Fibreboard Paper Products Corp.

National Labor Relations Board - Board Decisions

Mar 27, 1961

130 N.L.R.B. 1558 (N.L.R.B. 1961)

1558 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connect
lion with the operations of the Company set forth in section I, above, have a close,
intimate, and substantial relation to trade, traffic, and commerce among the several
States, and tend to lead to labor disputes burdening and obstructing commerce and
the free flow thereof.
V. THE REMEDY
Having found that Respondent has engaged in unfair labor practices, I shall re-
commend that it cease and desist therefrom and take certain affirmative action de-
signed to effectuate the policies of the Act.
On the basis of the foregoing findings of fact, and upon the entire record in the
case , I make the following:
CONCLUSIONS OF LAW
1. Local Joint Executive Board of Hotel and Restaurant Employees and Barten-
ders International Union of Long Beach and Orange County and Culinary Alliance
Local No. 681 are labor organizations within the meaning of Section 2(5) of the
Act.
2. Leonard Smitley and Joseph W. Drown d/b/a Crown Cafeteria are an em-
ployer within the meaning of Section 2(2) of the Act.
3. By picketing the premises of Leonard Smitley and Joseph W. Drown d/b/a
Crown Cafeteria, as found above, Respondent has engaged in and is engaging in
unfair labor practices within the meaning of Section 8(b)(1)(A) of the Act.
4. By picketing for a union-shop contract, as found above, Respondent has en-
gaged in and is engaging in unfair labor practices within the meaning of Section
8(b) (2) of the Act. -
5. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication.]
Fibreboard Paper Products Corporation and East Bay Union
of Machinists, Local 1304, United Steelworkers of America,
AFL-CIO and United Steelworkers of America , AFL-CIO.
Case No. 20-CA-1682. March 27, 1961
DECISION AND ORDER
On November 27, 1959, Trial Examiner Howard Myers issued his
-Intermediate Report in the above-entitled proceeding, finding that
the allegations of the complaint were not supported by substantial
evidence and recommending that the complaint be dismissed in its
entirety, as set forth in the copy of the intermediate Report attached
hereto. Thereafter, the Respondent, the Union, and the General
Counsel filed exceptions to the Intermediate Report and briefs in
support thereof.
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the In-
termediate Report, the parties' exceptions and brief, and the entire
record in this case, and hereby adopts the findings, conclusions, and
-recommendations of the Trial Examiner, with the following modi-
fications and additions.
130 NLRB No. 161.
FIBREBOARD PAPER PRODUCTS CORPORATION 1559
• The record in this case shows that Respondent had bargained with
United Steelworkers of America, AFL-CIO, the Charging Party in
this case, for a unit of some 50 maintenance and powerhouse em-
ployees under a series of collective-bargaining contracts since 1937.
The last of these contracts expired on July 31, 1959. Between 1954
and 1956 the Respondent had under consideration the feasibility of
contracting out its maintenance work as a measure of effecting plant
economies. The study was renewed in June 1959. As a result of the
renewed study, Respondent reached the decision on July 27, 1959, to
effectuate this plan, which, it was estimated, would save the Re-
spondent $225,000 annually in addition to a substantial reduction in
manpower. Automatic renewal of the existing contract with the
Steelworkers had been forestalled by the Union's letter of May 26,
requesting substantial modifications in the existing contract. As soon
as' Respondent had made its decision on subcontracting, R. C. Thur-
mann, its director of industrial relations, contacted W. F. Stumpf,
the International representative of the Steelworkers, and informed
him that negotiations for a new contract covering the maintenance
employees would be pointless as the change in Respondent's method
of operations would become effective on July 31, upon expiration of
the existing contract. It is undisputed that the Union had not pre-
viously been informed of the Respondent's intention with regard to
contracting out the maintenance work. According to the testimony
of Thurmann, which was credited by the Trial Examiner, on July 27
and again on July 30, Respondent informed the Steelworkers' repre-
sentatives that Respondent was prepared to give termination pay to
the terminated employees as well as additional allowances and bene
fits. No objections to these proposals were raised by the Steelworkers.'
The Trial Examiner found that, the Respondent's motive in con-
tracting out its maintenance work was economic rather than dis-
criminatory. Accordingly, he concluded that the maintenance em-
ployees were validly terminated when the Respondent, in the exercise
of its business judgment, decided to contract out the work theretofore
performed by the Respondent with its own employees. We agree
with the Trial Examiner that the evidence fails to support the alle-
gation of the complaint that the Respondent's decision was motivated
by discriminatory reasons.
In his exceptions to the Intermediate Report, however, the General
Counsel contends that the Trial Examiner did not pass upon an issue
of primary importance in this case. It is the position of the .General
I Since the Respondent was willing to discuss the termination benefits 'to which the
affected employees were entitled , such as termination pay and pro rata vacation pay, this
case is to be distinguished from Brown-Dunkin Company, Inc., 125 NLRB 1379, and
Brown Truck and Trailer Manufacturing Company, Inc.,'et al., 106 NLRB - 999, in which
the 8 ( a)(5) violations were predicated upon a refusal to 'bargain about certain incidents
of termination.
1560 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Counsel that the Respondent was under a statutory duty to bargain
with the Steelworkers about its decision to contract out the mainte-
nance work. The General Counsel relies upon language from Sham-
rock Dairy, Inc., et al., 124 NLRB 494, 498, that the duty to bargain
"... includes the obligation to notify the collective-bargaining repre-
sentatives and to give such representative a chance to negotiate with
respect to a contemplated change concerning the tenure of the em-
ployees and their conditions of employment. . . ." Considered, how-
ever, in the context 2 of the supporting citation' of the Brown Truck
case, supra, this language does not support the broad proposition,
urged upon us by the General Counsel, that a management decision
to cease one phase of its operations solely for economic reasons is in
and of itself a mandatory subject of bargaining. Indeed, not only
is this broad proposition without supporting precedent, but it is in
fact contrary to existing precedent. For, as the Board has held, the
establishment by the Board of an appropriate bargaining unit does
not preclude an employer acting in good faith from making changes
in his business structure, such as entering into subcontracting arrange-
ments, without first consulting the representative of the affected
employees.'
Moreover, considering the question de novo, we conclude that the
General Counsel's position is not supported by the statutory language
or purpose. The statutory obligation imposed upon employers by
Section 8 ( a) (5) is unquestionably broad, and includes the obligation
to bargain not only concerning matters affecting employees while they
are employed, but also concerning matters as they affect termination
and post-termination rights and obligations. None of the obligations
heretofore imposed with respect to this latter category concern, how-
ever, the question whether, as here, a termination will occur; all
rather presuppose that terminations will occur, and are concerned
solely with such matters as selection for termination among present
employees, and benefits flowing from present employment which em-
ployees may be entitled to receive at the time of or following the ter-
mination of employment. These matters, therefore, although they
look to the future, nevertheless involve matters presently affecting em-
ployees within an existing bargaining unit; for that reason they fall
within the statutory language as "conditions of employment." 4
2 See Armour & Co . v. Wantock, 323 U . S. 126, 133, where the Court cautioned that
"words of our opinions are to be read in the light of the facts of the case under dis-
cussion... . General expressions transposed to other facts are often misleading."
8 Mahoning Mining Company, 61 NLRB 792, 803; see also Walter Holm & Company,
87 NLRB 1169, 1172.
4 Member Rodgers concurs in the dismissal of the complaint herein . However , he does
not subscribe to that portion of the opinion which asserts that the Respondent was
under an obligation to bargain with the Union about the so-called termination rights and
termination benefits of the affected employees. These matters were fully covered by the
FIBREBOARD PAPER PRODUCTS CORPORATION 1561
. The obligation which the General Counsel would impose is, how-
ever, of an'entirely different nature. For it is not concerned with the
conditions of employment of employees within an existing bargaining
unit; it involves, rather, the question whether the employment rela-
tionship still exists. Although the determination of that question
obviously affects employees, that determination does not relate to a
condition of employment, but to a precondition necessary to the estab-
lishment and continuance of the. relationship from which conditions
of employment arise. Moreover, although the statutory language is
broad, we do not believe it is so broad and all inclusive as to warrant
an inference that the Congress intended to compel bargaining con-
cerning basic management decisions, such as whether and to what ex-
tent to risk capital and managerial effort. Under all the circum-
stances, therefore, we conclude that Section 8(a) (5) of the Act does
not obligate the Respondent to bargain with the Steelworkers con-
cerning its economically motivated decision to subcontract its mainte-
nance operations.
We do not agree with our dissenting colleague that the Timken,
Shamrock, and Railroad Telegraphers cases5 compel a contrary con-
clusion. In each of those cases, the union continued and would con-
tinue to be the representative of employees in the preexisting unit, and
the decisions which the employers might make, in Timken and Sham-
rock with respect to subcontracting and in Railroad Telegraphers with
respect to abolition of positions, had or might have an impact on the
conditions of employment of employees remaining in the unit. For
that reason the employees' representative was entitled to bargain with
respect to such decisions. Here, however, as set forth above, no em-
ployees remained in the unit to be represented by the Union, and thus
there necessarily could be no impact on the employment conditions of
employees remaining in the unit. Those, cases, therefore, do not sup-
port the proposition which our colleague urges-that a union which
will not represent any of the employer's employees is entitled to com-
pel the employer to bargain about matters which will have an impact
only when it ceases to be a representative.6
We also agree with the Trial Examiner for the reasons stated in
the Intermediate Report that the Respondent did not violate Section
8(d) of the Act by failing to' abide by the notice provisions of that
existing collective -bargaining agreement of the parties and were not therefore subject to
further mandatory bargaining . Accordingly, he finds it unnecessary to pass upon the
applicability of the Timken, Shamrock, and Railroad Telegraphers cases to the facto of
this case.
5 The Timken Roller Bearing Company, 70 NLRB 500; Shamrock Dairy, Inc., at at.,
124 NLRB 494; The Order of Railroad Telegraphers, et at . v. Chicago and North
Western Railroad Co., 362 U.S. 330.
6Insofar as language in the above cases, taken out of context, may seem to lend sup-
port to the position of our dissenting colleague, see footnote 2, supra.
1562 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
section when it decided to contract out the maintenance work upon
expiration of the existing contract.
[The Board dismissed the complaint.]
MEMBER FANNING, dissenting in part and concurring in part:.
The basic facts in this case are substantially undisputed. The
Respondent, after being. notified of the Union's contract demands,
revived its dormant plan to subcontract out the plant maintenance
work, ostensibly. as an economy measure, The Respondent notified
the Union of this for the first time on July 27, 1959, 4 days before the
expiration of the contract on July 31, 1959. The subcontracting ar-
rangement was to take effect at the expiration of the contract. The
Union protested this change, but the Respondent refused to discuss
its decision and unilaterally put the subcontracting operation into
'effect, discharging the union-member employees previously doing the
maintenance work. Even accepting, as I do, that the decision was
made for a valid economic reason, I conclude, contrary to my col-
leagues, that the conduct of the Employer in this case violates a basic
requirement of the Act. Simply stated, the issue here is whether an
employer, absent any discriminatory motivation, violates Section
8(a) (5) of the Act when he refuses to discuss with the union his deci-
sion to subcontract the work previously done by union-member em-
ployees and unilaterally subcontracts that work.
Section' 8(d) requires an employer to bargain in good faith
"... with respect to wages, hours, and other terms and conditions of
employment, for the negotiating of an agreement, or any question
arising thereunder . . . ." If subcontracting is such a subject, then
the Respondent in this case violated the Act, even if the decision to sub-
contract was otherwise lawfully motivated.
In the Timken Roller Bearing case' the employer refused to bargain
about his intention to, subcontract work in the future. The Board, in
agreement with the findings and reasoning of the Trial Examiner,
decided that this conduct constituted a refusal to bargain. In so doing
the Board specifically adopted the Trial Examiner's conclusion that
"... the Respondent's system of subcontracting work may vitally
affect its employees by progressively undermining their tenure of
employment in removing or withdrawing more and more work and
hence more and more jobs from the unit." 8 This reasoning applies
with considerably more vigor where, as in the instant case, the entire
complement of workers were rendered jobless in a single transaction.
The Timken case is indistinguishable from the instant case on the
subcontracting issue.
7 The Timken Roller Bearing Company , 70 NLRB 500 , enforcement denied onother
grounds 161 F. 2d 949 (C.A. 6).
8 The Timken Roller Bearing Company, supra , at 518.
FIBREBOARD PAPER PRODUCTS CORPORATION 1563
More recent Board cases may be cited to the same effect. Thus in
the Shamrock Dairy case,' the Employer, without notice to the Union,
executed individual employment contracts with its employee-drivers
for the purpose of establishing an independent contractor system of
distributing its products. A Board majority held that such unilateral
adoption of the new system of distribution constituted a violation of
Section 8(a) (5)-and (1) of the Act.
Members Jenkins and Fanning agree with the Chairman for the
reasons stated hereinafter that the Respondent violated Section
8(a) (5) and (1) by failing to bargain with the Union as to
whether the so-called independent contractor system of distribu-
tion should be adopted.'°
While The Remedy section of that case is less clear , the Order of
the Board was unambiguous in that it ordered the employer to bargain
about the adoption of the independent contractor system of
distribution.
A careful reading of the Shamrock case reveals that the portion of
that case cited by the majority in the instant case is not the holding,
but merely one of the reasons for the holding, as the above quotation
from the Shamrock case indicates.
Whatever the effect of the foregoing decisions, it is clear that the
opinion of the Supreme Court of the United States in the Railroad
Telegraphers case " controls the disposition of the instant case. That
case dealt with the right of the union to demand bargaining on its
proposed contract provision that "No position in existence on De-
cember 3, 1957, will be abolished or discontinued except by agreement
between the carrier and the organization." 11 The Railroad sought
an injunction to prevent any strike by the union in support of that
demand. The Railroad argued that this was not a "labor dispute"
within the meaning of the Norris-LaGuardia Act and, accordingly,
that the anticipated strike was enjoinable. The Railroad further con-
tended that, regardless of the Norris-LaGuardia Act, the strike was
unlawful and hence enjoinable.
In that portion of the decision which applies directly to the instant
case the Supreme Court held that the Union's proposal was not un-
lawful : "Here, far from violating the Railway Labor Act, the Union's
effort to negotiate its controversy with the railroad was in obedience
to the [Railway Labor] Act's command that employees as well as
railroads exert every reasonable effort to settle all disputes concerning
`rates of pay, rules , and working conditions' 45 U.S.C. 82, 1st." 13
9 Shamrock Dairy, Inc., et at., 124 NLRB 494.
10 Shamrock Dairy, Inc., et al., supra, at 497, 498.
n Telegraphers v. Chicago and N.W.R. Co ., 362 U .S. 330.
12 Telegraphers v. Chicago and N.W.R . Co., supra, at 332.
13 Telegraphers . v. Chicago and N .W.R. Co., supra, at 339.
1564 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Section 2, First, of the Railway Labor Act is substantially identical
in its pertinent provisions to Section 8(d) of the National Labor Re-
lations Act, supra, and, like Section 8(d), it imposes the affirmative
duty to bargain.14
Since the scope of the duty to bargain is substantially the same
under both the NLRA and RLA,15 the Railroad Telegraphers case is
directly applicable to the instant case . Since the Union's demand to
bargain about job abolition or discontinuance was a proper subject of
bargaining under the RLA, it necessarily follows that the Union's de-
mand to bargain about the abolition of jobs under a proposed sub-
contracting arrangement in the instant case is also a proper subject
of bargaining.
My position in the instant case is simply a restatement of what is
already the law by virtue of the Supreme Court's decision in the
Railway Telegraphers case." In this connection, it may be noted that
an attempt was made in the 2d session of the 86th Congress to reverse
this interpretation of the existing law.17 This attempt having failed
in Congress, I do not believe it should succeed in this Agency.
To hold, as the majority does in the instant case, that the employer
is not obliged to bargain- about its decision to subcontract, is contrary
not only to the Act and the Board's own precedents but the clear pro-
nouncement of the Supreme Court of the United States."' As a result
of the majority's decision, employers by the simple expedient of uni-
laterally subcontracting work may abolish every job in a collective-
bargaining unit and thereby eliminate union representation.
In my opinion, Section 8 (d) under existing Board and Supreme
Court decisions imposes on an employer the duty to bargain about its
decision to subcontract work performed by employees represented in
14 Virginia Railway Co. v. System Federation No. 40,300 U . S. 515.
1s Indeed the term "other terms and conditions of employment" in the NLRA has been
held to be more inclusive than the term "working conditions" in the RLA . Inland Steel
Company v . N.L.R.B., 170 F. 2d 247 , cert. denied 836 U.S. 960.
18 Although the Railroad Telegraphers case is the Supreme Court opinion upon which
I primarily rely in resolving the instant case, the Supreme Court has had occasion in the
past to shed some light on its thinking with respect to mandatory subjects of bargaining
when it cited, with approval, Timken Roller Bearing Co ., supra, in the following context :
It is not necessary to set precise outside limits to the subject matter properly in-
cluded within the scope of mandatory collective bargaining . Cf. Labor Board v.
Borg-Warner Corp., 356 U . S. 342, to hold, as we do, that the obligation under Sec-
tion 8(d) on the carrier and their employees to bargain collectively with respect to
wages, hours, and other terms and conditions of employment and to embody their
understanding in a written contract incorporated in any agreement reached, found
an expression in the subject matter of Article XXXII ( wages]. See Timken Roller
Bearing Co., 70 NLRB 500, 518 reversed on other grounds , 161 F. 2d 947. And
certainly bargaining on this subject through their representatives was a right of
the employees protected by § 7 of the Act. [Teamsters Union v. Oliver, 358 U.S.
283, 294, 295.]
17 S. 3548, 86th Cong., 2d sess.
is With respect to the majority 's contention that my reliance on existing precedent is
"taken out of context," such a contention is hardly an answer to specific holdings of
Board and court decisions. The cases cited , of course, are available for the consideration
of any interested persons.
FIBREBOARD PAPER PRODUCTS CORPORATION 1565
'a collective-bargaining unit.19 Clearly, this duty to bargain is not
an order restraining the employer from subcontracting such work.
The duty to bargain does not include an obligation to yield. Had the
employer bargained about its decision to subcontract the maintenance
work in the instant case, it is entirely possible that the parties could
have arrived at a solution to the problem short of subcontracting the
entire maintenance operation. It seems to me that this possibility is
the goal of sound collective bargaining, which the Act is designed to
foster and encourage.
I agree with the majority that the Respondent did not violate Sec-
tion 8(d) with respect to the notice provisions of that section.
CHAIRMAN MCCULLOCH took no part in the consideration of the
above Decision and Order.
a, The majority asserts that the Timken, Shamrock, and Railroad Telegraphers cases
are not inconsistent with their decision here. They would distinguish the instant case
from the cited cases on the ground that after the unfair labor practice occurred "no
employees remained in the unit to be represented by the Union." Presumably, the
majority would find a violation of Section 8(a)(5) if the Respondent had subcontracted
half of its maintenance work without bargaining. This is to say that discharging some
employees in a unit without bargaining is unlawful , but discharging all of them is not.
The inconsistency of this approach is apparent, and promises a sound basis for future
confusion in an already difficult area of the law.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon a joint charge duly filed on July 31, 1959, by East Bay Union of Machinists
Local 1304, United Steelworkers of America, AFL-CIO, and United Steelworkers of
America, AFL-CIO, herein cojointly called the Steelworkers, the General Counsel
of the National Labor Relations Board, herein respectively called the General Coun-
sel 1 and the Board, through the Regional Director for the Twentieth Region (San
Francisco, California), issued a complaint, dated September 2, 1959, alleging that
Fibreboard Paper Products Corporation,2 herein called Respondent, had engaged in
and was engaging in unfair labor practices affecting commerce within the meaning of
Section 8(a)(1), (3), and (5) and Section 2(6) and (7) of the National Labor
Relations Act, as amended, 61 Stat. 136, herein called the Act.
Copies of the charge and complaint, together with notice of hearing thereon, were
duly served upon Respondent and upon the Steelworkers.
Specifically, the complaint, as amended at the hearing, alleged that, in violation of
Section 8 (a) (1) , (3 ), and (5) of the Act, Respondent (1) on July 27, 1959, entered
into an oral understanding, to take effect on August 1, 1959, with Fluor Maintenance,
Incorporated, herein called Fluor, whereby Fluor, acting as an independent contrac-
tor, was to perform all Respondent's Emeryville plant maintenance work, including
all work previously performed by Respondent's employees who were then repre-
sented, for the purpose of collective bargaining, by the Steelworkers; (2) on or about
July 30, 1959, notified the Steelworkers that the then current collective bargaining
contract between it and the Steelworkers would terminate the following day because
Respondent would no longer have any employees in the unit covered by said contract;
(3) refused to bargain with the Steelworkers regarding termination pay; and (4) on
July 30, 1959, terminated all employees in the unit covered by said contract in ac-
cordance with its aforementioned understanding with Fluor. The complaint, as
amended, further alleged that Respondent failed to fulfill its statutory duty to bargain
collectively with the Steelworkers within the meaning of Section 8(d) of the Act.
On September 10, 1959, Respondent duly filed an answer, which was amended at
the hearing, denying the commission of the unfair labor practices alleged.
I This term specifically includes counsel for the General Counsel appearing at the
hearing.
2 Erroneously referred to in the formal papers as Fibreboard Paper Products Corp.
1566 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pursuant to due notice, a hearing was held on September 21 and 22, 1959, at San
Francisco, California, before the duly designated Trial Examiner. All parties were
represented by counsel who participated in the hearing. Full opportunity was
afforded counsel to be heard, to examine and cross-examine witnesses, to introduce
evidence pertinent to the issues, to argue orally on the record at the conclusion of
the taking of the evidence, and to file briefs on or before October 27, 1959?
Briefs have been received from Respondent's counsel and from counsel for the Steel-
workers which have been carefully considered. After the close of the hearing,
counsel for the Steelworkers and Respondent's counsel entered into a written stipula-
tion to correct certain errors appearing in the stenographic transcript of the hearing.
The stipulation-is hereby approved and the corrections are hereby deemed made.
The stipulation is received in evidence as Trial Examiner's Exhibit No. 1. .
Upon the entire record in the case, and from his observation of the witnesses, the
.Trial Examiner makes the following:
. ' FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Respondent, a Delaware corporation, operating 20 plants in the States of Califor-
nia, Oregon, Nevada, and Colorado, is engaged in the manufacture, sale, and distri-
bution of paint, industrial insulation, roofing materials, floor covering materials, and
related products. During the 12-month period immediately preceding the issuance
of the complaint herein, Respondent sold and shipped from its Emeryville, California,
plant, the employees of which are the only ones involved in this proceeding, to cus-
tomers located outside of the State of California, finished products valued in excess of
$1,000,000. During the same period, the Emeryville plant's out-of-State purchases
of raw materials exceeded $1,000,000.
Upon the above admitted facts, the Trial Examiner finds that Respondent, at all
times material herein, was and now is engaged in commerce within the meaning of
Section 2(6) and (7) of the Act and that it will effectuate the policies of the Act
for the Board to assert jurisdiction over this proceeding.
H. THE LABOR ORGANIZATION INVOLVED
East Bay Union of Machinists , Local 1304, United Steelworkers of America,
AFL-CIO, and United Steelworkers of America, AFL-CIO, are labor organiza-
tions admitting to membership employees of Respondent.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The pertinent facts
For more than a score of years the Respondent and/or its predecessors have had
collective-bargaining contracts with the Steelworkers and/or its predecessors.
The contract in issue in this proceeding, dated September 24, 1958, effective as of
August 1, 1958, expired by its terms on July 31, 1959,4 covered all Respondent's
maintenance employees .5
The pertinent provisions of said contract reads as follows:
This Agreement shall continue in full force and effect to and including July
31, 1959, and shall be considered renewed from year to year thereafter between
.the respective parties unless either party hereto shall give written notice to the
other of its desire to change, modify, or cancel the same at least sixty (60) days
prior to expiration.
Within fifteen (15) days after notice of reopening is given, the opening party
shall submit a complete and full list of all proposed modifications. All other
sections shall remain in full force and effect. Negotiations shall commence no
,later than forty-five (45) days prior to the anniversary date of the Agreement
unless otherwise mutually changed.
8 At the request of counsel for the Steelworkers the time to file briefs was extended to
November 9, 1959.
A Unless otherwise indicated, all dates hereinafter mentioned refer to 1959.
a These 50 or so employees are described in the record as "maintenance, mechanics and
machinists , their helpers, working foremen, and firemen and engineers employed in the
powerhouse , and the storekeeper in the central supply and store room."
FIBREBOARD PAPER PRODUCTS CORPORATION- 1567
Under date of May 26 , the Steelworkers wrote Respondent as follows:
Pursuant to the provisions of the Labor Management Relations'Act , 1947, you
are hereby notified that the Union desires to-modify as of August 1, 1959 the
collective bargaining contract dated July. 31, 1958, now in effect between the
Company and the Union.
The Union offers to meet with the Company at such early time and suitable
place as ' may be' mutually convenient, for the purpose. of' negotiating a new
contract. '
Under date of June 2, R. C. Thurmann , for the past 10 years Respondent 's direc-
tor of industrial relations and, as such , Respondent 's chief negotiator with the unions
representing its employees , replied to the aforesaid letter , in the. following manner:
This will acknowledge your letter of May 26, 1959 , requesting a meeting to
discuss modifications of the current Agreement between the Emeryville Plant of
Fibreboard Paper Products Corporation and the United Steelworkers of America
on behalf of the East Bay Union of Machinists , Local 1304.
We will contact you at a later date regarding a meeting for this purpose.
Under date of June .15, the Steelworkers wrote Respondent requesting a meeting
to discuss .-the proposals enclosed in said letter .. The proposals read as follows:
Section I . Wage Scales
We would like to arrive at a basis to eliminate the unfair wage discrepancy
between the machinist and the other crafts in the plant.
Section IV. Seniority
Paragraph b-Change ninety (90) days to thirty ( 30) days.
Section V. Hours of Work and Overtime
We request a. 35 hour week-schedule of shifts to be worked out.
Section XII . Holidays
1. Add, one additional paid Holiday.
2. Delete worked the day before and the day after, for qualifying.
Section XIII. Night Differentials
( a) Change to ten (10) percent , and fifteen ( 15) percent.
Section XV. Vacations
We request three weeks vacation after five years of service, and four weeks
vacation after fifteen years of service.
Section XVII. Welfare Plan
The, plant to pay full cost of Health and Welfare . The Plant also to extend
the coverage to retired employees under the pension plan.
Section XXI. Adjustment of Complaints
Add new section between ( a) and (b) as follows:
Such meeting between an executive of the Plant and a representative of the
Machinist Union no . later than five working days after referral to the above
representatives of the parties . Failure of either party to be available shall con-
stitute concession of the grievance to the other party. The time limit may be
extended by mutual agreement.
New
We request five cents per hour to be placed into a fund to provide for supple-
mentary unemployment benefits for employees laid off in a reduction in force.
To provide at least sixty-five percent of the employees normal weekly wage, in-
cluding unemployment benefits.
Qualifications to be those of the State Department of Employment.
On June 26 , Lloyd Ferber , for more than 7 years " the business representative of
Local 1304 , telephoned Thurman and during the conversation requested a bargain-
ing meeting and Thurmann replied that he would telephone him during the week of
July 12, to arrange such a meeting.
During the week of July 12, Ferber again telephoned Thurmann but did not speak
to him because Thurmann was not in his office. Ferber left word with Thurmann's
secretary to have Thurman call him . Thurmann did not return the call but instead
had his secretary , telephone Ferber and tell Ferber that he would endeavor to call
Ferber before the end of that week to fix a time for a-meeting.
1568 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On the morning of July 27, Thurmann was informed that Respondent had decided
to "contract out" the work which then was being performed by the men covered by
the Steelworkers' contract. He immediately telephoned William F. Stumpf, a repre-
sentative of the Steelworkers (the International), and stated that he desired to meet
with him and Ferber as soon as possible. Because of other union business Stumpf
and Ferber could not meet with Thurmann until late that afternoon.
Stumpf, Ferber, and Thurmann met at 5:30 p.m., July 27. The discussion was
opened by Ferber remarking that Thurmann would receive, in the forepart of the
week , a communication from the Central Labor Council informing hini that Ferber
had "asked for strike sanction against the plant." Thereupon, Thurmann handed
to Ferber and Stumpf copies of letters, dated July 27, reading as follows:
Mr. WM. F. STUMPF, Representative,
United Steelworkers of America,
610 Sixteenth StreetRooms 219-220,
Oakland 12, California
Subject: Emeryville Plant Agreement
Under date of May 26, 1959, Mr. Stumpf, you notified us of your desire to
modify our collective bargaining agreement with your Union dated September
24, 1958, relative to maintenance employees at our Emeryville plant, and of
your desire to meet for the purpose of negotiating a new contract to be effective
August 1, 1959. Under date of June 15, 1959, you forwarded your contract
proposals.
For some time we have been seriously considering the question of letting out
our Emeryville maintenance work to an independent contractor, and have now
reached a definite decision to do so effective August 1, 1959.
In these circumstances, we are sure you will realize that negotiation of a new
contract would be pointless. However, if you have any questions, we will be
glad to discuss them with you.
[S] R. C. THURMANN,
Director of Industrial Relations.6
After Stumpf and Ferber had read the letters, considerable discussion then ensued
regarding Respondent's legal right to enter into a contract with a third party to do
the work which had been done by members of Local 1304. When mention was
made that a picket line would be established at the plant if Respondent entered into
such a contract, Thurmann stated that it would be directed against the contractor in
order to force him to hire Local 1304 members. Thurmann also stated that Re-
spondent not only would give each person laid off, because of the termination of his
employment with Respondent, all the termination pay and other monetary and simi-
lar benefits due under the collective-bargaining agreement, but would also, even
though the agreement did not so provide, grant them vacation pay on a prorata basis.
When Thurinann was asked the name of the contractor who was to do the main-
tenance work, he replied that Respondent had under consideration two contractors
and that as soon as Respondent decided between them he would immediately advise
Ferber. The meeting concluded with the understanding that the parties would meet
again the following Thursday, July 30.
The next day, July 28, Thurmann telephoned Ferber and said that the contract
had been let to Fluor. After some further conversation relative to the establishment
of a picket line, Thurmann agreed to meet with Ferber and the Steelworkers' nego-
tiating committee on Thursday afternoon, July 30.
The following letter, dated July 29, was received by Respondent on July 30:
FIBREBOARD PAPER PRODUCTS CORPORATION,
P.O. Box 4317
Oakland, California.
(Attention: Mr. R. C. Thurmann, Director of Industrial Relations.)
Re: Subject: Emeryville Plant Agreement
GENTLEMEN: Reference is made to your letter of July 27, 1959.
We interpret your letter to mean that you are attempting to cancel your pres-
ent agreement with us. If that is your intention, you are too late. We direct
you to the provision of the agreement which requires that you should have
given us at least sixty (60) days notice of cancellation prior to the July 31, 1959
expiration date.
9 The letter handed to Ferber was addressed to Ferber and his name appears in the first
paragraph thereof. The May 26 letter mentioned in the above-quoted letter was signed
by both Ferber and Stumpf.
FIBREBOARD PAPER PRODUCTS CORPORATION 1569
In the absence of such notice, the contract has - been automatically renewed
for another year,, subject, of course, to your obligation .to meet with us at once
to discuss the proposed modifications which we sent you, following our notice
of May 26 for modifications of the existing agreement.
We trust that you will not lock out the employees covered by our agreement,
and that you will not consummate the plan outlined in your letter of July 27th.
We call upon you to meet with us at once.
Very truly yours,
UNITED STEELWORKERS OF AMERICA, AFL-CIO
By WM. F. STUMPF,
Wm. F. Stumpf, Representative
By LLOYD FERBER,
Lloyd Ferber, Business Rep.
Local 1304
On the afternoon of July 30, Thurmann and four other Respondent officials met
with Stumpf, 'Ferber, the employees' negotiating committees, and others. At the
opening of the meeting, Thurmann handed copies of the following letter, signed by
Thurmann and dated July 30, to both Stumpf and Ferber:
Messrs. WM. F. STUMPF, Representative, and
LLOYD H. FERBER, Business Representative Local 1304.
United Steelworkers of America,
610 Sixteenth Street-Room 219-220,
Oakland 12, California.
GENTLEMEN: The following is in reply to your letter of July 29, 1959.
1. The introductory provisions of our Agreement with your Union provide in
pertinent part:
This Agreement shall continue in full force and effect to and including
July 31, 1959, and shall be considered renewed from year to year there-
after between the respective parties unless either party hereto shall give
written notice to the other of its desire to change, modify, or cancel the
same at least sixty (60) days prior to expiration.
Under date of May 26, 1959, you notified us of your desire to modify the
Agreement and to meet with us for the purpose of negotiating a new Agreement
to be effective August 1, 1959, Under the provision quoted above, our Agree-
ment therefore will expire at midnight July 31, 1959, and will not be auto-
matically renewed. See American Woolen Company, 57 NLRB 647. Our
letter of July 27, 1959, was not an attempt to cancel the Agreement but was
written in contemplation of the fact that it will, by is terms, expire at midnight,
July 31, as set forth above.
2. Aside from the foregoing, the Agreement does not prohibit us from letting
work to an independent contractor, and we have the right to do so. See Amal-
gamated Association, etc., v. Greyhound Corporation, 231 F(2d) 585.
3. While it will be necessary for us to lay off or terminate employees here-
tofore performing the work to be taken over by the contractor, we do not
contemplate any lockout.
4. As we stated in our letter of July 27, it appears to us that since we will
have no employees in the bargaining unit covered by our present Agreement,
negotiation of a new or renewed Agreement would appear to us to be pointless.
(However, we repeat that we will be glad to discuss with you at your conven-
ience any questions that you may have.
After Stumpf and Ferber had read the letter quoted immediately above, it was
given to the members of the employees' negotiating committee who read it. Stumpf
then stated that the committee was ready to negotiate a bargaining contract, and
inquired of Thurman whether Respondent had any counterproposals to submit.
Thurmann replied, to quote from his credible testimony, "It would be pointless for
us to proceed with any suggested modifications of the current agreement since, as of
midnight, July 31, 1959, the contract would have been terminated by its own
language, as the Union had opened the contract, and that as of that same time the
Fluor Maintenance Corporation was taking over the maintenance work of the plant
and, therefore, to negotiate any modifications of the agreement, that was being
terminated by its own language at midnight, would be pointless." Stumpf main-
tained that the agreement had not terminated, nor would it terminate at midnight,
•July 31, because of the automatic renewal clause contained therein. Dave Arca, a
member of the committee , then , to again quote Thurmann , "indicated concern about
597254-61-vol. 130-100
1570 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the shortness of [notice to the Steelworkers ] and also as to why [management was]
contracting our maintenance work ." Thurmann thereupon stated that Respondent
had only reached a definite decision to contract out the maintenance work to an
independent contractor on July 27; that as soon as he was informed of Respondent's
decision he passed the information along the the Steelworkers ' representatives so that
they would be in a position to discuss Respondent 's contract intentions with him;
that regardless of the bargaining contract's termination date he nevertheless would
have notified the Steelworkers that Respondent was going to contract the mainte-
nance work as soon as he was so advised . Thurmann then remarked that during
the bargaining negotiations in previous years he had , with the use of charts and sta-
tistical information , endeavored to point out "just how expensive and costly our
maintenance work was and how it was creating quite a terrific burden upon the
Emeryville plant" and that as late as 1958 he had stated to the negotiating com-
mittee, again with the aid of charts, Respondent's problem of high maintenance
costs. Thurmann also stated that certain other unions representing Respondent's
employees "had joined hands with management , thereby bringing about an economi-
cal and efficient operation," but the Steelworkers, even though asked to do so,
refused to cooperate in attempting to reduce maintenance costs.
Ferber then brought up the "short time" question. Thurmann reiterated the state-
ments he had just made to Area about the "high cost" problems management had in
the plant, adding that Respondent was convinced, after considering the matter for
"quite a period of time," that it was more economical to have some independent con-
tractor perform the maintenance work instead of continuing to perform that work
with its own employees. Thurmann also stated that if the employees or the Steel-
workers desired to discuss the maintenance work contract at some later date they
should say so and he would give the request due consideration.
When asked whether he would contact the various craft unions in an effort to have
the employees about to be terminated retained on the job, Thurmann stated that he
had already gone to the Central Labor Council Building and informed the business
agents of some of the various unions affiliated with the Labor Council about Re-
spondent's contract with Fluor.
Thurmann also stated at the aforementioned meeting that the men about to be
terminated should apply to Fluor for jobs because he had already told Fluor's
representative that some of the employees about to be terminated were very capable
maintenance men and that said representative replied that he "would be most happy
to interview them and discuss employment with them."
Thurmann refused Stumpf's request that Respondent modify the current labor
agreement so as to provide that all maintenance work to be performed under the
Fluor contract be given to members of Local 1304, stating, "we had entered into this
contracting of maintenance work for economy and efficiency of operation, and for
us to tie the contractor's hands in any fashion, shape or form would be senseless."
On July 30, copies _ of the following were distributed by Respondent to its
employees:
Nearly every month the cost of manufacturing the products of American
industry shoots up another couple of percentage points. In most industries,
and Fibreboard is no exception, stiff competition makes it impossible to pass on
these higher costs through increased prices. This "cost-price" squeeze has
forced many companies, and again Fibreboard is no exception, to face the
economic facts of life and control costs efficiently all along the line.
This cost control is vital to us at Fibreboard because it is one of the few ways
to assure the company and its more than 6,000 employees a future of greater
prosperity through more efficient service to its customers.
Here at Emeryville, the cost of doing maintenance work has grown steadily.
Studies during the past two years have shown that maintenance of our facilities
by an outside crew instead of by our own employees, would produce savings
that would reduce the cost of our Emeryville products and make them more
competitive.
Each of us is acutely aware of the implications of a decision to take this
action. We have reached this decision only after long and careful study of all
of the facts.
We are confident that maintenance employees affected by this action-who
are members of highly skilled and specialized trades-will have little difficulty
in finding new jobs in this time of great demand for skilled labor.
Fortunately, some of the employees affected will be able to share immediately
in retirement benefits, which will provide them right away with some con-
tinuing income.
FIBREBOARD PAPER PRODUCTS CORPORATION 1571
Additionally, we have prepared a program of termination allowances which
would be distributed on a basis of length of service. For those who will share
in retirement benefits, this termination allowance would be an added contribu-
tion to their income.
J. P. CORNELL,
Manager, Emeryville Floor Covering Plant.
E. W. TORBOHN,
Manager, Emeryville Insulation Plant.
W. L. MAFFEY,
Works Engineer, Emeryville Utilities Group.
E. J. VAUGHT,
Manager, Emeryville Paint Plant.
S. F. FRIDELL,
Manager, Emeryville Roofing Plant & Felt Mill.
About 6 p.m. on July 31, the Steelworkers established a picket line about Respond-
ent's Emeryville plant and it was still there at the time of the hearing.
Fluor's employees, although the written contract between Fluor and Respondent
(to be effective as of August 1) was not actually executed by Respondent until
August 4, started performing the maintenance work with the commencement of the
July 31 midnight shift.
On July 31, each of the 50 or so terminated maintenance employees was handed
a copy of the following:
Inasmuch as we have contracted out all powerhouse and maintenance work,
we will no longer need your services. Here is the pay check due today and you
will receive through the mails a termination allowance as shown on the per-
sonal statement memo.
Your pay check for this week will either be given to you at the close of the
shift today or put in the mail tonight.
On August 21, at the request of Robert Ash, the secretary-manager of the Central
Labor Council of Alameda (California) County, the mayor of Emeryville con-
ferred with Thurmann and five other Respondent officials, Ash, the Steelworkers'
publicity director, the president of Local 1304, and Emeryville's police sergeant,
in an effort to settle the dispute between Respondent and the Steelworkers. It will
serve no useful purpose to relate here at length what transpired at that meeting for
the only proposal made was Ash's suggestion that Respondent put the discharged
men back to work pending a determination by the Board or by the courts of the
question of Respondent's right to contract out the work. Thurmann, as he had done
when Ash had made the suggestion to him previously, turned it down.
B. Concluding findings
The primary and principal question presented is whether substantial evidence on
the record considered as a whole supports the allegations of the complaint, as
amended, that Respondent's change of operations and its discharge of about 50
maintenance employees because of such change were illegally motivated.
It goes without saying that an employer's right to close down his plant, or to lay
off his employees or otherwise to alter his employees' tenure and working conditions,
is circumscribed by the Act only insofar *as its exercise does not impinge upon the
employees' rights to organize and to engage in other concerted protected activities.?
Thus, it is well-settled that an employer is free to suspend operations for business
reasons which are not concerned with protected employee activity.8 On the other
hand, it is equally settled law that a lockout or layoff, prompted not by business
considerations, but by a purpose to defeat organization or other protected activities,
is prima facie a violation of the Act.9
Thurmann and Ben A. Wilson, Respondent's director of purchases, were two of
Respondent's officers connected, in one way or another, in bringing about the con-
tract which was eventually given to Fluor; they were the only witnesses who actually
knew the motives for contracting out the maintenance work. Each of them testified
directly and positively that the contract was made solely for economic reasons.
7 N.L.R.B. v. Jones 4 Laughlin Steel Corporation, 301 U.S. 1.
8 N.L.R.B. v. Goodyear Footwear Corporation, 186 F. 2d 913 (C.A. 7) ; The Atlas
Underwear Co. v. N.L.R.B., 116 F. 2d 1020 (C.A. 3).
s See Radio Officers' Union, etc. (A. H. Bull Steamship Company) v. N.L.R.B., 347
U.S. 17; N.L.R.B. v. Wallick t Schwalm Company, 198 F. 2d 477 (C.A. 3) ; N.L.R.B. v.
Somerset Classics, Inc., at al ., 193 F. 2d 613 (C.A. 2).
1572 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In substance , the credited testimony of Thurmann and Wilson regarding the
motives-and the, events leading up to the Fluor contract is as follows:
In 1954, Respondent being concerned over the high cost of maintenance of its
plant initiated a study, which continued into 1956, of its maintenance costs and of
the possibility of effecting economies by contracting out the work. The study
definitely indicated that savings might be effected. Because other important business
matters intervened, nothing was done about the study.
In late June of this year, Thurmann told George Burgess, who had recently
become Respondent's vice president in charge of 'manufacture, that the question of
contracting out the maintenance work had been under consideration and since the
contracts with the labor organizations representing the maintenance workers would
be terminating shortly, he would like an early answer with respect to Respondent's
desires in the matter.
Burgess immediately had the maintenance cost study brought up to date. This
study revealed -that,the maintenance costs of the plant amounted to approximately
$750,000 per year.
On or about July 14, Burgess requested Wilson to make a survey of the various
maintenance contractors with the idea in mind that Respondent might want to con-
tract out the maintenance work if such an arrangement would save it money.
Wilson's investigations led him to Fluor and to three other maintenance contractors.
On July 27, Respondent received from Fluor a written plant survey. On the
basis of this survey, coupled with discussions had with Fluor and the other
contractors, Respondent estimated its savings by contracting out the maintenance
work might run as high as $225,000 per year. Accordingly, Respondent decided,
on July 27, to give the contract to Fluor. Fluor was selected over the other con-
tractors mainly because of its experience, reputation, and size.
A draft of a proposed contract was prepared on July 30 and 31, and submitted to
Fluor on July 31, with a letter authorizing it to start work on August 3.
On August 4, the draft was revised and then signed by Respondent. Fluor's rep-
resentative.then took the signed agreement to Fluor's main offices, located in Los
Angeles, for review by Fluor's attorneys. The contract, bearing Fluor's signature,
was returned to Respondent on August 11.
The contract with Fluor is on a cost-plus-fixed-fee basis and is for a term com-
mencing at midnight, July 31, 1959, and ending at midnight, July 31, 1961, but is
terminable by Respondent on 60 days' notice.
At the hearing, the General Counsel and, in his brief, counsel for the Steelworkers,
vigorously attacked the adequacy of the business reasons advanced by Respondent.
The issue is not whether the business reasons advanced were good or bad, but
whether Respondent actually in good faith had business motives for contracting out
the work, or whether the change in operation was illegally motivated.
The General Counsel and counsel for the Steelworkers contend that Respondent's
real motive was to defeat the organizational activities of the employees and to oust
the Steelworkers from its plant. They base their arguments not only from what
they consider the weakness of Respondent's explanation of its economic reasons,
but from such things as (a) sequence of events, (b) the precipitate manner of ac-
celerating the execution of the maintenance contract, (c) delay in fixing a date for
a bargaining conference, and (d) refusal to bargain with the Steelworkers with re-
spect to the Fluor contract or termination pay.
As to (a), the credible testimony of Thurmann and Wilson clearly establishes that
for at least 5 years Respondent had under consideration some method whereby it
could reduce the plant' s maintenance costs. Thurmann, in June of this year, called
Burgess' attention to this fact. Burgess thereupon brought the cost study up to
date and had Wilson ascertain if the work could be performed cheaper by an inde-
pendent contractor. Wilson's investigation revealed that Respondent could save
about a quarter of a million dollars a year by allowing Fluor to perform the
maintenance work.
As to (b), the General Counsel and counsel for the Steelworkers base their con-
tention that Respondent's illegal notice in discharging the members of the Steel-
workers and hence ridding the plant of that labor organization is inferable from the
precipitate manner in which Respondent entered into the contract with Fluor. The
Trial Examiner does not believe that, because Respondent accelerated the mainte-
nance change in order to avoid a renewal of the contract with the Steelworkers,
which, by its terms, was about to expire, it necessarily follows that the original
decision to contract out the maintenance work was to defeat the Steelworkers or
was done for any reason violative of the Act. It is the motive for the decision to
contract out the work that is, material to this controversy rather than the motive for
accelerating the changeover. -
. FIBREBOARD PAPER PRODUCTS CORPORATION 1573
As to (c), Thurmann's delay in arranging a negotiating meeting was due solely to
the fact that he was awaiting management's decision on the question whether or not
to contract out the maintenance work. The record is barren of any indication that
Respondent or Thurmann manifested any present or past union animus, that it or he
was motivated by any improper consideration in delaying fixing a date for a negotiat-
ing meeting, or that it or he desired to avoid management's collective-bargaining
obligations. These findings are buttressed by the fact that in 1957 the first bargain-
ing meeting was not held until July 23; that the first 1958 bargaining meeting was
not held until July 13; and that the 1958 bargaining contract was not signed until
September 24.
As to (d), the credible evidence clearly establishes that the Fluor contract was
entered into for bona fide business reasons and not as a part of any scheme for evad-
ing any statutory obligation. Respondent therefore was under no obligation to bar-
gain with the Steelworkers for any unit of employees which included maintenance
workers because upon the execution of the Fluor contract it no longer had any
such workers in its employ. The services of the maintenance employees were
validly terminated when Respondent, in the exercise of its business judgment, de-
cided to contract out the maintenance work.
The General Counsel and the Steelworkers also contended that Respondent vio-
lated Section 8(a) (5) of the Act because it refused to bargain with the Steelworkers
regarding the maintenance employees' termination pay. The record does not sup-
port such a contention. On the other hand, the credible evidence discloses that at
the July 27 meeting Thurmann told Ferber and Stumpf that not only was Respondent
prepared to give the terminated employees whatever termination pay due under the
bargaining contract, but it was giving them additional allowances and benefits not
called for under said contract. Again at the July 30 meeting with Stumpf, Ferber,
and the negotiating committee, Thurmann brought up the subject of termination
pay and outlined what Respondent intended to give the terminated employees. No
objections or proposals were made by any Steelworkers' representative at either
meeting or since.. Relying heavily upon N.L.R.B. v. Lion Oil Company, 352 U.S. 282, the General
Counsel and counsel for the Steelworkers maintain that Respondent violated Section
8(d) of the Act because it did not serve the statutory notice of its intention to ter-
minate the bargaining contract. Said counsel seem to misconstrue the Court's opinion
in that case as well as the requirements called for by Section 8(d). As the Court in
the Lion case said:
In this case we are called upon to interpret Section 8(d) . .. In particular
we are concerned with Section 8(d) (4), which provides that a party who wishes
to modify or terminate a collective bargaining contract must "continue .
in full force and effect, without resorting to strike or lockout, all the terms and
conditions of the existing contract for a period of sixty days after . . . notice
[of his wish to modify or terminate] is given or until the expiration date of such
contract whichever occurs later."
Here, the contract terminated at midnight on July 31, not only by its terms but also
by reason of the Steelworkers' May 26 notice. It cannot be said, with any degree of
success, that the proposed contract changes submitted by the Steelworkers were not
substantial. In fact, the proposals were very substantial and affect each "cost" pro-
vision of the then existing contract. Under the circumstances, Respondent was
under no statutory duty to serve any notice called for under Section 8(d). Since
the Steelworkers' May 26 notice requesting bargaining meetings looking toward a
"new contract" was timely served, the automatic renewal clause of the contract in
question fell with such service, and the Trial Examiner so finds.
Upon the record as a whole, the Trial Examiner finds that the allegations of the
complaint, as amended, that Respondent had engaged in certain acts and conduct
violative of Section 8(a)(1),(3), and (5) of the Act, are not supported by substan-
tial evidence. Accordingly, the Trial Examiner recommends that the allegations
of the complaint, as amended, that Respondent violated Section,8 (a) (1), (3), and (5)
of the Act, be dismissed.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, the Trial Examiner makes the following:
CONCLUSIONS OF LAW
1. Fibreboard Paper Products Corporation, Emeryville, California, is engaged in,
and during all times material herein was engaged in, commerce within the meaning of
Section 2(6) and (7) of the Act.
1574 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2. East Bay Union of Machinists , Local 1304, United Steelworkers of America,
AFL-CIO, and United Steelworkers of America, AFL-CIO, are labor organizations
within the meaning of Section 2 (5) of the Act.
3. The allegations of the complaint, as amended , that Respondent has engaged
in and is engaging in unfair labor practices within the meaning of Section 8 (a)(1),
(3), and (5) of the Act, have not been sustained by substantial evidence..
[Recommendations omitted from publication.]
Murray Envelope Corporation of Mississippi and United Paper-
makers and Paperworkers , AFL-CIO.' Case No. 15-CA-1693.
March 27, 1961
DECISION AND ORDER
On July 19, 1960, Trial Examiner Reeves R. Hilton issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had not engaged in and was not engaging in the un-
fair labor practices alleged in the complaint and recommending that
said complaint be dismissed in its entirety, as set forth in the copy of
the Intermediate Report attached hereto. Thereafter, the General
Counsel and the Union filed exceptions to the Intermediate Report,
together with supporting briefs.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its power in connection with
this case to a three-member panel [Members Rodgers, Leedom, and
Jenkins].
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and briefs, and the entire record in
the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner with the following exceptions,
modifications, and additions :
1. The Trial Examiner found, and we agree, that the Respondent
did not discharge Arvis W. Shows because of his union activities in
violation of Section 8(a) (3) and (1) of the Act, but rather because
he entered the plant when off duty in violation of a plant rule, and
thereupon failed to report, as instructed, to Rhian,2 Respondent's
owner, the next day.
2. The Trial Examiner also recommended dismissal of the remain-
der of the complaint which alleged independent violations of Section
8 (a) (1). He found that : (a) various interrogations of the employees
by Respondent were not coercive and therefore not unlawful in line
1 Hereinafter referred to as the Union.
2 "Rhian" shall refer to L. E. Rhian , Sr., Respondent 's owner , herein , and not to his
son, L. E. Rhian, Jr., also an officer of the Company.
130 NLRB No. 163.