Grinnell Corp.

National Labor Relations Board - Board Decisions

Aug 9, 1991

303 N.L.R.B. 1057 (N.L.R.B. 1991)

1057
303 NLRB No. 168
GRINNELL CORP.
1 Effective May 1, 1988, the Glass Pottery, Plastics & Allied Workers Inter-
national Union, AFL–CIO merged with International Molders and Allied
Workers Union, AFL–CIO to form the Glass, Molders, Pottery, Plastics & Al-
lied Workers International Union, AFL–CIO, CLC. Accordingly, the caption
has been amended to reflect the change.
2 On July 13, 1989, Administrative Law Judge Stephen J. Gross issued the
attached decision. The General Counsel filed exceptions and a supporting
brief, the Respondent filed cross-exceptions and a brief in support thereof and
in response to the General Counsel’s exceptions, and the General Counsel filed
a brief in response to the Respondent’s cross-exceptions.
The National Labor Relations Board has delegated its authority in this case
to a three-member panel.
3 The Respondent has requested oral argument. The request is denied as the
record, exceptions, and briefs adequately present the issues and the positions
of the parties.
4 No exceptions were filed to the judge’s further findings that the Respond-
ent also did not, as alleged, engage in bad-faith bargaining with respect to
bonus programs and merit pay for the unit employees.
5 The General Counsel has conceded that this additional conduct would vio-
late the Act only if the Respondent engaged in bad-faith bargaining that pre-
vented a valid bargaining impasse. 6 All dates are in 1987 unless otherwise noted.
Grinnell Corporation and Glass, Molders, Pottery,
Plastics & Allied Workers International Union,
AFL–CIO, CLC1 and Glass, Molders, Pottery,
Plastics & Allied Workers International Union,
Local No. 376, AFL–CIO, CLC. Cases 4–CA–
16881 and 4–CA–17731
August 9, 1991
DECISION AND ORDER
BY MEMBERS CRACRAFT, OVIATT, AND
RAUDABAUGH
Exceptions filed to the judge’s decision2 present the
question, inter alia, whether the Respondent violated
Section 8(a)(5) and (1) of the Act by refusing to bar-
gain in good faith with the Union regarding the imple-
mentation of job performance standards for the unit
employees.
The Board has considered the exceptions in light of
the record and briefs3 and has decided to affirm the
judge’s rulings, findings, and conclusions only to the
extent consistent with this Decision and Order.
The judge found that the Respondent did not, as al-
leged, violate Section 8(a)(5) by refusing to bargain
over the setting of employees’ performance standards.4
Based on his finding that the Respondent bargained in
good faith, the judge concluded that the Respondent
also did not violate the Act by making unilateral
changes and by failing to reinstate economic strikers
following the Union’s request for reinstatement.5 The
judge therefore dismissed the complaint. Although we
conclude that the record does not establish by a pre-
ponderance of the evidence that the Respondent failed
to bargain in good faith regarding job performance
standards, we reach this conclusion solely for the rea-
sons set forth below, and we do not rely on the judge’s
analysis.
A. Facts
The Respondent manufactures malleable pipefittings
at a facility in Columbia, Pennsylvania, that it acquired
in February 1986. The Union and its predecessors have
represented the production and maintenance employees
at this facility since about 1944. On purchasing the
Columbia plant, the Respondent assumed the most re-
cent collective-bargaining agreement that was due to
expire on October 10, 1987.6 The parties began bar-
gaining for a successor agreement on August 11. There
were 27 bargaining sessions held between August 11
and the time that the Union established a picket line
on October 22. The Union was represented during bar-
gaining by its International representative, David
Sumpman, and a committee of nine unit employees
that included Local President Charles Benfer and Vice
President Donald Bell. The Respondent was rep-
resented at the negotiations by its manager of per-
sonnel and industrial relations, Wayne Murphy, Plant
Manager Doyne Chartrau, and its attorney, Charles
Kelso.
At the time negotiations for a new contract began,
the plant was organized into about 100 departments,
with several hundred job classifications. About 60 per-
cent of the unit employees were paid an hourly wage,
and about 40 percent were incentive workers, paid on
a pieces-per-hour incentive system.
At the first bargaining session, on August 11, the
Respondent presented a bargaining proposal that, inter
alia, eliminated incentive pay for the unit employees
who had worked under that plan and also included
substantial reductions in wages and benefits for all em-
ployees. During the next session, on August 18, Benfer
asked whether, after the incentive workers became
hourly workers, they would be required to maintain the
same pace as hourly workers that they had maintained
on the incentive scale. The Respondent answered that
‘‘we did not expect them to work at the same level of
effort [that they had as incentive workers], but if the
company were to be successful we had to have them
work as fast as we could and yet be a reasonable
standard.’’
The third bargaining session was held on September
1, during which the Respondent presented the Union
with a complete contract proposal containing signifi-
cant changes in the existing agreement. One of these
changes concerned ‘‘quality and quantity’’ standards.
Section 9.1 of the Respondent’s proposed manage-
ment-rights clause stated, as relevant here:
9.1 Except as expressly limited in this Agreement,
the Company retains all the rights and functions
of management, the exercise of which shall not be
subject to arbitration. Without limiting the above
statement, these rights include:
1058 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 As initially proposed, sec. 16.4 stated in full that ‘‘[i]n an effort to im-
prove overall plant efficiency and to provide maximum opportunities for
steady continuing employment the Union will cooperate with the Employer to
improve methods and machinery within the plant for the purpose of reducing
costs of labor and materials, including the Employer’s right to establish rea-
sonable standards of performance in connection with work measurement sys-
tems.’’ The Respondent later proposed a nonsubstantive change in the lan-
guage, so that the last part of the above-quoted language would read: ‘‘for the
purpose of reducing costs of labor and material. The Employer has the right
to establish reasonable standards of performance in connection with work
measurement systems.’’
(e) the determination of quality and quantity
standards and judgment of workmanship required.
The continued failure of an employee to produce
on the basis of Company standards will be con-
sidered just cause for discipline up to and includ-
ing discharge.
The Union objected to section 9.1(e) because it feared
that the provision would prevent it from grieving ad-
verse decisions by the Respondent. When the Union
asked who would set the standards and whether there
were any standards in existence, Murphy replied that
the Respondent was going to determine the standards
and that it was working on them, but that ‘‘it could
take months and months to get them.’’
The Respondent’s contract proposal also included
another provision, section 16.4, which gave it the
‘‘right to establish reasonable standards of performance
in connection with work measurement systems.7 The
Union asked what the Respondent meant by work
measurement systems. According to Sumpman, the Re-
spondent replied that, ‘‘They didn’t have them. They
didn’t know what they would be except they wanted
the right to put them in if and when they chose
. . . .’’ Benfer said that during this meeting Murphy
told the Union that the Respondent planned to imple-
ment standards without bargaining, but that they did
not have them yet.
The parties next discussed production standards at
the seventh bargaining session on September 8. The
Respondent told the Union at this session that under its
proposed management-rights clause it had the right to
establish ‘‘production’’ standards and that unit employ-
ees who failed to meet the Respondent’s ‘‘quality’’
standards could be subject to discharge. The Union’s
vice president, Bell, asked whether the Respondent had
set any ‘‘performance standards.’’ Murphy replied,
‘‘no, that it may take a long time, years maybe.’’
Chartrau explained that the standards they were devel-
oping ‘‘would be just like all the other people that
work on a flat rate.’’ Bell then asked if the ‘‘produc-
tion standards’’ were negotiable and Kelso said that
they were not.
The Respondent informed the Union at the next bar-
gaining session on September 9 that the reference to
‘‘reasonable standards of performance’’ in section 16.4
served to limit the scope of the Respondent’s actions
under section 9.1(e). According to the Respondent, this
meant that if the Respondent disciplined an employee
for failing to meet its ‘‘performance standards,’’ the
Union could file a grievance and allow an arbitrator to
decide whether the standard that the Respondent had
implemented was reasonable. The Union, however, did
not think that it could win a grievance based on the
argument that the Respondent’s standards were unrea-
sonable. Sumpman told the Respondent that the Union
was concerned about the lack of standards for the in-
centive workers, particularly because Murphy had said
that they were nonnegotiable.
Standards were not specifically discussed again until
the September 29 session. During that meeting, the
Union asked the Respondent, ‘‘If you didn’t have any
standards, why do you need the language in there.’’
Chartrau replied that ‘‘We do have standards and we
need that language in there.’’ On September 30, the
Union informed the Respondent that it could not agree
to the 9.1(e) and 16.4 proposals on standards because
it had no idea what standards the Respondent planned
to implement.
The parties again discussed this subject at the 21st
bargaining session on October 8. The record evidence
regarding this important meeting is confusing. It ap-
pears that at times during this meeting the Union
thought that the Respondent was discussing employee
‘‘performance standards’’ that it intended to establish
unilaterally as a basis for disciplining employees who
failed to meet them, whereas the record suggests that
the Respondent actually was referring to ‘‘cost stand-
ards’’ for various jobs which in at least some cases
were already in existence and which had no impact on
the unit employees’ terms and conditions of employ-
ment.
The Union asked the Respondent for specific infor-
mation about ‘‘production standards.’’ The Union ex-
plained to the Respondent that with 40 percent of the
unit employees being converted from incentive to
hourly pay under the Respondent’s proposal, the Union
anticipated questions from the former incentive em-
ployees about how much they would have to produce
under an hourly pay system. The Union told the Re-
spondent that it wanted to know what the standards
were going to be and that it wanted to bargain about
them.
The Respondent told the Union that it had some but
not all of the ‘‘production standards’’ and that it was
not going to negotiate those standards because there
were too many of them. Chartrau stated that the Re-
spondent had finished a couple of standards and that
it had taken a couple of weeks to compile this data.
He told the Union that the Respondent would have its
head engineer explain the standards to the Union. The
Union replied that the samples the Respondent offered
would not be sufficient to alleviate its concerns about
the production levels at which the Respondent ex-
1059GRINNELL CORP.
pected the incentive workers to produce as hourly em-
ployees. When Bell later asked to see the few samples
that the Respondent had completed, Chartrau replied
that the Respondent’s officials did not have any stand-
ards with them at that time.
Chartrau’s bargaining notes indicate that during this
discussion he told the Union that there would be
33,200 different ‘‘production standards’’ and that the
Respondent had completed 2600 of them. It appears
that at this point Chartrau was referring to
cost/scheduling standards because the Respondent later
told the Union that it had never established ‘‘a pieces
per hour disciplinary standard’’ for hourly employees
and that it did not intend to set such a rate covering
incentive workers either. Further, on several occasions,
Chartrau said that the Respondent and the Union were
talking about two separate things in discussing ‘‘pro-
duction standards.’’
Sumpman’s testimony shows the confusing state of
the record.
The company said they had different positions at
different times. I do not deny at one point in time
the company said they are cost standards. One
time they said they are production standards.
Sumpman testified that during negotiations the ‘‘dis-
ciplinary production standards’’ that the Union sought
to negotiate were referred to as ‘‘production stand-
ards,’’ and that ‘‘at one point in time’’ the Respondent
said that it was ‘‘looking at cost scheduling stand-
ards.’’ Sumpman further testified that the Respondent
said that it wanted the right to establish ‘‘incentives or
production standards’’ and that it was working on de-
veloping them. Sumpman testified that he thought a
production standard had to be either a pieces-per-hour
number or some type of level at which an employee
would be expected to perform. Sumpman further testi-
fied that the Respondent stated that there had never
been ‘‘pieces per hour disciplinary standards for flat
rate employees’’ and that the Respondent would not
set a ‘‘numerical disciplinary production standard’’ for
either incentive or flat rate employees, but instead
would tell employees that they were expected to do ‘‘a
fair days [sic] work for a fair days [sic] pay.’’
Sumpman testified that ‘‘at one point during negotia-
tions they became cost standards and not production
standards.’’ Sumpman testified that at one point ‘‘later
in the negotiations,’’ Chartrau stated that ‘‘we are talk-
ing about two different things,’’ but that the Respond-
ent’s original position had to do with ‘‘production
standards,’’ which according to Sumpman meant
‘‘standards that would be used for disciplinary pur-
poses.’’ When Sumpman was asked during his testi-
mony whether Chartrau ever confirmed that he was
working on disciplinary standards, Sumpman testified:
[Chartrau] did not use the word disciplinary, but
the language said it to be production standards
that maybe [sic] established that discipline would
be issued if they weren’t met. He didn’t say I am
looking for standards to fire people on. He said
we are working on production standards at one
point. That was in the beginning of negotiations.
We don’t know when we will have them. We are
working on the [sic.] There are thousands of them
and Mr. Kelso [said] they were not cost standards
at that point. The cost standards crap came in at
the end of the thing and I shouldn’t use that ex-
pression, but somewhere down the road they be-
came cost standards yes.
Additionally, the Respondent’s attorney, Kelso, told
the Union at the October 8 meeting that the Respond-
ent intended to treat incentive workers the same as it
had hourly employees. Kelso claimed that all the Re-
spondent really wanted was ‘‘a fair day’s work for a
fair day’s pay.’’ Local Vice President Bell then asked
Kelso if the Respondent was using any particular for-
mula for determining ‘‘production standards.’’ After
Kelso said that it was not, the Union asked him why
the Respondent wanted to implement these standards.
Kelso replied that the Respondent wanted the right to
discipline an employee who was not performing ‘‘up
to par,’’ and that if an employee was ‘‘not pulling his
load we want to be able to establish a standard on him
and get him to perform up to his capabilities.’’
There was only one discussion of the standards pro-
posed in section 9.1(e) after the collective-bargaining
agreement expired on October 10. During a meeting on
October 14, the Union again expressed its concern
about ‘‘production standards’’ and whether an em-
ployee could be disciplined for failure to meet them.
The Respondent showed the Union ‘‘production stand-
ards’’ for Tracy Good and Sam Huntoon, two hourly
employees who served on the Union’s negotiating
committee. Neither employee had seen these standards
before. Chartrau told the Union that these were ‘‘cost
standards’’ which had been applied to hourly jobs for
years. When the Union asked for copies of other stand-
ards, the Respondent said that it had 40,000 of these
standards and that it would not give them all to the
Union. The Respondent claimed that this information
constituted its minimum ‘‘production standards’’ and
that employees who knew them would be able to
slacken their pace after they had reached the minimum.
On October 18, 1 week after the parties’ collective-
bargaining agreement expired, the Respondent refused
to permit the unit employees to report for work unless
they agreed to work in accordance with the terms of
the Respondent’s last contract offer. Most of the unit
employees refused to work under these conditions. On
October 22, the Union established a picket line at the
Respondent’s plant. The Respondent then hired re-
1060 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 In reaching this conclusion, as indicated previously, we do not rely on
the judge’s analysis. We do, however, note that (as the General Counsel point-
ed out in his exceptions) the judge erroneously concluded that he would have
had to first find that the Respondent generally engaged in bad-faith bargaining
during the negotiations before he could find that it violated Sec. 8(a)(5) by
its bargaining conduct with respect to any particular subject, such as the issue
regarding job-performance standards raised here. Although the Board can in-
deed find bad-faith bargaining based on the totality of the circumstances, see,
e.g., Reichhold Chemicals, 288 NLRB 69 (1988), and Houston County Elec-
trical Cooperative, 285 NLRB 1213 (1987), the Board can also find bad-faith
bargaining on the basis of a party’s failure to bargain in good faith over a
single mandatory subject of bargaining. See, e.g., Rocky Mountain Hospital,
289 NLRB 1347 (1988); San Isabel Electric Services, 225 NLRB 1073, 1078,
1080 (1976).
9 Although the judge found that the complaint did not encompass this allega-
tion, we agree with the General Counsel that the complaint, which alleges gen-
erally that the Respondent refused to ‘‘negotiate with respect . . . employee
performance standards,’’ is sufficiently broad to raise this issue.
10 See, e.g., Allied Chemical Workers v. Pittsburgh Glass, 404 U.S. 157,
178–179 (1971); and United Technologies Corp., 274 NLRB 1069, 1070
(1985), and cases cited therein.
11 The Board’s finding in Master Slack, 230 NLRB 1054, 1055, 1066–1067
(1977), enfd. 618 F.2d 6 (6th Cir. 1980), that the ‘‘production rates and
quotas’’ in that case were mandatory subjects of bargaining, does not require
the same result with regard to the cost/scheduling standards in the instant case.
In Master Slack, the production rates and quotas were shown to have had a
material and significant effect on rates of pay, whereas in the instant case the
cost/scheduling standards were not shown to have had such an effect.
placement employees. It is undisputed that subsequent
to this time the Respondent did not implement any
new performance standards covering unit work. On
November 14, 1988, the Union made an offer to the
Respondent that the unit employees would return to
work under the terms of the expired contract. The Re-
spondent rejected the offer.
B. Analysis and Conclusions
In our view, the record does not establish that the
Respondent failed to bargain in good faith about exist-
ing or proposed standards.8 The record evidence dis-
cussed above shows that at the outset of the parties’
negotiations the Respondent presented the Union with
a proposed collective-bargaining agreement that under
section 9.1(e) gave the Respondent the right unilater-
ally to establish performance/discipline standards for
the unit employees, and that section 16.4 gave the Re-
spondent the right unilaterally to establish ‘‘reasonable
standards of performance in connection with work
measurement systems.’’ Under these contract pro-
posals, any unit employee who failed to meet such
standards was subject to discipline up to and including
discharge. The Respondent’s authority on this subject
was limited only by the right of a disciplined employee
to file a grievance regarding the ‘‘reasonableness’’
under section 16.4 of the performance/disciplinary
standard that the Respondent had applied. Later in the
negotiations, at least by October 8, the Respondent
began referring to cost/scheduling standards that the
Respondent used to determine the cost per unit, includ-
ing employees’ wages and benefits, materials, and
overhead, of performing a specified production step.
Regarding the Respondent’s alleged failure to bar-
gain in good faith over existing performance stand-
ards,9 the evidence establishes that at the time the par-
ties engaged in bargaining the Respondent did not
have any performance/discipline standards covering the
unit employees. Although there were cost/scheduling
standards in existence covering jobs performed by the
unit employees, it is undisputed that the Respondent
had never employed these standards in the manner that
it proposed to employ performance/discipline standards
under section 9.1(e), i.e., to impose employee dis-
cipline. Also, there is no evidence that the Respondent
planned to use its existing cost/scheduling standards as
a basis for disciplining unit employees. We therefore
find that the Respondent’s existing cost/scheduling
standards are not mandatory subjects of bargaining be-
cause the record does not establish that they have or
were going to have a material or significant effect on
the unit employees’ terms and conditions of employ-
ment.10 In so concluding, we stress that the two exam-
ples of existing production standards the Respondent
offered, involving hourly employees Tracy Good and
Sam Huntoon, clearly were cost/scheduling standards
and not performance/discipline standards. It is note-
worthy that although the standards for Good’s and
Huntoon’s jobs had been in existence for years, neither
employee was even aware of the standards’ existence,
nor had their performance ever been evaluated in ac-
cordance with these standards. Thus, these
cost/scheduling standards apparently were standards
utilized by the Respondent to schedule work and deter-
mine costs of manufacturing. Moreover, there has been
no showing in this case that these examples were dif-
ferent in kind from the 2600 other cost/scheduling
standards the Respondent said that it possessed. Thus,
because the evidence is that the only standards for
hourly jobs that the Respondent had in existence at the
time of the parties’ contract negotiations were
cost/scheduling standards which we have found are not
mandatory subjects of bargaining, we conclude that the
Respondent has not violated Section 8(a)(5) of the Act
by refusing to bargain concerning existing performance
standards.11
Regarding the Respondent’s alleged failure to bar-
gain in good faith about proposed performance/
discipline standards, we find that the record does not
establish that the Respondent was in the process of es-
tablishing preset, numerical performance/discipline
standards covering the unit employees. Thus, we con-
clude that the Respondent has not been shown to have
unlawfully refused to provide the Union with informa-
tion concerning factors assertedly being considered in
the development and establishment of preset, numerical
performance/discipline standards covering the unit em-
ployees.
Although the parties’ negotiations on the subject of
‘‘standards’’ were confusing to both sides, we find that
1061GRINNELL CORP.
12 In so doing, we note the apparent confusion on the part of the parties
during negotiations about what each other was referring to in regards to
‘‘standards,’’ the continued confusion of the witnesses and the attorneys as the
evidence on this subject was introduced during the hearing, and the resultant
confused state of the record evidence in this regard. Although it appears that
often the parties were talking about two different standards, the record fails
to establish that the Respondent deliberately miscommunicated or attempted to
mislead the Union’s negotiators.
Because there is no evidence that subsequent to the bargaining impasse the
Respondent implemented any preset, numerical performance/discipline stand-
ards, we find it unnecessary to decide whether the Respondent would have
violated the Act under Board’s decision in Colorado-Ute Electric Assn., 295
NLRB 607 (1989), if it had implemented such standards.
1 The charge in Case 4–CA–16881 was filed by the International Molders
and Allied Workers Union, AFL–CIO Union on October 13, 1987. The charge
in Case 4–CA–17731 was filed by Local 376 on November 21, 1988. A con-
solidated complaint based upon both charges issued on February 28, 1989. (In
the 16-month interim between the filing of the first charge and the issuance
of the complaint, the Division of Advice advised the Regional Director of Re-
gion 4, in April 1988, that the October 1987 charge should be dismissed, an
appeal was taken, and the Office of Appeals concluded that a complaint should
issue.) I heard the case in Lancaster, Pennsylvania, on April 3, 4, and 5, 1989.
The General Counsel, the Union, and Grinnell have filed briefs.
2 Grinnell admits that it is an employer engaged in commerce for purposes
of the National Labor Relations Act (the Act).
3 All production and maintenance employees of Grinnell at its Columbia
plant, including weighmaster, shipping department employees, warehousemen,
group leaders, plant janitors, but excluding patternmakers and their appren-
tices, watchmen, gardener, laboratory technicians, time and motion study em-
ployees, office janitress, office clerical employees, storeskeeper and super-
visory staff. There are about 750 employees in that unit.
4 Grinnell admits that Local 376 is a labor organization within the meaning
of the Act. The International Molders and Allied Workers Union merged with
the Glass, Pottery, Plastics and Allied Workers International Union on May
1, 1988. Grinnell’s answer admits that the Company continued to recognize
Local 376 as the representative for employees at its Columbia, Pennsylvania
plant following the merger.
5 Representatives of both the International Union and Local 376 bargained
on behalf of the employees. The word Union, as used in this decision, refers
collectively to both the International and the Local.
the Respondent ultimately made it reasonably clear to
the Union that it was not in the process of developing
performance/discipline standards and that employees
formerly receiving incentive pay would be treated the
same as hourly workers. During the negotiations the
Respondent repeatedly told the Union that what it real-
ly wanted from the unit employees was ‘‘a fair day’s
work for a fair day’s pay.’’ Further, the Respondent
told the Union during negotiations that it planned to
treat the former incentive workers, who composed 40
percent of the unit employees and whose status as
hourly workers under performance/discipline standards
was the Union’s principal concern here, no differently
than it had treated hourly employees in the past. It is
undisputed that the Respondent never had disciplined
an hourly employee for failing to meet its
cost/scheduling production standards.
For the above reasons, we find that the General
Counsel has failed to establish by a preponderance of
the evidence that the Respondent has violated the Act
as alleged in this case.12 Accordingly, we shall dismiss
the instant complaint.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
William Slack, Jr. and Barabra O’Neill, Esqs., for the Gen-
eral Counsel.
Charles Kelso, Michael C. Towers, and David Kresser, Esqs.
(Fisher & Phillips), of Atlanta, Georgia, for the Respond-
ent.
David M. Cook, Esq. (Kircher & Phalen), of Cincinnati,
Ohio, for the Charging Parties.
DECISION
I. INTRODUCTION
STEPHEN J. GROSS, Administrative Law Judge. This pro-
ceeding1 concerns Grinnell Corporation’s Columbia, Pennsyl-
vania plant,2 most of the employees of that plant,3 and the
union that represents them, Local 376 of the Glass, Molders,
Pottery, Plastics and Allied Workers Union.4
In mid-August 1987 Grinnell and the Union began bar-
gaining about a new agreement, since the then-current agree-
ment expired by its own terms on October 10.5 (All events
that this decision refers to occurred in 1987 unless otherwise
specified.) From the start of the bargaining it was clear that
Grinnell wanted terms very different from those in the about-
to-expire contract. Under the Company’s proposals, every-
thing from wages to washup time would have been changed
in ways contrary to the employees’ desires.
The employees were outraged by the changes that Grinnell
proposed, and twice voted to reject Grinnell’s proposed col-
lective-bargaining contract, urging instead that the terms of
the old collective-bargaining contract remain in force while
bargaining continued. But beginning on October 18, a week
after the old agreement expired, Grinnell refused to permit
employees to come to work unless they were willing to work
in accordance with the terms of the Company’s latest offer.
Most of the employees refused to work under those terms,
and on October 22 Local 376 established a picket line at the
Columbia plant. Grinnell responded by hiring replacement
employees. (The striking employees have since offered to re-
turn to work. But that offer is conditioned on Grinnell re-
instituting the pre-October 18 terms of employment.)
The General Counsel alleges that in the course of the bar-
gaining between August and October, Grinnell violated by
Section 8(a)(5) of the Act by ‘‘refusing to negotiate with re-
spect to merit pay, a bonus plan, and employee production
standards.’’ The General Counsel further contends that if—
but only if—Grinnell did violate the Act in those respects:
(1) the Company’s imposition of new terms and conditions
of employment on October 18 violated the Act; and (2)
Grinnell’s failure to reinstate the strikers violated the Act.
In sum, this case hinges on whether Grinnell’s dealings
with the Union about merit pay, bonus plans, and employee
production standards violated Section 8(a)(5) of the Act.
For better or for worse, the National Labor Relations Act
precludes the Board from deciding matters such as these on
the basis of whether Grinnell’s proposals or bargaining style
seem to the Board to be reasonable or hardhearted, fair or
onerous, conciliatory or abrupt. ‘‘The Board is not permitted
. . . to require the employer to contract in a way which the
Board deems proper.’’ Commercial Candy Vending Division,
294 NLRB 908 (1989) (hereafter Commercial Candy); see
1062 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 Sec.16.4 read, in full: ‘‘In an effort to improve overall plant efficiency and
to provide maximum opportunities for steady continuing employment the
Union will cooperate with the Employer to improve methods and machinery
within the plant for the purpose of reducing costs of labor and materials, in-
cluding the Employer’s right to establish reasonable standards of performance
in connection with work measurement systems.’’ Grinnell later proposed a
nonsubstantive change in the language, so that the last part of the above-
quoted language would read, ‘‘[f]or the purpose of reducing costs of labor and
material. The Employer has the right to establish reasonable standards of per-
formance in connection with work measurement systems.’’
NLRB v. Insurance Agents, 361 U.S. 477, 487 (1960); NLRB
v. American National Insurance Co. 343 U.S. 395 (1952).
Rather, the Board is empowered only to determine whether
Grinnell failed to bargain ‘‘in good faith.’’ And having con-
sidered the evidence in light of the standards set by the
Board for evaluating an employer’s bargaining, my conclu-
sion is that Grinnell, when bargaining about performance
standards, bonus programs and merit pay, did so in good
faith. That, in turn, means that Grinnell did not violate the
Act when it implemented new terms of employment on Octo-
ber 18, nor did it when it refused to reinstate strikers.
I accordingly will recommend that the Board dismiss the
complaint against Grinnell.
II. AN OVERVIEW OF THE BARGAINING
Meetings between Grinnell and the Union began on Au-
gust 11. On that day, and at the second and third meetings,
on August 18 and September 1, Grinnell presented contract
proposals that would have changed virtually every provision
of the then-existing collective-bargaining contract, with the
changes uniformly contrary to the desires of the Union and
the employees. Just by way of example: wages would have
been reduced by an average of about $3 an hour; holidays
cut back; incentive pay (applicable to 40 percent of the work
force) eliminated; seniority made irrelevant to promotions,
job transfers, layoffs and recalls; overtime pay reduced; time
allowed on paid breaks reduced; paid washup time elimi-
nated; medical and dental benefits curtailed; the number of
shop stewards cut back; grievance procedures revised; a
broad management rights clause added to the contract; and
the probationary period for new employees increased from
42 to 180 days.
Representatives of Grinnell and the Union met an addi-
tional 24 times prior to the strike. (They continued to meet
after the strike got under way. But it is the period prior to
the strike that concerns us here.) During that period Grinnell
eased many of its demands. Thus—again by way of example
only—relative to its initial proposal Grinnell increased its
proposed wage rates, increased the number of holidays it
would grant employees, increased the number of shop stew-
ards it would permit, decreased the proposed probationary
period, and agreed to take seniority into account, with other
factors, on matters such as layoffs and promotions. Moreover
Grinnell offered to open its books and records to inspection
by the Local 376.
A key factor in evaluating an employer’s bargaining is
whether the employer showed an interest in arriving at agree-
ment with the union or was in reality trying to avoid agree-
ment. Reichhold Chemicals, 288 NLRB 69 (1988) (Reichhold
II); Commercial Candy, supra at 910. And although, from the
vantage point of the employees and their union, Grinnell’s
initial proposals were grim indeed, the Company’s willing-
ness to back off some of its demands does suggest a desire
to obtain the Union’s agreement to a contract. Moreover no
one claims that Grinnell tried to sabotage the bargaining with
tactics like refusing to meet reasonably frequently, insisting
on inconvenient times or places for meetings, bypassing
Local 376, failing to designate representatives with sufficient
bargaining authority, withdrawing already agreed-upon provi-
sions, having its bargaining representatives utter coercive
statements, or, away from the bargaining table, violating its
employees’ Section 7 rights. See, e.g., Hotel Roanoke, 293
NLRB 182 (1989); Atlanta Hilton & Towers, 271 NLRB
1600, 1603 (1984).
Finally, ‘‘Respondent did not seek to create a situation
where the Union would have no voice whatsoever con-
cerning any facet of the employment relationship.’’
Reichhold II, supra at 71.
The General Counsel claims, as indicated earlier, that
Grinnell refused to bargain in good faith about three specific
facets of the Company’s proposed collective-bargaining
agreement. But in light of cases like Reichhold II and Com-
mercial Candy, it is hard to conceive of circumstances in
which an employer could be said to have bargained in good
faith over all but three provisions of a proposed collective-
bargaining contract but failed to bargain in good faith over
the remaining three. Since the General Counsel does not
claim that, on an overall basis, Grinnell bargained in bad
faith, and given the facts outlined above, perhaps this deci-
sion should end right here.
Nonetheless, the next parts of this decision consider
Grinnell’s behavior at the bargaining table in regard to per-
formance standards, bonus programs, and merit pay.
III. PERFORMANCE STANDARDS
The Proposed Contract Provisions At Issue
On September 1 Grinnell delivered a proposed collective-
bargaining contract to the Union. Section 9.1(e) read:
Except as expressly limited in this Agreement, the
Company retains all the rights and functions of man-
agement, the exercise of which shall not be subject to
arbitration. Without limiting the above statement, these
rights include:
. . . .
The determination of quality and quantity standards
and judgment of workmanship required. The continued
failure of an employee to produce on the basis of Com-
pany standards will be considered just cause for dis-
cipline up to and including discharge.
In addition, another provision, section 16.4, provided that
Grinnell had the ‘‘right to establish reasonable standards of
performance in connection with work measurement sys-
tems.’’6
The General Counsel’s Contentions
The complaint alleges that Grinnell failed to bargain in
good faith about, among other things, ‘‘employee production
standards.’’ On brief the General Counsel argues that
Grinnell violated the Act by: (1) ‘‘insisting upon a proposal
which excluded the Union from any effective role in the cre-
ation of performance standards’’; (2) ‘‘failing to bargain in
1063GRINNELL CORP.
7 On brief, the Union does claim that its bargaining representatives were du-
bious about the arbitrability of disciplinary action under sec. 9.1(e). But the
record shows otherwise. Moreover at no time did the Union propose language
changes designed to ensure that arbitrators would measure ‘‘Company stand-
ards’’ against a criterion of ‘‘reasonableness.’’
8 Grinnell called no witnesses. This evaluation of the bargaining table be-
havior of Grinnell’s bargaining representatives is based on testimony of some
of the Union’s bargaining representatives and on the notes of the bargaining
sessions that have admitted into the record as exhibits.
9 Anytime a supervisor anywhere accuses an employee of not getting enough
work done, or of below-par quality, the supervisor is thereby applying some
set of standards—whether or not the supervisor recognizes that to be the case.
And those standards may be exceedingly complex, taking into account factors
such as the idiosyncrasies of the particular machinery the employee is working
with, the employee’s past record, the interplay of quantity and quality, and the
varying working conditions in the plant. On brief Grinnell alludes to all this.
But the difference between most industrial situations and the one at hand is
that Grinnell has opted to seek explicit waiver by Local 376 of any right to
participate in the formulation of such standards.
good faith over the proposal; and (3) ‘‘refusing Union re-
quests to negotiate over existing performance standards.’’
How the Parties Read Proposed Sections 9.1(e)
and 16.4
Early in the bargaining, Grinnell’s representatives told the
Union that section 16.4—with its reference to ‘‘reasonable
standards of performance’’—limited the scope of the Com-
pany’s actions under section 9.1(e). Thus, said the Company,
if Grinnell disciplined an employee for failing to meet
‘‘Company standards,’’ the Union could grieve, and an arbi-
trator would then determine whether the standards against
which Grinnell measured the employee were ‘‘reasonable’’
ones.
The Union did not dispute that interpretation.7
The Bargaining Over Performance Standards,
in General
The parties touched on Grinnell’s performance standards
proposal on August 18 and September, 1 and discussed it at
some length on September 9. On September 28, the Union
proposed modifications to section 9.1(e). A day later Grinnell
rejected the Union’s proposal. Then, on October 8, the par-
ties spent hours discussing the Company’s performance
standards proposal. More discussion followed on October 9
and October 14. (The parties continued to discuss the subject
after the strike. But those discussions are not at issue here.)
Throughout those discussions, Grinnell’s representatives
listened to what the Union representatives had to say, replied
to the Union’s arguments, and earnestly tried to convince the
Union representatives that the Company’s proposal was not
damaging to the employees or the Union.8
But notwithstanding that kind of behavior, which ordi-
narily unequivocally spells out ‘‘good faith,’’ some facets of
the Company’s bargaining merit a close look.
Evidence of Grinnell’s Bad Faith
The Union’s main worry was about how an arbitrator
would measure reasonableness when evaluating disciplinary
action by Grinnell against an employee for failing to meet
Company standards. The question was especially troubling,
opined the Union, regarding jobs that were subject to incen-
tive pay under the then about-to-expire contract but which,
under Grinnell’s proposed collective-bargaining agreement,
would become flat rate jobs. And the Company’s insistence
that the number of employee classifications be drastically re-
duced further exacerbated the matter. For example, what if:
(1) a particular job had been previously done by an employee
getting incentive pay and who, because of that pay system,
worked extraordinarily hard; (2) Grinnell were to move into
that job an employee who had never done it before (as the
Company easily could under its proposed classification sys-
tem); (3) Grinnell subsequently fired the employee on the
ground that he or she failed to ‘‘produce on the basis of
Company standards’’; and (4) the Union grieved. Mightn’t
the arbitrator, worried the Union, determine the reasonable-
ness of Grinnell’s standards on the basis of the exceedingly
high output of the previous incentive-pay employee.
On the face of it, the parties could have dealt with the
Union’s concerns by including in the proposed collective-
bargaining agreement a definition of ‘‘reasonable’’ for pur-
poses of section 16.4. But neither the Union nor Grinnell
proposed that. Rather, the Union decided that because of
such concerns it needed to participate in the ‘‘determination
of quality and quantity standards’’ (in the language of sec.
9.1(e)). In the very least, argued the Union, it needed more
information about the kinds of standards the Company had
in mind.
Grinnell, however, adamantly insisted that the Union agree
to the language of the Company’s proposal, under which the
Union would waive the right to so participate. That insist-
ence on Grinnell’s part is not itself evidence of bad faith.
But in the course of that insistence, Grinnell refused to pro-
vide the Union with any information about the standards it
planned to adopt; refused to provide any information about
the standards that were already in being; and argued that the
standards were ‘‘irrelevant’’ to the employees but then would
not explain why, if that were so, it needed the provision.
Refusal to provide information about proposed standards.
When the Union asked what kind of standards Grinnell had
in mind, Grinnell’s representatives said that the Company
wanted to be able to insist that the Company get ‘‘a fair
day’s work for a fair day’s pay.’’ When the Union asked for
something more specific than that, Grinnell’s response was
on the order of, ‘‘we wouldn’t begin to attempt to define
that.’’
That kind of response was no real response at all, given
the fact that the proposed contract provided that employees
could be disciplined for failing to meet ‘‘Company stand-
ards.’’ Moreover no matter how the Union attempted to get
some information about the standards that section 9.1(e) re-
ferred to, it could get no useful response. Thus when a Union
representative asked ‘‘what measurement system are you
going to use,’’ a Grinnell representative responded that the
Company had not selected ‘‘any one system.’’
Grinnell, that is, insisted on a contract provision that ex-
plicitly gave it the right to unilaterally adopt quality and
quantity standards, which standards would be used for dis-
ciplinary purposes, and, at the same time, refused to give the
Union a clue about what kind of standards the Company
planned to install.9
Refusal to provide information about existing standards.
At the October 8 bargaining session, Grinnell advised the
Union that of the tens of thousands of standards that would
ultimately be needed, 2600 were already in existence. The
Union promptly asked to see what they looked like. Grinnell
1064 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
refused, saying that the standards were ‘‘irrelevant.’’ Ulti-
mately the Company showed the union representatives 2 of
the 2600 standards.
Failure to explain why the Company needed the provi-
sions. As just indicated, at one point Grinnell argued that the
standards to which section 9.1(e) referred were ‘‘irrelevant.’’
But if that were true, then Grinnell should have responded
favorably to the Union’s proposal that the offending lan-
guage be deleted. Grinnell did not, instead insisting on reten-
tion of such language.
Performance Standards—Conclusion
The question is whether an employer that insists on union
agreement to a contract provision giving the employer the
right to unilaterally adopt standards pursuant to which em-
ployees may be disciplined may ever lawfully: (1) refuse to
give the union any hint about the nature of the proposed
standards; (2) refuse to show the union existing standards
(except for a token few); and (3) claim that the standards are
irrelevant to the union’s concerns yet fail to explain why, if
that is so, the employer considered union agreement to the
provision to be essential.
Perhaps the answer should be ‘‘no.’’ Cf. NLRB v. Truitt
Mfg. Co., 351 U.S. 149 (1956). If so, Grinnell violated Sec-
tion 8(a)(5). But as I understand the meaning to be ascribed
to Section 8(a)(5), one must consider the employer’s bar-
gaining in its entirety, including conduct of that sort. And if
that course is followed, my conclusion is that Grinnell’s bar-
gaining about performance standards did not violate the Act.
First, the contract language at issue certainly is not so on-
erous as to virtually force a union to reject it. Under it,
Grinnell can fire employees, or discipline them in lesser
ways, if Grinnell believes that their production is below its
standards. But under the Company’s proposal, the standards
that Grinnell adopts must be ‘‘reasonable.’’ Thus any time
Grinnell does discipline an employee for below-par produc-
tion, Local 376 can grieve, in which case Grinnell has to
convince an arbitrator that the standard it used was in fact
‘‘reasonable.’’
Secondly, as discussed already, in respect to other provi-
sions of the proposed collective-bargaining agreement,
Grinnell backed off a number of its demands, sometimes ac-
cepting changes proposed by the Union. And in respect to
sections 9.1(e) and 16.4, as also previously discussed,
Grinnell’s representatives engaged in lengthy discussions
about them with the Union, listened to what the union rep-
resentatives had to say, and tried hard to convince the Union
that the Union should not let those provisions stand in the
way of an agreement.
In sum, if one focuses solely on Grinnell’s stance con-
cerning performance standards, then Grinnell did ‘‘dem-
onstrate an unyielding rigidity during negotiations’’ that
‘‘rendered collective bargaining’’ of that facet of the pro-
posed contract ‘‘a futility.’’ Commercial Candy, supra at
908. But certainly that is not true of Grinnell’s bargaining
taken as a whole. And even focusing just on sections 9.1(e)
and 16.4, the record fails to show that Grinnell took the posi-
tions it did ‘‘in order to frustrate agreement on a contract.’’
Id at 910. In fact the reverse is true. The evidence before me
shows that Grinnell tried hard to convince the Union to ac-
cept the provisions.
There remains, however, one last matter to consider re-
garding Grinnell’s bargaining about performance standards:
namely, the fact that Grinnell refused to bargain about exist-
ing performance standards.
Grinnell’s Refusal to Bargain About Existing
Performance Standards
Grinnell admitted to having in place about 2600 separate
standards for evaluating employee performance. The Union
wanted to bargain about them. Grinnell refused. The General
Counsel’s brief claims that ‘‘[s]ince performance standards
are a mandatory subject of bargaining, Respondent had an
obligation to bargain with the Union about these standards.’’
Brief at 62.
That claim raises troubling issues. Obviously to whatever
extent those 2600 standards affect Grinnell’s employees, they
are mandatory subjects of bargaining. And Grinnell did
refuse to bargain about them. But the question is whether,
given the nature of the complaint and the contents of the
record, the General Counsel has shown that Grinnell thereby
violated the Act.
The complaint. The whole thrust of the complaint and of
the General Counsel’s evidence is that Grinnell refused to
bargain in good faith about a new collective-bargaining con-
tract. If the General Counsel is arguing that, apart from
issues concerning the new collective-bargaining contract,
Local 376 was entitled to bargain about performance stand-
ards, then, in my view, the claim is outside the scope of the
complaint.
Moreover the record indicates that the Union wanted to
bargain about the performance standards only because of
Grinnell’s proposed section 9.1(e).
Were the standards mandatory subjects of bargaining. The
record does not tell us how Grinnell planned to use those
2600 standards absent a collective-bargaining contract provi-
sion on the order of section 9.1(e). (That absence of informa-
tion, in fact, again shows that the focus of the case is on the
bargaining over the terms of a new collective-bargaining
agreement.) What the record does tell us is that until Grinnell
raised the matter with its proposed contract language: (1) no
employee even knew about Grinnell’s performance standards;
and (2) no Grinnell employee has ever been disciplined for
failing to measure up to company-imposed standards.
Under these circumstances I can only conclude that there
has been no showing that, absent Grinnell’s proposed con-
tract provisions, those 2600 standards are mandatory subjects
of bargaining.
IV. BONUS PROGRAMS
The proposed collective-bargaining contract that Grinnell
gave to the Union on September 1 included a provision, sec-
tion 17.3, that dealt with ‘‘bonus programs.’’ Section 17.3
read:
The employer may from time to time establish, modify
and abolish production bonus programs to give employ-
ees added motivation to improve quantity and quality of
production; provided, however all employees shall be a
guaranteed an hourly wage rate not lower than $1.50
per hour below the rates shown on the wage supple-
ment and further provided that all employees on such
programs, considered as a group, shall average over
1065GRINNELL CORP.
10 The General Counsel correctly points out that a willingness to ‘‘discuss’’
is not necessarily the same as an acceptance of the duty to bargain. For exam-
ple, the duty to bargain carries with it the duty to do so in good faith. It is
not entirely clear that the ‘‘discuss’’ requirement would have bound Grinnell
to a similar obligation. But until this past May, Grinnell had good reason to
believe that, had the contract required Grinnell to bargain with the Union prior
to implementing bonus plans, the Act would have precluded Grinnell from put-
ting such plans into effect during the term of the contract over the objections
of the Union, even if Grinnell had bargained in good faith and the parties had
reached impasse. See Speedrack, Inc., 293 NLRB 1054 (1989). Thus Grinnell
claimed, during contract negotiations, that had it agreed to bargain with Local
376 about the implementation of bonus plans, it would have thereby been giv-
ing the union what Grinnell called ‘‘veto power.’’
11 Reichhold II. Accord: Commercial Candy.
12 River City Mechanical, 289 NLRB 1503, 1504 (1988).
each year not less than the rates shown on the wage
schedule.
That, it is fair to say, was an extraordinary provision.
Under it Grinnell could have unilaterally: (1) given bonuses
of any amount to any employees it chose; and (2) reduced
the wages of other employees by as much as $1.50 an hour
below contract wage levels (subject only to maintaining a
specified average wage level).
During the first month or so of bargaining, Grinnell, in re-
sponse to Union objections, insisted on retention of the pro-
vision; declined to indicate what sort of ‘‘bonus programs’’
it had in mind; made it clear that the Company would not
consider revising the provision to require bargaining with
Local 376 over the establishment of any given bonus pro-
grams or ‘‘wage dips’’; and similarly refused to consider
having its decisions to set up bonus programs or institute
wage dips subject to arbitration.
But in mid-October Grinnell changed the language of sec-
tion 17.3. As revised, it: (1) eliminated Grinnell’s right to
impose any wage dip; (2) specified that Grinnell would ‘‘dis-
cuss’’ any proposed bonus plan with Local 376 prior to its
implementation; and (3) made Grinnell’s bonus-plan action
subject, to some limited extent, to grievance machinery. In
bargaining about the provision, moreover, Grinnell became
more specific about the kinds of bonuses it had in mind. As
revised, section 17.3 read:
The employer may from time to time establish, modify
and abolish production bonus programs to give employ-
ees added motivation to improve quantity and quality of
production. The establishment of such plans shall be
discussed with the Union prior to their implementation.
Any failure of the Employer to live up to the terms of
such Bonus Plan shall be subject to the Grievance pro-
cedure.
‘‘Discuss,’’ in turn, meant that Grinnell would: present
proposed bonus programs to Local 376 for its consideration;
listen to anything the union had to say about them; and mod-
ify the proposed programs in keeping with Local 376’s views
if, but only if, the Company liked the union’s suggestions.10
As for the nature of the bonuses, once the $1.50 dip was
deleted from the proposal, Grinnell’s representatives told
their union counterparts that the bonuses that the Company
had in mind were relatively modest prizes, such as trips to
Hawaii, savings bonds, small amounts of cash, or the like.
The Union, in response to Grinnell’s position, proposed
that while the Company retain the right to unilaterally imple-
ment a bonus program, Local 376 would thereafter have the
right to ‘‘negotiate’’ with Grinnell about the program and the
right to grieve if no agreement were reached. Grinnell flatly
rejected the Union’s proposal. In fact throughout the bar-
gaining Grinnell’s representatives refused to consider even
the possibility of allowing Local 376 either to ‘‘bargain’’
about (as opposed to ‘‘discuss’’) or arbitrate any bonus pro-
grams that Grinnell might want to institute.
Grinnell’s Bargaining About its Proposed Bonus
Program Provisions—Conclusion
The nature of a contract proposal can be evidence of bad
faith if the employer makes agreement by the union to it a
predicate to the employer’s willingness to enter into a collec-
tive-bargaining contract. But as touched on above, for that to
be so, the demand for the provision must be ‘‘clearly de-
signed to frustrate agreement on a collective-bargaining con-
tract’’11 or to ‘‘undermine the union’s representative sta-
tus.’’12
Grinnell did insist on the Union’s agreement to section
17.3. Moreover as the General Counsel and the Union point
out, even as revised, the provision entitled Grinnell to reward
employees of Grinnell’s own choosing in such amounts and
at such times as it, in its sole discretion, decided upon.
But a provision of that nature does not equate to proof of
bad faith. Colorado-Ute Electric Assn., 295 NLRB 607
(1989); Houston County Electric Cooperative, 285 NLRB
1213 (1987); cf. Toledo Blade Co., 295 NLRB 626 (1989).
As for the nature of Grinnell’s bargaining, on the one hand
it is clear that the Company’s representatives at all times
held a fixed intention to include in the new collective-bar-
gaining contract a provision giving Grinnell the unilateral
right to pay bonuses to employees of its own choosing. On
the other hand, Grinnell substantially revised its proposed
bonus program provision in ways that made it less onerous
to the Union. And, as in the case of the performance stand-
ards provisions, Grinnell listened to what the Union had to
say, responded to the Union’s arguments, and did try to con-
vince the Union to accept the provision.
In light of those facts I cannot conclude that Grinnell bar-
gained in bad faith about section 17.3.
V. MERIT PAY
The proposed collective-bargaining agreement that
Grinnell presented at the September 1 bargaining session in-
cluded a provision, section 17.4, that would have entitled it
to pay ‘‘merit wage supplements’’ of between one cent and
25 cents an hour. The provision read:
The Employer may award merit wage supplements in
which not more than one-third of the employees in any
department may participate. The merit supplements
shall not exceed $.25 per hour and shall be based on
supervisory evaluations of employees’ skill, perform-
ance and work record.
On October 11 Grinnell amended its proposal to provide
for merit pay of up to 50 cents an hour, instead of the pre-
vious 25 cents an hour.
The discussions about merit pay were much the same as
about the proposed bonus programs. Grinnell and the Union
1066 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
13 According to Grinnell, employees could grieve over their failure to get
merit pay. But those grievances would be limited to showing that, based on
supervisory evaluations, their performance was higher than employees who
were getting merit pay.
14 In that case, the Board upheld the right of an employer to insist on a pro-
vision that included no constraints at all on the amount of merit awards. (The
provision read: ‘‘The merit increase program will provide employees the op-
portunity of receiving additional increases based on their individual perform-
ance and contribution on the job. The amount and frequency of such merit
increase will be determined by the Division Head and President and will not
be subject to the grievance procedure.’’ (295 NLRB 607, supra.))
15 Thus par. 9 of the complaint also alleges that Grinnell implemented the
new terms ‘‘without having afforded the Union an opportunity to negotiate and
bargain.’’
16 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules
and Regulations, the findings, conclusions, and recommended Order shall, as
talked about section 17.4 at about a half-dozen sessions.
Grinnell unrelentingly insisted on a provision that would give
the Company virtually complete discretion to choose how
many employees were to get merit pay (within the one-third-
of-the-work-force limitation), how much they were to get
(within the 50-cent-per-hour constraint), and the length of the
period in which employees who were awarded merit pay
would continue to receive it. As for which employees would
receive merit awards, that would depend on supervisory rat-
ings which, to some extent, would be subjective. Thus
Grinnell would make merit awards without bargaining with
the Union, and the Union would have only a limited right
to go to arbitration about such awards.13 The Union, on its
part, flatly opposed any sort of merit pay.
Grinnell did back off its position in one respect. As
orignally proposed, Grinnell would have based its merit pay
decisions entirely on ‘‘skill, performance and work record,’’
with ‘‘work record’’ not including the length of time an em-
ployee had been with the Company. When Grinnell agreed
to take seniority into account for matters such as layoffs and
recalls (see part II, above), the Company also agreed to take
it into account when deciding which employees should re-
ceive merit pay.
As with the proposed bonus programs, Grinnell was within
its rights in insisting on a provision that would have given
it the discretion to award merit pay. E.g., Colorado-Ute Elec-
tric Assn., above.14 And there was nothing about the manner
in which Grinnell bargained about section 17.4 that sug-
gested bad faith.
VI. PERFORMANCE STANDARDS, BONUS PLANS, AND
MERIT PAY—CONCLUSION
The provisions at issue would have entitled Grinnell to
unilaterally: (1) adopt performance standards that could form
the basis for employee discipline,—with such standards sub-
ject, however, to a reasonableness criterion and to testing via
the grievance machinery; (2) implement bonus programs; and
(3) implement merit programs providing up to 50 cents per
hour, with selection based on supervisory evaluations. While
provisions of that nature may well be distasteful to the Union
and to the employees, they are not intrinsically union-busting
nor need they stand in the way of an agreement.
There is, however, something special about the case at
hand. That is, those provisions were included in a proposed
agreement that in term after term made changes that ad-
versely affected both the employees’ compensation and con-
ditions of employment and the Union’s status. I will assume,
for present purposes, that a proposed contract provision that
would normally be unobjectionable (so far as the Act is con-
cerned) might be an indication of an employer’s bad faith
when included in a proposed collective-bargaining agreement
as upsetting to the employees and the Union as was
Grinnell’s.
But even taking this consideration into account, I cannot
conclude that the provisions themselves, nor the way
Grinnell bargained about them, evidences bad faith on the
Company’s part. Grinnell, clearly, believed that it was bar-
gaining from a position of strength and could accordingly ob-
tain the Union’s consent to a contract almost entirely to the
Company’s liking. The Act does not require Grinnell to be-
have as though that were not the case. See NLRB v. Amer-
ican National Insurance Co., 343 U.S. at 404; Teamsters
Local 705 (Kankakee-Iroquois), 274 NLRB 1176 (1985),
enfd. sub nom. Kankakee-Iroquois County Employers Assn.
v. NLRB, 825 F.2d 1091 (7th Cir. 1987). And Grinnell’s bar-
gaining about the provisions in question did no more than re-
flect its view about which party, this time around, was in a
position to get what it wanted. Since the terms that Grinnell
wanted were not unlawful, and since Grinnell did not aim at
undermining the status of Local 376 as representative of the
members of the bargaining unit, Grinnell’s bargaining did not
violate the Act.
VII. OTHER MATTERS
Paragraph 9 of the complaint reflects the fact that, as
Grinnell admits and as noted earlier, on October 18 the Com-
pany put into place all of the terms of the contract that, one
day earlier, the members of Local 376 had voted to reject.
If the parties were at an impasse on October 17, then
Grinnell was free to implement most of the provisions of its
proposed collective-bargaining agreement. If they were not
then, of course, Grinnell’s implementation of its proposed
contract terms violated the Act.15
The General Counsel concedes that an impasse did exist
unless the Board concludes that Grinnell refused to bargain
collectively about the proposed provisions covering perform-
ance standards, bonus programs, or merit pay. (See R. Exh.
1 and the discussion at Tr. 5–6.) Since my conclusion is that
Grinnell did not refuse to bargain about those provisions, I
also conclude that Grinnell did not violate the Act when it
implemented the contract terms.
One last matter remains for consideration. Because the
Union did not agree to the collective-bargaining contract that
Grinnell proposed, Local 376 did not waive its rights to bar-
gain about such matters as the payment of bonuses or merit
pay to unit employees. Colorado-Ute, supra at 610. And the
complaint can be read as alleging that Grinnell has unilater-
ally made such payments.
But apart from a brief reference to a ‘‘corporate-wide slo-
gan contest,’’ the record says nothing about whether Grinnell
has in fact made any bonus payments or merit awards to unit
employees (or, if Grinnell did, whether the Company did so
without first bargaining with Local 376). Thus, to whatever
extent the complaint can be read as alleging such unilateral
action, I find that the evidence does not support the allega-
tion.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended16
1067GRINNELL CORP.
provided in Sec. 102.48 of the Rules, be adopted by the Board and all objec-
tions to them shall be deemed waived for all purposes.
ORDER
The complaint is dismissed.