K-Mart Corp.

National Labor Relations Board - Board Decisions

Jun 21, 2000

331 N.L.R.B. 362 (N.L.R.B. 2000)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 362
Kmart Corporation and Union of Needletrades, In-
dustrial, and Textile Employees, AFL–CIO,
CLC. Case 11–CA–17778
June 21, 2000
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
LIEBMAN AND BRAME
On August 14, 1998, Administrative Law Judge Par-
gen Robertson issued the attached decision. The Charg-
ing Party filed exceptions and a supporting brief, and the
Respondent filed cross-exceptions and a supporting and
answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided, for
the reasons set forth below, to affirm the judge’s rulings,1
findings, and conclusions, and to adopt the judge’s rec-
ommended Order.
In 1996 the Respondent and the Union reached agree-
ment on their first collective-bargaining agreement,
which was effective from July 28, 1996,2 through July
27, 1999. Appendix A of the contract specifies the wage
rates for all unit jobs, varying according to length of em-
ployment, during the first year of the contract. For the
second and third years of the contract, the agreement
specifies only the wage rates for “top out”3 employees.
Top out employees were scheduled to receive raises of
75 cents per hour in the second and third years of the
contract. The contract is silent as to wage rates for non-
top out employees for the second and third years.
In July 1997 the Respondent granted a 75-cent-wage
increase to top out employees, but provided no raises to
other unit employees. The Union and the General Coun-
sel contend that the parties agreed at the bargaining table
to an across-the-board wage increase of 75 cents per hour
for the second and third years of the contract. The Re-
spondent argued that the contract required second and
third year raises for top out employees only. We agree
for the reasons that follow.
The issue presented in this case turns on the meaning
of the wage chart in Appendix A of the parties’ collec-
tive-bargaining agreement. The Board has held that in
matters of contract interpretation, “the parties’ actual
intent underlying the contractual language in question is
always paramount.” Mining Specialists, 314 NLRB 268
(1994). Intent is determined by examining “both the
contract language itself and relevant extrinsic evidence,
such as a past practice of the parties in regard to the . . .
implementation of the contract provision in question, or
the bargaining history of the provision itself.” Id. at 269.
Accordingly, to determine the meaning of the wage
chart, we must examine the literal language of Appendix
A, as well as the extrinsic evidence regarding the parties’
intent.

1 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951). We have carefully examined the record and find no
basis for reversing the findings.
2 All subsequent dates refer to 1996 unless specified otherwise.
3 It is undisputed that this term denotes employees who have reached
the highest level of pay for their job based on length of service in that
position. The Respondent’s employees top out in their jobs at 2 years.
The wage chart in Appendix A is reproduced in the at-
tached judge’s decision. Second and third year raises are
mentioned for top out employees only. The chart does
not specify raises in the second and third years for other
unit employees. Thus, the express terms of the contract
required the Respondent to grant a wage increase to top
out employees only. Because this contract represents the
first agreement reached by the parties for unit employees,
there is no past practice as such. Evidence was pre-
sented, however, regarding how the contract was inter-
preted. In particular, the Union relies on remarks by a
human resource supervisor to new hires that they would
receive a 75-cent increase in July 1997. Given that this
supervisor did not participate in the negotiations and that
the Respondent did not, in fact, grant the 75-cent raise to
the new hires, we find that the supervisor’s comments are
not probative of the parties’ intent.4
Turning to the bargaining history, the Respondent’s
bargaining notes support its position that only top out
employees were to receive second and third year wage
increases. On May 23, the Respondent presented a writ-
ten wage proposal, which used the same format as the
wage chart to which the parties eventually agreed. The
notes of Peter Palmer, the Respondent’s lead negotiator,
indicate that he explained that the proposal was for a 50-
cent increase for all unit employees, but that the second
and third year increases of 25 cents were “for the top out
only.”5 According to the notes, Bruce Raynor, secre-
tary/treasurer of the International Union and one of the
negotiators, replied, “We understand the wage proposal,
what about the benefit package.”
Some of the Union’s wage proposals confirm Raynor’s
acknowledgement that he understood that the Respon-
dent’s wage chart provided second and third year in-
creases for top out employees only. On February 6 and
May 9, the Union admittedly proposed increases for top
out employees.6 These Union proposals used language
and format similar to that contained in the final contract.
4 The Union also relies on a company press release issued July 25,
1996. We agree with the judge, however, that the press release does
not indicate whether employees other than top out employees were to
receive a wage increase at the beginning of the second year of the con-
tract.
5 In subsequent negotiations, the amounts of the second and third
year increases were increased to 75 cents.
6 Raynor explained that the Union was attempting to compromise.
331 NLRB No. 58
KMART CORP. 363
In sum, the bargaining history shows that the final
agreement utilized language and format that both parties
used during negotiations to propose increases for top out
employees only. This evidence strongly suggests that the
parties intended the final agreement to provide increases
for top out employees only in the second and third years.
The Union claims, based on some additional bargain-
ing history evidence, that the contract language was in-
tended to provide across-the-board raises for all 3 years
of the contract. Thus, the Union notes that the Respon-
dent gave its unit employees two across-the-board 50-
cent-wage increases during the negotiations leading up to
the July agreement: one in March 1996 and one in July
1996 when agreement was reached on the contract. On
July 23 the last bargaining session, Palmer offered a final
proposal including an immediate across-the-board 50-
cent-wage increase (the second of the two 50-cent in-
creases) and second and third year increases of 75 cents.
The Respondent’s written proposal reads like the con-
tract language, referring only to top out employees for
the second and third years of the contract. During the
bargaining session, and after the Union caucused and
decided to accept the Respondent’s offer, Rita Cockman,
an employee on the union bargaining committee, asked if
“this raise” was across-the-board. The Respondent’s
general manager, Dale Rosser, replied that “it was across
the board.”
This exchange gives rise to an ambiguity regarding
whether Rosser was referring to the 50-cent-wage in-
crease or the entire package of three wage increases
when he said “it was across the board.” In light of the
plain language of the Respondent’s proposal which, like
the contract language, specified second and third year
wage increases for top out employees only, and the bar-
gaining history evidence discussed above showing that
the Union understood the limited scope of the Respon-
dent’s wage proposal, we conclude that Rosser’s am-
biguous remark is insufficient to show that the parties
intended all employees to receive a wage increase in the
second and third years of the contract.
Accordingly, we conclude that the collective-
bargaining agreement provided for second and third year
wage increases for top out employees only, and that,
consequently, the Respondent did not violate the Act by
failing to grant across-the-board increases on July 28,
1997.
ORDER
The recommended Order of the administrative law
judge is adopted, and the complaint is dismissed.

Jasper Brown, Esq., for the General Counsel.
Charles P. Roberts III, Esq., of Greensboro, North Carolina, for
Respondent.
David Prouty, Esq., of New York, New York, for the Union.
DECISION
PARGEN ROBERTSON, Administrative Law Judge. This
hearing was held on June 24, 1998, in Greensboro, North Caro-
lina. The charge was filed on January 7 and amended on April
10, 1998. A complaint was issued on April 20, 1998. This deci-
sion is based on review of the entire record and briefs filed by
Respondent, the Union, and the General Counsel.
JURISDICTION
Respondent admitted that it is a Michigan corporation with a
distribution center located in Greensboro, North Carolina,
where it is engaged in the distribution of products to retail
stores in North Carolina, South Carolina, Virginia, West Vir-
ginia, and Tennessee. It admitted that during the past 12
months, a representative period, at its Greensboro, North Caro-
lina distribution center, it purchased and received goods and
materials valued in excess of $50,000, and it sold and shipped
products valued in excess of $50,000, directly to and from
points outside North Carolina. It admitted that it has been an
employer engaged in commerce within the meaning of Section
2(6) and (7) of the National Labor Relations Act (Act), at mate-
rial times.
Labor Organization
Respondent admitted Union of Needletrades, Industrial, and
Textile Employees, AFL–CIO, CLC, has been a labor organiza-
tion within the meaning of Section 2(5) of the Act, at all mate-
rial times.
The Unfair Labor Practice Allegations
Respondent admitted that the following employees constitute
an appropriate unit for the purposes of collective bargaining
and that the Union has been their exclusive collective-
bargaining representative at all times since September 20, 1993:

All hourly regular full-time and regular part-time associates,
including plant clerical and all hourly paid associates with the
job title of “group leaders,” receiving “group leaders,”
casepack “group leaders,” repack “group leaders,” shipping
“group leaders,” maintenance “group leaders,” merchandising
“group leaders,” loss prevention “group leaders,” traffic
“group leaders,” accelerated flow through “group leaders,”
quality assurance “group leaders,” and non-con “group lead-
ers,” employed at the Respondent’s Greensboro, North Caro-
lina distribution center, excluding all office clericals, profes-
sionals, technical associates, over-the-road truck drivers,
salespersons, guards, and supervisors as defined in the Act.

The Respondent and the Union are parties to a collective-
bargaining agreement, which is effective from July 28, 1996,
through July 27, 1999.
That contract (R. Exh. 3) included a zipper clause which
stated among other things that the agreement contains the entire
understanding, undertaking, and agreement of the Company
and the Union.
At the end of the first contract year, around July 28, 1997,
Respondent granted a 75-cent-wage increase to all its employ-
ees with 2 or more years of service. Employees with less than 2
years of service were not granted a wage increase. That action
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 364
provoked the instant controversy. The Union and the General
Counsel contend that all employees should have received a
wage increase in July 1997.
The wage provisions of the contract are contained in appen-
dix “A” which includes the following:

WAGES
FIRST YEAR
GWN & GM Clerical Skill Main HSKP
Start $7.75 $7.00 $11.00 $6.50
90 Days 8.00 7.25 11.25 6.75
6 Months 8.50 7.75 11.75 7.25
1 Year 8.75 8.00 12.00 7.50
18 Months 9.00 8.50 12.50 8.00
2 Years 9.50 9.00 13.00 8.50
Second Year (Effective Date Based on Contract)
Top Out 10.25 9.75 13.75 9.25
Third Year (Effective Date Based on Contract)
Top Out 11.00 10.50 14.50 10.00

There was evidence regarding the intent of the parties during
negotiations. Bruce Raynor is secretary/treasurer of the Interna-
tional Union. He was involved in negotiations with Respon-
dent. The parties negotiated for about 3 years before reaching
an agreement during July 1996. Before that an agreement was
reached for Respondent to grant all employees a 50-cent-wage
increase in March 1996. An additional 50-cent-wage increase
was given to all employees when an agreement was reached in
July 1996. Raynor testified there was never any discussion
about limiting pay increases to top out rate. Bruce Raynor
agreed that he was familiar with the term “top out” and that the
top out in the parties’ contract was at 2 years. He testified that
he believes there was an error in appendix A of the contract and
that the second and third year raises should be “across the
board” rather than “top out.” That appendix A includes only an
abbreviated form of the wage agreement showing only top out
when it was known that all the other wage steps would be in-
cluded. He recalled that General Manager Dale Rosser re-
sponded to a question during negotiations to the effect that the
second and third year raises were across the board.
The Union made written economic proposals on February 6
(R. Exh. 5) and May 9, 1996 (R. Exh. 6), which specified that
each of the wage rates proposed was for the “top rate of pay.”
However, Bruce Raynor testified that when Respondent moved
from 50 cents to 75 cents in negotiations in the latter years of
the contract, the term “top out” was never used.
Cameron Hodge was formerly Respondent’s human re-
sources manager. He was involved in contract negotiations on
February 6 as well as during May 1996. Hodge testified that
Union Representative Raynor presented a wage proposal on
February 6 identified as Respondent Exhibit 5. Raynor ex-
plained that top out rates were for the second and third year
employees. He said something to the effect that he felt the
lower progression rates were where they should be. Hodge
denied that anyone with Respondent ever said that the proposed
second and third year wage increases were for anyone other
than top out employees.
Former General Manager Dale Rosser was present during
negotiations for the 1996 contract. Rosser denied that Peter
Palmer ever said Respondent’s proposed increases for the sec-
ond and third years were anything but top out increases. Rosser
denied that he ever said that the proposed second and third year
wage increases were across the board. He did not recall Rita
Cockman asking if wage proposals were across the board.
Rosser testified that employees came to him after July 1997 and
asked why they had not received a wage increase. He told the
employees that was a corporate matter and that he would check
on it. When he got back to the employees he told them the July
raise was only for top out employees.
Respondent’s vice president, Labor Relations Assistant Gen-
eral Counsel Peter Palmer attended negotiations from April
1996. He was lead negotiator. He presented the following writ-
ten wage proposal to the Union on May 23, 1996 (R. Exh. 11):

WAGES
FIRST YEAR
GWN & GM Clerical Skill Main HSKP
Start $7.75 $7.00 $11.00 $6.50
90 Days 8.00 7.25 11.25 6.75
6 Months 8.50 7.75 11.75 7.25
1 Year 8.75 8.00 12.00 7.50
18 Months 9.00 8.50 12.50 8.00
2 Years 9.50 9.00 13.00 8.50
Second Year (Effective Date Based on Contract)
Top Out 9.75 9.25 13.25 8.75
Third Year (Effective Date Based on Contract)
Top Out 10.00 9.50 13.50 9.00

Palmer denied that he ever said that second and third year
raises would be across the board or that those raises would be
for anyone other than top out people. On July 23 Palmer pre-
sented three wage proposals. The first one had been prepared
before the meeting (R. Exh. 7):

WAGES
FIRST YEAR
GWN & GM Clerical Skill Main HSKP
Start $7.75 $7.00 $11.00 $6.50
90 Days 8.00 7.25 11.25 6.75
6 Months 8.50 7.75 11.75 7.25
1 Year 8.75 8.00 12.00 7.50
18 Months 9.00 8.50 12.50 8.00
2 Years 9.50 9.00 13.00 8.50
Second Year (Effective Date Based on Contract)
Top Out 10.00 9.50 13.50 9.00
Third Year (Effective Date Based on Contract)
Top Out 10.50 10.00 14.00 9.50

The second July 23 proposal was prepared on Attorney
Bruce Petesch’s personal computer (R. Exh. 8):

WAGES
FIRST YEAR
GWN & GM Clerical Skill Main HSKP
Start $7.75 $7.00 $11.00 $6.50
90 Days 8.00 7.25 11.25 6.75
6 Months 8.50 7.75 11.75 7.25
1 Year 8.75 8.00 12.00 7.50
18 Months 9.00 8.50 12.50 8.00
2 Years 9.50 9.00 13.00 8.50
Second Year (Effective Date Based on Contract)
Top Out 10.25 9.75 13.75 9.25
Third Year (Effective Date Based on Contract)
Top Out 10.75 10.25 14.25 9.75

KMART CORP. 365
Palmer’s final proposal was accepted by the Union on ratifi-
cation and is included in the collective-bargaining agreement
(R. Exh. 3):

WAGES
FIRST YEAR
GWN & GM Clerical Skill Main HSKP
Start $7.75 $7.00 $11.00 $6.50
90 Days 8.00 7.25 11.25 6.75
6 Months 8.50 7.75 11.75 7.25
1 Year 8.75 8.00 12.00 7.50
18 Months 9.00 8.50 12.50 8.00
2 Years 9.50 9.00 13.00 8.50
Second Year (Effective Date Based on Contract)
Top Out 10.25 9.75 13.75 9.25
Third Year (Effective Date Based on Contract)
Top Out 11.00 10.50 14.50 10.00

Respondent has employed Rita Cockman and Robyn Estes
since 1992. Both were members of the 1996 union negotiating
committee. Cockman attended a negotiation session in July
1996 when Respondent made a wage proposal. Subsequently
Peter Palmer said the wage proposal was across the board.
Cockman asked what across the board meant and General Man-
ager Dale Rosser replied, it meant that everybody gets it.
Cockman’s notes were introduced (GC Exh. 2).
Estes recalled that after changing proposals and a caucus, Pe-
ter Palmer read a wage proposal to the Union committee.
Palmer read that “there was an across the board fifty cent raise
which would go into effect immediately, and then there was to
be two seventy-five cent raises on the anniversary of the con-
tract the next two years.” Rita Cockman asked, if this was
across the board, Dale Rosser said it was and no one else from
the Companyside said anything.
Respondent presented several witnesses including Dale
Rosser, Peter Palmer, and Bruce Petesch, that denied anyone
from Respondent said anything to the effect that the second and
third year wage increases were across the board.
After the parties reached agreement, the Union and Respon-
dent exchanged drafts of the contract before printing. Bruce
Petesch testified that he and Union Attorney David Prouty
worked together to produce the final draft of the contract.
There was evidence regarding how the contract was inter-
preted. Tyrone Holloman Jr. has worked for Respondent since
December 1996. He along with about 5 other new employees,
attended an orientation session conducted by Bonnie Welch.
Respondent admitted that Bonnie Welch is a human resource
generalists. Welch explained several matters including wages.
She told the employees they would get a 50-cent raise in 3
months, another 25 cents 3 months later, and then in July they
would get their union raise of 75 cents. Holloman did not re-
ceive a 75-cent raise in July. During a fall 1997 employees’
meeting, Holloman asked General Manager William Richard-
son about their failure to get the July raise. Richardson an-
swered that he did not know but that he would get back to Hol-
loman.
Natroy Courts was hired in April 1997. Bonnie Welch con-
ducted the orientation session. Welch went over the employees’
handbook. Welch said the employees would be starting at $7.75
an hour and there would be a plant raise of 75 cents in July.
Travis Murphy has worked for Respondent since January 1997.
During his orientation session Robin Deel told Murphy and five
other new employees, their first raise would be in 3 months and
then 6 months and everybody would get a union raise in July.
Edgar Grayson has worked since August 23, 1996. Bonnie
Welch held his orientation session which included 4 more em-
ployees. Welch told the employees they would get a 50-cent
raise within 90 days. She said they would get a 75-cent raise in
July that was intended for everyone. Grayson did not receive
that 75-cent raise and he complained to the Union in September
1997.
Bonnie Welch has worked for Respondent since 1992. She is
a human resources generalist on the first shift and supervises
the payroll department, accounts payable. She interviews new
hires and is involved in the orientation of new employees. Dur-
ing interviews she discussed wages. After Respondent signed
the collective-bargaining agreement she used a laminated letter
showing wages (R. Exh. 2) and explained what the applicant’s
wages would be for the first 2 years. She did not say anything
about the second and third year wages even though both are
listed on the sheet she used in interviews. On occasion Welch
conducted the orientation interview. She testified that she did
not discuss wages in that interview but if an employee asked
something about wages she invited the employee to her office
after orientation, where she showed the employee the laminated
sheet on wages (R. Exh. 2). Bonnie Welch denied that she ever
told applicants or employees they would get a 75-cent-union -
wage increase during July.
Welch recalled that some employees asked about the July
1997 raise. They asked which employees would get the raise
and some said they felt they should have received the raise. She
admitted that she told some employees that she would check on
it and get back to them. She did check with Dale Rosser (gen-
eral manager). Rosser told her that he would have to look at his
notes and get back to her. However, Rosser did not answer the
question until after the July 1997 wage raise was granted.
Robin Deel testified that she is an accounts payable clerk,
not a supervisor and that she has never had a role in hiring,
interviewing, or giving orientation to employees. She denied
that she has ever told any employee they will receive a 75-cent
raise after the second and third year of the contract. The Gen-
eral Counsel withdrew allegations regarding Robin Deel.
Respondent called Rankin who was a bargaining unit em-
ployee before September 1997. Rankin, Robyn Estes, and sev-
eral employees were in the repack office before Rankin became
supervisor. Robyn Estes explained that Respondent was grant-
ing the July 1997 pay increase to only employees with 2 or
more years seniority. She said that was not fair and they were
going to fight and try to get everybody the 75-cent raise.
FINDINGS
Credibility
The evidence is not in dispute regarding contract proposals
made by the two parties. I find that the Union made written
contract proposals on February 6 (R. Exh. 5) and May 9, 1996
(R. Exh. 6). Respondent made a contract proposal on May 23
(R. Exh. 11), and three proposals on July 23, 1996 (R. Exh. 7,
8, and 3). Both of the union proposals indicated that each figure
indicates the proposed top rate of pay. All Respondent’s pro-
posals listed only “Top Out” for the second and third year wage
increases.
There was a dispute regarding discussion during negotia-
tions. Bruce Raynor testified that General Manager Rosser said
that Respondent’s July 23 second and third year wage proposal
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 366
applied across the board. Rita Cockman testified that Respon-
dent Negotiator Peter Palmer said the wage proposal was across
the board and she asked what across the board meant. General
Manager Dale Rosser replied that it meant that everybody gets
it.
Robyn Estes testified that Peter Palmer made a verbal pro-
posal during the meeting which included “an across the board
fifty cent raise which would go into effect immediately, and
then there would be two seventy-five cent raises on the anni-
versary date of the contract the next two years.” Some time
later Rita Cockman asked is this raise across the board and Dale
Rosser said it was across the board.
Respondent’s witnesses Dale Rosser, Peter Palmer, and
Bruce Petesch denied that anyone for Respondent said the sec-
ond and third year wage proposals were across the board.
In consideration of what actually occurred during the July 23
negotiations, I have tried to understand the atmosphere of that
meeting and the actual impact of various conversations. The
record showed that Respondent had three representatives.
Those three were Peter Palmer, Bruce Petesch, and Dale
Rosser. The union negotiating team included Union Represen-
tatives Bruce Raynor, Dave Prouty, Anthony Ramano, Mike
Zucker, Tony Gallifonio, and Mike Freeman and 12 or 13 em-
ployees on the regular negotiating committee. There were at
least 21 people from both sides. Against that background I am
not convinced to find that everyone was aware of what was said
between Rita Cockman and Dale Rosser. I credit the testimony
that Cockman asked, and General Manager Dale Rosser re-
plied, that Palmer’s proposal was across the board. To the ex-
tent there was confusion between Raynor, Cockman, and Estes,
I credit the testimony of Robyn Estes. Estes demonstrated a
better recollection of what was said between Cockman and
Rosser. I do not credit Dale Rosser’s denial that he made such a
comment.
However, I do not find that Bruce Raynor, Rita Cockman,
Peter Palmer, and Bruce Petesch were being untruthful in their
testimony regarding what was or was not said in that meeting
about across the board. Their testimony may show what each of
those witnesses actually believed considering the number of
people in the room and the apparent confusion during the final
part of that meeting. In making that determination I have relied
on the testimony of Estes that no one from Respondent other
than Rosser, said anything after Cockman asked about across
the board.
There was also a dispute as to whether Respondent, through
a supervisor, told new hires they would receive a 75-cent-wage
increase in July. Employees Tyrone Holloman Jr., Natroy
Courts, and Edgar Grayson testified that Supervisor Bonnie
Welch talked to them in orientation sessions and that Welch
said that everyone would receive a 75-cent raise in July. Bonnie
Welch denied that she made those statements. In view of their
demeanor and the full record, I am convinced that Holloman,
Courts, and Grayson testified truthfully. I credit their testimony
that Bonnie Welch told employees that all employees would
receive a 75-cent raise in July.
Conclusions
The General Counsel argued that Respondent unilaterally
changed its terms and conditions of employment by refusing to
grant unit employees other than top out employees, a second
year wage increase.
The Board explained an employer’s obligation before mak-
ing unilateral changes in Milwaukee Spring II, 268 NLRB 601,
602 (1984) (footnotes omitted):

Section 8(a)(5) and 8(d) establish an employer’s obli-
gation to bargain in good faith with respect to “wages,
hours, and other terms and conditions of employment” . . .
before reaching a good-faith impasse in bargaining. Sec-
tion 8(d) imposes an additional requirement when a collec-
tive-bargaining agreement is in effect and an employer
seeks to “modif[y] . . . the terms and conditions contained
in the contract: the employer must obtain the union’s con-
sent before implementing the change.

Here, a collective-bargaining agreement was in effect. The
question here, is, did Respondent modify the terms contained in
that agreement.

“where . . . the dispute is solely one of contract interpretation,
and there is no evidence of animus, bad faith, or an intent to
undermine the Union, (the Board) will not seek to determine
which of two equally plausible contract interpretations is cor-
rect.” Atwood & Morrill Co., 289 NLRB 794, 795 (1988);
cited in Westinghouse Electric Corporation, 313 NLRB 452
(1993) enfd. 1995 U.S. App. LEXIS 1023; 130 Lab. Cas.
(CCH) p11,366 (4th Cir. 1995).

The instant dispute is solely one of contract interpretation
and there is no evidence of animus, bad faith, or intent to un-
dermine the Union. Therefore, I must consider whether Re-
spondent acted pursuant to a plausible interpretation of relevant
contractual provisions in limiting its July 1997 wage increase to
top out employees.
The relevant contract provisions are:
Second Year (Effective Date Based on Contract)
Top Out $10.25 $9.75 $13.75 $9.25
Third Year (Effective Date Based on Contract)
Top Out 11.00 10.50 14.50 10.00

Respondent granted all top out employees a wage increase at
the beginning of the second year of the contract but failed to
grant that wage increase to unit employees that were not top out
employees. Respondent argued that is a plausible interpretation
of the contract.
As shown above, the contract does mandate a wage increase
for top out employees at the beginning of the second year. Re-
spondent granted that wage increase. The contract is silent as to
whether any other unit employees are entitled to a wage in-
crease at that time. Respondent did not grant those employees a
wage increase.
Nevertheless, the General Counsel and the Union contend
that the contract was meant to include not only top out employ-
ees but also all unit employees. The General Counsel cited
Conoco, Inc., 318 NLRB 60 (1995), for the proposition that the
Board in interpreting a contract, attempts to determine the in-
herent plausibility of the term or clause in question. There, the
Board cited Mining Specialists, 314 NLRB 268, 269 (1994), in
holding:

In contract interpretation matters like this, the parties’
actual intent underlying the contractual language in ques-
tion is always paramount, and is given controlling weight.
To determine the parties’ intent, the Board normally looks
to both the contract language itself and relevant extrinsic
evidence, such as a past practice of the parties in regard to
KMART CORP. 367
the effectuation or implementation of the contract provi-
sion in question, or the bargaining history of the provision
itself. (Footnotes omitted.)

In consideration of the General Counsel’s argument, I am
aware of Board precedent for refusing to consider parol evi-
dence in instances where contract language is not ambiguous.
In CJC Holdings, Inc., 315 NLRB 813 (1994), enfd. 97 F.3d
114 (5th Cir. 1996), the Board agreed with the administrative
law “judge’s refusal to allow parol evidence concerning art. X,
sec. 3, of the contract, as that contract language is not ambigu-
ous.” Here, it does not appear that the contract language is
ambiguous. Respondent granted wage increases to the top out
employees and that is all that is required by the contract.
Nevertheless, I shall consider the points raised by the Gen-
eral Counsel and the Union. The General Counsel argued that
the wage scale language of the contract is ambiguous on its face
in that (1) since the language does not include all the unit em-
ployees it is deficient for lack of specificity and (2) Respon-
dent, itself, interpreted the contract to require second and third
year wage increases to all unit employees. As to point (2), the
General Counsel cited a press release by Respondent (U. Exh.
2) arguing that the fact that press release made no mention of
limiting the annual wage increase to top out employees, showed
Respondent interpreted the contract to require wage increases
for everyone. Additionally, employees Tyrone Holloman Jr.,
Natroy Courts, and Edgar Grayson credibly testified that Su-
pervisor Bonnie Welch talked to them in orientation sessions
and that Welch said that everyone would receive a 75-cent raise
in July.
In regard to the General Counsel’s first point, no cases were
cited and I am unaware of any that stand for the proposition
that a contract is ambiguous which shows that the parties agree
to a clause which is silent on a particular point.
As to the General Counsel’s second point, Union Exhibit 2
does not include language regarding whether employees other
than top out, were to receive a wage increase at the beginning
of the second year of the contract. It does nothing more than the
language in the contract to clear up any concerns on that point.
I do not agree that Respondent’s failure to mention a point left
silent in the contract demonstrates that Respondent interprets
the contract to require affirmative action on that silent point.
The record did establish that Supervisor Bonnie Welch told
some new hires that they would receive the July wage increase.
That evidence may not establish past practice in regard to the
effectuation or implementation of the contract provisions in
question but, it does tend to show intent to grant the wage in-
crease to all the employees. Cf. Mining Specialists, 314 NLRB
268, 269 (1994). As shown here, since this was the first con-
tract between the parties and this was the first occasion for a
July wage increase, there was no actual past practice of effec-
tuation or implementation. Despite Welch’s comments to new
employees the applicable rule of law appeared in a recent court
of appeals opinion:

Where the dispute is solely one of contract interpreta-
tion, and there is no evidence of animus, bad faith, or an
intent to undermine the Union, the Board properly de-
clined to determine which of two equally plausible con-
tract interpretations is correct. In such cases, the appropri-
ate action for the Board is to dismiss a complaint allega-
tion of unlawful unilateral change. (Footnotes omitted.)
Salaried Employees Association of the Baltimore Division
v. NLRB, 1995 U.S. App. LEXIS 1023; 130 Lab. Cas.
(CCH) P11,366 (4th Cir. 1995).

Moreover, cases cited by the General Counsel must be dis-
tinguished. Mining Specialists, 314 NLRB 268, 269 (1994),
involved, “evidence of animus, bad faith, or an intent to un-
dermine the Union. . . .” There was no evidence of animus, bad
faith or intent to undermine the Union in the instant case. In
Conoco, Inc., 318 NLRB 60 (1995), the Board found that the
contract specifically prohibited the action taken by the em-
ployer and that the employer did not elect an equally plausible
interpretation of the contract provisions in taking action to in-
crease the number of progression units. Here, the contract was
silent on the point at issue and I find that Respondent did elect
an equally plausible interpretation of the contract. The Supreme
Court in NLRB v. C & C Plywood Corp., 385 U.S. 421 (1967),
found that the court of appeals erred in deciding that “a provi-
sion in the agreement between the union and the employer,
which “arguably” allowed the employer to institute the pre-
mium pay plan, divested the Board of jurisdiction to entertain
the union’s unfair labor practice charge.” Here, the issue was
not arguable interpretation of the contract provisions and the
finding here involved consideration of the contract provision.
The General Counsel also argued that evidence of the July
23 negotiation session proved that the parties agreed to include
all employees. As shown above, I credit the testimony of
Robyn Estes. Estes’ full testimony on that point included:

A. On the last day we were negotiating the wage set-
tlement. Before that time we had several proposals which
was passed back and forth between the two parties. On
this last day we were trying to come to an agreement on
the wage proposal.
We had made a proposal and the Company made a
proposal and we had not reached an agreement. The
Company went out to caucus and came back in. Mr.
Palmer had on a piece of paper, on a white piece of paper
written out a wage proposal that the Company had.
He came in said they had a proposal. He read from a
piece of paper. He said this is our proposal. This is the fi-
nal proposal that we’re going to make. I feel that it is a
fair proposal and this is what we have. He had included in
the proposal was an increase in the bank of hours which
gave eight more bank of hours.
We had asked for two additional holidays which was
also included in their proposal. There was an across the
board fifty cent raise which would go into effect immedi-
ately, and then there was to be two seventy-five cent
raises on the anniversary of the contract the next two
years.
Q. Fifty cent raise across the board?
A. Yes. (Emphasis added.)
Q. All right, go ahead.
A. He read this and he said I feel this is a fair proposal.
This is what we have and they were not offering anything
else. We asked to caucus at that time. We did. We dis-
cussed the proposal given by Mr. Palmer.
We went around the room and every person on the ne-
gotiating committee voiced an opinion about the proposal
whether or not we should accept it, what we should do.
We decided when the Company came back in to take the
proposal and go to the membership to see what they felt
about it.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 368
Q. Now when you came back in the last time was there
some discussion about the wage proposals in way of wrap
ups?
A. I’m sorry. Could you repeat that?
Q. Was there some discussion by the Company again
by the way the proposals—were there any questions?
A. Yes, there were. Mr. Raynor asked some questions
and then Rita Cockman who is—I was sitting next to Mr.
Prouty and there was another person sitting next to me and
Rita was sitting next to that person. Rita said that she had
a question and she asked the question is this raise across
the board and Dale answered the question. He said it
was across the board and no one else on the Company
side said anything. (Emphasis added)
I believe after that Bruce Raynor asked another ques-
tion and no one said anything about the increase not being
across the board.
Q. You indicated Dale is that Mr. Dale Rosser?
A. Yes.

Even if the parol evidence issue was decided in favor of the
General Counsel, I am not convinced that the parties verbally
agreed to include everyone in the July 1997 wage increase. As
shown above, all Respondent’s written wage proposals showed
only top out for the second and third year increases. Moreover,
the credited testimony of Robyn Estes shows that the parties
may or may not have agreed to include all employees in the
annual wage increases. A “plausible” interpretation of that con-
versation would show that Rita Cockman asked about across
the board and Rosser’s reply was to the only portion of Re-
spondent’s proposal that involved across the board. As shown
above Peter Palmer proposed “there was an across the board
fifty cent raise which would go into effect immediately, and
then there was to be two seventy-five cent raises on the anni-
versary of the contract the next two years.” That interpretation
would be plausible and would show that only the immediate
50-cent raise would be across the board.
I find that the General Counsel failed to prove that Respon-
dent engaged in unfair labor practices as alleged in the com-
plaint.
CONCLUSIONS OF LAW
1. Kmart Corporation, is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. Union of Needletrades, Industrial and Textile Employees,
AFL–CIO, CLC, is a labor organization within the meaning of
Section 2(5) of the Act.
3. Respondent did not engage in unfair labor practices by
unilaterally changing working conditions regarding its July
1997 wage increase.
On the foregoing findings, conclusions of law, and the entire
record, and pursuant to Section 10(c) of the Act, I issue the
following recommended
ORDER7
The complaint is dismissed.

7 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.