Associated General Contractors

National Labor Relations Board - Board Decisions

Oct 4, 1962

138 N.L.R.B. 1432 (N.L.R.B. 1962)

1432 , DECISIONS OF NATIONAL LABOR RELATIONS BOARD
4. The Respondents have not, as alleged in the complaint, interfered with, re-
strained , or coerced its employees in the exercise of the rights guaranteed in Sec-
tion 7 of the Act, within the meaning of Section 8(a)(1) of the Act.
RECOMMENDATION
Based upon the foregoing findings of facts, conclusions of law , and the entire
record in the case , I recommend that the complaint in its entirety be dismissed.
Associated General Contractors , Georgia Branch ; and each of
its Members 1 and Plumbers & Steamfitters Union Local 72
Associated General Contractors , Georgia Branch and Inter-
national Brotherhood of Electrical Workers, Local Union
No. 613
Daniel Construction Company, Inc., d/b/a Daniel Construction
Company of Georgia and Warren W. McCraw
Associated General Contractors , Georgia Branch and Sheet
Metal Workers' International Association , Local Union No. 85,
AFL-CIO
Associated General Contractors , Georgia Branch , and Abco
Builders , Inc. and Painters, District Council No. 38
Associated General Contractors, Georgia Branch , Batson-Cook
Co. and Oliver B. Cole. Cases Nos. 10-CA-4749, 10-CA-4754,
10-CA-4753, 10-CA-4756, 10-CA-4790, and 10-CA-479$. Octo-
ber 4, 1962
DECISION AND ORDER
On May 15, 1962, Trial Examiner Henry S. Salim issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondents had not engaged in the unfair labor practice alleged in
the complaint and recommending that the complaint be dismissed in
its entirety, as set forth in the attached Intermediate Report. There-
after the General Counsel and the Respondents filed exceptions to the
Intermediate Report and supporting briefs. Associated General
Contractors of America filed an aimicus brief.
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
Board has considered the Intermediate Report, the exceptions I and
the briefs, and the entire record herein, and, except as noted, hereby
1 The Member Respondents are listed in Appendix A of the Intermediate Report attached
hereto
2 In view of our dismissal of the complaint on the merits as to all Respondents, we find
it unnecessary to rule upon the Trial Examiner 's failure to sever from the consolidated
proceeding the complaint against Daniel Construction Company, or to pass upon or adopt
the Trial Examiner ' s finding that nonmembers of the AGC had authorized that Association
to represent and bargain for them.
138 NLRB No. 144.
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1433
adopts the findings, conclusions, and recommendations of the Trial
Examiner for the reasons set forth in Building Contractors Association
of Rockford, Inc., 138 NLRB 1405.
[The Board dismissed the complaint.]
MEMBERS FANNING and BRowN took no part in the consideration of
the above Decision and Order.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
This proceeding brought under Section 10(b) of the National Labor Relations
Act, 61 Stat. 136, as amended , herein called the Act, against the Respondents, named
above in the caption, was initiated upon charges and amended charges filed by
Plumbers & Steamfitters Union Local No. 72 on July 3 and 11, and September 8,
1961; by charges filed by International Brotherhood of Electrical Workers on July 7,
1961; by charges filed by Sheet Metal Workers International Association, AFL-CIO,
on July 12, 1961; by Warren W. McCraw on July 5, and September 12, 1961; by
Painters, District Council No. 38 on September 6, and October 24, 1961; and by
Oliver B. Cole on September 11, 1961. The Regional Director, acting for the
General Counsel, issued a consolidated complaint on October 26, 1961, alleging
violations of the Act, within the meaning of Section 8 (a)(1) and 8(a)(3). The
complaint, in part, reads as follows:
AGC [Associated General Contractors] and the employers, individually and
collectively, on or about June 30, 1961, shut down and closed building and
construction job sites in the Metropolitan Atlanta area, and thereafter, until
on or about July 17, 1961, failed and refused to reopen and resume said jobs.
* * * [by such actions Respondents] locked out and laid off members of the
Unions employed at the building and construction job sites in the Metropolitan
Atlanta, Georgia, area.'
Between November 2 and 11, 1961, the Respondents filed their answers denying
the commission of any unfair labor practices.
Hearings were held in Atlanta, Georgia, beginning December 18 and concluding
on December 27, 1961, before Trial Examiner Henry S. Salim. All parties were
represented .by counsel, and were afforded full opportunity to participate in the hear-
ing, to introduce relevant evidence, and to argue orally. The motion of Tri-State
Contracting Company to dismiss the proceedings as to it was granted at the hearing
with the acquiescence of the General Counsel. Ruling was reserved upon the motion
of the Respondents to dismiss the case at the conclusion of their case-in-chief and
is hereby ruled upon in acocrdance with the findings and conclusions made herein.
Briefs were filed by the General Counsel, Sheet Metal Workers' International Asso-
ciation, Local Union No. 85, AFL-CIO, counsel for Associated General Contractors
(AGC), counsel for the Darnel Construction Company, and a brief amicus offered
by counsel representing the Associated General Contractors of America was accepted
on March 26, 1962.
Upon the entire record in the case and consideration of the arguments and motions
of counsel, including the briefs filed by the parties and citations of cases alleged
to be dispositive of the issues in this proceeding, and from observation of the
demeanor of the witnesses, the Trial Examiner makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENTS AGC AND ITS EMPLOYER MEMBERS
Associated General Contractors, Georgia Branch, herein referred to as AGC, is a
nonprofit Georgia corporation, with its principal office and place of business at
Atlanta, Georgia. It admits to membership employers engaged in the building and
construction industry as general contractors (a list of which is attached hereto as
Appendix A), and exists in part for the purpose of representing its members in
collective-bargaining negotiations with labor organizations in the Metropolitan
1 The charges state that approximately 10,000 employees were affected.
1434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Atlanta area. It participates through designated representatives in the negotiation,
execution, and administration of collective-bargaining agreements on behalf of its
members with various building and construction trade unions in the Atlanta area,
including International Union of Operating Engineers, Local No. 926, AFL-CIO;
United Brotherhood of Carpenters and Joiners of America, Local Union 225, AFL-
CIO; Construction & General Laborers Union, Local Union 438, AFL-CIO; Brick-
layers and Masons Union, Nos. 8 and 9, Georgia; Truck Drivers and Helpers Local
Union No. 728; and Plasterers & Cement Masons, Local Union 148, AFL-CIO, herein
referred to as the Unions.
The parties stipulated that a "substantial" number of AGC's members, Employer
Respondents herein, during the past year in the course and conduct of their business
operations, individually purchased and received goods and materials valued in excess
of $50,000 directly or indirectly from States outside the State of Georgia.
Assuming any one or more of the above Contractor Employers did not do suffi-
cient interstate business to meet the requirements established by the Board as a
criterion for its assertion of jurisdiction, such members did participate in an asso-
ciationwide group of employers, whose volume of operations substantially affect
commerce within the meaning of the Act Such an association as the Respondent
AGC, and the Respondent participating members totality of operations in volume and
character has a substantial effect on interstate commerce so that the Board will assert
jurisdiction over the individual Respondent Employers, if any, whose interstate
business requirements do not meet the Board's jurisdictional requirements 2 It is
found, accordingly, that Respondent AGC and its employer members are engaged
in interstate commerce within the meaning of Section 2(6) and (7) of the Act,
thereby affecting interstate commerce and that the Board has jurisdiction over this
proceeding.
H. THE LABOR ORGANIZATIONS INVOLVED
Plumbers and Steamfitters Union, Local No. 72; International Brotherhood of
Electrical Workers, Local Union No. 613 ; Sheet Metal Workers' International Asso-
ciation, Local Union No. 85 , AFL-CIO, and Painters District Council No. 38, are,
and have been at all times material herein , labor organizations within the meaning
of Section 2(5) of the Act.
Introduction
In the Metropolitan Atlanta area, conditions of employment governing the con-
struction industry have been fixed since 1934 by a succession of agreements between
those contractors engaged in the building and construction business and the various
craft unions comprising the Atlanta Building Trades Council. All these agree-
ments had been for a period of 1 year except the last two which were for 2 years.
Sometime before an agreement is due to expire, Associated General Contractors,
Georgia Branch, an employer association, of which approximately 54 contractors
operating in the Atlanta area are members, through a labor committee composed of
employer-member representatives, appointed by the president of AGC,3 meet with
each of the six craft unions separately 4 with a view to negotiating the terms of a
new agreement. Although the AGC's labor committee met separately with each
union, each negotiation proceeded on the understanding that each settlement was
contingent upon a settlement with each of the other unions. The highest settlement
set the pattern for all settlements. When agreement is reached on rates of pay and
working conditions negotiated by AGC's labor committee, AGC's members, as well as
nonmember construction companies, operating in the Atlanta area, as a matter of
custom and practice, adhere to the pay rates and working conditions previously
negotiated between AGC's labor committee and these various unions.
Respondents contend, however, that neither the labor committee nor the AGC
received any authorization from its members to represent the members or bind them
in any way in these negotiations. The record shows AGC elects officers from among
its members, has a salaried executive secretary and a labor committee comprised of
its members that has negotiated contracts with the craft unions in the past. Assum-
ing arguendo, there was no explicit understanding that the agreement negotiated by
AGC's labor committee bound the individual AGC members, nevertheless, it is
uncontradicted that the AGC members not only had a unity of interest but also
2Gottfried Bakinq Company, Inc, 103 NLRB 227, enfd as modified, 210 F. 2d 772,
778 (CA. 2)
8 The executive secretary of AGC participates with the labor committee In its negotia-
tions with the unions
4 The unions are the Operating Engineers, Carpenters, Laborers, Teamsters, Bricklayers
and Masons, and Plasterers and Cement Finishers
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1435
served on AGC's labor committee to represent them at bargaining conferences with
the various unions.
Moreover, the record shows ,that the individual Respondent Contractors compris-
ing AGC, joined together since 1934 through their labor committee for the pur-
pose of negotiating terms and conditions with respect to the craft unions, and to
establish both among themselves and in their common negotiations with the unions,
a unity of action in arriving at identical terms which each member would adhere
to thereby establishing uniformity in pay rates and working conditions within the
Metropolitan Atlanta area.
Furthermore, the record manifestly reveals that the contractors, including non-
members of AGC, not only functioned as a group in following the terms and con-
ditions negotiated by the labor committee but also coordinated their endeavors in
active concert with one another and conducted themselves as if they were privy
to a multiemployer contractual relationship. In view of such conduct on their
part, a conclusion that they explicitly or implicitly authorized AGC's labor com-
mittee to represent and bind them in collective-bargaining negotiations, even though
there was no specific written authorization, would certainly seem to be warranted
and it is so found.5
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The testimony
The then current agreement under which the contractors and unions in the Met-
ropolitan Atlanta area were operating was due to expire on June 30, 1961. In
anticipation of this expiration date, AGC's labor committee and the six unions,
referred to above, began negotiations on May 12, 1961, in an effort to reach new
agreements. It is the custom in the Atlanta area for negotiations to be conducted
between the AGC's labor committee and each union separately. Each union nego-
tiates separately with AGC's labor committee and the highest increase in pay rate
percentagewise agreed to be granted to any particular craft union becomes the
area increase applicable to all the unions involved in the negotiations.6
All of the craft unions notified the AGC labor committee 80 to 100 days in
advance of the contract expiration date of June 30, 1961, that they wished to meet
with the committee in order to negotiate a new contract. AGC, in turn, notified
its members. The first of these negotiation meetings was held on May 12, 1961,
and three to five meetings were held between AGC and each of the other craft
unions individually between May 12 and June 28. Proposals and counterproposals
were made by the parties. As of June 28 tentative agreements were reached with
both the Teamsters and Plasterers and Cement Finishers subject to agreement being
reached with the other unions; the Laborers Union was waiting to see what was done
for the other unions and the Bricklayers indicated a willingness, along with the
Laborers, to work beyond the June 30 expiration date under existing rates with a
view to continuing negotiations in order to arrive at a mutually agreeable contract.
The focal point of this case is the meetings with and the failure to reach agree-
ment with the remaining two crafts, the Carpenters and Operating Engineers Unions.
The first of five collective-bargaining conferences commenced with the Operating
Engineers on May 12. Additional meetings between AGC's labor committee and
the Operating Engineers Union were held on Tune 2, 15, and 28. At the first
meeting the Union proposed a 2-year contract with an immediate increase in hourly
wage rates of 421/2 cents together with a 10-cent contribution to their pension fund.
At the next meeting on May 26 proposed modifications in the working rules were
discussed by the conferees The AGC's labor committee made a counterproposal
to the Operating Engineers Union on June 15 for a 10-cent an hour increase and
a contract for a 3-year period of time. The Operating Engineers Business Manager
Tommy Archer notified AGC's labor committee on June 22 that his members had
voted to reject this counteroffer. When Archer was asked if he had a counter-
5 Corroborative of this finding is the testimony of Bert R Oastler , vice president of the
Respondent Tri-State Contracting Company. Some of the unions insisted on a written
agreement which was signed by AGC's executive secretary and the chairman of the labor
committee . General Counsel 's Exhibits Nos. 12 and 13, which are written agreements,
were signed by officials of the Operating Engineers Union and AGC
O For example, in the 1961 negotiations the Laborers and Teamsters unions agreed that
they would not ask for any Increases in wage rates but if any of the other unions with
which AGC ' s labor committee had not yet agreed on a contract , were granted an increase,
they made it clear they would want the same increase made applicable to them as well.
1436 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proposal he stated he did not and notified the AGC's labor committee that his
union would insist on its original wage demand and proposed working rules changes.
The last meeting before the contract expired on June 30 between the Operating
Engineers and labor committee was held on June 28. At this meeting Archer, the
Operating Engineer 's business representative , made a reduced proposal of 321/2 cents
to be spread over a 2-year period : 201/2 cents anhour to be paid immediately and
an additional increase of 12 cents an hour to become effective as of July 1, 1962.
The AGC labor committee then increased their counterproposal from 10 cents to 15
cents an hour to be spread over a 3-year period of time. The offer was rejected
by Archer and in what apparently was an acerbic exchange between labor committee
members and Archer, the latter was asked if his rejection was an "ultimatum." To
this, Archer replied, "Call it what you want to. It is a fact." According to J. T.
Bourn, a member of AGC's labor committee and assistant secretary of Respondent
J. A. Jones Construction Company, Archer stated that if agreement was not
reached by June 30 there would be no operating engineers working after that date.
Bourn testified that when Archer wasasked if that was an "ultimatum" he replied:
. . We could call it what we liked. If we wanted to construe it as an ultimatum,
that is what it was; that was what it was going to be. And that was the end of
it as far as he was concerned ." Marvin Black , partner in Respondent J. J. Black
and Company , testified substantially to the same effect and R. H. Strickland, execu-
tive secretary of AGC, testified that Archer said: "We tell you now you won't have
any men on the job come Monday, July the 3d , and besides you'll have pickets on
the job." At one point in the negotiations of June 28 , Archer was asked if his
operating engineers would report at the various construction project sites the fol-
lowing Monday, July 3, and he replied in the negative , according to the Respondents'
witnesses, and stated that there would be pickets at the project sites. Archer
denied this.7
Archer when asked at the hearing if he had given such an "ultimatum" to AGC
at the June 28 bargaining meeting gave ambiguous and cryptic answers; was less
than frank in his testimony so that at times he appeared to be evasive in that he
equivocated and fenced with counsel . He finally admitted , however, that be did
tell AGC's conferees that unless a contract was signed by June 30 that none of the
operating engineers would report for work. He did admit also, that one of the
AGC's conferees asked if the above statement by him was an "ultimatium" and
he also acknowledged that he told AGC's labor committee members, "I may have
to have [the operating engineers ] off as pickets Archer, who has been
the business manager of the Operating Engineers Union for 14 years, incredibly
testified that he could not recall whether his union had ever worked between 1954
and 1961 without a contract being signed by the expiration date of June 30. It
strains credulity to believe Archer would not have remembered such important
events when it is uncontradicted that in both 1954 and 1957, the operating engineers
went on strike when agreement was not reached by June 30.8
The Respondents ' witnesses ' version as to what transpired at the June 28 meeting
is credited . Corroborative of this finding is the testimony of Royce H Fleeman,
superintendent of Pattillo Construction Company, that he spoke to Archer on
June 29 and was told that if the Union 's proposed new wage scale was not paid
after June 30 there would be no union operators to man the hoists. Archer's denial
of this conversation is not credited.
When Archer said there would be no operating engineers working after June 30,
the negotiation session concluded and forms a contributing basis for Respondent's
v Robert it . Jones, project manager for Respondent Jordan Company , testified that
Archer informed his company on June 30 that all construction sites would be picketed on
July 3 unless a contract was signed by that date Jones testified that as he knew the
other craft unions would not cross a picket line , he notified the employees on his jobs
that there would be no work on and after July 3 However, pickets from the Operating
Engineers Union did not appear at Jordan project sites until July 18 at which time con-
struction ceased until August 14 when agreement was reached with the various craft
unions The Operating Engineers Union also picketed Respondent Thompson - Street Com-
pany's project on July 78, 1961
8 In 1959 , agreement was reached between AGC and the Operating Engineers Union be-
fore June 30 However , on September 1, the operating engineers did not report for work
at various construction projects because agreement was not reached with the Atlanta
Steel Erectors , another employers ' group for whom the Operating Engineers supplies ma-
chine operators Although AGC was not involved in this dispute , the Union nevertheless,
pulled their men off the contractors ' jobs and they did not return to work until the Atlanta
Steel Erectors reached agreement with the Union 2 weeks later
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1437
contention that their projects were shut down as they believed the Operating Engi-
neers Union would strike and picket their construction jobs on Monday, July 3, 1961,
the first working day following the expiration of the then current contract.
The AGC's labor committee also had the first of five negotiation meetings with
the Carpenters Union on May 12, 1961. At this meeting the Carpenters' repre-
sentatives proposed a 45-cent an hour increase to be spread over a 2-year period of
time: an immediate increase in hourly wage rates of 20 cents over the existing rate
and an additional increase of 25 cents an hour on July 1, 1962. They also sub-
mitted a proposed revised version of the working rules. The labor committee then
presented the Carpenters with their proposed revised working rules.
The next bargaining session was held on May 24 at which time negotiations were
limited to the parties' respective versions of the revised working rules as it had been
the procedure in past years to defer wage discussions until all other contract pro-
visions had been settled. Agreement was reached at the May 24 session on some
but not all of the proposed revisions of the working rules.
Wages were discussed by the conferees for the first time at the June 16 meet-
ing at which time the AGC's labor committee made a counteroffer to the Carpenters
of a 15-cent-an-hour increase spread over a period of 3 years. The Carpenters'
representatives agreed to submit AGC's offer to its members at which point the
bargaining session concluded.
Nothing further was heard from the Carpenters until June 28 when a letter dated
June 27 was received from the union by the individual contractors conducting
business in the Metropolitan Atlanta area (both members and nonmembers of AGC)
who employed members of Carpenters Local Union No. 225, reading, in part, as
follows:
This is an official notification of the new wage scale for the jurisdictional area
of Carpenters Local Union No. 225 beginning July 1, 1961 through June 30,
1963.
The hourly wage scales set out in the above letter were the same as those originally
requested by the Carpenters Union at the first meeting of the parties on May 12.
Accompanying this June 27 letter were the union's working rules which provide in
section 7 that:
any carpenter accepting less than the regular scale of wages, or if found rebat-
ing to his employer, shall be fined not less than $25.00 and ruled off the job.
The AGC in reply to the Carpenters' letter stated as follows:
Mr. W. I. DELOACH, Business Representative,
United Brotherhood of Carpenters and Joiners of America,
Local Union No. 225,
250 Tenth St., NE.,
Atlanta, Ga.
Jvrts 28, 1961.
DEAR MR. DELOACH: This will answer your June 27, 1961 letter to the
contractor-members of this Association in which your union arbitrarily sets
forth new wages that it expects to be paid your members beginning July 1, 1961
and extending through June 30, 1963.
Since this Association has for many years been recognized as the employer
bargaining vehicle and was, in fact, in process of negotiating with what was
represented as a duly constituted committee of Carpenter Union representatives,
we are at a loss to interpret your action as anything but a severance of negotia-
tions on the part of Local Union No. 225 even though our present agreement
does not expire until June 30, 1961.
This will advise you that members of this Association will ignore your letter
of June 27, 1961, and will pay only wage scales negotiated and agreed upon
by the bargaining group representing members of the Association who use your
members.
This will further advise you that our members will not abide by any working
rules that have not been mutually agreed upon through .the aforementioned bar-
gaining procedure.
In spite of your action, this will advise that our Labor Committee is still in
session and awaits your reply.
Sincerely,
GEORGIA BRANCH, AGC,
(S) Robert H. Strickland,
ROBERT H. STRICKLAND,
Executive Secretary.
1438 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The same day that the above letter was sent, AGC's labor committee contacted
the Carpenters and arranged for a meeting between the labor committee and Union
to be held in the following day, June 29, in order to ascertain the status of their
negotiations and to determine whether the carpenters were going to strike in view
of the Carpenter Union's June 27 letter which AGC interpreted to mean that by the
Carpenters' unilateral wage action in conjunction with section 7 of the attached
working rules, supra, which forbid journeymen carpenters to work at less than the
wage scale specified in the Union's letter, supra, that there would be no carpenters
on any construction jobs after June 30 unless the wage scales set out in the Carpenters'
letter were agreed to by the contractors.
At this June 29 meeting, which lasted "several" hours, AGC stated that by the
Carpenters' letter unilaterally announcing new wage scales without continuing nego-
tiations and without the agreement of the AGC, this was interpreted by AGC to be
tantamount to a strike threat in view of section 7 of the Carpenters' working rules
which, in effect, precluded their members from working at less than the wage scale
provided for in the union's letter of June 27. The Carpenters' representatives agreed
with AGC's interpretation stating that the action taken by their members at a union
meeting on June 26 had been embodied in their letter of June 27. The union repre-
sentatives went on to explain to AGC that the wage scale requested by them was
not subject to further negotiations as the membership had placed a mandate on them
to accept nothing less than the wage rates specified in their letter. In other words,
testified J. L. Padgett, chairman of the AGC's labor committee, W. I. DeLoach, the
Carpenters' business representative, told them that the Carpenters would not work
after June 30 if their wage demands were not agreed to by the contractors. Padgett
testified that as there was no basis for further negotiations in view of the Carpenters'
officials stating they had no authority to accept less than their original wage demand
of May 12, the AGC's representatives urged the Carpenters' officials to have this
action of the membership rescinded in order that negotiations might continue in an
attempt to arrive at an agreement. Otherwise, testified Padgett, the union was told
that if work shut down the contractors would be faced with a "tremendous economic
hazard." AGC suggested to the union, that in order for negotiations to continue,
the carpenters local should call a special meeting of its members and that efforts be
made also to enlist the aid of the Carpenters' International Union to avert a strike
after June 30.
In reply to these two suggestions, the Carpenters' representatives stated a member-
ship meeting could not be convened until July 10 but that they would explore the
possibilities of obtaining their International's authorization to release them from the
membership mandate of not accepting less than the union's original wage demands.
It was agreed the local would contact their International and attempt to obtain its
consent to extend the current contract beyond the June 30 expiration date, pending
continuing negotiations, and to notify AGC before 10 a.m. the following day as a
meeting had been scheduled for June 30 in order for AGC to report to its members
on the status of negotiations On this understanding the June 29 meeting adjourned.
The union notified Strickland, AGC's executive secretary, the same evening that
the International's answer was inconclusive. Strickland then asked them to continue
their efforts and to notify him before the AGC's general membership meeting.
Nothing further was heard from the Carpenters Union. Strickland testified that
he also attempted at the same time to contact the International's officials but was
unsuccessful.
Inasmuch as it was clear to AGC that the Operating Engineers and Carpenters
Unions had broken off negotiations and that a strike was imminent, a meeting was
held of all contractors, including nonmembers of AGC on June 30',9 at which time
they were apprised of the critical turn of events facing the Atlanta construction
industry. At this June 30 meeting, the labor committee advised the contractors
that tentative agreements had been reached with the Teamsters and Plasterers and
Cement Masons Unions and that negotiations with the Bricklayers and Laborers
Unions were still fluid After relating to the contractors what had occurred with
respect to negotiations with the Operating Engineers and Carpenters Unions, the
committee stated that there would be no carpenters or operating engineers reporting
for work after June 30 at the various construction project sites. The contractors
discussed the situation confronting them and it was the consensus that inasmuch as
the Operating Engineers and Carpenters had broken off negotiations and would not
report for work after June 30, it would not be economically feasible to continue
operating in the absence of carpenters or operating engineers due to continued
construction on the various projects being dependent on these two vital crafts.
s The record reveals there are approximately 20 to 25 nonmembers of AGC in the
Atlanta area who employ carpenters and operating engineers.
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1439
In order, therefore, to avoid excessive costs occasioned by attempting to operate on
a limited basis with partial crews, as the other crafts being able to perform their
part of the job efficiently and economically depended on the carpenters and operat-
ing engineers, it was voted that the various construction projects should close down
operations after June 30, 1961.
It was also pointed out by some of the contractors participating in the discussion
at this AGC meeting that in order to safeguard their cohesive multiemployer unit
as a bargaining group for all members and to prevent its possible demoralization
and perhaps ultimate destruction, in the face of an imminent strike, that they must
present a united front. Otherwise, it was stated, they might be relegated to the
untenable position of negotiating individually vis-a-vis the craft unions who were all
members of the Atlanta Building Trades Council. The following resolution was
then adopted by a majority of the approximately 60 contractors present which reads
as follows:
It is moved that all members of Associated General Contractors having jobs
in the Greater Atlanta area, or working craftsmen coming from the Atlanta
area, located outside the said area, cease all operations or use of the men from
the Atlanta area, until such time as all six crafts with whom negotiations are
now being carried on with have settled on an acceptable agreement to the
contractors.lo
Most of the Respondents notified their employees and subcontractors of the action
taken. The contractors in the Atlanta area, the names of which are listed in
Appendix A, attached hereto (except Tri-State Contracting Company), thereupon
shut down operations from July 3 to 17, 1961.11
AGC's labor committee and the Carpenters Union did not meet again until
July 11, at which time the Carpenters' representatives advised AGC that at a union
meeting the previous night the members had voted again not to accept less than
their original wage demand of $3.45 per hour.
The following day, July 12, AGC called a meeting of its members and they were
informed what had occurred at the meeting the previous day with the Carpenters
Union and the labor committee members voiced the opinion that in view of the
carpenters' refusal to return to work for less than their original wage demand, it
would appear that a long strike was in prospect. Whereupon, the members voted
to resume operations on July 17 at the old wage scale pending an attempt to get
the Carpenters to resume negotiations. On or about July 12, those contractors
who had closed down after June 30, notified all their employees and subcontractors
that operations would resume on July 17 at the old wage scale. All of the unions,
except the Operating Engineers and Carpenters, reported for work at the various
construction sites on July 17.
Meanwhile, on July 13, the Carpenters Union sent a telegram to AGC again stating
their members would not return to work for less than their original wage rate demand
of $3.45 per hour. The Operating Engineers Union also sent AGC a telegram
on July 13 in which it was stated they would not return to work until a contract
was signed.
The various contractors who testified as to why they decided to resume operations
on July 17 gave the following reasons: Information had been received by some
of them that at a meeting of the Carpenters Union on July 10, many of the Car-
penters' members had stated they wanted to return to work pending continued nego-
tiations.12 In order to encourage this incipient back-to-work movement, it was
believed, testified these contractors, that reopening the construction projects, even
with skeleton staffs, might induce or encourage the Carpenters Union to resume
negotiations or perhaps, even return to work pending negotiations being continued.
In this connection, it is noteworthy that the recording secretary of the Carpenters
11 Strickland when asked why reference was made in the resolution to "all" craft unions
testified that "the contractors felt they could not tell what they were going to have to give
some of the other unions until the settlement with the operating engineers and carpenters
had been consummated " It was purely a statement to let the contractors know that even
though there was still pending other final arrangements with some of the unions that the
final arrangements with those other unions were contingent upon this situation with tho
operating engineers and the carpenters. "° c * the past practice was that the final
settlement of the last one determined the amount of the settlement with everybody "
"Respondent Johnson, Drake and Piper, Inc., a member of AGC, had no construction
jobs in operation between July 3 and 17, 1961
"John E. Cook, project superintendent of Respondent S. S. Jacobs Company, testified
that some of their carpenters had told him they would like to return to work but union
rules prevented them from doing so.
1440 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
local sent a letter to its members on July 14, reminding their union members that
the union was continuing to demand $3.45 per hour, that this wage demand was still
in effect and warning all members that they must abide by section 7 of the union's
working rules which provides a $25 fine for any carpenter member working for less
than the union 's wage demand of $3.45 per hour.
Another compelling reason for them to reopen their projects on July 17, testified
some of the contractors , was the pressure placed on them by those individuals for
whom they were doing construction , who insisted that they resume operations as
space had been rented in their buildings and contractual commitments made to
lessees to take occupancy of their buildings on specific dates. For example, Cliff C.
Glover, vice president of Respondent Batson-Cook Company , testified that they
decided to reopen their projects on July 17 because "we were under a great deal of
pressure from our owners to get the jobs going ." Another witness , Carroll S. Brown,
vice president of Respondent Barge-Thompson , testified that the telephone company
for which they were doing construction work told them that their employees were
union members and if a picket line was established at the construction site, their
employees would not cross it. Brown testified that the telephone company notified
him "that they couldn 't have a picket line on that building.. . ." J. Doyle Butler,
vice president of Respondent Capital Construction Company, testified that a school
board brought pressure on them to complete a school building by September when
the schools were scheduled to open . C. P. Richards , secretary -treasurer of Abco
Builders , Inc., testified that they decided to reopen on July 17 because:
We had orders that threatened to replace us with people who would perform
this work . Another is that we would like , as much as we could, to answer the
pressures of the owners and architects . And we felt that we would perhaps
not lose as much money, if we were able to operate on a limited scale.
He went on to testify that it cost his company $5,000 a week to remain shut down
"and we felt that we would perhaps not lose as much money, if we were able to
operate on a limited scale" (by resuming construction on July 17 ). Richards also
testified that their carpenter foreman , a member of the Carpenters Union, continued
to work during the 2-week shutdown and was fined $50 by the union and that
several journeymen carpenters returned to work on July 17 but left after several
days when the union preferred charges against them . Another carpenter , Richards
testified , was paid the wage scale of $3.45 per hour the union was demanding, in
order to prevent him from being fined . He also testified that the Carpenters Union
picketed their project intermittently from July 17 to approximately August 14. Ira
H. Harden , president of the Ira H. Harden Company, in testifying with respect to
why he decided to reopen his construction projects on July 17, in the absence of
carpenters and operating engineers , stated: "You work, but it was expensive, and in
the end probably does no one any good to try to work without your whole crew.
It is a very expensive operation ." H. J. Pattillo , vice president of H. J . Pattillo
Company, estimated that his projects operated subsequent to July 17 at an additional
cost of $1,500 a day and that when the strike ended, and in order to meet completion
dates they were forced to work overtime because of the 2-week shutdown which
meant additional costs necessitated by overtime pay. Carpenter foremen who were
used by many of the Respondents when they resumed operations on July 17 not
only receive 25 cents to 35 cents an hour more than journeymen carpenters but also
work on a straight -time basis . Furthermore , in the absence of operating engineers
to man the machines used to hoist materials, it was necessary for the contractors to
improvise makeshift hoisting arrangements or carry materials by hand to upper
floors which added to their construction costs.13
181-T J. Pattillo, vice president of Respondent Pattillo Construction Company, testified
that his superintendent rigged up a small electric motor after July 17 to hoist materials
but the Operating Engineers Union threatened to picket the project if they did so and it
was discontinued . Pattillo ' s marble subcontractor , in order to complete his part of the
construction work, agreed to pay the wage scale demanded by the Operating Engineers
($3 88 against the old scale of $3 67% an hour ) and to guarantee the operator a week's
wages whereupon the Operating Engineers Union agreed to supply an operator for the
hoisting machine provided that only marble was hoisted to the upper floors The operator
quit the job after 3 days when cast stone ( as distinguished from marble ) was placed on
the elevatoi platform . The entire project was then closed down until August 14 when
the strike ended J. L Padgett , manager of Respondent Thompson-Street Co , testified
that the Operating Engineers Union picketed their project site from July 17 to August 10
-nosing construction to shut down completely . The Carpenters Union also picketed the
Pattillo project on July 26 when the Union , who had an observer across the street from
ASSOCIATED GENERAL CONTRACTORS , GEORGIA BRANCH 1441
The contractors testified that in order to maintain the goodwill of their clients,
they voted to reopen their projects on July 17 even though operating without the
engineers and carpenters was inefficient and entailed additional construction costs.
These inefficient and improvised methods necessitated by the absence of the strik-
ing carpenters and operating engineers resulted in considerable financial loss to
various of the Respondent contractors . 14 Another factor adding to the construction
costs was a provision in many of the contracts that penalties would be assessed against
the contractor (usually $300 per day ) for not meeting the completion dates specified
in the contract except where the job was closed down because of a labor dispute.
However , such penalty provisions were applicable nevertheless , where the con-
struction job operated on a partial basis due to a labor dispute.
Not all of the contractors resumed operations on July 17, as some of them de-
cided it was not economically feasible without the carpenters and operating engineers,
while others attempted to reopen but closed down after a few days and still other
projects were nearing completion and no longer had need for carpenters or oper-
ating engineers so that they were able to complete their construction without them.
In rebuttal , the General Counsel 's witnesses (none of whom were carpenters or
operating engineers ), testified that construction could have proceeded after the
June 30 strike in the absence of carpenters and operating engineers . However,
these rebuttal witnesses ' testimony was limited to the projects on which they were
employed, namely : Jordan Company , Abco Builders, S . S. Jacobs Company, J. A.
Jones Construction Company, Barge-Thompson Company and Batson -Cook Com-
pany, 6 of the approximately 50 Respondent construction companies . Moreover,
these journeymen workers' testimony revealed they were not qualified to deter-
mine whether construction could have proceeded after June 30 in the absence of
carpenters and operating engineers because they did not have the same overall
perspective of the problems which faced the general contractors in completing the
entire construction job. Furthermore , these rebuttal witnesses ' opinions were based
on knowledge of their own particular crafts which were plumbers , electricians, and
sheet metal workers, only 3 of the approximately 11 crafts normally employed on
a multistory building construction job.15 Some of these witnesses , namely, King,
a plumber, and Hewatt, an electrician , admitted that though they could have con-
tinued to work after June 30 , that without carpenters , construction work would have
eventually ground to a halt. The testimony also reveals that the same probably
would have occurred in the absence of operating engineers as all crafts operate as
a team in order to complete a construction job in an efficient and economical man-
ner. The construction of forms for concrete pouring and other functions performed
by the carpenters were vital to the coordinated team effort required among the va-
rious crafts and this was only accomplished after July 17 by some of the con-
tractors resorting to using their supervisors to perform this phase of the work.
This, however, proved to be inefficient , expensive , and economically infeasible as
the supervisors were not proficient and their wage scale, which was more than
journeymen, resulted in increased construction costs.
Still other rebuttal witnesses acknowledged that the only reason they were able
to proceed with their assigned tasks after they returned to work on July 17 was
because the contractors in anticipation of the Carpenters and Operating Engineers
going on strike had hoisted enough heavy materials to the upper floors and accelerated
carpenter work to such a degree that the other crafts could continue with their
work for a limited time. After that, it was necessary to improvise makeshift
hoists or carry materials by hand to the upper floors and in the case of carpentry
work to use supervisors until the strike ended on or about August 14 , 1961, when
the project site, saw a stone worker nail a loose board into place which had become loose
A few days later the Carpenters Union again threatened to picket the project site whew
a workman installing an elevator was observed sawing a board
14 George C Worsham , treasurer of Respondent Mion Construction Company , testified
that prior to the shutdown the cost of moving concrete from the ground to the upper floors
was $1 52 per cubic yard but by being compelled to resort to the improvised methods,
which were used after July 17 , the cost was increased to $5 to $6 per cubic yard. Hurst L
Winkle, a plumber , called by the General Counsel, testified on cross-examination that he
worked on the Respondent Batson-Cook project, earning $4 an hour, and that during the
time the operating engineers were on strike , the plumbers had to carry the lavatory fix-
tures by hand to the upper floors.
15 The crafts normally used in the construction industry are electricians , bricklayers,
painters, plasterers , carpenters , ironworkers , welders , plumbers , roofers, tilesetters, and
sheet metal workers.
1442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Operating Engineers and Carpenters unions and Respondents agreed on the terms
of a contract.16
B. Contentions
It is the position of the General Counsel that the shutdown in this proceeding
was illegally motivated. To substantiate this assertion, he points to the AGC's
resolution of June 30, 1961, supra as showing that the shutdown was decided upon
and utilized as an "offensive weapon" in that it contains (1) no reference to strike
threats by the unions; (2) no mention is made of unusual economic or hazardous
conditions which would result from a strike; (3) nothing is stated with respect to a
desire to protect the multiemployer association as the bargaining vehicle; and (4) the
resolution is silent as to an impasse in negotiations. Consequently, urges the Gen-
eral Counsel, the purpose of the shutdown was to force AGC's contract terms upon
the unions as no strike was threatened or imminent nor were any "special cir-
cumstances" present to justify a lockout.
Moreover, contends the General Counsel, assuming arguendo, that a threat of
strike was present and no illegal motive existed, nevertheless, a shutdown necessitated
by at being economically impracticable to continue operations was not justified under
the facts in this case because the Respondents' operational problems or economic
loss resulting therefrom were not of an "unusual" character but rather the "usual"
incidence which would flow from a shutdown.
The Respondent AGC maintains, however, that the threats of the Carpenters and
Operating Engineers Unions to cease work after June 30 and the resulting shutdown
was a "defensive lockout" in that it was a reasonable solution to the employers' fear
of monetary loss as it was economically unfeasible and impractical to operate their
various construction jobs without carpenters or operating engineers. Moreover, it
is argued, this defensive shutdown, under the circumstances herein, is an economic
sanction available to employers as a correlative to the unions' right to strike.
Furthermore, contends AGC, faced with this strike threat, all the members of the
multiemployer association had a right to close their jobs to protect the integrity of
the instrumentality through which they were bargaining.
Respondent Daniel Construction Company states that its decision to close down
was made for business reasons, namely, to guard against unusual operational hazards,
problems, and economic loss and not for any discriminatory purpose.
C. Discussion and conclusions
A lockout has been defined at common law as the cessation by the employer of
the furnishing of work to employees in an effort to obtain for the employer more
desirable terms 17 The term "lockout" has been used in more recent years to de-
note ,a temporary layoff of employees as distinguished from a discharge or severance
of the employment relationship.18
As used in the latter frame of reference there are three types of lockouts. The
first is a lockout which is designed to frustrate organizational efforts, or to under-
cut the bargaining representative or to evade the duty to bargain.19 The second
type of lockout is the bargaining lockout which occurs during bargaining negotiations
and is resorted to as an economic countermove to the union's right to strike.20 The
third kind of lockout is the so-called economic lockout whose purpose is justified
by an independent motive to minimize economic or operational losses threatened
by an imminent strike.21
le The Operating Engineers Union agreed to accept in settlement of their original hourly
wage demand of 421/._, cents, a 321/•_, cent increase spread over a period of 2 years and the
Carpenters accepted a 30 cents psi hour wage increase spread over 2 years, as against an
original demand of 45 cents
17 Betts Cadillac Olds ],no, et at, 96 NLRB 268, 282-283
11 .1tvt and Brothers Beverage Co v AT L R B . 190 F 2d 576, 583-584 (C A. 7).
1D N L R B V. Wallick and Schivalm. 198 F 2d 477 (C A. 3), enforcing 95 NLRB 1262
L R B v Somerset Classics, 193 F 2d 613 (C A 2), enforcing 90 NLRB 1676
20 Maraud Brothers Beverage Co v N L.R B , 190 F 2d 576, 582 (C A. 7), and the same
case at 204 F 2d 529, 531 (CA 7), certiorari denied 346 U.S 909; rehearing denied
346 U S. 940; and Albert Leonard et at d/b /a Davis Furniture Co. v. N L.R B., 205 F. 2d
355 (C A 9) and the same case at 197 F. 2d 435.
21 Duluth Bottling Association, et at, 48 NLRB 1335; International Shoe Company,
93 NLRB 907; Betts Cadillac Olds, Inc., 96 NLRB 2G8; Central California Chapter, The
Associated General Contractors of America , et at., 105 NLRB 767. See American Brake
Shoe Co ., 116 NLRB 820, 827, where the Board states the economic losses must be "un-
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1443
Example of economic lockouts, all of which were sanctioned by the Board, are
Duluth Bottling Association 22 where an employer in the face of a strike shut down
his plant in order to avoid the spoilage of material; International Shoe Company 23
held recurrent work stoppages, in some, but not all of the departments, justified
closing the plant because the interdependent nature of the plant's divided functions
threatened the employer with economic losses in all phases of the plant's integrated
operations; and Betts Cadillac Olds 24 where a lockout by an employer's associa-
tion of employees in an automobile service repair shop was permitted in order not
to accept further orders for repairs while the prospect of indefinite delay in comple-
tion of the repair work due to a threatened strike might result in the loss of customers.
In determining the circumstances and extent to which an employer may resort
to a lockout as a countermove to a threatened strike, what the Board said in Betts
Cadillac Olds 25 is significant:
An employer is not prohibited from taking reasonable measures, including
closing down his plant, where such measures are, under the circumstances,
necessary for the avoidance of economic loss or business disruption attendant
upon a strike. This right may, under some circumstances, embrace the cur-
tailment of operations before the precise moment the strike has occurred... .
The nature of the measures taken, the objective, the timing, the reality of the
strike threat, the nature and extent of the anticipated disruption, and the degree
of resultant restriction on the effectiveness of the concerted activity, are all
matters to be weighed in determining the reasonableness under the circumstances,
and the ultimate legality of the employer's action. . . . The application of
broad principles involving the balancing of factors whose weight, both absolutely
and relatively, will vary according to the circumstances in which they occur,
must necessarily await specific cases.26
The quotation cited above was the first instance that reference was made by the
Board to the concept that "special circumstances" may justify an employer in clos-
ing down his plant without incurring legal liability for his action. This phrase was
also used in Quaker State Oil Refinery Corporation 27 where the Board found that
no special circumstances existed by which the employer could be absolved for shutting
down his plant the day after the contract expired and at a time when both sides
were in the midst of negotiations.
The Supreme Court in Buffalo Linen Supply Company 28 recognized also that
"there are [special] circumstances in which employers may lawfully resort to the
lockout as an economic weapon." In that case the Supreme Court held that when
there existed a multiemployer bargaining unit of eight employers, and one employer
was struck, that the other employers could, in order to preserve its bargaining unit,
lock out the employees of the other employers. Although the Court did not go
so far as to hold the lockout was a corollary or the opposite of the right to strike,
it did hold that the motive of the association was to preserve the multibargaining
position. It would appear, therefore, that the Supreme Court believes that in such
a situation, the employers, as well as employees, also have rights.
Perhaps a possible approach to determining whether in any given situation "special
circumstances" will insulate from legal liability an employer who closes down his
plant, requires an evaluation and balancing of the conflicting legal rights involved
in arriving at a judgment as to which right is paramount. In the abstract, the
union has the right to strike and the employer the correlative right to protect the
economic integrity of his enterprise. Giving effect to these dual objectives is,
indeed, in lockout situations, most difficult of accomplishment in that a balancing of
the equities to determine which is paramount requires a reconciliation and preserva-
tion of the right of employees through their unions to withhold their labor on the
usual" ; that is beyond those normally incident to any strike However, in Betts Cadillac,
supra, and Packard Bell Electronics Corporation, 130 NLRB 1122, the Board did not treat
the amount of monetary loss as controlling and in Duluth Bottling, supra (which the
Board cited in American Brake Shoe), the estimated financial loss did not exceed $300
which would not appear to attain the stature of "unusual economic losses."
22 48 NLRB 1335.
23 93 NLRB 907
24 96 NLRB 268.
2e Supra, footnote 21.
28 96 NLRB at 286-287.
27121 NLRB 334, eufd 270 F 2d 40 (C.A. 3).
28 N L R B. v. Truck Drivers Union No 449 etc (Buffalo Linen Supply Co.), 353 U.S. 87.
662353-63-vol. 138-92
1444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
one hand, and to vouchsafe to employers, on the other, the right to preserve or
maintain the economic integrity of their business enterprises in the face of union
pressures.
It is clear that the Board has held in those situations where the purpose of a
lockout is to minimize economic or operational business losses threatened by an
impending strike that no legal liability attaches to the employer but if its purpose
is to oppose the employees' resort to protected activities, it is illicit.29 In other
words, the question is the area to which the lockout is referable. There is, how-
ever, an ambivalent zone of employer conduct which cannot be explained exclu-
sively in terms of this distinction. Thus, the bargaining relationship envisaged by
the Act implies that employers as well as employees may bring to bear their eco-
nomic strength within the limits appropriate to support their bargaining positions
and to resist demands made of them. Employees, for example, may enforce an
economic demand by striking-by concertedly withholding their labor in support
of their demand-a preeminent illustration of concerted activity for mutual aid or
protection safeguarded by the Act. It is obvious that the Act does not compel
the employer to accede to the economic demand; it is just as obvious that the Act
does not permit him to abridge the right to strike. The nub of the difficulty is
to determine whether what the employer does is referable to his privilege to resist
the demand or to his disability to abridge the right to strike.
In applying these principles to the facts in this case and for the reasons hereinafter
explicated, it is found that a balancing of the factors involved in this proceeding
preponderate to demonstrate that Respondents AGC and its constituent employer-
contractors were justified in closing down operations in order to minimize unusual
economic and operational losses and to protect the bargaining integrity of its as-
sociation.
One of the National Labor Relations Act's purposes is to promote collective bar-
gaining as a means to industrial peace If "the law is the last result of human
interest acting upon human experience," it would seem anomalous to find a viola-
tion of the Act where it was the Carpenters and Operating Engineers Unions that
initiated, precipitated, and consummated the strike while negotiations were still in
process, and not to accord to the employers the correlative right to resort to united
defensive measures, especially so, where the Respondents not only did nothing to
impair the bargaining process but also were faced with unusual economic losses.
Based upon the bargaining history of the parties 30 and the circumstances which
existed as of June 30, 1961, Respondents were reasonably justified in believing
a strike was imminent.31
Moreover, this multiemployer shutdown was defensive in that it was motivated
by Respondent's efforts to protect the ,individual member-employers' businesses from
unusual financial losses incident to uncoordinated construction jobs which resulted
from the carpenters and operating engineers ceasing work after June 30.
Furthermore, the facts negate ,a finding that the contractors did not bargain in good
faith or were illegally motivated or that their actions represented willful interference
with lawful employee conduct or a desire to undermine the union bargaining repre-
sentatives or to evade the duty to bargain.32 On ,the contrary, it is clear that without
the services of the carpenters and operating engineers, two vital crafts, construction
was increasingly costly, inefficient and disrupted to the extent that it could not
reasonably continue to operate in an economical and coordinated manner as car-
penters and operating engineers are required in almost every step of construction
in conjunction with the functions of the other crafts 33
29Duluth Bottling Association , International Shoe Co . Betts Cadillac Olds, Inc., Asso-
ciated General Contractors of America, supra, footnote 21.
80 The bargaining history of the parties shows that in the past the Operating Engineers
Union would not permit its members to work after June 30 without a contract
si American Brake Shoe Company v. N.L.R B, 244 F 2d 489, 493-494 (C.A. 7)
In Morand Brothers Beverage Co. v. N L R B., 190 F 2d 570 (C.A. 7), the court, at
page 582, in evaluating such a situation, presumably considered a temporary severance,
during the duration of a strike, as a commensurate measure and a lockout "a corollary
of the Union's right to strike " See Albert Leonard d/ b/a Davis Furniture Co v
N.L.R B , 205 F 2d 355, 357-358 (C.A 9), where the court appears to equate the strike
and the lockout. However, the Board has never gone so far See Davis Furniture Co,
100 NLRB 1010 at 1019 where the Board said: "We find nothing in the Act which equates
lawful strikes and lockouts "
33 An example of the difficulty encountered in planning subsequent stages of construc-
tion is the testimony of Respondent Daniels Construction Company, that as of June 30,
work was at a stage on their project where construction could not proceed economically or
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1445
Confronted with both the unions' refusal to continue negotiations which fore-
closed any possibility of agreement being reached as well as the impending strike
and the prospect of unusual operating problems and economic losses over and beyond
the losses normally attendant upon any strike, this temporary closing of operations
was justified. The record is clear that the contractors not only bargained in good
faith and desired to continue negotiations, but that they also importuned the car-
penters and operating engineers to remain on the jobs after June 30 pending con-
tinued negotiations in an effort to reach agreement. Furthermore, the Respondents
displayed no animus toward the two striking unions which, on their part, did not
observe the bargaining amenities in that unilateral action was resorted to, negotia-
tions broken off and ultimatums delivered at a time when no bargaining impasse had
yet been reached. It would seem, therefore, for the General Counsel's and the
Charging Parties' contention to prevail that Respondents closed their projects to
compel the Operating Engineers and Carpenters Unions to capitulate to Respond-
ents' contract demands would require an interpretation of the facts which are not
shared by the Trial Examiner; namely, that Respondents' shutdown after June 30
for 2 weeks was offensive and in retaliation for the Carpenters and Operating
Engineers Unions going on strike. On the contrary, by these two unions striking,
they initiated a causal chain of events which was reasonably calculated to bring
about what actually did occur; namely, a cessation of operations. Then, too, it
should be kept in mind that although a discharge in the sense of a permanent sever-
ance of employment might far exceed the necessities of defense asserted by an
employer, here the cessation of operations was a temporary severance of 2 weeks;
no effort was made to replace employees permanently, and eventually they were all
reinstated
It is found, therefore, that this 2 weeks' cessation of operations was motivated by
a desire to counteract the effects of the work stoppage initiated by the Carpenters
and Operating Engineers Unions and not by an intent to interfere with concerted
protected activity. The Respondents were bargaining in good faith, with no impasse
having been reached, when the two unions summarily and peremptorily broke off
negotiations and initiated a strike. The Respondent contractors, in self-defense, and
in order to protect themselves from unusual economic losses and to preserve their
multiemployer bargaining solidarity, resisted by temporarily closing down their
projects.
Then too, in the posture of the multiemployer situation in the case at bar, the
banning of the lockout might not only redound to the exclusive benefit of the two
unions in that it would permit each union to avail itself of not only the advantages
inherent in bargaining with an industrywide or geographically broad unit but also
grant to the union the tactical advantage of abandoning negotiations whenever it
is expedient to do so by resorting to selective strikes without according to the em-
ployers the correlative right to resort to defensive measures.
Moreover, the members of AGC, under the circumstances in this case, had a right
to close their jobs to protect their "common and joint economic interest" and the
integrity of the ,multiemployer instrumentality through which they were bargaining.34
The employers' solidarity in presenting a unified effort in the face of an impending
strike has been recognized by the Board and the United States Supreme Court which
sanctioned the right of members of a multiemployer bargaining association to shut
down in order to preserve the effectiveness of bargaining on a group basis's
The General Counsel stresses, however, that Respondents' resuming construction
on July 17 clearly shows the shutdown after Tune 30 was illegally motivated because
if it were able to resume construction on July 17, it could have continued to operate
after June 30, as the conditions which confronted Respondents on both June 30 and
July 17 were the same. This is not entirely correct as some contractors attempted
feasibly in the absence of carpenters as their services were required for the next step
which was to build forms for the pouring of concrete for the roof The record further dis-
closes that in many instances, the construction of forms for the pouring of concrete is a
prerequisite step also before the electricians, plumbers, and steamfitters can begin their
assigned tasks
84 N L R R v Spalding Avery Lumber Company, et al, 220 F 2d 073, 076 (C A 8)
15 NL.RB v Truck Drivers Union No 449 (Buffalo Linen Supply Co ), 353 US 87,
affirming 109 NLRB 447 The Board in Brown Food Store, 137 NLRB 73, held that if a
muitlemployer unit locks out their employees when one of the association's members is
struck and then they hire temporary replacements to work with supervisors to maintain
operations for the duration of the strike, that this is a violation as the employers may not
have the added advantage of operating through the use of temporarily hired help This
decision is believed to be inapposite to the instant case as the construction industry is a
sus generis situation.
1446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to reopen on July 17 but were forced to shut down after a few days and others did
not reopen at all.
Moreover, this abstract argument of the General Counsel fails to recognize that
subsequently acquired knowledge and certain practical considerations which were
not so apparent on June 30, at the outset of the 2-week shutdown, became crystal-
lized and more pressing the longer construction remained at a standstill.36 For
instance, clients, during the 2-week shutdown, became increasingly insistent that
their projects meet the contractual completion dates, information was received that
members of the Carpenters Union wanted to return to work and some of the con-
tractors began to believe that rather than remain completely shut down, perhaps
operating with partial crews might mitigate their mounting losses. In order, there-
fore, to retain their clients' goodwill and with the dual hope of not only encouraging
the two striking unions to resume negotiations but also to minimize their economic
losses, the contractors decided it would be preferable to assume the additional
burdens incidental to operating without carpenters and engineers rather than remain
completely shut down. Respondents resorting to the use of economic pressure under
such circumstances, it would seem, is permissible a s a means of attempting to get
negotiations started again. Then, too, the General Counsel' s contention that illicit
considerations motivated the cessation of construction not only has a hollow ring
but is significantly impugned by Respondents' eagerness to continue bargaining after
June 30 which is highly probative of the defensive legitimacy of the shutdown.
Furthermore, the General Counsel's case, as evidenced by the rebuttal testimony,
is premised, in part, on the legal proposition that after June 30 when the agreements
with the craft unions terminated and there was a cessation of operations, that it was
incumbent for the Respondents to continue operating as long as it was physically
possible to do so. This rationale , however, disregards Respondents ' correlative
managerial rights to determine whether in its judgment, it was economically feasible
to either shut down after June 30 or resume operations on July 17. If, after weighing
the various factors delineated above, including the insistence of various of its clients
to meet completion dates prescribed in their contracts, Respondents decided to
reopen on July 17, even though it entailed operating at increased costs, due to the
absence of carpenters and operating engineers, it is not for the trier of these facts
to conclude that this judgment of management shows the June 30 shutdown was
improperly motivated. To hold otherwise would be the same as substituting the
Trial Examiner's judgment for that of the individual contractor Respondents in
matters of business practice 37 Substituting the infallibility of hindsight for the
perilous hazards of foresight and thus penalizing Respondents for an alleged mis-
calculation in business judgment would be tantamount to an ex post facto determina-
tion. To sustain the General Counsel's theory that construction work must continue
as long as it is physically possible to do so would deny to Respondents their mana-
gerial prerogatives to the extent that financial disaster might ensue.38 "It has long
been recognized that an employer can make reasonable business decisions, unmoti-
vated by an intent to discourage union membership or protected concerted activities,
although the foreseeable effect of these decisions may be to discourage what the
Act protects." 39
In N.L.R.B. v. Dalton Brick & Tile Corporation,40 the respondent employer locked
out its employees during bargaining negotiations with a union. The court held the
lockout to be a legitimate weapon to protect an employer from economic hardship
where the employer's purpose is to enhance the acceptance of its, rather than the
union's proposed terms Moreover, stated the court, there was no evidence
that the employer failed to bargain in good faith, or attempted to subvert the union's
effectiveness as a collective-bargaining representative or that the employee was
motivated to interfere with some protected right or to discourage union membership.
Dispositive of the issues in the case at bar is the holding of the Board in The
Associated General Contractors of America, et al.41 In that case. the plumbers
union struck the construction projects of members of AGC.42 The other craft
unions continued to work but the general contractors found it increasingly difficult
See Packard Bell Electronics Corporation , 130 NLRB at p. 1125
87 See N L R B. v. The Houston Chronicle Publishing Company, 211 F. 2d 848, 854-855
(C.A 5), and NLR.B. v. Birmingham Publishing Co., 262 F. 2d 2, 9 (CA. 5).
sa Central California Chapter, The Associated General Contractors of America, et at,
105 NLRB 767, 782, 790, 791, 792.
3D Local 357 , International Brotherhood of Teamsters , etc. v. N L R B , 365 U S 667, 679
40 301 F 2d 886 (C.A. 5).
411 ootnote 21, supra.
'D Id. at 779
ASSOCIATED GENERAL CONTRACTORS, GEORGIA BRANCH 1447
to operate "without a key craft, namely, plumbers... 43 An almost identical situa-
tion [no plumbers] confronted all the general contractors. Their operations had
been or were in the process of being ground to a halt by the loss of one of the key
crafts. Each was suffering financial losses of different types due to this condition." 44
The issue in the case was the motivation of Respondent AGC and its members in
deciding to close down operations temporarily.45
The Trial Examiner in recommending dismissal of the complaint found that the
operations of the various contractors "were at a stage where it was well-nigh im-
possible to continue on any basis, let alone a sound basis, and that, assuming that
this [contractor] was able to continue a portion of its operations on an expensive
and impractical basis for a limited time, he was not in a position to do so because
he still was unable to complete the homes without the services of plumbers." 46
The Trial Examiner found that it was the plumbers going on strike which set in
action this chain of events that eventuated in the other crafts being thrown out of
work by the contractors being compelled to shut down temporarily in the absence
of the plumbers in order to avoid economic losses, construction difficulties, and
inefficient operations. He found, therefore, that this group of Respondents closed
down operations not because of antiunion considerations, but rather to avoid business
disruption and financial loss. Moreover, the Trial Examiner found "that the various
Respondents exercised sound business judgment in closing down as they did." 47 The
Trial Examiner in so finding noted that "weight must be given to the amicable rela-
tionship that existed between these various Respondents and all the labor organiza-
tions throughout the years."
The Board in affirming the Trial Examiner stated:
We believe, like the Trial Examiner, that cognizance must be taken of the
peculiar conditions which prevail in the building and construction industry, as
reflected in the record, and in particular the close interdependence and the neces-
sary operational sequence of the different craft functions inherent in commercial
construction. As we view the controversy, the struck and the nonstruck re-
spondent general contractors within the three-county area were commonly af-
fected by the plumbers' dispute and similarly situated by reason of their uniform
conviction that to accept or to tolerate the Plumbers' contract demands would
involve them in violations of the law and possible penalties resulting therefrom.
Failure to accede to the Plumbers' demands-and these contractors were resolved
not to accept-unquestionably meant the loss of their working plumbers. Con-
sequently, whether or not they were struck, the general contractors could, and
we find that they did, reasonably appreciate and anticipate that without the key
plumber craft, construction operations could not continue for long, if at all, on
an economic basis
It is significant that the general contractors in the affected area chose to wait
over 2 weeks before shutting down, in the hope that the Plumbers' dispute would
be settled. During this period of waiting, general contractors continued opera-
tions on struck projects-as long and as best they could-by improvising, depart-
ing from established construction procedures, and generally adopting uneconomi-
cal practices. This experience of the struck general contractor provided too for
those who were not struck a graphic demonstration of the operational difficulties
they would encounter without the effective work of the plumbers. In these cir-
cumstances, we fail to perceive anything objectionable in the fact that the re-
spondent general contractors and employer associations organized themselves and
acted in concert with respect to the Plumbers' dispute, as indeed they reasonably
would have done in resolving any serious problem of the industry which com-
monly affected them.48
In view of the foregoing conclusions, and upon the entire record, it is found that
the evidence warrants no finding that the Respondents committed unfair labor
practices within the meaning of Section 8(a)(1) and 8(a)(3) of the Act, and it
will, therefore, be recommended that the complaint be dismissed in its entirety 49
4s Id at 781.
44 Id at 783
45 Id at 781
46 Id at 782
47 Id at 793
48 Id at 768
49 The conventional "conclusions of law" which are customarily repeated at this point
are omitted as they will be found in the 'body of the Intermediate Report
1448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
Abco Builders, Inc.
C. A. Adair & Co.
Ansley-Aderhold Co.
Barge and Co.
Barge-Thompson, Inc.
Hency C. Beck Co.
Beers Construction Co.
Benning Construction Co.
Bickerstaff Construction Co.
J. J. Black & Co.
T. C. Brittain Co.
Capital Construction Co.
Central Construction Co.
P. D. Christian Co.
DeGive Constr. Co. Inc.
The Flagler Co.
Gann Construction Co.
Ira H. Hardin Co., Inc.
Sam N. Hodges, Jr. & Co.
Johnson, Drake & Piper, Inc.
J. A. Jones Constr. Co.
Jiroud Jones & Co. Inc
M. T. Lambert Co., Inc.
Ray M. Lee Co.
Robert L. Mathews, Gen. Constr.
Tom McCord Construction Co.
McDonough Constr Co of Ga.
Mion Construction Co., Inc.
Modernization Construction Co.
Richard Naiman & Co.
M. W. Newbanks
O'Neill-Dunham, Inc.
Pattillo Construction Co
Arthur Pew Constiuction Co, Inc.
Pinkerton & Laws Co.
Rutland Contracting Co.
Marthame Sanders & Co.
Sharpe & Weaver, Inc.
Smith & Plaster, Inc
Southeastern Construction Co.
Strother & Co
Thompson-Street Co.
Floyd D. Traver & Co.
Tri-State Contracting Co.
Van Winkle & Co.
Wesley Construction Company
Batson-Cook Co
The Jordan Company
Harrison Construction Co.
S S Jacobs Co
Rockwood Chocolate Co., Inc. and William Neville and Local 30,
30A, 30B and 30C, International Union of Operating Engineers,
AFL-CIO, Party in Interest . Case No. 2-CA-7791-10. October
4, 1962
SUPPLEMENTAL DECISION AND ORDER
On June 29, 1962, Trial Examiner Horace A. Ruckel issued his
Intermediate Report in the above-entitled proceeding, finding that the
Respondent had not engaged in the alleged unfair labor practices and
recommending that the amended complaint herein be dismissed in its
entirety, as set forth in the attached Intermediate Report. There-
after, the General Counsel filed exceptions to the Intermediate Report
and a. supporting brief.
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Intermediate Report, the exceptions and brief, and the entire record
in this case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner.
[The Board dismissed the complaint.]
138 NLRB No. 147.