Southland Dodge, Inc.

National Labor Relations Board - Board Decisions

Aug 6, 1973

205 N.L.R.B. 276 (N.L.R.B. 1973)

276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Southland Dodge, Inc. and International Association of
Machinists and Aerospace Workers, AFL-CIO, Dis-
trict No. 63. Case 6-CA-6391
August 6, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On March 19, 1973, Administrative Law Judge Lo-
well Goerlich issued the attached Decision in this pro-
ceeding. Thereafter, Respondent filed exceptions and
a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, with the following
modifications.'
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 Administrative Law Judge as modified
below and hereby orders that Respondent, Southland
Dodge, Inc., Pittsburgh, Pennsylvania, its officers,
agents, successors, and assigns, shall take the action
set forth in the said recommended Order, as so modi-
fied:
1. Delete paragraph 2(b) and substitute the follow-
ing:
"(b) Upon execution of the aforesaid agreement,
give retroactive effect to the provisions thereof and
make whole its employees for any losses they may
have suffered by reason of the Respondent's failure to
sign the agreement."
2. Substitute the attached notice for the Adminis-
trative Law Judge's notice.
' Respondent has excepted to the Administrative Law Judge 's recommen-
dation that it reimburse the Union for any loss of dues resulting from
Respondent 's unlawful refusal to sign the collective-bargaining agreement
reached by the parties We find merit in the exception and shall delete this
provision from the Order The Board has ordered dues reimbursement in
appropriate cases only where employees have individually signed dues check-
off authorizations There is no evidence of such signing in this case Accord-
ingly , the proposed remedy is inappropriate Ogle Protection Service, Inc, 183
NLRB 682, Creutz Plating Corporation, 172 NLRB I
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
We have forthwith signed a written contract with
International Association of Machinists and Aero-
space Workers, AFL-CIO, District No. 63, effective
October 5, 1972, a copy of which is posted with this
notice.
WE WILL give retroactive effect to the terms and
conditions of the contract and we will make
whole our employees for any losses they may
have suffered by reason of our failure to sign the
contract.
SOUTHLAND DODGE, 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 compli-
ance with its provisions may be directed to the
Board's Office, 1536 Federal Building, 1000 Liberty
Avenue, Pittsburgh, Pennsylvania 15222, Telephone
412-644-2977.
DECISION
STATEMENT OF THE CASE
LOWELL GOERLICH, Administrative Law Judge: The charge
filed by District No. 63, International Association of Ma-
chinists and Aerospace Workers, AFL-CIO, herein referred
to as the Union, on November 2, 1972, was duly served by
registered mail upon Southland Dodge, Inc., the Respon-
dent herein, on November 2, 1972. A complaint and notice
of hearing was issued on December 21, 1972. The complaint
charged that the Respondent failed and refused to execute
a written agreement embodying the terms and conditions
agreed upon between the Respondent and the Union in
violation of Section 8(a)(1) and (5) of the National Labor
Relations Act, as amended, herein referred to as the Act.
The Respondent filed a timely answer denying that it had
engaged in or was engaging in any of the unfair labor prac-
tices alleged.
The case came on for trial on February 7, 1973, at Pitts-
burgh, Pennsylvania. Each party was afforded a full oppor-
205 NLRB No. 54
SOUTHLAND DODGE, INC.
tunity to be heard, to call, to examine and cross-examine
witnesses, to argue orally on the record, to submit proposed
findings of fact and conclusions, and to file briefs. All briefs
have been carefully considered.
FINDINGS OF FACT,' CONCLUSIONS, AND
REASONS THEREFOR
I THE BUSINESS OF THE RESPONDENT
The Respondent , a Pennsylvania corporation with its sole
location in Pittsburgh , Pennsylvania, is engaged in the sale
and service of new and used automobiles and the sale of
automobile parts. During the past 12 -month period, the
Respondent has had gross sales in excess of $500 ,000. Dur-
ing this same period, Respondent has received at its Pitts-
burgh , Pennsylvania , location goods valued in excess of
$50,000 directly from points outside the Commonwealth of
Pennsylvania.
The Respondent is now , and has been at all times materi-
al herein , an employer engaged in commerce within the
meaning of Section 2 (6) and (7) of the Act.2
11 THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2 (5) of the Act.3
III THE UNFAIR LABOR PRACTICES
A. Pertinent Facts
The following employees of the Respondent constitute an
appropriate unit for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All service department and parts department employ-
ees employed by the Respondent at its Clairton Boule-
vard, Pittsburgh, Pennsylvania, location, including
mechanics, body men, porters, new and used car prepa-
ration men, wash and lubrication men, write-up men
and counter men; excluding all office clerical employ-
ees, salesmen , watchmen and guards, professional em-
ployees and supervisors as defined in the Act.
On or about August 2, 1972, a majority of the employees
in the unit described in the paragraph above , by a secret-
ballot election conducted under the supervision of the Re-
gional Director for Region 6 of the Board , designated and
selected the Union as their representative for the purposes
of collective bargaining with the Respondent; and on Sep-
tember 13 , 1972, the Board certified the Union as the exclu-
sive collective -bargaining representative of the employees in
said unit 4
'The facts found herein are based on the record as a whole and the
observations of the witnesses
2 By answer the Respondent admitted the foregoing facts
3 By answer the Respondent admitted the foregoing facts.
By answer the Respondent admitted the foregoing facts
277
About 20 employees are employed in the appropriate
unit.
Negotiations for a contract commenced September 7,
1972. Norman I. White, the attorney for the Respondent,
was its chief negotiator and James W. Elnyczky, business
representative for District 63, was the chief negotiator of the
Union. At the third negotiation meeting on September 28,
1972, the Respondent orally presented a "final" offer. El-
nyczky requested that the offer be committed to writing in
order that he might submit it to the membership in such
form. However, Elnyczky indicated that he would not rec-
ommend that the offer be accepted. On September 29, 1972,
the final offer, in writing, together with a letter from Attor-
ney White, was forwarded to the Union. The written offer
did not accurately in all particulars reflect the oral offer of
September 28, 1972.5
The offer was submitted to 15 employees at a union meet-
ing on October 2, 1972. Upon the recommendation of El-
nyczky the offer was rejected. The vote was 14 to 1. By a
vote of 12 to 3 the employees voted to reaffirm strike action.
Elnyczky then phoned Attorney White and informed him
that the offer was rejected and that the Union was willing
to engage in future meetings to resolve the differences.
White said he would contact the employer and call Elnycz-
ky the next day. When Elnyczky did not receive a call from
White the next day he contacted Edward Constentine, presi-
dent of the Respondent, who was unable to give a definite
answer. On the evening of October 3, 1972, Elnyczky again
contacted Constentine and was informed that Constentine
"didn't see no reason for no future bargaining," and that the
"offer that was made on September 28 was their final offer."
Later on the same evening Elnyczky talked with Attorney
White who reaffirmed the position of President Consten-
tine.
On the morning of October 4, 1972, the Union established
a picket line at the Respondent's premises. Only five em-
ployees observed the picket line which persuaded the Union
to cease the strike after 45 minutes of picketing in that the
Union "didn't feel that it would be effective." The pickets
were told by Elnyczky to inform the employees who were
working that there would be a union meeting that evening
at 51 Lounge. One of the pickets, Dwayne Hier, returned to
work. Another employee, Thomas Kavanaugh, who had not
observed the picket line, left the plant to get coffee for other
employees in the shop at which time Elnyczky told him of
the meeting. Three employees appeared at the meeting. It
was agreed by all present that the Respondent's final offer
be accepted.
Following the meeting Elnyczky sent telegrams to Attor-
ney White and William C. Lupton, secretary-treasurer of
the Respondent, advising them that the Union accepted the
final offer for a labor agreement made on September 28,
1972. In the telegram it was suggested that a meeting be
arranged "to correct errors and insert omission in your writ-
ten offer" and "execute the agreements." 6 On October 5,
1972, a letter of like import was directed to the Employer
5 In the letter it was stated, "Enclosed is what I hope accurately reflects
the Company's final offer"
6 As noted above the written offer did not accurately reflect the oral offer
of September 28, 1972
278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by Elnyczky.
During the week of October 9, 1972, Attorney White and
Elnyczky discussed the "errors" and "omissions." The
Respondent's written offer of September 29, 1972, was re-
viewed "item by item ." White agreed 7 to the corrections,
the insertion of any omissions, and to the setting of an
effective date for the pension provisions.8 At the conclusion
of the conversation White and Elnyczky had agreed on all
issues. White agreed that the errors were his errors and that
"he would correct them and make a new draft and submit
it to the employer and the employer would contact [Elnycz-
ky] for a meeting to execute the agreement " On October 16
or 17 the draft agreement (G.C. Exh. No. 5) was prepared
but the Union was not contacted to execute the agreement?
When Elnyczky did not hear from the Respondent by Octo-
ber 17 he called White who told him that the Respondent
would not sign and that "their offer was void due to the fact
that it was not acceptable to the employees." Elnyczky
countered that "a handful of people showed up" at a meet-
ing and "they, in fact, ratified it." A letter from White
followed, dated October 24, 1972, in which it was stated in
part "Southland Dodge will not execute a collective bar-
gaining agreement embracing the terms of our final offer to
the Union. . . . In as much as that final offer was never
ratified by a majority of the employees and inasmuch as the
company has no desire to force upon the employees terms
and conditions of employment that they refuse to work
under, the final offer is considered to be void.. .... (Em-
phasis supplied.)
B. Conclusions and Reasons Therefor
In Section 8(d) of the Act it is stated:
For the purposes of this section, to bargain collec-
tively is . . . the execution of a written contract incor-
porating any agreement reached if requested by either
party .
Apparently the Respondent does not claim that an agree-
ment was not reached between Union Representative El-
nyczky and Respondent Representative White. Nor is there
any claim that White was not authorized to bind the Re-
spondent.10 The claim is that the Union's acceptance via
Elnyczky was no acceptance at all in that it did not repre-
White testified
We did talk and we did run through a list of items that Mr Elnyczky
said I neglected to put in my letter that I sent him on September 29, that
he received on October 2
And on those items which were, in fact, errors, that my written offer
did not accurately reflect as had been stated at the negotiation table on
the twenty-eigth [sic]
I agreed with him that those statements should be changed and the
written offer and the document, it should so reflect it
White referred to the agreed-upon effective date for the pension as a
"sweetener "
9 Of G C Exh 5 White said I believe as to the substantive issues
that it covers, it represents our final position as we represented it to the
Union I don't think there is any mistake in it or anything like that" White
further observed, "There were some minor items, but I cannot say that, that
they raised to the level of preventing us from coming to the meeting of the
minds "
is White testified, "I was chief spokesman for the company I prepared the
written offers , actually I was the sole spokesman "
sent a ratification "by a majority of the employees" of the
Respondent," a condition precedent agreed to by the
Union.
Although the credible record is clear that the
Respondent's final offer of a contract was never withdrawn
by it prior to October 17, 1972, the Respondent insists that
its offer was terminated by the Union's rejection of the offer
on October 2, 1972,12 citing The Restatement of Contracts, §
34 and 35; Williston on Contracts 1957 Ed. § 50A; and
Summary of Pennsylvania Jurisprudence, Contract (1955 Ed.)
It is, nevertheless, clear that the legal theory relied on by the
Respondent is not applicable to the facts in the instant case.
Here, after the Union's rejection of the Employer's offer
and its subsequent acceptance of the offer, the Employer
and the Union resolved any remaining issues, and came to
a meeting of the minds with the clear understanding that the
agreement reached, when committed to writing, would be
executed by the parties as agreed. Indeed there is no credi-
ble evidence that either the Union or the employees rejected
the Respondent's "final" offer (retendered during the week
of October 9) after the meeting of the minds of White and
Elnyczky and the offer was finalized in the form of General
Counsel's Exhibit 5.
The Respondent further insists that, "inasmuch as the
Union stated that there would be a ratification vote before
any final agreement came into being and no such ratifica-
tion took place, no final agreement was reached."
This contention fails because the credible record does not
disclose that the Union agreed with the Respondent that the
binding effect of the agreement was conditioned upon ratifi-
cation of the agreement by a majority of the Respondent's
employees or a majority of the union members among the
Respondent's employees. This finding would be the same
even if White's testimony on this subject were accepted, for
it discloses only a procedure which the Union expected to
follow. '3 Advice from the Union that the "agreement would
be ratified by the employees" does not establish a condition
precedent for the acceptance of the agreement. See Hou-
chens Market of Elizabethtown, Inc., 155 NLRB 729, affd.
375 F.2d 208 (C.A. 6, 1967). In that case the "Union's finan-
cial secretary and business representative, stated to the
company's negotiators that any contract proposed or rec-
ommended by him would have to be approved by the em-
ployees." The Board held that the statements of the union
representative did not impose a condition requiring ratifica-
tion by the employees before the offer could be accepted by
The record reveals
ADMMISIAATIre LAW Juix a Well then I take it that the narrow issue
before me is whether or not General Counsel's exhibit number 5 was
accepted by the Union
ArroiNEr Wxrre That is the way that I would frame the issue
12 In this respect it is significant that on October 4, 1972, when Elnyczky
sought further negotiations after the rejection of the Respondent's offer,
President Constentine said that he, "didn't see no reason for no future bar-
gaining" and that the "offer that was made on September 28 was their final
offer " Neither then, nor until after October 17, did the Employer actually
inform the Union that its offer was withdrawn
13 White testified "I can't give you any specific date, I can only tell you
that Mr Elnyczky advised me that this agreement would be ratified by the
employees, and I remember specifically with respect to the agreement, that
I proposed on September twenty-eigth, [ sic] asking him if he would recom-
mend it and him telling me that he would not recommend it to the employ-
ees
SOUTHLAND DODGE, INC.
the union. See also General Asbestos & Rubber Division,
Raybestos-Manhattan, Inc, 183 NLRB 213.
Indeed, "[i]f the ratification provision was important to
the Company, and if the Company relied on the Union's
statements that the contract would be submitted to the em-
ployees, then such provision would have been incorporated
in the Company's proposed contract. .."Houchens Mar-
ket of Elizbethtown, Inc v. N.L.R.B, supra. Obviously it
became important to the Company only after it sought a
means to escape the signing of the contract.
Moreover, had ratification by the employees been a con-
dition precedent, the approval of the employees who attend-
ed the meeting of October 4, 1972, at 51 Lounge wherein
agreement to accept the Respondent's offer was voted, as
far as the Respondent was concerned, was a sufficient ratifi-
cation, for "it is for the union, not the employer, to construe
and apply its internal regulations relating to what would be
sufficient to amount to ratification." M & M Oldsmobile,
Inc., 156 NLRB 903.14
In any event the Respondent's challenge came too late.
The alleged ineffectiveness of the acceptance was not chal-
lenged at the time (October 4, 1972), or within a reasonable
time thereafter, but was belatedly challenged after October
17, 1972. See M & M Oldsmobile, Inc., supra at 906.
Because an employer may not insist on a ratification of
a collective-bargaining agreement by a "majority of the em-
ployees" (See Wooster Division of Borg-Warner Corporation
v. N.L.R.B., 356'U.S. 342 (1958) 15 the Respondent's refusal
to execute a "written contract" upon the request of the
Union constituted a breach of the Respondent's duty to
bargain collectively within the meaning of Section 8(d) of
the Act. That the Respondent insisted and is insisting on a
ratification of its offer by a majority of its employees is
borne out by the last line of its letter of October 24, 1972:
"Of course, if the company and the union can agree on
different terms and conditions of employment (which the
employees are willing to work under and which the employ-
ees ratify), we would have a contract." (Emphasis supplied.)
Accordingly, the Respondent violated Section 8(a)(1) and
(5) of the Act when, upon the request of the Union, it
refused to execute the written contract incorporating the
agreement reached by the parties H. J. Heinz Company v.
N.L.R.B., 311 U.S. 514, 523, 524 (1941).
Because of its ineffective strike the Union capitulated. Its
capitulation was first accepted by the Respondent as its
yielding to the final offer of the Respondent and was so
treated by White in his conversation and agreement with
Elnyczky. Apparently the Respondent reconsidered and
sought an advantage in the Union's capitulation and weak-
ness. Not only did such change of heart come too late to
relieve that Respondent of the binding effect of its agree-
ment but its unlawfulness was further compounded by its
insistence that there be no contract unless ratified by a
majority of its employees.
1°
As noted above White was informed by Elnyczky, "we had this meeting
where a handful of people showed up and they , in fact ratified it "
15 See also Houchens Market of Elizabethtown, Inc v. N L. R B, supra, at
211
CONCLUSIONS OF LAW
279
1. Respondent is engaged in commerce within the mean-
ing of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The following unit constitutes an appropriate unit for
the purpose of collective bargaining within the meaning of
Section 9(b) of the Act:
All service department and parts department employ-
ees employed by the Respondent at its Clairton Boule-
vard, Pittsburgh, Pennsylvania, location, including
mechanics, body men, porters, new and used car prepa-
ration men, wash and lubrication men, write-up men
and counter men; excluding all office clerical employ-
ees, salesmen, watchmen and guards, professional em-
ployees and supervisors as defined in the Act. 16
4. The Union has been at all times material herein the
exclusive representative of the employees in the aforesaid
appropriate unit for the purposes of collective bargaining
within the meaning of Section 9(a) of the Act.
5. By unlawfully failing and refusing to execute a written
contract embodying the terms and conditions of the oral
agreement reached with the Union, as found herein, Re-
spondent engaged in unfair labor practices in violation of
Section 8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of the Act.
THE RECOMMENDED REMEDY
It is recommended that the Respondent cease and desist
from its unfair labor practices and take certain affirmative
action deemed necessary to effectuate the purposes of the
Act. It is further recommended that the Respondent sign the
collective-bargaining agreement marked General Counsel's
Exhibit 5; that it give effect to such written contract retroac-
tively to October 5, 1972; and that it make whole its employ-
ees for any loss of wages or other employment benefits they
may have suffered as the result of the Respondent's failure
to sign the contract. The loss of earnings under the recom-
mended Order shall be computed in the manner set forth in
F. W. Woolworth Company, 90 NLRB 289, and Isis Plumb-
ing & Heating Co., 138 NLRB 716.
During the period in which the Respondent has failed and
will fail to conform to the provisions of the contract, certain
benefits under the contract will be irretrievably lost to the
employees and the Union, such as union representation, the
daily use of the grievance procedure, and the use of the
bulletin boards. Moreover, the union security requirements
of the contract will lie dormant which may mean that em-
ployees will refrain from paying their dues obligations to the
Union under such provision. By Respondent's refusal to
execute its agreement, the Respondent thus has nourished
"free riders" among its employees and as to these "free
riders," if any, it has caused a deprivation of dues which in
part would have reimbursed the Union for its services ren-
dered as is intended by the statute. Hence it is equitable that
16 The appropriate unit and the unit described in the contract are the same.
280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the loss of such dues, if any, attributable to the
Respondent's refusal to fulfill its statutory obligations ought
to be restored to the Union. Accordingly, it is further rec-
ommended that the Respondent reimburse the Union for
any loss of dues commencing on October 5, 1972, and con-
tinuing thereafter until the contract is executed by the Re-
spondent. The deterrent effect (a remedial objective of the
Act) of such recommendation is obvious.
Upon the basis of the foregoing findings of fact, conclu-
sions of law, and the entire record 17 in this proceeding, and
pursuant to Section 10(c) of the Act, I hereby issue the
following recommended:
ORDER 18
The Respondent , Southland Dodge, Inc., its officers,
agents, successors , and assigns shall:
1. Cease and desist from failing and refusing to sign the
written contract , General Counsel's Exhibit 5.
2. Take the following affirmative action necessary to ef-
17 There being no opposition thereto the General Counsel's motion to
correct transcript is granted
18 In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , 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
fectuate the policies of the Act-
(a) Forthwith sign the contract, General Counsel's Ex-
hibit 5.
(b) Upon execution of the aforesaid agreement, give ret-
roactive effect to the provisons thereof, make whole its em-
ployees for any losses they may have suffered by reason of
the Respondent's failure to sign the agreement and make
whole the Union for any loss of dues in the manner set forth
in the section herein entitled "The Recommended Reme-
dy"
(c) Post at its Pittsburgh, Pennsylvania, establishment
copies of the attached notice marked "Appendix." 19 Copies
of said notice, on forms provided by the Regional Director
for Region 6, after being duly signed by Respondent's repre-
sentative, shall be posted by it immediately upon receipt
thereof, and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places where
notices to employees are customarily posted. Reasonable
steps shall be taken by Respondent to insure that said no-
tices are not altered, defaced, or covered by any other mate-
rial.
(d) Notify the Regional Director for Region 6, in writing,
within 20 days from the date of this Order, what steps the
Respondent has taken to comply herewith.
19 In the event that the Board's Order is enforced by a Judgment of a
United States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board "