Gaucho Food Products

National Labor Relations Board - Board Decisions

Aug 13, 1993

311 N.L.R.B. 1270 (N.L.R.B. 1993)

1270
311 NLRB No. 165
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The judge inadvertently failed to include in his decision the
Board’s traditional remedial provisions for the Respondent’s unilat-
eral termination of contractually required wages and benefits, and
health, welfare, and pension plan contributions. Accordingly, we
have modified the judge’s recommended remedy to require that the
Respondent remit all payments it owes to fringe benefit funds, with
interest, as specified in Merryweather Optical Co., 240 NLRB 1213
(1979), and to make whole the employees for any expenses they
may have incurred as a result of the Respondent’s failure to make
such payments in the manner set forth in Kraft Plumbing & Heating,
252 NLRB 891 (1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981).
The Respondent shall also make whole its employees for any loss
of wages and benefits they may have suffered by reason of the Re-
spondent’s failure to pay contractually required wages and benefits
in the manner set forth in Ogle Protection Service, 183 NLRB 682
(1970), enfd. 444 F.2d 502 (6th Cir. 1971). All payments to employ-
ees shall be made with interest as prescribed in New Horizons for
the Retarded, 283 NLRB 1173 (1987).
2 The General Counsel excepts only to the judge’s failure to in-
clude in his recommended Order a provision requiring the Respond-
ent, on request, to restore the status quo which existed prior to the
Respondent’s unlawful unilateral changes in terms and conditions of
employment. We find merit to this exception, and shall modify the
judge’s recommended Order accordingly.
Gaucho Food Products, Inc. and the United Food
and Commercial Workers International Union,
AFL–CIO, Local 100-A. Cases 13–CA–31007,
13–CA–31108, and 13–CA–31185
August 13, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On April 12, 1993, Administrative Law Judge Joel
A. Harmatz issued the attached decision. The General
Counsel has filed limited exceptions and a supporting
brief.
The National Labor Relations Board has considered
the decision and record in light of the exceptions and
brief and has decided to affirm the judge’s rulings,
findings, and conclusions, to modify the remedy,1 and
to adopt the recommended Order as modified.2
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Gaucho Food Products,
Inc., Chicago, Illinois, its officers, agents, successors,
and assigns, shall take the action set forth in the Order
as modified.
1. Add the following new paragraph 2(a) and reletter
the subsequent paragraphs.
‘‘(a) On request, rescind the unilateral changes the
Respondent made in the terms and conditions of em-
ployment of unit employees.’’
2. Substitute the attached notice for that of the ad-
ministrative law judge.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these pro-
tected concerted activities.
WE WILL NOT refuse to bargain in good faith with
the United Food and Commercial Workers Inter-
national Union, AFL–CIO, Local 100-A, concerning
the rates of pay, wages, hours, and working conditions
of employees in the following appropriate unit:
All production and maintenance employees, ex-
cluding nonworking supervisory foremen, office
workers, salesmen, and engineers.
WE WILL NOT refuse to bargain in good faith by de-
clining, on request, to furnish information relevant and
necessary to the Union’s performance of its duties as
exclusive representative of these employees.
WE WILL NOT, without bargaining in good faith with
the Union, fail to pay employees in the above unit
their established wage rates, and their accrued holiday
and vacation benefits.
WE WILL NOT, without bargaining in good faith with
the Union, terminate health and welfare contributions
on behalf of unit employees.
WE WILL NOT tell our employees that they should
quit, rather than complain about unlawfully denied em-
ployment terms.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of the rights guaranteed them by Section 7 of the Act.
WE WILL, on request, rescind the unlawful unilateral
changes in terms and conditions of employment for
unit employees.
WE WILL, on request, furnish the Union with the in-
formation sought in its letter of August 12, 1992.
WE WILL make whole unit employees, with interest,
for all underpaid wages and unpaid holiday and vaca-
tion benefits.
WE WILL reimburse the Local 100-A Health and
Welfare Fund and the Local 100-A Pension Fund, with
interest, for all unpaid contributions.
1271GAUCHO FOOD PRODUCTS
1 Errors in the transcript have been noted and corrected.
2 See, e.g., Jt. Exh. 1(10). The testimony of Steven Tarnowski, the
Union’s spokesman and vice president, that Jack Lachmann, the Re-
spondent’s president, throughout negotiations, persistently plead pov-
erty if benefits were maintained at existing levels was confirmed by
Lachman’s admission that he described the Company to Tarnowski
as ‘‘going broke’’ while advising, ‘‘I am not making any money.’’
Lachmann did not deny any of the remarks or positions attributed
to him by Tarnowski.
WE WILL reimburse unit employees, with interest,
for any and all losses sustained by reason of any loss
of eligibility for health and welfare benefits caused by
our unlawful refusal to bargain.
GAUCHO FOOD PRODUCTS, INC.
Emilie F. Schrage, Esq., for the General Counsel.
Edwin R. Dunmore, consultant, of Chicago, Illinois, for the
Respondent.
Steven Tarnowski, vice president, Local 100-A, of Chicago,
Illinois, for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOEL A. HARMATZ, Administrative Law Judge. This case
was tried in Chicago, Illinois, on February 16, 1993, upon
an original unfair labor practice charge filed on May 22,
1992, and a consolidated complaint issued on February 16,
1993, alleging that the Respondent violated Section 8(a)(5)
and (1) of the Act by unilaterally cutting wage rates, by de-
clining to pay accrued vacation and holiday pay, and by
ceasing to make health, welfare, and pension contributions.
It is further alleged that the Respondent violated Section
8(a)(5) and (1) of the Act by, on request, refusing to provide
the Union with information necessary to perform its duties
as exclusive collective-bargaining representative. Finally, the
complaint alleges that the Respondent independently violated
Section 8(a)(1) by informing employees that protests con-
cerning wage and benefit changes could lead to a loss of em-
ployment. In duly filed answers, the Respondent, for the
most part, denied that any unfair labor practices were com-
mitted. Following close of the hearing, a brief was filed on
behalf of the General Counsel.
On the entire record,1 including my opportunity directly to
observe the witnesses and their demeanor, and after consid-
ering the posthearing brief, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, an Illinois corporation, with an office and
place of business in Chicago, Illinois, is engaged in the proc-
essing of meat food products. During the 12 months prior to
issuance of the consolidated complaint, the Respondent, in
the course and conduct of said business operations, sold and
shipped from said facility products, goods, and materials val-
ued in excess of $50,000 directly to points outside the State
of Illinois. The complaint alleges, the parties agree, and I
find that the Respondent is now, and has been at all times
material herein, an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the parties agree, and I find that the
United Food & Commercial Workers International Union,
AFL–CIO, Local 100-A (the Union), is a labor organization
within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Refusals to Bargain
1. Preliminary statement
The Union has represented the Respondent’s production
and maintenance employees for 25 years. The most recent
collective-bargaining agreement expired on April 30, 1992.
Renewal negotiations, and meetings were held on April 20,
May 6, June 9, and July 8. No agreement was reached. This
case derives its essence from the Respondent’s cost-cutting
measures in the course of those negotiations, and its failure
to accommodate the Union’s request for proof as to the Re-
spondent’s professed inability to afford anything short of se-
verely reduced employment terms.
2. Unilateral changes in existing terms
There is no dispute that, while negotiations were in
progress, the Respondent modified employment benefits that
unit employees had enjoyed under the recently expired col-
lective-bargaining agreement. The parties specified that these
changes occurred as follows:
On or about May 11, 1992, Respondent reduced the
wages of unit employees by 25 percent.
On or about May 25, 1992, Respondent ceased pay-
ing holiday wages.
On or about May 25, 1992, Respondent ceased grant-
ing accrued vacation benefits.
On or about June 10, 1992, Respondent ceased mak-
ing health and welfare and pension contributions on be-
half of unit employees.
In addition, Steven Tarnowski, the Union’s vice president,
testified that these measures were invoked without providing
the Union advance notice and an opportunity to bargain. This
was not denied, nor did the Respondent present evidence
suggesting that in the case of any of these mandatory sub-
jects of collective bargaining, negotiations had proceeded to
bonafide impasse before any of the particularized terms were
reduced or withheld. Accordingly, it is concluded that the
Respondent violated Section 8(a)(5) and (1) of the Act in
each instance.
3. The refusal to provide requested information
The consolidated complaint sets forth two occasions where
the Respondent violated Section 8(a)(5) and (1) by declining
to provide information requested by the Union. Undisputed
evidence demonstrates that the Respondent before and during
formal negotiations repeatedly indicated its inability to afford
benefit levels defined in the most recent contract, and stood
firm on its proposal for drastic cuts in wages and fringe ben-
efits.2
1272 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Unless otherwise indicated all dates refer to 1992.
4 See, e.g., NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956); R.E.C.
Corp., 307 NLRB 330 (1992).
5 The first page of the Respondent’s corporate tax return ‘‘in no
way would enable the Union to intelligently determine whether the
Respondent was making its best offer’’ and hence could not be con-
strued as substantial compliance with this aspect of the duty to bar-
gain in good faith. Tony’s Meats, Inc., 211 NLRB 625, 626-627
(1974).
Also undisputed is the evidence as to union efforts to test
the Respondent’s representations in this regard. First, at a
bargaining session on June 9, 1992,3 the Respondent’s presi-
dent, Jack Lachmann, an agent and supervisor within the
meaning of the Act, reiterated that he could not afford to pay
the benefits under the 1989–1992 contract, and hence could
not afford the additional costs evident in the Union’s pro-
posal for a new agreement. The Union reacted through
Tarnowski’s verbal request that it be permitted to audit the
Respondent’s books. Lachmann refused, declaring ‘‘there
would be no audit, the union was not his partner.’’ At the
next meeting on July 8, the Respondent provided the Union
with the first page of each of its corporate tax returns for
1989 and 1990. Tarnowski advised that additional informa-
tion would be necessary.
Subsequently, Tarnowski, by letter of August 12, renewed
the request, this time detailing the data that would be re-
quired for completion of the audit, as follows:
1. Financial statement prepared by Respondent’s
auditor
2. Net income for the last three (3) years
3. Year-end cash balance for the last three (3) years
4. Unpaid invoices filed for accounts payable
5. Cash disbursement journal
6. General ledger
7. Payroll journal shown quarterly; Payroll tax re-
turns; W-2’s and 1099’s
8. Cash receipts journal, and accounts receivable list.
On October 6, in a telephone conversation, Lachmann in-
quired about a return to negotiations, whereupon Tarnowski
inquired as to whether the information requested would be
provided. Lachmann replied that ‘‘the Union had gotten all
it was going to get.’’ Consistent with Lachmann’s stated po-
sition, as of the date of the hearing, no information, other
than the partial tax returns submitted on July 8, had been
provided.
On the foregoing, it is apparent that the request for an
audit was triggered solely by the Respondent’s repeated dec-
larations as to both a present inability to afford existing ben-
efit levels and any new contract that did not reflect major
cuts. The alternative, declared by the Respondent, was plant
closure. These representations had dire implications for em-
ployees in the unit, and their bargaining representative had
a right to adopt a protective course by taking measures de-
signed to assure that the Respondent’s pleas of poverty were
founded on fact, rather than a falsely premised, bargaining
stratagem. In sum, the Respondent had adopted a bargaining
stance which provided the Union an enforceable statutory
right to conduct a financial audit, and, to that end, to obtain
the information outlined in its letter of August 12.4 Accord-
ingly, the Respondent, on and after June 9 and August 12,
having failed to make a complete return in that regard,5 vio-
lated Section 8(a)(5) and (1) of the Act.
B. Interference, Restraint, and Coercion
It is alleged that, on or about September 1, 1992, the Re-
spondent violated Section 8(a)(1) when Lachmann threatened
employees with loss of employment because they protested
certain unilateral changes. In support, Rose Torres, an em-
ployee with 25 years service, testified that on the date in
question, she and a coworker, Sandra Witkowski, confronted
Lachmann concerning their vacation pay. Lachmann blamed
the Union, and an argument ensued concerning the com-
pany’s efforts to reduce benefits. Ultimately, when
Witkowski protested the failure to pay the vacation benefits,
noting the length of service they held and that they deserved
better treatment, Lachmann replied that ‘‘if . . . [they] . . .
didn’t like it . . . [they] . . . could quit . . . and . . . [they]
. . . didn’t deserve a vacation.’’ As the General Counsel cor-
rectly observes, under the precedent, the suggestion that em-
ployees quit rather than protest an unlawful termination of
benefits has been equated with a threat tending to impede
employees in the exercise of Section 7 rights. Bill Scott
Oldsmobile, 282 NLRB 1073, 1074 (1987). The Respondent
thereby violated Section 8(a)(1) of the Act.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The Respondent violated Section 8(a)(1) of the Act by
informing employees that they should quit, rather than com-
plain about unlawfully denied employment terms.
4. The Respondent violated Section 8(a)(5) and (1) of the
Act by, without first notifying or providing an opportunity to
bargain to the exclusive collective-bargaining agent, reducing
wage rates, refusing to pay accrued holiday and vacation
benefits, and terminating health, welfare, and pension con-
tributions on behalf of employees in the following appro-
priate unit:
All production and maintenance employees, excluding
nonworking supervisory foremen, office workers, sales
men, and engineers.
5. The Respondent violated Section 8(a)(5) and (1) of the
Act by, on June 9 and August 12, 1992, refusing to provide
the Union with information relevant and necessary to its du-
ties as exclusive bargaining agent for the aforedescribed em-
ployees.
6. The above unfair labor practices affect commerce within
the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has engaged in certain
unfair labor practices, it shall be recommended that it be or-
dered to cease and desist therefrom and to take certain af-
firmative action designed to effectuate the policies of the
Act.
Having found that the Respondent violated Section 8(a)(5)
and (1) of the Act by unilaterally reducing wage rates and
declining to compensate employees for accrued holiday and
1273GAUCHO FOOD PRODUCTS
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.
7 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
vacation benefits, it shall be recommended that the Respond-
ent be ordered to make whole employees for losses incurred
thereby.
Having found that the Respondent further violated Section
8(a)(5) and (1) of the Act by unilaterally suspending con-
tributions to health, welfare and pension plans covering em-
ployees in the appropriate bargaining unit, it shall be rec-
ommended that the Funds affected be reimbursed in full for
all delinquencies incurred until the Respondent either agrees
to renew its obligations in that regard or, following good
faith bargaining, until a genuine impasse is reached with re-
spect to termination of such benefits. In the interim, it shall
be recommended further that the employees be made whole
for any losses they sustained by reason of noneligibility for
benefits in consequence of the Respondent’s discontinuance
of such contributions.
All sums due under the terms of the recommended Order
shall include interest as prescribed in New Horizons for the
Retarded, 283 NLRB 1173 (1987).
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended6
ORDER
The Respondent, Gaucho Meats, Inc., Chicago, Illinois, its
officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Advising employees that they should quit, rather than
protest unilateral changes in their employment terms.
(b) Refusing to bargain in good faith with the Union con-
cerning the rates of pay, wages, hours and working condi-
tions of employees in the following appropriate unit:
All production and maintenance employees, excluding
non-working supervising foreman, superintendents, of-
fice workers, salesmen, chauffeurs and engineers.
(c) Refusing to bargain in good faith by unilaterally, and—
without prior notice to the Union and without negotiating to
impasse with—reducing wage rates, refusing to pay accrued
holiday and vacation benefits, and terminating health, wel-
fare, and pension contributions on behalf of said employees.
(d) Refusing to bargain in good faith by failing, on re-
quest, to furnish information relevant and necessary to the
Union’s performance as exclusive representative of employ-
ees in the aforedescribed collective bargaining unit.
(e) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Bargain in good faith with the Union concerning
wages, hours, and terms and conditions of employment of
employees in the aforedescribed appropriate unit.
(b) On request, furnish the Union the information sought
in its letter of August 12, 1992.
(c) Make whole employees in the above unit for reduced
wages, and unpaid holiday and vacation pay, with interest,
as set forth in the remedy section of this decision.
(d) Reimburse the Local 100-A Health and Welfare Fund
and the Local 100-A Pension Fund for unpaid contributions,
with interest.
(e) Reimburse employees in the above unit for any and all
losses sustained by reason of any loss of eligibility for health
and welfare benefits caused by the unilateral suspension of
contributions, with interest.
(f) Preserve and, on request, make available to the Board
and its agents for examination and copying, all payroll
records, social security records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of backpay due under the terms of this order.
(g) Post at Its facility in Chicago, Illinois, copies of the
attached notice marked ‘‘Appendix.’’7 Copies of the notice,
on forms provided by the Regional Director for Region 13,
after being signed by the Respondent’s authorized representa-
tive, shall be posted by the Respondent immediately upon re-
ceipt and maintained for 60 consecutive days in conspicuous
places including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, de-
faced, or covered by any other material.
(h) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.