Empire Pacific Industries, Inc.

National Labor Relations Board - Board Decisions

Sep 17, 1981

257 N.L.R.B. 1425 (N.L.R.B. 1981)

EMPIRE PACIFIC INDUSTRIES, INC.
Empire Pacific Industries, Inc. and Millimen's Union
Local No. 1120, United Brotherhood of Carpen-
ters and Joiners of America, AFL-CIO. Case
36-CA-3551
September 17, 1981
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND
ZIMMERMAN
On March 31, 1981, Administrative Law Judge
Earldean V. S. Robbins issued the attached Deci-
sion in this proceeding. Thereafter, Respondent
filed exceptions and a supporting brief, and the
General Counsel filed a brief in support of the Ad-
ministrative Law Judge's Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
At all times material hereto, Respondent was
party to collective-bargaining agreements with two
labor organizations: The Charging Party Union and
an independent labor organization. Other than the
employees represented by these two labor organi-
zations, none of the other employees at Respond-
ent's facility in question or its other facilities were
represented by labor organizations. The collective-
bargaining agreement between Respondent and the
Union expired on October 31, 1979.2 On August 1,
Respondent granted salaried employees a cost-of-
living wage increase. Between September 1 and
October 2 Respondent granted all hourly workers,
except those represented by the Union, at all its
facilities the same cost-of-living wage increase.
The Administrative Law Judge concluded that
implementing a cost-of-living wage increase for all
employees except those represented by the Union
was inherently destructive of employee rights and
thus violated Section 8(a)(3) and (1) of the Act.
Respondent excepts to this conclusion and we find
merit in this exception.
' Employees at Respondent's facility in Hawaii are represented by the
Teamsters Union. Apparently, employees at the Hawaiian facility were
not granted the cost-of-living wage increase involved in the instant case
as the wage scales in Hawaii were different from those in the continental
United States.
2 All dates herein are in 1979 unless otherwise stated.
As stated in Shell Oil Company, Incorporated and
Hawaii Employers' Council,3 and quoted with ap-
proval in The B. F. Goodrich Company:4
Absent an unlawful motive, an employer is
privileged to give wage increases to his unor-
ganized employees, at a time when his other
employees are seeking to bargain collectively
through a statutory representative. Likewise,
an employer is under no obligation under the
Act to make such wage increases applicable to
union members, in the face of collective-bar-
gaining negotiations on their behalf involving
much higher stakes ...
As further set forth in B. F. Goodrich, an employer
is under a duty to bargain during the existence of a
collective-bargaining agreement concerning any
mandatory subject of bargaining which has not
been specifically covered in the contract and which
the union has not clearly and unmistakably
waived.5 Thus, where an employer grants a benefit
to a group of unrepresented employees, if the bene-
fit is a mandatory subject of bargaining which is
not specifically covered by the represented em-
ployees' collective-bargaining agreement and has
not been clearly and unmistakably waived by the
union, the employer is obligated to bargain with
the union concerning the implementation of this
benefit for the represented employees. In such a sit-
uation, the failure to bargain in good faith with the
union over the benefit granted constitutes a viola-
tion of Section 8(a)(5) and (1) of the Act. L. M.
Berry and Company, 254 NLRB 42 (1981), and B.
F. Goodrich, supra. Furthermore, implementing
such a benefit for unrepresented employees while
refusing to bargain with the union over the benefit
is also a violation of Section 8(a)(1).
In the instant case, Respondent admits imple-
menting a wage increase for those employees who
were not represented by the Union. Thus, under
the case law set forth above, Respondent had an
obligation to bargain in good faith with the Union
over implementation of this benefit for the repre-
sented employees. In this regard, the record indi-
cates that Respondent commenced bargaining with
the Union concerning a new contract and one item
bargained about was a cost-of-living wage increase.
Thereafter, the Union voluntarily proposed that ne-
gotiations be suspended until a pending, valid de-
certification petition could be resolved. Further-
more, there was neither an allegation in the com-
plaint nor an attempt to litigate at the hearing that
Respondent refused to bargain with the Union over
3 77 NLRB 1306, 1310 (194R)
'195 NLRH 914 (1972).
Id. at 919
257 NLRB No. 180
1425
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the cost-of-living wage increase. Based on these
facts, Respondent did not unlawfully refuse to bar-
gain with the Union over the implementation of
the cost-of-living wage increase.
Thus, although Respondent granted a benefit to
its unrepresented employees without granting it to
its employees represented by the Union, it also bar-
gained with the Union over implementation of the
benefit for the employees that the Union represent-
ed. Accordingly, Respondent did not violate Sec-
tion 8(a)(1).
As to the 8(a)(3) allegation, we adhere to the
principle established in prior decisions: Withhold-
ing a change in wages, hours, or working condi-
tions from represented employees that is provided
to unrepresented employees is not violative of Sec-
tion 8(a)(3) of the Act, absent proof of discrimina-
tory motive. L. M. Berry, supra; B. F. Goodrich,
supra; and Shell Oil Company, supra.
It thus becomes necessary to examine whether
the General Counsel established that Respondent's
act was unlawfully motivated. In this regard, the
parties stipulated that witnesses for Respondent
would testify that the exclusion of unit employees
from the cost-of-living wage increase was not de-
signed to encourage those employees to reject the
Union or support decertification of the Union. Nei-
ther evidence to refute this stipulated testimony
nor any other independent evidence was offered to
prove that Respondent's motive in implementing
the cost-of-living wage increase was discriminato-
ry.
Thus, as there was no unlawful refusal to bargain
and the evidence fails to establish Respondent's
conduct was unlawfully motivated, we find that
the cost-of-living wage increase implemented by
Respondent for all employees except those repre-
sented by the Union did not violate Section 8(a)(3)
or (1) of the Act. We shall therefore dismiss the
complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the complaint be,
and it hereby is, dismissed in its entirety.
DECISION
STATEMENT OF THE CASE
EARLDEAN V. S. ROBBINS, Administrative Law Judge:
This matter was heard by me in Portland, Oregon, on
November 18, 1980.1 The charge was filed by Millmen's
Most of the evidence herein is in the form of a written stipulation of
facts entered into by all the parties. In addition, there is certain oral testi-
mony by Elvin F Busby, business representative for the Union. and Ste-
phen Abouaf, vice president of Respondent.
Union Local No. 1120, United Brotherhood of Carpen-
ters and Joiners of America, AFL-CIO, herein called the
Union, on November 14, 1979, and served on Empire
Pacific Industries, Inc., herein called Respondent, on No-
vember 19, 1979. The complaint, which issued on June
30, 1980, alleges that Respondent violated Section 8(a)(1)
of the National Labor Relations Act, as amended, herein
called the Act.
The principal issue herein is whether Respondent vio-
lated the Act by granting its employees represented by
certain employee committees and its unrepresented em-
ployees a cost-of-living wage increase at a time when a
petition to decertify the Union was pending and by
denying said wage increase to employees represented by
or formerly represented by the Union.
Upon the entire record, including my observation of
the demeanor of the witnesses, and after due considera-
tion of the post-hearing briefs filed by the parties, I make
the following:
FINDINGS OF FACT
1. JURISDICTION
At all times material herein, Respondent, an Oregon
corporation, has maintained branch offices, warehousing
facilities, and manufacturing plants at 10 locations in sev-
eral States, including an office and place of business in
the city of Eugene, Oregon, where it has been engaged
as a wholesaler of residential and commercial building
materials. During the past year Respondent did a gross
annual volume of business in excess of $500,000. During
this same period of time, Respondent purchased and re-
ceived goods valued in excess of $50,000 directly from
points outside the State of Oregon.
The complaint alleges, the parties stipulate, and I find
that Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. LABOR ORGANIZATION
The complaint alleges, Respondent admits, and I find
that the Union is now, and at all times material herein
has been, a labor organization within the meaning of Sec-
tion 2(5) of the Act.
111. THE ALLEGED UNFAIR LABOR PRACTICES
Respondent's operation is comprised of three operating
divisions. The residential division supplies building mate-
rials and services for homes, motels, restaurants, condo-
miniums, apartments, and clinics. The commercial divi-
sion supplies architects, builders, and contractors in the
heavy building industry. Both the residential and the
commercial divisions operate through eight branch of-
fices located in Portland, Oregon; Bellevue, Washington;
Eugene, Oregon; Honolulu, Hawaii; Salem, Oregon;
Bend, Oregon; Medford, Oregon; and Vancouver, Wash-
ington. Respondent also has four manufacturing facilities
located in Dillard, Oregon; Bend, Oregon; Salem,
Oregon; and Eugene, Oregon. The Eugene facility pro-
duces residential windows and doors. Warehousing facili-
ties are maintained in Portland, Oregon, and Eugene,
Oregon.
1426
EMPIRE PACIFIC INDUSTRIES. INC.
Respondent and the Union were parties to a collec-
tive-bargaining agreement effective by its terms from
November 1, 1976, to October 31, 1979, which covered a
unit of:
All door shop employees employed by Empire Pa-
cific Industries, Inc., at its facility at 720 Wilson
Street, Eugene, Oregon, but excluding all other em-
ployees, office clerical employees, professional em-
ployees, guards and supervisors as defined in the
Act.
With the exception of the above-described unit, none of
Respondent's employees are represented by a labor orga-
nization affiliated with the AFL-CIO. However, Re-
spondent's employees in Hawaii are represented by the
Teamsters Union, and its production employees at its
window plant in Eugene, Oregon, are represented by an
independent organization of its hourly employees in said
facility. Respondent and said employees were parties to a
collective-bargaining agreement signed on June 27,
1979,2 and effective until November 1, 1980. As to Re-
spondent's other hourly employees at its various facili-
ties, Respondent has implemented written policies per-
taining to their wages, hours, and working conditions.
Among other things, those policies provide for wage
levels between classifications of employees, wage entry
levels, and wage spreads between those within a given
classification. The policies also provide for an evaluation
procedure for employees on a twice yearly basis at 6-
month intervals, the first conducted in January of the
given year and the second in June. If warranted, employ-
ees received wage increases based on such evaluations.
On May 17, employee Bradford Richmond filed a peti-
tion in Case 36-RD-674 seeking to decertify the Union
as the collective-bargaining representative of the employ-
ees in the bargaining unit described above. The petition
was untimely and on June 13 withdrawal thereof was ap-
proved without prejudice. On August 8, Richmond filed
a second, timely, petition. On August 13, the Union gave
Respondent written notice of its desire to commence ne-
gotiations for a new agreement. On August 14 the Union
filed an unfair labor practice charge in Case 36-CA-3500
alleging that Respondent had sponsored and encouraged
the decertification petition, which during its pendency
blocked the processing of the petition. The charge was
dismissed for lack of merit on September 26. The
Union's appeal from this dismissal was denied on No-
vember 16.
On September 27, Respondent and the Union met in a
negotiation session at which time the Union submitted a
proposal which sought, inter alia, a wage increase of 18
percent, plus the consumer price index for the Portland
area. According to the undenied testimony of Busby,
which I credit, on October 2, by telephone, he and
Abouaf discussed possible dates for a second negotiation
session. Busby suggested a date early in October, stating
that they "should get the negotiations rolling right
along." Abouaf said he doubted that the Union repre-
sented a majority of the employees. However, they ten-
tatively agreed to hold the second negotiation session on
Unless otherwise indicated. all dates herein are in 1979.
October 23. By letter dated October 4, the Union pro-
posed that negotiations be suspended until the resolution
of the question concerning representation raised by the
decertification petition in Case 36-RD-694. 3
In August, September, and October, Respondent im-
plemented wage increases for all its salaried and hourly
personnel at its facilities in the continental United States4
except those in the bargaining unit represented by the
Union and those on commission or bonus plans.5 By
letter dated July 31, 1979, Respondent notified certain of
its employees that they would shortly receive a cost-of-
living wage increase. The increase for salaried personnel
was implemented on August I and for some of the
hourly personnel on September 1. Those hourly employ-
ees who did not receive a wage increase on September I
received one on October 12 retroactive to September 24.
Respondent did not notify the Union or the unit employ-
ees that unit employees would not receive this virtually
companywide wage increase. However, in August, some
of the unit employees informed the Union of Respond-
ent's plans to grant a wage increase.6
In late September or early October in a telephone con-
versation, according to the undenied testimony of Busby,
which I credit, Busby asked Abouaf why Respondent
did not grant the eight unit employees the wage increase
which had been granted to the other employees. Abouaf
said that was a bargaining issue and further said he did
not think that the Union represented the employees.
The parties stipulated that witnesses for Respondent, if
called to testify, would testify that Respondent's execu-
tive committee began considering a cost-of-living wage
increase in early spring 1979. The concept of such an in-
crease in the amount of approximately 15 cents an hour
was approved by the executive committee on or about
July 15 and Abouaf was given the responsibility for im-
plementing the increase. For administrative and financial
reasons, the wage increase was staggered over a 3-month
period. The parties further stipulated that Respondent's
witnesses would testify that unit employees were not
granted the wage increase because of Respondent's con-
cerr. that a cost-of-living increase to unit employees
could be deemed unlawful based on the absence of a
clear zipper clause in the union contract due to expire on
October 31; and that if the cost-of-living increase was
granted during negotiations it could result in meritorious
unfair labor practice charges.
3 A Decision and Direction of Election issued in Case 36-RD-694 on
October 31, and, on November 7, an election was set for November 26
On November 24, the unfair labor practice charge herein was filed On
February 13, 1980, an election was conducted by the Board pursuant to
the Decision and Direction of Election in Case 36-RD-694. On February
22, 1980, the Regional Director issued a Certification of Results of Elec-
tion certifying that a majority of the valid ballots had nt been cast for
the Union and that the Union was not the exclusive representative of the
door shop employees employed by Respondent at its Eugene, Oregon, fa-
cilit).
' Employees at Respondent's Hawaii branch received no wage in-
crease The pay scale of the Hawaii employees was already considerably
in excess of that of the employees at the facilities in the continental
United States.
These include salesmen on commission and certain clerks who re-
ceive bonuses
' The source of the employees' information des not appear on the
record
1427
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The parties also stipulated that witnesses for Respond-
ent would testify that the exclusion of unit employees
from the cost-of-living wage increase was not designed
to encourage unit employees to reject the Union or to
support decertification of the Union,' and further that
Respondent's prior bargaining relationship with the
Union was amicable, that few, if any, grievances were
filed during the term of the collective-bargaining agree-
ment, and that there is no history of strikes.
Witnesses for Respondent would also testify that when
negotiations began, based on its prior bargaining history
with the Union, Respondent was anticipating that the
Union's bargaining demands would include a request for
a cost-of-living clause which would far exceed the
amount of the cost-of-living wage increase granted to
other employees, and that Respondent also believed that
the granting of a wage increase to unit employees during
negotiations would cause the Union to claim that its bar-
gaining position had been undermined.
Conclusion
The General Counsel contends that Respondent violat-
ed the Act when, without notice to the Union, at a time
when a decertification petition was pending, it granted a
cost-of-living wage increase to all hourly employees and
virtually all salaried employees in the continental United
States, including those represented by an independent
labor organization, while denying the same cost-of-living
adjustment to unit employees. The General Counsel
argues that Respondent's conduct was inherently de-
structive of important employee rights in that it favored
unrepresented employees or employees represented by
"the independent organization of the Hourly Employees"
and thereby discouraged membership in the Union
during the pendency of a petition seeking to decertify
the Union. Accordingly, the General Counsel argues,
such conduct is violative of Section 8(a)(1) and (3) of the
Act, unless the employer can provide "substantial busi-
ness justification for its actions." N.L.R.B. v. Great Dane
Trailers, Inc., 388 U.S. 26 (1967); N.L.R.B. v. Erie Resis-
tor Corp., 373 U.S. 221 (1963).
I agree that, in the circumstances herein, the granting
of the cost-of-living wage increase to all employees being
impacted in a similar manner by inflationary pressures
except those represented by the Union is inherently dis-
criminatory. Thus, the critical issue is whether there is
substantial business justification for such conduct. Re-
spondent does not argue, and the facts do not support,
that unit employees were not similarly situated to the
other employees as to a need for a cost-of-living in-
crease. Their wage rates seem to be generally in the
same range without substantial disparity and unit em-
ployees last received a wage increase in November 1978
whereas some of the other hourly employees received
wage increases in June 1979.
'The parties stipulated that Respondent's witnesses would testify that
during the period that the decertification petition was pending Respond-
ent did not hold individual or group meetings of unit employees and did
not issue written notifications or letters wherein the cost-of-living in-
creases received by the other employees were directly discussed or indi-
rectly mentioned.
Respondent argues that the pendency of a decertifica-
tion petition and the pending negotiations with the Union
constitute sufficient justification for its decision to with-
hold the cost-of-living wage increase from the unit em-
ployees. I disagree. Respondent concedes that at the time
the wage increase was approved, and announced, it was
Respondent's intent to exclude unit employees. This was
prior to the reopening of the union contract and prior to
the filing of the decertification petition. Thus, the facts
do not lend reasonable support to Respondent's alleged
fear of meritorious unfair labor practice charges based on
implementing a wage increase during the pendency of
negotiations and the pendency of a decertification peti-
tion.
Further, the collective-bargaining agreement with the
Union specifically provides that the wage schedule there-
in "shall be considered minimum wages, and shall not
prevent the payment of higher scales to any employee
whose work may warrant." A similar provision is con-
tained in the contract with the hourly employees,8 all of
whom received a cost-of-living increase.
In all the circumstances, I find that there was no sub-
stantial business justification for the disparate treatment
accorded unit employees. Furthermore, Respondent pur-
sued a unilateral course of action with no notification to
the Union, or even to unit employees, that a cost-of-
living increase was being granted to virtually all employ-
ees except unit employees and with no explanation as to
why unit employees were being excluded. If such notifi-
cation and explanation had been given to the Union it
might well have obviated all of Respondent's professed
fears as to the vulnerability of its position if the unit em-
ployees were granted the wage increase. Indeed, Busby's
query in September or October as to why they were ex-
cluded seems to indicate that the Union would have had
no objections.
Accordingly, in the circumstances herein, I find that,
by denying to its Eugene, Oregon, door shop employees
represented by the Union the 15-cent-an-hour cost-of-
living wage increase granted to other employees in
August and September 1979, Respondent has discour-
aged membership in the Union in violation of Section
8(a)(1) and (3) of the Act.
CONCL USIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By withholding, without substantial business justifi-
cation, from its employees represented by the Union a
cost-of-living wage increase granted to its unrepresented
employees and to its employees represented by certain
unaffiliated employee committees, Respondent has en-
gaged in unfair labor practices in violation of Section
8(a)(1) and (3) of the Act.
' From a reading of the collective-bargaining agreements, it is apparent
that the contract with the hourly employees is patterned after the union
contract.
1428
EMPIRE PACIFIC INDUSTRIES, INC.
4. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease
and desist therefrom and that it take certain affirmative
action designed to effectuate the policies of the Act.
Having found that Respondent has violated Section
ees represented by the Union the 15-cent-an-hour cost-of-
living wage increase granted to other employees in
August and September 1979, 1 shall recommend that Re-
spondent make whole said employees for any loss of pay
they suffered by reason of the withholding of said wage
increases with interest thereon to be computed in the
manner prescribed in Florida Steel Corporation, 231
NLRB 651 (1977). 9
[Recommended Order omitted from publication.]
8(a)(1) and (3) of the Act by withholding from employ-
See, gnerally. Ii PU.S. Government Prinmbing Office:.. 192-36NLRB 71 (1962)
-', U.S. Government Printing Oace: 1982--361-554/5
1429