Lamonts Apparel

National Labor Relations Board - Board Decisions

Apr 28, 1995

317 N.L.R.B. 286 (N.L.R.B. 1995)

286
317 NLRB No. 48
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Case 19–RC–12435, not reported in bound volumes.
Lamonts Apparel, Inc. and United Food & Com-
mercial Workers, Local 1439, chartered by
United Food and Commercial Workers Inter-
national Union, AFL–CIO, CLC. Case 19–CA–
21967
April 28, 1995
DECISION AND ORDER
BY MEMBERS STEPHENS, BROWNING, AND COHEN
On a charge filed on March 6, 1992, and amended
by the United Food and Commercial Workers, Inter-
national Union, AFL–CIO, CLC on November 8,
1993, the General Counsel of the National Labor Rela-
tions Board issued a complaint on May 10, 1993, and
amended on November 19, 1993, and January 24,
1994, against Lamonts Apparel, Inc., the Respondent,
alleging that the Respondent violated Section 8(a)(1)
and (5) when it discontinued giving bargaining unit
employees their annual wage increase while the Union
was the putative winner of a National Labor Relations
Board election, without prior notice to the Union and
without affording the Union an opportunity to bargain
with the Respondent. The amended complaint further
alleged that the Respondent violated Section 8(a)(1) by
telling employees that a 1991 cost adjustment increase
would not be granted because the employees were then
represented by the Union, and by telling an employee
that the reason there was no cost adjustment increase
was because the employees had chosen to be rep-
resented by the Union. The Respondent filed a timely
answer admitting in part and denying in part the alle-
gations in the complaint.
On February 14, 1994, the General Counsel, the Re-
spondent, and the Charging Party filed with the Board
a stipulation of facts and motion to transfer the case
to the Board. The parties stated that the stipulation and
attached exhibits contained all relevant facts and evi-
dence necessary for a decision in the case and that
they waived a hearing before and decision by an ad-
ministrative law judge. On August 23, 1994, the Board
approved the stipulation and transferred the proceeding
to the Board for issuance of a decision and order. The
General Counsel and the Respondent filed briefs.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
On the entire record and the briefs, the Board makes
the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a Delaware corporation, has an of-
fice and place of business in East Wenatchee, Wash-
ington, where it is engaged in the business of retail
sales of apparel and related items. During the 12
months preceding the issuance of the complaint, the
Respondent, in the course and conduct of its business
operations, sold and shipped goods or provided serv-
ices from its facilities within the State of Washington,
to customers outside the State, or provided services to
customers within the State of Washington, which cus-
tomers were themselves engaged in interstate com-
merce by other than indirect means, of a total value in
excess of $50,000. During the past 12 months, the Re-
spondent had gross sales of goods and services valued
in excess of $500,000.
We find that the Respondent is an employer engaged
in commerce within the meaning of Section 2(6) and
(7) of the Act.
The General Counsel alleged, the Respondent ad-
mits, and we find that the United Food & Commercial
Workers, Local 1439, chartered by the United Food
and Commercial Workers International Union, AFL–
CIO, CLC is a labor organization with the meaning of
Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Facts
The Respondent is engaged in the retail sale of ap-
parel and related items, with stores in Alaska, Idaho,
Montana, Oregon, Utah, and Washington. Following
an October 9, 1991 secret-ballot election, the Board,
on November 20, 1991,1 certified the Union as rep-
resentative of all of the Respondent’s employees at its
East Wenatchee, Washington store, excluding store
manager, operations manager, area sales manager, ex-
ecutive manager trainee, guards, and supervisors as de-
fined by the Act.
Since at least 1978, the Respondent has conducted
an annual wage and benefit survey, known as the mar-
ket survey. Data is collected beginning about January
or February and is complete by about July or August
of that year. The Market Survey is a compilation of
the wages and benefits of the Respondent’s competi-
tors in each particular market area. The Respondent’s
vice president of human resources and other manage-
ment personnel analyze the data and make a rec-
ommendation to the executive vice president of wheth-
er cost adjustment increases will be made to employ-
ees’ salaries and how much the adjustments will be.
After reviewing the market survey and recommenda-
tion, the executive vice president makes a final deter-
mination and the results are announced to employees.
Although the Respondent compiled and analyzed the
1991 data for East Wenatchee, there was no rec-
ommendation for a wage increase for East Wenatchee
employees. However, in keeping with past practice,
cost adjustment increases for the Respondent’s em-
ployees in Alaska, Idaho, Montana, Oregon, Utah, and
287LAMONTS APPAREL
2 From 1978 through 1983, cost adjustment increases in the hourly
wage were granted pursuant to the market survey for each given
year. In subsequent years the amounts were as follows: 1984, 15
cents; 1985, 15 cents; 1986, 20 cents; 1987, 15 cents; 1988, 15
cents; 1989, 20 cents; 1990, 20 cents.
Washington were announced in October 1991 by the
executive vice president, excluding the Respondent’s
East Wenatchee employees. There were only two other
exceptions to the routine 1991 cost adjustment in-
creases: Seattle, Washington, where wage increases
were covered under an existing collective-bargaining
agreement; and Missoula, Montana, where, based upon
the market survey, increases had been deemed not war-
ranted.
Since at least 1978, the Respondent’s East Wena-
tchee employees had received a cost adjustment in-
crease each year. The amounts ranged from 15 to 20
cents per hour annually since 1984.2 In October 1991,
soon after the employees had voted in the Union, Store
Manager Keri Farnes, an admitted statutory supervisor,
announced to the East Wenatchee employees that there
would be no 1991 cost adjustment increase because
they were now represented by the Union and their
wages were subject to collective bargaining. At this
time, the Respondent’s objection to the election was
pending and it had not begun collective bargaining.
The Respondent did not notify the Union of its plan
not to give the East Wenatchee employees the cost ad-
justment increase. Through its store manager, it con-
firmed to East Wenatchee employees that the Respond-
ent’s other employees were getting cost adjustment in-
creases for 1991. Those adjustments were implemented
on October 27, 1991. The increases ranged from 10 to
30 cents per hour.
The Respondent and the Union first met for contract
negotiations on January 8, 1992. The Union presented
a full contract proposal including a $1.50-an-hour
wage increase, retroactive to October 1, 1991, the date
that it contended the cost adjustment increases should
have gone into effect. On January 21, the Respondent
presented a nonretroactive wage increase proposal of
10 cents. The Union, on February 6, proposed a 30-
cent increase, retroactive to October 1, 1991, to be fol-
lowed by a 70-cent increase beginning February 1,
1992. During this negotiation session, in response to
an employee’s comment that they had not received the
1991 cost adjustment increase, Vice President of
Human Resources Mary Ryan, an admitted statutory
supervisor, stated that there was no cost adjustment in-
crease because East Wenatchee employees had selected
a collective-bargaining representative. On February 13,
the Respondent made a final offer, including a non-
retroactive 20-cent wage increase. The Union rejected
the offer on February 20. Thereafter, on March 1,
1992, the Respondent unilaterally implemented its last
offer. Despite two additional bargaining sessions with
a Federal mediator, the parties have failed to reach an
agreement.
The Respondent admits that the cost adjustment in-
crease relates to wages, hours, and other terms and
conditions of employment and is a mandatory subject
of bargaining.
B. The Parties’ Contentions
The General Counsel contends that the Respondent
had a long-established practice of annually surveying
market data and granting cost adjustment increases if
the data supported an increase. The employees in the
East Wenatchee store had received a cost adjustment
increase for at least the last 13 years and had an ex-
pectation that they would continue to do so at least
until the parties reached an initial collective-bargaining
agreement to establish wages. Citing the Board’s initial
opinion in Daily News of Los Angeles, 304 NLRB 511
(1991), remanded 979 F.2d 1571 (D.C. Cir. 1992), the
General Counsel maintains that this practice was suffi-
ciently established to have become a term and condi-
tion of employment. According to the General Coun-
sel, the Respondent violated Section 8(a)(5) when it
unilaterally changed its policy without giving the
Union, the putative winner of the election, notice and
opportunity to bargain over the proposed change until
agreement or impasse.
The General Counsel further contends that on two
separate occasions, by announcing to its East
Wenatchee employees that the reason they were not
given cost adjustment increases was that they voted to
be represented by the Union, the Respondent violated
Section 8(a)(1) of the Act.
The Respondent contends that it could not grant a
wage increase because it was obligated to bargain with
the Union over what were clearly discretionary wage
increases. Relying on Anaconda Ericsson Inc., 261
NLRB 831 (1982), the Respondent argues that the tim-
ing and amounts of wage increases were discretionary
and that an employer is not compelled to grant discre-
tionary wage increases when it is involved in negotia-
tions with a union. In this case, it argues, it began con-
ducting its wage survey in the summer of 1991 and be-
fore any increase could be decided upon, the employ-
ees had selected the Union as their bargaining rep-
resentative.
The Respondent urges the Board on remand to ‘‘cor-
rect’’ its holding in Daily News of Los Angeles, supra.
There, it argues, the Board failed to discern the dif-
ference between a discretionary increase and a fixed
automatic increase and thus failed to follow precedent
in finding that the employer violated Section 8(a)(5)
and (1) of the Act by discontinuing a discretionary
wage increase program.
Finally, the Respondent contends that given the to-
tally discretionary nature of the wage adjustments,
288 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Daily News of Los Angeles, supra, opinion after remand. The vio-
lation in this case would exist under either of the views expressed
in Daily News.
4 Regarding unilateral changes made while election objections are
pending, see, e.g., L & M Ambulance Corp., 312 NLRB 1153, 1156
(1993); Millard Processing Services, 310 NLRB 421, 425 (1993).
5 In Daily News, supra, we overruled Anaconda to the extent that
the decision addressed the unilateral discontinuance of merit in-
creases. We therefore reject the Respondent’s argument to the extent
it relies on Anaconda. (See also in this regard fn. 3 in Members Ste-
phens’ and Cohen’s concurring opinion in Daily News.)
6 We reject the Respondent’s contention that it is impossible to
fashion a remedy because there is no fixed yardstick governing the
amount of any wage increase. As set forth, we direct the Respondent
to rely, as it has in the past, on its own market survey to provide
the necessary yardstick.
there is no ‘‘benchmark’’ against which to fashion a
remedy governing the amount of any wage increase.
Analysis and Conclusions
In Daily News of Los Angeles, 315 NLRB 1236
(1994), we recently reaffirmed the proposition that an
employer that has a practice of granting merit raises
that are fixed as to timing but discretionary as to
amount may not discontinue that practice without bar-
gaining to agreement or impasse with the union.3 As
we stated in Daily News, supra at 1237:
The cases make it crystal clear that the vice in-
volved in both the unlawful increase situation and
the unlawful refusal to increase situation is that
the employer has changed the existing conditions
of employment. It is this change which is prohib-
ited and which forms the basis of the unfair labor
practice charge. [Citing NLRB v. Dothan Eagle,
434 F.2d 93, 98 (1970).]
Here, we find that the Respondent had a long-estab-
lished practice of annually surveying and granting ap-
propriate cost adjustments based on the survey data.
Over a period of 13 years, employees in the Respond-
ent’s East Wenatchee store had received this increase
based on the results of its market survey. Indeed, on
October 27, 1991, the Respondent implemented wage
increases in 19 of its 22 areas. The Respondent’s past
practice was sufficiently well established to have be-
come a term and condition of employment. Neverthe-
less, at the time when the Union was the putative win-
ner of the representation election, the Respondent
failed to make a recommendation regarding a wage in-
crease based on the data it compiled in its market sur-
vey, and this departure from past practice was made
without notifying the Union and giving it an oppor-
tunity to bargain.4
Accordingly, for the reasons stated in Daily News,5
supra, we find that the Respondent’s discontinuance of
its customary wage adjustments in October without no-
tice to the Union or opportunity to bargain to agree-
ment or impasse violated Section 8(a)(5) and (1) of the
Act. Further, because the unilateral change in past
practice violated the Act, the Respondent’s statement
to employees in October 1991 and during January
1992 negotiations that there would be no annual cost
adjustment increase because employees had chosen a
collective-bargaining representative violated Section
8(a)(1) of the Act. Harrison Ready Mix Concrete Co.,
316 NLRB No. 53, slip op. at 1–2 (Feb. 7, 1995);
LRM Packaging, 308 NLRB 829, 833 (1992).
CONCLUSIONS OF LAW
1. Lamonts Apparel, Inc. is an employer engaged in
commerce within the meaning of Section 2(6) and (7)
of the Act.
2. United Food & Commercial Workers, Local 1439,
chartered by United Food and Commercial Workers
International Union, AFL–CIO, CLC is a labor organi-
zation within the meaning of Section 2(5) of the Act.
3. The appropriate collective-bargaining unit is:
All employees of the Employer at the 511 Valley
Mall Parkway, East Wenatchee, Washington loca-
tion; excluding store manager, operations man-
ager, area sales manager, executive manager train-
ee, guards and supervisors as defined in the Act.
4. At all times since October 9, 1991, the above-
named labor organization has been the exclusive bar-
gaining representative of Respondent’s employees in
the appropriate unit for the purposes of collective bar-
gaining by virtue of Section 9(a) of the Act.
5. By unilaterally changing its past practice of rec-
ommending cost adjustments for employees based on
data compiled in its market survey and giving an an-
nual wage increase without giving the Union a mean-
ingful opportunity to bargain, the Respondent has vio-
lated and is violating Section 8(a)(5) and (1) of the
Act.
6. By telling employees that they would not be
given cost adjustment increases because they had cho-
sen to be represented by the Union, the Respondent
violated Section 8(a)(1) of the Act.
7. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices in violation of Section
8(a)(5) and (1) of the Act, we shall order it to cease
and desist and to take certain affirmative actions de-
signed to effectuate the policies of the Act.6
Because the Respondent failed to make a rec-
ommendation for a wage increase based on the data it
compiled in its market survey, which increase employ-
ees might have received but for the Respondent’s uni-
lateral conduct in violation of Section 8(a)(5), we order
289LAMONTS APPAREL
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
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
the Respondent to make whole each of the employees
for the increases they would have received, if any,
from the date the practice was unilaterally discon-
tinued, apparently about October 9, 1991, by payment
to them of any difference between their actual wages
and the wages they would have otherwise received.
The amount shall be computed on a quarterly basis in
the manner set forth in Ogle Protection Service, 183
NLRB 682 (1970), plus interest as computed in New
Horizons for the Retarded, 283 NLRB 1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, Lamonts Apparel, Inc., East Wenatchee,
Washington, its officers, agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Refusing to bargain with United Food & Com-
mercial Workers, Local 1439, chartered by United
Food and Commercial Workers International Union,
AFL–CIO, CLC as the exclusive bargaining represent-
ative of its employees employed by the Respondent at
its East Wenatchee, Washington store, excluding store
manager, operations manager, area sales manager, ex-
ecutive manager trainee, guards, and supervisors as de-
fined in the Act, by unilaterally changing its past prac-
tice of granting cost adjustments based on the data
compiled in its annual market survey.
(b) Informing employees that they would not be
given cost adjustment increases because they had cho-
sen to be represented by the Union.
(c) 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) Make whole the employees in the appropriate
unit for any monetary losses they may have suffered
by reason of the Respondent’s unilateral withholding
of annual wage increases that the employees would
have received. The amount shall be computed on a
quarterly basis in the manner set forth in Ogle Protec-
tion Service, 183 NLRB 682 (1970), plus interest as
computed in New Horizons for the Retarded, 283
NLRB 1173 (1987).
(b) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay
due under the terms of this Order.
(c) Post at its East Wenatchee, Washington facility
copies of the attached notice marked ‘‘Appendix.’’7
Copies of the notice, on forms provided by the Re-
gional Director for Region 19, after being signed by an
authorized representative of the Respondent, shall be
posted by the Respondent immediately upon receipt
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
altered, defaced, or covered by any other material.
(d) Notify the Regional Director in writing within
20 days from the date of this Order what steps the Re-
spondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain in good faith with
United Food & Commercial Workers, Local 1439,
chartered by United Food and Commercial Workers
International Union, AFL–CIO, CLC as the exclusive
bargaining representative of all employees employed
by us at our 511 Valley Mall Parkway, East Wen-
atchee, Washington location excluding store manager,
operations manager, area sales manager, executive
manager trainee, guards, and supervisors as defined in
the Act.
WE WILL NOT unilaterally withhold any wage in-
creases from you to which you may have been entitled.
WE WILL NOT inform employees that they will not
receive a cost adjustment increase because they have
chosen a collective-bargaining representative.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
WE WILL, on request, reinstate the wages and terms
and conditions of employment which existed before
the unlawful unilateral changes.
WE WILL make whole the employees in the unit de-
scribed for any monetary losses they may have suf-
fered by reason of our unilateral withholding of the an-
nual cost adjustment increases based on the annual
market survey.
LAMONTS APPAREL, INC.