K-D Manufacturing Co.

National Labor Relations Board - Board Decisions

Jan 9, 1968

169 N.L.R.B. 57 (N.L.R.B. 1968)

K-D MANUFACTURING COMPANY 57
K-D Manufacturing Company and Allied Industrial
Workers of America , AFL-CIO, Local No. 487.
Case 16-CA-2873
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
January 9, 1968
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
BROWN AND JENKINS
On September 11, 1967, Trial Examiner James
R. Webster issued his Decision in the above-enti
tled proceeding, finding that Respondent had en-
gaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist
therefrom and take certain affirmative action, as set
forth in the attached Trial Examiner's Decision.
Thereafter, Respondent filed exceptions to the
Trial Examiner's Decision and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
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
Trial Examiner's Decision, the exceptions, the
brief, and the entire record in the case, and hereby
adopts the findings, conclusions,' and recommenda-
tions2 of the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the Recom-
mended Order of the Trial Examiner, as modified
below, and hereby orders that Respondent, K-D
Manufacturing Company, Waco, Texas, its officers,
agents, successors, and assigns, shall take the ac-
tion set forth in the Trial Examiner's Recom-
mended Order, as so modified:
In 1(e) of the Order, delete "In any like or related
manner ..." and substitute therefor "In any other
manner ...."
'The Board does not adopt the Trial Examiner's inference that
Respondent would have executed a written agreement with the Union
provided it contained certain provisions . This inference is contrary to his
finding , which is supported by substantial evidence , that Respondent did
not bargain in good faith with the Union.
Further , the Board does not adopt the Trial Examiner 's finding that
Respondent granted wage increases to its employees in February 1967
without utilizing the collective-bargaining process . The evidence is that
the Union agreed to these wage increases.
2 The Trial Examiner inadvertently recommended a narrow form of
cease-and-desist order in paragraph 1(e) of his Recommended Order while
he used a broad form order in the fourth paragraph of the Notice To All
Employees Due to the nature of Respondent's violations, the Board
modifies the Recommended Order to correspond with the Notice
JAMES R. WEBSTER, Trial Examiner: This case, with all
parties represented, was heard in Waco, Texas, on April
26 and 27, 1967, on a complaint of the General Counsel
and answer of K-D Manufacturing Company, herein
called Respondent. The complaint was issued on Februa-
ry 17, 1967, on charges filed January 10 and 11, 1967.
The complaint alleges that Respondent refused to bargain
collectively with the Union, made unilateral changes in
working conditions, promulgated a broad no-solicitation
rule, and illegally threatened employees, thereby violating
Section 8(a)(1), (3), and (5) of the National Labor Rela-
tions Act, herein called the Act.
The General Counsel and Respondent have filed briefs
herein and they have been carefully considered. Upon the
entire record and my observation of the witnesses, I
hereby make the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
Respondent is a Texas corporation with its principal of-
fice and place of business in Waco, Texas, where it is en-
gaged in the manufacture of industrial material-handling
equipment. During the past 12 months, Respondent has
manufactured, sold, and distributed products valued in
excess of $100,000, of which products valued in excess
of $50,000 were shipped from Respondent's Waco plant
directly to States of the United States other than the State
of Texas.
Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Allied Industrial Workers of America, AFL-CIO,
Local No. 487, herein called the Union, is a labor or-
ganization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Issues
1. Whether Respondent's failure to give Christmas
gifts to employees in the bargaining unit in December
1966 constituted a change of its Christmas policy or prac-
tice, and whether the giving of Christmas gifts by Re-
spondent constitutes a condition of employment and
therefore a subject of collective bargaining.
2. Whether on or about September 23, 1966, M. M.
Key, Jr., executive vice president of Respondent, promul-
gated a broad no-solicitation rule, and whether he, at that
time, threatened discharge for any union activity in viola-
tion of said rule.
3. Whether on or about November 16, 1966, Vice
President Key stated to employees that negotiations
would be futile if the Union won the impending election.
4. Whether Respondent has bargained in good faith
with the Union.
B. Prefactory Statement
In September 1966, the Union began organizing the
employees in Respondent ' s Waco plant. Earlier in the
169 NLRB No. 10
58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
year Respondent had moved its plant from Cleburne,
Texas, to Waco, Texas. On or about November 17, 1966,
a majority of the employees in an appropriate unit, by a
secret-ballot election conduct by the Board, designated
and selected the Union as their bargaining representative.
On November 28, 1966, the Union was certified as the
exclusive bargaining representative of the employees in
said bargaining unit, and at all times since that date the
Union has been the representative for the purposes of
collective bargaining of the employees in the following
unit:
All production and maintenance employees at
Respondent's Waco, Texas, plant, including shipping
and receiving employees, but excluding office cleri-
cal employees , draftsmen , professional employees,
guards, and supervisors as defined in the Act.
C. The Broad No-Solicitation Rule
When Respondent first learned of the union activities
of its employees in September 1966, Vice President Key
spoke to an assembly of the employees on the matter. He
told them that he had received a letter from the Union to
the effect that the employees wanted it to represent them;
that he could not see why they wanted a union and that if
they had come to him they probably could have worked
1 Respondent contends that, in connection with umon activities and
representation of the employees in prior years by another umon , a no-sol-
icitation rule prohibiting solicitation on company time only was promul-
gated in 1964, and that in September 1966 Key restated the rule. Key de-
nied that he prohibited solicitation "on company property " or that any
disciplinary action was threatened , but his testimony on this point is
equivocal , and in a number of instances elicited by leading questions by
his counsel , whereas that of the two employees who testified on this point
is unequivocal Key's testimony is as follows:
A ... and I reacquainted them with the no-solicitation rule on
company time.
Q. Is this the same rule you referred to in your previous
testimony?
A. Yes.
Q You communicated it to them orally in a speech?
A. Yes.
Q. What else?
A. As I previously testified, I think, that I referred to the union
cards.
Q. You say you think you referred to the union cards" You don't
know whether you did?
A That point about the union cards , I am hazy, there had been
some question about union cards, and, as I believe I testified a while
ago, I referred , I suggested that if they wanted to sign union cards,
that was fine , but that they didn 't have to, and in my opinion they
would be better off to wait and find out something about the facts of
unionism.
Q I believe your testimony was, "You shouldn 't sign more addi-
tional cards ," isn't that what you told them?
A. I would say I could have said that . I don't recall the exact lan-
guage of it
Q. How marry times did you mention the union cards?
A. Once.
Q. Just once"
A. (No response.)
Q. Now , what did you tell the employees about what would hap-
pen if they violated that no-solicitation rule?
the matter out; that he knew the working conditions in the
old building which they were then occupying were pretty
bad but that they would soon be moving to a new building
and working conditions there would be better. On the
matter of union-authorization cards, he told them they
would be better off to wait and find out something about
unionism and that he would bring someone in to tell them
what unionism was all about; that he wanted to get one
thing straight with them and that was that there would be
no signing of union cards or talking union on company
time or company property; that, if he caught anyone
doing it, he would automatically be fired. i
Since the only rule or policy on solicitation that has
been made known to Respondent 's employees in Waco is
that stated by Key in his speech in September 1966, I find
that his statement of a broad no-solicitation rule on that
occasion, with penalty of discharge for its violation, con-
stitutes a violation of Section 8(a)(1) of the Act.
D. Vice President Key's Speech on November 16,1966
On November 16, 1966, the day before the representa-
tion election, Vice President Key again spoke to an as-
sembly of employees. Respondent's attorney, John Price,
also spoke on this occasion. Their talks and most of the
question-and-answer part of the proceedings that fol-
A. I did not say what the disciplinary action would be.
Q And did you give that rule to the employees and say you only
mentioned work time and didn't mention company property"
A. That's correct.
Q. Is that rule complete as it stands?
A. To me, it's complete . It's our rule.
Q. It tells the employees that they can't solicit on work time?
A. That 's right.
Q It doesn't tell them where they can sohcit? Don't they have a
right to solicit?
A. On their time , it's fine with me.
Q. Suppose they want to do it at the plant on their time?
A. That' s fine; lunch , break, that's fine
Q. Did you tell them that?
A. No, I told them what the rule was.
Q. You didn't tell them anything that would happen to them if they
did violate that rule9
A. I did not
Q. Prior to making that speech at 5th and Mary, did you consult
your attorney?
A Yes.
Q What did you consult him about? I am not asking what he said,
but what about?
A I counseled with him on what action I should take in view of
the letter I had received.
Q Was the rule concerned in that discussion?
A Yes.
Q. Was the company rule -
A Yes.
Q Was there any change in the rule as a result of that consulta-
tion?
A No.
Q. All right, sir Now, on the day - when was it before you made
this speech that you consulted with the attorney, if you recalh
A The day? It seems tome either the day of the speech or the day
before the speech I consulted with my attorney.
K-D MANUFACTURING COMPANY
lowed were recorded by Respondent on a portable tape
recorder. The employees were advised of the recording.2
Attorney Price spoke first and, among other things, he
explained the provisions of the Act relative to collective
bargaining and the rights of the employees. He stated:
It [Respondent] can conduct its business in a sound
businesslike manner; it does not have to agree to
change its operations or give the employees anything
just because they have a union speaking for them.
The obligation to bargain simply requires the Com-
pany to keep an open mind, to listen to the em-
ployees' representative, consider what is said, back
up any refusal with reasonable argument, make what-
ever counterproposals sound business would dictate,
or otherwise try to reach an agreement if possible.
Our point here is, certainly, commonly accepted
ideas about union are simply not true. A common
misconception is that if a union represents the em-
ployees, the Company must automatically give the
Union something or that in bargaining the Union can
apply some force to make the Company do
something other than what good business judgment
dictates; put another way, many employees believe
they can get more through having a union bargain for
them than the Company would give them without a
union. Such beliefs are simply not true.. . . The mere
fact the Union is doing the bargaining does not
trigger any obligation for a company to change its
method of operation nor does the fact a union does
the bargaining mean that the Company would give
the employees something it would not otherwise
give.
On the matter of a strike, Attorney Price told the em-
ployees:
I think Backinger [Union Representative Bert
Backinger] is going to lead you along the primrose
path just like he had led many other guys. I think he
is going to. He's going to have you, either having
some of your fellow workers or you, going on strike.
... Whether you don't is entirely up to you; we have
nothing to say about it. But, we want you to know
ahead of time that if there is a strike here - every man
here has an individual right to either go or not - we
are going to have a place open and operating for this
work to be carried on. We're going to serve our
customers. We hope you guys will come in to work,
but if you don't we'll just have to get someone that
will, just like you would if you were running the
Company.
The employees were assured by Price that they had a
legal right to have the Union represent them and that, if
they wanted the Union to represent them, they could vote
for it at the representation election. All employees were
encouraged to vote and were told that the election would
be by secret ballot.
During Key's talk, Attorney Price added:
Mr. Key has set wages in this shop in accordance
with what he thought was good business judgment.
He's going to set wages in the future in accordance
2 Respondent introduced in evidence the tape recording containing the
talks made by Attorney Price and Vice President Key to the employees
on November 16, 1966, and discussion that followed. The official re-
porter transcribed Key's talk on pp 453 through 465 of the transcript of
record, but encountered difficulty in the transcription as his talk
developed into a discussion or question-and-answer proceedings. The talk
by Attorney Price is on one side of the tape and Key's talk and the general
59
with what he thinks is good business judgment. He's
not going to set them because you are for or against
the Union.
Having the Union is not going to change his mind
about whether it's good business judgment or not.
Now, second thing I want you to understand,
if you have a Union, he [Respondent] can only tell
the Union exactly the same thing I am telling you
now. That is all. Business judgment will have to set
wages.
Regarding an impending increase in wages to comply
with Federal minimum wage laws, Attorney Price told
employees:
... Say a Union representative, Mr. Backinger, is
going to make all the claim for the raises. But the
truth of the matter is, he couldn't keep wages down
if he wanted to, and Backinger couldn't raise them or
not raise them. The one factor that is going to affect
the raise in wages here is the Law of the United
States.
On the same day as the talks by Attorney Price and
Key, Respondent posted at the plant material on the
matter of union representation which included the follow-
ing:
We do not say voting for the union is futile because
we don't know what you expect from it. If you fully
understand what the union can do and what it cannot
do and you vote fcr it expecting no more or no less,
then obviously, voting for it would not be futile. Our
point in what we have said is that you should not be
misled in what to expect. We can tell you very
frankly what to expect from the Company. We are
going to do as we have always done - run the com-
pany using sound business judgment as our guide in
making each decision on what we have before us at
the time the decision must be made. Having a union
represent the employees will not change this
procedure. We will fulfill our obligation under the
law- no more, no less.
Regarding the matter of a strike, Key told employees:
I know that Bert, [Union Representative Bert
Backinger] or that any Union, I, I feel like are going
to ask you to strike. I know they're telling you
they're not. But if you just stop and think about it, I
don't know what you got but a strike - and you got
that right now. Hell, you can walk out right now in
mass. Hit that clock and go, hell, hit it and- Don't hit
the clock and go -just go, if it's such a great deal.
I just, I know that to run this business, we've got
to compete with other businesses in this area that
work you type of people. We've got to have the em-
ployees, and we've got to belly up to the bar and pay
for it. And I feel like we're doing it. If we're not, and
if there's such a damn much better job across the
street, man, I'd hit it. I wouldn't wait for Bert to take
me, I'd hit it now.
discussion is on the other side of the tape The Testimony of employees
Austin and Shivers as to statements made by Respondent on this occasion
is strikingly similar to that on the recording, except that they attribute to
Key some of the statements made by Price The proceedings were
recorded on a portable, battery-operated Norelco 150 tape recorder with
tape cartridge.
60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
E. The Christmas Gifts
For many years, at least since 1953, Respondent has
given Christmas gifts to employees in December of each
year. The gifts have been baskets of fruit, hams, or tur-
keys, and in two instances cash bonuses were given.
Also, gifts have been given each year to certain
customers of Respondent. In 1962, Respondent incurred
a financial loss and its board of directors adopted a policy
relative to Christmas gifts as follows:
Also the question of gifts to Employees and
customers was raised by M. M. Key, Jr. He desired
some direction in regard to Company gifts to em-
ployees and customers at Christmas time. It was
agreed by all concerned that such gifts were to be
considered principally matters of a personal nature,
with business considerations of minor nature. It was
agreed that the officers should establish the amount
of money to be spent for these type gifts and that this
money should be distributed according to the per-
sonal feelings of the officers in conjunction with the
holiday spirit as it might exist each year. These gifts
are to be considered gifts in the strict Bence [sic] of
the word and are not to be considered, in the case of
customers, as goodwill offerings for obtaining busi-
ness nor in the case of employees, wages or money
earned for work performed. It is decided in this re-
gard, not to give money to either employees or
customers.
In that year Christmas gifts were given to at least some of
the employees.
In 1966, the Company incurred a financial loss of ap-
proximately $50,000; this was due partly to a fire that oc-
curred in its plant which, at that time, was located in
Cleburne, Texas. Christmas gifts were given to all super-
visory personnel and all office employees, and to select
customers of Respondent, but no gifts were given to any
of the employees in the collective-bargaining unit.
Respondent contends that Christmas gifts are personal
gifts and are not a part of wages or a condition of employ-
ment, and were not given in 1966 pursuant to Respond-
ent's policy that gifts would be given when conditions
warrant it, and that in 1966 a sizable financial loss oc-
curred, During the year Respondent had moved its plant
from Cleburne, Texas, to Waco, Texas, and all em-
ployees, with the exception of one, were new and had
worked for Respondent less than 1 year; and, as a second
shift was started in November 1966, about one-third of
the employees had worked less than 2 months by
December 25.
On December 22, 1966, Key posted the following
notice to employees:
In response to the request of 26 employees that the
work hours be changed on Friday, December 23,
1966, I have been advised, by my attorney, that such
a change, in response to the request of the em-
ployees, would be a violation of the law. Therefore,
the hours of work on Friday will be the normal
scheduled hours.
F. The Bargaining Negotiations
On November 28, 1966, the Union requested, by
letter, a list of employees in the bargaining unit, their
original hiring dates and rates of pay, and a list of all
fringe benefits. By letter dated December 9, 1966, the
Union repeated its request for the information set forth in
its letter of November 28. By letter dated December 13,
1966, Attorney John Price forwarded to the Union a list
of job classifications with wage rates and names of em-
ployees in each classification, and a document covering
vacations, holidays, and other employee benefits. Price
suggested that, if the union bargaining committee is to be
composed of five employees, the negotiations be con-
ducted after worktime, or he agreed to negotiate during
worktime if it were composed of no more than two em-
ployees. He also stated that he did not wish to negotiate
with the committee alone without Union Representative
Backinger present.
By letter dated December 16, Backinger advised Price
that it was agreeable with the Union to negotiate after
work hours. He also requested that Respondent negotiate
with the union employee committee on occasions when
and if it became impossible for him to be present. By
letter dated December 19, Price advised Backinger that
he would negotiate with either Backinger or any other
person or with the union employee committee alone if
desired.
By letter dated January 3, 1967, Price wrote Backinger
that Respondent proposed to take its annual inventory on
Saturday, Sunday, and possibly Monday, January 7, 8,
and 9, 1967. A list of employees scheduled for the inven-
tory - six different employees for each day - was en-
closed. He also advised that Respondent proposed to
change the workweek from 58 hours to 50 hours. Price
suggested that, in the event the Union wished to consult
with the Company concerning either of these matters, he
would be available for a meeting on Friday, January 6,
1967. The Union requested negotiations on the plan for
taking inventory and on the reduction of hours of work.
A meeting was held on January 6, 1967, in Waco, Tex-
as, at the Viking Motel with Attorney Norman Bennett,
an associate of John Price, representing Respondent and
Backinger, and an employee committee representing the
Union. At the meeting Backinger asked Bennett the
reason for the change in Respondent's past practice in
taking inventory. In the past the entire work force had
worked on inventory and, when inventory was
completed, they continued with their normal duties.
Under the new plan for taking inventory, many em-
ployees would lose work and wages, since Respondent's
approximately 30 employees were working 58 hours a
week. Backinger also inquired about the reason for the
reduction of overtime hours. The Union proposed that
the method of taking inventory remain as it had been in
the past, and that the hours remain the same.
Bennett stated that he did not know the past practice on
inventories and would need to call Vice President Key at
the plant on this matter. Bennett made a telephone call to
Key and reported back to the Union that the Company
was not willing to go along with the past practice of taking
inventory and that they wanted to continue to cut the
hours. Bennett explained that the men selected for the in-
ventory were selected on the basis of seniority with the
exception of one man, Sanders. Respondent was of the
opinion that Sanders, because of his age, would not be as
qualified for inventory as other employees and he was not
included on this worklist, although he was one of the
senior employees.
Backinger then suggested that Respondent take inven-
tory by using 15 of its employees on Saturday, January 7,
and 15 on Sunday, January 8. Also, the Union stated that
certain of the employees Respondent had scheduled to
work on Sunday, January 8, did not wish to work on that
K-D MANUFACTURING COMPANY
day for religious reasons, but Bennett insisted that the
schedule be adhered to. Regarding the reduction of hours
from 58 to 50, Bennett stated that customer demands at
that time did not require that Respondent's employees
work 58 hours. Members on the union bargaining com-
mittee stated that Respondent had a backlog of orders.
Bennett stated that he would consider their argument.
After the intermission or break during negotiations, and
after his telephone conversation with Key, he reported
that Respondent did not consider its backlog of orders
enough to require 58 hours of work a week. Backinger
stated that he understood that, if production needs
required Respondent to work 60 hours, it would work 60
hours, and, if it required 50 hours of work, it would work
50 hours.
The meeting ended without any change of position by
Respondent on the matter of inventory or on the reduc-
tion of hours. Backinger recognized that production
needs govern the amount of overtime hours worked each
week, but was opposed to a reduction pending further
negotiations on the matter. He continued to request that
all employees share in the inventory work.
The inventory was conducted in accordance with the
schedule proposed by Respondent, and on January 7,
1967, the employees were notified that effective Monday,
January 9, 1967, their hours of work would be reduced to
50 hours per week.
By letter dated January 9, 1967, Backinger forwarded
to Price a copy of the Union's contract proposal, and
meeting dates were suggested. On January 17, having
received no reply, Backinger wrote Price again regarding
a meeting date. On January 23, having received no reply,
he called Price's office and talked with Norman Bennett,
and a meeting date of January 30 was agreed upon.
A meeting was held in Waco, Texas, on January 30,
1967. This meeting was devoted primarily to a review of
the Union's contract proposals and a discussion of these
proposals. At this meeting, Bennett informed the union
negotiator that to conform to the new Federal minimum
wage law requiring a minimum wage of $1.40 per hour, ef-
fective February 1, 1967, the minimum wages of Re-
spondent's laborers would be raised 10 cents per hour
to the $1.40 minimum rate, and, in order to retain the
existing differential between jobs, Respondent proposed
to raise wages of all classifications 10 cents per hour,
effective the first pay period after February 1, 1967. The
Union accepted these increases with the understanding
that it would not preclude further bargaining on wages.
At this meeting the Union explained proposals 1 through
9 of its contract. The meeting lasted approximately 3
hours. The next meeting was scheduled for February 11.
At the meeting of February 11, the parties continued
to discuss the Union's proposals. After this was con-
cluded, Backinger requested Bennett to bring a contract
proposal to the next meeting. The next meeting was set
for February 21.
At the meeting of February 21, agreement was reached
on article I entitled "Mutual Recognition of Rights" ex-
cept that, at the suggestion of Respondent, the title of this
section was changed to "Purpose." Agreement was
reached on article'II entitled "Recognition," the parties
agreeing to word this section in accordance with the
Board's certification of the Union. Backinger asked
Bennett if he had brought a contract proposal, and
Bennett replied that he had not as he still had some
questions, At this, meeting Bennett proposed that the
hours of the employees be reduced again from 50 to 40
61
per week effective March 1, 1967. Bennett explained that
production needs did not demand that they work 50 hours
a week. Backinger requested a list of new employees
hired and a list of those that had quit. Bennett agreed to
bring in counterproposals at the next meeting to some of
the contract provisions.
On February 24, 1967, Backinger wrote Bennett
requesting that the reduction in hours not be put in effect
until the Union had an opportunity to review the follow-
ing records to be furnished by Respondent: (1) purchas-
ing orders, shipping and receiving records, and any other
necessary records to enable the Union intelligently to
determine whether Respondent's contention on the
reduction of hours is correct or incorrect; (2) the names,
classification, dates of hire, rates of pay on date of hire,
and present rates of pay of all employees currently on the
payroll.
The next meeting was held on February 27, and at this
meeting Bennett furnished the information requested con-
cerning employees. As to the remaining records
requested, Bennett handed to Backinger a written ex-
planation of Respondent's position setting forth that its
proposed change of hours from 50 to 40 per week was
based on: (1) customer demands and production needs,
and (2) the inefficiency of operating on an overtime basis
paying premium rates. He denied that customer demands
and production needs had decreased, and stated that the
second reason stated is the reason for the reduction in
hours. Bennett set forth in his written explanation that
Respondent did not see how the information requested by
the Union for the purchase orders, shipping and receiving
records, etc., was necessary for intelligent bargaining in
view of Respondent's position that overtime hours were
cut because of the inefficiency of operating on an over-
time basis. He stated that Respondent would not make
this information available to the Union unless it could
demonstrate that such information is necessary to enable
the Union to bargain intelligently.
At this meeting Respondent submitted a counter-
proposal on 13 contract sections. One listed 27 reasons
for discharge. Another provided that, on assignment to
available work, the most qualified employee would be
selected. Another provided for a grievance procedure of
three steps - first to the plant superintendent, then to
Vice President M. M. Key, Jr., and then to President M.
M. Key, Sr., with each step to be taken within 48 hours
and to be in writing. No provision for union participation
was made. Later in negotiations Respondent revised each
of these three proposals.
In view of Respondent's intention to reduce hours,
Backinger suggested an interim wage increase be given to
offset the reduction in hours until such time as the parties
could get a contract negotiated. Bennett stated that he did
not think the Company would increase its cost and that he
would give the Union an answer in writing.
The proposed reduction of hours from 50 to 40 per
week was not put into effect on March 1, since bargaining
had not been completed on this item; the Company had
not at that time furnished the Union with all information
requested.
The next meeting was held on March 8, 1967. At this
meeting Respondent showed to Backinger information
requested on the matter of orders and subcontracting. Co-
pies of these records were not furnished to the Union, and
the identity of subcontractors was concealed,' Respond-
ent agreed that, if the Union did not believe the informa-
tion to be correct, an impartial third party could verify it.
Backinger was still opposed to a reduction of hours and
62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
also requested an interim increase. Bennett explained that
"we didn't want to increase our cost at this time."
Backinger asked Bennett if he would even consider an in-
crease. Bennett replied, "Sure, I will. You make it sound
like we haven't considered it before. We have been con-
sidering it ever since you first proposed it way back when,
and we are considering [it] now. But on the basis of our
consideration of it, we don't want to, at this time, increase
our cost." At the end of the discussion, Bennett stated,
"Mr. Backinger, it looks like we have a deadlock here,
doesn't it?" He asked Backinger what he proposed that
they do. One of the committee members stated that
Respondent should let them work 4 days a week so that
they could get other jobs. Bennett rejected this proposal
and stated that it would not produce the most efficient
and effective work force. He asked then if there was
anything else. There was no reply. He stated, "Well,
since we are deadlocked, we are going to go ahead and
put the reduction of hours in effect anyway."
At this meeting Bennett handed to Backinger a docu-
ment entitled "Cost Items." On this document there was
listed the articles and sections in the Union's contract
proposal which Respondent regarded as cost items, and
Respondent's position on these was that "the company
will not agree to increase the cost of running the business
at this time." This list included such items as wages, over-
time, premium pay, rest periods, washup periods, report-
in pay, call-in pay, holidays, sick leave, funeral leave, jury
pay, voting leave, and vacations. In support of its posi-
tion, Respondent's argument was set forth in part as fol-
lows:
1. The company uses its best business judgment in
making its decision as to whether or not to increase
its costs. If a collective bargaining contract were en-
tered into, it would bind the company to pay certain
wages and benefits to the employees for a period of
time in the future regardless of the conditions ....
Before the advent of the union, it has always
retained the right to adjust the wages and benefits
based on the economic conditions of the business.
We do not believe it is sound business judgment to
even contract to pay existing wages and benefits for
a period of time in the future; but because the law
requires this, we will agree to do so. However, the
law does not require us to agree to pay increased
wages and benefits for a period of time in the future;
and based on the uncertainties of the future and
specifically the economic uncertainties of the future,
we at this time do not think it is sound business
judgment to contract for increased costs for an ex-
tended period of time for a period of time in the fu-
ture. A decision to do so would be an unwise busi-
ness decision.
2. The company believes it is paying a fair wage and
giving the employees fair benefits. However, the
union has asked that the company increase the wages
and benefits. The company does not want to do this
because this increase is money that the company
wants to keep for itself.
Backinger objected to the fact that Respondent's
grievance procedure did not include the Union or a union
representative. At the next meeting, held on March 16,
1967, Respondent submitted a new counterproposal on
grievances which added that a representative of the
Union may be present at any meeting held for the purpose
of adjusting grievances.
On March 9, 1967, Respondent posted a notice to em-
ployees announcing a reduction in hours to 40 hours per
week, effective March 13, 1967.
The next meeting was held on March 16, 1967. At this
meeting Respondent submitted additional contract
proposals. One was on expiration date of contract and
provided for the termination of the contract at the end of
1 year following the date of the signatures of the parties.
Another proposal provided that the Company shall have
the unlimited right to contract out any of its work. Also
at this meeting the Company submitted a written state-
ment of its position on a checkoff clause. One of the
reasons given by the Company for its position is set forth
as follows:
1. The company does not want to know either
who is in the union or who is not in the union. A com-
mon practice of this union is to file charges with the
Labor Board charging the company with discrimina-
tion because of union membership as is demon-
strated by the charge on file at this time. One of the
best defenses against this charge is for the company
to not know either who is in the union or who is not
in the union. If the checkoff provision were made a
part of the contract, the company would certainly
know who is in the union.
Also in the Company's statement of position on
checkoff it set forth that the Company deducts insurance
premiums from employee wages, contributions to the
United Fund, and uniform rental charges. It explains that
the Company makes these deductions because "it has a
real and direct interest" in these matters. "The company
does not believe that it has the same real and direct in-
terest in the union that it has in the case of the other
deductions." Also Respondent explains that since a
checkoff would be valid and binding for a period of 1 year
or the period of the collective-bargaining agreement, the
Company does not wish to make a contract abridging the
rights of the employees to get out of the Union when they
see fit to do so.
The next meeting was held on March 30. At this meet-
ing further negotiations were held on Respondent's
proposals, and Backinger testified that agreement was
reached on some of the items, particularly on some of the
grounds for discharge. On the management-rights clause
Backinger proposed that the Union agree to Respond-
ent's section 1 of this clause and Respondent agree to
the Union's section 2 of this clause. Bennett stated that
Respondent only wanted tentative agreements. Backinger
stated that he wanted firm agreements on the matters
agreed to. Bennett explained that Respondent wanted a
total contract and did not want to be held to its agreement
on some items if agreement could not be reached on a
total contract.
The next and last meeting prior to the hearing herein
was held on April 24, 1967. At this meeting Respondent
submitted proposals concerning bulletin boards, safety
and health, wages, seniority, and management rights, and
a statement of position on arbitration. The proposals on
wages, seniority, and management rights contained some
changes or concessions from prior proposals. The
management-rights clause no longer included as an ap-
pendix the list of grounds for discharge, and the language
of the clause was revised; the seniority clause was revised
to give some recognition to tenure of service and to
govern selection for work assignment where qualifica-
tions are equal. In its initial proposal, Respondent did not
recognize seniority as a criteria for assignment of work.
K-D MANUFACTURING COMPANY
In its wage proposal Respondent included some language
from the Union's proposal on temporary assignment of
employees (article XV, section 3) - that an employee
temporarily assigned to a position or classification which
has a pay rate higher than his current pay rate shall
receive the higher pay rate, and, in the event an employee
is temporarily assigned to a lower classification with a
lower pay rate, his rate shall not be cut unless his classifi-
cation is changed to that having the lower rate. Also in
this proposal Respondent set forth that an employee will
receive a 5-cent-per-hour wage increase at the end of
each 6 months until he is 10 cents below the maximum
rate in his classification. Thereafter he will receive a wage
increase to the top rate when, in the judgment of the Com-
pany, his work performance merits the said increase.
Laborers will receive an automatic wage increase of 5
cents after 30 days and another 5-cent wage increase after
60 days.
G. Conclusions
As Attorney Price pointed out to employees on
November 16, 1966, the Act sets forth specific require-
ments of an employer for good-faith bargaining and sets
forth certain acts that are not required of him. The Act
requires an employer to (1) meet at reasonable times, (2)
confer in good faith with respect to wages, hours, or other
terms and conditions of employment, and (3) execute a
written contract incorporating any agreement reached if
requested. He is not required to agree to a proposal or to
make a concession. In this case Respondent met at
reasonable times, conferred with the union bargaining
committee, made arguments in support of its positions,
and made some concessions from original positions
taken. But the principal issue is whether or not Respond-
ent did so in "good faith."
I am convinced that Respondent would execute a writ-
ten bargaining agreement with the Union, provided it
does not increase Respondent's costs, does not provide
for arbitration or checkoff of union dues, and provided it
otherwise contains Respondent's contract proposals. It
had done so before with another union. Willingness or
desire for a bargaining agreement is one of the recognized
indicia of good-faith bargaining. But, did Respondent
herein merely bargain hard and seek to have the Union
accept its contract terms, or did it give lipservice to the
specific requirement of the Act without, in fact, bargain-
ing with the "good faith" required? I am convinced and
find that Respondent has not bargained in good faith with
the Union.3 This is based on the totality of Respondent's
conduct considered in context with the indicia of bad-
faith bargaining as follows: Following the certification of
the Union in November 1966, Respondent very point-
edly made retaliations against the employees without
adequate or plausible explanation. Respondent singled
out the bargaining unit as a group to receive no Christmas
gifts in December 1966, and gave gifts to all other em-
ployees. Employees' request for a change in working
hours on Friday, December 23, 1966, was brusquely de-
nied on the grounds that "such a change in response to
the request of the employees would be a violation of the
law." In. January 1967, Respondent changed its method
of taking annual inventory with the result that many em-
63
ployees lost worktime, and no reason for the change was
presented. On Jnanuary 9, 1967, the weekly hours of the
employees was reduced by 8 and again on March 13,
1967, they were further reduced by 10, thereby eliminat-
ing a total of 18 overtime hours per week without making
any reparation or consideration for the significant drop in
earnings this occasioned. Respondent rejected a counter-
proposal by the Union that the workweek of 40 hours be
condensed to 4 days - the employees had been working
40 hours in 4 days; and, in fact, Respondent made a con-
tract proposal that "accepting employment from other
concerns for shifts other than the one working for the
company" would be grounds for discharge.
On November 16, 1966, Respondent made it quite
clear to the employees that negotiations would be futile
if they expected to get anything by having the Union as
their bargaining representative. During negotiations
Respondent itemized the cost provisions in the Union's
contract proposal and rejected them as a category stating
that:
We do not believe it is sound business judgment to
even contract to pay existing wages and benefits for
a period of time in the future; but because the law
requires this, we will agree to do so. However, the
law does not require us to agree to pay increased
wages .... However, the union has asked that the
company increase the wages and benefits. The com-
pany does not want to do this because this increase
is money that the company wants to keep for itself.
Respondent is taking an adamant position on cost items
on the contention that "the law does not require" the
making of a concession. Respondent is not approaching
contract negotiations with a free and open mind. Em-
ployees were told at the outset that Respondent "does not
have to agree to change its operations or give the em-
ployees anything just because they have a Union speak-
ing for them," and that Respondent would do no more
than the law requires. Respondent is overlooking the
"good-faith" requirement in Section 8(d) of the Act and
Respondent is using the other provisions of this section
of the Act as limitations on the extent of its collective bar-
gaining, and in so doing Respondent is not bargaining
with the Union in good faith.
Respondent does not state to employees that negotia-
tions would be futile - that is, that no agreement would be
or could be reached; he stated to them on November 16,
1966, that, if they expected to gain anything through the
Union, negotiations would in that respect be futile.
Respondent's announcement to employees of a precon-
ceived adamant position against giving anything to the
employees through the Union constitutes a violation of
Section 8(a)(1) of the Act, and is an indicia of Respond-
ent's bad faith in collective bargaining.
In February 1967, Respondent was required to raise its
minimum wage rate to $1.40 per hour. This required a
change in the beginning wage rate for laborers, but
Respondent used this requirement as a means of increas-
ing wages of all employees 10 cents per hour, thereby
granting a wage increase without utilizing the collective-
bargaining process, and by a means calculated to deny to
the Union any credit for the increase.
All negotiations have been conducted with Attorney
Norman Bennett as the sole representative of Respond-
3 Stark Ceramics , Inc., 155 NLRB 1258, enfd. 375 F.2d 202 (C.A 6);
Roy E . Hanson, Jr , Mfg, 137 NLRB 251
64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ent. However skilled he may be in the profession of law
and the phraseology of legal documents , his knowledge of
the problems at Respondent 's plant is secondhand.
Respondent refused to discuss with the Union its
failure to give Christmas gifts in December 1966. I reject
its contention that the failure to give gifts in 1966 was in
accordance with company policy and that such gifts were
not a condition of employment.4 Furthermore, I find that
such denial of Christmas gifts in 1966 also constitutes a
'discrimination against the employees in the bargaining
unit because of their union activities , and constitues a
violation of Section 8(a)(3) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of the Respondent set forth in section
III, above, occurring in connection with Respondent's
operations described in section I, above, have a close, in-
timate, and substantial relationship to trade, traffic, and
commerce among the several States and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow thereof.
Upon the basis of the foregoing findings of fact and the
entire record in this case, I make the following:
CONCLUSIONS OF LAW
1. K-D Manufacturing Company is an employer en-
gaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
2. Allied Industrial Workers of America , AFL-CIO,
Local No. 487, is a labor organization within the meaning
of Section 2(5) of the Act.
3. All production and maintenance employees at
Respondent 's Waco , Texas , plant, including shipping and
receiving employees , but excluding office clerical em-
ployees , draftsmen , professional employees , guards, and
supervisors as defined in the Act, constitute a unit ap-
propriate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act.
4. At all times since November 17, 1966 , the Union
has been the execlusive representative of all employees
of Respondent in the aforesaid appropriate unit for the
purposes of collective bargaining within the meaning of
Section 9(a) of the Act.
5. By announcing a no-solicitation rule prohibiting sol-
icitation on employee time on company property, and by
threatening employees with discharge for violation of said
rule, as described in section III, C , Respondent has en-
gaged in an unfair labor practice in violation of Section
8(a)(1) of the Act.
6. By threatening employees that Respondent would
give them nothing through the Union as their bargaining
representative , Respondent has engaged in an unfair
labor practice in violation of Section 8(a)(1) of the Act.
7. By discriminatorily denying Christmas gifts to em-
ployees in the appropriate unit and by making a change in
its policy on Christmas gifts in December 1966, and by
failing and refusing to notify and discuss this matter with
the Union, Respondent has engaged in unfair labor prac-
tices within the meaning of Section 8 (a)(1), (3), and (5) of
the Act.
8. By refusing to bargain collectively in good faith with
the Union , as described in section III, E , F, and G,
Respondent has thereby engaged in an unfair labor prac-
tice in violation of Section 8(a)(5) and ( 1) of the Act.
9. The aforesaid unfair labor practices affect com-
merce within the meaning of Section 2(6) and (7) of the
Act.
THE REMEDY
Having found that Respondent engaged in certain un-
fair labor practices, I shall recommend that it cease and
desist therefrom, and that it take certain affirmative ac-
tion as provided in the Recommended Order below,
which I find necessary to remedy and to remove the ef-
fects of the unfair labor practices and to effectuate the
policies of the Act.
Having found that Respondent discriminatorily denied
Christmas gifts to all employees in the appropriate unit in
December 1966, I shall recommend that Respondent
make each employee who was on the payroll on
December 24, 1966, whole for loss of earnings suffered
by reason of this discrimination against them, by paying
to each of them a sum of money equal to that which
Respondent would normally have spent on each Christ-
mas gift, together with interest thereon at the rate of 6
percent per annum as prescribed in Isis Plumbing &
Heating Co., 138 NLRB 716.
On the matter of the reduction in hours per week from
58 to 40, there is no allegation nor proof that this was dis-
criminatorily motivated rather than based on economic
considerations; Respondent advised the Union in ad-
vance about the reductions in hours and the parties con-
ferred and bargained on the matters. Although I have
found that Respondent has not bargained with the Union
in good faith, I do not believe that under the circum-
stances herein a remedy providing for the return to the
status quo ante on hours, that is a return to 58 hours per
week, would be appropriate.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact , conclu-
sions of law , and the entire record, and pursuant to Sec-
tion 10(c) of the Act, I hereby recommend that Respond-
ent, K-D Manufacturing Company, its officers, agents,
successors, and assigns , shall:
1. Cease and desist from:
(a) Announcing or promulgating a no-solicitation rule
which prohibits union solicitation on employee time and
on company property , and threatening discharge for
union solicitation in violation of said rule.
(b) Threatening employees that they would get
nothing through the Union as their bargaining representa-
tive.
(c) Discouraging membership in Allied Industrial
Workers of America, AFL-CIO, Local No. 487, or any
other labor organization, by denying Christmas gifts to
employees or by otherwise discriminating against em-
ployees in regard to their hire and tenure of employment
or any term or condition of employment.
"The Beacon Journal Publishing Company, 164 NLRB 734,65 LRRM
1126; N.L.R.B. v. Exchange Parts Co., et al., 339 F.2d 829 (C.A. 5).
K-D MANUFACTURING COMPANY
(d) Making changes in its policy on Christmas gifts
without first notifying and bargaining with the Union on
said matter, or otherwise refusing to bargain collectively
with said Union as the exclusive bargaining representa-
tive of its employees in the following described ap-
propriate unit:
All production and maintenance employees at
Respondent's Waco, Texas, plant, including shipping
and receiving employees, but excluding office cleri-
cal employees, draftsmen, professional employees,
guards, and supervisors as defined in the Act.
(e) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise of
their rights to self-organization, to form, join, or assist the
above-named Union or any other labor organization of
their choice, and to engage in any other concerted activi-
ties for the purpose of collective bargaining or other mu-
tual aid or protection as guaranteed by Section 7 of the
Act, or to refrain from any or all of such activities.
2. Take the following affirmative action which I find
will effectuate the policies of the Act:
(a) Upon request, bargain collectively with Allied In-
dustrial Workers of America, AFL-CIO, Local No. 487,
as the exclusive bargaining representative of all em-
ployees in the above-described bargaining unit, and, if an
understanding is reached, embody such understanding in
a signed agreement.
(b) Make whole all employees in the appropriate bar-
gaining unit who were on the payroll on December 24,
1966, for loss of earnings, in the form of Christmas gifts,
that they suffered as a result of the discrimination against
them, in the manner set forth in the section of this Deci-
sion entitled "The Remedy."
(c) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records,
timecards, personnel records and reports, and all other
records necessary or useful in computing the amount of
earnings lost by each employee.
(d) Post at its plant in Waco, Texas, copies of the at-
tached notice marked "Appendix."5 Copies of said
notice, on forms provided by the Regional Director for
Region 16, after being duly signed by an authorized
representative, shall be posted by it immediately upon
receipt thereof, and be maintained by it for 60 consecu-
tive days thereafter, in conspicuous places, including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respon-
dent to insure that said notices are not altered, defaced, or
covered by any other material.
(e) Notify the Regional Director for Region 16, in
5 In the event that this Recommended Order is adopted by the Board,
the words "a Decision and Order" shall be substituted for the words "the
Recommended Order of a Trial Examiner" in the notice. In the further
event that the Board's Order is enforced by a decree of a United States
Court of Appeals, the words "a Decree of the United States Court of Ap-
peals Enforcing an Order" shall be substituted for the words "a Decision
and Order "
6 In the event that this Recommended Order is adopted by the Board,
this provision shall be modified to read. "Notify the Regional Director for
Region 16, in writing, within 10 days from the date of this Order, what
steps Respondent has taken to comply herewith "
65
writing, within 20 days from the date of receipt of this
Decision, what steps Respondent has taken to comply
herewith.6
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Ex-
aminer of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our em-
ployees that:
WE WILL NOT announce or promulgate a rule
prohibiting union solicitation on employee time on
company property, and we will not threaten
discharge or other disciplinary action for engaging in
union solicitation on employee time on company pro-
perty.
WE WILL NOT discourage membership in Allied
Industrial Workers of America, AFL-CIO, Local
No. 487, or any other labor organization of our em-
ployees, by denying Christmas gifts to employees or
by discriminating against them in any other manner
in regard to hire or tenure of employment or other
terms and conditions of employment.
WE WILL NOT threaten employees that they will
get nothing through the Union as their bargaining
representative.
WE WILL NOT make changes in our policy of giving
Christmas gifts to employees without first notifying
and bargaining with the above-named Union con-
cerning such matters.
WE WILL NOT in any other manner interfere with,
restrain, or coerce our employees in the exercise of
their rights to self-organization, to form labor or-
ganizations, to join or assist the above-named Union
or any other labor organization, to bargain collective-
ly through representatives of their own choosing, and
to engage in other concerted activities for the pur-
pose of collective bargaining or other mutual aid or
protection, and to refrain from any and all such ac-
tivities.
WE WILL, upon request, bargain collectively with
Allied Industrial Workers of America, AFL-CIO,
Local No. 487, as the exclusive bargaining represent-
ative of all employees in the unit described below
with respect to rates of pay, wages, hours of employ-
ment, and other terms and conditions of employ-
ment, and, if an understanding is reached, embody
such understanding in a written and signed agree-
ment. The bargaining unit is:
All production and maintenance employees at
our Waco, Texas, plant, including shipping and
receiving employees, but excluding office cleri-
cal employees, draftsmen, professional em-
ployees, guards, and supervisors as defined in
the Act.
WE WILL make whole all employees in the bargain-
ing unit who were on the payroll on December 24,
1966, for loss of earnings suffered by them by reason
of our discriminatory refusal to give Christmas gifts
to said employees that year.
All our employees are free to become, remain, or
66 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
refrain from becoming or remaining , members of the
above-named or any other labor organization.
K-D MANUFACTURING
COMPANY
(Employer)
Dated By
(Representative) (Title)
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.
If employees have any question concerning this notice
or compliance with its provisions , they may communicate
directly with the Board 's Regional Office, Federal Office
Building, Room 8A24, 819 Taylor Street, Fort Worth,
Texas 76102 , Telephone 334-2921.