Sargent-Welch Scientific Co.

National Labor Relations Board - Board Decisions

Jan 30, 1974

208 N.L.R.B. 811 (N.L.R.B. 1974)

SARGENT-WELCH SCIENTIFIC CO.
Sargent-Welch Scientific Company and Local 325,
United Paperworkers Interuaadonal Union,
AFL--CIO.1 Case 13-CA-11645
January 30, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
KENNEDY AND PENELLO
On March 30, 1973, Administrative Law Judge
Sidney Sherman issued the attached Decision in this
proceeding. Thereafter, General Counsel and the
Charging Party filed exceptions and- supporting
briefs. Respondent filed cross-exceptions and a
supporting brief to which the Charging Party filed an
answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge
and to adopt his recommended Order.2
Members Kennedy and Penello agree that the
record does not establish that Respondent was
motivated by antiunion considerations in the lockout
of its employees. Prior to the lockout, Respondent
had agreed to include a union-shop provision in the
new agreement which preserved the Union's majority
status. In their view, the lockout here was in support
of Respondent's legitimate bargaining position and
did not violate the Act. American Ship Building Co. v.
N.L.R.B., 380 U.S. 300 (1965). They also agree that
the utilization of temporary replacements during the
lockout was lawful. N.L.R.B. v. Brown, 380 U.S. 278
(1965). Their affirming the disposition of this case by
the Administrative Law Judge should not be con-
strued as a modification of the views expressed by
Members Kennedy and Penello in Ottawa Silica
Company, 197 NLRB 449,enfd. 482 F.2d 945 (C.A. 6,
1973), nor an adoption of all of the summaries of
Board precedent discussed in the Administrative
Law Judge's Decision. Chairman Miller's affirmation
of the findings and conclusions of the Administrative
Law Judge requires, in his view, no qualification or
further explication.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
811
hereby orders that the Respondent, Sargent-Welch
Scientific Company, Skokie, Illinois, its officers,
agents, successors , and assigns, shall take the action
set forth in the said recommended Order.
I The dame of the Charging Party appears as amended at the heating.
2 The Charging Party's request for oral argument is hereby denied, as the
record, the exceptions, and the briefs adequately present the issues and the
positions of the parties.
DECISION
SIDNEY SHERMAN, Administrative Law Judge: The
instant charge was served on July 5, 1972,1 the complaint
issued on August 25 and the case was heard from
November 13 to 17. After the hearing, briefs were
submitted by all parties. The issues litigated concerned
alleged violations of Section 8(aXl), (3), and (5) of the Act
stemming from Respondent 's action in locking out its
employees and hiring temporary replacements.
Upon the entire record,2 including observation of the
witnesses' demeanor, the following findings and recom-
mendations are made:
1. RESPONDENT'S OPERATIONS
Sargent-Welch Scientific Company, herein called Res-
pondent, is a corporation under Illinois law, and is engaged
at Skokie, Illinois, in the manufacture and distribution of
scientific instruments and educational materials . It annual-
ly ships from that plant to out-of-state points goods valued
at more than $500,000. Respondent is engaged in com-
merce within the meaning of the Act.
II. THE UNION
Local 325, United Paperworkers International Union,
AFLlO,3 hereinafter called the Union, is a labor
organization under the Act.
III. THE MERITS
The pleadings, as amended, raise the following issues:
1. Whether Respondent violated Section 8(aX3) and (1)
of the Act by the following conduct:
(a) Locking out its employees on July 3?
(b) Hiring and using replacements for such employees
during the lockout?
(c) Terminating its contributions. to premiums for group
health insurance covering such employees during the
lockout?
2. Whether Respondent violated Section 8(a)(l) and (5)
by the following:
(a) Denying the locked out employees holiday and
vacation pay that accrued during the lockout?
I All dates hereinafter are in 1972, unless otherwise indicated.
2 For corrections of the record and various rulings on evidence , see the
order of March 8, 1973. There is hereby received in evidence as Joint Exh.
17, a stipulation submitted after the hearing.
3 The name of the Charging Party appears as amended at the hearing.
208 NLRB No. 125
812 DECISIONS OFNATIONAL LABOR RELATIONS BOARD
(b)-Unilaterally instituting certain changes in working
conditions on or about September 12?4
A. Sequence of Events
Respondent operates a number of plants throughout the
United States , which manufacture and distribute products
used in the fields of science and education , the plant here
involved at Skokie, Illinois, being the only one that serves,
elementary and secondary schools. At that plant Respon-
dent makes about 25 percent of the products it ships, the
balance being obtained from suppliers. The busy season
runs from Mid-June to the end of September , and picks up
again during the last 2 weeks in October . The normal plant
complement consists of about 445 employees , who. have
been represented by the Union.for over 35 years.
Throughout,that period Respondent and the Union have
had contractual relations. Their latest contract, concluded
after a 2-week strike,.was in effect from July 1, 1970, to
June 30, 1972. That contract provided, inter alia that,
absent 60-day .notice of termination , it would continue
from year to year, and that, upon expiration of the contract
without a new one having been negotiated, it would remain
in effect pending negotiations for a new contract until (a)
either such a new contract was agreed upon or (b) either
party terminated the negotiations by serving a written
notice on the other. The contract provides further as
follows:
After serving such written notice there shall be no
strike or lockout during the following period of
seventy-two (72) hours in order to give both parties
time to reconsider their decision.
Such notice is hereinafter referred to as the "72-hour
notice."
Negotiations for a new agreement, begun on May 23,
were still pending at the time of the instant hearing. At the
May 23 meeting the Union presented its contract propos-
als, which called for extensive changes, including a 40-cent
per hour raise and a 1-year term. At subsequent meetings
in June Respondent presented a number of proposals on
noneconomic issues, reserving its economic proposals until
the June 30 meeting, when it offered a 15-cent-per-hour
increase for each year of a 3-year contract plus certain
improvements in insurance and pension benefits and in
holidays.
Also, at this meeting Respondent proposed a 3-month
extension of the existing contract with retroactivity of any
wage increases negotiated in the interim, but before the
Union could reply to this offer Respondent served it with a
72-hour notice, which, as noted above, had the effect of
terminating the existing contract after 3 days. In further
negotiations on June 30 and July 3, the parties were unable
to resolve their differences over the terms of a final
contract or of an interim contract. Finally, on July 3,
Respondent announced that a lockout would begin that
4 Insofar as there is a variance between the complaint and the General
Counsel's posthearing brief as to which Sections of the Act were allegedly
violated by the various actions of Respondent enumerated above, it has
been assumed that the brief represented the General Counsel 's current
position.
.midnight, that all vacations,- except those which had
already commenced, would be :cancelled for the duration
of the lockout, and that Respondent would discontinue its
contributions to employee group health insurance premi-
ums. During the lockout Respondent made little effort to
continue any of its production operations, which normally
required the services of about two-thirds of the plant
complement, but concentrated on maintaining its ware-
house and shipping operatious, making deliveries to
customers out of accumulated inventory. For that purpose,
Respondent used nonunit employees until July 10, when it
began to use new hires . The parties met three more times
during the' lockout, without reaching agreement. On
September 20, Respondent terminated the lockout, but at
the same time unilaterally placed into effect .eertain terms
of its last offer to the Union.
B. Discussion
1. The legality of the lockout
a. Prior decisions
The complaint alleges that the lockout was unlawful,
even apart from the use of, replacements . This raises an
issue that has received extensive consideration from the
Board and the courts.
The Board long refused to sanction the use of a lockout,5
except where its purpose' was to forestall strike action
which would have inflicted some special damage on the
employer, such as spoilage of perishable materials,6 or
immobilization of customers ' automobiles brought in for
repair,7 or where the object of the lockout was to minimize
the disruptive effect of quickie or sitdown. -strikes.8
However, in the American Strip Building case,9 the Court
found that the respondent did not violate the Act by
resorting to a lockout, where the only object was to exert
pressure in support of the employer's bargaining position.
There, the lockout occurred after impasse, and no
replacements were hired. The Court said:
What we are concerned with here is the case of a
temporary lay-off of employees to bring pressure to
bear in support of the employer's bargaining position,
after an impasse has been-. reached. This. is the only
issue . before us and all that we decide.
And the Court made it clear in a footnote to the quoted
excerpt that it was not passing on the "consequences which
would follow had the employer replaced his employees
with permanent replacements or even temporary employ-
ees' The Court proceeded to find that there was no
unlawful interference by the lockout with the right to
bargain collectively or the right to strike, citing the absence
of any hostility by the employer to collective bargaining,
the absence of any impairment by the lockout of the
union's efficacy as a representative of the employees, and
the fact that the object of a lockout was the same as that of
s Quaker State Oil Refining Ca, 121 NLRB 334.
' Duluth Bottling Association, 48 NLRB -1335.
7 Betts Cadillac Olds, Inc., 96 NLRB 268.
' International Shoe Co., 93 NLRB 907; Link-Belt Co., 26 NLRB 227.
Ameriaan Ship Building Ca. v. N.LR.B.. 380 U.S. 300 (1965).
SARGENT-WELCH SCIENTIFIC CO. 813
a strike--namely, a suspension of the employer's opera-
tions. While conceding that . a lockout differed from a strike
in that it gave the employer control over the timing and
duration . of the. work stoppage, .the Court held that. the
Act's guarantee of the right to strike did not connote a
guarantee of the exclusive right "to determine the timing
and duration of all work stoppages."
Considering, next, whether the lockout violated Section
8(aX3), the Court pointed out that to establish such a
violation it was necessary to show (1) specific intent to
discourage adherence to the union or (2) that the
employer's conduct was inherently prejudicial to union
membership and devoid of any significant business
justification . The Court found that neither condition was
met in that case , pointing out that there was no evidence
that the employer was motivated by a: desire to discourage
adherence to the . union as distinguished from a desire to
affect the outcome of the negotiations. The Court added:
Therefore we concluded that where the intention
proven is merely to bring about a settlement of a labor
dispute on favorable terms, no violation of section
8(aX3) is shown.
Accordingly, we hold that an employer violates neither
section '8(axl) nor 8(aX3) when, after a bargaining
impasse has been reached , he lays off his employees for
the sole purpose of bringing economic pressure to bear
in support othis legitimate bargaining position.
Thereafter, in Darling and Company 10 the Board extend-
ed the rule of American Ship Building to a preimpasse
lockout, which was resorted to, not only as a bargaining
tactic, but also to forestall a strike, which might have
occurred several months later during the employer's busy
season. The Board noted that , underthe circumstances, the
employer , "was legitimately concerned over the timing of
any possible work stoppage." Pointing to the fact that the
parties had bargained in good faith , reaching accord on
many issues , and to various indications that the union
might strike during the busy season , the Board found that
the lockout was "neither inherently prejudicial to union
interests nor devoid of significant economic justification,"
and dismissed the complaint . The implication of Darling is
that a lockout is justified, if it is reasonably adapted to
minimize the danger of a disruption of production during
the employer's busy season.11
In Stokely-Van Camp, Incc:, 12 the Board sanctioned the
use of a lockout to exert bargaining pressure , even though
there was no finding that the parties had reached 'an
impasse . The Board there relied solely on the fact that the
situation was analogous to that in Darling, in that the
purpose of the respondent , a vegetable grower and
processor, was to obtain an agreement before the growing
season, when it would be especially vulnerable to a strike.
In WGN of Colorado, Inc.,13 in the absence, of any finding
of impasse, the Board sanctioned a lockout , the purpose of
which was to enable the,employer •to train replacements to
operate a radio station during A critical weekend , broad-
cast, in anticipation , of a strike by-the union during that
weekend. In that respect , this case would seem to fall into
the same category as . Duluth Bottling , and Reiss Cadillac,
where the lockout was designed ; not.as a bargaining tactic,
but to avert special damage , from an, anticipated strike.
To sum up, ie law on the legality of a lockout
considered apart from the use of replacements ,_ seems to be
as follows:
(1) An employer may lock out in aid of his. bargaining
position after a good-faith impasse.
(2) An employer may lock out regardless of impasse and
even though there is no immediate danger of a strike, if he
expects one during a season of , the year when he will be
especially vulnerable to a, work stoppage and his object is
to bring pressure on the union to reach an accord before
that time.
(3) An employer may lock out regardless of impasse, if
he reasonably believes that a strike is imminent, and if he
will suffer some special damage should it occur white
operations are still continuing.
The proposition common to (2) and (3) above is that an
employer is not required to continue his operations , if to do
so will increase his vulnerability to, a strike which he
reasonably , expects to occur. If the . danger of a. strike is
immediate, he is privileged to shut down at once, for
operational reasons and, if the danger is not immediate, he
is still privileged to shut down at once in order to bring
pressure on the union to reach agreement before the
beginning of a period of increased vulnerability.
Here, the General Counsel . ,and the Union contend:
(1) There was no impasse before the lockout (or at any
time thereafter).
(2) That, absent an impasse, the lockout was illegal,
unless Respondent can show that, as in the cases cited
above, the purpose of the lockout was to reduce its
vulnerability to a strike, and there was, no such showing
here.
(3) The lockout was illegal, in any event, because it was
in reprisal for the employees' concerted activity in refusing
to volunteer for overtime assignments.
Respondent rejoins.that there was a good-faith impasse
on July 3 , and that, in any event, there was: adequate
business justification for the lockout within the meaning of
the Board precedents discussed above.
b. Was there an impasse on July 3?
The first of 12 prelockout bargaining sessions was held
on May 23. At that, meeting the Union presented all its
economic and noneconomic proposals, including a de-
mand for a 40-cent-per-hour raise, and a 1-year contract.
Respondent took the position thatt would not discuss the
economic issues until the noneconomic ones had been
settled and during the course of the negotiations it
submitted a large number of noneconomic proposals.14
Although by June 30, some of these matters had been
settled, including the retention of the union shop clause in
10 171 NLRB 801, affd . sub ,tan. Lewis Lane v. N.LRB., 418 F.2d 1208
(C.A.D.C., 1969).
11 Accord : Ozark Steel Fabricators, Inc., 199 NLRB 847.
12 186 NLRB 448.
13 199 NLRB 1053.
14 See Joint Exh. 12.
814 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the old contract . and modification of the grievance
procedure, the parties were , still at odds over a plethora of
issues, including substitution of departmental for plant-
wide seniority, a changeover - from voluntary to mandatory
overtime, qualifications of employees for promotions and
transfers, and duration of leaves of absence . The foregoing
were characterized at the hearing by Respondent's vice
president, Baddeley, as the "key" noneconomic issues.
In the afternoon of June 30 , the parties held their 11th
meeting, which was the first one to be attended by a federal
mediator. Front a synthesis of the testimony of Baddeley
and the Union's chief negotiator, Gibbons, it appears that
at that meeting and the next one, on July 3, the following
occurred:
On June 30, Respondent unveiled its economic propos-
als, the main feature of which was a 15-cent-per-hour raise
during each year of a 3-year contract . After some
discussion whether this was the maximum allowable under
Phase II guidelines , Respondent proposed a 3-month
extension of the current contract, with retroactivity for any
wage increase negotiated in the interim . Baddeley ex-
plained to the Union that Respondent desired a 3-month
extension because it would take at least that long to settle
all the unresolved issues. However , while the Union was
still considering that proposal , Respondent served it with
the 72-hour written notice described above .15 After
protesting Respondent 's action, the Union proposed a 1-
year extension of the expiring contract with a 25-cent-an-
hour raise, the Union offering to waive for the 1-year
period all its demands for improvements in fringe benefits.
Respondent rejected this offer and a further meeting was
scheduled for July 3. On that-date Respondent renewed its
offer of a 3-month extension of the old contract or a 3-year
contract with the various changes theretofore proposed by
it. After countering with a renewal of its offer of a I-year
extension with a ' 25-cent raise, the Union indicated its
willingness to accept less than 25 cents, but Respondent's
inquiry whether the Union would take less than 15 cents
elicited a negative answer . The Union's proposal of a 2-
week extension , if Respondent would withdraw its 72-hour
notice, was rejected . At a management caucus during this
session the federal mediator declared that he had never
seen a clearer case of impasse . The Union then offered
concessions on seniority and leaves of absence, but
Respondent asserted that it had no intention of changing
its position and that in its opinion the parties were at an
impasse . Gibbons questioned that conclusion , pointing out
that Respondents stated reasons for proposing to extend
the. 'old contract for 3 months was to give the parties
sufficient time to resolve all the unsettled issues by further
negotiations , and he demanded that the parties continue to
negotiate . Respondent thereupon announced its intention
to lock out effective that midnight , citing, inter alia, the
existence of an impasse and characterizing its action as in
support of its bargaining position.
In its brief, in support of its contention that there was an
is It is clear from the record that, notwithstanding the reference in that
notice to `termination" of negotiations , the parties regarded that aspect of
the notice as a mere formality, required by the contract, that Respondent
fully intended to continue negotiations even after expiration of the 72-hour
period, and that the only purpose of Respondent in giving the notice was as
a prelude to a possible lockout. Thus, on July 3, at the same time that
impasse on July 3, Respondent urges (a) the failure of the
parties to make any headway in resolving the so -called
"key," noneconomic issues, (b) the view expressed by
Respondent on July 3 that there was an impasse and (c) the
mediator's statement to Baddeley that he had never seen a
clearer case of impasse . As against this, the record shows,
as noted above, (a) that Respondent did not make its
economic offer untilJune 30, which was the penultimate
session before the lockout, (b) that, in proposing a 3-month
extension of the old contract, Baddeley indicated that he
thought the parties would need that much time to resolve
their difficulties, and (c) that on July 3,'the Union insisted
that there was no impasse, pressed for further bargaining,
and showed some flexibility on the unresolved issues.
Upon consideration of all the foregoing circumstances,
particularly the relatively brief opportunity afforded the
parties to explore Respondent 's economic proposals and
the potential inherent therein for breaking the deadlock on
noneconomic items, it is found that on July 3, there was
not as yet an impasse on the terms of a new contract.
However, it seems clear that there was on that date an
impasse on the issue of an interim extension of the old
contract. It is evident that the differences between the
parties in that regard were deep-seated and irreconcilable.
To both, the issue of the extension of the old contract was
important primarily because it meant renewal of the no
strike clause . It is clear that Respondent felt that it would
be at a great disadvantage at the bargaining table, if the
Union remained free to call a strike at any time during its
busy season. This feeling was no doubt intensified by the
various indications , discussed below, that the Union in fact
intended to strike early in July. It is equally clear that the
Union, on the other hand, perceived that, if it renounced
strike action during the busy season , it would be giving up
its most effective bargaining leverage . In fact, Respon-
dent's request for an extension of the old contract to the
end of the busy season elicited from the Union only a
counterproposal for an extension for only 2 weeks or for an
extension until the start of the next year's busy season,16
coupled with a raise considerably above that offered by
Respondent and no concessions on the unresolved noneco-
nomic issues; and, it is inferrable that it was this
disagreement over an interim contract that caused Respon-
dent and the mediator to regard the bargaining as at an
impasse. Thus, although that matter did not come into
focus until June 30, it seemed a foregone conclusion that
the Union would not give up its right to strike during
Respondent's period of greatest vulnerability and that
Respondent would not consent to bargain during such a
period under the threat of a strike. It is apparent,
moreover, that the dispute over an interim contract was
separate and distinct from the main subject of the
negotiations-the terms of a definitive contract and was
not likely to be affected by any further exploration of the
economic issues but presented an insuperable obstacle to
the prosecution of those and any other efforts to settle the
Respondent announced its intention to lock out, it pressed for continuation
of negotiations during the period of the lockout.
16 While, as the Union points out, Respondent's proposed 3-year
contract would have terminated early in the 1975 busy season, acceptance
of that proposal would have assured Respondent of at least three strike-free
busy seasons.
SARGENT-WELCH SCIENTIFIC CO. 815
main dispute. Such efforts were not, in fact, resumed until
after the impasse over the interim contract was broken by
the lockout.
An impasse having been found, the question arises
whether it was the sort of impasse to which reference was
made by the Court in American Ship Building. There, the
parties had bargained to a stalemate on the terms of a final
agreement. Here, it has been found that the impasse over
the terms of an interim contract arose in the midst of the
bargaining for a definitive agreement and before any
deadlock had been reached therein. Such terms included
not only a no-strike clause, albeit that was of prime
concern to the parties, but also other provisions which had
expired with the old contract and were not binding on the
parties absent a new agreement-namely arbitration, dues
checkoff, and union security.17 While the impasse, here,
arose with respect to a contract of relatively brief duration,
it nevertheless constituted a deadlock over the terms and
conditions that were to govern the employment relation for
an appreciable period, and there is nothing in American
Ship Building to suggest that, to justify a lockout, an
impasse in bargaining must relate to a contract of a
particular duration. Moreover, it is not questioned by the
General Counsel that the parties bargained in good faith
before the lockout on all ,the matters in dispute, including
an interim contract, and it is clear that the impasse reached
on such a contract was as real an obstacle to any final
agreement as a deadlock in the main negotiations would
have been. Accordingly, no valid reason is perceived for
distinguishing the instant impasse from that which existed
in American Ship Building. It is found, therefore, that on
July 3, the parties reached a good-faith bargaining impasse,
and that any requirement in that case for the existence of
such an impasse as a prelude to a lawful lockout has been
met here.
c. Legality of the lockout as a preimpasse lockout
It having been found that the instant lockout qualified as
a postimpasse lockout under American Ship Building, it
may be thought that there is no need to consider
Respondent's further contention that, even if it be found
that there was no impasse, the lockout was justified by
other, legitimate business considerations. However, to
guard against the contingency that higher authority may
disagree with the foregoing finding of an impasse,
consideration will next be given to the latter contention.
Heretofore, as already related, the only circumstances
other than a bargaining impasse that have been deemed to
justify a lockout are those approved in cases like Duluth
Bottling, supra, where the object was to minimize the
disruption of an impending strike, or in cases like Darling
and Company, supra, where the object was to force
17 Bethlehem Steel Co., 136 NLRB 1500, affd. on this point 320 F.2d 615
(C.A. 3), cert. denied 375 U.S. 984; Hilton Davis Chemical Co., 185 NLRB
241.
rs Apart from the inconclusiveness of the evidence of a general
slowdown, Baddeley conceded at the hearing , as does Respondent in its
brief, that a shutdown was a poor way to cure the effects of a slowdown. As
for the fear of sabotage, it was ascribed by Baddeley at the hearing to the
fact that there had been some incidents just before the 1970 strike, involving
the defacement of shipments to customers with obscene graffiti . This does
not seem a very weighty reason for such drastic action as was taken here. As
settlement of a contract dispute before the employer's busy
season . The instant lockout was attributed by Respondent
to (1) an alleged decline in productivity, due to a general
slowdown, (2) fear of sabotage, (3) the need for expediting
the recruitment of replacements , (4) support of Respon-
dent's bargaining position , and (5) the impasse in bargain-
ing. The last reason has already been considered. As for
the first three reason$, none appears sufficiently cogent to
account for a decision to shut down entirely the plant's
manufacturing operations and staff its warehouse and
shipping areas with untrained replacements during Res-
pondent's peak season . ts Accordingly , there is no need for
extended discussion of any of those three reasons, except
for an aspect of the alleged slowdown, which the General
Counsel contends would invalidate the lockout-namely,
Baddeley's assertion that the decline in productivity was
aggravated by the apparently concerted refusal of employ-
ees during June to volunteer for overtime work. The
General Counsel points out that , although a concerted
rejection of mandatory overtime is not protected, a
concerted refusal of employees to perform overtime on a
voluntary basis is protected, citing Dow Chemical Company,
152 NLRB 1152. Thus, we have here the curious situation
of the General Counsel seeking to prove a violation
through a factor on which Respondent bases its defense. It
is deemed necessary to reject both Respondent's and the
General Counsel 's reliance on that factor, because of the
patent implausibility of Respondent's assignment of any
weight thereto, particularly in view of its admission at the
hearing that all available overtime work in June was in fact
performed. With this admission, Respondent is reduced to
the untenable position of ascribing the lockout, in part, to
an uncooperative attitude on the part of the employees,
which had no actual effect on production.
Moreover, if there were need for any further evidence
that neither the alleged overtime problem nor any of the
other matters cited above was a factor in the lockout
decision, such evidence would be supplied by Baddeley's
admission at the hearing that there would have been no
lockout, if the Union had but given him an acceptable no-
strike commitment , and from the fact that at the August 2
meeting Respondent offered to end the lockout in return
for such a commitment.19
While negating the other considerations discussed above,
the foregoing circumstances lend substance to Respon-
dent's contention that the lockout was designed to exert
pressure in support of its bargaining objectives. One of
those objectives , and the one which was most urgent at the
time of the lockout , was to obtain an interim contract with
a no-strike commitment for the duration of the busy
season . That Respondent believed with good reason that a
strike was then imminent is clear from the record.
Although it is true that on June 30 and July 3, the Union
for Respondent's further contention that it preferred a lockout on July 3, to
a strike, which it expected to begin on July 8, because it feared that the
students to be used as replacements would become less available as the
summer progressed , such contention is refuted , inter alia, by the fact that
Respondent was content to wait until July 10 , before beginning to hire such
replacements.
19 While, at that meeting, Respondent , at first, sought also a guarantee of
"reasonable" productivity, it promptly abandoned that demand, leaving the
no-strike commitment as the only condition for ending the lockout.
816 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
disclaimed any intention of striking , Respondent was
entitled to discount such disclaimer , not only in view of the
fact that the Union had struck during the most recent
negotiations in 1970 , but particularly in view of its current
reluctance to give an acceptable no-strike commitment.
Moreover, credit is given to Baddeley 's _ testimony that by
July 3, he had reached the conclusion that the Union had
already selected a date for a strike, that date being July 8.
Such testimony is buttressed by the undisputed evidence in
the record (a) that late in June Baddeley received a report
from Carmichael , a union steward, that the Union
intended to give a 72-hour notice on July 5, to clear the
way for strike action , and (b) that the Union posted on a
bulletin board a notice of a meeting to be held on July 5 to
consider a strike vote , which notice was seen by Baddeley
early on July 3 .20 It is accordingly found that on that date
Respondent reasonably believed that there would be a
strike on July 8.
We come next to the question whether the lockout may
be justified under cases like Duluth Bottling and Darling
and Company on the ground that it was reasonably adapted
to minimize the disruptive effect of the expected strike.
Light is shed on that matter by the following testimony of
Baddeley, when asked to explain the reasons for locking
out on July 3 instead of waiting for a strike on July 8:
Q. ... What was the advantage of locking them
out on the 5th (sic) if they were going to strike on the
8th?.
A. Number 1, it gave us control of when the Union
would strike and number 2, it might possibly .. .
.precipitate some action on the part of the bargaining
committee in taking back our proposals to the
membership for a vote , and had they agreed to extend
the contract by a vote at a meeting on the 5th, that
would have ended the lockout . That offer was open.
s s s s s
By locking them out on the 3rd, if they agreed to an
extension , they would have come back to work and
then we would have additional time to negotiate a
contract, that would have gotten us through our busy
season without a prolonged work interruption.
s n • s s
Q. Why did you think if the Union was prepared to
strike , which means they were prepared to give up their
jobs and their wages for an indefinite period of time,
why did you think that locking them out would have
any effect on them?
A. I think-this is an opinion-but one of the
impressions that I had is that they never considered
that we were serious about these proposals . They kept
telling us to get serious , to drop all the extraneous
things we weren 't concerned about, to get down to the
20 The General Counsel seeks to impugn the credibility of Baddeley's
testimony that he anticipated a strike by pointing out that in the first of two
pretrial letters to a Board agent explaining the reasons for the lockout
Baddeley did not cite the fear of a strike among such reasons . However, he
did set forth in that letter the various indications recited above of the
one issue we were trying to work out. That was not the
case . We had several very major concerns.
Q. You thought by locking them out you would
impress upon them the seriousness of your position?
A. That was one of our hopes.
The foregoing is persuasive that Baddeley believed that,
by taking the initiative, in the matter of a work stoppage,
Respondent would convince the employees that it was fully
prepared to accept the losses of a work stoppage in order to
gain the concessions it was seeking from the Union, that a
strike would therefore avail them nothing , and that this
realization would cause the employees at the meeting
scheduled for July 5, to accede to Respondent 's demand
for an extension of the old contract through the busy
season in return for a termination of the lockout. As
already noted, although at the Union's July 5 meeting the
lockout did not produce the desired results, at the August 2
bargaining session Respondent persevered in its efforts to
use the lockout as leverage for obtaining a no-strike
commitment. It is thus apparent that Respondent consid-
ered the lockout a calculated risk, weighing the probability
that there would be a work stoppage in any event on July
8, against the psychological and tactical advantages that
might accrue to it from a lockout, both in the bargaining
for an interim contract and in the main negotiations, in the
hope of reaching a settlement on one or the other set of
negotiations relatively early in the busy season. In this
respect, the instant lockout falls within the ambit of the
precedents cited above approving a lockout for the purpose
of minimizing the disruptive effect of an impending strike,
as in Duluth Bottling , or for the purpose of salvaging at
least a part of its busy season , as in Darling and Company.
Finally, the Court's rationale in American Ship Building
seems broad enough to warrant validation of the instant
lockout, even though the Court there professed to pass on
the legality only of a postimpasse lockout, whereas at this
point we are dealing with an assumed preimpasse lockout.
In that case, the Court stressed the absence of any evidence
of hostility on the part of the employer to the process of
collective bargaining and the fact that the lockout did not
impair the effectiveness of the union as the representative
of the employees, and the Court rejected the contention
that the lockout interfered with the right to strike because
it deprived the union of control over the timing and
duration of an interruption of work.
Here, Respondent had had uninterrupted contractual
relations with the Union for over 35 years and the General
Counsel expressly disclaimed any contention that Respon-
dent violated Section 8(a)(5) of the Act in the prelockout
negotiations. Moreover, the Union's majority status was
protected in the expiring contract by a provision for union
shop with dues checkoff, which clause Respondent had
before July 3, agreed to include in a new contract . Nor, is
there any evidence or contention that the lockout adversely
affected the Union's capacity to represent the employees.
Indeed, the contrary is indicated by the fact that the Union
Union 's plan to strike and alleged , inter alia, that the lockout was in support
of Respondent's bargaining demands, one of which-the demand for a no-
strike pledge-was necessarily predicated on the fear of a strike during the
busy season. (Compare the treatment of a similar contention in Ozark Steel
Fabricators, Inc., supra TXD.)
SARGENT-WELCH SCIENTIFIC CO.
represented them throughout the lockout , continuing to
press vigorously for acceptance of its contract proposals.
And, it is clear that there is no more reason here than there
was in American Ship Building to find that the preemption
by the lockout of the Union's control over the timing and
duration of an interruption of production unduly infringed
upon the Union 's right to strike.
With regard to the 8(a)(3) issue in American Ship
Building, the Court said:
... it does not appear that the natural tendency of
the lockout is severely to discourage union membership
while serving no significant employer interest . In fact, it
is difficult to understand what tendency to discourage
union members was perceived by, the Board. There is
no claim that the employer locked out only union
members, or locked out any employee simply because
he was a ' union member, nor is it alleged that the
employer conditioned rehiring upon resignation from
the union.
There was not the slightest evidence and there was no
finding that the employer was actuated by a desire to
discourage membership : in the Union as distinguished
from a desire to affect the outcome of the particular
negotiations in which he was involved.
Here too, it is clear that, in instituting the lockout,
Respondent had no desire to discourage union member-
ship as 'distinguished from a desire to prevail in the
negotiations . The record shows that Respondent was
careful to include in the lockout 20 seasonal employees,
hired shortly before July 3, who were exempt from the
application of the union-security clause, thereby avoiding
the appearance of, discrimination on account of union
membership, and that , in recalling the employees, it did not
attach any condition inconsistent with their continued
adherence to the Union . There is therefore as much reason
here as there was in American Ship Building for finding that
the adverse impact of the lockout on employee rights was
comparatively slight.
As for the "significant employer interest" served by it,
not only was the lockout reasonably adapted, as found
above, to support Respondent's bargaining position in
regard to a final contract, but it was designed to serve the
additional purpose , which was not involved in American
Ship Building, of bringing pressure on the Union to
renounce resort to a strike during Respondent's busy
season , so that normal operations might be timely resumed
during that period.
In any event, it is difficult to understand why the rule of
American Ship Building should not be extended to any
preimpasse lockout , absent proof of discriminatory motiva-
tion. It is true that once an employer has bargained in good
faith to impasse he has discharged his statutory duty and
that that fact is entitled to weight as negating antiunion
motivation for a subsequent lockout . But to say that there
can be no lawful lockout for bargaining objectives unless
an impasse has been reached implies that the discharge of
an employer's bargaining duty is indispensable to the
817
negating of union animus , and that nothing else will
suffice . The sounder view would seem to be that , while the
fact that an employer has bargained to a good-faith
impasse is strong evidence that he harbors no union
animus, proof of such lack of animus may be supplied by
other circumstances . Here, such other circumstances would
consist, inter alia, of the long history of contractual
relations between thetiparties, the willingness of. Respon-
dent to underwrite the Union 's representative status
though union-security arrangements , and the General
Counsel 's disclaimer of any contention that the rather
considerable bargaining . prior to the lockout was marked
by any bad faith on Respondent 's part.
It is concluded, for all the reason discussed above, that
Respondent did not violate the Act by the instant lockout,
whether it be considered as a postimpasse or preimpasse
action.
2. Legality of use of temporary replacements
The leading case on the legality of using temporary
replacements during a lockout is N.LR.B. v. Brown, 380
U.S. 278 ( 1965), decided on the same day as American Ship
Building, supra. There, the Court held that, where a union
struck one member of a multiemployer bargaining unit in
support of its contract demands, the other members were
privileged to lock their employees out and to operate with
temporary replacements . The Court pointed out that it had
already decided that such a lockout was not unlawful,21
because the legitimate interest of the employers in
preserving the integrity of the multiemployer unit justified
their resort to a lockout as a defense against the "whipsaw"
strike . The Court added:
In the circumstances of this case, we do not see how the
continued operations of respondents and their use of
temporary replacements any more implies hostile
motivation nor how it is inherently more destructive of
employee rights than the lockout itself. Rather, the
compelling inference is that this is all part and parcel of
respondents' defensive measure to preserve the multi-
employer group in the face of the whipsaw strike.
The Court proceeded to find no 8(a)(l) violation on the
basis of a balancing of the interest of the employees in
exerting economic pressure on the employer through the
whipsaw strike and the legitimate business interests of the
employers. On the 8(aX3) issue, the Court considered to
what extent the use of replacements tended to discourage
union adherence, and on this point stressed the following:
(1) The fact that the replacements were used only for
the duration of the lockout.
(2) The fact that the locked out employees could
reclaim their jobs by simply accepting their employer's
last offer, which represented an improvement over their
old contract.
(3) The fact that the employers had agreed to retain
the union shop clause of the expired contract , thereby
guaranteeing the viability of the union.
21 N.L. R.B. v. Truck Drivers Local Union No. 449, 353 U .S. 37 (1957).
818 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Concluding from the foregoing that the use of replace-.
ments had a comparatively slight adverse impact on
employee rights and was reasonably adapted to the
effectuation of the legitimate business end of preserving
the integrity of the multiemployer unit, the Court found
that the employers' conduct was prima facie lawful and that
it was incumbent upon the Board to show an "improper
subjective intent." The Court found no such intent, citing
the history of amicable relations between the parties, the
inclusion of a union shop clause in their contracts , and the
fact that the employers had limited themselves to the use of
temporary rather than permanent replacements.
It was for a time the position of the Board that the Brown
case was meant to sanction the use of temporary
replacements during a lockout only where, as in Brown, the
employer's action was a "defensive" reaction to economic
action by the union, and not where the employer chose to
continue operations during a lockout for the sole purpose
of exerting some pressure on the union to accept the
employer's contract proposals 22 This is apparently still the
view of two Board members, who have consistently refused
to extend the rule of Brown to a case where replacements
are used in the context of a lockout designed to break an
impasse in bargaining.23 To other Board members deem
the rule of Brown applicable in all lockout situations and
would approve the use of replacements in any otherwise
lawful lockout, absent proof of antiunion motivation.
Although professing disagreement with the latter position,
the Chairman of the Board has indicated that he, too,
considers Brown controlling and has approved the use of
replacements during a lockout in support of a bargaining
position, albeit with the caveat that his decision in each
case will turn on a balancing of the evidence that the
lockout was motivated by union animus against the
evidence that it was attributable to legitimate business
considerations. This divergence of views has produced a
series of 3-2 decisions approving the use of temporary
replacements during a postimpasse lockout, as well as
under other circumstances .24 The most extensive exposi-
tion of Chairman Miller's views appears in the Inter
Collegiate Press case, supra, which involved a wholly-
owned subsidiary of the instant Respondent. In that case
the lockout occurred after a bargaining impasse and there
was no issue as to the legality of the lockout, itself, but only
as to the hiring of temporary replacements during the
lockout . It was there found that the respondent 's purpose
in hiring replacements was to maintain its competitive
position by building up inventory in preparation for its
busy season.25 Chairman Miller cited the following
circumstances as militating against any inference that the
use of replacements discouraged adherence to the union:
(a) The fact that the replacements were hired only for the
duration of the dispute and that the respondent offered to
22 Inland Trucking Co., 179 NLRB 350, enfd. 440 F.2d 562 (C.A. 6,
1971), cert. denied 404 U.S. 858 (1971).
23 Inter Collegiate Press, 199 NLRB 177; Ottawa Silica Co., 197 NLRB
449.
24 Ozark Steel Fabricators, Inc., 199 NLRB 847 (lockout to force
settlement of contract dispute before busy season ); WGN of Colorado, Inc.,
supra (lockout to permit training of replacements for use during a critical
broadcast, during which union was expected to strike).
dispense with them, if the union would renounce resort to
strike action.
(b) The offer by the respondent of a new contract that
was more favorable to the employees than the old contract.
(c) The respondent's agreement to include a union-
security clause, in the new contract.
The Chairman then cited the long bargaining history
between the parties ,,and the respondent's continuing
recognition of the union as negating any union animus,
and the evidence in the record that the respondent's only
purpose in hiring replacements was to retain its competi-
tive position , which Chairman Miller deemed to be a
legitimate and bona fide business consideration.
Here, too, the replacements were hired only for the
duration of the lockout and Respondent took care to make
that clear to the locked out employees. 26 Here, too,
Respondent offered, on August 2, to end the lockout and
recall the employees, if the Union would but give it a
satisfactory, no-strike commitment . Also, before the
lockout, Respondent had agreed to the inclusion of a
union-security clause in a new contract . As for the other
contract terms offered by Respondent, they included a
substantial raise and certain improvements in fringe
benefits . While it is true that Respondent was demanding
concessions , principally in the noneconomic area, which
the Union vigorously opposed, it cannot be said that
Respondent's proposed contract, as a whole, was so
unfavorable to the employees or so oppressive that one
would have to infer that acceptance thereof by the Union
would tend substantially to discourage adherence to it.
Moreover, here, too, there has been a long history of
bargaining, marred only by a 2-week strike in 1970, and
apparent continued acceptance by Respondent of the
Union as the representative of its employees.
There remains to be considered Respondent's economic
justification for hiring replacements during the lockout.
Respondent adduced unrefuted evidence that it was in a
highly competitive field and that its competitors were alert
to take advantage of any disruption of its services to
customers because of a labor dispute. It is so found. It
would, moreover, seem even clearer than was the case in
Inter Collegiate Press that the use of replacements was
necessary to protect Respondent's competitive position. In
that case the lockout occurred well before the busy season
and it was therefore necessary to find a justification for the
respondent's failure to wait until the beginning of that
season before hiring replacements . Here , however, the
lockout occurred in the midst of the busy season and there
could be no question that, unless Respondent took prompt
action to meet delivery schedules for incoming orders,27 it
risked the loss of the goodwill and patronage of those
customers who represented its major source of business.
While Respondent admittedly was aware that the
replacements would not be as efficient as the locked out
25 The Administrative Law Judge so found and such finding was
implicitly adopted by all the Board members.
28 Each such employee was assured by letter that he was not being
permanently replaced and that his job would be available when the dispute
was settled.
27 As already noted , during the first week of the lockout Respondent
assigned nonunit personnel to handle shipments and on July 10, began to
use outside replacements.
SARGENT-WELCH SCIENTIFIC CO. 819
employees and that the lockout would necessitate a
complete shutdown of the manufacturing operation (pre-
sumably, because of the difficulty of replacing the more
highly skilled employees involved therein ), those circum-
stances do not preclude a finding that the lockout was
based on legitimate business considerations . It must be
remembered that it has been found that the decision to
lock out was a lawful one. Once having made that decision
Respondent had the alternative of shutting down altogeth-
er for the duration of the lockout or of continuing
operations with whatever replacements were available. It
would seem self-evident that the decision to carry on
during the busy season as well as circumstances would
permit was more consistent with good business judgment
than would be a decision to write off the entire peak
season . Recognition of the necessarily close relationship
between the right to lock out and the right to use
temporary replacements is reflected in the following
excerpt from the Board's brief in Ottawa Silica (page 25):
Moreover, at least in the circumstances of this case, the
Company's right to lockout in furtherance of legitimate
ends would have no practical value if it were not
complemented by the right of temporary replacement.
Thus, given the Company's operations and its relation-
ship with its glass.. customers , a shut down resulting
from a simple lockout would likely have caused a
permanent loss of business. Accordingly, to deny the
Company the right to utilize temporary replacements in
support of a lockout would render the latter right
illusory.
It is found, therefore, that Respondent's use of replace-
ments was lawful under the criteria set forth in the
Chairman's concurring opinion in Inter Collegiate Press for
determining the legality of the use of replacements during a
lockout.
3. The deferral of vacation pay
It is undisputed that on July 8 , Respondent cancelled the
vacations of 13 employees, which were scheduled to begin
on July 10, and stopped payment of checks for vacation
pay already issued to them, and that no other vacations
were scheduled until after the lockout.
Article VI, section 2 of the contract, which expired at
midnight on July 3, provided that employees would receive
vacations with pay based on length of service, and that
they would become eligible for such benefits on their
anniversary date , and continues as follows:
(c) It is understood that vacations will be taken at a
time acceptable to the Company or at a time set by the
Company . The responsible supervisor will determine
the number of employees to be granted vacation time
during any one week . . . . Except as otherwise
provided in this agreement vacations may be scheduled
at any time during the calendar year.
(d) In departments of the plant where there is a
complete shutdown at a period set by the Company,
employees shall take this period as their vacation... .
It is admittedly Respondent 's practice to give an
employee his vacation pay when he takes his vacation, or,
if he foregoes any vacation , at the end of the year.
Baddeley frankly explained the failure to schedule
vacations during the lockout as follows:
Primarily because one of the purposes of the lockout is
to impose economic pressure , and I concluded that
paying vacation pay during the period of a lockout
would simply fund the lockout. There was no intention
of depriving them ultimately of vacation.
There is no contention nor evidence that after the
lockout there was a refusal to schedule vacations earned
during 1972, and the issue here is only whether during a
lockout an employer may postpone the scheduling of
vacations in order to maintain the financial pressure of the
lockout on the employees.
In N.LR.B. v. Great Dane Trailers, Inc., 388 U.S. 26
(1967), the Court held that the withholding of accrued
vacation pay from strikers, while granting it to nonstrikers,
violated Section 8(ax3) and (1). In finding antiunion
motivation on the part of the respondent , the Court
deemed applicable the tests laid down in the Erie Resistor
case ,28 and related cases,29 which it summarized as
follows:
First, if it can reasonably be concluded that the
employer's conduct was `inherently destructive' of
important employee rights, no proof of an antiunion
motivation is needed and the Board can find an unfair
labor practice, even if the employer introduces evi-
dence that the conduct was motivated by business
considerations. Second, if the adverse effect of the
discriminatory conduct on employee rights is compara-
tively slight, an antiunion motivation must be proved to
sustain the charge if the employer has come forward
with evidence of legitimate and substantial business
justification. Thus, in either situation, once it has been
proved that the employer engaged in discriminatory
conduct which could have adversely affected employee
rights to some extent , the burden is upon the employer
to establish that it was motivated by legitimate
objectives, since proof of motivation is more accessible
to him.
However, as pointed out by Respondent , in Texaco, Inc.,
179 NLRB 989, the Board found no violation in an
employer's rescheduling of vacations during a strike and
requiring repayment of vacation benefits already ad-
vanced, where the contract gave it discretion to schedule
vacations "to best suit the employees' convenience and
least interfere with the Company's operations." It was
there found that the issue was the propriety, not of
withholding already accrued vacation pay, but of merely
postponing vacations and the related due dates of vacation
pay.
28 Erie Resistor Corp. v. N.L.R. B., 373 U .S. 221 (1963).
29 American Ship Building Co. v. N. L. R. B., supra; N. L. R. B. v. Brown, supra.
820 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In Cavalier Corporation, 192 NLRB 290, a panel of the
Board (Chairman Miller dissenting) found a violation of
Section 8(aX3) and (1) in the withholding from strikers and
nonstrikers of vacation benefits for the duration of a strike.
The majority found the issue to be the legality , not of the
discretionary rescheduling of vacations , but of withholding
payments in lieu of vacation that had already become due
and owing under the contract ; that such payments were
withheld because of the strike ; and that the avowed reason
therefor-that the employer had no "legal obligation to
finance the strike"-was insufficient justification for its
action under the rule of the Great Dane case . In this regard,
the majority pointed out that what was involved was not
assistance of the strikers through gratuities or loans but the
payment of moneys earned by them . The court, in
enforcing the Board 's order, agreed with its rejection of the
respondent's contention that it could not be found to have
discriminated because it had treated all its employees alike,
as well as with the Board's rejection of the justification
offered for respondent 's conduct 30
It appears from the foregoing that the state of the law
with respect to the withholding of accrued vacation benefits
in the context of a strike is that, absent adequate business
justification, such benefits may not be withheld from an
employee because of the pendency of a strike, and that the
disinclination of the employer to "finance" the strike does
not constitute such justification.
We turn now to consideration of the legality of the
withholding of vacation benefits in the context of a
lockout . In United States Pipe & Foundry, 180 NLRB 325,
enfd . 442 F.2d 742 (C.A.D,C., 1971 ) during negotiations
for a new contract, the employer cancelled a wage increase
already granted and withdrew entirely certain benefits
provided by the expired contract, including vacation pay.
The employer 's avowed motive for such action was to exert
economic pressure on the employees to agree to its
proposals for a new contract. When this tactic failed, the
employer resorted to a lockout . Although the Board found
the lockout, itself, to be lawful because of an existing
bargaining impasse , the Board deemed the antecedent
withdrawal of benefits to violate Section 8 (axl), (3), and
(5). Neither the Board nor the Court dealt with the
question whether the purpose of exerting economic
pressure to accept its contract proposals justified the
employer's action but chose to rely rather on the rationale
that such withdrawal was calculated to provoke a strike
and, therefore , "inherently destructive" of union interests,
as well as inconsistent with good-faith bargaining.
In Ottawa Silica Company,31 the respondent locked out
its employees during contract negotiations, and, when it
attempted to recall them a week later , the union initiated a
strike , which continued for over 4 months. At the
conclusion of the lockout the respondent rejected the
union's request that it make certain payments to the
employees for holiday and vacations and such payments
were not made until after the negotiation of a new
contract, presumably because of a reluctance to alleviate
the financial plight of the employees during the lockout
and ensuing strike . Although a majority of the Board
30 Industrial Workers, Local 289 v. N.LRB., 476 F.2d 868 (C.A.D.C.
1971).
found the lockout to be lawful, the Board was unanimous
in affirming the finding of the Administrative Law Judge
that the respondent, nevertheless, violated Section 8(a)(1)
and (5) by withholding vacation and holiday pay. Howev-
er, the rationale for such finding is far from clear . None of
the three opinions by the Board members in that case
commented on that issue and the Administrative Law
Judge's rationale consisted only of a finding , contrary to
the respondent's contention, that both the holiday and the
vacation pay were absolutely due and owing when
withheld, and a reference to the following language of the
court in the Pipe and Foundry case, supra:
While an employer may use its economic strength-its
economic weapons-to pressure employees and their
representative union to agree to its terms, and while the
withdrawal of benefits here was economic pressure for
that purpose, where such a weapon as here was used is
concomitantly "inherently prejudicial to union inter-
ests," it becomes an unfair labor practice.
However, as already noted, the foregoing finding of the
court was based on the view that an object of the employer
in that case was to provoke a strike, whereas in Ottawa
Silica it was clear that, far from desiring a strike, the
employer was seeking to resume normal production when
the union decided to strike.
Thus, it would seem that Ottawa Silica has significance
here only if one overlooks the dubious reliance therein on
the Pipe & Foundry case and considers it as standing.for the
proposition that a denial of accrued benefits during a
lockout may not bejustified on the ground that such action
is in aid of the lockout . So viewed, the result in Ottawa
Silica is in accord with Cavalier Corporation, where, as
noted above , the Board rejected as justification for the
withholding of accrued vacation pay the employer's
aversion to supporting through such payments the employ-
ees' strike activity.
One may well ask, however, if a lockout is lawful, why is
it unlawful for the employer to refuse to make payments to
the employees that will relieve the pressure of the lockout
and pro tanto defeat its purpose? The answer may be that in
the Board's view it is less coercive for an employer to
require his workers to seek other employment during a
labor dispute, particularly if, as is often the case, and as
was true here, there is a strong likelihood that they will
strike anyhow, than to withhold from them, for the
duration of the labor dispute, moneys they had earned
through past services, and that the impact of such
withholding was therefore not "comparatively slight," but
so severe that the Board was free to infer antiunion
motivation for that particular act, regardless of the cogency
of the business considerations which prompted the lockout,
itself.
The foregoing discussion brings us to the question in the
case at bar of the legality of the withholding of vacation
pay during the lockout. Respondent contends that . Ottawa
Silica is not in point because, there , the employer withheld
moneys already due and owing, whereas, here, as in
31 197 NLRB 449.
SARGENT-WELCH SCIENTIFIC CO. 821
Texaco, Respondent merely exercised the discretion given
it by the old contract to schedule vacations to suit its
convenience. However, this argument apparently overlooks
the provision in the old contract, quoted above, requiring
employees to take their vacations during a "shut down"
instituted by Respondent32 and by implication imposing
on it the correlative duty of granting them vacations and
vacation pay during such a shutdown. The plain intent of
this provision was to benefit Respondent by requiring the
employees to take their vacations when there was no work
to be done anyhow and to benefit the employees by
providing them with ready cash in the form of vacation pay
during a period of enforced idleness. Accordingly, it is
found that on the basis of services rendered by the
employees during the term of the old contract they became
eligible for vacation pay on their anniversary date in 1972,
the due date of such pay being governed by the terms of
that contract, including the provision mandating such
payments during a shutdown.33 It is further found that, by
withholding vacation pay until after the lockout, and
because of the pendency of a contract dispute with the
representative of its employees. Respondent violated
Section 8(a)(1) of the Act, and that, by taking such action
in derogation of he established terms and conditions of
employment, without consulting the Union, Respondent
violated Section 8(a)(5) and (1) of the Act.
4. The denial of holiday pay
After providing for the payment of wages for certain
holidays, the expired contract stipulated that, in order to
qualify for holiday pay, an employee had to work both the
day before and the day after the holiday, "unless
previously excused by the Company or in case of illness or
other bona fide reasons." Respondent refused to pay for
two holidays in 1972-July 4th and Labor Day-contend-
ing that the employees had not met the foregoing
"surrounding days" requirement. Although the employees
worked the day before July 4th, they did not work the day
after nor, because of the lockout, did they work on either
of the days surrounding Labor Day. Nevertheless, the
General Counsel and the Union contend that controlling
effect should be given here to the Board' s ruling in Ottawa
Silica, supra, on the holiday pay issue. There, too, the
contract conditioned holiday pay on working the day
before and the day after the holiday involved, which was
Memorial Day. There, too, it was contended that employ-
ees who had worked the day before but, because of the
lockout (on June 1) were not allowed to work the day after,
were not eligible for holiday pay. The Board there affirmed
the Trial Examiner's finding that the employees' compli-
32 it may be argued that, since the contract refers to the shutdown of
"departments of the plant," it should be construed as applying only to less
than a plantwide shutdown. However such a construction ignores the
manifest purpose of the provision, which, as noted below, was to serve the
interest of the employer and the employees in the scheduling of vacations
during a period of enforced idleness. In any case, it is clear that the instant
shutdown was less than plantwtde, the warehouse and shipping department
continuing to operate.
33 Although it had expired before vacations were cancelled, the old
contract still governed the due date of vacation benefits to the extent that
the qualifying services were performed during the term of that contract
Moreover, until modified by mutual consent or by the employer after an
ance with the "day after" requirement was excused because
it was prevented by the respondent. Presumably, the Trial
Examiner was there relying on the familiar rule of contract
law that performance by one party is excused, if prevented
by the other. His finding is supportable also by reference to
the contract provision in that case, which, as in the case at
bar, waives the performance of work before or after a
holiday, if such performance has been "previously ex-
cused" by the employer, and reliance by the Board on this
consideration is indicated by the following excerpt from
the Board's brief to the court in Ottawa Silica (page 28):
Whether the lockout was lawful or not, the Company
has supplied no reason why employees idled by the
lockout should not be deemed "previously excused by
the Company" exactly as if they had been laid off for
lack of work.
Nor, is it clear why in the case at bar the lockout would
not, in addition, constitute a "bona fide reason" for not
working on the days in question, within the meaning of
that phrase in the contract.
As indicated above, the Board' s ultimate finding in
Ottawa Silica was that, although the lockout was lawful,
the unilateral withholding of accrued holiday pay violated
Section 8(a)(1), (3), and (5). No valid reason appears for a
different result here. Indeed, the case for a violation
finding is even stronger here, since, while the employer in
Ottawa Silica did, finally, after the contract dispute was
settled, pay for the Memorial Day holiday, Respondent has
not as yet made any of the payments for the holidays here
in controversy. It is therefore found that by the foregoing
unilateral departure from the existing terms of employment
with respect to holiday pay, Respondent violated Section
8(a)(5) and (1) of the Act. It is further found, for reasons
analogous to those considered in the discussion of the
vacation pay issue, that by such conduct Respondent
violated Section 8(a)(1).34
5. Discontinuance of insurance premiums
From July 8 to September 19, Respondent discontinued
its contributions to the financing of the employees' health
insurance coverage. In his brief the General Counsel
contends only that such action was unlawful, if the lockout
was illegal, and does not challenge the right of Respondent
to discontinue such contributions during a lawful lockout.
Indeed, in the case of a lawful lockout the entitlement of
the employees to such contributions would seem to be no
greater than in the case of a strike. In Philip Carey
Manufacturing Co.,35 the Board affirmed the finding of a
Trial Examiner that an employer had no statutory duty to
impasse in bargaining , all terms of the old contract pertaining to employee
benefits remained in effect by operation of law.
34 In Onawa Silica and Pipe & Foundry, supra, the Board did not deem
findings of violations similar to the instant unlawful withholding of holiday
and vacation pay to require the conclusion that a lockout or the use of
replacements in connection therewith was motivated by improper consider-
ations There appears to be no more reason to hold that the instant
violations were so redolent of union animus as to overbalance all the
evidence outlined above that the instant lockout and the use of replace-
ments were designed only to serve legitimate, bargaining objectives
35 140 NLRB 1103, enfd in part 331 F 2d 720 (C A. 6, 1964), cert denied
379 U S. 888 (1964)
822 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
continue to pay group insurance premiums during a strike,
such premiums being assimilated to wages, which are
payable only in consideration of services currently ren-
dered. Where, as in the case of a strike or lockout, no
services are being currently performed, there would seem
to be no statutory obligation to continue payments
applicable only to such services.
It having been found that the instant lockout was lawful,
it will be recommended that the allegation as to insurance
premiums be dismissed.36
6. The unilateral changes in working conditions
The complaint, as amended at the hearing, alleged that
Respondent violated Section 8(a)(5) and (1) of the Act on
and after September 12, by unilaterally changing the
working conditions of the employees. The record shows
that at a bargaining session on September 12, Respondent
announced that it was terminating the lockout as of
September 20, and would put into effect on that date the
terms of its last offer, including a number of modifications
of the expired contract, but excluding those proposals
relating to union security, checkoff of, union dues,
arbitration , and a no-strike commitment . The modifica-
tions of the old contract included a 15-cent-per-hour raise
and some improvements in fringe benefits but also the
elimination or reduction of other benefits. Respondent
contends that it was justified in instituting its last offer,
because the parties had reached an impasse by September
12 (if not sooner). The General Counsel and the Union
contend that there was no impasse on September 12, and
that, if there was, it was not legally cognizable because
attributable to Respondent 's prior unfair labor practices.
The record shows that the parties continued to bargain
during the lockout, meeting on July 21, August 2, and
September 12,37 and that little progress was made during
those meetings . Baddeley's uncontradicted testimony as to
the September 12 meeting was to the effect that the parties
met in the morning and afternoon , that, although there was
some movement on other matters , the mediator was unable
to elicit any concessions from the parties on any one of the
six "key" issues, including wages , and that the union
representative, Gibbons, asserted that, in view of the
36 Even if the instant lockout were to be found unlawful , it is not clear
why there is any need to find that the discontinuance of insurance
premiums was a separate violation any more than there would be to find
that the discontinuance of wages during an unlawful lockout constituted a
separate violation . Any monetary loss suffered by the employees as a result
of an illegal lockout in the form of wages , insurance premiums, holiday pay,
etc., would be recoverable in backpay proceedings , whether or not such
separate violations were found . (Although in Wire Products Manufacturing
Corp., 198 NLRB No. 90, the Board found a separate violation in the
stoppage of insurance premiums during an unlawful lockout, no considera-
tion was given to the possible redundancy of such a finding.)
37 Gibbons referred to a meeting on August 12,. but this was not
confirmed by any other witness.
38 The parties did in fact meet two more times between September 12
and the date of the instant hearing (November 13), but there was no
evidence as to what progress , if any, has been made.
39 Although the matter was discussed at the August 2 meeting, it does
not appear that any reference was made thereto on September 12.
10 Considerable evidence was adduced by the General Counsel in an
effort to show that certain of Respondent's proposals purported to give it
unilateral control over (a) maximum wage rates, (b) shift starting times, and
apparent adamancy of both parties, he saw no point in
further discussion.38
Although it has been found above that on July 3, there
was as yet no impasse on the terms of a final agreement,
the considerations militating against such a finding were
the insufficient opportunity afforded the parties to discuss
economic matters, the Union's insistence on the desirabili-
ty of more bargaining, Respondent 's intimation, in seeking
a 3-month no-strike commitment , that it intended to
devote at least that much time to an effort to reach
agreement , and the Union's apparent flexibility in certain
areas . However, by September 12, when Respondent
announced its intention to institute its last offer , the parties
had had three more meetings and, despite some narrowing
of the gap, the Union had indicated that it now shared the
views of Respondent and the mediator as to the futility of
further meetings, and Respondent was no longer pressing
for an interim extension of the old contract as a means of
facilitating future negotiatons.39 It is clear , therefore, that,
despite the pressure exerted by the lockout, there had been
since July 3, a deterioration in the prospects of reaching
agreement to such a degree that a finding of an impasse on
September 12 seems warranted, and is here made.
It follows that Respondent was privileged on September
12, to place in effect its last offer, unless the impasse on
that date was due to its prior unfair labor practices in
withholding holiday and vacation pay. One would be hard
put to make such a finding on the present record. There
was no contradiction of Baddeley's testimony that agree-
ment was frustrated chiefly by the inflexibility of both
parties on the economic issues and on 4 or 5 noneconomic
issues, and there is nothing in the record to suggest that
there was any discussion at the bargaining sessions of the
withholding of holiday or vacation pay or that that matter
in any way impeded agreement . Accordingly, it is found
that the impasse on September 12, was not attributable to
the violations of the Act found above but to the inability of
the parties to reach agreement on issues discussed in good
faith, and dismissal of the instant allegation will be
recommended. 40
IV. THE REMEDY
It having been found that Respondent violated Section
(c) the matter of adoption of a self-insurance plan with respect to the
various employee coverages . However , the General Counsel did not allege
any violation of the Act in this respect and in his brief avers that there was
.probably nothing illegal" in Respondent's bargaining with respect to these
proposals. Apart from this, there is insufficient evidence in the record that
Respondent was in fact seeking unilateral control over maximum rates.
Although Gibbons testified that Respondent's counsel , Lyon, told him that
certain language proposed by it was intended to accomplish that purpose,
Lyon denied this, and there is nothing in the language , itself, that suggests
such an intent . Any such intent is negated , in any event, by the fact that an
exhibit referred to in the proposed clause clearly prescribes the maximum
rates for each classification. (See Exh . "A" attached to Joint Exh . 12.) As for
the self-insurance proposal, it gave Respondent the right to elect to "self
insure" any of the existing employee group coverages but only after notice
to the Union, and only if benefit levels were not reduced . The Union's
position was apparently that it wanted an opportunity to object to such an
election at the time that it was imminent. The same would presumably apply
to the proposal regarding changes in shift starting times . Be that as it may,
there is no evidence nor contention that the foregoing issues impeded
agreement or contributed materially to the impasse on September 12.
SARGENT-WELCH SCIENTIFIC CO. 823
8(a)(1) and (5) of the Act by unilaterally withholding
accrued holiday and vacation pay, it will be recommended
that it be ordered to cease and desist therefrom and take
appropriate, affirmative action. Such action shall include
the payment of any such amounts still being withheld
together with interest at the rate of 6 percent per annum
from the date that such holiday and vacation pay became
due to the date of payment thereof.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of the Act.
2. Respondent violated Section 8(axl) and (5) of the
Act by withholding from its employees holiday and
vacation pay.
3. Such violations constituted unfair labor practices
affecting commerce.
4. Respondent has not violated the Act in any of the
other respects alleged herein.
Upon the above findings of fact, conclusions of law,-and
the entire record in the case , and pursuant to Section 10(c)
of the Act , there is hereby issued the following recom-
mended:
ORDER41
Respondent , Sargent-Welch Scientific Company, Skokie,
Illinois , its officers , agents , successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain with Local 325, United Paper-
workers International Union , AFL-CIO, as the representa-
tive of its employees , by unilaterally changing existing
terms and conditions of employment relating to the
vacation and holiday benefits of the employees in the
following appropriate unit:
All employees at Respondent's Skokie , Illinois, plant,
excluding office clerical employees, lithographers,
professional employees , guards and supervisors as
defined in the Act.
(b) Withholding from its employees accrued holiday and
vacation benefits because of the existence of a dispute with
their bargaining representative over the terms of a new
contract.
(c) In any like or related manner, interfering with,
restraining, or coercing its employees in the exercise of
their right to self-organization , to form , join, or assist the
above-named Union or any other labor organization, to
bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for
the purpose of collective bargaining or other mutual aid or
protection, or to refrain from any or all such activities,
except to the extent that such right may be affected by a
union-security agreement , as authorized in Section 8(a)(3)
of the Act.
2. Take the following affirmative action , which is
deemed necessary to effectuate the policies of the Act:
(a) In the manner prescribed in the "Remedy" section of
the Administrative Law Judge's Decision, and to the extent
it has not already done so, make its employees whole for
any monetary loss suffered.
(b) Preserve and, upon request , make available to the
Board or its agents , for examination and copying, all
payroll records, social security payment records , timecards,
personnel records and reports, and all other records
necessary to analyze the payments due under the terms of
this Order.
(c) Post at its place of business in Skokie , Illinois, copies
of the notice attached hereto marked "Appendix."42
Copies of said notice , on forms to be pr6vided by the
Regional Director for Region 13, shall, after being duly
signed by Respondent's representative , be posted by it
immediately upon receipt thereof, and maintained by it for
a period of at least 60 consecutive days thereafter in
conspicuous places , including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by Respondent to insure that such notices are not
altered, defaced, or covered by any other material.
(d) Notify the Regional Director for Region 13, in
writing, within 20 days from the date of this Order, what
steps Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that those allegations of the
complaint not sustained herein be dismissed.
41 In the event no exceptions are filed as provided by Section 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, and recommended Order herein shall, as provided in
Section 102 .48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto shall
be deemed waived for all purposes.
42 In the event the Board 's Order is enforced by a Judgment of the
United States Court of Appeals , the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall be changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
Enforcing an Order of the National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Act gives all employees
these rights:
To engage in self-organization
To form, join, or help unions
To bargain collectively through a representa-
tive of their own choosing
To act together for collective bargaining or
other mutual aid or protection; and
To refrain from any or all these things.
WE WILL NOT do anything that interferes with these
rights.
WE WILL NOT change existing terms of employment
relating to vacation and holiday pay without consulting
Local 325, United Paperworkers International Union,
AFL-CIO, as the representative of our employees in
the unit described below: '
All our employees at our Skokie, Illinois, plant,
excluding office clerical employees, lithographers,
professional employees , guards and supervisors as
defined in the Act.
824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT withhold accrued holiday and vaca-
tion pay because of the existence of a dispute with our
employees ' bargaining representative over the terms of
a new contract.
WE WILL compensate our employees , to the extent
we have not already done so, for any monetary benefits
lost as a result of our withholding of 1972 vacation pay
and pay for the July 4th `and Labor Day holidays in
1972.
SARGENT-WELCH SCIENTIFIC
COMPANY
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
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.
Any questions concerning this notice or compliance with
its provisions may be directed to the Board 's Office,
Everett McKinley Dirksen Building, Room 881 , 219 South
Dearborn Street , Chicago, Illinois 60604, 'telephone
312-353-7574.