B-Bar-B, Inc.

National Labor Relations Board - Board Decisions

Aug 29, 1986

281 N.L.R.B. 250 (N.L.R.B. 1986)

250 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
B-Bar-B , Inc. and Teamsters Local 783, affiliated
with the International Brotherhood of Team-
sters, Chauffeurs , Warehousemen and Helpers
of America . Case 9-CA-21278
29 August 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
On 30 August 1985 Administrative Law Judge
Russell M. King Jr. issued the attached decision.
The General Counsel and the Charging Party filed
exceptions and supporting briefs. The Respondent
filed an answering brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions, consistent with the reasoning set forth
below, and to adopt the recommended Order.
For the reasons fully set forth in Harter Equip-
ment, 280 NLRB 597 (1986), which issued after the
judge's decision, we agree with his finding that the
Respondent did not violate the Act by hiring tem-
porary replacements after it had locked out its
union-represented employees. In Harter, we held
that "as a general rule . . . an employer does not
violate Section 8(a)(3) and (1), absent specific proof
of antiunion motivation, by using temporary em-
ployees in order to engage in business operations
during an otherwise lawful lockout, including a
lockout initiated for the sole purpose of bringing
economic pressure to bear in support of a legiti-
mate bargaining position."' The General Counsel
has not proven specific antiunion motivation or any
illegality in the lockout itself. Accordingly, we
conclude that there is no basis for finding that the
Respondent's continued operation of its business
with temporary replacements during a lockout vio-
lated Section 8(a)(3) and (1).
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
1 Supra at 600 (fn omitted)
Mark G. Mehas, Esq., and Jack V. Baker, Esq., for the
General Counsel.
Dorothy M Pitt, Esq. (Greenbaum, Doll & McDonald), of
Louisville, Kentucky, and Anthony J. Vradelis, Esq.
(Smith & Schnacke), of Dayton, Ohio, for the Re-
spondent Employer.
281 NLRB No. 36
David W. Hupp, Esq. (Segal, Isenberg, Sales, Stewart &
Cutler), of Louisville, Kentucky, for the Charging
Union.
DECISION
STATEMENT OF THE CASE
RUSSELL M. KING JR., Administrative Law Judge.
This case was heard by me in Louisville, Kentucky, on
30 May 1985. The charge was filed 21 September 1984
by Teamsters Local 783, affiliated with the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America (the Union), and the complaint
was issued 11 April 1985 by the Regional Director for
Region 9 of the National Labor Relations Board (the
Board) on behalf of the Board's General Counsel.' The
complaint alleges that about 16 September 1984, B-Bar-
B, Inc . (the Company) hired temporary replacements for
its locked-out employees and continued to operate its fa-
cilities with temporary replacement employees without
valid business justifications, in violation of Section 8(a)(1)
and (3) of the National Labor Relations Act (the Act).2
The Company, in its answer, denies that it violated the
Act in any manner and defends the complaint as follows.
The Company alleges that the decision to lock out its
employees and hire temporary replacements after the ex-
piration of the parties' collective-bargaining agreement
(the contract) was motivated by legitimate, nondiscrim-
inatory business reasons, and that none of the Company's
actions were inherently destructive of any employee
rights guaranteed by the Act.
On the entire record, including my observation of the
demeanor of the witnesses, and after due consideration of
the briefs filed by the General Counsel, counsel for the
Union, and counsel for the Company, I make the follow-
ing
FINDINGS OF FACT3
1. JURISDICTION
The pleadings, admissions, and evidence in the case es-
tablish the following jurisdictional facts. The Company is
1 The term "General Counsel ," when used herein, will normally refer
to the attorneys in the case acting on behalf of the General Counsel of
the Board , through the Regional Director
2 The pertinent parts of the Act (29 U S C § 151 et seq) provide as
follows
Sec 8(a) It shall be an unfair labor practice for an employer-(1)
to interfere with , restrain , or coerce employees in the exercise of the
rights guaranteed in section 7 (3) by discrimination in regard to
hire or tenure of employment or any term or condition of employ-
ment to encourage or discourage membership in any labor organiza-
tion
Sec 7 Employees shall have the right to self-organization, to
form, join, or assist labor organizations, to bargain collectively
through representatives of their own choosing, and to engage in
other concerted activities for the purpose of collective bargaining or
other mutual aid or protection
2 The facts found herein are based on the record as a whole and on my
observation of the witnesses The credibility resolutions have been de-
rived from a review of the entire testimonial record and exhibits with due
regard for the logic of probability, the demeanor of the witnesses, and
Continued
B-BAR-B, INC.
now, and has been for all times material , an Indiana cor-
poration, with an office and place of business in New
Albany, Indiana. The Company is engaged in the manu-
facture and wholesale distribution of plastic bags used
for the packaging of fresh dairy products for institutional
use, and the rental or sale of machines to fill the plastic
bags with the dairy products . During the 12 months
prior to the issuance of the complaint , the Company, in
the course and conduct of its business operations, de-
rived revenue in excess of $50,000 directly from the sale
and shipment of its products, goods, and materials to
points outside the State of Indiana. Thus, I find, as al-
leged and admitted , that the Company is now, and has
been at all times material , an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
Also as alleged and admitted , I find that the Union is,
and has been at all times material , a labor organization
within the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Summary of Testimony and Evidence
The Company has recognized and bargained collec-
tively with the Union as the representative of its produc-
tion and maintenance employees since 1972 , and has ne-
gotiated with the Union a series of successive contracts.
According to Company Vice President Frank Russell,
the history of labor relations between the parties has
always been amicable . Union President James Weber tes-
tified that his relationship with the Company has been
friendly, but that "the [union] membership has disagreed
with me in a lot of cases." The Company previously
locked out its employees in 1981 for 7 days after the con-
tract expired and negotiations had reached impasse.4 At
that time temporary replacements were not hired and,
until the present controversy, the Union had not filed
any unfair labor practice charges against the Company.
The contract under which the parties were governed
during the time material in this case was effective from
10 September 1981 until 10 September 1984.5
On 19 July, 53 days before the contract was due to
expire, the parties began a series of four meetings to ne-
gotiate a new contract . The Union was represented by
President and Business Manager James Weber, and by
employees Carolyn Harvey and Donald Hardesty.
Present for the Company were Vice President Russell,
Attorney Tony Vradelis, Gene Ferguson, and Don
Bramer . Attorney Dorothy Pitt was also present for the
Company at the 10 September meeting . At the 19 July
session the Company agreed to retain a union-security
clause in the contract . At the second meeting on 24
the teaching of NLRB v. Walton Mfg. Co., 369 U.S. 404, 408 (1962). As
to those testifying in contradiction of the findings herein , their testimony
has been discredited either as having been in conflict with the testimony
of credible witnesses or because it was in and of itself incredible and un-
worthy of belief. All testimony and evidence , regardless of whether or
not mentioned or alluded to, has been reviewed and weighed in light of
the entire record.
4 Weber testified that during the 1981 lockout, "the company was able
to gain quite a bit of contract changes ... which our people (the union)
didn't appreciate ... thinking it was weakening us as a union."
a All dates hereafter are in 1984 unless otherwise noted.
251
August the Company proposed that the Union accept a
$1-per-hour reduction in wage rates for present employ-
ees over the first year of the contract . The Company's
economic proposal also included a restoration of 50 cents
per hour in both the second and third year of the con-
tract, and bonus money . The Union rejected the propos-
al, suggesting instead that the parties agree to extend the
(then) current contract so that negotiations could contin-
ue beyond the contract's expiration date on 10 Septem-
ber. Although Weber indicated that the employees
would be willing to work past the expiration date, Com-
pany Vice President Russell testified that the Union's
offer was conditioned on giving retroactivity to the
terms of the new contract . The parties next met on 7
September, and at the Union's request the Company pre-
sented its best and final offer. According to the Compa-
ny its final economic proposal was "equivalent of an 8.3¢
increase per year." The offer provided for a 50-cent-per-
hour reduction in the base wage rate, down from $1, and
the restoration of 25 cents per hour in both the second
and third years . Further, the offer provided that the
Company assume a greater portion of the employees' de-
pendent medical insurance premiums , and for an increase
in pension benefits in the "fourth and fifth years" of the
contract , although the term of the contemplated contract
was to be 3 years . 6 On 8 September the Union held a
ratification meeting where the union members voted by
39 to 10 to reject the Company's offer . By the terms of
the Union's constitution, the rejection vote also gave the
bargaining committee authority to continue negotiations
and the right to call a strike . Weber testified that the
Union preferred a lockout over a strike which could lead
to the permanent replacement of unit employees.
On 10 September at the fourth bargaining session the
Union was again presented with the Company's final
offer. The Union's proposal for a 1-year contract was re-
jected by the Company . In a meeting that evening the
union members voted a second time to reject the Compa-
ny's offer . On learning that its final offer had been reject-
ed, and assuming that an impasse had been reached, the
Company shut down its plant and locked out the em-
ployees scheduled to begin the midnight shift . Russell
testifed that the Company locked out its employees in
order to put economic pressure on the Union to agree to
the Company's bargaining position. Russell also indicated
a concern that employees working without a contract
might sabotage equipment . The Company resumed oper-
ations on the following day, 11 September, with the in-
tention of filling customer orders through the use of
management and supervisory personnel . However, the
Company was unable to keep up with incoming orders
from its customers, and on 13 September it commenced
hiring temporary replacement employees. Orders were
somewhat unusually high for that time of year . Although
the Company is one of only four manufacturers in the
country providing the product, it controls 40 percent of
the market . The Company 's customers are dairy plants
and institutional users of dairy products, who in turn
a According to the Company 's counsel , "fourth and fifth years" re-
ferred to the first and second years of any subsequent contract the parties
might negotiate.
252 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
provide milk to their customers (end users) such as fast
food restaurants . The plastic bags manufactured by the
Company are designed to fit only the dispensing (filling)
machines sold or leased by the Company.? According to
the Company , failure to ship orders on time would cause
the dairy products of its customers to spoil and cause the
end user to find another supplier, resulting in a "chain
reaction of lost business." Thus, according to Russell, the
Company was compelled to hire approximately 31 tem-
porary employees during the lockout. Although the
Company operated all production lines, it never reached
more than 75 percent of operating capacity. The replace-
ment employees were advised orally and signed a state-
ment to the effect that they understood they were em-
ployed on a temporary basis only. The Union was also
notified of this fact. During the lockout, the union em-
ployees picketed the Company's plant.
Negotiations resumed on 24 September after a Federal
mediator called for a meeting. On 26 October the Com-
pany mailed letters to Weber and to the locked out em-
ployees informing them that the lockout would end on
29 October despite a continuing impasse , and also indi-
cating that the Company would implement its best and
final offer.8 On 29 October all temporary employees
were terminated and all unit employees returned to
work. Also, apparently a new agreement was reached
sometime on 28 or 29 October. Under the terms of the
new agreement the actual wage rate was not raised from
the last contract.9 However, according to Company
Vice President Russell, the contract did provide bonuses
during the second and third year equivalent to a wage
increase of 12 . 5 cents per hour . During the period of the
lockout the Company did not attempt to persuade em-
ployees to leave the Union and no unit employees re-
signed from the Union.
B. Analysis of Law and Evidence and Initial
Conclusions
After a bargaining impasse has been reached, an em-
ployer does not violate Section 8(a)(1) and (3) of the Act
by locking out its employees for the sole purpose of
bringing economic pressure to bear in support of his le-
gitimate bargaining position , and not to discourage union
membership or otherwise discriminate against union
members. American Ship Building Co. v. NLRB, 380 U.S.
300 (1965). However, the case at hand can not end here
because the Company hired temporary replacements
during the lockout. The last complete treatment of the
subject by the Board is found in Inter-Collegiate Press,
199 NLRB 177 (1972), affd. 486 F.2d 837 (8th Cir. 1973).
Here, a majority of the five-member Board found no vio-
lation of Section 8(a)(1) and (3) of the Act when tempo-
rary replacements were used. Members Kennedy and
7 The filling machines are manufactured for the Company by another
concern Modification of the filling machines in order to use a competi-
tor's plastic bag takes between 60 and 90 days and is expensive, an alter-
native unfeasible to dairy production plants.
a The letter to the employees advised them that the Company valued
their service as loyal employees and regretted that agreement had not
been reached.
9 The effective dates of the current contract are 26 October 1984 to 25
October 1987
Penello cited their reasons as stated in Ottawa Silica
Co., t 0 that absent antiunion motivation, an employer
does not violate the Act by hiring temporary replace-
ments during an otherwise lawful lockout, citing Ameri-
can Ship Building , supra, and Brown Food Stores, 380 U.S.
278 (1965). In Brown , decided the same day as American
Ship Building, the Supreme Court held that the use of
temporary replacements under the circumstances of the
case did not imply hostile motivations any more than the
lockout itself. In Inter-Collegiate Press, then Chairman
Miller wrote a separate concurring opinion , indicating
that he felt the issue was not unequivocal , and that in his
opinion Brown required the use of a balancing test weigh-
ing the impact of such employer conduct on possible dis-
couragement of union membership against the impor-
tance and legitimacy of the objective of the employer.
Members Fanning and Jenkins dissented in Inter-Collegi-
ate Press, citing Inland Trucking Co." and Ottawa Silica,
which held that the Brown case did not apply to the
normal lockout case because of a factual difference.
Brown concerned a possible "whipsaw" strike where em-
ployers in a multiemployer bargaining group locked out
their employees and hired temporary employees in re-
sponse to a strike by the union of one of the employer-
members of the group. In Inland Trucking, a three-
member panel of the Board (then Chairman McCulloch
and Members Fanning and Brown ) fashioned their own
balancing test involving the employer 's legitimate bar-
gaining position , the amount of harm resulting to em-
ployees from the lockout and use of temporary replace-
ments, and whether the lockout was motivated by an-
tiunion considerations or intended to discourage the exer-
cise of protected rights. In Ottawa Silica, the full five-
member Board (then Chairman Miller and Members Fan-
ning , Jenkins , Kennedy, and Penello) participated. Mem-
bers Kennedy and Penello applied their concept of
Brown and found no violation of the Act because the evi-
dence did not warrant a conclusion that the employer
was motivated by antiunion considerations or that the
employer intended to discourage the exercise of employ-
ee rights. Chairman Miller concurred in the result be-
cause the employer used its own nonunit personnel, the
union had refused to provide any assurance of continued
operations , and there was some evidence of a good-faith
business justification for the employer's actions. Members
Fanning and Jenkins dissented in the result and would
have found a violation of the Act based on Inland Truck-
ing.
The General Counsel urges that Chairman Miller's in-
terpretation of Brown, as set forth in his concurring opin-
ion in Inter-Collegiate Press, should be controlling in this
case. The Union argues in the main that Brown requires
that a "substantial business justification" test be used for
determining the issue. The Company , in effect, argues
that the Kennedy and Penello analysis of Brown should
10 197 NLRB 449 (1972), enfd 482 F 2d 945 (6th Cir. 1973), cert
denied 415 U S 916 (1974)
11 179 NLRB 350 (1969), enfd 440 F2d 562 (7th Cir. 1971), cert
denied 404 U S 858 (1971)
B-BAR-B, INC.
be applied . 12 Of course, all the parties contend that
under their applications of the law in this case, they
should prevail.
The following quotations from Brown are of signifi-
cance in this case:
In the circumstance of this case , we do not see
how the continued operations of respondents and
their use of temporary replacements imply hostile
motivation any more than the lockout itself; nor
how they are inherently more destructive of em-
ployee rights . [380 U. S. at 284.]
Nor are we persuaded by the Board's argument
that justification for the inference of hostile motiva-
tion appears in the respondents' use of temporary
employees rather than some of the regular employ-
ees. [380 U .S. at 285.]
Certainly then , in the absence of evidentiary find-
ings of hostile motive , there is no support for the
conclusion that respondents violated Sec . 8(a)(1).
[380 U. S. at 286.]
The discriminatory act is not by itself unlawful
unless intended to prejudice the employees ' position
because of their membership in the union ; some ele-
ment of antiunion animus is necessary. [380 U.S. at
286.]
We recognize that , analogous to the determina-
tion of unfair practices under Sec. 8(a)(1), when an
employer practice is inherently destructive of em-
ployee rights and is not justified by the service of
important business ends, no specific evidence of
intent to discourage union mebership is necessary to
establish a violation of Sec . 8(a)(3). [380 U.S. at
287.]
But where , as here, the tendency to discourage
union membership is comparatively slight , and the
employer's conduct is reasonably adapted to
achieve legitimate business ends or to deal with
business exigencies , we enter into an area where the
improper motivation of the employer must be estab-
lished by independent evidence . [380 U .S. at 287,
288.]
We agree with the Court of Appeals that re-
spondents' conduct here clearly fits into the latter
category , where actual subjective intent is determi-
native, and where the Board must find from evi-
dence independent of the mere conduct involved
that the conduct was primarily motivated by an an-
tiunion animus . While the use of temporary non-
union personnel in preference to the locked-out
union members is discriminatory , we think that any
resulting tendency to discourage union membership
18 The Company also relies on Pankratz Forest Industries, 269 NLRB
33 (1984). As the General Counsel points out in his brief, that case does
not apply here as the case concerns the hiring of permanent replacements
for antmmon considerations . However , the Board also noted in the case
that it is not a violation of Sec. 8 (a)(3) and (1) of the Act, per se, for an
employer to lockout employees and to continue to operating with tempo-
rary replacements , citing Brown and Ottawa Silica.
253
is comparatively remote , and that this use of tempo-
rary personnel constitutes a measure reasonably
adapted to the effectuation of a legitimate business
end. [380 U.S. at 288.]
When the resulting harm to employee rights is
thus comparatively slight , and a substantial and le-
gitimate business end is served , the employer's con-
duct is prima facie lawful . Under these circum-
stances the finding of an unfair labor practice under
Sec. 8(a)(3) requires a showing of improper subjec-
tive intent. [380 U. S. at 289.]
Former Chairman Miller's rationale or understanding of
Brown, as stated in Inter Collegiate Press, is as follows:
If I understand the reasoning of the majority
opinion of the Supreme Court in the Brown case,
therefore, it is incumbent upon this Board in each
case involving the use of temporary replacements
during an otherwise legitimate lockout to: (1)
Weigh carefully all of the circumstances in order to
determine the extent to which the use of such re-
placements has a tendency to discourage union
membership, and (2) balance against our conclusions
in that regard the extent to which the use of such
replacements was supported by a legitimate and sig-
nificant business justification or, on the other hand,
the extent to which antiunion animus rather than
bona fide business considerations motivated the em-
ployer's decision to utilize replacements. [199
NLRB at 178.]
In any case, the teaching of Brown requires independ-
ent evidence of a hostile motive or improper subjective
intent (i.e., antiunion animus) on the part of an employer
in using temporary replacements during a lockout in
order to find a violation of Section 8(a)(1) and (3) of the
Act. Considering - the entire record, I can find no such
hostile motive or antiunion animus on the part of the
Company. Based on more than substantial record evi-
dence, I find the Company's actions in hiring temporary
replacements was justified by legitimate business ends. I
note in these regards that the Company's use of tempo-
rary replacements only brought the Company's produc-
tion up to 75-percent capacity during the lockout, and
the Company announced its intentions to end the lockout
before the actual agreement was reached. The terms of
the new agreement were considerably better than the
Company's last and final prelockout offer, which was re-
jected by the Union and brought the parties to impasse.
Finally, I note that during the lockout, which the Union
preferred over a strike, not one union member was
lost. 13
The General Counsel and the Union, in their briefs,
spend much time in pointing out that the Company failed
to pursue sufficient alternatives in order to avoid the ne-
cessity of having to use temporary replacements. In my
opinion, where an employer legally invokes the use of a
legitimate economic tool in its bargaining with a union,
13 The unit contained approximately 45 employees.
254 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
such an employer has no burden to seek alternatives in
order to deny itself the use of that tool.
Accordingly, I find and conclude that the Company,
by locking out its employees and thereafter hiring tem-
porary replacements , did not violate Section 8 (a)(1) and
(3) of the Act. I shall thus recommend that the complaint
be dismissed.
On the foregoing findings of fact and initial conclusion
of law , and on the entire record, I make the following
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The Respondent, in locking out its employees be-
tween 11 September 1984 and 28 October 1984, and
hiring temporary replacements during the period , did not
violate Section 8(axl) and (3) of the Act.
4. The Respondent has not otherwise violated the Act.
On these findings of fact and conclusions of law and
on the entire record , I issue the following recommend-
ed14
ORDER
It is ordered that the complaint be, and the same is,
dismissed.
14 If no exceptions are filed as provided by Sec 102.46 of the Board's
Rules and Regulations , the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses