Ferguson-Steere Motor Co.

National Labor Relations Board - Board Decisions

Mar 22, 1955

111 N.L.R.B. 1076 (N.L.R.B. 1955)

1076 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
No question has been raised concerning the propriety of recommending that the
remedy extend to General Dynamics Corporation, successor of the original re-
spondent, but in view of the Board's decision in Symns Grocer Co., and Idaho Whole-
sale Grocery Co., 109 NLRB 346, it will be well to differentiate this case. It is unnec-
essary to decide whether a distinction should be drawn between an assignee, as in that
case, where there was a severance of the business sold from that retained by the
respondent, and a successor, as in this, where the respondent merges in a new cor-
poration and continues as a division of the successor corporation, because here the
successor, General Dynamics Corporation expressly assumed all of the obligations
of Consolidated Vultee Aircraft Corporation. This would include the collective-
bargaining agreement made on February 1, 1954. The new agreement continued
in effect a portion of the illegal language of the prior agreement as heretofore found.
Hence, to that extent, the successor, General Dynamics Corporation, will merely be
remedying its own unfair labor practice. Furthermore, General Dynamics Corpora-
tion, by its own motion to be substituted as respondent in place of Consolidated
Vultee Aircraft Corporation, acquiesced in the issuance of any remedial order
against itself.
Since it has been found that the Union caused the Company discriminatorily to
discharge Pense for reasons other than his failure to tender the requisite dues and
initiation fees in violation of the Act, I shall recommend that the Union notify the
Company and Pense that it withdraws any and all objections it may have to the
reinstatement of Pense with his previous seniority and other rights and privileges,
and that it will not again request his discharge for a reason other than his failure
to tender the requisite dues and initiation fees (including reinstatement fees). I
will further recommend that the Union make Pense whole for any loss he may
have suffered as a result of the discrimination caused by the Union by paying to
him a sum of money equal to that which he would have earned in his employ with
the Company but for the discrimination against him, from January 15, 1954, to
5 days after the receipt of notification by the Company and Pense that it has with-
drawn its objection to his reinstatement as aforesaid, less his net earnings elsewhere,
if any, during that period.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. The Union is a labor organization within the meaning of Section 2 (5) of
the Act.
2. By maintaining in effect a union-security provision in a contract requiring that
employees who, on leaving the bargaining unit were members of the Union, should,
on reemployment in the unit, again pay dues, whether or not they are then mem-
bers of the Union, and without providing the statutory period of 30 days in which
to become members as a condition of employment, (a) the Company has engaged
in unfair labor practices within the meaning of Section 8 (a) (1) and (3) of the
Act; and (b) the Union has engaged in unfair labor practices within the meaning of
Section 8 (b) (1) (A) and (2) of the Act.
3. By causing the Company to discharge Pense discriminatorily within the mean-
ing of Section 8 (a) (3) of the Act, the Union has engaged in unfair labor practices
within the meaning of Section 8 (b) (1) (A) and (2) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication.]
FERGUSON - STEERE MOTOR COMPANY and LOCAL UNION No. 577, INTER-
NATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS , WAREHOUSE-
MEN AND HELPERS OF AMERICA , AFL. Case No. 16-CA-721. March
2 ,1955
Decision and Order
On October 21,1954, Trial Examiner Sidney L. Feiler issued his In-
termediate Report in the above-entitled proceeding, finding that the
111 NLRB No. 181.
FERGUSON-STEERE MOTOR COMPANY 1077
Respondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the copy of the Inter-
mediate Report attached hereto. Thereafter, the Respondent filed
exceptions to the Intermediate Report.
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Interme-
diate Report, the exceptions, and the entire record in this case and
hereby adopts the Trial Examiner's findings and conclusions to the
limited extent that they are consistent with our Decision and Order
herein.
The salient facts in this case are not disputed. On February 8, 1952,
the Respondent and the Union executed a 2-year contract, effective
that date. Section 1 of the agreement provided for automatic renewal
of the contract for biannual periods "unless either Party gives writ-
ten notice of a desire to modify, amend, or terminate same at least sixty
(60) days prior to the yearly effective date of this Agreement." Sec-
tion 2 then provided :
In the event notice of a desire to modify or amend is given, the
Party giving such notice shall .simultaneously submit to the other
Party in waiting its desired amendments and the other party shall
have twenty (20) days thereafter to submit in writing its desired
amendments or counterproposals. [Emphasis supplied.]
On December 5, 1953, Mitchell, the Union's business agent, sent a
letter to the Respondent's president, Steere, advising the Respondent
that the Union desired to revise the existing agreement and requesting
a meeting at which time the specific revisions would be presented. The
timeliness of the notice is not in dispute. On December 12, 1953,
Steere instructed Mitchell to arrange a meeting with Respondent's
counsel, who were authorized to conduct its negotiations. Mitchell im-
mediately telephoned the Respondent's attorneys, explained the re-t-
son for his call, and stated he was ready to present his proposals. As
a result of this conversation, a meeting was scheduled for January 4,
1954. At this meeting, the Respondent for the first time took the posi-
tion that the existing contract had been automatically renewed by the
Union's failure to submit its proposed revisions simultaneously with
the submission of its notice on December 5, as required under the con-
tract. By letter dated January 11, 1954, Respondent's counsel reit-
erated to the Union their position respecting the contract's renewal
and advised that, if the Union's position in the matter was at variance
with the Respondent's, the Respondent would file a declaratory judg-
ment suit in the Federal courts to have the issue adjudicated. Such a
suit was filed on January 13, 1954.
1078 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On January 18, 1954, the Respondent again wrote the Union stating
that it would negotiate with the Union "under reservation of rights;
that is, with the specific understanding that in the event the Court
determines that your contract with Ferguson- Steere Motor Company
has been renewed in its present form, any negotiated agreements as to
amendments or modification of the old contract would be of no fur-
ther force or effect." On January 20, 1954, the Union filed the instant
charge.
On January 27, 1954, another conference took place between the
parties during which the possibility of a compromise was discussed.
At the conclusion of the meeting , the Respondent sent the Union a let-
ter in which it expressed its belief that the declaratory judgment suit
might be settled . In anticipation of such settlement, the Respondent
offered to execute a 2-year contract containing certain increases in the
rate of pay on a mileage basis and other allowances . The Respondent
indicated , however, that in the event a settlement could not be achieved,
it was preserving its right to pursue its remedy in the declaratory
judgment action . At a conference on February 1, 1954, the Union
rejected the Respondent 's settlement offer.
On February 5, 1954 , the Union advised the Respondent that the
employees would accept certain rates then being paid by another em-
ployer . This the Respondent rejected. On the same day, the Union
moved the Federal district court to dismiss the declaratory judgment
suit on the ground that the court lacked jurisdiction , which motion
was denied on March 26, 1954. On February 9, 1954, the Union tele-
phoned the Respondent and suggested that the parties meet with the
Federal judge to dispose of all issues between the parties. The Re-
spondent questioned the orthodoxy of such a procedure and no agree-
ment on this proposal was reached . On February 15, 1954, the Union
and the Respondent met at which time the Union suggested various
changes in the existing agreement . These were rejected by the Re-
spondent as being beyond its ability to pay. No further bargaining
conferences took place after date . On August 24, 1954, the Federal
district court dismissed the Respondent 's declaratory judgment suit
on the merits , finding that the contract had not been automatically re-
newed as the Respondent contended . In its exceptions , the Respond-
ent indicated that it has perfected an appeal from the Federal district
court's dismissal of its suit.
The Trial Examiner, like the Federal court in the declaratory judg-
ment proceeding , found that the Respondent 's conduct subsequent to
the receipt of the Union notice letter on December 5, 1953, consti-
tuted a waiver of any defect which might have inhered in the Union's
notice and effectively forestalled the automatic renewal of the agree-
ment. He therefore found that the Respondent was under a statutory
FERGUSON-STEERE MOTOR COMPANY 1079
duty to bargain with the Union and that the Respondent failed to
discharge that duty by conditioning the effectiveness of any new
agreement upon the outcome of the declaratory judgment suit. As the
issue of whether the contract has been automatically renewed is pres-
ently before a Federal court for adjudication, and it is unnecessary
to decide this issue to dispose of this case, we do not pass upon it. The
Respondent here did in fact bargain and we do not believe that the
Respondent violated Section 8 (a) (5) of the Act by its insistence
that the continued effectiveness of any new agreement be conditioned
upon the result of its declaratory judgment action.
The record discloses, and the Trial Examiner apparently found,
that the Respondent entertained a genuine doubt as to whether its cur-
rent agreement with the Union had been automatically renewed. In
its attempt to resolve this doubt, the Respondent in good faith re-
sorted to a remedy afforded it under the Declaratory Judgment Act
and sought an adjudication of this issue in the Federal courts. The
Respondent's entire course of conduct subsequent to the filing of the
declaratory judgment suit indicates no purpose to delay or otherwise
impede the bargaining relationship into which the parties had pro-
jected themselves. They convened on several occasions after the fil-
ing of the suit to discuss the subject matter of the Union's proposals.
By its letter of January 18, 1954, the Respondent agreed that it would
effectuate the terms of any new agreement reached between the par-
ties pending the outcome of the declaratory judgment action. In fact,
by its letter of January 27, 1954, the Respondent offered to withdraw
its suit and submitted certain counterproposals respecting wage rates
to the Union.
Viewing the entire record in this proceeding, we believe that the
Respondent's good-faith insistence that the ultimate effectiveness
of any new agreement which it might execute with the Union be con-
ditioned upon a Federal court's determination as to whether their ex-
isting contract had been automatically renewed did not constitute such
an impediment to the collective-bargaining process as to warrant the
conclusion that it thereby violated Section 8 (a) (5) of the Act. Ac-
cordingly, as we find that the Respondent fulfilled its statutory duty
to bargain with the Union, we shall dismiss the complaint in its
entirety.
[The Board dismissed the complaint.]
MEMBER PETERSON, dissenting :
I would sustain the Trial Examiner's finding that the Respondent
violated Section 8 (a) (5) of the Act by conditioning the continued
effectiveness of any new agreement upon the outcome of its declara-
tory judgment action.
1080 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Trial Examiner found that the Union's notice was sufficient to
prevent the automatic renewal of the contract, holding that the clause
requiring simultaneous submission of proposed amendments was
promissory in character and did not create a condition precedent to
the effectiveness of the notice to amend. Moreover, he found-in
agreement with the Federal district court which rejected the Respond-
ent's contention in the declaratory judgment action that the old con-
tract had renewed-that any defect in the Union's notice was waived
by the Respondent's conduct. I think he is right on both counts,
from which it follows that the contract was not renewed. My ma-
jority colleagues, however, find it "unnecessary to decide this issue"
of renewal.
I am at a loss to understand how we can avoid deciding whether the
contract renewed itself. If it did not, clearly the Respondent, by
offering a conditional agreement, was doing less than the statute com-
mands. It was refusing to sign a binding contract for a fixed period
embodying whatever terms might be agreed upon. If the Respondent
was wrong, as I think it was, in its legal position that the contract
had renewed, then I fail to see how its position is improved by the
filing of a suit to have the contractual rights of the parties declared.
That the Respondent was within its legal rights to bring the court
action, I concede; but I am unwilling to hold in addition that by so
doing its duty to bargain collectively became less than when it first
advanced the view that the contract had renewed. As I see it, the
Respondent here took the risk of being wrong in its construction of
the legal effect of the Union's notice to amend and of its own subse-
quent action. Having chosen to persist in that error by bringing suit
to have its theory upheld, the Respondent should not be rewarded by
now being exonerated of its unlawful refusal to bargain.
Intermediate Report and Recommended Order
STATEMENT OF THE CASE
Upon a charge filed by Local Union No. 577, International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of America, AFL, herein called the
Union, the General Counsel of the National Labor Relations Board 1 by the Re-
gional Director for the Sixteenth Region (Fort Worth, Texas), on June 21, 1954,
issued a complaint against Ferguson-Steere Motor Company, herein referred to as
the Respondent or the Company, alleging that the Respondent had engaged in or
was engaging in unfair labor practices within the meaning of Section 8 (a) (1) and
(5) and Section 2 (6) and (7) of the National Labor Relations Act, as amended,
61 Stat. 136, 65 Stat. 601, herein called the Act. Copies of the charge, complaint,
and notice of hearing were served upon the other parties to the proceeding.
With respect to unfair labor practices the complaint alleges in substance that from
on or about January 4, 1954, the Respondent refused and at all times thereafter has
continued to refuse to bargain collectively with the Union as the duly designated
collective-bargaining representative of the employees of the Respondent in an appro-
' The term General Counsel as used herein includes the attorney representing the Gen-
eral Counsel at the hearing ; the National Labor Relations Board is referred to as the
Board.
FERGUSON-STEERE MOTOR COMPANY 1081
priate unit. The Respondent in its answer dated June 25, 1954, admits certain juris-
dictional allegations, denies the commission of any unfair labor practices; alleges that
at the time the alleged refusal to bargain took place there was a dispute between the
Union and the Respondent as to whether an existing contract between the parties
had been automatically renewed and that the Union had no right to request the
Respondent to bargain with respect to changes or modifications in that contract.
The answer further alleges in substance that the Respondent offered to bargain with
the Union reserving its rights to claim that the aforesaid contract had been auto-
matically renewed, that bargaining did take place between the parties, and that the
Respondent did not refuse to bargain collectively with the Union.
Pursuant to notice a hearing was held at Amarillo, Texas, before the duly desig-
nated Trial Examiner. All parties were represented at the hearing and were afforded
full opportunity to be heard and to examine and cross-examine witnesses. At the
conclusion of the presentation of the evidence the General Counsel moved to con-
form the pleadings to the proof as to formal matters. This motion was granted as
to all pleadings without objection. The Respondent moved to dismiss the complaint
on the ground that it had not been established that it had been guilty of any unfair
labor practices. Decision was reserved on this motion and it is disposed of by the
findings and recommendations which follow. Opportunity was then afforded for oral
argument but oral argument was waived by all the parties. Opportunity was also
afforded for the filing of briefs and proposed findings of fact or conclusions of law
or both. Briefs were received from all the parties.
Upon the entire record, and from his observation of the witnesses, the Trial Ex-
aminer makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent is a Texas corporation having its principal office and place of busi-
ness in Dallas, Texas. It also maintains terminals at Amarillo, Texas, and Artesia,
New Mexico. The Respondent is now and has been at all times herein mentioned
continuously engaged at such places of business in the transportation of gasoline
and petroleum products.
The Respondent in the course and conduct of its business operations at its Amarillo
terminal , the one principally involved in these proceedings, during the past 12-
month period, which period is representative of all times material hereto, trans-
ported gasoline and petroleum products in interstate commerce for certain large
companies receiving for said services in excess of $1,000,000. The said companies
receiving those services did business in interstate commerce outside the State of
Texas during the same period of time valued in excess of $10,000,000.
The Respondent concedes that it is engaged in interstate commerce within the
meaning of the Act and the Trial Examiner so finds.
II. THE LABOR ORGANIZATION INVOLVED
Local Union No. 577, International Brotherhood of Teamsters , Chauffeurs, Ware-
housemen and Helpers of America, AFL, is a labor organization within the mean-
ing of the Act.
III. THE REFUSAL TO BARGAIN
A. Sequence of events
The basic issue in this case is whether the Respondent was obligated to bargain
with the Union concerning modification of a collective-bargaining contract and if so
whether there was such collective bargaining on the part of the Respondent accord-
ing to the requirements of the Act. The basic facts and background are not in
dispute. These, according to a stipulation entered into by the General Counsel and
the Respondent at the hearing, are as follows:
On or about August 19, 1951, a majority of the Respondent's employees at its
Amarillo terminal in a unit described as "all drivers including loaders, exclusive of
office and clerical, garage and professional employees, guards, watchmen and super-
visory employees" designated the Union as their collective-bargaining representa-
tive. At all times since that date the Union has continued to be the representative
of employees in the above unit which it is agreed is an appropriate unit within the
meaning of the Act.
On February 8, 1952, the Respondent and the Union entered into a 2-year bargain-
ing agreement . The provisions dealing with the duration of the agreement, a matter
directly in issue here, are as follows:
1082 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ARTICLE XXII
DURATION
Sec. 1. This Agreement signed on this 8 day of February, 1952, shall become
immediately effective and shall remain in full force and effect for a period of
two (2) years. At the end of said two years and at the end of each two years
period thereafter, this Agreement shall be renewed automatically for periods of
two (2) years unless either Party gives written notice of a desire to modify,
amend or terminate same at least sixty (60) days prior to the yearly effective
date of this Agreement.
Sec. 2. In the event notice of a desire to modify or amend is given, the Party
giving such notice shall simultaneously submit to the other Party in writing its
desired amendments and the other party shall have twenty (20) days thereafter
to submit in writing its desired amendments of counter proposals.
Sec. 3. Negotiations concerning modifications or amendments of this Agree-
ment shall begin not later than fifteen (15) days after the receipt of the notice
of desire to modify or amend. During the negotiations, this Agreement shall re-
main in full force and effect except that it may be terminated by either Party if
at the end of the sixty day period no agreement has been reached.
Sec. 4. In the event that one Party serves a notice of a desire to terminate
in accordance with this Article and the other party serves a notice of a desire
to modify or amend in accordance with this Article, negotiations concerning
said modifications or amendments shall be undertaken as provided in Sec. 3 of
this Article. During said negotiations this Agreement shall continue in full
force and effect unless at the end of the sixty (60) day period no agreement has
been reached by the parties.
On or about December 5, 1953, Maurice Mitchell, secretary-treasurer and busi-
ness agent of the Union, sent a letter to Bruce Steere, president of the Company, at
its office in Dallas, Texas, in which he stated that the Union desired to continue the
existing agreement but also wished to revise or change certain terms or conditions.
He further stated: "Our representatives will be pleased to meet you or your repre-
sentatives at a mutually satisfactory time and place, at which time we shall inform
you of the specific terms or conditions concerning which we desire to negotiate."
This letter was received at Mr. Steere's office on December 8, 1953, and was read
by him when he returned to his office from a trip on December 12, 1953 (the Re-
spondent does not raise any issue as to the timeliness of the notice of modifications
but does place reliance on the fact that the desired amendments were not submitted
simultaneously with this notice).
On December 12, Steere replied to Mitchell's letter stating:
In response to your letter dated December 5, 1953, I suggest that you or your
representative contact Mr. Bill Gibson and Mr. George Cramer who will handle
collectively the negotiations for the Ferguson-Steere Motor Company.
Mitchell telephoned W. W. Gibson, of counsel to the Respondent, the person re-
ferred to in Steere's letter, for the purpose of arranging a meeting. They were un-
able to agree on a date earlier than January 4, 1954. At the January 4 meeting Gib-
son advised the Union that the Company did not feel that it was required to bargain
at that time because the contract had not been properly reopened pursuant to the du-
ration clause because of the failure of the Union to submit its desired amendments si-
multaneously with the giving of notice of its desire to modify the bargaining agree-
ment and therefore it was the Respondent's position that the contract had renewed
itself for 2 years. This was the first time that the Respondent made this contention
known to the Union. On January 11, 1954, Gibson affirmed the Company's position
in a letter to Mitchell. This letter is as follows:
By letter dated December 5, 1953; you notified Mr. Bruce Steere of Dallas,
Texas, of your desire to continue your existing contract. We assume and have
so interpreted your letter that you had reference to the contract entered into on
the 8th day of February, 1952, by and between The General Drivers, Ware-
housemen and Helepers Local Union No. 577 and the Ferguson-Steere Motor
Company, Amarillo Terminal. In your letter you also stated that you desired
to revise or change certain terms or conditions for the coming year.
Section 2 of Article XXII of the contract provides that in the event notice
of a desire to modify or amend is given that the party giving such notice shall
simultaneously submit to the other party in writing its desired amendments and
that the other party shall have twenty days thereafter in which to submit in
FERGUSON-STEERE MOTOR COMPANY 1083
writing its desired amendments or counter proposals. Section 1 of the same
Article of the contract provides that the agreement shall be renewed automati-
cally for a period of two years unless either party gives written notice of a desire
to modify, amend, or terminate same at least sixty days prior to the yearly effec-
tive date of the agreement. Section (d) of Article 158 of Title 29 of the United
States Code Annotated, as interpreted by us, likewise requires a written notice
of the proposed modification of the contract sixty days prior to the expiration
date.
In your letter of December 5, you specifically gave notice of your desire to
continue the existing contract, and you also mentioned that you desired to revise
or change certain terms or conditions for the coming contract year; but you did
not comply with the provisions of Section 2 which required that you simulta-
neously submit in writing the desired amendments.
After considerable research, we have concluded that the contract has been
renewed for a period of two years from February 8, 1954, under the automatic
renewal provision of the contract. We have found a number of cases holding
that where a contract reserves the right to rescind or amend the contract and
also prescribes the mode in which such right shall be exercised or that certain
specific acts shall be done by the party desiring to amend, that the terms of the
contract must be strictly followed, and the party desiring to amend or rescind
the contract cannot accomplish his purpose in any other mode nor without com-
plying with the conditions of the contract.
On January 4, 1954, you presented to us a proposed new contract which you
stated at the time was the amendments you desired to make to the present con-
tract. We have carefully examined this contract which is a contract between
the carrier and Local Union No. 577, Amarillo, Texas, Local Union No. 941,
El Paso, Texas, and Local Union No. 583, Abilene, Texas, of the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers. There is
very little, if any, similarity between this contract and the contract now in ex-
istence between Local Union No. 577 and the Ferguson-Steere Motor Company.
We do not see how, under any stretch of the imagination, this document could
be considered an amendment of your existing contract with Ferguson-Steere
Motor Company.
We stated to you on January 4, 1954, that we at that time were of the opin-
ion that you have not complied with the provisions of the contract necessary
to allow the contract to be amended and that the contract has been renewed
for a period of two years from February 8, 1954. After further consideration
of the matter, we are still of the same opinion and so advise you.
Please advise us, at your earliest convenience, as to your interpretation of the
matter. If you do not agree with us that the contract has been renewed for a
period of two years, then we propose to file a declaratory judgment action to
construe the contract in connection with Section (d) of Article 158, Title 29
of the United States Code Annotated which provides that no party shall modify
the contract unless the party desiring to modify gives a written notice upon the
other party to the contract of the proposed modification sixty days prior to the
expiration date of the contract. This course of action will necessarily incur a
great deal of delay and expense; but under the circumstances, we deem such a
course of action necessary in order to determine the rights of the parties.
On January 13, 1954, the Respondent brought suit in the United States District Court,
Northern District of Texas, Amarillo Division, for a declaratory judgment adjudicat-
ing its contract rights and obligations with the Union. The Company requested a
decree finding that the contract entered into between the Company and the Union
had been extended for a period of 2 years and was not open for modification or
amendment. Notwithstanding the pendency of the suit for a declaratory judgment,
Gibson sent a letter to Mitchell on January 18, 1954, in which he reviewed the
existing situation and stated that the Company would enter into further negotiation
only on certain conditions. This letter is as follows:
Since you received our letter of January 11, 1954, in regard to the Ferguson-
Steere Motor Company contract, you have conferred with us about the matter.
During that conference you stated that you desired to make a new contract, and
would like to commence negotiations immediately.
We, at that time, told you that you had not complied with the notice provi-
sions of the contract and that in our opinion the contract had been renewed for
a period of two years. We further stated to you that we, as attorneys for
Ferguson-Steere Motor Company, intended to file a declaratory judgment action
to construe the contract. We further advised you that after we filed the declara-
1084 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tory judgment action and pending disposition of the case by the Court, that if
you insisted on negotiating as to a new contract, or as to amendments or modi-
fication of the existing contract, that we would negotiate with you under reserva-
tion of rights; that is, with the specific understanding that in the event the Court
determines that your contract with Ferguson-Steere Motor Company has been
renewed in its present form, any negotiated agreements as to amendments or
modification of the old contract would be of no further force or effect.
You further stated to us that if we filed a declaratory judgment suit you did
not desire to negotiate with Ferguson-Steere Motor Company during the pend-
ency of such action. As we have filed the declaratory judgment suit, we assume
that you no longer desire to negotiate.
With further reference to negotiation we, of course, would want you to spe-
cifically understand that we would in no way by such negotiation waive any
right that Ferguson-Steere Motor Company may have under the existing con-
tract, neither would such negotiation in any way prejudice the plaintiff or in any
way affect the declaratory judgment action.
The Company has not receded from the position set forth in the last paragraph
of the above letter and it is the position of the General Counsel and the Union that
this offer to negotiate was a limited one and did not fulfill the requirements for full
collective bargaining pursuant to the Act.
The Union filed its charge in the present proceeding on January 20, 1954.
A conference took place between company and union representatives on Jan-
uary 27, 1954. After this conference and on the same day Gibson sent the following
letter to Mitchell:
At a conference held on this date between you, Mr. Jim Rhodes and Mr.
Mark Hays representing the drivers and the undersigned and Mr. George
Cramer representing the employer, it appeared that it might be possible to settle
the law suit which has recently been filed by the Company in Federal Court
seeking an interpretation of the contract between you and Ferguson-Steere
Motor Company. Looking toward the settlement of this controversy, on behalf
of Ferguson-Steere Motor Company we propose the following:
1. To execute a new contract for a period of two years beginning on February
8, 1954. Said contract to be the same as the contract now in existence except
that Appendix A will be changed to read according to the enclosed draft.
2. If this proposal is accepted by you and the new contract is entered into as
proposed, the suit which was recently filed by Ferguson-Steere will be dismissed
at their costs.
3. If we are not able to reach an agreed settlement of the controversy, then this
and all other attempts between us to settle the case shall be without prejudice
to the rights of either party.
You will note that from the attached copy of a redraft of Appendix A that
we propose to increase the rate of pay for loaded miles driven from 7 cents to
71 cents; the rate of pay for trips to Borger or Sheerin, Texas from $5.00 to
$5.50 the rate of pay for trips to Texas Company plant at Amarillo from the
local terminal from $1.50 to $1.75 per trip.
The change in rates which the Company was proposing was formulated in the pro-
posed appendix attached to Gibson's letter. The Union rejected this offer at a con-
ference on February 1, 1954. On or about February 5, 1954, the Union through
its attorneys filed a motion to dismiss the declaratory judgment action pending in
the Federal court. On March 26, 1954, Honorable Joseph B. Dooley, district judge,
issued his decision denying the motion to dismiss.2 On August 24, 1954, Judge
Dooley issued his decision in which he found that the contract had not been auto-
matically renewed for an additional term of 2 years as contended by the Company.
On September 10, 1954, judgment was issued dismissing the case on the merits.
Maurice Mitchell, secretary-treasurer and business manager of the Union, gave
further details on the negotiations between the Union and the Company .3
Mitchell testified that on December 2, 1953, he telephoned A. H. Crossett, vice
president of the Company , at its Amarillo office, told him that he had a proposal
that the union members had approved and wanted to show it to him since Crossett
O The Union was in general agreement with the above items which had been stipulated
to by the General Counsel and the Company. It reserved the right to offer evidence in
amplification or explanation of the negotiations which had taken place between the parties.
8 Mitchell 's testimony , in the main, was undenied and is credited unless the contrary is
indicated.
FERGUSON-STEERE MOTOR COMPANY 1085
had signed the existing contract on behalf of the Company . Crossett suggested he
write a letter to Bruce Steere, president of the Company, at his office in Dallas saying
that if Steere wanted him to conduct the negotiations he would do so. Mitchell then
wrote to Steere on December 5. The letter and Steere's reply of December 14 have
been referred to in the prior section of this report. Mitchell telephoned Gibson, as
Steere suggested, and a meeting was arranged for January 4, 1954. Mitchell, in
the course of the conversation, stated that he was ready to present a proposal.
Clarence Mandoiza , International representative , headed the union delegation
which met with Gibson on January 4. Mandoiza presented a draft contract. Gib-
son objected that the proposed contract named as parties the Company, Local No.
577, and two other locals. Gibson stated he wanted to bargain only with Local No.
577. This was agreed to. Then Gibson raised the point that the contract between
the Union and the Company had not been properly reopened for negotiation of
modifications and was automatically renewed for a period of 2 years. He refused
to enter into bargaining negotiations at the meeting, but agreed to state the Company's
position in writing within 10 days. On January 11, Gibson sent a letter outlining
the Company's stand.
It is undisputed that the Union did not present a written proposal until the January
4 meeting and that the Company at that meeting first raised the issue that the failure
to relay these proposals at the time the notice was sent resuled in an automatic re-
newal of the contract.
Continuing his testimony, Mitchell stated that the day after the January 4 meet-
ing he telephoned Steere at his Dallas office. His summary of what was said is as
follows:
And I related to him by telephone what happened. I told him about our
meeting the day before in Mr. Gibson's office, who informed us that they thought
the contract was open, was closed for two years and it was valid, and he says,
"Now, Mitch, you know me better than that." He says, "You go on back to
Amarillo." Says, "you are not uneasy about me not negotiating a contract, are
you?"
I says, "Mr. Steere, I am not uneasy, but you have sixty-some odd employees
up there that are very unhappy."
He says, "Mitch, you know me well enough and we have been doing business
and that-letter that I wrote-" he didn't say letter-"I meant just exactly what
I said . We will negotiate a contract . You go on back and have no fear but
what the contract want [sic] be negotiated."
And I said, "Mr. Steere, can I rely on that?" And he said, "You know we
have got along." And that was all that was said and we conversed and I hung
up and came back to Amarillo.
Mitchell and his negotiating committee next met with company representatives on
January 13. Gibson and George Cramer, vice president of the Company, were its
representatives.
Gibson reiterated his previously announced position that the contract had been
renewed for an additional term, but offered to enter into negotiations with a reserva-
tion of rights voiding any agreements made by the parties if his position were estab-
lished as correct .4 No progress was made on actual negotiations.
At a meeting several days later Gibson and Mitchell had an angry interchange
over the filing of the declaratory judgment suit already referred to. Mitchell took
the position that the Company was not acting in good faith.
On January 27, the parties discussed the possibility of a compromise. It was
agreed that the Company was to submit its proposal. This was done and the Com-
pany's proposal was mailed to Mitchell . The proposal called for some adjustment
in mileage rates and other allowances . This proposal came up for consideration
in a bargaining conference on February 1. Mitchell informed Gibson and Cramer
that the union members had rejected the proposal. Then, according to Mitchell, he
asked whether the Company had any further offer. Gibson declared, "This is it,
you can take it or leave it." When Mitchell asked whether that was final, Gibson
turned to Cramer and asked, "Is that right?" Cramer nodded and Gibson said,
"That's it." There were no further bargaining sessions, Mitchell testified, just tele-
phone conversations. He spoke with Steere over the telephone after the February
* The findings as to the negotiations at this and later meetings are based on the testi-
mony of both Mitchell and Cramer . Except on one point these witnesses were not in dis-
agreement . The Trial Examiner has relied chiefly on Cramer's testimony on the confer-
ences as being more accurate and detailed.
1086 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1 meeting and asked him to meet with a union delegation , but Steere refused stating
that all negotiations were in the hands of Gibson and Cramer.
Mitchell also testified that he spoke with Cramer over the telephone about Febru-
ary 5 and told him the men would accept the rates paid by another company, but
Cramer rejected that proposal as unreasonable.
Cramer denied that company representatives took the position at the February 1
conference that the offer of the Company was its final offer. His version was that
Mitchell asked whether the offer was the best the Company had for the union nego-
tiators, either Gibson or Cramer replied that it was, whereupon Mitchell stated there
was no further use in talking.
It is not necessary to resolve this conflict in testimony since it is clear from
Cramer 's credited testimony that there were further meetings between Mitchell and
Cramer . On February 9, Mitchell telephoned Cramer and suggested they meet
with the judge who was then considering the declaratory judgment suit and seek
to dispose of all outstanding issues between the parties. This plan was dropped.
On February 15, Mitchell and Cramer met face-to -face, the former suggesting
nine contract changes which Cramer rejected as out-of-line with existing conditions
and the Company 's ability to pay. There were no further bargaining meetings after
that.
It is undisputed that throughout these negotiations , the Company made a reserva-
tion of rights as outlined in Gibson 's letters.
B. Contentions of the parties; conclusions
There are three legal issues:
1. Was the notice given by the Union to the Company sufficient to prevent the
automatic renewal clause of the contract from taking effect?
2. If the notice was defective , was there a waiver by the Company and an election
to proceed with collective -bargaining negotiations?
3. If there was an obligation on the part of the Company to bargain with the
Union , did it perform this obligation within the meaning of the Act , particularly in
view of its reservation of rights in all the negotiations?
1. The sufficiency of the notice
As to the first issue , the sufficiency of the notice sent by Mitchell to Steere, this
involves an interpretation of article XXII , the "Duration" provisions of the con-
tract. It is clear that the Union complied with section 1 of the contract and gave
timely notice of a desire to amend the contract within the time limit required. How-
ever, section 2 of article XXII provides ". . . the Party giving such notice shall
simultaneously submit to the other party in writing its desired amendments. .
[Emphasis supplied .] This, the Union did not do, and the Respondent argues that
the failure to do so was fatal . In efiect, it argues that this provision was a condition
which had to be strictly complied with before the Respondent came under any
obligation to bargain concerning modifications of the existing contract.
The General Counsel and the Union argue, in substance that this requirement
is a promise , not a condition , and that the failure to submit proposals at the time
the notice was given might have given rise to a right to proceed for a remedy for
a breach of contract , but did not absolve the Respondent from living up to its
obligations under the contract.
There is a general presumption that words are promissory rather than that they
create a condition of duty.5 The following language in the restatement on contracts
is applicable here:
"Where it is doubtful whether words create a promise on an express condition,
they are interpreted as creating a promise ; but the same words may sometimes mean
that one party promises a performance and that the other party's promise is condi-
tioned on that performance " ( par. 261). The purpose of the requirement of the sub-
mission of proposed amendments by the party wishing such modifications is also indi-
cated in section 2 at article XXII for it is provided ". . . the other party shall have
twenty ( 20) days thereafter to submit in writing its desired amendments of counter
proposals ." The Respondent was not under any obligation to submit its counter-
proposals until the Union first presented its requests . Also, as provided in section 3
of article XXII , negotiations on modifications were to commence within 15 days
after receipt of the notice to amend, the contract was to remain in force and effect
5 Corbin on Contracts , v. 3, p 530-32, Williston on Contracts ( Revised Ed ), v. 3 p.
1909-11.
FERGUSON-STEERE MOTOR COMPANY 1087
during negotiations, but either party could terminate the contract if agreement had
not been reached within 60 days.
The Trial Examiner concludes that that notice sent by the Union clearly indi-
cated that it wished to negotiate amendments to the contract and was sufficient to
prevent the automatic renewal of the contract.° It is further concluded that the
requirement for the submission of proposed amendments was promissory in nature
and not a condition necessary for fulfillment exactly on time to prevent the auto-
matic renewal of the contract.?
The Respondent, therefore, was under an obligation to bargain with the Union
concerning amendments to the contract.8
2. The waiver of any defect in the notice
Even though the notice sent by the Union to the Company may have been defec-
tive because it did not include the proposed contract changes, the contention has
been made that there was a waiver of any defect. The Company contends that no
waiver can be found in Steere's letter to Mitchell designating representatives "who
will handle collectively the negotiations for the Ferguson-Steere Motor Company."
It contends (1) there was definitely no conscious intention on his part to waive
any existing right that the Respondent might have; (2) the contract had already been
renewed by failure to give the required notice within 60 days, and (3) the contract
having been already renewed there was no right in existence at the time the letter
was written which could have been waived by said notice.
The Trial Examiner does not agree with these contentions. Rather, the Trial
Examiner is in full agreement with the following language taken from the opinion
in the aforementioned declaratory judgment proceeding:
This controversy arises in a setting of management-labor relations, and in
that environment "negotiate" and "negotiations" are words of frequent use and
well understood meaning, as descriptive of collective bargaining in action. The
contract in question, in Article XXII, speaks of "negotiations" set in motion by
notice of proposed modifications, or amendments of the contract. The Union's
notice letter of December 5, 1953, refers to "our existing contract," and also
the desire for revisions and changes therein, and then states the readiness to
arrange a meeting between respective representatives, "at which time we shall
inform you of the specific terms or conditions which we desire to negotiate."
The Company, in its reply letter of December 12, 1953, suggests that the Union
contact Mr. Gibson and Mr. Cramer "who will handle collectively the negoti-
ations for the Ferguson-Steere Motor Co." Thus, the contract and the two let-
ters all speak the same language, either in the word "negotiate," or the word
"negotiations," and I see no reason to doubt that such language was used with
a common intent each time, which focused on the known desire of the Union
for collective bargaining as to modifications and amendments of the contract.
The Company's letter contained no intimation of any exception to the Union's
notice, either from the standpoint of being untimely, or deficient. Instead, the
Union's move for collective bargaining was given fresh impetus by the concur-
rence of the Company, and apparently the stage was all set to begin such ses-
sions between the respective representatives. Thus the thing stood for several
weeks without any challenge from the Company to the Union. Then, finally,
the Company declared the position now maintained in this law suit.
"Paterson Parchment Paper Co v. International Brotherhood of Paper Makers, 191 F.
2d 252 (C A 3), cert denied 342 U S 933.
1In this connection, it should be noted that performance exactly on time is not gener-
ally considered of the essence of a contract, Corbin on Contracts, v. 3, par. 713, pps
795-800
8 The case of Oct Workers International Union, Local No 463 v Texoma Natural Gas Co ,
142 F. 2d 62 (C A 5), cert denied 324 U. S. 872, 325 U. S 893, cited by the Respondent
in its brief, deals with a situation different from that in the instant case In the Texbma
case, a contract gave either party the option of permitting automatic renewal or of termi-
nating the agreement at yearly intervals. It was found by the Court that one of the
parties attempted, by notice, to keep the contract alive and yet keep it open for the nego-
tiation of amendments. It was held that under these circumstances there had been no
termination of the agreement and that it had been automatically renewed
In the instant case the Union had the right to give notice of an intention to negotiate
modifications of the existing agreement and it did so
1088 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The field of waiver is rather broad. On the face of it, the Company's letter
of December 12, 1953, has all the earmarks of a typical waiver. No objection is
registered because the proposed modifications and amendments were not sub-
mitted in writing by the Union, along with its notice letter of December 5,
1953. Seemingly, that was no impediment in the estimation of the Company.
No reason is seen why the Company could not have made such an effective
waiver. Some pertinent cases are McCue v. Collins, 208 S. W. 2d, 652, and
Farmers & Mechanics National Bank v. Head, 7 S. W. 2d, 61.
It is true there can be no waiver without an adequate knowledge of the rel-
evant facts, either actual or constructive, and it is said that the president of the
Company may have been forgetful of the terms in the contract emphasized in
this suit. I do not believe that is a tenable theory. The Union's notice letter
directed the attention of the president of the Company specifically to "our ex-
isting contract," and there is no room to doubt that said president was surely
aware that the respective letters exchanged had their roots in said contract.
He must be presumed to have had all the pertinent provisions of the contract
in mind . Southern Ry. Co. v. People, 228 Fed. 853.
Any doubt as to whether Steere was acting with full knowledge of the facts is
dispelled by Mitchell's undenied and credited testimony that after the January 4
meeting when he told Steere of Gibson's position Steere told him that the Company
would negotiate a new contract. It is true that Steere, according to Mitchell, later,
in effect, repudiated his prior statement and told Mitchell that Gibson and Cramer
had full authority and he would not deal with Mitchell, but the Trial Examiner finds
that there had been a full and effective waiver previously.9
In view of the above finding it is unnecessary to examine the contentions that the
conduct of the Respondent in arranging for the January 4 meeting and failing to raise
its objections until January 4 further evidenced a waiver of any defect in the notice.
3. The conditional offer to bargain
On January 18, 1954, counsel for the Company wrote Mitchell confirming certain
statements that had been made in a prior conference. The following excerpts from
the letter are pertinent at this point:
We further advised you that after we filed the declaratory judgment action
and pending disposition of the case by the Court, that if you insisted on nego-
tiating as to a new contract, or as to amendments or modification of the exist-
ing contract, that we would negotiate with you under reservation of rights; that
is, with the specific understanding that in the event the Court determines that
your contract with Ferguson-Steere Motor Company has been renewed in its
present form, any negotiated agreements as to amendments or modification of
the old contract would be of no further force or effect.
With further reference to negotiation we, of course, would want you to spe-
cifically understand that we would in no way by such negotiation waive any right
that Ferguson-Steere Motor Company may have under the existing contract,
neither would such negotiation in any way prejudice the plaintiff or in any way
affect the declaratory judgment action.
It is undisputed that the Company maintained this position throughout its negoti-
ations with Mitchell up to and including the hearing herein. It also is undisputed
that representatives of the Respondent met with Mitchell and did discuss contract pro-
posals, but under the aforementioned reservation of rights. The question presented
as to these negotiations is whether by such negotiations the Respondent was fulfilling
its duties and obligations under the Act.
The Union was the duly designated collective-bargaining representative of a ma-
jority of the Respondent's employees in an appropriate unit. The Respondent there-
fore was obligated to bargain in good faith with the Union pursuant to Section 8
(a) (5) of the Act. This duty included the obligation "to meet at reasonable times
and confer in good faith with respect to wages, hours, and other terms and condi-
tions of employment, or the negotiation of an agreement, or any question arising
thereunder, and the execution of a written contract incorporating any agreement
reached if requested by either party. . " It has been found that the Company
was obligated to bargain with the Union concerning modifications of the existing
contract. The Union requested such negotiations. The Company expressed will-
9 General Motors Corporation, United Motors Service Division, 85 NLRB 254. See also,
Winter Stamping Company, 107 NLRB 14; Paducah Battery Company , 88 NLRB 32.
FERGUSON-STEERE MOTOR COMPANY 1089
ingress to enter into negotiations, but its offer was conditional. It was unwilling to
negotiate a binding agreement. It was unwilling to enter into a written contract with
the Union. Its offer was conditional on the outcome of pending litigation. Until
the final conclusion of the litigation, it was unwilling to make any binding agreement
with the Union. In taking this position, it was refusing to accord to the Union its full
rights under the Act. It is not material, in this connection, that the Respondent
was not motivated by bad faith. The question here is a question of law-according
to the collective-bargaining representative of employees, its full rights under the Act.
Good faith does not excuse such a violation of the Act.'° Accordingly, it is found
that the Respondent by offering to bargain with the Union only under certain con-
ditions and restrictions, violated Section 8 (a) (5) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection with the operations described in section I, above, have a close, intimate, and
substantial relation to trade, traffic, and commerce among the several States, and tend
to lead to labor disputes burdening and obstructing commerce and the free flow of
commerce.
V. THE REMEDY
Having found that the Respondent has engaged in certain unfair labor practices it
will be recommended that it cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act.
It has been found that the Respondent in violation of the Act, failed and refused
to bargain collectively with the Union as the duly designated collective-bargaining
representative of its employees in an appropriate unit. It will be recommended that
the Respondent cease and desist from such activity and on request bargain collec-
tively with the Union.
Upon the basis of the foregoing findings of fact, and upon the entire record in the
case, the Trial Examiner makes the following:
CONCLUSIONS OF LAW
1. The Respondent, Ferguson-Steere Motor Company, is engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act.
2. Local Union No. 577, International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, AFL, is a labor organization within the
meaning of Section 2 (5) of the Act.
3. All drivers, including loaders, of the Respondent employed at its Amarillo ter-
minal , exclusive of office and clerical, garage, and professional employees, guards,
watchmen, and supervisory employees, constitute a unit appropriate for the purposes
of collective bargaining within the meaning of Section 9 (b) of the Act.
4. The aforementioned Union was at all times material and now is the exclusive
representative of the employees in said unit for the purposes of collective bargaining
within the meaning of Section 9 (a) of the Act.
5. By refusing on January 4, 1954, and at all times thereafter, to bargain collec-
tively with the Union as the exclusive representative of its employees in the appro-
priate unit the Respondent has engaged in and is engaging in unfair labor practices
within the meaning of Section 8 (a) (5) of the Act.
6. By such activity the Respondent has also violated Section 8 (a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices within the mean-
ing of Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication.]
10 General Motors Corporation , 81 NLRB 779, 781, enfd 179 F. 2d 221 (C. A. 2) ; Boss
Manufactaninq Company, 11 NLRB 432, 443, enfd as mod 107 F. 2d 574 (C A 7).
Appendix A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor Rela-
tions Board, and in order to effectuate the policies of the National Labor Relations
Act, we hereby notify our employees that:
WE WILL NOT refuse a request to bargain collectively with Local Union No.
577, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and
1090 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Helpers of America, AFL, as the exclusive representative of all employees in
the bargaining unit described below with respect to grievances , labor disputes,
rates of pay, wages , hours of employment, and other conditions of employment.
The bargaining unit is:
All our drivers, including loaders, employed at our Amarillo terminal ex-
clusive of office and clerical , garage, and professional employees, guards,
watchmen , and supervisory employees.
WE WILL NOT in any like or related manner interfere with, restrain , or coerce
our employees in the exercise of their right to self-organization , to form or join
labor organizations , to bargain collectively through representatives of their
own choosing , and to engage in concerted activities for the purpose of collec-
tive bargaining or other mutual aid or protection as guaranteed in Section 7
of the Act or to refrain from any or all of such activities except to the extent
that such right may be affected by an agreement requiring membership in a
labor organization as a condition of employment as authorized in Section 8 (a)
(3) of the Act.
WE WILL upon request bargain collectively with the above -named Union as
the exclusive representative of all employees in the bargaining unit above de-
scribed and if an understanding is reached embody it in a signed agreement.
FERGUSON-STEERE MOTOR COMPANY,
Employer.
Dated---------------- By----------------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof, and must not be
altered, defaced, or covered by any other material.
RAYONIER , INC. and INTERNATIONAL BROTHERHOOD OF PULP, SULPHITE
AND PAPER MILL WORKERS , AFL AND INTERNATIONAL ASSOCIATION
OF MACHINISTS , AFL AND UNITED ASSOCIATION OF JOURNEYMEN
AND APPRENTICES OF THE PLUMBING AND PIPE FITTING INDUSTRY OF
THE UNITED STATES AND CANADA, LOCAL 177, AFL, PETITIONERS.
Cases Nos. 10-RC-2781, 10-RC-2793, 10-RC-2794, 10-RC-2795,
and 10-RC-2797. March 22,1955
Supplemental Decision and Order
On December 6, 1954, the Board issued a Decision and Direction
of Election (110 NLRB 1191) in the above-entitled proceeding finding
that certain groups of employees may constitute appropriate units for
the purposes of collective bargaining. Although the Board ordered
an election among a group of welders, it reserved decision as to the
appropriateness of a separate unit of such welders and ordered that
their ballots be impounded pending further consideration. The
International Association of Machinists, AFL and Local Union 177,
United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry of the United States and Canada, AFL,
seek, individually, to represent the welders as a separate appropriate
unit; the International Brotherhood of Pulp, Sulphite and Paper
Mill Workers, AFL, hereinafter referred to as Pulp, Sulphite Workers,
seeks to represent them as part of an overall production and main-
111 NLRB No. 178.