Howard Industries, Inc.

National Labor Relations Board - Administrative Judge Opinions

Jun 13, 2013

15-CA-070830 (N.L.R.B. Jun. 13, 2013)

JD(ATL)–15-13
Laurel, MS
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
HOWARD INDUSTRIES, INC.
and CASES 15–CA–070830
15–CA–081543
INTERNATIONAL BROTHERHOOD 15–CA–085642
OF ELECTRICAL WORKERS,
LOCAL 1317
Caitlin E. Bergo, Esq. and Amiel J. Provosty, Esq.,
for the General Counsel.
Elmer E. White III, Esq. and Josh C. Harrison, Esq.
(The Kullman Firm ), of Birmingham, Alabama,
for the Respondent.
Clarence Larkin, of Laurel, Mississippi,
for the Charging Party.
BENCH DECISION AND CERTIFICATION
Statement of the Case
KELTNER W. LOCKE, Administrative Law Judge. I heard this case on April 3 and 4,
2013, in Ellisville, Mississippi. After the parties rested, I heard oral argument, and on May 3,
2013, issued a bench decision pursuant to Section 102.35(a)(10) of the Board’s Rules and
Regulations, setting forth findings of fact and conclusions of law. In accordance with Section
102.45 of the Rules and Regulations, I certify the accuracy of, and attach hereto as “Appendix
A,” the portion of the transcript containing this decision.1 The Conclusions of Law, Remedy,
Order, and Notice provisions are set forth below.

1 The bench decision appears in uncorrected form at pp. 292 through 316 of the transcript. The final version,
after correction of oral and transcriptional errors, is attached as Appendix A to this Certification.
For clarity, it may be noted that the case caption, above, does not include all of the docket
numbers which have appeared in various pleadings. An April 1, 2013 Order by the Regional Director for
Region 15 severed Case 15–CA–019935. After hearing opened, the parties reached an agreement settling
the allegations raised by the charges in Cases 15–CA–082078 and 15–CA–089002, resulting in an order
approving the settlement agreement, severing these two cases, and remanding them to the Regional Office
for supervision of Respondent’s compliance with the terms of the agreement.
JD(ATL)–15-13
2
ADDITIONAL ANALYSIS
This further analysis should begin with a clarification of a paragraph in the bench
decision. After noting that a union’s waiver of the right to bargain about a particular subject 5
does not also waive the union’s right to receive information relevant to and necessary to perform
its duty as the employees’ representative, the decision continued, “even if an employer has a
right to make a change unilaterally, that right does not affect its duty to provide information.”
Taken by itself, this statement sweeps too broadly.
10
Obviously, if a union has waived the right to bargain about a particular subject, it does
not need information about that same matter for the purpose of bargaining. In this circumstance,
where a union requests information to assist it in negotiating concerning a subject about which it
no longer has the right to bargain, an employer has no duty to provide the information. See
Kennametal, Inc., 358 NLRB No. 68 (June 26, 2012).15
However, in the present case, the Union did not request information about the production
standard to assist it in bargaining about the standard. Rather, it sought this information because
management was using the production standard as a basis for disciplining employees and the
Union represented those employees in grievance proceedings, including arbitrations. The Union 20
has an ongoing right, and duty, to represent employees in such grievance matters and therefore
the requested information remains relevant and necessary for that purpose.
Further, the record leaves no doubt that the requested information concerning the
Respondent’s formulation of performance standards was indeed both relevant and necessary for 25
the Union to represent employees disciplined for failure to meet the standards. See General
Motors Corp., 257 NLRB 1068 (1981) (time studies which management used in setting
production standards were relevant to the union’s processing of grievances arising from
application of those standards).
30
Because the requested information pertained to bargaining unit employees it was
presumptively relevant, but even apart from that presumption, the Union clearly needed it. As
discussed in the bench decision, in a grievance arbitration, the Union might well wish to argue
that Respondent lacked “just cause” to take the disciplinary action. If management had set a
production standard by whim or by pulling numbers out of a hat, the Union might well wish to 35
argue an absence of just cause for the discipline.
Moreover, management changed the standard frequently because the work itself changed
to meet the needs of particular customers. When a customer requested transformers built to a
certain specification, the amount of time necessary to construct the transformer depended on the 40
details of the specification.
Because management set a new production quota based on the particular requirements of
each custom order, the reasonableness of the standard remained a live issue. A production
standard for one job might indeed be reasonable, in which case the Respondent would have just 45
cause to discipline an employee who failed to meet the standard. However, that did not
necessarily mean that another production standard, set for another order at a later time also
JD(ATL)–15-13
3
would satisfy an arbitrator considering a “just cause” issue.
For example, if the Respondent received a rush order, management might be tempted not
to use its regular process for setting the standard but instead might make up an arbitrary quota.
No issue concerning whether the Respondent took such a “short cut” is before me, and I do not 5
suggest that Respondent ever did so. However, the Union has the right to explore this question
when it represents an employee disciplined for failing to meet a standard. Only by receiving
information about how the Respondent set standards could the Union determine whether it
should make a “just cause” argument.
10
The Board has established a 3-stage process for analyzing a claim of confidentiality made
in response to a request for information. Northern Indiana Public Service Co., 347 NLRB 210
(2006) The same analysis applies whether the party requesting the information is the exclusive
bargaining representative of the employees or the employer with which this union has a
bargaining relationship. Here, I will describe the steps as they apply to the parties in this 15
proceeding. In following this framework, I note that the party asserting a confidentiality claim,
in this case the Respondent, bears the burden of proving it. Lasher Service Corp., 332 NLRB
834 (2000).
Respondent has asserted that disclosure of the requested information would require 20
revealing a trade secret. At the first step, I must determine whether the Respondent has a
legitimate and substantial confidentiality interest in the information sought. If the Respondent
fails to make such a showing, the analytical process stops at this first step. However, if the
Respondent does show the existence of such a confidentiality interest, the analysis continues to
the next stage.25
At the second step, the Board must weigh the Respondent’s interest in confidentiality
against the Union’s need for the information. If the balance does not favor confidentiality, the
analysis stops at this point. However, if it does favor confidentiality, the analysis then focuses
on whether the Respondent has sought an accommodation.30
Following this analytical framework, I begin by asking whether the Respondent has a
legitimate and substantial confidentiality interest in keeping the requested information
confidential. That inquiry must begin by asking (if somewhat ungrammatically), “Exactly what
information are we talking about?”35
The record indicates that Respondent was concerned that disclosing records showing the
steps of a manufacturing process and how much time it should take to complete each step would
allow its competitors to reconstruct the process and duplicate it.
40
Although Respondent asserts that its manufacturing process uniquely winds more than
one coil at a time, this information itself does not appear to be a trade secret. Additionally,
Respondent has not established that it otherwise departs from the general practices in the
industry. I cannot conclude that Respondent has some distinctive proprietary process that it is
trying to shield from other manufacturers.45
JD(ATL)–15-13
4
Therefore, I would conclude that Respondent has not demonstrated a legitimate and
substantial interest in keeping some trade secret confidential. However, trade secrets are serious
matters and the protection of them warrants serious consideration. Accordingly, to protect
against the possibility that I am simply being obtuse, I will assume that Respondent has satisfied 5
the first stage of the analysis and will proceed to the second.
At this step, I must weigh the Respondent’s interest in confidentiality against the Union’s
need for the information. Although the Respondent states that its machines wind more than one
coil at a time, it has not contended that the machines use technology unknown in the transformer 10
industry or that bargaining unit employees use a secret method to assemble a transformer which
differs significantly from the methods used by other manufacturers.
Respondent introduced a document called a “bill of labor” which bore the word
“confidential” at the top. Using codes, it listed the steps in building a particular transformer. 15
The record suggests that these codes are used as abbreviations rather than for encryption, and
that engineers familiar with transformer design would be able to understand them.
During the cross-examination of Respondent’s Vice President Jack Delk, the General
Counsel asked whether the information on such a record would allow a competitor to “reverse-20
engineer” the Respondent’s coil-winding machinery. Belk answered, “Well, they would know
how long it took to make a coil based on this, and if they had their own machines and they
thought, Hey, it’s taking me twice as long than [sic] this, then I think I can improve my
machine.”
25
Even if the exact amount of time the Respondent took to manufacture a particular coil is
secret, the record does not establish that disclosure of this information would place Respondent
at a significant competitive disadvantage. Presumably, competitors already are trying to increase
the speed of their machinery.”
30
It is true that the records in question also show the sequence of steps in assembling a
particular transformer. However, bargaining unit employees already are aware of these steps
because they perform them. I conclude that the Respondent’s interest in confidentiality of the
requested information is not particularly high.
35
On the other hand, the Union’s need for this information weighs heavily. Absent this
information, the Union has little or no basis to argue to an arbitrator that the disciplinary action
was not for “just cause” because it was based on a failure to meet an unrealistic standard.
Therefore, I conclude that the Union’s need for the information outweighs the Respondent’s
interest in confidentiality. Accordingly, Respondent has a duty to provide the requested 40
information.
Complaint Paragraph 9 alleges that since about October 14, 2011, Respondent has failed
to provide the Union with sufficient information to bargain over its asserted confidentiality
concerns relating to the coil time report and time study. I do not recommend that the Board find 45
that this allegation constitutes a separate violation of Section 8(a)(5).
JD(ATL)–15-13
5
Under well-established Board precedent, if a party has a duty to furnish requested
relevant information and asserts confidentiality as a justification for noncompliance, it has a duty
to seek an accommodation. National Steel Corp., 335 NLRB 747 (2001). Thus, in the present
case, the Respondent had an obligation to come forward with an offer of accommodation.5
However, the record does not establish that Respondent ever made an offer responsive to
the Union’s request and its stated need for the information. For example, it did not propose that
union officials enter into an agreement to keep the information confidential. It did not suggest an
agreement to limit who could see the requested documents, or to prohibit the making of copies or 10
to require their return. Respondent also did not offer to furnish redacted copies of the
documents.
Respondent did offer to let a union official view the production process to see how
employees wound coils and put transformers together. It should have been obvious to 15
Respondent that such observations of employees at work would not give the Union any
information about how management set the production quota. The patently nonresponsive and
essentially irrelevant nature of this proposed “accommodation” and the absence of any other
proposal leads me to conclude that Respondent has not satisfied its duty to seek an
accommodation.20
Complaint Paragraph 9 focuses on this duty. However, rather than treating the
Respondent’s failure to propose a meaningful accommodation as a separate violation of Section
8(a)(5), I believe it is better to consider it merely as one aspect of Respondent’s overall failure to
furnish the information requested by the Union.25
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I find
that it must be ordered to cease and desist and to take certain affirmative action designed to30
effectuate the policies of the Act, including posting the notice to employees attached hereto as
Appendix B.
Additionally, it must, without any further delay, furnish the Union with the requested
relevant and necessary information, as described in the Complaint.35
CONCLUSIONS OF LAW
1. The Respondent, Howard Industries, Inc., is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.40
2. The Charging Party, International Brotherhood of Electrical Workers, Local 1317,
is a labor organization within the meaning of Section 2(5) of the Act.
3. At all material times, the Charging Party is and has been the exclusive 45
representative, within the meaning of Section 9(a) of the Act, of Respondent’s full-time and
regular part-time production and maintenance employees in a unit appropriate for collective
JD(ATL)–15-13
6
bargaining within the meaning of Section 9(b) of the Act.
4. The Respondent violated Section 8(a)(5) and (1) of the Act by failing and refusing
to furnish to the Charging Party information concerning the setting of production standards, as
described above, which the Charging Party had requested and which was relevant to and
necessary for the representation of bargaining unit employees in the grievance and arbitration 5
process.
5. The aforesaid unfair labor practices are unfair labor practices affecting commerce
within the meaning of Section 2(6) and (7) of the Act.
10
6. The Respondent did not engage in the unfair labor practices alleged in the
consolidated complaint not specifically found herein.
On the findings of fact and conclusions of law herein, and on the entire record in this
case, I issue the following recommended215
ORDER
The Respondent, Howard Industries, Inc., Laurel, Mississippi, its officers, agents,
successors, and assigns, shall20
1. Cease and desist from
(a) Failing and refusing to furnish information requested by the Charging
Party which is relevant to and necessary for the performance of the Charging Party’s duties as 25
exclusive representative of Respondent’s bargaining unit employees.
(b) In any like or related manner restraining or coercing employees in the
exercise of the rights guaranteed them by Section 7 of the Act.
30
2. Take the following affirmative action necessary to effectuate the policies of the
Act.
(a) Furnish to the Charging Party, without further delay, the information
which Charging Party requested pertaining to Respondent’s setting of production standards and 35
quotas for bargaining unit employees, as described herein.
(b) Post at its facility in Laurel, Mississippi, and at all other places where
notices customarily are posted, copies of the attached notice marked “Appendix B.”3 Copies of

2
If no exceptions are filed as provided by Section 102.46 of the Board’s Rules and Regulations, these
findings, conclusions, and recommended Order shall, as provided in Section 102.48 of the Rules, be
adopted by the Board, and all objections to them shall be deemed waived for all purposes.
3
If this Order is enforced by a Judgment of the United States Court of Appeals, the words in the notice
reading “POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD” shall read,
“POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF APPEALS
ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”
JD(ATL)–15-13
7
the notice, on forms provided by the Regional Director for Region 15, after being signed by the
Respondent’s authorized representative, shall be posted by the Respondent immediately upon
receipt and maintained for 60 consecutive days in conspicuous places including all places where
notices to employees customarily are posted. Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced, or covered by any other material. In addition 5
to physical posting of paper notices, notices shall be distributed electronically, such as by email,
posting on an intranet or internet site, and/or other electronic means, if the Respondent
customarily communicates with its employees by such means. J. Picini Flooring, 356 NLRB
No. 9 (2010).
10
(c) Notify the Regional Director in writing within 20 days from the date of
this Order what steps the Respondent has taken to comply.
Dated Washington, D.C. June 13, 2013
15
_________________________________
Keltner W. Locke20
Administrative Law Judge
JD(ATL)–15-13
8
APPENDIX A
BENCH DECISION
5
This decision is issued pursuant to Section 102.35(a)(10) and Section 102.45 of the
Board’s Rules and Regulations. I find that Respondent violated Section 8(a)(5) and (1) of the
Act by failing to furnish information requested by the Union which was relevant to the Union’s
duty to represent bargaining unit employees and necessary for that purpose.
10
Procedural History
This case began on December 15, 2011, when the International Brotherhood of Electrical
Workers, Local Union 1317 (which I will call the Union or the Charging Party) filed and served
an unfair labor practice charge against the Respondent, Howard Industries, Inc. The National 15
Labor Relations Board, Region 15, docketed this charge as Case 15–CA–019935. The Union
amended this charge on February 26, 2011.
On December 15, 2011, the Union filed a charge against Respondent in Case 15–CA–
070830 and served it the next day. The Union amended this charge on January 26, 2012, on 20
February 24, 2012, and again on April 26, 2012.
On May 22, 2012, the Union filed and served a charge against Respondent in Case 15–
CA–081543.
25
On May 30, 2012, the Union filed a charge against Respondent in Case 15–CA–082078
and served it on Respondent the next day. It amended this charge on June 5, 2012.
On July 19, 2012, the Union filed and served a charge against Respondent in Case 15–
CA–085642.30
On September 5, 2012, the Union filed and served a charge against Respondent in Case
15–CA–082078.
On September 11, 2012, the Union filed and served a charge against Respondent in Case 35
15–CA–089002.
On September 27, 2012, the Acting General Counsel of the Board, by the acting Regional
Director for Region 15, issued a consolidated complaint and notice of hearing in Cases 15–CA–
070830, 15–CA–081543 and 15–CA–085642. On October 19, 2012, the General Counsel, by 40
the Acting Regional Director for Region 15, issued an Order Further Consolidating Cases,
consolidated complaint, and notice of hearing, which consolidated Case 15–CA–082078 with the
other three.
On December 17, 2012, the Acting General Counsel, by the Acting Regional Director for 45
Region 15, issued an Order Further Consolidating Cases, consolidated complaint and notice of
JD(ATL)–15-13
9
APPENDIX A
hearing which consolidated Case 15–CA–089001 with the four already-consolidated cases. On
February 5, 2013, the Acting General Counsel, by the Regional Director for Region 15, issued an
amendment to this consolidated complaint and notice of hearing. For brevity, I will refer to this 5
consolidated complaint, as amended, simply as the “complaint.”
On March 19, 2013, the Acting General Counsel, by the Regional Director for Region 15,
issued an Order Severing Case 15–CA–019935 and reissuing complaint in that matter.
10
On March 20, 2013, the Acting General Counsel, by the Regional Director for Region 15,
issued an Order Consolidating Cases in Cases 15–CA–019935, 15–CA–070830, 15–CA–081543,
15–CA–082078, 15–CA–085642, and 15–CA–089002.
On April 1, 2013, the Acting General Counsel, by the Regional Director for Region 15, 15
issued an Order Severing Case 15–CA–019935 and withdrawing complaint in Case 15–CA–
019935.
On April 3, 2013, a hearing opened before me in Ellisville, Mississippi. Thereafter, the
parties reached an agreement which settled the allegations raised by Cases 15–CA–082078 and 20
15–CA–089002. After reviewing that agreement, I concluded that it was consistent with the
provisions and policies of the Act and stated on the record that I would issue an order approving
the settlement agreement and severing these two cases from the consolidated proceeding. Such
an order has issued.
25
Because of the partial settlement agreement, the Acting General Counsel orally amended
the complaint on the record during the hearing. The effects of this amendment will be discussed
below.
The parties presented evidence on April 3 and 4, 2013. After all sides had rested, I 30
adjourned the hearing until May 2, 2013, when it resumed by telephone conference call so that
counsel could present oral argument. After those arguments, I adjourned the hearing until today,
May 3, 2013, and now issue a bench decision.
Admitted Allegations35
Respondent timely answered the complaint. Based on the admissions in that answer, I
find that the Acting General Counsel has proven the allegations raised in complaint paragraphs 1,
2, 3, 4, 5, 6, 7(a), 8(a) and (b). Respondent’s answer also admitted the allegations raised by
complaint subparagraph 8(c), but after the hearing opened, the parties reached an agreement to 40
settle some of the allegations and, because of this settlement, the Acting General Counsel
amended the complaint to delete subparagraph 8(c).
The partial settlement will be discussed further below. However, for clarity, I first will
summarize the findings resulting from the admissions in Respondent’s answer.45
JD(ATL)–15-13
10
APPENDIX A
Specifically, I conclude that the government has proven the filing and service of the 5
unfair labor practice charges, as alleged in complaint paragraph 1.
Additionally, I find that the Acting General Counsel has established that Respondent is an
employer engaged in commerce within the meaning of the Act, that it is subject to the Board’s
jurisdiction and meets the Board’s standards for the exercise of its jurisdiction, as alleged in 10
complaint paragraphs 2, 3, and 4.
Further, I find that at all material times, Lauren Koski was Respondent’s vice president of
human resources and, in that position, was Respondent’s supervisor and agent within the
meaning of Section 2(11) and (13) of the Act, as alleged in complaint paragraph 6.15
Additionally, I find that at all material times, the Union has been and is a labor
organization within the meaning of Section 2(5) of the Act, as alleged in complaint paragraph 5.
Based on Respondent’s answer and on a stipulation received at hearing, I find that at all material
times, the Union has been and is the exclusive bargaining representative, within the meaning of 20
Section 9(a) of the Act, of the following unit of employees, which is an appropriate unit for
collective bargaining within the meaning of Section 9(b) of the Act:
Included: All full-time and regular part-time production and maintenance
employees.25
Excluded: All other employees, guards, and supervisors as defined by the
Act.
Based on the admissions in Respondent’s answer, I find that since about October 14, 30
2011, the Union has requested orally and in writing that Respondent furnish the Union with the
coil time report and the time study report for coil winders, and that since about October 14, 2011,
the Union has requested orally that Respondent furnish the Union with the information necessary
to interpret the coil time report.
35
Oral Amendment to Complaint
As already noted, because of the settlement agreement in Cases 15–CA–082078 and 15–
CA–089002, the Acting General Counsel orally amended the complaint to delete the allegations
covered by the settlement. Specifically, this amendment withdrew from the complaint the 40
allegations in complaint subparagraph 8(c), and modified subparagraph 8(g) by deleting the
reference to subparagraph 8(c).
The amendment withdrew complaint paragraphs 10, 11, and 12 in their entirety. It also
modified complaint paragraph 13 by deleting references to these complaint paragraphs. As so 45
modified, complaint paragraph 13 alleges only that Respondent, by the conduct alleged in
complaint paragraphs 8 and 9, has been failing and refusing to bargain collectively and in good
JD(ATL)–15-13
11
APPENDIX A
faith with the exclusive collective-bargaining representative of its employees in violation of
Section 8(a)(1) and (5) of the Act.5
Facts
Respondent makes a wide variety of electrical transformers, and the manufacturing
process requires winding many different types of coils. For years, management used a set of 10
production standards to gauge the efficiency of the bargaining unit employees who wound the
coils. Respondent’s vice president of human resources testified that at one point, according to
the existing standards, the employees were working at 140 percent efficient.
When Respondent’s managers saw the 140 percent efficiency rating, they decided that 15
the production standards were out of date. Respondent places high importance on using cutting
edge technology, but the existing standards did not take into account the increase in productivity
resulting from this technology but instead specified how quickly an employee should be able to
wind a coil using older machinery. Therefore, management decided to adopt new standards.
20
The standards did more than state the time required for an employee to wind a complete
coil. They also set the expectations for how long it should take to complete various steps in the
coil-winding process. By July 26, 2010 memo to the coil winding employees, management
announced the new standards:
25
In order to continue to meet our customer’s present and future needs and to
remain competitive we have to constantly work towards improving the efficiency
and quality of our work to help achieve these goals the standards for coil winding
have changed. The quota percentage has not changed and will remain at 90%.
You will have time to adjust to these new standards for the next two months. 30
Take this time to prepare thoroughly for these changes. If during that time you
need extra training contact your supervisor and extra training will be made
available. On October 1, 2010, you will be expected to meet quota using the new
standards.
35
By August 3, 2010 letter, the Union requested that Respondent furnish both the old
standards and the new ones. Respondent replied by fax with a one-paragraph letter dated August
17, 2010 which stated:
The standard for winding coils is to do 100% of the daily quota, but currently we 40
refrain from doing discipline until an employee has fallen below 90% average
over a period of time. It has been this way before July 26th and is after July 26th.
Union President Clarence Larkin credibly testified that he did not know what the daily
quota was and had never been told what the daily quota entailed. The next day, Larkin sent 45
Respondent a letter requesting a “copy of the method being used to determine how many coils
JD(ATL)–15-13
12
APPENDIX A
that a coil winder is supposed to wind within a regular work day of eight (8) hours as a regular 5
work day is defined under Article III, Section 3 and 10 of the collective bargaining agreement.”
By September 2, 2010 letter, Human Resources Vice President Koski replied to the
Union’s request. This letter stated as follows:
10
The methods and standards are proprietary information that we secure and can not
have released to anyone as it ensures competitive advantage in the market. These
secrets are trade secrets and must be protected. The Company would be willing to
review our standard of any individual coil and if we find that it is out of line we
will modify it to conform to our standards. Upon determining if it is out of line 15
we will then inform the union or employee that the standard has been changed. If
we determine that it is in line then we will continue to use the standard and the
employee will be expected to produce the coils within the allotted time.
What gives us the right to make changes is the contract between Howard 20
Industries, Inc and the IBEW specifically the management rights article.
Here are some excerpts for your information, “Except as specifically abridged,
delegated, granted, or modified by this Agreement, or any supplementary
agreements that may hereafter be made, all the rights, powers, and authority the 25
Company possessed prior to the signing of this Agreement are retained by the
Company and remain exclusively and without limitation within the Rights of
management, nor does the exercise thereof require any prior discussion or
negotiation with the Union.” It goes on to say, “. . . Such rights of management
include, among other things, but are not necessarily limited to, the right to . . . 30
determine methods of work measurement and to establish standards of
performance. . . .”
I hope that this has answered the questions you have posed as well as clarified our
position on coil production methods. As for the standards the employees will still 35
be expected to make and maintain an average of 90% of their quota after the
adjustment period has ended.
Before continuing with the chronology of events, it is appropriate to make the following
observations about the Respondent’s September 2, 2010 letter and its stated reason for refusing 40
to provide the requested information.
Respondent invoked an exception the Board and courts have made to the general
principle that an employer’s duty to bargain in good faith with the exclusive representative of its
employees includes a duty to furnish, at the union’s request, information relevant to the union’s 45
representation duties and necessary to perform that function. Under certain circumstances, this
JD(ATL)–15-13
13
APPENDIX A
narrow exception relieves an employer from the obligation to furnish such information when it 5
constitutes a “trade secret.”
Typically, when an employer asserts that certain requested information is a trade secret
which need not be disclosed, that information concerns something a competitor would need to
know to duplicate the product or make its manufacture more efficient. For example, a list of an 10
employer’s customers may be exempt from disclosure because this proprietary information
would be of great value to a competitor. Other typical trade secrets pertain to some element of
the manufacturing process itself. However, in this instance, the Union did not request
information about the manufacturing process. Rather, the Union sought information about the
method used to set the production standards.15
Stated another way, the Union did not say to Respondent, “Tell us how you make coils.”
If the Union had made such a request, the Respondent’s claim of trade secret would be consistent
with the typical pattern. Respondent would be saying, in effect, “if we tell you how we make
coils and the information falls into a competitor’s hands, the competitor might be able to make 20
its coils faster or more efficiently or more cheaply and take business away from us.”
Instead of seeking information about making coils, the Union requested information
about another process, the process of setting standards to judge employee performance.
Respondent had made it clear that it expected each bargaining unit employee to wind a specified 25
number of coils in a specified period of time and might well discipline any employee whose
performance fell below 90 percent of this standard. The Union was asking, in effect, “tell us
how you determine the number of coils which you expect an employee to wind in an 8-hour
day.”
30
In other words, the Union sought documents directly relevant to how employees would
be evaluated—a matter of particular concern to the employees’ exclusive bargaining
representative—and of less direct relevance to the manufacturing process. Of course, the trade
secret doctrine does not protect only proprietary information related to manufacturing processes.
If a human resources department had a secret process for doing personnel work and this process 35
gave the employer a competitive advantage, such an employer legitimately could raise a
confidentiality concern.
Moreover, in theory at least, information about the method used to determine when an
employee should be disciplined for unsatisfactory production arguably might reveal proprietary 40
details of the manufacturing process itself. However, I cannot simply assume that to be the case.
Rather, the Respondent bears the burden of demonstrating that the disclosure of information
relevant to the discipline of bargaining unit employees would necessitate the revelation of a trade
secret.
45
JD(ATL)–15-13
14
APPENDIX A
One other point about the Respondent’s September 2, 2010 letter should be noted. The 5
letter asserts that the management rights clause of the collective-bargaining agreement gives
Respondent the “right to make changes” in the production standards applied to employees. The
letter goes on to quote that clause. However, the right to make changes is not at issue here.
The complaint, as amended, does not allege that Respondent made an unlawful unilateral 10
change, but rather alleges that Respondent failed and refused to furnish the Union with requested
information which was relevant to the Union’s performance of its duties as exclusive bargaining
representative and necessary for that purpose. Even assuming that the Union had waived its right
to bargain about a change in working conditions, such a waiver does not extend to the Union’s
statutory right to receive requested relevant and necessary information. Thus, even if an 15
employer has a right to make a change unilaterally, that right does not affect its duty to provide
information.
The complaint doesn’t allege that Respondent breached its duty to furnish requested
information in 2010. However, the Union persisted in requesting information about the 20
production standards and Respondent continued to assert that the requested information was
proprietary and a trade secret.
Respondent has admitted the allegation raised in complaint paragraph 8(a), that since
about October 14, 2011, the Union has requested orally and in writing that Respondent furnish 25
the Union with the coil time report and the time study report for coil winders. Respondent also
has admitted the allegation in complaint paragraph 8(b), that since about October 14, 2011, the
Union has requested orally that Respondent furnish the Union with the information necessary to
interpret the coil time report.
30
Respondent has denied that since about May 10, 2012, the Union has requested in writing
that Respondent furnish the Union with any and all information used to determine if employees
are meeting production standards and any and all policies and/or procedures used by the
Company from 2009 to present to determine if an employee should be disciplined for failure to
meet production standards. However, the May 10, 2012 request is in evidence as a joint exhibit 35
and I find that the government has proven this allegation.
Similarly, the record establishes that since about June 28, 2012, the Union has requested
in writing that Respondent furnish the Union with all information necessary to interpret the coil
time report and time study, and any and all information necessary to interpret the production 40
standards, as alleged in complaint paragraph 8(e), and I so find.
Respondent also denies that the requested information is relevant to and necessary for the
Union to perform its functions as exclusive representative of bargaining unit employees, as
alleged in complaint paragraph 8(f). However, the Union seeks information directly related to 45
the production standards applied to those employees as they perform their jobs. Moreover, the
JD(ATL)–15-13
15
APPENDIX A
record amply documents disciplinary actions taken against employees for failure to meet the 5
standards. Therefore, I conclude both that the information is presumptively relevant and that
Respondent has failed to rebut the presumption of relevance.
Although the Respondent denies that it has failed to furnish the requested information, as
alleged in complaint paragraph 8(g), the record clearly establishes that Respondent has not 10
provided it and continues to assert that it has no duty to do so because the requested information
is proprietary and a trade secret.
One difficulty with Respondent’s trade secret argument is that Respondent cannot readily
identify the assertedly secret information with any particularity. For example, I specifically 15
asked Respondent’s Vice President Koski to identify the trade secret. He gave the following
testimony.
JUDGE LOCKE: Uh-huh. What I’m getting at is I’m trying to get my
mind around the trade secret or proprietary information 20
assertion or defense. I’m trying to figure out exactly what
it is that Howard Industries is afraid will be disclosed.
Like, I guess, a trade secret could be a manufacturing
process, or it could be a secret ingredient in Coca-Cola or
whatever. What is it exactly that you want to protect in this 25
case?
THE WITNESS: Well, it is—first of all, let me just again preface, I
am not an engineer. I’m not an engineer. Now—and I’m
not intimately familiar with the factors. However, you
know, this case is about discipline, and at Coca-Cola, if ten 30
people make Coca-Cola and one of them makes it poor,
then the one that made it poor, there’s a reason. You don’t
need the recipe to know that the Coke didn’t pass the test.
But—so that’s, you know, what we’re looking at here.
Now, as far as what I know that would be proprietary is I 35
know for a fact that because of the fact that we’ve made our
own machines, that they’re different than ours, so the speed
in which they operate is different than ours. I know that
where, you know—I’ve been asked whether a scissors is an
element, how just cutting a piece of paper would be an 40
element. Well, other companies don’t cut six pieces of
paper. We do. We have six. So the time is: How long
does it take to cut the paper? Well, we’re cutting for six
coils. They’re cutting for one. We’re using a certain
millage paper. I don’t know what millage paper they’re 45
using, but I suspect that ours is different, because theirs
is—like I said, if they’re cutting for one, they’re cutting for
JD(ATL)–15-13
16
one. That’s a
APPENDIX A
period of time. We’re cutting for six. It’s different, 5
because you have to factor in the time of picking up those
scissors, cutting the paper, putting down those scissors.
That’s the element. Well, if you’re picking it up and you’re
cutting six pieces of paper while you have it up, you’ve
eliminated the time of picking them up and putting them 10
down six times or five other times.
JUDGE LOCKE: Well, how—I guess what I’m getting at is I’m
trying to see the connection between withholding the
information and the potential that the—some competitor
would learn about a process or a secret or something they 15
otherwise would not know that would give it an advantage.
And the two aren’t connecting in my mind. Perhaps you
can help me.
THE WITNESS: Well, first of all, this case is about effectively, in
my opinion—I’m not a lawyer either. But in my opinion, 20
this case is about effectively representing employees that
have been discharged. I don’t see how giving out our trade
secrets over how long it takes to cut a piece of paper is
going to be beneficial to the union in any way, being that
it’s one of several hundred to thousand elements. Then in 25
the end, the employee, every single day, gets a quota, and
every single day they write down their downtime, and
every single day, they turn that in. And that is entered, and
that goes onto a report that they get every week in which
they can look at it, and every four weeks they can be 30
disciplined for it. But they see the downtime on it. So if
the union has the quota that they were assigned, they have
the downtime that they received, they have the report that
shows the outcome, then they can effectively represent that
employee. Now, they can also look at a person who does 35
well. They don’t have to just request to look at an
efficiency report of somebody that does poorly. Let’s look
at somebody that does well, that does the same job, so now
we can look at it again and we can see that there hasn’t
been a selection of discipline on an employee. We don’t 40
selectively discipline employees. We have an efficiency,
and that’s what this is about, of course. But the other
factors, the downtime, the materials, missing materials,
getting materials, ordering materials, buffing materials, all
these other things, are just factors that add to those times, 45
so if this case is about us handing over what makes Howard
Industries, Howard Industries, because keep in mind the
JD(ATL)–15-13
17
APPENDIX A
coil is the brain of the operation. The rest of what we do is 5
a steel box filled with oil. All right. So there’s a core coil.
So if we’re going to give away, to represent—he’s never
going to be able to use that information in a case. It’s
never going to be, you know, on that day, did you pick up
those scissors, and did you cut them. I mean, if it ever gets 10
to that point, arbitrations will take about a year. It’s going
to come down to the broader strokes, and it always does.
So 14 [sic] and I’ve been in plenty of arbitrations, and I
know that I could defend them on the information I’ve seen
on those forms. But anyway, that’s where I’m at.15
This testimony is too vague to be of much assistance. Another of Respondent’s vice
presidents, Jack Delk, who is an engineer, gave more precise testimony and from that testimony I
conclude that Respondent does not want to disclose its instructions to coil winders regarding how
to assemble a coil because Respondent fears a competitor could use this information to “reverse 20
engineer” Respondent’s manufacturing process.
However, I found this claim to be quite unpersuasive. Even though Delk was an
engineer, he did not explain how a competitor could infer the manufacturing process or the
design of the Respondent’s machinery from the times allotted to complete various steps of the 25
process.
Delk’s testimony boiled down to a claim that if a competitor knew how quickly
Respondent could build coils, it would realize that it had to speed up its own operations. That is
hardly a trade secret so precious it outweighs the Union’s need for the information to represent 30
bargaining unit employees.
If Respondent really wished to protect a trade secret, it would be able to describe it with
some specificity. Of course, I do not suggest that Respondent would have to provide so much
information about the claimed trade secret that it actually disclosed the secret. Such particularity 35
is not necessary to show that a real secret does, in fact, exist and that it would be of value to a
competitor.
However, the frequent repetition of the phrase “trade secret” does not conjure an actual
secret into existence. The words, after all, are not pixie dust which would, when scattered about, 40
make a space magical and beyond the usual principles of logic.
In addition to Respondent’s inability to identify a specific secret which it seeks to protect,
another consideration leads me to reject that claim. The record suggests another reason for
Respondent’s refusal to furnish the requested information to the Union. The evidence is 45
consistent with the conclusion that Respondent seeks to limit the scope of the Union’s arguments
in grievance arbitrations, which would reduce the Union’s likelihood of success.
JD(ATL)–15-13
18
APPENDIX A
On a number of occasions, the Respondent discharged or otherwise disciplined
employees because their performance supposedly fell short of the production standards. The 5
Union wished to argue that management did not have “just cause,” as required by the collective-
bargaining agreement, to take these actions. Indeed, in a September 2, 2010 letter to
Respondent’s human resources vice president, the Union explicitly cited the “just cause”
language as a reason for its information request:
10
I am aware of the management rights clause. I am also aware of the company’s
rights to set standards which employees are responsible for meeting. Please be
advised that standards are work requirements set by management by which
employees will be disciplined for not meeting. Therefore, under the same
management rights clause it states that the company shall “make and enforce 15
reasonable rules for the maintenance of discipline; suspend, discharge or
otherwise discipline employees for just cause.” It is under this proviso that the
union is entitle[d] to copy of any standards which necessitates disciplinary action
against employees to ensure that such standards are “reasonable.”
20
In representing employees in arbitrations, the Union clearly intended to litigate whether
the Respondent’s standards were reasonable. Labor relations professionals experienced in
arbitrations appreciate that arbitrators would be willing to entertain such an argument and at least
some of them would be receptive to it. Arbitrators who hear employment grievances tend to be
quite sensitive to issues involving fairness and the perception of fairness. An arbitrator might 25
well consider the contractual “just cause” standard broad enough to justify inquiry into the basis
for the production standard: Was the standard arbitrary and draconian, or was it grounded in the
amount of production an employee might reasonably be expected to achieve?
If the Union is allowed to raise and litigate such an issue before the arbitrator, it 30
appreciably increases the Union’s likelihood of success. On the other hand, if the only issue is
whether the grievant’s production met the standard set by management, with the fairness of the
standard going unchallenged, the Union is more likely to lose. Thus, Respondent would gain a
significant advantage by assuring that the Union did not make the fairness of the standard itself
an issue during the arbitration. One way to preclude that issue from arising was simply not to 35
provide any information about how Respondent, exercising its authority under the management
rights clause, determined what the standard should be.
The testimony of Respondent’s human resources vice president, Lauren Koski, is
consistent with a conclusion that Respondent believed that the Union merely should litigate 40
whether the grievant met its standard. Rather than furnishing the requested information about
the coil winding standards, Koski advocated that Union President Larkin watch employees
winding coils. According to Koski, the knowledge gained from such experience would allow the
Union to represent employees in grievance proceedings. Thus, Koski testified, in part, as
follows:45
JD(ATL)–15-13
19
APPENDIX A
I think I understand more than Mr. Larkin does, but I would have loved to have
gone over there, too. We would have questioned supervision and employees 5
together about their understanding of how they get coils, how they get assigned
coils, what they learn—or what they wind, how they write down their downtime,
what happens with it. We could have gone through the whole process. That offer
was open then; that offer’s open today. And if that occurred, then, Mr. Larkin
would, in my opinion, be able to effectively learn what he needs to defend a coil 10
winder when they’re terminated.
In this testimony, the human resources vice president admits believing that he knows
more about the coil winding process than the union president, and the testimony also suggests
that he thought he knew better than the union president how to arbitrate a grievance. Koski’s 15
further testimony makes clear how Koski thought the Union should present a grievant’s case to
an arbitrator:
If what I think, in my opinion, would be the things he would need, which are the
daily coil-winding report, that is inclusive of downtime, and then the cumulative, 20
which is a report—the weekly efficiency report is what it’s titled, and on that
report, it shows each week breakdown, and then a four week average, a 12-week
average, and so on, of the individuals’ coil-winding efforts, including the
downtime that was allowed. You would be able to take those forms, look at the
form, see what was assigned to a person, see the downtime, and then you could 25
add those up. You could look at that form and determine what was—what
happened and what didn’t happen with the weekly efficiency report. In addition
to all of that, you could pull a coil winder who is making production and you
could look at theirs, and you could see if theirs was different, but we didn’t get to
explain or do any of these things, because as Mr. Larkin has told me directly, it’s 30
a trick that I want him to go over there and learn coil winding. It is not a trick. I
expected him to go there to learn, so that he could represent people.
Koski’s testimony, considered together with Larkin’s September 2, 2010 letter to
Respondent, leaves little doubt about the nature of the conflict. The Union intended to argue that 35
management’s production standards were unfair, arbitrary, and insufficient to establish “just
cause” for disciplinary action. Respondent, on the other hand, thought the Union should focus
on the grievant’s production statistics, comparing those numbers with management’s standard
and also, perhaps, with the production levels of other employees.
40
Koski made similar statements later in his testimony. However, the Respondent has no
right to control its opponent’s litigation strategy. Respondent certainly has no right to withhold
requested information simply because it did not want the Union to use that information in
grievance arbitrations.
JD(ATL)–15-13
20
APPENDIX A
Moreover, the record establishes that Respondent took no real steps to achieve an 5
accommodation, for example by negotiating a confidentiality agreement or seeking a way to
redact the records. Although it paid lip service to this duty, it took no steps in that direction.
In sum, I conclude that the Acting General Counsel has proven the allegations in the
complaint, and that Respondent violated Section 8(a)(5) and (1) of the Act, as alleged.10
When the transcript of this proceeding has been prepared, I will issue a certification
which attaches as an appendix the portion of the transcript reporting this bench decision. This
certification also will include provisions relating to the findings of fact, conclusions of law,
remedy, order and notice. When that certification is served upon the parties, the time period for 15
filing an appeal will begin to run.
Throughout this proceeding, all counsel have demonstrated the highest levels of
professionalism and civility, which are truly appreciated. The hearing is closed.
20
JD(ATL)–15-13
APPENDIX B
NOTICE TO EMPLOYEES AND MEMBERS
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and abide by this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT interfere with, restrain, or coerce our employees in the exercise of these rights,
guaranteed to them by Section 7 of the National Labor Relations Act.
WE WILL NOT fail and refuse to provide the Union, International Brotherhood of Electrical
Workers, Local 1317, with information it requests which is relevant to its duties as the exclusive
bargaining representative and which is necessary to perform those duties.
WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed them by Section 7 of the Act.
WE WILL furnish to the Union, without further delay, all information it requested concerning
how we set production standards and quotas for our bargaining unit employees.
HOWARD INDUSTRIES, INC.
(Employer)
Dated: _________________ By:____________________________________________
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce
the National Labor Relations Act. It conducts secret-ballot elections to determine whether
employees want union representation and it investigates and remedies unfair labor practices by
employers and unions. To find out more about your rights under the Act and how to file a charge
or election petition, you may speak confidentially to any agent with the Board’s Regional Office
set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
600 South Maestri Street, Hebert Federal Building, 7th Floor, New Orleans, LA 70130-3408
(504-589-6361, House: 9:00 a.m. to 5:30 p.m.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
JD(ATL)–15-13
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (504) 589-6389