McDonnell Douglas Corp.

National Labor Relations Board - Board Decisions

Jun 16, 1976

224 N.L.R.B. 881 (N.L.R.B. 1976)

McDONNELL DOUGLAS CORPORATION 881
McDonnell Douglas Corporation and Southern Cali-
fornia Professional Engineering Association Case
21-CA-12801
June 16, 1976
DECISION AND ORDER
By MEMBERS FANNING, JENKINS, AND PENELLO
supporting brief, and Respondent filed a brief in op-
position thereto
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel
The Board has considered the record and the at-
tached Decision and Supplemental Decision in light
of all the exceptions and briefs and has decided to
affirm the rulings, findings, and conclusions of the
Administrative Law Judge and to adopt his recom-
mended Order, as set forth in the said Supplemental
Decision 1
On February 21, 1975, Administrative Law Judge
Jerrold H Shapiro issued his Decision in the above-
entitled proceeding finding that Respondent had en-
gaged 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 attached Administrative Law Judge's De-
cision Thereafter, the General Counsel, the Charg-
ing Party, and Respondent filed exceptions and sup-
porting briefs
Subsequently, on April 4, 1975, Respondent filed
with the National Labor Relations Board a motion to
reopen the record to admit additional exhibits and,
on June 30, 1975, filed a supplemental motion to re-
open the record to admit a stipulation of facts as an
additional exhibit Also on June 30, 1975, the Gener-
al Counsel filed a brief in answer to Respondent's
exceptions and a brief in opposition to Respondent's
original motion, and the Charging Party filed a brief
in answer to Respondent's exceptions On August 6,
1975, the General Counsel filed a brief in opposition
to Respondent's supplemental motion
On August 6, 1975, the Board issued a Notice To
Show Cause upon the parties as to why Respondent's
motions should not be granted The General Counsel
and Respondent filed responses thereto Thereafter,
by Order dated October 29, 1975, the Board re-
opened the record and remanded the proceeding to
the Administrative Law Judge for the purposes of
conducting further hearing and preparing and issu-
ing a supplemental decision containing findings of
fact, conclusions of law, and recommendations with
respect to the issues raised by the parties' postdeci-
sion briefs, Respondent's motions and the proposed
exhibits contained therein, the General Counsel's op-
position thereto, and the parties' responses to the No-
tice To Show Cause
On March 10, 1976, the Administrative Law Judge
issued his Supplemental Decision, attached hereto, in
which he modified his findings, conclusions, and rec-
ommendations contained in his initial Decision
Thereafter, the Charging Party filed exceptions and a
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge, as set forth
in his Supplemental Decision, and hereby orders that
Respondent, McDonnell Douglas Corporation, San-
ta Monica, California, its officers, agents, successors,
and assigns, shall take the action set forth in the said
recommended Order
1 The Charging Party has excepted to certain credibility findings made by
the Administrative Law Judge in his Supplemental Decision It is the
Board s established policy not to overrule an Administrative Law Judge s
resolutions with respect to credibility unless the clear preponderance of all
of the relevant evidence convinces us that the resolutions are incorrect
Standard Dry Wall Products Inc 91 NLRB 544 (1950) enfd 188 F 2d 362
(C A 3 1951) We have carefully examined the record and find no basis for
reversing his findings
DECISION
STATEMENT OF THE CASE
JERROLD H SHAPIRO, Administrative Law Judge The
hearing in this case held on December 3, 1974, is based on
unfair labor practice charges filed by Southern California
Professional Engineering Association, herein called the As-
sociation, on June 28, 1974, and a complaint issued on
October 24, 1974, on behalf of the General Counsel of the
National Labor Relations Board, herein called the Board,
Region 21, alleging that McDonnell Douglas Corporation,
herein called the Respondent, has engaged in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the National Labor Relations Act, herein called the Act
Respondent filed an answer and an amended answer which
was further amended at the hearing denying the commis-
sion of the alleged unfair labor practices
Upon the entire record, from my observation of the de-
meanor of Robert M Leventhal, and having considered
the posthearing briefs, I make the following
224 NLRB No 121
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
I THE BUSINESS OF RESPONDENT
vember 25, 1968, until November 14, 1971 Simply stated,
the Plan assures participating employees of an income even
if an accident or illness disables them from working and is
available to all of Respondent's salaried employees not Just
those represented by the Association The Plan's insurance
carrier is the Connecticut General Life Insurance Compa-
ny, herein called Connecticut General The circumstances
surrounding the introduction of the Plan and its incorpora
tion into the 1968-71 bargaining agreement can be briefly
stated
The Association during negotiations over the terms of
the 1968-71 collective-bargaining agreement, as one of its
proposals, proposed a disability insurance plan The pro-
posal was discussed at the bargaining sessions and the par-
ties eventually agreed that such a plan would be included
in the collective-bargaining agreement but that the cost of
the insurance would be borne entirely by the participating
employees whose payments would be made through pay-
roll deductions, that Respondent would have the right to
select the insurance carrier and that the insurance would
be offered to all salaried employees not just those repre
rented by the Association The Association's negotiating
spokesman, Leventhal, and the Respondent's spokesman J
Curtis Counts, discussed and reached agreement on the
basic outline of a plan-the level of benefits, eligibility re-
quirements, and duration of benefits-and they also
agreed that the Association and Respondent would jointly
develop more detailed specifications for the plan Even
though it was understood that the Respondent had the
privilege of selecting the insurance carrier, it was also
agreed by the parties that, ` the [Respondent] will provide
information to the [Association] pertinent to the selection
of [the insurance carrier] " All of these agreements were
reduced to writing and included in Respondent's written
proposal submitted to and accepted by, the Association as
the basis for the 1968-71 collective-bargaining agreement
Thereafter, the LTDI was specifically included in the
1968-71 collective-bargaining agreement when it was en-
tered into on November 25, 1968 Then in late December
1968 and early January 1969 Counts and Leventhal, as pre-
viously agreed, had a series of discussions about the speci-
fications for the LTDI These discussions resulted in speci-
fications for the Plan which were reduced to writing by
Counts and submitted for bid to several insurance carriers
Upon receipt of the bids Counts showed the specifications
to Leventhal who indicated that they correctly summarized
the matters they had discussed Counts also showed Leven-
thal the bids he had received from the carriers Shortly
thereafter Respondent decided to award the LTDI to Con-
necticut General, the carrier which had submitted the best
bid, and Counts informed Leventhal The monthly premi-
um charged by Connecticut General was 39 cents per $100
of a participating employee's monthly base salary This
premium remained in effect throughout the term of the
1968-71 agreement
An agreement to succeed the 1968-71 agreement was
entered into in March 1972 The Associations spokesman
for these negotiations was Leventhal and Respondent's
spokesman, instead of Counts, was Chance Leventhal pro-
posed that the LTDI be maintained without change
Chance acknowledged that the Plan was a "substantial
McDonnell Douglas Corporation, the Respondent, is a
corporation engaged in the manufacture of aircraft and
missiles and in space research, with facilities located in
Santa Monica, California, and elsewhere in California as
well as in other States Respondent annually sells and ships
goods and products valued in excess of $50,000 from the
State of California directly to customers located in other
States It is admitted that Respondent is an employer en
gaged in commerce and in a business affecting commerce
within the meaning of Section 2(6) and (7) of the Act
II THE LABOR ORGANIZATION INVOLVED
It is admitted that Southern California Professional En
gineering Association, the Association, is a labor organiza
tion within the meaning of Section 2(5) of the Act
III THE QUESTIONS TO BE DECIDED
The ultimate questions for decision are whether Respon
dent violated Section 8(a)(5) and (1) of the Act when, with
out affording the Association an opportunity to bargain
over the matter, Respondent increased the premium of its
employees' long term disability income insurance and re-
fused the Association's request for information to evaluate
the increase
IV THE ALLEGED UNFAIR LABOR PRACTICES
A The Facts I
The Association which represents a bargaining unit com-
posed of Respondent's professional employees-engineers
and related employees-employed at several facilities, for
over a quarter of a century has been a party to successive
collective-bargaining agreements with Respondent cover-
ing such employees The subject of the instant dispute, the
long-term disability income insurance, herein sometimes
called LTDI or the Plan, came into existence in January
1969 when it was incorporated into the Respondent-Asso-
ciation collective-bargaining agreement effective from No-
1 The facts except in one instance are undisputed The only witness
Robert M Leventhal the Associations principal official who testified for
the General Counsel was exceptionally convincing and impressed me as an
honest and reliable witness The sole portion of his testimony challenged by
Respondent involves certain discussions between himself and M T
Chance the Respondents chief negotiator which took place during negoti
ations over the 1972-74 collective bargaining agreement These negotia
Lions according to Leventhal resulted in an agreement that before it in
creased the premium for the employees long term disability insurance
Respondent would furnish information about the increase and consult with
the Association As was the case with his testimony in general Leventhal on
this point impressed me as an honest and reliable witness Chance was not
called upon to deny this testimony rather Respondent proposed and the
parties in effect stipulated that if Chance testified he would deny
Leventhal s testimony in this one respect The General Counsel did not
stipulate as to Chance s veracity Under these circumstances and particu
larly because Leventhal impressed me as an honest witness I credit
Leventhal s version of the disputed matter
McDONNELL DOUGLAS CORPORATION 883
benefit for the employees" and indicated that Respondent
wanted to continue the Plan and would contribute toward
its cost by paying 40 cents per $100 of an employee's base
monthly salary 2 On the other hand Chance warned the
Association's bargaining representatives that the Plan was
in trouble because it had suffered "a very serious loss of
premiums to claims" and that in order to continue the Plan
and maintain its current level of benefits that the premium
would have to be increased from 39 cents to $1 02 per $100
of a participating employee's base monthly salary but if the
Association agreed to a significant modification of one of
the Plan's benefits, the premium would only have to be
increased from 39 cents to 79 cents In other words, under
Respondent's proposal, if the Association agreed to a plan
with reduced benefits Respondent would absorb the entire
premium increase (40 cents), but if the Association insisted
on retaining all of the Plan's benefits the premium increase
would cost the employees out of their own pocket 40 cents
per $100 of monthly base salary more than they had previ-
ously been paying
Leventhal expressed the view that before the Association
agreed to change the level of benefits or increase the premi-
um that it wanted to know the basis for Respondent's
claim that a change in the existing Plan was economically
necessary Chance agreed that the Association was entitled
to this information and arranged for a representative from
the insurance carrier, Connecticut General, to meet with
him and Leventhal The representative, Mr Oslow, as ar-
ranged met with them and in substance explained to Le-
venthal that over the duration of the 1968-71 bargaining
agreement a comparison of the premium payments to
claims showed that the Plan had incurred a deficit of $4
million dollars Oslow admitted, however, that not all of
these claims had actually been paid but were paper
amounts based on a so called "reserve" or "reserve as
sumption' which he explained was an accepted practice in
the insurance business Oslow was then introduced to the
other members of the Association's negotiation committee
and, in the presence of Chance, answered their questions
about certain aspects of the Plan The ultimate conclusion
was that the Association's representatives accepted a re-
duction in the Plan's benefits and an increase in the pre-
mium from 39 cents to 79 cents per $100 In return Re-
spondent agreed to pay the entire increase
This does not however present a complete picture of the
LTDI negotiations Before final agreement on this subject
Chance advised the Association's negotiators that because
of Connecticut General's prior adverse experience the pre-
mium would be guaranteed for only 1 year and not for the
term of the collective-bargaining agreement Leventhal
agreed and specifically agreed that after the first year the
premium could be increased but in turn in effect proposed
that Respondent bargain with the Association over any
such midterm increase In response, Chance agreed that if
Connecticut General during the term of 1972-74 collective-
bargaining agreement advised Respondent it intended to
increase the LTDI premium that the Association would be
given "advance notice" of the increase and Respondent
2 This money (40 cents) was available Chance made it clear only for the
LTDI and would not be diverted to any other employee fringe benefit
would furnish the Association with the type of information
which it could use to evaluate the merits of the increase
and also agreed that Respondent would meet with the As
sociation for the purpose of reviewing this information
Chance refused to agree to Leventhal's further proposal
that Respondent submit the LTDI to competitive bidding
by other insurance carriers if Connecticut General in-
creased the premium It was Chance's position that this
would be a matter for discussion, if and when Connecticut
General increased the premium, with the Association hav-
ing the burden of convincing Respondent to open up the
Plan for bids However, it was understood that if other
insurance carriers were allowed to bid for the LTDI that
Respondent would exercise the sole right to select the car
rier
On March 10, 1972, Respondent submitted to the Asso-
ciation its written proposal "for a final settlement of the
terms of the new collective bargaining agreement," which
the Association accepted The section of the proposal cov-
ering the LTDI, in pertinent part, indicated that the parties
had agreed to a reduction in the Plan's benefits and provid-
ed
The rate for such modified coverage will be $ 79 per
month per $100 of participating employee's monthly
base salary with Company paying $ 40 of the $ 79
This rate is fixed until at least 1 April 1973 If there is
a change in rate or modification in coverage, the Asso-
ciation will be notified prior to any change being ef-
fected Employees will be notified of any such changes
which might be necessary after 1 April 1973 and
should the participation fall below the required enroll-
ment of the Carrier, the Long Term Disability cover-
age will be discontinued
Thereafter the parties executed the 1972-74 collective-bar
gaining agreement which was effective by its terms from
March 27, 1972, through November 17, 1974, and from
year to year unless notice of modification or amendment
was given by either party not more than 75 days nor less
than 60 days prior to the expiration date The benefits and
conditions of the LTDI are set out in detail in Appendix I
of the agreement which, in pertinent part, provides that
"the employee will contribute 39¢ per $100 of payroll This
rate is subject to change on 1 April 1973 "
The Plan's premium was not increased on April 1, 1973,
however on March 2, 1973, Connecticut General, by letter,
notified Respondent it was extending the existing rate from
April 1, 1973, until April 1, 1974, but warned, "the frequen-
cy of the claim rate is approximately twice the normal, and
if it continues, may well require some adjustment in your
rates next renewal " This prediction became a reality when
effective May 1, 1974, the portion of the premium contri-
buted by the participating employees was increased 150
percent The Association was notified about the increase
on either Thursday, April 25, or Friday, April 26, when
Chance, by telephone, told Leventhal that effective May 1
the employee premium for the LTDI would be increased
from 39 cents to 98 cents because of the insurance carrier's
"bad experience " Leventhal demanded that Respondent,
as it had agreed during the negotiations, furnish the Asso-
ciation with the data which justified the increase Chance
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
replied that Connecticut General had told Respondent that
the rate had to be increased and that it was the intent of
Respondent to increase the rate effective May I Finally, as
requested by Leventhal, Chance agreed to confirm their
conversation by letter Such a letter was transmitted to Le-
venthal by Staff Vice President Adamson on April 26
which confirmed Chance's telephone communication that
the LTDI premium rate would be increased effective May
1, 1974, and that the employees were being advised of this
fact by written notice This notice, a copy of which was
enclosed in the April 26 letter, was distributed by Respon-
dent to the employees and reads in pertinent part
Because of the continuing high claim loss experience
under our [LTDI] we are informed by the Insurance
Carrier that, effective May 1, 1974, the existing plan
requires an employee premium cost increase from 39¢
to 98¢ of base monthly salary
On April 30, 1974, by letter, Leventhal replied to
Adamson's April 26 notification that the cost of the LTDI
had been increased Leventhal stated that the Association
understood "that if there were to be rate changes, we
would have some advance notice, and an opportunity to
secure and examine supporting documentation for the rate
increase " Continuing, the letter declares
Irrespective of our prior understanding, we now re-
quest that the insurance carrier be requested to for-
ward to you, for transmission to us, data to support
this rate increase Specifically, we want to see data on
premiums paid, claims paid, claims reserved, and re
serves, and premium retention by the carrier
Absent such data, neither we nor you can evaluate if
we are receiving the proper value for the funds invest-
ed
By securing this data now, we can have this program
analyzed, and be in a position to properly evaluate it
for the forthcoming negotiations
On May 8, 1974, Leventhal wrote a second letter to
Adamson asking that the rate increase be delayed until
June 1 so that the Association could examine the requested
information and discuss the matter with Respondent I
shall quote the letter in its entirety
Since the notification arrived regarding the in-
creased premium for the LTD insurance, there has
been considerable concern evidenced by our officers
and members
They are understandably upset over the increase in
general, and its amount specifically There is addition-
al concern that with the amount of increase, the pro-
gram will fall below whatever minimum participation
is required by the carrier, and it will be dropped
I feel we must call to your attention that our agree-
ment with the Company was to give the Association
and the participants advance notice of any changes It
was our understanding that if there was to be any in-
crease, we would be given sufficient advance notice
and information to evaluate the change, and consider
alternatives, as we did during the last negotiations
The advance notice to the Association was very
short, and to the plan participants even shorter It is
reported to us the plan participants learned of the in-
crease via their paycheck envelopes on May 3 that the
rates were increasing May 1
Since the Association to date has not received the
requested information, and the plan participants were
given short notice, and no information upon which to
make an informed decision, we now respectfully re-
quest the rate increase, if in fact it is proper, be de-
layed until June 1, and any withdrawal cards received
held until that date In the interim, we will expect the
information we requested to be forthcoming quickly
so we may meet and seek a resolution of this problem
to our mutual satisfaction
I trust we will have a prompt response to this re
quest
When his April 30 and May 8 letters went unanswered
Leventhal on May 15, 1974, wrote Adamson another letter,
in effect, asking for compliance with his earlier requests for
information and a delay in the rate increase so that the
parties might discuss the matter In addition, Leventhal in
this letter expressed the opinion that the Respondent had
an obligation to administer the LTDI program in a respon-
sible manner and in this regard wrote
you should have had available relevant data from
the insurance company to justify this rate increase or
you should not have agreed to its implementation If
you did not have this data available at the time you
agreed, a serious question can be raised about the
proper discharge of your responsibilities That ques-
tion can now be resolved by production of the rele-
vant data If you do have this documentation, we are
entitled to an explanation as to your delay in transmis-
sion
Upon receipt of Leventhal's letter of May 15, Adamson
by letter of May 17 replied that Respondent's conduct in
effecting the rate increase was sanctioned by the collective-
bargaining agreement and that the Association's request
for information would be considered along with its re-
quests for other information when the parties met to nego-
tiate a new collective-bargaining agreement Adamson's
letter reads
This is in confirmation of earlier telephone conver-
sations with you by Corporate Personnel and in re-
sponse to your several letters concerning the Long
Term Disability Insurance Plan
To give some perspective into the matter of the in-
crease in the Long Term Disability Plan rate-exclu-
sive of the loss experience which has been heavy-
participation had fallen below the point at which the
coverage could have been cancelled in accordance
with the detailed insurance policy as provided for in
Appendix "I ' Alternatively, the Plan could be main-
tained by increasing the rate
The latter course was adopted and the carrier will
continue the coverage at an increased rate until No-
vember 1974 The Association was notified when we
McDONNELL DOUGLAS CORPORATION 885
were informed of this fact In view of the foregoing we
have no ability to further defer the increase
The current collective bargaining agreement pro-
vides for the action taken Your request for data con-
cerning the LTD coverage will be included for consid-
eration with other information that may be requested
for negotiations
On May 22, by letter, Leventhal informed Adamson that
the Respondent, in the opinion of the Association, was ob-
ligated to immediately furnish the Association the request-
ed information so that the Association could administer
the current collective-bargaining agreement Leventhal s
letter reads
We are in receipt of your letter dated 17 May 74
We are most surprised at its contents, as it is in this
letter for the first time you are now advising us the
grounds for this increase is apparently lack of partici-
pation rather than, as previously reported, due to poor
claims experience
Your letter does make reference to "heavy" loss ex
perience, which implies you have some specific data,
both as to this alleged drop in enrollment and "heavy"
loss experience
You should be fully aware your response regarding
our request for information is totally unacceptable
We are under no obligation to await negotiations for
receipt of this data, and you have no right to deny us
data in a timely manner that is required for us to prop-
erly administer our agreement and protect our mem-
bers' rights
Our desire is not to become involved in exercising
our legal right, but to secure through you, data in or-
der to evaluate this rate increase, at this time, to con
sider alternatives and to be able to advise our mem-
bers accordingly
Leventhal's May 22 letter went unanswered and on June
28, 1974, the Association, through its attorney, filed the
unfair labor practice charges upon which this proceeding is
based
The 1972-74 collective-bargaining agreement, as de-
scribed above, was effective until November 17, 1974, and
from year to year thereafter absent a timely reopening no-
tice By its letter of September 6, 1974, the Association
served such a notice on Respondent, and on September 11,
referring to his earlier requests for information about the
LTDI rate increase, Leventhal by letter to Adamson point-
ed out that negotiations for a new bargaining agreement
were scheduled to begin in the immediate future and re-
newed his earlier requests for information about the LTDI
premium increase explaining to Adamson that absent such
information the Association could not represent its em-
ployees intelligently Leventhal asked that Respondent im-
mediately supply the "requested data " This letter went un-
answered
Negotiation meetings for a new bargaining agreement
commenced on or about October 2, 1974, but prior to this,
on September 30, in accordance with the terms of the
1972-74 agreement, the Association transmitted to Re-
spondent copies of its initial proposal for a new agreement
This proposal insofar as it dealt with the LTDI, in perti-
nent part, proposed that the current Plan be modified to
provide that Respondent pay the entire cost On November
19, 1974, the Respondent, through Chance, proposed that
the LTDI be discontinued in its entirety and not be includ-
ed in the new agreement 3 At the same time Chance hand-
ed Leventhal a letter, signed by Adamson, dated that day,
November 19, which contained the following information
about the LTDI
(a) Premiums paid for the period 8-1-72/11-30-
73-$1,934,767
(b) Claims for the period 8-1-72/11-30-
73-$3,129,745
(c) Fees and commissions paid for the period 1-1-
73/1-1-74-$43,230
The letter also contained the following declaration
By providing the Association with this information,
the Corporation does not admit the commission of
any related unfair labor practice or the existence of
any duty to furnish such information, or breach there-
of Further, this action shall not be construed as a
waiver of the Corporation's position concerning the
release of related information in future, similar situa-
tions
One final factual matter which pertains to the
Respondent's contention that the information furnished by
Respondent on November 19, 1974, satisfied the
Association's requests for information In evaluating this
contention it is necessary to first determine how an em-
ployer, in Respondent's position, would have reasonably
construed the Association's requests Respondent takes the
position that the requests were limited to the data specifi-
cally described in Leventhal's letter of April 30-"premi-
ums paid, claims paid, claims reserved, reserves and premi-
um retention by the carrier " I cannot agree
The entire tenor of Leventhal's written requests of April
30 and May 8, 15, and 22, described in detail above, was
calculated to put Respondent on notice that the Associa-
tion wanted any information which would enable it to eval-
uate the LTDI's premium increase not dust the specific in-
formation mentioned in the April 30 letter Moreover,
Leventhal's letter of May 22 indicated to Respondent that
the Association was requesting information pertinent to
the claim advanced by Respondent in its letter of May 17
that the premium increase had to be viewed in the context
of the drop in employee participation in the LTDI Finally,
any ambiguity in the Association's several requests for in-
formation is removed when the requests are viewed against
the backdrop of the Respondent-Association agreement,
which was not limited to specific information, that in the
event of any midterm premium increase that Respondent
would furnish the Association with the information which
would enable it to intelligently evaluate the increase For
these reasons, it is my view, that the record demonstrates
3 As of the date of the hearing in this matter-December 3 1974-no new
agreement had been executed by the parties who apparently were operating
under the terms of the 1972-74 agreement
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that the Respondent understood that the Association de-
sired any information which would enable it to evaluate
the premium increase including but not limited to "claims
paid," "premiums paid," "claims reserved," " reserves,"
"premium retention by the carrier," and the percentage
and number of employees enrolled in the Plan It is undis-
puted that Respondent furnished no information pertain-
ing to "claims reserved," "reserves ," "premium retention,"
or the number and percentage of employees enrolled in the
Plan Respondent at no time complained to the Associa-
tion that its requests were ambiguous nor did Respondent
present evidence to explain its failure to even furnish the
type of information which was specifically requested 4 Nor
is there an explanation for the reason that the information
furnished by Respondent regarding "premiums paid" and
"claims" is for the period from August 1, 1972, to Novem-
ber 30, 1973, rather than for the period from March 27,
1972, (the effective date of the agreement when the old
premium rate went into effect) to May 1, 1974 (the date the
increase went into effect) For all of these reasons I find
that the information furnished by Respondent on Novem-
ber 19, 1974, did not comply with the Association's re-
quests
B Ultimate Findings and Discussion
1 The unilateral increase in the employees' long-term
disability insurance premium
The disability insurance of the kind involved in this case
is a mandatory subject of collective bargaining for it is
settled that "under the National Labor Relations Act, as
amended, mandatory subjects of collective bargaining in
elude insurance benefits for active employees
Allied Chemical & Alkali Workers of America v Pittsburg
Plate Glass Co, 404 U S 157, 159 (1971), also see N L R B
v General Electric Company, 418 F 2d 736, 746 (C A 2,
1969) Insurance benefits constitute an "emolument of val-
ue" which accrue to the "employees out of their employ-
ment relationship," and are thereby "terms and conditions
of employment" about which an employer must bargain
Inland Steel Co, v N L R B, 170 F 2d 247, 250-251 (C A
7) And where those employees are represented by a union
for purposes of collective bargaining an employer may not
unilaterally make changes in an accident insurance plan
without first notifying the union and giving it a reasonable
opportunity to bargain concerning the changes Such unila-
teral action, regardless of the employer's motivation, is vio-
lative of Section 8(a)(5) and (1) of the Act N L R B v
Benne Katz, d/b/a Williamsburg Steel Products Co 369
U S 736, 747 (1962)
In the instant case the Respondent does not dispute that
the long term disability insurance (LTDI) is a mandatory
subject of bargaining Indeed, this insurance was instituted
4I have given no weight to the representations made by Respondents
counsel Counsel during the hearing and in his posthearing brief made cer
tam statements bearing upon the failure of Respondent to furnish informa
non and the type of information furnished Counsel was not a witness and
was not subject to cross examination As I indicated at the outset of the
hearing the statements of counsel-absent a stipulation-cannot be treated
as evidence to support Respondents position
for the employees as the result of collective bargaining and
was made a part of the collective-bargaining agreement
Respondent at all times freely negotiated with the Associa-
tion over the long-term disability insurance benefits, cover
age, and cost Moreover, inasmuch as the employees cov-
ered by the Plan paid a significant portion of the premium
it is clear that the 150-percent premium increase involved
herein would have a direct and substantial impact on the
employees In these circumstances, the Respondent, by vir-
tue of Section 8(a)(5) and (1) of the Act, was obligated not
to increase the employees' share of the premium without
bargaining with the Association Katz, supra at 747 Yet on
May 1, 1974, Respondent did just this without affording
the Association a reasonable opportunity to bargain On or
about April 25, 1974, Respondent's representative, Chance,
presented the Association's representative, Leventhal, with
a fait accompli He told Leventhal that effective May 1
Respondent had decided to increase the employees' long-
term disability insurance premium because of the insur-
ance carrier's "bad experience " When Leventhal requested
information which would substantiate this claim of "bad
experience," Chance ignored the request and, as described
in detail above, Respondent thereafter refused to discuss
the increase with the Association or to furnish the Associa
tion with the information it needed to evaluate the in-
crease Respondent does not contest the fact that the Asso-
ciation was not given a reasonable opportunity to bargain
over the premium increase but defends its conduct on the
grounds that first, it was under no legal duty to bargain
about the increase for the duration of the collective-bar-
gaining agreement, second, the Association had waived its
right to bargain over this matter, and third, "[t]he premium
increase was action taken by Connecticut General [the in-
surance carrier] not [Respondent] " I shall discuss these
defenses seriatim
The collective-bargaining agreement between the Re-
spondent and the Association effective from March 27,
1972, until November 17, 1974, in its Appendix " I' con-
tains the provisions of the long-term disability insurance
plan which, in pertinent part, reads
Employee contributions are required for [LTDI]
The employee will contribute 39C per $100 of payroll
This rate is subject to change 1 April 1973
Respondent urges that since the subject of the Plan's cost
to the employees is included within the existing collective-
bargaining agreement that Section 8(d) of the Act relieved
Respondent of the duty to bargain about a premium in-
crease during the term of the agreement after April 1, 1973
Section 8(d) of the Act provides inter aha that once a
bargaining agreement has been executed by a union and an
employer establishing terms and conditions for a "fixed
period" neither party is under a duty "to discuss or agree to
any modification" of these terms or conditions during the
contract period 5 C & S Industries Inc, 158 NLRB 454
(1966) Here, effective May 1, 1974, during the term of a
5 The law in this regard is also settled that Sec 8(d) of the Act is for the
protection of the party to a collective bargaining agreement who wishes to
preserve the status quo as to matters covered therein not for the party who
wishes to change it N L R B v General Electric Company 418 F 2d 736
747-749 (C A 2)
McDONNELL DOUGLAS CORPORATION 887
current bargaining agreement Respondent increased the
employees' portion of the long-term disability insurance
premium by 150 percent, from 39 cents to 98 cents per
$100 of an employee's base monthly salary Respondent
urges in substance that if the Association had proposed
that the increase be a lesser one, i e , from 39 cents to 70
cents, this would constitute a modification of the parties
agreement which provides that ` this rate [referring to the
premium rate of 39 cents] is subject to change " Simply
stating this argument, in my view, reveals its lack of merit
The language of the agreement relied upon by Respondent
neither expressly nor by implication indicates that the ex-
tent of the "change" in premium was not negotiable For
this reason Respondent's contention that Section 8(d) of
the Act excused it from bargaining about the premium in-
crease during the term of the agreement lacks merit
Likewise without merit is Respondent's related conten-
tion that for the term of the bargaining agreement the As-
sociation had waived its statutory right to bargain over a
premium increase In this connection the law is settled that
the right to be consulted concerning unilateral changes in
terms of employment is a right given by statute and not
one obtained by contract and that in order to establish a
waiver of a statutory right, there must be a showing of a
clear relinquishment of the right N L R B v C & C Ply
wood Corporation, 385 U S 421, 423, 428, 430-431 (1967),
The Timken Roller Bearing Co, v N L R B, 325 F 2d 746,
751 (C A 6 1963) Whether there has been a clear relin-
quishment of the right is to be decided on the basis of all
the facts and circumstances surrounding the making of the
contract Leeds & Northrup Co, v N L R B, 391 F 2d 874,
878 (C A 3, 1968), Bancroft Whitney Co, Inc, 214 NLRB
26 (1974) In the instant case, contrary to the Respondent's
contention, I do not believe that the circumstances demon-
strate that the Association waived its statutory right to bar-
gain over the premium increase The clause in the collec-
tive-bargaining agreement relied on by Respondent simply
states that the premium charged employees `is subject to
change on 1 April 1973 " It is silent on the decisive ques
tion of whether the Association waived its right to bargain
over such a "change " The clause by its terms does not vest
the Respondent with absolute discretion Also ambiguous
is the language of the final settlement language proposed
by Respondent, and accepted by the Association, during
the negotiations leading up to the execution of the 1972-74
collective-bargaining agreement This proposal, in perti-
nent part, provides that the employees' premium of 39
cents "is fixed until at least 1 April 1973," and that "if
there is a change in rate or modification in coverage, the
Association will be notified prior to any change being ef-
fected' I cannot accept Respondent's contention that
Respondent's agreement to notify the Association "prior to
any change being effected" was simply a matter of corn
mon courtesy without substance Commonsense, the reali-
ties of collective-bargaining and the Association's role as
the bargaining representative of the unit employees, and an
examination of the contract negotiations, all indicate that
this requirement of notification was not intended to be a
meaningless formality but rather was agreed to by Respon-
dent for the purpose of allowing the Association a reason
able opportunity to bargain over any change 'in rate or
modification in coverage" of the LTDI during the contract
term Thus, as described above, in return for the
Association's agreement that the premium could, if neces-
sary, be increased during the contract term, the Respon
dent agreed that if Connecticut General advised Respon-
dent that such an increase was necessary the Association
would be given advance notification of the increase and
furnished with the type of information which it could use
to evaluate the merits of the increase and that Respondent
would meet with the Association for the purpose of review-
ing this information Simply stated, Respondent agreed to
bargain with the Association over this matter The fact that
Respondent retained ultimate authority to decide whether
to replace Connecticut General with another insurance
carrier or to place the LTDI out for competitive bidding or
that the insurance covered nonunit employees, does not
detract from the Respondent's agreement to hear the
Association's views and to bargain with it over a premium
increase For all of these reasons I find that the record
demonstrates that the Association did not waive its right to
bargain about the May 1, 1974, increase in the employees
long-term disability insurance premium
Regarding the contention advanced in Respondent's
posthearing brief that "the premium increase was action
taken by General Connecticut, not [Respondent]," in its
fourth affirmative defense to the complaint Respondent al
leged "Respondent has not taken part in or contracted
with [Connecticut General] for any premium charge, as al
leged The respondent is merely an agency between said
insurance carrier and participating insured employees "
(Emphasis supplied) The allegation referred to is para-
graph 9 of the complaint which in pertinent part alleged
that Respondent entered into an agreement with [Connec-
ticut General] providing for an increase in required premi-
um rates under the Long Term Disability Insurance Plan "
Respondent in its answer to the complaint denied this alle-
gation but at the hearing amended its answer to admit this
allegation and at the same time moved to strike its fourth
affirmative defense By this conduct I was under the im-
pression that the issue posed by the fourth affirmative de-
fense had been removed from the case and that Respon-
dent was conceding that it was not simply a passive
bystander to the transaction which resulted in the disputed
premium increase Also this defense suffers from the fur-
ther infirmity of being an afterthought which apparently
did not come to Respondent's mind until the inception of
the unfair labor practice proceedings before the Board Re-
spondent at no time based its justification for not bargain-
ing with the Association upon any lack of control, rather in
his letter of May 17, 1974, Adamson based Respondent's
refusal to bargain with the Association over the premium
increase on the fact that "the current collective bargaining
agreement provides for the action taken' In addition,
there is no evidence that the insurance carrier, Connecticut
General, had the unlimited right in 1974 to increase the
premium over Respondent's objection To the contrary, in
1974 Respondent and Connecticut General, at the time of
the increase, entered into a new agreement which provided
for the increase Finally, in evaluating this defense it seems
to me that Respondent is in effect urging that it had a good
business reason to implement the premium increase be-
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cause Connecticut General indicated that such an increase
was economically necessary The law is settled, however,
that the bona fides of Respondent's motivation is no de-
fense to what is otherwise unlawful unilateral conduct
Katz, supra at 747 For the foregoing reasons I find without
merit Respondent's defense that its conduct is excusable
because the premium increase was action taken by the in-
surance carrier
Based upon the foregoing, I find that on or about May 1,
1974, by unilaterally increasing the long-term disability in-
surance premium for those employees represented by the
Association, without first bargaining with the Association,
Respondent violated Section 8(a)(5) and (1) of the Act
So there will be no misunderstanding of the basis for this
finding I would like to make it clear that nothing herein
should be construed as indicating that the Respondent had
to secure the consent of the Association before implement-
ing the premium increase The Respondent's obligation
was simply to notify the Association and to furnish the
information needed by the Association to intelligently
evaluate the increase and to consider in good faith whatev-
er views the Association may have chosen to express about
the increase 6 Certainly it cannot be stated that the situa-
tion was without any possibility of adjustment The fact
that Respondent might have felt that its action was com-
pelled by the situation and that bargaining would have
been futile does not justify its conduct The important ele-
ment is that the bargaining representative of the effected
employees, here the Association, must not be ignored or
bypassed No harm would have been done, and much good
may have been accomplished by collective bargaining in
this case, even if the net result was unchanged This is so
because the act of extending the opportunity of good-faith
bargaining will generally contribute to stable labor rela-
tions and industrial peace Contrast the situation here,
where the ignoring of the Association has led to bitter ac-
cusations and this litigation as well as civil litigation
2 The refusal to furnish information
It is settled that collective-bargaining duties imposed on
an employer by Section 8(a)(5) and 8(d) of the Act include
the obligation to furnish the employees' representative with
information relevant and necessary to the intelligent dis-
charge of its function as the employees' exclusive bargain-
ing representative "There can be no question," the Su-
preme Court has observed, "of the general obligation of an
employer to provide information that is needed by the bar
gaining representative (of his employees) for the proper
performance of its duties " and this obligation "extends
beyond the period of contract negotiation and applies to
labor management relations during the term of an agree-
ment" N L R B v Acme Industrial Co, 385 U S 432,435-
436(1967)
The Association, as described above, requested that Re
spondent furnish it with information which would enable it
6 There is no evidence nor a contention that the insurance carrier did not
give sufficient notification about the increase to Respondent so that good
faith bargaining with the Association could not have taken place prior to the
effective date of the increase
to intelligently evaluate the May 1, 1974, increase in the
employees' long-term disability insurance premium The
Association's requests specifically referred to, but were not
limited to, `claims paid, ' "premiums paid,' "claims re-
served," `reserves,' "premium retention," and the number
and percentage of employees enrolled in the LTDI Plan
The long-term disability insurance premium increase, as
found previously, is a mandatory subject of collective bar-
gaining and as such the Respondent was obligated, upon
request, to furnish the Association information about the
increase which was relevant and necessary to an intelligent
discharge of its role as the employees' bargaining represen-
tative At the hearing Respondent conceded the legal rele-
vancy of the disputed information and has not seriously
contested its necessity Indeed, Respondent during the ne-
gotiations over the LTDI agreed that if Connecticut Gen-
eral during the term of the collective-bargaining agreement
indicated that a premium increase was necessary that Re
spondent would furnish information to the Association so
that it could evaluate the increase In any event, the whole
record, including Leventhal's undisputed testimony, estab-
lishes that the requested information was relevant and nec-
essary to the Association in administering the existing col-
lective-bargaining agreement as well as for negotiating a
new agreement The relevancy and the Association's need
for the requested information is best described by Leven-
thal
I wanted to negotiate over this [referring to the May 1
premium increase] and made the demands for infor-
mation, was put in a position where I had no informa-
tion, [I] was put in a position where I had absolutely
no information, could not answer the questions of the
members of the bargaining unit, could not justify the
rate increase, could not rebutt the rate increase, and
could not enter into any meaningful dialogue with
[Respondent] regarding what had transpired, because
I had no information This [lack of information] also
influenced the type of proposal that we submitted
[during negotiations for a new bargaining agreement],
because not knowing what had happened I could not
do anything but draft a general proposal
Despite the relevancy of the requested information and
the need of the Association, the Respondent refused to
comply with Leventhal's oral request for information made
to Chance on or about April 25, 1974, and his written re
quests made to Adamson in 1974 on May 8, 15, and 22 and
September 11 Respondent's sole response to the
Association's several requests for information is contained
in Adamson's May 17, 1974, written reply to Leventhal
`Your request for data concerning the LTD coverage will
be included for consideration with information that may
be requested for negotiations " However, the record is
plain that Leventhal in his oral request to Chance and his
several written requests to Adamson had made it perfectly
clear that he wanted the requested information not only for
the negotiation of the new bargaining agreement but in
order to intelligently administer the existing agreement
Under the circumstances, the Respondent by not promptly
furnishing the Association with the requested information
acted at its peril, for the law is settled that the Association
McDONNELL DOUGLAS CORPORATION 889
was entitled to such information for the purpose of adimn-
istermg its existing bargaining agreement Acme Industrial
Co, supra Nor did Respondent cure this impermissible
conduct by furnishing the Association with certain infor-
mation on November 19, 1974 This information, which
was supplied over 6 months after the Association's initial
requests and after the expiration date of the existing agree-
ment, obviously was of little value to the Association in
administering the existing agreement Moreover, as found
above, the information furnished on November 19, 1974,
was insufficient 7 In any event, the November 19 informa-
tion did not fulfill Respondent's statutory obligation to fur-
nish information to the Association so that it could intelli-
gently negotiate a new bargaining agreement because
Respondent's unreasonable delay in furnishing the infor-
mation, by itself, was violative of the Act Respondent had
known since May 1974 that the Association wanted this
information to prepare for the negotiations of a new agree-
ment and also knew that pursuant to the terms of the ex-
isting agreement that the Association would reopen the
agreement for negotiation in September 1974 and furnish
its initial contract proposals at that time In fact this is
what occurred On September 6, 1974, the Association
transmitted its reopening letter and pursuant to the existing
agreement on September 30 transmitted its initial propos-
als to the Respondent Then on either October 2 or Octo-
ber 9 the first negotiation meeting was held Yet Respon-
dent did not furnish any information pertaining to the
LDTI premium increase until November 19, 1974, and
only then under protest This lack of information hindered
the Association in drafting a proposal regarding the LTDI
As Leventhal testified "This [referring to the lack of infor-
mation] also influenced the type of proposal that we sub-
mitted, because not knowing what had happened I could
not do anything but draft a general proposal ' The reason
for the Respondents delay in furnishing this information
to the Association for use during contract negotiations is
unexplained Under the circumstances, I find that Respon-
dent committed an unfair labor practice by failing to pro-
vide the limited information it eventually did provide with-
in a reasonable time N L R B v General Electric Company
418 F 2d 736, 752-753 (C A 2, 1969)
In sum the General Counsel has presented a strong pri
ma facie case to support his allegation that the Respondent
violated Section 8(a)(5) and (1) of the Act by refusing to
furnish information to the Association Respondent in its
posthearing brief contends that this allegation is without
merit for four reasons (1) Respondent had not legal obli-
gation to turn over the requested information until the start
of negotiations for the new bargaining agreement, (2) the
requests for information were ambiguous and inadequately
described the desired information, (3) Respondent did not
possess or exercise control over the information and (4)
the information was privileged because of the Association's
related lawsuit against Respondent I shall discuss these
arguments seriatim
Regarding its obligation to turn over the requested infor-
mation prior to the commencement of the negotiations for
a new agreement the Respondent, for reasons outlined pre-
viously, was obligated under Section 8(a)(5) of the Act to
furnish the information to the Association during the term
of the existing agreement so it could intelligently adminis-
ter that agreement 8 Acme Industrial Co, supra Moreover,
even absent this statutory obligation, the information fur-
nished by Respondent later on November 19 did not com-
ply with its further statutory obligation to furnish informa-
tion to the Association for the negotiation of a new
agreement, inasmuch as the information was furnished
only after an unreasonable delay and did not fully comply
with the Association's requests
The contention that the Association' s requests were am-
biguous or that they inadequately described the informa-
tion is without merit As I have found previously, the re-
quests for information when viewed in their totality were
presented with sufficient clarity and specificity to apprise
Respondent of the precise nature of the type of informa-
tion sought The problem here was not the ineptness of the
Association in describing what was wanted but was the
Respondent's belief that it was not obligated to furnish the
information Here the facts show that in refusing to furnish
the information Respondent at no time questioned the suf-
ficiency of the demand and nothing in the record indicates
it would have complied with any kind of a demand Under
the circumstances, it is clear that this defense is an after-
thought which did not occur to Respondent until the hear-
ing in this case
Respondent's contention that it should be excused from
furnishing the requested information because it did not
possess or exercise control over the information has no
support in this record There is not an iota of evidence
from which I can infer that Respondent did not have or
could not obtain the requested information 9 See generally
N L R B v Rockwell Standard Corporation, 410 F 2d 953,
958 (C A 6, 1969) Indeed the weight of the evidence is to
the contrary and indicates that Respondent had "control"
over the type of information involved herein Thus, during
the negotiation of the 1972-74 bargaining agreement Re-
spondent promised to secure this kind of information for
the Association if there was an increase in the premium
Thereafter, in refusing to furnish the requested information
Respondent at no time indicated to the Association that its
refusal was based on any lack of control or possession of
the information To the contrary, Respondent indicated
that the information would be forthcoming during the ne-
gotiations for a new agreement Under the circumstances
this defense has all the markings of an afterthought which
did not come to Resondent's mind until this litigation For
' In the circumstances of this case the burden was not on the Association
as Respondent urges to inform the Respondent that the information sup
plied on November 19 was insufficient By refusing to promptly furnish the
requested information at a time when it would have been of real value to the
Association the Respondent had already violated the Act and had breached
its oral agreement with the Association Also in its November 19 letter
furnishing the information Respondent in tl•e same breath in effect dis
claimed any obligation to furnish the information
8 Since I have found that Respondent was obligated to bargain with the
Association over the May I premium increase I need not decide whether
absent this obligation Respondents refusal to promptly furnish the request
ed information would have been a violation of the Act
' As I indicated at the hearing statements about this point made by
Respondents counsel are not evidence and have not been considered as
evidence
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
all of these reasons the Respondent's defense that it neither
exercises possession or control over the requested informa
tion is without merit 10
Lastly, Respondent urges that its refusal to furnish the
requested information was excusable because "the data is
privileged information " In demonstrating such a defense
the Respondent bears a heavy burden because once it is
established that information is relevant and necessary to a
union in its role as bargaining representative, an employer
is not legally justified in refusing to furnish the information
merely because it would entail disclosures of materials
which might be detrimental to its business interests This is
so because in order to accomplish the intent of the Act that
collective bargaining be facilitated, an employer's desire to
keep information confidential must in some respects be
subordinated to the requirements of the Act The burden is
on the Respondent to demonstrate that its reasons for re-
fusing to furnish the requested information was because of
its privileged nature E g, The Hearst Corporation, 102
NLRB 637, 645-646 (1953)
In support of its defense of privilege Respondent in its
posthearing brief urges
[Association] is plaintiff in a lawsuit against Respon
dent and Connecticut General, seeking, among other
things, money damages Any information which [Re-
spondent] might obtain and surrender to the [Associa-
tion] now, information which could go to the issues of
both Board and Court cases, could be used as evi-
dence against either or both defendents
The lawsuit referred to was filed by the Association pur-
suant to Section 301 of the Act against Respondent and
Connecticut General It apparently arises out of the May 1
premium increase The date the lawsuit was filed is not in
the record but it appears to have been well after the
Association's several requests for information made in
April and May 1974, and after the Association filed the
instant unfair labor practice charges in June 1974
The circumstances in this case, in my opinion, do not
demonstrate that Respondent refused to furnish the re-
quested information because it believed that the informa-
tion was privileged or because it believed the Association
would use the information in connection with its lawsuit
At no time material to this case did Respondent justify its
refusal to furnish information in whole or in part because it
was privileged In fact, after the lawsuit was filed, Respon-
dent, as described earlier, furnished certain information to
the Association It was only after the commencement of
the litigation in this case that Respondent's Counsel in his
posthearing brief raised the issue of privilege arguing that
the reason Respondent "now' refused to furnish the re-
quested information was that it `could be" used as evi
dence against Respondent in a lawsuit thus harming Re-
spondent thereby making the information privileged n
10 I have carefully considered Korn Industries Inc v N L R B 389 F 2d
117 (C A 4 1967) and NLRB v United Brass Works Inc 287 F 2d 689
(C A 4 1961) relied on by Respondent in connection with this defense and
find they are distinguishable from the instant situation in several significant
resRects
Apparently recognizing that this defense is an afterthought Respon
dent in its posthearing brief concedes in effect that this defense is only
However, there is no evidence that the Association filed the
instant unfair labor practice charges to secure information
for use in the lawsuit it filed against Respondent To the
contrary, the evidence establishes that the Association
prior to the filing of the lawsuit, as well as after, was dili-
gently trying to secure the information for the purpose of
intelligently representing the unit employees and only filed
the instant unfair labor practice charges in an effort to
secure this information for that purpose Moreover, Re-
spondent adduced no evidence to demonstrate that the in-
formation requested by the Association would be useful to
the Association in its lawsuit, other than Counsel's asser-
tion that such information "could be used as evidence"
against Respondent in the lawsuit Under the circum-
stances, I am convinced that this defense is simply an after-
thought and has no bearing on Respondent's real reason
for continuing to refuse to furnish the requested informa-
tion For all of these reasons I find that Respondent's de-
fense that the requested information is privileged is without
substance In reaching this conclusion I have carefully con-
sidered the cases cited by Respondent (Betty Brooks Co, 99
NLRB 1237 (1952), and General Electric Company, 163
NLRB 198 (1967) ), and find they are distinguishable from
the instant situation in a number of significant respects
Based on the foregoing, and for the reasons stated, I find
that Respondent, commencing on or about April 25, 1974,
and continuing thereafter, violated Section 8(a)(5) and (1)
of the Act by refusing to furnish information relevant and
necessary for the Association to intelligently evaluate the
May 1, 1974, increase in the employees' long-term disabili-
ty insurance premium, including but not limited to its re-
fusal to furnish information pertaining to claims paid, pre-
miums paid, claims reserved, reserves, premium retention,
and the percentage and number of employees enrolled in
the insurance program
Upon the basis of the foregoing findings of fact and the
entire record, I make the following
CONCLUSIONS OF LAW
1 McDonnell Douglas Corporation, the Respondent, is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act
2 Southern California Professional Engineering Associ-
ation, the Association, is a labor organization within the
meaning of Section 2(5) of the Act
3 All employees employed by Respondent in the divi-
sions or components of Respondent known as McDonnell
Douglas Astronautics Company-West and the Douglas
Aircraft Company, including the Tulsa location, (a) as
have been certified by the National Labor Relations
Board, (b) as agreed upon between Respondent and the
Association to be represented by the Association, and who
are employed in the job classifications listed in Appendix
"A" of the collective-bargaining agreement effective
March 27, 1972, constitute a unit appropriate for the pur-
applicable prospectively and urges that should the Board issue an order
finding Respondents refusal to furnish the requested information which
predated the lawsuit was unlawful that the order issued by the Board should
not require Respondent to turn over any further data because of the inter
vention of the lawsuit
McDONNELL DOUGLAS CORPORATION 891
poses of collective bargaining within the meaning of Sec-
tion 9(b) of the Act
4 At all times material the Association has been the
exclusive representative of all employees in the aforesaid
bargaining unit for the purposes of collective bargaining
within the meaning of Section 9(a) of the Act
5 By refusing to furnish and its delay in furnishing the
Association with information necessary and relevant for
effective collective bargaining over the increase in the bar-
gaining unit employees long-term disability insurance pre-
mium, the Respondent has engaged in, and is engaging in,
unfair labor practices within the meaning of Section 8(a)(5)
and (1) of the Act
6 By unilaterally increasing the cost of the bargaining
unit employees' Long Term Disability Insurance premium,
without first bargaining with the Association, the Respon-
dent has engaged in, and is engaging in, unfair labor prac-
tices within the meaning of Section 8(a)(5) and (1) of the
Act
7 The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act
THE REMEDY
V
Having found that Respondent has engaged in and is
engaging in certain unfair labor practices affecting com-
merce, I shall recommend that it cease and desist there-
from and take certain affirmative action in order to effec-
tuate the policies of the Act
Inasmuch as I have found that Respondent violated the
Act on or about May 1, 1974, by unilaterally increasing the
unit employees' long-term disability insurance premium, it
is necessary to restore the status quo ante and to do this I
shall recommend that Respondent reinstitute the premium
rate as it existed immediately prior to the May 1 increase
and pay the increased amount-59 cents per $100 of an
employee's base monthly pay-to the insurance carrier for
each of the participating unit employees currently em-
ployed, and reimburse all unit employees employed since
May 1, 1974, for the increase in premium they paid as a
result of the May 1, 1974, increase with interest added at
the rate of 6 percent per annum This obligation shall be
tolled on the date Respondent bargains to an agreement
with the Association over the premium increase involved
herein or a bona fide impasse exists after good-faith bar-
gaining over the matter
In recommending this remedy I realize that like any
reimbursement order in a case of this type it is open to the
charge that the Respondent, had it engaged in timely bar-
gaining, would have prevailed upon the Association to ac
cept some or all of the increase To the extent that this is
true, the above reimbursement order may put the employ-
ees in a better position than they would otherwise have
had But to recommend just a bargaining order, on the
other hand, also has serious defects Its adequacy in any
case depends on how faithfully the remedial bargaining
will produce the bargaining which should have taken place
at an earlier time Generally, as in the instant case, circum
stances change If there was money earlier to pay in whole
or in part for the increased premium, it may have been
invested in the business or distributed as profits The
Respondent's current economic outlook may be less en-
couraging than before By the time the Respondent comes
to the bargaining table to comply with the bargaining de-
cree, he has had the experience and inconvenience of liti-
gating about his unilateral conduct Even if he bargains in
good faith, his attitude may well be less flexible than be-
fore In short, to conclude that the right to bargain about
changes in conditions of employment is adequately vindi-
cated when the bargaining takes place after the fact and
after litigation, is to ignore the realities of industrial life
Considering all of the circumstances in this case and re-
alizing that "restitution is not an automatic or inflexible
remedy" (New Orleans Board of Trade, LTD, 152 NLRB
1258 (1965) ), I believe that on balance the remedy which I
have recommended effectuates the policies of the Act Its
propriety is not impaired by the fact that the Respondent's
unlawful conduct was not inspired by antiunion consider-
ations E g, N L R B v Central Illinois Public Service Com
pany 324 F 2d 916 (C A 7, 1963) Nor as I have indicated
above does the fact that the recommended Order grants
the employees a benefit which they might not have been
able to obtain in the process of collective bargaining de-
tract from its appropriateness The court in Leeds &
Northrup Co v N L R B, 391 F 2d 874, 879-880 (C A 3,
1968), holding that such a possibility is not a sufficient
reason to refuse to order a reimbursement remedy ex-
plained
The Board s back pay award in this case is supporta-
ble on the ground that the union might have success-
fully resisted all or a portion of the reduction in its
share of profits had it been afforded an opportunity to
bargain, and the employees should not be left in a
worse position than they might have enjoyed if the
union had been given the opportunity to bargain
While it is true that a retroactive order might afford
the employees a better position than the union's bar-
gaining might have achieved, the Board can hardly be
said to be effectuating policies beyond the purposes of
the Act by resolving the doubt against the party who
violated the Act Retroactive enforcement must al
ways contain in it some element of hardship on the
employer, but a failure to grant back pay imposes at
least an equal hardship on the employees
Finally, in concluding that the above remedy is appro-
priate I have carefully considered Combined Paper Mills,
Inc, 174 NLRB 483 (1969), relied on by Respondent, and
find that the instant case significantly differs with respect
to the nature of the violation and its effect on the unit
employees Respondent not only breached its statutory
obligation to bargain with the Association over the premi-
um increase but acted in disregard of its agreement with
the Association that it would first furnish the Association
with the relevant information and bargain with the Associ
ation before instituting a rate increase Indeed absent this
agreement it is very likely that the Association would not
have agreed to an increase in the premium during the term
of the bargaining agreement Moreover, even after the ex-
piration of the existing collective-bargaining agreement
Respondent unreasonably delayed furnishing the Associa-
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tion with information necessary for intelligent bargaining
over the LTDI and has failed to fully furnish the Associa-
tion with the information which it needs to intelligently
bargain over the increase Lastly, the impact of the unlaw-
ful unilateral action on the unit employees in Combined
Paper Mills was almost de minimis where, as here, there is
no such showing 12 For all of these reasons the Board's
remedy in Combined Paper Mills is not appropriate to rem-
edy t ., instant unfair labor practices
General Counsel and the Charging Party urge that in
addition to reimbursing employees for the increased premi-
um and reinstating the old premium pending good-faith
bargaining over the matter that Respondent pay long-term
disability insurance benefits to employees who canceled
their coverage because of the premium increase and there-
after incurred disability which would have been compensa-
ble under the long-term disability insurance coverage This
remedy is not appropriate, in my opinion, because it would
be too speculative to identify the particular employees, in
this category, who suffered as the result of the
Respondent's unlawful conduct Moreover, there is no evi-
dence that the premium increase was calculated to create a
situation so unbearable that the unit employees would be
forced to drop the insurance nor is this a situation where
the increase was imposed because of the employees union
activities In other words, the increase was not an illegal
condition of employment in the sense that it was motivated
by a desire to undermine the Association or discriminate
against the unit employees To the contrary, the increase
was motivated by legitimate business considerations For
all of these reasons, I shall not recommend that Respon-
dent make whole employees for insurance benefits lost,
nor, for the same reasons, shall I grant the Charging Party's
further requests that Respondent be ordered to allow those
employees who canceled their disability insurance because
of the increased premium to ` re-enroll ' without evidence
of insurability and that Respondent be further ordered to
allow anyone who can display he would have enrolled but
for the premium increase to enroll retroactively
Finally, the Charging Party citing Tudee Products, Inc
194 NLRB 1234 (1972), urges that Respondent should be
required to reimburse the Board and itself for the expenses
incurred in the preparation, presentation, and conduct of
this case The Board, however, has only awarded such cost
reimbursement remedy in limited circumstances where
frivolous defenses were raised by a litigious Respondent
strictly to delay or avoid its obligations under the Act See
Heck's, Inc, 215 NLRB 765 (1974), Union de Tronquistas
de Puerto Rico, Local 901, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of Amer
ica (F F Instrument Corporation), 210 NLRB 1040 (1974)
In my opinion this is not the instant situation for although
a number of the defenses advanced by Respondent were
frivolous its main defense of waiver was plainly a debat-
12 Although no evidence on this point was specifically placed in the rec
ord it appears from the job classifications and pay scale contained in the
most recent agreement that a significant number of the unit employees
earned at least $1 200 a month on May 1 1974 Accordingly these employ
ees monthly premium cost was increased from $4 68 to $11 76 or by $7 08
a month whereas the increase involved in Combined Paper Mills averaged
only $1 29 per month
able one which was dependent in part upon a disputed
factual issue Moreover, the unlawful conduct engaged in
by Respondent cannot be characterized as "aggravated
and pervasive ' in the sense of the conduct engaged in by
the respondents in those cases where the Board has granted
this type of a remedy For these reasons, I deny the Charg-
ing Party s request for this extraordinary remedy
[Recommended Order omitted from publication ]
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
JERROLD H SHAPIRO, Administrative Law Judge On Feb-
ruary 21, 1975, I issued a Decision in the above-entitled
proceeding finding that Respondent had engaged in unfair
labor practices within the meaning of Section 8(a)(5) and
(1) of the Act by unilaterally increasing the cost of the unit
employees' long-term disability income insurance premi-
um, without first bargaining with the Association, and by
refusing to furnish, and its delay in furnishing, the Associa
tion with relevant and necessary information concerning
the premium increase The case was transferred to the
Board, and the parties filed exceptions and supporting
briefs with the Board
Thereafter, on April 4, 1975, Respondent filed with the
Board a motion to reopen record to admit additional ex-
hibits and, on June 30, 1975, filed a supplemental motion
to reopen record to admit stipulation of facts as an addi
tional exhibit Also, on June 30, 1975, the General Counsel
filed a brief in answer to Respondent's exceptions and a
brief in opposition to Respondent's original motion, and
the Charging Party filed a brief in answer to Respondent's
exceptions On August 6, 1975, the General Counsel filed a
brief in opposition to Respondents supplemental motion
Thereafter, on August 6, 1975, the Board issued a Notice
to Show Cause upon the parties as to why Respondent's
motions should not be granted Respondent and the Gen
eral Counsel filed responses thereto
The Board, on October 29, 1975, issued an order re-
opening record wherein it ordered that I conduct a further
hearing for the following purposes
[T]o receive testimony and other evidence on the is-
sues raised by the parties post-decisional briefs,
Respondents motions and the proposed exhibits con-
tained therein, the General Counsel's oppositions
thereto, and the parties' responses to the Notice to
Show Cause, with respect to the unfair labor practices
previously found by the Administrative Law Judge
and the continuing appropriateness of his recom-
mended remedy
Pursuant to this order, a supplemental hearing was con-
ducted on January 20, 1976
Based on the testimony and other evidence adduced at
the supplemental and initial hearings (the record), from my
observation of the demeanor of the witnesses, and having
considered the parties' briefs, I have decided to affirm the
findings, conclusions, and recommended Order contained
in the initial Decision only to the extent that they are con-
sistent herewith
McDONNELL DOUGLAS CORPORATION 893
FINDINGS OF FACT
The record as it now reads convinces me that the facts
found in the initial Decision should be modified in the
following pertinent respects
1 The parties, as found in the initial Decision, during
the negotiations for the 1972-74 collective-bargaining
agreement agreed that the premium for long-term disabili-
ty income insurance (LTDI) would be 79 cents per month
per $100 of participating employee's monthly base salary,
with Respondent paying 40 cents of this amount But, since
they recognized that there was a substantial possibility that
the insurance carrier, Connecticut General, would raise the
premium during the term of the collective-bargaining
agreement, they agreed that the premium would be fixed
only for the first year of the agreement Not discussed in
the original Decision was whether the parties decided who
would pay the increase in the premium The record now
convinces me that the parties agreed that any increase in
the LTDI premium during the term of the agreement
would be paid solely by the employees and that Respon-
dent was not obligated to bargain with the Association
over the allocation of the increase This conclusion is based
on the testimony of Milan Chance, Respondent's spokes-
person during the collective-bargaining negotiations, the
testimony of Robert Leventhal, the Association's spokes-
person during the negotiations, the Association's admis-
sion made in a related court proceeding and its reaction to
the increase, Leventhal's written admission, and the terms
of the collective-bargaining agreement
Chance testified that during the collective-bargaining ne-
gotiations the parties agreed "that in the event there was an
increased premium during the course of the contract, that
all the company would pay would be 40 cents, that the rest
of it was the employee's responsibility to pay if he wanted
the coverage " Consistent with Chance's testimony, on
May 21, 1975, Leventhal and Chance on behalf of Respon-
dent and the Association entered into a written stipulation
which in pertinent part states
During the 1971-72 negotiations, the parties recog-
nized the substantial possibility that Connecticut Gen-
eral would increase the Long Term Disability premi-
um during the three year term of the parties' collective
bargaining agreement
It was further agreed that any increase in long term
disability premiums mandated by Connecticut Gener
al would be borne by the employees
Leventhal, at the reopened hearing, in effect admitted that
this stipulation was accurate and testified that the parties
had agreed that, if there was an increase in the premium
during the contract term, Respondent was not obligated to
pay more than it was already paying, nor was it obligated
to bargain with the Association over a request that Re-
spondent increase its share of the cost In this regard Le-
venthal testified "the contract was such that if the [Respon
dent] did not want to pay more than the 40 cents that was
it and we had no contractual right to insist upon their pay-
ment of any, and we had no right to insist that we [could]
continue the [LTDI] program without their agreement The
matter was open for negotiations and their right to refuse to
bargain on it or to refuse to agree to pay any more than
what the contract set forth was there " I
As Leventhal acknowledges, the Respondent's right to
allocate a premium increase during the term of the collec-
tive-bargaining agreement solely to the employees is found
in the collective-bargaining agreement which in relevant
part reads
2 Contributions
a The cost of the Plan will be borne by the company
except ror (2) Long Term Disability Income
Insurance
b Employees contributions are required for (2)
Long Term Disability Income Insurance Employee
will contribute 390 per $100 o[f] payroll This rate is
subject to change on 1 April 1973
When the Association was notified by Respondent that
Connecticut General intended to increase the LTDI premi-
um and that the entire increase would be borne by the
employees, the Association did not question Respondent's
right to allocate the additional cost in this manner, rather,
the tenor of the Association's correspondence to Respon-
dent was that Respondent was obligated to transmit infor-
mation to the Association so that the Association could
determine whether Respondent had fulfilled its fiduciary
duty toward the employees by protecting them against an
unjustified premium increase Indeed, in a lawsuit institut-
ed on July 17, 1974, against Respondent in connection with
the premium increase, the Association admitted in effect
the vice in the increase was that Respondent had agreed to
an unreasonable increase, not that Respondent had passed
along the increase to the employees, and further admitted
that the parties had agreed that the premium increase
"would be paid by the employees "
Based on the foregoing, I find that the record establishes
that the parties during the bargaining negotiations agreed
that any increase in the LTDI premium put into effect
during the term of the collective bargaining agreement
would be paid solely by the employees and agreed that
Respondent was not obligated to bargain with the Associa-
tion concerning a request that Respondent increase its
share of the premium
2 In the original Decision I found during the negotia-
tions which resulted in the 1972-74 collective-bargaining
agreement that Respondent, through its chief negotiator
Chance, verbally agreed that in the event the LTDI premi-
um was raised during the term of the agreement, Respon-
dent would give the Association advance notice and also
furnish it with information to evaluate the raise and would
meet with the Association for the purpose of reviewing this
information This finding was based on Leventhal s testi-
Leventhal also admitted that Chance on at least one and possibly
several occasions commented that the company was committing up to the
40 cents and no more And I understood that commitment [and] I
responded and I acknowledged that his position was that he was not coin
mitted to pay any more than 40 cents I understood and acknowledged that
commitment on his part
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mony Chance did not testify At the reopened hearing
Chance, as well as Leventhal, testified and Chance sharply
contradicted Leventhal in significant respects
Leventhal and Chance agree that on several occasions
during the negotiations Leventhal asked that Respondent
give the Association a letter stating in substance that in the
event of an increase in the LTDI premium during the term
of the agreement that Respondent would provide the Asso-
ciation with information concerning the increase and sub-
mit the LTDI for competitive bidding It is undisputed that
at all times during the negotiations that Chance refused to
provide this letter and that eventually the Association with-
drew this request At this point the testimony of Leventhal
and Chance diverges Leventhal's testimony at the re
opened and original hearings is to the effect that Chance,
although refusing to commit Respondent in writing, once
or twice assured Leventhal that, if the LTDI premium was
increased during the term of the collective-bargaining
agreement, Respondent would supply the Association with
the information relevant to the increase and would meet
with the Association to discuss the matter prior to imple-
menting the increase Chance denies this He testified that,
not only did he refuse to furnish Leventhal with a letter
promising Respondent would provide the requested infor
mation, but at all times during the negotiations he advised
Leventhal that, in the event the LTDI premium was in-
creased during the term of the collective-bargaining agree-
ment, Respondent would not supply the Association with
information about the increase, nor would it put the LTDI
plan out for competitive bidding Rather, Chance testified
that he told Leventhal that Respondent would only furnish
such information at the end of the agreement for the
Association's use in negotiating a new agreement Chance
further testified that early in March 1974, toward the end
of the negotiations, he specifically warned Leventhal that if
the Association accepted Respondent's LTDI proposal
that it be accepted without any allusion that during the
term of the agreement, in the event there was an increase in
the premium, that Respondent would supply information
about the increase and further advised Leventhal that, if
the Association believed that an agreement to supply infor-
mation was part of Respondent's proposal, Leventhal
should reject the proposal inasmuch as no information
would be forthcoming Leventhal indicated that the Asso-
ciation intended to accept the Respondent's LTDI propos-
al
Chance did not testify at the original hearing and, inas-
much as Leventhal impressed me as a trustworthy witness,
I credited Leventhal At the reopened hearing Leventhal
again testified and Chance also testified, thus, I was able to
assess their respective demeanors Chance impressed me as
the more trustworthy witness and I credit his testimony as
set out above In addition, I am of the opinion that
Chance's version of what took place is more reasonable
and probable That Chance refused to agree to Leventhal's
request for a written promise to furnish the information
during the term of the agreement yet in the same breath
verbally agreed to furnish the information does not ring
true There is no evidence that the parties had the practice
of making verbal agreements rather than incorporating
them into the collective-bargaining agreement Nor is there
evidence that other than this alleged oral agreement that
the parties supplemented the terms of the 1972-74 agree-
ment with other verbal agreements To the contrary, the
record shows that the parties normally supplement the
terms of their collective-bargaining agreements by the use
of letters which are considered a part of their agreements
Under the circumstances, I cannot believe that Chance
would promise to furnish the Association with LTDI pre-
mium information during the term of the agreement but
refuse to make the promise a part of the collective-bargain-
ing agreement by reducing it to writing as was the custom
of the parties 2
Finally, in evaluating the reliability of Leventhal, I have
considered the fact that Leventhal's testimony is not con-
sistent with the affidavit he furnished the Board in connec-
tion with the Association's unfair labor practice charge
The charge, filed on June 28, 1974, alleges in substance
that Respondent violated the Act by refusing to comply
with Leventhal's April and May 1974 requests for informa-
tion pertaining to the increase in the LTDI premium On
July 8, 1974, in support of this charge Leventhal furnished
the Board an affidavit which is not consistent with his testi
mony that Chance unequivocally agreed that before the
insurance premium was increased that Respondent during
the term of the agreement would furnish to the Association
information about the increase and meet with the Associa-
tion to discuss the matter 3 Under the circumstances, it is
not surprising that Leventhal's testimony during the origi
nal hearing on this point was elicited initially on cross-
examination rather than by the General Counsel during
direct examination At the reopened hearing Leventhal was
confronted with his affidavit and admitted that the affida
vit did not, as Leventhal had testified, attribute a promise
by Chance to furnish information and to meet with the
Association about the increase in the LTDI premium
Thereafter, Leventhal did not satisfactorily explain why he
testified that Chance had specifically made these promises
yet failed to inform the Board about this evidence in the
affidavit on which the Associations unfair labor practice
charge is based
Based on the foregoing, I credit Chance's testimony that,
during the negotiations resulting in the 1972-74 agreement,
Respondent did not agree to furnish the Association with
information pertaining to an increase in the LTDI premi-
um during the term of the agreement or to meet with the
Association to discuss the increase prior to its being placed
2
Leventhal testified that Chance gave no explanation for refusing to re
duce into writing what he was willing to promise verbally and that Leven
that did not see fit to ask for an explanation for this strange conduct
7 I. pertinent part the affidavit reads
I told the company representatives that the Association would
accept the alternative of having the premium increased to 790 per $100
of base monthly pay I also said that if this rate were increased
again the Association should be informed before the increase went into
effect I said that if there was going to be an increase in 1 year the
company should know in nine months and in that case I would expect
the company to give the Association at that time a report on the expert
ence under the plan and that the Association would want the plan put
up for bidding again Chance then said we 11 tell you if they re Isic]
going to be any changes and we 11 evaluate it at that time To the best
of my recollection this is all that was said about what notice if any the
company would give the Association in the event of an increase
McDONNELL DOUGLAS CORPORATION 895
into effect, rather the Association only agreed to notify the
Respondent about the increase and specifically refused to
furnish information about the increase I further find that
the Association acquiesced with Respondent's bargaining
position
3 The finding in the original Decision that "Respon-
dent thereafter refused to discuss the increase with the As-
sociation' was an inadvertance It is undisputed that Re-
spondent never refused a request by the Association to
meet for the purpose of discussing the LTDI or to specifi-
cally discuss the premium increase
4 The record, as developed initially, was silent about
the events leading up to the insurance carrier's decision to
institute a premium increase in the LTDI and the commu-
nication between the insurance carrier and Respondent At
the reopened hearing the following evidence was presented
on this subject
The contract between the insurer, Connecticut General,
and Respondent provides in pertinent part that upon 31
days' notice the insurer has the right to cancel the LTDI as
of any premium due date, if the total number of insured
employees is less than 75 percent of the total number of
eligibles and, after the first 3 years, the insurer upon 31
days' notice may increase the premium each year Upon
being notified by the insurer that it intends to increase the
premium, the Respondent has three options (1) accept the
increase, (2) change the terms of the insurance, i e, bene-
fits, thus reducing the cost, or (3) cancel the insurance
On February 14, 1974, Connecticut General, by letter,
informed Respondent that effective April 1, 1974, it in-
tended to increase the LTDI premium from the current
rate of 79 cents per $100 of payroll to $1 38 per $100, and
in support of the increase explained in detail its experience
with Respondent's employees covered from the plan's in-
ception in 1969 through November 30, 1973 Thereafter, in
February and March 1974 representatives of Respondent
and Connecticut General met and, among other matters,
discussed the increase in the LTDI premium Respondent
primarily questioned the accuracy of figures used by Con-
necticut General for the "factor reserve," the reserve for
unreported claims expected to be reported in the future-
and submitted certain information to Connecticut General
which would enable Connecticut General to better evalu-
ate the accuracy of the "factor reserve " Connecticut Gen-
eral considered this information and then on March 22,
1974, by letter, informed Respondent that upon further
consideration it was still of the opinion, for reasons which
it explained, that the premium increase was justified and
further stated
If the total increase is passed on to the employee, we
will continue coverage and re evaluate our position re-
garding the participation (in case it deteriorates) in six
or seven months (probably after negotiations) The in-
crease was to become effective April 1st, howev-
er, if proper notification to the employees is necessary,
we would extend this to May 1st
Upon receipt of this correspondence, the Respondent's
vice president of personnel considered the matter and, on
or about April 22, 1974, decided that Respondent would
continue the LTDI at the increased premium
Analysis
It is settled that "an employer violates Section 8(a)(5)
and (1) when, absent waiver by the appropriate bargaining
agent of its employees, it changes wages or hours of any of
its employees, or alters any other valuable incident of their
employment, without allowing the bargaining agent an ap-
propriate and meaningful opportunity to bargain about the
change or alteration " N L R B v St Louis Cordage Mills,
424 F 2d 976, 979 (C A 8, 1970) See also N L R B v C &
C Plywood Corporation, 385 U S 421, 425, 430 (1967) This
obligation continues during the term of an existing agree-
ment B F Goodrich Company, 195 NLRB 914, 915
(1972), Jacobs Mfg Co, 94 NLRB 1214 (1951), enfd 196
F 2d 680 (C A 2) Here the LTDI premium increase, for
the reasons set forth in the original Decision, constitutes a
mandatory subject of bargaining and when an employer
passes such an increase along to its employees, it ordinarily
would have an obligation under the Act to first afford the
employees' bargaining agent a reasonable opportunity to
bargain about the matter and to furnish the bargaining
agent, upon request, information relevant to the increase
Respondent urges that it did not have such an obligation
because the Association, for the duration of the collective-
bargaining agreement, had waived its right to bargain
about the LTDI premium increase and to be furnished
with information about the increase
There must be a showing that a party has consciously
yielded its statutory right to establish a waiver of such a
right Whether there has been such a "clear and unmistak-
able" relinquishment of a right is determined on the basis
of the contractual language as well as the facts and circum-
stances surrounding the making of the contract Leeds &
Northrup Company v NLRB , 391 F 2d 874, 877-878
(CA 3, 1968) However, as the Board has recently ob-
served, the "clear and unequivocal" rubric does not neces-
sarily provide an instant or self-evident answer to the ques
tion of whether there has been a waiver of statutory rights
in a given case Valley Ford Sales 211 NLRB 834 (1974),
Radioear Corporation, 214 NLRB 168 (1974), and Bancroft
Whitney Co, 214 NLRB 26 (1974) Relevant are such
things as the terms of the collective-bargaining agreement,
the evidence of the negotiations which resulted in the
agreement, and whether or not there has been acquiescence
by one of the parties See Valley Ford Sales, supra, and
cases there cited Guided by these principles, I am persuad-
ed that the record, as urged by Respondent, establishes
that the Association for the duration of the collective-bar
gaining agreement waived its statutory right to bargain
over the LTDI premium and to secure information from
the Respondent about the premium's increase 4
The subject of the expected increase in the LTDI premi-
um during the term of the 1972-74 collective-bargaining
agreement was fully discussed during the negotiations
which resulted in the agreement Leventhal, the
Association's spokesperson, and Chance, the Respondent's
spokesperson, agreed that after the first year of the agree-
ment that the LTDI premium could be increased and that
° I have not in view of this finding considered Respondents several
other defenses
896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the increase would be paid solely by the employees and
that Respondent was not obligated to bargain with the As-
sociation over the allocation of the increase Likewise, the
subject of whether the Association was entitled to informa-
tion explaining the increase was discussed on several occa-
sions Leventhal took the position that prior to implement-
ing an increase in the premium Respondent would supply
information to the Association explaining the increase and
submit the LTDI for competitive bidding Chance opposed
this proposal, taking the position that during the term of
the collective bargaining agreement Respondent would not
furnish such information and would not submit the LTDI
for competitive bidding Chance's position, explained to
Leventhal, was that Respondent would simply give the As-
sociation advance notice about the fact of the increase and
would furnish information about the increase only at the
end of the agreement for the Association's use in negotiat-
ing a new agreement In the face of Chance's opposition,
Leventhal withdrew the Association's proposals that it be
furnished with information during the contract's term and
that the LTDI be submitted to other insurance carriers for
bidding Thereafter, at the end of the negotiations at a
meeting where Leventhal indicated the Association intend-
ed to accept Respondent's LTDI proposal Chance made it
clear to Leventhal that there was nothing contained in this
proposal which obligated Respondent to furnish informa-
tion during the term of the collective-bargaining agreement
about the expected increase in the premium and Respon-
dent would not furnish this information during the
agreement's term Leventhal made no reply and, in the face
of this warning, indicated that the Association intended to
accept Respondent's LTDI proposal The proposal which
was accepted by the Association and forms the basis of the
parties' contractual agreement for the LTDI, as Leventhal
could see, contains a "zipper clause" stating `all provisions
and items proposed by the parties not contained in this
offer are considered withdrawn by the parties "
Respondent's LTDI proposal which was accepted by the
Association admittedly contains the parties' entire agree-
ment on this subject 5 It indicates the possibility of an in-
crease in the premium during the term of the collective-
bargaining agreement, but consistent with Chance's testi-
mony of what occurred during negotiations simply
indicates that, if there is such an increase in the premium,
"the Association will be notified prior to any change being
effected " There is no mention of any obligation by Re-
spondent to either bargain with the Association or furnish
information about this increase The collective-bargaining
agreement also is silent on these matters, simply stating
that "this rate [referring to the premium] is subject to
change on April 1, 1973," and contains a broad manage-
ment rights clause, stating that unless otherwise prohibited
by the collective-bargaining agreement the "management
of the plants are vested exclusively in the company "
All of the foregoing circumstances, including the full and
extensive negotiations on the matters in dispute and the
terms of the parties' agreement, convince me that the ques-
tion of the increase in the LTDI premium as well as the
Associations right to be consulted and provided with in-
5 Leventhal so testified
formation about the increase were fully discussed and con-
sciously explored by the parties and that the Association
waived or consciously yielded its interest in these matters
for the duration of the collective-bargaining agreement 6 It
follows, therefore, that Respondent has not violated the
Act by unilaterally increasing the LTDI premium, without
bargaining with the Association, or by refusing to furnish
the Association with information concerning the premium
increase so that the Association could intelligently admin-
ister the collective-bargaining agreement 7 However, for
the reasons set forth in the original Decision I remain con-
vinced that Respondent did not comply with its statutory
obligation to furnish information to the Association for the
negotiation of a collective-bargaining agreement as distinct
from the administration of the existing agreement There is
no evidence that the Association waived this statutory
right 8 To the contrary, Respondent admittedly assured the
Association that this information would be forthcoming
for its use in the negotiation of a new collective-bargaining
agreement Nevertheless, as described in the original Deci-
sion, the information which was furnished on November
19, 1974, was furnished only after an unreasonable delay
and did not fully comply with the Association' s requests 9
6 The Associations acquiescence with Respondents bargaining position
concerning the furnishing of information during the term of the agreement
about the premium increase is obviously a significant factor in determining
whether the Association waived its statutory right to this information It is
also strong evidence that for the duration of the agreement the Association
likewise waived its right to be afforded an opportunity to bargain about the
increase For the clear import of Respondents bargaining position ac
quiesced in by the Association and which I am sure the Association under
stood was that Respondent was not obligated to furnish information about
the LTDI premium increase during the term of the agreement because the
subject of the premium increase was in Respondents view not a proper
subject for further bargaining during the term of the agreement
Insofar as it is based on the theory that Respondent was obligated to
furnish information so as to enable the Association to intelligently adminis
ter the 1972-74 collective bargaining agreement the complaint lacks merit
regardless of whether the record as found above establishes that the Asso
ciation waived its statutory right to this information For it was necessary to
make a binding construction of the collective bargaining agreement in de
cidmg whether Respondent was privileged to unilaterally increase the cost
of the employees LTDI premium (see N L R B v C & C Plywood Corp 385
U S 421 (1967) ) and I have concluded that Respondent did have the con
tractual and statutory right to institute the increase without first bargaining
with the Association Under this circumstance the information requested
by the Association for the purpose of evaluating the bona fides of the
increase was not necessary or relevant in the administration of the collec
tive bargaining agreement because the agreement gave Respondert unila
teral control over the matter Indeed Leventhal in the affidavit submitted
to the Board states that although certain matters relating to the LTDI may
be subject to the contractual grievance machinery the subject of the rate
increase is not subject to the grievance procedure
s I have considered the fact that during the 1971-72 negotiations that
Chance indicated that for the next negotiations Respondent would furnish
the Association with the same type of information that Respondent fur
nished it in December 1971 The record does not however establish that the
Association agreed to this limitation or otherwise waived its right to be
provided with all of the information pertaining to the LTDI premium which
was relevant for collective bargaining purposes
9 In the original Decision I found that the information given the Associa
tion on November 19 1974 was incomplete In arriving at this finding I
relied in part on the fact that Chance without limitation had promised
Leventhal that Respondent would supply it with information to evaluate an
increase in the LTDI premium This finding for the reasons set forth earlier
is now without support in the record Accordingly I have carefully recon
sidered this issue and for the other reasons set forth in the original Decision
remain convinced that the November 19 1974 information furnished by the
Respondent was incomplete
McDONNELL DOUGLAS CORPORATION 897
Accordingly, I find that Respondent violated Section
8(a)(5) and (1) of the Act by refusing to furnish the Associ-
ation with information concerning the LTDI premium
which was necessary for the Association to intelligently ne-
gotiate the terms of a collective-bargaining agreement 10
This conclusion, as described in the original Decision rests
on the finding that Respondent furnished the requested
information only after an unreasonable delay and did not
fully comply with the Association's request Even assum-
ing, however, that the information supplied to the Associa-
tion on November 19, 1974, was complete, it still does not
explain Respondent's delay in furnishing the information
which, as the evidence introduced at the reopened hearing
shows, was substantially in Respondent's possession since
February 1974 Under the circumstances, I view the unrea-
sonable delay, which has never been explained, in sup-
plying the relevant information, by itself, as warranting the
conclusion that Respondent violated Section 8(a)(5) and
(1) of the Act N L R B v General Electric Company, 418
F 2d 736, 752-753 (CA 2, 1969), Florida Machine &
Foundry Company 174 NLRB 1156 (1969), and Pennco,
Inc 212 NLRB 677 (1974), and cases cited therein
Upon the basis of the findings of fact set forth in the
original Decision, as modified by the foregoing findings of
fact, and the entire record, I make the following
CONCLUSIONS OF LAW
1 McDonnell Douglas Corporation, the Respondent, is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act
2 Southern California Professional Engineering Associ-
ation, the Association, is a labor organization within the
meaning of Section 2(5) of the Act
3 All employees employed by Respondent in the divi-
sions or components of Respondent known as McDonnell
Douglas Astronautics Company-West and the Douglas
Aircraft Company, including the Tulsa location, (a) as
have been certified by the National Labor Relations
Board, (b) as agreed upon between Respondent and the
Association to be represented by the Association, and (c)
who are employed in the job classifications listed in Ap-
pendix A of the collective-bargaining agreement effective
March 27, 1972, constitute a unit appropriate for the pur-
poses of collective bargaining within the meaning of Sec-
tion 9(b) of the Act
4 At all times material, the Association has been the
exclusive representative of all the employees in the afore-
said bargaining unit for the purposes of collective bargain-
ing within the meaning of Section 9(a) of the Act
5 By refusing the Association's request for information
concerning the long-term disability insurance premium
paid by the employee and by failing to furnish said infor-
mation within a reasonable period of time, the Respondent
10 The record establishes that following the issuance of the original Deci
sion Respondent furnished the Association all of the relevant information
which the Association needed to intelligently bargain about the LTDI pre
mmm However Respondents ultimate compliance with the Associations
requests for information after the issuance of the original Decision does
not render unnecessary an order that Respondent cease and desist from like
conduct in the future Pennco Inc 212 NLRB 677 (1974)
has engaged in unfair labor practices within the meaning of
Section 8(a)(5) and (1) of the Act
6 The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec
tion 2(6) and (7) of the Act
7 Respondent has not otherwise violated the Act
THE REMEDY
Having found that the Respondent, McDonnell Douglas
Corporation, has engaged in violations of Section 8(a)(5)
and (1) of the Act, I shall recommend that it cease and
desist therefrom and take certain affirmative action in or-
der to effectuate the policies of the Act
I have found that Respondent did not act impermissibly,
within the meaning of the Act, in instituting the premium
increase or in refusing to furnish the Association with in-
formation prior to the increase Accordingly, the reim
bursement remedy recommended in the initial Decision is
without basis and does not constitute an appropriate reme-
dy for Respondent's unlawful refusal to furnish informa-
tion found herein Likewise, Respondent's ultimate compli-
ance with the Association's request for information renders
an order requiring disclosure no longer appropriate But,
contrary to Respondent's contention, I do not believe that
the furnishing of the information, which occurred after the
initial Decision and in response to the order in that Deci-
sion, obviates the need for a Board order to remedy the
unfair labor practices found
Upon the findings of fact set forth in the original Deci-
sion, as modified by the foregoing findings of fact, conclu-
sions of law, and the entire record, and pursuant to Section
10(c) of the Act, I hereby issue the following recommend-
ed
ORDER 11
Respondent, McDonnell Douglas Corporation, Santa
Monica, California, its officers, agents, successors, and as-
signs, shall
1 Cease and desist from
(a) Refusing, in connection with the negotiation of a
collective-bargaining agreement, to bargain collectively
with the Southern California Professional Engineering As-
sociation as the bargaining representative of the employees
in the bargaining unit described in the section of this Sup-
plemental Decision entitled "Conclusions of Law," by re-
fusing to furnish the Association information concerning
the long-term disability insurance premium paid by the
unit employees and by failing to furnish said information
within a reasonable period of time
(b) In any like or related manner interfering with the
efforts of the Association to bargain collectively with it or
on behalf of the unit employees
2 Take the following affirmative action which is
deemed necessary to effectuate the purposes of the Act
11 In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board the findings
conclusions and recommended Order herein shall as provided in Sec
102 48 of the Rules and Regulations be adopted by the Board and become
its findings conclusions and Order and all objections thereto shall be
deemed waived for all purposes
898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(a) Post at its place of business in Santa Monica, Cali-
fornia, and other facilities where bargaining unit employ-
ees are employed, copies of the attached notice marked
"Appendix " 12 Copies of the notice, on forms provided by
the Regional Director for Region 21, after being duly
signed by Respondent's representative, shall be posted by
it for 60 consecutive days thereafter, in conspicuous places,
including all places where notices to employees are cus-
tomarily posted Reasonable steps shall be taken by the
Respondent to insure that said notices are not altered, de
faced, or covered by any other material
(b) Notify the Regional Director for Region 21, in writ-
ing, within 20 days from the date of this Order, what steps
the Respondent has taken to comply herewith
IT IS FURTHER ORDERED that the complaint be dismissed
insofar as it alleges violations of the Act not specifically
found
12 In the event that the Boards Order is enforced by a Judgment of a
United State Court of Appeals the words in the notice reading Posted by
Order of the National Labor Relations Board shall read Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively with the
Southern California Professional Engineering Associa-
tion in connection with the negotiation of a collective-
bargaining agreement by refusing to furnish the Asso-
ciation information concerning the long-term disabili-
ty income insurance premium paid by the employees
the Association represents and by failing to furnish
said information within a reasonable period of time
WE WILL NOT in any like or related manner interfere
with the efforts of the Association to bargain collec-
tively on behalf of the employees represented by the
Association
MCDONNELL DOUGLAS CORPORATION