Metrocare Home Services

National Labor Relations Board - Board Decisions

Dec 29, 2000

332 N.L.R.B. 1570 (N.L.R.B. 2000)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1570
Metrocare Home Services, Inc. and Community and
Social Agency Employees Union, District Coun-
cil 1707, AFSCME. Cases 2–CA–30301 and 2–
CA–316361
December 29, 2000
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
LIEBMAN
AND HURTGEN
On June 30, 1999, Administrative Law Judge Eleanor
MacDonald issued the attached decision. The Respon-
dent filed exceptions, a supporting brief, and a reply
brief, the General Counsel filed an answering brief, and
the Charging Party filed an answering brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions and
briefs and has decided to affirm the judge’s rulings, find-
ings,2 and conclusions, and to adopt the judge’s recom-
mended Order.

1 No exceptions were filed to the judge’s recommended Order that
Case 2–CA–31636 be severed and dismissed.
2 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951). We have carefully examined the record and find no
basis for reversing the findings.
In its exceptions, the Respondent contends, inter alia, that the judge
erred in finding an unfair labor practice that was not alleged in the
complaint, i.e., that the Respondent violated Sec. 8(a)(5) and (1) of the
Act by unilaterally announcing a wage reduction on February 12, 1997.
We find no merit in this exception.
“It is well settled that the Board may find and remedy a violation
even in the absence of a specified allegation in the complaint if the
issue is closely connected to the subject matter of the complaint and has
been fully litigated. [Footnote omitted.] This rule has been applied with
particular force where the finding of a violation is established by the
testimonial admissions of the Respondent’s own witnesses. [Footnote
omitted.]” Pergament United Sales, 296 NLRB 333, 334 (1989), enfd.
920 F.2d 130 (2d Cir. 1990). Here, the complaint factually alleges that
on February 12, 1997, the Respondent issued a memorandum announc-
ing the wage reduction without providing the Union notice or opportu-
nity to bargain. At the hearing, testimony from the Respondent’s own
witnesses established that such a memorandum was, in fact, issued on
February 12, 1997. Further, the announcement issue was closely con-
nected to the subject matter of the complaint, which concerned the
subsequent implementation of the same wage reduction that was an-
nounced on February 12, 1997. Accordingly, we find that the Perga-
ment test has been satisfied and that the judge properly found the an-
nouncement of the wage reduction to constitute a violation of Sec.
8(a)(5) and (1).
In agreeing with the judge that the parties did not reach impasse in
their negotiations on March 13, 1997, we find it unnecessary to rely on
her comment that “[o]nce the Respondent apparently decided to lower
wages, no matter what the Union response, there was no opportunity
for real bargaining to take place and a declaration of impasse was thus
unfounded.”
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Metrocare Home Services,
Inc., New York, New York, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Order.

Suzanne K. Sullivan, Esq., for the General Counsel.
Jonathan P. Arfa and Leonard Benowich, Esqs. (Roosevelt &
Arfa, LLP), of White Plains, New York, for the Respon-
dent.
Harvey S. Mars, Esq. (Law Offices of Leonard Leibowitz), of
New York, New York, for the Charging Party.
DECISION
STATEMENT OF THE CASE
ELEANOR MACDONALD, Administrative Law Judge.
This case was heard in New York, New York, on October 26,
November 3, and December 7, 1998. The complaint alleges
that the Respondent, in violation of Section 8(a)(1) and (5) of
the Act, announced a reduction in wages without notice to the
Union and that the Respondent implemented the wage reduc-
tion without having reached impasse with the Union.1 The
Respondent denies that it has engaged in any violations of the
Act and asserts that the parties had reached an impasse in bar-
gaining and that the wage reduction was justified by business
exigencies and financial need.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed
by the General Counsel and the Respondent on January 12,
1999, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a corporation with an office and place of
business in New York, New York, is engaged in the business of
providing home health care. Annually, the Respondent derives
gross revenues in excess of $100,000 and receives goods and
materials valued in excess of $5000 directly from points outside
the State of New York. The Respondent admits and I find that

In finding the violation, Member Hurtgen notes that, on February 12,
1997, Respondent’s vice president Savino announced that “I am reduc-
ing the wage rates.” As of that date, there had been only two bargain-
ing sessions, and there was not even a claim of impasse. The effective
date for the reduction was February 22, although the date was later
changed to March 29, and the implementation on March 29 was pre-
cisely the same as the one announced on February 12. Although the
February 12 announcement did not necessarily take away the “opportu-
nity for real bargaining” (see above), the announcement does show that
the decision was made on February 12, i.e., at a time when there was
not even a claim of impasse.
1 The allegations in Case 2–CA–31636 which had been consolidated
with Case 2–CA–30301 were settled by the parties and were withdrawn
at the instant hearing. Although counsel for the General Counsel ap-
parently believed that she made a motion to sever the cases, the official
transcript does not record such a motion. Therefore, I shall order that
Case 2–CA–31636 be severed from the instant proceeding and that it be
dismissed.
332 NLRB No. 155
METROCARE HOME SERVICES, INC. 1571
it is an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act, and that Community and
Social Agency Employees Union, District Council 1707,
AFSCME, is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
1. Background
On May 28, 1996, the Union was certified as the exclusive
collective-bargaining representative of the Respondent’s em-
ployees in the following appropriate unit:

All full-time and regular part-time home care workers, home
attendants, home health aides, certified home health aides,
personal care aides, certified personal care aides, and home
makers employed by the Employer.

The Respondent admits that the Union is the exclusive col-
lective-bargaining representative of the employees in the ap-
propriate unit.
The Respondent is a for profit agency that provides home
health care for mostly elderly, homebound, and disabled pa-
tients. The patients have physical disabilities and some suffer
from dementia and character disorders. The patients are re-
ferred by the city of New York Human Resources Administra-
tion pursuant to contracts between the city and the Respondent.
After an assessment of a newly referred patient, the Respondent
sends either a home health aide or a personal care aide to pro-
vide the requisite services to the patient.2 In 1996, the Respon-
dent had three contracts with the city of New York: a new
Bronx contract which did not yet have any patients, a Manhat-
tan contract to provide basic personal care and a “difficult to
serve” contract which involved patients with extreme medical
conditions or unsafe environments. In 1996, two thirds of the
Respondent’s business volume came from the difficult to serve
contract. All of the Respondent’s contracts provide an hourly
Medicaid direct reimbursement rate. The rate covers overhead,
the cost of social workers, rent, professional liability insurance,
and compensation. The rate is divided into a direct budget and
an indirect budget. The direct budget covers wages and bene-
fits to the aides and it is set at $8.88 per hour of work per-
formed by the aides. The Respondent is not allowed to make a
profit from the direct budget. Any part of the $8.88 per hour
that is not spent compensating the aides must be returned to the
city. The indirect budget covers all the rest of the Respondent’s
expenses. The Respondent’s profit must be realized from the
indirect budget. Savino testified that in 1994 Respondent spent
$10,000 more on labor costs than provided for in the $8.88 per
hour compensation rate in the direct budget for the difficult to
serve contract. The coverage was subsidized out of the Re-
spondent’s profit on the indirect budget. In 1995, the compen-
sation rate was still $8.88 and the Respondent exceeded the
difficult to serve direct budget by $115,000. In 1996, the rate
was still frozen and the Respondent overspent the difficult to

2 A home health aide is certified to perform more tasks than a per-
sonal care aide.
serve direct budget by nearly $300,000. The record does not
permit an evaluation of these figures since the Respondent did
not present evidence as to the amount of the indirect budget and
it did not reveal the amount of its profits. The Manhattan basic
personal care contract labor reimbursement rate was a little
higher than $8.88 per hour. In 1994, 1995, and 1996 the Re-
spondent received more money in the Manhattan contract for
direct labor costs than it spent and it had to return some money
to the city. The Respondent cannot use money from one con-
tract to cover deficiencies in another contract.
The Respondent pays its aides $5.90 per hour. In addition,
the Respondent pays the aides overtime, weekend differential,
and a sleep-in rate. After 6 months of employment, an aide
who works 160 hours per month is eligible for health insurance.
When an aide has worked 2100 hours for the Respondent, a 30-
cent-per-hour differential is added to the hourly rate of com-
pensation.
In 1996, the Respondent employed about 600 home health
aides at any one time. Over a 12-month period, about 950 to
1000 aides would have been on the payroll.3 Aides often work
for more than one home health agency. For instance, an aide
may work for the Respondent during the week and for another
agency on the weekend, and some aides split a day between
two agencies. If an aide has been working with a patient who
dies or goes to the hospital, the aide may cease working for the
Respondent if a competitor agency can immediately offer a
better job in terms of location or hours.
Following the Union’s certification, the Respondent and the
Union met four times for the purpose of negotiating a collec-
tive-bargaining agreement. The Union was represented by
Leonard Leibowitz and Harvey S. Mars, Esquire, accompanied
by a negotiating team made up of union officials and employ-
ees. A union official active in the negotiations and who testi-
fied herein was Ninfa Vassallo.4 The Respondent was repre-
sented by Jonathan P. Arfa, Esquire, who was accompanied
variously by Ronald Carkner, Esquire, and Thomas Savino, the
Respondent’s vice president.
2. Collective-bargaining negotiations
a. The first session
The first bargaining session took place on July 29, 1996.
The full union negotiating team was present. Attorney Arfa
was there with Savino. The Union presented the Respondent
with an outline list of demands covering wages, benefits, sen-
iority, days off, and many other subjects. The Union demanded
a raise of $1 per hour, an increase of 50 cents per hour after
2100 hours with the agency, and an increase of 75 cents per
hour for a mutual case.5 The demands provided that employees
would join the union health benefits plan and the union pension
plan. The parties went through the demands and the Union
gave a brief explanation of each demand. Arfa’s notes of the
meeting show that the parties had an extensive discussion of the
3 In addition, the Respondent was hiring more aides to begin servic-
ing the new Bronx contract.
4 Liebowitz, whose office is the general counsel to the Union, was
the Union’s chief negotiator.
5 A mutual case involves giving care to more than one person at a
single location.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1572
health benefits currently provided by the Respondent and the
Union’s suggestion that employees join the Union’s health and
welfare plans. The parties discussed the cost of the union
health plan and the cost of the company health plan. The par-
ties discussed the difficulty of applying seniority principles in
the home care industry. Savino explained that the source of
funds for the Respondent was the New York City reimburse-
ment rate and that it had not been increased in a number of
years. Savino said that the reimbursement rate was insufficient
to meet the Union’s wage demands. The Respondent suggested
that the Union might join in an effort to have the city of New
York increase the reimbursement rate. The Union responded
that it would consider this suggestion. The Union requested a
list of employees in a certain format, and Arfa asked for copies
of the union health and welfare fund and pension trust fund
indentures. At the conclusion of the meeting, the Union agreed
to draft a full set of formal contract proposals and send it to the
Respondent.
b. The second session
The second bargaining session took place on October 23,
1996. The union negotiating team was led by Mars. Arfa at-
tended the meeting on behalf of the Respondent, accompanied
by Carkner and Savino.6 The Union presented its demands in
the form of a draft contract and the parties went over every
item.7 The draft contract included a demand that the employees
receive benefits under the union health and welfare fund. The
amount of the wage demand was left blank. Arfa recalled that
the key issues discussed at the meeting were reimbursement
rates under the city contracts and the source of funding for any
increases. Arfa did not respond to the Union’s contract de-
mands. He said that the Respondent would study the demands
and send a response to the Union. Savino told the Union that
the reimbursement rate was insufficient and that the Respon-
dent’s trend to overspend its direct labor budget was getting
worse. More and more aides were reaching the 2100 hours’
seniority point and receiving the 30-cent differential which took
their hourly wage to $6.20. In addition, more aides were be-
coming eligible for health insurance and the Respondent’s
health insurance premiums were rising. Savino asked the Un-
ion to attend a meeting with the city and press for an increase in
the reimbursement rate. The Union declined to attend such a
meeting.
c. Correspondence
On November 4, 1996, Mars wrote to Arfa asking for the
Respondent’s counterproposals to be sent as soon as they were
completed, and stating that he would send Arfa the trust inden-
tures as soon as he himself received them from the Union.
On November 27, Mars wrote to Arfa enclosing the trust in-
dentures for the pension and welfare funds and asking Arfa to
send the Respondent ‘s counterproposals as soon as possible so
that another negotiating session could be scheduled.

6 Arfa’s recollection that the meeting took place on November 23 or
29 was incorrect.
7 The Union called this draft the “boilerplate” demands.
On December 17, Arfa responded to Mars that he had been
very busy but that he expected to send Mars a set of responses
to the Union’s demands shortly after the first of the year.
Mars wrote to Arfa on January 23, 1997, stating that the Un-
ion was still waiting for the Respondent’s counterproposals and
asking that they be sent no later than the end of the month.
On February 5, 1997, Arfa sent Mars the Respondent’s con-
tract proposals and responses to the Union’s demands. Arfa’s
letter said, “I would hope that at the next session the Union will
be in a position to advance constructive thoughts and proposals
relative to the economic issues.” The Respondent’s formal
document answered many of the Union’s demands with the
phrase “Economic issue: deferred for later discussion.” The
subjects deferred included the Union’s demands relating to
wages, holidays, leave, pension, health and welfare, timesheets,
and carfare. The Respondent did not offer any economic pro-
posal of its own in the February 5 documents. Arfa testified
that the Respondent wished to defer the economic aspects of
the Union’s demands until after the noneconomic issues were
disposed of.
Arfa testified that the Company’s response to the Union’s
demands was that it wanted to defer all economic issues “for
discussion as a lump sum of economic issues.” Arfa would not
agree with counsel for the General Counsel that this answer
meant that the Company wished to discuss noneconomic issues
first. Indeed, Arfa said the Respondent would discuss anything
the Union wanted to discuss. When asked in what way the
Respondent was prepared to discuss economic issues even
though it wished to defer economic issues for a later discussion,
Arfa replied that if the Union had proposed a wage cut to fi-
nance other benefits that would have been a matter for discus-
sion.
d. February 12, 1997 memorandum
On February 12, 1997, without notice to the Union, Savino
distributed the following memorandum to the Respondent’s
home attendants:

As a result of the Human Resource Administration
freezing our reimbursement rate at a 1994 level, I am re-
ducing the wage rates accordingly:
(1) Weekend differential rate is an additional 50 cents
an hour.
(2) Overtime will be 50 cents an hour above the regu-
lar wage. Please note the 50 cents applies to overtime on
sleep-in cases as well.
(3) For aides on a live-in case, the night differential
rate will be $10 per day.
These rates become effective February 22, 1997.

The current weekend differential was $1.10 per hour, the
current overtime rate was 75 cents per hour and the current
live-in differential was $16 per day.
Savino testified concerning the events that led to his issuance
of the February 12 wage reductions. In the spring or summer of
1996, Savino received a note from William Schnell, the Re-
spondent’s president, telling him that the agency was beginning
to lose a lot of money on the difficult to serve contract. In No-
vember he met with Fred Stein, the Respondent’s controller,
METROCARE HOME SERVICES, INC. 1573
and he learned that the trend was worse; for the first 6 months
of 1996, the Respondent spent $178,000 more than it received
for labor costs and this figure was expected to double by the
end of the year. Savino did not testify as to the amount of the
Respondent’s overhead reimbursement nor did he describe the
Respondent’s profits on the various contracts it has with the
city. Savino and Schnell discussed several options to reduce
labor costs. It was possible for the Respondent to curtail health
insurance benefits for employees who had other family insur-
ance or who reduced their actual hours worked. Another alter-
native was to find a different health insurance plan. Or the
Respondent could reduce labor costs by reducing wages. In
January 1997 Savino met with Schnell and Stein and went over
the internal financial statement for 1996. They found that the
Respondent had overspent its direct wage reimbursement by
$300,000 on the difficult to serve contract. Although there was
a meeting between Respondent’s officials and the city director
of Home Care Services to discuss the situation, the city refused
to raise the reimbursement rate. Schnell ordered Savino to
effect reductions in wages. Savino distributed the February 12,
1997 memo to the employees. However, the reductions did not
become effective because the Respondent’s labor counsel told
Savino that the Union had a problem with the memorandum
and “we needed to have a bargaining session.”
As soon as they became aware of the memorandum, Vassallo
wrote to Savino and Mars wrote to Arfa demanding that the
unilateral wage changes be rescinded.
Arfa sent a letter dated February 24 to Mars stating that the
Respondent had rescinded its memorandum reducing wage
rates. Arfa’s letter continued:

Please be advised that it is the Agency’s intention to
raise the issues contained in said Memorandum as its first
priority of negotiations when we meet on March 10, 1997
and I would request that your client be prepared to address
same immediately.

Arfa testified that he had not been aware of the February 12
memo before Mars informed him that it had been distributed to
employees.
e. The third session
The parties met for a third bargaining session on March 10,
1997. Arfa attended this meeting with Savino and Carkner.
Leibowitz and Mars led the union negotiating team.
Arfa told the Union that the Respondent was spending too
much on compensation. He said that the excess was partly due
to the cost of health insurance and to the general increases in
the cost of doing business such as social security costs and
professional and malpractice insurance. Arfa’s position was
that the Union should bargain over the economic matters that
were covered in the February 12 memorandum. Arfa testified
that as of March 10 the parties had not agreed to any non-
economic issues. According to Arfa, the meeting ended when
the Union said it wanted a few days to figure out whether it
could come up with anything to help the Respondent avoid the
reductions proposed in the February 12 memo. Arfa’s bargain-
ing notes show that the parties discussed the current compensa-
tion structure of the unit employees and that the Union made a
3-year wage proposal and asked that the Respondent contribute
to the Union’s pension and welfare funds.
Arfa agreed that the Respondent did not make an economic
offer in his February 5 response. According to Arfa, his letter
of February 24 to Mars stating that the Respondent wanted to
discuss the reductions set forth in the February 12 memoran-
dum to employees at the next negotiating session was the first
specific economic proposal given to the Union. On March 10,
according to Arfa, the Respondent’s February 5 proposals had
not been rescinded.
Savino testified that on March 10 he discussed the insuffi-
cient reimbursement rate with the Union and asked the Union
for suggestions on ending what he characterized as “the over-
spending.” The Union said that it opposed the implementation
of the reductions announced by the Respondent. Savino had
brought figures showing the aggregate cost of health insurance
for the employees. However, his data were not broken down to
show per capita premium rates and so they did not permit any
comparison with the Union’s health fund costs.
Vassallo testified that on March 10 the parties discussed
wages. The Union caucused and then proposed that the wage
rate be increased to $7 per hour in the first year of a new con-
tract, $7.50 per hour in the second year, and $8 per hour in the
third year. The parties discussed using the Union’s health and
welfare fund to provide medical insurance to the employees
instead of reducing the wages. The Union believed that its
coverage might be more economical than the insurer then used
by the Respondent.
By letter of March 11, Mars requested that Arfa provide the
monthly or quarterly premium rate for the Respondent’s health
insurance for the last 5 years.
f. The fourth session
The parties met again on March 13, 1997. Arfa was present
with Savino and Carkner. The Union was represented by Lei-
bowitz and a negotiating committee.
According to Arfa, he began the meeting by saying that the
issue for discussion was the wage cuts proposed by the Re-
spondent. Arfa recalled that the Union said that it had no ideas
about alternatives to the cuts. Arfa then asked Leibowitz what
else he wanted to talk about and Liebowitz said that he had
nothing else to talk about. Arfa’s notes show that he raised the
issue of the proposed reductions at the beginning of the meeting
and that Liebowitz said that he would not agree to the cuts.
Leibowitz asked what was next and Arfa replied that they
should explore options and if there were none, then “we are at
impasse.” The notes say that Leibowitz replied, “I guess so”
and then asked for a union caucus to see if there were any
ideas. After the caucus, Arfa’s notes say that Leibowitz says he
has no thoughts and “he thinks it at the end. No place to go for
either side. Has to be warfare. Thinks Union will try to react
to implementation even though at impasse.” Arfa then read the
requested insurance premium information to Leibowitz and
answered a question about the Respondent’s rejection of a non-
discrimination clause. Then Leibowitz said, “We have to do
what we have to do. There’s nothing left to talk about.” Arfa
said, “Guess so, we’re at impasse and going to implement.”
Arfa said they should adjourn sine die and Leibowitz agreed.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1574
On cross-examination Arfa recalled that when Leibowitz said
there would be warfare, he had replied that home care workers
do not come out when they are called.
Savino also testified that Liebowitz stated “we were at im-
passe.”
Carkner testified about the March 13 meeting. However, his
testimony was based on reading Arfa’s notes. He could not
recall any discussion about possible savings on health insurance
costs and he could not recall any union wage proposal. Carkner
also attended the October 23, 1996, and March 10, 1997 meet-
ings but he had no independent recollection of those meetings.
I shall not rely on Carkner’s testimony because I do not believe
that he had any independent recall of the relevant events.
Leibowitz testified that on March 13, the parties discussed
the Respondent’s position that it would implement a wage de-
crease. At the end of the meeting, the Respondent said it would
implement the decrease with or without the Union’s agreement.
Leibowitz said, “you’ll do what you have to do, we will do
what we have to do.” Leibowitz did not recall that anyone used
the word impasse. Leibowitz testified that when Arfa said that
the Respondent would implement there was an implication that
the parties were at impasse, but no one used the word impasse.
Leibowitz’ notes show that the parties discussed the Respon-
dent’s business and its three city contracts. Then the Union
caucused came back into the meeting saying that it would not
agree to any cuts. The Respondent said that it would imple-
ment its proposed wage reductions. After another caucus, the
Respondent gave the Union its health insurance costs from
1992 to 1997 broken down into per capita and total costs.
Leibowitz did not believe that the parties were at impasse.
He testified that he had repeatedly asked the Respondent for a
full overall proposal in response to the Union’s demands. But
Arfa had wanted to discuss noneconomic matters before mak-
ing an economic proposal and the Respondent’s February 5
written proposals had contained no economic items. After the
February 12 memorandum was issued, Arfa had taken the posi-
tion that he could not make a proposal because the Respondent
had an outstanding request to reduce wages. The parties had
not reached agreement on any matters by March 13.
g. Implementation of wage reductions
On March 29, 1997, the Respondent implemented the cuts
originally proposed on February 12. It did not implement the
entire proposal it had made on February 5, 1997.
Arfa testified that the Respondent did not claim inability to
pay the increases demanded by the Union. Respondent only
claimed that it was paying more for labor than the rate of city
reimbursement and that it did not wish to continue subsidizing
its labor costs. The change in compensation implemented on
March 29 did not stem from an overall corporate inability to
pay.
B. Discussion and Conclusions
The General Counsel relies on Bottom Line, 302 NLRB 373
(1991), as controlling in the instant case. In that case, the
Board said:

[W]hen . . . the parties are engaged in negotiations, an em-
ployer’s obligation to refrain from unilateral changes extends
beyond the mere duty to give notice and an opportunity to
bargain; it encompasses a duty to refrain from implementation
at all, unless and until an overall impasse has been reached on
bargaining for the agreement as a whole. The Board has rec-
ognized two limited exceptions to this general rule: “[w]hen a
union, in response to an employer’s diligent and earnest ef-
forts to engage in bargaining, insists on continually avoiding
or delaying bargaining,” and when economic exigencies
compel prompt action. [Footnotes omitted. 302 NLRB at
374.]

It is undisputed that in the instant case the implementation of
the reductions in premium pay constituted a unilateral change.
I must therefore decide whether an overall impasse had been
reached in bargaining for the agreement as a whole. If I find
that no such overall impasse had been reached, I must next
decide whether the Union had delayed bargaining or whether
the Respondent was subject to an economic exigency.
I find that Arfa’s recollection of the events relating to the in-
stant case is not as accurate as that of Leibowitz. At various
points in the hearing Arfa testified with certainty about what he
did and when he did it only to be refuted by documentary evi-
dence. Therefore, I shall not credit Arfa’s version of the March
13 bargaining session. Further, I find that Arfa’s notes of
March 13 reflect the Respondent’s position to declare the nego-
tiations at impasse so that it could proceed to implement the
wage reductions it had announced 1 month before.8 I find that
the notes do not accurately transcribe what Leibowitz said at
the meeting. I credit Leibowitz that at the March 13 meeting he
did not say that the parties were at impasse. I credit Leibowitz
that the Respondent came into the March 13 session with the
expressed intention that it wanted to discuss a wage reduction.
I credit Leibowitz that the Respondent said it would implement
the premium rate decrease with or without the Union’s consent.
Leibowitz understood the Respondent to be implying that there
was an impasse so that it could reduce the employees’ premium
pay. However, the mere declaration that an impasse exists does
not make it so.
Based on the bargaining history of the parties, I cannot find
that they were at overall impasse for the agreement as a whole.
The parties had met four times. At the first session in July
1996, the Union presented its demands in outline and the par-
ties proceeded to discuss them. Many issues were discussed,
including health benefits and the possibility of using the union
health plan, the wage increase demand and the alleged insuffi-
ciency of the reimbursement rate for labor costs. Both sides
asked for information, and the Respondent asked for copies of
the health plan trust indentures. At the second session in Octo-
ber 1996, the Union presented a full draft of its demands. The
parties discussed funding for a wage increase and the rising
cost of health insurance. Beginning in November 1996, the
Union regularly wrote to Arfa asking that the Respondent’s
counterproposals to the Union’s demands to be sent. These
were given to the Union in February 1997. Although Arfa
testified that the Respondent wished to defer the economic

8 I do not credit Savino that Liebowitz stated that the parties were at
impasse. Savino had a selective memory when he testified.
METROCARE HOME SERVICES, INC. 1575
aspects of the Union’s demands until the parties agreed on
noneconomic issues and although the Respondent’s written
response deferred all economic items for later discussion,
Arfa’s cover letter asked that the Union advance proposals
relative to the economic issues. Arfa explained this apparent
contradiction on cross-examination by stating that the Respon-
dent would have been prepared to discuss economic issues if
the Union had proposed a wage cut to finance other benefits. In
effect, the Respondent made its first economic proposal on
February 12 when it announced that it would reduce premium
pay. The last two bargaining sessions of March 10 and 13,
1997, were devoted to the Respondent’s announced proposal to
cut premium pay. The parties discussed the cost of health in-
surance and the possibility of saving money on health insurance
rather than reducing wages. The Union requested information
on March 11 so that it could establish the extent of possible
savings under the Union health and welfare plan.
In the four sessions of bargaining, the parties had not agreed
to any contract provisions. They had not discussed extensively
many of the demands in the Union’s draft contract. They had
not discussed extensively the proposals the Respondent had
sent to the Union in February. At the final session, the Union
said that it would not agree to wage cuts and the Respondent
replied that it would nevertheless implement the cuts. The
record establishes that after the Respondent presented its de-
mands by announcing an unlawful reduction directly to em-
ployees, it never took the time to discuss alternatives with the
Union, even though the Union stated its belief that money could
be saved by placing the employees in the Union’s welfare fund.
Moreover, the record shows that discussion of these alternatives
might well have been productive. The Respondent’s own man-
agement had suggested saving money on health insurance as a
possible solution to the labor cost problem. The Union had
been suggesting the possibility of cheaper insurance and it had
been trying to obtain the information necessary to explore such
a solution during the period of negotiations. It is clear that
further discussion of health insurance costs would not have
been futile.
The Respondent had taken 4 months to deliver its response
to the Union’s demands. The Respondent’s response was self-
contradictory and even Arfa was incapable of making sense of
it. The written response provided that the Respondent wished
to defer discussion of economic issues, but Arfa’s cover letter
and the Respondent’s own actions showed that the opposite was
true. Given the Respondent’s tactics, it would have been al-
most impossible for the parties to bargain effectively. There-
fore, it cannot be said that the parties had exhausted good-faith
negotiations. Once the Respondent apparently decided to lower
wages no matter what the Union’s response, there was no op-
portunity for real bargaining to take place and a declaration of
impasse was thus unfounded.
From my discussion of the facts above, it is clear that there is
absolutely no evidence in the record to show that the Union
delayed bargaining.
In RBE Electronics of S.D., 320 NLRB 80 (1995), the Board
discussed the economic exigency exception set forth in Bottom
Line, supra. The Board recognized the existence of circum-
stances which might excuse unilateral action while bargaining
is ongoing. It described these circumstances as a “compelling
business justification” requiring prompt action. The Board
additionally recognized the existence of other economic exi-
gencies which, while not sufficiently compelling to excuse
bargaining altogether, would permit the employer to make uni-
lateral changes after giving notice and an opportunity to bargain
to the Union. These circumstances were described by the
Board as those where “time is of the essence and which demand
prompt action” and the exigency was “caused by external
events, was beyond the employer’s control, or was not reasona-
bly foreseeable.” 320 NLRB at 82 (footnotes omitted).
I cannot find that economic exigency justified the Respon-
dent’s implementation of the premium pay cuts. Arfa testified
that the Respondent did not claim inability to pay the wage
increases demanded by the Union. A fortiori, the Respondent
cannot claim inability to pay the wages in effect while the par-
ties were bargaining. Thus, the Respondent has not shown that
it was subject to the exception which would permit it to take
unilateral action without any notice to or bargaining with the
Union. The Respondent wished to cease diverting to its wage
costs a portion of the reimbursement destined to its overhead
and profits. But, as Arfa acknowledged, there was no overall
corporate inability to pay wages at an increased level, let alone
at the current level. The Respondent was in a position where its
profits were being squeezed. This is a common occurrence in
the business world and it hardly qualifies as an economic exi-
gency. The Respondent had been aware of a trend of diminish-
ing profits due to the city reimbursement freeze for several
years. More to the point, the record contains no evidence that
prompt action was required to save the Respondent from some
dire financial fate. All that the record discloses is that there had
been a decline in profits and that the Respondent’s managers
were determined to halt this decline. Even if I were to find that
the situation herein constituted the type of economic exigency
where the Respondent was entitled to take unilateral action
after notice to the Union and an opportunity to bargain, I would
not find that the parties had reached impasse on the matter pro-
posed for change. As stated above, the record shows that it
may well have been productive for the parties to discuss sav-
ings in health care to offset increased wage costs. The Union
was attempting to discuss this solution with the Respondent
when the Respondent declared impasse.
Finally, it requires no extensive discussion to find that the
February 12 announcement of a wage cut directly to the em-
ployees without any notice to the Union was unlawful. NLRB
v. Katz, 369 U.S. 736 (1962).
CONCLUSIONS OF LAW
1. At all times material, Community and Social Agency Em-
ployees Union, District Council 1707, AFSCME, has been the
exclusive collective-bargaining representative of the employees
in the following appropriate unit:

All full-time and regular part-time home care workers, home
attendants, home health aides, certified home health aides,
personal care aides, certified personal care aides, and home
makers employed by the Employer.

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1576
2. By announcing a wage reduction without notice to the Un-
ion and by implementing a wage reduction at a time when no
impasse in bargaining with the Union had occurred, the Re-
spondent violated Section 8(a)(1) and (5) of the Act.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act.
Having found that the Respondent unilaterally implemented
a reduction in wages at a time when no impasse had occurred, I
shall order the Respondent, on request, to bargain collectively
in good faith with the Union on terms and conditions of em-
ployment of unit employees and, if an understanding is reached,
to embody the understanding in a signed agreement.
I shall order the Respondent to reinstate the wages and terms
and conditions of employment that existed before its unlawful
changes, and to make whole unit employees for any losses suf-
fered as a result of its unlawful action in the manner prescribed
in Ogle Protection Service, 183 NLRB 682 (1970), with inter-
est to be computed in the manner set forth in New Horizons for
the Retarded, 283 NLRB 1173 (1987).
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended9
ORDER
The Respondent, Metrocare Home Services, Inc., New York,
New York, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Announcing wage reductions without notice to the Union,
and implementing wage reductions at a time when no impasse
in bargaining with the Union has occurred.
(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 effec-
tuate the policies of the Act.
(a) On request, bargain with the Union as the exclusive rep-
resentative of the employees in the following appropriate unit
concerning terms and conditions of employment and, if an un-
derstanding is reached, embody the understanding in a signed
agreement:

All full-time and regular part-time home care workers, home
attendants, home health aides, certified home health aides,
personal care aides, certified personal care aides, and home
makers employed by the Employer.

(b) On request, reinstate the wages and terms and conditions
of employment that existed before the unlawful unilateral
changes.

9 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
(c) Make the employees whole for any loss of earnings and
other benefits suffered as a result of the unlawful changes in the
manner set forth in the remedy section of the decision.
(d) Preserve and, within 14 days of a request, make available
to the Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards, per-
sonnel records and reports, and all other records necessary to
analyze the amount of backpay due under the terms of this Or-
der.
(e) Within 14 days after service by the Region, post at its fa-
cility in New York, New York, copies of the attached notice
marked “Appendix.”10 Copies of the notice, on forms provided
by the Regional Director for Region 2, 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. In
the event that, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facility in-
volved in these proceedings, the Respondent shall duplicate and
mail, at its own expense, a copy of the notice to all current em-
ployees and former employees employed by the Respondent at
any time since February 12, 1997.
(f) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.
IT IS FURTHER ORDERED that Case 2–CA–31636 is sev-
ered from the instant proceeding and that it is dismissed.
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 ordered us to post and abide
by this notice.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their
own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected con-
certed activities.

WE WILL NOT announce wage reductions to our employ-
ees without notice to their Union.
10 If this Order is enforced by a Judgment of the 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.”
METROCARE HOME SERVICES, INC. 1577
WE WILL NOT reduce the wages of our employees when
no impasse in bargaining with the Union has occurred.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL, on request, bargain with Community and Social
Agency Employees Union, District Council 1707, AFSCME,
and put in writing and sign any agreement reached on terms and
conditions of employment for our employees in the bargaining
unit:

All full-time and regular part-time home care workers, home
attendants, home health aides, certified home health aides,
personal care aides, certified personal care aides, and home
makers employed by the Employer.

WE WILL, on request from the Union, reinstate the wages
that existed before the unlawful changes we made.
WE WILL make our employees whole for any loss of earn-
ings and other benefits resulting from our unlawful reduction of
their wages, plus interest.

METROCARE HOME SERVICES, INC.