Inland Steel Container Co.

National Labor Relations Board - Board Decisions

Jun 28, 1985

275 N.L.R.B. 929 (N.L.R.B. 1985)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Inland Steel Container Company and United Steel-
workers of America , AFL-CIO-CLC, Local
.Union 2179. Case -15-CA-8983
28 June 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 14 January 1985 Administrative Law Judge
Irwin Kaplan issued the attached decision. The
Charging Party filed exceptions and a supporting
brief, and the Respondent filed a brief in support of
the judge's decision.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
MEMBER DENNIS, concurring.
concur on the ground -that the Union waived
any right that. might have existed to, bargain about
the Respondent's relocation decision. In January
1983, the Respondent notified the Union of its in-
tention to relocate. -Although the parties' met to
bargain about the effects of the relocation, the
Union never requested bargaining over the Re-
spondent's relocation decision. Instead, the Union
merely asserted that by' engaging in effects bargain-
ing it was not waiving contractual or other legal
rights. • • ' -
"When an employer notifies a union; of proposed
changes in terms and conditions of employment,' it
is incumbent upon the union to act with due dili-
gence in requesting bargaining ." Kentron of Hawaii,
214 NLRB 834, 835 (1974). Merely objecting to the
change or filing a refusal-to-bargain charge does
not fulfill the union's responsibility to request bar-
gaining or preserve bargaining rights. Medicenter,
Mid-South Hospital, 221 NLRB 670, 678-679
(1975); American Buslines, 164 NLRB 1055, 1055-
56 (1967). I find that the Union's conduct does not
constitute a request to bargain about the relocation
decision. Consequently, I conclude that the Union
failed to pursue the matter, thereby waiving any
bargaining right that might have existed.
' In view of our agreement with the judge 's findings that labor costs
were not the motivating factor in the Respondent 's decision to relocate
its plant and that it was under no obligation to bargain over that decision,
we find it unnecessary to pass on the judge 's discussion of the waiver
issues raised by the Respondent
DECISION
STATEMENT OF THE CASE
929
IRWIN KAPLAN, Administrative Law Judge. This case
was heard in New Orleans, Louisiana, on August 15
through 18, 1983. The underlying charges were filed on
May 17, 1983 (amended June 22, 1983), by the United
Steelworkers of America, AFL-CIO-CLC, Local Union
2179 (the Union), and the complaint thereon issued on
June 29, 1983 (amended in minor respects at the hear-
ing).
The gravamen of the complaint is that Inland Steel
Container Company (Respondent), during a midcontract
term, without having first bargained with the Union, no-
tified the Union about November 2, 1982, of its intention
to close permanently its New Orleans plant, and subse-
quently about January 28, 1983, stated its intention to re-
locate the New Orleans plant operations to Canton, Mis-
sissippi , and contemporaneously therewith stated its re-
fusal to employ any New Orleans employees at its new
Canton facility because of union considerations, and that
Respondent thereby violated Sections 8(a)(5), (3), and (1)
and 8(d) of the National Labor Relations Act.
The Respondent flied an answer and amended answer
conceding , inter alia, jurisdictional facts but denying that
it committed any unfair labor practices. Respondent con-
tends that the Union waived its rights to consent to a re-
location of bargaining unit work by its conduct and pur-
suant to the collective bargaining agreement . Moreover,
Respondent contends affirmatively, that the allegations
of the complaint are time-barred by Section 10(b) of the
Act.
On the entire record, including my observation of the
demeanor of the • witnesses, and after careful consider-
ation of all posttrial briefs, I I make the following'
FINDINGS OF FACT
1. JURISDICTION
Respondent , a Delaware corporation, during all mate-
rial times herein , operated a facility located in New Orle-
' The complaint was predicated largely on the legal theories enunci-
ated by the Board in Milwaukee Spring, 265 NLRB 206 (1982) (Milwaukee
Spring 1), and Otis Elevator Co, 255 NLRB. 235 (1981) (Otis Elevator 1)
Subsequent to the close of the instant heanng and after receipt of posttnal
briefs, the Board, on reconsideration, reversed the earlier decisions and
overruled the principles thereunder Milwaukee Spring II, 268 NLRB 601
(1984), Otis Elevator II, 269 NLRB 891 (1984) By my Order dated April
13, 1984, the parties were directed to submit supplemental briefs for the
limited purpose of discussing the impact of the more recent Board deci-
sions on the instant case These supplemental briefs were timely filed and
have also been carefully considered The General Counsel in its supple-
mental brief also moved to amend the complaint (opposed by Respond-
ent) by adding a new and additional paragraph numbered 10(d) alleging
that "[s]ince on or about January 28, 198[3], the Union has requested the
Respondent to bargain over its decision to relocate" and that Respondent
has refused I fmd that the essence of this allegation was encompassed by
the complaint and fully litigated at the hearing On that basis alone, I
have fully considered this allegation See, e g, Baytown Sun, 255 NLRB
154 fn 1 (1981) On the other hand, I find that the use of the supplemen-
tal brief by the General Counsel as a vehicle to amend the complaint,
under the circumstances herein, is untimely and inappropriate. As I fail to
discern any legally or otherwise justifiable basis for allowing the amend-
ment, it is denied.
275 NLRB No. 129
930 DECISIONS OF NATIONAL LABOR-RELATIONS BOARD
ans, Louisiana, where it engaged in the manufacturing of
steel drums. In connection with the aforenoted business
operations, ' Respondent, during a representative 12-
month time ' frame, purchased and --received, goods and
materials in excess of $50,000 which were shipped to its
New Orleans, Louisiana facility directly from points out-
side the State of Louisiana. Respondent admits, the
record discloses, and I find -that it is an employer en-
gaged in commerce within the meaning of Section 2(2),
(6), and. (7) of the Act.
Respondent admits, and I find, that the Union is a
labor organization within the meaning of Section 2(5) of
the Act. - '
II. THE UNFAIR LABOR PRACTICES
A. Background and Sequence of Events
The Union has represented Respondent's New Orleans
employees as part of a much broader- unit for over 40
years. On November 2, 1982, the Respondent notified
the Union for the first time that it was seriously contem-
plating -shutting down its New_ Orleans facility. On that
occasion, ;Respondent General Manager o,f Industrial Re-
la'tions^Walter-Reilly and New Orleans Plant Manager
Jay Strickler met with Union Staff Representative Mi-
chael, Nassar, it' a meeting in New Orleans, called by
Reilly, to' inform Nassar - of Respondent's contemplated
shutdown. Reilly and Nassar 'had long: dealt' with' each
other on union-management matters, apparently' amicably
and, as'§uch, Reilly'asserted that he wanted to personally
advise Nassai before formally notifying other union offi-
cials `of this news. Tlie formal notice was contained 'in a
letter (G.C. -Exh: -9) addressed to the Union with the fol.'
lowing day's date (November 3), the body-of which in
pertinent part'reads as follows:
Pursuant-to' Section 10.13 of our collective bargain-
ing agreement dated `October -1, '1980, --this is to
notify. you of, the Company's- intention 'to close per-
manently"its New, Orleans ' plant - operations, 325
North C ortez, New Orleans,: Louisiana., Representa-
tives of the Company, are, prepared to meet with
your representatives to discuss the proposed clo-
sure.
Inland Sieel Container strongly regrets that- it must
consider the permanent closing of its New Orleans.
plant. The cost of, operations _ along with'- low'
volume and "limitations" of plantr{and facilities at the
New Orleans plant make it 'impossible to justify
continued operations.2 [G.'C Exh. 9]:"
The' account `provided' by ,the' participants at the No
veinber'2 meeting, as-with subsequent' meetings,-differ'iii
substantial'- respects` 'Thus;-J'-according' to ''Reilly" and
Strickler; at the- November 2 meeting, Reilly gave a
number of reasons for-, the.likely . shutdown stressing' the
physical, limitations- in -the -New Orleans plant but also
noting the Higher wages' paid` unit "employees of that loca=
tion relative to wages" paid by Respondent's competitors
2 The collective-bargaining agreement between the 'parties then in ex'
istence was effective' to September 30,1983 (See G•C Exh 7)
in the southern market. They also testified that Nassar
stated that he was not surprised-and .blamed- management
for many of the problems. Still further, Reilly asserted
with some corroboration from Strickler, that Reilly told
Nassar that Respondent had established a good business
and intended to remain in the southern market. Accord-
ing to Strickler, Reilly" actually told Nassar that Re-
spondent would be "relocating" to another plant in the
south. Moreover, according to Strickler, during the brief
time in which Reilly had absented himself to go to the
bathroom, Nassar told Strickler of the rumor that the
plant was moving to Canton, Mississippi. To this,
Strickler assertedly noted the likelihood of_such,a move
although he pointed out that other locations were under
consideration. '
As noted above, Nassar's version was substantially dif-
ferent. First, according to Nassar, he did not expect to
hear about the impending shutdown because at that same
time, other union and company representatives were en-
gaged in concession bargaining in Pittsburgh in order- to
keep plants such as the New Orleans facility open.
Nassar, denied, inter alia, that anything was said about
the plant relocating. Moreover, he ;assertedly objected to
any discussion relative to the shutdown without Felix
Junda, the local, union president, in • attendance. Nassar
teed to reach Junda by phone but was told by the lit-
ter's wife that he was not at home. Reilly told Nassar
that the New Orleans plant personnel would be informed
on the following day of the likely plant shutdown. He
also told Nassar that he would get together with the
Union to discuss the plant closing at a later date. -
The next day, November. 3, -Strickler informed em-
ployees at the New Orleans plant of the Company's in-
tentions and-posted a notice signed by President Delmer,
on the bulletin board. The opening paragraph of the
notice reads as follows:
I regret to inform you that we are going to'perma-
nently close the New Orleans plant. Thus shutdown
is due to our inability to effectively compete be-
cause of high costs, plant and facility limitations,
low volume and operating losses. [R.-Exh•. 26.]
The notice also made reference to the formal letter
sent to Union District Director, Thuman Phillips, and
other union officials notifying them of Respondent's in-
tention to close. The posted notice then quoted in "part
from the letter as follows: - - -
Inland Steel Container strongly regrets that it must
consider -the permanent closing of its New Orleans
plant. The cost of operations along, with the volume
and limitations of plant.and facilities at the:New Or-
leans ' plant make • it impossible to justify continued
operations. : . "
On November 29, 'Director Phillips called Reilly and
advised him that Subdirector of Distract 36 Silas F: Gon-
zales would represent the Union at the meeting with the
Company to discuss the subject of Detmer's letter dated
November 3 (G.C. Exh. 9). This meeting was held on
December 7, 1982, in the Union's office • on Tulane
INLAND STEEL CONTAINER CO.
Avenue, in New Orleans. In attendance for the Union
were Gonzales, Nassar, • Felix Junda' (the local union
president), and the local. union committee. The Company
was represented by Reilly and Strickler. Reilly and Gon-
zales were the respective spokesmen, although Gonzales
had little personal knowledge concerning the New Orle-
ans operation. While, the General Counsel's and Re-
spondent's witnesses are in substantial agreement regard-
ing the items discussed at this meeting, they disagree
sharply with regard to the emphasis assigned the various
reasons by Reilly for the intended shutdown. According
to Gonzales, Nassar, and Junda, Reilly noted labor costs
and expensive work rules as the main reasons for the
contemplated shutdown and only secondarily did he
refer to other problems such as the age of the building
and its need for repairs. According to Reilly and
Strickler, that while Reilly made reference to labor costs,
he did not stress that subject but merely noted that, as
well as the limited size of the plant, the lack of expansion
opportunities, flooding causing steel to rust, and a
number of other problems were leading to the likely
demise of the facility According to Reilly, he told the
union representatives that the problems in the plant were
so pervasive that relief, relative to labor costs, were not
going to begin to solve the problem.
While it is undisputed that at the December 7 meeting
Reilly made some reference to the Respondent' s inten-
tions not to get out of the southern market, the witnesses
disagreed sharply whether Reilly stated or conveyed Re-
spondent's intention to relocate the New Orleans plant.
Gonzales explored the possibility of concession bargain-
ing which Reilly did not encourage, noting that he
would not make a proposal but would listen to what
Gonzales had to offer on the subject. Gonzales stated
that he would have to discuss the matter with his superi-
ors, Directors Phillips and Parton, because any conces-
sions offered would need their approval. Gonzales also
noted that concession bargaining was, then being con-
ducted concurrently on a higher level between union and
management personnel in Pittsburgh and opined that it
was inequitable for the employees in New Orleans to
grant concessions if the facility was going to close.
Reilly 'acknowledged that Gonzales' position had some
appeal and promised to look into the matter. No firm
date was established for the plant closing although Reilly
approximated that it would occur around October 1983:
Later that day, Reilly wrote to Gonzales , stating, inter
alia, that " it is essential that you let me know whether or
not you intend to make a proposal [with respect to con-'
tinuing operations at the New Orleans plant] by Monday,
December 13, 1982, and if you are making a proposal
that I have it, by Friday, December 17, 1982." (G.C.
Exh. 3.) At that time,, Gonzales was in the Virgin Islands
on other union business but learned about Reilly's letter
in a phone conversation with Gonzales' secretary. Gon-
zales returned to his office on December 16, 1982; but
did not then take. any action with respect to Reilly's
letter of December 7.
Strickler testified that the day after the December 7
meeting, some of the plant personnel and union repre-
sentatives indicated that they did not believe, that Re-
spondent was seriously considering shutting down the
931.
New Orleans facility. According to Strickler, to clear up
any misunderstanding relative to the statements made by
Reilly at the December 7 meeting, he had Reilly convey
telephonically to Doretha Hanklin and Peter Palmisano
(members of the local union committee) and Local
Union President Felix Junda that Respondent was indeed
seriously contemplating the shutdown.3
By letter dated December 17, 1982, Respondent in-
formed the Union that it had made its "final decision
. .. to close permanently the New Orleans plant" and
proposed to meet over the effects of the shutdown. (G.C.
Exh. 4.) On December 20, 1982, Respondent exercised an
option to purchase a building and 9-1/2 acres of property
belonging to De Soto, Inc., located in Canton, Mississip-
pi, for the purpose of relocating its New Orleans steel
drum operations.' (R. Exh. 12.) The' De Soto facility
was approximately 150 yards from Respondent' s existing
pail plant in Canton. Respondent had been actively ex-
ploring a possible new'site since 'April 1982, having made
a option to purchase the Canton property on September
27, 1982 (R. Exh. 11.) As noted above, this option was
not exercised until December 20, 1982.
By letter dated January 3, 1983,5 Gonzales responded
to Respondent's letter of December 17, 1982. Gonzales
stated therein, inter alia, that the Union was prepared "to
discuss the terms and conditions to assure continued op-
erations of the New Orleans plant or its shutdown should
this be your final ,decision." While Gonzales expressed
the Union's willingness to point out areas in which the
Company could save, money, he also noted that Re-
spondent was in the best position to make a proposal to
assure the continued operations of the New Orleans
plant. Thus, he wrote as follows:
Our Union can point out to the Company areas that
could save the Company many dollars in premium
payments, but the Company alone knows what is
needed to assure continued operations of its plant in
New Orleans. Therefore, it is only reasonable to un-
derstand that any proposals to assure the continued
operations of-the plant must come from the Compa-
ny. [G.C.-Exh. 5].
Soon after receiving the January 3 letter, Reilly
phoned' 9Gonzales to arrange a meeting for January 27.
Gonzales, on being told by Reilly, that he intended to
discuss only the "effects" of the plant shutdown, indicat-
ed that he''would turn over the negotiations to Nassar
who was'more familiar with,pension and other employee
rights and the collective-bargaining agreement. By letter
dated January,. 12, Reilly confirmed that the meeting
would-be held on January.27, "for: the purpose of begin-
ning discussions of a shutdown agreement covering pro-
3 Reilly provided only limited corroboration 'He did not testify that he
had in fact spoken to Hanklin, Palmisano, and Junda On the other hand,
Hanklin and Palmisano did not .testify at all, and Junda was not called as
a rebuttal witness and did not otherwise testify about this occurrence
* The De Soto building contains approximately 98,400-square feet and
is only slightly larger than the New Orleans plant containing approxi-
mately 96,265-square feet.
5 All dates heremafter 'refer to 1983 unless otherwise indicated
932 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
duction and maintenance workers at.our New Orleans
plant." (G.C. Exh. 6.)
On January 15, Reilly received a phone call from
Union Staff Representative Dee Jones, who told him of
Director Phillips' concerns over the New Orleans plant
closure and inquired of Reilly whether anything could be
done to salvage the facility. Jones asked Reilly whether
"wage concessions in the area of $3.00 to $4.00 an hour
would save the plant" and whether Respondent would
be amenable to a union proposal. According to Reilly's
uncontroverted testimony, he responded negatively vis-a-
vis wage concessions and discouraged any union propos-
al for purposes of saving the plant. -
The scheduled January 27 meeting' "for the purpose of
beginning discussions of a shutdown agreement . . . of
the New-Orleans plant" was actually held on January 28.
(See G.C. Exh. 11.) In attendance for the Union were
Nassar, Local Union President Junda,- and members, of
the local union committee, including Hanklin and Palmis-
ano, Respondent was represented by' Reilly, Strickler,
and a subordinate, Peggy Frye. Reilly advised the union
representatives' for the first time that the New Orleans
plant would be relocated in Canton, Mississippi. Accord-
ing to Nassar, union objections were raised' regarding the
plant closing and "especially the plant moving its equip-
ment." As testified by Strickler, Nassar objected to the
contracting out' of any unit work after, the shutdown 'It
was also noted by unioh representatives that concession
bargaining at a higher level at that time was' being con-
ducted in Pittsburgh which would probably lead to re-
ductions in hourly pay and benefits. In this connection,
the union representatives expressed concerns over the
"inequitable", result of having employees 'at: the New Or-
leans plant suffer dually, by not only having their jobs
eliminated, but also by extracting from - them' cost savings
in the final months of their employment for Respond-
ent.e . .
The parties also discussed • transfer, pension, and vaca-
tion rights at the January 28 meeting. While Reilly ac-
knowledged that employees at the New -Orleans plant
had transfer rights to Respondent's Chicago plant, -'he
disagreed with Nassar regarding -their. rights under the
collective-bargaining agreement to transfer to Respond-
ent's Cleveland plant.7 Reilly also asserted 'that the em-
ployees at the New Orleans plant did not, have transfer
rights to Canton. Nassar requested of Reilly "hiring' dates,
seniority dates and other information'' relative to such
items as eligibility for pensions, supplemental •unemploy-
ment' benefits, insurance benefits after the"shutdown.
'Reilly promised to provide'this information''along with'a
proposed closing agreement for the 'next meeting.
The parties met again on February 17. Oil 'that occa-
sion , Reilly provided the Union with a shutdown propos-
al (G.C' Exh..12). •Nassar -objected to several of the pro-
'
'.6 -As noted previously, these concerns ' were also expressed- by the
Union at the meeting on December 7 _r - ' , .e-
T"As discussed more fully infra, Respondent's. New -Orleans,, Chicago,
and Cleveland steel drum plants had long - been treated collectively • re-
garding wages, hours , and other terms and conditions of employment In
April 1982, the unit employees at-the Cleveland plant voted separately to
accept, inter alts, wage concessions and negotiated a'separate agreement
(R Exh 29)
visions contained in the document. For example, he ob-
jected to a provision which terminated all employee
rights "on or after the time of the [plant] 'closing in ac-
cordance with' the provisions of the 1980'collective bar-
gaining agreement." (Id. at par. 3.) He also took "excep-
tion" to a -provision relative to temporary employment -
following the closing of the plant. (Id. at par. 4.) Nassar
had asserted, that this provision disregarded seniority
rights under the then existing contract. Further, Nassar
objected to the provision which stated that' "[o]vertime
will 'be compensated in accordance' with applicable feder-
al law." (Id. at-par 4, subpar. f.) Nassar wanted the unit
employees to be paid on the basis of time and one-half
after 8 -hours' of work.
On the othe'r'-hand, the' document, inter aba, contained
a provision excluding the New Orleans unit employees
from any of the concessions' which were then being ne-
gotiated between the Coordinating Committee Steel
Companies (CCSC), of which Respondent is a member,
and the United Steelworkers-of America in Pittsburgh.
(Id. 'par. 1.) This provision addressed one of Nassar's
principal concerns, although he still expressed uncertain-
ty with regard to the language. Reilly told Nassar not to
worry about loss of benefits, pointing out (erroneously)
that the bargaining unit employees at the New Orleans'
plant' were off lis't-3.8 The Union was also furnished with
information regarding pension and vacation eligibility, as
had been promised by Reilly at the January 28 meeting.
However, according to Nassar, Reilly was intractable re-
garding the shutdown proposal,- stating that "the compa-
ny had no intentions' of modifying" the document. Nassar
told Reilly that he could not sign any agreement without
the approval of the district director, and the Internation-
al officers. ' ' '. • •
Within 'a day or • two, Nassar called Strickler, ' and as
testified by the' latter; Nassar stated'that if the parties
could' resolve 'the provisions relative to "overtime pay"
and "rate of pay for the job worked .. .. We can settle
this thiiig." Nassar testified that he had raised the same
objections to the shutdown agreement in his phone con-
versation with Strickler; as'he had at the meeting of Feb-
ruary 17. A few days later, Strickler caused to be deliv-
ered 'to the union office a modified shutdown agreement,
assertedly containing the changes requested by Nassar in
the earlie'r phone conversation (G.C. -Exh. 13). Accord-
ing to Nassar and United Steelworkers Subdistrict Direc-
tor Carl Statum around that time the latter had instruct-
ed Nassar that the agreement had to `include nonwaiver
language relative to its right to protest the' plant reloca-
s Respondent , in dealing with the United Steelworkers of America, has
long bargained on a coordinated basis with a group of other major steel
companies 'Since 1959, Respondent's New Orleans, Chicago, and Cleve-
land plants were covered'by a settlement agreement ' in a list 3 attachment
to the basic or national -settlement agreement List 1 covers the basic steel
,plants,-list 2 covers raw material type operations , and list 3-covers sub-
iidianes and divisions ; i e , container division Basically, the general eco-
- nomic package ' applies to all list L -2, and 3 operations. As noted previ-
ously, in the spring of 1982, unit employees at the Cleveland plant, voted
to accept wage concessions and, as such , to be deleted from list 3 While
a tentative agreement was reached in the fall of 1982, regarding the three
plants, it was subject to ratification This did not occur, vis-a-vis, the
• New Orleans and Chicago plants Respondent 's longtime efforts to get
these plants off list 3 will be treated more fully-infra -
. INLAND STEEL CONTAINER CO
tion or the lost jobs. About February 22, Nassar tele-
phonically related the Union's position relative, to the
nonwaiver language to Reilly and Strickler but this was
unacceptable to Respondent.
-In February 1983, while the parties were engaged in
local bargaining in New Orleans, concurrent bargaining
(relative to list 3 operations and a new • settlement agree-
ment) was also going on in Pittsburgh between the
CCSC and -International officers of the Union. About
February 28, Respondent Vice President of Industrial
Relations William Dillon, who was then involved in co-
ordinate committee level bargaining; took time away to
meet and explore privately with Statum and Union As-
sistant General Counsel Paul Whitehead the New Orle-
ans shutdown agreement in Statum's hotel room in Pitts-
burgh. They met again the following day, March 1, but
again could not reach agreement. Basically, the only area
of disagreement concerned the nonwaiver language de-
manded by the Union and found - unacceptable by Re-
spondent. -
The concession bargaining between the Coordinating
Committee Steel Companies and the United Steelworkers
of America culminated in the modification of the then
existing October 1, 1980 through September 30, 1983 col-
lective-bargaining agreement (G.C. Exh. 7), with-•a new
settlement agreement' effective by its terms on March 1,
1983, through August 1, 1986 (G.C. Exh. 8). Respond-
ent's New Orleans plant continued to be carried thereon
as a list 3 operation. '
According to Statum, he planned on going to. New
Orleans to explain to the local people why they had to
accept concessions .under the newly signed basic agree-
ment, notwithstanding Respondent's announced reloca-
tion intentions. Statum testified, without contradiction,
that Reilly called him and stated that he understood that
Statum would be meeting with union members in New
Orleans, thereby giving the parties another opportunity
to meet again on the shutdown agreement.
Pursuant to the aforenoted initiative by Reilly, the par-
ties met again on March 4. In attendance for the Union
were Statum and Nassar; the Respondent was represent-
ed by Reilly, Strickler, and Attorney Thullen. Again, the
focal point of the session turned on the Union' s insistence
on "no-waiver" language. According to Reilly, with sub-
stantial corroboration from Strickler, Statum explained
that the Union needed such a provision to protect it
from potential lawsuits and noted, hypothetically, that an
employee 3 months short of pension eligibility might
hold the Union responsible for a loss of benefits under
the proposed shutdown agreement . According to Reilly,
he responded by pointing out that the shutdown agree-
ment protected pension eligibility.
On. the other hand, as testified by Nassar, it was-
Re-spondent's representatives who objected to the non-
waiver language because "they didn't want to be both-
ered with the suits and problems after the move." Nassar
also testified,- without contradiction, that Statum advised
Respondent, that without the "non-waiver provision"
and because the Respondent refused to permit employees
at the New Orleans facility transfer opportunities to the
new location at Canton, the Union could not accept- the
proposed shutdown agreement . It is undisputed that
933
Statum advised Respondent that without an agreement
the unit employees at New Orleans were still carried
under list 3, and acknowledged that , as such , the conces-
sions contained in the new March 1 basic agreement, had
to be applied to those employees - -
-Later that day, Respondent submitted to the Union a
modified shutdown proposal (G.C. Exh. 15) but this, too,
omitted any nonwaiver language and no agreement was
reached . The parties did not meet thereafter with regard
to' a shutdown agreement although they exchanged cor-
respondence reflecting their respective positions. (See
G.C. Exhs. 16, 17, and 18)
On August 12, 3 days before the instant trial opened,
Respondent posted for the first time a notice at its New
Orleans facility advising employees that it would soon
begin interviewing at the new Canton location and invit-
ing them to apply . (R. Exh . 27.) The new plant was ex-
pected to become operational about October 1.9 _
B.- Discussion and Conclusions
The essence of the General Counsel's case is that Re-
spondent unilaterally decided to relocate its New Orleans
facility to - Canton , Mississippi, principally , to avoid the
contractual labor costs in violation of Section 8(d) and
Section 8(a)(5), (3), and (1)-of the Act. It is also alleged
that Respondent independently . violated Section 8(a)(3)
by refusing to employ any of the - New Orleans employ-
ees at the new location in Canton. Although Respondent
denied that it failed.to fulfill any of its collective -bargain-
ing responsibilities under the Act, it also contended, inter
alia, that the "decision itself is not a mandatory subject
[emphasis added] for collective bargaining under the Su-
preme Court 's decision in First National Maintenance
Corp. v. NLRB, 452 U.S.666 ( 1981)."
As noted previously, at 'the time this case was heard,
the General Counsel had relied mainly on the legal theo-
ries set forth in Milwaukee Spring I, supra,- and Otis Ele-
vator I, supra. In dispute is also 'the threshold issue of
whether; under the Supreme. Court's decision in First
National Maintenance, the decision herein to relocate
constituted a mandatory subject of bargaining. There, the
Supreme Court held- that an economically motivated de-
cision to, shut down part of a business is not encompassed
byI "terms and conditions [of employment]" under Sec-
tion 8(d) 'and, ,as such, is not deemed a mandatory sub-
ject. First National Maintenance Corp., supra 452 U.S.
688. -
After . the instant hearing closed, and after 'postirial
briefs had been received, the Boafd, on reconsideration,
in Milwaukee Spring II (1984) and Otis Elevator II (1984),
reversed the earlier-- decisions and overruled -the princi-
Subsequent to the close of ,the ' instant hearing, the Respondent by
letter dated January 6,-,1984, advised that it had sold "all of the operating
plants and assets of [its] former Container Division including the plant at
Canton,% to - Royal Packaging Industries Van Leer BV, a. Netherlands
corporation -Further, Respondent advised that its New Orleans facility
which had -not been, involved in the aforenoted -sale and which has not
been in operation since October 1, 1983; has been sold to Mercy Hospital
of New Orleans, Louisiana The aforenoted representations were con-
firmed by the General Counsel in a letter dated May 9, 1984 These let-
ters, respectively, are marked as Post Trial (PT) Exhs .1 and 2 and are
made part of this record -
934 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
pies thereunder. The Board in Milwaukee Spring II,
found it unnecessary to address the question of whether
the work relocation therein constituted a mandatory sub-
ject of bargaining because, inter alia, the parties had stip-
ulated that the Respondent had satisfied its obligation to
bargain with the Union over its decision (supra at 601 fn.
5). Instead, the Board provided a more-limited meaning
to Section 8(d)10 than had been afforded in Milwaukee
Spring I, in terms of employer constraints relative to
changes in employment conditions during the life of the
contract. Now, under the Board's more limited reading
of Section 8(d), where the contract contains no express
prohibition regarding the changes in employment condi-
tions which the employer seeks to make , "the employer's
obligation remains the general 'one of bargaining in good
faith to impasse -over the subject before instituting the
proposed change." See Milwaukee Spring II, supra at 601.
In other words, in such circumstances, - if the employer
satisfies that obligation, he is free to implement its deci-
sion unrestrained by Section 8(d) or union veto power"
(supra at 602, 605). Given the stipulation that the em-
ployer bargained to a good-faith impasse, and that the
contract did not require the assembly operations to
remain , the Board concluded, inter alia, in reversing Mil-
waukee Spring I, that the employer' s decision to relocate
did not modify the collective-bargaining agreement in
violation of Section 8(d) or otherwise violate Section
8(a)(5) of the Act.' 2 See Milwaukee Spring II, 'supra at
603, 604.
The Board found Otis Elevator II as the vehicle to
treat squarely the subject of whether economically moti-
vated decisions to relocate and other similar types of
management decisions constitute mandatory subjects of
bargaining, within the reach of Section 8(d). While there,
the Board noted that the Supreme Court in First Nation-
al Maintenance had excluded.from its ruling management
decisions such as plant relocations; nevertheless, it decid-
ed to take a lead from the Court's overall discussion of
management's business opportunities and exigencies, "[to]
hold that excluded from Section 8(d) of the Act are deci-
sions which affect the scope, direction, or nature of the
business ." Otis Elevator II, supra at 893). The Board then
Io Sec 8(d) of the Act provides, in pertinent part, that "to bargain col-
lectively is the performance of the mutual obligation of the employer and
the representative of the employees to meet at reasonable tunes and
confer in good faith with respect to wages, hours, and other terms and
conditions of employment . . Provided, That where there is in effect a
collective-bargaining contract covering employees in an industry affect-
ing commerce , the duty to bargain collectively shall also mean that no
party to such contract shall terminate or modify such contract
I I Whether or not the decision itself is deemed to be a mandatory-sub-
ject for bargaining , an employer is obligated to bargain over the "effects"
of the decision on unit employees First National Maintenance , supra at
681-682
12 Member Zimmerman dissented , on the basis that Respondent 's deci-
sion to relocate the assembly operations was "motivated solely" by its
desire to obtain relief from contractual labor costs He reasoned, inter
alia, that such matters are , amenable to resolution by the collective-bar-
gaining process and are therefore mandatory subjects of. bargaining,
which require union consent under Sec . 8(d), during the term of the con-
tract (See Milwaukee Spring II, supra at 605-606) For the same reasons,
Member Zimmerman joined the majority in Otis Elevator II in finding
that the Respondent's decision to relocate therein was not predicated on
avoiding contractual labor costs and, as such , was not a mandatory sub-
ject of bargaining (See Otis Elevator II, supra at 900-902 )
provided -a partial list of such economically motivated
decisions to be excluded from the reach of Section- 8(d)
as follows:-
[D]ecisions to sell a business,- or a part thereof, to
dispose of its assets , to restructure or to consolidate
operations, to subcontract, to invest in labor-saving
machinery, to change the methods of finance or of
sales, advertising, product design, and all other de-
cisions akin to the foregoing. [Id. at fn. 5.]
In Otis Elevator, unlike Milwaukee Spring, the Respond-
ent conceded that it did -not bargain to a good-faith im-
passe over. its decision to transfer certain engineering
functions from its location- in Mahwah, New Jersey, and
consolidate ;them with its research and development fa-
cilities in East Hartford, Connecticut._ (Otis Elevator. 1,
supra at 244-245.) In reversing Otis Elevator I, the Board
found that the essence of the decision -"turned upon a
fundamental change in the nature and direction of the
business [rather than upon labor costs], and thus was not
amenable - to bargaining." (Otis Elevator II, supra at 892.)
A fortiori, the Board treated the decision as a nonmanda-
tory subject beyond the limited reach of Section 8(d) of
the Act. (Id.).
In the case at hand, the General Counsel has acknowl-
edged that none of the relevant collective-bargaining
agreements contain the type of work preservation provi-
sion discussed by the Board in Milwaukee Spring II, to
contractually require the Respondent to remain in New
Orleans. 13 Still, the General Counsel maintains- that the
allegations are viable even under the precepts of Milwau-
kee Spring II and Otis Elevator IT According to the Gen-
eral Counsel "the primary motive for Respondent's relo-
cation-action was to avoid contractual labor costs."
If this contention were supported by the record, ' I
would find, consistent with the most recent Board pro-
nouncements, that where, as heie, there is no contractual
prohibition to relocate, that Respondent was obligated to
bargain in good faith to-impasse-before implementing- its
decision. On the other hand, it is also alleged that Re-
spondent -engaged in the disputed conduct "without the
consent of the Union." In Milwaukee Spring II, the Board
expressly rejected the notion that union consent is a pre-
'requisite to the proposed change "on a matter not con-
tained in the body of a collective bargaining agreement
even though -the subject is a mandatory 'subject of bar-
gaining" (supra at 610 at fn. 13). Accordingly, this alle-
gation must fall.
As Respondent disputes that the decision itself was
predicated 'primarily on "labor 'costs," this still leaves
open for discussion and resolution the threshold issue of
whether the "essence" of the decision constituted a man-
datory subject of bargaining. Respondent attributes its
decision to a variety of other 'factors (discussed more
fully -below), such, as operating an antiquated facility
with obsolete equipment, an inefficient plant layout; hu-
I s The parties herein were directed to submit supplemental briefs to
discuss the impact on the instant case of the Board 's decisions in Milwau-
kee Spring II and Otis Elevator II, both of which were decided after the
original briefs were received. I - - -
INLAND STEEL CONTAINER CO
midity and flooding problems, all of which impacted on
"production and quality" and "factors which the Union
[assertedly] was powerless to affect or change."
1. Labor costs vs. other reasons
It is undisputed that Respondent has long attempted to
extricate itself from coverage under the list III umbrella
of the basic steel agreement. As noted previously, the
settlement agreements negotiated between the Union and
CCSC (member steel companies) established the wage
and benefit package for thei list III plants such as Re-
spondent's New Orleans, Alsip (Chicago), and Cleveland
facilities . Although Respondent was not precluded from
negotiating with the local union on a plant-by-plant, basis,
this was basically confined to noneconomic issues, as the
basic settlement agreement prevailed over labor rates and
benefits. The Respondent had long complained that these
bargaining restrictions had positioned its list III plants at
a serious competitive disadvantage relative to nonlist III
companies or nonunion companies in their respective
geographical or regional areas . These complaints were
summarized in a letter dated October 15, 1981,• from Re-
spondent's president Detmer to Union Director Parton,
which in pertinent part reads as follows: -
Our plants at Chicago, Cleveland and New Orleans
are at a serious disadvantage in their efforts to com-
pete in the steel pail and drum business due to their
high labor rates . . . . They exceed by substantial
amounts rates paid by our competitors-in many in-
stances $3.00 to $4.00 per hour!
The historical path of List III bargain in our' indus-
try is'littered with plant shutdowns and out-of-work
Steelworkers . . . I cannot stress 'the point too
strongly-these plants cannot -survive if they are not
allowed to become more cost competitive in the future.
[Emphasis as stated, R. Exh. 7.]
In January 1982, over a 2-day period, Detmer, Reilly,
the three plant managers, and a few subordinates met
with the three union district directors covering,the three
plants as well as other local union officials to discuss the
financial problems and the need for economic relief for
those facilities. Each of the plant managers made a pres-
entation, illustrating with graphs and charts the unfavor-
able competitive position of their respective plants with,
as testified -by Reilly, "[t]he emphasis on wage compari-
sons." It was apparently understood or agreed that Re-_
spondent would campaign to sell its position to the em-
ployees at the-three plants and, if they voted collectively
to accept concessions, the parties were expected to meet
again and bargain a reduced wage and benefit package.
This local bargaining, in effect, would -remove those
plants from list III' constraints.
Respondent's campaign efforts were successful only at
the Cleveland facility where, the employees voted affirm-
atively and, in April 1982, the local union negotiated a
separate concession agreement (R. Exh. 29). They did so,
notwithstanding a rejection of Respondent's proposal by -
the local unions for the plants in Chicago and New Orle-
ans. In this latter regard, it is noted that by letter dated
April 14, 1982, Union Director Parton advised Detmer
935'
that he and Union Director. Phillips, with regard to the
Chicago and New Orleans facilities, were "not prepared
to meet relative to concessions on the existing contract."
(R. Exh. 10.) In April 1982,- apparently soon after Re-
spondent received Parton's letter, it, commenced its
search for a new location to relocate its New Orleans fa-
cility. `
In June 1982, negotiations commenced for a new basic
steel agreement. The then outstanding agreement by its
terms'was due to expire on August 1, 1983. The negotia-
tions were held intermittingly over the following months
until a new basic steel agreement was reached at the end
of February-1983. During that entire period, Respondent
and the CCSC proposed that the International Union
remove all list III plants from coverage. In November
1982, the union executive board agreed to the proposal
but it was subject to union ratification and was rejected.
In the meantime, in September 1982, Respondent
signed an option agreement for the right of first refusal
until December 31, 1982, to purchase the Canton proper-
ty. Detmer credibly testified that in October 1982, the
board of directors -rejected his proposal to approach the
Union for "monumental wage relief' and directed him to
discuss the shutdown of the New' Orleans plant and to
investigate further the "feasibility" of purchasing the
property in Canton. i 4 •
On November 2, 1982, General Manager of Industrial
Relations Reilly 'informed Union Staff Representative
Nassar of Respondent's intention to close permanently its
New - Orleans plant, noting; inter alia, that the facility
was antiquated with limitations in plant space, and that
the facility was located in an unfavorable competitive
area, citing the high cost of -labor as reasons for the deci-
sion. On that occasion, Reilly also handed Nassar an offi-'
cial letter addressed to - the • Union providing formal
notice of Respondent's intention to-close the plant. The
letter, inter alia, contained an explanation as follows: '
The cost of operations, along with low volume and
limitations -of plant and facilities make it impossible
to justify continued operations. (G C. Exh. 9). •. •
On December 7, 1982, Respondent met with the Union
to -discuss the decision to close. At this meeting, Reilly
spoke, inter alia,, of the outdated facility, cramped and
limited space for expansion, flooding problems, and the
need for costly repairs as well as high labor costs and re-
strictive, work rules. t 5 '
14 While I was not overly impressed with Detmer as a witness, I crediti
his account, relying largely'on the fact that Respondent's representatives
not only did not approach the- Union vis-a-vis New' Orleans for "monu-
mental" wage relief, it discouraged' the Union- at the December 7, 1982
meeting and thereafter from any proposal, although it expressed a will-
ingness to listen Respondent did iiot"exercise its option to purchase the
Canton property'iintil December 20; 1982 [R` Exh 12.] • -
15 I credit Reilly's" denial (with corroboration from 'Strickler) that he
pointed to high labor costs as the main reason for Respondent's "deci-
sion " While Gonzales asserted that Reilly emphasized "`high labor costs,"
it is-noted that Gonzales did not characterize Reilly's comments as 'such,
in' his affidavit. There, Gonzales noted that Reilly, inter' alia, made refer-
ence to high operating costs, including "high labor costs " As expressed
by Local Union President Junda, in his affidavit, "Reilly stated that due
to the conditions at the plant, 'the old building, lack of space for expan-
` ' ' Continued
936 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union Subdirector Gonzales asked Reilly if he would
be receptive to concessionary proposals to keep the plant
in operation and the latter, while expressing a willingness
to listen, did not encourage Gonzales to make any such
proposal. Reilly took the same stance about 5 weeks later
when he was asked by Union Staff Representative Jones
whether "wage concessions in the area of $3.00 to $4.00
an hour would save the plant." However, the General
Counsel also points out in support of its contention that
Respondent was primarily concerned with labor costs
vis-a-vis its decision, that on February 8; 1983, Detmer
and Reilly in speeches to Respondent's Chicago employ-
ees drew attention to the demise of the New Orleans
plant and the near closing of the Cleveland plant, in
stressing the need for significant wage package relief for
the Chicago facility (as reported in- Respondent's "Chica-
go Sidelines" newsletter dated March 15, 1983-G.C.
Exh. 21).
The aforenoted chronology dealing with Respondent's
continued efforts to, free its list III plants, including the
New Orleans facility from the prevailing wage and bene-
fit package of the - Basic Steel Agreement persuade me
that "contractual labor costs" was a precipitating factor
in Respondent's search for a new facility. On the other
hand, contrary to the General Counsel, I cannot find on
the total state of this record that the decision turned
solely on, or was even predominantly motivated, by a
desire to avoid "contractual labor costs."
-.In Otis Elevator II, the Board found that the decision
to relocate was not subject to mandatory bargaining or
encompassed by Section 8(d), "even though that factor
[labor costs] may have, been one of the circumstances
which stimulated the evaluation process which generated
the decision." (Supra at 892.) There, the Board instruct-
ed, inter alia, that if the essence of the decision "turned
upon a fundamental change in the nature and.direction of
the business,"- it was not "amenable to bargaining," and
as such, outside the scope of Section 8(d). (Id.) Thus, the
prominence afforded the "other reasons" by Respondent
for its "decision" must be carefully scrutinized and as-
sessed. -
In the case at hand, aside from Respondent's conten-
tion that its New Orleans complex represented antiquat-
ed, obsolete, and limited plant facilities, the record dis-
closed that Respondent experienced major difficulties in
satisfying its customers relative to the quality of the steel
drums it produced at that location. Admittedly, the
Union was aware of such problems. Thus, Nassar ac-
knowledged, that he and the local union committee were
"concern[ed] . . . about this matter, and keeping this
plant in operation." He also noted, inter alia, that em-
ployees on the production line had advised their supervi-
sors that the quality-.wasn't up to standard." In, fact, as
testified by Nassar, "there were more drums coming
back in the plant [to be reworked] than going out."
sion , high labor costs, high wages (something about our work rules), and
lack of competitiveness , the combination of all of this [Respondent's] in-
tentions were to close the plant " [R Exh 3 ] On the basis of these affi-
davits, the record testimony and my observation of demeanor factors, I
am persuaded that the General Counsel's witnesses exaggerated in assert-
ing that Reilly pointed to the high labor costs as the main reason for the
decision to close down the New Orleans facility
The record revealed that Respondent's manufacturing
difficulties can be traced to a host of factors. These fac-
tors range from questionable or poor management prac-
tices, i.e., poor scheduling, to deteriorating and obsolete
equipment, the inefficient layout-of the plant itself, and
even climatic conditions such as high humidity and
heavy rains. The rainstorms too often are beyond the-ca-
pacity of the plant's sewage system to endure. This has
caused flooding in the steel storage and other areas
which, in turn, has caused the steel to become wet and
to rust. This condition is,not endemic to steel drum pro-
ducing plants. Thus, the record disclosed that Respond-
ent's New Orleans plant is the only plant in the container
division using the less efficient "oiled steel" rather than
"dry steel" to help protect against rust. • = ,
Although the quality problems can be solved, it is an
expensive undertaking and given the limited or cramped
floor space in the plant building itself, the logistics make
if impractical. For example, the plant manager testified,
without contravention, that installing any new sizable
equipment would cause a shutdown of the plant for at
least 4 months with a concomitant loss of customers. The
building itself occupies an entire city' block, bounded on
each of its sides by public streets. By not having more
available property at the plant complex, the Respondent
has, inter alia, experienced difficulties with regard to in-
coming steel which is received by boxcar and the load-
ing of trailers for outgoing steel, because both operations
are largely undertaken in the same compressed shipping
and receiving area . The plant manager described the area
as "inadequate" and the operations "inefficient." Al-
though the Canton building is only slightly larger, it is
noted that the new property also includes 9-1/2 acres of
land.
The General Counsel noted that many of the factors
complained of by Respondent have long existed and that
Respondent's reliance thereon is - pretextual. However,
given the undisputed problems Respondent had experi-
enced with the quality of the steel drums produced at
the New Orleans plant (even the employees complained
about the inferior standard), coupled with Detmer's cred-
ited and uncontroverted testimony that the market had
become more competitive and, concomitantly, that cus-
tomers had become more particular in rejecting drums
with imperfections, I cannot find that such factors did
not influence Respondent with regard to its decision to
service its customers more efficiently from another loca-
tion. 16
The General Counsel, in relying on "labor costs" as
the primary reason for Respondent's "decision" also
16 During the first 8-1/2 months of 1982, over 228,500 drums were re-
jected because of poor quality (R Exh 21, p 4) In December 1982 (the
month the "decision" was made), and for each of the 5 preceding
months, Respondent suffered a loss in manufacturing profit (R Exh 4)
As noted previously, Union Staff Representative Nassar , in testifying
about the quality, commented, "there were more drums coming back in
the plant than going out " According to Detmer, inter aha , since 1980,
customers had increased their demand for double-lined drums which,
given the facility limitations , the Respondent found difficult to satisfy
Detmer pointed out for example that the New Orleans facility had the
capacity to operate only one bake oven which thereby required substan-
tial "double handling" and excessive overtime costs
INLAND STEEL CONTAINER CO.
noted that Detmer had candidly acknowledged that -had
the Union proposed "monumental" wage reductions, he
would have gone back to the board of directors to rec-
ommend that the plant remain in New Orleans.. This, of
course, as also noted by Detmer, is not tantamount to ac-
ceptance of any such proposal. Moreover, as noted pre-
viously, Detmer had already made this recommendation
to the Board back in October and it had been rejected.
On the" other hand, strongly militating against "labor
costs" as the dominant factor, is that Respondent, admit-
tedly, did not make a wage reduction proposal and in
fact discouraged the Union from engaging in concession-
ary bargaining at the December 7 meeting, before the
final "decision" was made. In any event, the Union did
not make any concrete proposal. Its failure to do so
tends to support the notion that the subject of saving the
plant was not amenable to the collective-bargaining
process. As recognized by Union Subdirector Gonzales,
"the Company alone" knew what was necessary "to
assure continued operations of its plant in New Orleans."
(G.C. Exh. 5.)
In sum, on the -total state of this record, while noting
that the Respondent had long pursued steps to reduce
the contractual labor costs, and that this factor helped
tugger a search for a new location, I- find that the es-
sence of the "decision" itself was not predicated solely or
even predominantly on labor costs, but rather was
prompted largely by a need to replace an inadequate fa-
cility. As the "decision" did not turn on labor costs, it
was not subject to mandatory bargaining and Respond-
ent was therefore at liberty to unilaterally decide to relo-
cate, even during the life of the contract. Milwaukee
Spring II, supra; Otis -Elevator II, supra. 17 Accordingly, I
shall recommend that the 8(a)(5) allegations based on the
decision to relocate be dismissed.
2. Other issues
a. Waiver Issue
Assuming, arguendo, that it is eventually determined,
contrary to the aforenoted finding, that the "decision"
turned on "labor costs" and, as'such, a subject for man-
datory bargaining, the Respondent contends that it was
still free under the Act to make the "decision " unilateral-
ly, because the Union, by contract, and by its own -con-
duct waived any rights it may have had to bargain there-
on. Treating the contract first, the provisions relied on
by Respondent are as follows:
Section 10.13 Notice of Closure.
Before the Company shall finally decide to close
permanently a plant or discontinue permanently a
department of a plant it shall give the Union, when
practicable , advance written notification of its inten-
- 17 I find no legally sufficient basis to support the General Counsel's
assertion that "[u]nless an employer establishes that it cannot survive [em-
phasis added) under the current labor costs, economic considerations and
antlumon animus are inseparable " See generally Milwaukee Spring II,
supra Given the host of legitimate reasons, aside from labor costs, which
influenced the "decision " and noting an absence of an[mmon animus, the
General Counsel's case is insufficient, even under a Wright Line analysis
(251 NLRB 1083 (1980))
937
tion. Such notification shall be given at least 90
days prior to the proposed closure date, and the
Company will thereafter meet with the appropriate
representative in order to provide them with an op-
portunity to discuss the Company's proposed course
of action. Upon conclusion of such meetings, which
in no event shall be less than 30 days prior to the
proposed closure or partial closure date, the Com-
pany shall advise the Union of its final decision.
The final closure decision shall be the exclusive
function of the Company. This notification provi-
sion shall not be interpreted to offset the Company's
rights to lay off or in any other way reduce or in-
crease the working force in accordance with its
presently existing rights as set forth in Section 2.2
of this Agreement.
Section 2.2: Management Rights: Subject to the
provisions of this Agreement, the management of
the plants and direction of the working forces, in-
cluding the right to hire, suspend, or discharge for
proper cause, or promote, demote, or transfer, to
schedule working hours and shifts, the right to re-
lieve employees from duty because of lack of work
or other reasonable causes, and to introduce new or
improved production methods or facilities, are
vested in the Company.
Section 1.2 Scope of Agreement: This agreement
relates only to the plants of the Company located in
Alsip, Illinois; Cleveland, Ohio; and New Orleans,
Louisiana.
Before the Board will find a contractual waiver of the
duty to bargain under Section 8(a)(5) of the Act, the evi-
dence must be clear and unmistakeable that the parties
intended to waive this statutory right. See Park-Ohio In-
dustries, 257 NLRB 413 (1981), enfd. 112 LRRM 3089
(6th Cir. 1983); Operating Engineers Local 18 (Davis-
McKee), 238 NLRB 652 (1978). In assessing such evi-
dence, the Board will examine not only the contractual
provisions and the completeness of the contract relied on
to support a "waiver" contention, but will also evaluate
the negotiations leading thereto and surrounding circum-
stances. Columbus Electric Co., 270 NLRB 686 (1984);
Angelus Block Co., 250 NLRB 868, 877 (1980); McDon-
nell Douglas Corp., 224 NLRB 881, 895 (1976). The
Board has signaled that a waiver of such statutory rights
shall not be lightly inferred. Rockwell International Corp.,
260 NLRB 1346 (1982); Universal Security Instruments,
250 NLRB 661, 662 (1980).
In applying the foregoing principles to the instant case,
I find that the record falls short of establishing a contrac-
tual waiver. In arriving at this conclusion, it is noted,
inter alia , that the contract itself makes no express refer-
ence to relocation. In fact, section 10.13 deals only with
plant closure. While the scope of the contract is confined
to three plants including the New Orleans facility and
the management-rights clause provides that "the right
. .. to introduce new or improved production methods
or facilities [is] vested in the Company," I am unable to
conclude, without more, that the parties contemplated
such language to include the term relocation. Thus, I
find the General Counsel's interpretation plausible, that
938 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by such- language, "management [merely] retained the
necessary steps to- upgrade the 'production methods' and
`facility" in order to ensure the plant's continued viabili-
ty.'? In any event,' I am unpersuaded that the-provisions
relied on by Respondent represent "clear" and "unmista-
keable" evidence of an intention by the parties to waive
bargaining over the decision to relocate.
Nor does the surrounding circumstances shed any light
on this subject or otherwise tend to support Respond-
ent's contention. For example, it is noted, that the record
is. devoid. of any evidence tending to show that the par-
ties ever discussed the subject of relocation during the
negotiations leading to the disputed provisions or the lan-
guage otherwise contained in the contract. Given the
state. of this record,- I cannot find that the Union volun-
tarily or consciously waived its right by contract to bar-
gain over the decision to relocate. Accordingly, I reject
Respondent's reliance on contractual waiver.
Having, rejected Respondent's contractual waiver con-
tention, the question remains whether the Union, by its
conduct, waived any rights it may have had to bargain
over. the- decision to relocate.- In this latter regard, Re-
spondent relies principally on the failure by the Union to
make any proposal to.save the plant since early Novem-
ber 1982, when it (assertedly) learned of the decision to
close . and relocate to the southern market , and instead,
the Union proceeded to negotiate a closing agreement
without ever claiming that its consent to the "decision"
was required.
Although I cannot accept the-predicate facts as ex-
pressed by • Respondent ; in. their entirety, 18 I find that the
total record-supports the legal conclusion of an implied
union waiver. Accepting the Union's version that it first
learned on January 28, 1983,. of Respondent's plans to re-
locate, it did not then or thereafter submit any proposal
to dissuade Respondent therefrom, 19 but instead it made
some vague assertions to company representatives that it
was not waiving contractual or other legal rights. While
the Union insisted on incorporating nonwaiver language
in the "Memorandum of Agreement" (close down agree-
18 For example , I find that the Respondent did not inform the Union
of any intention to relocate until the meeting of January 28, 1983 I rely
largely on crediting the General Counsel's witnesses over Respondent's
witnesses , where, in conflict , on this issue In assessing credibility, it is
noted , inter alia , that while Plant Manager Strickler testified that Reilly
told the Union at the December 7 meeting of the Company's intention to
relocate, he later acknowledged , on cross-examination, that Reilly never
used that term The validity of this credibility assessment tends to be con-
firmed by Respondent 's failure to make any reference to relocation either
in its posted notice to employees (R Exh 26) or in its written notice to
the Union (G.C Exh . 9) While it is undisputed that Reilly indicated that
Respondent would not abandon the southern market, such, without more,
is at best ambiguous and inadequate to satisfy-notice requirements=of an
intention to relocate For example , I cannot discern from Reilly 's refer-
ence (as noted by the General Counsel ) "whether Respondent intended
to service the southern market from its Chicago or Cleveland locations,
relocate within the scope of the current contract, or relocate elsewhere."
Given this finding, and noting that the original charges were filed on
May 17 , 1983 (G C Exh 1 (a)), I further find merit in Respondent's 10(b)
defense but only insofar as the complaint alleges unfair labor practices as
having occurred about November 3, 1982, or more than 6 months before
the filing of the aforesaid charges (See G C Exh 1(e), par 10(a) )
19 The parties last met on March 4, 1983, in an abortive attempt to
negotiate a shutdown agreement It appears that the only material issue
then in dispute was whether to include nonwaiver language in the agree-
ment -
ment),-this without more falls short of putting Respond-
ent on notice that the Union was objecting to its plans to
relocate, particularly as the waiver language is so broad-
ly or generally stated and without any reference to "re-
location."20 Further, the-Union's inquiries with regard to
transfer opportunities at Canton also tends to reflect an
acceptance of Respondent's decision as does the Union's
participation in "effects" bargaining otherwise.
The Union knew as early as November 2, 1982, that
Respondent was seriously contemplating a permanent
shutdown of the New Orleans facility. It is undisputed
that Respondent expressed a willingness to listen to a
union proposal to save the plant. Yet, the Union relied
solely on Respondent to make such a proposal, as reflect-
ed by Union Subdirector Gonzales' letter dated January
3, 1983, where, inter alia, he stated, "[I]t is only reasona-
ble .. . that-any proposals to assure the continued oper-
ations of the plant must come from the Company." (G.C.
Exh. 5, emphasis added.) There is nothing in the record
to indicate that the Union had changed this assessment
when it later learned of Respondent's plans to relocate.
Given -the total circumstances of this case, including
the failure by the Union to make any proposal to retain
the facility at its location in New Orleans and its failure
to exercise due diligence with regard to demanding bar-
gaining over the decision, I find that the Union, in the
face of sufficient actual notice thereon, by its acts and
conduct, thereby has waived any rights on this subject it
may have had, as contended by Respondent . See, e.g.,
Golden Bay Freight Lines, 267 NLRB 1073 (1983); Talbert
Mfg., Inc., 264 NLRB 1051, 1054-1055 (1982); Coated
Products, 237 NLRB 139 (1978); Clarkwood Corp., 233
NLRB 1172 (1977); Globe Union, 222 NLRB 1081 (1976).,
Accordingly, Respondent did not violate Section 8(a)(5)
for these additional reasons .21
b. The 8(a)(3) issue
Applying the logic and holding of the Board in Mil-
waukee Spring II, and having previously found that Re-
spondent's actions relative to its "decision" and "effects"
on employees resulting therefrom, were predicated solely
on economic considerations and also noting , inter alia, a
dearth of evidence tending to show antiunion animus in-
dependently, I must reject the General Counsel's conten-
20 The Union 's waiver proposal states as follows "Nothing in this
Memorandum should be construed as a waiver of either parties legal
rights" (R Exh 20.)
Si The General Counsel argued in her original brief for the first time
that Respondent independently violated Sec 8 (a)(5) by "fail[mg] to bar-
gain in good faith about the effects of its decision to relocate " As previ-
ously found, the Respondent notified the Umon of its "decision " on Janu-
ary 28, 1983 The record disclosed , and I find , that Respondent made
itself available for "effects " bargaining from that date until about March
4, 1983, and that the only material issue then separating the parties from
executing a shutdown agreement was the Union 's insistence to impasse of
incorporating nonwaiver language . During this period, the Respondent
had engaged the Union in several "effects" - bargaming sessions and pro-
posed a closing agreement which, inter alia, provided for separation ben-
efits and the terms and conditions for those employees involved in the
dismantling and removal of equipment from the New Orleans plant.
(G C Exh 12) The Respondent also discussed transfer rights under the
contract and provided, as requested by the Union, information regarding
employee eligibility for pensions and vacations . In these circumstances, I
reject the General Counsel 's contention as not supported by the record.
INLAND STEEL CONTAINER CO
tion that Respondent's conduct was "inherently destruc-
tive" of employee rights within the meaning of Section
8(a)(3).22
Having found that Respondent's conduct did not vio-
late Section 8(a)(5) of the Act, and that, a fortiori, no
8(a)(3) violation could flow therefrom, I must now deter-
mine whether Respondent independently violated Sec-
tion 8(a)(3), as alleged, by refusing to employ unit em-
ployees employed at its New Orleans facility, at the new
location in Canton.
There is no credible evidence tending to show that
Respondent refused to employ at Canton, for discrimina-
tory reasons, .unit employees.from New Orleans.. While
the record disclosed that Respondent had objected to
transferring employees to Canton under the then existing
collective-bargaining agreemeit, I find plausible Re-
spondent's contention that this was because the new lo-
cation was beyond the scope of that agreement. The
record is devoid of any evidence tending to show that
Respondent failed to offer union-represented employees
employment, on the same basis as other applicants.
As for Respondent's delay in inviting unit employees
from New Orleans to apply for "hourly jobs at the
Canton plant" until August 12, 1983 (R. Exh. 27), or 3
days before the instant hearing opened, it is. noted, inter
alia, that the new location was not to become operational
until October 1983. In these circumstances, and noting
that Respondent and the Union have bargained collec-
tively for more than 4 decades without any evidence that
22 The General Counsel relies on NLRB v Great Dane Trailers, 388
U S 26 (1967), and its progeny, but see Milwaukee Spring II, supra at 11
939
Respondent had failed to conduct itself in a manner fully
consonant with the principles of the Act or that the Re-
spondent had otherwise violated the Act, I cannot find
on the total state of this record that Respondent discri-
minatorily treated the employees at New Orleans in vio-
lation of Section 8(a)(3) as alleged . Accordingly, I shall
recommend that this allegation be dismissed in its entire-
ty.
CONCLUSIONS OF LAW
The Respondent, Inland Steel Container Company, is
an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
2. United Steelworkers of America, AFL-CIO-CLC,
Local Union 2179 is, and has been at all times material
herein, a labor organization within the meaning of. Sec-
tion 2(5) of the Act.
3. The Respondent did not, as alleged , engage in con-
duct violative of Sections 8(a)(5), (3), and (1) and 8(d) of
the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed23
ORDER
It is ordered that the complaint in this proceeding be
dismissed in its entirety.
23 If no exceptions are filed as provided by See 102 46 of the Board's
Rules and Regulations , the findings, conclusions, and recommended
Order shall , as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses .