Bacardi Corp.

National Labor Relations Board - Board Decisions

Sep 30, 1987

286 N.L.R.B. 422 (N.L.R.B. 1987)

422 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Bacardi Corporation and Congreso de Uniones In-
dustriales de Puerto Rico . Case 24-CA-4818
30 September 1987
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
Upon a charge filed 1 July 1983 and amended 17
August 1983 by Congreso de Uniones Industriales
de Puerto Rico, the General Counsel of the Na-
tional Labor Relations Board issued a complaint on
12 August 1983 and an amended complaint on 28
June 1984 against the Respondent, Bacardi Corpo-
ration, alleging that it had violated Section 8(a)(5)
and (1) of the National Labor Relations Act.
Copies of the complaint, amended complaint, and
notice of hearing were served on the Respondent,
which filed timely answers denying the commission
of any unfair labor practices.
On 4 February 1985 the parties and the General
Counsel moved the Board to transfer the instant
proceeding to the Board without benefit of a hear-
ing before an administrative law judge, and they
submitted a proposed record consisting of the
formal papers and the parties' stipulation of facts
with attached exhibits. On 10 May 1985 the Board
issued an order granting the motion, approving the
stipulation, and transferring the proceeding to the
Board. The General Counsel and the Respondent
filed briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
On the entire record in this case, the Board
makes the following findings.
I. JURISDICTION
The Respondent is a Delaware corporation with
its principal office and place of business and plant
at Catano, Puerto Rico, where it is engaged in the
manufacture, sale, and distribution of rum and re-
lated products. The Respondent, in the course and
conduct of its business operations, annually manu-
factures, sells, and distributes at its plant products
valued in excess of $50,000 of which products
valued in excess of $50,000 were shipped from the
plant in interstate commerce directly to points and
places located outside the Commonwealth of
Puerto Rico. Accordingly, we find that the Re-
spondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the
Act and that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. THE UNFAIR LABOR PRACTICES
A. Issue
The issue presented is whether the Respondent
violated Section 8(a)(5) and (1) of the Act by refus-
ing to arbitrate grievances after the expiration of
the parties ' collective-bargaining agreement.
B. Facts
The Union was certified as representative of an
appropriate unit of the Respondent's employees on
10 October 1979. The parties thereafter executed a
collective-bargaining agreement that contained
grievance-arbitration provisions and was effective
from 1 June 1980 through 31 May 1983. The Union
informed the Respondent on 11 April 1983 of its
intent to seek modification in the contract and to
negotiate a new one. On 31 May 1983 the Re-
spondent notified the Union of the termination of
the collective-bargaining agreement as of that date
and also that dues checkoff would be discontinued.
No extension of the contract was agreed to after
the expiration date. On 16 January 1984 the Union
began a strike that lasted until 6 September 1984.
The parties signed a new collective-bargaining
agreement on 6 September 1984, effective from
that date until 5 September 1987.
About 13 June 1983, 31 October 1983, 13 Janu-
ary 1984, and 24 January 1984 the Union requested
that the Respondent meet to discuss and/or arbi-
trate grievances concerning, respectively, the 10
June 1983 disciplinary suspension of employee
Bello, the October 1983 refusal to reinstate employ-
ee Rodriguez, the 9 January 1984 discharge of em-
ployee Baez, and the 20 January 1984 discharge of
employee Alduen. On all four occasions the Re-
spondent refused to comply with the Union's re-
quest to arbitrate the merits of the grievances on
the ground that the expiration of the collective-bar-
gaining agreement rendered the grievance-arbitra-
tion clause ineffective.
The parties did, however, submit to arbitration
the threshold question of the arbitrability of the
Bello suspension . The Respondent indicated that by
so doing it did not intend to waive any defense, in-
cluding that of nonarbitrability. On 3 May 1984 the
arbitrator rendered an award finding that Bello's
grievance was not arbitrable solely because the col-
lective-bargaining agreement was not in effect at
the time the facts occurred.
The parties also initiated an arbitration hearing
on Rodriguez' grievance, at which time the Re-
spondent raised its claim of nonarbitrability due to
the contract's expiration. Pursuant to a motion by
the Union, the arbitrator, on 27 November 1984,
"shelved" the case while the parties pursued the ar-
286 NLRB No. 36
BACARDI CORP. 423
bitrability issue before the Board. The Union ini-
tially sought to take to arbitration the grievances of
Baez and Alduen, but proceedings were suspended
before hearing while the arbitrability issue was
before the Board in this case.
During the contractual hiatus, the parties also ar-
bitrated the grievance of employee Arce. On 17
April 1984 the arbitrator issued an award finding
that the grievance was nonarbitrable both because
the contract had expired and because the Union
and grievant had specifically waived their right to
arbitrate concerning the discipline imposed.
C. Contentions of the Parties
The General Counsel contends that the Respond-
ent violated Section 8(a)(5) and (1) of the Act by
repudiating the postcontract operation of the griev-
ance-arbitration provisions of the expired collec-
tive-bargaining agreement and refusing to submit
the disputed grievances to arbitration on their
merits.' The General Counsel argues that the arbi-
tration clause embodied in the 1980- 1983 agree-
ment was a term and condition of employment that
the Respondent could not change without bargain-
ing with the Union. Citing Nolde Bros.2 and Ameri-
can Sink Top Co.,3 the General Counsel also con-
tends that (1) the disputed grievances are arguably
grounded in the collective-bargaining agreement;
and (2) there is no express language limiting the
duration of the arbitration clause to the life of the
agreement , nor any other indication in the stipulat-
ed record that the parties intended their arbitration
duties to terminate with the collective-bargaining
agreement . Finally, the General Counsel argues
that the Respondent's refusal to waive the expira-
tion of the collective-bargaining agreement as a de-
fense to these grievances is a de facto refusal to ar-
bitrate them.
The Respondent contends that it was at all times
willing to submit the disputed grievances to arbitra-
tion and that it did so regarding the grievances of
Bello and Arce, prevailing in each instance in its
argument that the postexpiration grievances were
nonarbitrable. The Respondent further contends
that none of the disputed grievances were arbitra-
ble because the disciplinary actions and the em-
ployees' conduct that resulted in that action, oc-
curred after the expiration of the collective-bar-
gaining agreement on 31 May 1983, and none of
the employees' grievances involved rights or bene-
fits that accrued or vested during the expired con-
tract's term.
D. Discussion and Conclusions
In Indiana & Michigan Electric Co., 284 NLRB
53 (1987), the Board recently considered and clari-
fied the scope of the duty to arbitrate grievances
after the expiration of a collective-bargaining
agreement . We specifically rejected the theory pos-
ited here by the General Counsel that there was a
statutory duty to adhere to an arbitration proce-
dure independent of any contractual commitment
to do so. We further held, however, that an em-
ployer violate Section 8(a)(5) of the Act when it
engages in conduct tantamount to a wholesale re-
pudiation of a limited postexpiration contractual
duty to arbitrate, as that duty is defined in Nolde
In accord with the rationale of Indiana & Michi-
gan, we find that the General Counsel has failed to
prove a violation of Section 8(a)(5). Although the
Respondent clearly believed that it had no postex-
piration duty to arbitrate, it was willing to test this
belief with respect to any individual grievance by
submitting the question of arbitrability to an arbi-
trator. Such conduct can hardly be characterized
as a wholesale repudiation of the postexpiration ar-
bitration process, including the presumptive con-
tinuing duty to arbitrate grievances "arising under
the contract" within the meaning of Nolde and In-
diana & Michigan.4 The General Counsel essential-
ly argues that the Federal statutory policy encour-
aging arbitration of disputes precludes a party even
from asserting contract expiration as a defense
against a grievance in arbitration. On the contrary,
Nolde itself clearly established that contract expira-
tion can toll the obligation to arbitrate some or all
grievances. We view submission of this theshold
question of postexpiration arbitrability to an arbi-
trator to be entirely consistent both with the par-
ties' contractual commitment to arbitration and
with the statutory policy encouraging arbitration.
Based on the foregoing, we find that the Re-
spondent has not violated the Act. Accordingly,
we shall dismiss the complaint.
CONCLUSIONS OF LAW
1. Bacardi Corporation is engaged in commerce
within the meaning of Section 2(6) and (7) of the
Act.
2. Congreso de Uniones Industriales de Puerto
Rico is a labor organization within the meaning of
Section 2(5) of the Act.
3. Bacardi Corporation has not violated Section
8(a)(5) and (1) of the Act.
dR d th h1 espon ent ac eat t eThe General Counsel does not contend t
unlawfully concerning Arce 4 Although not dispositive here, we note that the Board in Indiana &
"2 Nolde Bros Y Bakery Workers Local 358, 430 U S 243 (1977) arisingMichigan rejected the broad interpretation of the meaning of
3 American Sink Top Co, 242 NLRB 408 (1979) under" in Nolde and American Sink & Top, supra.
424 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ORDER
The complaint is dismissed.
MEMBER JOHANSEN, concurring.
I agree, for the following reasons, that Respond-
ent did not violate Section 8(a)(5) of the Act by its
actions concerning grievances filed after the expira-
tion of the parties' collective-bargaining agreement.
At issue here is the Respondent's alleged refusal
to arbitrate four grievances filed during a contrac-
tual hiatus extending from 31 May 1983 to 6 Sep-
tember 1984. The Respondent took the position
that it need not arbitrate the four grievances be-
cause the expiration of the contract rendered the
grievance arbitration clause ineffective.
Normally, a consistent refusal to arbitrate postex-
piration grievances because of contract expiration
would, in my view, establish a wholesale repudi-
ation of the postexpiration arbitration obligation
and thus constitute a violation of Section 8(a)(5) of
the Act unless it is proved that the parties did not
intend that arbitration provision to survive contract
expiration.
All grievances here involved specific contract
rights. As I stated in my concurring and dissenting
opinion in Indiana & Michigan Electric Co., 284
NLRB 53 (1987), such grievance disputes must be
deemed as being over provisions of the expired
contract and thus be found to "arise under" the ex-
pired contracts within the meaning of Nolde Bros.
v. Bakery Workers Local 358, 430 U.S. 243 (1977).
Thus, the parties are obligated to arbitrate these
sorts of grievances.
Nonetheless, I find no violation here. The Re-
spondent's position was not, in fact, one of refusing
to arbitrate postexpiration grievances. Significantly,
the Respondent was willing to submit to an arbitra-
tor the threshold issue of the arbitrability of all dis-
puted grievances. By so doing, the Respondent met
its obligation to arbitrate. Contrary to the General
Counsel, the Respondent did not undercut its will-
ingness to arbitrate by reserving the right to argue
nonarbitrability to the arbitrator. Rather, the Re-
spondent placed the resolution of the grievances in
the proper forum-i.e., before the arbitrator.
I join my colleagues in dismissing the complaint.