A & W Foods, Inc.

National Labor Relations Board - Board Decisions

Sep 16, 1985

276 N.L.R.B. 129 (N.L.R.B. 1985)

A & W FOODS ,
-A & W Foods, Inc. and Local 880, United Food and
Commercial , Workers International Union,
AFL-CIO. Case 8-CA-17860
16 September 1985
DECISION AND ORDER
BY MEMBERS DENNIS, JOHANSEN, AND
BABSON
On 18 June 1985 Administrative Law Judge
Frank H. Itkin issued the attached decision. The
Respondent' filed exceptions and a supporting brief,
and the General 'Counsel fled an answering brief.
The National Labor Relations Board has delegat-
ed its authority, in, this proceeding to a three-
member panel.
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, I and
conclusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, A & W
Foods, Inc., Cleveland, 'Ohio,' its officers, agents,
successors, and assigns, shall take the action set
forth in the Order. ,
i The Respondent has excepted to some of the judge's credibility find-
ings The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the'clear preponderance of all
the relevant evidence convinces us that they are incorrect Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951)
We have-carefully examined the record and find no basis for reversing
the findings
Steven Wilson, Esq., for the General Counsel.
Lisa Mann, Esq., for the Respondent Company.
Lawrence Oberdank, Esq., for the Charging Party Union.
DECISION
FRANK H. ITKIN, Administrative Law Judge. An
unfair labor practice charge was filed in this case on Oc-
tober 25, and an amended charge was filed on December
7, 1984. A complaint issued on December 7, 1984, and
was amended later at- the hearing. The complaint alleges,
inter alia, that Respondent Company Violated Section
8(a)(5) and (1) of the Act by failing and refusing to pay a
wage increase provided for in the collective-bargaining
agreement of the parties. Respondent Company denies
violating the Act as alleged. A . hearing was held in
Cleveland, Ohio, on March 14, 1985. On the entire
record, including my observation of the demeanor of the
witnesses, and after due consideration 'of the briefs of
counsel, I make the following
129
FINDINGS OF FACT
Respondent, Company is engaged in the wholesale dis
tribution of meat and poultryproducts in Cleveland,
Ohio, and is admittedly an employer engaged in com-
merce as alleged. Charging Party Union is.admittedly a
labor organization as alleged.' The Union, at all times
pertinent here, has been and is the exclusive, bargaining
agent-of the Company's employees in the following ap-
propriate unit:
All employees in the.plants of the Employer located
in the jurisdiction of the Union; excluding all cleri-
cal employees, guards and supervisors'as defined in
the Act.
The Union and the Employer, have .executed successive
collective-bargaining agreements pertaining to the unit
employees, . the most recent agreement (G.C. Exr. 2)
being effective from August 15_1982, to August 15,
1985.
Ray De Santis, an ' officer of the Union, testified that
the 1982-1985 contract between'the parties provides for,
inter, alia, a 55-cent across-the-board wage increase on
August 15, 1984. (See G.C. Exh. 2, pp. 9-10.) However,
by letter dated July 25, 1984 (G.C. Exh. 3), Company
Vice President Robert Snow notified the Union:
- , Because of compelling financial reasons, we
regret to inform you that our Company cannot im-
plement the 55-cent-per-hour increase scheduled in
our contract with your Union to be effective
August 15, 1984. .
During earlier meetings we had made private fi-
nancial information, available to your Union, and
you should be informed and understanding of our
problem.
We are prepared to meet with, the Union to dis-
cuss this critical situation at any time. ^ f
Subsequently, during August 1984, as De Santis testi-
fied, the parties met "to discuss the Company's, request
for future concessions." The .Company's representatives
claimed that "competition was cutting into their oper-
ations," and "they were in financial desire and needed
help in the contract." The, Company wanted "to stand
pat on the present wages"; "some help in overtime pay";
and "possibly some relief in reducing the holiday benefits
and vacations." The Union 'responded: "it was too
severe"; "we negotiated in good faith and it [the agree-
ment] was accepted by the membership"; the "members
are looking for some kind of increase"; and "we don't
see any chance of that passing." Then, Company Vice
President Snow
indicated that, well I [Snow] could live with the va-
cation and the time and a half . . . and the holidays,
but I cannot implement the wage increase... .
The Union agreed "to take it [the Company's proposal]
to the membership." However, as De Santis explained, at
no time during the,course of this meeting did the Union
"tell Company representatives that [it] considered the
276 NLRB No. 20
130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contract to be reopened for negotiations simply because
of this meeting
Later on August 19 1984 at a special meeting of
the union membership attended by 81 members the
Union rejected the Company s proposal by a vote of
77 to 4 De Santis so advised the Company See General
Counsels Exhibit 4 the Unions letter to the Employer
pertaining to the special meeting and rejection and
concluding
If the Company fails to implement the increase by
August 29 the Union will file a class action gnev
ance for all members claiming wages due as well as
an unfair labor practice charge with the NLRB for
unilaterally changing the conditions of employment
under the present collective bargaining agreement
On August 22 the Employer notified the Union inter
alia that A & W Foods is financially unable to imple
ment the 55 cent per hour increase contractually sched
uled for August 15 1984 and consequently the Company
cannot and will not implement that increase (See
G C Exh 5 ) And as De Santis further testified this
scheduled wage increase was in fact never put into
effect (See stipulation Tr 29 )1
Company Vice President Snow generally related the
problems Respondent faced with its competitors and
their negative impact on the Employers operation He
cited pending anti trust litigation and generally asserted
in legal fees alone it s over 80 or 90 thousand dol
lars this does not [count ] the losses we took in
the sale of merchandise we figure we lost be
tween 350 to 450 thousand dollars starting out in
the summer of May June July, August September
1983
The Company according to Snow previously notified
the Union of the need for financial relief The Compa
ny took other business action to improve [its] oper
ations However the Company s economic condition
assertedly has not improved since 1984 On cross ex
animation Snow was asked Can you tell me what the
size of your losses were then from April 1983 to April
1984? He generally responded I believe the Company
showed a loss I don t have any figures but it was
the first time since we went into business that we ever
showed a loss 2
On cross examination De Santis recalled that the Union previously
had conducted an intensive audit of the Company s records and
books and it was indicated that the Company was profitable had some
management problems had a change in merchandise mix where they
were making money in some products and losing money on other prod
ucts they went into additional lines of foods [and] some were very
profitable Their losses were not as great as they indicated
2 See also the testimony of Michael Galassi the Employers operations
manager Galassi was in the unit poor to September 1984 and he asserted
that as a Union member [he was not ] told by any Union official about
the Company s economic status Galassi participated in the 1982 con
tract negotiations for the Union Galassi claimed that the Union had ac
knowledged that the Company s books showed a loss Galassi subse
quently participated in laying off employees He related inter alia, other
economy measures which were implemented by the Employer
I credit the testimony of De Santis recited above His
testimony is in essential part undisputed He impressed
me was a reliable and trustworthy witness On the other
hand the testimony of Snow and Galassi was vague in
complete general and at times unclear I do not find
Snow and Galassi on this record to be reliable wit
nesses
Discussion
In Connecticut Light & Power Co 271 NLRB 766
(1984) the Board concluded
that Section 8(d) of the Act protects a party to a
collective bargaining agreement from incurring a
bargaining obligation on proposing a midterm con
tract modification when the contract does not con
tam any reopener language Thus the Respond
ents did not violate the Act when they refused the
Union s request to bargain over a proposal they
made during the contract term
The Board explained
[N]othing in this section suggests a party making a
midterm proposal should be treated differently from
a party receiving such a proposal As the recipient of
a midterm proposal clearly has no duty to discuss
or agree to it the party proposing a midterm
modification does not incur a bargaining obligation
by tendering its proposal
And later in Herman Bros 273 NLRB 124 (1984) the
Board held
For the reasons stated in our recent decision in
Connecticut Light & Power [supra] we adopt the
judge s finding that [the union] did not tacitly agree
to reopen the contract thereby incurring a bargain
mg obligation simply by agreeing to discuss the Re
spondent s proposed midterm wage modifications
and offering its own counterproposals
In the instant case the Employer notified the Union
that it could not implement the wage increase sched
uled in our contract effective August 15 1984 The
Employer requested the Union to meet The Union later
met with the Employer listened to the Employers re
quest for future concessions didn t see any chance of
that passing and agreed to take back to the member
ship the Company s proposal that the Union waive or
freeze the scheduled wage increase The membership
overwhelmingly rejected this request The Union so ad
vised the Employer and made clear that
If the Company fails to implement the increase by
August 29 the Union will file a class action gnev
ance as well as an unfair labor practice charge
The scheduled wage increase was not implemented
Under the circumstances the Employers midterm unilat
eral modification of this scheduled vage increase was in
derogation of the bargaining obligation under Section
8(a)(5) and Section 8(d) of the Act Here as in Herman
A&WFOODS •- ' - 131
Bros. supra, the Union "'did not tacitly agree to reopen
the contract, thereby incurring a` bargaining obligation,
simply by agreeing to discuss,the Respondent's- proposed
midterm wage modifications . ,. .." 3
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce
as alleged.
2. The Union is a labor organization as alleged.
3. The Company violated Section 8(a)(5) and (1) of'the
Act by failing and refusing to pay a wage increase pro-
vided for in the collective=bargaining agreement of the
parties.
4. The unfair labor practices found above affect com-
merce as alleged.
REMEDY
To remedy the unfair laborpractices found above, Re-
spondent Employer will be directed to cease and desist
from engaging in such unlawful conduct or like and re-
lated conduct and to post the attached notice. Affirma-
tively, the Employer will be, directed to implement and
put into effect the hourly wage increase as provided in
the current contract of the parties and to make whole
the unit employees for all losses sustained as a result of
its failure to comply with this contractual provision, to-
gether with interest, as provided in Florida Steel Corp:,
231 NLRB 651 (1977). The Employer will also preserve
and make available to the Board, on request, all payroll
records and reports, and all other records, necessary and
useful to determine the amounts of backpay due and
compliance with this decision..
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed4
ORDER
The Respondent, A & W Foods, Inc., Cleveland,
Ohio, its officers, agents, ,successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain in good faith with
the Union, Local 880, United Food And Commercial
Workers International Union, AFL-CIO, the exclusive
bargaining representative of its employees in the appro-
priate unit described below, by failing and refusing to'
pay a wage increase as provided in the collective bar-
gaining agreement of the, parties. The appropriate unit is:
All employees in the plants of the Employer located
in the jurisdiction of the Union, excluding all •cleri-
3 Respondent asserts as justification its poor economic situation The
above authorities make it clear that the economic position of a party will
not privilege such a midterm modification In any event , the general,
vague, and unsubstantiated testimony of Snow and Galassi falls far short
of providing a sufficient basis to privilege this specific midterm modifica-
tion of a scheduled wage ' increase
-* 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 pur-
poses.
cal 'employees, professional: employees, guards and
supervisors as defined in the Act.
(b) In any like or related manner interfering with, re-
straining , 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) Implement and put into effect the' hourly wage in-
crease as provided in the current contract of the parties.
(b) Make whole the unit employees for all losses sus-
tained by its failure to comply with this contractual pro-
vision, together with interest, as provided in this Deci-
sion:
(c) Preserve and, on request, make available to the
Board.or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order. ' , -
(d) Post at its facility in Cleveland, Ohio, copies of the
attached notice marked "Appendix."5 Copies of said
notice, ,on forms provided by the Regional Director for
Region 8,, after being signed by the Respondent's author-
ized representative, shall be posted by the Respondent
immediately upon receipt and maintained for 60 consecu-
tive days in conspicuous, places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondent'to ensure
that said notices are not altered, defaced, or covered by
any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Decision, what steps Respond-
ent has taken to comply.
If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
APPENDIX "
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government'
WE WILL NOT fail and refuse to bargain in good faith
with the Union , Local 880, United Food and Commer-
cial Workers , International , Union , AFL-CIO, the exclu-
sive bargaining representative of our employees in the
following appropriate unit, by failing and refusing 'to pay
a wage increase as provided in the collective-bargaining
agreement of the parties . The appropriate unit is:
All employees in the plants of the Employer located
in the jurisdiction of the Union, excluding all' cleri-
cal-•emloyees, guards and supervisors as defined in
the Act. - ,
132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT in any like or related manner Interfere the Union and make whole our unit employees for all
with restrain or coerce you in the exercise of your losses sustained as a result of our failure to comply with
rights guaranteed by Section 7 of the National Labor Re this contractual provision together with interest
lations Act
WE WILL implement and put into effect the hourly A & W FooDs INC
wage increase as provided in our current contract with