Kal-Equip Co.

National Labor Relations Board - Board Decisions

Aug 25, 1978

237 N.L.R.B. 1234 (N.L.R.B. 1978)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Kal-Equip Company and International Union, United
Automobile, Aerospace and Agricultural Implement
Workers of America (UAW) Case 7-CA 14253
August 25, 1978
DECISION AND ORDER
"revised" standards. but does support the renteds of the Adiinislrr.lale
I as. Judge directing the Respondent to h.argain iand glxing the I niin the
option of requesting re ,caltion of ans or a
l l
of the unlalteral chaniges im
rates of production and productiln quotas initiated since March 22. 1977.
As Ito the latter. we note particularl that Ni N1 restudies ma;l decrease as
well as increase production standards, and that an enlplosee mnls request
such a restud. it is possible that the Ulnion and the emploees mas not
desire restoration of the ti,i qto ,l an. d A therefore ad opt the Optllonal
proisiion of the recommended ()der.
BY CHAIRMAN FANNIN(; AND) Ml 1BIRS Ji NKINS
AND Mt RPilY
On May 15, 1978, Administrative Law Judge Rob-
ert W. Leiner issued the attached Decision in this
proceeding. Thereafter, the Respondent filed excep-
tions and a supporting brief, the General Counsel
filed limited exceptions and a supporting brief, and
the Respondent then filed an answering brief to the
General Counsel's exceptions.
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 au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administration Law Judge ' and
to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that the Respondent, Kal-Equip Company.
Otsego, Michigan, its officers, agents, successors, and
assigns, shall take the action set forth in the said rec-
ommended Order.
B The complaint alleged "unilaterally changed production standards"
since March 22. 1977. affecting unit employees, and subjecting "said em-
ployees to disciplinary action for failure to meet those revised standards"
The record shows that, during the approximately 8-month period between
the denial of the Union's basic bargaining request and the hearing. 296
restudies of production rates had been made. resulting in increased produc-
lion rates in 138 instances. The record does not disclose a written reprimand
with respect to a job where the rate was actualls changed during the said
period of time. Rather. it establishes a pattern of warning and reprimanding
employees that clearly links poor production and actual job performance.
We note that G.C. Exh. 5 concerning the Keech reprimand wuas accepted in
evidence by the Administrative law Judge on the statement that it is ain
"encapsulation of discipline [in] relation to a work standard."
The Respondent emphasizes that the recurring job production studs sys-
tem MTM in itself provides no discipline or lost wages. but concedes
that the company can rid itself of an employee based upon its "fair dais's
work policy." We conclude in agreement with the Administrative i.an.
Judge that the implementation of the MI'M system is integral to emploee
discipline and is thus a condition of emplomnent about which the mrnployer
must bargain with its employees' certified representative.
Thus, the record does not support the remedy sought hby the General
Counsel of rescinding any discipline received as a result of failure lt meet
DECISION
SlATrIEMN1 OF 1 H CASE
RoHFRI W LFNER, Administrative Law Judge: The un-
derlying unfair labor practice charge in this case was filed
by International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America (UAW),
herein called the Union or Charging Party, on July 22,
1977: the complaint was issued on September 2, 1977; Re-
spondent Kal-Equip's answer was filed on September 9,
1977, and the hearing was held on December 7, 1977, in
Allegan, Michigan, with all parties represented by counsel.
Briefly, the General Counsel's complaint alleges that Kal-
Equip Company violated Section 8(a)(1) and (5) of the Na-
tional Labor Relations Act, as amended, by refusing to
bargain in good faith with the Union, and that commenc-
ing March 22, 1977, after it refused to recognize or bargain
with the Union, it commenced and continued a series of
unilateral changes in unit employees' rates of production
and production quotas without notifying or consulting
with the said labor organization prior thereto.
Upon the entire record, including my observation of the
witnesses, and after due consideration of the briefs filed by
General Counsel and Respondent, I make the following:
FINDINGS OF FACT
I JURISDICTION
Respondent, a Michigan corporation, having its office
and manufacturing facility at 411 Washington Street, Otse-
go, Michigan, is engaged in the production and sale of
automotive electronic testing devices and related products.
During the year ending December 31, 1976, a representa-
tive period of Respondent's operations, Respondent pur-
chased and caused to be delivered to its Otsego plant goods
and materials valued in excess of $50,000, transported di-
rectly from points located outside the State of Michigan;
and, in the same period, in the course of its business opera-
tions, manufactured and distributed at its Otsego, Michi-
gan. plant, products valued in excess of $50,000 which were
shipped from said plant directly to points located outside
the State of Michigan. The complaint alleges, the answer
admits, and I find, that Respondent, at all times material
herein was and has been an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act.
237 NLRB No. 194
1234
KAL-EQUIP COMPANY
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the answer admits, and I find that
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America (UAW), the
Charging Party herein, was, and has been at all times mate-
rial herein, a labor organization within the meaning of Sec-
tion 2(5) of the Act.
1. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
Respondent, in business for about 20 years, is engaged in
the production of automotive electronic testing devices, a
highly competitive business. While Respondent previously
employed a larger number of production employees, at ma-
terial times herein, it employed a total of 233 employees at
its Otsego, Michigan, facility of which 154 employees were
employed in the Board-certified unit, as discussed below.
Pursuant to a petition for representation, the production
and maintenance employees of Respondent, in a Board-
conducted election held on October 20, 1976, in Case 7-
RC-13790, designated the Union as their collective-bar-
gaining representative. Overruling Respondent's objections
to the conduct of the election, the Board, on February 25,
1977, issued a Decision and Certification of Representa-
tive. On March 3, 1977, the Union requested Respondent
to bargain regarding the wages, hours, and other terms and
conditions of employment of the unit employees, which
request was denied by Respondent on March 22, 1977. Re-
spondent denied the Union's request for bargaining in or-
der to seek judicial review if the Board's certification. On
March 28, 1977, the Charging Party filed a charge in Case
7-CA-13918 alleging violation of Section 8(a)(5) based on
Respondent's refusal to bargain with it as the certified bar-
gaining agent. On August 16, 1977, the Board issued a De-
cision and Order, reported at 231 NLRB 488, wherein the
Board ordered Respondent to bargain with the Charging
Party. Respondent contends that at the present time it is
seeking review in the United States Court of Appeals.
As above noted, on July 22, 1977, the unfair labor prac-
tice charge in the instant case was filed alleging violation of
Section 8(aX5) and (I) of the Act because of the Respon-
dent's making unilateral changes in production standards
relating to the conditions of employment of unit employees
without notifying or bargaining with the Charging Party in
establishing such changed standards.'
IRespondent contends that it has not violated Sec. 8(a)(5) and (1) of the
Act with regard to the unilateral changes made herein because, notwith-
standing the Union's request to bargain tollowing certification and the
Board's bargaining order in the previous 8(a)(5) case above, the Charging
Party has failed to again request bargaining, prior to filing the instant
charge, on the unilateral changes. Respondent has supported its position
with the citation of no authority and I find the argument without merit.
Respondent has refused to even recognize the Charging Party as the statu-
tory representative and has flatly refused to bargain with it in spite of the
Board order. The Union is not required to thereafter perform vain acts to
perfect any further 8(aX5) violation. Cf. Allstate Insurance Compantv. 234
NLRB 193 (1978).
B. Production Standards
The record shows that Respondent, in its 20 years of
manufacturing, has been using a system for studying and
implementing the production elements of its production
jobs for about 15 years. This method of applying industrial
engineering techniques to the production function of its
employees is the "Methods Time Measurement System"
(hereinafter MTM). According to Respondent's uncontro-
verted evidence, the MTM System is an internationally
recognized method for deriving an average time to com-
plete a particular job involving no machine-time compo-
nent. It was developed by studying thousands of employees
doing production jobs repetitively and compiling data to
come up with an average amount of time for an average
employee to do an average function. This system takes a
physical movement and breaks it down to the basic ele-
ments of a minimum time unit and measures the time of
reaching, grasping and applying pressure, and other physi-
cal movements necessary to complete a job. The system is
used on all jobs at the Company to which it may be adapt-
ed. It is not adapted to jobs. for instance, such as the repair
of machinery (see Resp. br, p. 2).
It is also uncontested that the MTM System has no di-
rect relationship to an employee's earnings since all em-
ployees in the unit are hourly rated and paid. Employees
do not, therefore, suffer loss of pay for failing to produce
up to the established production rate. It is further uncon-
tested that the MTM System itself is not used to discipline
employees or to deduct sums from their pay. Respondent
disciplines employees on the basis of violations of its rules
which are encompassed in its booklet. "Employee Guide
to Plant Regulations," wherein the various rules relating to
employee conduct and discipline, inter alia, are specified
(G.C. Exh. 3).
Respondent's "Employee Manual" (Resp. Exh. 1) re-
quires a "fair day's work" from each employee. It notes
that many ". .. jobs have 'established standards' which
serve as minimum production objectives for that particular
operation."
Respondent's rate of production for each employee
doing each particular production job is ordinarily estab-
lished by it's Industrial Engineering Department using the
MTM System. The Industrial Engineering Department is
able to compute the pieces to be produced per hour and
ultimately the direct labor cost. On occasion, foremen and
employees obtain "restudy" of an existing rate of produc-
tion on the basis that the existing rate is too low or too
high.
C. Unilateral Changes in Rates of Production
In the period commencing March 22, 1977,2 Respondent
admittedly made a total of 841 unilateral changes relating
to jobs performed by unit employees of which 231 did not
involve changes in the production rate itself. Thus, 610 uni-
lateral changes with regard to unit employees did involve
changing the production rate. Of the 610 changes, approxi-
2 March 22, 1977. again. is the date Respondent refused the Union's re-
quest to bargain. Respondent admitted the appropriateness of the unit de-
scribed In the Order, belov
1235
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mately 280 involved changes in the production rate but
were basically a change in the method of performing the
operation by each employee. In addition, 13 of the changes
in production rate involved a change in that rate because
of a change in the product itself, thus requiring a new pro-
duction rate. The balance, 296 rate changes, had no accom-
panying change in the nature of the product or in the
method of production. These 296 changes are referred to
by Respondent as "restudies." "Restudies," according to
Respondent, relate to neither a change of materials, nor a
change in the method of production, nor a new product.
Therefore, "restudied" changes relate only to changes in
the rate of production of an existing product.
Of the 296 "restudies," 158 involved changes where the
production rate was lowered and 138 related to the produc-
tion rate becoming faster.
On each manufacturing job order, the production em-
ployees are ordinarily provided with an "operation sheet."
The operation sheet demonstrates the change, if any, in the
method of production, the rate of production (i.e., how
many per hour or per day of the product are to be pro-
duced); the tools to be used; the plant part number of such
product; and the belt speed and belt spacing of each prod-
uct to be worked on.3 While formal operation sheets ordi-
narily accompany each job order, there are occasions when
the unit employees receive notification of what is expected
of them by virtue of the first employee on the production
line writing down what is expected of each in terms of rate
of production, part number, belt speed and similar condi-
tions on a scrap of paper.
On a weekly basis, Respondent's foremen distribute to
each unit employee an IBM printout containing the
employee's daily rate of production in the preceding week.
Such information denotes the employee's actual rate of
production compared to the rate established for the job.
Although as Respondent points out, a raised production
rate does not necessarily mean than an employee would
work harder, it is conceded that the employee will work
faster. The distinction offered by Respondent is that if a
particular "restudy" shows that actual production is run-
ning at 150 percent of the rate of an existing established
rate, the "restudied" rate makes the 150 percent rate of
production into the new norm which then becomes merely
the 100 percent production rate. Thus, since the employees
were already at the faster rate, it does not follow that the
new, "faster" rate makes the employees work "harder." Re-
spondent concedes, however, whatever the force of the
above argument, that "restudy" which results in upward
production rates may also require greater effort by the em-
ployees.
D. Respondent's Disciplinarv System
Respondent maintains a "progressive" disciplinary sys-
tem. The first step of that system is "counseling" of an
employee in order to discover the reason why the employee
is not, for instance, producing up to the expected produc-
The faster the belt speed and the narrower the spacing of each succeed-
ing item on the production belt, the faster the production operation must be
performed
tion rate. The next step in the disciplinary system is a writ-
ten reprimand which is placed in the employee's file. Three
written reprimands for "inefficiency" in a 6-month period,
under Respondent's plant rules, lead to discharge.' A writ-
ten reprimand will be contained either in a form letter
known as a "notice of rule riolation" or in a personal letter.
General Counsel's witnesses (Mildred Teder, Patricia
Weston, and Nancy Minegar) testified without contradic-
tion, for instance, that a foreperson told certain production
employees that their "efficiency" wasn't "up-to-rate" and
she was going to have to "write more warnings to us." It
was also uncontradicted that since March 22, 1977, the
rates of production have increased and employees must
work faster in order to keep up with the new rate. Produc-
tion employees (including inspectors) have also com-
plained to a foreman about the Company raising produc-
tion rates which the employees could not keep up with and
complained that the employees had to work harder. The
foreman told the employees that even though their 93 per-
cent rate of production was very good, the Company want-
ed 100 percent. Another supervisor told an employee that
he knew no difference between a counseling "conference"
and a "warning." The supervisor "counseled" the employ-
ee in the plant manager's office for not "making rate."
t.ast. the evidence shows, on the uncontradicted testimony
of Nancy Minegar, that she was disciplined on January 14,
1977, for not making the production rate.5
Furthermore, the evidence shows that within the 10(b)
period an employee (Kathy Keech) was given a written
reprimand on April 13, 1977 (G.C. Exh. 5), based on sepa-
rate violations of three plant rules. One of the reasons for
the written reprimand was the employee's excessive ab-
sence from the plant: the second basis was excessive time
away from her job in the restroom and talking to employ-
ees in other work areas; but a third basis was violation of a
plant rule (rule 38) for "inefficiency, laziness or loafing."
The rule provides that three written reprimands for viola-
tion of that rule in a 6-month period will be cause for
discharge.
In detailing the violation of this rule, Respondent sepa-
rately listed the employee's production efficiency ratings
over 6 successive weeks and noted that she had "failed to
meet normal production standards," i.e., her 75-percent ef-
ficiency rate did not measure up to the job requirement of
92 percent. In sum, Respondent issued the reprimand be-
cause:
It appears that you have failed to accept the responsi-
bilities of your job and heed my warning about attend-
ing to your job. Your misconduct, failure to meet pro-
duction requirements, and absences violates the Plant
Rules, which were issued to you. [Emphasis supplied.]
Respondent also asserts that it has the additional power
to discipline employees for failure to meet work standards.
4( . Exh 3, sec. 3. "Inefficiency" is discussed hereafter. In any event.
Respondent concedes that poor production by an employee can lead to his
dischargec Inefficienc' is nowhere defined.
¥his discipline occurred outside the IObl) period. The finding is not for
the purpose of establishing an unfair labor practice but merely to show the
existence of the disciplinary device and. on the basis of other evidence, con-
tinuatlon uithin the 10(h) period of discipline for failure to meet a produc-
lion rate.
1236
KALI-EQUIP COMPANY
By work standards, Respondent distinguishes between its
rates of production and the overall productivity of an em-
ployee. Respondent takes the position that it does not dis-
cipline employees for failure to meet production rates but
has the power (and exercises the power) to discipline em-
ployees, including discharge, for failure to produce "a fair
day's work."
Thus, Respondent states that employees well may be dis-
ciplined for failing to produce a "fair day's work," but not
for failure to make the production rate. However, it is
clear, and Respondent does not deny, that an employee's
failure to make the production rate can lead to the conclu-
sion that the employee is "inefficient" and. therefore. may
be discharged.
In short, the evidence shows that Respondent disciplines
employees (Keech) for failing to make the production rate.
and in no way suggests that such power relates only to
rates established before the advent of the Union: and. sep-
arately, has the power to discipline employees who do not
produce "a fair day's work." But such latter employees are
"inefficient," and inefficiency, according to Respondent,
may result from failing to meet production rates.
E. Discussion and Conclusions
As the General Counsel notes and as Respondent appar-
ently concedes, a unilateral change in working conditions
of employees, including production quotas, without notice
to or consultation with the employees' statutory collective-
bargaining agent is in derogation of the employer's duty to
bargain and violates Section 8(a)(1) and (5) of the Act.
Alfred M. Lewis, Inc., 229 NLRB 757 (1977): Beacon Piece
Dyeing and Finishing Co., Inc., 121 NLRB 953, 956 (1958):
Unoco Apparel, Inc., 215 NLRB 89 (1974); Pennco, Inc., 212
NLRB 677 (1974). Further, as the General Counsel ob-
serves, Respondent's present duty to bargain is not sus-
pended by its request for judicial review, Montgomerv
Ward & Co., Incorporated. 228 NLRB 1330 (1977). Last.
there is no question, as the Board has recently held, Master
Slack and/or Master Trousers Corp., et al. 230 NLRB 1054,
fn. 9 (1977), that a unilateral change of production rates
and quotas, without notice to or consultation with the em-
ployees' certified representative, not only violates Section
8(a)(5) and (1) of the Act, but it was immaterial to the
8(a)(5) violation that the revision of production rates and
quotas occurred because of changes in styles, patterns or
material. See: Alfred M. Lewis, Inc., supra; Unoco Apparel,
Inc., supra. The Board has thus determined that all such
unilateral changes, not merely those involving upward rate
revisions on existing products, are within the scope of
changes for which bargaining is required. While Master
Slack involved piece-rate revisions and, therefore. "wages."
the same result is present where the impact is not on wages
but on a condition of employment, discipline.
Respondent's defense is essentially based on two consid-
erations: (1) Respondent's historical use of MTM, both
before and after the advent of the Union. does not affect
the employees' wages, hours, or other terms and conditions
of employment since the change in rates of production do
not change or have an impact on the employees' rates of
pay. Thus, since there is no showing that the employer's
changes of rates of production have any effect upon em-
ployees' wages, hours or other terms and conditions of em-
ployment, the changes do not affect a mandatory subject
of bargaining,. and. therefore. constitute no breach of the
bargaining obligation. In this regard, Respondent suggests
that. in having the employecs meet the new production
rates. Respondent does not discipline employees for failure
to meet production quotas and is merely exhorting the em-
ploqees to work harder: and the fact that Respondent may
ultimately discipline employees for failing to produce a
"fair day's work" is no different from that right which it
had before the advent of the Union or any different from
the right of any employer to discipline employees for fail-
ing to produce properly: and (2) Respondent argues that
even if there was an impact on the employees' terms and
conditions of employment by its unilateral changes in the
rates of production, the employer, pursuant to Board au-
thority, is permitted to continue to revise its production
rates as part of its "independent flexibility to fashion ino-
vations promoting a more efficient work force."
I. With regard to Respondent's first contention, the evi-
dence does not support its conclusion that employees were
not disciplined for not meeting the production quotas es-
tablished by new rates of production within the period
commencing March 22. 1977. i.e., the period alleged in the
complaint (and which coincides with Respondent's rejec-
tion of the Charging Party's March 3 request for bargain-
ing pursuant to the Board's February 25, 1977, certification
of the production and maintenance unit). Rather, the evi-
dence shows that employees were specifically warned.
whether in prereprimand terms of "counseling" or "confer-
ence." see, particularlN. .ltfred M. Lewis, Inc., supra, or by
written reprimand for failing to work up to the production
rate. If written reprimand is a necessary element to consti-
tute "discipline," the written, formal reprimand delivered
to Kathy Keech (G.C. Fxh. 5) seems to amply demonstrate
that she was formally made subject to Respondent's disci-
pline which could lead. under the rules, to discharge for
"failure to meet production requirements." Since the "pro-
duction requirements" in the reprimand letter relate direct-
ly to the specific. enumerated efficiency ratings for 6. indi-
vidual, weekly periods and were referred to as her poor (75
percent) "production efficiency," it appears to me that
there is direct and specific discipline for failure to meet the
production rate (92 percent) established for her job. Those
production rates include the weeks ending March 27, April
3. April 10 and April 17, and are thus within the scope of
the General Counsel's complaint.6 Thus, the impact on the
employee's job is substantial if the employee fails to meet
Resplmident o,h'cies (br, p O) that there was no proof that Keech's
disciplinie related to ass pei.rt Ma.rch 22 production rate Bul that is not
the issull Ihe Isrtue i. hethei Respondent disciplines for failure to meet the
pr',ductlin rate If it does. then since it arrogates to itself the power to
unilaterally Icte .se t: production rates. it has the power, certainly on Ithi
rcord. t1, dlslphline for f.ilhng to mect its new, unilaterally established pro-
ductinll rates In an! cenrt. Re,,pondent hits adduced no evidence that it has
fores, orn ,uch disciplinary power Since General Counsel has shown Re-
spundernt has extelt ied the poIer thi he period of the complaint allega-
Ilon,, If Relpondcnit ihdlc.rlted itl power of discipline over post-MNarch 22
unilateral changes it oii inclimhbent n it to come forward with proof
thereof It falled to , d.r so l/rl D-irtson. Byron Jackson Pumnp Division.
HBrg It A,, ( qrar/orlion. 234 \NI RB I2st t 1978)
1237
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the production rate and these changes amount to changes
in conditions of employment. The unilateral changes in
production quotas with accompanying penalties violate
Section 8(a)(5) and (1) of the Act. Alfred M. Lewis, Inc..
229 NLRB 757 (1977).
2. Moreover, I do not fully understand Respondent's at-
tempted distinction between its undenied power to disci-
pline employees for not producing "a fair day's work" and
disciplining employees for not meeting production rates.
While it is true that the evidence is contrary to Respon-
dent's contention that it did not discipline employees for
failure to meet its rates of production, even if the right of
Respondent to discipline employees for failure only to pro-
duce a "fair day's work" was clear, there is no question
that repeated failure to meet the new production rates does
lead to an "inefficient" employee and, ultimately, an "inef-
ficient employee" is an employee who does not measure up
to the standard of "a fair day's work." Indeed, the very
definition of a "fair day's work (Resp. Exh. I) refers to the
fact that many jobs have "established standards" with min-
imum production objectives. Thus. I reject Respondent's
distinction between power to discipline to insure a "fair
day's work" rather than discipline for failure to meet pro-
duction standards.
3. Furthermore, the use of the MTM System, an existing
mechanism, for changing the production rates (on which
employees are ultimately judged as to whether they are
"inefficient" and thus producing a "fair day's work") is no
defense based on a continuation of the status quo. Chat-
ham Manufacturing Company, 172 NLRB 1948 (1968). for
the unilateral changes in production quotas are hardly a
continuation of the status quo.
Respondent argues that its past practice of the use of this
established MTM mechanism for changing the rates has a
minimal impact on wages or other conditions of employ-
ment and should not be a matter of collective bargaining.
The "minimal impact" may be, arguendo, conceded. A sim-
ilar theory, on different facts, was accepted by the Board in
Westinghouse Electric Corp., (Mansfield Plant) 150 NLRB
1574, 1577 (1965). But there, it was held that not only must
the unilateral change have a mere de minimis impact on
unit conditions of employment, but there additionally must
be no refusal of a request to bargain. In the instant case,
Respondent seeks to invoke this defense when it refused to
even recognize the certified Union. Thus, even were the
impact here to be held de minimis,7 Respondent's defense is
not supportable under Board precedent.
In short, Westinghouse Electric Corp., supra at 1576-77,
exonerates unilateral action only where three conditions
are met: (1) the employer's action followed past practices;
(2) the impact on unit employees is de minimis; and (3) the
employer did not refuse to honor a request to bargain. As
above noted, it is immaterial that the refusal to bargain
occurred before the unilateral changes were instituted.
4. Respondent relies principally for precedent in support
of its second contention that Respondent is permitted
managerial flexibility in the assignment of new functions
Since failure to meet quota has been shown to be a matter of formal
discipline, the impact on the employee's tight to hold the job can hardl) be
construed as de minimmis
and changes in efficiency with regard to unit employees
without violation of Section 8(a)(5) of the Act on: The Lit-
tle Rock Downtowner, Inc., 148 NLRB 717 (1964); Matlock
Truck Body & Trailer Corp., and its agent Roy L. Matlock,
217 NLRB 346 (1975); Wabash Transformer Corp., Subsid-
ianr of Wabash Magnetics. Inc., 215 NLRB 546 (1974); and
The Trading Port, Inc., 224 NLRB 980 (1976).
In Little Rock Downtowner, Respondent notes that the
Board held that the employer did not violate the Act when
it unilaterally instructed its motel maids to wash the motel
room windows everyday even though the maids had not for
some time maintained that standard. The case is inapposite
because the Board held that such an instruction fell within
the normal area of day-to-day operating decisions relating
to the manner in which work was to be performed. Unlike
the instant case, it did not relate to unilateral upward revi-
sions in the rate of production which would require, at
least in some instances, that the employees, subject to disci-
pline, work harder and faster. Put another way, it did not
relate to production rates and quotas notwithstanding that
it may have been a unilateral change in the method of
work. Similary, in Wabash, the unilateral act was the an-
nouncement of the imposition of the preexisting penalty of
discharge relating to a preexisting efficiency standard. It
did not involve changes in production rates or quotas but
merely, the announcement of the imposition of the existing
discharge sanction to enforce a preexisting efficiency stan-
dard. Again, in Trading Port, supra, the Board was con-
cerned, finding no violation, only with the fact that the
Respondent had created an inovation in promoting an effi-
cient work force because the efficiency requirement, which
was maintained, predated union organization and was
merely, like Wabash, supra, an effort to promote a more
efficient work force. Unlike the instant case, in Trading
Port, there was no new discipline imposed on submarginal
producers. In the instant case, there was discipline meted
out to an employee who had, inter alia, failed to meet the
production rates. Here, unlike Trading Port, there was no
discipline merely to enforce existing work standards and to
promote efficiency. In the instant case, rather, there was
discipline waiting at the end of the line for employees who
did not meet the changed production rates themselves or
who did not produce a "fair day's work" because they con-
sistently failed to meet a new production standard. Nor is
there here, as in Vegas Vic, Inc., d/b/a Pioneer Club, 213
NLRB 841 (1974), cited by Respondent, a change in the
employees' basic operation.
In conclusion, it is clear that Respondent's change in
production rates and quotas, although they do not formally
involve changes in employees' wages, such as would be the
case if the employees were on piece rates, as in Master
Slacks, supra, nevertheless are the subject of discipline,
whether in the form of direct discipline for failure to meet
the rate as in the case of Kathy Keech or in discipline
"ultimately" meted out because the employee, in failing to
meet higher production quotas, becomes "inefficient" and
does not turn out "a fair day's work."
Accordingly, I conclude that Respondent violated Sec-
tion 8(a)(5) and (1) of the Act by its unilateral changes in
rates of production of unit employees without notifying or
consulting the Union, the certified representative, because
1238
KAL-EQUIP COMPANY
such changes in rates of production were accompanied by
discipline or the threat of discipline for failure to meet such
rates of production and because continued failure to meet
the changed rates of production would lead to discipline
because of employees' failing to produce a "fair day's
work." Such changes constitute unilateral changes in the
employees terms and conditions of employment and are in
derogation of Respondent's duty to bargain. Alfred M.
Lewis, Inc., 229 NLRB 757 (1977).
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of Respondent set forth above, occurring
in connection with its operations described above, have a
close, intimate, and substantial relationship to trade. traf-
fic, and commerce among the several States and tend to
lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
V THE REMEDY
Having found that Respondent has engaged in unfair
labor practices in violation of Section 8(a)(l) and (5) of the
Act, I shall recommend that it be ordered to cease and
desist therefrom and to take appropriate affirmative action
designed to effectuate the policies of the Act.
General Counsel does not contend that any employees
suffered monetary loss because of the changes in rates of
production. In the absence of such contention by General
Counsel, it is unnecessary to provide for such an element in
the remedy. Furthermore, notwithstanding that employees
may have been adversely affected by some, if not all, of the
"restudies," above, and while it may be within my power to
recommend that all the unilateral changes be revoked, as
General Counsel suggests, it cannot be predicted with cer-
tainty whether the Union or employees desire any such
revocation. I shall therefore recommend that restoration of
the status quo ante be made conditional upon the affirma-
tive desire of the affected employees for such revocation, as
expressed through their collective-bargaining representa-
tive. Unoco Apparel, Inc., 215 NLRB 89, 92 (1974); Great
Western Broadcasting Corporation, d/b/a KXTV, 139
NLRB 93, 96 (1962). I shall further recommend that Re-
spondent make available to the Charging Party, upon re-
quest, all records necessary and relevant to decide whether
the Charging Party desires restoration of the status quo ante
in any of the rates of production. Last, as used in the rec-
ommended Order, below, the term "unilateral changes"
means changes in quotas or rates of production whether or
not accompanied by a change in the nature of the product
or in the method of production. Master Slacks and 'or Mas-
ter Trousers Corp., et al. 230 NLRB 1054. fn. 9 (1977).
While the impact in Master Slacks was on the piece work-
ers wages, I perceive no difference where, as here, the uni-
lateral changes affect only a condition of employment.
CONCLUSIONS OF LAw
I. Kal-Equip Company is an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act.
2. International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America (UAW)
is a labor organization within the meaning of Section 2(5)
of the Act.
3. All full-time and regular part-time production and
maintenance employees employed by Respondent at its fa-
cilities located in Otsego. Michigan, including production
technicians, tool-room employees, and truckdrivers; but
excluding engineering technicians, office clerical employ-
ees, customer service clerks, shipping secretaries, produc-
tion control clerks. Advance Meter department clericals,
professional employees, guards and supervisors as defined
in the Act, constitutes a unit appropriate for the purpose of
collective bargaining within the meaning of Section 9(b) of
the Act.
4. International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America (UAW)
is, and since February 25. 1977. has been, the exclusive
representative of the employees in the unit described above
within the meaning of Section 9(a) of the Act.
5. By making unilateral changes in rates of production
and production quotas of unit employees, commencing
with and continuing from March 22, 1977, without notice
to, or consultation with, the above-named labor organiza-
tion, Respondent has engaged in, and is engaging in, unfair
labor practices within the meaning of Section 8(a)(5) and
(I) of the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record in this case, and pursuant to Section
10(c) of the Act. I hereby issue the following recom-
mended:
ORDER
Respondent Kal-Equip Company, Otsego, Michigan, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain with International Union,
United Automobile, Aerospace and Agricultural Imple-
ment Workers of America (UAW), herein called the
Union, as the exclusive bargaining representative of its em-
ployees in the unit described below, by changing rates of
production and production quotas without notice to, or
consultation with, the said labor organization, Internation-
al Union, United Automobile, Aerospace and Agricultural
Implement Workers of America (UAW).
(b) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of their
rights to self-organization, to form, join, or assist the
above-named labor organization, or any other labor orga-
nization, to bargain collectively through representatives of
their own choosing, and to engage in concerted activities
for the purpose of collective bargaining or other mutual aid
In the eent that no exceptiions are filed as provided b; Sec 102.46 of
the Rules and Regulations of the National Labor Relations Board. the find-
ings conclusions. and recommended Order herein shall, as provided in Sec
102 48 of the Rules and Regulations. be adopted by the Board and become
its findings, conclusions, and Order. and all objections thereto shall he
deemed massed for all purposes
1239
DE( ISIONS OF NATIONAL LABOR REIA FIONS BOARD
or protection as guaranteed by Section 7 of the Act, or to
refrain from any or all such activities.
2. Take the following affirmative action designed to ef-
fectuate the policies of the Act:
(a) At the request of International Union, United Auto-
mobile, Aerospace and Agricultural Implement Workers of
America (UAW), revoke any or all of the unilateral
changes in rates of production and production quotas initi-
ated commencing March 22, 1977, and restore those rates
of production and production quotas in effect at that time
according to the request of the aforesaid labor organiza-
tion.
(b) Upon request, bargain collectively with the aforesaid
labor organization as the exclusive representative of all em-
ployees in the unit described below.
(c) Upon request, furnish the above-named labor orga-
nization all records necessary and relevant to decide
whether it desires restoration of the rates of production
and production quotas in effect prior to March 22, 1977.
(d) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all rec-
ords relevant and necessary to the determination of the
rates of production and production quotas in effect com-
mencing March 22, 1977.
(e) Post at its Otsego, Michigan. facility copies of the
attached notice marked "Appendix." C9 opies of said no-
tice, on forms provided by the Regional Director for Re-
gion 7, after being duly signed by Respondent's authorized
representative, shall be posted by it immediately upon re-
ceipt thereof and be maintained by it for 60 consecutive
days thereafter, in conspicuous places, including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by Respondent to insure that
said notices are not altered, defaced, or covered by any
other material.
(f) Notify the Regional Director for Region 7. in writ-
ing, within 20 days from the date of this Order, what steps
Respondent has taken to comply herewith.
The appropriate collective-bargaining unit is:
All full-time and regular part-time production and
maintenance employees employed by Kal-Equip
Company at its facilities located in Otsego. Michigan,
including production technicians, tool-room employ-
' In the event thai Ihis Order is enlfrcrd b, ; jIldgmenil i, the I lited
States (Courl of Appels. Ihe wor-ds in the no)tice readi ll" 'os ted h (Order
of the Nalional L.abor Reilations HBoaid" shall redl Posted 'tilsiua.t t.' .
judgment of the Lnited States Court of Appecls Ilti[ortn i an O(rdel tI [lie
National labor Relatitons Board "
ees. and truckdrivers: but excluding engineering tech-
nicians, office clerical employees, customer service
clerks, shipping secretaries, production control clerks,
Advance Meter department clericals, professional em-
ployees, guards and supervisors as defined in the Act.
APPENDIX
Noll iC To EMPIOYE[-S
PosllI, BY ORDLR 01f TIl
NAIION.I LABOR RLI.ATIONS BOARD
An Agency of the United States Government
Wi wILt NOi make unilateral changes relating to
rates of production or production quotas of any of our
employees represented by International Union,
United Automobile, Aerospace and Agricultural Im-
plement Workers of America, (UAW), herein called
the Ulnion. in the below specified collective-bargaining
unit.
W 'A i No I in anN like or related manner interfere
with. restrain, or coerce our employees in the exercise
of their rights of self-organization, to form, join, or
assist the above-named labor organization, or any
other labor organization, to bargain collectively
through representatives of their own choosing, and to
engage in concerted activities for the purpose of col-
lective bargaining or other mutual aid or protection,
or to refrain from any or all such activities.
WVI- w.l, at the request of the Union, revoke any
unilateral changes in rates of production or produc-
tion quotas initiated by us commencing March 22,
1977. and. upon its request, restore those rates of pro-
duction and production quotas then in effect as re-
quested by the Union if the Union so requests.
Wi wn I. at the request of the Union, bargain collec-
tively with it as the exclusive representative of all our
employees in the unit described below.
All full-time and regular part-time production and
maintenance employees employed by Kal-Equip
CompanN at our facilities located in Otsego, Michi-
gan, including production technicians, tool-room
employees, and truckdrivers: but excluding engi-
neering technicians, office clerical employees, cus-
tomer service clerks, shipping secretaries, produc-
tion control clerks. Advance Meter department
clericals. professional employees, guards and super-
visors as defined in the Act.
KAI -EotQ ( OMPANY
1240