American Packaging Corp.

National Labor Relations Board - Board Decisions

May 28, 1993

311 N.L.R.B. 482 (N.L.R.B. 1993)

482
311 NLRB No. 53
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Counsel for the General Counsel has excepted to some of the
judge’s credibility findings. 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 exam-
ined the record and find no basis for reversing the findings.
We disavow the implication in the judge’s analysis that only con-
duct that is alleged to violate the Act may be used to establish union
animus. The law is well-settled that conduct that exhibits animus but
that is not independently alleged to violate the Act may be used to
shed light on the motive for, or the underlying character of, other
conduct that is alleged to violate the Act. Gencorp, 294 NLRB 717
fn. 1 (1989).
2 All dates are in 1990 unless otherwise indicated. The parties also
refer to the fiscal year-end bonus interchangeably as the year-end
bonus and as the production bonus.
3 The proposal stated:
The Company shall not implement the payment of a wage in-
crease or bonus on Sepember [sic] 1, 1990.
Accordingly, the parties agree to defer discussion on the sub-
ject of a wage increase and bonus until January 1, 1991 or such
other date that the parties may agree.
4 The handbook provides in pertinent part:
[T]he Company has instituted a discretionary bonus payment to
reward employee efforts. The bonus is determined annually
based upon Company/Division performance during the fiscal
year. When a bonus is awarded it is generally paid approxi-
mately sixty (60) days following the completion of the fiscal
year. Although bonuses have been paid in the past, such pay-
ments are entirely discretionary on the part of the Company. The
bonus, business conditions and profits permitting, are [sic] given
as a reward for good performance; it is not automatic nor is it
a guarantee to which you are entitled. [Emphasis in original.]
5 Upon the Union’s refusal to bargain about the 1990 bonus, Conte
‘‘declared impasse.’’ Although the General Counsel asserts that
Conte’s declaration was part of an exercise to mask its discrimina-
tory intent to withhold the 1990 bonus, none of the parties contends
that a genuine impasse occurred at this or any other time, and we
find that the parties were not at impasse. Moreover, as explained
below, we find that the Union waived its right to bargain about the
amount of the 1990 bonus, and that Conte’s rash statement, obvi-
ously made in anger, does not reflect a predetermination not to pay
the bonus. Angry outbursts and inartful comments uttered in the heat
of bargaining are realities of negotiations, and when isolated, as this
statement was, do not necessarily bespeak a sinister motive. Leeds
Cablevision, 277 NLRB 103, 112 (1985).
American Packaging Corporation and International
Union of Electronic, Electrical, Salaried, Ma-
chine and Furniture Workers, AFL–CIO. Case
3–CA–16167
May 28, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND OVIATT
On September 8, 1992, Administrative Law Judge
Bruce C. Nasdor issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed an answering brief.
Thereafter, the General Counsel filed a reply brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the record in light of the
exceptions and briefs and has decided to affirm the
judge’s rulings, findings,1 and conclusions only to the
extent consistent with this Decision and Order.
The judge found that the Respondent did not violate
Section 8(a)(5), (3), and (1) by withholding the 1990
fiscal year-end bonus from the employees and that it
did not violate Section 8(a)(5) and (1) in bargaining
with respect to the bonuses. We agree. Contrary to the
judge, however, we find that the Respondent acted un-
lawfully when it unilaterally granted employees the
1991 fiscal year-end bonus. Our reasons for affirming
the judge regarding the 1990 bonus are set forth in
section 1 below, and our reasons for reversing him
concerning the 1991 bonus are set forth in section 2.
1. For many years prior to the April 16, 1990 certifi-
cation of the Union, the Respondent paid its Rochester
facility employees a fiscal year-end bonus based on
production.2 The fiscal year ended on June 30 of each
year, and the bonus was generally paid on September
1, following a review of the facility’s costs and profits
and a final decision by the chief executive
officer/chairman of the board of directors.
On August 14, during the first phase of negotiations
covering the noneconomic terms for the initial con-
tract, the Respondent’s chief negotiator, Robert Conte,
observed that September 1 was fast approaching and
submitted a proposal to the Union that would defer the
payment and discussion of a wage increase and the fis-
cal year-end bonus until January 1, 1991.3 Following
a caucus on the proposal during which the Union’s ne-
gotiating committee telephoned its attorney for advice,
Edward Young, the Union’s chief negotiator for non-
economic items, told the Respondent that the 1990
bonus was already earned and should be paid. Young
said that the Respondent should use the formula used
in the past and stated that the Union did not expect a
bonus to be paid to unit employees if one was not paid
to salaried (nonunion) employees. Conte advised
Young that there was no set ‘‘formula.’’ Young further
stated that the Respondent should follow the handbook
with respect to payment of the bonus until the parties
could reach an agreement.4 On August 15, the Re-
spondent again sought the Union’s agreement on its
deferral proposal. The Union refused to agree to the
proposal, restating its position that the 1990 bonus was
already earned and should be paid and stating that it
would agree to defer discussion of wages and future
bonuses until the portion of bargaining covering eco-
nomic terms. The Respondent then pressed the Union
to bargain about the 1990 bonus, but the Union re-
fused.5 Thereafter, using the method used in the past,
the Respondent reviewed cost and production data and
determined that no production bonus was earned for
483AMERICAN PACKAGING CORP.
6 Of course, the parties having agreed to defer bargaining on eco-
nomic items, the Union was not compelled to bargain with the Re-
spondent about the 1990 bonus at the time it was raised by the Re-
spondent. See generally Central Maine Morning Sentinel, 295 NLRB
376 (1989).
1990. The decision applied both to unit and nonunit
employees. It announced this decision to all employees
on August 29.
We agree with the judge’s finding that the Respond-
ent did not violate the Act in failing to pay a year-end
bonus for 1990. The foregoing establishes that the
amount of the bonus was discretionary and that in in-
sisting that the bonus be paid according to the ‘‘for-
mula’’ or method used in the past, the Union waived
the right to bargain about any other method of deter-
mining the amount of the bonus. Further, however sus-
picious the fact may be that the Respondent arrived at
a zero figure in calculating the amount of the bonus
when it had never done so prior to the employees’ se-
lection of the Union, the credited testimony establishes
that the Respondent followed procedures used in the
past and legitimately determined that no year-end
bonus was earned for 1990. Thus, General Manager
Peter Schottland testified how operating standards and
budgets are prepared and revised during the fiscal year.
His testimony that 1990 was the worst performance
year in his 5 years at Rochester was underscored by
the fact that the facility lost more than $1 million in
anticipated profits due to waste, $230,000 in equip-
ment utilization, and another $123,000 due to spoilage.
Although a year-end bonus was paid in 1989 despite
its being a poor performance year, losses were smaller
than in 1990 and were attributable to newly installed
equipment and attendant training. Moreover, in grant-
ing a year-end bonus in 1989, the Respondent’s board
of directors raised concerns about performance and re-
solved that it must improve in 1990. Performance did
not improve.
In this connection, we note that there are inconsist-
encies in the financial figures that appear in the Re-
spondent’s fiscal year-end summaries and its reconcili-
ation reports and income statement analyses for the
years 1989, 1990, and 1991. The most dramatic is the
discrepancy between the figures for budgeted and ac-
tual operating income in the 1990 Year-End Summary
($3,524,000 budgeted and $2,745,000 actual) and the
budgeted and actual operating income figures in the
1990 Reconciliation Report ($5,088,000 budgeted and
$2,745,000 actual). Figures in the 1990 Income State-
ment Analysis are closer to the Reconciliation Report
($5,088,000 budgeted and $2,742,000 actual). The
1990 Year-End Summary indicates that the Respondent
earned 77.9 percent of its anticipated operating in-
come—an improvement over 1989 when actual operat-
ing income was only 67.4 percent of the budgeted or
anticipated operating income; whereas, the 1990 Rec-
onciliation Report indicates that actual income was
53.8 percent of the anticipated income. Although the
discrepancy was not explained, the documents also es-
tablish that waste, spoilage, and equipment utilization
were almost 5 times 1989 levels in actual dollars. The
Board is loath to substitute its business judgment for
that of the Respondent. Therefore, while one document
indicates a greater actualization of projected income or
profit in 1990 than in 1989 and others indicate a di-
minished actualization, the fact remains that significant
performance-based factors that reduce projected profit
had not substantially improved in 1990.
On the basis of all the foregoing, the Respondent
cannot be found to have either unilaterally withheld the
1990 bonus or to have discriminatorily withheld it.
2. The parties began negotiating economic items on
October 23. Although the Respondent initially took the
position that no bonuses would be included in the con-
tract, it ultimately agreed to the payment of a discre-
tionary Christmas bonus and a seniority bonus. The
parties also reached agreement on numerous other eco-
nomic items, including vacations, funeral leave, hours
of work, and overtime, but did not agree on the sub-
jects of wages, sick days, life insurance, contributions
to health insurance, and year-end bonuses. Negotia-
tions broke off on April 11, 1991. No party contends
that an impasse was reached. Michael Cantiello, who
was then serving as the Union’s chief negotiator, said
he would contact the Respondent later, but did not do
so. Four and a half months later, on August 29, 1991,
without prior notice to the Union, the Respondent an-
nounced the payment of a 9-percent fiscal year-end
bonus to all employees for 1991.
As noted above, the Union waived its right to bar-
gain about the amount of the 1990 year-end bonus
when it insisted that the bonus was already earned and
stated that the Respondent should use the ‘‘formula’’
used in the past in determining the amount of this dis-
cretionary bonus.6 Clearly, however, it made no such
waiver with respect to bonuses generally or with re-
spect to the 1991 fiscal year-end bonus. To begin with,
when presented with the Respondent’s proposal to
defer the discussion of a wage increase and the 1990
year-end bonus at the outset of bargaining in August,
the Union took the position that it would negotiate fu-
ture bonuses. Then, during the economics portion of
bargaining, the Union presented proposals on future
fiscal year-end bonuses thereby manifesting its desire
as the employees’ collective-bargaining representative
to contractually guarantee the year-end bonus and oth-
erwise to have input with respect to its payment. Al-
though the Union altered its bonus proposals in the
course of bargaining to permit the Respondent to retain
discretion in determining the amount of the bonus, it
did not—by proposal or otherwise—relinquish its right
to notice and an opportunity for bargaining concerning
484 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 We are mindful that Conte’s credited testimony establishes that
Young said that the handbook should be followed until an agreement
was reached. (Young’s testimony neither confirms nor denies that he
made such a statement.) However, this remark was made in the con-
text of discussions about whether employees had already earned and
should be paid the 1990 year-end bonus, and it was followed by
Young’s stating that the Union would bargain about future bonuses.
Given the context and the apparent sequence of the comments, and
more particularly, the parties’ course of conduct throughout negotia-
tions, we find that no long-term waiver of notice and bargaining
over year-end bonuses was intended or perceived.
8 Outboard Marine Corp., 307 NLRB 1333 (1992).
9 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
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
payment of the bonus. Significantly, the Union’s pro-
posal to allow the Respondent to retain discretion in
determining the amount of the year-end bonuses and to
include the bonuses in a side agreement rather than the
main contract was rejected by the Respondent.7
Further, the fact that negotiations stalled in April
and did not resume did not confer on the Respondent
an unrestricted right to act as it had in the years prior
to representation and unilaterally grant the bonus. As
stated above, no party contends that impasse was
reached,8 or that the Union either lost its continuing
majority status or abandoned the employees. Therefore,
although the Respondent was obligated to continue tra-
ditional employee benefits, including the discretionary
year-end bonus, it was also obligated to notify and
confer with the employees’ bargaining representative
before paying the bonus. NLRB v. Katz, 369 U.S. 736
(1962); Oneita Knitting Mills, 205 NLRB 500 (1973).
The Respondent complied with this legal obligation in
1990 when it apprised the Union of its practice of pay-
ing the bonus on September 1 and solicited deferral or
bargaining on the subject. It should have notified the
Union and afforded it an opportunity to bargain about
the bonus again before unilaterally granting it in 1991.
In failing to do so, the Respondent violated Section
8(a)(5) and (1).
REMEDY
Because the Respondent’s unilateral grant of the
1991 fiscal year-end bonus is not a pecuniary det-
riment to the employees, no make-whole order is re-
quired. However, we shall require that the Respondent
rescind the unlawful unilateral bonus if the Union so
requests. St. John’s Hospital, 281 NLRB 1163 (1986).
ORDER
The National Labor Relations Board orders that the
Respondent, American Packaging Corporation, Roch-
ester, New York, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to bargain with the Union by unilater-
ally granting a fiscal year-end bonus without notifying
and bargaining with the Union.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise of
the rights guaranteed them under Section 7 of the Act.
2. Take the following affirmative actions necessary
to effectuate the policies of the Act.
(a) Bargain, on request, with the Union concerning
the 1991 fiscal year-end bonus and future bonuses and,
if an understanding is reached, embody the understand-
ing in a signed agreement.
(b) On request of the Union, rescind the unilaterally
granted 1991 fiscal year-end bonus. If no such request
is made, nothing herein requires the Respondent to re-
scind or vary that bonus as it was unilaterally given.
(c) Post on its bulletin boards or designated places
copies of the attached notice marked ‘‘Appendix.’’9
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 receipt and main-
tained for 60 consecutive days in conspicuous places
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by
the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(d) Notify the Regional Director in writing within
20 days from the date of this Order what steps the Re-
spondent has taken to comply.
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 or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain with the Union by
unilaterally granting employees a fiscal year-end
bonus.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
the rights guaranteed them under Section 7 of the Act.
WE WILL, on request, bargain with the Union as the
exclusive representative of all unit employees concern-
ing the 1991 fiscal year-end bonus and future bonuses
and, if an understanding is reached, embody the under-
standing in a signed agreement.
WE WILL, on request of the Union, rescind the uni-
laterally granted 1991 fiscal year-end bonus. If no such
485AMERICAN PACKAGING CORP.
1 All dates are in 1990 unless otherwise specified.
2 Counsel for the General Counsel’s motion to correct the tran-
script is granted.
3 Transcript misspelling ‘‘Bess’’ is corrected by motion to
‘‘Vess.’’
request is made, nothing above requires us to rescind
or vary that bonus as it was unilaterally given.
AMERICAN PACKAGING CORPORATION
Linda Harris Crovella, Esq., for the General Counsel.
Richard N. Chapman, Esq. and Andrea Bacille Terillion,
Esq., for the Respondent.
DECISION
STATEMENT OF THE CASE
BRUCE C. NASDOR, Administrative Law Judge. This case
was tried at Rochester, New York, on February 11, 12, and
13, 1992. The original charge in Case 3–CA–16167 was filed
on February 27, 1991, and the first amended charge was filed
on March 15, 1991. The charge in Case 3–CA–16670 was
filed on October 28, 1991. An amended consolidated com-
plaint issued on December 31, 1991. The amended consoli-
dated complaint alleges that Respondent violated Section
8(a)(1) and (3) of the Act by, on August 29, 1990,1 denying
all its Rochester Division employees their customary year-
end bonuses. The complaint further alleges that Respondent
violated Section 8(a)(1) and (5) of the Act by taking the po-
sition that the subject of year-end bonuses would not be part
of a collective-bargaining contract, and that Respondent
alone would determine when, and whether, to grant or deny
year-end bonuses. Lastly, the complaint alleges violations of
Section 8(a)(1) and (5) of the Act by the unilateral granting
and paying to unit employees an annual year-end bonus on
or about August 29, 1991. There are no independent 8(a)(1)
allegations.
On the entire record,2 including my observation of the de-
meanor of the witnesses, and after due consideration of the
briefs, I make the following
FINDINGS OF FACT
I. JURISDICTION
At all times material herein, Respondent, a Pennsylvania
corporation, with a manufacturing facility in Rochester, New
York, has been engaged in the manufacture of flexible pack-
aging.
Annually, Respondent, in conducting its business oper-
ations, purchases and receives at is Rochester facility prod-
ucts, goods, and material valued in excess of $50,000 di-
rectly from points outside the State of New York.
At all times material, Respondent has been engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
II. THE LABOR ORGANIZATION
At all times material, the Union has been a labor organiza-
tion within the meaning of Section 2(5) of the Act.
III. THE APPROPRIATE UNIT
The following employees of Respondent constitute a unit
appropriate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act:
All regular full-time and part-time production and
maintenance employees, including warehouse employ-
ees, employed at Respondent’s Rochester, New York,
location; excluding all office clerical employees, profes-
sional employees, guards and supervisors as defined in
the Act and all other employees.
IV. THE FACTS
Respondent is engaged in the manufacture of flexible
packaging. Its Extrusion Laminating and Coating Division
(EL&C) located at Rochester, New York, is the facility in-
volved in these proceedings. Respondent has four other divi-
sions: The Carton Division in Middletown, Ohio; the Coating
Division in Philadelphia, Pennsylvania; and Columbus, Wis-
consin; the Bag Division in Story City, Iowa, additional bag
operations located in Philadelphia, Pennsylvania, and Wis-
consin; and the Rotogravure Division in Columbus, Wiscon-
sin.
The production and maintenance employees, at its EL&C
and Carton divisions and the Coating Division and Bag oper-
ations in Philadelphia, are represented by labor organizations.
It is uncontroverted that there is a longstanding history of
stable labor relations at the unionized facilities.
Stanley Schottland is Respondent’s chairman of the board
and chief executive officer, Steven Schottland is president.
Each of Respondent’s divisions is under the direction and
control of a general manager, and Peter Schottland is the
general manager of the EL&C division in Rochester, New
York. The board of directors includes Stanley Schottland,
Steven Schottland, Peter Schottland, and C. B. Schottland.
Robert F. Conti, Esq., has served as secretary and general
counsel of the Respondent during the time relevant to these
proceedings.
The Union was certified as the collective-bargaining rep-
resentative of the unit on April 16, 1990. Prior to the elec-
tion, Respondent held several meetings at which it discussed
its opposition to the Union. Peter Schottland and his father,
Stanley Schottland, each spoke at one or more of these meet-
ings which were held in February or March 1990. Stanley
Schottland met with all the employees in April 1990.
Two employees, Steve Barone and Michael Vess3 testified
about the meeting at which Stanley Schottland spoke. Barone
said in his testimony that Stanley Schottland had a chart re-
flecting bonuses paid by Respondent over 5 years ranging
from 3 percent to 13 percent, and Schottland referred to his
notes. Barone also testified that much of Schottland’s discus-
sion was about his experiences with the Company and how
the Company had been in the past, and what it hoped to be
in the future. Barone claimed, in his testimony, that
Schottland was trying to get the point across that it wouldn’t
be good for the employees or their families if there was a
union. He admitted that Schottland never used these words
during his presentation, and he did not remember
Schottland’s exact words. Barone testified that this was the
486 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
‘‘gist’’ Stanley Schottland was trying to communicate to the
employees. Vess testified that he was present for Stanley
Schottland’s meeting and saw graphs or charts Schottland
used during his speech. He recalled that the graphs reflected
the bonuses received by Respondent’s union and nonunion
divisions. According to Vess, the graph showed nonunion di-
visions receiving 3-1/2- to 10-percent bonuses, and with the
exception of Philadelphia, no other union division of Re-
spondent received a bonus. Vess also testified that at another
meeting Peter Schottland fielded the question about bonuses
and replied that no other union division of American packag-
ing receives one, except for the Philadelphia division which
was a negotiated fixed bonus and, according to Vess, Peter
Schottland stated that they would not renegotiate any bonus
like that because it didn’t work.
Barone testified that Stanley Schottland had a chart which
depicted bonuses paid by Respondent over 5 years ranging
from 3- to 13-percent.
Vess testified further that Schottland never verbally made
a threat or a statement during his speech that employees
would not receive a bonus if the Union was voted in, but
Vess concluded that the charts showed that the union divi-
sions did not get a bonus.
Stanley Schottland testified that he communicated his con-
cerns regarding the division’s poor productivity. He testified
that he stressed to the employees that they could not be paid
the highest wages in the industry without delivering in pro-
ductivity. He told the employees that they ‘‘could not have
their cake and their penny.’’ General counsel of Respondent,
Conti, observed Stanley Schottland making an outline of the
speech which he would present to the employees. Schottland
also rehearsed the speech with Conti, and Conti was present
during the employees’ meeting when Schottland told employ-
ees they could not have their ‘‘cake and their penny.’’ Conti
testified that the phrase was used to stress to the employees
that they could not expect a bonus if they did not produce
and that would be the case whether or not the plant was
unionized.
Vess was called as a rebuttal witness and testified that
Schottland made a statement during his speech to employees
about the ‘‘cake and penny’’ while pointing to a chart which
showed the unionized and nonunionized divisions of Re-
spondent and the bonuses which were received, if any, at
these plants. Interestingly, although Vess testified in counsel
for the General Counsel’s case in chief, he did not refer to
Schottland’s ‘‘cake and penny’’ during his direct or cross-ex-
amination, although he testified about Schottland’s speech,
chart and Schottland’s entire presentation including ref-
erences to his chart.
Barone testified that in July or August 1990, prior to any
announcement by Respondent with respect to the September
1990 bonus, Michael Collichio, the manager of Respondent’s
slitting and finishing department, told Barone that the em-
ployees would not receive a bonus ‘‘come hell or high
water,’’ and that he heard it from Peter Schottland.
Schottland denied making such a comment to Collichio or
any other manager. Barone testified that Collichio also told
him on two other occasions ‘‘that, well, you wanted a union,
now you can kiss your bonus goodbye and on another occa-
sion, he told me you got your union, all you wanted were
union, how’d you do?’’
Barone conceded that Collichio did not determine whether
a bonus was to be paid. Respondent, in its answer denied
that Collichio was an agent within the meaning of the Act,
and Collichio did not testify at the hearing.
Scott Hamilton, former manager of the extrusion depart-
ment, and now shipping and receiving manager, was not al-
leged as a supervisor. Vess’ testimony that Hamilton could
send employees home for termination, is the sole criteria ad-
duced, reflecting whether or not Hamilton is a supervisor
within the meaning of the Act. Vess acknowledged that the
decision was reviewed by Peter Schottland and the plant
manager.
Vess testified that at some point he asked Hamilton what
was wrong because he looked ‘‘like he lost his best friend.’’
According to Vess, Hamilton stated that they did not get as
big a bonus because of ‘‘you guys’’ and although the Com-
pany had bad years before they had always given the em-
ployees something. Hamilton did not testify.
Vess also testified that the first week following September
1, 1990, he overheard Collichio telling three or four employ-
ees that they had been told that if they voted in the Union
they would not receive a bonus and he asked them, ‘‘how’d
you do?’’
The first three preliminary negotiating sessions occurred in
May 1990 at the Union’s office and the first negotiating ses-
sion between Respondent and the Union was held on June
25, 1990.
Edward Young was the chief negotiator for the Union only
until the noneconomic portions of negotiations concluded
which was from June 25, 1990, to January 1991. Thereafter,
his attendance at the economic session was sporadic and
Matthew Cantiello, international representative, became chief
negotiator for the Union. Cantiello was also present during
the period when Young was chief negotiator for the Union.
The Respondent’s negotiating committee was comprised of
Robert F. Conti, Esq., vice president and general counsel of
Respondent and Louis P. Heller, tech service engineer. It was
also agreed that three unit employees would be present to
represent the Union and they would also act as stewards at
the plant.
At the first formal meeting on June 25, 1990, the parties
agreed to bargain over noneconomic issues first, and then to
take up the economic items. At this time, the Union gave its
noneconomic proposals to the Respondent.
The next sessions were held on August 14 and 15. At the
beginning of negotiations on August 14, Conti submitted a
proposal to the Union which provided that Respondent would
not implement the payment of wage increases or bonuses on
September 1, 1990, provided further that the parties would
agree to defer discussion on the subject of wage increases
and bonuses until January 1, 1991, or any other date accept-
able to the parties.
After receiving Respondent’s noneconomic proposals, the
Union caucused for a long time to consider them, and to de-
cide what to do with the proposal not to implement wage in-
creases or bonuses on September 1 and to defer discussion
until January 1, 1991. Young called a union attorney to seek
advice on the latter issue and was advised that the 1990 fis-
cal year-end bonus was already earned and due to employees
but future bonuses should be negotiated. Young worked up
a counterproposal with the Union’s attorney and the rest of
the caucus was spent working out the Company’s non-eco-
487AMERICAN PACKAGING CORP.
nomic proposals to use as counterproposals. In its counter-
proposal the Union agreed to defer the wage increase and the
subject of wage increases and future bonuses until economics
was discussed. However, the Union refused to agree to the
deferral of any determination regarding the payment of the
1990 year-end divisional performance bonus. The Union
maintained that the bonus was already earned because
‘‘that’s how it was paid in the past on a Fiscal year that
ended on June 30.’’ Although the Union claimed the 1990
year-end divisional performance bonus had already been
earned, Young, in his testimony, admitted that at this time,
August 14 and 15, he did not know if the bonus had in fact
been earned. Conti responded to the Union’s counterproposal
by offering to change the January 1, and the Respondent’s
original proposal to November 1, 1990. The Union would
not negotiate regarding the deferral of the bonus determina-
tion in 1990, and Young rejected Conti’s counterproposal.
Conti then offered to bargain with the Union over payment
of the 1990 bonus.
The parties do not dispute that the Respondent proposed
to defer the implementation of the year-end divisional per-
formance bonus decision and negotiations on the 1990 bonus,
until the parties discussed economics. There is also no dis-
pute that Respondent did not ever state, on August 14 or 15,
that it was not going to pay a 1990 divisional performance
bonus.
While discussing the deferral of the decision on the 1990
bonus, Young advised Conti that the Respondent should pay
the bonus ‘‘using the same formula that you did in the past,
if a bonus was earned, it should be paid. If it wasn’t earned
it shouldn’t have to be paid.’’ Young explained his counter-
proposal to Conti by stating that the Union wanted the hourly
employees treated the same as the salaried employees. Young
stated to Conti that ‘‘using the same formula you used, if no
body in the salaried unit has earned a bonus, I don’t expect
our people to get one either because the same formula was
used for the salaried and non-production.’’
Young testified that he remembered at the meeting on Au-
gust 15 Conti stating that the board of directors determined
the bonus and ‘‘even that he doesn’t know’’ what the deter-
mination will be.
The employee handbook, in evidence as Respondent’s Ex-
hibit 1, states in pertinent part:
Your dedication to the company’s well being com-
bined with your performance on the job have a measur-
able effect on the division’s performance. The extra ef-
fort to prevent operation down time or to maintain
product quality is important to the company. In order
to preserve this standard, the company has instituted a
discretionary bonus payment to reward employee ef-
forts. The bonus is determined annually based upon
Company/Division performance during the fiscal year.
When a bonus is awarded it is generally paid approxi-
mately sixty (60) days following the completion of the
fiscal year.
Although bonuses have been paid in the past, such
payments are entirely discretionary on the part of the
company. The bonus, business conditions and profits
permitting, are given as a reward for good performance;
it is not automatic nor is it a guarantee to which you
are entitled. We must all work together for the common
objective of maximum profits.
The date of the employee handbook is November 1988.
Young was familiar with the handbook prior to the com-
mencement of negotiations. He informed Conti, according to
the testimony of Conti, that Respondent was bound to follow
the handbook until the parties reached an agreement. Further-
more, Young considered the amount of the bonus to be dis-
cretionary.
The parties were unable to reach agreement regarding de-
ferral of the 1990 bonus on August 15, therefore they began
to negotiate noneconomic items on that date.
On September 10, the performance bonus was again dis-
cussed. The Union claimed that the salaried employees had
received a production bonus in 1990. Conti informed the
Union that no year-end divisional performance bonus had
been paid to either hourly or salaried employees because of
the division’s poor production performance. Bonuses were
not further discussed during negotiations of noneconomic
items. The parties reached agreement on noneconomic items
and there were none open when the parties last met for nego-
tiating sessions.
Negotiations regarding economic issues began on October
23, 1990. The Union submitted a proposal which addressed
the issue of bonuses. Respondent’s initial position was that
there would be no bonuses. Throughout the negotiation of
economic issues, Respondent made proposals and counter-
proposals and the parties’ positions regarding bonuses
changed. Respondent initially took the position that no bo-
nuses would be included in the contract, although it subse-
quently agreed to provide seniority and Christmas bonuses
for the employees of the EL&C division. By April 11, 1991,
the parties had agreed to several economic issues including
funeral leave, vacations, and hours of work and only five
economic issues were unresolved. The outstanding economic
issues were bonuses, wages, sick days, life insurance, and the
amount of contribution that would be made for health care
insurance.
The last negotiating session between the parties was on
April 11, 1991. Both Conti and Cantiello testified that the
parties went back and forth a great deal at the meeting and
that there were five outstanding economic issues to be ad-
dressed in the parties’ proposals as a package. Cantiello’s
testimony and his version is that Conti gave the Union a
package proposal on the outstanding items that was their
‘‘final offer’’ and was the best they could do. Cantiello stat-
ed that Conti and Heller were the ones who said there was
no sense in going any further because they were so far apart.
Cantiello said that the committee wouldn’t accept the Com-
pany’s final proposal on those five issues so he would not
take it to the unit for a vote. Conti testified that Respondent
returned following a caucus and Cantiello said, ‘‘There is no
sense in doing this anymore, we’re not making any
progress.’’ Conti testified that Cantiello told him at that time
that he would take the proposal to membership for a vote
and that he asked Cantiello to inform him of the results.
Cantiello acknowledged that he told Conti that he would get
back to him and let him know what the Union was going
to do, but that the Union never contacted Respondent after
the April 11 meeting. Conti further testified that he did not
488 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
declare an impasse, and that Respondent had not imple-
mented its last proposal.
General Manager Peter Schottland was charged with the
responsibility of preparing the annual budget for the division.
Respondent has two budgetary periods. The first budget is
for the first 6 months of the fiscal year, and it is prepared
in early March. It is initially determined by projected sales
figures provided by Respondent’s sales force. Division man-
agement then revised estimates of the quantities of goods and
dollars which must be produced to set standards of produc-
tion performance it believes the division can achieve. Budg-
ets then are established for each quarter based on the details
of each job that is to be performed. At the Rochester facility
there are basically three production operations, printing, fin-
ishing or slitting, and extrusion.
When budgeting for efficiencies and standards of expected
performance, the general manager averages the best five jobs
run at the facility over the previous 12 months. This average
becomes a standard of manufacturing and production per-
formance unless, for some extenuating reason, management
believes the division should perform above or below that
standard. Peter Schottland testified that this method for estab-
lishing production standards of performance is applied on a
companywide basis at each division. The general manager of
each division presents his division budget to the president.
After review by the president, any required modifications are
made and the budget is submitted to the board of directors
for its approval.
In November of the fiscal year, the initial budget, which
was prepared in March, is examined and evaluated relative
to the division’s actual performance 5 months into the fiscal
year. The budget is then revised based on actual production
and sales figures to reflect the expected results at the end of
the fiscal year. A comparison of actual to expected perform-
ance is done by quarter. Once the revised budget is approved
by the board of directors, the original budget is no longer
considered at the corporate level.
Performance standards are measured against actual manu-
facturing performance in an effort to determine whether a
year end divisional performance bonus will be paid. Various
documents are assembled by each division during the fiscal
year which reflect manufacturing efficiencies. The pertinent
documents were introduced and received into evidence.
Availability and utilization reports are prepared monthly for
each piece of equipment used in the manufacturing process.
These reports bear upon the availability and utilization of
equipment on a monthly basis.
Respondent employs assorted documents encompassing a
decision review, reconciliation of operating income, sum-
maries and income statement analysis documents. The pur-
pose of these various documents is to keep management
aware of Respondent’s current economic posture, and to
some extent, project where it will end up at the conclusion
of its fiscal year.
At the end of each fiscal year, the EL&C division and the
other divisions forward a reconciliation statement and divi-
sion review to corporate headquarters. The financial depart-
ment then consolidates each division’s year-end statement
into a more simplistic format for James D. Mossholder, treas-
urer and financial officer and the president and chairman of
the board. Respondent has a long history of granting several
bonuses to its EL&C division employees. Some of these bo-
nuses are awarded only to salaried employees and other bo-
nuses are awarded to both hourly and salaried employees.
With respect to Christmas bonuses, in the past the salaried
and hourly employees of Respondent’s EL&C division have
received a discretionary Christmas bonus paid in December
of each year. This bonus is declared by corporate head-
quarters and amounts to 2-1/2 percent of an employees’ an-
nual earnings.
Employees in the division who have been employed for at
least 5 years are also eligible for a seniority bonus. This
bonus is equal to one-half of 1 percent for each 5 years an
employee has been employed up to a maximum of 2 percent.
Salaried employees are also eligible to receive personal
performance bonuses. This bonus ranges from 0 percent to
a maximum of 8 percent of a salaried employee’s salary.
These personal performance bonuses are awarded to employ-
ees performing specific jobs, rather than team duties. These
bonuses are unrelated to a year-end division performance.
In September, employees are eligible on a divisional basis
for a discretionary year-end divisional performance bonus.
Hourly and salaried employees of the EL&C division are eli-
gible for this bonus. Hourly employees are eligible to receive
a divisional performance bonus of between 0 and 10 percent.
Any bonus received by salaried employees would be 2 per-
cent less than that received by hourly employees. Any year-
end divisional performance bonus received by any division
was paid by corporate.
Peter Schottland testified that he makes the initial rec-
ommendation with respect to a year-end divisional perform-
ance bonus for the EL&C division based on the reconcili-
ation statement prepared by his business manager. He relies
on this statement because it focuses in on those areas of pro-
ductivity which are controlled by manufacturing employees.
These areas are waste, spoilage, equipment utilization,
chargeable hours, and manufacturing cost figures reflected in
the reconciliation statement.
The general managers of each division report to Steven
Schottland in August of each year to discuss with him their
bonus recommendations. The general manager’s rec-
ommendation is subject to the president’s agreement or
modification. Steven Schottland, the president and the gen-
eral manager, then meets with Stanley Schottland, chairman
of the board and chief executive officer, who approves or
disapproves the recommendation. Stanley Schottland dis-
cusses the bonus recommendation with the president and the
general manager and he makes the final decision regarding
each division’s year-end performance bonus.
Without the Union’s agreement to defer implementation of
the 1990 year-end divisional performance bonus until discus-
sion of economic issues, Respondent implemented its bonus
program in late August 1990.
Peter Schottland testified:
I went down to Philadelphia [corporate]. The difficulty
I had with 1990 was that in 1989 I made excuses trying
to come up with a good reason to have a bonus, and
none of those were there in 1990. I mean, the equip-
ment was in good condition and most of the training
had been done and everything had gone to hell in a
hand basket. So I recommended to Philadelphia, I don’t
actually don’t even remember recommended the exact,
you know, the exact number. I knew it was zero or it
489AMERICAN PACKAGING CORP.
had to be something almost zero because it was just so
bad. I left it in Philadelphia’s discretion to sort of come
up with what it is, but it was nothing short of a disaster
for us. So, very, very poor year.
In Schottland’s opinion, production had never been that far
off standard during his 5 years at division. Stanley
Schottland testified that it was the worst year in the history
of that Company since he bought it in 1966.
Budget operating income for fiscal year 1990 was approxi-
mately $5.1 million. Therefore, the EL&C division hoped to
obtain $5.1 million in profits during the 1990 fiscal year. In
spite of this the actual operating income for the EL&C divi-
sion for the fiscal year 1990 was only $2,742,000.
In fiscal year 1990, the division lost over a $1 million in
profits because its standards for waste were exceeded by 2
points. The division lost $123,000 in profits when spoilage
exceeded the established targets. Moreover, equipment utili-
zation fell below targets which resulted in the loss of profits
of almost $250,000. Chargeable hours also fell below the tar-
get and resulted in a profit loss of nearly $750,000. As a re-
sult of excess spending, the division incurred $648,000 more
in manufacturing costs then budgeted for. Therefore, the pro-
duction performance of the division and its manufacturing
employees resulted in lost profits of approximately
$2,771,000.
Both Stanley and Peter Schottland testified that the divi-
sion’s standards of performance for fiscal year 1990 were
lowered to assure that the division would meet its established
goals. The reason standards were lowered is because 1989
had not been a good year for the division although a year-
end divisional performance bonus of 6.5 percent was award-
ed. The board of directors at the end of the 1989 fiscal year
did note the divisions poor production performance. Follow-
ing the division’s poor performance in 1989, management
recommended to corporate that the production standards for
1990 should be lowered. Corporate agreed to reduce these
standards.
Stanley Schottland accordingly made the decision that no
year-end divisional performance bonus was to be awarded to
hourly or salaried employees of the EL&C division in 1990.
Respondent, in late August 1991, evaluated the performance
of the EL&C division’s production employees. The charge-
able hours exceeded the projected standards by 6 percent
which resulted in increased profits of $964,000. The divi-
sion’s reconciliation of operating income statements for the
fiscal year 1991 were completed for two 6-month periods.
The year-end results are calculated by adding the amounts re-
flected in General Counsel’s Exhibits 14(a) and (b). Manu-
facturing spending exceeded standards and with this decrease
in spending resulted in additional profits of $288,000. The
equipment utilization was somewhat below the target, result-
ing in a loss of $3000 in expected profits. Peter Schottland
testified that all and all fiscal year 1991 was very good,
things had really improved dramatically. The $3000 loss in
expected profits was a great improvement for 1990 when the
below-target equipment utilization resulted in lost profits of
$233,000. Waste exceeded the standards established for the
division during 1991 but there was an improvement in waste
reduction resulting in increased profits of over $700,000. Ac-
cordingly, based on the EL&C division’s manufacturing per-
formance, Peter Schottland recommended a year-end divi-
sional performance bonus in the range of 7, 8, or 9 percent.
Corporate awarded the employees a year-end performance
bonus of 9 percent.
Conclusion and Analysis
Respondent made a good-faith effort to solicit the Union’s
agreement to a deferral of a decision on the 1990 year-end
divisional performance bonus, but the Union refused.
Young, director of organization for the Union, acknowl-
edged that Respondent did not take the position that it would
not pay the bonus. Respondent proposed that payment of
wage increases and bonuses be deferred until January 1,
1991, or whenever economic issues were discussed.
The Union took the position that the 1990 bonus had al-
ready been earned. Respondent offered to move the date up
to November 1, 1990, for a discussion of wage and bonus
issues. The Union refused.
Respondent continued to maintain existing terms and con-
ditions of employment.
The credible testimony of Peter and Stanley Schottland, re-
flects that Respondent followed its traditional historical past
practice in deciding whether or not to grant a bonus.
The applicable documents were reviewed which reflected
the production performance of employees. Based on criteria
of production performance, Peter Schottland believed em-
ployees deserved a bonus of zero or close to zero.
Thereafter, consistent with past practice, the 1990 rec-
onciliation and the decision review were forwarded to cor-
porate were they where condensed into a less complicated
document, the reconciliation of operating income statement.
This was then examined by Steven and Stanley Schottland
and Respondent’s board of directors.
Stanley Schottland made the final decision to not award a
bonus because the divisional performance was zero. Employ-
ees in the EL&C division were apprised of this decision on
August 29, 1990, by a posting at the plant.
Neither hourly or salaried employees received a bonus in
fiscal year 1990.
The Union wanted Respondent to adhere to past practice
in granting or not granting a bonus. The Union considered
the amount of the bonus to be discretionary and requested
that Respondent continue to follow the employee handbook.
The handbook is precise in that a bonus is ‘‘discretionary,’’
‘‘not automatic’’ and ‘‘not a guarantee.’’
Furthermore, the Respondent was willing to bargain over
the bonus, but the Union adamantly insisted that it be paid
pursuant to the ‘‘formula.’’ The preponderance of the evi-
dence in this case reflects that there was no specific formula.
Although acknowledging that there are no independent
8(a)(1) allegations to establish antiunion animus, counsel for
the General Counsel contends that certain conduct, not viola-
tive of the Act, still establishes antiunion animus. Counsel
for the General Counsel avers that because the employees
elected the Union, the 1990 bonus was withheld.
Vess and Barone testified about attending an employee
meeting which was conducted by Stanley Schottland. In my
view, Schottland’s statements were lawful within the mean-
ing of Section 8(c) of the Act, and are not evidence of union
animus.
Moreover, Vess and Barone conceded that Stanley
Schottland never ‘‘threatened’’ employees that they would
not receive a bonus if they elected to go Union.
490 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 R. Exh. 7.
5 A motion to withdraw par. 9(c) of the complaint was granted at
the hearing.
The alleged statements by Collichio and Hamilton are
hearsay and as such are not probative of Respondent’s moti-
vation. Moreover, Vess’ bald assertion that Hamilton could
send employees home for termination is not sufficient evi-
dence to conclude that Hamilton is a supervisor within the
meaning of the Act. Furthermore, Vess admitted that the de-
cision to send an employee home was in any case reviewed
by Peter Schottland and the plant manager.
The uncontroverted evidence reflects that neither Hamilton
or Collichio played any part or gave any input into the deci-
sion-making process regarding the divisional performance
bonus.
The testimony reflects that employees were engaged in
guessing, speculating, and spreading rumors regarding the
bonus. The atmosphere was such that even Barone acknowl-
edged that the bonus was ‘‘a very hot topic in the industry.’’
Possibly, Hamilton and Collichio were venting their frustra-
tions at not receiving the bonus, although I am not convinced
the alleged statements attributed to them were in fact made.
Suffice it to say, neither Vess or Barone were competent
to testify or make assessments with respect to Respondent’s
production performance. During fiscal year 1990, Barone
worked one of three shifts as a utility person in the slitting
and extrusion departments. In February 1991, he worked as
a helper. His responsibility as a utility person was limited.
Vess worked the day shift as a maintenance employee. He
acknowledged that the plant engineer is responsible for the
department.
Their jobs and limited access to the plant hardly qualified
Vess or Barone to judge performance or make profit and loss
evaluations.
Prior to any union activity, Respondent evidenced anxiety
about the poor performance of the EL&C division. This is
reflected in the minutes of the board of directors meetings
held on August 23, 24, and 25 and September 1, 1989. See
Respondent’s Exhibit 8.
Moreover, Stanley Schottland testified that a thermometer
in the plant graphically displayed productivity. Thus the em-
ployees were on notice of production inefficiencies.
Further evidence of the Respondent’s lack of union animus
is its relationship with its unionized divisions. For example,
Respondent advised the Union in a letter to Young,4 dated
May 24, 1990, that Respondent had every intention of bar-
gaining in good faith. Respondent also pointed out its satis-
factory relations with its unionized plants.
Indeed, Respondent attended over 30 negotiating sessions,
where the parties agreed to all noneconomic items and all but
five economic areas. The Union, in my opinion, broke off
negotiations and I credit Conti in this regard. I find and con-
clude that Respondent legitimately and legally maintained its
existing bonus program.
In fiscal year 1991, Respondent again embarked on its an-
nual review of divisional performance. Based on the factors
in the division’s reconciliation statement, reflecting increased
profits of over $700,000, Peter Schottland recommended to
corporate a bonus for the EL&C division at 7, 8, or 9 per-
cent. Corporate granted a 9-percent bonus. This was commu-
nicated to the hourly employees on August 29, 1991.
Accordingly, I conclude that Respondent legally continued
to maintain its bonus program.
Conti testified that he did not declare an impasse on behalf
of Respondent. Cantiello claimed that Conti presented a final
offer. However, in either event, the Respondent adhered to
its duty to bargain with the Union in fiscals 1990 and 1991.
Thus, Respondent did not unilaterally change terms and
conditions of employment in violation of Section 8(a)(1), (3),
and (5) of the Act.
Accordingly, I will recommend that the allegations of the
amended consolidated complaint5 be dismissed in their en-
tirety.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The allegations of the amended consolidated complaint
that Respondent has engaged in conduct violative of Section
8(a)(1), (3), and (5) of the Act have not been supported by
substantial evidence.
[Recommended Order omitted from publication.]