Globe Gear Co.

National Labor Relations Board - Board Decisions

Mar 30, 1971

189 N.L.R.B. 422 (N.L.R.B. 1971)

422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Globe Gear Company and Local 417 , International
Union, United Automobile, Aerospace and Agricul-
tural Implement Workers of America (UAW). Case
7-CA-7627
March 30, 1971
DECISION AND ORDER
By CHAIRMAN MILLER AND MEMBERS
FANNING AND BROWN
On August 12, 1970, Trial Examiner John F. Funke
issued his Decision in the above-entitled proceeding,
finding that the Respondent had not engaged in the
unfair labor practices alleged in the complaint, and
recommending that the complaint be dismissed in its
entirety, as set forth in the attached Trial Examiner's
Decision. Thereafter, the General Counsel filed
exceptions to the Trial Examiner's Decision, together
with a supporting brief, and the Respondent filed an
answering brief to the General Counsel's exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-member
panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in the case. Finding merit in the
exceptions, the Board rejects the Trial Examiner's
recommendation and adopts only those findings and
conclusions of the Trial Examiner which are consist-
ent with the following:
The complaint in this proceeding, initially issued on
December 23, 1969, alleged, inter alia, that the
Respondent had violated the Act by refusing to
supply certain economic data, by dealing directly and
individually with employees represented by the
Union, and by insisting to point of impasse on
employee ratification of its contract proposals. There-
after, on January 22, 1970, the Respondent and Union
entered into a settlement agreement, approved by the
Regional Director, in which the Respondent agreed it
would bargain with the Union and not directly with
its employees, and in which it also promised that it
would "upon request, furnish the said union with such
financial data from [its] own records as may be
relevant and necessary for the conduct of negotia-
I See Northern California District of Hodcarriers and Common Laborers
of America, AFL-CIO, et al (Joseph Mohamed Sr, an Individual d/b/a
Joseph 's Landscaping Service), 154 NLRB 1384 fn 1, where the Board,
reversing contrary precedent , held that a settlement does not preclude the
use of "presettlement conduct as background evidence establishing the
motive or object of a Respondent in its postsettlement activities .11
tions." At a bargaining session on February 3, 1970,
the Union requested access to certain of Respondent's
financial records and, as requested by the Respon-
dent, reiterated its request in a letter sent to the
Company the following day. On February 25, the
Respondent by letter refused to supply the requested
financial data on the ground that it was not relevant to
the negotiations. On April 21, 1970, the Regional
Director, citing Respondent's refusal to supply the
requested data, issued his Order withdrawing his
approval of the settlement agreement, and a new
complaint and notice of hearing issued in this
proceeding.
The initial issue in this proceeding is whether or not
the Regional Direction properly set aside the settle-
ment agreement. In the context of this case, that
question turns on whether or not the Respondent has
failed to comply with its provisions. The Regional
Director found such noncompliance in the Respon-
dent's refusal to supply the economic data requested
by the Union in early February.
In his consideration of this compliance issue, the
Trial Examiner proceeded from the premise that the
settlement agreement in effect wiped the slate clean
between the parties, and that what had transpired
prior to execution of the agreement was not relevant
in determining whether or not the agreement had
been properly set aside. Consequently, he considered
only the parties' conduct subsequent to the settle-
ment; and, finding that the Respondent had not at
such time pleaded financial inability to pay, he
concluded that the requested financial data was
therefore not relevant, and that in consequence the
Respondent had not breached the agreement by
failing to produce such data. He thus concluded that
the agreement had improperly been set aside, and that
it remained as a bar to the complaint.
However, the Trial Examiner has misconceived the
applicable law and in consequence has taken a too
narrow view of the situation; for, as the Board has
held, presettlement conduct can properly be consid-
ered as background in determining whether or not a
party has complied with a settlement agreement.' We
shall, therefore, consider such presettlement conduct
in determining the effect to be given herein to the
settlement agreement.2
The record shows that the Union's initial contract
proposals, submitted in September 1969, included
demands for substantial pay increases and other
economic benefits; that with minor exceptions the
demands were not agreed to by the Company; and
2 As a result of his view concerning the effect of the settlement
agreement , the Trial Examiner made no credibility findings with respect to
testimony concerning presettlement events. Consequently , in dealing with
such matters we rely only on uncontradicted testimony or that of
Respondent's general manager.
189 NLRB No. 56
GLOBE GEAR COMPANY 423
that they were not at any time formally withdrawn by
the Union. It further appears that prior to the
settlement, company negotiators in discussing union
demands stated that business conditions were not as
good as previously; contended that the Union's
demands were excessive; and asserted that the
Company could not meet both the Union's language
changes and economic demands. In reply to a union
query concerning why its demands could not be met,
Respondent's negotiators conceded they were plead-
ing poverty. Also, at a meeting with employees on
November 5, at which the union and the company
proposals were discussed, the Company's general
manager stated that conditions were not as good as 3
years previously, when the first contract was executed.
Indeed, at the hearing in this proceeding the same
official testified that the Respondent did not agree to
the Union's economic demands because they were too
high. He also testified that in a meeting with union
negotiators on January 19, he offered to give the
Union financial information in order to "get the labor
charge out of the way."
Finally, as found by the Trial Examiner, the
Respondent did not, in the two postsettlement
bargaining sessions or at any other time after the
settlement, specifically raise a financial disability plea
with respect to the Union's economic demands.
Rather, in the letter of February 25 rejecting the
Union's request for data, the Respondent asserted it
was not pleading economic inability, but gave no
reason for objecting to the Union's outstanding
economic proposals. Instead, it rationalized its refusal
to supply the data on the ground the Union had
abandoned its economic proposals and the only
unresolved issue between the parties concerned
union-security matters; hence the requested data was
irrelevant.
However, there is clearly no basis in this record to
support the Respondent's assertion in its February 25
letter, that the Union had abandoned its economic
demands. Thus, in its letter it noted that at the
January 27 bargaining session the Union had offered
to give up its economic demands if the Respondent
would agree to continue certain union-security
provisions of the old contract, and that that offer was
rejected by the Respondent at the February 3
meeting. From this Respondent argues, notwithstand-
ing its refusal to agree to the quid pro quo, that the
Union by such an offer had in effect acquiesced on
economic issues, and that the Company's rejection on
3 We cannot subscribe to a holding, as our dissenting colleague appears
to do in agreeing with the Trial Examiner, which would result in an
inability to secure compliance with an agreed-upon notice or remedial
order directing that information which had been unlawfully refused be
supplied upon request For, under that view, a settlement agreement (even
with it "savings" clause not admitting the alleged violation) would wipe out
from consideration all previous discussions and positions taken on any
February 3 was only rejection of the union-security
aspects of the Union's offer, leaving undisturbed the
alleged surrender of the Union on its economic
proposals. By this route the Respondent reaches the
conclusion asserted in its letter that the only unre-
solved issue at the time the Union requested financial
data was that of union security.
Respondent's specious reasoning to justify its
refusal to provide the requested economic data in our
opinion supports a conclusion that the Respondent
was not dealing in good faith with the Union. This
conclusion is further supported by the fact that
Respondent's stated reasons in its February 25 letter
for rejecting the request for information were patently
at variance with its bargaining table position at the
time the demand was first made subsequent to the
settlement. Thus, when at the February 3 session the
Respondent's negotiator rejected the Union's January
27 offer and was immediately faced with its demand
for financial data, he did not contend the Union had
abandoned its economic proposals or had agreed to
settle on the economic terms the Company proposed.
On the contrary, he took the position in response to
the demand for information that the Union had never
scaled down its economic demands from those it had
initially proposed at the first bargaining session.
Further, at the hearing Respondent's general manager
conceded that the parties had never reached an
agreement on economic issues. In any event, it is clear
that once the Company rejected the Union's compro-
mise offer of January 27, the situation reverted to that
existing before the offer was made; and at that time
the Union's economic proposals were with minor
exceptions all outstanding.
In these circumstances, where the Respondent has
failed at any time after the settlement to give any
reasons whatsoever for refusing or failing to agree to
the Union's economic demands, and where it has
resorted to disingenuous argument to justify its
refusal to produce the requested financial data, we
find that it is not only permissible but necessary that
we consider its presettlement conduct in order to
determine the basis of Respondent's postsettlement
conduct.3 In this regard, it is clear and we find that the
Respondent in early negotiating sessions did raise a
plea of financial difficulty or inability to pay in
response to the Union's demand for increased
economic benefits; 4 that despite self-serving state-
ments to the contrary, it has not in fact abandoned
that position; and that its refusal to supply the
matter as though they had never occurrred, and in every instance it would
become necessary to establish anew the relevance or need for the identical
information We note here , in addition , that this was a continuing course of
events , with only about i 1 days elapsing from the date of the settlement to
the date of the subsequent request for the financial information
4 The Respondent in its brief concedes that company representatives
stated "that the Union demands taken as a whole were too expensive -
424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
financial data requested on February 3 and 4 was not
in fact grounded on considerations of relevance or
necessity, but rather reflected nothing more than an
attempt to avoid compliance with its agreement to
give the Union that information necessary for it to
evaluate the Respondent's continuing financial dis-
tress argument. We find, accordingly, that the
Company, in so refusing, on and after February 25,
1970, to supply the requested financial data, both
failed to comply with the settlement agreement and
violated Section 8(a)(5) and (1) of the Act. In
consequence, the Regional Director properly set aside
the settlement agreement.
Turning now to the alleged unfair labor practices
occurring before the January 1970 settlement, the
record shows, first, that after the Respondent had
raised an inability to pay argument, the union
representatives, at a bargaining session on November
10, 1969, delivered to Respondent's president, Hallie
Reeves, a letter in which it requested copies of the
Company's financial statements for 1967 through
1969 in order to "substantiate your plea of inability to
pay ..." so that "we may finalize our negotiations."
The Respondent did not at the time respond to the
letter, and 2 days later the Union filed its charges in
this case. Then, on January 19, at the first meeting of
the parties after the November 10 session, Respon-
dent's general manager, George Reeves, offered to
give the union financial information "within reason"
so that the Union would drop the charges. However,
as already pointed out, the Company never did supply
any financial data; furthermore, it did not at any time
object to the particular information that the Union
sought. As we have found above that the Respondent
did raise in early negotiation sessions an inability to
pay or poverty plea in response to the Union's
financial demands, and as the Respondent did not for
a period of about 2 months even reply to the Union's
November 10 request for financial data, we further
find that its failure to furnish the requested data at a
reasonable time after that request also violated
Section 8(a)(5) and (1) of the Act.
Finally, it is alleged in the complaint that in early
November Respondent unlawfully bargained directly
and individually with its employees concerning terms
and conditions of employment, and that on Novem-
ber 6, at a bargaining session, unlawfully insisted to
the point of impasse upon employee ratification of the
proposals it then submitted to the Union. In this
regard, the undisputed testimony shows that Respond-
ent's general manager called a meeting of all unit
employees on November 5, at which he outlined the
status of negotiations; stated that the purpose of the
meeting was to determine what the employees wanted
in a contract; discussed and explained alternative
proposals; and then determined how each employee
felt with respect to the various matters. The following
day the company representative submitted a "final"
offer to the Union incorporating at least in part the
preferences expressed by employees at the November
5 meeting, and stated he wished the offer to be
presented to the union membership who would, he
was sure in view of the previous day's meeting,
approve it. The Union did not accept the proposals;
and with respect to its objection to the Respondent's
proposed substitution of a take-home pay increase for
the then-existing pension plan, the company repre-
sentative stated the employees had indicated they
favored the substitution, and that the only way to
resolve the company-union differences on the issue
was to have the employees vote on it. Clearly by
seeking direct dealings with unit employees concern-
ing terms and conditions of employment subject to
current negotiations, and by insisting on an employee
vote to resolve differences between the Company and
Union on a bargainable issue , the Respondent was
engaging in conduct inconsistent with its obligation to
deal with respect to bargainable matters only with the
Union, the employee's recognized bargaining agent.
We find that the Respondent thereby further violated
Section 8(a)(5) and (1) of the Act.
On the basis of the foregoing findings of fact and the
entire record in this case, the Board makes the
following:
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 the Act.
3. All production and maintenance employees
employed at the Respondent's Royal Oak, Michigan,
plant, but excluding office clerical employees, profes-
sional employees, guards, and supervisors as defined
in the Act, constitute a unit appropriate for the
purposes of collective bargaining within the meaning
of Section 9(b) of the Act.
4. At all times material the Union has been the
certified exclusive representative for the purposes of
collective bargaining within the meaning of Section
9(a) of the Act, of all the employees in the above
appropriate unit.
5. By refusing to furnish the Union with the
financial data it requested in November 1969 and
February 1970, the Respondent, on and after Novem-
ber 10, 1969, has refused to bargain with Union and
has thereby engaged in, and is engaging in, conduct
unlawful under Section 8(a)(5) of the Act.
6. By dealing directly with employees in the
appropriate unit concerning terms and conditions of
GLOBE GEAR COMPANY
employment and by insisting upon an employee vote
on matters subject to negotiations with the Union, the
Respondent has engaged in conduct in derogation of
its obligation to deal only with the Union as the
employees' bargaining representative and thereby has
refused to bargain with the Union in violation of
Section 8(a)(5) of the Act.
7. By the above refusals to bargain with the
Union, the Respondent has interfered with, re-
strained, and coerced its employees in the exercise of
rights guaranteed in Section 7 of the Act, thereby
engaging in unfair labor practices within the meaning
of Section 8(a)(1) of the Act.
8. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the mean-
ing of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in
certain unfair labor practices, we shall order that it
cease and desist therefrom and take certain affirma-
tive action designed to effectuate the policies of the
Act.
We have found that by failing and refusing to
supply the Union with certain financial data concern-
ing the Company's ability to pay the increased
economic benefits sought by the Union, the Respon-
dent refused to bargain with the Union as required by
by the Act and also unlawfully interefered with,
restrained, and coerced its employees. We shall
therefore order that the Respondent cease and desist
therefrom and upon request furnish the Union such
financial data as is necessary and relevant for it to
bargain intelligently as the employees' representative,
including data relevant to the Respondent's ability to
pay increased economic benefits. We have also found
that the Respondent unlawfully dealt directly with its
employees in the appropriate unit concerning matters
subject of collective bargaining that an issue in
dispute be resolved by submitting it directly to the
employees for their ratification vote. We shall order
the Respondent to cease and desist from engaging in
such conduct and to bargain in good faith with the
Union.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Globe Gear Company, Royal Oak, Michigan, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
5 In the event that this Order is enforced by a judgement of a United
States Court of Appeals, the words in the notice reading "POSTED BY
ORDER OF THE NATIONAL LABOR RELATIONS BOARD" shall be
425
(a) Dealing directly with employees in the appropri-
ate unit represented by the Union concerning terms
and conditions of employment subject to collective
bargaining and insisting upon an employee ratifica-
tion vote to resolve differences between it and the
Union concerning matters subject of collective
bargaining; the appropriate unit is:
All production and maintenance employees em-
ployed at the Respondent's Royal Oak, Michigan,
plant, but excluding office clerical employees,
professional employees, guards, and supervisors as
defined in the Act.
(b) Failing or refusing to furnish the Union, upon its
request, with financial data necessary and relevant for
the Union to bargain intelligently as the employees'
representative including data relevant to the Respon-
dent's ability to pay increased economic benefits.
(c) In any like or related matter interfering with the
efforts of the Union to bargain with it as the certified,
recognized bargaining representative of the employ-
ees in the appropriate unit.
2. Take the following affirmative action which is
necessary to effectuate the policies of the Act:
(a) Upon request bargain collectively and exclusive-
ly with the Union as the exclusive representative of all
its employees in the appropriate unit, concerning rates
of pay, wages, and hours of employment, and, if an
understanding is reached, embody such understand-
ing in a signed agreement.
(b) Upon request furnish the Union with such of its
financial data as is necessary and relevant for the
Union to bargain intelligently as the employees'
representative, including data relevant to the Respon-
dent's ability to pay increased economic benefits.
(c) Post at its Royal Oak, Michigan, premises copies
of the attached notice marked "Appendix." 5 Copies
of said notice, on forms provided by the Regional
Director for Region 7, after being duly signed by an
authorized representative, shall be posted by Respon-
dent immediately upon receipt thereof, and be
maintained by it for 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
said notices are not altered, defaced, or covered by
any other material.
(d) Notify the Regional Director for Region 7, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
CHAIRMAN MILLER, dissenting:
The facts here show that the Respondent early in
negotiations replied at least in part to the Union's
changed to read "POSTED PURSUANT TO A JUDGMENT OF THE
UNITED STATES COURT OF APPEALS ENFORCING AN ORDER
OF THE NATIONAL LABOR RELATIONS BOARD "
426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
request for a pay increase with a plea of poverty and
then failed to produce requested financial data to
support the plea. Thereafter it entered into a settle-
ment in which it agreed to produce financial data
"relevant and necessary" to bargaining. Subsequent
to the settlement only two bargaining sessions were
held, at neither of which did the Respondent
specifically raise any plea of financial disability, but
at the second of which the Union again requested
financial data relevant to such a plea. Respondent
refused to acquiesce in the request.
On these facts the Trial Examiner found that the
Respondent had not reneged on its settlement
agreement to produce relevant financial data because,
in view of the absence of a proverty defense after
settlement, no such data was relevant. My colleagues
concede as, indeed, they must, that the Respondent
did not specifically raise an inability to pay plea after
the settlement. They nevertheless conclude that
Respondent was maintaining such a position because
it had in the past asserted a poverty defense, and did
not later advance any other reason for refusing those
demands. But the majority appears to ignore the fact
that after the settlement the Union did not urge
acceptance of its economic proposals and instead
offered to abandon its economic demands if Respon-
dent agreed to continue the union-security provisions
of the previous contract. On these facts, I cannot join
my colleagues in concluding that the financial data
requested by the Union in early February 1970 was
shown to be relevant or necessary to negotiations.
Thus, the Respondent's failure to produce the data
neither contravened the applicable provision of the
settlement agreement nor violated Section 8(a)(5) of
the Act.
I would therefore reinstate the settlement agreement
and, as recommended by the Trial Examiner, dismiss
the complaint.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL, upon request, bargain collectively
with your Union, International Union, United
Automobile, Aerospace and Agricultural Imple-
ment Workers of America and its Local 417 with
respect to wages, hours, and other terms and
conditions of employment, for our employees in
the following appropriate unit: all production and
maintenance employees employed at our Royal
Oak plant excluding office clerical employees,
professional employees, guards, and supervisors.
WE WILL, upon request, furnish the Union with
such financial data from our own records as may
be relevant and necessary for it to bargain
intelligently as your representative, including data
relevant to the Company's financial ability to pay
increased economic benefits to you.
WE WILL NOT bargain directly with employees in
the appropriate unit with respect to rates of pay, or
other terms and conditions of employment, in
disregard of the representative status of the Union
which is their exclusive collective-bargaining
representative.
WE WILL NOT in any like or related manner
interfere with the Union's efforts to bargain with
us as your exclusive bargaining representative.
GLOBE GEAR COMPANY
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive
days from the date of posting and must not be altered,
defaced, or covered by any other material.
Any questions concerning this notice or compliance
with its provisions may be directed to the Board's
Office, 500 Book Building, 1249 Washington Boule-
vard, Detroit, Michigan 48226, Telephone 313-226-
3200.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
JOHN F. FUNKE, Trial Examiner: Upon a charge filed
November 12, 1969, by Local 417, International Union,
United Automobile, Aerospace and Agricultural Imple-
ment Workers Union (UAW), herein the Union, against
Globe Gear Company, herein the Respondent, the General
Counsel issued a complaint dated April 21, 1970, alleging
Respondent violated Section 8(a)(5) and (1) of the Act.
The answer of the Respondent denied the commission of
any unfair labor practices.
This proceeding, with the General Counsel and the
Union represented, was heard by me at Detroit, Michigan,
on June 4, 1970. At the conclusion of the hearing the parties
submitted brief oral argument. A brief was received from
Respondent on July 8.
Upon the entire record in this case and from my
observation of the witnesses while testifying, I make the
following:
FINDINGS AND CONCLUSIONS
I. THE RESPONDENT AND THE UNION
The complaint alleges, the answer admits, and I find that
the Respondent is engaged in commerce within the
GLOBE GEAR COMPANY 427
meaning of Section 2(6) and (7) of the Act and that Union
is a labor organization within the meaning of Section 2(5) of
the Act.
II. THE UNFAIR LABOR PRACTICES
A Background and Issues
Paragraph 8 of the complaint alleges:
All production and maintenance employees employed
at the Respondent's Royal Oak Plant but excluding
office clerical employees, professional employees,
guards, and supervisors as defined in the Act constitute
a unit appropriate for the purposes of collective
bargaining within the meaning of Section 9(b) of the
Act.
Paragraph 9 of the complaint alleges.
On or about September 1, 1966, a majority of the
employees of the Respondent in the unit described
above in paragraph 8, by a secret ballot election
pursuant to an Agreement for Consent Election in
Cases Nos. 7-RM-594 and 7-RC-7548 and conducted
under the supervision of the Regional Director for the
Seventh Region of the National Labor Relations Board,
designated and selected the Union as their representa-
tive for the purposes of collective bargaining with the
Respondent, and on or about September 12, 1966, said
Regional Director certified the Union as the exclusive
collective bargaining representative of the employees in
said unit.
The allegations of paragraphs 8 and 9 are admitted by
Respondent's answer.
Paragraph 10 alleges that the Union, since September 1,
1966, has been and is the exclusive representative of the
employees in the unit set forth in paragraph 8. The answer
admits that the Union was the exclusive representative of
said employees only until January 27, 1970.
Paragraph 11 of the complaint alleges and the answer
admits that on or about September 26, 1969, the parties to
the current collective bargaining contract commenced
negotiations for a new agreement to succeed the then
existing contract expiring November 1, 1969.
The complaint further alleges that since October 28, 1969,
Representative has pleaded financial inability to meet
certain wage demands of the Union; that the Union
requested Respondent furnish evidence of said inability to
meet the demands; that on or about November 5, 1969,
Respondent dealt directly with its employees and sought to
reach agreement directly with its employees; that on or
about November 6, 1969, Respondent insisted on ratifica-
tion by the employees of the Union's proposals and refused
to meet with the Union until ratification had been obtained.
Following the filing by the Union of the original charge
herein on November 12, 1969, alleging the conduct of the
Respondent as above set forth violated Section 8(a)(5) and
(1) of the Act, the parties executed a settlement agreement
approved by the Regional Director on January 22, 1970.
This agreement is attached as Appendix "A".
On April 21, 1970, the Regional Director for Region 7 set
aside the settlement agreement on the ground that it had
not been compiled with and issued the complaint herein.
The ground on which the agreement was set aside was the
alleged failure of Respondent to provide the Union with
evidence of its inability to meet the Union's wage demands.
The issues presented at the trial were:
(1) Did the Respondent plead financial inability to meet
the Union's demands.
(2) Was the Union entitled to the information requested
as relevant and necessary to intelligent bargaining.
(3) If Respondent did in fact breach the settlement
agreement of January 22, 1970, had Respondent violated
Section 8(a)(5) and (1) of the Act prior to the settlement
agreement.
Bargaining Issues
Although I find only one specific issue involved herein
(see paragraphs 15, 16, and 17 of the complaint) brief
reference will be made to the other major issues which
precluded agreement.
Negotiations were opened on September 29. Hallie
Reeves, president, and her son George, plant manager,
represented Respondent and Olen Manley and Lewis
Montford, vice-president of Local 417, represented the
Union. (Hallie Reeves did not appear at any of the
postsettlement negotiations.)
Among the union demands were a substantial increase on
wages, increases in contributions to the pension plan, and
three additional holidays. The Respondent's counterpropo-
sal consisted of an offer of two and one half additional
holidays, elimination of the pension plan and direct
payment of its contributions to wages, and a 15 cent
increase in wages spread over 3 years. Union's demands
(General Counsel's Exhibit 3) respecting wages would
increase the wages of a lather and grinder 75 cents per
hour; a gear cutter 95 cents per hour; a machine operator
60 cents per hour and fixed the rate of truck drivers, not
classified under the prior contract, at 3 dollars per hour.
A demand on which the Respondent was adamant was
the paragraph 6, article III of the union security clause be
amended so that Respondent would not be required to
discharge an employee for failure to pay dues or initiation
fees.
The Union's wage demands and the Respondent's
reasons for rejecting them constitute, as has been stated, the
gravamen of the case. Without reviewing the testimony
which lead to the Settlement Agreement herein, since such
alleged violations become germane only in event of failure
to comply with the agreement and no other violations are
alleged , it seems expedient, without further waste of time, to
proceed to the issue which is the subject of the proceedings.
Evidence of postsettlement violations
The first meeting between the Respondent and the Union
after the settlement agreement of January 22, 1970,
occurred on January 27. Leonard Montford, vice-president
of the Union, testified that he attended the meeting with
Edward Goethals, at that time shop steward for the Union,
and Bill Manley, International representative of the UAW.
Attending for the Respondent were Susan Meyer, a
secretary, and George Reeves, plant manager. Montford
testified to the opening of this meeting as follows:
A. Well, we told George we had signed off on the
428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
unfair labor charges, and as far as we were concerned if
we could reach an agreement we didn't care about
looking at his books, because we weren't auditors. We
negotiated a lot of contracts without looking the
company books, and if we could reach an agreement we
didn't want to look at them, but we had to have a fair
settlement. We told him the various things that we had
to have. George told me, he said, "I never pleaded
inability to pay. My mother pleaded it." We reminded
George at that time that his mother was an officer of the
company, and he was only the plant manager. This is
what we were basing it on. So we proceeded to talk on
the unfairness of the economics, that he had alienated
the employees in the plant from the union by getting
them to agree to drop certain things. And we argued
with him to a great extent on that and said if we could
get a fair and reasonable approach as to what we
wanted, and the cost-of-living to remain in the contract,
to keep it and freeze the current cost-of-living into the
agreement, we told him we were willing to move on our
proposal of our wage rates that we had proposed and
reduce them to meet the demands. We told him we
insisted on the pension plan remaining in the contract,
and we wanted the life insurance to remain in the
contract, the Blue Cross, Blue Shield, the sick and
accident; and we could drop a lot of our other demands
if we could reach a fair agreement. George said all he
could give would be the nickel across the board, and he
would make a concession that he would not reduce the
employees' wages in the event the cost of living went
down over 19 cents. The employee - the most the
employees could lose was 19 cents on the cost-of-living
agreement, and that was the concession that he made at
that meeting.
At this meeting George Reeves also stated that he wanted
the pension plan discontinued on the ground that if he
could put the cost of the pension plan into the hourly rate of
the employees it would be easier to attract new employees.
According to Montford the reason given by Reeves for not
giving both a wage increase and continuing the pension
plan was that he could not afford both. As to the cost of
living, which contained a 38-cent "float" Reeves offered a
19-cent fixed rate which would be put into the base rate,
whereby there could be no reduction in the cost-of-living fix
below 19 cents in the event of a decline. Cost-of-living
would then be eliminated as a contract provision. Reeves
regarded the cost-of-living as a cost item which the
Respondent could not afford since it had no way of
predicting where the costs would go. (This, of course, is
Montford's testimony.)
Montford testified that at the same meeting Reeves made
the statement that he had never pleaded inability to pay;
that his mother had made that plea and that he would open
the books to the union auditors.' Montford's reply, not
entirely intelligible, was that he would have to consult with
legal counsel before entering any agreement. (Whether he
was referring to a contract or a settlement agreement is not
I Montford's testimony is inconsistent on this point for he later testified
on cross that Reeves made the statement that he was not claiming inability
to pay-that his mother had made that claim
known.) The Settlement Agreement bears different dates,
the earliest of which is January 20.
Owen Manley, International representative of the Union
who attended all the meetings except one, testified that on
February 3, 1970, as a result of discussions at that (the next)
meeting, he called the International 's auditor to inquire
what books the Union would need from the Respondent.2
(Reeves had not agreed at this time to make the books
available since he did not at that time know what the Union
wanted.)
On the next day the Union made its request in writing for
the books. This letter, General Counsel's Exhibit No. 10,
reads:
February 4, 1970
Hallie H . Reeves, President
Globe Gear Company
P.O. Box 396
Royal Oak, Michigan 48067
Dear Mrs. Reeves:
During negotiations Tuesday, February 3, 1970, the
Union requested of your representative , Mr. George
Reeves, a date and time when the Union 's auditors
would be able to check the Company's financial
records. Mr. Reeves stated it would be necessary for the
Union to submit a letter outlining the information that
would be needed.
In order for us to get an accurate picture of your
Company's financial position, it will be necessary to
examine your federal corporate income tax returns for
the past two years ; and, for the past three years, your
long-form audited financial statements complete with
detailed schedules of expenses , certified by an outside
CPA.
It is necessary also to have access to your books and
records in case it is necessary to trace back any
particular items of income or expense . This would
include your general ledger , the general journal and the
payroll register.
Hoping to hear from you on this matter as soon as
possible. I remain,
Very truly yours,
Olen Manley
International Representative
UAW Region lB
On February 25 the Union replied (General Counsel's
Exhibit No. 11) in a letter reading:
Solidarity House
8000 E. Jefferson Avenue
Detroit, Michigan 48214
February 25, 1970
ATTENTION: MR. OLEN MANLEY
2 According to Manley, Schwartz wanted the general ledger, the last 2
years of Federal income tax returns and the last 2 years of payroll records.
GLOBE GEAR COMPANY 429
REF. YOUR LETTER OF FEBRUARY 4, 1970,
REQUESTING FINANCIAL INFORMATION.
Dear Mr. Manley:
We do not feel that the information you requested is
relevant to the present negotiations and therefore refuse
to supply the Union with such information at this time.
As you know , the negotiations we have had , namely,
the meetings of January 19, January 27, and February 3,
have been almost exclusively devoted to and centered
on the issue of union security and not on economic
issues. In the meeting of January 19, I stated that the
Company would supply the Union with relevant
financial information . Mr. Montford stated at that time
that the Union did not really want to look at our books,
but that you dust wanted to reach an agreement on a
new contract . The main issue was union security. Mr.
Montford said that the only reason the Union would
want to look at our books was if the employees thought
we could pay more and you had to prove that we could
not pay. In this meeting the Company also stated that it
had never, at any time, intended to plead the inability to
pay and that I wanted it understood that we are not
doing so now. In the meeting of January 27, the entire
meeting was centered on the question of union security
except for a few minutes when the Company agreed to
factor 1/2 of the cost of living into the base rate of the
various classifications . The meeting closed with you,
Mr. Manley, proposing that the Union would "Throw
everything else in if I would agree to leave Paragraph 7
in the contract" and you would "Do everything you
could to get it ratified and that we would have an
agreement ." In the meeting of February 3, I stated that
we had considered your proposal and had decided it
was not acceptable . Immediately after I stated the
Company's position on the Union security , you asked
for the financial information now in question.
In these three meetings , we rarely discussed econom-
ics and when we did, the Company made the concession
of factoring 1/2 of the cost of living into the base rate of
pay. We are obviously not in disagreement with regard
to economics because of your proposed settlement set
forth in the meeting of January 27.
It is only because of the union security disagreement
that you have asked for financial information and for
this reason we do not feel the financial data requested is
relevant to the present negotiations.
Yours very truly,
GLOBE GEAR
COMPANY
George W. Reeves
Plant Manager
There were no further meetings after this exchange of
correspondence.3
CONCLUSIONS
Having signed the Settlement Agreement approved
January 22, 1970, the Respondent stood absolved of its sins
and was again in a way of grace. According to that
agreement the Respondent was obligated "furnish said
union with such financial data from our own records as
may be relevant and necessary for the conduct of
negotiations." I do not see that the settlement imposed
heavier obligations upon the Respondent than were
obligatory at the commencement of negotiations. A
settlement agreement is not a form of penance which
requires a respondent to do more than the Act demands of
any party to the bargaining process. If this is so-and a
respondent would be foolhardy to enter any such
agreement if it were not-then Respondent was required, if
it elected again to plead financial inability to pay, to offer
proof by such evidence as might be deemed relevant and
necessary. But first the Respondent must incur such an
obligation by the plea of financial inability after the
settlement agreement. I cannot find, although the testimony
as usual is not as clear and precise as one would like it, that
Reeves ever made such a plea.
Manley, for instance, testified that after Mrs. Reeves no
longer attended the meetings, the "whole thing took on a
different atmosphere, more or less put the entire argument
on other things, more so than economics. We never did get
to talking about economics then.4
Montford's testimony as to the January 27 meeting is
contradictory. He stated that Reeves told the Union the
cost-of-living item was too expensive and that the
Respondent could not afford it. He also testified that
Reeves made the statement that he had never pleaded
inability to pay. Both Reeves and Susan Meyer testified
that Reeves had never made such a statement and I credit
their testimony.
Accordingly, I find that the Respondent, after the signing
of the Settlement Agreement, never pleaded a financial
inability to meet the Union's demands. Not having entered
such a plea the Respondent's books were neither relevant
nor necessary to intelligent bargaining.
RECOMMENDED ORDER
It is hereby recommended that the complaint be
dismissed in its entirety.
3 Two other witnesses were called by the parties Susan Meyer, a
secretary for Respondent, attended each of the meetings and took notes
She testified that George Reeves never said that Respondent could not
afford to meet the Union's demands, nor could she recall that the
Respondent ever told the Union there was no way it could meet its
demands As to the collection of dues, Meyers testified that Reeves told the
Union it was their business and they should take care of it She denied that
he raised the question of expense
Andrew Goethals, shop steward for the Union during negotiations,
testified that at the meeting of January 27 Reeves told the union
representatives he was anxious to comply with the settlement and was told
by the Union that they were not interested in the books but in reaching
agreement, particularly on the union shop clause Goethals later filed a
decertification on behalf of the other employees
' Manley testified that the chief topics of disagreement at this time were
the Union's insistence on a ban against subcontracting and Respondent's
insistence that it need not fire an employee for nonpayment of dues
430
In the Matter of
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX "A"
United States of America
National Labor Relations Board
Globe Gear Company
Case No. 7--CA--7627
SETTLEMENT AGREEMENT
The undersigned employer (herein called the Employer) and the under-
signed charging party (herein called the Charging Party), in settlement of
the above matter, and subject to the approval of the Regional Director for
the National Labor Relations Board (herein called the Regional Director),
HEREBY AGREE AS FOLLOWS:
POSTING OF NOTICE---Upon approval of this Agreement, the Employer will
post immediately in conspicuous places in and about its plant , and maintain
for a period of at least sixty (60) consecutive days from the date of posting,
copies of the Notice to All Employees attached hereto and make a part hereof.
COMPLIANCE WITH NOTICE---The Employer will comply with all the
terms and provisions of said Notice.
Although the Regional Director has concluded on the basis of his
investigation that there is reasonable cause to believe that the
Employer has engaged in conduct violative of the Act, it is
understood that the Employer does not , by execution of this
Agreement , admit that it has, in fact, violated the Act.
WITHDRAWAL OF COMPLAINT---Approval of this Agreement by the Regional
Director shall constitute withdrawal of the Complaint and Notice of
Hearing heretofore issued in this case.
GLOBE GEAR COMPANY 431
REFUSAL TO ISSUE NEW COMPLAINT---In the event the Charging Party fails
or refuses to become a party to this Agreement, then, if the Regional
Director in his discretion believes it will effectuate the policies of the
National Labor Relations Act, he shall decline to issue a Complaint herein
and this Agreement shall be between the Employer and the undersigned
Regional Director. A review of such action may be obtained pursuant to
Section 102.19 of the Rules and Regulations of the Board if a request for
some is filed within ten (10 ) days thereof. This Agreement is contingent upon
the General Counsel sustaining the Regional Director's action in the event of
a review.
PERFORMANCE---Performance by the Employer with the terms and provisions
of this Agreement shall commence immediately after the Agreement is approved
by the Regional Director, or, in the event the Charging Party does not enter
into this Agreement, performance shall commence immediately upon receipt by
the Employer of advice that no review has been requested or that the General
Counsel has sustained the Regional Director.
NOTIFICATION OF COMPLIANCE--The undersigned parties to this Agreement
will each nofity the Regional Director in writing what steps the Employer has
taken to comply herewith. Such notification shall be made within five (5)
days, and again after sixty (60) days, from the date of the approval of this
Agreement , or, in the event the Charging Party does not enter into this
Agreement , after the receipt of advice that no review has been requested
or that the General Counsel has sustained the Regional Director . Contingent
upon compliance with the terms and provisions hereof , no further action
shall be taken in the above case.
Globe Gear Company
(Employer)
International Union, United Automobile,
Aerospace and Agricultural Implement
Workers of America (UAW) and its Local
417
(Charging Party)
By: By:
(Name and Title) (Name and Title)
Date: Date:
Recommended : Approved:
(Date) (Date)