Appalachian Shale Products Co.

National Labor Relations Board - Board Decisions

Oct 1, 1958

121 N.L.R.B. 1160 (N.L.R.B. 1958)

1160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Appalachian Shale Products Co. and United Brick and Clay
Workers of America , AFL-CIO, Petitioner . Case No. 5-RC-
2393. October 1, 1958
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Lawrence S. Wescott, hear-
ing officer. The hearing officer's rulings made at the hearing are free
from prejudicial error and are hereby affirmed.
Upon the entire record in this case, the Board finds :
1. The Employer is engaged in commerce within the meaning of
the National Labor Relations Act.
2. The labor organizations here involved claim to represent certain
employees of the Employer.'
3. The question concerning representation :
The Company has recognized the Intervenor as the bargaining
representative of its employees since 1952. On January 1, 1956, the
Company and the Intervenor entered into a 2-year contract expiring
December 31, 1957, and containing a provision that it was to be effec-
tive from year to year thereafter unless at least 60 days prior to any
contract expiration date either party notifies the other in writing of
its decision to amend, modify, or terminate the agreement. On
October 28, 1957, the Intervenor notified the Company in writing
that it wished to reopen the contract. On December 16, 1957, repre-
sentatives of the Company and the Intervenor met for the purpose of
negotiating changes. According to the record, the parties agreed
upon the changes but prepared no draft of a contract, and that eve-
ning Intervenor official Price, using his notes, presented the changes
to the membership at a meeting and the members voted to ratify.
After the meeting, Price notified Company Vice President Sells that
the membership voted to ratify the agreement and that a contract
could be drafted. The following day, December 17, Sells wrote Com-
pany counsel setting forth the changes to be embodied in the contract.
The record shows, however, that a draft of the contract was not com-
pleted or signed until December 30, 1957.
In the meantime, the Petitioner's business representative, informed
by his International office on December 18 that the employees were
interested in joining the Petitioner, met with several of them on
December 21. Learning from them of the Company's negotiations
with the Intervenor, he signed up 22 employees on that occasion. On
December 23, the Petitioner wrote the Company demanding recogni-
i United Construction Workers, Division of District 50, United Mine Workers of America,
herein called Intervenor, intervened in this proceeding on the basis of an alleged con-
tractual interest.
121 NLRB No. 149.
APPALACHIAN SHALE PRODUCTS CO. 1161
tion as the bargaining representative of the employees here involved.
On December 26, the present petition was filed.
The Petitioner contends that the contract cannot serve as a bar be-
cause its petition was filed prior to the date on which the contract was
actually signed. The Company and the Intervenor contend that the
contract does serve as a bar because there had been a meeting of the
minds of the parties prior to the date of the filing of the petition and
all that remained was the ministerial act of signing the contract.
The Board has been reexamining its contract bar rules with a view
toward simplifying and clarifying their application wherever feasible
in the interest of more expeditious disposition of representation cases
and of achieving a finer balance between the statutory policies of
stability in labor relations and the exercise of free choice in the selec-
tion or change of bargaining representatives. As part of this process
of reappraisal, the Board has recently issued four lead cases 2 which
set forth certain major revisions and clarifications in the rules appli-
cable to various significant aspects of contract bar policy. These
major areas include duration of contract, the representative status of
the contracting union, rival claims and petitions, provisions for change
in contracts and the effect of conduct of the contracting parties, and
unlawful union security and similar provisions. Other areas of con-
tract bar policy remain , including adequacy of contract. This area,
in the Board's opinion, does not require the major revisions and clari-
fications of the type found necessary in the four lead cases already
issued. Although certain changes must be made, they are of the type
not infrequently made in normal representation case handling. Thus,
the instant case furnishes an appropriate vehicle for the relatively
minor revisions in the field of adequacy of contract.
It is well established that oral agreements cannot serve as a bar., It
is equally well established that contracts not signed before the filing of
a petition cannot serve as a bar.4 These rules are simple, easily under-
stood, and require no change. In the application of the second of
these rules, however, a problem has arisen that merits reconsideration.
Thus, although a contract is signed by the parties after the filing of a
petition, it has been held to be a bar where the parties considered the
agreement properly concluded and put into effect some of its im-
portant provisions.,' The Board has reexamined its prior decisions in
this respect and has concluded that the effectiveness of its contract
bar policies can best be served by eliminating this exception to the
rule that a contract not signed before the filing of a petition cannot
2 Hershey Chocolate Corporation, 121 NLRB 901 ; Keystone Coat, Apron & Towel
Supply Company, it al, 121 NLRB 880; Deluxe Metal Furniture Company, 121 NLRB
!D95; and Pacific Coast Association of Pulp and Paper Manufacturers, 121 NLRB 990.
8 J. Sullivan & Sons Mfg Corp ., 105 NLRB 549.
4 Mt. Clemens Metal Products Company, 110 NLRB 931.
5 See, for example , Oswego Falls Corp., 110 NLRB 021.
1162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
serve as a bar. It feels that after more than 20 years of contract bar
policy, the parties should be expected to adhere to this relatively
simple requirement, and that the creation of exceptions such as this
only serve to render unduly complex a field that should not have be-
come so involved. Accordingly, the Board adopts the rule that a
contract to constitute a bar must be signed by all the parties before
a petition,is filed and that unless a contract signed by all the parties
precedes a petition, it will not bar a petition even though the parties
consider it properly concluded and put into effect some or all of its
provisions.6
The Board recognizes that on occasion contracts are not embodied -
in formal documents and that the parties, for reasons best known to
them, execute and sign an informal document which nonetheless con-
tains substantial terms and conditions of employment. Sometimes
the agreement is arrived at by an exchange of a written proposal and
a written acceptance, both signed. The rule stated above in no way
diminishes the effectiveness of such contracts as a bar; it simply makes
clear the necessity for signing the contracts or documents constituting
the agreement of the parties.
Related to the requirements for proper execution of contracts is
the question of prior ratification by the union membership. The gen-
eral rule is that where ratification is made a condition precedent to
contract validity, failure to achieve timely ratification of the con-
tract, i.e., before the filing of a petition, will remove it as a bar.' The
Board finds no necessity for revising this general rule. However, the
rule has been applied not only to contracts which by their own ex-
press terms create such a condition precedent but also to situations
in which the contract was silent as to prior ratification but such a con-
dition precedent was spelled out from an alleged understanding of
the parties at or about the time of the contract negotiations 8 The
latter has resulted in conflicting testimony and protracted hearings,
creating contested factual issues for the Board to resolve. The Board,
in reexamining this extension of the general rule, is of the opinion
that only where the written contract itself makes ratification a con-
dition precedent to contractural validity shall the contract be no bar
until ratified. This change is consistent with the Board's view that
every effort should be made to eliminate the litigation of factual is-
sues such as these in representation cases and to give greater weight
to the language of the contract itself. For like reasons, the Board
feels that in all cases where the question of prior ratification depends
8 Oswego Falls Corp., supra ; Natona Mills, 112 NLRB 236 , and other cases similarly
decided, to the extent that they are inconsistent herewith , are hereby overruled. No
change is made in the rule that a written contract which is orally extended will not
constitute a bar or in the rule that an automatic renewal of a written contract will not
be forestalled by oral notice.
7 See, for example , Westinghouse Electric Corp ., Small Motor Division, 111 NLRB 497.
8 See, for example, Roddis Plywood d Door Company, inc., 84 NLRB 310.
APPALACHIAN SHALE PRODUCTS CO. 1163
upon an interpretation of a provision for prior ratification in a
Union's constitution or bylaws, as distinguished from the incorpora-
tion of an express provision in the contract, the contract will consti-
tute a bar. Accordingly, the rule for prior ratification is restated as
follows : Where ratification is a condition precedent to contractural
validity by express contractural provision, the contract will be inef-
fectual as a bar unless it is ratified prior to the filing of a petition, but
if the contract itself contains no express provision for prior ratifica-
tion, prior ratification will not be required as a condition precedent
for the contract to constitute a bar.'
Another related subject is the requirement, for contract bar pur-
poses, that to bar a petition a collective-bargaining agreement must
contain substantial terms and conditions of employment.10 This is a
general rule which the Board affirms. In reexamining the applica-
tion of this general rule, however, the Board finds that an exception
has developed which tends to lessen its effectiveness. Thus, an agree-
ment limited to wages only, and containing no other terms and con-
ditions of employment has been upheld as a bar.il The Board has
reconsidered this exception, and finds that it is inconsistent with the
basic premise that only a contract embodying the substantial terms
and conditions of employment tends to stabilize the bargaining rela-
tionship. Failure to make such provisions leaves the parties in a con-
tinuous state of uncertainty with respect to material and pertinent
aspects of their labor relations during the lifetime of the agreement,
with the direct consequence of rendering the contract incapable of
providing the stability contemplated by the Act. The Board is mind-
ful of the fact that at times the execution of a contract such as one
limited to wages only or to some terms which could not be deemed
substantial may serve at least as a temporary expedient in resolving
a conflict. Experience demonstrates, however, that real stability in
industrial relations can only be achieved where the contract under-
takes to chart with adequate precision the course of the bargaining
relationship, and the parties can look to the actual terms and condi-
tions of their contract for guidance in their day-to-day problems. It
is felt that objectivity based on known standards should replace the
uncertainty of subjective reasons and explanations, and that the elim-
ination of this exception will provide a surer and more predictable
policy to guide those who come before the Board. Accordingly the
rule is restated as follows : to serve as a bar, a contract must contain
substantial terms and conditions of employment deemed sufficient to
stabilize the bargaining relationship; it will not constitute a bar if it
e Roddis Plywood & Door Company, supra, and other cases similarly decided, to the
extent they are inconsistent herewith , are hereby overruled.
10 See, for example , Bethlehem Steel Corporation , 95 NLRB 1508.
21 Nash -Kelvinator Corporation , 110 NLRB 447.
1164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
is limited to wages only, or to one or several provisions not deemed
substantial.'a
There are several other areas dealing with adequacy of contract,
for contract-bar purposes but as these do not require any revision,
they can be restated here without amplification. Thus, a master
agreement is no bar to an election at one of the employer's plants
where by its terms it is not effective until a local agreement has been
completed or the inclusion of the plant has been negotiated by the
parties as required by the master agreement, and a petition is filed
before these events occur. However, where the master agreement is
found to be the basic agreement and the local supplement merely
serves to fill out its terms as to certain local conditions, it will con-
stitute a bar. A contract for members only does not operate as a
bar. To serve as a bar, a contract must clearly by its terms encom-
pass the employees sought in the petition. Finally, the contract as-
serted as a bar must embrace an appropriate unit.
We turn now to the facts of the instant case. As noted above, it
is clear that although the petition was filed on December 26, 1957,
the contract between the Company and the Intervenor was not exe-
cuted and signed until December 30, 1957. Under the rule set forth
above with respect to a contract not signed prior to the filing of a
petition, the contract would not have been effective as a bar. How-
ever, one of the major changes in the contract bar rules-a change that
is perhaps one of the most significant in the Board's current revision
of its contract bar policies-is the establishment of a 60-day insulated
period. Under that rule, a 60-day period immediately preceding the
expiration date of an existing contract is established during which the
parties may negotiate and execute a new or amended agreement with-
out the intrusion of a rival petition.13 A petition filed during the 60-
day insulated period is subject to dismissal as untimely, regardless
of any conduct of the parties during that 60-day period. As indicated
above, the petition in the instant case was filed on December 26, 1957,
which was during the 60-day insulated period. Under the circum-
stances, and for the reasons set forth in the Deluxe case, the petition
is untimely.
It is worth noting that the facts of the instant case illustrate
graphically the effectiveness of the 60-day insulated period in further-
ing the aims of collective bargaining during a period when it is most
vitally needed, and in preventing, as we pointed out in Deluxe, "the
threat of overhanging rivalry and uncertainty during the bargaining
period." By the same token, as is indeed made clear in this very
case, the establishment of the insulated period appreciably reduces
12 To the extent that they are inconsistent herewith , Nash-Kel1•inator Corporation,
supra, and other cases similarly decided, are hereby overruled.
Is Deluxe Metal Furniture Company, supra.
GENERAL EXTRUSION COMPANY, INC. 1165
the number of instances in which the Board will be confronted, as it
was here, with the problem created by a contract signed after a peti-
tion is filed.
In view of our finding that the petition was filed during the 60-day
insulated period, we find that no question affecting commerce exists
concerning the representation of employees of the Employer within
the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act.
Accordingly, we shall dismiss the petition filed herein.
[The Board dismissed the petition.]
General Extrusion Company, Inc., General Bronze Alwintite
Products Corp: and Local 411, Metal, Precision , Electronics
and Production Workers, N. I. U. C., Petitioner. Case No.
2-RC-9286. October 1, 1958
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9 (c) of the National
Labor Relations Act, a hearing was held before Milton A. Shaham,
hearing officer. The hearing officer's rulings made at the hearing are
free from prejudicial error and are hereby affirmed.
Upon the entire record in this case, the Board finds :
1. The Employer is engaged in commerce within the meaning of
the National Labor Relations Act.
2. The labor organizations involved claim to represent certain
employees of the Employer.
3. The question concerning representation :
The Employer and the Intervenor, Warehouse & Processing Em-
ployees Union Local 258 (Ind.), contend that an existing collective-
bargaining agreement covering all the Employer's employees at
Whitestone, New York, effective from November 1, 1957, until Novem-
ber 1, 1959, is a bar to this proceeding. The Petitioner takes the posi-
tion that the contract is not a bar because it was executed at a time
when the Employer did not employ a substantial,and representative
work force at its Whitestone operations.
General Extrusion Company, Inc., commenced operations in July
1957 at its Whitestone plant. General Extrusion and General Bronze
Alwintite Products Corp., subsidiaries of General Bronze Corpora-
tion, are engaged in the interrelated production and distribution of
aluminum storm doors and windows, and' other metal products.
General Extrusion produces the extruded metal, which after fabrica-
I The name of the Employer appears as corrected at the hearing.
121 NLRB No. 147.