American Polystyrene Corp.

National Labor Relations Board - Board Decisions

Mar 30, 2004

341 N.L.R.B. 508 (N.L.R.B. 2004)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 508
American Polystyrene Corporation and International
Chemical Workers Union Council of the United
Food & Commercial Workers International and
its Local 1C. Case 31–CA–25761
March 30, 2004
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER
AND WALSH
This case presents the issues of whether the Respon-
dent claimed a present inability to pay the Union’s bar-
gaining demands during collective-bargaining negotia-
tions and whether the Respondent violated Section
8(a)(5) of the Act by refusing to furnish the Union with
requested financial information.1 The judge found that
the Respondent communicated a present inability to pay
at the April 29, 20022 bargaining session, and that the
Respondent’s subsequent statements on the matter did
not serve to retract its initial claim of inability to pay.
The judge concluded, therefore, that the Respondent’s
refusal to supply the requested financial information vio-
lated Section 8(a)(5). Having considered the decision
and the record in light of the exceptions and briefs, we
find that the Respondent almost immediately retracted
any claim of inability to pay and was not, therefore, obli-
gated to furnish the Union with the requested financial
information. Accordingly, we have decided to affirm the
judge’s rulings, findings,3 and conclusions only to the
extent consistent with this Decision and Order.
Facts
On April 22, the parties began bargaining for a succes-
sor contract to their 1999–2002 agreement. The Union
presented a proposal that called for wage increases and
increased employer contributions to employee 401(k)
plans. On April 23, the Respondent proposed smaller
wage increases, a suspension of the Respondent’s match-
ing 401(k) payments for an unspecified period of time,
and the elimination of employer-provided meals. At the
April 29 bargaining session, the Respondent specified a

1 On January 24, 2003, Administrative Law Judge Lana H. Parke is-
sued the attached decision. The Respondent filed exceptions, a support-
ing brief, and a reply brief; and the General Counsel filed an answering
brief.
The National Labor Relations Board has delegated its authority in
this proceeding to a three-member panel.
2 All subsequent dates refer to 2002 unless specified otherwise.
3 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance 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.
1-year period for the suspension of its matching 401(k)
payments. According to the credited testimony, the Un-
ion’s chief negotiator, Jeffrey Ferro, asked the Respon-
dent’s general manager and chief negotiator, Carolyn
Tan, if “things were really that bad.” After Tan said
things were tough, Ferro asked if Tan was saying that she
could not afford the Union’s proposals. Tan replied,
“No, I can’t. I’d go broke.”4
At the end of the April 29 bargaining session, Ferro
composed and hand-delivered a letter to Tan saying that
Tan claimed that the Respondent could not afford the
union proposals and asking to have the Union’s account-
ant review the company’s books. On April 30, Tan re-
sponded in a hand-delivered letter stating in relevant
part: “ I am rejecting this request. While I have told you
that we are a small company and times are tough, at no
time have I ever told you we cannot afford your propos-
als. Rather, in these uncertain economic times, we be-
lieve that we need to take a more cautious approach than
what you propose.” Following subsequent discussions in
which the parties argued their positions concerning
whether the Respondent had claimed an inability to pay
for the union proposals, the Union gave the Respondent a
letter on May 14 reiterating its allegation that the Re-
spondent claimed an inability to pay and demanding ac-
cess to the Respondent’s financial records. Tan re-
sponded by letter on the same date, denying that she said
that the Respondent could not afford the Union’s propos-
als and denying access to the financial records.
On June 18, the Union filed an unfair labor practice
charge with the Board regarding its information requests.
On August 1, the Respondent informed the Union that,
due to poor sales and rising inventories, it planned to lay
off employees as of August 30 for about 90 days. On
August 30, the Respondent laid off seven of the eight
unit employees.5 In a September 4 letter, the Union cited
the layoffs and the bargaining history and again re-
quested access to the Respondent’s financial records to
aid the parties in bargaining. In a September 6 letter, the
Respondent again denied the Union’s request.
The Judge’s Decision
The judge found that the Respondent claimed an in-
ability to pay when Tan responded to the Union’s ques-
tion about whether she could afford the Union’s propos-
als by stating, “No, I can’t. I’d go broke.” The judge
concluded that the Respondent, therefore, was obligated
to provide information to substantiate its claim. See
4 Tan testified that she said things were tough, but denied stating she
could not afford the Union’s proposals. As noted, the judge discredited
Tan’s testimony on this matter.
5 There is no allegation that these layoffs were discriminatory.
341 NLRB No. 67
AMERICAN POLYSTYRENE CORP. 509
NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956) (an em-
ployer is obligated to provide information to substantiate
a claim that it cannot afford to agree to bargaining de-
mands); Nielsen Lithographing Co., 305 NLRB 697, 700
(1991), affd. sub nom. Graphic Communications Local
508 v. NLRB, 977 F.2d 1168 (7th Cir. 1992) (assertion of
inability to pay triggers duty to disclose financial infor-
mation, while assertion of unwillingness to pay does
not).
The judge noted that in subsequent discussions and let-
ters on the matter, Tan denied making the “I’d go broke”
statement. However, relying on Lakeland Bus Lines,
Inc., 335 NLRB 322 (2001),6 the judge concluded that
Tan’s denials did not demonstrate a sufficient retraction
of the Respondent’s claimed inability to pay. The judge
found that Tan’s subsequent massive layoff of unit em-
ployees lent further support to this conclusion. Accord-
ingly, the judge found the Respondent claimed an inabil-
ity to pay and violated Section 8(a)(5) by its refusal to
provide the requested financial information. We disagree
for the reasons that follow.
Analysis
As the judge correctly stated, the law under Truitt Mfg.
Co. requires that, when an employer asserts a claim that
it is unable to afford a union’s proposals, it is obligated
to provide the union subsequently requested financial
information to substantiate that claim. In Truitt, how-
ever, the Supreme Court recognized that this general rule
is not to be applied mechanically. The Court stated:

We do not hold, however, that in every case in which
economic inability is raised as an argument against in-
creased wages it automatically follows that the em-
ployees are entitled to substantiating evidence. Each
case must turn on its particular facts. The inquiry must
always be whether or not under the circumstances of
the particular case the statutory obligation to bargain in
good faith has been met.

Truitt, supra, 351 U.S. at 153–154. Further, the judge cor-
rectly noted that in certain circumstances the Board has held
that an employer is not obligated to provide requested fi-
nancial information to the union if the employer subse-
quently makes clear that it is not claiming a present inability
to pay. See, e.g., Advertisers Mfg. Co., 275 NLRB 100
(1985) (employer unequivocally disavowed inability to pay

6 The Court of Appeals for the District of Columbia Circuit denied
enforcement of the Board’s decision, finding, inter alia, that the record
did not support the Board’s conclusion that Lakeland had not retracted
its alleged claim of inability to pay. 347 F.3d 955 (2003). The court
stated: “Lakeland responded precisely to the Union’s request for finan-
cial information by making it unmistakably clear that it did not rely on
an inability to pay to justify its bargaining position.” Id. at 964.
with specific written reasons for nonpayment of bonus); and
Central Management Co., 314 NLRB 763, 768–769 (1994)
(after the employer disavowed an earlier inability to pay
statement, the union admitted it was “obvious” employer no
longer claimed an inability to pay). We find that the judge
failed to apply properly the Truitt Court’s caution against
automatic application of the general rule and the Board’s
precedent concerning the retraction of claims of inability to
pay.
Even assuming that Tan’s oral “I’d go broke” state-
ment made during the heat of bargaining rose to the level
of a claimed inability to pay, we find that the Respondent
effectively retracted any such claim simultaneously with
its denial of the Union’s request for information. Citing
Tan’s statement, the Union submitted a request for in-
formation at the close of the bargaining session. On the
very next day, Tan hand-delivered a letter in response
denying that she made a claim of inability to pay and
clarifying the Respondent’s position that the uncertain
economic times called for a more cautious approach than
the Union proposed. Thus, the Respondent’s response
was made immediately and in writing, and it unequivo-
cally advised the Union that the Respondent’s ability to
pay for the Union’s bargaining proposals was not in
question. Under the above cited precedent concerning
disavowal of claims of inability to pay, the Respondent
was not obligated to furnish the requested financial in-
formation to the Union.
The judge’s reliance on Lakeland is misplaced. In that
case, the employer’s alleged claim of inability to pay was
made in a letter to unit employees at the end of negotia-
tions.7 The letter urged the employees to accept the
employer’s final bargaining offer because the employer
was “trying to bring the business into the black.” The
employer denied the union’s request for financial infor-
mation some 2 weeks after the union’s request was made,
asserting that it never took the position that its financial
position precluded it from agreeing to the union’s pro-
posal. In contrast, the Respondent here made the alleged
claim of inability to pay orally, during the heat of a nego-
tiating session, not reflectively in a letter. Further, the
Respondent denied the Union’s request for information
and clarified its bargaining position immediately, within
a day of the alleged claim of inability to pay, not 2 weeks
later.
The dissent places great emphasis on Tan’s continued
denials that she made an inability to pay claim, describ-
ing them as “falsehoods.” The dissent overstates the
case. To be sure, the judge found that Tan made the “I’d
7 We find that it is unnecessary to pass in this case on the validity of
the Board’s decision in Lakeland Bus Lines. As noted, that decision
was reversed on appeal. See fn. 6, supra.

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 510
go broke” statement in the April 29 negotiations and we
do not disavow that finding. The discrediting of a wit-
ness, however, is not a finding that she lied under oath.
A witness can be mistaken or, through faulty recollec-
tion, may honestly believe her testimony. In any event,
the issue here is whether, even assuming the “I’d go
broke” statement was an inability to pay claim, the Re-
spondent was making that claim at the time the informa-
tion was allegedly due. Even assuming arguendo the
information was due one day after a request for it, it is
clear that, at that time, the Respondent made it absolutely
clear that it was not unable to meet the Union’s demands.
Further, unlike our dissenting colleague, we find nothing
in Tan’s denials to suggest that the Respondent was act-
ing in bad faith, a conclusion supported by the fact that
no claim of bad-faith bargaining was made by the Gen-
eral Counsel. Cf. Truitt, supra, 351 U.S. at 153–154
(“The inquiry must always be whether or not under the
circumstances of the particular case the statutory obliga-
tion to bargain in good faith has been met.”). In sum, we
find that, regardless of Tan’s denial, the Respondent’s
letter of April 30 effectively retracted any claim of in-
ability to pay made by Tan during the April 29 negotiat-
ing session.
Our colleague notes that Respondent witness Ben-
ninger was discredited as well. However, we do not
think that this changes the nature of the case. Inasmuch
as Benninger corroborated Tan, the judge’s discrediting
of the one necessarily meant the discrediting of the other.
There is no finding by the judge that either of the two
witnesses intentionally lied. Nor is there a finding that
Tan’s letter of April 30 was false. There is only a find-
ing that it was an insufficient retraction under Lakeland
Bus. As discussed, we believe that Lakeland Bus is dis-
tinguishable.
Our dissenting colleague would find that the Respon-
dent’s denial that it claimed an inability to pay precluded
it from retracting that claim. He reasons that, because
the Union knew that Tan had made the “I’d go broke”
statement, it would put no trust in any attempted retrac-
tion that began with a denial of the statement. We dis-
agree. Assuming that Tan’s statement constituted a claim
of the Respondent’s inability to pay, the Respondent may
nonetheless demonstrate, as an affirmative defense, that
it retracted the claim and thus obviated its obligation to
furnish requested financial information. See Central
Mgmt, supra at 769. The judge’s finding that the state-
ment was made did not prevent the Respondent from
asserting such a defense, and we find that the defense is
meritorious. As discussed above, regardless of the initial
denial of the claim, Tan’s April 30 letter clearly informed
the Union that the Respondent was not claiming an in-
ability to pay, and the Union could reasonably have re-
lied on that representation in further bargaining.
For all of the reasons discussed above, we find that the
Respondent had no duty to provide the requested finan-
cial information. Accordingly, we shall dismiss the
complaint.
ORDER
The complaint is dismissed.

MEMBER WALSH, dissenting.
The judge correctly decided that the Respondent
claimed an inability to pay the Union’s bargaining pro-
posals, failed to retract its claim, and violated Section
8(a)(5) of the Act by its failure to provide the Union with
requested financial information.
According to the credited testimony, when the Re-
spondent’s chief negotiator, Carolyn Tan, was asked if
she could not afford the Union’s proposals, she told the
Union bargaining team, “No, I can’t. I’d go broke.”
This statement, beginning with an admission that the
Respondent cannot afford the Union’s proposal and con-
cluding with an emphasizing point that it would “go
broke,” is a clear claim of inability to pay. The real
question in this case is whether the Respondent’s subse-
quent statements and actions served to retract its claim.
They did not.
Background
The parties began bargaining for a successor contract
on April 22, 2002.1 The Union proposed wage increases
and increased contributions to employee 401(k) plans.
On April 23, the Respondent proposed smaller wage in-
creases and a suspension of the Respondent’s matching
401(k) payments for an indefinite period. On April 29,
the Respondent proposed suspending its 401(k) payments
for a 1-year period. According to the credited testi-
mony, the Respondent’s general manager and chief nego-
tiator, Carolyn Tan, told the Union’s chief negotiator,
Jeffrey Ferro, that things were tough. When Ferro asked
if Tan was saying that that she could not afford the Un-
ion’s proposals, Tan replied, “No, I can’t. I’d go broke.”
Tan testified that she said that things were tough, but that
she did not say she could not afford the Union’s pro-
posal. As noted above, the judge discredited Tan’s de-
nial that she had made the “I’d go broke” statement.
On April 29, Ferro hand-delivered a letter to Tan not-
ing Tan’s claim that the Respondent could not afford the
Union proposals, and asking to have the Union’s ac-
countant review the company’s books. On April 30, Tan
denied the Union’s request in a hand-delivered letter stat-
ing, inter alia, “While I have told you that we are a small

1 All dates are in 2002 unless specified otherwise.
AMERICAN POLYSTYRENE CORP. 511
company and that times are tough, at no time have I ever
told you we cannot afford your proposals. Rather, in
these uncertain economic times, we believe that we need
to take a more cautious approach than what you pro-
pose.” On May 14, after further discussions between the
parties about the Respondent’s alleged inability to pay,
the Union gave the Respondent a letter reiterating its
allegation that the Respondent claimed an inability to pay
and demanding access to the Respondent’s financial re-
cords. Tan responded by letter on the same date, denying
that she had made any claim of inability to pay and deny-
ing the Union’s request.
Analysis
It is well settled that an employer violates Section
8(a)(5) of the Act by refusing to provide the collective-
bargaining representative of its employees with requested
information to substantiate a claim that it cannot afford
to agree to bargaining demands. NLRB v. Truitt Mfg.
Co., 351 U.S. 149 (1956). Here, there is no question that
the Respondent claimed that it could not afford to meet
the Union’s bargaining positions. Tan flatly stated that
she could not meet the demands and that she would “go
broke” if she had to agree to them. There were no further
qualifying statements, which might give these plain
words a different meaning.
The Board has held, however, that even if the em-
ployer initially claims an inability to pay, no duty to dis-
close arises if the employer subsequently makes clear
that it is not claiming a present inability to pay. See,
e.g., Advertisers Mfg. Co., 275 NLRB 100 (1985) (em-
ployer unequivocally disavowed inability to pay with
specific written reasons for nonpayment of bonus); and
Central Management Co., 314 NLRB 763, 768–769
(1994) (union admitted it was “obvious” employer no
longer claimed an inability to pay). Tan’s April 30 letter
stating that the Respondent was not claiming an inability
to pay is not a valid retraction under this precedent, be-
cause the letter’s alleged retraction is compromised by
Tan’s false denials that she ever made a claim of inability
to pay.
Following the Union’s request for financial informa-
tion, all of the Respondent’s statements about its bargain-
ing position began with a denial that Tan made the “go
broke” statement. Because the judge discredited Tan’s
denial that she uttered the “go broke” statement, each of
the Respondent’s subsequent alleged retractions began
with a falsehood. Clearly, lying is a sign of bad-faith
bargaining. See Truitt, supra, 351 U.S. at 152 (“Good
faith bargaining necessarily requires that claims made by
either bargainer should be honest claims.”); Central
Management, supra, 314 NLRB at 770 (“The making of
false claims does not serve any legitimate purpose, but
instead serves to impede progress at the bargaining ta-
ble.”). An effect of lying is to place in doubt the veracity
of any subsequent statements about the subject matter of
the lie. Here, the Union knew that Tan had said the Re-
spondent would “go broke.” When Tan began her so-
called clarification of the Respondent’s bargaining posi-
tion with a lie about the “go broke” statement, there was
no reason for the Union to believe anything else Tan had
to say on the matter. In sum, the Union had no basis for
believing that the Respondent was acting in good faith
when it purported to retract its claim of inability to pay.2
Under these circumstances, the Respondent did not un-
equivocally retract its initial claim.
The judge properly applied Lakeland Bus Lines, Inc.,
335 NLRB 322 (2001), enf. denied 347 F.3d 955 (D.C.
Cir. 2003), to find that the Respondent failed to retract its
claim of inability to pay because the Respondent never
acknowledged that it had made such a claim. However,
the present matter presents a stronger case that the Re-
spondent’s denial did not serve as an effective retraction.
In Lakeland, the employer did not deny that it had made
statements about business losses; instead, the employer
asserted that its statements about business losses did not
amount to claims of inability to pay. In contrast, the
Respondent here does not attempt to explain or qualify
the “go broke” statement and instead denies that it made
such a statement. 3 Thus, the Respondent remained obli-

2 The majority states that the judge’s discrediting of Tan’s testimony
is not the same as a finding that she lied: “A witness can be mistaken
or, through faulty recollection, may honestly believe her testimony.”
Tan, however, was not the only Respondent official discredited by the
judge. Carl Benninger, the Respondent’s technical operational man-
ager, also testified that Tan never made the “go broke” statement.
Based on demeanor, as well as Ferro’s bargaining notes, the judge
credited the two Union witnesses and concluded that Tan did, in fact,
state that the Respondent would “go broke” if it agreed to the Union’s
proposals. It is highly unlikely that the Respondent’s two witnesses,
Tan and Benninger, were both “mistaken” or simultaneously suffering
from a “faulty recollection” on such an important matter. It is far more
likely that they shaded their testimony to put the Respondent in the best
possible legal position. But even if they both honestly believed their
testimony, the Union was still asked to accept the Respondent’s alleged
retractions that always were prefaced with a statement that the Union
knew (and the judge found) was untrue. Thus, the Union still had no
basis for believing that the alleged retractions were made in good faith.
3 Although the court of appeals did not enforce the Board’s order in
Lakeland, the court’s decision acknowledged that concerns present in
this case were not at issue in the matter before it. In finding that the
employer’s response to the request for financial information made it
clear that the employer was not relying on an inability to pay, the court
stated, “[t]here is nothing in the Board’s order or the ALJ’s findings to
suggest that these disavowals were made disingenuously or in bad
faith.” Lakeland Bus Lines v. NLRB, 347 F.3d at 964 (citation omitted).
In this case, the credibility findings establish that Tan did claim the
Respondent would “go broke” if it paid the Union’s proposals. Accord-
ingly, the Respondent’s subsequent denials of this statement were dis-
ingenuous and in bad faith. The Respondent’s denials, therefore, were

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 512
gated to provide the requested financial information, and
its refusal to do so violated Section 8(a)(5).

Alice Garfield, Atty., for the General Counsel.
David M. Lester, Atty., of Costa Mesa, California, for the Re-
spondent.
DECISION
STATEMENT OF THE CASE
LANA H. PARKE, Administrative Law Judge. This case was
tried in, Los Angeles, California, on December 9, 2002. 1 Pur-
suant to charges filed by International Chemical Workers Un-
ion Council of the United Food & Commercial Workers Inter-
national and its Local 1C (the Union), the Regional Director for
Region 31 of the National Labor Relations Board (the Board)
issued a complaint and notice of hearing (the complaint) on
October 18. The complaint, as amended, alleges that American
Polystyrene Corporation (Respondent) violated Section 8(a)(5)
and (1) of the National Labor Relations Act (the Act). 2
ISSUES
1. Did Respondent claim financial inability to pay for benefits
proposed by the Union during collective bargaining?
2. Did Respondent violate Sections 8(a)(5) and (1) of the Act
by refusing to furnish requested financial information to the
Union?

On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by the General Counsel and Respondent I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent is a California corporation manufacturing plas-
tics at its facility in Torrance, California (the facility.) During
the representative 12-month period preceding the complaint,
Respondent purchased and received at its facility goods and
services valued in excess of $50,000 directly from points out-
side the State of California. Respondent admits and I find that it
is an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act and that the Union is a
labor organization within the meaning of Section 2(5) of the
Act.3

not trustworthy statements and could not serve to retract its claim of
inability to pay.
1 All dates are in 2002 unless otherwise indicated.
2 At the hearing, General Counsel amended the complaint to reflect
the correct name of Respondent and the correct titles of Carolyn Tan
and Carl Benninger, respectively, as general manager and vice presi-
dent and technical and operations manager. Respondent’s name appears
as amended at the hearing.
3 Where not otherwise noted, the findings herein are based on the
pleadings, the stipulations of counsel, and/or unchallenged credible
evidence.
II. ALLEGED UNFAIR LABOR PRACTICES
A. The Union’s request for information
On April 22, Respondent and the Union commenced negotia-
tions over the terms and conditions of a successor collective-
bargaining agreement to cover the following employees: Pro-
duction and maintenance employees, including shipping and
receiving employees and truckdrivers at Respondent’s facility.
At the initial bargaining session of April 22, Jeffrey P. Ferro
(Mr. Ferro), international union representative assigned to ser-
vice the 1999–2002 labor contract between Respondent and the
Union and to conduct successor agreement bargaining, pre-
sented the Union’s proposals. The Union’s proposals included,
inter alia, five percent yearly wage increases and increased
employer contribution to employee 401K plans. On April 23,
the next bargaining session, Respondent, through Carolyn Tan
(Ms. Tan), general manager and vice president, proposed to
limit wage increases to one and two percent, respectively, in the
second and third years of the contract, to discontinue Respon-
dent’s match of 401K employee contributions for an unspeci-
fied period, and to eliminate the existing meal provisions.
At the April 29 bargaining session, Respondent proposed to
discontinue its 401K fund matching for a 1-year period. After
discussion of Respondent’s counterproposals, Mr. Ferro asked
if “things,” meaning Respondent’s financial affairs, were
“really that bad.”
Ms. Tan said, “Things are tough.”
According to Mr. Ferro, he asked, “Are you saying that you
can’t afford the Union’s proposals,” to which Ms. Tan replied,
“No, I can’t. I’d go broke.” While Ms. Tan admitted saying
times were tough on or before the April 29 session, she denied
saying Respondent could not afford the Union’s proposals.
Roosevelt Parker (Mr. Parker), long-term employee and negoti-
ating team member, essentially corroborated Mr. Ferro’s testi-
mony. Carl Benninger (Mr. Benninger), technical and opera-
tions manager, corroborated Ms. Tan’s denial. Mr. Ferro and
Mr. Benninger kept notes of the bargaining sessions. Both sets
of notes are sketchy and almost solely reflect proposal particu-
lars. However, the bargaining notes of Mr. Ferro include the
following notation for the bargaining session of April 29?:
Why the take away—are things this bad—Would go broke if
gave unions proposals.
Before he left Respondent’s facility at the conclusion of the
April 29 session, Mr. Ferro composed the following letter (the
demand letter) on his laptop computer and hand delivered it to
Ms. Tan:

Based on your responses on April 23 and today to Union Pro-
posals . . . and the fact that you claim that things are tough and
the Company cannot afford these items, the Union demands
access to review the Company’s books. Please let us know
when they will be available for our review, so we can make
arrangements for our accountant’s schedule.4
4 Both Mr. Benninger and Ms. Tan testified that Mr. Ferro handed
the demand letter to Ms. Tan at the beginning of the April 29 bargain-
ing session. Ms. Tan testified that she did not read it until after the
session. I cannot accept that testimony. I find it implausible that Ms.
Tan would fail at least to scan the Union’s letter since any letter would
AMERICAN POLYSTYRENE CORP. 513

On April 30, Ms. Tan in a hand-delivered letter to the Union
responded:

I am in receipt of your letter dated April 29, 2002, in which
you request access to the Company’s books. I am rejecting
this request. While I have told you that we are a small com-
pany and times are tough, at no time have I ever told you we
cannot afford your proposals. Rather, in these uncertain eco-
nomic times, we believe that we need to take a more cautious
approach than what you propose. I hope this clears up any
confusion that you have regarding our responses to your pro-
posals.

The parties discussed Respondent’s financial condition again
during the May 2 bargaining session. Mr. Ferro asked if busi-
ness was really that bad, and Ms. Tan replied, “Have you seen
sales lately.”
At the negotiating meeting of May 14, Mr. Ferro asked that
Respondent comply with the Union’s information requests. Ms.
Tan said that the company was not taking a position of financial
hardship. Mr. Ferro asked why the company had proposed “all
these take aways.” Ms. Tan said that Respondent had looked at
other companies that were not providing meal coverage similar
to Respondent’s. By hand-delivered letter to Ms. Tan dated
May 14, Mr. Ferro wrote as follows:

We have reviewed our notes and our understanding of what
has been said by you . . . and it is clear that you said you could
not afford the Union’s proposals or to continue paying meal
allowances or matching money on the employees’ 401K.
During one session our notes reflect the following dialog:

Union: Are things that bad that you can’t continue to
pay meal allowances and continue to match the 401K
plan?
Carolyn: Things are tough.
Union: So are you saying you cannot afford the Un-
ion’s proposals?
Carolyn: No I can’t. I’d go broke
. . . . [T]he Union again demands access to review the
Company’s Financial Records. Failure to comply will
result in the filing of Unfair Labor Practice Charges
with the National Labor Relations Board.5

By letter dated the same day, Ms. Tan responded:

I am in receipt of your letter dated May 14, 2002, that I re-
ceived today in which you assert that I told you that American
Polystyrene could not afford the union proposals. You further
contend that your notes reflect that I said, “No I can’t. I’d go
broke.” I never said these words or anything similar. As I
wrote you in my last letter, I have never stated that we could

likely relate to negotiations, and it is reasonable to expect that if the
letter had been delivered at the beginning of the session, Ms. Tan would
have mentioned it during negotiations.
5 According to Mr. Ferro, the quoted language in this letter was
based on the notes of employee Chris Thomas who was present at the
April 29 negotiation. Mr. Thomas later told Mr. Ferro that he had de-
stroyed his notes.
not afford any of your proposals. The fact of the matter is that
after I informed you that times are tough, you asked me, “Are
things that bad?” I responded, “Have you looked at sales.”
Because by refusing to provide International Chemical Work-
ers Union Council of the United Food & Commercial Work-
ers Union International Union and Its Local 1C with re-
quested financial information I have never told you that we
cannot afford any of your proposals, it would be inappropriate
for me to allow you access to our financial records, and hence,
I am denying your request.

On June 18, the Union filed an unfair labor practice charge
with the Board alleging, in part, that Respondent refused to
supply information to the Union in violation of Section 8(a)(5)
of the Act.
By email of August 1, Ms. Tan notified the union that due to
unimproved sales and rising inventories, Respondent tentatively
planned to lay off employees, effective August 30, for ap-
proximately 90 days. On August 30, Respondent laid off nearly
the entire unit.
By letter dated September 4, the Union again requested ac-
cess to Respondent’s financial records stating, in part, as fol-
lows:

In light of the Company’s most recent action, “temporarily”
discontinuing operations and laying off bargaining unit em-
ployees, combined with your proposals to freeze 401K
matches for one year, to discontinue meal allowances and
your efforts to have non-bargaining unit employees and su-
pervisors do bargaining unit work to avoid paying overtime to
the bargaining unit employees, we are confident any reason-
able person assigned to look at the evidence in this matter will
indeed conclude that the company’s financial records must be
opened for review by the Union. To avoid the inevitable and
to help move negotiations forward, please comply with this
request by Friday, September 13, 2002. The providing of
solid evidence as to the Company’s financial position may
provide ample room for more creative, expeditious and posi-
tive bargaining.

By letter dated September 6, Respondent again refused the
Union’s request to see its financial records.
B. Credibility
The only relevant credibility question herein relates to an ex-
change between Mr. Ferro and Ms. Tan during April 29 nego-
tiations. Mr. Ferro and Mr. Parker testified that Ms. Tan
claimed financial inability to fund the Union’s proposals. Ms.
Tan and Mr. Benninger denied any such assertion. Mr. Ferro’s
bargaining notes tend to substantiate his version of the ex-
change. The parties’ correspondence following the April 29
negotiating session is essentially consistent with each party’s
testimony and contributes nothing to resolving credibility. I
have largely considered witness manner and demeanor as well
as testimony congruity in determining which testimony is the
most persuasive. Mr. Ferro’s testimony was consistent and
detailed, and he appeared to have good recall of events. I credit
Mr. Ferro’s testimony of the April 29 exchange and conclude

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 514
that Ms. Tan did, in fact, state that Respondent could not afford
the Union’s proposed benefits.
C. Discussion
An employer violates Section 8(a)(5) of the Act by refusing
to provide the collective-bargaining representative of its em-
ployees with requested information to substantiate a claim that
it cannot afford to agree to bargaining demands. NLRB v. Truitt
Mfg. Co., 351 U.S. 149 (1956). A claim of financial inability to
pay is not the same as a claim of competitive disadvantage. In
the former instance the employer claims it cannot pay and in
the latter simply asserts it will not pay. Nielsen Lithographing
Co., 305 NLRB 697, 700 (1991), affd. sub nom. Graphic Com-
munications Local 50B v. NLRB, 977 F.2d 1168 (7th Cir.
1992). An unwillingness to pay does not trigger an employer
obligation to turn over financial records. Claims of economic
hardship and business losses can reasonably convey “a present
inability to pay” and “must be evaluated in the context of the
particular circumstances [of the] case.” Lakeland Bus Lines,
Inc., 335 NLRB 322 (2001), citing Nielsen Lithographing Co.,
supra, and Shell Co., 313 NLRB 133 (1993).

In the instant matter, Respondent’s negotiator, Ms. Tan, spe-
cifically stated during negotiations that the company could not
afford the Union’s proposals. Thereafter, in declining to furnish
the requested information, Ms. Tan consistently denied making
any such statement. Respondent argues that where an employer
makes clear that it is not pleading inability to pay or if an em-
ployer retracts its claimed inability to pay, the Board will not
require the employer to open its books to the Union. In this
regard, Respondent cites Genstar Stone Products, 317 NLRB
1293, 1298 (1995); Advertisers Mfg. Co., 275 NLRB 100
(1985); and Central Management Co., 314 NLRB 763, 763–
769 (1994). The cases are not wholly apposite. In Genstar
Stone Products, the employer never claimed that a poor eco-
nomic condition was the reason for proposed reductions and a
statement that “the well was dry” was accompanied by an ex-
planation that the bargainer had no authority to offer more. In
Advertisers Mfg. Co., the employer expressly and unequivo-
cally disavowed any inability to pay, including providing spe-
cific written managerial reasons for nonpayment of a bonus. In
Central Management Co., the union admitted that it was “obvi-
ous” the employer no longer claimed an inability to pay. Here,
Respondent neither retracted its claim of inability to pay nor
asserted an ability to pay the increased benefits proposed by the
Union. Rather, Respondent’s entire conduct has been consistent
with a claim of inability to pay: through Ms. Tan, Respondent
proposed reducing contractual benefits; said it would “go
broke” if it met the Union’s proposals; even while denying the
“go broke” statement, said that “things are tough;” and insti-
tuted an economic layoff of most of the unit employees. In
these circumstances, Respondent’s denial that it had expressed
any inability to pay is at odds with its continuing words and
conduct and does not constitute a sufficient retraction. See
Lakeland Bus Lines, Inc., supra at 328, in which the Board
concluded that the employer had not effectively communicated
a retraction of its claimed inability to pay. Accordingly, I con-
clude that Respondent claimed financial inability to pay for
proposed benefits during its collective bargaining with the Un-
ion, and violated Section 8(a)(5) and (1) by refusing to furnish
requested financial information to the Union.
CONCLUSION OF LAW
By refusing to provide International Chemical Workers Un-
ion Council of the United Food & Commercial Workers Inter-
national and Its Local 1C with requested financial information.
Respondent has engaged in unfair labor practices affecting
commerce within the meaning of Sections 8(a)(5) and (1) and
Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act. On these findings of fact and conclu-
sions of law and on the entire record. I issue the following re-
commended6
[Recommended order omitted from publication.]

6 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.