority in the
unit and refusing to meeting until its doubts were resolved by another Board elec-
tion. The Company's letter also enclosed a copy of a petition (an "RM" petition)
that it had filed with the Board. On October 1, 1964, the Regional Director of
the Board dismissed the employee decertification petition because of the "refusal
to bargain on the part of the Company, upon which complaint has issued
The Company's "RM" petition shows a Board filing date of October 1, 1964. By
letter, dated October 1, the Regional Director dismissed the RM petition because
of the refusal-to-bargain charge on which complaint had issued. On October 23,
the Union sent two telegrams to the Company requesting resumption of contract
negotiations The Company replied on October 26 stating that a decertification
petition had been filed by employees and the Company did not know if the Union
represented a majority. The Company stated that it did not see how it could meet
until the matter was resolved by a Board election. The Company proposed a con-
sent election . There were no further communications by the parties.
Conclusions
In his brief, the General Counsel argues that the totality of Respondent's conduct
establishes that it bargained in bad faith. It is also asserted that Respondent inde-
pendently violated Section 8(a)(5) of the Act by-
(1) Respondent's insistence on its management rights clause as a condition prece-
dent to reaching complete agreement with the Union.
(2) Respondent's failure to reveal the possibility of a wage increase at the April 15
bargaining session at a time when such revelation might have broken an impasse
on the wage issue
(3) Respondent's unjustified withdrawal on July 1, 1964, from prior agreements
with the Union in about five major areas of contract negotiations.
(4) Respondent's two refusals on September 30 and October 26, 1964, to meet
with the Union for the purpose of concluding contract negotiations
While an overall appraisal of the totality of conduct must be made, we believe that
an appropriate starting point is to consider the parts that comprise the whole.
The General Counsel castigates the management rights clause as "so conspicu-
ously unreasonable and contrary to commonly accepted concepts of collective bar-
gaining , [that it] could not possibly have been proposed, much less insisted upon,
in good faith." Although the General Counsel also states that the clause is to be
considered in conjunction with what he regards as the other indicia of bad faith,
his attack on the clause, in our opinion, although not stated in exactly such terms,
is, in effect, that the firm insistence on such a clause was a per se violation of the
obligation to bargain.19
The contract proposal submitted by the Union at the initial meeting contained,
inter aha, a broad definition of a grievance, plus a grievance clause terminating in
binding arbitration; and a no-strike clause. The Union desired the right to have
disputes or differences regarding wages, hours, and working conditions subject to
arbitration rather than to the employer's decision alone. The Union was willing
to forego the right to strike under such circumstances. But as the Supreme Court
has observed, we cannot ignore "the nature of the Union's demand" or the fact
that Respondent's management rights clause was in the nature of "a counterproposal
to the Union's demand for unlimited arbitration." 20 Conceivably, the Company
could have "simply refused in good faith to agree to the Union proposal for arbi-
tration" 21 but, instead, the Company, firmly and without deviation, adhered to its
demand for a broad management rights clause that substantially affected the cover-
age of the grievance arbitration clause. As far as appears, neither the Union nor
to "An employer, as here, who proposes and insists on impossible positions, such as its
management rights clause, comprising as it did, all of the mandatory bargaining sub-
ject. . . . Certainly does not approach the bargaining table with an open mind and
purpose to work toward a satisfactory resolution of its differences or a working arrange-
ment with the Union." (General Counsel's brief, p 3 )
N L R.B v. American National Insurance Co., 343 U.S 395, 407-408
21 Idem.
ARKANSAS LOUISIANA GAS COMPANY 887
the Company ever held to the position that there should be an elimination of arbi-
tration from the contract or the elimination of the no-strike clause. The differences
in positions that arose during the negotiations with respect to the management rights
clause occurred in a context where both parties were proceeding on a premise of a
proposed contract that provided for binding grievance arbitration.
In reading the Respondent's management rights clause and the record in this
case, we have no doubt that it was a reflection of Respondent's awareness of cur-
rent court and arbitration decisions and of Respondent's interpretation of these
decisions.22 In this connection, the Supreme Court has referred to management
rights as only those "over which the contract gives management complete control
and unfettered discretion " 23 It is a tenable view that absent specific exclusion of
a particular area, function or right from the purview of the contract, the grievance
arbitration provisions of the contract would be applicable. Respondent's manage-
ment rights clause undertook to exclude a wide area of subjects from the grievance
arbitration provisions of the contract. In the absence of such exclusion, most or
all of the subjects were bargainable and potentially subject to ultimate arbitration
under the contract. In my opinion, therefore, Respondent's management rights
clause is not an independent or per se violation of the Act since it must be consid-
ered with respect to the arbitration provision of the contract.24
In the instant management rights clause, however, we find that the clause not
only removes important matters pertaining to wages, hours, and working conditions
from the area of possible arbitration but also eliminates such matters from the
grievance procedure.25 Also, by designating certain subjects as reserved manage-
ment rights, it would seem that Respondent's proposed contract eliminated any
obligation on Respondent's part to even discuss with the Union during the contract
term any exercise of the management rights.
The management rights clause in American National Insurance Co., supra, ex-
pressly subjected the management rights to review under the grievance procedure,
short of arbitration. The instant Respondent's clause also includes under man-
agement rights various items not found in the American National clause, such as
pensions, insurance, contracting out work, foremen performing unit work, and so
forth. However, the fact is that one employer may be more concerned than another
with the right to contract out work and so forth and these comparisons are not
dispositive. In my view, the more important point is whether Respondent's manage-
ment rights clause was so all embracing that it virtually eliminated the role of the
Union as the collective-bargaining agent by reserving to Respondent complete
unilateral control in the area of wages, hours, and working conditions, even to the
point of foreclosing discussion of such subjects, let alone any right to present
such matters as a grievance even without arbitration.
Although it is unnecessary to set forth an exhaustive interpretation, article by
article, of the entire contract proposal of Respondent, I believe that, despite the
broad language of article 13, management rights, there are important areas that
are not reserved solely to Respondent's determination. Thus, article II, which con-
tains the grievance and arbitration provisions, section 11.6, provided:
A grievance involving suspension , disciplinary layoff or discharge must be
presented in writing to the foreman at step two within 7 calendar days (exclud-
ing holidays) after such suspension, disciplinary layoff or discharge ....
This provision would seem to indicate that in the above area the grievance and
arbitration provisions are applicable. The management rights clause itself, article
13(i), which is one of the illustrative rights that are enumerated as reserved to
management, reads:
(i) The right to discipline, demote or discharge for just cause [examples of
"just cause" are then enumerated].
22 This at least is true at this juncture where we are considering the insistence on the
clause as an independent violation of Section 8(a)(5) of the Act as contended by the
General Counsel. Whether the clause was or was not also a reflection of a determination not
to bargain in good faith will have to be determined at a later point when all the factors
in the case are appraised jointly.
23 United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U S. 574
21 N.L.P B. v. American National Insurance Co., supra.
23 We are speaking of the grievance procedure as the filing and processing of a grievance
through the various steps but without third party arbitration as the final step Under
a grievance procedure, short of arbitration, an employer does not relinquish decisional
responsibility to an arbitrator.
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Read separately or in conjunction with section 11.6, above, it is tenable to conclude
that the issue of "just cause" would be subject to grievance and arbitration. Such
areas as hiring, promoting, contracting out, supervisors working, pensions and insur-
ance, and other matters such as "the right to determine, direct, and, as necessary,
change the working operations and working forces .. ." were wholly reserved
under the management rights clause.
Considering all factors, including the Supreme Court's observation "that the
Board may not, either directly or indirectly, compel concessions or otherwise sit
in judgment upon the substantive terms of collective bargaining agreements," 26
I do not find that Respondent independently or per se violated the Act by adhering
firmly to its management rights clause throughout the negotiations.
With respect to the changes made by Respondent that were contained in the
proposed contract submitted to the Union on July 1, I believe that the following
observations are in order
Prior to the April 15, 1964, meeting, the parties, in the course of negotiations had
reached agreement on various sections of the contract. In addition to such agree-
ments as aforedescribed, the Union, on April 15, 1964, stated to the Company, in
substance, that the Union was ready to accept the Company's proposed contract if
something in the nature of a wage increase was forthcoming. Thus, under the
contingency stated, the Union, on April 15, had indicated a willingness to agree to
the remaining contract provisions that were still outstanding.
Notwithstanding the foregoing position, however, no final agreement on a contract
had been reached by the end of the April 15, 1964, meeting The net result, in my
opinion, was that neither party was bound by any contract. It was also true as a
matter of law that, when no agreement on a contract was reached, neither party
was bound by prior agreements on individual articles or clauses that comprised the
contract package.
While the parties, after April 15, were not bound by prior agreement on par-
ticular contract articles, such agreements on particular articles were not to be
lightly or readily ignored and cast aside. This is especially true with respect to
those items that had been rather laboriously worked out and agreed upon in the
sessions prior to April 15. In short, in evaluating whether Respondent was bar-
gaining in good faith, I must examine the nature of the particular changes, in
previously agreed upon provisions, that Respondent proposed for the first time on
July 1, 1964; and we must determine the reasons and motivation for the changes.
At the July 1, 1964, meeting, the Company submitted a change in article 12,
the no-strike provision. The change was in section 12.4. On March 5, 1964, the
ninth meeting, Respondent had submitted a revised contract draft that included
section 12.4. This section was taken from the Union's written contract proposal
that had been submitted in September 1963. Section 12.4, therefore, since it was
a provision adopted by Respondent from the union proposal, was mutually agreed
upon by March 5, 1964, and continued in this state until July 1, 1964.
This section reads as follows, with the addition thereto proposed by Respondent
on July 1 set forth in italics.
Section 12.4. Should differences arise between the Company and the Union or
its members as to the meaning and/or application of any of the provisions of
this Agreement, or should any trouble of any kind arise in the operations of
the business, there shall be no suspension of work on account of such dif-
ferences, but an earnest effort shall be made to settle such differences in accord-
ance with the terms and provisions of this Agreement, provided that nothing
in this Section shall obligate the Company to arbitrate any aspects of a matter
reserved to management under Article 13, [management rights clause, article 13].
Section 12.4 had been taken from the Union's first contract proposal which had
contained a broad grievance-arbitration clause. This original contract proposal of
the Union was made before the Company would first submit in October 1963. Sec-
tion 12 4, therefore, originally, was not intended as a response to the management
rights clause. Even after the Company's proposed contractual management rights
clause was placed on the bargaining table there is no evidence that the Union urged
section 12.4 in direct response to the management clause.27 It also seems rea-
sonably clear in view of the major importance that the Company had at all times
American National Insurance Co., supra.
27During the bargaining, the Union from time to time would, after going through the
company contract, urge adoption of its own original contract proposals since it quite
naturally preferred its own proposals to those of the Company.
ARKANSAS LOUISIANA GAS COMPANY 889
placed on its management clause that the Company would probably not have
adopted section 12.4 on March 5, 1964, if it regarded that section as opening a
wedge into the closely guarded management rights redoubt.
As adopted on March 5, 1964, section 12 4 provided that the settlement of such
differences as the section described would be made "in accordance with the terms
and provisions of this Agreement." It could, therefore, be argued that the section
did not detract from the management rights of the succeeding contract article,
article 13. On the other hand, in reading section 12.4, it might be argued that an
enclave, outside the specific reach of the management rights clause, had been cre-
ated. I need not decide which is the more tenable position but I find credible the
Respondent's explanation for making the addition to section 12 4 that it did on
July 1.
In going over the contract, Respondent, although it had at all times believed and
intended that section 12 4 did not encroach on the management rights provision,
decided that there was some possible ambiguity in the situation. It sought to make
clear its own understanding and intent by adding the above-indicated words to
section 12.5 on July 1.
I regard Respondent's change in section 12 4 as no more than a clarification on
Respondent's part of what it regarded as a past and current intent. It may be that
the addition to the section was unnecessary and that section 12.4 did not erode the
management clause. But the addition of July 1 removed any ambiguity from the
situation, at least to the extent possible without revising the entire subsection. I
do not regard this change as inconsistent with the good-faith bargaining obligation.28
In the July 1, 1964, contract proposal of Respondent there was a change in article
10, promotions. As previously agreed to, section 10 4 was the last section in the
article. Section 10.4 defined "promotion" as assignment to a job classification with
a higher maximum straight-time rate of pay. The company proposal, presented on
July 1, 1964, contained an additional section, section 10.5 This new section, in
effect, provided for horizontal movement as well as vertical movement by an
employee.29
No evidence has been brought to my attention, and I perceive none in the record,
why the addition of section 10.5 to the July 1 proposal was inconsistent with the
duty to bargain in good faith.30 In the absence of evidence to the contrary, the
additional provision appears to be in the interest of the Union and its constituents
in the unit since it allows employees to bid not only for jobs that would constitute
28 As indicated, there is no evidence that section 12 4 came into the company contract
as the result of protracted bargaining for a clause that would reserve certain matters
from the scope of management rights If the original section 12 4, when read in con-
junction with the management rights clause, creates an ambiguity it appears to have
been an accidental result
As to why this change was not made earlier, I can find no certain answer At the
time Respondent adopted section 12 4 from the Union's proposal, it probably did not occur
to Respondent (and quite probably, not to the Union) that a section in the no-strike article
could affect the separate management rights clause However, at the end of the April 15
meeting, when it appeared that the Union was prepared to accept the contract if a wage
increase was provided, the Respondent probably availed itself of the 2i/_, months from
Apiil 15 to July 1 to read over the contract a few times Not uncommonly, lawyers or
other persons, the more time they have to go over a contract or other instrument, the
more things they will see that previously did not occur to them.
21 Section 10 5:
It is possible that an employee occupying a job classification with the same or
a higher maximum straight time rate of pay than the job classification which is
posted may desire, for personal reasons, to bid on the posted job with a view to
transfer to that job. Such bidding will be permitted on the following basis:
(a) Employees thus bidding for transfer to a posted job will be considered on
exactly the same basis as employees seeking promotion to the job and the assign-
ment to the job will be made on the basis set out in Section 10 2 above
(b) An employee transferred to a new job under this section must accept the
same rate of pay for the new job which would have been paid an employee promoted
into the job.
as The General Counsel, as previously indicated, apparently takes the position that any
change regarding contract provisions previously agreed upon during the course of
negotiations was indicative of bad faith, particularly after the Union's offer on April 15,
1964, to sign the contract if a wage increase was forthcoming
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
promotions but for jobs that might be preferable to an employee even though no
promotion was involved. The perceivable benefit to the Company from the change
is not apparent other than the fact that the change might contribute to better
morale among employees and therefore promote greater general efficiency.
With respect to article 13, management rights, the company proposal on July 1
made one change. Prior to the change, article 13(i), which was one of the stated
management rights, read:
(i) The right to discipline, demote or discharge for just cause: and for pur-
poses of clarity it is stipulated that just cause for discharge shall include, but
shall not be limited to, the following:
There are then enumerated 20 types of conduct, numbered 1 through 20, that are
examples of just cause for discharge Item 20 in this list, read-
(20) Failure to leave Company premises immediately upon disciplinary sus-
pension, regardless of the justice or merits of the suspension itself.
The Company's July 1 proposed contract simply omitted item 20, above, and sub-
stituted nothing in its place.
It is true, as Williamson testified, that the Union had never agreed to the deletion
of article 13(i)(20). The Union had opposed article 13 in its entirety and not
simply subsection (20). But I cannot regard the deletion of part of the objec-
tionable (from the Union's standpoint) management rights provision as indicative
of the Company's bad faith. Although it was a minor concession, it cannot be
regarded as a move in the opposite direction from good-faith bargaining and agree-
ment upon the terms of the contract. Moreover, it was a rather reasonable deletion
and one making for a more workable contract. This for the reason that subsection
(20) required a suspended employee to immediately leave company property regard-
less of the merits of the suspension; article 11, however, the grievance procedure
clause, as its first step, required a grievant to discuss (orally) the matter with the
foreman "where the alleged grievance has arisen." 31
Another change in the contract proposal made by the Company on July 1 was with
respect to article ii, section 11.4, step four(c), which was the grievance and arbi-
tration article. The aforementioned subsection read:
(c) The arbitrator must decide each grievance in the light of this contract
as it may be amended or supplemented as of the date on which the particular
grievance occurred. The arbitrator shall have no power or authority to add
to, subtract from, or in any way modify the terms of this agreement [The
change made by the Company on July 1 added the following], but shall have
authority only to interpret and apply the provisions of this contract which shall
constitute the basis upon which his decision shall be rendered, and if any
grievance arising out of any action taken by the Company in discharging, sus-
pending, disciplining, transferring, promoting, or laying off any employee is
carried to arbitration, the arbitrator shall not substitute his judgment for that
of the management and shall only reverse the action or decision of the
Company if he finds that the Company's complaint against the employee is not
supported by the facts, and that the Company has acted arbitrarily and in bad
faith or in violation of the express terms of this agreement.
At the July 1 meeting, evidently referring to the above addition to subsection (c),
the Company said that it had made the change because of recent arbitration deci-
sions. At the hearing and in its brief, Respondent refers to a specific case that it
states led to the insertion of the additional language in subsection (c), above.32
A reading at the decision and the arbitration clause in the contract considered by
the court in that case would indicate that Respondent in the instant case was indeed
seeking to use the same or comparable language and that the cited decision was
the source thereof. The existing arbitration clause in section II of Respondent's con-
31 As far as appears, the Union had never raised with the Company this matter of an
apparent conflict between article 13(1) (20) and article II and may have been unaware of
it since the Union was opposed to the entire article 13 as a general proposition. There
is no evidence that the Company itself was aware of the apparent conflict until around
the time it made the deletion.
32 Truck Drivers & Helpers Union, Local 784 v. Urey-Talbert Company, 330 F. 2d 562
(C.A. 8).
ARKANSAS LOUISIANA GAS COMPANY 891
tract proposal prior to July 1 evinced the same general intent ("The arbitrator must
decide each grievance in the light of this contract . . . and . shall have no
power to add to, subtract from or modify any of the provisions of this agreement.
") as was, in the court's opinion in the cited case, accomplished by the more
detailed language of the contract in the Urey-Talbert case. Moreover, since the
cited case was an actual demonstration of an arbitration clause that was held to
have limited the arbitrator's discretion or power, it was not illogical or unreasonable
for Respondent herein to seek to incorporate the same language in its contract pro-
posal, in view of Respondent's evident interest, from the time of its first arbitration
proposal in October 1963, in limiting the arbitrator's scope to the four walls of the
contract.33
Even though it may occur at an advanced stage of contract negotiations, I do
not regard it as unreasonable or inconsistent with the obligation imposed by the
Act, for either party to propose the incorporation of a clause, on a subject in the
process of negotiation, tailored to a recent relevant court decision or an impending
or actual legislative enactment. For instance, if between April 15 and July 1 a
Federal court of appeals or Supreme Court decision had issued in which it was
held that, absent delineation and limitation in the contract of the scope of the
authority of union stewards and committeemen, the Union would be liable for all
acts and conduct of such persons, I would regard it as quite reasonable for the
Union herein to propose on July 1 an amendment to the contract dealing with
the committeemen or stewards, for the purpose of describing the precise authority
of such persons. By the same token, I do not regard Respondent's proposed change
in the arbitration clause as inconsistent with its bargaining obligation
We come now to the changes proposed by Respondent on July 1 in the two
articles, 16 and 17, of the contract that deal with insurance and pensions. In its
original contract proposal of September 1963, the Union had no provision dealing
with insurance and pensions. At no subsequent time did the Union make a pro-
posal on these subjects. As far as the record indicates, there-was little or no dis-
cussion of these subjects during the negotiations. The insurance and pension pro-
visions were set forth in the Company's first contract proposal and remained unal-
tered in subsequent drafts until July 1, 1964. In essence, the insurance and pension
contract articles incorporated the existing companywide insurance and pension
programs into the contract, affirming their applicability to the employees in the
bargaining unit and stating that the Union recognized that all eligible employees
will participate. Both articles provided: "It is recognized that matters respecting
the provisions of the Insurance Program and its administration ["Pension Plan
and its administration" in the corresponding article] are not subject to the grievance
procedure." While there was no provision in the contract for notification to the
Union of proposed changes in the insurance and pension programs, and while there
is no evidence of discussion on the subject, it would, as a matter of law, be neces-
sary for the Company to notify the statutory bargaining agent of any proposed future
changes in the programs insofar as the changes affected the unit employees.
On July 1, the Company proposed to add to the insurance and pension articles
the following:
Changes may be made in the Company's Insurance Program [and pension
plan] from time to time without the prior consent of the Union, provided that
notice of each such change is promptly given the Union and provided that the
changes are of general application and not for the purpose of unreasonably
discriminating as against the employees in this particular bargaining unit.
As we have seen, on July 1, Williamson voiced on specific comment or objection
to the foregoing proposed change, or to any of the other changes. Williamson's
testimony was that he made a general statement to the effect that he was greatly
surprised that any changes had been made in the proposed contract since he had
understood that the various contract provisions had been agreed upon, plus the fact
sa It is not clear exactly when the Urey-Talbert decision first came to Respondent's at-
tention. Since the decision of the Eighth Circuit Court of Appeals was dated April 14,
1964, it is unlikely that Respondent in Shreveport or Texarkana, was aware of it at the
time of the April 15 meeting. At some time between the April 15 and July 1 meetings
Respondent's attorneys became aware of the decision; they brought it to the attention
of the Respondent's representatives; and the provision in question was incorporated in
the July 1 proposal, at the first meeting that had been arranged since April 15
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that on April 15 Sparks had accepted the contract except for wages.34 There was
no attempt to bargain regarding the proposed changes on July 1 and it was not until
September 23, 1964, that the Union sought the resumption of contract negotiations
In its answer to the General Counsel's complaint, the Respondent states that the
reason it proposed the changes in the insurance and pension articles was because the
insurance and pension plans covered all its approximately 2,721 employees and the
Texarkana unit consisted of approximately 43 employees. Accordingly, " .. the
Company desired to avoid, if at all possible, having to negotiate with this bargaining
unit every time it made a change in its companywide plans. Under the circum-
stances in which the July 1, 1964, proposal was made . , it was thought that
the Union would agree to these changes in order to finalize the contract because
its bargaining position was rapidly deteriorating " 35
In appraising Respondent's conduct as a whole, as well as in appraising Respond-
ent's proposed changes in the contract on July 1, 1964, I have been fully cognizant
of the foregoing statements in Respendent's answer to the complaint In cases
involving Section 8(a) (5) of the Act, parties rarely admit or advert to the fact
that relative bargaining strength at various stages of negotiations is a factor in
positions taken or in proposals made. Labor-management contract negotiations,
however, are not philosophical disputations nor are they idealized exercises in
sociological or economic theory. We would be closing our eyes to reality and
experience if we were not aware that collective bargaining inevitably includes, inter
aha, an appraisal by each party of its relative bargaining strength in a particular
situation and with regard to particular subjects. Such appraisal being relative includes
an appraisal of the opposite party's position. These appraisals are revised from time
34 The company notes of the July 1 meeting, inter aha, state
Williamson stated Insurance and Pension was acceptable to Union, and there was
very little discussion. Breedlove's notes do not reflect any acceptance of these
sections Williamson stated that the Union did not make a proposal on Insurance
and Pension plans, as he did not think 40 employees, being a small percentage of
employees covered, could change company policy on these plans
It is my opinion that the statement above, that Breedlove's notes do not reflect accept-
ance of the sections, is a reference to notes taken by Breedlove at the prior meetings.
Breedlove took all such notes. But on July 1, Breedlove was the company spokesman
and he did not take the notes In my view, Breedlove's notes of prior meetings did not
reflect union acceptance of the insurance and pension articles because the articles were
not a topic of discussion and in that sense there was no express acceptance as in the
case of other articles which were discussed at length and eventually agreed upon How-
ever, the fact that in prior meetings, the Union did not object to or seek to discuss in-
surance and pensions was, under all the circumstances, at least tantamount to tacit
acceptance, certainly by April 15, when Sparks made his previously described announce-
ment of it willingness to accept the contract except for wages I also believe that on
July 1 Williamson voiced no objection to the insurance and pension articles even as
changed and he may well have stated that those articles were acceptable to the Union
a5 In another portion of its answer, Respondent states
Respondent met with this Union every time the Union requested a meeting ; at any
and all times, including sessions on into the night Twelve separate bargaining
sessions were had in all However, the Union permitted long periods of time to
elapse between meetings and this became more and more apparent as time went on
Only four bargaining sessions were held after February 15, 1964, although the
Company was ready and willing to meet with the Union at any time and did in
fact meet with the Union every time a meeting was requested Under these circum-
stances, with months and months going by without agreement, and with apparently
not a great deal of aggressive interest in the negotiation on the Union's part, the
Company's bargaining position strengthened materially as the extended bargaining
period wore on; and, correspondingly, the Union's bargaining position weakened
Therefore, with the relative bargaining strength of the parties changing with the
long lapse of time, the Company strengthened its demands at the bargaining table in
order that the contract when ultimately signed would be as simple to administer
from the Company's standpoint as possible For example, a provision was proposed
in the Company's most recent offer which would have permitted the Company to make
changes in its Company-wide insurance and pension plans without having to amend
the Texarkana contract every time, so long as the changes were of Company-wide
application and did not discriminate against the Texarkana unit This was a rea-
sonable proposal ; but it is one best advanced by a eompany from a position of
strength
ARKANSAS LOUISIANA GAS COMPANY 893
to time during the course of negotiations The appraisals are affected by the argu-
ments and counter arguments that arise during negotiations as well as by relevant
circumstances. A union's bargaining position may be strengthened if initially or
during the course of negotiations it becomes aware that the employer has recently
accepted a major contract for which uninterrupted production and prompt com-
pletion is essential. A real or potential strike could not be borne. An employer's
bargaining position may be strengthened if it is aware of internal dissension within
the union or of the presence of the rival union lurking in the wings. But relative
bargaining strength is most in evidence, whether expressly alluded to or not, where
economic bargaining power strongly preponderates in the Union or in the employer,
as the case may be. In such situations there may well be good-faith bargaining
but the resulting contract or the choice offered will reflect the relative bargaining
strengths In other situations, where bargaining positions are more equal, bar-
gaining strength may be less decisive but it will be an important factor in evolving
a contract. In fact, the balancing of the bargaining strengths may be the factor
that produces a workable contract fair to both sides.36
The foregoing references to rather elementary facts appears appropriate in view
of Respondent's answer in which it stated that, what it considered to be the weak-
ening bargaining power of the Union, was a factor that prompted the company pro-
posal for changes in the contract on July 1. I do not conclude, because the
Company proposed changes, in part, at least, because it thought that the Union
would accept them, owing to the Union's allegedly depleted bargaining strength, that
this in itself establishes bad faith.37
My basic concern is the matter of good-faith bargaining, with all that is implied
therein, including the consummation of a contract. Indeed, even the desire or will-
ingness to sign a contract is not dispositive if the July 1 changes in the contract
were so onerous or unreasonable that they bespoke bad faith or if the Company
refused to bargain regarding the proposed changes.
Regarding some of the July 1 changes, I perceive nothing unreasonable or onerous.
For instance, the proposed deletion of one of the specifications in the manage-
ment rights clause. The change in the promotions clause whereby an employee
would be allowed to bid on a job even though it involved no increase in pay would
also appear to be innocuous and not to the Union's or the employees' detriment.
The proposed provision in the no-strike clause stating that it did not qualify or
affect the management rights clause has been heretofore analyzed in this Decision.
I regard the proposal as a clarification of a possible but not necessarily a real ambi-
guity in the contract. I do not, on the evidence before me, regard it as an escalation
of the price for contract agreement The proposed change in the pension and
insurance programs and the background therefore has been described The Union
had never sought any degree of participation in the aforesaid plans and on July 1
seemed content with the proposed change.
With regard to the proposed pension and insurance change, as well as with
respect to the other proposed changes, the Union simply expressed the view that
it had believed that all the items in which changes were proposed had previously
been agreed upon.38 The Union never pointed out to the Company or to the instant
record what, if anything, it considered to be unreasonable or unfair or onerous in
the proposed changes. No effort was made to negotiate with the Company about
the specific proposed changes, on July 1 or thereafter, and the first attempt by the
Union to resume negotiations was on September 23, 1964.
Since no attempt was made to bargain about the specific individual proposed
changes, I do not have before me an important area wherein the Company's good-
faith regarding the changes was tested. The changes were proposed changes. The
w Although economic bargaining strength, is seldom adverted to in Section 8(a)(5)
cases, I am not, by mentioning it, conjuring up some law of the jungle and injecting it
into an area where it does not exist. Basic to the Act is the recognition by Congress in
the "Findings and Policies" thereof, of "the inequality of bargaining power . . ." between
individual employees and their employers. The Act, by protecting the right of employees
to join unions and thus bargain collectively, did not exercise bargaining power but
simply sought to balance it and thereby recognized the continuing existence of bargaining
power in the dealings of labor and management.
37 Of course, if the proposed changes herein were for a 10-percent cut in wages ; a
reduction in the number of holidays to four; and the deletion of the article on layoffs,
it would be difficult to regard them, in the circumstances of this case, as anything but
onerous and a naked display of bargaining strength, having no other reasonable
justification.
's This position has been discussed above.
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
good faith of the Company could be tested significantly by the Union's rejoinder
with regard to specific changes. For instance, on the proposed change in the
insurance and pension plans, the Union might have said, "We have already agreed
to allow you to completely control the administration of the plans but we are not
prepared to agree to allow you to make changes in the plans without at least notifying
us beforehand of such proposed changes; with notice being given to us, we are
at least in a position to present our views to the Company before it acts." The
Company's rejoinder would have been a factor in appraising its good faith, but no
opportunity arose for such a test.
I do find that by proposing changes in its contract offer that the Respondent, on
July 1, 1964, independently violated Section 8(a)(5) of the Act.39
We now consider the matter of wages. As we have seen, from October 1963 to
May 22, 1964, the Company's position vis-a-vis the Union was that the contract
should provide for no wage increase either in base rates or in existing individual
rates. The Union made a wage proposal at the sixth meeting that entailed substan-
tial increases in the existing base rates 40 Although not spelled out at the time,
changes in base rates would evidently also involve adjustments in existing individual
rates.41
At the eighth meeting, agreement on wages was listed as one of several items
that the Union considered essential for the consummation of a contract. The Union
again, at the ninth meeting, according to the Company's longhand notes, asked if
there was any money (wage increase) involved in the Company's proposal. The
Company said no. At the 10th meeting the Union again said that it wanted an
increase in wages. The Company said an increase was not timely. The 11th
meeting was the April 15, 1964, meeting, previously described, at which the Union
asked if the Company could offer even a 5-cent increase. The Company said no,
that it was an integrated operation and must preserve uniformity and that it had
to stick to its original proposal that existing rates would continue. The Company
said that its Texarkana rates were the same throughout the Company 42
When the Union stated that it accepted the contract except for wages, the Com-
pany did not alter its refusal of any wage increase. It gave no indication of the
possiblility of a wage increase. At earlier meetings, regarding various union pro-
posals, the Company had said that it would give further consideration to various
specified proposals. And, on some matters, it did come in later with an acceptance
or a counterproposal. But, regarding wages, the Company never made a state-
ment about further consideration or held out any possibility of doing something on
the wage issue. On April 15, although it was reasonably apparent that same com-
pany move or expressed possibility of a move on the wage issue would, or might
well, result in a signed contract or, as a minimum, would materially advance the
possibility of contractual agreement, the Company simply said, no, for the reasons
aforedescribed.
At the hearings, Perry testified that the Company makes periodic wage reviews
and that these reviews "ordinarily came in at least once a month " 43
As stated in the Company's May 22, 1964, letter to the Union, the Company had
just completed a periodic wage review and had placed certain wage increases in
effect in its unorganized distribution operation on May 16, 1964. It stated that it
proposed to put the same adjustments into effect in certain categories in the certi-
fied bargaining unit and requested the Union's concurrence.44
° The General Counsel has described the situation as "Respondent's unjustified with-
drawal on July 1, 1964, from prior agreements with the Union in about five major areas
of contract negotiations."
40 For instance , to take a few categories, the existing base rates and the Union proposed
based rates for certain of the classifications involved were:
Building safety inspector, $2-2 85 ; Clerk class A, 1.75-2 20 ; Clerk class B,
1 25-1 90, Meter repairman, $2-2 58.
41 The base rate of the building safety inspector was $2 but the individual holding
that job was actually receiving $2 55, apparently as the result of length of service and
merit Another typical example was the meter repairman whose base rate was $2 but
who was receiving $2 80 In the fairly large category of distribution helpers, the base
rate was $1 30 ; 1 40 after 6 months , and 1 50 after 1 year. The actual individual rates
were all in the range of $1.30 to 1.50
42 Among its divisions the Company had exploration, production, pipeline, and distribu-
tion. Texarkana was a distribution operation.
43 The witness also said that the wage information contained in the reviews was "just
one of the factors that was involved," without stating what were the other factors
94 As noted, this letter was also sent to the individual employees in the unit, according
to Perry.
ARKANSAS LOUISIANA GAS COMPANY 895
Since the Company made a decision to grant certain wage increases to its unor-
ganized distribution employees effective May 16, it is apparent that the wage review
and the decision took place prior to May 16. Perry testified that the review and
decision "probably" occurred "during the first week or two of May." The witness
was asked:
Q. So at the April 15 bargaining session you had no idea whatsoever that
this periodic review would be made?
A. Well, I am not going to say I had no idea whatsoever because there is
a periodic study of what these reviews reveal. Some times they are additive,
but I had no knowledge as far as management approval or indication to give
such approval shortly before May 16.
Considering all the foregoing and other testimony of Perry as well as the record
as a whole, I believe that while the company negotiators, a rather high ranking group,
may not have known on April 15 that a wage adjustment had been approved for
the unorganized distribution employees, they were aware of the wage review situa-
tion and were aware of at least the possibility of a movement on wages on the Com-
pany's part. Since it was the Company's consistently stated position that its wage
policy required uniformity, any wage action affecting the unorganized distribution
employees would be offered equally to the bargaining unit people (as was done on
May 22).
Having in mind the circumstances of the April 15 meeting, and the fact that
good-faith bargaining envisages frank discussion and an earnest effort to consum-
mate a collective-bargaining contract, the Company, in our opinion, was derelict
in its statutory duty in simply resisting the possibility of complete contractual agree-
ment or the possibility of material progression toward such an agreement by stating
that it stood on its original wage position of no wage increases. The only further
contribution offered by the Company at that important juncture was the reiteration
of its requirement for uniformity in wages. It is my opinion that good faith would
have at least entailed an explanation of the wage review situation and, without
making any binding commitment, some discussion of the possible outcome of such
a wage review was appropriate, including the factors that might point in one direc-
tion or the other on the matter of wage increases. Surely, the company negotiators,
consisting of such highly placed individuals as Perry and the district manager, as
well as the manager of the entire Louisiana-Texas division, were in a position to
do the foregoing if they were in good faith seeking to further the progress or
consummation of bargaining and the possible signing of a contract.
There is no explanation or evidence offered by Respondent that conditions or
the Company's economic position had changed or had materially changed from the
time of the monthly wage review of March 1964 wages (presumably reviewed in
early April) to the first 2 weeks of May 1964 when, apparently, the April review
took place. However, no later than 3 or 4 weeks after the Company's completely
negative position on April 15 regarding wage increase possibilities, the Company
made a definitive decision to grant certain increases to its unorganized distribution
employees. Despite its position on April 15 that it could do nothing but reiterate
its original October 1963 position that the rates in existence in October 1963 would
have to be the rates that it was proposing in the contract on April 15, 1964, the
Company, in early May 1964, decided that it could and would increase the base
rate of unorganized distribution helpers 45 substantially. Thus, the base rate in this
category, from October 1963 and in all company proposals through April 15, 1964,
was- $1.30 starting rate; $1.40 after 6 months; and $1.50 after 1 year. The base
rates placed in effect for the unorganized distribution helpers and subsequently
offered to the Union on May 22, 1964 were: $1.50 starting rate; $1.60 after 6
months; $1.70 after 1 year, $1.80 after 2 years. Thus, the starting rate and the
6 month progression rate each involved a 20-cent increase, as did the 1-year
progression. Whereas formerly $1.50 was the top progression rate for an employee
in the job 1 year or longer, this had been raised 30 cents for a 2-year man. The
base rate for an installation man was raised from $1.50 to $1 80 as was the rate for
an installer. 46 In the light of the fact that the Company could say nothing but, no,
on April 15, when it was asked if even a 5-cent increase was possible, the fore-
going increases were impressive.
I am also of the opinion that, in another respect, Respondent's handling of the
wage increase that it eventually granted did not reflect good-faith bargaining. At
such time, in early May 1964, as Respondent determined that it was in a position
to, or was prepared to, offer a wage increase, it obligation was to so advise the
45 The second largest classification in the Texarkana unit.
41 Installer and installation man were two different job classifications.
896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union, the statutory bargaining agent. Under such circumstances, the Union would
then have been in a position to discuss with Respondent the proposed increase and
to negotiate thereon. Respondent, however, instead of following the above procedure,
confronted the Union, on May 22, 1964, with a fait accompli regarding the wage
increase and forwarded to the Union a letter on which the Union could signify its
acceptance of the wage increase that had already been placed in effect for the
unorganized gas distribution employees.
That the situation was one where Respondent in substance presented the Union
with a unilaterally accomplished fact rather than enter into good-faith bargaining is
apparent. Respondent has established the rule or guideline that wage rates must
be uniform in its entire distribution system. Throughout the negotiations with the
Union, until May 22, 1964, Respondent had consistently cited its own rule of uni-
form wages as the reason why it could offer to the Union no wage increase what-
soever. This rule of uniformity being a creature of Respondent's own creation,
was not a matter of legal or other requirement, but if Respondent chose to establish
such a rule it was free to do so. The implementation of the rule was also within
Respondent's control. Respondent could change wage rates simultaneously through-
out its distribution system or if the impetus or appropriateness for a wage adjust-
ment became first manifested in one facility, Respondent could change the rate in
that facility and then bring the rates of other facilities into line therewith. With
the advent of a certified bargaining agent at its Texarkana facility, Respondent's
system of uniformity could and did remain unaltered. Quite clearly, Respondent had
no statutory bargaining obligation with respect to its unorganized employees in the
gas distribution division. But Respondent did have a statutory obligation to the
Union to bargain in good faith regarding wages, hours, and working conditions.
Good-faith bargaining is not bargaining after the fact. For instance, an employer
does not fulfill his obligation to bargain regarding the contracting out of work if
he first contracts out the work and then offers to bargain with the union about
the accomplished fact So, too, if the employer first grants, promises or offers a
wage increase to his employees and then offers to bargain with the union, he is
not fulfilling his statutory obligation. Nor does the employer discharge his bar-
gaining obligation when he simply confronts the union with a situation that has
already become immutable by the prior freely chosen unilateral act of the employer.
In the case before us, Respondent, on May 16, granted a wage increase to vari-
ous classifications of its unorganized distribution employees. This action, immedi-
ately, under Respondent's immutable policy of uniformity, made it inevitable that
any wage increase for the organized unit must be the same. Whereas, from October
1963 to May 1964, Respondent had confronted the Union with a consistent denial
of a wage increase because the rates for organized and unorganized must be uni-
form, it, now, on May 16 simply raised the uniform rates a few notches. The
Union was then faced, not with an opportunity to negotiate and bargain for the
unit it represented, but with an accomplished fact. This is borne out by Respond-
ent's letter of May 22. The letter did not offer or propose to negotiate about a
proposal of Respondent to grant certain wage increases but stated that on May 16
the increases had been granted to the unorganized people and that Respondent
wished to grant the same increase to the organized unit. The Union was simply
asked to "indicate the Union's concurrence by signing and returning to us the
attached copy of this letter." To make abundantly plain that no negotiations were
contemplated, Respondent also sent copies of the letter to the employees involved.
Any effort at negotiation on the Union's part would thus be under the gun of
jeopardizing or delaying, in the eyes of the employees, a wage increase already in
effect for the unorganized.
The requirement that Respondent, before placing any wage increase into effect,
was first obliged to advise the Union that it proposed a certain wage increase and
was required to bargain thereon, is dictated by the Act and by decisions of the Board
and the courts. The fact that this statutory obligation would entail that Respondent
delay any action regarding wage increases for the unorganized employees as well
as the organized is the result of Respondent's self-imposed rule of uniformity. It
is not attributable to any attempt or right on the part of the Union to bargain for
unorganized employees. After discharging its statutory obligation to the certified
Union, Respondent was of course free (except as it recognized its own rule of
uniformity) to grant or to not grant the same increases to its unorganized employees.
The facts in this case have demonstrated the vital importance of the wage issue
to the consummation of a contract between the parties. In the respects hereto-
fore set forth I find that Respondent did not bargain in good faith with the Union
on the crucial wage issue. Respondent's conduct in this respect evinces a rather
determined effort to deny the Union the certified bargaining status to which it was
entitled. Respondent was at pains not to do anything regarding wages that might
ARKANSAS LOUISIANA GAS COMPANY 897
legitimately enhance the Union's status in the eyes of the employees Respondent
quite clearly did not wish, by indicating to the Union that a wage review was
being made and that some wage action on Respondent's part was at least possible,
if not probable, to place the Union in the position of so reporting to its constitu-
ents. Nor did it wish the Union to have at least the foregoing information and
thus enable the Union to negotiate more meaningfully regarding the factors entailed
in the wage review and so forth. Further, Respondent, when it did reach a point
when it intended to grant wage increase, did not so advise the Union This again
appears to have been an effort to deny the Union the status to which it is entitled
by reason of its certified position. Instead, in the manner described heretofore,
Respondent made it clear to the Union and to the employees that the wage increase,
granted first to the unorganized employees, and then granted unilaterally, as a
matter of grace, on the employer's part, to the unit employees, had little or nothing
to do with collective bargaining or with a certified union. The Union's role was
effectively reduced to rubber stamping a fait accompli and was devoid of meaningful
participation.
In writing to the Union on May 22 and requesting its concurrence in the appli-
cation to the unit employees of the wage increase previously determined and
granted to the unorganized employees, Respondent, as we have seen, was far
removed in spirit from the essential attributes of good-faith bargaining. This unwill-
ingness to accord to the Union its proper status as bargaining agent reflects upon
Respondent's entire approach to the Union. It raises a question about various
positions and actions taken by Respondent in the course of the contract negotiations.
Did Respondent's various positions reflect legitimate bargaining concern on various
subjects, not inconsistent with an overall desire to reach contract agreement, or
was it Respondent's concern that no contract would be consummated or that if a
contract was concluded it would be on such terms that it would illustrate that,
with or without a certified Union, Respondent continued to exercise essential control
over wages, hours, and working conditions.
I have previously considered Respondent's insistence on its management rights
clause and I have also considered as allegedly independent violations of Section
8(a)(5) of the Act, the various changes made in the contract proposal on July 1,
1964. I regard the management rights clause as essentially in issue to be met
frontally, even though, in considering the picture as a whole, there may be some
question about Respondent's motivation. I believe the Supreme Court's decision,
previously referred to, in this area of a management rights provision, is such that
the evidence herein is not sufficient to overcome the legitimacy of Resondent's position
regarding the provision.47 I am likewise of the opinion that, the various contract
changes of July 1, when considered independently or in conjunction with Respond-
ent's basic approach on the vital wage issue, have sufficient warrant in themselves
(as analyzed previously) to exclude them from an inference or conclusion of bad faith
69 As the Board argued fully in the American National Insurance Co case, supra, there
is a tenable basis for concluding that a broad management rights clause is inconsistent
with the basic concept whereby a union is accorded certified bargaining status The
latter would seem to envisage a material cessation of unilateral employer control over
essential conditions of employment. But the Court did not accept this position and, in
my opinion, rejected it. Obviously, there are situations where the employer's bad faith
may be so manifest that it is proper to conclude that the bad faith has also motivated
insistence on a broad management rights provision It is unrealistic to believe that in-
sistence on all broad management rights clauses does not have as part of the motivation
thereof an employer's unwillingness to, or determination not to, relinquish management
control over many basic features of the employer-employee relationship Express proof
of the foregoing would seem unnecessary and would not appear to be dependent on
whether or not in some other respect in a particular situation the employer had not bar-
gained in good faith. To conclude that a management rights clause insistence is illegal
in the latter situation because it is said that the management rights clause was motivated
by a rejection of the collective-bargaining principle (by an employer who in some other
respect did not bargain in good faith) is an indirect assault on the management rights
clause. Unless, as indicated previously, the employer's bad faith is manifested through-
out the bargaining, there seems little more reason for concluding that insistence on the
management rights is any more a manifestation of bad faith or of an illegal approach
to bargaining in the case of one employer than in the case of another even though one
employer has in all other respects bargained in good faith while another has failed to
do so regarding some aspect of the bargaining obligation. The resolution seems even less
clear when grievances and/or arbitration provisions are also in the bargaining picture
206-446-66-vol. 151 58
898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In the light of my finding that Respondent failed to bargain in good faith with
respect to wages I find that subsequently expressed doubts regarding the Union's
majority status are not determinative . Both reason and precedent dictate the
remedying of the refusal to bargain , particularly , since any disenchantment with
the Union , on the part of the employees who previously voted for the Union in a
Board election , may be attributed , in material part, to Respondent 's bad faith
regarding the crucial wage issue . 48 Had Respondent , on April 15, 1964, given any
meaningful response or information regarding the current wage review and its
possibilities , it is reasonable to conclude that either on that date or shortly there-
after a contract would have been reached . This is also true with respect to the
situation in early May 1964 when Respondent did, in its own mind, decide upon
the feasibility of certain wage increases . But here, again , Respondent , rather than
imparting to the Union its willingness to grant a wage increase and thus insuring
or facilitating consummation of a contract , chose instead to confront the Union with
a fait accompli , an aftermath of unilateral company action 49
III. THE REMEDY
The customary remedial action for a refusal to bargain in violation of Section
8(a)(1) and ( 5) of the Act is recommended, namely, that Respondent , upon request,
bargain in good faith with the Union , and if agreement is reached it is to be embod-
ied in a signed written contract.
CONCLUSIONS OF LAW
In the respects heretofore described , Respondent , since April 15 and early May
1964, and thereafter , has failed and refused to bargain collectively in good faith
and has thereby violated Section 8(a) (1) and ( 5) of the Act.
RECOMMENDED ORDER
Upon the basis of the findings of fact and conclusions of law and the entire
record in the case , and pursuant to Section 10(c) of the National Labor Relations
Act, as amended , it is recommended that the Respondent , Arkansas Louisiana Gas
Company, its officers , agents , successors , and assigns , shall:
1. Cease and desist from refusing to bargain in good faith with Local 729, Inter-
national Chemical Workers Union , AFL-CIO, with respect to its Texarkana facility
in the appropriate unit 50
2 Take the following affirmative action to effectuate the policies of the Act-
(a) Upon request , bargain collectively in good faith with Local 729, Interna-
tional Chemical Workers Union , AFL-CIO, and, if agreement is reached , embody
such agreement in a signed written contract.
(b) Post at its place of business at Texarkana, Texas, copies of the attached
notice marked "Appendix B."51 Copies of said notice , to be furnished by the
48 While greater diligence in arranging meetings might have been shown by the Union,
the Union , from October 1963, was confronted with an unyielding insistence on a broad
management rights clause as well as an equally unyielding position that existing wage
rates must continue . No amount of meetings would apparently serve to alter Respond-
ent's position on these vital matters and even when , in May 1964, a wage increase was
definitely contemplated and then decided upon by Respondent , it excluded the Union
from the picture and simply accorded it in the choice of concurring in Respondent's
decision that was already effectively implemented.
40 Absent the preceding refusal to bargain , the decertification petition, in my view,
contrary to that of the General Counsel, would have been a basis for a good -faith doubt
of majority on Respondent ' s part. The petition was not dismissed for the lack of a
supporting showing of interest and the customary minimal showing is 30 percent. Also,
the General Counsel at one point stated that the petition had been supported by 20 em-
ployee signatures which of course is more than 30 percent in a unit of approximately 40.
50 The appropriate unit consists of all employees of Respondent's Texarkana district,
including warehouse clerical employees , but excluding office boy, office clerical employees,
collectors , professional employees , guards, watchmen , and supervisors as defined in the
Act.
ii If this Recommended Order is adopted by the Board , the words "a Decision and Order"
shall be substituted for the words "the Recommended Order of a Trial Examiner" in
such notice If this Order is enforced by a decree of a United States Court of Appeals,
the notice shall be further amended by substituting for the words "a Decision and Order"
the words "a Decree of the United States Court of Appeals , Enforcing an Order "
ARKANSAS LOUISIANA GAS COMPANY 899
Regional Director for Region 16, shall, after being signed by an authorized repre-
sentative of Respondent, be posted immediately upon receipt thereof, and be main-
tained for 60 consecutive days thereafter, in conspicuous placs, including all places
where notices to employees are customarily posted Reasonable steps shall be taken
by Respondents to insure that said notices are not altered, defaced, or covered by
any other material.
(c) Notify the Regional Director for Region 16, in writing, within 20 days from
the date of receipt of this Decision, what steps the Respondent has taken to comply
therewith.52
"If this Recommended Order is adopted by the Board , this provision shall be modified
to read "Notify said Regional Director , in writing , within 10 days from the date of
this Order , R hat steps the Respondent has taken to comply herewith."
APPENDIX A
ARTICLE 13
MANAGEMENT RIGHTS
The Company reserves all rights which it would have in the absence of this
contract except to the extent that those rights are expressly limited by the literal
letter of this agreement, and the exercise of rights thus reserved to the Company
shall not be subject to grievance or arbitration. Without limiting the generality of
the foregoing reservation of rights, which is intended to be as broad and com-
prehensive as it is possible to stipulate by contract, the parties consider it to be
desirable, in order to avoid unnecessary misunderstandings or grievances in the
future, to specify by way of illustration some of the rights reserved to the Company
which might otherwise be sources of potential controversy, these rights being:
(a) The right to determine, direct and, as necessary, change, the working
operations and working forces of the Company in any and all particulars as
the Company may consider in its sole judgment to be required and in the
best interests of its business from time to time;
(b) The right to increase or decrease the working force, to eliminate or
combine lob classifications in whole or in part, and to establish new job
classifications, as the Company may determine to be necessary from time to
time for the efficient conduct of its business in the service area affected by
this contract;
(c) The right to fix the rate of compensation for new job classifications and
for the classifications resulting from the combination of existing classifications
under the preceding clause, provided that the union shall have the right to
bargain for a different rate for such job classifications at the next renewal
date of this agreement and the rate thus agreed upon shall be effective retro-
actively back to the date the new or combined, job classification was established
[underscored in blue].
(d) The right to increase or reduce the size of the Texarkana District, pro-
vided that for purposes of this agreement during the term hereof the Texarkana
District shall always include at least the cities of Texarkana and New Boston;
(e) The right to contract out any or all construction, installation, main-
tenance or other work of whatever kind, even though such work might other-
wise have been performed by employees covered by this agreement;
(f) The right to permit supervisory personnel to perform work which might
otherwise have been performed by employees covered by this agreement, pro-
vided that Company will not use such work by supervisors as a justification
for laying off employees covered by this agreement;
(g) The right to make temporary assignments of employees to work of a
job classification, and during periods when an employee is on such a temporary
assignment he shall be paid at his regular rate of pay.
(h) The right to transfer employees as the Company may determine to be
necessary in the management of its business, provided that the transfers are
in good faith and without any intention to discriminate against any particular
employee;
(i) The right to make rules and regulations not inconsistent with the express
provisions of this agreement and require compliance therewith;
900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(j) The right to discipline, demote or discharge for just cause, and for
purposes of clarity it is stipulated that just cause for discharge shall include,
but shall not be limited to, the following:
(1) Inability, refusal or failure to perform assigned work diligently
and in a workmanlike manner;
(2) Incompetence, inefficience or neglect of duty;
(3) Dishonesty;
(4) Violation of any law while on duty or indictment or conviction
for any criminal offense occuring on or off duty;
(5) Deliberate, or grossly negligent, damage or destruction of Com-
pany's property or any other employee's property;
(6) Wilful neglect in care of, or use of, Company property;
(7) Wilful or negligent endangering of the safety of other employees
or Company propetry;
(8) Insubordination or use of profane or abusive language toward other
employees or officials of Company;
(9) Being involved in horseplay, scuffling or fighting while on duty;
(10) Discourtesy to the public while on duty or while off duty in a
Company vehicle or uniform or under other circumstances where the
other party could reasonably be expected to identify the employee's
relationship to the Company;
(11) Failure to comply with the terms of this agreement or any rule
or regulation not inconsistent with this agreement which Company places
in effect from time to time after due notice;
(12) Drinking beer, wine, whiskey or any other intoxicating beverage
during the period beginning two hours before the employee's scheduled
reporting time and ending when the employee goes off duty;
(13) Reporting for work in a condition indicating that the employee
has been drinking or is under the influence of any form of intoxicant,
drug or narcotic,
(14) Persistent tardiness or leaving work ahead of quitting time;
(15) Failure to report immediately accidents or personal injuries to
the proper authorities;
(16) Falsifying or refusing to give testimony when accidents are being
investigated;
(17) Giving false or materially incomplete information when applica-
tions and physical examinations are being made;
(18) Garnishment of the employee' s wages, unless he shall establish
to the satisfaction of the Company that the alleged debt on which the
garnishment is based is not due;
(19) Failure to observe warning and instruction signs posted by the
Company;
(20) Failure to leave Company premises immediately upon disciplinary
suspension , regardless of the justice or merits of the suspension itself.
APPENDIX B
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our employees that:
WE WILL. upon request, bargain collectively with Local 729, International
Chemical Workers Union, AFL-CIO, with respect to a contract in the certified
bargaining unit at our Texarkana disctrict and if agreement is reached we will
enter into a signed written contract.
ARKANSAS LOUISIANA GAS COMPANY,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting
and must not be altered, defaced, or covered by any other material.
FRANKLIN ELECTRIC CO., INC. 901
If employees have any question concerning this notice or compliance with its
provisions , they may communicate directly with the Board 's Regional Office,
Meacham Building, Sixth Floor, 110 West Fifth Street , Fort Worth, Texas, Tele-
phone No. Baltimore 1-7000.
Franklin Electric Co ., Inc. and International Union of Electrical,
Radio and Machine Workers, AFL-CIO and Employee Rela-
tions Committee (Industrial Relations Committee ), Party of In-
terest and Bonus Committee , Party of Interest . Case No. 25-
CA-2057. August 31, 1965
DECISION AND ORDER
On July 2, 1965, Trial Examiner John H. Eadie issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in and was engaging in certain unfair labor prac-
tices and recommending that it cease and desist therefrom and take
certain affirmative action, as set forth in the attached Trial Exam-
iner's Decision. Thereafter, the Respondent filed exceptions to the
Trial Examiner's Decision and a supporting brief.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Jenkins and Zagoria].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions, the brief, and the entire record
in this case, and hereby adopts the findings, conclusions,' and recom-
mendations of the Trial Examiner, with the modification indicated
in our Order.2
ORDER
Pursuant to section 10(c) of the National Labor Relations Act,
as amended, the National Labor Relations Board hereby adopts as
its Order the Recommended Order of the Trial Examiner, as modi-
fied herein, and orders that the Respondent, Franklin Electric Co.,
Inc., Bluffton, Indiana, its officers, agents, successors, and assigns,
shall take the action set forth in the Trial Examiner's Recommended
Order, as so modified :
'Ferguson-Lander Box Co., 151 NLRB 1615; Grand Foundries , Inc., 151 NLRB 1170;
and Wahlgren Magnetics, a Division of Marshall Industries , 132 NLRB 1613.
2 We agree with the Respondent that in the circumstances of this case the Order
should be limited to remedying the specific unlawful conduct found here. We shall,
therefore, narrow the general scope of paragraph 1(c) of the Trial Examiner' s Recom-
mended Order. Hammond Organ Company, 149 NLRB 997, and N.L.R.B. v. Thompson
Ramo Wooldridge, Inc., 305 F. 2d 807 (C.A. 7).
154 NLRB No. 69.