Harter Equipment, Inc.

National Labor Relations Board - Board Decisions

Jun 24, 1986

280 N.L.R.B. 597 (N.L.R.B. 1986)

HARTER EQUIPMENT 597
Harter Equipment , Inc. and Local 825, International
Union of Operating Engineers, AFL-CIO. Case
22-CA-11527
24 June 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS, JOHANSEN, AND BABSON
On 22 April 1983 Administrative Law Judge
Steven Davis issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed an answering brief.
On 13 August 1985 the Board scheduled oral ar-
gument because this case presented important issues
in the administration of the National Labor Rela-
tions Act. On 19 September 1985 the Respondent,
the General Counsel, the Charging Party, the
American Federation of Labor and Congress of In-
dustrial Organizations, the International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, the Chamber of Commerce of
the United States of America, and the Council on
Labor Law Equality 1 presented oral argument
before the Board.
The Board has considered the decision and the
record in light of the exceptions, briefs, and oral
arguments and has decided to affirm the judge's
rulings, findings, and conclusions and to adopt the
recommended Order for reasons set forth in this
decision.
The issue presented here is whether the Re-
spondent violated Section 8(a)(3) and (1) of the Act
by hiring temporary replacements after lawfully
locking out permanent employees for the sole pur-
pose of bringing economic pressure to bear in sup-
port of a legitimate bargaining position. The judge
found no violation. We agree. In accord with the
rationale expressed in the opinion of former Mem-
bers Kennedy and Penello in Ottawa Silica Co., 197
NLRB 449 (1972), we hold that, absent specific
proof of antiunion motivation, an employer does
not violate Section 8(a)(3) and (1) by hiring tempo-
rary replacements in order to engage in business
operations during an otherwise lawful lockout.
The Respondent and the Union have been parties
to a series of collective-bargaining agreements since
1973. In October 1981,2 the Respondent and the
Union commenced negotiations for a new contract
to succeed the one scheduled to expire on 1 De-
cember. The Respondent informed the Union that
it was experiencing grave financial difficulties and
' The AFL-CIO, the Teamsters , and the Chamber of Commerce ap-
peared as amici curiae The Counsel on Labor Law Equality appeared
both as amicus curiae and on behalf of the Respondent
2 All dates refer to 1981 unless otherwise indicated
consequently sought reductions in wages and
changes in the union-security clause. The Union
opposed the Respondent's proposals and offered to
extend the expiring contract for 6 months so that
negotiations could continue. The Respondent re-
plied that it would not allow employees to work
without a contract and would not grant any exten-
sions of the contract.
Negotiations continued and on 1 December the
Respondent submitted a "final" proposal to the
Union. The Union was granted a 1-day extension
of the contract to consider the proposal, which it
rejected. On 3 December the Respondent locked
out its employees in order to put pressure on the
Union to agree to terms favorable to the Respond-
ent.
In mid-January 1982, the Respondent com-
menced hiring temporary employees so that it
could resume operations and meet fixed expenses.
Negotiations continued through March, but at the
time of the hearing the lockout continued and the
temporary replacements were still employed.
There is no evidence that the Respondent was
motivated by specific union animus. On the con-
trary, the bargaining history between the Respond-
ent and the Union shows that their relations have
been amicable. Further, there is no evidence that
the Respondent engaged in bad-faith bargaining
before or after the lockout.
Two decisions issued on the same day by the Su-
preme Court provide the basis for evaluating the
legality of the Respondent's lockout and use of
temporary replacements: American Ship Building
Co. v. NLRB, 380 U.S. 300 (1965); and NLRB v.
Brown Food Store, 380 U.S. 278 (1965). In American
Ship Building, the Court held that an employer vio-
lated neither Section 8(a)(3) nor Section 8(a)(1)
when, after a bargaining impasse had been reached,
it temporarily locked out employees for the sole
purpose of bringing economic pressure to bear in
support of a legitimate bargaining position. In
Brown Food Store, the Court held that employers
did not violate Section 8(a)(3) or Section 8(a)(1) by
continuing operations with temporary replacements
after lawfully locking out regular employees in re-
sponse to a whipsaw strike against one member of
a multiemployer association.
The legal analyses in American Ship Building and
Brown Food Store were complementary. The Court
found sufficient business justification for both em-
ployer weapons in the course of economic con-
flicts. The Court also assessed the impact of the use
of these legitimate employer weapons on three em-
ployee rights protected by the Act: the right to
bargain collectively, the right to strike, and the
right to engage in union activities. In each instance,
280 NLRB No. 71
598 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Court found that the impact of the employer
conduct on employee rights was comparatively
slight, rather than inherently destructive . Having
so found, the Court concluded that the conduct
was prima facie lawful.
In American Ship Building, the Court made clear
that the employer's lockout reasonably served the
legitimate business end of pressing good -faith bar-
gaining demands . Turning to the effect of such
conduct on employee rights, the Court observed
that the lockout was not in any way inconsistent
with the employees' right to bargain collectively.
"The lockout may well dissuade employees from
adhering to the position which they initially adopt-
ed in the bargaining , but the right to bargain col-
lectively does not entail any `right' to insist on
one's position free from economic disadvantage."
380 U.S. at 309. Similarly, a lockout in support of
an employer's legitimate bargaining position was
not inconsistent with the employees' right to strike
because "there is nothing in the statute which
would imply that the right to strike `carries with it'
the right exclusively to determine the timing and
duration of all work stoppages." Id. at 310. Finally,
the Court rejected the notion that the lockout had
any natural tendency severely to discourage union
membership. The lockout did not target only union
members. Although employees might suffer eco-
nomic disadvantage because of their union's bar-
gaining position, "this is also true of many steps
which an employer may take during a bargaining
conflict, and the existence of an arguable possibility
that someone may feel himself discouraged in his
union membership or discriminated against by
reason of that membership cannot suffice to label
them violations of § 8(a)(3) absent some unlawful
intention ." Id. at 312-313.
In Brown Food Store, the Court reiterated its
view that an employer lockout was a legitimate
economic weapon in a variety of circumstances.
For example, the Court had previously found that
the use of a lockout by members of a multiemploy-
er bargaining unit in response to a whipsaw strike
did not violate either Section 8(a)(1) or Section
8(a)(3). NLRB v. Teamsters Local 449 (Buffalo
Linen), 353 U.S. 87 (1957). Turning to the unfair
labor practice question raised by the hiring of tem-
porary employees after a lawful Buffalo Linen lock-
out, the Court found the same legitimate business
purpose of preserving the multiemployer unit
served and stated: "In the circumstances of this
case, we do not see how the continued operations
of respondents and their use of temporary replace-
ments imply hostile motivation any more than the
lockout itself; nor do we see how they are inher-
ently more destructive of employee rights." 380
U.S. at 284. Emphasizing the close relationship in
purpose and effects between a lockout and hiring
temporaries, the Court found the latter action to be
consistent with and having no greater impact on
employee rights than numerous other lawful eco-
nomic weapons of employers. The use of temporar-
ies was not inherently destructive of the right to
strike even if it doomed the whipsaw strike to fail-
ure. In addition, the tendency to discourage union
membership beyond the dissatisfaction lawfully
stirred by the lockout was comparatively insubstan-
tial. Upon resolution of the bargaining dispute,
even if on less favorable terms proposed by the em-
ployers, union members could return to their jobs
and the temporary replacements would depart.
In NLRB v. Great Dane Trailers, 388 U.S. 26
(1967), the Court reviewed and reaffirmed the prin-
ciples of American Ship Building and Brown Food
Store. From these and other cases,$ the Court dis-
tilled and summarized its guidelines for assessing
employer motivation in the context of asserted
8(a)(3) violations (388 U.S. at 34):
First, if it can reasonably be concluded that
the employer's discriminatory conduct was
"inherently destructive" of important employ-
ee rights, no proof of an antiunion motivation
is needed and the Board can find an unfair
labor practice even if the employer introduces
evidence that the conduct was motivated by
business considerations. Second, if the adverse
effect of the discriminatory conduct on em-
ployee rights is "comparatively slight," an an-
tiunion motivation must be proved to sustain
the charge if the employer has come forward
with evidence of legitimate and substantial
business justifications for the conduct. Thus, in
either situation, once it has been proved that
the employer engaged in discriminatory con-
duct which could have adversely affected em-
ployee rights to some extent, the burden is
upon the employer to establish that he was
motivated by legitimate objectives since proof
of motivation is most accessible to him.
In Inland Trucking Co., 179 NLRB 350 (1969),
the Board had an opportunity to interpret American
Ship Building and Brown Food Store in determining
whether employers violated Section 8(a)(3) and (1)
by hiring and using temporary employees after a
lockout in support of the employers ' bargaining de-
mands. The Board adopted without comment the
trial examiner's finding of violations. The trial ex-
9 E g, NLRB v Erie Resistor Corp, 373 U S 221 (1963), in which the
Court held that an award of supersemonty to employees who worked
during a strike was discriminatory , inherently destructive conduct bear-
ing its own indicia of improper intent
HARTER EQUIPMENT
aminer reasoned that the employers ' action had at
least some adverse impact on employee rights. He
then found that the employers had failed to meet a
burden of proving that the lockout and use of tem-
poraries served a sufficient legitimate objective.
The Court of Appeals for the Seventh Circuit en-
forced the Board's Order in Inland Trucking Co. v.
NLRB, 440 F.2d 562 (7th Cir. 1971), cert. denied
404 U.S. 858 (1971), fording alternatively that the
lockout, coupled with the use of temporary em-
ployees, was (1) inherently destructive of employee
rights and unlawful even if the employers had
proved motivation by business considerations or (2)
unlawful because the employers failed to prove a
legitimate and substantial business justification.
In Ottawa Silica Co., 197 NLRB 449 (1972), the
Board considered the same issue presented in
Inland Trucking but reached a different result. A
majority of the Board agreed that the employer's
use of temporary replacements to continue its busi-
ness operations during a lawful lockout in support
of the employer's bargaining position did not vio-
late Section 8(a)(3) and (1). The plurality opinion
of former Members Kennedy and Penello rejected
the Inland Trucking analysis.4 Their opinion re-
viewed the principles of American Ship Building
and Brown Food Store, and found that locking out
employees and continuing to operate with tempo-
rary replacements were reasonably adapted to the
effectuation of a legitimate business end, then
turned to a consideration of the impact on employ-
ee rights. The plurality noted that, as in Brown
Food Store, the replacements were expressly used
only for the duration of the labor dispute, the
Union at most could be forced to capitulate and
return its members to work on less favorable terms
than sought, and the membership could end the
dispute at any time by agreeing to the employer's
terms and returning to work. Under these circum-
stances, the Board plurality found that the employ-
er's actions did not have any great tendency to dis-
courage union membership, nor were they incon-
sistent with the right to bargain or with the right
to strike. Finding no violation, the plurality con-
cluded with this observation (197 NLRB at 451):
Our evaluation of the principles governing
employer lockouts coupled with continued op-
eration with temporary replacements con-
vinces us that the result reached in Inland
Trucking does not give proper recognition to
legitimate employer interests , devoid of any
4 Former Chairman Miller concurred in the result based on his evalua-
tion of the facts of the case in balancing employer interests against em-
ployee rights Former Members Fanning and Jenkins, dissenting, would
have found the lockout and use of temporary replacements to be inher-
ently destructive of employee rights.
599
motive to discourage the exercise of protected
employee rights, which was the underlying
factor in the Supreme Court's reasoning in
American Ship Building. If we are to follow
the logic of American Ship Building and Brown
Food Stores, we are precluded from inferring
antiunion motivation solely from the applica-
tion of economic pressure during the bargain-
ing dispute.
Having reviewed the foregoing precedent and
the evidence in this case, we are convinced of the
correctness of the plurality opinion of former
Members Kennedy and Penello in Ottawa Silica.
Initially, we find that the use of temporary employ-
ees reasonably serves precisely the same purpose
served by the lockout, i.e., bringing economic pres-
sure to bear in support of a legitimate bargaining
position. After American Ship Building, the validity
of such a business purpose is unassailable. We do
not perceive any persuasive reason why coupling
this purpose with a desire to remain in operation
with temporary employees would impermissibly
color an employer's otherwise legitimate interests.
There can be no more fundamental employer inter-
est than the continuation of business operations.
Exercising the right to lockout in a bargaining dis-
pute does not necessitate for going the option to
secure business earnings any more than exercising
the right to strike requires employees to for go at-
tempts to secure income by temporary alternative
employment, strike benefits, or unemployment
compensation (where permitted by state law). In
sum, the use of temporary employees to remain in
operation after a lawful lockout is "a measure rea-
sonably adapted to the achievement of a legitimate
end. 1,5
We further find that the use of temporary em-
ployees here had only a comparatively slight effect
on employee rights. As in Brown Food Store, we do
not see how the employer's operation with tempo-
rary replacements implies hostile motivation any
more than the lawful lockout itself; nor do we see
how any effort to remain in operation after a lawful
lockout could be "inherently destructive" of em-
ployee rights and per se violative of the Act with-
out inquiry into the employer's motivation.6 The
5 Brown Food Store, supra at 289
The Board has held that the absence of impasse does not of itself
make a lockout in support of bargaining demands unlawful , Darling &
Co., 171 NLRB 801 (1968), enfd sub nom Lane v. NLRB, 418 F.2d 1208
(D C Or 1969), neither does the absence of any reasonable fear of
strike We likewise find that these factors are not dispositive with respect
to the postlockout use of temporary employees. They may, however, be
relevant in a case in which the employer's professed business motivation
is challenged as pretextual
600 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fact that the Respondent here was the protagonist
in locking out employees does not warrant infer-
ring any greater impact on employee rights from
the subsequent use of temporary employees. In
light of American Ship Building, there no longer
exists any meaningful distinction concerning effects
between lawful "offensive" and lawful "defensive"
economic weaponry.
It is the lawful lockout here which had the
impact on employees by removing them from the
ranks of wage earners . Replacing them with tem-
porary employees has no greater adverse effect on
the right to bargain collectively, which "does not
entail any `right ' to insist on one's position free
from economic disadvantage."7 The bargaining re-
lationship continues and the parties may negotiate
their good-faith demands even while resorting to
legitimate economic pressure in support of them.
The use of temporary employees also has no great-
er adverse effect on the employees' right to strike.
If, as stated in American Ship Building, the right to
strike does not include "the right exclusively to de-
termine the timing and duration of all work stop-
pages" (380 U.S. at 310), then the preemptive con-
trol over the work stoppage exerted by both lock-
out and use of temporary employees cannot be
viewed as an intrusion upon the protected right to
strike. Finally, any adverse effect of the use of tem-
porary employees on the right to belong to a union
membership represents, as in Brown Food Store, at
most only a slight addition to the impact of the
lockout itself. In every instance, the use of "tempo-
rary" employees means no threat to the permanent
employee status of locked out employees. The
Union or its individual members have the ability to
relieve their adversity by accepting the employer's
less favorable bargaining terms and returning to
work.
In sum , we find that using temporary employees
after a lawful lockout in order to bring economic
pressure to bear in support of legitimate bargaining
demands (1) is a measure reasonably adapted to the
achievement of a legitimate employer interest and
(2) has only a comparatively slight adverse effect
on protected employee rights. We reject the argu-
ment that the Board should require more proof of
an employer's legitimate purpose in such a case or
should engage in balancing employer interests
against employee rights to determine whether the
Act has been violated, even in the absence of inde-
pendent proof of unlawful employer motivation. In
our view, the Supreme Court's weighing of all rel-
evant rights and interests in American Ship Building
and Brown Food Store has already effectively de-
r NLRB v American Ship Building, supra at 309
fined the employer 's conduct as less than inherent-
ly destructive , has recognized the legitimacy of the
business justifications involved , and has thereby
struck a fixed balance in favor of permitting the
use of temporary employees after an otherwise
lawful lockout . Because the Court has clearly limit-
ed the Board 's use of a qualitative balancing test to
exceptional cases such as Erie Resistor, supra, when
the employer 's conduct is inherently destructive of
employee rights , no further balancing is appropri-
ate here . Apart from this category of exceptional
cases, the general rule is that the Board lacks the
authority to function as an "arbiter of the sort of
economic weapons the parties can use in seeking to
gain acceptance of their bargaining demands."
NLRB v. Insurance Agents, 361 U.S. 477, 497
(1960). The Court expressly relied on this rule in
admonishing the Board to refrain from using a bal-
ancing test in American Ship Building and Brown
Food Store . In particular, the Court stated that
"Sections 8(a)(1) and (3) do not give the Board a
general authority to assess the relative economic
power of the adversaries in the bargaining process
and to deny weapons to one party or the other be-
cause of its assessment of that party's bargaining
power."e
Where, as here , we have found that the employ-
er's conduct falls into the category of cases de-
scribed in Great Dane Trailers , supra, as those in
which the adverse effect on employee rights is
"comparatively slight" and the employer has come
forward with evidence of "legitimate and substan-
tial business justification ," the Board must regard
the conduct as prima facie lawful ." Applying this
rule to the issue presented here, we conclude that
the Respondent has not violated the Act. Further-
more, we hold as a general rule, in accord with Su-
preme Court precedent and the plurality opinion in
Ottawa Silica , that an employer does not violate
Section 8(a)(3) and (1), absent specific proof of an-
tiunion motivation , by using temporary employees
to engage in business operations during an other-
wise lawful lockout , including a lockout initiated
for the sole purpose of bringing economic pressure
to bear in support of a legitimate bargaining posi-
tion.10
8 NLRB v. American Ship Building , supra at 317
9 We do not regard the Court's reference to "substantial" justification
in Great Dane Trailers as meaning anything more than nonfrivolous. This
was the standard of proof in American Ship Building and Brown Food
Store, which was expressly reaffirmed in Great Dane Trailers
10 We overrule Inland Trucking to the extent it is inconsistent with this
decision
HARTER EQUIPMENT 601
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
MEMBER DENNIS , dissenting.
Today the Board answers an important, recur-
ring, and troubling Federal labor law question:
whether any employer who lawfully locks out his
employees to support a bargaining position may go
further and hire temporary replacements to contin-
ue normal operations. It is a question on which the
Supreme Court has expressly declined to pass,'
though it had the opportunity to do so,2 and over
which previous Boards,3 courts of appeals,4 and
academic commentators5 have sharply divided.
And it is a question, difficult and controversial
though it is, to which I believe my colleagues have
given the wrong reply. I therefore dissent, persuad-
ed as I am that using such replacements after a le-
gitimate bargaining lockout-except in narrowly
circumscribed and carefully defined "defensive"
situations-is inherently destructive of protected
employee rights and violates Section 8(a)(1) and (3)
of the Act.
I begin where the majority does-with an analy-
sis of the Supreme Court's simultaneous watershed
decisions in American Ship Building Co. v. NLRB,
above, and NLRB v. Brown, above. In American
Ship Building, the Court held an employer may,
after a valid bargaining impasse, lock out employ-
ees to exert economic pressure in support of a le-
gitimate bargaining position, without violating Sec-
tion 8(a)(1) or (3) of the Act.6 In Brown, the Court
i American Ship Building Co. v NLRB, 380 U S 300, 308 fn 8 (1965).
2 NLRB v. Brown, 380 U S 278 (1965)
S See, e g, Inland Trucking Co, 179 NLRB 350 (1969), enfd 440 F 2d
562 (7th Cir 1971), cert denied 404 U S 858 (1971) (finding temporary
replacement unlawful), Ottawa Silica Co, 197 NLRB 449 (1972) (Mem-
bers Kennedy and Penello finding temporary replacement lawful , Chair-
man Miller concurring , Members Fanning and Jenkins dissenting ), Inter
Collegiate Press, 199 NLRB 177 (1972), affd 486 F 2d 837 (8th Cir 1973),
cert denied sub nom Bookbinders Local 60 v. NLRB, 416 U S. 938 (1974)
(same result and division among Members as in Ottawa Silica)
4 Contrast Inland Trucking Co. v. NLRB, 440 F.2d 562 (7th Cir 1971),
cert denied 404 U S 858 (1971) (upholding Board finding of violation for
employing temporary replacements), with Inter-Collegiate Press v. NLRB,
486 F 2d 837 (8th Cir. 1973), cent denied sub nom Bookbinders Local 60
v NLRB, 416 U S 938 ( 1974) (upholding Board finding of no violation
for employing temporary replacements)
s Contrast, e g, Note, Employers' Lockout with Temporary Replacements
is an Unfair Labor Practice, 85 Harv L Rev 680 (1972) (arguing use of
temporary replacements in conjunction with a legitimate lockout is not
unlawful), with Oberer, Lockouts and the Law- The Impact of American
Ship Building and Brown Food, 51 Cornell L Q 193, 220-223 (1966) (sug-
gesting such replacement is illegal)
6 The Board has subsequently held that a preimpasse lockout to but-
tress a proper bargaining position is not unlawful under American Ship
Building See Darling & Co, 171 NLRB 801, 802-803 (1968), affd sub
nom Lane v NLRB, 418 F 2d 1208 (D C Cir 1969)
held that nonstruck employers in a multiemployer
bargaining association may use temporary replace-
ments in conjunction with a lawful lockout under-
taken after the union has commenced a whipsaw
strike against one association member.
The American Ship Building Court found that the
bargaining lockout did not violate Section 8(a)(1)
because it did not infringe upon the employees'
right to bargain collectively or their right to strike.
Nor did the lockout violate Section 8(a)(3) because
it did not "carry with it any necessary implication
that the employer acted to discourage union mem-
bership or otherwise discriminate against union
members as such,"7 and there was no independent
evidence of unlawful motive.8
The Court explicitly limited its holding to ap-
proving an economically motivated lockout unac-
companied by the use of replacements, saying,
"This is the only issue before us, and all that we
decide."9 In a footnote accompanying that state-
ment, the Court denied Justice White's accusation
that under the majority's rationale "an employer
may not only lock out . . . but replace his locked-
out employees with temporary help."' ° The Court
stated: "Contrary to the views expressed in a con-
curring opinion filed in this case, we intimate no
view whatever concerning the consequences which
would follow had the employer replaced its em-
Id at 312
e In American Ship Building, the employer, a ship repair firm operating
four Great Lakes shipyards, entered into negotiations with eight unions
representing its employees about 7 weeks before the union contract was
to expire on 1 August 1961 Despite numerous meetings, the parties failed
to reach agreement on significant economic issues The employer and the
unions rejected proposals made by one another on 31 July, and the
unions rejected another employer offer made 9 August On 11 August the
employer distributed notices laying off employees the Chicago yard was
shut down entirely; all but two employees were laid off at Toledo, a
large number of employees was retained at Lorain to finish a major
project; and employees in the Buffalo yard were laid off in stages as they
completed various remaining tasks.
The judge found no violation of Sec 8(a)(1), (3), or (5) in the employ-
er's conduct, concluding it was defensive in nature, i e, to avoid the pos-
sibility of a strike occurring during the shipping season when a ship was
in the yard or when the yard was full The Board, however, reversed,
and found the lockout unlawful, determining its purpose was solely to
apply economic pressure on the union to achieve a prompt and favorable
settlement.
The Court in American Ship Building stated, "Both the Board and the
[judge] assumed, within the established pattern of Board analysis, that if
the employer had shut down its yard and laid off its workers solely for
the purpose of bringing to bear economic pressure to break an impasse
and secure more favorable contract terms, an unfair labor practice would
be made out." 380 U S at 306
The Court recognized that the Board had permitted lockouts only in
special "defensive" situations (summarized, id at 307) Its decision in
American Ship Building, however, obliterated that distinction and sanc-
tioned postimpasse lockout use as a legitimate weapon absent unlawful
motivation See Evening News Assn, 166 NLRB 219, 221 (1967), petition
for review denied sub nom Teamsters Local 372 v NLRB, 404 F 2d 1159
(6th Cir 1968), cert denied 395 U S 923 (1969)
9 Id at 308
10 Id at 324
602 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ployees with permanent replacements or even tem-
porary help."11
The majority errs in reading American Ship
Building broadly without due regard to the Su-
preme Court's denial that it was upholding the use
of temporary replacements. Indeed, a close inspec-
tion of American Ship Building reveals that its ra-
tionale for concluding a simple bargaining lockout
does not impair the Section 7 and Section 13 pro-
tected right to strike not only is inapplicable to a
lockout accompanied by the use of temporary re-
placements, but impliedly calls for a different
result.
My colleagues correctly recite the Court's state-
ment that the right to strike does not encompass
"the right exclusively to determine the timing and
duration of all work stoppages." 12 But from that
statement the majority erroneously leaps to the
conclusion that "the preemptive control over the
work stoppage exerted by both lockout and use of
temporary employees cannot be viewed as an intru-
sion upon the protected right to strike."
The Court made its comment in the context of
rejecting the Board's argument that a lockout pre-
empts "the possibility of a strike and thus leave[s]
the union with `nothing to strike against."' 13 The
Court stated, "Insofar as this means that once em-
ployees are locked out, they are deprived of their
right to call a strike against the employer because
he is already shut down, the argument is wholly
specious, for the work stoppage which would have
been the object of the strike has in fact oc-
curred." 14 In this context, the Court's immediately
subsequent remarks about a union not having the
right to control the "timing and duration" of work
stoppages logically follows. But, by the same
token, when an employer not only locks out his
employees, but remains in business using replace-
ment personnel, the right to strike has been nulli-
fied under the Court's reasoning because no work
stoppage has occurred. The majority's reliance on
this portion of the Court's opinion is thus not only
misplaced, but also self-defeating.
The Court also observed that a prohibition
against lockouts was removed from the original
legislative draft of Section 8(a)(1), giving rise to an
inference the deletion was designed "to mollify
those who saw in the bill an inequitable denial of
resort to the lockout, and to remove any language
which might give rise to fears that the lockout was
being proscribed per se." 15 The Court also pointed
' 1 Ed at 308 In. 8
' 2 1d at 310
out other provisions of the Act, including Section
8(d)(4) restricting a party to a labor contract from
engaging in a strike or lockout without giving req-
uisite notice, contain references that "can be inter-
preted as a recognition of the legitimacy of the
[lockout] device as a means of applying economic
pressure in support of bargaining positions." 16 The
Court thus discerned a specific statutory basis for
validating a bargaining lockout.
In sum, I am not convinced that American Ship
Building furnishes authority for justifying the use of
temporary replacements in tandem with a lawful
lockout without more. The Court found sanction
for upholding a bargaining lockout, inter alia, in
the statute itself and its legislative history, and ex-
pressly divorced the temporary replacement from
the lockout issue . To the extent any implications
may be drawn from the opinion, the Court's ration-
ale for finding a bargaining lockout does not
abridge the right to strike suggests temporary re-
placement use would indeed contravene that right.
When the Court, on the same day, addressed the
temporary replacement issue in NLRB v. Brown,
above, 380 U.S. 278, it did so within the confines
of a narrowly delineated set of circumstances and
eschewed any general rule approving temporary
replacement use. There, negotiations between the
union and a five-member multiemployer group op-
erating six stores failed to produce an agreement on
wages. When the union struck one store (Food
Jet), four employers operating the remaining five
stores immediately locked out their union-repre-
sented employees and replaced them with manage-
ment personnel, relatives of management, and tem-
poraries for the strike's duration. Food Jet also
hired temporary help. When the strike ended a
little more than a month later, the Food Jet strikers
and the locked-out employees were reinstated and
the temporaries dismissed.
The Court found the employers' use of tempo-
rary replacements in connection with the lawful
lockout violated neither Section 8(a)(1) nor Section
8(a)(3). The Court, however, restricted its holding
to "the circumstances of this case," 17 its rationale
centering around the defensive character of the
lockout. The Court found no implicit hostile moti-
vation nor inherently destructive impact in the em-
ployers' conduct, viewing it as "all part and parcel
of respondents' defensive measure to preserve the
multiemployer group in the face of the whipsaw
strike.""' Significantly, the Court observed that de-
1s Id 1s Id.
14 Id '7380US at 284
15 Ed. at 315. 18 Id
HARTER EQUIPMENT
vying the nonstruck employers of the multiemploy-
er group the right to replace their employees with
temporaries would negate the right to lock out be-
cause it would permit the struck employer to gain
the economic upper hand by remaining in business
through utilization of replacements , 19 and thereby
potentially threaten the integrity of the multiem-
ployer association.20
In examining specifically the alleged 8(aXl) vio-
lation, the Court agreed with the Board that per-
mitting the nonstruck stores to stay in operation in-
creased the pressure on the employees, but found
"these pressures are no more than the result of the
Local's inability to make effective use of the whip-
saw tactic."21 The Court concluded therefore that
the use of temporary replacements in such circum-
stances constituted a legitimate economic weapon
not inherently destructive of employee rights. The
Court also found no evidence of independent hos-
tile motive.
Regarding the 8(a)(3) allegation, the Court like-
wise found the employers' conduct did not have an
inherently destructive impact on union membership
activities, and that there was no evidence of subjec-
tive unlawful intent. The Court emphasized, how-
ever, that "the respondents ' attempt to remain open
for business with the help of temporary replace-
ments was a measure reasonably adapted to the
achievement of a legitimate end-preserving the in-
tegrity of the multiemployer bargaining unit."22
The majority overlooks the key to the Court's
decision in Brown , which is its emphasis upon the
defensive nature of engaging temporary help in
connection with a lockout where a union has al-
ready struck a member of a multiemployer group.
To deny the remaining employers the right to re-
place in addition to the right to lockout would
place the nonstruck employers at a disadvantage
vis-a-vis the struck employer having a recognized
right to replace. In other words, the Brown Court
found the multiemployers' right to lock out hollow
absent a special, limited right temporarily to re-
place. Had the Supreme Court in Brown desired to
place its imprimatur upon the use of temporary re-
placements in other contexts, it would have used
instead the wider American Ship Building rationale
justifying bargaining lockouts generally to sanction
temporary replacement to the same extent.
1' See NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 ( 1938).
20 380 U S at 284-285 The Court quoted approvingly from the court
of appeals analysis of the circumstances, as follows (id. at 285):
If the struck employer does choose to operate with replace-
ments and the other employers cannot replace after lockout , the eco-
nomic advantage passes to the struck member, the non-struck mem-
bers are deterred in exercising the defensive lockout, and the whip-
saw strike enjoys an almost inescapable prospect of success.
21 Id at 286
22 Id at 289
603
The factual setting for the Respondent's employ-
ment of temporary personnel in this case is far dif-
ferent from that in Brown and similar to that in
American Ship Building. The parties' collective-bar-
gaining agreement ran from 1 December 1978 to 1
December 1981. The Respondent and the Union
met numerous times, bargaining in good faith, but
failed to reach agreement before the contract's ter-
mination . Negotiations stalled principally over the
Respondent 's desire to reduce its wage and fringe
benefit payments . The Respondent rejected the
Union's offer to extend the labor agreement for 6
months, as it desired immediate cost relief. The Re-
spondent made a "final" offer to the Union on I
December, agreed to a 1-day contract extension to
permit employee consideration, but locked out the
unit the next day after its proposal was rejected.
The Respondent's president, Seth Harter, testified
he locked out the employees because he feared a
strike at any time in the absence of a contract and
because he desired to place negotiating pressure on
the Union. In January, Harter began hiring tempo-
rary replacements, as he testified, to defray fixed
expenses and continue operations. Although there
were some subsequent negotiations in March 1982,
no agreement had been reached by the time of the
hearing on 20 and 21 January 1983. There is no in-
dependent evidence of bad faith or union animus
on the Respondent's part.
The use of replacements under the instant facts
is, in my view, inherently destructive of employee
rights and violates Section 8(a)(1) and (3) of the
Act, notwithstanding the absence of improper
motive and the presence of what might be viewed
as legitimate and substantial business reasons for
the conduct.23 Unlike Brown, all the Respondent's
employees desired to continue working. In such a
case, as one respected academic, Professor Oberer,
has stated, "To deny them work which is then of-
fered to nonunion replacements, solely because of
their collective bargaining efforts, would seem
clearly discriminatory and in the nature of reprisal
for section 7 activities."24 Further, as discussed
above, although the right to strike is not impaired
when the union is denied the freedom to dictate
2a See generally NLRB v Erie Resistor Corp ., 373 U S 221 (1963);
NLRB v. Great Dane Trailers, 388 U S 26 (1967), NLRB v Fleetwood
Trailers Co., 389 U.S 375 (1967)
The Court in Erie Resistor (373 U S at 228) explained that where "in-
herently discriminatory or destructive " conduct is involved.
The employer must be held to intend the very consequences
which foreseeably and inescapably flow from his actions [be-
cause] his conduct does speak for itself-it is discriminatory and it
does discourage union membership and whatever the claimed over-
riding justification may be, it carries with it unavoidable conse-
quences which the employer not only foresaw but which he must
have intended
24 Oberer, Lockouts and the Law , 51 Cornell L Q 193, 221-222.
604 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the "timing and duration"25 of a work stoppage
(lockout only), that right is nullified when the
union is denied the possibility of effecting or pro-
voking a shutdown (lockout plus temporary re-
placement).
Professor Oberer has concluded, rightly in my
estimation, as follows:26
It may therefore be argued that Brown Food is
irrelevant, and that the single employer who
chooses to lock out for bargaining purposes
should resign himself to paying the price of a
temporary cessation of business. Because he is
himself responsible for his dilemma with re-
spect to continued operations, he might fairly
be required to take the bitter with the sweet.
Put otherwise, his total conduct-the bargain-
ing lockout plus the hiring of temporary non-
union replacements-might be said to "carry
its own indicia of unlawful intent." Any other
conclusion would entail subordinating express-
ly protected employee rights in favor of non-
expressly protected employer interests to a
degree not involved in the validation of the
bargaining lockout itself.
The Seventh Circuit in Inland Trucking Co. v.
NLRB, above, 440 F.2d 562 (1971), reasoned along
similar lines to conclude that Brown was properly
limited to its special facts involving a multiemploy-
er group's defensive reaction to a whipsaw strike,
and that a lockout accompanied by temporary re-
placements is inherently destructive of employee
rights and in contravention of Section 8(a)(1) and
(3) of the statute. The court commented that such a
lockout "forecloses the employees' opportunity to
earn without surrendering the corresponding right
of the employer,"27 and held that "[p]ermitting an
employer to impose this additional price on the
protected right to collective bargaining would .. .
conflict with the intended scope and content of
that right."2 s
I think my colleagues err in stating broadly that,
after American Ship Building, "there no longer
exists any meaningful distinction as to effects be-
tween lawful `offensive' and lawful `defensive' eco-
nomic weaponry." While American Ship Building
effaced that distinction regarding the legitimacy of
lockouts, the Court, in deciding that case and
Brown, rejected the squarely presented opportunity
to go one step beyond and hold temporary replace-
ment use lawful on the same basis as the lockout
itself. Instead , the Court delimited its holding in
26 American Ship Building, above at 310
26 Oberer, above, 51 Cornell L Q at 222
27 440 F 2d at 564
28 Id
Brown to circumstances in which the union had ini-
tiated economic action and nonstruck employers'
utilization of temporary replacements was vital to
make meaningful their unquestioned lockout right.
In so doing, the Court, I believe, implicitly recog-
nized that allowing an employer to take the offen-
sive and temporarily replace locked-out employees
renders nugatory the employees' right to strike,
and places an unacceptable burden on employees'
rights to engage in collective-bargaining and union
activities. I therefore find the Respondent's tempo-
rary replacement of its employees in these condi-
tions unlawful under Section 8(a)(1) and (3) of the
Act as inherently destructive of rights guaranteed
in Sections 7 and 13 of the Act.
Marguerite R. Greenfield, Esq., for the General Counsel.
Kent A. F. Weisert and Joseph Campisano, Esqs. (Schwartz,
Tobia and Stanziale), of East Orange, New Jersey, for
the Respondent.
DECISION
STATEMENT OF THE CASE
STEVEN DAVIS Administrative Law Judge. On April
1, 1982, Local 825, International Union of Operating En-
gineers , AFL-CIO (the Union), filed a charge against
Harter Equipment, Inc. (Respondent), and on July 30,
1982, the Regional Director of Region 22 issued a com-
plaint against Respondent that alleges that it violated
Section 8(a)(1) and (3) of the Act by locking out six
named employees and hiring temporary replacements for
those employees.
The case was heard before me in Newark, New
Jersey, January 20 and 21, 1983.
On the entire record, including my observation of the
demeanor of the sole witness, Seth Harter,' and after
due consideration of the briefs filed by the General
Counsel and Respondent, I make the following
FINDINGS OF FACT
1. JURISDICTION
Respondent, a New Jersey corporation, having its
principal office and place of business at Route 33, Eng-
lishtown, New Jersey, is engaged in the sale, distribution,
and service of construction and lawn maintenance equip-
ment and related products. It annually purchases and re-
ceives construction equipment and other goods and ma-
terials valued in excess of $50,000 directly from suppliers
located outside New Jersey. Respondent admits and I
find that it is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
i There were no credibility issues raised at the hearing Harter's undis-
puted testimony is credited As discussed , infra, I do not believe that
Harter's fear of a strike was justified However, that minor issue does not
at all affect his credibility
HARTER EQUIPMENT 605
II. THE UNION
Respondent has denied knowledge or information
about the Union's status as a labor organization. The evi-
dence established that the Union, whose members in-
clude certain employees of Respondent, represents em-
ployees in collective-bargaining negotiations with their
employers and is a party to various bargaining agree-
ments including an agreement with Respondent. I ac-
cordingly find and conclude that the Union is a labor or-
ganization within the meaning of Section 2(5) of the Act.
III. ALLEGED UNFAIR LABOR PRACTICES
A. Background
Prior to 1978 Respondent was a member of an em-
ployer association, in the Associated Equipment Dealers
of New Jersey, which was a party to a collective-bar-
gaining agreement with the Union. In 1977 Respondent
withdrew from the association and separately negotiated
and entered into a collective-bargaining agreement with
the Union, that ran from December 1, 1978, to Decem-
ber 1, 1981.
The parties met about 14 times for the purpose of ne-
gotiating a renewal contract to replace the agreement
that was to expire on December 1, 1981. They met about
seven times before the lockout of December 3, 1981. It is
not alleged that Respondent engaged in surface bargain-
ing or bad-faith bargaining and in fact the General Coun-
sel stated at the hearing that charges alleging a refusal to
bargain that were filed against both parties were either
dismissed or withdrawn.
During the course of the negotiations, the proposals
and demands of both parties were presented and dis-
cussed. The major issues were wages and a union-securi-
ty clause.
Throughout the negotiations it was the Union's posi-
tion that it would extend the expiring agreement for as
much as 6 months so that negotiations could continue. It
was Respondent's position that it wanted to reach agree-
ment and have a contract executed before the December
expiration date, and if a renewal agreement was not exe-
cuted by that time it would not permit its employees to
work. Respondent's reasons for insisting on a contract
before December 1 were threefold: (a) President Seth
Harter feared that if Respondent's agreement was ex-
tended beyond January 15, 1982, the expiration date of
the association contract, the Union would demand that
Respondent agree to the same terms as the association
contract, and (b) Respondent sought to reduce its wages
and fringe benefit payments because it was losing money
and had to cut costs. Thus, as an extension of the con-
tract, with its high wage and benefit provisions would
not relieve its financial difficulties, and (c) Respondent
wanted the protection of a no-strike clause because it
feared that its employees might strike if they worked
without a contract being in effect.
Respondent initially proposed a union-security clause
that provided that union membership would be voluntary
after 180 days of employment. The union-security clause
in the expiring contract required membership in the
Union as a condition of employment, after 90 days of
employment for regular employees and 180 days for
trainees. The Union was opposed to Respondent's union-
security proposal and there was little movement in nego-
tiations on that issue until November 27, 1981, when
Union Representative Fay proposed, subject to the ap-
proval of union officials, that Respondent would not be
required to provide benefits for new employees until 36
months after their employment. Respondent immediately
accepted this offer, however, later that day Fay advised
Respondent that he could not obtain approval of the pro-
posal from union officials and the offer was therefore
withdrawn.
Harter conceded that in the meetings held in Novem-
ber, the parties reached agreement on certain items.
On December 1, the day the contract expired, Re-
spondent submitted a new "final" proposal to the Union
that provided, inter alia, that "trainees shall be required
to apply for membership in the Union not later than 18
months after their employment and are not eligible for
benefits until a union member." Respondent also pro-
posed a wage reduction permit for its employees. Fay re-
quested that the contract be extended 1 day to permit the
employees to consider the proposal. Accordingly, the
employees worked on December 2. On December 3,
Harter was advised by Shop Steward Jeffrey Hughy that
the employees rejected Respondent's proposal but
wanted to continue to work until a new contract was
agreed on.2 Harter refused, and directed his Service
Manager James Gerstenmier to refuse to permit the em-
ployees to punch in or work. On December 4, the em-
ployees picketed Respondent's premises with signs that
stated that they were locked out.
Harter testified that he locked out the employees
mainly because he did not want to have employees
working at the shop without a contract because he
feared that the employees might strike at any time, and
also to put pressure on the Union to agree to a contract.
In early December, Harter, at the recommendation of
a mediator, met with Union President Jackie Pierson to
attempt to resolve the union-security issue. Pierson rec-
ommended and Harter accepted a provision whereby
trainees would not become members of the Union and
thereby entitled to contributions for pension, welfare,
and other benefits until the 13th month of their employ-
ment. Thereafter, Harter met with Fay and agreement
was reached on other items, but on January 7, 1982,3
Fay withdrew the proposal made by Pierson and accept-
ed by Harter in early December relating to trainees.
Harter believed that there was no progress in the ne-
gotiations and he decided to hire temporary replace-
ments because he had service work in the shop that
needed to be done in order to defray his expenses in
keeping the plant open, and also to continue his oper-
ations. Beginning January 15, Harter placed advertise-
ments for employees and certain employees were hired
in January.
On March 10, Respondent presented the Union with
revised proposals that were later rejected by the Union.
2 On December 2, the Union confirmed this in a telegram to Respond-
ent
All dates hereafter are in 1982
606 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Thereafter, the parties reached agreement on March 21
when the wages were agreed on, and a letter of intent
was to be signed the next day. Harter then told Fay,
however, that inasmuch as he had work only for the me-
chanics he would reinstate only the mechanics at that
time, and would not take back the parts employee or
driver because he had no work for them . Fay replied
that he had "legal problems" in Respondent 's recalling
only the mechanics . The following day, March 22, Fay
demanded that Harter reinstate at least one parts employ-
ee, one driver, and one painter, and Harter refused. Also
on that day, prospective employees applied for work in
response to an advertisement placed in the previous day's
newspaper. Certain employees were hired . When re-
placements were hired, in January and March, Respond-
ent accepted orders from its customers and operated its
business as in the past.
On March 30, Respondent withdrew its last offer due
to "anger, frustration and exasperation " essentially be-
cause the Union demanded that it reinstate a parts em-
ployee, painter, and driver although it had no work for
them . The last day of picketing was April 1, on which
date the Union filed the instant charge against Respond-
ent.
At the time of the hearing the labor dispute had appar-
ently not yet ended, a renewal contract had not yet been
executed,4 the replacement employees were still working
for Respondent, and the regular unit employees had still
not been returned to work.
IV. CONTENTIONS OF THE PARTIES
The General Counsel essentially argues that Respond-
ent's lockout and hire of temporary replacements during
the lockout was inherently destructive of their Section 7
rights and, principally relying on Inland Trucking Co.,5
asserts that nevertheless Respondent has failed to meet
its burden of establishing a legitimate and substantial jus-
tification for its employment of the replacements.
Respondent argues essentially that in the absence of
any independent evidence of union hostility, it could
lock out its employees and employ others on a tempo-
rary basis to do the work of the locked-out employees in
aid of its bargaining position , as a matter of legal right,
under the decisions of the Supreme Court in American
Ship Building Co. v. NLRB6 and NLRB v. Brown Food
Stores 7
V. DISCUSSION AND ANALYSIS
Respondent 's answer denies that it had locked out its
employees on December 3, 1981. The evidence clearly
establishes that it did. Respondent 's position from the
outset of the negotiations was that if a contract was not
agreed on by its expiration date, it would not permit the
employees to work. Indeed, on December 3, 1981, on
learning that his new proposal had been rejected by the
employees , Harter directed his manager to refuse to
permit the unit employees to work. Thereafter, he denied
4 However, negotiation sessions did take place after April
8 Inland Trucking Co., 179 NLRB 350 (1979)
6 380 U .S. 300 (1965)
7 380 U.S. 278 (1965)
the request of certain unit employees to return to work. I
accordingly find that December 3, 1981, Respondent
locked out its unit employees.8
The Supreme Court in American Ship Building held
that the employer in that case did not violate the Act by
locking out its employees when its only object was to
exert pressure in support of its bargaining position," and
it therefore followed that the use of the lockout did not
carry with it any "necessary implication" that it acted to
discourage union members as such. The Court noted that
it did not appear that the "natural tendency" of the lock-
out was to discourage union membership while serving
no significant employer interest and that union animus
must be proven . It is clear here that Respondent, as testi-
fied by Harter, lawfully locked out sit employees to
bring pressure on the Union to modify its demands and
to bring about a settlement of the dispute on favorable
terms as soon as possible to relieve its financial losses.
Indeed, the lockout was nearly successful inasmuch as
full agreement on the terms of a new contract was
reached on March 21.
In Brown Food Stores, which dealt with the issue of
temporary replacements, the Supreme Court held that in
the absence of a finding of hostile motive, an employer
does not violate the Act by continuing operations with
the use of temporary replacements during an otherwise
lawful lockout. The Court stated that "when the result-
ing harm to employee rights is ... comparatively slight,
and a substantial and legitimate business end is served,
the employers' conduct is prima facie." 110
The complaint alleges, and the General Counsel, citing
Inland Trucking argues , that Respondent's conduct in
locking out and employing temporary replacements for
the locked-out employees amounts to conduct that is "in-
herently destructive" of the employees' Section 7 rights.
The Supreme Court has stated that "if it can reasonably
be concluded that the employer's discriminatory conduct
was 'inherently destructive' of important employee
rights, no proof of an antiunion motivation is needed and
the Board can find an unfair labor practice even if the
employer introduces evidence that the conduct was moti-
vated by business consideration."11 The Board, however,
has consistently rejected such a per se violation, t 2 and
8 "The conditioning of all work upon acceptance of the contract is the
very essence of a lockout " NLRB Y. Golden State Bottling Co., 401 F 2d
454, 457 (9th Cir 1965)
8 Although American Ship Building dealt with a postimpasse lockout,
the Board has applied the principle in that case to preimpasse lockouts.
Darting & Co, 171 NLRB 801 ( 1968), enfd . sub nom . Lane Y. NLRB, 418
F.2d 1208 (D C. Cir. 1969). It is clear that no impasse had occurred here
At the time of the lockout the parties were still negotiating, Respondent
had just presented the Union with a new offer and Respondent admitted
that much progress had been made, including the granting of concessions
at the meetings immediately prior to the lockout
10 Brown Food Stores, supra at 289
11 NLRB v. Great Dane Trailers, 388 U S 26, 34 (1967).
tY Some Board members would apply Inland Trucking and find that
the use of temporary replacements always create a violation of the Act
See the dissenting opinion in Johns-Manville Products Corp, 223 NLRB
1317 (1976); Hess Oil Virgin Islands Corp., 205 NLRB 23 (1973); Ralston
Purina Co., 204 NLRB 366 (1973), Inter-Collegiate Press, 199 NLRB 177
(1972), Ottawa Silica Co., 197 NLRB 449 (1972)
HARTER EQUIPMENT
has expressly refused to follow Inland Trucking.' 3
Rather, it has been the holding of a majority of the
Board that in the absence of a finding of antiunion moti-
vation, an employer does not violate Section 8(a)(3) or
(1) of the Act by hiring temporary replacements to con-
tinue operations during an otherwise lawful lockout. i 4 I
accordingly find and conclude for the reasons to be dis-
cussed infra that Respondent's actions were not inherent-
ly destructive of its employees' Section 7 rights.
Moreover, the General Counsel further contends that
even if Respondent's actions are not deemed to be inher-
ently destructive of its employees' rights, nevertheless, it
has not presented evidence of "legitimate and substan-
tial" business justification for its conduct.15 I am unable
to agree with the General Counsel's argument.
The Board has not required an employer to show that
it had "legitimate and substantial" business justification
for its conduct.16 Rather, such a "balancing test," ap-
plied by the Board and Seventh Circuit in Inland Truck-
ingi7 was endorsed by former Chairman Miller principal-
ly in his concurring opinion in Inter-Collegiate Press, but
has not been accepted by the Board. Indeed, as noted
above, the Board has expressly refused to follow its deci-
sion in Inland Trucking.
Here, Respondent's actions constituted "a measure rea-
sonably adapted to the effectuation of a legitimate busi-
ness end."18
As set forth in Brown Food Store, and followed by the
Board in Ottawa Silica:
[T]he replacements were expressly used for the du-
ration of the labor dispute only; thus, the displaced
employees could not have looked upon the replace-
ments as threatening their jobs. At most, [sic] he
Union could be forced to capitulate and return its
members to work on terms less desirable than
hoped for. The membership, through its control of
union policy, could end the dispute and terminate
the lockout at any time by agreeing to Respondent's
terms and returning to work on a regular basis. It
would appear that union members would have
nothing to gain and much to lose, by quitting the
union. Under all these circumstances, we cannot say
that Respondent's conduct had any great tendency
to discourage union membership. As stated by the
Supreme Court in Brown Food Stores, not only was
the prospect of discouragement of membership
comparatively remote, but the attempt to remain
open for business with the help of temporary re-
placements was a measure reasonably adapted to
the achievement of a legitimate end.
We see nothing in Respondent's conduct which
would warrant a conclusion that it was motivated
13 Ralston Purina Co, 204 NLRB 366 fn 1 (1973), Ottawa Silica Co,
197 NLRB 449, 451 (1972)
14 Ralston Purina Co, supra at fn 1, Hess Oil, supra at fn 2, Inter-
Collegiate Press, supra, and Ottawa Silica, supra
18 Inland Trucking Co, 440 F 2d 562, 564 (7th Cir 1971), cert denied
404 US 858 (1971)
18 See cases cited in fn 14, supra
17 See fn 15, supra
18 Brown Food Store, supra, 380 U S at 289
607
by any antiunion considerations or that it was in-
tended to discourage the exercise of protected em-
ployee rights. We view the lockout here as having
been used solely in support of Respondent's legiti-
mate bargaining position . In such circumstances, it
was not inconsistent with the right to bargain col-
lectively nor with the right to strike. Having con-
cluded that the resulting harm to employee rights
by the lockout and continued operation by use of
temporary replacements was comparatively slight,
and being of the view that there is insufficient evi-
dence of improper motivation we hold that Re-
spondent did not violate Section 8(a)(1) and (3).119
The same reasoning applies to the facts in this case. It
should be noted that although the advertisements for the
replacements did not state that the positions would be
temporary, it was Harter's intention to return the regular
employees to work at the end of the dispute.2 ° Inasmuch
as the dispute had not ended at the time of the hearing,
the temporary employees were still employed by Re-
spondent.21
The General Counsel argues that unlike Brown Food
Stores when the Court noted the union could have ended
the dispute by returning the members to "work on terms
which, while not as desirable as hoped for, were still
better than under the old contract" (emphasis added), here
the terms offered by Respondent were less favorable
than provided for in the prior contract. Although the
General Counsel may be correct, the Board, in Ottawa
Silica, did not rely on that language in Brown Food
Stores, but simply stated, as set forth above, that the
Union could "return its members to work on terms less
desirable than hoped for." Moreover, there was no evi-
dence that Respondent engaged in bad-faith bargaining22
and, indeed, the fact that the prior contract was so gen-
erous to employees, due to Respondent's failure to
demand that a cap be placed on cost-of-living adjust-
ments to wage raises, causing its wage costs to be higher
than certain of its competitors, was the nub of the instant
dispute.
The General Counsel further asserts that another
factor cited in Brown Food Stores as applied by the Board
in Ottawa Silica is inapposite. Thus, it was noted in those
cases as evidence that the employer's conduct did not
have a tendency to discourage membership in the union,
that the union members, through their control of union
policy "could end the dispute and terminate the lockout
at any time by agreeing to the employer's terms and re-
turning to work." Although the General Counsel states
that Respondent's withdrawal of its last offer on March
'9 Ottawa Silica , supra at 451
20 I am aware that there was no evidence that the replacements were
in fact told that their positions were temporary and that they would be
replaced at the conclusion of the dispute
21 It is of no moment that certain unit employees requested reinstate-
ment and were refused, inasmuch as the labor dispute had not ended at
the time they asked to return to work Moreover , there was no evidence
that the Union sought to end the dispute or sign an agreement with Re-
spondent at the time the employees made their request to return
22 Charges alleging that Respondent violated Sec 8(a)(5) of the Act
by its conduct during the bargaining were withdrawn or dismissed See
Sargent-Welch Scientific Co, 208 NLRB 811 (1974)
608 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
30 caused some confusion about what the union member-
ship could agree to then , 23 nevertheless, at the time of
the lockout December 3, 1981 , Respondent was advised
that its new proposal that it submitted to the Union on
December 1 had been rejected by the employees. In ad-
dition, during the course of the lockout on March 10,
Respondent presented a revised proposal to the Union
that was later rejected by it, and on March 21 full agree-
ment was apparently reached on all terms of a new
agreement when a new dispute arose over which em-
ployees would be reinstated . Thus, the union members
could have during the course of the lockout on several
occasions agreed to Respondent 's terms and returned to
work.
Furthermore, it is noted that there is no evidence that
Respondent was motivated by antiunion animus. On the
contrary, the bargaining history between Respondent and
the Union shows that their relations have been amica-
ble-first when Respondent was a member of the em-
ployer association and then when it reached agreement
separately with the Union in its recently expired con-
tract. Thus, the Union gave certain concessions to Re-
spondent in the 1978 contract that it did not afford to the
employer association. Harter, although he bargained hard
in the instant negotiations , nevertheless I am convinced
that he had a sincere desire to reach agreement with the
Union and continue their relationship. Evidence of this is
seen in Respondent's
[c]ontinuing efforts throughout negotiations to expe-
dite bargaining sessions looking toward an early
contract agreement , and the fact that it offered pro-
posals, discussed union proposals , made concessions,
and reached agreement with the Union on certainly
most of the provisions of a collective-bargaining
agreement prior to [the] lockout.24
In addition, the replacements were not hired until
about 6 weeks after the commencement of the lockout
because Respondent reasonably believed that the parties
would reach agreement before too long. Thus, there was
no attempt by Respondent to rush to hire replacements.
This clearly shows a lack of intent by it to discourage
membership in the Union and Harter's good faith in ulti-
mately hiring replacements for the locked-out employees.
As set forth above, the General Counsel argues that
Respondent can show no "legitimate and substantial" jus-
tification for its conduct, and further asserts that Inland
Trucking applies herein. In that case, the trial examiner,
affirmed by the Board, stated that "Respondents assert
no special situation , beyond their normal business oper-
ations, in justification of their conduct," did not face
"any serious or unusual competitive threat from other
firms," and their problems "do not appear to differ mate-
rially from those common to . . . other employees." The
23 Negotiation sessions did continue after the filing of the instant unfair
labor practice charge by the Union on April 1 There was no evidence
that the Union was confused about what it could agree to in order to end
the dispute
24 Stokely- Van Camp, Inc, 186 NLRB 440, 451 (1970), which also in-
volved a "well-founded fear of a disastrous strike," not present here. The
business justifications of Respondent will be discussed, infra
trial examiner , therefore , in finding a violation of the Act
in the use of temporary replacements during a lockout,
required "some more substantial justification for that ad-
ditional , significant discrimination against such employ-
ees inherent in giving their work to others , after shutting
them out from employment." 25 The General Counsel
correctly asserts that this case does not involve the cir-
cumstance present in other cases, such as strike threat,26
the possible deterioration of perishable goods,27 or criti-
cal operating problems.28
I am unable to agree with the General Counsel's
theory . As noted above, Board cases subsequent to
Inland Trucking do not appear to require the employer
to establish such justification , and the Board has express-
ly declined to follow Inland Trucking. Nevertheless,
Harter gave undisputed testimony that Respondent expe-
rienced severe financial difficulties-its net profit drop-
ping from $36,166 in 1979 to $2247 .88 in 1980, and in
1981 it sustained a net loss of $14,516. The Union was
informed of the financial status of Respondent at the first
negotiating session . During the lockout, Respondent's
fixed expenses continued while no work was being per-
formed on machinery already in the shop awaiting serv-
ice. Accordingly, in order to begin operations and meet
its fixed expenses, Respondent hired temporary replace-
ments . As noted above , Respondent did not hire replace-
ments until about 6 weeks after the commencement of
the lockout, during which 6-week period no unit work
was performed. Respondent's use of temporary replace-
ments therefore was "reasonably adapted to achieve le-
gitimate business ends"29-its economic survival and ac-
cordingly its use of such replacements "to continue oper-
ations during an otherwise lawful lockout"30 did not
violate the Act.
Conclusions
It is concluded that there being no proof of antiunion
motivation, Respondent's lockout of employees occurred
in order to put pressure on the Union in support of Re-
spondent 's legitimate bargaining position and that the
lockout therefore was neither inherently destructive of
employee rights nor inherently prejudicial to union inter-
ests nor devoid of significant economic justification.
It is further concluded that there being no proof of an-
tiunion motivation , Respondent 's use of temporary re-
placements during the lockout , although the resulting
tendency to discourage union membership was compara-
25 Inland Trucking, supra at 359
26 Harter testified that he would not let the unit employees work with-
out a contract because, inter alia, he feared that they would strike at any
time . I find that there was no basis for such a fear inasmuch as the Union
never threatened to strike; several times during the negotiations the
Union offered to extend the expiring contract for as much as 6 months
while negotiations continued ; and when the employees rejected Respond-
ent's proposals on December 3, 1981, precipitating the lockout , they of-
fered to continue to work until a new contract was agreed on I also note
that no strike took place during the negotiation of the expired contract in
1978
21 Ralston Purina Puppy Chow, supra
28 Johns-Manville, supra
29 Brown Food Stores, supra
30 Ralston Purina Co, supra; WGN of Colorado, Inc, 199 NLRB 1053
(1972), Inter-Collegiate Press, supra.
HARTER EQUIPMENT 609
tively remote, such use of replacements constituted a On the foregoing findings of fact and conclusion of
measure reasonably adapted to the effectuation of a le- law, I issue the following recommended31
gitimate business end and was lawful.
CONCLUSION OF LAW
Respondent has not violated the Act in any respect.
ORDER
The complaint is dismissed in its entirety.
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