Metlox Manufacturing Co.

National Labor Relations Board - Board Decisions

Jul 12, 1965

153 N.L.R.B. 1388 (N.L.R.B. 1965)

1388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Metlox Manufacturing Company and International Brotherhood
of Operative Potters, AFL-CIO. Cases Nos. 21-CA-5553 and
91-CA-5811. July 12,1965
DECISION AND ORDER
On February 4, 1965, Trial Examiner James R. Webster issued his
Decision in the above-entitled proceeding, finding that the Respondent
had engaged in certain unfair labor practices as alleged in the com-
plaint and recommending that it cease and desist therefrom and take
certain affirmative action, as set forth in the attached Trial Examiner's
Decision. Thereafter, the Respondent filed exceptions to the Trial
Examiner's Decision and a brief in support thereof. The Charging
Party excepted only to the remedy recommended by the Trial Exami-
ner and filed a supporting brief. The General Counsel filed cross-
exceptions and a single brief in support thereof and in answer to
Respondent's exceptions . The Respondent filed separate briefs in
answer to the Charging Party's exceptions and to the General Coun-
sel's cross -exceptions.
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Brown and Zagoria].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Trial
Examiner 's Decision, the exceptions, cross-exceptions , the briefs, and
the entire record in this case, and hereby adopts the Trial Examiner's
findings, conclusions , and recommendations.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the National Labor Relations Board hereby adopts as its
Order the Recommended Order of the Trial Examiner, as modified
herein, and orders that Respondent, Metlox Manufacturing Company,
Manhattan Beach, California, its officers, agents, successors, and
assigns, shall take the action set forth in the Trial Examiner's Recom-
mended Order, as so modified :
1. Add the following as paragraph 2(c), the present paragraph
2(c) and those subsequent thereto being consecutively relettered:
"(b) Notify the above-mentioned employees if presently serving in
153 NLRB No. 124.
METLOX MANUFACTURING COMPANY 1389
the Armed Forces of the United States of their right to full reinstate-
ment upon application in accordance with the Selective Service Act
and the Universal Military Training and Service Act of 1948, as
amended, after discharge from the Armed Forces."
2. Add the following immediately below the signature line at the
bottom of the Appendix attached to the Trial Examiner's Decision :
NOTE.-We will notify the above-mentioned employees if pres-
ently serving in the Armed Forces of the United States of their
right to full reinstatement upon application in accordance with
the Selective Service Act and the Universal Military Training and
Service Act of 1948, as amended, after discharge from the Armed
Forces.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
This proceeding, with all parties represented, was heard before Trial Examiner
James R. Webster in Los Angeles, California, on November 18 and 19, 1964, upon a
consolidated complaint of the General Counsel and answer of Metlox Manufacturing
Company, herein called Respondent A complaint was issued on July 1, 1964, in
Case No. 21-CA-5811 and a consolidated amended complaint was issued on July 27,
1964, in Cases Nos. 21-CA-5553 and 21-CA-5811, upon charges filed on March 2,
1964, and amended on June 25, 1964, in Case No. 21-CA-581 1, and upon a charge
filed on September 17, 1963, in Case No 21-CA-5553. The consolidated com-
plaint alleges that Respondent violated Section 8(a) (5) and (1) of the National
Labor Relations Board, as amended, herein called the Act
Upon the entire record, and from my observation of the witnesses, I hereby make
the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent is a California corporation with its principal office and place of
business located in Manhattan Beach, California, where it is engaged in the manu-
facture of ceramic dinnerware. In the course and conduct of its business during the
past 12 months, Respondent shipped from its California plant products valued in
excess of $50,000 directly to points located outside the State of California, and dur-
ing the same period has received at its California plant products valued in excess of
$50,000, which were shipped directly from points outside the State of California.
I find that Respondent is an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
International Brotherhood of Operative Potters, AFL-CIO, herein called the
Union, is , and has been at all times material herein , a labor organization within the
meaning of Section 2 (5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICE
A. Introduction and issues
Following a Board-conducted election on March 22, 1963, the Regional Director
for Region 21 of the Board issued on June 11, 1963, a certification that the Union
had been duly selected and constitutes the exclusive collective-bargaining representa-
tive of the employees of Respondent in the following described appropriate unit:
All production and maintenance employees, including shipping and receiving
employees, and leadmen employed by the Respondent at its Manhattan Beach,
1390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
California, plant, excluding office clerical employees, watchmen, guards, design-
ers, professional employees, and supervisors as defined in the Act.
At all times since June 11, 1963, the Union has been the representative for the pur-
poses of collective bargaining of the employees in this unit.
Collective-bargaining meetings were held by the Union and Respondent on the
following dates: November 18 and 29, and December 18, 1963; and January 13 and
14, February 17, March 13, and April 3 and 27, 1964.
Throughout negotiations Respondent contended that it was unable to give a wage
increase or other monetary benefits as requested by the Union because of its financial
condition. In support of this bargaining position, Respondent furnished the Union
with a profit-and-loss report for the years 1961, 1962, and 10 months of 1963, being
the 3 preceding fiscal years. Respondent prepared and made available to the Union
a statistical analysis showing the additional costs or expenses that would be incurred
by Respondent by granting wage increases in amounts ranging from 5 cents per hour
to 35 cents per hour. The Union proposed a wage increase of 35 cents per hour.
The issues in this case are:
(1) Whether or not Respondent has engaged in bad-faith bargaining by the limi-
tations it has placed on the Union's accountant as to the nature and contents of his
report to the Union following his inspection of Respondent's books and records.
(2) In the event it is found that Respondent engaged in an unfair labor practice
following the settlement agreement in Case No. 21-CA-5553, approved October 29,
1963, then the issue is presented as to whether or not Respondent refused to meet
with the Union in collective bargaining following the certification on June 11, 1963,
and continuing to the date of the settlement agreement.
(3) Whether or not the strike of employees of Respondent which commenced on
April 2, 1964, was caused by any conduct of Respondent that has been found to be
an unfair labor practice.
There is no allegation in the complaint nor contention by the General Counsel
that any conduct of Respondent, since the settlement agreement of October 29, 1963,
constitutes a violation of the Act other than Respondent's refusal "to furnish the
Union with records and other probative material necessary for the Union to dis-
charge its functions as the statutory bargaining representative of the employees," and
that by such conduct Respondent refused to bargain in good faith.'
B. Statement of facts
During the course of the contract negotiations the Union requested and Respond-
ent supplied information from company records on seniority and earnings of employ-
ees, including piecework rates, the company's group insurance plan, time studies
performed by Respondent in setting existing wage rates, and a list of employees on
layoff.
The Union proposed a wage increase of 35 cents per hour, and at the meeting of
November 29, 1963, the second meeting, Mrs. Selvin, negotiator for Respondent,
presented and discussed a document on the subject of "Analysis of Labor Cost
Increases Attached to Possible Union Contract Provisions." This document con-
tains a financial analysis as to the increased costs to Respondent for the monetary
proposals, of the Union other than wages, and also the increased costs for wage
increases of 5 cents per hour, 10 cents per hour, 25 cents per hour, and 35 cents per
hour. She rejected all of the Union's cost proposals and contended that Respondent
was not financially able to grant the Union's cost proposals or to make a counter-
proposal containing any increase on any cost item
At the next meeting, December 18, 1963, the Union requested that Respondent's
financial records be made available and this matter was discussed at some length.
1 The attorney for the Charging Party sought to enlarge the scope of the allegations
of the complaint to include a refusal to bargain by Respondent by its taking of adamant
positions with reference to proposals The Charging Party made an offer of proof in
support of its position , but neither in the offer of proof nor in the transcript of the bar-
gaining sessions (which are copious but not complete) do I find any factual support for
the Charging Party's contention The offer of proof was rejected.
METLOX MANUFACTURING COMPANY 1391
At the next meeting, January 13, 1964, Respondent submitted a document contain-
ing the following information from company records:
METLOX MANUFACTURING COMPANY
STATEMENTS OF OPERATIONS
Jan 1, 1961 to Jan 1, 1962 to Jan. 1, 1963 to
Dec 31, 1961 Dec. 31, 1962 Nov. 30, 1963
Net Sales-Less Sales Discounts________________________ $2, 741, 500 89 $2,753,875 63 $2, 415, 645
Factory Shipping Wages________________________________ 946,594 22 930,633 20 775, 501
Other Salaries and Wages_______________________________ 487, 461 21 508,092 05 477, 969
Holiday and Vacation Pay______________________________ 17,507 20 20,855 48 18,568
Payroll Taxes---------------------------------------- 60,511 34 86,602 69 85, 590
Group Insurance ---------------------------------------- 13,097 42 14,427 35 12, 614
Workmens Compensation Insurance____________________ 19, 118 34 19, 337 96 21,166
Materials supplies, Expenses____________________________ 568,506 27 559,242 92 504,069
Utilities------------------------------------------------ 79,192 37 82,095 34 76, 691
Insurance----------------------------------------------- 23.553 60 23,434 20 23,007
Taxes--------------------------------------------------- 67,714 54 43, 396 68 34, 449
Advertrsing and Commissions__________________________ 317,005 87 348,290 31 292,955
Financial Expenses, Interest, Factoring_________________ 88, 656 68 90,286 54 81, 752
Depreciation-------------------------------------------- 22, 635 57 21, 908 48 15, 911
Total--------------------------------------------- 2, 711,534 63 2,748,603 20 2,420,242
After Tax Profit or (Loss)_______________________________ 26,966 26 5, 272 43 (4, 597)
By letter dated January 17, 1964, to Respondent from Alfred M. Klein, attorney
for the Union, the Union requested substantiating data as follows:
In our opinion, and under the Board authorities, your summary of financial
items is insufficient to enable the union to meet its obligation of bargaining in
good faith. Substantiating information and data of the general headings are
hereby requested, and particularly of 'those figures set forth 'under the following
main listings for the three years indicated:
Net Sales-less sales discounts
Factory and Shipping Wages
Other Salaries and Wages
Materials, Supplies, Expenses
Advertising and Commissions
Financial Expenses, Interest, Factoring
Depreciation
Request is, accordingly, made that an audit or a detailed accounting of these
items be forthwith furnished and toward that end, the union is agreeable to
designating a certified public accountant to obtain the same on your premises
with direct instructions to keep the information confidential from third parties,
competitors and the like.
By letter dated February 12, 1964, Respondent set forth the conditions under
which it would permit an inspection of its financial and related records, as follows:
Let us get the matter of an audit of the Company's records defined:
As I understand it the Union was not satisfied with the information submit-
ted in support of the Company's claim that its financial situation does not justify
additional cost items at this time and demanded further proof of the matter. I
have, heretofor [sic], submitted profit and loss statements for three successive
years. Also I submitted figures outlining cost of the Union's demands and show-
1392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing conclusively that these demands could not possibly be met on the Company's
present volume of business . I have made the following offer to prove our
position:
1. The books and records may be examined in our office.
2. Such examination to be made by a Certified Public Accountant cho-
sen by the Union and approved by the Company.
3. All costs of such examination to be borne by the Union.
4. Such accountant work directly with the Company 's accountant who
will make available to him the Company's records and give him necessary
information pertinent to such records and allow him to examine them to
the extent he [the accountant chosen by the Union ] deems necessary.
5. The accountant chosen by the Union to supply Union only with the
information as to whether or not the Company's representations [ already
submitted to the Union ] are true, and that the accountant be specifically
instructed that details of the Company 's financial records are not to be dis-
closed to any third parties whatsoever , including the Union.
If we can agree on these conditions then we are ready to allow an approved
accountant to proceed at once with the examination of our records.
Klein for the Union replied by letter of February 14 , 1963, stating , among other
things, as follows:
Subject to the qualification that the attorneys for the Union , to the extent
necessary in representing the Union , may be supplied the information, we are
certainly agreeable that the report of the Union's accountant be solely limited
to the Union's information and that the financial records will not be disclosed
to any third parties whatsoever . Obviously , the details making up the financial
statement , we believe , should be furnished to the Union and that a failure thereof
also constitutes a refusal to bargain in good faith.
Selvin for Respondent answered by letter dated February 15, 1964, in part, as
follows:
Mr. Rail [a negotiator for the Union] has insisted that the Union has the right
to any of our figures for any use it wants to make of them. He has stated that
it will have the right to negotiate as to whether or not some of our expenditures
should have been made . I have repeatedly informed him that we do not intend
to negotiate on the basis of any of our expenses which have already been
incurred which do not bear on the matter of employee payments . He has spe-
cifically stated , in substance , that the Union has the right to determine if we are
paying our supervisory and management people more than we should and says
that if the Union believes this to be true , they have the right to negotiate other
terms for such management employees . This is, of course, ridiculous, and we
are not making the figures available for any such purpose.
I believe you will agree with me that we are not required to negotiate the
remuneration of our executives and supervisors with the Union . In examing
[sic] our records, an accountant would necessarily see this information in detail.
In view of the conversation I have already had with Mr . Rail about the matter,
I have insisted that details of this nature must not be divulged to the Union.
I think it entirely proper for an accountant to inform the Union that our state-
ment with respect to our executive and supervisory personnel is a true state-
ment or a false statement , whatever he finds it to be.
I know of no precedent where an employer has been required to lay bare all
details of his financial position to the Union and where such details might be
given to a union for any use it may want to make of them.
Our position on this matter is that we will permit an accountant to go into
the details of each of our classifications of expenditures . My concept of our
duty is that we shall make available to the accountant proof of our statements-
and to the extent we have made them. It will certainly take an action by the
Supreme Court to get us to change that position.
I would suggest that you have Mr. Rail bring his tapes of the various con-
ferences and that you listen to our offer to him. I think you would get a much
better picture of what I have offered.
I have now offered only proof that the Profit and Loss Statement as I pre-
sented it, is a true and correct Profit and Loss Statement . Our books will reflect
this. Your accountant will be free to determine the particulars which add up
to the Profit and Loss figures which we give to the Union but we must insist that
he do not divulge these particulars to the Union.
METLOX MANUFACTURING COMPANY 1393
With this further clarification we are ready to permit an accountant to exam-
ine our books.
Klein for the Union answered by letter of February 19, 1964, in part, as follows:
It now appears that there is one remaining area which needs clarification.
Obviously, the various breakdowns are needed by the union to intelligently
bargain in good faith. I can certainly agree with you that the audit will only
be used for that purpose and for none other. I fully agree with you that the
union cannot negotiate as to the expenditures you have made nor the salaries
you are paying supervisors and management employees. On the other hand, we
believe it is within their prerogative to comment upon a relationship which
salaries to unit workers should bear to salaries of white collar workers. Also,
I believe they certainly can comment upon whether the failure to show a satis-
factory operating statement is due to a deliberate bleedmg of the assets by offi-
cers and/or controlling stockholders. For example, if a corporation has a net
income of $100,000.00 and is paying a president a $1,000,000.00 salary, I am
positive the right of any person to argue that the corporation was being bled for
that one salary is evident, even though that person cannot negotiate the presi-
dent's salary.
I, therefore, agree with you that your company is not required to negotiate
the remuneration of the executives and supervisors with the union, although, to
repeat, this information may well be necessary for the union to bargain in good
faith even though it be kept strictly confidential. I further agree with you that
no further use of such details can or should be made by the union.
Selvin for Respondent answered by letter of February 29, 1964, as follows:
Replying to your letter of February 19 concerning the matter of a certified
public accountant checking the figures of Metlox Manufacturing Co. which
were submitted to Mr. Rail in the bargaining conference of January 13, 1964,
and which have been the subject of considerable correspondence between us.
It is the Company's position [and on this position we will rest our case] that
the Union is entitled only to figures necessary to the bargaining. We have taken
the position that the Company is financially unable to grant the increases which
the Union demanded and we have offered proof of the figures we submitted,
which included the Company's Profit and Loss Statements for the years 1961,
1962 and 1963 to November 30 [which was the latest date available at the time
of submission]. We believe our obligation is covered by our offer to prove that
our submission was true.
Our offer is set forth at length in our letter of February 12, 1964, and, since
you claimed not to understand it completely, I clarified the matter in a further
letter to you on February 15, 1964.
This offers the Union full opportunity to substantiate our claim. We stand
on our right not to have the details of the various classifications of expense,
other than that pertaining to the factory and shipping employees, made avail-
able to the Union for any purpose. It cannot possibly have any relativity to
bargaining since the classifications which we will give your accountant an oppor-
tunity to check so that he is able to inform the Union whether our representa-
tions as to our financial position are true or false, since they are not negotiable
matters, as you have yourself admitted in your letter of February 19.
Needless to say, we recognize that the Union is entitled to any specific infor-
mation pertaining to the employees in the bargaining unit and to that extent we
will give your certified public accountant permission to make such figures avail-
able to the Union which are applicable directly to the bargaining unit.
I have submitted the name of Steres, Alpert & Company, Certified Public
Accountants, 6404 Wilshire Boulevard, as having been designated by the Union
to undertake this investigation. The Company has no objection to this firm of
accountants representing the Union in this matter.
When and if we can come to an agreement as to the extent of the material to
be made available to the Union by the accountant, we are ready to proceed and
the investigation can commence at once. We will, of course, insist that our full
understanding shall be set forth in writing.
Thus, as is also indicated by attorney for Respondent in his brief, the only signifi-
cant difference between the Respondent and the Union is the extent to which the
information developed by the accountant in the course of his examination of com-
pany records can be disclosed to the Union.
796-027-66-vol. 153-89
1394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
C. Conclusions
Good-faith collective bargaining contemplates an earnest desire on the part of the
parties to reach a mutually acceptable agreement. It means the taking of action that
will facilitate the bargaining mechanics and processes. The Board has held that this
means the furnishing of pertinent and relevant information by a company to a union
to enable the union to negotiate intelligently on matters of wages and working
conditions, etc.2
But, for a review or study of an employer's financial records and related files, the
Board and the courts have limited a union's view of these records and files to situa-
tions where the employer pleads an inability to pay a wage increase, and in these
situations, as always, the prime consideration is not the bare refusal to furnish data,
but whether under the circumstances in a case, the employer by his conduct is doing
violence to the principles of good-faith bargaining. Respondent having placed on
the bargaining table the issue of its ability to pay a wage increase, has placed a need
on the part of the Umon, if it is to bargain intelligently on the issue, to "know" and
analyze the facts material to this issue. The facts are exclusively within the control
and possession of Respondent
The question is "how much" information should a union have from an employer's
records in order to bargain intelligently on the matter of wages where the employer
pleads financial inability to pay. Is the 3-year profit-and-loss report submitted by
the Respondent heiem, with right of verification sufficient?
The Union contends that it is not; that conclusionary facts and figures can be mis-
leading; and that the Union needs to know the facts and figures upon which they are
based. From a complete analysis of the records of the Company, the Union might
then be in a position to make efficiency recommendations or urge changes of one
kind or another which would justify or facilitate a wage increase. For example, as
Union Representative Rail expressed it during negotiations, the Union would like to
know "what title they [company officials] carry, what job they do, if they are dead-
heads on the payroll," and if "all of the profit is being bled off somewhere." From
the Union's point of view, this and other information from Respondent's financial
records are germane to the issue of Respondent's ability to pay a wage increase; and
with this information the Union would be on an equal footing with Respondent to
discuss this issue
Respondent takes the position that information as to salaries, bonuses, and com-
missions, etc., paid to salaried personnel and personnel outside the bargaining unit
is immaterial, irrelevant, and confidential; that the Company has substantiated its
plea of financial inability to pay with a profit-and-loss report, with opportunity for
the Union to verify it, and that this ends the Respondent's obligation to substantiate
its position Must an employer bare all of its records for a union to engage in a
"fishing expedition" in a search for items on which to make efficiency recommenda-
tions or for flaws in managerial judgment which the union might use as arguments
for a wage mcrease9
Accountant Steres, the certified public accountant chosen by the Union and
approved by Respondent, and whom I find to be an expert in the field of accounting
and auditing, testified regarding the auditing of a company's records to determine
financial soundness. He stated that a profit-and-loss summary does not necessarily
reflect an accurate picture of the financial condition of a company. A profit-and-loss
report is one factor to consider in arriving at a judgment or opinion as to the finan-
cial soundness of a company. He stated that to analyze a financial statement, or to
ascertain the financial condition of a company, one would need to know whether any
of the generally accepted accounting methods is used, whether it has been applied
consistently, "because a change in method can tend to distort figures"; whether there
has been nonrecurring or unusual items in any particular year or years, as for exam-
ple a law suit; and whether management decisions on expenditures and the like (the
areas where discretion usually exists with management) are consistent with prior
years. He indicated other areas where discretionary judgment of management could
2It has been held that an employer must furnish data upon appropriate request from
the union on the following subjects. Dates of employment and seniority standing of em-
ployees, N.L R.B v. Mo Scharf stein f Phil Scharfstein, d/b/a Stein-Way Clothing Com-
pany, 209 F. 2d 261 (C A. 6) ; job classifications and job descriptions, wage rates and
rates ranges, Dixie Corporation, 105 NLRB 390; data on piece rates, Skyland Hosiery
Mills. Inc, 108 NLRB 1600, on incentive wage plans, City Packing Company and Trinity
Packing Company, 98 NLRB 1261, on time studies, N.L R B. V. Otis Elevator Co., 208
F. 2d 176 (C A. 2) ; and employees' group insurance data, Phelps Dodge Copper Products
Corporation, 101 NLRB 360
METLOX MANUFACTURING COMPANY 1395
affect the profit and loss of a company to include judgment as to what may be
incurred in the way of bad debts for a year and judgment as to the use or life of an
item subject to depreciation, or the method of depreciation selected. Also a profit-
able business may have its profits drained for a number of years by nonoperational
items such as funded indebtedness. Evaluations of inventories can vary depending
on whether inventory costs include cost of material, cost of labor, and cost of other
manufacturing expenses (overhead expenses) which were incurred in order to pro-
duce a given product. And it would be desirable to know whether the method of
evaluating inventories has been consistent over the years. Where the costs of mate-
rial or labor on items that go into inventory change, then the inventory evaluation
can vary depending on whether a company operates on a first-in first-out basis or
last-in first-out basis. Also a profit-and-loss report is affected by the method of
accounting on maintenance expenses and repairs-whether they are written off cur-
rently or whether they are capitalized and spread over their useful life. Income can
be depressed by expensing currently the major repairs. The choice in expensing
currently or capitalizing can be applied to purchases and to research and develop-
ment costs with resulting effects on annual profit-and-loss reports.
Sizeable changes in salaries paid company officials, usually a discretionary item,
can change the profit-and-loss picture. An examination of company records could
reveal whether abrupt and significant salary changes have recently been made; also
it might reveal areas where, in the judgment of management efficiency surveyors,
unprofitable expenditures are being made.
Respondent objects to an examination by the Union to ascertain if there is "poor
management," or if there are any "deadheads" on the payroll, or if the assets of the
Respondent are being "bled"; and these are matters that the Union would like to
ascertain.
An examination of Respondent's financial records here can be divided into three
purposes-one, to verify the accuracy of the figures contained in the offered profit-
and-loss report; two, to determine if there have been any recent changes or temporary
factors which cause the report to be misleading and not to constitute a fair represen-
tation of the Company's basic financial soundness; and three, to enable the Union
to suggest or urge efficiency or other changes which could make more funds available
for wages
A union's relationship to an employer is the business relationship of a trader or
bargainer. Neither the union nor the employees it represents has the affinity with
a company as does a stockholder on matters of management and direction of a com-
pany, although a poorly managed company affects an employee's welfare and finances
as well as a stockholder's. A union is not entitled to review the records of Respond-
ent for the third purpose listed above. But, good-faith bargaining, in requiring an
employer to substantiate his inability-to-pay plea, requires the employer to show that
the figures of profit and loss are not only accurate but that they do or do not consti-
tute fair representations of the company's financial condition. That is, to bargain
in good faith, Respondent should permit an examination of its records for purposes
one and two listed above.
There is a question of semantics in interpreting the words used by Selvin, as to
whether she would permit the accountant chosen by the Union only to verify the
figures in the profit-and-loss report as figures taken from the company records, or
whether they constitute a fair representation of the Company's financial condition-
that is, among other things, whether there are recent changes or temporary factors
or other considerations that would cause the conclusionary figures to be misleading.
(She stated that the Union would have "full opportunity to substantiate our claim",
that "we are going to allow the check for the purpose of determining that we have
given you accurate and truthful information"; and at another time "I have now offered
only proof that the Profit and Loss Statement as I presented it, is a true and correct
Profit and Loss Statement.")
Assuming that Selvin intended the accountant to ascertain whether or not the
profit-and-loss statement was a fair representation of Respondent's financial condi-
tion, he was not to reveal to the Union any details or make any elaboration on his
findings. Although Accountant Steres indicated he could give a yes or no answer
following an auditing of Respondent's financial records, he expressed the view that
a negative answer would be of questionable value as "there are so many factors that
could be involved that would cause me to feel that these statements were not fair."
He questioned the propriety of making a negative statement, on which any person
would rely or take action, without explaining or substantiating his conclusions.
1396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I find that Respondent in limiting the accountant to a "yes or no" report is not
substantiating or permitting substantiation of its inability-to-pay plea, and by this
conduct it has not bargained in good faith.3 I cannot with preciseness indicate here
the scope that the accountant's report should take. Elaboration or explanation of his
conclusions should be permitted; on the other hand, the report need not be an effi-
ciency survey and critique.
D. The strike and reason therefor
During contract negotiations the Union held periodic meetings of employees and
reported to them the progress of the negotiations. They were informed of Respond-
ent's plea of inability to pay a wage increase, and that the Union had requested to
see the books of Respondent. At the union meeting of February 20, 1964, the
employees were informed that if the books were not made available, a charge would
be filed. At the union meetings of March 4, the employees were informed that
charges had been filed. A strike was discussed, and it was suggested that a strike
vote be taken at the next meeting. At this meeting, Union Representative Rail
informed the employees that Respondent had furnished a profit-and-loss statement,
but he stated to them that that was not enough information. At the meeting of
March 11 a strike vote was taken, and the employees voted 72 to 8 for a strike. The
date of the strike was not fixed. At the meeting of April 2, Rail reported that the
Union was making no headway in the negotiations, and that apparently the only
alternative was to strike. By a unanimous standing vote, the employees voted to
strike. The strike commenced that day and still is in progress.
The General Counsel contends that the strike was caused by Respondent's refusal
to bargain by its refusal to furnish the necessary financial data, and Respondent con-
tends that the strike is purely economic, that is, to get Respondent to accede to the
Union's wage and other contract proposals.
I conclude and find that the strike was caused by Respondent's refusal to bargain
in good faith with the Union by its refusal to substantiate properly its plea of inability
to pay a wage increase . That the Union was also seeking to have Respondent release
all of its financial data does not mitigate the fact that the strike was also caused by
Respondent's unfair labor practice found herein.
E. Respondent's failure to meet with the Union prior to the settlement
agreement of October 29, 1963
By Respondent's conduct described above in preceding paragraphs, it has violated
the provisions of a settlement agreement approved on October 29, 1963, providing
that it would bargain collectively with the Union pursuant to the provisions of the Act.
On June 11, 1963, the Regional Director of Region 21 issued certification of the
Union as the exclusive collective-bargaining representative of Respondent's employees
in the aforesaid unit. On June 13, 1963, William Rail of the Union wrote E. K. Shaw,
president of Respondent, requesting a bargaining meeting. On June 20, Shaw replied
declining the request stating that exceptions to the Regional Director's report would
be filed. On September 5, 1963, Alfred Klein, attorney for the Union wrote Peter
Irwin, an attorney for Respondent, requesting contractual negotiations. There was
no response to this letter, and contract negotiations did not commence until after the
execution and approval of the settlement agreement on October 29, 1963, in Case
No. 21-CA-5553.
I find that Respondent did refuse to deal with the Union from time of initial
request to bargain on June 13, 1963, until after the settlement agreement on Octo-
ber 29, 1963, and that since that time Respondent has met with the Union and has
engaged in contract negotiations as described in preceding paragraphs.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection with the operations of Respondent described in section I, above, have a close,
$ George Mick, d/b/a Yakima Frozen Foods , 130 NLRB 1269, remanded sub nom Fruit
& Vegetable Packers and Warehousemen Local 760 , of/w IBT v. N.L.R.B., 316 F. 2d 389
(C.A.D.C.) ; N.L.R B. v. Truett Mfg. Co., 351 U.S. 149.
METLOX MANUFACTURING COMPANY 1397
intimate, and substantial relation to trade, traffic, and commerce among the several
States, and tend to lead to labor disputes burdening and obstructing commerce and
the free flow of commerce.
VI. THE REMEDY
Having found that Respondent engaged in certain unfair labor practices, I shall
recommend that it cease and desist therefrom and that it take certain affirmative
action as provided in the Recommended Order below, which I find necessary to
remedy and to remove the effect of the unfair labor practices, and to effectuate the
policies of the Act.
Since the strike of employees which commenced in April 1964 was and is an unfair
labor practice strike, I shall recommend that the employees who engaged therein
shall be offered, upon request, full reinstatement to their former or substantially
equivalent positions, without prejudice to seniority or other rights and privileges, if
necessary, by discharging other employees who may have replaced them, and I shall
further recommend that Respondent make them whole for any loss of earnings suf-
fered following request for reinstatement, by payment to each of a sum of money
equal to that which each respectively would normally have earned as wages from
date of request for reinstatement until date of Respondent's offer of reinstatement,
less net earnings if any during that period, together with interest on the resulting
amount; backpay and interest to be computed in the manner prescribed by the Board
in F. W. Woolwoi th Company, 90 NLRB 289, and Isis Plumbing & Heating Co.,
138 NLRB 716.
Upon the basis of the findings of fact, and the entire record in the case, I make the
following.
CONCLUSIONS OF LAW
1. Metlox Manufacturing Company is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. International Brotherhood of Operative Potters, AFL-CIO, is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
3. All production and maintenance employees, including shipping and receiving
employees, and leadmen employed by the Respondent at its Manhattan Beach, Cali-
fornia, plant, excluding office clerical employees, watchmen, guards, designers, pro-
fessional employees, and supervisors as defined in the Act, constitute a unit appro-
priate for the purposes of collective bargaining within the meaning of Section 9(b)
of the Act.
4. The Union has been at all times material herein, and is now, the exclusive rep-
resentative of all employees in the aforesaid appropriate unit for the purposes of
collective bargaining within the meaning of Section 9(a) of the Act.
5. By refusing to bargain collectively in good faith with the Union as described in
this Decision, the Respondent has thereby engaged in unfair labor practices proscribed
by Section 8(a) (5) of the Act.
6. The strike of employees in the appropriate unit which began in April 1964, was
caused by unfair labor practices of Respondent.
7. The unfair labor practices committed by Respondent following the settlement
agreement approved October 29, 1963, warrant the vacating of the said settlement
agreement.
8. By the conduct described in this Decision Respondent has interfered with,
restrained, and coerced its employees in the exercise of the rights guaranteed in
Section 7 of the Act and has thereby engaged in and is engaging in unfair labor prac-
tices within the meaning of Section 8 (a) (1) of the Act
9. The afoiesaid unfair labor practices affect commerce within the meaning of
Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law and the
entire record , and pursuant to Section 10(c) of the National Labor Relations Act,
as amended , I hereby recommend that the Respondent , Metlox Manufacturing Com-
pany, its officers , agents, successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with International Brotherhood of Operative
Potters, AFL-CIO, by refusing, upon request , to substantiate its claim of inability
to pay any wage increase or other monetary benefits.
1398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(b) Interfering in any manner with the efforts of said Union to bargain collectively
,on behalf of all employees in the following appropriate unit:
All production and maintenance employees, including shipping and receiving
employees, and leadmen employed by the Respondent at its Manhattan Beach, Cali-
fornia, plant, excluding office clerical employees, watchmen, guards, designers, pro-
fessional employees, and supervisors as defined in the Act.
2. Take the following affirmative action to effectuate the policies of the Act:
(a) Upon request, bargain collectively with the said Union as the exclusive repre-
sentative of all its employees in the aforesaid bargaining unit with respect to rates of
pay, wages, hours of employment, or terms or conditions of employment.
(b) Upon application, reinstate the striking employees to their former or sub-
stantially equivalent positions, without prejudice to their seniority or other rights and
privileges, and make them whole for any loss of earnings resulting from a failure to
reinstate in the manner set forth above in the section entitled "The Remedy."
(c) Post at its plant in Manhattan Beach, California, copies of the attached notice
marked "Appendix." 4 Copies of said notice, to be furnished by the Regional Direc-
tor for Region 21, shall, after being duly signed by a managing representative of
Respondent, be posted by Respondent immediately upon receipt thereof, and be
maintained by it for a period of 60 consecutive days thereafter, in conspicuous places,
including all places where notices to employees are customarily posted. Reasonable
steps shall be taken to insure that said notices are not altered, defaced, or covered by
any other material.
(d) Notify the Regional Director for Region 21, in writing, within 20 days from
the date of the receipt of this Decision, what steps it has taken to comply herewith.5
It is further recommended that unless, within 20 days from the date of the receipt
of the Trial Examiner's Decision, the Respondent shall notify the said Regional
Director, in writing, that it will comply with the foregoing Recommended Order the
National Labor Relations Board issue an order requiring Respondent to take the
aforesaid action.
4In the event that this Recommended Order be adopted by the Board, the words "a
Decision and Order" shall be substituted for the words "the Recommended Order of a
Trial Examiner" in the notice. In the further event that the Board's Order be enforced
by a decree of a United States Court of Appeals, the words "a Decree of the United States
Court of Appeals, Enforcing an Order" shall be substituted for the words "a Decision
and Order".
IIn the event that this Recommended Order be adopted by the Board, this provision
shall be modified to read: "Notify said Regional Director, in writing, within 10 days from
the date of this Order, what steps the Respondent has taken to comply herewith "
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, as amended, we hereby notify our employees that:
WE WILL NOT refuse to bargain collectively with International Brotherhood
of Operative Potters, AFL-CIO, by refusing, upon request, to substantiate our
claim of inability to pay any wage increase or other monetary benefits.
WE WILL NOT in any other manner interfere with the efforts of the above-
named Union to bargain collectively on behalf of the employees in the following
described appropriate unit:
All production and maintenance employees, including shipping and receiv-
ing employees, and leadmen employed at our Manhattan Beach, California,
plant, excluding office clerical employees, watchmen, guards, designers,
professional employees, and supervisors as defined in the Act.
WE WILL, upon request, bargain collectively with the above-named Union as
the exclusive representative of all our employees in the unit described above with
respect to rates of pay, wages, hours of employment, or terms or conditions of
employment.
LENZ COMPANY 1399
WE WILL , upon application , reinstate our striking employees to their former
or substantially equivalent positions , without prejudice to their seniority or other
rights and privileges , and make them whole for any loss of earnings resulting
from a failure to reinstate.
METLOX MANUFACTURING COMPANY,
Employer.
Dated------------------- By------------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board 's Regional Office, 849 South
Broadway , Los Angeles , California , Telephone No. 688-5204, if they have any ques-
tion concerning this notice or compliance with its provisions.
Lenz Company and International Union of Electrical Radio and
Machine Workers, AFL-CIO, Local No. 768 .1 Case No. 9-CA-
3194. July 13, 1965
DECISION AND ORDER
On March 5, 1965, Trial Examiner John F. Funke issued his Deci-
sion in the above-entitled proceeding, finding that the Respondent had
engaged in and was engaging in certain unfair labor practices within
the meaning of the National Labor Relations Act, as amended, and
recommending that it cease and desist therefrom and take certain
affirmative action, as set forth in the attached Trial Examiner's Deci-
sion. He also found that the Respondent had not engaged in other
unfair labor practices alleged in the complaint and recommended dis-
missal of those allegations. Thereafter, the General Counsel filed
limited exceptions to the Trial Examiner's Decision and a brief in
support thereof. The Respondent and Charging Party thereupon
filed cross-exceptions to the Trial Examiner's Decision and answering
briefs.
Pursuant to the provisions of Section 3 (b) of the Act , as amended,
the National Labor Relations Board has delegated its powers in con-
nection with this case to a three-member panel [Members Fanning,
Brown, and Jenkins].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and cross-exceptions and briefs,
and the entire record in this case, and hereby adopts the findings, con-
clusions, and recommendations of the Trial Examiner only to the
extent consistent herewith.
1 Hereinafter called the Union.
153 NLRB No. 120.