Hudson Transit Lines, Inc.

National Labor Relations Board - Board Decisions

Oct 9, 1968

173 N.L.R.B. 133 (N.L.R.B. 1968)

HUDSON TRANSIT LINES, INC. 133
Hudson Transit Lines , Inc. and Independent Bus
Transit Union
Hudson Transit Lines , Inc. and Transport Workers
Union of America , Local 225, AFL-CIO. Cases
22-CA-3009 and 22-CA-3067
2 In adopting the Trial Examiner 's conclusion that the Respondent's
announcement and institution of reductions in various employee
benefits violated the Act, we rely on Section 8(a)(1), and do not deem
it necessary to determine whether the conduct in question also violated
Section 8 (a)(3).
October 9, 1968
DECISION AND ORDER
BY MEMBERS BROWN, JENKINS, AND ZAGORIA
On May 10, 1968, Trial Examiner A. Norman
Somers issued his Decision in the above-entitled
proceeding, finding that the Respondent had engaged
in and was engaging in certain unfair labor practices
alleged in the complaint and recommending that it
cease and desist therefrom and take certain affirma-
tive action, as set forth in the attached Trial Exam-
iner's Decision. Thereafter, the Respondent filed
exceptions to the Trial Examiner's Decision and a
supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision,' the exceptions and brief, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner.'
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
Recommended Order of the Trial Examiner, as
modified herein, and orders that the Respondent,
Hudson Transit Lines, Inc., Mahwah, New Jersey, its
officers, agents, successors, and assigns, shall take the
action set forth in the Trial Examiner's Recom-
mended Order, as so modified:
1. Paragraph 1(b) of the Trial Examiner's Recom-
mended Order is hereby deleted, and paragraph 1(c) is
renumbered 1(b).
2. The last sentence in the first indented paragraph
of the notice, beginning "Nor WILL WE otherwise
discriminate .. " is hereby deleted.
The Trial Examiner at the hearing was Arthur Christopher, Jr.,
now deceased . A. Norman Somers was duly designated by the Chief
Trial Examiner to prepare the Trial Examiner 's Decision in this case. See
footnote 2 of the Trial Examiner 's Decision.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
A. NORMAN SOMERS, Trial Examiner- On July 18, 1967,
the General Counsel issued a complaint alleging that Respondent
engaged in unfair labor practices in violation of Section 8(a)(1)
and (3) of the Act.' The case was heard before Trial Examiner
Arthur Christopher, Jr , on September 21 and 22, 1967, in
Newark, New Jersey, and briefs were thereafter filed with him
by the General Counsel and the Respondent On December 9,
1967, Trial Examiner Christopher died before completing his
decision. The parties waived a hearing de novo and agreed that
a decision be made and issued by a newly designated Trial
Exanuner on the basis of the record made before the original
Trial Examiner. Thereupon I was duly designated as the Trial
Examiner in the case 2
On the entire record and on consideration of the briefs, I
hereby make the following
FINDINGS OF FACT
1. THE BUSINESS OF THE EMPLOYER
Respondent is a Delaware corporation, with its principal
office and place of business in Mahwah, New Jersey It is
engaged there and in other terminals in the States of New York
and Pennsylvania in the transportation of passengers and the
performance of related services Its gross annual revenue
exceeds $50 ,000. The parties agree and it is hereby found that
Respondent is engaged in commerce within the meaning of the
Act.
II. THE LABOR ORGANIZATIONS INVOLVED
TWU and IBTU (supra fn. 1, and infra, fn. 4) are labor
organizations within the meaning of the Act.
1 The complaint is based on charges filed on February 6, 1967, by
Independent Bus Transit Union (hereafter IBTU), and on April 11,
1967, by Transit Workers Union of America, Local 225, AFL-CIO
(hereafter TWU). The caption in the proceedings did not include the
designation "AFL-CIO" in the references to TWU . The parties have
since indicated that the caption can be deemed corrected to include the
designation.
2 The correspondence between the Office of the Chief Trial
Examiner and the parties from the time of the notification of the death
of Trial Examiner Christopher to the designation of the instant Trial
Examiner has been included in the official record, as follows : (a) Letter
of December 27, 1967, by the Chief Trial Examiner to all parties, (b)
Letter of January 3 , 1968 , by James E . Fagan, counsel for Respondent,
to the Chief Trial Examiner , with copies to counsel for all parties, (c)
Letter of February 12, 1968, by the Regional Attorney for Region 22
of the NLRB to counsel for Respondent , with a copy to Associate Chief
Trial Examiner Lindner , (d) Letter of February 15, 1968, by the Chief
Trial Examiner to counsel for Respondent , with copies to counsel for all
the other parties, (e) Letter of February 28 , 1968, by counsel for
Respondent to the Chief Trial Examiner , with copies to all parties, (f)
Letter of February 29 , 1968, by the Chief Trial Examiner to counsel for
Respondent , with copies to all parties.
173 NLRB No. 13
134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
III. THE ALLEGED. UNFAIR LABOR PRACTICES 2. The election proceeding
A. Issue
The issue in essence is the significance of Respondent's
announcing and then instituting certain economic reductions
(a cut in pay rate and elimination of various fringe benefits) at
a time when a representation proceeding under Section 9 was
still undetermined.
B. The Facts
1. Background
The rivals were TWU, the incumbent, and IBTU, which filed
the election petition Respondent has had contractual relations
with TWU for many years. The series of contracts between
Respondent and TWU, including the one that was current
when IBTU filed the representation proceeding here involved,
were all for terms whose starting and expiration dates were in
mid-January.
Accounting for the importance Respondent attaches to the
January date is the seasonal character of its operations Its
passengers, in the main, are summer vacationers. Accordingly,
Respondent operates at a profit only during June, July, and
August, and at a loss the remaining months of the year Under
its certificate of convenience from the Interstate Commerce
Commission, Respondent must furnish reasonably adequate
service to the public throughout the year, and also keep itself
in sound economic condition to be sure it can render that
service. The advantage served by a contract ending in January
is the leverage afforded by the fact that negotiations begin well
before the summer season. Negotiations in the winter assure
Respondent against the likelihood of a strike in the crucial
summer season Also, negotiations during the winter strength-
en Respondent's power to resist the employees' demands and
by the same token, weaken the effectiveness of the bargaining
power in making these demands The employees would have a
corresponding negotiating leverage under a contract that
started (and ended) nearer to the summer. But though the
employees sought such a date in the past, the contracts up to
the time here involved had a starting date beginning and ending
in mid-January.
Respondent's and TWU's bargaining relations over the years
have been relatively stable. Before each contract expired, they
came to terms on a new one. In only two instances had there
been a "hiatus," and in each instance for no more than a week
or less 3 During both of them, Respondent continued the old
terms in effect until the new terms were mutually agreed upon
and signed.
a Respondent's expressed anxiety about an early
completion of the election proceeding in order that
negotiations for a succeeding contract begin early
In the last week of October 1966, Respondent and TWU
had exchanged letters looking toward negotiation of a new
contract to succeed the present one expiring January 15, 1967
On October 27, IBTU (an independent organization comprised
of Respondent's employees (infra, fn 4)), wrote Respondent
claiming it represented a majority of the employees, and on
October 28, it filed the Section 9 election proceeding
From the outset of that proceeding Respondent urged
expedition so as to obviate the "serious economic problems"
that would otherwise confront it. Thus, at the "informal
conference" in the Board's Regional Office on November 10,
John F. X. O'Brien, attorney for Respondent, offered to
consent to an election, saying that unless the election issue was
speedily resolved, "the Company has serious economic prob-
lems," for it "counted on the summer revenues to offset these
losses [of the remainder of the year]." The two rival
organizations failed to agree, and the matter was set for formal
hearing on November 15 At that hearing, during off-the-
record discussions, Attorney O'Brien repeated that the Com-
pany was anxious that the representation issue be brought to a
head as soon as possible, because the labor contract with TWU
was expiring January 15, and the Company needed assurance
for its summer operations.
The Regional Director issued his Decision and Direction of
Election on December 5.4 On December 9, there was another
"informal conference," this time to discuss the election date
and whether the ballots were to be by mail As had O'Brien at
the previous meetings, Irwin Flateman, president of Respond-
ent, urged at this meeting that there be a speedy resolution of
the election issue, since time was running out and the
Company had its "economic problems "
b Respondent 's announcement, at the end of the
initial (but as yet inconclusive) tally of the ballots,
that it would institute "economies"
On January 9, all parties were at the Regional Office to
learn the result of the count on the ballots The tally showed
TWU, the incumbent, to be in the lead but not by enough to
dispense with the need for passing on the challenged ballots.5
Also, IBTU, the petitioner, was contemplating filing objections
to the conduct of the election (which it did shortly after-
wards). When informed that it would take at least a month
before the post-election steps would be concluded, President
3 The first was a work stoppage , and the parties came to terms on a
new contract in less than a week. In the other instance, the parties,
toward expiration of the contract, agreed to an extension, which had
been specifically requested by the mediation authorities. The parties
came to terms in just a few days.
4 Official notice is taken of the formal proceedings in Case
22-RC-3486. The Decision and Direction of Election indicates that
the parties turned out to be in basic agreement , on the bargaining unit,
as follows:
All full-time and regular part -time motor coach operators and
maintenance employees of the Employer, including supplementary
or seasonal operators and the stock room clerks, but excluding all
office clerical employees, professional employees , managerial em-
ployees, dispatchers , all other employees, guards and supervisors as
defined in the Act.
That Decision also indicates that TWU had challenged IBTU's status
as a labor organization , because there was no evidence that IBTU had
officers or had dealt with employers. IBTU's status as a labor
organization was upheld, because it satisfied the requirements of
Section 2 (5) of the Act . (It exists "for the purpose , in whole or in
part ," of dealing with employers concerning working terms, and
employees participate in it, whether or not it has officers )
5 The tally was as follows. 104 for TWU, 99 for IBTU, 2 for neither,
and 9 undetermined challenged ballots
HUDSON TRANSIT LINES, INC
Flateman, as he testified, "was just besides [himself] frankly
He added
I told them that unless somethings (sic) were done,
unless the company had the assurance that we were going to
be operating in the summer that we would have to make
certain economic adjustments I don't know exactly what
words I used, but certainly indicating that we would have to
start to curtail some of our operations over the winter
months when we constantly lose money.
On January 13, the Company, because of rumors that
employees thought "adjustments" were going into effect the
day after the contract would expire, issued the following
NOTICE TO ALL EMPLOYEES
In view of the uncertainties of the present situation the
Company has been placed in a position making economies
necessary.
However, to avoid, if possible, any hardships on our
employees, the Company will postpone such economies
until Sunday, February 5, 1967.
It is our hope that by that time the present uncertainty
will be resolved and a new contract mutually agreed upon
On February 2, Respondent issued a letter to all officers
and employees. The letter specified the "economies" the
Company was putting into effect February 5 for all members
of the personnel, whether management personnel or employees
in or outside the bargaining unit The "economies" as specified
in the letter were as follows
1 Elimination of Company contributions to Blue Cross,
Blue Shield, Major Medical and Life Insurance Programs
Those interested in continuing such coverage must author-
ize the company on the enclosed form to deduct from
wages the amount of such premiums
2 A reduction of 10% of gross wages of all employees
whose gross weekly wages exceed $100 00 This reduction
will not reduce such gross wages to an amount less than
$100 00, for a full week's work
3. Elimination of all accruals for vacations and paid
holidays.
The letter included a recital of the reasons for the
reductions It stated that the Company had "economic
problems" that required solution. It pointed to the fact, earlier
mentioned, that the Company derives the bulk of its revenues
in the summer months and if deprived of them, it could not
meet expenses over a 12-month period. It indicated that the
Company had assumed the present pay scale on the basis of
6 In his testimony , President Flateman acknowledged that neither of
the labor organizations had indicated that it would strike , nor had he
asked either or both whether they would do so He further acknowl-
edged that he did not fear a strike , but explained that "without
knowledge that we would have a bona fide contract with one of the
unions, that there was a possibility that the Company would not be
operating in the summer months when they make the profits to offset
the severe winter losses ." He acknowledged that a delay in the
representation proceeding was a factor contributing to its action. (It
should be added that the expired contract had included a no-strike
clause.)
7 Of the challenges , three were overruled and counted . The final
tally showed TWU to be the winner by the vote of 106 , against 100 for
IBTU.
All of IBTU 's objections to the conduct of the election were
overruled See Supplemental Decision and Order in Case No.
22-RC -3486 (supra, fn 4 ). This included an objection that Respond-
135
the assurance of its summer operations, and that under the
current situation it had no such assurance. It stated
Present uncertain conditions relating to certification by
the National Labor Relations Board of the Company's
union employees and the question of who will be certified
and with what union the Company can negotiate, have left
the Company in a position where it has no assurance that it
will be in operation during those critical summer months
and able to obtain those needed revenues Therefore the
Company must cut the suit to the cloth it has and reduce its
operating expenses to the point where they can be met by
current revenues.
The letter advised that the Company had asked its auditor to
make a study of all items in which expenses could be reduced,
and that "pending such report and the action that will
necessarily follow the Company is required in the interest of
self preservation to make the following economies dealing with
salaries and wages of officers and employees in all categories "
The letter then specified the reductions (which have been
quoted at the outset of the treatment of this letter), and added
that as soon as the Company received and analyzed the
auditor's study, it "will further advise you all." It concluded
with the exhortation that all of us "would like to see an end to
uncertainty in order to get on with the vital business of
planning sound continued operation."6
3. Negotiations (after conclusion of certification
proceeding) culminating in new contract and less than total
restoration of the "economies"
On February 5, Respondent put into effect the reductions
described in its letter of February 2 The election proceeding
was concluded on March 31, when TWU, the incumbent,
having been declared the winner, it was formally certified 7
Negotiations between TWU and Respondent began April 7
The negotiators for TWU stated "they would not bargain with
this cloud over their head," and demanded that Respondent
restore all of the reductions from the date they were
instituted The Company said it "still did not know whether
we were going to operate during the summer months "
However, it offered to restore all the reductions from the date
they were made, provided the effective date of the new
contract was retroactive to January, as in the past 8 TWU
refused, saying that the men had waited "too long" for a
starting date corresponding to the present, and that they
would even like to make it effective as of the date negotiations
would be completed. The effective starting date as finally
ent had stated it would reduce wages (referring to then existing
announcement that "economies " would be made) The Supplemental
Decision notes that since this statement was made "after the Tally of
Ballots issued , [ it] could not raise substantial and material issues with
respect to conduct affecting the results of the election " IBTU filed a
request for review , which the Board denied as not raising substantial
issues The Supplemental Decision noted, however, that IBTU had
interveningly , filed a charge of unfair labor practices on February 6
(supra , fn 1) (That was the day after Respondent made the wage and
fringe reductions described in its February 2 letter ) The Supplemental
Decision (at its footnote 21) noted that the unfair labor practice charge
was under investigation , with the implication that this was a separate
issue from the objection concerning the results affecting the election.
8 The retroactivity was to be comprehensive. All terms, when agreed
upon, were to be retroactive to the effective starting date of the new
contract , i e., the increases in hourly rates would be retroactive to the
effective starting date , and so would the fringe benefits.
136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agreed on was March 31, the date of the certification, and this
was embodied in the memorandum of agreement executed by
both parties on April 22, and in the formal contract executed
May 2.
The negotiations regarding the reductions were completed
on the following basis: Respondent restored the vacations and
paid holidays in full from February 5, the date they had been
eliminated However, the other reductions (i e the 10 percent
cut in pay and the elimination of the contribution for health
and life insurance) were restored only for the period beginning
March 31, but not restored for the period between February 5,
when it was put into effect, to March 31, the effective starting
date of the new contract. TWU indicated, however, that it was
not waiving its position that the reductions were illegal from
their inception 9
C Conclusionary Discussion
(1)
Paradoxically, the basis on which the General Counsel
condemns the conduct is relied on by Respondent as providing
its exoneration. The General Counsel's position is that by
announcing and then instituting the reductions while the
representation proceeding was not yet concluded, Respondent
interfered with the rights of the employee to determine their
own bargaining representative in violation of Section 8(a)(1).
The General Counsel further views the reductions as discrim-
inatory and as having the intent or necessary effect of
discouraging membership in either or both labor organizations
in violation of Section 8(a)(3) Respondent on the other hand,
avows it did not act with any antiunion motive, and if its
conduct could nevertheless be deemed to have in some way
interfered with the employees' rights-which it disputes in any
events-this is overbalanced by justifiable action in protection
of its legitimate economic interests.' 0
(2)
As I read General Counsel 's position , it is that Respondent's
drastic reduction in the employees ' earnings stemmed from the
fact that the representation case was still pending, and that
this, whether Respondent intended it or as the employees
would naturally view it, was a reprisal for employees engaging
in protected activity Respondent , to be sure, imposed these
reductions upon all the personnel , but it was in response to the
protected activity of the employees in the bargaining unit
(supra, fn. 4) that Respondent made these reductions It was
discriminatory , since the representation proceedings and the
consequent suspension of negotiations pending its completion
accounted for the wage reductions that would otherwise not
have been made. Visiting the loss on those outside the
bargaining unit as well did not make it nondiscriminatory
toward those within the bargaining unit . It simply extended
9 As appears (supra, fn. 1), IBTU filed its charges of unfair labor
practices on February 6, which is the day after Respondent made the
reductions (supra, fn. 7)
TWU filed its charges on April 11. This was after it was certified in
the representation proceeding and shortly after the negotiations with
Respondent for a new contract began.
The charges of IBTU claimed violations of 8(a )( 1) and (3). TWU, in
its charges , claimed that Respondent violated Section 8(a)(1), (3) and
(5) of the Act. The claim of an 8(a )( 5) violation was disallowed by the
the discriminatory conduct to those outside as well as those in
the unit.
The General Counsel invokes to employees engaged in a
representation proceeding, principles comparable to those
applied where employees have engaged in lawful strike
activity " In substance, under the rationale articulated in
Great Dane (supra, fn 11 at 34), which the General Counsel
quotes, there are two principles which the General Counsel
deems applicable here. The first is that the Respondent's
conduct in imposing the reductions was "inherently destruc-
tive of important rights," from which an antiunion motive may
be inferred without need for the General Counsel to prove it.
The second is that even if the "adverse effects" on the
employees' rights were "comparatively slight," there was
nevertheless a violation, unless Respondent has come forward
with "legitimate substantial business justifications" for its
conduct, in which event, the General Counsel would have had
to establish that Respondent was wrongfully motivated. The
General Counsel asserts that Respondent has not met the
"substantial business justification" requirement, because Re-
spondent was not warranted in reducing the employees'
earnings beginning in the winter as an offset against a strike in
the summer, which was neither imminent, nor threatened, nor
portended. The General Counsel further asserts that Respond-
ent, in making these reductions, was not truly motivated by a
concern about a summer strike, so much as by a desire to have
negotiations start in the winter as before, or that failing, to
reacquire in the new contract a winter starting date, as in the
past The result, as the General Counsel contends, is that there
was a violation of the Act, whether its "adverse effects" were
"destructive" or "comparatively slight "
(3)
If we telescope events to the ultimate-i e., the stage when
the representation proceeding was concluded and the new
contract negotiated, it can be said to have hardly had a tearful
ending As a consequence of the representation proceeding, the
negotiations which used to begin in the late fall or early
winter, now began in the spring. As stated before, the
employees had sought to accomplish this in the past by a
contract which would expire in the spring instead of the
winter, but until then to no avail. Now they achieved it as a
result of the suspension of the negotiations which had been
brought about by the representation proceeding. To be sure,
the employees did not plan it that way, but the result favored
them nevertheless President Flateman testified that the
increases the employees received under the new contract
exceeded those of prior contracts. This is not denied. He also
testified that the higher increases they received this time were
the result of the fact that negotiations began so much nearer to
the summer than in the past. The Trial Examiner excluded this
last, but Respondent in its brief urges this as a rational
inferen'ce Since, as is not disputed, each side (Respondent, on
General Counsel . (See the Regional Director's letter to the TWU, dated
July it, 1967 General Counsel Exh. 2.) The General Counsel's
complaint alleged violations only of Section 8(a)(1) and (3).
10 Respondent further avers that its contract negotiations with TWU
after conclusion of the representation proceeding constituted an accord
which wiped out such offense as might otherwise be imputable to
Respondent.
i 1 N.L R.B. v. Ene Resistor Corp, 373 U.S. 221, N L R.B. v Great
Dane Trailers , 388 U S. 26
HUDSON TRANSIT LINES, INC 137
the one hand, the employees on the other) has the advantage
in the negotiations, depending on the remoteness or proximity
of the negotiations to the summer months, Respondent's
inference is hardly implausible That is to say, we may assume
that the greater increases the employees obtained under the
new contract over those in prior contracts reflected the
increased bargaining power of the employees because negotia-
tions in this instance began nearer to the summer than
negotiations of prior contracts Whether that was the whole
reason for the increase or had still other reasons (such as the
not altogether inconceivable one that the prospects of the
vacation trade the forthcoming summer were thought to be
greater than in past summers) one does not know. But
whatever the increase and its reason, Respondent's additional
contention that because of this increase, the employees really
had received restitution for the portion of the reductions made
in February that Respondent refused specifically to restore to
the employees (unless they agreed to an effective January date
for the new contract) strikes one as a non-sequitur. As
indicated (supra, fn. 8), each was a separate item of negotia-
tions The rates under the new contract were one item The
restoration of the reductions made in February and the
condition imposed upon full restoration (that the contract be
made retroactive to a winter date as before) was another item.
This in any event, is a matter to be deferred pending discussion
of whether Respondent's conduct in January and February
constituted violations as of the time they occurred
(4)
As matters stood when Respondent, in January and
February, respectively announced and then put these "econ-
oimes" into effect, the employees found their earnings
drastically curtailed and their fringe benefits of highest
importance taken from them in consequence of a proceeding
in which the drivers and maintenance men (supra, in 4) were
engaged, and which the Act protects. The fact that these
reductions were visited upon all the employees hardly light-
ened the impact upon the employees who were engaged in the
representation proceeding. Since it was out of this proceeding
that Respondent's conduct flowed, the employees would tend
to think twice before again engaging in a representation
proceeding In any event, as the General Counsel puts it, that
kind of a loss in earnings and benefits because of a representa-
tion proceeding that was still pending "could effectively
inhibit any change by employees of their bargaining represen-
tative .s1 2
Unexplained, the conduct as of the time it occurred
offended the employees' rights, protected by the Act, to
engage in a representation proceeding, thereby violating
Section 8(a)(1), and to the extent that this meant losses in
their earnings which otherwise would not have happened, it
would tend, as stated (supra, fn. 12), to alienate the employees
from the labor organization that accounted for the proceeding
that brought on the travail-the petitioning IBTU Also, insofar
as such action would tend to hinder the bargaining process that
was then reasonably in prospect, it would discourage member-
ship in the exclusive bargaining representation, as ultimately
determined, in violation of Section 8(a)(3) All of this last,
however, would be derivative of the underlying offense-the
toll Respondent levied in the employees for engaging in a
representation proceeding We come to Respondent's justifica-
tion for its having made the levy.
(5)
Respondent's justification has the anomolous aspect, as
earlier stated, of being based on the very representation
proceeding itself The proceeding had reached the stage where
the contract had now expired, and there was still no bargaining
representative selected with which to conduct negotiations,
and so as Respondent put it in its letter of February 2,
Respondent "has no assurance that it will be in operation
during these critical summer months," with the result that "it
must cut the suit to the cloth it has and reduce its operating
expenses to the point they can be met by current revenues."
However, the very nature of Respondent's operations is
such that until June, the revenues are less than the expenses
Yet not until the events here involved had Respondent ever
before curtailed employees' earnings to overcome the custom-
ary and traditional operating losses that precede the summer
months. Further, the expression Respondent employed to
describe the current situation, that "it must cut the suit to the
cloth it has" is hardly accurate Respondent's own records
show a consistent net operating profit at the end of each
calendar year, including 1966. And Respondent's auditor, who
according to the letter of February 2, was asked "to make a
study" which Respondent was then awaiting, testified that
Respondent as of February 1967 "definitely" had a surplus,
though he could not yet state how much. So the "cloth it
ha [d] " in early 1967 amply met the "suit."' 3 And in cutting
these employees earnings nevertheless, Respondent was pro-
jecting itself into a situation envisaged for nearly a half year
later And it projected it on the basis of nothing that was
12 The Board has held that where an employer changes working
conditions even after an election and during the postelection stage of a
representation proceeding , it could still be a violation depending on the
circumstances . The basic test , as stated, is whether the change was
"because of economic circumstances unrelated to union organization,"
in which case the employer is exonerated or because "of the union's
presence ," in which case there is a violation . See McCormick Long-
meadow Stone Co., 158 NLRB 1237, 1242. Compare Champion
Pneumatic Machinery, 152 NLRB 300. See also Ambox, Inc., 146
NLRB 1520, enfd. as modified 357 F.2d 138 (C.A. 5). These cases
involved the validity of the employer 's grant or promise of benefits
during the postelection stage, based on whether the purpose or
necessary effect of the employer 's conduct was to alienate employees
from the union . This is not the precise kind of situation before us. The
relevance in the cited cases is not in their precise content but in their
implications . The case before us is one concerned not with Respond-
ent's acting to help or harm either of the rivals or the two in
combination , so much as to infringe, whether in intent or as a necessary
consequence , on the protected right of the employees to engage in a
concerted activity (a representation proceeding), which is concerned
with the employees ' freedom of choice in the selection of their
bargaining representative . Insofar as the depravations visited on the
employees in that situation could be said to discourage membership, it
would naturally be the organization which brought the proceeding and
continued it by its postelection challenges and objections-the peti-
tioning IBTU . Also, as later appears, the conduct insofar as it was
naturally calculated to obstruct the bargaining process would discourage
membership in the exclusive bargaining representative whoever the
ultimate winner.
13 This is quite unlike Jordan Bus Co., 107 NLRB 717, on which
Respondent relies, where the employers "found themselves in a
hazardous financial situation at the time the reduction was announced
and effectuated. " (Emphasis supplied.)
138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
either imminent or impending or even probable. President
Flateman in his testimony (supra, fn 6), based the reductions
that Respondent made at the beginning of the year solely on
the mere "possibility" that Respondent would not be oper-
ating in the middle of the year Indeed, its letter of February 2
states that it was now reducing the employees' pay to
correspond to the current revenues solely because it "has no
assurance" that it will operate in the summer, which is, in
effect, to say that it was not certain in January or February
that there would not be a strike in June or July.
But a strike presupposes negotiations in which the parties
have fallen apart It is not an event which is self-creating
because summer is coming or has arrived There was every
reason to expect, in view of the nature of initial tally on
January 9 (supra, fn 5), that there would be a collective-bar-
gaining representative determined and that negotiations would
begin reasonably before the summer-as indeed happened.
Respondent, in making the reductions on the basis of the
"possibility" of a strike in the summer, was thus projecting
itself into the following sequence (a) the bargaining represen-
tative would present its demands, (b) Respondent would deem
them unacceptable, (c) the bargaining representative instead of
yielding and trying to reach an accommodation will strike-and
there would go our summer revenues on which we depend for
making out during the calendar year.
was over the date to which an expired contract was to be
extended. The union there insisted on 6 months, which would
have meant that negotiations would begin at the peak of the
employer's business season (likewise seasonal as here) The
employer insisted that the extension be for a longer period, so
as to avoid being confronted with negotiations that began at
the peak of the employer's business The differences there are
at least twofold the expiration date of the extension of the
contract had been fully negotiated and reached the point of
impasse, secondly, the negotiations, throughout the years of
the bargaining relationship had consistently culminated in a
strike Here they had (with a very brief exception, supra, fn.
3), invariably ended in agreement
Respondent finally falls back on the fact that when it made
the reductions here, the bargaining representative had not yet
been determined so that there was no one to negotiate with.
That, however, does not do away with the fact that Respond-
ent was not here acting to meet a present economic exigency
but one predicated, as stated, upon the outcome of negotiating
that would take place Respondent was assuming the culnuna-
tion of a sequence that had not even had a beginning, and on
no other basis than that it had "no assurance" that there
would be not such a culmnation-a summer strike
(7)
(6)
Assuring that Respondent genuinely intended these wage
reductions it made in February as an economic hedge against a
possible strike in June or July, the tenuous nature of that
possibility is not commensurate with the drastic character of
the action and the overwhelming probability of its effects on
employees' protected rights when the action was taken. Even if
the disproportion between the action taken and the apprehen-
sions claimed had a more rational basis, Respondent would not
now have been justified in exerting that kind of economic
pressure to meet the ultimate in a negotiating sequence, to wit
a strike, before even the first step in that sequence had started.
Respondent relies heavily on the doctrine in American Shi,i
Budding. 14 The employer there, after an impasse in negotia-
tions with the bargaining representative, engaged in a lockout
for the sole purpose of achieving the economic objective which
the union resisted during the negotiations However, these
steps had already taken place there had been negotiations
between the employer and the bargaining representative, the
bargainers were hopelessly apart, and the employer locked out
the employees with the conveyed understanding that they
would all go back with full seniority once that economic issue
was resolved in the employer's favor. The inference Respond-
ent seeks to draw from American Ship is that the employer
may validly exert economic pressure to realize any bargaining
advantage so long as it is not motivated by an antiumon
purpose and the employer has not otherwise violated a
protected right The parallel at once falls because the depriva-
tions visited upon the employees here stemmed from the
protected activity in which they were engaged-the choice of a
bargaining representative The subject on which the parties in
American Ship fell apart (and on which Respondent relies
heavily as an analogy here) is that the dispute in American
Ship, which the employer sought to resolve by the lockout,
The discussion until now has assumed that the reductions
Respondent made were in fact intended by it as an offset
against a summer strike And, as stated, that furnished no
justification for its actions even if that had been the true
reason for its action. The record rather seems to militate
against that as Respondent's actual reason. When Respondent,
as far back as the start of the representation case in early
November, urged an early end of the representation proceeding
because of "serious econorruc problems" otherwise encoun-
tered, it could hardly have meant problems encountered by an
actual strike so much as problems encountered by a more
effective bargaining power by employees nearer the summer
than that in the winter. That explains why Respondent was
anxious to have the representation proceeding (which by its
very filing held up negotiations that had just gotten under way
with the incumbent TWU) end quickly so as to reduce to a
minimum the customary start of negotiations in relation to the
summer Consistent with it was the very use that Respondent
made of the earnings' reductions in the ensuing contract
negotiations after the representation proceeding ended. Re-
spondent was now again dealing with the incumbent TWU with
which it had enjoyed stable relations over nearly a score of
years. So Respondent now had every reasonable assurance that
its operations would continue this summer as in the past Yet
though Respondent has professed that these reductions were
made as an offset to a putative summer strike, Respondent did
not restore these reductions as TWU requested at the outset,
but used these reductions to trade for a contract with a
January starting date as before And, as appears, though it
restored the vacations and paid holiday accruals from their
inception, and restored the other reductions retroactively only
from the period of the effective date of the new contract, it
did not restore them for the intervening period from February
5, when they were put into effect, to the date of the new
contract.
14
American Ship Building Co. v. N.L.R.B, 380 U.S. 300.
HUDSON TRANSIT LINES, INC.
Respondent estimated the amount of the unrestored sum
(presumably of the employees involved in the bargaining unit)
at about $15,000, and indicated that that too was good
money But it was money that Respondent nevertheless
offered to restore to the employees if they would but agree to
make the contract retroactive to the winter as before. And it
offered the employees even more money in the form of having
all the new terms, including the increase in hourly rates,
retroactive to January if they would agree to make that the
beginning date of the new contract.
This brings us to the view expressed by President Flateman
at the hearing and by Respondent in the brief, (described
earlier in our conclusionary discussion-item (3)) that the
increases the employees obtained under the new contract
exceeded those obtained under all the prior contracts, and that
that overcame, and thereby restored in all but the legal or
technical sense, the totality of the reductions from their
inception, including those for the period from February 5 to
March 31 that Respondent refused specifically to restore. In
essence, Respondent views the employees' increases in 1967
under the leverage of negotiations that began in the spring, as
losses that Respondent incurred because this time it had not
been able to bargain through strength as before, when
negotiations had begun at a period far remote from the
summer It was the "economic problems" arising from the loss
of its prior bargaining leverage that the fair sense of the record
shows Respondent sought to overcome by the reductions it
instituted in February, and it was the reacquisition of that
advantage for the future that Respondent sought to achieve by
the reductions made.' 5
So the sense of the record indicates that what Respondent
was seeking to achieve by these reductions was its use in later
negotiations to induce the employees to agree to a January
starting date for the new contract. Had Respondent made
these reductions when the bargaining representative had
already been selected but before any negotiations had yet
taken place, it would have been a violation of Section
8(a)(5)-the reason for its not being alleged as 8(a)(5) was
(supra, fn. 9) that the representation case had not yet been
concluded when Respondent made these cuts But the selec-
tion of the representative was in the offing and the reductions
contemplated the use of that money to affect the subject
matter of future negotiations-whether it be the summer strike
of whose avoidance Respondent said it had "no assurance," or
the reacquisition in the new contract of a winter starting date
as in the past In either instance it provided no valid
justification for the invasion of the employees' protected right
to engage in a representation proceeding without reprisal or
threat for engaging in it.
15 Further tending to support the inference that the reductions were
aimed at an effort to reacquire the January starting date for its contract
rather than to provide an economic hedge against the possibility of a
summer strike is, first, that Respondent made no "economies" other
than wages taken from the employees Secondly, though Respondent, in
its letter of February 2, claimed no other "economies" were feasible
except through reduction of its labor costs, the record shows that it
increased labor costs by taking on 16 new employees in the bargaining
unit for the period from February 5 to May 1. The figure was based on
TWU's own seniority roster of employees in the bargaining unit, and
though Respondent sought to undermine that figure by indicating that
TWU had no evidence concerning how many replacements they repre-
sented , Respondent did not itself supply any figures of its own, though
(8)
139
The basic violation here as stated was an interference with
the employees' protected right to determine and freely choose
their bargaining representative Calculated as it was to obstruct
the bargaining process, it was an act of discrimination which
inherently discouraged membership in the exclusive bargaining
representative, whichever of the rivals it might turn out to be.
This is so whether the reductions were made as an economic
nest egg to meet a possible strike in the summer, as
Respondent claims, or as the facts would seem more pre-
ponderantly to indicate, to use these moneys as inducements
to the employees to return to the January starting date as
before In either instance, there was no "substantial business
justification" for the action taken, with the result that
Respondent's actions offended Section 8(a)(1) and (3) without
regard to whether Respondent was subjectively motivated to
bring about the interference and discouragements that flowed
from its actions. On the issue of actual motivation, Respond-
ent's attributing the reductions to an intended offset to a
possible strike-even if not providing a valid justification if
genuinely entertained-turns out on the facts to have been a
cloak for its actual objective, which was to use the moneys
taken from the employees to buy back a January starting date
as before. This bears on the genuineness of its motivation, for
Respondent must have known and actually intended the
normal consequences of its actions and thereby have acted
with an antiunion motive. These involved inroads on the
employees' right under the Act in a representation proceeding
to determine their choice of representative without being
threatened or penalized for doing so I accordingly find and
conclude that Respondent in making these reductions inter-
fered with, restrained and coerced its employees in the exercise
of their rights under Section 8(a)(1) and discouraged member-
ship in a labor organization in violation of Section 8(a)(3).i 6
IV THE REMEDY
The cease and desist requirement should be confined to the
specific violation found In essence, it will be a recommenda-
tion that Respondent refrain from interfering with the rights
of employees to engage in a representation proceeding by
threatening to and changing their working terms in order to
discourage them from engaging in such a proceeding.
As to the affirmative remedy, there is the matter of whether
the employees should be made whole for the reductions of
their earnings to the extent that they were not fully restored.
As stated, Respondent thinks the employees really got all that
money back because of the wage increase they received in
it was itself in a peculiar position to do so Additionally, Respondent
attributes the new hirings to its continuous passenger service require-
ment under the certificate of convenience. Nothing apparently reflects
the pessimism toward summer operations except the premise asserted
for the drastic wage reductions.
16 During the hearing, the Trial Examiner struck certain additional
testimony of Company President Flateman and Attorney O'Brien to the
effect that with the expiration of the contract expiring on January 15,
1967, Respondent faced a genuine economic problem. This was
basically repetitive of what had been fully testified to and does not add
to what is already in the record . The answers as proposed would not
have changed the results and Respondent was not prejudiced by the
ruling.
140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
comparison with the less generous ones of the previous years
Respondent can hardly claim to have made these wage
increases in order to achieve a restoration of the earnings'
reductions The wage reductions, as President Flateman
claimed at the hearing and Respondent urges in the brief,
reflected the bargaining effectiveness of the employees. There
is no specific evidence as to what altogether accounted for
them Whether it was due to Respondent's anticipating an
increase in the size of forthcoming vacation trade over prior
summers, or to the fact that the employees had greater
bargaining effectiveness in the spring than they would have had
in the winter, or a combination of the two, the increases were
one thing, and the reductions visited on them on February 5,
were something else again When Respondent proposed that
the new contract be retroactive to January the retroactivity as
stated (supra, fn. 8), was comprehensive. It included two
things, (a) the newly agreed upon working terms whatever the
increases, and (b) separately, the restoration of the reductions
made on February 5. Since, as has been found, these cuts had
been illegally imposed from their inception, there would seem
to be no valid basis for withholding full restoration of the
reductions to the extent that they have not been restored.' 7
Upon the foregoing facts and on the entire record, I hereby
make the following
CONCLUSIONS OF LAW
1. By threatening to reduce the wages and eliminate the
fringe benefits of its employees because the representation
proceeding in which these employees had engaged had not yet
been completed, and by so doing, Respondent interfered with,
restrained and coerced employees in the exercise of their rights
under Section 7 of the Act thereby engaging in unfair labor
practices within the meaning of Section 8(a)(1) of the Act.
2. By discriminating in respect to terms and conditions of
employment to discourage membership in a labor organization,
Respondent engaged in unfair labor practices within the
meaning of Section 8(a)(3) of the Act.
3 Said unfair labor practices affect commerce within the
meaning of Section 2(6) and 2(7) of the Act.
Upon the foregoing findings and conclusions and on the
whole record and pursuant to Section 10(c) of the Act, the
Trial Examiner hereby issues the following:
the cut in wage and elimination of fringe benefits made on
February 5, 1967, by restoring these to the extent that
Respondent has not done so.
(b) Post at its place of business in Mahwah, New Jersey,
copies of the attached notice marked "Appendix "' 8 Copies
of said notice, on forms provided by the Regional Director for
Region 22, after being duly signed by the Respondent's
representative, shall be posted by it immediately upon receipt
thereof, and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places where
notices to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to insure that said notices
are not altered, defaced, or covered by any other material.
(c) Notify said Regional Director, in writing, within 20
days from the receipt of this Decision, what steps Respondent
9has taken to comply herewith."
17 There are two additional items to be considered.
(a) Respondent contends (supra, fn . 10) that the negotiations
concerning the extent of the restoration of the reductions were an
accord, which wiped out its liabilities under the Act This overlooks the
public character of the obligation which is not controlled by settlements
of the private parties. See Local Union No. 2, Plumbers (Astrove), 152
NLRB 1093 , 1112 , and cases cited , enfd. as modified 360 F.2d 428,
435 (C.A. 2).
(b) Though the reductions flowed from and were the result of the
representation proceeding in which the drivers and maintenance
employees were involved (supra , fn. 4), Respondent imposed these
reductions on all employees The result , as stated, was not that this
thereby removed the impact upon those in the bargaining unit, but that
it extended its impact to all employees for what it specifically sought to
achieve in respect to the employees involved in the bargaining unit. The
record does not inform us concerning whether and to what extent
Respondent restored the reductions made on February 5 to employees
outside the unit. However , the policies of the Act call for restoring the
reductions made upon all the employees to the extent that Respondent
has failed to do so.
18 In the event that this Recommended Order is adopted by the
Board, the words "a Decision and Order " shall be substituted for the
words "the Recommended Order of a Trial Examiner " in the notice In
the further event that the Board's Order is enforced by a decree of a
United States Court of Appeals , the words "a Decree of the United
States Court of Appeals Enforcing an Order" shall be substituted for the
words "a Decision and Order."
19 In the event that this Recommended Order be adopted by the
Board, this provision shall be modified to read "Notify said Regional
Director , in writing , within 10 days from the date of this Order, what
steps the Respondent has taken to comply herewith."
RECOMMENDED ORDER
Hudson Transit Lines, Inc., its officers, agents, successors
and assigns, shall
1. Cease and desist from:
(a) Threatening to reduce or reducing employees' wages or
to eliminate or eliminating fringe benefits for engaging in a
representation proceeding relating to the selection of the
employees' collective-bargaining representative.
(b) Otherwise discriminating or threatening to discriminate
in respect to the terms and conditions of employment to
discourage membership in either or both labor organizations
that are involved in a representation proceeding.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their rights
protected under Section 7 of the Act.
2. Take the following affirmative action to effectuate the
policies of the Act
(a) Make whole the losses sustained by all employees for
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of
the National Labor Relations Board and in order to effectuate
the policies of the National Labor Relations Act, as amended, we
hereby notify our employees that
WE WILL NOT reduce or threaten to reduce wages or
eliminate or threaten to eliminate fringe benefits of our
employees for engaging in representation proceedings to
determine their free choice of labor organizations to
represent them as their collective-bargaining agent.
Nor WILL WE otherwise discriminate in respect to the
terms or conditions of employment of employees to
discourage member-clip in any labor organization involved
in such representati,.i proceeding.
HUDSON TRANSIT LINES, INC.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of their
rights guaranteed them under the Act.
WE WILL make whole the losses sustained by all em-
ployees for the cut in wage and eliminations of fringe
benefits made on February 5, 1967, by, restoring them to
all of our employees to the extent that we have not already
done so.
HUDSON TRANSIT
LINES, INC.
(Employer)
Dated By
141
(Representative ) (Title)
This Notice must remain posted for 60 consecutive days
from the date of posting, and must not be altered, defaced, or
covered by any other material.
If employees have any question concerning this Notice or
compliance with its provisions, they may communicate di-
rectly with the Board's Regional Office, 614 National Newark
Building, 744 Broad Street, Newark, New Jersey 07102
Telephone 645-3088.