Koenig Iron Works, Inc.

National Labor Relations Board - Board Decisions

Sep 27, 1985

276 N.L.R.B. 811 (N.L.R.B. 1985)

KOENIG IRON WORKS
Koenig Iron Works, Inc. and Shopmen 's. Local
Union No . 455, International Association of
Bridge , Structural and Ornamental Iron, Work-
ers, AFL-CIO and Local 810, International
Brotherhood of Teamsters , Chauffeurs, Ware-
housemen and Helpers of America .' Case 29-..
CA-10586
27 September 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 5 April 1985 Administrative Law Judge Ray-
mond P. Green issued the attached decision. The
Respondent filed exceptions and a supporting brief,
and the General Counsel filed an answering brief,
exceptions, and a brief in support of her exceptions.
The Party in Interest filed a brief in answer only to
the General Counsel's exceptions.
The National Labor Relations Board has delegat-
ed 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 to affirm the judge' s rulings , findings,2 and
conclusions as modified, and to adopt the recom-
mended Order.
1. We agree with the judge that the Respondent'
violated Section 8(a)(5) and (1) by. unilaterally im-
plementing wage increases in. October 1983.. In
adopting the judge's conclusion, however, . we .
stress that the Respondent's abrogated contract
with Teamsters Local 810 cannot justify or require
the increases.
In Independent Assn. of Steel Fabricators,3 we
found the Respondent violated, Section 8(a)(2) and
(1) of the Act by executing a collective-bargaining
agreement with Teamsters Local 810 at a time..
when Shopmen's Local Union No. 455 represented.
a majority of its employees. On 30 September 1980
we ordered the Respondent to abrogate its contract
with Local 810, and to instead recognize and bar-
gain with Local 455.4 On 7 June 1982 the Second
Circuit Court of Appeals enforced our Order.
i The caption is amended to add the Party in Interest
2 In sec II,(b), par 6, of his decision, the judge erroneously stated'
Shopmen's Local Union No 455 notified Allied Building Metal Industries
on 20 June 1976, rather than 20 January, that it did not consent to certain
members withdrawing from that multiemployer bargaining association
In fn 2 and elsewhere in his decision, the 'judge incorrectly spelled
The Peelle Co ' s name as "Peele "
In his decision the judge made certain erroneous erros We correct
these inadvertent errors
8 252 NLRB 922 (1980), enfd sub nom NLRB v Koenig Iron Works,
681 F 2d 130 (2d Cir 1982)
* Id at 924
811•
The Respondent now argues that the ' abrogated
contract's annual October ' increases became estab-
lished conditions of employment that the Respond-
ent may implement without bargaining with, Local
455. We decline the Respondent's invitation'to res-
urrect the abrogated Local 810 contract. To do so
would undermine the Respondent's employees'
right to be represented exclusively by Local 455,5
and would frustrate our prior" Order.
2. In adopting the judge's conclusion that the.,
Respondent and Local 455 did not reach an im-
passe in negotiations on 21 September 1983 that
would justify the Respondent's 'unilateral wage in-
creases, we rely on evidence other than that the
judge cited. ' '
The Respondent, in negotiating sessions held
before 21 September, proposed annual "across-the-
board" increases of 40 cents per hour in April, and
30 cents per hour in October. On 21 September,
the Respondent for the first time proposed an
annual "minimum" increase of 75 cents per hour,
and stated that some employees would get greater
increases.
The Respondent's attorney told Local 455's rep-
resentative, William Colavito,, if he, did not accept
the Respondent's offer, the Respondent would con-
sider the parties at an impasse and put the wage in-
creases into effect. Colavito protested, stating that
they were not at an impasse and that the Respond-
ent's new proposal was "not rejected." Colavito
further said: "[G]ive me a list of how each guy is
going to get an increase. Then we'll negotiate on
it." The Respondent mailed Colavito a list on 27
September. On 6 October, however, the Respond-
ent implemented the wage increases without even
speaking to Colavito regarding the list.
Under : these ` circumstances,. we, agree that the, '.
Respondent's unilateral increases violated Section
8(a)(5)' and (1).6_.
,,
ORDER
The National Labor Relations Board-adopts the .
recommended Order of the • administrative law
judge and orders that the Respondent, Koenig Iron
Works, Inc., Nev York, New York, its officers,
agents, successors, and assigns, shall take' the action
set forth in the Order.
Cf Consolidated Fiberglass Products, 242 NLRB 10 (1979) (employer
not privileged to unilaterally implement wage increases . pursuant to abro-
gated predecessor union 's memorandum of agreement)
6 See Mary Ann's Bakery, 267 NLRB 992, 994 (1983).
Beatrice Kornbluh, Esq., counsel for the General Counsel.
Robert A. Goldstein, Esq. (Kliegman, Goldstein, Israel &
Cooper), of New York, New York, for the Respondent.
276 NLRB No. 83
812 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Belle Harper, Esq. (Sipser, Weinstock, Harper & Dorn), -of
New York, New York, for the Charging Party.
Sidney Meyer, Esq., of New York, New York, for Local
810 IBT.
DECISION
STATEMENT OF THE CASE
RAYMOND P. GREEN, Administrative Law Judge. This
case was heard by me on April 17, 18, and 20, 1984. The
charge in this proceeding was filed on July 8, 1983, and
a complaint- was issued on October 31, 1983. In sub-
stance, the complaint alleges: (1) that Respondent has ne-
gotiated with the Union in bad faith, with no intention of
reaching a contract; (2) that Respondent by an alleged
supervisor, Vincent Marano, urged and solicited employ-
ees to sign cards designating Local 8101 as their repre-
sentative; and (3) that about October 3, 1983, Respondent
unilaterally granted wage increases to its employees
without having bargained about the wage increases and
without having reached-an impasse with the Union.
FINDINGS AND CONCLUSIONS
A. Jurisdiction
It is agreed by all parties that Koenig Iron Works Inc.
is an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act. It also is agreed
that the Union is a labor organization within the meaning
of Section 2(5) of the Act.
B. Background
This is one of a group of related cases,2 all of which
have a long history of litigation. Insofar as it is relevant,
the background is described below.
For a period of time prior to 1975, Koenig had main-
tained a collective-bargaining relationship with the
Union on an independent, as opposed to multiemployer,
basis. (Before 1975, the Union also bargained with an
employer association called the Allied Building Metal In-
dustries Inc.) As a result, Koenig and other independent
companies which bargained with the Union came to
have a history of executing a series of successive con-
tracts which basically were referred to as the standard
independent contract. ; Over a. period of, time there
evolved a degree, of difference between the standard in-
dependent-contracts and the Allied contracts.
In early 1975 Koenig, along with other companies
which were not members of the Allied Building Metal
Industries Inc. (the Allied Association), decided to form
their own multiemployer association called the Independ-
ent Association of Steel Fabricators. One of the new As-
i Local 810 International Brotherhood of Teamsters, Chauffeurs,,War-
ehousemen and Helpers of America
2 On various days in February, March , April, June, and September
1984, I heard a number of other cases. where the facts were substantially
related to the instant case These were Roman Iron Works Inc , Case 29-
sociation's goals was to achieve parity with the contract
held by the Allied Association.
Bargaining between the Union and the Independent
Association commenced on June 10, 1975. No contract
having been reached by June 30, 1975, the Union com-
menced a strike on July 1, 1975. From July 1 to late
August there was a hiatus in negotiations, - albeit one of
the Independent Association's members signed a separate
contract with the Union.
In late August and through October 1975, negotiations
were held between the Union and the Independent Asso-
ciation. However, as both sides stuck to their guns on a
number of issues , not much progress was made. In Octo-
ber the spokesman of the Association advised Local 455
that another union was interested in organizing the -em-
ployees involved. Subsequently, between November 1975
and January 1976, some of the employer-members of the
Independent Association, including Koenig, entered into
contracts with Local 810, International Brotherhood of
Teamsters, an action later held to be unlawful by the
Board and the Second Circuit Court of Appeals at 231
NLRB 264 and 582 F.2d 135
In early January 1976, the Union and the Allied Asso-
ciation reached a contract settlement. On January 14 the
Union offered the wage and fund package to the Inde-
pendent Association on the same basis as had been
agreed to with the Allied Association. However the In-
dependent Association, desirous of parity, offered to
accept the exact same terms as had been agreed to with
the Allied Association The Union refused. On January
16, Local 455 was notified that 19 of the Independent
Association's members had withdrawn from the Associa-
tion . On January 20, the Union notified the Association
that it did not consent to such withdrawals. It further ad-
vised that any agreement made between it and the Asso-
ciation 's remaining members would be binding on those
employers who had attempted to withdraw without the
Union's consent. -
On January 23, 1975, Local 455 met with three em-
ployers who had not withdrawn from the Independent
Association. At this meeting the parties present reached
an agreement , although the three employers stated that
they were not authorized to represent the Association.
Thereafter in' late January, five employers signed the
January 23 stipulation , 'albeit refusing to do so on behalf
of the Independent Association. -
Meanwhile, the strike was continuing against the other
members of the Independent Association who had not`
signed contracts with Local 455. The Union thereupon
sent a letter to the employers who had withdrawn from
the Independent Association, requesting that they imple-
ment the January 23 stipulation.3 Two employers did
execute agreements identical to the January 23 stipula-
tion . The 17 others, including Koenig, did not.
In light of the situation summarized above, Local 455
-filed various unfair labor practice charges. Also an unfair
labor practice charge was filed against the Union. All of
CA-10583, Achilles Construction Co, Case 29-CA-10585, The Peele a On the theory that their withdrawals from the Independent Associa-
Co, Case 29-CA-10584, and G Zaffino and Sons Inc, Case 29-CA- tion were untimely and therefore they were bound to execute any agree-
10582 As the cited cases were not consolidated for hearing with the ment made between the Union and the remaining members of the Asso-
present case , I have issued separate decisions in each of these ciation •
KOENIG IRON WORKS
those cases were consolidated for trial and ultimately led
to a series of decisions by the Board and the Second Cir-
cuit Court of Appeals reported at 231 NLRB 264, 582
F.2d 135, 252 NLRB 922, and 681 F.2d 130 (1982). Inso-
far as relevant to the present case, certain former mem-
' bers of the Independent Association, including Respond-
ent, were ordered to bargain on an individual basis, as
opposed to a multiemployer'basis, with Local 455. Also,
certain employers who had executed contracts with
Local 810 were ordered to abrogate such contracts and
withdraw recognition with that Union.
As noted above, Koenig was one of a number of com-
panies which signed a contract with Local 810. It there-
fore maintained a collective-bargaining relationship with
Local 810 during the intervening years before the court,
on June 7, 1982, enforced the Board's Order. That Order
required Koenig, inter alia, to (1) bargain with Local
455, (2) to abrogate its contract with Local 810, and (3)
to withdraw recognition to Local 810.
C. The 8(a)(2) Allegation
Following the court's June 6 opinion, the Union sent a
letter to Koenig asking to commence negotiations. The
first meeting was held on August 18, 1982, and subse-
quent meetings were held until January 1984. On July
12, 1983. Local 810 filed a petition for an election in
Case 2-RC-19374. It is the General Counsel's contention
that the Respondent through its alleged supervisor, Vin-
cent'Marano, "urged and solicited employees . . . to sign
cards designating Local 810 as their representative for
collective bargaining purposes."4 .
. There is no dispute as to the fact that Vincent Marano
did indeed solicit authorization cards for Local 810.5
What is at issue is whether he was a supervisor within
the meaning of the Act and, if so, whether his actions
would warrant the conclusion that the Employer gave
unlawful assistance to Local 810.
Marano is the highest paid employee as well as being
one of the most experienced He has the title of "fore-
man" but this does not necessarily mean that he has su-
pervisory authority. The General Counsel presented two
witnesses who testified to Marano's supervisory status.
Both of these witnesses, however, generally worked in
the field outside the shop and therefore had minimal con-
tact.with Marano, who as a machinist worked inside the
shop with four or five other employees. The testimony
of the two witnesses was therefore sketchy at best and
tended to be conclusionary in nature . In essence, they
testified that Marano gave out work, gave orders, and
told people what to do. There was no evidence to show
that he had the power to hire, fire, transfer, suspend,
layoff, recall, promote, reward, or discipline employees,
or to recommend such actions. Also, he does not adjust
employee grievances. Finally, despite the conclusionary
testimony of the General Counsel 's witnesses , who had
little contact with Marano, the evidence does not, to my
4 On February 16, 1984, the Regional Director of Region 2 dismissed
the representation case filed by Local 810 because of the pendency of the
instant unfair labor practice proceedings
S There was no evidence that any employee was in any way threat-
ened in connection with the solicitation of cards for Local 810.
813
mind, establish that he assigned or directed work, using
independent judgment.
In view of the above, I do not believe'that the General
Counsel has shown that Marano is or was a supervisor
within the meaning of the Act.6 Accordingly, his solici-
tation of authorization cards for Local 810 is not viewed
by me as being illegal under Section 8(a)(2) of the Act.
D. The Wage Increases
The complaint alleges that about October 3, 1983,
"Respondent unilaterally "changed existing wage rates
and other terms and conditions of employment by giving
employees in the unit . . . unilateral wage increases
without having bargained in good faith with the Union
concerning such changes, and without having reached
impasse with the Union." No amendments to the com-
plaint were offered by the General Counsel during the
trial, and therefore I shall confine myself to the allega-
tions as set forth above.
Since 1976, Koenig had maintained (albeit illegally)
collective-bargaining agreements with Teamsters Local
810. Pursuant to the last contract, Koenig's employees
were scheduled to receive wage increases in each Octo-
ber. When the court ultimately abrogated that contract
there remained unfulfilled a 60-cent-per-hour wage in-
crease for October 1982 and a 50-cent-per-hour-wage in-
crease for October 1983.
After negotiations commenced (in August 1982) the
Company put into effect a set of wage increases for its'
employees in October 1982. These wage increases were
generally for 60 cents per hour, although one employee
got a 50-cent raise and three others (including Vince
Marano) received $ 1 raises . These wage increases, al-
though occurring after negotiations began, are not al-
leged as being violative of the Act, presumably because
they occurred outside the 10(b) statute of limitations
period.
The evidence shows that on February 25, 1983, Cola-
vito objected to various companies represented by Israel
granting unilateral wage increases. The record also
shows that in response , Israel told Colavito that he was
putting the Union on notice that because those compa-
nies previously had contracts with Local 810 they would
give the prospective increases as provided in their abro-
gated contracts.
The record shows that at a meeting on September 21,
1983, between Koenig and Local 455, the Company as-
serted that an impasse had been reached in negotiations
and that it intended to put in effect, as of early October,
its last wage offer of 75 cent per hour. Colavito was also
told that some employees might get more than • 75 cent
per hour. Colavito objected, stating that there was no
impasse and asserted that the Company should not put in
effect the proposed increases . He also stated that he
wanted to get the details as to what each employee was
to receive as he was concerned with pay inequities. The
Company's principal, Barry Leistner, responded that he
6 It is noted that both Local 455 and Local 810 have historically in-
cluded "foremen" in their respective collective- bargaining agreements
814 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was not worried about inequities in pay, that he negotiat-
ed directly with the men.
By letter dated September 27, 1983, Israel forwarded
to Colavito -a list of the proposed wage increases. This
list shows that of 21 employees,' 12 were scheduled to re-
ceive a 75-cent-per-hour raise, while the others were
scheduled to receive increases ranging from 90 cents per
hour to $4 per hour. These raises were thereafter put
into effect on October' 6, and it was not until a meeting
on October 24 that. the Company offered to explain to
Colavito why each employee got what he "got.
The problem with unilaterally granting wage increases
during collective- bargaining negotiations is that the two
actions are essentially mutually inconsistent. The whole
purpose of collective bargaining is to deal with the em-
ployees' representative ,to set up a mutual agreement to
govern the employees' wages, hours, and terms and con-
ditions of employment.- Therefore, to grant' wage in-
creases or make other changes in working conditions
'during negotiations, absent impasse or the Union's con-
sent, is necessarily to undermine the bargaining process.
Thus, the Board in Taft Broadcasting Co., 103 NLRB 475
(1967), stated:
An employer violates his duty to bargain if, when
-negotiations are sought or are in progress, he unilat-
erally institutes changes in existing terms and condi-
tions of employment. On the other hand, after bar-
gaining to an impasse , that is , after good-faith nego-
tiations have exhausted the prospects of concluding
an agreement , an employer does not violate the Act
by 'making unilateral changes that are reasonably
comprehended within his pre-impasse proposals.
Respondent, argues that the Union waived its right to
bargain about unilateral . wage increases during negotia-
tions. While it clearly could be possible for a union to do
this, I"simply do not view the facts as supporting such- a
contention. There is no doubt in my mind that Colavito,
from the inception of bargaining, asked to be kept in-
formed in advance of any proposed changes by Koenig
or any of the other companies represented by Israel. He
explicitly expressed his dissatisfaction with unilaterally
granted raises by another" company ( Roman) in parallel
negotiation on February 25 and July 20, 1983. As to
Koenig, the evidence shows that on September 21, 1983,
.when Koenig notified the Union that it intended to put
its last wage offer into effect in early October (claiming
an impasse) Colavvito objected. If anything, the evidence
is overwhelmingly contrary to any assertion by Respond-
ent that the Union waived its right to bargain about in-
terim wage increases.'
Respondent also argues that it was excused in, granting
these wage increases because the Union, for an extended
period of time, desired to discuss language rather than
economic proposals.' In certain circumstances, an em-
ployer may be justified in implementing unilateral
changes during the course of bargaining when ""a union,
7 I do not view as constituting a waiver the Union's offer, as' partof a
full contract, to give the Company credit for increases given prior to the
execution of a contract. Such a proposal obviously was made on the as-
sumption that an entire contract would be executed
in response to 'an employer's diligent and earnest efforts
to' engage in bargaining , insists on continually avoiding
or delaying bargaining" M & M Building Contractors, 262
NLRB ' 1472 (1982), and AAA Motor Lines, 215 NLRB
793 (1974). In regard to this case, 'although it may be
.true that the Union prefered• to discuss noneconomic
issues first, that desire was acquiesced in 'by Israel. That
is, the evidence herein shows that Israel was content to
talk about noneconomic issues until' about May 1983 and
that he never told Colavito that-the lack of-discussion on
wage increases was hindering the Company's ability to
do business, to retain qualified employees or that it even
was having an adverse affect on employee morale. If Co-
lavito's -"delay" in discussing economic issues was
thought to thwart the normal process of granting period-
ic increases, this was not mentioned to Colavito during
the negotiations.
It is contended by Respondent that the October 1983
raises were consistent with its past practice and therefore
lawful. In this regard, while it is true that Respondent
had a practice (pursuant to its illegal contract with Local
810) of granting annual raises each October, that con-
tract provided that the wage increase for October 1983
was' to be 60 cents per hour for all employees. Assuming
arguendo that Respondent was entitled to continue its
.practice of granting annual wage increases each October,
the" facts herein show that the amount of the raises grant-
ed in 1983 (and in previous years) covered a wide range
with the contractual wage increase used as a base: Thus,
-the record shows that there was considerable discretion
used in' determining the extent of 'the wage increases
granted to each of the Company's unit employees. As
stated by the Board in Oneita Knitting Mills, • 205 NLRB
500 fn. 1 (1973):
Respondent argues that a finding that the unilat-
eral grant of merit increases was a violation of Sec.
8(a)(5) would be inconsistent with the holding of
this Board in Southeastern Michigan Gas Company,
198 NLRB No., 8, wherein we found a discontinu-
ance of merit increases to have been a violation of
Sec. 8(a)(5). We disagree. An employer with a past
history of a merit increase program neither may dis-
continue that program (as we found in Southeastern
Michigan) nor may he any longer continue to unilat-
erally exercise his discretion with respect to such
increases, once an exclusive bargaining agent is se-
lected. N.L.R.B. v. Katz, 396 U.S. 736 (1962). What
-is required is amaintenance of preexisting practices,
i.e., the general outline of the ' program, however
the implementation of that program (to the extent
that discretion- has existed in determining the
amounts or timing of the increases), becomes a
"matter as to which the bargaining agent is entitled
to be consulted.
.
Finally, Respondent argues that it' was `privileged in
implementing the October 1983 wage increases 'because
an impasse had been reached in bargaining and those in-
creases were consistent with its last' preimpasse offer.
This argument fails for two reasons. First, I am not con-
vinced that an impasse was-reached-as of September 23,
KOENIG IRON WORKS
1983,, and the facts show that during this very meeting
the Union modified its contract demands Second, even if
an impasse had been reached, the wage increases were
substantially in excess of the Company's last offer, at
least insofar as almost 50 percent of its employees.
Therefore, for all of the foregoing reasons it is my
opinion that by unilaterally granting wage increases to its
employees about October 6, 1983, during the course of
contract negotations with the Union, Respondent violat-
ed Section 8(a)(1) and (5) of the Act.
E. The Surface Bargaining Allegation
The complaint alleges that Respondent bargained with
no intention of reaching agreement and therefore violat-
ed Section 8(a)(5) of the Act.
As noted above, after the court on June 6, 1982 issued
its decision, Local 455 made a demand upon Koenig to
start negotiations. 'On July 12, the Union sent another
letter requesting information including the names and ad-
dresses of Koenig's employees
On August 18, 1982, a meeting was held between Co-
lavito and Israel, who in addition to representing Koenig
also represented Roman Iron Works; G. Zaffino and
Sons, Inc.; the Peele Co.; Mello Metal Products; Master
Iron Craft Corp.; Achilles Construction; and Mohawk
Steel Fabricators, Inc.8 (All of those companies had been
members of the Independent Association and had been
involved in the prior litigation.) At this time, Colavito
presented as the Union's proposal certain wage increase
demands plus the same Standard Independent Contracts
which these companies had rejected in 1975. Israel, on
behalf of his clients, told Colavito that they would not
,agree to the Standard Independent Contract and would
each insist on negotiating contracts suitable to them-
selves.
At the outset, it is noted that Section 8(d) of the Act,
which defines the duty to bargain, does not compel
either party to a collective-bargaining relationship to
agree to a proposal or to make a concession. Thus, inso-
far as mandatory subjects of bargaining (generally relat-
ing to wages, hours, and terms and conditions of employ-
ment), the Act does not' require either party to yield or
compromise its position. In this respect, the Supreme
Court in NLRB v. American National Insurance Co., 343
U.S. 395 (1952), stated: "[T]he Board may not, either di-
rectly or indirectly, compel concessions or otherwise sit
in judgment upon the substantive terms of collective bar-
gaining agreements."
The Court further stated in H.K. Porter Co. v. NLRB,
397 U.S. 99 (1970):
It is implicit in the entire structure of the Act that
the Board acts to oversee and referee the process of
collective bargaining, leaving the results of the con-
test to the bargaining strengths of the parties ... .
While the parties' freedom of contract is not abso-
lute under the Act, allowing the Board to compel
agreement when the parties themselves are unable
to agree would violate the fundamental premise on
8 Of these companies , Master, Mohawk , and Melto ultimately signed
contracts with Local 455
815
which the Act is based-private- bargaining under
governmental supervision of the procedure alone,
without any official compulsion over the actual
terms of the contract
It also,is clear that it was the intention of Congress to
permit (within limits) employers and unions to utilize
their• relative economic strengths, vis a vis each other, as
part of the bargaining process.9 As pointed out by the
Supreme Court in NLRB v. Insurance Agents Union, 361
U:S. 477 (1960):
The presence of economic weapons in reserve, and
their actual exercise on occasion by the parties, is
part and parcel of the system'that the Wagner and
Taft-Hartley Acts have recognized . . . the truth of
the matter is that at the present statutory stage of
our national labor relations policy, the two fac-
tors-necessity for good-faith bargaining between
parties, and the availability' of economic pressure
devices to each to make the other party incline to
agree on one's terms-exist'side by side.
It, therefore, is not necessarily unlawful for the strorig-
er side to make demands or take positions consistent with
its strength. Quite obviously, the respective strength of a
union versus a company in bargaining is largely depend-
ent on the support of 'the employees it represents, their
willingness to strike, and the vulnerability of the compa-
ny to a strike See for example World Publishing Co., 220
NLRB 1065, 1071 (1975), enfd. 454 F.2d 1138 (8th Cir.
1976). Furthermore, collective bargaining is basically a
two-way street. Thus while a union may lawfully make
demands designed to improve existing employee wages
and benefits, there is nothing in the Act which denies an
employer the right, for its part, to demand givebacks.
Where the parties are negotiating to replace a prior con-
tract, neither side is precluded from seeking modifica-
tions to its own advantage. The Act simply does not pre-
clude an employer from demanding that various provi-
sions of the old contract be modified, altered, or even
eliminated. Thus, in the present case, when the General
Counsel argues that Respondent sought to modify or
eliminate contractual provisions contained in the contract
which expired in 1975, I am unimpressed as to the mate-
riality of such a fact.
Although it is not illegal for a company to engage in
hard bargaining, Section 8(a)(5) of the Act nevertheless
requires the company to bargain in good faith, which is
essentially defined as a willingness to enter into a con-
tract NLRB v. Insurance. Agents Union, 361 U.S. 477,
485. -Thus, although a company may use its relative
strength to press for contract terms favorable to itself, it
may not use its strength to engage. in futile or sham ne-
gotiations with the intention of never reaching an agree-
ment . NLRB v. Herman Sausage Co., 275 F.2d 229, 232
(5th Cir. 1960). As stated in Abingdon Nursing Center,
197 NLRB 781, 787 (1972):
9•There are of course statutorily defined limits upon each side's use of
economic power Thus , for example. Sec 8 (b)(4)(B) prohibits a union
from engaging in secondary boycotts , and Sec 8(a)(3) precludes an em-
ployer from discharging employees who join or support a union
816 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD
Good faith, or want of it, is concerned essentially
with a state of mind .... That determination must
be based upon reasonable inference drawn from the
totality of conduct evidencing the state of mind
with which the employer entered into and partici-
pated in the bargaining process . . . . All aspects of
the Respondent's. bargaining . and related conduct
must be considered in unity, -not. as separate frag-
ments each to'be assessed in isolation.
The bargaining in the present case commenced on
August 18, 1982, and there is no contention that Koenig
failed or refused to meet at reasonable times or places.
The evidence shows that at the start of negotiations
Colavito presented to each company, represented by
Israel the Standard Independent Contract. Israel told Co-
lavito, at the initial meeting, that Koenig was not-going
to supply the addresses of the employees. He also said
that Koenig was offering Local 455 a modified version
of the Local 810 contract. More specifically, Israel at
this point stated that he wanted a 10-year contract with
the first 2 years having the same wage increases as con-
tained in the abrogated Local 810 contract. As for the
remaining years, Israel proposed that for.the next 5 years
the employees get 50-cent raises each year and for the
-final 3 years of the contract there would be a reopener
for wages with interest arbitration. Israel stated that the
-Company would offer the equivalent health benefits as
contained in the Local 810 contract and that it would
offer the same pension contribution as the Local-810
contract, but not to a multiemployer pension fund.
By letter dated August 26,.1982, Israel, in addition, to
providing certain information requested by Colavito;
`stated: .
You will recall-that on August 18th a specific_coun-
'-terproposal was made on behalf of the company.-In
furtherance of that proposal we are enclosing here-
with a copy of the voided Local 810 agreement.
That agreement, as .modified in the proposal given
by you, is the basic agreement which this company
is willing to sign : We call your attention, however,
to the following:
(1) Please `disregard - those markings in the en-
closed contract which are marked "stet".
(2) The company is not proposing a'Union shop
(although. it is. agreeable to a checkoff) so that Arti-
cle III is to be deleted.
(3) Articles XXII, XXIII and XXIV, of course,
are to be deleted in -accordance with the proposal
previously made to you: The same is true as-to Ar-
ticle XXXIII.10
Local 810. Israel responded that the Company did not
want to force any employee into joining the Union, that
if they wanted to join that was their business. Another
series of meetings were held in November 1982 between
Colavito and Israel on behalf of his various clients.
Nothing of particular importance seems to have occurred
in connection with the negotiations between the Union
and Koenig at that time. (It appears that during those ini-
tial months of ' bargaining much of the time by Colavito
and Israel centered around the Roman negotiations and
related to noneconomic proposals made by each side.)
On December 12, 1982, Colavito sent Israel some
modifications of the Union's demands. On December 15,
1982, the Company agreed to the Union's revised section
1 and its revised section 15.-11 On January 4, 1983, after
Israel had been notified by the Regional Director for
Region 29 that the withholding of names and addresses
was probably unlawful, he forwarded this information to
the Union.
Between January and May 1983 not much seems to
have 'transpired in the negotiations between Koenig and
Local 455. However, Israel recalls that at a meeting on
April 6, 1983, he told Colavito that Koenig wanted to
make a final offer but had not done so because the Union
had not done anything about economics. Israel states that
Colavito asked if the Employer would accept a 4- year
contract and that Israel replied that.he did not know. He
asserts that he asked Colavito to make an economic
counterproposal and that Colavito agreed to do so.
At a meeting on May 27, 1983, Colavito made a
formal presentation of his revised economic demands to
all the companies. Israel, after reviewing the modifica-
tions, expressed the opinion that the Union's concessions
were not adequate. On June 6, 1983, Israel sent a, letter
to Colavito regarding Koenig as follows:
i
A second meeting was held between Local 455 and
Koenig on September 20, 1982. At this meeting Colavito
asked why the Company was not willing to have 'a
union-secunty_- clause , especially as it had one when it
maintained prior contracts with both Local 455 and
This letter is being submitted to you as a FINAL
offer in advance of our June 7, 1983 negotiating ses-
sion. -
The offer made at our August 18, 1982 meeting and
confirmed in our August 26, 1982 letter, as thereaf-
ter modified in our letter of December 21, 1982, is
hereby further modified in the following regards:
(1) The term of the Agreement shall be six (6)
years from October 6, 1982.
(2) A 50¢ per hour across-the-board wage increase
will be given October 6, 1983; thereafter across-the-
board wage increases of 40¢ per hour will be given
on April 6 of each year and 30Q on October 6 of
each year.
(3) A work shoe allowance of $50•per year will
be'given effective October 6, 1983; $55 per year ef-
fective October 6, 1984; $60 per year effective Oc-
tober 6,1985. -
(4) Classification rates shall be as' set forth in the
contract previously mailed to you; the 3rd year
10 Arts. XXI, XXIII, and XXIV of Local 8 10's contract refer to Local .
.810's welfare and pension funds Art XXXIII refers to the wages and 11 Sec 1 is a description of the bargaining unit and sec 15 is a nondis-
classifications in Local 810's contract cnmination clause
KOENIG IRON WORKS
rates to prevail from October'6, 1983 for the bal-
ance of the Agreement.
(5) Effective October 6, 1983 the Company will
contribute $16.90 per week per employee (for each
employee with one year's service) to a single em-
ployer defined contribution retirement plan to be set
up by the Company.
(6) A "union shop" is acceptable so that Article
III of the Agreement previously mailed to you will
not be deleted.
(7) There shall be no restriction on subcontract-
ing.
(8) Sections 2 and 21 of your Standard Independ-
ent Contract will be added to the Agreement.
The next meeting was held on June 13 instead of June
7. At this meeting there was discussion of the Company's
offer noted above. Also, the Company informed the
Union that a number of 'employees- had- just received
wage increases ranging from 50 cents per hour to' $1 per
hour. Colavito asked why he had not'been told of these
raises 'before they were given and-said that the Company
had the Union "spinning wheels" by granting these- in-
creases. After the meeting ended; Colavito asked Israel if
Koenig.-was flexible on anything. He stated that Israel
said the Company might be flexible on wages and on•the
length of the contract. (Note that the Company had gone
from asking for a 10-year contract to a 6-year contract.)
On July 5, Colavito further revised the Union's de-
mands and among other things proposed that the con-
tract be 4 years. On July 15, in response to the Union's
revisions, Israel modified Koenig's "final offer." He of-
fered $20 per week per man for an annuity instead of the
previously offered $16 per week per man. He also pro-
posed that the Company would increase this contribution
to $25 as of January 1985.
A meeting was held on July 22, 1983, at which Israel
said that although Local 810 had filed a petition for an
election (on July 12, 1982) the Company -was going to
continue to negotiate with Local 455 and was not going
to have any dealings with Local 810. At this meeting,
after Colavito made some further concessions, the Com-
pany offered to discontinue its own health insurance
policy and to substitute Local 455's welfare fund with
contributions of $40 per week per man to the Fund. It
also offered to raise the contribution in-August 1984 to
$45. When Colavito offered to-add another year to the
contract (to 1978), along with some other proposals, the
Company said no'. •
On July 28, 1983, in response to Colavito's request for
a written statement of each company's proposals, Israel
sent a letter which included Koehig's last economic offer
as follows:
Koenig
(a) Six year contract effective October 6, 1982.
(b) Across-the-board wage increases as follows:
10/6/83-50 cents per hour -
4/6/84-40 cents per hour
10/6/84-30 cents per hour
4/6/85-40 cents per hour
10/6/85-30 cents per hour
817
4/6/86-40 cents per hour
10/6/86-30 cents per hour
4/6/87-40 cents per hour
106/87-30 cents per hour
4/6/88-40 cents per hour
(c) Classification minima for life of contract*
Layout Man-$9.80 per hour .
Mechanic A-$8.30 per hour -
.Mechanic B-$7.55 per hour
Helper-$6.55 per hour ,
(d) Pension contributions to single employer de-
fined contribution plan with immediate vesting; one
year of service as a qualification for eligibility.
(e) Company will pay $40.00 per week to Local
455 welfare program effective 7/1/83 and $45 -per
week effective 8/1/84. It will discontinue its wel-
fare program on 9/1/83.
(f) Work shoe allowance per year: -
Effective:
10/83-$50 -
10/6/84-$55
10/6/85-$60
(g) All other existing economic items to remain as
is.
This letter is intended only as the recapitulation you
requested. It is not intended to modify any prior
offers or current positions and any discrepancy be-
tween the prior offers and this recapitulation is to
be resolved in favor of the prior offers.
I wish also to point out that each of the employers
requires the same sub-contracting clause as negotiat-
ed with Master. I mention this item specifically in-
asmuch as you might consider it as part of the eco-
nomic package. • .
The meetings scheduled for August and September
were called off by each side respectively However, on
September 21, 1983, at a meeting between the parties, the
Company revised its wage offer so that instead of a 40-
cent and 30-cent raise, respectively, on October 1983 and
April 1984, it proposed a 75-cent-per-hour raise in Octo-
ber 1983. It also stated that if the Union did not. accept
the proposal with this last revision, the Company would
claim that an impasse had been reached and implement
this wage proposal in October. As noted above, Colavito
objected and stated that. he did think that there was, an
impasse . Also as noted above, wage increases were put
into effect, over Colavito's objection, on October 6,
1983. - f
Following the September 21 meeting and the October
6 wage increases, a number of meetings were held but no
further progress was made as the;company stood on its
last offer,. as modified on September 21, 1983. Thus, a
series of essentially fruitless meetings took place in Octo-
ber, November, and December 1983 and January 1984.
Also a variety of correspondence passed between, the
parties up until March 1984.
The gravaman of the General Counsel's contention is
that Respondent engaged in "surface bargaining" in that
Respondent bargained with no intention of reaching an
818 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agreement. Yet as early as September 20, 1982, the Com-
pany proposed a complete contract which, although not
to Local 455's liking, was` capable of acceptance. Among
other things the proposed contract contained provisons
for wage increases, for a hiring hall, for -dues checkoff,
for holidays, for discharge (only for just cause), and for
the arbitration of disputes utilizing the American Arbitra-
tion Assertion. Further, as negotiations between Koenig
and Local 455 intensified, from about June through Sep-
tember 1983, the Company made various concessions as
to wages, welfare funds, pensions, and the length of its
proposed contract among other items. _- -
Notwithstanding the above, the General Counsel
points to a number.of^evidentiary factors from which she
argues that I should infer surface bargaining. The salient
points are:
1. The General Counsel points out that, Respondent re-
fused to furnish the addresses of its employees until Janu-
ary 1983. Notwithstanding the fact that Local 455 was
held to have- committed some 8(b)(1)(A) violations in
1975, I have no doubt that Koenig was legally obligated
to furnish the names of its employees in 1982. Gehnrrch
& Gehnrich, Inc., 258; NLRB 528, 535 (1981). However,
the Company's refusal to furnish the addresses of its em-
ployees is not alleged as an independent violation of the
Act, and, in my opinion is only remotely related to the
issue of surface bargaining.
2 The General Counsel 'points to the unilateral in-
creases granted during the negotiations, which I have
found above to have constituted a violation of Section
8(a)(1) and (5) of the Act. Unlike the refusal to furnish
addresses, it is my opinion that the unilateral wage in-
creases are much more directly related to the issue of
surface bargaining. See, e g.; NLRB v. Fitzgerald Mills
Corp., 313 F 2d 260, 267 (2d Cir. 1963). Yet here too we
are dealing-with evidentiary points and one cannot say
that such unilateral changes necessarily demonstrate an
intent to avoid entering into a contract.
3 The General Counsel contends that the Company's
insistence on a provision which would permit it to sub-
contract is evidence of its intention to avoid reaching an
agreement. Her argument appears to be that if the Com-
pany was able to obtain such a clause it theoretically
could subcontract out all of its business and eliminate the
bargaining unit.
Subcontracting is a mandatory subject of -bargaining
which means that either side may insist on its position re-
garding r the subject. Thus, a union would clearly be
within - its rights if during negotiations it insisted on a
clause which precluded all subcontracting by a compa-
ny.' 2 By the same token, I can see nothing illegal. in a
company refusing to agree to subcontracting restrictions
or alternatively insisting on a right to subcontract during
the life of the labor agreement. To hold otherwise
would, in effect, impose a lack of mutuality in collective
bargaining , which I do not believe-was envisioned by
Congress. In the present case there is no evidence that
12 I should note , however, that there are certain types of subcontract-
ing clauses which are illegal pursuant to Sec 8(e) of the Act For a dis-
cussion of so called "union signatory" clauses in the context of Sec 8(e),
see for example Retail Clerks Local 1288 (Meads Markets), 163 NLRB
817 (1967), enfd . 390 F 2d 858 (D C Cir 1968)'
Koenig was taking -its positions, vis a vis subcontracting,
because it, in fact, intended to take the draconian step of
eliminating the bargaining unit. All that can be said is
that Israel , intended to give the Company the option of
subcontracting if economic. circumstances made that de-
sirable. I therefore do not believe that the Company's
position regarding subcontracting is evidence of surface
bargaining in the context of this case.-
4. The General Counsel asserts; in effect, that the
Company wanted significant givebacks from the last con-
tract it had with Local 455. However, there had been a
7-year hiatus between the expiration of that contract and
the resumption of negotiations, and_ a great many
changes had evolved in the Employer's terms of employ-
ment during the interim. Moreover, I do not perceive the
,Act to prohibit a company from. demanding givebacks.
Collective bargaining-is a two-way street and each side is
entitled to try to get the best deal possible for itself.
Given the statutory.scheme,. if a Union does not have the
economic muscle,to back up its demands, it cannot ask
the Board to compel an employer to make a contract
offer more to its liking As the=evidence in this case dem-
onstrates that' the Respondent made various complete
contract offers, the-General Counsel cannot, in my opin-
ion;.assert that the Company had no intention of reach-
ing- an agreement simply because those offers -were
viewed unfavorably by the Union. Gehnrich & Gehnrich,
Inc., 258 NLRB 528. Accordingly, I recommend that
this allegation of the complaint be dismissed
CONCLUSIONS OF LAW
1. Respondent Koenig Iron Works, Inc. is and has
been at all times material an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act. -
2. Shopmen's Local.Union No. 455, International As-
sociation of Bridge, Structural and Ornamental Iron
Workers, AFL-CIO is and has been at all times material
a labor organization within the meaning of Section 2(5)
of the Act.
3. Local 810, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America is
and has been at all times material a labor organization
within the meaning of Section 2(5) of the Act: -
4. By unilaterally granting wage increases in October
1983, without prior notice to and consultation with
Local 455 during contract negotiations , Respondent has
violated Section 8(a)(1) and (5) of the Act. -
5. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
6. The Employer has not violated the Act in any other
respect alleged by the complaint.
REMEDY
Having found that the Employer has engaged in cer-
tain unfair labor practices, I find it necessary to order the
Employer to cease and desist therefrom and to take cer-
tain affirmative action designed to effectuate the policies
of the Act.
KOENIG IRON WORKS 819
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed"
ORDER
The Respondent, Koenig Iron Works, Inc., New York,
New York, • its officers ,, agents, successors , and assigns,
shall
1. Cease and desist from
(a) Refusing to bargain collectively with Shopmen's
Local Union No. 455, International Brotherhood of
Bridge , Structural and Ornamental Iron Workers, AFL-
CIO by unilaterally granting wage increases to employ-
ees, during the course of collective-bargaining negotia-
tions , without prior notice to and consultation with the
Union. Provided, however, that nothing contained in this
Order shall compel Respondent to rescind such wage in-
creases previously granted. -
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the -policies of the Act. -
(a) In the event that Respondent and the Union resume
negotiations , Respondent shall notify the Union. as to all
proposed wage increases to employees in the bargaining
unit and shall not implement such wage increases absent
an impasse in negotiations or consent by the Union.
(b) Post at- its plant copies of the attached notice
marked "Appendix."14 - Copies of the notice, on forms
provided by the Regional Director for Region 29, after
being signed by the Employer's authorized representa-
tive, shall be posted by the Employer immediately upon
receipt and maintained for 60 consecutive days in con-
spicuous places , including all places where notices to em-
13 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 -
14 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
ployees are customarily posted. Reasonable steps shall be
taken by the Employer to ensure that the notices are not
altered, defaced, or covered by any other material.
(c) Notify the Regional Director in writing within 20
days from the date of this' Order what steps the Re-
spondent has taken to comply.
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
APPENDIX '
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS. BOARD
An Agency of the United States Government
The National Labor Relations Board has found that 'we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively with
Shopmen's Local Union No. 455,• International Brother-
hood of Bridge, Structural and Ornamental Iron Workers
AFL-CIO by unilaterally granting merit wage increases
to our employees during the course of collective bargain-
ing negotiations, without prior notice to and consultation
with the Union. -
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
.-In the event that negotiations resume between our
company and the Union, WE WILL offer to notify the
Union in advance of any merit wage increases that we
propose giving to our employees and WE WILL offer to
negotiate. with the Union regarding the implementation
of our merit raise policy.
KOENIG IRON WORKS, INC.