C-B Buick, Inc.

National Labor Relations Board - Board Decisions

Sep 17, 1973

206 N.L.R.B. 6 (N.L.R.B. 1973)

6 'DECISIONS OF NATIONAL LABOR RELATIONS BOARD
C-B Buick, Inc. and International Association of Ma-
chinists and Aerospace Workers, District Lodge No.
63, AFL-CIO. Case 6,,-CA-6244
September 17, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING
AND PENELLO
On January 30, 1973, Administrative Law Judge
John F. Funke issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed
limited exceptions and a supporting brief. The Re-
spondent filed no exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the limited exceptions and
brief and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge, as
consistent herewith, and to adopt his recommended
Order, as modified herein.
The Administrative Law Judge found that the Re-
spondent violated Section 8(a)(5) of the Act when, a
few days prior to commencement, of negotiations for
a new contract, its president, Solow, called a meeting
of the unit employees and told them in effect that if
the Union's demands were too high the Respondent
would go out of business, and later, at another meet-
ing with the employees occurring between the, two
bargaining sessions that took place, its supervisor,
Williams, told them they would be better off dealing
directly with Respondent than through the Union.
The Administrative Law Judge rightly concluded that
by this conduct the Respondent was appealing direct-
ly to the unit employees in an effort to circumvent its
statutory responsibility to deal with the Union, their
certified bargaining representative.' Notwithstanding
these findings, the Administrative Law Judge failed to
find that Respondent also violated Section 8(a)(5)
when it declined to furnish economic data to substan-
tiate its plea of inability to meet the Union's bargain-
ing- demands. The Administrative Law Judge
concluded that from "the totality of conduct" of the
parties, the Respondent's refusal to furnish this infor-
mation did not constitute bad faith, noting that the
Respondent had retracted its claim of inability to pay
and had given the Union a statement of its pretax
profits.
1 Respondent did not file exceptions to any of these conclusions or the
The General Counsel excepts to the Administrative
Law Judge's failure to find that the Respondent vio-
' lated the Act by refusing to provide the Union with
financial data as the latter requested. He contends
that the Respondent pleaded financial inability
throughout the course of negotiations, did not really
retract that plea, and demonstrated bad faith when it
refused to furnish the information requested, particu-
larly in light of the bad faith manifested by Respon-
dent in attempting to undermine the Union by dealing
directly with the employees. In this last regard, the
General Counsel contends that the Administrative
Law Judge erred in failing to consider the
Respondent's declination of financial information in
the context of this other related unfair labor practice
conduct in which the Respondent was found to have
engaged. We find merit in these contentions.
The parties' first contract expired on June 30, 1972.
On June 20, 1972, the Union wrote the Respondent,
requesting bargaining on 12 specific items and other-
wise on such items as might arise during the course of
negotiations for a new agreement. The first bargain-
ing session was scheduled for July 19, 1972.2 Four
days prior to that session, President Solow conducted
the meeting with the employees described above, at
which he held out the likelihood of the business fold-
ing if the Union's demands were excessively high.
At the beginning of the July 19 bargaining session,
the Union's negotiators informed Respondent's rep-
resentatives that they were aware of Solow's talk with
the men on July 15. Thereafter, a discussion of the
Union's proposals ensued. According to the testimo-
ny of Theodore Bold, the Union's business represen-
tative, the Respondent's position, as continually
stated throughout the session, was that it could not
afford to meet the Union's proposals. Bold therefore
advised Respondent's representatives that if they
were "pleading poverty" the Union should have an
opportunity to examine the Respondent's profit and
loss statement. D. Robert Williams, Respondent's
vice president, allegedly replied that the Union would
never see such statements. Nevertheless, the Respon-
dent did offer to increase benefits beyond those con-
tained in the old agreement; and the Union appears
to have refused to discuss the Respondent's counter-
offers because it viewed its proposals as a package
deal, to be accepted in toto, suggesting that the men
might be better off "negotiating from the street " The
meeting ended without any progress toward a settle-
ment.
The second and last bargaining session was held 2
weeks later on August 2.1 Discussion centered on the
findings of fact upon which they rest.
2 All events occurred in 1972.
3 In the meantime, Williams had met with the employees and suggested
206 NLRB No. 10
C-B BUICK, INC. 7
Union's original proposals. Again the Respondent's
representatives rejected these proposals, asserting that
they could not afford the increased benefits demand-
ed. The Union's business agent again demanded to
see the Company's books. As before, this request was
denied. When the Union's business agent charged the
company representatives with pleading poverty, Wil-
liams, speaking for the Respondent, retracted the
statement that the Company could not afford to pay
all the Union demanded but stated that it was not
going to pay. Notwithstanding, shortly before termi-
nation of this bargaining session, the Respondent's
president orally furnished Bold with a figure purport-
edly representing the Respondent's pretax profits for
the preceding year (Bold had no recollection of this).
The meeting ended, however, after the Respondent
refused the Union's final demand to see the
Company's books before negotiating further.
In agreement with the General Counsel, we deem
relevant to a determination, as to whether the Re-
spondent satisfied its statutory obligation to bargain
by refusing to furnish the requested financial data, the
unlawful tactics applied by it outside the bargaining
room to undermine the position of the Union therein.
The principal facts in this case show a refusal to bar-
gain by Respondent's (1) refusing to furnish to the
Union financial information to support its claim of
inability to meet the contractual demands, while (2) at
the same time dealing directly with its employees,
impressing upon them that their continued employ-
ment likely would be affected adversely by the
Union's demands,4 and that they would do better for
themselves as employees without the Union repre-
senting them. In our view, the two aspects of this
conduct are intertwined and constitute a violation of
Section 8(a)(5) and (1) of the Act.
In assessing the Respondent's refusal to provide the
requested financial information, the Administrative
Law Judge utterly failed to consider Respondent's
concurrent conduct of trying to subvert the Union's
position as its employees' bargaining agent. And while
our dissenting colleague does not totally ignore such
conduct, he accords little weight to it in considering
the Respondent's statutory obligation to come forth
with information to substantiate its claim of inability
to pay more than it offered, which was far below the
cost'of the Union's demands. We do not understand
how Respondent's refusal to disclose its financial pic-
ture in any meaningful way can be divorced from the
whole pattern of Respondent's conduct during these
negotiations. As the Administrative Law Judge him-
self recognized, in measuring good faith, it is the total-
ity of conduct that demonstrates an employer's accep-
tance or rejection of the bargaining process. Surely, as
basic to that process and as much a part of it as an
employer's obligation to refrain from bypassing the
collective-bargaining representative is the obligation
by the same employer to produce upon request the
financial data required to achieve fruitful bargaining
once it makes its economic distress or difficulties
part of its bargaining posture .5 Here, whether
Respondent's claim of inability to pay was one of
potential poverty if it acceded to the Union's de-
mands or that it could not meet competition or
achieve sufficient profit if it did so, its refusal to meet
that latter obligation was, in the context of
Respondent's whole approach, demonstrative of a
failure to bargain in good faith .6
Viewed in this perspective, the Respondent's naked
claim that it could not afford to meet the initial bar-
gaining demands made by the Union rings hollow and
hardly allows for meaningful discussion of the eco-
nomic issues involved. Without disclosure of
Respondent's financial status as represented in profit
and-loss figures, the Union was not in any position to
appraise the validity of Respondent's economic
claims or modify its economic proposals., Absent the
Respondent's supplying substantiating figures in sup-
port of its claims, we would not expect or require the
Union to revise its proposals downward as both the
Administrative Law Judge and our dissenting col-
league seem to imply it should have done. Unlike
them, we find that the breakdown in negotiations was
not so much due to intransigence on the part of the
Union in refusing to budge from its demands as it was
due to the Respondent's adamancy in refusing to fur-
nish the requested financial data, thereby preventing
the give-and-take one expects in the bargaining pro-
cess.
Neither are we satisfied that the Respondent's sub-
sequent abandonment of its claimed inability to pay,
long after bargaining negotiations had begun, was
anything more than an exercise in semantics on its
part in an effort to placate the Union and divert that
party from further seeking the financial information
it desired. The plain fact is that after changing its
stance in this regard, the Respondent continued to
resist providing the information requested, while per-
sisting that it could not meet the Union's demands.
Indeed, recognizing, themselves, that a belated retrac-
tion of Respondent's claimed inability to pay may not
have extinguished its responsibility to furnish infor-
mation, the Respondent's negotiators orally gave their
union counterparts a figure which purportedly repre-
s N.LR.B. v. Truitt Manufacturing Co., 351 U.S. 149 (1956).
they deal directly with the Respondent and forget the Union. 6 See Globe Gear Company, 189 NLRB 422; Stanley Building Specialties
At the time of Slows statements to this effect to the employees , Respon- Co., a subsidiary of The Stanley Works, 166 NLRB 984 ; Peerless Distributing
dent was fully aware of the Union's demands. Company, 144 NLRB 1510.
8 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sented the Respondent's pretax profit for the preced-
ing year. We fail to see how this limited information-
which the Union could not even remember receiv-
ing-could have encouraged meaningful negotiations
on the economic terms of a new contract.
How that figure could have helped the Union to
comprehend the Respondent's financial plight is be-
yond us. Yet our dissenting colleague, like the Admin-
istrative Law Judge, seems to hold that this act shows
the Respondent's good faith in that the figure went a
long ,way towards establishing that the Respondent
met its obligation to produce the requested informa-
tion. We cannot agree. In the circumstances sur-
rounding the ' negotiations, the Respondent's
withdrawal of its claim of inability to pay and its bare
assertion of a pretax profit figure amounted to noth-
ing more than a clumsy effort to shed a statutory
responsibility to substantiate a bargaining position it
claims to have taken in good faith, namely, that finan-
cially it could not meet the Union's contractual de-
mands.
Nor does the fact that the Respondent presented an
economic counteroffer to the Union's demands re-
lease the Respondent from its obligation to provide
the requested information. As the record shows, Re-
spondent had claimed an inability to pay more than
it was offering and categorically stated it could not
afford the Union's contractual demands. In effect,
Respondent was taking the position that an economic
package beyond that proffered by it was financially
impossible for it to grant. The Board has long held
that the principles underlying N.L.R.B. v. Truitt Man-
ufacturing Co., supra, apply to the situation where an
employer expresses the view that a wage increase
could lead to impoverishment, as well as the situation
where it claims that present impoverishment pre-
cludes such an increase.? In both situations, the refus-
al upon request to substantiate the employer's
position is in derogation of its statutory obligation.
In sum, therefore, we find that the resolution of
major economic issues generated by the Union's de-
mands and the Respondent's counteroffers was pre-
cluded by the Respondent's refusal to furnish
pertinent financial data requested by the Union.
While such conduct standing alone would seem to
provide ground for finding a violation of Section
8(a)(5),8 in the context of the other unfair labor prac-
tices that were designed to dissipate support for the
Union among the employees, there can, in our opin-
i Cincinnati Cordage and Paper Company, 141 NLRB 72, 77.
s Contrary to the opinion of our dissenting colleague , we do not find a
violation in this regard merely because the Respondent committed other
unfair labor practices at the same time. Like Chairman Miller, we have
considered the Respondent 's refusal to furnish information to substantiate
its plea of impoverishment on its own merits, but unlike him, for the reasons
described above, we find Respondent's conduct wanting in that regard.
ion, be no question that such a finding is required.
Accordingly, we reverse the Administrative Law
Judge's finding to the contrary.
AMENDED CONCLUSION OF LAW
Substitute the following for the Administrative Law
Judge's Conclusion of Law 4:
"4. By refusing to furnish the Union with the finan-
cial data it requested on July 19 and August 2, 1972,
the Respondent on and after July 19, 1972, refused to
bargain with the Union and has thereby engaged in
and is engaging in unlawful conduct within the mean-
ing 'of Section 8(a)(5) of the Act."
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 Administrative Law Judge , as herein
modified, and hereby orders that C-B Buick, Inc.,
Pittsburgh, Pennsylvania, its officers, agents, succes-
sors , and assigns, shall take the action set forth in the
said recommended Order, as modified below:
1. Insert the following as paragraph 2(b) of the
Administrative Law Judge's recommended Order,
and reletter the present paragraphs 2(b) and (c) as 2(c)
and (d), respectively:
"(b) Furnish the Union, on request and within a
reasonable time, that information sought by the
Union relating to the Respondent's claimed inability
to pay the wage increases and other benefits requested
by the Union."
2. Substitute the attached notice for that of the
Administrative Law Judge.
CHAIRMAN MILLER, dissenting in part:
While I agree with my colleagues that the Respon-
dent ran afoul of the Act by meeting with employees
and thereby attempting to circumvent its obligation to
deal directly with the Union, I do not agree that the
Respondent engaged in unlawful conduct when it re-
fused to open its books to the Union at the latter's
request. Indeed, like the Administrative Law Judge, I
am persuaded that the Union's own intransigence pre-
cipitated the halt in negotiations and that the contro-
versy over access to the Respondent's books merely
served to screen the Union's determination to force an
agreement based on its proposed contract demands.
Unlike my colleagues in the majority, I am unwill-
ing to accept the view that once a party has trans-
gressed its bargaining obligation in one respect, it
follows that it must be sinning whenever its conduct
in the course of performing other bargaining obliga-
C-B BUICK, INC. 9
tions is questioned. In my view, the fact that here the
Respondent unlawfully tried to deal directly with its
employees does not afortiori mean that it acted in bad
faith when it refused certain financial data to the
Union. The two aspects of Respondent's conduct,
contrary to the view of my colleagues, are not neces-
sarily connected. '
Although I have no real quarrel with their view that
Respondent's refusal to furnish the requested infor-
mation to the Union must be considered with the
found transgressions in mind , I do not believe, as they
seem to, that the mere existence of such transgressions
suffices to dispose of the remaining issue before us
unfavorably to Respondent. We still must determine
here whether the refusal complained of that the'Ad-
ministrative Law Judge found to be lawful is, by its
own nature and in the context of its immediate cir-
cumstances, i.e., the negotiating sessions, indicative of
a failure to meet a statutory obligation. If the
Respondent's refusal to produce the information was
justified because of the conditions under which .its
production was sought, then the lawfulness of that
refusal cannot -be converted to an illegality simply by
the existence of other conduct unfree of taint. In my
opinion, this is the import of the decision of the major-
ity. For the following reasons, I disassociate myself
from that view and the erroneous result that it
achieves in this case.
No one disputes the fact that , well in advance of the
first bargaining session , the Union presented the Re-
spondent with a list of bargaining demands which,
among other things , would have had the effect of
increasing substantially employees ' wages and fringe
benefits. For example, the Union's proposals included
a $1-per-hour-per-year increase for utility men, who
were receiving $2.05 an hour under the contract. At
the first bargaining session, the Respondent met the
Union 's proposal with respect to the wage increase for
utility men by offering to increase their hourly rate by
25, 15 , and 15 cents, respectively , over the term of a
3-year contract . The Respondent met the Union's re-
quest for one additional holiday by offering two addi-
tional half days, in order to avoid, what it asserted,
would require closing the shop for a 4-day period. The
Respondent also offered concessions on other mone-
tary items, but a lack of progress was apparent.
It is undisputed that the Union refused to -discuss
any of the Company's counteroffers , insisting that the
Union's proposals must be accepted in toto and
threatening to strike as an alternative . It was in this
context that the Respondent's assertion that it could
not "afford" to pay was met with the Union 's addi-
tional demand that it be allowed to inspect the
Respondent's books.
At the second and last bargaining session , discus-
sion again centered on the Respondent's proposals
with the Respondent again insisting that it could not
afford them .' Once more the Union's negotiators
asked for the Respondent 's books and again that re-
quest was denied . The union negotiators charged the
Respondent with pleading poverty which provoked
Williams to reply that he was retracting the statement
that the Respondent could not afford to pay but rath-
er that it was not going to pay the amounts demanded
in the Union's initial proposal.
My colleagues characterize the above retraction as
a ploy to detour the Union in its quest for the informa-
tion it sought and, further, as an unsuccessful attempt
by Respondent to give the appearance of meeting its
statutory duties . I see no justification for either con-
clusion . Respondent 's switch to a position that it
would not acquiesce in the Union's exorbitant de-
mands from a claim of inability to pay represents both
a significant departure in its bargaining posture, and
quite a difference in meaning . The Administrative
Law Judge correctly recognized this by treating the
changed position as a withdrawal of Respondent's
prior claim . Since that claim alone created the situa-
tion where the Union could conceivably justify its
request for the production of financial data , its re-
moval from the negotiations terminated any obliga-
tion the Respondent may have had to substantiate it.
Nor is there evidence of subsequent conduct by the
Respondent which could be deemed to be inconsis-
tent with that withdrawal, thus demonstrating that the
retraction was insincere and nothing more than a
ruse.
Indeed, what happened thereafter establishes the
opposite conclusion . Concomitant with this change in
approach, the Respondent provided the Union with
some idea of its financial situation by proffering its
pretax profits for the preceding year. That this was
done orally does not lessen the fact that the informa-
tion was provided; furthermore, it represented a con-
cession towards the direction that the Union up to
then had been unable to wring from the Respondent.
Yet, what was the response of the union negotiators?
They ignored it . Instead of directing inquiries towards
the Respondent to ascertain the relationship of this
figure in its total economic picture, such as, for exam-
ple, what percentage of gross sales the figure repre-
sented, the Union returned to the already worn re-
frain of "let's see your books" and, when that demand
was denied, summarily broke off further negotiations.
Under these circumstances, the rigidity demon-
strated by the Union, coupled with its apparent disin-
terest in pursuing negotiations from the point at which
the Company retreated from its original protestation
that it could not afford to pay everything that the
Union demanded, leads me to conclude that the de-
sire to gain access to the Respondent's books overrode
any desire on the part of the Union to reach agree-
10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
meat during the course of these negotiations except
on its initial terms. Consequently, it seems clear to me
that the Respondent did not bargain in bad faith by
denying the Union access to its books where, as here,
no demonstrable obligation to' do so had arisen.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the Unite. States Government
WE WILL, upon request, bargain collectively
and in good faith with International Association
of Machinists and Aerospace Workers, District
Lodge No. 63, AFL-CIO, with respect to wages,
rates of pay , hours, and other terms and condi-
tions of employment for our employees in the
following appropriate unit:
All service department and parts department
employees at our Pittsburgh, Pennsylvania,
dealership , excluding all office clerical em-
ployees , salesmen and guards , professional
employees and supervisors as defined in the
Act.
WE WILL furnish the Union, on request and
within a reasonable time, that information
sought by it relating to our claimed inability to
pay the wage increases and other benefits re-
quested by the Union.
WE WILL, if agreement is reached, sign a collec-
tive-bargaining contract with said Union cover-
ing all the terms of said agreement.
WE WILL NOT deal directly with our employees
concerning any contract proposals submitted by
the Union.
WE WILL NOT threaten our employees that the
Union's demands or a strike to enforce them will
force us to go out of business.
WE WILL NOT tell our employees that they
would be better off dealing with us through their
department supervisor rather than through the
Union.
Dated By
C-B BUICK, INC.
(Employer)
(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 compli-
ance with its provisions may be directed to the
Board's Office, 1536 Federal Building, 1000 Liberty
Avenue, Pittsburgh, Pennsylvania 15222, Telephone
412-644-2977.
DECISION
STATEMENT OF THE CASE
JOHN F. FuNKE, Administrative Law Judge: This proceed-
ing was brought before the National Labor Relations Board
upon:
1. A charge filed August 9,1972, by International Associ-
ation of Machinists and Aerospace Workers, District Lodge
No. 63,, AFL-CIO, herein the Machinists, against C-B
Buick, Inc., herein Buick, alleging Buick violated Section
8(a)(l) and (5) of the Act.
2. A complaint issued by the General Counsel on Sep-
tember 26, 1972, against Buick alleging Buick violated Sec-
tion 8(a)(1) and (5) of the Act.
3. An answer filed by Buick on October 6, 1972, denying
the commission of any unfair labor practices.
4. A hearing held before me on November 20, 1972, at
Pittsburgh, Pennsylvania.
5. A brief submitted by the General Counsel on Decem-
ber 26. 1972.
Upon' the entire record in this case and from my observa-
tion of the witnesses while testifying, I make the following:
FINDINGS
1. THE BUSINESS OF BUICK
Buick is a Pennsylvania corporation maintaining an auto-
mobile agency at Pittsburgh, Pennsylvania, where it is en-
gaged in retail sale and service of automobiles . During a
representative year Buick has sales exceeding $500,000 in
gross volume and purchases goods and materials from
places outside the Commonwealth of Pennsylvania valued
in excess of $50,000. Buick is engaged in commerce within
the meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Machinists is a labor organization within the mean-
ing of the Act.
III THE UNFAIR LABOR PRACTICES
A. The Issues
The issues presented by the pleadings were:
(a) Did Buick threaten to go out of business before it
would agree to the Machinists' bargaining proposals?
(b) Did Buick promise greater benefits to employees if
they would abandon support for the Machinists?
(c) Did Buick bypass the Machinists by negotiating di-
rectly with its employees?
C-B BUICK, INC. ' 11
(d) Did Buick fail to provide the Machinists with infor-
mation regarding its financial ability to meet its bargaining
demands after pleading inability, to pay?
B. The Evidence
1. Background
On February 10, 1971, the Machinists was certified as the
collective-bargaining representative of the employees of
Buick in a unit described in the complaint as follows:
All service department and parts department employ-
ees at Respondent's Pittsburgh, Pennsylvania, dealer-
ship, excluding all office clerical employees, salesmen
and guards, professional employees and supervisors as
defined in the Act.
The appropriateness of the unit is not in dispute.
Following the certification the parties reached agreement
on a collective-bargaining contract effective from May 1,
1971, until June 30, 1972. (G.C. Exh. 2) On June 20, 1972,1
the Machinists wrote Buick requesting negotiations on 12
specific requests and a catch-all for other items which might
arise during negotiations. These demands (G.C. Exh. 3)
were:
1. Discuss employees' classifications: New & Used
Car Reconditioner Assistant Parts Counterman. '
2. General wage increase for non-incentive employ-
ees-$ 1.00 per hour per year.
3. Incentive employees-Guarantee rate shall be
25¢ below one-half of the current customer labor rate.
4. Additional holiday: Day After Thanksgiving
a. Holiday pay shall be computed as follows: Av-
erage earnings or current guarantee rate, whichever
is greater.
5. Vacation improvements: Three (3) weeks after
Five (5) years. Four (4) weeks after Ten (10) years.
6. Full payment of Blue Cross and Blue Shield-
Improved hospitalization program.
7. Tool insurance-No minimum
8. Increased contribution to Pension Fund
9. Life Insurance-$10,000; A.D. & D.-$10,000;
Sick & Accident-$90 per week Benefits
10. Seven (7) day's sick leave per year.
11. Body work to be assigned by Service Manager.
12. Discussion regarding Parts Department.
13. WHATEVER ELSE MAY ARISE DURING NEGOTIATIONS!
2. The talk of President Solow
Following receipt of this letter and on or about July 15,
Charles L. Solow, president of Buick, called an after-hours
meeting of his service and parts department personnel at the
dealership. John Baran, shop steward for the department,
and Charles R. Mindser, substitute shop steward, testified
to the meeting.
According to Baran, Solow reviewed the Machinists pro-
posals and stated that Buick could not afford some of them,
referring in particular to a request that the utility men re-
ceive a $1-an-hour increase for each year of a 3-year con-
1 Unless otherwise noted all dates hereafter refer to 1972.
tract. Solow told them that General Motors was insisting the
Buick move to a bigger location and that it would provide
some of the expense but that Buick would need a 3-year
bargaining contract to qualify for a continuation of the
franchise. Solow referred to the termination of the franchise
as the deadline for bargaining negotiations a deadline about
6 weeks away. The alternative, according to Solow, was loss
of the franchise and the closing of the dealership. A strike
would also result in a closing of the dealership. Mindser
corroborated this testimony in substance.
Solow testified that he,called the meeting of January 15
not to negotiate a contract with his employees nor to discuss
the terms of the Machinists proposals as a basis for negotia-
tions but to advise the employees that Buick was trying to
work out a deal with General Motors and a mortgage com-
pany for a new location and a new franchise if it was eco-
nomically feasible.2 Solow told his employees, "I said, if we
couldn't stay in business, if the cost factor was too high, on
the new project, to the best of my knowledge, I didn't ask
for any real discussion on anything that we were discuss-
ing." Attaching meaning to this statement is not easy but as
I construe it Solow was telling them that if the Machinists
demands were too high the new project would not be feasi-
ble and Buick would go out of business and also testifying
that there was no real discussion of the Machinists propos-
als at this meeting.
3. The talk of William Jackson
John Baran testified that sometime after July 15 and prior
to August 2 the service and parts department employees
were addressed by William Jackson, their supervisor, at a
meeting called by him after hours in the body shop. The
substance of this talk was directed to problems in the de-
partment, particularly with regard to getting parts and also
to the union situation. According to Baran, Jackson told
them he had worked previously with Solow and had always
gotten whatever he wanted from him and that the men
would be better off dealing with Solow through him rather
than through a union.
Charles R. Mindser, who was also present at this meeting,
corroborated Baran's testimony. Jackson did not testify.
3. The first bargaining meeting
The first bargaining meeting was held on July 19 ,at the
office of Stanley C. Makoroff, counsel for Buick. Present
were Makoroff, Solow, and D. Robert Williams, vice presi-
dent of Buick, representing Buick and Theodore C. Bold,
business representative of the Machinists, and John Baran,
shop steward, for Machinists.
Bold testified that on the 19th he was advised by Baran
of Solow's talk with the men on the 15th, that he so told
Makoroff and suggested charges should be filed. Makoroff
told him it was a small business, that he saw no harm in the
talk but told him to go ahead and file. According to Bold,
discussion of the proposals then followed and Buick's conti-
nual response was that it could not afford the proposals.
Bold advised the Buick representatives that if they were
pleading poverty the Machinists should look at the profit
2 Baran testified that the problem of getting a new location was a matter
of general information among the employees.
12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and loss statement to which Williams replied they (the Ma-
chinists) would never see the statement. As to the issues
Bold stated they did discuss reclassification of two employ-
ees improperly classified and the rest of his proposals; ad-
mitting that Buick offered increased benefits beyond the old
contract. He could not, however, recall that Solow ever
advised him what Buick's pretax profits were.
Baran testified that there was discussion of-an inequity in
the rate of one (not two) employees who was performing
two jobs with different classifications. The employee had
been receiving the lower classification rate and Buick
agreed to reclassify him at the higher rate and to make up
his losses . The Machinists requested a $1 per hour per year
increase for the utility men (also referred to as nonincentive
employees) 3 who were receiving $2.05 per hour under the
old contract 4 Buick offered to increase this rate by 25 cents,
15 and 15 cents over the term of a 3-year contract. As to the
incentive employees who were paid on either a flat rate of
50 percent of charges with a guaranteed minimum, Baran
admitted that they were being paid the area rate. The re-
quest for one additional holiday was met by an offer of two
additional half days.5 The demand that Buick pay full hosp-
itilization costs for family plan (it was paying only one-half)
was countered by an offer to pay an additional $5 of the
cost. (The single membership plan was fully paid.) Buick
also agreed to pay tool insurance after its cost was comput-
ed. Baran thought that Bold asked for a 20-cent increase in
the pension fund and that Buick offered either 2 or 3 cents.
There was also an offer to increase sick and health benefits
but Baran could not remember the amount. A request for
7-day sick leave and an increase in vacation pay was re-
fused. Baran testified that after this meeting there was no
formal meeting of the employees and any representative of
the Machinists but that he explained what had taken place
to the men individually.
Williams testified that at this first meeting Bold refused
to discuss Buick's counteroffers on the ground that his pro-
posals were a package deal, to be accepted in toto, and that
the men might be better off "negotiating from the street 6
As to the inability to pay issue, Williams' testimony is not
free from amibiguity. His testimony reads:
Q. (By Mr. Makoroff) All right, in the first meeting,
was there any discussion about whether or not the com-
pany could afford an increase?
A. Yes, I think what we indicated, affording, not
whether we were making or losing money, but whether
we could in a thriving enterprise make concessions in
total to the union, that would make it so that our invest-
ment would not be-the return investment would not
be that which we wanted.'
3 G.C. Exh. 3, Item 2.
4 G.C. Exh. 2, p. 11.
5 Machinists requested that the day after Thanksgiving be a paid holiday.
Buick objected on the ground that this meant closing the shop for a 4-day
period. It countered with an offer for a full day on Good Friday and a
half-day on Christmas Eve.
6 This testimony stands uncontradicted.
7 Williams later testified:
A. At one time I said we can 't afford it from the standpoint that we
didn't want to do it, but then as I said , when it became the bone of
contention with Mr. Bold, I said, let us retract the statement about
affording, if this bothers you, let's make it, we will not grant your
original demands.
No allegation was made, according to Williams, either that
Buick was not making a profit or that the cost of the benefits
was such that Buick would not be able to make a profit. The
demand for a showing of the books was made and refused
by Buick on the ground that the issue was not whether it was
losing money but whether it could make a fair return on its
investment.
Solow's testimony as to the first meeting is equally ambig-
uous on this issue. After stating that Buick attempted to
negotiate on the specific demands 8 as it had done before he
testified:
... So I think we offered certain concessions on the
contract, we earnestly tried to make a contract, I think
that we were doing it in good faith. I said, if it becomes
again economically unfeasible then, we wouldn't be
able to operate our corporation, if you don't make a
profit, you can't stay in business.
So I think what we said at that particular time, I said
if there was or it was economically unfeasible, but I
know that I tried to offer everything in good faith, at
that particular time, tried to make the contract.
The meeting ended without any progress toward a negotiat-
ed agreement.
4. The second and last bargaining meeting
This meeting took place on August 2 in Solow's office.
Bold and Mindser represented the Machinists (Baran was
on vacation) and Solow and Williams represented Buick.
Bold testified that they started going over the (Machinists)
proposals again and that they (Williams and Solow) again
said they could not afford them. Bold then asked for the
books and the request was again denied. Bold again charged
them with pleading poverty and Williams then stated he was
retracting the statement that they could not afford to pay
but that Buick was not going to pay. The argument about
the books continued fruitlessly until Solow suggested that
Bold take Buick's counterproposals to the employees-that
they were satisfied with them. The meeting terminated with
Bold's final demand to see the books before negotiating
further.
Mindser corroborated this testimony to the extent that as
soon as Solow stated Buick could not afford to pay the
demands Bold demanded the books and was told he would
never see them. It was on this point of impasse that negotia-
tions ended. On cross-examination Mindser testified that
there was some discussion of Buick's counterproposals
which remained the same as those advanced at the first
meeting and that at one point Williams retracted his state-
ment about being unable to afford to pay the demands but
reiterated that the books would not be shown. Mindser
testified that he clearly understood that this was the position
of Buick on the issue of ability to pay.
Williams testified that at this second meeting he withdrew
his statement that Buick could not afford to meet the Ma-
chinists demands because "it seemed to stick in his (Bold's)
5 Solo* testified that to each of Buick's counterproposals Bold's response
was to threaten strike, and to repeat that what he had on paper was what he
wanted.
C-B BUICK, INC. 13 ,
craw, the idea that we would say anything about affording.".
Near the end of the meeting Solow excused himself and
went "next door," presumably to another office and gave
Bold a figure which represented Buick's profits for the past
year. (Bold, as stated previously, did not remember receiv-
ing this information.)
Solow's testimony generally corroborated that of Nil-
hams and in particular his testimony that he gave Bold the
pretax profits of Buick for the past year. He could not recall,
however, whether he ever stated that Buick could not afford
the demands or that he suggested that Bold take the coun-
terproposals back to the men.
Conclusions
The talks by Solow and Jackson
I find that both of these talks violated Section 8(a)(1) and
(5) of the Act. It might appear that Solow's talk was no more
than a candid attempt to explain to his employees the diffi-
culties facing Buick in securing a new location and a new
franchise contract and the effect that unreasonable de-
mands and a strike would have on Buick's ability to contin-
ue in business. At this time however the Machinists was the
collective-bargaining agent and negotiations had been initi-
ated by the Machinists letter of June 20. I think it beyond
argument that under these circumstances an employer must
deal directly and exclusively with the bargaining representa-
tive and is not permitted to discuss the consequences which
might flow from a union's demand with his men. Advising
the men of possible unhappy consequences if their demands
are, in the employer's eyes, unreasonable inevitably intrudes
on their right to full and free negotiations. It equally inevita-
bly undermines the position of a union at the bargaining
table by weakening the support which the union might ex-
pect from its members. The arguments which an employer
might address to his employees should properly be reserved
for the'bargaining table where more experienced and know-
ledgable representatives selected for that purpose can make
reply-' That, I believe, is the law.10
As to Jackson's talk, it was a frank effort to persuade the
employees to deal with Buick through him rather- than
through the Machinists accompanied by the statement that
by so doing they would be better off. This is an historic as
well as a primitive violation of Section 8(a)(5).11
The "We Can't Afford" Defense
The General Counsel contends that as soon as the Buick
representatives suggested that it could not afford to meet all
the Machinists demands without modification or negotia-
tion it was obliged to open its books to Bold. (It has already
- been found that Bold told Buick that what he would accept
was what he had on paper and there is no testimony that at
either meeting he offered to negotiate on any item.) Thus
baldly stated the proposition would seem, as a matter of
9 I do, however, reject the argument of the General Counsel that Solow's
remarks constituted a clear threat of reprisals which Buick would take against
the employees unless the Machinists' demands were modified.
1°American Vitrified Products Company, 127 NLRB 701, 715.
u Medo Photo Supply v. N.L.RB., 321 U.S. 678.
law, ridiculous, but it finds support in Board decisions.12
Under recent decisions an employer must expose his books
to any union, however exorbitant its demands, if he relies
on the fact that a granting of the demands would reduce his
profits to an unfeasible level or would place him in a non-
competitive position in the industry.13 It is not required,
under these decisions, that he allege a present loss in doing
business or that a meeting of the demands would result in
a loss in doing business; it becomes an obligation if he
alleges that a meeting of the demands would unreasonably
reduce his profits. An employer is thus placed in the unenvi-
able position of either admitting that he can afford to pay
the demands in full but is unwilling to do so, which is hardly
a tenable bargaining position, or opening his books to a
presumably hostile stranger.14 The authority for this per se
rule is N.L.R.B. v. Truitt Mfg. Co., Inc., 351 U.S. 159 (1956),
although an examination of Truitt does not, in my opinion,
justify the Board's sweeping conclusion.
The impasse in Truitt arose when the union representative
asked for an increase of 10 cents per hour. The company
responded that it could not afford such an increase, that it
was undercapitized, had never paid a dividend, and that an
increase of more than 2-1/2 cents per hour would put it out
of business. The union then asked to examine the
company's "books, accounting sheets, cost expenditures,
what not, anything to back up the Company's position that
they were unable to give more money." The company re-
fused on the ground that such information was not pertinent
to the discussion. In reversing the court of appeals and
affirming the Board's finding that the refusal constituted a
violation the Court added the following caveat.
We do not hold, however, that in every case in which
economic inability is raised as an argument against
increased wages it automatically follows that the em-
ployees are,entitled to,substantiating evidence. Each
case must rest upon its particular facts. The inquiry
must always be whether or not under the circumstances
of the particular case the statutory obligation to bar-
gain has been met. Since we conclude that there is
support the record for the conclusion of the Board here
that the Respondent did not bargain in good faith, it
was error for the Court of Appeals to set aside the
Board's order and deny enforcement.
The majority decision, it might be noted, was accompanied
by a vigorous dissent by Mr. Justice Frankentraler, with
Justices Clark and Harlan concurring. If there are any cir-
cumstances which would justify a refusal to apply the per se
rule which the Board has found sanctioned by Truitt this
case seems to present them. Here the Machinists and Buick
had, following certification, entered into a 1-year contract.
Prior to its expiration the Machinists submitted its demands
for a new contract and requested negotiations. Buick met
with the Machinists with reasonable promptness and was
confronted with a take-it-or-leave-it series of demands
12 Wheeling Pacific Company, 151 NLRB 1192, 1214, 1215; Stanley Build-
ing Specialties, Co., 166 NLRB 984; Globe Gear Company (Chairman Miller
dissenting), 189 NLRB 422.
Is Stanley Building Specialties, supra.
14 Federal agencies are not noted for the homage they pay to a citizen !s
right to privacy.
14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
which included a raise for one classification of employees
amounting to over 48 percent or, over a 3-year period; of
over 145 percent. It might appear that any employer might
consider such a demand exorbitant and plead an inability
to pay. He may, but as I understand current Board law, he
is guilty, if he does and without more, of infraction of Sec-
tion 8(a)(5). Buick did attempt to negotiate on the Machin-
ists proposals and did offer concessions on many issues all
of which were rejected, if they were in fact even considered,
as soon as the entrapping words "we can't afford" were
used. Thereafter, as I read the record, the Machinists efforts
were exclusively devoted to obtaining the books and after
only two bargaining sessions the Machinists terminated the
meeting although at this point Buick has withdrawn its
claim of inability and had given the Machinists a statement
of its pretax profits. If the measure of good faith bargaining
is still the totality of conduct it would appear that the Ma-
chinists rather than Buick was the intransigent party. In-
deed, it appears that the desire to examine Buick's books
overrode any desire to reach a reasonable agreement with
the result that the employees have been plunged into
lengthy and perhaps fruitless litigation without any of the
benefits negotiation might have obtained.
Recognizing that an Administrative Law Judge is com-
pelled to follow Board rather than court decisions an excep-
tion is the decisions of the Supreme Court. If the caveat of
the Court in Truitt has any application at, all it would appear
that the circumstances of this case provide the exception
indicated therein. I shall not, therefore direct Buick to pro-
vide the Machinists with such of its financial data as is
relevant to Buick's claim (later retracted) of financial inabil-
ity to meet the Machinists contractual demands.
Upon the foregoing findings I make the following:
CONCLUSIONS OF LAW
1. Machinists, at all times material herein, has been certi-
fied as the exclusive representative for the purposes of col-
lective bargaining of all employees in the following
appropriate unit:
All service department and parts department employ-
ees at Buick's Pittsburgh, Pennsylvania, dealership, ex-
cluding all office clerical employees, salesmen and
guards, professional employees and supervisors as de-
fined in the Act.
2. By bypassing the Machinists and dealing directly with
employees in the appropriate unit concerning the Machin-
ists' demands for a new contract and threatening that such
demands or a strike to enforce them might cause Buick to
go out of business, Buick violated Section 8(a)(1) and (5) of
the Act.
3. By telling its employees in the appropriate unit that
they could do better by dealing with Buick through a super-
visor than through their exclusive bargaining agent, Buick
violated Section 8(ax l) and- (5) of the Act.
4. Buick did not violate the Act by refusing to provide the
Machinists with financial data requested during the bar-
gaining meetings of July 19 and August 2.
5. The aforesaid unfair labor practices are unfair labor
practices within the meaning of Section 2(6) and (7) of the
Act.
IV. THE REMEDY
Having found Buick engaged in and is engaging in certain
unfair labor practices it is recommended that it cease and
desist therefrom and take certain affirmative action neces-
sary to effectuate'the policies of the Act.
Upon the foregoing findings and conclusions and upon
the entire record in this case and pursuant to Section 10(c)
of the National Labor Relations Act I recommend issuance
of-the following:
ORDER15
Respondent, C-B Buick, Inc., its officers, agents succes-
sors, and assigns, shall:
1. Cease and desist from:
(a) Bypassing the Machinists and dealing directly with its
employees concerning the Machinists' demands for a new
contract and threatening them that such demands or a strike
to enforce them might cause it to go out of business; telling
its employees that they could do better dealing with it
through a supervisor than through their exclusive bargain-
ing agent.
(b) In any like or related manner interfering with, re-
straining, 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 ef-
fectuate the policies of the Act:
(a) Upon request bargain collectively and exclusively
with Machinists as the exclusive bargaining representatives
of the unit found appropriate herein concerning rates of
pay, wages, hours and terms and conditions of employment
and, if agreement is reached, embody such understanding
in a written agreement.
(b) Post at its dealership at Pittsburgh, Pennsylvania, co-
pies of the attached notices marked "Appendix." 16 Copies
of the notice, on forms provided by the Regional Director
for Region 6, after being duly signed by Respondent's au-
thorized representative, shall be posted by the Respondent
immediately upon receipt thereof, and be maintained for 60
consecutive days thereafter, in conspicuous places, includ-
ing 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 cov-
ered by any other material.
(c) Notify the Regional Director for Region 6, in writing,
within 20 days from the date of this Order, what steps it has
taken to comply herewith.
15 In the event no exceptions are filed as provided by Section 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Section
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.
16 In the event the Board's Order is enforced by a Judgment of the 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."