Handy Andy Associates, Inc.

National Labor Relations Board - Board Decisions

Oct 31, 1985

277 N.L.R.B. 208 (N.L.R.B. 1985)

208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Handy Andy Associates , Inc. and Chauffeurs, Team-
sters and Helpers Union Local No. 150 , Inter-
national Brotherhood of Teamsters , Chauffeurs,
Warehousemen & Helpers of America. Case 20-
CA-18324
31 October 1985
DECISION AND ORDER
By CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
On 18 April 1985 Administrative Law Judge
James S. Jenson issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed cross-exceptions
and a brief supporting its exceptions and answering
the General Counsel's exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Handy
Andy Associates, Inc., Sacramento, California, its
officers, agents, successors, and assigns, shall take
the action set forth in the Order.
I The Respondent has excepted to some of the judge's credibility find-
ings . The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect. Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir 1951).
We have carefully examined the record and find no basis for reversing
the findings
Jonathan J. Seagle, for the General Counsel.
Robert L. Rediger (Jacinto & Hubbert), of Sacramento,
California, for the Respondent.
DECISION
STATEMENT OF THE CASE
JAMES S. JENSON, Administrative Law Judge. This
matter was heard in Sacramento, California, on July 10
and 11 and September 11 and 12, 1984, pursuant to a
charge and amended charge filed on August 25 and Sep-
tember 8, 1983, respectively, and a complaint and amend-
ed complaint issued on October 31, 1983, and June 19,
1984, respectively. The complaint, as amended , alleges
that agents of the Respondent engaged in a variety of
8(a)(1), (3), and (5) conduct. The Respondent denies it
engaged in any unlawful conduct. All parties were given
full opportunity to appear, to introduce evidence; to ex-
amine and cross-examine witnesses, to argue orally, and
to file briefs. Briefs were received from both the General
Counsel and the Respondent and have been carefully
considered.
On the entire record in the case, and from my observa-
tion of the witnesses and their demeanor, I make the fol-
lowing
FINDINGS OF FACT
1. JURISDICTION
It is admitted and found that at all times material
herein, the Respondent was engaged in the operation of
retail appliance stores and a related warehouse and deliv-
ery service in Sacramento, California; that during the
past 12 months its gross revenues exceeded $500,000 and
it purchased and received products and goods valued in
excess of $5000 from sources outside California; and that
it is an employer engaged in commerce within the mean-
ing of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted and found that Chauffeurs, Teamsters
and Helpers Union Local No. 150, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen & Help-
ers of America is a labor organization within the mean-
ing of Section 2(5) of the Act.
III. ISSUES
Chronologically listed below, the amended complaint
alleges in substance:
1. That the Respondent has recognized the Union as
the collective-bargaining representative of its truckdriv-
ers, helpers, and warehousemen, a unit appropriate for
collective-bargaining purposes, which recognition has
been embodied in successive collective-bargaining agree-
ments, the most recent of which was effective from
April 1, 1981 to April 1, 1983.1
2. That Gary Fracolli and Ray Rabeneck are the Re-
spondent's agents and supervisors.?
3. That on March 22, 1983, the Union requested the
Respondent to furnish information regarding its intention
to contract out all of the unit work, which the Respond-
ent has failed and refused to do.
4. That about April 15, 1983, Fracolli:
(a) Told employees they could keep their jobs only if
they resigned from the Union.
(b) Threatened employees that the Respondent would
cease its warehouse operations and discharge them unless
they agreed to accept the Respondent's contract propos-
al.
(c) Interrogated employees regarding the Union.
5. That about April 18, 1983, Fracolli and Rabeneck:
(a) Interrogated employees regarding the Union.
(b) Told employees the Respondent would engage in
sham negotiations with the Union.
I Admitted by the Respondent
2 Admitted by the Respondent
277 NLRB No. 29
HANDY ANDY ASSOCIATES
(c) 'Told employees the Respondent would never sign
a new contract with the Union.
(d) Threatened to cease the Respondent 's warehouse
operations and discharge its employees unless they re-
signed from the Union.
(e) Promised employees fair treatment if they resigned
from the Union.
6. That Rabeneck interrogated employees regarding
the Union on several unknown dates in May 1983.
7. That about May 7, Rabeneck:
(a) 'Told employees the Respondent would contract
out its warehouse operation if the Union did not totally
accept the Respondent's proposals.
(b) Advised employees to seek employment elsewhere
if the Union did not totally accept the Respondent's pro-
posals.
8. That about May 28, 1983, the Respondent caused
the termination of employee J im Robbins because of his
union interest and to discourage employees from engag-
ing in protected activity, in violation of Section 8(a)(3).
9. That by certain of the conduct listed in paragraphs
4, 5, and 7 above, the Respondent bypassed the Union
and dealt directly with its employees in violation of Sec-
tion 8(a)(5).
10. That by the conduct listed in paragraphs 3, 4, 5, 6,
and 7 above, Respondent has refused to bargain in good
faith with the Union in violation of Section 8(a)(5).
11. That about August 6, 1983, the Respondent dis-
charged its six unit employees and contracted out its
warehouse and delivery operations in violation of Sec-
tion 8(a)(3).
The General Counsel seeks an order to reinstitute the
Respondent's warehouse and delivery operations, to
make whole all employees affected by its subcontracting
out of the warehouse and delivery operations, and to
bargain in good faith with the Union.
The Respondent contends the decision to subcontract
its warehouse and delivery operations was made on the
basis of legitimate business considerations and prior to
any of the occurrences alleged to constitute violations of
the. Act; and that the credible evidence does not support
the General Counsel's contention that the Section 7
rights of employees were violated, that Jim Robbins was
constructively discharged, or that it violated Section
8(a)(5) in any manner.
Thus, the principal issues to be resolved are:
1. Whether the Respondent' s agents interfered with,
restrained, or coerced employees in the exercise of their
Section 7 rights as alleged in paragraphs 4, 5, 6, and 7
above.
2. Whether the Respondent unlawfully caused the ter-
mination of Jim Robbins.
21. Whether the Respondent unlawfully bypassed the
Union and dealt directly with its employees.
4. Whether the Respondent unlawfully refused to fur-
nish information concerning subcontracting to the Union.
5. Whether the Respondent unlawfully subcontracted
the warehouse and delivery operations.
6. Whether the Respondent failed to bargain in good
faith with the Union.
7. Whether the Respondent should be ordered to re-
store its warehouse and delivery operations.
209
Credibility is a material issue , each of the parties con-
tending its witnesses were the more credible . Indeed,
there was considerable testimonial conflict, principally
with respect to the statements attributed to Fracolli and
Rabeneck which are alleged as violations of employees'
Section 7 rights. There is also some conflict concerning
negotiations . In deciding which of the conflicting ver-
sions of events is more credible, I have given consider-
ation to the demeanor of the witnesses while they were
on the stand , their ability to recall past events and
whether it was necessary to elicit facts through sugges-
tive or leading questions , the positions occupied by the
witnesses at the times relevant to the issues in the case
and their possible interest in the outcome , the inherent
probabilities in the accounts which they gave, and the
weight of the evidence. I have also considered the fact
the Respondent and the Union have had an amicable re-
lationship throughout their years of dealing with each
other . For reasons which will appear hereafter, I am
convinced the testimony of the witnesses for each of the
parties was credible in some respects and not credible in
other respects . While I credit a witness in some, but not
in all, respects , I do so upon the evidentiary rule that it
is not uncommon "to believe some and not all" of the
witness' testimony . NLRB v. Universal Camera Corp., 179
F.2d 749, 754 (2d Cir. 1950).
IV. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Setting
The Respondent is engaged in the operation of six
retail appliance stores. This proceeding involves the sub-
contracting out of the work performed at the warehouse
and delivery service facility located on Roseville Road in
the Sacramento , California area . At all times material
herein , the Respondent has recognized the Union as the
representative of its warehouse and delivery employees-
truckdrivers , helpers, and warehousemen-working in
and out of the Roseville Road facility . Collective-bar-
gaining agreements covering those employees have been
in existence for the last 10 or 12 years , the most recent of
which was effective from April 1, 1981, to April 1, 1983.
For an undisclosed number of years, the collective-bar-
gaining agreement has contained the following provision:
SECTION 22. SUBCONTRACTING
The Employer may, sixty (60) days prior, notify
the Union of his desire to subcontract out work
covered by this Agreement . In the event the parties
hereto are unable to agree on the severance of em-
ployees whose work has been contracted out, their
dispute shall be subject to the Grievance Procedure
in Section 24 hereof . In the event the dispute goes
to arbitration , the Employer agrees not to contract
out said work until an arbitrator 's award is re-
ceived.
Section 24 of the agreement covers a grievance proce-
dure and provides that disputes concerning the meaning
and/or interpretation of the agreement shall be submitted
to a board of adjustment and, upon its failure to agree, to
210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
an arbitrator who shall hold a hearing and issue a written
decision. It further provides:
The arbitrator shall have no power to add to, sub-
tract from, or otherwise change or modify this
Agreement. The arbitrator's sole province shall be
to determine the meaning of the specific language
of this Agreement. Such decision will be binding
upon all parties when notified... . Pending the de-
cision of any question referred to the Board, work
shall be continued in accordance with the provi-
sions of this contract.
The record shows that Gary Fracolli became the Re-
spondent's general manager in the fall of 1981, at a time
when the Company was experiencing economic prob-
lems, having lost money in 4 of the last 5 years Fracolli
determined that overhead was high, sales were not what
they should be, and morale was low. Accordingly, he
held a meeting with all employees, including warehouse
and delivery employees, wherein he told them that the
Company was not doing well and that he was going to
reorganize it-"turn the Company around" and make it
more efficient and profitable. The accounting department
was reduced by six to eight people, and steps were taken
to correct some of the problems in the warehouse and
delivery operations, which included late deliveries, em-
ployee morale, consumption of alcoholic beverages, in-
ventory shrinkage due to pilfering, and low productivity.
Certain policies were reaffirmed and reestablished in late
December 1981 covering consumption of alcoholic bev-
erages (G.C. Exh. 13), warehouse security (G.C. Exh.
14), and holidays (G.C. Exh. 15). In late March 1982, the
board of directors directed a study be made by Rabeneck
and Financial Secretary Saxton on ways to reduce ware-
house and delivery costs. Accordingly, Rabeneck started
exploring alternatives which would result in lower costs,
and on April 12, 1982, received a proposal from Capital
Delivery Systems to assume the "Home Delivery and
Shuttle Operations emanating from your Sacramento
warehouse." The Union was informed of the fact that
warehouse and delivery costs were too high, and on
April 22, 1982, Fracolli and Rabeneck met with Union
Business Representative Jim Dyer, explained the prob-
lems, and asked for economic relief. Several suggestions
were made and Dyer stated he would talk to the em-
ployees to see if they had any suggestions. Representa-
tives of the Respondent and the Union met again on
April 30, 1982, at which time Dyer made three sugges-
tions: (1) the Respondent institute a 32-hour workweek;
(2) work in excess of 8 hours be paid at straight time;
and (3) employees perform maintenance and cleaning
work when there was not enough warehouse and deliv-
ery work to keep them busy. The Respondent felt the
32-hour workweek was not feasible; that no overtime
was worked and the Union's proposal to forgo overtime
pay was probably illegal; and that the employees re-
ceived too high a wage to be used for maintenance and
cleanup work. The parties met again on May 17, 1982, at
which time the Respondent asked that the Union consid-
er rescinding the contractual wage increase that had
become effective April 1, 1982, rescind the "floating"
holidays, and reduce call-in pay from 8 to 4 hours. Dyer
agreed to take this proposal back to the men. At a May
28, 1982 board of directors meeting, Rabeneck reported
"that he was working to keep warehouse expenses as
low as possible and was looking for additional ways to
reduce costs including alternate delivery methods and
charges" to customers for deliveries. Union and compa-
ny representatives met again on June 7 and 10, 1982,
with no solution reached.
On August 16, 1982, Rabeneck reported to the board
of directors the results of the "in depth study of costs"
of the warehouse and delivery operations which he and
Saxton had prepared. The study compared the Respond-
ent's costs with two alternate proposals from Capital De-
livery, and disclosed that the delivery operations could
be performed by an independent company at about one-
half what it was costing the Respondent under the
present system.
B. Decision to Subcontract
At its January 4, 19833 meeting , the Respondent's
board of directors decided that "all work now done by
Warehouse and Delivery personnel will be subcontracted
and notice will be sent to the Teamsters according to
Section 22 of the Collective Bargaining Agreement."
Thereafter, Rabeneck contacted Elite Trucking and War-
ehousing Systems, and was contacted by Almas Truck-
ing Company, regarding subcontracting. Although
Almas failed to submit a proposal, Elite submitted a pro-
posal dated March 7.
By letter dated February 22, Sunny Lee, the Respond-
ent's attorney, advised the Union's secretary-treasurer as
follows:
Dear Mr. Bonilla:
You are hereby advised on behalf of Handy Andy
Associates, Inc., in accordance with Section 22 of
said company's Collective Bargaining Agreement
with your Union, that said company intends to con-
tract out the delivery and warehouse work current-
ly being performed at the warehouse located at
4320 Roseville Road, North Highlands, Calif.
It is the company's intention to contract this work
out as of April 23, 1983, therefore it is our desire to
meet with you or your representative as soon as
possible in order that this matter may be finalized
by that date. I will call your office on February 25,
1983 to arrange for a meeting on the severance
issue.
On March 2, the first of a series of meetings was held
between the Respondent's and the Union's representa-
tives. While the Respondent sought to discuss the sever-
ance terms of the affected warehouse and delivery em-
ployees, Dyer declined to discuss severance, insisting in-
stead on negotiating a new agreement which would
eliminate the right to subcontract. Lee informed Dyer
that if the Union refused to discuss severance, the Re-
spondent would submit the issue to a board of adjust-
ment and file a lawsuit to compel arbitration. Dyer asked
8 All dates hereafter are in 1983 unless otherwise stated.
HANDY ANDY ASSOCIATES
for the name of the company to whom the Respondent
was going to subcontract, and was informed that no de-
cision had been made.
On March 3, Fracolli informed the warehouse and de-
livery employees of the decision to subcontract the ware-
house and delivery operations. By letter dated March 4
to Dyer, Lee requested a board of adjustment be con-
vened pursuant to sections 22 and 24 of the collective-
bargaining agreement to resolve the issue of severance.
The parties met again on March 7. Lee, Fracolli and
Rabeneck were present for the Respondent The Union
was represented by Dyer and Lee Ishmel, with unit em-
ployees Larry Lavagnino and Bill Atkins also present.
Lee took the position that the meeting was only to dis-
cuss severance as that term is used in section 22 of the
contract Dyer responded that the Union's attorney had
advised him not to negotiate severance, and that he'
wanted to negotiate a new contract which would prohib-
it subcontracting. Lee declined to negotiate a new con-
tract at that point because the Respondent would not
employ any unit employees after the unit work was sub-
contracted.4
On March 14, the Union filed a charge in Case 20-
CA-17786 alleging that the Respondent had refused to
bargain over the terms of a new collective-bargaining
agreement. On the following day, March 15, Lee wrote
Dyer "demanding" that the Union proceed to arbitration
over the issue of severance. Pursuant to a petition filed
by the Respondent in the superior court, on March 15 an
"Order to Show Cause" was issued ordering the Union
to show cause why the court should not issue an order
compelling it to submit the outstanding dispute over sev-
erance to the arbitrator.5
On March 22, Dyer wrote Lee outlining a number of
issues which he felt would "have to be discussed and re-
lined prior to submission of the case to a Board of Arbi-
tration." He concluded with the suggestion that they
meet to arrange the format of negotiating a new contract
"while every attempt is made to solve the problems of
subcontracting bargaining unit work." On March 31, the
Union's attorney wrote Lee requesting:
[A]ll information and copies of all documents relat-
ing to this subcontracting dispute, including but not
limited to the following:
1) The name, address and telephone number of
the company to which Handy Andy intends to sub-
contract the work;
2) All documents, or other information, evidenc-
ing or relating to the subcontracting agreement, if
4 I do not credit Dyer's testimony, elicited in response to a leading
question, that he presented the Respondent with a written contract pro-
posal on March 7 (G C Exh 4) The testimony and notes taken during
negotiations by both Lee and Fracolli clearly establish that the Union's
first written proposal was presented during the April 13 meeting Fur-
ther, the suggestion he made to Lee in his March 22 letter (G C. Exh 5)
"that we meet to arrange the format of negotiating the agreement while
every attempt is made to solve the problems of subcontracting bargaining
unit work," presupposes negotiations on a new contract had not yet
begun
s On May 18, the court granted the Respondent's "Motion to Compel
Arbitration" and ordered that the matter be submitted to Arbitrator John
Kagel on June 2
211
any, including the agreement itself or any docu-
ments evidencing the specific terms of any agree-
ment to subcontract bargaining unit work;
3) All documents or other information related to
or evidencing the subcontractor's plans for the
work to be subcontracted, and for the employees,
inventory, and business of Handy Andy,
4) All information known to or in the possession
of Handy Andy regarding the subcontractor and its
employees, if any, and;
5) A breakdown, by employee, of all pay and
benefits owed to each employee in the unit, includ-
ing:
a. Wages;
b. Unused sick leave;
c. Unused vacation and holiday benefits;
d. Pension payments;
e. Health and Welfare payments; and
f. All other benefits not paid.
While the information requested in item 5 above was fur-
nished by the Respondent,6 the information requested in
items 1 through 4 was not since the Respondent had not
yet entered into a subcontracting agreement or selected a
subcontractor.
C. Negotiations Pending Arbitrator's Decision
On April 5, the Union and the Respondent entered
into the following agreement:
1. The Union hereby agrees to withdraw the re-
fusal to bargain charge.
2. The Union and the Company hereby agree to
meet and bargain over the terms and conditions of a
new contract up until the time an arbitrator renders
a decision on the severance of employees pursuant
to Section 22 of the Collective Bargaining Agree-
ment in effect at the time the Employer sent the
February 23, 1983, Notice to the Union of its deci-
sion to subcontract the warehouse work.
3. If no new agreement is reached at the time the
Arbitration Decision is rendered, the Employer's
duty to bargain with the Union ceases.
Withdrawal of the unfair labor practice charge was ap-
proved by the Regional Director on April 21.
Pursuant to the April 5 agreement, the Respondent
and Union met on April 13. While Dyer testified that he
presented the Respondent with a "revised proposal," the
purported "revised proposal" was not produced at the
hearing. Rather, the credited evidence shows that the
Union's initial contract (G.C. Exh. 4) was presented and
discussed on this date.7 In effect, the Union proposed
certain cost item increases and a provision prohibiting
subcontracting, all of which the Respondent opposed
The Respondent also made several proposals, but no
agreements were reached.
s R Exh 11
See fn 4
212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
About April 15, Fracolli went to the Roseville Road
warehouse because, according to Fracolli, he wanted to
find out if there was any excess warehouse space avail-
able for leasing to the company that eventually would
take over the warehouse and delivery work.
The General Counsel contends he went there for the
purpose of committing the unfair labor practices alleged
in paragraph 10 of the amended complaint. There is con-
siderable` testimonial conflict between the Fracolli and
Andrews versions of what transpired. Fracolli testified
that he called the warehouse before going to be sure An-
drews would be there. Andrews denied he knew Fracolli
was coming prior to his arrival. According to Andrews,
Fracolli walked in, said hello, and walked to the other
side of the warehouse; then Andrews drove his forklift
over to,Fracolli:
and I asked him if he needed any help and he said
no. Then he asked me if we were alone. And I said
yes. . . . He made a statement why-he couldn't
understand why the men couldn't get out of the
union to keep their jobs.
I said, well, they were afraid of Ray Rabaneck
[sic] and that they didn't want to lose the union
benefits. He said that he still couldn't understand
why they didn't want to get out of the union to
keep their jobs. And he made reference to how
good the company was doing and how everything
was going and that he just couldn't understand why
they couldn't get out of the union to keep their
jobs.
He said you only have three choices. "You either
stay in the union and take the contract they give
you which won't mean anything. Or you'll get out
of the union and keep your job. Or we'll sublease
and you won't have a job."
And I told him that it didn't matter to me, that I
would get out to keep my job but I didn't think the
rest of the men would. And he said that he still
couldn't understand them jeopardizing their future.
And I asked him if I could tell the men what he
had said, and he said "Well, you'll have to change
the story because I'll swear that I never had this
conversation with you." And at that, he left.
Andrews testified that Fracolli mentioned each of the
other employees by name and wondered what they
would do.
Fracolli denied he asked Andrews if they were alone
in the warehouse since he knew they were; and he spe-
cifically denied the other statements attributed to him by
Andrews, including Andrews' assertion that Fracolli
stated he would deny having had such a conversation.
He testified that Andrews told him that he had called
Rabeneck concerning decertification and Rabeneck had
stated he could not discuss it with him but gave him a
phone number or address to obtain information;" that
s Andrews placed this conversation with Rabeneck as several weeks
later Rabeneck recalled the conversation but not the month it occurred
Andrews felt the men should decertify and expressed un-
derstanding when Fracolli responded he could not dis-
cuss that subject; that Andrews was angry about losing
his job but that the Union and other employees apparent-
ly did not take the subcontracting issue seriously because
"they think that it's a ploy just to negotiate a better con-
tract"; that Andrews thought the Company was serious
and intended to subcontract, and proceeded to list the
shortcomings of his fellow workers which he felt was
the reason the Respondent was going to subcontract;
that Andrews felt the Union had not done them any
good and the men should decertify and get out of the
Union. Fracolli went on to testify as follows:
[H]e was upset because he felt he was going to be
losing his job, that he had worked hard for this job,
and he says, "If we don't sign this new contract,
you're going to subcontract the warehouse and de-
livery work, is that right?"
And I said, "Yes, that is true."
And that was, you know, our intent, and that's
what we had told the union all the time, that was
what was on the table, is that you know, because
during this time we were in negotiations of a con-
tract, and we said, "If you don't sign this contract,
this is a proposal and we're talking about it, we're
going to subcontract the warehouse and delivery
operation." And that was our intent to do it.
So, he restated that to me and I said, "Yes, that's
correct." And he says, "Well, then we can either
subcontract-we can either sign this contract, or
you're going to subcontract, and the other only
choice we've got is they can vote the union out and
we can see what happens from there."
My response was, "That's about the way it
seems, Bob."
Bob was very vocal that day and he was very
upset, and the only thing that I told Bob Andrews
that day is that I would not discuss with anyone
else the conversation that we had.
Fracolli also testified he told Andrews that he won-
dered what the older workers would do when the Com-
pany subcontracted.
Although I am not convinced that either Andrews' or
Fracolli's testimony is totally accurate, I believe that An-
drews' is the more accurate. I do not credit Fracolli's
testimony that Andrews made the statement that the em-
ployees were confronted with three options: (1) subcon-
tracting, (2) "sign this contract," or (3) "vote the union
out and we can see what happens from there." Instead, I
credit Andrews' testimony that Fracolli stated the Com-
pany was doing wells and he could not understand why
9 Although the Respondent established that its warehouse and delivery
costs were "excessive," the record also indicates that its overall oper-
ations were doing well. See R. Exhs 20, 22, and'24, minutes of board of
directors' meetings wherein the officers were voted bonuses.
HANDY ANDY ASSOCIATES
the men could not get out of the Union to keep their
jobs ; 10 and that the employees had three choices: (1)
"stay in the union and take the contract they give you
which won't mean anything," (2) get out of the union
and keep your job, or (3) the Company will subcontract
the unit work and the men will be out of a job . In this
regard, it is noted that on April 15, the Respondent had
not yet given the Union a contract proposal . Therefore,
Andrews would not have known about it nor stated that
an option was to accept the Respondent 's bargaining
proposal as Fracolli seems to suggest . On the other hand,
it is more likely that Fracollli , the Respondent 's president
and general manager, was aware of the proposal the Re-
spondent intended to present to the Union on April 18
and made reference to it as one which "won't mean any-
thing," as Andrews testified , because it would contain a
subcontracting clause which the Respondent would exer-
cise even if a collective -bargaining agreement was
reached in the interim . This is the position the Respond-
ent took with the Union after it made its first contract
proposal on April 18.11 Further , I do not believe, as Fra-
colli testified , that Andrews brought up the subject of
decertification . According to Andrews , whom I credit,
his first knowledge of decertification came from Raben-
eck several weeks later in response to his own query as
to how to get out of the Union , the seed for which ques-
tion was obviously planted by Fracolli on April 15. I am
further convinced that Andrews ' critical remarks regard-
ing his fellow employees were made on April 18 and not
on April 15 as Fracolli testified . In sum , I find Andrews
to be the more credible of the two witnesses . According-
ly, it is found that by telling Andrews the employees had
the choice of getting out of the Union and keeping their
jobs or else the Company would subcontract and they
would be out of jobs, the Respondent engaged in the un-
lawful conduct alleged in paragraphs 10(a) and (b) of the
amended complaint , thereby violating Section 8(a)(1) of
the Act.
The next bargaining session on April 18 was apparent-
ly attended by several unit employees , including An-
drews, who were concerned about what was going on in
negotiations . Lee informed them the Respondent had
given the Union notice that it was going to subcontract;
that the Respondent had gone to court to compel arbitra-
tion on the severance issue ; that although the contract
expired on April 1, the Respondent had agreed to contin-
ue the contract and negotiate until the arbitrator issued a
decision , which was expected in June ; and that negotia-
tions and the severance issue were two separate things.
The Respondent presented the Union with a written pro-
posal, General Counsel 's Exhibit 7, which the parties
proceeded to discuss . At the conclusion of the meeting,
Fracolli and Rabeneck asked Andrews if he wanted to
go for a beer . Andrews, who had already arranged to
meet Robbins in a nearby pizza parlor, replied in the af-
10 Considered in context , this remark was clearly an inquiry that called
for, and obtained , a response, and constituted unlawful interrogation as
alleged in par 10(c) of the amended complaint Asociacion Hospital del
Maestro, 272 NLRB 853 ( 1984).
11 The April 18 contract proposal continued the sec. 22 right to sub-
contract
213
firmative, so the three went to the pizza parlor and
joined Robbins, who was already drinking beer.
Again, the testimony of the General Counsel's and the
Respondent's witnesses is conflicting. Andrews testified
that Rabeneck asked what he thought about the negotia-
tions 12 and he responded he did not think an agreement
would be reached;13 that Fracolli asked if he thought
the men would "get out of the Union," and he replied
they would not because they were afraid of Rabeneck
and they wanted to keep their union benefits; 14 that Fra-
colli stated he could not understand why the men would
take a chance of losing their jobs;'S that the two em-
ployees stated they would "get out of the Union" and
work for $10 an hour, but did not think the other em-
ployees would; that Fracolli apparently criticized him for
being unable to persuade the other employees to get out
of the Union in order to keep their jabs;16 that Fracolli
said, "Can't you see that there won't be a contract? We'll
never agree to a contract. We'll wait for the arbitrator.
And then we'll just sublease it out" and "if the men
would get out that there wouldn't be a fire list or a hit
list . . . that nobody would be fired, that everybody
would be the same";17 that Andrews responded there
was not much he could do to change the other employ-
ees' minds; and that Fracolli said that if the men would
not get out of the Union "he would sublease and he
wouldn't back down"; and "he would drag it out, that
they would just keep changing the proposals. They
would never agree on a contract. They would just wait.
Everytime the union would come in and accept some-
thing, they would turn around and change it."13 On
cross-examination, Andrews admitted that he made dis-
paraging remarks about the work habits of the other em-
ployees because he felt that they needed to be repri-
manded or removed if they weren't doing the proper
job; that they were "taking too long on deliveries" and
"were abusing the time"; that they were lazy and indif-
ferent; that their interest was not with the Company; and
that they would never change, and "you can fire them
all."19 According to Andrews, Rabeneck called him sev-
eral times after that and asked "if the boys had changed
their minds yet. If they were going to get out," to which
he responded in the negative.20
The record makes it clear that Rabeneck asked An-
drews and Robbins what they thought of the negotia-
tions which had taken place earlier that evening, and
that the Respondent's agents looked upon those two as
employees with whom they could carry on a confidential
12 Rabeneck admitted asking this question
12 Rabeneck testified Andrews responded that Dyer would not allow
any of the other employees to attend the meeting which was definitely
different from the information he had been getting.
14 Denied by Fracolli and Rabeneck.
11 Both Fracolli and Robbins denied the statement.
16 Denied by Fracolli.
17 Denied by Fracolli and Rabeneck.
1s The foregoing was corroborated in substantial part by Robbins, but
denied by Fracolli and Rabeneck.
19 Robbins did not recall who made the derogatory remarks about the
other employees, but corroborated Andrews' testimony in substantial
part
20 Rabeneck denied asking Andrews or anyone else if the employees
had changed their minds about getting out of the Union.
214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
conversation. Andrews impressed me as a witness intent
on giving accurate testimony, and I do not believe he
fabricated this conversation which reiterated and expand-
ed on the themes Fracolli had expressed 3 days earlier in
the warehouse. The Respondent' s argument that it had
nothing to gain by making the statements attributed to it
by Andrews and Robbins because it had already made a
definitive decision in January to subcontract on the basis
of cost, efficiency, and versatility is convincing. Thus, al-
though I am convinced that Fracolli and Rabeneck made
the statements attributed to them, I am convinced by the
overall evidence that the Respondent did not use dilato-
ry tactics or engage in sham bargaining as alleged. Ac-
cordingly, I find that the General Counsel has proven
the 8(a)(1) allegations contained in paragraph 11 of the
amended complaint. I also credit Andrews' testimony
that Rabeneck called him several times later and ques-
tioned him as to whether the men were going to get out
of the Union as alleged in paragraph 12.
The next bargaining session was on April 25, for
which the Union had prepared a document21 summariz-
ing the parties' positions on each bargaining issue. The
parties reviewed and discussed the issues and reached
agreement on some. According to Dyer, he asked Re-
spondent's representatives "if they had any information
at this point . . . on how [sic] they were going to sub-
contract the work to, And they stated that it was only
two or three companies that they were talking to but
nothing specific. . . . I asked as to what the proposal
was, the cost of their subcontractor's proposal, so that
we could be competitive in our proposal." According to
Dyer, he received no response.
On an undisclosed date in May, Fracolli and Rabeneck
met Andrews and Robbins in a pizza parlor in Carmi-
chael, California. Sometime following the March 3
notice to employees of the Respondent's intent to sub-
contract, Andrews had informed Fracolli and Rabeneck
that he and Robbins would like to become the subcon-
tractors. Andrews was informed that they would be con-
sidered and that the request would have to be submitted
in writing. By letter dated May 7, the request was re-
duced to writing.22 The pizza parlor meeting was in re-
sponse to that letter, and was initiated by Fracolli. The
two employees were informed that they had been elimi-
nated from consideration as subcontractors for the ware-
house and delivery operations for several reasons, includ-
ing the fact they did not have the managerial expertise,
equipment, or financing to start such a business.23 Ac-
cording to Andrews, Fracolli stated that the Respondent
was going to go through with the arbitration and sub-
contract the work; that none of the employees would be
hired by the subcontractor; 24 and that if the men were
willing to give up their benefits he could not understand
why they would not get out of the Union.2 s
21 R Exh 47, which was used as a guide throughout the rest of the
negotiations
22 R Exh 9
2a Admitted in substantial part by Andrews on cross-examination
za Corroborated in substantial part by Robbins. It is noted, however,
that a subcontractor had not yet been selected
25 Denied by Fracolli and Rabeneck
The parties engaged in lengthy negotiations on both
May 16 and 26. Discussions were had on a variety of
items and agreement made on a few. The Respondent
continued to push for financial relief, better productivity,
and a subcontracting clause, which the Union opposed.
Sometime in the middle of May, Robbins told Raben-
eck that he was considering another job offer and asked
whether he should take it. According to Robbins, Raben-
eck told him "that if the union didn't take the company's
proposal that they were just going to sublease and .. .
he'd take the other offer."26 Rabeneck testified he stated,
"Well, Jim, we're going to subcontract and if I was you,
in your position, being a family person, I would take it."
It was under these circumstances that Robbins quit his
job with the Respondent and accepted employment else-
where.
Although Dyer testified the next bargaining session
took place on June 9, the record shows that it occurred
on May 31 and that the parties again discussed the issue
of severance and terms and conditions of employment
for inclusion in a successor collective- bargaining agree-
ment . With respect to subcontracting, the parties also
discussed severance pay, retention of seniority in the
event the Respondent discontinued subcontracting,
health and welfare, and the length of time the employees
would continue working. On June 1, the parties met
again and the Union advised the Respondent that it was
not willing to accept the Respondent's severance propos-
al and that the arbitration should proceed as scheduled.
On June 2, the severance issue was presented to Arbitra-
tor John Kagel.
On June 9, the parties met again to negotiate over the
terms and conditions of a successor collective-bargaining
agreement, at which time the Respondent submitted a re-
vised proposal. The Respondent again proposed the in-
clusion of a subcontracting clause, which the Union re-
jected. Dyer also produced a Dun and Bradstreet report
showing the Respondent was losing money.
The next meeting to negotiate over the terms of a suc-
cessor agreement was on June 27. During the meeting
Dyer presented the Respondent with a revised proposal
containing, inter alia, two options with respect to wages,
health and welfare, pensions, and subcontracting.27 The
proposals were explained and discussed, Dyer purported-
ly stating that it was not the Union's final proposal but
that it had gone about as far as it could without knowing
who the subcontractor was going to be and what it
would cost. The Respondent's witnesses admit that Dyer
asked for the name of the subcontractor, which had not
yet been selected, but deny he ever requested any cost
information on the ground the Union wanted to be com-
petitive with the subcontractor. On the same day, Lee
wrote Dyer the following letter:
Re: Re-Cap of Negotiations, June 27, 1983
(Revised Employer Proposal of June 9, 1983)
Dear Jim:
25 Corroborated by Andrews
27 G.C Exh 10
HANDY ANDY ASSOCIATES
I apologize for the rather short meeting today and
any surrounding confusion of the company 's posi-
tion in regard to your proposal to us and our pro-
posal of June 9, 1983. Please be advised that I think
we have the following issues still open:
TERM OF AGREEMENT: We're at one year;
you're at two years . Term is still open. Shouldn't be
a problem.
WAGES: Our 6/9/8 3 proposal , (g) is still open
and based on a one-year term . We would not pro-
pose any increase or any decrease in wages. In re-
viewing your Plan A on wages, of course, the com-
pany was in agreement on your proposed decrease,
however , we have not proposed a decrease, nor do
we propose one now. You explained that it was
either option A or B on a total package. The wages
issue is still open.
HOLIDAYS: We are still proposing to eliminate
the two holidays during the life of this agreement to
be consistent with the office . The proposal on
changing time and one-half to straight time is still
on the table.
VACATIONS: We accepted your proposal.
SENIORITY : We are considering accepting your
two-seniority list proposal with your language and
our language at the top of page 2 of our 6/9/83
proposal . Further discussion may be necessary.
SICK LEA VE: We will drop our proposal on the
reduced bank . Further clarification may be neces-
sary on 12(e), as evidenced by the discussion as to
meaning between you and Ray.
HEALTH & WELFARE AND PENSION: Our
position on Health & Welfare and Pension is con-
sistent with the overall operation and will be as pro-
posed on the 6/9/83 proposal.
SUBCONTRACTING: Our position on subcon-
tracting will be as proposed on 6/9/83.
LETTER OF UNDERSTANDING: As proposed
6/9/83.
I think you will agree that the Employer has made
substantial movement on the open issues of Vaca-
tion and Seniority.
If you feel it is appropriate to have another meet-
ing, we will do so.
Dyer claimed another bargaining session took place
about a week later, at which time Lee stated the Re-
spondent would not accept either the Union's plan A or
plan B, and that the Company intended to subcontract
the unit work. The Respondent's witnesses did not recall
any bargaining meetings subsequent to June 27, nor were
any minutes of such a meeting produced. I conclude
Dyer was mistaken and that June 27 was the last negotia-
tion meeting.
D. The Arbitration
Pursuant to the Respondent's petition and the superior
court's May 18 order, the matter of severance was heard
by Arbitrator John Kagel on June 2. The issue presented
to the arbitrator was "[w]hat should be the severance
215
terms, if any, for the Employees of Handy Andy Associ-
ates affected by subcontracting." The arbitrator's "Opin-
ion and Decision" states that the parties stipulated, inter
alia, that the Respondent had the right under the con-
tract to subcontract out the warehouse and delivery op-
erations; that Robbins had taken another job and quit ef-
fective May 18; that the Respondent had not yet subcon-
tracted the work but intended to "although that may not
come to pass," but if it did, it would no longer employ
anyone in the bargaining unit; and that "[t]he decision in
this case will be binding with respect to any severance as
the result of subcontracting noticed on February 22 even
though the Agreement . . . has expired." On July 26,
Arbitrator Kagel issued his Opinion and Decision,28
awarding the employees, excluding Robbins, 13 weeks of
straight time pay and health and welfare benefits cover-
age for each employee and his dependents.
On July 22, the Respondent received a second propos-
al from Elite Trucking and Warehousing Systems, the
first having been dated March 7. On August 3, the Re-
spondent signed a "Warehouse and Delivery Agree-
ment," effective August 9, with Car-del, Inc., d/b/a
AABCO, Inc. covering all warehouse and delivery
work. On August 8, Andrews, the last of the Respond-
ent's warehouse and delivery employees, was terminated.
E. The Refusal to Bargain
Paragraphs 14, 15, and 16 of the amended complaint
allege that since March 22 the Union has requested that
the Respondent furnish information regarding its inten-
tion to subcontract out the unit work, which information
is necessary to the performance of its function as the bar-
gaining representative of the unit employees, and that
since March 25 the Respondent has failed and refused to
furnish the information. As previously noted, on March
31 the Union's attorney, in writing, requested "all infor-
mation and copies of all documents relating to this sub-
contracting dispute, including, but not limited to" the
name of the company to whom the work was to be sub-
contracted, the subcontracting agreement, the subcon-
tractor's plans for the work, and all information regard-
ing the subcontractor and its employees. Up to this point,
the Respondent had received an April 12, 1982 proposal
from Capital Delivery Service and a March 7, 1983 pro-
posal from Elite Trucking and Warehousing Systems, but
had not entered into a subcontracting agreement or se-
lected a subcontractor. Hence, the information requested
did not exist, nor was the Respondent obligated to fur-
nish that information because of Section 22 of the agree-
ment. See, e.g., Mid-West Sanitary Service, 272 NLRB
624 (1984). Dyer testified that at the April 18 negotiating
meeting "and at most other meetings" he asked for the
name of the company to whom the work was going to
be subcontracted and the terms of the agreement, but
that he received no response. He testified that on April
25 he again asked for the name of the subcontractor and
was told that two or three were under consideration, and
that "I asked as to what the proposal was, the cost of
their subcontracting proposal, so that we could be com-
28 Attached hereto as Appendix A.
216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
petitive in our proposal," but again there was no re-
sponse. He testified that on June 27, "We told Sunny
Lee and the two representatives from the company that
this . . . was about as far as we could go without really
knowing the cost of the subcontractor's proposal so that
we could be competitive, if we needed to be so. Again,
we asked for that information. Who was going to be the
subcontractor and what was the cost." Fracolli and Ra-
beneck both specifically denied that Dyer ever asked for
any information regarding the cost of subcontracting so
that the Union could be competitive. I do not credit
Dyer, whose testimony was susceptible to corroboration
but was not corroborated. His recall of the negotiations
was poor and a substantial portion of his testimony was
elicited through suggestive and leading questions. I be-
lieve that this portion of his testimony was fabricated.,
Accordingly, I credit the denials of the Respondent's
witnesses that the cost information was ever requested. I
further conclude that the subcontractor's proposals were
not encompassed by the March 22 letter from Dyer or
the March 31 letter from the Union's attorney requesting
certain information. Accordingly, I recommend the dis-
missal of paragraph 16 of the amended complaint.
The amended complaint alleges that by engaging in
the conduct alleged in paragraphs 10, 11, 12, and 13 the
Respondent refused to bargain in good faith. Conceding
that section 22 of the contract allowed the Respondent
to subcontract the unit work, the General Counsel
argues that the Respondent waived that right by entering
into the non-Board settlement of the unfair labor practice
charge in Case 20-CA-17786 whereby it agreed "to meet
and bargain over the terms and conditions of a new con-
tract up until the time an arbitrator renders a decision on
the severance of employees pursuant to Section 22" of
the contract. According to the General Counsel, the Re-
spondent's bargaining in good faith was a condition
precedent to it having the right to subcontract the unit
work once the arbitrator issued his decision.29 The Gen-
eral Counsel argues that "the statements by Fracolli to
the unit employees establish that Respondent was not
seeking to enter into an agreement but rather to force the
employees to withdraw from the Union so that Respond-
ent could operate the warehouse on a non-union basis."
He also argues that "Fracolli's own testimony establishes
that Respondent was engaged in a course of sham bar-
gaining" in that he "testified that even if the Union had
totally agreed to Respondent's bargaining proposal,
which required immense concessions by the Union, Re-
spondent would have signed a contract with the Union
and then proceeded to subcontract the warehouse and
delivery work anyway" pursuant to section 22, which
the Respondent insisted be included in any subsequent
agreement. 30
The Respondent points out that the decision to sub-
contract was made prior to any allegations of antiunion
conduct; and that Dyer admitted neither Fracolli nor Ra-
beneck had ever said anything even hinting of antiunion
29 The Union stipulated before the arbitrator that the Respondent had
the right under sec. 22 to subcontract
30 The Union was equally adamant that sec. 22 be excluded from any
subsequent agreement
animus and had described their 12-year relationship as
"very good." It argues that the uncontradicted evidence
shows that the decision to subcontract "was motivated
by its desire to reduce its excessive costs and eliminate
its economic problems, and to supply a proficient service
to its customers." It is argued that the General Counsel
failed to produce any evidence that anti union animus
contributed to the Respondent's January 4 decision sub-
contract. It is also claimed that "a review of the negotia-
tions including the concessions and proposals made as
well as the agreements reached therein, demonstrates
that the Respondent approached negotiations with an
`open mind' and a `sincere desire' to reach an agreement,
albeit an agreement which contained a clause protecting
the Respondent's right to subcontract its warehouse and
delivery operations." Respondent further points out that
under section 22 it did not have a duty to bargain over
the decision to subcontract, and that it was pursuant to
that section it furnished the Union with information rele-
vant to the effects of the decision.
An anaylsis begins with the undisputed evidence that
in the fall of 1981, when Fracolli became the Respond-
ent's general manager, the Respondent was experiencing
economic problems, with particular problems existing in
the warehouse and delivery operations. Corrective meas-
ures were taken with respect to some of the problems,
and on March 30, 1982, the board of directors directed
that a study be made on ways to reduce costs. A propos-
al to assume the warehouse and delivery operations was
received from Capital Delivery Services. Meetings were
held with the Union which did not prove fruitful. A rela-
tive cost analysis disclosed that the warehouse and deliv-
ery operations could be performed by an independent
company at about one-half what it was costing the Re-
spondent using its own employees. On January 4, 1983,
the Respondent's board of directors, pursuant to section
22 of the collective-bargaining agreement, decided to
subcontract the warehouse and delivery operations. Both
the Union and the affected employees were notified.
Upon the Union's refusal to discuss the subject of sever-
ance benefits to be paid the affected employees, the Re-
spondent invoked the contractual grievance procedure.
Due to the Union's reluctance to take up the issue, the
Respondent obtained a state court order compelling arbi-
tration of the severance issue. In mid-March, the Union
filed an unfair labor practice charge with the Board al-
leging the Respondent was refusing to bargain over a
new contract. On April 5, the Union and the Respondent
entered into an agreement providing for withdrawal of
the charge and that the Respondent would bargain over
the terms and conditions of a new contract "up until the
time an arbitrator renders a decision on severance," at
which time "the Employer's duty to bargain with the
Union ceases" in the event an agreement was not
reached. Pursuant to the court's order, the issue of sever-
ance was heard by Arbitrator Kagel on June 2. Section
24 of the collective-bargaining agreement provides that
an arbitrator's decision is binding on all parties. At the
arbitration, the parties stipulated that the Respondent had
the right under the collective-bargaining agreement to
subcontract and that the arbitrator's decision was binding
HANDY ANDY ASSOCIATES
on all of the parties. On July 26, the arbitrator issued his
Opinion and Decision awarding the employees severance
pay and benefits. In the meantime, the Respondent met
and negotiated with the Union over the terms and condi-
tions of a new contract. The evidence discloses that
agreement was made on a number of issues , but that the
parties remained apart on several issues. While I have
found that Fracolli and Rabeneck engaged in unlawful
conduct in an effort to induce employees to forgo union
representation, the evidence does not disclose that the
Respondent's conduct amounted to a refusal to bargain
with the Union. The decision to subcontract was made
prior to any unlawful conduct. The overall evidence es-
tablishes that the decision to subcontract was made for
legitimate economic reasons and was permitted by the
collective-bargaining agreement. The Union conceded
those points at the arbitration and both parties agreed to
be bound by the arbitrator's decision. It is clear that the
arbitration was intended to resolve the parties' contrac-
tual dispute over subcontracting. There has been no con-
tention that the arbitration was anything but fair and reg-
ular. In these circumstances I reject the General Coun-
sel's argument that the Respondent waived the contrac-
tual right to subcontract by entering into the non-Board
settlement of the unfair labor practice charge in Case 20-
CA-17786. Rather, by reason of section 22 of the collec-
tive-bargaining agreement, the Union waived its right to
bargain over the decision to subcontract. See, e.g., Mid-
West Sanitary Service, supra. Furthermore, the Board has
often found discharges pursuant to an employer's deci-
sion to subcontract work not to be violative of Section
8(a)(3) when, as here, the employer has demonstrated
that the sole basis for its decision was predicated on eco-
nomic or other legitimate business considerations. P. W
Supermarkets, 269 NLRB 839, 840 (1984). Further, the
evidence does not establish that the Respondent bypassed
the Union and dealt directly with employees as alleged
in paragraph 17, nor does it establish that the Respond-
ent unlawfully caused the termination of Robbins as al-
leged in paragraph 20. Accordingly, I recommend dis-
missal of paragraphs 17, 18, 19, and 20 of the amended
complaint and decline to recommend that the Respond-
ent reinstitute its warehouse and delivery operations.
To summarize, the Respondent violated Section 8(a)(1)
of the Act as alleged in paragraphs 10, 11, 12, and 13 of
the amended complaint, but did not engage in any other
unlawful conduct.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By interrogating employees regarding their union
membership and sympathies :; by telling employees they
have the choice of getting out of the Union or the Re-
spondent will drag out negotiations until after the arbi-
trator issued a decision and then subcontract unit work
and they will lose their jobs; and by telling employees
they will not be fired if they get out of the Union, the
Respondent violated Section 8 (a)(1) of the Act.
217
4. The above-described unfair labor practices affect
commerce within the meaning of Section 2(6) and (7) of
the Act.
5. The Respondent has not committed any other unfair
labor practices alleged in the amended complaint.
THE REMEDY
Having found the Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease
and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed31
ORDER
The Respondent, Handy Andy Associates, Inc., Sacra-
mento, California, its officers , agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Interrogating employees regarding their union
membership and sympathies; telling employees they have
the choice of getting out of the Union or the Respondent
will drag out negotiations and then subcontract their
work and they will lose their jobs; telling employees
they will not be fired if they get out of the Union.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Post at its premises in Sacramento and North High-
lands, California, copies of the attached notice marked
"Appendix B."a2 Copies of the notice, on forms provid-
ed by the Regional Director for Region 20, after being
signed by the Respondent's authorized representative,
shall be posted by the Respondent immediately upon re-,
ceipt and maintained for 60 consecutive days in conspic-
uous places including all places where notices to employ-
ees are customarily posted. Reasonable steps shall be
taken by the Respondent to ensure that the notices are
not altered, defaced, or covered by any other material.
(b) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
IT IS FURTHER ORDERED that the complaint be dis-
missed insofar as it alleges violations of the Act not spe-
cifically found herein.
31 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 provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
32 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
218 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
ISSUE:
What should be the severance terms, if any, for the
Employees of Handy Andy Associates affected by sub-
contracting?
AGREEMENT PROVISIONS:
"SECTION 22. SUBCONTRACTING
"The Employer may, sixty (60) days prior , notify
the Union of his desire to subcontract out work
covered by this Agreement . In the event the parties
hereto are unable to agree on the severance of em-
ployees whose work has been contracted out, their
dispute shall be subject to the Grievance Procedure
in Section 24 hereof. In the event the dispute goes
to arbitration , the Employer agrees not to contract
out said work until an arbitrator 's award is re-
ceived." (Jt. Ex. 1, p. 10)
Stipulations:
The following matters were stipulated to during the
hearing herein:
1. That the Company has the right under the Contract
to subcontract out the warehouse and delivery oper-
ations currently carried on at the warehouse location in
Sacramento.
2. Employee Jim Robbins is not a current Employee of
Handy Andy.
3. The Collective Bargaining Agreement was in effect
on February 22, 1983 when notice of the Company's
intent to subcontract was given to the Union. That Con-
tract has since expired on April 1, 1983. It has not been
renewed . No new Agreement has been- reached, and the
Company and the Union are in negotiations for a new
Agreement (Tr. 2).
4. Sections 29 and 30 of the Breuner's Local 250 con-
tract have remained the same since the 1974- 1977 con-
tract. Those provisions read as follows:
"SECTION29 - CONTRACTING OUT
"All work customarily performed by the Employer
with its own employees shall be continued to be so
performed unless the Employer decides otherwise
at his sole discretion . No provisions of this collec-
tive bargaining agreement shall be construed to
limit the Employer 's right at any time to subcon-
tract all or any part of the work covered by this
Agreement.
"SECTION 30 - SEVERANCE PAY
"(a) Employee(s) who have been permanently laid
off because of the closing of a store or stores, or as
a result of the Employer having contracted out
work, (in accordance with Section 29 (hereof) shall
receive days of severance allowance, based on his
straight time hourly earnings at the time of separa-
tion, and his years of continuous service, in accord-
ance with the following schedule:
"Employees with more than one year of continu-
ous employment with the Employer but less than
three (3) years' continuous employment shall re-
ceive five (5) days' pay at their straight time rate.
"Employees with three (3) consecutive years of
employment with the Employer up to ten (10)
consecutive years of employment shall receive
ten (10) days' pay at their straight time rate.
"Employees with ten (10) or more years of con-
tinuous employment with the Employer shall re-
ceive fifteen (15) days' pay at their straight time
rate.
"(b) An employee who meets the above conditions
for severance pay shall nevertheless not be entitled
to same if-
"I. The employee is hired, in the event the Employ-
er contracts out work, by the party to whom the
work is being contracted.
"2. The Employer offers the employee another posi-
tion in the same geographical area, regardless of
whether the employee accepts or rejects the offer
of employment.
"3. The employee is discharged for good cause in
accordance with Section 23 hereof.
"4. The employee accepts retirement benefits under
Section 14 hereof or applies for same within thirty
(30) days of his termination." (Co. Ex. 1, pp. 12-
13)
5. Mr. Robbins took another job and quit effective
May 18, 1983.
6. The Arbitrator has been referred to Section 22 of
the Agreement which essentially calls for what is charac-
terized as an interest arbitration in this matter.
7. The Company has not as yet subcontracted the
work pursuant to its notice but would represent that its
intent is to subcontract it all, although that may not
come to pass . If such subcontracting did occur, then all
persons in the Bargaining Unit would no longer be em-
ployed (Tr. 9-10).
8. The decision in this case will be binding with re-
spect to any severance as the result of subcontracting no-
ticed on February 22 even though the Agreement, Joint
Exhibit 1, has expired (Tr. 11).
9. The Parties agree that any accrued vacation pay
would be due any severed Employees (Tr. 14, 22) and
that the Company would recall Employees in the event
that it ceased subcontracting such work by the Employ-
ee's past seniority.
10. The Arbitrator shall retain jurisdiction as to com-
pliance with the terms of the Award herein (Tr. 29, 31).
FURTHER BACKGROUND:
The Company currently provides warehouse and de-
livery service to three of its retail stores in Sacaramento
and Modesto. Of the Employees who remain, they range
in seniority with the Company from 9-3/4 years to 17-
3/4 years (Un. Ex 1). Their ages range from the mid-
thirties to fifty-two (Tr. 80-84). There currently is one
Warehouseman and four Drivers who also perform
warehouse work as occasions arise.
HANDY ANDY ASSOCIATES
DISCUSSION:
Late Exhibit:
The Employer attached a proposed exhibit to its brief,
such exhibit not being presented during the hearing. The
Union objected to the consideration of the exhibit. The
Employer subsequently withdrew the document and it
was not considered herein.
Obligation with Respect to Severance:
The Employer maintains that there is no obligation in
the A greement that severance pay be paid since Section
22 deals solely with the question of "severance". The
Employer's position is not accepted for at least three rea-
sons. The first is that the Employer itself maintains that
it agreed to pay severance pay during 1975 negotiations.
The Employer, however, did not call the Union's atten-
tion to the fact that the typed 1975 Agreement which re-
sulted from those negotiations did not contain its agree-
ment to pay severance pay. The Employer thus cannot
now be heard to contend that the 1971 adoption of Sec-
tion 22 did not include the obligation of the Employer to
negotiate, or to submit to the Grievance Procedure
under Section 22 the question of severance "pay".
Second, the term "severance" itself is an ambiguous
one at best. Even if there was no aid to determine the
Parties' intent as shown by the Employer's history of ne-
gotiations, the most logical definition of "severance"
would include severance pay. Otherwise, what the Em-
ployer is maintaining is that the Union in agreeing to
Section 22 allowing the Employer the unfettered right to
subcontract away its work preserved nothing for its
members of any value in agreeing to that provision, not-
withstanding agreeing to submit the question of sever-
ance to the Grievance Procedure.
Third, this conclusion is additionally bolstered by the
fact that the Employer agreed not to subcontract the
work until an Arbitrator's award is received with respect
to "severance." The only meaning that this provision
could have would be to deal with the question of eco-
nomic aspects of severance. The Employer offered no
viable alternative as to what would be submitted to the
grievance procedure or arbitration with respect to "sev-
erance" other than the economic aspects thereof.
Claimed Limitation on Severance Pay:
The Employer's contention that past practice shows
that no severance pay would be due, dealing with a clo-
sure of a facility at Lake Tahoe, is not factually parallel
to this case. The Union established that there were spe-
cific circumstances which are not involved in this case
with respect to the Sacramento situation (Tr. 66, 69).
Bruener'r Contract:
The Employer maintains that in 1975 the Union pro-
posed and the Employer accepted that severance pay
would be payable on subcontracting and, further, that
severance pay amounts due would be that limited in the
1974-77 Brenner's contract cited above, with a maximum
payout of fifteen days' straight time pay. As noted above,
also, the Employer, notwithstanding maintaining that it
agreed to this provision, knowingly realized that the pro-
vision was not its 1975-77 Agreement and nonetheless
did not call that to the Union's attention when the 1975-
77 Agreement was typed up. The Employer, therefore,
left the Agreement as it was, namely, to submit the entire
219
issue of severance to the Grievance Procedure including
arbitration as an interest arbitration. The intentional act
of the Employer in not including the Bruener's provision
in the Agreement precludes the Employer from now
maintaining that Section 22 has the limitations of the
Bruener's Agreement contained therein.
Interest Arbitration as to Severance Pay:
The Employer defined severance pay as follows:
"A lump-sum payment, generally computed on the
basis of length of service, made by an employer to a
worker whose employment is terminated for causes
beyond the worker's control, and which is in addi-
tion to any back wages or salary due worker." (Er.
Ex. 4)
In addition, the Union cites another reference work to
essentially the same effect, but which added:
". .. It [severance pay] is normally intended to
help tide the employees over the period of unem-
ployment immediately following termination. It also
represents in part a payment in return for loss of job
rights." (Labor Rel. Rep. (BNA) LRX 635 (1978))
In this case, additionally, this is not a situation where the
plant closed or permanently ceased to operate, but in-
volved subcontracting of work and the reason to do so
would be for the economic advantage to the Employer.
It is not inappropriate, in a severance pay interest arbi-
tration of this nature to include consideration of that
factor.
The Union proposal with respect to severance is as
follows:
"SEVERANCE PAY: Handy Andy Associates, Inc.
(hereafter `the Company') will pay each employee
laid off due to subcontracting two weeks pay for
each year of service worked by that employee.
"HEALTH AND WELFARE BENEFITS: The
Company will pay health and welfare benefits for
all employees laid off as a result of subcontracting
for 6 months after the date of subcontracting.
"PENSION BENEFITS: The Company will pay
pension benefits for all employees laid off as a
result of subcontracting until December 1, 1983,
or for three months after the date of subcontract-
ing, whichever is later.
"SICK LEAVE: Each employee laid off as a result
of subcontracting will be paid for all sick leave
accumulated as of the date of subcontracting."
(Un. Ex. 2)
The Employer maintains , as noted, that severance pay
should be as the Bruener's contract from 1974 to 1977
shows; that the Union's contentions are unsupported by
either specific evidence that the Grievants could not be
employed elsewhere on leaving the Company and that
no relevant provisions from comparable employers
except the Bruener's contract was presented into evi-
dence.
Notwithstanding these contentions, and taking into
consideration the Union' s arguments in favor of its pro-
220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
posals, thirteen weeks straight time pay for each Em-
ployee, as well as thirteen weeks health and welfare cov-
erage for himself and his dependents effective on the
date of actual severance are found to be appropriate
terms for severance pay.
The Employer's contention that to grant health and
welfare benefits would not be lawful does not take into
account that this decision is pursuant to and, therefore,
part of Section 22 of the 1981-83 Agreement between
the Parties, Thus, it is supported by and is part of that
Collective Bargaining Agreement under which such pay-
ments may be lawfully made. Its expiration is irrelevant
to this conclusion, this case arose thereunder and is being
arbitrated thereunder as the Parties' stipulations show.
The Union requests for payment of accumulated sick
leave or for additional pension rights are denied.
As will be seen in the decision herein certain provi-
sions sought by the Employer as to eligibility for sever-
ance pay are adopted, the Employer's request for an
offset for unemployment compensation is denied.
DECISION:
1. (a) Severance terms for the Employees of Handy
Andy Associates affected by subcontracting notice on
February 22, 1983 pursuant to Section 22 of the 1981-83
Agreement between the Parties shall be thirteen week's
straight time pay and thirteen weeks of health and wel-
fare benefits coverage for the Employee and his depend-
ents, if any, effective the date of his severance due to the
subcontracting.
(b) An Employee shall not be eligible for severance
pay if 1) he terminates his employment on his own
accord prior to the effective date of his severance due to
the subcontracting; 2) is offered a job and is actually
hired by the Company which will be performing the sub-
contracted work provided there is no break in employ-
ment between his severance and such hiring; 3) if the
Employee is discharged for just cause within the mean-
ing of Section 10 of the 1981-83 Agreement prior to the
effective date of severance; or 4) who accepts retirement
fective date of severance and who is subsequently ac-
cepted for retirement.
2. The Arbitrator, pursuant to the Parties' stipulation,
retains jurisdiction in the event that there is any dispute
with respect to the Employer's compliance with the
terms of this Award.
APPENDIX B
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join , or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these protect-
ed concerted activities.
WE WILL NOT interrogate our employees regarding
their union membership and sympathies.
WE WILL NOT tell our employees that they have the
choice of getting out of Teamsters Union Local 150 or
any other union or we will drag out negotiations and
then subcontract their work and they will lose their jobs.
WE WILL NOT tell employees they will not be fired if
they get out of Teamsters Union Local 150.
WE WILL NOT in any like or related manner interefere
with, restrain or coerce employees in their rights guaran-
teed them by Section 7 of the Act.
or who applies for retirement within 30 days of the ef- HANDY ANDY ASSOCIATES, INC.