KSM Industries

National Labor Relations Board - Board Decisions

Sep 28, 2001

336 N.L.R.B. 133 (N.L.R.B. 2001)

KSM INDUSTRIES 133
KSM Industries, Inc. and United Paperworkers In-
ternational Union Local 7779, AFL–CIO–CLC.
Cases 30–CA–13762, 30–CA–14008, and 30–CA–
14101
September 28, 2001
DECISION AND ORDER
BY MEMBERS LIEBMAN, TRUESDALE, AND
WALSH
On April 30, 1998, Administrative Law Judge Bruce
D. Rosenstein issued the attached decision. The Respon-
dent filed exceptions and a supporting brief, and the
General Counsel and the Charging Party filed cross-
exceptions and supporting briefs. All parties filed an-
swering briefs, and the Respondent and the Charging
Party filed reply briefs.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the exceptions in light of the
record and briefs and has decided to affirm the judge’s
rulings, findings,1 and conclusions, as modified, and to
adopt the recommended Order, as modified and set forth
in full below.2
The complaint in this case alleges various violations of
Section 8(a)(1), (3), and (5) of the Act. The judge found
some of the alleged violations and dismissed others.
Thus, the judge found that the Respondent violated Sec-
tion 8(a)(1) by threatening striking employees with a loss
of jobs and closure of the facility because of their union
activities. He also found that the Respondent violated
Section 8(a)(5) by refusing to process a grievance and to
provide the Union with information it requested in con-
nection therewith. And he found that the Respondent
further violated Section 8(a)(5) by insisting on a provi-
sion that replacement workers hired during the strike
would not be displaced by returning strikers. Finally, he
found that the Respondent violated Section 8(a)(3) by
failing and refusing to reinstate the strikers upon their
unconditional offer to return to work. On the other hand,
he found that the Respondent did not violate the Act by
terminating striker Randy Schultz and by withdrawing its
wage offer after the strike. We adopt all of the foregoing
findings, with certain modifications and as further ex-
plained below. However, we reverse the judge’s addi-
tional finding that the Respondent did not violate the Act
by asking strikers what they were doing for a living.

1 Counsel for the General Counsel, the Respondent, and the Charg-
ing Party have excepted to some of the judge’s credibility findings.
The Board’s established policy is not to overrule an administrative law
judge’s credibility resolutions unless the clear preponderance of all the
relevant evidence convinces us that they are incorrect. Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir.
1951). We have carefully examined the record and find no basis for
reversing the findings.
2 We will modify the judge’s order to clarify the reinstatement rights
of strikers and to conform to our recent decision in Ferguson Electric
Co., 335 NLRB 142 (2001).
Alleged 8(a)(1) Statements
The record establishes that soon after the employees
commenced an economic strike on January 3, 1997, the
Respondent’s operations manager, Bill James, began
going out to the picket line to observe the strikers. James
taunted the strikers on numerous occasions, and the
judge found that he unlawfully threatened them with a
loss of jobs and plant closure when he told strikers vari-
ously that they would “never work in this kind of work
again,” “not get their jobs back,” “never see the inside of
the doors or the building no matter what,” “never return
to work,” and that they were “out” and “not getting back
in,” and “would not come back.” We agree with these
findings.
The judge, however, excused James’ telling strikers
“[t]hese people in here have jobs” and asking “[w]hat are
you doing for a livelihood?” The judge found that these
remarks were not threatening because, during the strike,
James passed along information to the strikers about
companies that were hiring and received inquiries from
other companies where strikers sought interim employ-
ment. We disagree.
The Board has long held that the standard to be used in
analyzing statements alleged to violate Section 8(a)(1) is
whether they have a reasonable tendency to coerce em-
ployees in the exercise of their Section 7 rights. Intent is
immaterial. Concepts & Designs, 318 NLRB 948, 954,
955 (1995); Puritech Industries, 246 NLRB 618, 622–
623 (1979). The Board considers the totality of circum-
stances in assessing the reasonable tendency of an am-
biguous statement or a veiled threat to coerce. Concepts
& Designs, supra.
Applying these principles here, it is plain that James’
comment and question were simply another way of tell-
ing the strikers they were out of a job. Against the back-
drop of other, more explicit threats by James to the strik-
ers, his rhetorical questioning had a reasonable tendency
to be coercive. Shen Automotive Dealership Group, 321
NLRB 586, 590 (1996) (veiled threat); Oster Specialty
Products, 315 NLRB 67, 71 (1994). Further, in the face
of repeated reminders that striking employees would
never see the inside of the Respondent’s facility or work
in the industry again, the coercive effect of James’ ques-
tion is not diminished or excused by an innocuous pur-
pose. Electronic Data Systems Corp., 305 NLRB 219,
237–238 (1991) (immaterial that supervisor may have
intended a friendly warning to employees); Puritech In-
336 NLRB No. 7
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 134
dustries, supra; Jacobs Packing Co., 187 NLRB 935
(1971).
That one employee testified that James conversed with
some strikers about outside employment does not erase
the reasonably threatening effect the comment had on
other employees. Indeed, if James were only interested
in the welfare of the striking employees, there was no
need to preface the question with a reference to replace-
ments having jobs.
In addition, the fact that it was James who was provid-
ing references to employers with whom the strikers were
seeking interim employment would seem to enhance,
rather than diminish, the coercive nature of his inquiry.
After all, James also told these employees that they
would “never work in this kind of work again,” a remark
which would indicate to a reasonable striker that James
might not provide the most glowing recommendation to a
prospective employer. In this context, his inquiry about
whether strikers had other jobs would have the reason-
able tendency to be all the more threatening.
For these reasons, we find that James’ rhetorical ques-
tioning violated Section 8(a)(1) of the Act.
The Discharge of Striker Randy Schultz
We agree with the judge’s finding that the Respondent
did not violate Section 8(a)(3) by terminating striker
Randy Schultz for assaulting James on the picket line.3
Because Schultz was the only striker to physically touch
a manager, we reject the Union’s argument that Schultz
was treated disparately. We also find distinguishable E.
I. du Pont & Co., 263 NLRB 159 (1982), cited by the
Union. In that case, the Board reinstated a striker who
was discharged for pushing a manager away in self-
defense. Here, although James unlawfully taunted em-
ployees with threats of job loss and plant closure, there is
no evidence of direct provocation by him.
Denial of Reinstatement Rights of Strikers
We also agree with the judge that the Respondent
unlawfully insisted on a proposal that returning strikers
would not displace replacement workers and then unlaw-
fully refused to reinstate the strikers upon their uncondi-
tional offer to return to work. In adopting the judge’s
findings, however, we find that the employees’ economic
strike which began on January 3, 1997, was converted to
an unfair labor practice strike on March 19 rather than

3 However, we disavow the judge’s analysis to the extent that it re-
lies on Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st
Cir. 1981); and Manno Electric, 321 NLRB 278 (1996). Those deci-
sions are not applicable to cases in which a striker is discharged for
alleged misconduct during a protected activity. See E. W. Grobbel &
Sons, 322 NLRB 304 (1996), citing NLRB v. Burnup & Sims, 379 U.S.
21 (1964).
March 12, 1997, as found by the judge. Contrary to the
judge’s finding, March 19 was the date of the Respon-
dent’s first unfair labor practice: the refusal to process a
grievance concerning the discharge of Schultz and to
provide the Union with related information that it re-
quested. Thus, it was from that date forward that the
strike was an unfair labor practice strike. As a result,
Respondent violated Section 8(a)(5) by maintaining its
proposal, on and after March 19, to make all of the re-
placements permanent. Additionally, the Respondent
violated Section 8(a)(3) by refusing to reinstate strikers
who had not been permanently replaced as of March 19.4
Unilateral Implementation of Health
Insurance Proposal
We agree with the judge that the Respondent violated
Section 8(a)(5) and (1) by unilaterally implementing its
medical and dental insurance proposal on April 11, 1997
(retroactive to April 1), after reaching impasse.5 We find
that the judge properly applied our decision in
McClatchy Newspapers, 321 NLRB 1386, 1388 (1996),
enfd. 131 F.3d 1026 (D.C. Cir. 1997). There, the Board
recognized a narrow exception to the implementation-
upon-impasse rules.
The employer in McClatchy had insisted to impasse
on, and subsequently implemented, a proposal reserving
sole discretion on merit wage increases, including the
timing, amount, and criteria for receiving them. In re-
viewing the employer’s proposal, the Board acknowl-
edged that wages are a mandatory subject of bargaining,
and that generally an employer may as a means of exert-
ing economic pressure unilaterally implement its propos-
als on mandatory subjects after impasse is reached.
However, citing Charles D. Bonanno Linen Service v.
NLRB, 454 U.S. 404, 412 (1982), the Board observed
that the employer’s exercise of its right to unilaterally
4 See Sunol Valley Golf & Recreation Co., 310 NLRB 357, 371
(1993) (“It is . . . settled law that where an economic strike is converted
to an unfair labor practice strike the economic strikers become unfair
labor practice strikers on the date of conversion. They are then entitled,
on their unconditional offer to return to work, to immediate reinstate-
ment unless they were permanently replaced prior to conversion. If
they were permanently replaced prior to conversion, the employer is
obligated to place them on a preferential hiring list and to reinstate
them before any other persons are hired or on the departure of their
preconversion replacements.”) We have modified the judge’s order to
more clearly set forth the Respondent’s reinstatement obligations with
respect to all the former strikers who requested reinstatement. See
Charles D. Bonanno Linen Service, 268 NLRB 552, 553–554 (1984),
enfd. 782 F.2d 7 (1st Cir. 1986).
5 The legality of the impasse is not in dispute. The medical and dental
insurance provisions were part of the Respondent’s Welfare Benefits
proposal. Although the Respondent notified the Union of its intent to
implement the Welfare Benefits proposal effective March 24, the medi-
cal and dental provisions did not become effective until April 1.
KSM INDUSTRIES 135
implement its prior proposals upon impasse did not mean
the termination of the bargaining process. The Board
concluded that the ongoing bargaining process would be
undermined if the employer was granted “carte blanche
authority over wage increases (without limitation as to
time, standards, criteria, or the [union’s] agreement).”
321 NLRB at 1390–1391. The Board found that the em-
ployer’s “ongoing ability to exercise its economic force
in setting wage increases and the [union’s] ongoing ex-
clusion from negotiating them would not only directly
impact on a key term and condition of employment and a
primary basis for negotiations, but it would simultane-
ously disparage the [union] by showing, despite its resis-
tance to the proposal, its incapacity to act as the employ-
ees’ representative in setting terms and conditions of
employment.” 321 NLRB at 1391. The Board con-
cluded that such a result was inherently destructive of the
fundamental principles of collective bargaining, and,
accordingly, that the employer’s exclusion of the union
from any meaningful bargaining as to the procedures and
criteria governing the merit pay plan violated Section
8(a)(5).
Here, we find that the Respondent’s health benefits
proposal is akin to the employer’s merit wage proposals
in McClatchy. From the outset of bargaining, the Re-
spondent proffered a proposal that reserved to it sole
discretion “[d]uring the term of this Agreement” to
“change the method and/or means for providing for the
medical/hospital and the dental benefits, which includes,
the plan design, the level of the benefits and the admini-
stration thereof, provided the change is applied on a
Company-wide basis, the change is first discussed with
the Union, and any deductibles and coinsurance limits
for the medical/hospital benefit will not exceed [specified
dollar amounts].” As in McClatchy, the Union objected
to the proposal, and upon impasse, the Respondent an-
nounced its intention to implement, and in fact did im-
plement, the proposal.
On its face, the proposal permits the Respondent to
unilaterally change the provider, plan design, the level of
benefits, and the administrator during the term of the
contract so long as the change is companywide. More-
over, although the proposal calls for discussions with the
Union about interim changes, Administrative Manager
Dave Oechsner acknowledged that the Respondent did
not intend to negotiate changes in the plan. He testified
that the Respondent would have the last word. Indeed,
on April 11, when the Respondent transmitted a list of
changes in health insurance benefits to the Union, includ-
ing increases in deductibles and out-of-pocket expenses,
the changes were presented as a fait accompli. The Re-
spondent admittedly did not even discuss these matters
with the Union beforehand.
Thus, like the merit pay proposal in McClatchy, the
Respondent’s health insurance proposal left no room for
bargaining between the Union and the Respondent about
the manner, method, and means of providing medical and
dental benefits during the term of the contract. As in
McClatchy, therefore, the proposal nullified the Union’s
authority to bargain over the existence and the terms of a
key term and condition of employment.6 Accordingly, as
in McClatchy, we find that the Respondent’s implemen-
tation of the proposal was inimical to the postimpasse,
on-going collective-bargaining process, and violated Sec-
tion 8(a)(5) of the Act.
ORDER
The National Labor Relations Board adopts the rec-
ommended order of the administrative law judge, as
modified and set forth in full below and orders that the
Respondent, KSM Industries, Inc., Germantown, Wis-
consin, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Threatening employees with the loss of jobs and
closure of the facility in retaliation for the employees’
union activities.
(b) Maintaining a proposal that replacement employees
will not be terminated or displaced by striking employ-
ees.
(c) Failing to accept and process a grievance.
(d) Failing to timely furnish the Union on request with
information that is necessary to the performance of the
Union’s statutory duties as the employees’ exclusive
collective-bargaining representative.
(e) Unilaterally implementing the health insurance
plan so as to undermine the status of the Union as the
employees’ exclusive collective-bargaining representa-
tive.
(f) Failing and refusing to immediately reinstate unfair
labor practice strikers to their former positions upon their
unconditional offer to return to work.

6 We find no principled reason to distinguish this case from
McClatchy on the basis that this case involves health insurance rather
than wages. Like wages, health insurance is a mandatory subject of
bargaining. See Wire Products Mfg. Corp., 329 NLRB 155 (1999); and
Dynatron/Bondo Corp., 323 NLRB 1263 (1997). Further, like wages,
it is considered an important term and condition of employment. See,
e.g., ABC Automotive Products Corp., 307 NLRB 248, 250 (1992),
supplemented 319 NLRB 874 (1995) (finding that employer’s an-
nouncement to striking employees of its intent to unilaterally institute
its own health and welfare plan to replace the union’s welfare fund
“damag[ed] the bargaining relationship . . . by the message to employ-
ees that the Respondent was taking it on itself to set this important term
and condition of employment, thereby ‘emphasizing to the employees
that there is no necessity for a collective bargaining agent).’” [Citation
omitted.]
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 136
(g) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain with the Union as the exclusive
representative of the employees in the following appro-
priate unit concerning terms and conditions of employ-
ment and, if an understanding is reached, embody the
understanding in a signed agreement:

All regular full-time and regular part-time production
and maintenance employees, warehouse employees,
shipping and receiving employees and stockroom em-
ployees, employed by the Respondent at its plant lo-
cated at N115 W 19025 Edison Drive, Germantown,
Wisconsin, and excluding the following: management
and sales employees, tape production employees, office
clerical employees, professional employees, confiden-
tial employees, guards and supervisors as defined in the
Act.

(b) Within 14 days from the date of this Order, upon
and pursuant to the Union’s application of October 5,
1997, on behalf of employees who participated in the
strike which began on January 3, 1997 (except Randy
Schultz), and who have not already been reinstated, offer
full reinstatement to all such employees to their former
positions or, if those positions no longer exist, to sub-
stantially equivalent positions, if available, without
prejudice to their seniority or other rights and privileges,
dismissing if necessary any persons hired as replace-
ments on or after March 19, 1997. Place the remaining
former strikers on a preferential hiring list in accordance
with their seniority or other nondiscriminatory practices
utilized by the Respondent and offer them employment
before any other persons are hired or on the departure of
any replacement hired before March 19, 1997.
(c) Make whole the employees referred to in paragraph
2(b) above for any loss of earnings they may have suf-
fered or may suffer by reason of the Respondent’s refusal
and failure to reinstate them, in the manner prescribed in
F. W. Woolworth Co., 90 NLRB 289 (1950), with inter-
est to be computed in accordance with New Horizons for
the Retarded, 283 NLRB 1173 (1987).
(d) On request of the Union, rescind the health insur-
ance plan made effective on April 1, 1997, and reinstate
the prior health insurance plan as to bargaining unit em-
ployees and make such employees whole for any losses
they may have suffered as a result of the plan change, as
provided in Kraft Plumbing & Heating, 252 NLRB 891
(1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981), with
interest.
(e) Preserve and, within 14 days of a request or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel re-
cords and reports, and all other records, including an
electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay due
under the terms of this Order.
(f) Within 14 days after service by the Region, post at
its facility in Germantown, Wisconsin, copies of the at-
tached notice marked “Appendix.”7 Copies of the notice,
on forms provided by the Regional Director for Region
30, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent and
maintained for 60 consecutive days in conspicuous
places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material. In the
event that, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facil-
ity involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the no-
tice to all current employees and former employees em-
ployed by the Respondent at any time since March 19,
1997.
(g) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to com-
ply.
(h) IT IS FURTHER ORDERED that the complaint is
dismissed insofar as it alleges violations of the Act not
specifically found.

MEMBER TRUESDALE, dissenting in part.
I agree with my colleagues in all aspects of their deci-
sion, except that, unlike them, I would adopt the judge’s
finding that Operations Manager Bill James did not vio-
late Section 8(a)(1) when he asked strikers what they
were doing for a living.
Striker Gordon Sabel testified that James commented,
“These people in here have jobs. What are you doing for
a livelihood.” Sabel testified that James made “quite a
few nasty remarks to all the picketers . . . like we needed
to hear that.” Striker Richard Kuhlenbeck testified that
“[t]here were times that [James] would ask some of the

7 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-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
KSM INDUSTRIES 137
people where or if they got a different job.” Kuhlenbeck
testified further that “most of the time people would not
want to speak with Bill James,” but that on occasion
there was [sic] some people that did say something.” He
indicated that these exchanges between James and the
strikers were part of a conversation.
The record reflects that James was contacted by other
companies when strikers applied for work elsewhere.
The judge credited James’ testimony that during the
strike he became aware of which companies were look-
ing for employees with certain job skills, and that he
would pass along this information to some of the pickets.
In these circumstances, the judge found that Sabel and
Kuhlenbeck’s testimony did not establish that James
made a threatening comment.
I agree with the judge. Although my colleagues and I
have found certain of James’ remarks on the picket line
to violate Section 8(a)(1) of the Act, James’ inquiry is
not of the same nature. It was related directly to James’
role as a reference for individuals seeking interim em-
ployment, and Kuhlenbeck’s own testimony indicates
that it was conversational not taunting. James’ comment
was a simple observation of the obvious fact that the
strikers were not working but the legal replacements
were working. James’ inquiry, “What are you doing for
a livelihood?” did not contain any promise of special
benefit or constitute threat of discharge. Coca Cola Bot-
tling Co. of Louisville, 166 NLRB 134, 135 (1967).
Thus, contrary to my colleagues, I find that it did not
have a reasonable tendency to coerce employees.
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 vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.

WE WILL NOT threaten you with the loss of jobs and
closure of the facility in retaliation for your union activi-
ties.
WE WILL NOT maintain a proposal that replacement
employees will not be terminated or displaced by striking
employees.
WE WILL NOT fail to accept and process a grievance.
WE WILL NOT fail to timely furnish the Union with
requested information that is necessary to the perform-
ance of the Union’s statutory duties as the employees’
exclusive collective-bargaining representative.
WE WILL NOT unilaterally implement the health in-
surance plan so as to undermine the status of the Union
as the employees’ exclusive collective-bargaining repre-
sentative.
WE WILL NOT fail and refuse to immediately rein-
state unfair labor practice strikers to their former posi-
tions upon their unconditional offer to return to work.
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.
WE WILL, on request, bargain with the Union as the
exclusive representative of the employees in the follow-
ing appropriate unit concerning terms and conditions of
employment and, if an understanding is reached, embody
the understanding in a signed agreement:

All regular full-time and regular part-time production
and maintenance employees, warehouse employees,
shipping and receiving employees and stockroom em-
ployees, employed by the Respondent at its plant lo-
cated at N115 W 19025 Edison Drive, Germantown,
Wisconsin, and excluding the following: management
and sales employees, tape production employees, office
clerical employees, professional employees, confiden-
tial employees, guards and supervisors as defined in the
Act.

WE WILL, within 14 days from the date of this Order,
upon and pursuant to the Union’s application of October
5, 1997, on behalf of employees who participated in the
strike which began on January 3, 1997 (except Randy
Schultz), and who have not already been reinstated, offer
full reinstatement to all such employees to their former
positions or, if those positions no longer exist, to
substantially equivalent positions, if available, without
prejudice to their seniority or other rights and privileges,
dismissing if necessary any persons hired as replace-
ments on or after March 19, 1997, and WE WILL place
the remaining former strikers on a preferential hiring list
in accordance with their seniority or other nondiscrimi-
natory practice utilized by us and offer them employment
before any other persons are hired or on the departure of
any replacement hired before March 19, 1997.
WE WILL make whole the employees referred to
above for any loss of earnings they may have suffered or
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 138
may suffer by reason of the Respondent’s refusal and
failure to reinstate them, all of which is to be done in the
manner set forth in the remedy section of the decision.
WE WILL, on request of the Union, rescind the health
insurance plan made effective on April 1, 1997, and rein-
state the prior health insurance plan.
WE WILL make the employees whole for any losses
they may have suffered as a result of our unilateral im-
plementation and change in our health insurance plan,
with interest.
KSM INDUSTRIES, INC.
Paul Bosanac, Esq., for the General Counsel.
Russ R. Muelle,r Esq., of Milwaukee, Wisconsin, for the Re-
spondent.
Marianne Goldstein Robbins, Esq., of Milwaukee, Wisconsin,
for the Charging Party.
DECISION
STATEMENT OF THE CASE
BRUCE D. ROSENSTEIN, Administrative Law Judge. This
case was tried in Milwaukee, Wisconsin, before me on January
12, 13, and 14, 1998, pursuant to a consolidated complaint and
notice of hearing (the complaint) issued by the Regional Direc-
tor for Region 30 of the National Labor Relations Board (the
Board) on December 29, 1997.1 The complaint, based upon
original and amended charges filed in Cases 30–CA–13762,
30–CA–14008, and 30–CA–14101 by United Paperworkers
International Union, Local 7779, AFL–CIO–CLC (the Charg-
ing Party or Union), alleges that KSM Industries, Inc. (the Re-
spondent or KSM), has engaged in certain violations of Section
8(a)(1), (3), and (5) of the National Labor Relations Act (the
Act). Respondent’s timely filed answer denies the commission
of any unfair labor practices.
Issues
The complaint alleges that the Respondent engaged in inde-
pendent violations of Section 8(a)(1) of the Act by threats to
close its business, threats to employees that they will not get
their jobs back and discouraging picketing employees from
utilizing the Board processes, engaged in violations of Section
8(a)(1) and (3) of the Act by discharging the leading union
adherent and failing and refusing to reinstate unfair labor prac-
tice strikers upon their unconditional offer to return to work,
and engaged in striking employees, refusing to process a griev-
ance and provide necessary and relevant information to the
Union, and withdrawing on November 6, a proposal to grant an
increase in wages in 1998 and 1999 by 35 cents each year.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by the General Counsel, the Charging Party, and the Respon-
dent, I make the following

1 All dates are in 1997 unless otherwise indicated.
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a corporation, with an office and a place of
business in Germantown, Wisconsin, is engaged in the business
of steel fabrication, where it annually purchased and received
goods and materials valued in excess of $50,000 directly from
suppliers located outside the State of Wisconsin. The Respon-
dent 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.
I. ALLEGED UNFAIR LABOR PRACTICES
A. Background
The Union has represented the respective employees of Re-
spondent in an appropriate unit2 as the exclusive collective-
bargaining representative since about 1977. This recognition
has been embodied in successive collective-bargaining agree-
ments, the most recent of which was effective from January 1,
1994, through December 31, 1996.
At all material times the pertinent KSM supervisors involved
in this case are Administrative Manager Dave Oechsner and
Operations Manager Bill James.
B. Bargaining in 1996
Negotiations for a successor agreement began on November
26, 1996, and on that date Oechsner presented an initial pro-
posal for a 1997 labor agreement to the Union (R. Exh. 20). In
part, proposal 14 included changes to the medical/hospital and
dental plan (health insurance plan) that was in effect at the Re-
spondent.3
The Respondent and the Union continued to discuss terms
for a successor agreement in a number of negotiating sessions
that took place in December 1996, but were unable to reach a
consensus by the expiration of the parties’ contract on Decem-
ber 31, 1996.
C. The Strike
On January 3, approximately 70 employees represented by
the Union and employed at Respondent’s facility, ceased work
concertedly and engaged in a strike. They carried picket signs
stating “UPIU Local 7779 on Strike” and regularly patrolled in
the morning and the evening at the Respondent’s Clinton Drive
and Edison Street locations. The General Counsel concedes that
2 All regular full-time and regular part-time production and mainte-
nance employees, warehouse employees, shipping and receiving em-
ployees and stockroom employees, employed by the Company at its
plant located at N115 W19025 Edison Drive, Germantown, Wisconsin,
and excluding the following: management and sales employees, tape
production employees, office clerical employees, professional employ-
ees, confidential employees, guards and supervisors as defined in the
Act.
3 Sec. 3(C) states: During the term of this Agreement and for cost
containment purposes, the Company may change the method and/or
means for providing for the medical/hospital and the dental benefits,
which includes, the plan design, the level of the benefits and the ad-
ministration thereof; provided, the change is applied on a Company-
wide basis and the change is first discussed with the Union.
KSM INDUSTRIES 139
the strike at its inception was an economic strike but asserts that
it was subsequently converted to an unfair labor practice strike
(this issue will be addressed later in the decision).
The Respondent made the decision to continue production
activities during the strike. For this purpose, temporary em-
ployees were initially hired from local employment services
and at the end of the first week, approximately 15 replacement
employees were on the payroll. During the course of the strike,
the Respondent hired additional temporary workers and a num-
ber of these temporary employees were offered and accepted
permanent positions at KSM.
During the first part of the strike, January 3 to mid-March
1997, there was heavy picketing in both the morning and after-
noon at the Clinton Drive and Edison Street locations. Addi-
tionally, a lot of violence took place including spitting at and
pounding on the cars of replacement employees as they entered
and exited the facility, throwing objects at cars, nails being
placed and stuck in the pavement, people being threatened, and
numerous racial slurs and vile language was uttered between
striking and replacement employees. To reduce the frequency
of these incidents, the Respondent organized a convoy of re-
placement employees’ cars to enter and exit the facility together
during the morning and afternoon shifts. Additionally, in the
second week of January 1997, James commenced going to the
picket line on a daily basis for the start of the morning and end
of the afternoon shift. Between mid-March and June 1997,
picketing continued in the same locations but at a reduced level
and the amount of violence declined substantially. From June
through October 5, the number of pickets dwindled and the
violence was concentrated to one individual.
On February 5, a fight took place among a number of strik-
ing and replacement employees. The Germantown police were
called and several of the replacement employees were issued
citations for assault and disorderly conduct.4 As a result of the
February 5 incident, the Respondent instituted two defensive
mechanisms. First, they installed in plain view, video surveil-
lance cameras to capture future incidents of picket line miscon-
duct and second, James began to carry a tape recorder with him
when he regularly went to the picket line. Additionally, on
February 7, the Respondent wrote a letter to the Union about
picket line and strike misconduct,5 and began to keep an inci-
dent log of striker misconduct (GC Exh. 18).
On the date of the subject hearing, none of the striking em-
ployees has been offered their job back at the Respondent.
D. Negotiations After the Strike
On January 16, the Respondent proffered the Union a “Final
Strike Settlement for Terms of a Renewed Labor Contract” that

4 Germantown police officers Thomas Schreihart and Jeffrey Schnell
credibly testified that they were called to the KSM facility on approxi-
mately 10 occasions during the course of the strike to monitor allega-
tions of strike misconduct and on a number of occasions issued cita-
tions to both strikers and replacement employees.
5 The letter stated: This is to advise, on behalf of KSM Industries,
Inc., that picket line and strike misconduct engaged in by striking em-
ployees jeopardizes their continued employment with the company.
Any decisions in this regard will be made at a time appropriate consid-
ering circumstances related thereto.
had to be ratified by January 19 (R. Exh. 21). Included in the
proposal is language that the Respondent may change the
method and/or means of providing for the employees medi-
cal/hospital and dental benefits. Additionally, the Respondent
included language in the proposal that employees will be paid a
signing bonus of $700 and increases in straight time rates of
pay will be made in 1998 and 1999 by 35 cents each year. The
Union rejected the proposal.
On March 12, the Respondent provided the Union a proposal
“For Terms of a Renewal Labor Contract and for Settlement of
the Strike.” Included in this proposal was the same language
regarding the employees medical/hospital and dental benefits
and increases in straight time rates of pay in 1998 and 1999 by
35 cents each year. The Respondent, however, withdrew the
$700 signing bonus. Also included for the first time among the
March 12 contract proposals was the provision that, “ Employ-
ees hired since the start of the strike, i.e., January 3, 1997, will
be afforded continued employment and will not be terminated
or displaced by employees who engaged in the strike, regard-
less of seniority.” This provision has remained unchanged in all
subsequent proposals given to the Union up to and including
the date of the hearing.
Additional negotiation sessions took place on July 17 and
August 25, followed by a series of meetings in September
1997. On September 8, the Union submitted a handwritten pro-
posal agreeing to the Respondent’s offer to increase rates of
pay in 1998 and 1999 by 35 cents each year and proposing for
the first time a $500 Christmas bonus (GC Exh. 14). Addition-
ally, the Union on September 22, submitted an offer to the Re-
spondent to accept its January 16 “Strike Settlement Proposal
and Renewal Labor Contract” with several noted exceptions (R.
Exh. 28). Respondent countered with a proposed agreement
dated September 23 to “End the Strike and Settlement Terms”
(R. Exhs. 27(a) and (b)). The Union rejected the September 23
proposal.
On October 5, by a hand delivered letter to Oechsner, the
Union agreed to terminate the strike and unconditionally of-
fered to return to work (GC Exh. 15).
By letter dated November 6, the Respondent notified the Un-
ion that it was withdrawing its proposal to increase straight
time rates of pay in 1998 and 1999 by 35 cents each year to be
replaced by a proposal to increase wages in an amount to be
negotiated effective the first day of the first full payroll period
in November 1998 (GC Exh. 16).
Since November 6, there has been no additional negotiation
sessions or exchange of proposals between the parties, and no
successor collective-bargaining agreement has been finalized.
E. Respondent’s Refusal to Process a Grievance
and Provide Information
By letter dated March 13, the Respondent by Oechsner, noti-
fied striker Randy Schultz that effective March 12, his em-
ployment was terminated for engaging in picket line miscon-
duct (this matter will be addressed later in the decision). On
March 18, the Union filed a grievance concerning the discharge
and on the same date, requested records of discipline including
picket line activity that has been given to replacement workers
during the strike. On March 19, Oechsner replied and stated in
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 140
pertinent part, “The grievance will not be accepted or proc-
essed, since there is currently no effective Grievance and Arbi-
tration procedure under which the grievance may be filed due
to the expiration of the labor Agreement by its terms on and
including December 31, 1996.” By letter dated March 24,
Oechsner requested the Union to explain why it needed the
information. On April 4, the Union replied and explained to the
Respondent that it needed the information to determine whether
there is just cause for the termination of Schultz, and whether
discipline has been applied to other employees in a disparate
fashion (GC Exh. 11). By letter dated April 8, Oechsner reiter-
ated that the Respondent will not accept or process the Schultz
grievance due to the expiration of the labor agreement and
therefore, will not respond to the request for information nor
meet with the Union in an attempt to discuss the grievance.
F. Implementation of the Health Insurance Plan
As discussed above, the Respondent on November 26, 1996,
offered among its contract proposals a health insurance provi-
sion that allowed KSM to have the final word during the term
of the agreement and to unilaterally implement changes to the
method and/or means for providing medical/hospital and dental
benefits, including the plan design, the level of the benefits, and
the administration thereof. By letter dated March 17, the Re-
spondent notified the Union that it was declaring impasse and
that it would take steps to implement the health insurance pro-
vision. On April 11, the Respondent notified the Union that the
health insurance plan was being implemented retroactive to
April 1 (GC Exh. 13).
G. Analysis
1. The 8(a)(1) violations
The General Counsel alleges in Case 30–CA–13762 that
about January 11 Respondent’s operations manager, Bill James,
threatened employees on the picket line that they will not get
their jobs back at KSM.
Roger Day, who was the union president in January 1997,
testified that James stated to a number of employees on the
picket line that, “probably you’ll never get another job except
for like in a convenience store.” He further testified that James
said, “that the pickets will never work in this kind of work
again, will not get our jobs back, would never see the inside of
the doors or the building no matter what, and the pickets would
never return to work.” James testified that employee and striker
Dave Schneiderman, about January 1997, asked him in the
presence of a number of pickets when the strike was going to
be settled. James replied “that maybe you better see if that
convenience store still has an opening” (before being hired by
James at KSM for the second time, Schneiderman had worked
as a night shift store manager in a convenience store). Em-
ployee Gordon Sabel, testified in response to the General
Counsel’s question of whether James said anything about
employees getting their jobs back, that he heard James say
things like, “you guys are out, you’re not getting back in.”
Striker Richard Kuhlenbeck testified that James said “that we
would not come back, that the ones that replaced us are their
permanent workers.”
The general test applied to determine whether employer
statements violate Section 8(a)(1) of the Act is “whether the
employer engaged in conduct which reasonably tends to inter-
fere with, restrain, or coerce employees in the free exercise of
rights under the Act.” NLRB v. Almet, Inc., 987 F.2d 445 (7th
Cir. 1993); Reeves Bros., 320 NLRB 1082 (1996).
I fully credit the testimony of Day, Sabel, and Kuhlenbeck
and conclude that James’ statements to the striking employees
constitute threats that interfere with Section 7 rights, and vio-
late Section 8(a)(1) of the Act. Great Dane Trailers, 293
NLRB 384, 389 (1989).
The General Counsel asserts that about January 24 James
harassed picketing employees about their search for and/or
about their interim employment.
Kuhlenbeck testified that James asked strikers on the picket
line where they were working, and if they got different jobs.
Sabel testified that James said, “These people in here have jobs.
What are you doing for a livelihood?” James testified that May
Steel sent a questionnaire to KSM about Roger Day who was
hired by May Steel in January 1997, and inadvertently attached
the back page of his employment application that showed Day
applied for a job in December 1996, prior to the commence-
ment of the strike on January 3. James credibly testified that
KSM collectively decided to telephone May Steel representa-
tives to determine whether they had a severance policy before
they would hire an individual since at the time of Day’s appli-
cation, he was still an employee, held the position of president
of the Union and the parties were still engaged in collective-
bargaining negotiations to reach a new labor agreement. Addi-
tional testimony by James concerning this issue indicates that in
the course of his job duties and during the strike, he became
aware of which companies were looking for employees with
certain job skills. He credibly testified that he would pass along
this information to some of the pickets. He also testified that he
was aware that KSM employees obtained employment at some
of the companies that he mentioned to the striking employees
while they both were on the picket line.
Under these circumstances, it cannot be established that the
testimony of Kuhlenbeck or Sabel contains threatening remarks
uttered by James or that James’ statements and actions violate
the Act. Therefore, I recommend that this portion of the com-
plaint be dismissed.
The General Counsel also alleges that about late April and
again during May 1997,James threatened employees on the
picket line that the KSM facility would shutdown or close.
Employees Roger Day and Richard Kuhlenbeck testified that
while they were on the picket line they heard James state in late
April and early May 1997 “that the doors are closing now and
KSM was going to close its doors so the employees did not
have to worry about it.”
James admitted that he told the striking employees that KSM
was going to close the doors or its doors at least on three or
four occasions but testified that it was in response to questions
of the pickets and the statements were not made beyond the
second week of February or after March 1997.
Contrary to James’ testimony that he did not state to striking
employees after March 1997 that the doors of KSM were clos-
ing, I find in agreement with the credible and independent tes-
KSM INDUSTRIES 141
timony of Day and Kuhlenbeck that the same statements James
admitted making in February and March 1997 were also made
in April and May 1997. Such statements went beyond lawful
predictions of the economic consequences of continued union
representation supported by objective facts. See NLRB v. Gissel
Packing Co., 395 U.S. 575, 618 (1969); and Rapid Armored
Truck Corp., 281 NLRB 371, 383 (1986).
Under these circumstances, I find that such statements made
by a responsible supervisor to striking employees, tends to
restrain and coerce employees engaged in protected activity in
violation of their Section 7 rights, and thereby violates Section
8(a)(1) of the Act.
Lastly, the General Counsel alleges that about July 3 James
discouraged picketing 25 employees from utilizing the Board
processes by announcing that all current charges had been lost.
Roger Day testified that James made a statement on the
picket line that he heard from the Board that the Union lost all
of the charges and the employees had nothing to worry about.
Day testified that he blew it off but immediately called the un-
ion attorney to check whether this was true.
James testified that numerous unfair labor practice charges
were filed by the Union and KSM had to wait for the Board to
announce the results of the investigation. On one occasion, and
in response to a question from one of the striking employees
concerning when the parties were going to get together and
negotiate, James replied “that if there were any hot button is-
sues with the Board, they would have been back to KSM pretty
fast.”
I find that even if James made the statement attributed to him
by Day, the Act has not been violated. In this regard, Day testi-
fied that he blew the statement off and also decided to check
with the union attorney concerning the veracity of the state-
ment. Moreover, the statement does not contain a threat and
only reports what James allegedly heard. Further, the formal
papers confirm that after July 3, both Day as union president
and the Union as a legal entity filed amended charges in Case
30–CA–13762, and the Union filed the charges in Cases 30–
CA–14008 and 30–CA–14101. Under these circumstances,
neither Day or the Union were discouraged from utilizing the
Board’s processes. Lastly, it is noted that on August 25, the
Board informed KSM that it found merit to the allegations in
Case 30–CA–13762, concerning the unilateral implementation
of the health insurance plan and the 8(a)(1) statements made by
James.
Accordingly, I recommend that this portion of the complaint
be dismissed.
2. The discharge of Randy Schultz
The General Counsel alleges that the Respondent discharged
Randy Schultz about March 14, because he joined, supported,
or assisted the Union and engaged in concerted activities. The
Respondent takes the position that Schultz was terminated ef-
fective March 12, because he physically assaulted and verbally
threatened a management official, was arrested for disorderly
conduct by the Germantown police and for having engaged in
other misconduct during the strike, such as pounding on cars of
KSM personnel and verbally threatening another management
representative.
The Respondent instituted two defensive mechanisms after a
February 5 fight that took place among replacement and strik-
ing employees. First, the Respondent installed surveillance
video cameras in plain view. Second, when James regularly
went to observe the picket line at the start of the morning and at
the end of the afternoon shift, he carried a small tape recorder
in his clothing.
Employee Ronald Byrdsong credibly testified that he was
initially hired as a temporary employee during the first week of
the strike and became a permanent employee on March 9. Dur-
ing the first several weeks of the strike, he was driven to and
from work by personnel of the temporary employment service.
During the morning shift, Byrdsong testified that pickets would
jump on top of the car, try to open the doorknobs, and con-
stantly would utter profanity at the replacement employees in
the employment service automobile. Specifically, Byrdsong
testified that in January 1997 Randy Schultz pulled on the rear
door of the employment service automobile, and in February
1997 when he started driving his own vehicle to work he ob-
served Schultz kicking his car and spitting in his window.
Byrdsong further testified that Schultz directed vile profanity
and racial slurs at him. During this same time period, the Re-
spondent commenced keeping an incident log of striker mis-
conduct (GC Exh. 18). That log lists six incidents of miscon-
duct undertaken by Schultz prior to his discharge on March 12,
including profanity, verbal threats, hitting the side of a manager
automobile, and pounding on replacement employees automo-
biles and hitting the driver side window of a manager’s vehicle.
On March 7, James taped a conversation with Schultz, which
was played during the course of the hearing (R. Exh. 16) and is
memorialized in a transcript (R. Exh. 15). The transcript and
the tape confirm that Schultz hit the windows of replacement
employees automobiles and used vile profanity at James and
the replacement employees.6 On March 12 James again tape
recorded a conversation that took place between him and
Schultz. The transcript indicates that James observed Schultz
slap the side of a replacement employee vehicle as it exited
Clinton Drive and that Schultz used some of the same vile lan-
guage as was uttered on March 7. Additionally, James credibly
testified and the surveillance camera video confirms, that
Schultz hit James on the left shoulder hard enough that it
knocked him off balance and his knees buckled (R. Exh. 14).
Shortly after Schultz hit James, the Germantown police were
summoned and James charged Schultz with assault. Officer
Thomas Schreihart, the investigating officer, credibly testified
and his report (R. Exh. 1) confirms that he listened to the audio
tape, observed the VHS tape, and then took Schultz into cus-
tody for disorderly conduct. Schreihart’s report specifically
references the profanity used by Schultz and the fact that the
VHS tape shows that Schultz is striking James on James’ left
shoulder and the force of the blow caused James to take a step
in order to gain his balance. Lastly, Schreihart testified that
when he was summoned to the KSM facility prior to March 12,
that Schultz was belligerent and was one of the bigger problems

6 Some of the language used by Schultz included: “I’m going to slap
your fucking face, you son-of-a-bitch,” “Fat fucking faggot,” and “You
stinking son-of-a-bitching faggot, sister fucking faggot.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 142
out there. He personally heard Schultz utter vulgarities to the
replacement employees. Likewise, Officer Jeffrey Schnell testi-
fied that he was the backup officer on March 12, and the
Schreihart report is an accurate description of what occurred on
that date. He also credibly testified that Schultz caused more
problems, on the 10 to 15 responses that he made to KSM dur-
ing the strike, than any other striker.
On March 12, Schultz told Officer Schreihart that he did not
strike James but merely tapped him on the shoulder in order to
get his attention. Schultz did tell Schreihart, however, that he
was upset and was yelling at James. During his testimony,
Schultz acknowledged that he probably directed profanity at
James on March 12, but denied that prior to March 12 he ever
banged on cars or used vile language. This representation is not
supported by the record evidence and I reject Schultz’ testi-
mony to this effect. Indeed, there is overwhelming evidence in
the record that Schultz engaged in repeated episodes of banging
on and spitting at cars and using vile and profane language
prior to March 12.
In Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899
(1st Cir. 1981), cert. denied 455 U.S. 989 (1982), the Board
announced the following causation test in all cases alleging
violations of Section 8(a)(3) or violations of Section 8(a)(1)
turning on employer motivation. First, the General Counsel
must make a prima facie showing sufficient to support the in-
ference that protected conduct was a “motivating factor’ in the
employer’s decision. On such a showing, the burden shifts to
the employer to demonstrate that the same action would have
taken place even in the absence of the protected conduct. The
United States Supreme Court approved and adopted the
Board’s Wright Line test in NLRB v. Transportation Manage-
ment Corp., 462 U.S. 393, 399–403 (1993). In Manno Electric,
321 NLRB 278 fn. 12 (1996), the Board restated the test as
follows. The General Counsel has the burden to persuade that
antiunion sentiment was a substantial or motivating factor in
the challenged employer decision. The burden of persuasion
then shifts to the employer to prove its affirmative defense that
it would have taken the same action even if the employee had
not engaged in protected activity.
For the following reasons, I find that the General Counsel
has not made a strong showing that the Respondent was moti-
vated by antiunion consideration in discharging Schultz. Even
if this was not the case, I find that the Respondent would have
taken the same action even if the employee had engaged in
protected activity.
In Clear Pine Mouldings, 268 NLRB 1044 (1984), enfd. 765
F.2d 148 (9th Cir. 1985), cert. denied 474 U.S. 1105 (1986), the
Board held that strike misconduct is disqualifying if, under all
the circumstances, it reasonably tends to coerce or intimidate
other employees. Here, there is compelling evidence that
Schultz, prior to March 12, engaged in strike misconduct in-
cluding pounding on and spitting at vehicles, uttering vile pro-
fanity and racial slurs and on the date of his discharge contin-
ued to engage in the same type of conduct while committing a
physical assault upon James for which he was arrested for dis-
orderly conduct. As the Board held in Clear Pine Mouldings,
conduct such as kicking, slapping, and throwing beer cans at
moving vehicles is intimidating enough in and of itself without
being accompanied by additional threats or a “threatening or
violent demeanor.” In the subject case, not only do we have
kicking, slapping, and spitting, but the evidence is conclusive
that Schultz engaged in a physical assault on a management
representative and participated in repeated episodes of vile
language and vulgarities directed at managers and replacement
employees.
Under these circumstances, it raises to the level of violent
conduct which may reasonably tend to coerce or intimidate
employees in the exercise of their rights protected under the
Act.
Accordingly, I conclude that Schultz was terminated for en-
gaging in strike misconduct and was not terminated for engag-
ing in protected concerted activities. Therefore, he is not enti-
tled to reinstatement, and I recommend that the allegations in
the complaint alleging that the Respondent violated Section
8(a)(1) and (3) of the Act when it discharged Schultz on March
12, be dismissed.
3. The March 12, 1997 contract proposal
The General Counsel alleges in complaint Case 30–CA–
4008 that the Respondent’s provision among its contract pro-
posals on March 12 that states, “Employees hired since the start
of the strike, i.e., January 3, 1997, will be afforded continued
employment and will not be terminated or displaced by em-
ployees who engaged in the strike, regardless of seniority,” and
its continued maintenance of said provision in subsequent con-
tract proposals, is a failure and refusal to bargain in good faith
in violation of Section 8(a)(1) and (5) of the Act.
Because the law prohibits the permanent replacement of un-
fair labor practice strikers and the removal of replacement em-
ployees, if necessary, and the above provision does not ade-
quately address or explain that issue, I find that the Respon-
dent's continued reliance on the provision violates the Act.
Storer Communications, 294 NLRB 1056, 1093 (1989); Con-
solidation Coal Co., 266 NLRB 670, 672 (1983).
Accordingly, since the Respondent has maintained the provi-
sion described above at all material times since March 12, it has
violated Section 8(a)(1) and (5) of the Act.
4. The refusal to process a grievance and
provide information
The General Counsel alleges in complaint Case 30–CA–
3762 that the Respondent refused to accept or process griev-
ances that arose after the parties' collective-bargaining agree-
ment expired and refused to provide necessary and relevant
information to the Union.
By letter dated March 13, the Respondent by Oechsner, noti-
fied striker Randy Schultz that effective March 12, his em-
ployment was terminated for engaging in picket line miscon-
duct. On March 18, the Union filed a grievance concerning the
discharge and on the same date, requested records of discipline
including picket line activity that has been given to replacement
workers during the strike. On March 19, Oechsner replied and
stated in pertinent part, “The grievance will not be accepted or
processed, since there is currently no effective Grievance and
Arbitration procedure under which the grievance may be filed
due to the expiration of the labor Agreement by its terms on
KSM INDUSTRIES 143
and including December 31, 1996.” By letter dated March 24,
Oechsner requested the Union to explain why it needed the
information. On April 4, the Union replied and explained to the
Respondent that it needed the information to determine whether
there is just cause for the termination of Schultz and whether
discipline has been applied to other employees in a disparate
fashion (GC Exh. 11). By letter dated April 8, Oechsner reiter-
ated that the Respondent will not accept or process the Schultz
grievance due to the expiration of the labor agreement and
therefore, will not respond to the request for information nor
meet with the Union in an attempt to discuss the grievance.
As a general rule, parties to a collective-bargaining relation-
ship have a continuing statutory obligation to adhere to estab-
lished grievance procedures even after the expiration of a con-
tract. Bethelem Steel Co., 136 NLRB 1500 (1962), enfd. in
pertinent part 320 F.2d 615 (3d Cir. 1963); Indiana & Michigan
Electric Co., 284 NLRB 53, 54–55 (1987). In certain limited
circumstances, however, the pendency of unfair labor practice
charges may present a defense to a refusal to bargain about
grievances involving the same allegations made in those
charges. Airport Aviation Services, 292 NLRB 823, 830 (1989).
Unlike the situation in that case, there were no unfair labor
practice charges pending when the Respondent rejected the
grievance and refused to provide information. It was not until
April 9, that the Union filed a charge in Case 30–CA–13762
which alleged, inter alia, that the Respondent refused to process
the Schultz grievance and provide necessary information.
With respect to the request for information, I find that the
Union’s April 4 explanation to the Respondent that it needed
the records of discipline given to replacement workers during
the strike to determine whether KSM has applied discipline in a
disparate fashion, to be a legitimate and proper request. Page
Litho, Inc., 311 NLRB 881, 891 (1993).
Under these circumstances, I conclude that by refusing to
process the Schultz grievance and to provide relevant and nec-
essary information to the Union, Respondent violated Section
8(a)(1) and (5) of the Act.7 Genstar Stone Products, 317
NLRB 1293, 1300 (1995).
5. Implementation of the health insurance plan
The General Counsel alleges in complaint Case 30–CA–
13762 that the Respondent’s unilateral implementation of its
health insurance plan on April 1, violates Section 8(a)(1) and
(5) of the Act. The Respondent, on November 26, 1996, offered
among its contract proposals a health insurance provision that
allowed KSM to have the final word during the term of the
agreement and to unilaterally implement changes to the method
and/or means for providing medical/hospital and dental bene-
fits, including the plan design, the level of the benefits and the

7 Although the Respondent argues that it accepted and processed the
Union’s vacation pay grievance in October 1997, and therefore did
process grievances under the expired collective-bargaining agreement, I
find that such an argument is misplaced (R. Exhs. 22, 23, and 24). In
that situation, although the grievance was filed in October 1997, it
alleged a refusal to pay vacation pay for the period of 1996, a time
when the parties’ 1994–1996 collective-bargaining agreement was in
full force and effect. Here, the Respondent steadfastly refused to meet
and process the March 18 grievance concerning the Schultz discharge.
administration thereof. By letter dated March 17, the Respon-
dent notified the Union that it was declaring impasse and that it
would take steps to implement the health insurance provision.
On April 11, the Respondent notified the Union that the health
insurance plan was being implemented retroactive to April 1
(GC Exh. 13).
The General Counsel does not dispute that KSM was free to
insist to impasse on the health insurance plan which allowed it
the discretion to change the plan at will, but asserts that KSM
was not privileged to proceed with implementing the health
plan retroactive to April 1.
Although the Board has not addressed the precise issue pre-
sented here (postimpasse implementation of a health insurance
plan), it has considered a similar matter and found an employer
committed an unfair labor practice by unilaterally implement-
ing a discretionary merit pay proposal, even though the em-
ployer had bargained to impasse over the proposal with the
union. McClatchy Newspapers, 299 NLRB 1045 (1990), enfd.
denied 964 F. 2d 1153 (D.C. Cir. 1992). On remand, the Board
again found a violation, but on a different theory. McClatchy
Newspapers, 321 NLRB 1386 (1996) (McClatchy II), enfd. 131
F.3d 1026 (D.C. Cir. 1997).
The General Counsel argued in the first McClatchy case that
because the Employer had a statutory obligation to bargain over
“wages, hours, and terms of employment,” granting individual
raises without consulting the union violated the Act. The Em-
ployer, as does KSM in the subject case, maintained that it had
satisfied that duty by bargaining to impasse. Once it had ex-
hausted the bargaining process by reaching impasse, the Em-
ployer asserted, it was privileged to implement its “last best,
and final offer” over the union’s objection. Relying on its deci-
sion in Colorado-Ute Electric Assn., 295 NLRB 607 (1989),
enfd. denied 939 F.2d 1392 (10th Cir. 1991), the Board rejected
the Employer’s defense. In the Board’s view, an employer who
proposes unlimited management discretion over wages is really
proposing that the union waive its statutory right to be con-
sulted about wage changes. Therefore, the unilateral granting of
merit increases, without obtaining the union’s consent and bar-
gaining in good faith, is an unfair labor practice.
On remand from the D.C. Circuit, the Board in McClatchy II,
fashioned an exception to the implementation after impasse
doctrine. It grounded its new “narrow exception” on the impact
that implementation would have on the collective-bargaining
process:

Were we to allow the Respondent here to implement its
merit, wage increase and thereafter to expect to resume
negotiations for a new collective-bargaining agreement, it
is apparent that dun g the subsequent negotiations the
Guild would be unable to bargain knowledgeably and thus
have any impact on the present determination of unit em-
ployee wage rates. The Guild also would be unable to ex-
plain to its represented employees how any intervening
changes in wages were formulated, given the Respon-
dent’s retention of discretion over all aspects of these in-
creases.

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 144
It is noted that neither the Supreme Court nor the Board has
ever held that the statute mandates such a rule permitting
postimpasse implementation. The Board has held, however,
that exceptions to the postimpasse rule have been recognized
for proposals on dues checkoff, union security, arbitration, and
strikes.
Turning to the subject case, the health insurance provision
allows KSM to have the final word during the term of the
agreement and to unilaterally implement changes to the method
and/or means for providing medical/hospital and dental bene-
fits, including the plan design, the level of the benefits and the
administration thereof (the Respondent’s final modifications to
the health insurance plan involve increase costs to employees).
I find this provision precludes the Union from engaging in any
meaningful bargaining, notwithstanding the proviso that KSM
would first discuss proposed changes with the Union, since
KSM by its terms could unilaterally implement any such
changes if no agreement is reached. This was confirmed by
Dave Oechsner, who admitted that the term “discuss” is not the
same as “negotiate,” and KSM could implement changes to the
health insurance plan after exhaustive discussions without ob-
taining the consent of the Union. See also Loral Defense Sys-
tems-Akron, 320 NLRB 755 (1996), wherein the Board dis-
cusses the unilateral implementation and change in health care
plans.
It is apparent that the Board has determined that wages are
typically of paramount importance in collective bargaining and
are expected to be set bilaterally. I am of the opinion that health
insurance benefits today are of no less importance in the collec-
tive-bargaining process and must be set bilaterally in a collec-
tive-bargaining relationship. The subject matter of health insur-
ance and the unfettered discretion retained by KSM, its reserva-
tion of the right not only to unilaterally implement changes to
the method and/or means for providing medical/hospital and
dental benefits but also to set the plan design, the level of bene-
fits, and the plan’s administration, without objective criteria, all
set this case apart, as the Board found in regard to merit pay
raises, from the vast majority of cases in which the employer
seeks to implement proposals upon impasse.
Under these circumstances, and in agreement with the Gen-
eral Counsel that the unilateral implementation of the health
insurance plan precluded the Union from engaging in any
meaningful bargaining, I conclude that the Respondent has
failed and refused to bargain in good faith with the Union in
violation of Section 8(a)(1) and (5) of the Act.
6. Withdrawal of the wage increases
The General Counsel in complaint Case 30–CA–14101 al-
leges that Respondent’s unilateral withdrawal, on November 6,
of its proposal to increase wages in 1998 and 1999 by 35 cents
each year was undertaken to avoid reaching agreement with the
Union and constituted unlawful regressive bargaining in viola-
tion of Section 8(a)(1) and (5) of the Act.
There is no dispute that on March 12, Respondent offered
among its contract proposals to increase wages in 1998 and
1999 by 35 cents each year. During that negotiation session, the
Respondent informed the Union that they believed their job
system classification rates were on the high side, were uncom-
petitive and they did not want to add further wage increases for
1997 on top of that. Accordingly, that was the reason the Re-
spondent proposed a $700 signing bonus in its January 16,
strike settlement proposal, which was thereafter withdrawn on
March 12, due to the Union’s rejection of the proposal. Like-
wise, there is no dispute that the Respondent’s proposal to in-
crease wages in 1998 and 1999 by 35 cents each year remained
in all subsequent proposals given to the Union up to November
6. On that date, the Respondent sent a letter to the Union with-
drawing the proposal to increase wages and substituted a pro-
posal to negotiate wages with the Union in 1998.
The General Counsel argues that the timing of this proposal,
approximately 1 month after the Union unconditionally offered
to return to work, was undertaken in bad faith to avoid reaching
an agreement with the Union and constituted unlawful regres-
sive bargaining.
The evidence discloses that the parties continued to negoti-
ate, admittedly less frequently, up to September 23, when the
Respondent proposed an agreement to terminate the strike and
settle the underlying matter. This proposal was rejected by the
Union.
On September 8, the Union submitted a handwritten proposal
to the Respondent which provided for no wage increase in
1997, but contained wage increases in 1998 and 1999 of 35
cents each year. Also included in this proposal was a Christmas
bonus of $500. Thereafter, on September 22, the Union submit-
ted a second handwritten proposal which in part included the
same provisions regarding wage increases and the Christmas
bonus. Thereafter, the Union made an unconditional offer to
return to work on October 5.
The General Counsel opines that the November 6 withdrawal
of the wage increases for 1998 and 1999 of 35 cents each year
was undertaken in bad faith and to avoid reaching agreement
with the Union. However, it did not introduce any substantive
evidence to support these assertions. I am not inclined to accept
this argument for a number of reasons. First, it is noted that the
Union was apprised on March 12 that their job system classifi-
cation rates were on the high side and that is why the signing
bonus was initially proposed on January 16, rather then a wage
increase for 1997. Second, it is noted that the parties continued
to engage in wage negotiations on September 8 and 22, with the
Union proposing a Christmas bonus for the first time. Third, on
November 6, the Respondent offered to continue to negotiate in
order to reach an agreement to increase wages in an amount
effective the first day of the first payroll period in November
1998, and explained that further increases needed to be re-
strained due to job classification rates of pay being on the high
side. Lastly, the Board stated in Eltec Corp., 286 NLRB 890
(1987), that if an employer’s economic power increases through
the successful weathering of a strike, it is not unlawful for the
employer to use its new-found strength to secure contract terms
that it deems beneficial.
Under these circumstances, I find that the Respondent en-
gaged in nothing more then hard bargaining and was privileged
to withdraw its wage proposal on November 6, just as the Un-
ion was free to add the Christmas bonus proposal during the
September 8 negotiations. Further, it is noted that on November
KSM INDUSTRIES 145
6, the Respondent agreed to negotiate about this issue and other
outstanding proposals that existed between the parties.
Accordingly, I recommend that the allegations in the com-
plaint alleging that the Respondent withdrew its wage proposals
on November 6, in bad faith and to avoid reaching an agree-
ment in violation of Section 8(a)(1) and (5) of the Act, be dis-
missed.
7. The strike
A strike which is motivated or prolonged, even in part, by an
Employer’s unfair labor practices is an unfair labor practice
strike. C-Line Express, 292 NLRB 638 (1989); Tall Pines Inn,
268 NLRB 1392, 1411 (1984). In the subject case, on March
12, Respondent offered among its contract proposals the provi-
sion that, “Employees hired since the start of the strike, i.e.,
January 3, 1997, will be afforded continued employment and
will not be terminated or displaced by employees who engaged
in the strike, regardless of seniority.” Respondent has main-
tained this proposal at all material times throughout negotia-
tions, and therefore violated Section 8(a) (1) and (5) of the Act.
On March 18, the Union submitted a grievance to Respon-
dent concerning the Schultz discharge. By letters dated March
19 and April 8, the Respondent refused to accept or process the
grievance. On March 18, the Union requested Respondent to
furnish it with records of discipline that were given to replace-
ment workers during the strike. By letter dated March 24, the
Respondent refused to furnish the requested information.
Shortly after the receipt of the Respondent’s letters refusing to
process the grievance and provide information, the Union
changed it picket signs to read, “Local 7779-Unfair Labor Prac-
tices, Failure to Process Grievances.” As I previously found,
the refusal to process the Schultz grievance and provide infor-
mation violated Section 8(a)(1) and (5) of the Act.
On April 1, the Respondent again violated Section 8(a)(1)
and (5) of the Act when it unilaterally implemented the health
insurance plan without obtaining the consent of the Union.
Accordingly, I find that while the subject strike initially
commenced on January 3 as an economic strike, the unfair
labor practices committed by Respondent in March and April
1997, converted the strike to an unfair labor practice strike.8 I
also find that the failure to process the Schultz grievance and
timely furnish information about discipline of replacement
strikers in addition to the unilateral implementation of the
health insurance plan on April 1, contributed to the prolonga-
tion of the strike.
8. The failure to reinstate unfair labor practice strikers
As unfair labor practice strikers, Respondent’s striking em-
ployees were entitled to immediate reinstatement upon their
unconditional application. Laidlaw Corp., 171 NLRB 1366,
1368 (1968), enfd. 414 F.2d 99 (7th Cir. 1969), cert. denied 397
U.S. 920 (1970). This is so even if so-called permanent re-
placements have been hired to fill their jobs and must be termi-
nated to make room for them.

8 Since the Respondent’s first unfair labor practice was committed
on March 12, by maintaining its proposal regarding the reinstatement
rights of striking employees, I will use that date for the conversion of
the strike to an unfair labor practice strike.
I find that the Union’s letter of October 5, was an uncondi-
tional offer to return to work immediately. Accordingly, I find
that by failing to reinstate the striking employees, except
Schultz, upon the Union’s October 5 unconditional offer to
return to work, Respondent has violated Section 8(a)(1) and (3)
of the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. By offering and continuing to maintain a proposal that re-
placement employees will not be terminated or displaced by
striking employees, by its failure to accept and process a griev-
ance or to timely furnish the Union the information it requested,
and by unilaterally implementing its health insurance plan, the
Respondent has engaged in unfair labor practices within the
meaning of Section 8(a)(1) and (5) of the Act.
4. The strike that began on January 3, 1997, was converted
to an unfair labor practice strike on March 12, 1997.
5. By threatening employees with the loss of jobs and by
telling them the doors were closing, the Respondent violated
Section 8(a)(1) of the Act.
6. By failing and refusing to immediately reinstate unfair la-
bor strikers to their former positions upon their unconditional
offer to return to work, Respondent has violated Section 8(a)(1)
and (3) of the Act.
7. All other allegations have not been substantiated.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to
effectuate the policies of the Act. Having found that the Re-
spondent unlawfully failed and refused to reinstate the unfair
labor practice strikers upon their unconditional offer to return to
work, I shall recommend that the Respondent be required to
reinstate them, except Randy Schultz, immediately to their
former positions or, if those positions no longer exist, to sub-
stantially equivalent positions, without prejudice to their senior-
ity or any other rights or privileges previously enjoyed, to all
strikers whose jobs were not filled by permanent replacements
on or before March 12, 1997, dismissing if necessary any per-
sons hired after that date, and make the strikers whole for any
loss of earnings and other benefits suffered as a result of the
Respondent’s refusal to reinstate them from the date of their
offer to return to work. Backpay is to be computed in the man-
ner prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950),
with interest to be computed in accordance with New Horizons
for the Retarded, 283 NLRB 1173 (1987).
[Recommended Order omitted from publication.]