Bonnell/Tredegar Industries

National Labor Relations Board - Board Decisions

Feb 28, 1994

313 N.L.R.B. 789 (N.L.R.B. 1994)

789
313 NLRB No. 133
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Consistent with its December 1990 Christmas bonus payment, the
Respondent in March 1990 distributed to employees a booklet sum-
Continued
Bonnell/Tredegar Industries, Inc. and United Steel-
workers of America, AFL–CIO–CLC. Cases
10–CA–25994 and 10–CA–26648
February 28, 1994
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND TRUESDALE
On January 8, 1993, Administrative Law Judge
Howard I. Grossman issued the attached decision in
Case 10–CA–25994. The Respondent filed exceptions
and a supporting brief, the Charging Party filed a
cross-exception and a supporting brief, the General
Counsel, the Respondent, and the Charging Party filed
answering briefs, and the Respondent filed a reply
brief. Thereafter, on June 22, 1993, the parties in Case
10–CA–26648 filed a joint stipulation and motion to
transfer and to consolidate these cases. On September
16, 1993, the Board issued an order accepting the stip-
ulation, consolidating the cases, and transferring the
proceeding to the Board. Thereafter, the General Coun-
sel and the Charging Party filed briefs and the Re-
spondent filed a reply brief.
The National Labor Relations Board has considered
the decision, the joint stipulation, and the record in
light of the exceptions, cross-exception, and briefs and
has decided to affirm the judge’s rulings, findings, and
conclusions as modified, in Case 10–CA–25994, and
to find merit to the allegations of the complaint in
Case 10–CA–26648.
For the reasons set forth below, we find that the Re-
spondent violated Section 8(a)(5) and (1) of the Act by
failing to pay employees Christmas bonuses in 1991
and 1992 in accord with its longstanding formula for
determining the amount of these bonuses, without se-
curing the Union’s consent to a new formula for cal-
culating the bonuses.
Facts
The Union has represented the Respondent’s produc-
tion and maintenance employees for at least 18 years.
The parties’ most recent bargaining agreement was ef-
fective by its terms from January 20, 1990, to January
19, 1993. For many years prior to December 1991, the
Respondent paid employees a Christmas bonus and
calculated the bonus on the basis of a formula of 1
hour’s pay for each week of the year that an employee
has worked at least 32 hours, up to a total of 40 hours.
Under this formula, each employee typically received
a Christmas bonus each year of approximately $300 to
$400. The Respondent’s obligation to pay employees a
Christmas bonus is set forth in the parties’ 1990–1993
collective-bargaining agreement, in conjunction with
the Respondent’s other fringe benefit plans, as follows:
ARTICLE XVI
INDUSTRIAL RELATIONS PLANS
All employees in the plant are entitled to such
service credit as accrued under the COMPANY’s
continuity of service rules and the COMPANY
will recognize such service for participation in the
following COMPANY Industrial Relations Plans:
1. Group Insurance Plan (Exhibit B)
2. Vacation Plan (Article XII)
3. Military Leave Plan (Article XI and Article
XV)
4. Leave of Absence Plan (Article XV)
5. Pension Plan (Exhibit C)
6. Continuity of Service Rules (Exhibit C)
7. Jury Duty Plan (Article XI)
8. Funeral Leave Plan (Article XI)
9. Christmas Bonus
10. Thanksgiving Turkey
All of these plans shall remain in full force and
effect during the term of this Agreement. How-
ever, the COMPANY may, on notice to the
UNION, make any changes in such plans as nec-
essary to keep such plans in compliance with the
regulations of the Treasury Department or other
governmental agencies so that COMPANY con-
tributions to such plans shall be proper tax deduc-
tions and shall not be considered wages for any
purpose. The COMPANY may make such
changes as may be required or desirable in the
contracts between the COMPANY and Insurance
Underwriters to make the plans conform to any
subsequent statutory enactments or judicial or ad-
ministrative interpretation of any law relating to
such plans, or changes to conform to actuarial ex-
perience from time to time, or changes of wording
for clarity of any plan
. . . .
With respect to life insurance, dependent life
insurance, accidental death and dismemberment
insurance and weekly disability coverage under
the Group Insurance Plan, the COMPANY will
continue to pay the full cost of these plans for
employee coverage and reserves the right to
change employee contributions to the extent re-
quired by reason of adjusted premium rates as-
sessed by the carrier . . . . [Emphasis added.]
In December 1990, the initial Christmas holiday pe-
riod arising under the 1990–1993 bargaining agree-
ment, the Respondent paid employees a Christmas
bonus and calculated the bonus according to the estab-
lished formula of 1 hour’s pay for each 32-hour week
worked, up to a total of 40 hours.1 On November 13,
790 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
marizing employee benefits. Item VI of the booklet provides as fol-
lows:
VI. CHRISTMAS BONUSES
Employee will receive one (1) hour’s pay for each week in
which he worked thirty-two (32) hours up to a maximum of
forty (40) hours.
2 Art. VIII, sec. l of the 1990–1993 bargaining agreement provides,
with respect to the arbitration and grievances, that:
It is further understood and agreed that the provisions of this
article shall not apply to matters affecting the change in wages
and rates of pay as set forth in Exhibit ‘‘A’’ attached hereto,
nor shall the provisions of this article apply to the administration
and contents of the COMPANY benefits plans listed in article
XVI hereof, except that specific cases affecting administration of
the benefits received under the following plans (Vacation, Leave
of Absence, Jury Duty, Funeral Leave and Military Leave) shall
be subject to the grievance and arbitration provisions of this
Agreement. It is understood and agreed that this provision will
not alter or change any part of this Agreement.
3 Manley Truck Line, 271 NLRB 679, 681 (1984), enfd. 779 F.2d
1327 (7th Cir. 1985), and cases there cited.
1991, however, the Respondent notified employees by
letter that ‘‘[t]he decision has . . . been made to re-
duce the . . . Christmas bonus this year to $100 per
employee.’’ By letter dated November 15, 1991, the
Union advised the Respondent that it ‘‘strongly
object[ed]’’ to the reduction of the Christmas bonus.
Thereafter, consistent with its November 13, 1991 an-
nouncement, the Respondent paid each eligible em-
ployee a Christmas bonus of $100 for Christmas 1991.
The Union filed a grievance over the reduced Christ-
mas bonus payment and, on January 28, 1992, the Re-
spondent denied the grievance and refused to arbitrate
the dispute.2 It is undisputed that the Respondent’s de-
cision to limit Christmas bonuses to $100 in 1991 was
undertaken unilaterally and without consultation with
the Union.
The parties have stipulated that the Respondent and
the Union negotiated to impasse over the amount of
the Christmas bonus for 1992 and that the Respondent
thereafter implemented its last offer. The parties have
also stipulated that the 1991 Christmas bonus was ap-
proximately 29 percent and the 1992 Christmas bonus
was approximately 30 percent of the Christmas bonus
paid in 1990.
The parties’ 1990–1993 bargaining agreement also
contains the following provisions:
ARTICLE XXIV
ENTIRE AGREEMENT
This Agreement constitutes the sole and entire
existing agreement between the Parties and super-
sedes all prior agreements, committments [sic],
and practices, whether oral or written, between the
COMPANY and the UNION or the COMPANY
and any of the covered employees, and expresses
all obligations of, and restrictions imposed on, the
COMPANY.
ARTICLE IV
MANAGEMENT OF PLANT
Except as abridged by a specific provision of
this Agreement, the management of the plant and
the direction of the working force including the
right to plan, direct and control plant operations;
to contract for work and services; to schedule and
assign work to employees; to determine the
means, methods, processes, materials and sched-
ules of production; to determine the products to
be manufactured, the location of its plant and the
continuance of its departments; to establish pro-
duction standards and to maintain the efficiency
of employees; to establish and require employees
to observe COMPANY rules and regulations; to
hire, terminate or relieve employees from duties;
to maintain order and to suspend, demote, dis-
cipline and discharge employees for just cause,
are rights solely vested in the COMPANY.
The foregoing enumeration of Management’s
rights shall not be deemed to exclude other rights
of Management not specifically inconsistent with
this Agreement.
Discussion
It is well settled that an employer violates Section
8(a)(5) and (1) of the Act as elucidated in Section 8(d)
of the Act, by modifying a term of a collective-bar-
gaining agreement without the consent of the other
party while the contract is in effect.3 It is undisputed
that the Respondent did not, in either 1991 or 1992,
obtain the Union’s consent to payment of Christmas
bonuses in amounts less than those that would result
from application of the long-followed workweek-based
formula. The issue is whether the formula is a term of
the agreement.
The Respondent’s obligation to pay employees a
Christmas bonus benefit is clearly mandated by the
terms of the parties’ 1990–1993 bargaining agreement.
More particularly, article XVI provides that employees
‘‘are entitled’’ to accrued service credit for a variety
of ‘‘Industrial Relations Plans,’’ including ‘‘Christmas
Bonus.’’ Article XVI also provides with respect to
‘‘All of these plans’’ that they ‘‘shall remain in full
force and effect during the term of this Agreement.’’
When the 1990–1993 bargaining agreement was ne-
gotiated, the Respondent had for many years main-
tained the Christmas bonus plan by payments to each
employee of 1 hour’s pay for each 32-hour week
worked during the year, up to a maximum of 40 hours.
That formula was the Christmas bonus plan as it ex-
isted on the negotiation of the 1990–1993 bargaining
agreement and, indeed, as it existed through the initial
791BONNELL/TREDEGAR INDUSTRIES
year of that agreement when the Respondent paid em-
ployees their Christmas bonus in 1990 using the
above-described formula. Further, when the Respond-
ent distributed a booklet to employees in March 1990
it advised them what it understood to be the Christmas
bonus plan: employees are to receive a Christmas
bonus of 1 hour’s pay for each week worked, up to a
maximum of 40 hours.
Article XVI is clear as to what the Respondent is
contractually obligated to do. It is contractually obli-
gated to maintain the Christmas bonus plan ‘‘in full
force and effect during the term of this Agreement.’’
The Respondent contends, however, that it was not ob-
ligated to pay a yearly Christmas bonus during the
term of the 1990–1993 bargaining agreement based on
a formula of 1 hour’s pay for each week worked but,
instead, was contractually privileged to pay a Christ-
mas bonus of whatever amount it desired. Under the
Respondent’s construction, both the term ‘‘plans’’ and
the phrase ‘‘remain in full force and effect during the
term of this Agreement’’ would be rendered meaning-
less, because they would add nothing to the require-
ment that a Christmas bonus be given.
We find that the plain meaning of the parties’ con-
tractual agreement that the plan ‘‘shall remain in full
force and effect during the term of this Agreement’’ is
that the plan, and all its integral parts, one of which
is the formula for calculating the Christmas bonus,
shall remain unchanged during the term of the agree-
ment. Although the formula is not specifically set forth
in article XVI, it is an implicit term of the agreement
by virtue of the reference to required maintenance of
a ‘‘plan’’ respecting the bonus. An implicit contract
term is just as significant for Section 8(d) purposes as
an express term. See Communications Workers (C &
P Telephone), 280 NLRB 78, 82 (1986); Chemical
Workers Local 29 (Morton-Norwich Products), 228
NLRB 110l (1977). Cf. E. I. du Pont & Co., 294
NLRB 563 (1989), remanded sub nom. Martinsville
Nylon Employees v. NLRB, 969 F.2d 1263 (D.C. Cir.
1992). We need only to look to the particulars of the
Christmas bonus formula that existed on the effective
date of the agreement to determine the established
‘‘plan’’ that the contract required ‘‘shall remain in full
force and effect.’’ And there is no dispute on this
record as to what that formula was at that time: 1
hour’s pay for each 32-hour week worked, up to a
maximum of 40 hours.
The Respondent points to several provisions of the
1990–1993 bargaining agreement to support its conten-
tion that contractually it retained discretion to set the
amount of the bonus. We find these contentions
unpersuasive.
First, the Respondent contends that the methods for
calculating other ‘‘non-wage benefits’’ are explicitly
set forth in the 1990–1993 agreement while the meth-
od for calculating the Christmas bonus is not explicitly
set forth in the agreement. The agreement’s lack of
specificity as to how the Christmas bonus is to be
paid, however, by no means establishes that the con-
tract reserves to the Respondent the right to set the
amount of the bonus at its discretion. It seems likely
that if the parties had intended to confer on the Re-
spondent sole discretion to set the amount of the
Christmas bonus at whatever amount the Respondent
deemed appropriate (theoretically a bonus payment of
$1 or even 1 cent), they would have said so. Instead,
the parties agreed that the Christmas bonus plan, then
averaging a payment of $300 to $400 per employee,
‘‘shall remain in full force and effect during the term
of this Agreement.’’ Moreover, article XVI on its face
provides for certain circumstances in which the Re-
spondent contractually ‘‘may make . . . changes’’ as
necessary or required. These pertain to circumstances
confined to maintaining compliance with statutory, ju-
dicial, or administrative regulations or as called for by
insurance requirements. This shows that when the par-
ties intended to confer discretion on the Respondent to
make changes in the benefit plans, they did so explic-
itly.
Second, the Respondent contends that the contrac-
tual arbitration provision expressly excludes bonus dis-
putes from arbitration but includes disputes over other
benefits. That the parties decided to exclude certain
subjects from their grievance-arbitration machinery
does not establish that the Respondent thereby contrac-
tually retained the discretion to set the amount of the
Christmas bonus. The exclusion of certain benefit pro-
visions from the grievance-arbitration procedure is
open to any number of possible inferences, including
the likelihood that the parties simply preferred to re-
solve disputes over these subjects in other forums.
Moreover, the contractual arbitration provision states
on its face that it does not alter or change any other
part of the contract, e.g., the Respondent’s obligation
to retain the Christmas bonus in full force and effect.
Third, the Respondent contends that the 1990–1993
agreement has an ‘‘entire agreement/zipper clause’’ ex-
pressly excluding past practices not expressly incor-
porated into the bargaining agreement. Article XXIV
provides that the agreement is the ‘‘sole and entire ex-
isting agreement,’’ ‘‘supersedes all prior agreements,
committments [sic], and practices, whether oral or
written,’’ and ‘‘expresses all obligations of, and re-
strictions imposed on, the [Respondent].’’ Article
XXIV has no effect, however, on obligations, restric-
tions, agreements, commitments, and practices that are
part of the bargaining agreement, namely, the parties’
contractual agreement that the Christmas bonus plan
‘‘shall remain in full force and effect during the term
of this Agreement.’’
792 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 With respect to the parties’ bargaining history, we observe that
the Respondent’s spokesman at negotiations, B. F. Wilburn, testified
that the parties ‘‘did not actually discuss the Christmas Bonus’’ and
that the subject only arose in conversation on one occasion, when
Wilburn commented to the Union that there were times when he did
not like things such as Christmas bonuses, because ‘‘rarely did the
Company get the recognition during contract negotiations for that
type thing.’’ Further, the record shows that the contractual zipper
clause and management-rights provision in the 1990–1993 agreement
remained unchanged from previous agreements.
5 We find no merit to the Respondent’s contention that the imple-
mented Christmas bonus payment of $100 is not a material, substan-
tial, and significant change from the payments of $300 to $400 cal-
culated under the established formula of 1 hour’s pay for each week
in which an employee worked 32 to 40 hours.
6 We note that the Respondent’s unilateral alteration of the Christ-
mas bonus plan for Christmas 1991 without bargaining with the
Union would violate Sec. 8(a)(5) and (1) even if the agreement did
not contain the wording ‘‘shall remain in full force and effect during
the term of this Agreement.’’ Thus, as the judge found, it is well
settled that a bonus that has been paid consistently over a number
of years is a component of employee wages and, therefore, is a term
and condition of employment that cannot be unilaterally altered or
abolished by an employer without affording the bargaining represent-
ative an opportunity to bargain, regardless of whether payment of the
bonus is expressly provided for in a bargaining agreement. TCI of
New York, 301 NLRB 822, 824 (1991). Although the Board noted
in TCI of New York that a union’s right to bargain over a term and
condition of employment can, of course, be waived, the party assert-
ing the existence of a waiver must show that the right to bargain
has been clearly and unmistakably relinquished. Here, there is no ex-
plicit provision in the agreement that confers on the Respondent the
right to change unilaterally the customary formula establishing the
amount of a contractual entitlement, without first having to fulfill
statutory bargaining obligations. As the Supreme Court stated in
Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 708(1983):
[W]e will not infer from a general contractual provision that the
parties intended to waive a statutorily protected right unless the
undertaking is explicitly stated.
Accordingly, even if the Union’s consent to a new formula was not
required under Sec. 8(d), the Respondent would still be required to
bargain to impasse before altering an established condition of em-
ployment. This it failed to do in 1991.
Fourth, the Respondent relies on the contractual
management-rights provision (art. IV), under which the
Respondent retains all rights not specifically inconsist-
ent with the bargaining agreement. The Respondent’s
reliance on this provision is misplaced because the pro-
vision on its face states that it is inapplicable to mat-
ters covered ‘‘by a specific provision of this Agree-
ment,’’ here the commitment set forth in article XVI
that the Christmas bonus plan shall remain in full force
and effect for the contract’s duration.
Finally, the Respondent contends that the parties’
bargaining history shows that it retained discretion to
administer the Christmas bonus plan as it saw fit. It
notes that the parties entered into ‘‘letter agreements’’
or side agreements on other subjects but failed to enter
into a letter agreement limiting the Respondent’s dis-
cretion to calculate the amount of the Christmas bonus.
Again, article XVI itself limits the Respondent’s dis-
cretion to alter the Christmas plan because it provides
expressly that the plan shall remain in full force and
effect during the term of the agreement.4
In sum, we find that both the ‘‘pre-impasse’’ unilat-
eral change at Christmas 1991 and the postimpasse im-
plementation at Christmas 1992 violated Section
8(a)(5) and (1), as explained in Section 8(d). This is
so because, in both instances, the Respondent effec-
tively changed the terms of the parties’ agreement that
the Christmas bonus plan ‘‘shall remain in full force
and effect during the term of this agreement.’’5 Inas-
much as the continuation of the Christmas bonus plan
in unchanged form for the duration of the agreement
was a term of the 1990–1993 bargaining agreement, it
follows that the Christmas bonus plan was not subject
to change during the contract term other than by the
mutual agreement or with the consent of the Union.
Because there was no such agreement, and because the
Respondent failed to secure the Union’s consent, the
Respondent violated Section 8(a)(5) and (1) of the
Act.6
ORDER
The National Labor Relations Board orders that the
Respondent, Bonnell/Tredegar Industries, Inc., New-
nan, Georgia, its officers, agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Refusing to abide by the terms of the 1990–1993
collective-bargaining agreement with the Union by
failing to pay employees Christmas bonuses in 1991
and 1992 in accord with its longstanding formula of 1
hour’s pay for each week the employee has worked at
least 32 hours, up to a maximum of 40 hours.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Abide by the terms of the 1990–1993 collective-
bargaining agreement with the Union by restoring the
formula for paying employees a Christmas bonus
based on 1 hour’s pay for each week the employee has
worked at least 32 hours, up to a maximum of 40
hours, until such time as, under applicable Board law,
it no longer has an obligation to do so.
(b) Make its employees whole for the amounts by
which their 1991 and 1992 Christmas bonuses were re-
duced, in the manner set forth in the remedy section
of the judge’s decision.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay
due under the terms of this Order.
793BONNELL/TREDEGAR INDUSTRIES
7 If this 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.’’
1 The complaint was amended at the hearing to indicate the Re-
spondent’s name as set forth above.
2 Ibid.
(d) Post at its Newnan, Georgia place of business,
copies of the attached notice marked ‘‘Appendix.’’7
Copies of the notice, on forms provided by the Re-
gional Director for Region 10, after being signed by
the Respondent’s authorized representative, shall be
posted by the Respondent immediately upon receipt
and maintained for 60 consecutive days in conspicuous
places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by the Respondent to ensure that the notices are not
altered, defaced, or covered by any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these pro-
tected concerted activities.
WE WILL NOT refuse to abide by the terms of the
1990–1993 collective-bargaining agreement with the
United Steelworkers of America, AFL–CIO–CLC by
failing to pay employees’ Christmas bonuses in 1991
and 1992 in accord with our longstanding formula of
1 hour’s pay for each week an employee had worked
at least 32 hours, up to a maximum of 40 hours.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL abide by the terms of the 1990–1993 col-
lective-bargaining agreement with the Union by restor-
ing the formula for paying employees a Christmas
bonus based on 1 hour’s pay for each week an em-
ployee has worked at least 32 hours, up to a maximum
of 40 hours, until such time as, under applicable Board
law, we are no longer obligated to do so.
WE WILL make our employees whole for the
amounts by which we reduced their 1991 and 1992
Christmas bonus, with interest.
BONNELL/TREDEGAR INDUSTRIES, INC.
Richard P. Prowell, Esq., for the General Counsel.
Lyle J. Guilbeau, Esq., Chief Labor Counsel, of Richmond,
Virginia, for the Respondent.
Samuel H. Heldman, Esq. (Cooper, Mitch, Crawford,
Kuykendall & Whatley), of Birmingham, Alabama, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
HOWARD I. GROSSMAN, Administrative Law Judge. The
charge was filed on May 13, 1992, by United Steelworkers
of America, AFL–CIO–CLC (the Union). Complaint issued
on July 17, 1992, and alleges that Bonnell/Tredegar Indus-
tries, Inc.1 (Respondent or the Company),2 on or about De-
cember 13, 1991, changed the method of computation and re-
duced the amount of the annual Christmas bonus paid to its
employees, contrary to past practice and the terms of an ex-
isting collective-bargaining agreement. Such actions are al-
leged to be violative of Section 8(a)(5) and (d) of the Na-
tional Labor Relations Act.
This case was heard before me in Atlanta, Georgia, on No-
vember 6, 1992. Thereafter, the General Counsel, the Re-
spondent, and the Charging Party filed briefs. On the entire
record, including my observation of the demeanor of the wit-
nesses, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a Virginia corporation with an office an
place of business located at Newnan, Georgia, where it is en-
gaged in manufacturing aluminum extrusions. During the cal-
endar year preceding issuance of the complaint, a representa-
tive period, the Respondent sold and shipped goods valued
in excess of $50,000 from its Newnan, Georgia facilities di-
rectly to customers located outside the State of Georgia. Re-
spondent is an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICE
A. Factual Summary
The Union has represented the Respondent’s employees in
an appropriate unit at its Newnan, Georgia facility pursuant
to collective-bargaining agreements for at least 18 years. For
the same period of time, the Company has paid its employ-
ees a Christmas bonus. The method of calculation of the
794 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 The two agreements list the ‘‘Industrial Relations Plans’’ in sub-
stantially identical language. The ‘‘plans’’ are numbered from 1 to
10. Seven of them have the word ‘‘Plan’’ after the description, e.g.,
‘‘Group Insurance Plan.’’ One of them, ‘‘Continuity of Service,’’
has the word ‘‘Rules’’ after the description. Two of them ‘‘Christ-
mas Bonus’’ (No. 9) and ‘‘Thanksgiving Turkey’’ (No. 10) simply
describe the ‘‘plan.’’ R. Exh. 1, pp. 40–42 (1987 agreement); G.C.
Exh. 2, pp. 36–37 (1990 agreement).
4 R. Exh. 1, p. 51 (1987 agreement); G.C. Exh. 2, p. 46 (1990
agreement).
5 This section, in the 1987 and 1990 contracts, reads:
ARTICLE IV
MANAGEMENT OF PLANT
Except as abridged by a specific provision of this Agreement,
the management of the plant and the direction of the working
force including the right to plan, direct and control plant oper-
ations; to contract for work and services; to schedule and assign
work to employees; to determine the means, methods, processes,
materials, and schedules of production; to determine the prod-
ucts to be manufactured, the location of its plant and the con-
tinuance of its departments; to establish production standards
and to maintain the efficiency of employees; to establish and re-
quire employees to observe COMPANY rules and regulations;
to hire, terminate or relieve employees from duties; to maintain
order and to suspend, demote, discipline and discharge employ-
ees for just cause, are rights solely vested in the COMPANY.
The foregoing enumeration of Management’s rights shall not
be deemed to exclude other rights of Management not specifi-
cally set forth; the COMPANY therefore retains all rights not
specifically inconsistent with this Agreement. [R. Exh. 1, p. 2
(1987 agreement); G.C. Exh. 2, p. 2 (1990 agreement).]
6 Testimony of Johnny Long.
7 G.C. Exh. 3, p. 15.
8 Statement of company counsel and stipulation of the parties.
9 G.C. Exh. 5.
10 G.C. Exh. 4.
11 G.C. Exh. 6.
bonus was 1 hour’s pay for each week in which the em-
ployee worked at least 32 hours, up to a total of 40 hours.
The prior collective-bargaining agreement, executed in
January 1987, and the current agreement, signed in January
1990, list a ‘‘Christmas Bonus’’ as one component of an
‘‘Industrial Relations Plan,’’ and the employees were entitled
to ‘‘such service credit as accrued under the Company’s con-
tinuity of service rules.’’
The contracts provided that ‘‘[a]ll of these plans shall re-
main in full force and effect during the term of this Agree-
ment.’’ However, the Company could, on notice to the
Union, make any changes necessary to assure that company
contributions would be considered as tax deductions and not
wages.3
The method of computing the Christmas bonus is not
spelled out in the contract. The parties stipulated that the
provisions for a Christmas bonus in prior contracts were not
more specific than those in the current agreement.
Both the 1987 and 1990 contracts reflect agreement on a
wide range of issues. Both agreements contain, in identical
language, sections entitled ‘‘Entire Agreement,’’ sometimes
referred to as a ‘‘zipper clause’’:
ARTICLE XXIV
ENTIRE AGREEMENT
This Agreement constitutes the sole and entire exist-
ing agreement between the parties and supersedes all
prior agreements, committments [sic], and practices,
whether oral or written, between the COMPANY and
the UNION or the COMPANY and any of the covered
employees, and expresses all obligations of, and restric-
tions imposed on, the COMPANY.4
Both agreements contain identical sections entitled ‘‘Man-
agement of Plant.’’5
The Union’s assistant regional director, Johnny Long, was
the union spokesman for the 1987 negotiations. He could not
recall any discussion of article XXIV (‘‘Entire Agreement’’)
or the Christmas bonus during those negotiations. The com-
pany spokesman for the 1990 negotiations was B. F.
Wilburn, who testified that there was no discussion of the
Christmas bonus ‘‘across the table’’ during those negotia-
tions. Wilburn stated that he told the union negotiator that
he did not like Christmas bonuses because the Company
rarely got recognition for giving them, but added that the
parties ‘‘did not actually discuss’’ the bonus.
The Company issued an employee handbook which be-
came effective in March 1990.6 The handbook had a section
entitled ‘‘Benefit Summary,’’ which announced a ‘‘Christmas
Bonus’’ and spelled out the prior formula for its computa-
tion.7 The bonus for Christmas 1990, which was the first
year of the current contract, was calculated according to the
prior formula.8
Union Assistant Regional Director Long testified that the
Union heard a rumor in early 1991 that the Company was
planning to reduce the Christmas bonus. He called a com-
pany representative, who told him that the Company was
considering the matter. There was no offer to negotiate a
change, and Long informed the spokesman verbally and by
letter that it would be a violation of the contract.9
On November 13, 1991, the Company sent a letter to em-
ployees announcing that ‘‘the decision has been made to re-
duce the wage roll Christmas bonus to $100.00 per em-
ployee.’’10 The Union filed a grievance, and the Company
responded with a denial and a statement that the matter was
not subject to arbitration.11 Thereafter, the Company paid
Christmas bonuses in the amount of $100 per employee for
Christmas 1991. Union Representative Long testified without
contradiction that the average employee had previously re-
ceived $300 to $400 as a Christmas bonus.
B. Legal Analysis and Conclusions
1. Applicable principles
The Board has recently stated applicable law on this mat-
ter as follows:
It is well settled that a bonus paid consistently over
a number of years is a component of employee wages
and a term and condition of employment, even though
not expressly provided for in the bargaining agreement,
and that it cannot be unilaterally altered or abolished by
the employer without affording the Union notice and an
opportunity to bargain. [Citation cited.] Thus, the Re-
spondent’s unilateral discontinuation of the bonus pro-
gram constitutes an unlawful refusal to bargain unless,
795BONNELL/TREDEGAR INDUSTRIES
12 Member Cracraft dissented.
as the Respondent contends, the Union has waived its
right to bargain over this matter. [Citation cited.] The
right to be consulted on changes in terms and condi-
tions of employment is a statutory right; thus, to estab-
lish that it has been waived the party asserting the
waiver must show that the right has been clearly and
unmistakably relinquished. Whether such a showing has
been made is decided by ‘‘an examination of all the
surrounding circumstances including but not limited to
bargaining history, the actual contract language, and the
completeness of the collective bargaining agreement.
Columbus & Southern Ohio Electric Co., 270 NLRB
686, 686 (1984), citing Bancroft-Whitney Co., 214
NLRB 57 (1974) (other citations omitted). [TCI of New
York, 301 NLRB 822, 824 (1991).]
Respondent relies principally on the Columbus & Southern
and TCI cases. In the former, the employer had paid a
Christmas bonus for approximately 40 years. However, un-
like the instant case, there was no reference to it in the col-
lective-bargaining agreements, and it had been discussed only
twice. During 1982 negotiations for a new contract, the em-
ployer for the first time proposed a zipper clause. It provided
that it would ‘‘supersede all prior agreements and under-
standings,’’ and that the collective-bargaining agreement
would govern the parties ‘‘entire relationship’’ and be ‘‘the
sole source of any and all rights or claims which may be as-
serted in arbitration . . . or otherwise.’’ The clause was dis-
cussed during contract negotiations, and the union representa-
tive agreed that he understood it. The Union asked for a list
of agreements that would be terminated, and the employer
replied that it did not maintain such a list. By letter the em-
ployer notified the Union: ‘‘By specifying ‘all’ agreements,
we feel we have made our notice clear and unambiguous.
‘All’ means just that—all. What we have done through our
8(d) notice was to wipe the slate clean before the new con-
tract goes into effect.’’ The Union filed an 8(a)(5) charge,
which was dismissed. The parties thereafter reached agree-
ment on a contract, including the zipper clause. The Christ-
mas bonus was not discussed. The Board concluded that the
contract language showed that it was intended to supersede
all prior agreements and understandings. Based on this, and
the detailed agreements in other provisions of the contract,
the Board found that the zipper clause constituted a ‘‘clear
and unmistakable waiver.’’ Columbus & Southern Ohio Elec-
tric Co., supra, 270 NLRB at 686, 687.
In TCI, the Board states a summary of the facts: ‘‘For
about 11 years, the Respondent accorded its unit and nonunit
employees a share in a yearly bonus program, and in 1988,
this program was discontinued without notice to the Union.’’
TCI, supra at 824. The Board stated that the bonus for the
employees constituted a ‘‘past practice,’’ and noted that ‘‘the
presence of a zipper clause in successive contracts will not,
by itself, necessarily establish a waiver of bargaining rights
with regard to existing terms and conditions of employment,
especially when it is invoked to justify changes in existing
benefits.’’ (Citation omitted.) TCI, Id.
The Board found nonetheless that the facts in TCI war-
ranted a different conclusion:
This case, however, differs from those in which a
party relies on broad contractual language alone to es-
tablish that it had the right to act unilaterally with re-
gard to an existing term of employment not covered by
contract. Rather . . . during the 1988 negotiations the
Respondent proposed a new ‘‘Scope of Bargaining’’
provision. The proposed language expressly provided
that the agreement’s terms would supersede ‘‘all prior
agreements, understandings and past practices, oral or
written, express or implied between the parties.’’ The
previous agreement did not contain such a provision.
Although the ‘‘Scope of Bargaining’’ clause in that
contract acknowledged the completeness of the negotia-
tions and contained a waiver of bargaining ‘‘with re-
spect to any subject or matter not specifically referred
to or covered in this Agreement including fringe bene-
fits,’’ it did not delineate the relationship of the contract
itself to past practices or other noncontractual terms and
conditions of employment. By contrast, the new lan-
guage purported . . . . to define its status with respect
to ‘‘all prior agreements, understandings and past prac-
tices.’’
The Union’s resistance during bargaining to the new
language demonstrates that it also took the proposal se-
riously and understood that it would have an impact on
the final agreement and on the parties’ obligations.
. . . In short, under the circumstances of this case, the
Union, by accepting the strongly worded proposal,
knowingly agreed to define the bargaining relationship
as the Respondent had proposed. [TCI, supra at 824,
825.]
Based on these facts, the comprehensiveness of the bar-
gaining, and the broad nature of the zipper clause, the Board
concluded that the parties had ‘‘chosen to place within the
contract’s four corners all agreements arising out of the ne-
gotiations.’’ TCI, supra. Accordingly, the Board found that
the Union had waived its right to bargain over the dis-
continuation of the bonus plan, and dismissed the com-
plaint.12
The Board in TCI distinguished a contrary result in an-
other case as follows:
We find this case distinguishable in this and other re-
spects from Pepsi Cola Distributing Co., 241 NLRB
869 (1979), enfd. 646 F.2d 1173 (6th Cir. 1981), in
which the Board found, despite the presence of factors
relied on here, i.e., the opportunity to negotiate contract
terms, the specificity of the language at issue, and the
completeness of the parties’ agreement, that the union
had not waived the right to bargain over the elimination
of a bonus. In Pepsi-Cola, the Board inferred, in part
from the employer’s practice of paying the bonus even
through the agreement’s zipper clause on its face re-
lieved it of the obligation to do so, that the parties in-
tended to continue the bonus plan despite the continued
presence in the contract of a zipper clause. In that case,
however, unlike here, the respondent made no proposal
to change the language of the zipper clause. Therefore,
in that case, no event put the union on notice that the
employer contemplated a change in the bargaining rela-
tionship. Compare also Aeronca, Inc., 253 NLRB 261,
796 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
13 C.P. Br. 12.
14 In light of my conclusion above, I consider it unnecessary to de-
termine whether the prior method of computation was a term of the
collective-bargaining agreement.
enf. denied 650 F.2d 501 (4th Cir. 1981). [TCI, supra
at 825 fn. 5.]
And, after noting Aeronca, the Board commented on it:
Compare Aeronca, Inc., supra, 253 NLRB at 265
(where no new contractual provisions were proposed or
discussed during negotiations that would reasonably
alert union to alteration of its rights concerning a
bonus, union did not waive right to bargain about
Christmas turkeys by agreeing to zipper clause carried
over from previous agreements). [TCI, supra at 825 fn.
6.]
Finally, the Board in TCI explained that its holding was
governed by the facts in that case.
We emphasize that our analysis does not imply that
employers may rely on the broad wording of so-called
‘‘zipper clauses’’ alone to avoid bargaining over
changes in terms and conditions or employment. We
adhere to the well-settled view that a waiver of a statu-
tory right must be conscious and informed. [Id. at fn.
7.]
2. Conclusion
The facts in this case clearly place it within the rationale
of Pepsi-Cola and Aeronca, rather than Columbus & South-
ern and TCI. A Christmas bonus had been a provision of
prior collective-bargaining agreements. The Company had
paid the bonus for many years, and had computed its amount
according to a formula based on employee attendance. The
formula was not stated in the contract. This practice coex-
isted with the presence of a broad zipper clause, at least back
to the prior agreement. There was no bargaining over the
clause or the bonus during the preceding negotiations. And,
when the parties bargained for the current agreement, there
was no discussion at the bargaining table about the bonus.
A casual comment by the company spokesman, away from
the bargaining table, that he did not like bonuses, did not
constitute bargaining. Nor was there, unlike the cases cited
by Respondent, any new or altered zipper clause. Nor is
there any evidence that the parties agreed that the existing
zipper clause would have any effect on the existing method
of computing the Christmas bonus. Indeed, there is no evi-
dence that either was discussed during the negotiations lead-
ing to the current agreement.
Finally, subsequent to execution of the last agreement in
January 1990 including the zipper clause on which Respond-
ent relies, the Company issued an employee handbook in
March 1990 restating the old formula for computing the
Christmas bonus. And, still later, during the 1990 Christmas,
the Company continued to calculate the bonus according to
the prior formula. As the Board stated in its discussion of
the Pepsi-Cola case, the Board
inferred, in part from the employer’s practice of paying
the bonus even though the agreement’s zipper clause on
its face relieved it of the obligation to do so, that the
parties intended to continue the bonus plan despite the
continued presence in the contract of a zipper clause.
[TCI, supra at 825 fn 5.]
The Charging Party makes a similar argument—the zipper
clause in January 1990 by its terms superseded only ‘‘prior’’
practices, whereas the subsequent employee handbook and
use of the prior formula in December 1990 created a new
practice.13
All the Respondent has to rely on in this case, in sub-
stance, is the same broad zipper clause which had existed
previously. As the Board stated in TCI, this is insufficient to
establish that it had a right to act unilaterally with regard to
an existing term of employment not covered by the contract.
The existing method of computing the bonus, as well as the
bonus itself, was a term of employment. The zipper clause
in the current agreement does not establish that the Union
made a conscious and informed decision to waive its right
to bargain over the method of computing the bonus.
The management-rights clause does not contain any provi-
sion giving the Company the right to change unilaterally its
employees’ compensation or other benefits.
On the basis of the foregoing findings of fact and the en-
tire record, I make the following
CONCLUSIONS OF LAW
1. The Respondent is an employer 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 representing the appropriate unit
of:
All production and maintenance employees and truck
drivers employed by the Respondent at its Newnan,
Georgia, plant, but excluding all office clerical employ-
ees, technical employees, buyers, salesmen, professional
employees, guards, watchmen and supervisors as de-
fined in the Act.
3. The Respondent and the Union have at all material
times been parties to a collective-bargaining agreement cov-
ering the employees in the above-described unit.
4. By unilaterally discontinuing its established method of
computing an employee Christmas bonus, and by establishing
a new method of determining the amount of the bonus,
which reduced it, on about November 13, 1991, without noti-
fication to or consultation with the Union, the Respondent
has refused to bargain with the Union in violation of Section
8(a)(5) and (1) of the Act.14
5. The foregoing unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
It having been determined that Respondent has committed
certain unfair labor practices, I shall recommend that it be
required to cease and desist therefrom.
I shall also recommend that Respondent be required to
make whole its employees for the amounts by which their
1991 Christmas bonuses were reduced, if any, by Respond-
ent’s use of a new formula for determining the amount of
the bonus. Respondent shall also pay its employees interest
797BONNELL/TREDEGAR INDUSTRIES
15 Under New Horizons, interest is computed at the ‘‘short term
Federal rate’’ for underpayment of taxes as set out in the 1986
amendment to 26 U.S.C. § 6621. Interest accrued before January 1,
1987 (the effective date of the amendment) is computed as in Flor-
ida Steel Corp., 281 NLRB 651 (1977).
on the amounts by which the bonus was unlawfully reduced,
as set forth in New Horizons for Retarded, 283 NLRB 1173
(1987).15
In addition, I shall recommend that Respondent, subse-
quent to 1991, be required to pay Christmas bonuses com-
puted in the same manner, until such time that it is no longer
required under applicable Board law to utilize such a com-
putational method.
I shall also recommend the posting of appropriate notices.
[Recommended Order omitted from publication.]