CII Carbon

National Labor Relations Board - Board Decisions

Aug 25, 2000

331 N.L.R.B. 1157 (N.L.R.B. 2000)

CII CARBON, L.L.C. 1157
CII Carbon, L.L.C. and United Steelworkers of
America, AFL–CIO, CLC. Cases 15–CA–14487–
2, 15–CA–14487–3, 15–CA–14566, and 15–CA–
14937
August 25, 2000
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On December 22, 1999, Administrative Law Judge
George Carson II issued the attached decision. The
Charging Party filed exceptions and a supporting brief,
the Respondent filed an answering brief, and the Charg-
ing Party filed a reply brief.
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 decided to
affirm the judge’s rulings, findings,1 and conclusions2
and to adopt the recommended Order.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
Patricia A. Adams, Esq., for the General Counsel.
James D. Morgan, Esq., for the Respondent.
Richard P. Rouco, Esq., for the Charging Party.
DECISION
STATEMENT OF THE CASE
GEORGE CARSON II, Administrative Law Judge. This
case was tried in New Orleans, Louisiana, on October 18, 19,
20, and 21, 1999.1 The second consolidated complaint issued
on January 27, 1999.2 The complaint alleges that Respondent
violated Section 8(a)(3) of the National Labor Relations Act
(the Act) by locking out employees, violated Section 8(a)(3)
and (5) of the Act by unilaterally changing terms and condi-
tions of employment, and violated Section 8(a)(5) by refusing
to arbitrate grievances. Respondent’s answer denies any viola-
tion of the Act.

1 Member Hurtgen agrees that the Respondent did not violate Sec.
8(a)(5) of the Act by making unilateral changes to the Operations Per-
formance and Market Economics Program (OPME) bonus program.
Under a “contract coverage” analysis, rather than a “waiver” analysis,
the Respondent’s conduct was privileged by the actual terms of the
OPME agreement. See NLRB v. Postal Service, 8 F.3d 832 (D.C. Cir.
1993). The agreement clearly states that “Management will establish
Performance Criteria and their respective ranges.” Furthermore, since
the implementation of the plan in 1992, the Respondent has consis-
tently made changes to the performance criteria without first negotiat-
ing with the Union. Thus, in Member Hurtgen’s view, the past practice
of the parties, as well as the language of the agreement itself, establish
that the Respondent was entitled to make unilateral changes to the
bonus program.
2 In adopting the judge’s conclusion that the permanent subcontract-
ing of the dock work did not violate Sec. 8(a)(5), Member Hurtgen does
not rely on the judge’s rationale that the Respondent’s conduct was
privileged because it was consistent with the terms of the offer that
Respondent lawfully implemented after the bargaining impasse be-
tween the Respondent and the Union. Rather, Member Hurtgen relies
on the fact that no bargaining unit employees were laid off or otherwise
adversely affected as a result of the subcontracting. Since the subcon-
tracting therefore had no “material, substantial and significant” impact
on the employees, the Respondent’s decision to subcontract the dock
work was not unlawful. See Peerless Food Products, 236 NLRB 161
(1978).
1 All dates are 1997 unless otherwise indicated.
2 The charge in Case 15–CA–14487–2 was filed on September 22
and was amended on January 14 and April 30, 1998. The charge in
Case 15–CA–14487–3 was filed on October 6 and amended on April
30, 1998. The charge in Case 15–CA–14566 was filed on December 2
and amended on April 30, 1998. The charge in Case 15–CA–14937 was
filed on July 24, 1998, and amended on January 4, 1999. Case 15–CA–
14487–4 was amended out of the complaint at the hearing. Charles G.
Vicknair was deleted as an alleged discriminatee.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by all parties,3 I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, CII Carbon, L.L.C. a limited liability com-
pany, is engaged in the manufacture and processing of calcined
coke at facilities in Mississippi and Louisiana at which it annu-
ally purchases and receives raw materials valued in excess of
$50,000 directly from points located outside the State of Lou-
isiana and from which it annually sells and ships products val-
ued in excess of $50,000 directly to points located outside the
State of Louisiana. The Respondent admits, and I find and con-
clude, that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
The Respondent admits, and I find and conclude, that United
Steelworkers of America, AFL–CIO, CLC, the Union, is a la-
bor organization within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Background
Respondent operates four facilities, one in Purvis, Missis-
sippi, and the others in Chalmette, Norco, and Gramercy, Lou-
isiana, respectively, all of which produce calcined coke. Cal-
cined coke is obtained from untreated coke, referred to as green
coke, which is a byproduct of petroleum refining. At Respon-
dent’s facilities, the green coke is processed through rotating
kilns which heat it to over 2000 degrees, thereby removing
moisture and volatile content. The calcined coke thus produced
is shipped to aluminum smelters throughout the world where it
is further processed into anodes that are used in the production
of aluminum.
Respondent’s facility at Gramercy is located on the north
bank of the Mississippi River. It is Respondent’s only facility
with a dock. The dock on the river provides access to barges
that bring green coke to the facility and take calcined coke from
the facility. The facility covers approximately 40 acres. The
western portion of the facility, well over half of the total acre-
age, is covered with thousands of tons of green coke. The proc-
essing portion of the facility consists of the kiln in which the
green coke is converted to calcined coke, two large storage
silos, referred to as domes, in which the calcined coke is stored
prior to shipment, and multiple conveyor belts to carry the
green coke to the kiln and the calcined coke from the kiln to the
two large storage domes. Both green and calcined coke are also
received by truck, the green coke coming from nearby petro-
leum refineries and the calcined coke coming from Respon-

3 Respondent’s motion to file a reply brief is denied.
331 NLRB No. 155
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1158
dent’s other facilities. Green coke is dumped in an area of the
green coke storage area. Trucks carrying calcined coke dump it
onto a grate in a garage-like building referred to as the “load-
out building.” A conveyer beneath the grate transports this
calcined coke to the storage domes. The conveyors that trans-
port the calcined coke from the kiln and from under the load-
out building to the domes rise to a control tower where an op-
erator directs the placement of the calcined coke into dome 1 or
2. The domes are filled from the top, producing conical piles
that contain thousands of tons of calcined coke. When a dome
is sufficiently full, a barge comes to the dock and is filled from
the domes by a conveyor that runs to the dock.
Respondent has recognized the Union as the exclusive col-
lective-bargaining representative for the approximately 80 pro-
duction and maintenance employees at all four locations since it
acquired the plants in 1989.4 In 1997, there were 28 unit em-
ployees at the Gramercy plant. Four employees per shift were
involved in the operation of the control tower and conveyers.
On weekends, during the 12-hour night shift from 6 p.m. until 6
a.m., only the four operating employees assigned to that shift
would be working. Operators not working and the maintenance
employees who comprise the rest of the unit at Gramercy
would not normally be present. Supervision on this shift was
minimal or nonexistent.
The parties successfully negotiated collective-bargaining
agreements in 1991 and 1994. The 1994 contract, by its terms,
expired on April 30. In February, the parties began negotiations
for a new contract. Union Staff Representative James Pepitone
characterized the negotiations as “tense.” Respondent made
several proposals that were unacceptable to the Union, includ-
ing changes in the subcontracting and seniority clauses of the
contract. The parties failed to reach agreement and, upon expi-
ration of the contract, the Union engaged in a strike. After 1
day, the Union made an unconditional offer to return to work.
Scheduling the return to work resulted in the unit employees
losing a second day of work. The contract was extended until
May 22.
On May 2, after the employees had returned to work, several
employees at the Norco plant were advised of a short layoff for
operational reasons. On May 3, property damage to an electri-
cal control panel and air-conditioner was discovered at the
Norco plant. Law enforcement authorities were notified, but the
investigation conducted at that time did not result in the perpe-
trators being identified.
Prior to the expiration of the contract, at the Gramercy plant,
employees had begun demonstrating their support for the Un-
ion’s bargaining position by eating their lunch together at the
flagpole. Following the strike, these employees began engaging
in informational picketing in support of the Union’s bargaining
demands before and after work. Shop Steward Bill Fleming
advised Plant Manager Dick Holmes of what the union mem-
bers were going to be doing. Union members at the Norco and
Chalmette plants engaged in similar activity. There was no
interference in any of the foregoing protected activity.

4 The recognized appropriate unit is: All hourly production and
maintenance employees at the Gramercy, Norco, Chalmette, and Purvis
plants of the Company, but excluding managers, officers, superinten-
dents, assistant superintendents, foremen, security guards, salesmen,
office clerical employees, and any other supervisory employees with
authority to hire, promote, discharge, discipline, or otherwise effect
changes in the status of employees or effectively recommend such
action.
On May 22, the date of expiration of the agreed on exten-
sion, Respondent made a final offer to the Union. At the request
of Staff Representative Pepitone, Respondent forwarded its
final offer in writing to the Union on May 27.
On July 1 employees at the Gramercy plant walked off the
job following an incident on the dock when a ship was being
tied up. The employees alleged that a supervisor was being
abusive to one employee. The supervisor contended that the
employee was purposefully not properly using an electric
winch; therefore, he turned off the winch and told the employee
to “use your back.” No employee was disciplined.
Beginning in May there had been a series of unusual inci-
dents at the Gramercy plant. On May 3 the incinerator would
not operate. Investigation disclosed that the wire to the igniter
had been cut. On June 4 coke was found in the oil filler tube of
a welding machine. On June 22 a conveyor belt was found to
have been cut approximately half its width from the side. Main-
tenance Supervisor Kent Louque explained that he would have
expected to find a tear or jagged cut if the belt had been caught
by a piece of equipment. The cut was a razor sharp cut that
appeared to have been made deliberately. On August 14 a pro-
duction sample of coke taken at the kiln was found to have a 4-
percent silicone content, more than 100 times the acceptable
.03-percent content, indicating deliberate contamination. The
contaminant was “black beauty,” a material used for sandblast-
ing. At the time of the discovery, “black beauty” was being
used by an outside maintenance contractor performing sand-
blasting work at the plant. Sampling of the calcined coke in the
dome established that none of it was contaminated, only the
sample. On September 6 the gearbox on the screw conveyor
that feeds the kiln froze. It was replaced. During this same pe-
riod, the six trunnions on which the kiln turns were overheating
and making squealing noises. In order to inspect the trunnions,
the kiln would have to be allowed to cool and then the sealed
trunnion would have to be opened. This procedure would take a
minimum of 4 days. Since a major maintenance “turnaround”
was scheduled for October, Louque kept adding lubricants to
the trunnions in order to keep them operating until October.
On September 15 Respondent declared impasse. Respondent
implemented its final offer on September 22. The complaint
contains no allegations relating to bargaining or impasse. The
implementation of the terms of the final offer is not alleged as
an unfair labor practice.
On September 26 or 27, at the Norco plant, a typed statement
signed by Shop Steward Tim Miller and another employee had
been posted. The statement criticized Respondent for “cheating
its employees” out of a raise and then questioning “what incen-
tives do the employees now have to continue producing a qual-
ity product. Will CII lose its I.S.O. [International Standards
Organization] registration?”
On Monday, September 29, at the Gramercy plant, it was
discovered that a large pile of calcined coke in dome 1 had
been contaminated with green coke. On September 30 Respon-
dent locked out the 28 unit employees at the Gramercy plant.
The lockout was lifted in May 1998 and, on May 26, 1998, 24
unit employees returned to work.
B. The Lockout
1. Facts
On Monday morning, September 29, Process Coordinator
Ricky Oubre discovered that green coke had been introduced
into dome 1. His observation, confirmed by all witnesses who
CII CARBON, L.L.C. 1159
testified on this point as well as photographs, reveal that green
coke had been poured over the conical pile of calcined coke.
The result, to give a descriptive analogy, would be as if choco-
late syrup had been poured over a vanilla ice cream cone. Since
green coke is different in color and texture from calcined coke,
the contamination was obvious.
Oubre immediately reported the contamination to Plant
Manager Dick Holmes, who notified his superiors. Union Shop
Steward Bill Fleming heard from other employees that mem-
bers of management were congregating around dome 1. Shortly
after this, Fleming was called and conferred with Plant Man-
ager Holmes and Oubre. Holmes explained what had been dis-
covered and the three went to dome 1. They entered the dome,
and Fleming observed what looked like green coke that would
have had to have come off the conveyor, “coming from the top
like that.” Holmes informed Fleming that he intended to ques-
tion the employees who worked over the weekend, a total of
eight employees, four on each 12-hour shift. Fleming requested
to see the questions Holmes intended to ask, and Holmes
showed the questions to him. Fleming attended the interviews
of the eight employees. None admitted being responsible for
the contamination or having any knowledge regarding who was
responsible.
Respondent notified the sheriff’s department of St. James
Parish, and Detective Lou Landry assumed responsibility for
the investigation. Preliminary investigation revealed residue of
green coke in the load-out building that is used exclusively for
the dumping of calcined coke. Witnesses confirmed that, on the
morning of September 29, the load-out building was exception-
ally clean, suggesting that whoever was responsible had sought
to remove all traces of green coke. Tire tracks inside dome 1
and several small piles of green coke pushed to the side of the
contaminated pile of calcined coke suggested that whoever was
responsible had sought to remove the most obvious traces of
green coke that had fallen onto the floor at the bottom of the
pile. If the contamination had not been discovered, the evidence
of contamination would have been covered the very next time
that calcined coke was poured over the pile in the course of
Respondent’s normal production process.
On September 30 Respondent decided to lock out the unit
employees at Gramercy. Senior Vice President Bob Tonti, who
was in charge of operations and engineering at that time, testi-
fied that Respondent explored three alternatives: locking out all
the facilities, discharging a number of employees at Gramercy,
and locking out the employees at Gramercy. The first alterna-
tive was rejected because the event was isolated to Gramercy.
The second alternative was rejected because Respondent did
not know who was responsible. Additionally, Respondent was
aware that the Union “didn’t like contractors being in the
plant.” Thus, a partial lockout necessitating the use of subcon-
tractors “wouldn’t have been a good idea.” This was confirmed
by comments made by Pepitone on May 1, 1998, when Re-
spondent offered to lift the lockout.
Chief Executive Officer and President Van Sheets explained
that Respondent was confronted with “an escalating pattern of
sabotage, with the contamination being the latest in a series of
events, by far the most serious. The others were highly disturb-
ing, but the contamination in the coke dome threatened the
existence of the company.” In determining what action to take,
Sheets “[w]anted to affect as few employees as possible but
still protect the company.” He decided against locking out the
Norco employees. Although aware of the May property damage
at Norco, several months had passed and there appeared to be
no day-to-day threat. There had been no contaminated coke at
Norco. He considered the statement signed by Miller referring
to quality and Respondent’s I.S.O. certification to be a threat to
the Gramercy facility where the contamination occurred. In
view of the denials from the employees who had worked over
the weekend, Respondent did not know who was responsible. It
appeared that the contamination had occurred on the night shift
when only the four operators on that shift and one guard were
present. Even if the employees on that shift were not responsi-
ble, the conveyor had been run and those employees would
have knowledge of who was responsible. As Sheets explained,
“We . . . didn’t know who did it, but we knew it could not have
been done without the knowledge of the employees on that
shift. . . . Even though we knew who was supposed to be on
that shift, it didn’t tell us that they did it.” Thus, the decision
was made to lock out all unit employees at Gramercy.
On September 30, Sheets wrote the Union’s district director,
Homer Wilson, apprising him of the contamination, the denial
of any knowledge by the employees who had been working,
and the statement signed by Miller and posted at Norco. The
letter, which was sent by facsimile, states, “We are watching
for action demonstrating that the USWA neither has orches-
trated nor condones these actions.” Sheets concluded by stating
that, if Wilson contacted him, he would respond immediately.
Also on September 30, Tonti sent, by facsimile, a memorandum
to Staff Representative Pepitone advising him of the decision to
lock out the employees effective at 8 p.m. and stating, “This
defensive lockout is necessary following the discovery [of con-
tamination] . . . Investigations by CII and outside experts de-
termined the cause to be deliberate sabotage. The investigations
did not reveal the person or person responsible.” The memo-
randum notes that this was the third incident of sabotage at
Gramercy. It appears that Respondent was referring to the cut
conveyor belt and contaminated sample, but the letter does not
specify. Respondent also distributed a memorandum advising
the affected employees of the lockout and the reason for it. The
final paragraph of this memorandum notes that CII is convinced
that its bargaining position “is best for CII’s future strength”
and that CII recognizes that “many employees honestly dis-
agree.” It expresses appreciation for the professionalism most
employees have shown, and concludes, “It is tragic that a mi-
nority of employees would sabotage CII and threaten every-
one’s future.”
On October 2 Respondent, represented by Sheets, Tonti, and
Melody Cortez, who at the time was Respondent’s compensa-
tion administrator and keeper of the minutes of negotiating
sessions, met with the Union, represented by Wilson, Pepitone,
and Julius Laiche, the Union’s local calcine industry chairman.
Respondent confirmed the lockout and the reason for it. Wilson
stated that the Union did not condone violence or sabotage and
that the Union would cooperate in attempting to learn what had
occurred. Pepitone noted that he had not been permitted onto
the property to observe the contamination and asked if Respon-
dent had questioned the guards, supervisors, and the truckdriv-
ers. Sheets responded that the investigation led to the weekend
shift and mainly the night shift. A similar comment had been
made to Fleming by Plant Manager Holmes on October 1. Pepi-
tone stated that, if that were the case, “terminate the individuals
that they suspected, and we would handle that through the
grievance and arbitration procedure.” Laiche started to relate
some information that had been reported to him, and Tonti
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1160
demanded to know what he knew. Laiche responded, “You tell
me what you know and I’ll tell you what I know.” Tonti re-
sponded that it would be left up to the investigators. Wilson
stated that, if Respondent could find a way to resolve the mat-
ter, he would cancel or change his schedule to be available.
Respondent hired Dillmann Professional Services to investi-
gate the incident. Investigator Ron Frazier was assigned the
case on October 6. He coordinated with Detective Landry. Fra-
zier matched sets of tire tracks found inside dome 1 which es-
tablished that a “bobcat,” a utility tractor with a scoop on the
front, had been inside the dome. He interviewed security per-
sonnel and the truckdrivers that had come to the Gramercy
plant over the weekend. It was determined that no green coke
had been delivered over the weekend, thus eliminating the pos-
sibility that green coke had been dumped by mistake in the
load-out building. A pile in the green coke storage area was
identified as being the source of the green coke used to con-
taminate the dome. Frazier conducted interviews with employ-
ees, none of whom admitted responsibility. On October 22, one
employee did state that he suspected that one of the four night-
shift employees, whom he named, was a perpetrator. Separate
interviews with the four employees on the nightshift revealed
inconsistencies in their accounts; however, none admitted in-
volvement in the contamination nor did they implicate any of
their fellow workers. The four employees all declined to submit
to polygraph examinations. On November 11 one of the four
employees advised that he would not talk any further about the
contamination. Frazier concluded that the contamination was
not accidental. Analysis revealed that between 7 and 10 tons of
green coke had been poured over a pile of 10,000 tons of cal-
cined coke. Approximately 180 tons of calcined coke with a
value of over $35,000 was lost in reprocessing. The reprocess-
ing cost exceeded $40,000. Salvage of the remainder cost over
$27,000. Total damages exceeded $225,000. Respondent was
insured with a deductible of $100,000.
CEO Sheets explained that, if the contaminated coke had not
been discovered and had been sent to a customer operating an
aluminum smelter, it could have resulted in a shutdown of the
smelter with a restart costing millions of dollars. “The implica-
tions of sending contaminated coke . . . would have been devas-
tating. . . . It threatened the very viability of the company.”
During the second week of October, the Gramercy plant be-
gan a scheduled “turnaround,” when all production ceased and
major maintenance was performed on all production equip-
ment. On October 16 the trunnions that had been overheating
and squealing were inspected. When the seals were removed,
coke was discovered in two of the trunnions. Coke was also
discovered in the screw conveyor gearbox that had ceased to
operate and been replaced on September 6. The trunnions and
the gearbox are sealed units. The coke discovered inside these
pieces of equipment had to have been intentionally introduced
through their oil filler tubes. Since the gearbox had ceased to
operate on September 6 and the trunnions had been overheating
for several weeks, the coke had to have been introduced into
these pieces of equipment at some unknown time well prior to
the lockout. Replacement of the two trunnions and trunnion
bearings cost $20,627.
Following the discovery of coke in the trunnions, Detective
Landry interviewed 22 employees in October and November in
an effort to find out who was responsible. The individual or
individuals responsible were not identified. Investigator Frazier
testified that discovery of coke in the trunnions and gearbox
precluded narrowing the list of suspects; rather, it expanded the
list. Frazier’s report of November 19 reflects that an employee,
not one of the four on the nightshift, denied responsibility for
the coke in the trunnions but refused to take a polygraph. He
initially told Frazier that the Union had advised him not to take
the polygraph. He then retracted this. Frazier’s report of Janu-
ary 7, 1998, reflects that a clerical employee reported overhear-
ing that, if Frazier was looking at the four nightshift employees
in relation to the coke in the trunnions, he was “looking at the
wrong people.”
On December 4 Frazier and Landry briefed Sheriff Willie
Martin of the status of the investigation. Their report implicates
three of the employees on the nightshift. The employee not
implicated quit his employment at some point (the record does
not establish the date) during the lockout. The sheriff stated that
he would report the matter to the district attorney.
On January 7, 1998, the district attorney stated to Sheriff
Martin and Investigator Frazier that he intended to “break the
case” by taking it before a grand jury.
On January 14, 1998, Respondent and the Union met at the
request of the mediator who had become involved in the con-
tractual negotiations prior to the expiration of the contract.
Although the purpose of the meeting was to address contractual
issues, Pepitone raised the lockout, stating that he was not con-
vinced that union members were responsible for the contamina-
tion, and even if they were, it would not have been all of them.
Tonti stated his belief that at least “some” of the unit members
were responsible. Pepitone questioned why, if the Company
thought it happened on a particular shift, the Company did not
fire those employees. Tonti replied that Respondent had to
protect the facility and that the sabotage consisted of more than
the contaminated coke.
On February 19, 1998, the district attorney presented wit-
nesses to a grand jury. No indictment was returned. The testi-
mony, or lack thereof, is not public. Following the hearing,
Frazier heard the district attorney state that he believed the
Respondent’s ability to continue the lockout had improved
since no one could doubt that a crime had been committed, that
union employees committed the crime, but that “others would
not testify about it.”
Shortly after the grand jury proceeding, Sheets called Wilson
to set up a private meeting. They were finally able to meet on
April 9, 1998. Sheets flew to Birmingham, Alabama, for the
meeting. At the meeting, Sheet expressed his desire to end the
lockout and his concern for the safety of the plant. Wilson ac-
knowledged that the lockout had been justified at the outset but
stated that it had gone on too long. He suggested that Respon-
dent terminate the four employees on the nightshift who had
not been forthcoming with any information. Sheets responded
that he had thought of that, but that Wilson was effectively
asking him “to reach a conclusion that an experienced sheriff
had not been able to reach and that an experienced DA and a
grand jury had not been able to reach, and furthermore, to . . .
bet the company on it.” Following the meeting, Sheets wrote a
memorandum to himself stating “this is about power,” that the
Union “wants to control us and our employees.”
Following the meeting with Wilson, Sheets arranged a meet-
ing with the district attorney. At that meeting, on April 27,
1998, Sheets stated that he knew the district attorney could not
violate the confidentiality of a grand jury, but that he would
appreciate learning whatever he could “that could resolve this
situation.” The district attorney did not reveal any specifics
CII CARBON, L.L.C. 1161
from the grand jury. He did talk with Sheets. As a result of that
conversation, Sheets was satisfied that three employees were
responsible for the contamination as well as the other acts of
sabotage and that he could safely lift the lockout.5 Sheets testi-
fied to his conversation with the district attorney over the
objection of the General Counsel. At that time, I ruled that I
was not accepting the testimony for the truth of the report that
Sheets purportedly received, rather I was accepting the testi-
mony for the purpose of establishing that Sheets received a
report and acted upon it. Consistent with this ruling, I have
found that Sheets received information that caused him to be
satisfied that three employees were responsible for both the
contamination and the other acts of sabotage. In so finding, I
am not relying on the truth of the report that Sheets received.
Midland Hilton & Towers, 324 NLRB 1141 fn. 1 (1997). There
is no evidence that the meeting to which Sheets testified did not
occur. No party called the district attorney to testify to the con-
tent of the report. In the absence of such testimony, I credit the
uncontradicted evidence that Sheets received a report and, fol-
lowing receipt of that report, took action to lift the lockout.
On May 1, Respondent met with the Union to discuss ending
the lockout. Ron Gabarino, who had become vice president of
operations, stated that three employees would not be recalled,
that since only 24 employees were being recalled, work on the
dock would be performed by a subcontractor, and that, because
new equipment had been installed, Respondent would schedule
1 day of retraining. Pepitone stated that if union members came
in contact with subcontractor employees, they would be abu-
sive, noting that union members would be wearing shirts stat-
ing, “Scabs Suck.” The Union demanded a 100-percent recall,
restitution, and payment for travel time to the training.
Gabarino reiterated that three employees would not be recalled,
and stated that there would be no restitution since the Respon-
dent considered the lockout to be legal. He then asked whether
the Union would tell the employees not to attend the training if
Respondent did not agree to pay for travel time. Pepitone re-
sponded that he would not tell the employees not to attend, but
would tell them that they did not have to be attentive, if they
wanted to take a nap, “it’s okay.” Gabarino inquired about as-
suring a safe environment. Pepitone responded that the Union
could not “guarantee anything.”
After receiving a report of that meeting, Sheets called Wil-
son on May 6. Sheets testified that his relations with Wilson
had always been “quite cordial and constructive.” Wilson as-
sured Sheets that he would seek to keep a calm environment
and “would ensure that Mr. Pepitone and others acted in a way
that was more responsible than they were speaking at that meet-
ing.” Wilson agreed to call Sheets back the following day, but
did not do so. On May 8 Sheets sent a letter by facsimile to
Wilson inviting him to call, even over the weekend at his home.
Thereafter, they spoke by telephone three or four times. Sheets
understood that Wilson actually came to Louisiana and met
with the local union leadership. On May 12 Respondent de-
cided to end the lockout. The critical factors, according to
Sheets, were the information he received from the district attor-
ney and the commitment that Wilson made to keep a calm envi-
ronment and enable Respondent to operate securely. Sheets

5 Contrary to statements in the briefs of the General Counsel and the
Union, there was no contention that the district attorney revealed “new
evidence.” Sheets clearly stated that the report he received constituted
“new information.”
specifically denied that the issuance of the complaint on May
11 affected his decision. I credit this testimony.
Pepitone did not deny the statements attributed to him at the
May 1 meeting. Those statements confirm that Respondent’s
initial concerns with locking out only part of the bargaining
unit at Gramercy and assigning that work to subcontractors
were well-founded. Wilson did not testify. The district attorney
did not testify.
Lonnie Trent Sanford, Respondent’s chief financial officer,
prepared documents for this litigation reflecting the costs in-
curred by Respondent in operating during the lockout. Those
documents reflect that labor costs for overtime for salaried
personnel and firms hired to provide labor exceeded what
would have been incurred in normal operations by over
$700,000. The cost of additional security also exceeded
$700,000.
2. Analysis and concluding findings
In NLRB v. Great Dane Trailers, 388 U.S. 26 (1967), the Court
held that there are actions that an employer may take that are so
inherently destructive of employee rights that a showing of anti-
union animus is not required to establish a violation of the Act. In
the instant case, only the employees at the location where the con-
tamination was discovered were locked out, and the lockout oc-
curred only after the employees on the shifts that had been on duty
denied responsibility for or knowledge of the contamination. The
General Counsel concedes that this case falls under the second
category identified in Great Dane since not all unit employees
were locked out. Although the Union argues that this case is one of
inherently destructive conduct, I find otherwise. Thus, I shall ana-
lyze this case pursuant to the second category of case identified in
Great Dane, cases in which the impact upon employee rights is
“comparatively slight.” The analysis applicable in these situations
requires a determination of whether “the Respondent possessed a
legitimate and substantial business justification for the lockout.”
Central Illinois Public Service Co., 326 NLRB 928 (1999). In
Central Illinois, the Board held that the respondent did have such a
justification, even though the “inside game” activities of the union
were a protected economic weapon. The instant case involved
sabotage, an unprotected activity. If contaminated coal had been
shipped, the potential damage that could be caused to an aluminum
smelter would threaten the existence of Respondent. Although the
Union disavowed violence or sabotage, Wilson, on April 9, 1998,
conceded that the lockout had been justified, but that it had lasted
too long. Respondent’s preliminary investigation disclosed that
whatever occurred had to have occurred with either the knowledge
or complicity of unit employees on the night shift. No supervisor
was present on the night shift, and the employees on duty did not
attribute the contamination to a supervisor. Since those employees
denied responsibility or knowledge and no supervisor was impli-
cated, Respondent had a legitimate and substantial business justifi-
cation for locking out all the bargaining unit employees.
The General Counsel and the Union argue that only the four
employees on the night shift should have been locked out from the
inception of the lockout because Respondent knew “almost imme-
diately when and by whom the contamination . . . occurred.” The
record does not support this argument. It was obvious that the four
employees were the prime suspects. Plant Manager Holmes stated
this to Fleming, and CEO Sheets stated this to Wilson and Pepi-
tone. Each of the four night-shift employees had denied any
knowledge of, or involvement in, the green coke incident when
interviewed in the presence of their shop steward. There was no
evidence establishing their actual involvement in the incident. As-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1162
suming they were truthfully denying involvement in the incident,
but lying to protect the actual perpetrators, locking out only the four
risked returning the actual perpetrators to the scene. I find that
Respondent had a legitimate and substantial business justification
for locking out all Gramercy employees.
Respondent’s legitimate and substantial business justification
for locking out all Gramercy employees continued until late
April when CEO Sheets received new information that con-
vinced him that he would not be jeopardizing the safety of the
company if he lifted the lockout. His willingness to lift the
lockout at that time was thwarted by the Union’s demand that
he not refuse to recall the three night-shift employees coupled
with a demand for restitution, threats to be abusive and to wear
provocative shirts, and inability to “guarantee anything.”
The General Counsel and the Union argue that, even if a lockout
of all employees was initially justified, it ceased to be justified in
December when Frazier and Landry reported the results of their
investigation up to that point to the sheriff. That report implicates
three of the employees on the night shift. If, at that time, the only
sabotage discovered had been the contamination in dome 1, it
might be debatable as to whether continuation of the lockout of all
employees at Gramercy was justified. This argument, however,
does not take into account the introduction of coke into the trun-
nions and gearbox which occurred prior to the lockout but was not
discovered until October. This sabotage caused Frazier’s list of
suspects to become longer. His case summary identifies only one
of the nightshift employees as a prime suspect with regard to the
coke in the trunnions, and it specifically identifies another em-
ployee, not on the nightshift, as a prime suspect. Notwithstanding
the identification of these two employees as suspects, the report
contains no evidence establishing their responsibility, only suspi-
cion.6 As late as January 7, 1998, Investigator Frazier received a
hearsay report that, if he was looking at the four night-shift em-
ployees in relation to the coke in the trunnions, he was “looking at
the wrong people.” Despite the foregoing, the General Counsel and
the Union argue that Respondent had enough information to be
assured that the plant could be operated safely. The record does not
support this contention. Respondent did not know how many em-
ployees were perpetrators.
The General Counsel and the Union argue that continuation
of the lockout after December was not justified and, using
20/20 hindsight, they point out that no new evidence came to
light. Although the statement that no new evidence came to
light is factually correct, the conclusion that continuation of the
lockout was unjustified is erroneous. It was not unreasonable
for Respondent to believe that the intervention of the district
attorney would result in the discovery of new evidence. Re-
spondent had no evidence establishing who had put coke in the
trunnions and the sheriff had not made an arrest on the basis of
the evidence that he had been presented regarding the contami-
nation in the dome. The sheriff stated that he was going to pre-
sent the evidence he had been given to the district attorney and,
on January 7, 1998, the district attorney stated his intention to
“break the case” by taking it before a grand jury. Following the
presentation of the case to the grand jury, the district attorney
commented that Respondent’s ability to continue the lockout
had improved since no one could doubt that a crime had been
committed, that union employees committed the crime, but that

6 Neither the General Counsel nor the Union, in their briefs, ac-
knowledge that an employee not on the nightshift was identified as a
prime suspect regarding coke in the trunnions and gearbox.
“others would not testify about it.” The General Counsel asserts
that this comment suggests that Respondent had communicated
a desire to keep the employees locked out. Rather than relating
to a desire to continue the lockout, I find that the comment was
apropos to Pepitone’s comment on January 14, 1998, that no
union member was responsible. The grand jury did not indict
anyone. At this point, Sheets contacted Wilson and traveled to
Birmingham to meet with him. Sheets expressed his desire to
end the lockout as well as his unwillingness to “bet the com-
pany” on Respondent identifying perpetrators against whom an
experienced sheriff did not have enough evidence to justify
arrest and whom a grand jury had failed to indict. Wilson of-
fered no solution other than the Union’s previously stated posi-
tion that Respondent should terminate the employees on night
shift, one of whom had already quit.
Although the General Counsel and counsel for the Charging
Party argue that Respondent could have operated safely if it
terminated the nightshift, this argument fails to note that the
Union has never conceded that those employees were responsi-
ble. At the hearing, Pepitone and Fleming both denied knowing
who was responsible for the contamination of dome 1. So far as
the record shows, the Union never questioned its members
regarding who was responsible. At no time did it implicate any
member. Although the Union urged Respondent to take action
on its suspicions, when action was taken against the three re-
maining night-shift employees, the Union protested that the
action was improper. On May 1 Pepitone objected when Re-
spondent proposed less than a 100-percent recall, and, on May
12, the Union filed grievances on behalf of the three unrecalled
employees stating that the action taken against them was unjust.
Counsel for the General Counsel argues that Respondent’s
unlawful continuation of the lockout is established by the evidence
that Respondent lifted the lockout after the complaint issued and
without receiving any new information. Contrary to counsel’s ar-
gument that the record is “devoid of evidence” of new information,
I have credited Sheets’ testimony that he received new information
from the district attorney. That information caused him to be satis-
fied that three employees were responsible for all of the sabotage.
That report and the commitment that Wilson made to keep a calm
environment permitted Respondent to lift the lockout. There is no
probative evidence that the issuance of the complaint on May 11
played any part in Respondent’s decision. Respondent had met
with the Union on May 1, 10 days before the complaint issued, to
discuss ending the lockout. Following the Union’s unsatisfactory
response, Sheets called Wilson who assured that he would act to
keep a calm environment and ensure responsible action by local
union officials.
There is no probative evidence establishing antiunion moti-
vation on the part of the Respondent. Although the General
Counsel argues that the Gramercy employees were more active
in their support of the Union’s bargaining position than em-
ployees at other facilities, there is no evidence of any interfer-
ence with those activities or retaliation against any employee
who engaged in them. No employee was disciplined for the
walkout on July 1, which related to treatment of an employee,
not contractual demands. The Union argues that Frazier’s in-
vestigative notes reflect that the Gramercy and Norco employ-
ees were obstacles to contract ratification, and that Respon-
dent’s continuation of the lockout “can only be explained by a
desire to injure the Union.” This argument ignores Respon-
dent’s implementation of the contract on September 22. Re-
spondent was operating on the terms it wanted. The General
CII CARBON, L.L.C. 1163
Counsel argues that the letter to Wilson on September 30 re-
veals animus. I do not agree. The letter apprised Wilson of the
contamination and the contemporaneous discovery of a note
that rhetorically referred to loss of Respondent’s I.S.O. registra-
tion. The note was signed by Shop Steward Tim Miller and
another employee. I can draw no inference of animus from
Sheets stating, in view of what had occurred, that Respondent
was “watching for action demonstrating that the USWA neither
has orchestrated nor condones these actions.” Cf. Caterpillar,
Inc., 322 NLRB 674 (1996), in which the union did orchestrate
a “work-to-rule” campaign. I infer no animus from Sheets’
notes following his meeting with Wilson on April 9, 1998,
which state that “this is about power” and that the Union
“wants to control us and our employees.” The word “power”
certainly does not imply animus; Section 1 of the Act refers to
“inequality of bargaining power.” The request that Sheets lift
the lockout and reinstate all but the night-shift employees re-
flected the resolution the Union wanted. Sheets refused to give
up control, responding that he was unwilling to “bet the com-
pany” on doing what Wilson asked. Sheets’ testimony that his
dealings with Wilson were “cordial and constructive” is uncon-
tradicted and corroborated by Wilson’s intervention in May.
The lockout cost Respondent more than $1 million. I credit
Sheets’ testimony that the idea that he would spend more than a
million dollars “for some cause other than the success of the
business is ridiculous.” Respondent had a legitimate and sub-
stantial business justification for the action that it took. There is
no probative evidence establishing an antiunion motivation
behind Respondent’s actions.
C. The Additional Allegations
1. OPME program
a. Facts
Pursuant to an agreement in 1991, the parties jointly devel-
oped and agreed upon an incentive program called the Opera-
tions Performance and Market Economics Program (OPME).
Section II of the program relates to the performance factor,
which is defined as “Percentages attained for each of the Per-
formance Criteria times the weighting factor.” Section II,C,1,
provides that performance criteria and/or their respective ranges
are subject to change prior to the commencement of an OPME
Period. (OPME Periods are 3-month periods beginning in Janu-
ary, April, July, and October, respectively.) Section II,C,2,
states: “Management will establish Performance Criteria and
their respective ranges.” Respondent, on at least two occasions,
in 1995 and by telephone on August 20, 1996, consulted the
Union prior to establishing new performance criteria. A memo-
randum dated May 15, 1995, from Tonti to Pepitone expresses
appreciation for the Union’s support of changes which “[w]e
hope to implement . . . toward the end of the 3rd quarter.” Not-
withstanding these occasions, there were other times that Re-
spondent acted without consultation. The Union filed a griev-
ance that was referred to step 2 on June 4, 1996 stating, inter
alia, “All changes in the OPME program have been unilateral.
The Union concerns have always fallen upon uncaring man-
agement.” The grievance does not assert a violation of the
OPME agreement; it requests access to company books or res-
toration of COLA. On June 30 prior to the OPME period be-
ginning in July, Respondent issued a memorandum that cited
the damage discovered at Norco and Gramercy in May and
June and introduced a new performance criterion of damage to
any facility due to gross negligence or willful misconduct. On
December 29 recordable injuries were deleted as a criterion,
and adjustments were made to several ranges. There was no
notice to or consultation with the Union prior to implementing
these changes in the performance criteria.
b. Analysis and concluding findings
The complaint alleges that the foregoing unilateral changes
violated Section 8(a)(3) and (5) of the Act. The General Coun-
sel argues that the language in section II,C,2, must be evaluated
in view of the evidence that Respondent discussed proposed
changes to the OPME program with the Union in 1995 and
1996. Citing Register-Guard, 301 NLRB 494 (1991), and John-
son-Bateman Co., 295 NLRB 180 (1989), the General Counsel
argues that the contractual provision does not establish a “clear
and unmistakable” waiver. I disagree. A waiver will not be
inferred from a contract clause “couched in general terms.”
Register-Guard, supra at 495. The provision at issue here is not
couched in general terms. It states unequivocally: “Manage-
ment will establish Performance Criteria and their respective
ranges.” There is no evidence that only agreed on changes were
implemented, and it is undisputed that Respondent did not al-
ways consult the Union prior to making changes. The May 15,
1995 memorandum simply thanks the Union for its support and
states Respondent’s intention to implement, in the third quarter,
the change that was “discussed.” Contrary to the Union’s ar-
gument that the 1996 grievance confirms that the Union never
waived its right to bargain about changes, I find the grievance
establishes that Respondent historically exercised its unilateral
right to set performance criteria. The grievance does not assert
a violation of the OPME agreement. I shall recommend that this
allegation be dismissed.
2. Health insurance
a. Facts
Respondent is self-insured up to $35,000 per employee for
insurance claims. Claims in excess of $35,000 are paid pursuant
to a “stop loss” policy that Respondent carries with Canada
Life. Respondent contracts with Blue Cross/Blue Shield to
administer its health insurance pursuant to a benefit policy.
That policy provides benefits for employees “actively at work.”
On November 7 Canada Life advised Respondent’s local insur-
ance broker that it would continue stop-loss insurance for “the
earlier of three months or until such time as a decision is made
regarding” the status of the locked out employees. On November
25 Respondent’s insurance broker sent a letter to Respondent’s
compensation administrator, Melody Cortez, in which she advised
that “it would be in CII’s best interest to revisit the current plan’s
policies and provisions” due to the “actively at work” clause, not-
ing that continuation of coverage could result in “potential liabil-
ity.” Respondent did so, and on November 28, advised the locked
out employees that Respondent would no longer pay the premiums
for their insurance. There was no notice to or bargaining with the
Union concerning the cessation of benefits.
b. Analysis and concluding findings
There is no evidence regarding why the broker, on Novem-
ber 25, cautioned Respondent regarding potential liability. The
General Counsel adduced no evidence establishing that the
letter was written at the behest of Respondent. There is no evi-
dence that the tardy consideration of the “actively at work”
clause by the broker was other than an oversight. That clause
confirms that insurance was a benefit dependent upon the per-
formance of work. In strike situations, the Board draws a dis-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1164
tinction between benefits dependent on the performance of
services, which can be withheld, and accrued benefits, which
cannot be withheld. Texaco, Inc., 285 NLRB 241, 245 (1987).
In Goldsmith Motors Corp., 310 NLRB 1279, 1285 (1993), the
employer locked out its employees and paid wages lower than
the contractual rate to the temporary replacement workers it
hired, an action it would have been privileged to take if there
had been a strike. The Board held that it “could discern no
meaningful reason” that the strike situation and lockout situa-
tion should be treated differently. Ibid. I find no precedent justi-
fying different treatment of benefits that are dependent on the
performance of services in strike or lockout situations. See
Sargent-Welch Scientific Co., 208 NLRB 811, 821 (1974). I
shall, therefore, recommend that this allegation be dismissed.
3. Subcontracting
From shortly after the inception of the lockout until it ended,
Respondent hired a local contractor, Johnston’s of Chalmette,
to perform work formerly performed by its unit employees. The
contract with Johnston’s was an “open contract” to provide the
labor that Respondent needed to operate. Contrary to statements
in the Union’s brief, there is no evidence that the subcontract-
ing was permanent. The General Counsel adduced no evidence
that this arrangement was permanent and argues only that the
subcontracting was illegal because the lockout was illegal. Dur-
ing a lawful lockout, an employer is privileged to use tempo-
rary replacements. Harter Equipment, 280 NLRB 597 (1986).
When Respondent advised the Union of its intent to lift the
lockout, it informed the Union that, since there were only 24
employees returning, it would have the work on the dock per-
formed by Johnston’s. The implemented terms of Respondent’s
contract proposal provide that Respondent may subcontract “so
long as no bargaining unit employee at that location is laid off
as a direct result of the contracting out.” Since the subcontract-
ing was permitted by the implemented terms, I find no basis for
finding any violation of the Act. I shall recommend that the
allegation relating to subcontracting be dismissed.
4. Failure to arbitrate grievances
a. Facts
Between April 30, 1998, and June 5, 1998, the Union appealed a
total of seven grievances to arbitration, including the grievances
filed on behalf of the three employees not recalled at Gramercy.
Respondent, by letter dated June 18, 1998, acknowledged receipt of
these seven appeals and refused to arbitrate stating that the actions
underlying the grievances occurred after expiration of the prior
contract. Thereafter, the Union filed an additional 14 appeals to
arbitration which Respondent denied for the same reason on July
12, 1999. At a meeting on January 14, 1998, Laiche, referring to
job actions (strikes) stated, “There has been no action at the other
plants.” He did not state that there would be none. The Union has
not disavowed its right to strike. It is undisputed that the Union has
not agreed to the terms of the final proposal that Respondent im-
plemented on September 22. The Union never signed Respon-
dent’s proposed contract.
b. Analysis and concluding findings
Notwithstanding the Union’s refusal to enter the contract, the
complaint alleges that Respondent has violated Section 8(a)(5)
of the Act by failing to arbitrate grievances. The General Coun-
sel and the Union argue that the Union, by submitting griev-
ances for arbitration, effectively accepted this provision of the
proposed collective-bargaining agreement and created an in-
terim agreement to arbitrate. Thus, it is argued, by refusing to
do so, Respondent deviated from the terms of its implemented
final offer. This specific argument has been rejected by the
Board. McKesson Drug Co., 291 NLRB 747, 753 (1988). The
grievance procedure in the implemented terms provides that the
term grievance “shall mean any dispute or request or violation
which involves the interpretation, application of, or compliance
with, the provisions of the contract.” In this case, as in McKes-
son, “[T]he Union never entered into such a contract so neither
the Union’s no-strike agreement nor [the Respondent’s] arbitra-
tion agreement ever became viable.” Id. at 754. Loral Defense
Systems-Akron, 320 NLRB 755 (1996), cited by the General
Counsel and the Union is inapposite. In Loral, the respondent
notified the union that it would enforce the no-strike agreement
and had contended, “in other cases,” that the arbitration provi-
sion was in effect. Thereafter, respondent refused “to submit
certain grievances to arbitration.” Id. at 759. In the instant case,
Respondent has consistently refused to submit any grievance to
arbitration and has never contended that the arbitration provi-
sion was in effect or that it would enforce the no-strike clause.
The Union has not disavowed its right to strike. In this case, as
in McKesson, there is no viable contract, and I shall recom-
mend that this allegation be dismissed.
CONCLUSIONS OF LAW
The Respondent has not engaged in unfair labor practices af-
fecting commerce within the meaning of Section 8(a)(1), (3),
and (5) and Section 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 recommended7
ORDER
The complaint is dismissed.

7 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.