Komatsu America Corp.

National Labor Relations Board - Board Decisions

Jul 30, 2004

342 N.L.R.B. 649 (N.L.R.B. 2004)

KOMATSU AMERICA CORP.
342 NLRB No. 62
649
Komatsu America Corp. and Local Lodge No. 158 of
the International Brotherhood of Boilermakers,
Iron Ship Builders, Blacksmiths, Forgers and
Helpers AFL–CIO. Cases 33–CA–14021 and 33–
CA–14088
July 30, 2004
DECISION AND ORDER
BY MEMBERS SCHAUMBER, WALSH, AND MEISBURG
On June 26, 2003, Administrative Law Judge Marion
C. Ladwig issued the attached decision. The General
Counsel filed exceptions and a supporting brief. The Re-
spondent filed an answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions and
to adopt the recommended Order.
This case arises out of the Respondent’s January 25,
2002 outsourcing initiative.1 The complaint alleged that
the Respondent violated Section 8(a)(1) and (5) by fail-
ing to bargain at a meaningful time and in a meaningful
manner regarding the effects of its outsourcing decision
prior to its “volume-related” reduction in force on July 1.
The complaint further alleged that the Respondent vio-
lated Section 8(a)(1) by prohibiting employees from
wearing a union T-shirt protesting the outsourcing. For
the reasons discussed below, we agree with the judge’s
recommendation to dismiss these allegations.
1. In agreement with the judge, we find that the Re-
spondent satisfied its effects bargaining obligations with
respect to its outsourcing initiative.2 It is well settled that
Section 8(a)(5) of the Act requires bargaining at “a
meaningful time and in a meaningful manner” over the
effects of a decision to close a facility. First National
Maintenance Corp. v. NLRB, 452 U.S. 666, 681–682
(1981). An element of meaningful effects bargaining is
timely notice to the union of the decision. Metropolitan
Teletronics Corp., 279 NLRB 957, 959 (1986), enfd.
mem. 819 F.2d 1130 (2d Cir. 1987). Effects bargaining
also must occur sufficiently before actual implementation
of the decision so that the union is not presented with a
fait accompli. Woodland Clinic, 331 NLRB 735, 738
(2000); Willamette Tug & Barge Co., 300 NLRB 282,
283 fn. 3 (1990). Relevant to this determination is

1 All dates refer to 2002 unless otherwise indicated.
2 While we agree with the judge that the Respondent engaged in
meaningful effects bargaining, we disavow the judge’s implication that
effects bargaining would be illusory because the no-strike clause in the
parties’ collective-bargaining agreement deprived the Union of bargain-
ing power.
whether the union is afforded an opportunity to bargain
“at a time when it still represented employees upon
whom the Company relied for services.” Metropolitan
Teletronics Corp., 279 NLRB at 959.
Applying these principles here, we find that the Re-
spondent satisfied its effects bargaining obligation. The
Respondent announced the outsourcing initiative in
January, well in advance of its implementation. Effects
bargaining ensued at the request of the Union. The Re-
spondent transferred to its facilities in Japan a rear sus-
pension subassembly in January, and one axle assembly
in June, while negotiations were in progress, and also
removed approximately 20 machine tools from the ma-
chine shop.3 The vast majority of assembly and manufac-
turing processes remained, however, following these
transfers, and the General Counsel does not assert that
these transfers prevented meaningful effects bargaining.
The General Counsel does contend, however, that the
Respondent partially implemented its outsourcing deci-
sion on July 1 when it imposed a reduction in force and
thereby presented the Union with a fait accompli, which
did preclude meaningful effects bargaining thereafter. In
agreement with the judge, we find that the record evi-
dence does not support this contention.
First, we find that the General Counsel failed to show a
causal nexus between the outsourcing initiative and this
reduction in force.4 As detailed in the judge’s decision,
the July 1 reduction in force adversely affected the entire
work force, not just the machine shop, and was caused by
a general downturn in business. In the machine shop,
however, there were fewer volume-related layoffs than in
the rest of the work force and the employee complement
in the shop, as a percentage of the total work force, actu-
ally increased following the layoffs. Additionally, at the
time of the layoffs, the Respondent had only outsourced
two components of the nearly 300 components manufac-
tured in the machine shop. Although not mentioned by
the judge in his decision, the record shows that the Re-
spondent added new work in the shop pursuant to an out-
side manufacturing contract that the Respondent received
in June and increased the employee complement in the

3 Five machine tools were moved to Japan because of the June trans-
fer of axle production to those facilities. The remaining machine tools,
which were not used in the production of axles, were obsolete and were
removed as part of the Respondent’s normal tool replacement scheme
for the machine shop.
4 The judge specifically found that the evidence did not disclose how
many of the layoffs in the machine shop resulted from the transfer of
components to Japan and how many resulted from a general downturn
in business. There are no exceptions to this finding. To the extent that
portions of the judge’s analysis elsewhere in his decision could be read
to suggest that the record establishes a nexus between the layoffs and
the outsourcing initiative, we find that the record does not support such
a proposition.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 650
machine shop, as well as the entire work force, after July
1, as business improved. In these circumstances, we find
that a causal nexus has not been shown between the out-
sourcing initiative and the reduction in force.
Second, the parties initiated effects bargaining prior to
the June outsourcing and, notwithstanding the July 1
layoffs, continued bargaining for some time thereafter.
Although the General Counsel asserts that no meaningful
effects bargaining took place prior to the July 1 layoffs,
we find that the parties had exchanged information re-
quests and proposals. Moreover, it is undisputed that
post-July 1 bargaining was substantive and covered all
open issues.
In these circumstances, the Union was not deprived of
its bargaining leverage nor was it presented with a fait
accompli by the July 1 reduction in force. Accordingly,
we find that the Respondent, by meeting with the Union
and bargaining over severance benefits for machine shop
employees both before and after July 1, engaged in
meaningful bargaining at a meaningful time and satisfied
its 8(a)(5) effects bargaining obligation.
2. We also agree with the judge that the Respondent
did not violate Section 8(a)(1) by instructing employees
to stop wearing a T-shirt created by the Union to protest
the outsourcing. In general, employees have a protected
right under Section 7 of the Act to make known their
concerns and grievances pertaining to the employment
relationship, which includes wearing union insignia
while at work. Republic Aviation Corp. v. NLRB, 324
U.S. 793, 801–803 (1945); Southwestern Bell Telephone
Co., 200 NLRB 667, 669–670 (1972); see generally Bell-
Atlantic-Pennsylvania, Inc., 339 NLRB 1084, 1086
(2003), enfd. 99 Fed. Appx. 233 (D.C. Cir. 2004). Here
the T-shirt read: “December 7, 1941” on the front and
“History Repeats Negotiate Not Intimidate” on the back.
We assume, without deciding, that wearing this T-shirt
was protected activity under Section 7.
Section 7 rights, however, may give way when “spe-
cial circumstances” override the employees’ Section 7
interests and legitimize the regulation of such apparel.
Evergreen Nursing Home & Rehabilitation Center, 198
NLRB 775, 778–779 (1972). The Board has previously
found such special circumstances justifying the proscrip-
tion of union slogans or apparel when their display may
jeopardize employee safety, damage machinery or prod-
ucts, exacerbate employee dissension, or unreasonably
interfere with a public image that the employer has estab-
lished, or when necessary to maintain decorum and dis-
cipline among employees. Nordstrom, Inc., 264 NLRB
698, 700 (1982); Southwestern Bell, 200 NLRB at 670
(permitting employer to ban sweatshirt criticizing the
employer in an obscene manner).
Here, the Union’s Pearl Harbor T-shirt directly in-
voked a highly charged and inflammatory comparison
between the Respondent’s outsourcing plans and the
Japanese “sneak attack” on the United States on Decem-
ber 7, 1941. This comparison was especially inflamma-
tory and offensive because the Respondent is a Japanese-
owned company. In addition, an employer may also le-
gitimately be concerned about the potential disruption to
the harmonious employee-management relationship
caused by the provocative apparel of its employees. See
Southwestern Bell, supra at 670.5 Particularly in light of
the Union’s clear appeal to ethnic prejudices, we find
that the T-shirt was sufficiently offensive and provoca-
tive to justify its regulation by the Respondent. Cf.
Noah’s New York Bagels, 324 NLRB 266, 275 (1997)
(stating that employer could prohibit a union T-shirt stat-
ing, “If its not Union, its not Kosher”).6
As in Southwestern Bell, supra, at 671, this conclusion
is fortified by the parties’ longstanding bargaining rela-
tionship with no showing of hostility between the Re-
spondent and the Union; the Union’s previous use of hats
and armbands, without objection, to publicize employee-
management disputes; the fact that no employee was
disciplined for wearing the T-shirt; and the fact that
when employees did wear the T-shirt the Respondent
urged the Union to counsel its members not to wear the
shirts before communicating with employees directly.7
ORDER
The complaints are dismissed.

MEMBER WALSH, dissenting in part.
I agree with my colleagues’ discussion and adoption of
the judge’s recommendation to dismiss the allegation
that the Respondent violated Section 8(a)(5) by refusing
to bargain about the effects of the outsourcing of some
production work. The judge also recommended dismissal
of the allegation that the Respondent violated Section
8(a)(1) by ordering employees to stop wearing a T-shirt

5 Although our colleague takes issue with our reliance upon South-
western Bell, the case is well-established Board precedent dating back
over 30 years and we see no reason to depart from it in deciding this
case.
6 Our colleague criticizes our reliance on Noah’s New York Bagels
because there was no specific allegation in that case that the employer’s
prohibition of the T-shirt was unlawful. We have, however, recently
cited Noah’s for the very principle cited above in Bell-Atlantic-
Pennsylvania, supra at 1086 (cited by our colleague himself for its
general principles) and we accordingly rely on it in deciding this case
as well.
7 As noted by our dissenting colleague, the parties at one point
agreed that the Union would dissuade its members from wearing the T-
shirt as long as effects bargaining negotiations were fruitful. The exis-
tence of this agreement does not detract from our conclusion that the
special circumstances described above justified the Respondent’s pro-
scription of the T-shirt.
KOMATSU AMERICA CORP. 651
created by the Union to protest the outsourcing, finding
that wearing the shirt was not protected activity. Al-
though my colleagues acknowledge that employees have
a protected right under Section 7 of the Act to make
known their concerns and grievances pertaining to the
employment relationship, and assume, albeit without
deciding, that wearing the T-shirt was protected activity
under Section 7, they find that “special circumstances”
override the employees’ Section 7 interests and legiti-
mize the Respondent’s ban on the T-shirt. A review of
the record, however, does not show any special circum-
stances justifying the ban. Accordingly, the Respondent’s
ban on the T-shirt must be held to violate Section 8(a)(1).
1. Background
The Union represents all of the Respondent’s produc-
tion and maintenance employees at the Respondent’s
Peoria, Illinois plant. The unit employees were covered
by a collective-bargaining agreement between the Re-
spondent and the Union at the time of the 2002 events in
question.1
The Respondent is a Japanese-owned company. The
parent company has worldwide operations. Its facilities
in North America include Komex, Mexico; Candiac,
Canada; Chattanooga, Tennessee; and the Peoria facility.
The T-shirts in question were in support of certain
then-pending unfair labor practice charges and griev-
ances filed against the Respondent because of its alleged
failure to give the Union an opportunity to bargain with
the Respondent before implementing changes in terms
and conditions of employment. The T-shirts had “De-
cember 7, 1941” printed on the front and, printed on the
back:
History Repeats
Negotiate
Not
Intimidate
The T-shirts were first worn on Friday, September 6.
About 20 employees purchased them. The record does
not establish, however, how many of the approximately
220 unit employees actually wore the T-shirts. In any
event, the Respondent’s labor relations specialist, Donna
Brooks, called Union President Kevin Kocher (an em-
ployee) that day to ask about the T-shirts. He fully de-
scribed them to her and told her that the T-shirts were
being worn in support of the above mentioned unfair
labor practice charges and grievances, that the T-shirts
were not being distributed en masse, that there was no
demonstration planned, and that there was no plan for
everyone to wear T-shirts on the same day. Kocher im-

1 All dates are 2002 unless expressed otherwise.
mediately followed up his telephone conversation with
Brooks with an e-mail to her, reiterating what the T-
shirts said and what they were being worn in support of.
Later that day, Gary Aubry, vice president of human
resources for Komatsu North America, and the Respon-
dent’s human resources manager, Pamela Slaby, called
Kocher on a conference call. In response to their question
about a rumor they had heard, Kocher told them that the
Union was not going to have a demonstration or any
other organized activity on the following Monday, Sep-
tember 9. After Kocher told Aubry and Slaby what the T-
shirts said, Aubry expressed concern that wearing the T-
shirts could jeopardize the recently initiated negotiations
between the Respondent and the Union over the effects
of the Respondent’s decision to eliminate the machine
shop and some other jobs.2 Aubry told Kocher that the
Respondent would make anyone who wore the T-shirt to
work on the following Monday remove it or wear it in-
side out, or leave the plant or be disciplined. In a subse-
quent telephone conversation on September 6, Kocher
told Aubry that if Aubry would listen to Kocher for half
an hour while Kocher voiced some concerns that he had
about what had been taking place in the plant, then Ko-
cher would make Aubry “a deal that he couldn’t refuse.”
Aubry agreed to listen to Kocher. In return, at the end of
Kocher’s presentation, he told Aubry that as long as the
Respondent and the Union were engaged in fruitful nego-
tiations, Kocher would ask the employees not to wear the
T-shirts. Aubry thanked Kocher, and the conversation
ended.
An additional 15 employees obtained T-shirts on
Monday, September 9 (not from Kocher), but the record
does not establish that any of those employees wore
them. In any event, when Kocher got to the plant at about
6:40 a.m. on September 9, he immediately began search-
ing out employees who were wearing the T-shirts. He
asked approximately nine employees whom he found
wearing them not to wear them again after that day. He
explained to them that he had given his word in an
agreement with Vice President Aubry that the Union
would ask the employees not to wear the T-shirts as long
as the Respondent and the Union were engaged in fruit-
ful negotiations.
Later that day, however, Brooks informed Kocher that
the Respondent was going to distribute a memorandum
to all employees, requesting that they not wear the T-
shirts on company property and warning that anyone who
continued to do so would be subject to (unspecified) dis-

2 The Respondent and the Union had engaged in bargaining on Sep-
tember 4 and 5 about the effects of the Respondent’s decision to elimi-
nate the machine shop and some other jobs. They subsequently engaged
in bargaining on September 11, 12, and 13 about this subject.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 652
cipline. Kocher told Brooks that he and Aubry had an
agreement and that no such memorandum was necessary,
but Brooks said that the Respondent was still going to
distribute it. Specifically, the memorandum told the em-
ployees:

The [“December 7, 1941” inscription] appearing on the
T-shirt constitutes unacceptable ethnic disparagement
of our Japanese co-workers. We have no interest in in-
terfering with anyone’s right to engage in protected,
concerted activity. However, this particular inscription
is offensive and bears no relationship to legitimate em-
ployee interests or working conditions. If you are wear-
ing one of these T-shirts, please change or turn it inside
out. . . . Anyone who refuses to cease displaying the
offensive inscription will be subject to discipline.

At the time of the events in question, six individuals of
Japanese descent were working at the Respondent’s Peo-
ria plant. None were unit employees. Indeed, all were
actually employed by the Respondent’s parent company,
Komatsu Japan. Mike Nakamura and Yasuki Sato were
“co-general managers” (not explained on the record) of
the Peoria plant. Although their offices were in a differ-
ent building from the plant building where the production
and maintenance unit employees worked, they did spend
significant time on the plant floor with the unit employ-
ees. Kevin Tamura worked in a different building from
the plant building, but he sometimes walked through the
plant building to get to a cigarette smoking area. Jum
Koyama was an engineer whose office was in a different
building from the plant building; he did no work on the
plant floor. Rush Hiashy was on the cost reduction team
and Mike Nosihoia was the quality control/quality assur-
ance manager. Their offices were in a different building
from the plant building, and neither spent significant
time inside the plant.
The judge found that wearing the T-shirts was not a
protected concerted activity. My colleagues have not
affirmed that finding. Rather, for purposes of their ensu-
ing analysis finding special circumstances, they have
assumed, without deciding, that wearing the T-shirts was
protected activity under Section 7 of the Act. I will pro-
ceed from that same assumption in arguing against my
colleagues’ finding of special circumstances.
2. Applicable principles
In Bell-Atlantic-Pennsylvania, 339 NLRB 1084, 1086
(2003), enfd. 99 Fed. Appx. 233 (D.C. Cir. 2004), the
Board recently set forth principles that are applicable
here:

[E]mployees have a protected right under Section 7 of
the Act to make known their concerns and grievances
pertaining to the employment relation and, therefore, to
wear union insignia while at work. Republic Aviation
Corp. v. NLRB, 324 U.S. 793, 801–803 (1945). . . . On
the other hand, a Section 7 right may give way on oc-
casion when “special circumstances” override the Sec-
tion 7 interest and legitimize the regulation or prohibi-
tion of such apparel. Evergreen Nursing Home, 198
NLRB 775, 778–779 (1972). The Board has found spe-
cial circumstances justifying proscription of union in-
signia and apparel when their display may jeopardize
employee safety, damage machinery or products, exac-
erbate employee dissension, or unreasonably interfere
with a public image that the employer has established,
as part of its business plan, through appearance rules
for its employees. Nordstrom, Inc., 264 NLRB 698,
700 (1982).

Similarly, in NLRB v. Mead Corp., 73 F.3d 74, 79 (6th
Cir. 1996), enfg. Escanaba Paper Co., 314 NLRB 732
(1994), the court said:

In order to justify a restriction on employees’ exercise
of Section 7 rights, an employer must demonstrate the
existence of “special circumstances” which necessitate
the banning of such insignia in order to reduce em-
ployee dissension or distractions from work, maintain
employee safety and discipline, protect machinery or
products, or project a certain image to the public. Spe-
cial circumstances arise most often where employees
have significant contact with the public, where the slo-
gans at issue denigrate the employer’s product or busi-
ness, and where the slogans are patently offensive or
vulgar. Employers may also infringe upon employees’
Section 7 rights to the extent necessary to maintain dis-
cipline and order in the workplace. Finally, employers
have an interest, where applicable, in dress uniformity
where employees have extended contact with the pub-
lic. [Citations omitted.]

3. Application of principles
The record is absolutely devoid of any evidence that
wearing the T-shirts might jeopardize employee safety,
erode employee discipline, cause damage to machinery
or products, distract employees from work, exacerbate
employee dissension, or interfere with a public image
that the Respondent has established, as part of its busi-
ness plan, through appearance rules for its employees.
Indeed, as to the last two potential special circumstances,
the record does not show that there even was any em-
ployee dissension that the T-shirts might have exacer-
bated, or that the Respondent (which manufactures
43,000-cubic foot/300-ton capacity mining trucks) has
even established a public image, as part of a business
KOMATSU AMERICA CORP. 653
plan, through appearance rules for its employees. Indeed,
there is nothing in the collective-bargaining agreement
about employee appearance or apparel, and there is noth-
ing in the record about any extra-contractual rules cover-
ing employee appearance or apparel—other than, of
course, the allegedly unlawful September 9 memoran-
dum in question. Moreover, not only do the employees
not have significant contact with the public, they do not
have any contact with the public. The message on the T-
shirts does not denigrate the Respondent’s products or
business, nor is it patently offensive or vulgar. There are,
in sum, no special circumstances even remotely warrant-
ing the Respondent’s prohibition against wearing the T-
shirt. Indeed, the record shows that on Friday, September
6, the Respondent’s vice president, Aubry, at least im-
plicitly accepted Union President Kocher’s plan simply
to ask employees not to wear the T-shirt at work as long
as the Respondent and the Union were still engaged in
fruitful negotiations. And Kocher was in the process of
implementing that plan on the morning of Monday, Sep-
tember 9, and fulfilling his part of his “deal” with Aubry,
when the Respondent nevertheless distributed the memo-
randum to all employees prohibiting them from wearing
the T-shirt. There is no evidence that anyone wore the T-
shirt in the plant after September 9.
In his brief in support of exceptions to the judge’s rec-
ommended dismissal of this allegation, the General
Counsel argues forcefully that the Respondent has failed
to establish any special circumstances justifying its pro-
hibition against wearing the T-shirt. In its brief in answer
to the General Counsel’s exceptions, however, the Re-
spondent argues only that wearing the T-shirt was not
protected activity. The Respondent does not attempt to
counter the General Counsel’s argument that the Re-
spondent has not established special circumstances that
would justify the Respondent’s prohibition against wear-
ing the T-shirt even if it were protected activity.
Nevertheless, my colleagues have taken up the special
circumstances argument that the Respondent itself did
not make. They find that the special circumstance justify-
ing the Respondent’s prohibition against wearing the T-
shirts is that the T-shirt’s (1) reference to December 7,
1941 (and, implicitly, to the sneak attack on Pearl Harbor
by Japan on that date), and its (2) statement “History
Repeats,” in conjunction with its entreaty (3) “Negotiate
Not Intimidate,” were especially inflammatory in combi-
nation here, because the Respondent is owned by a Japa-
nese company and the T-shirt could disrupt what my
colleagues characterize as a harmonious employee-
management relationship. But disruption of employee-
management relationships is, wisely and not surprisingly,
not among the numerous special circumstances men-
tioned in the above-cited precedent that might justify a
restriction on the exercise of Section 7 rights. Moreover,
any such fear of disruption of the employee-management
relationship caused by employees wearing the T-shirt in
the plant is particularly belied here by the fact that the
Respondent’s vice president, Aubry, and Union President
Kocher were able quickly and amicably to come to an
agreement on September 6 about how the Union would
deal with this matter—an agreement, alas, that was ap-
parently jettisoned by local management on the very next
workday, while Kocher was attempting determinedly to
live up to his part of his “deal” with Aubry.
In finding special circumstances and dismissing this al-
legation, however, my colleagues rely on Noah’s New
York Bagels, Inc., 324 NLRB 266 (1997), and South-
western Bell Telephone Co., 200 NLRB 667 (1972).
Noah’s has no applicability to the issue under discussion
here. Specifically, Noah’s did not present an issue of
whether the employer’s prohibition against wearing the
“If it’s not Union, it’s not Kosher” T-shirt in question
was justified by special circumstances. Indeed, the judge
in Noah’s expressly noted that the General Counsel did
not contend that the employer’s policy against shirts
mocking the employer’s kosher products was unlawful.
The judge’s subsequent “find[ing]” that the employer
prohibition against the wearing of a T-shirt mocking the
employer’s kosher policy was not unlawful was therefore
gratuitous and, in any event, dictum.3 Moreover, the em-
ployee who was prohibited from wearing the mocking “If
it’s not Union, it’s not Kosher” T-shirt in Noah’s was a
product delivery driver who perforce had direct and fre-
quent contact with the employer’s customers. Thus, had
there been an issue in that case about special circum-
stances, the prohibition against the “If it’s not Union, it’s
not Kosher” T-shirt arguably could have been justified
on the grounds of the special circumstance that the em-
ployee had significant contact with the public and the
slogan at issue denigrated the employer’s product or
business. NLRB v. Mead Corp., supra. The production
and maintenance employees prohibited by the Respon-
dent from wearing the “December 7, 1941” T-shirts in
the instant case, on the other hand, have no contact with
the public, and the message on the T-shirts did not deni-
grate the Respondent’s product or its business.
It is difficult to discern the basis on which Southwest-
ern Bell Telephone was decided. The Board found either
that the “Ma Bell is a Cheap Mother” sweatshirts were
outside the scope of the Act’s protection, or that in any
event the employer was justified by special circum-

3 The only unfair labor practice issue facing the Board in that aspect
of Noah’s was whether the employer discriminatorily enforced a rule
against the wearing of union buttons. The Board found that violation.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 654
stances in prohibiting its employees from wearing them,
or some hybrid of both.4 Regardless, the sweatshirts in
Southwestern Bell expressly insulted the employer by
name (“Ma Bell is a Cheap Mother”), whereas the T-
shirts at issue here (“December 7, 1941; History Repeats;
Negotiate Not Intimidate”) neither name nor expressly
insult the Respondent.
On the basis of all of the above considerations, I dis-
agree with my colleagues’ finding that the Respondent’s
prohibition against the “December 7, 1941” T-shirts was
justified by special circumstances. I find that it was not.5

Deborah A. Fisher, Esq., for the General Counsel.
Roy G. Davis and Joshua A. Rodine, Esqs. (Davis & Campbell),
of Peoria, Illinois, for the Respondent.
Kevin Kocher, Local Lodge 158 President, for the Union.
DECISION
STATEMENT OF THE CASE
MARION C. LADWIG, Administrative Law Judge. These cases
were tried in Peoria, Illinois, on March 5 and 6, 2003. The
charges were filed by Local Lodge 158 (the Union) against
Komatsu American Corp.1 (the Company) in Case 33–CA–
14021 on July 9, 20022 (amended September 24), and in Case
33–CA–14088 on September 16 (amended November 25).
Complaints were issued on September 27 and December 6, and
the cases were consolidated for trial on December 6.
At its Peoria, Illinois plant, the Japanese-owned Company
builds large mining trucks, which measure up to 28 feet wide,
28 feet tall, and 55 feet long and can haul up to 300 tons, and
wheel loaders (large dump trucks), which pick up and dump the
loads into the mining trucks (Tr. 107–109, 235–236). The six
“divisions” in the plant are the components manufacturing area
(the machine shop), welding, assembly, shop clerk, transporta-
tion, and maintenance (Tr. 15, 20, 201–202).
The Union represents the production and maintenance em-
ployees (GC Exh. 2, art. 2, sec. 1, p. 2). The most recent collec-
tive-bargaining agreement, effective from August 28, 2000 to
September 7, 2003, contains a no-strike-no-lockout provision

4 In any event, as I said in my dissent in Honda of America Mfg.,
Inc., 334 NLRB 746, 750 fn. 2 (2001), I view Southwestern Bell as
poorly reasoned and something of an aberration in the corpus of Board
law. Most of the authority cited in Southwestern Bell consisted of court
of appeals cases denying enforcement to Board Orders. In fact, the
primary case cited (Caterpillar Tractor Co. v. NLRB, 230 F.2d 357 (7th
Cir. 1956) (upholding a ban on “Don’t be a scab” buttons)), is clearly
inconsistent with Board precedent and has been rejected by other
courts. See Escanaba Paper Co., 314 NLRB 732, 734 fn. 10 (1994),
enfd. sub nom. NLRB v. Mead Corp., 73 F.3d 74 (6th Cir. 1996), cited
above. Accordingly, I would overrule Southwestern Bell.
5 I would further find, if it were necessary for me to do so, that, con-
trary to the judge, wearing these T-shirts was protected activity.
1 The name Komatsu Mining Systems, Inc. in the Case 33–CA–
14021 charge was changed to the correct name Komatsu America Corp.
before issuance of the complaint and was formally amended at the trial
(Tr. 9–10, 23).
2 All dates are in 2002 unless otherwise indicated.
(GC Exh. 2, art. 4, p. 14) and provides for payment of a sever-
ance allowance to eligible employees when “the Company
determines that it will permanently close or discontinue the
manufacturing operation [emphasis added]” and terminates the
employees involved (GC Exh. 2, art. 19, pp. 108–109).
On Friday, January 25 (not Saturday the 26th, as discussed
later), General Manager-Peoria Manufacturing Operations
Kevin Casey, Human Resources Manager Pamela Slaby, and
Plant Superintendent Michael Guilfoy met with Union Presi-
dent Kevin Kocher and the union bargaining committee (Tr. 18,
31, 101, 200, 239–240). Casey read, and gave them, a docu-
ment dated January 25, entitled “Peoria Operations Restruc-
ture” (GC Exh. 3; Tr. 22, 241).
The document cited the Company’s loss of $40 million in
2000 and stated, in part:

To help ensure that someday we return to an acceptable
level of profitability will require a reduction in our fixed costs.
Approximately 75% of the Peoria Operations’ fixed costs are
wages and benefits and depreciation on assets (mostly ma-
chine tools). The components manufacturing area (axles, hy-
draulics, suspensions, spindle, hub and brake, general machin-
ing, etc.) represents our greatest investment in assets and sup-
port functions. These fixed costs are currently unacceptable.
We must find more economical ways to manage these ele-
ments of the business and will, therefore, commence an out-
sourcing project for the items produced in the components
area [“negatively” impacting some employees] and subse-
quently dispose of the machine tools. This project will be ac-
complished in two phases:

Phase I: Source axle assemblies for mechanical trucks and
wheel loaders from Komatsu Mooka plant in Ja-
pan.
Timing: By 3d Quarter 2002.

Phase II: Develop sources for hydraulic components, spin-
dle, hub and brake components, and general
machining.
Timing: By year-end 2003.

During the meeting that followed, Casey stated that the de-
cision had been made in Japan (by Komatsu Ltd., called Koma-
tsu Japan). When asked about its impact, Casey said that as far
as he knew, there was going to be up to five machines left at the
end of the phaseout, but he did not know how many personnel
would be left. (Tr. 23, 241, 266).
This was later confirmed by Plant Superintendent Guilfoy
who told employees in a meeting in May that “they would pos-
sibly keep between 10 and 15 machinists to run five machines,
which would be used to machine horse collars for the large
dump truck frames. The horse collars must be machined, after
they are welded, to make them square and prevent them from
twisting and turning, throwing the wheels off.” (Tr. 102, 111–
113, 197).
At the time of this January 25 announcement, there were 86
machine shop employees in a total of 342 employees in the
bargaining unit (R. Exh. 2; Tr. 151). Although the axle assem-
blies for mechanical trucks and wheel loaders were scheduled
to be transferred in phase I by the third quarter of 2002 to the
KOMATSU AMERICA CORP. 655
Japan plant where they were also being produced (Tr. 224–
225), they were transferred months earlier.
As discussed later, Casey advised the Union in a meeting
held on March 28 that business had gotten worse and that it
would be necessary to lay off additional plant employees (Tr.
33). Then in June—before the layoff of a large number of ma-
chine shop and other plant employees in a reduction in force
scheduled for July 1—the decision was made to immediately
transfer to the Komatsu Mooka plant in Japan the production of
all axles, except those for HD1500 trucks (Tr. 226; R. Exh. 1 p.
1; GC Exhs. 8(b), 16).
A machine shop headcount (R. Exh. 2) shows that by the end
of July, the number of machine shop employees was reduced by
18 from the January total of 86 to 68, and the number of all
bargaining unit employees was reduced 121 from the January
total of 342 to 221.
The evidence does not disclose how many of the 18 layoffs
of machine shop employees on July 1 resulted from the early
transfer of axle production to the Komatsu Mooka plant and
how many resulted from the downturn in business.
In Case 33–CA–14021, the primary issue is whether the
Company violated Section 8(a)(1) and (5) by failing and refus-
ing to bargain in good faith, in a meaningful manner and at a
meaningful time, regarding the effects of the January 25 an-
nounced decision to outsource machine shop work, before the
layoff of machine shop employees on July 1.
In Case 33–CA–14088, the primary issue is whether the
Japanese-owned Company violated Section 8(a)(1) by threaten-
ing to discipline employees if they wore the “December 7,
1941” T-shirts at work.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by the General Counsel and Company, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Company, a corporation, manufactures mining trucks at
its facility in Peoria, Illinois, where it annually receives goods
valued over $50,000 directly from outside the State. The Com-
pany admits and I find that it is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of the
Act and that the Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
CASE 33–CA–14021
A. Bargaining Regarding Effects of Outsourcing Decision
1. Requests to bargain on effects
On January 28, Union President Kocher sent General Man-
ager Casey a letter (GC Exh. 4) requesting the Company to
“meet and discuss severance, early retirement and or any other
special circumstances involved in the announced closing of the
Machine Shop and other various areas of the shop. We feel
there are many avenues to lessen the impact of the recent deci-
sion made by Komatsu Japan.” (Emphasis added.)
On February 5, Kocher sent Casey another letter (GC Exh.
15) requesting a meeting to discuss “any avenues to lessen the
impact of the recent decision made by Komatsu Japan to close
areas of the plant.” Kocher stated in the letter that “[we] have
questions from our members, your employees, that you may be
able to answer. The Union also has some suggestions to make
to the Company. We would like you to consider them as a one
time only possibility.”
The following day, February 6, Human Resources Manager
Slaby replied to both letters (GC Exh. 5), requesting (1) rele-
vant contract provisions “the Union believes prompts discus-
sion regarding severance,” (2) “What aspects” of “early retire-
ment does the Union want to discuss,” (3) “an understanding of
the Union’s thinking regarding ‘special circumstances,’” (4) a
“better understanding of the Union’s thought processes” regard-
ing the “many avenues to lessen the impact of the recent deci-
sion,” and (5) “the nature of the questions from the bargaining
unit members, referenced in your second letter.”
The next day, February 7, Kocher sent his reply directly to
Casey (GC Exh. 6(a)), first pointing out that “we currently have
a grievance . . . concerning our interpretation of the bargaining
agreement. That could be discussed at this meeting if you so
desired but I thought that it is better to let the grievance proce-
dure address that.” The grievance was still pending at the time
of trial (Tr. 145–146).
That grievance, dated January 25 (GC Exh. 20), states that
the “Union contends that the Company is violating Article
19 . . . of the current bargaining agreement.”
Article 19.1, section 1A, provides that “[w]hen the Company
determines that it will permanently close or discontinue the
manufacturing operation covered by this Agreement [emphasis
added]” and terminates the employees involved, employees
with 5 or more years of continuous service will be eligible for a
severance allowance. Section 1B provides that the service al-
lowance will be 40 hours for each year, not to exceed 20 years,
at the base wage rate in effect at the “time of closing or discon-
tinuance.” (GC Exh. 2, pp. 108–109).
The grievance also states: “Specifically, the Company has
permanently closed the Cut and Form manufacturing and re-
fuses to offer severance to the employees affected,” referring to
the Cut and Form work transferred from the Peoria plant to the
Company’s KOMEX plant in Mexico in June 2001 (following
the earlier transfer of some welding department work to
KOMEX in March 2000, before the 2000–2003 agreement was
signed) (Tr. 26, 147, 167; GC Exh. 2).
Kocher testified on cross-examination (Tr. 145) that the Un-
ion’s position is that the severance language in article 19 should
apply in situations like the machine shop, where there is “out-
sourcing and people lose their jobs,” whereas the Company’s
position, “given to us many times, and told to us by the officials
of the Company,” applies only “when the entire Peoria facility
is shut down” (Tr. 145).
I find that Kocher filed this grievance, about 7 months after
the June 2001 transfer of Cut and Form work, in response to
Casey’s announcement of Komatsu Japan’s outsourcing deci-
sion on January 25—not on January 26, the date that was sug-
gested to Kocher in a leading question on direct examination
(Tr. 18): “Directing your attention to January 26, 2000.” Later
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 656
at the trial, Slaby credibly recalled (Tr. 240) that Friday, Janu-
ary 25, was the date of the meeting in which Casey made the
announcement.
Also in Kocher’s February 7 letter to Casey (GC Exh. 6(a)),
in response to Slaby’s February 6 inquiry (GC Exh. 5), Kocher
stated that “we are looking for severance in some cases and
retirement in others, not both for any individual, that ‘We
would also like to discuss some type of point system for early
retirement without supplemental,’ and that these are considered
by us as ‘special circumstances’” (emphasis added).
Kocher testified that he attached to his February 7 letter, ex-
cerpts (GC Exh. 6(b)) from a memo of understanding in the
1985–1988 bargaining agreement, when there was a large 1985
reduction in the plant—“not what we were asking for” but as
“an example of what had been done in the past.” He testified
that he wanted Casey, Slaby, and Guilfoy to “familiarize them-
selves” with that “to give them some idea of why we were ask-
ing for what we were asking for” and “Not only in the machine
shop, but the people that have lost jobs in welding” (in March
2000) and in “cut and form” (referring to the January 25 griev-
ance). (Tr. 26, 140–144, 147.)
That 1985 memo of understanding, which was not included
in the current 2000–2003 agreement, was reached with the
Company’s predecessor, Dresser Industries, in which Komatsu
Japan was then only a partial owner. (Tr. 28, 143–144, 282–
283.)
On February 27, Kocher sent Slaby a letter (GC Exh. 7),
again requesting to discuss “severance” and stating: “I am re-
questing a meeting with yourself and Mr. Casey by March 13,
2002 or I will have no recourse than to prefer charges with the
NLRB.” No NLRB charge was filed at that time, apparently
because, as Slaby credibly testified (Tr. 240), “We arranged for
a meeting in early March, in order for us to get a better feel as
to what the Union might be looking for.”
2. Meetings on effects before July 1
a. The March 6 meeting
Slaby testified that Casey did not attend the scheduled March
6 meeting, because his mother became ill and he was called out
of town the prior afternoon. Casey told Slaby that she could get
Plant Superintendent Guilfoy to go with her to the meeting (Tr.
242).
Regarding the date of this first meeting, Kocher was asked
by counsel on direct examination, “Okay, directing your atten-
tion to April 2002 [emphasis added], did you meet with Pam
Slaby and Mike Guilfoy?” Kocher answered, “Yes, myself and
the Bargaining Committee met with them” (Tr. 31). He did not
give his personal recollection when the meeting was held. Ko-
cher did recall Slaby’s stating at the meeting that Casey wanted
to be there, but had to leave the night before because of a fam-
ily emergency (Tr. 32). I credit Slaby’s testimony that this
meeting was held on March 6, not in April.
When asked “what was said and by whom, at this meeting?”
Kocher answered that he believed Slaby started the meeting by
saying, “You asked for the meeting,” and “I stated that we had
asked for the meeting to discuss severance, retirement, early
retirement”—without giving any details about what was said
(Tr. 31–32).
The counsel then asked only one other question about the
meeting (Tr. 32):

Q. Did you discuss a specific letter that you had writ-
ten to the Company, at that meeting?
A. Yes, we discussed—excuse me, the letters that I
had written to Mr. Casey, asking for the severance, the
early retirement, and retirement.

On cross-examination, when asked specifically what he was
referring to in his January 28 letter to Casey (GC Exh. 4) and in
his 1985 memo of understanding attachment to his February 27
letter to Casey (GC Exh. 7), Kocher gave many details about
severance, early retirement, and retirement (Tr. 139–146).
These included the example of an individual age 52 with 28
years of service and the contractual 55/30 retirement policy (Tr.
140–141).
In the Company’s defense, Slaby testified what she remem-
bered was discussed at the March 6 meeting (241–243):

Q. Did the parties ever sit down to actually talk about
the effects of that decision on the bargaining unit?
A. We arranged for a meeting in early March, in order
for us to get a better feel as to what the Union might be
looking for.
. . . .
Q. Tell us what happened at that meeting?
A. . . . I did ask them if they wanted to go forward with
the meeting, or if they wanted to wait until Kevin Casey
was able to return, and they indicated that they would like
to go ahead.
Q. Okay.
A. And basically, we were trying to determine what it
is that they were looking for.
Q. Do you remember any of the discussions that went
on at that meeting?
A. Yes. I do believe that there was a reference to the
1985 agreement, which did involve some severance for in-
dividuals who lost work during that time period. They in-
dicated that they were looking for something along that
line, and . . . it took me a while to really get it out of them,
but . . . they had a concern about employees who might not
yet be at a point where they could get the 55/30 pension,
which is an unreduced early pension with a supplement to
age 62.
Q. Okay.
A. And, they brought up an example of a person who
might be age 53 and have only 27 or 28 years of service,
and they said that this was the sort of person that they
were concerned about. They didn’t have a specific idea.
Q. Any other parts of that meeting that you recall?
A. That was primarily it. Primarily we were looking to
determine what they were looking for, so that we could
look at the feasibility of it.

b. The March 28 meeting
At the next meeting with the Union on March 28, attended
by Casey, Slaby, and Labor Relations Specialist Donna Brooks
(Tr. 244), Casey made it clear that Komatsu Japan was exercis-
KOMATSU AMERICA CORP. 657
ing control over the Company’s Peoria plant. Referring to the
January 25 outsourcing announcement, as Kocher testified,
Casey stated that the decision had been made in Japan and that
“some people had almost lost their jobs fighting for us.” (Tr.
134.)

Q. What do you remember about that meeting?
A. Well, Kevin Casey . . . . indicated that he was there
to listen, and asked if they would go back over what it was
that they had essentially shared with the Company at the
meeting in early March.
Q. And did they?
A. Yes, they did.

Kocher testified that after “[w]e talked about the early re-
tirement, retirement, and severance, and I . . . asked him if there
was any way that we could lessen the effect on the personnel,”
Casey’s only answer was what he had already stated, that “it
was not something that he was happy about, but that it was
something that he had to do” (Tr. 33)—clearly indicating that
any requested noncontractual benefits required the approval of
Komatsu Japan.
Kocher also testified that after he related to Casey what he
had told Slaby and Guilfoy (at the March 6 meeting) about
early retirement, retirement, and severance, Casey stated he
would look into it, but at that time, “the Company’s position
was that there would be no severance offered.” Kocher asked if
there could be voluntary retirement for senior machine shop
employees so that junior employees could keep working, and
Casey answered that would be something for discussion be-
tween the Union and Slaby. (Tr. 32–35).
It was in this meeting that Casey advised Kocher and the
bargaining committee that business had gotten worse since the
January 25 outsourcing announcement and that it would be
necessary to lay off additional plant employees (Tr. 33).
After the March 28 meeting, Slaby went to the corporate
benefits office in Vernon Hills, Illinois, and asked the director
to have the corporate actuaries look into the cost of each of the
benefits the Union was seeking for machine shop employees to
be laid off, “so that we could put together a proposal that could
be approved by upper management” (Tr. 245, 249–250).
Slaby first submitted two or three different scenarios to pro-
vide employees an opportunity to grow into a 55/30 pension.
There were also other scenarios for various benefits. She re-
called first receiving back information from the actuaries in
mid-April, and that it was sometime in mid-May “before we
actually had any concept of what early retirement might cost,
and at that point, it became clear to us that . . . it was far too
much money.” (Tr. 245–250.)
Kocher testified he believed, from what Slaby explained to
him, that the actuaries were looking at the cost of severance,
early retirement, and retirement (Tr. 149).
c. Other meetings before July 1
On May 6, as Kocher testified, he met with Slaby and dis-
cussed the terms for a voluntary layoff, that would allow a sen-
ior person to accept such a layoff and draw unemployment
compensation, to keep a junior person with a young family
from being laid off, and provide that if “things would change,”
the senior person would be recalled. The Company agreed, but
would not apply it to machine shop employees. Kocher asked if
there was any change in the Company’s position on severance,
and Slaby said, “No, the actuaries were looking at it.” (Tr. 37–
38.)
About June 16, Kocher met with Plant Superintendent Guil-
foy and asked if machine shop employees could be included
with other employees in voluntary layoffs. Guilfoy said,
“[T]hey could not be, because it was basically going to be a
permanent reduction [of machine shop employees]. Those peo-
ple were going to lose their jobs.” (Tr. 41–42.)
On June 21, the Company advised the Union by letter (GC
Exh. 16) of the layoff of machine shop employees, as well as
other plant employees, on July 1. The letter listed 21 machine
shop employees, 3 of whom were later given a downgrade and
not laid off on that date (GC Exh. 8(b)), reducing the number to
18 layoffs in the machine shop. As found, the July 1 layoffs
reduced the number of machine shop employees from the Janu-
ary total of 86 to 68.
3. Bargaining after July 1
On July 8, after the layoffs, Kocher told Slaby (Tr. 45) that
the Union had asked, “I believe seven or eight times . . . for
severance, and that if the Company did not at least agree to sit
down and talk to us, I was going to have no choice but to file an
unfair labor practice.”
On July 9, Kocher filed the union charge in Case 33–CA–
14021 (GC Exh. 1(a)), alleging:

Since on or about February 2002, the above-named
Employer has failed and/or refused to meet and bargain
with the Union despite repeated written requests over the
phasing out of the Machine Shop. Since on or about July
1, 2002, the Employer has unilaterally implemented the
phase out of the Machine Shop. Such implementation con-
stitutes a Midterm Modification of the collective bargain-
ing and/or unilateral change. [Emphasis added.]

Thus, in this charge, the Union challenged the Company’s
unilateral decision (made in Japan) to outsource machine shop
jobs, without specifically alleging a failure or refusal to bargain
on the effects of the decision. The Union amended the charge
on September 24 (GC Exh. 1(d)) to allege that since January
28, the Company has “refused and/or failed to bargain in a
timely manner with the Union over the effects on the unit em-
ployees of the decision to phase out the machine shop.” Three
days later, on September, the complaint (GC Exh. 1(g), p. 3)
was issued, alleging that since January 28, the Company has
failed and refused to bargain in good faith “regarding the ef-
fects of the closing of the Machine Shop.”
On August 2, at a disciplinary meeting, Kocher asked Slaby
if the Company was going to offer severance to employees who
had been laid off and probably were not coming back. Slaby
said she would let me know. (Tr. 45–46.) Kocher followed up
this conversation with a letter to Slaby, dated August 8, and
explained his reasons for filing the July 9 charge. The letter
stated, in part (GC Exh. 9):

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 658
I am once again requesting the Company to discuss the
decision to close the Machine Shop and the impact on our
members. . . .[Emphasis added.]
I have had no choice other than to prefer charges with
the NLRB for lack of negotiating with us over the decision
to close the Machine Shop, severance and retirement.
[Emphasis added.]

By this time, Komatsu Japan had authorized the Company to
bargain on severance for the machine shop. Slaby recalled that
sometime in June, after receiving information on the cost of
various scenarios, the Peoria office had put together a proposal
based on straight severance and sent it to the corporate office
(in Vernon Hills), which had taken the proposal to the board of
directors in Tokyo sometime in mid-July, during the summer
shutdown of the plant. (Tr. 250.)
Slaby explained that the Company did not negotiate with the
Union about severance after the summer shutdown, because
“we were hearing about [Komatsu Japan’s further layoff plan,
which was announced on August 19, discussed below, and] we
were going to include those individuals in those discussions”
(Tr. 250–251).
That explained her reason for telling Kocher on August 2
that she would let him know if the Company was going to offer
a severance to employees who had been laid off.
Slaby’s statement also confirmed why, in the March 6 and 28
meetings—when the Union discussed proposed “avenues to
lessen the impact” of Komatsu Japan’s outsourcing decision
announced on January 25, “negatively” impacting some ma-
chine shop employees—the Company could not offer in effects
bargaining any of the requested severance, early retirement, and
retirement benefits the Union sought. The Company was not
then authorized by the owner, Komatsu Japan, to bargain about
undertaking such an expense.
On August 19, Casey met with Kocher and the union com-
mittee and gave and read to them a document, dated August 19
(GC Exh. 25; Tr. 46–47), informing them that “Komatsu has
completed an aggressive internal restructuring of its Japanese
manufacturing operations over the last two years” and was
converting the Peoria plant into a “Mother” plant. Casey ex-
plained that the Peoria plant “would stop being a manufacturing
and assembly plant, and simply go to being an assembly plant.”
(Tr. 46–488.)
Later that day, Kocher and Union Vice President Michael
Damm went to Slaby’s office and discussed whether there was
going to be any negotiations for severance or retirement. Slaby
said the Company wanted to meet with them and provided
some dates in September for the negotiations. They agreed on
dates. (Tr. 49–51.)
On September 4–5 and 11–13, the Company and Union en-
gaged in bargaining over the effects of eliminating machine
shop and other plant jobs, but no agreement was reached (Tr.
52, 161–166, 251). There is no allegation that the Company
failed to bargain in good faith at these meetings. The evidence
does not disclose what proposals were made in the negotiations.
Meanwhile on August 25, at a regular union meeting, Kocher
was “bombarded with questions from the membership about
what the Union was doing” about the August 19 elimination of
jobs. Members were “very vocal that they didn’t think that the
Union was doing a good job as far a representing them or ob-
jecting to the things that were going on.” Kocher told them that
Casey had said he didn’t have any choice in the matter. They
asked “Well, what can we do? What is our legal right to do?”
When two or three members suggested “Let’s strike!” Kocher
responded, “That is illegal. It is in our contract” (Tr. 55–56).
Thus, Union President Kocher admitted, in effect, that be-
cause of the no-strike provision in the 2000–2003 agreement
with the Company (GC Exh. 2, art. 4, p. 14), the Union had no
bargaining power to persuade the Company to agree to any of
the Union’s proposed severance, early retirement, or retirement
benefits.
B. Analysis and Concluding Findings
The General Counsel’s principal contention (in Br. at 1, 21–
25) is that the Company’s delay in effects bargaining from
January 28 to September 4 precluded bargaining “at a meaning-
ful time” before the July 1 layoff of machine shop employees.
In doing so, the General Counsel ignores the Board’s prece-
dent that effects bargaining “at a meaningful time” means that
there must be “timely notice” of an employer’s decision, giving
the union an opportunity to bargain when the union has “at least
a measure of bargaining power.” The General Counsel ignores
President Kocher’s admission, indicating that the Union had no
bargaining power to persuade the Company to agree to any of
the Union’s proposed severance, early retirement, or retirement
benefits.
The General Counsel (in Br at 20) first cites First National
Maintenance Corp. v. NLRB, 452 U.S. 666, 681–682 (1981), in
which the Supreme Court held that “bargaining over the effects
of a decision must be conducted in a meaningful manner and at
a meaningful time [emphasis added].”
The General Counsel then cites Metropolitan Teletronics,
279 NLRB 957, 959 (1986), enfd. mem. 819 F.2d 1130 (2d Cir.
1987), in which the Board held that the employer “failed to
provide timely notice, thus denying the [union] an opportunity
to bargain when [the union] retained at least a measure of bar-
gaining power [emphasis added].”
After citing these two controlling precedents, the General
Counsel cites clearly inapplicable Board decisions in cases in
which the employer’s untimely notice confronted the Union at
the bargaining table with a “fait accompli” (accomplished fact).
The General Counsel cites (in Br. at 20, 24–25) the Board’s
decision in Woodland Clinic, 331 NLRB 735, 737–738 (2000),
in which the employer did not respond to the union’s request
for effects bargaining until November 2, merely 3 days before
the employer on November 5 closed a department and laid off
or terminated two employees. The Board held, 331 NLRB at
738:

The [union’s] right to discuss with the [employer] how the
closure of the department impacts unit employees requires
that bargaining occur sufficiently before actual implementa-
tion so that the [union] is not confronted at the bargaining ta-
ble with a fait accompli. Williamette Tug & Barge Co., 300
NLRB 282, 283 (1990).

KOMATSU AMERICA CORP. 659
In Williamette Tug & Barge, 330 NLRB at 283, the Board
decided that, barring particularly unusual or emergency circum-
stances, the same-day notice of closing and termination of em-
ployees deprives the union’s right to discuss with the employer
how the impact of the sale on the employees can be ameliorated
and confronts the union at the bargaining table with a sale that
is a fait accompli.
Concerning this case, the General Counsel argues (in Br. at
23):

The Union retained some bargaining leverage [emphasis
added] prior to implementation on July 1, but once the Union
was presented with a fait accompli, the Union was “relegated
to the status of a supplicant, a position incompatible with the
purposes and policies of the Act.” Kajima Engineering &
Construction, 331 NLRB 1604, 1620 (2000).

I note that the General Counsel does not indicate what bar-
gaining leverage the Union had, or could have invoked, after
the January 25 notice of the outsourcing, in view of the no-
strike provision in the collective-bargaining agreement. The
Union was seeking severance, early retirement, or retirement
benefits for all machine shop employees who would be laid off
as a result of the announced outsourcing—not only those to be
laid off in phase I by October as a result of outsourcing certain
axle assemblies, nor the machine shop employees who were
actually laid off on July 1 because of the early outsourcing of
axle assemblies.
I also note that the General Counsel omits from the case cita-
tion the page number, 331 NLRB at 1613, where it is pointed
out that the respondent “conceded that it laid off the [six] em-
ployees and that it did so without giving prior notice” to the
union—the reason for the fait accompli finding (emphasis
added).
In sharp contrast, there clearly was no untimely notice in this
case, confronting the Union with a fait accompli.
As found, (1) the Company announced its outsourcing deci-
sion on January 25, long before the rescheduled phase I layoffs
on July 1, (2) in the March 6 and 28 meetings with the Com-
pany, the Union made its proposals for severance, early retire-
ment, and retirement benefits, (3) General Manager Casey noti-
fied the Union at the March 28 meeting that he would look into
the Union’s proposals, but at that time, “the Company’s posi-
tion was that there would be no severance offered,” (4) the
Company’s corporate actuaries were assigned to determining
the feasibility of various scenarios of the proposed benefits, (5)
the Union understood that the actuaries were looking at the cost
of its proposed severance, early retirement, and retirement for
the machine shop employees to be laid off, (6) the Company
advised the Union on June 16 that machine shop employees
could not be included with other plant employees in voluntary
layoffs, because their layoffs were going to be a permanent
reduction, and (7) on June 21, the Company notified the Union
by letter the names of machine shop employees who were to be
laid off on July 1.
The Union’s real complaint about the Company not engaging
in good-faith effects bargaining was that the Company, after
hearing its proposals, was unwilling to offer any of the sever-
ance, early retirement, and retirement benefits sought by the
Union.
Regarding whether the Company bargained over the effects
of the decision “in a meaningful manner” and “at a meaningful
time,” (a) it timely announced the decision to outsource ma-
chine shop work on January 25, long before the rescheduled
phase I layoffs on July 1, (b) it twice met in response to the
Union’s requests to bargain on effects of the decision, (c) Hu-
man Resources Manager Slaby, at the first meeting on March 6,
gave the Union the opportunity to fully explain its proposals for
severance, early retirement, and retirement benefits, (d) General
Manager Casey, at the second meeting on March 28, listened to
and responded to the Union’s proposed benefits, (e) Slaby met
with Union President Kocher on May 6, discussed the terms for
voluntary layoff of plant employees, but refused to apply the
resulting agreement to machine shop employees, and (f) Plant
Superintendent Guilfoy met with Kocher about June 16 and still
refused to apply the agreement for voluntary layoffs to machine
shop employees.
All of these meetings dealt with effects of the decision, an-
nounced on January 25, to outsource most of the machine shop
work, negatively impacting all of the machine shop employees,
except possibly between 10 or 15 machinists whom the Com-
pany planned at that time to retain.
After considering all the evidence and the controlling legal
precedents, I find that the Company did not unlawfully fail or
refuse to bargain on the impact of the outsourcing decision by
not meeting with the Union “at a meaningful time.” First Na-
tional Maintenance Corp., 452 U.S. at 681–682. The Company
began meeting with the Union regarding effects of the January
25 announced outsourcing decision on March 6 and 28, long
before the rescheduled Phase I layoffs on July 1.
In these meetings, the Union was not denied “an opportunity
to bargain when [it] retained at least a measure of bargaining
power [emphasis added].” Metropolitan Teletronics, 279
NLRB at 959. Because of the no-strike provision in the collec-
tive-bargaining agreement, the Union had no bargaining power,
not even a measure of bargaining power, to persuade the Com-
pany to agree to any of the Union’s proposed severance, early
retirement, or retirement benefits.
Furthermore, the General Counsel has not proved that the
Company failed or refused to bargain in good faith on the ef-
fects of the outsourcing decision at the two March meetings “in
a meaningful manner.” The Union detailed its proposals for
severance, early retirement, and retirement benefits at the
March 6 meeting to Human Resources Manager Slaby and
Plant Superintendent Guilfoy (in the emergency absence of
General Manager Casey). At the March 28 meeting, in which
the Union again detailed its proposals, Casey made it clear to
the Union that the owner, Komatsu Japan, was exercising con-
trol over the Peoria plant, meaning that its authorization was
required for granting the machine shop employees any noncon-
tractual benefits.
At the March 28 meeting, the Company promised to look
into the Union’s proposals, to determine their feasibility, for
deciding what benefit Komatsu Japan might authorize the
Company to offer the Union in the effects bargaining. Regard-
ing severance—in accordance with its longstanding position
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 660
that laid off employees were not eligible for a severance allow-
ance unless “the entire Peoria facility is shut down”—the Com-
pany advised the Union that at that time, no severance was
offered. After the meeting, as it informed the Union, the Com-
pany was fulfilling its promise to determine the feasibility of
severance and other proposed benefits, by having the corporate
actuaries look into their cost.
By June the actuaries had supplied enough information on
the cost of various proposed benefits, for the Peoria office to
decide on a feasible proposal based on straight severance, for
approval first by the corporate office. The corporate office ap-
proved the proposal.
But in the meantime, because of worsened business condi-
tions, the Company changed the timing of the first planned
layoffs, from sometime before October to July 1. It did not
receive authorization from Komatsu Japan to offer its proposal
on severance to the Union in the effects bargaining until later in
July, after the rescheduled July 1 layoffs, during the summer
shutdown.
I find that the Company was bargaining before July 1 in a
meaningful manner, to the limit of its authority, over the effects
of the decision to outsource machine shop work. I also find that
the Company did not fail or refuse to provide timely notice and
did not deny the Union an opportunity to bargain when the
Union retained at least a measure of bargaining power, in view
of the Union’s admission, indicating that it had no bargaining
power because of the contractual no-strike provision, to per-
suade the Company to agree to any of the Union’s proposals.
I therefore find that the Company did not violate Section
8(a)(1) and (5) by failing or refusing to bargain in good faith, in
a meaningful manner and at a meaningful time, regarding the
effects of the January 25 announced decision to outsource ma-
chine shop work, before the layoff of machine shop employees
on July 1.
Case 33–CA–14088
A. Threatened Discipline for Wearing “December 7, 1941”
T-Shirts
On September 6, Union President Kocher and other employ-
ees began wearing the “December 7, 1941” T-shirts at the
Japanese-owned plant (Tr. 59, 61, 63).
This was after (1) Komatsu Japan authorized the Company in
mid-July to bargain on severance for the machine shop, (2) the
Company announced at the August 19 meeting that Komatsu
Japan decided to engage in further outsourcing and convert the
Peoria plant into a “Mother” assembly plant, (3) the Company
and Union agreed later that day on dates in September to en-
gage in effects bargaining for both machine shop and other
plant employees, and (4) the union members decided in the
regular union meeting on August 25 to have the T-shirts
printed, when told that striking in protest of the Company’s
actions would be illegal because of the no-strike provision in
their agreement. The Company and Union engaged in effects
bargaining on September 4 and 5.
The T-shirts were solid black with “DECEMBER 7, 1941”
boldly printed with large white, black-trim lettering over a
white background, measuring 1-3/4 inches in height and
stretching 10 inches across the front of the shirts. On the back,
the words “HISTORY REPEATS” were printed, with the same
large lettering, followed by the words “NEGOTIATE NOT
INTIMIDATE” on three lines in smaller, all-white 1-inch let-
tering (GC Exh. 10).
Reaction at the Japanese-owned Company was immediate.
Upon Labor Relations Specialist Brooks’ hearing about the new
“December 7th, Pearl Harbor Attacks” T-shirts, she called the
union hall about 11:10 that morning and questioned President
Kocher about them (Tr. 62–64). Brooks notified Human Re-
sources Manager Slaby, who said that “December 7, 1941”
meant to her “The bombing of Pearl Harbor” (Tr. 260). Slaby,
in turn, notified Vice President of Human Resources Gary Au-
bry at the corporate office in Vernon Hills (Tr. 78, 261).
Later that afternoon, Aubry placed a conference call to Ko-
cher at his home, with Slaby on the line. After Kocher told
Aubry the exact wording on the T-shirts, Aubry referred to the
negotiations on the 2 days before, September 4 and 5, and
asked why they were doing this, stating that he felt that they
were making some good progress. (Tr. 78–79, 262.)
Regarding Aubry’s statement about the date December 7,
1941 being offensive, Kocher responded that although Franklin
Delano Roosevelt stated that date “will live in infamy,” the date
to us “simply meant that there had been a sneak attack on
America, and that is how the Union viewed it, that the Union
was being attacked by the Company, without any provocation”
(Tr. 84).
Aubry told Kocher that the Company’s position was going to
be that if somebody wore the T-shirt on Monday, September 9,
they would either be sent home or disciplined. Kocher re-
sponded that Aubry should check with his legal counsel, and
Aubry said he would call Kocher back in 30 or 45 minutes. (Tr.
81.)
When Aubry called back, Kocher told him that the whole
purpose of the T-shirts was “to get the Company to negotiate
and to stop what they had been doing,” and “As long as we are
in fruitful negotiations,” he would “ask the members not to
wear the T-shirts” (Tr. 82–83).
The following Monday, September 6, the Company prepared
a memo to all the Peoria employees, quoting the wording on the
front and back of the T-shirts and stating (GC Exh. 12):

The [“December 7, 1941” inscription] appearing on
the T-shirt constitutes unacceptable ethnic disparagement
of our Japanese co-workers. We have no interest in inter-
fering with anyone’s right to engage in protected, con-
certed activity. However, this particular inscription is of-
fensive and bears no relationship to legitimate employee
interests or working conditions. If you are wearing one of
these T-shirts, please change or turn it inside out. . . .
Anyone who refuses to cease displaying the offensive in-
scription will be subject to discipline.

When asked if she, as the human resources manager, consid-
ered the T-shirts to be offensive, Slaby testified yes, because
this was a Japanese-owned company and to a Japanese person,
“this can be something of sensitivity.” She named the Japanese
working at the plant. (Tr. 265–266, 268–272.)
Meanwhile, Brooks assured Kocher that the employees could
wear “Negotiate Not Intimidate” on T-shirts “all day long,” but
KOMATSU AMERICA CORP. 661
told him that the date “December 7, 1941” was very offensive
(Tr. 279–280).
B. Analysis and Concluding Findings
The General Counsel’s contends (in Br. at 34) that employ-
ees had a Section 7 right to wear the “December 7, 1941” T-
shirts, because the shirts were “not so offensive as to be unpro-
tected.”
The General Counsel primarily relies (in Br. at 31–34) on
Alaska Pulp Corp., 296 NLRB 1260, 1262, 1272–1273 (1989),
a decision in which the Board held that a member of a union’s
public relations committee engaged in protected concerted ac-
tivity in writing a letter, dated August 19, 1986, sent to the
management of Alaska Pulp Corp. (APC) in Japan and to vari-
ous newspapers, including the Sitka, Alaska newspaper.
The August 19 letter stated in part (296 NLRB at 1272):

APC [in Sitka] is a company controlled by the Indus-
trial Bank of Japan and other Japanese companies which
are in turn controlled by the government of Japan. . . .
“Beware of Japan. Her offer of friendship is but a Trojan
Horse that once taken in will open to plunder our vast re-
sources, leaving only a hollow shell to be cast aside when
no longer profitable.”

That letter, however, is not comparable to the “December 7,
1941” T-shirts that the Company prohibited the employees
from wearing at work.
As held in Alaska Pulp Corp. (296 NLRB at 1271, 1273), the
union committeeman wrote the August 19, 1986 letter during a
strike that began in July 1986 “to elicit community support for
the strike and also, apparently, to persuade responsible represen-
tatives or principals of [the employer] to ‘right the wrongs’ and
become more sympathetic toward the Union’s concerns.” Being
part of a strike situation “where the very livelihoods of individu-
als and the profitability” of the employer was being determined,
the August 19 letter was protected concerted activity.
In sharp contrast, the “December 7, 1941” date on the T-
shirts clearly refers to the Japanese bombing of Pearl Harbor,
over 60 years before, “at the start of World War II” and at the
cost of “tens of thousands” of lives (as pointed out in the Com-
pany’s Br. at 17).
As also pointed out in the Company’s September 9 memo to
all the Peoria employees, explaining the ban on the T-shirts, the
“December 7, 1941” inscription on the shirts “bears no rela-
tionship” to the 2002 working conditions, is “offensive,” and
“constitutes unacceptable ethnic disparagement of our Japanese
co-workers.”
The General Counsel cites no case remotely relevant to the
wearing of an offensive union button, insignia, or T-shirt that
concerns no current working conditions, but refers to something
in the remote past.
I find that because the offensive “December 7, 1941” in-
scription on the T-shirts refers to an occurrence over 60 years in
the past and bears no relationship to working conditions at the
plant, wearing the shirts was not a protected concerted activity.
I therefore agree with the Company that it did not violate Sec-
tion 8(a)(1) as charged.
CONCLUSIONS OF LAW
1. In Case 33–CA–14021, the Respondent did not violate
Section 8(a)(1) and (5) of the Act by failing and refusing to
bargain in good faith, in a meaningful manner and at a mean-
ingful time, regarding the effects of the January 25, 2002 an-
nounced decision to outsource machine shop work, before the
layoff of machine shop employees on July 1, 2002.
2. In Case 33–CA–14088, the Respondent did not violate
Section 8(a)(1) of the Act by threatening to discipline employ-
ees if they wore the “December 7, 1941” T-shirts at work.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended.3
ORDER
The complaints are dismissed.

3 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.