Borden, Inc.

National Labor Relations Board - Board Decisions

May 19, 1972

196 N.L.R.B. 1170 (N.L.R.B. 1972)

1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Borden , Inc., Dairy & Services Division and Sales
Drivers, Deliverymen , Warehousemen & Helpers,
Local No. 949
Sales Drivers, Deliverymen, Warehousemen & Help-
ers, Local No. 949 and Borden, Inc., Dairy & Serv-
ices Division . Cases 23-CA-4028 and 23-CB-1200
May 19, 1972
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING AND
JENKINS
On December 14, 1971, Trial Examiner George J.
Bott issued the attached Decision in this proceeding.
Thereafter, Respondent-Employer and General
Counsel filed exceptions and supporting briefs.
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 Trial
Examiner's Decision in light of the exceptions and
briefs and has decided to affirm the Trial Examiner's
rulings, findings, I and conclusions 2 and to adopt his
recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the recommended
Order of the Trial Examiner and hereby orders that
Respondent-Employer, Borden, Inc., Dairy & Serv-
ices Division, Houston, Texas, its officers, agents, suc-
cessors, and assigns, shall take the action set forth in
the Trial Examiner's recommended Order.
CHAIRMAN MILLER, dissenting in part:
Unlike my colleagues, I would not find that Re-
spondent-Employer violated Section 8(a)(5) and (1) of
the Act and would dismiss the complaint in this re-
spect in its entirety.
As set forth more fully in the Trial Examiner's De-
cision, the alleged 8(a)(5) and (1) violation is based
solely on Respondent's unilateral termination of its
four insurance plans as of July 1, 1971, following the
termination of the collective-bargaining contract on
midnight, June 30, and after precedent negotiations
had failed to produce any new agreement. The four
insurance plans had been in effect for many years and
each contained, at all times herein relevant, the fol-
lowing express provision:
The Company may supplement, change, modify
or discontinue the plan at any time such action
is considered necessary or advisable.
Although the insurance plans were never referred
to in the collective -bargaining agreements of the par-
ties, their major terms, including those above quoted,
were publicized at all times to employees and were
known to the Union. None of the plans ' provisions
were qualified by anything in the express terms of the
bargaining contract.
The right to terminate afforded by the quoted
clause is, as I have noted in my dissent in T. T. P.
Corporation, Jam Handy Productions Division, A Whol-
ly-Owned Subsidiary of Tele-Tape Productions, Inc.,
190 NLRB No. 48, one found in virtually all nonnego-
tiated employee benefit plans ; and, unless explicitly
qualified by collective-bargaining contract , must be
deemed to have the same binding effect on all con-
cerned as do other terms of the employee benefit
plans . Accordingly, and as the above -quoted clause
clearly afforded the Employer the right to discontinue
the plans at its option , I do not find that the
Employer's exercise of that right , in a context other-
wise free of any unlawful conduct , was in violation of
Section 8(a)(5) and ( 1) allegations of the complaint
without reaching the merits of any other arguments
made by Respondent in support of its requested dis-
missal of this part of the complaint.
In all other respects , I concur in the decision of my
colleagues.
1 We correct an inadvertent reference by the Trial Examiner to May 10,
instead of June 10, as the date on which the Employer submitted to the Union
its offer of $350 bonuses.
2 We agree with the Trial Examiner's conclusion that the contract griev-
ance and arbitration provisions do not warrant abstention here. The Hilton-
Davis Chemical Company Division of Sterling Drug, Inc., 185 NLRB No. 58.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
GEORGE J. BoTT, Trial Examiner : This consolidated pro-
ceeding was heard at Houston , Texas, on September 28 and
29, 1971 . On July 8, 1971, Sales Drivers, Deliverymen,
Warehousemen & Helpers, Local No. 949 , herein called
Respondent-Union or Union, filed a charge alleging that
Borden , Inc., Dairy & Services Division, herein called Re-
spondent-Employer or Employer , violated Section 8(a)(5)
of the National Labor Relations Act, as amended, herein
called the Act , by withdrawing its four insurance programs
on or about July 1, 1971. On July 1, Respondent-Employer
filed a charge against the Union , which it amended on Au-
gust 9 , alleging that Respondent-Union had refused to bar-
gain collectively in violation of Section 8(b)(3) of the Act,
and had also sought to have the Employer designate bar-
gaining representatives other than those which it had al-
ready chosen , in violation of Section 8(b)(1)(B) of the Act.
The Regional Director for Region 23 issued complaints
against Respondent -Employer and Respondent-Union on
the basis of said charges and subsequently consolidated
them for hearing . Respondent-Employer and Respondent-
1 The complaints were issued and consolidated for hearing on August 11,
1971.
196 NLRB No. 172
BORDEN, INC.
Union filed answers admitting certain allegations of the
complaints against them but denying the commission of any
unfair labor practices?
Upon the entire record in the case, including my observa-
tion of the witnesses, and after due consideration of the
briefs filed by the parties, _I make the following:
FINDINGS OF FACT
1. JURISDICTION
. Respondent-Employer is a New Jersey corporation which
operates in all the States of the United States and also has
places of business in foreign countries . During the 12
months prior to the issuance of the complaint against it,
Respondent-Employer , at its Houston , Texas, operations,
where it processes milk and milk products and which is the
only facility involved in this proceeding , purchased goods
and materials in excess of $50 ,000, which were shipped from
points outside the State of Texas directly to its Houston,
Texas , place of business.
Respondent -Employer is an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Respondent-Union is a labor organization within the
meaning of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Union's Alleged Violation of
Section 8(b)(1)(B) and 8(b)(3) of the Act
1. The facts
a. The setting
Since 1960, Respondent-Union has been the statutory
representative of Respondent-Employer's production and
service employees at the Employer's Houston, Texas, milk
plant. The most recent collective-bargaining contract be-
tween the parties, dated July 1, 1968, expired at midnight on
June 30, 1971, and prior thereto, both parties notified each
other in writing of a desire to terminate or modify the ex-
isting contract, and to negotiate a new one:
Beginning on May 8, 1971, and ending on August 27,
1971, the parties met on a dozen occasions and discussed a
new contract, but no agreement was reached and there have
been no further meetings. General Counsel's complaints
against both parties are based on their actions in connection
2 Respondent-Union's answer was filed on September 3, 1971, more than
10 days after service of the complaint, as required by Sec. 102.20 of the
National Labor Relations Board's Rules and Regulations. At the opening of
the hearing, Respondent-Employer filed a motion for judgment on the plead-
ings, arguing that since the Union had filed a late answer without good cause,
all facts in the General Counsel's complaint against the Union should be
deemed to be admitted as true. The General Counsel and the Respondent-
Union opposed the motion, and I denied it. The cases were then tried and
all parties participated in the proceeding, Respondent-Employer has, in its
brief, asked me to reconsider my ruling. It appeared to me at the hearing that
there was no deliberate flouting of the Board's rules by the Union and that
there had been a change of counsel at or around the time that the answer
was due . It also appeared from statements of counsel that an associate of the
Union's original counsel had become ill during the course of this proceeding.
On these representations and because an adequate answer was filed promptly
when new counsel was retained and the delay was relatively insignificant, I
denied the motion, and I hereby renew my ruling. Star Wholesale Meats, Inc.,
133 NLRB 1416.
1171
with their negotiations. As will be seen later, after the Union
notified the Employer on June 27 that its "full, final and
complete" offer had been voted on and rejected by the
Union's membership, the Employer notified its employees
that their four insurance programs were to be canceled on
July 1, and it did in fact cancel them on that date. Respon-
dent-Employer's actions in that regard is alleged to be a
violation of Section 8(a)(5) of the Act, in that it was done
"unilaterally and without consultation with the Union." On
the other hand, General Counsel contends that the Union
negotiated throughout with no intention of reaching an
agreement and that its violation of Section 8(b)(3) of the Act
is evidenced by: canceling the bargaining sessions which the
parties had arranged for May 4, 5, and 6; insisting upon
penalties for Respondent-Employer's violation of the
Union's proposal that only unit employees should perform
unit work; demanding that employees be permitted to strike
despite the no-strike clause in any new agreement if nonbar-
gaining unit employees did unit work, or if unit employees
were not treated fairly by management. Further evidence of
an intention to frustrate the bargaining process is asserted
to be found in the Union's attempt to have the Employer
designate a local management representative to bargain for
it rather than its chosen representatives, and this conduct is
also alleged to be a separate violation of Section 8(b)(1)(B)
of the Act.
b. The Union cancels scheduled meetings
With respect to the Union's cancellation of the meetings
scheduled for May 4, 5, and 6, which it admits, the record
shows that Green, the Employer's general manager at Hous-
ton, wrote Moon, the Union's secretary-treasurer, on March
31, 1971, giving notice of termination of the labor agree-
ment and suggesting April 13, 14, and 15 as bargaining
dates. The record does not show how it came about, but
arrangements were made locally between the parties to meet
on May 4, 5, and 6 in Houston.4
On April 30, Moon's secretary notified Green that the
scheduled meetings were canceled, and on May 3, Green
wrote Moon acknowledging receipt of the notification, but
complaining that the Union's refusal to meet was an act of
bad faith and that unfair labor practice charges had been
filed with the Board to that effect.
The parties met on May 8 and many times thereafter, and
there appears to have been full discussion of all issues.
Respondent-Employer's representatives agreed at the hear-
ing that May 4, 5, and 6 were the only dates on which Moon
was not available to meet. The record also shows from
Moon's testimony and even from Pelton's, the Employer's
chief negotiator, that Moon accommodated Pelton, who
had a very full schedule, by agreeing to meet at his conven-
ience, and that Pelton could not meet at any time and was
unavailable for a large part of August. In addition, the dates
of June 7, 8, and 9, on which the parties first met after the
Company presented its proposals in the May 8 meeting,
were primarily arranged to fit Pelton's schedule, and Moon
also agreed that no meetings need take place on Mondays
so that Pelton would not have to travel on Sundays.5
Both Moon and Pelton are admittedly very busy men.
3 The record contains a substantial number of letters between the parties
and documents used in bargaining which were entered into the record by
stipulation or without objection and which fairly reflect the sequence of
events and the positions of the parties.
4 Moon also wrote Bryant, the Employer's assistant general manager at
Houston, on April 27, giving the required contract and statutory notice of
termination of contract, and requesting meetings at "your very earliest con
venience."
5 Pelton's office is in Norfolk, Virginia.
1172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Moon, the Union's only full-time paid official, is respon-
sible for negotiating and administering its labor agreements.
Pelton has ultimate responsibility for labor relations in ap-
proximately 175 of the Employer s facilities and in that area
he e negotiates and polices all labor agreements. In the con-
text of this case, I find nothing significant, viewed either
alone or in connection with any other evidence, in the
Union's cancellation of the bargaining sessions scheduled
for early May 1971.
c. The Union 's insistence on certain of its
proposals and on penalties for
violation thereof
In a meeting on May 8, 1971, Pelton, the Employer's
southern area labor relations manager, presented the Union
with the Employers' contract proposals, which he described
as "in the nature of a completely new contract," and which
he said contained "substantial changes" from the old agree-
ment . Pelton explained to the Union that although the Em-
ployer desired to pay wage and fringe benefits comparable
with its competitors, it Pert that certain union restrictions on
its operations were inefficient and costly, and ought to be
changed. Therefore, the Employer, through Pelton, insisted
on two principal changes in the old agreement. It wanted
first to have the right to freely interchange employees be-
tween the dock and the vault area or "cold room," and
second, not to have to maintain the "rotating days off"
principle provided in the existing agreement.6 Respondent-
Employer, Pelton said, considered these proposed changes
to be of major importance, and Moon said the Union
"strictl "y opposed them.
The Union needed time to study the Employer's propos-
als and prepare its own, and so it was agreed that the parties
would meet again on June 8. The Union's proposal, which
the Employer received the day before the June 8 meeting,
contained two new clauses. The first would prevent the
Employer from requiring employees to work overtime, ex-
cept in emergencies, and the second would forbid the as-
signment of nonunit employees to work normally done by
employees in the unit and would permit employees to stop
work without being considered in violation of any of the
provisions of the contract if the Employer disregarded the
restriction. These provisions and the two major changes the
Employer was insisting on were considered and discussed at
length on June 8 and at later meetings on June 9, 10, 22, and
At the June 9 meeting, the Union supplemented its pro-
posal on preserving bargaining unit work by a provision
granting employees 8 hours pay in cases where supervisors
or other nonunit personnel performed tasks which they nor-
mally performed.
Although Pelton testified that, at the June 8 and subse-
uent meetings , Moon complained at length about the per-
ormance of unit work by supervisors and the requirement
that employees must work overtime when ordered to, in
addition to charging that management treated employees
inhumanely,7 he said that he just as firmly and "vehement-
ly" took the position that the Employer would not contract
away any more of management's rights and "would never"
6 A practice whereby each employee ends up with 3 consecutive days off
each 6 weeks.
7 The basis for the Union' s constant complaint that supervisors did not
treat employees in a "dignified or Humane " manner was not fully explained,
but it seems to be related , in part at least, to the Union's contention that
supervisors sometimes assigned employees to overtime work shortly before
shift change.
agree to a penalty clause for breach of agreement in regard
to the proposed restrictions on its existing practices with
respect to overtime or unit work. Pelton made a conterpro-
posal to the Union's unit work proposal, and it seems that
it was this which brought forth Moon's penalty clause pro-
viding for 8 hours pay to an employee whose work was done
by a nonunit employee. The Employer not only strongly
objected to accepting any kind of a penalty clause, but also
to any suspension of the no-strike clause in the contract if
the Employer agreed to and then violated the Union's new
proposals, Pelton said.
The Union has never withdrawn its demands regarding
unit work, abolition of compulsory overtime and the "hu-
mane" treatment of employees, although Pelton said that
the Union's attorney stated sometime in July that those
issues could be resolved. The Employer did, however, under
the following circumstances, abandon its insistence on its
two major proposals for contract changes, that is, abolition
of rotating days off and a provision permitting it to inter-
change employees between the dock and the coldroom. At
the bargaining session on May 10, the Employer gave Moon
a letter signed by Green, general manager, stating that the
Employer would give each employee represented by the
Union a bonus of $350 if a contract was agreed to and
ratified by June 25. Moon pointed out that the Union could
not meet that deadline because its regular meeting was
scheduled for June 27, at which time any company proposal
would be voted on in the normal fashion. Moon also said
that he would not advise the union membership to throw
$350 away, but neither would he commit himself at that
point to recommend acceptance of such an offer, but would
instead remain neutral and let the membership decide.'
By June 23, the parties had agreed on some minor mat-
ters, but "economics" had not been discussed. At the meet-
ing that day, Pelton stated that he was not ready to talk
economics and asked if Moon would like a "full, final and
complete" proposal from the Company. Moon replied that
he would and that he would present it to the membership.
On June 24, the Employer presented the Union with a pro-
posal for settlement which contained across-the-board wage
increases in each year of a 3-year contract; an additional
paid holiday; the $350 bonus, provided the offer was ac-
cepted and ratified no later than midnight, June 27; im-
proved hospitilization and medical insurance coverage; and
which made it clear that the Employer was withdrawing its
demands regarding interchange of employees and employee
days off on a rotating basis.
After some debate between Pelton and Moon about
whether Pelton's offer was better economically than a con-
tract which the Union had recently negotiated with Carna-
tion Milk Company, a local competitor of the Employer,
Moon agreed to present the proposal to the membership
without recommendation. On Sunday, June 27, the Union s
membership having voted on the proposal and rejected it
unanimously, Moon telephoned Pelton and gave him 'the
result. Pelton indicated that he was still willing to meet that
day for additional discussions, but Moon was unable,,to
arrange a meeting.
On July 1, 1971, the-.Employer canceled all insurance
programs covering the employees in the unit, having previ-
ously notified them on June 28 that such action would be
taken.
As indicated earlier, the parties met on July 9 and 11.
Although Pelton had had some inquiries from the Federal
Mediation and Conciliation Service about the situation and
8 Aside from the bonus, the Employer had made no economic offer at this
time, as that phrase is commonly understood . It had nothing on the table in
regard to wages, and it had not yet agreed to improve its insurance plans.
BORDEN , INC. 1173
1
Youell, the Employer's regional labor relations manager,
and Dixie, the Union's attorney at the time, had also been
in touch with each other, it appears that Moon, having
learned that Pelton was in Houston on another matter, tele-
phoned him and asked for a meeting. Pelton was busy, but
agreed to meet on July 9 and again on July 11, if it were
possible to fit these meetings in with his scheduled appoint-
ments. At these meetings, neither side moved from its basic
position. The Union still wanted its original proposals
adopted on compulsory overtime, protection of unit work,
and fair treatment of employees, and the Employer stood on
its last offer, minus the-bonus. During the meeting on the
11th,9 Pelton made it clear to the Union that legally he did
not have to continue to meet and discuss the Union's de-
mands, because he felt that the Union was adamant and
that no meaningful bargaining was taking place. Although
he indicated personal unavailability for "clear through Au-
gust," he told Moon he would try to meet with him in case
of an "emergency."
On July 16 and August 5 and 6, the Union wrote to the
Employer for the resumption of contract negotiations. As a
result of this correspondence, meetings occurred on August
25, 26, and 27, but the position of the parties remained
essentially unchanged.
At the time of the trial of this case, there had been no
further meetings between the parties, although there had
been correspondence in which the Union requested meet-
ings and in which the Employer responded that it declined
to meet with the Union unless the Union "assured us you
were willing to engage in meaningful bargaining which in-
cluded your making us a definite succinct, and reasonable
offer or conterproposal in writing."
d. Union attempts to bargain with
persons other than Pelton and Youell
In prior years, the Employer hired a local labor relations
consultant and the Union negotiated agreements with him
and local representatives of the Emplo er. At the first meet-
ing between the parties in May 1971, Pelson explained that
the Employer had changed its policy, and that he as south-
ern area labor relations manager of the Employer would be
in charge of negotiations. He said Moon accepted this state-
ment and considered the change a more efficient method of
reaching an agreement.
The only evidence in the record to support the allegation
of the complaint that the Union refused to bargain and also
violated Section 8(b)(l)(B) of the Act by attempting to
"cause the Employer to select, as representatives for the
purposes of collective bargaining or the adjustment of griev-
ances, members of the Employer's local Houston, Texas,
management rather than George L. Pelton and Spencer M.
Youell who had been designated by the Employer for such
purposes," is contained in a remark Moon made to Pelton
on June 27, after he told him of the Union's rejection of the
Employer's last offer, and in Pelton's testimony that Moon
"implied" at a later date that he would no longer negotiate
with Pelton by stating, "Well, you represent the Borden
Company, but I'll negotiate with the Company, it doesn't
have to be with you.'
9 The Carnation Milk Company contract with the Union was mentioned
during this meeting and Pelton said he told the Union that the Employer
would accept that contract as a final settlement, but he warned the Union
that it must take all its provisions, including wages, which would mean a wage
reduction for employees. Moon said he turned the offer down because the
wages provided for in the Carnation contract were lower than those the
Employer was offering, although other benefits were higher.
When Moon told Pelton about the rejection of his offer,
Pelton said he would be willing to continue negotiations
that day, but Moon indicated that he was unable to arrange
a meeting and added that he would have "to get hold of the
local people on Monday." Pelton cautioned Moon against
contacting the Employer's local representatives because
only he, not they, had authority to agree to a settlement.
The record shows that Moon and the Employer's local
representatives have corresponded with each other about
their bargaining and contractual relations and that arrange-
ments for meetings have been perfected by them. It is also
clear that the Employer's Houston managers are not mere
errand boys, because Bryant not only participates in bar-
gaining, but he said that he and Green, his superior, share
with Youell and Pelton the responsibility for "calling the
shots" in negotiations. Moreover, Pelton made it clear to
Moon many .times that he was a busy man operating on a
very "tight schedule." The comments which Moon made to
Pelton about whom he would meet with are ambiguous
enough on their face. Therefore, in the context I have de-
scribed, and because he never said he would not bargain
with Pelton, or only bargain with local representatives, and
because there is no evidence that he ever tried to implement
the "implication" which Pelton sensed in his remarks, but
did, as a matter of fact, continue to meet with Pelton and
to insist that Pelton meet with him, I find both of his re-
marks, which Pelton described with not too much clarity,
too equivocal to support a finding in support of the allega-
tions of the complaint.
B. Analysis and Concluding Findings
The General Counsel's and the Employer 's contentions
that the Union demonstrated its desire to frustrate collective
bargaining in order to avoid reaching an agreement are
based in part on the Union's cancellation of certain bargain-
ing sessions scheduled in early May, and on two remarks
Moon , the Union 's principal negotiator , made to Pelton, the
Employer's representative , supposedly indicating his inten-
tion to avoid bargaining with the Employer 's chosen repre-
sentative . I have found above , however, that viewed either
separately or in connection with anything else, there is in-
sufficient evidence in both of those areas to justify the infer-
ence that the Union was so motivated. All that is really left
for examination , therefore , as far as the allegations of the
complaint and the statements of the General Counsel and
the Employer at the hearing and in their briefs reveal, is the
Union's unyielding insistence on its proposals re garding
compulsory overtime , bargaining unit work , and "human
dignity," as reflected in the Employer 's conduct at the bar-
gaining table.
It is not for the Board to pass on the reasonableness of
the Union's proposals from an economic position , although
their feasibility might bear on the allegation of "bad faith,"
that is to say, no intention to agree at all and, in that sense,
they could justifiably be examined . General Counsel does
not contend that the Union's proposals, to which the Em-
ployer would , in Pelton's own words , "never agree," were
not mandatory subjects for collective bargaining . Haying
examined these proposals in the light of Moon's and
Bryant's testimony and in connection with the proposals
and conduct of both sides to the dispute , I find nothing in
them to warrant the conclusion that they were specious and
not part of a legitimate bargaining strategy , but put forward
only for the purpose of thwarting agreement.
First of all, preservation of unit work is a legitimate union
goal on its face , and its attainment through financial penal-
ties when the agreement is violated is equally valid , particu-
1174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
larly when the sanctions were proposed by the Union after
the Employer made a counterproposal, in response to the
Union's original demand that nonunit employees do no
work under any conditions, which would permit supervisors
and other nonunit persons to work in the unit under certain
circumstances: Similarly, the Union's demand that the Em-
ployer schedule enough employees on all shifts so that no
employee in the unit would not have to work overtime ex-
cept in emergencies might, like the unit work restriction,
place a financial burden on the Employer, but it is obviously
in the area of legitimate union concern, and Moon testified
credibly that it and the preservation of work issue were
founded on longstanding irritants. Compulsory: overtime,
Moon also explained, was related to the Union's "human
dignity" proposal, for employees had complained in the
past about being notified only minutes.before shift change
that they must work overtime. Employer. negotiator Pelton
agreed that this was an unfair practice if it occurred, and he
was willing to assure Moon that supervisors would act rea-
sonably in notifying employees that they were required to
work overtime, but he was unwilling to incorporate his as-
surances in a written agreement.
The record is not completely clear that the Union insisted
to the end on a clause which would suspend the no-strike
clause in the agreement if the Employer agreed to its pro-
posals on unit work, compulsory overtime, and unfair treat-
ment of employees and thereafter breached the agree-
ment,10 but even if it did, such provisions are not unknown
and they appear to be legitimate devices to buttress an
agreement, and, in any case, they are not suspect on their
face in a context where the Employer has indicated that it
will "never" accept the proposed basic restriction on its
operations, even without the suspension of the no-strike
clause. I find that by such insistence, even if this particular
employer processes a perishable product as the General
Counsel notes, the Respondent-Union did not evidence an
intention to avoid reaching an agreement with the Employ-
er.
The General Counsel and the Employer point out that the
Employer had two demands, both important to it, which it
abandoned on June 24 in order to facilitate reaching a final
settlement of the contract, but that the Union never aban-
doned its demands in the areas we have been discussing.
This contract, it is argued, shows such unreasonableness on
the Union's part, particularly when the Employer proposed
as part of its final offer to pay each employee a bonus of
$350 if the contract were ratified quickly, as to amount to
"unconscionable" conduct revealing a hidden motive. This
argument overlooks a number of things. It ignores the fact
that the Employer's June 24 "full, final and complete" offer,
as Pelton described it, was its first offer in the monetary
field, for up to that point, it, like the Union, had made no
important bargaining concessions, and in addition, al-
though I do not suggest it, the Union might have reasonably
believed that the bonus was a bargaining "gimmick ' " as
Moon described it, and have given that gift horse a hard
look in the mouth in rejecting the Employer's package for
settlement. In the second place, although the Union main-
tained its position on its three proposals thereafter, the con-
trast with the Employer's posture is not as sharp as it is
argued to be, for on July 1, after the Union turned down the
Employer's first offer in the economic field, the Employer
canceled all employee insurance benefits, an act which I
later find to be an unfair labor practice, and it also withdrew
its bonus offer. These actions as much as anything else
could have hardened the Union's position, for in subsequent
10 The Union's counterproposal of June 9 does not contain such a provi-
sion, although it does contain a financial penalty clause.
sessions it was striving to have those insurance benefits
restored. In any event, collective bargaining had so deterio-
rated after June 24 that little is gained by comparing the
Union's position after that date with its earlier stand on
issues or with the Employer's position at any time. Finally,
in this area, even if the Union were adamant in its demands
throughout, I would not find that a significant sign of an
improper objective in the context of the entire case. Condi-
tions of employment had been fairly well established, be-
cause this was not the first labor agreement between the
parties, and so it is understandable that there would be less
movement in bargaining, because there were fewer matters
on the table for discussion.
Not only is it not the fact that "the pattern of Respon-
dent-Union's action [is] quite apparent, as General Coun-
sel argues, but the theory that the Union never intended to
reach an agreement starts out limping and breaks down
quickly. No one ever convincingly explained why the Union
would not want a contract at all, and the suggestion that the
Union wanted bargaining to fail so it could bargain with
local representatives of the Employer as it had in the past
is unreal, unsupported by the record and completely conjec-
tural, as well as inconsistent with what actually happened,
for even after bargaining collapsed in July, the Union con-
tinued to insist that Pelton, the Employer's southern area
labor relations manager, meet with it. Moon, the Union's
chief negotiator, testified that his objective in negotiations
with the Employer was no different than with any other
employer, that is, improvement in wages, hours, and work-
ing conditions of employees, and that he had no other pur-
pose in mind. I found his testimony logical and realistic, and
I credit it.
I find and conclude, therefore, that Respondent-Union
did not violate Section 8(b)(3) and 8(b)(1)(B) of the Act, as
alleged.
C. The Employer's Alleged Violation of
Section 8(a)(5) of the Act
Respondent-Employer's answer, as amended at the hear-
ing, admitted that on June 28, 1971, it notified its unit
employees that their insurance programs were to be can-
celed on July 1, and that the insurance programs were in
fact canceled and employees told so upon their inquiries."
The Employer's cancellation of the plans was never dis-
cussed with the Union at any time. This is clear from
Pelton's testimony, for he testified that there was no discus-
sion of it in the meeting of June 24, at which the Employer
made its final offer, and on June 27, when Moon told him
that the employees had rejected the Employer's offer, he
merely told Moon that the insurance benefits would be
eliminated. Not only was there no prior discussion of the
subject, but the Employer was proposing instead to improve
the insurance programs and these proposed improvements
had been explained to the employees. 2
An employer who is under a statutory duty to bargain
with a representative of his employees may make no signifi-
cant changes in wages or working conditions without af-
fording the representatives a real opportunity to bargain
with respect to those matters.13 More specifically, unilateral
withdrawal or diminution of benefits, as we have here, frus-
11
There were four programs: Disability insurance ; weekly accident and
sickness and accidental death and dismemberment insurance ; group life
insurance ; group hospital, surgical comprehensive medical insurance.
12
Asked if there had been any discussion of cancellation with the Union,
Pelton replied that there had been none, for, "We just took it out ... "
u N.L.R.B. v. Katz, 369 U.S. 736, 747; N.L.R.B. v. Crompton-Highland
Mills, 337 U.S. 218.
BORDEN, INC.
trates the statutory policy and violates Section 8(a)(5) of the
Act. 14
The expired collective-bargaining contract contained no
provisions relating to employee insurance plans, but each
plan contained the following provision:
The Company may supplement, change, modify or dis-
continue the plan at any time such action is considered
necessary or advisable.
The expired contract also contained, in article 18, a man-
agement rights clause. Respondent-Employer contends that
the quoted provision in the insurance plans and the manage-
ment rights clause gave it a contractual right to cancel insur-
ance plans. I find no merit in these contentions. Although
the Union is the statutory representative of the employees
in an appropriate unit,15 it was not a party to any agreement
giving the Employer the right to deprive employees of any
of their insurance benefits at will, which benefits, of course,
are part of wages. I also find that the Union has engaged
in no conduct which could be considered a waiver of its
right to bargain collectively in this area. A union must clear-
ly and unmistakenly waive its right to bargain on mandato-
ry subjects before an employer has a right to make unilateral
changes. The management rights clause makes no reference
to insurance plans at all and I find, therefore, that the Union
has not expressly or even impliedly, by virtue of the provi-
sion in the plans themselves, waived its statutory right to
bargain about such an important issue as insured bene-
fits. 6
The Employer further contends that since the expired
contract had a grievance and arbitration procedure, the
Board should withhold action in this case under the policy
of the Board recently announced in Collyer Insulated
Wire 17 until the Union exhausts the grievance and arbitra-
tion procedures in the old agreement. Assuming that the
Employer's action in canceling insurance after the old con-
tract expired is still subject to the grievance provisions of
that agreement, and assuming that the cancellation is in-
cluded in the definition of a grievance in the agreement as
a "dispute involving an interpretation or application of the
provisions of the agreement, since I have found no provi-
sion in the agreement which permitted the Employer to do
what it did, and assuming that the time limitations in the
agreement for filing of grievances no longer apply-all mat-
ters which are very unclear-I find that I am precluded
from recommending that the Board stay its hand by the very
statement in Collyer that:
where the contract clearly provides for grievance and
arbitration machinery, where the unilateral action tak-
14 N.L.R.B. v. Katz, supra, 369 U.S. at 743, 744; N.L.R.B. v. Scam Instru-
ment Corp., 394 F.2d 884 (C.A. 7); N.L.R.B. v. K-D Mfg. Co., 419 F.2d 467
(C.A. 5); Local 155 of the International Molders Allied Workers Union, AFL-
CIO v. N.L.R.B., 442 F.2d 742 (C.A.D.C.); Leeds & Northrup Co. v. N.L.R.B.,
391 F.2d 874 (C.A. 3); Sioux City Bottling Works, 156 NLRB 379, 384-385;
Central Illinois Public Service Company, 139 NLRB 1407, 1415-17; Newberry
Equipment Company, Inc., 157 NLRB 1527, 1528, 1536, enforcement denied
401 F.2d 604 (C.A. 8); Wisconsin Southern Gas Company, Inc., 173 NLRB
480.
15 The Employer's answer admitted the allegations of the complaint to that
effect. The appropriate unit is: All production and service employees at the
Employer's Houston, Texas, milk plant, excluding all clerical employees
(sales , truck, office and main office), engineers, maintenance employees,
truckdrivers, laboratory employees, guards, checkers and order writers and
all other supervisory employees as defined in the Act.
16 Leeds & Northrup Company v. N.L.R.B. 391 F.2d 874, 878-879; (C.A. 3),
Puerto Rico Telephone Company, 149 950, 963-964. In Leeds & Northrup, an
employee handbook limited the duration of an employee profit-sharing plan
to yearly periods, but no implied agreement to allow the Employer to unilat-
erall y alter the plan was found.
17 192 NLRB No. 150.
1175
en is not designed to undermine the union and is not
patently erroneous but rather is based on a substantial
claim of contractual privilege, and it appears that the
arbitral interpretation of the contract will resolve both-
the unfair labor practice issue and the contract inter-
pretation issue in a manner compatible with the pur-
poses of the Act, then the Board should defer to the
arbitration clause conceived by the parties.18
Aside from the problems that I have already mentioned, I
cannot say that the Employer's action was not "patently
erroneous or that the arbitrator's "interpretation of the
contract will resolve both the unfair labor practice issue and
the contract interpretation issue in a manner compatible
with the purposes of the Act." Moreover, the dispute in
Collyer involved an intricate, technical kind of issue involv-
ing an interpretation of contract language covering prob-
lems peculiar to the employer involved, and the Board
thought such disputes should be decided by "arbitrators
with special skill and experience in deciding matters arising
under established bargaining relationships ... 1I But this
is clearly not the case here, for the issue is radically different
and of a kind that the Board is especially equipped to han-
dle, particularly since it arose during collective bargaining
during which both sides are alleged to have fallen short in
their obligations to bargain collectively, and which, there-
fore, requires reference to the total dispute in the light of
accepted principles under the Act.
The Employer's final contention is that its cancellation of
insurance was a proper economic weapon because of the
nature of the Employer's business and the Union's unlawful
bargaining tactics. It is of course true that milk is a perisha-
ble product, but I have found that the Union's bargaining
program was not unlawful, and it is not at all clear that
Respondent feared a sudden strike, for when Pelton com-
mented to Moon on June 27 that he assumed a strike would
take place since the Union had rejected the Employer's final
offer, Moon negatived that thought by telling Pelton not to
"put words in his mouth," and subsequently he advised
Pelton that the Union would not call a strike at a moment's
notice. Moreover, there had been no strike at the time of the
hearing in this case, even though the Employer canceled
existing benefits. In any case, however, I find that the nature
of the Employer's business and any honest belief it had that
the Union might call a strike would not permit the Employ-
er to take the offensive action it did at least without first
bargaining with the Union. Even if an employer is acting in
good faith and motivated only by legitimate business con-
siderations, it is obligated to bargain with the representative
of its employees before making the kind of changes the
Employer made in this case 20
I find no merit in the Employer's contention that the
Board's decisions in LaClede Gas Company, 187 NLRB No.
32, and Stockley Van Camp, Inc., 186 NLRB No. 64, mean
that an employer may reduce the wages of its employees by
eliminating their insurance benefits without bargaining.
Both of the cases cited involved lockouts of all or a ppart of
the emplo er's staff in order to bring pressure on the Union
to settle the dispute on the employer s terms, and they de-
pend for their validity on the holding of the Supreme Court
in the American Ship Building Company 21 case , which also
involved a lockout of unit employees after an impasse in
negotiations had been reached. There is no case which holds
that an employer may in an American Ship Building type of
is Jos. Schlitz Brewing Company, 149 NLRB 1561, quoted and relied on by
the majority in Collyer.
19 Collyer, supra.
2U N.L.R.B. v. Katz, 369 U.S. 736, 743, 747, 748.
21 American Ship Building Co. v. N.L.R.B., 380 U.S. 300.
1176 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
situation cancel employee insurance plans, take away their
holidays or vacations or sick leave , or cut their wages in
order to bring economic pressure on them to accept the
employer's offer or to abandon their own demands , but, in
fact , what existing law there is, is to the contrary. In Local
155,22 Molders, the court enforced the Board 's order based
on its finding that although the employer's lockout of its
employees was not a violation of the Act under the Ameri-
can Ship Building doctrine , its withdrawal of certain employ-
ee benefits in order to bring pressure on them to accept the
employer's contract proposals or o on strike was al viola-
tion of Section 8(a)(1), (y3), and ( of the Act.
The Employer does not cite American Ship Building as
authority for its action , although , as indicated , the cases it
does cite are based on the doctrine first enunciated in that
case, but implicit in its contentions is the argument that
since lockouts designed to break impasses are legitimate
economic weapons, something "less," like withdrawal of
benefits for the same end, are also permissible . But as I have
intimated earlier, a reduction in benefits may be "more"
than the policies of the Act permits, because its use as a
tactic may make it more difficult to settle the dispute be-
cause of the atmosphere of hostility it creates . Another dif-
ference between the lockout and the kind of weapon the
Employer used here is that the lockout may actually be
"less" of a weapon than the cancellation of insurance bene-
fits . In a lockout the employees lose their wages, but the
employer loses their services, and his business suffers. If
only benefits are withdrawn , however, only the employees
suffer, and the employer gets a windfall until the dispute is
settled . All that I am saying here is that we should not be
quick to lean toward approving another piece of untested
economic hardware by the use of some facile formula re-
garding the relationship of the whole to its parts 23
In any case , I do not read American Ship Building as
having carved out an exception to the statutory policy, long
recognized and implemented by the courts, that employees
have the right to participate , through their bargaining repre-
sentative in decisions concerning their wages and other
benefits. 4
I find and conclude that , by canceling its employee insur-
ance benefit programs without prior bargaining with or con-
sultation with the Union, Respondent-Employer violated
Section 8 (a)(5) and (1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
Respondent-Employer's activities as set forth in section
III, above, occurring in connection with its operations de-
scribed in section I, above, have a close, intimate, and sub-
stantial relation to trade, traffic, and commerce among the
several States and tend to lead to labor disputes burdening
and obstructing commerce and the free flow of commerce.
22
Local 155 of the International Molders and Allied Workers Union, AFL-
CIO v. N.L.R.B.,442 F.2d 742, (C.A.D.C.), enfg. United States Pipe&Foundry
Co., 180 NLRB 325.
23 See Inland Trucking Company v. N.L.R.B.,440 F.2d 562 (C.A. 7) enfg.
Inland Trucking Co. d/b/a Oshkosh Ready-Mix Co., 179 NLRB 35. In that
case, which involved an alleged violation of Sec. 8(a)(1) and (3) of the Act,
not a refusal to bargain in violation of 8(a)(5) as here, the employers locked
out their employees, but continued to operate with replacements. The argu-
ment was made that this tactic was merely a "logical extension" of the
American Ship principle, but the court thought the "suggested symmetry" of
allowing such a device in an offensive as well as defensive lockout "decep-
tive."
24N.L.R.B. v. Katz, and other cases cited , supra., In 13.
V. THE REMEDY
In addition to the usual cease-and-desist order, as a reme-
dy for Respondent-Employer's unfair labor practices, I
shall recommend that the Employer restore the status quo
which existed at the time of its unlawful actions by reinsti-
tuting all four insurance programs which it canceled, retro-
active to July 1, 1971, and by making whole any employee
(with interest at 6 percent per annum as in Isis Plumbing &
Heating Co., 138 NLRB 716) for any premiums paid by him
or for him to purchase comparable insurance and by also
making him whole for any insurance claims arising during
the period of the canceled insurance. If the employee is no
longer living, reimbursement shall be to his legal representa-
tive.
Upon the foregoing findings of fact and upon the entire
record in this consolidated proceeding, I make the follow-
ing:
CONCLUSIONS OF LAW
1. Respondent-Employer is engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization as defined in Section
2(5) of the Act.
3. The Union at all times material herein was the exclu-
sive bargaining representative of employees in the appropri-
ate unit found herein.
4. By canceling all of the insurance programs covering its
unit employees on July 1, 1971, Respondent-Employer vio-
lated Section 8(a)(5) and (1) of the Act.
5. Respondent-Union did not violate Section 8(b)(3) and
8(b)(1)(B) of the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and ursuant to Section 1%1c) 'Of the
Act, I hereby issue the following recommended:2
ORDER
Respondent-Employer, its officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Unilaterally and without bargaining with the Union,
canceling any or all of its employee group insurance pro-
grams or changing any wages, hours, or working conditions
of employees.
(b) In any other like or related manner interfering with,
restraining, or coercing its employees in the exercise of their
rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action designed to effec-
tuate the policies of the Act:
(a) Immediately reinstate the insurance programs it can-
celed on July 1, 1971, retroactive to that date, and make
whole all employees or their legal representatives for any
losses suffered by reason of the elimination of said pro-
grams, in the manner set forth in "The Remedy" section of
this Decision.
(b) Preserve and, upon request, make available to the
Board and its agents all employee records and other records
relating to the discontinued insurance plans which are nec-
essary to determine the sums to be paid in accordance with
"The Remedy" section of this Decision.
25 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.
BORDEN , INC. 1177
(c)Post at its Houston, Texas, plant, copies of the at-
tached marked "Appendix."26 Copies of said notice, on
forms provided by the Regional Director for Region 23,
shall, after being duly signed by Respondent, be posted
immediately upon receipt thereof, in conspicuous places,
including all places where notices to employees are custom-
arily posted, and be maintained by it for 60 consecutive
days. Reasonable steps shall be taken to insure that said
notices are not altered, defaced, or covered by any other
material.
(d) Notify said Regional Director, in writing, within 20
days of this Order, what steps Respondent-Employer has
taken to comply herewith.27
IT IS ALSO ORDERED that the complaint against Respondent-
Union in Case 23-CB-1200 is dismissed.
WE WILL NOT cancel your insurance programs or make
any changes in your wages, hours, or other conditions
of employment without bargaining with your repre-
sentative, Sales Drivers, Deliverymen, Warehousemen
& Helpers, Local 949.
WE WILL immediately put back into effect the insur-
ance programs we canceled on July 1, 1971, and pay
you for any losses you had by reason of our cancella-
tion of your insurance coverage.
WE WILL not in any other like or related manner
interfere with, restrain, or coerce employees in their
right to bargain collectively through the above Union.
BORDEN, INC., DAIRY & SERVICES DIVI-
SION
(Employer)
26 In the event that the Board's 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 be changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
Enforcing an Order of the National Labor Relations Board."
27 In the event that this recommended Order is adopted by the Board after
exceptions have been filed, this provision shall be modified to read : "Notify
the Regional Director for Region 23, in writing , within 20 days from the date
of this Order, what steps the Respondent has taken to comply herewith."
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency Of The United States Government
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered , defaced,
or covered by any other material . Any questions concerning
this notice or compliance with its provisions may be direct-
ed to the Board 's Office , Dallas-Brazos Building, 1125 Bra-
zos Street , Houston , Texas 77002, Telephone 713-226-4296.