CBC Industries

National Labor Relations Board - Board Decisions

May 21, 1993

311 N.L.R.B. 123 (N.L.R.B. 1993)

123
311 NLRB No. 20
CBC INDUSTRIES
1 The Respondent excepts, inter alia, to the judge’s conclusion that
it violated Sec. 8(a)(5) and (1) by abandoning the Travelers Health
Plan optional coverage provided under the expired contract. The Re-
spondent contends that, even in the absence of impasse, it was per-
mitted under the expired contract to unilaterally change medical
plans to an equivalent plan. We agree with the judge that the Re-
spondent’s change in health insurance coverage was unlawful. Art.
24 of the expired agreement provides in pertinent part: ‘‘The Com-
pany shall provide medical insurance coverage for employees and
dependents in an indemnity plan (Travelers Insurance or equivalent)
and an HMO Plan (Kaiser Foundation Health Plan B or equiva-
lent).’’ (Emphasis added.) Here, the Respondent eliminated the Trav-
elers Insurance indemnity plan and substituted Healthnet, an HMO
plan, thereby failing to maintain both types of health insurance cov-
erage as required by the expired contract.
1 As a result of the pleadings and the stipulations of counsel at the
trial, there were no evidentiary disputes. No witnesses testified.
Where not otherwise noted, the findings are based on the pleadings,
the stipulations of counsel, or stipulated or unobjected to exhibits.
CBC Industries, Inc. and International Association
of Machinists and Aerospace Workers, District
Lodge No. 94, Local Lodge 311, AFL–CIO.
Case 21–CA–28224
May 21, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND OVIATT
On July 8, 1992, Administrative Law Judge Clifford
H. Anderson issued the attached decision. The Re-
spondent filed exceptions and a supporting brief, and
the Charging Party filed a brief in support of the
judge’s decision.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions1 and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, CBC Industries, Inc., Com-
merce, California, its officers, agents, successors, and
assigns, shall take the action set forth in the Order.
Paul H. Fisch, Esq., for the General Counsel.
Mark C. Madden, Esq., of Pasadena, California, for the Re-
spondent.
Herbert M. Ansell, Esq., of Los Angeles, California, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
CLIFFORD H. ANDERSON, Administrative Law Judge. I
heard this case in trial on February 19, 1992, in Los Angeles,
California, pursuant to a complaint and notice of hearing
issued by the Regional Director for Region 21 of the Na-
tional Labor Relations Board (Board) on October 29, 1991,
based on a charge filed on August 19, 1991, docketed as
Case 21–CA–28224 and amended on September 30, 1991, by
International Association of Machinists and Aerospace Work-
ers, District Lodge No. 94, Local Lodge 311, AFL–CIO (the
Charging Party or the Union) against CBC Industries, Inc.
(Respondent or the Employer). Posthearing briefs were due
on April 6, 1992.
The complaint as amended at the hearing alleges that Re-
spondent bargained in bad faith with the Union respecting a
unit of its Commerce, California production and maintenance
employees commencing in June 1991 in violation of Section
8(a)(5) and (1) of the National Labor Relations Act (Act).
Respondent denies that it has violated the Act.
All parties were given full opportunity to participate at the
hearing, to introduce relevant evidence, to call, to examine
and cross-examine witnesses, to argue orally, and to file
posthearing briefs.
On the entire record, including helpful posthearing briefs
from the General Counsel, the Charging Party, and Respond-
ent, I make the following1
FINDINGS OF FACT
I. JURISDICTION
Respondent is a California corporation, with an office and
place of business in Commerce, California, where it is en-
gaged in the business of the manufacture and sale of brush-
ings. Respondent annually, in the course and conduct of its
business operations, sells and ships from its Commerce, Cali-
fornia facility goods and materials valued in excess of
$50,000 directly to customers located outside the State of
California and during the same period purchases and receives
at its Commerce, California facility goods and products val-
ued in excess of $ 50,000 from suppliers located outside the
State of California.
The complaint alleges, the answer admits, and, based on
the above I find that Respondent is an employer engaged in
commerce and in a business affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
II. LABOR ORGANIZATION
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
The following unit of Respondent’s employees (the unit)
has at all relevant times constituted a unit appropriate for
purposes of collective bargaining within the meaning of Sec-
tion 9(b) of the Act:
All production and maintenance employees employed
by Respondent at its facility located at 2000 Camfield
Avenue, Commerce, California; excluding all office
clerical employees, guards, watchmen and supervisors
as defined in the Act.
124 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 The contract at art. 11, sec. 2, step 4 (h) and (i) states:
(h) The arbitrator’s decision shall be final and binding on both
parties, except as limited in (i) below.
(i) The arbitrator shall not have to right to add to nor subtract
from nor modify any of the terms of this Agreement, and all de-
cisions must be within the scope and terms of this Agreement.
3 There were no disputes respecting the authority of the parties’
bargaining agents.
4 All dates refer to 1991 unless otherwise indicated.
5 All specifics of bargaining are derived from stipulations and/or
documentary evidence, no testimony was received.
The Union was certified as the exclusive representative for
purposes of collective bargaining of unit employees in 1976
and has at all times thereafter remained their collective-bar-
gaining representative.
During this period Respondent and the Union have been
parties to successive collective-bargaining agreements cover-
ing unit employees, the most recent of which was effective
by its terms for the period of June 1, 1988, to June 1, 1991
(the contract). The contract, inter alia, contained the follow-
ing terms:
1. Article 11—Grievance Procedure
The contract article provides a multi-step griev-
ance procedure culminating in binding arbitration.2
2. Article 24—Group Insurance
The contract article provides medical insurance
options, one of which is Travelers Insurance.
3. Article 40—Pension
The contract article provides for employee pension
coverage by and employer contributions to the Union
National Pension Fund for unit employees.
4. Article 48—Christmas Bonus
The contract article provides a Christmas bonus
for unit employees.
B. Bargaining3
1. Chronological overview
By letter dated March 21, 1991,4 the Union informed Re-
spondent that it proposed to modify the existing agreement
and sought to meet and bargain. By letter of March 29, Re-
spondent agreed to meet and identified its bargaining agent.
The Union did the same by letter of April 15. The parties
thereafter met 10 times on the following dates: April 24;
May 8, 15, 22, and 30; June 5, 13, and 27; August 14 and
23.
2. Bargaining in greater detail5
Before bargaining sessions began, the Union requested and
received information from Respondent. Respondent in turn
by letter dated April 23 informed the Union it was ‘‘losing
money,’’ invited union review of its financial circumstances,
and asserted an intent ‘‘to reduce labor costs whenever pos-
sible.’’
In the initial session on April 24, Respondent’s proposals
included elimination of Travelers Medical Insurance cov-
erage under article 24, elimination of the entire article 40
Pension, and other changes which would reduce labor costs.
At the May 8 session, the Union proposed various changes
favorable to its position and indicated proposals on other as-
pects of the contract would follow. Respondent’s proposals
reiterated elimination of Travelers Medical Insurance cov-
erage as an employee option in favor of coverage supplied
by a health maintenance organization (HMO), Healthnet, and
elimination of the pension plan coverage and Employer con-
tributions to it. It also included elimination of the Christmas
Bonus contract article 48. It did not address article 11—
Grievance Procedure save by proposing a new grievance
form by letter dated April 29. By letter dated May 9, Re-
spondent proposed limitations to the arbitrator’s authority
through new language in article 11, section 2, step 4 (j). Ad-
ditional communications were exchanged between sessions
including an employer modification to its article 24 proposal
on May 13. In this period the Union accepted Respondent’s
offer to peruse its financial condition and utilized an account-
ing firm to do so. The May 15, 22, and 30 sessions were
held primarily involving further presentation of proposals.
These proposals were from time to time clarified by ex-
change of correspondence during the period. The existing
contract expired on June 1, 1991.
Bargaining sessions were held on June 5 and 13. The
Union, in letters from its counsel to respondent counsel on
June 13 and 18, confirmed certain Respondent proposals,
tendered union counterproposals, and enumerated certain ten-
tative agreements. The June 18 letter from union counsel re-
cited that the parties had tentatively agreed to delete the
Christmas bonus and recited other tentative agreements and
disagreements as of the June 13 session. Counsel for Re-
spondent did the same for the June 27 negotiating session by
letter to the Union dated July 1. The letter asserts tentative
agreement on contract provisions including, inter alia, a wage
freeze the first year of the new contract with a wage re-
opener at the end of the first and second years of the 3-year
contract, tentative union agreement to various respondent
proposals including deletion of the Christmas bonus. This let-
ter was augmented by the union counsel’s letter to respond-
ent counsel dated July 8 and respondent counsel’s response
of July 10. Additional exchange of correspondence further
clarified positions.
No bargaining sessions were held in July. The final two
bargaining sessions occurred on August 14 and 23. The in-
stant charge was filed August 19. By letter dated August 26
to respondent counsel, union counsel recited the negotiations
through August 23. The letter states, inter alia, that each side
had no further proposals to make. The letter concluded:
7. The Union also advised that it did not have any
further proposals to make. The Union advised, in addi-
tion, that it would further review all of the subjects of
bargaining carefully and attempt to find a means to ar-
rive at a collective bargaining agreement at the next
bargaining meeting.
8. As a result of the discussion, the Union acknowl-
edged that all of its acquiescence to proposals submit-
ted by the Company, and its withdrawal of demands
previously tendered, were tentative and subject to the
arriving at an overall mutually acceptable collective
bargaining agreement.
9. The parties agreed that the U.S. Mediator would
be in contact and schedule the next date of meeting.
125CBC INDUSTRIES
Counsel for Respondent responded by letter dated September
3. Counsel for the Union answered by letter dated September
4. Each viewed the position of the other as recalcitrant and
inflexible. No changes in bargaining positions were made.
Insofar as the record reflects, no additional bargaining ses-
sions were sought by any party, were actually held, or
changes in bargaining positions communicated.
C. Other Events
After the June 1, 1991 expiration of the collective-bargain-
ing agreement Respondent made various changes in em-
ployee terms and conditions of employment.
In June various grievances were filed dealing with alleged
improper terminations, layoffs, or warnings which the Union
attempted to process under the terms of the contract. By
communications dated June 17, July 17, 23, and 29, counsel
for Respondent informed the Union that the grievances ad-
vanced by the Union would not be processed under the terms
of the expired contract. By letter dated January 22, 1992, to
counsel for the Union, counsel for Respondent denied a re-
quest to proceed to arbitration on a grievance filed on Janu-
ary 12, 1992, alleging an unfair layoff. Respondent asserted
no contract existed which contained arbitration provisions
and noted, but rejected, the argument of the Union that the
expired agreement survived for this purpose.
Respondent ceased making payments to the contractual
pension fund after May 1991. By letter dated July 29 to the
relevant pension fund, respondent counsel asserted:
Pursuant to Section 6.08 of the Plan which reads:
‘‘The participation of a contributing Employer
shall terminate:
(a) When the Employer is no longer obligated by
a Collective Bargaining Agreement to make con-
tributions with respect to persons covered by this
. . . Plan. . . .’’
please be advised that no collective-bargaining agree-
ment has existed between the Company and the Union
since 6/1/91.
Therefore the obligation of the Employer to make
contributions to the Plan has ceased.
If you disagree with the above conclusion, please
contact the undersigned.
Respondent did not communicate with the Union nor the
fund before this letter that it was discontinuing pension pay-
ments.
The I.A.M. National Pension Fund and counsel for Re-
spondent thereafter exchanged letters. On November 12,
1991, the fund again wrote counsel for Respondent asserting
that:
the Plan must rely on the parties, or ultimately the
NLRB, to determine whether the obligation of the Em-
ployer to make contributions has continued beyond the
expiration date of the collective bargaining agreement.
The Trustees have taken no action to terminate the
participation of [Respondent], nor is there any provision
under the Plan requiring termination if the NLRB deter-
mines [Respondent’s] obligation to contribute has not
ended. In other words, if the Employer is obligated
under the National Labor Relations Act to contribute to
this Plan beyond the expiration date of its collective
bargaining agreement, this Plan will accept those con-
tributions.
By memorandum to all unit employees covered by Travel-
ers medical and dental plans dated August 6, Respondent an-
nounced that unit employees covered by Travelers would be
transferred to Healthnet for medical coverage and California
Dental Plan for dental coverage. The parties stipulated that
Respondent put the described change into effect on Septem-
ber 1.
Respondent discontinued its Christmas bonus payments
issuing no Christmas bonus to unit employees in December
1991.
D. Analysis and Conclusions
1. Allegations of the amended complaint
Paragraphs 8 and 9 of the amended complaint assert:
8.
(a) Beginning in June 1991, and continuing to date,
Respondent ceased to make contributions on behalf of
the unit employees to the Pensions Trust Fund required
by the terms of the [expired] agreement. . . .
(b) Beginning in or about June 1991, and continuing
to date, Respondent has refused to process unit employ-
ees’ grievances pursuant to the grievance procedure es-
tablished by the terms of the [expired] agreement. . . .
(c) In December 1991, Respondent failed to pay unit
employees their Christmas bonuses as required by the
terms of the [expired] agreement. . . .
(d) Respondent engaged in the acts and conduct de-
scribed above in paragraph 8(a) through 8(c) above,
without prior notification to the Union and without af-
fording the Union an opportunity to negotiate and bar-
gaining as the exclusive representative of Respondent’s
unit employees with respect to such acts and conduct.
9.
(a) Since on or about April 24, 1991, and continuing
to date, Respondent and the Union have bargained over
a new collective bargaining agreement without bargain-
ing to impasse.
(b) On or about September 1, 1991, Respondent
changed the unit employees’ Health and Welfare and
Dental Plans by eliminating the unit employees[’] cov-
erage with Travelers Insurance as required by the terms
of the [expired] agreement.
(c) Respondent engaged in the acts and conduct de-
scribed in paragraph 9(b) above, without affording the
Union an opportunity to negotiate and bargain as the
exclusive representative of Respondent’s unit employ-
ees with respect to such acts and conduct.
Subsequent paragraphs of the complaint allege that the con-
duct alleged in paragraphs 8 and 9 violate Section 8(a)(5)
and (1) of the Act.
126 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 Respondent does suggest that the contract by its terms allows an
employer to terminate the pension plan and that it was privileged to
eliminate the grievance procedure when the contract expired. These
arguments are discussed separately, infra.
2. Arguments of the parties
The action paragraphs of the complaint, 8(a), (b), (c), 9(a),
and (b), are not disputed. Rather the parties litigated whether
Respondent’s conduct was proper under the Act.
The General Counsel argues that the contract continued in
effect in relevant part after its expiration. Thus, counsel for
the General Counsel cites KBMS, Inc., 278 NLRB 826, 849
(1986), for the proposition that pension plans survive the ex-
piration of a contract. He cites Columbia Portland Cement
Co., 294 NLRB 410 (1989), and Indiana & Michigan Elec-
tric Co., 284 NLRB 53 (1987), for the survival of a griev-
ance procedure and he argues similarly for the health care
and Christmas bonus contract provisions.
From his survivability assertion, the General Counsel then
argues that ‘‘an employer violates its duty to bargain if dur-
ing negotiations, he unilaterally institutes changes in existing
terms and conditions of employment’’ citing NLRB v. Katz,
369 U.S. 736 (1962).
Respondent does not so much challenge the legal argu-
ments of the General Counsel noted above,6 but rather con-
tends it was privileged to take the actions it did as a result
of reaching an impasse in collective bargaining. Counsel for
Respondent in his opening statement succinctly stated its po-
sition:
The issue in this case involves the survivability of
terms and conditions of employment after the expiration
of the collective bargaining agreement.
The company contends that an impasse occurred on
or before June 27, 1991 when neither party indicated
any substantial change in their position, nor did they do
so subsequently, and that the unilateral changes were
encompassed by the Respondent’s pre-impasse propos-
als.
The company, prior to negotiation, advised the
Union that it was losing money and offered to allow a
Union-selected CPA review its financial records, which
the Union did.
Because it was losing money, the company made a
number of proposals to reduce benefits, but not to re-
duce wages. Among the proposals involved savings
were the elimination of the pension plan, transfer of
those employees who were in the indemnity medical
plan to the HMO plan on which many unit members
were already in such plan and third, the elimination of
the Christmas bonus.
Respondent will prove by its exhibits that the Union,
after the contract expired on 6–1–91, attempted to sur-
face bargain indefinitely so that Respondent’s proposals
to reduce labor costs could be postponed indefinitely.
Respondent on brief cites authority for the proposition that
an employer may implement its last proposals when an im-
passe in bargaining has been reached. Oxford Chemicals, 286
NLRB 187 (1987); Presto Casting Co., 262 NLRB 346
(1982). Respondent further argues that the changes alleged as
unfair labor practices: i.e., pension, grievance procedure, and
Christmas bonus discontinuance as well as medical and den-
tal coverage changes—all resulted from Respondent’s imple-
mentation of its last offer following impasse.
The General Counsel and the Charging Party on brief chal-
lenge Respondent’s assertion that impasse was reached dur-
ing bargaining. The General Counsel argues brief at 8:
The Board has held ‘‘absent a valid preexisting impasse
or the consent of the Union, an employer, during the
course of negotiations, is not free to implement pro-
posed changes or [even] those tentatively agreed to by
the parties.’’ Marriott In-Flite Services, 258 NLRB 755
fn. 2 (1981), Gresham Transfer, 272 NLRB 484, 485–
486 (1984). Moreover, the Board has held that a genu-
ine impasse in negotiations exists when despite the par-
ties’ best efforts to achieve an agreement, neither party
is willing to move from its position. Until the collective
bargaining process [has] been exhausted, no impasse
can occur. Excavation Construction Co., 248 NLRB
649, 650 (1980).
3. Analysis and conclusions
a. Were the parties at impasse in bargaining at
any time?
(1) Legal standard
The question of whether or not impasse existed at a par-
ticular time or times is one of fact. It is also a question of
some subtlety and one which the Board and the courts have
grappled with on many occasions. The Charging Party and
Respondent cite the Board’s decision in Taft Broadcasting
Co., 163 NLRB 475 (1967), enfd. sub nom. AFTRA Kansas
City Local v. NLRB, 395 F.2d 622 (D.C. Cir. 1968), for its
discussion of impasse. The Board stated at 478:
Whether a bargaining impasse exists is a matter of
judgment. The bargaining history, the good faith of the
parties in negotiations, the length of the negotiations,
the importance of the issue or issues as to which there
is disagreement, the contemporaneous understanding of
the parties as to the state of negotiations are all relevant
factors to be considered in deciding whether an impasse
existed.
Other cases have dealt with the often elusive concept of
impasse. In Dust-Tex Service, 214 NLRB 398 (1974), the
Board held there was no impasse where the employer deter-
mined to change its wage structure immediately on expira-
tion of the agreement irrespective of the state of negotiations.
Huck Mfg. Co. v. NLRB, 693 F.2d 1176 (5th Cir. 1982),
noted the importance of continuing to meet and bargain.
The Board in Marriott In-Flite Services, 258 NLRB 755
(1981), enfd. 729 F.2d 1441 (2d Cir. 1983), cert. denied 464
U.S. 829 (1983), noted that the union’s assertion during ne-
gotiations that it would consider the employer’s final pro-
posal was a factor indicating that impasse had not occurred.
In Excavation-Construction, 248 NLRB 649, 650 (1980), the
Board stated:
A genuine impasse in negotiations exists when, de-
spite the parties’ best efforts to achieve an agreement,
neither party is willing to move from its position. Until
127CBC INDUSTRIES
7 Respondent early on made it clear to the Union that its economic
circumstances required that it achieve substantial labor cost savings.
Such a statement is relevant to determining if an impasse has been
reached. Hayward Dodge, 292 NLRB 434 (1989). On this record
however the single statement made was early, isolated, and not
raised thereafter during negotiations through June.
the collective bargaining process had been exhausted no
impasse can occur.
In Roman Iron Works, 282 NLRB 725 (1987), the admin-
istrative law judge in finding that impasse had not occurred,
a holding sustained by the Board, stated at 731:
The burden of establishing that an impasse existed or
that Respondent had a good-faith belief that an impasse
existed during the period when it was granting unilat-
eral wage increases is on the Respondent.
The Board has also noted that the parties’ use of terms
during bargaining such as ‘‘impasse’’ or ‘‘final offer’’ or
‘‘deadlock’’ is relevant to the question of impasse, Presto
Casting Co., 262 NLRB 346 (1982). So, too, are statements
by one side respecting what the other side must do to avoid
impasse, Hotel Roanoake, 293 NLRB 182 (1989). Similarly,
the fact that no statements at all had been made during bar-
gaining respecting discontinuance of contract terms is a rel-
evant factor in the equation, Tile, Terrazzo & Marble Con-
tractors Assn., 287 NLRB 769 (1987).
(2) Analysis
The instant case is highly unusual in that there is very lit-
tle record evidence of what took place at each bargaining
session. Thus there was no testimony offered by any party
nor bargaining notes or other recitation of session events
other than the noted correspondence containing summary ref-
erences to actions taken at a few of the sessions. The factual
record, such as it is, is set forth in main part, supra.
Further the record is unusual in that, in so far as the
record reflects, there was no announcement or discussion of
Respondent’s determination to end its pension payments or
notification of the Union of its actual discontinuance of pen-
sion payments after May 1991. Nor were other statements
made to the Union before any of the changes at issue were
implemented that concessions were necessary, that impasse
or deadlock had been reached, that Respondent was consider-
ing implementing its last offer, that bargaining was dragging
on, that economic necessity required greater speed in nego-
tiations, or other similar statements. Respondent does not
argue such statements were made during bargaining. The
record contains, but the bare bones of the negotiations. The
flesh of which such statements would be a part is singularly
absent.
As recited in the discussion of bargaining sessions, supra,
the parties met regularly, exchanging proposals and counter-
proposals and reaching agreement on aspects of the new con-
tract through June. While Respondent contends impasse oc-
curred on or before June 27, as noted supra, there is little
to indicate that difficulties in bargaining had occurred. Rather
to the contrary, the record suggests that at this stage of nego-
tiations an orderly process of bargaining was proceeding
apace and had resulted in important tentative agreements of
economic importance to Respondent such as a wage freeze
for employees in the first year of the contract, deletion of the
Christmas bonus, and establishing the new contract’s dura-
tion. To repeat this record is simply devoid of any objective
evidence of a failure of the bargaining process to work as
intended to narrow differences between the parties and pro-
mote agreement. Further, as noted supra, the record is devoid
of any evidence that either party through June regarded the
process as taking too long, at deadlock, at impasse or that
any party expressed unhappiness with the pace or progress
of bargaining.7
Given all the above, I find that there is simply no evidence
to support a finding on this record that the parties were at
impasse at any time through June 1991 or that Respondent’s
agents could have held a reasonable belief that they were at
impasse during this period.
Further, I find substantial evidence that Respondent was
determined to abandon certain terms of the contract at its ex-
piration irrespective of the state of negotiations. Thus, Re-
spondent discontinued pension payment after May 1991
without telling the Union even though bargaining was still in
its early stages when proposals were still being formulated
and exchanged. Further Respondent refused to process griev-
ances under the contract as early as June 17, even though the
grievance language of the expired contract was to be carried
forward into the new contract save as to minor matters noted
above. As the Board held in Dust-Tex Services, 214 NLRB
398 (1974), no impasse arises in such a context.
Respondent’s argument runs that, if impasse had not oc-
curred as of a particular bargaining session or date, surely it
did thereafter. Thus Respondent argues, for example, that by
Christmas 1991 when it omitted a bonus for unit employees,
an impasse had of necessity occurred.
The Board notes in Marriott In-Flite Services, 258 NLRB
755 (1981), enfd. 729 F.2d 1441 (2d Cir. 1983), cert. denied
464 U.S. 829 (1983), at 766:
It is also settled law than an impasse may not be
urged as a defense to a unilateral change in working
conditions if it has been caused by the failure of one
of the parties to bargain in good faith. [Shipbuilders
(Bethlehem Steel Co.) v. NLRB, 320 F.2d 615, 621 (3d
Cir. 1963).]
It seems evident on this record that any break in the bargain-
ing process after Respondent discontinued pension payments,
after Respondent refused to process grievances, or after Re-
spondent discontinued Travelers medical coverage, all of
which I find were wrongful actions infra, was brought about
by Respondent’s improper acts and, therefore, may not be
urged in Respondent’s defense. I find therefore that at all rel-
evant times in the bargaining, no impasse was ever reached.
b. Was Respondent privileged to undertake the admitted
changes absent impasse?
I have found, supra, that no impasse occurred in the bar-
gaining at relevant times. The allusion to survivability in Re-
spondent’s opening statement and certain asserted propo-
sitions on brief respecting an employer’s right to unilaterally
discontinue expired contract terms suggests a dispute respect-
128 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 The decisional law addresses unilateral changes made in the face
of economic necessity. There was no record evidence that Respond-
ent’s circumstances brought those cases into play nor did Respond-
ent argue such a proposition.
9 No issue exists of impasse justifying implementation a new
grievance procedure which had been part of Respondent’s proposals,
inasmuch as the parties agreed in bargaining that the old contract’s
grievance language was to be carried forward into a new contract
essentially unchanged except for certain limitations on the arbitrator
which were tentatively agreed to by the parties and which were
never raised respecting the grievances involved.
ing Respondent’s rights to take the action it did even in the
absence of a bargaining impasse or union waiver.8
Respondent on brief at 8 argues: ‘‘Whether pension obli-
gations survive . . . depends on the trust agreement with
the pension fund.’’ The contract language and the position of
the fund, as set forth in the correspondence between the fund
and Respondent, quoted in part supra, do not support the
proposition that the contract’s expiration ended Respondent’s
obligations absent impasse or union waiver. I find, consistent
with the fund’s letter to Respondent quoted supra, that the
contract pension language does not provide for unilateral ces-
sation of contributions by an employer at the contract’s expi-
ration. Accordingly, the General Counsel’s cited case, KBMS,
Inc., 278 NLRB 826, 849 (1986), and cases cited therein are
in point and controlling.
Respondent on brief at 8–9 argues that: ‘‘Because interest
arbitration clauses are permissive subjects of bargaining, the
Employer may repudiate a nonmandatory term in the pre-
vious agreement.’’ The grievance clause at issue does not in-
volve interest arbitration. Regular grievance and arbitration
clauses, such as that at issue here, are mandatory subjects of
bargaining.
Respondent argues further on brief at 9: ‘‘The right to be
discharged [only] for ‘just cause’ is strictly a creature of the
collective bargaining agreement and [does] not extend be-
yond the expiration of the agreement.’’ The General Coun-
sel’s cited cases, Columbia Portland Cement Co., 294 NLRB
410 (1989), and Indiana & Michigan Electric Co., 284
NLRB 53 (1987), make clear that an employer is not obli-
gated to carry all grievances forward through arbitration
under an expired contract. The cases also make clear, how-
ever, that the employer is not privileged to simply reject and
refuse to utilize the entire grievance and arbitration proce-
dure simply because the contract has expired.9
In the instant case, Respondent did not seek to explain or
justify its refusal to follow the grievance provisions of the
contract to the Union save to assert that the contract had ex-
pired and the provisions therefore lapsed. The Board in Indi-
ana & Michigan Electric Co., supra, specifically held that an
employer’s blanket rejection of the grievance and arbitration
process renders its entire course of conduct a wholesale repu-
diation of its obligation to arbitrate and obviates any close
analysis of what could or could not properly be refused arbi-
tration under the cases. Based on that decision, I find Re-
spondent was without justification for refusing to honor the
expired grievance and arbitration clause. It follows therefore
on the basis of the cases cited that Respondent’s arguments
to the contrary are without merit. I find therefore that the
changes made by Respondent as found above are not justi-
fied in the absence of impasse.
c. Summary and conclusion
I have found supra that Respondent undertook the changes
alleged in the complaint. I have further found that the
changes were undertaken without the consent or other ap-
proval of the Union. I have found that at no time was an im-
passe reached in negotiations between Respondent and the
Union. Finally, I have found that Respondent was not privi-
leged to make the changes at issue here by virtue of the ex-
piration of the contract.
Given these findings I find and conclude that Respond-
ent’s changes in unit employees’ terms and conditions of em-
ployment were in violation of Respondent’s duty to bargain
in good faith with the Union and therefore violated Section
8(a)(5) and (1) of the Act. Thus, I sustain the allegations of
the General Counsel in paragraphs 8, 9, and subsequent para-
graphs of the complaint.
REMEDY
Having found the Respondent engaged in certain unfair
labor practices, I shall recommend that it be ordered to cease
and desist therefrom and to take certain affirmative action
designed to effectuate the policies of the Act.
I shall recommend that Respondent be required to restore
the status quo ante and thereafter to honor the terms of the
contract at issue unless and until the parties reach agreement
on a new contract, reach a valid impasse in bargaining, or
the Union agrees to changes. I shall also recommend that Re-
spondent be ordered to make all unit employees whole for
the injury done them by undertaking the following.
Respecting the 1991 Christmas bonus, Respondent shall
make all employees whole, including former employees as
appropriate, who would have received a Christmas bonus in
1991, but for Respondent’s illegal repudiation of that con-
tract term. Interest shall be paid on the bonus in accordance
with New Horizons for the Retarded, 283 NLRB 1173
(1987).
Respecting the pension plan, Respondent shall make all
current and former employees whole who suffered a diminu-
tion in pension benefits as a result of Respondent’s refusal
to continue honoring this contract provision. Further, Re-
spondent shall make all payments necessary to restore cov-
erage under the agreement, including back payments and in-
terest as required by the Board in Merryweather Optical Co.,
240 NLRB 1213 (1979).
Respecting the grievance clause of the contract, I shall rec-
ommend that the Board’s remedy in Indiana & Michigan
Electric Co., supra, be directed here. Thus Respondent shall
process all grievances which it has refused to process be-
cause of the expiration of the grievance language of the con-
tract up to arbitration. Further, Respondent shall be required
to process through arbitration, if necessary, all grievances
which under the Supreme Court’s decision in Nolde Bros. v.
Bakery Workers Local 358, 430 U.S. 243 (1977), arise under
the contract. Differences or disagreements respecting the sta-
tus of particular grievances under this directed remedy shall
be reserved to the compliance stage of these proceedings, if
necessary.
Respecting the health benefits coverage, I shall rec-
ommend that Respondent reinstate the Travelers medical plan
coverage option for unit employees and make all employees
whole who suffered financial or other loss or increased medi-
129CBC INDUSTRIES
10 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
11 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
cal or insurance expense as a result of losing the coverage
options improperly discontinued by Respondent as noted
above with interest in accordance with the cases cited supra.
I shall also recommend Respondent be required to pre-
serve and, on request, make available to the Board or its
agents for examination and copying, all payroll records, so-
cial security records, timecards, personnel records and reports
and all other records necessary to analyze the amount of
money due under the terms of the Order and to otherwise de-
termine that the Order has been fully complied with.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The following unit of Respondent’s employees (the
unit) has at all relevant times constituted a unit appropriate
for purposes of collective bargaining within the meaning of
Section 9(b) of the Act:
All production and maintenance employees employed
by Respondent at its facility located at 2000 Camfield
Avenue, Commerce, California; excluding all office
clerical employees, guards, watchmen and supervisors
as defined in the Act.
4. The Union has at all times material been the exclusive
collective-bargaining representative of employees in the unit.
5. Respondent violated Section 8(a)(5) and (1) of the Act
by engaging in the following acts and conduct following the
June 1991 expiration of its contract with the Union concern-
ing unit employees without the agreement of the Union:
(a) Discontinuing contract pension coverage.
(b) Abandoning Travelers Health Plan optional coverage
under the contract.
(c) Failing and refusing to honor the grievance provisions
of the contract.
(d) Failing and refusing to honor the Christmas bonus pro-
visions of the contract.
6. The unfair labor practices described above are unfair
labor practices affecting commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended10
ORDER
The Respondent, CBC Industries, Inc., Commerce, Califor-
nia, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with the Union re-
specting unit employees.
(b) Discontinuing contract pension coverage.
(c) Abandoning Travelers Health Plan optional coverage
under the contract.
(d) Failing and refusing to honor the grievance provisions
of the contract.
(e) Failing and refusing to honor the Christmas bonus pro-
visions of the contract.
(f) In any like or related manner violating the provisions
of the National Labor Relations Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Bargain on request with the Union respecting a new
contract for unit employees.
(b) Restore, honor, and continue the terms and conditions
of the contract with the Union concerning unit employees
which expired by its terms in June 1991, including pension
coverage, Travelers Medical coverage, grievance provisions,
and Christmas bonuses, until the parties sign a new agree-
ment, until the Union agrees to changes in coverage, or until
the parties reach a valid impasse in negotiations.
(c) Make whole employees and former employees for any
and all losses incurred as a result of Respondent’s unlawful
discontinuance of contractual benefits, including pension pro-
visions, grievance provisions, medical benefits options, and
Christmas bonuses, with interest, as provided in the remedy
section of this decision.
(d) Process all grievances Respondent has refused to proc-
ess based on the expiration of the contract, as provided in
the remedy section of this decision.
(e) Preserve and, on request, make available to the Board
or its agents for examination and copying, all payroll records,
social security payment records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of money due under the terms of this Order and, fur-
ther, to insure that the terms of this Order have been fully
complied with.
(f) Post at its Commerce, California facility copies of the
attached notice marked ‘‘Appendix.’’11 Copies of the notice,
on forms provided by the Regional Director for Region 21
in English and such additional languages as the Regional Di-
rector determines are necessary to fully communicate with
employees, after being signed by Respondent’s authorized
representative, shall be posted by Respondent immediately
upon receipt and maintained for sixty (60) consecutive days
in conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall be
taken by Respondent to ensure that the notices are not al-
tered, defaced, or covered by other material.
(g) Notify the Regional Director in writing within 20 days
from the date of this Order what steps Respondent has taken
to comply.
130 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of
their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.
Federal labor law under the National Labor Relations Act
does not allow an employer to abandon or discontinue fol-
lowing the terms of a collective-bargaining agreement with
a labor organization representing the employees when it ex-
pires. Rather employers are obligated to continue certain of
the terms of the contract until a new contract is reached, the
union agrees to changes, or a valid impasse is reached in col-
lective bargaining.
WE WILL NOT refuse to bargain in good faith with Inter-
national Association of Machinists and Aerospace Workers,
District Lodge No. 94, Local Lodge 311, AFL–CIO as the
exclusive representative of our employees in the unit set
forth below for purposes of collective bargaining concerning
wages, hours, and working conditions of unit employees.
WE WILL NOT abandon, discontinue, or refuse to continue
to follow the terms of our contract with the Union which ex-
pired in June 1991 unless and until we sign a new contract
with the Union, the Union agrees to changes, or we reach
a valid impasse in collective bargaining.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce our employees in their exercise of the
rights guaranteed them in Section 7 of the National Labor
Relations Act.
WE WILL bargain in good faith with the Union as the ex-
clusive representative of all employees in the unit described
below with respect to wages, hours, and other terms and con-
ditions of employment.
WE WILL restore and maintain the contract’s terms and
conditions of employment, including pension coverage, Trav-
eler’s Medical plan options, Christmas bonus provisions, and
grievance provisions until we sign a new contract, the Union
agrees to changes in these terms and conditions of employ-
ment, or we reach a valid impasse in collective bargaining.
WE WILL make whole our employees who suffered losses
as a result of our improper discontinuance of pension cov-
erage, medical coverage options, Christmas bonus provisions,
and contract grievance provisions, with interest, as more
fully set forth in the decision in this matter.
WE WILL make all necessary contributions and retroactive
or back payments necessary to restore and continue the con-
tractual pension and health benefits improperly discontinued
since the expiration of the contract.
WE WILL process all grievances we have refused to proc-
ess after the expiration of the collective-bargaining agree-
ment as more fully set forth in the remedy section of this
decision.
The collective-bargaining unit represented by International
Association of Machinists and Aerospace Workers, District
Lodge No. 94, Local Lodge 311, AFL–CIO is:
All production and maintenance employees employed
by CBC Industries, Inc. at its facility located at 2000
Camfield Avenue, Commerce, California; excluding all
office clerical employees, guards, watchmen and super-
visors as defined in the Act.
CBC INDUSTRIES, INC.