C & S Industries, Inc.

National Labor Relations Board - Board Decisions

Apr 28, 1966

158 N.L.R.B. 454 (N.L.R.B. 1966)

454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
plant removal or any other reprisal ; promise them benefits; or grant them wage
increases or other improved conditions of work , to discourage their member-
ship, support or activities in Local 29 , Retail , Wholesale and Department Store
Union, AFL-CIO, or any other labor organization.
WE WILL NOT in any like or related manner interfere with , restrain , or coerce
our employees in the exercise of the right to self -organization , to form labor
organizations , to join or assist Local 29, Retail , Wholesale and Department
Store Union , AFL-CIO, or any other labor organization , to bargain collectively
through representatives of their own choosing , or to engage in any other con-
certed activities for the purpose of collective bargaining or other mutual aid or
protection , or to refrain from any and all such activities.
Dated------------- ------ By-------------------------------------------
(Representative ) ( Title)
EUGENE YOKELL AND BERNARD YOKELL , COPARTNERS, D/B/A
CRESCENT ART LINEN CO., AND BETSY Ross NEEDLE-
WORK, INC.,
Employer.
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.
If employees have any question concerning this notice or compliance with its pro-
visions, they may communicate directly with the Board 's Regional Office, Fifth
Floor, Squibb Building, 745 Fifth Avenue, New York, New York, Telephone No.
751-5500.
C & S Industries , Inc. and United Electrical , Radio and Machine
Workers of America, (UE), Local 1114 . Cases Nos. 13-CA-
6784 and 13-CA-6863. April 28,1966
DECISION AND ORDER
On July 20, 1965, Trial Examiner John P. von Rohr issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in and was engaging in certain unfair labor practices,
and recommending that it cease-and desist therefrom and take cer-
tain affirmative action , as set forth in the attached Trial Examiner's
Decision. Thereafter, the Respondent filed exceptions to the Trial
Examiner 's Decision and a supporting brief. The General Counsel
filed an answering brief to Respondent's exceptions.
The National Labor Relations Board has,reviewed the rulings of
the Trial Examiner made at the hearing and finds that no prejudicial
error was committed. The rulings are hereby affirmed. The Board
has considered the Trial Examiner's Decision, the exceptions, briefs,
and the entire record in this case, and hereby adopts the findings, con-
clusions , and recommendations of the Trial Examiner, with the
following additions and modifications.
As described more fully in the Trial Examiner's Decision, the
Union has been the certified bargaining representative of the
Respondent's employees since April 1, 1963, and its current collective-
bargaining agreement with the Respondent is effective from July 22,
158 NLRB No. 43.
C & S INDUSTRIES, INC. 455
1963, to May 31, 1966. This agreement sets forth an hourly wage
rate for each job classification. It is silent with respect to any form
of incentive wage system.
At the request of the Respondent, the parties met on May 8, 1964,
at which time the Respondent raised the possibility of instituting
a wage incentive system and offered to discuss with the Union the
institution of such a system. The Union took the position that the
Respondent had ample opportunity to present its plan at the recently
completed negotiations and since it had not done so, the matter was
closed and the contract was binding upon both parties. The Respond-
ent then informed the Union it was "going to go ahead and time
study the various jobs."
On September 21, the Respondent, without further notice or con-
sultation with the Union, instituted a wage incentive system. That
same day, the Respondent held a meeting attended by the union
shop steward and five employees to announce the institution of the
system.' Immediately thereafter, the Union filed grievances 2 alleg-
ing that the Respondent, by instituting the wage incentive system
without prior consent of the Union, had violated article 29 of the
contract which provides, inter alia, that "there shall be no change
in the method of payment of any employee covered by this agreement
without prior negotiations and written consent of the Union." The
Respondent in its replies to the grievances took the position that there
was nothing in the contract that prohibited the institution of an
incentive system and that it was willing to negotiate the merits of
the system with the Union.
Pursuant to the grievance machinery established by the contract,
the parties held meetings on October 8 and 16. The Union adhered
to the position it had taken at the May 8 meeting while the Respond-
ent again contended that there was nothing in the contract which
prevented it from instituting this system. On November 9, the
Union filed its initial charges in this case.
During January and February 1965, the Respondent took discipli-
nary action against some of its employees for failing to meet pro-
duction requirements established by the incentive wage system. This
disciplinary action consisted of 1- to 3-day suspensions and the imposi-
tion of disciplinary points pursuant to the point system as set forth
in Respondent's company policy and employee manual. The Union
challenged this disciplinary action by filing a series of grievances
'There is no record evidence that describes the system itself or in what manner it
operates.
2 The contract between the Respondent and the Union defines a grievance as "any dif-
ferences or disputes that may arise between the Union and the Company under the pro-
visions of Article I, Section I... The contract also provides that the arbitrator "shall
only rule upon the interpretation and application of this Agreement."
456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
charging that the Respondent's conduct was "based upon an Improper
unilateral wage system that was established by the Company " The
Union also filed charges with the Boar d, later amended, to this effect
The Trial Exammei, ielying on N L R B v Benne Katz,3 d/b/a
Wtllaannsbury Steel Products Co, in which the Suprf me Court held
that an employei violates its statutoiy duty to bargain collectively
by changing the wages and working conditions of its employees with-
out first notifying n,nd bargaining with their representative concern-
ing the contemplated action or change, found that Respondent's
institution of m age incentive system, in the circumstances of this
case, constituted a unilatei al change in the wages and working con-
ditions of its employees in violation of Section 8(a) (5) The Trial
Fxaminer also concluded that the Union was not obligated to pursue
the contractual grievance-arbitration procedure instead of filing
chaiges, reasoning that since there was no provision in the contract
which dealt with an incentive wage system, this subject fell outside
the "interpretation and application" of the contract and was there-
fore not subject to arbitration
1 The Respondent initially contends that even a ,sinning it was
required to bargain with the Union over the institution of the wage
incentive system, the institution thereof did not amount to "unilat-
eral' action, violative of Section 8(a) (5), because, on May 8, 1964,
p1 ioi to the institution of the wage incentive system, the Respondent
notified and offered to bargain with the Union regarding the pro-
posed system and the Union at that time declined to bargain We
find no met it in this contention In the first place, the record estab-
lishes that at the meeting on May 8, the Respondent merely offered to
discuss with the Union the possibility of its instituting some type of
an incentive system at some unspecified time in the future No sub-
sequent discussions on this subject took place until approximately
4 months later, after the Respondent actually instituted the wage
incentive system herein We reject the view that an employer sat-
isfies its statutory bargaining obligation by simply notifying the
representatives of its employees that it contemplates modifying work-
mg conditions at some indefinite time in the future Such notifica-
tion cannot serve to create for the employer a continuing option to
affect a unllatei al change in working conditions whenever it chooses
In any event, assuming that Respondent made a sufficient offer to
bargain regaidmg the wage incentive system, we reject the premise
of Respondent's argument that one party to an e>istnng contract
may during its term unilaterally institute a change in contract terms
after it has offered to bargain i egarding the change and the other
party has refused to discuss the matter
3 369 U S 736 see also Servette Inc 133 NLRB 132
C & S INDUSTRIES, INC. 457
It is true, of course, that where during timely negotiations for a
new agreement an employer has offered to bargain with a union con-
cerning a proposed change in contract conditions and the union has
refused to bargain, the employer does not violate his statutory obliga-
tion if following the effective period of the expiring contract he
unilaterally institutes the change. The situation is dfferent, how-
ever, where, as here, an employer seeks to modify during the life of
an existing contract terms and conditions of employment embodied in
the contract and made effective for its term. In the latter situation,
a bargain having already been struck for the contract period and
reduced to writing, neither party is required under the statute to
bargain anew about the matters the contract has settled for its dura-
tion, and the employer is no longer free to modify the contract over
the objection of the Union.
The statutory intent to stablize during a contract term agreed-
upon conditions of employment is apparent from the provisions of
Section 8 (d) of the Act, which defines the obligation to bargain.
That section not only imposes an obligation on each party to a con-
tract to refrain from modifying the contract without complying with
the notice and waiting period requirements therein set forth, but also
expressly provides that the "duties -so imposed shall not be construed
as requiring either party to discuss or agree to any modification of
the terms and conditions contained in a contract of a fixed term, if
such modification is to become effective before such terms and con-
ditions can be reopened under the provisions of the contract."' In
line with that provision, the Board has consistently held that a
party does not violate its bargaining obligation when it refuses to
discuss changes proposed by the other party in the terms of an exist-
ing contract 4 The Board has also held that an employer acts in
derogation of his bargaining obligation under Section 8 (d), and hence
violates Section 8(a) (5), when he unilaterally modifies contractual
terms or conditions of employment during the effective period of a
contract-and this even though he has previously offered to bargain
with the union about the change and the union has refused.°
The Respondent's argument in substance is that Section 8(d)
simply *relieves a union of any legal obligation to bargain upon
request over changes in an existing agreement, but imposes no duty
on an employer to refrain from acting unilaterally once the union
rejects the employer's offer to bargain. We cannot in reason accept
4Tide-Water Associated Oil Company, 85 NLRB 1096; Jacobs Manufacturing Company,
The, 94 NLRB 1214; enfd 196 F. 2d 680 (C A. 2) ; see also The Press Company, Incor-
porated, 121 NLRB 976.
5 See, John W. Bolton cf Sons, Inc., 91 NLRB 989 , involving a factual situation virtually
identical to the one in the instant case . And see also , Kinard Trucking Company, Inc.,
152 NLRB 449.
458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this construction of the statute. To adopt the Respondent's view
would not only be contrary to the clear language of the section read
as a whole, and at variance with existing Board precedent; it would
also produce an incongruous result. Such a reading of the statute
would as a practical matter leave a union with no choice but to bar-
gain about contract changes whenever requested by an employer to
do so. Its operative effect therefore would be to render virtually
meaningless with respect to a union the express declaration in 8(d),
quoted above, that neither party to a contract is required to "discuss
or agree" to any modification of conract terms to be effective prior
to the reopening time of a contract. Indeed, under the view, except
for the speculative possibility that the union could succeed during
negotiations in persuading the employer to give up its plan to modify
the contract, the union would be offered no statutory protection in
maintaining previously negotiated contract conditions for the agreed-
upon term once the employer seeks to change them. This is to be
contrasted with the unquestioned protection provided an employer
under Section 8(d) against union strikes aimed at obtaining con-
tract modifications during the effective period of a contracts We are
unwilling to construe the statute in a manner that would thus render
nugatory the above-quoted language of Section 8(d), provide for
a one-sided application, and curtail the effectiveness of collective-
bargaining agreements as a stabilizing factor in labor-management
relations.
While it is true that a breach of contract is not ipso facto an unfair
labor practice,' it does not follow from this that where given conduct
is of a kind otherwise condemned by the Act, it must be ruled out
as an unfair labor practice simply because it happens also to be a
breach of contract. Of course, the breadth of Section 8(d) is not
such as to make any default in a contract obligation an unfair labor
practice, for that section, to the extent relevant here, is in terms con-
fined to the "modification'' or "termination" of a contract. But there
can be litle doubt that where an employer unilaterally effects a change
which has a continuing impact on a basic term or condition of
employment, wages for example, more is involved than just a simple
default in a contractual obligation. Such a change manifestly con-
stitutes a "modification" within the meaning of Section 8(d). And
if not made in compliance with the requirements of that section,
it violates a statutory duty the redress of which becomes a matter of
concern to the Board. -
8 See, e g., Milk, Ice Cream Drivers, Local No. 783 (Cream Top Creamery, Inc.), 147
NLRB 264.
7 Wilson & Co. Inc., 89 NLRB 310; American Vitrified Products Company, 127 NLRB 701.
C & S INDUSTRIES, INC.'' ' 459
In ' the instant case, we think it quite clear, and we find, that
Respondent 's unilateral superimposition of an incentive wage plan
upon the contractually. established wage structure operated as a "mod-
ification" of contract terms, within the "meaning of Section-8(d).
Although the contract makes no specific mention of wage incentives,
such incentives are inseparably bound up with and are thus plainly
an aspect of the payment of wages, a subject expressly covered by
the contract.8 Any doubt of this is removed by the presence in the
contract of article 29, which expressly prohibits any change in the
method of payment without the written consent of the parties. We
therefore conclude, for reasons above set forth, and without regard
to whether or not Respondent made a sufficient prior offer to bargain,
that Respondent's unilateral installation of its wage incentive system
was in derogation of its statutory obligation under Section 8(d), and
was therefore violative of Section 8(a) (5).
2. The Respondent also contends that the dispute herein turns on a
question of contract interpretation which can best be resolved through
the grievance-arbitration procedure of the contract, and therefore
than an arbitrator and not the Board should first determine the ques-
tion. The Trial Examiner rejected this contention, concluding that
since there was no provision in the existing contract which dealt with
a wage incentive system, the dispute herein did not involve "the
interpretation and application" of the agreement and was therefore
not subject to arbitration. Although we did not rely on this reason-
ing of the Trial Examiner, we agree with his conclusion that the
Board should not defer to arbitration-and this for the following
reasons:
Section 10(a) of the Act, which confers on the Board power to
prevent unfair labor practices provides that "[t]his power shall not
be affected by any other means of adjustment or prevention that has
been or may be established by agreement, law, or otherwise . . ." The
Board is not precluded from resolving an unfair labor practice issue
calling for appropriate remedial relief under the Act, simply because
as an incident thereto it may be necessary to construe the scope of
a contract which an arbitrator may also be empowered to construe.9
Although it lies in the discretion of the Board to defer to arbitration,
we do not regard the controversy before us as one calling for our
exercise of such discretion. Here we do' not have an issue which,
although cast in unfair labor practice terms, is essentially one involv-
'John H. Bolton & Sons, Inc., supra; The Ingalls Shipbuilding Corporation, 143
NLRB 712.
0 Smith Cabinet Manufacturing Company, 147 NLRB 1506; Cloverleaf Division . of Adams
Dairy Co ., 147 NLRB 1410. Member Brown relies on his concurring opinion in Cloter-
leaf Division of Adams Dairy Co., id. at p. 1420, and his separate opinion in LeRoy Ma-
chine Co., Inc ., 147 NLRB 1431, 1434.
460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing a contract dispute, making it reasonably probable that arbitra-
tion will put the statutory infringement finally at rest in a manner
sufficient to effectuate the policies of the Act. Nor does resolution
of the unfair labor practice issue here involved primarily turn on
an interpretation of specific contractual provisions of ambiguous
meaning, within the special competence of an arbitrator to deter-
mine. Nor has either party placed this dispute before an arbitrator
or secured an award passing upon any of the issues here raised. In
urging deferral to arbitration, the Respondent contends only that
the incentive plan was not specifically prohibited by the contract and
that its installation was economically justified. But, for reasons
earlier indicated, the absence of a specific incentive plan prohibition
cannot and does not affect our judgment that Respondent's unilateral
action was violative of the Act. And we agree with the Trial Exam-
iner that Respondent's claim of economic necessity affords no justi-
fication for its unlawful conduct. Consequently, and as no other
compelling reason appears for our doing so, we shall not defer to
arbitration.
In view of the foregoing and the entire record in the case, we find
that the Respondent violated Section 8(a) (5) by instituting, with-
out the consent of the Union, a wage incentive system during the
term of the existing collective-bargaining agreement.
3. Since, in order to remedy the 8(a) (5) violations found herein,
we have ordered the Respondent to restore the working conditions
which it had unilaterally changed and to make whole the employees
who have been disciplined, we agree with the Trial Examiner that it
is unnecessary to decide whether the Respondent's disciplinary actions
against employees in implementation of the wage incentive system
also violated Section 8(a) (3).
THE REMEDY
Having found that Respondent has engaged in unfair labor prac-
tices within the meaning of Section 8(a) (5) and (1) of the Act, we
shall order it to cease and desist therefrom and take certain affirmative
action which we find necessary to effectuate the policies of the Act.
The Trial Examiner recommended that the Respondent be ordered
to cease and desist from refusing to bargain with the Union, and
from making unilateral changes in wages without first consulting
with the Union. However, since we have concluded that even if the
Respondent had offered to bargain with the Union, it nonetheless
would have been foreclosed from modifying contract terms over the
Union's objection, we believe that the Trial Examiner's Recom-
mended Order does not fully remedy the unfair labor practices found
herein.
C & S INDUSTRIES, INC 461
We shall therefore modify the Recommended Order and order the
Respondent, upon request, to rescind the wage incentive program
and to cease and desist from instituting changes in the wages, hours,
and othei terms and conditions of employment of its employees during
the effective term of the collective-bargaining agreement covering
said employees N-,ithout first reaching agreement with the Union con-
ceinmg such changes
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act,
as amended, the National Labor Relations Board hereby adopts as its
Order the Recommended Order of the Trial Examiner, as modified
herein, and orders that the Respondent, C R S Industries, Inc, Chi-
cago, Illinois, its officeis, agents, successors, and assigns, shall take
the action set forth in the Trial Examiner's Recommended Order as
so modified
1 Delete paragiaph 1(b) and substitute the following therefor
"(b) Making unilateral changes in wages, rates of pay, or other
terms and conditions of employment of its employees in the above-
described appropriate unit during the term of the contract without
fiist reaching agreement with the above-named Union concerning
such changes"
2 Delete paragraph 2(a) and substitue the following therefor
"(a) Upon request of the above-named Union, rescind any plan
which Respondent may have unilaterally instituted "
3 Delete paragraph 2(b) and substitute the following therefor
"(b) Make whole the employees listed in the first paragraph of
the attached notice marked "Appendix B," together with 6 percent
per annum thereon, for any loss of pay they may have suffered as a
result of their layoff for failing to meet the production requirements
established as a part of the unilaterally instituted incenti%e wage
rate system"
4 Amend the first 2 lines of paragraph 2(e) as follows
"(e) Post at its plant in Chicago, Illinois, copies of the attached
notices marked `Appendix A' and `Appendix B ' 16 "
5 Delete the second paragraph of Appendix A and substitute the
following therefor
Wi WILL NOT unilateially institute changes in wagEs, hours, of
other terms and conditions of employment of the employees in
the bargaining unit described below, during the term of any
collective-bargaining agreement covering said employees, without
first consulting with and bargaining with the Union concerning
such changes and reaching agreement on any modification of the
terms of the contract
462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
6. Delete the third paragraph of Appendix A and substitute the
following therefor:
NVE WILL, upon request, revoke the incentive wage rate system
for our employees which we unilaterally instituted on or about
September 21, 1964.
7. Delete paragraph 5 of Appendix A and substitute the following
therefor:
WE WILL make whole the employees listed in the first para-
graph of Appendix B, together with 6 percent interest per annum
thereon, for any loss of pay they may have suffered by reason
of their being laid off because of their failure to meet production
requirements under the incentive wage rate system.
8. Amend the Employer's name, as it appears on Appendix A to
read "C & S Industries, Inc."
MEMBER ZAGORIA took no part iii the consideration of the above
Decision and Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Upon charges filed on November 9, 1964, and January 25, 1965, in Cases Nos.
13-CA-6784 and 13-CA-6863, respectively, the General Counsel for the National
Labor Relations Board, for the Regional Director for Region 13, Chicago, Illinois,
issued a consolidated complaint on February 15, 1965, against C & S Industries, Inc.,
herein called the Respondent or the Company, alleging that it had engaged in certain
unfair labor practices affecting commerce within the meaning of Section 8(a) (1), (3),
and (5) of the National Labor Relations Act, as amended, 61 Stat. 136, herein called
the Act. The Respondent's answer denies the allegations of unlawful conduct as
alleged in the complaint.
Pursuant to notice, a hearing was held in Chicago, Illinois, on March 9, 1965, before
Trial Examiner John P. von Rohr. All parties were represented by counsel and were
afforded opportunity to adduce evidence, to examine and cross-examine witnesses, and
to file briefs. A brief was filed by the Respondent it has been carefully considered.
Upon the entire record in this case and from my observation of the witnesses, I
hereby make the following:
FINDINGS OF FACT AND CONCLUSIONS
I. THE BUSINESS OF THE RESPONDENT
The Respondent is a Delaware corporation with its principal plant and place of
business located at Chicago, Illinois, where it is engaged in the business of manufac-
turing, selling, and distributing automotive muffler systems and related products.
During the calendar year ending in 1963, the Respondent manufactured, sold, and
distributed from its plant in Chicago, Illinois, products valued in excess of $50,000 to
points directly outside the State of Illinois. During the last year, Respondent sold
products manufactured by it in Chicago, Illinois, valued in excess of $50,000 to vari-
ous enterprises which themselves annually sell products valued in excess of $50,000
to points outside the State in which they are located.
The it-spondent concedes, and I find, that it is and has been engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
United Electrical, Radio, and Machine Workers of America, (UE), Local 1114,
herein referred to as the Union, is a labor organization within the meaning of Section
2(5) of the Act.
C & S INDUSTRIES, INC
III THE UNFAIR LABOR PRACTICES
463
A The facts
The principal allegation in the complaint herein charges the Respondent with hav-
ing violated Section 8(a)(5) of the Act by unilaterally instituting in incentive wage
rate system for its employees during the life of a collective barg lining agreement
Unless otherwise noted, the facts set forth below are not in dispute
On April 1, 1963, the Board certified the Charging Union as the collective bargaining
representative for a unit comprised of all Respondent's production and maintenance
employees Following a series of collective-bargaining negotiations, the parties
entered into a conti act effective from July 22, 1963, to May 31, 1966
The event which gives rise to the dispute in this proceeding occurred on Septem-
ber 21, 1964, at which time the Respondent instituted an incentive wage rate system
It is undisputed that this action was taken unilaterally, the Union having been given
neither advance notice nor the opportunity to bargain over the matter I Insofar as
the contiact was concerned , it may be noted that it only provided for an hourly wage
system, it did not provide for any form of incentive wage rate system On Septem-
ber 23, 1964,2 the Union filed a grievance which charged as follows
The Company is in violation of Sec 9 of Article 29 of the cure nt collective bar-
gaining agreement by starting an incentive system without prior consent of the
Union The Union requests that the violation be stopped 3
The Respondent immediately responded in writing, stating that Nothing in Con-
tract Art 29 Sec 9 that pertains to above grievance "
On September 24, the Union filed a second grievance, this identical to the first
except that it charged Respondent with having violated section 1 and 2 of article 29 of
the contract, these sections having reference to the wage rates as set forth in the
agieement The Respondents reply in this instance was that Section 1 & 2, Article
29 [does] not say that the Company cannot introduce an Incentive System'
On October 20, the Respondent submitted a letter to the Union in further reply to
the grievances theretofore filed which stated as follows
The company's position is that nothing in the contract prohibits the installation
of an incentive system The company has been willing to negotiate this matter
with the union and has consistently asked the union to discuss the merits of the
program and point out any short comings they feel might be in the plan The
company, of course, agiees that any rates established under the plan will be
subject to the grievance procedure The company is ready and willing to further
negotiate this plan with the union at any time
The company has retained a professional Industrial Engineering Firm to time
study the shop and to set what we believe are fair and just rate, The company
will not insist on employee' s earning incentive, but all employees are expected to
maintain an efficient productive level New employees will be given the neces-
sary training to bring them up to the standard productivity level within a normal
period of time
While the Union never made any formal withdrawal of the above grievances, it is
significant to note here that the Union filed a charge in the instant case 4 on Novem-
ber 9, 1964, alleging , inter alia, that the Respondent 's unilateral institution of the wage
incentive system constituted a violation of Section 8(a)(5) of the Act
1 The announcement of the wage incentive program was made to the unto i shop steward
and five other employees who were called together by Respondent s pre, ident on the day
the program was put Into effect
I note further that during a meeting between union and company repre entatives held on
May 8, 1964 , the Company advised the Union that it was contemplating the institution of
a wage incentive system in order to increase production and productivei', HoweN er ac
cording to the credited and uncontradicted testimony of Leonard Woiewocl i a union
official who was present at this meeting , the Union responded that it regirded the current
contract as binding that it was opposed to any such incentive system at this time and
that any question of a wage incentive program should be deferred until the commencement
of negotiations for the next contract
2 Unless otherwise indicated the dates which follow refer to the year 1964
8 Article 29, section 9 provides ' there shall be no change in the method of pa3 ment of
any employee without prior negotiations and written consent of the Lnion
' Case No 13-CA-6784
464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On December 29, the Respondent again wrote the Union concerning the above
grievances , this time stating its position as follows:
With regard to the grievances dated 9-23-64 and 9-24-64, the company
submitted a third step answer to the Union on October 20, 1964. Inasmuch as
the Union has not accepted this answer and in the interest of resolving this
grievance, the company is requesting that the grievance be referred to an
impartial arbitrator in accordance with Article 15 of our Labor Agreement.
Please call me [a company official] so that we may select the arbitrator.
During the months of January and February 1965, the Respondent took disciplinary
action against various employees for the reason that they failed to meet the production
requirements as established by the incentive wage rate system as put into effect on
September 21, 1964. Such disciplinary action consisted either of a 1- to 3-day layoff
or the imposition of disciplinary points under Respondent's point system as set forth
in its company policy and employee manual.5 The Union responded to the Respond-
ent's action in this regard by filing a series of grievances charging that the Respondent's
disciplinary action as aforesaid "was based upon an improper unilateral wage rate
system that was established by the Company." The Respondent replied to these
grievances , in essence , by stating that the parties select arbitrators and that the matter
be taken to arbitration.
B. Additional facts; conclusions
The Respondents' defense to the allegation that it violated Section 8(a) (5) of the
Act by its unilateral institution of the incentive wage system is that the Board should
not assert jurisdiction because the Union was under "a duty" to follow the grievance
procedure in the contract. While the parties have cited many cases, I believe that
Respondent 's contention as aforesaid is squarely controlled by the Board 's decision,
as affirmed by the court , in The Timken Roller Bearing Company .6 In the latter case
the Employer refused the Union 's request for certain wage data, asserting as a ground
for its refusal that the Union's claimed right for such data must be through the
grievance procedure provided by the contract, which terminated with arbitration. In
rejecting this contention , the Board noted that the arbitrator 's jurisdiction , as set forth
in the contract , was limited in fact to disputes involving "the interpretation and appli-
cation of the agreement." Accordingly, it was held, inter alia, that the dispute in ques-
tion was not subject to the grievance procedure and arbitration provided in the
bargaining agreement.
The identical situation prevails in the instant case. Thus step 3 of the grievance
procedure in the instant agreement provides as follows: 7
It is expressly understood that the arbitrator shall have no power to subtract
from, add to, or modify, the terms of this Agreement, and shall only rule upon
the interpretation and application of this Agreement . [Emphasis supplied.]
As previously noted, the contract provides that the employees are to be paid at an
hourly rate, such rates being specifically set forth therein for the various employee job
classifications. There being no provision whatsoever in the contract which deals with
an incentive wage rate system , it is clear, and I find, that any dispute involving this
subject fails outside the "interpretation and application" of the contract and therefore
is not subject to the grievance and arbitration procedure as provided in the collective-
bargaining agreement. Accordingly I find that Respondent's contention as aforesaid
is without merit .8
The merits of this case, in my opinion, must be decided in favor of the General
Counsel under fundamental rules of labor law. Thus, the "duty to bargain col-
lectively" is defined by Section 8(d) of the Act as the duty to "meet .., . and confer in
good faith with respect to wages, hours and other terms and conditions of employ-
ment." It is too well established to require further discussion that an employer's action
in changing the wage rates or other working conditions of its employees without notice
to, or consultation with, the labor organization which they have chosen to represent
them is in derrogation of its duty to bargain and is violative of Section 8(a) (5) of the
5 Under this system an employee is subject to discharge upon the receipt of 5 points
against his record in any 6-month period.
° 138 NLRB 15; enfd. 325 F. 2d 746 (C.A. 6), cert. denied 376 U.S. 971.
7 Article XV, section 1, step 3.
8 See also Smith Cabinet Manufacturing Company, Inc, 147 NLRB 1506; Cloverleaf
Division of Adams Dairy Co., 147 NLRB 1410; The Ingalls Shipbuilding Corporation, 143
NLRB 712.
C & S INDUSTRIES, INC. 465
Act .9 It is no defense, as th -, Respondent additionally urges, that the unilateral action
taken was based on alleged economic necessity.10 Accordingly, I find that the
Respondent here committed an unfair labor practice within the meaning of Section
8(a) (5) of the Act, and derivatively Section 8(a) (1) thereof, by its unilateral institu-
tion of the incentive wage rate system. Respondent's letter of October 30 stating that
"the Company is ready and willing to further negotiate this plan with the Union at
any time" did not cure its unlawful action, for by this time the establishment of the
incentive program was fait accompli . Moreover , I can but regard the statement as
self-serving, for thereafter the Respondent continued to insist that the Union take the
matter to arbitration. If the Respondent indeed wished to bargain in good faith, at the
very least it should have-rescinded its institution of the incentive program, returned to
the status quo of the contract, and thereafter have taken appropriate steps to comply
with Section 8(d) of the Act.11
C. The allegation that Respondent unlawfully disciplined its employees
The complaint alleges that the Respondent violated Section 8(a)(1), (3 ), and (5)
of the Act by laying off and reprimanding certain of its employees "because of their
failure to meet production requirements, established as part of the unilaterally
instituted incentive wage rate system." 12 The Respondent admits the action in kind
but denies the commission of any unfair labor practices with respect thereto.
I do not deem it necessary to decide whether Respondent violated Section 8(a)(3)
of the Act by the foregoing conduct,:13 for the question here is primarily one of
remedy. Having found that Respondent violated Section 8(a) (5) and (1) of the Act
by its unilateral action with respect to the institution of the incentive wage rate
system, I shall under the section herein entitled "The Remedy," follow established
Board policy and recommend the restoration of working conditions which have been
unilaterally changed,14 this including appropriate redress to the employees who have
suffered a loss as a result of the Respondent's unfair labor practices.15
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, which have been found
to constitute unfair labor practices, occurring in connection with the operations of
Respondent described in section I, above have a close , intimate, and substantial rela-
tion 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.
V. THE REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I
shall recommend that Respondent cease and desist therefrom and take certain affirma-
9 Beacon Piece Dyeing and Finishing Co., Inc., 121 NLRB 953 ; N.L.R.B. v. Benne Katz,
et al, d/b/a Williamsburg Steel Products Co., 369 U.S. 736; N.L.R.B. v . Crompton-Highland
Mills, Inc., 337 U.S. 217; N.L.R.B. V. Morris Harris, at al., d/b /a Union Manufacturing
Company, 200 F. 2d 656.
19 N.L.R.B. V. Morris Harris, supra.
n There is no question of waiver in this case . In this connection , it may be noted that
there is some dispute in the testimony concerning t4e positions taken by the parties during
the 1963 contract negotiations relative to a bonus system which Respondent had In effect
prior to the commencement of these negotiations . However, I need not resolve this con-
flict or set forth such testimony , for I regard it as irrelevant to the issue herein . I regard
it so because this earlier bonus system was entirely different from the wage rate incentive
system which gives rise to the Instant dispute.
' The names of the employees and the dates of their layoffs (the layoffs were from 1 to 3
days ) are specified in the attached Appendix B. Said appendix also reflects the names of
the employees who were disciplined and the dates such action was taken.
13 I.e., whether Respondent ' s disciplining of employees for failure to meet production
requirements under its unilaterally established incentive plan constituted "encouragement
or discouragement of membership in a labor organization " within the meaning of the Act.
14 Staub Clean"rs, Inc., 148 NLRB 278; George E. Light Boat Storage, Inc., 153 NLRB
1209; Continental Bus System , Inc., d/ b/a Continental Rocky Mountain Lines, Inc., 138
NLRB 894; Dickten & Masch Mfg. Company, 129 NLRB 112; Cascade Employers Associa-
tion, Inc., 126 NLRB 1014.
Is There is no contention by the Respondent that the employees who were disciplined
engaged in type of unprotected activity.
221-731-67-vol. 158-31
466 DECISIONS OF' NATIONAL LABOR RELATIONS BOARD
tive action designed to effectuate the purposes of the Act, including the posting of the
notices attached to this Decision as Appendixes A and B.
Having found that the Respondent refused to bargain by unilaterally establishing an.
incentive wage rate system, I shall recommend that the Respondent restore the wage
rates in effect prior to such unilateral action. I shall further recommend that Respond-
ent make whole the employees listed in the attached Appendix B, who were laid off
because of their failure to meet production requirements under the unilaterally estab-
lished incentive wage rate system by payment to them of a sum equal to that which
they would have earned in the absence of any such layoffs. Further that Respondent
shall rescind and revoke any disciplinary points issued to the employees named on
Appendix B who were disciplined under Respondent's point system.
Because of the character and scope of the unfair labor practices found to have been
engaged in by Respondent, I shall recommend that Respondent cease and desist from
in any other manner interfering with, restraining, and coercing its employees in the
exercise of their rights guaranteed by Section 7 of the Act.
Upon the basis of the foregoing findings of fact and upon the entire record in this
case, I make the following:
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. United Electrical, Radio and Machine Workers of America, (UE), Local 1114,
is a labor organization within the meaning of Section 2(5) of the Act.
3. All production and maintenance employees, excluding all office clerical employ-
ees, outside truckdrivers, professional employees, guards, and supervisors as defined
in the Act, constitute a unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act.
4. At all times since March 23, 1963, the Union has been, and still is, the exclusive
representative of all the employees within said appropriate unit for the purposes of
collective bargaining in respect to rates of pay, wages, hours of employment, or other
conditions of employment, within the meaning of Section 9(a) of the Act.
5. By unilaterally instituting an incentive wage rate system, the Respondent has
engaged in and is engaging in unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act.
7. The Respondent has not engaged in unfair labor practices insofar as the com-
plaint alleges violations of the Act not specifically found herein.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law, and upon
the entire record in this case, I recommend pursuant to Section 10(c) of the Act,
that Respondent C & S Industries, Inc., its officers, agents , successors, and assigns
shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with the above-named labor organization as
the exclusive representative of its employees in the following appropriate unit with
respect to rates of pay, wages, hours of employment, and other terms and conditions
of employment:
All production and maintenance employees, excluding all office clerical employees,
outside truckdrivers, professional employees, guards, and supervisors as defined in the
Act.
(b) Making unilateral changes in wages, rates of pay, or other terms and conditions
of employment of its employees in the above-described appropriate unit without first
consulting and bargaining with the Union, in a manner violative of the Act.
(c) In any other manner interfering with, restraining, or coercing its employees in
the exercise of their right to self-organization, to form, join, or assist the above-named
or any other labor. organization, to bargain collectively through representatives of
their choosing, to engage in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection, or to refrain from any or all such
activities, except to the extent that such right may be affected by the provisos in Sec-
uon 8 (a) (3) of the Act.
2. Take the following affirmative action, which I find necessary to effectuate the
policies of the Act.
(a) Upon request, meet and bargain collectively with the, above named labor
organization as the exclusive representative of the employees in the above-described
C & S INDUSTRIES, INC 467
appropriate unit with respect to rates of pay, wages, hours of employment, and other
terms and conditions of employment, and, if an understanding is r( ached, embody
such understanding in a signed written agreement
(b) Make whole the employees listed uder the first paragraph of the attached
notice marked "Appendix B," for any loss of pay they may have suffered as a result of
their layoffs for failing to meet the production requirements established as a part of the
unilaterally instituted incentive wage rate system
(c) Revoke and rescind any disciplinary points issued to the employees listed in
the second pargaraph of the attached notice marked Appendix B which were issued
to them because of their failure to meet production requirements established as part
of the unilaterally instituted incentive wage rate system
(d) Preserve and, upon reasonable request, make available to the Board or its
agents, for examination and copying, all payroll records, and other records necessary
to analyze the amounts of backpay due the employees listed in Appendix B
(e) Post at its plant in Chicago, Illinois, copies of the attached notice marked
'Appendix A " 113 Copies of said notice, to be furnished by the Regional Director for
Region 13, shall, after being duly signed by an authorized representative of the
Respondent, be posted by it immediately upon receipt thereof, and be maintained by it
by a period of 60 consecutive days thereafter, in conspicuous places, including all
places where notices to employees are customarily posted Reasonable steps shall be
taken by said Respondent to ensure that said notices are not altered, defaced, or
covered by any other material
(f) Notify the said Regional Director, in writing, within 20 days from the receipt
of this Decision, what steps the Respondent has taken to comply herewith 17
I further recommend that the complaint be dismissed insofar as it alleges violations
of the Act not specifically found herein
is In the event that this Recommended Order be adopted by the Board the v orris a
Decision and Order ' shall be substituted for the words ' the Recommended Orde* of areal
Examiner" in the notice In the further event that the Boards Order is enforced by a
decree of a United States Court of Appeals the words ' a Decree of the United States
Court of Appeals, Enforcing an Order" shall be substituted for the words a Decision
and Order"
17 In the event that this Recommended Order is adopted by the Board this provision
shall be modified to read "Notify said Regional Director , in writing , within 10 days from
the date of this Order , what steps the Respondent has taken to comply herewith "
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, as amended, we hereby notify our employees that
WE WILL NOT refuse to bargain collectively with United Electrical, Radio and
Machine Workers of America, (UE), Local 1114, as the exclusive representative
of the employees in the bargaining unit described below
WE WILL, upon request, bargain with the above named Union as the exclusive
representative of all the employees in the bargaining unit described below with
respect to rates of pay, wages, hours of employment, and other tc rms and condi-
tions of employment, and, if an understanding is reached, embody such an
understanding in a signed agreement
WE WILL revoke the incentive wage rate system for our employees which we
unilaterally instituted on or about September 21, 1964
WE WILL NOT unilaterally change the rates of pay of the employees in the bar-
gaining unit described below The bargaining unit is
All production and maintenance employees, excluding all office clerical
employees, outside truckdrivers, professional employees guards, and super-
visors as defined in the Act
WE WILL make whole the employees listed in the first paragraph of the attached
Appendix B, for any loss of pay they suffered by reason of their being laid off
because of their failure to meet production requirements under the incentive wage
rate system
WE WILL rescind and revoke any disciplinary points issued to the employees
listed in the second paragraph of Appendix B because of their failure to meet
pi oduction requirements under the incentive wage rate system
468 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All our employees are free to become , remain , or to refrain from becoming or
remaining members of any labor organization , except to the extent that such right may
be affected by the provisos in Section 8(a) (3) of the Act.
C & C INDUSTRIES, INC.,
Employer.
Dated------------------- By-------------------------------------------
(Representative ) ( Title)
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.
If employees have any question concerning this notice or compliance with its provi-
sions, they may communicate directly with the Board 's Regional Office, 881 U.S.
Courthouse and Federal Office Building, 219 South Dearborn Street, Chicago , Illinois,
Telephone No. 828-7572.
APPENDIX B
Names and dates of employees laid off
(1)
Names Dates
of Employees of Layoff
Names Dates
of Employees of Layoff
N. Flores ---------------- Jan. 11 F. Holmes --------------- Jan. 18
R. Campbell ------------- Jan. 11 E. Miranda -------------- Jan. 18
L. Nykoden ------------- Jan. 11 A. Stanevich ------------- Jan. 18
E. Miranda --------------- Jan. 11 R. Pumphrey ------------- Jan. 25
A. Stanevich ------------- Jan. 11 L. Nykoden ------------- Feb. 10
R. Rivera --------------- Feb. 1 R. Pumphrey ------------ Feb. 10
J. Johnson --------------- Feb. 1
Names and dates of employees reprimanded
(2)
Names Date
of Employees of Reprimand
Names Date
of Employees of Reprimand
F. Holmes --------------- Jan. 4 R. Rivera --------------- Jan. 4
F. Rodriguez ------------ Jan. 4 J. Habinka -------------- Jan. 4
N. Flores --------------- Jan. 4 J. Johnson --------------- Jan. 4
P. Bakei ---------------- Jan. 4 E. Kerley --------------- Jan. 4
A. Stanevich ------------- Jan. 4 C. Davis ---------------- Jan. 7
E. Miranda -------------- Jan. 4 R. Pumphrey ------------- Jan. 8
R. Campbell ------------- Jan. 4 R. Montanel ------------- Jan. 8
S. Garcia ---------------- Jan. 4 L. Garcia - --------------- Jan. 11
L. Nykoden -------------- Jan. 4
NOTE.-All dates 1965.
Corrie Corporation of Charleston and Chauffeurs, Teamsters and
Helpers Local No . 175, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America . Case No.
9-CA-3559. April 28, 1966
DECISION AND ORDER
On January 7, 1966, Trial Examiner Rosanna A. Blake issued her
Decision in the above-entitled proceeding, finding that Respondent
had engaged in and was engaging in certain unfair labor practices
and recommending that it cease and desist therefrom and take certain
158 NLRB No. 49.