Kent Engineering, Inc.

National Labor Relations Board - Board Decisions

Dec 15, 1969

180 N.L.R.B. 86 (N.L.R.B. 1969)

86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Kent Engineering , Inc. and Hope Lodge 79,
International Association of Machinists and
Aerospace Workers, AFL-CIO. Case 19-CA-4243
December 15, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
BROWN AND ZAGORIA
On October 2, 1969, Trial Examiner Stanley
Gilbert issued his Decision in the above-entitled
proceeding, finding that Respondent had engaged 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. He
further found that Respondent had not engaged in
certain other unfair labor practices alleged in the
complaint and recommended dismissal as to them.
Thereafter, General Counsel filed exceptions to
certain portions of the Trial Examiner's Decision
and a supporting brief. The Charging Party joined
in the position taken by the General Counsel.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National 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 and brief, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
Recommended Order of the Trial Examiner and
orders that the Respondent, Kent Engineering, Inc.,
Kent, Washington, its officers, agents, successors,
and assigns, shall take the action set forth in the
Trial Examiner's Recommended Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
STANLEY GILBERT, Trial Examiner : Based upon a
charge filed January 3 , 1969, as amended on March 17,
1969, by Hope Lodge 79, International Association of
Machinists and Aerospace Workers, AFL-CIO, herein
referred to as the Union , the complaint herein was issued
May 13 , 1969. Said complaint alleges that Kent
Engineering , Inc., referred to herein as the Company or
Respondent , engaged in conduct violative of Section
8(a)(I) and (5) of the Act. Respondent, by his answer,
denies that it committed the unfair labor practice alleged
in the complaint.
Pursuant to notice, a hearing was held in Seattle,
Washington, on July 17, 1969, before the undersigned,
duly designated as Trial Examiner Appearances were
entered on behalf of the General Counsel and Respondent,
but no appearance was entered on behalf of the Union as
the Charging Party Briefs were' received from the General
Counsel and Respondent within the time designated
therefor
Upon, the entire record' in this proceeding and' upon
observation- of the witnesses as they testified, I make the
following:
FINDINGS OF FACT
1. THE BUSINESS OF THE COMPANY
Respondent is a Washington corporation engaged in the
manufacture of airframe parts at its plant located in Kent,
Washington During the past calendar year, which period
is representative of its annual operations generally,
Respondent in the course and conduct of its business
purchased and caused to be transported and delivered to
its aforesaid plant directly from points outside of the State
of Washington goods and materials valued in excess of
$50,000.
As is admitted by it, Respondent is, and has been at all
material times herein, an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
It. THE LABOR ORGANIZATION INVOLVED
As is admitted by the Respondent , the Union is, and at
all times material herein has been, a labor organization
within the meaning of Section 2(5) of the Act.
III THE ALLEGED UNFAIR LABOR PRACTICES
It is alleged in the complaint that the Respondent
violated Section 8(a)(I) of the Act by the following
conduct:
On or about December 27, 1968, and at various
times thereafter, while negotiations for a new contract
were still in progress, Respondent bargained directly
and individually with employees in the unit [represented
by the Union] concerning the establishment of savings
bank accounts for the employees in replacement of the
Union's pension and medical plan, and concerning
other terms and conditions of employment.
It is also alleged in the complaint that Respondent
violated Section 8(a)(5) and (I) of the Act by the
following conduct
On or about February 20, 1969 Respondent and the
Union reached an agreement on all terms and
conditions of a new contract covering the employees in
the [aforesaid] unit ....
On or about March 11, 1969 said agreement between
Respondent and Union was put into the form of a
written agreement by Respondent's representative and
was signed by a representative of the Union
Since on or about March 11, 1969 Respondent has
refused, upon request by the Union, to sign the written
agreement described above .
'Errors in the transcript have been noted and corrected
180 NLRB No. 17
KENT ENGINEERING, INC.
Respondent operates a machine shop in which it does
subcontract work for the airframe industry. During the
period relevant to the issues of this proceeding,
Respondent maintained a staff of from 30 to 50
employees. A collective- bargaining agreement existed
between the Respondent and the Union which expired on
September 1, 1968.' In the early part of September 1968,
representatives of Respondent and the Union commenced
negotiating a new contract and met for such purpose
approximately every two weeks thereafter. The principal
negotiator for the Union was Edward Bernoski, business
representative of the Union. Riviera, who entered his
appearance as counsel for the Respondent in this
proceeding, was the sole representative of the Respondent
in the negotiations.
There is no dispute as to the facts in this case. General
Counsel called, as his witnesses, Bernoski; H. D. Hailey,
secretary of the Western Metals Industry Pension Fund;
and Cecil B. Jones, president of the Respondent.' The
Respondent called no witness except Bernoski , who was
called by Respondent to testify to a matter which is
deemed to have no bearing on the issues herein.
The above-mentioned Western Metals Industry Pension
Fund, herein referred to as the Pension Fund, is
administered by trustees representing employers and labor
organizations. It appears that its funds are derived from
contributions made in accordance with various
collective-bargaining agreements including
collective-bargaining agreements to which the Union is a
party. It further appears that the Union has no authority
in the administration of the Pension Fund. It is noted,
however, that on February 1, 1969, Bernoski became one
of the trustees of said Pension Fund. The Pension Fund is
involved in this proceeding by reason of the fact that
sometime prior to the period material herein the Pension
Fund claimed that Respondent was delinquent in
payments to it, and, based upon said claim, the Pension
Fund filed a lawsuit against the Company for $591.66
liquidated damages and attorney's fees.
The course of the negotiations for the new contract
extended over a period from early September 1968 to
March 11, 1969. It appears that by November 13, 1968,
the negotiators had arrived at an agreement as to all
issues except as to the matter of the health and welfare
plan and a dental plan. It further appears that the Union
was pressing for a change in the health and welfare plan
and the inclusion of a dental plan. It is not necessary, in
order to resolve the issues of this case, to set forth what
the various proposals were.
On December 27, 1968, at a time when negotiations
were still under way with respect to the health and welfare
and dental plans, Respondent called a meeting of its
employees without consulting with or notifying the Union.
At that meeting, a representative of the National Bank of
Washington, Tacoma, delivered a speech about a savings
account plan which clearly was intended as a substitute
for the health and welfare and dental plans. In connection
with the proposed savings account plan, the following
letter was distributed to the employees:
'Said agreement covered Respondent's production and maintenance
employees for which the Union was certified as the exclusive bargaining
representative on or about May 18 , 1966. There is no issue as to the
appropriateness of the unit or as to the Union 's status as its bargaining
representative.
'The testimony of Halley and Jones is credited , since it is credible and
uncontradicted . Bernoski corrected certain of his testimony and his
testimony , as he corrected it, is credited.
Dear Mr. Harold Stolen:
87
We know there has been some discussions among the
Kent Engineering family with respect to your
desirability to create your own pension plan and dental
plan.
Kent Engineering management is most sympathetic
with your desires and we are willing to go along with
you on any plan that will assure you, that you will get
the same dollars per month, that you would get under
any other plan
We are thinking in terms of the following, and are
perfectly willing to abide by this plan.
1. Deposit on a monthly basis, $12.10 in a savings
account in your name, in the National Bank of
Washington, plus $.15 per hour for each hour worked
each week, same to also be deposited in the same
savings account on a weekly basis.
2. You would receive from the National Bank of
Washington a savings account; deposit and pass book,
in your individual name and you may withdraw the
funds any time you wish.
/s/ Cecil B. Jones
Cecil B. Jones
December 27, 1968
It appears that the $12.10 figure mentioned in the letter
is the amount which was proposed by the Union for the
dental plan and the 15-cent-per-hour figure is the amount
which Respondent had been contributing to the Pension
Fund. A statement containing the information set forth in
the above-quoted letter was circulated among the
employees for their signature. It is concluded that
Respondent's presentation was intended as an offer to the
employees to substitute the savings account plan for the
health and welfare and dental plans being considered in
the negotiations. It is further concluded that the
Respondent's conduct in making such a presentation
constituted an attempt to circumvent the Union as its
employees' bargaining representative and to undermine the
Union's effectiveness in its negotiations with Respondent.
By such conduct, Respondent violated Section 8(a)(1) of
the Act.
The record demonstrates that at the time the
representatives commenced their negotiation session on
February 20, 1969, the only remaining issue between the
parties was whether the Respondent would agree to
include a new dental plan and retain the old health and
welfare plan. During the course of the negotiations on
February 20, Riviera raised the problem of the Pension
Fund's lawsuit and suggested that if the Respondent could
be relieved of all obligations under the lawsuit, the
remaining problem of the retention of the old health and
welfare fund and inclusion of the dental plan (as proposed
by the Union) would be resolved. The question of the
pending lawsuit by the Pension Fund was discussed.
Following is Bernoski's testimony, on cross-examination,
with respect to the discussion:
Q. One of the things that was discussed was this
Western Metals lawsuit , isn't that right?
A. Right.
Q. I think you mentioned during the course of that
conversation that you were either on the board or
closely connected with it?
A. I was a trustee.
Q. And didn't you say in the course of that
conversation that that litigation could be disposed of?
A. I told you that the liquidated damages could be
disposed of.
88 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Q Didn't you also say that the whole thing could be
wiped out without any cost to Kent Engineering as part
of the context of that particular conversation9 Didn't
they tell you that the cost would be nominal, something
like $18 or $209
A. Right
Q Isn't that dust about what the conversation was
about"
A Right
Q. And, then, did you say that during the course of
that conversation you talked to Mr Hailey9
A. That is right. 1 called him on the phone from the
courthouse
Q Did you call him from the courthouse or while we
were all in the room9
A I called him from the Federal Mediation offices.
Q While I was there in the room?
A I think you were
Q In other words, is it fair to say that at the end of
the conversation in Mr Salo's office [the same office
above-mentioned] nobody in the room really knew the
attorney's fees or how much was really involved?
A That is correct
Q And do you recall as part of the conversation my
saying that I believed the matter could be resolved and
all of the outstanding controversies wiped out?
A. That is correct
Q Apparently it was after February 20 that you
received definite information from this Mr Hailey
about this outstanding attorney's fee, right)
A That is correct.
Q. And that, for whatever reasons there were, could
not be eliminated?
A That is right
It appears that when Bernoski called the office of the
Pension Fund, he talked to H D Harley, who told him
that the "liquidated damages would be dropped, but the
attorney's fees would have to be paid.", During the
negotiation session on February 20, both Bernoski and
Riviera thought the attorney's fees would only amount to
approximately $21 and both made the statement that "if
that was all that was involved, he would pay it out of his
pocket." It was not until one or more days after the
meeting of February 20 that Bernoski and Riviera learned
that the attorney's fees amounted to $315.
It is concluded from the above testimony that Riviera
stated that he would agree to the Union's proposal of the
retention of the old health and welfare plan and the
inclusion of a dental plan upon the condition that
Respondent would be absolved of any obligation with
respect to the lawsuit filed by the Pension Fund It is
further concluded that Bernoski accepted the condition. It
appears that this condition was never met in that the
Pension Fund offered only to waive the liquidated
damages, but insisted on payment of the attorney's fees of
$315
On March il, 1969, Bernoski and Riviera met in the
latter's office. At that time, Riviera presented to Bernoski
a draft of the bargaining agreement, containing, inter alia,
the old health and welfare plan and the new dental plan,
and Bernoski signed it after a minor correction of no
significance in this proceeding in the course of their
'Haley explained in his testimony that he did not consider it appropriate
for the Pension Fund to pay the attorney 's fees from contributions made
by other employers
meeting, they discussed the outstanding problem of the
lawsuit. Bernoski testified on direct examination with
respect to their discussion of the problem of the attorney's
fees as follows
A I told him my position at that time was the same
as before. There was nothing I could do as a business
representative to get these attorney's fees satisfied.
They weren't our attorneys I couldn't go to the lodge
and ask the lodge to pay these attorney's fees unless
they were for services rendered to the lodge They had
to go to the trust.
Following is Bernoski's testimony, on
cross-examination, as to their discussion with respect to
the problem imposed by the condition that all obligations
arising out of the lawsuit be waived:
Q. And at that time didn't I tell you that I could not
accept this contract, but I would take it after you
signed it and submit it to Mr Jones for his approval
because there was this question about this outstanding
lawsuit and attorney's fees?
A My recollection of the conversation is that you
told me then there was still the problem of the $315
and that you would have to go out and sell Mr Jones
on signing the contract and something to the effect
about paying the $315, it was a nominal thing, and so
on.
Q Is it fair to say the gist of what I said to you was
I would have to go out and present it to him'r
A Right.
It is concluded that, at the time Bernoski signed the
agreement drafted by Riviera, Riviera made it clear that
the matter of the lawsuit and attorney's fees connected
therewith was still a remaining problem and that, as
negotiator for Respondent, he had not waived as a
condition to accepting the agreement as drafted that the
Respondent be absolved of all obligations arising out of
the lawsuit. At the most, he indicated that he was going to
recommend to the president of Respondent that the
condition be waived with respect to the attorney's fees
As the General Counsel correctly points out in his brief,
it is a well established principle that an employer's refusal
to sign a written agreement which embodies the terms of
an agreement arrived at between the employer and union
concerning wages, hours, and working conditions of
employees is a refusal to bargain within the meaning of
the Act and a violation of Section 8(a)(5) and (I) of the
Act. However, said principle does not apply to the facts
herein In this case, the Respondent's negotiator suggested
that, as an inducement to his acceptance of the Union's
proposal that the health and welfare plan be retained and
a new dental plan be instituted, the Union obtain
Respondent's release of all obligations with respect to the
lawsuit filed by the Pension Fund, and the Union's
representative agreed to this condition. As has been
indicated hereinabove, this condition was never met, in
that the Respondent could not be relieved of the
obligation to pay the attorney's fees of $315.5 The General
Counsel argues that the condition (which was agreed to)
"is wholly outside the scope of wages, hours, and working
conditions of Respondent's employees and is not, in any
conceivable fashion, a mandatory subject of bargaining
within the meaning of N L R B v. Borg-Warner, 356 U.S.
342, 42 LRRM 2034, Supreme Court 1958." However,
'Halley explained , in his testimony, that the Pension Fund could not pay
the attorney's fees out of contributions of other employers, and Bernoski
explained , in his testimony , that the Union could not pay fees for legal
services that were not rendered to it
KENT ENGINEERING, INC.
the case cited by the General Counsel involved the
insistence on the inclusion of a nonmandatory subject of
bargaining which was opposed. It is noted that in its,
decision, the Supreme Court also stated that, while the
duty to bargain is limited to the subject of wages, hours
and other terms and conditions of employment, "As to
other matters, however, each party is free to bargain or
not to bargain, and to agree or not to agree." In this case,
the Union agreed to the above-mentioned condition (which
Respondent admits was not a mandatory subject of
bargaining). Since the condition was a part of the
agreement of the parties and constituted an inducement to
Respondent to agree to accepting the Union's proposals, it
cannot be disregarded. The condition precedent to the
agreement was neither unlawful nor contrary to public
policy. While it might have been unwise for the Union's
representative to agree to the condition, this is no basis
for finding that the condition should be considered a
nullity. Nor should it be considered a nullity because it
could not be met by the Union; that it could not be met
was not known by the negotiators when agreement was
reached (upon the said condition precedent). To find that
the Respondent violated Section 8(a)(5) and (1) of the Act
by refusing to execute the agreement without the condition
precedent having been met would require that the Board
alter the agreement of the parties which, in the
circumstances, would not be an appropriate exercise of the
Board's powers under the Act. Consequently, it must be
concluded that the General Counsel has failed to prove the,
allegation in the complaint that Respondent violated
Section 8(a)(5) and (1) of the Act by refusing to execute
the written agreement referred to hereinabove.b
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICE UPON
COMMERCE
The unfair labor practice of the Respondent violative of
Section 8(a)(l) of the Act, set forth in Section III, above,
occurring in connection with its operations set forth in
Section I, above, has a close, intimate, and substantial
relation to trade, traffic, and commerce among the several
States, and tends to lead to labor disputes burdening and
obstructing commerce and the free flow thereof.
V. THE REMEDY
It will be recommended that the Respondent be ordered
to cease and desist from engaging in the unfair labor
practice found herein and take certain affirmative action,
as provided in the Recommended Order below, designed
to effectuate the policies of the Act.
It having been concluded that the General Counsel has
failed to sustain the burden of proof of the allegations in
the complaint relating to the Respondent's refusal to
execute the written agreement, it will be recommended
'While the reluctance to assume an obligation of $315 would appear to
be a comparatively trivial reason for Respondent 's refusal to execute the
collective -bargaining agreement , the Trial Examiner cannot substitute his
sense of values for that of Respondent . Since the agreed upon condition
precedent that Respondent be relieved of all obligations arising from the
lawsuit was not met , that fact is a sufficient legal basis for the Respondent
to take the position that it is not bound by the terms of the written
agreement . In Brotherhood of Painters , Decorators and Paperhangers of
America , Local 850, AFL-CIO , 177 NLRB No. 16, the Board held that
since there was "no improper precondition to the execution of the tentative
agreement ," which precondition was not met, it was not unlawful for the
Respondent therein to refuse to execute the agreement. It appears that, in
the circumstances , the only means by which the stumbling block of said
condition precedent can be removed is not through the process of Board
action , but through the process of further bargaining.
89
that the allegations with respect thereto be dismissed.
Upon the basis of the foregoing findings of fact and
upon the entire record of the case, I make the following:
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. Respondent interfered with, restrained and coerced
its employees in violation of Section 8(a)(1) of the Act by
attempting to bargain directly with them in circumvention
of the Union as their bargaining representative.
4. General Counsel failed to sustain the burden of proof
of the allegations in the complaint that Respondent
violated Section 8(a)(5) and (1) of the Act by refusing to
execute the written agreement which embodied their
understanding of the working conditions of employment,
since the condition precedent to that understanding was
not met.
RECOMMENDED ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, and upon the foregoing
findings of fact and conclusions of law, and the entire
record in this proceeding, it is ordered that Kent
Engineering, Inc., its officers, agents, successors, and
assigns, shall.
1. Cease and desist from:
(a) Bargaining directly with its employees in
circumvention of the Union as their bargaining
representative.
(b) In any like or related manner interfering with,
restraining, or coercing their employees in the exercise of
their rights under Section 7 of the Act.
2. Take the following affirmative action which is
deemed necessary to effectuate the policies of the Act:
(a) Post at its plant in Kent, Washington, copies of the
attached notice marked "Appendix." Copies of said
notice on forms provided by the Regional Director for
Region 19, after being duly signed by an authorized
representative of Respondent, shall be posted by
Respondent immediately upon receipt thereof and
maintained by it for a period of 60 consecutive days
thereafter in conspicuous places, including all places where
notices to employees are customarily posted. Reasonable
steps shall be taken by Respondent to insure that said
notices are not altered, defaced, or covered by any other
material.
(b) Notify the Regional Director for Region 19, in
writing, within 20 days from the receipt of this Trial
Examiner's Decision, what steps Respondent has taken to
comply herewith.'
'In the event no exceptions are filed as provided by Section 102 46 of the
Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, recommendations, and Recommended Order herein
shall, as provided in Section 102.48 of the Rules and Regulations, be
adopted by the Board and become its findings , conclusions , and order, and
all objections thereto shall be deemed waived for all purposes In the event
that the Board's Order is enforced by a judgment of a United States Court
of Appeals, the words in the notice reading "Posted by Order of
the National Labor Relations Board" shall be changed to
read "Posted Pursuant to a Judgment of the United
States Court of Appeals Enforcing an Order of the
National Labor Relations Board "
'In the event that the Recommended Order is adopted by the Board, this
90 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The allegations in the complaint that Respondent
violated Section 8(a)(5) and (1) of the Act by refusing to
execute the written agreement should be , and are hereby,
dismissed.
provision shall be modified to read: "Notify said Regional Director, in
writing, within 10 days from the date of this Order, what steps the
Respondent has taken to comply herewith "
Association of Machinists and Aerospace Workers,
AFL-CIO.
WE WILL NOT in any like or related manner interfere
with , restrain , or coerce our employees in the exercise
of their rights under Section 7 of the Act.
Dated By
APPENDIX
NOTICE TO EMPLOYEES
Posted by order of the National Labor Relations Board
an agency of the United States Government
We hereby notify our employees that:
WE WILL NOT attempt to bargain directly with our
employees represented by Hope Lodge 79, International
KENT ENGINEERING, INC.
(Employer)
(Representative ) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material.
Any questions concerning this notice or compliance
with its provisions may be directed to the Board's Office,
Republic Building , 10th Floor, 1511 Third Avenue,
Seattle, Washington 98101, Telephone 206-583-7473.