Shell Oil Co.

National Labor Relations Board - Board Decisions

Oct 29, 1964

149 N.L.R.B. 305 (N.L.R.B. 1964)

SHELL OIL COMPANY 305
during the strike, and certain new provisions in the current contract permitting
relaxation of craft lines and permitting operating employees to do minor mainte-
nance work , account in considerable measure for the Company 's ability to operate
with fewer employees . Finally, the completion of the contracts here challenged as
improperly let appears to moot any claim for reinstatement even if the record
established ( as it does `not) that particular employees were laid off or not called
back because such contracts were let. Similarly , in my judgment , any attempt to
determine which if any employees might be entitled to backpay based on recon-
structing the situation which would have prevailed had the contracts not been let,
would involve unreal speculations and imaginary conclusions , would only tend to
exacerbate feelings within the Union as well as between the Union and the Com-
pany, and, in short, would not effectuate the policies of the Act. As in Shell Oil,
therefore , I do not recommend a reinstatement or backpay order.
[Recommended Order omitted from publication.]
Shell Oil Company and Local 7-389, Oil , Chemical and Atomic
Workers' International Union , AFL-CIO . Case No. 7-CA-4359.
October 29, 1964
DECISION AND ORDER
On April 14, 1964, Trial Examiner David London issued his De-
cision in the above-entitled proceeding, finding that Respondent had
engaged in and was engaging in certain unfair labor practices viola-
tive of Section 8(a) (5) and (1) of the Act and recommending that
it cease and desist therefrom and take certain affirmative action, as
set forth in the attached Decision. Thereafter, the General Counsel
and Respondent filed exceptions to the Trial Examiner's Decision
and supporting briefs.
Pursuant to Section 3 (b) of the National Labor Relations Act, the
Board has delegated its powers in connection with this case to a
three-member panel [Chairman McCulloch and Members Fanning
and Brown].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Trial Examiner's Decision and the entire record in this case, includ-
ing the exceptions and briefs, and hereby adopts the findings, con-
clusions, and recommendations of the Trial Examiner to the limited
extent consistent with this Decision.
From 1955 to 1963, Shell Oil Company, the Respondent herein, as
part of its operations in Michigan, delivered gasoline by truck from
its plant in Detroit to its service stations in Lansing. In mid-May
1963, Respondent's operations manager informed Charles Regent, the
Detroit plant manager, that a decision had been made to transfer the
Lansing accounts from Detroit to Grand Haven. This change was
149 NLRB No. 26.
770-076-65-vol. 149-21
306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
being instituted because construction of a new pipeline would pro-
duce a $9,000 saving for the Respondent if the gasoline were trucked
to Lansing from Grand Haven rather than from Detroit.
On Thursday, June 27, Regent notified Walter Thornton, the union
president, that the transfer of accounts would take place on July 1.
On Friday morning, June 28, Thornton informed Regent that the
Union was concerned about the transfer and its possible effect on
drivers with least seniority and requested a meeting with the union
committee. This meeting, attended by Regent and Plant Superin-
tendent Poladian on behalf of Respondent and by Thornton and
three other union committeemen on behalf of the Union, was held the
same afternoon. At this meeting Regent told the union committee
of the forthcoming transfer, and added that there would be no
change in the work schedule and no reduction in the number of em-
ployees. Thornton opposed any transfer of accounts and stated that
the Union would fight the issue by filing a grievance, unfair labor
practice charge, or a complaint with the ICC. The Union did not
request any additional meeting prior to the transfer, and the change
took place as scheduled.
At a second meeting on July 11, the Union presented Respondent
with a formal grievance based on the transfer of the Lansing ac-
counts. The Union maintained in subsequent correspondence with
the Respondent that the transfer constituted a grievance and that the
contract grievance procedure should be applied. Respondent insisted
that the transfer was not a grievable matter. It was decided, how-
ever, to hold another meeting to discuss the transfer.
At this meeting held on August 13 Respondent reiterated that it
considered the transfer a company prerogative and also that this
matter was not a proper grievance under its contract with the Union
but that it would, nevertheless, fully discuss the transfer with the
Union. During this discussion, Respondent explained in detail the
economic reasons for the transfer and assured the Union that no
employee would be hurt because there would be no change in the
work schedule and no layoff of employees.' The meeting did not re-
sult in the retransfer of accounts, and the Union filed an unfair labor
practice charge.
The Trial Examiner, relying on the Board decision in Fibreboard
Paper Products Corp. 138 NLRB 550 and related cases, concluded
that Respondent had violated Section 8(a) (5) of the Act. In reach-
ing this conclusion, he found that the 2-day notice of the proposed
transfer and the meeting of June 28 did not fulfill Respondent's duty
imposed by Section 8 (d) "to meet at reasonable times and confer in
1 There were no reductions in the work force at the time of the hearing.
SHELL OIL COMPANY 307
good faith." He further found that the meetings of July 11 and Au-
gust 13, which were held after the transfer had taken place, also did
not constitute the type of negotiations contemplated by the statute.
We agree with the Trial Examiner's general statemeiits of the
principles enunciated in our earlier decisions in Town cC Country
TIanu f acturing Co., Inc., 136 NLRB 1002, enfd. 316 F. 2d 846 (C.A.
5), and Fibreboard Paper Products Corp., 138 NLRB 550, enfd. 322
F. 2d 411 (C.A. D.C.), cert. granted 375 U.S. 963. In both those
cases, we held that a management decision to subcontract unit work,
albeit for economic reasons, is a mandatory subject for bargaining
and that an employer's failure to bargain with respect to this matter
is violative of Section 8(a) (5) and (1) of the Act. The principles
of these earlier cases, however, are not meant to be hard and fast
rules to be mechanically applied irrespective of the circumstances of
the case. In applying these principles, we are mindful that the per-
missibility of unilateral subcontracting will be determined by a con-
sideration of the setting of each case. Thus, the amount of time and
discussion required to satisfy the statutory obligation "to meet at
reasonable times and confer in good faith" may vary with the char-
acter of the subcontracting, the impact on employees, and the exigen-
cies of the particular business situation involved. In short, the prin- '
ciples in this area are not, nor are they intended, to be, inflexibly rigid
in application. Our examination of the instant case leads us to con-
clude, in disagreement with the Trial Examiner, that Respondent has
not failed to discharge its statutory bargaining obligation. Our de-
cision is based on the various facts in the instant case, including the
conduct of Respondent, the nature of the management determination,
and the minimal effect of this determination. An evaluation of these
facts with respect to the desired results to be achieved by the princi-
ples set forth in our earlier decisions leads us to the conclusion that
Respondent has not violated Section 8 (a) (5).
Thus, the record discloses that Respondent notified the Union of
the proposed transfer a few days before its proposed effective date
and at a time when it still lay within its power to reverse its decision.
After giving the Union such notice, Respondent did not refuse to
confer with the Union on the subject of the transfer. In fact, it did
meet with the Union bargaining committee at the Union's request
and did discuss the proposed transfer of work, stating its justifica-
tion for such action and assuring the Union that no one would be "let
out" by the change. Thereafter, Respondent continued to disclose a
willingness to discuss the subject even though it believed it was under
no obligation to do so. The record discloses, moreover, that subse-
quent to the transfer, no employee in the unit was discharged. Al-
though it would appear from the record in the instant case that
308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent might have informed the Union of the proposed transfer
earlier than it did, in the light of all the circumstances present here-
including the nature of the change, its limited effect on employees,
and other factors indicated below-we cannot say that the short no-
tice in this case is alone enough to establish Respondent's bad faith
and refusal to bargain.
We also note that Respondent met with the Union a month after
the transfer and discussed in detail the economic reasons for its ac=
tion and assured the Union that this would result in no change in the
work schedule or layoff of employees. At this meeting as at the ear-
lier one, the Union offered no specific proposals, but simply voiced
its objections to the transfer. Although this meeting occurred after
the transfer had been made effective, we nevertheless consider it of
some significance in appraising the issue of whether Respondent was
seeking to evade its bargaining obligations, particularly since it ap-
pears that the management decision herein involved was not of an
irrevocable nature. As no third party interests had intervened, Re-
spondent even at that time could have retransferred the work by a
simple telephone call.
In the circumstances of this case, and for the reasons stated above,
we conclude that Respondent has not failed to discharge its bargain-
ing obligations under the statute. We therefore find that Respond-
ent has not violated Section 8(a) (5) of the Act and, accordingly,
shall dismiss the complaint.
[The Board dismissed the complaint.]
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Upon a charge filed on September 6, 1963, by Local 7-389, Oil, Chemical and
Atomic Workers' International Union , AFL-CIO, herein called the Union, the
General Counsel issued a complaint on November 15, 1963, against Shell Oil
Company, herein called Respondent or the Company. The complaint alleges, in
substance , that on or about July 1, 1963, Respondent violated Section 8(a)(5) and
(1) of the National Labor Relations Act as amended , 29 U.S.C. 151, et seq ., herein
called the Act, by unilaterally transferring from its Detroit, Michigan , plant to its
Grand Haven, Michigan , plant work that was formerly performed by Detroit
employees in the bargaining unit represented by the Union "without notifying the
Union of the aforementioned action or giving it an opportunity to bargain there-
on." Respondent , by its amended answer, denies "that it was or is under any
legal duty to bargain with the Union over the transfer of its Lansing, Michigan,
gasoline deliveries from its Detroit plant to its Grand Haven plant." The
amended answer further pleads that even if the allegations of the complaint sum-
marized above were true , the conduct complained of would not be a violation of
Section 8 (a) (5) and (1) of the Act.
Pursuant to notice , a hearing was held before Trial Examiner David London in
Detroit, Michigan , on January 6, 1964. All parties appeared and were afforded
full opportunity to be heard and to examine and cross-examine witnesses. Since
the close of the hearing a brief has been received from Respondent which has been
duly considered.
SHELL OIL COMPANY 309
Upon the entire record,' and from my observation of the witnesses, I make the
following:
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF RESPONDENT
At all times material herein, Respondent, a Delaware corporation, has been
engaged in the production, processing, sale, and distribution of gasoline, motor
oil, and other petroleum products in various States of the United States. As an
integral part of its multistate operation, Respondent has at all times material herein
maintained and operated a branch warehouse and storage depot in Detroit, Michi-
gan, which depot or plant is the only plant directly involved in this proceeding,
and from which it distributes and sells its products to customers within the State of
Michigan. During the year 1962, which period is representative of its operations
at all times material herein, Respondent in the course and conduct of its business
operations produced, processed, and distributed through the United States prod-
ucts valued in excess of $50 million. During the same period, Respondent
shipped products valued in excess of $500,000 directly from other States to its
plants within the State of Michigan. Respondent admits, and I find, that it has
been at all times material herein an employer engaged in commei ce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization which admits to membership employees of the
Company.
III. THE UNFAIR LABOR PRACTICES
From 1955 to 1963, Respondent delivered gasoline by truck to service stations in
and around Lansing, Michigan, located in the center of the southern half of that
State. These deliveries to Lansing were made from Respondent's delivery plant at
Detroit, Michigan, located in the southeast corner of that State, where its em-
ployees were, and are, represented for collective-bargaining purposes by the
Charging Union herein. Respondent also has another supply plant at Grand
Haven, Michigan, located on the shore of Lake Michigan, almost due west of
Lansing, where its employees were, and are, represented by another local of the
same International Union with which the Charging Union is affiliated.
In December 1962, the Wolverine Pipe Line, whose original course ran from
Niles, Michigan, at the southwest corner of the State, to Detroit, was extended by
a pipeline ("Tulip") from Niles to Grand Haven which indirectly changed the
economics of supplying gasoline into the Lansing area. Although trucking
costs to Lansing had for some time been less from Grand Haven than from
Detroit, such lower trucking costs were substantially offset by the greater cost of
carrying gasoline from Shell's refinery into the delivery plant at Grand Haven than
into the plant at Detroit. The new "Tulip" pipeline into Grand Haven, however,
reversed this economic advantage. Whereas it had cost 0.099 cents per gallon less
to supply Detroit than Grand Haven before "Tulip," it now costs 0.071 cents per
gallon less to supply Grand Haven than Detroit. The net effect was thus to
improve Grand Haven's new position vis-a-vis Detroit's old position as a supply
point by 0.17 cents per gallon or about $5,000 per year for the approximate
3,000,000 gallons per year of gasoline which Shell was delivering into the Lans-
ing area.
Though "Tulip" was completed in December 1962 and Respondent, in its brief,
concedes that the "new pipeline differential became effective on April 15, 1963," it
was not until the following "mid-May" that Charles Regent, manager of the
Detroit plant, was notified by his superior, C. B. Wheeler, Respondent's operations
manager with headquarters in Cleveland, that he would lose the Lansing accounts
to the Grand Haven plant on June 1. Regent engaged in "lengthy discussions
[with Wheeler] relative to this transfer . trying to prove to management by
cost studies, etc., that it would be much better to leave it in Detroit." These
discussions were, however, of no avail except that the effective date for the transfer
was postponed by Wheeler to July 1, 1963.
1 A posthearing stipulation to make 29 corrections in the Official Report of Proceedings
herein, signed by all the parties hereto, and submitted to me on February 7, 1964, is hereby
approved, and the record is accordingly corrected.
310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
It was not, however, until the morning of Thursday, June 27, that any notice of
the proposed transfer was given to the Union which, at that time, was, and for
many years prior thereto had been, the collective-bargaining representative of most
of Respondent's employees at the Detroit plant including the drivers who made the
Lansing deliveries. At that time, Regent called Walter Thornton, president of the
Union, to his office and informed him that on the following Monday morning,
July 1, "the Lansing accounts [would] be transferred from Detroit to Grand
Haven." Thornton observed that the Detroit drivers, including himself, had this
run for "quite sometime" (8 years), and that he would consult the Union's
committee.
On the following morning, Friday, June 28, Thornton informed Regent that
"the afternoon drivers, those with the least seniority, were concerned about the loss
of the Lansing accounts and he would like to have a full committee meeting in
the afternoon." 2 Such a meeting was held that afternoon attended by Regent and
Paul Poladian, plant superintendent, in behalf of the Company, and Thornton and
three other committee members in behalf of the Union.
At that meeting, Regent repeated to the full committee Respondent's decision to
transfer the Lansing deliveries to Grand Haven on the following Monday' morn-
ing. Thornton replied that the men "were upset" about the transfer and that the
Union would "certainly fight the issue " Regent informed the committee of his
unavailing efforts with management to retain the Lansing deliveries at Detroit
following which a discussion ensued "relative to the schedules, the reduction of
people, piece mealing of the work." During that discussion, Regent stated that
the work schedules already posted did not involve any change in classifications or
work scheduling, -and that no one would be "let out." The meeting concluded
with Thornton's statement that the Union would either file a grievance, an unfair
labor practice charge, or a complaint with the ICC "relative to back-hauls out of
Detroit." During the same day, June 28, Respondent transferred one of its trucks
from Detroit to Grand Haven and all deliveries to Lansing were thereafter made
from the Grand Haven plant.
Article VIII of the existing collective-bargaining agreement between the parties
establishes a detailed "grievance procedure for the purpose of adjusting grievances
and disputes arising out of the application or interpretation of this agree-
ment. " The third and last step in that procedure made provision for an arbitration
committee of three members who were directed to "examine all of the facts in
dispute . . . [and] render a decision . . . which shall be final and binding on all
parties."
At a meeting of management and union representatives on July 11, Regent was
handed a formal grievance by the Union charging that the Company had "unila-
terally deleted the hauling of gasoline to the Lansing area" from the unit repre-
sented by the Union, which conduct was alleged to be a violation of the "past
practice of 8 years." Regent read the grievance and told the union committee "he
would have to get an answer on it ... because ... the decision was not made by
him, ... it was made by somebody higher up."
Regent thereupon consulted with his superior, Wheeler, and replied to the Union
by his letter of July 17. After acknowledging receipt of the Union's grievance,
Regent continued:
It is the position of the Company that this issue, as submitted, does not have
merit under Article VIII grievance procedure of our current Articles of
Agreement because it fails to cite a specific violation of these Articles of
Agreement upon which the alleged grievance is based.
If it is your contention that this matter should be settled in accordance with
the procedure set forth in Article VIII, please let me have your written state-
ment as to that portion of our current agreement you believe has been violated
by the Company.
If you are not prepared to cite a contract violation by the Company, this
entire matter may be discussed fully at our next regularly scheduled monthly
meeting. However, if the matter is then to be discussed, your written request
for its inclusion on the agenda for our next meeting should state that you are
not raising this question for settlement in accordance with the procedure set
forth in Article VIII.
3 Article VII of the existing contract between the parties made provision for a "Work-
men's Committee" of four members to meet with company representatives "at least monthly
to discuss any complaints which may arise "
SHELL OIL COMPANY 311
On July 29 Thornton wrote Wheeler at Cleveland rejecting the contentions
outlined in Regent's letter of July 17, and requesting that a "special grievance
meeting" be arranged in accordance with the second step provided by article VIII
of the collective-bargaining agreement. Wheeler replied on August 2 with the
following letter:
We agree with Mr. Regent's letter of July 17, 1963, because no provision of
the union agreement was either applied' or interpreted in arriving at the
decision to transfer the delivery origin of the Lansing area accounts from
Detroit to Grand Haven. Therefore, we believe he was correct in taking the
position that no misapplication or misinterpretation of our agreement has
occurred. However, we will be glad to meet with you for a discussion of the
matter at a mutually satisfactory date.
The next meeting between the parties occurred on August 13. The Union was
represented by its full committee and J. R. Johnston, its secretary-treasurer; the
Company, by Wheeler, Regent, and Detroit Office Manager Keifer. At the outset
of that meeting, Wheeler made it clear to those present that he was not there to
participate in any step of the contract's grievance procedure for the reasons outlined
in Regent's letter of July 17 reported above, i.e., that the removal of the Lansing
deliveries was not a grievable item which could ultimately lead to binding arbitra-
tion under the contract. Though also making it clear that he considered the
transfer of this operation a company prerogative, he nevertheless expressed will-
ingness "to discuss" the matter with the union committee.
During the discussion that ensued, Wheeler explained in detail how, with the
advent of "Tulip," the service of Lansing out of Grand Haven, rather than from
Detroit, would result in an annual saving to the Company of approximately
$9,000. He also informed the union committee "that no one at the Detroit plant
was being hurt, no schedules changed, and no one was [being] laid off." 3 The
Union centered its presentation on the contentions that by the transfer the Company
was "taking away the right for people to advance or to have jobs which were
better than they would normally have," and that it "would reduce the amount of
overtime paid to the [Detroit] drivers." When Johnston asserted that by the fur-
ther transfer of operations the Company "could piece meal [the Detroit] unit com-
pletely out of existence." Wheeler denied having any such intention but admitted
that "this could probably happen at Jackson or other places."
Except to definitely establish that the Company would continue to adhere to its
decision that it did not consider the transfer of operations a subject for considera-
tion as a grievance under the contract, the hour-long meeting produced no re-
sults. Though adamant on this subject, the testimony is undisputed that the Com-
pany nevertheless expressed willingness, and never refused, to "talk about" or
"discuss" the transfer of operations with the Union.
Concluding Findings
In an endeavor to point up the issues involved herein, counsel for Respondent, in
response to an inquiry from me during his closing argument, stated that Respond-
ent was under "no duty to bargain with the Union concerning the transfer of
operations from Detroit to Grand Haven, and that this subject was "not even the
subject of a grievance" under the collective-bargaining agreement.
Section 8(d) of the Act requires that the "employer and the representative of the
employees meet at reasonable times and confer in good faith with respect to
wages, hours, and other terms and conditions of employment, or the negotiation of
an agreement, or any question arising thereunder ...." In framing that section
of the Act, added thereto in 1947 by the Taft-Hartley amendments after 12 years'
experience with the Wagner Act, "Congress was incorporating the decisions of the
Board and the Courts defining the duty to bargain collectively. The statutory
definition of those subjects about which the parties were required to bargain was of
necessity framed in the broadest terms possible: wages, hours, terms and conditions
of employment. The use of this language was a reflection of the congressional
awareness that the act covered a wide variety of industrial and commercial activity
and a recognition that collective bargaining must be kept flexible without precise
delineation of what subjects were covered so that the Act could be administered to
meet changing conditions. Congress left it to the Board, in the first instance, to
give content to the statutory language, subject to review by the courts
3 There were no reductions in the work force to the time of the hearing herein.
312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
[Citing cases.]" East Bay Union of Machinists, Local 1304, United Steelworkers
of America, AFL-CIO v. N.L.R.B. (Fibreboard Paper Products Corp.), 322 F. 2d
411, 414 (C.A.D.C.).
In the exercise of that function, the Board has had occasion to consider the
breadth and flexibility of the statutory language and has concluded, with court
approval, that many actions claimed by employers to be unfettered management
prerogatives are, instead, required subjects for collective bargaining within the
scope of Section 8(d) of the Act.4 Transferring work out of a unit may have
more direct impact upon employees than wages, working conditions, or the other
subjects mentioned in footnote 4, supra, for the very retention of that work within
the unit may, and often does, turn thereon. Though Respondent characterizes the
relief sought here as "revolutionary," it was foreshadowed by earlier decisions of
the Board. Thus, in Jack Lewis et al., d/b/a California Footwear Company, 114
NLRB 765, the Board concluded that an employer "is under a statutory obligation
to bargain with the Union with respect to moving its plant" from downtown Los
Angeles to a location in the suburbs, approximately 12 miles away. The Board's
decision with respect to this phase of the case was enforced by the court of appeals,
sub nom. N.L.R.B. v. Jack Lewis et al, d/b/a California Footwear Company et
al., 246 F. 2d 886 (C A. 9). See also Brown Truck & Trailer Manufacturing
Company at al., 106 NLRB 999.
The most recent Board decisions dealing with this subject, and in which its
rationale was expounded at length, are Town & Country Manufacturing Company,
Inc., 136 NLRB 1022, and Fibreboard Paper Products Corporation, 138 NLRB
550. In both cases, the employer unilaterally subcontracted a portion of its opera-
tions without notifying and negotiating with the representative of their em-
ployees. In both cases, the Board declared that a management decision to subcon-
tract work out of an existing unit, albeit for economic reasons, is a mandatory
bargaining subject, and that an employer's failure to bargain with respect thereto
constitutes a violation of Section 8(a)(1) and (5) of the Act. Both decisions were
enforced by the court of appeals.5
The principal thrust of Respondent's argument is that the Board; by its decisions
in Town & Country and Fibreboard, supra, and the court of appeals in Fibreboard,
erroneously interpreted and expanded the duty imposed upon an employer by Sec-
tion 8(d) of the Act. Whatever merit, if any, there may be to this contention is
not for me to decide. As a Trial Examiner of the Board, its decisions and ration-
ale, unless and until reversed by the Supreme Court,6 must serve as my decisional
guideposts herein.? In that posture of the case before me, I conclude that Respond-
ent's liability under the Act for its unilateral transfer of the Lansing deliveries to
Grand Haven must be appraised and adjudged by the Board's rationale and deci-
sion in Fibreboard and Town & Country. Applying that rationale to the facts
found herein, I conclude that Respondent violated Section 8(a)(1) and (5) of the
Act by transferring its Lansing deliveries from Detroit to Grand Haven without
first negotiating with the Union with respect to that transfer.
Notwithstanding what has just been concluded, it goes without saying that
with respect to any proposal to transfer the Lansing deliveries to Grand Haven, as
in other mandatory bargaining subjects, "the obligation to bargain is not an
obligation to agree." Fibreboard, 322 F. 2d at 415. All that the Act demands is
that the employer give advance notice and bargain in good faith before making
4For example, see Inland Steel Company v N.L.R.B., 170 F 2d 247, 254 (C.A. 7), cert
denied 336 U S 960 (compulsory retirement program) , N.L R B v. Lehigh Portland
Cement Company, 205 F. 2d 821 (C A. 4) (company housing) ; N L R B v. Niles-Bement-
Pond Company, 199 F. 2d 713 (CA. 2) (Christmas bonus) , Richfield Oil Corporation v
NLRB., 231 F. 2d 717 (CA D.C ), ceit. denied 351 U S 909 (stock purchase plan)
N L R B v. Westinghouse Air Brake Co., 120 F 2d 1004, 1006-1007 (^C A 3) (decisions
relating to economic layoff)
5 Fibreboard Paper Products Corporation v. N.L R B., 322 F 2d 411 (CAD C Town
& Country Mfg Co v. NLRB , 316 F. 2d 846 (C A 5). In Town & Counts y, however,
the court pointed out "that the evidence [also] permits of no other conclusion than that
the determination to subcontract its work and to discharge its drivers from employment
was the result, in part at least, of the Company's determination to rid itself of the
Union," and it was for that reason that the enforcement order was granted. There is no
such contention here
6 The Supreme Court on January 6, 1964, granted certiorari in Fibreboard, 375 U.S. 963
?Insurance Agents' International Union (Prudential Insurance Co ), 119 NLRB 768,
reversed on other grounds, 260 F. 2d 736 (C A.D.C) and 361 U ^S. 477.
SHELL OIL COMPANY 313
commitment . This, and this alone, is. the extent of the statutory restriction on the
employer's freedom of action . Where that obligation has been satisfied , the em-
ployer may lawfully subcontract or transfer any part of its operations . However,
by "guaranteeing employee participtation in decisions relating to wages, hours,
and terms and conditions of employment , Congress made a determination that this
would create an environment conducive to industrial harmony and eliminate costly
industrial strife which interrupts commerce ." Fibreboard, 322 F . 2d at 414.
Respondent , in its brief , concedes that in "both Fibreboard and Town & Country,
supra, the impact of the managerial decisions in question upon wages, hours or
other terms and conditions of employment on employees in the respective bargaining
units . [was] direct, immediate and substantial ." It seeks, however, to dis-
tinguish those cases and others that have followed because all were concerned with
the subletting of complete operations where "the employer transferred all of the
work which had been performed by the employees in the bargaining unit at a
particular plant to an independent contractor whose own employees thereafter per-
formed the same work ." Here, Respondent contends "we have only an antra-com-
pany transfer of an' insignificant amount of work . . . transferred from a bargain-
ing unit at one company ' plant to a bargaining unit of the same international
union at another company plant in a different location ." Though a distinction in
fact exists , I find it to be a distinction without legal significance , and conclude that
the rationale by which the ultimate decision was reached by the Board in Fibre-
board and Town & Country requires a similar conclusion herein.
,Here, no less than was expressly found in the subletting cases named above, the
compelling and conclusive inference is that, but for the assignment of the work to
others outside the Detroit unit, Respondent could, and would have, utilized the'
services of employees inside that unit either by the grant of additional overtime to
full-time drivers , or the grant of full -time work to drivers who prior thereto were
on a part-time or temporary basis. In light of that circumstance , there is no merit
to Respondent 's contention that this change in operation was "without even the
slightest economic loss to any member of the bargaining unit [because] Shell's
business in the [Detroit ] area was constantly growing," and that its "proprietory
trucking at Detroit increased from 160 million gallons in 1962 to 169 million
gallons in 1963.118 That fortuitous circumstance , however, does not alter the fact
that the Detroit unit actually lost the Lansing delivery of about 250,000 gallons
per month requiring the full-time service of approximately 1i/3 of the 31 'to 32
permanent drivers at that plant.
Significant as the loss of the Lansing delivery was to the Union , its concern was
heightened by Respondent ' s unflinching contention that the decision to transfer
operations from one unit to another was, and is , a management prerogative and
could be imposed unilaterally to as great an extent as it alone deems expe-
dient. Thus , though Wheeler at the August 13 meeting denied that Respondent
had any intention to piecemeal or fragmentize the Detroit unit "completely out of
existence , [he admitted that] this could probably happen at Jackson (Michigan) or
other places."
The transfer of the Lansing deliveries being a subject concerning which it was
Respondent 's duty to bargain with the Union , it was its concomitant duty to give
the Union reasonable prior notice of that proposed change in operations, and an
opportunity to negotiate with respect thereto. Though continuing to maintain
that it was under no obligation or duty to do so, Respondent now contends that it
nevertheless gave adequate prior notice to the Union of its determination to transfer
the Lansing deliveries and an opportunity to bargain concerning that trans-
fer. The testimony does not sustain this contention . Thus, ( 1) though the record
establishes that "Tulip" was completed in December 1962, (2) that on or before
April 15, 1963 , Respondent 's cost studies revealed the savings that would be rea-
lized by the transfer in operations to Grand Haven, and (3 ) that it was in "mid-
May" 1963, that Regent, the Detroit plant manager , was officially notified to
make the transfer effective , it was not until Thursday, June 27, 2 workdays before
the transfer was made effective , that any notice was given to the Union.
The transfer certainly was not a project of an emergency character precluding
adequate notice to , and reasonable consultation with , the Union . Nor is this a case
where the employer is faced with a real problem as to the timing of the no-
tice. Thus, in the case of subletting , is the Union to be notified when the employer
8 There was no reduction of, or other change in the driver complement at Detroit to the
time of the hearing. With respect to overtime , it was greater during the 6 months after
the date of change (July 1, 1963 ) than during the 6 months preceding that date.
314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
first gives consideration to subletting, when he first receives a bid or offer from the
subleasee, or after he has already committed himself by executing the subleasing
agreement. Here, Respondent was confronted with no such problem. It, and it
alone, was involved. Respondent could, had it chosen to do so, have notified the
Union certainly as early as mid-May when the order to transfer the operation was
transmitted to Regent.
The 2 days' notice given here cannot be said to comply with the command of
Section 8(d) of the Act, "to meet at reasonable times and confer in good
faith." The briefness thereof is in sharp contrast to the 60 days' notice which the
Union is required to give Respondent if it should seek to terminate or modify the
existing collective-bargaining agreement between the parties. Its shortness is
further accentuated here by the fact that the decision-making power rested with
company officials in Cleveland, or elsewhere, but not in Detroit. Its abruptness is
consistent only with, and a manifestation of, Respondent's unyielding position that
the transfer was a company prerogative, and not a subject for negotiation.
Nor is there any merit to Respondent's further contention, again explicitly made
with the reservation that it was without obligation to do so, that in fact, there was
"actual good faith bargaining by Respondent on the merits of its actions and no
refusal by Respondent on June 28, 1963, or any other time to bargain further
whenever requested by the Union."
It certainly cannot be claimed that the meeting of June 28, the only meeting
between the parties before the transfer was made effective, constituted performance
of the duty imposed by Section 8(d) of the Act. The abruptness with which that
meeting was convened, and the presence of representatives clothed with authority
only to "talk" about, or "discuss," a decision already promulgated, and which could
only be changed by others, militates most strongly and effectively against any
such suggestion. Nor can it be said that there was in fact negotiation on July 11,
when the Union filed its grievance. Though the first step in the grievance proce-
dure established by the collective-bargaining agreement between the parties pro-
vided for an initial "decision" by Regent, that official refused even to consider the
grievance.
In any event, both the meeting of July 11 and that of August 13, the latter
being the only other meeting between the parties, were after the transfer to Grand
Haven was already a fait accompli "No genuine bargaining over a decision to
terminate a phase of operation can be conducted where that decision has already
been'made and implemented." Town & Country Manufacturing Company, Inc.,
136 NLRB 1022, 1030. This is especially true where, as here, the employer has
steadfastly maintained up to this moment that it is under no obligation to nego-
tiate, or even to consider a grievance with respect to the dispute. A willingness to
"talk" about, or to "discuss," the change in operations already in effect is not the
same as bargaining about a proposal to change those operations.
Respondent not only consistently adhered to the position that it was not required
by law to bargain with the Union concerning a proposal to transfer its operations
from one plant to another, but it was and continues to be equally adamant that such
transfers do not give rise to a grievance which could be processed in accordance
with article VIII of the contract between the parties described in an earlier portion
of this decision. I reject any such contention.
The Supreme Court had occasion to consider this problem in United Steelworkers
of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, an action to compel
arbitration of a grievance based upon the employer's practice of contracting out
work. The agreement between the parties to that action contained a grievance
procedure culminating in arbitration which procedure was to be invoked "should
differences arise . . . as to the meaning and application of the provisions of this
agreement." The contract, however, also provided that "matters which are strictly
a function of management shall not be subject to arbitration." The lower courts
concluded that deciding whether to contract out work was "strictly a function of
management" within the meaning of the agreement and dismissed the action to
compel arbitration brought under Section 301 (a) of the Act.
The Supreme Court reversed and, in the course of its opinion, noted that the
"arbitration of labor disputes under collective-bargaining agreements is part and
parcel of the collective-bargaining process itself. It is more than a contract; it
is a generalized code to govern a myriad of cases which the draftsmen cannot
wholly anticipate. . . . [but nevertheless] covers the whole employment relationship.
. Apart from matters that the parties specifically exclude, all of the questions on
which the parties disagree must therefore come within the scope of the grievance
and arbitration provisions of the collective-bargaining agreement. The grievance
procedure is, in other words, a part of the continuous collective-bargaining proc-
SHELL OIL COMPANY 315
ess. It, rather than a strike, is the terminal point of a disagreement." [Em-
phasis added.] 9 What the Supreme Court said in Steelworkers supra, pertaining
to the broad scope of the grievance procedure in collective-bargaining agreements
has even greater impact and significance here where there was no exclusion from
that procedure of matters that are "strictly a function of management."
Consistent with the inflexible position that its decision to transfer work out of
the unit was not grievable or arbitrable under the contract, Respondent's brief
seems to imply that the Union's only remedy herein is a suit under Section 301 of
the Act "to compel specific performance of the contract" provisions governing
grievances and arbitration. While it is true that the Board has frequently declined
to exercise jurisdiction where a dispute has been, or could have been, submitted to
arbitration under the parties' bargaining contract, the Board's declination of juris-
diction in those cases was purely discretionary. Section 10(a) of the Act expressly'
provides that the Board's jurisdiction "shall not be affected by any other means of
adjustment or prevention that has been established . . . by agreement, law or
otherwise ...."
IV. THE REMEDY
Having found that Respondent has engaged in conduct violative of the Act, I
recommend that it cease and desist therefrom, and take certain affirmative action
designed to effectuate the policies of the Act, all as specified in the Recommended
Order below.
The General Counsel, in his complaint, prays that in addition to the usual cease-
and-desist order which failure-to-bargain violations normally .require, Respondent be
directed to "return to the Detroit plant the work transferred from said plant."
Though the Board, in Fibreboard and in Town & Country, deemed it appropriate to
require and order the return to the employer of the subleased work involved in those
cases, it does not necessarily follow that a similar order should be entered here.
The Supreme Court has cautioned that "the relief which the statute empowers
the Board to grant is to be adapted to the situation which calls for redress."
N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 348.
In Fibreboard, Town & Country, and all other subletting cases where restoration
of the subleased operations was ordered by the Board, such drastic action was
required because the employer in all those cases had discharged or terminated the
services of the employees who formerly were engaged in that operation. To
adequately remedy that situation, only a restoration of the subleased operation
would suffice. It is only by that means that the discharged employees, victims of
the unfair labor practice, could be restored to their former positions and made
whole for the loss suffered by them.
Here, however no employee was discharged or reduced in his hours of employ-
ment nor, insofar as the record discloses, did any employee actually lose over-
time. With respect, therefore, to the effect that the requested relief may have on the
employees, nothing is required, or to be gained, by now ordering Respondent to
return the Lansing deliveries to Detroit. Nothing that has just been said, how-
ever, is intended to minimize the seriousness of Respondent's violation of the Act. It
is my judgment, based on the entire record, that the duties imposed by the Recom-
mended Order that follows are appropriately adapted to the situation before me.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning of Section 2(6) and
(7) of the Act.
2. Local 7-389, Oil, Chemical and Atomic Workers' International Union, AFL-
CIO, is a labor organization within the meaning of the Act.
3. All dispatchers, auto mechanics, plant receiver-gaugers, driver-salesmen, sen-
ior clerks, cashiers , senior loaders, senior warehousemen , yardmen , maintenance
men, terminal clerks, telephone operators, porters, car washer-greasers, and labor-
ers employed at the Detroit plant of Respondent in Detroit, Michigan, excluding
professional employees, watchmen, guards, and supervisors as defined in the Act,
constitute a unit appropriate for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.
4 At all times since about 1937, the above-named Union has been, and now is,
the representative of all the employees in the unit described above for the purposes
of collective bargaining with respect to rates of `pay, wages, hours of employment,
and other terms and conditions of employment.
9 See also John Wiley & Sons, Inc. v. David Livingston, etc., 376 U.S. 543.
316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
5. By unilaterally ordering the transfer of, and by transferring, from its Detroit
plant to its Grand Haven plant work that was formerly performed by employees in
the aforesaid appropriate unit without first giving the Union an opportunity to
bargain with respect thereto, Respondent has violated Section 8(a) (5) of the Act.
6. By the foregoing conduct, Respondent has interfered with, restrained, and
coerced its employees in the exercise of rights guaranteed by Section 7 of the Act
and has thereby violated Section 8(a)(1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices within the
meaning of Section 2( 6) and (7) of the Act.
[Recommended Order omitted from publication.]
Local 60, International Association of Bridge , Structural and
Ornamental Iron Workers , AFL-CIO [Gouverneur Iron Works,
Inc.] and Edward O. Schrader . Case No. 3-CB-764. October 29,
1964
DECISION AND ORDER
On August 3, 1964, Trial Examiner Thomas F. Maher issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in and was engaging in certain unfair labor prac-
tices and recommending that it cease and desist therefrom and take
certain affirmative action, as set forth in the attached Decision.
Thereafter, the Respondent filed exceptions to the Decision and a
supporting brief.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-mem-
ber panel [Members Leedom, Fanning, and Brown].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Decision,
the exceptions and brief, and the entire record in this case, and finds
merit in the Respondent's exceptions.
The Trial Examiner found that by refusing to clear Edward O.
Schrader for employment with Gouverneur Iron Works, Inc., Re-
spondent caused Gouverneur to discriminate against Schrader in vio-
lation of Section 8(a) (3) of the Act, and that by such conduct the
Respondent violated Section 8(b) (2) and (1) (A) of the Act.
Specifically, the Trial Examiner found that Gouverneur's job sup-
erintendent, McAllister, refused to hire Schrader because he was be-
hind in his dues payments to Respondent Local. As Schrader testi-
fied, McAllister stated to Schrader that he was told by Respondent's
business agent, Kaulbeck, in the course of a telephone conversation,
that Schrader was "five months behind in your union dues and I
can't put you to work." Schrader further testified that when he
(Schrader) telephoned Kaulbeck and asked him why he could not
have the job, Kaulbeck replied that Schrader was 5 months behind
149 NLRB No. 29.