3-V, Inc.

National Labor Relations Board - Administrative Judge Opinions

Apr 27, 2006

11-CA-020894 (N.L.R.B. Apr. 27, 2006)

JD(ATL)–17–06
Georgetown, SC

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE

3-V, INC.

and

UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY, ALLIED-
INDUSTRIAL AND SERVICE WORKERS
INTERNATIONAL UNION (USW)
Cases 11–CA–20894–1
11–CA–20895–1

Jasper C. Brown, Jr., Esq., for the General Counsel.
William H. Floyd, III, and Justin M. Grow, Esqs., for the
Respondent.
Mr. Benjamin H. Montgomery for the Charging Party.

DECISION

Statement of the Case

George Carson II, Administrative Law Judge. This case was tried in Georgetown, South
Carolina, on February 22 and 23, 2006. The complaint issued on December 29, 2005.1 It
alleges that the Respondent violated Section 8(a)(1) and (5) of the National Labor Relations Act
by unilaterally failing to give employees an annual wage increase and failing to pay employees a
semi-annual safety bonus on July 1. The Respondent's answer denies that it violated the Act. I
find that the Respondent did violate the Act as alleged in the complaint.

On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel and Respondent, I make the following

Findings of Fact

I. Jurisdiction

The Respondent 3-V, Inc., the Company, is a Delaware corporation engaged in the
manufacture and non-retail sale of chemical specialty products at its facility at Georgetown,
South Carolina, at which it annually purchases and receives goods and materials valued in
excess of $50,000 directly from points outside the State of South Carolina. The Respondent
admits, and I find and conclude, that it is an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.

The Respondent admits, and I find and conclude, that United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union
(USW), the Union, is a labor organization within the meaning of Section 2(5) of the Act.

1 All dates are in 2005 unless otherwise indicated. The charges were filed on September 27.

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II. Alleged Unfair Labor Practices

A. Background

The Company has operated a facility in Georgetown, South Carolina, since the late
1970s. Initially incorporated as VVV Chemical Company, it now operates as 3-V, Inc. It is an
international corporation and its Board of Directors is located in Italy. It manufactures specialty
chemicals used by various industries including the textile, paper, and plastic industries. Among
the chemicals it produces are compounds that make letter paper whiter and compounds that
serve as thickening agents. A component of the chemical products that serve as thickening
agents is glacial acrylic acid, which is delivered to the Company’s facility in liquid form and
which must be maintained within certain temperature limits. The term “glacial” relates to the
purity of the acrylic acid which is a petroleum byproduct. Suppliers of glacial acrylic acid are
limited, thus the price of the product is subject to fluctuation depending upon various factors
including events that interrupt the supply and increased demand for the product.

At least since 1995, until the events that are at issue in this proceeding, the Company
has granted an annual wage increase to hourly employees in the summer. Typically, the
increase would be announced in late July or early August, retroactive to July l. In 1995, the
employees received a 3 percent increase. Director of Human Resources Gordon Hudson was
unable to locate the documents establishing the exact percentage of the increases given in
1996, 1997, and 1998, but the Company stipulated that increases were given in those years. In
1999 a 3 percent across-the-board increase was implemented, in 2000 the increase was 2
percent, in 2001 it was 2.1 percent, in 2002 it was 3 percent, and in 2003 it was 2 percent.

Director of Human Resources Hudson, in late spring, would perform a survey to
determine what other employers in the Georgetown area were paying employees and what
increases they were giving in order to determine how “we [3-V] stack up with that and what's the
comparison there.” He would then prepare a proposal that was reviewed locally and then
“presented to the Board in Italy for their review and approval.” According to Hudson the final
approval was “totally discretionary,” and the Board “frequently” adjusted the recommendations
in the proposal. Hudson did not testify to the significance of the adjustments made by the Board.
Until 2004, so far as the record shows, an increase of between two and three percent was
always given. Some employees, including James Mayfield who was hired in 1990, referred to
the annual wage adjustment as a “cost of living raise.” When Mayfield was hired, Ann Wells was
the Human Resources person. Director Hudson denied that he ever referred to the July raises
as cost of living raises and noted that the amounts given did not match the cost of living index.
Notwithstanding any such correlation, Hudson confirmed that it was “an annual event to review,
recommend, seek approval and implement” a wage plan for the hourly employees. Adjustments
in the compensation of salaried employees typically occurred in January.

In 1999, the Company introduced a safety incentive bonus plan that was thereafter
modified in 2000 and again in 2001. Since 2001, the safety incentive bonus has been fixed at
$15,000 per six month period with a formula set for dividing the bonus by department. Since its
introduction in 2000, the Company, until July 2005, had never failed to pay the safety bonus.
Hudson testified that the safety bonus was $30,000, “divided into two $15,000 increments.”

In the summer of 2004, Director Hudson had submitted a wage adjustment proposal for
approval, but it had not been acted upon by the Board of Directors as of early August.

B. Events between August 2004 and December 31, 2004

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Prior to 2004, the Company received more than half of the approximately nine million
pounds of glacial acrylic acid that it annually used from Celanese Corporation. In late 2003,
Dow Chemical Company acquired the component of Celanese that manufactured glacial acrylic
acid and began reducing the monthly allocation of the acid to 3-V. The diminution in the supply
of glacial acrylic acid was international. Chemical Week, in December 2004, reported that
producers stated that increased “demand, production glitches, and cutbacks in the industry
have tightened the acrylic acid market in the past year.” On August 13, 2004, Dow Chemical
informed 3-V that it would no longer supply it with glacial acrylic acid. This created a production
crisis. The Delta II plant, which produced one of the product lines that used glacial acrylic acid,
was shut down and seven employees were laid off. Through extraordinary efforts by top
management officials and executives in Italy, the Company was able to obtain sufficient acid to
continue operating and, after several weeks, the Delta II plant resumed production.

Glacial acrylic acid had typically sold for about 50 cents a pound. When the supply
shrank in 2004, the price increased. The Company’s efforts to assure a sufficient supply of the
acid, which included purchases on the spot market, required paying a premium price,
sometimes as high as two dollars a pound. The financial burden resulted in the termination of
some salaried employees. On November 15, 2004, the Board of Directors terminated John
Savoretti, who had been hired by the Board as President of 3-V in the United States in 2002.

Employees credibly testified to occasions late in 2004 and early in 2005 upon which they
had to seek places with controlled temperature in which to store glacial acrylic acid that was
being delivered. That testimony confirms that shipments were not being delivered pursuant to a
regular schedule but were erratic and dependent upon the Company’s success in making deals
to obtain the acid from sources other than the regular deliveries from Dow.

The Company made no announcement to employees regarding their anticipated 2004
wage increase in late July or early August. There had also been no announcement to
employees of the crisis caused by Dow’s cutting off its allocation of glacial acrylic acid in
August. In September 2004, approximately 70 employees signed a petition seeking an
explanation for the absence of an announcement regarding their anticipated wage increase,
which would have been retroactive to July 1, 2004.

On October 19, 2004, President Savoretti, Plant Manager John Cintioni, and Director
Hudson met with all employees to explain the situation in which the Company found itself. Four
meetings were necessary in order to accommodate the shift schedules of the employees. Both
hourly and salaried employees were present at the respective meetings. All witnesses agree
that the shortage of glacial acrylic acid was explained and that statements were made relating
to the absence of the anticipated annual wage increase.

Director Hudson prepared a summary of the meetings based upon notes taken by his
assistant which reports that President Savoretti stated, “At this time it is necessary that we
suspend any further pay increases until we are able to resolve this situation.”

Employees agree that they were told that their 2004 raise was not immediately
forthcoming. James Mayfield recalled that, at the meeting on October 19, 2004, Hudson stated
that he “couldn’t do anything right then” but that the employees would “still get a raise for 2004
and it’d be retro[active] to July 1st.” Although Hudson did not deny making that statement, it
proved to be untrue. Employee Randy Thompson recalled that Hudson stated that there were
“not going to be any pay raises at all, … [t]hey were just [going to] quit giving raises at all for
that year.” Employee Ernest Parsons recalled that Hudson said “that we would have to talk

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about that [raises] at a later date. And that for now everything was put on hold.” Charles Woods
recalls that there was “a hold on all the raises.”

Hudson testified that President Savoretti informed the employees that the supply
problem with regard to glacial acrylic acid called for “drastic steps” and would “involve freezing
all the wages and salaries.” Manager Kevin Blakely, when asked whether Savoretti spoke with
employees about a wage freeze answered that he stated that “all the wages would be frozen
until further notice.” I do not credit either Hudson or Blakely's recollection of Savoretti’s remarks
insofar as they report a reference to freezing. The summary prepared by Hudson reports that
Savoretti stated that it was necessary to “suspend any further pay increases until we are able to
resolve this situation.”

Director Hudson testified that the “freeze” affected normal step increases, “any wage
improvements,” but that “[w]e made two changes in December of '04.” Hudson did not specify to
whom the pronoun “we” referred. On December 22 and 23, 2004, about a month after the
termination of President Savoretti who had announced the suspension of pay increases, the
Company held meetings with the employees and announced that step increases would be
resumed in January and that it “was communicated” that a “one time payment of $15,000 for a
safety bonus for January 2005 would be distributed.” Hudson did not identify who approved the
foregoing payments or when that approval was given.

Hudson testified that the annual fixed dollar amount of the safety bonus was $30,000,
“divided into two $15,000 increments to be distributed in January and in July of the ensuing
year. So when it was approved, as part of an economic plan in July of one year, those amounts
would be distributed in the following January and the following July.”

The record does not reflect the amount of wage increase that Hudson recommended in
the summer of 2004. He testified that the proposal he submitted to the Board of Directors in the
summer of 2004 had not been acted upon before the Dow announcement that it was ceasing to
provide glacial acrylic acid.

C. Events in 2005

Early in 2005, the Union began an organizational campaign at the Company. Campaign
issues included the absence of a wage increase since July 2003 as reflected in a leaflet
distributed by union proponents in March. The Respondent’s brief incorrectly states that the
leaflet “castigated the Company for having the freeze.” There is no mention of a “freeze” in the
leaflet. It complains that the employees had not received a raise “in over 2 years.” (In actuality
the period, since July 1, 2003, was three and a half months less than two years.)

Even though the absence of a wage increase was a campaign issue, the Company, in a
letter to employees dated March 21 from Director Hudson, informed the employees that the
Company had hired new engineers “to drive the technologies we know will be needed to
diversify our product offerings and avoid repeated perils of this nature.” The letter then states
that the choice the Company had to make was “using critically limited resources to provide short
term raises or to build the foundation for long term growth and opportunities for us all.”

On April 28, the Union was certified as the exclusive collective bargaining representative
of the Company’s production and maintenance employees.2 Bargaining began on June 6. At the

Continued
2 The appropriate unit is: All production and maintenance employees, including

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_________________________
outset of negotiations, the parties agreed to bargain regarding contractual language before
addressing economics. Whether this aspect of the bargaining protocol to which the parties
agreed was initially proposed by the Union rather than the Company is immaterial.

International Representative Benjamin Montgomery was aware that employees were
complaining that they had not received a raise in almost two years, since July 2003. He knew
that “some people … had gotten some type of a raise,” but he was unaware of the basis for the
wage increase. He testified that he was not formally aware of a wage freeze, that he “had been
told a lot of things” by employees “but with no certainty.” The Company did not inform the Union
that, following the failure of the Company to grant a wage increase on July 1, 2004, wage
increases had been suspended on October 19, 2004, or that wages were frozen. The only
document relating to wages that is in evidence was the communication distributed to employees
on March 21 which neither referred to a wage freeze nor the statements of former President
Savoretti on October 19, 2004, regarding a suspension of pay increases. Following the election
and certification of the Union, Montgomery “assumed that the wage increases and other things
would continue as their [the employees’] other benefits had.”

The Company never stated to the Union that it intended to deviate from the “annual
event” of reviewing, recommending, seeking approval and implementing a wage plan for the
hourly employees. The Company never informed the Union that the July safety bonus would not
be paid. The safety bonus was not paid. No announcement of a wage adjustment retroactive to
July 1 was made in July or early August. On September 27, the Union filed the charges herein.

The Union did not inform the Company of its intention to file charges. At the bargaining
session on September 30, following the filing of the charges, Counsel for the Company, who
serves as chief spokesperson, told the Union that the impact from the interruption of the regular
supply of glacial acrylic acid had “continued into 2005 and was a continuing source of financial
difficulty for the business, that we were still in a recovery cycle and that the freeze was still in
effect.” So far as credited evidence shows, that statement was the first occasion upon which the
Company used the term “freeze.”

Hudson testified that the safety bonus was included in the proposal that he submitted in
the summer of 2004 and upon which the Board did not act. He did not testify to what actions
were taken to permit the announcement in December 2004 that the bonus would be paid in
January 2005, nor did he address the approval for the resumption of step increases which was
announced contemporaneously with the announcement of payment of the safety bonus.

Executive Vice President of Finance and Administration Enrico Sigismondi admitted that
the Company, on the basis of its performance prior to August 2004, posted a profit in 2004. In
2005, the price of glacial acrylic acid averaged about one dollar a pound, double the 50 cents a
pound price for which it had sold early in 2004. The Company uses over 9 million pounds of this
product a year, thus the annual cost for this component increased over four million dollars.
Sigismondi’s uncontradicted testimony is that the Company did not post a profit in 2005, but he
acknowledged that the annual independent audit had not been performed.

Employee James Mayfield, when asked whether it was not true that salaried employees
had not received an across-the-board wage increase since October 2004 answered, “From what
warehouse/logistics and plant clerical employees, employed by Respondent at its Georgetown,
South Carolina, facility; excluding quality control employees, office clerical employees, technical
employees, and guards, professional employees, and supervisors as defined in the Act.

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I understand they just got a nice raise.” Counsel implicitly admitted the accuracy of that
response when he asked Mayfield, “In 2006, correct?” and Mayfield answered, “Right.”

So far as this record shows, no compensation plan for hourly employees was prepared
or submitted for approval to the Board of Directors in 2005. There was no testimony regarding
communications between management at Georgetown and the Board of Directors with regard to
the absence of a submission of a compensation plan for hourly employees in 2005. Despite the
absence of a profit in 2005, there was no testimony regarding the approval of the wage increase
for salaried employees effective in early 2006, nor was there testimony relating to approval of a
Christmas bonus given to all employees in December 2005.

Hudson admitted that the Company did not give notice to the Union that there would be
no wage increase for hourly employees in the summer of 2005, retroactive to July 1, or that the
July 1 safety bonus would not be paid.

D. Credibility Considerations

I cannot credit Director Hudson’s testimony that he was unaware of the Company’s
financial performance in 2004 or 2005. His denial that he had “any financial numbers for the
business” when he was the individual responsible for developing the compensation proposal
annually submitted to the Board of Directors for approval defies belief and is contradicted by the
testimony of Executive Vice President of Finance and Administration Sigismondi. Sigismondi
testified that he talked with the Human Resources Department “regarding the grant of wages
and bonuses,” that “we sit down together and we discuss the figures” and that Director Hudson
“prepares a plan” in conjunction with his, Sigismondi’s, office.

The Respondent, in its brief, asserts that there was an “announcement of an indefinite
wage freeze,” and its arguments are predicated upon that premise. I have not credited Hudson’s
testimony that Savoretti announced an indefinite wage freeze. Employees recall being told that
their 2004 wage increase was “on hold.” As reflected in the Company’s own document,
President Savoretti told the employees, “At this time it is necessary that we suspend any further
pay increases until we are able to resolve this situation.” [Emphasis added.]

The Respondent’s brief consistently uses the term “wage freeze.” Although Hudson, in
testimony, and Counsel for the Respondent, in questions asked of the witnesses, also
consistently used the term “wage freeze,” the credited evidence shows that the term “wage
freeze” was first used on September 30 when Counsel used it in an attempt to defend the
Company’s actions after the charges herein were filed.

E. Analysis and Concluding Findings

The complaint alleges that the Respondent unilaterally failed to grant “the annual cost of
living/wage increase” on July 1 in accord with its past practice and unilaterally failed to pay the
safety bonus on July 1. There is conflicting testimony regarding whether the Company ever
represented to employees that the annual wage increase was a cost of living adjustment tied to
national or regional cost of living figures. Regardless of what any employee might have been
told, there is no probative evidence establishing that there was, in fact, such a connection.

Director Hudson admitted that it was “an annual event to review, recommend, seek
approval and implement” a wage plan for the hourly employees and that the first step in that
process was a survey of area wage practices. The foregoing testimony and uncontradicted
evidence of the Respondent’s past practice establish that an annual wage increase was a term

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and condition of employment for hourly employees.

The General Counsel contends that this is a straightforward case in which the
Respondent deviated from its past practice without notice to and bargaining with the Union.

The Respondent does not dispute that there was no notice to or bargaining with the
Union but contends that it maintained the status quo, that wages and benefits were frozen at the
time its bargaining obligation attached on April 28 when the Union was certified and that a
unilateral change would have occurred “if it changed the status quo by ‘unfreezing’ its
employees’ wages.”

Critical to this decision is whether a wage freeze was in effect. Contrary to the
Respondent’s contention, I find that there was not. The Respondent’s brief refers to “[t]he
Company’s October 2004 announcement of an indefinite wage freeze.” There is no credible
evidence of any such announcement. The employees were never advised that there was a
wage freeze. As Counsel for the General Counsel points out, employees, after having submitted
a petition regarding the Respondent’s failure to grant a raise in 2004, were, for the first time, told
in October by former President Savoretti of the supply problem regarding glacial acrylic acid and
that pay increases were suspended “until we are able to resolve this situation.” Savoretti’s
comments were made in the context of an employee petition requesting an explanation
regarding the absence of the 2004 increase. No memorandum or other document was ever
distributed to employees stating that their wages were frozen or that the suspension of pay
increases was indefinite. Savoretti was terminated in November. In December it was announced
that step increases were being resumed and that the January safety bonus would be paid. On
March 21, the employees were informed that the Respondent had hired new engineers pursuant
to its decision to take that action rather than “using critically limited resources to provide short
term raises.” This discrete action was not placed in the context of a continuation of the
suspension of pay increases that former President Savoretti had announced in October.

Thus, as of March 21, 2005, the information provided to employees established that the
suspension of pay raises until the situation had been resolved was no longer operative. The
Respondent was sufficiently satisfied with its supply of glacial acrylic acid albeit at a higher cost
that it had hired new engineers “to build the foundation for long term growth” rather than grant
hourly employees “short term raises.” No mention was made that the denial of raises was a
continuation of the suspension announced by former President Savoretti due to the supply of
glacial acrylic acid. A different rationale was given. Although being denied “short term raises,”
the employees were not informed that the Respondent intended to deviate from its past
practice, the “annual event” of a summer wage increase.

The Respondent’s brief does not address the letter of March 21 which explains the
decision that the Respondent had made with regard to its allocation of “critically limited
resources.” Although the reference to “short term raises” was not explained in the letter, it
certainly could have no meaning other than that no raise for 2004 was going to be given,
retroactively or otherwise. The letter does not refer to a “wage freeze,” a continuation of a “wage
freeze,” or an inability to lift a “wage freeze.” The absence of “short term raises” is placed in the
context of a managerial decision relating to “critically limited resources.” It does not place that
action in the context of a continuation of the suspension of wage increases announced by
former President Savoretti in October. The letter does not inform employees that, although not
being given “short term raises,” they should not, consistent with the Respondent’s past practice,
anticipate a raise announcement in July or early August 2005 retroactive to July 1. There was
no communication to employees or to the Union that the Respondent was abandoning its past
practice of annual wage increases for hourly employees in the summer, retroactive to July 1.

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The Board, in Daily News of Los Angeles, 315 NLRB 1236 (1994), quoted with approval
the language of the Court of Appeals in NLRB v. Dothan Eagle, 434 F.2d 93, 98 (5th Cir. 1970):

The cases make it crystal clear that the vice involved in both the unlawful increase
situation and the unlawful refusal to increase situation is that the employer has changed
the existing conditions of employment. It is this change which is prohibited and which
forms the basis of the unfair labor practice charge.
….
In other words, whenever the employer by promises or by a course of conduct has made
a particular benefit part of the established wage or compensation system, then he is not
at liberty unilaterally to change this benefit either for better or worse during … the period
of collective bargaining. Both unprecedented parsimony and deviational largess are
viewed with a skeptic's eye during ... bargaining. In those cases where the employer was
found guilty of an unfair labor practice for withholding benefits during ... the process of
collective bargaining, the basis of the charge was a finding that the employer has
changed the established structure of compensation. [Emphasis in the original.] Id at
1237-1238.

The Board, in Lamonts Apparel, 317 NLRB 286, 288 (1995) applied the foregoing
principle and found a violation of the Act where the respondent “failed to make a
recommendation regarding a wage increase based on the data it compiled in its market survey”
and discontinued “its customary wage adjustments in October without notice to the Union or an
opportunity to bargain to agreement or impasse.”

The Union was never told that there was a “wage freeze.” Although the Respondent
asserts that the status quo was that wage increases were frozen, the probative evidence
establishes otherwise. After the employees submitted their petition seeking an explanation for
the absence of their 2004 wage increase, they were informed of the glacial acrylic acid supply
problem and told by former President Savoretti that pay increases were suspended until the
Respondent was “able to resolve this situation.” When the situation had been resolved
sufficiently to permit the hiring of new engineers, the employees, on March 21, were informed
that the Respondent had made a decision to “build the foundation for long term growth” by hiring
new engineers rather than providing “short term raises.” There was no assertion that this action
constituted a continuation of the suspension of pay increases announced by former President
Savoretti. It was a discrete event that affected only “short term raises.” Neither the employees
nor the Union were informed that the Respondent intended to deviate in the summer of 2005
from what Hudson admitted was “an annual event to review, recommend, seek approval and
implement” a wage plan for the hourly employees. If the Respondent had acted consistently with
that past practice, Hudson would have conducted a survey to determine what increases area
employers were giving and to learn how “we [3-V] stack up with that and what's the comparison
there,” and submitted a proposal to the Board for action that would have been retroactive to July
1. The grant of a wage increase to salaried employees in early 2006 and the gift of a Christmas
bonus in 2005 to all employees confirm that profitability did not preclude the grant of monetary
benefits to employees.

Neither the employees nor the Union were informed that the suspension of pay
increases announced by former President Savoretti in October of 2004 meant that the
Respondent was changing its past practice relating to annual wage increases. He did not state
that the Respondent was abandoning the “annual event” of submission of a wage plan to the
Board of Directors for approval. The March 21 letter informs the employees of the allocation of
limited resources as a discrete event. It does not mention a continuing suspension of pay

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increases or a wage freeze. At no time was the Union informed that the Respondent intended to
abandon its past practice of granting a summer wage increase to hourly employees.

The failure of the Respondent to follow its established protocol regarding wage
increases for hourly employees was a unilateral change. The grant of raises to salaried
employees in early 2006 establishes that the financial performance of the Respondent did not
preclude the granting of a wage increase to hourly employees. Although Hudson testified that
the amount of the annual raise set by the Board of Directors was “totally discretionary” and that
the Board “frequently” adjusted his recommendations, the Respondent presented no evidence
relating to the significance of any adjustments made by the Board. In 1995 and from 1999
through 2003, the annual increase was never less than 2 percent and never more than three
percent. The fact that the amount of any increase was dependent upon the discretion of the
Board of Directors does not negate a bargaining obligation. "[A]n employer that has a practice of
granting merit raises that are fixed as to timing but discretionary in amount may not discontinue
that practice without bargaining to agreement or impasse with the union.” Harrison Ready Mix
Concrete Co., 316 NLRB 242 (1995). The foregoing principle is applicable in situations involving
across-the-board increases rather than individual merit raises. McClain E-Z Pack, Inc., 342
NLRB No. 27, JD slip op. at 8 (2004). The Respondent, by failing to continue its past practice of
granting an annual wage increase to hourly employees retroactive to July 1 without notice to
and bargaining with the Union, violated Section 8(a)(5) of the Act.

The Respondent argues that, even if it be found that there was a bargaining obligation,
the Union waived its right by failing to request bargaining and by agreeing to address
noneconomic issues prior to addressing economic issues at the bargaining table. Board
precedent is clear that an agreement to first address noneconomic matters at the bargaining
table simply sets the format for negotiations; it did not waive the Union's right to notice prior to
discontinuation of a past practice. See Vico Products Co., 336 NLRB 583, 598 (2001); Central
Maine Morning Sentinel, 295 NLRB 376, 379 (1989).

The Respondent contends that it had no obligation to bargain regarding the safety bonus
because of the “wage freeze,” because the Union waived its rights by failing to request
bargaining and by agreeing to first address economic issues, and because “the safety incentive
program was sufficiently discretionary and comparatively nominal so as not to constitute a term
and condition of employment.” Whether the Respondent intended to suspend safety bonus
payments is of no moment. It did not do so. The summary of the October 19, 2004, meeting
reports that Savoretti spoke only of suspension of pay increases. Benefits were not mentioned.
As discussed above, the Union did not waive its right to bargain, and the Respondent was
obligated to bargain before discontinuing this past practice. I reject the contention that the safety
bonus was discretionary and “comparatively nominal.” The undisputed testimony of Director
Hudson is that the annual dollar amount of the safety bonus was fixed at $30,000, “divided into
two $15,000 increments to be distributed in January and in July of the ensuing year.” The
Company did not inform the Union that there had been any deviation from its past practice of
paying $30,000 in two $15,000 increments. Although Hudson testified that payment of the
January 2005 safety bonus “was communicated” as a one-time event, he did not testify to what
approval was sought or given regarding the bonus or that he told employees that they should
not expect to receive their July 1 safety bonus payment. The Union was never advised that the
payment would not be made. The amount of the bonus was fixed and distributed on the basis of
the safety records in the respective departments. Two employees presented check stubs
reflecting payment in January 2005 of $95.09 and $125.40 respectively. Those amounts are not
nominal. The July 1 bonus payment was not made to the employees. The Union was not
advised that the July payment would not be made. By failing to pay unit employees the $15,000
July 1 safety bonus, the Respondent violated Section 8(a)(5) of the Act.

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Conclusions of Law
By failing to give notice to and bargain with the Union regarding the amount of its annual
employee wage adjustment, unilaterally discontinuing an annual wage increase retroactive to
July 1, 2005, and by failing to pay to employees their July 1, 2005, semiannual safety bonus, the
Respondent has engaged in unfair labor practices affecting commerce within the meaning of
Section 8(a)(1) and (5) and Section 2(6) and (7) of the Act.

Remedy
Having failed to bargain with the Union regarding an annual wage increase retroactive to
July 1, 2005, for unit employees, the Respondent must immediately put into effect an across-
the-board wage increase retroactive to July 1, 2005, and continue such increase in effect until it
negotiates with the Union in good faith to a collective-bargaining agreement or reaches an
impasse after bargaining in good faith, and make whole its unit employees for any loss of pay
they may have suffered due to its unilateral change in the manner prescribed in Ogle Protection
Services, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest as set forth in
New Horizons for the Retarded, 283 NLRB 1173 (1987). I am mindful that the foregoing remedy,
like that imposed in Daily News of Los Angeles, supra at 1241, will require application of a
formula “which will give a close approximation of the amount due.” Ibid. I am, as was the Board
in Daily News of Los Angeles, satisfied that such a formula can be constructed utilizing the
survey of area employers about which Director Hudson testified and the factors that informed
the decision to grant salaried employees a wage increase in January 2006.3
Having failed to pay to employees their semiannual safety bonus on July 1, 2005, the
Respondent must make whole its unit employees for any loss of pay they may have suffered
due to its unilateral change by paying the safety bonus with interest as set forth in New
Horizons for the Retarded, supra.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended4
ORDER
The Respondent, 3-V, Inc., Georgetown, South Carolina, its officers, agents,
successors, and assigns, shall

1. Cease and desist from

(a) Unilaterally changing the terms and conditions of employment of its unit employees
represented by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-

3 The Respondent argues that insofar as a violation of the Act is found that it be ordered to
bargain with regard to the amount of any wage increase. In McClain E-Z Pack, Inc., supra, the
Board modified the recommended order which only required bargaining and ordered that a
wage increase be put into effect and the employees made whole. That remedy, like the remedy
recommended herein, is consistent with the remedy ordered in Daily News of Los Angeles.
4 If no exceptions are filed as provided by Sec. 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
purposes.

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Industrial and Service Workers International Union (USW) by failing to give notice to and
bargain with the Union regarding the amount of its annual employee wage adjustment,
unilaterally discontinuing annual wage increases, and failing to pay the semiannual safety
bonus. The unit is:

All production and maintenance employees, including warehouse/logistics and plant
clerical employees, employed by Respondent at its Georgetown, South Carolina, facility;
excluding quality control employees, office clerical employees, technical employees, and
guards, professional employees, and supervisors as defined in the Act.

(b) In any like or related manner interfering with, restraining, or coercing employees in
the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) On request, bargain with the Union regarding the amount of its 2005 annual
employee wage adjustment.

(b) Immediately put into effect an across-the-board wage increase retroactive to July 1,
2005, and continue such increase in effect until it negotiates with the Union in good faith to a
collective-bargaining agreement or reaches an impasse after bargaining in good faith, and make
whole its unit employees for any loss of pay they may have suffered due to its unilateral change
in the manner set forth in the remedy section of this decision.

(c) Make whole its unit employees by paying them the unlawfully withheld semiannual
safety bonus with interest in the manner set forth in the remedy section of this decision.

(d) Preserve and, within 14 days of a request, or such additional time as the Regional
Director may allow for good cause shown, provide at a reasonable place designated by the
Board or its agents, all payroll records, social security payment records, timecards, personnel
records and reports, and all other records, including an electronic copy of such records if stored
in electronic form, necessary to analyze the amount of backpay due under the terms of this
Order.

(e) Within 14 days after service by the Region, post at its facility at Georgetown, South
Carolina, copies of the attached notice marked “Appendix.”5 Copies of the notice, on forms
provided by the Regional Director for Region 11, after being signed by the Respondent's
authorized representative, shall be posted by the Respondent immediately upon receipt and
maintained for 60 consecutive days in conspicuous places including all places where notices to
employees are customarily posted. Reasonable steps shall be taken by the Respondent to
ensure that the notices are not altered, defaced, or covered by any other material. In the event
that, during the pendency of these proceedings, the Respondent has gone out of business or
closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its
own expense, a copy of the notice to all current employees and former employees employed by
the Respondent at any time since July 1, 2005.

5 If this Order is enforced by a Judgment of the United States Court of Appeals, the words in the
notice reading “POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD” shall
read “POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF
APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”

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(f) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.

Dated, Washington, D.C. April 27, 2006

_____________________
George Carson II
Administrative Law Judge
JD(ATL)–17–06

APPENDIX
NOTICE TO EMPLOYEES

Posted by Order of the
National Labor Relations Board
An Agency of the United States Government

The National Labor Relations Board had found that we violated Federal labor law and has
ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities

WE WILL NOT unilaterally change the terms and conditions of employment of our production
and maintenance employees, including warehouse/logistics and plant clerical employees,
represented by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-
Industrial and Service Workers International Union (USW) by unilaterally changing their terms
and conditions of employment by failing to give notice to and bargain with the Union regarding
the amount of their annual employee wage adjustment, unilaterally discontinuing annual wage
increases, and failing to pay the semiannual safety bonus.

WE WILL, on request, bargain with the Union regarding the amount of the 2005 annual
employee wage adjustment.

WE WILL immediately put into effect an across-the-board wage increase retroactive to July 1,
2005, and continue such increase in effect until we negotiate with the Union in good faith to a
collective-bargaining agreement or reached an impasse after bargaining in good faith, and WE
WILL make whole our unit employees for any loss of pay they may have suffered, with interest,
due to our unilateral change in the manner set forth in the remedy section of this decision.

WE WILL immediately pay you the semi-annual safety bonus that we failed to pay on July 1,
2005, with interest.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed them by Section 7 of the Act.

3-V, INC.
(Employer)

Dated By
(Representative) (Title)

The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the
National Labor Relations Act. It conducts secret-ballot elections to determine whether employees want
union representation and it investigates and remedies unfair labor practices by employers and unions. To

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find out more about your rights under the Act and how to file a charge or election petition, you may speak
confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain
information from the Board’s website: www.nlrb.gov.
4035 University Pky., Suite 200, Winston-Salem, NC 27106–3325
(336) 631–5201, Hours: 8 a.m. to 4:30 p.m.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
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. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (336) 631–5244