Columbia Records

National Labor Relations Board - Board Decisions

Dec 17, 1973

207 N.L.R.B. 993 (N.L.R.B. 1973)

COLUMBIA RECORDS, DIVISION CBS
Columbia Records, Division CBS and International
Brotherhood of Electrical Workers, Local No. 45.
Case 31-CA-3380
December 17, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On September 5, 1973, Administrative Law Judge
Jerrold H. Shapiro issued the attached Decision in
this proceeding. Thereafter, General Counsel filed
exceptions and a supporting brief, and the Respon-
dent filed cross-exceptions and an answering brief
and brief in support of cross-exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge
and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the complaint herein be, and it
hereby is, dismissed in its entirety.
DECISION
STATEMENT OF THE CASE
JERROLD H. SHAPIRO, Administrative Law Judge: The
hearing in this case, held on July 10, 11, 12, and 13, 1973, is
based upon unfair labor practice charges filed by the
above-named labor organization on October 5, 1972,
amended on April 20, 1973, and a complaint, issued on
May 15, 1973, on behalf of the General Counsel of the
National Labor Relations Board, herein called the Board,
by the Regional Director of the Board, Region 31, alleging
that Columbia Records, Division CBS, herein called
Respondent, has engaged in unfair labor practices within
the meaning of Section 8(a)(5) and (1) of the National
Labor Relations Act, herein called the Act. The Respon-
dent filed an answer denying the commission of the alleged
unfair labor practices.
Upon the entire record, from my observation of the
demeanor of the witnesses, and having considered the
posthearing briefs, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
993
Columbia Records, Division CBS, the Respondent, a
division of the Columbia Broadcasting System, Inc., herein
called CBS, a New York corporation, is engaged in the
business of producing and selling records and tapes
throughout the United States, including the State of
California, and annually sells and ships products valued in
excess of $50,000 directly to customers located outside the
State of California. The Respondent admits, and I find, it
is an employer engaged in commerce and in an industry
affecting commerce within the meaning of Section 2(6) and
(7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
International Brotherhood of Electrical Workers, Local
No. 45, herein called the Union, is a labor organization
within the meaning of Section 2 (5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Background and the Events Leading up to
Respondent 's Decision to Close Its Recording Studios
and Its Alleged Refusal to Bargain Over This
Matter
This case involves the Respondent's decision to close its
Los Angeles, California, recording studios and have its
artists do all of their recording at outside facilities. The
General Counsel contends that Section 8(a)(5) of the Act
obligated the Respondent to bargain in good faith to an
impasse over this decision and that Respondent failed to
fulfill this statutory obligation. The Respondent contends
that the statute does not oblige it to bargain over such a
decision but, in any event, it did bargain in good faith to an
impasse with the Union.
In order to understand the bargaining which took place
immediately prior to October 4, 1972, the date Respondent
closed its Los Angeles studios, it is necessary to view the
nature of the Respondent's business, its reasons for
deciding to close the studios, its collective-bargaining
agreement with the Union, and its discussions with the
Union which predated the actual bargaining over the
decision to close the studios.
Respondent markets records under the Columbia and
Epic labels. It operates and maintains recording studios in
Chicago, Nashville, New York City, San Francisco, and
prior to October 4, 1972, in Los Angeles. The recording
engineers employed at these studios are represented by
different local unions of the International Brotherhood of
Electrical Workers, herein called IBEW. The Union
represented the recording engineers employed in Los
Angeles. The Union was certified by the Board to
represent the Los Angeles engineers in 1967, but from at
least 1961 had administered the collective-bargaining
agreements entered into between the IBEW and Respon-
dent covering these employees. The most recent contract
207 NLRB No. 153
994 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
covering the Los Angeles recording engineers was entered
into by the Union and Respondent on November 21, 1969,
and was effective to September 30, 1972.1 In 1970
Respondent opened recording studios in San Francisco,
California, and at that time agreed with the Union that
until such time as Respondent entered into a contract with
the IBEW local union whose jurisdiction covered the San
Francisco area, Local Union 202, that the contract
covering the Los Angeles recording engineers would be
applied by Respondent in San Francisco.2
The work performed at the Los Angeles studios prior to
October 4, 1972, by the recording engineers can be briefly
described. A studio was equipped with a number of
microphones, the signals from the microphones were fed
up to a control room where a recording engineer (the
"mixer") had to "balance" the signals in order to achieve
the sound desired by the artist and producer. A second
engineer in the control room operated the tape recording
equipment. Sometime later, a "mixdown" occurred, usually
in the control room and with two engineers present. By this
process, the multiple-channels on the original tape were
transferred to a two-track tape known as a stereo master.
That master was then taken to a "mastering Room," where
it was transferred to a master disk. The master disk was
then shipped out to Respondent's plants where it was used
to press records which Respondent sold. The recording
engineers were also responsible for editing the tapes at
various stages in the recording process and for maintaining
the recording equipment.
For many years the artists under contract with Respon-
dent generally recorded in the studios maintained and
operated by the Respondent, using engineers and produc-
ers employed by Respondent. The artists, in general, were
satisfied with this procedure. This started to change in the
late 1960's, at which time the public's taste for the so-called
contemporary or rock music increased. The public's desire
for contemporary music posed certain problems for
Respondent. Contemporary artists, in general, wanted to
record with producers and engineers of their own choosing
and at studios or other locations of their own choosing.
They did not want to use Respondent's engineers,
producers, or studios. Respondent could not ignore the
demands of the contemporary artists. The sale of their
records was becoming a major part of the record market.
From 1965 to 1971, sales of contemporary artists' records
increased from 21 percent to 45 percent of Respondent's
total sales, and more particularly from 1970 to 1971
jumped from 39 percent to 45 percent. This trend
continued throughout 1972. Under these circumstances,
for Respondent to fail in competition with the other record
companies to sign up contemporary artists would be
financially disastrous. Respondent was handicapped in this
competition. For, as previously described, contemporary
artists wanted to record at locations other than Respon-
i The collective-bargaining agreement speaks in terms of the Union as
the representative of the recording engineers employed by the Company "at
its Los Angeles studios ." It is clear from the whole record, however, and I
find, that the parties at all times understood that the Union represented all
recording engineers employed by the Respondent at all locations, i e.,
outside-studios, and that the contract covered such engineers.
2 Subsequent to the events in this case, the Respondent and IBEW Local
dent's Los Angeles studios and with engineers of their own
choosing.3 But the Respondent's collective-bargaining
contract with the Union required that at least two
recording engineers employed by Respondent be assigned
to work at these outside studios and, if "mastering" was to
be done at an outside studio, the Respondent had to assign
at least one of its engineers. In this respect the contract
with the Union limited the Respondent's flexibility in
negotiating with many contemporary artists, caused
Respondent to fail to sign them up to contracts which, of
course, affected record sales. Respondent, in part because
of this, lost $71,000 in operating its Los Angeles recording
studios during the first 8 months of 1972. A part of this loss
was attributed to certain other requirements contained in
the collective-bargaining agreement with the Union;
namely, shift scheduling, meal penalty payments, and the
continuous overtime provisions. These contractual provi-
sions when applied in the context of the work schedules of
the contemporary artists had increased the Company's
operating costs.
The problems faced by the Respondent, as described
above, existed to a greater or lesser extent at all of its
studios. On November 9, 1971, officials of the Respondent
met in New York City with the business manager of each
IBEW local union that represented its recording engineers.
The purpose of this meeting was to bring to the local
unions' attention the seriousness of the problems faced by
the Company and to determine whether the unions would
approach the problems with a sympathetic attitude.
Present at this meeting was the Union' s business manager,
Andrew Draghi, along with the business managers from
the IBEW locals in New York City, Chicago, San
Francisco, and Nashville. They met with Clive Davis, then
president of Respondent, Noel Berman, CBS's director of
labor relations, and Calvin Roberts and Walter Dean, both
vice presidents of Respondent, Orison Marden, Respon-
dent's west coast director of labor relations, and Roy
Friedman, its director of recording operations. Davis told
Draghi and the other IBEW officials that Respondent was
faced with serious problems because of the increasing
percentage of the Company's record sales attributable to
rock artists who preferred to use their own recording
engineers and disliked recording in conventional recording
studios. Davis further stated that, as a result of this shift in
artists' preference, Respondent was having difficulty in
signing new rock artists since the Company could not,
under the contracts it had with the various IBEW locals,
permit the artists to have their own engineers or do their
own recordings. Charts were presented showing that
Respondent's share of the record market had decreased
and that a competing record label was overtaking Colum-
bia Records in record sales.
At the same meeting, Dean stated that the Respondent
needed relief in three areas: It wanted to be able to record
at outside studios without the use of staff engineers; it
202 entered into a contract covering Respondent 's San Francisco recording
engineers.
3 The increase in the use by Respondent's artists of outside studios is
demonstrated by the fact that in the first 8 months of 1972 over one-third of
Respondent's engineering costs occurred at outside studios as contrasted to
only 15 percent in 1971.
COLUMBIA RECORDS , DIVISION CBS 995
wanted to be able to record at Columbia Records' facilities
without a staff engineer; and, it wanted to have inter-
changeability of engineering personnel between its various
recording facilities.
The spokesman for the local unions, the business
manager of the New York City IBEW local, Arthur Korff,
stated that the unions were willing to listen to and consider
the Company's position at a future meeting, and the parties
tentatively scheduled another meeting to continue the
discussion.
This meeting took place on February 10, 1972, in San
Francisco, California. One week prior to the meeting, Gary
Blohm, Respondent's west coast manager of Artists and
Repertoire Administration and Recording, herein called
"A & R," was discussing a new office procedure with the
Los Angeles recording engineers and, at one point,
according to the credible testimony of the Union's night
steward, Philip Cross, told the group that the Respondent's
President Davis was in town and wanted the engineers to
know that he wanted certain changes in the union contract
that would make certain things smoother for the Company
and the artists and, if the Company did not get these
changes, it would have to close the Los Angeles studios.
The Union's day shift steward, Philip Macy, remarked that
Blohm should talk with the Union's business manager
rather than the engineers. This ended the matter .4
On February 10, 1972, in San Francisco, California,
roughly the same group of union and management officials
met who attended the previous meeting. The spokesman
for the Respondent was Noel Berman, CBS's director of
labor relations, and speaking for the IBEW locals were
Arthur Korff and Draghi, the Union's business manager.
Berman stated the Respondent's problem had intensified
since the last meeting, that he had a written proposal
covering the relief sought by the Company, and that the
Respondent was prepared to grant immediate wage
increases at each of its studios to get the local unions'
agreement on the proposed relief, even though none of
their contracts were ready to expire. The business manag-
ers of the local unions rejected this proposal, stating they
were not prepared to even discuss the Respondent's
proposal for relief unless Respondent agreed to open up
for renegotiation all of their contracts.5 Respondent's
representatives vetoed this proposal and proposed that the
local union for each bargaining unit accept the Respon-
dent's "relief proposal" plus an immediate wage increase,
and that when the Nashville, Chicago, and Los Angeles
contracts expired they would be extended to the expiration
date of the New York contract at which time common
negotiations would commence for all contracts. The
representatives of the local unions rejected this proposal
and refused to look at the written proposal prepared by
Respondent asking for relief.6
The Respondents written proposal prepared for the
4 At the hearing it appeared that counsel for the General Counsel was
relying on this episode to demonstrate that Respondent several months later
bargained in bad faith over its decision to close the Los Angeles studios.
The contention, however, was not made in the General Counsel's
postheanng, brief. However, I have considered the matter and am of the
opinion that by itself or in the context of the entire case this statement does
not impugn the good faith of Respondent.
5 The collective-bargaining agreements covering the engineers in
February 10 meeting, but not considered by the local
unions, was very close in substance to the so-called
Nashville-Chicago side letters negotiated by the Respon-
dent and the local unions at those locations in about
March 1972 in connection with the negotiation of new
collective-bargaining agreements to replace the expired
agreements at those locations. In brief, these side letters
amend the basic jurisdictional clauses of the collective-
bargaining agreements to allow nonbargaining unit record-
ing engineers, the guest engineers, to work in Respondent's
studios and provide that a CBS artist can record in
Respondent's studios and use a guest engineer. Also
liberalized was the use of guest engineers in the situation
where a CBS artist records at an outside location. In return
the Respondent agreed to continue on its staff at these
locations for the term of the agreement any engineer with 1
year of service.
On June 27, 1972, the Union's business manager, John
Draghi, met in Los Angeles with James Sirmons, CBS's
vice president of industrial relations. The meeting was
arranged by CBS's west coast director of labor relations,
Orison Marden. Sirmons gave Draghi copies, and a written
summary, of the Chicago-Nashville side letters. Sirmons
stated that Respondent wanted to begin, as soon as
possible, the negotiations for the new collective-bargaining
agreement covering the Los Angeles and San Francisco
studios, the existing one was scheduled to expire on
September 30, 1972. Sirmons pointed out that the negotia-
tors for both parties participated in the national contract
negotiations covering CBS's broadcast technicians which
was scheduled to begin in September 1972, the same time
the contract covering the Los Angeles recording engineers
was scheduled to expire. In this connection, Sirmons
cautioned Draghi that it was a "foolhardy" thought to
believe that the negotiations over the technicians contract
gave the Union leverage in its negotiations for a new Los
Angeles recording engineer agreement. Sirmons stated that
the negotiations involving the new contracts entered into at
Nashville and Chicago clearly demonstrated that Respon-
dent was "absolutely committed" to solving its problems in
the recording studios, and was prepared to do this even if it
caused difficulty in the negotiations over the new techni=
cians agreement.
Sirmons, during this meeting, pointed out to Draghi
some areas in the existing Los Angeles contract causing the
Company serious economic difficulty. These were, Sirmons
stated, (1) the meal period provision which provided for a
$10-an-hour bonus for each hour that an engineer worked
after the fifth hour of his shift if he did not receive an hour
meal period between the third and fifth hour of his shift;
(2) the "turn-around" or "continuous shift" provision
which provided that if an engineer worked into his next
regularly scheduled shift without receiving a 12-hour rest
period, he would receive time and one-half for the next
Nashville and Chicago expired on March 31, 1972. The New York City
agreement on March 31 , 1973, and, as previously described , the agreement
covering Los Angeles and San Francisco on September 30, 1972.
6 Draghi, Marden, and Roberts testified about the February 10 meeting.
The description of the meeting is based upon the testimony of Draghi and
Marden. I reject the uncorroborated testimony of Roberts that Draghi or
Korff stated the unions would rather see the studios closed than give in to
the Company's demands
996 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
regular shift, in addition to regular straight time (in other
words two and one-half times regular pay); and (3) the
"guest engineer" provision which prohibited the assign-
ment of "guest engineers" to the Los Angeles studios or to
outside studios at which Respondent's artists were record-
ing. In response to Sirmons' indication that the Respon-
dent intended to ask for relief in these areas in the
upcoming contract negotiations, Draghi offered no word of
encouragement. To the contrary, in response to Sirmons'
request that the Union agree to allow the Respondent to
use guest engineers, Draghi, as he testified, in a "rather
forceful" manner told Sirmons that the Company's
engineers would not agree to such a proposal. The meeting
concluded with Draghi stating he would speak with the
business manager of San Francisco IBEW Local 202,
Edward Byrd, and get back to the Respondent.?
In July, pursuant to the terms of the existing collective-
bargaining agreement covering the Los Angeles studios,
the Union and Respondent gave written notice of their
intent to open this agreement for negotiations. Subsequent-
ly, consistent with past practice, the parties agreed that the
negotiations would be delayed until the conclusion of the
negotiations over the broadcast technicians contract which
began on or about September 1 in Washington, D.C.
Draghi, following his meeting with Sirmons on June 27,
1972, did not, as he promised, get back to Sirmons, so on
August 18 Marden, who worked under Sirmons' supervi-
sion, told Draghi Respondent was anxious to begin
contract negotiations for the Los Angeles studios but had
not heard from either Draghi or Byrd concerning the views
expressed to Draghi by Sirmons. Marden further stated
that the situation in the Los Angeles studios was getting
worse and that more recording artists were insisting on
recording in outside studios or in other locations using
their own engineers. Draghi replied that he remained
pessimistic about the willingness of the members of the
Union to allow guest engineers to perform what was now
bargaining unit work and voiced the opinion that the Los
Angeles studios operated by Respondent ought to close
before the Union gave up its hard fought jurisdiction. The
meeting concluded with Draghi stating that, in any event,
it was not possible to commence negotiations for a new
agreement because the technicians negotiations would
begin shortly.8 Marden notified Sirmons about this
meeting with Draghi.
B. The Decision to Close the Los Angeles Studios
and the Alleged Refusal to Bargain Over This
Decision
CBS accounting department which, in substance, was a
financial analysis of the Respondent's operation of its Los
Angeles studios. The analysis concluded that, by closing
the studios, the Respondent would annually save approxi-
mately $370,200. At this time, Respondent's management
discussed the question of closing the studios, and on
September 8 reached a decision to close them for the
reasons: (1) More and more of the recording artists were
refusing to record in the studios; (2) the Company's costs,
with the change in the state of the industry, had been
steadily increasing until the Los Angeles studios were now
losing money and the indication was that these losses
would continue; (3) the responses of Draghi to the requests
for relief from certain onerous contractual provisions
indicated to the Company it could not expect any help
from the Union. Accordingly, on September 8, 1972,
Sirmons in Washington, D.C., representing CBS in the
negotiations involving the broadcast and TV technicians,
was notified by Walter Dean, a vice president for
Respondent, that a decision had been made to discontinue
the Respondent's Los Angeles recording operations. It is
undisputed, and I find, that Respondent then had no
intention of bargaining over this decision with the Union.
The Union, in the evening on September 8, 1972, was
notified that the Respondent had decided to close the Los
Angeles studios. At this time Draghi, who was representing
the Union in Washington, D.C., at the technician negotia-
tions, received a phone call from Sirmons to meet at his
hotel room. Present were Sirmons, Marden, and Sanford
Fisher, a lawyer employed by CBS. Sirmons informed
Draghi that effective September 30, 1972, Respondent
would shut down its Los Angeles recording studios.
Draghi's initial response was to ask if this was a bargaining
tactic to gain concessions from the Umon in the negotia-
tions for a new agreement. Sirmons assured Draghi that it
was not a bargaining tactic, that it was strictly an economic
matter and there was nothing the Union could do or say
that could get the Company to change its mind. Draghi
asked if there was any hope of negotiation and, in
response, either Sirmons or another company representa-
tive stated that it would be a waste of time because the
decision to close was irrevocable. Also, during the course
of the meeting, Sirmons informed Draghi that, even though
Respondent had decided to close the recording studios, it
did not mean that Respondent intended to go out of the
record business in the Los Angeles area .9 Sinuous agreed
to confirm the decision to close in writing, and that evening
a letter addressed to Draghi from Sirmons was delivered to
Draghi. It reads as follows:
During the week of September 4, 1972, Respondent's
management received a copy of a memorandum from the
7 The description of what occurred at the meeting of June 27, 1972, is
based upon the credible testimony of Sirmons and Marden . Draghi's
memory of what took place was poor, and he did not in any manner
contradict their testimony.
8 The description of the August 18 meeting is based on the credible
testimony of Marden. Draghi's memory of this meeting was poor, and he
did not contradict the testimony of Marden in any material respect
9 The description of the meeting on September 8, unless otherwise noted,
is based on the testimony of Draghi, Marden, and Sirmons which generally
is not inconsistent. One point in conflict, however, is whether Sirmons
indicated that Respondent would continue in the record business in Los
This is to inform you of the Company's decision to
cease all recording operations effective September 30,
Angeles. Marden and Sirmons credibly testified that Sirmons made such a
statement to Draglu. Draghi on this point did not impress me in manner
and demeanor as a trustworthy witness. I reject his denial as well as his
testimony that it came as a complete surprise to him when he learned that
Respondent was still in the record business in Los Angeles and that no one
from the Company at subsequent meetings indicated to hum that this was
the Company's plan. Draghi was an unimpressive witness on this point, and
when representatives of Respondent testified that at subsequent meetings
they indicated to Draghi that Respondent intended to remain in the record
business in Los Angeles, I have credited their testimony, if they have
impressed me as credible and reliable witnesses.
COLUMBIA RECORDS , DIVISION CBS 997
1972 at the CBS Records facilities located at 6121
Sunset Boulevard, Los Angeles, California. The work
effected by this decision includes but is not necessarily
limited to the work covered under Section 1.04 of the
current collective bargaining agreement between CBS
Records and Local Union 45, IBEW.
This decision is based solely upon economic factors
and should not be considered related in any way to any
discussions with you or other representatives of your
Local Union concerning the current Agreement or the
negotiation of a new Agreement between CBS Records
and Local 45.
In view of the Company's commitment in this regard,
we hereby offer to meet with you or any other duly
authorized representative of your Union at a mutually
convenient time and place in order to discuss in good
faith the effects of the decision upon your membership.
On Monday, September 11, Respondent's Vice Presi-
dents Calvin Roberts and Al Earl, West Coast Manager of
"A & R" Gary Blohm, and the Union's Business Manager
John Draghi held a meeting with the recording engineers at
the studios in Los Angeles. The engineers were notified by
the management officials of the Company's decision to
close the studios effective September 30 and Draghi read
them Sirmons' letter. The management people then left
Draghi and the engineers by themselves, at which time
there was a short question and answer session. One of the
questions was addressed to the subject of where the
recording artists under contract with Respondent would
record after the close of Respondent's Los Angeles studios.
In this connection, the Union's night steward, Cross,
credibly testified that Draghi told the engineers, "if
Columbia Records did work at outside studios after the
studios closed and we were contacted by any of the artists
or producers to work for them, that we should politely
refuse to do so and notify the Union."
Following his short meeting with the recording engi-
neers, Draghi, on September 11, accompanied by Union
Executive Board Member Ron Wright, met briefly with
Roberts, Earl, and Blohm. Draghi asked whether there was
anything the Union could do by way of negotiation to keep
the Respondent from closing the studios. Roberts replied
that the Company's decision was irrevocable. Draghi asked
why, the operation of the studios had suddenly become
unprofitable and Roberts informed him that the profitabil-
ity of the studios had been declining steadily for the past 3
years, that during the first 8 months of 1972, Respondent
had lost $70,000 by operating the studios, and that
everything indicated that these losses would get worse.
10 The description of the meeting of September I1 is based on the
testimony of Draglu, Roberts, and Wright. Their testimony is not generally
in conflict except on one point: What did Roberts say when Draghi asked if
Respondent was moving its business operation from Los Angeles to San
Francisco. Of the three witnesses, Roberts impressed me as the more
credible on this point. Draghi initially had no recollection that this meeting
even took place and, as I have previously indicated, on the question of
whether he was ever told by officials of Respondent that it intended to
continue 'in the record business in Los Angeles, he was a most unconvincing
witness. In this, connection, I also note that there is no evidence that the
Respondent was hiding the fact that it intended to continue operating in
Los Angeles but, to the contrary, it was public knowledge. The daily trade
Draghi then asked if Respondent intended to move its
operation from Los Angeles to San Francisco. Roberts
replied that the Respondent would remain in Los Angeles
in the record business, and in response to Draghi's inquiry
as to how they would operate replied that Respondent's
recording artists would be on their own and would make
their own arrangements for recording. The meeting ended
with Draghi asking if it was possible for the Respondent to
postpone the closing of the studios because he, Draghi, had
to leave for Washington immediately for the resumption of
the technician negotiations, and wanted to discuss the
closing with the engineers. Roberts stated the Respondent
would consider his request and advise him of its decision.'°
On September 11, Draghi, in response to Sirmons' letter
of September 8 announcing the closing of the studios, sent
Sirmons a letter stating, in substance, that with reference to
the Company's decision to close its Los Angeles studios,
that union representatives would meet with the Respon-
dent's officials when Draghi returned to Los Angeles from
the technician negotiations then being conducted in
Washington, D.C., and concluded with a request for a
"reasonable extension of time in that the Company delay
its closing of operations . . . so that we can better prepare
for this meeting. . ." In response, 1 week later, Sirmons by
letter dated September 18 informed Draghi that the
Company's decision to close was now' a matter for
negotiation. In its entirety the letter reads:
As requested by you in your letter of September 11,
1972, the Company has decided to suspend the
implementation of its decision to cease all recording
operations at the CBS Records facilities in Los Angeles,
California and to offer to you the opportunity to
bargain collectively concerning all aspects of this
decision. Please be assured that we are prepared to
meet and confer with you in good faith concerning the
decision to cease recording operations in Los Angeles
and that our decision in this regard is subject to full
consideration and review during our discussions.
In view of the seriousness of the, issues involved, we
request that these discussions take place at the earliest
possible mutually convenient time and place.
What caused Respondent to change its mind. Sirmons,
as corroborated by Maiden and Roberts, credibly testified
that Respondent changed its bargaining position and
decided to give the Union an opportunity to bargain over
the decision to close for the following reasons: (1) Draghi
for the first time indicated that the Union might be
amenable to granting certain relief to Respondent. Draghi
on September 8 had asked if the Company desired to enter
newspaper, the "Hollywood Variety," in articles regarding the closing of the
Respondent's studios on its front page on September 12 announced "that
[Respondent] most likely would use independent studio facilities for future
recording done here," and on September 13 announced that while closing its
recording operations in Los Angeles that Respondent would continue its
other activities in Los Angeles , such as sales, marketing and publicity The
Union subscribes to this paper and it is undisputed that the Union's day
steward who also subscribes to this paper read both articles and notified the
Union about the September 12 article. Draghi's testimony, in these
circumstances, that he was surprised when he found out that Respondent
was still in business in Los Angeles does not ring true.
998 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
into negotiations, and on September 11, when requesting of
Roberts that the date for closing be postponed, asked if
there was anything he could do by way of "a shift in
position, posture or what," to keep the studios open: (2)
Respondent's labor relations department felt that the
manner in which Respondent had handled the situation
was not conducive to a good bargaining relationship with
the IBEW and the Union, that such a relationship was
important in view of the numerous other contracts between
IBEW local unions and Respondent as well as CBS, and
because Respondent's labor relations people would be
dealing with Draghi for a long time and it was important
that there was a feeling of mutual trust between Draghi
and Respondent. For these reasons, and based upon the
recommendations of Sirmons, its vice president of industri-
al relations, the Respondent, upon receipt of Draghi's letter
of September I1 asking that the closing be postponed,
reversed its'position and, in effect, postponed the closing of
the Los Angeles studios and gave the Union an opportuni-
ty to bargain over this matter. It is undisputed, and I find,
that at this time the Respondent had taken no steps toward
the implementation of its decision or engaged in any action
which would have limited its ability to bargain in good
faith with the Union over the decision to close the studios.
On September 16 during a break in the technician
negotiations in Washington, D.C., Sirmons, accompanied
by Marden and Fisher, informed Draghi that the Respon-
dent had considered his request for a delay in the closing of
the studios and after reviewing the overall situation had
decided to suspend the implementation of the decision and
to give the Union the opportunity to bargain about the
decision itself in addition to the effects. Sirmons stressed
the importance of conducting such negotiations as soon as
possible, explaining to Draghi that he was under pressure
from management to meet for the reason that the
Company was losing money each day it operated the
studios, and was not anxious to keep the studios open
unless the negotiators could find a way to resolve the
problems. Draghi stated that it was not possible for him to
engage in such negotiations at that time since he was
engaged in the technician negotiations and that the
recording engineer negotiations would have to take place
in Los Angeles, where the men were. Sirmons suggested
that Draghi bring his keymen to Washington, but Draghi
stated that all of the employees had to be available for the
negotiations. Sirmons at this point expressed the thought
that perhaps Draghi and Sirmons could discuss the matter
so that Sirmons could determine what the Union had in
mind in the way of relief for the Respondent. Draghi asked
for a letter from Sirmons confirming that the Respondent
had agreed to suspend the decision to close the studios and
to bargain over the decision."
Sirmons on September 18 prepared such a letter,
described in its entirety above, and hand delivered it to
Draghi on September 19. On September 18, the Respon-
11 The September 16 conversation between Draghi and Sirmons is based
on the credible testimony of Sirmons as corroborated by Marden. They
testified about this conversation in a manner which was straightforward and
convincing. Draghi denied that this conversation ever occurred but was not
a convincing witness.
12 The Respondent by engaging in this conduct did nothing more than
keep its engineers abreast of what had already occurred. The General
dent in writing notified each of the recording engineers
employed in Los Angeles that it had agreed to meet with
the Union and to bargain about the decision to close,
including the date of closing, the Respondent's studios.12
On September 19, when Sirmons handed Draghi the
letter, he scheduled a meeting with Draghi for that evening
at Sirmons' hotel regarding the Company's decision to
close the studios. Attending this meeting for the Company
were Sirmons, Earl, Roberts, Marden, and Fisher. Sirmons
told Draghi that the Company was prepared to bargain
over all aspects of the closing. Then Earl and Roberts
presented the reasons which had caused the Company to
reach its decision to close the Los Angeles studios. Earl
presented the economic data, indicating that the studios
were operating at a loss. Draghi requested that this
information be reduced to writing. Roberts then discussed
the changing nature of the recording industry-the desire
of rock artists to use their own engineers and to record in
independent studios or elsewhere-and its impact upon the
Los Angeles studios. In response to Draghi's question, one
of the Respondent's officials stated that if the negotiations
did not succeed and the Respondent closed its studios that
its artists would continue to record in Los Angeles at
independent studios. Draghi warned the Union would
picket any independent studio that did such work. Sirmons
replied that this was Draghi's business , but that they were
meeting to reach an agreement to allow the operation to
continue. If they failed, the Union should do what it
believed it had to do, but that Respondent's artists would
continue to record for the Respondent in Los Angeles.13
The next morning, September 20, Sirmons joined Draghi
for breakfast at the hotel coffee shop for the purpose of
notifying and discussing with him the specific areas in
which the Respondent needed relief and to determine
whether Draghi believed the Union's membership would
be sympathetic. Sirmons informed Draghi that the type of
agreement along the lines of the one embodied in the side
letters to the Nashville and Chicago contract, the Nash-
ville-Chicago side letters, would be acceptable to resolve
the guest engineer problem, but that some changes in the
"lock-in" concept would be necessary since the demand to
use outside facilities by artists was greater in Los Angeles.
He also stated that the Company wanted relief from the
meal period penalty and the continuous shift provisions
contained in the existing agreement. Draghi expressed the
feeling that "he thought that some things could be done
but he just didn't think that they could get that far," and
further stated it was a "hopeless bargaining situation"
because he was all alone and needed to return to Los
Angeles and have his "people" with him. Sirmons, as a
labor relations negotiator, expressed sympathy for Draghi's
situation but explained that the pressure was on him to act
expeditiously and secure relief for the Company's financial
problems, that the Company was not sure whether there
was a realistic hope of working out its problems with the
Counsel in his posthearing brief does not contend, nor do I find, that this
conduct was calculated to undermine the Union or is evidence of bad faith.
13 The description of this meeting is based on a composite of the credible
testimony of Sirmons, Marden, and Roberts and Fisher's affidavit,
submitted to the Board, which was offered into evidence without objection
by the General Counsel.
COLUMBIA RECORDS, DIVISION CBS 999
Union, and if there was no such hope they might as well
close the studios.14 The meeting concluded with Draghi
stating he would try to be more specific later on and
indicating he might be able to give Sirmons some
information in a few days.15
The following day, September 21, during a lull in the
technician negotiations, Draghi informed Sirmons that he
had been thinking about their conversation the day before
at breakfast in the coffee shop and, as Sirmons credibly
testified, Draghi stated he could not "go as far as
[Respondent] wanted him to go," but he was not closing
the door, "he just couldn't go that far." At this time Draghi
handed Sirmons a letter dated September 21 addressed to
Sirmons from Draghi which read:16
As you know, a meeting was held with you and others
on the evening of September 19, 1972 to bargain
collectively concerning all aspects of the Company's
decision to cease all recording operations at the CBS
Records facilities in Los Angeles, California... .
The Company verbally presented some loss figures
during the period of April through August 1972 as
justification for the shut down of the Los Angeles
operation. I remarked that these figures were not very
persuasive for so drastic a move and I requested that
the Company provide these figures and the Company's
position in writing. This the Company said they would
do.
In reviewing this situation, I find it imperative that I be
permitted to examine the Company's books so that I
am better prepared to respond to the Company's
position in this matter. Accordingly, I am asking that
this request be honored at the earliest possible time.
On September 25, the Respondent complied with
Draghi's request that it transmit to the Union a written
statement containing the economic figures which justified
its decision to close the studios and a statement of position.
Sirmons gave Draghi a letter that day signed by Earl and
Roberts which sets out the financial information which led
to the Company's decision to close the studios and explains
the nature of the change in the industry and its effect on
the operation of the Los Angeles studios.
Then, on about September 26 or shortly thereafter, the
parties scheduled a meeting for October 3 in Los Angeles
to negotiate over the Company's decision to close the Los
Angeles recording studios.
The meeting on October 3 began about 10 a.m. and
ended at about 6 p.m. The Respondent was represented by
Marden, Fisher, Earl, Roberts, and Blohm, with Marden
acting as spokesman. The Union was represented by
14 Vice President Dean, as Sirmons credibly testified, had made it clear
to Sirmons that since the studios were losing money each day and it was
important that negotiations move along, the Company could not afford any
foot dragging.
fly The description of this meeting is based upon the credible testimony
of Sinuous. Draghi initially testified that it was "possible" he had a
breakfast meeting with Sirmons on September 20 but had no specific
recollection of this meeting, explaining that it was not unusual for officials
of Respondent and Draghi to "horse around" in the coffee shop during
breakfast. Draghi admitted, however, it was also not unusual for Draghi to
discuss business in the coffee shop with management officials and that at
Draghi, Chief Steward Macy, Assistant Steward Cross, and
Executive Board Member Nicholson, with Draghi acting as
spokesman. Draghi, Macy, Cross, and Nicholson testified
for the General Counsel. The General Counsel introduced
into evidence, without objection, the affidavit of Fisher
submitted to the Board which, among other things, covered
the latter part of the meeting. Marden and Roberts testified
for the Respondent. The testimony of these witnesses for
most of the meeting is not inconsistent. Where it is, unless
otherwise specified, I have based my findings upon the
testimony of Marden and Roberts and the affidavit of
Fisher. Marden and Roberts impressed me as making an
honest effort to accurately recall this meeting. In addition,
their accounts of the meeting were in most important
instances internally consistent and largely in agreement
with one another. In instances of conflict their testimony
impressed me as more reliable and trustworthy than the
testimony of the other witnesses.
The union negotiators at the start of the meeting
caucussed for about 1 hour. Draghi then stated that he
accepted the data contained in Sirmons' letter of Septem-
ber 25 but reserved the right at a later date to examine the
Company's books. He asked if the Company's decision to
close was firm. Marden said "our minds are open." Draghi
then asked what type of relief the Company needed to
operate. Marden outlined three areas covered by the
existing contract in which Respondent sought relief: The
meal penalty; Use of guest engineers; And, the turn-
around or continuous shift provision. However, as he
testified, Marden pointed out to the union negotiators that
even if the Company secured help in these areas that "there
was some aspects of the whole recording business, you
know, that were changing, that neither side could really do
much about." 17 After Draghi asked if the Company
needed relief in any other areas, Marden, after caucussing
with his group, stated that they wanted to eliminate
starting-time restrictions and have the right to begin an
engineers shift at any time.
Each of these complaints was discussed. On the
Company's freedom to schedule the engineers at any time,
rather than from 8 to 10 a.m. on the first shift and 4 to 6
p.m. on the second shift as required by the contract,
Marden explained that the contemporary recording artists
generally kept late hours and the net result was that the
Respondent found itself with little work for its engineers to
perform in the morning hours and had to pay overtime at
the back end of the schedule. In response to the
Respondent's request to eliminate or modify the continu-
ous shift requirement-this provides if an engineer works
into his next regularly scheduled shift without gettinga 12-
hour rest period he received 2-1/2 times his regular
pay-Draghi proposed that the parties agree to something
some tune at breakfast with Sirmons he discussed the Los Angeles studios
and that the "gist" of the discussion was Sirmons wanted to know if the
Union would change its attitude toward the Company's guest engineer
proposal and Draghi answered he was "very pessimistic,"
is The description of this conversation is based upon Sirmons' credible
testimony. Draghi testified he did not recall this conversation Sirmons
impressed me as the more reliable and trustworthy of the two on this matter
17 Or, as put by Fisher, in his notes of this meeting, Marden, after
specifying the areas in the contract that must be changed, informed the
Union's negotiators "even if these were solved all the way, this only solves
part of the problems."
1000 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
along the lines of CBS's proposal made at the technician
negotiations which provided for only time and one-half
consecutive overtime. Marden indicated that the Respon-
dent agreed with this type of an approach. Regarding the
meal period penalty provision which provided for a $10-
an-hour bonus for each hour that an engineer worked after
the fifth hour of his shift, if he did not receive an hour meal
period between the third and fifth hours of his shift.
Marden indicated Respondent would be amicable to
agreeing to the practice used at the Company's New York
City studios which provided for 1 hour at time and one-
half if a meal period was missed during an 8-hour shift.
Regarding the guest engineer provision which prohibited
the employment of nonunit employees and those not
members of the Union at the Los Angeles studios, or
outside studios where Respondent's artists were recording,
Marden told the union negotiators that because of the
economic problems unique to Los Angeles that the
Respondent could not resolve this problem in the same
manner as the problem had been resolved in Nashville and
Chicago by entering into the so-called Nashville-Chicago
side letters. Marden indicated that the Respondent did not
feel it could operate with standby engineers in Los Angeles
and that the Respondent wanted to go beyond the
Nashville-Chicago formula in two respects: first, there was
to be no engineer standby at any studio unless assigned by
the Company; second, the Company did not want a "lock-
in" of a specified number of employees. Marden and
Roberts each explained the Respondent's need for this
flexibility in Los Angeles. Draghi observed that if the
Union agreed to the unlimited employment of guest
engineers asked for by Respondent without a guarantee of
employment for the Company's engineers (referred to as a
"lock-in"), that the Respondent could end up with only
guest engineers and no staff engineers. Marden agreed this
was possible in theory but highly improbable in reality.
Draghi stated that the Company was asking a lot from the
Union and asked that it consider a lock-in. Marden
explained why the Company in Los Angeles felt that it
could not live with a lock-in. On this note the parties broke
for lunch.
After lunch Marden told the Union that the Company
would consider locking in a number of engineers if it had
the right to lay off those not locked in selectively, not by
seniority. Draghi responded that the Union could not
consider this proposal until it knew how many employees
would be locked in. Respondent's negotiators considered
the matter and Marden, after a company caucus, stated the
Respondent agreed to either (1) no lock-in and layoff by
seniority or (2) a lock-m of 12 men but with the right to
selective layoff. The union negotiators caucussed and then,
as Draghi put it, stated that its "minimal position" was it
wanted to lock in 16 engineers for a period of 1 year with
no selectivity in layoff. On the continuous shift, Draghi
indicated that they were probably together on using the
formula agreed to during the technician negotiations. On
the meal penalty, he proposed a $15 penalty, plus 1 hour at
18 I realize that Union Steward Cross testified on cross-examination that
at about this time Draghi used words which in the mind of Cross "in effect"
meant Draghi was presenting the Union's "final proposal." No one else
during the hearing testified that when Draghi presented the proposal to the
Respondent's group he called it his "final proposal " I find that he did not
overtime . On the issue of the use of guest engineers, he was
not willing to go beyond the Chicago-Nashville formula.
At this point, about 4:50 p.m., Draghi called the union
negotiators into a caucus. The reason for this caucus,
Draghi testified, was "because we wanted to come up with
a final position, a final proposal." Draghi later testified he
misspoke when he used the work "final." When asked to
explain his use of "final," he testified "I would have to
think about that, because it really was not final. We had
not made a proposal. It was our first proposal. I probably
intended to say `first' and `final' came out instead." In
manner and demeanor Draghi, when he gave this explana-
tion, did not impress me. In addition, as described below,
Draghi in presenting to Respondent's negotiators the
proposal formulated during this caucus called it the
Union's "bottom line," hardly a synonum for "first" but
certainly one for "final." Also, I note that immediately
prior to the October 3 meeting the Union's Stewards Cross
and Macy had gone to the engineers and asked them "what
is the minimum that they would accept to work at the Los
Angeles studios," and during the course of the October 3
meeting told Draghi what the "minimum" was that the
men demanded. In short, based upon Draghi's admission
at the hearing, the words he used to describe the Union's
proposal when he presented it to the Respondent, and the
surrounding circumstances, I find that the Union's
proposal made after the last union caucus was intended to
be a final proposal and, as described later, was couched in
terms which reasonably led the Respondent's negotiators
to view it as a final proposal.
The caucus ended, at which time Draghi asked Respon-
dent' s negotiators if they wanted to hear the Union's
"bottom line." i8 Marden said yes. The Union's position, as
expressed by Draghi, was as follows: (1) Starting time from
7 to 1 I a.m. instead of 8 to 10 a.m., and 3 to 7 p.m. instead
of 4 to 6 p.m., with 20 percent above the base rate pay for
an engineer who goes to work outside those times; (2) a
substantial increase in wages beyond the wage-price
guidelines of 5-1/2 percent (with the Company writing a
letter to the wage price board to justify the increase); a
lock-in of 16 people by seniority, with 15 weeks' severance
pay for those laid off outside the 16, and 30 weeks'
severance pay for those within the 16 who voluntarily
resigned in the following year; (4) a $15 meal penalty; (5) a
guest engineer provision as in the Chicago-Nashville side
letters; (6) the gains granted the IBEW in its negotiations
involving the technicians; (7) a continuous shift provision
as agreed upon; (8) the exploration of the Company's
investment fund; and (9) a 1-year contract.
Marden read back Draghi's proposal to make sure there
was no misunderstanding on the part of the Company's
negotiators, at which point Draghi reiterated that the
proposal was the Union's "bottom line" and stated, in
substance, that if the Company did not accept it the Union
was prepared to face the consequences of a shutdown and
would deal with that situation.
The Company's negotiators then caucussed for about an
use the phrase "final proposal," but find that the phrase "bottom line" was
intended to mean and calculated to cause the negotiators, including Cross,
to believe that the Union was presenting a "final proposal." Indeed, Draghi
testified "that reference to the bottom line, that was on the company's
proposals as to how far [the Union] would go..
COLUMBIA RECORDS, DIVISION CBS 1001
hour. When they returned to the bargaining table, Marden
stated that the parties were apart on the meal penalty, the
lock-in, the guest engineer issue and the starting time
restrictions. He voiced his belief that the parties had
reached an impasse and said they would have to relay the
"negative results" of the negotiations to the Company's
president and vice president in New York City and would
get back to the Union.19 Draghi, an experienced labor
negotiator, did not dispute Marden's expressed view of an
impasse but replied that the Respondent was not bargain-
ing in good faith for the reason that it had not considered
the proposals advanced by the Union; i.e., the proposed
wage increase, investment fund, etc. Marden replied that
the negotiators "don't get to those proposals until we have
solved the bargaining about keeping the place open." At
this point the meeting ended with Draghi stating that the
Union "reserved the right to modify, delete or retract .. .
any portion or portions of ourproposal."
The following day, October 4, Marden notified Draghi
that since they had not been able to get together during
negotiations that the Los Angeles studios were to be shut
down effective Friday, October 7, with the employees
terminating their employment that day, October 4, and
that operations would cease as of October 4. The
employees were notified of the decision to close on the
same day. Thereafter, the Union and Respondent bar-
gained and reached an agreement concerning the effects on
the recording engineers of the decision to close the studios.
Respondent on October 4 ceased recording at its Los
Angeles studios but has remained in the recording business
in the Los Angeles area. The artists under contract with
Respondent use outside studios in which to record. The
engineers who work at these recording sessions are hired
not by Respondent but by the producer or at times by the
artist or the studio. Respondent in all cases, under an
arrangement analagous to a cost-plus arrangement, pays
the engineers wages. However, there is insufficient eviden-
ce to establish that the Respondent exercises the degree of
control over the engineers to establish an employment
relationship between Respondent and the engineers.
Rather, the evidence shows that Respondent exercises only
the degree' of control necessary to police the cost aspects of
their agreements with the artists and to see that the artists
meet certain artistic standards in recording. In any event,
the General Counsel does not contend, if he did I would
not find, that' the recording engineers employed at the
outside studios since October 4 are employees of Respon-
dent. Cf. Hychem Constructors, Inc., 169 NLRB 274.
C. Discussion and Ultimate Findings
Section 8(d) of the Act defines the duty to bargain as the
mutual obligation "to meet at reasonable times and confer
in good faith with respect to wages, hours, and other terms
and conditions of employment, or the negotiation of an
agreement." The statutory standard thus adopted contem-
plates a willingness to enter into discussion with an open
mind and a sincere intention to reach an agreement
consistent with the respective rights of the parties. N.L.R.B.
v. Texas Coca -Cola Bottling Co., 365 F.2d 321, 322 (C.A. 5,
1966). Section 8 (d) also expressly provides that the
collective-bargaining - obligation "does not compel either
party to agree to a proposal or require the making of a
concession ." It is thus clear that while a party may not
come to the bargaining table with a closed mind, neither is
he bound to yield any position fairly maintained. See
N.L.R.B. v. American National Insurance Co„ 343 U.S. 395,
404 (1952).
Ultimately the question of whether a party has conduct-
ed his negotiations in good faith involves a finding of
motive or state of mind which must be inferred from the
circumstantial evidence viewed as an integrated whole.
N.L.R.B. v. National Shoes, Inc., 208 F.2d 688 , 691-692
(C.A. 2, 1953). It is settled that Section 8(d) lays down no
rigid yardstick for the measurement of good faith, and
understandably so, for "good faith" is an elastic concept
that can have "meaning only in its application to the
particular facts of a particular case." N.L.R. B. v. American
National Insurance Co., supra, 343 U.S. 410.
In the area of bargaining which this case involves, the
law is clear that an employer who desires to take unilateral
action in the nature of either terminating its business or
contracting out a portion of its business, if it involves a
mandatory subject of bargaining, must bargain in good
faith with the Union over such a decision . The Board in a
case involving an employer 's obligation to bargain about a
decision to close its business defined the obligation to
bargain as follows:
... an employer 's obligation to bargain does not
include the obligation to agree, but solely to engage in
full and frank discussion with the collective -bargaining
representative in which a bona fide effort will be made
to explore possible alternatives , if any, that may
achieve a mutually satisfactory accomodation of the
interests of both the employer and the employees.
Ozark Trailers, 161 NLRB 561, 568 ( 1966).
The United States Supreme Court in a case holding that an
employer is obliged to bargain in good faith over a decision
to subcontract out bargaining unit' maintenance work,
defined the employer's statutory obligation in the following
terms:
... While, "the Act does not encourage a party to
engage in fruitless marathon discussions at the expense
of frank statement and support of his position," [case
cited], it at least demands that the issue be submitted to
the mediatory influence of collective negotiations. As
the Court of Appeals pointed out, "[i]t is not necessary
that it be likely or probable that the union will yield or
supply a feasible solution but rather that the union be
afforded an opportunity to meet management's legitimate
complaints that its maintenance was unduly costly"
[Emphasis supplied]. Fibreboard Paper Products Corp.
v. N.L.R.B., et al., 379 U.S. 203, 214 (1964).
Applying these principles to the facts of this case, I am of
the opinion that the totality of Respondent's conduct
19 I find that Draghi and the Union's negotiators clearly understood that
the company's negotiators intended to recommend that the Union's final
proposal be rejected.
1002 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
indicates it was bargaining in good faith. The evidence
which demonstrates this to my satisfaction follows.
The dispute arises in the confines of a long established
and apparently productive collective-bargaining relation-
ship. For a number of years the parties have negotiated
agreements covering the Company's Los Angeles aircondi-
tioning and maintenance electricians as well as the
recording engineers. In addition, the Respondent for years
has been a party to a national bargaining agreement with
the IBEW, covering the radio and television technicians
employed in Los Angeles, which is administered by the
Union. There is no evidence that this bargaining relation-
ship has been anything other than stable and productive 20
for both sides, nor is there any evidence that the
Respondent in the instant case was attempting to under-
mine the Union, or in closing the studios was motivated by
union animus. To the contrary, it is undisputed that
Respondent's motive in closing the Los Angeles recording
studios was economic and not unlawfully motivated. The
studios were losing money. During the first 8 months of the
year they had cost Respondent $70,000.
The Union was given ample notice that the Respondent
was seriously considering closing the recording studios. In
this regard, the Respondent prior to the meeting of
October 3 had informed the Union of the most important
areas in which it needed relief from onerous contract
provisions, explained to the Union the reasons it needed
this relief and, if such relief was not granted, advised the
Union it planned to close the studios and continue doing
business in Los Angeles with its recording artists using
outside studios. Plainly, the Union's negotiators when they
met with the Respondent on October 3 were in the position
to represent the recording engineers effectively and
intelligently.
At the meeting of October 3 the Respondent's negotia-
tors thoroughly explained its reasons for demanding the
relief requested and carefully explored and considered the
Union's proposals made in response to the requested relief.
The Union at no time challenged the reasons advanced by
the Respondent in support of its various positions, nor is
there any claim or evidence that the Respondent's
complaints or positions taken in support of its complaints
were not bona fide or were without substance. Nor did the
Union at this meeting claim it needed more time to
consider the Respondent's complaints or bargaining
positions so as to formulate additional proposals 21 Finally,
not 'only did the Respondent at the meeting of October 3
consider the Union's responses to its complaints, but it
receded from its position of complete opposition to the
Union's proposed lock-in and agreed to a limited lock-in
and reached a tentative agreement with the Union on the
continuous shift problem. In short, one of the areas of
disagreement was narrowed and in another area there was
tentative agreement.
The totality of the evidence set out above convinces me
that the General Counsel failed to prove by a preponder-
ance of the evidence that the Respondent, as alleged in the
complaint, failed or refused to bargain in good faith with
the Union about its decision to close the Los Angeles
recording studios. In reaching this conclusion, I have
considered the following facts: (1) Respondent before it
gave the Union an opportunity to bargain about its
decision had reached` an initial decision to close the
studios; (2) Respondent refused to consider the Union's
proposals, i.e., substantial wage increase, improved benefits
granted to the technicians, consideration of investment
fund and duration of a new contract; (3) Respondent
failed to give the Union an opportunity to bargain about
the date on which its decision would be implemented and
the studios closed; (4) Respondent refused to agree to the
Nashville-Chicago side letters even though in these
locations it had agreed to this as a solution to the guest
engineer problem; (5) Respondent indicated that even if
the Union satisfactorily remedied all of its complaints that
this would resolve only part of the Respondent's problems.
Regarding the Respondent's initial unilateral decision to
close the recording studios, the totality of the circum-
stances described above indicates that the Company's later
offer to bargain was a bona fide one and that the Company
did bargain in good faith. In addition, the Respondent-did
not place obstacles in the way of good faith bargaining by
implementing any part of its initial decision. Moreover, as
already indicated, the Respondent had enjoyed a long and
productive bargaining relationship with the Union, and as
CBS's Vice President of Industrial Relations Sirmons
credibly testified, one of the factors which caused Respon-
dent to place this matter on the bargaining table was
Sirmons' concern about the effect of the Company's
unilateral conduct upon the mutual trust between the
Company's industrial- relations personnel and Draghi, the
Union's business manager whom they would have to
continue to deal with long after the closure of the studios.
Respondent's refusal to accept the Union's remedy for
the guest engineer problem, previously agreed to by
Respondent in Nashville and Chicago, in the circum-
stances of this case, I believe did not constitute evidence of
bad faith. Here, the Respondent's position, explained to
the Union, was based on the reasonable ground - not
challenged by the Union - that the economic situation was
different in Los Angeles than in Chicago or Nashville.
Moreover, as a matter of law the Respondent was not
obligated to acquiesce in any of the Union's demands in
order to demonstrate its good faith. N.L R.B. v. American
National Insurance Co., 343 U.S. 395.
Likewise, the Respondent's refusal to consider the
Union's proposals on the duration of a contract, an
increase in wages and other improved benefits granted in
the technician negotiations and involvement in the compa-
ny investment plan, did not constitute evidence of bad
faith where, as here, the Respondent at all times made it
clear to the Union that the purpose of the negotiations was
not to bargain over the terms of a new contract but solely
to give the Union an opportunity to bargain over the
Company's decision to shut down its studios. Not until too
20 In this connection, I note that at all times the Union offered to 21 In this regard, I note that the Union prior to this meeting had
bargain over the effects on the recording engineers of its decision to close determined the minimum terms acceptable by the recording engineers to
the studios, that bargaining on this subject did take place, and that an continue working for the Company. Although it is not necessary to this
agreement was reached which resulted in substantial benefits to the decision, I believe it is a fair inference that the Union's final proposal was
recording engineers. based upon the information secured from its membership.
COLUMBIA RECORDS, DIVISION CBS 1003
late in the day, the conclusion of the October 3 meeting,
did the Union, in effect, object to the scope of the
negotiations . The Union, I find, at all times understood
and agreed that the sole purpose of the bargaining was to
give it an opportunity to bargain over the Company's
decision to shut its Los Angeles studios. In any event, the
Respondent, in the circumstances of this case, had the right
under the Act to limit the bargaining to those areas it
needed relief to stay in business. For, in a similar situation
in the context of an employer's obligation to bargain over
the decision to contract out bargaining unit maintenance
work the United States Supreme Court has indicated that
all that is required is "the union be afforded an opportuni-
ty to meet management's legitimate complaints that its
maintenance was unduly costly." Fibreboard Paper Prod-
ucts Corp. v. N.L.R. B., et al., 379 U.S. 203 , 214 (1964).
Regarding the Company's failure to bargain about the
effective date of the closing of the studios , I am of the
opinion that where, as here , Respondent was losing money
each day it operated its recording studios, bargained to an
impasse over its decision to close the studios , and then to
cut its losses immediately shuts them down , that the haste
in closing the studios without giving the Union an
opportunity to bargain over the effective date of closure
does not taint all of the Employer's other bargaining
conduct.
Finally, the statement of Respondent's chief negotiator
at the meeting of October 3 that the specific relief sought
by Respondent would not resolve all of its problems is
simply a statement of fact. The whole record establishes
,that the preferences of contemporary artists had resulted in
a steady decrease in the use of Respondent 's Los Angeles
studios. If the trend continued, Respondent would have
virtually little or no need to maintain these studios
regardless of other economic considerations . In these
circumstances , and in the context of the Respondent's total
bargaining conduct, I do not consider this remark as
evidence that Respondent entered into bargaining with an
intent not to reach an agreement or to frustrate bargaining-
I have found, for the reasons set out above , that the
Respondent bargained in good faith with the Union over
its decision to close the Los Angeles recording studios. This
does not end this matter for the law is settled that
Respondent was privileged to implement its decision to
close the studios only after bargaining to an impasse, which
has been defined as that point in negotiations where there
is "no realistic possibility that continuation of discussions
at that time would have been fruitful [emphasis added]."
American Federation of Television and Radio Artists,
AFL-CIO v. N.L.R. B., et al., 395 F.2d 622, 628 (C.A.D.C.
1968) enforcing on this point Taft Broadcasting Co., 163
NLRB 475 (1967). Deciding whether a bargaining impasse
exists is a matter of judgment and many factors are taken
into consideration.
The bargaining history, the good faith of the parties in
negotiations, the length of the negotiations, the impor-
tance of the issue or issues as to which there is
disagreement, the contemporaneous understanding of
the parties as to the state of negotiations are all relevant
factors to be considered in deciding whether an
impasse in bargaining existed . Taft Broadcasting Co.,
163 NLRB 475, 478.
Applying the foregoing standards to the instant case, I
believe that the parties reached an impasse in negotiations.
As previously found , there is no evidence that the
Respondent engaged in bad faith bargaining . The Respon-
dent wanted certain changes in working conditions which
would cut operating costs and allow it greater flexibility to
operate its recording studios. As viewed by the Union, this
meant a serious loss to its members in jobs and money.
Both parties took strong positions . Both parties bargained
in good faith with a sincere desire to reach agreement. But
at the conclusion of the meeting on October 3, progress
was imperceptible on the critical issues . The Union, at this
point, formulated its final proposal, informed Respondent,
in effect, the proposal it was making was its final one, and
if Respondent did not agree to it that the Union was
prepared to face the consequences of the studios closing
and would deal with such a situation . Respondent's
negotiators rejected this proposal and informed the Union
that they would recommend that it be rejected by top
management and further stated that it was the Respon-
dent's belief that the parties were too far apart on a
number of critical issues and that an impasse in negotia-
tions had been reached . The Union's spokesman, an
experienced negotiator , did not dispute the expressed view
that negotiations were at an impasse. Viewed in this,light
and from the vantage point of the parties on October 3, I
am unable to conclude that a continuation of the
bargaining would have culminated in an agreement or have
been fruitful. Nor am I satisfied that this impasse was
broken by the statement of the Union 's spokeman, at the
very end of the meeting, that the Union "reserved the right
to modify, delete, or retract ... any portion or portions of
our proposal ." The Union's spokesman made no'concrete
proposal nor did he even hint as to the areas in which the
Union might be prepared to make concessions. To the
contrary , this ambiguous closing statement can reasonably
be construed as a veiled threat that in future negotiation
meetings the Union would adopt a tougher bargaining
position . In any event, such a general statement, in the
circumstances of this case, including the nature of the past
bargaining and the clearly defined positions of the parties
was not sufficient to break the impasse.
In reaching the conclusion that an impasse existed, I
have considered the fact that the parties had reached a
tentative agreement on one matter (continuous shift) and
that the Union in other areas had proposed modifications
of provisions in the existing contract favorable to Respon-
dent. But, "an impasse is no less an impasse because the
parties were closer to agreement than previously and a
deadlock is still a deadlock whether produced by one or a
number of significant and unresolved differences in
positions." Taft Broadcasting Co., 163 NLRB 475, 478.
Here, this is especially true since the parties were dead-
locked on the crucial issues.
1004 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Finally, the fact that the parties had not discussed the
Union's proposals 22 or the effective date for the closing of
the studios, or that there was only one or two bargaining
sessions , does not, in the circumstances of this case,
mitigate against drawing the conclusion from the rest of
the evidence that the parties were at an impasse. The
Union's proposals and the date the decision to close the
studios would be implemented were unrelated to the
crucial issues which involved Respondent's decision to
close the studios. These crucial issues had produced a
deadlock and from the vantage point of October 3 the
possible agreements on these other issues, in my opinion,
affords no basis "to conclude that a continuation of
bargaining sessions would have culminated in a bargaining
agreement." Taft Broadcasting Co., supra, at 478. Contrari-
wise , the Respondent's position on wages-a substantial
increase above the Government's wage guidelines-would
appear to make any such agreement highly unlikely.
Finally, in considering the length of the negotiations, it
should be kept in mind that this is but one of many factors
to be considered in deciding whether an impasse existed
October 3 and 4. It is my judgment that the totality of the
circumstances , on balance, demonstrates that the parties
had arrived at an impasse at the close of the meeting of
October 3.
In these circumstances, I find that an impasse in
negotiations had occurred when, on October 4, the
Respondent announced the closing of its Los Angeles
recording studios. I further find, in view of my earlier
finding, that Respondent bargained over this matter in
good faith, that the Respondent bargained in good faith to
an impasse over its decision to close the Los Angeles
recording studios and have its artists do all their recording
at outside facilities.23 Accordingly, I shall recommend that
the complaint in this matter be dismissed in its entirety.
22 The duration of a new contract , a substantial wage increase,
exploration of the Company's investment fund, and gains negotiated in the
technician negotiations to be included in any new contract.
23 In view of this finding, it is unnecessary for me to pass on the
Respondent's contention that it was not obligated to bargain with the
Union over this decision.
CONCLUSIONS OF LAW
Upon the basis of the foregoing findings of fact, and the
entire record, I make the following conclusion of law:
1. Columbia Records, Division CBS, the Respondent,
is an employer engaged in commerce within the meaning
of Section 2(6) and (7) of the Act.
2. International Brotherhood of Electrical Workers,
Local No. 45, the Union, is a labor organization within, the
meaning of Section 2(5) of the Act.
3. All recording engineers employed by Respondent at
its Los Angeles studios; excluding all other employees,
office clerical employees, guards and supervisors as
defined in the Act constitute a unit appropriate for the
purposes of collective bargaining within the meaning of
Section 9(b) of the Act.
4. The Union at all times material was the exclusive
bargaining representative of the employees in the aforesaid
unit for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. The Respondent bargained in good faith to an
impasse with the Union over its decision to close its Los
Angeles studios and have its artists do all their recording at
outside facilities.
6. The Respondent has not engaged in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER 24
The complaint is dismissed in its entirety.
24 In the event no exceptions are filed as provided by Sec. 102 46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and order, and all objections thereto shall be
deemed waived for all purposes.