Ex-Cell-O Corp.

National Labor Relations Board - Board Decisions

Aug 25, 1970

185 N.L.R.B. 107 (N.L.R.B. 1970)

EX-CELL-O CORPORATION 107
Ex-Cell-O Corporation and International Union,
United Automobile , Aerospace and Agricultural
Implement Workers of America , UAW. Case
25-CA-2377
August 25, 1970
DECISION AND ORDER
On March 2, 1967, Trial Examiner Owsley Vose
issued his Decision in the above-entitled proceeding,
finding that Respondent Ex-Cell-O Corporation had
engaged in and was engaging in certain unfair labor
practices within the meaning of the National Labor
Relations Act, as amended, and recommending that
it cease and desist therefrom and take certain affirma-
tive action, including an order directing the Respond-
ent to make whole its employees for any losses suffered
on account of its unlawful refusal to bargain with
the UAW (the Charging Party), as set forth in the
attached Trial Examiner's Decision. Thereafter, the
Respondent filed exceptions to the Trial Examiner's
Decision and a supporting brief, together with a
request for oral argument. As the compensatory reme-
dy adopted by the Trial Examiner in this case poses
several novel issues of importance, the National Labor
Relations Board granted oral argument and consoli-
dated this matter for purposes of said argument with
three other cases involving the same or related issues
(Zinke's Foods, Inc., 30-CA-372; Herman Wilson
Lumber Company, 26-CA-2536; Rasco Olympia, Inc.
d/b/a Rasco 5-10-25 cents, 19-CA-3187).
The Board granted a number of motions for permis-
sion to file briefs amicus curiae and also invited
certain other interested parties to file them and to
participate in the oral argument which was held on
July 12 and 13, 1967. The parties who submitted
amicus briefs and participated as such in the argument
were: The Chamber of Commerce of the United States,
the National Association of Retail Merchants, The
American Federation of Labor and Congress of Indus-
trial Organizations, and The International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America. Amicus briefs were also submitted
by the National Association of Manufacturers, Preston
Products Company, Inc., and The NAACP Legal
Defense and Educational Fund, Inc.
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 here-
by affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions, cross-exceptions,
the briefs of the parties and those submitted amicus
curiae, the oral arguments made before the Board,
and the record in the proceeding, and adopts the
findings, conclusions, and recommendations of the
Trial Examiner, as modified herein. i
This case began with the UAW's request for recogni-
tion on August 3, 1964. Ex-Cell-O refused the Union's
request on August 10, 1964, and the Union immediate-
ly filed a petition for Certification of Representative.
After a hearing the Regional Director ordered an
election, which was held on October 22, 1964, and
a majority of the employees voted for the Union.
The Company, however, filed objections to the con-
duct of the election, alleging that the Union made
certain misrepresentations which assertedly interfered
therewith, but the Acting Regional Director, in a
Supplemental Decision of December 29, 1964, over-
ruled them. The Company then requested review
of that decision, which the Board granted, and a
hearing was held on May 18 and 19, 1965. The
Hearing Officer issued his Report on Objections on
July 15, 1965, and recommended that the objections
be overruled. The Company filed exceptions thereto,
but on October 28, 1965, the Board adopted the
Hearing Officer's findings and recommendations and
affirmed the Regional Director's certification of the
Union.
The day after the Board's certification was issued,
the Company advised the Union that it would refuse
to bargain in order to secure a court review of the
Board's action2 and later reiterated this position after
receiving the Union's request for a bargaining meeting.
The Union thereupon filed the 8(a)(1) and(s) charge
in this case and the complaint was issued on November
23, 1965. The Respondent's answer admitted the factu-
al allegations of the complaint but denied the violation
on the ground that the Board's certification was inval-
id. The hearing herein, originally scheduled for Febru-
ary 15, 1966, commenced on June 1, 1966;' it was
adjourned until June 29, 1966, to permit the Union
to offer evidence supporting its request for a compensa-
tory remedy for the alleged refusal to bargain; the
hearing was postponed again until July 28, 1966.1
i The Respondent's motion, filed on August 19, 1970, seeking dismissal
of the complaint herein is denied NLR B v Gissel Packing Co, 395
U S 575, 610, NL.R B v Katz, 369 US 736, 748, fn 16, Franks
Bros Co v N L R B. 321 U S 702 See also N L R B v Rutter-Rex
Manufacturing Company, In( 396 U S 258
' The Company's letter stated that
We have received the Labor Board's decision concerning our objec-
tions to the conduct of the union election held October 22, 1964
As you know, the only way the Labor Board 's decision in this
case can be reviewed is through a technical refusal to bargain,
and consequently we are unable to meet with you and bargain
until the review procedure is carried out
This delay was caused by Respondent's unsuccessful attempt to
subpena the Regional Director's files in the representation case
' This postponement grew out of the Company's objections to the
authenticity of certain collective-bargaining contracts offered by the Union
to substantiate its request for a compensatory remedy The Company
(cont d)
185 NLRB No. 20
108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Company also petitioned the United States Dis-
trict Court for an injunction against the Regional
Director and the Trial Examiner to restrain the latter
from closing the hearing until the Regional Director
had produced the investigative records in the represen-
tation case. The court issued a summary judgment
denying the injunction on December 13, 1966, and
on December 21, 1966, the Trial Examiner formally
closed his hearing. On March 2, 1967, the Trial
Examiner issued his Decision, finding that the Compa-
ny had unlawfully refused to bargain in violation
of Section 8(a)(5) and (1) of the Act and recommended
the standard bargaining order as a remedy. In addition
the Trial Examiner ordered the Company to compen-
sate its employees for monetary losses incurred as
a result of its unlawful conduct.
It is not disputed that Respondent refused to bargain
with the Union, and we hereby affirm the Trial
Examiner's conclusion that Respondent thereby violat-
ed Section 8(a)(1) and (5) of the Act. The compensato-
ry remedy which he recommends, however, raises
important issues concerning the Board's powers and
duties to fashion appropriate remedies in its efforts
to effectuate the policies of the National Labor Rela-
tions Act.
It is argued that such a remedy exceeds the Board's
general statutory powers. In addition, it is contended
that it cannot be granted because the amount of
employee loss, if any, is so speculative that an order
to make employees whole would amount to the imposi-
tion of a penalty. And the position is advanced that
the adoption of this remedy would amount to the
writing of a contract for the parties, which is prohibit-
ed by Section 8(d).5
We have given most serious consideration to the
Trial Examiner's recommended financial reparations
Order, and are in complete agreement with his finding
that current remedies of the Board designed to cure
violations of Section 8(a)(5) are inadequate. A mere
affirmative order that an employer bargain upon
request does not eradicate the effects of an unlawful
delay of 2 or more years in the fulfillment of a
statutory bargaining obligation. It does not put the
employees in the position of bargaining strength they
would have enjoyed if their employer had immediately
recognized and bargained with their chosen represent-
ative. It does not dissolve the inevitable employee
frustration or protect the Union from the loss of
later withdrew its objection It also refused to comply with a subpoena
duces tecum requesting production of certain records relating to wage
increases and fringe benefits
' 49 Stat 454 (1935), as amended, 29 U S C §158(d) (1958) "but
such obligation [to bargain collectively] does not compel either party
to agree to a proposal or require the making of a concession
employee support attributable to such delay. The
inadequacy of the remedy is all the more egregious
where, as in the recent N.L.R.B. v. Tiidee Products,
Inc.,' case, the court found that the employer had
raised "frivolous" issues in order to postpone or avoid
its lawful obligation to bargain. We have weighed
these considerations most carefully. For the reasons
stated below, however, we have reluctantly concluded
that we cannot approve Trial Examiner's Recommend-
ed Order that Respondent compensate its employees
for monetary losses incurred as a consequence of
Respondent's determination to refuse to bargain until
it had tested in court the validity of the Board's
certification.
Section 10(c) of the Act directs the Board to order
a person found to have committed an unfair labor
practice to cease and desist and "to take such affirma-
tive action including reinstatement of employees with
or without back pay, as will effectuate the policies
of this Act." This authority, as our colleagues note
with full documentation, is extremely broad and was
so intended by Congress. It is not so broad, however,
as to permit the punishment of a particular respondent
or a class of respondents. Nor is the statutory direction
to the Board so compelling that the Board is without
discretion in exercising the full sweep of its power,
for it would defeat the purposes of the Act if the
Board imposed an otherwise proper remedy that
resulted in irreparable harm to a particular respondent
and hampered rather than promoted meaningful col-
lective bargaining. Moreover, as the Supreme Court
recently emphasized, the Board's grant of power does
not extend to compelling agreement. ( H K. Porter
Co., Inc., v. N.L.R.B., 397 U.S. 99.) It is with respect
to these three limitations upon the Board's power
to remedy a violation of Section 8(a)(5) that we
examine the UAW's requested remedy in this case.
The Trial Examiner concluded that the proposed
remedy was not punitive, that it merely made the
employees partially whole for losses occasioned by
the Respondent's refusal to bargain, and was much
less harsh than a backpay order for discharged employ-
ees, which might require the Respondent to pay wages
to these employees as well as their replacements.
Viewed solely in the context of an assumption of
employee monetary losses resulting directly from the
Respondent's violation of Section 8(a)(5), as finally
determined in court, the Trial Examiner's conclusion
appears reasonable. There are, however, other factors
in this case which provide counterweights to that
rationale. In the first place, there is no contention
that this Respondent acted in a manner flagrantly
in defiance of the statutory policy. On the contrary,
'426F2d1243(CADC)
EX-CELL-O CORPORATION 109
the record indicates that this Respondent responsibly
fulfills its legally established collective -bargaining obli-
gations. It is clear that Respondent merely sought
judicial affirmance of the Board ' s decision that the
election of October 22, 1964, should not be set aside
on the Respondent 's objections . In the past , whenever
an employer has sought court intervention in a repre-
sentation proceeding the Board has argued forcefully
that court intervention would be premature, that the
employer had an unquestioned right under the statute
to seek court review of any Board order before its
bargaining obligation became final . Should this proce-
dural right in 8(a)(5) cases be tempered by a large
monetary liability in the event the employer 's position
in the representation case is ultimately found to be
without merit? Of course , an employer or a union
which engages in conduct later found in violation
of the Act, does so at the peril of ultimate conviction
and responsibility for a make-whole remedy . But the
validity of a particular Board election tried in an
unfair labor practice case is not , in our opinion,
an issue on the same plane as the discharge of employ-
ees for union activity or other conduct in flagrant
disregard of employee rights. There are wrongdoers
and wrongdoers . Where the wrong in refusing to
bargain is, at most, a debatable question , though
ultimately found a wrong , the imposition of a large
financial obligation on such a respondent may come
close to a form of punishment for having elected
to pursue a representation question beyond the Board
and to the courts. The desirability of a compensatory
remedy in a case remarkably similar to the instant
case was recently considered by the Court of Appeals
for the District of Columbia in United Steelworkers
[Quality Rubber Manufacturing Company, Inc.] v.
N.L.R.R., 430 F.2d 519. There the court,
distinguishing Tirdee Products' supra, indicated that
the Board was warranted in refusing to grant such a
remedy in an 8(a )(5) case where the employer
"desired only to obtain an authoritative
determination of the validity of the Board's
decision." It is not clear whether the court was of the
opinion that the requested remedy was within the
Board's discretion or whether it would have struck
down such a remedy as punitive in view of the
technical nature of the technical nature of the
respondent's unfair labor practice. In any event, we
find ourselves in disagreement with the Trial
Examiner's view that a compensatory remedy as
applied to the Respondent in the instant case is not
punitive "in any sense of the Word."
unlike cases." The court was of the opinion that
the remedy was proper where the employer had
engaged in a "manifestly unjustifiable refusal to bar-
gain" and where its position was "palpably without
merit."' As in Quality Rubber, the court in Tudee
Products distinguished those cases in which the
employer 's failure to bargain rested on a "debatable
question ." With due respect for the opinion of the
Court of Appeals for the District of Columbia, we
cannot agree that the application of a compensatory
remedy in 8(a)(5) cases can be fashioned on the
subjective determination that the position of one
respondent is "debatable" while that of another is
"frivolous." What is debatable to the Board may
appear frivolous to a court , and vice versa .' Thus,
the debatability of the employer 's position in an 8(a)(5)
case would itself become a matter of intense litigation.
We do not believe that the critical question of
the employer's motivation in delaying bargaining
should depend so largely on the expertise of counsel,
the accident of circumstances , and the exigencies of
the moment.
In our opinion , however , the crucial question to
be determined in this case relates to the policies
which the requested order would effectuate. The statu-
tory policy as embodied in Section 8(a)(5) and (d)
of the Act was considered at some length by the
Supreme Court in H. K Porter Co., Inc. v. N.L.R.B.,
supra. There the Court held that the Board had
power to require employers and employees "to negoti-
ate" but that the Board was without power to compel
a company or a union "to agree to any substantive
contractual provision of a collective bargaining agree-
ment ." The purpose of the Act, the Court held,
was to ensure that employers and their employees
"work together to establish mutually satisfactory con-
ditions." The Court noted that Congress was aware
that agreement between employers and unions might
not always be reached, that agreement might in some
cases be impossible , or thwarted by strikes and lock-
outs . But it was never intended , the Court held,
that the Government in such cases step in and become
a party to the negotiations. Recognizing that the
Board's remedial powers might be insufficient to cope
with important labor problems , the Supreme Court
nevertheless struck down an order requiring the
respondent employer involuntarily to agree to a specif-
ic contractual provision . It was the job of Congress,
In Tiidee Products the court suggested that the
Board need not follow a uniform policy in the applica-
tion of a compensatory remedy in 8(a)(5) cases.
Indeed , the court noted that such uniformity in this
area of the law would be unfair when applied "to
' In these cases , at least , it would seem incumbent on the Board
to utilize to the fullest extent its authority under Sec 10(I) and (e)
of the Act, thereby minimizing the pernicious delay in collective bargaining
and consequent loss of benefits to the employees affected See also
Justice Harlan's concurrence in H K Porter, supra
Cf NL RB v Magnesium Casting Co , 427 F 2d 114 (C A 1,
May 21, 1970)
110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not the Board or the courts, Justice Black wrote,
"to decide when and if it is necessary to allow govern-
mental review of proposals for collective bargaining
agreements and compulsory submission to one side's
demands."
It is argued that the instant case is distinguishable
from H. K. Porter in that here the requested remedy
merely would require an employer to compensate
employees for losses they incurred as a consequence
of their employer's failure to agree to a contract
he would have agreed to if he had bargained in
good faith. In our view, the distinction is more illusory
than real. The remedy in H. K. Porter operates pro-
spectively to bind an employer to a specific contractual
term. The remedy in the instant case operates retroac-
tively to impose financial liability upon an employer
flowing from a presumed contractual agreement. The
Board infers that the latter contract, though it never
existed and does not and need not exist, was denied
existence by the employer because of his refusal to
bargain. In either case the employer has not agreed
to the contractual provision for which he must accept
full responsibility as though he had agreed to it.
Our colleagues contend that a compensatory remedy
is not the "writing of a contract" because it does
not "specify new or continuing terms of employment
and does not prohibit changes in existing terms and
conditions." But there is no basis for such a remedy
unless the Board finds, as a matter of fact, that
a contract would have resulted from bargaining. The
fact that the contract, so to speak, is "written in
the air" does not diminish its financial impact upon
the recalcitrant employer who, willy-nilly, is forced
to accede to terms never mutually established by
the parties. Despite the admonition of the Supreme
Court that Section 8(d) was intended to mean what
it says, i.e., that the obligation to bargain "does
not compel either party to agree to a proposal or
require the making of a concession," one of the
parties under this remedy is forced by the Government
to submit to the other side's demands. It does not
help to argue that the remedy could not be applied
unless there was substantial evidence that the employer
would have yielded to these demands during bargain-
ing negotiations. Who is to say in a specific case
how much an employer is prepared to give and how
much a union is willing to take? Who is to say
that a favorable contract would, in any event, result
from the negotiations? And it is only the employer
of such good will as to whom the Board might
conclude that he, at least, would have given his
employees a fair increase, who can be made subject
to a financial reparations order; should such an
employer be singled out for the imposition of such
an order? To answer these questions the Board would
be required to engage in the most general, if not
entirely speculative, inferences to reach the conclusion
that employees were deprived of specific benefits as
a consequence of their employer's refusal to bargain.
Much as we appreciate the need for more adequate
remedies in 8(a)(5) cases, we believe that, as the
law now stands, the proposed remedy is a matter
for Congress, not the Board. In our opinion, however,
substantial relief may be obtained immediately through
procedural reform, giving the highest possible priority
to 8(a)(5) cases combined with full resort to the
injunctive relief provisions of Section 10(j) and (e)
of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the Respondent, Ex-
Cell-O Corporation, Elwood, Indiana, its officers,
agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Internation-
al Union, United Automobile, Aerospace and Agricul-
tural Implement Workers of America, UAW, as the
exclusive representative of the employees in the
appropriate unit as set forth in the attached Trial
Examiner's Decision.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise
of their rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action which it
is found will effectuate the policies of the Act:
(a) Upon request recognize and bargain collectively
with International Union, United Automobile,
Aerospace and Agricultural Implement Workers of
America, UAW, as the exclusive representative of
the employees in the appropriate unit. The appropriate
unit is:
All production and maintenance employees,
including tool crib store employees, shipping and
receiving and followup employees, but excluding
all office clerical and plant clerical employees,
all professional employees, guards, and supervi-
sors.
(b) Post at its Elwood, Indiana, plant copies of
the attached notice marked "Appendix."' Copies of
said notice, on forms provided by the Regional
' In the event this Order is enforced by a Judgment of the United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board "
EX-CELL-O
Director for Region 25, after being duly signed by
Respondent's authorized representative, shall be post-
ed by the Respondent immediately upon receipt there-
of, and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
(c) Notify the Regional Director for Region 25,
in writing, within 10 days from the date of this
Order, what steps have been taken to comply herewith.
MEMBERS MCCULLOCH AND BROWN, dissenting in
part:
Although concurring in all other respects in the
Decision and Order of the Board, we part company
with our colleagues on the majority in that we would
grant the compensatory remedy recommended by the
Trial Examiner. Unlike our colleagues, we believe
that the Board has the statutory authority to direct
such relief and that it would effectuate the policies
of the Act to do so in this case.
Section 10(c) of the Act directs the Board to remedy
unfair labor practices by ordering the persons commit-
ting them to cease and desist from their unlawful
conduct "and to take such affirmative action including
reinstatement of employees with or without back pay,
as will effectuate the policies of this Act. . . ."i°
The phrase "affirmative action" is nowhere qualified
in the statute, except that such action must "effectuate
the policies of this Act," and indicates the intent
of Congress to vest the Board with remedial powers
coextensive with the underlying policies of the law
which is to be enforced. This provision "did not
pass the Wagner Act Congress without objection to
the uncontrolled breadth of this power."11
But the broad language survived the challenge.
The contention made by the Respondent herein
that legislative history requires a narrow construction
of the Board's remedial powers under Section 10(c)
focuses on the deletion of the word "restitution"
by the Senate and House Committees in reporting
the original bills and their substitution therefor of
the language: "including reinstatement . . . with or
without back pay."12 It is argued that because this
change was made after a Senate Committee print
asserted that "express language such as reinstatement,
backpay etc., necessarily results in narrowing the
1O49 Stat 454 (1935), as amended, 29 U S C §160(c) (1958)
" Local 60, United Brotherhood of Carpenters and Joiners of America,
AFL-CIO [Mechanical Handling Srctemc] v N L R B, 365 U S 651. 657
(concurring opinion)
11 Compare 1 Legislative History of the National Labor Relations
Act, 1935 at 1302 with 2 Legislative History of the National Labor
Relations Act, 1935 at 2292
CORPORATION 111
definition of restitution,"" the subsequent deletion
and substitution evidence congressional intent to
restrict the Board's remedial power. This interpreta-
tion of the legislative history is negated by a closer
look at the status of the Senate Committee print,
and the statement of Senator Wagner, the author
of the legislation, respecting the scope of the Board's
remedial power under the present language of Section
10(c).
The assertion that substitution of the illustrative
language "including reinstatement ... with or without
back pay" would narrow the definition of restitution
was contained in an unsigned staff memorandum
prepared for use by the Senate Committee. Whatever
the status of such a document for purposes of legisla-
tive interpretation, it does not by itself prove congres-
sional intent, especially when it is relied on, as here,
to dispute the plain meaning of the statutory lan-
guage .14 Further, after the Wagner Act had been
reported out of committee with the present language
of Section 10(c), Senator Wagner stated, in floor
debates, that under its provisions "the Board will
be empowered to issue orders forbidding violations
of the law and making restitution to those who have
been injured thereby."1S Clearly, although the legal
phrase had been eliminated from the Act, its sponsor's
intent was not thereby to narrow the concept of
the Board's remedial powers. And, this broad con-
struction of Section 10(c) has long been accepted
by the courts.
The Supreme Court, in its consideration of the
Board's remedial powers, has consistently interpreted
Section 10(c) as allowing the Board wide discretion
in fashioning remedies. Thus, in Phelps Dodge Corp.
v. N.L.R.B.,11 the Court stated that:
" 1 Legislative History of the National Labor Relations Act, 1935
at 1360
" "Restitution" is a term of art used and misused in both common
law and equity to describe particular techniques for judicial enforcement
and maintenance of rights, and is distinguishable conceptually, but not
always realistically , from damages and specific performance Thus, the
term is imprecise both in meaning and application See, for example,
Corbin, Contracts,§§1102-1103, 1107, Williston, Contracts §§1454, 1482-
1483 Indeed, the American Law Institute's Restatement of the Law
of Restitution does not include remedies for torts such as ejectment,
replevin, or trover, even though restitutionary in nature , and most signifi-
cantly that Restatement recites that it "does not present the circumstances
under which an action can be maintained for a failure to perform
an official, customary or statutory duty to pay money " Restatement,
Restitution at 2-3 Dean Roscoe Pound made a comparable distinction
in his treatise on jurisprudence in emphasizing that administrative modes
for the enforcement and maintenance of rights deserve separate treatment
from judicial techniques Pound , Jurisprudence at 351 ( 1959) From this
background it is apparent that inclusion of the term "restitution" in
Sec 10(c) would not have been appropriate to illustrate a broad flexible
administrative remedy, and its deletion is readily understandable as a
matter of draftsmanship
11 2 Legislative History of the National Labor Relations Act, 1935
at2332
1' 313 U S 177, 187-189
112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Attainment of a great national policy through
expert administration in collaboration with limit-
ed judicial review must not be confined within
narrow canons for equitable relief deemed suitable
by chancellors in ordinary private controversies.
The need for such broad remedial authority was
obvious, for, as the Court went on to say:
... Congress could not catalogue all the devices
and stratagems for circumventing the policies
of the Act. Nor could it define the whole gamut
of remedies to effectuate these policies in an
infinite variety of specific situations. Congress
met these difficulties by leaving the adaptation
of means to end to the empiric process of adminis-
tration."
The declared policy of the Act is to promote the
peaceful settlement of disputes by encouraging collec-
tive bargaining and by protecting employee rights."
To accomplish this purpose, Board remedies for viola-
tions of the Act should, on one hand, have the
effect of preventing the party in violation from so
acting in the future, and from enjoying any advantage
he may have gained by his unlawful practices.19 But
they must also presently dissipate the effects of viola-
tions on employee rights20 in order that the employees
so injured receive what they should not have been
denied." A Board order so devised is to be enforced
by the courts "unless it can be shown that the order
is a patent attempt to achieve ends other that those
which can fairly be said to effectuate the policies
of the Act."22
" Id at 194
° 49 Stat 552 (1935), as amended, 29 U S C § 151 (1958)
National Licorice C o v NLR B, 309 U S 350, 364
° See, e g, Franks Bros Company v NLRB , 321 U S 702, 704,
N.L R B v Fansteel Metallurgical Corp, 306 U S 240, 257 ("The purpose
of the Act is to promote the peaceful settlement of disputes by providing
legal remedies for the invasion of employee rights ")
" International Brotherhood of Operative Potters [-1aec Cerani,cc Co
v NL R B, 320 F 2d 757, 761 (C A D C ), enfg in part and remanding
in part 138 NLRB 1178, Leeds & Northrup Co v NLRB, 391 F 2d
874 (C A 3), enfg 162 NLRB 987
°' Fibreboard Paper Products Corp v NLRB, 379 U S 203, 216,
citing with approval Virginia Electric and Power Co. v N.L.R B, 319
U S 533, 540 In Consolo v Federal Maritime Commission, 383 U S
607, the Supreme Court upheld a compensatory award by that Commission,
which , like the Board , is among a number of administrative agencies
that may grant compensatory remedies See 39 Stat 736, as amended,
46 U S C § 821 (1964). which states that the Commission "may direct
payment of full reparation to the complainant for the injury caused
by such violation " There the petitioner had also suffered financial loss
because of the respondent 's statutory violation , and the Court , relying
heavily on cases involving this Board , stated (383 U S 620-621) that
Congress was very deliberate in limiting judicial review of agency determi-
nations because
it frees the reviewing courts of the time-consuming and difficult task
of weighing the evidence, it gives proper respect to the expertise of
the administrative tribunal and it helps promote the uniform application
of the statute These policies are particularly important when a court
is asked to review an agency's fashioning of discretionary relief In
this area agency determinations frequently rest upon a complex and
hard-to-review mix of considerations By giving the agency discretionary
power to fashion remedies, Congress places a premium upon agency
expertise
Deprivation of an employee's statutory rights is
often accompanied by serious financial injury to him.
Where this is so, an order which only guarantees
the exercise of his rights in the future often falls
far short of expunging the effects of the unlawful
conduct involved. Therefore, one of the Board's most
effective and well-established affirmative remedies for
unlawful conduct is an order to make employees
financially whole for losses resulting from violations
of the Act.23 Various types of compensatory orders
have been upheld by the Supreme Court in the belief
that "Making the workers whole for losses suffered
on account of an unfair practice is part of the vindica-
tion of the public policy which the Board enforces."24
The most familiar of these is the backpay order
used to remedy the effect of employee discharges
found to be in violation of Section 8(a)(3) of the
Act.25 While the cease-and-desist and reinstatement
orders remedy the denial of the aggrieved employee's
rights and protect the prospective exercise thereof,
the backpay order repairs the financial losses which
have been suffered, and, in thus making the employee
whole," serves to recreate, as fully as possible, the
conditions and relationships that would have been,
had there been no unfair labor practice.27
As a result of its experience over the years, the
Board has made modifications in its backpay orders
to make them more effective. Thus, in Isis Plumbing
& Heating Co.," the Board ordered that interest at
6 percent be added to the reimbursement of wages
lost by employees as a result of a respondent's wrong,
in order to achieve a more equitable result and to
encourage compliance with Board orders. The U.S.
Court of Appeals for the District of Columbia, in
upholding the Board's power to award such compensa-
tion, noted that even though the Board has waited
for about 25 years to employ the interest mechanism,
it could not close its eyes to the realities of the
employees' position, and that in the evaluation of
the law of remedies "some things are bound to happen
for the `first time. 11129
An earlier example of such modification occurred
in F. W. Woolworth Company," after the Board
became aware that in numerous cases, after a long
Virginia Electric and Power Company v NLR. B,supraat544
" Phelps Dodge Corp v NLRB , In 16, supra at 197
" This remedy has been ordered since the Board reported its first
case in 1935 Pennsylvania Greyhound Lines, Inc, 1 NLRB 1, enfd
303 U S 261
I" Cf Nathanson v NL R B, 344 U S 25, NLR B v Deena Art ware,
Inc, 361 U S 398 (concurring opinion of Mr Justice Frankfurter)
27 Local 60, United Brotherhood of Carpenters v NL R B, supra
(concurring opinion of Mr Justice Harlan), Leeds & Northrup Co v
NL.R B, supra.
E6 138 NLRB 716
International Brotherhood of Operative Potters v NL R B, supra
at 761 See ABC Air Freight Co, Inc. v CAB, 391 F 2d 295 (C A 2),
concerning the need for flexibility
°° 90 NLRB 289
EX-CELL-O CORPORATION 113
period of unemployment following their discriminato-
ry discharges, employees succeeded in obtaining higher
paying jobs. With the type of backpay order then
in effect, some employers secured an advantage by
being dilatory and refraining from offering reinstate-
ment, for greater delay meant a progressive reduction
backpay would waive their right to reinstatement
in order to toll the running of the period and freeze
the amount of backpay owing at the highest possible
amount. In Woolworth, the Board countered this stra-
tagem of delay by ordering that backpay be computed
on a quarterly basis, with the earnings in one particular
quarter having no effect upon the backpay liability
for any other quarter. The Supreme Court upheld
the new method of compensation in N.L.R.B. v. Seven-
Up Bottling Company of Miami, Inc.," and stated
that it is the function of the Board to give coordinated
effect to the policies of the Act. The Court further
indicated that in consideration of the practical inter-
play of the individual remedies of backpay and rein-
statement, "both of which are within the scope of
its authority," the Board may fashion one so that
it complements, rather than conflicts with, the other.32
It is clear from the Act that the Board's compensato-
ry remedies need not be limited to the above situations,
and the courts have always interpreted the phrase
"with or without back pay" as being merely an illustra-
tive example of the general grant of power to award
affirmative relief." The Board, with judicial approval,
has also employed make-whole orders to remedy vari-
ous other types of violations of the Act. In Virginia
Electric and Power Company v. N.L.R.B., supra, for
example, the Supreme Court upheld a Board order
directing the employer to make whole its employees
for dues checked off in favor of a company-dominated
union. The Court's rationale in part was that "Like
a backpay order, it does restore to the employees
in some measure what was taken from them because
of the Company's unfair labor practices," and that
. . both are remedies created by statute-the one
explicitly and the other implicitly in the concept
of effectuation of the policies of the Act ..."34
The Board has already recognized in certain refusal-
to-bargain situations that the usual bargaining order
is not sufficient to expunge the effects of an employer's
unlawful and protracted denial of its employees' right
to bargain. Though the bargaining order serves to
remedy the loss of legal right and protect its exercise
in the future, it does not remedy the financial injury
" 344 U S 344
" Id at 348
" See, e g , Virginia Electric and Power Co v NLRB, supra at
539, Radio Officer's Union v NLR.B, 347 US 17, 54, Phelps Dodge
Corp v NLRB, 313 U S 177,187-189
11 Supra at 543
which may also have been suffered. In a number
of situations the Board has ordered the employer
who unlawfully refused to bargain to compensate
its employees for their resultant financial losses. Thus,
some employers unlawfully refuse to sign after an
agreement. The Board has in these cases ordered
the employer to execute the agreement previously
reached and, according to its terms, to make whole
the employees for the monetary losses suffered because
of the unlawful delay in its effectuation .31
Similarly, in American Fire Apparatus C0_31 the
employer violated Section 8(a)(5) by unilaterally dis-
continuing payment of Christmas bonuses, and the
Board concluded that only by requiring the bonuses
to be paid could the violation be fully remedied.
The Court of Appeals for the Eighth Circuit in enforc-
ing the order commented "Nor do we believe that
the difficulty in computing the precise amount due
each employee is a substantial reason for modifying
the Board's order." In Leeds & Northrup Co. v.
N.L.R.B., supra, which involved a related problem,
the Court of Appeals for the Third Circuit reached
a similar conclusion . There, the employer unilaterally
altered its formula for computing its annual profit-
sharing bonus. The Board found that a violation
of Section 8(a)(5) had occurred and ordered payment
to the employees of the difference between what they
had received and the amount they would have been
paid under the prior method of computation. In
enforcing that order, the court stated:
The Board's backpay award in this case is sup-
portable on the ground that the union might
have successfully resisted all or a portion of
the reduction in its share of profits had it been
afforded an opportunity to bargain, and the
employees should not be left in a worse position
than they might have enjoyed if the union had
been given the opportunity to bargain. While
15 See, e g , Schill Steel Products, Inc, 161 NLRB 939, Huttig Sash
and Door Co, 151 NLRB 470, enfd in part 362 F 2d 217 (C A 4)
Cf NLRB v George E Light Boat Storage, Inc. 373 F 2d 762
(C A 5), where the court of appeals enforced the Board's compensatory
order which compelled the employer to reimburse employees for back
overtime and welfare payments according to the terms of the contract
which was unlawfully repudiated in violation of Sec 8(a)(5) The court
noted that
A simple order to bargain in good faith would not be sufficient
To allow an employer unlawfully to repudiate a collective-bargaining
agreement at the small cost of being required , sometime in the
future, to sit down and bargain with the union would encourage
such violations of the Act For the period from the breach until
a new agreement , if any, is reached pursuant to the Board's bargaining
order, the employer would be at liberty to disregard the terms
of the contract The temptation to violate the Act in a situation
where the employer would have everything to gain and nothing
to lose would be overwhelming
The principle underlying these decisions has been affirmed by the Supreme
Court in NL R B v Joseph T Strong, d/b/a Strong Roofing & Insulating
Co, 393 U S 357
16 160 NLRB 1318, enfd 380 F 2d 1005 (C A 8)
114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
it is true that a retroactive order might afford
the employees a better position than the union's
bargaining might have achieved , the Board can
hardly be said to be effectuating policies beyond
the purposes of the Act by resolving the doubt
against the party who violated the Act. Retroac-
tive enforcement must always contain in it some
element of hardship on the employer , but a failure
to grant back pay imposes at least an equal
hardship on the employees.
And in Fibreboard Paper Products Corp., " the
employer unilaterally contracted out its maintenance
operations in violation of Section 8(a)(5). The Board
concluded that an order to bargain about this decision
could not , by itself, adequately remedy the effects
of the violation . It further ordered the employer to
reinstate the employees and to make them whole
for any loss of earnings suffered on account of the
unlawful conduct . The Supreme Court upheld the
compensatory remedy , and stated that "There has
been no showing that the Board ' s order restoring
the status quo ante to insure meaningful bargaining
is not well designed to promote the policies of the
Act."38
The question now before us is whether a reimburse-
ment order is an appropriate remedy for other types
of unlawful refusals to bargain. On the basis of the
foregoing analysis regarding Section 10(c), we believe
that the Board has the power to order this type
of relief. Further, for the reasons set forth herein,
we are of the view that the compensatory remedy
is appropriate and necessary in this case to effectuate
the policies of the Act.
An employer 's unlawful refusal to bargain complete-
ly frustrates the purposes of the Act, as it directly
contravenes the congressional policy of encouraging
collective bargaining and also denies the statutory
" 138 NLRB 550, enfd 322 F 2d 411 (C A D C), affd 379 U S
203
" 379 U S at 216 See also N L R B v Joseph T Strong, d/b/a Strong
Roofing & Insulating Co , supra at fn 35
" Both the legislative history of the Act and decisions of the Supreme
Court emphasize the central role of the employees ' right to bargain
and the correlative duty of employers to honor it S Rep No 573,
74th Cong I st Sess 12 ( 1935) See , e g, Consolidated Edison Co of
New York, Inc v NL R B, 305 U S 197 , 236 "The Act contemplates
the making of contracts with labor organizations That is the manifest
objective in providing for collective -bargaining ", NLR B v Insurance
Agents ' International Union, AFL-CIO [Prudential Inv Co ] 361 US
477, 483 "it was believed that other rights guaranteed by the Act
would not be meaningful if the employer was not under obligation to
confer with the union in an effort to arrive at the terms of an agreement "
40 A Board decision in a certification proceeding is not a " final order"
made reviewable by Sec 10 (e) and (t) in the courts of appeals See,
e g American Federation of Labor, et al. [Shipowners' Assn of the Pat iftc
Coast] v NLR B, 308 U S 401 , Boire v The Greyhound Corporation,
376 U S 473 The House Report clearly states the policy behind this
restriction
When an employee organization has built up its membership to
a point where it is entitled to be recognized as the representative
right of the employees to bargain collectively through
their chosen representative.39 It is clear from the
Act itself and from its legislative history that immedi-
ate recognition of this right was contemplated; and
partly to achieve this goal Congress, in originally
enacting the Act in 1935, excluded Board orders
in certification proceedings under Section 9(c) from
direct review in the courts.40 This judgment was reaf-
firmed in 1947 when a conference committee rejected
a proposed House amendment which would have
permitted any interested persons to obtain review
immediately after certification because "such provision
would permit dilatory tactics in representation pro-
ceedings."41 Very often, as noted by the Supreme
Court, the procedural delays necessary to make a
fair determination on charges of unfair labor practices
have the effect of postponing indefinitely the perform-
ance of employers' statutory duty to bargain, thus
depriving employees of their legal right to such collec-
tive-bargaining representation.42 The Board has taken
various steps in an effort to relieve the wrongful
effects of such delay. Thus, in Franks Bros. Company,43
for example, the Board issued a bargaining order
even though the union had lost its majority before
the issuance of the complaint alleging the refusal
to bargain, and the Supreme Court upheld this action,
commenting that to order further elections would
be "providing employers a chance to profit from
a stubborn refusal to abide by the law. That the
Board was within its statutory authority in adopting
the remedy which it had adopted to foreclose the
probability of such frustrations of the Act seems
too plain for anything but statement."44
of the employees for collective bargaining, and the employer refuses
to accord such recognition, the union, unless an election can promptly
be held to determine the choice of representatives, runs the risk
of impairment of strength by attrition and delay while the case
is dragging on through the courts, or else is forced to call a strike
to achieve recognition by its own economic power H R Rep No
972, 74th Cong , 19 Sess 5-6
" Statement by Senator Taft, 93 Cong Rec 6444 (1947), as cited
in Boire v The Greyhound Corporation, fn 40, supra at 479
" International Association of Machinists, Tool and Die Mab ere Lodge
No 35 [Serricb Corp ] v NL.R B, 311 U S 72, 82, Frank Bros
Company v NLRB, 321 U S 702, 704, where the Court observed
that
Out of its wide experience, the Board many times has expressed
the view that the unlawful refusal of an employer to bargain collectively
with its employees' chosen representative disrupts the employees' morale,
deters their organizational activities, and discourages their membership
in unions
" 44 NLRB 898, enfd 137 F 2d 989 (C A 1), affd 321 U S 702
11 Supra at 705 See also the Board's policy of computing backpay
on a quarterly basis discussed supra Further, in Bernel Foam Products
Co, Inc, 146 NLRB 1277, the Board held that the filing of a refusal-
to-bargain charge was not foreclosed by the fact that the union lost
a representation election, since an employer's unlawful activities could
very well have caused the loss To do otherwise would lend "the Board
procedures as a tool to thwart the statutory rights of the majority of
the employees involved and subverts the very purpose of the Act "
146 NLRB at 1281
EX-CELL-O CORPORATION 115
The present remedies for unlawful refusals to bar-
gain often fall short, as in the present case, of adequate-
ly protecting the employees' right to bargain. Recent
court decisions, congressional investigations, and
scholarly studies have concluded that, in the present
remedial framework, justice delayed is often justice
denied."
In N.L.R.B. v. Tiidee Products, Inc., the Court
of Appeals for the District of Columbia Circuit recent-
ly stated that:46
While [the Board's usual bargaining] remedy may
provide some bargaining from the date of the
order's enforcement, it operates in a real sense
so as to be counterproductive, and actually to
reward an employer's refusal to bargain during
the critical period following a union's organiza-
tion of his plant. The obligation of collective
bargaining is the core of the Act, and the primary
means fashioned by Congress for securing indus-
trial peace, N. L. R. B. v. American National Insur-
ance Co., 343 U.S. 395, 404 (1952).
. . . Employee interest in a union can wane
quickly as working conditions remain apparently
unaffected by the union or collective bargaining.
When the company is finally ordered to bargain
with the union some years later, the union may
find that it represents only a small fraction of
the employees. See Ross, Analysis of Administra-
tive Process Under Taft-Hartley, 1966 Labor Rela-
tions Yearbook 299, 302-303; Note, An Assess-
ment of the Proposed 'Make- Whole'Remedy in
Refusal-To-Bargain Cases, 67 Mich. L. Rev. 374,
378 (1968). Thus the employer may reap a second
benefit from his original refusal to comply with
" The Cox Advisory Panel's report to the Senate Committee on
Labor and Public Welfare concluded that a major weakness in labor-
management relations law is the long delay between the point at which
a union seeks recognition of its majority status and the day when the
employees' right to bargain through their chosen representative is vindicat-
ed by enforcement of a bargaining order The Panel posed the question
"If an employer refused to bargain collectively on June 3, 1959, how
much good will be done by an order to bargain entered December
1, 1961" It concluded that "A remedy granted more than 2 years
after the event will bear little relation to the human situation which
gave rise to the need for Governmental intervention " Pages 2 and
10 of report pursuant to S Res 66 and S Res 141, 86th Cong,
2d Sess 81 (1960) A similar conclusion is evident from the testimony
given in the hearings before the Special Subcommittee on Labor of
the House Committee on Education and Labor on H R 11725 (1967)
which investigated the adequacy of Board remedies
" Supra
" An independent study of UAW experience in obtaining first bargaining
contracts during a 6-month period was made by Professor Ross, and
its results were appended to the UAW's brief The study indicates that
the UAW succeeded in obtaining contracts in 97 percent of the cases
following a Board-conducted election The contracts resulted in average
percentage wage increases of 7 9 percent and an average increase in
the value of fringe benefits amounting to 3 9 percent
" A study made of 1960 cases in five Board Regional Offices revealed
that unions succeeded in gaining contracts in 84 to 90 percent of the
cases following their winning Board-conducted elections Ross, The Gov-
the law: i-ie may continue to enjoy lower labor
expenses after the order to bargain either because
the union is gone or because it is too weak
to bargain effectively.
A study by Professor Philip Ross shows that a contract
is signed in most situations where the employer honors
its duty to bargain without delay," but that the
chance of a contract being signed is cut in half
if the case must go to court enforcement of a bargain-
ing order.45 In the interim, of course, the employees
are deprived of their rightful union representation
and the opportunity to bargain over their terms and
conditions of employment, while at the same time
their employers may gain a monetary advantage over
their competitors who have complied with their legal
duty.
The present case is but another example of a situa-
tion where a bargaining order by itself is not really
adequate to remedy the effects of an unlawful refusal
to bargain. The Union herein requested recognition
on August 3, 1964, and proved that it represented
a majority of employees 2-1/2 months later in a
Board-conducted election. Nonetheless, since October
1965 the employer, by unlawfully refusing to bargain
with the Union, has deprived its employees of their
legal right to collective bargaining49 through their
certified bargaining representative.50 While a bargain-
ernment as a Source of Union Power 251 (1965) Professor Ross' more
recent study, The Labor Law in Action An Analysis of the Administrative
Process Under the Taft-Hartley Act (1966), considered all 8(a)(5) cases
during a 5-year period Cases concerning first bargaining situations yielded
the following conclusions
By far, the most significant influence on bargaining consequences
was the stage of case disposition The facts speak for themselves
About two-thirds of cases closed before issuance of complaints resulted
in execution of first contracts
With the exception of a handful of cases which required Supreme
Court action prior to closing, the longer the litigation the less likely
was the prospect of the signing of a first contract Only about
half (approximately 57 percent) of all cases closed after a Board
order resulted in such contracts and less than 36 percent of the
cases closed after circuit court enforcement ended up with agreements
The explanation for these results which comes most readily to
mind is the factor of time The long, drawn out process of administra-
tive investigation, hearing and findings and, ultimately adjudication,
bring two, three or four years of delay and a weakening of the,
charging union through the effects of the unexpunged unfair labor
practices upon the employees
Professor Ross' earlier study revealed that on the average nearly 2-
1/2 years elapse between the filing of an unfair labor practice charge
and the issuance of a judicial decree Ross, The Government as a Source
of Union Power, at 171
" Cf NLRB v Southbridge Sheet Metal Works, Inc, 380 172d
851 (C A 1) Such delay frustrates the purposes of the Act and leads
to strikes and other labor unrest
'° We find no merit in the Respondent's contention in the present
case that, at least in a "technical" refusal-to -bargain situation , a compensa-
tory remedy would penalize it for obtaining judicial review of the Board's
representation proceedings in Consolo v Federal Maritime Commission,
supra at 624-625, the Court rejected the same contention Relying on
a case involving the Board (NL R B v Electric Vacuum Cleaner Company,
Inc, 315 U S 685), the Court concluded that "At any rate it has
never been the law that a litigant is absolved from liability for that
(cont'd)
116 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing order at this time, operating prospectively, may
insure the exercise of that right in the future, it
clearly does not repair the injury to the employees
here, caused by the Respondent 's denial of their rights
during the past 5 years.
In these refusal -to-bargain cases there is at least
a legal injury . Potential employee losses incurred by
an employer 's refusal to bargain in violation of the
Act are not limited to financial matters such as
wages. Thus, it is often the case that the most impor-
tant employee gains arrived at through collective bar-
gaining involve such benefits as seniority , improved
physical facilities , a better grievance procedure, or
a right to arbitration . Therefore, even the remedy
we would direct herein is not complete , limited as
it is to only some of the monetary losses which
may be measured or estimated . The employees would
not be made whole for all the losses incurred through
the employer's unfair labor practice . But, where the
legal injury is accompanied by financial loss, the
employees should be compensated for it. The compen-
time during which his litigation is pending " (Id at 624-625) and noted
(at 625) that the time of appeal allowed the respondent to continue
its unlawful conduct thus in turn continue to injure the petitioner That
such a remedy would include the entire amount lost by the wronged
party, instead of being reduced by the amount accruing while the violator
was contesting the issue , no more makes the remedy penal in character
under this Act than it does elsewhere "The litigant must pay for his
experience , like others who have tried and lost " Life & Casualty Ins
Co v McCray, 291 U S 566, 575
There is no question of the right of an employer to test the legal
propriety of a Board certification or to test its legal position respecting
any issue of law or fact upon which a Board bargaining order is predicated
but it should not thereby realize benefits not usually flowing from such
a proceeding In other words, should an employer choose to await court
action , and if its legal position be sustained , it would not only be absolved
of the duty to bargain , but also of any monetary remedy arising out
of the order contemplated herein , if, on the other hand, an employer
be found to have rested its refusal to bargain on an erroneous view
of law or fact, any loss to employees incurred by its continued adherence
to that error should be borne by that employer and not by its employees
That is the risk taken by all litigants
The employer's argument for tolling the compensatory period during
the time he contests the violation is contrary to the policy of the Act
in fostering the prompt commencement of collective bargaining , a policy
shown explicitly in the denial of judicial review of the Board's representa-
tion proceedings To allow the employer to avoid making his employees
whole for the period bargaining was delayed by his litigating a mistaken
view of the law would encourage such delay in the areas in which
Congress particularly deemed speed to be essential
" it is argued that the remedy contemplated should not be computed
from the beginning of the Employer's refusal to bargain since collective-
bargaining contracts are usually not agreed upon immediately upon the
inception of a duty to bargain However , an order that liability shall
cease when the Respondent commences to bargain , not when an agreement
is achieved, negates any such argument for a delayed date of liability
For, the period between commencement of bargaining and agreement
would be provided for at the end of the liability period rather than
at the beginning In addition to providing beginning and ending dates
more precise and less conjectural , a computation on such a basis has
the added advantage of permitting the employer to accept its basic
responsibility to bargain and thereby toll the accrual of reimbursable
losses and leave it free actually to bargain without added pressure to
reach a contract in order thereby to minimize its monetary liability,
thus fostering collective bargaining without compelling agreement
" Cf Fibreboard Paper Products Corp v N L R B, supra at fn 22
satory period would normally run from the date
of the employer 's unlawful refusal to bargain until
it commences to negotiate in good faith , or upon
the failure of the Union to commence negotiations
within 5 days of the receipt of the Respondent's
notice of its desire to bargain with the Union,"
although here a later starting date could be used
because this remedy would be a substantial departure
from past practices . 52 Further , the Board could follow
its usual procedure of providing a general reimburse-
ment order with the amount , if any, to be determined
as part of the compliance procedures'
This type of compensatory remedy is in no way
forbidden by Section 8(d).54 It would be designed
to compensate employees for injuries incurred by
them by virtue of the unfair labor practices and
would not require the employer to accept the measure
of compensation as a term of any contract which
might result from subsequent collective bargaining.
The remedy contemplated in no way "writes a con-
tract" between the employer and the union, for it
would not specify new or continuing terms of employ-
ment and would not prohibit changes in existing
terms and conditions." All of these would be left
to the outcome of bargaining , the commencement
of which would terminate Respondent 's liability.
Furthermore , this compensatory remedy is not a
punitive measure . It would be designed to do no
more than reimburse the employees for the loss occa-
sioned by the deprivation of their right to be represent-
ed by their collective -bargaining agent during the
" As Mr Justice Frankfurter said, concurring in NL R B v Deena
Art ware, Inc, 361 U S 398 , which also involved a compensatory remedy
The Board 's procedure in unfair labor practice cases is first to hold
a hearing to determine whether an unfair labor practice was commit-
ted, and , if it was, whether it would "effectuate the policies of
the Act" for the Board to order reinstatement with backpay of
any employees who were discharged Section 10(c) In such a proceed-
ing, the Board does not concern itself with the amount of backpay
actually owing This is excluded from the proceeding in the interest
of the efficient administration of the Act [The Board 's] primary
function under Section 10, in connection with which it makes specific
monetary orders for specific employees , is to prevent the conduct
defined as unfair labor practices in Section 8 Section 10(c) provides
that once the Board determines that an unfair labor practice occurred,
it may make such remedial orders for reinstatement with backpay
as will "effectuate the policies " of the Act We have held that
the Board is granted broad discretion over the fashioning of remedial
orders by this provision The salient fact which brings the
Board's remedial power into play under Section 10 (c) is its finding
that the employer 's conduct constituted an unfair labor practice
[361 U S at 411-412]
" The provision in Sec 8(d) that neither party is required to agree
to a proposal or make a concession appears to have been designed,
not for the situation before us, but to preclude the Board from evaluating
"the merits of the provisions of the parties " as a factor in determining
whether bargaining was in good faith House Conference Report, Legisla-
tive History, p 538
35 it is in this respect that this situation is distinguishable from the
one that was before the Supreme Court in H K Porter Co, Inc. v
NL R B, 397 U S 99, which involved a dispute over a contract clause
See I U E [Tudee Products Inc ] v N L R B, supra
EX-CELL-O CORPORATION
period of the violation. The amount to be awarded
would be only that which would reasonably reflect
and be measured by the loss caused by the unlawful
denial of the opportunity for collective bargaining.
Thus, employees would be compensated for the injury
suffered as a result of their employer's unlawful refusal
to bargain, and the employer would thereby be prohib-
ited from enjoying the fruits of its forbidden conduct
to the end, as embodied in the Act, that collective
bargaining be encouraged and the rights of injured
employees be protected." It is well settled that a
reimbursement order is not a redress for a private
wrong, since the Act does not create a private cause
of action for damages," but is a remedy created
by statute and designed to aid in the achievement
of the public policy embodied in the Act.56 According-
ly, as the reimbursement order sought herein is meant
to enforce public policy, the Board's exercise of its
discretion in ordering such a remedy would not be
" Local 57, International Ladies' Garment Workers' Union, AFL-CIO
v NLRB, [Garvin Corp ], 374 F 2d 295 (C A D C ), cert denied
387 U S 942, where the court of appeals, in refusing to enforce part
of a Board order on the ground that it constituted a penalty, said
that
The Board is indeed correct when it states that the purpose of
a remedy must be restoration of the status quo to the greatest
extent practicable, however, the basic purpose of restoring the status
quo is to redress the injury done to employees The crucial
element in all these cases is that the interest being protected is
the freedom of choice of the workers in a bargaining unit
[T]he purpose of Board remedies is to rectify the harm done
to the injured workers, not to provide punitive measures against
errant employers [374 F 2d at 300-303]
" See, e g ; H R Rep No 1147 on S 1958 24 (1935), Virginia
Electric and Power Company v NL R B, fn 22, supra at 744, International
Brotherhood of OperativePottersv NL R B, fn 21, supraat 761
" In upholding the Board's Woolworth formula, the Supreme Court
stated that
It is the business of the Board to give coordinated effect to the
policies of the Act We prefer to deal with these realities and
to avoid entering into the bog of logomachy, as we are invited
to, by debate about what is "remedial" and what is "punitive "
It seems more profitable to stick closely to the direction of the
Act by considering what order does, as this does, and what order
does not, bear appropriate relation to the policies of the Act
[N L R B v Seven-Up Bottling Contpam fn 31, supraat 348 ]
"For this reason it is erroneous to characterize this reimbursement
order as penal or as the adjudication of a mass tort it is equally wrong
to fetter the Board's discretion by compelling it to observe conventional
common law of chancery principles in fashioning such an order, or
to force it to inquire into the amount of damages actually sustained
Whether and to what extent such matters should be considered is a
complex problem for the Board to decide The fact that the
Board may only have approximated its efforts to make the employees
whole does not convert this reimbursement into the imposition
of a penalty " Virginia Electric and Power Company v NLRB, fn
22, supra at 543-554, see also Phelps Dodge Corp v N L R 8 , fn 16,
supra at 188 , F W Woolworth Company v NLRB, 121 F 2d 658
(CA 2)
" See , e g , NLRB v Deena Artware Inc, fn 53, supra at 413,
where Mr Justice Frankfurter, concurring, said that
The Board's determinations are not merely administrative analogues
of common law judgments and they do not purport to be As here,
they uniformly contain a specific direction to take "affirmative action "
In enforcing the Board's orders the Courts of Appeals similarly
act not merely to review a common law judgment, but to "effectuate
the policies" of the National Labor Relations Act
117
strictly confined to the same considerations which
govern comparable awards in either equity courts59
or damage awards in legal actions.60 In the first
place, it is well established that, where the defendant's
wrongful act prevents exact determination of the
amount of damage, he cannot plead such uncertainty
in order to deny relief to the injured person, but
rather must bear the risk of the uncertainty which
was created by his own wrong.bi The Board is often
faced with the task of determining the precise amount
of a make-whole order where the criteria are less
than ideal, and has successfully resolved the questions
presented.62
But even if a reimbursement order were judged
by legal or equitable principles regarding damages,
the remedy would not be speculative. It is well estab-
lished that the rule which precludes recovery of
"uncertain damages" refers to uncertainty as to the
fact of injury, rather than to the amount." Where,
as here, the employer has deprived its employees
of a statutory right, there is by definition a legal
injury suffered by them, and any uncertainty concerns
only the amount of the accompanying reimbursable
financial loss.
From a remedial viewpoint, the present type of
refusal to bargain differs from other 8(a)(5) situations
i i Story Parchment C o v Paterson Parchment Co, 282 U S 555,
563 When reaffirming this principle in Bigelow v RKO Radio Pictures,
327 US 251, 265, the Supreme Court relied on F W Woolworth
Company v NLRB, 121 F 2d 658 (C A 2) The court of appeals
in that case enforced the Board's backpay order even though, because
of the employer's conduct, it could not be determined which employees
were discriminatorily discharged, and stated that
in this striving to restore the status quo, the Board was forced
to use hypothesis and assumption instead of proven fact But its
order is not invalid on that account, for Petitioner, by its unlawful
conduct, has made it impossible to do more than to approximate
the conditions which would have prevailed in the absence of discrimi-
nation Even in private litigation, the courts will not impose
an unattainable standard of accuracy Certainty in the fact of damages
is essential Certainty as to the amount goes no further than to
require a basis for a reasonable conclusion
The same principle has been applied to a backpay award granted to
remedy a violation of Sec 8(a)(5) in Leeds & Northrup Co v NL R B,
supra (see titatement quoted at pp 27-28 above)
" The problem most frequently arises when we must determine the
amount of backpay due to unlawfully discharged employees As we
recently stated in connection with this issue (The Buncher Company,
164 NLRB 340, enfd 405 F 2d 787 (C A 3))
In solving many of the problems which arise in backpay cases,
the Board occasionally is required to adopt formulas which result
in backpay determinations that are close approximations because
no better basis exists for determining the exact amount due However,
the fact that the exact amount due is incalculable is no justification
for permitting the Respondent to escape completely his legal obligation
to compensate the victims of his discriminatory actions for the
loss of earnings which they suffered in general, courts have acknowl-
edged that in solving such backpay problems, the Board is vested
with wide discretion in devising procedures and methods which
will effectuate the purposes of the Act and has generally limited
its review to whether a method selected was "arbitrary or unreasonable
in the circumstances involved," or whether in determining the amount,
a "rational basis" was utilized
Story Parchment Co v Paterson Parchment Co, supra
118 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
where reimbursement has been ordered only in the
method of proof needed to calculate the amount
of financial loss, if any, which the employees may
have suffered. In the cases involving employer refusals
to sign agreements already reached, the employees'
losses were compensated according to the terms of
such agreement for the length of the delay in its
effectuation caused by the employer.64 Where the
employer unilaterally discontinued a Christmas bonus,
the amount of employee loss was determined by utiliz-
ing the past records of bonuses given and the methods
by which they were previously calculated .61 In a
recent case,66 a union and a multiemployer
bargaining association successfully bargained to a
contract. The employer subsequently refused to sign
the contract and attempted to withdraw from the
multiemployer bargaining association. The Board
found a violation of Section 8(a)(5) and ordered the
employer to cease and desist from unfair labor
practices, to sign the contract, and to pay the fringe
benefits provided for in that contract. The court of
appeals had agreed with the Board's finding of
violation and its order to cease and desist from viola-
tion and to sign the contract, but refused to enforce
that part of the Board's order requiring the Respond-
ent to pay the contractual fringe benefits as being
outside the Board's powers. The Supreme Court, on
writ of certiorari, affirmed the Board order in toto,
finding that the provision ordering the Respondent
to pay the contractual fringe benefits was within
the Board's remedial power granted in Section 10(c)
of the Act. In situations of unlawful unilateral discon-
tinuance of part of an operation," the compensation
is based upon the wage rates previously earned by
the injured employees. It may be noted that the
Supreme Court upheld the order in Fibreboard even
though the amount of actual loss might be deemed
speculative because it was not shown that had the
employer bargained lawfully it would not have con-
tracted out the work and discharged the employees.
As previously indicated, the injury suffered by
employees is predicated upon the employees' being
deprived of the right to collective bargaining as
required by the Act. The burden of proof would
be upon the General Counsel at the compliance stage
64 E g , cases cited in fn 35, supra
6' Leeds & Northrup Co v N L R B cupra, American Fire Apparatus
Co fn 36, cupra The court of appeals . in enforcing the order in the latter
case , stated that
the only question is whether the Board can fairly arrive at
the loss , and such determination on the part of the Board may
not judicially be required to rest upon any greater degree of certainty
as to amount than that applicable to the contract or statutory breaches
generally [380 F 2d at 1006 ]
66 NL R B v Joseph T Strong, d/b/a Strong Roofing & Insulating
Co, supra
6' Fibreboard Paper Products Corp v NLR B, supra
to translate that legal injury into terms of measurable
financial loss, if any, which the employees might
reasonably be found to have suffered as a consequence
of that injury.
A showing at the compliance stage by the General
Counsel or Charging Party by acceptable and
demonstrable means that the employees could have
reasonably expected to gain a certain amount of com-
pensation by bargaining would establish a prima facie
loss, and the Respondent would then be afforded
an opportunity to rebut such a showing. This might
be accomplished, for example, by adducing evidence
to show that a contract would probably not have
been reached, or that there would have been less
or no increase in compensation as a result of any
contract which might have been signed.
Accordingly, uncertainty as to the amount of loss
does not preclude a make-whole order proposed here,
and some reasonable method or basis of computation
can be worked out as part of the compliance procedure.
These cannot be defined in advance, but there are
many methods for determining the measurable finan-
cial gain which the employees might reasonably have
expected to achieve, had the Respondent fulfilled
its statutory obligation to bargain collectively. The
criteria which prove valid in each case must be deter-
mined by what is pertinent to the facts. Nevertheless,
the following methods for measuring such loss do
appear to be available, although these are neither
exhaustive nor exclusive. Thus, if the particular
employer and union involved have contracts covering
other plants of the employer, possibly in the same
or a relevant area, the terms of such agreements
may serve to show what the employees could probably
have obtained by bargaining." The parties could also
make comparisons with compensation patterns
achieved through collective bargaining by other
employees in the same geographic area and industry.69
Or the parties might employ the national average
percentage changes in straight time hourly wages
computed by the Bureau of Labor Statistics.
6" As an example, the Union here presented evidence of the collective-
bargaining agreements it had negotiated with Ex-Cell-O at five of its
other plants in nearby States
'' Data customarily cited by companies and unions in negotiations,
according to the study by the National Industrial Conference Board,
"Preparing for Collective Bargaining ," pp 60 and 65 , tables 2 and 6,
could also assist in making the determination The company lists include
settlements negotiated by other firms in company's industry, settlements
negotiated by union with which company deals, settlements in company's
immediate job area, settlements negotiated by big companies , settlements
negotiated by subsidiaries of parent company , settlements negotiated
by related industries , such as suppliers , settlements negotiated with other
unions, etc The union lists include settlements by other companies
within the jurisdiction of the union , settlements in the immediate job
market area of the firm with which the union is dealing , settlements
negotiated by the big companies , and miscellaneous
EX-CELL-O CORPORATION
And there is other available significant data which
may be utilized to indicate the value of the lost
collective-bargaining opportunity. For example, the
Bureau of Labor Statistics conducts an annual study
of union wage scales in the building construction,
local transit, local trucking, and printing industries.
This study covers all local unions in 68 selected
cities. BLS similarly makes a quarterly wage survey
of seven major construction trades in 100 selected
cities. The Bureau also issues monthly reports of
wage and benefit changes under collective-bargaining
agreements in manufacturing establishments employ-
ing 1,000 or more production and related workers.
A related survey of wage developments in smaller
manufacturing units covers both unionized and nonu-
nionized establishments. There are other Bureau of
Labor Statistics facts which may bear on the remedy.
One of significance is the periodic wage and benefits
survey of 50 manufacturing and 20 nonmanufacturing
industries. The data collected in this program reports
on about 20 million employees on both a national
and regional basis, usually with listings by size of
establishment, size of community, collective-bargain-
ing coverage, and type of product or plant group.
Another Bureau of Labor Statistics program periodi-
cally gathers wage and benefits data on a Standard
Metropolitan Statistical Area basis for more than
60 occupational categories in all but the smallest
establishments. Depending on the type of industry,
these surveys cover from 8 to 72 metropolitan areas.70
Guidance may also be forthcoming, on occasion, from
other forms of data frequently cited in the collective-
bargaining process," such as Consumer Price Indices
and productivity statistics. Other relevant wages and
benefit information will be available to the General
Counsel and the parties from private sources and
their use and usefulness in the compliance process
will likely vary with the particular circumstances
of the individual case. Futhermore, additional data
could become available through new compilations
which might later be undertaken by the Bureau of
Labor Statistics or other agencies, including this agen-
cy, as well as by unions, employers, and private
and public organizations and institutions.
" ° All of the foregoing programs of fact gathering and analysis are
described in detail in Bureau of Labor Statistics, Handbook of Methods
for Surveys and Studies (1966)
" Measuring the amount of loss calls for a knowledge of pay rates
in the industry and area for comparable jobs, a detailed understanding
of the pay rates in Respondent 's plant and increases therein during
the period when compensation may have been accruing , and like specialized
technical matters
Employers and unions are well equipped by their specialized knowledge
and experience to deal with these matters indeed, from time to time,
they have been able to resolve the amounts due in large, complex backpay
cases following Board orders remedying unfair labor practice discharges,
etc , by negotiation for the approval of the Regional Directors
119
In the instant case, as noted above, a prima facie
showing of loss can readily be made out by measuring
the wage and benefit increments that were negotiated
for employees at Respondent's other organized plants
against those given employees in this bargaining unit
during the period of Respondent's unlawful refusal
to bargain. Granted that the task of determining
loss may be more difficult in other cases where no
similar basis for comparison exists, this is not reason
enough for the Board to shirk its statutory responsibili-
ties," and no reason at all for it to do so in a
case such as this where that difficulty is not present.
For the reasons set out above, we would order
the Employer to make its employees whole for their
measurable losses, if any, resulting from the unlawful
refusal to bargain. We dissent from the Decision
of the Board to the extent that it fails to direct
such a remedy.
As the Board wa' reminded by the court in the Tudee Produc tc case
A tribunal given the function of implementing national policy through
compensatory remedies may not soundly refer to the difficult} in
qualilying appropriate compensation as aju',titivation for the
withdrawal and Irustration of the policy
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL, upon request, recognize and bargain
collectively with International Union, United
Automobile, Aerospace and Agricultural Imple-
ment Workers of America, UAW, as the exclusive
representative of all our employees in the
appropriate bargaining unit. The bargaining unit
is:
All production and maintenance employees,
including tool crib store employees, shipping
and receiving and followup employees, but
excluding all office clerical and plant clerical
employees, all professional employees,
guards, and supervisors.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of their rights guaranteed in Section
7 of the Act.
WE WILL bargain collectively, on request, with
the above-named Union as the exclusive repre-
sentative of the employees in the unit described
above with respect to rates of pay, wages, hours
of employment, and other conditions of employ-
ment and, if an understanding is reached, embody
such understanding in a signed agreement.
120 DECISIONS OF
EX-CELL-O
CORPORATION
(Employer)
Dated By
NATIONAL LABOR RELATIONS BOARD
(Representative)
(Title)
This is an official notice and must not be defaced
by anyone.
This notice must remain posted for 60 consecutive
days from the date of posting and must not be altered,
defaced, or covered by any other material.
Any questions concerning this notice or compliance
with its provisions may be directed to the Board's
Office, 614 ISTA Center, 150 West Market Street,
Indianapolis, Indiana 46204, Telephone 317-633-8921.
TRIAL EXAMINER'S DECISION
Statement of the Proceedings
The Prior Representation Case, 25-RC-2670
OWSLEY VOSE, Trial Examiner. After the usual proceed-
ings under Section 9 of the National Labor Relations Act,
as amended, in which the Respondent was represented
by counsel and fully participated, the Regional Director
for Region 25, National Labor Relations Board, at Indianap-
olis, Indiana, issued a Decision and Direction of Election,
in which he directed an election among the following
employees of the Respondent whom he found constituted
a unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All production and maintenance employees at the
Employer's Elwood, Indiana, plant, including tool crib
stores employees, shipping and recieving employees
and follow-up employees, but excluding all office cleri-
cal employees, plant clerical employees, all professional
employees, guards, and supervisors as defined in the
Act.
Pursuant to the aforesaid Decision and Direction of
Election a secret-ballot election among the employees in
the above-stated unit was conducted under the supervision
of the Regional Director on October 22, 1964 Of the
196 ballots cast, 102 were cast in favor of the Charging
Party, hereinafter referred to as the Union, 93 ballots
were cast against the Union, and I ballot was challenged
On October 29, 1964, the Respondent filed timely objec-
tions to conduct affecting the results of the election. After
an administrative investigation conducted by the Acting
Regional Director in which the Respondent participated
in that it submitted evidence in support of its position,
the Acting Regional Director on December 29, 1964, issued
a Supplemental Decision and Certification of Representative
in which, after discussing and considering the Respondent's
objections, he overruled them in their entirety, and issued
a Certification of Representative stating that the Union
was the exclusive bargaining representative of the employees
in the aforesaid appropriate unit.
Thereafter, on January 25, 1965, the Respondent, pur-
suant to Section 102.67 of the Board's Rules and Regula-
tions, Series 8, as amended, filed a request for review
of the Acting Regional Director's Supplemental Decision
and Certification of Representative. By order dated April
23, 1965, the Board granted the request for review and
directed a hearing for the purpose of taking evidence bearing
upon the issues raised by the request for review. Such
a hearing was held on May 18 and 19, 1965, before a
Hearing Officer of the Board. All parties participated in
the hearing and were given full opportunity to examine
and cross-examine witnesses, and to introduce evidence
bearing upon the issues involved
On July 15, 1965, the Hearing Officer issued his Report
on Objections in which he recommended that the Respond-
ent's objections be overruled and that the Union be certified
as the statutory bargaining representative of the Respond-
ent's employees in the aforesaid appropriate unit Thereafter
the Respondent filed timely Exceptions to the Hearing
Officer's Report on Objections, together with a supporting
brief.
In its supporting brief the Respondent relied solely on
a letter mailed by the Union to the employees on October
19, 1964, the Monday before the Thursday election, and
a statement made by a union representative at a union
meeting on October 18, 1964 The Respondent contended
that in the letter the Union had made the following material
misrepresentations of fact. (1) that the Respondent had
deprived the employees of wage increases amounting to
14 cents per hour, and (2) that the Respondent was hiring
men to fill jobs women had previously performed and
intended to continue doing so Regarding the Union's state-
ment at the Union's October 18 meeting, the Respondent
contended that the Union had told employees that if the
Union lost the election, the Respondent's principal customer
would stop its purchases. The Respondent argued that
the Union's statements in the letter and at the union
meeting prevented the employees from exercising a free
choice of representatives in the election and urged that
the election should be set aside
On October 28, 1965, after considering the Respondent's
exceptions and the entire record, the Board issued its Deci-
sion on Review in which it overruled the Respondent's
objections, adopted the Hearing Officer's findings and rec-
ommendations, and affirmed the acting Regional Director's
certification of the Union as the exclusive representative
of all employees in the aforesaid appropriate unit, effective
as of that day
The Instant Unfair Labor Practice Case, 25-CA-2377
a. The correspondence between the Respondent and the
Union
On October 29, 1965, the day after the Board's affirmance
of the Acting Regional Director's certification of the Union,
the Respondent wrote the Union as follows:
We have received the Labor Board's decision concern-
ing our objections to the conduct of the Union election
held October 22, 1964. As you know, the only way
the Labor Board's decision in this case can be reviewed
is through a technical refusal to bargain, and conse-
quently we are unable to meet with you and bargain
until the review procedure is carried out.
EX-CELL-O CORPORATION
On November 9, 1965, the Respondent, in response to
a letter from the Union dated November 8, 1965, requesting
a bargaining meeting, declined the Union's request, reiterat-
ing that "the only way the Labor Board's decision in
this case can be reviewed is through a technical refusal
to bargain, and consequently we are unable to meet with
you and bargain until the review procedure is carried out "
b. The charge, complaint, and answer
The Union filed charges with the Regional Office on
November 18, 1965, alleging that the Respondent was refus-
ing to bargain collectively with it in violation of Section
8(a)(5) and (1) of the Act The General Counsel on Novem-
ber 23, 1965, issued his complaint alleging that the Respond-
ent was violating Section 8(a)(5) and (1) of the Act by
refusing to bargain collectively with the Union, the duly
certified bargaining representative of its employees in an
appropriate bargaining unit. Thereafter, on December 6,
1965, the Respondent filed an answer in which it admitted
the underlying facts alleged in the complaint, but denied
the conclusionary allegations of the complaint on the
grounds that the Board's certification of the Union was
invalid because of the Union's statements to the employees
in its letter of October 19, 1964, and at the union meeting
of October 18, 1964. These were the same matters relied
on by the Respondent in the prior representation case
which were considered by the Board and ruled on adversely
to the Respondent in that case.
c Other preliminary steps taken in the proceedings
On December 8, 1965, the General Counsel filed a motion
to strike portions of the Respondent's answer and for
summary judgment. This motion was referred to Trial
Examiner Thomas N Kessel for ruling Mr. Kessel issued
an order directing the Respondent to show cause why
the General Counsel's motion should not be granted. The
Respondent filed a response and supplementary response
thereto.
In the meantime, the Respondent, by letter dated February
4, 1966, requested the Regional Director to furnish it
with "a true and correct copy of all reports of the investiga-
tion, or investigations, in Case No. 25-RC-2670 not hereto-
fore made part of the record in Case No. 25-CA-2377 "
In the letter the Respondent indicated that it was seeking
"particularly the record of any ex parte investigations con-
ducted by representatives of the Regional Director prior
to the hearing on the Petition for Election and following
the filing of the Employer's Objections to the Election."
At the same time the Respondent requested the issuance
of a subpoena duces tecum, explaining that it needed the
material to aid it in preparing its response to the Trail
Examiner's order to show cause.
Subsequently, on February 14, 1966, the Regional
Director was served with a subpoena duces tecum issued
at the request of the Respondent requiring him to produce
the following.
All files, documents, reports, memoranda, affidavits,
notes, correspondence, and records pertaining to the
121
investigation, or investigations, conducted by the
Regional Director, or his representatives, prior to the
hearing on the Petition for Election and following
the filing of the Employer's Objections to the election
in National Labor Relations Board Case No. 25-RC-
2670, involving Ex-Cell-O Corporation, Employer, and
International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America,
UAW, AFL-CIO, Petitioner
Thereafter a petition to revoke the above subpena was
timely filed by the Regional Director. The Respondent
filed a response thereto together with a request that the
Trial Examiner hear oral argument concerning the issues
raised by both the General Counsel's motion to strike
and for summary judgment and by the subpena and the
petition to revoke
Trial Examiner Kessel, after considering the Respondent's
response to his order to show cause and the various docu-
ments submitted in connection with the subpoena duces
tecum and the petition to revoke, on April 1, 1966, entered
an order denying the General Counsel's motion to strike
and for summary judgment and reserving the subpena ques-
tion for ruling by the Trial Examiner at the hearing.
On April 28, 1965, the Regional Director rescheduled
the hearing for June 1, 1966, at Elwood, Indiana.
On May 31, 1966, the Respondent filed an amendment
to paragraph 6 of its answer eliminating subparagraph
(b) of paragraph 6 of its original answer, in which it
had alleged that the Union had threatened employees at
a union meeting prior to the election that the Respondent's
principal customer would stop its purchases if the Union
did not achieve representative status, and adding a new
subparagraph (c) alleging that at a union meeting on or
about January 30, 1966, agents of the Union "admitted
that it could not bargain with Respondent, because it had
no charter, organization, officers or bargaining committee
for the employees at Respondent's Elwood plant, and that
such officers and committee must be elected before bargain-
ing could be started "
d. The June 1, 1966, hearing
The hearing commenced on June 1, 1966, at Elwood,
Indiana, before Trial Examiner Owsley Vose After the
pleadings and other formal documents were received in
evidence the General Counsel rested his case. At this point
the Union announced that it was seeking in this case,
in addition to the usual remedy afforded by the Board
in refusal-to-bargain cases, a monetary award in favor of
the employees to make them whole for their losses resulting
from the Respondent's failure to comply with its duty
to bargain collectively with their duly designated bargaining
representative, and the Union proposed to adduce evidence
which, it asserted, would justify the granting of this unusual
relief. After hearing arguments pro and con from counsel
for the Union and counsel for the Respondent, I ruled
that I would entertain relevant and material evidence bearing
upon this issue.'
' Counsel for the General Counsel stated that he was not joining
the Union in requesting this remedy, but did not argue for or against
the Union's proposal
122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
At this point counsel for the Respondent acquiesced
in counsel for the Union's request for a postponement
of the hearing until June 29, 1966. The General Counsel
opposed any postponement of the hearing for the purpose
of taking evidence supporting the Union's request for a
special remedy in this case. I ruled that after the Respondent
had put in its defense on the merits, the hearing would
be postponed until June 29, 1966, as agreed upon between
the Union and the Respondent.'
At the beginning of the presentation of its defense, the
Respondent called for the appearance of the Regional
Director and the production of the documents listed in
the subpoena duces tecum described above After consider-
ation of the arguments made by counsel for the General
Counsel and counsel for the Respondent and the supporting
documents, and having in mind a clarification made by
counsel for the Respondent,' I granted the Regional
Director's petition to revoke the subpoena duces tecum
which had been served upon him by the Respondent.
Counsel for the Respondent next stated that it desired
as part of its defense to proffer certain witnesses to testify
concerning matters as to which they had testified at the
earlier hearing on objections (Case 25-RC-2670) and certain
other witnesses to testify concerning matters which the
Respondent had sought to adduce in the prior case, but
which evidence the Hearing Officer refused to receive in
that case The Board having already considered these matters
and ruled on them in its Decision on Review, I held
that such matters were not open before me, and accordingly
refused to receive such proffered testimony. The Respondent
made a written offer of proof as to the testimony which
it proposed to adduce through these witnesses (Respondent's
Rejected Exhibits 1-18, inclusive). All of the testimony
detailed in these exhibits related to the Respondent's objec-
tion based upon the Union's letter to employees of October
19, 1964. I also ruled out certain additional testimony
relating to the same subject matter which was tendered
through the Respondent's personnel manager, William N.
Cox, Jr. In part, this evidence, as the Respondent's offer
of proof shows, was available at the time of the hearing
on objections, and no explanation was offered for its nonpro-
duction, and as to the remainder, it was irrelevant and
immaterial, relating as it did to events subsequent to the
election.
The only other evidence adduced or sought to be adduced
by the Respondent at the hearing in this case related
to the additional allegation in the amendment to paragraph
6 of its answer, dated May 31, 1966, to the effect that
the Union admitted that it could not bargain with the
Respondent because it had no charter, organization, officers,
or bargaining committee for the employees at the Elwood
plant. However, the evidence which was adduced does
' It was further understood, of course, that the Respondent would
have an opportunity, after the Union had put in the evidence supporting
its request for a special remedy in this case, to adduce countervailing
evidence
' Counsel for the Respondent expressly disclaimed contending that
the Board in its Decision on Review in Case 25-RC-2670 (in which
the hearing upon the Respondent's objections to the election was held)
relied on matters outside the formal record in that case
not support its contention in this regard, and since the
Respondent in its brief no longer advances this contention,
I see no reason to discuss this aspect of the case further
Pursuant to Rule 102.26 of the Board's Rules and Regula-
tions, Series 8, as amended, the Respondent, on June 8,
1966, filed with the Board a request for Special Permission
to Appeal Trial Examiner' s ruling revoking the subpoena
duces tecum which had been served on the Regional
Director. By telegraphic order dated June 22, 1966, the
Board denied the Respondent's request.
e. The June 29, 1966, hearing
The hearing in this case was reconvened at Indianapolis,
Indiana, on June 29, 1966. At this hearing the Union
offered in evidence numerous collective-bargaining contracts
between the Union and General Motors Corporation, Chrys-
ler Corporation, Borg-Warner Corporation, Perfect Circle
Corporation, and Ex-Cell-O Corporation and subsidiaries
at locations other than in Indiana. Although these contracts
were initially received in evidence by me, I later decided
that the Respondent's objection concerning the authentifica-
tion of these contracts was sound, and consequently reversed
my ruling receiving these contracts in evidence. At this
time, pursuant to an agreement between the Union and
the Respondent, and over the objection of the General
Counsel, the hearing was postponed until July 28, 1966,
to enable the Union to produce witnesses who would be
competent to testify as to the authenticity of the contracts
in question.'
f The Union's unsuccessful attempt to subpena certain of the
Respondent's records
At the hearing on June 29, 1966, the Union served
on Robert M Jones, a vice president of the Respondent,
a subpoena duces tecum calling upon him to produce the
following:
All records of wage increases and fringe benefits granted
to production and maintenance employees at the
Elwood, Indiana, plant of Ex-Cell-O Corporation since
22 October 1964.
A petition to revoke this subpena was timely filed with
me. On July 8, 1966, after consideration of the matter,
I issued an order, together with an accompanying opinion,
denying the petition to revoke. Thereafter Jones declined
to comply with the subpena. No steps were taken in the
United States District Court to obtain compliance with
the subpena.
At the close of the hearing on June 29, 1966, 1 was served with
a copy of a complaint and summons in a civil action in the United
States District Court for the Southern District of Indiana, Indianapolis
Division , entitled EX-CELL-O Corporation v William T Little, Regional
Director, Twenty-fifth Region, National Labor Relations Board, Owsley
Pose, Trial Examiner, National Labor Relations Board, Case 1P66-C-
313 The Respondent in its complaint sought an order restraining me
from closing the hearing in the instant case until the Regional Director
had produced the investigative materials in the representation case which
were requested in the subpoena duces tecum served on the Regional
Director before the first hearing in this case This injunction action
is discussed more fully below
EX-CELL-O CORPORATION 123
g The July 28, 1966, hearing
When the collective-bargaining contracts offered in evi-
dence at the June 29 hearing were reoffered in evidence
by the Union at the resumed hearing on July 28, 1966,
the Respondent offered no objection to their authenticity,
and they were received in evidence. At this hearing testimony
was received from witnesses for the Union concerning certain
aspects of some of the contracts which had been received
in evidence and related matters, and also concerning wage
increases granted by the Respondent, the Respondent's
job classifications, and the wages of certain of the Respond-
ent's employees. Vice President Jones did not appear at
the July 28, 1966, hearing in response to the subpoena
duces tecum and the records called for in the subpoena
duces tecum were not produced.
The Respondent did not offer any evidence rebutting
that put in by the Union on the question of the remedy
in this case.
Because of the pendency of the Respondent's injunction
action against the Regional Director and me, discussed
immediately below, the Respondent requested, and the
Union acquiesced in this request, that the hearing not
be closed until the District Court had reached a decision
in the injunction action. Thereupon the hearing was
adjourned indefinitely, with the understanding that it would
not be closed before the District Judge had decided the
injunction action against the Regional Director and me,
provided the District Judge had ruled within 60 days after
he had heard oral argument upon the defendants' motion
to dismiss or for summary judgment, which had been
filed by this time.
h. The injunction action
It is appropriate briefly to discuss the injunction action
brought in the United States District Court by the Respond-
ent against the Regional Director and me because it was
a factor in the delay in disposing of this case. As stated
above, the Respondent sought in this action, which was
commenced on June 29, 1966, to obtain an order restraining
me from closing the hearing in this case until the Regional
Director had produced the investigative materials in the
representation case (in which the hearing upon the Respond-
ent's objections to the election was held) subpenaed by
it before the first hearing in this case As noted above,
the subpena calling for the production of those investigative
materials was revoked by me at the hearing on June 1,
1966, and the Respondent's request for special permission
to appeal this ruling was thereafter denied by the Board.
A motion to dismiss or for summary judgment was filed
on behalf of the Regional Director and me and it finally
came on for argument before Cale J Holder, United States
District Judge, on December 1, 1966 On December 13,
1966, District Judge Holder issued an Order of Summary
Judgment in favor of the defendants.
On December 21, 1966, I issued an order closing the
hearing. Prior to the close of the hearing the Union filed
a brief. The Respondent thereafter filed its brief.
On January 31, 1967, the Respondent filed a motion
requesting (1) that the District Court proceeding be noticed
judicially, and (2) that the Findings of Fact, Conclusions
of Law, and Order of Summary Judgment for the defendants
of the District Judge be incorporated in the record of
this unfair labor practice proceeding. The Respondent's
request (1) above is granted and (2) is denied In my
opinion, proceedings in the District Court are not properly
a part of the record in this case However, the District
Judge's Findings of Fact will be included among the Trial
Examiner's rejected exhibits and thus will be available
for reference purposes
Upon the entire record, including the briefs filed by
the Union and the Respondent, I make the following.
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF THE RESPONDENT
The Respondent is engaged at its plant at Elwood, Indi-
ana, in the manufacture of metal parts. During the year
preceding the issuance of the complaint, the Respondent
received from and shipped to points outside of Indiana
more than $50,000 worth of materials and products. Upon
these facts I find, as the Respondent admits, that it is
engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
II THE LABOR ORGANIZATION INVOLVED
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America, UAW, AFL-
CIO, is a labor organization within the meaning of Section
2(5) of the Act.
IIi. THE UNFAIR LABOR PRACTICE
The Refusal to Bargain Collectively in
Violation of Section 8(a)(5) of the Act
As indicated above, there is no issue of law or fact
in this case concerning the appropriate unit, no issue of
fact concerning the Boards' certification of the Union as
the exclusive bargaining representative of the employees
in the appropriate unit after the Union won the Board-
conducted election, and no issue of fact concerning the
Respondent's refusal of the Union's request for a meeting
for collective-bargaining purposes.
The Respondent sought to raise before me certain addi-
tional factual issues relating to its objections to the election.
As indicated above, the Respondent had a full opportunity
to, and did in fact raise these issues in the prior representa-
tion proceeding, and the Board passed on these issues
in its Decision on Review; consequently such additional
issues were not open before me.
Thus, the case on the merits involves simply a technical
refusal to bargain in order to obtain court review of the
Board's determination in its Decision on Review in the
prior representation case that the Respondent's Objections
to Conduct Affecting the Results of the Election were
without merit, and that the Union should be certified
as the exclusive bargaining representative of the employees
in the appropriate bargaining unit. A finding of a refusal
to bargain collectively with the Union in violation of Section
8(a)(5) and (1) of the Act necessarily follows.
124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
IV THE REMEDY
As stated above, at the opening of the hearing the Union
announced that it would seek from the Board in this
case, in addition to the conventional refusal-to-bargain reme-
dial provisions, a make-whole provision to compensate the
Respondent's employees for losses assertedly flowing from
the Respondent's refusal to observe its statutory collective-
bargaining obligations. Over the objections of the Respond-
ent, I permitted the Union to adduce evidence supporting
its position with respect to the novel remedy sought by
it in this case.
The Board's power, in appropriate circumstances, to pro-
vide some form of a monetary award to remedy refusals
to bargain collectively stems from Section 10(e) of the
Act empowering the Board to require persons found to
have engaged in unfair labor practices "to take such affirma-
tive action including reinstatement of employees with or
without backpay, as will effectuate the policies of this
Act." The "broad reach" of the Board's discretion to deter-
mine "how the effect of unfair labor practices may be
expunged" has long been established, NL.R.B. v. Link-
Belt Company, 311 U S. 584, 600; NL.R.B. v. District
50, United Mine Workers, 355 U.S. 453, 458. As stated
in Phelps Dodge Corp v. N.L.R.B., 313 U.S 177, 194:
Congress could not catalog all the devices and
stratagems for circumventing the policies of the Act
Nor could it define the whole gamut of remedies
to effectuate these policies in an infinite variety of
specific situations. Congress met these difficulties by
leaving the adaptation of means to end to the empiric
process of administration. The exercise of the process
was committed to the Board, subject to limited judicial
review.
That it is within the Board's discretion to require the
payment of backpay to remedy refusals to bargain in viola-
tion of Section 8(a)(5) of the Act is also settled by the
highest authority. In Fibreboard Paper Products Corp. v.
N.L.R.B., 379 U.S. 203, the Supreme Court decided not
only that the employer was obliged to bargain collectively
with the representative of the affected employees concerning
the contracting out, for legitimate business reasons, of certain
maintenance operations, but also that the Board had the
authority, in order to remedy the refusal to bargain, to
order the resumption of the contracted-out maintenance
operations and to require the "reinstatement with backpay"
of the affected employees (379 U.S. at 215).
In various other situations the Board has provided mone-
tary relief as one of the remedies for a refusal to bargain.
In Ogle Protection Service, 149 NLRB 545, the Board
ordered the employer (1) retroactively to give effect to
the terms of an agreement which it had reached with
the union but had refused to execute and (2) to make
the employees whole for any losses resulting from the
initial refusal to execute the agreement. Similar cases are
Huttig Sash and Door Company, 151 NLRB 470, 475,
enfd. with a modification not here relevant 362 F.2d 217,
219-220 (C A 4), and Montgomery Ward and Co., 154
NLRB 1197, modified January 6, 1967 (C A D.C.), 64
LRRM 2108. Chemrock Corporation, 151 NLRB 1074,
involved an employer who had acquired a business and
continued unchanged the operations of its predecessor and
who, without bargaining collectively with the representative
of a small group of employees concerning the terms and
conditions of their continued employment in the business,
terminated them and replaced them with new employees.
The Board, in order to remedy the employer's refusal
to bargain, directed the reinstatement of the employees
in question with backpay, with the rate of pay to be
governed by that in the contract with the employer's prede-
cessor In its most recent decision in this area that I
am aware of, Schill Steel Products, Inc., 161 NLRB No.
83, where the employer had refused to execute a contract
which had been previously agreed upon, the Board, in
order to "recreate the conditions and relationships that
would have been had there no unfair labor practice," ordered
the employer "to put into effect and abide by its terms
1 year subsequent to the date on which the [employer]
signs" the previously agreed-upon contract, and to reimburse
all employees covered by the contract for the loss of benefits
resulting from the employer' s original refusal to sign. Cf
NL.R.B v Warrensburg Board & Paper Corp., 340 F.2d
920, 925 (C.A. 2).
In view of all of the foregoing decisions there can be
no doubt as to the Board's power in appropriate circum-
stances to direct some form of monetary relief to remedy
a refusal to bargain in violation of Section 8(a)(5) of the
Act. Indeed, the Respondent does not argue to the contrary
Instead, relying on Preston Products Company, Inc., 158
NLRB No. 35, and Saks and Company, 160 NLRB No.
59, the Respondent urges that the Board has decided against
exercising its power to direct the relief requested by the
Union in this case and that I am bound by the precedent
established in these two cases .' After careful consideration
of the whole problem, and with due respect for the views
of the Court of Appeals in the Preston case, I conclude
for the reasons stated below that the Board did not intend
by the use of the summary language in the footnote in
the Preston case to decide the remedy question on the
merits, and that the differences in the relief sought by
the union in the Saks case and that sought by the Union
in this case are such as to render the Saks case inapplicable
as a precedent for my decision in this case.
' Preston is presently pending before the Court of Appeals for the
District of Columbia Circuit upon the petition of the UAW, the Union
involved in this case, for review of the Board's Decision and Order
in that case One of the issues raised by the UAW's petition in that
case concerns the Board's refusal to grant the compensatory relief sought
by the UAW as a remedy for the 8(a)(5) violation The court of appeals,
in ruling on preliminary motions, expressed the opinion that the Board
had decided the remedy question on the merits (opinion on petition
for reconsideration of order transferring cases dated January 25, 1967 )
Saks is also pending for review in the Court of Appeals for the District
of Columbia Circuit Another case presenting a related remedy question
pending in the same court is United Steelworkers of America v NL R B,
which involves the Board's Order in Northwest Engineering Company,
158 NLRB No 48 In this case, the Steelworkers requested the Board
at the exceptions and brief stage of the case for remedial provisions
(1) specifically directing the employer to bargain about past benefits
covering the period of the employer's refusal to bargain with the union,
and (2) requiring any grievance and arbitration provisions ultimately
arrived at be given retroactive effect The Board's decision, which failed
to include the requested remedial provisions, did not explain its reasons
for failing to grant the relief requested
EX-CELL-O CORPORATION
The UAW's request for a financial reparation order as
a remedy for the refusal-to-bargain violation in the Preston
case was made for the first time in its exceptions to the
Trial Examiner's Decision This request was supplemented
by numerous statements of fact in the UAW's brief which
were wholly without foundation in the record before the
Board in the Preston case. The Board's summary statement
in footnote 1 to its decision in the Preston case that "we
find that the remedial order requested by the Charging
Party is without merit" contains not one word of explanation
of its reasons for its action in denying the requested relief.
The remedial issue before the Board in the Preston case
is not one, in my opinion, which is susceptible of such
summary disposition, without any articulation of the reasons
for its decision. See N.L.R.B. v. Metropolitan Life Insurance
Co., 380 U.S. 438, 442-444. In these circumstances I think
it more reasonable to interpret the Board's refusal to grant
the requested relief n Preston as being the result of the
UAW's failure to adduce evidence supporting its request
for relief rather than the consequence of a considered
decision on the merits regarding the remedy question.
In Saks the Charging Party requested that the Trial
Examiner order that any collective-bargaining agreement
ultimately negotiated by the parties be made retroactive
to the date upon which the employer first refused to bargain
collectively No evidence was offered by the Charging Party
to support its request for this relief The Charging Party
simply argued in effect that its proposed remedy was
appropriate in any refusal-to-bargain case in which any
substantial period of time would have elapsed between
the initial refusal to bargain and the actual commencement
of bargaining negotiations. The Board, without any explana-
tion, affirmed the Trial Examiner's refusal to grant the
Charging Party's requested relief. The fact that the Board,
in a case involving no special circumstances warranting
special relief, went along with the Trial Examiner in refusing
the Charging Party's sweeping request that retroactivity
be given all future contracts negotiated after Board orders
in delayed bargaining situations does not mean, in my
opinion, that the Board would not henceforth consider
some form of compensatory relief in refusal-to-bargain situa-
tions in a case where special circumstances appeared to
justify it.
For the foregoing reasons I am constrained to reject
the Respondent's contention that the Board's decisions in
Preston and Saks are dispositive of the question of the
Union's request for compensatory relief in this case.'
Having concluded that the Board has the power to grant
the relief sought by the Union in this case and that the
cases relied on by the Respondent as precedents against
granting the requested relief are inapplicable in the circum-
stances of this case, the question remains has the Charging
' Insurance Workers International Union v NL R B, 360 F 2d 823
(C A D C ), also cited by the Respondent in this connection is not a
precedent No request for extraordinary relief was made of the Board,
the point about the alleged inadequacy of the remedy having been raised
by the Charging Party for the first time in the court of appeals This
decision is treated further below in the discussion of the Respondent's
contention that the remedy sought by the Union is speculative in character
125
Party made out a case for granting the special remedy
sought by it.
The Union urges that the Board's usual remedial provi-
sions in refusal-to-bargain cases-a cease-and-desist provi-
sion and an affirmative direction to bargain collectively
upon request-constitute but "a slap on the wrist" to
employers and do not provide any incentive to induce
employers promptly to comply with their statutory duty
to bargain collectively. The Union points out that it is
possible for any employer to delay the commencement
of collective bargaining for up to 2 years while he pursues
the legal remedies available to him in the Act. This is
the period of time consumed in processing the representation
and unfair labor practice cases before the Board and the
enforcement or review proceeding in the Court of Appeals.
In the instant case over 2 years has already elapsed since
the Board's original certification was issued, and another
year more will certainly elapse before the Court of Appeals
issues its decision on review
During this period the employees, frustrated in their
efforts to obtain a contract, and seeing that their employer
by his own efforts can prevent the collective- bargaining
process from even getting started, lose interest in union
representation When, after 2 years or more, the employer's
bargaining obligation has finally been confirmed by the
Board and the Court of Appeals, and the employer finally
sits down at the bargaining table, the employees' representa-
tive is bargaining from a position of weakness rather than
the position which the union would have been in had
the employer promptly following the certification of the
union as its employees' bargaining representative sat down
and bargained over the terms of a contract. A result like
this, the Union argues, is to place a premium on disobedience
of the law. Employers who promptly comply with their
bargaining obligations are placed at an economic disadvan-
tage and flouters of the national policy, as embodied in
the Act, are financially rewarded for their conduct Some
indication of the extent of such financial rewards appears
in the record in the instant case As is more fully developed
below, it appears that during the period since the original
certification of the Union the employees of the Respondent's
Elwood, Indiana , plant, the plant here involved, have not
enjoyed all the employment benefits which the Respondent
provides for its employees at its plants in the adjoining
States of Ohio and Michigan, who are covered by collective-
bargaining contracts with the Union, and there do not
appear to be compensating advantages accruing to the
Elwood employees.
What is needed to remedy this situation , contends the
Union, is to take the profit out of refusing to bargain
collectively. The Union proposes that this be done by
requiring that the employees be made whole for the period
from the refusal to bargain until the Employer complies
with his statutory bargaining obligations. In support of
its contention in this regard the Union calls my attention
to the decision of Trial Examiner Josephine H. Klein in
Zinke's Foods. Inc., presently pending before the Board,
in which she included in her recommended order a make-
whole provision such as the Union seeks in this case.
Under the procedure contemplated by Trial Examiner Klein
in the Zinke's case, the determination of the sums necessary
126 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to make the employees whole for their losses resulting
from the employer's refusal to bargain would be left to
a supplemental proceeding before the Board, if necessary.'
The considerations underlying the Union's request for
an additional remedy in this case, in my opinion, are
weighty ones The encouragement of collective bargaining
is the central objective of the Act. The achievement of
this objective can be frustrated in part by employers simply
challenging the Board's actions in the representation case
to the fullest extent permissible under the statute. The
detriment to collective bargaining occurs whether the
employer in good faith believes that the Board has made
a serious error of law in the representation proceeding
or whether the employer, as a deliberate maneuver to
stall bargaining, raises spurious objections and thereafter
pursues them to the utmost. The Board's existing remedies
are ineffectual in these delay situations and in my opinion
some additional form of remedy should be adopted in
an effort to bring about more complete conformance with
the policies of the Act in this area. After giving considerable
thought to the precise form a remedial provision would
take which would help solve the delay problem in refusal-
to-bargain situations, I propose for consideration the follow-
ing provision:
Compensate, in the manner set forth in the section
hereof entitled "The Remedy," each of its employees
for the monetary value of the minimum additional
benefits, if any, including wages, which it is reasonable
to conclude that the Union would have been able
to obtain through collective bargaining with the
Respondent, for the period commencing with the date
of the Respondent's formal refusal to bargain collective-
ly, October 25, 1965, and continuing until paid.
The Respondent's principal arguments against adopting
some form of the additional remedy requested by the Union
are that such a remedy would be punitive in effect and
would require the Board to speculate concerning the terms
of the collective-bargaining contract which the parties would
have arrived at had they sat down and bargained collectively
after the original certification of the Union. The former
argument is discussed below. And the latter argument cannot
be considered in the abstract; it must be viewed against
the background of concrete facts contained in the record
in this case.
As indicated above, the Respondent has three plants
in Ohio, at Bluffton, Lima, and Fostoria, and two or
more in Michigan, at Detroit and Traverse City The
employees of these plants are all represented by the Union.
The employees at all these plants are engaged in some
form of metal working, although the products of all the
plants are by no means the same. The collective-bargaining
contracts negotiated by the Union on behalf of the employees
of these plants in 1962, and again in 1965, were introduced
into evidence by the Union in this case.' The provisions
' Zinke is the only other case presenting this remedy question in
which evidence was received by the Trial Examiner bearing upon the
appropriateness of the requested remedy and methods of determining
how the employees were to be made whole
'As stated above, the Union also introduced into evidence collective-
bargaining contracts negotiated by it with General Motors Corporation,
of these contracts, some of which are summarized in the
chart below, show a certain degree of uniformity among
the contract provisions covering the employees of all these
plants. A comparison of the terms and conditions provided
in the 1965 contracts for these plants with terms and
conditions of employment prevailing at the Elwood plant
reveals what appear to be significant differences between
the terms and conditions of employment of the Elwood
employees and those of the employees of the organized
plants of the Respondent in Ohio and Michigan.
Unfortunately, the record is not as complete as it should
be with respect to showing the terms and conditions of
employment at Elwood in 1965 because of the refusal
of the Respondent's vice president, Robert M. Jones, to
obey what I, in effect, ruled was a valid subpena calling
for his attendance at the hearing as a witness and calling
upon him to produce records of wage increases and fringe
benefits granted Elwood employees since October 22, 1964.
Consequently, I have had to fall back on other sources
of information concerning the terms and conditions of
employment at Elwood during the period in question. The
principal source of information in this regard is a booklet
entitled "OUR EMPLOYEE HANDBOOK, ELWOOD
PLANT, EX-CELL-O CORPORATION," which was
received in evidence in the prior representation case. The
booklet shows on its face that it has been revised from
time to time, the last time being May 1963. While the
record does not show that the handbook had been revised
to reflect changes between May 1963 and April 1965,
it was offered in evidence at the hearing in the representation
case in May 1965 at the request of the Respondent's counsel.
In any event, even if the handbook may not be up-to-
date as of April 1965, it is immaterial since it is being
relied on not to determine the precise measure of damages
suffered by the Elwood employees, if any, as a result
of the Respondent's refusal to bargain, but merely to help
me to decide whether practical ways of measuring the
extent of such damage exist The determination of the
precise measure of damages, if any, will be left to supplemen-
tal proceedings before the Board, if differences in regard
thereto cannot be adjusted informally.
Set forth on the following page is a chart giving a
comparison of the provisions of the 1965 contracts
negotiated by the Union for the Bluffton, Lima, and
Fostoria, Ohio, and Traverse City and Detroit, Michigan,
plants with the terms and conditions set forth in the Elwood
employee handbook for the Elwood plant.
It appears from the above chart that the Elwood employ-
ees have not enjoyed all the fringe benefits granted through
the collective -bargaining process to the employees in the
Respondent's organized plants in the neighboring States
Chrysler Corporation, and certain other companies having plants in the
vicinity of Elwood, Indiana The Union suggested that a comparison
be made of the increases, direct and indirect, granted in contracts with
these corporations with the increases granted by the Respondent at
Elwood since the certification of the Union, and that such a comparison
could be used as an alternative yardstick in this case In view of the
availability of comparisons between the contract terms covering the
Respondent's Ohio and Michigan plants with the terms and conditions
at its Elwood plant, I find it unnecessary to consider the alternative
yardstick proposed by the Union
ELWOOD, INDIANA BLUFFTON, OHIO LIMA, OHIO FOSTORIA, OHIO TRAVERSE CITY, MICH DETROIT, MICH
Employee Handbook 4-3-65 Agreement 4-1-65 4-1-65 Agreement 5-8-65 Agreement 4.1-55 Agreement
(Revised 5 -63) Agreement
Shift Afternoon $ 12 Same* Same Same Afternoon $ 15 Afternoon $ 16
Premium Midnight $ 16 Midnight $ 20 Midnight $ 20
Daily, time and one
half up to 10 hrs
and up to 8 hrs on
Overtime Saturdays Double Same Same Same Same Same
time for the excess
and for Sundays and
Holidays
Holidays 7 (8 in 1965 or 1966 9 9 9 8 (9 in 1966) 8 (9 in 1966)
(Tr 181))
Year's Hrs Days Year's Pay Days Year's Hrs Days Year's Pay Days
Serv Pay off Serv off Serv Pay off Serv off
1 40 5 1 2%** 5 Same as 1 40 5 1 2 5% 5 Same as
Vacations 3 60 7 3 2 8% 7 Bluffton 3 60 7 3 3 5% 5 Fostoria
5 80 10 5 4% 10 5 80 10 5 55% 10
10 100 12 10 5% 12 10 100 12 10 6% 12
15 120 15 15 7% 15
Additional $ 05 per
Deferred hour, payable on
Pay Plan layoff, leave of None None None None None
absence, termination
or retirement
Hospital & Co pays all, incl
Surgical Co pays 75%*** after retirement Same Same Same Same
Insurance
Group Life $4500 $6000 Same Same $6500 $7000
Insurance
Accidental 2250 3000 Same Same 3250 3500
Death
Sickness & $40 25-45 50 per $60 00 per week $50-65 per $50-65 per week $65 per week $70 per week
Accident week week
benefit
Bereavement No mention Yes Same Same Same Same
Pay
Automatic
cost-of- No mention Yes Same Same Same Same
living
Adjustment
Supplemental
Unemployment No (TR 182) Yes Same Same Same Same
Benefits
* Same as in column to the left
** Percent of past year's earnings
*** Co subsequently absorbed a cost increase
128 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
living adjustments,' their hospital and surgical benefits
apparently are not given on as generous terms as those
given the employees of the Respondent's organized plants,
and their various insurance benefits do not appear to measure
up to those accorded the employees of the Respondent's
organized plants
The rates of pay of the Respondent's Elwood employees
and the wage increases granted them in the period since
the original certification of the Union may or may not
compare favorably with the wages at the Respondent's
organized plants These facts cannot be determined on
this record because of the Respondent's refusal to obey
the subpena calling for the production of the necessary
factual data But these facts can be ascertained
When these and all of the other facts casting light on
the Respondent's treatment of its Elwood employees as
compared with its treatment of the employees at its orga-
nized plants are ascertained and considered in the light
of the Respondent's pattern of treatment of the employees
represented by the Union, a sound basis will exist, in
my opinion, for drawing a reasonable conclusion regarding
the minimum additional benefits which the Respondent's
Elwood employees would have obtained had the Respondent
complied fully with its duty to bargain collectively
It is settled that the losses or damages suffered by the
Elwood employees need not be established with mathemati-
cal precision.
.. where the defendent by his own wrong has prevented
a more precise computation, the jury may not render
a verdict based on speculation or guesswork. But the
jury may make a just and reasonable estimate of the
damage based on relevant data, and render its verdict
accordingly In such circumstances "juries are allowed
to act upon probable and inferential, as well as upon
direct and positive proof " Story Parchment Co. v.
Paterson Co., [282 U S. 555, 563]. Eastman Kodak
Co. v. Southern Photo Co., [273 U S 359, 377-379].
Any other rule would enable the wrongdoer to profit
by his wrongdoing at the expense of his victim It
would be an inducement to make wrongdoing so effec-
tive and complete in every case as to preclude any
recovery, by rendering the measure of damages uncer-
tain
Bigelow v. RKO Radio Pictures. Inc, 327 U S 251, 264-
265. See also The Elyria-Lorain Broadcasting Company
v. The Lorain Journal Company, 358 F.2d 790, 793 (C.A
6).
While it is true that the courts have emphasized that
the Board lacks the power to "compel concessions or other-
wise sit in judgement upon the substantive terms of collective
bargaining agreements" (N L.R.B. v. American National
Insurance Co., 343 U.S. 395, 404; Insurance Workers Inter-
national Union v. N.L.R.B., 360 F 2d 823, 827 (C.A.D.C.),
the Board in making a determination on the facts which
are available in this case as to the minimum additional
benefits which the Elwood employees would have obtained
'The Consumers Price Index issued by the Bureau of Labor Statistics
of the United States Department of Labor shows that the period from
the date of the original certification of the Union in 1964 to the present
has been one of steadily rising prices CCH Labor Law Reports 12954
had the Respondent engaged in bargaining with the Union,
would not be deciding on the terms of a collective-bargaining
contract. It would merely be drawing inferences from the
facts of record of a kind which it is frequently called
on to draw. For example, in backpay cases, the Board,
because of the difficulty in reconstructing accurately the
situation to what it would have been absent the unfair
labor practices, is frequently compelled to adopt a formula
which will give a fair approximation of the backpay due.
See N.L.R.B. v Brown & Root, Inc., 311 F 2d 447, 452
(C A. 8), NL R.B. v. Rice Lake Creamery Co., 365 F.2d
888, 891 (C A.D C) While in some cases I can envisage
practical difficulties in the way of ascertaining what addition-
al benefits employees might have obtained through the
collective-bargaining process, in the particular factual situa-
tion here presented, I can find no such serious problems.
The remedy which I am contemplating is not punitive
in any sense of the word. It merely makes the employees
partially whole for losses which they suffered as a result
of the Respondent's refusal to bargain collectively with
their chosen representative. A compensation order of the
type proposed here is much less harsh than a backpay
order to employees discharged in violation of the Act,
which may require in effect that the employer pay double
wages (backpay to the discharged employees and wages
to the replacement employees). The proposed provision
merely requires that the Respondent restore to the employees
part of the extra profit which the Respondent realized
at the expense of the employees from refusing to bargain
collectively with their statutory bargaining representative.
The Respondent is made no worse by this provision than
it would have been had it fully observed its collective-
bargaining obligations from the beginning. As between the
Respondent's employees who suffered losses as a result
of the Respondent's law violation and the Respondent,
the wrongdoer, the equities certainly favor the victims
of the Respondent's wrongdoing. N.L.R.B. v. Don Juan
Inc., 185 F 2d 393, 394 (C.A. 2). As the Court of Appeals
for the Fifth Circuit has said in rejecting an analogous
argument in another refusal to bargain situation, the order
"makes those ' . . whole who [have] been deprived of
a recognized interest by acts that constitute a violation
of the Act. ' and. . is ` . designed to prevent
the violator from benefiting by his misdeed... "' N.L.R.B
v. J. H. Rutter-Rex Mfg. Co., 245 F.2d 594, 597-598.
While the Respondent argues that it is being penalized
for having resorted to the only method available under
the Act of obtaining a review of the Board's action in
overruling its objections in the representation case, I cannot
agree with its conclusion in this regard. Assuming that
the Board were to adopt the remedy proposed herein,
and the case went to the Court of Appeals for review,
if the court ultimately rules that the Respondent was right
in urging that the election should have been set aside
because of the Union's preelection conduct, then the Court
of Appeals will set aside the Board's Order and no obligation
whatever will devolve upon the Respondent. On the other
hand, if the Court of Appeals should rule that the Respond-
ent was wrong in taking the position that the Board's
decision in the representation case was erroneous and that
the Respondent should have granted the Union's request
EX-CELL-O CORPORATION 129
for bargaining, why should the Respondent not be required
to pay the damages which it is reasonable to conclude
its employees suffered as a result of the Respondent's having
violated the National policy for a considerable period of
time? When employees are discharged in violation of the
Act they are made whole from the date of the employer's
violation. I can see no valid reason why the same principle
should not be applied in a refusal-to-bargain case
I recognize that the Board heretofore has not ordered
any additional relief in technical refusal-to-bargain cases
beyond the usual cease-and-desist and affirmative bargaining
order provisions. However, I am aware of no case, other
than the Preston and Saks cases cited by the Respondent
and which have been disucussed above, in which this ques-
tion has been presented. As stated above, there is nothing
in the Preston and Saks indicating that the Board has
seriously addressed itself to their problem. And, in my
opinion, the problem is a serious one I have been assuming,
and do assume, that the Respondent's challenge of the
Board's decision overruling the Respondent's objections
to the election is not based upon hostility to the collective-
bargaining process but upon a sincere desire to obtain
a review of what it regards as an erroneous ruling by
the Board.10
But the course which the Respondent has followed is
one which is open to all employers, including ones who
are opposed to collective bargaining in any event and who
calculate that the cost of litigating is more than offset
by the savings resulting from stalling the commencement
of bargaining for possibly 2 years, or more During this
period, assuming that the Court of Appeals ultimately
sustains the Board's actions in the representation case,
the National policy with regard to collective bargaining
has been wholly frustrated, and the employees have been
deprived of the fruits of the bargaining process. Employers
who willingly accept the collective-bargaining obligations
provided for in the Act are placed at a competitive disadvan-
tage with those who break the law. These results, in my
opinion, are completely antithetical to the purposes of the
Act and call for a remedy which will help restore the
situation to that which would have existed but for the
unfair labor practices.
Accordingly, I will incorporate in my recommended order
the compensation provision suggested above. The compensa-
tion shall be computed on a quarterly basis and shall
bear interest at 6 per cent, per annum.
My proposed compensation provision contemplates that
the compensation period will begin on the date on which
the Respondent first refused the Union's request for bargain-
'°I must admit that it is not without some question in my mind
that I make this assumption, particularly in view of the Respondent's
excursion into the United States District Court in an effort to obtain
an injunction restraining me from closing the hearing in this case This
was a factor causing part of the delay in this case However, I have
resolved my doubts in this regard in favor of the Respondent
ing conference, October 25, 1965. It may be suggested
that it is unreasonable to assume that the parties would
have been able immediately to reach a collective-bargaining
agreement, and that therefore some later date should be
adopted for the beginning of the compensation period,
in the event this provision is approved by the Board.
However, in view of the fact that the Respondent's express
refusal to bargain on October 25, 1965, was merely the
continuation of a policy adopted by it, certainly by January
1965, when it filed its Request for Review of the Acting
Regional Director's Supplemental Decision and Certification
of Representative, it appears to me not unreasonable to
adopt the October 25, 1965, date. Had the Respondent
accepted the Acting Regional Direstor's Supplemental Deci-
sion and Certificate of Representatives and commenced
bargaining in good faith soon thereafter, in the normal
course of events an agreement would probably have been
reached before October 25, 1965. To adopt a later date
for the commencement of the compensation period is to
put a premium on disobedience of the statutory policy
and unnecessarily to prolong the competitive disadvantage
suffered by law abiding employers who accept Board certifi-
cations without challenge.
Under the terms of this provision, if adopted by the
Board, it is possible that compensation will be due former
employees of the Respondent. Of course the entitlement
to such compensation will terminate as of the date of
their leaving the Respondent's employ. .
I will also include in my recommended order a preserva-
tion of records provision of the type customarily used
in backpay cases
CONCLUSIONS OF LAW
1. All production and maintenance employees at the
Respondent's Elwood, Indiana, plant, including tool crib
stores employees, shipping and receiving and followup
employees, but excluding all office clerical employees, plant
clerical employees, all professional employees, guards and
supervisors as defined in the Act, constitute a unit
appropriate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act.
2. On and at all times since October 25, 1965, International
Union, United Automobile, Aerospace and Agricultural
Implement Workers of America, UAW, AFL-CIO, has
been the exclusive bargaining representative of the employees
in the aforesaid collective-bargaining unit.
3. By refusing on and after October 25, 1965, to bargain
collectively with International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America,
UAW, AFL-CIO, as the exclusive bargaining representative
of the employees in an appropriate bargaining unit, the
Respondent has engaged in an unfair labor practice in
violation of Section 8(a)(5) and (1) of the Act
4. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7)`of the Act.
[Recommended Order omitted from publication]