McDonnell Douglas Corp.

National Labor Relations Board - Board Decisions

Sep 24, 1993

312 N.L.R.B. 373 (N.L.R.B. 1993)

373
312 NLRB No. 62
MCDONNELL DOUGLAS CORP.
1 On June 3, 1992, Administrative Law Judge Gerald A. Wacknov
issued the attached decision. The General Counsel filed exceptions
and a supporting brief and the Respondent filed an answering brief.
2 In their answer to the complaint, the Respondents admit that they
constitute a joint employer of the McDonnell Douglas Aerospace In-
formation Services Company (MDAIS) employees working at the in-
stant Huntington Beach, California facility, which group includes the
particular employees in question in this case. The Respondents are
collectively referred to in this case as the Respondent.
McDonnell Douglas Corporation; McDonnell Doug-
las Electronic Systems Company, a Division of
McDonnell Douglas Corporation; and McDon-
nell Douglas Aerospace Information Services
Company, a Division of McDonnell Douglas
Corporation, Single and/or Joint Employers
and Southern California Professional Engineer-
ing Association and McDonnell Douglas Tulsa,
a Division of McDonnell Douglas Corporation;
McDonnell Douglas Space Systems Company, a
Division of McDonnell Douglas Corporation;
and Douglas Aircraft Company, a Division of
McDonnell Douglas Corporation, Parties to the
Contract. Case 21–CA–27479
September 24, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
Exceptions filed to the judge’s decision1 present the
issue of whether the Respondent2 unlawfully removed
certain employees from the bargaining unit upon their
December 1989 change of assignment from one to an-
other of the Respondent’s subsidiary division compa-
nies, where they continued without interruption to do
the same work in the same place under the same im-
mediate supervision as before.
A threshold procedural issue is whether to defer
consideration of the above substantive issue to the par-
ties’ contractual grievance-arbitration procedure.
The National Labor Relations Board has considered
the exceptions in light of the record and briefs and has
decided to affirm the judge’s rulings, findings, and
conclusions only to the extent consistent with this De-
cision and Order.
For the reasons fully discussed below, and contrary
to the judge’s recommendation, we do not defer con-
sideration of the issue to the parties’ grievance-arbitra-
tion procedures. On the merits, we find that the Re-
spondent has violated Section 8(a)(5) and (1) of the
Act.
I. BACKGROUND
A. Bargaining Unit and Respondent’s
Organizational Background
The facts of this case are complex, but can be sum-
marized as follows.
The Union has represented certain of the Respond-
ent’s professional technical and engineering employees
under a series of collective-bargaining agreements. The
current agreement (the 1990–1993 agreement) is for
March 5, 1990, through February 28, 1993. The most
recent previous agreement (the 1987–1990 agreement)
was for February 9, 1987, through December 3, 1989,
extended to March 5, 1990.
The 1987–1990 agreement covered employees in
certain job classifications in the Douglas Aircraft Com-
pany (DAC), the McDonnell Douglas Astronautics
Company-Huntington Beach (MDAC), and McDonnell
Douglas-Tulsa (MDT). These three companies are
components of the parent company, McDonnell Doug-
las Corporation (MDC). Among the bargaining unit
employees covered by the contract were those in the
job classifications (as listed in ‘‘Appendix A’’ of the
contract) of computing analysts, computing engineers,
computing specialists, and senior computing special-
ists. Appendix A also expressly covered certain em-
ployees in the above four classifications who were em-
ployed by the McDonnell Douglas Aerospace Informa-
tion Services Company (MDAIS), which was also a
component company of MDC, but which was not itself
a named employer party to the contract.
MDAIS sold computer and engineering information
services, and leased computer and engineering profes-
sional employees (unit and nonunit), to various compo-
nent companies of the Respondent (including the em-
ployer parties to the contract), who in turn paid
MDAIS for these services and the leased employees.
Approximately 50 MDAIS unit employees were leased
to MDAC and worked side-by-side with MDAC unit
and nonunit employees at Huntington Beach.
In December 1988, MDAC was reorganized into
two new component companies of MDC: McDonnell
Douglas Space Systems Company (MDSSC) and
McDonnell Douglas Electronic Systems Company
(MDESC), both of which continued to operate at the
former MDAC location in Huntington Beach. MDAC’s
unit and nonunit employees were reassigned to, and
became employees of, either MDSSC or MDESC, de-
pending upon the particular nature of their work, with-
out change in representational status.
After this reorganization, unit and nonunit employ-
ees of MDESC and MDAIS worked side-by-side or in
close proximity on the same or similar projects, and
performed the same or similar technical and engineer-
ing duties, under common MDESC first-line technical
and work assignment supervision, with essentially the
same wages, hours, and working conditions. MDESC
supervisors provided MDAIS employees with work as-
signments, priorities, technical direction, performance
reviews, and made recommendations for performance
bonus awards, special training requirements, and salary
adjustments. MDAIS employees, however, also re-
374 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 See fn. 4 of the judge’s decision for a discussion of this term.
4 In this context, the judge’s references to ‘‘MDISC’’ in fn. 6, and
to ‘‘MDSIC’’ in sec. III,B, par. 16, are both apparently typo-
graphical errors. In any event, they are both corrected to read
‘‘MDAIS.’’
ported to MDAIS ‘‘administrative supervisors,’’ for
matters pertaining to their pay, hours, attendance, gen-
eral training, and formal performance evaluation. Thus,
MDAIS employees received their annual performance
evaluations from on-site MDAIS administrative super-
visory-management personnel. As a practical matter,
however, these MDAIS administrative supervisors
would generally consult with the appropriate MDESC
first-line technical supervisors to obtain verification
that their (i.e., MDAIS’) assessment was correct and to
get whatever feedback MDESC could provide to them
at that time. MDESC supervisors could not directly
discipline MDAIS employees, although MDESC man-
agement could return MDAIS employees to MDAIS.
Also, merit increases for MDESC and MDAIS em-
ployees were separately determined by their respective
managements. Finally, MDESC and MDAIS employ-
ees had different career advancement paths through
their respective companies, and employee potential for
such advancement was assessed differently by these
two companies.
B. The Embedded System Software Agreement
In October 1988, a couple of months before the re-
organization of MDAC into MDSSC and MDESC, the
Union and MDAC had entered into a written settle-
ment of a grievance over the unit placement of certain
MDAC employees involved in the development of em-
bedded system software.3 This agreement, referred to
herein as the Embedded System Software Agreement
(ESSA), established written guidelines for determining
present and future unit placement of MDAC (soon to
be MDSSC or MDESC) employees working in various
phases of the embedded software development
lifecycle. Specifically, the parties agreed that employ-
ees working in the definition of system and software
requirements phase, and the system integration and
testing phase of the lifecycle were performing bargain-
ing unit work and therefore would be included in the
unit. But the parties also agreed that employees work-
ing in the preliminary and detailed software design
phase, and the software implementation and testing
phase of the lifecycle were not performing unit work
and therefore would be excluded from the unit. Fi-
nally, the parties agreed ‘‘to continue their efforts to
achieve a practical and mutually satisfactory mecha-
nism to insure compliance with the undertakings set
forth above.’’
The ESSA was applied by mutual agreement of the
parties to resolve the unit placement of eight MDAC
employees. The ESSA was not, however, made appli-
cable to the MDAIS employees leased to MDAC who
were also working in the embedded system software
development lifecycle. Indeed, at the time the ESSA
was finalized and applied to MDAC employees in Oc-
tober 1988, there was no consideration given to apply-
ing it also then or in the future to the MDAIS leased
employees who were also working in the various
phases of the lifecycle. In fact, the MDAIS employees
had not been included in the Respondent’s comprehen-
sive audit of lifecycle job functions leading up to the
finalization of the ESSA.
II. THE CHANGE OF ASSIGNMENT IN ISSUE HERE
In December 1988, shortly after finalization of the
ESSA, and around the same time of the reorganization
of MDAC into MDSSC and MDESC, parent MDC de-
cided to reassign the MDAIS employees to the compo-
nent companies they served. Consequently, these em-
ployees would become employees of the components
themselves.
The first of these changes occurred in June 1989.
About 300 MDAIS employees were reassigned to
DAC. About 75 of these 300 were MDAIS unit em-
ployees. All 75 of them remained unit employees in
DAC, changing their assignment without any change in
their representational status.
About 6 months later, in late December 1989, the
rest of the MDAIS employees were reassigned to
MDSSC and MDESC. About 66 of them were reas-
signed to MDSSC. Fifteen of these 66 were MDAIS
unit employees. All 15 of them remained unit employ-
ees in MDSSC, changing their assignment without any
change in their representational status.
There were 39 MDAIS employees reassigned to
MDESC.4 Thirty-five of them were MDAIS unit em-
ployees. Three of them remained unit employees in
MDESC, changing their assignment without any
change in their representational status. The other 32
MDAIS unit employees were working in the embedded
system software lifecycle. The Respondent applied the
ESSA to them, as new MDESC employees, and deter-
mined that the lifecycle phases in which they were cur-
rently working did not entail unit work as defined by
the ESSA. The Respondent thereupon removed them
from the unit.
It is this removal of former MDAIS unit employees
from the unit upon their change of assignment from
MDAIS to MDESC, without any corresponding change
in duties, tasks, location, or immediate supervision,
that is principally alleged to have violated the Act.
III. THE DEFERRAL ISSUE
In the final paragraph of section III,C of his deci-
sion, the judge found that the instant dispute seemed
to be a situation peculiarly susceptible to resolution
375MCDONNELL DOUGLAS CORP.
5 Jayar Metal Corp., 297 NLRB 603, 608–609 (1990); Paper
Mfrs. Co., 274 NLRB 491, 494–496 (1985), enfd. 786 F.2d 163, 166
(3d Cir. 1986); Marion Power Shovel Co., 230 NLRB 576, 577–578
(1977).
6 E.g., United Technologies Corp., 292 NLRB 248 (1989), enfd.
884 F.2d 1569 (2d Cir. 1989); Bay Shipbuilding Corp., 263 NLRB
1133, 1139–1141 (1982), enfd. 721 F.2d 187 (7th Cir. 1983).
through the grievance and arbitration machinery con-
tained in the parties’ collective-bargaining agreement.
Accordingly, he recommended deferral of the issues to
arbitration and dismissal of the complaint in its en-
tirety. We disagree with the judge’s recommendation
for deferral.
The instant issue—whether the Respondent unlaw-
fully removed the 32 former MDAIS employees from
the bargaining unit—necessarily involves the rights of
these employees to be represented by the Union. Rep-
resentation issues involve the application of basic stat-
utory policy and standards, and are matters for deci-
sion exclusively by the Board, not an arbitrator.5
In recommending deferral, the judge relied on
Transport Service Co., 282 NLRB 111 (1986). And, in
response to the General Counsel’s exceptions to the
judge’s recommendation to defer, the Respondent also
relies on that case, as well as on Leland Stanford Jun-
ior University, 288 NLRB 1129 (1988), and NCR
Corp., 271 NLRB 1212 (1984). We find these cases to
be distingishable from the instant case.
In Transport Service, the relevant unfair labor prac-
tice issue that was deferred to grievance arbitration in-
volved the question of whether certain work performed
by nonunit employees should be performed instead by
employees represented by the charging party union. In
Transport Service, unlike the instant case, there were
no representational questions about whether the
nonunit employees would become represented, or
whether the represented employees would become un-
represented.
In Leland Stanford Junior University, supra, the un-
fair labor practice issue which the employer sought to
have deferred to grievance arbitration was whether the
employer unlawfully failed to furnish the union with
requested information. The Board refused to defer. Al-
though the judge in Leland Stanford speculated that an
arbitrator could resolve a representation question, nei-
ther the General Counsel nor the charging party filed
exceptions and thus that issue was not before the
Board for consideration.
In NCR, supra, the unfair labor practice issue was
whether the employer violated the Act by unilaterally
transferring certain unit work out of the unit and by
contemporaneously eliminating a unit job classifica-
tion. In finding that the employer had not acted unlaw-
fully as alleged, the Board found the dispute to be
solely one of contract interpretation, and that the em-
ployer had acted reasonably on a substantial claim of
contractual privilege, based on its adherence to one of
two equally plausible interpretations of the contract.
But more importantly, however, for purposes of our
analysis of the Respondent’s argument that the instant
unfair labor practice issue should be deferred to griev-
ance arbitration, we note that the employer in NCR did
not seek deferral of the unfair labor practice issue to
the contract’s grievance-arbitration machinery. Indeed,
the Board noted in NCR that deferral was not an issue
before it, and, accordingly, expressly did not find that
deferral was warranted. 271 NLRB at 1213 fn. 7.
In light of the above considerations, and contrary to
the judge’s recommendation, we do not defer the in-
stant dispute to the parties’ contractual grievance-arbi-
tration mechanism. Consequently, we now consider the
merits of the instant dispute.
IV. DECEMBER 1989 REMOVAL FROM THE UNIT
An employer violates the Act when it removes a
substantial group of employees from a bargaining unit,
unless it either (1) obtains the agreement of the union
to do so, or (2) is able to establish that the removed
group is sufficiently dissimilar from the remainder of
the unit to warrant removal.6
A. No Agreement by the Union
The Respondent argues that the Union agreed at the
time of the December 1989 MDAIS-to-MDESC
changes of assignment to permit the Respondent uni-
laterally to apply the October 1988 ESSA to make and
implement initial determinations about which of the
former MDAIS unit employees would remain in or be
removed from the unit as newly assigned MDESC em-
ployees. We find, contrary to the Respondent’s asser-
tion, that the preponderance of the evidence does not
establish that the Union agreed to permit the Respond-
ent to remove MDAIS employees from the unit upon
their change of assignment to MDESC.
At the time of the December 1989 change of assign-
ment of MDAIS employees to MDESC, the parties
were engaged in negotiations for a renewal collective-
bargaining agreement (the most recent agreement had
expired on December 3, 1989, and was ultimately ex-
tended to March 5, 1990, when the parties entered into
their renewal contract).
L. Russell Jansen, MDESC staff senior manager,
employee relations, was questioned at the hearing
about whether he had informed the Union’s chief ne-
gotiator, Executive Director Leonard Ricks, at a meet-
ing just prior to a contract negotiating session in late
November or early December 1989, that the instant
group of 32 MDAIS employees would transfer to
MDESC and be removed from the unit because they
376 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 Contrary to the implication of this question, however, and as seen
from the above discussion of the ESSA, not all ‘‘embedded system
work’’ was nonunit work.
8 Ricks testified that these discussions about MDAIS employees
being reassigned to other companies did not cause him to suspect
that MDAIS unit employees would be removed from the unit upon
such reassignment. As seen above, 6 months earlier, in June 1989,
the first contingent of MDAIS employees had been reassigned to
DAC, with no change in the representational status of any of the ap-
proximately 75 MDAIS unit employees upon their assignment to
DAC.
performed ‘‘embedded system work.’’7 Jansen did not
directly answer the part of the question having to do
with whether he had informed Ricks that the MDAIS
employees were being removed from the unit. Rather,
he answered only that he had informed Ricks of ‘‘the
Company’s decision to reclassify those employees
from the MDAIS Company to [MDESC].’’ Jansen fur-
ther testified, however, that Ricks had replied by stat-
ing that if the Respondent ‘‘proceeded with that, there
would be a Board charge filed.’’ In any event, Jansen’s
testimony does not show that the Union agreed to per-
mit the Respondent unilaterally to remove the transfer-
ring MDAIS employees from the unit.
Ricks testified that during contract renewal negotia-
tions in late 1989, ‘‘there were a couple of very brief
conversations about [the reassignment of employees
from MDAIS to MDESC], which were really inconclu-
sive, I think,’’ and that DAC’s principal negotiator,
Ken Eriksen, general manager of labor/management
partnership, had told Ricks at that time that Eriksen
‘‘didn’t know what was going on and that it was very
confused and that we’d catch up with it later.’’ Eriksen
did tell Ricks that there was ‘‘good language’’ in the
recognition clause of the collective-bargaining agree-
ment, that that was the best ‘‘assurance’’ that the Re-
spondent could give to the Union, and that Ricks
should ‘‘not worry.’’
Ricks testified specifically that he had not agreed
that the Respondent could remove the employees in
question from the unit. Moreover, according to Ricks,
he did not believe that there had been any discussion
during negotiations, or anything that otherwise would
have put the Union on notice, that employees were
going to be removed from the unit.8 According to
Ricks, ‘‘[t]hat simply was not told to us in advance.’’
Ricks testified that the parties did not discuss the re-
moval of the former MDAIS employees from the unit
until January 1990, after the Union found out that the
removals had been effected. According to Ricks, when
the Union did find out about the removals, ‘‘we took
a very consistent position that the people belonged in
our unit, should remain in the unit, and we didn’t care
which company they were assigned to, they belonged
in our unit.’’ Finally, Ricks testified that Eriksen had
made a commitment during contract negotiations that
the Respondent would attempt to resolve classification
matters arising from the reassignment of MDAIS em-
ployees and to place employees where they ‘‘be-
longed’’ after the employees had been transferred and
after the Union saw what the employees were going to
be doing.
In arguing that the Union had agreed in advance to
permit the Respondent unilaterally to remove MDAIS
employees from the unit upon their change of assign-
ment to MDESC, the Respondent relies mainly on the
testimony of its principal negotiator, DAC’s labor gen-
eral manager Eriksen. We find that Eriksen’s testi-
mony, as excerpted and summarized in the following
paragraphs, does not establish that the Union made
such an agreement.
According to Eriksen, almost as soon as negotiations
for a renewal collective-bargaining agreement began in
October 1989, the Union expressed its concern about
the upcoming change of assignment of MDAIS unit
employees to MDESC. The Union was concerned
about the fact that there would be ‘‘mixed people’’
(i.e., represented and unrepresented) under the same
supervision, and about how that circumstance was
going to be handled. According to Eriksen, the Union
wanted to address and resolve this question at the bar-
gaining table. But Eriksen did not want to discuss this
in the contract negotiating sessions—‘‘We had a dif-
ficult enough task in front of us anyway.’’ On direct
examination, Eriksen testified that:
I recommended that we not bring it to the nego-
tiations table, that we defer it and handle the
transfer of the MDAIS employees . . . like we
would normally handle that kind of stuff. . . .
that we handle it as we have other issues in the
past concerning classification questions: Should
an employee on the basis of his or her work be
classified in the bargaining unit or in an unrepre-
sented classification? Let’s do it the way we have
in the past . . . they weren’t ecstatic about it, but
they agreed.
As mentioned earlier, ‘‘the way’’ the parties handled
unit placement questions ‘‘in the past’’ was to reach
agreement on how employees should be reclassified
under the ESSA.
Eriksen was questioned about this testimony on
cross-examination, in the following colloquy with
counsel for the General Counsel:
Q. You’ve testified that at the bargaining table,
the Union wanted information about how the
changes at MDAIS would be implemented and
whether or not Union or non-Union people would
be working for a supervisor, and you stated that
in an attempt that you wanted to put that on the
back burner or you wanted it not to be discussed
during negotiations, and I believe your testimony
377MCDONNELL DOUGLAS CORP.
9 Lazarus was the only former MDAIS unit employee to testify.
10 See United Technologies Corp., 292 NLRB 248, supra; Bay
Shipbuilding Corp., 263 NLRB 1133, supra.
We find Boeing Co., 212 NLRB 116 (1974), relied on by the Re-
spondent, to be distinguishable from the instant case. In Boeing, the
54 employees removed from the 8800 employee unit were found to
have been erroneously initially included in the unit as a result of a
mistaken application of incorrect job titles. When, as a result of an
audit, the employer discovered this incorrect initial classification and
inclusion of these employees in the unit, it unilaterally corrected
their job titles and removed them from the unit. In dismissing the
refusal-to-bargain allegation, the Board found that (unlike in the in-
stant case), the union had never been accorded representation rights
for the employees who were subsequently removed from the unit.
was that the Union was not ecstatic about that.
What did they say?
A. Well, as I recall, the Union expressed con-
cern that we would do it in a way that was agree-
able with them, and I jokingly, after I had dis-
cussed how we would do it in terms of the work
performed and the practice of assigning the work
and the recognition clause in the contract, I said
jokingly not to worry, and as I recall, Len [Ricks]
said something to the effect, ‘‘Why do I get a
warm feeling to that?’’ or something, and there
was a lot of laughter. But they did agree to let it
be resolved away from the bargaining table.
Q. You say they did agree to it. You mean they
didn’t bring it up again at that time?
A. They didn’t bring it up. The only time they
brought it up at the bargaining table was on Feb-
ruary 15th [i.e., the final day of contract negotia-
tions]. But we had discussed it away from the
bargaining table a few times. And at all the [com-
ponent companies] it was being discussed away
from the bargaining table to one extent or another.
We find that the record does not establish that the
Union agreed that the Respondent could unilaterally
remove the MDAIS unit employees from the unit upon
their change of assignment to MDESC. More specifi-
cally, we find that the record does not establish that
the Union agreed to permit the Respondent unilaterally
to apply the ESSA to the MDAIS unit employees, de-
termine that they were no longer in the unit, remove
them from the unit, and then present the Union with
the fait accompli of their removal. We find instead that
the testimony of Ricks, Eriksen, and Jansen establishes
only that Ricks and Eriksen agreed that job classifica-
tion and resulting unit placement questions emanating
from the MDAIS-to-MDESC conversion would be re-
solved together by the parties—not unilaterally by the
Respondent—after the parties had completed their ne-
gotiations for a renewal collective-bargaining agree-
ment.
B. No Showing of Sufficient Change to Warrant
Removal from Unit
The preponderance of the evidence relevant to this
question establishes that the job duties and functions,
and terms and conditions of employment, of the
MDAIS unit employees remained essentially un-
changed upon the change of assignment of these em-
ployees from MDAIS to MDESC.
More specifically, former MDAIS unit employee
Lazarus testified that there was no change in his duties
or workplace as a result of his change of assignment
from MDAIS to MDESC.9 Senior Staff Manager for
MDESC Employee Relations Jansen testified that upon
their change of assignment from MDAIS to MDESC,
at least 30 of the 32 former MDAIS unit employees
in question remained working at the same desk in the
same location for MDESC as they had been for
MDAIS, and that while one or two other former
MDAIS employees may have been assigned to dif-
ferent buildings or work areas upon their assignment to
MDESC, Jansen’s understanding was that they contin-
ued to perform the same work for MDESC as they had
for MDAIS. MDESC Senior Manager for Software
Development Lawrence Gunther testified that there
was no change in the functions performed by the
former MDAIS employees following their transfer to
MDESC. The Respondent’s vice president Schluter tes-
tified that there was no difference in the work assign-
ment or supervision given to a person because he or
she had formerly been a MDAIS employee. The Re-
spondent’s labor general manager Eriksen testified that
at the time of the December 1989 transfer of MDAIS
unit employees to MDESC, the wages, hours, and
working conditions of the unit employees were ‘‘basi-
cally’’ the same as the nonunit employees.
Accordingly, we find that the job duties and func-
tions, and terms and conditions of employment, of the
MDAIS unit employees have not been shown to have
become sufficiently dissimilar from those of the re-
maining unit employees so as to warrant the Respond-
ent’s unilateral removal of the MDAIS employees
from the unit upon their change of assignment to
MDESC.10
In light of the above considerations, we find that the
Respondent has violated Section 8(a)(5) of the Act by
unilaterally removing the former MDAIS unit employ-
ees from the unit upon their reassignment to MDESC
in December 1989.
V. MARCH 1990 TEMPORARY RECLASSIFICATION AS
UNIT EMPLOYEES
The complaint also alleges that the Respondent vio-
lated Section 8(a)(5) and (1) by temporarily
transferring/reclassifying these 32 employees briefly
back into the unit for about 5 days in March 1990, for
the administrative-bookkeeping purpose of formally
paying them their delayed 1989 merit wage increase
(which they had earned as MDAIS unit employees, but
378 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
which they had not received before being reclassified
as MDESC nonunit employees in late December 1989),
with funds from a merit wage increase pool set aside
for unit employees. The judge, having found that the
earlier December 1989 removal of the employees was
lawful, also found in footnote 9 of his decision that
this subsequent March 1990 temporary return of the
employees to the unit, followed quickly by their re-
moval again, was also lawful, as having been done for
a legitimate administrative purpose after notice to and
discussion with the Union.
We disagree with the judge, and for essentially the
same reasons for which we found the December 1989
removal from the unit to be unlawful—no agreement
by the Union, and no showing of changed cir-
cumstances sufficient to warrant unilateral return and
removal—we also find the March 1990 return to and
removal from the unit to be unlawful.
A. No Agreement by the Union
Union Executive Director Ricks testified that he did
not agree to the Respondent’s proposal that the former
MDAIS employees be returned to the unit temporarily,
to be paid their 1989 unit-based merit wage increase,
and then to be removed again from the unit. Rather,
he insisted that they be returned permanently to the
unit. Thus, Ricks testified that when the Respondent
proposed during renewal contract negotiations in Feb-
ruary 1990 to put the former MDAIS unit employees
back in the unit for this purpose:
[M]y response was, ‘‘They belong in our unit. Put
them back in and leave them there. But if you
don’t believe they belong in our unit, don’t put
them in and go find your money somewhere
else.’’ . . . We certainly didn’t object to them
being put in the unit. We felt they belonged
there. . . . Our objection was to them being
taken out again. . . . We objected to the people
being removed from the unit . . . If he put them
back into the unit, gave them their money, and
left them there as we suggested, then we certainly
wouldn’t have been at the Board [i.e., filed unfair
labor practice charges].
DAC Labor General Manager Eriksen testified, con-
sistently with Ricks, that when the Respondent pro-
posed the temporary return of the former MDAIS unit
employees to the unit for the above-described purpose:
[The Union] said ‘‘It sounds dumb to us. You can
do whatever you want to. What we want you to
do, though, is to leave them in the [unit], and
you’ve got to realize that no matter what you do,
it isn’t going to stop us from filing a charge on
the decision to take them out of the [unit].’’ . . .
[W]e agreed that in no way would we try to de-
pict their acquiescence of our doing that to mean
that they agreed with our taking them out, perma-
nently out of the bargaining unit.
Thus, we find that the evidence does not establish
that the Union agreed to the temporary return of the
employees in question to the unit for a few days in
March 1990. Rather, the evidence establishes that the
Union consistently maintained its position that these
employees should not have been removed from the
unit in the first place, in December 1989, and that any
subsequent return to the unit should have been perma-
nent.
B. No Showing of Changed Circumstances
The Respondent does not argue, and the record cer-
tainly does not show, that this March 1990 temporary
return and almost immediate removal of the employees
to and from the unit was warranted by any changes in
the employees’ job duties and functions or terms and
conditions of employment. The record amply estab-
lishes that it was no more nor less than what the Re-
spondent itself maintains it was—simply an adminis-
trative-bookkeeping transaction.
In light of the above considerations, we find that the
Respondent violated Section 8(a)(5) and (1) of the Act
by temporarily returning the former MDAIS unit em-
ployees to the unit in March 1990, and then removing
them again.
CONCLUSIONS OF LAW
1. At all times material the Union has been the ex-
clusive collective-bargaining representative within the
meaning of Section 9(a) of the Act of the employees
described in section 1, ‘‘Employees Represented,’’ of
article I, ‘‘Recognition,’’ of the 1987–1990 and 1990–
1993 collective-bargaining agreements between the Re-
spondent and the Union.
2. By unilaterally, without the Union’s agreement,
removing the former MDAIS bargaining unit employ-
ees from the above bargaining unit upon their Decem-
ber 1989 change of assignment to MDESC, the Re-
spondent has engaged in an unfair labor practice in
violation of Section 8(a)(5) and (1) of the Act.
3. By unilaterally, without the Union’s agreement,
returning the former MDAIS bargaining unit employ-
ees described above to the bargaining unit in March
1990, and thereafter in March 1990 unilaterally, with-
out the Union’s agreement, removing them again from
the bargaining unit, the Respondent has engaged in an
unfair labor practice in violation of Section 8(a)(5) and
(1) of the Act.
4. These unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices, we shall order that it
379MCDONNELL DOUGLAS CORP.
11 Although art. V, ‘‘Deduction of Dues,’’ of both collective-bar-
gaining agreements provides for union dues-checkoff procedures,
there is no evidence that any of the employees who were removed
from the unit had authorized dues deduction. Consequently, the Re-
spondent shall not be ordered to reimburse the Union for any lost
dues resulting from the Respondent’s unlawful removal of the em-
ployees from the unit. United Technologies Corp., 287 NLRB at
207; Bay Shipbuilding Corp., 263 NLRB 1133 fn. 6.
12 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
cease and desist and take certain affirmative action de-
signed to effectuate the policies of the Act.
Specifically, we shall order that the Respondent re-
turn the former MDAIS bargaining unit employees,
who were reassigned to nonunit MDESC positions in
December 1989, and March 1990, to the bargaining
unit, without loss of seniority; recognize the Union as
the collective-bargaining representative of those em-
ployees, as part of the recognized bargaining unit;
apply the terms of the applicable collective-bargaining
agreements to these employees; and make them whole
for any loss of earnings and other benefits suffered as
a result of the Respondent’s unlawful removal of them
from the bargaining unit in December 1989 and again
in March 1990, and failure to apply the terms of the
applicable collective-bargaining agreements to them.11
Any amounts of money necessary to make employees
whole under the terms of this remedy shall be com-
puted in accordance with Ogle Protection Service, 183
NLRB 682 (1970), with interest computed in accord-
ance with New Horizons for the Retarded, 283 NLRB
1173 (1987). Nothing in the Order shall be construed
as requiring the Respondent to rescind any wage in-
creases or other improved benefits or terms or condi-
tions of employment which may have been afforded to
the unlawfully removed unit employees during the pe-
riod of their unlawful removal from the unit.
ORDER
The National Labor Relations Board orders that the
Respondent, McDonnell Douglas Corporation; McDon-
nell Douglas Electronic Systems Company, a division
of McDonnell Douglas Company; and McDonnell
Douglas Aerospace Information Services Company, a
division of McDonnell Douglas Company, Huntington
Beach, California, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Unilaterally removing bargaining unit employees
from, and returning them to, the bargaining unit de-
scribed in section 1, ‘‘Employees Represented,’’ of ar-
ticle I, ‘‘Recognition,’’ of the 1987–1990 and 1990–
1993 collective-bargaining agreements between the Re-
spondent and the Southern California Professional En-
gineering Association (the Union).
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Return the former MDAIS bargaining unit em-
ployees, who were reassigned to nonunit MDESC posi-
tions in December 1989 and March 1990, to the bar-
gaining unit referred to in paragraph 1(a) above, with-
out loss of seniority.
(b) Recognize the Union as the collective-bargaining
representative of the above employees, as part of the
recognized bargaining unit, and apply the applicable
collective-bargaining agreements to them.
(c) Make the above employees whole, in the manner
prescribed in the remedy section of this decision, for
any loss of earnings and other benefits suffered as a
result of the Respondent’s unlawful removal of them
from the bargaining unit in December 1989 and again
in March 1990, and failure to apply the applicable col-
lective-bargaining agreements to them; provided, how-
ever, that nothing herein shall be construed as requir-
ing the Respondent to rescind any wage increases or
other improved benefits or terms or conditions of em-
ployment which may have been afforded to these em-
ployees during the period of their unlawful removal
from the bargaining unit.
(d) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay
due under the terms of this Order.
(e) Post at its Huntington Beach, California facilities
copies of the attached notice marked ‘‘Appendix.’’12
Copies of the notice, on forms provided by the Re-
gional Director for Region 21, after being signed by
the Respondent’s authorized representative, shall be
posted by the Respondent immediately upon receipt
and maintained for 60 consecutive days in conspicuous
places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by the Respondent to ensure that the notices are not
altered, defaced, or covered by any other material.
380 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The General Counsel’s unopposed motion to correct transcript is
granted.
(f) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT unilaterally remove bargaining unit
employees from, and return them to, the bargaining
unit described in section 1, ‘‘Employees Represented,’’
of article I, ‘‘Recognition,’’ of the 1987–1990 and
1990–1993 collective-bargaining agreements between
us and the Union, the Southern California Professional
Engineering Association.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
WE WILL return the former MDAIS bargaining unit
employees, who were reassigned to nonunit MDESC
positions in December 1989 and March 1990, to the
bargaining unit, without loss of seniority.
WE WILL recognize the Union as the collective-bar-
gaining representative of the above employees, as part
of the recognized bargaining unit, and apply the appli-
cable collective-bargaining agreements to them.
WE WILL make the above MDAIS employees whole
for any loss of earnings and other benefits suffered as
a result of our removal of them from the bargaining
unit in December 1989 and again in March 1990, and
our failure to apply the applicable collective-bargaining
agreements to them.
MCDONNELL DOUGLAS CORPORATION;
MCDONNELL DOUGLAS ELECTRONIC
SYSTEMS COMPANY, A DIVISION OF
MCDONNELL DOUGLAS CORPORATION;
AND MCDONNELL DOUGLAS AERO-
SPACE INFORMATION SERVICES COM-
PANY, A DIVISION OF MCDONNELL
DOUGLAS CORPORATION
Frank Wagner, Esq., for the General Counsel.
James A. Adler, Esq. (Irell & Manella), of Los Angeles,
California, for the Respondent.
Leonard C. Ricks, Executive Director SCPEA, of West-
minster, California, for the Union.
DECISION
STATEMENT OF THE CASE
GERALD A. WACKNOV, Administrative Law Judge. Pursu-
ant to notice, a hearing in this matter was held before me
in Los Angeles, California, on August 20 and 21, 1991. The
charge was filed by Southern California Professional Engi-
neering Association (SCPEA or the Union) on April 27,
1990. Thereafter, on May 31, 1991, the Regional Director for
Region 21 of the National Labor Relations Board (the Board)
issued a complaint and notice of hearing alleging violations
by McDonnell Douglas Corporation, and its various compo-
nents (collectively the Respondent) of Section 8(a)(1) and (5)
of the National Labor Relations Act (the Act). An amended
complaint was issued on August 1, 1991, and an amendment
to the amended complaint was issued on August 9, 1991.
The Respondent’s answers to the various complaints, duly
filed, deny the commission of any unfair labor practices.
The parties were afforded a full opportunity to be heard,
to call, examine and cross-examine witnesses, and to intro-
duce relevant evidence. Since the close of the hearing, briefs
have been received from counsel for the General Counsel
and counsel for the Respondent.
On the entire record,1 and based on my observation of the
witnesses and the briefs submitted, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, at all times material, has been engaged
at various locations in the United States in the manufacture
of aircraft and related products, and operates a facility in
Long Beach, California. In the course and conduct of its
business operations the Respondent annually sells and ships
goods and products valued in excess of $50,000 directly to
points outside the State of California.
It is admitted, and I find, that the Respondent is now, and
has been at all times material, an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted, and I find, that SCPEA is, and has been at
all material times, a labor organization within the meaning
of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
The principal issue raised by the pleadings is whether the
Respondent has violated and is violating Section 8(a)(1) and
(5) of the Act by removing approximately 32 scientific pro-
grammers from a collective-bargaining unit represented by
SCPEA and changing their status to that of nonunit employ-
ees.
381MCDONNELL DOUGLAS CORP.
2 As stated above, it does not appear to matter whether there was
one or more than one bargaining unit, as one collective-bargaining
agreement covers all the SCPEA-represented employees.
3 However it should be noted that although the employees may
have shared the same cubicles, they did not necessarily work on the
same projects, as offices are allotted according to available space
rather than according to function.
B. The Facts
SCPEA represents some 6000 professional employees of
the Respondent. For many years the Respondent, including
its various component divisions, has been signatory to a suc-
cession of collective-bargaining agreements with SCPEA.
The current contract between the parties extends from March
5, 1990, to February 28, 1993.
While there is only one companywide collective-bargain-
ing contract between the Respondent and SCPEA, the parties
disagree whether there is more than one collective-bargaining
unit as a result of the fact that the Respondent’s various
component companies are distinct entities. Thus, the General
Counsel and Charging Party maintain that there is only one
unit since the various components bargain jointly with
SCPEA, and jointly execute a single collective-bargaining
agreement that contains no language indicating recognition of
SCPEA in more than one unit. The Respondent, on the other
hand, believes that separate bargaining units exist and that
they are coextensive with each distinct operating company or
division of the corporation. It appears, however, that the
scope of the unit or units is not a significant issue in this
proceeding.
One of the component divisions of the Respondent is
McDonnell Douglas Electronic Space Systems Company
(MDESC) located in Santa Ana and Huntington Beach, Cali-
fornia. This division focuses primarily on electronic systems,
with much of its work being highly classified defense con-
tracting.
Another component division is McDonnell Douglas Aero-
space Information Services Company (MDAIS) which, until
a corporatewide decentralization program was placed into ef-
fect in 1989, provided, inter alia, computer and engineering
services to various component divisions of the Respondent,
including MDESC. MDAIS, for purposes of this proceeding,
may be characterized as simply a ‘‘services’’ oriented divi-
sion which leased personnel to other components but did no
research or development on its own. It employed approxi-
mately 4500 employees who provided information system
services to various components located in St. Louis, Mis-
souri, and in California, primarily in Long Beach and Hun-
tington Beach. Approximately 1700 of these individuals were
MDAIS professional employees who were loaned out or
leased to various components. Of this number, only approxi-
mately 194 were represented by SCPEA.
In December 1988, as part of a corporatewide decen-
tralization program, the Respondent determined that its var-
ious aerospace components could perform their missions
more effectively if MDAIS’ labor pools of professional em-
ployees were dissolved and the employees transferred to the
components they served so that each component would be re-
sponsible for the design, programming, testing, and imple-
mentation of the automated systems being developed or pro-
duced within that component. As a consequence, it was de-
termined that the approximately 1700 MDAIS professional
employees currently being leased by MDAIS to the various
components, including the 194 SCPEA-represented employ-
ees, would be transferred to and would become employees
of the components themselves. Thus, they would no longer
be employees of MDAIS.
On the West Coast, the first major transfers took place on
June 26, 1989, when almost 300 engineers, scientists, and
other MDAIS employees were transferred from MDAIS to
another component, Douglas Aircraft Company, to which di-
vision the transferred employees had previously been leased.
Approximately 75 of these employees were represented by
SCPEA.
The remainder of the transfers of MDAIS employees to
West Coast components were made on December 23, 1989.
Approximately 66 MDAIS engineers became employees of
another division, McDonnell Douglas Space Systems Com-
pany (MDSSC). Of this number, 15 employees were em-
ployed in classifications which had been within the SCPEA
bargaining unit at MDAIS; and all 15 were transferred to
corresponding positions which remained within the SCPEA
unit at MDSSC.2
Further, 39 MDAIS engineers became MDESC employees.
Of this number, 4 employees had not been in the SCPEA
unit, and they continued to be nonunit employees thereafter;
3 employees had been in the SCPEA unit and remained in
that unit thereafter; and 32 of the employees who had been
in the SCPEA unit were classified into nonunit positions.
Neither the jobs nor the work locations of these 32 employ-
ees, referred to by the Respondent as embedded software en-
gineers, changed after the transfer, and they continued to
work in the same secured areas, denoted as embedded soft-
ware areas or ‘‘vaults,’’ and sometimes even in the same cu-
bicles3 as some 77 MDESC nonunit employees.
The complaint alleges that the Respondent has violated
and is violating Section 8(a)(1) and (5) of the Act by remov-
ing these 32 employees from the bargaining unit and by plac-
ing them in nonunit positions.
The evidence, as detailed below, shows that the 32 ef-
fected employees have continued to perform the same work
at the same work stations for MDESC as they did prior to
the transfer, and that their day-to-day supervision has not
changed. On this basis the General Counsel maintains that
the transfer from MDAIS to MDESC was merely a paper
transaction which has no material effect on the wages, hours,
and working conditions of the employees who, as a result,
may not be removed from the unit.
The Respondent, on the other hand, maintains that that the
32 effected employees no longer have a separate identity
within the MDAIS structure in terms of ultimate supervision
and raises, promotions, career opportunities, reductions in
force, and similar labor relations matters, but rather have
been merged for all such purposes with the larger group of
MDESC nonrepresented employees who perform the same or
similar work. Under such circumstances, the Respondent
contends that it is not required to perpetuate distinctions
which no longer exist by maintaining two distinct classes of
employees who perform identical or substantially similar
work under the same supervision.
Further, the Respondent maintains that in anticipation of
the unit problems brought about by the corporatewide decen-
tralization or reorganization, the parties had previously
agreed on an approach to the problem which provided for
resolution within the grievance and arbitration provisions of
382 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 ‘‘Embedded software’’ is a term that may not be comprehen-
sively defined by a succinct definition. The principal characteristic
is that the software is embedded in and is an integral part of an an
overall system, such as a high-speed missile, and must rapidly proc-
ess information from various types of sensors and issue control com-
mands within a certain time constraint to some other part of the sys-
tem for execution. Nonembedded software is, for example, software
which calculates a payroll or an accounting or spreadsheet program
where the response time is not a critical factor. The design of em-
bedded software, because of the critical time constraints, is consid-
ered to be a distinct discipline.
5 There are also some SCPEA-represented employees who work in
the embedded software vaults, but who do not perform embedded
software work. These employees were not involved in the grievance
settlement.
6 MDESC was not in existence at the time of the 1988 agreement.
Rather, the agreement was between SCPEA and McDonnell Douglas
Astronautics Company (MDAC) which, in December 1988, as a re-
sult of a corporate reorganization, was divided into two components,
one of which was MDESC. This reorganization had no effect on the
work of the engineers involved herein who, until December 1989,
remained MDISC employees.
7 In this regard it should be noted that the work of the embedded
software engineers is classified, and that not only does SCPEA not
know exactly what each engineer is doing, but also even some of
the managers may not have the proper clearance to be advised of
certain work. However, the record clearly demonstrates that the gen-
eral nature of the work of each employee, in sufficient detail, could
be properly presented to an arbitrator without compromising security.
the contract, and that therefore the issue presented herein
should be deferred by the Board to that process.
L. Russell Jansen, staff senior manager, employee rela-
tions, MDESC, testified that it was not uncommon, either be-
cause of mistaken application of the meaning of a 1988
grievance settlement between the Respondent and SCPEA, or
because of a longterm change in work assignment, that em-
bedded software engineers would be reclassified either into
or out of the unit according to the work they happened to
be performing. In 1988 a dispute arose regarding the place-
ment of employees within the embedded software area, and
SCPEA filed a grievance. The Respondent and SCPEA ar-
rived at a tentative agreement regarding the clarification of
the bargaining unit with respect to embedded software work.4
Thus, the parties agreed that certain specified embedded soft-
ware work either was or was not work within SCPEA’s juris-
diction. Thereupon, applying the language of the tentative
agreement, the Respondent undertook to audit all the embed-
ded software employees in order to determine their proper
placement. SCPEA was advised that as a result of the audit,
six unit employees would be reclassified to nonunit classi-
fications, and two nonunit employees would be reclassified
to unit classifications.5 SCPEA agreed to this resolution of
its grievance and, thereafter, on about October 17, 1988, the
tentative agreement became binding on the parties.
It is important to note that the foregoing dispute and its
resolution had, at that time, no effect on the SCPEA-rep-
resented MDAIS embedded software engineers who were
leased to the predecessor of MDESC;6 these employees, who
were deemed to be within the bargaining unit, were not on
the payroll of MDESC or its predecessor and, accordingly,
their job functions were not audited, as it was simply as-
sumed that MDAIS would remain in existence and would
continue to supply labor to MDESC. However, approxi-
mately a year later, following the reorganization and the re-
sultant December 1989 transfer of these employees to
MDESC, the Respondent then applied the terms of the afore-
mentioned embedded software agreement to them, and re-
moved them from the unit on concluding that they were
nonunit embedded software engineers. The Respondent relies
on this 1988 agreement as dispositive of the issue herein, and
has offered to arbitrate any disagreement as to the proper
placement of the engineers.7 SCPEA and the General Coun-
sel maintain that the 1988 agreement did not purport to deal
with the then MDAIS employees, and that, in any event, the
Board may not compel arbitration of unit placement issues.
Jansen testified that there are problems with unit employ-
ees working side by side and doing the same work as
nonunit employees. Thus, unit employees, in accordance with
the contract, receive a higher rate of pay for overtime work;
the amount of money in the two separate merit pools, which
are the source of funds for the employees’ annual wage in-
creases, may be proportionally larger for the unit employees;
and the Respondent’s contribution to the current 401K sav-
ings plan is greater for the unit employees than for the
nonunit employees. The greater concern, however, according
to Jansen, is as follows:
The concern I would have is if I have two engineers
with like skills, two embedded software engineers doing
the same work and we had to lay off people, if man-
agement in reviewing the employees determined that a
SCPEA-represented engineer was less qualified to do
the remaining work, that engineer could file a grievance
based on discrimination for Union participation, putting
us in the same mess we’re in today, arguing over, you
know, who appropriately has the rights to that work,
SCPEA or non-SCPEA employees. You know, it just
makes doing business as a manager much more difficult
when you have two different classifications doing the
exact same kind of work.
Now, keep in mind there’s been a lot of discussion
about SCPEA and non-SCPEA employees working
side-by-side. That exists throughout the facilities all the
time, but normally, they are not doing the same types
of engineering work . . . they’re doing different types
of work on similar projects or proposals.
Jansen went on to state that, prior to the reorganization,
if MDESC no longer needed the MDAIS people or needed
to lay off personnel, MDESC would simply send them back
to MDAIS, and MDAIS would decide whether to reassign to
a different job with another component or to lay them off.
Gale Schluter is currently vice president and general man-
ager of Surveillance and Electronics Systems. During times
material, he was vice president and general manager of Ad-
vanced Command Control Communications and Intelligence
Systems within MDESC. Schluter testified that prior to the
reorganization of MDESC employees and MDSIC employ-
ees, although performing similar embedded software work in
the same or adjoining cubicles in the embedded software
vaults, and although having essentially the same wages,
hours, and working conditions and day-to-day technical su-
pervision, were otherwise treated differently within the ad-
ministrative scheme of the two entities. MDESC employees,
whether unit or nonunit, are evaluated and ranked on a
383MCDONNELL DOUGLAS CORP.
‘‘totem pole’’ or relative performance list, with the employee
at the top of the list being the individual with the greatest
potential/performance value to MDESC within a given classi-
fication; the remaining employees are similarly evaluated and
ranked in descending order. From this totem pole, yearly
merit increases are determined. Further, MDESC supervision
had the responsibility of disciplining and terminating
MDESC employees. MDAIS employees, on the other hand,
were not part of this ranking system. Rather, they were eval-
uated by MDAIS managers, with input from MDESC super-
visors as to their performance, and were given merit in-
creases accordingly. They were not subject to discipline, lay
off, or termination by MDESC supervision; rather, in the
event the services of an MDAIS employee were no longer
desired, for whatever reason, that particular employee would
simply be sent back to MDAIS, perhaps for reassignment to
another component, and his or her future tenure or work as-
signment was not dictated by MDESC. According to
Schluter:
Since MDAIS was a sister component or a sister
company, I guess, as a management approach we would
collaborate with MDAIS at the end of each year to
make sure that we had some input into the performance
assessment of the MDAIS people, but aside from that,
I think the business relationship was basically the same
with MDAIS as it would have been with an outside
company.
Schluter explained that although MDESC also directly
hired its employees, the MDAIS labor pool had distinct ad-
vantages to the efficiency of MDESC. MDAIS provided a
service, namely a source of labor, and its primary customers
were the other components of the Respondent. There were
advantages in utilizing MDAIS in terms of the hiring and
‘‘off-loading’’ of employees, as this alleviated the recruit-
ment and screening selection and hiring process, and the
lengthy security background investigation for classified work
which takes about 9 months on the average. Thus, prior to
obtaining the requisite security clearance, an employee would
be hired by MDAIS, sometimes with collaboration by
MDESC, and would then be placed by MDAIS within some
other component until his or her security clearance had been
approved. Further, there were additional financial advantages
because MDAIS offered labor at attractive rates.
Schluter also pointed out that the employees’ career paths
differed according to the particular employing component:
thus their opportunities for advancement depended on the or-
ganizational structure of the employing entity.
Leonard Ricks is executive director of the Union. Ricks
testified that although he was aware, as a result of various
conversations with Respondent’s representatives, that MDAIS
employees would be transferred to the components they were
servicing, he was never advised that this transfer of MDAIS
employees would result in their removal from the unit. Thus
Ricks explained that MDAIS employees were always being
transferred between components with no change in their sta-
tus as unit employees. Accordingly, the transfer of the em-
ployees was a ‘‘non-event.’’ Regarding the aforementioned
1988 agreement, Ricks acknowledged that he understood that
the agreement would govern the parties’ relationship in the
future, and was not limited to the then current employees,
and that new hires and current employees were subject to fu-
ture inclusion or removal from the unit in accordance with
the terms of the agreement. However, according to Ricks, the
agreement simply had no relevance to the MDAIS employees
represented by SCPEA, as they were admittedly within the
bargaining unit.
Ricks acknowledged that, on being advised of the reorga-
nization, he was concerned that the transfers of MDAIS
nonunit employees to the various components could be a
problem, as ‘‘they were mixing groups that hadn’t previously
been mixed, and it was resulting in bargaining unit people
and non-bargaining unit people under the same supervision,
and we were quite concerned about that.’’ This was briefly
discussed with Ken Erikson, general manager of labor rela-
tions, who told Ricks not to worry because SCPEA had good
language in the recognition clause of the contract which de-
fined the unit, and that was the best assurance that the unit
would not be eroded. Erikson stated that the Respondent was
committed to resolve any such matters after the transfers had
been completed, so that the parties would be able to clearly
determine the nature of the employees’ work. Ricks appar-
ently acceded to this suggestion.
In fact the parties did resolve such differences. Thus, at
another component company, Douglas Aircraft Company
(DAC), the Union objected to the fact that there were 11
nonunit employees who were doing bargaining unit work as
a result of the reorganization, and that they were sitting side-
by-side and doing the same work as unit employees. The Re-
spondent agreed, and the 11 employees were reclassified into
bargaining unit positions. In another situation, 14 nonunit
employees were performing similar work as 2 former
MDAIS unit employees, and when these 2 people were trans-
ferred to DAC the 14 individuals were placed in the unit.
Ricks, in effect, stated that even if the the 32 employees
in question herein are performing nonbargaining unit work as
defined by the language in the agreement, it nevertheless is
the Union’s position that because the work has been within
the unit for some 20 years it must remain in the unit. Thus
the Respondent, in effect, has waived whatever right it pre-
viously had to remove the work from the unit.
Ernie Ridenhour is corporate vice president of information
resources management for McDonnell Douglas Corporation,
and the chief executive of MDAIS. Ridenhour testified that
in 1988 there were 1700 employees in the MDAIS profes-
sional services labor pool, comprised of professional sci-
entific programmers. Only 194 of these individuals were rep-
resented by SCPEA. All 1700 of these people, including the
194 bargaining unit employees, were transferred directly to
the various components as a result of the reorganization. Of
the 194 individuals represented by SCPEA, all but the 32
employees in question herein remained in the bargaining unit
as employees of the various components rather than as em-
ployees of MDAIS.
Ridenhour testified that the MDAIS management staff was
comprised of only a small number of managers or super-
visors. He explained that:
[W]e did not require as many supervisors in this area
like the traditional ratio of maybe 1 to 16 . . . because
when we assigned these people, these scientific people,
to work with the components now, they took their work
384 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 Cf., the cases cited by the General Counsel: McDonnell Douglas
Astronautics Co., supra; Carolina Telephone & Telegraph Co., 258
NLRB 1387 (1981); Arizona Electric Power Co., 250 NLRB 1132
(1980); Bay Shipbuilding Corp., 263 NLRB 1133 (1982).
direction and those kinds of things from the people that
were responsible for the job.
However, after the transfer the employees became part of
MDESC for performance evaluations, raises, and replace-
ment. The components now directly hire their own employ-
ees and do not procure them through MDAIS which no
longer has a labor pool of scientific programmers.
Ken Erikson is general manager of labor/management part-
nership at the Douglas Aircraft Company. He was the prin-
cipal spokesperson for the Respondent during the bargaining
negotiations which commenced in October 1989. Erikson tes-
tified that the subject of the reorganization was brought up
by Ricks at the outset of negotiations. Ricks expressed the
Union’s concern that nonunit MDAIS employees would be
transferred to work with unit employees who were already
employed by the component, and that this work belonged to
unit employees. Erikson suggested that such matters regard-
ing classifications continue to be handled as they had in the
past, namely, that the work the employee was performing
after the transfer would determine whether he or she was in
the unit. According to Erikson, the Union agreed to handle
the matter in this manner. In fact, as noted above, this proc-
ess was implemented after the reorganization; there were var-
ious transfers of employees into and out of the unit, and the
net result was that the SCPEA unit was increased by 19 em-
ployees.
Lawrence Gunther is a senior manager of software devel-
opment for MDESC. Eight line managers report to him, and
all the people under his authority are involved in embedded
systems software. Gunther testified that before the reorga-
nization unit employees of MDAIS worked together on some
of the same projects with nonunit MDESC employees, and
that this working relationship has continued with no change
in functions.
C. Analysis and Conclusions
The material facts are not in dispute. For many years sci-
entific computer analysts, specialists, and engineers, rep-
resented by SCPEA, have been employed by MDAIS or its
predecessors and have been loaned or leased to various com-
ponents of the Respondent where they have performed work
side-by-side, and sometimes on the same project, with
nonunit employees who were hired by and work directly for
the component. The wages, hours, working conditions, and
even day-to-day supervision of both the unit and nonunit em-
ployees have remained essentially the same, except that the
SCPEA-represented employees were paid by MDAIS rather
than by the component. In 1989 this relationship changed for
some 1700 individuals, including 194 employees who were
represented by SCPEA, as a result of a corporatewide reorga-
nization undertaken for efficiency and accountability pur-
poses. As a result, each of the 1700 individuals was trans-
ferred to, and became employed by, the component for which
the employee had been previously working.
The reorganization presented relatively few difficulties in
terms of bargaining unit expansion or contraction, and the
differences that did arise were resolved by SCPEA and the
Respondent in a mutually agreeable manner which was dic-
tated by the specific nature of the work performed by the
employee after the transfer. In some instances former unit
employees were excluded from the unit, and in other in-
stances former nonunit employees were included within the
unit. The parties, however, have been unable to resolve the
placement of 32 engineers whom the Respondent believes
are embedded software engineers and who are performing
particular work which, pursuant to a prior agreement with
SCPEA, is nonunit embedded software work.
SCPEA maintains that some or all the 32 employees in
question do not perform embedded software work of any
kind, and that further, even if they do perform what has pre-
viously been agreed on as nonunit embedded software work,
such agreement does not apply to them because they have
historically been considered to be unit employees even
though they have worked side-by-side with nonunit employ-
ees. To SCPEA the corporate reorganization is simply a
paper transaction, a ‘‘non-event’’ which should have no ef-
fect on the representational status of the employees involved.
In this regard, SCPEA and the General Counsel rely on a
prior Board decision, McDonnell Douglas Astronautics Co.,
194 NLRB 689 (1971), in which the Board clarified the bar-
gaining unit and found that the transfer of 114 employees,
comprising the same classifications of employees as are in-
volved herein, to a newly formed component, McDonnell
Douglas Automation Company (MCAUTO), the predecessor
of MDAIS, was insufficient to remove them from the unit.
The Board found that the transfers of the employees to the
‘‘new’’ component was ‘‘apparent on paper only’’ and that
MCAUTO was not functionally new but rather was a ‘‘crea-
ture made up of existing scientific programming facilities
from two existing components, who have long bargained
with the Petitioner.’’ The Board stated that:
Despite the complete operating autonomy which each
of these companies is said to have, there is nothing on
this record which in any way suggests that the compa-
nies involved are not part of an organization that is an
integrated whole with ultimate common control. In
these circumstances the transfer of employees between
component companies, reflecting no change whatsoever
in their work location and admittedly no substantial
change in their supervision—certainly none that is as-
certainable on the record before us—cannot be viewed
as effectively removing the employees involved from
the currently recognized bargaining unit.
SCPEA and the General Counsel assert that the instant at-
tempt to remove the employees from the unit by placing
them back where they originated, namely, as employees of
one of the original components or its successor, is similarly
an impermissible paper transaction. I do not agree.
In the instant case the employees have not been removed
from the bargaining unit as a result of a paper transaction
with no accompanying substantial changes in the terms or
conditions of their employment.8 They are now employees of
MDESC and, as such, will be evaluated within MDESC’s
totem-pole hierarchy as part of a significantly larger group
of employees; both their merit increases and the possibility
of layoff as a result of defense industry cutbacks may there-
by be directly effected. Nor do they any longer have an alter-
385MCDONNELL DOUGLAS CORP.
9 The complaint also alleges that the Respondent violated Sec.
8(a)(5) of the Act by temporarily transferring the 32 individuals back
into the unit in March 1990, for the purpose of permitting them to
receive their annual merit wage increase from the merit wage pool
earmarked for the unit employees, and by returning them to perma-
nent nonunit status 1 week later. This was simply a paper transaction
implemented by the Respondent after notice to and discussion with
SCPEA, undertaken for the purpose of permitting the 32 employees
to share in the unit merit pool in which they had been included for
all of 1989. As I have found that the Respondent did not violate the
Act by transferring the employees to nonunit positions in December
1989, I similarly find that the March 1990 temporary transfers, un-
dertaken by the Respondent for legitimate administrative purposes,
was not violative of the Act.
nate career path through MDAIS. Additionally, however,
should they also be included within the unit, they will enjoy
benefits that their colleagues, who perform the same work
under the same supervision, and with whom they ‘‘compete’’
for placement upon the totem-pole, do not enjoy. Thus, they
will receive greater overtime pay and contributions to their
401k plans; they may receive relatively greater annual merit
wage increases as a result of their placement in the SCPEA
merit wage pool, and they have the protection of a contrac-
tual grievance and arbitration provision. It is reasonable to
conclude, under the circumstances, that to perpetuate such an
anomalous situation, occasioned by happenstance rather than
design, is to virtually guarantee a disharmonious working re-
lationship among two classes of employees; and under such
an artificial system the Respondent’s managerial difficulties
will similarly be compounded.
The number of employees involved herein is relatively
small, and the record abundantly demonstrates that the par-
ties have established both procedures and precedent for re-
solving unit placement issues of this nature. Simply stated,
either all the employees performing the work in question are
within the unit as set forth in the collective-bargaining con-
tract and/or the 1988 embedded software grievance agree-
ment, or they are not, and the Respondent is proposing that
such matters be left to the grievance and arbitration process.
At the time the embedded software agreement was entered
into, neither SCPEA nor the Respondent anticipated the reor-
ganization that has occasioned the current dispute; however,
SCPEA has acknowledged that the 1988 embedded software
agreement was prospective in nature and would apply to fu-
ture employees of MDESC. It is clear that the instant chain
of events has not been contrived by the Respondent as a
means to erode the unit; rather, as the record demonstrates,
the Respondent is motivated by legitimate business consider-
ations. In agreement with the Respondent, the instant dispute
seems to be a situation peculiarly susceptible to resolution
through the grievance and arbitration machinery of the con-
tract. Accordingly, I shall dismiss the complaint in its en-
tirety.9 See Transport Service Co., 282 NLRB 111 (1986).
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. SCPEA is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Respondent has not engaged in the unfair labor
practices alleged in the complaint.
[Recommended Order for dismissal omitted from publica-
tion.]