Ferguson Enterprises, Inc.

National Labor Relations Board - Board Decisions

Mar 26, 2007

349 N.L.R.B. 617 (N.L.R.B. 2007)

FERGUSON ENTERPRISES, INC.
349 NLRB No. 57
617
Ferguson Enterprises, Inc. and General Teamsters
Local Union No. 162, International Brotherhood
of Teamsters. Cases 36–CA–9878, 36–CA–9894,
36–CA–9935, 36–CA–9952, and 36–CA–9992
March 26, 2007
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND KIRSANOW
The main issues in this case are whether the judge cor-
rectly found that the Respondent, Ferguson Enterprises,
Inc., violated Section 8(a)(5) and (1) of the Act by uni-
laterally implementing policies prohibiting employees
from taking home their truck keys and company-issued
cell phones, and by disciplining an employee for violat-
ing the truck key policy. For the reasons set forth below,
we affirm the judge’s findings as to the truck key policy
and the employee discipline, but reverse as to the cell
phone policy.1
I.
The Respondent is engaged in the wholesale distribu-
tion of plumbing fixtures, waterworks products, and
heating and air-conditioning systems throughout the
United States. On March 28, 2005, the Board conducted
a representation election among the Respondent’s drivers
at its facility in Portland, Oregon. The Union won the
election, and the parties began bargaining for an initial
contract about a month later. Negotiations continued
through December 9, 2005, at which time the Respon-
dent proposed its best and final offer.
The drivers engaged in a 2-day strike on January 17
and 18, 2006.2 When the drivers returned to work, the
Respondent’s general manager met with them and in-
structed them not to discuss the strike with customers.

1 On October 23, 2006, Administrative Law Judge John J. McCar-
rick issued the attached decision. The Respondent filed exceptions and
a supporting brief. The General Counsel filed an answering brief, and
the Respondent filed a reply brief.
The National Labor Relations Board has delegated its authority in
this proceeding to a three-member panel.
The Board has considered the decision and the record in light of the
exceptions and briefs and has decided to affirm the judge’s rulings,
findings, and conclusions as modified below and to adopt the recom-
mended Order as modified and set forth in full below.
We will modify the judge’s recommended Order to conform to the
violations found. Among other modifications, we will substitute a
limited bargaining order for the judge’s recommended affirmative
bargaining order, which is not necessary to remedy the Respondent’s
unlawful unilateral changes in terms and conditions of employment.
See, e.g., Mimbres Memorial Hospital, 337 NLRB 998 fn. 2 (2002). In
addition, as the judge found and as we discuss below, the Respondent
unlawfully implemented a new truck assignment policy, but it re-
scinded that policy a few days later. Thus, we will omit as superfluous
the judge’s remedy of requiring the Respondent to rescind that policy.
2 All dates are in 2006, unless otherwise noted.
On January 30, the Union requested further bargaining
dates, and the parties later resumed negotiations.
Before the strike, the drivers had been permanently as-
signed to specific trucks and had been permitted to take
home their truck keys and their company-issued cell
phones. Shortly after the strike the Respondent an-
nounced that drivers would no longer be permanently
assigned a truck and that they would receive their truck
assignments on a daily basis. The Respondent also told
drivers that they would have to turn in their keys and cell
phones each evening. The Respondent instituted these
changes without giving the Union notice or an opportu-
nity to bargain over the policies.3 On January 24, em-
ployee Scott Minard was issued a written warning for
failing to comply with the truck key policy.
II.
The judge found that the policies regarding truck as-
signments, truck keys, and cell phones constituted a ma-
terial change in terms and conditions of employment, and
that the Respondent’s unilateral implementation of the
policies violated Section 8(a)(5) and (1) of the Act. The
judge also found that the Respondent violated Section
8(a)(5) and (1) by disciplining employee Scott Minard
for violating the truck key policy. Finally, the judge
found that the Respondent violated Section 8(a)(1) by
prohibiting drivers from discussing the strike with the
Respondent’s customers.4
The Respondent has excepted to the judge’s findings
that it unlawfully implemented the truck key and cell
phone policies, and that it unlawfully disciplined Minard
for violating the truck key policy.5 The Respondent ar-
gues that the policies did not constitute a material change
in the working conditions of the drivers, and thus it was
not required to bargain with the Union prior to their im-
plementation. The Respondent further argues that be-
cause the truck key policy was lawfully implemented, it
did not violate the Act by disciplining Minard for his
failure to follow the policy. As discussed below, we find
merit in the Respondent’s arguments only with regard to
the cell phone policy.

3 The Respondent rescinded the new truck assignment policy after a
few days and returned to its previous practice of permanently assigning
trucks to drivers.
4 The judge dismissed allegations that the Respondent violated the
Act by telling employees they were not eligible for profitability bo-
nuses, by rescinding pay raises, and by refusing to bargain with the
Union in good faith. The General Counsel has not excepted to the
judge’s dismissal of these allegations.
5 The Respondent has not excepted to the judge’s finding that it vio-
lated the Act by prohibiting employees from talking about the strike
and by unilaterally implementing the truck assignment policy.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD618
III.
To establish that the Respondent’s unilateral imple-
mentation of the cell phone and truck key policies was
unlawful, the General Counsel must first demonstrate
that the policies constituted a substantial and material
change in terms and conditions of employment. Once
the General Counsel has done so, the Respondent bears
the burden of then showing that the changes were in
some way privileged. See, e.g., Fresno Bee, 339 NLRB
1214 (2003) (and cases cited therein).
Unlike the judge, we find that the General Counsel has
failed to establish that the implementation of the cell
phone policy resulted in a substantial and material
change in the drivers’ working conditions. The judge
found that the policy was a material change because it
affected the drivers’ ability to set up deliveries outside of
work hours. The record, however, does not support the
judge’s finding.
The only evidence proffered by the General Counsel
regarding the drivers’ use of cell phones was the testi-
mony of employee Cary Balogh. In response to the Gen-
eral Counsel’s question about how the policy affected the
way he did his job, Balogh testified that the cell phones
were useful because they allowed drivers to communi-
cate with the office, with customers, and with the other
drivers at any time. He also testified that drivers used
their phones to call customers in advance of deliveries.
When specifically asked whether he ever used his cell
phone after hours, Balogh stated that he “would get calls
from our customers after hours if they thought I had a
particular route I was doing, if they had a question about
it.”
Contrary to the judge, we find that Balogh’s testimony
does not establish that the implementation of the cell
phone policy affected the drivers’ ability to set up deliv-
eries during their off hours. Although Balogh’s testi-
mony indicates that drivers used the phones in setting up
deliveries, there is no specific evidence that drivers used
their company-issued cell phones to do so outside of
regular business hours. Further, there is no evidence that
would indicate that the drivers’ jobs were significantly
affected because customers could not reach them after
hours on their company-issued cell phone. Given this
lack of evidence, we find that the General Counsel has
failed to establish that the cell phone policy resulted in a
substantial and material change in the drivers’ working
conditions, and accordingly, we reverse the judge.6

6 Because the cell phone policy essentially limited the drivers’ abil-
ity to communicate with their customers, Member Liebman would find
that the policy resulted in a substantial and material change in working
conditions and would affirm the violation.
IV.
We agree with the judge that the implementation of the
truck key policy constituted a substantial and material
change in terms and conditions of employment, and that
the Respondent violated the Act by implementing the
policy without bargaining with the Union. In affirming
the violation, we find it unnecessary to rely on the
judge’s conclusion that the policy had a significant effect
on employee parking. Instead, we rely on the undisputed
evidence that an employee was disciplined for failing to
comply with the policy.
The truck key policy was instituted on January 20. On
January 24, driver Scott Minard was issued a written
warning for retaining a duplicate truck key and taking it
home between January 20 and 24. The warning stated
that Minard was subject to discharge if he continued his
behavior. There is no evidence that any employee had
been disciplined for taking keys home prior to the issu-
ance of the policy.
The Board has held that a threat of discipline for a
breach of a unilaterally implemented policy is sufficient
to establish that the policy constitutes a material change
in working conditions. See Postal Service, 341 NLRB
684, 687 (2004) (employer’s contention that unilaterally
implemented policy was not material was “belied by the
threat of discipline” for violating that policy); Flambeau
Airmold Corp., 334 NLRB 165, 166 (2001) (threat to
impose discipline on employees who failed to follow
new sick leave policy was sufficient to show that em-
ployer considered the policy to be significant). Here,
Minard was not merely threatened, but was actually dis-
ciplined for violating the truck key policy. Conse-
quently, we find that the truck key policy constituted a
substantial and material change in working conditions,
and that the unilateral implementation of the policy was
therefore unlawful.7
Because we find that the truck key policy was unlaw-
fully implemented, we find that Minard’s discipline,
which was issued pursuant to that policy, was also
unlawful. See Great Western Produce, 299 NLRB 1004,

7 Chairman Battista agrees that, under extant law, the Respondent’s
institution of the truck key policy constituted a material and substantial
change in the employees’ working conditions because it was enforced
with discipline. The Chairman has serious doubts about this precedent,
however. The precedent confuses a change in a working rule with the
discipline meted out for noncompliance with the new rule. Applying
that precedent, if there had been no discipline, the change itself would
not have been substantial. But, when one adds the relatively minor
discipline that was imposed (a warning), the change itself becomes
substantial. Chairman Battista would be inclined to evaluate separately
whether the change itself was substantial. However, as no party has
asked the Board to reconsider this line of cases, the Chairman joins his
colleagues in finding the violation.
FERGUSON ENTERPRISES, INC. 619
1005 (1990) (employer violates Sec. 8(a)(5) and (1) by
disciplining employees pursuant to unlawfully imple-
mented work rule). Accordingly, we affirm the judge’s
finding of the violation.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified and set forth in full below and orders that the
Respondent, Ferguson Enterprises, Inc., Portland, Ore-
gon, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Unilaterally changing existing terms and conditions
of employment for bargaining unit employees by imple-
menting policies regarding truck assignments, and by
implementing policies prohibiting employees from tak-
ing truck keys home.
(b) Disciplining employees for violating the truck key
policy.
(c) Prohibiting employees from discussing protected
activity with customers during business hours.
(d) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Rescind, at the request of the Union, the unilateral
change made by the Respondent regarding truck keys.
(b) Before implementing any changes in wages, hours,
or other terms and conditions of employment of unit em-
ployees, notify and, on request, bargain with the Union as
the exclusive collective-bargaining representative of em-
ployees in the following bargaining unit:
All full-time and regular part-time drivers employed
by the Respondent at its 2121 N. Columbia Blvd.,
Portland, Oregon location; but excluding warehouse
employees, temporary employees, guards and super-
visors as defined in the Act.
(c) Within 14 days from the date of this Order, rescind
the discipline issued to Scott Minard on January 24, 2006.
(d) Within 14 days from the date of this Order, remove
from its files any reference to the unlawful discipline of
Scott Minard, and within 3 days thereafter notify him in
writing that this has been done and the discipline will not
be used against him in any way.
(e) Within 14 days after service by the Region, post at
its facility in Portland, Oregon, copies of the attached no-
tice marked “Appendix.”8 Copies of the notice, on forms

8 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
provided by the Regional Director for Region 19, after
being signed by the Respondent’s authorized representa-
tive, shall be posted by the Respondent and maintained for
60 consecutive days in conspicuous places including all
places where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent to en-
sure that the notices are not altered, defaced, or covered by
any other material. In the event that, during the pendency
of these proceedings, the Respondent has gone out of
business or closed the facility involved in these proceed-
ings, the Respondent shall duplicate and mail, at its own
expense, a copy of the notice to all current employees and
former employees employed by the Respondent at any
time since January 20, 2006.
(f) Within 21 days after service by the Region, file with
the Regional Director a sworn certification of a responsi-
ble official on a form provided by the Region attesting to
the steps that the Respondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated Federal labor law and has ordered us to post and
obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your
behalf
Act together with other employees for your benefit
and protection
Choose not to engage in any of these protected ac-
tivities.
WE WILL NOT unilaterally change existing terms and
conditions of employment of our employees in a bargain-
ing unit by implementing policies regarding truck assign-
ments, and by implementing policies prohibiting employ-
ees from taking truck keys home.
WE WILL NOT discipline employees for violating the
truck key policy.
WE WILL NOT prohibit employees from discussing pro-
tected activity with customers during business hours.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights listed above.

ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD620
WE WILL rescind, at the request of the Union, the unilat-
eral change we have made.
WE WILL, before implementing any changes in wages,
hours, or other terms and conditions of employment of
unit employees, notify and, on request, bargain with the
Union as the exclusive collective-bargaining representa-
tive of employees in the following bargaining unit:
All full-time and regular part-time drivers employed
by us at our 2121 N. Columbia Blvd., Portland, Ore-
gon location; but excluding warehouse employees,
temporary employees, guards and supervisors as de-
fined in the Act.
WE WILL, within 14 days from the date of the Board’s
Order, rescind the discipline issued to Scott Minard on
January 24, 2006.
WE WILL, within 14 days from the date of the Board’s
Order, remove from our files any reference to the unlawful
discipline of Scott Minard, and WE WILL, within 3 days
thereafter, notify him in writing that this has been done
and the discipline will not be used against him in any way.
FERGUSON ENTERPRISES, INC.
Adam D. Morrison, Esq. and Lisa Dunn, Esq., for the General
Counsel.
Victor J. Kisch, Esq. (Stoel Rives, LLP), of Portland, Oregon,
for the Respondent.
Sara Drescher, Esq., of Beaverton, Oregon, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
JOHN J. MCCARRICK, Administrative Law Judge. This case
was tried in Portland, Oregon, on July 25 and 26, 2006, based on
the third order consolidating cases, second amended consolidated
complaint, and notice of hearing issued on July 10, 2006, by the
Regional Director for Region 19. The second amended consoli-
dated complaint alleges that Ferguson Enterprises, Inc. (Respon-
dent) violated Section 8(a)(1), (3), and (5) of the Act by promul-
gating and maintaining a rule prohibiting employees from dis-
cussing union activities with customers, by telling employees that
they were not eligible for profitability bonuses because they
chose to be represented by the General Teamsters Local Union
No. 162, International Brotherhood of Teamsters (Union), by
rescinding wage increases in retaliation for employees’ union
activities and without notice to or affording the Union an oppor-
tunity to bargain, by promulgating and maintaining a rule prohib-
iting employees from taking truck keys and cell phones home
without notice to or affording the Union an opportunity to bar-
gain, by implementing a new truck assignment policy without
notice to or affording the Union an opportunity to bargain, and by
failing and refusing to bargain in good faith with the Union.
Respondent filed a timely answer to the second amended con-
solidated complaint denying any wrongdoing.
On the entire record, including the briefs from the General
Counsel, the Union, and Respondent, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent admitted it is a Virginia corporation with facilities
located in Portland, Oregon, where it is engaged in the operation
of wholesale distribution of plumbing and related supplies. Dur-
ing the past 12 months, in the course of its business operations in
Portland, Oregon, Respondent purchased and caused to be
shipped to its Portland, Oregon facility goods valued in excess of
$50,000 directly from firms located outside the State of Oregon.
Based on the above, Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of the
Act.
II. LABOR ORGANIZATION
Respondent admitted and I find that the Union is a labor or-
ganization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
Respondent is engaged in the wholesale distribution of plumb-
ing fixtures, heating and air-conditioning systems, and water-
works facilities from over 1100 locations throughout the United
States where it employs 21,000 employees. Respondent has
collective-bargaining agreements with various unions at 45–50 of
its facilities. Respondent’s deputy general counsel is David
Meeker (Meeker). Meeker was Respondent’s chief spokesman
throughout bargaining with the Union. Respondent’s area logis-
tics manager is Peter Condon (Condon) who is responsible for
operating 27 of Respondent’s warehouses, including the facility
in Portland. Douglas Nelson (Nelson) is Respondent’s ware-
house manager in Portland. Greg Coultas (Coultas) is Respon-
dent’s warehouse shipping manager in Portland. Gregory Bur-
back (Burback) is Respondent’s general manager, responsible for
the operation of 14 facilities in the Portland area. Rob Conner
(Conner) was Respondent’s operations manager in Portland.
Respondent admitted that Meeker, Condon, Nelson, Coultas,
Burback, and Conner were agents of Respondent within the
meaning of Section 2(13) of the Act.
The Union was certified on April 1, 2005, as the exclusive col-
lective-bargaining representative of Respondent’s employees in
the following unit:
All full-time and regular part-time drivers employed by Re-
spondent at its 2121 N. Columbia Blvd., Portland, Oregon
location; but excluding warehouse employees, temporary
employees, guards and supervisors as defined in the Act.
Philip Muter (Muter) was the Union’s business agent and chief
spokesman during collective bargaining with Respondent.
A. The Alleged Work Rule Changes
1. The rule prohibiting employees from discussing union
activity with customers
a. The facts
After the bargaining unit drivers returned to work following
the January 17, 2006 strike, Respondent’s Portland general man-
ager, Burback, conducted a meeting on January 20, 2006, for all
unit drivers. During the meeting Burback said that he did not
FERGUSON ENTERPRISES, INC. 621
want drivers talking to Respondent’s customers about the strike.
Before the strike Respondent had no rules prohibiting drivers
from talking to its customers about nonbusiness subjects. While
Portland Warehouse Manager Nelson denied that Burback pro-
hibited drivers from communicating with customers or the media,
Burback’s notes prepared for the January 20 driver’s meeting
reflect that he discussed with drivers:
What our expectations were when site deliveries were made
and what we felt was acceptable to be communicated with
our customers as they are sure to inquire about the situation.
In a nutshell we discussed that during business hours the
only comment should be “no comment” and they should ask
customers (or anyone else for that matter, i.e., reporters) to
contact me for further clarification.1
I find that Burback specifically prohibited bargaining unit
drivers from discussing the strike with customers during business
hours.
b. The analysis
The Board has held that an employer violates Section 8(a)(1)
when it maintains a work rule that reasonably tends to chill em-
ployees in the exercise of their Section 7 rights. Lafayette Park
Hotel, 326 NLRB 824 (1998). In determining whether a chal-
lenged rule is unlawful, the Board must, however, give the rule a
reasonable reading and it must not presume improper interference
with employee rights. Lutheran Heritage Village-Livonia, 343
NLRB 646 (2004).
The work rule in this case prohibited employees from discuss-
ing protected activity, the strike, with customers during business
hours. Such a rule on its face limited employees from discussing
protected activity and was chilling of Section 7 rights. The rule
was not properly limited to working time but extended to em-
ployee break and lunchtime. Guardsmark LLC, 344 NLRB 809
(2005). Moreover, there is evidence that employees were free to
discuss other subjects not related to their protected activity with
customers during business hours. Teledyne Advanced Materials,
332 NLRB 539 (2000). I find that the rule prohibiting employee
discussion of the strike violated Section 8(a)(1) of the Act.
2. The rule prohibiting employees from taking home
cell phones, truck keys, and the new truck
assignment policy
a. The facts
For a number of years before the January 17, 2006 strike, bar-
gaining unit drivers were assigned to a specific truck and were
allowed to take their truck keys and company cell phones home
with them. Driver Balogh testified without contradiction that the
assignment to and knowledge of a specific truck shortened the
amount of time necessary to perform required safety inspections
of the truck. Also access to the company cell phones after hours
allowed drivers to communicate with customers regarding deliv-
ery requirements. After the strike on January 20, 2006, Burback
testified that he learned for the first time on January 20 that unit
drivers were taking cell phones and truck keys home. Burback
immediately ordered Nelson to cease this practice. Nelson ad-

1 R. Exh. 57.
mitted that he immediately wrote a notice to drivers prohibiting
them from taking their cell phones and truck keys home.
On January 24, 2006, unit driver Scott Minard (Minard) was
issued a written warning for taking a duplicate truck key home
between January 20 and 24, 2006.2
After unit drivers returned to work on January 20, 2006, Re-
spondent’s shipping manager, Coultas, told drivers that they
would no longer be assigned to a specific truck but that they
would be informed of their truck assignment each morning.
According to Respondent’s warehouse manager, Nelson, the
assignment of specific trucks was changed when Respondent
heard that driver Meador, who had crossed the picket line, had
missing truck keys and paperwork. The daily assignment to a
different truck lasted for a few days and Respondent returned to
the old policy of assigning drivers a specific truck.
The Union was given no notice of the changes to Respon-
dent’s policy regarding cell phones, truck keys, or assignment
to trucks.
b. The analysis
The Board has made clear that in order to constitute a uni-
lateral change that violates the Act, the employer’s action
must be a material, substantial, and significant change that
has a real impact on, or causes a significant detriment to, the
employees or their working conditions. Pan American
Grain Co., 343 NLRB 318 (2004). In Pan American Grain,
the judge found no violation and the Board affirmed that
requiring employees to sign a receipt for an overtime sched-
ule was part of a longstanding past practice of instructing
employees to acknowledge receipt of documents by signing
either the document itself or a separate acknowledgment
form.
In the instant case, the practice of assigning bargaining
unit drivers new trucks each day was a material change that
substantially affected the time required for employees to
inspect the truck. Requiring employees to turn in their cell
phones was also a material change since it affected bargain-
ing unit drivers’ ability to communicate with customers to
set up deliveries before and after working hours. By not
allowing drivers to take truck keys home, Respondent made
it more time consuming for drivers to park their personal
cars in the spot vacated by the truck they were using that
day.
Unlike the facts in Pan American Grain, supra, Respon-
dent’s changes to the practice of allowing drivers to take
home cell phones and truck keys and assigning specific
trucks was not grounded in a past practice. The new rules
affected employees terms and conditions of employment
and the failure to bargain over the changes violated Section
8(a)(1) and (5) of the Act. Moreover, the discipline issued
to Minard for violating this rule likewise was unlawful un-
der Section 8(a)(1) and (5). Great Western Produce, 299
NLRB 1004 (1990).

2 GC Exh. 80.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD622
B. The Profitability/Incentive Bonuses
1. The facts
According to unit driver Balogh, during the meeting with
unit drivers on January 20, 2006, Burback told drivers that they
would not be eligible for profitability bonuses but would con-
tinue to participate in safety bonuses. Nelson denied he heard
Burback discuss profitability or safety bonuses, however, Bur-
back could not recall if he said drivers could not participate in
profitability bonuses and admitted he told drivers they could
participate in safety bonuses. I credit Balogh and conclude that
Burback told drivers that they could not participate in profit-
ability bonuses.
2. The analysis
The Board has long held that an employer violates Section
8(a)(1) if it advises employees that it will withhold benefits
because of union activities. Invista, 346 NLRB 1269 (2006). In
Invista, the judge found that a supervisor informed employees
that there would be no more bonuses as long as the Union was
trying to get in. While the timing of Burback’s statement is
suspect as it occurred immediately after employees returned to
work after the strike, unlike the facts in Invista, there is no con-
nection between the statement and protected activity as Bur-
back did not state that the bonus was eliminated because of the
strike or any other protected concerted activity. I find that
Respondent did not violate Section 8(a)(1) of the Act by telling
employees they were not eligible for profitability bonuses.
C. The Wage Increases
1. The facts
On about September 24, 2005, Respondent gave unit drivers
a pay increase.3 In mid-October 2005, Burback held a meeting
with unit drivers and told them that the pay increase was a mis-
take and that the wage increase would be rescinded. Burback
notified Meeker of the pay error and on October 20, 2005
Meeker sent an e-mail4 to Muter concerning the pay mistake,
advising that it would be rescinded over two pay periods. All
of the bargaining unit drivers but Ronald Meador, who told
Respondent’s supervisors in December 2005 that he did not
support the Union, had their September 2005 pay increase re-
scinded by early November 2005. Meador continued to receive
the pay increase until May 2006. According to Burback, the
error in Meador’s pay occurred because the October 2005 list
of drivers he created who should have their pay increases re-
scinded erroneously omitted Meador. The error was com-
pounded when Burback verified his list of bargaining unit driv-
ers with the Union’s seniority list5 which also excluded
Meador.
2. The analysis
Counsel for the General Counsel contends Respondent vio-
lated Section 8(a)(1) and (3) of the Act in rescinding wage in-
creases for all bargaining unit drivers but the one driver who

3 GC Exh. 2.
4 R. Exhs. 24, 26; GC Exh. 79.
5 GC Exh. 4 at p. 3.
did not support the Union.
To establish a violation of Section 8(a)(3) of the Act counsel
for the General Counsel must establish the existence of pro-
tected activity, employer knowledge, and discrimination by the
employer motivated by the protected activity. Once the Gen-
eral Counsel has established this prima facie case, the burden
shifts to Respondent to establish that it would have taken the
action even in the absence of the protected activity. Wright
Line, 251 NLRB 1083 (1980).
It is clear that the Respondent’s driver’s engaged in union
activities that led to the certification of the Union as their col-
lective-bargaining representative. There is also evidence of
antiunion animus in the interrogation of bargaining unit em-
ployees during the organizing campaign. However, General
Counsel contends that the nature of the alleged discrimination
here is not that the drivers received a pay raise but that the raise
was rescinded for all those who supported the Union but not for
the one individual who opposed the Union. General Counsel’s
argument must fail because there is no evidence Respondent
had knowledge that Meador did not support the Union until
after the pay raises had been rescinded. While the pay raises
were rescinded in October 2005, Respondent did not have
knowledge Meador did not support the Union until December
2005. Moreover, it is apparent that both the general pay raise
to all drivers as well as the failure to rescind Meador’s raise
were the product of clerical errors rather than an intentional
effort to discriminate due to union or other protected activity. I
will dismiss this portion of the complaint.
D. Bargaining for the Initial Contract
1. The facts
a. The evidence of antiunion animus away from the bargaining
table
Prior to the March 28, 2005, Board-conducted election
among Respondent’s drivers, Peter Condon, Respondent’s area
logistics manager had a meeting with bargaining unit driver
Cary Balogh (Balogh). Condon asked Balogh if he knew who
brought the Union into the facility, how many people were
involved in bringing the Union into Respondent’s facility, if
Balogh were one of those who brought the Union into the facil-
ity, what Balogh’s position was on the Union and how Balogh
was going to vote. Condon denied asking employees about
their union activities or sympathies. I credit the testimony of
Balogh. Condon admitted that one of the purposes of this
meeting was to discover if there was union activity at Respon-
dent’s Portland facility. Given Condon’s purpose in meeting
with bargaining unit drivers, Balogh’s testimony concerning
interrogation would be reasonable.
Also before the Board-conducted election Respondent’s dis-
trict manager, Al Byrd (Byrd), had a one-on-one conversation
with unit driver Minard. It is uncontradicted that Byrd asked
Mindard if he had signed a union card.
During a meeting of bargaining unit drivers before the election
it is undisputed that Condon told drivers that they could end up
losing their 401(k) enhancement that the Company put in and that
the Union could not force him to pay the drivers $20 an hour.
FERGUSON ENTERPRISES, INC. 623
b. The bargaining sessions
On March 28, 2005, after the Board-conducted election but be-
fore the Union was certified as the bargaining representative of
Respondent’s Portland, Oregon drivers, Respondent’s deputy
general counsel, Meeker, contacted Union Business Agent Muter
in order to select dates to begin bargaining. After exchanging
calls, the initial bargaining session was scheduled for April 26,
2005, in Portland.
At the April 26, 2005 meeting the Union presented its initial
proposals.6 The Union’s proposals were based in part on an
agreement between Respondent and a teamsters’ local union
representing Respondent’s drivers in the southern California area,
Portland driver’s demands, and Respondent’s Portland policies.
Respondent commented on the Union’s proposals as the parties
went through them. Meeker told Muter that Respondent would
be bargaining from scratch in the Portland bargaining unit since it
was the first time Respondent was engaging in initial bargaining
in a newly certified bargaining unit. In all of Respondent’s other
facilities where employees were represented by a union, Respon-
dent had acquired a company with an extant bargaining relation-
ship.
Without offering a satisfactory explanation Respondent did not
submit its first counterproposal to the Union until the second
bargaining session on June 29, 2005.7 Respondent’s June 29,
2005 proposals included a management-rights article that stated:
ARTICLE 2–MANAGEMENT RIGHTS
Section 1. Functions. Except as limited by a specific
written provision of this Agreement, the employer retains
exclusively the right to manage its business and to direct its
associates including, but not limited to the following: to di-
rect, plan and control operations; to change existing meth-
ods and performance standards, materials, equipment, facili-
ties and accounting practices and procedures and/or to in-
troduce new or improved ones; to utilize supplies; to deter-
mine what products or services shall be distributed, or per-
formed, and to determine their design, marketing, advertis-
ing and pricing; to establish and change the hours of work
(including overtime work); to select and hire associates, de-
termine their training, assign them to work as needed (to
suspend, discipline and discharge associates for cause); to
make and enforce reasonable shop rules not inconsistent
with the provisions of this Agreement including the policies
of the Employer applicable to all associates as set forth in
the Policy Manual, and Safety Manual and other distribution
methods; and, to lay off and to relieve associates from duty
because of lack of work. The Employer shall [has] the right,
during the term of this Agreement, to utilize subcontractors
and to select and assign such duties as [it] deems appropriate
to supervisory, casual and temporary personnel and other
categories of associates to perform the work when needed.8
Respondent’s June 29, 2005 proposal concerning discharge
and discipline stated in pertinent part:

6 GC Exh. 4.
7 GC Exh. 5 and R. Exh. 4.
8 R. Exh. 4 at p. 2.
ARTICLE 15: DISCHARGE AND DISCIPLINARY LAY-
OFF
Driver associates shall be subject to discipline, suspen-
sion or discharge by the Employer pursuant to the policies
established by the Employer and applicable to all driver as-
sociates, to the extent not inconsistent with this Agreement.9
As reflected in the Union’s fax of July 18, 2005,10 at the June
29, 2005 bargaining session, the parties reached tentative agree-
ment (TA) on the following subjects: article 1–union security;
article 2–management rights, sections 2 and 3; article 5–leave of
absence, sections 2; article 8–hours of work and overtime, sec-
tions 7, 10, and 12; article 1–grievance and arbitration-sections 1,
2, and 3; article 13–union representatives: article 14–stewards;
article 17–jury duty, sections 1 and 2; article 18–no discrimina-
tion; article 20-successors and assigns; exhibit a–substance abuse
policy, and; exhibit b–attendance policy.
Meeker’s bargaining notes11 reflect that the parties deferred
discussions on article 2, section 1–management rights, article 3–
vacations, article 4–holidays, seniority, article 6–work protection,
article 7–wages and classifications, article 8–hours of work and
overtime, other than section 7, 10, and 12, article 9–tailgating,
article 10–health and welfare, articles 11 and 12–pension, article
13–strikes and/or picket lines, article 14–grievance and arbitra-
tion other than sections 1, 2, and 3, article 17–discharge and dis-
ciplinary layoff, article 18–funeral leave, article 2–uniforms,
article 22–transfer, and article 23–duration.
There was no agreement concerning the seniority provisions,12
Respondent’s right to subcontract,13 and discharge and disci-
pline.14
The next bargaining session took place on July 19, 2005. The
Union made a counterproposal15 to Respondent’s management-
rights clause. The essential change in the Union’s proposal was
to add the following language, “to suspend, discipline, and dis-
charge associates for cause.” Respondent rejected this proposal.
In addition, the Union proposed that the management-rights
clause be modified to eliminate Respondent’s unlimited right to
subcontract unit work and to have bargaining unit work per-
formed by management. The Union’s language states, “The
Employer shall have the right, during the term of this Agreement,
to utilize subcontractors as long as all bargaining unit members
are working or were scheduled to work. Management may per-
form bargaining unit work in emergencies.”16 This proposal was
rejected by Respondent but as reflected in Meeker’s bargaining
notes there was TA on the following language, “Management
may perform bargaining unit work when bargaining unit associ-
ates are not immediately available.”17 In addition there were
TA’s on article 6–sick leave, sections 1 and 2, and article 8–
workweek, section 1.

9 Id. at 15.
10 GC Exh. 8.
11 R. Exh. 4.
12 GC Exh. 4, p. 3.
13 GC Exh. 5, p. 2.
14 Id. at p. 15.
15 GC Exh. 7.
16 Id.
17 R. Exh. 9, p. 2.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD624
The fourth bargaining session took place on August 10, 2005.
At this session the Union discussed its counterproposals faxed to
Respondent on July 22, 2005, regarding uniforms, management
rights, sick leave, physical examinations, and grievance and arbi-
tration.18 Meeker’s notes confirm that the parties agreed on the
management-rights language dealing with Respondent perform-
ing bargaining unit work.19 There was a TA on physical exami-
nations. The parties discussed seniority, overtime, and tailgating.
Respondent rejected the concept of utilizing seniority and insisted
on merit as the determining factor for layoffs, recalls, promo-
tions, filling job vacancies, and other terms and conditions of
employment. The Union demanded overtime after 8 hours. Re-
spondent rejected this proposal and insisted on overtime after 40
hours. Tailgating union proposal at article 9, the practice of
sending additional employees on delivery trucks to assist in
unloading was tentatively agreed on at this session.
On August 18, 2005, Meeker canceled a session scheduled for
August 24, 2005, and he suggested meeting the week of Septem-
ber 12 or 19.20 On September 16, 2005, Meeker proposed meet-
ing on September 29 and October 11–14, 2005.21 Muter agreed
to October 11–14, 2005.22
Bargaining session five took place on October 13, 2005. Un-
ion Executive Assistant Denny Whitkopp (Whitkopp) attended
this session and during the meeting, according to Meeker’s bar-
gaining notes,23 Whitkopp declared impasse on the subjects of
vacation, subcontracting, seniority, and discipline. Whitkopp
said that without agreement on seniority a joint conference board
for resolution of grievances, and the Union’s proposals for the
management-rights clause there could be no contract. Meeker’s
notes and testimony reflect that he then agreed to the Union’s
proposal for a joint conference board and that the subjects left
without agreement were leave, strikes, wages, health and welfare,
pension, and the Teamster’s 401(k).24 Muter did not recall if
there was a TA regarding the joint conference board. Both Ba-
logh, a member of the union bargaining committee and Muter
denied that the parties agreed to grievance and arbitration lan-
guage. I credit Meeker’s testimony over that of Muter and Ba-
logh. Both Muter and Balogh’s memory of bargaining sessions
was characterized by lack of recollection and lack of detail re-
garding specific topics of bargaining. On the contrary Meeker’s
testimony concerning bargaining sessions was both explicit and
detailed. Moreover, Meeker’s bargaining notes are consistent
with his testimony concerning subjects of bargaining and specific
agreements reached while the Union’s bargaining notes are
sketchy and lack detail.
On October 21, 2005, Respondent submitted a counterpro-
posal.25 From Meeker’s October 13, 2005 e-mail26 to Muter, it is
clear this counterproposal was not intended to be a final offer.
Consistent with Meeker’s bargaining notes of October 13, 2005,

18 R. Exh. 12.
19 Id. at p. 2.
20 GC Exh. 32.
21 GC Exh. 33.
22 Id.
23 R. Exh. 20.
24 Id. at p. 2.
25 GC Exh. 10.
26 GC Exh. 39.
the Respondent’s October 21, 2005 counterproposal dealt with
the subjects of sick leave, overtime, uniforms, management
rights (subcontracting), seniority, discipline, vacations, tailgate,
strikes, wages, health and welfare, pensions, and 401(k) plan.
On November 15, 2005, Muter requested additional dates for
bargaining.27 Again on November 21, 2005, Muter said the
Union was available for bargaining on December 6, 8, and 13–
15.28
A sixth bargaining meeting was held on December 8, 2005.
The Union made counterproposals regarding sick leave, hours
of work and overtime, uniforms, management rights, seniority,
strikes, health and welfare, wages, pension, and 401(k) plan.
The Union amended its opening wage proposal of $18, $18.75,
and $19.50 per hour in the first, second, and third years of the
contract to $18.50, $19, and $19.50 per hour. The Union’s
proposed management-rights language amended the last sen-
tence of article 2, section 1 to read, “The Employer shall have
the right, during the term of this Agreement, to utilize subcon-
tractors to the same extent as permitted prior to the effective
date of this agreement and management and other associates of
the Employer may perform bargaining unit work when bargain-
ing unit associates are not immediately available.”29 Meeker’s
bargaining notes reflect that he added to the Union’s manage-
ment-rights proposal language that granted Respondent the
“absolute and unlimited” right to subcontract to the same extent
permitted before “the commencement of any union activity.”30
There was no agreement on the subcontracting language.
However, it is clear from Meeker’s bargaining notes that a TA
was reached on sick leave, uniforms, vacations, and tailgate
delivery.31
On December 9, 2005, Respondent proposed its last, best,
and final offer.32 Respondent’s final offer reflected all TAs that
had been reached to date together with those items where there
was no mutual agreement. Respondent’s offer regarding wages
reflected that CDL drivers would earn from $15 to $17.50 per
hour and non-CDL drivers would earn from $12.50 to $15 per
hour. At this time Respondent’s bargaining unit drivers, with
the exception of Meador who made $17.50 an hour, earned
from 15.26 to 16.60 per hour.33
The Union struck Respondent on January 17 and 18, 2006.
All employees returned to work on January 20, 2006.
On January 31, 2006, Muter advised Meeker that the Union
requested further dates for bargaining and that he would not be
available February 5–10, 2006.34 On February 15, 2006,
Meeker responded that Respondent would not be available for
bargaining until the week of March 20, 2006.35
The seventh bargaining session took place on March 22,
2006. At this bargaining meeting Muter said that he did not
understand the form of Respondent’s final offer of December 9,

27 GC Exh. 44.
28 GC Exh. 45.
29 GC Exh. 11.
30 R. Exh. 42.
31 Id.
32 GC Exh. 12.
33 GC Exh. 2.
34 GC Exh. 57.
35 GC Exh. 58.
FERGUSON ENTERPRISES, INC. 625
2005, as it made reference to too many other documents. Ac-
cordingly, Respondent redrafted its final offer in contract
form.36
On March 23, 2006, Muter requested bargaining take place
April 3, 4, 7, and 17–21, 2006.37
The eighth bargaining meeting took place on April 18, 2006,
where the Union made a presentation concerning its pension
plans and explained the differences between the Western Con-
ference of Teamsters Pension and the Central States Pension
plans. Respondent was concerned about its liability if it agreed
to participate in under funded Teamsters Pension Plans. The
Union admitted that both Teamsters Pension Plans were under-
funded. There was no agreement on pension language.
The parties met for bargaining a ninth time on April 19,
2006. At this session the parties discussed seniority. There
were proposals and counterproposals made regarding this sub-
ject.38
At the 10th bargaining session on May 24, 2006, the parties
discussed health and welfare and pension language with no
agreement. The next day at the final bargaining session pension
was again discussed and according to Muter there were no
agreements. However, Meeker’s bargaining notes reflect that
the parties had TAs on grievance and arbitration, joint confer-
ence board, discharge, funeral leave, transfer, and work protec-
tion.39
As of July 25, 2006, the parties had TAs with respect to nu-
merous provisions of the proposed collective-bargaining
agreement.40 The outstanding issues were subcontracting, sen-
iority, wages, health and welfare, pension, no strike, no lockout,
and picket line.
2. The analysis
Section 8(d) of the Act defines the duty to bargain collec-
tively as “the performance of the mutual obligation of the em-
ployer and the representative of the employees to meet at rea-
sonable times and confer in good faith with respect to wages,
hours, and other terms and conditions of employment . . . but
such obligation does not compel either party to agree to a pro-
posal or require the making of a concession.” Good-faith bar-
gaining “presupposes a desire to reach ultimate agreement, to
enter into a collective-bargaining contract.” NLRB v. Insurance
Agent’s Union, 361 U.S. 477, 485 (1960. “The Board’s task in
cases alleging bad-faith bargaining is the often difficult one of
determining a party’s intent from the aggregate of its conduct.”
Reichhold Chemicals, 288 NLRB 69 (1988); Flying Foods, 345
NLRB 101, 118 (2005). “From the context of an employer’s
total conduct, it must be decided whether the employer is en-
gaging in hard but lawful bargaining to achieve a contract that
it considers desirable or is unlawfully endeavoring to frustrate
the possibility of reaching agreement.” Public Service Co. of
Oklahoma (PSO), 334 NLRB 487 (2001).
The Board has held that while insisting on a bargaining posi-

36 GC Exhs. 13 and 14.
37 GC Exh. 62.
38 GC Exh. 16.
39 R. Exh. 93.
40 R. Exh. 96.
tion is not itself evidence of a refusal to bargain in good faith,
other conduct may be indicative of a lack of good faith includ-
ing delaying tactics, unreasonable bargaining demands, unilat-
eral changes in mandatory subjects of bargaining, efforts to
bypass the union, failure to designate an agent with sufficient
bargaining authority, withdrawal of already agreed-upon provi-
sions, and arbitrary scheduling of meetings. Atlanta Hilton &
Tower, 271 NLRB 1600 (1984).
Counsel for the General Counsel contends that Respondent
has engaged in surface bargaining by insisting on a broad man-
agement-rights proposal that grants Respondent unlimited right
to subcontract unit work, by engaging in regressive bargaining
with respect to the subcontracting clause, by insisting on a dis-
charge article with no just cause provision, by requiring a no-
strike clause without arbitration, by proposing regressive wage
provisions and by failing to meet at reasonable times all sup-
ported by Respondent’s antiunion animus.
It is not unlawful for an employer to propose and bargain for
a broad management-rights clause. St. George Warehouse,
Inc., 341 NLRB 904 (2004); Commercial Candy Vending Divi-
sion, 294 NLRB 908 (1989). In those cases where the Board
found surface bargaining broad management-rights clauses
were accompanied by regressive bargaining, no-strike provi-
sions, absence of meaningful arbitration, discharge provisions
giving the employer unfettered ability to discipline without
regard to just cause, essentially leaving employees less than
they would enjoy by simply relying on the certification
without a contract. Public Service Co. of Oklahoma, 334
NLRB 487 (2001); Target Rock, 324 NLRB 373 (1997);
Western Summit Flexible Packaging, 310 NLRB 45 (1993).
Contrary to counsel for the General Counsel’s assertion, I
find no evidence of regressive bargaining. With respect to
the subcontracting language Meeker added that Respon-
dent’s right to subcontract would be “absolute and unlim-
ited” this language was only a clarification of what Respon-
dent had already proposed, i.e., subcontracting of bargaining
unit work without limitation. Moreover, Respondent’s
wage offer was not regressive. It represented an increase in
pay over extant wages earned by bargaining unit drivers.
As noted above, the pay increase granted drivers in Septem-
ber 2005, a unilateral change during the course of bargain-
ing was remedied immediately by restoring the status quo.
Respondent’s broad management-rights clause was not
without limitation. Respondent’s right to discharge and
discipline was limited by a just cause provision contained in
the management-rights clause. Further, contrary to counsel
for the General Counsel’s contention, I find that Respondent
agreed to neutral arbitration as well as submission of griev-
ances to a joint conference board.
Last while there were only 11 bargaining sessions over a
15-month period, Respondent never refused to meet after
the Union proposed dates for bargaining sessions. Over the
course of 15 months of bargaining there were cancellations
of meetings by both sides, there were delays in bargaining
caused by a strike, by an initial delay in submission of Re-
spondent’s counterproposals and by the Union’s failure to
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD626
respond to Respondent’s last, best, and final offer. I find no
pattern by Respondent in delaying bargaining or refusing to
meet at reasonable times.
While it is clear that Respondent engaged in hard bargain-
ing, there was no evidence that Respondent engaged in a
plan to avoid reaching agreement. There was give and take
by both parties during the course of negotiations Thus, there
were agreements reached by the parties on many items in-
cluding sick leave, uniforms, vacations, and tailgate delivery,
sections 2 and 3 of the management-rights clause, section 2 of
the leave of absence provision, sections 7, 10, and 12 regarding
hours of work and overtime, grievance and arbitration union
representatives, stewards, jury duty, no discrimination, succes-
sors and assigns, substance abuse policy, attendance policy,
discharge, funeral leave, transfer, and work protection. Sig-
nificant concessions were made by Respondent with respect
to union security and arbitration, including submission of
disputes to a joint conference board.
The record reflects that there was give and take on the is-
sue of subcontracting with a TA on management’s right to
perform bargaining unit work. There were proposals and
counterproposals on the issue of subcontracting with the
Union proposing that Respondent could subcontract to the
same extent it did prior to the certification. While Respon-
dent insisted upon its own pension program, it provided a
reasoned basis for refusing to joint the Teamster’s Western
Conference Pension Plan. It was admitted by the Union that
the Western Conference Pension Plan was under funded
which could result in unfunded liability for Respondent.
Respondent took the position that it did not want to partici-
pate in an unfunded pension plan.
With respect to conduct by Respondent away from the
bargaining table, I have found above that Respondent inter-
rogated its employees concerning their union activities be-
fore the election on March 28, 2005, that Respondent im-
plemented an overly broad no-solicitation rule and that Re-
spondent engaged in unilateral conduct in implementing
new work rules regarding truck assignments, truck keys, and
cell phones. Conduct away from the bargaining table is a
factor the Board considers in determining if there has been a
refusal to bargain. In those cases where the Board has
found a refusal to bargain, the conduct away from the bar-
gaining table is much more egregious that that found here.
Significantly the Board has found surface bargaining where
there have been “smoking gun” statements made by manag-
ers including statements that the employer had no intent of
reaching an agreement. U.S. Ecology Corp., 331 NLRB 223
(2000); Western Summit Flexible Packaging, 310 NLRB 45
(1993). In this case, Respondent’s conduct away from the
bargaining table, while unlawful and chilling of employee
Section 7 rights, does not evidence intent to engage in sur-
face bargaining. Further, Respondent’s statements before
the election that the drivers could lose the employer contri-
bution to their 401(k) plan and that the Union could not
force Respondent to pay the drivers $20 an hour were only
factual statements that did not suggest an intent by Respon-
dent to avoid their obligation to bargain in good faith. St.
George Warehouse, Inc., supra.
I find that Respondent did not violate Section 8(a)(5) of the
Act by refusing to bargain in good faith with the Union by en-
gaging in surface bargaining. I will recommend that this por-
tion of the complaint be dismissed.
CONCLUSIONS OF LAW
1. Ferguson Enterprises, Inc. is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
2. General Teamsters Local Union No. 162, International
Brotherhood of Teamsters is a labor organization within the
meaning of Section 2(5) of the Act.
3. Respondent has engaged in conduct in violation of Section
8(a)(1) and (5) of the Act by unilaterally changing work rules
that prohibited employees from taking home cell phones, truck
keys, and assigning designated trucks, by disciplining employee
Scott Minard for taking home truck keys and by promulgating a
rule prohibiting employees from discussing protected activities
with customers during business hours.
4. Respondent has not violated the Act in any other respect
and the remaining complaint allegations are dismissed.
5. The above are unfair labor practices affecting commerce
within the meaning of Section 2(6), (7), and (8) of the Act.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I shall recommend that it be ordered to
cease and desist and to take certain affirmative action designed
to effectuate the purposes of the Act. I shall order the Respon-
dent to bargain with the Union as the exclusive collective-
bargaining representative of its employees in the following
described unit and on request by the Union meet and bargain in
good faith:
All full-time and regular part-time drivers employed by Re-
spondent at its 2121 N. Columbia Blvd., Portland, Oregon lo-
cation; but excluding warehouse employees, temporary em-
ployees, guards and supervisors as defined in the Act.
[Recommended Order omitted from publication.]