GATX Logistics, Inc.

National Labor Relations Board - Board Decisions

Mar 9, 1998

325 N.L.R.B. 413 (N.L.R.B. 1998)

413
325 NLRB No. 63
GATX LOGISTICS, INC.
1 In his analysis and conclusions, the judge referred to ‘‘Respond-
ent’s August 8 internal memorandum from Moore to Conley and
Alman.’’ The memorandum was dated August 6, 1994. We correct
the judge’s inadvertent error.
1 On the last day of the hearing, GATX and Local 407 entered into
a non-Board settlement agreement which was submitted to me in
Washington D.C., after the close of the hearing for approval under
Sec. 101.9(3)(d)(1) of the Board’s Rules and Regulations. On June
20, 1997, I issued an order approving the settlement agreement,
Local 407’s motion to withdraw the unfair labor practice charge in
Case 8–CA–27247 and the motion for dismissal of the complaint. I
further ordered that Case 8–CA–27247 be severed from the consoli-
dated complaint and notice of hearing. Thus, the hearing regarding
Case 8–CA–27247 is closed and the subject decision only involves
Case 8–CA–27101.
2 All dates are in 1994 unless otherwise indicated.
GATX Logistics, Inc. and International Brother-
hood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America, Local Union No. 507.
Case 8–CA–27101
March 9, 1998
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND BRAME
On June 30, 1997, Administrative Law Judge Bruce
D. Rosenstein issued the attached decision. The Charg-
ing Party Union filed exceptions and a supporting 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 de-
cided to affirm the judge’s rulings, findings1, and con-
clusions and to adopt the recommended Order.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
Catherine A. Modic, Esq., for the General Counsel.
Andrew Martone, Esq., of St. Louis, Missouri, for the Re-
spondent.
Richard G. Ross, Esq., of Independence, Ohio, for the Charg-
ing Party.
DECISION
STATEMENT OF THE CASE
BRUCE D. ROSENSTEIN, Administrative Law Judge. This
case was tried in Cleveland, Ohio, on February 24–26, 1997.
The charge in Case 8–CA–27101 was filed on February 2,
1995, by International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, Local Union No.
507 (the Union or Local 507). A charge in Case 8–CA–
27247 was filed on March 24, 1995, by Truck Drivers
Union, Local 407 a/w International Brotherhood of Team-
sters (the Charging Party or Local 407). On April 30, 1996,
the Regional Director for Region 8 of the National Labor Re-
lations Board (the Board) issued a consolidated complaint
and notice of hearing (the complaint).1 The complaint alleges
that GATX Logistics, Inc. (the Respondent or GATX) vio-
lated Section 8(a)(1) and (5) of the Act by bargaining with
an intention of not reaching a contract, unlawfully declaring
impasse, and implementing its final proposal on December 5,
1994.2 On February 19, 1997, Respondent filed an amended
answer denying the commission of any unfair labor practices.
At the hearing, the parties were represented by counsel
and were afforded full opportunity to be heard, to examine
and cross-examine witnesses, and to introduce evidence. On
the entire record, including my observation of the demeanor
of the witnesses, and after considering the briefs of the Gen-
eral Counsel and the Respondent submitted after the conclu-
sion of the hearing, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a corporation with an office and place of
business in Cleveland, Ohio, has been engaged in the busi-
ness of providing warehousing and related services to various
commercial enterprises, where it has purchased and received
at its Cleveland, Ohio facility goods valued in excess of
$50,000 directly from points outside the State of Ohio. The
Respondent admits and I find that it is an employer engaged
in commerce within the meaning of Section 2(2), (6), and (7)
of the Act and that the Union is a labor organization within
the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Background
In 1992, Respondent purchased the business of Itel Cor-
poration and since that time has continued to operate the
business in basically unchanged form. The purchase included
six facilities throughout the central region and employed ap-
proximately 500 people. Unfortunately, as a result of their
high labor cost structures, the facilities purchased from Itel
faired poorly. By the beginning of 1994, GATX had closed
five of the six facilities, and 95 percent of the 500 employees
were laid off. As a condition of the purchase, Respondent
agreed to be the successor to all of Itel’s collective-bargain-
ing agreements. The most recent agreement with Local 507
was scheduled to expire by its terms on July 1.
On May 12, the Union served Respondent with a proposed
new collective-bargaining agreement and a request to nego-
tiate.
At all material times, James Conley is Respondent’s re-
gional vice president, Robert L. Alman is director of human
resources and chief negotiator, and John Moore is the local
manager of the remaining GATX Cleveland facility on Hol-
land Road.
Throughout the collective-bargaining negotiations in this
matter, Union Secretary-Treasurer Terry Freeman is the prin-
cipal spokesperson for Local 507.
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414 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1. July 6: negotiation session 1
On July 6, the parties held their first negotiating session,
during which Local 507’s proposal was discussed as the Re-
spondent did not submit a contract proposal. The Union was
represented by Terry Freeman and a local negotiating com-
mittee. Respondent was represented by Robert L. Alman and
John Moore. A brief summary of the Union’s contract pro-
posals is in order as a backdrop to their further negotiations.
Briefly, the Union proposed a 3-year agreement with a $1-
an-hour wage increase in each successive year. Additionally,
the Union sought an increase in Respondent’s weekly con-
tributions to the health and welfare and pension funds. The
Union also proposed sick leave revisions, an additional paid
holiday, and an increase in vacation benefits based on the
number of years worked by each employee. Lastly, the
Union sought an increase in severance pay on the basis of
45 hours of severance pay at the employees straight time
hourly rate for each year of employment.
Alman told the Union that GATX was not doing well and
it would prefer an extension of the current contract as is for
2 years and then after 2 years the Respondent would evaluate
where it stood. Additionally, the parties discussed the status
of the Ohio Liquor account, which was the largest customer
at the facility, and employed 75 percent of the work force.
The account was handled at the facility for the past 7 years
and during July 1994, GATX was engaged in the competitive
bidding process with other companies to retain the business.
2. July 20: negotiation session 2
When the same representatives held the second meeting on
July 20, additional discussions took place on the substance
of the Union’s initial contract proposal. The Respondent did
not submit a proposal during this meeting.
The primary focus of the meeting was to address the direc-
tion the Respondent was headed. Alman told the Union that
GATX needed some relief for a period of 2 years and after
a couple of years, it would be in a position to make a deter-
mination whether the Cleveland market was one GATX
wanted to be in. Alman also told the Union that the Ohio
Liquor account was in jeopardy and it did not look good for
GATX to retain the account.
Events Between July 20 and the Next Negotiation
Session on September 20
On July 26, the Union mailed a revised contract proposal
to Respondent. In particular, the Union proposed a 4-year
versus a 3-year contract and added language that would per-
mit the Respondent to hire new employees for 30 percent
less for 12 months, and 20 percent less for a second 12-
month period before going to the regular contract rate. Addi-
tionally, the Union reduced its proposal for a wage increase
from $1 an hour each year to 35 cents an hour for each year
of the 4-year contract. The Union withdrew its proposal for
an additional paid holiday and an additional week of vaca-
tion. Likewise, the Union reduced the Respondent’s proposed
contribution to the health and welfare and pension funds and
proposed leaving the contributions at 1992 levels for the first
2 years of the contract. Lastly, the Union reduced its sever-
ance pay proposal from 45 hours to 40 hours of straight time
pay for each year that an employee worked at GATX.
Respondent officially became aware in late July 1994 that
it was not the successful bidder for the Ohio Liquor account.
Records from the bidding process showed that the successful
bidder had labor costs of $4.30 per hour less than GATX.
Accordingly, due to the loss of this major account, GATX
decided to change its bargaining strategy to reduce its costs
in order to competitively compete in the Cleveland market
and to address the direction the business was heading. First,
Respondent held an all employee meeting to apprise every-
one that the Ohio Liquor account was lost and that GATX
would be downsizing the operation due to the loss of this
business and an increase in rent from .06 to .18 cents a
square foot. By confidential memorandum dated August 8,
from Holland Road Manager Moore to Regional Vice Presi-
dent Conley and Director of Human Resources Alman, a
plan to downsize the Cleveland operation and reduce the
staff was proposed. In particular, the plan suggested a reduc-
tion in the warehouse staff (employees represented by Local
507) from 24 to 10 employees, accomplished in a two phase
layoff over the next 60 to 90 days. Lastly, the memorandum
pointed out the impact that severance pay would have on the
proposed plan to reduce union labor.
3. September 20: negotiation session 3
The third negotiation session began by Respondent provid-
ing the Union with a contract proposal consisting of 11
items. In attendance at this session, in addition to the same
complement of negotiators in the two previous meetings, was
Regional Vice President Conley.
The parties went over each of the items that Respondent
listed in its contract proposal. Briefly, the Respondent pro-
posed to eliminate contract language in article 1 of the cur-
rent contract to limit recognition to the Holland Road facil-
ity, delete any reference to trucking operations, and to
change the date of the contract to July 1. In article II, the
Respondent proposed to eliminate the current exclusive hir-
ing hall arrangement and to delete language in the current
contract that if GATX opens a new facility within 175 miles
of Holland Road, it would recognize Local 507 as the bar-
gaining agent for those employees. In its third proposal, the
Respondent wanted to delete language in article III of the
current contract guaranteeing overtime after working 8 hours
per day, reduce the number of stewards, eliminate the con-
tinuation of wage rates if an employee transfers to another
classification, and to delete the provision that all existing
benefits enjoyed by employees will continue with the execu-
tion of any new agreement. Proposal four of Respondent’s
contract offer provided for a 2-year contract agreement, a re-
duction of $1 per hour in wages, and the elimination of the
ratification bonus. Respondent’s proposal five, deleted provi-
sions in article XIII of the current contract that concerned
subcontracting issues. Proposal six called for the deletion of
current contract provisions in article XV dealing with liabil-
ity of the Union for unauthorized conduct. Respondent’s pro-
posals seven and eight called for the elimination of the
Union’s health and welfare and pension funds found in arti-
cles XVI and XVII of the current contract to be replaced
with independent GATX health insurance and 401(k) plans.
In proposals 9 and 10, the Respondent sought to eliminate
the charitable, educational, and recreational fund and the sev-
erance pay provisions found in articles XVIII and XX of the
current contract. Lastly, the Respondent proposed that the
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415GATX LOGISTICS, INC.
contract should remain in full force from July 1 to June 30,
1996, and reserved the right to add to, delete, and modify
its proposals during the course of negotiations.
During the September 20 negotiation session, the parties
had extensive discussions concerning Respondent’s proposal
to eliminate the current health and welfare and pension fund
plans set forth in the parties’ collective-bargaining agree-
ment. Freeman testified that he told Respondent’s negotiators
that these benefits are what employees are entitled to get for
the rest of their life having worked and sacrificed for many
years to obtain. He said, ‘‘And now they did all that to get
to this point that you’re saying you’re going to take it away,
and that’s a problem.’’ This session lasted approximately 2
hours and ended with the parties scheduling the next meeting
for October 5.
Events Between September 20 and the Next
Negotiation Session on October 5
On October 5, Local 507 members and employees of
GATX sent a letter to Union Secretary-Treasurer Freeman.
The letter stated in pertinent part that the signatories abso-
lutely refused to consider and asked Freeman to refuse to
consider replacing the existing health and welfare package
with any version proposed by GATX, to refuse to consider
replacing the existing union pension benefits with the GATX
proposal of a 401(k) plan, to refuse to consider the GATX
proposal to eliminate the payment of severance pay, and to
refuse to consider the GATX proposal for a $1-an-hour re-
duction in wages. The letter concluded by stating, ‘‘regard-
less of the outcome, we absolutely refuse to surrender our
pride and dignity to those who treat us with such contempt.’’
4. October 5 and 6: negotiation sessions 4 and 5
In the fourth negotiation session on October 5, Freeman
gave the above-noted letter to Respondent and said ‘‘that the
men had given him marching orders and he was not going
to fuck with their benefits.’’ Thereafter, the parties continued
to discuss individual items contained in Respondent’s Sep-
tember 20 contract proposal. For example, Freeman ques-
tioned why the Respondent wanted to eliminate severance
pay since it only costs money if you have intentions of get-
ting rid of people. Freeman told Respondent that the main
issue is how to get you through these 2 years with either no
cost or little cost.
With regard to health and welfare and the pension funds,
Alman said that GATX needed some relief for 2 years and
they wanted to get it through these funds. Freeman said that
‘‘if a guy takes a cut in his pay and then has to turn around
and pay into the health and welfare and then put money into
the 401(k), that would be something very, very difficult to
do.’’ Alman told the union negotiators that all GATX non-
union facilities and the four union facilities in the region in
which Cleveland operates are under the same health insur-
ance and 401(k) plans that is being offered to the Union
under Respondent’s contract proposal. Likewise, the sever-
ance pay package for nonunion and union facilities in the re-
gion is the same as is being offered to the Union.
Freeman testified that during the October 5 session, the
Respondent dropped proposal one (limiting recognition to the
Holland Road facility and the date of the contract-art. I and
preamble of the current contract), proposal two (deleting the
union hiring hall and following the work to a new location
within 175 miles-art. II of the current contract) and a portion
of proposal four (dealing with classifications-art. IV of the
current contract) from its September 20 contract offer.
In the negotiation session on October 6, the parties contin-
ued their dialogue concerning the health and welfare and
pension plans contained in the current contract and the rea-
sons the Respondent preferred to transfer the Local 507 em-
ployees into the companywide GATX health insurance and
401(k) plans.
5. October 12: negotiation session 6
The parties met at the union hall on October 12, with At-
torney Andrew Martone and Conley appearing with Alman
and Moore on behalf of GATX and Terry Freeman prin-
cipally representing the Union.
Discussions continued to take place concerning the health
and welfare and the pension plans presently enjoyed by
Local 507 employees. Respondent told the Union that it has
3000 employees and it wanted consistency with all its em-
ployees in the same health insurance and 401(k) plans. The
Union said it was willing to reduce the Respondent’s con-
tribution to the health and welfare and pension plans but was
unwilling to abandon these entitlements and move into the
more costly health insurance and 401(k) plans sponsored by
GATX.
With respect to severance, the Union told GATX nego-
tiators that there is no way that it could ask people to take
reduced severance, since the whole idea of severance is to
get employees money if GATX closes.
Concerning a decrease in wages of $1 an hour, the Union
told Respondent negotiators that it was willing to hold the
line on operating costs and would reduce the amount GATX
contributes to the health and welfare and pension plans but
it could not agree to a decrease of $1 an hour in wages.
During this negotiation session, Respondent told the Union
that it was withdrawing its proposal five (union jurisdiction
and subcontracting-art. XIII of the current contract) and pro-
posal nine (charitable, educational, and recreational fund-art.
XVIII of the current contract) from its September 20 contract
offer.
6. October 27: negotiation session 7
The seventh negotiation session occurred on October 27,
with the same parties who attended the October 12 meeting.
Freeman testified that there were four open issues that still
had to be resolved as the Respondent had now withdrawn all
other proposals from its September 20 offer. Those open
issues included the Union’s health and welfare and pension
plans, the Union’s proposed wage increase in each year of
the 4-year contract and the issue concerning severance pay.
The Respondent agreed with this assessment and stated dur-
ing this session that in order to remain competitive it pre-
ferred that all GATX employees transfer into its health insur-
ance and 401(k) plans. Concerning the wage increase, the
Respondent stood on its prior proposal to reduce labor costs
$1 an hour during the life of the contract. Lastly, the Re-
spondent took the position that severance pay should be
capped at a maximum of 4 weeks rather then the payment
of 40 hours of pay at straight time hourly rates for each year
that an employee is employed by GATX.
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416 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
During the course of the October 27 negotiation session,
the Union offered a number of plans to reduce the Respond-
ent’s health and welfare and pension contributions in an ef-
fort to secure a contract. The Union also reduced the yearly
increase in wages by 10 cents each year during its proposed
4-year contract. Respondent was unwilling to accept these
proposals and firmly maintained, in order to remain competi-
tive in the Cleveland market, that it needed substantial relief
in wage reduction and freedom to get out of the Union’s
health and welfare and pension plans.
At the conclusion of the October 27 negotiation session,
Freeman testified that the parties continued to be apart on
four significant issues. First, the Union took the position that
no cap should be placed on the payment of severance bene-
fits while the Respondent stood firm on a cap of 4 weeks.
Second, in regard to wages, the Union wanted spread in-
creases in each year of the proposed 4-year contract while
the Respondent sought a $1-an-hour decrease. Lastly, the
Union stood firm on retaining the health and welfare and
pension plans presently in the current contract while the Re-
spondent wanted Local 507 employees to move into the
GATX health insurance and 401(k) plans.
7. November 1: negotiation session 8
During this meeting, the Respondent informed the Union
that it was officially dropping all of its proposals made on
September 20, with the exception of its insistence of a $1-
an-hour reduction in wages, moving the employees to the
GATX health insurance and 401(k) plans, and to limit sever-
ance pay to a 4-week maximum.
In an effort to meet some of Respondent’s economic
needs, the Union continued to propose a reduction in pension
contributions required from GATX under the parties’ con-
tract.
During the meeting, Freeman requested Alman to provide
the Union with a written document of where Respondent was
headed and its position on the remaining issues outstanding
between the parties.
Events Between November 1 and the Next Negotiation
Session on November 17
On November 1, Respondent’s chief negotiator, Alman,
sent a letter to Freeman that states as follows:
This letter is to summarize the parties’ positions on
the remaining open issues.
1. Wages. While the Company has been insisting on
a $1.00 per hour wage concession to assist it in bidding
against non-union competition and the Union, at a mini-
mum, wants a wage increase of $.25/$.25/$.25/$.25
over the next four years, you have told me in no uncer-
tain terms that the Union would never accept or agree
to a wage concession because the employees are not
willing to ‘‘subsidize’’ the Company.
2. Health Insurance. The Company wants to switch
the employees to its health insurance plan, which will
both save the Company money and allow the Company
to maintain uniform coverage at its locations. The
Union’s position is that under no circumstances will the
Union either allow the Company to stay in the Union’s
plan at the same premium cost as the Company’s plan
or change from the Union plan to the Company plan.
3. Retirement. The Union refuses to move to the
Company’s 401(k) plan which the Company has pro-
posed in order to maintain a uniform plan for its facili-
ties, cut its costs to allow it to successfully bid against
non-union competition and avoid potential future with-
drawal liability. The Union demands that the Company
stay in the Union’s multi-employer plan with a payment
structure ranging from $65.00 to $85.00 per month.
4. Severance. The Company proposes to change its
severance structure to limit severance to a four-week
maximum. Because the Union feels that severance is a
benefit that the employees will need in the event that
the Company closes its doors, the Union absolutely re-
fuses to agree to any change in the current severance
structure. I believe the above summarizes all remaining
open issues. Terry, if I have inaccurately stated your
final position or the Company’s final position or if you
believe there are any other open items, please contact
me immediately. While you have repeatedly told me
that your offer represents all you can give, I again ask
that you allow your members to vote on the Company’s
proposal and contact me with the (hopefully successful)
results of the vote.
Freeman testified that he did not prepare a specific letter
in response to Alman’s November 1 letter summarizing the
parties’ positions on the remaining open issues. Rather, on
November 2, he mailed Alman a new revised proposal.
In particular, the Union reduced its wage increase in each
year of its proposed 4-year contract from 35 to 25 cents, per-
mitted new employees to be paid 30 percent less per hour
for the first year of the contract and 20 percent less per hour
in the second year of the contract and set GATX’s pension
contribution at $60 contract ratification, which is a reduction
of $15 for 1 year and after the first year set the contribution
at $65, which is $10 less than the prior contract proposal and
after 2 years of the contract set the contribution at $70,
which is $5 less the Respondent’s current pension contribu-
tion.
On November 14, GATX Holland road manager, Moore,
sent the following letter to all remaining 63 customers of the
facility except for the B.F. Goodrich account:
We at GATX Logistics-Cleveland Operations have
experienced a significant change in our business climate
which is forcing us to make some correspondingly sig-
nificant changes to our services in this area. As a result
we must regretfully inform you that we will no longer
be able to service your company at our Brook Park,
Ohio location.
Your business has been greatly appreciated over the
years and we wish you the very best. To help you
move forward, we have identified LTI Enterprises as a
professional public warehouse company in the area that
you may want to consider. LTI has offered to provide
comparable warehousing services at the same rates cur-
rently inplace with us. LTI is located at 16845 Granite
Road, Cleveland, Ohio 44137-4398 and can be reached
by phone at (216) 475-7400.
Again, we regret having to lose your business. Please
accept this letter as 30 days notification, per our con-
tract, of the cancellation of that contract. All outstand-
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417GATX LOGISTICS, INC.
ing charges must be paid in full and product removed
from our building by Friday, December 16, 1994.
Please do not hesitate to call me if I can be of assist-
ance during this transition.
8. November 17: negotiation session 9
During this negotiation session the parties discussed their
respective positions and the Union’s revised proposal that
had been sent to Respondent on November 2. At the conclu-
sion of this meeting, there was a general understanding of
each others position but no new proposals were exchanged
by the parties.
Events Between November 17 and the Next Negotiation
Session on December 6
On November 22, Alman sent a letter to Freeman which
states as follows:
At our last meeting, you made it clear, while the
union is unwilling to move from its final offer (which
you made at our prior meeting on October 27, and re-
duced to writing on November 2) you wanted a written
summary of the Company’s final offer. This offer was
initially made at our meeting of October 27, 1994, sub-
sequently submitted in writing to you on November 2,
1994 and reaffirmed at our negotiations meeting last
week, November 17, 1994.
Other than the changes listed below, all terms and
conditions of the prior agreement would remain in force
and effect. Those changes are:
1. Wage Rates—a $1.00 per hour across-the board
wage reduction;
2. Health and Welfare—switch from the current
health and welfare plan outlined in Article XVI of the
expired Agreement to the Company’s health insurance
plan with employee contributions. The current contribu-
tions rates, employee benefits overview and description
of the Plan are enclosed.
3. Retirement—the Company would cease contribut-
ing to the current pension (listed in Article XVII of the
expired Agreement) and allow the covered employees
to participate in its 401(k) plan. The Summary Plan De-
scription is enclosed.
4. Severance Pay—the Company would change Arti-
cle XX by amending the second sentence to read, ‘‘An
eligible employee’s compensation for his displacement
shall be on the basis of forty (40) hours of severance
pay (at his straight-time hourly rate of pay) for each
year of employment, with a maximum of four (4)
weeks severance pay being awarded to any employee
under this polic.
While I understand it is your position that your
members would likely reject the Company’s offer, I
still request that you put it to a vote.
On November 29, Freeman went to the Holland Road fa-
cility and presented the Respondent’s final offer to the em-
ployees. The membership unanimously voted to turn down
the Respondent’s contract offer. At the conclusion of the
vote, Freeman went to see Holland Road Manager Moore.
He told Moore that the membership turned down the Re-
spondent’s contract offer and said, ‘‘Get hold of Alman or
whoever you need to get hold of and tell him that we’re
ready to negotiate some more.’’ Moore replied, ‘‘that he
would pass on the information to Robert Alman.’’
On December 1, Alman sent a letter to Freeman which
states:
This is to notify you that since the Union has rejected
the Company’s final contract proposal, we intend to im-
plement our final proposal on Monday, December 5,
1994.
On December 5, a memorandum to all Local 507 employ-
ees was posted at the Holland Road facility which states:
The Union recently rejected the Company’s final
offer for a negotiated labor agreement. Therefore, effec-
tive today, Monday, December 5, 1994, the following
proposed contract changes will be implemented.
Wages—Reduction of $1.00/hour from existing wage
rate.
Health Insurance—The Company will cease contrib-
uting to the Union’s plan. Allemployees will have med-
ical coverage as established in the attached plan.
Retirement—The Company will cease contributing to
the Union plan. All employee’s will be eligible to join
the 401(k) plan. A copy of the plan is attached.
Severance—The new severance plan will pay one (1)
weeks pay for each year of service with a maximum of
four (4) weeks severance pay.
Other than these changes, the other portions of the
prior contract remains in effect.
Freeman was given the December 5 memorandum by
GATX employees and immediately telephoned Alman. He
said to Alman, ‘‘How could you do this if we’re not at im-
passe?’’ Alman agreed to schedule a meeting for December
6 in Cleveland at the union hall.
9. December 6: negotiation session 10
On the day after implementation of the Respondent’s final
offer, the parties met on December 6, for their last negotia-
tion session. Respondent was represented by Alman, Conley,
Moore, and Attorney Martone while the Union was rep-
resented by Freeman and the local committee.
At the commencement of the meeting, Freeman gave a
new revised contract proposal to Respondent. While it did
not dramatically differ from prior union contract proposals,
it made several changes. In this regard, it held the line on
Respondent contributions to the pension plan only requiring
a $5 increase during the last year of the proposed 4-year con-
tract. The proposal did not include a 25-cent wage increase
in the first year of the contract but did include such an in-
crease in the remaining 3 years of the contract. Lastly, the
Union’s proposal permitted the Respondent to hire new or
seasonal employees for less then $8 an hour during the first
2 years of the contract.
During the meeting, the Union told Respondent that they
disagreed that impasse had been reached, that throughout ne-
gotiations the Union made numerous concessions and consid-
erable movement had been undertaken and they were ready
to continue to negotiate in order to achieve an agreement.
Respondent told the Union that since it would not permit
GATX employees to move out of the present health and wel-
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418 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Records introduced in evidence at the hearing show that between
January 29 and September 20, the layoff of seven employees took
place at the Holland Road facility. On the date of the hearing, Feb-
ruary 24, 1997, there were seven Local 507 employees working at
the Holland Road facility.
4 In contract warehousing, the provider has a long-term storage
contract rather than a month-to-month agreement, and it is much
more stable and cost effective than public warehousing. The Holland
Road Income Statement for 1994 shows that GATX lost money in
each successive month between August and December 1994 for a
total of $187,300.
5 I find that Alman’s November 1 letter and the Unions November
2 revised contract proposal crossed in the mail. Accordingly, Free-
man did not prepare the November 2 revised proposal (the majority
of which was discussed at the October 27 negotiation session), hav-
ing the benefit of Alman’s November 1 letter.
fare and pension plans or agree to a $1-an-hour decrease in
wages and to cap severance payments, that the parties had
legitimately reached impasse and Respondent was privileged
to implement its last best offer.
The meeting ended without any meaningful resolution and
in February 1995, the Union filed the subject unfair labor
practice charge.
Events after the December 6 Negotiation Session
Between December 6 and 16, the layoff of six Local 507
employees took place at the Holland Road facility.3 A sec-
ond layoff occurred in February 1995 and reduced the Local
507 contingent to six employees.
B. Analysis and Conclusions
Counsel for the General Counsel argues that throughout
negotiations, Respondent negotiated in bad faith and with no
intention of entering into a final or binding collective-bar-
gaining agreement with the Union and that Respondent uni-
laterally and unlawfully implemented its contract proposals
following an unlawfully declared impasse.
The Union argues that Respondent tailored its proposals
with a predesigned effort to frustrate agreement, that Re-
spondent violated the Act by unilaterally implementing its
proposals in the absence of a bargaining impasse and used
the cover of reaching impasse to layoff the majority of Local
507’s work force at the Holland Road facility.
Respondent contends that at all material times it engaged
in good-faith bargaining, it made substantial concessions by
withdrawing a majority of its proposals previously submitted
on September 20, and by December 5, it was evident that the
Union steadfastly refused to permit employees to be taken
out of the existing health and welfare and pension plans nor
would it agree to a wage reduction of $1 an hour or to cap
severance pay. Accordingly, the parties legitimately reached
impasse and the Respondent was privileged to implement its
last best offer.
The Board has defined impasse as the point in time of ne-
gotiations when the parties are warranted in assuming that
further bargaining would be futile. Pillowtex Corp., 241
NLRB 40, 46 (1979). ‘‘Both parties must believe that they
are at the end of their rope.’’ PRC Recording Co., 280
NLRB 615, 635 (1986), enfd. 836 F.2d 289 (7th Cir. 1987).
From the inception of negotiations, Respondent told the
Union that its sole concerns were economic and that GATX
could be more profitable being a landlord then being in the
public warehousing business.4 Indeed, when Respondent be-
came aware in late July 1994 that it lost the Ohio Liquor ac-
count and shared this information with the Union, it was
common knowledge that 75 percent of the Holland Road em-
ployees worked on this account. It was at this time that Re-
spondent changed its bargaining position, having gained in-
formation from the bidding process that the successful bidder
for the liquor account had labor costs of $4.30 per hour less
than GATX. Likewise, Respondent’s August 8 internal
memorandum from Moore to Conley and Alman, dealing
with staff reductions, is consistent with this strategy.
The evidence establishes that the Respondent did not sub-
mit any contract proposals during the first two negotiation
sessions on July 6 and 20. It was not until the third negotia-
tion session on September 20, that the Respondent submitted
its first contract proposal for a 2-year period. Regional Vice
President Conley credibly testified that Respondent’s 2-year
contract proposal was made because it ran synonymous with
the Holland Road lease in addition to financial commitments
within the Cleveland market and if there was viability in that
market, GATX needed a couple of years to validate that. The
majority of Respondent’s September 20 proposals including
limiting overtime and premium pay for union shop stewards,
the removal of the ratification bonus, and restrictions on the
ability to cross picket lines in addition to the four proposals
that ultimately went to impasse were economic issues sub-
mitted to the Union in order to permit GATX to competi-
tively compete in the Cleveland market. As a continuing part
of this strategy, and consistent with GATX’s decision to re-
move itself from the public warehousing sector of the market
because it lost its lease on the Holland Road facility and
faced a 300-percent rent increase, Respondent sent the No-
vember 14 letter to the remaining 63 warehouse customers,
except the B.F. Goodrich account, that it would no longer be
able to service their accounts.
At the conclusion of the October 27 negotiation session,
Alman prepared and sent on November 1, a letter to the
Union that summarized the parties’ positions on the remain-
ing open issues. By October 27, the Respondent had with-
drawn all proposals from its September 20 submission, ex-
cept for the remaining open issues described in the Novem-
ber 1 letter of wages, health insurance, retirement and sever-
ance. Alman specifically stated, ‘‘Terry [Freeman] if I have
inaccurately stated your final position or the Company’s final
position or if you believe there are any other open items,
please contact me immediately.’’ Freeman testified that he
did not contact Alman or specifically respond to the content
of the November 1 letter. Rather, on November 2, the Union
submitted a new revised proposal which basically tracked the
position Alman ascribed to the Union in the November 1 let-
ter.5
By letter dated November 22, from Alman to Freeman, the
Respondent again provided a written summary of its final
offer to the Union. It stated that all terms and conditions of
the prior agreement would remain in full force and effect.
The changes to the agreement called for a $1-per-hour
across-the-board wage reduction, switching from the current
health and welfare plan outlined in article XVI of the agree-
ment to the Respondent’s health insurance plan with em-
ployee contributions, ceasing to contribute to the current pen-
sion fund listed in article XVII of the agreement, and allow-
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419GATX LOGISTICS, INC.
6 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
ing the covered employees to participate in Respondent’s
401(k) plan, and limiting the maximum amount of severance
pay for a covered employee to a period of 4 weeks. The No-
vember 22 letter concluded with a request to take the Re-
spondent’s offer to the employees for a vote.
On November 29, the Local 507 employees unanimously
rejected the Respondent’s final contract offer and by letter
dated December 1, Alman notified Freeman that since the
Union rejected the Respondent’s final contract proposal, it
intended to implement its final proposal on Monday, Decem-
ber 5. By memorandum dated December 5, to all Local 507
employees at the Holland Road facility, the Respondent’s
final contract proposal was implemented.
On these facts and evaluating the Respondent’s overall
conduct, I am not persuaded that the Respondent has dem-
onstrated the kind of intransigence and insistence on its own
proposals which evidences bad faith. After the parties com-
pleted their seventh negotiation session on October 27, the
Respondent made a number of significant concessions and
withdrew proposals previously made on September 20 deal-
ing with the use of the hiring hall, payment of overtime,
classification and wage rates, the duration of the contract,
provisions dealing with union picket lines, and contributions
to the charitable, educational, and recreational fund.
When negotiations finally broke down following the Re-
spondent’s submissions on November 1 and 22 of its final
contract offer, only four of the major items designated by the
Union remained unresolved: wages, health and welfare, pen-
sion, and severance. While the Union was willing to reduce
the amount of Respondent’s contributions to the health and
welfare and pension funds, and continued to make revised
proposals to this effect up to and including December 6, it
steadfastly refused to consider moving into any other health
insurance plan or pension fund and stated that it would only
consider the funds set forth in the parties’ agreement. Like-
wise, the Union was unwilling to move from its proposed
wage increases during the life of the 4-year contract and
would not agree to a cap on severance pay. This position is
consistent with the written marching orders Freeman received
on October 5 from the Holland Road Local 507 employees,
and it permeated the discussions between the parties through-
out negotiations. Indeed, on cross-examination, Freeman ad-
mitted that during negotiations he refused to consider moving
into the Respondent’s 401(k) plan, refused to consider mov-
ing to the Respondent’s health insurance program, refused to
consider reducing his demands with respect to severance pay
and would not give the Respondent a reduction of wages in
the amount of $1 an hour. Although the Respondent was un-
willing to agree to the Union’s demands on these four sub-
jects, its failure to do so does not constitute a manifestation
to avoid agreement. As stated in Challenge-Cook Bros., 288
NLRB 387, 389 (1988), ‘‘a party may stand firm by a bar-
gaining proposal legitimately proffered.’’ Here, the record
shows that the parties took firm positions regarding wages,
health insurance, pensions, and severance pay from which
neither was willing to budge. Under these circumstances, I
cannot conclude that by maintaining and adhering to its posi-
tion on these subjects, the Respondent violated the Act.
Chevron Chemical Co., 261 NLRB 44 (1982).
I further find that the parties were at impasse on December
5, when the Respondent implemented its final offer. As stat-
ed above, the Respondent submitted its final offer on No-
vember 1 and 22, but the Union rejected it on November 29
because it sought a wage reduction, a cap on severance pay
and the Union wanted to maintain its existing health and
welfare and pension plans. The Respondent made clear from
the outset of negotiations that economic relief, due primarily
to the loss of the Ohio liquor account, was of an immediate,
central and overriding concern to it. However, equally clear
throughout negotiations was the fact that the concessions
sought by Respondent were totally unacceptable to the
Union. Between the Respondent’s submission to the Union
of its final offer and its implementation, neither party made
any substantive movement in the critical areas set forth
above, suggesting that the parties were deadlocked and that
further bargaining would have been futile. Therefore, I find
that on December 5, when the Respondent implemented its
final offer a valid impasse existed and that the implementa-
tion of the final offer was lawful. Bloomsburg Craftsmen,
276 NLRB 400, 404 (1985).
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
and in operations affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
2. The Respondent, by implementing its final contract pro-
posal on December 5, 1994, did not violate Section 8(a)(1)
and (5) of the Act because a valid impasse existed privileg-
ing the implementation of the final offer.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended6
ORDER
The complaint is dismissed.
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