Neon Sign Corp.

National Labor Relations Board - Board Decisions

Mar 23, 1977

229 N.L.R.B. 861 (N.L.R.B. 1977)

NEON SIGN CORP.
Neon Sign Corporation and Sheet Metal Workers
International Association, Local Union No. 11
Industrial Electric, Inc. and Sheet Metal Workers
International Association, Local Union No. 11
Cases 15-CA-5932 and 15-CA-5933
March 23, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND PENELLO
On September 20, 1976, Administrative Law Judge
Morton D. Friedman issued the attached Decision in
this proceeding. Thereafter, the General Counsel
filed exceptions and a brief and Respondents filed
cross-exceptions and a brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,1 and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
The complaint alleged that Respondents Neon
Sign Corporation, herein called Neon, and Industrial
Electric Inc., herein called Industrial, violated
Section 8(a)(5) of the Act by failing to bargain in
good faith with the Sheet Metal Workers Internation-
al Association, Local Union No. II, herein called the
Union. At the hearing, Administrative Law Judge
Friedman permitted the General Counsel to amend
the complaint to add an additional allegation of
refusal to bargain, i.e., that Respondents unilaterally
reduced the wages of employees performing unit
work without consultation or bargaining with the
Union. The Administrative Law Judge dismissed
both allegations. For the reasons stated below, we
disagree with his dismissals.
The record shows that, after a long history of
collective bargaining between the Union and various
employers jointly, representatives of Respondents
Industrial and Neon Sign met on May 12, 1975, to
begin negotiations for a new contract. Present at the
initial meeting and throughout most of the meetings
which followed were Neon's president, Hunter;
Industrial's president and vice president, Brignac and
Ferguson; and the union president, Gaudet.
I In Conclusion of Law 5, the Administrative Law Judge inadvertently
referred to the May 31 strike as an "unfair labor practice" strike. It is clear
from his specific findings and the remainder of his Decision that he intended
to say "economic" strike.
2 The testimony of Respondents' witnesses, especially Brignac, in our
229 NLRB No. 125
The first meeting began with Brignac informing the
Union that the companies would be offering a
reduced wage package. This was necessary, he
explained, because of financial difficulties already
being experienced by Industrial and anticipated by
Neon due to competition from out-of-state and
nonunion companies. After some further general
discussion, Gaudet took Brignac aside and suggested
that the Union might be willing to take only a 60-
cent wage increase and also that it could make some
accommodations to Respondent's financial needs.
Specifically, Gaudet proposed that new employees
receive lower wages, that there be an expansion in
the duties of helpers, and that the helper/journeyman
ratio be increased.2 Brignac agreed to talk to his
people and get back to Gaudet.
Respondents presented their written contract
proposal to the Union at the second bargaining
meeting held on May 19. The proposal contained
numerous reductions in pay and fringe benefits.
Specifically, the Companies proposed to cut journey-
man wages by $1.60 an hour, to cut the wages of
helpers and apprentices, to cut out four paid
holidays, and to reduce vacation benefits. In addi-
tion, the proposed contract did not contain the hiring
hall clause of the current agreement and contemplat-
ed major changes in the existing grievance procedure.
Gaudet looked over the proposed contract for a
few minutes and then asked Respondents "whether
they were kidding." He then counteroffered with the
new proposed Building Trades contract, acknowledg-
ing that it was, in the circumstances, as ridiculous as
Respondents' offer.
At the third meeting on May 27, the bargaining
made little progress. Gaudet proposed several addi-
tional ways in which the Union could decrease
Respondents' costs: a decrease in vacation time for
employees with I to 5 years and a permanent wage
ceiling on new hires of 50 percent of current
journeyman scale; but neither of these proposals
elicited any reaction from Respondents.
The fourth bargaining session, held on May 30, the
eve of the current contract's expiration, followed a
familiar pattern. The Union, having successfully
completed its negotiations with employer Lamar
Dean separately, offered the terms of that contract
which reduced its wage demand from 60 cents to 47
cents an hour. Respondents stuck to their original
offer sharply reducing existing wages. Frustrated by
Respondents' failure to respond, Gaudet then de-
manded to know why Respondents' representatives
view, establishes that the counterproposals stated above were made by the
Union during the course of the bargaining. The Administrative Law Judge
found Brignac "to be a more reliable witness in most instances" than
Gaudet.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
were even bothering to meet with him. The response
was that they were meeting on advice of counsel. 3
On May 31, the parties' collective-bargaining
agreement expired. The Union, whose workers were
already honoring the picket line of a sister local,
voted to strike after learning of Respondents'
recalcitrance at the bargaining table.
The parties' next meeting was held sometime in
July; the exact date is disputed. At the invitation of
the Union, a Federal Mediator attended the session.
Industrial's representative, Ferguson, took notes at
the meeting, which were entered into evidence at the
hearing. The notes show that the meeting began with
the Union making a series of proposals dealing with
certain noneconomic sections of the contract pro-
posed by Respondents. There is no indication that
Respondents acceded to any of the Union's requests.
More importantly, however, Ferguson's notes show
that he and Hunter were approached by the
mediator, Taylor, after the latter had met privately
with Gaudet, and advised that the Union might be
able to accept the proposed money package if the
Companies would make certain noneconomic con-
cessions.
The parties met for the last time on August 27. It
was at this meeting that Brignac inquired of Gaudet
whether the Union would agree to cross the picket
lines of a sister local in order to return if agreement
were reached.
While acknowledging that, at first glance, Respon-
dents appear to have engaged in "surface bargain-
ing," the Administrative Law Judge nevertheless
concludes that their conduct consisted of "hard
bargaining," nothing more. Overlooking the Union's
efforts, he finds that neither party moved significant-
ly from its initial bargaining position. He accepts
Industrial's financial problems and Neon's antici-
pated financial difficulties as justification for their
recalcitrant position at the table, stressing that the
reason Respondents' first offer was a final offer was
that the Union did not satisfactorily accommodate
Respondents' financial needs. As further evidence of
Respondents' good faith, the Administrative Law
Judge offers Brignac's "genuine" distaste at having to
cut the wages of long-time loyal employees. Although
he credits Gaudet's testimony to the effect that
Respondents' representatives told him they were
meeting with the Union on advice of counsel, the
Administrative Law Judge dismissed the logical
implication of that statement with the conclusion
that what must have been meant was "that Respon-
dents should meet with the intention of reaching an
agreement." Finally, nowhere in his Decision does
the Administrative Law Judge mention manage-
:' The Administrative Law Judge appears to credit Gaudet's testimony on
this point, since all of Respondents' witnesses denied that anything was ever
said about meeting with the Union on advice of counsel.
ment's July meeting notes establishing that mediator
Taylor told Respondents that the Union at that point
was ready to consider accepting Respondent's
economic package if they would make some noneco-
nomic concessions.
We find the above rationalization of Respondents'
actions totally unconvincing. In our opinion, the
reasoning of the Administrative Law Judge fails to
fairly assess the Union's efforts as set forth in the
record. Respondents began the bargaining with a
contractual proposal which they knew would be
extremely unpalatable for the Union. Even the
Administrative Law Judge admits that "the Union
could not easily go back to its members and try ...
to sell the members on the Respondents' proposal."
Respondents then proceeded to sit through six
bargaining sessions, refusing to change even one
word of their contract offer despite a number of
counterproposals by the Union responsive to Re-
spondents' financial needs. While it appears that
Respondents, particularly Industrial, required some
financial relief, possibly to the extent their proposed
wage and benefit cuts provided, their intransigence
on noneconomic issues as well is not explained or
excused by that circumstance.
Nor are we convinced that the Administrative Law
Judge correctly interprets the statute when he
concludes that Respondents' inaction was justified
since the Union had the initial burden of coming up
with a counteroffer satisfactory to Respondents in
order to entice them to move, and failed to do so. As
we view Section 8(a)(5), it imposes the obligation to
bargain in good faith on both parties equally. This
obligation extends beyond a mereproforma appear-
ance at the bargaining table. At minimum, the Act
requires that the parties possess a good-faith inten-
tion to reach an agreement. Nothing on this record
demonstrates that Respondents had such an intent.
Respondents' actions herein negate any argument
that they were bargaining in good faith. They ignored
every effort by the Union to accommodate their
financial needs. Moreover, when told by an impartial
mediator that the Union might accept their economic
demands if they would make some concessions on
noneconomic issues, they instead introduced a
further stumbling block into the negotiations by
asking the Union whether its members would, on
returning to work, cross picket lines of sister locals
striking because they were experiencing similar
contract problems.
Accordingly, we find that Respondents violated
Section 8(a)(5) of the Act by failing to engage in
good-faith bargaining. We further find, contrary to
the Administrative Law Judge, that Respondents
862
NEON SIGN CORP.
violated the Act when they unilaterally reduced the
wages of nonstriking employees. Respondents, hav-
ing engaged in "surface bargaining" only, could not,
as found by the Administrative Law Judge, have
reached impasse with the Union on the subject of
wages. Furthermore, the record shows that Respon-
dents and the Union continued to discuss wages well
after the strike began and the wage reduction was
implemented. Finally, since the employees herein
struck in protest of Respondents' bargaining con-
duct, we find that their strike was an unfair labor
practice strike and they were therefore entitled to
reinstatement.
ORDER 4
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondents,
Neon Sign Corporation, Metairie, Louisiana, and
Industrial Electric, Inc., New Orleans, Louisiana,
their officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively in good faith
concerning rates of pay, wages, hours, and other
terms and conditions of employment with Sheet
Metal Workers International Association, Local
Union No. 11, as the exclusive bargaining represen-
tative of their employees in the recognized units.
(b) Unilaterally changing the wage rates of employ-
ees in the collective-bargaining units without consul-
tation with or notification to the above-named
Union.
(c) In any like or related manner interfering with,
restraining, or coercing their employees in the
exercise of the rights guaranteed them by Section 7 of
the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the Act:
(a) Upon request, bargain in good faith with the
above-named labor organization as the exclusive
representative of all employees in the appropriate
units with respect to wages, hours, and other terms
and conditions of employment and, if an understand-
ing is reached, embody such understanding in a
signed agreement.
(b) Retroactively reinstate the wage rates and other
benefits in effect immediately prior to the strike on
May 31, 1975, and make whole the employees who
thereafter worked for lower wages by paying all
wages and other benefits as provided in the expired
collective-bargaining agreement, which would have
been paid absent Respondents' unlawful conduct
herein. The backpay shall be computed on a
quarterly basis in the manner set forth in F. W.
Woolworth Company, 90 NLRB 289 (1950), with
interest thereon at the rate of 6 percent per annum,
as set forth in Isis Plumbing & Heating Co., 138
NLRB 716 (1962).
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to analyze the amount of
backpay due under the terms of this Order.
(d) Post at their Metairie and New Orleans plants,
respectively, copies of the attached notice marked
"Appendix." 5 Copies of said notice on forms
provided by the Regional Director for Region 15,
after being duly signed by the Respondents' autho-
rized representatives, shall be posted by Respondents
immediately upon receipt thereof, and be maintained
by them for 60 consecutive days thereafter, in
conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by Respondents to insure
that said notices are not altered, defaced, or covered
by any other material.
(e) Notify the Regional Director for Region 15, in
writing, within 20 days from the date of this Order,
what steps Respondents have taken to comply
herewith.
4The record is unclear as to how many, if any. Neon Sign employees, not
strike replacements. were affected by Neon's post-May 31 reduction in the
wage rates. We leave this matter for determination at the compliance stage.
' In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain in good faith
with Sheet Metal Workers International Associa-
tion, Local Union No. 11, about employees'
wages, hours, and other terms and conditions of
employment.
WE WILL NOT bypass the Union by unilaterally
decreasing the wages of our employees.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed them by
Section 7 of the National Labor Relations Act.
WE WILL, upon request, bargain in good faith
with the Union about employees' wages, hours,
and other terms and conditions of employment.
WE WILL reinstate the wage rates and other
benefits in effect immediately prior to the strike
863
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on May 31, 1975, and WE WILL make whole all
employees who thereafter worked for lower wages
and benefits.
NEON SIGN
CORPORATION
INDUSTRIAL ELECTRIC,
INC.
DECISION
STATEMENT OF THE CASE
MORTON D. FRIEDMAN, Administrative Law Judge: This
case was heard in New Orleans, Louisiana, upon separate
complaints issued on January 6, 1976, and consolidated for
hearing, which complaints were based on separate charges
filed by Sheet Metal Workers International Association,
Local Union No. II, herein called the Union, on Novem-
ber 20, 1975. The complaints allege, in substance, that the
Respondents, Neon Sign Corporation and Industrial
Electric, Inc., herein respectively called Neon and Industri-
al, or collectively, the Respondents, are refusing to bargain
in good faith with the Union as the exclusive representative
of the Respondents sheet metal work employees and have
been negotiating with the Union in bad faith with no
intention of entering into a collective-bargaining agree-
ment with the Union. At the hearing, the General Counsel
was permitted to amend the complaint to include an
additional allegation of refusal to bargain in that the
Respondents, allegedly, unilaterally reduced the wages of
their employees performing the work of the unit employees
without consultation or bargaining with the Union. The
complaints further allege that the employees of the
Respondents have gone out on strike against the Respon-
dents by reason of the aforesaid alleged unfair labor
practices.
In their duly served answers, the Respondents, while
admitting certain allegations of the complaint, deny the
commission of any unfair labor practices. Respondents
further contend that the aforesaid strike against them is an
economic, and not an unfair labor practice, strike.
At the hearing all parties were represented, were afforded
full opportunity to be heard, to introduce relevant
evidence, to present oral argument, and to file briefs. Oral
argument was waived. Briefs were filed by counsel for the
General Counsel and the Respondents. Upon consider-
ation of the entire record herein ' and upon my observation
of each witness appearing before me, I make the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENTS
Both Neon and Industrial are Louisizna corporations
separately engaged in the manufacture and sale of
advertising signs. Neon maintains its office and principal
place of business in Metairie, Louisiana, and Industrial
maintains its office and principal place of business in New
There being no opposition, counsel for the Respondents' motion to
correct the record dated April 19, 1976, is granted in all respects.
Orleans, Louisiana. During the year immediately preceding
the issuance of the complaints herein, a representative
period, each Respondent purchased and received directly
from points located outside the State of Louisiana goods
and materials of a value in excess of $50,000.
It is admitted, and I find, that the Respondents are
employers engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted, and I find, that the Union is a labor
organization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
As noted above, the Respondents are engaged in the
manufacture, erection, and service of neon, plastic, and
porcelain signs. Respondent Industrial additionally erects
signs in the New Orleans area for other sign manufacturers
located in various parts of the country. Both Respondents,
along with two other sign companies, Lamar Dean
Outdoor Advertising and A-I Signs, Inc., have had a
bargaining relationship with the Union for a number of
years. Industrial has had a contract with the Union for over
30 years. Both Respondents also have contracts with a
local of the International Brotherhood of Electrical
Workers, herein referred to as the Electricians, the Sign
and Pictorial Painters, Local Union No. 791, herein called
the Sign Painters, and a local of the Teamsters.
The most recent collective-bargaining agreement be-
tween the four above-mentioned companies and the Union
was made effective as of June 1, 1973, for a period of 3
years, expiring May 31, 1975. However, on February 4,
1975, the Union, through its president, Stanley J. Gaudet,
addressed a letter to each of the four aforesaid companies
in which it advised that the Union desired to reopen the
agreement and to modify or terminate the same. Gaudet
further informed these companies that the Union was
ready to meet with them at their earliest convenience. In
reply to this request, on February 10, 1975, the four
employers, through their respective officers and agents, by
letter, informed the Union that they desired to end the
contract upon the expiration date thereof, May 31, 1975. In
this letter they further informed the Union that they felt
compelled to take the action due to "the increasing amount
of nonunion competition and also out of town union
competition which we are forced to face. It is becoming
increasingly difficult for us to compete under the condi-
tions in which we operate." The letter further informed the
Union that the four employers were ready to negotiate a
new contract and hoped that they would be able to
conclude one which would enable them to continue in the
sign business.
Thus, before negotiations toward a new contract were
ever undertaken, the Union was informed by the employers
involved that they could no longer continue with the
provisions of the expiring agreement and, accordingly, it
864
NEON SIGN CORP.
must be concluded that the Union was forewarned, and
alerted that the employers involved found themselves in a
difficult financial situation. Additionally, before the first
meeting took place, Lamar Dean, by its operations
manager, F. O. Steckler, informed the Union by letter
dated April 24, 1975, that Lamar Dean wished to insert a
provision which would allow it to contract out any and all
work which in Lamar Dean's opinion either could be done
more quickly or more cheaply outside its own shop.
Moreover, with regard to conditions within the facilities
of the two Respondents herein, the Union must have been
aware that as of the date on which the contract expired and
the date on which the negotiations toward a new contract
began, there had been substantial economic layoffs.
B. The Negotiations
It is not necessary to relate in detail the events at each of
the bargaining sessions which ensued as a result of this
exchange of letters. However, suffice it to say, the first
meeting was held on May 12, 1975, at Respondent
Industrial's office in New Orleans. 2 The Union was
represented by Gaudet, president of the Union, a Mr.
Maggio, vice president of the Union and employees who
were members of the negotiating committee. Representing
the Respondents were Edmine M. Brignac, president of
Industrial, William S. Ferguson, vice president of Industri-
al, William F. Hunter, Jr., president of Neon, and Mr. F.
O. Steckler, operations manager of Lamar Dean. It was
decided at the outset of the meeting that various individu-
als would chair the meetings and Gaudet was selected to
chair this first meeting. Actually, the meeting was more or
less an introductory session in which nothing was agreed
upon but a few so-called feelers were offered by both sides
in order to establish a starting point for the discussion of
the details of the new collective-bargaining agreement. No
written submissions were made by any party.
Essentially, Brignac, on behalf of the three employers
present, told the union representatives that the employers
were planning to offer approximately the same wage
package that the group had offered the Electrical Workers
and the Sign Painters. Brignac informed the union
representatives that these wage rates were lower than the
rates that had been paid under the terms of the contract
which was to expire on May 31 and apologized for having
to offer a wage reduction. Brignac explained that because
of the position which the employers found themselves to be
in, in relation to others in the same industry, it was
necessary to retrench in order to meet stiff competition
coming from both outside and inside the New Orleans
area. Brignac further explained that the employers involved
could not continue to lose money and stay in business and
further explicated this position by stating that Industrial
had been losing money for some time.
2 Absent from this meeting was any representative from A-I Signs, Inc.
This employer does not in any manner figure in the negotiations and is not a
party to this proceeding.
I Although Gaudet testified that the context of this particular statement
by Brignac was that Bngnac bluntly told Gaudet and the union committee
that if the employees of the Respondents did not care to work at the wages
that Respondents offered, they could work elsewhere. Inasmuch as Brignac
Brignac also informed the Union's representatives that
some of the national sign manufacturing companies which
had contracts with other locals of the Sheet Metal Workers
had far more favorable contracts than the contract which
was expiring between the Union and the parties here
involved, and that by reason thereof these other companies
were able to manufacture outside the New Orleans area,
ship their signs into New Orleans, underbid the Respon-
dents, and thus sell their products below the cost of signs
manufactured by the local New Orleans employers under
contract with the Union. To illustrate this situation,
Brignac produced a contract between a Tennessee compa-
ny which had a collective-bargaining agreement with the
local Sheet Metal Union in the Tennessee area at which the
top wage rate for journeymen was less than $5 per hour. He
further stated that the wage rate Respondents were offering
was in excess of the amount, in that Respondents were
offering a journeyman rate of $5.50 per hour effective June
1, 1975, together with paid vacations and continuation of
health, welfare, and pension plans similar or identical to
those provided for in the expiring contract.
Brignac apologized stating that it was painful to him to
have to make this offer because some of the employees
involved had been with Industrial since Brignac was a
young boy and that he knew them and their history and
that it was extremely difficult for him to have to ask them
to take a reduction in their wage rate. He also informed
Gaudet and the union committee that at the time the
expiring contract was executed Industrial had 20 employ-
ees who were represented by the Union, but by the date of
the meeting this number had been reduced to 13 by reason
of economic necessity. Also, in the past Industrial had
employed as many as 28 members of the Sheet Metal
Union.
Hunter, Neon's president, also stated that he had less
employees at the time than were working for Neon when
the expiring contract had been effectuated.
In addition to all of the foregoing, Brignac told Gaudet
and the union negotiating committee that this was a time
when the Union could afford to give the Respondents some
relief without hurting the union membership because there
was a plethora of work available in the building trades and
construction industries at higher wages than Respondents
were paying and that, therefore, the Union would be able
to obtain an increase in membership by allowing Respon-
dents to hire new employees at rates lower than the scale
provided by the expiring agreement and permitting the
Respondents to train these individuals.3
As heretofore noted, before the first meeting was held,
Steckler of Lamar Dean addressed a letter to the Union
requesting that Lamar Dean be permitted to contract out
work which could be done cheaper or more quickly than in
the Lamar Dean shop. In that letter, he also informed the
Union that this could result in a substantial amount, if not
all of the sheet metal work being done outside the shop.
impressed me as a very forthright and sincere individual and because his
testimony was supported by the testimony of Industrial's vice president,
Ferguson, and Neon's president. Hunter, I conclude that Brignac's version
was the more reliable of the two. Additionally, I find that Gaudet. in other
respects, testified in a very vague manner in referring to dates and what
occurred at each meeting, and, also, in certain instances contradicted
himself on cross-examination.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
During the discussion between the parties at the first
meeting, this contracting out proposal by Steckler was
discussed. Gaudet introduced the letter and the matter of
subcontracting was discussed between Steckler and Gau-
det, with Brignac stating that he felt that Industrial could
also benefit by contracting out because he knew that
Industrial could buy completed signs cheaper than Indus-
trial could make them. Gaudet's answer to this proposal by
Lamar Dean was that he would not allow that but that the
Union would permit contracting out provided the shop to
whom the subcontracting was let had a collective-bargain-
ing agreement with the Union or, at least, maintained
working standards and wages equal to that which would be
permitted under a union collective-bargaining agreement.4
With regard to the claim by Industrial that it was losing
money, Gaudet requested that the Union be permitted to
inspect Industrial's books. Although there is some question
as to whether this request was granted by Brignac on behalf
of Industrial at the first or second meeting of the parties,
there is no question that permission was granted by the
second meeting at the very latest and that auditors for the
Union did inspect the books of Industrial. Significantly, no
testimony was offered by either the Union or counsel for
the General Counsel as to the result of that audit. It can
therefore be inferred, and I do infer, that the result of that
audit must have substantiated Brignac's claim that Indus-
trial was, indeed, losing money and that the representation
to that effect made by Brignac on behalf of Industrial was
made in good faith.
Also during that first meeting, Gaudet inquired of Neon
if that company was losing money and the answer by
Hunter, Neon's president, was in the negative.
Apparently, when it became clear to the parties, and
especially to Gaudet and Brignac, that the negotiations at
this first meeting were getting nowhere, and that little
progress was being made, Gaudet called Brignac aside and
a private conversation ensued between the two. At the
outset of this conversation, Gaudet asked if he and Brignac
could not come to some agreement. Brignac replied that
Industrial needed help. Gaudet answered that something
could possibly be worked out and made reference to a plan
where the existing employees would receive only a 60-cent-
per-hour increase together with fringe benefits that all of
the Building Trades Council member unions would receive
in their new contracts with various employers which were
at that time being negotiated. Gaudet estimated such an
increase would be approximately 15 cents per hour for
employees. Brignac answered with regard to the fringe
benefits that the Respondents could not agree to a fringe
benefit amount which would depend on the outcome of
some other group's negotiations. Then the private discus-
sion between Gaudet and Brignac turned to direct hourly
increases. Nothing came of that. There was some reference
4 It should be noted at this point that Lamar Dean was not in the same
type of sign business as are Industrial and Neon. Lamar Dean is an outdoor
advertisin- firm which manufactures and services billboards. Additionally.
this was the last matter on which Lamar Dean negotiated with the Union
together with the Respondents herein. At a later date, Lamar Dean signed a
separate agreement with the Union, the contents of which, although not
explicitly set forth in the testimony herein, was discussed to an extent at one
of the later meetings between the Respondents and the Union.
I In testifying Gaudet was much less specific in what occurred during
made by Gaudet to provide increases for the present
employees and the hiring of new employees at a lesser rate.
When Brignac asked what would happen if any of the
present employees retired or left employment with the
Respondent, Gaudet stated that these employees would
have to be replaced at the higher rate; i.e., the rate which
the present employees would be receiving. Brignac neither
consented nor refused to accept this proposal. Rather, he
informed Gaudet that he would have to discuss this with
his people and give Gaudet an answer at an ensuing
meeting.
Aside from the foregoing, Gaudet made no specific
references to any particular amount, or of any relief which
could be granted to the Respondents in order to assist them
in their financial difficulties.5
Thus, the first meeting ended. The parties did not get
together in a general session after the private conversation
between Gaudet and Brignac.
It should be noted, however, that Steckler of Lamar
Dean and Gaudet shortly thereafter did negotiate a
separate contract.
It is probable that the next meeting between representa-
tives of the Respondents and Gaudet and the committee on
behalf of the Union took place on May 19. It is also
probable that Brignac did not attend this meeting, but that
Hunter of Neon and Ferguson, Industrial's vice president,
represented the Respondents. It was at this meeting that
Ferguson, on behalf of Industrial and Neon, presented to
Gaudet the Respondents' written proposal. For the most
part, the proposal was in line with what Brignac had
verbally offered to Gaudet at the first meeting. After
receiving the written proposal, Gaudet studied it hurriedly
for a very few minutes and probably, in that time,
concentrated basically on the proposed wage scale. He
then turned to Ferguson and asked the latter if he was
"kidding." The wage scale proposed for the first year of a
3-year contract $5.50 per hour for journeymen; for the
second year $5.75, and for the third year $6. Helpers were
to receive $2.50 the first year, $2.61 the second, and $2.73
the third year as a minimum, and $3.85 the first year, $4.03
the second year, and $4.20 the third year as a maximum,
with a 60-day probation period for new hirees at the
minimum wage.
This written proposal also offered health and welfare
clauses providing for the same contributions as were being
made under the expiring contract. The same was true for
pension contributions. Additionally, the proposal con-
tained a grievance and arbitration procedure differing from
the arbitration procedures of the old contract which
required the grievances and arbitration to be adjudicated
by individuals chosen from the Building Trades Council.
However, when Gaudet asked Ferguson if the latter were
joking, he then presented to the Respondents' representa-
both the general session at the first meeting and the private session between
Gaudet and Brignac. Accordingly, much of the foregoing statement of fact
is taken from the testimony of Brignac rather than Gaudet because it is
apparent, and I find, that Brignac's recollection of what occurred is more
accurate and more detailed in essentials than that of Gaudet. I, therefore,
find that Brignac was a more reliable witness than was Gaudet not only with
regard to the first meeting but to the other meetings at which both Brignac
and Gaudet were present.
866
NEON SIGN CORP.
tives, as the Union's written proposal, the new proposed
Building Trades contract which he admittedly knew the
Respondents could not and would not accept. When they
informed him of this, Gaudet answered that, although he
knew that the proposed Building Trades agreement was
ridiculous in the light of Respondents' difficulties, it was no
more ridiculous than the written proposal of the Respon-
dents. It should be noted, also, that the Respondents'
proposal in addition to the reduction in wages, also
contained a reduction in the number of paid holidays and
overtime, and eliminated the hiring hall provision which
was part of the expiring agreement. However, despite the
fact that Gaudet claimed that the Respondents' proposal
was "ridiculous," he offered nothing concrete by way of a
counterproposal except the above-mentioned Building
Trades Council contract proposal.
A third meeting was held on May 27. The Union had no
written proposal to make countering the Respondents'
written proposal. Gaudet offered only what he had
previously offered Brignac in their private conversation
during the first meeting. These proposals were that the
Respondents retain all of the present employees at the 1974
wage rate level together with an increase of 60 cents per
hour. Additionally, he proposed an increase in fringe
benefits which would be equal to that to be negotiated
between employers who were negotiating with the Building
and Construction Trades Council. He furthermore pro-
posed that new employees replacing old employees would
be employed at the increased rate. That is, replacements
would receive these rates but that additional employees
would be hired at 40 percent of the journeyman scale for
the first 6 months, 45 percent for the second 6 months, and
thereafter 50 percent. He also proposed a vacation of I
week after I year's work and 2 weeks after 2 years of work.
Brignac, on behalf of the Respondents, asked what would
happen during the second year of the contract. Gaudet
replied that the second year would involve another
additional 60-cent-per-hour increase plus whatever fringe
benefits were eventually negotiated by the Building Trades
Council for that year. As noted above, these increases
between the Building Trades Council and employers
engaged in the construction industry had not yet been
negotiated. Brignac responded that the Union's proposal
was of no assistance to the Respondents inasmuch as they
needed help and were in dire need of a reduction in wage
rates and fringe benefits rather than an increase in order to
prevent them from losing money and, perhaps, eventually
having to close their businesses.
The next meeting between the parties took place on May
30, 1975, a Friday. It should be noted that Industrial's
employees were already picketing because they had
honored and were honoring a picket line which had been
established by the Sign Painters. Evidently, Industrial was
also having difficulties in negotiating a collective-bargain-
ing agreement with the Sign Painters.
Between the preceding meeting and the May 30 meeting,
Lamar Dean and the Union had entered into a collective-
bargaining agreement separate and apart from the Respon-
dents. At the May 30 meeting that agreement was
s Gaudet testified that the commissioner's presence was objected to by
the Respondents' representatives. Howeser, as set forth above. I find and
discussed to the extent that Gaudet could not understand
why the Respondents could not reach an agreement
inasmuch as Lamar Dean had reached one. Respondents'
representatives reiterated that Lamar Dean was not a
competitor of the Respondents, but was in the billboard
business and did not construct neon, plastic, and store
signs as did the Respondents. Respondents' representatives
further stated that Lamar Dean's position was so different
from theirs that it could afford to comply with the Union's
requirements of increased wage rates and fringe benefits,
whereas Respondents were not in that position by reason
of the competition not only between themselves but also
between them and competitors from outside and within the
New Orleans area.
The testimony of both Gaudet and Respondents'
representatives, Brignac, Ferguson, and Hunter, was
somewhat at odds, Gaudet claiming that each time the
Union requested the Respondents to move from their
stated position as set forth in their written proposal
submitted at the second meeting Gaudet was told "that was
it." However, Brignac testified that he informed the union
representatives during the May 30 meeting and at all times
thereafter that the written submission was merely a
proposal and not a final demand. Brignac denied that he
told the union representatives that there was nothing which
the Respondents would or could change in their written
proposal.
Additionally, Gaudet testified, and the Respondents'
representatives denied, that when Gaudet claimed he was
frustrated and asked why Respondents' representatives
were attending the meetings, they answered that they were
meeting only because they were instructed to do so by their
counsel. This was emphatically denied by Brignac, Fergu-
son, and Hunter. While I have found Brignac to be a more
reliable witness in most instances than I have found
Gaudet to be, I do conclude that something was said by the
Respondents' representatives relating to the Respondents'
contentions during all of the meetings that their written
submission was merely a proposal, and that they were
instructed by their attorney to attend the meetings in order
to attempt to reach some sort of agreement, provided the
Union would go along with them in their proposal to
reduce, rather than to increase, wage rates and fringe
benefits.
Nothing was accomplished at the May 30 meeting. The
next meeting of the parties took place in July 1975, the
exact date of which is in contention. However, it is not
necessary to fix that date. At that meeting, Brignac,
Ferguson, and Hunter were present but Gaudet was the
only representative for the Union. A commissioner of the
Federal Mediation and Conciliation Service attended the
meeting, invited by Gaudet. Gaudet had not apprised any
of the Respondents' representatives that the commissioner
would be attending the meeting. At the outset, Hunter,
Neon's representative, surprised by the commissioner's
presence, asked the reason or purpose for his being there.
The commissioner explained his capacity and the reason
for his presence, after which the meeting continued. 6
conclude from the testimony of Hunter and other of Respondents
representatives that, in fact, the commissioner's presence was questioned
(Continued)
867
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In any event, even with the commissioner's assistance, no
further progress was made. However, at that meeting
Gaudet outlined to the commissioner, in the presence of
Brignac and the others, what he considered the Respon-
dents' position to be. However, it was evident that he was
not very familiar with the written proposal. Gaudet was
questioned by Brignac as to whether he had thoroughly
read the proposal and admitted that he had not. Brignac, in
effect, then reprimanded Gaudet by telling Gaudet that the
latter had permitted the Respondents' employees to remain
on strike for 2 months without Gaudet's having made a
study of the Respondents' proposal. To this remonstrance
Gaudet made no reply, but merely laughed. Thus, even
with the efforts of the commissioner, nothing was accom-
plished.
The parties met for the last time on August 27, 1975. At
that meeting Brignac, on behalf of the Respondents,
introduced two new matters for discussion with the Union.
As heretofore noted, the Respondents' employees original-
ly had gone out on strike in sympathy with the sign
painting employees whose Union was also engaged in a
labor dispute involving the renewal of their contract.
Additionally, the Respondents were at the same time as the
matters in the instant case occurred also negotiating with
the Electrical Workers. Presumably, the difficulties that
Respondents were having with these other unions were
similar to the difficulties the Respondents were encounter-
ing with the Union here involved because of the financial
straits in which the Respondents found themselves by
reason of their poor economic position and the competitive
market for their products. Accordingly, at this August 27
meeting, Brignac asked Gaudet if the Respondents were to
sign a new agreement with the Union, and the Respon-
dents at such time had not come to an agreement with the
other unions, would the employees represented by the
Union return to work and cross the other unions' picket
lines. Gaudet refused to commit himself, replying that they
could cross that bridge at a later date when they had to
decide on that question. Brignac explained the reason for
his question to Gaudet. He asked the latter if the
Respondents were to sign a contract with the Union and
the employees belonging to the Union returned to work
and walked out the next day in sympathy with the other
trades what would have been accomplished by the signing
of a contract. A review of the testimony with regard to this
particular matter leads me to the conclusion that there was
no proposal by the Respondents to have the Union agree
not to take any action against any employee who had
crossed the Sign Painters picket line.7 Further examination
of the record leads to the conclusion that the Respondents
did not at any time at either that last meeting or any other
meeting condition a reaching of agreement for a new
bargaining contract on any agreement on the part of the
Union that its members would have to cross picket lines in
order to return to work for the Respondents or to remain as
employees of the Respondents.
only for the purpose of finding out the reasons for his attending. I conclude
that Gaudet's testimony constituted a misinterpretation of what actually
occurred.
I It should be noted that on cross-examination Gaudet admitted that at
that time two employees who had crossed the picket line to work for
It was either at that meeting, or at an earlier meeting,
that Gaudet raised an objection to the substitution of the
grievance procedure included in the Respondents' written
proposal for the more involved grievance procedure
contained in the expiring or expired contract. As noted
above, the expired agreement contained a grievance
procedure which involved the Building and Trades Council
to which the Respondents had no relationship and whose
members were not engaged in the same type of business as
were Respondents. Brignac explained that the Respondents
felt that the grievance procedure of the old contract, which
was the standard Sheet Metal union procedure, was unfair
because the grievances were handled by the Building
Trades grievance committee. He explained, as noted above,
that the Respondents did not belong to any association and
did not elect members to the committee and that the
Respondents felt, in the event a grievance was filed, it
would be more fair to Respondents to have their grievances
aired among those who were in the same business as the
Respondents. This fairness policy would be further imple-
mented by selecting an impartial arbitrator, in the event the
grievance went to arbitration, to be selected from names
submitted to the parties by the Federal Mediation and
Conciliation Service. However, Gaudet adamantly refused
to change any of the procedures contained in the expiring
agreement.
Gaudet's testimony was inaccurate in other matters. He
testified, for instance, that the Union reduced its wage
demand to a 43-cent-per-hour wage increase. However, the
record shows that actually the lowest increase that he ever
offered was approximately 47-1/2 cents per hour. Thus, it
would seem, in view of Gaudet's other testimony, that
Gaudet had never actually studied the Respondents'
proposals and had not realized what the Respondents'
proposals contained in their complete form.
Additionally, Gaudet upon further cross-examination at
one point admitted that the Respondents' representatives
had asked him to try to propose something they could live
with. This would seem to refute other portions of his
testimony to the effect that the Respondents had given him
their proposal and told him that it was a "take it or leave
it" situation. While it is true that Gaudet did make some
oral response, as set forth above, with regard to wage rates,
it was equally true that the Respondents could not accept
the same inasmuch as these proposals were of no
immediate help to the Respondents and could only have
resulted in some help at a future date which could possibly
have been too late for the Respondents.
Thus ended the negotiations.8
C. Conclusions as to the Bargaining
As in all cases in which bad-faith surface bargaining
tactics are alleged and in which it is contended that an
employer has gone through the mere mechanics of
bargaining without any intention of ever reaching an
agreement with a union and in which the true purpose of
Respondent Industrial had filed unfair labor practice charges against the
Union, which charges had been settled.
I While there might be further details with regard to the negotiations, set
forth above are only the salient features upon which the decision.
hereinafter set forth, is based.
868
NEON SIGN CORP.
the bargaining was to rid the employer of the necessity of
dealing with a union, the distinction between hard
bargaining and bad-faith bargaining is a very fine one and
difficult to determine. In the instant case this is no less a
problem. However, while it is true that there might have
been some intimation in the remarks of the Respondents'
representatives to the effect that they attended the meetings
with the Union upon instruction of their counsel to do so, I
have heretofore concluded that these instructions were of
the nature, if indeed they were given at all, that the
Respondents should meet with the intention of reaching an
agreement.
Counsel for the General Counsel argues also that if,
indeed, the Respondents were not merely engaging in so-
called surface bargaining, and were claiming in good faith
that their proposal for a reduction in wages and fringe
benefits was necessary in order for them to continue in
business, what economic reason was there to eliminate
from the contract proposal the hiring hall provisions which
were contained in the expired contract or what necessity
was there for changing the grievance and arbitration
procedures neither of which had any monetary effect upon
the Respondents' businesses. The General Counsel would
seem to be contending that these were roadblocks thrown
up during the negotiations in order to bring about a
situation to which the Union could never agree and,
accordingly, accomplish the alleged purpose of the Re-
spondents not to reach any agreement with the Union.
At first blush these contentions and this argument would
seem to have some validity. However, certain other factors
must be considered in balancing the negotiating attitudes
of the Respondents and the Union. For instance, Respon-
dent Industrial, through its president, Brignac, informed
the union representatives at the very outset of negotiations
during the first meeting about the Respondents' economic
plight and stated in no uncertain terms that Respondent
Industrial, at least, was losing money by reason of the
competition which was able to produce signs, at much
lower costs, than could any of the Respondents and that,
therefore, this competition was driving the Respondents
out of business. This claim of loss was immediately seized
upon by Gaudet who asked that the Union be permitted to
send in an auditor to inspect Respondent Industrial's
books. Permission was granted and an audit of the
Respondent's books was made by the Union. However,
very significantly, neither the General Counsel nor the
Union introduced into evidence either the result of that
audit or called to testify the individual or individuals who
made such audit. Accordingly, the only conclusion that can
be made is that Respondent Industrial had lost, and was
losing, money in its business. Nor in any other testimony
given by counsel for the General Counsel's witnesses was
there any refutation of the testimony of Brignac, or any
other Respondent witness, to the effect that competitors
from outside New Orleans were able to produce more
cheaply than were the Respondents and were therefore
able to enter the New Orleans market in a much more
favorable position than were the Respondents under the
terms of the expiring agreement. Neither did the General
Counsel's witnesses testify in any manner whatsoever to
refute the statements of Brignac given to the union
representatives at the first and at other meetings to the
effect that even other locals of Sheet Metal Workets had
lowered their hourly wage rates so that signmakers in other
cities were able to produce more cheaply and more
efficiently than the Respondents.
Accordingly, I accept as genuine the protestations of
Brignac and the others to the effect that Brignac found it
distasteful to have to ask employees who had been loyal to
the Respondents, and had worked for the Respondent
Industrial since Brignac's childhood, to accept a lowering
of their income in order to assist the Respondent. But, one
must ask one's self if this was not a means of preserving
these same employees' jobs rather than a destruction of
their union representation rights. Furthermore, Brignac's
stated in effect that there were jobs open for sheet metal
workers in the Building Trades, of which their Union was a
member, which paid a higher rate than Respondents could
afford and that, if neccessary, the Union, with some effort,
could find individuals jobs at these higher rates.
While it is true that the Respondents did not move to any
significant degree from their original proposal, it is equally
true that neither did the Union. It was made clear to the
Union from the outset that the Respondents needed relief,
but the Union at no time offered any significant relief even
though it knew by its audit that Respondent Industrial, at
least, needed such relief. Nor did Respondent Neon
misrepresent inasmuch as Hunter, Neon's president,
admitted that Neon was not losing money but intimated
that Neon was close to that point.
Additionally, the fact that the Respondents' proposal
contained a new grievance procedure rather than the one
which was standard for the Sheet Metal Workers Union
was fully explained by Brignac and, even though the Union
did not find this procedure acceptable, it was nevertheless
reasonable at least if one accepts Brignac's explanation.
Moreover, although Gaudet attempted, in his testimony, to
convey the impression that all of the Respondents' written
proposal was presented on a take-it-or-leave-it basis, the
testimony of Brignac and Ferguson of Industrial, when
considered in conjunction with much of the cross-examina-
tion of Gaudet, reveals that none of the proposals were
made on a take-it-or-leave-it basis and although the
Respondents did not vary from their original requests they
were open to suggestions if the Union were inclined to
meet their needs on some reasonable basis.
In coming to these conclusions, I have considered the
substance of the Respondents' proposals not for the
purpose of judging their impact on the employees' welfare
or whether concessions should have been made but rather
in the context of whether there was a desire on the part of
the Respondents to ultimately reach an agreement. True,
the Union could not easily go back to its members and try,
as Gaudet stated, to "sell" the members on the Respon-
dents' proposal. However, this consideration is only one of
the possible criteria which could be utilized to determine
whether the Respondents' proposal was of such a nature as
to make it impossible for the Union as a bargaining
representative to accept the conditions laid down by the
Respondents in their proposals. I do not find that the entire
pattern of conduct engaged in by the Respondents made it
impossible for the Union to respond to the Respondents'
869
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proposals. Nor do I find that the Respondents' proposals
or their representatives' conduct at the bargaining table
demonstrated a premeditated resolve not to budge from
their original position.
The Supreme Court has long since decided that the
bargaining requirements of Section 8(a)(5) and 8(d) of the
Act do not grant the Board authority to "either directly or
indirectly, compel concessions or otherwise sit in judgment
upon the substantive terms of collective-bargaining agree-
ments."9 I conclude that the Respondents' conduct here, as
well as the Union's conduct, consisted of hard bargaining
and nothing more. If, indeed, the Respondents were
attempting to "break" the Union, they would not have
included in their proposed written proposal the lengthy and
involved union-security provisions. This would not have
been the proposal of an employer seeking to rid itself of the
Union. I therefore conclude that on the record as a whole
and from my observation of the parties as they testified and
from the testimony itself that the totality of the conduct of
the Respondents did not constitute mere surface bargain-
ing.
One final disposition with regard to the contentions of
the General Counsel must be made. Counsel for the
General Counsel argues that the written proposal submit-
ted by the Respondents at the second meeting of the
parties failed to contain a hiring hall or referral provision
and that this demonstrates Respondents' bad faith.
However, there is no sufficient evidence in the record to
show that this was at length discussed or demanded for
inclusion by any union representative. It could as well have
been omitted through oversight as for any other reason. In
any event, the mere omission of a single clause to this effect
does not constitute proof of bad faith or of surface
bargaining in the light of the entire record.
The basic disagreement between the Union and Respon-
dents was economic. True, the Respondents were adamant
in seeking relief. The willingness to open their books for
inspection proved the necessity for relief. Yet, the Union,
bargaining hard as it had a right to do, never offered any
meaningful relief which might have induced the Respon-
dents to move from their original position. Nor do I accept
as valid General Counsel's contention that a reduced
vacation plan and paid holiday plan would have afforded
no substantial relief but were designed to prevent the
Union from being able to come to agreement.
Accordingly, by reason of all of the foregoing, I find and
conclude that the Respondents did not engage in surface
bargaining and did not fail to bargain in good faith as
alleged in the complaint herein. I further find and conclude
that the General Counsel has failed to meet the required
preponderance of the credible evidence to sustain the
allegations of the complaint which allege such bad-faith
bargaining. Accordingly, I shall order dismissed that
portion of the complaint.
D. The Alleged Unilateral Wage Increase
As noted above, the Respondents and the Union
attempted to negotiate a satisfactory wage level which they
were unable to do. The Respondents requested relief and
submitted to the Union their proposal in which they set
forth the proposed new reduced wage scale which is
unnecessary here to repeat. The Union, in turn, made some
proposals to the Respondents which, in turn, were higher
than the wage level of the expiring agreement. Also, as
heretofore set forth, most of the Respondents' employees,
especially in the case of Industrial, had gone out on strike
in sympathy with the picketing sign painters. Accordingly,
at the stage of the negotiations before the union strike vote
was taken, the strikers could have been no more than
economic strikers. Since the strikers were economic
strikers, the employer had the right, established by Board
law, to replace the strikers. Evidently, however, two of the
Respondent Industrial's employees had crossed the picket
line and were still working for Industrial at the time of the
hearing herein. In the meantime, according to the General
Counsel's witnesses, Gaudet included, on or about May 30
the Respondents' employees decided to strike, not only in
sympathy with the sign painters, but because the Respon-
dents and the Union had been unable to reach a
satisfactory agreement with regard to wages and other
terms and conditions of employment.
Thus, the replacements who were carrying on the day-to-
day work of the Respondents' businesses were entitled to
wages for such work. However, by that time, the Union
had rejected out of hand, and the parties had failed to
come to any agreement on, the Respondents' wage
reduction proposal. I find it unnecessary at this point to
conclude that a classical impasse as envisioned by Board
decisions had occurred. However, there is no doubt that
the Respondents and the Union had bargained to the
extent of at least rejecting each other's offers with regard to
the wages to be paid under any future agreement entered
into. Accordingly, when the Respondents decided on what
wages were to be paid the replacements and the employees
who did not go out on strike, they instituted as the wages
for such employees the wages which were included in the
Respondents' proposal made in writing and given to the
Union at the second bargaining session in May 1975. By
this time the Union had rejected such proposal, and
bargaining over the proposed wage rates had occurred.
Therefore, although the bargaining was still going on to a
certain extent, at least, the Respondents had bargained
with the Union and had not failed to consult with the
Union and had put into effect as wages for the replace-
ments, and those employees not striking, what the Union
had already rejected as unsatisfactory. Therefore, it cannot
be said that the Respondents had failed to consult or
bargain with the Union over the wages paid the replace-
ments and the employees who had not gone out on strike.
Accordingly, the reduction in the wage rates cannot be
found to have been unilateral wage reductions or such
unilateral change in wages, hours, and working conditions
which would constitute a violation of Section 8(a)(5) of the
Act. The Respondents did not institute any changes which
had not already been offered and proposed to the Union
and which the Union had not already rejected. The
9 N.L.R.B. v. American National Insurance Co., 343 U.S. 395, 404 (1952).
870
NEON SIGN CORP.
changes which were made, therefore, were lawful and not
in violation of the Act.' 0
E. The Nature of the Strike
It is unnecessary again to repeat that the Respondents'
employees went out on strike originally in sympathy with
the Sign Painters. I have heretofore found that at the time
of the alleged vote in May in which the union employees
decided to strike the Respondents no unfair labor practices
had been committed by the Respondents; the Respondents
had not failed to bargain in good faith at that time and the
parties had not as yet broken off bargaining. Accordingly, I
find and conclude that the strike which occurred and was
still in effect as of the date of the hearing herein was an
economic strike and that the Respondents had the right,
under established Board law, to replace the strikers.
CONCLUSIONS OF LAW
1. The Respondents are employers engaged in com-
merce within the meaning of Section 2(6) and (7) of the
Act.
0' See N.L.R.B, v. Tex-Tan, Inc., 318 F.2d 472 (C.A. 5. 1963).
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. The Respondents have bargained with the Union in
good faith and have not thereby violated Section 8(a)(5)
and (I) of the Act.
4. By instituting the reduction in wages after the strike
which occurred on or about May 31, 1975, the Respon-
dents did not fail to bargain with the Union in good faith
and therefore did not violate Section 8(aX5) and (1) of the
Act.
5. The strike which began on or about May 31, 1975,
was an unfair labor practice strike and the Respondents,
therefore, were entitled to replace the said strikers.
6. The Respondents have not engaged in dilatory
tactics or otherwise refused to bargain in good faith in
violation of Section 8(a)(5) and (1) of the Act.
[Recommended Order for dismissal omitted from publi-
cation.]
871