Intermountain Equipment Co.

National Labor Relations Board - Board Decisions

Dec 16, 1955

114 N.L.R.B. 1371 (N.L.R.B. 1955)

INTERMOUNTAIN EQUIPMENT COMPANY 1371
with substantial interests in common with the garage and maintenance
employees. Therefore, in accord with customary Board policy under
which plant clerical employees are excluded from units comprised
of office clerical employees, we shall exclude these employees from the
office clerical unit which the Petitioner seeks to represent. However, as
the Petitioner has indicated its desire to represent these employees,
and inasmuch as they appear to constitute all the unrepresented plant
clericals, we shall accord these employees an opportunity through an
election to express their desire as to whether or not they desire to be
included in the unit of maintenance and garage employees presently
represented by the Petitioner.4
In accordance with the foregoing, we find that all office clerical
employees at the Employer's Manchester, New Hampshire, terminal,
including the assistant paymaster and cashiers, but excluding the pay-
master, collections manager, claims agent, assistant claims agent, ter-
minal manager, assistant terminal manager, office manager, private
secretary, professional employees, and supervisors as defined in the
Act, constitute a unit appropriate for the purposes of collective bar-
gaining within the meaning of Section 9 (b) of the Act.
We shall also establish a voting group comprised of all unrepre-
sented plant clerical employees employed at the Employer's Manches-
ter, New Hampshire, terminal, excluding all other employees and
supervisors as defined in the Act. If a majority of the employees in
the voting group vote for the Petitioner, they will be taken to have
indicated their desire to be included in the unit comprised of the main-
tenance ,and garage employees currently represented by the Petitioner
and the Regional Director shall issue a certification of results of elec-
tion to such effect. If a majority in the voting group vote against the
Petitioner, they will be deemed to have expressed their desire to remain
outside the maintenance and garage employees' unit.
[Text of Direction of Election omitted from publication.]
MEMBERS MURDOCK and BEAN took no part in the consideration
of the above Decision and Direction of Election.
4 Wisconsin Motor Corporation, 100 NLRB 975, 976-977
Intermountain Equipment Company and General Teamsters,
Warehousemen and Helpers Local Union 483. Case No. 19-CA-
948. December 16, 1955
DECISION AND ORDER
On December 8, 1954, Trial Examiner James R. Hemingway issued
his Intermediate Report in the above-entitled proceeding, finding that
-1-14 Ni 1bB No. 214:
1372 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Respondent had engaged in certain unfair labor practices and
recommending that it cease and desist therefrom and take certain
affirmative action, as set forth in the copy of the Intermediate Report
attached hereto. The Trial Examiner further found that the Re-
spondent had not engaged in certain other unfair labor practices
alleged in the complaint and recommended that the complaint be dis-
missed in those respects. Thereafter, the Respondent filed exceptions
to the Intermediate Report together with a supporting brief.' The
General Teamsters, Warehousemen and Helpers Local Union 483,
hereinafter called the Union, filed a brief in support of the Intermedi-
ate Report. The Board has reviewed the rulings of the Trial Ex-
aminer made at the hearing and finds that no prejudicial error was
committed. The rulings are hereby affirmed. The Board has con-
sidered the Intermediate Report, the exceptions and briefs, and the
entire record in the case, and hereby adopts the findings, conclusions,
and recommendations of the Trial Examiner :
For a number of years prior to 1953, the Respondent had regularly
paid year-end bonuses to substantially all of its employees, including
those currently represented by the Union. It had also maintained a
practice of compensating its employees for absences due to sickness.
In June 1953, the Union was certified by the Board as the exclusive
bargaining representative for the warehouse employees and the parties
commenced negotiations for a collective-bargaining agreement cover-
ing those employees. During negotiations the Union proposed, among
other things, contract clauses providing for year-end bonus payments
equivalent to 1 month's wages and guaranteed paid sick leave of 6 days
per year. The Respondent opposed both on the grounds that the pay-
ment of bonuses should remain within the prerogative of management
and that if it would guarantee a fixed amount of sick leave the em-
ployees would take the maximum amount of time allocated for sick-
ness whether or not they were sick. However, as the Union expressed
concern that the Respondent's existing policies on these matters might
be changed absent the contract provisions, the Respondent assured
the Union that it saw nothing in the near future that would justify
changing the sick leave policy and that it would "treat all employees
in [its] employment the same as far as bonuses and sick leave were con-
cerned." Relying upon these representations the Union dropped both
demands. In presenting the contract to the employees for ratification,
the Union restated the Respondent's assurances concerning bonuses
and sick leave. A collective-bargaining agreement was signed in July
1953. Thereafter, without informing the Union, the Respondent im-
mediately instructed the supervisors of the employees represented by
the Union to adhere strictly to the terms of the contract and not to
I The Respondent's request for oral argument is denied as the record and the exceptions
and briefs, in our opinion, adequately present the issues and the positions of the parties
INTERMOUNTAIN EQUIPMENT COMPANY 1373
give anything except that which was guaranteed by the contract; as
a result only time shown as worked by the time clock was paid for and
absences because of sickness were no longer approved for compensa-
tion. Paid sick leave was continued, however, for those employees
not in the unit represented by the Union. Further, in December 1953,
the Respondent distributed the usual year-end bonuses but only to
employees outside the bargaining unit represented by the Union.
We agree with the Trial Examiner's finding that this disparate
treatment concerning bonuses and sick leave had the inherent effect
of discouraging union membership and therefore constituted a viola-
tion of Section 8 (a) (3) and (1) of the Act, even absent independent
evidence of the Respondent's antiunion motivation. As the Supreme
Court in the Radio Officers' case 2 said :
This recognition that specific proof of intent is unnecessary
where employer conduct inherently encourages or discourages
union membership is but an application of the common law rule
that a man is held to intend the foreseeable consequences of his
conduct.
Thus an employer's protestation that he did not intend to en-
courage or discourage must be unavailing where a natural con-
sequence of his action was such encouragement or discouragement.
Concluding that encouragement or discouragement will result, it
is presumed that he intended such consequence. In such circum-
stances intent to encourage [or discourage] is sufficiently estab-
lished.3
In this case, the Respondent assured the Union that it would not
discriminate against the represented employees with respect to bonuses
and sick leave. As a result the Union dropped its demands for con-
tractual provisions covering those items, and passed on to the em-
ployees the Respondent's assurances, as could be expected. After
the contract was signed, however, the Respondent, without explana-
tion of a nondiscriminatory reason for disparate treatment if in fact
there was one, and without discussion with the Union, summarily
deprived the represented employees of bonuses and paid sick leave.
while continuing such benefits for the employees not covered by the
contract. Under the circumstances we conclude that the effect of this)
disparate treatment in view of the Respondent's previous assurances
that all employees would be treated alike was to cause the represented
employees reasonably to believe that the Respondent was punishing
them for their union adherence, a result that necessarily discourages
union membership. The Respondent must be held to have intended
2Radio Officers ' Union etc . v. N. L. R . B, 347 U. S. 17.
If, the discussion of the Radio Officers' case in our dissenting colleague's opinion is
intended to suggest that the Court did not lay this principle down as one of general
application to all discrimination cases, we cannot agree.
1374 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this foreseeable consequence of its conduct irrespective of its actual
motivation.
Our dissenting colleague's assertion that the Respondent's previous
assurances that all employees would be treated alike can be given no
weight in this case absent an inference that they were given as "part
of a scheme" to pave the way for reprisals against union members,
plainly is not a correct statement of law. These statements were part
of the context in which the Employer acted and cannot be ignored in
deciding whether his disparate action had the natural consequence of
discouraging union membership whether the statements were made
in all sincerity or not. Justice Frankfurter's concurring opinion in
the Radio Officers' case makes this clear when he explicitly defines
the scope of the decision in these words :
On the basis of the employer's disparate treatment of his em-
ployees standing alone, or as supplemented by evidence of the
particular circumstances under which the Employer acted, it is
open for the Board to conclude that the conduct of the employer
tends to encourage or discourage union membership, thereby
establishing a violation of the statute. [Emphasis supplied.]
Moreover, we believe that the inference that the Respondent in-
tended to discriminate because of union membership is buttressed by
the circumstances. Thus we note that immediately after signing the
contract the Respondent deprived the represented employees of their
paid sick leave. The immediacy of its action, totally unexplained,
would give rise to an inference that Respondent intended to discrim-
inate because of union membership. While several months elapsed
before the disparath bonus payments, in the light of the prior action on
the sick leave, and the absence again of any explanation to the em-
ployees, the same inference could be drawn. It seems unlikely that an
employer motivated by no antiunion considerations would deprive
only his represented employees of substantial benefits given unrepre-
sented employees and which the former had been led to believe would
be continued, without first explaining to them or their representative
.why the changes were made. The failure to discuss or explain before
acting contrary to its prior statements casts serious doubt on the
bona fides of the Respondent's actions and the purity of the motive
behind them.
For these reasons we find that the Respondent violated Section
S (a) (3) and (1) of the Act by discontinuing bonuses and paid sick
leave for the employees represented by the Union.
ORDER
Upon the entire record in the case, and pursuant to Section 10. (c)
of the National Labor Relations Act, the National Labor Relations
INTERMOUNTAIN EQUIPMENT COMPANY 1375
Board hereby orders that Intermountain Equipment Company, its
officers, agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Discouraging membership in General Teamsters, Warehouse-
men and Helpers Local Union 483, or any other labor organization
of its employees, by discriminating in regard to the terms or condi-
tions of their employment.
(b) In any other manner interfering with, restraining, or coercing
its employees in the exercise of the right to self-organization, to form
labor organizations, to join or assist General Teamsters, Warehouse-
men and Helpers Local Union 483, or any other labor organization, to
bargain collectively through representatives of their own choosing,
and to engage in concerted activities for the purpose of collective bar-
gaining or other mutual aid or protection, or to refrain from any or all
such activities except to the extent that such right may be affected by
an agreement requiring membership in a labor organization as a condi-
tion of employment as authorized in Section 8 (a) (3) of the Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Make whole those employees in the collective-bargaining unit
described in the Intermediate Report, who, during the term of the
1953 contract, suffered a loss as a result of the Respondent's discrim-
ination in withholding bonus and sick leave by paying each of them a
suns of money equivalent to that which he would have been paid,
absent the discrimination against them, in the manner described in
the section entitled "The Remedy," in the Intermediate Report.
(b) Preserve and make available to the Board or its agents, upon
request, all records necessary to analyze the amounts of bonuses and
sick leave payments due under the terms of this Order.
(c) Post at its place of business in Boise, Idaho, copies of the notice
attached to the Intermediate Report marked "Appendix." 4 Copies
of said notice, to be furnished by the Regional Director for the Nine-
teenth Region, shall, after being duly signed by the Respondent's
representative, be posted by it immediately upon receipt thereof and
.maintained by it for a period of sixty (60) consecutive days there-
after in conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall be taken
by the Respondent to insure that said notices are not altered, defaced,,
or covered by any other material.
4 This notice shall be modified by substituting the words "A Decision and Order" for
the words "The Recommendations of a Trial Examiner ." In the event that this Order is
enforced by a decree of a United States Court of Appeals , there shall be substituted for
the words " Pursuant to a Decision and Order " the words "Pursuant to a Decree of the
United States Court of Appeals , Enforcing an Order."
1376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(d) Notify the Regional Director for the Nineteenth Region in
writing, within ten (10) days from the date of this Order, what steps
the Respondent has taken to comply herewith.
IT IS FURTHER HEREBY ORDERED that the complaint insofar as it alleges
that the Respondent violated Section 8 (a) (5) be, and it hereby is, dis-
missed.
CHAIRMAN LEEDOM, dissenting :
I would not find that the Respondent violated Section 8 (a) (3) of
the Act by discontinuing sick leave privileges and year-end bonus
payments to its represented employees while continuing such benefits
for its unrepresented employees.
It is well settled that to establish a violation of Section 8 (a) (3)
of the Act it is necessary to show not only that the employer discrimi-
nated but also that the purpose of the discrimination was to encourage
or discourage union membership or activity. It is true that, as the
Supreme Court stated in the Radio Officers' case,' such purpose may
be inferred, in the absence of any direct evidence of motivation, where
the discrimination is of such a nature that it inherently encourages
or discourages union membership. In that case the Court affirmed
a Board finding that the granting by an employer of certain benefits
to union members while denying them to other employees in the same
bargaining unit and doing the sane work violated Section 8 (a) (3).
The Court held, in effect, that it was so clearly foreseeable that such
contrasting treatment of union and nonunion employees would en-
courage union membership that it was unnecessary to adduce any fur-
ther proof that the employer intended such encouragement. The
Court indicated also that under such circumstances an employer's
disclaimer of any intent to encourage would be unavailing. The Court
made it clear that its decision was limited to the facts before it and
it was not passing on the legality of preferred treatment of union
members where they alone were represented by the union . Thus it
appears that the Radio Officers' case leaves open the question of the
legality of preferred treatment of nonunion members not represented
by any union , which is, in part, the issue here.
From the foregoing it appears that Radio Officers', insofar as here
pertinent, holds merely, in effect, that the Board may infer intent to
encourage or discourage union membership (a) where there is no
countervailing evidence other than the employer's naked disclaimer
of any such intent,' and (b) where the treatment of union employees
5 Radio Ofcers' Union etc. v. N. L. R. B ., 347 U. S 17.
6 This aspect of the majority opinion in Radio Ofcers' is highlighted in Justice
Frankfurter 's concurring opinion in that case , which reads in part:
. concededly a raise given only to union members is prima facie suspect; but the
employer , by introducing other facts may be able to show that the raise was so
patently referrable to other considerations , unrelated to his views on unions . . .
that the Board could not reasonably have concluded that his conduct would encourage
or discourage union membership.
INTERMOUNTAIN EQUIPMENT COMPANY 1377
is obviously more favorable than the treatment of nonunion employees.'
In my opinion, neither of these conditions is present here.
As to (a), there is persuasive evidence, apart from the Respondent's
disclaimer, that it had no antiunion motivation in continuing the
benefits in question for nonunion employees, while denying them to
union employees,. The Respondent, in 1953, executed a contract with
the Union which not only guaranteed substantial new benefits to its
members but also granted the Union the protection of a union-shop
clause. It is difficult to believe that the Respondent would have
required its employees to join the Union if it were seeking to under-
mine it. As against this, the only evidence, other than the alleged
disparate treatment, itself, that has been cited as indicating the
Respondent's antiunion motivation is the fact that the Respondent
made statements at the contract negotiations which tended to create
the impression that it would continue the bonus and sick leave for all
employees and that the Respondent failed to give the Union any ad-
vance notice or explanation of its decision to discontinue those benefits.
It is not clear to me, however, how this conduct of Respondent, even if
we assume it to be equivocal, can overcome the convincing and unequiv-
ocal proof of the Respondent's nonhostility to the Union implicit in the
grant of a union-shop clause. Moreover, any disparity between the
Respondent's statements during negotiations and its conduct there-
after seems to me explainable by the fact that such statements were
made at the outset of the negotiations, before the Union had presented
its demand for a 26-cent an hour wage increase. The Union's insist-
ence on such a large increase may well have caused the Respondent,
for legitimate economic reasons, to alter its plans with regard to con-
tinuing the non contractual benefits. Accordingly, even apart from
the implications of the grant of a union shop here, I would be unwill-
ing to infer that the oral assurances given by the Respondent in the
early stages of the negotiations were part of a scheme to pave the way
for a program of reprisal against the Union and its members. If,
then, they Were not part of such a scheme, it seems to me they are not
entitled to any weight in appraising the Respondent's motivation.
As to (b), it is not established that the benefits conferred by the
Respondent on its unrepresented employees (year-end bonus and paid
sick leave) exceeded in aggregate value the benefits conferred on the
represented employees by the 1953 contract (i. e., a 26-cent hourly
raise, paid holidays and vacations, seniority rights, and premium pay
for overtime). On the basis of a 40-hour week, the wage increase alone
was worth $500 a year to each union member. What little evidence
7 While the Court left open the question whether it would extend the rule of Radio
Officers ' to the case where the union, as in the instant case, represents only its members,
it will be assumed for the purpose of the ensuing discussion that the fact the Union in
the instant case did not represent the nonmember employees involved does not , in itself,
preclude the application of Radio Officers ' hereto.
1378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
there is in the record on this point suggests that the value of the
bonus may have been substantially less than this amount. As to the
relative value of the sick leave privilege, on the one hand, and the
various fringe benefits conferred by the Employer on the organized
employees, the record is silent. In any event, there is no basis in
the record for finding that the treatment of the unorganized employees
was, in the aggregate, obviously more favorable than the treatment of
the organized employees.
It is true, if one considers in isolation the fact that the Respondent
withdrew bonus and Sick leave from the organized employees but not
from the unorganized employees, such conduct standing alone might
warrant finding an obvious disparity in treatment. Viewing the
Respondent's withdrawal of these benefits in the context of all other
relevant circumstances, however, such as what it and the Union
agreed to in the contract, one cannot escape the conclusion that in
essence what the Respondent did was to guarantee to its organized eni-'
ployees a substantial wage increase and other benefits in lieu of the
preexisting bonus and paid sick leave, while continuing the bonus
and sick leave for the unorganized employees who failed to receive
any wage increase or other new fringe benefits. If an employer grants
a 10-cent per hour raise to his organized employees, I should think
he would be free, if not required, to extend the same increase to his
unorganized employees.
By the same token, when an employer grants to his organized em-
ployees alone a wage increase in lieu of an existing bonus he should
be free to continue to pay the bonus to his unorganized employees.
That is essentially what happened here. Finally, where, as here, a
union acquiesces in management's insistence upon omitting from a
contract any reference to existing benefits, I believe that the only
realistic view of the matter is that the Union and its members have
been put upon notice that management is reserving the right to discon-
tinue such benefits.' As no arrangement was made in the contract
for a continuing bonus or sick benefits, it follows that the actual exer'
cise of the right to discontinue something not included in a contract is
a foreseeable. result of the collective-bargaining process. It is a risk
inherent in that process which the Union and its members assumed
when they elected to engage in collective action. For these reasons, I
would not ,find that the Respondent's action in discontinuing the bonus
and sick leave, even if patently disparate, inherently discouraged
union membership.
fi I do not mean here to pass upon the question i) hethei the exercise of such it right
would violate Section 8 (a) (5) of the Act. I am merely attempting to appuuse the
realities of the situation
INTERMOUNTAIN EQUIPMENT COMPANY 1379
Accordingly, I would not find any violation of Section 8 (a) (3) in
the instant case.
MEMBERS RODGERS and BEAN took no part in the consideration of
the above Decision and Order.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon a charge and amended charge filed on January 11 and March 8, 1954,
respectively, the complaint in this case was duly issued on September 7, 1954,
alleging that the Intermountain Equipment Company, herein called the Respondent,
had engaged in and was engaging in unfair labor practices affecting commerce within
the meaning of Section 8 (a) (1), (3), and (5) and Section 2 (6) and (7) of the
National Labor Relations Act, as amended, 61 Stat. 136, herein called the Act.
Copies of the charge, complaint, and notice of hearing were duly served upon the
Respondent and the Charging Party, General Teamsters, Warehousemen and Helpers
Local Union 483, herein called the Union.
According to the complaint, the same conduct violated the three subsections of
Section 8 enumerated above, such conduct taking place when, in the course of col-
lective bargaining with the Union, the Respondent, although refusing to agree to
contract provisions calling for a certain amount of sick leave and an annual
bonus, allegedly had orally agreed that, if any bonuses were paid to employees, all
employees, including those in the bargaining unit, would be paid bonuses without
discrimination and that sick leave would be granted to all employees without dis-
crimination, as in the past, but that since July 27, 1953, the employees in the unit
had lost wages because of sickness for which sick leave was not granted and that,
although the Respondent had on or about December 25, 1953, paid bonuses to sub-
stantially all its employees who were not members of the Union nor in the bar-
gaining unit, it had failed and refused to pay to the employees in the bargaining
unit the customary Christmas bonus paid annually to all its employees. The
Respondent's answer, dated September 5, 1954, conceding jurisdiction, admitted the
payment of bonuses to some of its employees, excluding those in the unit, and ad-
mitted refusal to pay bonuses to employees in the unit, but justified such nonpayment
on the ground that bonuses were a subject of negotiation and, after discussion, were
excluded from the contract resulting from such negotiations. The answer denied
knowledge of loss of wages by employees in the unit as a result of sickness and
denied any promise to pay sick leave as in the past. In an amendment to its answer,
dated September 27, 1954, the Respondent avers that denials of bonus and sick
leave constituted and gave rise to grievances or disputes under the terms of the
1953 contract between the Respondent and the Union but the remedy so provided
had not been utilized and that no complaint should have issued until all remedial
action under the terms of the contract had been exhausted. The amended answer
also asserted that the issue involved had become moot because after the filing
of the charge and before issuance of the complaint the Respondent had met with
the Union and bargained on the subject of bonuses and sick leave and that, as a
result, sick leave had been incorporated into the 1954 contract but bonuses were
excluded from the contract by agreement of both parties. The amendment to the
answer further alleged that the charge was filed in bad faith and without foundation
in fact and that the Nineteenth Regional Office of the National Labor Relations
Board, herein called the Board, had conspired with the Union in using the charge for
the purpose of obtaining undue advantage over the Respondent and for discrediting
it in the eyes of its employees and customers.
Pursuant to notice a hearing was held before me, as the duly designated Trial
Examiner, in Boise, Idaho, on September 28 and 29 and October 1, 1954. The
General Counsel of the Board, the Respondent, and the Union was each represented
by counsel. Full opportunity was afforded all parties to be heard, to examine and
cross-examine witnesses, and to introduce evidence bearing upon the issues. At
the opening of the hearing counsel for the General Counsel of the Board, here-
inafter called General Counsel (including counsel appearing on his behalf), moved
to strike certain portions of the amendment to the answer, including the portion
alleging a conspiracy on the part of the Regional Office of the Board. The motion
was granted as to the latter part and denied as to the balance. At the close of the
387644-56-vol 114 S8
1380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel 's case-in-chief , the Respondent moved to dismiss the entire com-
plaint . The motion was denied . At the close of the hearing the parties argued
orally and were given time in which to file briefs. The General Counsel 's motion to
conform the complaint to the proof in formal matters was granted.
On November 9, 1954, following the close of the hearing , the Respondent filed a
motion to strike the testimony of two witnesses which was offered in rebuttal, a
motion to dismiss the entire complaint , and a brief in support thereof . The first
motion is denied . The testimony alluded to is not the basis of an unfair labor prac-
tice in itself in view of the fact that it went to an incident occurring more than 6
months before the filing of the charge . However, the testimony went to a state of
mind on the Respondent 's part, from which a disposition to discriminate might be
deduced. As such evidence tended to cast doubt on the Respondent 's good faith
previously attested by its own witnesses it is within the scope of rebuttal evidence.
The Respondent 's motion to dismiss the complaint is granted as to the alleged
refusal to bargain and denied as to the balance because of the findings and con-
clusions herein made . A brief was also received from the Union and has been
considered.
From my observation of the witnesses , and upon the entire record in the case, I
make the following:
FINDINGS OF FACT
It is conceded and I find that the Respondent is engaged in commerce within the
meaning of the Act in amount well in excess of the $50,000 direct out-of-State'sales
as well as in excess of the amount of interstate purchases necessary to bring it within
the Board's present formula for asserting jurisdiction. It is also admitted and I find
that the Union is a labor organization within the meaning of the Act.
The Respondent's amendment to its answer raises a question as to whether or not
resort to the grievance procedure under the 1953 collective-bargaining agreement was
a condition precedent to any resort to unfair labor practice proceedings under the
Act. Section 10 (a) of the Act provides that the power of the Board to prevent
unfair labor practices "shall not be affected by any other means of adjustment or
prevention that has been or may be established by agreement, law, or other-
wise. .. . . Therefore, the contention of the Respondent that the complaint should
not have issued is without merit.'
I THE UNFAIR LABOR PRACTICES
A. The refusal to bargain
1. History of bonus and sick leave practices; history of bargaining
The Union was certified by the Board as the collective-bargaining representative
of a unit 2 of the Respondent's employees, roughly the equivalent of the toolroom
employees in the Respondent's Boise establishment, on June 26, 1953. On July 3,
1953, Frank Baldwin, secretary-treasurer of the Union, approached Philip Dufford,
the Respondent's vice president and general manager, relative to a collective-bargain-
ing contract. Thereafter, negotiating meetings were held on July 22 and 2 other, days
before July 28, 1953, when a collective-bargaining agreement, reached on July '27,
was signed. Negotiations were conducted by Baldwin, Roy Buntin, and Alvin
Stewart (the latter two being employees) for the Union and by Dufford and Ray
Fortune for the Respondent. Dufford, being inexperienced in labor relations, had
asked Fortune, who was in charge of labor relations for Morrison-Knudson Con-
struction Company, to assist him. Among the topics bargained about, the subjects
of wages, union shop, bonuses, and sick leave raised the greatest controversy. At
about the third session, the parties discussed the union-shop demand. Dufford at
first was opposed to it, but Fortune told him that Baldwin would never sign a con-
tract without it. Discussion then centered on the period of time within which em-
ployees would have to join the Union The Union asked the minimum time per-
1 N L R B v Newark Morning Ledger Co. 120 F. 2d 262, 206 (C. A. 3) , N. L. R B. v.
Walt Disney Productions, 146 F 2d 44 (C A 9) ; Dant eC Russell, Ltd, 92 NLRB 307
s The unit, concerning the pi opriety of which no question is raised, is "All warehouse
employees of Intermountain Equipment Company, construction machinery, equipment,
and parts, sales, and service plant in Boise, Idaho, including warehousemen, shipping and
receiving clerks, price clerks, countermen, order clerks, deliverymen, inventory clerks,
and waiehouse filing clerks, excluding all managers, assistant manager,. toieman, con-
fidential secretaries, office clerical employees, outside salesmen, professional employees,
gnai(is, and supervisors as defined in the act'
0
INTERMOUNTAIN EQUIPMENT COMPANY 1381
milted by the Act. Dufford sought to extend the compulsory joining date for 6
months after date of hire. Finally the parties compromised on a 60-day period.
The subjects of bonus and sick leave were then discussed.
Although , before 1953, bonus payments had been made for a number of years
extending to years before 1950, no formalized plan had ever been adopted. The
Respondent considered payment of a bonus to individual employees to be a matter
of discretion on the part , of management after consideration of a number of variable
factors. But there is evidence from which it may be found that, in practice, an em-
ployee . who had been employed for a minimum of a year might expect to receive a
bonus equivalent to about 1 month's wages or salary and it was stipulated that for
some years prior to 1953 the Respondent had paid bonuses to substantially all its
employees , including those whose job classifications were included in the unit. I
infer therefore that in practice the size and payment of bonuses were more routine
and in pattern than they were in theory.
Before the certification of the Union, the Respondent had no formalized practice
with respect to compensated absences because of sickness or otherwise . That is to
say, it had never defined what would constitute a good excuse for absence, and it
had set no definite limit on the duration of compensated absence for sickness. Ex-
^cept in unusual situations , the Respondent left the matter of compensation for time
not worked to the department heads on an informal basis, and the evidence indi-
cated considerable lenience in such matters, not only in cases of sickness but also
time off granted for errands and even a day or so off in the hunting season.
In negotiations , the Union was asking a contract provision for the payment of a
,bonus equivalent to I month 's salary and it was asking for 6 days ' paid sick leave
during the year's period . Dufford opposed a contract provision covering either one.
He said that if a definite period of sick leave were given , the employees would take it
as of right whether or not they were sick. Stewart was inclined to agree with
Dufford that there was a danger of abuse. Baldwin said that such was not always
.the case, mentioning 1 company (with whom the Union had a contract ) in which
35 percent of its employees did not use the full period of sick leave allowed. Dufford
asked why the Union wanted sick leave in the contract and asked if they were not
satisfied with the way the Respondent had handled sick leave in the past. Stewart
answered that he had , never taken sick leave but , understood from the other employees
that it had been satisfactory. Dufford said that he was proud of the Respondent's
sick leave record , that one employee had been out for quite some time with polio
and was never docked . Baldwin asked if he would change the policy, and Dufford
replied that he saw nothing in the near future that would justify changing the policy.
The discussion then shifted to the bonus clause . Dufford opposed this on the
.ground , as he put it, that the Respondent had no set policy regarding bonus payments
and that it was strictly the prerogative of management , that the Respondent had no
written bonus arrangement with any employee and had never had any, that if he
agreed to put a bonus provision in the contract he would be committing the
Respondent to paying a bonus whether or not the Respondent showed a profit, and
that the Respondent would then have to pay the employees in the unit a bonus
whether or not it paid one to the other employees . The testimony is understandably
at "variance as to other statements made at this ' meeting by Dufford and Baldwin,
which- in,retrospect assume some degree of importance .' Baldwin quoted Dufford as
saying that in past history the Respondent had paid bonuses to all employees and
that he did not intend to change , that if anybody was paid a bonus they would all
be paid a bonus. Dufford denied having said that if anyone was paid a bonus all
would be paid a bonus, but he testified that , on several occasions during negotiations,
he was asked questions concerning discrimination and had replied that none was
intended . Since the Respondent undoubtedly reserved the right to exclude from
the bonus payment any employees who had worked too short a time or who, by
virtue of serious fault , merited no bonus, I conclude that Dufford did not make
a statement quite so broad as that quoted by Baldwin . At one point , Fortune
commented that his company paid bonuses to monthly paid employees but not to
hourly paid employees. Dufford said that the Respondent had never discriminated
between monthly paid and hourly paid employees with respect to the bonus.
Baldwin expressed some concern that this practice might change and that employees
outside the unit would be paid bonuses while those in the unit would not . Dufford
said that it was not his intent to discriminate . At about this point, as nearly as I
can determine by piecing together the testimony of the several witnesses who testi-
fied concerning it, Fortune interposed by saying to Baldwin , "You heard the man.
Now the monkey is on your back ." Baldwin told Fortune to be quiet or he would
come over to his place and organize his employees . After a few other irrelevant
remarks, Fortune, turning to Dufford, commented with respect to Baldwin 's state-
1382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment about organizing the employees of Morrison-Knudson that, whatever Baldwin
said he would do, he would do; and then, addressing Baldwin, Fortune said that
the same went for Dufford and that whatever Dufford said he would do was exactly
what he would do. This was taken by Baldwin to mean that Dufford' s assurance
about nondiscrimination could be relied on and that the Respondent would continue
to handle sick leave and bonus payments without a contract provision in the same
manner as in the past. Baldwin called Buntin and Stewart out of the room for a
conference, and asked them if they had always received a bonus and if they should
take Dufford's word about the policy remaining the same. Buntin , who had been
with-the Respondent for nearly 5 years, said that he had always received a bonus and
that as far as he knew, Dufford's word was good. Stewart concurred. Expecting
a continuance of past practices with respect to bonuses and sick leave, the union
negotiators returned to the meeting room, and, without again mentioning the subject
of bonuses and sick leave, began negotiating on wages.
After the parties had reached agreement on the terms of the contract on July 27,
the union committee tendered the agreement to the employees in the unit with an
explanation of what had been said about bonuses and sick leave. The employees
approved the contract.
Shortly after the Union's certification by the Board, the Respondent had installed
a time clock in the parts department for the employees in the unit.3 Following the
execution of the collective- bargaining agreement in July 1953, the Respondent in-
structed the supervisors in the parts department that they should adhere strictly to
the contract and not do anything or give anyhing except what was in the contract.
As a result, only time shown as worked by the clock was paid for and absences
because of sickness were no longer approved for compensation. No instructions re-
garding sick leave were given to supervisors of other departments. I infer, therefore,
that the practice of giving sick leave continued except in the department covered by
the union contract.
About Christmas 1953, the Respondent paid a bonus to substantially all its em-
ployees other than those in the unit. The latter were paid no bonus. The decision
to pay no bonus to those in the unit was reached in December by Dufford in consul-
tation with Respondent's president, Swenson. The reason for such decision, Dufford
testified, was "because we had a contract of employment with those people by which
we guaranteed and had to live by the contract, which bound us to certain terms with
these people, such specific binding agreement not existing with the other people,
and by the terms of which contract, we could incur considerable expense Also due
to the fact that there was a possibility that payment of a bonus could, under certain
sets of circumstances become a violation of our contract or that unfair labor
charges could be filed against us for, conceivably could be filed for payment of a
bonus "
After the bonus was paid to employees outside the unit, the Union had two meetings
with the Respondent in which that subject, along with a matter of hours of work,
was discussed, and on January 4, 1954, Baldwin telephoned Dufford to say that he
understood "some of the boys . . had been docked for the sick leave," and he
asked Duftord if the Respondent was going to pay it. According to Baldwin,
Dufford "still took the position that was the Company's prerogative and that ended
the conversation." The 1953 bonus was never paid to employees in the bargaining
unit. When the parties negotiated a new contract in 1954, a provision for sick leave,
but not for bonus, was agreed to.
2. Arguments and conclusions
The General Counsel contends that, during negotiations for the 1953 contract, the
parties made a collateral oral contract which was not inconsistent with the terms,
of the written contract and that the alleged refusal to bargain was the Respondent's
repudiation of the collateral agreement and the alleged discrimination was the
disparate treatment of employees in the unit and outside the unit with respect to
bonus and sick leave The General Counsel does not specifically argue that the
refusal to bargain consisted of a unilateral change in working conditions without
prior notice to the Union and opportunity to bargain thereon, but the conclusory
allegations of the complaint classify the Respondent's withholding of the bonus to
those in the unit, while granting,it.to those outside the unit, as violations of Section
11
3 This was not alleged or proved as an unfair labor practice, whether because the
General Counsel believed no discrimination was committed thereby or because the event
may have taken place more than 6 months before the (late of the filing of the charge is
not certain
INTERMOUNTAIN EQUIPMENT COMPANY 1383
'8 (a) (1), (3), and (5). Presumably, therefore, the General Counsel is relying
,on two theories of refusal to bargain as well as on the theory of discrimination and
interference.
The Respondent denies the existence of a collateral agreement, and in its answer
alleges that the issue of bonus and sick leave has become moot because, since the
filing of the charge (January 11, 1954) and amended charge (March 8, 1954) and
before the issuance of the complaint (September 7, 1954), the Respondent and the
Union met and bargained on the said issues and as a result incorporated sick leave
in the contract dated July 27, 1954, and excluded bonuses therefrom. By such
bargaining, the Respondent alleges that it has rectified any violation of the Act to
the equivalence of any affirmative action the 'Board might require under a remedial
order in this case. It is not clear whether the bargaining which took place between
the parties in the period following the filing of the charge and amended charge and
before the issuance of the complaint was limited to negotiating for the 1954 contract
or whether it also involved negotiations respecting the payment of a 1953 bonus and
,of sick leave during the terms of the 1953 contract. If it was limited to the 1954
contract, the issue obviously is not moot From other statements made in the
Respondent's answer, as well as from evidence offered, I infer that the bargaining
that took place between the date of the filing of the charge and the execution of
the 1954 contract was confined to that contiact. That bargaining looked only to
the future, therefore, and not to rectifying any possible past unfair labor practices.
The subject of bonuses was mentioned in two meetings toward the end of the year
1953, but evidence is lacking as to what was said there about the 1953 bonus. It is
not clear whether what was said in those two meetings was just a protest by the
Union with a rejection thereof by the Respondent or whether the parties explored
the subject fully from a standpoint of bargaining. In any event, if any unfair labor
practices were committed by the Respondent, I conclude and find that they are not
moot
The first issue to be disposed of is that of a refusal to bargain, whether on the
theory of a repudiated collateral oral agreement or on the theory of making unilateral
,changes in existing conditions without consulting about them with the Union. The
Respondent not only denies the existence of a collateral oral agreement but takes
the position that legally there could not be one made in the negotiation for a written
contract because the understandings reached by the parties orally merge in the
writing as the consummation thereof. It is often stated as a rule of law that in the
absence of mistake or fraud a written contract merges all prior and contemporaneous
negotiations in reference to the same subject, and the whole engagement of the
parties and the extent and manner of their undertaking are embraced in the writing.4
But rules invariably have their exceptions. And an exception to this rule is that
the parol evidence rule does not apply to a purely collateral contract distinct from
and independent of the written agreement although it may relate to the same general
subject matter and grows out of the same transaction, if it is not inconsistent with
-the writing.5 In the case at hand the writing did not provide that there should be
no sick leave or bonus so there would be no inconsistency between the writing and
a collateral oral agreement. But the formation of such a collateral oral agreement
would be subject to the law of formation of contracts generally. A clear meeting of
the minds would be necessary. and the undertaking would have to be of the kind
.that the law recognizes as obligatory. I am not satisfied that such was the case here.
From something that Dufford said, Baldwin got the impression that, although the
Respondent would not commit itself to the definite payment of a bonus, it would not
discriminate against employees in the unit if a bonus should be paid to employees
at all. If the Respondent had been willing to commit itself to such an undertaking,
that undertaking could, of course, have been given expression in the written contract
The failure of the union negotiators to suggest such a clause in the contract is a
factor that must be considered in determining the probabilities of the existence of a
collateral agreement. The parties may, of course, have been weighing the matter not
so much of including such a provision in the contract as of leaving the subjects of
bonus and sick leave under the Respondent's informal discretionary handling as in
the past, with the understanding that there would be no discrimination in the exercise
of the Respondent's discretion But if the parties intended a collateral contractual
4 Van Ness v Washington, 4 Pet (U S ) 232 ; Brawley v. United States, 96 U. S 168 ;
Hawkins v United States, 96 U S 689; Trego v Arave, 20 Idaho 38, 116 P. 119; Rosen
v Tackett, 222 Mich 673, 193 N W 192
"Booth v Booth & B Commercial School, 120 Conn 221, 180 A 278, Mitchell v Lath,
247 N. Y. 377, 248 N Y. 526, 160 N E 646, 162 N. E. 511; Roof v Jerd, 102 Vt 129,
146 A. 250. See A. L. I. Restatement, Contracts, Vol. I, See' 229.
1384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
commitment of this sort, it would be expected that the parties would attempt to
nail the matter down. In order to do so, the Union would, in all probability, upon
returning from the private conference across the hall between Baldwin, Buntin, and
Stewart, have announced to Dufford: "All right We agree not to require a pro-
vision on bonuses or sick leave in the contract in consideration of your promise that
you will hereafter treat the employees in the unit in all respects as you treat those
outside the unit in regard to these matters " This would have been specific notice
to Dufford that the Union intended a collateral agreement and it would have required
Dufford squarely to agree or disagree. The failure of the union representatives
to mention the subject again after returning to the conference room is an element
that derogates from the force of the General Counsel's contention that a collateral
agreement existed. I am inclined to the opinion that the Union's attitude was one
of reliance on a gentlemen's agreement, that is, on the good faith of the Respondent
rather than on a contractual commitment. I find, therefore, that no collateral oral'
agreement, in the legally enforceable sense, was in fact intended or made.
The General Counsel's first contention in support of his allegation of a refusal
to bargain in violation of Section 8 (a) (5) of the Act-that a repudiation of a
previously made collective-bargaining agreement, in itself, is a refusal to bargain
in violation of the Act-will not need to be passed on here, as I have found that
no collateral oral contract was in fact made.6 But his second apparent contention,
that the unilateral termination of the practice of giving sick leave and bonuses con-
stituted a violation of that section of the Act, requires examination. If the dis-
criminatory aspect of the change is, for the moment, removed from consideration,
I see no basis for a contention that the unilateral change was a refusal to bargain
Suppose, for the sake of argument, that the Respondent had discontinued its sick
leave and bonus practices as to all employees. This would eliminate the appearance
of discrimination. Under the remaining facts of this case would such a change
have constituted a refusal to bargain? I think not, because after negotiations on
the subject, in which the Respondent had taken the position that bonuses were a
matter of management prerogative and that the Respondent did not wish to be
bound to pay bonuses whether or not profits warranted it, the Union appeared con-
tent to leave those matters under the unilateral administration of the Respondent 7
It was contemplated, therefore, that the Respondent would not need to propose
changes in bonuses or sick leave for bargaining before acting unilaterally 8 Fur-
thermore, such evidence as there is indicates that the Union was given an opportunity
to negotiate on the matter after the bonus was given. Hence, I find that the Re-
spondent did not refuse to bargain with the Union within the meaning of Section
8 (a) (5) of the Act.
There remains the question of whether or not the act of the Respondent in ex-
cluding the employees in the bargaining unit from participation in the bonus pay-
ments and sick leave benefits, although affording them to substantially all other em-
ployees, constituted a discrimination within the meaning of Section 8 (a) (3) of
the Act. In the cases where unilateral changes have been dealt with under charges
of violation of Section 8 (a) (1), (3), and (5), the discussion has sometimes cen-
tered on the question of refusal to bargain, and the decision on the matter of dis-
crimination seems to have ridden in on the 8 (a) (5) disposition, whichever way
that went. For example, in the case of Armstrong Cork Co. v. N. L. R. B., 211
F. 2d 843 (C. A. 5), the court enforced the Board's order based on findings of
8 (a) (1), (3), and (5) violations in the withholding of a general wage increase
from union-represented employees while granting it to other employees (103 NLRB
133), while in the case of N. L. R. B. v. Nash-Finch Company, 211 F. 2d 622 (C. A.
8), the court denied enforcement of the Board's order based on findings of like
violations for the discontinuance of life insurance, hospitalization, and Christmas
bonus (103 NLRB 1695). In neither of the foregoing cases did the court attempt
to separate the discrimination aspect of the case from the refusal-to-bargain aspect.
In fact, neither court appears to have given the question of discrimination any sepa-
rate consideration at all. Yet, it appears to me that a separation of the two aspects
of such cases is especially essential, both in respect to the existence of an unfair
6Although the Board has not, so far as I am aware , passed on such a contention on
facts such as those involved here, it has frequently stated that it will not police the
terms of collective-bargaining agreements.
4 See The Borden Company, Maricopa Diaseion, 110 NLRB 802.
$ In this respect, the case differs from Armstrong Cork Co. v. N. L. R B., 211 F. 2d
843 (C A. 5), and other cases where unilateral action was held to constitute a refusal
to bargain.
INTERMOUNTAIN EQUIPMENT COMPANY 1385
labor practice and in respect to the appropriateness of a remedy . For a refusal to
bargain, the appropriate remedy is not that a respondent shall rectify a discrimination
by giving benefits withheld . The injunctive and affirmative orders in a case of
refusal to bargain are designed only to require the performance of the statutory
duty to bargain . Where the Board 's order is designed to equalize disparate treat-
ment of employees , such remedy is appropriate to the cases in which a violation of
Section 8 (a) (3) rather than 8 (a) (5) is found . In fact, in the absence of a
finding of discrimination , I can think of no case where a refusal to bargain could
appropriately be remedied by an order to give monetary benefits to one group of
employees from which group alone they had been withheld. Where the Board
gives such remedy, it is because it finds an unlawful discrimination without regard
to whether or not a refusal to bargain is involved in the case.9
The failure of the court in the Nash -Finch case to discuss the matter of discrim-
ination at all detracts from its force as a precedent in this case , because the absence
of discussion of discrimination suggests an oversight Perhaps the court would have
reached the same conclusion on the facts of that case 'even if it fully considered
the question of discrimination , because it was of the opinion that a change in the
language of the proposed maintenance -of-standards clause was made with a design to
eliminate the fringe benefits previously enjoyed.10 On such an interpretation of the
negotiations , a claim to discriminatory treatment might be ungrounded . If a bar-
gaining representative , seeking a contract provision for the payment of a bonus
or other benefit , is told by the employer with whom it is bargaining , "No, we will
not give it to you-what we have otherwise said we would give the employees rep-
resented by you is the sum total of what we will give them, even though we reserve the
right to give additional benefits to employees outside the collective bargaining unit,"
and if the bargaining representative settles on that basis , it is charged with notice
of the possibility of disparate treatment-notice that the employees whom it repre-
sents may not be given such additional benefits as may be given to unrepresented
employees . Any discrimination that follows would not, in my opinion, be unlawful
discrimination because the right to complain of discrimination was consciously bar-
gained away . Although the parties in the Nash-Finch case did not put their in-
tentions into such express language , the court apparently concluded that the effect
was the same as if they had. The difference of opinion between the Board and the
court in that case is not as to what result would follow in a case where the intent of
the parties is expressed as I have put it above in the hypothetical case but apparently
stems from the interpretation of the words and acts of the parties . The Board
interpreted them as showing no intent to bargain away existing conditions, while
the court apparently interpreted them as showing such intent Indeed , from the
language used by the court, one receives the impression that the court considered
intent to be of no consequence at all, for it recites, "Where parties to a contract
have deliberately and voluntarily put their engagement in writing in such terms as
import a legal obligation without uncertainty as to the object or extent of such en-
gagement , it is conclusively presumed that the entire engagement of the parties and
the extent and manner of their undertaking have been reduced to writing . Ford v.
Luria Steel & Trading Corp., 8 Cir., 192 F. 2d 880, 884 and cases cited " By this
language, actual intent is rendered nugatory in the face of a conclusive presumption.
The legal generality quoted is not precisely apposite , however . It would be, un-
doubtedly , if one of the parties were contending that the contract embraced an un-
dertaking not expressed in the final writing . But that was not the case . The union
in the Nash -Finch case was not suing for breach of contract , contending that addi-
tional benefits beyond those shown in the writing were contracted for. The contention
9 Jersey Coast News Company, Inc., 105 NLRB 430; Newark Newsdealers Supply
Company, 94 NLRB 1667 Gaynor News Company, Ino , 93 NLRB 299; Rockaway News
Supply Company, Inc, 94 NLRB 1056; Winona Textile Mills, Inc., 68 NLRB 702; Sullivan
Dry Dock d Repair Corporation 67 NLRB 627, Chicago Steel Foundry Company, 49
NLRB 100.
10 The Union at an early stage of the negotiations in the instant case proposed a
clause that employees would retain the special privileges previously enjoyed. This was
apparently rejected and eliminated . The Respondent suggests that "special privileges"
included sick leave and bonus , and thus apparently seeks to make the facts here more
analogous to those in the Nash-Finch case . But the bonus and sick leave clauses were
'separately proposed in the negotiations in addition to the special privileges clause
Stewait te^,tiiied that the special privileges clause K as intended to cover such subjects
as coffee breaks I conclude that the parties understood that sick leave and bonuses
were not intended to be covered by the special privileges clause.
1386 DECISIONS OF, NATIONAL LABOR RELATIONS BOARD
there advanced by the General Counsel and accepted by the Board was that the
several fringe benefits were not contracted for. So the question was not whether
or not the writing expressed the full contract. It was whether the parties intended
to leave the subject of fringe benefits open for future negotiations, or intended that
further consideration of them should be foreclosed. The court may have been
justified in attributing the latter intent to the parties on the facts of the case; an
inference of such intent was not unreasonable. But resort to a conclusive presump-
tion in the Nash-Finch case was not needed and I do not read the decision there
as a complete disregard of intention Certainly, if the parties, after negotiating on
a fringe benefit, decide that further study is needed before any agreement can be
reached thereon and thus decide to postpone further negotiation on that subject for
60 days to permit such study, meanwhile executing a collective-bargaining agree-
ment covering everything agreed to up to that point, the execution of the contract
should not foreclose further negotiations. This is because the intent of the parties
discloses otherwise, and no conclusive presumption should be drawn, contrary to the
intentions of the parties, that the execution of the written contract sealed off nego-
tiations on the deferred subiect.
The Board, of necessity, recognizes the importance of the apparent intent of the
parties when it distinguishes between those cases where a subject of bargaining is
omitted from a written agreement on the one hand after it has been a topic of negotia-
tion and on the other where it has not even been considered for bargaining.ii In
the first, the failure to press for the omitted subject in my opinion justifies an inference
that the party making the demand originally is content to dispense with any contrac-
tual obligation in view of the other concessions made (the problem of interpreting
Section 8 (d) of the Act wholly aside). In the second, no inference of such an
intent can be drawn The natural inference there would be that neither party even
thought of the matter.
Whether or not the court in the Nash-Finch case reached a correct conclusion, I
am of the opinion that the court did not distinguish between a contractual obligation
to furnish something and a statutory obligation to bargain about that subject. Also
in the court's opinion is an apparent intimation that collective-bargaining agreements
are to be tested by the rules governing contracts generally so that if the parties fail to
negotiate and contract concerning a negotiable subject that subject is excluded as a
negotiable subject for the term of the contract. That result might follow where
strangers or parties having no existing relationship enter into a contract. Neither
may compel the other to consider additional subjects for contracting. But a collective-
bargaining agreement is one reached by parties between whom there is an existing and
continuing relationship which constantly gives rise to bargainable matters. In the
interest of industrial peace, Congress has, by the Act, imposed a duty to bargain where
it would not otherwise exist It has also proscribed discrimination to encourage or
discourage labor organizations. Contracting strangers are unfettered in either way.
The same legal principles cannot, therefore, be applied to both types of contracting
parties.
Because the Union, during negotiations , acceded to the Respondent's retention
of control. over the bonus and excused absence for sickness, it presumably waived
those subjects as bargainable items for the duration of the 1953 contract. Does it
follow, then, that the Respondent's withholding of the bonus and sick leave from em-
ployees in the bargaining unit is not only no refusal to bargain but also no discrim-
ination? If the parties had expressly agreed that bonus and sick leave were to be
no longer given, any suggestion of unlawful discrimination thereafter arising from
disparate treatment of employees in the unit from those outside in respect to"those
matters would be successfully dispelled. It is the Respondent's position that the
same result should follow on the facts of this case. Dufford gave as reasons for
withholding the bonus from the employees in the bargaining unit, first, that by the
collective-bargaining contract the Respondent "could incur considerable expense"
and, second, that if a bonus were paid unilaterally an unfair labor practice charge
"conceivably could be filed."
r, The first ,ground was apparently intended by, Dufford to carry with it the idea that
employees in the unit were given unequal advantage by the contract and that this
was equalized by giving bonuses to employees outside the unit. In any event, the
Respondent had Dufford testify to the wage rate increase resulting from the con-
1i The Jacobs Manufacturing Company, 94 NLRB 1214, where the Board indicates that
the parties by expressed intent may foreclose bargaining during the terms of the contract
by stating therein that they intend the contract to be complete and to foreclose further
bargaining whether or not subjects of bargaining were raised in negotiations See Phelps
Dodge, Copper -Pioducis Corpoiation. 96 NLRB 9S2
INTERMOUNTAIN EQUIPMENT COMPANY 1387
tract which, it is argued, was something the employees outside the unit did not get.
If no more had been said in the bargaining conferences about bonus and sick leave
than was said about fringe benefits in the Nash-Finch case, the Respondent's argu-
ment would have some force, because in the absence of expressed understandings,
an understanding that the bonus might be distributed unequally in order to balance
any unequal advantages acquired under the contract might be presumed. For two
reasons, however, I am not moved by the argument. In the first place, it assumes
that the contract advantages were not otherwise balanced-a fact not well established.
In fact, the evidence leads me to deduce that other compensating factors were present.
Although the employees in the unit got an increase in their hourly rate, the Re-
spondent terminated the 7 hours a week over 40 for which overtime pay at the rate
of time and a half had been paid in the past. The result was that the take-home
pay of employees in the unit, with the hourly rate increase, was no greater than
before and in some instances, at least, was slightly less. As employees not in the
unit were mostly on a salary basis, I cannot assume that they suffered any com-
parable loss as a result of going on a 40-hour week. Rather, it would be natural to
assume that their weekly rate remained the same, and, with shorter hours for the
same pay, their compensation in effect would have been increased. Also, although
no blanket raise in weekly pay was given to employees outside the unit at the time
the 1953 collective-bargaining agreement went into effect, employees outside the
unit did receive merit increases in the period in which that contract was in effect.
Except for the hourly rate increase, the contract does not appear to have provided
benefits not previously enjoyed.
In the second place, the Respondent did not, at the bargaining conferences, evidence
any intent to terminate the bonus and sick leave practices. On the contrary, it gave
the Union reason to believe that such practices would continue. The Respondent's
objection to the sick leave clause proposed by the Union was only as to the fixed
time-not to the allowance of a discretionary amount of time. Dufford's question as
to whether the Union was not satisfied with the way sick leave had been handled in
the past, his eulogy of the Respondent's handling of sick leave, and his answer, in
response to the question as to whether the Respondent would be likely to change its
practice, that he foresaw nothing in the near future that would justify changing the
Respondent's policy, all were designed to create an expectation that the Respondent's
practice respecting sick leave would continue, as in the past, on an informal basis.
From such expressions there is no basis to infer that the parties understood sick leave
was to be terminated or bargained away in exchange for other benefits. If anything,
the Union was induced to give up its sick leave demand by the Respondent's ex-
pressed intent not to change the past practice. Although such expression was not a
contractual undertaking, the Union would have been justified in assuming that, if the
Respondent made any change in its past practice, it would do so on some basis other
than that of failure to include a provision on sick leave in the contract. This is es-
pecially true in view of the assurances which Dufford testified he gave several times
in the negotiations that no discrimination was intended. The Respondent's present
position, that it had a right to withhold sick leave because it was not included in the
contract after the subject was discussed, appears to be ill taken, for it amounts to an
assertion that the Union should not have believed that Dufford was making his state-
ments in good faith and so should not have relied on them in foregoing its request
for a specific period of sick leave.
The Respondent's objections to the Union's contract proposal of a bonus equal to
1 month's pay was not merely to the definiteness of amount. It also objected to being
under a contractual obligation to pay a bonus regardless of whether the Respondent's
profits justified it. But here again, the tussle was not for a choice between bonus and
no bonus. At the time the Union dropped the discussion about bonuses, no other
contract provision was being considered and there was no suggestion that the Union
was confronted by the Respondent with a choice between its several demands
Rather, the alternatives were contractual commitment or discretionary handling of
bonuses. The Union acceded to the latter. Everything that was said, even if not
put in the express words in which Baldwin quoted Dufford (that if any were paid
bonuses they all would be paid bonuses), indicated that the Respondent's discretion
would be based on its ability to pay and on its evaluation of individuals for deter-
mination of merit rather than on union representation or nonrepresentation. If the
Respondent actually believed that the bonus was bargained away by the Union and
tha+ .>,e Arer,,tion of the contract relieved the Respondent from even considering in-
dividuals in the bargaining unit for bonus purposes, it would have had such an un-
ders&a,iaing as soon as the contract was executed. But asked when the decision was
made to exclude employees in the bargaining unit from participation in the 1953
bonus, Dufford answered that it was made in December at the time when bonus pay-
1388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ments were under consideration . He talked the matter over with President Swen-
son and at that time decided not to give bonuses to employees in the bargaining unit.
Although at the bargaining conferences the Respondent disclaimed any intent to dis-
criminate and excluded such intent as a reason for refusing to include a bonus pro-
vision in the contract , in December the Respondent rationalized its discrimination
between employees in the bargaining unit and the other employees by the fact that
employees in the unit were covered by a contract which did not include a bonus. If
an employer were free to discriminate between employees on that ground , he could
with impunity deprive employees represented by a union of everything provided
before the union became the chosen representative which improved working condi-
tions while at the same time continuing to provide such things for employees not
so represented so long as nothing in the union contract provided therefor. So he
might remove drinking fountains , washing facilities , work stools, adequate lighting,
and many other improvements or conveniences from departments of employees rep-
resented by a union while continuing to provide the same thing for other employees.
If those things were not covered by the union contract, the employer would be under
no obligation to continue them , but if he is going to discontinue them , he should do
so on a nondiscriminatory basis to avoid the type of discrimination proscribed by
the Act. So in this case, sick leave and bonuses did not have to be continued, but
when the contract was negotiated the parties evidenced a willingness to let such prac-
tices continue as before under the unilateral administration of the Respondent with-
out contractual obligation ; so if they were to be eliminated , they should have been
eliminated on a nondiscriminatory basis.
I find no merit in the Respondent 's suggestion that it might have been subject to an
unfair labor practice charge if it had given the employees represented by the Union
a bonus in 1953. The whole attitude of the Union was that it wanted the employees
to have the bonus and was willing that the Respow%/ant continue its past practice. On
such facts no unfair labor practice could possibl!' result from a continuation of past
practices.12
The Respondent argues that "neither the individual employees nor the Union on
their behalf ever made a claim to respondent for sick leave not paid or bonuses not paid
under Article VI of the 1953 contract nor were those subjects taken up through
grievance procedure of Article XII of that contract ." Article VI of the contract
reads: "Any claim for wages must be presented to the Employer in writing within
thirty ( 30) days of the day employee is paid for the period in which wages are
claimed." Pay for time absent on account of sickness can be called wages; so
a deduction from pay for time lost on account of sickness could give rise to a claim for
wages for which notice of claim should have been given under article VI. But
although the bonus had been considered a form of compensation for services rendered,
section VI of the contract seems inapplicable to any claim for bonus because the
language of that section apparently contemplates a claim of short payment of periodic
wages rather than of nonpayment of an annual bonus . However, even if the clause
in question were applicable , it would apply to a contractual claim ; it would not
provide a defense to an unfair labor practice charge. If it is to be considered at all
in this case , it would be in connection with the remedy . And if considered in connec-
tion with the remedy, the limitation agreed to by article VI would apply only until
such time as the Respondent rejected the Union's oral request for payment , because it is
a rule of law too well established to require citation of authority that the law will
not require the performance of a useless act as a condition precedent . When the
Respondent told the Union that it would not pay sick leave or bonus, the Union was
not obligated to disbelieve such statement and to file a written claim anyway. I have
already stated that when a grievance stems from an unfair labor practice, resort to
the processes of the Board is not foreclosed by the fact that the grievance procedure
was also available . Not only does failure to resort to the grievance procedure of the
contract not deprive the Board of jurisdiction , but it does not constitute a defense
to the merits of the unfair labor practice charge. Also, in view of the Respondent's
position that it was not required to and would not pay the bonus or sick leave, the
argument that the employees or the Union should nevertheless have followed a use-
less course through the grievance procedure is unimpressive.
The Respondent argues that, before a finding of unlawful discrimination can be
made , it must be proved that the Respondent had an illegal motive to discourage union
membership . And, it argues , the very fact that the Respondent entered into a con-
tract providing for an increase in wage rates and -for a union shop negatives, any
12 Te.T.ai Foundries, Inc . 101 NLRB 1642, Rivi,op, McCormack. d Ri.chop. 102 NLRB 1101.
INTERMOUNTAIN EQUIPMENT COMPANY 1389
intent to undermine the Union. Where it is not evident that an employer's act was de-
signed to differentiate' between employees on the basis of their union membership
or sentiments, proof of motive may be a necessary element of an unfair labor
practice case. But where it is evident that an employer's conduct is based on a dif-
ferentiation between union and nonunion employees-that is, where he clearly intends
to discriminate-it is not necessary to show that the employer intended such discrimi-
nation to have the effect of discouraging union membership so long as that would be
the natural tendency of the discrimination.13 No dispute exists here that the Re-
spondent intended to discriminate between the employees represented by the Union
and those not so represented with respect to bonus and sick leave. No unfair labor
practice would be found even so if the Respondent proved either a justification or an
excuse for the discrimination. Such a defense might be established if the Union
had authorized the discrimination expressly or by necessary implication. On the
facts of this case, I find neither. All the evidence pointed to an understanding
that bonus and sick leave would be omitted from the contract in order to allow them to
be handled as they had been in the past on a nondiscriminatory basis. The tendency
,of the discrimination here to discourage union membership was the same as if the
Respondent had expressly said, "You may have union representation if you wish,
but to show you that you would be better off without it we will terminate the sick
leave and bonus which you formerly received as a favor from us and we will give
you nothing that we do not have to give." I conclude and find, therefore, that,
although the Respondent has not refused to bargain as alleged in the complaint,
it has, by a withholding of the 1953 bonus and sick leave from employees in the col-
lective-bargaining unit, while granting both benefits to employees outside the unit,
discriminated in regard to terms and conditions of employment of its employees in
violation of Section 8 (a) (3) of the Act and derivatively of Section 8 (a) (1) of the
Act.
If. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent as set forth in section I, above, to the extent
that they have been found to constitute unfair labor practices, have a close, intimate,
and substantial relation to trade, traffic, and commerce among the several States,
and tend to lead to labor disputes burdening and obstructing commerce and the
free flow of commerce.
III. THE REMEDY
Having found that the Respondent has engaged in unfair labor practices within
the meaning of Section 8 (a) (3) and (1) of the Act, I shall recommend that it
cease and desist therefrom and take certain affirmative action designed to effectuate
the policies of the Act.
Since I have found that the Respondent discriminated against employees in the
bargaining unit in regard to terms and conditions of employment by withholding
from them the customary bonus, while paying it to substantially all other em-
ployees, I shall recommend that it take action to place the employees in the same
situation they would have been in, absent the discrimination. As the bonus is
usually granted to employees but with some exercise of discretion not influenced
by union membership or representation, the Respondent should determine the merits
of employees in the unit to a bonus for 1953 on the same nondiscriminatory basis
that it used in determining whether or not employees outside the unit should re-
ceive a bonus for that year and it should pay to employees in the unit the amount of
any bonuses so determined.
Since the 1953 contract has expired and as the 1954 contract provides for a definite
number of days of sick leave, no purpose would be served by an order to grant
sick leave in the future. But to the extent that the employees in the bargaining
unit suffered loss of pay on account of sickness as a result of the Respondent's dis-
crimination, I shall recommend that the Respondent make them whole. As pre-
viously stated, however, the failure of the employees to make claims for wages for
such periods of absence within the 30-day period agreed to in the contract would
have limited their contractual right to reimbursement. I believe it would effectuate
the purposes of the Act to follow the limitation agreed to in the contract with re-
spect to deductions for sick leave for the period during which the employees failed
to assert their claims. The first notice to the Respondent of any claim to compen-
sation for sick leave was made in Baldwin's telephone conversation on January 4,
1954. For the period from January 4, 1954, to the end of the 1953 contract, then,
11 Radio OJjlcerc' TTnton etc v N. L R R 247 U 8 17
1390 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD
the Respondent should make whole the employees in the bargaining unit for any loss,
of pay suffered by them as a result of the discriminatory refusal to compensate them
for time not worked on account of sickness by paying them for such time at their-
regular rate of pay on the same nondiscriminatory basis that it used in paying.
sick-leave compensation to employees outside the bargaining unit. By "paying them
on the same nondiscriminatory basis" as employees outside the unit is meant with.
the same discretionary limitations as to maximum duration of absent time for which
payment was allowed and the like.
Upon the foregoing findings of fact, and the entire record in the case, I make
the following:
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce within the meaning of Section 2 (6)
and (7) of the Act.
2. The Union is a labor organization within the meaning of Section 2 (5) of
the Act.
3. On June 26, 1954, and at all times material thereafter, the Union has been the-
statutory bargaining representative of all employees in the appropriate unit within
the meaning of Section 9 (a) of the Act.
4. All warehouse employees of the Respondent, construction machinery, equip-
ment, and parts, sales, and service plant in Boise, Idaho, including warehousemen,
shipping and receiving clerks, price clerks, countermen, order clerks, deliverymen,
inventory clerks, and warehouse filing clerks, excluding all managers, assistant man-
agers, foreman, confidential secretaries, office clerical employees, outside salesmen,
professional employees, guards, and supervisors as defined in the Act, constitute a
unit appropriate for the purposes of collective bargaining within the meaning of
Section 9 (b) of the Act.
5. By discriminating in regard to terms and conditions of employment of its em-
ployees in the bargaining unit, the Respondent has engaged in and is engaging in
unfair labor practices within the meaning of Section 8 (a) (3) of the Act.
6. By the conduct in paragraph numbered 5, above, the Respondent has interfered
with, restrained, and coerced its employees in the exercise of the rights guaranteed'
in Section 7 of the Act.
7. The foregoing unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act.
8. The Respondent has not refused to bargain with the Union within the meaning
of Section 8 (a) (5) of the Act.
[Recommendations omitted from publication I
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
WE WILL NOT discourage membership in General Teamsters, Warehousemen
and Helpers Local Union 483, or in any other labor organization of our em-
ployees, by discriminating among our employees in regard to terms or con-
ditions of employment.
WE WILL NOT in any manner interfere with, restrain, or coerce our em-
ployees in the exercise of their rights to self-organization, to form labor or-
ganizations, to join or assist General Teamsters, Warehousemen and Helpers
Local Union 483, or any other labor organization, to bargain collectively through
representatives of their own choosing, and to engage in concerted activities for
the purpose of collective bargaining or other mutual aid or protection or to re-
frain from any or all such activities, except to the extent that such right may
be affected by an agreement requiring membership in a labor organization as
a condition of employment, as authorized in Section 8 (a) (3) of the National
Labor Relations Act, as amended.
WE WILL make whole the employees in the bargaining unit covered by the
1953 contract with the above-named Union for any loss suffered by them as
a result of the discrimination against them.
SEABOARD TERMINAL AND REFRIGERATION COMPANY 1391
All our employees are free to become or remain members of the above-named
Union or any other labor organization. We will not discriminate against any
.employee because of membership in or activity on behalf of any such labor organiza-
tion.
INTERMOUNTAIN EQUIPMENT COMPANY,
Employer.
Dated- --------------- By----------------------------------------------,
( Representative ) (Title)
This notice must remain posted for 60 days from the date hereof , and must not be
altered , defaced , or covered by any other material.
.Seaboard Terminal and Refrigeration Company and Interna-
tional Brotherhood of Longshoremen , AFL-CIO I
Local 976, International Longshoremen 's Association, Independ-
ent and International Brotherhood of Longshoremen, AFL-
CIO. Cases Nos. 2-CA-3836, 2-CA-3880, 2-CA-3197, 2-CA-4015,
2-CB-1237, 2-CB-1258, 2-CB-1280, and 2-CB-1339. December
16, 1955
DECISION AND ORDER
On May 20, 1955, Trial Examiner Arthur E. Reyman issued his
Intermediate report in the above-entitled consolidated proceeding,
finding that the Respondents had not engaged in and were not engag-
ing in the unfair labor practices alleged in the complaint and recom-
mending that the complaint be dismissed in its entirety, as set forth
in the copy of the Intermediate Report attached hereto. Thereafter
the General Counsel and the Charging Union filed exceptions and
briefs and the Respondents filed briefs.
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Intermediate Report, exceptions and briefs, and the entire record in
these cases, and, finding merit in the exceptions, rejects the Trial Ex-
aminer's recommendation and adopts only such of his findings and
conclusions as are consistent with this Decision and Order.
1. The principal issue in these cases concerns the legality under the
Act of certain union-security agreements between the Respondents.
As set forth in the Intermediate Report, the Respondent Union,
Local 976, has represented the Respondent Employer's employees since
1938.2 Their December 22, 1953, contract, and all preceding con-
tracts, contained, inter alia, a clause which provided as follows : 3
'As the AFL and CIO meiged after the hearing in this case, we are taking notice of
the merger and amending the designation of the Charging Union accordingly.
2 The Respondent Union , Local 976, was affiliated with the AFL prior to September
1953
s The clause does not appear in its entirety in the Intermediate Report Contrary to
the findings of the Trial Examiner, the record establishes that this identical clause was
contained in all contracts between the Respondents since before the 1947 amendments to
the Act.
114 NLRB No 216.