Accurate Die Casting Co.

National Labor Relations Board - Board Decisions

Jan 12, 1989

292 N.L.R.B. 284 (N.L.R.B. 1989)

284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Accurate Die Casting Company and Local 491,
United Automobile , Aerospace and Agricultural
Implement Workers of America Case 3-CA-
12472
January 12, 1989
DECISION AND ORDER
BY MEMBERS JOHANSEN, CRACRAFT, AND
HIGGINS
On May 30, 1985, Administrative Law Judge
Harold B Lawrence issued the attached decision
On June 24, 1986, the Board, on motion of the
General Counsel, reopened the record and remand
ed the case to the judge for receipt of further evi-
dence and reconsideration I On January 5, 1987,
the judge issued the attached supplemental deci
Sion Thereafter, the Respondent filed exceptions
and a supporting brief, and the General Counsel
filed exceptions and a supporting brief, and an an
swering 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,2 and
conclusions and to adopt the recommended Order
of the supplemental decision as modified 3
We agree with the judge that the Respondent
unlawfully failed and refused to furnish to the
Union financial records, unilaterally changed terms
and conditions of employment without a valid im
passe in negotiations failed to recall strikers on
their application and threatened to replace perma-
nently employees found to be unfair labor practice
strikers We however, clarify the judge's recom
mended Order in several respects
The General Counsel excepts to the failure of
the judge to order that the Respondent make
whole the unfair labor practice strikers from the
dates of their unconditional offers to return to
work, rather than, as ordered by the judge, com
mencing the fifth day after the offers We find
merit in the General Counsel's exceptions and shall
modify the Order and notice 4
i Not included in bound volumes
2 The Respondent has excepted to some of the judge s credibility find
rags 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
3 We do not adopt the judge s inclusion of a visitatortal clause in his
recommended Order which we find unnecessary here Cherokee Marine
Terminal 287 NLRB 1080 (1988)
4 See Canterbury Villa 273 NLRB 1196 (1984)
Additionally, the General Counsel excepts to the
failure of the judge to order the Respondent to dis
miss strike replacements as necessary to effectuate
the unfair labor practice strikers' reinstatement, and
to provide for their reinstatement to a position sub
stantially equivalent in the event the prestrike posi
tions no longer exist We find merit in the General
Counsel's exception and shall modify the Order
Finally, the General Counsel excepts to the fail-
ure of the judge to order the Respondent, as part
of the remedy for its unilateral change of terms and
conditions of employment, to restore the status quo
ante and to make whole its employees for wages
and benefits lost as a result We find merit in the
General Counsel's exception and will modify the
Order 5
THE REMEDY
Having found that the Respondent, Accurate
Die Casting Company, has engaged in certain
unfair labor practices, we shall order it to cease
and desist and to take certain affirmative action de
signed to effectuate the policies of the Act
Having also found that the striking employees
were unfair labor practice strikers, we shall order
the Respondent to reinstate, or offer immediate and
full reinstatement to all of the striking employees to
their prestrike positions or, if those jobs no longer
exist, to substantially equivalent positions without
prejudice to their seniority or any other rights or
privileges previously enjoyed, dismissing, if neces
sary, any strike replacements The Respondent
shall also be required to make whole all employees
for any loss of earnings and benefits they may have
suffered as a result of the unlawful changes and
discrimination practiced against them Kraft Plumb-
ing, 252 NLRB 891 (1980) Backpay is to be com
puted as prescribed in Ogle Protection Service, 183
NLRB 682 (1970), and F W Woolworth Co, 90
NLRB 289 (1950), respectively with interest as set
forth in New Horizons for the Retarded 6
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified and set forth in full below and
orders that the Respondent, Accurate Die Casting
Company, Fayetteville, New York, its officers,
5 The judge concluded inter aha that the Respondent violated Sec
8(d) of the Act We note that Sec 8(d) defines the obligation to bargain
collectively it is not itself an unfair labor practice section of the Act
6 283 NLRB 1173 (1987) Interest on and after January 1 1987 shall be
computed at the short term Federal rate for the underpayment of taxes
as set out in the 1986 amendment to 26 US C § 6621 Interest on
amounts accrued prior to January 1 1987 (the effective date of the 1986
amendment to 26 US C § 6621) shall be computed in accordance with
Florida Steel Corp 231 NLRB 651 (1977)
292 NLRB No 39
ACCURATE DIE CASTING CO
agents, successors, and assigns, shall take the action
set forth in the Order as modified
1 Cease and desist from
(a) Failing and refusing to furnish to the Union,
on request, financial records showing the oper
ations and complete financial condition of the
Company
(b) Unilaterally implementing terms and condi-
tions of employment at variance with those con-
tained in its contract with Local 491, United Auto-
mobile, Aerospace and Agricultural Implement
Workers of America, which expired June 15, 1984
(c) Threatening to replace permanently, or re
placing permanently, employees who went on
strike on June 15, 1984
(d) Refusing to bargain in good faith with Local
491, United Automobile, Aerospace and Agricul
tural Implement Workers of America, as the exclu
sive representative of its employees in the follow-
ing appropriate unit
All production and maintenance employees at
the Fayetteville, New York facility, excluding
laboratory employees, draftsmen, office and
clerical employees, professional employees,
guards, watchmen and supervisors as defined
in the Act
(e) In any like or related manner interfering
with, restraining, or coercing employees in the ex
ercise of the rights guaranteed them by Section 7
of the Act
2 Take the following affirmative action neces
sary to effectuate the policies of the Act
(a) Restore all terms and conditions of employ-
ment to the status quo as it existed before the un
lawful unilateral changes were made, to the extent
such changes were detrimental to the employees
(b) Make whole any employees who may have
been detrimentally affected by the changes in terms
and conditions of employment, with interest on any
monetary losses the employees may have suffered,
in the manner set forth in the remedy section of the
decision
(c) Offer the unfair labor practice strikers who
made unconditional applications to return to work,
immediate and full reinstatement to their former
jobs or, if those jobs no longer exist, to substantial
ly equivalent positions, without prejudice to their
seniority or any other rights or privileges previous
ly enjoyed, dismissing, if necessary, persons hired
after June 15, 1984, and make them whole for any
loss of earnings and other benefits suffered as a
result of the discrimination against them, in the
manner set forth in the remedy section of the deci-
sion
(d) Remove from its files any references to the
unlawful reasons for its failure to recall, and notify
285
the striking employees in writing that this has been
done and that the reasons for the failure to recall
will not be used against them in any way
(e) On request, bargain in good faith with the
Union as the exclusive representative of the em-
ployees in the appropriate unit with regard to rates
of pay, hours of employment, and other terms and
conditions of employment, and embody in a signed
agreement any understanding reached
(f) Preserve and, on request, make available to
the Board or its agents for examination and copy
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order
(g) Furnish the Union, on request and within a
reasonable time, financial records showing the op-
erations and complete financial condition of the
Company
(h) Post at its facility at Fayetteville, New York,
copies of the attached notice marked "Appendix "7
Copies of the notice, on forms provided by the Re-
gional Director for Region 3, after being signed by
the Respondent's authorized representative, shall be
posted by the Respondent immediately upon re
ceipt and maintained for 60 consecutive days in
conspicuous places including all places where no
tices to employees are customarily posted Reason
able steps shall be taken by the Respondent to
ensure that the notices are not altered, defaced, or
covered by any other material
(i) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent 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 Nation
at 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
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 has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice
Section 7 of the Act gives employees these
rights
To organize
To form, join , or assist any union
286 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
To bargain collectively through representa
tives of their own choice
To act together for other mutual aid or pro
tection
To choose not to engage in any of these
protected concerted activities
WE WILL NOT fail and refuse to furnish to the
Union , on request , financial records showing the
operations and complete condition of the Compa-
ny
WE WILL NOT unilaterally implement terms and
conditions of employment at variance with those
contained in our contract with Local 491, United
Automobile , Aerospace and Agricultural Imple
ment Workers of America , which expired June 15,
1984
WE WILL NOT threaten to replace permanently,
or replace permanently , employees who went out
on strike June 15, 1984
WE WILL NOT refuse to bargain in good faith
with Local 491, United Automobile , Aerospace
and Agricultural Implement Workers of America,
as the exclusive representative of our employees in
the following appropriate unit
All production and maintenance employees at
our Fayetteville, New York facility , excluding
laboratory employees , draftsmen , office and
clerical employees , professional employees,
guards, watchmen and supervisors as defined
in the Act
WE WILL NOT in any like or related manner
interfere with , restrain , or coerce you in the exer
cise of the rights guaranteed you by Section 7 of
the Act
WE WILL restore all terms and conditions of em-
ployment to the status quo as it existed before the
unlawful unilateral changes were made, to the
extent such changes were detrimental to the em-
ployees
WE WILL make whole any employees who may
have been detrimentally affected by the changes in
terms and conditions of employment , with interest
on any monetary losses the employees may have
suffered
WE WILL offer the unfair labor practice strikers,
who made unconditional applications to return to
work , immediate and full reinstatement to their
former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions , without prejudice to
their seniority or any other rights or privileges pre
viously enjoyed dismissing , if necessary , persons
hired after June 15 , 1984, and make them whole for
any loss of earnings and other benefits suffered as a
result of the discrimination against them , plus inter
est
WE WILL remove from our files any references
to the unlawful reasons for our failure to recall,
and notify the striking employees in the writing
that this has been done and that the reasons for the
failure to recall will not be used against them in
any way
WE WILL , on request , bargain in good faith with
the Union as the exclusive representative of the
employees in the above-described appropriate unit
with regard to rates of pay , hours of employment,
and other terms and conditions of employment, and
embody in a signed agreement any understanding
reached
WE WILL furnish the Union, on request and
within a reasonable time , financial records showing
the operations and complete financial condition of
the Company
ACCURATE DIE CASTING COMPANY
Thomas J Sheridan and Robert A Ellison Esqs, for the
General Counsel
William L Bergan Esq and John Gaal Esq (Bond
Schoeneck & King), of Syracuse New York for the
Respondent
Thomas J Giblin Esq , of Cranford , New Jersey , for the
Charging Party
DECISION
STATEMENT OF THE CASE
HAROLD B LAWRENCE, Administrative Law Judge
This case was heard before me in Syracuse New York,
on 21 and 22 March 1985 and in Fayetteville New
York on 1 2 and 3 April 1985 The complaint and
notice of hearing issued on 8 December 1984 are based
on a charge filed on 13 November 1984 by Local 491,
United Automobile Aerospace and Agricultural Imple
ment Workers of America (the Union) and served on Re
spondent by certified mail on 14 November 1984 The
complaint was amended on 13 March 1985
It is contended that the Respondent Accurate Die
Casting Company violated Section 8(a)(1), (3) and (5)
and Section 8(d) of the National Labor Relations Act
(the Act) by failing and refusing to bargain collectively
and in good faith by discriminatory actions against cer
tarn employees and by making threats The case rests on
the following specific allegations that Respondent re
fused to furnish the Union with its financial records de
priving it of information necessary and relevant to the
Union s function as bargaining representative that be
cause of the Respondents conduct the employees went
out on strike on 15 June, the strike therefore being cate
gorized as an unfair labor practices strike that Respond
ent has failed to recall striking employees within 5 days
after they unconditionally offered to return to work and
has threatened to permanently replace striking employ
ees that on or about 15 June Respondent implemented
the terms proposed to the Union during the course of ne
ACCURATE DIE CASTING CO
gotiations for a new contract in place of terms contained
in the contract that had expired though no impasse had
been reached
The Respondents answer denies all allegations of
wrongdoing and alleges that strikers unconditionally of
fering to return to work have been offered that opportu
nity as soon as suitable positions became available, in ac
cordance with Respondents obligations, and that Re
spondent implemented terms and conditions of employ
ment consistent with its last offer after reaching impasse
and following good faith bargaining Four affirmative de
fenses are alleged That Respondent bargained in good
faith and in accordance with its legal obligations that the
Union never requested and is not entitled to financial
records that the strike was neither caused nor prolonged
by the alleged failure of Respondent to provide financial
information to the Union, and that the complaint is
barred by the equitable doctrine of laches There is no
evidence that supports a finding that either the General
Counsel or the Charging Party is guilty of laches The
charge was served and filed within the time permitted by
law It is unclear in what respect there has been any in
equitable delay I have however, at an appropriate point
it this decision noted Respondents contention, in its
postheanng brief, that November is a late time to begin
asserting that a strike begun in June is an unfair labor
practice strike
The parties were afforded full opportunity to be heard,
to call, examine and cross examine witnesses, and to in
troduce relevant evidence Posthearing briefs have been
filed on behalf of the General Counsel and on behalf of
the Respondent
On the entire record I including my observation of the
demeanor of the witnesses and after consideration of the
briefs filed by the General Counsel and the Respondent,
I make the following
FINDINGS OF FACT
I JURISDICTION
There is no issue concerning jurisdiction the Respond
ent s answer having admitted the allegations pertaining
thereto Accordingly, I find that the Respondent is and
has been at all material times an employer engaged in
commerce within the meaning of Section 2(2) (6) and
(7) of the Act and that the Union is and has been at all
material times a labor organization within the meaning of
Section 2(5) of the Act
II THE ALLEGED UNFAIR LABOR PRACTICES
A A General History of the Negotiations
The Respondent , whose corporate offices are in Cleve
land Ohio operates four plants , of which the plant in
Fayetteville , New York, is the largest It is in the buss
ness of manufacturing metal die casting The Union rep
resents the production and maintenance employees at the
Fayetteville plant and has been recognized as their rep
resentative by the Respondent and its predecessor for
I On having read and filed Respondents unopposed motion to correct
the transcnpt the motion is granted
287
many years (The Respondent so admitted for the period
only back to 1976, when present ownership took over
management) The most recent collective bargaining
agreement was effective for the period from 15 June
1981 to 15 June 1984
In January 1983 John McGarigal president of Re
spondent Charles Rambaldo, vice president for human
resources and H Wayne Panciera personnel manager
conferred in Cleveland with George Slyman, chairman
of the board The meeting was held against the back
ground of their failure to bid successfully on several con
tracts and the impending loss of several in house ac
counts It was decided to improve the Company s com
petitive position by eliminating an existing discrepancy
between its wage package at Fayetteville and the wage
package prevalent among its major competitors in the
eastern section of the United States Respondents wage
package exceeded that of its largest creditors by as much
as $4 02 per hour Inasmuch as the collective bargaining
agreement still had a year to run, a request was made to
the Union to negotiate regarding modification of the
agreement for its remaining term by deferring a sched
uled pay increase It was managements stated position
that the elimination of this difference was needed to
enable the Respondent to compete more effectively
against these other companies Three negotiating sessions
took place in May and June 1983, but no agreement on
modification was reached
In the course of these negotiations, Anthony Spoto,
the chief union negotiator, who is a representative of the
International UAW, advised the Respondents negotia
tors (McGarigal and Rambaldo) that if the Company was
in financial difficulty the Union should be given access
to the Company s books so that they could be audited by
UAW auditors and the financial hardship verified The
Respondents chief negotiator, Rambaldo refused to
make the books available declaring that the Respondent
was not pleading poverty but was requesting modifica
tion of the contract to improve the Company s competi
tive position in the market The Union declined to enter
into any modification of the contract and Respondent
dropped the matter until the time arrived for the negotia
tion of a new contract
Negotiations on the new contract began on 3 May
1984 and went through 13 sessions before the employees
went out on strike on 15 June Thereafter there were six
further sessions three of which involved conference with
a New York State mediator without direct contact be
tween the two sides The last bargaining session was held
on 30 October Throughout all of these negotiations, the
Respondents position regarding the wage package re
mained basically unchanged although there were some
moderate concessions on its part with respect to it At
the time the strike started, 15 June, all noneconomic
issues had been resolved
With respect to the wage package the Respondent ad
hered tenaciously to its contention that reduction in the
wage package was necessary to improve the Company's
ability to compete Specific information was placed on
the table to support the Respondent's position (a) the
failure of the Respondent to bid successfully on contracts
288 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that involved almost $2 million worth of business (b) the
warnings received from two of the Company s existing
accounts that they would shift their business to other
companies unless the work could be done more cheaply
and (c) an industrywide survey published by the Ameri
can Die Casting Institute (ADCI) which showed that the
Respondents wage fringe benefits package was consider
ably more costly than the compensation packages of its
competitors In addition, it was pointed out that the Fay
etteville plant was underutilized and that the granting of
concessions requested by Respondent would create more
jobs and increase productivity
The union negotiators showed little interest in the
ADCI statistics They viewed the wage question as one
of suitability in the area in which the plant was located
without regard to the wage structure in the rest of the
industry The competitors were all in other sections of
the country However inspection of the Company s
books was demanded to enable the Union to verify that
the Company faced financial hardship that would justify
the wage reductions that it demanded Similar demands
had been made in 1983 and the Respondent , as it had
done at that time, took the position that production of its
financial records was unnecessary because it demanded
the wage cuts to increase productivity and competitive
capability a matter regarding which it had offered to
make available to the Union the facts and figures com
piled by the industrywide association
The two sides remained frozen in this position at the
time of the hearing
Immediately before expiration of the contract and the
commencement of the strike, the Respondent made a
final offer which the Union rejected On the expiration
of the contract it implemented the terms of its wage
benefit proposal in lieu of the terms contained in the ex
pired contract It also failed to recall David Deverdorf
and Clifford Woodcock, and other striking employees
within 5 days from the date that they made uncondition
al offers to return to work (asserting in its answer, as
noted above, that strikers unconditionally offering to
return have been offered that opportunity subject to
availability of suitable positions)
conditions of employment contained in its last contract
proposal
1 Refusal to produce financial records
The parties differ sharply on the facts relating to the
obligation to produce financial records the times and
number of demands for production, and actual produc
tion
The pertinent legal principles are quite clear The gen
eral principle is that a union is entitled to verify an em
ployer s contentions made in the course of negotiations
to the extent it will facilitate bona fide bargaining The
Supreme Court noted, in NLRB v Truitt Mfg Co 351
U S 152 153 (1956)
Good faith bargaining necessarily requires that
claims made by either bargainer should be honest
claims This is true about an asserted inability to
pay an increase in wages If such an argument is im
portant enough to present in the give and take of
bargaining it is important enough to require some
sort of proof of its accuracy
Under Truitt, if an employer asserts financial inability
to meet union demands and thereby creates an issue re
specting its financial condition, it must make available to
the union the books and records that will disclose its fi
nancial condition and enable the union to bargain knowl
edgeably See also Graphic Communicators Local 51 v
NLRB 538 F 2d 496 (2d Cir 1976), Atlanta Hilton &
Tower 271 NLRB 1600 (1984) If an employer asserts
that the granting of union demands will adversely affect
its ability to compete, that also creates an issue of finan
cial ability If the employer couples the contention re
specting its ability to compete with an implication of
present or impending financial crisis, it is talking finan
cial inability to meet union demands and must make
books and records available to the extent necessary to
show that competitive disadavantage has placed or will
place the employer in a position in which it is or will
become unable to meet the union demands Ability to
compete is not in such cases the only issue the overall
financial condition of the employer has also been placed
B The Alleged Failure to Bargain Collectively in in issue See Harvstone Mfg Corp 272 NLRB 939 (1984)
Good Faith Stanley Building Specialties Co 166 NLRB 984 (1967)
enfd 401 F 2d 434 (D C Cir 1986) cert denied 395
Negotiating sessions were held in 1983 on 12 and 26 US 946 (1969) Hiney Printing Co 262 NLRB 157
May and 6 June and in 1984 on 3, 9 10 21 22 30 and (1982) enfd 733 F 2d 1170 (6th Cir 1984)
31 May, 6-7, 8 12-13, 14 and 20 June 3 and 20 July 6
August 7 September, and 30 October By the time the
contract expiration date was reached all contract terms
of a noneconomic nature had been agreed on Negotia
tions were stalled on the Company s demand for conces
sions by way of reduction in the wage package
Notwithstanding the Respondents rigid adherence to
its demand for wage reduction there is no contention
that it engaged in surface bargaining The case against
the Respondent for failing and refusing to bargain in
good faith is based on the allegations that since 7 June
1984 the Respondent has refused to furnish the Union
with requested financial records and that on expiration of
the contract the Respondent substituted the terms and
If the employer does not assert financial inability to
meet union demands, or denies it altogether and bases its
bargaining position exclusively on its desire to compete
more effectively with other business concerns in its in
dustry, then the union s right to obtain verification by in
spection of the employers books and records is accord
ingly restricted and the employer need produce on
demand only such data as may be needed to verify its
contention that union demands reduce its ability to com
pete It need not open its books and records to a general
audit Thus though the contention by an employer that
there exists a need to remain competitive or to improve
competitive capability has been equated with pleading in
ability to meet union demands even if the employer
ACCURATE DIE CASTING CO
denies that he is pleading poverty, the information re
quired to be furnished is different Harvstone Mfg Corp,
supra , Hiney Printing Co, supra In International Tele
phone & Telegraph Co 159 NLRB 1757 (1966), enfd in
pertinent part 382 F 2d 366 (3d Cir 1967), cert denied
389 U S 1039 ( 1968) the Board sustained the administra
tive law judge s finding that Section 8(a)(5) of the Act
had been violated The administrative law judge had for
mulated the rule in the following language in his decision
(159 NLRB at 1790)
While, in the former case the union would be enti
tied to an order requiring the disclosure of all books
and records relating to the respondents financial
status in the latter case it would seem that the ap
propriate remedy would be to compel disclosure of
only such data as the employer relied on in assert
mg that his competitive position had been so im
paired by his generosity to his employees that he
had lost out on bidding for contracts
Empire Terminal Warehouse Co 151 NLRB 1359
(1965), enfd 355 F 2d 842 (D C Cir 1966), is the perfect
example of a situation calling for minimal production of
data by an employer in the course of negotiations by hm
iting it to what was needed for the purpose of resolving
questions posed by the actual issues that were raised in
the negotiations The employer asserted that it had a lu
crative business It refused to meet the union s wage de
mands solely on the ground of asserted competitive dis
advantage It was held to have satisfied its duty of dis
closure by providing proof of its competitive disadvan
tage in the form of a wage survey The union was denied
access to its financial records
The administrative law judge noted that the union
either intentionally or unintentionally misinterpreted
the nature of the employers position on the wage issue,
ignored the disclaimer of inability to pay, and insisted on
production of records to establish the company s ability
to meet wage demands There was testimony that the
employer was losing customers and it was said during
the negotiations that things are getting tough This
statement was held to be related not to inability to pay
but to disadvantage suffered by the employer by reason
of the disparity in wage rates which would be aggravat
ed by a wage increase It is important to note the consid
erations that produced this finding The administrative
law judge found that the employer never raised the issue
of economic inability to pay it
neither directly nor indirectly suggested the possibili
ty of going out of business if it gave a wage in
crease and it expressly disclaimed financial inability,
and the wage survey was not offered to support any
claim of inability `to exist [151 NLRB at 1371
1372 ] [Emphasis added ]
In affirming the conclusion of the administrative law
judge, the Board commented
As the trial examiner found the record clearly
shows that at no time during negotiations did the
Respondent claim that it was unable to meet the
289
Union s increased wage demands Indeed, the Re
spondent agreed that it had a lucrative business, and
pointed out that it was not pleading poverty or in
ability to pay The Respondent s only position on the
wage issue was that it was placed at competitive
disadvantage , and was therefore unable to get more
business because it was paying substantially more in
wages than its competitors It presented proof of
this The Union not only had independent knowledge
of the accuracy of Respondent's position, but it also
ignored the presented proof Under these circum
stances we find that the Respondent did not violate
the Act by refusing to produce the financial records
requested by the Union (151 NLRB at 1360) [Em
phases added ]
The first question to be asked, therefore, is whether
the Respondent , in the course of the negotiations with
the Union, raised the issue of its economic capability to
pay wages at either the existing level or at any increased
level which might be demanded by the union negotia
tors If it did the other lines of inquiry are as follows
Did the Union demand the right to inspect books and
records? On the basis of the Employers bargaining pose
tion, what books and records was the Union entitled to
examine? Did the Respondent produce or make available
the requested books, records, and data that the Union
was entitled to see?
a The issue of financial capability
The Respondent contends that throughout the course
of its dealings with the Union it repeatedly stated that it
was not pleading poverty and based its position regard
ing wages solely on its desire, clearly stated, to maintain
and improve its competitive position in the industry
McGarigal Rambaldo and Panciera all testified that
throughout the negotiations the Respondents negotiators
based their demand for concessions squarely on their
stated objective of improving the competitive position of
the Company by bringing the compensation package at
the Fayetteville facility into line with the pay scales
prevalent among the competition The Union was ad
vised that was the objective was informed that it was
formulated in response to the loss of existing accounts
and the failure to bid successfully for certain new busi
ness and was shown a heap of statistics which demon
strated the discrepancy in the compensation package be
tween Respondent and the competitors to whom it was
losing business The compensation package at Fayette
ville was even out of line with wages in Respondent s
other plants
The counsel for the General Counsel argue that the
stated position of the Respondent during the negotiations
was a mechanical reiteration of a formula the bare asser
tion of which is inadequate to excuse Respondents refus
al to produce records made necessary by other state
ments of Respondents negotiators and other circum
stances which had the effect of placing in issue Respond
ent s financial ability to meet union demands
The General Counsel contends that the Respondent
cited the failure of the Company to bid successfully in
290 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
certain instances and its loss of two customers to demon
strate that concessions were needed to reverse a down
ward trend which could ultimately prove disastrous The
counsel for the General Counsel collated a number of
statements allegedly made by the Respondents negotia
tors which are supposed to show that their mood was
one of desperation In these statements, the Respondent s
insistence on wage concessions was always couched in
terms of "heed ' Because Respondents own argument
that the plain meaning of the language employed by it in
the negotiations should be honored and that it reflects its
bargaining position ( We are not pleading poverty ), the
references to need cannot be overlooked and their
meaning must be evaluated
The statements collected together by the General
Counsel are as follows
Had to be more competitive
we have to control all costs we have to restore
Fayetteville to a competitive posture
something has to be done there is nothing there
the end result has to be a reduction
steps must be taken to correct the situation
we must address ourselves to negotiating a con
tract that
Will restore Fayettevill's [sic] competitive pose
Lion
things have to be changed to retain our compe
tttve position
(company offer was) what we thought was
needed to place our plant in a more competitive
posture
An assertion of general financial inability to pay wage
increases cannot reasonably be read into these state
ments On their face, even taken out of context they
appear to relate solely to wage disparity as the pertinent
competitive factor in context it is plain that they all do
(Counsel for the General Counsel and for the Respond
ent debated the meaning of the statement There is
nothing there I find it referred to Respondents offer
not as the General Counsel contended, to the resources
from which any wage increase might have been paid )
The General Counsel also pointed to a number of re
marks made by Respondents negotiators as statements
that expressly raised the Respondents general financial
condition as an issue in the negotiations with the Union
Testimony was adduced that statements were made by
them to the effect that the Company lost several ac
counts representing a total of $700 000 worth of business
that the Company had lost out on bids totaling $1 9 mil
lion in value, that the Company had a monthly break
even point of $1 million, that General Motors an im
portant customer had mandated a 2 percent cut in its
prices and that the Company had had losses in the pre
ceding 2 years amounting to $900 000
The Respondent's witnesses emphatically denied
making any statements to the effect that the Company
had sustained any operating loss and furnished plausible
explanations for the other statements which lent them a
different interpretation than that suggested by the Gener
al Counsel They contended that the references to dollar
amounts lost ' referred to the amount of business
volume lost, either with the departure of customers or
the failure to enter successful bids on contracts, and did
not at all refer to an overall operational loss in any par
ticular fiscal period They thus plausibly established an
ambiguity in the statement (I find similar ambiguity in a
reference cited by the General Counsel to an entry in
Respondents memoranda, Co losses last FY This
normally would mean, to me at least an operational loss
in a fiscal year, but an entry of that nature in memoranda
of a contract bargaining session could have the meaning
contended for it by Respondent when taken in the con
text of the discussion that was going on, including the
express disclaimer of poverty Consequently I credit
Rambaldo s explanation that it was a reference to the
loss of the work formerly received from two customers
Shop Smith and National Lock which occurred in the
fiscal year immediately preceding the 1984 negotiations )
Because the remarks are ambiguous, the burden is on
the General Counsel to show, by a preponderance of the
evidence, that they should be interpreted in the fashion
for which he contends At worst, I read them as an mdi
cation of declining profits An attempt to protect declin
mg profit into an ultimate operating loss is made ex
tremely difficult in this case by the additional testimony
of Respondents witnesses to the effect that the Respond
ent was not only losing customers, but gaining customers
as well that there had been successful bids for new work
from new customers, that more work was expected from
Fischer Auto Body Division of General Motors which
could mean between 100 and 200 additional jobs in the
Fayetteville plant that there were plans for expansion of
the work force and increased utilization of the facilities
of the Fayetteville plant and that all of this was made
known to the Union Finally they repeatedly told the
Union in plain English that the objective in cutting the
wage benefit package was to enable the Company to bid
more competitively for new work and thus increase com
pany growth
The statements relied on by the General Counsel re
ferred to above, are ambiguous and there is no evidence
in the record that establishes that they mean anything
other than what the Respondents witnesses testified they
meant
Even if the Respondents negotiating position insofar
as it pointed to lost contracts and unsuccessful bids as ex
amples of the merits of improving its competitive pose
tion was susceptible of interpretation as a plea for wage
reduction to avoid ultimate disaster and thus continue in
business the fact remains that such an interpretation is
not the only one that can be made and arguments are
not evidence The General Counsel must prove by a
preponderance of the evidence that his interpretation is
the correct one and that Respondent made an issue in
the negotiations, of its financial ability to meet the union
demands Almost all the statements attributed to the Re
spondent s negotiators have been interpreted by the Gen
eral Counsel to refer to financial capability and have
with equal ease been explained away by Respondent s
witnesses as referring to something altogether different
If anything, the Respondent has had the better of the ar
gument in every instance, for the General Counsels wit
ACCURATE DIE CASTING CO
nesses have had to contort the natural meaning of the
statements to make them fit the General Counsels case
Counsel for the General Counsel have expressly argued
that the repeated assertion of the need to obtain wage
and benefit reductions in order to be able to compete is
clearly and specifically an expression of financial inabil
ity to pay the increases and/or freezes sought by the
Union The compilation of expressions by the Respond
ent s negotiators does not, however, show that at all
This is argumentative interpretation, not proof They
read the remarks as though the words in order to be
able to compete were not invested with any meaning,
while the Respondent would put a period after the word
compete The General Counsel submits that the re
peated assertion of the need to obtain wage reductions is
an expression of financial inability to pay the increases of
the need to compete in order to stay in business The Re
spondent asserts that the repeated assertion of the need
to obtain wage reductions is an expression of something
that is needed in order to be able to compete more effec
tively-period
Merely dwelling on the terminology, however, with
out consideration of the whole picture misses the point
which is whether in the ambience of the discussions that
took place, the issue of Respondents financial ability to
pay the current or increased wages was raised by Re
spondent When all the evidence is considered and due
consideration is taken of all the events and statements
which together make up the history of the bargaining
sessions that took place from May through October 1984,
including consideration of the sessions that took place in
1983, I am left with the same impression I had at the
conclusion of the hearing the Respondent had gone into
the negotiations with the clear and explicit objective of
cutting the wage package to bring it into line with that
paid by its competitors and thus promote growth of the
Company s business, and never based its position on in
ability to pay the wage package Counsel for the General
Counsel have collated a number of statements and events
that they claim indicate that Respondent raised the issue
of financial capability but such efforts never graduated
from suggestion to proof for the simple reason that every
such statement or that which I have credited proved to
be capable of more than one explanation, and the Re
spondent s was usually more plausible
Consequently of much greater relevance to these pro
ceedings than the cases relied on by the General Counsel
are the recent cases of Atlanta Hilton & Tower 271
NLRB 1600 (1984) and a very recent decision which
refers to it Advertisers Mfg Co 275 NLRB 100 (1985)
The Board had very clearly stated, in Atlanta Hilton &
Tower, that no particular language was needed to express
inability to pay but that a finding that it had been ex
pressed had to be based on words and conduct that were
specific enough to convey such a meaning In Advertisers
Mfg Co it was found that, like the Respondent in this
case, the employer had expressly and unequivocally dis
avowed any plea of financial inability to pay There is a
distinction between unwillingness to pay and inability to
pay, and the various reasons stated by the employer indi
cating unwillingness to pay were held to obviate the ne
cessity of production of books and records even though
291
in one instance the employer had referred to its level of
business to justify nonpayment of a yearend bonus
In a different class are some communications cited by
the counsel for the General Counsel that are not at all
ambiguous Robert W Barber, a member of the union
negotiating team, testified that at the third and last of the
1983 sessions, McGarigal offered to make a profit and
loss statement available to the Union if the Union would
guarantee the making of concessions, but withdrew the
statement when the Union advised that verification
would still be needed The production of a profit and
loss statement can be interpreted as a contention that the
Company s overall finances were being adversely affect
ed by the Union s position, as an assertion that it is the
profit margin-not just wage-that is sought to be
brought in line with that of the competitors In that case,
the Respondent would be under an obligation to furnish,
in addition to the profit and loss statement sufficient ad
ditional information to enable the Union to verify the
Respondents total cost of production, its total cost of
sales, its total cost of operation including taxes and its
income from all sources
Barber also testified, with corroboration from Douglas
Richer, another member of the union committee, that at
this same session McGarigal said the failure to grant con
cessions would require Respondent to file, or make it
probable that the Respondent would file, a petition under
chapter XI of the Bankruptcy Act Of course if such a
statement was made indicating the existence of a situa
tion of such financial gravity that the Company could
not pay its debts as they matured it would by itself settle
the question of whether records had to be produced and
which records were needed Accordingly, I have consid
ered all the evidence regarding the making of such a
statement as well as any evidence which would tend to
suggest the probability or lack of probability that such a
statement had been made by McGarigal
In this connection I note and reject the argument of
Respondents counsel that the 1983 negotiations are com
pletely irrelevant Even though they took place a year
before the negotiations in question actions taken and
statements made at the 1983 negotiations are admissible
to the extent that they explain or clarify the events at the
1984 negotiations
However confronted with the testimony of Barber
and Richer that some statement about chapter XI was
made and the denial by McGarigal, I conclude that no
profit and loss statement has been shown to have been
offered and no statement about chapter XI is proved to
have been made by McGarigal
Barber testified that McGarigal offered to show the
Union a profit and loss statement but withdrew the offer
when the Union took the position that concessions could
not be guaranteed on that basis and would depend on
what an audit disclosed According to Barber, McGari
gal responded with a statement to the effect that the
only other way to save the company may be to file
Chapter XI That was the last thing he said to them, ac
cording to Barber
Barber s testimony is surprising to say the least be
cause of Barber s own testimony that the company nego
292 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tiators refused to make the books of the Company avail
able because as they said, No we re not having finan
cial problems We simply want to become more compete
tive At one and the same time Barber testified that the
Company took two inconsistent positions but there is a
complete absence of testimony that any attempt was
made to compel the company negotiators to bridge the
discrepancy Barber seemed unaware of the discrepancy
The net effect of his testimony, therefore, is that the
chapter XI remark was made in a context indicating an
absence of financial hardship At best, his testimony is
not very persuasive I have considered the corroboration
by Richer Richer s testimony also gives the impression
that the statement purportedly made by McGarigal was
made at the end of the session, for he testified simply
that when the request for concessions was turned down,
McGarigal said Well I m going to have to file a Chap
ter XI The persuasiveness of their account is dimin
ished by the discrepancies between their quotations of
McGarigal s statement and by Barber s failure to testify
that McGarigal had mentioned a wage concession as a
way to save the company, which would have been a
logical antecedent to the chapter XI remark
Barber s testimony loses all of its persuasiveness when
it turns out that he and Richer alone, of all the persons
in the room, heard the statement and saw the profit and
loss statement Nobody else did The chief union negotta
tor, Spoto did not see the profit and loss statement and
did not hear the remark attributed to McGarigal If Re
spondent were pleading poverty or financial distress as
the General Counsel contends, the Respondents repre
sentatives would certainly have made sure that the chap
ter XI possibilities were brought to the attention of the
chief union negotiator
A remark about filing of a chapter XI petition is not
the kind of remark one would expect to be forgotten or
misunderstood especially by someone like Spoto an
International representative of the UAW and the chief
negotiator at the session with greater expertise and expe
rience in negotiations than the other members of the
committee A remark like that would be expected to be
addressed directly to him not to anyone else, and not in
an offhand manner and not to the room as a whole Nev
ertheless Spoto did not testify to such a statement
having been made either before or after Barber s testi
mony and made no entries in his memoranda regarding
the making of such a remark at any of the sessions
There is no testimony by any of the General Counsel s
witnesses that the making of the remark was at any time
communicated to the members of the bargaining unit or
discussed among the members of the negotiating commit
tee Until Barber mentioned it at the hearing in this case
it disappeared like a stone dropped into a pond, except
that this stone did not even leave ripples in the water
It cannot be said that Spoto lacked opportunity to
quote McGarigal or Rambaldo to that effect if such testi
mony had been warranted I asked him about such a
remark at another (1984) meeting because I misheard the
word sales as failed
JUDGE LAWRENCE Mr Spoto at the June 6th
meeting, did Mr McGarigal or any other represent
ative of the Company say anything about the Com
pany failing9
THE WITNESS The Company failing, no sir
JUDGE LAWRENCE I thought when you started
your testimony on June 6th you used the word
failing In what connection did you use it?
THE WITNESS I don t believe I said it your
Honor If I did-I did mention McGarigal had
spoken about the Company sales the general state
of the economy
In its imputation of various statements to Respondent s
negotiators, the General Counsels case thus added up to
a number of imputed statements which did not, even
when wrenched out of context, add up to a plea of finan
cial disability plus an unambiguous statement touching
on the Company s financial conditions but which is
sought to be proved by testimony that I find impossible
to credit I have taken into consideration evidence that
was offered as tending to show that the imputed state
ment was of such a nature that McGarigal might have
been expected to make it This consisted of testimony by
Duane Madrzykowski, the Fayetteville plant manager,
from May 1982 through March 1984 He testified that
prior to the 1983 meetings with the Union, there were
several meetings that he attended with top company offi
cials regarding the approach to be taken to the Union
He testified that the decision to approach the Union was
a collective decision of McGarigal Slyman, and Ram
baldo The reasons conveyed to him for approaching the
Union were he said twofold
One was that the competitive stature of the com
pany at that time as they felt in relation to National
Die Casters that we were not competitive, that our
pricing was such that you know we were losing
business because of it our costs
Two is the company was beginning to experi
ence a downturn in profits And we could see that
we were gong [sic] to start going into the red you
know, within the very near future
However, the impression created by this testimony is
disspelled by his testimony that in 1984 he attended only
one meeting in Cleveland and neither the approaching
collective bargaining negotiations nor the future of the
Company were discussed at the meeting
Q Were you present at any meeting in 1984 in
Cleveland?
A I was-the only meeting that I was in Cleve
land for in 84 would have been January of 84
which was our normal quarterly managers meeting
Q And can you tell us who was present?
A Well, it would have been the entire board
whcih [sic] is Chuck Rambaldo Dave Slyman
George Slyman Bob Auer, Frank Ryan, John
McGarigal John McDonald myself Joe Swartz
the plant manager of the Cleveland operation and
Bob Kitzman the plant manager of the Milwaukee
operation
ACCURATE DIE CASTING CO
Q Were the upcoming collective bargaining ne
gotiations with the UAW discusser
A Not at that meeting, no
Q Was the future of the Accurate Die Casting
plant in Fayetteville discussed?
A Not to my recollection, no
Q Were you present at any other meetings
where the upcoming collective bargaining negotia
tions with the United Auto Workers was discusser
A No, I was not I had left in March of 1984 and
that was prior to any of the formal meetings
In spite of the testimony just quoted, Madrzykowski
also testified that early in 1984, prior to the formal meet
ings with the Union the possibility of closing the plant
was mentioned The ramifications of the Union s failure
to grant the concessions were explained to him as fol
lows
Q Can you answer the question
A From time to time, you know I wouldn t say
it was ever said in a formal meeting, but from time
to time, it was said that if we don t get our act to
gether, you know, and the plant doesn t get going
there is a potential that it could go Chapter XI or
the plant Could close
JUDGE LAWRENCE This was said at a meeting
with you?
THE WITNESS Yes
I distrust testimony of this critical nature when the
witness to such an important pronouncement fails to
identify the speaker until cross examination (He then
said it was McGarigal) The tentative nature of the
quoted remarks also should not pass unnoticed accord
ing to Madrzykowski the speaker ventured the opinion
that there was a potential that some terrible things could
happen
Madrzykowski s testimony leaves us nowhere The
statement about filing in chapter XI was never made in a
formal meeting The nature of the statement itself is ex
tremely general and contingent and there is no evidence
in the record of the course which subsequent events took
except for evidence that the employment roster climbed
from 90 in 1983 to over 100 early in 1984 to 160 by
mid June Madrzykowski s testimony was not as positive
as counsel for the General Counsel would have it For
example it is asserted in their posthearing brief that he
testified that Respondent was not competitive due to its
costs resulting in the loss of business, and that it was
starting to go into the red He said nothing of the kind
and in fact may have said the opposite His testimony
quoted verbatim, above was that a downturn was start
ing and management could see that they were going to
start going into the red in the future Although there is
no direct evidence on the point, all the other evidence in
the case suggests that the Company never went into the
red
Under these circumstances then why should not
Spoto s testimony be credited? He testified that he was
told by the Respondents negotiators that the Company
was making money and their proposals were not based
on economic distress and that he told the union mem
293
bers at their meeting on 14 June that the Respondent was
not pleading poverty
Spoto s testimony makes it clear that the Respondent s
negotiating team never threatened termination of the
business of closing of the Fayetteville plant and that he
himself recognized that their bargaining stance was not
founded on any contention that they could not meet
union demands, and that the union members so under
stood their position An entry in Respondents memoran
dum of the meeting of 6 June 1983, not controverted
(G C Exh) quotes Spoto to the following effect
People realize times are tough, they d be happy to
help the company if they knew the company was
really having financial problems but they feel the
company is just trying to get Fayetteville wages
more in line with the other plants
They were right
As to the profit and loss statement, there is no testimo
ny from any other witness that it was offered, which
leads me to believe that it was not offered
I do not credit the testimony of Barber and Richer
and, accordingly find that McGarigal did not make any
statement indicative of an intention to file a petition
under chapter XI of the Bankruptcy Act in the event the
Union refused to agree to the concessions which the Re
spondent was demanding I find that no profit and loss
statement was offered for examination by the union ne
gotiating committee in exchange for a guarantee of con
cessions
The General Counsels position cannot be rendered
completely plausible without entering into speculation
regarding the reasons for Respondents alleged behavior
The General Counsels case, considered in its entirety, is
that the Respondent raised the issue of its financial abili
ty to meet the union demands because it really was in
deep financial trouble Under those circumstances, the
reason for concealment of that fact from the Union re
quires explanation, especially because the Union was inti
mating that under those circumstances concessions might
be granted Some possible reasons come to mind but in
the absence of proof we are left wallowing in specula
tion If the General Counsel is going to take the position
that the Respondent acted in a fashion that seems to defy
reason and logic an explanation should be forthcoming
based on solid evidence Instead all we have is Spoto s
testimony that on the dates set forth in an affidavit he
gave the Board-7, 13 and 14 June and 3 and 20 July-
he requested books because the demand for concessions
coupled with the statements being made by the company
negotiators reminded him of the situation of Chrysler
Corporation This was a highly dubious analogy because
Chrysler had uncontrovertibly been in clear danger of
imminent extinction He continued to be reminded of
Chrysler Corporation and continued to request the books
even though he was uniformly met with a refusal on the
ground that the Company was not crying poverty even
though he knew the work force had increased over the
last year and even though he was told that the Compa
ny had plans for expansion and new business
294 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The foregoing are the major points that affect the
course of my thinking and the outcome that I have
reached on this point On all the points raised in this
case, I have found that the statements attributed to Re
spondent s negotiators which have been proved to have
been made were either susceptible of other interpreta
tions (which Respondent readily supplied), were too
amorphous or unconnected, or simply did not carry the
connotations attributed to them by the General Counsel
Counsel for the General Counsel have made a strenuous
effort to bring this case within that class of cases in
which it has been held that an employers contention that
it needed concessions to enable it to compete were cou
pled with other statements or actions which placed the
entire financial picture of the employer in issue and
therefore justified an inspection of its books and records
The proven facts, however, preclude such a finding in
this case In the cases cited by the General Counsel,
there are circumstances that are not present in this situa
Lion
In Western Wirebound Box Co, 145 NLRB 1539
(1964), enfd 356 F 2d 88 (9th Cir 1966), the company
took the position that competitive forces made it imper
ative that costs not be increased and it was stated by
the company s president that failure to bring about a cut
in wages would cause the business to operate at a loss
and might threaten its existence Later in the negotia
tions that position was abandoned and the company as
serted that competition was vigorous In finding viola
tion, the administrative law judge stated
An argument advanced in bargaining that an em
ployer cannot grant a wage increase because of
competitive considerations does not lead logically
always to a conclusion that the employer is finan
cially unable to grant it I think it is not improb
able that in some situations an employer might ad
vance the fact that competitors were undercutting
him in the market as a reason for holding fast on
wage when his concern is in reality whether he
wishes to employ his capital in a venture of reduced
profitability So I think it not always inconsist
ent for an employer to say that a wage increase will
not permit him to stay competitive and at the
same time to assert that he is not pleading inability
to pay In any event I think it unnecessary to
decide here whether the Respondent was in fact
telling the Union that it was financially unable to
grant a wage rise Certainly it persistently argued
that the competition it was encountering made it
imperative that it not increase costs Did the Re
spondent thus present an argument in bargaining
important enough to require some sort of proof of
its accuracy? 3 I think it to be clear enough that
the Respondents claimed fear of competitive disad
vantage should it not cut or at least maintain its
wage rates in such an argument and it follows from
a reading of the decision last cited that it could be
required to offer whatever documentation of that
claim it possessed (145 NLRB at 1545) [Emphasis
added ]
9 NLRB Y Truitt Mfg Co 351 U S 149 153
In Montague Co, 116 NLRB 554 (1956), the employer
asserted that granting an increase would make it difficult
to obtain profitable orders The employer was required
to produce only such information as will substantiate
the Respondent s claim of financial inability to meet the
Union s request The employer was not required to
produce all of his books or submit to a general audit
In Cincinnati Cordage & Paper Co 141 NLRB 72
(1963) the argument was that the company could not
stay competitive This was combined with a stand pat
approach wherein the company made no modification of
its position on wages, even slightly, waiting for sugges
tion to that effect to come from the Union In that deci
Sion , it was noted that want of good faith was apparent
in the company s actions and attitude with respect to the
union s wage demands
In Peerless Distributing Co 144 NLRB 1510 (1963), the
forecast of the end of the business if the union s propos
als were acceded to is couched in slightly different Ian
guage the company asserted that it wanted to remain
competitive, a phrase that was interpreted as a refer
ence to financial inability
In Charles E Honaker, 147 NLRB 1184 (1964), there
were numerous actions by the employer which were
seen as demonstrating its failure to bargain in good faith,
such as refusals to remain in sessions for reasonable
lengths of time and lengthy delays between sessions The
refusal to furnish information was a refusal to furnish
very specifically defined data the name of the person
who conducted the wage surveys, information as to the
relation of wage increases as a cost factor to the sell
ing price of the company s gasoline and the Respondent s
profit and loss statement The employer asserted its in
tention to remain competitive
In Stanley Building Specialties Co 166 NLRB 984
(1967) enfd 401 F 2d 434 (D C Cir 1968) the compa
ny s position was that increased sales do not necessarily
mean increased profits or earnings It was asserted that
earnings were disproportionately small compared to
sales material costs had increased and there had been
other expenses with the result that the employer could
not remain competitive if an increase were granted To
stay in competition the company offered what we felt
or hoped that we could overcome or live with Patently
more than wage disparity was put in issue The employer
was accordingly, required to produce supporting eco
nomic data (The data originally furnished had not been
from the corporate operating division with which the
union was negotiating so there had in effect been no
production of records or data whatsoever)
In Palomar Corp 192 NLRB 592 (1971) the employer
averred that it could not `earn the profit to which we
are entitled while paying non competitive rates Fur
thermore, the employer expressly stated that the compa
ny was losing money Naturally, it was ordered to
produce all its records to enable the union to verify the
profit situation (The administrative law judge expressly
ACCURATE DIE CASTING CO
found that the union had not been engaged in a fishing
expedition )
In C B Buick Inc, 206 NLRB 6 (1973), profit and loss
figures were directed to be disclosed by an employer
that had claimed impoverishment and inability to meet
union demands (and had committed unfair labor prac
tices outside of the conference room)
In Hiney Printing Co, 262 NLRB 157 (1982), the em
ployer s president said there was some possibility the
company might have to close because its wage rates
were not competitive
In Harvston Mfg Corp, 272 NLRB 939 (1984), the ad
ministrative law judge noted that during negotiations one
of the respondents concededly raised a plea of pover
ty The others said they needed reductions to stay in
business and could go out of business and made numer
ous statements of similar import
In S B Mfg Co 270 NLRB 485 (1984), the company
stated that it was in no position to grant the union s de
mands concerning holidays, vacation benefits, and pen
sion , and that the company was in recession
None of these cases require a different result They all
follow the basic dictates of the decision in NLRB v
Truitt Mfg Co, 351 US 149 (1956), that bargaining be
honest and that arguments made be backed up by proof
of their accuracy
The requests which Spoto claims to have made for
access to Respondents books and records were made in
response to certain statements and demands made by Re
spondent s negotiators Each request was answered by
the statement that they were not pleading poverty Pre
cisely what such statements were meant to import is
what is in issue Throughout the negotiations, the Re
spondent demanded a reduction of the employees wage
and benefit package and gave as the reason its desire-
or, as the General Counsel would have it, its need-to
become more competitive with other companies in the
industry that were paying lower wages McGarigal and
Rambaldo insist that they did not go further than to state
that concessions were necessary to improve the competi
tive position and that nothing else was said that justified
a demand by the Union for a general inspection of the
books
Cases in which an employers assertion that it is not
pleading poverty have been coupled with an express
statement or an unequivocal act clearly connoting finan
cial hardship, present or anticipated are not in point
here This case involves an employers assertion that it is
not pleading poverty that is not coupled with such an
expression or act but at best with statements or actions
that the Union elected to interpret as expressions of fi
nancial hardship The General Counsel has attempted to
justify such interpretation in the face of other expres
sions and actions by the Respondent indicating a future
of growth for the Company or even by wrenching state
ment out of context or even by reinterpreting the con
text Counsel for the General Counsel do this by simply
ignoring inconvenient facts such as, for example the
utter lack of interest on the part of the union negotiating
committee is such data as was furnished by Respondent
at the bargaining sessions , the continuation of negotia
tions by the union bargaining committee after production
295
of books and records had been declined indicating both
ability to bargain without access to the data contained
and their relative lack of importance in the overall situa
tion the utter failure of Spoto or any other member of
the committee to argue protest, or even discuss to any
extent at all, the desirability of producing the books once
the request by Spoto had been rejected with the state
ment that the Company was not pleading poverty the
warning by Spoto to the employees at the meeting held
on 14 June when he explained the different consequences
of an unfair labor practices strike and an economic strike
and told them that they could be replaced in this strike
and the late date at which the unfair labor practice
charge in this case was filed, long after the strike started
The Respondent, in its posthearing brief makes an argu
ment respecting the motivation underlying the Charging
Party s position in this case which I find speculative and
unproven but there can be little question that the Charg
ing Party s failure to file the charge until 13 November
1984 raises an inference that it only gradually came
around to the belief that an unfair labor practice had
been committed by reason of the failure to produce
books and records and that that failure on the part of the
Respondent had not played any significant part in the de
cision of the employees to strike on 15 June
I emphasized certain portions in the foregoing quota
tion from the Empire Terminal case because I think Re
spondent has in all important respects acted similarly to
the employer in that case In Empire Terminal financial
disability was not suggested and the disclaimer of it was
express Although mechanical parroting of a phrase such
as, We are not pleading poverty is not, to my mind
an express disclaimer of dark financial clouds on the ho
rizon the statement in the present case was made at ap
proprite points in the discussion and Spoto never disput
ed it and never once made any comment to Respondent s
negotiators indicating any belief on his part that such a
statement was inconsistent with any of their earlier state
ments or with any information in his possession Further
more like the employer in Empire Terminal Respondent
never claimed inability to meet the union demands The
employer in Empire Terminal affirmatively asserted the
lucrative nature of its business, Respondent, even by
Spoto s own account stated that it was making money
was looking to increase utilization of the capacity of the
Fayetteville plant looked forward to new business, and
expected to create additional jobs In fact, he conceded
that the work force had increased from 90 in 1983 to 160
by June 1984 by increments throughout the period
A number of the statements made by Respondents ne
gotiators were decidedly upbeat Panciera s uncontro
verted testimony was that a reference in Respondent s
memoranda of the negotiations to Dies gained/lost in
eluded new business
Q Now when the phrase Dies gained/lost was
used by Mr McGarigal in his remark what did he
say?
A He was saying we had lost some dies and we
had gained some dies you know that we hadn t
been as competitive as we liked in the marked place
but in some instances we had been successful in get
296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ting business and getting additional dies from cur
rent customers or new dies from other customers
That all was not grim is apparent from the tenor of
some of the statements in Spoto s testimony regarding
one negotiating session
Q Do you recall any discussion with regard to
growth at the Fayetteville operations?
A When
Q During the collective bargaining sessions?
A Yes
Q And 111 ask you to describe what you recall
and who said what
A At one of the meetings, John McGarigal had
indicated it would be new equipment coming into
the Fayetteville operating along with new work
from General Motors And he anticipated within
the year s time that they would put on approximate
ly 200 additional employees
In explaining his repeated requests for Respondent s
records Spoto testified that he did not understand what
Respondent was really saying because they were giving
him both good and bad news Such mixed signals are a
far cry from the situation of a company that is strictly
pleading poverty In the context of all the statements
being made the one remark that even remotely ap
proaches remarks made in the foregoing cases-that
things have to be changed to retain our competitive po
sition -does not loom so importantly and even takes on
a different connotation sounding as much like talk of
staying abreast or ahead of competition in an existing
profitable race as of keeping up to survive
The only difference between the positions of the em
ployer in Empire Terminal and the Respondent is that
the former made no claim that any customers had been
lost to competitors
The General Counsel draws a picture of negotiations
conducted in an atmosphere of desperations However
the evidence as a whole suggests that such retroactive
coloration does not truly reflect the way in which things
actually happened There were 13 negotiating sessions in
1984 before the strike All noneconomic items were re
solved by 7 June and discussion of the wage benefit
package then commenced The General Counsel empha
sizes that the position of Respondent regarding wages
was the same as its position in May 1983 when it re
quested deferral of a wage increase provided for in the
existing agreement so that it could better contend with
competition In both sets of negotiations however, Re
spondent based its request squarely on the dispanty be
tween the wages paid by it and by its competitors and
asserted its desire-or need-to improve its competitive
position By itself a request for a midterm modification
need not necessanly be interpreted as a signal that an
employer is in, or is approaching serious financial diffi
culty In the present case, such an interpretation is un
warranted in the face of the evidence that it said it was
not pleading poverty, and that new business was expect
ed to come in, that while some business was lost other
business did in fact, come in and that there were plans
for growth and increased utilization of plant facilities
Accordingly I find that the Respondent did not raise
an issue of its overall financial ability to meet union
wage demands at any time during the negotiations The
Respondent raised an extremely limited issue with re
spect to the competitive disadvantage in which it was
placed by reason of the existing disparity between the
wage and benefit package enjoyed by the employees at
the Fayetteville plant and that being paid to other em
ployees in the industry including the employees of Re
spondent s competitors and Respondent s own employees
working in its other plants
b The records that the union was entitled to see and
the records that it demanded to see
The Respondent having raised an issue concerning the
disparity between wages paid at the Fayetteville plant
and wages paid elsewhere was obligated on demand by
the Union, to produce data that would establish that
there existed the substantial wage discrepancy that it de
scribed There is no conflict in the evidence regarding
the Union s lack of interest in seeing such data because
its viewpoint was fundamentally different from that of
the Respondent The starting point for its examination of
the wages question was the general wage level in the
Syracuse area It had its sights set on prevailing wages
and living costs in the geographical area in which its
members lived and worked, and was not interested in
conditions in plants in the same industry in other parts of
the country even if their product competed with that of
the Fayetteville plant
There is an issue whether the Union demanded an in
spection of records but I find the evidence clear that it
demanded an inspection and asked for a lot more than it
was entitled to see The excessive demand resulted from
its insistence on either misinterpreting the Respondent s
position or extending the Respondents argument to a
point beyond that justified by anything that the Respond
ent s negotiators had said The Respondent asserts that
no demand was made for financial records until 14 June,
the last session before the strike Witnesses who were
members of the negotiating committee for the Union
assert that demands were made on a number of occa
sions mostly during the last week of negotiations before
the strike There is little question that their production
was demanded by Spoto during the 1983 talks and he
testified, on the basis of entries in his notes that demands
for production of records were made in 1984 on 7 13,
and 14 June and 3 and 20 July Committee member
Barber testified that such demand was made at least
three times before the strike Gladys Taylor another
committee member testified to Many times, every
meeting and About eleven or twelve times' Gerald
Honors testified that during the last week of negotia
tions the request was made two or three times in differ
ent meetings
The testimony of the union negotiating committee
members is inconsistent regarding the number of times
the request was made but it is apparent that the request
was repeated at least several times I see no reason to
doubt Spoto s testimony The Respondent argues that the
manner in which entries relating to the requests are post
ACCURATE DIE CASTING CO 297
tioned in Spoto s memoranda of the meetings raises
doubts about their authenticity, but I regard such an ar
gument as speculative Nothing was brought out on
cross examination or voir dire that suggests that the
memoranda may not be relied on to show that records
were requested at the times therein indicated
In both 1983 and 1984, Spoto couched his oral re
quests in terms of references to books and records He
had, however during the 1983 negotiations delivered a
detailed written request for access to records by the
auditors of the International Union, United Automobile,
Aerospace and Agricultural Implement Workers of
America It was on the letterhead of the Syracuse Office,
District 9 of the International, and was addressed to
McGarigal The letter set forth two lists, each consisting
of nine items The first was a list of summaries of differ
ent types of data relating to various financial aspects of
the Respondents business, which were to be delivered
prior to examination of the detailed financial state
ments The second list was an itemization of nine cate
gories of financial statements which the auditors wished
to examine after which they also wanted to see the
books, records and ledger of the plant This was all
spelled out with great specificity so that when the re
quests for books and records were made by Spoto in
1984 there can be little doubt that Respondent knew
precisely what was being asked for
It was because Respondent had a true appreciation of
the nature of the Union's request for inspection of
records that it declined to grant the Union s request It
was clearly within its rights to do so The issue raised in
the negotiations was whether there existed a substantial
discrepancy between the wages paid by Respondent at
the Fayetteville plant and those paid generally in the in
dustry which discrepancy placed the Respondent at a
competitive disadvantage in bidding for business Data
that would establish the existence of a substantial differ
ence in the price of labor would tend to support the po
sition taken by the Respondent at the bargaining table
The complete fiscal picture of the Respondent was not
germane to that discussion The financial history of the
Company during fiscal periods would be germane to its
ability to meet union demands but Respondents negotia
tors had not raised any issue in that respect
The union demand was therefore excessive and was
properly rejected by the Respondent
c Production of records by the Respondent
Had the Union made a proper demand for data to sup
port the Respondents contentions at the bargaining
table geared to the contentions that the Respondent had
actually advanced instead of the distortion of them to
which Spoto clung the demand would have sought pro
duction of wage data industrywide and breakdowns of
fringe benefit packages enjoyed by workers elsewhere in
the industry as compared with those already enjoyed by
the employees at the Fayetteville plant
That is precisely what the Union was furnished with
It is undisputed that at the negotiating session of 6 June
1984 Respondent made a presentation by projecting fig
ures on the wall and distributing a written chart, based
on data contained in an industrywide survey taken by
the American Die Casting Institute Its 1984 ADCI
Annual Wage Survey and the institutes 1984 Eastern
area report were on the table and the union negotiators
were invited to examine them A substantial period of
time was spent explaining the projected charts that com
pared plant labor costs and fringe benefit costs with
those prevalent in the industry Respondents negotiators
contended that they showed that the wage and benefit
package of the employees at the Fayetteville plant was
$4 02 per hour higher than the wage benefit package of
employees of Respondents competitors
I find that, though the Union did not demand the data
to which it was entitled in view of the issues raised by
the Respondent during the course of the negotiations,
that data was nevertheless provided and made available
to the Union by the Respondent
d Conclusion
I find that the Respondent was not obligated to make
its books and records available to the Union or to furnish
any other data to support its contentions in the contract
negotiations in the absence of a proper demand by the
Union, but that it nevertheless made available to the
Union all the data to which the Union would have been
entitled had a proper demand for verification of the Re
spondent s bargaining position been made
2 Implementation of Respondents contract
proposals
The implementation by Respondent of terms contained
its final offer to the Union is cited by the General Coun
sel as an instance of the Respondents refusal to bargain
in good faith The Respondent alleges as an affirmative
defense that it bargained in good faith and that an im
passe had been reached Whether an impasse was
reached depends on whether the Respondent had been
bargaining in good faith, for without good faith bargain
ing there is no such thing as an impasse
The General Counsel did not at any point accuse the
Respondent of surface bargaining Negotiating sessions
were held on 19 occasions in 1984 At almost all of
these, the parties met across the table A few sessions at
the end were conducted by a New York State mediator
with the two sides separately All noneconomic issues
were resolved before the current contract expired
Though the Respondent adhered rigidly to its position
that the compensation package had to be reduced it
modified its proposals somewhat immediately prior to
the expiration date of the current contract
The factors that I have cited impel me to conclude
that the collective bargaining that took place was con
ducted in good faith as required by the Act The only
aspect of the negotiations that calls for closer scrutiny is
the Respondents steadfast insistence on reduction of the
compensation package The Respondent insisted on a
wage reduction precluded any possibility whatsoever of
a wage increase, and, by tying its negotiating position to
the compensation level being paid by its competitors in
some sense bound that negotiations to conditions set by
persons who were not parties to the negotiations These
factors do not necessarily show bad faith The entire sit
298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
uation in this case is utterly removed from the kind of
obstinacy, advancement of extremely unpalatable propos
als, and other conduct designed to stall negotiations, pre
vent the reaching of an agreement and undermine the
Union which are characteristic of bargaining in which
good faith is lacking In Borg Warner Controls, 198
NLRB 726 (1972), it was observed
It is the total picture shown by the factual evidence
that either supports the complaint or falls short of
the quantum of affirmative proof required by law
[198 NLRB at 726 ]
See also Herman Sausage Co, 275 F 2d 229 (5th Cir
1960) enfd 122 NLRB 168 (1958) Sweeney & Co, 176
NLRB 208 (1968), modified but enfd as to this point 437
F 2d 1127 (5th Cir 1971)
It is clear that the Respondents proposed compensa
tion package did not fall into the category of an unac
ceptable proposal that would have left the Union no al
ternative to a strike Spoto testified that the union negoti
ating committee would have been willing to consider it
and that the Respondents financial records were request
ed to confirm the fairness of the request Though the Re
spondent to minimize the importance of the books and
records in the negotiations, attempted to prove that
Spoto only asked for them once I have credited Spoto s
testimony that he asked for them on a number of occa
sions There is also testimony that the subject of inspec
tion of the Company s books was raised at the meeting at
which the strike vote was taken Whatever else this evi
dence may be claimed to show it establishes that, under
the right conditions a wage reduction would have re
ceived serious and possibly sympathetic consideration
by the union membership It was not, therefore, a propo
sition that can be said to have advanced with the expec
tation that it was hardly likely to receive union support
Inasmuch as I have found that the Respondent pro
duced whatever data the Union was entitled to see in
support of the Respondents contentions regarding wage
disparity and its effect on competition, the only other
facet of this situation that might afford a basis for finding
a refusal to bargain in good faith is the Respondents re
fusal to back away from its insistence on reduction in the
wage benefits package The question is whether the Re
spondent was firm, as allowed by law or intransigent to
frustrate negotiations I must conclude that, in remaining
firm in its basic bargaining position, Respondent was
within its rights if I consider the totality of Respond
ent s conduct in its bargaining relations with the Union
and take some cognizance of the reasonableness of the
positions taken by it in the course of the bargaining ne
gotiations NLRB v Reed & Prince Mfg Co 205 F 2d
131, 139 (1st Cir 1953) cert denied 346 U S 887 (1953)
The measure of an employer's compliance with the stric
tures of the Act is the making of some reasonable effort
in some direction to compose his differences with the
union if Section 8(a)(5) is to be read as imposing any
substantial obligation at all
The evidence establishes that through the course of
the negotiations, the Respondent modified proposals on
the wage package in several respects Inevitably in
doing so, it was more flexible than the Union, which re
fused to consider wage reduction at all The Charging
Party denigrates the modified proposals as basically rep
etitions of the original position of the Respondent, but
the modifications were substantial enough to form the
basis for discussions had the Union been amenable
Certainly intent to frustrate agreement may be inferred
from an intransigent bargaining position taken with re
spect to only one subject matter of negotiation, especial
ly if it is a crucial one, even if there is willingness to
reach overall agreement See Steelworkers v NLRB, 390
F 2d 846 (D C Cir 1967), cert denied 391 US 904
(1968) However, it is well settled as a matter of law that
adamancy with respect to a position in collective bar
gaining does not by itself constitute a failure to bargain
in good faith Chevron Oil Co v NLRB, 442 F 2d 1067
(5th Cir 1971) US Gypsum Co v NLRB, 484 F 2d
1067 (5th Cir 1973), denying enf of 200 NLRB 1098
(1972) The Unions position as I have noted, was not
flexible Just as Respondents negotiators kept saying
they were not pleading poverty, Spoto kept asking to see
the books instead of addressing himself to the proposals
In the present case, the Respondent has adhered to a
position in negotiations regarding the compensation
package that it set forth as a fair response to a business
situation making all the details of its problem known to
the Union All supporting data which justified its posi
tion were offered to the Union at the negotiation ses
sions No evidence of animosity on the part of the Re
spondent toward the Union is in the record and though
there is reference in the testimony to earlier strikes there
is no evidence of the commission of prior unfair labor
practices by the Respondent That there had been sue
cessful collective bargaining between the Union and the
current management in the past was evident from the ex
istence of a 3 year contract which expired 15 June 1984
See with reference to the importance of the context in
which there is insistence on a bargaining position Conti
nental Insurance Co v NLRB, 495 F 2d 44 (2d Cir
1974) Architectural Fiberglass 165 NLRB 238 (1967),
M System Inc 129 NLRB 527 547 (1960) NLRB v
Reed & Prince Mfg Co supra
Section 8(d) of the Act requires that the parties meet
at reasonable times and confer in good faith and at the
same time stipulates that such obligation does not
compel either party to agree to a proposal or require the
making of a concession The parties are required to ne
gotiate in good faith, if they fail to reach agreement the
Board cannot pass on the merits of their positions or
impose an agreement on them NLRB v Herman Sausage
Co, supra
Hard bargaining is not outlawed Insofar as the re
quirements of the Act are concerned the Respondent has
met its responsibilities Having bargained in good faith, it
was within its rights when negotiations proved fruitless
and reached impasse, to implement the terms and condi
tions of its final offer and was no longer obligated to
maintain the contract terms in effect Mediation was in
yoked and the terms of the final offer were not imple
mented until after the expiration of the existing contract
ACCURATE DIE CASTING CO 299
No violation of Section 8(d) of the Act has been estab
lashed by a preponderance of the evidence
C Alleged Discriminatory Action Against Employees
The General Counsel alleges a violation of the Act by
reason of Respondents failure to rehire striking employ
ees, the theory being that the strike resulted from the
Respondent's refusal to make its books available for in
spection There is no evidence whatsoever to support
that contention Spoto testified that the employees voted
to strike because they considered the Respondents offer
inadequate He coupled this with the assertion that at the
meeting at which the strike vote was taken, questions
were asked from the floor whether the Company was
making its books available and the employees were per
turbed when Spoto told them the books were not being
made available He never, however, said that the failure
to produce the books was the reason they voted to
strike
The assumption on the part of all concerned that the
strike was an economic strike is apparent from the fact
that at a union meeting in October, Spoto explained to
the members that in an economic strike the employer can
replace striking employees, and for that reason they
could not expect assistance from the International
The testimony of Gerald Honors on this point, if it
means anything, confirms what Spoto had testified to
Honors testified that an employee, at the strike meeting,
asked if the Company had been asked to open its books,
and another asked if the Company could be forced to do
so Spoto responded that he had been asking for that
since 1983 so that the union auditors could ascertain that
the Company was in financial difficulty to justify these
concessions And in all occasions, the answer was
the same we are not pleading poverty Then, according
to Honors, they proceeded to take two votes one on the
Company's final offer and one on whether to strike
I find, therefore, that the members voted to strike on
the basis of the status of the negotiations as of 14 June
with respect to economic matters They did not strike
because the Respondent refused to allow them to prove,
by resort to the Company s books, that the Respondent
was unable to meet the Union s economic demands In
any event a contrary finding would be insupportable be
cause of my conclusion that the failure of the Respond
ent to make all of its books and records available was not
an unfair labor practice and because of my conclusion
that the Respondent has not been proved to have been
bargaining in bad faith
Accordingly I find that the Respondent did not vio
late Section 8(a)(3) and (1) of the Act by refusing to re
instate certain workers who applied for reinstatement be
cause their positions had been preempted by replacement
workers
D Threats
This notification constituted advice to the employees
that the Respondent was about to take serious steps to
ensure continued operation of its business The law
allows an employer to take such action in the circum
stances which I have found exist in this case NLRB v
Mackay Radio & Tel Co, 304 U S 333 (1938) The Re
spondent did not, therefore, by so advising the striking
employees, make a threat that interfered with the rights
guaranteed to employees under Section 7 of the Act and
did not violate Section 8(a)(1) of the Act
CONCLUSIONS OF LAW
1 Respondent is an employer engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act
2 The Union is a labor organization within the mean
ing of Section 2(5) of the Act
3 Respondent has not engaged in unfair labor prac
tices within the meaning of the Act
[Recommended Order for dismissal omitted from pub
lication ]
Thomas J Sheridan and Robert A Ellison Esqs, for the
General Counsel
Carl E Worboys Esq (Bogart Associates P C), of Syra
cuse, New York for the Respondent
Thomas J Giblin and Stephen H Gelb Esqs, of Cran
ford, New Jersey for the Charging Party
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
This supplemental decision is issued after a hearing on
remand which was held at Syracuse, New York, on 19,
20 and 21 August 1986 i
On 30 May 1985, I issued a decision in this matter in
which I found that the Respondent, Accurate Die Cast
ing Company, had not engaged in unfair labor practices
within the meaning of the National Labor Relations Act
(the Act) The complaint filed by the General Counsel
had alleged that Section 8(a)(1) (3) and (5) and Section
8(d) of the Act had been violated because the Respond
ent had refused to furnish the Union Local 491 United
Automobile, Aerospace and Agricultural Implement
Workers of America which represented employees at
Respondents plant in Fayetteville New York with its
financial records on demand made in the course of the
negotiation of a new collective bargaining agreement
that the employees had consequently gone out on strike,
which strike was accordingly an unfair labor practice
strike, that Respondent had failed to recall striking em
ployees despite their unconditional offer to return to
work and that Respondent had implemented new em
ployment conditions in lieu of former collective bargain
ing agreement provisions though no impasse had been
reached in negotiations All of these charges are founded
on the contention that during negotiations Respondent s
After the collapse of the negotiations, the Respondent
notified the employees that if they did not return to their
jobs under the conditions embodied in its final offer re
placement workers would be hired to fill their positions
' A consolidated hearing was conducted at which evidence was heard
relating to Cases 3-CA-12921 3-CA-12998 3-CA-13162 3-CA-13201
and 3-CA-13321 which are not otherwise consolidated with the instant
proceeding
300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
negotiators had made statements indicating financial in
ability to meet union demands but refused the Union s
request for an inspection of Respondents books with the
repeated assertion that the Company was not pleading
poverty
Respondent conceded having taken the specific actions
alleged but the company representatives testified that it
had been the Company s stated position during negotia
tions with the Union that the Company wished to im
prove its competitive position by bringing wage rates at
the Company s Fayetteville plant into line with wage
rates generally prevalent in the industry and, in fact, in
line with rates paid at another plant operated by Re
spondent They emphasized their repeated declarations
to the union negotiators that they were not pleading
poverty The General Counsel relied on (a) statements
by Respondents negotiators which were asserted to be
ambiguous and that the General Counsel contended
should be interpreted as assertions of financial inability to
meet union demands and (b) testimony by some mem
bers of the employees bargaining committee that the
company president had offered to exhibit a profit and
loss statement and had averred that the Union s failure to
grant concessions might compel Respondent to file a pe
tition under chapter XI of the Bankruptcy Act
I concluded that Respondents bargaining representa
tives had in fact disclaimed financial inability to meet
union demands and had bargained on the basis of an ex
plicitly stated desire to bring wage rates into conformity
with rates prevalent in the industry I found the testimo
ny respecting the offer to exhibit a profit and loss state
ment unpersuasive and discredited the testimony of sev
eral employees respecting remarks supposed to have
been made by Respondents president about filing in
chapter XI Accordingly, I found that there had been no
unlawful refusal to make records available to the Union
that the strike was an economic strike rather than an
unfair labor practice strike, that Respondent had there
fore not violated Sections 8(a)(1) (3) and (5) and Sec
tion 8(d) of the Act and dismissed the complaint
Approximately 5 months after the decision was issued
detailed information respecting the Company s finances
became available as a result of court proceedings In
September members of the joint management board of
the Accurate Die Casting Company-UAW Pension Fund
attempted to terminate the pension fund on the ground
of its insolvency The Company filed a petition in chap
ter XI in the United States District Court for the North
ern District of Ohio on 15 October 1985
On motion of the General Counsel the Board re
opened the record and by order dated 24 June 1986 re
manded the case to me for receipt of further evidence
and reconsideration, in light of the Respondents petition
for relief under chapter XI of my credibility findings
my findings concerning the Respondents refusal to fur
nish financial information and my dismissal of the com
plaint alleging violations of Section 8(a)(1) (3) and (5)
and Section 8(d) of the Act
This supplemental decision is issued in accordance
with the Board s Order after the hearing on remand The
parties were once again afforded full opportunity to be
heard to call , examine and cross examine witnesses and
to introduce relevant evidence Postremand hearing
briefs have been filed on behalf of the General Counsel
the Respondent and the Union
On the entire record of all the proceedings thus far, in
cluding my observation of the demeanor of the wit
nesses and after consideration of all the briefs filed by
the respective parties in both the original and remanded
proceedings, I make the following
FINDINGS OF FACT
A Information Disclosed Respecting Respondent s
Financial Condition
Information regarding the Respondents financial con
dition before and during the period of negotiations with
the Union over a new collective bargaining agreement
became available after the issuance of the initial decision
from several different sources the chapter XI petition
filed by Respondent on 15 October 1985 and the sched
ules filed thereafter in that proceeding a petition to ter
minate the Accurate Die Casting Company-UAW Pen
sion Plan , which covered employees at Fayetteville, re
ports by the Respondents certified public accountants
consisting of a certified report for FYE 30 April 1983
and a draft report , uncertified for FYE 30 April 1984,
the Company s income tax returns monthly statements
of income and expense prepared by the Company s own
financial officers and a collection of worksheets denomi
nated as selected financial data prepared by James
Richter the Company s present vice president for fi
nance Richter joined the Company on 1 March 1985
In these proceedings Respondent had steadfastly
maintained that at all times during its negotiations with
the Union it had denied the existence of serious financial
problems and had asserted to the Union that the Compa
ny was on an even keel-it was losing some business but
was also gaining new business , employment was increas
ing and there were encouraging prospects for new bust
ness in 1984 which were expected to create additional
jobs Respondents witnesses who had been the negotia
tors vehemently denied having made any statements to
the Union indicating that the Company was in serious fi
nancial difficulty or that it contemplated filing in chapter
XI Their testimony of course implied that the represen
tations made to the Union were truthful In its posthear
ing brief addressed to me, the Respondent asserted
These circumstances hardly depict a Company
about to collapse To be sure the Company was
concerned over the substantial difference between
its labor costs and those of its competitors not be
cause the difference was a barrier to survival but be
cause it was an impediment in the Company s view
to even greater growth The Company was not
saying it could not compete it was saying it wanted
to be even more competitive It would distort com
pletely the teaching of Truitt if good business judge
ment and foresight on the issue of cost containment
could be converted into a cry of poverty [Empha
sis added ]
ACCURATE DIE CASTING CO
The Company s request in 1983, that the Union agree
to deferral of a scheduled wage increase was attributed
by its officers to their desire to enhance prospects for
continued growth The request was not made in the con
text of survival and the Union knew that The Company re
peatedly denied that any financial problems existed or that
it was pleading an inability to pay, and the Union ac
knowledged that as well (Emphasis added )
In Respondents brief in response to the exceptions
filed by the General Counsel to my decision dismissing
the complaint Respondents counsel cited and relied on
testimony by Anthony Spoto the Union s negotiator,
that he had been told that the Company was making
money and was not pleading poverty
Respondent contends that the financial data now dis
closed does not contradict its stated position that the Re
spondent was in fact, at the time of the negotiations, a
viable entity with a promising future and not in serious
financial difficulty I must find otherwise in view of con
cessions of financial difficulty now disclosed to have
been made by Respondent in legal proceedings and in
view of the financial data now known to have been in
the possession of the Respondents responsible officials at
the times pertinent to this case
The statement of affairs filed in the chapter XI pro
ceeding states
CAUSE OF PRESENT FAILURE Twelve month
strike at Fayevette [sic], N Y Plant $4 million
annual business lost at Cleveland plant, $1 6 million
capital improvements at Cleveland Plant for antici
pated business that was cancelled Also cancelled
$22 million IBM 15 million Fisher Guide
This statement misleading inasmuch as the strike at
Fayetteville had been in progress for only 4 months
when the petition (as compared with the Statement of
Affairs and Schedules) was filed concedes that the Re
spondent had already sustained heavy operational losses
prior to its negotiations with the Union
Another assertion made by Respondent literally cor
rect but nevertheless misleading, is that the unsecured in
debtedness originally listed in the chapter XI schedules
dated entirely from 1984 and 1985 The fact is that there
also existed significant additional indebtedness which was
not listed, which accrued prior to 1984 as a result of the
operations of the Cleveland Ohio plant A summary of a
portion of that indebtedness extracted from the accounts
of the Cleveland operation the accuracy of which is not
disputed by Respondent was appended to the General
Counsels posthearing brief and is incorporated in and
made a part of the record It reveals that accounts pay
able by Respondent (inadvertently termed accounts re
ceivable by the General Counsel) as of June 1984 and
which remained unpaid at the time the chapter XI peti
tion was filed amounted to $390 520 The indebtedness
consisted of 39 items owed to 10 creditors including
taxing authorities and lawyers ranging over a period
from 26 July 1982 to 30 June 1984 2
2 I have excluded from consideration a listed item dated 3 November
1984 in the amount of $1642 and reduced the General Counsel s computa
tion of the total accordingly
301
Additional prefihng indebtedness existed by reason of
Respondents default since 1979 in payment of contribu
tions required to be made to the pension plan covering
employees represented by the Union at the Fayetteville
plant Respondent has asserted that it maintained pay
ments on two other pension plans, but from the meager
information regarding them which is contained in the ac
countants report for fiscal 1983 it appears that contribu
tions to them were not as onerous as those required to be
made for the Fayetteville pension plan and that one of
them covered only salaried employees By 1985 the plan
could no longer meet its obligations because of the Re
spondent s failure to make required contributions but the
union members of the plan s joint board of administration
refused to agree to termination of the plan On 9 Septem
her 1985, the board members appointed by Respondent
unilaterally issued a notice of intent to terminate because
of adverse business conditions and asserted
The Company has had financial problems at least
since 1982 It has been unable to make contribu
tions, as a result, the payment of benefits in the or
dinary course of operation of the plan have reduced
the plan assets to zero
The Pension Benefit Guaranty Corporation made ap
plication for termination of the trust on 7 October 1985
in the United States District Court for the Northern Dis
trict of New York, alleging, inter alia
14 The Company has not made contributions to the
Plan since the 1979 Plan year The Company has es
timated that the accumulated funding deficiency of
the Plan as of the proposed termination date is
$242,000
By way of explanation for this staggering default, Re
spondent suggests that it was due not so much to lack of
cash as to the fact that litigation was pending and Ac
curate took the approach of wait and see and [sic] the
litigation prior to making contributions and went out of
the habit of making these contributions I do not credit
that explanation It is inherently improbable and Rich
ter s testimony that the Respondent maintained records
showing what payments were due precludes any notion
that the obligation was overlooked
The Respondents certified financial statement for
FYE 30 April 1983 certified on 15 January 1984 dis
closed an operating loss of $758,990, a net loss of
$346,898 and idle plant facilities valued at $574 286
Working capital had been decreased by $399 185 The
Company s unprofitable Rockford Illinois facility had
been discontinued after having incurred extremely heavy
losses With trade accounts receivable of $2 574 670
Respondents total current liabilities amounted to
$7 144 445 including trade accounts payable of
$2,270,000 and current maturities of long term debt in
the amount of $634 219 The report also noted the pen
sion fund deficiency of $305 714 up from $133 308 the
preceding year and listed extremely high depreciation
rates on property, plant, and equipment
302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Respondents United States corporate income tax
return for fiscal 1983 claimed an operating loss deduction
in the amount of $306 190 and an overall loss of $85 000
A summary of selected financial data for the 1983
fiscal year prepared by Richter shows that there were
operating losses in every month except October 1982
The certified financial statement notes three transac
tions involving and arranged by George J Slyman the
chairman of the board The chapter XI petition sets forth
that he is the owner of 71 percent of Respondents stock
and his wife Theresa A Slyman owns the balance and
that an affiliate of Respondent Accurate Die Casting
Company (ADC) Milwaukee has the same stockholders
directors and officers
The first of the transactions noted by the accountants
was consurnated in December 1982 when the die casting
operations of the Respondents Rockford Illinois plant
and certain operating assets were sold to the Accurate
Die Casting Company Milwaukee Certain other assets
according to the report would be refurbished and used
in ADC s Cleveland Ohio and Fayetteville New York
operations as needed The consideration to be received
by Respondent for the transfer of the business and cap
ital assets was stated to be a commission on expected
purchase orders which the Accurate Die Casting Com
pany Milwaukee was expected to complete Respondent
(ADC) also acquired the real estate on which the Rock
ford plant was located
In a separate transaction subsequent to April 30
1983 (see Note 11) ADC purchased the land and
building of the Rockford Illinois plant from G
Slyman officer and stockholder of ADC The Com
pany plans to lease this facility
In a note entitled Subsequent Events another real
estate transaction is described
Effective September 30, 1983 the Fayetteville
New York die casting operations building and land
were sold to George Slyman an officer and prince
pal shareholder of The Accurate Die Casting Com
pany for $3 750 000 Consideration received for the
purchase price of $3 750 000 consisted of the Rock
ford Illinois die casting facility s building and land
(see Notes 2 3 and 4) valued at $2 100 000 and cash
of $1 650 000 In this agreement certain notes and
liabilities related to the Fayetteville New York op
eration were assumed by George Slyman in return
for a reduction of his advance account All cash re
ceived from these transactions was used to reduced
[sic] the outstanding debt of The Accurate Die
Casting Company as described in Note 4
A term note for $2 250 000 was obtained from a
lender by George Slyman to effect this transaction
This note is guaranteed by ADC
Respondent leased the property back from Theresa A
Slyman as landlord at a monthly rental of $43 750
The accountants draft report for fiscal year 1984 gave
a different account of the transaction
Effective September 30 1983 the Company s
Fayetteville New York building and land were sold
to George Slyman an officer and principal share
holder of The Accurate Die Casting Company for
$3 750 000 Consideration received consisted of the
Rockford Illinois building and land valued at
$2 100 000 and cash of $1 050 000 and assumption of
$600 000 of the Company s debt In addition certain
advances to George Slyman were repaid All cash
received from these transactions were used to
reduce the outstanding debt of The Accurate Die
Casting Company [Emphasis added ]
The third transaction referred to in the certified report
was a loan made in February 1982 by Respondent to the
Accurate Die Casting Company Milwaukee in the
amount of $750 000 The obligation was described as sub
ordinated to bank obligations The report also notes that
Respondent had paid various operating expenses of the
Accurate Die Casting Company Milwaukee and had
thereby acquired a receivable in the amount of
$290 645
In fiscal 1984 instead of losses in 11 months and profit
in I the records showed losses in 10 months and profits
in 2 The Respondent however claimed a larger operat
mg loss tax deduction for that year this time in the
amount of $391 492 A month by month comparison of
the figures discloses that monthly losses in fiscal 1984
were higher than those in the preceding year According
to data prepared by Richter Respondent had a net loss
of $529 679
The accountants draft report for fiscal 1984 indicated
the existence of a much greater loss than Richter was
willing to concede The draft report indicates current
assets of $6 305 000 as against current liabilities of
$8 406 000 The assets were stated to include the follow
mg
Cash $152000
Trade accounts receivable 3 211,386
Inventory 2 127 000
However the listed liabilities include the following
Bank overdraft $307 000
Notes payable 2 500 000
Current maturities of long term debt 627 000
Accounts payable 2 807 000
On net sales of $17 604 313 the draft report shows a
net loss of $878 563 (The 1984 corporate income tax
return prepared by Richter showed net sales of only
$17044933)
Richter testified that one of the reasons the report was
never finalized and certified was that management dis
agreed with the accountants over the proper method of
accounting for the proceeds of the sale of the Fayette
ville property Management wanted to treat the cash
portion of the sale proceeds as income to the Company
for that year The accountants view was as follows
The transaction described above did not result in a
gain to the Company due to the restriction that
ACCURATE DIE CASTING CO
present accounting standards place on such related
party and sales leaseback transactions For financial
statement purposes the transaction has been treated
as a capitalized lease equal to the amount of the
term note ($2,250,000) and a contribution of capital
equal to cash received by the Company associated
with the Fayetteville transaction less expenses
Inasmuch as both the accountants draft report and
Richter s testimony make it clear that the disagreement
between management and the accountants derived from
the latter s insistence on applying generally accepted ac
counting principles , I adopt the accountants figures in
the draft report as the correct measure of the loss sus
tained by Respondent in fiscal 1984
Respondents 1984 tax return contained a summary
which showed a steady decline in Respondents business
volume and receipts during the period from 1979
through 1984
Year
Trade Notes and Accounts
Receivable Outstanding at Sales on Account
End of Year
1979 5 298 033 27 950 290
1980 5 039 757 25 523 254
1981 3 499 988 24 650 459
1982 2 623 537 19 252 536
1983 3 147 115 18 529 907
1984 2 511 952 17044 933
On the basis of all the foregoing I find that at the time
of the negotiations between the Respondent and the
Union in 1984 and for a significant period of time before
that , the Respondents financial condition was consider
ably poorer than its negotiators indicated to the Union
during the negotiations and to this tribunal in the first
hearing
Respondent has attempted to lend the figures an opti
mistic coloration For example it is contended that the
cash realized from the transaction involving the Fayette
ville property along with some additional money accu
mulated from company earnings was reinvested in the
Cleveland and Fayetteville plants demonstrating confi
dence on the pa-t of management in the Company s fi
nancial conditions and future
According to Richter, management was optimistic be
cause Fayetteville was continuing to show a profit G
and T Slyman put $1 5 million into the business and ap
plied operating income in the amount of $300 000 to ex
pansion by investing $900 000 in Cleveland and $900,000
in Fayetteville in anticipation of entering into contracts
with Fisher Body and Apple Computer
Richter claimed that Fayetteville, considered by itself
was a profitable operation based on the fact that consid
ered independently the operation at Fayetteville in fiscal
1983 resulted in a profit in 4 months and losses in only 7
months (no monthly figures were available for Fayette
ville separately for February 1983) The explanation for
its gross loss in 1983 in the amount of $496 230 (which
grew to net loss of $533 396 for fiscal 1984) was that
Fayetteville actually had net income of $303,658 which
303
became converted to a loss only because allowance was
made for interest corporate charges, and depreciation
These contentions are open to serious question
There is no justification for Respondents contention
that Fayetteville was a profitable operation that should
be considered independently of the rest of the Compa
ny s affairs No basis for ignoring properly allocable cor
porate charges has been demonstrated they convert a
positive cashflow into an overall loss, because those are
the verities of the situation Richter s own worksheets in
dicate that losses were mounting at Fayetteville as well
as elsewhere but even if this were not so it is impossible
to justify treatment of the Fayetteville plant as if it were
an independent company Wages payable to the employ
ees working there were paid by the corporate Respond
ent on the basis of the Company s overall financial pic
ture The fact that the overall picture was steadily wors
ening was patently the controlling factor in the behavior
of Respondents negotiators, and this was finally conced
ed in Respondents posthearing brief submitted after the
hearing on remand, counsel asserted, The fiscal docu
ments and Richter s testimony amply demonstrate that
the negotiations for reduced labor costs at Fayetteville
were only part of a restructuring of Accurate That is
precisely the point what was happening in Fayetteville
was necessitated by the overall condition of the Compa
ny
Richter said as much himself He testified that Slyman
told him when he was hired that the Company was in
precarious financial condition that he explored chapter
XI possibilities in May and June 1985, that at that time
he met with the Company s smaller creditors to dissuade
them from bringing lawsuits against the Company and
that his ultimate recommendation to Slyman was to close
the Cleveland plant (in which $900 000 had supposedly
just been invested) He referred to the Fayetteville oper
ation at that time in 1985 as turning around financial
ly However, as he himself put it the problem was not
just the Cleveland plant but the overall corporation
The nature of the special transactions noted in the ac
countants report is such that had they been known
they could not have had any but a disquieting effect on
an interested observer of the Respondents affairs, such
as the Union would be They raise questions whether in
effect Respondent had not transferred to another corpo
ration owned by its principal stockholder whatever was
of value in the defunct Rockford Illinois operation for a
consideration payable on a commission basis and there
fore subject to the vicissitudes of the business, and ac
cepted in part payment the land and building from the
stockholder obviously of questionable utility inasmuch
as the last occupant had failed whether it sold its viable
Fayetteville real estate to the stockholder and leased it
back on terms extremely favorable to him, whether its
assets had been improperly depleted by loans to, and
payment to obligations of an affiliated corporation
which involved risk because of their subordination to
notes payable to banks (it is also unclear whether the
subordination was limited to preexisting bank indebted
ness) whether Respondents assets had not been impaired
by other transactions apparently benefiting the Milwau
304 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
kee company and Slyman which are referred to in the
1983 report and whether the object and effect of any or
all of these transactions had not been to jeopardize the
Company s financial stability The attempt to depict the
transactions as beneficial to the Company was based on
scanty and unconvincing evidence For example, Sly
mans infusion of cash into the corporations operations
as a result of the sale of the Fayetteville real estate, must
be considered together with the fact that all of that cash
was due to be returned to Slyman within 3 years in the
form of rent paid by the corporation to Theresa A
Slyman, and was obtained by a bank loan guaranteed by
the Respondent itself
The real significance of the transactions cannot be as
sessed without some information respecting Slyman s
personal financial and tax situation regarding which the
record is silent These transactions could reflect, not so
much optimism in the future prospects of the Company
as a solution to the requirements of Slyman s personal fi
nancial situation The information now available regard
ing them however, would undoubtedly have raised gen
uine concern on the part of the Union had it been dis
closed during the negotiations
B Effect on Earlier Credibility Resolutions
Robert W Barber and Douglas Richer testified that at
the meeting of the management committee and the union
committee in 1983 McGarigal offered to show a profit
and loss statement and said that failure of the Union to
grant concessions would require Respondent to file or
make it probable that the Respondent would file a peti
tion under chapter XI of the Bankruptcy Act McGarigal
denied it Finding the evidence of such a statement rele
vant even though made at the 1983 rather than the 1984
session I nevertheless credited McGarigal s denial and
found that no profit and loss statement had been offered
and nothing had been said about filing in chapter XI
Our present knowledge that the Company was in deep
financial trouble affords no basis for believing that
McGarigal made such remarks My conclusion that he
did not make them was based on factors which are not
affected by the present disclosure of the Company s
actual financial condition I discredited the testimony of
the union committeemen because they had testified to
other statements by McGangal which made it improb
able that he would have made the critical statement im
puted to him Such a statement is altogether inconsistent
with the position that they attributed to McGarigal
throughout the negotiations and is inconsistent with what
I now perceive to be an intent on Respondents part to
mislead the Union regarding the Company s true finan
cial condition There were also discrepancies between
their accounts regarding the point in time at which
McGarigal made the statements and in their quotations
of the statements purportedly made I was especially in
fluenced by the fact that McGarigal s purported state
ment about filing in chapter XI which if made would
certainly have been a bombshell and generated a great
deal of excitement, was not heard by the chief union ne
gotiator , Spoto nor by anyone else present Barber and
Richer neither responded to it nor reported it to Spoto
No mention of it was made in the first hearing by
anyone until Barber testified I concluded after the first
hearing and still believe McGarigal never made the
statements attributed to him
Duane Madrzykowski testified that, as Fayetteville
plant manager from May 1982 through March 1984 he
attended several meetings with top company officials in
which approaches to the Union were discussed made
necessary by losses of business because of uncompetitive
pricing and because the Company was beginning to ex
perience a downturn in profits we could see that we
were going to start going into the red within the
very near future
In my earlier decision, I noted my distrust of this testi
mony because of the point in the examination of the wit
ness at which he first recalled the remarks that he attrib
uted to management, and because of the extremely gen
era] and contingent nature of his testimony In discount
ing Madrzykowski s testimony, I noted the absence of
evidence in the record of the course of subsequent events
other than evidence that the employment roster almost
doubled from 1983 to June 1984, that [W]hile there is
no direct evidence on the point all of the other evidence
in the case suggests that the Company never went into
the red Spoto s testimony had been that Respondent s
negotiators told him the Company was making money
and that their proposals were not based on economic dis
tress I found the General Counsels attempted analogy
to Chrysler s situation inapt since Chrysler had uncon
trovertibly been in clear danger of imminent extinction
Now we know that at the time the Respondents offi
cials sat down with Spoto and the union committee the
Respondents business volume had been declining for 5
years and the Company had sustained significant losses in
fiscal years 1983 and 1984 However even with this in
formation in mind I still do not credit Madrzykowski s
testimony It is not coherent, specific or related to the
financial condition of the Company beyond testimony
that top management was demanding better performance
in the sales department which is a normal function of
top management everywhere He testified as quoted in
my initial decision that early in 1984 prior to the meet
rags with the Union, the possibility of closing Fayette
ville was discussed from time to time (not in any formal
meeting) it was said that if they did not get the act to
gether and the plant doesn t get going there was a
potential that it could go Chapter XI or the plant could
close In response to a question from me he stated that
it was said at a meeting with him He furnished no de
tails whatsoever as to where when, who or names of
witnesses He had already stated in testimony quoted at
length in my initial decision that the only meeting he at
tended in Cleveland was a quarterly managers meeting
in January 1984 at which upcoming negotiations with the
Union and the future of the Fayetteville plant were not
discussed He named all the top officials of the Company
as being present at the managers meeting but testified
that they said nothing of significance to this case
The problems with Madrzykowski s testimony are not
eliminated by receipt of the information that we now
have I still think his testimony leaves us nowhere
Vague and general testimony that it was said is an in
ACCURATE DIE CASTING CO 305
adequate substitute for testimony that some specifically
identified individual made a remark, quoted with speci
ficity, at a stated time and place Teamsters Local 959
State of Alaska (Northland Maintenance), 248 NLRB 693
fn 2 (1980)
Accordingly I find no basis by reason of the informa
tion now made available to alter credibility determine
tions made regarding testimony given at the initial hear
ing by Barber Richer, and Madrzykowski
C Effect on Interpretation of Statements Made by
Respondents Negotiators
The justification for Spoto s requests for access to Re
spondent s books rested on statements made by Respond
ent s negotiators which Spoto, and later the General
Counsel, interpreted as placing in issue in the negotia
tons Respondents financial ability to meet the union de
mands Respondents witnesses denied having intended
any such meaning and Spoto readily conceded that re
peatedly whenever he asked for the records they told
him that they were not pleading poverty A listing of the
statements in question appears in my initial decision
I found that most of the utterances, whether taken in
or out of context related unambiguously to wage dispar
ity as the pertinent competitive factor rather than to the
overall financial condition of the Company I resolved
utterances which appeared to be ambiguous in favor of
the Respondents interpretation on the basis that the
General Counsel had not met his burden of establishing
that they should be accorded the construction for which
he contended especially in view of the persistent express
denial of financial hardship by Respondents negotiators
The information now available compels a significant
reassessment of the effect of some (but not all) of the ut
terances in question In this connection, it should be em
phasized that it is the effect of the statements made that
is determinative so this is not a matter of ex post facto
attribution to the Respondents negotiators of intentions
or meanings that they deny having had at the time The
issue as the cases have consistently noted is whether the
statements made had the effect of placing the financial
condition of the employer in issue
Our present knowledge that Respondent at the time
was foundering financially compels us to appreciate
Spoto s presence and view the statements made by Re
spondent s negotiators in the same light that he did I
find that he correctly interpreted at least three supposed
ly unambiguous statements (emphasis supplied)
we have to control all costs
something has to be done
steps must be taken to correct the situation
Each of these statements must now be read as unam
biguously putting the overall financial condition of the
Company in issue
The same is true of the statements that were originally
treated as ambiguous These were statements by Re
spondent s negotiators relating to loss of accounts repre
senting $700 000 worth of business and statements by
them that the Company had lost out on business bids to
taling $1 9 million in value that the Company had a
monthly break even point of $1 million that General
Motors had mandated a cut in prices, and that the Corn
pany had losses in the preceding 2 years amounting to
$900 000 Respondent s witness testified at the initial
hearing that these statements referred to loss of prospec
tive business or departure of existing customers and they
denied that the statements were references to overall
operational losses in any particular fiscal period The in
formation now available contradicts their testimony as to
the meaning of the statements and as to the facts of Re
spondent s financial condition
In Respondents memoranda of the negotiations, there
is a reference to a discussion at a bargaining session of
Co losses last FY I accepted Respondents unusual in
terpretation of the entry as a reference to lost business
opportunities in view of the context of the surrounding
discussion at the bargaining table and the express dis
claimers of poverty that were repeatedly being made
Obviously a literal interpretation must now be accorded
it
Another utterance which now requires a new inter
pretation is the response that McGarigal made to one of
the union demands There is nothing there I originally
concluded that it referred to the item under discussion
rather than to company resources from which it might
be paid, but in the light of the new information I inter
pret it as a statement that the Company was financially
unable to meet the union demand
All of these statements are now given a construction
which I believe to be inevitable to anyone in Spoto s po
sition correctly believing as he did that the Company
was in financial difficulty
I am not concerned that this reevaluation of the fore
going statements might seem to hinge on the correctness
of Spoto s original intuitions regarding the Company s fi
nancial condition or that it suggests that in all cases of
utterances whose meanings are debatable production of
records will be required automatically to resist the very
demand for their production Production of records can
always be obviated by solvent companies because solven
cy is too easily demonstrable, as by the simple act of
paying debts When however a prejudicial concealment
of the truth regarding a company s financial condition is
shown to exist, there can be no complaint if the findings
of this tribunal are modified to reflect the truth as it be
comes available
This brings us to the real crux of this case and that is
that by virtue of Section 8(d) of the Act, the veracity of
critically important representations made by negotiators
in the course of collective bargaining is always an issue
D Effect on Respondents Obligations Under Section
8(d) of the Act
The earlier determination was based on the well set
tied principle that when an employer asserts financial
hardship as a basis for its bargaining position, the union
is entitled to an inspection of the company s books to
verify the employers economic situation The case law
embodying that principle , however , does not have a
mirror image in reverse it does not in all cases compel
the conclusion that an employer who asserts economic
306 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
well being may refuse an inspection of the books Section
8(d) of the Act which defines collective bargaining as
the performance of the mutual obligation of the employ
er and the representative of the employees to meet at
reasonable times and confer in good faith with respect to
wages, hours, and other terms and conditions of employ
ment requires that each case be decided on its own par
ticular facts
The basic issue in this case is not, and never has been,
simply whether the Union was entitled to an inspection
of the Company s books The essence of the statutory
obligation is the obligation to confer in good faith," and
production of records for inspection is a only matter of
mechanical implementation
From 3 May to 30 October 1984, and throughout the
initial hearing in this proceeding, Respondent concealed
from the Union and from this tribunal the true facts con
cerning the financial condition of the Company At the
same time they were making statements in the course of
negotiations which I now find placed in issue Respond
ent s ability to meet union demands, the Respondent s
representatives reiterated that they were not pleading
poverty and refused to give the Union access to books
and records that would have disclosed the actual finan
cial condition of Respondent
The actions of Respondent's negotiators were both
provocative and misleading Having signaled financial
precariousness, they responded to demands for verifica
tion by asserting financial stability and optimism for the
future Enough was said to make an issue in the negotia
tions of the Company s financial condition whereupon
the doorway to verification was slammed shut Respond
ent misled the Union and later misled me The initial
decision was not only based on rejection of the Union s
interpretation of the statements which were claimed to
have placed the Company s financial condition in issue
but on the demonstrated ability of the Union thereafter
to bargain without access to the records which it de
manded, in my view indicating both ability to bargain
without access to the data contained therein and their
relative lack of importance in the overall situation
Now we know that the information being withheld
was of crucial importance in the overall situation It was
an essential ingredient in the formulation by the Union
and the employees of proper decisions relating to their
negotiating positions and their decision whether to strike
The actual financial condition of a company becomes the
issue when concealment of the truth undermines the
union s ability properly to perform its statutorily ap
proved function Respondents actions violated the fun
damental requirement of good faith bargaining as spelled
out in NLRB v Truitt Mfg Co, 351 U S 149 152 (1956)
Good faith bargaining necessarily requires that claims
made by either bargainer be honest claims
It is not necessary for our purposes, however to probe
the policies expectations or objectives of management
It suffices to know whether there existed facts regarding
the financial condition of the Company which ought to
have been made known to the Union either on Respond
ent s own volition or in response to Spoto s offer to take
Respondent's economic difficulties into account if verifi
cation by inspection of the books was provided Evi
dence now available shows that such difficulties did, in
fact, exist A 5 year history of declining sales 2 years of
increasing losses, and the development of amounting
overall indebtedness, secured and unsecured, are facts
that manifestly the Union should have known in order to
negotiate responsibly, and therefore should have been
made known to the Union in an unequivocal manner
Failure to do so violated Section 8(d) of the Act
Respondents counsel have urged that the negotiators
had no actual knowledge of the data which is now avail
able and that there was therefore no motivation for
them to mislead the Union The negotiators were John
McGarigal, president Chuck Rambaldo, vice president
and director of human resources and labor Relations, and
H Wayne Panciera personnel manager They were no
longer employed by Respondent at the time of the hear
ing on remand and did not appear at the remand hearing
Richer testified that they did not have the fiscal 1983 fi
nancial statement available to them until 15 January 1984
(the date of the report) and did not have the figures for
the succeeding fiscal year until December 1984 Insofar
as this testimony was designed to create the impression
that they were unaware of the financial condition of the
Company as reflected in the accountants reports it is
neither credible nor conclusive It is inconceivable that
when they originally sought concessions in 1983 they
did not have knowledge of conditions in the Company
In any event, they had the report when they negotiated
with the Union in 1984 As the chief operating officers of
the Company, along with Slyman they had to have had
a fairly good knowledge of how the business was pro
gressing They are the persons who fed the data to the
accountants for preparation of financial statements and
tax returns Richer testified that, as president of the
Company McGarigal received daily information on its
operations
Richter testified that he could not describe with cer
tainty the procedures that were followed before he
joined the Company but at the time he was there
Slyman received daily information with regard to guide
lines, cashflow projections daily shipments accounts re
ceivable cash collections and other matters Banks were
given reports on a daily basis Other officers were kept
informed Richer testified And the daily shipments of
sales was really the benchmark that the corporate offs
cers used to see how things were going
The contention that the negotiators lacked motivation
to mislead the Union because the Company itself suf
fered from its financial losses, reversed simply sidesteps
the realities of the situation Richer testified that the Re
spondent is a close corporation and the interests of its
principals govern its actions Regardless of what the
company books showed it is apparent that the principals
were not necessarily hurt by the replacement of strikers
with nonunion help the scaling down of the corporate
oligations in the chapter XI proceedings the weakening
of the Union, or any of the other numerous conse
quences of the strike
I therefore conclude that at the time of the negotia
tions with the Union in 1984 the negotiators knew that
ACCURATE DIE CASTING CO
the Company had been suffering declining sales and fi
nancial losses in the preceding several years
E Effect on Prior Determination
The most immediate consequence of the new finding is
that Respondent is precluded from defending its unilater
al implementation of terms proposed to the Union on the
basis that an impasse had been reached There can only
be an impasse where the parties have bargained in good
faith , decidedly not the case here All four of Respond
ent s affirmative defenses must be dismissed I find that
Respondent did not bargain in good faith and in accord
ance with its legal obligations , the Union requested and
was entitled to financial records, the strike was caused
by Respondents failure to provide the information re
quested and certainly was prolonged by it , and Respond
ent may not invoke the equitable doctrine of laches when
it is itself in the position of a flagrant wrongdoer, and I
find no evidence of laches in any event , there having
been no undue delay in filing charges which resulted in
any inequity to the Respondent
Respondent has violated Section 8 (a)(1), (3) and (5) by
its unilateral implementation of terms offered to the
Union , its failure to recall striking workers within 5 days
after they unconditionally offered to return to work and
by its threats to replace striking employees permanently
In my initial decision , I found that the factual basis for
the General Counsels allegations had been as alleged I
found that the employees voted to strike because they
considered the Employers offer inadequate that they
themselves assumed that the strike , at its inception was
an economic strike, and voted to strike on the basis of
the status of the negotiations as of 14 June However I
also found that they were disturbed by Respondent's fail
ure to make its books available for inspection , that they
discussed the subject before they voted and that Spoto
explained to them that he had been asking for the books
since 1983 to justify the demand for concessions The
vote on the Company's final offer and on whether to
strike was taken after that discussion The two votes
taken by the employees were taken under circumstances
in which they had been deprived of information that
should have been made available to them as requested so
that they could reach a conclusion based on sound exer
cise of their rights under Section 7 of the Act The strike
action was materially influenced by Respondents com
mission of an unfair labor practice The employees voted
to strike on the basis of the status of the negotiations as
of 14 June with respect to economic matters The true
import of the negotiations at that point , was hidden
from the employees by Respondents refusal to deal hon
estly with them The strike was, accordingly an unfair
labor practice strike
The prior determination must be reversed Respondent
has violated Section 8(a)(1), (3 ), and (5) and Section 8(d)
of the Act
CONCLUSIONS OF LAW
1 Respondent is an employer engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act
307
2 The Union is a labor organization within the mean
ing of Section 2(5) of the Act
3 The Union is the exclusive collective bargaining
representative of an appropriate collective bargaining
unit consisting of
All production and maintenance employees at the
Fayetteville , New York facility excluding laborato
ry employees , draftsmen , office and clerical employ
ees, professional employees , guards, watchmen and
supervisors as defined in the Act
4 Respondent violated Sections 8(a)(1) and (5) and
8(d) of the Act by
(a) Failing and refusing to furnish to the Union, on re
quest financial records necessary for, and relevant to,
the Union s performance of its function as the exclusive
bargaining representative of the unit
(b) Unilaterally substituting the terms and conditions
of employment contained in its contract proposal to the
Union in place of terms and conditions of employment
contained in a contract which expired the same date,
without a valid impasse having been reached in its con
tract negotiations with the Union and without affording
the Union , as a result , an opportunity to negotiate and
bargain as the exclusive representative of Respondent s
employees with respect to same
5 Respondent violated Section 8(a)(1) and (3) of the
Act by
(a) Failing to recall striking employees within 5 days
from the date they unconditionally offered to return to
work
(b) By threatening to replace permanently employees
who went out on strike on 15 June 1984 after rejecting
Respondents final contract offer
6 The unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2(6)
and (7) of the Act
THE REMEDY
Having found that the Respondent has engaged in cer
tarn unfair labor practices I find it necessary to order it
to cease and desist and to take certain affirmative action
designed to effectuate the policies of the Act
I shall accordingly recommend that Respondent be di
rected to offer immediate reinstatement to all the striking
employees who offered to return unconditionally and
who have not as of the present been restored to their
employment under the terms and conditions of employ
ment which existed as of 14 June 1984 and that Re
spondent provide the Union with up to date financial
records showing the condition of the Company The
Union should not be relegated to the reports filed in the
chapter XI proceedings The Respondent will be direct
ed to make all employees already recalled or recalled
pursuant to the Order and all other replaced employees
whole for any loss of earnings and other benefits, com
puted on a quarterly basis from the date of the 5th day
following such employees unconditional offer to return
to work until the date of such reinstatement with net
earnings during such period deducted and interest al
lowed on the sums due as prescribed in F W Wool
308 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
worth Co 90 NLRB 289 (1950), Florida Steel Corp, 231
NLRB 651 (1977), and Isis Plumbing Co, 138 NLRB 716
(1962)
The General Counsel has requested a visitatorial
clause in such order authorizing discovery proceedingly
by the General Counsel under the supervision of the
United States court of appeals enforcing the Order to be
made This would appear to be an appropriate case for
the granting of such a remedy , in view of what I now
perceive to be an especially egregious violation on the
part of Respondent , and for the further reason that other
factors present may require resort to such remedy
The evidence adduced at the hearing on remand estab
lashes among other things, the ownership by George J
Slyman the chairman of the board and admittedly an
agent of the Respondent and Theresa A Slyman, his
wife , of all of Respondents stock close supervision by
Slyman over the affairs of the corporation and its labor
relations numerous transactions between Respondent
corporation and members of the Slyman family and
transactions between Respondent and an affiliated corpo
ration owned by Slyman and his wife Accurate Die
casting Company-Milwaukee, purchase by Respondent
from Slyman of the plant and equipment which Re
spondent s Rockville , Illinois division had used (and
where it had sustained heavy financial losses ) sale by
Respondent to Slyman of its building and equipment at
Fayetteville, New York and lease back from Theresa A
Slyman for $43,750 per month , the mortgaging of the
property purchased by Slyman from Respondent at Fay
etteville , with only a portion of the proceeds reinvested
in the Company, and payment by Respondent to George
J Slyman and David Slyman of large sums of money
after June 1985
These circumstances may suggest the propriety of a
remedy directed against the Respondent corporation and
George J Slyman , Theresa A Slyman , and David
Slyman , jointly and severally
In addition the pendency of the chapter XI proceed
mg may require some adjustment of the remedies direct
ed, necessitating a detailed knowledge of the Respond
ent's finances and operations during the compliance
period The General Counsel should not be compelled to
rely on voluntary cooperation from Respondents prince
pals
[Recommended Order omitted from publication ]