Dana Corporation

National Labor Relations Board - Administrative Judge Opinions

Apr 11, 2005

07-CA-046965 (N.L.R.B. Apr. 11, 2005)

JD–24-05
St. Johns, MI
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

DANA CORPORATION
Respondent Employer

and

INTERNATIONAL UNION, UNITED AUTOMOBILE,
AEROSPACE, AND AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA (UAW), AFL-CIO
Respondent Union

and

GARY L. SMELTZER, JR., An Individual Cases 7-CA-46965
7-CB-14083
Charging Party

and

JOSEPH MONTAGUE, An Individual Cases 7-CA-47078
7-CB-14119
Charging Party

and

KENNETH A. GRAY, An Individual Cases 7-CA-47079
7-CB-14120

Sarah Pring Karpinen, Esq.,
for the General Counsel.
Stanley J. Brown and Emily J. Christiansen, Esqs.,
(Hogan & Hartson, LLP), of McLean, Virginia,
for Respondent Dana.
Betsey A. Engel and Blair Simmons, Esqs.,
of Detroit, Michigan, for Respondent UAW.
William A. Messenger, Esqs., (National Right to
Work Legal Defense Foundation), of Springfield,
Virginia, for the Charging Parties.

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DECISION

Statement of the Case

WILLIAM G. KOCOL, Administrative Law Judge. This case was tried in Detroit,
Michigan, on February 8, 2005. The charges were filed against Dana Corporation (Dana) and
International Union, United Automobile, Aerospace and Agricultural Implement Workers of
America (UAW), AFL-CIO (the UAW) by Gary L. Smeltzer, Jr., Joseph Montague, and Kenneth
A. Gray (the Charging Parties) on December 16, 2003, January 22, 2004, and January 22, 2004
respectively. The complaint that issued on September 30, 2004 alleges that on August 6, 20031
Dana and the UAW entered into and maintained a Letter of Agreement that set forth the terms
and conditions of employment to be negotiated in a collective-bargaining agreement should the
UAW obtain majority status as the exclusive collective-bargaining representative of certain of
Dana’s employees, including those at its facility located in St. Johns, Michigan. The complaint
further alleges that the Respondents entered into the Letter of Agreement at a time when the
UAW was not the majority collective bargaining representative at the St. Johns facility. By such
conduct, the complaint alleges, Dana violated Section 8(a)(2) and (1) of the Act and the UAW
violated Section 8(b)(1)(A). It is noteworthy that the complaint does NOT allege that Dana
recognized the UAW as the exclusive collective bargaining representative for the employees at
the St. John facility.

On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel, the Charging Parties, Dana, and the
UAW2, I make the following

Finding of Fact

I. Jurisdiction

Dana, a corporation with several facilities located throughout the United States, including
a facility located in St. Johns, Michigan, is engaged in the manufacture and non-retail sale for the
automobile industry. During the calendar year 2003 Dana, in conducting its operations described
above, purchased and received goods and supplies at its Michigan facility valued in excess of
$50,000 from points located outside the state of Michigan. Respondents admit, and I find that
Dana is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) and
the UAW is a labor organization within the meaning of Section 2(5).

1 All dates are in 2003 unless otherwise indicated.
2 Dana and the UAW each filed a motion to strike exhibits 1 and 2 that are attached to the
charging parties’ brief. The Charging Parties filed a response defending the attachment of a
complaint to its brief. The Charging Parties correctly argue that they are free to cite precedent in
their brief and to attach copies as a courtesy to the judge. But a complaint has no precedential
value and I therefore grant the motion to strike.

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II. Alleged Unfair Labor Practices

Dana makes automotive parts and light and heavy duty components for industrial and off
highway vehicles. Its three biggest products are frames, axles, and drive shafts. It has about 90
facilities located throughout the United States and Canada and 25-30 in foreign countries. About
300 non-supervisory employees work at the St. John facility. The UAW has been conducting an
organizing campaign there since early 2002, but as of the date of the hearing it had not yet
claimed to represent a majority of the employees.

Dana and the UAW have a long standing collective-bargaining relationship that has
resulted in a master agreement that covers three units at two locations and six other contracts
covering about 2200-2300 employees. Dana has not and does not recognize the UAW as the
collective bargaining representative for any of the employees at the St. John facility.

On August 6 Dana and the UAW entered into a letter of agreement. The agreement is 17
pages plus attachments. It sets forth its purpose as:

The Company and the Union recognize that dramatic changes in the domestic
automotive market has (sic) created new quality, productivity, and
competitiveness challenges for the automotive component supplier. Both parties
believe these challenges will be more effectively met through a partnership that is
more positive, non-adversarial and with constructive attitudes towards each other.
The Company and the Union also recognize the significant contribution of the
skills and loyalty of the workforce to the success of the Company and the
importance of the investment in the skills of the workers. The parties believe that
job flexibility is a positive learning experience not a negative assignment. Each
recognizes the significant role that the other must play in the success of the
Company. To these ends, the Company and the Union hereby pledge renewed
energies and commitment to increase productivity, efficiency, and quality of
operations and to maximize the competitive capability of the Company achieving
a desirable balance of a fair day’s work for a fair day’s pay.

The Union, the Company and its employees will work together in a spirit of
teamwork, cooperation and mutual understanding to improve product quality,
productivity, improve working conditions, enhance the opportunities of the work
force; and grow the business to increase job security and shareholder value. Both
the Company and the Union are committed to increase investment opportunities,
increase return on investment and grow the facilities that are competitive and
profitable. The Company and the Union believe in the interdependent
relationship of quality, operating efficiency and empowerment of people to job
security. The Dana Style of management has for many years adhered to these
axioms. They are essential to the future of Dana and our workforce.

The Company’s recognition of the changing automotive component industry
prompted a change in our approach to UAW representation. The Company is
optimistic that a partnership with the UAW may assist Dana in achieving new
business with our Big 3 customers, which would benefit Dana and its employees.

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Employee’s freedom of choice is a paramount concern of Dana as well as the
UAW. We both believe that membership in a union is a matter of personal choice
and acknowledge that if a majority of employees wish to be represented by a
union, Dana will recognize that choice. The Union and the Company will not
allow anyone to be intimidated or coerced into a decision on this important
matter. The parties are also committed to an expeditious procedure for
determining majority status.

If a Dana employee chooses to be or not to be represented by the UAW, there will
be no reprisals by the UAW or the Company due to their choice.

These mutually beneficial commitments are the basis for a renewed partnership
between the Company and the Union. The Company and the Union are
individually and collectively committed to the implementation of these
fundamentally sound principles and if achieved, the Company, the Union and the
employees will benefit.

The letter of agreement provides that Dana will adopt a position of neutrality in the event
that the UAW sought to represent employees at the facilities covered by the agreement.
Respondents pledged not to say anything negative about each other. Among other things, Dana
pledged not to do or say anything that implied opposition to unionization. It promised to inform
employees, among other things, that it is neutral on the issue of representation by the UAW and
that it has a constructive relationship with the UAW

In the letter of agreement Dana also indicated that it would provide the UAW, upon
request, with a list of employees and home addresses, among other things. Dana promised to
provide access to the UAW to employees during the workday in non-work areas and to meet
with employees on the premises during work time.

The letter of agreement spelled out a procedure for determining the majority status of the
UAW. Once the UAW’s majority status was established, Dana agreed to recognize it and
bargain on an expedited schedule. The letter of agreement also provides:

The Union and the Company recognize that the cost of quality healthcare for
employees has become a national crisis that jeopardizes the Company’s ability to
compete in the global markets that Dana serves. Until a national solution to this
problem is achieved, the Union and the Company agree that the current situation
demands affirmative actions to mitigate the dire affects that the cost of healthcare
for the Company’s employees and the Union’s members has on the Company’s
ability to compete and make a reasonable return on its investment. Therefore the
Union commits that in no event will bargaining between the parties erode current
solutions and concepts already in place or scheduled to be implemented January
1, 2004 at Dana’s operation which include premium sharing, deductibles, and out
of pocket maximums. The parties are further committed to finding workable
solutions to reduce these ever-increasing healthcare costs and mutually agree to
further explore other avenues, including legislative initiatives, in the healthcare
care arena that could lead to a reduction of these costs for the Company and its
employees.

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The parties agreed that any collective bargaining agreements would last for at least four
years. The letter of agreement contained procedures for the parties to use if they were unable to
reach a contract on their own; it culminates in interest arbitration.

They agreed:

[T]hat in labor agreements bargained pursuant to this Letter, the following
conditions must be included for the facility to have a reasonable chance to
succeed and grow.

Healthcare costs that reflect the competitive reality of the supplier industry
and products(s) involved.
Minimum classifications.
Team-based approaches.
The importance of attendance to productivity and quality.
Dana’s idea program (two ideas per person per month and 80%
implementation.
Continuous improvement.
Flexible Compensation.
Mandatory overtime when necessary (after qualified volunteers) to support
the customer.

The letter of agreement provides for a procedure to alleged violations of the agreement. It
contains no strike – no lockout commitments by the UAW and Dana that are triggered when the
UAW requests the list of employees described above.

The letter of agreement call for the creation of a national partnership steering committee
composed of three members from both parties. The committee is to meet as needed:

[T]o review and discuss the labor agreements being bargained by the parties with
the goal of ensuring that the labor costs of those agreements are not materially
harming the financial performance of the facilities that they cover.

It provided that when the phase 1, level 13, facilities were organized the committee would meet
to review and discuss the overall impact of the labor agreements on these facilities. In order for
the UAW to commence organizing the phase 2, level 1, facilities a majority of the committee had
to concur that the overall impact of the labor agreements must not have materially harmed the

3 The letter of agreement places Dana’s facilities into three levels. Level 1 facilities are
generally those which manufactured products for the Big 3 automobile manufacturers; 27
facilities are placed at this level. Level 2 are generally those facilities that did not manufacture
products for the Big 3; 39 facilities are listed at this level. Finally, level 3 were generally those
facilities that manufactured or assembled products sold to non-union foreign owned assembly
facilities; four facilities are in this category. Level 1 facilities were further divided into two
phases. Fourteen facilities were placed in phase 1 and the rest were left for phase 2. The letter
of agreement, for the most part, applies only to level 1 facilities.

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financial performance of those labor agreements; if the committee deadlocks the matter is sent to
a neutral third-party for resolution. The Union also agreed not to conduct organizing campaigns
at more than seven level 1 facilities at any one time absent mutual agreement.

On August 13 Dana issued a press release announcing the agreement with the UAW. The
release, however, did not describe the details of the agreement as it noted that the terms of the
agreement were not disclosed by agreement of the parties. In December 2003 the UAW
requested a list of employees for the St. John facility, thereby triggering its no-strike obligations
in the letter of agreement as described above.

III. Analysis

A. Procedural Dismissal

As indicated above, the complaint does NOT allege that Dana has unlawfully recognized
the UAW. Dana, in its brief, states:

[T]he narrow issue presented in this case is whether the Letter of Agreement
entered into by Dana and the [UAW] on August 6, 2003 constitutes an unlawful
pre-recognition contract in violation of the [Act] (emphasis added).

I agree that the complaint raises only that narrow issue. Yet in his brief the General Counsel,
apparently recognizing the need in this case to establish unlawful recognition in order to prevail,
argues that Dana’s actions amounted to recognition of the UAW. It is important to note that the
General Counsel does not argue that the neutrality and assistance provisions of the letter of
agreement violate the Act. Rather, the General Counsel argues that Dana and the UAW:

[N]egotiated substantive terms and conditions of employment, most of which were
concessionary in nature, in exchange for card check and neutrality provisions that would
expedite the recognition process at the plant. Dana’s granting of exclusive bargaining
status to the UAW when it did not represent a majority of employees at the St. Johns
plant constituted interference with its employees’ Section 7 rights and unlawful support
of the union in violation of Section 8(a)(1) and (2) of the Act. The UAW’s conduct in
accepting recognition violated Section 8(b)(1)(A) (emphasis added.)

Section 102.15 of the Board’s Rules and Regulations requires that the General Counsel issue a
complaint that contains “a clear and concise description of the acts which are claimed to
constitute unfair labor practices …” The General Counsel did not plead the “act” of recognition
as unlawful. The General Counsel has failed to comply with the Board’s Rules by failing to
plead unlawful recognition in the complaint. It follows that the complaint be dismissed because
the General Counsel makes no argument that a violation of the Act has occurred in the absence
of unlawful recognition.

B. Dismissal on the merits

In the alternative I shall address the contentions made the General Counsel in his brief in
the event that the Board might find that useful. As the General Counsel correctly points out, it is
well-settled that an employer violates Section 8(a)(2) and (1) of the Act when it grants

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recognition to a union at a time when the union does not represent a majority of employees in the
recognized unit and a union violates Section 8(b)(1)(A) when it accepts recognition under those
circumstances. International Ladies’ Garment Workers Union v. NLRB, 366 U.S. 731 (1961).
There is no evidence in this case that Dana verbally or in writing recognized the UAW as the
bargaining representative for the St. Johns employees; to the contrary the letter of agreement
explicitly states that recognition has not been granted and the Respondents have confirmed that
throughout these proceedings.

The General Counsel and Charging Parties argue that the UAW and Dana went beyond
discussing tentative contract proposals in the letter of agreement and made substantive
agreements on the terms and conditions of employment of employees. The General Counsel
argues that by virtue of this conduct Dana recognized and bargained with the UAW. Thus the
question becomes whether Dana granted recognition to the UAW by entering into the letter of
agreement notwithstanding the disclaimers to the contrary. The letter of agreement does indeed
touch upon terms and conditions of employment. In some ways the letter of agreement is quite
specific. For example, as set forth above in more detail, the letter of agreement commits the
parties to negotiate a 4-year collective bargaining agreement and to use interest arbitration to
reach a contract if they are unable to do so.4 The General Counsel and the Charging Parties
argue that the letter of agreement also limits the employees’ right to strike from the date the
UAW requests a list of employees at the plant. But this provision by its terms waives only the
UAW’s right to call a strike; the employees’ Section 7 right to concertedly strike remains intact.
Moreover, because I conclude below that the UAW has not been recognized and is not the
bargaining representative of the employees it cannot by operation of law waive any rights of the
employees. In other ways the letter of agreement sets forth general principles that the parties
recognize, such as the UAW’s commitment that bargaining would not “erode current solutions
and concepts” concerning health insurance such as premium sharing, deductibles, and out of
pocket expenses and that labor agreements bargained pursuant to the letter of agreement must
include healthcare costs that reflect the competitive reality of the supplier industry and
products(s) involved, minimum classifications, team-based approaches, the importance of
attendance to productivity and quality, Dana’s idea program (two ideas per person per month and
80% implementation, continuous improvement, flexible compensation, and mandatory overtime
when necessary (after qualified volunteers) to support the customer for the facility to have a
reasonable chance to succeed and grow.

But other typical and essential elements of recognition are entirely absent from the letter
of agreement and the facts of this case. There is no evidence that Dana deals with the UAW
concerning employee grievances. Importantly, Dana remains free to make changes in terms and
conditions of employees without first notifying and on request bargaining with the UAW. This
is utterly at odds with the notion that Dana has recognized the UAW. There is no concept of
partial recognition in labor law; there is either recognition or there is not. Nor can it be said that
the letter of agreement constitutes a collective bargaining agreement from which recognition can
be inferred. The letter of agreement does not deal with significant matters such as wages,
pensions, grievances and arbitration, vacations, union security, etc. Moreover, in the complaint

4 AS the UAW points out, interest arbitration is not considered a mandatory subject of
bargaining. Sheet Metal Workers’ Local 59 (Employer Ass’n), 227 NLRB 520 (1976).

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the General Counsel describes the letter of agreement as setting forth terms and conditions “to be
negotiated in a collective-bargaining agreement….”

The General Counsel and the Charging Parties rely heavily on Majestic Weaving Co., 147
NLRB 859 (1964), enforcement denied on other grounds, 355 F.2d 854 (2d Cir. 1966). In that
case the Board held that the employer violated the Act by recognizing and negotiating a tentative
contract with a union when the union did not have majority support of the employees. The
contract was conditioned upon the union there gaining majority support from the employees.
But I conclude that Majestic Weaving is not controlling for at least two reasons. First, the Board
there concluded that the employer had recognized the union apart from negotiating a contract;
that is the very element missing in this case. Second, the collective-bargaining contract there
was complete and whole; the letter of agreement in this case is a far cry from a collective-
bargaining agreement. The General Counsel notes that in American Bakeries Co., 280 NLRB
1373 1374, fn. 5 (1986), the Board affirmed the judge’s decision that included a footnote stating
that in Majestic Weaving:

The Board has even held that bargaining prior to the achievement of the union’s majority
status is violative despite the fact that the contract is not enforced or is conditioned upon
the union’s ability to demonstrate majority standing at some later time.

But American Bakeries involved allegations of unlawful recognition and bargaining and the
judge’s remarks are classic dicta. Likewise in SMI of Worcester, Inc., 271 NLRB 1508 (1984),
the Board found violations based upon recognition and negotiation of a complete collective
bargaining agreement at a time when the union did not represent a majority of the employees.
The Board specifically found it unnecessary to consider the judge’s analysis of any pre-
recognition bargaining, an analysis that included reference to Majestic Weaving, because no such
violation was alleged in the complaint. Thus, SMI contributes little to the resolution of the issues
in this case.

The General Counsel argues that the confidentiality provision in the letter of agreement
“would have a tendency to further magnify the impression in the minds of employees that the
UAW and Dana had a special insider relationship” and “would necessarily impress upon
employees the idea that the UAW had already been recognized by Dana.” However, the
complaint does not allege that Dana and the UAW independently violated the Act by conveying
the impression to employees of unlawful recognition so to that extent I need not resolve that
matter. I do note, however, that it is not unlawful for an employer to indicate its preference for a
union. Coamo Knitting Mills, 150 NLRB 579, 581,595 (1964).

Finally, the General Counsel and Charging Parties rely on offers of proof made at the
hearing. I have again considered the offers and again conclude that proffered evidence is not
relevant to the allegations of the complaint.

Because the evidence fails to show that Dana has recognized the UAW for employees at
the St. Johns facility, I shall dismiss the complaint.

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C. Alternative dismissal

Dana and the UAW rely on Kroger Co., 219 NLRB 388 (1975) to argue that even if they
bargained with each other in reaching the letter of agreement that conduct was lawful. In Kroger
the Board found lawful provisions in a collective bargaining contract requiring an employer to
recognize the union as the bargaining representative of employees at additional, future facilities,
and apply the collective bargaining agreement to those employees. The Board made clear that
the application of the contract was conditioned upon the union receiving majority support at the
new facility. Citing Pall Biomedical Products Corp., 331 NLRB 1674, 1675-76 (2000),
enforcement denied on other grounds 275 F. 3d 116 (D.C. Cir. 2002), the General Counsel seeks
to distinguish Kroger by limiting its holding to instances where an entire existing collective
bargaining agreement is extended to a new unit of employees. There the Board found, among
other things, that the employer violated Section 8(a)(5) by failing to adhere to a letter of
agreement whereby the employer agreed to recognize the union under certain circumstances at
another facility. That case has little bearing on this issue in this case. Here, the UAW and Dana
have an existing collective bargaining relationship with several contracts covering over 2000
employees. The General Counsel concedes:

If the UAW had turned instead to its represented Dana facilities and bargained
with the employer to extend its master or other agreements to the St. Johns
employees, its actions would have been lawful.

It seems to me that if Dana and the UAW are free to extend their existing agreements to cover
the St. Johns employees they should be free to bargain for less than a full extension so as to
allow greater employee participation in the terms and conditions of employment at the new
facilities. I therefore conclude, in the alternative, that if the letter of agreement was the result of
bargaining, then such bargaining was lawful under Kroger and this case should be dismissed.5

Finally, the General Counsel argues that if the letter of agreement is found lawful under
Kroger:

unions could just go to employers and offer up concessions at the expense of
employees they do not and may never represent. Those negotiations could take
place without the employees even knowing about it, and the agreements, as in this
case, could be kept confidential. An employee might never know that the union
made these concessions in order to win an expedited election or card check.

This, however, is not such a case. Dana and the UAW publicly announced the existence of the
letter of agreement even if they did not reveal its precise terms. By now all employees who are
interested will know of the specific terms of the letter of agreement. Employees are free make
what they will of the letter of agreement in deciding whether or not to support union
representation. And what the General Counsel calls concessions might be viewed by some

5 The Charging Parties argue that if Kroger supersedes Majestic Weaving as it interprets the
latter case, then Kroger should be overruled. I am without authority, of course, to overrule
existing precedent.

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employees as a mature recognition of existing economic realities in the automotive parts
industry.

The Charging Parties make a number of arguments not encompassed by the complaint.
For example, they argue that a pre-recognition agreement violates Section 7 because it
“inherently constitutes a threat of reprisal or promise of benefit based on employee exercise of
protected rights.” They also argue that the UAW will violate its duty of fair representation if and
when it is recognized by Dana. The General Counsel controls the complaint and he has made no
such allegations. The Charging Parties also argue that “the UAW did not obtain, or even attempt
to obtain, any benefits or improvement to employees’ working conditions in the Letter of
Agreement” (emphasis in original). But this argument is beside the point; the employees will
decide whether they desire union representation and they will be free to assess letter of
agreement in that process.

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended6

ORDER

The complaint is dismissed.

Dated, Washington D.C., April 8, 2005.

William G. Kocol
Administrative Law Judge

6 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulation,
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 purposes.