Craig & Hamilton Meat Co.

National Labor Relations Board - Board Decisions

Jul 31, 1984

271 N.L.R.B. 853 (N.L.R.B. 1984)

CRAIG & HAMILTON MEAT CO.
Craig & Hamilton Meat Company, Inc. and General
Teamsters Local 439, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and
Helpers of America. Case 32-CA-5273
31 July 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND HUNTER
On 3 February 1984 Administrative Law Judge
Jay R. Pollack issued the attached decision. Coun-
sel for the General Counsel filed exceptions and a
supporting brief, and the Respondent filed a brief
in response to the General Counsel's exceptions.
The National Labor Relations Board has delegat-
ed 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,' and
conclusions and to adopt the recommended Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
Counsel for the General Counsel contends that, in finding that the
Respondent had no statutory obligation to furnish information requested
by the Union, the judge relied on limited portions of letters the Respond-
ent sent the Union during collective bargaining and ignored others.
Counsel for the General Counsel cites, inter alia, an excerpt from the Re-
spondent's 27 October 1983 letter to the Union stating that the Company
does "not intend to be another of the 800,000 business casualties this
year." Removed from context, this statement appears to support the Gen-
eral Counsel's contention that the Respondent had put its general finan-
cial condition at issue in resisting the Union's collective-bargaining de-
mands. However, the portion of the letter where the sentence appears fo-
cuses on the Respondent's resolve to "gird for the continuing tough com-
petition ahead," and is therefore expressing the Respondent's concern
over potentially harmful consequences that would be felt by its business
if it failed to respond to industry trends by redirecting its resources from
meat processing to jobbing. Thus, placed in context, this and other lan-
guage contained in collective-bargaining correspondence generated by
the Respondent and cited by the General Counsel in his brief support the
judge's conclusion that information sought by the Union does not pertain
to claims advanced by the Respondent during negotiations. Accordingly,
we adopt the judge's conclusion that the Respondent has not violated
Sec. 8(aXS5) of the Act by refusing to supply such information.
DECISION
STATEMENT OF THE CASE
JAY R. POLLACK, Administrative Law Judge. I heard
this case in trial at Stockton, California, on December 22,
1983. The complaint, which issued on July 5, 1983, was
based on a charge filed by General Teamsters Local 439,
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America (the Union) on
February 22, 1983. The issue raised by the pleadings re-
lates to whether Craig & Hamilton Meat Company, Inc.
271 NLRB No. 135
(Respondent) violated Section 8(a)(5) and (1) of the Na-
tional Labor Relations Act by failing and refusing the
furnish the Union with requested information allegedly
relevant to the Union's performance of its collective-bar-
gaining function.
All parties were given full opportunity to appear, to
introduce relevant evidence, to examine and cross-exam-
ine witnesses, to argue orally, and to file briefs. Based on
the entire record and from my observation of the de-
meanor of the witnesses, I make the following
FINDINGS OF FACT AND CONCLUSIONS
I. JURISDICTION
Respondent is a California corporation with an office
and place of business in Stockton, California, engaged in
the nonretail sale and distribution of meat and related
products. During the 12 months prior to issuance of the
complaint, Respondent sold and shipped goods valued in
excess of $50,000 directly to customers located outside
the State of California. Accordingly, it admits and I find
Respondent to be an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
The Union has been the exclusive collective-bargaining
representative of a unit of Respondent's drivers since at
least 1968.' The Union and Respondent have been party
to a series of collective-bargaining agreements, the most
recent of which was effective from October 1, 1979, to
September 30, 1982. Accordingly, Respondent admits
and I find that the Union is a labor organization within
the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
The instant case arose during negotiations between Re-
spondent and the Union for an agreement to succeed
their 1979-1982 agreement. By letter dated July 27,
1982,2 the Union submitted its contract proposals to Re-
spondent seeking a new 3-year agreement. On August 31,
Respondent presented the Union with its "Comments
and Counterproposals." In a covering letter submitted
with its proposals, Respondent, through its attorney John
E. Tate, stated:
While we are not in any way pleading economic
poverty, for it is none of the business of this Union
as to where we get our money and where or how
we spend it, you do know that not only the five
giants in our industry are reported to do 80% of the
beef business. The giants, IBP, Spencer, MBPXL,
Morrell-you name it-are no longer content to
merely slaughter and split. They are sending boxes
Respondent admits and I find the following unit appropriate for the
purposes of collective bargaining within the meaning of Sec. 9(b) of the
Act:
All full-time and regular part-time local drivers, slaughter and pack-
ing house drivers, and sales and/or service drivers employed by Re-
spondent at its Stockton, California facility; excluding all other em-
ployees, guards, and supervisors as defined in the Act.
At the times material herein, there were six drivers in the bargaining unit.
2 Unless otherwise stated, all dates hereafter occurred in 1982.
853
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of products out in far smaller poundage than many
of our customers want.
Tate further stated, "To get our prices in line so that the
present customer doesn't come pick it up from us or
others located closer by, we feel we must lower our de-
livery cost." In Respondent's proposal, Tate proposed
discontinuance of the cost of living allowance (COLA)
provided for in the 1979-1982 agreement. On September
27, Respondent proposed a wage reduction of $1 per
hour.
On October 1, 1982, Respondent submitted another
contract proposal which provided, inter alia, a decrease
in the wage rate for new hires, and the elimination of the
COLA. On October 15, 1982, Respondent submitted an-
other contract proposal which proposed a "freeze" in
COLA as an alternative to its elimination. The proposal
further stated that Respondent proposed "to institute the
terms and conditions of this proposal on October 18,
1982." On October 27, Tate sent a letter supplementting
his August 31 position paper regarding Respondent's po-
sition in negotiations. Tate proposed retention of the
contract wage rate for 2 years for existing employees
and a proposal that newly hired employees receive a
wage of 70 percent of scale. This proposal made no pro-
vision for COLA. Tate stated, inter alia:
Our future is being shaped by forces beyond our
control that we feel literally forces us to become
less a processor and more of a jobber. We must pur-
chase, warehouse and inventory more and more
foods that others demand a profit from their proc-
essing. All we can expect to add on is a small serv-
ice charge.
This change in business composition means more
of the processing of foods will be done by the giant
food conglomerates. Already a number of them not
only provide packages as small as we process for
our customers, but much, much smaller. Some of
them actually deliver right to the door of the cus-
tomer. Others have warehouses where our custom-
ers can make pick-ups.
The end result is that the jobbing business will
probably require more employees but with les indi-
vidual expertise. We feel we must be able to lower
our gross margins with the idea of making up for it
with increased volume. This means more people
with lower wages and more flexibility in their
work.
We are willing, as we have expressed in detail in
writing, to continue to pay substantially the big fig-
ures outlined above during this contract, plus con-
tinue to pay the amount we are now paying for
health insurance, pensions, holidays, sick pay, vaca-
tions and the many other "goodies," but we are not
willing to increase them during this contract. We
also want to start others who want to come here
and work at lower wages as we have negotiated in
the nearby Bay and other California areas.
It was stipulated that between October 27 and Decem-
ber 6, Respondent's final contract proposal was present-
ed to the Union's membership for ratification and that
the bargaining unit rejected Respondent's contract pro-
posal. On November 30, Respondent filed a petition in
Case 32-RM-288 alleging that it had a good-faith doubt
of the Union's continued majority.3 Thereafter, on De-
cember 6, 1982, at a bargaining session conducted at the
offices of the Federal Mediation and Conciliation Serv-
ice, Ace Hatten, the Union's president, told Respondent's
negotiators that bargaining had to begin "from scratch"
in light of the employees' rejection of the contract.
Hatten presented Respondent with the following request
for information at issue herein:
Pursuant to legal advice, we find it is now imper-
ative that you furnish this local Union with the fol-
lowing economic data.
Yes, I understand you stated in your letter dated
August 31, 1982, that you are not pleading econom-
ic proverty, however, this local Union differs with
you as to our right to the data requested. As repre-
sentatives of your employees we have every right
to know the financial status of your company before
we can make the drastic roll backs in wages, fringe
benefits and or working conditions you are demand-
ing in your proposals. Therefore, we are demanding
you make this information available to us as soon as
possible:
I. Documents submitted by the employer to
banks by the employer's obtaining loans including
projected balance sheets and income statements.
2. List of buildings and land owned or leased by
the employer's business, including a statement of
their market value, and information on lease terms
and conditions.
3. Financial statements for three years prior, as
well as tax returns and current financial statement.
4. Depreciation schedules for all depreciable
assets, as well as current market values for these
assets.
5. Analysis of working capital for the last three
years.
6. Organization chart of all supervisory and exec-
utive employees, and a schedule of their total com-
pensation.
7. Schedule of total compensation to officers,
managers, directors and/or owners.
8. Employment contracts, life insurance policies
and loans for officers, managers, directors and/or
owners.
9. Expense reports submitted by officers, manag-
ers, directors and/or owners.
10. Information on pension and/or retirement
plans in which union members are excluded.
11. List of autos owned or leased by the compa-
ny.
12. List of leisure items such as club memberships
and vacation homes provided by the company to
executives. . . .
3 Processing of the representation petition was "blocked" by the in-
stant unfair labor practice charge.
854
CRAIG & HAMILTON MEAT CO.
B. Respondent's Defense
Respondent admits that it has refused to furnish the
above-requested information. It is the position of Re-
spondent that it has not placed the financial status of the
Company in issue and, therefore, the information request-
ed by the Union was not relevant to negotiations at issue
herein.
John Craig, Respondent's vice president, testified that
Respondent is a small business which processes beef and
sells it, as well was several pass-through items, 4 to the
hotel, restaurant, and institutional (HRI) section of the
food market. During negotiations Craig or Tate ex-
plained to the Union that Respondent sought absolute
control over its operations and fixed and identifiable
labor costs. Respondent told the Union that it expected
that it would become more of a "jobber," dealing pri-
marily with pass-through items, and less of a processor.
Further, Respondent took the position that the job of
driver was "not worth more" than its wage proposals.
Respondent simply stated that it was offering what the
job was worth and what it was willing to pay. Finally,
Craig testified that Respondent possessed no documents
which would substantiate its statements regarding its ex-
pected change from processor to jobber. Respondent's
claim concerning its changing role was based on Craig's
opinion and not on any objective facts.
C. Analysis and Conclusions
It is well settled that an employer has a statutory obli-
gation to provide a union, on request, with relevant in-
formation the union needs for the proper performance of
its duties as a collective-bargaining representative. NLRB
v. Truitt Mfg. Co., 351 U.S. 149 (1956); NLRB v. Acme
Industrial Co., 385 U.S. 432, 435-436 (1967); Detroit
Edison Co. v. NLRB, 440 U.S. 301 (1979). In determining
whether an employer is obligated to supply particular in-
formation, the question is only whether there is a "prob-
ability that the desired information [is] relevant, and that
it would be of use to the union in carrying out its statu-
tory duties and reponsibilities." NLRB v. Acme Industrial
Co., supra at 437. As the Supreme Court has stated, the
disclosure obligation is measured by a liberal "discovery-
type standard," not a trial-type standard, of relevance.
Ibid.
In Truitt Mfg., supra, the Supreme Court held that fi-
nancial information is relevant to negotiations in which
an employer claims a financial inability to pay a union
wage demand. The Court stated:
Good-faith bargaining necessarily requires that
claims made by either bargainer should be honest
claims. This is true about an asserted inability to
any an increase in wages. If such an argument is im-
portant enough to present in the give and take of
bargaining, it is important enough to require some
sort of proof of its accuracy. And it would certainly
not be farfetched for a trier of fact to reach the
conclusion that bargaining lacks good faith when an
4 A pass-through item is something which Respondent purchases, does
not process or otherwise alter, and subsequently resells to its own cus-
tomers.
employer mechanically repeats a claim of inability
to pay without making the slightest effort to sub-
stantiate the claim. [351 U.S. at 152-153.]
Following Truitt, the Board and the Courts have held
that an employer is not obligated to demonstrate that it is
unable to raise wages unless it first claims such an inabil-
ity. Pine Industrial Relations Committee, 118 NLRB 1055
(1957), enfd. 263 F.2d 483 (D.C. Cir. 1959); United Fur-
niture Workers of America v. NLRB, 388 F.2d 880, 882
(4th Cir. 1967); N. Y. Printing Pressmen v. NLRB, 538
F.2d 496 (2d Cir. 1976).
The Board has expanded the application of Truitt to
situations where the employer has not specifically
claimed poverty but has in some manner expressed an in-
ability to afford the union's demands. For example, in
Taylor Foundry Co.,5 the Board found that the respond-
ent-employer's assertion that it would have to go out of
business if it gave a wage increase "amounted to a clear
claim of financial inability." In Western Wirebound Box
Co.,e the Board expanded Truitt to require an employer
to supply figures to justify its claimed fear of a competi-
tive disadvantage if it met the union's demands. In Steel-
workers v. NLRB, 7 Chief Justice Burger, then writing for
the United States Court of Appeals for the District of
Columbia, stated:
The Company asserts that a claim of inability to
pay is not shown when the Company merely claims
that the increases will prevent it from competing.
But the inability to compete is merely the explana-
tion of why the Company could not afford an eco-
nomic benefit.
Inability to pay a union demand need not be expressed
in any set formula before the obligations set forth in
Truitt come into play. For example, in Milbin Printing,8
the Board held that an employer had not claimed finan-
cial inability by his statements during negotiations that
his desire to maintain a "proper balance" for his business
did not permit him to "reach the union's numbers." The
Court of Appeals for the Second Circuit reversed, stat-
ing that the plain English meaning of the employer's
words was an inability to pay. The court found that the
employer had clearly raised the issue of its ability to
afford the union's demands. The court said that the
Board interpreted the employer's remarks to mean that
he "wouldn't" pay the union's demands but that the em-
ployer had really said he "couldn't" pay.9 However, in
Vore Cinema Corp., 254 NLRB 1288 (1981), the Board
adopted an administrative law judge's conclusion that the
offer of reduced wages is not the equivalent of a plea of
inability to pay. The judge stated (254 at 1292):
s 141 NLRB 765 (1963), enfd. 338 F.2d 1003 (5th Cir. 1964).
6 145 NLRB 1539 (1964), enfd. 356 F.2d 88 (9th Cir. 1966).
7 401 F.2d 434 (1968).
8 218 NLRB 223 (1975), revd. and remanded sub nom..V. Y. Printing
Pressmen v. NLRB, 538 F.2d 496 (2d Cir. 1976).
9 538 F.2d at 501. Compare United Fire Proof Warehouse Co. v. NLRB,
356 F.2d 494, 498 (7th Cir. 1966) (where the Board found that the em-
ployer said he "can't" and the court found that the employer said he
-won't").
*
855
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The General Counsel cited no case, and my own re-
search turned up none, which can establish that an
employer's offer which might reduce earnings or
which might otherwise inure to the employer's ben-
efit brings a case within the ambit of Truitt.
Applying the above case law to the facts of the instant
case, the issues are whether Respondent made the type
of claim that it would be required to substantiate and
whether the items requested by the Union are relevant to
that claim. Respondent's explanation of its wage and ben-
efit package was based on two points. First, Respondent
claimed that its position in the market was changing and
as a result it had less need for skilled employees. Second,
Respondent bluntly stated that it did not believe that the
employees' services were worth more than it was offer-
ing to pay. The second of these explanations clearly
raises no obligation to furnish financial information. Re-
spondent simply stated it "wouldn't" pay what the Union
requested and was seeking a bargaining more to its bene-
fit. As stated above, the offer of reduced wages does not
bring the case within the ambit of Truitt.
The General Counsel argues that Respondent's asser-
tion that its competitors would force it to become more
of a jobber than a processor equates with an inability-to-
pay claim apparently because such a change would have
a negative financial impact. Respondent claimed that due
to competition the nature of its business would change,
i.e., Respondent would reduce its processing of beef op-
erations and to a larger extent simply deliver the prod-
ucts as a jobber. Accordingly, Respondent claimed its
labor needs would change, i.e., it would require more
unskilled workers. However, the Union did not request
that Respondent substantiate these claims. Rather, the
Union requested specific information concerning Re-
spondent's financial status "before its could agree to such
financial concessions."
Had the Union requested that Respondent substantiate
its claims regarding its changing role in the industry, this
case would be very different. However, the information
requested by the Union was not relevant to Respondent's
bargaining stance. It is this deficiency in the case that the
General Counsel has failed to address. While the General
Counsel has focused on Respondent's assertions during
bargaining, she has simply assumed that the information
requested was relevant to "supporting and verifying [Re-
spondent's] economic claims that future economic cir-
cumstances compel present wage concessions in order to
remain competitive." As can be readily seen, the infor-
mation requested is relevant to Respondent's general fi-
nancial health. ' However, Respondent never put its fi-
nancial health in issue, rather it placed its changing role
from processor to jobber in issue. The requested informa-
tion apparently was not intended to and does not pertain
to the claim advanced by Respondent during negotia-
tions.
In this case, the Union's request did not meet Re-
spondent's assertions regarding its competitors' oper-
ations or its change in operation from processing to job-
bing. The information requested would not reasonably be
expected to show the accuracy or inaccuracy of Re-
spondent's claims. Thus, the information could not be
said to be relevant to the instant negotiations. It follows
that Respondent could not be found to have violated its
statutory obligation to bargain in good faith by failing to
provide the information requested.
CONCLUSIONS OF LAW
1. The Respondent, Craig & Hamilton Meat Company,
Inc., is an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. The Union, General Teamsters Local 439, Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehou-
semen and Helpers of America, is a labor organization
within the meaning of Section 2(5) of the Act.
3. The General Counsel has failed to establish that Re-
spondent had a statutory obligation to furnish the finan-
cial records requested by the Union.
4. Respondent has not violated Section 8(a)(5) and (1)
of the Act as alleged in the complaint.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
edit
ORDER
It is ordered that the complaint be dismissed in its en-
tirety.
'o Items I through 5 and 11 of the Union's request are relevant to the
general financial health of Respondent. The General Counsel concedes,
on brief, that with respect to items 6, 7, 9, and 12 the Union would, at
best, be entitled to the aggregate figures and not the specific details re-
quested. With respect to items 8 and 10, the General Counsel accepts Re-
spondent's representation that no such documents exist.
" All outstanding motions inconsistent with this recommended Order
hereby are denied. If no exceptions are filed as provided in Sec. 102.46 of
the Board's Rules and Regulations, the findings, conclusions, and recom-
mended 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.
856