Howard Industries, Inc.

National Labor Relations Board - Administrative Judge Opinions

Sep 2, 2016

15-CA-164449 (N.L.R.B. Sep. 2, 2016)

JD–82–16
Laurel MS
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
HOWARD INDUSTRIES, INC.
and Case 15–CA–164449
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL 1317
Matthew Dougherty, Esq.,
for the General Counsel.
Roger Doolittle, Esq.,
for the Charging Party.
Elmer E. White, III, Esq.,
for the Respondent.
DECISION
GEOFFREY CARTER, Administrative Law Judge. The General Counsel asserted in this
case that Howard Industries, Inc. (Respondent) ran afoul of Section 8(a)(5) and (1) of the
National Labor Relations Act (the Act) by unilaterally changing its policy regarding gifts to
employees (including hams during the Christmas season) without first notifying the International
Brotherhood of Electrical Workers, Local 1317 (the Union) and giving the Union an opportunity
to bargain about the policy change. As explained below, I find that Respondent did not violate
the Act because Respondent implemented the policy change after following the procedure set
forth in the collective-bargaining agreement regarding proposing, negotiating and implementing
new or modified policies. Accordingly, I recommend that the complaint be dismissed.
STATEMENT OF THE CASE
This case was submitted to me via joint motion, dated July 5, 2016, to have the case
decided based on an agreed stipulation of facts and exhibits. I granted the parties’ joint motion,
and I also granted the General Counsel’s unopposed July 6, 2016 motion to supplement the
record with formal papers (including, but not limited to, the complaint, answer, and various
unfair labor practice charges).
The Union filed the charge in this case on November 18, 2015, and amended that charge
through filings on January 5, February 25, March 1 and 29, and July 1, 2016. In a complaint that
the General Counsel issued on March 30, 2016, the General Counsel alleged that Respondent
violated Section 8(a)(5) and (1) of the Act by, on or about November 19, 2015, unilaterally
changing its policy regarding which employees would receive hams from Respondent during the
Christmas season, without first notifying the Union and giving the Union an opportunity to
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2
bargain about the policy change.1 Respondent filed a timely answer denying the alleged
violations in the complaint.
On the entire record, and after considering the briefs filed by the General Counsel and
Respondent, I make the following5
FINDINGS OF FACT2
I. JURISDICTION
10
Respondent, a corporation with an office and place of business in Laurel, Mississippi,
engages in the manufacture and nonretail sale of electrical transformers. On an annual basis,
Respondent sells and ships from its Laurel, Mississippi facility goods that are valued in excess of
$50,000 and go directly to locations outside the State of Mississippi. Respondent admits, and I
find, that Respondent is an employer engaged in commerce within the meaning of Section 2(2), 15
(6), and (7) of the Act. Respondent also admits, and I find, that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
20
A. Collective-Bargaining History
Since about 1970, Respondent has recognized the Union as the exclusive collective-
bargaining representative of the following appropriate bargaining unit:
25
All full time and regular part-time production and maintenance employees (excluding all
other employees, guards, and supervisors as defined by the Act).
That recognition has been embodied in a number of successive collective-bargaining agreements,
the most recent of which is effective from October 5, 2015, to October 4, 2018. (GC Exhs. 1(k) 30
(par. 7), 1(m) (par. 7).)
B. Collective-Bargaining Agreement Language concerning
Creating or Changing Workplace Policies and/or Job Performance Standards
35
Section 1 of Article XXI of the collective-bargaining agreement sets forth a procedure
that applies when Respondent wishes to change an existing policy, create a new policy, or
modify job performance standards. Section 1 of Article XXI states, in pertinent part, as follows:
The parties acknowledge that during the negotiations which resulted in this Agreement, 40
each had the unlimited right to make demands and proposals with respect to any subject

1 The General Counsel also alleged that Respondent violated Section 8(a)(5) and (1) of the Act by
unreasonably delaying in responding to an information request that the Union submitted on December 3,
2015. The General Counsel withdrew that complaint allegation on or about July 1, 2016.
2 Although I have included several citations in this decision to highlight particular portions of the
evidentiary record, I emphasize that my findings and conclusions are not based solely on those specific
citations, but rather are based on my review and consideration of the entire record for this case.
JD–82–16
3
or matter not removed by law from the area of collective bargaining. Except as provided
below, they therefore each voluntarily and unqualifiedly waive the right for the life of
this Agreement to bargain collectively with respect to any matter referred to or covered in
this Agreement or with respect to any subject or matter not specifically referred to or
covered by this Agreement.5
However, if the Company wishes to change an existing policy, create a new policy, or
modify job performance standards that affect the bargaining unit, advance written notice
will be provided to the Union via email. If the Union wishes to negotiate over the
changes, it will notify the Company in writing within ten (10) calendar days of receipt of 10
the notification. If the Union does not serve written notification of a desire to negotiate
over the policy or policy change, the Company may implement the change and the Union
waives any arbitration or other legal remedies concerning the creation or modification of
the policy.
15
If timely notification of a desire to bargain is provided by the Union, negotiations shall
commence within (10) calendar days and be completed no later than seven (7) calendar
days after the first negotiating session unless both parties agree to extend the deadline for
negotiations. If the parties fail to reach agreement by the end of the time period set
above, the Company may implement the new policy or policy change. If the Company 20
exercises its right to implement the new policy or policy change, the Union will have the
right to grieve the reasonableness of the policy under the grievance procedure.
(Jt. Exh. D (emphasis in original; paragraph spacing added); see also Jt. Stipulation of Facts (par.
9).)25
C. The December 13, 2006 Christmas Gifts Policy
From December 2006, to November 2015, Respondent maintained and followed a
“Christmas Gifts” policy that was issued on December 13, 2006, and stated as follows:30
Policy: Issuance of Christmas gifts by the company to employees and retired
employees of [Respondent]
Purpose: To [ensure] uniform treatment to all full-time employees of [Respondent]35
Procedure: A committee handles Christmas gifts of hams or [whatever] their choice
might be at Christmas time. They may also contribute cash gifts to
employees who have experienced catastrophic occurrences, as the
committee deems necessary.40
Retired employees with 10 or more years of service who voluntarily retire
from [Respondent] may be eligible for a Christmas gift of a ham if the
[C]ompany deems so on a year to year basis. This is a gift from the
Company and does not imply any obligation by the Company to be 45
continued.
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(Jt. Exh. A; see also Jt. Stipulation of Facts (par. 1) (noting that the December 13, 2006,
Christmas Gifts policy updated an earlier policy from July 1, 2003, which is included in the
record as Jt. Exh. F).)
Up to November 2015, all of Respondent’s employees, including employees who were 5
out on medical leave or workers’ compensation, were eligible to receive certificates from
Respondent for turkeys at Thanksgiving and hams at Christmas.3 The president of the Union
was also eligible to receive certificates from Respondent for a Thanksgiving turkey and a
Christmas ham, even though the president of the Union was not eligible for the benefits that
Respondent provided to employees. The Thanksgiving turkeys and Christmas hams were the 10
only gifts that Respondent provided to employees on an annual basis. (Jt. Stipulation of Facts
(pars. 3–5).)
D. Respondent’s November 6, 2015 email to the Union
15
On November 6, 2015, Respondent’s human resources manager Loren Koski sent an
email to Union president Clarence Larkin. The November 6 email stated as follows:
Subject: 2015-11-2 Company Gifts to Employees
20
[Message]: This redrafted policy is being provided to you pursuant to Article XXI
Section 1 of the CBA.
(Jt. Exh. B1; see also Jt. Stipulation of Facts (par. 6).)
25
Koski’s November 6 email included an attached copy of the “Company Gifts to
Employees” policy that was dated November 2, 2015, and erroneously stated that it superseded a
policy dated December 17, 2014 (the parties stipulate that Respondent did not have a policy that
was issued on December 17, 2014). (Jt. Stipulation of Facts (par. 6.); see also Jt. Exh. C.)
Respondent’s proposed Company Gifts to Employees policy stated as follows:30
Policy: Issuance of gifts by the Company to active employees and certain retired
employees of [Respondent]
Procedure: A Company committee may determine to give gifts to active employees at 35
certain times of the year.
Each year the committee will determine the tenure required to receive a
gift from the Company if a gift is given.
40
The Company will distribute the gift of its choice to all active employees
that have performed work within the month of the gift distribution that
also meet the tenure requirement.

3 Some of the money that Respondent used to purchase the certificates came from payments that
Respondent received from vendors who placed vending machines at Respondent’s facility that employees
used to buy snacks and sodas. (Jt. Stipulation of Facts (pars. 2–3).)
JD–82–16
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Employees away from work on Military Assignments are eligible for the
gift even if they have been away from the company for the month of the
gift distribution, but it is their responsibility to have their family contact
the [C]ompany during the gift giving period.5
Retired employees with 10 or more years of service who voluntarily retire
from [Respondent] may be eligible for a gift if the [C]ompany chooses to
provide gifts.
10
The committee may also contribute cash gifts to active employees who
have experienced catastrophic occurrences on a case by case basis, as the
committee deems necessary.
This is a gift from the Company and does not imply any obligation by the 15
Company to be continued.
(Jt. Exh. C.)
On November 6, the Union received Respondent’s November 6 email and the attached, 20
proposed Company Gifts to Employees policy. The Union did not respond to the November 6
email or request to bargain over the proposed Company Gifts to Employees policy within ten
calendar days of receiving the email and policy. The Union also did not seek clarification of
what Respondent considered to be “gifts to employees” until after November 16, 2015. (Jt.
Stipulation of Facts (pars. 6–7).) 25
E. November 17, 2015 – Respondent Implements
its Company Gifts to Employees Policy
On November 17, 2015, Respondent implemented the Company Gifts to Employees 30
policy. The policy was identical to the proposed policy that Respondent emailed to the Union on
November 6, except that the heading to the policy: stated that the policy was issued on
November 17, 2015; and clarified that the policy superseded the policy dated December 13, 2006
(i.e., the Christmas Gifts policy).4 (Jt. Stipulation of Facts (par. 8); Jt. Exhs. E, H.)
35
On November 19, 2015, the Union learned from employees who were out on workers’
compensation that Respondent had implemented its Company Gifts to Employees policy and
that, as a result, certain employees were no longer eligible for certificates for Thanksgiving
turkeys and Christmas hams. That same day, Larkin emailed Koski to request that Respondent
bargain over the policy change. (Jt. Stipulation of Facts (pars. 10, 12); Jt. Exh. B2; see also Jt. 40
Exh. H (describing some of the eligibility rules for Thanksgiving turkeys and Christmas hams
under the new policy).)

4 Respondent sent a copy of the November 17, 2015 Company Gifts to Employees policy to the
Union on November 30, 2015. (Jt. Stipulation of Facts (par. 14); Jt. Exh. B5.)
JD–82–16
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On or about December 1, 2015, Koski asserted that Respondent implemented the
Company Gifts to Employees policy after the Union did not request bargaining within ten days
of receiving the proposed policy on November 6. (Jt. Stipulation of Facts (par. 15); Jt. Exh. B6.)
APPLICABLE LEGAL STANDARDS5
“Under the unilateral change doctrine, an employer’s duty to bargain under the Act
includes the obligation to refrain from changing its employees’ terms and conditions of
employment without first bargaining to impasse with the employees’ collective-bargaining
representative concerning the contemplated changes.” Lawrence Livermore National Security, 10
LLC, 357 NLRB 203, 205 (2011). The Act prohibits employers from taking unilateral action
regarding mandatory subjects of bargaining such as rates of pay, wages, hours of employment
and other conditions of employment. Garden Grove Hospital & Medical Center, 357 NLRB
653, 653 fn. 4, 657 (2011). Notably, an employer’s regular and longstanding practices that are
neither random nor intermittent become terms and conditions of employment even if those 15
practices are not required by a collective-bargaining agreement. Id; see also Palm Beach Metro
Transportation, LLC, 357 NLRB 180, 183 (2011) (noting that the party asserting the existence of
a past practice bears the burden of proof on the issue, and that the evidence must show that the
practice occurred with such regularity and frequency that employees could reasonably expect the
practice to continue or reoccur on a regular and consistent basis), enfd. 459 Fed. Appx. 874 (11th20
Cir. 2012).
Although an employer and the representative of its employees have a mandatory duty to
bargain with each other in good faith about wages, hours, and other terms and conditions of
employment, the Board has explained that employers do not have to bargain about gifts that they 25
give to their employees. North American Pipe Corp., 347 NLRB 836, 837 (2006), petition for
review denied 546 F.3d 239 (2d Cir. 2008). Items “given to all employees regardless of their
work performance, earnings, seniority, production, or other employment-related factors” are
properly characterized as gifts. Benchmark Industries, 270 NLRB 22, 22 (1984). Conversely,
items that are “so tied to the remuneration which employees receive for their work that [the 30
items] are in fact a part of the remuneration” are properly characterized as wages and are subject
to the mandatory duty to bargain. A sufficient relationship to remuneration may exist if the
payment (i.e., the alleged gift) is tied to various employment-related factors such as work
performance, wages, regularity of the payment, hours worked, seniority and production. North
American Pipe Corp., 347 NLRB at 837.35
Under the clear and unmistakable waiver standard, bargaining partners may
“unequivocally and specifically express their mutual intention to permit unilateral employer
action with respect to a particular employment term, notwithstanding the statutory duty to
bargain that would otherwise apply.” Provena St. Joseph Medical Center, 350 NLRB 808, 810 40
(2007).
JD–82–16
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DISCUSSION AND ANALYSIS
Did Respondent Violate Section 8(a)(5) and (1) of the Act when it Implemented its Company
Gifts to Employees policy on November 17, 2015?5
1. Complaint allegation
The General Counsel’s sole remaining allegation in the complaint is that Respondent
violated Section 8(a)(5) and (1) of the Act by, on or about November 19, 2015, unilaterally 10
changing its policy regarding which employees would receive hams from Respondent during the
Christmas season, without first notifying the Union and giving the Union an opportunity to
bargain about the policy change.
2. Analysis15
In a case where the General Counsel alleges that an employer has made unlawful
unilateral changes to the terms and conditions of employment, Board precedent would normally
require an analysis of issues such as whether the employer made a unilateral change regarding a
mandatory subject of bargaining, and if so, whether the union clearly and unmistakably waived 20
its right to bargain.
This case is different, primarily because in Section 1 of Article XXI of the collective-
bargaining agreement, the parties created and agreed to a specific procedure that applies when
Respondent wishes to change an existing policy, create a new policy, or modify job performance 25
standards. Specifically, when Respondent wishes to take such action, Respondent must give the
Union advance written notice (by email) of the changes. Upon receipt of such notice, the Union
has ten calendar days to notify Respondent in writing that it (the Union) wishes to negotiate over
the proposed changes. If the Union does not provide such notice of its wish to negotiate, then
Respondent may implement the changes and the Union waives any arbitration or other legal 30
remedies concerning the creation or modification of the policy. (Findings of Fact (FOF), Section
II(B).) Notably, the General Counsel does not contend that this portion of the collective-
bargaining agreement, or the waiver contained therein (when applicable), is invalid. Cf. Baptist
Hospital of East Tennessee, 351 NLRB 71, 72 (2003) (finding that the employer was entitled to
unilaterally implement a change in scheduling holiday shift work because the plain language of 35
the contract privileged the change that the employer made, and because the union clearly and
unmistakably waived bargaining over the issue).
The issue in this case, then, is whether Respondent’s decision to implement its Company
Gifts to Employees policy on November 17, 2015, is protected by the collective-bargaining 40
agreement.5 I agree with Respondent that it is. There is no dispute that on November 6, the

5 In their posttrial briefs, the General Counsel and, to a lesser extent, Respondent raised the threshold
question of whether Respondent needed to bargain at all over gifts that it provided to employees. (See
GC Posttrial Br. at 2–4; R. Posttrial Br. at 8.) As an initial thought on that point, I note that it was
Respondent who attempted to initiate bargaining over its Company Gifts to Employees policy by
invoking Section 1 of Article XXI of the collective-bargaining agreement. Thus, to the extent that
Respondent now asserts that it did not need to bargain at all about the policy (based on the theory that the
JD–82–16
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Union received an email from Respondent in which Respondent explicitly stated that it was
providing the “redrafted” Company Gifts to Employees policy to the Union pursuant to Section 1
of Article XXI of the collective-bargaining agreement. That communication alone put the Union
on notice that Respondent was proposing a new or revised policy, and that the Union had ten
calendar days to notify Respondent in writing that it wished to negotiate about the policy. 5
Moreover, the Union also received (as an attachment to the November 6 email) a copy of
Respondent’s proposed Company Gifts to Employees policy, and thus had notice of the nature
and content of Respondent’s proposal.
To be sure, the proposed Company Gifts to Employees policy that Respondent sent to the 10
Union on November 6 incorrectly stated that it superseded a policy dated December 17, 2014 (a
date that does not correspond to any existing policies). I disagree, however, with the General
Counsel’s argument that the incorrect date of the old policy invalidates Respondent’s
November 6 notice to the Union. Even with the incorrect date of the old policy, the Union was
still on notice that Respondent was seeking to change its gift policy under the procedures set 15
forth in the collective-bargaining agreement. To the extent that the incorrect date of the old
policy prompted questions, that should have provided the Union with even more reason to notify
Respondent that it wished to negotiate. The Union, however, did not do so within the ten-day
notification period specified in the collective-bargaining agreement. Thus, once the ten day
notification period passed, the terms of the collective-bargaining agreement permitted 20
Respondent to implement the Company Gifts to Employees policy, and also established that the
Union waived arbitration and any other legal remedies concerning the creation or modification of
the policy.6
In sum, I find that Respondent lawfully implemented its Company Gifts to Employees 25
policy on November 17, 2015, after complying with the notice and bargaining requirements that

policy related to gifts), Respondent asserts a position that is contrary to how it handled the matter in the
first instance. In addition, the Company Gifts to Employees policy explicitly states that, apart from a few
exceptions, Respondent “will distribute the gift of its choice to all active employees that have performed
work within the month of the gift distribution that also meet [a] tenure requirement.” (FOF, Section
II(D).) Those employment-related prerequisites to receiving gifts such as Christmas hams arguably
establish that the Christmas hams are a part of the remuneration that employees receive for their work,
and thus are subject to the mandatory duty to bargain. Compare Benchmark Industries, 270 NLRB at 22
(finding that Christmas hams and dinners that the employer gave to employees were properly
characterized as gifts because the employer gave them regardless of employees’ work performance,
earnings, seniority, production or other employment-related factors). Ultimately, I need not rule
definitively on this issue because I find that Respondent prevails in this case on other grounds.
6 The General Counsel also argued that Respondent did not provide adequate notice of its proposed
policy change because Respondent’s Company Gifts to Employees policy did not explicitly state that it
was related to distributing hams to employees at Christmas. (GC Posttrial Br. at 5.) I find that the lack of
explicit language about Christmas hams does not undermine the validity of Respondent’s November 6
email to the Union to propose the Company Gifts to Employees policy. To the contrary, Section 1 of
Article XXI of the collective-bargaining agreement allows Respondent to propose modifications to
existing policies and also to propose entirely new policies. (FOF, Section II(B).) Thus, even if
Respondent’s proposed Company Gifts to Employees policy contained new, broader or different language
from the December 2006 policy concerning Christmas gifts/hams, Respondent’s proposal was still
covered and protected by the procedure that the parties agreed to for creating or changing company
policies.
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the parties agreed to in Section 1 of Article XXI of the collective-bargaining agreement.
Accordingly, I do not find that Respondent violated Section 8(a)(5) and (1) of the Act as alleged
in the complaint, and I recommend that the complaint be dismissed.
CONCLUSIONS OF LAW5
The General Counsel failed to prove that Respondent violated Section 8(a)(5) and (1) of
the Act by, on November 17, 2015, unilaterally changing its policy regarding which employees
would receive hams from Respondent during the Christmas season, without first notifying the
Union and giving the Union an opportunity to bargain about the policy change.10
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended7
ORDER15
The complaint is dismissed.
Dated, Washington, D.C. September 2, 2016
20
____________________
GEOFFREY CARTER
Administrative Law Judge25

7 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 purposes.