General Controls Co.

National Labor Relations Board - Board Decisions

Mar 22, 1950

88 N.L.R.B. 1341 (N.L.R.B. 1950)

In the Matter of GENERAL CONTROLS Co., A CORPORATION and INTER-
NATIONAL ASSOCIATION OF MACHINISTS , LOCAL LODGE NO. 1600
Case No. 21-CA-256.-Decided March 22,1950
DECISION
AND
ORDER
On August 8, 1949, Trial Examiner David London issued his In-
termediate Report in the above-entitled proceeding, finding that the
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. He also found that the Respondent
had not engaged in certain other unfair labor practices alleged in the
complaint and recommended dismissal of this allegation. Thereafter
the Respondent and the General Counsel filed exceptions to the Inter-
mediate Report, and the Respondent filed a supporting brief.
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 Inter-
mediate Report, the exceptions filed by the Respondent and the General
Counsel, the Respondent's brief, and the entire record in the case, and
hereby adopts the findings, conclusions, and recommendations of the
Trial Examiner, except insofar as they are inconsistent with this
Decision and Order.'
1. The Trial Examiner found that, by the contract of May 7, 1948,
the Union ceded to the Respondent the exclusive right to grant uni-
lateral individual periodic merit increases. Accordingly, he con-
cluded that the Respondent did not violate Section 8 (a) (1) and (a)
(5) of the Act by granting such merit increases to its employees, over
the objection of the Union, during the term of the contract. The
' The Intermediate Report contains several inadvertent typographical errors which we
hereby correct as follows :
The rate range provided in the contract for carpenter 's helpers should be 0.90-1.20
Instead of 0.95-1 . 25 ; the score range for the highest group in the interpretive merit
rating results should be 100-120 instead of 100-200, and that for the lower group should
be 2-19 instead of 1-19 . These corrections do not, however , have any material effect upon
the disposition of the issues herein.
88 NLRB No. 242.
1341
1342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel has excepted to this conclusion. We find no merit
in this exception.
It is now beyond dispute that an employer is under a duty to bargain
with the representative of its employees with respect to individual
merit increases. That question was settled in the Allison case.2 Had
the Respondent flatly refused to discuss the matter, or adamantly
insisted upon its right to grant merit increases unilaterally, there could
be no question that it had violated Section 8 (a) (1) and (a) (5).
However, those are not the facts here. The problem posed by this case
is: Did the 1948 contract clearly bargain away the right the Union
would otherwise have had to participate in and bargain with respect
to individual merit increases, during the term of the contract? The
Trial Examiner answered this question in the affirmative. We agree.
Here, unlike the situation confronting us in the Allison case, the con-
tract provided for both minimum and maximum wage rates in each
classification, and the parties had bargained for, and agreed upon, an
elaborate merit rating system which contemplated individual periodic
merit increases. The parties unquestionably intended the Respondent
to have the right in the first instance, not only to* determine each
employee's merit rating score, but also to determine each man's right
to periodic merit increases. Any other view would place a strained
and unrealistic interpretation upon the contract's provisions. More-
over, as pointed out by the Trial Examiner, the Union's silence over a
long period of time, during which the Respondent unilaterally granted
numerous increases, lends weight to this conclusion. We therefore
find that, during the term of the contract, the Respondent was under
no obligation to bargain collectively with respect to individual periodic
merit increases before they were put into effect, so long as it observed
the minimum and maximum pay rates provided for in the contract.
It follows that this Respondent did not violate the Act by unilaterally
granting such merit increases during the contract term.
2. We also agree with the Trial Examiner's finding that the Re-
spondent did violate Section 8 (a) (1) and (a) (5) of the Act by
refusing to furnish the Union, upon request, with certain information.
In reaching this conclusion, we rely specifically upon the following
acts of the Respondent :
a. On October 18, 1948, the Union requested the Respondent, in
writing, to furnish it with "a list of the names of employees who
received merit increases at the last time merit increases were granted,
together with the raise that was granted each employee," and "the
present rate of pay and classification of each employee." At the same
IN. L. R. B. V. J. H. Allison cE Company, 165 F. 2d 766 ( C. A. 6), certiorari denied, 355
U. S. 814 , rehearing denied, 335 U. S. 905.
GENERAL CONTROLS CO. 1343'
time, the Union orally requested the merit rating score of each em-
ployee .3 These requests were denied in writing on October 22, 1948.
b. In February or March 1949 during negotiations for renewal of:
the 1948 contract, the Union again orally requested that it be furnished.
with the merit rating score of each employee.4 The Respondent again.
refused.
All the information requested by the Union was necessary in order
for the Union effectively to police the existing contract,' and in order
for it intelligently to bargain with respect to future contracts. With-
out such information, the Union would be seriously hampered.&
Under these circumstances, we have consistently held that withholding
this type of information, when requested, constitutes a violation of
the Act.' The courts have approved this doctrine." And the result
has been the same whether the demand and refusal occurred at the
time of contract negotiations, or in the middle of the term.9
The fact that the parties allowed the contract to renew itself auto-
matically after the filing of the instant complaint does not, in itself,.
constitute a waiver of the Union's right to obtain information to,
which it was otherwise entitled. As we noted in a recent decision : ",
We are reluctant to deprive employees of any of the rights guar-
anteed them by the Act in the absence of a clear and unmistakable
showing of a waiver of such rights.
No such clear and unmistakable waiver appears herein. In discussing
a similar contention, the Court of Appeals for the Sixth Circuit
stated :11
9 When a merit increase is granted , the Respondent prepares a Change of Status Notice
recording the pertinent facts , and gives a copy to the employee concerned . In October
1948 the Union suggested to the Respondent that an additional carbon copy of each such
notice could be given to the Union.
4 On this occasion , the Union repeated its suggestion with respect to carbon copies of
the Change oT Status Notices described in footnote 3, above.
5 Necessary for the reasons given by the Trial Examiner , Intermediate Report , page 1355.
" See discussion of this point in Aluminum Ore Company, 39 NLRB 1286 , at page 1297,
enforced 131 F . 2d 485 (C. A. 7).
4 Aluminum Ore Company , supra ; J. H. Allison & Company, 70 NLRB 377 ; National
Grinding Wheel Company, 75 NLRB 905 ; Dixie Manufacturing Company, Inc ., 79 NLRB
645 ; and Vanette Hosiery Mills , 80 NLRB 1116.
6 N. L. R. B. V. J. H. Allison & Company, supra ; and Aluminum, Ore Company v. N. L. R. B.,.
131 F . 2d 485 ( C. A. 7). In the latter case, the court stated, at page 487: "We do not
believe that it was the intent of Congress in this legislation that , in the collective bargain-
ing prescribed , the union , as representative of the employees , should be deprived of the
pertinent facts constituting the wage history of its members."
U National Grinding Wheel Company, supra.
10 Tide Water Associated Oil Company , 85 NLRB 1096.
'IN . L. R. B. v. J. H. Allison & Company, supra, at p . 768. Seq also National Grindings
Wheel Company, supra, in which the Board held that , by failing to press its demands at
a bargaining conference , the Union had not waived its right to obtain information
thereafter.
1344 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nor do we see logical justification in the view that in entering
into a collective bargaining agreement for a new year, even though
the contract was silent upon a controverted matter, the union
should be held to have waived any rights secured under the Act,
including its right to have a say- so as to so-called merit increases.
Such, interpretation would seem to be disruptive rather than fos-
tering in its effect upon collective bargaining, the national de-
sideratum disclosed in the broad terms of the first section of the
National Labor Relations Act.
-While the Respondent was willing to disclose information with re-
'spect to specific employees involved in grievances and complaints'12 it
steadfastly refused such information on an over-all basis. Its posi-
tion was summed up by one of its officials as follows :
If there is a grievance or complaint that the Union wants that
information, the Company will give it, but as an over-all practice
I do not feel that the contract required it . . . if a grievance
occurs and ... they ask for specific ratings for employees for
comparison, the Company will give it.
This partial compliance with the Union's request was insufficient, how-
ever, to satisfy the statutory duty imposed upon the Respondent to
bargain collectively with the Union in good faith. Nor can the Re-
spondent excuse its refusal to furnish such information on the grounds
of a possible reluctance of the employees to have such information
disclosed, or that other sources of this information might be available
to the Union.13 Accordingly, we find that the Respondent, on and
after October 18, 1948, violated Section 8 (a) (1) and (a) (5) of the
Act by failing and refusing, upon request, to disclose to the Union in-
formation with respect to the name, classification, rate of pay, and
merit rating score of each employee, and full information with re-
spect to all individual periodic merit increases or decreases put into
effect. -
The Remedy
We have found that the Respondent has refused to bargain with the
Union by refusing and failing to furnish the Union, upon request, with
the name, classification, rate of pay, and merit rating score of each em-
ployee, and with full information with respect to individual periodic
merit increases or decreases, including the names of employees who
12 The Trial Examiner found that information "was furnished by the Respondent only
in connection with grievances ." The Respondent has excepted . The record indicates, and
we find , that information was supplied by the Respondent to the Union not only for indi-
vidual grievances , but also in connection with individual complaints . Such finding does
not , however , substantially affect our ultimate conclusions herein.
" Aluminum Ore Company v. N. L. R. B., supra; J. H. Allison & Company , supra.
GENERAL CONTROLS CO. 1345
received such increases or decreases , the amount of such increases or
decreases , and the dates on which such increases or decreases were put
into effect . Accordingly, we will order the Respondent to supply such
information to the Union, upon request 14
Because of the limited scope of the Respondent's refusal to bargain,
and because of the absence of any indication that danger of other
unfair labor practices is to be anticipated from the Respondent's con-
duct in the past, we shall not order the Respondent to cease and desist
from the commission of any other unfair labor practices. 15
ORDER
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, the National Labor Relations
Board hereby orders that the Respondent, General Controls Co., a
corporation, Glendale, California, and its officers, agents, successors,
and assigns shall :
1. Cease and desist from refusing to bargain collectively with In-
ternational Association of Machinists, Local Lodge No. 1600, as the
exclusive representative of all its production and maintenance em-
ployees, including tool design employees, but excluding professional
technical, and clerical employees, guards, and supervisors, as defined
in the Act, by refusing or failing to furnish to said labor organization,
upon request, the name, classification, rate of pay, and merit rating
score of each employee in the said unit, and full information with
respect to individual periodic merit increases or decreases granted
to any such employee.
2. Take the following affirmative action, which the Board finds will
effectuate the policies of the Act :
(a) Upon request, furnish to International Association of Machin-
ists, Local Lodge No. 1600, as the exclusive representative of all its
employees in the said unit, the name, classification, rate of pay, and
merit rating score of each employee in the said unit, and full infor-
mation with respect to individual periodic merit wage increases or
decreases, including the names of employees who received such in-
creases or decreases, the amount of such increases or decreases, and
the dates on which such increases or decreases were put into effect;
14 The Trial Examiner recommended that the Respondent be directed to furnish the Union,
upon request, with "the names of employees who received merit increases since the last
time such increases were granted prior to October 18, 1948 [and] the amount of such
increases." The General Counsel has excepted to this recommendation, asserting that it
is too narrow, We agree. We are of the opinion and find that the Union is entitled
to information with respect to all merit increases or decreases, and should not be limited
to those increases or decreases put into effect prior to October 18, 1948.
15 Allied Mills, Inc. 82 NLRB 854 ; Alaminum Ore Company v. N. L. R. B., supra, at
p. 487; and J . H. Allison & Company , 70 NLRB 377, at p. 379, enforced 165 F. 2d 766
( C. A. 6), certiorari denied , 335 U. S. 814, rehearing denied U. S. 905.
1346 DECISIONS OF. NATIONAL LABOR RELATIONS BOARD
(b) Post at its plant at Glendale, California, copies of the notice at-
tached hereto, marked Appendix A?8 Copies of said notice, to be
furnished by the Regional Director for the Twenty-first Region, shall,
after being duly signed by the Respondent's representative, be posted
by the Respondent immediately upon receipt thereof and maintained
by it for sixty (60) consecutive days thereafter in conspicuous places,
including all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respondent to insure
that such notices are not altered, defaced, or covered by any other
material;
(c) Notify the Regional Director for the Twenty-first Region in
writing, within ten (10) days from the date of this Order, of the steps
the Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that the complaint be, and it hereby is, dis-
missed, insofar as it alleges that the Respondent violated Section 8
(a) (1) and (a) (5) of the Act by refusing to bargain collectively
in good faith with the Union, as the representative of its employees,
concerning the granting or withholding of individual periodic merit
increases, during the term of the contract executed on May 7, 1948.
MEMBER STYLES took no part in the consideration of the above
Decision and Order.
MEMBER REYNOLDS, dissenting :
I dissent from the Decision and Order in this case and would dis-
miss the complaint in its entirety.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that :
WE WILL, upon request, furnish to INTERNATIONAL ASSOCIATION
OF MACHINISTS, LOCAL LODGE No. 1600, as the exclusive representa-
tive of all the employees in the bargaining unit described herein,
the name, classification, rate of pay, and merit rating score of each
employee in the said unit, and full information with respect to
individual periodic merit wage increases and decreases, including
the names of employees who received such increases or decreases,
16 In the event that this Order is enforced by decree of a United States Court of Appeals,
there shall be inserted in the notice , before the words : "A DECISION AND ORDER," the
words : "A DECREE OF THE UNITED STATES COURT OF APPEALS ENFORCING."
GENERAL CONTROLS CO. -1347
the amounts of such increases or decreases, and the dates. on which
such increases or decreases were put into effect.
The bargaining unit is: All production and maintenance em-
ployees, including tool design employees, but excluding profes-
sional, technical, and clerical employees, guards, and supervisors,
as defined in the Act.
GENERAL CONTROLS CO.,
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.
INTERMEDIATE REPORT
Mr. Jerome Smith, for the General Counsel.
Mr. William T. Doyle, of San Francisco, Calif., for the Respondent.
Messrs. E. R. White and E. M. Skagen, of Los Angeles, Calif., for the charging-.
parties.
STATEMENT OF THE CASE
Upon a charge duly filed by International Association of Machinists, for its.
Local Lodge No. 1600, herein called the Union , the Regional Director for the.
Twenty-first Region ( Los Angeles , California ) of the National Labor Relations.
Board, herein called the Board , issued a complaint , dated January 26, 1949,.
against General Controls Co ., herein called the Respondent . The complaint.
alleged that Respondent had engaged in and was engaging in unfair labor prac-
tices affecting commerce within the meaning of Section 8 ( a) (1) and (5) and
Section 2 ( 6) and ( 7) of the National Labor Relations Act, as amended , Public-
Law 101, 80th Congress , 1st Session , herein called the Act. Copies of the charge,.
the complaint , and notice of hearing thereon, were duly served upon the Respond-
ent and the Union.
With respect to the unfair labor practices, the complaint alleged, in substance,.
that the Respondent on May 7, 1948, and at all times thereafter , refused and
failed to bargain* collectively in good faith with the Union : ( a) with respect to.
merit increases ; ( b) with respect to furnishing the Union with information
readily available to the Respondent , but not to the Union , and necessary to the.
latter in the process of collective bargaining and in the administration of its.
contract with Respondent ; and (c ) with respect to merit increases awarded by
Respondent unilaterally from time to time. The complaint further alleged that
by the afore -described conduct, Respondent interfered with, restrained, and,
coerced its employees in the exercise of rights guaranteed by Section 7 of the
Act. Respondent thereafter filed its answer in which it admitted that the Union
had been designated and selected as bargaining representative by a majority
of the employees in an appropriate unit, but denied that it had refused to bargain
with the Union , or that it had engaged in any unfair practices.
Pursuant to notice , a hearing was held on May 24, 1949 , at Los Angeles, Cali-
fornia, before the undersigned Trial Examiner , duly designated by the Chief
Trial Examiner . The General Counsel, the Respondent , and the Union were.
each represented by counsel and participated in the hearing . Full opportunity-
882191-51-86
1348- DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to be heard, to examine and cross-examine witnesses, and to introduce evidence
bearing upon the issues was afforded all parties. All the parties participated in
oral argument at the close of the hearing. On request of counsel for the Re-
spondent, the time to file briefs was extended to June 20, 1949, within which
time the General Counsel and the Respondent filed briefs with the Trial
Examiner.
Upon the entire record in the case, the undersigned makes the following :
FINDINGS or FACT
1. THE BUSINESS OF THE RESPONDENT
General Controls Co. is a California corporation with its principal office and
place of business at Glendale, California, where it is engaged in the manufacture
and sale of automatic pressure, temperature, and flow controls. In the course
of its business during the calendar year 1948, the Respondent caused a substantial
amount of materials to be purchased, shipped, and transported in interstate
commerce from and through States of the United States other than the State of
California, to its plant at Glendale, California, and caused a substantial amount
of the products manufactured, sold, and distributed by it as a part of its business
to be sold and transported in interstate and foreign commerce into and through
States of the United States other than the State of California, from its plant in
Glendale, California. I therefore find that Respondent is engaged in commerce
within the meaning of the Act.
H. THE ORGANIZATION INVOLVED
International Association of Machinists, Local Lodge No. 1600, is a labor or-
ganization admitting to membership employees of the Respondent.
III. THE UNFAIR LABOR PRACTICES
A. The appropriate unit and representation by the Union of the majority therein
By an agreement entered into between the Respondent and the Union, effec-
tive May 7, 1948, the Respondent recognized "the Union as the sole collective
bargaining agency for all employees within the bargaining unit as provided in
the National Labor Relations Board certification dated April 16, 1946, namely,
all production and maintenance employees, including Tool Design'employees as
provided in National Labor Relations Board certification dated June 14, 1946,
except for professional, and technical employees (except as provided above) and
Clerical employees, guards, and all supervisory employees with authority to hire,
promote, discharge, discipline and otherwise effect changes in the status of
employees or effectively recommend such action," The undersigned finds, in
accordance with said agreement, that all production and maintenance employees,
as above described and with the exceptions above noted, constitute a unit appro-
priate for the purpose of collective bargaining within the meaning of Section
9 (b) of the Act. I further find that on, and at all times after, May 7, 1948, the
Union was the duly designated bargaining representative of a majority of the
employees in the aforesaid bargaining unit, and that pursuant to the provisions
of Section 9 (a) of the Act, the Union was, on May 7, 1948, and at all times
thereafter has been, the exclusive bargaining representative of all employees in
the aforesaid unit for the purposes of collective bargaining with respect to
rates of pay, wages, hours of employment, and other conditions of employment.
GENERAL CONTROLS CO. 1349
B. The alleged refusal to bargain 1
The issues presented are : Did Respondent violate its statutory duty. to bargain
with the Union: (1) by refusing to negotiate with the. latter on merit wage
increases 2 between specified minimum and maximum wages established by an
existing bargaining agreement; and (2) by'refusing to provide the Union with
requested wage and merit score data.
The first bargaining contract between Respondent and the Union was entered
into on June 24, 1946, and was renewed at approximately yearly intervals in
1947, 1948, and 1949. Though the other contracts were not offered in evidence,
the parties are in agreement that, except for matters not relevant to this pro-
ceeding, the contracts were similar, in substance and form, to the contract exe-
cuted May 7, 1948. The latter is the agreement involved in this proceeding, and
upon which Respondent relies for its defense herein'
It "recognizes the. Union as the sole collective bargaining agency for all em-
ployees within the bargaining unit," but grants to the respondent "the exclusive
right and power-to promote, demote, transfer, or discharge for just cause
subject to the provisions of this Agreement ; suspensions, discharges, lay-offs,
promotions-shall be subject to the grievance procedure."
Article V, Section A of the Agreement reads as follows :
A Company-Union approved Merit Rating Plan shall be used by the Com-
pany for determining the capability of employees and their relative fitness
for their jobs. Every employee shall thus be reviewed no less than every four
months from his date of original employment and the resulting rating score
shall serve as a basis for promotions, wage adjustments (as provided in
Article VI), demotions, transfers, lay-offs, and discharges. [Emphasis
supplied.]
Article VI, Section A reads :
It is agreed that employees will be classified in accordance with work re-
quirements and their ability to perform the assigned work and shall receive
wages in accordance with the wage schedule of the job classification attached
hereto.
Article VI, Section D reads as follows:
Each employee shall be reviewed every four months from his original
date of employment as set forth in Article V in order to ascertain whether
his rating warrants a wage adjustment within his classification wage range.
A special review for an employee may be made in the event of change in con-
ditions sufficient to warrant such special review.
1 The record contains no substantial disputed questions of fact.
2 During the hearing, Respondent objected to the use of the term "merit increase,"
claiming that the contract with the Union speaks only of "wage adjustment." Interest-
ing as such a distinction might become as a study in semantics, I find it of no value here.
The contract, more fully described hereafter, clearly shows that the increases were, in
fact, to be based on merit.
3 A copy of this Agreement was received in evidence without objection and all the parties
assumed it to be the contract in effect during the period involved herein. The preamble,
however, recites that it is an agreement between the Respondent "and the Machinists
District No. 156, Precision Lodge No. 1600, of the International Association of Machinists."
Though the latter name does not correspond with that of the Union mentioned in either
the charge or the complaint, the conduct of all the parties at the hearing herein, as well
as the discussion thereof in their respective briefs filed with me, indicates, and I find, that
the foregoing contract governed the Union and the Respondent at all times relevant herein.
1350 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Article IX, Section A provides :
Seniority is the right accrued by employees by length of service in lay-offs,
recalls, promotions and transfers under the following conditions : Employees
shall be rated by means of a merit rating system every four months as set
forth in Article V, and Exhibit I and II. If the senior employees rating
thus established is good or better than that of an employee with less seniority,
length of service shall govern, but if the rating of the employee with less
seniority is better than that of the employee with greater seniority, the em-
ployee with less seniority shall receive preferential consideration.
Attached to the contract, as Exhibit III, is a "Factory Wage Schedule," pre-
scribing minimum and maximum hourly rates for 106 job classifications. The
wages for each of the different types of work have an established minimum and
maximum wage which varies from 5 cents per hour, to 30 cents per hour. The
following examples are illustrative of the wages established for the 106 job,
descriptions covered by the schedule.
Job classification Rate range for skill
Production Control: A B
Truckers---------------------------------- 0.95-1.15
Tooling Shop:
Leadman---------------------------------- 1.85-2.00
Building Maintenance :
Carpenter's Helpers-----------------------. 0.95-1.25
Tool Engineering :
Tool Designer Draftsman------------------ 1.80-2.,05 1.50-1. 75
Also attached to the contract, as Exhibit I, is an "Employee Review Report,"
to be used by the foreman of each department in grading the employees under
his supervision. Each employee's work is checked on eight characteristics and.
the rating on each characteristic is one of four grades ranging from "consistently
high," or its equivalent, to "careless," or its equivalent. No numerical ratings
are given by the foremen, but these are computed by Respondent's Personnel.
Office from a formula or schedule of points which vary for each characteristic and'.
grade.' The resultant total constitutes the employee's "merit score." The
final step in the merit rating is accomplished by resort to Exhibit II, attached to.
the bargaining contract, and which reads as follows :
INTERPRETIVE MERIT RATING RESULT
Score Range
100-200 Excellent Worker-Promotional material, deserving of top wage
within classification.
85- 99 Above Average Good Worker-Deserving of special considerations
in wage review provided quantity and quality of work and knowl-
edge of job are checked off in Column 1.
62- 84 Good Worker-Deserving of consideration for periodic wage in-
creases with view of permitting him to reach top wage rate in his
classification over a period of time, providing quantity and qual-
ity of work are checked off in Columns 1 or 2.
"The formula or schedule of points is not made available to the employees or the fore-
men, but a copy thereof is furnished to the Union.
GENERAL CONTROLS CO. 1351
Score Range
52- 61 Average Worker-Improvements in his work or conduct required ;
is however, deserving of consideration for periodic wage review.
30- 51 Below Average Worker-Should be re-rated within 30 days and if
no decided improvement is made, a warning notice should be given.
20- 29 Borderline Worker-Should be re-rated within a two-week period
and discharged if no decided improvement is noted.
1- 19 Poor Worker-Should be discharged.
In case of promotions, demotions, transfers, lay-offs, and recalls, employ-
ees within a higher score range shall receive preference over any employee
within a lower rating score range. Seniority shall govern within each
individual score range.
EXAMPLE No. 1. A junior employee with a score of 85 will receive preference
over a senior employee with a score of 84; a junior employee with a score
of 30 will receive preference over a senior employee with a score of 29.
A junior employee with a score of 62 will receive preference over a senior
employee with a score of 61.
EXAMPLE No. 2. A senior employee with a rating of 52 will receive preference
over an employee with a rating of 61. (which is within an individual score
range). A senior employee with a rating of 30 will receive preference
over a junior employee with a rating of 51.
The testimony was uncontradicted that if an employee had a merit rating of
62 or higher, he generally received a 5 cents per hour increase every 4 months
until he reached the maximum rate within his range. In some instances, how-
ever, the increase was granted even though only a rating of 61 or under was
achieved by the employee. At the time of the hearing, 95 percent of Respondent's
employee were receiving the maximum rate.
The Respondent admitted that it never consulted the Union in rating its
employees, and the General Counsel and the Union conceded that the latter had
no right to be so consulted.' Respondent also admitted it made all of its wage
adjustments between the permitted minima and maxima without consulting or
bargaining with the Union.
On October 16, 1948, the Union informed Respondent, in writing, that by
reason of the refusal of the Supreme Court to grant certiorari in the Allison
-case,' it was the position of the Union that "merit raises can no longer be granted
by the Company unless proper union representation is present at the time the
-determinations are made as to whether or not one employee or another is entitled
to a pay increase resulting from merit.. . . This Union is ready and willing to
meet with you at any time when the contract calls for merit increases." On Octo-
ber 18, 1948, the Union further advised Respondent, in writing, that in order to
bargain collectively on merit increases, it required "a list of the names of em-
ployees who received merit increases at the last time merit increases were granted,
together with the raise that was granted each employee. This information is nec-
•essary as a basis for further collective bargaining on merit increases in the future.
We should like also to request that you inform us of the present rate of pay and
-classification of each employee."
On October 22, 1948, Respondent acknowledged receipt of both letters and
informed the Union as follows :
° This concession was made because Article VI, Section A of the contract supra,
specifically provided that the "merit rating plan shall be used by the Company for
determining the capability of employees and their relative fitness for their job."
ON. L. R. B. v. Allison, 165 F. 2d 766 (C. A. 6), cert. denied, 335 U. S. 814 , rehearing
denied, 335 U. S. 905.
1352 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Please be advised that we have referred this matter to our attorneys who
advise us that in their opinion the [Allison] decision to which you refer is
not applicable. They advise us as follows :
(a) That as long as an increase between the established minimum and
maximum is made, no negotiations need be had with the Union ; that in the
event of an increase over the established maximum such negotiations would
probably be required.
(b) That we are not required nor should we give to you the information
requested by you in this letter of October 18, 1948.
On April 15, 1949, following a layoff in the Assembly Department, the Union
demanded "a complete seniority list of [that] department as of April 1, prior to
this layoff, . . . with the rating reviews of all the employees . . . We need this
information,-as we have complaints pertaining to the Assembly Department and
[we] need it to justify the layoffs the Company has made, or not to justify it."
Respondent has consistently maintained the position outlined in its letter of
October 22, has refused to consult or bargain with the Union on wage adjust-
ments,' and has refused to furnish the information demanded by the Union.
Its position is that the entire matter of merit ratings is fully covered by the con-
tract and that its statutory duty to bargain with respect thereto was satisfied
when the bargaining contract was executed.
C. Concluding findings
1. The alleged refusal to bargain on merit increases
There can be no question but that if the contract were silent on the question
of merit increases, or if it merely provided a minimum scale of wages, the Re-
spondent could not unilaterally grant individual or group merit wage increases!
The Act came into being because "experience has proved that protection by law
of the right of employees to . . . bargain collectively . . . remov[es] certain
recognized sources of industrial strife and unrest . . . and restor[es] equality of
bargaining power between employers and employees."' To make such bargaining
power effective, Congress decreed that a properly designated representative "shall
be the exclusive representative of all the employees in such unit for the purpose of
collective bargaining in respect to rates of pay, wages," etc." This fundamental
right would be completely frustrated if an -employer were permitted to unilaterally
grant merit increases in pay, regardless of how advantageous such increases
would be to the recipients thereof.. "Such unilateral action minimizes the in-
fluence of collective bargaining. It interferes with the right to self-organization
by emphasizing to the employees that there is no necessity for a collective
bargaining agent." "
Recognition of these well-established principles, however, does not solve our
problem. Nor are we here confronted with the question of whether, during
negotiations for a contract, a demand by an employer for the right to unilaterally
grant merit increases between definitely established minimum and maximum
7 Respondent always conceded, and now acknowledges, that such wage adjustments were
and are subject to the grievance procedure established by the contract and described in
latter portions of this report.
8 N. L. R. B. v. Allison and Co ., supra; Aluminum Ore Co . v. N. L. R. B ., 131 F. 2d
485 (C. A. 7).
9 Sectioh 1 of the Act.
10 Section 9 (a) of the Act.
11 May Department Stores v. N.L . R.`B., 326 U. S. 376, 385.
GENERAL CONTROLS CO. 1353
wages would demonstrate a lack of the good faith required by the bargaining
process. Nor is any claim made that it would be contrary to the letter or the
spirit of the Act, to permit the parties to a labor bargaining contract to agree that
the wages of employees shall be in amounts between definitely fixed sums , the exact
amount to be determined by one of the parties thereto. Our task is to determine
whether merit wage increases were in fact negotiated with the Union and agree-
ment thereon reached in the contract executed on May 7, 1948. Here, Respond-
ent claims such an agreement was reached with the Union and, with the consent of
the latter, authority to unilaterally grant such increases was vested in Respond-
ent. The General Counsel on the other hand says, "It is clear that there is no,
provision [in the contract] concerning the question of who is to participate in the
making of wage adjustments" and that by reason of the rule laid down in the
Allison case, supra, such adjustments must now be the subject of negotiations and
bargaining with the Union. I find myself unable to agree with the General
Counsel in hiS analysis of the contract of May 7, or the applicability of the Allison
case.
Article V, Section A of the contract specifically provides that the "Merit Rating
Plan shall be used by the Company for determining the capability of employees.
Every employee shall thus be reviewed no less than every four months and the
resultant rating score shall serve as a basis for . . . wage adjustments." [Em-
phasis supplied.] To the undersigned, this language can only mean that the merit
rating given to the employees, which the General Counsel and the Union concede is
initially the exclusive prerogative of Respondent," shall likewise " serve as a basis
for wage adjustments" to be made effective through unilateral action by Respond-
ent. Indeed, both parties to the agreement so interpreted the contract. Though
literally thousands of wage adjustments were unilaterally made by Respondent in
the meantime, no credible evidence was received indicating that at any time prior
to October 17, 1948, did the Union ever claim it had the right to negotiate on these
adjustments. Such conduct by the Union lends persuasive weight to the inter-
pretation I have placed on the contract. It was the Allison decision in the Circuit
Court of Appeals which prompted the Union to change its position. That it was
a change of position is clearly shown by the letter of October 16, in which the
Union notified Respondent that by reason of that decision "merit increases can
no longer be granted by the Company unless proper union representation is
present at the time the determinations are made."
The reliance of both the General Counsel and the Union on the Allison case is,
however, misplaced. The opinion in that case introduced no new principle or
rule in the administration of the Act. In that case the labor bargaining contract
provided only for a minimum wage scale. No provision was made therein for
merit increases ; indeed, the subject was not mentioned in the agreement. While
the contract was in effect, the company, in conformity with past practice, gave
merit wage increases to a substantial group of its employees. The union there-
upon demanded of the company certain wage information pertaining to employees
who had received such increases, claiming that such information was necessary to,
enable it to further bargain on wage rates. The company rejected the demand on
the ground "that merit increases are not a proper subject matter for collective
bargaining , but fall within exclusive managerial function." The Board 13 and the
Court of Appeals " were in agreement that the refusal of the company to bargain
12 Respondent admitted that merit ratings were subject to the grievance procedure, pre-
scribed by the agreement.
13 70 NLRB 377.
14 165 F. 2d 766 (C. A. 6).
1354 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
with respect to merit increases, and its refusal to furnish the requested informa-
tion, were each in violation of the present Section 8 (a) (5) of the Act. The
Court, in sustaining the Board, concluded that the statutory duty to bargain
collectively with respect to wages "includes the duty to bargain . . . concerning
individual merit increases."
The decision was but another application of the well-established principle,
recognized by the Supreme Court in J. I. Case Co. v. N. L. R. B., 321 U. S. 332,
that wage increases cannot be individually negotiated, but must be the subject
,of collective bargaining. While resort to that well-established rule disposed
of the issues presented in the Allison case, it has no direct application here.
'There, only minimum wages were prescribed by the contract, the question of
merit increases was never negotiated, and wage increases were granted uni-
-laterally. Here, both minimum and maximum wages were agreed upon, merit
increases were the subject of a substantial part of the bargaining contract, and
the wage increases were made effective in accordance with the agreement of
the parties. The bargaining negotiations which the Board and the Court directed
-the Allison Company to enter into had already been consummated here when
.Respondent and the Union executed the contract of May 7,1948.
I conclude, therefore, that Respondent did not violate Section 8 (a) (5) of
the Act in granting merit increases to its employees pursuant to Article VI,
Section D of the contract of May 7, 1948, without additional consultation or
negotiation with the Union.
2. The refusal to supply merit 1° ratings and wage information
But the responsibility and obligation of both parties to the agreement were
not exhausted when Respondent and the Union appended their signatures to
the contract. Important as the execution of the agreement is in promoting in-
-dustrial cooperation, of even greated moment is the administration thereof. As
the duly recognized bargaining representative of Respondent's production and
'maintenance employees, it was the Union's duty to make such inquiries and
investigation as it deemed appropriate, in order to determine whether the bar-
gaining contract was being fairly and impartially administered. It would be
-derelict in the performance of its duty if it did less. The responsibility resting
upon the Union in the instaht case is even greater than that which ordinarily
rests on an employees' bargaining representative. Here, the Union had agreed
that wage increases might be unilaterally granted to a restricted number of
individuals, as distinguished from the entire group. Without intimating that
Respondent was guilty of any improper conduct or discrimination in the merit
increases which it granted, "the practice and philosophy of collective bargaining
looks with suspicion on such individual advantages. They are a fruitful way
-of interfering with organization. Increased compensation, if individually de-
served, is often earned at the cost of breaking down some other standard thought
to be for the welfare of the group, and always creates the suspicion of being
paid at the long range expense of the group as a whole." J. I. Case Co. v. N. L.
R. B. 321 U. S. 332, 338.
The parties to the contract themselves apparently recognized that differences
,of opinion as to the proper interpretation and administration of the contract
might arise and therefore established appropriate procedures for the adjustment
n Respondent objects to the consideration of the failure to supply "merit rating"
information on the ground that the subject is not specifically alleged in the charge. The
objection is without merit. National Licorice Company v . N. L. R. B., 309 U . S. 350; Bigga
Antique Co ., Inc., 80 NLRB 345.
GENERAL CONTROLS CO. 1355
of grievances.16 Respondent agrees that both merit ratings and wage adjust-
ments fall within the orbit of activity for which resort may be had to the griev-
ance procedure, either by an individual employee, or by the Union. But differ-
ences have arisen between the Respondent and the Union as to the information
requested by the Union, which the latter asserts it must have in order to deter-
mine whether the contract is being properly administered. The need for such
information was described by L. G. Hewitt, the Union's business representative,
who maintained constant contact with Respondent, and who testified as follows :
"Well, the foremen are the company's representatives who give the merit scores,
and because of the activities of some of the foremen we felt that there might be
discrimination existing in various departments, and that is another reason why
we wanted to know where the employees were located or placed in their range
of their merit review, between the minimum and maximum wage, and as to who
was getting the increase and who was not, because of those foremen that I have
mentioned."
There was an additional, and perhaps even a more important reason why the
Union was entitled to have detailed information as to the basis used by Respond-
ent in grading its employees. The contract provided that the "rating score shall
serve as a basis for promotions, layoffs and discharges." The value of the
rating score is accentuated in the case of layoffs and discharges because under
the contract (Example No. 1 of Interpretive Merit Rating Result, supra)
an employee with but 5 months' seniority, but enjoying a score of 85, receives
priority of treatment as to layoffs or discharges over an employee with 5 years,
seniority, but who has been graded 84. The importance of rating comes into
even bolder relief in the instant proceeding, because here, Respondent had
approximately 500 production and maintenance employees in October 1948, but
at the time of the hearing (May 24, 1949), this staff had been reduced to 240-
275. As to the intervening layoffs, Hewitt testified the Union "had no informa-
tion as to whether the Company was laying [them] off accurately or not. We
had complaints from the workers that they should not have been laid off because
of more seniority with the Company, and then we found that they had a low
merit score after investigation." When in December 1948, and again in Febru-
ary 1949, Hewitt "made requests for merit review scores . . . to see whether or
not the Company was laying off properly according to the contract," the request
was denied by the Respondent on the ground that it was "not required to do so
by the contract," and because some of the employees "were non-union mem-
bers . . . who might object to the Union having that information."
While Respondent agreed that it would furnish the requested information if
a grievance were filed, it would not do so to enable the Union "to check on
the administration of the contract." The Union, however, was entitled to have,
and indeed required, the requested merit rating and wage information in order
to determine whether grounds for a grievance existed. Without such data, it was
operating in the dark and could not determine whether the Respondent had been
guilty of maladministration of the contract. Nor was the Respondent's willing-
ness, or past practice, to supply the information only as to a limited number of
employees,11 compliance with its duty to furnish such information. Unless the
16 A grievance is defined by Article XVII of the Agreement "as a condition that exists
as a result of an unsatisfactory adjustment or failure to adjust a claim or dispute by an
employee or employees or the Union or the Company concerning rates of pay , hours, or
working conditions, or the interpretation or application of this agreement."
11 This information was furnished by Respondent only in connection with grievances.
1356 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
data were supplied department-wide in every department in which a merit rating
or increase was granted, the information Would not be complete. Nor is there
any merit to the second reason assigned by Respondent for refusing to supply
the. Union with the requested information-that there "were non-union mem-
bers .. who might object to the Union having that information." Such a con-
tention cannot stand "in the face of the expressed social and economic purposes
of the statute. [By refusing] to supply the wage history [Respondent] has
failed to co-operate whole-heartedly in collective bargaining." 18
I therefore conclude that when Respondent refused, on and after October 18,
1948, to furnish the Union with department-wide information as to the basis
employed by it in granting merit ratings and merit wage increases, it failed in
its statutory duty to bargain collectively with the Union in respect to wages and
other conditions of employment. Aluminum Ore Co. v. N. L. R. B., supra 1°
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in Section III, above, occurring
in connection with the operations of the Respondent as 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 prac-
tices, the undersigned will recommend that it cease and desist therefrom and
take certain affirmative action which the undersigned finds will effectuate the
policies of the Act.
It has been found that the Respondent has refused to bargain with the Union,
as the representative of its employees in an appropriate unit, by refusing and
failing to give to the Union the names of employees who received merit increases
since the last time such increases were granted prior to October 18, 1948, the
amount of such increases, the complete seniority lists of the various departments,
together with the rating reviews of all employees. In order to effectuate the
policies of the Act, the undersigned will recommend that, upon request, the
Respondent perform its obligation to bargain collectively with the Union, as
the exclusive representative of its employees in an appropriate unit,- in respect
to wages, and other terms and conditions of employment by supplying said
information to the Union. ,
Upon the basis of the above findings of fact and upon the entire record in
the case, the Trial Examiner makes the following :
CONCLUSIONS OF LAW
1. International Association of Machinists, Local Lodge No. 1600, is a labor
organization within the meaning of Section 2 (5) of the Act.
2. All production and maintenance employees, including tool design employees
as provided in the National Labor Relations Board certification dated June
14, 1946, except for professional and technical employees and, clerical -eriaployees,
^8 Aluminum Ore Co. v. N. L . R. B., 131 F. 2d 485; 487 (C. A. 7). .
19 See also Dixie Manufacturing Co., 79 NLRB 645; Vanette Hosiery Mills, 80 NLRB
1116.
' . GENERAL CONTROLS CO. 1357
guards, and all supervisory employees with authority to hire, promote, discharge,
discipline, and otherwise effect changes in the status of employees or effectively
recommend such action, constitute a unit appropriate for the purposes of col-
lective bargaining within the meaning of Section 9 (b) of the Act.
3. International Association of Machinists, Local Lodge No. 1600, was, on
May 7, 1948, and at all times thereafter has been, the exclusive representative
of all the employees in such unit for the purposes of collective bargaining within
the meaning of Section 9 (a) of the Act.
4. By failing to furnish and supply the said labor organization last afore-
mentioned, as the exclusive bargaining representative of the employees in the
appropriate unit, the names of employees who received merit increases since
the last time such increases were granted prior to October 18, 1948, the amount
of such increases, the complete seniority lists of the various departments, to-
gether with the rating reviews of all employees, Respondent has engaged and
is engaging in unfair labor practices within the meaning of Section 8 (a) (5)
of the Act.
5. By the conduct last afore-mentioned, Respondent has interfered with,
restrained, coerced, and is interfering with, restraining, and coercing its em-
ployees in the exercise of the rights guaranteed such employees in Section 7
of the Act, and thereby has engaged, and is engaging, in unfair labor practices
withfn the meaning of Section 8 (a) (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting
commerce within the meaning of Section 2 (6) and (7) of the Act.
7. Respondent has not engaged in violation of Section 8 (a) (5) of the Act
by unilaterally granting merit wage increases to its employees.
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, the
Trial Examiner recommends that General Controls Co., its officers, agents,
successors and assigns shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with International Association of Ma-
chinists, Local Lodge No. 1600, as the exclusive representative of Respondent's
production and maintenance employees, excluding supervisory employees with
authority to hire, promote, discharge, discipline, or otherwise effect changes
in the status of employees, or effectively recommend such action, by failing and
refusing to supply to said labor organization a list of the names of employees
who received merit increases since the last time such increases were granted
prior to October 18, 1948, the amount of such increases, the complete seniority
list of the various departments, together with the rating reviews of all employees ;
(b) In any other manner interfering with, restraining, or coercing its em-
ployees in the exercise of the right to self-organization, to assist the International
Association of Machinists, Local Lodge No. 1600, or any other labor organi-
zation, to bargain collectively through representatives of their own choosing,
and to engage in concerted activities for the purposes of collective bargaining
or other mutual aid or protection as guaranteed in Section 7 of the Act.
2. Take the following affirmative action, which the undersigned finds will
effectuate the policies of the Act :
(a) In further performance of its duty to bargain collectively with Inter-
national Association of Machinists, Local Lodge No. 1600 (as exclusive repre-
sentative of its production and maintenance workers, excluding supervisory em-
1358 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ployees with authority to hire, promote, discharge, discipline, or otherwise effect
changes in the status of employees, or effectively recommend such action), to
furnish to said labor organization, upon request, the names of employees who
received merit increases since the last time such increases were granted prior to
October 18, 1948, the amount of such increases, the complete seniority lists of the
various departments, together with the rating reviews of all employees;
(b) Post at its plant at Glendale, California, copies of the notice attached
hereto marked Appendix A. Copies of such notice, to be furnished by the
Regional Director for the Twenty-first Region, shall, after being duly signed by
the Respondent's representative, be posted by the Respondent immediately upon
receipt thereof and maintained by it for sixty (60) consecutive days thereafter,
in conspicuous places, including all places where notices to employees are custom-
arily posted. Reasonable steps shall be taken by the Respondent to insure that.
said notices are not altered, defaced, or covered by any other material ;
(c) Notify the Regional Director for the Twenty-first Region (Los Angeles,.
California), in writing, within twenty (20) days from the date of the receipt.
of this Intermediate Report, what steps the Respondent has taken to comply
herewith.
It is further recommended that the complaint be dismissed insofar as it al-
leges that Respondent has engaged in violation of Section 8 (a) (5) of the Act
by unilaterally granting merit wage increases to its employees.
It is also recommended that unless on or before twenty (20) days from the
date of the receipt of this Intermediate Report, the Respondent notifies the
said Regional Director in writing that it will comply with the foregoing recom-
mendations, the National Labor Relations Board issue an order requiring Re-
spondent to take the action aforesaid.
As provided in Section 203.46 of the Rules and Regulations of the National
Labor Relations Board, any party may, within twenty (20) days from the date
of service of the order transferring the case to the Board, pursuant to Section
203.45 of said Rules and Regulations, file with the Board, Washington 25, D. C.,
an original and six copies of a statement in writing, setting forth such exceptions
to the Intermediate Report or to any other part of the record or proceeding (in-
cluding rulings upon all motions or objections) as he relies upon, together with
the original and six copies of a brief in support thereof ; and any party may,
within the same period, file an original and six copies of a brief in support of
the Intermediate Report. Immediately upon the filing of such statement of
exceptions and/or briefs, the party filing the same shall serve a copy thereof
upon each of the other parties. Statements of exceptions and briefs shall desig-
nate by precise citation the portions of the record relied upon and shall be legibly
printed or mimeographed, and if mimeographed shall be double spaced. Proof
of service on the other parties of all papers filed with the Board shall be promptly
made as required by Section 203.85. As further provided in said Section 203.46
should any party desire permission to argue orally before the Board, request
therefor must be made in writing to the Board within ten (10) days from the date
of service of the order transferring the case to the Board.
In the event no Statement of Exceptions is filed as provided by the aforesaid
Rules and Regulations, the findings, conclusions, recommendations, and recom-
mended order herein contained shall, as provided in Section 203.48 of said
Rules and Regulations, be adopted by the Board and become its findings, con-
GENERAL CONTROLS CO. 1359
elusions , and order, and all objections thereto shall be deemed waived for all
purposes.
Signed at Washington, D. C., this 8th day of August 1949.
DAVID LONDON,
Trial Emapniner.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that:
WE WILL NOT in any manner interfere with, restrain, or coerce our em-
ployees in the exercise of their right to self-organization, to assist INTERNA-
TIONAL ASSOCIATION OF MACHINISTS, LOCAL LODGE No. 1600, or any other labor
organization, to bargain collectively through representatives of their own
choosing, and to engage in concerted activities for the purpose of collective
bargaining or other mutual aid or protection.
WE wrLL BARGAIN collectively upon request with the above-named union
as the exclusive representative of all employees in the bargaining unit de-
scribed herein with respect to wages or other conditions of employment, and
furnish to the said union the names of employees who received merit in-
creases since the last time such increases were granted prior to October 18,
1949, the amount of such increases, the complete seniority lists of the va-
rious departments, together with the rating reviews of all employees.
The bargaining unit is :
All production and maintenance employees, including tool design em-
ployees, except for professional and technical employees and clerical em-
ployees, guards, and all supervisory employees with authority to hire, pro-
mote, discharge discipline, and otherwise effect changes in the status of
employees, or effectively recommend such action.
Dated --------------------
GENERAL CONTROLS CO.,
Employer.
By ---------------------------
(Representative ) (Title)
This notice must remain posted for 60 days from the date hereof, and must
aot be altered, defaced, or covered by any other material.