Schweigers, Inc.

National Labor Relations Board - Board Decisions

Aug 27, 1970

185 N.L.R.B. 420 (N.L.R.B. 1970)

420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Schweigers , Inc. and Local 2357, International Asso-
ciation of Machinists and Aerospace Workers,
AFL-CIO. Case 18-CA-2782
August 27, 1970
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
MCCULLOCH AND JENKINS
On April 23, 1970, Trial Examiner Josephine H.
Klein issued her Decision in the above-entitled pro-
ceeding, 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 Decision. The Trial
Examiner further found that the Respondent had
not engaged in certain other unfair labor practices
alleged in the complaint, and recommended that such
allegations be dismissed. Thereafter, the Respondent
filed exceptions to the adverse portions of the Trial
Examiner's Decision and a supporting 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
powers in connection with this case to a three-member
panel.
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 here-
by affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and the brief,
and the entire record in the case, and hereby adopts
the findings, conclusions, and recommendations of
the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the Recommended
Order of the Trial Examiner and hereby orders that
the Respondent, Schweigers, Inc., Watertown, South
Dakota, its officers, agents, successors, and assigns,
shall take the action set forth in the Trial Examiner's
Recommended Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
JOSEPHINE H. KLEIN, Trial Examiner - Upon a charge
filed against Schweigers , Inc (Respondent) by Local 2357,
International Association of Machinists and Aerospace
Workers, AFL-CIO (the Union or IAM ) on May 13,
1969,' a complaint was issued on December 18. Pursuant
to due notice, a hearing was held in Watertown, South
Dakota, before the undersigned Trial Examiner on January
27, 28, and 29, 1970. The General Counsel and Respondent
were represented by counsel and the Union by a Grand
Lodge Representative . All parties were given opportunity
to present evidence and to examine and cross -examine
witnesses . The parties waived oral argument and thereafter
the General Counsel and Respondent filed briefs.
Upon the entire record , observation of the witnesses
and consideration of the briefs, the Trial Examiner makes
the following.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. JURISDICTIONAL FINDINGS
A. Respondent, a corporation operating plants in Water-
town, South Dakota, is engaged in the sale and service
of truck and trailer equipment. In the course of its business,
it annually purchases raw materials valued in excess of
$50,000 which are shipped to its Watertown, South Dakota,
plants directly from points outside South Dakota It annually
sells products valued in excess of $50,000, which products
are shipped directly to points outside South Dakota.
Respondent is, and was at all times material herein, an
employer engaged in commerce within the meaning of
Section 2(6) and (7) or the Act 2
B. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
If THE UNFAIR LABOR PRACTICES
A. The Issues
The complaint, issued on December 18, alleges that at
all times since March 7 Respondent has refused to bargain
in good faith with the Union, which was certified as the
exclusive collective -bargaining agent for Respondent's pro-
duction and maintenance employees' in April 1964. The
complaint alleges certain specific acts as violative of the
Act, in addition to an overall pattern of bad-faith or surface
bargaining since March 7. The complaint further alleges
that Respondent violated Section 8(a)(1) by threatening
to discharge strikers and by advertising for workers to
replace the strikers Finally, it is alleged that Respondent
violated Section 8(a)(3) by discharging strikers.
Respondent maintains that the alleged discharge of strik-
ers and certain other specific alleged conduct, even if viola-
tive of the Act, have been fully remedied by Respondent's
compliance with a settlement agreement approved by the
Regional Director on July 23. Respondent contends that
it has no further obligation to bargain with the Union
I Ecept where other«t,e Indiw,,ted all date , hercm arL in 1969
' National Labor Relat,om Au a. amended (61 Stat 136 71 tit.u X19
19USC Sep ICI et,egI
The propriet% of the unit i. not in quewon
185 NLRB No. 55
SCHWEIGERS, INC 421
because by November 4 the parties had bargained to an
impasse and Respondent then had a good-faith doubt as
to the Union's continuing majority status, which doubt
Respondent sought to submit to the Board by filing a
representation petition on November 12 (18-RM-699).
Although the parties have not so argued the case, in
the Examiner's opinion the first issue to be decided is
whether Respondent violated the settlement agreement of
July 23 or thereafter committed unfair labor practices war-
ranting setting aside the settlement agreement Only if
it is first determined that the settlement agreement was
properly set aside and should not be reinstated, will it
be in order to determine whether Respondent committed
the presettlement violations alleged in the complaint. See
Furr's Cafeteria, Inc., 179 NLRB No 35, fn 1.
B. Background and Chronology
The Union was certified in April 1964. In all negotiations
after the certification, Respondent's chief bargaining spokes-
man was Henry N Teipel, an independent management
consultant with offices in Minneapolis. He was accompanied
by Don Schweiger, sole owner and manager of Respondent,
and Howard Landon, Respondent's sales manager. At all
times in 1965 and thereafter, the Union's bargaining was
conducted by Peter Popp, IAM Grand Lodge Representa-
tive, accompanied by an employee committee At two of
the meetings, another Grand Lodge Representative was
also present. Except to the limited extent specified below,
Teipel and Popp were the negotiators. An unfortunate
clash of personalities between these two men appears to
have colored much of the bargaining throughout!
The parties' first collective-bargaining agreement was
effective from April 1, 1966, through March 31, 1967.
Two successive 1-year contracts were then executed, the
last expiring on March 31, 1969 Prior to the expiration
of the third contract, both Respondent and the Union
gave notice of their desires to terminate. Negotiations for
a new contract commenced on March 7, 19691 The second
negotiating session, held on March 28, did not result in
a new agreement
Before the March 28 meeting, Popp attempted to enlist
the aid of the United States Mediation Service, but there
was no mediator available at that time However, Federal
conciliator Simon Zuiker arranged and conducted all the
negotiating sessions after March 28 At Mr. Zuiker's request,
the Union postponed a strike originally scheduled to start
April 1, the day after expiration of the contract.
On April 23 a strike and picketing began 6 The next
Popp testified that Grand Lodge Repre+entauic \ ogel ,uti ndcd thL Ia t
meeting on November 4 hccau e Mr ZuikLr the medi,itorl thought a+
long as Teipel kept blo"ing up It meeung+ and I ii,i+ hl.... in,-, hai,k at hun
he' picture "that another neii lace should wine into the'
' On the same day, Respondent was served with papers initiating
an action by the Union in the United States District Court seeking
to compel Respondent to arbitrate several grievances That action was
tried in November and was awaiting decision at the time of the present
heanng
The Union understood that Respondent had agreed to extend the
expired contract through April 22 Respondent denies that it had agreed
to any such extension It is unnecessary for the purpose of this Decision
to resolve any conflict on this point
bargaining session, on May 8, also failed to achieve agree-
ment on a contract. On May 13 the Union filed an unfair
labor practice charge alleging that Respondent had refused
to bargain in good faith since March 28 and had unlawfully
discharged the strikers Both the strike and contract negotia-
tions continued, with bargaining sessions being held on
May 26, June 9 and 16, and July 11.
On July 16 Respondent signed an informal settlement
agreement, which was then signed on behalf of the Union
and approved by the Regional Director on July 23 The
settlement agreement provided, inter alia, that Respondent
would bargain in good faith with the Union and would
reinstate the strikers "upon their unconditional application
to return to work "
Again, both the strike' and contract negotiations contin-
ued Negotiating meetings were held on August 5 and
19 and September 9, without successful consummation of
an agreement. At a meeting convened on November 4
Respondent announced 'its refusal to continue negotiations
on the grounds that the parties had reached an impasse
and Respondent believed that the Union no longer represent-
ed a majority of the unit employees Respondent reduced
its position to writing in letter addressed to the Union
on November 7 and on November 12 filed a petition
for a Board-conducted election (18-RM-699)
On November 29 the Union made a written request
for the resumption of negotiations In its letter the Union
maintained that no impasse existed and that Respondent
had wrongfully withdrawn recognition and refused to contin-
ue bargaining. Respondent did not reply to that letter
On December 18 the Regional Director issued an order
setting aside the settlement agreement on his conclusion
"that the Employer has failed and refused to bargain with
the Union in good faith" and "that the provisions of
the settlement agreement have not been carried out by
the Employer." Simultaneously the present complaint was
issued alleging misconduct both before and after the settle-
ment agreement On December 19 the Regional Director
dismissed Respondent's election petition because of the
pendency of the complaint. Respondent took no appeal
from this dismissal.8
C. Alleged Postsettlement Misconduct
1. Refusal to bargain
The complaint alleges that since March 7 Respondent
has negotiated "in bad faith and with no intention of
entering into any final or binding collective-bargaining agree-
ment " In addition, it is alleged that since March 29
Respondent has refused to negotiate concerning "job ratings,
job classifications and merit ratings" and the employee
group insurance plans, which Respondent unilaterally
changed on March 15. In the July settlement agreement
Respondent had committed itself to bargain in good faith
and, specifically, to meet "at reasonable times upon request"
' One striker returned to work on July 17 As of the time of the
present hearing, the remaining 10 stnkers were still out
° This fact was verified from the Board's records, of which the Examiner
takes official notice
422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and to "bargain, upon request . concerning changes
in the group insurance plan." Respondent contends that
it fully met its obligation under the Act and the settlement
agreement until November 4, when the parties had reached
an impasse, which relieved Respondent of the obligation
to continue bargaining
a The wage structure
The present negotiations were for the fourth agreement
between the parties The first agreement had taken 2 years
to negotiate. The 1967 and 1968 agreements had been
reached in two and three meetings, respectively, with a
2-week strike in 1968.
At the first meeting in 1969, on March 7, Respondent
offered a wage increase of 8 cents per hour Teipel credibly
testified that the Company took the relatively unusual step
of making a wage offer before noneconomic matters were
disposed of to communicate its desire to reach agreement
expeditiously He reasonably contended that the 8 cents
was considered a substantial first offer in view of the
fact that the 1966, 1967 and 1968 agreements had been
reached at hourly increases of 10 cents, 10 cents and
15 cents, respectively.
At the second meeting, on March 28, after being served
in litigation brought by the Union, Respondent demanded
elimination of the checkoff, the only contract change it
sought. Teipel testified that this demand was purely strategic
and it was not pressed to impasse.
At the March 7 meeting the Union presented 26 numbered
demands for contract changes.' These demands were
reviewed seriatim and agreement was reached on some
before the meeting adjourned.
One of the Union's major demands was. "Delete present
merit system. Provide job classifications. Provide 50 cents
increase [across] the Board " The Union orally listed eight
or nine classifications, within which it wanted automatic
wage progressions to specified maximum rates The matter
was discussed at virtually all subsequent meetings with
Respondent stating its opposition to job classifications and
automatic increases. Teipel said that the classifications were
unnecessary in such a small plant; that Respondent's opera-
tions did not call for highly skilled workers; and that
the Company desired to continue its established policy
of encouraging and rewarding individual performance.
The Union's demand for job classifications with automatic
wage progressions within classifications had been a promi-
nent issue in the negotiations in 1967 and 1968 10 In those
years the Company had successfully bargained for incorpo-
rating into the agreement its long-established policy of
periodic wage reviews and semiannual performance evalua-
tions for merit increases to individual employees. The disa-
greement between the parties was sharp and concerned
basic principles. Although there were several unresolved
issues between the parties, as the 1969 negotiations pro-
gressed, they were more and more dominated by the issue
Since several of the demands were multipart, the actual number
was higher
10 There is no specific evidence as to whether this matter was also
disputed in connection with the original contract , executed in 1966
of evaluation of individual ability versus job classification
as the basis of determining wages and wage increases
Both sides made some concessions on various issues
On June 30, Respondent proposed a 3-year contract with
annual increases of 10 cents, 12 cents and 15 cents, along
with some other concessions The Union membership, agree-
ing with Popp's opinion, rejected this offer. Job classifica-
tions and automatic wage progression remained a Union
demand and Respondent persisted in rejecting the demand.
The Company did state that it might consider three classifi-
cations of shop craftsman, shop assembler and shop helper,
but Respondent offered no definitions of the three classifica-
tions and the suggestion was abandoned without any discus-
sion or serious consideration. The basic issue of individual
wages based on merit versus job classifications with automat-
ic increases remained the major subject of discussion, with
no perceptible progress having been made thereon in the
eight bargaining sessions held before July 26, when the
settlement agreement was reached, subject to the Regional
Director's approval
On August 5, at the first meeting after the settlement,
Respondent offered to adopt either the 3M or the National
Metal Trades job evaluation plan, but the Union would
not consider these " That meeting was ended by the mediator
because, in Popp's words, "The Union took the position
that we got to have the wage and job classification" and
that "unless the union accepts the merit system and the
job evaluation program and drop all other issues, there
is no use meeting any more."
Teipel was unable to attend the next meeting, on August
19, and Messrs. Schweiger and Landon bargained for
Respondent. In the morning Popp presented a written
proposal on job classifications and wages. He proposed
five classifications of "production workers" and three in
the "truck trailer and body mechanic department " The
proposal called for automatic increases in specified amounts
for each classification at the end of 30 days, 3 months
and 6 months, with specified amounts available for merit
increases thereafter. The Union proposal further provided
that Respondent would state reasons whenever a merit
increase was denied and denial would be subject to the
contractual grievance and arbitration provisions of the col-
lective-bargaining agreement 12
A discussion ensued, concerned primarily with the place-
ment of individual employees within the suggested classifica-
tion. Then, after a luncheon recess, Schweiger presented
a countersuggestion of five named classifications, which
coincided with Popp's proposed classifications of "produc-
tion workers," with one title changed. Schweiger's proposal
did not include any wage rates but there was some discussion
" The plans were not described at the hearing The Company offered
a copy of the 3M plan to the union negotiators for inspection but
the offer was rejected IAM representatives would presumably be familiar
with the National Metal Trades plan
" There was an unresolved conflict between Popp and Teipel as
to whether the denial of ment increases had previously been subject
to grievance Popp apparently maintained that the Company had taken
that position that denial of merit increases was not subject to grievance
No such grievance apparently had ever been brought, Popp maintaining
that the Union had simply recognized the futility of doing so Teipel,
however, testified that Respondent considered such denial as grievable
SCHWEIGERS, INC
of that matter , with the Union translating its proposed
wage ranges to Schweiger 's alternative classifications.
According to Popp , Schweiger was not unreceptive to the
principle of automatic wage progression but felt he could
not adopt Popp 's detailed proposal in all respects because
of the high wage level. Popp 's testimony continued.
Q. On August 19th, was there any agreement between
the Union and the company on wage rates?
A. . After we discussed all this, Mr Schweiger
thought we was too high. He also was happy with
the idea of the classifications , and he says he wants,
now he wanted a recess to study the union 's wages
and classifications . . . So he got up, and when
he got up, Mr . Landon says to me, "Say, Pete, if
we grant you these wages and grant you this classifica-
tion , have we got a contract?" I says, "If you grant
us this and whatever has been granted to us in the
past , I will even go better than that , I will reduce
some $3.25 , just so we have a contract ." So he says,
"You will?" Then they both walked out smiling.
Substantially corroborating Popp , Schweiger testified that
he "had no objection to the classifications" but that the
problems involved the placement of the employees within
the classifications and "the subject of automatic wage pro-
gression ." Schweiger acknowledged that he had agreed that
he "would seriously consider the subject discussed that
day."
At the next meeting, held on September 9, Teipel stated
that Respondent would not agree to wage classifications
and insisted upon retaining the Company 's job evaluation
and merit review system . According to Popp, Teipel "acted
like he didn 't hear" Popp 's inquiries concerning the classifi-
cations discussed at length during the August 19 meeting.
Popp maintained that Teipel gave no explanation of
Respondent 's rejection of the job classification plan, but
simply insisted on Respondent 's most recent offer, which
the Union membership had previously rejected.
Teipel testified that he explained Respondent 's objection
that the Union 's proposal of August 19 "cuts the guts
out of the Company's previous merit review program "
His analysis disclosed that the Union 's demand provided
automatic wage increases from two to three times as large
as possible merit increases." This analysis is accurate."
Wherever the truth lies as to extent of Teipel 's explanation
of the Company 's position at the September 9 meeting,
there is no dispute that the discussion became "heated"
and the mediator ended the meeting before lunchtime.
The General Counsel maintains that Respondent was
guilty of refusal to bargain on September 9 when "Teipel
refused to discuss job classifications , reverted to the merit-
review proposals , and thereby withdrew agreement to the
" Teipel's wording was that the schedule "shows about anywhere
from two-thirds to three-fourths of the spread from the bottom to the
top is automatic "
" For example, for the highest classification the Union proposed a
minimum hourly rate of $2 increased to $2 30 in 30 days, to $2 60
after 3 months, and $2 90 at 6 months, with an additional 35 cents
then available for merit increases, up to a maximum of $3 25 per hour
at the end of a year For janitor, the Union proposed a minimum
of $1 80, increasing to $1 95 in 30 days, $2 10 in 3 months, and $225
in 6 months, with an additional 15 cents for merit increases
423
job classifications" which had been "proposed by Respond-
ent." But, as Popp conceded, no agreement had been reached
in the August 19 meeting His testimony itself indicates
that Schweiger had shown himself amenable only to the
possibility of five designated classifications and had declined
to discuss wages as such. Schweiger's "proposal" of classifi-
cations contained no reference to wage ranges or progression
Agreement on classifications in itself would serve no purpose
absent mutual understanding as to the use of which classifi-
cations would be put, and there is no evidence that Schweiger
indicated willingness to abandon merit evaluation as the
dominant factor in employees' monetary advancement
The conclusion is inescapable that, in their desire to
reach ultimate agreement, Popp and Schweiger avoided
discussion of the real issue in dispute It was Teipel's
subsequent analysis which laid bare the insubstantiality
of the apparent rapport between Popp and Schwefger."
On all the evidence, the Examiner concludes that the
General Counsel has failed to establish that on September
9 Respondent in bad faith withdrew a tentative agreement
previously reached. On September 9 the parties were, as
they had been for some time, deadlocked on the fundamental
issue of wage determination.
Nothing had changed by November 4, when the twelfth,
the final, meeting was held. Popp's testimony leaves no
doubt that the Union was not prepared to enter any contract
without agreement on "the wages and job classifications "1fi
That issue had been discussed at almost all of the 1969
meetings and in the course of negotiating the 1967 and
1968 agreements. There is no suggestion that the Union
was prepared on November 4 to present any offer or
argument calculated to change Respondent's position Thus,
even if there were other unresolved issues," further negotia-
tions would have been futile
The General Counsel maintains that "the whole course
of bargaining shows a fixed intent on the Respondent's
part not to agree to relinquish control over wage rates
and wage increases." This statement embodies an exaggera-
tion of Respondent's position Respondent was offering
across-the-board increases to existing employees. And it
was committing itself to periodic reviews of wages generally
and semiannual evaluation of individual employees. Popp
" Presumably Teipel had been retained by Respondent for just this
sort of analytical advice According to Popp, Teipel had caused Schwerger
to stiffen his position on another item in the second bargaining session,
on March 28 Popp testified "The [Union's] proposal number 7, at
that time Mr Schweiger claimed he had no problem with that
now Mr Tefpel then whispered to him, `Pete is trying to give you
the shaft here' So then he said no afterwards, he pointed out, I suppose,
the shaft we had been giving him "
On cross-examination, Popp testified
Q So in your opinion the merit review was probably one
of the chief issues keeping the parties apart?
A And the job classifications, none of them had a job classification
Here is where an agreement would have resulted, what they had
agreed to give me plus the wages and job classifications, then there
would have been
" It is not clear what, if any, substantial issues remained At one
point Popp testified that the Union's "discrimination" clause remained
a hard-core issue However, although the record is somewhat confused,
it appears that on June 30 Respondent had offered to accept the Union's
proposed "discrimination" clause as amended in a manner satisfactory
to the Union The insurance issue is discussed below
424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
testified that Respondent had refused to consider the denial
of merit increases a subject to the grievance procedure
in the contract, although on this point his testimony was
somewhat confused. Teipel, however, testified that Respond-
ent did consider the denial of merit increases to be a
proper subject of grievance.1e The Union's 1969 demands
included a provision that the denial of ment increases
was to be subject to grievance. However, that provision
appears not to have been specifically discussed because
of the basic disagreement as to the wage structure.
The record does not establish that Respondent was insist-
ing upon unfettered control over wages; it shows only
that Respondent was unwilling to relinquish as much control
as the Union was demanding
In any event, it is not per se an unfair labor practice
for an employer to bargain for a contractual provision
giving it unilateral control over a term or condition of
employment. See NL.R B. v American National Insurance
Co., 343 U.S. 395 On the other hand, insistence on virtually
unfettered control over wages may constitute one factor
evidencing an overall pattern of 'bargaining in bad faith
with no desire to reach agreement. Tex-Tan Welhausen
Co., 172 NLRB No 93, enfd. 419 F 2d 1265 (C.A 5);
East Texas Steel Castings Co., 154 NLRB 1080 On the
record in this case, the Examiner cannot conclude that
Respondent's insistence upon merit evaluation as the corner-
stone of its wage policy was violative of the Act Obviously
it cannot be said Respondent's proposal was one which
it knew the Union would certainly reject, in view of the
fact that the Union had accepted it in three prior contracts
Respondent had already made several concessions and,
as heretofore noted, had offered a 3-year contract with
annual across-the-board increases of 10 cents, 12 cents,
and 15 cents per hour in addition to continuation of the
existing merit increase provisions.19 Additionally, Respond-
ent had proposed limited job classification plans, apparently
retaining merit evaluation, but the Union had refused to
consider them.
It is clear, as the Federal mediator recognized, that
by November 4, the parties' respective positions on wage
determination policy had so hardened that further discussion
was then impossible
The General Counsel contends that if an impasse existed
on November 4, it was broken on November 29, when
the Union wrote a "come-down" letter and requested
" Teipel apparently stated this position in the course of the negotiations
Popp testified "During negotiations Mr Teipel would say it is covered
And to make sure we all know about it, let's add the clause that
the merit review is covered, but he would refuse Q And because you
felt that the merit rating system was not subject to the grievance procedure
you did not file any grievances9 A Right Subsequently after that because
these grievances happened in the beginning "
" Popp testified that on July I I the Union "accepted the wage offer"
In view of the Union's continued insistence on job classifications with
specified wage rates and automatic wage progression, it is difficult to
understand what "acceptance" of Respondent's wage offer entailed As
late as November 29 the Union's written proposal called for hourly
rate increases ranging from 45 cents to 90 cents (all but one classification
getting 60 cents or more) within 6 months Popp also testified that
on July 11 the Union said it would agree to a 3-year contract only
if there was a cost-of-living provision, to which Respondent had not
agreed and which the Union had agreed to drop from its demands
in a 1-year contract
resumption of bargaining. In that letter Popp said that
there were "still many open issues to talk about"; that
he was "flexible about [his] job classifications and wage
rate proposals"; and that "[t]he union has not made final
demands " However, Popp's letter then proceded.
Subject to agreement on a complete contract I propose
these lower wage rates to go with Mr. Schweiger's
job classification that I accepted.
There followed a classification and wage rate schedule
precisely the same as that submitted by the Union on
August 19 except that each figure had been reduced by
5 cents There was no retreat from the Union's eight
classifications," the amount and timing of automatic increas-
es within classifications, or the amounts available for addi-
tional merit increases Since Popp had indicated on August
19, when he presented the wntten proposal, that he was
willing to lower the wage level he demanded, the November
29 proposal represented no new concession Thus there
was no substantial change in the Union's position on the
impasse issue. It is only "[w]here the position of one of
the parties undergoes a substantial change" that an impasse
can be said to have been broken so as to render further
bargaining potentially fruitful Webb Furniture Corp., 152
NLRB 1526, 1529, enfd. 366 F 2d 314 (C.A 4); Sharon
Hats, Inc., 127 NLRB 947, enfd 289 F.2d 628 (C.A.
5). In context, the Union's retreat of 5 cents per hour
from its August 19 proposed wage schedule was "trivial
or meaningless " N.L.R B. v Webb Furniture Corp., 366
F.2d 314, 316 (C A. 4), Transport Co. of Texas, 175 NLRB
No 130 (TXD).
On all the evidence, the Examiner finds that the parties
bargained to an impasse on the wage structure issue and
that the impasse was not broken by the Union's letter
of November 29
b Group insurance
Early in March Respondent announced to the employees
changes in the Company's group insurance plan without
consultation with the Union 2i
Among the 26 demands for contract changes presented
by the Union at the first negotiating session, on March
7, was adoption of the IAM health and welfare,plan at
no cost to the employees. Popp complained of the Company's
having made changes without bargaining with the Union.
But, so far as appears, the Union did not direct any
specific objections to the changes made in the existing
policy but was concerned with securing adoption of the
IAM plan.
The Union's charge alleged the unilateral changes in
the group insurance plan as violative of Section 8(a)(5)
of the Act. In the settlement agreement of July, Respondent
" ° Mr Schweiger had listed only five on August 19
" Respondent introduced undisputed evidence that the changes consti-
tuted an "upgrading" of the policy, with increased benefits and premiums
Respondent's evidence was also undisputed that the changes, effective
March 15, had been required by the insurer, with Respondent given
no alternative other than to adopt the new terms or have the coverage
terminated The plan is voluntary for the individual employees and is
financed jointly by the employer and participating employees
SCHWEiGERS, INC
specifically agreed to "bargain upon request , with [the
Union] concerning changes in the group insurance plan "
The matter was discussed at the first postsettlement
bargaining session, on August 5 . According to Teipel and
Schweiger , Schweiger stated that the existing plan had
been studied by independent insurance agents who had
unanimously stated that they could not offer better, or
even as good , coverage at comparable cost. Schweiger further
testified that the insurance had proved very satisfactory.
Schweiger also testified that he said he was amenable to
consideration of any alternative the Union might present
which provided as good or better coverage at the same
or lower cost Concerning the Union 's demand for adoption
of the IAM funds , Teipel testified that he explained at
some length that he had had considerable experience with
jointly administered welfare funds and had found them
generally unsatisfactory.
Popp denied that Respondent had explained its position.
He maintained that the Company representatives took an
uncompromising , take-it-or-leave-it position that it would
not consider any alternative to its existing plan under
any circumstances . However, Popp also testified that
Respondent refused his demand for data he needed "so
[he] could give them a quote." He testified that, although
the Company gave him the booklet describing the benefits,
it gave provided data enabling him to "make a determination
of relative costs ." Thus Popp's testimony itself indicates
that he believed himself free to submit an alternative plan
for consideration . There is no indication that he ever serious-
ly suggested consideration of any alternative other than
the IAM health and welfare program, as originally demand-
ed
On all the evidence , and the demeanor of the witnesses,
the Examiner credits Schweiger 's and Teipel 's testimony
and finds that, while rejecting the IAM health and welfare
program, Respondent left open the door for the Union
to present for consideration an alternative insurance plan.22
However, the Union never renewed its request for relevant
information . After August 5 the Union made no attempt
to discuss the matter because, in Popp's words, "It was
considered a dead issue . They had gave us no answer."
So far as appears , it was not until its letter of November
29 that the Union again mentioned insurance coverage.
In that letter , Popp said.
I think your withdrawal of recognition was the wrong
thing to do because we still have many open issues
to talk about There is the insurance question that
you agreed to bargain about.
Popp did not suggest that he had any new proposal or
argument to make on this issue. Under all the
circumstances , it cannot be found that Respondent ' s failure
to reply to the November 29 letter constituted a breach of
its commitment to "bargain , upon request concerning
changes in the group insurance plan."23
" Respondent 's evidence suggests that to be given any consideration,
any alternative must, like the existing plan, be available to all Company
personnel , not merely unit employees
" In view of the impasse on the wage classification issue , it is difficult
to see what purpose could be served by resuming negotiations to reopen
an additional Union demand
425
On all the evidence , the Examiner concludes that
Respondent was not guilty of any unlawful refusal to
bargain in violation of either Section 8(a)(5) of the Act or
the July settlement agreement in the period July 23 through
November 4, when a genuine impasse existed
c Frequenci of nieeltnes
The fact that there were only four meetings after approval
of the settlement agreement does not establish a refusal
to bargain on Respondent 's part . August 5, less than 2
weeks after approval of the settlement agreement , was the
date set by the conciliator That meeting commenced at
9:30 a . m. and by 11:30 the discussion had become so
"heated" that the mediator separated the parties and kept
them separated when the session resumed at 1.30, after
lunch The meeting was then terminated at about 2:40
p.m. Although Popp complained that Respondent would
not devote sufficient time to negotiating and that meetings
were prematurely ended to enable Teipel to make the
afternoon plane to Minneapolis , Popp conceded that at
the August 5 meeting the "Union took a position that
we got to have the wage and job classification " and the
meeting was adjourned when the mediator , having met
separately with each side, said ' "that unless the Union
accepts the merit system and the job evaluation program
and drop all other issues , there is no use meeting any
more " Before the participants left, the mediator scheduled
a further meeting for August 19 The August 19 meeting,
from which Teipel was absent, was very satisfactory to
Popp . The next meeting, on September 9, was ended in
the morning because the mediator "thought [the parties]
were too heated up" and Popp expressed his agreement
that "maybe it is a good idea we don't meet today because
they are hot, or [Teipel] is putting on a good show, one
or the two "
Thereafter , on September 24, in response to a request
for a compliance report, Respondent wrote to the Regional
Compliance Officer , that , inter alia:
It appears that the Employer and the Union have
been at a Deadlock situation since the Union is insisting
on the elimination of some clauses from the previous
agreement and also the inclusion of several new clauses
which the Employer feels are unnecessary and undesira-
ble. The Union in our opinion , is unwilling to move
off their many demands and there are many unresolved
issues
*
Regarding meeting at reasonable times to bargain, I
believe the Federal Conciliator's minutes would show
that each meeting has been set a mutually agreed
date At no time have we refused to meet at a time
requested by the Union or the Federal Conciliator.
These statements are fully supported by the evidence
adduced at the present hearing.
The conciliator then attempted to schedule a further
meeting for October 22, but Teipel was unavailable on
that date and it was set for and held on November 4
There is no evidence that the postponement represented
bad faith "stalling" by Respondent. As set forth below,
426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the November 4 meeting served further to harden an
impasse. The evidence establishes that no useful purpose
would have been served by extending that meeting, which
was ended shortly after it began.
There is no basis for concluding, as the General Counsel
maintains, that potentially fruitful negotiations were prevent-
ed by Teipel's haste to make a plane. On the record
as a whole, the Examiner finds that the General Counsel
has not established that Respondent failed and refused
to meet at reasonable times for contract negotiations after
July 23
2 Withdrawal of recognition
a. The violation
The only other postsettlement unfair labor practice alleged
is Respondent's withdrawal of recognition of the Union
on November 4. There is no dispute that on November
4 Respondent announced its refusal to bargain further
not only because of the existence of an impasse and but
also because of its doubt as to the Union' s continuing
majority.
At the hearing Respondent's counsel presented the Com-
pany's good-faith doubt of the Union's majority only as
alternative defense to the refusal-to-bargain allegation 24
However, Respondent's two positions cannot be treated
as alternative defenses, with decision favorable to Respond-
ent on the impasse issue being completely dispositive, since
two separate unfair labor practices are alleged, i.e., refusal
to bargain and refusal to recognize. The existence of an
impasse may constitute a defense to a refusal-to-bargain
accusation, but it cannot warrant withdrawal of recognition
from the employees' bargaining representative. The distinc-
tion is not merely technical, but, on the contrary, has
important practical ramifications, not the least of which
are an employer's obligations to resume negotiations if
the union should alter its bargaining demands sufficiently
to break the impasse, and to consult the union before
making any changes in wages or terms and conditions
of employment.
The General Counsel and Respondent apparently view
the determinative question as being whether by November
4 Respondent had bargained in good faith for a "reasonable
time" after the settlement before questioning the Union's
majority. I. M. Jaffe and Sons, 176 NLRB No. 66. W.
B Johnson Grain Co, 154 NLRB 1115 enfd 365 F.2d
582 (C.A. 10); Poole Foundry & Machine Co., 95 NLRB
34, enfd. 192 F.2d 740 (C A. 4), cert. denied, 342 U S.
945; N.L.R.B v. Shurtenda Steaks, Inc., 397 F.2d 939
(C.A 10). In the Examiner's opinion, however, it is unneces-
sary to determine whether Respondent bargained with the
Union for a "reasonable time" after execution of the settle-
" In his opening statement he said "Secondly, and failing the efficacy
of the impasse defense, or in the alternative, we believe, we have good
faith doubts that this union no longer represents a majority of the
and as of the last meeting , namely, November 4, 1969, the company
advised the union of this doubt and expressed to the union, so stating
categorically, that it saw no further need for continued recognition on
the part of the company toward the union "
ment agreement because, for the reasons hereinafter set
forth, it cannot be found that Respondent had a good-
faith doubt of the Union's continuing majority
Respondent asserts that "There is no dispute that the
Union lacked majority status when the Company withdrew
recognition at the November 4 meeting "25 Respondent bases
its claim that the Union had lost its majority on the
alleged fact that on November 4 it had working 9 full-
time and 7 "regular part-time" employees, while only 10
employees were out on strike. In its brief Respondent
says that "the Union lost its majority because the Company
continued in operation and hired replacements for the eco-
nomic strikers "26 While the General Counsel does not
explicitly concede that the Union had lost its majority
status, neither does he deny such loss, contending that
"even if the Union did not represent a majority of the
employees in the unit on November 4, a bargaining order
here is nonetheless warranted "
In the Examiner's opinion, Respondent's position is
foreclosed by the settlement agreement, in which
Respondent made an unqualified commitment to "offer
immediate reinstatement" to all the strikers "upon their
unconditional application to return to work." As recently as
September 24, in a compliance report to the Board,
Respondent had recognized continuing obligation in the
following terms
The personnel records of Schweigers, Inc. have been
changed so the employees who went on strike have
been changed from "Voluntary Quit" to "Current
Employee." If any or all employees on strike
ask for work, he or they will be immediately put
to work.
Thus, Respondent had waived any right it might have
had to replace the strikers permanently. Without litigating
the question of the nature of the strike, Respondent had,
in effect, agreed to give the strikers the status of unfair-
labor-practice strikers. Since Respondent by the settlement
had, in effect, agreed to consider the strike as an unfair-
labor-practice strike, "the Company is precluded from rely-
ing on the number of replacements hired during [the]
strike as evidence rebutting the presumption of continuing
majority status." ` l R B % Ft is A 423 F 2d 1327
(C.A. 3)
In addition, the record totally fails to support a contention
that the strikers have been permanently replaced Even
if the strike was purely economic and if Respondent had
not by the settlement agreement renounced its right to
replace the strikers permanently, the burden would be on
Respondent to establish that they had been permanently
replaced Elam v. N.L.R.B., 395 F.2d 611, 614 (C A D.C.).
Respondent made no attempt to meet this burden. On
the contrary, on questioning by the Examiner, Teipel clearly
" In an opening statement at the hearing , Respondent 's counsel claimed
only a good-faith doubt, which Respondent attempted to have resolved
by an election
" In a letter to the Union on November 7, Respondent said "While
both of us exercised over legal rights, you have, as a result, lost your
majority status as representative of our employees Under these circum-
stances, and as evidence of our good faith in this matter, we are petitioning
the National Labor Relations Board for an election to resolve this ques-
tion "
SCHWEIGERS, INC 427
indicated that at least the 7 part-time employees were
hired temporarily. In this connection, his testimony was,
in part-
. . . We hope[d] the strike would be resolved and
we attempted to get it resolved and if it did then
these men would be, of course, back at school and
so on, so I would say that we did not originally
hold them as men who were being hired on a permanent
basis.
TRIAL EXAMINER. Do you know whether they were
told that this was a temporary job, in effect, pending
resolution of the company's problems?
THE WiTNESS: I think this was pretty well under-
stood. These were men who were only here at the
vocational school and graduating and moving on, and
those that were hired in, say, April, many of them
graduated in May or June and it was obvious that
they would not continue even to reside here.
While Teipel disclaimed intimate knowledge of Respondent'F
operations, his testimony remains uncontradicted, since no
other evidence was adduced on this issue.
The fact that in May Respondent advertised in the local
newspapers for employees, with one of the advertisements
specifically seeking "permanent employees," does not alter
this finding, as in view of Teipel's testimony that it was
not until after the settlement agreement that the Company
began to be concerned about the status of the new employees.
Teipel testified
A. . because we were very anxious on compliance
and I was particularly concerned that the company
incur no potential liability by not properly reinstating
employees who might be coming back to work or
offering too we so were continuously discussing who
is working now and has anybody come back and
if they did make sure you reinstate them right away,
so we were in the process, I was continually inquiring
on the head counting status to make sure we were
not incurring any potential liability of backpay
*
. . it became very evident as we counted, when
we started to count heads we discovered, I don't remem-
ber exactly when this occurred, that we might be
negotiating here with a minority-status union. After
mulling this for some time and getting counsel on
it, we finally agreed that we were probably in a rather
dangerous position, especially if some of the currently
working employees started to raise some kind of fuss
Popp testified that, in response to Respondent's inquiries
on August 5 and September 9, he had reported that all
the strikers intended to return to work for Respondent
at the end of the strike.
According to overtime records in evidence, during the
year proceeding the strike Respondent employed a maximum
of 14 full-time employees within the bargaining unit. In
other evidence, the maximum number of bargaining unit
employees before the strike was placed at 16. It appears
that additional employees, principally students, were cus-
tomarily hired on only a temporary and/or part-time basis.
It certainly cannot be assumed that Respondent intended
to retain its November 4 complement of nine full-time
and seven part -time employees if and when , in compliance
with the settlement agreement , it reinstated the ten strikers
on their request.
Accordingly , with the strikers retaining employee status,
Respondent had no legitimate basis for doubting the Union's
continuing majority . Cf. N.L.R.B v. Frick Co, supra. The
withdrawal of recognition on November 4 was, therefore,
violative of the settlement agreement and of the Act, even
though , as hitherto found , Respondent 's obligation to bar-
gain was suspended by the existence of an impasse reached
after good -faith bargaining
b. Effect of violation
Ordinarily Respondent's unlawful withdrawal of recogni-
tion, being a substantial violation of both the Act and
the settlement agreement, would call for setting aside the
settlement agreement and determination of the alleged pre-
settlement unfair labor practices. However, such action
appears unsuited to the special circumstances of the present
case.
In the settlement agreement Respondent committed itself
not to deal directly with the employees There is no allegation
or suggestion that Respondent has broken that promise.
So long as the settlement is in effect and Respondent
is bound to recognize the Union, direct dealing with the
employees will be unlawful. Accordingly, no useful purpose
would be served by determining whether the General Coun-
sel has established, as alleged in the complaint, that Respond-
ent bargained directly with the employees on March 29.
A present finding that Respondent refused to bargain
in good faith before the settlement agreement would lead
to a bargaining order. But, as heretofore found, since the
settlement agreement Respondent has bargained in good
faith and an impasse has been reached. Regardless of the
nature of Respondent's presettlement bargaining, it would
not effectuate the purposes of the Act to order bargaining
while a genuine impasse exists.
To remedy the alleged presettlement unilateral change
in the Company's insurance plan, the settlement agreement
provided that Respondent would bargain concerning insur-
ance As found above, that issue was negotiated and will
be further bargainable if and when the impasse is broken.
See Central Illinois Public Service Co., 139 NLRB 1407,
1417-20, enfd 324 F.2d 916 (C.A. 7).
The only postsettlement violation, i.e. withdrawal of rec-
ognition, basically centers around the status of the strikers.
As noted above, the settlement agreement granted the strik-
ers the rights of unfair-labor-practice strikers If the preset-
tlement allegations of the complaint were litigated and
the General Counsel were fully successful in establishing
his contention that the strike was an unfair-labor-practice
strike, the resulting order could give the strikers no greater
rights than they had under the settlement agreement.
On the basis of the foregoing considerations, the Examiner
believes that the policies of the Act will be best effectuated
by reinstatement of the settlement agreement which was
set aside by the Regional Director and issuance of an
order prohibiting Respondent from refusing to recognize
the Union as the collective-bargaining representative of
428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent's employees This conclusion obviates the neces-
sity of passing on the allegations of presettlement miscon-
duct.
then be held in abeyance pending a motion to dismiss
the complaint upon full compliance herewith by Respond-
ent.27
CONCLUSIONS OF LAW
1. Respondent, Schweigers, Inc., is an employer engaged
in commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
2 Local 2357, International Association of Machinists
and Aerospace Workers, AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act
3 All production and maintenance employees, all mechan-
ics, welders, trailer repairmen and blacksmiths; excluding
the sales personnel, office employees, professional employees,
guards and supervisors as defined in the Act constitute
a unit appropriate for the purposes of
within the meaning of Section 9(b) of the Act.
4. At all times material, the Union has been, and is
still, the exclusive bargaining representative of all the
employees in the appropriate unit for the purposes of collec-
tive bargaining in respect to rates of pay, wages, hours
of employment, or other conditions of employment, within
the meaning of Section 9(a) of the Act.
5. By refusing to recognize the Union as the exclusive
representative of its employees in the appropriate unit on
November 4, 1969, and at all times thereafter, Respondent
has engaged, and is engaging , in an unfair labor practice
within the meaning of Section 8(a)(5) and (1) of the Act.
6. Respondent has not engaged in any unfair labor prac-
tices other than as set forth in conclusion 5, above
7 Except as set forth in conclusion 5, above, Respondent
has not failed to comply with the terms of the settlement
agreement in this case approved by the Regional Director
for the Eighteenth Region on July 23, 1969.
8. The unfair labor practice described in conclusion 5
above is an unfair labor practice affecting commerce within
the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has wrongfully withdrawn
recognition of the Union as the representative of its employ-
ees, the Examiner will recommend that Respondent be
ordered to cease and desist from refusing to recognize
the Union. A customary notice-posting requirement will
be included
For reasons explicated above, under the heading "Effect
of Violation," the Examiner will not recommend issuance
of an affirmative order to bargain. Rather, it will be recom-
mended that the settlement agreement approved by the
Regional Director on July 23, 1969, but set aside on Decem-
ber 18, 1969, be reinstated Respondent's conduct will there-
after be governed by that settlement agreement, as imple-
mented by the order here recommended
Although the Examiner has found that the General
Counsel has not established the commission of other unfair
labor practices warranting a remedial order, it will not
be recommended that any portion of the complaint be
dismissed at this time. Rather, it will be recommended
that the settlement agreement be reinstated and the case
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and
conclusions of law, and upon the entire record in this
case, and pursuant to Section 10(c) of the National Labor
Relations Act, as amended, Respondent, Schweigers, Inc.,
its officers, agents, successors and assigns, shall
1. Cease and desist from:
(a) Failing and refusing to recognize Local 2357, Interna-
tional Association of Machinists and Aerospace Workers,
AFL-CIO, as the exclusive collective- bargaining representa-
tive of its employees in the following unit:
All production and maintenance employees, all mechanics,
welders, trailer repairmen and blacksmiths, excluding the
sales personnel, office employees, professional employees,
guards and supervisors as defined in the National Labor
Relations Act, as amended.
(b) In any like or related manner interfering with the
nghts of employees guaranteed in Section 7 of the Act
2. (a) Recognize Local 2357, International Association
of Machinists and Aerospace Workers, AFL-CIO, as the
exclusive collective-bargaining representative of Respond-
ent's employees in the above-described unit.
(b) Post at its Watertown, South Dakota, plant copies
of the attached notice marked "Appendix"" and of the
notice, dated "7/16/69," attached to the settlement agree-
ment approved by the Regional Director for Region 18
on July 23, 1969. Copies of said notices, on forms provided
by the Regional Director for Region 18, shall, after being
duly signed by its representative, be posted immediately
upon receipt thereof and be maintained by it for 60 consecu-
tive days thereafter in conspicuous places, including all
places where notices to employees are customarily posted.
Reasonable steps shall be taken to ensure that said notices
are not altered, defaced, or covered by any other material
(c) Notify the Regional Director for Region 18, in writing,
within 20 days from receipt of this Recommended Order,
what steps Respondent has taken to comply herewith.29
" There appears to be no impediment to the issuance of a final
order with respect to part of the complaint while other portions remain
outstanding See I U E ( rudee Produ(n) v V L R B 426 F 2d 1243
(C A D C ), Federal Power Commission v Tennessee Gas Transmission
Co,371US 145
" In the event no exceptions be filed as provided by Sec 102 46
of the Rules and Regulations of the Board, the findings, conclusions,
recommendations , and Recommended Order herein , shall, as provided
in Sec 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 In the event that the Board's
Order be enforced by a judgment of a United States Court of Appeals,
the words in the notice reading "Posted by Order of the National
Labor Relations Board" shall 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 "
" In the event that this Recommended Order be 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 "
SCHWEIGERS, INC 429
3. The settlement agreement approved by the Regional
Director for Region 18 on July 23 , 1969, and set aside
on December 18, 1969 , is hereby reinstated.
4. The present proceeding is adjourned indefinitely,
pending final disposition on subsequent motion
WE WILL NOT refuse or fail to recognize said Union
as the exclusive collective -bargaining representative of
our production and maintenance employees or in any
like or related manner interfere with the rights of
our employees guaranteed by Section 7 of the National
Labor Relations Act, as amended.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a trial in which both sides had the opportunity
to present their evidence , the National Labor Relations
Board has found that we violated the law and has ordered
us to post this Notice and we intend to carry out the
order of the Board and abide by the following:
WE WILL recognize Local 2357, International
Association of Machinists and Aerospace Workers,
AFL-CIO, as the exclusive collective -bargaining repre-
sentative of our production and maintenance employees
in Watertown , South Dakota.
SCHWEIGERS, INC.
(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, 316
Federal Building , 110 South Fourth Street, Minneapolis,
Minnesota 55401 , Telephone 612-725-2611.