Phelps Dodge Mining Co.

National Labor Relations Board - Board Decisions

Sep 24, 1992

308 N.L.R.B. 985 (N.L.R.B. 1992)

985
308 NLRB No. 140
PHELPS DODGE MINING CO.
1 The name of the Charging Party has been changed to reflect the
new official name of the International Union.
2 The Respondent has requested oral argument. The request is de-
nied as the record, exceptions, and briefs adequately present the
issues and the positions of the parties.
3 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. 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.
We correct two inadvertent errors of the judge. First, in the third
paragraph of sec. I of his decision, the judge incorrectly referred to
the Respondent’s director of employee relations, Stuart L. Marcus,
as ‘‘Stephen’’ Marcus. Second, in sec. VI of his decision, the judge
incorrectly designated the discussion entitled ‘‘Section 8(a)(5) Uni-
lateral Change’’ as ‘‘B.’’ It should be ‘‘C.’’
In affirming the judge’s finding that the Respondent’s unilateral
change in appreciation payments violated Sec. 8(a)(5), we do not
rely on the Respondent’s failure to raise the issue of waiver in its
answer to the complaint. See sec. VI,C,4 of the judge’s decision. In
further regard to that finding, we find no merit in the Respondent’s
reliance on Benchmark Industries, 270 NLRB 22 (1984). Here the
‘‘appreciation payments’’ given employees from 1985 to 1989 were
more than token ‘‘gifts.’’ They constituted significant economic ben-
efits to eligible employees based on the employment-related factors
of wages and hours worked. See sec. VI,C,2 of the judge’s decision.
4 We deny the motion to reopen the record to receive further evi-
dence. Even under Sec. 102.48(b) of the Board’s Rules and Regula-
tions, which the Respondent argues is the applicable rule for deter-
mining the propriety of its motion, the Board has discretion to refuse
to accept motions that seek to introduce evidence which would have
been available for introduction during the trial. Rule 102.48(b) is not
carte blanche for remedying omissions in a party’s trial of the case.
As explained below, however, it is immaterial whether we should
allow the Respondent to revise the testimony of its own allegedly
‘‘confused’’ witness by means of posttrial affidavits, because even
if allowed, the revised record would make no difference in the out-
come.
5 In agreeing that the Respondent violated Sec. 8(a)(3), Member
Oviatt would not infer animus from the mere fact that an employer
confers benefits on employees that it does not wish to become a
practice that is binding on the employer. Further, Member Oviatt
agrees that the Respondent’s ‘‘1990 Union-Free’’ program violated
Sec. 8(a)(3), but he finds it unnecessary to adopt the judge’s linguis-
tic analysis in sec. VI,B,3 of his decision.
Phelps Dodge Mining Company, Tyrone Branch
and United Steelworkers of America, AFL–
CIO, CLC and Transport, Local Delivery and
Sales Drivers, Warehousemen and Helpers,
Mining, Motion Picture and Television Produc-
tion, State of Arizona, Local Union No. 104, an
affiliate of International Brotherhood of Team-
sters, AFL–CIO1 and International Union of
Operating Engineers, Local No. 953, AFL–CIO
Phelps Dodge Rod Mill, El Paso Plant and Inter-
national Brotherhood of Electrical Workers,
Local Union 583, AFL–CIO. Cases 28–CA–
10436, 28–CA–10499, 28–CA–10506, and 28–
CA–10517
September 24, 1992
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS OVIATT
AND RAUDABAUGH
On November 20, 1991, Administrative Law Judge
Timothy D. Nelson issued the attached decision. The
Respondent filed exceptions and a supporting brief.
The United Steelworkers of America, AFL–CIO, CLC
filed an answering brief to which the Respondent filed
a reply brief2 and a motion to reopen the record to re-
ceive further evidence. The General Counsel, the Steel-
workers, and Operating Engineers, Local No. 953,
AFL–CIO each filed an opposition to the motion to re-
open to which the Respondent filed reply briefs.
The National Labor Relations Board has delegated
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 de-
cided to affirm the judge’s rulings, findings,3 and con-
clusions and to adopt the recommended Order.
The Respondent excepts, inter alia, to the judge’s
finding that its initiation of a quarterly appreciation
program limited to unrepresented employees violated
Section 8(a)(1) and (3) of the Act. The Respondent ar-
gues that the judge’s finding in this regard was pre-
mised on an erroneous factual finding that the Re-
spondent, on March 26, 1990, had transmitted to all its
unrepresented employees a letter that was headed with
a salutation ‘‘To: All Union Free Day’s-Pay Employ-
ees.’’ In its motion to reopen the record, the Respond-
ent proffers evidence that the letter with that salutation
was sent only to employees of one of the involved fa-
cilities. It argues that the Board should, on the basis
of this evidence, reverse the judge’s finding that the
program was discriminatory.
We disagree. Even assuming arguendo that we
should receive and consider the proffered evidence4
and accept the proposition that letters with the ‘‘union-
free’’ heading were not sent to all unrepresented em-
ployees, we see no reason to reverse the judge’s ulti-
mate finding that the program was unlawful. It is un-
disputed that all such employees received, by April 15,
1990, along with their first program check, a letter and
payments table from their local managers, and that
each of these documents explicitly referred to the pro-
gram as for ‘‘union-free’’ employees only. This evi-
dence clearly supports the judge’s 8(a)(1) and (3) find-
ings.5
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Phelps Dodge Corporation,
El Paso, Texas, and Tyrone, New Mexico, its officers,
agents, successors, and assigns, shall take the action
set forth in the Order.
986 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The individual Charging Party Unions will be called, in their
order of appearance in the case caption, the Steelworkers, the Team-
sters, the Operating Engineers, and the Electrical Workers.
2 At the trial’s outset the parties entered into a written stipulation
of facts. In that stipulation the parties variously acknowledged that
the names of respondent entities in the case caption of the complaint
do not strictly match the actual corporate form and style of those
entities. In fact, as is acknowledged in the opening remarks of the
Respondent’s counsel, the named entities are corporate subsidiaries
of the Phelps Dodge Corporation. The record elsewhere shows that
officials of the Phelps Dodge Corporation establish all wage and
benefit levels and other policies and programs affecting the em-
ployer-employee relationship at each of those subsidiary locations.
Indeed, the actions challenged by the complaint (the Respondent’s
unilateral inauguration in March–April 1990 of a formal, regularized
bonus plan for ‘‘union-free’’ employees only) were entirely con-
ceived and directed by the Respondent’s corporate president, work-
ing with the top corporate labor relations official. Accordingly, con-
sistent with the colloquy at the beginning of the trial, I will treat
the Phelps Dodge Corporation itself as the pertinent respondent en-
tity.
3 One of these was a consolidated complaint in Cases 28–CA–
10436, 28–CA–10499, and 28–CA–10506; the other was a separate
complaint in Case 28–CA–10517.
4 When the Respondent writes this expression, it does not use a
hyphen between ‘‘union’’ and ‘‘free,’’ even though it admittedly in-
tends by the expression to refer a state of ‘‘freedom’’ from ‘‘union’’
representation. When I adopt this expression for various purposes
below, I will divide those words by a hyphen as a matter of stylistic
preference.
5 In addition, for the first time on brief, the Respondent affirma-
tively claims that the Electrical Workers, at least, have ‘‘waived’’
any bargaining rights they may have otherwise enjoyed with respect
Lewis S. Harris, Esq., for the General Counsel.
Stuart Newman and Jay D. Milone, Esqs. (Jackson, Lewis,
Schnitzler & Krupman), of Atlanta, Georgia, for Respond-
ent Phelps Dodge Corporation.
Gerald Barrett, Esq. (Ward, Keenan & Barrett), of Phoenix,
Arizona, for Charging Parties Steelworkers and Teamsters
Local 104.
John L. Hollis, Esq. (Kool, Kool & Hollis), of Albuquerque,
New Mexico, for Charging Party Operating Engineers
Local 953.
Hector F. Arellano, Business Manager, of El Paso, Texas,
for Charging Party Electrical Workers Local 583.
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge. The
labor organizations named in the case caption1 (collectively,
the Unions) filed unfair labor practice charges with the Re-
gional Director for Region 28 at various times from July 25
through September 4, 1990, against certain operations of the
Phelps Dodge Corporation, the Respondent.2 On October 12,
1990, acting for the Board’s General Counsel, the Regional
Director issued separate but commonly focused complaints
against the Respondent’s two operations identified in the
case caption,3 and a further order consolidating these cases
for trial. The Respondent filed answers to the separate com-
plaints, admitting that the Board’s jurisdiction was properly
invoked, but denying all wrongdoing. I conducted the trial of
the cases in El Paso, Texas, on December 18 and 19, 1990,
where all parties appeared through attorneys or other rep-
resentatives.
In the complaints, the General Counsel commonly attacks
the Respondent’s admitted announcement and implementa-
tion in March–April 1990, of a quarterly ‘‘program’’ of ‘‘ap-
preciation payments, ‘‘ or bonuses, for its ‘‘union-free’’4 em-
ployees only. The complaints focus on the impact of this
program on certain union-represented employees who work
in established collective-bargaining units at the Respondent’s
Tyrone, New Mexico Mine and at its El Paso, Texas Rod
Mill. They aver that this program constituted a material
‘‘change’’ from a historical ‘‘practice’’ of including those
Tyrone and El Paso unit employees in previous bonus pay-
ments of like kind, more specifically, that,
From . . . October 3, 1985 to . . . August 11, 1989,
the Respondent maintained a practice of granting peri-
odic bonus payments equally to employees in the [Ty-
rone and El Paso bargaining units] and to those em-
ployees who were [also] employed at [Tyrone and El
Paso] who were unrepresented . . . by any . . . labor
organization.
Consistent with the complaints, the General Counsel con-
tends that when the Respondent excluded the Tyrone and El
Paso bargaining unit employees from payments made to their
‘‘union-free’’ coworkers under the new program, (a) it dis-
criminated based on their union-represented status against the
former groups, and thereby violated Section 8(a)(3), and,
independently, Section 8(a)(1) of the Act; and (b) it commit-
ted a unilateral, midcontract, change in established apprecia-
tion payment practices affecting employees in the Tyrone
and El Paso bargaining units, and thereby violated Section
8(a)(5) and Section 8(d).
In its answers, the Respondent denied key factual allega-
tions and all conclusionary allegations of wrongdoing. Sig-
nificantly absent from its answers, however, are any affirma-
tive defenses. Nevertheless, in its arguments on brief, the Re-
spondent takes the following positions of fact and law.
Concerning the 8(a)(3) and (1) counts, the Respondent de-
nies that its planning or execution of the 1990 program was
influenced by any union-hostile considerations, or that its ac-
tions had any inherent tendency to interfere with employee
rights under the Act. The Respondent claims instead that it
was acting for purely ‘‘business’’ reasons—merely exercising
an employer’s right under the Act to devise and implement
compensation programs on a unilateral basis which are lim-
ited exclusively to those of its employees who have no union
to bargain for them.
As to the 8(a)(5) counts, the Respondent denies that it fol-
lowed any such past ‘‘practices’’ respecting appreciation
payments in the 1985–1989 period as are commonly alleged
in the complaints. Relatedly, it denies that it ever owed a
duty to bargain with any of the Unions concerning any of
the appreciation payments which it admittedly did make to
union-represented employees in the 1985–1989 period. The
Respondent now urges that those 1985–1989 payments were
‘‘discretionary gifts,’’ and that, unlike the payments made
under the 1990 program for ‘‘union-free’’ employees, the
1985–1989 payments were not paid as part of any ‘‘com-
pensation program,’’ and, therefore, that each successive
‘‘gift’’ never became a mandatory subject for bargaining
with the Unions.5 Moreover, the Respondent denies that its
987PHELPS DODGE MINING CO.
to appreciation payments made to employees in the El Paso Rod
Mill bargaining unit, and claims further that all the Unions independ-
ently ‘‘waived’’ any rights to bargain with the Respondent about in-
cluding the employees they represented in the appreciation payments
made under the new program by failing to make any demand to bar-
gain after they became aware of the new program.
6 Respondent’s Br. at 19, 34 (my emphasis); see also (id. at 34)
the topic caption, which virtually repeats this phrase yet a third time,
with the only difference being that the word, ‘‘totally’’ is used in
place of ‘‘wholly.’’
7 All parties submitted briefs except Electrical Workers Local 583.
8 The exception concerns a testimonial conflict between the Steel-
workers’ International representative, Robert Guadiana, and the Re-
spondent’s negotiator, Jack Ladd, concerning an alleged ‘‘informal’’
meeting between the two in early 1987. For reasons I discuss below,
I will not find it necessary to resolve this conflict.
9 In its public and internal communications, the Respondent has
historically used the expression ‘‘day’s-pay’’ employees, to refer to
all the ‘‘hourly’’ workers within its copper operations, union-rep-
resented or not.
10 I thus note at the outset that the complaints are literally accurate
insofar as they commonly allege that in the 1985–1989 period, ‘‘the
Respondent maintained a practice of granting periodic bonus pay-
ments equally to employees in the [Tyrone and El Paso bargaining
units] and to those employees who were [also] employed at [Tyrone
and El Paso] who were unrepresented . . . by any . . . labor organi-
zation.’’
11 There is no dispute that this usage conspicuously emerged in
corporate writings in March 1990, chiefly in announcement materials
concerning the new quarterly appreciation payment program ad-
dressed to local ‘‘Union Free’’ employees and to their managers and
supervisors. I relate further details in sec. VI.
12 See G.C. Exh. 6, one of many internal memoranda about the
program transmitted on or about March 23, 1990, by the Respond-
Continued
1990 program may be understood as involving a ‘‘change’’
from any previous ‘‘practice’’; instead, the Respondent in-
sists repeatedly that ‘‘The Formal [1990] Program is wholly
unrelated to the prior [1985–1989] payments.’’6
I have studied the whole record, and all arguments and au-
thorities advanced by the parties in their posttrial briefs.7 I
have considered the demeanor of the witnesses as they testi-
fied, and have made assessments of the probabilities in the
light of the undisputed surrounding circumstances. Based on
all that, and more particularly on the following findings and
reasoning, I will conclude that the Respondent committed
violations substantially as alleged in the complaints.
Findings and Conclusions
The litigation of these cases has yielded a rather large res-
ervoir of stipulated facts and undisputed testimonial and doc-
umentary evidence from which all parties now draw to nour-
ish their respective legal arguments. With one exception, the
parties do not disagree about the historical facts;8 rather, they
disagree about which are worth mentioning or about how to
characterize or interpret them. In these findings I shall at-
tempt to integrate most of the facts cited by one party or an-
other to support one position or another. In the process, I
will make some preliminary observations relevant to my con-
cluding analyses.
I. CENTRAL FACTS IN SUMMARY
Starting in October 1985, and at calculatedly irregular in-
tervals after that, through August 1989, the Respondent gave
a total of eight ‘‘appreciation’’ payments to its ‘‘day’s-pay’’
(hourly paid) employees working at copper mining or proc-
essing facilities managed by its mining company subsidiary.9
One of these was a special payment to employees at a single
operation, the El Paso Refinery; the remaining seven pay-
ments were made to employees at most or all the various
mining company operations. These were linked to the current
overall profitability of the Respondent, in an industry where
fluctuations in the market price of copper, or ‘‘COMEX
price,’’ will often make the difference between profit and
loss. Of these seven payments, five were made to day’s-pay
employees at all facilities, on a companywide basis; indeed,
all of the four payments made after December 1987 were
companywide in scope. The PACT union-represented day’s-
pay employees at the Respondent’s Tyrone (New Mexico)
Mine were included in all seven multifacility payments; the
Electrical Workers-represented employees in the El Paso
(Texas) Rod Mill bargaining unit were included in six of
those seven payments.
Union representation or lack of representation had nothing
to do with eligibility to receive any of these appreciation
payments. In the minority of payments which were less than
companywide in scope, the limitations were ‘‘locational’’ in
nature; that is, if you were a day’s-pay employee at an in-
cluded location, you would receive the payment, without re-
gard to your ‘‘union’’ status, and vice-versa. Put another
way, union-represented employees always received these
payments to the same extent and according to the same for-
mula that the unrepresented day’s-pay employees at the same
location received them.10
In June 1989, an executive committee headed by the Re-
spondent’s president and chief operating executive, Leonard
Judd, had deliberated over the amount and reach of what
would prove to be the Company’s eighth and last apprecia-
tion payment made on a ‘‘union-blind’’ basis (the August
1989 payment, distributed companywide). In this context, the
committee had considered for the first time the possibility of
excluding the roughly 450 employees in the PACT union
bargaining unit at the Tyrone Mine from the planned pay-
ment. The Respondent’s director of employee relations, Ste-
phen Marcus, had suggested in this regard that,
we could take the position that we will only provide
that compensation required by the [PACT Union] con-
tract and not provide an appreciation payment.
Rejecting this idea, the executives instead had adopted the al-
ternative view proposed by Marcus—that there would be,
little to gain from the anger that would be generated by
not including Tyrone employees in the appreciation
payment.
In March-April 1990, however, the Respondent unilaterally
announced and implemented a 6-month retroactive apprecia-
tion payment only to those of its employees who were, in
the Respondent’s recently favored usage, ‘‘union free.’’11
The Respondent did this as part of a formal ‘‘supplemental
compensation’’ program, designed exclusively for such un-
represented workers. The Respondent called this the ‘‘Phelps
Dodge Mining Company Union Free Day’s-Pay Quarterly
Appreciation Payment Program.’’12
988 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ent’s chief employee relations official, Marcus, to the managers at
the affected operations.
13 I observe at the outset that in this letter the Respondent’s presi-
dent plainly portrayed the new program as having been rooted in the
1985–1989 history of previous payments. Indeed, in the quoted pas-
sages the new program was depicted as being not merely themati-
cally and substantively ‘‘related’’ to the 1985–1989 history of pay-
ments, but as being an improvement upon that ‘‘proud’’ tradition of
payments which, however ‘‘welcomed’’ by the employees, were ad-
mittedly difficult for employees to ‘‘predict.’’ And this is only one
of many examples of admissions made by the Respondent’s top offi-
cials which make it ludicrous for the Respondent now to claim (as
it does, repeatedly) that the 1990 program was ‘‘wholly [or ‘totally’]
unrelated’’ to the 1985–1989 history of appreciation payments.
14 In November 1990, the Respondent gave a bonus to the Elec-
trical Workers-represented El Paso Rod Mill employees, as well as
to the unrepresented day’s-pay employees at that mill, but to no em-
ployees at any other mining company operations. This payment was
made by the Respondent assertedly for a variety of unique reasons
relating to local accomplishments (‘‘highest quality product in the
Plant’s history . . . production records have been broken . . . your
safety record is the best it’s ever been’’). In addition, the Respondent
invoked the fact that the current ‘‘price of copper’’ was ‘‘unexpect-
edly high.’’ Therefore, this payment did not represent in any sense
a ‘‘counterpart’’ for any of the payments being, given under the
quarterly program to the ‘‘union-free’’ employees on a companywide
basis. Moreover, I note that this bonus was not paid at the same time
payments were being made to ‘‘union-free’’ workers under the new
program. Indeed, the timing of this unilateral payment by the Re-
spondent—roughly a month after the complaints had been issued
against the Respondent’s exclusion of the union-represented employ-
ees at El Paso and Tyrone from payments made under the new pro-
gram—invites the suspicion that the payment was inspired by a wish
to repair or enhance the Respondent’s legal position in these pro-
ceedings. For all these reasons, that postcomplaint payment does not
weigh significantly in my ultimate judgment about the motives of
the Respondent in devising and implementing the new program, or
about other questions bearing on the legality of these actions by the
Respondent.
15 Since 1985, the mining company has operated at least six such
facilities at four separate locations. After January 1987, the totals be-
came, respectively, eight, and five, for it was then that the Respond-
ent acquired a mine and a smelter at Hurley, New Mexico, known
collectively as the ‘‘Chino’’ operations.
16 From January 1988 until May 1989, he had held the position
of executive vice president; from 1985 until January 1988 he had
been senior vice president.
17 In the most recent labor agreement, the Respondent recognized
the Electrical Workers as the bargaining representative for a unit of
‘‘all hourly-rated production and maintenance employees’’ at the El
Paso Rod Mill. The parties stipulated that the rod mill also employs
When Company President Judd announced the 1990 quar-
terly payment program in a letter to ‘‘All Union[-]Free Em-
ployees,’’ he referred to the earlier 1985–1989 history of ap-
preciation payments, saying, among other things,
Phelps Dodge is proud of the fact that we were the
first company in the copper industry to provide our em-
ployees with appreciation payments. These payments
have allowed us to share our good fortune during peri-
ods of high copper prices, while maintaining our com-
petitiveness during periods of low copper prices. Since
our first appreciation payment in 1985, the average em-
ployee has received over $6,000 in payments.
All employees have welcomed the past appreciation
payments, although there has been a concern that these
payments have been difficult to predict.
To address this issue, I am pleased to advise you that
Phelps Dodge will be implementing a program of Quar-
terly Appreciation Payments linked to the COMEX
price of copper.13
This new program definitionally and in practice excluded
the union-represented Tyrone and El Paso day’s-pay workers.
From the point in April when the new program was imple-
mented to the point when this litigation concluded some 8
months later, the Respondent had made a total of three quar-
terly payments to ‘‘union-free’’ day’s-pay workers at the Ty-
rone Mine and the El Paso Rod Mill and, as well, to unrepre-
sented employees at all other mining company facilities.
Union-represented employees at Tyrone and El Paso received
no such payments nor counterpart payments at any time dur-
ing this same period.14
II. COMPANY OPERATIONS; KEY PERSONALITIES
The Respondent Phelps Dodge Corporation, headquartered
in Phoenix, Arizona, employs nearly 10,000 persons world-
wide. Our focus is on the Respondent’s role as a major cop-
per mining and processing company, which, through a first-
level subsidiary corporation called ‘‘Phelps Dodge Mining
Company,’’ currently owns and operates a total of eight fa-
cilities—mines, smelters, refineries, mills, or other processing
plants—at five distinct locations in the United States. All but
one of these (the Norwich, Connecticut Rod Mill) are located
in the southwest.15 At each of these operations the Respond-
ent employs hourly paid (‘‘day’s-pay’’) employees in pro-
duction and maintenance or other blue-collar job classifica-
tions. As detailed below, employees at some of these oper-
ations are represented by unions, while at other facilities em-
ployees working in substantially similar job classification are
unrepresented.
Leonard R. Judd is the Respondent’s president and chief
operating executive, positions he has held since May 1989,
following his service in a series of other top executive jobs
with the parent corporation over the previous 4 years.16 He
authorized and directed all the appreciation payments to min-
ing company day’s-pay employees made in the 1985–1989
period, and was responsible, as well, for authorizing and
shaping the 1990 union-free quarterly appreciation payment
program.
Stuart L. Marcus is the Respondent’s director of employee
relations, a position he assumed after joining the corporation
in July 1988. In that capacity, he was responsible for assist-
ing Judd in planning for all appreciation payments made
after July 1988, and for implementing them. Subject to
Judd’s direction, supervision, and final approval, Marcus and
his staff also did the relevant research and prepared the
workups, option papers, and local publicity and information
kits associated with the Respondent’s planning for and an-
nouncing of the 1990 union-free program.
III. UNION-REPRESENTED AND ‘‘UNION-FREE’’
EMPLOYEE GROUP
The Respondent has historically recognized and entered
into labor agreements with the Electrical Workers as the col-
lective-bargaining representative of nearly all its hourly pro-
duction and maintenance employees at its El Paso (Texas)
Rod Mill.17 At its Tyrone (New Mexico) Mine, at all times
989PHELPS DODGE MINING CO.
‘‘days-pay’’ workers outside that unit, namely ‘‘security officers’’
and a ‘‘custodian.’’
18 Marcus estimated that in July 1989 there were roughly 450
day’s-pay employees in the PACT bargaining unit, plus another
roughly 50 day’s-pay employees at Tyrone working in nonunit posi-
tions. (The parties stipulated that these nonunit classifications at Ty-
rone were: ‘‘electrician, carpenter, testmen and watchmen.’’)
19 This is so even though the parties stipulated that when the Re-
spondent bought the mine and smelter at Hurley, New Mexico,
known as the ‘‘Chino’’ operations in January 1987, it recognized the
incumbent Unions at those facilities and adopted the current labor
agreements in effect there. The parties’ stipulation does not further
identify the incumbent unions in the Chino operations, nor does the
record otherwise significantly clarify the labor relations picture at
those operations. The complaints do not allege that employees’ rights
in the Chino unit(s) were in any way implicated by the Respondent’s
actions, nor does the General Counsel otherwise make such a claim.
I therefore give no further consideration to such questions.
20 That Local was decertified in January 1985, at the end of a 2-
year strike. See Phelps Dodge Refining Corp., 299 NLRB 1111
(1990).
21 Marcus testified that at Morenci, as at the El Paso refinery, the
Steelworkers had been decertified after a 2-year strike.
22 In the early days, these were also called ‘‘bonuses’’ by some
company officials, even though Marcus testified that this latter usage
was officially disfavored within the corporation, and the Respond-
ent’s attorneys have strictly avoided the term. However, Judd him-
self—no stranger to official corporate usage—spontaneously used the
term ‘‘bonus’’ in his testimony to characterize the payments made
in the 1985–1989 period. Without finding that it explains the efforts
on the part of Marcus and the Respondent’s counsel to avoid using
the term ‘‘bonus’’ to describe payments made in the 1985–1989 pe-
riod, I note that in his June 29, 1989 memorandum to Judd, et al.,
quoted infra, Marcus used the term ‘‘bonus’’ only to characterize the
payment that might be made to ‘‘salaried employees’’ at the time
an ‘‘appreciation payment’’ was being conferred on the ‘‘day’s-pay’’
employees.
23 In Judd’s testimony at Tr. 300, he explains that the El Paso re-
finery-only payment was unique among the 1985–1989 payments not
only in that it went to employees at a single operation, but also be-
cause, unlike other payments made in the 1985–1989 period, it in-
volved a two-tier payment formula, whereby a bigger percentage was
given to employees in the ‘‘tank house,’’ whom Judd credited for
certain production innovations, and a littler percentage to the rest of
the refinery employees. Judd admitted, incidentally, that the latter
employees were included ‘‘so we wouldn’t be in a situation where
we made . . . 200 people [in the tank house] happy and 300 people
[elsewhere in the refinery] mad. That was the motivation.’’
In any case, as my findings below reveal, this refinery-only pay-
ment did not appear in Marcus’ own ‘‘outline’’ of the Respondent’s
‘‘prior appreciation payments’’ when a new (companywide) payment
was under consideration in June 1989.
since their joint certification by the Board in 1968, the Re-
spondent has recognized and contracted with the Steel-
workers, the Operating Engineers, and the Teamsters—acting
jointly as the PACT Union—as the representative of a nearly
all-inclusive unit of production and maintenance employees,
drivers, and equipment operators.18 It is only the unit em-
ployees and Unions at those El Paso and Tyrone operations
whose rights under the Act are called into question in these
proceedings.19
When these cases were submitted, employees in the El
Paso Electrical Workers’ unit were covered by a labor agree-
ment for the period May 30, 1988, through May 29, 1991,
and the PACT union-represented employees at Tyrone were
covered by a contract for the period April 3, 1987, through
June 30, 1991. Those labor agreements, like their prede-
cessors, were silent on the subject of appreciation payments,
or on the subject of ‘‘bonuses,’’ generally.
Since 1985, four of the Respondent’s facilities have been
entirely nonunion: A refinery at El Paso, Texas, where, until
1985, the roughly 300 production and maintenance workers
had been represented by a Steelworkers Local;20 a mine at
Morenci, Arizona, where the Steelworkers had likewise rep-
resented production and maintenance classifications until ap-
proximately 1985;21 a smelter at Hidalgo, New Mexico, and
a rod mill in Norwich, Connecticut. All day’s-pay employees
at these facilities, together with all day’s-pay employees at
the Tyrone Mine and the El Paso Rod Mill who are excluded
from the established PACT Union and Electrical Workers
bargaining units, now comprise the class of employees
which, since March 1990, the Respondent has come to call
in various writings its ‘‘Union[-]Free’’ employees.
IV. 1985–1989 APPRECIATION PAYMENTS
A. In Overview
From October 1985 to late August 1989, the Respondent
gave a total of eight self-styled ‘‘appreciation payments’’22
to day’s-pay employees working for the mining company.
Seven of the eight payments were given to day’s-pay em-
ployees at most or all operations. In the exceptional case,
Judd authorized a payment in February 1987 to employees
at the (nonunion) El Paso refinery only, which, as he ex-
plained, was conferred in appreciation for the innovations
and contributions to reduced local production costs made by
the refinery’s ‘‘tank house’’ employees. Because, as Judd ad-
mitted, this refinery-only payment was based on a ‘‘unique
event,’’ it has little pertinence to the more general question
of ‘‘practice’’ associated with payments based on ‘‘profit.’’23
Therefore, my findings and analyses hereafter will focus on
the history of the seven multifacility payments made in the
1985–1989 period.
Many details concerning this history are disclosed in an
‘‘outline’’ of ‘‘prior appreciation payments’’ prepared by
Marcus in a June 29, 1989 memorandum to Judd and his ex-
ecutive committee, at the time this group was considering the
scope and amount of the appreciation payment that would
eventually be made to employees on a companywide basis
on August 11, 1989. In the chart below, I have incorporated
Marcus’ ‘‘outline’’ in its entirety, but I have added to it (all
text within brackets) to incorporate the August 1989 pay-
ment, and to provide a more comprehensive depiction of the
formula used and the locational reach of all multifacility pay-
ments made in the 1985–1989 period:
Date Payment Formula
10/3/85 20 hrs. at employee’s straight
time rate of pay. [Paid at all
‘‘Western Operations’’
facilities; excluded only
Norwich, Connecticut rod
mill.]
7/23/86 20 hrs. at employee’s straight
time rate of pay [Paid Mining
Company-wide]
990 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
24 Judd stated—and everyone appears to agree—that the United
States copper industry generally suffered a serious depression in the
early 1980s, due in large part to plummeting copper prices, and that
the Respondent’s ability to survive was at one point in doubt.
8/3/87 20 hrs. at employee’s straight
time rate of pay [Paid at all
mines and smelters—total of 4
locations—excluded El Paso
Refinery and El Paso and
Norwich rod mills]
12/15/87 $1/hr. for hrs. worked and
vacation hrs. during prior 26-
wk. period. [Paid Mining
Company-wide]
5/88 80 hrs. at employee’s straight-
time rate of pay [Paid Mining
Company-wide]
11/18/88 $2/hr. for hrs. worked and
vacation hrs. during prior 26-
wk. period. [Paid Mining
Company-wide]
[August 1989] [$1 for hrs. worked and
vacation hrs. during prior 26-
wk. period. Paid Mining
Company-wide.]
Judd testified that he was inspired to confer the first of
these payments by a wish to share with the employees the
profits the Company had finally realized after years of post-
ing consecutive quarterly losses, totaling $450 million from
1981 through 1984.24 Thus it was that on October 3, 1985,
a check and a cover letter was transmitted over Judd’s signa-
ture to ‘‘Each Day’s-Pay Employee of Phelps Dodge’s West-
ern Operations.’’ Materially, Judd stated in that letter:
As you probably know, Phelps Dodge reported a
profit in each of the first two quarters of 1985, the first
time we have had back-to-back profitable quarters since
1981. Much of the credit for that remarkable perform-
ance belongs to you and the other members of the
Western Operations team, whose effectiveness in con-
taining costs and improving productivity enabled the
Company to show a profit during a period when copper
prices in real terms hovered near their lowest levels in
more than 50 years.
. . . .
I am pleased to enclose the Company’s check, made
out to you, in an amount equal to 20 hours of pay at
your regular straight-time rate less any deductions re-
quired by law. This check, like similar ones being sent
today to all other day’s-pay employees in Western Op-
erations, is the Company’s way of recognizing and
thanking you for your efforts in the periods just com-
pleted. Whether additional such payments can be made
in the future, and whether and when wage rates can be
increased, will depend upon economic developments in
the copper industry and upon the Company’s financial
condition and performance. How well the Company
does depends primarily upon the copper price and upon
our production costs; since we cannot influence the
copper price, let’s redouble our effort to keep effi-
ciencies high and costs low.
Like the first one, each of the successive multifacility ap-
preciation payments made through August 1989 was made
by check, with appropriate withholdings for state and Federal
taxes. In each case also, the checks were accompanied by let-
ters from Judd which contained echoes of the themes re-
vealed in the October 1985 letter just quoted (in substance,
that appreciation payments depended on the Respondent’s
‘‘profitability’’ or ‘‘financial condition,’’ and that ‘‘copper
price’’ was an important factor affecting this condition, but
that it was in helping to maintain ‘‘low production costs’’
that employees might help keep the Company profitable even
when the copper market was not cooperating). This thematic
continuity is largely evident simply by comparing the text of
Judd’s October 1985 letter, above, enclosed with the first
payment, to the text of his August 11, 1989 letter, enclosed
with the last of the payments made before the introduction
of the 1990 program for the ‘‘union-free’’ employees:
[August 11, 1989]
TO EACH DAY’S-PAY EMPLOYEE:
It is my pleasure to advise you that you will recieve
a special payment . . . equal to $1.00 multiplied by
your work and vacation hours (including overtime) in
the 26-week period beginning January 1, 1989. Al-
though the amounts will be based on each employee’s
actual hours, each of those employees who worked con-
sistently throughout this period will receive a pretax
payment of approximately $1,000.
Whether additional payments will be made in the fu-
ture depends upon developments in the very competi-
tive copper industry which include:
The fluctuating COMEX spot price of copper
which dropped from a high of $1.63 on December 8,
1988 to a recent low of $0.99 on July 6, 1989.
Phelps Dodge wages being among the highest in-
dustry even after the results of bargaining at [rival cop-
per companies] Magma and Asarco.
Our capital improvement program which provides
for improved efficiencies, lower production costs, and
thereby greater job security.
How well the Company does depends primarily upon
our production rate, our production costs, and the price
of copper. Your continued efforts to achieve greater
production and lower costs in a safe manner is deeply
appreciated.
B. The ‘‘Program’’ Underlying the Calculatedly Erratic
1985–1989 Payments
The Respondent admittedly went out of its way to make
these payments at irregular intervals and according to vary-
ing payment formulas. Judd testified (emphasis added):
[W]e were very careful not to pattern it . . .[.] We
didn’t want to set a pattern. We didn’t want to set ex-
pectations and for some reason not be able to meet
them. We wanted full discretion in doing that program.
I find it revealing in this passage, and not just ironic, that
Judd would concede that the 1985–1989 history of payments
had a ‘‘program[atic]’’ quality. And Marcus, too, spontane-
991PHELPS DODGE MINING CO.
25 Judd and Marcus generally acknowledge in their testimony what
the record shows overall—that the seven outlined multifacility pay-
ments were linked in public announcements and in actual fact to the
Respondent’s current state of ‘‘profitability.’’ Marcus states, how-
ever, that in his own review on this subject, he found that the 1985–
1989 payment dates did not correlate with corporate profit peaks.
This is not surprising, however, when one recalls that the Respond-
ent intentionally tried to impose a quality of ‘‘randomness’’ on the
timing of each payment. In addition, as I have just noted, Judd ad-
mitted that the precise timing of payments in the 1985–1989 period
often had less to do with the Respondent’s current level of profit-
ability than it did with a wish to indirectly convey a more subtle
‘‘message,’’ for example,
[to] (a) allay those [‘‘giveback’’] fears and (b) reinforce that we
felt that they were working for . . . the best copper company
in the world, so that while other competitors were taking money
back we were continuing to give these appreciation bonuses.
26 The record otherwise reinforces this inference. Thus, in his June
29, 1989 memo to Judd et al. (quoted more fully, infra), Marcus cau-
tioned against excluding the (union-represented) Chino operations
from the next payment because this might cause the Chino union(s),
in ‘‘potential early negotiations’’ for a new labor agreement, to de-
mand that appreciation payments ‘‘become part of a negotiated
agreement.’’ And Marcus elsewhere revealed a hypersensitivity to
the collective-bargaining implications under the Act of an employ-
er’s establishing of a ‘‘practice’’ affecting the wages or other forms
of compensation of union-represented groups of employees, admit-
tedly based on his belief that ‘‘practice in a union-represented bar-
gaining unit . . . may become part of a legal obligation.’’ (Tr.
172:18–173:4; 197:1–198:18.)
27 Electrical Workers Agent Sachse also testified in a somewhat
confusing way about references to ‘‘bonuses’’ made during negotia-
Continued
ously used that term to describe the payments made in that
period; thus, he said (emphasis added),
We were aware of complaints to the earlier program
and, when we decided to come up with the compensa-
tion for our unrepresented employees [the 1990 Union-
Free Program], we thought it best to come up with it
in a predictable fashion because of those complaints.
I am struck, as well, by the appearance from Judd’s admis-
sions elsewhere that an underlying feature of the 1985–1989
‘‘program’’ was a corporate wish to use these payments to
communicate a variety of special ‘‘messages’’ to the em-
ployee-beneficiaries. Judd not only acknowledged this a gen-
eral proposition, in reply to examination by union counsel,
but he spontaneously gave examples of cases where pay-
ments were used to convey a more subtle ‘‘message’’ than
the explicit one announced in association with such pay-
ments. Thus, Judd suggested that the timing of some pay-
ments had been influenced by a separate corporate decision
to pay a dividend to shareholders, or to raise executive pay
levels, thereby spurring a decision to make an appreciation
payment to the day’s-pay employees, so as not to embitter
the latter group. Another example of this was the July 1986
payment, made on a companywide basis. There, Judd ex-
plained, his decision to make that payment at that time was
closely related to two recent circumstances: First, in 1986,
many of the Respondent’s competitors (many of which had
bargaining relationships with the Steelworkers and other
unions) had extracted significant wage cuts or ‘‘givebacks’’
as part of new contract settlements. Second, in the aftermath
of this, Judd had conducted informal ‘‘tailgate’’ meetings at
various copper operations with union-represented and non-
union employees alike, and had heard them express concerns
that the Respondent, too, might wish to cut wages. Judd ad-
mittedly found in these circumstances a particularly good
reason to choose in July 1986 to confer another bonus. He
explained,
[B]y ’86 we’d had four or five, looking at six, profit-
able quarters [since the last payment in October
1985]. . . . We thought it would be very appropriate
that we could give a bonus [sic] at that time and (a)
allay those fears and (b) reinforce that we felt that they
were working for . . . the best copper company in the
world, so that while other competitors were taking
money back we were continuing to give these apprecia-
tion bonuses [sic]. . . . I must say, we were also moti-
vated by the uncertainty that they’d expressed.
I infer from all of this that the Respondent had decided
early on as a matter of policy that the Respondent would pe-
riodically share profits with its employees,25 but, for its own
reasons, had decided to disguise the ‘‘programatic’’ quality
of this policy so as to retain maximum flexibility or ‘‘discre-
tion’’ in applying it. And Judd’s testimony also makes it
clear that one reason the Respondent wished to enjoy such
discretion was to allow it to time each particular payment for
its maximum ‘‘message’’ impact. In addition, because retain-
ing ‘‘full discretion’’ was admittedly so important to the Re-
spondent in implementing this ‘‘program,’’ and because it is
not obvious how the Respondent’s discretion might be lim-
ited in such matters except by its statutory collective-bargain-
ing obligations to the Unions, I infer that the Respondent’s
concerns about retaining ‘‘full discretion’’ in pursuing the
1985–1989 ‘‘program’’ included, perhaps even focused on, a
wish to avoid any claim in the union-represented units that
such payments were mandatory bargaining subjects.26
C. Union-Employer Communications About
Appreciation Payments
1. The 1988 El Paso Rod Mill contract talks
Most of the facts relating to pertinent communications be-
tween the Respondent and the Unions are not disputed. The
Respondent had always resisted as a matter of policy any
limits on its ‘‘full discretion’’ in making appreciation pay-
ments in the 1985–1989 period. As I have previously noted,
this policy was admittedly informed, at least in part, by a
corporate wish not to invite unions to try to make such mat-
ters subjects for collective bargaining. But in at least three
documented cases—October 1985, July 1986, and November
1988—the Respondent nevertheless notified the Electrical
Workers in writing that such a ‘‘bonus’’ payment would be
or was being made to employees in the El Paso Rod Mill
bargaining unit. The Unions admittedly never objected to the
payments made to employees in the units represented by
them during this period.
The subject of these payments came up once in the context
of bargaining in 1988 for a new labor agreement for employ-
ees at the El Paso Rod Mill. For findings about those 1988
bargaining exchanges, I rely on the uncontradicted testimony
of Electrical Workers Agent Norman Sachse,27 materially
992 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tions in 1985, some 6 months before the first ‘‘appreciation pay-
ment’’ was made, in October 1985. I do not rely on this testimony.
28 Where neither demeanor nor probabilities favored either side, it
certainly did not aid the prosecution that Guadiana himself vouched
for Judd’s reputation for scrupulous veracity in labor relations deal-
ings.
29 Marcus was referring to the following recent history at Tyrone:
In February 1989, the Respondent and the PACT Union had met
briefly on a ‘‘voluntary’’ basis to discuss ‘‘reopening’’ the 1987–
1991 contract. The Respondent was then interested primarily in sup-
planting the current contract with a new 4-year agreement, one
which would help keep its labor costs predictable through a point
in 1995. In exchange, the Respondent offered the PACT Union im-
mediate wage increases of 4 to 4-1/2 percent, depending on unit job
classification. The parties reached tentative agreement at the table on
this offer and the package was submitted for ratification by the com-
bined PACT membership, which voted it down. (As Marcus under-
stood it, the failure to get ratification was traceable to the opposition
of Steelworkers International Representative Guadiana, who, as
Marcus believed, had vowed to oppose ratification by Steelworkers
members, who were apparently the largest member bloc within the
PACT-represented classifications.) In any case, the outcome was that
the original 1987–1991 labor agreement at Tyrone was undisturbed,
and continued to govern thereafter.
supported by Sachse’s union colleague, Carlos Esparza. As
Sachse’s account shows, the Electrical Workers had sought
an increase in the unit employees’ ‘‘base rates.’’ The Rod
Mill’s plant manager, Robert Pierce, flatly ruled that out,
using words to the effect:
You’re out of your damn minds. There is not going to
be any increase to the base rates. We have been provid-
ing bonuses over . . . the past 20 years. Apparently
those bonuses have no meaning to your members what-
soever.
One of the union agents asked at some point whether the
Company ‘‘would be willing to include something in the
agreement’’ relating to these ‘‘periodic bonuses.’’ To this,
Pierce replied, as Sachse recounted it,
[T]he company could not be sure that they were going
to be profitable, when those profits would occur, and
therefore they could not know in any way what
amounts would be paid; and to include that in the
agreement would be too difficult and that the [union]
committee and the employees would have to trust the
company in that matter because they had paid them in
the past.
2. Disputed 1987 Guadiana-Ladd meeting
There is controversy in the record about only one alleged
historical event; it contains two distinctly disputed elements:
(a) Did a certain ‘‘informal’’ meeting take place in early
1987 between the Steelworkers’ International representative,
Robert Guadiana, and the Respondent’s chief labor relations
spokesman and negotiator at the time, John (Jack) Ladd?
And, (b) if so, what, if anything, did Ladd say on the subject
of future appreciation payments or bonuses? In Guadiana’s
version—entirely disputed by Ladd, who denies any recollec-
tion of any meeting with Guadiana at all—Ladd sought out
Guadiana for ‘‘informal’’ prediscussions in anticipation of
the expiration of the current PACT union contract at Tyrone,
but before the start of formal contract talks with the PACT
Union as a joint body, which were due to begin later that
year. In the course of these discussions, says Guadiana, Ladd
gave a sidebar assurance that the Tyrone operation would
participate in future appreciation bonuses, but refused to put
this in writing. Guadiana says he acquiesced in this ‘‘infor-
mal’’ assurance because Ladd had a ‘‘reputation’’ in union
circles as someone whose word ‘‘can be taken to the bank.’’
I was struck by nothing in the testimonial performance or
demeanor of either Guadiana or Ladd which would warrant
my crediting one over the other. I have closely considered
the parties’ arguments and counterarguments about the inher-
ent probabilities or likelihoods in the light of the surrounding
circumstances. I think these arguments commonly tend to
peter out into speculation. It was the prosecution’s burden to
establish by a preponderance of the credible evidence that
Guadiana’s claims were more believable than Ladd’s denials.
I can find neither in demeanor nor probabilities that this bur-
den was met.28 In any case, I will not be required to rely
on Guadiana’s version to support my ultimate findings.
D. June–August 1989; the Respondent Considers the
Amount and Reach of What Will be its Final ‘‘Union-
Blind’’ Payment
In June 1989, top executives of the Respondent consid-
ered—admittedly for the first time—the possibility of exclud-
ing from the next appreciation payment the roughly 450 em-
ployees in the PACT union bargaining unit at the Tyrone
mine. Marcus had suggested arguments for and against such
an exclusion in a June 29 memorandum to Judd and other
members of an executive committee (i.e., the same memoran-
dum containing his ‘‘outline’’ of ‘‘prior appreciation pay-
ments’’ quoted earlier). He had also raised a similarly union-
conscious question with respect to the ‘‘Chino’’ mine and
smelter operations. Thus:
DATE: June 29, 1989
FROM: S. L. Marcus
TO: L. R. Judd [et al.]
SUBJECT: APPRECIATION PAYMENTS
With our prior decision to consider another apprecia-
tion payment in July, I submit the following for your
review:
I. Day’s-Pay Employees
1. Should Tyrone employees receive an appreciation
payment?
Since the employees rejected our proposed wage in-
crease in February,29 we could take the position that we
will only provide that compensation required by the
contract and not provide an appreciation payment. Al-
ternatively, there is little to gain from the anger that
would be generated by not including Tyrone employees
in the appreciation payment.
2. Should Chino employees receive an appreciation
payment?
993PHELPS DODGE MINING CO.
30 Marcus admitted that his references to ‘‘Tyrone employees’’ in
his memorandum were intended to apply specifically to the ‘‘unit’’
employees at Tyrone, and that no consideration was ever given by
him or other company executives to excluding the non-‘‘unit’’ day’s-
pay employees at Tyrone from this payment.
31 In this regard, both Marcus and Judd admit that they were well
aware that ‘‘concerns’’ about the ‘‘predict[ability]’’ of the ‘‘past ap-
preciation payments’’ had been voiced commonly by union-rep-
resented employees and by their unrepresented counterparts alike
over the years. And I note here, as found above, that the Respondent
had not been so solicitous of these ‘‘concerns’’ when, in 1988, the
Electrical Workers had sought, during bargaining with the Respond-
ent for a new contract at the El Paso Rod Mill, to provide in the
contract for appreciation payments or bonuses to be paid according
to a predictable and objective scheme.
With the potential of entering into early negotiations
at Chino, we may wish to postpone making another ap-
preciation payment. However, since we do not wish
such payments to become part of a negotiated agree-
ment, we may want to make such payment at the same
time we do at other locations.
3. What should the amount of the appreciation payment
be?
[Outline of ‘‘prior appreciation payments’’ and re-
mainder of memorandum omitted].
Concerning the question of a payment to unit employees
at Tyrone,30 Marcus testified that it was his ‘‘alternative’’
point (‘‘little to gain from the anger that would be gen-
erated’’) which prevailed, and became the rationale adopted
by the executive committee in deciding to make the payment
(made in fact on August 11, 1989) to all day’s-pay employ-
ees, companywide.
V. THE 1990 PROGRAM FOR ‘‘UNION-FREE’’ EMPLOYEES
A. In General
It was against all the foregoing background that, on March
26, 1990, the Respondent unilaterally announced the ‘‘Phelps
Dodge Mining Company Union Free Day’s-Pay Quarterly
Appreciation Payment Program.’’ The new program was ap-
proved by Judd in its final form in an executive meeting on
March 12, 1990. According to Marcus, the new program was
really the outgrowth of a process of reviewing the ‘‘com-
pensation’’ paid to its ‘‘union-free’’ workers which Marcus
had begun as early as November 1989. As Marcus admitted,
however, the matter of a ‘‘supplemental compensation’’ (i.e.,
‘‘bonus’’) program for these workers was not recommended
by Marcus nor otherwise discussed in executive circles until
February 1990. Accordingly, it appears that the program was
the product of relatively brief executive attention before Judd
gave it the final go ahead on March 12.
As I discuss in my concluding analyses, exactly how,
when and why a decision to embark on such a program was
arrived at are questions which neither Judd nor Marcus ever
clearly answered. And, to some extent, those witnesses have
contradicted themselves and one another in accounting for
the origins of the new program. That aside, no one disputes
that, after March 12, it fell to Marcus to prepare all associ-
ated paperwork and publicity and information kits. Most of
these were delivered to local managers in a March 23 pack-
age which included a covering memorandum from Marcus
summarizing the program and directing how and when the
various announcement materials were to be distributed. In
that memorandum, Marcus wrote, inter alia,
After carefully studying our prior appreciation pay-
ments, the Company has decided to implement a pro-
gram of quarterly appreciation payments linked to the
COMEX price of copper. This Program applies to
union free day’s-pay Mining Company employees. . . .
The program is retroactive to October 1, 1989.
Attached are letters and documents to be used in an-
nouncing the program:
(1) On Monday, March 26, 1990, Mr. Judd’s letter
should be sent to the homes of all eligible union free
day’s-pay employees.
(2) On Tuesday, March 27, . . . meetings should be
held with local supervision to explain the details.
(3) By April 15, . . . the Appreciation Payment
check should be mailed to each employee with the en-
closed Manager’s letter and a copy of the Quarterly Ap-
preciation Payment Plan Program Table.
(4) Meetings should be scheduled with all day’s-pay
employees to explain this new program.
‘‘Mr. Judd’s letter,’’ referred to in Marcus’ instructions, con-
tains much information relevant to the new program and is
otherwise relevant to a variety of ultimate questions. I repeat
it in full here, minus only letterhead boilerplate:
March 26, 1990
TO: All Union Free Day’s-Pay Employees
Phelps Dodge Mining Company
SUBJECT: Appreciation Payments
Phelps Dodge is proud of the fact that we were the
first company in the copper industry to provide our em-
ployees with appreciation payments. These payments
have allowed us to share our good fortune during peri-
ods of high copper prices, while maintainlng our com-
petitiveness during periods of low copper prices. Since
our first appreciation payment in 1985, the average em-
ployee has received over $6,000 in payments.
We continue to believe it is important that Phelps
Dodge provide you with a competitive wage and bene-
fit package, but it is even more important that we strive
to maintain our ability to operate and provide continued
employment when copper prices again decline. All em-
ployees have welcomed the past appreciation payments,
although there has been a concern that these payments
have been difficult to predict.31
To address this issue, I am pleased to advise you that
Phelps Dodge will be implementing a program of Quar-
terly Appreciation Payments linked to the COMEX
price of copper. The first payment will cover not only
this year’s first quarter, but also the last quarter of
1989. Based upon our estimate of the copper price for
these two quarters your appreciation payment, to be
mailed by April 15, 1990, will be 5.5% of your covered
earnings, less applicable taxes.
994 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
32 One condition was that payments would be made only if the
COMEX price reached or exceeded ‘‘predetermined levels’’; the
other was implicit in the final sentence of Marcus’ March 23 list of
program ‘‘Components’’:
This program . . . may be suspended or modified from time to
time.
33 Thus, acting in response to a subpoena, Marcus and his em-
ployee relations staff conducted a diligent search of company
records; they could find only one case—a single document associ-
ated with a single, local operation—where ‘‘union-free’’ had ever
before appeared in any writing generated at any level of the Re-
spondent’s operations. This exceptional writing is a reference in a
1985-published employee handbook for Morenci Mine employees,
where, as previously noted, the Steelworkers had only recently been
decertified. In that handbook the Morenci operation had been de-
scribed as a ‘‘union-free environment.’’
34 E.g., G.C. Exh. 9 (Marcus 2/27/90 Memorandum to Judd and
other members of executive committee, written slightly less than 1
month before ‘‘union free’’ became the corporate expression of
choice):
As requested, I have evaluated alternative methods for providing
our non-union day’s-pay employees with wage adjustments con-
tingent on the price of copper.
35 E.g., Union Exh. 1 (Judd letter to (nonunion) Hidalgo (New
Mexico) smelter employees, 12/19/88):
I am happy to advise you that the Company is implementing a
wage rate increase for day’s-pay employees not covered by a
collective bargaining agreement.
36 E.g., G.C. Exhs. 6, 10, 11, 12, and 13.
37 As found earlier, the PACT union-represented employees at Ty-
rone were covered by a 4-year labor agreement which ran, by its
terms, from April 3, 1987, through June 30, 1991. Under established
contract-bar principles, the Respondent’s 1987–1991 agreement with
the PACT Union could not operate as a bar to an election petition
beyond its first 3 years. And this meant, in practical effect, that any-
one seeking to decertify or replace the PACT Union could lawfully
file a petition for an election at Tyrone at any point after April 3,
1990.
Your local management will be explaining the details
of the new Quarterly Appreciation Payment Program to
you. I know you will find this to be another benefit of
working for the world’s best and safest mining com-
pany.
Sincerely,
/s/ L. R. Judd
As described in a separate explanatory memorandum from
Marcus’ office, the ‘‘Program’’ consisted of several ‘‘Com-
ponents.’’ For our purposes it suffices to find that, subject
to two overarching conditions,32 the Respondent promised,
through the program, to give each ‘‘union-free’’ employee in
the mining company’s operations a bonus check every 3
months, based on an ‘‘objective’’ and ‘‘predictable’’ for-
mula—in which a COMEX price-linked ‘‘percentage’’ would
be multiplied by the employee’s previous ‘‘covered quarterly
earnings’’ to yield a gross payment amount, from which ap-
propriate taxes would then be withheld.
On April 15, the Respondent made its first payment under
this program, mailing a check (with a Marcus-drafted ‘‘man-
ager’s letter’’ enclosed) to each ‘‘union-free’’ employee, in
an amount equal to 5.5 percent of that employee’s earnings
since October 1, 1989, minus normal tax deductions. In July
1990, when the next quarterly payment was made, the
COMEX price of copper had risen enough to allow a bigger
check for each unrepresented employee, this time amounting
to 5.75 percent of his or her earnings in the previous quarter.
In October 1990, the bonus percentage multiplier became
6.25 percent.
B. Other Circumstances Bearing on the Timing of and
Motives Surrounding the Introduction of the
New Program
1. Appearance of the ‘‘Union-Free’’ usage
‘‘Union[-]Free’’ became official usage in the Respondent’s
corporate writings for the first time in and after March 1990,
almost exclusively as part of the publicity surrounding the in-
troduction of the quarterly appreciation payment program.
Marcus admits that, with a single exception, the expression
‘‘union-free’’ as a description of employees who were not
represented by a union had never appeared in any corporate
writings until March 1990.33 Instead, until that point, the Re-
spondent had used terms such as ‘‘non-union,’’34 or ‘‘not
covered by a collective bargaining agreement’’35 whenever
the Respondent found it necessary to distinguish among
day’s-pay employees based on their ‘‘union’’ status.
Judd was responsible for this changeover in official usage;
he admittedly directed Marcus at some point after Marcus
issued his February 27, 1990 memorandum (which had used
the expression ‘‘non-union’’ to describe the recipients of the
payments under the new quarterly program) to start using
‘‘union[-]free’’ from now on. And, consistent with Judd’s
admitted historical practice of using appreciation payments to
convey ‘‘messages’’ other than one of mere ‘‘appreciation’’
for employees’ efforts, Judd explained that it was important
to him that the new program be portrayed to employees in
the ‘‘right’’ light. And Judd admittedly saw ‘‘union-free’’ as
a more ‘‘positive’’ way of describing the ‘‘unrepresented’’ or
‘‘non-represented’’ status of the employees who would be
the beneficiaries of the Respondent’s ‘‘gener[osity]’’ under
the new program.
As a consequence, the expression began to appear in vir-
tually every communication concerning the program sent
from Marcus’ office to local managers or intended for dis-
tribution to employees at the ‘‘union-free’’ operations, in-
cluding in charts and tables given to ‘‘union-free’’ employ-
ees so that they could compute for themselves how much to
expect from their next quarterly bonus.36
2. The PACT union decertification ‘‘Opportunity’’
at Tyrone
The Respondent’s announcement of the union free quar-
terly appreciation payment program was made a scant week
before the date when it would become legally possible for
employees to petition the Board to hold an election among
the 450 Tyrone unit employees to decide whether or not the
PACT Union would continue to represent them.37 This prac-
tical legal reality was admittedly recognized and understood
by Marcus at the time his staff was working up the new pro-
gram. In fact, employees at Tyrone did file a decertification
election petition with the Regional Director in August 1990,
but the Regional Director provisionally dismissed that peti-
tion as having been tainted by the Respondent’s announce-
995PHELPS DODGE MINING CO.
38 There is no evidence that the Respondent engaged in any unlaw-
ful acts to promote decertification of the PACT Union other than by
announcing and implementing the union-free program.
39 The complaints do not allege in haec verba that the announce-
ment and implementation of the new program had an ‘‘inherently’’
coercive impact on employees’ Sec. 7 rights, but they do allege that,
on ‘‘March 26, 1990,’’ the Respondent ‘‘informed its employees that
it was implementing a Quarterly Appreciation Bonus Plan for ‘union
free’ employees . . .[,]’’ and that, by so ‘‘inform[ing]’’ employees,
among other actions, the Respondent committed independent viola-
tions of Sec. 8(a)(1).
40 Id. at 595 (emphasis added). And see cases discussed and distin-
guished at fn. 5.
41 300 NLRB 595 at fn. 5 (emphasis added).
42 In my 8(a)(3) analysis below, I will discuss the necessary rhe-
torical implications of the expression ‘‘union-free’’ more fully, and
will find in these implications even clearer evidence of specific in-
tent on the Respondent’s part to exhort employees to get rid of
unions if they were already ‘‘bound’’ to them and to keep them out
if they were already ‘‘free’’ from them.
43 77 NLRB at 1310 (emphasis in original text).
44 195 NLRB at 915 (emphasis added; in-text fn. omitted).
ment and implementation in March–April of the new pro-
gram.38
VI. ANALYSIS, SUPPLEMENTAL FINDINGS, AND
CONCLUSIONS OF LAW
Although many facts have overlapping relevance to all the
issues, the 8(a)(3) and (5) questions will to some extent re-
quire a focus on different bodies of facts. Thus, as the cases
discussed below make clear, we should be more concerned
with the question of the Respondent’s 1990 motives in ana-
lyzing the 8(a)(3) counts, and we should be more concerned
with the Respondent’s 1985–1989 practices respecting appre-
ciation payments in analyzing the 8(a)(5) claims that the
1990 program constituted an unlawful unilateral ‘‘change’’ in
established ‘‘wages’’ or other forms of ‘‘compensation’’ en-
joyed by El Paso and Tyrone unit employees.
But this case also calls into question whether the Respond-
ent’s ‘‘Program’’ itself had an inherently unlawful tendency
under Section 8(a)(1) of the Act to ‘‘interfere with, restrain,
or coerce employees in the exercise of’’ Section 7 rights,
specifically the right to be represented by a union.39 And, as
I discuss next, that question depends little for its resolution
on the Respondent’s motives, or its past practices, but de-
pends largely on the particular ‘‘language’’ used by the Re-
spondent to define those who would be included or excluded
from the program’s reach.
A. The 1990 Program as an ‘‘Inherent’’ Violation of
Section 8(a)(1)
In Lynn-Edwards Corp., 290 NLRB 202, 204 (1988), the
Board stated (emphasis added):
It is well settled that an employer violates Section
8(a)(1) through a provision in, or a statement about, a
plan that suggests that coverage of employees will auto-
matically be withdrawn as soon as they become rep-
resented by a union or that continued coverage under
the plan will not be subject to bargaining. See, e.g., Ni-
agara Wires, 240 NLRB 1326 (1979).
In its recent holding and discussion of authorities in KEZI,
Inc., 300 NLRB 594 (1990), the Board has reaffirmed, on the
other hand, that it has
not hesitated to find eligibility language lawful when
. . . it indicates that . . . benefits for unionized em-
ployees are subject to negotiation but does not suggest
that employees are automatically and irrevocably fore-
closed from inclusion in a particular plan simply be-
cause they have a union bargaining on their behalf.40
The Board found that the ‘‘eligibility language’’ in KEZI’s
401(k) plan passed legal muster, but it ‘‘distinguish[ed]’’ that
case from others, such as Niagara Wires, supra, ‘‘in which
the exclusionary language did not expressly contemplate
good faith bargaining over . . . benefits.’’41
In this case, the ‘‘eligibility [or ‘exclusionary’] language’’
analog is the Respondent’s expression ‘‘union-free’’ in the
Respondent’s own title for the program, as well as its repeti-
tion of that expression in its various announcements and de-
scriptions of the program, or of payments made under it. The
Respondent has nowhere ‘‘indicated’’—neither ‘‘expressly,’’
nor otherwise—that it ‘‘contemplated good faith bargaining’’
with the Unions over the inclusion of union-represented em-
ployees under the quarterly program. To the contrary, by
using the inherently sweeping expression, ‘‘union-free,’’ the
Respondent necessarily invited quite the opposite inference—
that nothing short of full ‘‘freedom’’ from all ‘‘union’’ en-
tanglements would suffice to make one eligible for ‘‘cov-
erage’’ under the program.42 Seen this way, the program
‘‘suggest[s] that employees are automatically and irrevocably
foreclosed from inclusion in a particular plan simply because
they have a union bargaining on their behalf.’’ KEZI, Inc.,
supra.
Based on those considerations alone, I find that the Re-
spondent independently violated Section 8(a)(1) by the fact
that it defined and described the 1990 program as being for
‘‘union-free’’ employees only.
B. The 8(a)(3) Discrimination
The Respondent defends against the 8(a)(3) count by in-
voking Shell Oil Co., 77 NLRB 1306 (1948), and B. F.
Goodrich Co., 195 NLRB 914 (1972). In Shell, the Board
declared these general propositions:
Absent an unlawful motive, an employer is privileged to
give wage increases to his unorganized employees at a
time when his other employees are seeking to bargain
collectively through a statutory representative. Like-
wise, an employer is under no obligation, under the
Act, to make such wage increases applicable to union
members, in the face of collective bargaining negotia-
tions on their behalf involving much higher stakes.43
In B. F. Goodrich, reaffirming Shell in this respect, the
Board said,
The granting of new profit-sharing benefits to unor-
ganized employees, but not to represented employees is
not, standing alone, prohibited discrimination.44
But in the footnote appended to the underscored text, the
Goodrich Board cited an example of circumstances where an
‘‘unlawful motive’’ would be found; thus:
996 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
45 Id. at fn. 4 (emphasis added).
46 See also Radio Officers v. NLRB, 347 U.S. 17 (1954); Melville
Confections, Inc., 142 NLRB 1334, 1337–1338 (1963).
47 NLRB v. Great Dane Trailers, supra, 388 U.S. at 32 (emphasis
added):
The act of paying . . . benefits to one group of employees while
announcing the extinction of the same benefits to another group
of employees who are distinguishable only by their participation
in protected concerted activity surely may have a discouraging
effect on either present or future concerted activity.
Had the grant been accompanied by statements en-
couraging the employees to abandon collective rep-
resentation in order to secure the benefit, for example,
we would have clear evidence of unlawful 8(a)(3) moti-
vation.45
I will judge ultimately that the Respondent’s motives in
devising and implementing the new program for only its
‘‘union-free’’ employees was to make union membership or
representation by unions appear to the Respondent’s employ-
ees to be financially disadvantageous; put another way, I will
conclude that the Respondent planned and carried out the
new program to provide a financial inducement to employees
to become ‘‘union-free’’ if they were not already so, and to
stay ‘‘union-free’’ if they already were. In the absence of
any coherent or persuasive counterexplanation, I will pre-
sume that the specific timing of the planning and publicizing
of the new program was influenced principally by the Re-
spondent’s awareness that 450 of its currently union-rep-
resented employees at the Tyrone Mine would soon be in a
position to vote out the PACT Union, if that were their per-
suasion, or if they could be so persuaded.
In reaching these conclusions, I might rest simply on the
legal fact that the Respondent’s own descriptions of the pro-
gram as being for ‘‘union-free’’ employees carried an inher-
ently union-discouraging message, and, this being a foresee-
able result of the use of such language, that the Respondent,
in fact, intended such a result. NLRB v. Great Dane Trailers,
388 U.S. 26, 33 (1967).46 But in judging that the Respond-
ent’s implementation of the program violated Section 8(a)(3),
I have also considered the additional prima facie indicators
of unlawful motivation listed next, with particular emphasis
on the last one, the ‘‘statements’’ by the Respondent which
in my view amount alone to ‘‘clear evidence of unlawful
motivation,’’ as envisioned by the Goodrich Board.
1. ‘‘Practice’’ as it illuminates ‘‘motive’’
Although centrally relevant for 8(a)(5) purposes, an em-
ployer’s historical ‘‘practices’’ are surely relevant also to an
understanding of its motives in a given instance of behavior.
Thus, a departure from an established practice of including
represented employees in appreciation payments (which, as I
shall find, is what happened here) will itself raise an infer-
ence of discriminatory intent.47 Although I will elaborate on
other aspects of ‘‘practice’’ in my discussion of the 8(a)(5)
issues, I will recapitulate here those features of the 1985–
1989 practice which I deem most revealing in assessing the
Respondent’s motives for devising and implementing the
1990 program.
All eight payments made in the 1985–1989 period were
‘‘union-blind’’; that is, in no case did the Respondent link
eligibility for an appreciation payment to an employee’s
union-represented or unrepresented status. Union-represented
employees at Tyrone and El Paso always received a payment
to the same extent that the unrepresented day’s-pay employ-
ees at the same locations were included, and always accord-
ing to the same formula. Indeed, historically, it made no dif-
ference to the Respondent that recipients might be covered
by a current collective-bargaining agreement, for the Tyrone
and El Paso unit employees, who shared in a substantial ma-
jority of these payments (all seven in the case of Tyrone; six
of seven in the case of El Paso), were covered at all material
times by labor agreements which guaranteed certain wages
and benefits, but which were entirely silent on the subject of
such appreciation payments or bonuses. Accordingly, against
this tradition, one reasonably looks to the Respondent for
some clear, ‘‘union-neutral’’ explanation for its 1990 deci-
sion to exclude union-represented employees from the new
program. But, as I discuss elsewhere below, the Respondent
has seemingly tried harder to obscure that such an expla-
nation is needed than it has tried to furnish a coherent expla-
nation.
Another feature of the 1985–1989 ‘‘practice’’ deserves re-
calling here: Although company profitability was associated
with each payment, and ‘‘copper price’’ was admitted by
Judd to be the determinative profit factor in the final five bo-
nuses, the timing of each payment of 10 was chosen by Judd
to achieve maximum impact in conveying a more specific or
subtle ‘‘message’’ to employees. In the light of this admitted
‘‘practice, ‘‘ therefore, we should pay close attention to the
timing of the development and announcement of the union-
free program to understand what ‘‘message’’ Judd may really
have intended to convey to employees. And, so far as this
record shows, the only opportunity for a ‘‘message’’ prevail-
ing at the time of the program’s planning and inauguration
was the soon-to-arrive window period for an election petition
at Tyrone.
2. Improbability or inadequacy of explanations
Both Judd and Marcus, but especially Marcus, appeared to
be at their least comfortable and most hypertechnical in
parrying questions aimed at allowing them an opportunity to
explain the circumstances surrounding the Respondent’s deci-
sion to limit the 1990 program to ‘‘Union-Free’’ employees
only. Their discomfort only became heightened when they
were regularly reminded that, in late June 1989, they had re-
jected a suggestion to exclude union-represented employees
from an intended payment because there would be ‘‘little to
gain from the anger that would be generated’’ by excluding
them. Precisely what happened some 7 months later to cause
the Respondent now to decide, apparently, that there was
something to be gained ‘‘from the anger that would be gen-
erated’’ by excluding union-represented employees from an
appreciation payment program is something which I believe
the Respondent’s witnesses have repeatedly sought to ob-
scure. The same is true concerning their handling of ques-
tions concerning their reasons for announcing the new pro-
gram when they did, and in the style or manner they did.
The Respondent’s overall credibility is further undermined
by the strained attempts of its key actors—particularly
Marcus—to create an impression consistent with the Re-
spondent’s current claim in litigation—that the 1990 program
was ‘‘wholly [or ‘totally’] unrelated’’ to the 1985–1989 pay-
ment history. Thus, Marcus was moved to insist at one point
997PHELPS DODGE MINING CO.
48 I have already noted that the timing of the new program’s emer-
gence coordinates closely with the timing of the ‘‘window-period’’
during which the PACT Union would be vulnerable to being decerti-
fied or displaced at Tyrone if sufficient employee interest could be
generated to support a decertification or rival election petition to the
Board. Here I note another circumstance which points in the same
direction: The abortive ‘‘reopener’’ bargaining history between the
Respondent and the PACT Union earlier in 1989 appears to have
been a source of particular irritation to the Respondent. That history
was invoked by Marcus in his memo to Judd and other executives
on June 29, 1989, as a factor arguably warranting excluding the Ty-
rone unit employees from the general ‘‘appreciation payment’’ even-
tually given in August 1989 to all employees, including at Tyrone.
And it is not hard to detect an element of spite in the way Marcus
chose in his June 29, 1989 memo to (mis)characterize this rather
complex ‘‘reopener’’ history as a ‘‘reject[ion]’’ by the Tyrone unit
‘‘employees’’ of ‘‘our proposed wage increase.’’ (It was also, quite
obviously, a ‘‘rejection’’ by those employees of the Respondent’s
wish to lock in labor rates at Tyrone for an additional 4 years.) It
thus appears that the Tyrone unit employees’ exercise of their right
not to accept the proposed extension and modification of their cur-
rent agreement was an abiding source of the Respondent’s corporate
disappointment and displeasure. And, having been thwarted in
achieving long-term labor rate certainty through the collective-bar-
gaining process, it would not be unthinkable that the Respondent
would see the PACT Union as an obstacle to that goal, and would
see in the PACT Union’s decertification a different means of achiev-
ing long-term unilateral control of those costs.
that, in working up the 1990 program, he ‘‘was not con-
cerned with the 1985 through 1989 payments.’’ But, as we
have seen in a variety of documents announcing the 1990
program which were signed by Marcus or drafted for Judd’s
signature by Marcus, the 1990 program was depicted (by
Marcus himself) as the product of ‘‘carefully studying our
prior appreciation payments.’’ And, in announcements to
‘‘union-free’’ employees drafted by Marcus for Judd’s signa-
ture, the Respondent had ‘‘proud[ly]’’ invoked the 1985–
1989 history and had otherwise unmistakably portrayed the
new program as being quite closely related in purpose and
theme to the 1985–1989 payments. Indeed, in the aggregate,
the message in the first three paragraphs of Judd’s March 26
letter was that the 1990 program was developed by the Re-
spondent as an improved version of a preexisting (1985–
1989) payment ‘‘program,’’ one specifically tailored to re-
spond to previous employee ‘‘concerns’’ about the lack of
‘‘predictablity’’ in the 1985–1989 ‘‘program.’’
In the circumstances, for the Respondent now to insist that
the two programs are ‘‘wholly unrelated’’ smacks of histori-
cal revisionism, and of a certain desperateness. As I further
discuss in section C, the facial resemblances between the two
programs are unmistakable; the paternity is certain; the
1985–1989 ‘‘program’’ was father to the 1990 program . But
what striking here are the Respondent’s attempts to disavow
any kinship at all between the two programs. This only in-
vites the suspicion that the Respondent was trying to conceal
a darker underlying motive for embarking on the 1990 pro-
gram. Shattuck Denn Mining Co. v. NLRB, 362 F.2d 466,
470 (9th Cir. 1966).
I will not attempt to retrace every twist and turn in their
explanations, but Judd and Marcus eventually stated in com-
mon that the decision to exclude (and necessarily to
‘‘anger’’) employees in the Tyrone and El Paso units had
something to do with the fact that those employees had al-
ready negotiated for their wage and benefit packages and
would not be in a position to seek anything more or different
until their current labor agreements were to expire. But ex-
actly what Judd and Marcus intended by retreating to this
common explanatory ground is not evident to me. One impli-
cation, clearly, is that the Respondent was not prepared to
extend the quarterly payments to union-represented employ-
ees while their current labor agreements were still in effect.
But such considerations had never prevented the Respondent
in the past from conferring such payments on union-rep-
resented employees. Thus, this explanation has a certain non
sequitur quality, and it hardly allays the suspicion that the
new program was inspired by more immediate and contem-
porary union-hostile considerations.48
Another possible implication in this testimony might be
that the Respondent at least would be receptive to bargaining
over such inclusion once the Tyrone and El Paso contracts
were open for renewal. But it undermines this supposition
that the Respondent never overtly declared such a receptive-
ness to bargaining with the Unions over extending the quar-
terly program to employees in the units they represented.
Moreover, to have done so would have represented a sub-
stantial reversal from the Respondent’s historical resistance
to allowing appreciation payments to become the stuff of col-
lective bargaining; for, in the only credited instance of record
when a union tried to negotiate some ‘‘predictability’’ about
appreciation payments into a new labor agreement (Electrical
Workers in 1988 El Paso Rod Mill contract talks), the Re-
spondent even in that context refused to talk about any such
thing, claiming that,
the company could not be sure that they were going
to be profitable, when those profits would occur, and
therefore they could not know in any way what
amounts would be paid; and to include that in the
agreement would be too difficult and that the [union]
committee and the employees would have to trust the
company in that matter because they had paid them in
the past.
This same history indeed raises another question never an-
swered by Judd or Marcus; namely: What was it that had
changed since the 1988 Rod Mill contract talks to convince
the Respondent that it would not be so ‘‘difficult,’’ after all,
to develop a program of ‘‘predictable’’ appreciation pay-
ments? The only obvious explanatory circumstance of record
is that in 1988, when the Respondent was insisting that
‘‘profits’’ were too hard to ‘‘predict,’’ and that the Respond-
ent ‘‘could not know in any way what amounts would be
paid,’’ the party requesting such ‘‘predictability’’ was a
union, whereas in 1990, the putative beneficiary class would
be ‘‘union-free’’ workers. And where such unrepresented
workers’ interests were at stake, apparently, the Respondent
was delighted largely to surrender its ‘‘discretion’’ and to
commit itself to a program which was touted by the Re-
spondent itself as a material improvement over the ‘‘old’’
payment program precisely because of its ‘‘predictable’’ na-
ture.
Thus, elements of the Respondent’s explanations sound
hollow or improvised, and clash with one another in terms
of their defensive value to the Respondent. In summary, it
seems, that in 1985–1989, when the payment ‘‘program’’
998 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
49 Webster’s New World Dictionary of the American Language,
College Edition, provides the following principal definition of ‘‘rhet-
oric’’ (emphasis added):
1. The art or science of using words effectively in speaking
or writing, so as to influence or persuade . . . .
50 I do not suggest that an employer violates the law simply by
using the expression ‘‘union-free’’ in a context (such as during a
preelection campaign) where the employer is free to propagandize,
or ‘‘exhort’’ or ‘‘influence’’ employees by speech alone to become
or remain unrepresented by a union. But where, as here, ‘‘union-
free’’ was introduced as the eligibility- and exclusion-defining cri-
terion for an employee’s receipt of a ‘‘benefit,’’ it must necessarily
be seen as a ‘‘statement[ ] encouraging the employees to abandon
collective representation in order to secure the benefit,’’ providing
‘‘clear evidence of unlawful 8(a)(3) motivation,’’ within the meaning
of B. F. Goodrich, supra.
51 Certainly, if an employer were to announce a ‘‘quarterly pro-
gram’’ of ‘‘accident-free appreciation payments,’’ employees ex-
posed to that announcement could be forgiven if they were to draw
the conclusions (a) that the employer wished to eliminate accidents
from the workplace, and (b) that there was money in it for them if
they could maintain or achieve ‘‘accident-free’’ status.
52 It is not easy to make an 8(a)(3) violation of this type amenable
to a Wright Line analysis (251 NLRB 1083 (1980), enfd. 662 F.2d
899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982)). It would be
definitionally absurd in the circumstances for the Respondent to
carry its Wright Line burden of ‘‘demonstrating’’ that it would have
was union-blind, it was critically important to the Respond-
ent, as Judd admits, that the payments be ‘‘irregular,’’ and
‘‘unpredictable’’; but in 1990, when eligibility was restricted
to ‘‘union-free’’ workers, the Respondent found it not at all
difficult to come up in about a month with a highly regular,
objective, and predictable version (‘‘improvement,’’ really, as
I have already noted) of the ‘‘program’’ which had evolved
in the 1985–1989 period. One can find harmony in all the
Respondent’s varying positions and explanations only if one
posits first a nakedly union-discriminatory underlying motive
for the difference in the Respondent’s willingness to provide
a predictable program of bonuses for its ‘‘union-free’’ work-
ers but not for its union-represented ones.
3. ‘‘Statements encouraging the employees to abandon
collective representation’’
In B. F. Goodrich, supra, the Board envisioned that
‘‘statements encouraging the employees to abandon collec-
tive representation in order to secure the benefit,’’ would
present ‘‘clear evidence of unlawful 8(a)(3) motivation.’’ Ob-
viously, such smoking gun statements are not the only basis
upon which the Board will infer an unlawfully discriminatory
motive in the granting of ‘‘benefits’’ only to unrepresented
employees. But, where such statements may be found, the
8(a)(3) analysis need not be attenuated, for such statements
are ‘‘clear evidence’’ of discrimination. For reasons elabo-
rated next, I judge that such a ‘‘statement’’ is implicit in the
Respondent’s conscious choice to introduce the new pro-
gram—and the expression ‘‘union-free’’ into its publicizing
of the new program—on the eve of the decertification win-
dow period at the Tyrone Mine.
I have previously found that Judd admittedly found it im-
portant to portray the 1990 program in the ‘‘right light,’’ and
admittedly saw ‘‘union-free’’ as a more ‘‘positive’’ way of
describing the ‘‘unrepresented’’ or ‘‘non-represented’’ status
of the employees who would be the beneficiaries of the Re-
spondent’s ‘‘gener[osity]’’ under the new program. I deem it
especially significant to my 8(a)(3) conclusions that, in an-
nouncing the new program, Judd admittedly once again
wished to convey a ‘‘message’’ beyond the mere announce-
ment of the program itself, and that it was with the desire
in mind to convey a more ‘‘positive’’ message that he in-
structed Marcus to refer to ‘‘unrepresented’’ or ‘‘nonunion’’
workers instead as ‘‘union-free’’ workers. It is therefore clear
enough that the introduction of the expression ‘‘union-free’’
was a rhetorical choice on Judd’s part.
‘‘Rhetorical’’ statements are, by definition, intended to in-
fluence the thoughts and actions of the rhetorical audience,49
not merely to ‘‘inform’’ that audience of the existence of
something. In this regard I observe that, as a matter of rhe-
torical technique, ‘‘free’’ is invariably used by a speaker or
writer to create ‘‘positive’’ associations in the minds of a
rhetorical audience, just as his or her use of ‘‘enslaved’’
would convey precisely the opposite rhetorical message.
But a mere generalized wish to make a blandly ‘‘positive’’
statement does not adequately explain Judd’s rhetorical
choice to introduce ‘‘union-free’’ into the publicity materials
surrounding the new program. This is because, when a
speaker or writer appends the word ‘‘free’’ to a noun in the
way the Respondent has done with ‘‘union-free,’’ he or she
invariably intends to convey a far more specific rhetorical
‘‘statement’’: Central to the speaker’s or writer’s intention in
such formulations is to make a decidedly negative statement
about the word preceding ‘‘free.’’ (E.g., ‘‘accident-free,’’
‘‘drug-free,’’ ‘‘cancer-free,’’ ‘‘nuclear-free.’’) And one
‘‘message’’ inevitably conveyed by such ‘‘[X]-free’’ formu-
lations is that to be ‘‘[X]-free’’ is to be ‘‘liberated’’ or ‘‘pro-
tected’’ from or ‘‘cured’’ of whatever ‘‘X’’ may happen to
be. But these ‘‘messages’’ take on an even more exhorta-
tive—as distinguished from merely ‘‘informational’’—char-
acter where the exercise of will, or ‘‘choice,’’ can be brought
to bear to achieve a state of ‘‘freedom’’ from whatever ‘‘X’’
may happen to be. In such cases, the rhetorical message is
that ‘‘X’’ is a status one should rid oneself of, or abandon
or avoid, and that ‘‘[X]-free’’ is a status one should strive
for, or seek to maintain.
Precisely because of the unique and distinct rhetorical
‘‘messages’’ inevitably conveyed by such ‘‘[X]-free’’ formu-
lations, I can only conclude that, in adopting the expression
‘‘union-free,’’ the Respondent’s rhetorical intention was to
‘‘influence,’’ or ‘‘persuade,’’ or exhort employees to remain
‘‘union-free’’ if they were lucky enough to enjoy that status
presently, or to become ‘‘union-free,’’ if it were their current
misfortune to be ‘‘union-enslaved.’’50 Thus, the Respondent
clearly conveyed not merely a ‘‘union-neutral’’ ‘‘message,’’
but a decidedly ‘‘union-hostile’’ one, one which would inevi-
tably convey to represented and unrepresented employees
alike that becoming or remaining nonunion was what the Re-
spondent was encouraging them to achieve, and what it was
willing to pay bonuses for, under the new program.51
Considering all the foregoing, I conclude that the Re-
spondent acted from unlawfully discriminatory motives when
it devised and introduced the 1990 program, and, because of
that, its actions do not qualify for Shell Oil–B. F. Goodrich
insulation. Rather, it violated Section 8(a)(3) by unilaterally
and peremptorily excluding union-represented Tyrone and El
Paso workers from the reach of the new program.52
999PHELPS DODGE MINING CO.
excluded union-represented employees from coverage under the new
program even absent the fact that they were union-represented. In
any case, my findings above and below about the Respondent’s past
‘‘practice’’ of making union-blind appreciation payments make it
doubly difficult for the Respondent to contend that, even absent
union-hostile considerations, it would have excluded the union-rep-
resented employees from the new appreciation payment program.
53 NLRB v. Borg-Warner Corp., 356 U.S. 342 (1958).
54 NLRB v. Katz, 369 U.S. 736 (1961).
55 See generally Intersystems Design Corp., 278 NLRB 759
(1986), and cases cited.
56 284 NLRB at 55, 60.
57 284 NLRB at 54; emphasis added. There, the majority acknowl-
edged only two such exceptional situations in the precedents, (a) for
union-security and dues-checkoff arrangements after a contract’s ex-
piration, and (b) for postexpiration arbitration of grievances.
58 Daily News of Los Angeles, 304 NLRB 511 (1991) (emphasis
added), citing Oneita Knitting Mills, 205 NLRB 500 fn. 1 (1973). 59 Supra; emphasis added.
B. The 8(a)(5) Unilateral Change
1. Principles of general application
There is no disagreement about the basic principles: The
Act treats as ‘‘mandatory bargaining subjects’’ any aspect of
the employer-employee relationship which affects ‘‘wages,
hours of work, or other terms and conditions of employ-
ment.’’53 Second, as Katz54 teaches, an employer may not
change union-represented employees’ existing terms and con-
ditions of employment on a unilateral basis, but must ‘‘main-
tain the status quo’’ pending notification to, and, on request,
bargaining with, the union representative about any such pro-
posed changes; indeed the employer must refrain from imple-
menting any such changes until the union has either waived
the right to bargain or the employer and union have bar-
gained in good faith to agreement or impasse about such
changes.55
Katz principles continue to dominate this legal arena. In
Indiana & Michigan Electric Co., 284 NLRB 53 (1987), the
main issue revisited by the Board was whether, on expiration
of a labor agreement, an employer must continue arbitrating
postexpiration grievances not themselves construable as
‘‘arising under’’ the expired agreement.56 That question, of
course, is not the one we are presented with. But it is perti-
nent to this case that the Indiana & Michigan Electric major-
ity reaffirmed the sweeping reach of the Katz doctrine, most
notably, when it spoke of,
[t]he few exceptions to the general rule that an em-
ployer must bargain about changes in terms and condi-
tions of employment regardless of how those terms
came to be initially established.57
And the Board has said more recently, referring to situations
closer to the one presented here, that,
[T]he same [Katz] bargaining obligation applies wheth-
er the issue involved is the employer’s unilateral grant-
ing of merit increases or its unilateral discontinuance of
them.58
Finally, and even more directly apposite to our cir-
cumstances, the Board said in Central Maine Morning Senti-
nel, 295 NLRB 376 (1989) (emphasis added):
we note that while the amount of the general increase
is discretionary on the part of the Respondent, a subse-
quent decision to grant that year’s increase to some em-
ployees in the affected class and at the same time with-
hold it from others similarly situated is a clear depar-
ture from an established practice ‘‘to which the em-
ployer has already committed himself.’’ [Citing Katz,
369 U.S. at 746; footnote omitted.]59
Clearly, in the foregoing there is enough law to find a vio-
lation in the Respondent’s unilateral discontinuance of a
practice of including union-represented employees in appre-
ciation payments, provided only that the historical ‘‘pay-
ments’’ associated with that ‘‘practice’’ were, indeed, an es-
tablished emolument of the ‘‘wages’’ or other ‘‘terms and
conditions of employment’’ of employees in the union-rep-
resented units and were not mere ‘‘gifts,’’ about which there
is no duty to bargain. But whether these 1985–1989 pay-
ments were ‘‘wages,’’ rather than ‘‘gifts,’’ is the disputed
threshold question, to which I now turn.
2. Were the 1985–1989 appreciation payments part of
the established ‘‘wages,’’ or other ‘‘terms and
conditions’’ of employment in the bargaining units
represented by the Unions?
In addressing this question, I begin by noting again that
the Respondent admittedly went out of its way to impose a
quality of ‘‘irregularity’’ or ‘‘unpredictability’’ into its 1985–
1989 ‘‘program’’ of appreciation payments, all admittedly
designed to avoid creating ‘‘expectations’’ on the recipient
employees’ part, and, relatedly, to avoid any union claim that
the matter of appreciation payments was a bargainable sub-
ject, and thereby to retain ‘‘full discretion’’ in the imple-
menting of such a ‘‘program.’’ And, indeed, it is largely on
the basis of these calculated irregularities in the timing of
and computational formula used by the Respondent during
the 1985–1989 period that the Respondent now claims that
the 1985–1989 payments amounted to merely a series of dis-
cretionary ‘‘gifts,’’ not ‘‘wages.’’ In thus arguing, the Re-
spondent cites the Ninth Circuit’s summary of the law in this
area in Nello Pistoresi & Sons, Inc., 500 F.2d 399, 400
(1974) (emphasis added):
Bonuses such as the ones here at issue are considered
wages if they are of such a fixed nature and have been
paid over a sufficient length of time to have become a
reasonable expectation of the employees and, therefore,
part of their anticipated remuneration.
It was the ‘‘unpredictability’’ and the ‘‘discretionary’’
character of the payments made under the 1985–1989 ‘‘pro-
gram’’ which the Respondent now cites as the principle fac-
tor negating any supposition that the employees might have
‘‘expectations’’ that such payments would continue to be
made. But it must be noted that the existence of ‘‘discre-
tionary’’ elements in a bonus payment program will not
alone render a bonus payment a ‘‘gift.’’ Central Maine
Morning Sentinel, supra. See also Eastern Maine Medical
Center v. NLRB, 658 F.2d 1 (lst Cir. 1981):
1000 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
60 304 NLRB 511; emphasis added.
61 Pierce had told the Electrical Workers,
You’re out of your damn minds. There is not going to be any
increase to the base rates. We have been providing bonuses over
. . . the past years. Apparently those bonuses have no meaning
to your members whatsoever.
Indefiniteness as to amount [of a wage increase] and a
flavor of discretion do not under these circumstances
prevent the undertaking from becoming part of the con-
ditions of employment.
And see Central Maine Morning Sentinel, 295 NLRB 376
(1989), characterized by the Board in Daily News of Los An-
geles, supra, as holding that ‘‘the employer unlawfully
witheld [sic] a wage increase from unit employees where the
granting of the increase had become an established practice,
although the amount of the increase was discretionary.’’60
It is usually the case with corporate ‘‘programs,’’ even
those which seek to avoid in their implementation any at-
tributes of ‘‘regularity’’ or ‘‘predictability,’’ that certain
‘‘patterns’’ will tend to reveal themselves over time, and this
will inevitably raise ‘‘expectations’’ on the part of the em-
ployees who have seen these ‘‘patterns’’ emerge. Such pat-
terns are not difficult to discern in the 1985–1989 history. I
have already recorded the ones I found most relevant to the
8(a)(3) issues; I incorporate them again here by reference. In
addition, I think the following facts about appreciation pay-
ment ‘‘practices’’ point clearly away from the notion that the
1985–1989 payments were ‘‘gifts,’’ and strongly suggest in-
stead that they had become part of the established ‘‘wages’’
of the employees in the union-represented units.
(a) The multiplier used to determine each bonus payment
was derived from either the employee’s current pay rate
(three of the payments) or to the hours they had worked, in-
cluding vacation time, during a previous fixed period (the
other four payments). In short, the amount of the payments
which the Respondent would now characterize as ‘‘gifts’’
was a function either of the work they had recently per-
formed, or of the regular wages they were currently earning.
This augurs against a finding that these payments were
‘‘gifts.’’ See, e.g., NLRB v. Wonder State Mfg. Co., 344 F.2d
210, 213 (8th Cir. 1965):
but if the gifts or bonuses are so tied to the remunera-
tion which emloyees receive for their work that they
were, in fact part of it, they are in reality wages and
within the statute.
See also, e.g., Freedom WLNE-TV, 278 NLRB 1293, 1296–
1297 (1986), where the Board affirmed Judge Zankel, who
had found it important to the conclusion that certain cash
‘‘Christmas bonuses’’ were ‘‘wages,’’ not ‘‘gifts,’’ that,
The . . . bonus was made pursuant to a formula inex-
tricably tied to employees’ wages and seniority.
(b) Appropriate Federal and state tax amounts were de-
ducted from each of the payments. ‘‘Gifts’’ are not taxable
to the recipient; ‘‘wages’’ clearly are. The Respondent had
apparently decided for tax purposes, at least, that the 1985–
1989 payments were not ‘‘gifts.’’
(c) When it suited the Respondent’s purpose, the Respond-
ent had no difficulty in seeking to portray the 1985–1989
bonus payments as part of the overall ‘‘wage package’’ that
all day’s-pay employees worked under, including the union-
represented groups. Thus, in Judd’s March 26, 1990 letter,
supra, Judd unmistakably linked the 1985–1989 payments to
‘‘wages’’ when he said (emphasis added):
Phelps Dodge is proud of the fact that we were the first
company in the copper industry to provide our employ-
ees with appreciation payments. These payments have
allowed us to share our good fortune during periods of
high copper prices, while maintaining our competitive-
ness during periods of low copper prices. . . . We con-
tinue to believe it is important that Phelps Dodge pro-
vide you with a competitive wage and benefit pack-
age. . . . All employees have welcomed the past ap-
preciation payments, although there has been a concern
that these payments have been difficult to predict.
(d) Similarly, during 1988 contract bargaining between the
Respondent and the Electrical Workers for the El Paso Rod
Mill, it suited the Respondent’s purpose to portray the appre-
ciation payments as part of the ‘‘compensation’’ package that
the Rod Mill unit employees enjoyed. Thus, the Respond-
ent’s Pierce had raised these payments as a shield to deflect
union demands for an increase in the ‘‘base rates.’’61 Also,
Pierce had made what I can only view as an implied promise
to continue to confer such payments on employees in the El
Paso Rod Mill unit when he deflected a separate union re-
quest to incorporate a ‘‘profit’’-linked bonus program into
the new labor agreement with the peroration quoted earlier,
ending with the statements that ‘‘to include that in the agree-
ment would be too difficult and . . . the [union] committee
and the employees would have to trust the company . . . be-
cause they had paid them in the past.’’
(e) Union-represented employees at Tyrone and El Paso
always received a payment to the same extent that the unrep-
resented day’s-pay employees at the same locations were in-
cluded, and always according to the same formula. This 5-
year pattern would inevitably lead union-represented day’s-
pay employees to ‘‘expect’’ that, no matter how unpredict-
able might be the timing or precise formula used in making
the payment, they would at least share in any future payment
the Respondent might choose to confer to the same extent
their unrepresented day’s-pay coworkers at the same location
were to receive one.
(f) Indeed, the Respondent’s officials recognized that such
an ‘‘expectation’’ had long since been implanted in the
minds of union-represented workers when, in June 1989, it
opted in favor of including the Tyrone unit employees, rather
than reap the harvest of ‘‘anger’’ on their part that would
surely follow an unprecedented exclusion of them from such
payments. Given this recognition in 1989, the Respondent
cannot seriously maintain now that its 1985–1989 program
raised no ‘‘reasonable expectations’’ in the minds of rep-
resented employees that they would continue to share in
whatever appreciation payments the Respondent might make.
1001PHELPS DODGE MINING CO.
62 See generally Tr. 330–337.
63 Tr. 379:3–381:25.
64 Tr. 381:25–382:7.
65 So far as I can tell, the Respondent does not claim that any of
the Unions waived relevant bargaining rights concerning the Re-
spondent’s implementation of the 1990 program simply because they
had previously acquiesced in the Respondent’s 1985–1989 history of
unilaterally conferring appreciation payments. Such a claim would be
unavailing in the circumstances. See, e.g., Bath Iron Works Corp.,
302 NLRB 898 (1991), where the Board reaffirmed that,
The mere fact that a union has previously acquies[c]ed in an
employer’s unilateral implementation of plant rules does not,
however, mean that the employer is free thereafter to implement
different plant rules or significant and material changes in exist-
ing plant rules without giving the union notice and an oppor-
tunity to bargain. ‘‘A union’s acquiescence in previous unilateral
changes does not operate as a waiver of its right to bargain over
such changes for all time.’’ [Quoting Owens-Corning Fiberglas
Corp., 282 NLRB 609 (1987); other citations omitted.]
Continued
3. Did the 1990 program amount to a ‘‘change’’ in
historical appreciation payment ‘‘practice?’’ Or was the
1990 program ‘‘wholly unrelated’’ to that
historical practice?
I have anticipated this question in many of my previous
findings. I have found that the Respondent’s own written ad-
missions clearly establish a close kinship between the two
programs, indeed, that the Respondent found it useful to its
purposes in announcing the 1990 program to portray the
1985–1989 payment program as the father of the new pro-
gram. I have also found that the facial similarities between
the former program and the latter one alone betray that pater-
nity. And, in making that particular finding, I rely principally
on the following set of considerations.
The seven multifacility payments in 1985–1989 were por-
trayed to employees as being ‘‘profit’’-linked, under cir-
cumstances where Judd admits that ‘‘copper price’’ is one of
the two key variables affecting company profitability (the
other, according to Judd, is ‘‘productivity,’’ more precisely,
‘‘production costs’’).62 And it is clear from Judd’s testimony
that ‘‘copper price’’—not ‘‘productivity’’—had the ‘‘pre-
dominate . . . impact’’ in the Respondent’s ‘‘judgements’’ to
confer all of the (five) appreciation payments made by the
Company in and after ‘‘mid-’87.’’ Thus, the seven multi-
facility payments amounted to ‘‘profit-sharing bonuses,’’ and
the five bonuses paid after ‘‘mid-’87’’ were directly based on
‘‘copper price’’ as the key factor. And therefore it is not
hard to see that the ‘‘copper price’’ formula used for the
1990 program was merely an extension or refinement of the
considerations and formulas underlying the majority of the
1985–1989 payments, indeed the ones which underlay all of
the payments made in and after ‘‘mid-’87.’’
Accordingly, the 1990 program of payments was quite ob-
viously closely ‘‘related’’ in character, theme, and formula to
the payments made previously on a union-blind basis. And,
in the circumstances, the 1990 program involved a ‘‘change’’
from the 1985–1989 ‘‘program’’ in the very sense claimed
by the General Counsel—in its exclusion of traditionally in-
cluded groups, i.e., union-represented employees. In the cir-
cumstances, the Respondent clearly owed a Katz duty to no-
tify and bargain with the Unions before withholding from the
unit employees they represented a substantial emolument of
‘‘compensation’’ which they had traditionally received.
4. The Respondent’s ‘‘waiver’’ defenses
I noted in my initial statement that the Respondent pleaded
no affirmative defenses in its answers. In addition, the Re-
spondent’s counsel declined to make an opening statement at
the trial’s outset, and did so again after the prosecuting par-
ties had rested their cases-in-chief, saying in the last instance
that there was no need for such a statement because, ‘‘Your
Honor is fully apprised of what the positions of the parties
will be.’’ At this point, Attorney Hollis, for the Electrical
Workers, argued that the Respondent should be required to
articulate its defenses, ‘‘to avoid any kind of surprise or that
sort of thing.’’ Responding to this, I declined to require the
Respondent to make a comprehensive statement of its de-
fenses, but I cautioned the Respondent that,
If I find that an argument is raised on brief based on
some sliver of evidence in the record which would lead
[me] to believe that the issue wasn’t litigated due to
lack of notice, I’m liable to dismiss that argument on
that ground alone. I will need to see full litigation of
any legal contention and I’m taking Respondent’s word
that he believes there will have been on that point.
I then hazarded my own summary of the Respondent’s ap-
parent legal position—in substance that the past history of
appreciation payments made by the Respondent never created
a duty to bargain with any of the Unions over the subject
of such payments; that it was not ‘‘inherently unlawful for
the Respondent to have promulgated’’ the 1990 program; and
that its announcement and implementation of the new pro-
gram had no ‘‘inherently discriminatory’’ impact, nor did it
‘‘inherently tend to interfere with employees’ rights under
Section 7.’’63 I invited the Respondent to correct me if I was
wrong. The Respondent’s counsel adopted those summaries
and further affirmed that in thus summarizing its position, I
had not ‘‘missed anything significant.’’64
On brief, the Respondent now interposes two hitherto-un-
announced ‘‘union-waiver’’ defenses. Both are vulnerable to
dismissal for the reasons I noted in my cautionary remarks
to the Respondent’s counsel quoted above, but I shall iden-
tify these defenses more particularly before disposing of
them. The Respondent argues as to the Electrical Workers:
Assuming, arguendo, that a bargaining obligation [over
the question of the El Paso unit employees’ inclusion
in payments made to their nonunion counterparts under
the 1990 Program] did exist, the El Paso Rod Mill
Union waived any such obligation.
The Respondent here claims, in substance, that the Electrical
Workers committed such a ‘‘waiver’’ when ‘‘it agreed to the
inclusion of an integration [or ‘zipper’] clause in the current
[i.e., 1988–1991] collective bargaining agreement.’’ Sepa-
rately, the Respondent now contends that both the Electrical
Workers and the PACT Union committed a different form of
‘‘waiver’’ when, after learning of the Respondent’s imple-
mentation of the 1990 program, they failed to request bar-
gaining over the Respondent’s exclusion from the program of
the employees they represented.65
1002 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
See also NLRB v. Miller Brewing Co., 408 F.2d 12, 15 (9th Cir.
1969):
Each time the bargainable incident occurs—each time new rules
are issued—[the] Union has the election of requesting negotia-
tions or not.
66 I will not burden this decision by quoting the lengthy text of
the clause in question. It is generalized in its expression. It in no
way indicates on its face that, by agreeing to this clause, the Elec-
trical Workers were ceding to the Respondent during the term of the
contract the right unilaterally to vary from established past practice
respecting appreciation payments; much less does it establish that the
parties contemplated that, under this clause, the Respondent might
withhold from Rod Mill unit employees any future appreciation pay-
ments it might choose to confer on their unrepresented counterparts
at the Rod Mill.
67 The Respondent did not merely fail to plead this alleged waiver
in its answer, where it arguably should have (Fed.R.Civ.P. 12(b)(6)),
but it pointedly avoided specific opportunities to bring this defense
to light at many intervals before the record closed, especially when
its counsel declined my specific invitation to identify any defense
that might require more specific litigation in order to be ‘‘fully liti-
gated.’’ Particularly at the latter juncture, when the issue of sandbag-
ging—and its consequences—was foremost in the discussion, coun-
sel owed greater candor if it wished to raise and preserve this par-
ticular defense. Surely, the defense was not implicit in what I had
surmised out loud, which surmises, as counsel affirmed, did not dif-
fer or vary in any ‘‘significant’’ way from the Respondent’s own
‘‘position.’’
68 Reece Corp., 294 NLRB 448 (1989), adapting and quoting from
Park Ohio Industries v. NLRB, 702 F.2d 624, 628 (6th Cir. 1983).
See also, e.g., Angelus Block Co., 250 NLRB 868, 877 (1980); GTE
Automatic, 261 NLRB 1491, 1492 (1982).
69 The Respondent entirely fails to persuade me in its attempt to
equate the facts in this case to those presented in Columbus &
Southern Ohio Electric Co., 270 NLRB 686 (1984). That case pre-
sented a differently worded and more particularized zipper clause
than the one in the 1988–1991 agreement; more important, it in-
volved a closely litigated bargaining history, which disclosed the
specific context in which the ‘‘zipper’’ clause at issue had emerged,
and had been separately challenged unsuccessfully by the union as
an 8(a)(5) violation before the union acquiesced in the inclusion of
the clause in the new agreement. Moreover, the union had specifi-
cally acknowledged in an administrative appeal associated with its
earlier unfair labor practice charge, that the ‘‘zipper’’ clause in ques-
tion was so broad as to bar future bargaining over even not specifi-
cally mentioned ‘‘practices.’’ And this was specifically invoked by
the majority as one of the ‘‘factors’’ which ‘‘constitute[d] evidence
that the Union was fully aware that all previous agreements were
subject to the zipper clause.’’ 270 NLRB at 687 fn. 3.
70 Certainly, given these same ‘‘realities,’’ I would have no hesi-
tation in finding that union-represented employees must have learned
on or shortly after March 26, 1990, that their ‘‘union-free’’ counter-
parts were about to receive a 6-month retroactive appreciation pay-
ments which they would not share in, and that their ‘‘union-free’’
counterparts would continue to receive such bonuses every 3 months
thereafter, under a new program designed exclusively for those occu-
pying ‘‘union-free’’ status.
71 E.g., Intersystems Design Corp., 278 NLRB 759–760 (1986),
and authorities cited.
D. Alleged ‘‘zipper clause’’ waiver by Electrical
Workers
The Respondent claims waiver by the Electrical Workers
based on the existence of an ‘‘integration’’ clause in the
1988–1991 El Paso Rod Mill contract.66 In these aggravated
circumstances,67 the defense deserves summary dismissal. In
any case, I find that the parties did not in any meaningful
way litigate the relevant particulars; they certainly did not
focus litigation on the bargaining history insofar as it related
to the inclusion of that clause in the agreement. Their failure
to litigate on this point is not surprising; the Respondent
never raised waiver as a defense, much less did it allege a
waiver tracing to the parties’ inclusion of the purported ‘‘zip-
per’’ clause in their 1988–1991 agreement. The Respondent’s
failure to plead waiver as an affirmative defense or to raise
it during the merits trial, or to introduce evidence of the
‘‘bargaining history surrounding this [‘zipper’] provision or
the parties’ interpretation of the provision,’’ amount, in the
aggregate, to a waiver of its right to claim waiver. European
Parts Exchange, 270 NLRB 1244 fn. 1 (1984).
Alternatively, on the merits, I would find that the Re-
spondent did not establish waiver simply by leaving us with
a record showing that a rather generalized form of ‘‘integra-
tion’’ clause appears in the 1988–1991 agreement and that,
during 1988 bargaining, the Electrical Workers had once
asked, only to be immediately rebuffed, if the Respondent
‘‘would be willing to include something in the agreement’’
relating to the ‘‘periodic bonuses’’ which the Respondent’s
Pierce had already raised as a shield against union requests
for an increase in ‘‘base rates.’’ These circumstances do not
come close to establishing that the Electrical Workers had
‘‘fully discussed’’ or ‘‘consciously explored,’’ much less
‘‘consciously yielded,’’ or ‘‘clearly and unmistakably waived
its interest in the matter.’’68 Specifically, this spare record
hardly shows that the Electrical Workers consciously ceded
to the Respondent during the life of the contract the right to
unilaterally determine whether employees in the Rod Mill
unit would continue to be included in future appreciation
payments extended to their unrepresented coworkers.69
The only remaining question is,
Did all the Unions Waive the Right to Bargain about
Implementing the New Program by Failing to Request
the Same After the Respondent Announced It?
The record does not affirmatively show that any of the
Unions sought to bargain with the Respondent after the Re-
spondent had unilaterally announced and implemented the
new program. In this regard, I presume that the Unions did,
indeed, receive ‘‘notice’’ of the new program at some point,
for they eventually filed unfair labor practice charges about
it. Moreover, I might even safely assume, as the Respondent
does, that ‘‘[g]iven the realities of the workplace, union rep-
resentatives were surely aware of the announcement shortly
after it was made on March 26, 1990.’’70 But I find under
all the circumstances that the Respondent made it essentially
a futility for the Unions to seek to bargain, post facto, over
the Respondent’s unilateral actions.
In this regard, I note that the Respondent pointedly failed
to give the Unions advance notice of its actions; thus, it had
already presented the Unions with a fait accompli and there-
by prevented exactly the kind of good-faith bargaining in ad-
vance contemplated by the statute and the construing authori-
ties.71 Moreover, in the interest of retaining ‘‘full discre-
tion,’’ the Respondent had always resisted as a matter of pol-
icy any bargaining with unions over the subject of ‘‘appre-
ciation payment’’ matters; it had claimed, in the one instance
when a union had tried to raise the subject at the bargaining
table, that the Electrical Workers would simply have to
1003PHELPS DODGE MINING CO.
72 Ciba-Geigy Pharmaceuticals, 264 NLRB 1013, 1017 (1982),
stating,
However, if the notice is too short a time before implementation
or because the employer has no intention of changing its mind,
then the notice is nothing more than informing the union of a
fait accompli.
73 The Respondent’s cases are distinguishable. WPIX, Inc., 299
NLRB 525 (1990), unlike this case, involved a unions
preimplementation notice of an increase in the mileage reimburse-
ment rates which the employer would pay to employees represented
by the union, followed by that union’s failure, before implementa-
tion, to seek to bargain. Ventura County Star Free Press, 279 NLRB
412 (1986), involved a ‘‘complex factual matrix’’ (id. at 420) which,
again, included preimplementation notice to the union (at a bargain-
ing session) that the employer would no longer confer ‘‘step raises.’’
Ibid.
74 Interest is to be figured as in New Horizons for the Retarded,
283 NLRB 1173 (1987).
75 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended 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 purposes.
‘‘trust the Company’’ in such matters. In addition, the Re-
spondent expressly declared that the quarterly payment pro-
gram would be limited to ‘‘union-free’’ employees. Such
preemptive declarations do not invite bargaining, they pre-
clude it;72 they carry no suggestion that the employer will
maintain the status quo (in this case by offering to continue
to confer appreciation payments under the new program to
union-represented and - unrepresented groups) for a reason-
able time to permit bargaining before any change might be
implemented. Moreover, in their testimony, both Judd and
Marcus suggested that the Respondent would have been will-
ing to bargain over the inclusion of represented employees
in payments being made under the new program only when
their respective labor agreements expired, in the context of
bargaining for a successor agreement. Thus, these authori-
tative company witnesses have virtually admitted that, had
the Unions sought to bargain at the time the respondent an-
nounced the new program, the Respondent would have told
them to put any such notion on hold, until such time as the
employees they represented were no longer bound to a cur-
rent labor agreement.
I thus find no waiver of rights to bargain by the Unions
where to have demanded bargaining with the Respondent
would have been a futility on their part.73 And, consistent
with earlier discussion, I conclude as a matter of law that
when the Respondent failed to include union-represented em-
ployees at Tyrone and El Paso in payments made under the
new program, the Respondent effected a unilateral change in
the terms and conditions of employment of employees in the
Tyrone and El Paso units, and thereby failed and refused to
bargain in good faith with the Unions, in violation of Section
8(a)(5) and (1) of the Act.
THE REMEDY
My recommended Order contemplates that Respondent
shall cease and desist from taking all unlawful action found.
Affirmatively, it provides that the Respondent shall restore
the status quo ante its unlawful actions by making whole all
employees in the Tyrone and El Paso bargaining units in
amounts equal to those already paid to ‘‘union-free employ-
ees under the new program since its inauguration, with inter-
est.74 It further contemplates that the Respondent shall con-
tinue to confer such payments on Tyrone and El Paso unit
employees unless and until, for lawful reasons, the Respond-
ent might wish to make changes, and, in such event, unless
and until the Respondent shall have discharged all collective-
bargaining obligations it may then owe to the Unions, or any
of them, concerning any such proposed changes. Finally, be-
cause the Respondent’s mining companywide announcement
of the 1990 ‘‘Union-Free’’ program has been found to have
had an inherent tendency to interfere with the rights of all
the Respondent’s day’s-pay employees and to ‘‘discourage’’
all such employees from becoming or remaining union mem-
bers, my recommended Order contemplates that the Respond-
ent shall post an appropriate notice to employees at all its
mining company facilities where it employs day’s-pay em-
ployees.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended75
ORDER
The Respondent, Phelps Dodge Corporation, El Paso,
Texas, and Tyrone, New Mexico, its officers, agents, succes-
sors, and assigns, shall
1. Cease and desist from
(a) Telling employees that they must be ‘‘union-free’’ in
order to receive quarterly appreciation payments.
(b) Discriminatorily withholding appreciation payments
from employees in the El Paso Rod Mill and Tyrone Mine
bargaining units which the Respondent has conferred and
continues to confer to unrepresented employees under its
1990 quarterly appreciation payment program.
(c) Unilaterally changing the terms and conditions of the
employees in the Tyrone and El Paso bargaining units by
failing to include employees in those units in appreciation
payments being conferred to unrepresented employees under
the 1990 program.
(d) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed in Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Make employees in the El Paso and Tyrone bargaining
units whole, with interest, for its discriminatory and unilat-
eral withholding from them of payments made under the
1990 program, starting from the point when that program
was inaugurated and until such time as the Respondent shall
have discharged all collective-bargaining obligations to the
Unions about any nondiscriminatorily motivated changes
which the Respondent may propose to make concerning ap-
preciation payments affecting employees in those units.
(b) Preserve and, on 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 back payments and interest due under the terms
of this Order.
(c) Post at all its copper facilities and operations under the
jurisdiction of the Phelps Dodge Mining Company where
day’s-pay employees work copies of the attached notice
1004 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
76 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
marked ‘‘Appendix.’’76 Copies of the notice, on forms pro-
vided by the Regional Director for Region 28, 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 cus-
tomarily posted. Reasonable steps shall be taken by the Re-
spondent to ensure that the notices are not altered, defaced,
or covered by any other material.
(d) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated 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
concerted activities.
WE WILL NOT tell our employees that they must be ‘‘union
free’’ to receive appreciation payments being paid under our
1990 program.
WE WILL NOT discriminate against our employees who are
represented by the Electrical Workers or the PACT Union or
by any other labor organization by withholding appreciation
payments from them which we are paying to our unrepre-
sented employees under the new program.
WE WILL NOT unilaterally change established conditions of
employment in the bargaining units represented by the Elec-
trical Workers, or the PACT Union, or by any other labor
organization, such as by failing to include such employees in
appreciation payments made under the 1990 program to their
unrepresented coworkers at the same locations.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaran-
teed you by Section 7 of the Act.
WE WILL make whole, with interest, all of our day’s-pay
employees working in union-represented bargaining units at
the El Paso Rod Mill and the Tyrone Mine, by paying them,
with interest, the amounts we have paid to unrepresented
day’s-pay employees under the 1990 program, and WE WILL
continue to include those unit employees in such payments
unless and until we have a lawful reason for changing that
practice, and unless and until we fulfill our duties to notify
and bargain collectively in good faith with the Electrical
Workers and/or the PACT Union over any such desired
changes.
PHELPS DODGE CORPORATION