Puerto Rico Telephone Co.

National Labor Relations Board - Board Decisions

Nov 20, 1964

149 N.L.R.B. 950 (N.L.R.B. 1964)

950 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agent of the employees in the appropriate unit with respect to rates of pay, wages,
hours of employment, or other conditions of employment, and, if an understand-
ing is reached, embody such understanding in a signed agreement. The appro-
priate unit is:
All production and maintenance employees employed at our Clarksville,
Tennessee, plant, excluding office clerical employees, guards, and supervisors
as defined in the Act.
WE WILL. NOT in any like or similar manner interfere with, restrain, or coerce
our employees in the exercise of their right to self organization, to form, join, or
assist United Rubber, Cork, Linoleum and Plastic Workers Union, AFL-CIO,
affiliated with United Rubber, Cork, Linoleum & Plastic Workers of America,
AFL-CIO, or any other labor organization, to bargain collectively through
representatives of their own choosing, and to engage in other concerted activity
for the purpose of collective bargaining or other mutual aid or protection or to
refrain from any or all such activities.
All our employees are free to become, remain, or refrain from becoming or
remaining, members of any labor organization.
BOOT-STER MANUFACTURING COMPANY, INC.,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, 746
Federal Office Building, 167 North Main Street, Memphis, Tennessee, Telephone
No. 534-3161, if they have any question concerning this notice or compliance with
its provisions.
Puerto Rico Telephone Company and Sindicato de Trabajadores
Packinghouse , United Packinghouse Food & Allied Workers,
District 9 of Puerto Rico, AFL-CIO, and its affiliate Union
de Empleados de la Industria del Telefono de Puerto Rico.
Local 963. Case No. 04-CA-1739. November 20, 1964
DECISION AND ORDER
On February 3, 1964, Trial Examiner Samuel M. Singer issued his
Decision in the above-entitled case finding that the Respondent had
engaged in and was engaging in certain unfair labor practices and
recommending that it cease and desist therefrom and take certain
affirmative action, as set forth in the attached Trial Examiner's Deci-
sion. Thereafter, the Respondent filed exceptions to the Trial Exam-
iner's Decision and a brief in support thereof.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Chairman McCulloch and Mem-
bers Fanning and Brown].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Trial
149 NLRB No. 84.
PUERTO RICO TELEPHONE COMPANY 951
Examiner's Decision, the exceptions and brief, and the entire record
in this case,' and hereby adopts the findings, conclusions and recom-
mendations of the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the Board hereby adopts as its Order, the Order recom-
mended by the Trial Examiner, and others that Respondent, Puerto
Rico Telephone Company, its officers, agents, successors , and assigns,
shall take the action set forth in the Trial Examiner 's Recommended
Order, with the following addition :
Add the following as paragraph 2(d) in the Trial Examiner's
Recommended Order, and reletter the subsequent paragraphs thereof
accordingly :
"Notify the employees entitled to reinstatement if presently serv-
ing in the Armed Forces of the United States of their right to full
reinstatement upon application in accordance with the Selective
Service Act and the Universal Military Training and Service Act
of 1948, as amended , after discharge from the Armed Forces."
1 As the record and brief adequately present the issues and the positions of the parties.
Respondent's request for oral argument is hereby denied.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Upon a charge filed on March 8 , 1963, and amended charges filed March 20 and
August 15, 1963 , by the above-named labor organizations , herein collectively called
the Union , the General Counsel issued a complaint on August 15, 1963, against Puerto
Rico Telephone Company, herein called the Respondent or the Company. The com-
plaint alleged that Respondent violated Section 8(a)(5) and (1 )of the Act by uni-
laterally contracting out certain work performed by employees in the bargaining
unit represented by the Union, as a result of which Respondent had laid off employees
in the unit , without giving the Union prior notice and opportunity to negotiate con-
cerning the same. The complaint further alleged that Respondent, in violation of the
same section , refused to furnish to the Union, upon its request, certain information to
enable it to process a grievance arising out of the layoff of employees in the unit.
Pursuant to notice , a hearing was held before Trial Examiner Samuel M. Singer in
Santurce , Puerto Rico, on various dates between October 7 and November 6, 1963.
All parties appeared and were afforded full opportunity to be heard and to examine
and cross -examine witnesses . Briefs have been received from General Counsel and
Respondent.
Upon the entire record and from my observation of the witnesses , I make the
following:
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF RESPONDENT
Respondent , a Delaware corporation, is authorized to do business in the Common-
wealth of Puerto Rico , and has been, and is, engaged in furnishing telephonic com-
munication throughout the Commonwealth of Puerto Rico and between Puerto Rico
and points outside thereof. In the course of its operations , Respondent annually
imports materials and equipment which are shipped directly to it from points outside
of Puerto Rico and which are valued in excess of $50 ,000, and its annual gross volume
of business exceeds $500,000 . Respondent admits, and I find, that at all times material
herein Respondent has been, and is , engaged in commerce within the meaning of
Section 2 ( 6) and (7) of the Act.
952 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
II. THE LABOR ORGANIZATIONS INVOLVED
The Charging Parties are, and have been at all times material herein, labor organi-
zations within the meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Contractual relations between Respondent and the Union 1
Respondent and the Union have had contractual relations since May 7, 1959, when
the parties entered into their first collective-bargaining agreement, effective from that
date through May 6, 1962. Article II of that agreement included in the bargaining
unit all employees of the Company in Puerto Rico with the exception of part-time and
temporary employees and certain other employees such as executives, supervisors,
secretaries, etc. The contract also contained a management-prerogative clause and
other clauses frequently found in labor contracts, such as a no-strike and no-lockout
clause and provisions dealing with seniority, grievance procedure, etc. There was no
clause specifically covering subcontracting.
As related in greater detail below, in October 1961 the parties commenced to nego-
tiate a new contract to replace their 1959 agreement. As also appears below, Respond-
ent had by then been involved in an extensive expansion program to enlarge and
improve its telephone services, employing various contractors to perform this work.
Anxious to protect itself from possible adverse effects of subcontracting by the Com-
pany, the Union's bargaining demands included limitation of Respondent's right to
subcontract. Negotiations were suspended in early 1962 while the Regional Director
processed an election petition of a rival union Following an election, the Regional
Director, on July 5, 1962, certified the Union 2 as bargaining representative of an
appropriate unit consisting of substantially the same employees as were covered in the
1959 contract, specifically excluding from the unit Respondent's temporary and part-
time employees.3 Thereafter on July 24, 1962, the parties resumed contract negotia-
tions, and after some 30 sessions, a new agreement was signed on November 8, 1962,
effective October 28, 1962, to October 27, 1964. This contract contained a manage-
ment clause like that in the 1959 contract and also similar no-strike and no-lockout,
seniority, and grievance provisions The new contract, like the 1959 contract, was
silent on subcontracting. Attached to the contract was a schedule of job classifica-
tions in the bargaining unit, including telephone installers, repairmen, linemen, switch-
men, framemen, splicers, testmen, telephone operators, clerks, etc.
B. Respondent's expansion program and subcontracting arrangements
Respondent undertook its expansion program at the end of 1958 under the direction
of the Public Service Commission of Puerto Rico. Originally envisaging expenditure
of $52 million, over a 5-year period, the program was enlarged in 1961 to $130 million,
with completion in 3 years. Actual construction thereunder began in 1960, reaching
1 The findings in this and succeeding sections are for the most part based on undisputed
testimony and documentary evidence. When witnesses gave differing versions of events, I re-
solved the conflicts on the basis of the comparative demeanor of the witnesses and on the
basis of what appeared to me, considering the whole record, to be more consistent with the
inherent probabilities of the situation
3 The certification ran to the Sindicato or International. On August 21, 1962, the certi-
fication was amended to include the Sindicato's affiliate, Local 963, as joint bargaining
representative. As already noted, the Sindicato and the Local are herein collectively re-
ferred to as the Union
3 The unit description reads: "All nonsupervisory employees of the Employer including
all regular employees, porbationary employees, messengers and mail clerks but excluding
all executives, company officers, department heads, division heads, zone supervisors, sec-
tion heads, district and geographical sub-division heads ; foremen ; secretaries to company
officers, executives and department heads ; all employees of Industrial Relations Depart-
ment except messengers and mail clerks ; directory salesmen ; commission salesmen ; all
professional and technical employees, all guards; and supervisors as defined in the Act."
Temporary and part-time employees were excluded from the unit by footnote 3 of the
Decision and Direction of Election dated April 19, 1962, wherein the Regional Director
noted that the "Employer has been engaged in a 5-year construction program for the ex-
pansion of its telephone system . . since about January 1960, and temporary and part-
time employees are hired only for special projects In connection with this program','; and
that these employees have "no substantial expectancy of continued employment."
PUERTO RICO TELEPHONE COMPANY 953
peak in mid-1962, when it began tapering off. Generally, the program included
conversions of stations from manual to automatic installations, expansion of existing
central offices, enlargement and modernization of long-distance circuits, and installa-
tion and addition of cables
Gerard Lavergne, vice president and chief engineer of Respondent, testified that as
a result of the construction program there was an increase from about 70,000 stations
at the end of 1959_ to slightly over 150,000 in August 1963 (He defined a "station"
as a telephone instrument, including an extension of a telephone in a home, and a
telephone connected to a private PBX or PABX switchboard in a hotel.) Thomas B.
Neff, Respondent's executive vice president, estimated that the Company increased
the number of its telephones in service in 1962 by an "unparalleled 35%," having
installed some 14,000 telephones in the first half and 20,000 telephones in the last half
of that year. Neff stated, "We have used subcontracting for very basic reasons; we
have had to double the size of the Puerto Rico Telephone Company in less than five
years. We couldn't possibly have done it without a substantial amount of subcontract-
ing. We have grown far faster than any other telephone company has ever attempted
in the United States or in any other part of the world for that matter."
Neff further explained that because of the "tremendous number of new [telephone]
installations" facing the Company in the last half of 1962 and the "tremendous back-
log of transfers and removals," the Company could not perform all of the work with
its own work force, and "so we subcontracted part of the work." 4 It is undisputed
that the subcontractors had employed workers with job classifications falling within
the appropriate unit, including telephone installers, repairmen, linemen, framemen,
splicers, and testers. (Some work, such as digging trenches, obviously entailed work
not performed by employees in the unit.) Respondent's own work force, including
installers, handled removals and transfers of existing telephones 5 in areas operated
by subcontractors, while the subcontractors' men "concentrated" on "new" installa-
tions in these same areas. Respondent's plant director selected work areas for the
contractor's workmen and its dispatcher dispatched them in the same way.they had
for the Company's own employees.
The record contains a list of 44 subcontracts on which work was performed by
various contractors during the period covered by the complaint (November 9, 1962 to
March 31, 1963).6 Six of these contracts received in evidence dealt with installation
and cable distribution, both involving tasks performed by unit personnel.? Respondent
conceded at the hearing that "the Company did not give notice [to the Union] prior
to any specific one of the numerous contracts of various nature that the Company
had entered into."
C. The negotiations concerning subcontracting preceding the execution of the
November 8, 1962, contract
As already noted in section A, supra, Respondent's subcontracting was a subject of
concern to the Union during the negotiation of the 1962 contract. Amando Sanchez
the International's president, testified at the hearing that authough the Company had
subcontracted work during the term of the 1959 contract (which expired on May 6,
1962), the subcontracting at that time "did not cause discharges, but it caused the
4 The Company had let contracts in 1960 and 1961, as well as 1962 Neff testified that
the Company awarded contracts each month from January 1962 to September 1963. One
of Respondent's major contractors was I.T.T. Puerto Rico, Inc., wholly owned by I.T.T.
Caribbean Manufacturing, Inc., which in turn 7s wholly owned by International Telephone
and Telegraph Corporation whose headquarters are in New York City. The latter also owns
about 80 percent of the stock of Respondent. I.T.T. Puerto Rico, Inc., commenced business
in Puerto Rico at the end of 1961 or beginning of 1962.
5 Neff described these as "the miscellaneous and more difficult jobs." Neff further stated
that the Company's force also handled "small" ($1,000 to $5,000) construction jobs not
desirable to subcontract, provided the Company had on hand an adequate supply of skilled
and technical help.
0 The contracts in question were produced by the Company in the course of the hearing
only after it was directed to do so by order of the U S. District Court for the District of
Puerto Rico in proceedings to enforce the Board's subpoena duces tecum After the
issuance of the court's order, Respondent's counsel fully cooperated in the production of
relevant material.
7 A seventh contract produced by General Counsel covered a "special test job" by the
subcontractor's employees, which, as Vice President Neff testified, did not involve work
performed by Respondent's regular employees.
954 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union to put itself on its guard because of the continuation of same could adversely
affect the interests of the employees." 8 Accordingly, at the very start of the negotia-
tions in October 1961, the Union proposed a clause restricting the Company's right to
subcontract and the Union continued to press therefor until suspension of negotiations
early in 1962 due to pendency of representation proceedings initiated by a rival union
(section A, supra). In response to the Union's request as to "what security was going
to be given the employees," the Company assured the Union that the contracts would
not affect the employees in the unit,9 and, indeed, that there would be an increase,
rather than a decrease, in unit personnel. On June 8, 1962, during pendency of the
representation proceedings, the Union wrote Respondent:
The Company has been violating the current contract by the manner in which the
Company has been giving its contracts to companies other than the telephone
company, which is directly harming the employees of the Telephone Company,
which is stipulated in said current contract between the Union and the Company
saying that in the event that the Company should need to carry out "special jobs"
the same shall be performed by temporary employees or otherwise an agreement
would be reached in advance between the,Union and the Company.'°
In its reply of July 19, 1962, the Company stated
We are not in agreement that the Company has been violating any contract (the
last collective-bargaining agreement expired on May 6, 1962) by contracting
work with other companies. The Company expressly reserves at all times the
right to sub-contract whenever it may deem it pertinent. In normal times the
Company would be the last to go out to contract work outside because of the
high cost of same. At the present time and due to the enormous expansion
program we have been forced to resort to private contractors.
When negotiations resumed on July 24, 1962, the Union resubmitted its original sub-
contracting'proposal." This proposal was the subject of major discussion at a meet-
ing between the parties on September 15, 1962, when Respondent rejected it on the
ground that it established a closed shop. The Union then proposed the following
substitute subcontracting clause:
The Company is carrying out an expansion program pursuant to an order of
the Public Service Commission for which program some work is being performed
by subcontracts, a large part of which is in its final stage. The Company guar-
antees the Union that it is not its intent to subcontract regular production and
maintenance jobs that are performed by members of the Union. Likewise the
Company gives assurance that should some work have to be performed in addi-
tion to that ordinarily performed by production and maintenance workers pur-
suant to the expansion program, and the Company for that reason would have to
subcontract said work, such will not affect the condition of employment of those
regular workers who, were it not for the exigencies of the expansion program,
might perform the subcontracted work.
8 As noted under section B, supra, the peak of Respondent's expansion program occurred
in 1962
O This finding is based upon the testimony of Sanchez which is corroborated by other
General Counsel's witnesses. His testimony also jibes with the Company's position in this
proceeding that the subcontracts did not adversely affect the unit employees. Sanchez
and other General Counsel witnesses further testified that during this and later periods in
the negotiations the Company's representatives also assured the Union that there would be
no further subcontracting after expiration of the existing contracts and conversion of the
installation in Arecibo, which took place on November 30, 1962-a statement vigorously
denied by the Company's representatives. I credit this denial by the Company's repre-
sentatives. It seems unlikely that such a statement would have been made by the Com-
pany's representatives at a time when the Company 's expansion program was in full
momentum.
10 The reference appears to be to article II, section 2 of the 1959 contract.
"The clause in question read: "When the COMPANY should need to perform any work
by contract, it commits-itself to make efforts with the contractor so that preference be
given for employment to the regular employees of the employer who are members of the
UNION, who may be available for work. Before work is commenced by the contractor,
the employer shall notify the UNION and make arrangements so that before the work of
the contractor commences a meeting be held between the UNION, the COMPANY and
the contractor to see how much personnel the UNION can supply."
PUERTO RICO TELEPHONE COMPANY 955
At the next meeting, September 18, 1962, the parties discussed this substitute pro-
posal. It was at this meeting or the preceding one on September 15 that two employee
members of the Union Committee protested that unit employees at certain locations
were being adversely affected by subcontracts pertaining to installation of new tele-
phones, and the Company's representatives promised to look into the matter. In
support of the Union's position, Luis G. Estades, counsel for the International, called
attention, at the September 18 meeting, to the Board's Town & Country and Fibre-
board decisions and the Supreme Court's United Steelworkers cases.12 Rafael Orel-
lana, a company representative, replied that he was familiar with the principles enun-
ciated in these cases and would consult with the Company's attorneys.13 Orellana
then requested that the subject of subcontracting be deferred and discussed at a later
time along with the noneconomic clauses pending at that time 14
Sometime thereafter the Insular (Puerto Rico) Conciliation Service was called in to
assist the parties in the negotiations, particularly in resolving the economic issues
separating the parties. After reaching agreement on the economic issues, there still
remained unresolved at the final bargaining session on October 24 and 25, 1962, eight
noneconomic or "administrative" issues. These involved no-strike and no-lockout,
union shop, checkoff, union recognition, entire agreement, subcontracting, union
responsibility, and management-rights provisions. The parties ultimately reached
agreement on all matters except the union-responsibility clause which the Union
rejected 15 and the subcontracting clause (heretofore referred to) which the Company
rejected. Thereafter the Company withdrew the union-security clause and a draft
was agreed upon excluding this clause and also the subcontracting clause. The Union's
membership ratified the agreement at a meeting held on October 28 and the parties
then executed the new contract on November 8, 1962.
D The layoffs
1. Nature and scope of the layoffs
The record establishes, and I find, that Respondent permanently laid off 227 unit
employees during the complaint period, November 9, 1962, to March 31, 1963.16
These layoffs took place on November 9, 16, 23, 30 (or December 1), 1962, and
March 8 and 29, 1963. Included among the laid-off employees were "station"
12As noted infra, in Town & Country Manufacturing Company, Inc., 136 NLRB 1022
(subsequently enfd 316 F . 2d 846 (C.A. 5) ), and Fobreboard Paper Products Corporation,
138 NLRB 550 ( subsequently enfd . sub nom. East Bay Machinists , Local 1304 , at al., 322
F. 2d 411 (C.A.D C.)), the Board held that an employer ' s decision to subcontract work
performed by members of an existing bargaining unit, even though based on economic
considerations , is a subject of mandatory bargaining. In United Steelworkers v. Gulf
Navigation Co., 363 U. S. 574, the Supreme Court held an arbitrator was empowered to
determine whether a subcontracting controversy was arbitrable , even though the bargain-
ing contract contained no express provision on subcontracting and the contract withheld
from the grievance procedure "matters which are strictly a function of management."
13 Orellana , at that time the Company 's director of labor relations , and Luis Gonzalez
Monclova, the Company 's director of industrial relations , were Respondent ' s chief nego-
tiators. ( Orellana became director of industrial relations on March 25 , 1963, and Gonzales
Monclova sometime after that date became administrative assistant to the Company 's presi-
dent. ) The Union was represented at the negotiations by Armando Sanchez, its chief
spokesman , and a committee composed of local officers and Company employees.
14 The foregoing finding as to the September 18 meeting is based on the uncontradicted
credible testimony of Estades.
1s Under that clause the Union was to undertake to see that all members comply with
the provisions of the contract , to oppose absences and other practices that may affect
company operations , and to support the Company ' s effort to eliminate waste and ineffi-
ciency and improve the quality of the work.
le This finding is based on General Counsel's Exhibit No . 12, a document furnished to
General Counsel by Respondent (The document inadvertently lists the initial date as
November 9, 1963, instead of November 9, 1962 ) Although General Counsel 's brief refers
to 205 ( instead of 227) employees , this does not include the 22 "probationary " employees,
listed in General Counsel's Exhibit No . 12, who are also included in the appropriate unit.
At one point, Respondent stipulated that it had laid off 170 unit employees between Novem-
ber 9 and March 8, the last date mentioned in the original complaint The complaint was
thereafter amended to extend the complaint period to March 31 , 1963. General Counsel's
Exhibit No . 12 lists additional employees laid off during the period in question , but these
include nonunit employees such as supervisors , temporary and part-tuners, ete.
956 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
installers, repairmen, framemen, linemen, splicers, switchmen, testmen, etc Accord-
ing to Industrial Relations (formerly Labor Relations) Director Orellana, the particu-
lar employees affected first learned of their layoff on arrival at the plant, without
advance notice of any kind, being handed a letter stating that their layoff was due to
Company "reorganization."
Company Vice President Neff vigorously denied in his testimony that the Company's
subcontracting operations had contributed to the layoff of so much as "a single person"
in the unit.17 Indeed, Neff contended that the Company's force of telephone installers
was "augmented" during the period in question to take care of peak loads. Neff
testified that the layoffs resulted not from subcontracting, but from a "manpower
study," which he made, showing Respondent to have been operating inefficiently as
compared to other telephone companies; and that the Company could reduce its costs
by eliminating the "least efficient" employees. Neff concluded that the Company
should embark upon a program of reducing the Company's work force on a gradual
basis, department by department and month by month, until a desirable level was
reached by the end of 1963.18 Company President Benckert testified that he knew
of no utility that was as "horribly overstaffed" as Respondent and stated that both
"the layoffs and the size of the work force was unprecedented." Benckert conceded
that the laid-off employees included men with considerable experience, and Neff
explained that they included splicers who are highly trained and valuable employees
but who, in this case, were "less efficient" than those retained.
It is clear from the record, and I find, that whereas prior to the letting of the con-
tracts Respondent's employees worked on new installations (i.e , installing telephones
for new subscribers) in all areas of the Company's operations, as well as "miscel-
laneous" installations (transfers, removals, changing line cords and colors of tele-
phones), such new installations were thereafter made also exclusively by employees
of subcontractors in the particular areas in which they operated. Neff so testified.19
In addition, Julio A. Ramos, employed by Respondent as a service order supervisor
during the period here involved, credibly testified that his superior had instructed him
to route orders for new installations to a subcontractor's office. Severo Figueroa, an
installer for Respondent, credibly testified that just before a particular subcontractor
commenced operations in his area, the Company's installers were informed by a
supervisor that all new installations would thereafter be handled by the subcontractor
while the Company's installers would be restricted to "miscellaneous" work.20
2. The November 1962 grievance discussions
As already noted, Respondent's layoffs commenced on November 9, 1962, the day
after execution of the new collective-bargaining agreement. It is clear from the
record, and I find, that Respondent did not give the Union any advance notice regard-
ing the November 9 layoff.21
The Union promptly filed strenuous protests against Respondent's action. On
November 13, 1962, the Union formally complained to the Company that during the
negotiations it had "consistently demanded the elimination of the work contracts
entered into by the Company in its expansion program"; that the Union had expressed
itself both prior and during the negotiations about the possible "threats to employ-
ment" resulting from these contracts; that there were Labor Board decisions requiring
these matters to be negotiated; that as a result of the Company's reorganization pro-
gram employee jobs had already been eliminated; that the continuation of these con-
17 For the reasons hereafter stated, I do not credit Neff's conclusionary statements re-
garding the impact of the subcontracting upon the bargaining unit.
18 Illustrating the effect of the cost reduction program, Neff stated that at the end of
March 1942 Respondent had 24 97 people per thousand stations as compared to Bell Sys-
tem's 8 5 and General Telephone's 7.9. He indicated the Company's present ratio to be
14 people per thousand stations Neff admitted that increased stations installed by em-
ployees of Respondent's subcontractors had contributed to the present improved picture.
19 Neff also testified that since the latter part of 1962 the Company has returned in-
struments to the factory for repairs, rather than performing such repairs through its
telephone shop mechanics, but that he did not know that this was done by subcontract
One of the installation contracts in evidence provides for repairs by the contractor.
28 Ramos' and Figueroa's testimony on these matters was uncontradicted
21 Orellana, the Company's then labor relations director, admitted he did not have "any
recollection of having advised them [the Union] of the first layoff " Pressed further, he
admitted having testified before the Puerto Rico Senate Labor Committee on a prior occa-
sion that he had no knowledge at the time of signing the contract that this layoff was
scheduled for the next day.
PUERTO RICO TELEPHONE COMPANY 957
tracts "creates a grave situation" and union members should be permitted to work on
these contracts for the contractors; and that the subcontracting as practiced by the
Company be eliminated in complaince with legal requirements. In another letter
written the same date (November 13) the Union pointed out that the first layoffs came
only 1 day after the new contract was signed and involved employees with 25 years'
service; that "it appears that these discharges have been effected in full violation of
the terms of the collective-bargaining agreement"; that since the Union had not been
given the names and there was a 3-day limitation for filing grievances under the con-
tract, the Union was now filing a broad general complaint against all future layoffs;
and that it was requesting a meeting of the Grievance Committee to consider "each
and every one of the cases" involved.
The parties thereafter held a "formal" grievance session on November 15 and two
"informal " sessions on November 19 and 27 at which they discussed the layoffs.22
There is a conflict of testimony as to what transpired at these meetings; in particular,
as to whether Orellana (as he and other Company witnesses testified) had at these
meetings given the Union advance notice of layoffs that followed on November 16, 23,
and 30 (or December 1), 1962.23 The minutes of the November 15 meeting (the only
one for which minutes were taken) make no reference to such notice. These minutes
do show that the Union had claimed, and the Company denied, that the layoffs were
in violation of the seniority clause of the contract; that Gonzalez Monclova, speaking
for the Company, explained that the separations were due to the "construction pro-
gram" which, after reaching "its peak," was now entering into "sort of a plateau" or
descending line, leaving an excess of personnel. When the Union noted that the
Company during the negotiations had indicated that it would have a work force of
2,000, Orellana explained that many of the employees were not in the unit and that
the separations "could not affect the figure mentioned."
There is evidence in the record, and I find, that as a result of the discussions in
November the Company reinstated several employees who were originally laid off.24
3. The February 1963, discussions
The parties met again on February 6 and 12, 1963, to discuss subcontracting with
Attorney Estades and Attorney Ruiz-Suria as chief spokemen for the Union and
Respondent, respectively. After discussion of Board decisions the parties felt that
they had arrived at an agreement and it was agreed that Orellana should reduce the
agreement to writing. Orellana thereafter did draft and sign a document incorporat-
ing the positions of the parties on subcontracting and the alleged agreement. On
advice from Estades, the Union declined to sign the "agreement" on the ground that
it allegedly failed to cover all agreed points.23
2 -'Frank Dalmau , an official of the Company and one of its representatives along with
Orellana and Gonzalez Monclova on the grievance committee, characterized as "formal" a
meeting in which official minutes were taken If no agreement was reached at the first
formal meeting , discussions continued at ensuing " informal" sessions.
Z' Orellana testified that at the November 15 meeting he orally advised the Union of
the layoff the next day and that later he similarly apprised the Union of the November 23
and 30 layoffs in advance-all "out of courtesy" rather than out of a sense of obligation.
Respondent called Dalmau and Renier Mendez (another company official) to corroborate
Orellana 's testimony respecting the notices given on two of the three layoffs ( Novem-
ber 16 and 30) General Counsel's witnesses, including Sanchez, denied receiving the
notices and claimed that they had learned about the layoffs directly from the affected
employees For reasons hereafter noted, I do not find it necessary to resolve this testi-
monial conflict.
u Sanchez indicated that six or seven employees were reinstated but that these were
later laid off once more Orellana , placing the figure at nine , did not deny Sanchez' testi-
mony regarding their subsequent second layoff.
25According to the document ( received in evidence ), Orellana, in reciting the Com-
pany's position on subcontracting , stated that while the Company maintained that it had
the right to subcontract, it "recognizes that it should notify the Union in advance of its
decision to subcontract" so that the Union "may raise the issues that it may deem neces-
sary and negotiate" regarding the effect of the subcontracting on the employees. The
Company undertook the "obligation to notify the Union before subcontracting of its deci-
sion to do so," in order to afford the Union an opportunity to discuss "the effect" of the
decision upon unit employees and to submit proposed countermeasures. The Company
reserved, however, the power of ultimate decision. The Union refused to sign the docu-
ment because it claimed that the Company had also agreed to discuss the impact of the
existing subcontracts on the unit employees and the remedies to be taken to compensate
the laid-off employees.
958 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
4. The March 1963 grievance discussions; the Company's refusal to comply with the
Union's request for economic data to support its position and to submit the dispute
to conciliation and arbitration
The subjects of subcontracting and layoff again occupied the parties' attention in
March. On March 5 and 6, 1963, Industrial Relations Director Orellana informed
the Union that there would be another layoff on March 8.26 Orellana did not identify
the employees involved or their job classifications, mentioning only a "round figure"
and indicating that the "decision" to lay off had been made by management 27 By
telegram dated March 7 the Union demanded that Respondent stop the layoffs and
urged it to negotiate the "conditions for retirement" if layoffs became necessary.28
The parties thereafter held several meetings commencing March 9, 1963, in which
they discussed the layoffs and whether they were the result of the Company's subcon-
tracting (as claimed by the Union) or of "economic reorganization" (as claimed by
Respondent). At their March 12 meeting, the parties agreed to submit the layoff
dispute to the grievance committee established by their existing collective agreement.
The committee thereafter met on three occasions with Oiellana (or Gonzalez Mon-
clova) as the Company's chief spokesman and Ramon Rohena Garay, an official of
the International , as the Union's spokesman.29
At the March 14 grievance committee meeting Rohena asked the Company to
submit data relating to the subcontracts and to "prove " to the committee that the
layoffs were due to "economic reorganization ." Orellana replied that "the company
has the right to subcontract at any time and also ... to lay off according to the con-
tract." He rejected the Union 's demand to submit evidence "to prove the economic
reasons" for the layoffs. The parties took the same position at the ensuing grievance
committee meetings held on March 15 and 18. The specific information which the
Union requested in the course of the discussions included:
1. Volume of business during the months of January, February and March
1963 compared with November 1962 when the contract was signed.
2. Earnings derived by the company from its volume of business.
3. Amounts saved by the Company on account of wages of those laid off.
4. Is someone performing the labor that the laid off personnel performed?
5. How much will the company save? 30
Counsel for Respondent stipulated at the hearing that Respondent did not submit
to the Union any of the requested information enumerated above.
z0 The foregoing finding is based upon the testimony of Orellana which in this instance
I credit . The testimony of union representatives that they did not receive notice of the
forthcoming layoff on this particular occasion is equivocal and unconvincing.
a'' Orellana testified that although he was the director of the labor relations department
during the layoffs in November and March, he did not know the identity of the employees
selected for layoff and that the industrial relations department , which informed him of
the approximate number involved , did not know their identity either . He further testified
that he never informed or discussed with the Union any anticipated company decision to
lay off employees , prior to definitive company decision thereon.
28 Meanwhile by letter dated March 6, 1963, the Union requested ( and on March 20 the
Company furnished ) a list containing the names, classifications , dates of employment, and
status of the employees in the bargaining unit. The Union stated that it needed the in-
formation to assist it in "finding a solution " to the layoff problem.
21 Article XV of the labor contract spells out the procedure for adjustment of a grievance,
defined "as the allegation made by one or more employees of a violation or violations of
the contractual provisions established in this Agreement ." Successive steps are provided
for processing the grievance through company officials , but these are dispensed with where
the grievance involves suspension or layoff. In the latter case, the Union initiates griev-
ance discussions with the Company 's director of industrial relations . The contract pro-
vides that thereafter the "Company shall have the right to summon the Grievance Com-
mittee," which consists of two representatives of the Company and the Union , "to settle
the grievance ." Section 4 ( c) provides that "If this committee should fail to agree, it shall
appeal to the conciliation service to help the parties in coming to an agreement , save in
cases where the parties decide not to use said service . Should the parties fail to come to
an agreement even thus , it shall by majority vote appoint a fifth member, foreign to the
parties, and any decision adopted by majority vote by this Committee , as thus constituted,
shall be binding upon the parties."
80 The Union had also asked for a list of probationary and temporary employees hired
after the execution of the contract . This the Company agreed to supply.
PUERTO RICO -TELEPHONE COMPANY 959
Having been denied the information , the Union explained to the Company at the
last meeting on March 18 that there was no point to continued discussions, and
sought to invoke the next step in the grievance procedure , namely, intervention by a
conciliator of the Puerto Rico Labor Department . However, when asked if he would
agree to call in a conciliator , Gonzalez Monclova , the Company 's spokesman , replied
that this "was not necessary ." Thereafter , on March 26, the Union wrote to Respond-
ent reminding it that the Company had refused to submit the data to support "the
allegation of economy which according to you was the grounds [sic] for the dis-
charges." The letter then continued:
as you refused to grant intervention to the Conciliator Bureau to resolve the eco-
nomic issues, we must take a decision in order to break the impasse . We pro-
pose the following:
(1) That an arbitrator decided whether the intervention of a concilator as
provided in the collective-bargaining agreement may be requested by either
of the parties or whether it must be requested by the Committee in full.
(2) That regardless of what the arbitrator may decide regarding the
above mentioned , we submit a second issue to him . In this second issue
the arbitrator shall determine whether the Company is obliged to present
evidence to prove the alleged economy which according to you was the
grounds for the discharges.
5. The Union 's attempts to seek redress under labor laws of Puerto Rico
Having received no reply to its information request , the Union sought redress
under labor laws of the Commonwealth of Puerto Rico . Article 8 ( f) of the Puerto
Rico Labor Relations Act, 29 LPRA Sec . 69(1)(f), provides that a breach of a
collective-bargaining contract shall be an unfair labor practice under that Act. Prior
to the events here involved , on November 5, 1962, the Supreme Court of Puerto
Rico had entered a decree affirming an order of the Puerto Rico Labor Relations
Board dated June 17 , 1960, enjoining Respondent from "violating in any manner the
terms of the Collective Bargaining Agreement executed with or that may be exe-
cuted" with the Union , including the grievance and seniority provisions in such con-
tract . The order and decree were based on an unfair labor practice proceeding
which , as already noted , involved matters not here in question . On April 1, 1963,
the Union requested the Insular Labor Board to move the court to cite Respondent
for contempt for violating its decree , on the ground that Respondent had breached
its November 8, 1962 , contract-more particularly its grievance clause, because
Respondent , inter alia , refused to take the necessary steps to process the layoff griev-
ance (which is the subject of the instant proceeding ) through a conciliator and an
arbitrator. In reply to the Insular Labor Board's request for Respondent's position
respecting the two matters the Union had requested to submit to arbitration (i.e.,
whether a conciliator 's intervention may be requested unilaterally by one party and
whether Respondent was under a duty to present evidence to prove the economy
resulting from the layoffs ), Respondent asserted that insofar as the first matter was
concerned , the Union "has not presented any grievance alleging the violation of the
contract," and that for the second , the Company "is not obliged to present evidence
to prove alleged economy" because the management -rights and seniority clauses of
the contract "grant this Company the right to terminate personnel."
On April 19 , 1963 , the Insular Board filed with the Puerto Rico Supreme Court a
motion to cite Respondent for contempt of the court 's decree of November 5, 1962,
as requested by the Union . On May 10 , 1963 , the court denied the motion "with-
out prejudice ," and on reconsideration the Court adhered to this ruling 31
Conclusions
A. The unilateral subcontracting
1. Introduction; the issues and contentions
As already found , Respondent and the Union have had contractual relations since
1959 . In 1960 Respondent embarked upon a huge expansion program conceived
81 Counsel for Respondent explained at the instant hearing that the court in effect up-
held Respondent 's contention , among others , that the court ' s decree was predicated on an
entirely different case and that the appropriate procedure for the Insular Board would
have been to bring a new unfair labor practice proceeding charging a breach of the new
contract alleged by the Union
960 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and planned in 1958 and 1959 and continued in full swing through 1963. In carry-
ing out its program, Respondent contracted out the work without first consulting
with the Union. The subject of subcontracting became a matter of grave concern
to the Union and at the very outset of negotiations on the 1962 contract the Union
offered a proposal to limit the Company's contractual right to subcontract. The
Union continued to press for a subcontracting clause until the end of the negotia-
tions but Respondent rejected it, assuring the Union at the same time that the sub-
contracts would not affect the unit employees adversely. The contract ultimately
signed by the parties is silent on subcontracting but contains a management-prerogative
clause, the the predecessor (1959) contract did.
On November 9, 1962, 1 day after the signing of the contract, Respondent uni-
laterally put into effect the first of a series of layoffs. Altogether 227 unit employees
were laid off between November 9, 1962, and March 31, 1963, including employees
holding jobs required and utilized in the performance of the subcontracts As each
employee was laid off, he was told that his layoff was due to "reorganization" of the
Company. There is no dispute, and I find, that Respondent's decision to subcontract
was motivated solely by economic or business considerations.
The basic issue here is whether, as General Counsel contends, Respondent vio-
lated its bargaining obligation under Section 8(a)(5) and 8(d) of the Act by enter-
ing into subcontracts covering work performed by employees in the bargaining unit
without first bargaining about that decision with the Union, the statutory represen-
tative of the employees in the unit. Respondent contends that it had the right uni-
laterally to contract out the work as a matter of management prerogative; that the
existing bargaining agreement recognized this prerogative and the Union had thus
waived its right to bargain over this matter; that the layoffs effected by Respondent
were not attributable to the subcontracts; that none of the subcontracts involved work
normally done by the bargaining unit; and that, in any event, Respondent had notified
the Union of the subcontracts and layoffs and had given the Union an opportunity
to bargain about them.
On the basis of the entire record, and particularly in the light of the considera-
tions outlined below, I reject Respondent's contentions and find that Respondent's
unilateral actions with respect to the subcontracts violated Section 8 (a) (5) and (1)
of the Act.
2. The applicable principles
As was recently observed in East Bay Union of Machinists, Local 1304, etc. (Fibre-
board Paper Products Corp.) v. N.L.R.B., 322 F. 2d 411, 414 (C.A.D.C.), Congress
"of necessity framed in the broadest terms possible" the scope of the statutory duty
to bargain because of its awareness that "collective bargaining must be kept flexible
without precise delineation of what subjects were covered so that the Act could be
administered to meet changing conditions ." See also Inland Steel Company v.
N.L.R.B., 170 F. 2d 247, 254 (C.A. 7), cert. denied 336 U.S. 960. For the area of
labor management relations is dynamic and constantly evolving. The management
prerogatives of yesteryear are mandatory bargaining subjects of today.32 Noting
that subcontracting or contracting out is a subject extensively dealt with in today's
collective bargaining , the Board, in Fibreboard Paper Products Corporation, 138
NLRB 550, enfd. 322 F. 2d 411 (C.A.D.C.), held that a management decision to
subcontract work performed in an existing bargaining unit is a mandatory subject
of bargaining, notwithstanding an employer's valid economic reason for doing so and
the absence of discriminatory motive. To the same effect , see Town & Country Mfg.
Co., Inc., et al., 136 NLRB 1022, enfd. 316 F. 2d 846 (C.A. 5). Subcontracting
may have a more direct impact upon employees than, for example , even wages, vaca-
tions, and ordinary working conditions, for the very existence of employee jobs may,
and often does, turn thereon.
32 Examples of former "management prerogatives" may be found in Inland Steel Com-
pany, supra (compulsory retirement program) ; N.L.R.B. v. Lehigh Portland Cement Com-
pany, 205 F. 2d 821 (C A. 4) (company housing) ; N L.R B. v Niles-Bement Pond Company,
199 F. 2d 713 (C.A. 2) (Christmas bonus) ; Richfield Oil Corp v. N L R B., 231 F. 2d 717
(C A.D C.), Bert denied 351 U.S. 909 (stock purchase plan) ; N.L R.B. v. Westinghouse
Air Brake Co, 120 F. 2d 1004, 1006-1007 (CA. 3) (decisions relating to economic layoff)
National Licorice Company v N.L R.B., 309 U.S 350, 360 (discharges) ; N L.R.B. v
Jack Lewis, and Joe Leviton, d/b/a California Footwear Company d Trina Shoe, 246 F.
2d 886, 888-889 (C.A. 9) (transfers to other plants) ; N.L.R.B. v. Frank Mackneish, In-
dustrial Fabricating, Inc., et al., 272 F. 2d 184 (C.A. 6), enfg. 119 NLRB 162, 189-190
(sbid ).
PUERTO RICO TELEPHONE COMPANY 961
It goes without saying that in subcontracting , as in other mandatory bargaining
subjects, "the obligation to bargain is not an obligation to agree." Fibreboard, supra
at 415. All that the statute demand is that the employer give advance notice and
bargain in good faith before making commitments . This-and this alone-is the
extent of the statutory restriction on the employer's freedom of action. Where that
obligation had been satisfied, the employer may lawfully subcontract. As the Board
pointed out in Town & Country, supra at 1027:
... the duty to bargain about a decision to subcontract work does not impose an
undue and unfair burden upon the employer involved. This obligation to bar-
gain in nowise restrains an employer from formulating or effectuating an eco-
nomic decision to terminate a phase of his business operations. Nor does it
obligate him to yield to a union's demand that a subcontract not be let, or that
it be let on terms inconsistent with management 's business judgment. Experi-
ence has shown, however, that candid discussion of mutual problems by labor
and management frequently results in their resolution with attendant benefit to
both sides. Business operations may profitably continue and jobs may be pre-
served. Such prior discussion with a duly designated bargaining representative
is all that the Act contemplates ....33
In enforcing the Board's Fibreboard decision and rejecting the employer's claim
in that case that "its unilateral action was justified because it was motivated solely
by economic necessity," the court gave the same basic rationale for the need of
advance union-management consultation , stating (322 F. 2d at 414) :
The purpose of imposing legal duties upon employers to meet and bargain
with the representatives of employees is to create a structure of industrial self-
government for a particular plant arrived at by consensual agreement between
management and employees within the framework of the statute. See United
Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 580-81 . . . (1960).
By guaranteeing employee participation in decisions relating to wages, hours,
terms and conditions of employment, Congress made a determination that this
would create an environment conducive to industrial harmony and eliminate
costly industrial strife which interrupts commerce.
In short, the therapy of collective bargaining, prescribed by Congress as a means
for promoting industrial cooperation and peace, is as important in the area of sub-
contracting as in others fraught with potential strife.
I find and conclude that Respondent's decision to subcontract was not a manage-
ment prerogative outside the scope of mandatory bargaining.34
3. The impact of the subcontracts on the bargaining unit
Respondent urges that the subcontracting in this case falls outside the Fibreboard,
and Town & Country doctrine for a number of reasons, one of which is that the
subcontracts had "no effect at all on the union , the unit members, or the bargaining
unit ." 35 Respondent claims that the layoffs in this case resulted from "a manpower
study [which] revealed a substantial excess in its normal operations" and from the
"reorganization" that followed. It argues that to hold Respondent's conduct viola-
tive of the Act would be to hold that "the unilateral subcontracting of unit work" is
"per se a violation of the Act." General Counsel, on the other hand, contends that
the record establishes that the layoffs were attributable to the subcontracting and, in
any event , that unilateral subcontracting, without more, constitute a violation.
3s That advance consultation with the Union in this case would not have constituted a
burdensome , impractical , or unfair requirement is evidenced by Respondent 's own willing-
ness in February to obligate itself "to notify the Union before subcontracting, of its deci-
sion to do so," so that the Union might discuss and, presumably , bargain . As already
noted, a settlement incorporating such provision fell through because the Union sought
compensation for employees adversely affected by Respondent's past subcontracts, which
Respondent refused. Respondent thereafter reaffirmed , and in this proceeding still affirms,
its right to subcontract unilaterally.
34I am fully cognizant of the fact that N L.R B. v Adams Dairy, Inc, 322 F. 2d 553
(C.A 8), upon which Respondent relies, is in direct conflict with Fibreboard.
351n both Fibreboard and Town & Country the employers' subcontracting resulted in
the elimination of certain phases of the employers' operations and in curtailment of unit
work
770-076-65-vol. 149-62
962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
There may be merit to the contention that unilateral subcontracting is in itself a
violation because such action could inherently affect the size of the unit, the employ-
ees' opportunities for overtime work, and, indeed, the bargaining representative's
effectiveness in securing future contracts favorable to the employees 36 On the other
hand, situations may no doubt arise where, because of the pressing or emergency
character of work or for other reasons, it might be impracticable to require the
employer to give the union notice to bargain. I do not find it necessary to pass on
such an issue in this case, since I am satisfied that the record here amply supports
the finding that Respondent's subcontracts were not of such caliber, but at the same
time had a profound impact on the unit work and the unit employees.
The record shows that Respondent's expansion program had been under consid-
eration for a considerable period and that construction thereunder had been in
progress for at least 3 years. Certainly, the project was not of an emergency char-
acter precluding adequate notice to, and reasonable consultation with, the Union.
The record shows that Respondent had laid off some 227 unit employees over a
5-month period. These employees could, and did, perform tasks precisely the same
as the employees of the subcontractors, including telephone installation, splicing,
testing, etc. Employees who had formerly installed "new" telephones in areas of
subcontractors' operations ceased installing such telephones and were relegated exclu-
sively to "miscellaneous" tasks such as removal and transfer of existing telephones
and changing line cords. The compelling inference is that but for the subcontracting,
Respondent could and would have utilized some of the laid-off employees to perform
the work of the subcontractors' employees. Respondent had employed some of the
laid-off employees for considerable periods. The group included splicers who,
according to Vice President Neff, constituted a highly trained group of workmen. It
is quite true that the record fails to identify the specific employees affected by the
subcontracts, and it may be that some were separated for reasons unconnected to the
subcontracts, including "overstaffing." 37 But this is a matter determinable in com-
pliance proceedings and is no bar to a finding that at least some employees were laid
off either because they were deprived of work formerly performed by the unit, or
work to which they would have been assigned but for Respondent's subcontracting.
I so find.
Accordingly, I conclude that, contrary to Respondent's contention, the subcontracts
had a measurable impact on the unit work and unit employees.
4. The nature of the unit work and the subcontracting work
Respondent further contends that the instant case is distinguishable from Fibre-
board and Town & Country in that the subcontracts here did not involve work nor-
mally performed by employees in the bargaining unit. In support of this contention
Respondent claims that: (a) the contracted work entailed work under "an extraordi-
nary and unprecedented" expansion program normally subcontracted in the tele-
phone industry; and (b) this "fact" was recognized by the Regional Director himself
when, in certifying the Union, he expressly excluded from the bargaining unit part-
time and temporary employees who had worked on special projects in connection
with the expansion program.
The short answer to the latter contention is that the exclusion in the Decision and
Direction of Election to which Respondent refers covers temporary and part-time
employees of the Company and not those of subcontractors or third parties. Fur-
thermore, the exclusion of these Company employees from the unit rests on the
expectancy of their continued employment rather than on the nature of the tasks
performed.
As to Respondent's first contention, it is clear from the record that the Company's
expansion program, although huge and unprecedented, was from its very start envis-
aged as a long-term operation, requiring awards of numerous contracts over a 3- to
5-year period. In addition, as Respondent concedes, the operation required the
employment of workmen of the same job classifications as Respondent employs. In
my view, subcontracting work for such substantial periods of time, involving the
same skills as those of unit employees, does not remove such work from the realm
of normalcy, In any event, under the entire record I do not regard the time duration
81 Thus it has been observed that the availability of subcontracting tends "to give man-
agement the whip hand in bargaining," and to permit it to say "If you don't behave . . .
we'll go [to the subcontractor]." "Inside v. Outside," 65 Fortune 215 ( May 1962).
87 Respondent did not adduce evidence supporting Neff's conclusionary testimony con-
cerning the "overstaffing " There is no evidence that the particular laid-off employees
worked in an "overstaffed" department or unit-evidence peculiarly within Respondent's
possession.
PUERTO RICO TELEPHONE COMPANY 963
of such contracted work as determinative of whether the work was of the type ordi-
narily performed by employees in the unit. Finally, it seems to me that even if
Respondent's work was contracted out under an "extraordinary" situation, that would
explain only the occasion for its action, not the justification for bypassing the Union.
As the Supreme Court has stated, "effective collective bargaining has been generally
conceded to include the right of the representatives of the unit to be consulted to
bargain about the exceptional as well as the routine . . . working conditions." The
Order of Railroad Telegraphers v. Railway Express Company, Inc., 321 U.S. 342, 347.
5. The alleged waiver of the Union's right to bargain about subcontracting
Respondent stresses the claim that the November 8, 1962, contract gave to it the
unilateral right "to contract out work without prior consultation with the Union,"
in support of which it relies on various clauses in the contract (including the man-
agement-rights clause) and the negotiations leading up to the contract. The burden
of Respondent's argument appears to be that the Union waived its right to consul-
tation and bargaining over subcontracting by reason of its conduct in the negotiations
prior to the contract as well as by the terms of the contract itself.
It is quite true that a union may relinquish or waive a statutory right, such as
the right here involved to be consulted on a bargainable subject. However, the law
is settled that the waiver must be clear and unmistakable and will not readily be
implied. Armstrong Cork Company v. N.L.R.B., 211 F. 2d 843, 848 (C.A. 5);
The Timken Roller Bearing Co. v. N.L.R.B., 325 F. 2d 746 (C.A. 6). Even past
failure by a union to assert a statutory right does not estop subsequent assertion.
N.L.R.B. v. Southeastern Rubber Mfg. Co., Inc., 213 F. 2d 11, 15 (C.A. 5); Pacific
Coast Association of Pulp and Paper Manufacturers v. N.L.R.B., 304 F. 2d 760,
763-765 (C.A. 9).
Tested by these criteria, I find that the Union did not waive its right to be con-
sulted before Respondent let its subcontracts. Subcontracting was a matter of grave
concern to the Union which, as it had informed Respondent, it deemed to be a threat
to the job security of the employees in the unit. The matter continued to be a burning
issue even after the signing of the contract. As we have seen , during the negotia-
tions the Union presented two separate proposals designed to limit Respondent's
right to subcontract. In its letter of June 8, 1962, the Union expressly complained
to Respondent that the subcontracting "is directly harming the employees." During
the September 15 meeting, two members of the Union's negotiating committee again
protested to Respondent what they regarded to be the adverse effects of the sub-
contracts on employment. At the next meeting, September 18, the Union's attorney
further made it clear that the Union was relying on the Board's Fibreboard and
Town & Country decisions insofar as the Union's right to consultation was con-
cerned. Respondent consistently rejected the Union's attempts to restrict its right
to subcontract, assuring the Union *at the same time that the subcontracts would not
affect the jobs of the employees. At Respondent's request, further discussion of the
matter was deferred until the last bargaining session on October 24 and 25. At the
end of that session, two disputed clauses remained on the agenda-the Company's
proposed union-security clause and the Union's subcontracting clause. Respondent
ultimately withdrew the union-security clause and a contract was agreed upon exclud-
ing both clauses38
Thus, the record does not support a finding that the Union's conduct in the nego-
tiations amounted to an unequivocal waiver of its statutory right to bargain on sub-
contracting. I cannot accept Respondent's contention that the Union in the final
bargaining session gave up its subcontracting clause in "exchange" for the Company's
withdrawal of the union responsibility clause or any other clause.39 Certainly, the
'Although Gonzalez Monclova, the company representative, testified on direct examina-
tion that both clauses were withdrawn, on cross-examination he could not recall anything
that was said about the Union withdrawing its subcontracting clause. He also con-
ceded that while the minutes of the last meeting (which he prepared for the Company and
inspected at the hearing) expressly recited that the Company had withdrawn the union-
security clause, nothing contained therein indicated that the Union withdrew its sub-
contracting clause.
9 In this connection Respondent points out that the Company had agreed to the modi-
fication of its original management prerogative proposal. The modification (to the effect
that the Company would use such clause for economic and not discriminatory purposes) is
merely a restatement of Respondent's obligation under law and it is hard to believe that
the Union would have accepted this modification as a quid pro quo for the alleged waiver
964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union did not "knowingly" waive its right to bargain on subcontracting . N.L.R.B. v.
Gulf Atlantic Warehouse Company, 291 F. 2d 475, 477 (C.A. 5). Considering all
of the circumstances , including the Company 's assurances during the negotiations
that subcontracting would not affect the unit and the further fact that no layoffs actu-
ally took place until after the signing of the contract , the reasonable reference is,
and International Representative Sanchez so testified , that the Union had decided
to go along with a contract without a subcontracting clause, relying on the advice of
its counsel that the "decisions by the National Labor Relations Board ... would
offer protection to the workers as far as subcontracting goes. " Cf. N.L.R B v. The
Item Co., 220 F. 2d 956, 958-959 (C.A. 5).
Nor can I accept Respondent's contention that the various clauses in the contract,
considered either separately or collectively , accorded it the right to subcontract uni-
laterally. Under the management-prerogative clause, upon which Respondent relies,
the Company reserved control over certain matters, except as expressly limited by
the terms of the agreement . 40 Under the "labor relations" clause (article IV), on
which Respondent also relies , the parties acknowledged that they had "unlimited"
opportunity to negotiate , that all their "decisions and covenants" appear in the con-
tract , and that the working conditions set forth in the contract would be the only
ones governing the relations between the parties . Other clauses cited by Respondent
include those relating to seniority ( article XX), which deals with the computation of
seniority and its applicability in promotions and layoffs; grievance , which , as we have
seen , defines grievances and prescribes the method for processing same; and strikes
and lockouts ( article X1I), under which the Union agreed to utilize the grievance
procedure rather than resort to strikes. None of these clauses make specific refer-
ence to subcontracting, and practically all (certainly the more relevant , dealing with
management prerogatives and labor relations ) were embodied in substantially simi-
lar language in the antecedent 1959 contract before the subcontracting issue arose.
It seems to me that a showing of surrender by the Union of its all-important statutory
right to bargain over subcontracting has to be established by plain and unequivocal
expression , rather than a meaning to be inferred from a juxtaposition of discrete
clauses. The "general philosophy of the Act and the general desirability of joint
participation and responsibility suggest that any . . . reservation of power [i . e., uni-
lateral action on a mandatory bargaining subject ] must be clearly described and
delimited in the contract." N L R B. v. Otis Elevator Co., 208 F. 2d 176, 178-179
(C.A. 2). "Silence in the bargaining agreement on such issue does not meet the
test." The Timken Roller Bearing Co. v. N.L.R.B., 325 F. 2d 746 (C.A. 6).
Accordingly , I conclude that neither the terms of the contract nor the negotiations
leading thereto, support Respondent 's contention that the Union agreed to, or acqui-
esced in, unilateral subcontracting by Respondent . At best the matter was left unre-
solved and the Union's right to consultation over it remained unimpaired.
6. Respondent 's contention that it satisfied its duty to bargain
Finally, Respondent contends that although it was not obligated to do so, it notified
the Union of its subcontracting and the layoffs and thus provided the Union with
opportunity to meet and bargain thereon.
As to subcontracting , Respondent stipulated at the hearing that it never gave the
Union notice of any specific subcontracting decision . It is likewise clear, and I find,
that Respondent never consulted the Union on implementing any unilateral decision to
subcontract and that Respondent entered into all subcontracts herein involved with-
out prior notice to the Union . While Respondent from time to time met with the
Union to receive the latter 's protests of the Company's actions, it maintained its posi-
tion that it had the unilateral right to subcontract and that it would continue to do so
in order to complete its expansion program . Here, as in Fibreboard, supra, "This
position was consistent with the Company 's belief that contracting out was exclu-
sively a `management prerogative ' about which it could take unilateral action with-
"This clause ( article IV ), entitled "Rights Reserved to the Employer ," states: "Ex-
cept as expressly limited by the terms of this Agreement , the Company retains and shall
retain sole control over all matters concerning the operation, management and administra-
tion of its business , including , but without this being construed as a limitation , the ad-
ministration and management of its departments and operations , the organization and
methods of work , the assignment of working hours, the direction of the personnel, the
right to hire, reclassify , transfer , discipline , suspend, separate or pension employees, and
all functions inherent in the administration and/or management of the business. The
above mentioned rights shall be used for,economic and administrative purposes and not to
discriminate against the Union or any of its members."
PUERTO RICO TELEPHONE COMPANY 965
out first bargaining to impasse with the Union." (322 F. 2d at 413). And here, as
there, the Company's action constituted a refusal to bargain. Clearly, talking about
a decision after it is a fait accompli, is not the same as bargaining about it. Town &
Country Mfg. Co., 136 NLRB 1022, 1030, enfd. 316 F. 2d 846 (C.A. 5); Robert S.
Abbott Publishing Company, 139 NLRB 1328, 1329.
Having found that Respondent's decision to contract out work and its action in
thereafter contracting out the work were unlawful, it follows that the layoffs of the
unit employees resulting from this unlawful conduct were likewise unlawful. I can-
not accept Respondent's contention that its unlawful action respecting subcontracting
was "cured" by subsequent notification to and discussion with the Union concerning
the layoffs 41 To begin with, the discussions took place after the shrinkage of work
opportunities had already occurred as a result of the unilateral subcontracting.
Thus, the layoff discussions were necessarily limited to exploration of possible means
of minimizing the impact of the earlier unlawful action-an exploration which proved
abortive. While absence of such later discussions might have compounded the ear-
lier unlawful conduct, the mere fact that the parties saw fit to talk about the subject
did not operate to erase the prior illegality. In addition, it is noteworthy that the
discussions took place after Respondent had already made its decision and was con-
tractually committed to third parties under the subcontracts; hence, the practical
utility of discussions under these circumstances is open to serious question. See
Town & Country Mfg. Co., supra, at 1030. Cf. The Stilley Plywood Company, Inc.,
94 NLRB 932, 969, enfd. 199 F. 2d 319 (C.A. 4); N.L.R.B. v. Westinghouse Air
Brake Co., 120 F. 2d 1004, 1006-1007 (C.A. 3).
Accordingly, I reject Respondent's contention that its conduct respecting the lay-
offs operated to "cure" its prior illegal conduct respecting the subcontracting, as well
as its other contentions that the Union had waived its right to bargain about the sub-
contracting, that the subcontracting did not involve unit work and had no impact on
the bargaining unit, and that its subcontracting , in any event , was a management
prerogative outside the scope of mandatory bargaining.
B. The refusal to submit information
1. As we have seen, throughout the period here involved the Union protested
Respondent's unilateral subcontracting and contended that the layoffs had resulted
therefrom. The Company took the position that subcontracting was a management
prerogative, that the labor contract accorded it this prerogative, and that, in any
event, the layoffs resulted from an economic reorganization for economy reasons and
not from subcontracting. The parties met on several occasions in November 1962
at formal and informal grievance meetings to discuss the layoffs, and again in Feb-
ruary 1963 to discuss Respondent's right to subcontract generally. They met again
between March 9 and 18, 1963, to discuss the layoff of March 8, first at general and
then at grievance committee sessions . In the course of these meetings , the Union
requested Respondent "to prove" its contention that the layoffs were due to "eco-
nomic reorganization ," requesting data to support the Company 's allegations of
"economy" and savings allegedly resulting therefrom. The requested data covered
such matters as volume of business and earnings during specified periods, wage sav-
ings, and information as to who was performing the work of the terminated employ-
ees. Respondent refused to submit any of the requested information and the Union
thereupon sought to invoke the next step in the grievance procedure after grievance
committee meetings, namely, the intervention of a conciliator. When Respondent
failed to go along with this step , the Union proposed to submit the following two
matters to arbitration, the last step in the grievance procedure: (a) whether the
intervention of a conciliator may be invoked by one of the parties without the con-
sent of the other; and (b) whether Respondent was duty bound to support its claim
that the layoffs were effected for economy reasons. Respondent refused to go along
41 As already noted, Respondent 's industrial director, Orellana , testified that although
the Company did not feel obligated to give any layoff notice, it did do so "out of courtesy."
Orellana indicated that after management made its decision to effect a layoff, he verbally
communicated this decision to the Union , giving it the number in "round figures " but not
disclosing the identity of the individuals or job classifications affected since he himself
did not have the information. According to Orellana's own testimony, the Union re-
ceived not more than 1-day notice between announcement of the decision and the actual
layoff on November 16. No notice whatsoever was given regarding the November 9 layoff.
Subsequent to the layoffs the parties discussed the Union's protests both in and outside of
grievance meetings. At the end of one such meeting Respondent agreed to and did recall
several employees, who were then again laid off.
966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
with this procedure also, taking the position that the Union had not presented a
"grievance alleging the violation of the contract "; and that it was under no obliga-
tion to prove "economy" because the management -rights and seniority clauses of the
contract vested in the Company the right to terminate personnel.
Respondent 's position in this proceeding , as asserted in its brief (pp. 17-18 , 33-36),
appears to be that it was not legally bound to furnish the requested information
because: ( a) the Union had not "exhausted the administrative remedies" provided in
the contract , i.e., it proceeded to submit issues to conciliation and arbitration before
full consideration thereof by the grievance committee ; ( b) the information was
requested not to prove a violation of the contract 42 but "to put at issue ... Whether or
not the decision of Respondent to lay off had been economically sound"; and (c) the
dispute between the parties involves an "interpretation of a collective -bargaining con-
tract"-i .e., whether Respondent 's decision to lay off was a "management prerogative"
-which is a matter to be decided not by the Board in an unfair labor practice proceed-
ing but by the parties through the contractual grievance piocedure.
2. It is settled law that an employer is obligated to furnish information requested
by the statutory representative of its employees if such information is relevant to a
grievance or is otherwise needed by the Union to carry out its statutory role as bar-
gaining agent , including the administration of the bargaining agreement . Boston-
Herald Traveler Corporation , v. N.L.R.B, 223 F. 2d 58 (C.A. 1); J. I. Case Com-
pany v. NL.R.B., 253 F. 2d 149, 152-153 (C.A. 7). The scope of the information
to be made available for such purpose is necessarily broad-it "must be disclosed
unless it plainly appears irrelevant ." N.L.R B. v. Yaivman & Erbe Manufacturing
Co , 187 F. 2d 947, 949 (C.A. 2); Boston -Herald Traveler Corporation , supra.
3. Respondent does not appear to dispute the fact that the information requested
by the Union was relevant to the issue-raised both genei ally and in connection with
the processing of the grievance-as to whether the layoffs were the result of an
"economy" drive or the subcontracting . I find that the requested information was
relevant in order to enable the Union to evaluate intelligently the pending grievance
it was then attempting to process . Respondent 's claimed economy having been
advanced as an "argument ... important enough to present in the give and take of
bargaining , it is important enough to require some sort of proof of its accuracy."
N L.R.B . v. Truitt Mfg. Co., 351 U.S. 149, 152-153.
I further find that the requested information was also relevant in order to enable
the Union to perform its statutory obligation in administering the bargaining contract.
As we have seen, Respondent and the Union have had a running dispute about the
cause of the layoffs ever since the first layoffs of November 9, 1962 . With the
March 8 layoff , a total of 170 unit employees had been laid off. Obviously , with the
requested information in its hands, the Union could in future layoffs, as well as in
the pending layoff, be "in a better position to advise an employee about his rights, to
reject those employee claims which are not supported by the facts , and to protect the
rights of employees generally in properly administering the contact ." The Timken
Roller Bearing Co. v. N .L.R.B., 325 F . 2d 746 ,753 (C.A. 6).
Respondent's basic position is that the requested information was irrelevant because
it "put at issue" a decision which it regarded to be a management prerogative under
the bargaining contract ; and that the information did not pertain to a contract viola-
tion , the only matter grievabce under the contract . However, this contention-as
well as its additional contention that the Union had invoked conciliation and arbitra-
tion prematurely and in violation of the terms of the grievance clause 43-rests on
the erroneous assumption that the Union 's right to the information turns solely on
the terms of the contract . It is apparent that the Union 's right to the information
42As already noted , the contract defines a grievance as an "allegation made by one or
more employees of a violation or violations of the contractual provisions established in
this Agreement."
43 In view of the disposition herein made regarding the refusal to furnish information
issue, I do not regard it essential to pass upon this contention. In any event, I find that
the Union had fully complied with the grievance procedure in seeking the intervention of
a conciliator and then arbitration. The undisputed evidence shows that the parties had
met at grievance committee meetings on at least three occasions , and before then for gen-
eral discussions on three other occasions, to consider the March 8 layoff. Respondent
throughout adhered to the position that the layoffs of the individuals involved were the
result of economy measures and had nothing to do with subcontracting . When requested
to submit data to establish its position, Respondent refused to do so. At this juncture the
Union's only alternative, if it were to seek redress under the contractual grievance pro-
cedure, was to invoke the next succeeding steps, namely the assistance of a conciliator
and then arbitration.
PUERTO RICO TELEPHONE COMPANY 967
exists apart from any contractual provisions-in order to carry out its statutory
obligation adequately to represent the unit employees laid off by Respondent in con-
nection with the subcontracting. As in Timken Roller Bearing Co., supra, at 751,
"the Union's right to [the] information it needed to administer the bargaining agree-
ment was a right which it had under Section 8 (d) of the [Act], and the existence of
this right was not dependent upon it being included in the bargaining agreement. It
was not a right obtained by contract, such as would be the case in increased wages,
longer vacations, pension rights, and certain so-called fringe benefits. The failure
to have the right recognized by the Company in the bargaining agreement, which
would probably eliminate the necessity of possible litigation over it later, does not
mean that it does not exist by virtue of the statute." 44
4. It is true that the Board has frequently in the past declined to exercise juris-
diction where a dispute had been, or could have been, submitted to arbitration under
the parties' bargaining contract.45 The Board's declination of jurisdiction in these
cases was purely discretionary, since Section 10(a) of the Act expressly provides that
the Board's jurisdiction "shall not be affected by any other means of adjustment or
prevention that has been established ... by agreement, law or otherwise...." Carey,
Inc. v. Westinghouse Electric Corp., 375 U.S. 261, 269. In any event, the cases in
which the Board has given "hospitable acceptance" to the arbitral processes are those
in which the disputed rights turned on the interpretation of contract terms, had been
submitted to arbitration or could have been submitted to arbitration, and both parties
were willing to utilize binding arbitration to settle the dispute 46 In the instant case,
the very fact that Respondent resisted arbitration and, as the Union's proposed sub-
mission to arbitration indicates, there existed a question as to whether either party
could unilaterally invoke the step preceding arbitration (intervention of a conciliator),
militates against deferral of the dispute by the Board to arbitration. In addition, as
already pointed out, the Union's right to the information here turns not on contract
construction but on the statute As in Timken Roller Bearing, supra, at 752, "Whether
the demand of the Union should be honored, accordingly, does not involve the inter-
pretation or application of the agreement, which is necessary in order to be eligible
for arbitration, but, on the contrary, involves the interpretation and application of
the National Labor Relations Act." 47 See also California Portland Cement Com-
pany, 101 NLRB 1436, 1439.
5. In my view, the considerations just referred to distinguish Hercules Motor
Corporation, 136 NLRB 1648, and Sinclair Refining Company v. N L.R.B., 306 F.
2d 569 (C.A. 5), relied on by Respondent. Unlike here, both of those cases turned
on the circumstance that the dispute involved solely an interpretation of the contract
which both parties were willing to resolve expeditiously by arbitration under a con-
" In its brief Respondent does not specifically claim that the Union waived its right to
the requested information by the terms of the contract. If such claim, however, is im-
plicit from its position that the management-prerogative clause gave it unrestricted
freedom to act unilaterally respecting subcontracting and layoffs , I reject it on the ground,
already noted ( in connection with my analysis and discussion under section A, 5, supra)
that a waiver of a statutory right, to be effective , must be clear and unmistakable and is
not readily to be implied.
15 See Consolidated Aircraft Corporation, 47 NLRB 694, 705-706 ; United Telephone
Company, et at., 112 NLRB 779, 781-782 ; Hercules Motor Corporation, 136 NLRB 1648.
sa Ibid Even in such situations the Board will not give effect to an arbitrator 's award
"which is at odds with the statute ," Mon8anto Chemical Company, 97 NLRB 517, 520,
enfd . 205 F. 2d 763 (C.A. 8). " Should the Board disagree with the arbiter . . the
Board 's ruling would, of course , take precedence . . , Carey v. Westinghouse Electric
Corp., supra, at 272.
47 In Timken Roller Bearing v . N.L.R.B , supra, at 751, 752, the court upheld the Board's
finding that the Company had unlawfully refused to bargain by refusing to submit wage
data sought in connection with the processing of a grievance and the administration of
the contract . Under the contract , the Company was given "discretion" to establish new
rates under certain circumstances . The Union protested the rates set up by the employer
as unfair and improperly established , and it filed a grievance in the course of which it
requested information . It later filed unfair labor practice charges after the employer's re-
fusal to supply the information . There, as here, the Company contended that the Union
merely raised a question of contract interpretation disposable under the grievance-
arbitration clause The court rejected this contention despite the fact, which it specifi-
cally noted , that the contract expressly stipulated that he grievance-arbitration machinery
provided "adequate means" for the adjustment and disposition of "any complaints or
grievances" ; and that the employer was willing to submit the matter to arbitration and
comply with the arbitrator ' s ruling.
968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tractual grievance-arbitration provision which was clear and unambiguous See
Timken Roller Bearing, supra, at 753; Sinclair Refining Company, 145 NLRB 732.
Moreover, as the Board explained in the latter case (the most recent one on the
subject), in commenting upon its prior Hercules and Timken Roller decisions,
"Hercules did not hold that every request for information in the context of a dispute
over the meaning of a contract provision may only be disposed of under the grievance-
arbitration process established by the contract. The existence or utilization of a
grievance-arbitration clause does not relieve an employer of its duty to furnish a
union with information needed to perform its statutory functions. Indeed, Timken
specifically distinguishes Hercules in pointing out that the respondent in Timken had
not met its bargaining obligation when it denied information which was relevant to
the union's responsibility in 'policing or administering a contract, or adjusting a
grievance.' " 48
For all of the foregoing reasons, I find that and conclude that Respondent's failure
and refusal to make available the information requested by the Union, in connection
with the processing of its grievance and for the purpose of administering the bar-
gaining contract, constitutes a refusal to bargain in violation of Section 8(a)(5) and
(1) of the Act.
IV THE REMEDY
Pursuant to Section 10(c) of the Act, I shall recommend that the Respondent
cease and desist from engaging in the unfair labor practices found and from like and
related conduct.
As for affirmative relief, it appears, as I have found, that Respondent's unilateral
subcontracting was not motivated discriminatorily, but solely by economic considera-
tions. It also appears that the subcontracts were let under an expansion program
directed by the Public Service Commission of Puerto Rico, in order to improve and
expand the telephone service in the Commonwealth. It further appears that most,
if not all, of the subcontracts have already been completed and that it will serve no
useful purpose to require Respondent to cancel the subcontracts, if any, that are still
uncompleted, even though they were entered into without prior consultation with the
Union. I shall, however, recommend that Respondent cease and desist from uni-
laterally entering into such contracts in the future and that it bargain with the Union
concerning the effects upon the unit employees of its past unlawful conduct, i.e., the
subcontracts unilaterally entered into under which unit work was performed during
the complaint period, November 9, 1962, to March 31, 1963. I shall further recom-
mend that Respondent offer immediate reinstatement and make whole those unit
employees laid off as a result of Respondent's unlawful actions. Cf. Fibreboard
Paper Products Corporation, 138 NLRB 550, 555, enfd. sub nom. East Bay Union
of Machinists, Local 1304, etc., 322 F. 2d 411 (C.A.D.C.).49 As has already been
noted (section A, 3, supra), the record does not identify the specific employees
affected by the subcontracting, and it may be that the layoffs of some of the 227 unit
employees was unrelated to the letting of the contracts. This is a matter that may
be determined in the compliance proceeding.
Since I have also found that Respondent has unlawfully refused to furnish the
Union relevant information in support of its position, in the grievance negotiations
and other discussions, that the layoffs were effected for purposes of economy and
not as a result of the subcontracting, I shall recommend that Respondent furnish the
Union with such information and data as will tend to substantiate its claim and will
enable the Union to discharge its function as statutory representative of Respondent's
employees. This is not to say that Respondent must furnish the Union the informa-
tion in the precise form and manner requested by the Union, so long as the informa-
tion submitted will enable the Union to evaluate Respondent's position and thereby
discharge its statutory duty. See The Cincinnati Steel Castings Company, 86 NLRB
592, 593; The Ingalls Shipbuilding Corporation, 143 NLRB 712.
4s Compare Hekman Furniture Company, 101 NLRB 631, 632, enfd. 207 F. 2d 561
(C.A. 6), wherein the Board stated that "'the collective bargaining requirement of the
Act' is not satisfied by a substitution of 'the grievance procedure of the contract for [the
employer's] obligation to furnish the Union with information it needed to perform Its
statutory functions' " See also Leland-Gifford Company, 95 NLRB 1306, 1322, enfd. 200
F. 2d 620, 624 (C.A. 1) ; J. I. Case Company v. N.L.RB., 253 F. 2d 149, 154 (C.A 7).
4e In accordance with usual requirements, reinstatement shall be to the employees'
former or substantially equivalent positions, without prejudice to their seniority and other
rights and privileges, with backpay from the dates of their layoffs to the date of Respond-
ent's offer of reemployment, less net earnings during said period Backpay shall be com-
puted in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB
289, with interest thereon as specified in Isis Plumbing & Heating Co., 138 NLRB 716.
PUERTO RICO TELEPHONE COMPANY 969
CONCLUSIONS OF LAW
Respondent has engaged and is engaging in unfair labor practices within the mean-
ing of Section 8(a) (5) and (1) and Section 2(6) and (7) of the Act by the following
conduct: (1) by unilaterally subcontracting work performed by employees in the
bargaining unit, without advance notice to the Union and without affording it an
opportunity to bargain respecting the subcontracting; and (2) by refusing to furnish
the Union relevant information in support of its position, during the grievance nego-
tiations and other discussions, that the layoffs resulted from an economy drive and
not from subcontracting.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law, and upon
the entire record in the case, I recommend that Respondent, Puerto Rico Telephone
Company, its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Unilaterally contracting out work of the nature performed by employees in
the bargain unit, without prior notice to, and opportunity for negotiation with,
Sindicato de Trabajadores Packinghouse, United Packinghouse, Food & Allied Work-
ers, District 9 of Puerto Rico, AFL-CIO, and its affiliate Union de Empleados de la
Industria del Telefono de Puerto Rico, Local 963, or any other union selected as the
exclusive representative of the employees in the appropriate bargaining unit. The
appropriate bargaining unit consists of:
All nonsupervisory employees of Respondent, including all regular employees,
probationary employees, messengers, and mail clerks, but excluding all executives,
company officers, department heads, division heads, zone supervisors, section heads,
district and geographical subdivision heads; foremen; secretaries to company officers,
executives, and department heads; all employees of industrial relations department
except messengers and mailclerks, directory salesmen; commission salesmen; all
professional and technical employees; all guards and supervisors as defined in the Act.
(b) Refusing, upon request, to furnish the above-named Unions with such infor-
mation and data as will, or as may tend to, substantiate Respondent's position respect-
ing the cause of the March 8, 1963, layoff.
(c) In any like or related manner interfering with the efforts of the above-named
Unions, to bargain collectively with Respondent on behalf of employees in the appro-
priate unit.
2. Take the following affirmative action which is necessary to effectuate the policies
of the Act:
(a) Upon request, bargain collectively with the above-named Unions as exclusive
bargaining representative of its employees in the appropriate unit, with respect to
the contracting out of work of the nature performed by employees in the appropriate
unit.
(b) Upon request, bargain collectively with the above-named Unions as the
exclusive bargaining representative of its employees in the appropriate unit, con-
cerning the effects of the subcontracting heretofore unilaterally entered into by
Respondent under which unit work was performed during the period November 9,
1962, through March 31, 1963.
(c) Offer those employees laid off as a result of Respondent's unlawful action
immediate and full reinstatement and make them whole, in the manner set forth in
the section of this decision entitled, "The Remedy."
(d) Upon request, furnish the above-named Unions with such information and
data as will, or as may tend to, substantiate Respondent's position respecting the
cause of the March 8, 1963, layoff.
(e) Preserve and, upon request, make available to the Board and its agents, for
examination and copying, all payroll records, social security payment records, time-
cards, personnel records and reports, and all other records necessary or useful to deter-
mine the rights of reinstatement and the amounts of backpay due under the terms
of this Recommended Order.
(f) Post at its main office and central offices wherein (or under whose direction)
employees in the appropriate unit are employed, copies of the attached notice marked
"Appendix." 50 Copies of said notice, to be furnished by the Regional Director for
"In the event that this Recommended Order shall be adopted. by the Board the words
"a Decision and Order" shall be substituted for the words "the Recommended Order of a
Trial Examiner" in the notice. In the further event that the Board's Order be enforced
by a decree of a United States Court of Appeals, the words "a Decree of the United States
Court of Appeals, Enforcing an Order" shall be substituted for the words "a Decision and
Order."
970 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Region 24, shall, after being duly signed by the Respondent, be posted by Respondent
immediately upon receipt thereof and maintained by it for 60 consecutive days there-
after in conspicuous places where notices are customarily posted. Reasonable steps
shall be taken by Respondent to insure that said notice is not altered, defaced, or
covered by any other material.
(g) Notify the Regional Director for Region 24, in writing, within 20 days from
the date of the receipt of this Decision and Recommend Order, what steps Respondent
has taken to comply herewith.51
u In the event that this Recommended Order is adopted by the Board, this provision
shall be modified to read: " ,Notify said Regional Director , in writing, within 10 days from
the date of this Order, what steps the Respondent has taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
We WILL NOT contract out work of the nature performed by employees in the
bargaining unit without first giving Sindicato de Trabajadores, Packingnouse,
United Packinghouse Food & Allied Workers, District 9 of Puerto Rico, AFL-
CIO, and its affiliate Union de Empleados de la Industria del Telefono de
Puerto Rico, Local 963, notice of our intention to contract out such work and
an opportunity to bargain over it.
WE WILL, upon request, hereafter bargain with the above-named unions before
contracting out such work.
WE WILL, upon request, bargain with the above-named unions about the effects
of the unit work we heretofore contracted out.
WE WILL offer those employees laid off as a result of contracting unit work
during the period November 9, 1962, to March 31, 1963, reinstatement to their
former or substantially equivalent positions, without prejudice to their seniority
or other rights and privileges, and we will make them whole for any loss of pay
suffered as a result of their layoff.
WE WILL, upon request, furnish the above-named unions with such informa-
tion and data as will, or as may tend to , substantiate our position respecting the
cause of a layoff.
PUERTO Rico TELEPHONE COMPANY,
Employer.
Dated------------------- By------------------------------------------
(Representative ) (Title)
NoTE.--We will notify the employees, entitled to reinstatement, if presently serv-
ing in the Armed Forces of the United States of their right to full reinstatement upon
application in accordance with the Selective Service Act and the Universal Military
Training and Service Act of 1948, as amended, after discharge from the Armed Forces.
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, P.O. Box
11007, Fernandez Juncos Station, Santurce, Puerto Rico, Telephone No. 724-7171,
if they have any questions concerning this notice or compliance with its provisions.
International Union of Operating Engineers , Local No. 9, AFL-
CIO [Morrison-Knudsen] and Fred Wisecup . Case No. 97-CB-
t51. November 20, 1964
DECISION AND ORDER
On July 30, 1964, Trial Examiner Henry S. Salim issued his Deci-
sion in the above-entitled proceeding, finding that Respondent had
149 NLRB No. 90.