Emeryville Research Center

National Labor Relations Board - Board Decisions

Jul 9, 1970

184 N.L.R.B. 504 (N.L.R.B. 1970)

504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Emeryville Research Center , Shell Development
Company, a Division of Shell Oil Company and
Association of Industrial Scientists. Case
20-CA-5181
July 9, 1970
DECISION AND ORDER
By MEMBERS FANNING, BROWN, AND JENKINS
On March 4, 1970, Trial Examiner Allen
Sinsheimer, Jr., issued his Decision in the above-en-
titled proceeding, finding that the Respondent had
not engaged in certain alleged unfair labor prac-
tices within the meaning of the National Labor
Relations Act, as amended, and recommending the
dismissal of the complaint. Thereafter, the General
Counsel and the Charging Party filed exceptions to
the Trial Examiner's Decision and supporting
briefs. Respondent filed a reply brief
Pursuant,to the provisions of Section 3(b) of the
Act, the National Labor Relations Board has
delegated its powers in connection with this case to
a three-member panel.
.The Board has reviewed the rulings of the Trial
Examiner, made at the hearing and finds that no
prejudicial error was committed The rulings are
hereby affirmed. The Board has considered the
Trial Examiner's Decision, the exceptions and
briefs, and the entire record in the case, and hereby
adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
MEMBER BROWN, dissenting:
Contrary to the majority, I would reverse the
Trial Examiner and find that Respondent violated
Section 8(a)(5) and (1) by invoking the "competi-
tive adder," without first bargaining with the
Union. While the applicable agreement precludes
negotiation with respect to merit increases, general
wage increases are specifically made bargainable.
In accordance with the Trial Examiner's finding in
an earlier case, Emeryville Research Center, 174
NLRB 114, 1 would find that though the "competi-
tive adder" was structured into the merit increase
system, it was actually in the nature of a general in-
crease which could not be implemented without
prior negotiation. Thus, while the "adder" did not
immediately raise the salary levels of any em-
ployees, it was a fixed percentage uniformly applied
to all receiving increases and was based on the type
of objective criteria determinative of general salary
levels, rather than the subjective considerations
that normally come into play where merit increases
are involved. Also significant is the fact that since
the inception of the "competitive adder," Respon-
dent has been able to dispense with any general in-
creases. In these circumstances, it is my opinion
that the "competitive adder" bears strong kinship
to general increases, is founded on the principles
normally governing such increases, and hence
should not be considered as anything other than a
transparent attempt to remove the critical issue of
salary levels from the bargaining table.
Nor can I agree with the Trial Examiner's alter-
native finding that the Respondent satisfied its duty
to bargain with respect to this issue. The "competi-
tive adder" is an integral part of the guide curves.
Union requests for information concerning the
operation of the guide curves date back to 1966
and have not been honored despite an outstanding
Board order requiring production of this data. Until
the Union is afforded an opportunity to examine
the information necessary to an understanding of
the salary system, there can be no good-faith bar-
gaining with respect to any component thereof. Ac-
cordingly, I would find the refusal to bargain as al-
leged in the complaint and issue an appropriate
remedy.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
ALLEN SINSHEIMER, JR., Trial Examiner: This
proceeding was heard at San Francisco, California,
on April 29 and 30, May 1, September 29 and 30,
and October 1, 2, and 3, 1969. The complaint
herein, issued on February 18, 1969, and based on
a charge filed August 27, 1968, alleges a violation
of Section 8(a)(1) and (5) of the Act by unilateral
announcement of salary increases and subsequent
grant of said increases by Emeryville Research
Center, Shell Development Company, a Division of
Shell Oil Company, herein called Respondent. The
foregoing will involve the application and construc-
tion of a contract between the parties, the meaning
of certain terms thereof, prior practice, whether the
Respondent did grant a wage increase as alleged,
and whether or not Respondent unilaterally did so
in violation of statutory requirements with respect
to bargaining.
The questions presented are hereafter illu-
minated by a statement of the issues.
Upon the entire record, including observation of
the witnesses, and after due consideration of the
able briefs filed by the General Counsel, the Charg-
184 NLRB No. 53
EMERYVILLE RESEARCH CENTER 505
ing Party, and the Respondent, I make the follow-
ing:'
FINDINGS AND CONCLUSIONS
I THE BUSINESS OF RESPONDENT
Respondent is a Delaware corporation engaged
in petroleum and chemical research in Emeryville,
California. In the course and conduct of its business
Respondent annually sells goods and services
valued in excess of $50,000 directly to custormers
located outside of California and annually
purchases and receives goods valued in excess of
$50,000 directly from suppliers located outside of
California. Respondent admits, and I find, that at
all times material, it has been, and is, engaged in
commerce and in operations affecting commerce
within the meaning of the Act.
II THE LABOR ORGANIZATION INVOLVED
The Association of Industrial Scientists (herein
called Association) is, and at all times material
herein has been, a labor organization within the
meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction and Background
The complaint in paragraph VI alleges, Respon-
dent's answer admits, and I find the following unit
to be appropriate:
All professional employees on the payroll of
the Emeryville Laboratories of Respondent
while employed in the classifications of
Chemist, Junior Chemist, Physicist, Junior
Physicist , Engineer, Junior Engineer , Chemical
Abstractor, Assistant Librarian, Mathemati-
cian , Junior Mathematician , Metallurgist and
Junior Metallurgist, excluding all other em-
ployees, members of management, guards and
supervisors as defined in the Act.
Paragraph VII of the complaint alleges:
At all times since 1948 and continuing to
date, the Association has been the majority
representative for the purposes of collective
bargaining of the employees in the unit
described above in paragraph VI, and by virtue
of Section 9(a) of the Act, has been, and is
now the exclusive representative of all the em-
ployees in said unit for the purposes of collec-
tive bargaining with respect to rates of pay,
wages or salaries , hours of employment, or
other terms and conditions of employment.
Respondent's answer asserts:
With respect to paragraph VII, respondent
alleges that salaries not wages are paid, that
those salaries are not paid by the hour, that
those salaries have been and are paid to the
employees in the unit represented by the As-
sociation on an individual basis, and that the
Association has never undertaken to bargain
collectively with respect to those individually
paid salaries. Respondent admits the allega-
tions of paragraph VII except to the extent
they are inconsistent with the allegations of
this paragraph.
Paragraph VIII of the complaint alleges as follows:
(a) Beginning on or about February 29,
1968, and continuing through on or about July
30, 1968, Respondent and the Association bar-
gained about salary increases for the em-
ployees in the unit described above in para-
graph VI.
(b) On or about April 10 and on or about
June 28, 1968, Respondent announced to the
Association that it was going to increase sala-
ries unilaterally for employees in the unit
described above in paragraph VI when
Respondent had an obligation to bargain with
the Association about such increases
(c) Beginning on or about July 1, 1968, and
continuing to date, Respondent had put into
effect the salary increases described in para-
graph VIII(b).
Respondent's answer denies the allegations of para-
graph VIII.
Since 1948, the Respondent and the Association
have been parties to successive collective-bargain-
ing agreements covering the employees in the unit
set forth above. The parties stipulated that
throughout the bargaining history of the parties
(commencing in 1948) article XII of the contract,
sections 1 and 2, of the applicable contract herein,
which was effective November 16, 1967, provides:
1. The present salary of each employee shall
continue for service performed during the term
of this Agreement subject to change by the fol-
lowing means:'
A. Individual employee merit increases
made by the Company.
B. Any general salary increases to em-
ployees covered hereby as made by the
Company for reasons other than individual
merit.
i The parties at the hearing stipulated that Frank H Douma was manager
of personnel and industrial relations at Respondent's Emeryville Research
Center, Shell Development Company, prior to July I, 1967, that E J Geg-
gis replaced Frank H Douma on July 1, 1967, that Frank H Douma
replaced E J Geggis as such manager in January 1969, and that E J Geg-
gis and Frank H Douma , while acting as managers of personnel and indus-
trial relations at Respondent 's Emeryville Research Center, were and are
agents of Respondent acting on its behalf within the meaning of Section
2(13) of the Act The Respondent on December 12, 1969, filed a motion
to correct the record in certain specified respects No opposition thereto
has been filed I have checked each of the proposed corrections and find
that they are proper and should be granted Accordingly, the motion to
correct the record is granted
2 Art X11, secs 3 and 4, of the same contract , provide
3 The Company will present the Association with the following
506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pursuant to the foregoing article XII of the con-
tract , Respondent had at its sole discretion given
merit increases under a system which used annually
derived " guide curves " either from the inception of
the contractual bargaining relationship in 1948 or
shortly thereafter . Since about 1954 the new guide
curves have become effective on July 1 . The nature
of the curves and how they have been utilized will
be set forth hereinafter . During the same period,
the parties , from time to time, negotiated for
general increases covering substantially all of the
employees as more specifically detailed , post. Until
about 1966 the Association raised no questions
concerning or objections to the guide curves or
their use . In 1966 the Respondent added an ele-
ment to the curves called a " competitive adder"
which it had not inserted or previously utilized in
constructing the curves . The "competitive adder,"
a percentage increment which Respondent built
into the guide curves, will be considered more fully
hereafter.
The Association then requested certain data con-
cerning the curves and that the guide curves them-
selves be furnished to it . Respondent failed and
declined to do so. The Association filed charges
and a complaint was issued against the Respondent.
This resulted in Case 20-CA-4446, which was
tried before Trial Examiner Eugene Kennedy
between December 5, 1967, and March 14, 1968.
The Board agreed with the Trial Examiner that the
Respondent had violated Section 8 ( a)(5) by "refus-
ing to provide the Union with the charts known as
`salary guide curves,' current as of the date they
were requested , a written explanation of the salary
guide curves, merit ratings for employees in the
bargaining unit and salary guide curves for the
previous 5 years and a list containing certain infor-
mation including academic degrees of employees
and the principal type of work they have been en-
gaging in." This case is now pending before the
court of appeals . In the course of that decision, cer-
tain references to the "competitive adder" were
made which will be considered more fully
hereinafter.
On July 1, 1966, the Respondent for the first
time included a "competitive adder " in making the
guide curves which it utilized as part of its merit
rating system . On July 1, 1967, it also included a
"competitive adder" in constructing the curves and
on July 1, 1968, it again inserted the "competitive
A A list unidentified by names showing individual salaries of all
employees by experience credit groups as of June 30 each year
The list shall indicate individual salaries and merit ratings as of
June 30 of both the current and preceding year(entrance salaries
will be shown for individuals employed in the interim) In the
event of a general salary increase during the year, the above list
will be accompanied with a similar list showing salaries im-
mediately before and after the general increase
B A list showing groups of employees by years since first college
degree as of January I each year This list will show only the
median salary and number in each group Data will be combined
wherever necessary to avoid showing groups of less than twelve
(12) individuals
adder" into the curves. The latter is the basis of the
charge herein.
In 1966, the insertion of the "competitive adder"
led to an effort by the Association to obtain arbitra-
tion of the Respondent's right to do so. Respondent
refused to arbitrate and its refusal was upheld by a
United States district judge. Because, pursuant to
stipulation, no findings of fact and conclusions of
law were made, the reasons for the dismissal of the
Association's complaint seeking arbitration were
not enunciated. No appeal was taken from the
judge's ruling.
The insertion of the adder into the curves in
1967 led to an unfair labor practice charge by the
Association which was subsequently withdrawn by
the Association assertedly in the belief that it would
have to be referred to the General Counsel's office
in Washington and would hinder the processing of
the case then pending and involving the guide
curves. Since the reason for withdrawal was neither
developed nor appears material, for the purpose of
this proceeding, I find only that the Association did,
in fact, withdraw the charge that it had filed with
respect to the 1967 competitive adder.
The competitive adder introduced into the curves
July 1, 1968, therefore, is the basis of the charge
and complaint herein.
B. The Issues
The General Counsel and the Charging Party
contend that the "competitive adder" amounts, in
effect, to a general increase within the meaning of
the term "general increase." The Charging Party in
its brief also argues that the adder was "something
basically new in the Company's salary administra-
tion plan and something not contemplated by the
contract." The General Counsel in his brief states-
"the effect of the competitive adder on the guide
curves is a subject on which the AIS has a right to
bargain." Both contend that the Respondent has no
right during the contract (or otherwise) to insert a
"competitive adder" into the guide curves without
first negotiating as to it with the Association. They
also assert that the Respondent did not negotiate
with the Association prior to inserting a competi-
tive adder in 1968 (and that its action is so doing in
the years 1966 and 1967 had been improper).3 The
amount of this competitive adder was 3.5 percent
in 1966, 4.5 percent in 1967, and 4.5 percent in
1968.
The Respondent contends that the insertion of a
"competitive adder" of a specified amount into the
guide curves was inherent in its right to determine
4 The salary status of an individual employee inay be the subject of
discussions between the employee and Management at any time but
shall not be the subject of consideration beyond Step 2 of the Adjust-
ment Procedure Article of this Agreement
The parties agreed that there had been some changes, over the years, in
sections 3A and 3B
' Since any asserted violations in 1966 and 1967 are clearly barred by
Section 10(b) of the Act, consideration of matters at that time is by way of
background for a fuller understanding of both the General Counsel's con-
tentions and Respondent's asserted defenses
EMERYVILLE RESEARCH CENTER
merit increases and to derive and construct the
guide curves as a rational standard for that purpose.
Respondent contends that the "competitive adder,"
like numerous other changes that it had made
without objection in constructing the guide curves
in the past, was simply one element in deriving the
guide curves The General Counsel on the contrary
claims that , since it was based on economic ele-
ments normally taken into account in determining
general increases and since it raised the level of the
guide curves, the competitive adder necessarily "in-
volved or constituted a general increase. Respon-
dent asserts that the insertion of the "competitive
adder" into the guide curves per se would give no
one an increase and did not necessarily lead to in-
creases for substantial numbers of persons. Respon-
dent also says the competitive adder has been
predicated on competitive factors, items, and con-
siderations rather than general economic elements.
Respondent states that a "general increase," as
used under the terms of the contract, means an in-
crease given to almost every employee of a specific
percent or amount at the same time. The Respon-
dent, in addition, claims that it did not fail to bar-
gain about the competitive adder in 1968 (or any
other time) and asserts it discussed the adder pur-
suant to the Association's request and was prepared
to negotiate about it even though not obligated to
do so. However, Respondent says the Association,
although notified on April 10, 1968, that the
Respondent intended to include a 4.5 percent
adder in the curves on July 1 , 1968, did not ask to
negotiate concerning it, propose a different
amount , or object to its introduction until June 28,
1968.
The Respondent further asserts that the matter in
1968 is now barred by Section 10(b) of the Act
since the adder was originally inserted in 1966 and
therefore the 6-month period has elapsed. It further
contends that the adder has become a condition of
employment as a result of its insertion in 1966 and
1967, that it was so recognized by the Association,
and that Respondent accordingly need not bargain
about it during the life of the contract.
In considering the complaint herein , I note that
the issues arose in conjunction with and during the
life of a contract. They did not arise or appear to
do so in 1968 in relation to a contract opening. The
right to insert the adder or the obligation to discuss
such insertion accordingly arose during the term of
the contract. The contract involved became effec-
tive as of November 16, 1967, to November 17,
1968. The questions therefore are what was the
meaning of the term "general increase " as used in
the contract and what did the grant of "individual
employee merit increases made by the Company"
involve or entail under the contract? In the latter
connection the historical practice thereunder would
appear to be particularly pertinent. So also histori-
cal practice or application would appear to have a
significant bearing on what meaning should be
given to the term "general increase" as used in the
507
contract. There must also be considered and care-
fully analyzed what the effect of the "competitive
adder" is or may be I also note at this point in con-
nection with both the foregoing and the entire
matter that there is involved to some extent a
matter of semantics, of Interpretatiton and meaning
of terminology The latter, it appears to me,
requires an analysis of prior practice in order to
determine what was or was not covered by the con-
tract and to ascertain the meaning and intent
thereof I also note for further consideration that
the Association did not seek to renegotiate certain
matters during the renewal or open periods
between contracts when it might have done so.
Finally I note, as will develop, that there are
professional qualified employees here involved and
the wage structure does not appear to fit the classi-
cal concepts relative to distinctions between "gen-
eral" increases and "merit" increases, particu-
larly in that the merit system with the guide curves
has always incorporated certain competitive aspects
or considerations and therefor directly or indirectly
economic considerations Perhaps the difficulty
herein stems, in part, from the inclusion over the
years in the merit system of some elements which in
most cases in a merit system involving production
workers would not be involved or at least not
determined by unilateral act of the employer.
The principal questions for resolution appear to
be. (1) What does the term "general increase" in-
volve or mean under this contract) (2) What does
the merit system involve and how do the guide
curves relate to it? (3) What is the effect of the
competitive adder on the salary structure? (4) Was
the Respondent obligated to negotiate, during the
contract, concerning the competitive adder? (5)
Assuming an obligation to bargain as to the com-
petitive adder, did Respondent in 1968 fail to
negotiate or bargain concerning the competitive
adder prior to July 1, 1968, or by putting it into ef-
fect on July 1, 19689
C. The Facts
1. The guide curves (What are they? What has
been their place in the wage-salary administration
structure of Respondent?)
There are 9 guide curves and they define some
10 bands. These appear on a paper having vertical
and horizontal axis with the dollar figures on
the vertical axis, with the highest figures on top
and the lowest on bottom, indicating salary per
month. Along the horizontal axis are numbers cor-
responding to "Years of Experience Credit" rang-
ing from the lowest on the left to the highest on the
right. "Experience credit" means years of service
with the Company plus an allowance which
represents research experience from the date of the
B.S. degree. Attached hereto as Appendix B is an il-
lustrative but not an actual guide curve, since the
508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
actual curves as set forth, supra, have not been
furnished to the Association.4
Respondent uses these guide curves and merit
ratings related thereto in order to give individual
merit increases. The assigned merit ratings place an
individual within 1 of 10 particular guide curve
ranges from 1 at the top to 9 at the bottom These
are numbered 1, 2, 3, 4, 5, 5a, 6, 7, 8, 9. There are
accordingly 10 different merit ratings each con-
forming to 1 of the 10 bands defined by the guide
curves. The top is open to infinity and the bottom
theoretically to zero.
Under article XII, IA, above, the Respondent
gives merit raises on an individual and not a group
basis. Each year the Company examines each rated
person in the bargaining unit individually to deter-
mine whether to give the individual a merit raise
pusuant to article XII, IA and, if so, how much.
One of the matters considered is salary position
with respect to the curves. This is indicated by his
merit rating within the 10 bands and corresponds
numerically to 1 of the 10 bands, and by his ex-
perience credit which corresponds to a space along
the horizontal span of the band. The factors in ad-
dition to the curves which management considers in
determining whether to give an individual a raise
are otherwise subjective and qualitative, and these
involve the time of the year that would be ap-
propriate, what it thinks of the man, his prospects,
potential, progress, etc. Respondent accordingly
uses merit ratings and guide curves in making its
subjective judgment as to what raise, if any, to pay
an individual.
Respondent has put a new set of curves into ef-
fect every year since about 1948, and it has put a
new set into effect on July 1 every year since 1954.
It constructs the curves from data it obtains yearly
from competitive companies. Originally, Respon-
dent had included data from companies other than
competitive ones but in 1954 or 1955 the number
was reduced from about 28 to 10 or 11 (this
number has also been 12 and most recently 9), and
those were companies considered to be a competi-
tive group. Ordinarily the data has been accumu-
lated in the autumn of each year and the new
curves announced about March of the following
year. These curves accordingly would be based on
data that would appear to be nearly a year old by
the time they were put into effect on the following
July 1.
Since the inception of the curves and the merit
system, the following changes, among others, have
taken place: Initially the "curves" were three
straight lines. The straight lines were changed to
curves and the number increased from three to six
to eight to nine , the present number.
In dealing with and constructing the curves the
Respondent has made various changes in the
curves. Each year, as they are constructed anew,
they have been higher than the year before.
Changes have also included: the changes from the
original straight lines to curves; the increase in
number of curves, which increased the salary
spread;' introduction of a PHD degree factor since
1963 in the upper left-hand quadrant to take into
account that Respondent has more PHD's than its
competitors; building an increment into the lower
right-hand corner because Respondent didn't be-
lieve the curves should taper off as much there;
since at least 1964, Respondent has unilaterally
smoothed the curves and made the slopes and the
spaces between them look in its judgment more
reasonable. This smoothing has changed the curves
level in amount up to 3-1/2 percent. From 1957 to
1961 Respondent unilaterally built a percentage
implement called the "plus factor" into all the
curves above the median. This was an "anticipatory
factor" intended to anticipate the movement of
salaries during the year. It covered all employees in
the upper salary brackets Since at least 1964,
Respondent has also unilaterally built a percentage
implement into the upper left-hand quadrant of the
curves, this being an anticipatory factor meant to
anticipate the movement of salaries during the year
caused by increases in starting salaries.
All of the foregoing- changes were made by the
Respondent on its own. At no time did the Associa-
tion make any request to negotiate concerning
changes in these curves or the construction of the
curves until the 1966 request for the guide curves
referred to, supra.
2. The competitive adder
The Respondent contends that the competitive
adder which it introduced into the curves in 1966
did nothing more than make a further change in the
curves which would anticipate the change in sala-
ries that would occur in the year involved In other
words, that it was seeking to anticipate or project
the general change in competitive salary levels dur-
ing that particular year, rather than to base the
curves solely on previous data coupled with the
kind of adjustments referred to above.
The competitive adder was defined by the
Respondent in a memorandum of April 17, 1968
(which was presented to the Association), as
follows:
DEFINITION
COMPETITIVE ADDER
Competitive adder is a percentage increment
to the salary guide curves. The increment
represents a forecast of the impact of a variety
' Appendix B (G C Exh 12) was drawn by an association representative
on the basis of information furnished by Respondent and received without
objection
' Respondent increased its spread because its competitors had increased
theirs
EMERYVILLE RESEARCH CENTER 509
of economic conditions on competitive salary
levels. (It might more appropriately be called
an "anticipatory factor.")
The adder is arrived at through study of such
economic indicators as, wage settlements in
the major industries , trends in gross national
product, overall demand for technical/profes-
sional talent and inflationary trends-but is not
limited to these.
In sum , the objective of competitive adder
(or anticipatory factor) is to ensure that we
will maintain a competitive salary postition on
a current basis, i.e., each year, when we mea-
sure our salary levels against those of competi-
tion, we should find that we have moved in
consonance with that competition-as opposed
to a less desirable " ahead -behind " situation.
April 17, 1968
Although the above refers to a number of ele-
ments as criteria used in arriving at the competitive
adder, Respondent's witnesses Douma and Geggis
testified that the reason for the adder was an effort
to approximate the changes that would occur on
the part of their competitors in the oil and chemi-
cal industry and that this was the main considera-
tion; namely, to maintain a comparable position
with competition with respect to salary levels. The
extent to which this effort were successful could
largely be determined by whether the guide curves
with the adder included, by adding it to the points
that had been arrived at without the adder, would
approximate new guide curves without an adder a
year later.'
The effect of the adder is, as set forth, to raise
the level of the guide curves. Whether or not this
affects salaries and how it affects salaries will be
discussed hereafter. I note that in the previous deci-
sion, 174 NLRB 114, dealing with the guide curves,
the Trial Examiner stated "although the collective
bargaining agreement specifically provides for bar-
gaining for a general increase , by using the term
competitive adder Respondent effected a unilateral
general salary increase without bargaining about it
with the AIS." In connection with this "finding" the
parties stipulated in this proceeding that the prior
case did not involve the question of whether or not
the introduction of the competitive adder was an
unfair labor practice' and further indicated that the
matter of the nature of the adder was to be fully
considered herein.' The General Counsel would not
stipulate if the question of whether the adder was a
general increase was litigated in the previous case.9
A consideration of the decision in the preceding
case indicates that this "finding" was not necessary
to the Board decision. The only item I consider of
significance in this respect is that the matter of the
adder did have a bearing on the necessity for the
guide curves. I conclude that this is what the Board
so found in making and arriving at its decision. I ac-
cordingly consider that this "finding" of the Ex-
aminer that the adder was a general increase was
neither a formal finding nor a necessary part of the
decision.10 This latter conclusion was arrived at by
myself prior to noting that the Board itself in a brief
filed with the court of appeals in the prior case has
referred to the same finding and stated as follows
therein at footnote 21:
The Company has not been injured by the
Trial Examiner 's gratuitous remarks (R. 30)
that the Company's introduction of the com-
petitive adder amounted to "a unilateral
general salary increase without bargaining,"
since neither he nor the Board made such a for-
mal finding. [Emphasis supplied.) Further-
more , there is ample warrant for his suggestion
that the procedures have important similarities:
both " are based on salaries that competitors of
[the Company] pay or will pay" and "have the
effect of increasing the salary structure by an
overall percentage" (R. 30). It is arguable, to
say the least, that the Company could not
° Douma testified on direct examination
Now, in 1966, did the Company put into its curves an anticipatory
factor called the competitive adder'[
A Yes
Q And what was that, what was the reason that management de-
cided to do that then9
A The competitive salaries moved from year to year and in an-
ticipation of this movement , in order to make sure that our people
were paid competitive salaries, we built in this factor - anticipatory
factor or competitive adder
On cross-examination, Douma testified
Q (By Miss Girard) Do you know, first of all, Mr Dourna, if the
companies with whose systems you 're familiar and with whom Shell
exchanges data-if any of those use some kind of anticipatory factor as
Shell does in their salary administration system9
A I'm sure some do, but I couldn't tell you for sure who they were
or precisely how they arrive at it
I'm also confident that some don't The problem was really that
when you collect data for a certain date as of one year and 12 months
later you collect the same data for the same people and the salaries
have gone up, then you know if you are going to keep your people
competitive with those people you 're going to have to build in some
kind of anticipatory factors
They may have raised those figures by deciding to change
everybody's classification from chemist to senior chemist, and yet this
would have an impact on the average salary of the group And this
sometimes frankly is done
So our problem is to make sure that our people keep up , because
you can lose a man just as fast because somebody offers him a senior
position somewhere else, even though they claim they are paying their
chemist position the same as yours even though most of their people
are classified as seniors That's the problem you run into
Seep 734 of tr Also p 73 thereof
° See particularly pp 72-73, eta(, oftr
° See p 734 The General Counsel appears to have left this open for con-
tention by stating
Miss GIRARD Your Honor , 1 will stipulate I think the facts of the
other case show that the General Counsel and the Board do not allege
in its complaint as an unfair labor practice the inclusion of the com-
petitive adder But whether it is or is not a general increase mayor may
not have been found in the other case to have been so as a fact with re-
gard to the ultimate issue of the illegality or the legality of not supply-
ing certain information to the AIS
1i As is evident herein the adder, at first , may appear to resemble a
general increase but upon further detailed analysis I have concluded it is
not
510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
refuse to bargain about the size of the competi-
tive adder.
I therefore am proceeding to consider the matter
of whether or not the adder constitutes or is in the
nature of a general increase from the record set
forth herein after first noting what discussion, if
any, was had with respect to the competitive adder
in 1966, 1967, and 1968. In connection with
negotiations in 1965 and 1966, starting about July
1965 the Association and the Company had a series
of meetings, discussing the Company's position and
what it did in constructing the curves as set forth
above. According to the testimony of Respondent
witness Douma, a member of the executive com-
mittee of the Association in 1965, stated that the
"Company had the absolute right to construct the
curves." In the spring of 1966, about May 6, the
Respondent proposed to the Association that it
agree to Respondent's putting a 3-1/2 percent com-
petitive adder into the curves. The Association
refused to discuss this proposal. Association witness
Magoon admitted that the Association advised the
Respondent that a concern it had with respect to
the competitive adder proposal was that "under the
agreement the Association could not talk about the
competitive adder." The Company also proposed to
change the agreement so that the Association could
talk about the matter. This proposal presented to
the Association about June 2, 1966, by the Respon-
dent involved a number of sections.
Section 4(a) thereof provided:" "In addition as
of July 1, 1966, each of the salary guide curves to
be put into effect as of that date will be adjusted
upward by 3.5 percent at all points."
Section 4(b) thereof provided: "Effective as of
July 1, 1966, Article XII paragraph 2 of the current
Agreement shall be changed to read as follows: In
order that either party may present its ideas con-
cerning the general subject of wages, including a
general salary increase, the Association and the
Company shall meet upon request of either party
for this purpose at reasonable times and intervals.
No general increase under 113 above shall be put
into effect until approved by the Association."
(Emphasis supplied.)
According to testimony of Respondent witness
Douma, the Association said it wanted no part of
the competitive adder and therefore wanted no part
of this change in the agreement.12 Following these
discussions in 1966, the first competitive adder was
put into the curves on July 1, 1966. During the
spring of 1966, there had also been discussions
about a general increase. About 3 weeks after July
1, 1966, a general increase was agreed upon by the
parties in the amount of 4-1/2 percent retroactive
to October 1965 except for a small number of per-
" Resp Exh 9
" As discussed hereafter , the Respondent in June 1968 again proposed
to change the language of art X11 , par 2 According to Geggts, at that time
in connection with a different association proposal, he suggested a modifi-
cation of contract to cover it, although Respondent considered and
sons who may have received 2 percent in April
1966.
A few months thereafter in the fall of 1966, the
Association requested another general increase of 7
percent. Association witness Eugene Magoon,
former executive committee member, vice
chairman, and chairman, testified the Association
needed the 7-percent general increase it was
requesting even though the adder had been put into
the July 1, 1966, curves.
After the adder was incorporated in the salary
system, the Association executed two agreements,
one in 1967 and the other in 1968. Both main-
tained the same article XII and both gave the As-
sociation the right to negotiate for general increases
while at the same time maintaining the right of the
Respondent to give merit increases.
As set forth, the competitive adder was also in-
corporated in the guide curves on July 1, 1967.
Magoon testified that it was his understanding from
what Douma told him in 1966 that the adder was to
be in the guide curves each succeeding July 1
thereafter.
In 1968 the meetings and discussions occurred
which led to the instant case. In the fall of 1967,
the Association had opened the contract for modifi-
cation. It did not seek modification of article XII,
sections 1 and 2, but of numerous other provisions.
On January 5, 1968, certain negotiated modifica-
tion changes were approved. During the fall 1967
negotiations, according to Geggis, the question of
the adder came up indirectly in relation to an As-
sociation contract proposal calling for the showing
of an individual's placement on the guide curves at
the time of announcement of a new raise. An as-
sociation bulletin of January 17, 1968, explained
"The Executive Committee felt that this was espe-
cially important in giving a continuity to the salary
picture under the new Competitive Adder System."
On February 2, 1968, the Association requested
a meeting with the Respondent to "continue the sa-
lary negotiations of November 6, 1966 [sic].13 The
Association wishes to further explore and discuss
the system of salary administration that was begun
on July 1, 1966 and is currently in use by the Com-
pany." [Emphasis supplied.]
William Leonard, Association executive commit-
tee member, vice chairman September 1967, chair-
man in February 1968 and committeeman to
February 1969, testified the salary system referred
to included the adder which had been introduced
and put into the curves July 1 each year.
Leonard stated that at the February 29 meeting
the spokesman for the Association spoke about the
adder and further testified.
negotiated as to this proposal anyway Geggis said the Association did not
request or pursue such modification
13 See G C Exh 4, Resp Exh 1 0 , re Nov 9, 1966, and Resp Exh 1 I , re
November 1966
EMERYVILLE RESEARCH CENTER 511
He 14 stated that the unilateral introduction
of the competitive adder was believed by the
A.I.S. to be an unfair labor practice. Does that
answer your question?
*
Well, it was also stated that we want to
discuss the competitive adder now; we wanted
to learn about it; we wanted to learn what the
economic factors were that it presumably
covered; and we wanted that information in
addition to the usual type of information-that
is, the qualitative description of the guide
curves in preparation to the drawing up of a sa-
lary proposal which the Committee intended to
eventually give to Company representatives.
The response was willingness to meet with us
and discuss competitive adder as well as the
guide curves qualitatively, and we did meet.
Subsequently a meeting was held on April 10 at
which Geggis for Respondent outlined the nature of
the adder and agreed to write it down for the As-
sociation, which was done and submitted to the As-
sociation on or about April17 as set forth, supra.
Leonard was asked by the Trial Examiner, "What
did they say on April 10?" and he replied:
THE WITNESS. That they presumed in the
present economic picture that a competitive
adder, which traditionally is applied- tradition
the past few years-supplied on June 1st,
would be on the order of 4.5 And I thought it
was four percent. This is 4.5
TRIAL EXAMINER. Who made the statement)
THE WITNESS Mr. Geggis. This is what they
anticipated.
Leonard also testified that at the April 10 meet-
ing in the discussion concerning the adder. "Mr.
Geggis stated that through the competitive adder
80 to 90% of the Group B15 members would receive
raises." [Emphasis supplied.]
In a bulletin issued April 30, 1968, the Associa-
tion referred to the February 29 and April 10
meetings as follows:
On February 29, in the first A.I.S -Manage-
ment salary negotiations since November,
1966, the A I.S. asked for a presentation by
Management of its Salary Administration.
A.I.S members are aware that in the interven-
ing period A.I.S. Executive Committees have
opposed the Competitive Adder, unilaterally
instituted by Management on July 1, 1966, and
have attempted to obtain the salary Guide
Curves and other salary information which the
A.I.S. is entitled to have. The present need for a
substantial upward adjustment in salaries as well
as the determination of the A.I.S. to negotiate
our salaries has led us to resume salary negotia-
tions in spite of the handicap of bargaining
without the desired salary data. The present
discussions will lead into new salary proposals by
the A.I.S. [Empahsis supplied.]
In a second A I.S.-Management meeting on
April 10, Mr Geggis presented the current Sa-
lary Administration.
Although the Salary Administration has been
greatly modified over the years, its basic objec-
tives have been to pay competitive salaries and
within the Company to compensate on the
basis of relative contribution with real dif-
ferences between salaries of individuals. Shell
has no "salary increase" budget item, the money
needed to pay competitive salaries is fitted into
the total budget.
Each year old Guide Curves are discarded and
new ones are derived. The derivation of Salary
Guide Curves to be initiated on July 1, the
start of each salary year, begins yearly with the
averaging of 4800 pieces of salary data ob-
tained as of September 1 of the previous year
from 12 companies (names are confidential).
Rough competitive curves are obtained by con-
necting decile points of five year experience in-
terval groups. Data for Ph.D.'s are isolated to
obtain a correction to the average curves for
Ph.D. content. There is smoothing of the data
to give consistent decile spacings. The super-
visors are removed from the data to give a new
set of derived Guide Curves for Group B as
discussed in terms of "Merit Ratings" in Mem-
bers Bulletin S8-67, September 1, 1967.
Finally, the Competitive Adder (or Anticipato-
ry Factor) is added to all points of the derived
curves to obtain the final Guide Curves. The
Adder which Management projects for next year,
starting July 1, 1967, (sic)'6 was announced as
4.5%. In addition Management intends to add
a further small percentage (amount is con-
fidential) to all points on the Guide Curves
between 20 and 40 years Experience Credit.
[Emphasis supplied. ]
In the use of the final Guide Curves an in-
dividual's actual raise is worked out between
Supervisor, Department Head and Salary Su-
This refers to outgoing Chairman Eastman who testified
A Yes I made a statement that there were three major points The
first point was that we wanted to continue salary negotiations
0 Mr Eastman, who made these points'
A I did
We wanted to continue salary negotiations which were broken off
for want of data The guide curves had been requested, and although a e
didn't have them, me ianted to try and reach an interim agreement
is irhout then,
Second of all, I emphasized quite strongly the A I S continued op-
postition to the Company's continued use of the competitive adder
without the agreement of the Association
And, thirdly, I requested that the Company representatives present
to us at the next meeting a full, complete, open presentation explaining
what the competitive adder was-how it was derived, where it came
from, and any other pertinent information about the method of salary
administration in use [Emphasis supplied I
° Those employees represented by the Association
1° Apparently 1968 is intended
512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
pervisor, but the department Head decides ac-
tual placement in relation to the Guide Curves.
The minimum raise is still about 5%. The fol-
lowing definition of the Competitive Adder
was given to us by Mr Geggis: (Then follows
same as set forth, supra.)
This explanation of salary administration
provides us with an operational definition of
the Guide Curves, but we still do not have the
Guide Curves themselves.
As set forth, Geggis furnished the information
orally on April 10 concerning the adder and also by
the written memorandum of April 17. At the April
10 meeting, Geggis informed the persons present
with respect to a 4-1/2 percent adder to be inserted
into the curves on July 1. The evidence reflects
some difference as to exactly how this was posed.
According to Leonard's final testimony, Geggis said
on April 10 as set forth, supra, that they presumed
the adder would be on the order of 4.5 percent.
"This is what they anticipated " The bulletin of
April 30 states as set forth: "The adder which
Management projects for next year starting July 1,
1967 [sic] [should be 1968] was announced as
4.5%." Geggis testified as follows
Now, in the course of telling the Association
about that-well,-No, did you tell the As-
sociation during that meeting before or after
you read that statement what the Company
planned to do with respect to the competitive
adder in '68?
A. Yes. I said that we would be putting 4
and a half percent as competitive adder in the
construction of the guide curves for '67-'68.
The above indicates the Company's stated posi-
tion. How firm this may have been is a question.
Leonard admitted that Geggis did not say he
would not negotiate concerning the curves. Geggis
testified credibly he was prepared to do so. The As-
sociation did not ask to negotiate on April 10 con-
cerning the adder, propose a different amount, or
object to it. The statements above attributed to
Geggis on April 10 do not reflect an inflexible posi-
tion as to the adder. Geggis did not refuse further
discussion and such was not requested by the As-
sociation.
The Association has claimed difficulty in bargain-
ing about the adder without the guide curves.
Respondent claims the Association can determine
the effect of the adder from the salary lists it
receives without the guide curves . In this connec-
tion , Association witness Magoon admitted the As-
sociation can determine the movement of salaries
from year to year by reference to salary lists which
it receives . I would also note in this connection that
if the adder were a general increase, this should
evidently enable the Association to bargain with
respect to it. If the adder is not a general increase,
but simply a factor in the guide curves, while the
wage data might enable the Association to reach
conclusions without the curves, this would appear
both more difficult and less precise. But if the latter
is true as to the nature of the adder then it would
appear that the complaint would fail in its allega-
tions of violation by Respondent's announcing or
granting unilateral salary increases insofar as it is
predicated on the introduction of the adder.
3. The MSDC proposal
Following this , a meeting was held on June 6 at
which the Association submitted a salary proposal
setting forth minimum salary distribution curves
(called MSDC's) which the Association categorized
as a general increase proposal, but Respondent dis-
agreed. Association witness Leonard testified that
the MSDC's were not substituting for or instead of
the guide curves.
This June 6 proposal stated in part:
Prior to July 1, 1966, negotiations between
the A.I.S. and the management of Shell
Development Company led to mutually ac-
ceptable minimum salary increases for the
professional staff at Emeryville Research
Center. These salary increases were based on
factors affecting the economic status of every-
one in Group B equally; they were general in-
creases put into effect at a mutually agreed
time. Criteria for exclusions from these
minimum increases were negotiated and
agreed to by the A.I.S. membership.
After July 1, 1966, management unilaterally
changed this working relationship by introduc-
ing the "competitive adder". It was claimed
that this salary administration policy conforms
to the practices of "significant competition"
and that it was adopted in order to avoid the
"ahead-behind" salary situation.
The A.I.S. protested this unilaterally adopted
change in salary administration on the grounds
that it introduces economic factors which af-
fect all Group B members equally, into the
domain of individual salary increases and
leaves no assurance that a Group B member's
salary keeps up with the rising cost of living
and increasing productivity. The implementa-
tion of the policy since July 1, 1966, has led to
a salary lag, especially large for persons with
high experience credit. It appears that the at-
tempt to get away from the "ahead-behind"
situation for the group has led to an "only-be-
hind" situation on an individual basis.
The A.I.S. is willing to recognize a salary ad-
ministration system which grants salary in-
creases on an individual basis if the general
economic factors which are part of such in-
creases are subject to negotiation and provided
that individual salaries of members of Group B
are not allowed to fall below salary levels
established by criteria set forth in this
proposal. The right of the A.I.S. to request a
general increase for all members of Group B is
also maintained . [Emphasis supplied in preced-
ing line only.]
EMERYVILLE RESEARCH CENTER
The proposal then states drastic changes are
needed to correct inequities which it then discusses
and subsequently makes a salary proposal.
It says guide curves are not yet available. Also
they are recomputed yearly and bear no direct rela-
tionship to the curves used during the previous
year. The proposal then asserts:
(I) This feature makes it impossible for
members of Group B to determine what
changes in salary levels are planned for any year
even though the percent "competitive adder"
is ,announced. In fact, this system with the
"competitive adder" applied to the curves ap-
pears designed to mislead the members of
Group B into believing the "addition" is to last
year's salary levels. It seems rather meaningless
to announce the percent "competitive adder"
when it is added to, and computed on, an un-
defined, secret base. [Emphasis supplied.]
The letter of proposal then claims the guide
curves do not conform to "professional-wide data"
particularly those with high experience credit; that
plans to bolster the system are inadequate; that
management's definition of "significant competi-
tion" is too narrow; that the present system cannot
be adequately policed by the AIS; that management
should depart from its present system of granting
increases only when they amount to 5 percent or
more, that the Association does not have access to
information necessary to understand salary ad-
ministration of employees in the Service Division."
It then proposed:
The A.I.S. proposes that salaries of Group B
be administered according to the following
three guidelines:
(1) The merit guide curves used by manage-
ment for salary administration will be such
that they result in salary distributions which
equal or exceed a set of Minimum Salary
Distribution Curves (MSDC). By June 30,
1969, all salaries will equal or exceed the
MSDC given in Figure 1 of the Appendix to
this proposal.
(It should be emphasized that the MSDC
represent percentile distribution of salaries as a
function of experience credit, are not directly
related to merit, and are not intended to be the
same as the Merit Guide Curves used by
Management.)
(2) Adjustments to the salaries of all Group B
members will be made on or before June 30,
1968, to conform to the MSDC given in
Figure 2 of the Appendix.
(3) All Group B members of the Service Divi-
sion will receive a general salary increase of
10% on or before June 30, 1968.
APPENDIX
The following procedure was used to deter-
mine the percentile minimum salary distribu-
tion curves given in Figures 1 and 2.
513
(a) Percentile salary distribution curves
were constructed for 1965 by using percentile
data points from the "all-industry" Tables of
the 1965 National Survey of Professional Scien-
tific Salaries. The resulting curves were cor-
rected for Ph.D. content of the appropriate
segment of Group B. Slight adjustments on the
raw salary distribution curves were made to
eliminate any negative slopes. The year 1965
was selected as a reference point because this
was the last year in which a negotiated and
agreed upon salary increase was put into ef-
fect.
(b) The MSDC's for 1968 and 1969
(Figures 1 and 2) were then derived from
those of 1965 by addition of percentages
reflecting rises in cost of living, increases in
productivity, and Bay Area cost of living dif-
ferentials.
The MSDC curves 1 and 2 referred to above are
attached hereto as Appendixes C(1) and C(2).
The MSDC's accordingly are not a substitute for
'the guide curves. They would also be inoperative to
the extent the salaries management pays on its own
are in excess of the MSDC's minimum levels. They
would be operative only to the extent raises the
Respondent pays on its own with reference to its
own curves during the salary year are less than the
minimums set by the MSDC's. To such extent the
MSDC's are intended to require Respondent at the
end of the year to give additional raises to meet
them. Raises included would not be in the same
percentage amount and under the proposal would
give more effect to experience credit.
The Association considered that the curves were
minimum salary distribution curves with a certain
percentage in the top group (10) other percentages
of persons in groups below and a certain percent-
age (10) in the bottom group. They were not in-
tended to alter Respondent's existing policy of giv-
ing raises to group B members at varying times
throughout the year. They were intended to result
in an upward movement of Shell's salary guide
curves. Association witness Eastman, executive
committee member from March 1967 to September
1968, testified under these curves "not everybody
but a large percentage should have received a raise
in June." The MSDC's were to be complementary
to but not a substitute for the guide curves.
Eastman testified that in 1968 raises would vary
from 0 to 25 percent on up and in 1969 from 7
to 20 or 30 percent under the MSDC's.
The parties again met on June 18 to discuss the
MSDC proposal. Respondent objected to the
proposal on ground it was not a general salary in-
crease as the term had been used at Shell under the
contract-Association witness Eastman testified he
had never heard of such a general increase at Shell
Geggis and Douma both testified as set forth that a
"general increase was to practically all employees
" About 30 employees not covered herein
514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
at the same time and in the same amount." The
MSDC's, after being presented on June 6, were
discussed on June 18 and 25 (and in July). At the
end of the meeting on June 25, the Association,
through Leonard, asked Geggis whether the
Respondent intended to put into the curves the 4-
1/2 percent adder on July 1. There is some dispute
as to whether Geggis said he would announce it the
next meeting or whether he said "yes."" In any
event, on June 28, the question was again brought
up at the beginning of the meeting . Geggis said that
they were putting a 4.5 percent adder into the
curves on July 1, the next workday. The adder was
accordingly inserted on July 1. Thereafter, in July,
there occurred further discussion of the MSDC
proposal of the Association. Finally, on July 30, the
Respondent rejected this proposal.
The issues obviously posed by the foregoing are:
First, whether or not the adder is in the nature of a
general increase and if not whether the contract
covers it. In order to evaluate this, I will first con-
sider (a) what it actually does or does not do and
(b) what certain data may or may not esta,blish
with respect to the granting of wage increases at the
Respondent in the past. Second is the question
whether the Respondent either bargained or was
expected to bargain or could have been expected to
bargain with the Association concerning the adder
during the period involved-that is whether any
real request was made by the Association to so bar-
gain concerning the adder. Third, whether or not
there is any inconsistency between going ahead
with-the introduction of the adder on July 1 before
completing discussions as the the MSDC's.
D. Additional Facts, Findings, and Conclusions
First, with respect to the matters involved, is a
contention of Respondent that Section 10(b) of the
Act requires the dismissal of the complaint herein.
Inasmuch as this would be dispositive, if applicable,
and a necessary prerequisite to a valid charge and
complaint, I am first considering the same although
the ultimate conclusion I am reaching herein will
not be affected thereby. Respondent evidently con-
tends that the unilateral insertion of the adder into
the curves in 1966, if it were an unfair labor prac-
tice, should have been challenged within 6 months
thereafter. The difficulty with Respondent's posi-
tion is that the charge herein filed August 27, 1968,
involved the adder inserted on July 1, 1968, not
1966, and the contract pursuant to which this adder
was inserted was a renewed contract effective
November 16, 1967, to November 16, 1968. This
charge, filed August 27, 1968, accordingly involves
an act of July 1, 1968 (less than 2 months before),
which is to be construed under the current contract
which was not even extant in 1966. Necessarily in-
volved is interpretation and application of this con-
18 Leonard and Wald, Association witnesses, said Geggis said he would
announce it subsequently Geggis testified he said "yes "
tract effective in November 1967 to this act of July
1968 The legality of insertion of this adder would
accordingly appear to be based on the time it was
put into effect (July 1, 1968) under the contract
then in effect. The legal or illegal act here in
question is not legality of the contract but of an act
on July 1, 1968, under all the circumstance. I ac-
cordingly find Section 10(b) inapplicable.
Another one of Respondent's contentions is that
the adder is in essence a permanent part of the
wage structure, that is a condition of employment
and therefore something that could be unilaterally
effected. In my judgment, this is intertwined and re-
lated to the question concerning the interpretation
and application of the contract, that is, what the
Respondent may or may not do thereunder pur-
suant to its right to give individual merit increases
vis-a-vis what it must bargain about with respect to
general increases. Accordingly I will consider this
in conjunction with and as part of the discussion
concerning the matter of whether or not the adder
amounts to a general increase, and whether or not
it is part of the merit system.
1. The adder as a general increase
A principal question to resolve herein is what
does the term "general increase" as used in this
contract mean? The term "general increase" as
used generally has some significance but I consider
what the term means as used in the instant contract
particularly pertinent.
There is no question that as applied under the
contract the parties have generally used the term
"general increase" to connote an increase to all or
almost all of the employees in a particular amount
at the same time. Respondent witness Douma, who
had been involved in salary administration since
1949, testified:19
Now, based on that experience, can you tell
us what meaning the term "general increase"
has at Shell?
A. At Shell it's meant that the great majori-
ty of the individuals get the same increase
either in absolute terms or percentagewise at
the same time.
Q. And by "great majority," you mean in
percentage terms like what?
A. 98, 99 percent.
Respondent witness John Dorin, who worked in
personnel and industrial relations from 1951 to
1962, testified:
Now, the general increases which were given
from '51 to '62 from time to time, were they
given to substantially everyone in the group?
A. To my knowledge, they were given to
everyone in the group.
0. At the same time?
A. At the same time.
18 Since 1962, Douma has been manager of the Service Engineering De-
partment
EMERYVILLE RESEARCH CENTER
Q And in the same percentage amount?
A. In the same amount.
According to Douma, in the 1965-1966 negotia-
tions the Association took the position that "gen-
eral" means "all and not some" and referred to
a dictionary to support its position. Association wit-
ness Magoon also testified that in 1965-66 the As-
sociation had taken the position that a "general"
with any exclusion was not a "general" at all.
Magoon, on cross-examination, testified that since
he commenced work for Shell in 1956 or 1957, ex-
cept for 1965-66, in a general increase everyone
got the same amount or same percentage In
1965-66, most received 4-1/2 percent retroactive
to October 1965. According to Magoon, a number
received 2 percent in April 1966. The percent
receiving general raises was 98.8 with a total of five
persons excluded because of declining merit
ratings. Whether or not these five are ones who
received 2 percent in April 1966 is not clear.
General Counsel's Exhibit 16 indicates this general
raise was 4.45 percent of the payroll. It follows that
all but a few must have received the 4-1/2 percent
general increase. Association witness Wald testified
the last general increase was in 1965.20 Association
witness Leonard testified that the Association's
June 10, 1968, bulletin defines a "general" to in-
corporate these three elements. The June 10 bul-
letin reads:
Prior to July 1, 1966, negotiations between
the A I.S. and the management of Shell
Development Company led to mutually ac-
ceptable minimum salary increases for the
professional staff at Emeryville Research
Center. These salary increases were based on
factors affecting the economic status of every-
one in Group B equally; they were general in-
creases put into effect at a mutually agreed on
time . Criteria for exclusions from these
minimum increases were negotiated and agreed
to by the A.I.S. membership.
I also note no denials of the foregoing from any
of the Association witnesses although there was
testimony by Douma for Respondent and Magoon,
Association witness, that on a few occasions the As-
sociation and the Company agreed to exclude ap-
proximately 5 people out of the unit of about 400
from a general increase. Five were apparently so
treated in 1964 and also in 1965.21 Such exclusion
from general increases apparently were predicated
on declining merit ratings.
The practice relative to granting merit increases
has been previously set forth. It should be noted
that these were based upon the guide curves which
were made up annually by the Respondent from the
data set forth. These curves were adjusted in the
respects enumerated, including increasing them to
20 Evidently referring to the increase agreed on in 1966, retroactive to
October 1965 Testimony of Association witness Magoon is to similar ef-
fect
2' G C Exh 16 indicates no exclusions in 1960, 11 in 1962, 5 in 1964,
515
take into account anticipatory factors in the upper
half between 1957 and 1961 as well as the other
adjustments for the PHD factor, changes in starting
rates, experience, etc. In so doing, the Respondent
took into account competitive wages paid by those
firms considered to be comparable to it. This neces-
sarily involved taking into account economic fac-
tors which are inevitably involved in a competitive
process. A principal difference between what these
factors and those the competitive adder involve is
one of time, for instance, the curves prior to the
adder would incorporate competitive or other
aspects as of a given time. In the circumstances
when the curves were increased above the median
from 1957 to 1961 to take into account anticipatory
changes, these would involve contemplated
changes, but to reach a decision as to these,
economic elements would necessarily have to be
considered. In the case of the adder, what it ap-
pears to do is take into account economic aspects
in the form of trends in gross national product, in-
flationary trends, wage settlements in major indus-
tries, and overall demand for technical/professional
talent. The adder looks in futuro with respect to the
movement of salaries of Respondent's competitors.
There is no question that this takes into account
items that would ordinarily be taken into account in
effecting what is generally considered as a general
increase. The same though, to a lesser degree, is
true of items that were previously considered by the
Respondent in adjusting the guide curves upwards
on the basis of an analysis of its competition in the
preceding period. Unless Respondent were to
remain consistently behind its competition during
the entire time, it would necessarily in effecting the
guide curves have to be taking into account like
factors in a perhaps more general way. The com-
petitive adder was evidently included to take into
account in futuro the same elements. Admittedly,
this adder in the curves could eliminate the need
for a general increase or a substantial part of the
need for a general increase insofar as the em-
ployees generally might be affected thereby.
According to Magoon, Frank Douma said con-
cerning the adder in May 1966 that one of its ef-
fects was that anyone retaining a merit rating under
the adder system would receive a raise22 within a 2-
year 'period. Magoon additionally testified that
Douma also said that "if the system worked as
hoped for, the A.I.S. would have no need for a
general increase." According to Leonard, in the
1968 meetings concerning the adder, Geggis stated
that, through the competitive adder, 80 to 90 per-
cent of the group B members would receive raises.
These statements appear to be undenied, and in any
event I credit Magoon and Leonard with respect
thereto.
and 5 in 1965 No "general" increase was given in 1961 or 1963
PY As reflected both in testimony and Resp Exh 15, "merit " increases
have averaged over 5 percent ( at least since July 1964)
516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The latter makes it appear that there was an ef-
fort to use the curves to avoid a general increase on
the part of the Respondent. No doubt this may have
been one of Respondent's reasons therefor.
Respondent's competitors or those whom Respon-
dent considered to be its competitors were not
granting general increases but maintaining a wage
policy which had not been granting such increases.
It may be that Respondent was seeking to effect
such a wage policy and avoid the need for a general
increase by implementing through the adder its pol-
icy with respect to merit increases. However, the
fact remains that Respondent in pursuing this pol-
icy was acting in a manner similar to its previous
conduct with respect to merit increases but making
one change therein-the adder. Admittedly, this
was a substantial change but one that appears to
substantially conform with prior conduct in
establishing merit limits. Any merit system has to
have certain limits. Ordinarily, these are bargained
for by establishing minimums and maximums within
a rate range which usually moves up when general
increases are given.
In this case, throughout the course of bargaining
between the parties, the merit rate range system
had been delegated to the Respondent, with the As-
sociation from time to time negotiating for a
general increase What the adder appears to do is
to increase the limits of the curves and raise them
higher than they would have been otherwise But
this does not necessarily mean that "general in-
creases" would be given to the employees as the
term "general increase" has been understood either
under the contract or in general usage. Each em-
ployee still has to be given a merit rating that places
him within a particular band or "rate" range and
then a specific increase given to him whether there
is or is not an adder. What the adder does is tend to
raise the curves and therefore the probability of
employees receiving larger increases. It does not
follow that the employees would all get larger in-
creases or any increase or the same amount of in-
creases based upon the addition of the competitive
adder. The likelihood appears to be that more in-
creases will result and that the increases will be
greater. This consequence would normally follow
from the higher curves and the fact that average
"merit" increases since July 1964 have exceeded 5
percent and since 1966 increased upward to 8 per-
cent. However, this does not mean more to all,
doesn't lead to the same amount, and doesn't result
in increases at the same time. Neither does it follow
that what has in fact occurred since 1964 and 1966
necessarily will occur
So the question is, where does the competitive
adder fit in the wage structure? Without a history of
bargaining and without the contract, a cogent argu-
ment can be made that, although the adder might
not be a part of the usual merit system and
although not the exact equivalent of a general in-
crease, it would be an element in a wage system
that should require bargaining. Before evaluating
the question of whether under the contract, even
though the adder may not be a general increase, it
might be separate from the merit system as contem-
plated therein, certain matters and data should be
considered.
First, it should be noted that the inclusion of the
adder in the curves does not preclude or prohibit a
request for a general increase . It is clear that the
Association so understood and did seek a general
increase after the inclusion of the adder. In the au-
tumn of 1966 it requested an increase of 7 percent
which was considered by Respondent and rejected
in January 1967. In 1968, it requested a "general
increase " for service engineering people. It also in-
troduced evidence herein which, according to As-
sociation witness Wald, established that salary
levels should be adjusted upward from the point
they were at the end of the last general increase in
1965 by 23 percent to bring them to the proper
point in 1968.23
The Association contended in a statement which
it read on July 17, 1968, that the adder is a general
increase and asserted therein:
It has been and is the opinion of the A I S.,
that the "Competitive Adder" is a general-type
increase and thus is negotiable persuant [sic]
to our contract. We base our policy on the fact
that the economic factors used in setting the
CA, namely increases in cost of living and
productivity, are the same ones generally
recognized as subject to negotiation for general
salary increases. As you know, the proposal
submitted by the A I S. to Shell management
recognized these factors and used them to
establish the MSDC. [Emphasis supplied]
According to the testimony of Geggis and the state-
ment of April 17, 1968 (supra), given to the As-
sociation concerning the adder, the elements of
cost-of-living and productivity do not "set" the
competitive adder. Douma testified.
TRIAL EXAMINER: All right. You refer there
to wage settlements in the major-study of
such indicators- it isn 't necessarily exclusive-
such factors as: "wage settlements, trends in
gross national product, overall demand for
technical/professional talent and inflationary
trends." And then you add. "but it is not
limited to these."
Now, are those essentially the factors9
THE WITNESS. Yes, these are the things we
look at The words were carefully chosen,
because we didn't want to give the impression
that we have some kind of formula that we
weight the wage settlement on the change in
the GNP or we weight this.
13 After the adder was incorporated into the salary system , the Associa-
tion executed two agreements , both giving it the right to negotiate for
general increases
EMERYVILLE RESEARCH CENTER 517
It's a matter of looking at these things and
looking at the demand for professional talent
and saying that in our view, because of these
things, saying that if we build about four and a
half percent into the curves our people will be
paid competitively in the coming year.
The following year you may look at exactly
the same factors-and it's just a conclusion-
it's just a feel for things that tells you five and a
half might be the right guess. [Emphasis sup-
plied.]
The sole criteria which Respondent assertedly
uses in determining whether a general increase is
appropriate is whether there is a pattern among its
competitors of paying general increases to profes-
sional employees. Douma stated on direct examina-
tion that in the 1966-67 negotiations concerning a
general increase the Association presented to the
Respondent some "cost of living and productivity
figures." He then testified:
Q. And did you make a statement to the As-
sociation with respect to your views as to the
relevance of those items?
A. We had gone through this type of thing
before, and I think I just repeated what they
had heard me say before; that is, what we
looked to was competitive parties and not to
productivity and cost of living as a basis of sa-
lary changes.
Douma was subsequently asked on direct ex-
amination.
Q. Now, the question is: Did the Association
reply to the Company's contention that it had
never given generals on the basis of cost of liv-
ing and productivity before?
A. They acknowledged this to be true.
Association witness Magoon confirmed that on
numerous occasions ^ Douma or Respondent
representatives stated "The significant competition
does not warrant our giving an increase" or similar
statements. [Emphasis supplied.] Association wit-
ness Dorin testified that the general increases that
were given by Respondent to the professionals from
time to time coincided in time, with general in-
creases "granted by oil companies in the industry."
Dorin also testified-
Q. And did Shell Emeryville ever pay a
general increase in a period of time in which
the oil companies in your survey did not?
A. Not to my recollection.
The question remains as to what was the key to
granting of merit increases before and after the ad-
dition of the adder. The Association issued a bul-
letin containing certain data, attached hereto as
Appendix D reflecting information that it had been
furnished with respect to increases granted before
and for 2 years after the inclusion of the ,adder.
These reflect increases based upon the average
number of employees employed throughout the
year. In addition, the Trial Examiner requested data
with respect to increases granted to those em-
ployees who had worked throughout the entire
year. The Respondent has objected to this data as
not representing a proper basis but furnished such
information which is set forth in Appendix E.
Respondent's contention in essence is that it would
be more accurate to use the average number of em-
ployees to determine the granting or nongranting of
general increases which it contends are given to
those who are there at a given time. However, the
Trial Examiner in order to evaluate and compare
the preadder period with the postadder period, be-
lieved it would be more effective and accurate to
consider employees who worked throughout a
given year and who might be expected to receive
one or the other type of increase to ascertain what
the effect of the adder might be. Obviously the
latter would incorporate those regularly employed
and reflect the extent to which those so employed
received an increase during a given year.24
These data as set forth in Appendix D covering
average number of employees reflect that there
were more increases under the "merit" system (ex-
cluding general raises) following the adder than be-
fore. The number ranged from 1960 at 62.3 per-
cent to a low of 41.8 percent in 1963 and to 56.6
percent in 1965, the year before the adder. In
1966-67, the percentage was 67.4 percent and in
1967-68, 72.8 percent. The number of "merit" in-
creases was obviously higher after the adder than
before and in the absence of any "general in-
crease." The data respecting "merit" increase
raises covering those persons who worked
throughout the year in Appendix E went back to
1958 and showed highs of 73.59 in 1958 and 66.9
percent in 1960; lows of 46.1 in 1963; 64.0 percent
in 1965; 66.4 percent in 1966, and after the adder,
74.9 percent in 1966-67, and 83.0 percent in
1967-68.25
Testimony also indicated that following the
adder, in the course of 2 years, only a few people
would not receive an increase. Even these figures,
whether taking the average number of employees
throughout the year or the total number who
worked throughout the year, reflect that there was
still a substantial number who did not receive a
yearly increase after the inclusion of the competi-
tive adder.
This number, depending on which figures are
used, was from about 25 to 32 percent during 1967
and from 17 to 29 percent in 1968. The number of
those who were not receiving any increase ac-
cordingly still remains substantial after the adder.
Also, I have noted the change in eligibility require-
ment for a merit increase from a year to 3 months
after the adder. Respondent also presented
2" I note that eligibility for a merit raise after the adder was reduced from after the change
12 months to 3 months which could affect comparability data before and 25 These figures in 1966-67 and 1967-68 start with the end of June
427-835 0 - 74 - 34
518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
testimony of Douma that other factors besides the
adder could be the cause of the increased percent-
age of people receiving merit raises thereafter.26
I also note a question still would remain as to the
amounts given in the years and when given. Appen-
dix F provides some of this data although not
necessarily all that might be pertinent. As previ-
ously stated, the Association contended that it had
not received a sufficient increase and was seeking a
further general increase.
Another question regarding the adder is: was the
institution of the adder an insertion of something
different from either a general increase or an ele-
ment related to the merit system? I note first that
the complaint appears to view the adder as per se
effecting salary increases. Second, both the General
Counsel and the Association have contended that
the adder is tantamount to a general increase. The
Charging Party, as previously set forth, also con-
tends the adder is something "basically new in the
Company's salary administration plan and
something not contemplated by the contract." The
General Counsel also asserts the effect of the adder
on the guide curves "demonstrates that the adder is
a subject on which the AIS has a right to bargain."
The Respondent asserts that the adder is simply an
additional element in the construction of the guide
curves as part of the merit system under the con-
tract. For reasons set forth both supra and post, I do
not consider that the adder is something which ab-
hors the contract. Rather I am finding that it is
covered by the contract in the light of the meaning
given to the contract by long-established practice
thereunder.
The complaint, as set forth, alleges that Respon-
dent announced a unilateral increase in salaries and
put these into effect on July 1, 1968. It is clear that
the institution of the adder resulted in no salary in-
crease at the time it was inserted. While the adder
could result in a number of increases and in more
substantial amounts and probably did so in nu-
merous instances than would have occurred
without the adder, it does not follow that the adder
therefore is equivalent to a general increase that
must be bargained about under the contract or to
any salary increase per se.
Appendix F also reflects monthly changes: in
number of persons and percentage of persons in-
creased; dollar amounts, including dollar range of
increases; and range of individual percentage in-
creases including low, average, and high. An ex-
amination of these do not show general increases.
They reflect the number monthly in varying
amounts and percentages. There is reflected a
higher individual percentage increase range follow-
ing the adder but the significance of this is not
evident since the number involved in the higher
range is not enumerated. More significant is that
the average range increased after the adder as
shown in Appendix F, apparently by about 2 per-
cent. Even so the allegations of the complaint con-
sidered as set forth have not been established. The
General Counsel cited C & C Plywood, 384 U.S.
903,27 in support of his contention that unilateral
announcement and insertion of the adder in the
guide curves was a violation. However, this case ap-
pears to be inapplicable on the basis of the facts
which did not reflect a contractual history, such as
here, involving the development, use, and applica-
tion of the guide curves by Respondent, herein, in
effecting its merit system and granting merit in-
creases. It is true the contract here (as there)
referred to individual merit increases. But here the
merit increases remained individual under a system
of practice developed and acquiesced in under the
same provisions of contracts for 18 years from
1948 to 1966, which provisions continued to be
renewed thereafter, following the adder, to date.28
In addition, the question involved therein was a
specific one as to bargaining about a change that
eliminated a rate range and provided for the same
rate for all employees in certain crews.
At the most, the argument that could be made
about the adder is that it may hinder, impair, or
materially affect the Association's ability to bargain
about a general increase, but the adder does not
prevent the Association from so doing. Neither
does it per se effect an increase. On this basis alone
Y6 Douma testified
A variety of factors go into the percentage of people getting raises,
two depend on how much the competitive salaries move that we get
the basis data from It would depend on the age of the group There are
dust too many factors to just be able to say this and this alone was the
cause of this
He was then asked
Q (By Mr Hellbron ) Is it the case that the fact that the competitive
adder was in the curves and raised them somwhat was one of the fac-
tors which contributed to the percentages being a little higher than the
last column in those last two years than they were in the years im-
mediately before'
A Oh, yes
But-on the other hand, the fact that we mentioned earlier-the
decompression ( as corrected by Appendix A) factor-may have been
a far higher factor in this than the competitive adder or the movement
of the competitive salaries themselves- the base data
TRIAL EXAMINER All right Where would the decompression (as cor-
rected) factor-or how would that have been a bigger factor'
THE WITNESS Well, since this went into the curves of people with 20
years' experience and beyond, it may have brought a number of them
into a position where they could get a merit increase than anything
else
I dust say "may have " I'd have to sit down and look at the number of
people in various places
See, you get into the number of people who change their rating, and
because it's a tight system, if you have 10 percent of the people at the
top and, let's assume that we promote a lot of those people out, then
this would in effect serve as a vacuum and pull up a lot of other people
from Group 2 to Group I And this in itself will cause the people to
move from 2 to I, to get increases
All I am saying is there are a number of things that go into this
makeup, and to just say this and this alone caused a change-you dust
couldn't say it
27 Cf N L R B v Honolulu Star Bulletin , Inc , 372 F 2d 691 (C A 9)
28 Since this type of issue involves contract provisions, history, in-
terpretation , construction, and application , resolution of cases may differ
from case to case with varying results based on factual differences See
N L R B v Honolulu Star Bulletin, supra , fn 27, distinguishing C & C
Plywood, supra
EMERYVILLE RESEARCH CENTER 519
it would appear that the complaint should be
dismissed. As for the question of impairment of or
impingement on the Association's ability to bargain
for a general increase, this has been inherent in the
merit system established and acquiesced in under
contracts since 1948 with this Respondent. The
guide curves, ratings, and increases thereunder
necessarily have had an effect on bargaining for a
general increase. It may well be true that the addi-
tion of the adder has enhanced such effect. But as I
previously noted the parties could have bargained
in two successive periods prior to entering into new
contracts in 1967 and 1968 to change this effect if
such were desired, but they continued to operate
under the same contractual provisions set forth in
article Xii, sections 1 and 2.
Although I question whether the adder per se
became a "condition of employment" as contended
by the Respondent in the face of Association's ef-
fort to arbitrate such in 1966 and the filing of an
unfair labor practice case thereafter in 1967, 1 con-
clude, as found, that the adder is a rational exten-
sion of the established merit guide curve system29
which had been established under the contract and
which the Association did not seek to renegotiate
on two successive occasions when it could have so
done following the introduction of the adder.30 I am
therefore finding that the term "general increase"
as used in the contract does not encompass the
competitive adder to the guide curves and ac-
cordingly that the competitive adder in the curves
does not amount to a general increase or any in-
crease per se.
2. Did Respondent unilaterally effect the adder of
July 1, 1968, without first fulfilling whatever
obligation it may have had to bargain?
In addition to the foregoing, Respondent argues
that it did discuss and was willing to discuss the
competitive adder and to bargain about it but that
the Association did not choose to do so in 1968.
This involves a consideration of several matters:
First, whether Respondent was willing to discuss
and bargain about the adder and whether the As-
sociation sought to bargain about it; second,
whether or not the Association proposal concerning
MSDC's involved negotiations for a "general in-
crease" as the term was used in the contract; and
third, whether or not the Respondent was obligated
to complete discussions as to the MSDC's before it
was warranted in putting into effect the competitive
adder on July 1, 1968.
As previously set forth, the adder was first
brought up during 1968 by the Association
requesting an explanation of it. On February 2,
1968, the Association requested a meeting "to
further explore and discuss the system of salary and
administration that was begun on July 1, 1966 and
is currently in use by the Company." [Emphasis
supplied.] On February 29, a meeting as previously
set forth was held. The Association asked Respon-
dent for a presentation of its Salary Administration.
At the February 29 meeting, John Eastman, out-
going chairman of the Association Executive Com-
mittee, according to Association witness Leonard,
outlined the "history of the objection to the uni-
lateral introduction of the competitive adder and
stated that the Executive Committee believed that
this was a violation of the National Labor Relations
Act and asked the Company to open new full
discussion at this point or in the near future of the
competitive adder, as well as the salary system, per
se, and inform what was to be the new executive
committee members of the salary administration
and the factors involved in deriving the competitive
adder."
Eastman testified:
We wanted to continue salary negotiations
which were broken off for want of data. The
guide curves had been requested, and although
we didn't have them, we wanted to try and
reach an interim agreement without them.
Second of all, I emphasized quite strongly
the A.I.S.'s continued oppostiton to the Com-
pany's continued use of the competitive adder
without the agreement of the Association.
And, thirdly, I requested that the Company
representatives present to us at the next meet-
ing a full, complete, open presentation explain-
ing what the competitive adder was-how it
was derived, where it came from, and any
other pertinent information about the method
of salary administration in use.31
On cross-examination, Eastman testified:
Q. (By Mr. Heilbron ) The salary negotia-
tions which on February 29th you told Mr.
Geggis you wanted to continue, what were
those salary negotiations for?
A. For increased salary.
0. They were for a general salary increase,
were they not?.
A. Yes.
Geggis testified concerning Eastman's position at
this meeting:
"As previously set forth , until the adder the Association never
questioned the operation of that system Art XII, sec 2 provides that "no
general increase under I B above shall be put into effect until approved by
the Association " Evidently at no time prior to the adder did the Associa-
tion consider that the guide curve system amounted to a general increase
although admittedly the curves were higher every year
'0 From this finding it follows that I find the adder is not outside the
scope of the contract but is covered thereby
Si Leonard corroborated Eastman's testimony and added as to the infor-
mation concerning the salary administration "This was to be done in
preparation for a salary proposal that the Executive Committee intended to
submit to management " This latter would indicate that the Association's
request for information concerning the adder was not for purpose of bar-
gaining as to it but for use in connection with its own proposal
520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
He did review the attitude of the Association
in the course of that February 29 meeting,
which was an attitude, as he explained it, of
opposition to the competitive adder. But there
was no reference to violation of the Act or
anything like that.
On April 10, as stated, the Respondent informed
the Association concerning the nature of the merit
system and the adder, including the matters and
elements considered in connection therewith. Also,
by the document dated April 17 set forth, supra,
Respondent furnished these in writing to the As-
sociation.
Following that, there were meetings concerning
MSDC's on June 6, 18, and 25. At the very end of
the June 25 meeting, inquiry was made of Geggis
whether the Respondent was going to put in the
adder and Geggis, as set forth, replied "yes" at the
very end of the meeting. The question was repeated
at the June 28 meeting. Geggis amplified his answer
that Respondent was going to put in the adder on
July 1, which was the next workday. From the time
on April 10, when the Respondent announced the
"anticipated" or "projected" adder on July 1, there
was no other effort to discuss or consider the adder
by the Association and no stated objection thereto
until June 28, 1968. In the past-1967 and 1966-
the Association had not requested to bargain as to
the adder although it had objected thereto.
The question is what obligation to bargain could
the Respondent have concerning a matter which
the Association did not directly seek to bargain
about? The Association's position appears in part to
be that this would have been a futile act first
because the prior acts and conduct of Respondent
manifested such and second because it did not have
the guide curves which were the subject of the
preceding case. As to the first contention, prior
conduct of Respondent might shed light on current
conduct and attitudes but it could not per se in-
definitely excuse all need for affirmative action by
the Association. Further, when the Association
sought information concerning salary administra-
tion and the adder in February, it was furnished on
April 10. As to the second contention respecting
the nonfurnishing of the guide curves, the Associa-
tion contends it could not bargain concerning the
adder, and any action with regard to the adder on
the part of the Respondent must necessarily be in
violation of the Act. There is a certain logical force
to this contention except it seems to say that until
and unless the guide curves are furnished to As-
sociation, any action that the Respondent takes
with regard to salary items either pursuant to the
contract or abhorrent to the contract is a violation
unless the Association specifically agrees thereto. It
appears to me that certainly within the framework
of the contract, the Association, by continuing to
enter into contracts, may be said to be agreeing to
whatever such contract may entail.32 The conten-
tion of the Association with regard to a continuing
violation through the adder because of the non-
furnishing of the guide curves accordingly appears
to go too far.33 Both because of this and the fact
that I consider the contract governing, I find that it
was incumbent upon the Association to pursue bar-
gaining concerning the adder in 1968 or at least
have indicated much earlier than June 28 that it
was objecting to the introduction of the specific
adder on July 1, so that it would have been possible
to have discussions and negotiations concerning the
adder prior to June 28. The assertion as of June 28,
the day before it was due to go into effect, that the
Association objected to it, in my judgment comes
too late under the circumstances. I am aware, as set
forth, that the Association on February 29 in-
dicated its continuing objection to the adder. It
requested more data concerning the adder34 and
then dropped the subject after April 10 until June
25 or 28.
Another question involved is whether or not
there is an inconsistency between the MSDC's and
the adder and whether or not the MSDC's involved
a general increase which might in some way con-
flict with the possible effects of the adder. The
answer to this appears to be that although the As-
sociation contended the MSDC's involved a general
increase, the fact is that MSDC's would not have
resulted in a raise for everyone in 1968, but most
people in the unit would have received an increase.
However, the range of resulting increases would
vary greatly. They would range from 0 to 25 per-
cent in 1968 (and in 1969 from 7 percent to 30
percent). Eastman, as set forth, admitted that he
had never heard of a "general" increase such as
this at Shell. Second, since I here concluded that
the adder was not a general increase, even if the
MSDC's were, there would be no direct conflict.
Similarly, even if the adder were a general increase,
if the MSDC's are not there would appear to be no
direct conflict. Whether or not there would be an
indirect conflict would depend on the action of the
parties and the overall circumstances-for instance
the extent of the adder and what other determina-
tions Respondent might make thereafter. In this
respect, the Association itself indicated that it did
not consider the MSDC's were in conflict with the
guide curves. It asserted:
(It should be emphasized that the MSDC
represent percentile distribution of salaries as
a function of experience credit, are not directly
related to merit, and are not intended to be the
same as the Merit Guide Curves used by
management.)
Leonard testified they were not intended as a sub-
stitute for the guide curves with or without the
" This does not imply any waiver of the Association's right to the data
and information ordered by the Board in the prior case
' It also appears inconsistent for the Association to take this postition
herein , after asserting in February that it was seeking to negotiate even
without the guide curves
11 See testimony of Eastman, supra
EMERYVILLE RESEARCH CENTER 521
adder in them. Eastman described them as a com-
plement but independent. Eastman testified further:
So we can just pin down a little bit more-
the proposal was not meant as a subsitutue for
management's salary guide curves?
A. This proposal was meant as a comple-
ment to the guide curves, not a substitute.
Q. Right.
And the idea was that management would
have its set of curves on the one hand-
A. Yes.
Q. -into which it would put such factors as
it felt like putting?
A. Yes.
Q. And during the salary year it would pay
salaries with reference to those curves?
A. Yes.
Q. And then to the extent that the raises
that it had made in doing its thing did not meet
the minimums that the MSDC sets, why then
management would have to pay more money
to the people to meet the MSDC's?
A. Yes.
It is evident that MSDC's and the guide curves
are independent of each other. The MSDC's con-
template Respondent will construct its own curves
and put into them the elements and increments it
considers appropriate and pay salaries with
reference to them during the year. The MSDC's are
to be operative only to the extent the raises
Respondent gives during the year do not meet the
minimums set by the MSDC's. In the latter case,
the MSDC's would require the Company to pay ad-
ditional raises to meet them, apparently at the end
of the year.
It would therefore appear that by presenting the
MSDC's the Association was either ignoring or
otherwise not pursuing a discussion or negotiation
as to the adder. This could well be on the basis that
if the curves including the adder were unsatisfacto-
ry the MSDC's would take care of any claimed in-
adequacies in both individual and overall wages.
The foregoing being the case, the Respondent
could not be expected or required to complete
negotiations with respect to MSDC's before putting
into effect the adder. This is also supported by the
fact that although the Respondent took the position
that it did not have to negotiate as to the MSDC's
at all, it did so voluntarily. Had the MSDC's in-
volved a "general increase" which I have found
they did not, Respondent would have had to
negotiate concerning them. Since I have concluded
that the MSDC's are not a "general" increase, as
the term is used under the contract, it follows that
Respondent did not have to negotiate concerning
them. Since their negotiation was on a voluntary
basis and it would not have been incumbent on
Respondent to negotiate, there would appear to be
no violation in inserting the adder without waiting
to complete negotiations concerning the MSDC's
even if there was conflict between the adder and
the MSDC's.
Admittedly, the situation herein is not a simple
unencumbered one. The issues accordingly do not
lend themselves to simple clearly delineated catego-
ries or easy resolution. The problems arise because
of the contractual provisions coupled with contrac-
tual history and the wage system or structure
developed thereunder. Based on all the foregoing, I
have concluded that, under the contract, including
history, practice, and circumstances herein, the
competitive adder does not amount to a general in-
crease. Neither does its introduction per se "put
into effect ... salary increases," as alleged in the
complaint. For that reason alone the complaint
should be dismissed.
Second, whether or not it may be said that the
adder impairs or impinges bargaining for a general
increase, there was no request for a specific general
increase made herein. Further, whatever the adder
may be, the Association did not pursue either
discussions or negotiations as to it after April 10,
1968, but instead submitted a proposal, the
MSDC's, which it admitted were independent of
the guide curves with or without the adder.
Although the Association had objected to an adder
in 1966, 1967, and at the February 29 meeting, it
had not pursued to finality its opposition thereto
either in 196635 or in 1967.36 Herein on February
29, the Association first stated its continuing op-
position, then asked to learn more about the adder.
On April 10, it was explained and stated that an
adder of 4.5 percent was "projected"37 for July 1,
and on April 17 a written explanation issued. Then
the MSDC's were proposed by the Association and
discussed June 6, 18, and 25. On June 25, at the
end of the meeting, Respondent was asked whether
the adder was going in on July 1. Then again on
June 28 the same question was asked and Respon-
dent replied "yes," and on July 1 the adder became
effective.
Under these circumstances, it would appear that
Respondent met any obligations it may have had
with respect to bargaining as to the adder with the
Association, unless the fact that it did not furnish
the guide curves necessarily leads to a failure to
bargain herein. I have previously concluded it does
not and noted that Respondent had evinced
willingness to discuss and consider the adder.38
Accordingly, I find and conclude that Respon-
dent did not fail and refuse to bargain concerning
the adder nor introduce it unilaterally on July 1,
1968, in derogation of any right the Association
may have had to negotiate concerning it. The fact
that Respondent acted July 1 after the Union ob-
jected June 28-the last preceding workday-does
^ When it tried to take the matter to arbitration and went as far as a
judgment against at by a U S district fudge
'e When it filed a charge and withdrew it
31 See discussion, supra, re how this was presented
w Geggis testified that Respondent was and is prepared to negotiate as to
the adder
522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not preclude such finding and conclusion. The
Union had ample notice from April 10 concerning
the "projected " adder to negotiate as to it but did
not seek to do so . Respondent does not have to
wait indefinitely to act nor to invite negotiations,
but the Union should manifest in some manner
within a reasonable time its disapproval of the
proposed change and /or its desire to discuss and
negotiate with respect thereto.39
Neither does a last -minute objection preclude ac-
tion , particularly where no request to negotiate was
then made.40
Leonard testified specifically that he did not ask
to negotiate as to the adder when Geggis , at the end
of the June 25 meeting , replied "yes" to a question
of whether Respondent intended to put the adder in
the curves on July 1 . Leonard did not object to the
July 1 introduction of the adder on June 25 but did
on June 28.41
Leonard also testified in response to a question
of whether Respondent on June 28 said anything
about the Association proposals that " they stated
that they wanted to continue to discuss them-that
the introduction of a competitive adder should not
prevent further discussion of our proposal , and they
wanted to continue ." Leonard also testified at two
meetings he suggested use of a federal mediator.
Leonard was then asked:
Q. (By Miss Girard ) At either of these two
meetings where the subject of mediation came
up, was there any comment or discussion about
whether the competitive adder would be
delayed for this purpose?
A. On our part we wanted to delay the in-
stitution of the competitive adder and bring in
a mediator.
Q. Did you tell the Company that?
A. Yes.
Q. What did the Company say in response?
A. Well, the first time this came up was on
June 28th.
Q. What was said by Shell in response to
your remarks?
A. As I recall-the response was: we will
take that under advisement.
Q. Did they reply to your remark about not
putting the competitive adder into effect?
A. No.
Q. When was-
A. Well, yes. I am sorry , they did reply.
They stated they had a timetable to keep, if I
recall correctly. [Emphasis supplied.]
Geggis specifically testified that the Association
on June 28 did not ask td negotiate with respect to
the adder.
There may or may not be conflict between
Leonard and Geggis in this respect. Under all the
circumstances herein, Leonard's request to bring in
a mediator might or might not involve negotiation
of the adder, the MSDC's or both. Precisely what
was to be mediated or what the mediator was to do
was not specified. I am aware that, according to
Leonard, request was made to delay the adder and
bring in a mediator and that the Respondent, ac-
cording to Leonard, "stated they had a timetable to
keep, if I recall correctly." This does indicate a
desire to delay the adder and could reasonably
mean discussions or negotiations were desired as to
the adder. On the other hand, since neither had
been sought between April 10 and June 28, there
could be a question as to the purpose. Concededly
the Association wanted to delay the introduction of
the adder.
However, assuming that the Association intended
the mediator to effect negotiations concerning the
adder, this was apparently not communicated to
Geggis. Certainly there was no specific or explicit
request to negotiate. Hence, Geggis' answer that
there was no request to negotiate is literally true
and may well have been completely so.
In any event, whatever construction is taken of
this discussion on June 28, 1968, I do not consider
that the result herein would be affected thereby.
I am, for all the reasons set forth above, finding
and concluding that Respondent did not violate the
Act as alleged and shall recommend that the com-
plaint be dismissed.
CONCLUSIONS OF LAW
Upon the basis of the foregoing findings of fact
and upon the entire record in this proceeding, I
make the following conclusions of law:
1. Respondent is an employer engaged in com-
merce within the meaning of the Act.
2. The Association is a labor organization within
the meaning of the Act.
3. Respondent has not engaged in unfair labor
practices within the meaning of Section 8(a)(1)
and (5) of the Act, as alleged.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact,
conclusions of law, and upon the entire record in
this case, it is hereby recommended that the com-
plaint be dismissed in its entirety.
19 See Humble Oil and Refining Co, 161 NLRB 714 (1966), Shell Oil
Company, 149 NLRB 305 (1964), see also Murphy Diesel Company, 179
NLRB 149, fn 1 (1969) and in TXD And see also Montgomery Ward Co,
137 NLRB 418, and White Consolidated Industries , Inc, 154 NLRB 1593
(1965)
40 See Shell Oil Company, supra
" Leonard testified, as referred to supra, Eastman had objected to the
adder's unilateral introduction on February 29 and Leonard, as
spokesman, on June 28 objected to its being unilaterally introduced July 1,
1965
EMERYVILLE RESEARCH CENTER 523
YRS. EX P. CREDIT.
2300
2200
2100
2000
1900
1800
1700
1600
1500
1400
0
1300
1200
t
1100
00
1000
900
807
700
0 S 10 Is 20 25 s0 75 40
Years Experience Credit
Figure 1.
MINIMUM SALARY DISTRIBUTION CURVES
FOR JULY 1, 1968 to JUNE 30, 1969
9/2$/69
2200
2100
2000
1900
1800
1700
1600
1500
1400
x
i 1300
0
S
1200
1100
01000
900
800
700
APPENDIX C(2)
PERCENTILES
5 10 is 20 25 30 ss 40
Years Experience Credit
Figure 2.
MINIMUM SALARY DISTRIBUTION CURVES
FOR JULY 1, 1967 to JUNE 30, 1968
523a DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX D
Historical : Pre "Competitive Adder"
Merit Raises General Raises
% Total % Total
Year % Rec'g Payroll % Rec' Payroll
1960 62.3 3 . 11 100 5.00
1961 46.2 2.33
a
1962 55.3 2.83 97.2(11) 4.86
1963 41.8 2.27
1964 43.2 2.35 98 .8(5) 1.98
1965 56.6 3.40 98.8(5) 4.45
6-year 2.72
average: 2.72
APPENDIX E
SUMMARY OF MERIT INCREASES
TO EMPLOYEES REPRESENTED BY
ASSOCIATION OF INDUSTRIAL SCIENTISTS
1 958-68
1 2
No Fm Col.
No. on 1 Rec ' g Col. 2
Payroll Increases as % of
Period Thru Period this Period Col. 1
1958 249 3 07 73.5%
1959 427 266 62.3%
1960 419 280 66.9%
1961 371 191 51.5%
1962 365 220 60.3%
1963 360 166 46.1%
1964 369 185 50.2%
1965 386 247 64.0%
1966 381 253 66.4%
1966-67 389 2 91 74.9%
1967 -68 384 319 83.0%
2.72
Raises , Overall 6-year average: 5.43%
With "Competitive Adder"
% Rec'g Exclusions % Payroll
7/1/66
7/1/67 67 .4 94 5.00%
6/3 0/ 67
6/30/68 72. 8 64 6.09%
a) number of exclusions in
parentheses
EMERYVILLE RESEARCH CENTER 523b
APPENDIX F
SUMMARY OF MERIT SALARY INCREASES GRANTED TO EMPLOYEES
REPRESENTED BY THE ASSOCIATION OF INDUSTRIAL SCIENTISTS
JULY 1, 1964 - JUNE 30, 1968
No. 9 $ Increases Individual %
No. Group Increased Increased Low Avg. Hi Low AvR. High
7/64 415 26 6.3 25 51 80 4.4 5.4 8.9
8/64 411 9 2.2 35 62 110 4.7 6.0 8.6
9/64 421 25 5.9 25 54 100 4.7 5.7 8.9
10/64 417 22 5.3 25 55 100 4.4 5.6 8.0
11/64 421 17 4.0 25 61 110 4.5 6.2 9.2
12/64 424 13 3.1 35 57 75 3.7 5.4 7.5
1/65 428 13 3.0 30 49 90 4.2 5.4 8.7
2/65 430 14 3.3 30 53 as 4.3 5.7 8.3
3/65 431 21 4.9 30 74 100 4.2 7.4 10.4
4/65 431 25 5.8 40 69 110 4.6 6.5 9.0
5/65 434 13 3.0 35 64 125 4.0 5.4 6.9
6/65 429 23 5.3 30 69 110 4.2 6.6 10.6
7/65 430 54 12.5 30 69 100 4.1 6.2 11.6
8/65 434 17 3.9 30 56 80 4.3 6.1 10.6
9/65 432 23 5.3 25 70 125 4.1 6.9 12.7
10/65 435 24 5.5 25 60 100 4. 2 6.1 8.9
11/65 437 13 3.0 40 64 120 4.7 6.5 11.2
12/65 436 12 2.8 40 64 100 4.7 5.2 8.8
1/66 436 19 4.4 40 63 125 4.1 6.1 9.7
2/66 437 11 2.5 35 60 125 4.5 5.9 11.1
3/66 440 22 5.0 30 59 100 4.0 6.1 9.3
4/66 443 11 - 2.5 35 56 80 4.9 5.3 7.0
5/66 449 9 2.0 45 63 75 4. 1 5.6 8.1
6/66 453 41 9.1 35 76 125 4.0 6.5 14.1
7/66 453 36 7.9 40 78 162 4.6 7.5 16.1
8/66 448 22 4.9 34 73 162 4.2 7.0 14.2
9/66 437 26 5.9 46 115 157 4.6 7.4 13.3
10/66 429 20 4.7 37 72 103 4.8 7.2 11.9
11/66 431 18 4.2 42 71 128 4.8 6.6 13.7
12/66 431 22 5.1 57 71 100 4.9 6.1 9.5
1/67 431 32 7.4 45 92 160 3.9 8.3 17.0
2/67 434 15 3.5 53 81 133 5.4 7.8 13.8
3/67 433 30 6.9 40 82 ,198: 4.3 8.1 16.1
4/67 434 26 6.0 38 82 157 4.5 7.4 13.2
5/67 432 19 4.4 56 97 186 4.6 7.9 14.5
6/67 428 37 8.6 63 106 169 6.2 8.8 14.0
7/67 433 42 9.7 61 91 138 4.7 7.8 15.6
8/67 434 32 7.4 55 89 171 4.7 8.1 14.4
9/67 441 29 6.6 51 90 150 4.6 7.6 14.8
10/67 442 19 4.3 60 90 140 5.5 7.6 10.6
11/67 434 22 5.1 71 101 140 5. 8 8.6 10.8
12/67 437 27 6.2 56 100 150 5.1 8.2 12.8
1/68 437 33 7.6 52 101 160 5.2 8.4 14.5
2/68 431 21 4.9 60 105 150 6.2 9.8 14.3
3/68 438 26 5.9 70 102 150 5.0 8.9 13.6
4/68 437 39 8.9 50 97 150 4.9 8.4 11.4
5/68 432 16 3.7 60 105 175 6.0 8.5 12.1
6/68 432 30 6.9 65 109 175 5.3 8.7 13.5
* Number in group for month is count as of last day of preceding month.