Pennex Aluminum Corp.

National Labor Relations Board - Board Decisions

Aug 23, 1984

271 N.L.R.B. 1205 (N.L.R.B. 1984)

PENNEX ALUMINUM CORP.
Pennex Aluminum Corporation and Chauffeurs,
Teamsters and Helpers, Local Union No. 430,
a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America. Case 4-CA-13302
23 August 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 4 November 1983 Administrative Law Judge
William F. Jacobs issued the attached decision. The
Respondent filed exceptions and a supporting brief,
and the General Counsel filed a brief in support of
the judge's decision.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions only to the extent consistent with this
Decision and Order.
The primary issue in this case is whether the Re-
spondent could withdraw its open contract propos-
als before acceptance and resume bargaining in an
attempt to capitalize on its perceived economic
strength.
The facts, which are more fully stated in the
judge's decision, reveal that the parties commenced
bargaining for an initial contract on 23 April 1982.1
Very early in their negotiations, the parties made
concessions and reached tentative agreement in
many key areas. After four negotiation sessions, 2
the Respondent submitted, on 15 June, a contract
package to the Union for ratification. Two days
later, the Union and its membership rejected the
Respondent's contract package. No strike ensued,
but rather the employees continued working.
After rejection, the Union's chief negotiator,
Bruce Keener, contacted the Respondent's attorney
and chief negotiator, Norman White. As reflected
by the record, in the course of their conversations,
Keener indicated four stumbling blocks to ratifica-
tion in the areas of union security, wages, overtime
pay, and sickness and accident benefits. By letter
dated 7 July, the Respondent resubmitted its 15
June contract offer unchanged. No action on it was
taken by the Union until 9 August. On that date,
Keener asked White if the Respondent's last offer
was still on the table. White said that it was.
Keener then said that the offer would be put up for
All dates hereinafter are in 1982 unless otherwise indicated.
2 The judge incorrectly referred to the I June bargaining session as the
"second" meeting when in actuality it was the third such meeting.
271 NLRB No. 197
a ratification vote and if rejected a strike vote
would be taken. At that time, Keener gave no indi-
cation one way or the other as to whether the Re-
spondent's last offer would likely be accepted.
The next day, 10 August, White checked with
his principal, President Harry Thompson, to verify
whether the 15 June offer was still on the bargain-
ing table. Contrary to the judge's findings, the
record shows that according to Thompson's uncon-
troverted testimony he alone withdrew the 15 June
offer and did so because it previously had been re-
jected. After receiving Thompson's position, White
communicated the withdrawal to the Union. The
evidence reveals that, with the exception of the
probationary period length, the Respondent only
withdrew those proposals on which no tentative
agreement had been reached. The Union canceled
the ratification meeting scheduled for 16 August.
Thereafter, the Union contacted the Respondent
to resume bargaining. As agreed, the parties met on
10 September at which time the Union presented
four counterproposals in the areas earlier identified
to the Respondent as the stumbling blocks to ratifi-
cation of an agreement between the parties.
At their next bargaining session, on 16 Septem-
ber, the Respondent proffered new proposals in the
area of wages and union security as described in
the judge's decision. Contrary to the judge's find-
ings that the Respondent's offer at this time had
"fewer benefits," it is impossible to ascertain from
the state of the record whether the Respondent's
16 September proposal actually contained "fewer
benefits" or was regressive bargaining. The Re-
spondent also accepted the Union's proposal for an
increase in sickness and accident benefits coverage.
The parties further agreed to extend the length of
the probationary period to comply with the time
frame of the union-security provision. The parties
later reached impasse, and the Respondent imple-
mented its 16 September offer effective 14 Octo-
ber.3
The judge found a violation of Section 8(a)(5) in
this proceeding in the Respondent's withdrawal on
10 August of its contract proposals. He found the
withdrawal was solely because the employees had
failed to strike following their initial rejection of
the Respondent's offer in June. In finding a viola-
tion, however, the judge misconstrued the Re-
spondent's testimony on its motivation for its 10
August withdrawal. President Thompson testified,
without contradiction, that he alone made the deci-
sion to withdraw the 15 June offer because it pre-
' The judge incorrectly referred to the implementation date as being
"November 14" instead of the correct date of "October 14" which is in
accord with the parties' hearing stipulation and the record.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
viously had been rejected. There is no evidence
that the withdrawal was made solely because no
strike had ensued up to that time. The Respond-
ent's attorney White's testimony indicates that the
absence of a strike to date gave the Respondent
reason to believe that the economic balance had
swung in its favor. Moreover, the timing of the
withdrawal was over 6 weeks after the employees
had failed to strike, tending to show very little
connection between the employees' choice not to
strike and the Respondent's subsequent withdrawal
on 10 August.
Further, even if such connection existed, in the
context of the totality of the parties' bargaining,
there is insufficient evidence to show bad-faith bar-
gaining on the part of the Respondent. Before ac-
ceptance, one may withdraw or change its open
proposals. Shreveport Garment Mfg., 133 NLRB
117, 121 (1961); Loggins Meat Co., 206 NLRB 303
(1973). When offers are withdrawn before accept-
ance the inquiry is concerning the good faith of the
party withdrawing the offers. Loggins Meat Co.,
supra.
In exploring the good faith of the Respondent,
we find that the Respondent held the 15 June offer
open for more than 6 weeks. The Respondent did
not withdraw its entire package on 10 August.
With but one exception, the Respondent withdrew
only those proposals still not yet tentatively agreed
to. In particular, by retracing the negotiations per-
taining to the wages and the union-security propos-
als, it can be seen that many proposals from both
sides were on the table on which no final agree-
ment was reached. In addition, when the Respond-
ent did introduce its 16 September offer, the pro-
posals were not so harsh as to tend to prevent
agreement. The evidence fails to exhibit any desire
on the part of the Respondent to delay, evade, pro-
crastinate, or postpone its bargaining obligation.
The Respondent met regularly and frequently with
the Union, made concessions early in the bargain-
ing, and presented many proposals throughout in
an attempt to reach agreement with the Union.
We are not faced with the situation of withdraw-
al in the face of actual or even imminent accept-
ance as found in Mead Corp., 256 NLRB 686
(1981), enfd. 697 F.2d 1013 (11th Cir. 1983), relied
on by the judge. Here all evidence at the Respond-
ent's disposal on 10 August showed that the Union
would likely reject the offer. In his conversation
with White, Keener gave no indication that the
Union would then endorse the Respondent's offer
to its membership. In fact, Keener's last comments
on the offer were those made shortly after the 17
June rejection, i.e., there were four problem areas
preventing ratification. Thus, cases where actual or
imminent acceptance was present are inapposite to
the disposition of the issue herein. In sum, we shall
dismiss the complaint. 4
ORDER
The complaint is dismissed.
4 Member Dennis finds that this case presents a close factual question
concerning the Respondent's motivation in withdrawing its contract pro-
posals. Based on her review of the record, Member Dennis concludes
that counsel for the General Counsel failed to carry her burden of pro-
viding that the withdrawal was in bad faith or for the purpose of avoid-
ing agreement.
DECISION
WILLIAM F. JACOBS, Administrative Law Judge.
Original charges in Cases 4-CA-12773 and 4-CA-13302
were filed on March 24 and October 28, 1982,' respec-
tively, by Chauffeurs, Teamsters and Helpers, Local
Union No. 430 a/w International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of Amer-
ica (the Union).2 Case 4-CA-13302 was amended on No-
vember 22. Complaint in Case 4-CA-12773 issued on
May 6 against Pennex Aluminum Corporation (Respond-
ent), 3 alleging that it violated Section 8(a)(l) and (3) by
threatening to close the plant if employees chose to be
represented by the Union and by laying off employee
Leonard Brown because of his support for the Union.
On November 20 the two aforementioned cases were
consolidated. The consolidated complaint alleges that
Respondent also violated Section 8(a)(1) and (5) by bar-
gaining in bad faith with no intention of reaching a final
and binding agreement with the Union by modifying its
union-shop proposals and modifying its wage proposals.
In its answer Respondent denies the commission of any
unfair labor practices.
At the hearing, 4 which was held before me on May 9
in Harrisburg, Pennsylvania, the 8(a)(3) allegation was
withdrawn and made the subject of a non-Board settle-
ment. The 8(a)(1) allegation concerning the threat to
close the plant became the subject of an informal settle-
ment agreement which I approved at the hearing. There
remains for consideration and decision, therefore, only
the 8(a)(l) and (5) allegation.
FINDINGS OF FACT
Toward the end of 1981 and in the early months of
1982 the Union undertook an organizing campaign
among Respondent's employees working at its aluminum
extrusion plant in Wellsville. Respondent undertook an
antiunion campaign at the time which included threats of
plant closure and of stalling during negotiations but the
ultimate result of the campaign was certification of the
Union on March 1.
I All dates are in 1982 unless otherwise indicated.
2 The status of the Union as a labor organization is not in issue.
3 Jurisdiction is not in issue.
4 The General Counsel's unopposed motion to correct the transcript is
granted.
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PENNEX ALUMINUM CORP.
Following certification, negotiating sessions were held
on six occasions beginning April 23. At these meetings
the Union was represented by Bruce Keener, business
agent, and James Wardrop, an employee of Respondent,
while Respondent was represented by its attorney,
Norman White, and its president, Harry Thompson.
At the first meeting on April 23, the Union submitted
its initial proposal. No counterproposal was made by Re-
spondent at this time but wages and union security
appear to have been discussed at length.
At the second meeting, on June 1, Respondent offered
the possibility of granting union security with an April
23 effective date in return for the Union's agreeing to
Respondent's discretionary right to grant merit or incen-
tive raises up to S1 per hour. Wage increases being con-
sidered at this time were 15 cents across the board imme-
diately and a 5 cents additional wage increase in 6
months.
At the June 9 meeting new proposals were exchanged
and the Union voiced its antipathy toward the inclusion
of any sort of discretionary merit or incentive wage in-
creases in the contract. The Union submitted a proposal
for an immediate 35-cent-per-hour wage increase with an
additional 15-cent-per-hour wage increase in 6 months
but later lowered its demands to a 25-cent-per-hour wage
increase immediately and an additional 15-cent-per-hour
wage increase in 6 months. Respondent lowered its pro-
posal for a discretionary merit increase from S1 to 50
cents. The Union rejected Respondent's proposal. Re-
spondent then proposed an immediate 25-cent-per-hour
across-the-board increase with an additional 40 cents in
incentives at Respondent's sole discretion or in the alter-
native a 20-cent-per-hour wage increase without incen-
tives. The Union did not agree to either of Respondent's
alternative proposals but did agree to place them before
the membership without a recommendation. A number
of issues still remained to be resolved at the end of the
June 9 negotiating session.
On June 15 White sent a proposed contract to the
Union with a cover letter explaining that Respondent
had not yet reviewed it and it might require some minor
revisions.
The membership voted on June 17 on the alternative
plans and rejected both. Keener advised White of the re-
sults, On July 7 White informed Keener that its last offer
was its best offer and that Respondent had gone as far as
it could go and that the ball was in the Union's court.
Between July 7 and August 9 there was no communi-
cation between the parties. On the latter date Keener
called White and asked if the offer previously made and
voted on by the employees was still on the table, because
if it was, and was a final offer, Keener wished to take
another vote on Respondent's proposal and, if it were re-
jected, then take a strike vote. Faced with this question,
White answered that the proposal was still on the table.
Keener advised White that he had already prepared no-
tices to the membership informing the members of a
forthcoming meeting at which a vote would be taken on
the final offer. White replied that the offer was still on
the table. Relying on White's assurances, Keener had the
notices, already prepared and dated August 6, mailed
out.
On August 10, after consulting with his client, White
withdrew the offer solely on the basis that it had initially
been made at a time when Respondent feared a strike
and now that it knew that there was no strike threat
hanging over its head, it could afford to take a tougher
position. When the offer was withdrawn, no vote was
taken. On September 16 Respondent offered a new pro-
posal containing fewer benefits than were contained in its
earlier proposed agreement. Thus Respondent decreased
its across-the-board wage proposal from 25 cents per
hour to 20 cents per hour and increased its merit increase
proposal from a maximum of 40 cents to a maximum of
75 cents. It also proposed that the effective date of union
security be the contract ratification date rather than Feb-
ruary 19, 1982, which had been proposed earlier. Re-
spondent's position with regard to insisting on the discre-
tionary merit increase was based admittedly on its desire
to maintain control over its employees by keeping a
"free hand" with regard to wages. It is quite apparent
that its position with regard to union security was to set
the effective date later, rather than earlier, at a time
when it felt the Union was weaker with regard to em-
ployee loyalty.
Faced with this situation the Union proffered a new
set of proposals which were rejected by Respondent. Re-
spondent then on November 14 unilaterally implemented
its last "final" proposal, i.e., the lesser offer which had
been triggered by the Union's failure to strike.
Analysis
The underlying purpose and philosophy of the Nation-
al Labor Relations Act is the maintenance of labor peace
through the process of collective bargaining in good
faith. In the instant case Respondent bargained with the
Union in good faith and proffered for the Union's con-
sideration and possible ratification a collective-bargaining
agreement which it considered economically acceptable.
The employees initially rejected Respondent's proposed
agreement but, later, through its bargaining representa-
tive, asked if the proposal was still on the table, where-
upon Respondent's bargaining representative gave assur-
ances that the agreement was, in fact, still on the table
and subject to a second ratification vote. Subsequently,
after Respondent's bargaining representative spoke to
management, he announced that the proposed agreement
had been withdrawn, and admitted at the hearing that
the reason was solely that the employees failed to strike.'
I find that Respondent, by withdrawing its proposed
agreement on August 10, immediately after reoffering it
on August 9 and before the employees had a chance to
vote on ratification, solely because they had failed to strike
following their initial vote, is a tactic which is inconsist-
ent with the purposes of the Act because far from assur-
ing labor peace it puts a premium on labor unrest. Thus,
if I, the Board, then the courts were to find that the bar-
gaining tactics here used by Respondent were lawful,
then every union engaged in collective bargaining would
thereby be placed on notice that unless it struck or im-
mediately accepted the employer's initial proposal, any
5 See R. Br. 19-20, 23; Tr. 129-130.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
such proposal placed on the table by an employer would
be withdrawn and a lesser offer subsequently proposed. 6
The threat of economic reprisals for failure to strike
would have the effect of inducing a strike. The use of
such a tactic inherently evidences a lack of intention to
reach agreement.
Moreover, in the instant case, if it were determined
that Respondent could lawfully withdraw its June con-
tract proposal solely because the employees failed to strike,
and subsequently offer a lesser proposal in September,
why could it not thereafter lawfully and logically with-
draw its September offer if the employees once again
failed to strike, and subsequently offer a third proposal
containing still fewer benefits. The tactic could theoreti-
cally be used ad infinitum or until the strike was forced.
In short, I find that by withdrawing its original con-
tract proposal before a scheduled second ratification vote
solely because the employees failed to strike at the time of,
or following, their initial rejection of the original propos-
al, Respondent failed to bargain in good faith in violation
of Section 8(a)(l) and (5) of the Act.7
THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth above, occur-
ring in connection with its operation described above,
have a close, intimate, and substantial relationship to
trade, traffic, and commerce among the several States
and tend to lead to labor disputes burdening and ob-
structing commerce and the free flow of commerce.
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices in violation of Section 8(a)(1) and (5) of
the Act, I shall recommend that it be ordered to cease
6 This is not to say that prior to ratification, for legitimate economic
reasons, a proposal by an employer could not be withdrawn and a new
proposal with downward revisions proffered in its stead. Cases are nu-
merous on this point. In this case, however, no such legitimate economic
reasons were offered by Respondent for the action taken.
Cf. Mead Corp., 256 NLRB 686 (1981), affd. 697 F.2d 1013 (11th Cir.
1983).
and desist therefrom and to take appropriate and affirma-
tive action designed to effectuate the policies of the Act.
In particular, as I have found that Respondent unlawful-
ly withdrew its original contract proposal before a
second scheduled ratification vote solely because the em-
ployees failed to strike at the time of or following their
initial rejection of the original proposal, I shall recom-
mend that Respondent be required to reinstate the un-
lawfully withdrawn proposal for a period of 20 consecu-
tive days from the date that it is formally offered to the
Union. 8
CONCLUSIONS OF LAW
1. Pennex Aluminum Corporation is an employer en-
gaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. Chauffeurs, Teamsters and Helpers, Local Union
No. 430 a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America is a
labor organization within the meaning of Section 2(5) of
the Act.
3. On March 1, 1982, the Union was certified as the
exclusive collective-bargaining representative of the em-
ployees in the following unit:
All production and maintenance employees, includ-
ing laborers, truckdrivers and shipping and receiv-
ing employees employed by Respondent at its
Wellsville, Pennsylvania location, but excluding all
office clerical employees, professional employees,
guards and supervisors as defined in the Act.
4. By refusing to bargain in good faith with the Union
as the exclusive bargaining representative of the employ-
ees in the above-described unit, Respondent engaged in
unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
5. The above-described unfair labor practices are
unfair labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
[Recommended Order omitted from publication.]
a Mead Corp., supra.
1208