"M" System, Inc.

National Labor Relations Board - Board Decisions

Nov 2, 1960

129 N.L.R.B. 527 (N.L.R.B. 1960)

"M" SYSTEM, INC., ETC. 527
Contrary to the Petitioner's request, it is our opinion that the in-
terests of the driver-salesmen and the over-the-road drivers are not
sufficiently diverse to warrant a finding that a unit limited to driver-
salesmen is appropriate.' As to the Employer's warehousemen, the
facts herein indicate that they have a substantial community of inter-
ests with both the driver-salesmen and the over-the-road drivers.3
For this reason, and as they would otherwise be the only unrepre-
sented employees of the Employer, we include the warehousemen in
the unit. Accordingly, we find that the following employees of the
Employer at its Harland, Wisconsin, plant constitute a unit appro-
priate for purposes of collective bargaining within the meaning of
Section 9 (b) of the Act :
All driver-salesmen, over-the-road drivers, and warehousemen, ex-
cluding office clerical employees, guards, and supervisors within the
meaning of the Act.
As indicated above, the unit found appropriate is broader than that
sought by the Petitioner. As the Petitioner has a sufficient showing
of interest in the appropriate unit, and it did not unequivocally dis-
claim interest therein, we shall direct an election. However, should
the Petitioner desire not to participate in such election, the Regional
Director is authorized to permit the withdrawal of the petition with-
out prejudice upon timely request of the Petitioner.'
[Text of Direction of Election omitted from publication.]
MEMBERS JENKINS and KIMBALL took no part in the consideration,
of the above Decision and Direction of Election.
2 See The Valley of Virginia Cooperative Milk Producers Association , 127 NLRB 785.
To the extent inconsistent herewith , Holsum Bakers , Inc., 102 NLRB 1495, and cases.
cited therein , are hereby overruled.
3 See Brown Cigar Company , 124 NLRB 1435.
4 Brown Cigar Company, supra.
"M" System , Inc., Mobile Home Division Mid-States Corporation,
and Lodge 1243, International Association of Machinists, AFL-
CIO. Case No. 16-CA-1224. November ^?, 1960
DECISION AND ORDER
On June 15, 1960, Trial Examiner Arthur Leff issued his Inter-
mediate Report in the above-entitled proceeding, finding that the Re-
spondent had engaged in and was engaging in certain unfair labor-
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the copy of the Inter-
mediate Report attached hereto. Thereafter, the Respondent filed
exceptions to the Intermediate Report, together with a supporting
brief.
129 NLRB No. 64.
,528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, as amended, the Board has delegated its powers in con-
nection with this case to a three-member panel [Members Rodgers,
Jenkins, and Fanning].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and brief, and the entire record, and
hereby adopts the findings, conclusions, and recommendations of the
'Trial Examiner.'
ORDER
Upon the entire record, and pursuant to Section 10(c) of the Na-
tional Labor Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the Respondent, "M" System, Inc.,
Mobile Home Division Mid-States Corporation, Texarkana, Texas,
its officers, agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with Lodge 1243, Interna-
tional Association of Machinists, AFL-CIO, as the exclusive repre-
sentative of all its employees in the appropriate unit with respect to
rates of pay, wages, hours of employment, and other terms and con-
ditions of employment. The appropriate bargaining unit is: All pro-
duction and maintenance employees at Respondent's mobile home
plant at Texarkana, Texas, including inspectors, the power tool serv-
iceman, the saw filer, porters or janitors, material handlers, hyster or
lift truckdriver, the trash truckdriver, and the pickup driver; but ex-
cluding leadmen, office clerical employees, professional employees,
over-the-road drivers, the office maid, watchmen, guards, the chief
stockroom clerk, and all other supervisors as defined in the Act.
(b) Unlawfully soliciting individual employees to discontinue or
abandon strike activity.
(c) In any like or related manner interfering with, restraining, or
coercing employees in the exercise of rights guaranteed in Section 7 of
the Act.
2. Take the following affirmative action which the Board finds
will effectuate the policies of the Act :
(a) Upon request bargain collectively with Lodge 1243, Interna-
tional Association of Machinists, AFL-CIO, as the exclusive repre-
sentative of the employees in the appropriate unit and embody any
understanding reached in a signed contract.
'With respect to the Section 8(a) (5) violation found herein , see, e g., California Girt,
Inc, 129 NLRB 209.
"M" SYSTEM, INC., ETC. 529
(b) Post at its plant in Texarkana, Texas, copies of the notice at-
tached hereto marked "Appendix." 2 Copies of said notice, to be fur-
nished by the Regional Director for the Sixteenth Region, shall, after
being duly signed by an authorized representative of the Respondent,
be posted by the Repondent immediately upon receipt thereof, and
be maintained by it for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respondent to insure
that said notices are not altered, defaced, or covered by any other
material.
(c) Notify the Regional Director for the Sixteenth Region, in writ-
ing, within 10 days from the date of this Order, what steps it has
taken to comply herewith.
2 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the
words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the Labor Manage-
ment Relations Act, we hereby notify our employees that :
WE WILL NOT unlawfully solicit individual employees to dis-
continue or abandon strike activity.
WE WILL NOT refuse to bargain collectively with Lodge 1243,
International Association of Machinists, AFL-CIO, as the ex-
clusive representative of all our employees in the appropriate
unit described below.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce our employees in the exercise of rights guaran-
teed in Section 7 of the Act.
WE WILL bargain collectively upon request with the aforesaid
Union as the exclusive bargaining representative of all our em-
ployees in the appropriate unit described below with respect to
rates of pay, wages, hours of employment, and other terms and
conditions of employment, and, if an agreement is reached, em-
body such understanding in a signed contract. The appropriate
unit is :
All production and maintenance employees at our mobile
home plant at Texarkana, Texas, including inspectors, the
power tool serviceman, the saw filer, porters or janitors, ma-
586439-61-vol. 129-35
530 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
terial handlers, hyster or lift truckdrivers, the trash truck-
driver, and the pickup driver; but excluding leadmen, office
clerical employees, professional employees, over-the-road
drivers, the office maid, watchmen, guards, the chief stock-
room clerk, and all other supervisors as defined in the Act.
"M" SYSTEM, INC., MOBILE HOME DIVI-
SION MID-STATES CORPORATION,
Employer.
Dated---------------- By-------------------------------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge filed on February 25, 1959, by Lodge 1243, International Asso-
ciation of Machinists, AFL-CIO, herein called the Union , against "M " System,
Inc., Mobile Home Division Mid-States Corporation, herein called the Respondent,
the General Counsel, on May 4, 1959 , issued a complaint alleging that the Respond-
ent had engaged in unfair labor practices affecting commerce within the meaning
of Section 8(a)(1) and ( 5) and Section 2(6) and (7) of the National Labor Rela-
tions Act, 61 Stat. 136 , herein called the Act. The Respondent in its duly filed
answer denied the commission of the alleged unfair labor practices . A hearing, at
which all parties were represented , was held before the duly designated Trial Ex-
aminer at Texarkana, Texas, at various dates between September 21 and December
9, 1959. Briefs were filed with the Trial Examiner by the General Counsel on
February 15, 1960, and by the Respondent on February 24, 1960.
Upon the entire record in the case , and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
I THE BUSINESS OF THE RESPONDENT
The Respondent , a Mississippi corporation with its principal place of business at
Texarkana , Texas, is engaged in the manufacture , sale, and distribution of mobile
homes. During the 12-month period preceding the issuance of the complaint, the
Respondent purchased for use at its Texarkana plant from sources outside the State
of Texas raw materials having a value in excess of $50 ,000. Its out-of-State
shipments of finished products during that period also exceeded $50,000 in value.
The Respondent concedes it is engaged in commerce within the meaning of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
Lodge 1243, International Association of Machinists , AFL-CIO, is 'a labor
organization within the meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Introduction
After earlier efforts by the Union to achieve status as the bargaining representa-
tive of the Respondent 's employees had been met with marked and unlawful resistance
from the Respondent ,' the Union succeeded at a Board -ordered election in gaining
1 Reference is made to Case No. 16-CA-906, a prior unfair labor proceeding involving
the same Respondent That case was concerned with certain activities engaged in by the
Respondent both before and after a Board-ordered election held In June 1956 and lost by
the Union. The Board in its Decision and Order in that case ( 118 NLRB 502) found
that the Respondent violated Section 8 ( a) (1) of the Act , by threatening employees with
the revocation of existing benefits and privileges and with other reprisal measures if
"M" SYSTEM, INC., ETC. 531
majority support, and on November 25, 1957, was certified as the exclusive bargain-
ing representative of the Respondent's employees in an appropriate bargaining
unit described as follows (Case No. 16-RC-2119, not published in NLRB volumes) :
All production and maintenance employees at the Employer's mobile home
plant at Texarkana, Texas, including inspectors, the power tool serviceman, the
saw filer, porters or janitors, material handlers, hyster or lift truckdrivers, the
trash truckdriver, and the pickup driver; but excluding leadmen, office clerical
employees, professional employees, over-the-road truckdrivers, the office maid,
watchmen, guards, the chief stockroom clerk, and all other supervisors as
defined in the Act.
After its certification the Union requested and the Company agreed to meet for
the purpose of negotiating a collective-bargaining agreement. The first meeting
was held on January 4, 1958. Thereafter there were some 16 additional meetings,
most of them widely spaced, extending over a period of more than 11/2 years-the
last on July 30, 1959. The negotiations failed to culminate in a contract. On
August 27, 1958, while negotiations were in progress, the Respondent discharged
employee James R. Walsh who had theretofore served as chairman of the Union's
bargaining committee. Walsh's discharge was made the subject of a separate
unfair labor practice proceeding in Case No. 16-CA-1165. The Board in its Decision
and Order in that case found that Walsh was discriminatorily discharged in violation
of Section 8(a)(1) and (3) of the Act (123 NLRB 1281). On August 29, 1958,
the Union struck the Respondent to protest both the Respondent's failure to come
to contract terms with the Union and its refusal to reinstate Walsh. About 50 or 60,
percent of the unit employees joined the strike, but the Company continued to
operate nevertheless. The strike lasted until June 4, 1959. During the period of
the strike, bargaining negotiations continued, as well as at one meeting thereafter.
The gravamen of the General Counsel's complaint here is that the Respondent
failed to bargain in good faith. The complaint dates the alleged refusal to bargain
from on or about August 28, 1958. That date has no special significance in itself,
except that it marks the earliest bargaining meeting within the 6 months' limitation
period of Section 10(b), the charge not having been filed until February 25, 1959.
The General Counsel quite properly takes the position, however, that evidence as to
negotiations prior to the 10(b) date is not only admissible as background matter
necessary to explain and give meaning to the later negotiations, but also has a rele-
vant bearing on the inquiry into the Respondent's bargaining state of mind on and
after August 28, 1958. Senorita Hosiery Mills, Inc., 115 NLRB 1304, footnote 3.
In addition to alleging a refusal to bargain, the complaint alleges that the Respondent
independently violated Section 8(a)(1) by promising strikers wage increases to
abandon the strike called by the Union. The complaint, as amended at the hearing,
also alleges that the strike was caused by the Respondent' s unfair labor practices.
But as applied to the precise situation in the instant case, the significance of the
last allegation is not readily apparent .2
It is the General Counsel's contention-disputed by the Respondent-that the
Respondent during the course of the negotiations failed to perform its statutory
obligation to meet with the Union at reasonable times and to engage in good-faith
bargaining with a genuine desire to reach an agreement consistent with the respective
rights and interests of the parties. To spell out bad faith, the General Counsel
relies in large part upon what occurred in the negotiations themselves-but not on
this alone. As evidence of bad faith, the General Counsel also relies upon conduct
claimed to have been engaged in by the Respondent away from the bargaining
table-more specifically, the unilateral grant of wage increases to a substantial
number of employees while bargaining was in progress, the institution of a wage in-
centive system without consulting the Union, and the taking of action hostile to the
Union while bargaining was in progress, such as its instigation of an employee peti-
tion repudiating the Union and its discriminatory discharge of Walsh-all as will
later more fully appear.
they voted for the Union ; by promising wage increases and other benefits if the Union
were defeated at the election; and by engaging in other unlawful conduct calculated to
coerce its employees to reject the Union.
2A finding in accord with the allegation could have a meaningful effect only ac provid-
Ing support for an order requiring reinstatement of the striking employees Put the
General Counsel concedes that the Respondent at the termination of the strike granted
reinstatement to all but four of the striking employees who applied. As for the four
who were denied reinstatement-assertedly on the ground that they engaged in strike
misconduct-it appears that unfair labor practice charges thereafter filed on their behalf
were administratively dismissed.
532 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
B. Background evidence; the negotiations prior to August 28, 1958
Because of Section 10(b) considerations, the negotiations prior to August 28,
1958, will be discussed separately from those after that date, although the dividing
line is otherwise an artificial one.
Prior to the 10(b) period there were eight bargaining meetings--January 4,
March 8, March 29, April 26, May 24, June 21, July 8, July 18, and August 14,
1958. The Company's principal negotiator gat the first three meetings was Attorney
0 B. Fisher. Thereafter, Fisher's law partner, J. D. McLaughlin, who was also
present at two of the first three meetings, took over as the Respondent's principal
negotiator and continued in that capacity through all remaining sessions. The
Respondent was also represented at all meetings by Henry B. Eckstein, its general
manager. The Union was represented at the first three meetings by W. L. Grant,
and at the remaining six by W. C. Harris; both Grant and Harris are Grand Lodge
representatives. They were assisted by the employee shop committee which was
headed until his discharge by James Walsh. A court reporter, retained by the
Respondent to record the bargaining proceedings, was present at all but the first
meeting. On the first day the reporter appeared, Grant objected to the reporter's
presence unless the Union was furnished a copy of the transcript without cost.
Fisher told Grant that the Union would have to make its own arrangements with
the reporter if it wanted a copy. No further objection to the presence of the
reporter was thereafter voiced by the Union.3
As the dates set out above reflect, the meetings were widely spaced. To a con-
siderable extent, although not entirely so, the long delays between meetings were
due to the inability of the Respondent's negotiators to meet sooner because, as busy
practitioners at the bar, they had other claims on their time and attention. At the
first meeting, the union negotiators announced that they were available for meetings
at any time, and expressed the wish to bring the negotiations to a speedy conclusion.
There were perhaps two occasions thereafter when the union negotiators found that
they could not conveniently meet on a suggested date, but the alternate dates they
proposed on such occasions were never more than 2 or 3 days away. On the other
hand, the Respondent's negotiators stated at the end of some of the meetings that
because of the pressure of other work they were unable to set a definite date for the
next meeting. Moreover, there were a number of occasions when the Respondent's
negotiators found it necessary to request substantial postponements of adjourned
dates already set because of other intervening engagements which they regarded as
of more pressing importance. At the beginning, at least, the Union does not appear
to have protested the long spread between meetings, possibly because it hoped that
a cooperative attitude on its part would produce dividends, possibly because it had
little choice but to agree to the requested postponements. But as time went on, the
Union became increasingly more impatient with the delays. Thus, in a letter to
McLaughlin, dated May 10, 1958, Harris, while agreeing to McLaughlin's request
for a further 2-week postponement of a meeting previously set for that date, sug-
gested that beginning on May 24 the parties meet on a day-to-day basis, or at least
a week-to-week basis, until negotiations were completed. Again on July 26, 1958,
after receiving word from McLaughlin that other engagements would make him
and Eckstein unavailable for several weeks to discuss a proposal the Union had
earlier submitted, Harris wrote McLaughlin complaining about the delay and re-
iterating the Union's willingness to meet at any time and remain in session until
agreement or stalemate was reached.
Prior to the first meeting, the Union submitted to the Respondent its contract
proposal containing some 26 articles. Included were a number of economic demands,
such as for increased wages (the amount of which was not then specified), premium
pay for work in excess of 8 hours a day and on holidays, added paid holidays, in-
creased vacation benefits, call-in pay, sick leave, and group insurance. Also included
were provisions for employee security (e.g., seniority, no discrimination), for the
establishment of a grievance procedure terminable in arbitration, for a dues checkoff,
for bulletin board privileges, for health and safety, for leave without pay to attend
union business, and other miscellaneous provisions.
At the first meeting, held on January 4, 1958, the provisions of the union proposal
were reviewed generally. Except for such clauses as restated only what the law
requires-for example, recognition, overtime pay for work in excess of 40 hours,
and reemployment rights for employees called into r'ii;'^ry service-the Respondent
objected to all of the Union's proposals in whole or in part.
3 The reporter's transcribed notes are in evidence only with regard to the meetings
beginning on August 28, 1958 The findings of what occurred ^t earlier meetings are
based upon oral testimony, to the extent credited, and upon documentary evidence
C4
M" SYSTEM, INC., ETC. 533
At the second meeting, held more than 2 months later, the Respondent submitted
a counterproposal to the Union's demands. With regard to economic terms, the
Respondent in effect rejected all of the Union's demands, agreeing only not to reduce
individual wage rates below existing levels and to maintain, but not enlarge upon,
the preexisting vacation and holiday benefits enjoyed by the employees. The
Respondent also offered to write into the contract (a) a recognition clause; (b) a
provision against racial, religious, and union (or nonunion) discrimination, appli-
cable to both the Union and the Respondent, but making the Union responsible not
only for conduct of its representatives but of its members as well; (c) a workweek
clause providing for overtime payments as required by the Fair Labor Standards
Act; (d) a seniority clause which, unlike the Union's proposal, was tied not only
to longevity of service, but to skill, ability, and "disposition of the employee to do
the work required," and which, moreover, allowed the Respondent to make excep-
tions "through the exercise of management prerogatives"; (e) a clause granting the
Union limited bulletin board privileges; (f) a three-step grievance procedure, with
management's decision at the third level to be "final and binding"; (g) a provision
for the appointment and certification of shop stewards by the Union; and (h) a pro-
vision permitting a union representative to be present at the presentation of employee
grievances. All of the foregoing items were related in some measure to demands
made by the Union. In addition, the Respondent's proposal contained a number
that were not. Thus it provided for a rigid no-strike clause and a broad management
functions clause-both of which will be discussed at some length below. It also
contained an absence-without-leave clause, imposing tight restrictions and severe
penalties upon employee unexcused absences. The remaining provisions, such as
the preamble, severability, and waiver clauses, were more or less of a formal nature.
The Union took no exception to the recognition clause, the shop steward clause,
the union representative clause, and a number of the formal provisions. It objected
in whole or in part to all other clauses in the Respondent's proposal on the ground
that they either went too far or not far enough.
At the succeeding meetings the parties discussed their differences and at various
times prepared and submitted rewrites of specific clauses. The Union, in an effort
to reach agreement, gave considerable ground. The Respondent also made certain
concessions, but its concessions were more limited in nature. The Respondent agreed
to write into its proposal a provision for a 10-minute rest period and also one for
the continuation of a group insurance policy then in force; but these merely restated
benefits the employees already enjoyed. The Respondent also agreed to certain
language modifications in its proposed seniority clause, modifications that did not
materially alter the content of the clause it had originally proposed, but which were
nevertheless apparently sufficient to meet the Union's objections.4 There were in
addition a number of other items as to which the Respondent agreed to make minor,
and in some cases insubstantial changes, but none of them fell within the more
significant areas of dispute .5 On the more serious matters in controversy, to be
4 The seniority clause, as revised, still allowed the Respondent to give weight to other
factors besides length of service in applying seniority, such as skill and ability, and
"willingness to work " The original proposed clause had provided that seniority could
be broken by an employee's discharge. The Union asked and the Respondent agreed, that
the discharge must he for "proper cause " This change, however, was more illusory than
real, for, as will later more fully appear, the Respondent insisted throughout the negotia-
tions on reserving to itself under its proposed management prerogative clause the sole
right to determine what was proper cause for a discharge.
i Thus : (1) In an article covering the trial period for new employees, the Union had
suggested a 30-day probationary period ; the Respondent suggested 90 days ; It was tenta-
tively agreed to make it 60 days (2) In the vacations clause, the Respondent agreed to
delete a provision which would have deprived an employee of his paid vacation if he had
any unexcused absence during the preceding year. Significantly, the forfeiture provision
did not appear in the Respondent's original counterproposal, but was added later (3) In
the discrimination clause, the Respondent agreed to add a provision--in content no more
than the law required-that the employees were to be free to join or not to join the
Union without coercion from either the Respondent or the Union, and that the Respond-
ent was not to encouraee employ es to c'erce union members (4) In the "absence with-
out leave" clause, the Respondent consented to modify the requirement that a doctor's
certificate be produced to justify any unexcused absence because of illness, so as to waive
the need of such a certificate in the case of an absence of less than 3 days where the
employee had reported to his foreman his inability to work and had been granted leave
by the foreman. (5) The Respondent consented to a "leave with absence" clause, which
unlike the one submitted by the Union, tied the Respondent down to nothing, merely pro-
•534 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
,discussed in the subsection below, the Respondent remained unyielding throughout
this entire period. Because the parties during the first 8 months of negotiations
never got beyond the mechanics of the agreement, there was scarcely any discussion
of the "cost" items; in any event the Respondent made it clear that it was unwilling
to provide any benefits beyond those the employees already enjoyed.
Moreover, as gaps were being bridged in certain areas of disagreement, the Re-
spondent intensified disagreement elsewhere by adding to its contract proposal new
provisions that had not been in it before. Thus, as late as July 8, 1958, after the
negotiations were already 7 months old, the Respondent submitted a rewrite of its
proposals in which it inserted in the much controverted management prerogatives
clause-of which more later-the following provision:
. anything herein contained to the contrary notwithstanding, it is specifically
understood that the Company has the right to hire employees of its choice, fire
employees for just cause, just cause to be determined solely by the Company,
and to make merit increases to its employees as it may choose.
The rewrite was submitted ostensibly to show the extent to which the Respondent was
prepared to narrow its earlier contract proposals in the light of tentative agreements
earlier reached on specific items. But no previous written proposal submitted by
the Respondent had suggested that the grant-of-merit increases be made a nonbargain-
able matter. The Respondent's insertion of that provision became and remained one
of the principal stumbling blocks to agreement, as will more fully appear below.
The Respondent's earlier proposed management prerogative clause did include a
provision requiring the Union to recognize that the right to "hire, promote, discipline
and discharge employees" was a management prerogative. The Union's objection
to that provision was a limited one. It argued that it ought not be deprived of its
statutory right to represent employees on grievance claims that employee tenure
had been broken by improper company action. It indicated, however, that it was
prepared to recognize that discharges and disciplinary action for just cause were
management prerogatives. The Respondent professed a willingness to make a re-
vision that would meet the Union's objection. But when it submitted its revision,
it also added the phrase, "Just cause to be determined solely by the Company " This
revision more than nullified the "concession" made by the Respondent. It sharpened
the difference between the parties and provoked added dissension.
A further example may be cited of a revision by the Respondent that moved away
from rather than toward agreement. This concerned the shop committee and griev-
ance procedure clauses. In its original proposal the Respondent imposed no limita-
tion-except as to number-on the Union's selection of its own stewards or on the
manner in which they might function. The Respondent's proposal in that respect
readily met with union approval and tentative agreement was reached on that point.
Nevertheless, on July 8, 1958, some 7 months after negotiations began, the Respond-
ent drastically altered its proposal to create a new issue where there had been none
before. The new proposal would have required that the employees of each depart-
ment annually elect one of their number as the steward of that department; that there
could be no substitution of stewards from one department to another; that a griev-
ance not settled at the first level could not be carried higher without majority ap-
proval of the grievance committee; and that the steward of the department in which
the grievance arose would be ineligible to serve or vote on any grievance committee
or otherwise participate in the prosecution of the grievance originating in his
department beyond the first level of the grievance procedure. This added demand
provoked strong objection from the Union as an invasion of its lawful right to select
its representatives in its own way, and through the next three meetings became one
of the major impediments to agreement As will more fully appear in the subsection
below, the Respondent eventually withdrew that demand, possibly because it recog-
nized that continued insistence on it as a condition to agreement could not be
defended in a refusal-to-bargain case. But in the meantime, the injection of that
new issue. which led to time-consuming discussions diverting attention from other
issues, had a deleterious effect on the progress of the negotiations
At the meeting of July 18, 1958, the Union, surrendering on all other contract
issues in dispute-including all its economic demands other than wages-notified the
Respondent that it was prepared to accept the Respondent's proposal as last re-
viding that such leaves could only be obtained by mutual consent of the Company and
the Union (6) The Respondent agreed to write into its contract a health and safety
clause, but the clause it consented to did no more than call upon the Respondent to use
its "best efforts" to maintain safe conditions, and left the determination of what safety
devices and equipment were to be used "in the sole discretion of the plant manager "
(4
M" SYSTEM, INC., ETC. 535
written if the Respondent in turn would agree to a 15-cent wage increase, grant a
dues checkoff, and accept certain specified union proposals-to be detailed in the
subsection below-relating to the composition and selection of the shop com-
mittee, to strikes and lockouts, to the grievance procedure and arbitration, and to
management prerogatives. Thereafter, within the period prior to the Section 10(b)
date, one further meeting was held, on July 18, 1958. The parties discussed the
remaining contract issues as formulated by the Union, but no advance toward agree-
ment was made. On August 19, 1958, the employees at a union meeting voted to
strike because of the state of the negotiations, but no definite strike date was then
set. Before the actual beginning of the strike one further meeting was held on
August 28, 1958, but that brings us to the post-10(b) period to be considered in the
subsection below.
C. The negotictions after August 28, 1958
1. The meeting dates
Beginning with August 28, 1958, there were nine additional bargaining meetings-
August 28, September 24 and 29, and December 18, 1958, and January 22, March
25, April 9, June 3, and July 30, 1959. All but the first and last occurred while the
strike was in progress. The Respondent continued to be represented by McLaugh-
lin, with Eckstein also in attendance. Harris remained as the principal union nego-
tiator until the meeting of September 29, 1958, when he was succeeded by Grand
Lodge Representative Ralph Farmer. Farmer in turn, was succeeded by Grand
Lodge Representative Vernon McKimmey after the meeting of January 22, 1959.
Another Grand Lodge representative, V. M. Cameron, also participated in the meet-
ing of June 3, 1959. Federal Conciliator C. H. Wheeler attended all meetings from
August 28, 1958, through March 25, 1959, but not thereafter. The court reporter
retained by the Respondent was present at all meetings.6
2. The extent to which the Respondent was responsible for the time lag
between meetings
As the meeting dates set out above reflect, there were substantial delays between
meetings. One of the General Counsel's claims in this case is that the Respondent
failed to satisfy its statutory obligation to meet at reasonable times. I consider first
the evidence bearing on that question.
The arrangements for most of the meetings were made by the conciliator, and
except in the three instances set out below, the General Counsel adduced no specific
evidence to show that the Respondent was responsible for delays.
(a) The time lag between the meeting of January 22 and March 25, 1959, was
more than 2 months. At the end of the January 22 meeting, the Respondent an-
nounced that Eckstein was leaving town at the end of the following week and would
not be available for a further meeting until his return some 3 weeks later. The
Union then requested that the parties meet again on Saturday, January 24, but Mc-
Laughlin said he was unavailable that day. Conciliator Wheeler, who had previ-
ously stated that he was tied up the early part of the following week, then agreed to
rearrange his schedule so as to leave Tuesday, January 27, open for a meeting.
Eckstein expressed uncertainty as to whether he could make it that day, declaring
that it would mean rearranging other appointments, but promised to check and let
Wheeler know. Wheeler then tentatively set the next meeting for January 27, with
February 18 as an alternative date if Eckstein found he could not make it on the
27th. In parting, Farmer urged that every effort be made to hold the meeting on
January 27, as tentatively scheduled. No meeting was held on that date. However,
on January 24, McLaughlin wired Farmer that he could not meet on the 27th be-
cause of another business appointment that day at Dallas of which he had forgotten,
but that February 18 would be satisfactory to him. About February 11, McLaugh-
lin advised Farmer that he could not meet on February 18 because of the death of
his father-in-law, necessitating his absence for 2 weeks. McLaughlin did not suggest
an alternative date. Later, McKimmey-who had in the meantime succeeded
Farmer as the Union's negotiator-wrote McLaughlin, asking that a definite date
be set. On March 2, McLaughlin replied to McKimmey's communication, stating
that he would be unable to meet until sometime after March 22 because of a
9 The reporter's transcripts of the negotiations beginning with the August 28, 1958,
meeting are in evidence, and, in accordance with a stipulation of the parties, are accorded
controlling weight where conflicts appear between what is contained therein and, what
was testified to by witnesses
536 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
heavy court docket. Although urging McLaughlin to try to make it sooner if at all
possible, McKimmey agreed to set March 25 as the next meeting date. All of this
occurred while the strike was in progress. It was during this period that the Union
filed its refusal to bargain charge.
(b) There was a delay of some 8 weeks between the meetings of April 9 and
June 3, 1959. At the April 9 meeting, the Union had indicated a willingness to give
further ground in an effort to reach agreement. As an aid toward agreement, it had
requested the Respondent to furnish current data relating to wages and wage classi-
fications, and the Respondent agreed to do so although Eckstein stated this might
take some time to assemble? The April 9 meeting was adjourned without any
definite date set for a further meeting. There is conflict in the testimony as to the
understanding reached.8 According to McKimmey, the Respondent was to contact
him when the requested information was assembled for submission . According to
McLaughlin, the Union was to contact the Respondent. In any event, on May 12,
McKimmey wrote McLaughlin, complaining that the Respondent had not notified
him of a further meeting date and asking that one be set for May 19. In reply,
McLaughlin's secretary, under date of May 15, 1959, advised McKimmey that Mc-
Laughlin was then en route to Washington, D.C., and would be gone until the end
of the following week. On May 23, McLaughlin wrote McKimmey, explaining that
he had just returned from Washington and could meet with McKimmey on June
3 or 5.
(c) There was also a delay of some 8 weeks between the meeting of June 3, 1959,
and the final meeting on July 30, 1959. At the June 3 meeting Eckstein stated that
the Respondent was thinking of working out an incentive plan that would give the
employees more money, and promised to submit the plan to the Union when ready.
The Union indicated that in that case it would be willing to accept the Company's
position on all other matters if the Respondent modified somewhat a few provisions
in the management prerogative and limited arbitration clauses it had previously sub-
mitted. The Respondent agreed to prepare and submit a rewritten proposal on the
clauses still in controversy. Toward the end of the meeting, Cameron stated that
since the parties now appeared near agreement, he was going to recommend termina-
tion of the strike. Before that there had been a discussion as to the date of the next
meeting. McLaughlin had stated that Eckstein would be out of town the next week,
and that thereafter he would be busy in court and therefore unable to meet again
until June 15. However, the record does not show that any specific date for a fur-
ther meeting was set at the end of the June 3 meeting. The Union terminated the
strike on June 4. Under date of June 24, McLaughlin transmitted a rewrite of its
proposed management prerogative and limited arbitration clauses. As will later
more fully appear, the rewrite as submitted contained new matter which the Re-
spondent must have known would be objectionable to the Union and which widened
rather than narrowed the preexisting area of difference between the parties. The
promised wage data was not submitted, McLaughlin explaining that he had no
opportunity to discuss that subject with Eckstein. In his transmittal letter, Mc-
Laughlin stated that Eckstein would be out of town until July 6, at which time he
(McLaughlin) would be gone until July 20. On July 1, Cameron wrote Eckstein,
complaining of the frequently delayed and often canceled negotiating meetings
which he attributed to bad-faith bargaining. Cameron "urgently" requested a meet-
ing no later than July 15. Eckstein did not reply to Cameron's letter. On July 22,
McLaughlin wrote Cameron, taking issue with Cameron's remarks to Eckstein and
expressing a willingness to meet on July 24 or during the following week. A meet-
ing was thereafter arranged for July 30.
Whether the facts recited above add up to a failure of the Respondent to fulfill
its obligation under Section 8(d) to meet at reasonable times, or 'amount at least
to evidence of bad-faith bargaining , are matters that I reserve for consideration
below in the analysis section of this report.
3. The contract issues and the positions taken by the parties thereon
At the opening of the meeting on August 28, 1958, Conciliator Wheeler announced,
and the negotiating parties agreed, that there remained six main issues-grievance
committee, checkoff, wages, management clause, no-strike no-lockout clause, and
arbitration. The positions taken by the respective parties on each of such con-
tested issues during the course of the negotiations will be discussed below.
7 As will appear below, the information requested was never in fact submitted
8 On this subject, the reporter 's transcript of the meeting offers no aid , the matter
apparently having been discussed outside her presence.
it
M" SYSTEM, INC., ETC. 537
a. Grievance committee
The issue relating to this item was discussed in an earlier subsection of this report.
As there noted, the Respondent in its original counterproposal, as well as in a sub-
sequent rewrite thereof, proposed a grievance committee clause which the Union
found acceptable. On July 8, 1958, however, the Respondent in a revised proposal
submitted new demands which would have restricted the manner in which stewards
might be chosen, and, moreover, would have prevented stewards from participating
in the grievance procedure above the first level on grievances arising in their own
department. The Union had no objection to a limitation on the number of stewards
who might be accredited, but strongly protested what it considered an unlawful and
unwarranted effort on the Respondent's part to interfere with its freedom of choice
of representatives. The Union's settlement proposal of July 18, 1958 (see sub-
section above), proposed in substance that the Company revert to its original pro-
posal with regard to the shop committee, namely, recognition of all union accredited
stewards and shop committeemen, without restriction on the manner of their selec-
tion, except for number, and without limitation on the area in which they might
act. Until the meeting of August 28, 1958, however, the Respondent adamantly
adhered to the demands made in its proposal of July 8.
At the meeting of August 28, 1958, however, McLaughlin indicated that he would
be willing to delete from the Respondent's revised proposal of July 8, all language
in the shop committee clause that would restrict or control the Union's method of
selecting stewards or the composition of the grievance committee. Harris declared
that with such deletions, the clause would be acceptable to the Union. The shop
committee clause thereafter ceased to be an item at issue in the contract negotiations.
b. Checkoff
The Union proposed a dues checkoff clause, standard in form, applicable to those
employees only who signed authorizations therefor. The Respondent opposed the
inclusion of that clause on the ground that it did not want to do the Union's book-
keeping. As an added ground, it stated-I believe truthfully-that its bookkeeping
machine then in use was not equipped to handle any more items than were then
already being computed. On several occasions McLaughlin stated, perhaps with
tongue in cheek, that the Respondent might consider granting a checkoff if the
Union would purchase for its use other bookkeeping equipment. It is quite clear
from the record that the Union did not consider the checkoff a serious issue. At the
meeting of January 22, 1959, the union representative expressly stated that although
the Union would like a checkoff clause the absence of one would not stop it from
signing a contract.
c. Wages
Prior to the advent of the Union, the Respondent had no job classifications in
effect, nor uniform rates of pay for individuals performing the same or similar work.
An individual employee's rate of pay was determined by the Company's estimate of
his worth, what the Company could get him for, what the employee could obtain
through individual bargaining, and like considerations that normally control rates of
pay where there is no governing collective-bargaining agreement or voluntarily
established wage classification system. The Respondent had an announced policy of
granting increases on a merit basis. But it had no formalized merit increase system,
no procedures for periodic review, no fixed scale of merit increases, no formulated
objective criteria for evaluating relative individual merit, or the like. Individual
increases were granted upon recommendations of the foremen approved by higher
management. Much more often than not, a request for an increase would have to
be made by the employee himself before the foreman would consider whether the
employee was qualified for it. In determining whether a merit raise should be given,
the employee's ability, efficiency, and worth to the Company were taken into account,
but so, too, were other considerations such as whether or not the employee was
likely to quit if the requested raise were denied him. In short, the granting of so-
called merit increases was based largely on factors indigenous to individual
bargaining.9
In its initial contract proposal the Union withheld a specific request for a wage
increase, but simply proposed the establishment of "appropriate job classifications
and adequate rates of pay for all employees." The Respondent counterproposed a
wage clause which set forth no wage rates, but simply stated that no individual em-
9'The findings in this paragraph are based largely upon the credited testimony of
Warren Edward Hart, a former company foreman.
538 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ployee would have his rate of pay reduced below his then-current rate of pay. In a
revised counterproposal later submitted, the Respondent also demanded that there
be reserved to it as a management prerogative the right unilaterally to grant merit
increases to such employees as it might choose, without any qualifying standards.
The establishment of a job classification system was discussed at various meetings,
but does not appear ever to have become a serious item in controversy. The Re-
spondent offered to append to its proposed contract a schedule roughly classifying
the various types of jobs in its plant along with the lowest and highest rates of pay
then actually being paid to employees holding such jobs. In its settlement offer of
July 18, 1958, the Union stated that that would be agreeable to it provided the Re-
spondent would agree to a 15-cent across-the-board increase to all employees in the
bargaining unit
In support of its demand for a general wage increase, the Union contended that
the $1.18 average hourly rate then being paid the employees was below industry
standards. The Respondent made no attempt to dispute the validity of the Union's
arguments. Nor did it seek to justify its refusal to pay more upon the ground of
inability. It simply took the position that it was unwilling to grant a general increase
because of an asserted company practice not to grant increases except on an individual
merit basis. The following colloquy from the September 24, 1958, bargaining session
typifies the Respondent's stand on the wage issue:
Mr. FARMER. I dont think any of us will deny that there should be an over-all
wage increase with the price of living and the wages out there.
Mr. McLAUGHLIN. We deny there should be an across-the-board increase.
Mr. FARMER. I don't know what your grounds are. Any other industry with
which you are competitors are way over your wages at the present time. You
are just about the minimum wages at the present time.
Mr. McLAUGHLIN. Maybe, but at least the Company is not willing to grant
an across-the-board increase at this time.
Mr. FARMER. On the grounds they are not able?
M,r. MCLAUGHLIN. No, just not willing to grant it at this time.
Mr MASSEY (Local representative). Mr. McLaughlin, is it the Company's
position that the Union asked for too much across-the-board?
Mr. McLAUGHLIN. No, the Company is not willing to grant any across-the-
board wages increase at this time. It grants them on a merit basis as earned
by the individual.
At no time during the negotiations did the Respondent deviate from its position as
expressed above Nor did it retreat from its complementary position, strongly
opposed by the Union, that any contract entered into must reserve to it alone-with-
out any right of review under grievance or arbitration procedures-the determi-
nation of who should be granted an increase on an individual basis and in what
amount.io In short, except for the restriction on its power to reduce individual
wage rates, a power it would not have been likely to exercise in any event, the Re-
spondent insisted throughout the negotiations upon maintaining the same unilateral
control over the setting of wage rates that it had enjoyed prior to the advent of the
Union.
The granting of an across-the-board increase was one of the major contract issues
in controversy. But it is quite clear from the record this was not the basic issue
over which the negotiations finally collapsed; indeed, Eckstein conceded as much
at the hearing. Toward the end of the negotiations, the Union made it evident that
it would be willing to forgo an across-the-board wage increase if the Respondent
would retreat somewhat from its position on the management prerogatives and limited
arbitration clauses to be discussed below. The Respondent's adamant insistence on
reserving to itself alone unreviewable authority to grant or withhold merit increases
remained, however, one of the principal obstacles to agreement, at least until the
final meeting. At that meeting the Union indicated that, although it considered the
10 Although Eckstein testified that the Respondent sought only the right unilaterally
to determine merit increases within established rate ranges, I do not credit his testimony
in that respect. No such limitation was ever suggested by the Respondent in any of its
written contract proposals, nor is Eckstein's testimony supported by the transcripts of
the bargaining meetings in evidence. On the contrary, there is affirmative evidence re-
flecting the opposite was true. Thus, at the meeting of March 25, 1959, in response to
an argument by McKimmey that it was "standard" for contracts to contain definite pay
ranges, Eckstein stated that the Respondent nevertheless wanted to be in a position to
grant an Increase In a situation "where a man may be on top of the job but maybe
should receive more than the high rate gives him."
""M" SYSTEM, INC., ETC. 539
Respondent's stand on merit increases highly improper, it would not allow its
objection on that score alone to hold up agreement if the Company would modify
its proposed management prerogatives and limited arbitration clauses in a manner to
be discussed below, so that the Union might at least be given an opportunity ade-
quately to represent the unit employees on grievances related to their job tenure
and other terms and conditions of employment.
d. No strike-no lockout
Throughout the negotiations, the Respondent insisted upon a broad no-strike
clause which would have barred strikes under any circumstances, even after the
exhaustion of grievance procedures. As originally proposed, a "strike" was defined
as "any deliberate concerted failure by two or more employees within the bargain-
ing unit to perform their normal work at any time during regular working hours
when work is available to be performed." The no-strike clause contained a penalty
provision which would have required the Union to pay the Respondent "one two-
hundred-fiftieth (1/250) of the total compensation of all employees absent from
work due to [any] such strike for the preceding twelve calendar months for each
day such strike continued." The Company's proposal also contained a no-lockout
clause, likewise coupled with a penalty provision. The Union had no objection
to a standard no-stnke provision. But it took the position that it ought not be
required to relinquish its statutory right to strike unless some effective method,
such as arbitration, were provided in the contract for the settlement of grievances.
The Union strongly opposed the "strike" definition and the penalty provisions which
the Respondent proposed as being too loose in form and as subjecting the Union
to liability for conduct of employees not under its control.
During the first 7 months of negotiations, the Respondent tenaciously declined to
make any modification in the language of its proposed no-strike clause. At the
August 28, 1958, meeting, however, the Respondent indicated a willingness to delete
the penalty provisions if the Union would agree to all its other contract proposals.
At the September 24, 1958, meeting the Respondent further agreed to modify the
definition of "strike" by making it applicable to stoppages or slowdowns by "two
or more employees x'ho are members of the Union." In all other respects the
Respondent insisted throughout that the "no-strike" provision it proposed remain
intact.
e. Management prerogatives clause
In its original counterproposal, the Respondent proposed a management preroga-
tives clause reading as follows:
Management Prerogatives: Nothing in this agreement contained shall be
deemed to limit the Company in any way in the exercise of the usual functions of
management. The union recognizes that the Company shall have the right and
responsibility to determine the policy of management, the quantity and quality
of the production to be produced, the material and machines to be used and
in general the operation of the Company's plant, to hire, promote, discipline
and discharge employees without discrimination against any employee because
of his membership or non-membership in the union. All functions, powers or
authority which the Company has not specifically abridged by this agreement
are recognized by the union as being retained by the Company. The Union
recognizes that there are functions, powers and authorities belonging solely to
the Company prominent among which, but by no means wholly inclusive, are
the functions of introducing new or improved production methods or equip-
ment, deciding the number and location of plants, the nature of equipment,
the products to be manufactured, the methods and processes of manufacturing,
the scheduling of production, the method of training employees, and designing
and engineering of products and the control of raw material; also to make or
change such rules and regulations as it may deem necessary and proper for
the conduct of its business; to eliminate , change or consolidate jobs, sections,
departments or divisions, to operate one or more departments, jobs, sections
or divisions while others are closed down, to control absolutely the volume of
its production and the allocation of work to departments and jobs, to determine
the amount of and occasions for overtime work, if any, to control the number
of employees required from time to time and permit personnel outside the
bargaining unit to perform tasks or jobs ordinarily performed by an employee
within the unit for experimental purposes or when an employee within the
unit is not available to do the work , all in addition to the rights and respon-
sibilities of the company heretofore mentioned. A laid off employee qualified
540 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to do the work involved shall for the purpose of this paragraph of the contract
be deemed to be available for work. The enumeration of certain functions
herein shall not be deemed to exclude any other normal function of manage-
ment not enumerated in this paragraph as reserved to the Company.
At various times thereafter, the Respondent enlarged upon the foregoing clause.
Thus, in a revised proposal submitted on July 18, 1959, the Respondent added at
the end of the third sentence:
.. . and anything herein contained to the contrary notwithstanding, it is
specifically understood that the Company has the right to hire employees of
its choice, fire employees for just cause, just cause to be determined solely by
the Company and to make merit increases to its employees as it may choose.,,
[Emphasis supplied.]
About October 1958, when the Respondent first submitted a limited arbitration
clause, it added to the management prerogatives article a further provision making
explicit what was in any event implicit before, that-
none of the decisions of management under the terms and meaning of the
[management prerogatives] clause shall be subject to review by arbitration
or by the grievance procedure herein contained.
The Union did not oppose the inclusion of a management prerogatives clause in the
contract. Although it expressed the view that the clause as drafted by the Respond-
ent was far too long and complex, and suggested the substitution of one simpler
in form,12 it never questioned that the Respondent ought to have exclusive authority,
free of bargaining and grievance procedure limitations, to deal with many of the
subjects referred to in its proposed clause. The Union's objection was that the
Respondent's proposed clause went too far, and, if acceded to, would have precluded
the Union from representing the employees and protecting their interests on sig-
nificant matters affecting job tenure and terms and conditions of employment. The
Union objected especially to those provisions of the Respondent's management
prerogative clause that related to the discharge, demotion, and discipline of em-
ployees, the granting of merit increases, and the making and changing of plant
rules and regulations. The Union made clear that it fully recognized manage-
ment's right to discharge, demote, or discipline employees "for just cause," and
that it had no objection to writing that much into the contract. But it strongly
excepted to the added language that "just cause [was] to be determined solely
by the Company." The Union took the position that in practical effect this would
make the Respondent the sole and final arbiter of the fairness of all discharge or
disciplinary action, and that the Union-barred by the management prerogatives
clause from protesting the Respondent's action through grievance and arbitration
procedures, and by the no-strike clause from resorting to strike action-would be
rendered impotent in performing its statutory responsibility to represent the unit
employees on matters vitally affecting their job security. The Union also asserted
that the provision might provide a loophole to defeat other contract rights of
employees.13 As for merit increases, the Union asserted that this under the law was
a mandatory subject for collective bargaining. As the representative of all em-
ployees, it considered that it had an interest in seeing to it that merit increases were
not granted on an inequitable or discriminatory basis or in a manner designed to
undercut the Union. Rules or changes therein that might alter existing working
conditions were also matters for collective bargaining, the Union contended. The
Union further expressed the fear that a grant to the Respondent of unilateral
power to change rules and regulations, without any right of the Union to have
company action subjected to grievance and arbitration procedures might lead to
an abridgment of other agreed upon contract terms and conditions.
At the March 5, 1959, meeting, some 14 months after the negotiations began, the
Respondent for the first time expressed a willingness to modify its management
prerogatives clause, but in one particular only-by providing that its reserved right
11 In a still later revision the words "demote or discipline" were inserted between "fire"
and "employees "
12The Union proposed as a substitute a clause reading as follows :
Complete authority, subject only to limitations of law and specific provisions of this
agreement, to hire, supervise, direct and operate every department and personnel
covered by this agreement rests solely with management.
13 For example, seniority rights • Under the seniority clause, "continuous service"
could be broken by a discharge for "proper cause."
""M" SYSTEM, INC., ETC. 541
unilaterally to make or change rules and regulations would apply only to "such
changes or additions [as] do not violate any other provisions of this agreement."
That was the only concession to the Union's position that the Respondent ever agreed
to make. The Respondent's insistence on retaining to itself alone the determina-
tion of "just cause" for discharge and the grant of individual wage increases-
coupled with its related positions on arbitration (to be discussed below) and on
union waiver of strike action-remained throughout the negotiations the major
block to agreement. In a last-ditch effort to reach agreement the Union at the final
meeting indicated that, although it considered the Respondent's position on merit
increases improper, it would be willing to yield on that point to gain a contract,
but not on "just cause," since this along with the Respondent's stand on arbitration
and the no-strike provision would too substantially foreclose it from properly repre-
senting employees in the prosecution of grievances.
f. Arbitration
As earlier noted, the Union proposed a grievance procedure under which disputes
involving contract interpretation or application, not settled at lower levels, might be
referred to arbitration. Under the Respondent's counterproposal, grievances might
be carried through several stages to the plant manager, but the decision of the
plant manager was to be "final and binding on all parties." The Union could
not strike even after exhaustion of the grievance procedure; it was barred by the no-
strike clause from doing so. The issue of arbitration became and remained, along
with the Respondent's proposed management prerogative clause, the focal point
of controversy throughout the negotiations. The Union took the position that
unless it had some form of recourse from management's decisions, either through
exercise of its statutory right to strike or through arbitration which was the usual
quid pro quo of a waiver of the right to strike, it could not effectively carry out its
representative obligations to the employees. The Union made clear on numerous
occasions that it was not insisting on arbitration as a contract "must," and would
willingly drop its demand for arbitration if the Respondent in turn would yield on
its insistence upon a no-strike provision, but to this the Respondent would not agree.
The Respondent stated that it was opposed to arbitration because it did not want to
abdicate to outsiders the right to manage its own business and because no arbitrator
could be as familiar as the plant manager with the facts of a grievance. It also
argued that it held to the principle that contract disputes ought to be settled by
courts of law, not by arbitrators. But it did not explain how a court could do any-
thing but uphold the plant manager's decision on a grievance when by the terms
of the contract his decision was made "final and binding."
During the first 9 months of negotiations, the positions of the parties on the arbitra-
tion issue remained unchanged. After the strike began, and a conciliator was called
in, however, the Respondent indicated that it might consider "limited arbitration "
The Respondent submitted a proposal for such "limited arbitration" at the meeting
of September 29, 1958. Under the proposal, the plant manager's determination of
any grievance was to remain "final and binding on all parties" unless (1) "such
decision was about some matter not within the exclusive prerogative of management"
as covered by its proposed management prerogatives clause; (2) the dispute involved
an "interpretation of the contract and its terms"; and (3) the decision of management
was "arbitrary and capricious to the degree that it was without any evidence to sup-
port it." Provided only that all three of the aforesaid conditions were met, the
decision of management might be submitted to arbitration, but even then only sub-
ject to the following additional limitations:
If a decision of management is under the foregoing restrictions qualified to
be and is submitted to arbitration, the decision of the plant manager is to be
sustained by the arbitrator or arbitrators if any evidence is provided at the arbi-
tration that the decision of management was not arbitrary and capricious.
Evidence as used herein is defined as the sworn written or the sworn oral
testimony of any individual to any fact or facts that would support the man-
ager's decision.
As was to be expected, the proposed "limited arbitration" clause proved unac-
ceptable to the Union. The restrictions imposed would have made it virtually im-
possible to carry any dispute to arbitration, and even if the Union did succeed in
getting a case to arbitration, the standard of review was such as to leave the arbitrators
with little choice as a practical matter but to sustain the finality of the plant manager's
determination. As McKimmey stated at one meeting: "Anyone who would take at
case to arbitration under that clause should go to a psychiatrist."
542 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Respondent did not yield further on the arbitration issue. There was some
indication that it might do so at the June 3, 1959, meeting. At that time, the Union
indicated that it might go along with the Respondent 's arbitration clause if a substan-
tial evidence standard of review was substituted for the "arbitrary and capricious"
standard , and if the Union's remaining objections to the management prerogative
clause were ironed out so as to allow, for example, "just cause " to be reviewable
under the grievance and arbitration procedures . While not committing itself to any
concession , the Respondent agreed to rewrite its arbitration and management
1 rerogative clauses for further submission to the Union .. The Respondent submitted
its rewrite of the clauses in question on June 24 , 1959. In the meantime the Union
had terminated the strike . The rewrite left the management prerogatives clause
virtually unchanged. The only changes made in the arbitration clause was one that
the Respondent must have known would make that clause even more objectionable
to the Union. The revision added two provisions. One would have required the
party submitting a matter to arbitration-by necessity the Union-to bear all the
expenses of the arbitration proceeding . 14 The other would have required-as a sub-
stitute for the Union proposed board of arbitration composed of one member selected
by each side and a neutral chosen by the other two-that the arbitrator in all cases
be the president of the Texarkana National Bank, the Respondent 's bank of deposit.15
g. Furnishing of wage information
On November 27, 1957 , before the first bargaining meeting, the Union by letter
requested the Respondent to furnish it with a list of all unit employees , along with
their dates of hire, job classifications , and rates of pay. At the initial negotiating
meeting on January 4, 1958, the Respondent explained that it had no job classifica-
tion system in effect . It presented to the Union a list of employees with the hiring
date and rate of pay of each. The list was reviewed and the general job category
of most of the employees on the list was noted in pencil alongside their names At
a subsequent meeting on August 28 , 1958, the Respondent exhibited to the Union
a revised list showing the hourly rates of pay and hiring dates of employees in the
unit as of that time. That list, however, did not indicate the employee job classifica-
tions or categories.16
In the negotiations , the Union asked for the establishment of job classifications
that would bind the Respondent to definite pay rates for job classifications rather
than individuals. On July 18, 1958, the Respondent submitted to the Union along
with a revised contract proposal an appendix containing a list of loose classifications
showing the highest and lowest rates then being paid employees in each such classifi-
cation The Union at that time expressed a willingness to accept that as a job and
wage classification provided the Respondent would agree to a 15-cent an hour across-
the-board wage increase for each employee in the bargaining unit.
After July 18, 1958 , there were numerous hires, job changes, and individual wage
increases . By April 9 , 1959, the wage and classification data earlier submitted was
admittedly out of date. At the April 9, 1959, meeting, the Union requested the
Respondent to supply it with a revised schedule of the wage and classification data
then currently in effect. Although the Respondent promised to supply such in-
formation , it never did . When the matter came up again at the following meeting
almost 3 months later, the Respondent stated that it was still working on the data
and did not yet have it ready. At the same time, the Respondent announced that it
was considering a new wage proposal which would provide for a wage incentive
plan tied to classification wage rates . The Respondent promised to present this
plan to the Union when ready. The next and final meeting , on July 30, 1959, took
place after the end of the strike . Although the Union stated at that meeting that it
did not know what the Respondent 's wage rates were , the Respondent still failed to
submit the wage and classification data it had promised more than 4 months before.
As for the incentive plan, the Respondent expressed uncertainty as to when it could
have it ready. As will appear below, the Respondent never did submit the plan to
the Union, but little more than 2 months later , without further consulting the Union,
unilaterally placed such a plan in operation.
14 The Union 's proposal had provided for a sharing of expenses The Respondent's
previously submitted arbitration clause was silent on that subject
is At the meeting of July 30, 1959, the Respondent in response to the Union's protest,
stated that it was "not necessarily wedded" to the bank president as an arbitrator
16 The findings in this paragraph are based upon credited testimony of McLaughlin. The
union representatives testified that they had no recollection of any such lists having ever
been presented.
4(
M" SYSTEM, INC., ETC. 543
Eckstein testified that the Respondent did not submit the wage and classification
data requested by the Union on April 9, 1959, because an impasse had been reached,
presumably after the meeting of July 30, 1959. But that does not explain the long
delay between April 9 and July 30. The Union was clearly entitled to the informa-
tion requested, and the Respondent never claimed otherwise.
D. Other conduct bearing on the Respondent's alleged refusal to bargain
1. Inducements to employees to work during the strike
After the strike began, the Respondent offered certain employees increased wage
rates as an inducement to them to work during the strike. Uncontradicted testimony
establishes two specific instances where that was done. One involved employee
Charles Wincher, a striker, who shortly after the strike began was offered a 15-cent
wage increase by his foreman, Duke Pettway, if he would return to work. The other
involved R. C. Dunn, who had worked for the Respondent as a molding machine
operator from January 3, 1955, to February 5, 1958, when he had voluntarily quit.
At the time Dunn quit his wage rate was $1.40 an hour. This also was the wage rate
set out for a molding machine operator in a wage schedule submitted by the
Respondent to the Union on July 18, 1958. Shortly after the start of the strike,
Foreman Warren Hart, acting on the specific instructions of Superintendent John
Lisky, called on Dunn and offered him $1.50 an hour if he would return to work.
Both Wincher and Dunn, notwithstanding the offers made to them of increased
earnings, declined to go to work across the picket line.
2. Individual unilateral wage increases
As has earlier been noted, the Respondent before the advent of the Union followed
the practice of giving wage increases on an individual merit basis. Such raises were
granted upon the recommendation of the foremen, approved by higher management.
There was, however, no formalized merit system with minimum and maximum
rates for given jobs, provisions for periodic review, or objective relative rating
standards in effect. Although an employee's ability and efficiency were important
factors in determining whether he should be recommended for an increase, the
foremen also took into account extraneous considerations inherent in individual
bargaining, for example, whether the employee had asked for a raise and whether
the employee was likely to quit if he were not given it.
In November 1957, following the Union's certification as collective-bargaining
representative, the Respondent discontinued its earlier practice of granting individual
merit increases. The foremen were told that they could no longer grant merit in-
creases because of the Union. The practice of granting merit increases was not
renewed until after the strike began. The earliest date on which individual wage
increases were again given was October 11, 1958. Between that date and August 15,
1959, the Respondent granted some 57 individual wage increases, all but 4 of them
prior to July 30, 1959, while the parties were still engaged in negotiations. The
increases varied in amounts from 5 cents an hour to 35 cents an hour.17 The sub-
stantiality of the number granted merit increases is measurable in part by the size
of the Respondent's average production and maintenance payroll-about 170 em-
ployees. Though figures are not available, it is quite clear that the percentage of
older employees granted such increases was far greater than that indicated above.
The record shows that the Respondent had an extraordinarily high turnover rate
during the period and many newly hired employees.18 Credible evidence in the
record shows, moreover, that during this period there were other employees who
were given paper transfers to higher paying jobs, although they continued thereafter
to perform the same work tasks as before.
The Respondent does not dispute that it granted the aforesaid individual wage
increases unilaterally, without negotiating with the Union as to the selection of those
"There is evidence reflecting that merit was not the only factor taken into account in
deciding who was to receive an increase. Thus, former Foreman Hart credibly testified
that the name of one of the employees whom he had recommended was "scratched" only
because that employee had been absent a few days when the strike began
is There is evidence suggesting that some of the new hires may have been paid at rates
higher than those previously paid for comparable work For example, as has been shown
above, R C. Dunn, a former employee, was asked at the beginning of the strike to return
to work at an hourly rate 10 cents higher than he had previously earned Another
former employee, Michael Buxton, testified that he was fired on March 3, 1959 for violat-
ing a plant rule, and rehired several months later at an hourly rate 5 cents higher than
his previous rate.
544 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to be granted increases, the amount of the increases to be granted, or objective stand-
ards for the determination thereof. The Respondent nevertheless contends that it
was justified in taking such unilateral action, according to it, both because an
impasse had been reached on merit increases prior to October 11, 1958, and because
the Union had theretofore disclaimed any desire to be consulted about the merit
increases, thereby waiving any right it might otherwise have had to object thereto.
Evaluation of the Respondent's contentions requires the consideration of additional
facts.
Prior to the meeting of August 28, 1958, there was no discussion at all of merit
increases, except in the context of the Respondent's proposed management preroga-
tives clause. The Respondent never deviated from its contract demand that merit
increases be left as a matter for its unilateral, exclusive, and nonreviewable determi-
nation. The possibility of individual merit increases as an alternative to a general
wage increase, however, was brought up by the Respondent for the first time on
August 28, 1958. This was after a strike had been voted, but before the actual
strike date-August 29, 1958-had been set. Near the end of the meeting that day,
the Respondent reiterated its unwillingness to negotiate an across-the-board increase
because of its stated policy to grant increases on an individual merit basis only. In
response, Harris for the Union stated that since he had to leave shortly he was not
prepared to negotiate on a merit basis that day. The following colloquy then ensued:
Mr. McLAUGHLIN: There may be individuals or individual instances that the
Company feels like are entitled to merit wage increases, and if there are such
individuals-I do not know at this point who they are-but if there are, we will
be glad to submit these individuals to you if Mr. Eckstein has individuals he
wants to raise.
Mr. HARRis: That is not acceptable to us. We are not bargaining for indi-
viduals but across the board for the people and we are going to try to represent
all of them as fairly and honestly as possible.
Mr. McLAUGHLIN: Mr. Eckstein has mentioned certain ones that he feels are
entitled to a merit increase in wages. The Company is not opposed to allow-
ing any one an increase in wages that they feel merit it. The Company pro-
poses to grant in those cases individual raises. Is it your desire that those indi-
viduals be submitted to you?
Mr. HARRis: We want to talk about an overall increase.
Mr. McLAUGHLiN: You don't desire any individual cases submitted to you?
Mr. HARRIS: Not with you being the sole ones to decide.
At the next meeting on September 24, 1958, McLaughlin once again stated that it
was not the Respondent's policy to grant increases except on an individual merit
basis. He added that the Respondent "would be happy to talk about wage increases
for certain individuals" were the Union not unwilling to do so. Farmer, now repre-
senting the Union, made clear that the Union would not reject discussions along that
line. "I would like to get an idea of how many people [you have in mind]," he
said, "so maybe we could come to something." McLaughlin and Eckstein answered
that they did not have that information available, that they only knew that a substan-
tial number of employees, whom the Respondent thought deserving, perhaps some
25 in number, had asked for increase, and that the Respondent had "lost good help
that went other places because we couldn't give them more money." The Respond-
ent did not at this meeting supply the names or actual number of the individuals to
whom it desired to give merit increases, nor offer to discuss with the Union any
standards or criteria for the allowance of its proposed merit increases.
At the next meeting, on September 29, 1958, McLaughlin, in response to a ques-
tion by the conciliator, stated that the Respondent had now determined that there
were 31 employees "presently working" to whom it was "willing to give a wage in-
crease, varying from 5 to 10 cents." McLaughlin further stated that the 31 men-
tioned did not include any of the striking employees, but added that there might be
some to whom the Respondent might desire to give merit increases in the future.
Later in the meeting, the Respondent made clear that it considered the choice of
those to be granted merit increases a matter for its unilateral determination, and not
one to be negotiated on, except possibly as to number. This is evidenced in part by
the following colloquy:
Mr. WELLS:'9 On the merit increases, are you proposing that in your con-
tract? Are you proposing merit increases?
'A Phil Wells , an AFL-CIO representative, participated on behalf of the Union at the
September 29, 1958, negotiating session.
"M" SYSTEM, INC., ETC. 545
Mr. McLAUGHLIN: That the Company has the right to give merit in-
creases; yes, sir.
Mr. WELLS: Well, that is not my question. The point is are you con-
sidering-are you proposing, in your contract, merit increases?
Mr. McLAUGHLIN: Well, what we have mentioned then, a little bit ago
about thirty-one, I found out I am not right. Management told me there
are twenty-eight presently working that the Company proposed to give merit
increase.
Mr. WELLS: Well, would you be willing to submit the names of the per-
sons involved?
Mr. McLAUGHLIN: For reasons involved, no sir. I think you can understand
why we don't feel we can do that.
Mr. WELLS: In other words you are proposing unilateral increases of 5 to 10
cents an hour.
Mr. McLAUGHLIN: Well, if you wish to call it unilateral.
The Union at this meeting expressly declined to consent to the Respondent's pro-
posed grant of individual merit increases limited to nonstriking employees. The
Union insisted on knowing whether the Respondent was also willing to grant merit
increases to any of the striking employees, and if so who they were, stating that it
must have that information as a basis for further discussions on the subject of indi-
vidual merit increases. The Respondent's only response was that it was not obliged
to consider merit increases for employees not working at the time. The subject of
individual merit increases was dropped, after the Union pointed out that it saw no
purpose in discussing an item the Respondent regarded as not bargainable in any
event.
On the basis of the facts set out above, I think it quite clear, and I find, con-
trary to the Respondent's assertion, that the Union did not waive its right to have pre-
sented to it the names of those thereafter given merit increases, nor did it otherwise
release the Respondent from its obligation to bargain on the subject of merit increases.
To support its assertion, the Respondent relies upon Harris' remarks at the meeting
of August 28, 1958, as set out above. But a fair reading of Harris' statements re-
flects that Harris was then simply taking the position that the item of wages be dis-
cussed on an overall basis and not in terms of individual merit increases, particularly
since it was the Respondent's stand that merit increases were not bargainable. In any
event, even if Harris' remarks on August 28 might reasonably have been construed
otherwise at that time, the Union at the next two meetings, both of which occurred
prior to October 11, 1958, made it crystal clear, that it had no intention of acceding to
merit increases except on a negotiated basis. Nor do I find merit to the Respondent's
further assertion that it was justified in granting unilateral individual wage increases
after October 11, 1958, because an impasse had theretofore been reached. To begin
with, the question of merit increases was closely tied in with the issue of wages gen-
erally, and this remained an open item in the negotiations almost to the end of the
bargaining meetings. Moreover, if any stalemate occurred with respect to merit in-
creases, it was provoked by the Respondent's bad-faith bargaining. Although the
Respondent professed a willingness at the meeting of August 28, 1958, and again at
the beginning of the following meeting, to bargain with the Union for wage increases
on an individual merit basis, its subsequent conduct leaves no doubt that it did not
in truth intend to do so. I am satisfied, rather, that the Respondent's true purpose was
to attempt to maneuver the Union into a position which would allow the Respondent
with legal immunity to grant unilateral wage increases to nonstriking employees
After the Union indicated a disposition to at least consider the possibility of individual
merit increases as an alternative to a general wage increase, the Respondent made clear
that it was unwilling to do more than state the number of employees to whom it desired
to grant merit increases, and that beyond that it had no intention of negotiating on the
subject. Certainly the Respondent cannot claim that it bargained in good faith to an
impasse on merit increases when it declined to furnish the Union with even such basic
information necessary to an intelligent appraisal of the Respondent's position as the
identity of those to whom it proposed to grant them.
3. Instigation of employee petition repudiating the Union
The following appears from the credited testimony of Earl S. Williams and Warren
Ed Hart, both formerly employed as foremen at the Respondent's plant: At a meet-
ing of foremen in early 1959, General Manager Eckstein stated that he wanted to
586439--61-vol. 12 9-3 6
.546 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
initiate the circulation of an employee petition repudiating the Union. Eckstein also
told the foremen that he wanted to get word to the men that the only way the Com-
pany could put into effect a wage incentive plan providing an opportunity for in-
creased employee earnings was to get a petition through repudiating the Union. He
suggested that the foremen might convey such word to the employees by engaging
in discussions among themselves at times and places where they would be likely to
be overheard by employees. Eckstein also inquired if the foremen knew of any em-
ployees who could be trusted to circulate a petition without involving management.
One of the foremen, Floyd Sanders, stated that he knew just the right man for that
job-Milton C. Smith. Eckstein then instructed Sanders to find out from Smith
whether Smmth would be willing to start such a petition and then to let Eckstein
know.zo
Later, Hart observed Smith circulating among employees what appeared to him
to be a petition.21
Eckstein conceded that in early 1959 he found an employee petition on his desk,
but disclaimed any knowledge as to how it got there. The petition was produced by
the Respondent. It states that the subscribers thereto do not wish to be represented
by the Union, but desire to have their own committee represent them in all their
dealings with the Company. The first signature on the petition is that of Milton C.
.Smith.
The Respondent never did anything about the petition. McLaughlin testified that
when he was informed by Eckstein about the receipt of the petition, he advised Eck-
stein to file the petition away; that it was his opinion that nothing should be done
about the petition until an unfair labor practice proceeding then pending before
the Board was finally disposed of; and that the less the Company knew about it at
that particular time "the better they would be insofar as legal responsibilities were
concerned."
4. Unilateral institution of incentive wage plan
At one time the Respondent had an incentive wage plan which allowed employees
through increased group effort to earn more than their hourly rates of pay. The
operation of that plan was discontinued at about the time the Union was certified as
bargaining representative.
At the bargaining meeting of June 3, 1959, the Respondent informed the Union
that it was working on a new incentive plan which would allow the employees to
take home more money. The Union expressed interest, indicating that if the Re-
spondent proposed a bonus plan with an opportunity to employees to earn more
money it would be an aid in reaching agreement. The Union requested the Respond-
ent to present the plan to it when ready, and the Respondent agreed to do so. Eck-
stein stated that the Respondent expected to have the plan ready for submission to
the Union in substantially less than 6 weeks time. Later at that same meeting,
Cameron for the Union expressed optimism that the parties were near agreement,
with only a couple of contract issues remaining to be resolved. He announced that
he would recommend to the employees that -they terminate the strike. The strike
was in fact terminated the following day. The next and last bargaining meeting was
held on July 30, 1959. As has already been noted, the Respondent after the end of
the strike submitted to the Union rewrites of its management prerogatives and griev-
ance procedure clauses which broadened rather than reduced the area of dispute.
As to wages, the only other item still open, McLaughlin submitted no new pro-
posal, advising the Union that he was not in a position to do so at the time because
he had not had an opportunity to discuss the matter with Eckstein as thoroughly as
he would like. At the July 30, 1959, meeting the Respondent failed to submit to the
Union any proposal with regard to a wage incentive plan, as it had indicated at the
previous meeting it would do
In early October 1959, little more than 2 months after the last negotiating meet-
ing, the Respondent put into operation at its plant a new wage incentive system
affecting all employees in the bargaining unit. According -to Eckstein the plan was
put into effect on a trial basis, but it was still in operation on December 9, 1959, when
IOEckstein denied making the statements attributed to him by Williams and Hart, but
I do not credit his denial . Williams and Hart , both disinterested witnesses, impressed
me by their demeanor and overall testimony as reliable. Although they named some six
other members of management , including the plant superintendent , who were present at
the foremen ' s meeting , the Respondent called none of them to corroborate Eekstein's denial.
21 One of the employees whom Smith contacted , Michael Buxton , was called by the
General Counsel to testify as to the contents of the petition. Buxton's testimony, how-
ever , was patently confused and garbled , and is not relied upon.
"M" SYSTEM, INC., ETC. 547
the hearing closed. The institution of the bonus plan resulted in increased employee
earnings , at least in certain departments , in one department as much as 16 cents an
hour.
It is not disputed that the incentive plan system instituted in October 1959 was
placed in operation by the Respondent unilaterally , without prior submission to or
consultation with the Union.
E. Analysis and concluding findings
The central issue is whether the Respondent in its negotiation with the Union per-
formed the obligation Section 8(d) imposes mutually upon employers and employee
representatives "to meet at reasonable times and confer in good faith with respect
to wages, hours, and other conditions of employment , or the negotiation of an agree-
ment, or any question arising thereunder ...." While not always easy of appli-
cation, the guiding principles for the assessment of good faith are well established.
Good-faith bargaining requires more than "purely formal meetings between manage-
ment and labor, in which each maintains an attitude of `take it or leave it'; it pre-
supposes 'a desire to reach ultimate agreement to enter into a collective bargaining
agreement 11 22 To be sure , it does not require the yielding of positions fairly main-
tained. But at the same time it does contemplate a willingness to enter into dis-
cussions with an open and fair mind and a sincere desire to resolve differences and
find mutually satisfactory basis for agreement, consistent with the respective rights
of the parties.23 The provision in Section 8(d), that the obligation to bargain "does
not compel either party to agree to a proposal or require the making of a con-
cession," may not be used as a protective cloak where bad faith otherwise appears.
As the Fifth Circuit Court of Appeals recently observed in N L.R.B. v. Herman Sau-
sage Company, Inc., 275 F. 2d 229, 231-232,
bad faith is prohibited though done with sophistication and finesse.
Consequently , to sit at a bargaining table, or to sit almost forever, or to make
concessions here and there could be the very means by which to conceal a pur-
poseful strategy to make bargaining futile or fail . Hence we have said in more
colorful language it takes more than mere "surface bargaining" or "shadow
boxing to a draw" or "giving the Union a runaround while purporting to meet
with the Union for purpose of collective bargaining."
Good faith , or the want of it, is concerned essentially with a state of mind. There
is no shortcut to a determination of whether an employer has bargained with the
requisite good faith the statute commands . That determination must be based upon
reasonable inference drawn from the totality of conduct evidencing the state of mind
with which the employer entered into and participated in the bargaining process.
The employer's state of mind is to be gleaned not only from his conduct at the bar-
gaining table , but also from his conduct away from it-for example, conduct re-
flecting a rejection of the principle of collective bargaining or an underlying purpose
to bypass or undermine the Union manifests the absence of a genuine desire to com-
pose differences and to reach agreement in the manner the Act commands. All
aspects of the Respondent 's bargaining and related conduct must be considered in
unity, not as separate fragments each to be assessed in isolation. As was stated by
Mr. Justice Frankfurter in his separate opinion in N.L.R.B. v. Insurance Agents'
International Union, supra,
. the significance of conduct, itself apparently innocent and evidently in-
sufficient to sustain an unfair labor practice may be altered by imponderable
subleties at work. . . Activities in isolation may be wholly innocent , lawful
and "protected" by the Act , but that ought not to bar the Board from finding, if
the record justifies it, that the isolated parts "are bound together as parts of a
single plan [ to frustrate agreement]. The plan may make the parts unlawful." 24
Applying to this case the principles set out above , I am led to the conclusions that
the General Counsel has more than adequately supported the refusal -to-bargain
allegation of his complaint . I reach that conclusion not on the basis alone of the
positions taken by the Respondent in the course of the negotiations-though I regard
them in context with the Respondent's other conduct as supporting an inference of
" NLRB v Insurance Agents' International Union, AFL-CIO (Prudential Ins. Co.),
361 US 477
"Ibid See also Globe Cotton Mills v N L R B., 103 F. 2d 91 , 94 (C.A. 5 ) ; L. L. Majure
Transport Company v . NL.R.B., 198 F 2d 735 (CA. 5).
u Quoting from Swift & Co. v. United States, 196 U.S. 375, 376.
548 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
faith-but on the totality of the Respondent's conduct both at and away from the
bargaining table, taking particularly into account the cumulative force of the con-
siderations to be discussed below.
First: The issue of the Respondent's good faith at the bargaining table must be
evaluated against the backdrop of other conduct of the Respondent, disclosing, it is
found, an attitude of unrelenting hostility to the Union and a disregard of employee
statutory rights. As noted above, the Board has already adjudicated the Respondent
guilty of unfair labor practices in two earlier proceedings. One, arising prior to the
Union's certification, grew out of the Respondent's unlawful efforts by various means
to defeat organizrtion of the employees into the Union. The other involved the
discharge of James Walsh, chairman of the Union's shop committee, a discharge
found by the Board to have been discriminatorily motivated by antiunion con-
siderations. Walsh's discharge occurred on August 27, 1958, in the midst of the
negotiations. Moreover, in early 1959, while negotiations were still in progress, the
Respondent instigated the circulation among its employees of a petition looking
toward the Union's ouster as bargaining representative. As has been stated, good
faith involves a question of motive or state of mind that must be determined by
inference drawn from all the surrounding circumstances. The Respondent's afore-
said unlawful activities are clearly relevant to that question. N.L.R B v Reed &
Prince Manufacturing Company, 205 F. 2d 131, 139-140 (C.A. 1). It is difficult to
reconcile the Respondent's efforts to defeat its employees' statutory rights with a
simultaneous sincere desire on its part to attempt through the give and take of col-
lective bargaining to find some mutually satisfactory basis for agreement with the
Union The Respondent's instigation of the repudiation petition constitutes par-
ticularly compelling evidence that the Respondent, at least at that time, was more
bent on destroying the Union than on reaching a contractual accord with it
Second: A striking aspect of this case is that during the course of more than 11/2
years' negotiations there were only 18 bargaining meetings. As the record shows,
the long delays and often canceled meetings were attributable in large part to the
expressed inability of the Respondent's representatives, because of other engage-
ments they considered of more pressing importance to shorten the time lag between
meetines. as was frequently urged by the Union. Specific reference is made to the
detailed findings above relating to the more than 2-month lag between the January
22 and March 25 meetings, the delay of some 8 weeks between the meetings of
April 9 and June 3, 1959, and the equal delay between the meeting last mentioned
and the final meeting of July 30-all within the Section 10(b) period. It is quite
clear from the findings made that such long delays would not have occurred, but
for the inability or unwillingness of the Respondent's representatives to meet at
earlier dates requested by the Union.25
Section 8(d) imposes a mutual obligation on negotiating parties "to meet at
reasonable times." Section 204 of the Labor Management Relations Act, in order
"to prevent or minimize interruptions in the free flow of commerce," calls on
employees and unions alike to "arrange promptly" for conferences and to endeavor
"expeditiously" to bring about a resolution of disputes over contract terms in which
they may he engaged The duty to do so is part of the obligation to bargain. In
the case of 1. H. Rutter-Rex Manufacturing Company, Incorporated, 86 NLRB 470,
the Board stated:
The obligation to bargain collectively surely encompasses the affirmative duty
to make expeditious and prompt arrangements, within reason, for meeting and
conferring Agreement is stifled at its source if opportunity is not accorded
for discussion or so delayed as to invite or prolong unrest or suspicion. It is
not unreasonable to expect of a party to collective bargaining that he display
a degree of diligence and promptness in arranging for the elimination of obstacles
thereto. comparable to that which he would display in his other business affairs
of importance.
The conduct of prompt and expeditious negotiations is a matter of importance
to a union as well as of public concern. As the Board had occasion to observe in
Burgie Vinegar Company, 71 NLRB 829, a delay in collective bargaining-
entails more than mere postponement of an ordinary business transaction,
for the passage of time itself, while employees grow disaffected and impatient
25 It is true as the Respondent stresses, that all meeting dates were ultimately set by
agreement with the Union But the significance of that fact is not readily apparent It
takes two to make a meeting The factual findings made above show that the Union did
urge meetings at shorter intervals and often complained about the delays Short of
breaking off negotiations entirely, there was nothing else the Union could do but agree
C "M" SYSTEM, INC., ETC. 549
at their designated bargaining agent's failure to report progress, weakens the
unity and economic power of the group, and impairs the Union's ability to
secure a beneficial contract. The Act . . . does not permit an employer to
secure, even unintentionally, a dominant position at the bargaining table by
means of unreasonable delay.
The record here quite clearly supports a finding that the Respondent, in arranging
meetings with the Union failed to display the degree of diligence that proper per-
formance of its bargaining obligations required. This is so whether or not the
delays were inspired by a deliberate scheme to engage in dilatory tactics. One
may sympathize with the problems of the Respondent's negotiator in fitting the
negotiating meetings into the schedule of his busy law practice, but this provides
the Respondent with no legal excuse for the consequent inordinately long delays
tending to impair employee statutory rights. Labor relations are urgent matters
too. If McLaughlin's other activities made it impossible for him to devote adequate
time to reasonably prompt and continuous negotiations, it was the Respondent's
obligation to furnish a representative who could. The duty to bargain in good
faith includes the duty to be available for negotiations at reasonable times as the
statute requires. That duty is not discharged by turning over the conduct of negotia-
tions to one whose other activities make him not so available. See, Cummer-
-Graham Company, 122 NLRB 1044; Derenson's, 104 NLRB 273 .26
I find that at least during the period from April 9 to July 30, 1959, the Respondent
failed to exercise the degree of diligence expected and required of it by the statute
in providing the Union an opportunity to meet for the purpose of collective bargain-
ing. This alone might properly be viewed as supporting an independent violation
of Section 8(a)(5). It is in any event cogent evidence that the Respondent was
not then bargaining with the requisite good faith. The dragging of feet in negoti-
ations scarcely displays a bona fide and sincere purpose to reach agreement.
Third: The Respondent's course of conduct in the negotiations, particularly when
viewed in context with its other conduct elsewhere considered, reflects that it ap-
proached the bargaining table with the attitude of an employer who remains
unreconciled to his employees' selection of a bargaining representative, who is
loathe to accept the collective-bargaining principle, who is determined not to surrender
in material respects the full freedom he previously enjoyed to regulate unilaterally
his labor relations, and who has no serious desire to reach agreement, except
perhaps on a basis which would subvert the Union's bargaining status.
As has been seen, the Respondent yielded nothing to the Union on "cost" items,
agreeing only to maintain in effect the individual wage rates and fringe benefits
which it had itself established prior to the advent of the Union. As for noncost
items, the only provisions of benefit to the Union or employees that the Respondent
was willing to write into the contract-other than provisions which embodied no
more than the law requires-were those relating to limited bulletin board privileges
and employee seniority. Actually, however, under the seniority provisions it pro-
posed, the Respondent would have given up little, if any, of its former absolute
-control over job tenure. Job preference rights were made dependent not only on
length of service, but also on skill, ability, and willingness to work. The added
factors were by their very nature such as to allow a wide latitude for the exercise
of employer discretion. And there was little the Union might do by way of
effective protest if it took issue with the exercise of such discretion. For, under
the Respondent's other proposals, the Union would be bound, without access to any
other means of relief, to accept management's determination at the top level of the
grievance procedure as "final and binding"; moreover, seniority could always be
broken by a discharge for "just cause," and the determination of "just cause" was
made a management prerogative.
Although offering the Union substantially nothing of value in return, the Respond-
ent tenaciously insisted as a condition to agreement on the inclusion of other clauses
through which it sought to undercut the representative status of the Union by
imposing shackles on the Union's exercise of its statutory rights, while reserving
for itself virtually complete and unreviewable autonomy over wages, job tenure,
and other significant terms and conditions of employment.
'0 It is to be noted, moreover, that the long delays between the meetings of January 22
and March 25, 1959, and between the meetings of April 9 and June 3, 1959, occurred
while a strike was in progress Proper concern for the statutory policy to minimize work
interruptions, let alone a good-faith desire to bring about a settlement of the contract
dispute, should have led the Respondent at least during that period to arrange meetings
as expeditiously as possible in compliance with the Union's expressed wishes.
550 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Thus, the Respondent, by means of its proposed management prerogative clause,
as enlarged upon in the course of the negotiations, insisted on retaining to itself
,absolute unilateral control over such matters as the granting of merit-wage in-
creases, the making and changing of shop rules involving terms and conditions of
employment, and the determination of what was "just cause" for discharge. As to
such matters, of vital importance to legitimate employee interests, the Respondent's
proposals would not only have left the Respondent free to act independently without
consulting the Union, but would have precluded the Union from protesting employer
action through the grievance procedure. The breadth of the Respondent's proposed
management prerogatives clause was such as to bar the Union from providing
the employees with any representation at all on most matters that might expectably
become the subject of employee grievances. But even as to those matters left
reviewable under the grievance procedure, the Union's power to provide effective
representation would have been curbed by the requirement in the Respondent's
grievance procedure clause that management 's decision at the top level must be
"final and binding."
Nor was the Respondent at any time willing to allow the Union any other means
of recourse or review. The Respondent insisted throughout the negotiations that
the contract must contain a rigid no-strike clause, applicable even where the
grievance procedures were exhausted or where the Respondent itself had trans-
gressed contract provisions. 27 But while thus insisting as a contract "must" upon the
Union's surrender of the employees' statutory right to strike, the Respondent
adamantly declined in consideration for such surrender to consent to arbitration,
the generally recognized substitute method for assuring industrial peace without
disabling a union from carrying out its statutory responsibility adequately to repre-
sent employees in the redress of grievances. As the Supreme Court stated in
Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455: "Plainly the agreement
to arbitrate grievance disputes is the quid pro quo for an agreement not to strike."
The Respondent's no-strike , no-arbitration position, particularly when viewed in
the light of other record facts, suggests that the Respondent was more concerned
with emasculating the Union's effectiveness as an employee representative than
with achieving contract stability. The Respondent, to be sure, did propose, after
more than 9 months of negotiations, a "limited arbitration" provision. But, as has
been seen, the provision it proposed was so circumscribed by qualifications and
restrictions as to make arbitration, as a practical matter, rarely available to the
Union, and, even where available, effective only as a rubber stamp for manage-
ment's decisions. The very fact that the Respondent chose to submit by way of
purported compromise, and thereafter to insist upon, a "limited arbitration" clause
so useless and so patently unacceptable is in itself an indication that the Respondent
was engaging in tie semblance rather than the substance of bargaining.
In appraising the Respondent's bargaining positions, I do not hold that whenever
an employer insists upon a management prerogatives clause covering otherwise bar-
gainable terms and conditions of employment, or upon a no-strike clause without
accompanying arbitration, this automatically falls within the condemnation of the
Act as a per se refusal to bargain. I am fully aware that it is not for the Board to
"sit in judgment on the substantive terms of collective bargaining agreements "
N L,R B v. Reed & Prince Manufacturing Company, 205 F. 2d 131, 134. That does
not mean, however, that bargaining positions may not be given evidentiary con-
sideration, along with all other relevant circumstances, in determining whether an
employer by the totality of his conduct satisfied the good-faith bargaining standards.
27 As originally proposed, the no-strike clause would have imposed severe money penalties
on the Union even where work stoppages occurred without fault of the Union or where
only nonmembers were involved In N.L R B. v Corsicana Cotton Mills, 178 F 2d 347,
at 349, the Fifth Circuit Court of Appeals suggested that it substantially identical demand
supported an inference of bad faith. See also, Cumm,er-Graham, Company, 122 NLRB
1044 True, this provision was ultimately dropped, but only after it had been insisted
upon through some 9 months of bargaining. But the Respondent's ultimate recognition
of a point which should have been settled at the outset cannot obscure the fact that its
interim insistence upon it through many months of negotiations improperly impeded bar-
gaining. What has just been said is oven more slr'kingly true of the T,ospon"'ent's
patently unlawful demand, also subsequently withdrawn, fora clause which would have
imposed restrictions on the Union's selection and composition of its own grievance com-
mittee. See N.L R B v. Roscoe Skipper, Inc, 213 F 2d 793, 794 (C.A 5) , N L R R. v
Marton G. Denton, et at., d/b/a Marden Mfg Co, 217 F 2d 567, 570 (C A. 5), footnote 7.
i"M" SYSTEM , INC., ETC. 551
Good faith or the want of it is a state of mind , and positions taken at a bargaining
table provide at least one manifestation of the state of mind with which negotiations
are conducted . As declared by Chief Judge Magruder , speaking for the First Circuit
in N.L.R .B. v. Reed & Prince Manufacturing Company, supra , at page 134:
It is true as stated in N.L .R.B. v. American National Insurance Co., 343 U.S.
395, 404, that the Board may not "sit in judgment on the substantive terms of
collective bargaining agreements ." But at the same time it seems clear that if
the Board is not to be blinded by empty talk and by mere surface motions
of collective bargaining , it must take some cognizance of the reasonableness of
the positions taken by an employer in the course of bargaining negotiations.
Appraised in context with other facts in this case , elsewhere considered, the
Respondent 's basic bargaining position , I am persuaded , manifests that the Re-
spondent approached the bargaining table with a frame of mind antithetical to
good-faith bargaining . The Respondent coupled a determination to yield nothing
of substance to the Union with an insistence upon the inclusion of contractual pro-
visions, which if accepted , would have amounted to a formal negation of the
collective -bargaining principle in major areas , would have undermined to a sub-
stantial degree the Union 's ability adequately to fulfill its representative responsi-
bilities to the employees who had chosen it, and would thereby have served to
discredit the Union in the employees ' eyes. The terms on which the Respondent
conditioned agreement were such as to leave the Union better off without a contract
than with one. Even without a contract , the Union , under the statute, would have
had the right , for example , to be consulted in advance and to bargain about merit
increases and the making or altering of shop rules relating to working conditions;
it would have had the right to be heard on whether "just cause" existed for discharge
or disciplinary action; it would have been at liberty, if it so chose , to exercise its
statutory right to strike without being obliged to accept the Respondent 's determina-
tions on all grievances as "final and binding ." All of such statutory rights the
Union would have been required to surrender under the Respondent 's proposals,
without receiving anything of substance in return, and the Respondent would have
been left free to act unilaterally in the more significant areas involving normally
bargainable subjects. The Respondent 's bargaining position , from which it never
yielded in any material respect, does not in my view reflect the state of mind of an
employer who approaches the bargaining table "with an open mind and purpose to
reach agreement consistent with the respective rights of the parties " L. L Majure
Transport Company v . N.L.R.B, 198 F . 2d 735, 739 (C.A. 5). It is no answer to
say that the Respondent would have been willing to enter into a contract , if only the
Union had accepted its terms . The terms the Respondent proposed were such that
the Union could not accept them without violating its trust to the employees it
represented . The Respondent must have known , and therefore inferentially have
intended , that its proposals were such as not to have the slightest chance of accept-
ance by any self-respecting union. This provides added support for an inference
that the Respondent was not negotiating with a genuine purpose to find common
ground for agreement . N.L.R.B . v. Reed & Prince Manufacturing Company, supra,
at page 139 ; L. L. Majure Transport Company, 95 NLRB 311, 313.
The Respondent 's position on the wage issue warrants special comment because
more clearly than anything else it reveals the Respondent 's bargaining frame of mind.
It will be recalled that the Union sought and the Respondent refused a general
wage incerase . This would be of no significance in itself, but for the attitude with
which the Respondent received , considered , and rejected the demand . The Re-
spondent refused to give any reason for its rejection , other than that it was the
Company's practice not to grant across -the-board wage increases , only individual
merit raises . The reason given was scarcely such as to provide a proper basis for
discussion , such as good-faith bargaining requires . As the Board has had occasion
to observe , an employer "relying simply on existing practice as a reason for not
agreeing to union proposals [ fails ] to fulfill its obligation `to discuss freely and
fully [the parties] respective claims and demands, and , when these are opposed, to
justify them on reason .' " 28 While thus refusing ,in effect to negotiate with the Union
on the merits of an across-the -board wage increase, the Respondent insisted that
the right to grant merit increases must be left, as in the past, a matter for its unilateral
exclusive, and unreviewable determination . When faced with a showdown, the
21 Montgomery Ward & Company, 37 NLRB 100, 123, quoting from N.L.R B. v. George P.
Pilling & Son Co., 119 F . 2d 32 ( C.A. 3).
552 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent refused to negotiate with the Union on individual merit increases.29
As has been seen , the Respondent had no formulated objective standards for the
granting of merit increases; such increases under past practice had depended largely
on the application of considerations indigenous to individual bargaining. The
Respondent at no time proposed to write into the contract standards that would
control its selection of those who might be granted merit increases or the range of
such increases . The Respondent 's refusal to consider on its merits the Union's
demand for a general increase assertedly because such an increase contravened its
past practice , coupled with its insistence on reserving to itself, without limiting
standards , the right in its own discretion to raise individual wage rates by unilateral
action, may fairly be viewed as tantamount to a refusal to bargain at all on the
subject of an upward revision of wage rates. See N.L.R .B. v. Berkley Machine
Works & Foundry Company, Inc., 189 F. 2d 904 (C.A. 4). Whether or not viewed
as a per se refusal to bargain , the Respondent 's unwillingness to accept the principle
of collective bargaining on a subject so vital to employee interests as wages, discloses,
at the very least, a state of mind antithetical to good faith bargaining.
Where, as here , an employer is unwilling to yield anything of substance to a
union, insists upon reserving absolute unilateral control over wages and other
significant terms and conditions of employment , and demands that the Union bind
itself to a no-strike clause, but refuses arbitration , the Board in the past has viewed
such circumstances as weighty evidence tending to support an inference of bargaining
bad faith . See White's Uvalde Mines, 117 NLRB 1128, enforcement denied in part
255 F. 2d 564 (C.A. 5); Cummer-Graham Company , 122 NLRB 1044 . See also
L. L. Mature Transport Company, 95 NLRB 311, enfd. 198 F . 2d 735 (C.A. 5);
Dixie Corporation , 105 NLRB 390. The inference of bad faith that I draw in this
case, however, does not rest alone on the bargaining positions taken by the Re-
spondent . It is also buttressed by the other considerations to which reference has
earlier been made as well as those to be set out below 30
Fourth: As found above , the Union , at the meeting of April 9, 1959 , requested
the Respondent to supply it with a revised schedule of wages and classification data
then currently in effect. Although admittedly relevant to the negotiations then
underway , the Respondent never furnished the Union with the requested information.
The Respondent has presented no adequate excuse for its failure to do so. The law
is well settled that an employer 's failure to furnish upon the request of a bargaining
agent wage and personnel data directly pertinent and relevant to the bargaining
agent's discharge of its duties as an employee representative supports an inference
of a failure to bargain in good faith. N L R B. v. Truitt Mfg. Co., 351 U.S. 149, 152.
Fifth: The Respondent 's unilateral action in granting individual wage increases
to a substantial number of its employees on and after October 11, 1958, while nego-
tiations were still in progress , provides additional evidence that the Respondent
was not disposed to accord the Union the bargaining status the Act vests in a
majority representative . The law is clear that individual merit increases , no less
than general wage increases , must be negotiated with the bargaining representative.31
The Respondent claims that it was justified in bypassing the Union , contending
that ( 1) a bargaining impasse had been reached , ( 2) the Union had waived objection
to the Respondent's granting the wage increases in question , and (3 ) the increases
were granted in conformity with a company policy and practice established prior
to the advent of the Union . The first two contentions have already been considered
in the subsection above dealing with the pertinent facts For reasons there set forth,
they are rejected as unsupported by the record . The Respondent 's third contention
is likewise rejected . The Respondent 's practice of granting merit increases was
discontinued at the time of the Union 's certification , and thereafter no increases
ire Although at one meeting the Respondent indicated it might be willing to discuss
individual merit increases, its insincerity in that regard was exposed at a later meeting,
when, following an expression of willingness by the Union to enter into discussions along
that line, the Respondent made clear that it considered the choice of those to be granted
merit increa,es a matter for its unilateral determination, and not one to he negotiated
on, except possibly as to number.
30 See N L R B v Pant Milling Company, 258 F. 2d 851 (C.A 5). 360 U S 301, reversing
court below (particularly footnote 10 thereof), and 272 F. 2d 773 (C A 5), enfg 117
NLRB 1277, following remand from Supreme Court
31 N L R B v J H. Allison & Company, 165 F 2d 766 (C.A. 6) • NLRB v. Berkley
Machine Works & Foundry Company. Inc., 189 F. 2d 904 (CA. 4) ; Armstrong Cork
Company v. N.L.R B., 211 F. 2d 843, 847 (C.A. 5).
"M" SYSTEM, INC., ETC. 553
were granted for more than a year until those here in question were put into effect.
Moreover, as already found, the Respondent had no formulated standards of auto-
matic or predictable application for the granting of merit increases, so as to dispense
with the need of bargaining on individual increases. The Board has held that an
employer is not excused from bargaining about merit increases by reason of an
earlier established practice to grant them.32 In any event the circumstances here
were such as to make the Respondent's contention clearly inapplicable.33 It is
found that the Respondent's unilateral action in granting individual wage increases
was in blatant disregard of the Union's right to be consulted concerning changes in
terms and conditions of employment, inconsistent with the principle of collective
bargaining, and further indicative of the Respondent's bargaining bad faith. N.L.R.B.
v. Crompton-Highland Mills, Inc., 337 U.S. 217, 225. Whether viewed as an in-
dependent unfair labor practice, evidence of bad-faith bargaining, or both, the
unilateral wage increases support a refusal to bargain inference. See N.L.R.B. V.
Herman Sausage Co., Inc., 275 F. 2d 229 (C.A. 5).
Sixth: What has just been said with regard to the individual merit increases applies
with equal force to the Respondent's unilateral action in instituting an incentive wage
plan in October 1959. Hibbard Dowel Co, 119 NLRB 1763, 1781, enfd. 273 F. 2d
565 (C.A. 7). Although negotiations had come to a halt prior to October 1959, the
Respondent makes no claim that it was then no longer under an obligation to bargain
with the Union. On the contrary, the Respondent asserts in its brief that the incentive
wage plan was put into effect on an "experimental" basis "in an effort to offer some-
thing on wages to the Union." The fact that the Respondent may have considered the
plan an "experimental" one provides no excuse for its failure to submit it to the Union
for its consideration, in fulfillment of the promise it had made while negotiations were
still in progress. The Respondent's explanation, stated above, is at variance with its
further contention that it was justified in putting the plan into effect unilaterally be-
cause a bargaining impasse had earlier been reached. Clearly there could have been
no impasse on the incentive plan since that plan was never submitted to the Union for
its consideration. Though the parties were then at an impasse on other issues, this did
not justify the Respondent in ignoring the Union; it is at least conceivable that presen-
tation to the Union of the plan, providing added benefits for the employees, might
have proved an entering wedge for breaking the impasse. In any event, the record
shows bargaining had come to an impasse because of the Respondent's failure to bar-
gain in good faith. This alone precludes the Respondent from relying on the impasse
of its own making to excuse the unilateral action it thereafter took.
I find no merit in the Respondent's further contention that the evidence relating to
the incentive wage plan may not now be considered because the plan was put into
operation "long after the filing of the charge, long after the issuance of the complaint
and even after the commencement of the hearing." In Gagnon Plating and Manufac-
turing Company, 97 NLRB 104, 107, the Board disposed of a similar contention, in
words exactly applicable here, as follows:
Nor was the Trial Examiner incorrect in considering the unilateral wage increase
as evidence on the question of the Respondent's refusal to bargain even
though such conduct took place after the issuance of the complaint in this pro-
ceeding. The Respondent did not claim surprise by the introduction of evidence
on this issue. Nor did the Respondent show that it was prejudiced thereby. The
actions of the Respondent on that date were well within the allegations of the
complaint, and, as the duty to bargain in good faith is a continuing one, the issu-
ance of the complaint did not serve to relieve the Respondent of that duty or of
the restrictions of the Act.
See also N L.R B. v. Fant Milling Co., 360 U.S. 301.
In conclusion, I find on the basis of the totality of the Respondent's conduct at and
away from the bargaining table, without, however, giving conclusive weight to any
separate element in this case, that the Respondent on and after August 28, 1958-as
alleged in the complaint-refused to bargain in good faith with the Union as its em-
ployees' certified bargaining representative in the appropriate bargaining unit earlier
described, thereby violating Section 8(a)(5) and (1) of the Act.
There remains for disposition one relatively minor issue. The complaint alleges
as an independent violation of Section 8(a) (1), that during the strike the Respondent
offered individual striking employees wage increases as an inducement to them to
return to work. As reported above, the record shows two instances after the start of
82 Benne Katz . et al , d/h/a Williamsburg Steel Products Co., 126 NLRB 288.
s3 See Armstrong Cork Company v. N L R B , supra, at -p 847
554 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the strike where the Respondent offered employees wages higher than their previous
rates if they would go to work across the picket line. It appears, however, that one
of two employees involved, R. C. Dunn, had left the Respondent's employ some time
prior to the start of the strike. Dunn may not therefore be considered a striker within
the meaning of the specific allegation of the complaint now in question; the evidence
as to him has materiality only as to the 8(a) (5) allegation of the complaint, reflect-
ing further, as it does, the Respondent's disregard of its bargaining obligations in
establishing a new wage rate without reference to the Union. The other employee
involved, Charles Wincher, was a striker, and the incident relating to him does sup-
port the finding now made that the Respondent's solicitation of Wincher to forgo his
strike activity by a promise of benefit was violative of Section 8 (a) (1). Were there
nothing more in this case but this isolated incident, I doubt that it could be regarded
as sufficiently substantial to support a remedial order. However, in the context of
the Respondent's other unlawful conduct herein found, I find that this incident is not
only sufficient to sustain the separate allegation to which it relates, but also to justify
a remedial order based thereon. I so find.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in connec-
tion with the operations of the Company described in section I, above, have a close,
intimate, and substantial relation to trade traffic, and commerce among the several
States, and tend to lead to labor disputes burdening and obstructing commerce and the
free flow thereof.
V. THE REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, it
will be recommended that it cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act.
It has been found that the Respondent has refused in good faith to bargain collec-
tively with the Union as the exclusive representative of the employees in the appro-
priate unit described herein. It will therefore be recommended that the Respondent
bargain collectively, upon request, with the Union as the exclusive representative of
the employees in the appropriate unit, and, if an understanding is reached, embody
such understanding in a signed agreement.
Upon the basis of the above findings of fact, and upon the entire record in the case,
I make the following:
CONCLUSIONS OF LAW
1. "M" System, Inc., Mobile Home Division Mid-States Corporation, is an em-
ployer within the meaning of Section 2(2) of the Act, and is engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act.
2. Lodge 1243, International Association of Machinists, AFL-CIO, is a labor or-
ganization within the meaning of Section 2(5) of the Act.
3. All production and maintenance employees at the Respondent's mobile home
plant at Texarkana, Texas, including inspectors, the power tool serviceman, the saw
filer, porters or janitors, material handlers, hyster or lift truckdrivers, the trash truck-
drivers, and the pickup driver; but excluding leadmen, office clerical employees, pro-
fessional employees, over-the-road drivers, the office maid, watchmen, guards, the
chief stockroom clerk, and all other supervisors as defined in the Act, constitute a
unit appropriate for the purposes of collective bargaining within the meaning of
Section 9(b) of the Act.
4. On August 28, 1958, and at all times material thereafter, the Union was, and
now is, the representative of a majority of the Respondent's employees in the appro-
priate unit described above for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. By refusing on August 28, 1958, and at all times thereafter, to bargain collec-
tively with the Union as the exclusive representative of all its employees in the above-
described appropriate unit, the Respondent has engaged in and is engaging in unfair
labor practices within the meaning of Section 8(a) (5) of the Act.
6. By the foregoing and other conduct, the Respondent has interfered with, re-
strained, and coerced its employees in the exercise of the rights guaranteed in Section
7 of the Act, and has thereby engaged in and is engaging in unfair labor practices
within the meaning of Section 8(a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]