Borden, Inc.,

National Labor Relations Board - Board Decisions

Apr 22, 1986

279 N.L.R.B. 396 (N.L.R.B. 1986)

396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Borden , Inc., Chemical Division Thermoplastic Prod-
ucts and Local 553, International Chemical
Workers Union, AFL-CIO. Case 1-CA-22419
22 April 1986
DECISION AND ORDER
BY MEMBERS DENNIS, BABSON, AND
STEPHENS
On 6 September 1985 Administrative Law Judge
Steven M. Charno issued the attached decision.
The Respondent filed exceptions and a supporting
brief, and the General Counsel resubmitted her
brief to the judge.
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 and to adopt the recommended Order
as modified.'
REMEDY
Because the Respondent engaged in an unfair
labor practice, it shall be ordered to cease and
desist therefrom and to take certain affirmative
action designed to effectuate the purposes of the
Act, including the requirement that it shall, on the
Union's request, bargain over the severance pay
issue without insisting on employee execution of a
general release as a condition of agreement.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, Borden, Inc., Chemical Division Ther-
moplastic Products, Boston, Massachusetts, its offi-
cers, agents, successors, and assigns, shall take the
action set forth in the Order as modified.
1. Substitute the following for paragraph 2(a).
"(a) On the Union's request, bargain over the
severance pay issue without insisting on employee
execution of a general release as a condition of
agreement."
2. Substitute the attached notice for that of the
administrative law judge.
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 ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain with Local 553,
International Chemical Workers Union, AFL-CIO,
concerning severance pay.
WE WILL NOT continue to insist on the execution
of a general release by employees whose jobs have
been eliminated as a condition for the granting of
severance pay.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL, on the Union's request, bargain over
the severance pay issue without insisting on em-
ployee execution of a general release as a condition
of agreement.
BORDEN, INC., CHEMICAL DIVISION
THERMOPLASTIC PRODUCTS
Avrom J. Herbster, Esq., for the General Counsel.
James A. King Jr., Esq., of Columbus, Ohio, for the Re-
spondent.
DECISION
STATEMENT OF THE CASE
STEVEN M . CHARNO , Administrative Law Judge. In
response to a charge filed on 2 October 1984, a com-
plaint was issued on 5 March 1985 which alleges that
Borden , Inc., Chemical Division Thermoplastic Products
(Respondent) has violated Section 8(a)(1) and (5) of the
National Labor Relations Act, by failing and refusing to
bargain collectively in good faith with Local 553, Inter-
national Chemical Workers Union , AFL-CIO (Union).
Respondent 's answer denies the commission of any unfair
labor practice.
A hearing was held before me on 15 April 1985 in
Boston , Massachusetts .' Briefs were thereafter filed by
the General Counsel and Respondent under extended
due date of 22 June 1985.
' We shall modify the judge's decision to provide the standard Board
remedy for the 8(a)(5) violation the judge found , insisting to impasse on a
permissive subject of bargaining , and to conform with the General Coun-
sel's requested remedy See, e g, North Carolina Furniture, 121 NLRB 41
(1958) See also Big John Food King, 171 NLRB 1491 (1968)
i At the hearing, the parties entered a comprehensive stipulation re-
solving virtually every factual issue in the proceeding The only disputed
issue remaining concerns statements made at a meeting on 23 July 1984,
and there are only minor variations in the testimony presented on this
issue
279 NLRB No. 59
BORDEN , INC 397
FINDINGS OF FACT
1. JURISDICTION
Respondent is a corporation engaged in the production
of polyvinylchlonde (PVC) and related products, which
maintains an office and place of business in Leominster,
Massachusetts. During the calendar year 1984, Respond-
ent, in the course and conduct of its business in Massa-
chusetts, shipped products valued in excess of $50,000 to
points outside the State and purchased and received
goods valued in excess of $50,000 from suppliers outside
the State It is admitted, and I find, that Respondent is an
employer within the meaning of the Act.
The Union is admitted to be, and I find is, a labor or-
ganization within the meaning of the Act.
II THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
During the 20 years Respondent has produced PVC
products at its Leominster facility, its production em-
ployees have been represented by the Union. As of Janu-
ary 1984, there were approximately 140 such employees
in the facility's bargaining unit.2 The most recent collec-
tive-bargaining agreement between Respondent and the
Union, which expires 26 January 1986, incorporates a
letter agreement between the parties dated 11 February
1980, which states:
In confirmation of our discussions during the recent
labor agreement negotiations , it was agreed that in
the event of the closing of the Borden, Inc., Chemi-
cal Division, Thermoplastics Products, Leominster,
Massachusetts facility, the company will meet with
the union in an effort to, and in good faith, negoti-
ate a severance agreement.
B. Negotiations
In November 1983, Respondent discontinued produc-
tion of PVC latex and permanently laid off three em-
ployees in its polyco department. On 11 April 1984,3 Re-
spondent informed the Union that the polyco department
at the Leominster facility would be closed and the re-
maining 15 to 20 employees in that department would be
laid off. At a meeting between the parties the following
day, the Union sought severance pay for the laid-off em-
ployees pursuant to the 1980 letter agreement . Colvin
Henderson, Respondent's employee relations manager,
maintained that the Company's action was a layoff and
Respondent would not offer severance pay. He stated,
however, that Respondent would aid the affected em-
ployees in securing other employment. Subsequently, the
2 The appropriate bargaining unit is admitted to be
All hourly production and maintenance employees (including boiler-
room licensed fire person), shipping employees, over-the-road truck
drivers and all hourly laboratory technicians employed at the Leom-
inster facility, but excluding all other employees, executives, supervi-
sors , assistant supervisors, office employees, watch persons, guards,
chemists, laboratory technicians and professional employees , and all
other supervisors as defined in the National Labor Relations Act, as
amended
9 All dates hereinafter are 1984, unless otherwise indicated
remaining employees in the polyco department were laid
off.
On 19 June, Respondent sent the Union a letter which
stated that additional production and maintenance em-
ployees would be laid off for a 1-month period com-
mencing 24 June. At a meeting between the parties in
early July, Michael Formato, Respondent's area labor re-
lations manager , reiterated Respondent 's position that
bargaining concerning severance pay was not appropri-
ate under the 1980 letter agreement because the plant
was not being closed . On 18 July Respondent informed
the Union by letter that the 1-month layoff would be ex-
tended "until resin sales warrant additional product from
the Leominster manufacturing facility."
On 23 July the parties met again. At that meeting,
Henderson indicated that the Leominster facility would
not be shut down but would be used solely as a terminal,
employing approximately 30 workers. He further indicat-
ed that at least one of four conditions must be met before
Respondent could profitably recommence production at
Leominster: (1) capital investment must be made to
reduce the high production costs resulting from old
equipment , (2) a large competitor must leave the market,
(3) a new product which could be produced at the facili-
ty must be developed, or (4) a sudden "tremendous up-
swing" in business must take place. Henderson admitted
that Respondent could not predict when any of these
conditions might be met and stated at the close of the
meeting that Respondent was prepared for the first time
to discuss the issue of severance.4 In his testimony
during the hearing, Henderson noted that his 23 July
statement concerning severance constituted "a rather no-
ticeable change" from Respondent's prior position of re-
fusing to recognize that the 1980 letter agreement in any
way controlled the negotiations between Respondent and
the Union.
On 26 July Henderson sent a letter to all laid-off em-
ployees which noted that they had been "laid-off with no
definite date of recall" and discussed their rights to cer-
tain employee benefits. That discussion did not take into
account any possibility that the employees would be re-
called.
At a meeting on 10 August, the Union contended that,
because Respondent planned to cease production at
Leominster, the 1980 letter agreement should be imple-
mented. Formato, who was present for Respondent,
maintained that a shutdown was not occurring . He did,
however, propose that laid-off employees be given an
option of retaining their layoff status and recall rights for
3 years or of severing their employment and receiving
severance pay in an amount equal to 16 hours of pay for
each year of employment by Respondent.
On 28 August the parties again met and Jack McIner-
ney, Respondent's director of corporate labor relations,
stated that all employees must elect one of the two op-
tions by 1 October. The parties agreed that the severance
agreement would cover present employees as well as
those previously laid off. Following additional discussion
4 The testimony of Henderson and the Union's representative to this
effect is supported by both parties' notes of the meeting
398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
concerning the details of severance pay, McInerney
stated that employees who elected severance would be
required to sign a release and gave a copy of a proposed
release to the union representatives . That document re-
leased Respondent from claims for wages , employment,
reemployment , reinstatement, and "any and all causes of
action whatsoever" which an employee might have
against Respondent as a result of his employment.
At a grievance meeting on 13 September, Respondent
gave the Union a detailed summary of the 10 August
proposal which outlined the two options and the require-
ment that a release be executed by employees opting for
severance. At the Union's request during a 26 September
telephone call, Formato extended the deadline for em-
ployees to exercise the option to 15 October.
The parties met for the last time on 2 October. After
brief negotiations , they reached complete agreement on
every term and condition of the severance agreement
except the wording of the release . The Union's repre-
sentatives expressed their concern that the release pro-
posed by Respondent would extinguish an employee's
right to prosecute civil and statutory health or safety
claims. This concern arose from the fact that the vinyl
chloride produced at Leominster is either a known or
suspected carcinogen, the use of which is specifically
governed by OSHA regulations. The Union's representa-
tives stated their willingness to agree to a release which
extinguished all contractual rights as well as any rights
engendered by the termination of employment, but indi-
cated that they could not agree to the general release
proposed by Respondent. Formato informed the Union
that unless the agreement , including the requirement of a
general release , was signed by 3 p.m. that day, Respond-
ent would take it off the table. The agreement was not
signed, and there have been no further negotiations be-
tween the parties concerning severance.
The production facilities at Leominster have remained
idle since July 1984, and none of the affected employees
have been recalled. The work formerly done there has
been transferred to Respondent's plants in Louisiana and
Illinois, and the Leominster facility has been used exclu-
sively as a terminal for the consolidation and shipment of
products produced elsewhere. The Leominster facility
has never previously been shut down for such an ex-
tended period, nor has it previously been used as a termi-
nal. Production machinery at the facility has been moth-
balled and 30 managerial employees (of approximately
100) who worked at the facility have been terminated.
Although Respondent expended between $250,000 and
$400,000 during mothballing to ensure that it could easily
restart the plant, it has no present plans to recommence
production and cannot predict when it might do so.
C. Discussion
The General Counsel contends that Respondent violat-
ed Section 8(a)(1) and (5) by bargaining to impasse over
a permissive subject of bargaining, the wording of a re-
lease . That contention raises three questions for consider-
ation: (1) whether Respondent was under a duty to bar-
gain concerning severance pay; (2 ) whether the parties
reached impasse ; and (3) whether a general release is a
permissive subject of bargaining.
1. The duty to bargain
An employer's decision to shut down part of its oper-
ations undisputedly creates an obligation to bargain
about the effects of that decision on bargaining unit em-
ployees . See, e .g., First National Maintenance Corp. v.
NLRB, 452 U.S. 666 (1981); NLRB v. Production Mould-
ed Plastics, 604 F.2d 451 (6th Cir. 1979); National Termi-
nal Baking Corp., 190 NLRB 465 (1971). Notwithstand-
ing the foregoing principle and the specific requirements
of the 1980 letter agreement, Respondent contends that it
never incurred an obligation to bargain because the
Leominster plant was never shut down. In support of
this position, Respondent points to the terminal operation
conducted at the facility and to its expenditures to ensure
that production equipment could be used in the future.
Respondent's attempt to characterize the shutdown of
production at Leominster as temporary is not supported
by the record. Production has been halted for the longest
period in the facility's history. The occurrence of any of
Respondent's conditions precedent to recommencing op-
eration is highly speculative , and Respondent cannot
provide any estimate of when the Leominster facility
might again be used to produce PVC products. As noted
above, Respondent's 26 July letter does not contemplate
recall of any of the bargaining unit employees to whom
it was addressed . Finally , Respondent 's willingness in
October 1984 to release its entire work force by allowing
them to opt for severance is inconsistent with its argu-
ment that the facility has not been shut down. For these
reasons, I conclude that Respondent has closed a part of
its operation and is obligated to bargain over the effects
of that action. This conclusion is in no way negated by
the fact that workers are still employed at the plant.
Those employees are engaged solely in shipping and
transferring products-functions never previously per-
formed at the plant. Similarly, the mothballing of pro-
duction equipment merely evidences the exercise of pru-
dent business judgment, not an imminent recommence-
ment of production.
Respondent appears to contend in the alternative that,
even if it had an obligation to bargain, the scope of that
obligation is narrower than would be the case if Re-
spondent were negotiating a complete collective-bargain-
ing agreement . Without citing any authority, Respondent
argues on brief:
While making no offer of any kind would clearly be
a refusal to negotiate were the entire collective bar-
gaining agreement at issue , I submit, just as clearly
in this context, where the only issue is will a sever-
ance package be offered to supplement an existing
and ongoing collective bargaining agreement the
Company is not obligated to offer a thing.
Respondent's thesis is without merit. Once a statutory
obligation to bargain exists, the parties are required to
engage in good-faith bargaining . The fact that the goal of
their negotiations is not a comprehensive collective-bar-
gaining agreement cannot affect this requirement.
BORDEN, INC 399
2. Impasse
The Board in Taft Broadcasting Co., 163 NLRB 475,
478 (1967), enfd. 395 F.2d 622 (D.C. Cir. 1968), stated
that an impasse occurs "after good faith negotiations
have exhausted the prospects of concluding an agree-
ment." This definition describes the situation in the
present case. Here, the parties negotiated until they had
reached agreement on every term and condition of a sev-
erance agreement, except for the wording of the release
which employees would be required to sign . When it
became impossible to reach agreement on that point
through further good-faith negotiation, the parties had
reached an impasse.
Respondent's argument that an impasse did not occur
because it withdrew its offer misconstrues the Board's
holding in Nordstrom Inc., 229 NLRB 601 (1977). That
case concerned the nature of offer and acceptance in a
situation where impasse had not yet been reached. The
Board there held that one party cannot unilaterally
create an enforceable contract by agreeing to the portion
of an offer relating to a mandatory subject of bargaining
while rejecting the remaining portions of the offer which
relate to permissive subjects. Nordstrom is thus legally
and factually inapposite to the instant situation.
was designed to establish all the terms and condi-
tions of employment for the contract then under ne-
gotiation. Accordingly, it had an immediate and sig-
nificant effect on unit employees. In these circum-
stances the parties' agreement was so intertwined
with and inseparable from the mandatory terms and
conditions for the contract currently being negotiat-
ed as to take on the characteristics of the mandato-
ry subjects themselves.
The relationship between the permissive and mandato-
ry subjects of bargaining in this case does not exhibit the
interdependence required by the Board in Sea Bay Manor
Home. Obviously, severance pay can be paid pursuant to
a severance agreement without the execution of a re-
lease . If Respondent's argument were accepted, it would
mean that a permissive subject of bargaining would
become mandatory whenever it was presented together
with a mandatory subject. That is not the law. I there-
fore conclude that there is not a sufficient nexus between
severance pay and a general release to inextricably inter-
twine the two subjects of bargaining. See NLRB v. Bart-
lett-Collins Co., 639 F.2d 652 (10th Cir. 1981), cert.
denied 452 U.S. 961 (1981).
3. Mandatory or permissive
In NLRB v. Borg-Warner Corp., 356 U.S. 342, 349
(1958), the Supreme Court stated that "good faith does
not license the employer to refuse to enter into agree-
ments on the ground that they do not include some pro-
posal which is not a mandatory subject of bargaining."
Thus, the final issue to be resolved is whether the subject
of bargaining over which impasse was reached, a general
release, is a mandatory subject of bargaining.
Although Respondent appears to admit that a general
release is not in and of itself a mandatory subject of bar-
gaining ,5 it argues that the release "was so intertwined
with severance pay as to be a mandatory subject is this
context even if not in others." Initially, it should be
noted that the requirement of a general release was not a
part of Respondent's initial severance pay proposal and
does not appear to have been added as a quid pro quo
for any concession to the Union. In any event, Respond-
ent's position is based on a misreading of the Board's
holding in Sea Bay Manor Home for Adults, 253 NLRB
739 (1980). There, the Board found that a permissive
term, interest arbitration, rose to the level of a mandato-
ry term when the parties agreed to use interest arbitra-
tion to establish each and every provision of the collec-
tive-bargaining agreement then being negotiated The
Board stated (page 740) that the agreement to employ in-
terest arbitration
6 The Board has consistently held in other contexts that attempts to
condition the execution of an agreement upon the relinquishment of a
future legal right violate the statutory bargaining obligation See Laredo
Packing Co, 254 NLRB 1 (1981), Stackpole Components Co, 232 NLRB
723 (1977), Peerless Food Products, 231 NLRB 530 (1977), Heider Mfg
Co, 91 NLRB 1185 (1950) These cases indicate that the correct focus is
on the nature of the right proposed to be extinguished In that context, it
is clear that a general release of all future claims arising in any way from
a prior employment is too attenuated from the actual terms and condi-
tions of that employment to be a mandatory subject of bargaining
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. All hourly production and maintenance employees
(including boilerroom licensed fire person), shipping em-
ployees, over-the-road truck drivers and all hourly labo-
ratory technicians employed at Respondent's Leominster
facility, but excluding all other employees, executives,
supervisors, assistant supervisors, office employees,
watch persons, guards, chemists, laboratory technicians
and professional employees, and all other supervisors as
defined in the Act, constitute a unit appropriate for the
purpose of collective bargaining within the meaning of
Section 9(b) of the Act.
4. At all times material, the Union has been and is the
exclusive representative of all the employees in the afore-
said unit for the purpose of collective bargaining within
the meaning of Section 9(a) of the Act.
5. By demanding as a condition of consummating a
severance agreement affecting employees in the aforesaid
unit that the Union agree to a proposal requiring em-
ployees whose jobs had been eliminated to sign a general
release, Respondent has engaged in and is engaging in an
unfair labor practice in violation of Section 8(a)(1) and
(5) of the Act.
6 The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Because Respondent engaged in an unfair labor prac-
tice , it shall be ordered to cease and desist therefrom and
to take certain affirmative action designed to effectuate
the purposes of the Act, including the requirement that it
400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
shall, at the request of the Union, enter into and execute
the 2 October 1984 severance pay proposal, with the ex-
ception of the provision requiring employee execution of
a general release.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed6
ORDER
The Respondent , Borden , Inc., Chemical Division
Thermoplastic Products , Leominster Massachusetts, its
officers , agents , successors , and assigns, shall
1. Cease and desist from
(a) Refusing to bargain collectively over a severance
pay agreement with the Union as the bargaining repre-
sentative of the employees in the unit described above.
(b) Demanding as a condition of consummating a sev-
erance agreement that the Union agree to a proposal re-
quiring employees whose jobs had been eliminated to
sign a ' general release or to any other proposal not in-
volving terms or conditions of employment.
(c) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
6 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
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) At the request of the Union, enter into and execute
the 2 October 1984 severance pay proposal, with the ex-
ception of the provision requiring employee execution of
a general release.
(b) Post at its Leominster, Massachusetts facility copies
of the attached notice marked "Appendix." Copies of
the notice, on forms provided by the Regional Director
for Region 1, after being signed by the Respondent's au-
thorized representative, shall be posted by the Respond-
ent immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by
any other material.
(c) Mail a copy of the attached notice marked "Ap-
pendix" to each of its employees who would be covered
by the 2 October 1984 severance pay proposal.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
r 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 Nation-
al 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 "