Baker Industries, Inc.

National Labor Relations Board - Board Decisions

Jun 17, 1976

224 N.L.R.B. 1111 (N.L.R.B. 1976)

WELLS FARGO ALARM SERVICES 1111
Wells Fargo Alarm Services, a Division of Baker In-
dustries, Inc and Local 155, United Electrical, Ra-
dio and Machine Workers of America (U E) Case
4-CA-7496
vation of the witnesses and their demeanor,' I make the
following
FINDINGS OF FACT
June 17, 1976
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS FANNING
AND JENKINS
On March 15, 1976, Administrative Law Judge
Phil Saunders issued the attached Decision in this
proceeding Thereafter, Respondent filed exceptions
and a supporting brief, and the General Counsel filed
an answering brief
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that the Respondent, Wells Fargo Alarm
Services, a Division of Baker Industries, Inc, Phila-
delphia, Pennsylvania, its officers, agents, successors,
and assigns, shall take the action set forth in the said
recommended Order
DECISION
STATEMENT OF THE CASE
PHIL SAUNDERS, Administrative Judge Based on a charge
filed on July 11, 1975, by Local 155, United Electrical,
Radio and Machine Workers of America (U E ), herein the
Union, a complaint against Wells Fargo Alarm Services, a
Division of Baker Industries, Inc, herein called the Com-
pany or Respondent, was issued on September 29, 1975,
alleging violation of Section 8(a)(1) of the National Labor
Relations Act, as amended Respondent filed an answer to
the complaint denying it had engaged in the alleged unfair
labor practices A hearing in this proceeding was held be-
fore me, and both General Counsel and Respondent filed
briefs
Upon the entire record in this case, and from my obser-
I THE BUSINESS OF THE COMPANY
Respondent is a Delaware corporation, and is engaged
in the business of providing protective services at its Phila-
delphia, Pennsylvania, and Atlantic City, New Jersey, fa-
cilities During the past year, Respondent's gross receipts
from its services performed for customers exceeded
$500,000, and during the same period Respondent per-
formed services valued in excess of $50,000 directly from
customers located outside of Pennsylvania
The Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act
II THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2(5) of the Act
III THE UNFAIR LABOR PRACTICES
It is alleged in the complaint that in March 1975, the
Respondent withheld an across-the-board wage increase to
its employees at its Philadelphia, Pennsylvania, and its At-
lantic City, New Jersey, facilities because its production
and maintenance employees at those facilities selected the
Union as their collective-bargaining representative,2 while,
at or about the same time, Respondent granted an across-
the-board wage increase to its employees at several of its
nonunion facilities or branches
On June 26, 1974, the Union filed a petition in Case 4-
RC-11066, seeking to represent a unit of production and
maintenance employees including servicemen and instal-
lers, maintenance workers, and central office workers The
Board's Regional Director issued a Decision and Direction
of Election on August 23, 1974, finding that the production
and maintenance employees, including servicemen, instal-
lers, and central office operators was an appropriate unit
Thereafter, an election was held on September 30, 1974,
and the Union was then duly certified as the collective-
bargaining representative in the unit found appropriate
However, the Respondent refused to bargain with the
Union asserting that servicemen and central office opera-
tors were guards and could not be represented by the
Union because it admits to membership employees other
than guards The Board, in 218 NLRB 68 (1975), ordered
Respondent to bargain with the Union Respondent re-
' The facts found herein are based on the record as a whole and on my
observation of the witnesses The credibility resolutions herein have been
derived from a review of the entire testimonial record and exhibits with due
regard for the logic of probability the demeanor of the witnesses and the
teaching of N L R B v Walton Manufacturing Company & Loganville Pants
Company 369 U S 404 408 (1962) As to those witnesses testifying in con
tradiction to the findings herein their testimony had been discredited either
as having been in conflict with the testimony of credible witnesses or be
cause it was in and of itself incredible and unworthy of belief All testimony
has been reviewed and weighed in the light of the entire record
2 These production and maintenance employees at both Philadelphia and
Atlantic City are included in the same unit
224 NLRB No 159
1112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fused to comply with the Board Order and that case is now
pending before the Third Circuit Court of Appeals on a
petition for enforcement The instant case is an outgrowth
of that prior case
It appears from this record that between 1971 and 1973,
each branch of the Respondent operated independently of
division headquarters regarding the administration of wage
plans, and there was no formalized treatment of wages or
salaries during this period Upgrading of wages or salaries
was based on "what the market would bear and what the
competition was paying " However, in late 1972, the Re-
spondent initiated plans to standardize and centralize its
wage programs in all the branches, and in early 1973 an
analysis of wage scales in all branches got underway As a
result of this analysis, a 4-year and 2-1/2-year progression
scale was established for outside and inside employees, re-
spectively, at all nonunion branches, and this standardiza-
tion was completed by January 1974 Also, because Re-
spondent felt their scales were falling behind its
competitors, an adjustment was made to the top rate on
each scale, but this adjustment was made on a branch-by-
branch basis and was effective based on the last time an
adjustment was made to a particular branch s wage scales
The Philadelphia branch received that adjustment in Janu
ary 1974 This standardization policy was also implement-
ed in branches located in Atlanta, Chicago, Memphis, New
Orleans, Philadelphia, Reading, San Jose, and Washington,
DC
In December 1974, the Respondent began discussions on
the subject of an across-the-board wage increase, and it
appears that branch-by-branch basis or individual treat-
ment of branches was abandoned in the first quarter of
1975 This across-the-board increase was to be received by
all nonunion branches On the effective date of the in-
crease, mainly March 1975, hourly employees were to re-
ceive a 9-percent salary increase, a 9-percent increase in
the progression scales, and employees would also receive a
longevity adjustment and standardization of the accident
and sickness insurance 3 As pointed out, it was decided
that these improvements would not apply to Philadelphia
because Respondent considered "it a unionized branch
and not subject to the improvements" and there would be
no improvements for unit employees because of the re-
striction that was imposed on us because of the Petition '
By letter dated May 9, 1975, the Respondent informed
supervisory personnel that the Company was prohibited
from improving or changing wages and benefits in the Phil-
adelphia and Atlantic City offices, and upon questioning
supervisors could inform employees that improvements
could not be made because of matters pending before the
Board However, by letter dated June 10, 1975, the Union
informed the Company that it would not bring charges
against the Company if these across-the-board wage in-
creases and other benefits were applied
3 Respondents vice president of operations Michael Novak testified that
since approximately one third of the branches were already under collec
tive bargaining agreements it was not appropriate in the judgment of man
agement to consider them for this across the board increase The General
Counsel does not dispute that all employees continued to receive increases
according to their progression scales but for the unionized employees in
the unit involved herein without the 9 percent adjustments
It appears from the record that while the 9 percent
across the-board increases, and other benefits related
thereto, became effective at eight of the nonunion branches
on March 1, 1975,4 the unit employees involved herein,
who received no increases, did not become fully active in
opposition thereto until the company letter of March 9,
1975, was circulated, as aforestated But after seeing this
letter and discussions that followed, a meeting with Vice
President Novak was then requested, and in June 1975, the
meeting was held Employees in attendance at this meeting
asked Novak why they were not getting the across the-
board increases , and Novak replied that his hands were
tied and nothing could be done
In October 1975, the unit employees signed a petition
which requested Respondent to explain why they were not
given a wage increase This petition was then presented to
Respondent President Frank Cole on October 10, 1975,
and Cole informed the employees he would get back to
them regarding this request However, shortly afterwards, a
walkout began, but during the course of the walkout anoth-
er meeting was held with management, and at this time
employees drew up a set of proposals which were present
ed Cole then told the employees his hands were tied and
there was nothing he could do The unit employees re-
turned to their work a couple of weeks later without receiv-
ing any wage increases
The single issue in this case is whether Respondent vio-
lated the Act by withholding a 9-percent across-the-board
wage increase to employees at Philadelphia and Atlantic
City because they selected the Union as their collective-
bargaining representative while granting said increase to
employees in other nonunion branches
The Respondent argues that the March 1975, across-the-
board increase was without precedent and was not a tradi-
tional prescheduled increase under the Respondent's prior
wage practices but was "totally different", that the Re-
spondent had no duty to place into effect at Philadelphia
and Atlantic City the across-the board increase, and it
would have been an unfair labor practice for the Company
to have done so, and that the Respondent properly chose
not to implement the 9-percent increase in order to pre-
serve the Respondent's bargaining position and flexibility
if the Company's challenge to the appropriateness of the
unit is rejected by the Court of Appeals The Respondent
further points out and argues that the March 1975 increase
was for all nonunion branches, on a common date (except
two branches), a percentage, and across-the-board, not just
at the top of the rate, and, thus, the Respondent did not
withhold a prescheduled wage increase in violation of the
Act, and that there is no evidence that Respondent has
treated the Philadelphia branch differently from other
union branches where an election has been won by the
Union or where the Union was recognized In its conclu
sion the Respondent argues that the obvious reason why
only the 8(a)(1) violation is charged in the instant case is an
attempt to render illusory the Respondent's legal right to
obtain judicial review of the Board's representation deci-
sion
4 The same increase at another nonunion branch became effective on July
1 1975 and at one other nonunion branch on October 1 1975
WELLS FARGO ALARM SERVICES 1113
Final Conclusions
It is well settled that withholding employees' wage in-
creases because of their union activities which otherwise
would have been granted, and so advising them, is a viola
tion of the Act The applicable test with respect to both
granting and withholding wage increases under such cir-
cumstances is whether or not they would have been grant-
ed in the normal course of events absent any union activi-
ties In other words, if a wage increase would have been
granted for sound economic reasons in the normal course
of events, it should be granted in spite of intervening union
activities, and, advising employees that it is being withheld
because of such activities, patently discourages their union
activities and interferes with, restrains, and coerces them in
the exercise of the rights guaranteed by the Act On the
other hand, if a wage increase would not have been granted
for sound economic reasons in the normal course of events,
its granting after the commencement of union organiza-
tional activities and/or after the filing of a petition for an
election, for the purpose of inducing the employees to vote
against the Union and favor their benefactor, likewise in-
terferes with their guaranteed rights As the Board has ob-
served in Dorn's Transportation Co, Inc, 168 NLRB 457
(1967)
By withholding salary increases, which it would have
granted had there been no organizing campaign and
so advising its employees, the Respondent restrained
and coerced its employees and thereby violated Sec-
tion 8(a)(1) of the Act This is so despite the fact that
the Respondent may have believed that it could not
grant any raises because of a pending election peti-
tion
In other cases, the Board has also required that employ-
ers implement certain wage increases to employees even
when a union has been certified as their bargaining agent,
and even in situations where there are appeals pending
contesting such designations As pointed out, in Russell
Newman Manufacturing Company, Inc 167 NLRB 1112,
enfd 406 F 2d 1280 (C A 5, 1969), the employer was en-
gaged in the manufacture of ladies garments at three
plants, of which two were involved in the proceeding, a
plant at Denton and a plant at Pilot Point During 1964 the
union sought to organize employees at the Denton plant
and a Board-conducted election was held on January 26,
1965 Following the employer's objection to the election,
the Regional Director, on March 5, 1975, issued a Supple-
mental Decision and certified the union as the collective-
bargaining representative of the employees at the Denton
plant, and the Board then reaffirmed a prior denial of
employer's request for review of the Regional Director's
decision overruling the objections and certifying the union
In the same Decision the Board also found that at all times
the union had been the exclusive bargaining representative
of respondent's employees in the Denton plant, and that by
refusing on and after March 5, 1965, to bargain with the
union, the respondent had violated Section 8(a)(5) of the
Act Petitions for review of that Decision were pending in
the Court of Appeals for the Fifth Circuit and the District
of Columbia Circuit at the time that the Administrative
Law Judge heard the case involving alleged violations of
Section 8(a)(1), (3), and (5) of the Act In this case the
employer granted its Pilot Point employees a 5-cent-per-
hour wage increase on or about January 18, 1966, but the
Denton employees were not granted any wage increase in
January 1966, and had received no increase since July
1963 Conversely, Pilot Point employees received three suc-
cessive 5-cent increases The Board found that under the
circumstances the denial of the increase was violative of
Section 8(a)(1) and (3) of the Act
In Howard Johnson Company, 172 NLRB 763 (1968), the
union therein, in April 1966, filed a petition for an election
in a unit in which employees Koehler and Vary worked
After a hearing the Regional Director issued a Decision
and Direction of Election in the unit sought by Petitioner,
and the union won the election and was certified on No-
vember 10, 1966 The employer then refused to bargain on
the ground that the certification was invalid, but the Board
held that respondent's refusal was a violation of Section
8(a)(1) and (5) of the Act That case was pending enforce-
ment in the appropriate court of appeals when this case
arose Based upon a wage survey, the employer in Howard
Johnson, supra, adopted a new wage program, and as a re-
sult of this program a substantial number of employees
received wage increases At the hearing the employer main-
tained there would be no change in employee Koehler's
and Vary s wages as long as the refusal-to-bargain case
remained unresolved Koehler and Vary had received no
increases since 1966 and were given no consideration for a
pay increase in September 1967 The Administrative Law
Judge found there could be no question but that Koehler
and Vary would have gotten the raises if their cases had
been reviewed on the merits when respondent reviewed
other employees in September and December 1967 The
Administrative Law Judge, affirmed by the Board, found a
violation of Section 8(a)(1) and (3) of the Act for the
employer's refusal to consider adjustment in Koehler's and
Vary's wages and its failure to include them in the Septem-
ber and December 1967, wage programs
In the instant case, as further pointed out, the Respon-
dent readily admits to withholding the across-the-board in
crease to Philadelphia and Atlantic City unit employees
while granting it to its employees at the nonunionized
branches, and also readily admits that Philadelphia and
Atlantic City would have received the benefits but for the
pendency of these and other related proceedings More-
over, Respondent admittedly even stopped the wage review
of Philadelphia and Atlantic City because of the filing of
the representation petition
In closing arguments the General Counsel submits the
final summary as follows "Clearly, Philadelphia and At-
lantic City employees would have received the 9 percent
increase had the Union not been solicited as the collective-
bargaining representative Employees have not received
wage increases, if they have reached the top rate, since
January 1974 Unless an employer chooses to do so pur-
suant to a valid union contract, he is not required to mod-
ify his lawful employment practices or to change his legiti-
mate method of doing business because of the entrance of
a union into the picture That an employer may be faced
with unfair labor practices because of normal action taken
1114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by him during the course of a union campaign or during
the pendency of an election is always a possibility The
possibility of being subjected to unfounded litigation is not
a ground for exemption from one's statutory obligations or
for infringement of the statutory rights of others " See GAF
Corporation, 196 NLRB 538, 543-544 (1972), and Otis Hos-
pital, 222 NLRB 402 (1976)
Respondent's refusal to consider the Philadelphia and
Atlantic City unit employees in its across-the-board wage
increases, but which resulted in increases for employees in
the Respondent's nonunionized branches, is a clear viola-
tion of Section 8(a)(1) of the Act There is some argument
and controversy in this record bearing on whether or not
the activities on behalf of the Union were started before or
after the Respondent's decisions and plans were made re-
lating to the across-the-board increases It is clear that in
late 1972 the Respondent adopted its initial plans to stan-
dardize its wage programs in all branches, and in 1973 an
analysis of wage scales in all branches was undertaken,
but the actual discussions by the Respondent on whether
to grant the 9-percent increases involved herein were not
brought up until December 1974, and, of course, by this
time the election had been held and the Union certified,
and from this it might be argued there could be no possible
way to influence the organizational efforts by granting the
increases However, it appears to me that regardless of
these events and the probable overlapping of one with an-
other, the real crux of this matter is the evidence and ad-
mission that the unit employees here involved were denied
the across-the-board increases because of the "petition"
and, more basically, because these employees were union-
ized The evidence in this record is clear that beforehand
the Respondent had adopted some plans in standardiza-
tion of its wages for all branches, but, in the final analysis,
during the period involved herein, the question of who
would and who would not receive the 9 percent increase
came down to the consideration of whether or not the em-
ployees or branches were union or nonunion Had these
employees refrained from union activities they then would
have received the increase Most assuredly, such conduct
sought to compel or induce these unit employees to aban-
don their selection of the Union as their collective-bargain-
ing agent
IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of the Respondent set forth in section III,
above, occurring in connection with the operation of Re
spondent Company described in section I, above, have a
close, intimate, and substantial relationship to trade, traf-
fic, and commerce among the several States and tend to
lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce
and-desist order is warranted in view of Respondent's dis
criminatory conduct and other violations
It is also recommended that Respondent adjust and in-
crease the wage rates of the unit employees in Philadelphia
and Atlantic City, with interest at 6 percent , to the date the
across-the-board increases are made currently operative,
and all in conformity to the wage rates and other benefits
they would have received had these unit employees been
granted the 9-percent salary-progression scales-and in-
surance and longevity increases or adjustments , at the time
and manner when such increases and benefits were given
to the Respondents eight nonunion branches in March
1975
CONCLUSIONS OF LAW
1 The Respondent is engaged in commerce within the
meaning of Section 2 (6) and (7) of the Act
2 The Union is a labor organization within the meaning
of Section 2(5) of the Act
3 By failing to grant , or withholding the 9 percent
across-the -board wage increase to the unit employees in
Philadelphia and Atlantic City, while granting such in-
creases to the employees at nonunion branches after unit
employees involved herein had selected the Union as their
bargaining agent, Respondent interfered with those em
ployees in the exercise of their rights guaranteed in Section
7 of the Act in violation of Section 8(a)(1) thereof
4 The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act
Upon the basis of the foregoing findings of fact, conclu-
sions of law , and the entire record, and pursuant to Section
10(c) of the Act , I hereby issue the following recommend
ed
ORDERS
Respondent Wells Fargo Alarm Services, a Division of
Baker Industries, Inc, Philadelphia, Pennsylvania, its offi-
cers, agents, successors, and assigns, shall
1 Cease and desist from
(a) Refusing to grant and withholding the 9-percent
wage increases to unit employees in Philadelphia and At-
lantic City
(b) In any other manner interfering with the exercise by
employees of the rights guaranteed to them under Section 7
of the National Labor Relations Act
2 Take the following affirmative action to effectuate the
policies of the Act
(a) Forthwith adjust and pay the wage rate of the em-
ployees in the unit involved herein, by conforming such
rates to those nonunion employees granted the 9-percent
wage increases, and all in the manner set forth in the sec-
tion of this Decision entitled "The Remedy "
V THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease and
desist therefrom and take certain affirmative action de-
signed to effectuate the policies of the Act A broad cease-
s In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board the findings
conclusions and recommended Order herein shall as provided in Sec
102 48 of the Rules and Regulations be adopted by the Board and become
its findings conclusions and Order and all objections thereto shall be
deemed waived for all purposes
WELLS FARGO ALARM SERVICES
(b) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records neces-
sary to analyze the amount of backpay due under the terms
of this recommended Order
(c) Post at its place of business copies of the attached
notice marked `Appendix 6 Copies of said notice, on
forms provided by the Regional Director of Region 4, after
being duly signed by Respondent's representative, shall be
posted by Respondent immediately upon receipt thereof,
and be maintained by it for 60 consecutive days thereafter,
in conspicuous places, including all places where notices to
employees are customarily posted Reasonable steps shall
be taken by Respondent to insure that said notices are not
altered, defaced, or covered by any other material
(d) Notify the Regional Director of Region 4, in writing,
within 20 days from the date of this Order, what steps have
been taken to comply herewith
6 In the event that the Boards Order is enforced by a Judgment of a
United States Court of Appeals the words in the notice reading Posted by
Order of the National Labor Relations Board shall read Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board
APPENDIX
1115
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing in which all parties were represented and
presented evidence in support of their respective positions,
it has been found that we have violated the National Labor
Relations Act in certain respects and we have been ordered
to post this notice and to carry out its terms
WE WILL adjust and pay the wage rate to the unit
employees in Philadelphia and Atlantic City, by con-
forming such rates and salary to those nonunion em-
ployees granted the 9-percent increases and benefits in
March 1975
WE WILL NOT in any other manner interfere with our
employees' exercise of rights guaranteed to them by
Section 7 of the National Labor Relations Act
WELLS FARGO ALARM SERVICES, A DIVISION OF
BAKER INDUSTRIES, INC