State Farm Mutual Automobile Insurance Co.

National Labor Relations Board - Board Decisions

Mar 14, 1972

195 N.L.R.B. 871 (N.L.R.B. 1972)

STATE FARM MUTUAL AUTO INSURANCE CO 871
State Farm Mutual Automobile Insurance Company
and American Communications Association, Com-
munications Trade Division , affiliated with Interna-
tional Brotherhood of Teamsters , Chauffeurs, Ware-
housemen and Helpers of America. Cases
29-CA-2029 and 29-CA-2200
March 14, 1972
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND KENNEDY
On August 24, 1971, Trial Examiner Arthur M.
Goldberg issued the attached Decision in this proceed-
ing. Thereafter, exceptions were filed by the General
Counsel and the Charging Party together with a sup-
porting brief. Respondent also filed cross-exceptions
and supporting and answering briefs.
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 Trial
Examiner's Decision in light of the exceptions, cross-
exceptions, and briefs and has decided to affirm the
Trial Examiner's rulings, findings, and conclusions and
to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor Re-
lations Act, as amended, the National Labor Relations
Board adopts as its Order the recommended Order of
the Trial Examiner and hereby orders that Respondent,
State Farm Mutual Automobile Insurance Company,
Bloomington, Illinois, its officers, agents, successors,
and assigns, shall take the action set forth in the Trial
Examiner's recommended Order.
TRIAL EXAMINER'S DECISION
ARTHUR M. GOLDBERG, Trial Examiner: Pursuant to an
order of the Regional Director for Region 29 of the National
Labor Relations Board (herein called the Board), a hearing
was held in Brooklyn, New York, on February 22 through 26,
1971, and March 23 and 24, 1971, on an Order Consolidating
Cases, Consolidated Amended Complaint and Notice of
Hearing issued on December 18, 1970, alleging that State
Farm Mutual Automobile Insurance Company (herein called
the Company, they Respondent, or State Farm) had violated
Section 8(a)(1), (3), and (5) of the National Labor Relations
Act, as amended (herein called the Act).
The complaint, based upon charges filed on June 9, 1970,'
in Case 29-CA-2029 and on November 30, in Case 29-CA-
2200, by American Communications Association, Communi-
cations Trade Division, affiliated with International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America (herein called the Union or the Charging Party),
I Unless otherwise noted all dates herein were 1970.
alleged that on various dates commencing on or about Janu-
ary 22 and ending May 14 the Respondent negotiated with
the Union in bad faith and with no intention to enter into a
collective-bargaining agreement with it although the Union is
the duly certified representative for a unit of Respondent's
field claims specialists and field claims representatives as-
signed to three of its offices on Long Island, New York.
Additionally, the complaint alleged that commencing on or
about November 8, 1969, and at various times thereafter
State Farm unilaterally changed wage rates and cost-of-living
differential payments to its employees in the bargaining unit
and changed other terms and conditions of employment all
without prior notice to the Union and without having
afforded the Union an opportunity to negotiate and bargain
concerning such changes. Further, the complaint alleged that
on or about July 18 the Company terminated its practice of
granting wage increases to employees in the unit while con-
tinuing to grant such wage increases to all of its other em-
ployees and that on or about August 3 the Company failed
to grant its unit employees a cost-of-living adjustment which
it granted to all other of its employees. The Company was
alleged to have taken these unilateral acts without prior no-
tice to the Union and without having afforded the Charging
Party an opportunity to negotiate concerning those actions.
On December 31, in reply to a motion for more definite
statement filed by State Farm on December 21, counsel for
General Counsel delineated as follows the terms and condi-
tions of employment which it had been alleged in the com-
plaint had been unilaterally charged by the Respondent:
1. Imposition of a requirement that unit claims adjustors
take photographs and provide estimates of damage in all
cases assigned to them.
2. A change in the policy of reducing the number of cases
assigned to unit claims adjustors during the week before
vacation periods and during the weeks in which holidays
fall.
3. A change in the Company's "open door" policy which
provided that personnel matters could be handled
through all levels of management.
The Respondent's answer denied all of the material allega-
tions of the consolidated complaint as amplified by the Gen-
eral Counsel's reply to the motion for definite statement.
All parties participated in the hearing and were afforded
full opportunity to be heard, to introduce evidence, to exam-
ine and cross-examine witnesses, to present oral argument,
and to file briefs. General Counsel presented a brief oral
statement at the close of the hearing and briefs were filed by
the General Counsel, State Farm, and the Charging Party.'
Upon the entire record in the case, my reading of the briefs,
and from my observation of the witnesses and their de-
meanor, I make the following:
FINDINGS OF FACT
I THE BUSINESS OF THE RESPONDENT
State Farm Mutual Automobile Insurance Company, an
Illinois corporation, maintains its principal office and place of
business in the city of Bloomington, State of Illinois, and in
various other places of business in other States of the United
States, where it is, and has been at all times material herein,
engaged in the sale of automobile insurance and related ser-
vices. During a representative 1-year period Respondent, in
the course and conduct of its operations, derived gross reve-
nues therefrom in excess of $500,000 and purchased and
I Counsel for the Charging Party participated only in the first day of
hearing Charging Party's brief was limited to the question of relief which
it requested in this proceeding
195 NLRB No. 155
872 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
caused to be transported and delivered to its New York places
of business, office equipment and supplies and other goods
and materials valued in excess of $50,000, of which goods and
materials valued m ,excess of $50,000 were transported and
delivered to its New York places of business in interstate
commerce directly, from States of the United States other
than the State in which it is located.
The complaint alleged, the answer admitted, and I find that
the Company is and has been at all times material herein an
employer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act and meets the Board's standards
for assertion of its jurisdiction.
II THE LABOR ORGANIZATION INVOLVED
American Communications Association, Communications
Trade Division, affiliated with international Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of
America, is and has been at all times material herein a labor
organization within the meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Background
State Farm is the world's largest carrier of automobile
casualty insurance employing approximately 3,500 claims ad-
justors in the continental United States and Hawaii. On Sep-
tember 7, 1967, in a Board-conducted election, a majority of
the employees in a unit consisting of all field claims specialists
and field claims representatives employed by the Employer
assigned to the Smithtown; Syosset, and Jericho, Long Island,
New York, offices, excluding superintendents and all other
managerial and supervisory personnel, clerical employees
and guards as defined in the Act, selected the Union,as their
collective-bargaining representative. On September 15, 1967,
the Union was certified as the exclusive collective-bargaining
representative of the employees in the unit. The United States
Court of Appeals for the Seventh Circuit on August 1, 1969,
enforced a Board order requiring the Company to bargain
with the Union. The Supreme Court denied the Company's
petition for a writ of certiorari on December 8, 1969.
On December 18, 1969, William Bender, the Union's secre-
tary-treasurer, wrote to State Farm's executive vice president
requesting that collective' bargaining start at the Respond-
ent's earliest convenience. Bender asked as well that the Com-
pany supply copies of any current employee benefit plans
such as pension, health, medical, and the like. Following an
exchange of correspondence the first bargaining session was
scheduled to be held in New York City on January 22.
B. The Allegations of Surface Bargaining
Determination of the complaint allegations that "Respond-
ent negotiated with the Union in bad faith, and with no
intention to enter into any final or binding collective bargain-
ing agreement with it" requires analysis of the parties' actions
during the 11 bargaining sessions which took place between
January 22 and May 14. This analysis is set forth herein in
two ways. First, a chronological analysis of the course of
bargaining with a description of the subject matters treated
and the position of the parties on the matters on the table.
Second, a more detailed examination of the more important
matters which the parties discussed during the course of these
bargaining sessions. In the chronological analysis of the bar-
gaining those subjects not treated individually will be set
forth in more detail. As to those matters Which will be the
subject of examination by themselves, their treatment in the
chronological analysis will be more perfunctory.
Except for the meeting of March 18, when the Union's
negotiating committee was expanded to include additional
adjusters from the bargaining unit the Union's, negotiating
team throughout consisted of William - Bender, the Union's
secretary-treasurer, and two = of the adjustors , Patrick Vitale
and Joseph Reynolds. , The Company 's bargaining team re-
mained " the same throughout the sessions except for one
change. The Company 's chief spokesman was Attorney John
T. Weise. With Weise were B. Gerald Reynolds, Respond-
ent's house counsel , Gerald Strickland, the Company's per-
sonnel director for the region in which the bargaining unit
falls, and Richard Meyer, area claims manager. Paul L.
Mitzner, vice president for personnel , attended the first ses-
sion on January 22. At the second session and thereafter
Ernest Hoffman , Respondent 's assistant vice president for
personnel, took Mitzner's place.
The General Counsel and Respondent each called one wit-
ness to testify as to the events at the bargaining table. Bender
was the General Counsel's witness and Weise testified on
behalf of the Respondent. Accordingly ,' the recitation of the
events at the bargaining table set forth below are in the main
a synthesis of Bender 's and Weise's testimony except as to
those matters where there is a conflict between them. Addi-
tionally, at certain points in recitation of the events corrobo-
ration was given to Weise's testimony by B. GeraldReynolds,
Respondent 's house counsel, and Ernest Hoffman, assistant
vice president for personnel.
1. Chronological Analysis
a. Meeting of January 22
This session commenced at approximately 1 p.m. at the
New York Hilton Hotel.
The Union claimed to represent the fire claims representa-
tives working out of the Company's Syosset office and asked
State Farm to recognize it as their bargaining agent. The
Union offered to prove its majority status in any way which
would avoid protracted Board ' ;and 'court procedures. The
Company refused to recognize the Union for the fire claims
representatives as they had not been includedin the original
certified unit.
Weise, for State Farm, raised -the question of compensation
for the employee-members of the Union's negotiating com-
mittee while they were attending bargaining sessions. The
Company said it would treat their attendance at the negotia-
tion meetings as if it were an ordinary leave of absence, for
personal reasons . Thus, if the session lasted less than 1 day
the employees would receive their normal pay. However, if
the negotiations lasted a full day the employees ' pay for that
week would be reduced by one-fifth and their workload
would be reduced accordingly . The Union objected pointing
out that adjustors were not compensated for Saturday, Sun-
day, holiday, or overtime work . Bender objected to deduc-
tions from their wages for attendance at bargaining sessions
saying that the Union "considered that a form of intimida-
tion."
Bender presented the Union 's demands consisting of a
proposed form of agreement including some 25 items. All of
these union demands were subsequently discussed during the
bargaining session which followed. The Union 's, demands
included the following items :., union recoginition; union
security, calling for a union shop ; checkoff of union dues,
providing for mandatory checkoff, of dues with the checkoff
form granting the right of,annual revocation ; seniority, pro-
viding that layoffs should be in inverse order of seniority on
a companywide basis, promotions to be made on the basis of
seniority , and recall of laid -off employees to be on the basis
of seniority ; severance pay; vacations, providing for a 1-week
vacation after 6 months of employment and increasing to 5
STATE FARM MUTUAL AUTO INSURANCE CO. 873
weeks after 15 years of service ; holidays numbering 7; a work-
week of 30 hours, Monday through Friday with time and
one-half for all overtime and for all work performed on Satur-
day, Sunday , or holidays ; discharge to take place only for just
cause and requiring that the Company notify employees in
writing of the reasons for discharge , with the Company re-
quired to give at least one warning notice in writing to the
employees prior to discharge specifying the complaint against
him with a copy of that warning to the Union and in addition,
the discharge proposal provided for arbitration of discharge
cases whenever the Company and the Union were unable to
adjust a claim that the discharge was unjust ; grievance and
arbitration procedures establishing a four -step grievance
procedure culminating in mandatory arbitration ; insurance
paid in full by the Company providing Blue Cross and Blue
Shield coverage for its employees and their dependents; a bar
against discrimination against any employee because of age,
sex, color, nationality or creed , or activity on behalf of the
Union ; leave of absence without deduction of seniority; sick
leave for stated periods depending upon length of company
service ; pension , the Union stating that it would present at a
future meeting its suggestions for improvement of the Com-
pany's pension plan; college loans to be available to the em-
ployees at low interest rates; jurisdiction , providing that unit
personnel should not be used for work outside of their field
of employment without the consent of the Union , that em-
ployees in the bargaining unit were not to be transferred or
temporarily assigned from one classification to another or to
another geographical area without agreement of the parties,
and forbidding performance of bargaining unit work by per-
sons outside the bargaining unit ; wage rates calling for a
starting salary of $200 per week rising to $350 per week after
3 years of employment ; picket line provision freeing the em-
ployees from any company action for refusal to go to work
through a primary picket line; existing privileges clause pro-
viding that all benefits , privileges , and work practices in effect
as of the date of the agreement and which were not in conflict
with the provisions of the contract were to remain in effect;
right to visit , providing that union representatives would have
the right to visit company premises after prior notice to the
Company ; bulletin board privileges for the Union at suitable
places on company premises ; successors and assigns provi-
sion providing that in the event of a sale or other transfer of
its business , the Company would require the purchaser to
adopt the contract with the Union ; invasion of privacy, the
Union stating it would present a proposal on this subject in
the near future ; and a term of agreement provision providing
for a 1-year contract effective as of November 1, 1969.
As to invasion of privacy the Union asked that the Com-
pany not investigate the private affairs of any employee or
cause such investigation to be conducted.
Bender amplified the Union 's pension demands by asking
that the Company cease deducting social security contribu-
tions from the employees ' wages, that it reinstate a prior
pension plan , and that there be 100 percent vesting of pension
rights after 5 years of service with State Farm.
Bender explained that the Union 's demands were "op-
timum" and while they represented a substantial improve-
ment in wages, hours, and working conditions then in effect
the Union was prepared to negotiate on each of the demands
it had presented.
There was little discussion of the Union's demands at this
first meeting although Bender testified that the Union ex-
plained its seniority proposal and said it expected little oppo-
sition on this demand since vacations were usually granted in
order of seniority and most employers , whether union or
nonunion , made layoffs in inverse seniority and observed se-
niority in their relaitons with their employees.
Weise told the Union that effective March 1 the insurance
carrier was raising premium charges for the hospital and
medical programs and that the employees ' share of the premi-
ums would go up accordingly . Weise testified the Union
raised no objection to this increase in premiums.
The meeting closed with agreement to resume negotiations
on February 11 and 12.
b. Meeting of February 11
Weise presented copies of the Company 's printed vacation
policy to the Union . Bender asked whether this policy cov-
ered all unit employees and the Respondent replied that it did
and explained the application of the policy.
Weise then stated that the Company had considered and
modified its approach to salary payments to employee-mem-
bers of the Union 's negotiating committee. In the future if
negotiation sessions lasted the entire day the employees' pay
would not be reduced so long as they kept up with their work
assignments. Weise added that the Company might review
this policy from time to time . The Union replied that the
Company 's position was satisfactory.
The Company then presented a written counterproposal
covering the unit and recognition clause. The Company ques-
tioned the status of "suit" personnel who had participated in
the election but were now under different supervision. The
Union objected to any exclusion of the suit people (three in
number) from the bargaining unit . The Company refused to
include the fire claims representatives in the unit as they were
not part of the certified unit. As to all other aspects of the
Company's unit counterproposal the Union raised no objec-
tions.
The parties then turned to discussion of the Union's 25
demands . Bender stated that for stability in labor relations
the Union had to have some form of union security. He
testified that he stated that union security could come in
various forms , and that the Union was willing to bargain and
discuss any other form of union security which would guar-
antee stability of union membership. Weise replied that State
Farm was opposed to any form of compulsion whether it be
a union shop , compulsory union membership , or a nonrevo-
cable checkoff. Weise pointed out that even as to company
benefit programs for which the Respondent paid the entire
cost the employees retained the option to be voluntarily cov-
ered by such a fringe benefit . However , if the Union would
drop compulsion from membership and checkoff the Com-
pany would give serious consideration to some form of
checkoff revocable at will and at any time.
Weise took the postion that a seniority provision was un-
necessary . He pointed out that applying seniority in layoffs
was unnecessary because State Farm had never had a layoff
and none was contemplated in the foreseeable future. Weise
stated that the Company in most cases applied seniority if
several employees wanted vacation at the same time. Weise
pointed out that seniority was not a meaningful concept in
promotions because in the Company's manner of operations
a vacancy was not required for promotion within the salary
structure applicable to field claims adjusters and that a person
was promoted within the salary structure if he fulfilled the
experience and time required . Joseph Reynolds, a union
member of the negotiating committee , said the Union was
thinking of promotions to management positions. Weise
questioned whether this was a required subject for bargaining
and declared that State Farm would not favor applying se-
niority to promotions into management positions.
As to a number of the Union's demands the Company took
the position that these were economic in nature and that it
preferred to dispose of what it characterized as noneconomic
matters before turning to those which it felt were economic.
874 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Among the items passed over on this basis were severance
pay, vacations, holidays, insurance, college loans, pensions,
sick leave, and wage rates.
There was some discussion however of the Company's pro-
motional and wage policy. Bender claimed that Weise said
that within a reasonably short time the Company would
present its promotional and wage policy which left no room
for a bargaining agent to participate.
There was a lengthy discussion of the Union's request for
a 30-hour workweek and for time and a half for work per-
formed over 30 hours in a week and for work on Saturdays,
Sundays, and, holidays.'
A discussion of the Union's proposed discharge clause en-
sued in which, according to Bender, Weise objected to a
contract requirement of warnings to employees before dis-
charge. Weise testified that he had told the Union he under-
stood their proposal, that the Company agreed generally with
the concept of just cause for'discharge, and that State Farm
would submit a proposal to the Union on the subject of
discharges.' Weise claimed that nothing of substance was said
about warnings at that time.
The Company agreed that a grievance procedure was re-
quired but said it was not entirely happy with the Union's
proposal and would submit a redraft. Weise asked a number
of questions and there was a general discussion of grievance
procedure" steps and where it would be sensible to have griev-
ances handled, in the sequence of the procedure set forth.
Weise advised the Union that the Company had a consent
waiver form in mind for inclusion in the contract. This con-
sent waiver would protect the Company and the Union from
an employee lawsuit arising from the processing of a griev-
ance. Bender claimed and Weise denied that the Company
proposed the consent waiver clause as a matter which had
been proposed to State Farm in its negotiations with the
Insurance Workers International Union (IWIU) for a differ-
ent bargaining unit. Bender said he was not familiar with a
consent waiver form, questioned its legality, and reserved his
position until a draft was submitted. While denying that the
consent waiver was presented to the Union as something
which had been first suggested by the IWIU, Weise did testify
that it had been proposed to State Farm by the other union.
However, he denied referring to the IWIU in this discussion.
The Company expressed serious reservations about provid-
ing for mandatory arbitration of all grievances. Weise testified
that the substance of the parties' discussions concerning arbi-
tration occurred at the next meeting. Weise stated that on
February 11 Bender said there was a method provided in
certain Teamsters contracts giving the union the right to
strike concerning grievances which were not arbitrated.
Bender testified that in discussing the Union's proposed
clause barring discrimination the Company argued that such
a contract provision was not needed because there were gov-
ernmental agencies to take care of all such problems. Bender
replied, according to Weise, that such a contract provision
would give the Union the right to grieve over alleged cases
of discrimination and this was a better way to resolve disputes
rather than going through governmental agencies.
Bender and Weise gave different versions of the discussion
on February 11 concerning the Union's requested jurisdiction
provision. Bender testified that Weise stated the Company's
opposition to a provision limiting its ability to transfer em-
ployees in the bargaining unit or to assign them temporarily
to a different geographic unit and that it was opposed as well
to a prohibition against bargaining unit work being per-
formed by people outside the unit. Bender testified that Weise
stated the Company felt this to be a management prerogative.
Bender explained that barring the use of unit personnel for
nonunit work would prevent requiring adjusters to perform
menial or manual work. The Company replied that it would
consider its position as to this aspect of the proposal and
advise the Union at a future session. Weise testified that the
discussion consisted mainly of questions in which he asked
what the Union was really looking for. The union negotiators
replied that they were concerned about the Company requir-
ing adjusters to move furniture, take postage meters to the
post office, or to bring boxes in from the street.
Weise explained to the Union that a limitation on State
Farm's ability to have bargaining unit work performed by
nonunit people was unworkable because independent adjust-
ers were needed to handle peak load work and to investigate
cases in minority areas. As well, the Company from time to
time used supervisory and clerical personnel to, assist in the
claims adjusting work. Accordingly, the Company did not
want to create a situation where it would be inviting griev-
ances by incorporating in the contract a limitation on its
ability to assign work.
According to Bender, the Company rejected the Union's
picket line provision. When Bender noted that this was a
standard clause in many Teamsters contracts Weise stated
that Bender had done his duty to his Union by presenting the
proposal but that the Company would not agree. Bender said
he thought the provision had great value, that the Union did
not want its people to go through picket lines, but Weise
repeated that the Company could not agree to the proposal.
Weise's version of this exchange was that he had stated to the
union negotiators that the picket line and existing privilege
clauses looked like standard Teamsters provisions to which
Bender replied that he had regulations from his own home
office and had to propose certain items in the negotiations.
The parties then turned to the Union's proposed existing
privileges clause. The Company said it could not agree to a
blanket provision but that if the Union wished to discuss
specific existing privileges the Company would treat such
matters on an individual basis. Bender explained that the
parties were negotiating a first contract, the employees en-
joyed many things, and that the negotiations would be greatly
lengthened if all of the specific existing privileges which were
of vital importance to the employees had to be discussed on
an individual basis. Weise countered that the Company did
not want to invite grievances over matters which could be
raised as a unilateral change of an existing privilege. Bender
denied that this was the intent of the clause and Weise re-
peated that the Company could not agree to a blanket provi-
sion.°
The Company raised no objections to the Union's proposal
that it have the right to visit the Company's premises but
Weise asked the purpose of the clause. Bender explained that
the Union would visit the company premises only to service
its members and to discussi grievances. Bender added that the
Union would not disrupt normal work procedures in exercis-
ing this right. The Company had no objection in principle to
this proposal but Weise said he was not certain the language
proposed was totally acceptable. Weise testified that he told
the Union that this proposal did not bother the Company
"but is it really a big enough deal to put in a contract."
As with the Union's request for the right to visit the Com-
pany raised no objection to the Union's demand that it be
afforded bulletin board privileges on company premises.
' The workweek issue is discussed in full detail under the subject headings
of matters discussed in the collective bargaining, infra
This account of the discussion of existing privileges is based on Bender's
testimony only
STATE FARM MUTUAL AUTO INSURANCE CO. 875
The Company stated that it would not agree to the Union's
proposal that successors and assigns be bound by the colfec-
tive-bargaining agreement. Weise and Gerald Reynolds ques-
tioned the legality of the provision and Reynolds pointed out
that since the Company was owned by policyholders it could
not be sold or merged like other companies.
Bender testified that the Company opposed the Union's
proposal of an invasion of privacy clause which read:
The Company shall not conduct or cause any other
agency to conduct an investigation into the private
affairs of any employee in the bargaining unit.
The Company explained that the nature of the insurance
business made it necessary to check on the employees at
regular intervals to make certain that they were "playing the
game straight."
The bargaining session adjourned at approximately 5 p.m.
with agreement to resume the following day, February 12.
c. Meeting of February 12
The parties again discussed the Company's proposed
recognition clause. The Union agreed to the Company's
proposal as drafted, including the classifications to be in-
cluded in the unit. However, the parties were still apart on
the inclusion of the suit personnel in the unit and recognition
of the Union as bargaining representative of the fire claims
men.
Weise distributed and explained the Company's discharge
clause proposal. The Union summarized its objection to the
Company's proposal on four grounds:
(1) No fixed training period.
(2) Failed to include provisions for warnings to em-
ployees before discharge.
(3) The Union had to wait to see the Company's
proposed consent waiver clause.
(4) The Union demanded the complete right to arbitrate
all discharge cases.'
The Company distributed its six-page grievance procedure
proposal. The Company's definition of a grievance "as being
a difference between the employee and the Company as to a
contract violation" was narrower than that proposed by the
Union and the Union's negotiators stated that they preferred
the definition they had proposed. The Union suggested as
well that the proposed time periods for processing grievances
were restrictive, that these be lengthened, and that the Com-
pany be required to respond to grievances within stated peri-
ods. Weise testified that he explained the purpose of the con-
sent waiver form and his feeling that it would benefit both the
Company and the Union. Bender replied that he had never
heard of such a provision and would withhold judgment until
he saw the draft which the Company would submit at a later
session. However, Bender said that his initial reaction to the
proposal was not favorable.
The Company's proposal on arbitration contemplated
voluntary arbitration when the parties both agreed to arbitra-
tion of a particular grievance. However, if "arbitration is not
available" the Union could enforce its position concerning a
grievance by a strike. Weise noted that this was the procedure
which Bender had referred to at an earlier meeting. The
Union continued to insist on the right to arbitrate all griev-
ances. The Union objected to awards being retroactive only
to the date upon which grievances had been filed and that it
share the cost of a transcript. Bender testified that the Union
rejected the right to refuse arbitration.
' The negotiations concerning a discharge clause in the collective-bar-
gaining agreement are discussed in detail, infra, under the general heading
of subjects during the negotiations
The Company's grievance procedure proposal contem-
platedthe Union appointing a shop steward to participate in
the grievance procedure. The Union suggested that it have
three shop stewards, one for each of the offices in which
bargaining unit personnel were employed.
The Company distributed the draft of its proposed no-
strike and no-lockout clause. Weise acknowledged that the
Company's proposal was a strong clause but said this was to
the employees' benefit because they would know where they
stood. The Company's proposal contemplated that Respond-
ent would have the right to sue for an injunction in the event
of a breach of the no-strike clause and that the Union would
be barred from removing such a proceeding from a state to
a Federal court. Weise noted that giving the Company au-
thority to obtain an injunction against the strike would enable
State Farm to avoid applying extreme discipline against strik-
ers. Bender testified that the Union agreed that it was a very
rough position and a difficult one for it to accept. Bender
noted that the Company suggested serious penalties against
employees who engaged in strikes, slowdowns, stoppages,
boycotts, or picketing against the Company and that he could
not understand why State Farm would require such penalties
when it refused mandatory arbitration to resolve disputes.
The Union rejected the waiver of the no-strike provision
where the Company had refused to submit a dispute to arbi-
tration, Bender pointing out that the Company's proposal
placed many restrictions on the Union's right to strike in such
an event. Weise testified that Bender said he would have to
refer the Company's proposal to his attorney.
Bender testified that during the February 12 negotiation
session the Union asked for certain items of economic infor-
mation. First, there was a request for a breakdown of either
the dollar amounts or precentages paid by the Company and
the employees for the contributory hospital, medical, surgi-
cal, and major medical insurance. Respondent replied that it
would attempt to have this information available at an early
meeting. Second, Bender testified that the Union asked for a
list of salaries being paid to employees in the bargaining unit
and, if possible, a copy of the Company's policy in writing in
regard to salary increases, promotions, other economic
changes, cost-of-living increases, and area differentials. The
Union's negotiator testified that Weise replied that the Com-
pany would consider this request and would try to inform the
Union at an early meeting whether the requested information
was available. Weise's version of the Union's request for in-
formation concurred in part as to the Union's request for data
concerning the cost of the hospital insurance program. As to
the request for salary information, Weise testified that Bender
had said "he would like salary figures on bargaining unit
personnel." Weise replied that the Company would check
into that for the Union. However, the Company's negotiator
denied that Bender asked specifically for the salaries paid to
each employee in the bargaining unit. Weise denied that the
Union asked for this information at any meeting during the
bargaining.
Bender testified that he asked the Company to submit in
writing a complete package of all of the Company's counter-
proposals, including those as to economic matters., He
claimed to have asked for this on the basis that the parties had
spent considerable time at each meeting going over the same
provisions and that a complete package proposal would speed
up negotiations. Weise replied that the Company's negotia-
tors would take up this request with its principals and re-
spond at an early meeting. The Union asked for meetings on
a continuous basis. Bender suggested that they meet the next
day, over the weekend, or the following Monday. The Union
offered these suggestions for continuing meetings because of
the difficult logistical problems faced by the Company in
876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
assembling its negotiators from three points, some coming
from Bloomington, Illinois, others from the Company's
offices in Wayne, New Jersey, and Weise himself having his
office in Chicago. The Company replied that the earliest it
could next assemble was on March 3. Bender testified that the
February 12 meeting ended early in the afternoon because the
company negotiators stated they had encountered difficulty
with plane reservations especially for the committee members
from Bloomington, Illinois.
d. Meeting of March 3
This meeting opened at 1 p.m. because of the transporta-
tion problems encountered by Respondent's bargaining rep-
resentatives.
Patrick Vitale, an employee-member of the Union's nego-
tiating committee, opened the meeting by reading a prepared
statement in which he noted that he was celebrating his 11th
anniversary with State Farm. Vitale stated that an accumula-
tion of grievances combined with greater workloads and in-
creased responsibility of the adjusters had led the men to
organize and brought them to the bargaining table.
Vitale asked Weise why he was at the bargaining table and
there was discussion of the requirements of the Act which
imposed the bargaining duty upon the employer.
Bender claimed and Weise denied that Vitale asked who
was in charge of grievance handling for the Company in the
Nassau-Suffolk office.
Weise then suggested the parties go through the contract
language which had been covered to that point.
In discussing the recognition clause Bender again asserted
the Union's claim that it represented 100 percent of the fire
claims representatives and asked again for recognition or an
agreement on a procedure to demonstrate the Union's
majority. Weise reiterated the Company's refusal to grant the
Union recognition for those men, but noted-that the recogni-
tion clause had been agreed to by 'the parties except for the
issues concerning the suit men and fire claims representatives.
Weise then informed the Union that costs for the em-
ployees' insurance was broken down in the following manner.
On coverage for the employees themselves the Company paid
two-thirds and the employees' the balance. For premiums
covering dependents of employees the cost was equally di-
vided between the Company and the employee.
Bender testified that Weise informed the Union that the
salary information which it had requested was being prepared
and would be forthcoming at an early meeting. Additionally,
Weise said the Company would not present a package
proposal including economic and noneconomic issues but
would discuss each issue separately as it arose. Further
Bender claimed that Weise said Respondent was preparing its
economic proposals and would let the Union know what they
were at an early meeting. Weise's testimony on the supplying
of economic data to the Union was contrary to that of Ben-
der's. Weise testified that at the March 3 meeting the Com-
pany presented to the Union a one-page document entitled
"Field Claims, Basic Salary Structure II." This document,
which shows job classifications falling within each of the field
claims salary grades numbering four in all and the base salary
ranges for three steps within each of the field claims classes,
does not in any way indicate the actual salaries paid to the
employees in the bargaining unit. Weise testified that there
was discussion of the field claims salary structure and that he
explained the application of the Company's cost-of-living al-
lowance and area differential programs.'
' There was a dispute as to whether the Field Claims, Basic Salary Struc-
ture II document was presented to the Union at this March 3 session or at
The Company presented to the Union a draft of its
proposed consent waiver provision entitled "Authorization to
Discuss Grievance." Bender objected to the requirement
claiming that he stated he would- not permit the Insurance
Workers International Union to dictate policy and would not
accept,the consent waiver proposal either for grievances or
discharges. Weise testified that he repeated his previous state-
ment that he thought the Union should consider the proposal
which he thought had advantages. Weise denied that any-
thing, was said about a contract with, the Insurance Workers
or that Bender claimed the Company was attempting to ob-
tain the Insurance Workers contract in these negotiations
with the Union.
As to the grievance procedure the Company stayed with its
position that its definition of a grievance was more acceptable.
The parties agreed to lengthen periods for processing, griev-
ances at each stage of the grievance procedure. The Company
agreed to the Union's request that there be three shop stew-
ards rather than one.
Bender reiterated the Union's position that a grievance
procedure without mandatory arbitration was a travesty and
unacceptable to the Union. The Company made no change in
its position on aribitration at this point in the negotiations.
The Company and the Union restated their positions on
probationary period for new employees and prior warnings to
employees in cases of discharge.
Weise testified that toward the end of the meeting Bender
asked if it was possible for the Company to present a complete
package, including its position on economic issues. When
Weise replied that it appeared to him that they were making
good progress on the language items, Bender replied that he
had no strong feelings on this subject.
The'meeting closed with agreements to meet the next day,
March 4.
e. Meeting of March 4
The Company presented a broad management rights
clause.' Weise indicated that the Company wanted this clause
because it dealt with no other unions and was jealous of its
prerogatives. The Union said it would not agree to this clause
without seeing the whole contract, but if the Company
wanted a rational discussion of the management rights clause
it should present a package proposal. Weise denied that a
package proposal was mentioned in the discussion of the
management rights clause.
Weise presented redrafts of the grievance procedure and
shop steward clauses incorporating the agreements reached at
the March 3 session.
The-parties discussed the Company's proposed conflict-of-
interest provision which barred the practice of law by an
adjuster. Weise explained that even a real estate closing might
create a conflict of interest because the property might be that
of a bodyshop owner. The Union argued that if a lawyer-
employee abided by rules governing conflict of interest for
attorneys they should be permitted to practice. The Company
a later meeting as Bender claimed The document introduced into evidence
bears in the upper righthand corner the date March 3, 1970. Throughout the
presentation of the case as company documents presented during the course
of negotiations came into evidence they bore in'the upper righthand corner
the date on which they had been presented by the Company to the'Union
I find no reason to believe that in dating this document the Company
deviated from the procedure followed throughout the negotiations wherein
it dated the document as of the day it was presented Accordingly, I find that
the Field Claims, Basic Salary Structure II document was in fact delivered
to the Union by the Company at the March 3 negotiation session-
'
The text of the proposed company clause is set forth below in the
discussion of the negotiations concerning the subject matter
STATE FARM MUTUAL AUTO INSURANCE CO. 877
insisted that the practice of law was per se a conflict of inter-
est.
After Weise presented a new no-discrimination clause
which covered all matters suggested by the Union in its initial
proposal other than a ban on discrimination because of union
activity or age, the Union suggested that the clause be broad-
ened to include a ban against discrimination for practice of
law. There was a further discussion at this point of the prac-
tice of law by adjusters. As to the Company's draft itself, the
Union stated that the Company was merely offering to ob-
serve the law. Weise offered to include a ban on discrimina-
tion because of union activity if the Union would drop its
union-security proposal. Weise stated that State Farm would
consider a revocable checkoff if the Union would drop its
demand for union security, stating again that the Company
would not accept requirements that the employees join the
Union or pay dues.
Respondent agreed to a union bulletin board on the Com-
pany's premises but retained the right to examine notices
before posting. Bender stated that the Company's proposal
was in essence what the Union wanted but questioned Re-
spondent's right to examine postings in advance. Weise dis-
claimed any interest in censoring union notices but said State
Farm was concerned that the bulletin board might be used for
notices defaming company officials. Bender commented that
the bulletin board issue would not prevent the reaching of an
agreement.
In a lengthy discussion of the Union's workweek proposal,
Weise noted that it contemplated a 25-percent reduction in
work hours and would require the Company to hire addi-
tional field claims representatives or in other ways increase
the use of other personnel to handle claims. Respondent
noted that company cars were used by adjusters on weekends
or holidays but if their work was limited on those days the
Company might take this privilege away as the cars were not
needed in the Company's behalf. Neither party deviated from
its position on the Union's workweek proposal, the Union
reiterating its demand, the Company restating its opposition.
Bender testified that the parties discussed the Union's se-
niority proposal at the March 4 meeting. Weise did not refer
to such a discussion in his testimony.
The Union asked that the next negotiation session be held
on Long Island where more members of the bargaining unit
could participate. The Company agreed to arrange for a suita-
ble meeting place in the general area of Jericho, Long Island.
f. Meeting of March 18
This session convened at 4 p.m. in a motel in Jericho, Long
Island. The Union added a number of property claims adjust-
ers to its regular bargaining committee.
Bender testified that the parties discussed a number of
proposed contract clauses repeating to a large extent state-
ments made at prior sessions . The matters rehashed were the
recognition clause, management rights, discharges, the Com-
pany's proposal for a consent waiver, the bulletin board
clause, the no-discrimination provision, union security, and
conflict of interest.
Weise testified that Vitale asked for figures on retirements
by adjusters from service with State Farm, asserting that
adjusters were in some manner eased out of employment
before they reached retirement age, making age discrimina-
tion a problem.
The Company distributed a proposed "Termination and
Legality" clause, including subparagraphs entitled "savings
clause," "entire agreement," "waiver clause," and "termina-
tion." Weise explained each of these provisions. Bender
stated he would have to see the whole contract before he
could respond to certain of the matters in the proposal.
Bender testified that the Union raised no objection to this
proposal , noted that it presupposed an agreement , and told
the Company that if this meeting was any indication of the
speed they were to make in reaching an agreement State Farm
could save its termination clause for quite a period of time.
Weise testified that Bender claimed the employees were
unhappy over the slow progress of negotiations and that he
wondered if the Company could submit a total economic
package . Weise opined that progress was being made with
agreement reached on certain sections . Weise noted that
easier items were often settled first but that they were making
progress on substantial issues . Bender replied , according to
Weise , that he did not mean to imply the Company was not
agreeing to items of substance and he agreed that they were
making some progress but he felt that it was a bit slow.
g. Meeting of March 19
On March 19 the negotiations returned to the New York
Hilton Hotel with the regular bargaining committees present.
Weise made a new four-point discharge proposal changing
the Company 's position in certain particulars. First, the
Company agreed to limit the probationary period to 9
months. Second, the Company asked that the Union drop its
demand for warnings prior to discharge repeating the argu-
ment that the just -cause concept gave the Union the protec-
tion it needed . Third, the Company agreed to arbitration of
discharge cases as a matter of right . Fourth , the Company
dropped its consent waiver proposal.
Weise testified that after a break Bender said the Com-
pany 's proposal was acceptable except that the Union would
prefer a 6-month probationary period and stated , in Weise's
words, "Although we don't like your proposal as it relates to
the warning clause, and although we'd still like to have it in
there, it's a possibility that the Union can live without that."
Weise distributed a printed card containing the Company's
policy on "time off-without pay ." Gerald Strickland, a mem-
ber of the Company 's negotiating team , explained that time
off was permitted for dental and medical appointments, for
the donation of blood , jury duty , or death in the family. In
the latter event the workload of the adjuster was reduced.
Weise announced that at the next meeting the Company
would present a complete proposal on the language items.
Weise claimed that Bender agreed to this procedure.
The next meeting was scheduled to be held on April 2.
h. Meeting of April 15
The meeting set for April 2 was postponed until April 15
because a strike of air traffic controllers prevented the com-
pany negotiators from traveling to New York for the sched-
uled session.
State Farm agreed to include the suit men in the unit.
Further , the Company proposed the filing of a joint unit
clarification petition with the Board asking that the fire
claims representatives be included in the certified unit. Weise
explained the unit clarification procedure with which Bender
was not familiar.
The Company presented a retyping of its original bulletin
board proposal to which the Union did not object.
State Farm submitted a new proposal on the no-discrimi-
nation area , including the provision "The Company agrees to
comply with applicable Federal Laws and New York State
Laws on age discrimination ." Bender testified that he re-
sponded that the proposal omitted reference to no -discrimi-
nation because of age and that Weise reponded that the Com-
pany would not agree to put in a no-discrimination clause
because of age.
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Company then handed out a redraft of its proposal
concerning conflicts of interest, permitting the practice of law
by an adjuster provided there was advance written authoriza-
tion from the divisional claim superintendent . Bender ques-
tioned the requirement for advanced written authorization
and Weise explained that the Company wanted to make cer-
tain that the employees' practice of law did not involve cases
involving other insurance companies.
Following distribution of the Company's discharge provi-
sion incorporating the four-point proposal it had made on
March 19, Bender noted that the warning provision was omit-
ted. Bender claimed that Weise stated that the Company
would always give a warning to employees whose work was
not up to par or whose attendance was poor, but that the
Company did not want such a provision in the contract. The
Union again took exception to the 9-month probationary
period.
Bender reiterated the Union's desire to have arbitration in
all cases , noting that without mandatory arbitration there
was no compulsion on the Company to settle grievances.
Bender stated that Weise repeated the Company's position
was unchanged and that it would not agree to mandatory
arbitration. Weise recalled telling the Union that when Re-
spondent could see the entire contract it would take another
look at its position on the question of mandatory arbitration.
At the April 15 meeting for the first time the Company
demanded that an employee have a valid driver's license as
a condition of employment. The Company noted that field
claims representatives had to drive cars to do their work.
Bender replied the Union could not agree to such a proposal,
noting that the Company was adding a new proposal at the
eighth meeting and that it appeared to him that instead of
getting closer to an agreement the Respondent was trying to
push them further apart by making new and objectional
proposals at this late date. The Union objected to the require-
ment which could adversely affect an employee of long se-
niority who might lose his driver's license for reasons beyond
his control. Bender asked if such an employee would be dis-
charged. Weise replied that loss of a driver's license would
not necessarily lead to a discharge but it would be tough for
the adjuster to stay in the field claims representative bargain-
ing unit . Weise conceded that Bender had raised a point
which might have merit and that he did not know the answer
at that time.
The Company distributed a written proposal containing
suggested language for a voluntary checkoff authorization
revocable at will. The Union noted that the law provided a
manner in which the checkoff authorization could be revoked
and charged that the Company's proposal was an indication
of its unwillingness to grant stability to the Union.
The parties reviewed their positions on certain other items
of the agreement reiterating stands they had taken in earlier
sessions . Weise testified that Bender indicated in a conversa-
tion the Union would accept a lesser form of union security
other than the union shop if it would accomplish the same
thing for the Union; that is, requiring all employees to pay
money to it.
Following distribution and discussion of the various new
proposals which the Company made at this April 15 meeting,
the parties went through the Union's written proposal of
January 22 point by point and Weise stated his understanding
of where the parties stood on each of the so-called language
items, omitting those demands which had been characterized
as economic in nature.
During the meeting Vitale discussed an article by a State
Jericho office had increased from 125 to over 200 per year,
although bodily injury adjusters were not required to handle
miscellaneous and homeowners claims which had not been
the case in 1964. Bender claimed that if only bodily injury
claims were considered, productivity had increased more
than 60 percent in the last 5 years. Bender argued that this
rise in productivity justified a substantial wage increase for
the adjusters.
Bender testified that when he reminded the Company it
had promised to present an economic package Weise replied
it would be available at the next meeting. The Union asked
if the Company had any proposals to make on sick leave,
vacations, severance pay, insurance, wage rates, and other
economic issues . Bender claimed that the Company replied
that these would be presented the next day.
Bender denied that State Farm presented information of
any sort on economic issues at the April 15 meeting. Weise,
on the other hand, testified that at that session he distributed
I1 booklets explaining various company benefit programs,
asked the Union to study these, and said the Company would
spend the entire next day "explaining and exploring [it's]
wage and benefit policies." Weise denied saying that the
Company would present an economic proposal the following
day or having said anything to that effect.
i. Meeting of April 16
The major part of the April 16 meeting was taken up with
a lecture by Ernest Hoffman, State Farm's assistant vice
president for personnel, explaining the Company's wage
policy for adjusters, the cost-of-living and area differential
adjustments, and the Company's promotional policy for in-
creasing an adjuster from one classification to another on the
basis of his work and length of service.' In addition, Hoffman
made himself available to answer any questions the union
representatives might have concerning the Company's exist-
ing benefit programs.
In the course of his discourse Hoffman presented data
showing salaries paid by other casualty insurance companies
in the New York area.
Bender testified that following Hoffman's presentation he
asked Hoffman and Weise in turn if the Company had any
wage proposals to present to the Union and that each replied
the Company had no such offer to make. A discussion ensued
in which Bender stated that "the Company's proposal was
incredible" and that if the Company were prepared to bargain
in good faith it should demonstrate this intent "by changing
just a comma or a word" in its existing printed programs to
meet the Union's demands. Weise replied that the Respond-
ent was not under an obligation to change anything just
because the Union wanted it to do so. Bender accused the
Company of bargaining in bad faith, listing the various areas
on which it had refused to accede to union demands, includ-
ing the lack of an offer on money, refusal of arbitration of
grievances, failure to accede to the Union's request that
layoffs be in inverse order of seniority, and failure to offer
improvements in the fringe benefit area. Bender stated that
there were only two items on which the Company had made
a substantial proposal, one being the recognition clause
wherein he claimed they were giving nothing they were not
required to do by law and that the other was on the arbitra-
tion of discharges and that even as to discharges the Com-
pany would not go along with written warnings and a shorter
probationary period as the Union has requested. Weise re-
Farm official on the subject of productivity of bodily injury ' Bender claimed that it was at this meeting that the Company presented
adjusters. Vitale also presented his own statistics showing a copy of its salary structure entitled "Field Claims, Basic Salary Structure
that the number of settlements per adjuster in the Company's II." See fn. 6, supra.
STATE FARM MUTUAL AUTO INSURANCE CO. 879
plied that merely because the Company did not give the
Union what it wanted this was no indication that Respondent
was not bargaining in good faith . Bender asked the Company
to reconsider its position and make some real offers on the
various substantial issues on which they were apart. He
claimed to have offered to meet with the Company continu-
ously, the next day , the following Monday , or at any time
State Farm desired.
Weise testified that after Hoffman had finished his presen-
tation Bender asked that they turn to the Union 's economic
proposals for discussion . As to the Union 's request for sever-
ance pay Weise asked what the Union really had in mind.
Weise asked whether an employee fired for stealing from the
Company should be eligible for severance pay and the Union
replied that he should . Weise then asked how the union
negotiators could explain severance pay to a laid -off employee
who might be recalled, noting that this would be a rather
unusual severance pay plan.
As to vacations , leaves of absence , and holidays , Weise said
the Union 's proposals were out of line and that the Union's
wage proposal was not at all realistic . Weise advised the
Union that when it sought-to justify its large wage demand
it should consider three points. First , State Farm adjusters
were the highest paid adjusters in the New York area. Sec-
ond, State Farm 's New York adjusters were the highest paid
of any of the Company 's adjusters . Third , bargaining unit
employees had received increases averaging roughly 26 per-
cent in the prior year.
Weise testified that the salary and benefit programs had
been presented and discussed for the purpose of supplying the
Union with information and had not been presented as an
economic offer.
Hoffman agreed that no salary or economic offers were
made to the Union on April 16, explaining that his presenta-
tion was an explanation not a salary offer.
j. Meeting of April 30
Hoffman gave another lecture on the Company's salary
structure , illustrating wages in the four field claims represent-
atives classifications.
Hoffman supplied information on the number of retired
adjusters in response to a request made by Vitale at the
preceding meeting . These figures disclosed that there were no
retired adjusters in the Company 's northeastern region, in-
cluding the bargaining unit . In the entire United States there
were 13 retired adjusters.
The Company answered Vitale's claim of increased ad-
juster productivity explaining that there was no real increase
in the quantity of work performed because changes in com-
pany procedures had eased their work burdens.
Part of the meeting was consumed with a discussion of
wages paid to other types of professionals . Bender claimed
that bargaining unit salaries suffered in comparison and that
professionals in every other field had received salary in-
creases.
Bender testified that he discussed each economic issue in-
volved in the negotiations and noted the Company 's failure
to respond to any or all of the Union 's demands. Weise tes-
tified that Bender stated no progress was being made and
that , although the Union did not relish doing so, the parties
were heading for a confrontation ; the Union would be forced
to take the dispute to the public and to exert economic pres-
sure . Bender denied threatening the Company . However, he
said , something had to be done to get the negotiations mov-
ing. Bender claimed that the Company had given the Union
nothing , listing a variety of items still on the bargaining table.
Weise replied that the Company had made substantial
proposals in the language area and that to "make the record
clear, the Company has not refused to discuss pensions or
insurance or holidays or anything else you want to discuss.
We have been willing to discuss them and are willing to
discuss them."
Weise testified that to that point in the negotiations the
Company had not made an economic proposal to the Union.
k. Meeting of May 14
Weise complained that a number of bargaining unit em-
ployees had refused to sign a conflict-of-interest form. Weise
stated that the form was required by insurance department
regulations and signing was a condition of employment.
Bender replied that he had told the Union's members not to
sign because the conflict -of-interest issue was on the table in
negotiations , the Company had not mentioned this form to
the Union, nor had State Farm bargained about it. Weise and
Bender gave conflicting versions of the colloquy which fol-
lowed. Bender testified that the Company insisted that the
form was required by law and the employees had to sign it
each year. Weise recalled having suggested that the issue be
resolved by his making clear that execution of this conflict-of-
interest form would have no bearing on the bargaining and
would in no way constitute a waiver of either party's position.
Employees Vitale and Joseph Reynolds asked questions
about the form to which the Company replied that it was
required by law. Bender testified that company house counsel
Gerald Reynolds stated it was required by the law of Illinois.'
According to Bender Weise stated that without any further
discussion he would submit the form to the unit employees
who had to sign as a condition of employment, adding that
any employee who refused to sign might be discharged.
Bender offered to discuss the Company's conflict-of-interest
proposal but Weise replied that it would have no bearing on
the issue, the form had to be signed by all employees in the
unit.
The Company then distributed drafts of proposed Term of
Agreement and Salary System and Benefit Plan contract
clauses.
State Farm called for a 3-year contract. The draft further
provided that should the Board approve the joint unit clarifi-
cation petition on the fire claims adjuster issue nothing fur-
ther would be required. If, however, the petition was denied
either party would have the right to call for further bargain-
ing on the fire claims adjuster matter only. Bender wondered
why this proposal was being made since they were so far
apart.
Respondent's "Salary System and Benefit Plan" was a
three-part proposal. The first two sections provided that for
the term of the contract the Company would continue its
basic salary system, including the progressions and promo-
tions, cost-of-living and area differential programs, and
named benefit programs. The third section, entitled "Ad-
ministration," endowed the Company with the exclusive
right, with no right to the Union to grieve, to administer and
to determine all eligibility questions under the salary and
benefit programs.
Weise testified that Bender asked a number of questions
addressed to the Union's right to grieve where the Company
was clearly violating the existing salary or benefit program.
Weise replied that the illustrations Bender had given were
clear violations and that the Company certainly did not mean
to block grievances in such cases. Weise acknowledged that
Bender's questions established that the Company's proposed
language did not make clear its purpose which was to prevent
grievenaces of a trivial nature. Weise told Bender that the
' The Company's home office is situated in Illinois.
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
issues he had raised about the administration clause required
the Company to take another look at its proposed language.
B. Gerald Reynolds, Respondent's house counsel, cor-
roborated Weise on this point. Reynolds recalled that after
Bender 's questions and Weise 's response thereto , Weise ac-
knowledged the validity of Bender's complaints and said it
was not the Company's intent to prevent grievances if it
violated policies it had guaranteed to continue. Weise said the
Company would work out language on the Union's right to
grieve in such cases and would submit it to the Union. Rey-
nolds added that Weise later repeated that the Union had
raised good questions about the proposed administration
clause and that the Company would give it another look and
get back to the Union on the matter. 10
Bender testified that he charged that the Company's
proposal was not a bona fide offer and did not represent
good-faith bargaining and asked if Weise had a wage
proposal. The Company then gave details of its New York
underwriting losses. Weise said the Company did not fault
the claims men for these losses but the Union had to take
these figures, as well as the favorable wages unit personnel
were paid, into account in seeking to justify its high economic
demands, including a 30-hour week. Bender rejected under-
writing losses as a basis for refusing a wage offer to the very
group responsible for keeping underwriting losses at a mini-
mum. There was further discussion of the productivity of
property damage adjusters.and Bender again asked the Com-
pany to make a wage offer.
Weise testified that Bender characterized the Company's
economic proposals and its entire proposed contract as insult-
ing. Bender claimed that the Company had offered nothing
to the Union other than handing out some cards and pam-
phlets. Bender noted that the Company had not agreed to any
important proposal in the language area. When Bender com-
plained about the Company's failure to agree to mandatory
arbitration, Weise replied that when the Company knew what
would be in the contract, including the definition of a griev-
ance, State Farm would reevaluate its position on mandatory
arbitration. Gerald Reynolds specifically corroborated Weise
on this point.
Weise and Bender agreed that the Union said it had no
choice but to take the matter before the Board and to advise
the public of the dispute. Bender offered to meet over the
weekend or on a continuous basis. However, the Company
said that it could not meet again until June 17 and 18 because
Weise was tied up with previously scheduled negotiations
concerning other employers and Gerald Reynolds was to be
married early in June.
The session ended with agreement to meet on June 17 and
18.
The Union filed its first charge in this case on June 9.
2. Analysis by Subject Matter
a. The unit-recognition
At the first bargaining session on January 22, the Union
claimed to represent a majority of State Farm's fire claims
representatives working out of the Company's Syosset office.
Bender stated that the Union did not wish to repeat the
extensive litigation that had been involved with securing
recognition for the automobile claims men. The Union off-
ered to prove its majority in any way the Company asked
other than going through Board and court procedures. State
Farm refused to recognize the Union for the fire claims repre-
sentatives because they had not been included in the certified
unit.
The Company's written counterproposal on unit coverage
presented on February 11 omitted from the unit the "suit"
men who had participated in the election and were part of the
certified unit." The Company explained that it had omitted
the suit men because they were now under supervision in
another area. It did not intend to bargain for the suit men.
The Union restated its demand to represent the fire claims
representatives and Weise repeated the Company's refusal to
recognize the Union for the fire claims men because they were
not in the original certified unit." The Union agreed to State
Farm's unit-recognition clause provided the fire claims and
suit representatives were included.
The parties' positions remained unchanged through the
meetings of February 12 and March 3 and 18.
On March 19 the Company agreed to recognize the Union
for the suit personnel, three in number, and proposed the
filing of a joint unit clarification petition to the Board to settle
the Union's claim to represent the fire claims adjusters.
At the meeting of April 15 Respondent presented a redraft
of its unit-recognition clause which provided for the unit
clarification petition as to the fire claims representatives and
included the suit personnel in the unit.
b. Union security and checkoff
The Union's initial demands called for a union shop and
mandatory checkoff of union dues. The form set forth in those
demands contained a provision that the checkoff could be
revoked "not more than twenty (20) and not less than ten (10)
days before [each] yearly anniversary date."
At the February 11 session Bender stated that for stability
in labor relations union security must be afforded to the
bargaining agent. Bender noted that the demand for a union
shop was "the optimum" but that the Union was willing to
bargain and discuss any other arrangement which would
guarantee stability of union membership. The Company re-
plied that it was opposed to compulsory union membership
or payment of dues and that it believed the Union could exist
on the basis of voluntary association. Weise stated that State
Farm might consider a checkoff if it were revocable at any
time. Weise explained that compulsion of any sort was not
acceptable, noting that even as to those company benefit pro-
grams for which State Farm paid the entire cost each em-
ployee had the right to voluntarily elect coverage.
Bender testified that at the March 4 meeting Weise stated
the Company would consider a revocable checkoff if the
Union would drop its demand for union security, but that
State Farm would not accept a requirement that employees
must join the Union or pay dues to it.
On March 18 Bender reiterated the Union's position that
union security was important to guarantee stability in rela-
tionships, adding that unless the Company made concessions
guaranteeing stability to the Union it would be difficult to
establish a harmonious relationship. Weise testified that State
Farm modified its position offering to include in the contract
a prohibition against discrimination for union activity, as well
as granting a revocable checkoff if the Union would drop its
10 B. Gerald Reynolds was an impressive witness whom I credit in all
respects . Accordingly, I find that the Company was not insisting on the
exclusive right to adminster the salary and benefit program as the first draft
of its language on that subject would indicate. Rather, I find that at the May
14 meeting the Company clearly stated its intent to revise and resubmit this
section.
" "Suit" personnel are adjusters who prepare the documents and
material necessary for court action on claims which have not been settled
short of litigation. At the time of negotiations they were all assigned to the
Syosset office.
" The fire claims representatives had not voted in the election.
STATE FARM MUTUAL AUTO INSURANCE CO. 881
demands for compulsory union membership and irrevocable
checkoff. This was rejected by the Union.
At the April 15 meeting the Company presented a draft
proposal for a checkoff authorization revocable at will. This
offer was rejected by the Union, Bender stating that the law
provided a manner in which a checkoff could be revoked and
that the Company's proposal was an indication of its unwill-
ingness to grant stability to the Union. The parties restated
their positions on union security and involuntary member-
ship.
Weise testified that in a conversation Bender indicated the
Union would accept a lesser form of union security other than
the union shop if it would accomplish the same ends that the
Union sought; to wit, a requirement that all pay money to the
Union.
Bender testified that during the course of negotiations he
discussed a number of alternatives to the union shop, indicat-
ing the Union was willing to discuss less than the union shop
if the Company would offer an agency shop or even mainte-
nance of membership. However, Bender stated, the Union
could not bargain with itself. Bender testified that the merits
of a maintainance-of-membership provision were never dis-
cussed. Further, Bender testified, at the last three bargaining
sessions he stated for a first contract the Union would modify
its demands for a union shop and accept a lesser provision.
The Company remained adamant in its opposition to any
form of union security.
c. Workweek
The Union's workweek proposal read:
The work week shall consist of thirty (30) hours per
week, Monday through Friday. Anytime worked in ex-
cess of thirty (30) hours per week, or work performed on
Saturday, Sunday or holidays, shall be compensated at
overtime rates. The overtime rate shall be one and one-
half (1'z times the regular rate of pay.
This proposal was first discussed on February 11. Bender
explained that the Union had spent more time preparing this
demand than other contract proposals it had submitted.
Bender "indicated" the Union was prepared to bargain on
this issue. The Union's demand spelled out a workweek
rather than a workday, because claims adjusting might re-
quire a man to work 12 hours one day and 4 hours the next.
Therefore, the Union was not asking for premium pay for
work beyond 8 hours in 1 day. Bender explained they had
considered asking for limitations on the workload but decided
that this concept was too intangible because one case assign-
ment might involve an accident with 12 injured persons and
another might involve 1 individual with a sprained thumb.
Accordingly, these two cases could not constitute equal
workloads. Therefore, the Union had come to the conclusion
that the logical method for establishing the appropriate work-
load was through the means of a workweek. The men were
then working in excess of 40 hours per week and the Union
proposed reducing the workweek to 30 hours. In addition, the
Union asked for premium pay for Saturdays, Sundays, and
holidays. The Company replied that the men had been hired
with the understanding they would work on Saturday and
would be available for Sunday and holiday work as well. The
Union replied that it had no objection to the men working on
weekends and holidays if they received premium pay for
those days.
Patrick Vitale, an employee-member of the Union's nego-
tiating committee, stated that, because of frequent changes in
management personnel, rules were imposed making it very
difficult for the adjusters to complete their work during a
40-hour period. Weise replied that Vitale was rehashing old
grievances and if the parties were to reach agreement they
would have to have faith in each other and not bring up and
discuss old grievances . Bender countered with the statement
that the Company as well as the Union would have to demon-
strate good faith. The Union was prepared to let bygones be
bygones but State Farm would have to show its good faith in
view of the 3 years of litigation during which the Company
had refused to bargain . Bender asked for some palpable
demonstration of good faith on the Company's part.
Weise testified that the Company had posed a number of
questions concerning the workweek proposal , stating that
there were problems in this area. First, Weise noted there
would be a problem defining worktime. Second, he explained
that if a fixed workweek were established, employees would
have to report to work leading to considerable paperwork for
both the employees and State Farm. Finally, Weise pointed
out that there would be questions of control, the Company
would have to check on the employees and this could lead to
discipline problems. Bender replied that he understood these
problems. Weise asked the Union to consider the points he
had raised, as well as the question of whether time worked
was a proper measuring device for bargaining unit employees.
At the March 4 meeting the Union again explained the
workweek proposal as a means of limiting the workload and
time adjusters were required to work. Bender urged the Com-
pany to meet the Union part way on this matter. The Com-
pany opposed any limitation on the number of hours required
and stated that Saturday work was required on a rotational
basis. The Union, according to Bender, asked if it could at
least obtain premium pay for Sunday and holiday work as a
deterrent to the assignment of work on those days and to
compensate the employees for the disruption of their private
lives. After Bender agreed that the Union's proposal called
for a 25-percent reduction in the hours of work, Weise stated
that this would force the Company either to hire more field
claims representatives , use independent adjustments to a
greater extent or utilize its clerical and supervisory personnel
to perform field work. Weise testified that the Union stated
it was not opposed to the employees performing more work
or to their working on holidays and weekends provided that
they received premium pay for those days.
There was discussion at the March 4 meeting of the use of
company cars by the employees if the workweek were limited
pursuant to the Union's proposal. Respondent explained that
cars were made available to the adjusters as a tool since they
were required to adjust claims on weekends. Accordingly, if
the workweek was limited to Monday through Friday there
would be no need for the field men to have company cars at
home over the weekend. Weise testified that Vitale replied
that the availability of a company car in the New York area
was not that desirable.
The parties retained their previously stated positions dur-
ing a discussion of the workweek proposal at the April 15
meeting, the Company refusing to provide premium pay for
weekend or holiday work, explaining that the job required the
men work on those days as required or on a rotational basis.
d. Discharge and probationary period
The Union's discharge proposal contemplated that em-
ployees would be discharged only for "just cause" and that
the Company would give at least one warning notice to the
employee, citing the specific complaint, prior to discharge.
Finally, the Union's proposal required mandatory arbitration
of all disputed discharge cases.
The discharge proposal was first discussed on February 11.
The Union agreed there would be no requirement of a prior
warning in cases of flagrant misconduct. Bender claimed that
the Company stated it would always give warnings to em-
ployees of long service prior to discharge if their work was not
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
up to par or if their attendance record was poor, but that it
did not want such a provision in the contract. Weise testified
that State Farm agreed to the concept of discharge for just
cause . The Company said it would submit its own proposal
on the subject of discharges.
The Company's proposed discharge clause, presented the
following day, February 12, contemplated that discharge
would be for just cause only, but that employees classified as
"trainee" could be discharged at the Company's sole discre-
tion with no right to file a grievance over such a discharge.
Grievances concerning discharges would be filed at the third
step of the grievance procedure at which time the discharged
employee would be required to sign and submit a "consent
form.""
A discussion followed concerning the length of probation-
ary periods for new employees. The Union complained about
the Company's failure to define the length of the probationary
period. The Company's representatives noted that the sched-
uling of the two school sessions new employees were required
to attend precluded a short probationary period and that the
training time could run for 4 to 9 months. Bender asked that
the Company suggest a definite probationary period. The
Union summarized its objections to the Company's discharge
proposals as follows:
1. No fixed training period.
2. The proposal failed to include provision for a warning
to employees prior to discharge.
3. The Union had to wait to see the proposed consent
waiver form. Weise testified that Bender stated the Union had
no fixed objection at that point to a consent waiver require-
ment but that it had to see the actual proposal.
4. The Union wanted the complete right to arbitrate all
discharge cases.
Weise testified that at no point in the negotiations did the
parties reach agreement that the Company would give warn-
ings to employees concerning disciplinary procedures and
that State Farm refused throughout to put a warning provi-
sion in the contract.
At the March 3 meeting the parties reiterated their posi-
tions on the requirement of a' warning prior to discharge.
Weise stated that he would try to furnish a specific probation-
ary period provision at the next meeting.
On March 4 Bender said the Company's proposed dis-
charge provision would be acceptable provided there was
added thereto a requirement that warnings be furnished prior
to discharge and that the Company drop its suggested con-
sent waiver requirement.
On March 18 Weise promised to supply a further proposal
on discharges the following day, March 19. The discussion on
March 18 again centered on the question of a required warn-
ing. Bender claimed that Weise again stated that as a matter
of course the Company would give warnings to employees,
especially those of long service, except in cases of misconduct.
The Union's negotiator claimed that he asked that this be put
into the contract but that the Company refused to do so.
At the March 19 meeting Weise stated that State Farm had
reexamined the entire area of discharges, was changing its
position in certain particulars, and made the following four-
point proposal:
1. The Company agreed to limit the probationary period to
9 months. If an employee completed his training in less than
9 months he would.assume the status of regular employee. If
the training period was not completed in the 9-month period
the trainee would become a regular employee in any event
and could not be discharged except for just cause.
" See discussion of the Company's proposed "consent waiver," infra.
2. The Company suggested that the Union drop its demand
for a warning provision, noting that in previous discussions
the Union had generally agreed the Company had done a
pretty fair job in warning employees. Weise observed that the
just cause concept gave the Union the protection it'needed
and that it was too difficult to define which violations did or
did not require warning prior to discharge.
3. The Company agreed that discharge cases could be arbi-
trated as a matter of right.
4. The Company agreed to drop its proposal for the consent
waiver.
The Union objected to a 9-month probationary period as
being too long.
Weise testified that after the Company submitted its four-
point proposal Bender replied "although we don't like your
proposal as it relates to the warning clause, and though we'd
still like to have it in there, it's a possibility the'Union can live
without that."
The final discussion of discharges and probationary period
occurred at the bargaining session on April 15. Bender tes-
tified that at that time the Union noted omission of a warning
provision from the Company's draft setting 'forth its four-
point proposal made on March 19 and reiterated its position
that a 9-month training period was too long. 'Weise restated
the Company's belief that there was no need for a warning
provision in the contract. Bender claimed that Weise again
stated that the Company would always give warnings to em-
ployees whose work was not up to par or whose attendance
was poor but did not want such provision in the contract.
At the close of the April 15 session, in recapitulating the
parties' positions on the discharge and probationary provi-
sion, Weise stated that the Company had substantially sat-
isfied the Union but there were loose ends remaining; includ-
ing the length of the probationary period which the Company
thought'the Union could accept.1°
e. Grievance procedures and shop stewards
Among its contract demands the Union proposed a four-
step grievance procedure, culminating in mandatory arbitra-
tion of all unsettled grievances. The Union defined a griev-
ance "to be any controversy, complaint , misunderstanding or
dispute.
On February 11 the Company agreed that a grievance
procedure was required. However, Respondent said the
Union's proposal could be improved upon and State Farm
would present a counterproposal the following day.
The Company's proposed grievance procedure submitted
on February 12 defined a grievance as:
... solely a difference of opinion between an employee
and the company with respect to the meaning or applica-
tion of the expressed terms of this agreement.
16 A credibility issue arises between Bender's testimony that the Com-
pany stated it would continue to give warnings to the employees as it had
in the past but would not incorporate such a provision in the contract despite
the Union's request that it do so and Weise's denials. The submissions by
the Company on the discharge question establish its refusal to put such a
provision in the contract. However, Weise testified that the parties never
reached agreement in the negotiations as to when the Company would give
warnings to employees He did agree that the Company refused to put a
warning provision in the contract. I conclude that while the question of
warnings was a major issue and that the parties were far apart on inclusion
of such a provision in the contract, the Company's main thrust in opposing
such a provision was consistent with its denial that there had been agree-
ment that warnings would be given, apart from the issue of including such
a requirement in the contract. Accordingly, I do not credit Bender's claim
that State Farm had agreed to give warnings prior to discharge but had
refused to incorporate language to that effect in the contract
STATE FARM MUTUAL AUTO INSURANCE CO. 883
The Company also proposed a four -step grievance proce-
dure . However , the final stage , that of arbitration , provided
that if the Company was agreeable to arbitrate a particular
grievance the matter would go to final and binding aribitra-
tion . Should the Company be unwilling to arbitrate a griev-
ance then the Union would have the right to strike to enforce
its claim.
The Company suggested one union shop steward to be
selected from the bargaining unit employees . The Union re-
plied that three shop stewards were needed , one for each
location at which unit employees were employed.
The Union objected to the limited definition of a grievance
proposed by the Company and Bender argued that the time
periods proposed for the processing of grievances were not
long enough . Additionally, the Union asked that specific time
limits be imposed upon company representatives at each stage
in the grievance procedure within which they would be re-
quired to reply to grievances.
At the March 3 session the parties agreed to longer time
periods for the steps of the grievance procedure and agreed
upon time periods within which the various company repre-
sentatives were to act upon grievances . Weise stated that
State Farm believed that its proposed definition of a grievance
was a correct one and , he testified , Bender admitted that the
Company 's definition was more typical but that the Union
preferred its own definition.
On March 3 the Company agreed that the Union could
have three stewards rather than one.
The Company presented a redraft of its proposed grievance
procedure on March 4 , including the agreement upon the
number of shop stewards and the time periods to be utilized
in processing grievances . There was no agreement upon the
definition of a grievance . Bender testified that aside from the
problem of defining a . grievance the parties were in agreement
on the grievance procedure short of arbitration.
The question of the definition of a grievance was discussed
again at the April 15 meeting but defied resolution.
The record does not disclose any discussion of the open
questions on the grievance procedure, other than arbitration,
on any date subsequent to April 15.
f. Consent waiver
At the February 11 bargaining session Weise proposed a
consent waiver form to be signed by employees before the
third -step processing of their grievance . Weise explained that
execution of this form by the grieving employee would pro-
tect both the Company and the Union from a lawsuit in the
event the employee was dissatisfied with the resolution of his
complaint.
Bender challenged the legality of such a provision and
asked if did not deprive a man of his constitutional rights.
Weise replied that if an employee voluntarily executed the
form he would not be so deprived.
The Company presented its proposed consent waiver form,
entitled "Authorization to Discuss Grievances " to the Union
at the March 3 meeting . The first paragraph of the form states
that the employee signing has requested and authorized the
Union to act on his behalf in discussing the grievance. The
form goes on to state:
Whereas the said Union has agreed to so act in my
behalf;
Now therefore , I agree that any and all matters dis-
cussed by and between the Company and the Union shall
be absolutely privileged . Furthermore , I specifically
agree that both the Company and the Union in discuss-
ing this matter are doing so at my express request and
with my express permission and shall be free of all liabil-
ity whatsoever arising from such discussion, or as a
consequence thereof.
Bender said the Union was opposed to the consent waiver
form and would not accept it either for grievances or dis-
charges. Weise recalled that after reading the document
Bender said it was worse than he thought it was going to be.
Weise repeated previous statements that he thought the
Union should give consideration to the form as he thought it
had some advantages.
The parties restated their position on the consent waiver at
the meeting of March 18 . On March 19 the Company with-
drew its proposal for the consent waiver form.
g. Arbitration
Arbitration was first discussed at the bargaining session on
February 11. Bender testified that State Farm expressed seri-
ous reservations on arbitration and stated that it would go
into this in greater detail at the next meeting . The Company
was reluctant to have a third party settle an issue concerning
the working conditions for 30 adjusters that might have effect
on those of the 3 ,000 adjusters State Farm employed through-
out the country . Bender replied that while he could under-
stand the Company 's reluctance on this subject the Union did
not intend to permit a policy adopted for the Company's
3,000 adjusters to substitute for collective bargaining for the
30 men the Union represented . Weise testified that Bender
commented there was a method in certain Teamsters con-
tracts giving the Union the right to strike if a grievance was
not arbitrated.
On February 12 the Company proposed that arbitration of
a dispute would be at the discretion of the Company or the
Union. If the matter went to arbitration the decision would
be final and binding . However, if "arbitration is not availa-
ble" the Union could enforce its position by a strike. Weise
noted that this was a method Bender had stated the previous
day was provided in certain Teamsters contracts . The Union
opposed the Company 's proposal for voluntary arbitration,
Bender stating that without mandatory arbitration there was
no incentive to reach an agreement and the grievance proce-
dure would be meaningless . The Union objected to the
proposal that awards be retroactive only to the date on which
the grievance was filed and to a requirement that it share the
cost of the transcript as well as the arbitrator's fee.
Arbitration was again discussed at the meetings of March
3 and 4 with the parties restating positions previously ex-
pressed.
The Company distributed its proposal calling for manda-
tory arbitration of discharge grievances on April 15. Bender
replied that while this proposal was still lacking in certain
respects to which the Union objected "it was the first real
proposal of any substance that the Company had made to the
Union ." The Union stayed with its position that all griev-
ances, not only those arising in discharge cases, should be
subject to mandatory arbitration.
Weise testified that at the April 15 meeting he stated that
when the Company was in the position to see the entire
contract it would take another look at the question of arbitra-
tion.
On April 30 Bender again expressed the Union's unhappi-
ness over the Respondent 's unwillingness to agree to manda-
tory arbitration of all grievances.
When Bender , on May 14, again complained that the Com-
pany had not agreed to mandatory arbitration , Weise replied
that when State Farm knew what would be in the contract
and when the definition of a grievance had been agreed upon
the Company would reevaluate its position on arbitration. B.
Gerald Reynolds, the Company 's house counsel, cor-
roborated Weise , testifying that the latter had stated the
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
scope of the arbitration provision could conceivably be broad-
ened if and when the parties came to a mutual definition of
a grievance.
I found Gerald Reynolds to be a totally credible witness.
Accordingly, I find that, at the point where negotiations were
broken off following the meeting of May 14 and filing of the
Union's first charge, the Company had stated unequivocally
that its mind was not closed to the possibility of broadening
the arbitration provision and that its final answer on this
question could not be framed until all terms of the contract
had been agreed upon and the parties had resolved the defini-
tion of a grievance.
h. No-discrimination
The Union's 25 contract demands contained a section enti-
tled "Discrimination," reading:
There shall be no discrimination against any employee
because of age, sex, color, nationality or creed, or activi-
ties in behalf of the union.
This proposal was first discussed on February 11. State
Farm took the position that the subject was covered by law
and questioned whether the Union really needed to have it in
the contract. Bender replied that with a contract provision
the Union would have the right to grieve over alleged cases
of discrimination and that the resort to the grievance proce-
dure was frequently a better and less burdensome manner to
resolve disputes.
At the meeting of March 4 the Company counterproposed
a ban against discrimination by either the Company or Union
because of race, creed, color, sex, or national origin. The
Union noted the omission of union activity and age. As to the
omission of "age" Weise replied that in cases of alleged dis-
crimination because of age there were many governmental
agencies to which the complaint could be taken. He noted
that reference to discrimination for union activity was tied to
the Union's demand for a revocable checkoff and a union
shop and offered to include such a prohibition if the Union
dropped those demands.
Bender testified that on March 18 the Company repeated
its offer to include a ban on discrimination for union activity
if the Union would drop its union-security demands. The
Union repeated its arguments that the age issue was impor-
tant to it because many unit employees were over 40 years of
age and felt this protection was needed. The Company op-
posed including age among the matters in the no-discrimina-
tion clause because it might discriminate against the very
young and the very old. Weise again said that the age issue
was not a problem for the Union because it was covered by
law. The Union insisted that the age question was a critical
item to it.
At the meeting of April 15 State Farm submitted a new
no-discrimination proposal adding a provision reading, "The
company agrees to comply with applicable federal laws and
New York state laws on age discrimination." Weise testified
that he told the Union that while this reference to age was not
exactly what the Union had asked for he believed that it could
accept the Company's proposal.
Bender testified that he had stated that the Company's
April 15 proposal omitted reference to no discrimination be-
cause of age and that "Mr. Weise stated the company would
not agree to put in a no discrimination clause because of age."
I conclude that, except for a ban on discrimination because
of union activity which was tied directly to the unresolved
issue of union securty and involuntary checkoff, the Com-
pany agreed to all that the Union had asked in the area of
discrimination, including the right to grieve over alleged dis-
crimination against employees because of age.
i. Wages, promotional policy, and fringe benefit programs
On January 22 the Union asked for a wage scale based on
length of service with a starting rate of $200 per week going
up each 6 months in $25 segments to a top of $350 per week
after 3 years of service.
According to Bender the first discussion of the Company's
wage and promotional policies took place on February 11.
Bender claimed that Weise stated the Company would
present its wage and promotional policy within a reasonably
short period of time and that those policies left no room for
a bargaining agent to participate because the unit employees
were not factory workers, did not puncha timeclock, and
were skilled professionals exercising a great deal of discre-
tionary authority who received promotions and merit in-
creases on the basis of intangibles. Bender pointed to many
contracts for professionals with a great deal of discretionary
authority, such as radio and television directors, engineers,
teachers, and the like, in which wage increase and promo-
tional procedures were spelled out. The Union said that de-
spite its many meetings with the employees there was consid-
erable confusion and no clear understanding of State Farm's
promotional and merit increase policies.
Weise testified that in going over the Union's 25 contract
demands on-February I 1 he had stated that the wage rate
proposals were an economic matter and State Farm was not
prepared to respond to such items at that time. Weise denied
ever making a statement that the Company's wage and pro-
motional policies left no room for union participation."
Bender testified that at the February 11 bargaining session
he asked for a list of salaries being paid employees in the
bargaining unit and for the Company's policy in writing, if
possible, with respect to salary increases, promotions, other
economic changes, cost-of-living increases and differentials.
He claimed that Weise replied State Farm' would consider
this request and advise the Union at an,early meeting if the
information was available. Weise denied that Bender asked
specifically for the salaries paid to each employee in the bar-
gaining unit. However, he testified that Bender said "that he
would like salary figures on bargaining unit personnel, and I
stated, we'll check into that for you." At no point in the
negotiations did the Company supply actual salary figures for
the bargaining unit personnel. The Company consistently
denied that the Union had requested that information. How-
ever, I find that Weise's testimony quoted above substantially
corroborates Bender's claim that the Union requested this
information. Accordingly, I find that the Company failed to
supply information which it was obligated' by the statute to
provide to the bargaining representative of its- employees.
Bender testified that at the February 12 meeting he asked
State Farm to submit a complete package in writing of all of
its counterproposals, including those on economic issues, ex-
plaining that the parties had spent considerable time at each
1' I do not credit Bender's testimony that the exchange concerning the
Company's wage and promotional policy took place at the February 11
meeting or that Weise said those policies left no room for union participa-
tion For the Company to have promised at that stage that it would shortly
present its policy on these matters was totally inconsistent with its approach
to bargaining The Company throughout the first stages of negotiations was
insistent that economic matters be deferred until disposition of the issues
which it characterized as noneconomic Until a number of meetings had
been held the Union concurred with this approach Both Bender and Weise
testified at length without recourse to any notes In crediting or discrediting
one or the other as to specific exchanges which took place in the sessions,
I do so not on the basis of preferring the individual 's credibility but rather
upon the probabilities within the context of the negotiations I do note
however that on a number of occasions Bender 's testimony would seem to
be inaccurate as to the timing of exchanges or the positions which parties
took within the general context of the negotiations See fn. 6, supra.
STATE FARM MUTUAL AUTO INSURANCE CO. 885
meeting going over the same provisions and that submission
of a complete package would speed up negotiations. Weise
denied that Bender asked for a complete package at the Feb-
ruary 12 meeting."
The Company presented a copy of its "Field Claims, Basic
Salary Structure II" at the meeting of March 3." This docu-
ment shows the job classifications and base salary range for
each of the four field claims grades. Weise explained that the
cost-of-living and the area differential allowances were added
to the base salary to obtain the current compensation for each
of the steps shown in the base salary structure. Bender tes-
tified that Weise stated that the Company would not present
a total package but would discuss each issue separately as it
arose, acknowledging that this procedure might take a little
longer but it was the one the Company preferred. Weise
testified that there was some discussion concerning applica-
tion of the base salary structure to employees Vitale and
Joseph Reynolds.
Weise testified that Bender requested a total economic
package at the meeting of March 18. Bender said the men
were unhappy with the slow progress of the negotiations.
Weise replied that in his opinion they were making progress,
reaching agreement on certain sections including items of
substance. He explained that frequently agreement on one
provision depended upon whether or not the parties could
agree on another section. Weise claimed that Bender replied
that he did not mean to imply the Company was not agreeing
to items of substance, and that the Union did agree that
progress was being made but thought that it was a little slow.
Bender testified that on March 19 he noted there had been
seven meetings with no agreement having been reached on
any major item. The Union said it thought it was entitled to
receive a complete package, noting that on a number of occa-
sions there had been promises that the Company's economic
proposals would be forthcoming but that none had been re-
ceived. Weise replied, according to Bender, that the Union
would receive the Company's economic proposals and that he
would try to answer the Union on all matters at the next
meeting. Weise recalled promising a complete proposal on
language items at the next session and that Bender replied
this procedure was satisfactory.
Bender testified that a similar exchange took place at the
meeting of April 15 when Weise reported that he did not have
the economic package available but would present it the next
day. Bender claimed that the Company presented no infor-
mation of any sort at the April 15 session. Weise testified that
on April 15 the Company distributed 11 booklets setting
forth its benefit programs and that he asked the union com-
mittee to study these booklets overnight and that the Com-
pany would devote the entire session the following day to
explaining and exploring its wage and benefit policies. Bender
is reported to have replied, "you are certainly giving us a lot
of homework." However, Weise denied saying that the Com-
pany would present economic proposals the following day.
At the April 16 meeting Ernest Hoffman, State Farm's
assistant vice president for personnel, delivered a lecture set-
ting forth the Company's wage policy for adjusters, describ-
ing the cost-of-living and area differential adjustments and
the promotional increase policy followed for moving an ad-
juster from one classification to another on the basis of his
work and length of service. Hoffman discussed the results of
" I conclude that Bender's testimony on this point is another instance of
his misstating the time in the negotiations when an exchange between the
parties took place. The February 12 meeting was the third bargaining session
and I find it inconsistent with the progress of the bargaining for the Union
to have made such a request at this meeting.
" See fn. 6, supra.
a survey State Farm had conducted among six other insur-
ance companies to determine salaries paid to claims repre-
sentatives in the New York area. Hoffman noted that from
1968 to April 16 the average unit employee had received
increases totaling approximately 39 percent which broke
down to 15 percent from the cost-of-living allowance, 14
percent resulting from application of the area differential, and
an approximate 10-percent increase through merit and pro-
motional raises.
Bender asked Hoffman if the Company had any wage
proposals to present. Hoffman replied that State Farm had no
wage offer to make, that its wages were the best in the indus-
try, that there had been substantial increases lately, and that
there was no basis for any wage change at the present time.
Bender then asked Weise if he had any offers on any eco-
nomic matters. Weise replied that the Company had no wage
offer to make. It was at this point, Bender testified, that Weise
distributed the series of printed cards and booklets explaining
the Company's benefit programs, saying that these were the
Company's answer to the Union's economic proposals.
Bender replied that Weise must be joking, a printed card is
not a substitute for bargaining. Weise responded that the
Company felt that its fringe benefit programs were the best
available in the insurance industry and that State Farm was
under no obligation to change its programs merely because
the Union requested that it do so. Bender said that presenting
the Union with a printed card was not bargaining. Bender
noted that the parties had discussed the Union's economic
proposals at length and that if State Farm was going to bar-
gain it should demonstrate its "good faith by changing just
a comma or a word" to meet the requirements of the Union's
proposals. Weise replied that State Farm was under no obliga-
tion to change anything just because the Union wanted it to
do so. Bender accused the Company of refusal to bargain in
good faith, noting the various areas in which it had made no
offers or had failed to agree to union proposals. Bender said
there were only two items on which the Company had made
a substantial proposal, one in the area of recognition where,
he claimed, State Farm was giving nothing it was not required
by law to give and that the other was on the matter of arbitra-
tion of discharges and that even in that area the Company
would not go along with the Union's request for warnings to
the employees and the length of the probationary period.
Bender claimed that the Company had refused to bargain on
every other item and had presented the Union with its estab-
lished policy in the place of bargaining. Weise responded that
merely because the Company did not give the Union what it
wanted this was no indication that it was not bargaining in
good faith. Bender again asked the Company to change one
of its printed cards or to change one word of a printed card
to meet the Union's demands. Weise repeated that he was
under no obligation to change a thing. Bender then asked the
Company to reconsider its position and to make some real
offers on money, layoffs, union security, and fringe benefits.
He offered to meet with the Company at any time stating that
the bargaining to date had been in bad faith but that the
Company could correct this by making a genuine offer. The
Union offered to meet continuously, to meet the next day, on
Monday, or at any time the Company desired."
Weise testified that following Hoffman's explanation of the
Company's existing economic policies Bender had asked that
the parties go through the Union's economic demands. Weise
commented that the Union's wage demands were not at all
realistic. He asked that in seeking to justify their demands the
Union address itself to the following factors:
18 The foregoing account of the colloquy on April 16 is based upon
Bender's testimony alone.
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1. State Farm adjusters were the highest paid adjusters in
the New York area.
2. State Farm's New York adjusters were the highest paid
of any of the Company's adjusters.
3. Bargaining unit employees had received increases ave-
raging roughly 26 percent in the preceding year.
Weise agreed that Bender had claimed the Company's con-
duct was incredible, that the Company had not agreed to
anything, and that the Union did not believe the Company
was bargaining in good faith. Weise replied that on certain
language items the Company had made many proposals of
substance and that State Farm had changed its position in
many particulars to meet the Union's demands. As to items
where the Company had not agreed to the Union's proposals
it had tried to convince the Union that it did not need those
proposals or that the Company had good reason for not
agreeing to the Union's demands.
Weise testified that the Company's presentation of its exist-
ing economic programs on April 16 did not constitute an
economic proposal to the Union. Rather, Weise testified, the
discussion had been an explanation by State Farm of its exist-
ing wage and fringe benefit programs and procedures and had
served as a forum to answer many union questions about the
operations of these plans.
On April 30 Hoffman amplified his explanation of the man-
ner in which the Company's field claims representatives sal-
ary structure operated. Additionally, Hoffman supplied in-
formation Vitale had requested at an earlier meeting
concerning the number of adjusters who had retired from
company employment. Bender testified that when Hoffman
concluded he asked Weise if the Company had any proposal
or wage offer to make and that Weise replied that State Farm
did not.
There was a discussion of increased productivity by adjust-
ers in the years preceding the negotiations. In the general
conversation Bender pointed to a recent wage offer to broad-
casting employees and noted that even though the wage im-
provement had been substantial the employees involved in
those negotiations had rejected the offer. Bender urged State
Farm to reconsider its position on a wage offer. Bender tes-
tified that Weise pointed to the Company's to reconsider its
position survey of other insurance companies in the area and
the fact that State Farm's wage rates were higher than those
of the other employers. Bender went over each economic
issue in the negotiations and noted the Company's failure to
respond to all of the Union's proposals. Weise's testimony
concerning the April 30 meeting in the main corroborates
that of Bender. Additionally, Weise testified, Bender claimed
that the bargaining was not making any progress. Although
the Union did not relish the eventuality, Bender said, it ap-
peared that the parties were heading for a confrontation and
that the Union would be forced to take the dispute to the
public and to exert economic pressure which would involve
things that State Farm would regret. Bender denied that he
was making these statements as a threat but said that some-
thing had to be done to get the negotiations going, claiming
that the Company,had given the Union nothing, listing the
union shop, arbitration of all grievances, seniority, and sub-
stantially all of the Union's proposals not agreed to by the
Company. Weise pointed to substantial progress in the lan-
guage area and stated that he wished to "make the record
clear, that the Company has not refused to discuss pensions
or insurance or holidays or anything else you want to discuss.
We have been willing to discuss them and are willing to
discuss them."
Weise denied that he or any member of State Farm's bar-
gaining team had characterized the Company's presentation
of April 30 the Company had not made an economic proposal
to the Union.
The Company presented a three-part economic proposal at
the May 14 meeting. The first two sections provided that
during the term of the contract the Company would continue
its existing basic salary and benefit programs together with
the cost-of-living and area differential adjustment programs.
The third section, entitled "Administration" provided:
It is understood that the Company continues to have
the exclusive right, without grievance, to administer and
determine all eligibility questions under (1) The Salary
System ... and (2) the benefit plans ...
Bender charged the Company with bargaining in bad faith,
said its proposal was not a bona fide offer and asked if Weise
had a wage proposal to make. The Company pointed to un-
derwriting losses it had suffered over a 5-year period in its
New York operations. Bender replied that underwriting
losses were not justification for refusing to make a wage offer
and noted that the very group responsible for keeping under-
writing losses at a minimum were the claims men. Bender
claimed the Company was not presenting a full picture of its
financial status, that it was not on the rocks or in serious
economic trouble and that a wage increase was justified by the
increased productivity of the adjusters. Vitale supplied addi-'
tional information on increased productivity, in this case that
of property damage adjusters. After Bender repeated his re-
quest that the Company make a wage offer, Weise replied that
because of underwriting losses State Farm could go no fur-
ther than guaranteeing the items in its proposal. During dis-
cussion of the administration clause Bender stated that deny-
ing the Union the right to grieve over the salary and benefit
programs was highly objectionable. According to Bender
Weise said the clause was important to the Company and that
it had no further proposals to make. Bender repeated his
charge that the Company was not bargaining in good faith
and claimed that State Farm was trying to obtain the contract
which it had just negotiated with the Insurance Workers
International Union for a different bargaining unit. Bender
told the Company that the Union would modify its position
on every one of its proposals provided the Company indicated
some flexibility in its position but that the Union could not
bargain with itself. Weise replied that the Company had no
other proposals to make. Bender then announced that the
Union had no choice but to go to the Board and to inform
the public of the dispute. Weise said he was not impressed by
Bender's threats.19
Bender testified that there was no agreement on modifica-
tion of the Company's proposed administration language.
Weise testified that when Bender raised questions concern-
ing the Union's right to grieve over obvious violations of the
Company's own field claims salary structure Weise replied
that Bender had raised a good question and that was not what
the Company meant by its "Administration" language. Weise
explained that the Company's intent in drafting and propos-
ing the administration provision had been to block grievances
over purely ministerial questions such as whether an em-
ployee applying for medical benefits had undergone a'surgical
operation or not. However, Weise explained that the Com-
pany did not intend to bar grievances, if, for example, it
canceled a holiday, which it obviously had no right to do.
Weise acknowledged that the language did not make clear the
Company's intent.
Weise testified that he supplied figures on the Company's
underwriting losses from its New York operations. He again
asked the Union to take into account the superior salaries
as an economic proposal. Weise stated unequivocally that as " This account of the May 14 discussion is based on Bender's testimony.
STATE FARM MUTUAL AUTO INSURANCE CO. 887
paid to State Farm 's adjusters as compared to those of adjust-
ers employed by other companies in New York and to the
salaries of State Farm 's own adjusters throughout the country
and the large increases which unit employees had received
over the last 2 years . To these Weise added a final factor;
namely , "the Company's losing its shirt in New York."
Weise stated that Bender declared that the Company's
economic proposal and the entire contract it was offering
were insulting to the Union and that the Union was faced
with the proposition of taking the problem to the public,
publicizing the dispute , and taking economic action.
However, Weise testified , the Union did not change its
position with respect to salaries.
During cross -examination Weise repeated that following
Bender's objections to the proposed administration language
he had acknowledged that Bender "may have raised some-
thing that maybe we better look at that administration lan-
guage a bit."
B. Gerald Reynolds , the Company's house counsel , credi-
bly testified that during the exchange about the administra-
tion section of the Company 's proposal Weise acknowledged
the validity of Bender 's eomplaints and said that it was not
the Company 's intent to deny the Union the right to grieve
over violations by the Company of its own salary and benefit
programs . Reynolds stated that Weise said that something
would have to be done about the proposed contract language
and that the Company would give its proposed administra-
tion language another look and come back to the Union on
the subject.
j. Management rights
At the March 4 meeting the Company proposed a manage-
ment rights clause reading as follows:
The Company retains the sole right and authority to
manage its business and direct the working forces, in-
cluding all rights and authorities which the Company
possessed prior to the execution of this Agreement,
whether exercised or not, except as stated to the contrary
by an express provision of this Agreement . Among the
rights retained , but not limited to these rights, is the
Company's right to hire ; to make work assignments and
transfer employees; to promote employees ; to schedule
working hours and to determine the length of the work
week ; to demote, discipline , suspend or discharge em-
ployees; to lay off employees due to lack of work, curtail-
ment of work or for other legitimate reasons; to establish
and enforce rules and regulations ; to plan , direct and
control the operations or services to be performed by the
Company or by employees of the Company; to use inde-
pendent adjusters ; to establish new methods , procedures,
equipment , facilities , or offices ; and to change or elimi-
nate existing methods, procedures , equipment , facilities
or office locations.
Weise explained that the clause was of extreme importance
to State Farm because it had no other union contract, dealt
with no other union and was "very jealous of their preroga-
tives." Bender replied that without knowing what would be
in the balance of the agreement , and without knowing what
contractual restrictions would be imposed on the rights in the
clause to hire , make work assignments , transfer, promote,
schedule, or the like, the Union could not agree to its inclu-
sion in the contract. Bender advised the Company that if it
wished the Union to discuss this proposal rationally State
Farm should present a package.
Weise presented the clause with the explanation that it
assured the Company 's right to run the business unless the
contract provided otherwise and asked the Union to look it
over and Bender replied the Union would study the proposal.
Weise denied Bender had mentioned an entire package
proposal in connection with the management 's rights issue.
Bender testified that at the meeting of March 18 Weise said
the management rights issue was of extreme importance to
the Company because it guaranteed prerogatives which State
Farm felt were vital in reaching an agreement . Bender replied
that he could not agree to a management rights clause for the
reasons he had previously stated . Bender added that the
Union would have to know more about the entire contract
before it could accept such a clause even in a modified form.20
3. Conclusions and findings
On the basis of the foregoing analysis of the parties' con-
duct in the course of bargaining I do not find that "Respond-
ent negotiated with the Union in bad faith , and with no
intention to enter into any final or binding collective bargain-
ing agreement with it."21 This conclusion is based on the
totality of the Respondent 's position through the bargaining
and not its position and concessions on any single contract
provision or combination thereof.22
The record is devoid of extrinsic evidence establishing a
desire on the Company's part not to reach or sign an agree-
ment with the Union . Such an inference cannot be drawn
from the Company 's exhaustion of its legal remedies seeking
to set aside the certification election prior to commencing
bargaining with the Union.
Once bargaining commenced , there were 11 negotiating
sessions in a 17 -week period . The longest delay between bar-
gaining sessions was occasioned not by the conduct or desires
of either party but by a strike of air controllers which pre-
vented the Company 's negotiators from reaching the situs of
the bargaining . This record does not sustain a finding that the
Company unreasonably delayed the bargaining.
As to the give-and-take of the bargaining itself the record
establishes that the Respondent made concessions to the
Union , some major , others of a lesser degree , and as to certain
important matters had not taken a firm and final position at
the time bargaining broke off following the filing of the
Union's first charge herein. Thus, as to the Union 's demands
the Company made the following concessions:
-Arbitration of discharges . Respondent agreed that all
discharge cases could be arbitrated as a matter of right.
Additionally, the Company agreed to the Union's
proposal that discharges could be for just cause only.
-Probationary period . Respondent agreed to a 9-month
limitation on the probationary period . While this was
not to the Union's liking it represented a concession as
the Company initially objected to any limitation on the
training period.
-No discrimination . In its final proposal to the Union
the Company agreed to include all subjects which the
Union had set out in its original demand other than
union activity , which subject was tied directly to the
disagreement as to the inclusion of union security and
mandatory checkoff in the contract.
-The unit and recognition . The Company retreated
from its original desire to exclude the "suit " personnel
from the contract and agreed to an expedited procedure
to dispose of the Union 's demand for recognition as
representative of the fire claims adjusters.
'° I note that Bender's last word in the negotiations concerning the
Union's attitude toward the proposed management rights clause tracked the
position taken by the Company on mandatory arbitration of all grievances.
Complaint par. 10.
" Cf. Florida Machine & Foundry Co. & Fleco Corp., 190 NLRB No.
109.
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
-Grievance procedure. Agreement was reached on all
aspects of a grievance procedure other than the defini-
tion of a grievance and mandatory arbitration, which
was a subject in itself.
-Bulletin boards. The Company agreed that the Union
could have bulletin boards on the Company's premises.
-The right to visit. The Company raised no objection
to the right of union representatives to visit the Com-
pany 's premises.
-Shop stewards. The Company agreed to increase the
number of shop stewards afforded to the Union to the
number it requested.
-Checkoff. The Company offered a voluntary checkoff
to the Union. Although not to the Union's liking this
represented a change in position by Respondent.
-Pay for negotiating committee. The Company, after
initially proposing to deduct from the pay of employee-
members of the negotiating committee for time spent in
bargaining, agreed to compensate them for their time at
the bargaining table.
Turning to the Company's demands the record discloses
that State Farm presented four major requests.
-Consent waiver. The Company withdrew its demand
that employees sign a consent to discuss grievances
before such matters would be discussed at the third step
of the grievance procedure.
-Conflicts of interest. The Company receded from a
position that practice of law by the adjusters would per
se constitute a conflict of interest on their part to a final
position permitting such practice by the field claims rep-
resentatives provided prior permission was received
from their supervisor.
-No strike, no lockout. The record discloses that the
Company's proposal was discussed without resolution.
-Management rights. As to this company proposal the
Union reserved its position until it could see a final total
agreement. Accordingly, it cannot be said that the Com-
pany had insisted on this provision to the point of im-
passe and the matter was open at the time negotiations
broke off.
Arbitration was a major issue of dispute during the bar-
gaining, the Union insisting on the right to arbitrate all un-
resolved grievances, the Company proposing voluntary arbi-
tration as to those matters which the parties agreed would go
to third party resolution and affording the Union the right to
strike over grievances which did not go to arbitration. The
record discloses that on at least two occasions the Company
stated that it did not have a closed mind on the subject of
arbitration but would take a look at the subject when the
definition of a grievance had been agreed upon and the Com-
pany was in a position to view all of the terms of an agreed-
upon contract. This position in effect duplicated that which
the Union had taken on the Company's proposed manage-
ment rights clause.
As to the term of the agreement the parties were apart, the
Union initially proposing a 1-year contract and the Company
counterproposing a 3-year term. However, there was no seri-
ous discussion of this subject as Bender took the position that
this was a moot point in view of the many substantive areas
upon which there was no agreement.
The Company rejected a number of proposals contained in
the Union's initial 25-point demand. The subjects rejected by
State Farm and the explanation it gave to the Union during
the bargaining are summarized below.
-Work week. The Union's proposal contemplated a
reduction in hours from 40 to 30 per week. The Com-
pany's rejection was based upon the major increase in
costs involved and the necessity of either expanding its
work force or turning to outside sources to have the
work performed. As to the Union's request for premium
pay for all Saturday, Sunday, and holiday work the
Company 's refusal was based upon the nature of the
work which required performance of duties upon those
days as a matter of course.
-Invasion of privacy. In rejecting this proposal the
Company noted that in the course of their work the
adjusters handled and disbursed significant amounts of
money.23
-Existing privileges . While rejecting a blanket con-
tinuation of all existing privileges the Company sug-
gested that it would be prepared to bargain on specific
subjects in this area which the Union wished to raise.
-Union-security and mandatory checkoff. The Com-
pany took an inflexible position on this subject. The
Company stated without contradiction that it took the
consistent position that employees were not compelled in
the course of their employment to join or accede to
mandatory enrollment in any form whatsoever. Thus,
the Company noted that even as to benefit programs for
which it paid the entire cost employees were required to
voluntarily indicate their desire to be included within
such a program.
-Successors and assigns. The Company noted that be-
cause it was a mutual insurance company owned by the
policyholders the usual situation applying to a successor
did not obtain.
-Other union proposals rejected by the Company were
the demand for a picket line clause and seniority, college
loan, and jurisdiction clauses.
In the main, bargaining on the economic aspects of a con-
tract took place only at the final session on May 14. The
Company's initial economic offer presented that day contem-
plated continuation of its existing salary and benefit pro-
grams. The record is clear that the Company's administration
proposal reserving to itself the right to administer those pro-
grams without grievance by the Union was subject to immedi-
ate revision, the Company admitting that the draft it had
presented was too broad in its exclusion of the bargaining
agent from the day-to-day operations of the employee com-
pensation program. The record does not disclose that the
Union modified its own economic proposals in any way fol-
lowing receipt of the Company's initial offer.
In recommending dismissal of this complaint allegation
based upon a view of the totality of the parties' conduct
herein, I am mindful of the Union's conduct at the bargaining
table as well as that of the Respondent. The bargaining did
not represent the usual give-and-take of negotiations. Rather,
I find that the Union's approach to bargaining was that the
Company should give and the Union would take. Thus, after
presentation of its initial 25 contract demands, the Union
took the position that it was then incumbent upon the Com-
pany to accede to union demands to demonstrate its good
faith. The law does not impose such an obligation upon the
parties to negotiations." While Bender indicated on a number
of occasions that the Union was prepared to modify its posi-
" Adjuster Joseph Reynolds testified that in the course of his duties he
has authority to adjust bodily injury claims to a total of $3,000 per file and
up to $2,500 for property damage.
11 N.L.R.B. v. American National Insurance Co., 343 U.S. 395; W. L.
McKnight, d/b/a/ Webster Outdoor Advertising Company, 170 NLRB No.
144. In the McKnight case, as in the instant proceeding, "the employer's
wage offer was insubstantial." However, the Board held in McKnight that
the employer was not obligaged to increase its offer because in that case the
union had reduced its demand. Here, the Union did not reduce its demand
nor in any way indicate that it was prepared to do so. The Union's first and
only economic proposal was made at the first session on January 22.
STATE FARM MUTUAL AUTO INSURANCE CO. 889
tion in respect to a number of its demands he never detailed
to the Company the revisions the Union would make. At no
point does the record disclose that the Union modified or
reshaped its initial contract demands in an effort to meet
arguments raised by the Company in either rejecting or coun-
terproposing different approaches to the subjects of the
Union's initial requests. Thus, I conclude that the Company
fulfilled its bargaining obligations25 in all major respects and
that the General Counsel has not sustained his burden of
proof as to these allegations of the complaint.
C. Postbargaining Maneuvers
As noted, the May 14 bargaining session ended with agree-
ment that negotiations would resume on June 17. On June 9
the Union filed its first charge in this case.
Weise called Bender on June 15 to ask if there was any
point in going through with the scheduled meeting in view of
the Union's unfair labor practice charge. According to
Bender he replied that he saw no sense in holding such a
meeting unless the Company was prepared to make new or
different proposals and Weise replied that he saw no sense in
the meeting. Weise's version of the conversation was that
Bender stated the Union did not wish to meet until the pend-
ing charge had been resolved. Weise asked if that meant
Bender did not want to meet on the scheduled days, stated
that State Farm was agreeable to meeting, but added that if
Bender did not wish to proceed it was all right with the
Company.
Weise then wrote to Bender on June 15 confirming the
subject of their telephone conversation of that day. In his
letter Weise wrote:
I asked you whether, in light of the recently filed refusal
to bargain charge against. the Company, the Union
desired to meet in our negotiation sessions scheduled for
this week. I stated further that the Company was willing
to meet. You stated that the Union did not desire to meet
because of the pending unfair labor practice charge.
Weise testified that there was no reply to this letter. How-
ever, on June 30, Victor Rabinowitz, attorney for the Union,
wrote to Weise stating that the Union did "not wish it to be
understood that we will not meet further with the Company
if some progress can be made." Noting that Weise was aware
of the areas of difference between the parties, Rabinowitz
stated further "if the company is prepared to make any
changes in the position it has heretofore taken, we will be glad
to meet with you and to discuss such changes." Rabinowitz
suggested that Weise advise the Union in writing as to those
areas in which the Company thought "that the present im-
passe can be broken." Rabinowitz' letter of June 30 was the
first occasion upon which the word impasse was used by
either party.
D. The Grant of Unilateral Increases
During the Bargaining and Their
Denial Subsequent to the Bargaining
The complaint alleged that starting on or about December
8, 1969, and at various times thereafter the Company unilat-
erally changed existing wage rates and the cost-of-living diff-
erential payments without prior notice to the Union and
without affording it an opportunity to negotiate and bargain.
At another point, the complaint alleged that the Company,
on or about July 18 and continuing thereafter, terminated its
practice of granting wage increases to unit employees and on
or about August 3 the Company refused to grant unit em-
ployees a cost-of-living adjustment while continuing such in-
crements to its other employees. The termination of wage
increases and cost -of-living adjustments was alleged to have
been instituted without prior notice to the Union and without
having afforded it an opportunity to bargain and negotiate.
1. Unilateral changes during the bargaining
The Company's basic salary structure for field claims rep-
resentatives provides for four job classes, specified as FC-1
through FC-4. Employees can receive wage increases in one
of two ways, by a merit increase within an FC class or by
promotion from one such class to another. New employees
are subject to a merit review after 6 and 12 months of employ-
ment. Thereafter all employees are reviewed on an annual
basis. Company witnesses testified that in such merit reviews
the reviewing supervisor applies subjective factors in placing
the employees' performance within one of five specified per-
formance rating scales, probationary, minimum, effective, ex-
cellent, and outstanding. Once this subjective rating has been
made determination of the actual increase is a mechanical
matter effectuated by applying the subjectively determined
efficiency rating to a predetermined scale of increases based
upon prior merit increases and the point at which the em-
ployee stands within the base range for his FC classification.
The employees' actual compensation is determined by apply-
ing two maintenance factors26 to his base rate. The first
maintenance factor applied is the cost-of-living allowance
which is determined not by the Company but by the Bureau
of Labor Statistics of the United States Department of Labor
(herein called BLS). When the cost-Of-living index figures
compiled by the BLS increases by 1 percentage point the
Company is so notified and its cost-of-living allowance is
automatically increased and shows in the employee's next
wage payment, the base rate determined from the field claims
salary structure being multiplied by the then effective cost-of-
living index figure.
The second maintenance factor applied by State Farm is an
area differential allowance based again upon a BLS study
which determines the increase in the budget required to main-
tain a hypothetical family in selected major urban areas. The
Company automatically increases the area differential allow-
ance upon notification by the BLS that the minimum budget
requirements in the selective areas have increased. The area
differential allowance is applied by mutiplying the figure first
achieved by application of the cost-of-living allowance to the
base salary rate.
Thus, during the period from December 22, 1969, until
May 25, while bargaining was in progress, the cost-of-living
allowance factor increased from 30 to 34 percent and was
automatically applied to the base salary of the employees."
An exhibit submitted by the Company disclosed that from
December 8, 1969, until July 1, 24 bargaining unit employees
received increases under the merit review system described
above. Four of those increments represented promotions
from one FC grade to another. A second company exhibit
reveals that in the period from December 1968 to July 1969
there were 17 merit increases to unit employees, 4 of which
represented promotions.
" 1 have heretofore found that the Company failed to supply the Union
with information as to salaries being paid to members of the bargaining unit. " So called because they maintain the employee's real wages in the face
This was a violation of the Act and I shall propose a remedy therefor. of increases in the cost of living.
Building Construction Employers Association of Lincoln, Nebraska, et al., " There was no area differential increment paid to any company em-
185 NLRB No. 8. ployee during the period of bargaining.
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Bender testified that as early as sometime in February in
meetings with employees he first learned that increases had
been granted but because the employees did not understand
the Company 's wage policy he could not determine whether
these were merit raises or resulted from increases in the cost-
of-living and area differential allowances. However, the
Union was never notified by the Company that increases had
been granted . Bender testified that at bargaining sessions the
salaries of Vitale and Joseph Reynolds were discussed and
questions were asked as to what part of their compensation
resulted from merit , cost-of-living, or area differential in-
creases. During cross -examination Bender admitted that he
never protested the granting of increases to unit employees.
CONCLUSIONS AND FINDINGS
The salary increments granted by the Respondent during
the bargaining period fall into two distinct classes. First, the
cost-of-living increments were automatic increases to which
the Company was committed by a longstanding program and
which involved no independent action by the Company. All
that was required of it was to automatically implement the
increases on the base of information supplied by the BLS.
Second , the merit increases , while a continuation of a previ-
ously established program,
... were in no sense automatic , but were informed by a
large measure of discretion . There simply is no way in
such case for a union to know whether or not there has
been a substantial departure from past practice, and
therefore the union may properly insist that the com-
pany negotiate as to the procedures and criteria for de-
termining such increases . [N.L.R.B. v. Katz, 369 U.S.
736, 746-747.]
Thus, as in Katz, I find that continuation of merit increases
to employees during the bargaining period constituted a vio-
lation by the Company of its bargaining obligation . However,
I find no similar violation as to the cost-of-living increases
because of their totally automatic nature.
2. Termination of wage increase after bargaining ended
The parties stipulated that an area differential adjustment
of 6 percent was not granted to bargaining unit employees
although a revised Urban Family Budget Index issued by the
BLS in either December 1970 or January 1971 indicated that
such an increment was due. All other company employees
covered by the area differential program received increases in
February 1971 based on that study. The stipulation further
provided that cost-of-living increases indicated by BLS re-
leases were not granted to bargaining unit employees after
June 1970 although nonbargaining unit employees have con-
tinued to receive such increments . Although not covered by
the stipulation , the record discloses that merit increases as
well were denied to bargaining unit employees after July 18.
Weise testified that following receipt of the Union's June
9 unfair labor practice charge he spoke to the Board agent
assigned to investigate and was advised that there were two
allegations encompassed under the charge . The first con-
cerned the Company's bargaining conduct and the second
was a union allegation that salary increases had been illegally
granted to bargaining unit employees.28
xe On July 2 Weise wrote to the Board investigator confirming that the
information set forth above had been passed on to him in a telephone
conversation On July 8 the Board agent replied asking for State Farm's
cooperation in the investigation "in setting forth the details of the negotia-
tion sessions between the parties and the circumstances of any wage rate
increases given unit employees during the period in question "
Early in July29 a meeting was held in Weise's office attended
by the State Farm officials involved in dealings with the
Union . Weise reported on his prior conversations with
Bender resulting in cancellation of the June 17 negotiating
session and his talk with the Board agent investigating the
case. Weise informed the company ' officials that Bender
would not meet while the charge was pending, filled them in
on Board procedure in investigating a charge, and explained
the nature of the pending charge as it had been detailed to
him by the Board agent. There was discussion of a campaign
instituted by the Union to take the dispute to the public,
including letters to agents handling State Farm business and
rumors of an impending union-sponsored boycott of the
Company. Hoffman, Respondent 's assistant vice president
for personnel , testified that in determining the Company's
future course of conduct
It got down to a basic motivation of where we in this
dead center position, how do you really get back into the
bargaining process, and a decision was then made by the
vice president of personnel that we would then inform
the union that we would be suspending salary increases,
starting in July, and this would be done through a letter
that would go from Mr . Weise to Mr. Bender, but there
was an important contingency or qualification placed on
the basis of giving the union ample time to react and
perhaps bring back , get us back to the bargaining table.
Pursuant to that decision , on July 7, Weise wrote to Bender
as follows:
The Company has under consideration a policy of
granting no unilateral salary increases of any type to
employees in your bargaining unit (including cost-of-
living, merit and promotional increases).
This action is under consideration in response to our
understanding of the refusal to bargain charge recently
filed by your Union protesting unilateral salary in-
creases. The Company 's past action of granting increases
unilaterally was undertaken in a good faith desire to
treat employees fairly through the implementation of the
status quo, coupled with our understanding that your
Union, on behalf of unit employees , desired continued
implementation of the status quo, particularly due to the
formalized nature of the State Farm salary increase pro-
gram and the special circumstances of the protracted
litigation which preceded commencement of bargaining
on January 22. The Company has also been motivated
by the concern that the withdrawal of normal salary
increases , while continuing said increases for non-
representative employees similarly situated , would be
interpreted as a discriminatory cancellation of benefits in
violation of law.
However, being currently on notice to the contrary by
your charge, the Company fully intends to follow the
course outlined in this letter , anticipating that an accom-
modation will be reached as litigation proceeds and/or
as bargaining reaches normal conclusion , either in agree-
ment or at impasse.
The Company will post this letter on employee bulle-
tin boards on July 18.
Following receipt of this letter, on July 14, Bender called
Weise. Bender testified that he protested the denial of in-
creases to unit employees and stated that he did not fully
understand Weise's letter. Bender observed that the letter
might be ambiguous, "but I chose to interpret it as an indica-
tion that Mr. Weise wanted to meet to see if it were possible
to resolve our differences ." Bender noted that they had been
29 Hoffman, Respondent 's assistant vice president for personnel, placed
the meeting on either July 6 or July 7.
STATE FARM MUTUAL AUTO INSURANCE CO. 891
unable to reach agreement in formal negotiations and sug-
gested that informal discussions might serve to resolve the
matters in difference . Bender said that if this was what Wei-
se's letter meant , Bender was for it . Weise replied that since
the Union 's attorney had filed unfair labor practice charges
against the Company , Weise would not meet with Bender on
an informal basis. Bender claimed that Weise did not suggest
any other meetings . Bender concluded that it was his under-
standing that Weise did not want a meeting , he asked if this
was correct and Weise replied that it was.
Weise's version of the July 14 conversation in part com-
ports with that of the union negotiator . Weise testified that
Bender commented that the second paragraph of the letter
was of interest to him because Weise had stated therein that
the Company felt the whole situation might be resolved in
bargaining . Bender said he would like to ask Weise off the
record what he had in mind and that the Union would not
use this discussion in litigation against the Company and he
trusted that the Respondent would take the same position.
Weise replied that when a situation became elevated as the
instant one had with charges filed and the Union 's attorney
sending a letter saying that the Union was seeking to have a
court punish the employer , Weise did not believe it would be
appropriate to discuss the matter by telephone . Whereupon
Bender thanked Weise and the conversation ended. Weise
testified that Bender did not ask for additional negotiation
meetings.
As noted , since July 18, the Company has not granted to
unit employees the cost -of-living adjustments nor the area
differential increases called for by BLS reports . Additionally,
since that date there have been no merit increases or promo-
tions from one FC grade to another granted to unit em-
ployees . Gerald Strickland , area personnel supervisor, tes-
tified that but for discontinuance of the merit review system
a good number of unit employees would have been given
some kind of increase since July 18. Strickland stated that in
the normal course of events during the period July 1970 to
July 1971 virtually every employee in the bargaining unit
would have come up for a merit or promotional review.
Conclusions and Findings
Respondent contends that termination of increases for bar-
gaining unit employees on and after July 18 was justified on
either of two grounds. First , Respondent states that suspen-
sion of salary increases was implemented only after it had
received no reply to its July 7 letter offering to bargain on the
proposal . Second , the Company claims that no violation can
be found because its termination of salary increases was moti-
vated by bona fide business considerations.
Accepting Hoffman 's explanation of the Company 's moti-
vation for setting in motion the events which led to termina-
tion of increases to unit employees and accepting Weise's
version of his July 14 conversation with Bender , I conclude
that it cannot be said that the Union did not respond to the
oblique invitation to resume bargaining contained in Weise's
letter . If, as Hoffman and Weise himself testified , the Com-
pany was motivated by a desire to get the bargaining off dead
center , it would appear that Weise would not have closed the
telephone conversation without in some way inviting further
bargaining . Instead , Weise testified that his sole response to
Bender 's request that Weise explain in an off-the-record fash-
ion what he had in mind was to say that he did not feel it was
appropriate to discuss the matter by telephone . Had the Com-
pany been motivated by a desire to secure resumption of
bargaining it would appear that Weise would have let Bender
know in one way or another that while his proposal for an
off-the-rccord discussion was unacceptable a formal bargain-
ing meeting would be to the Company's liking . Accordingly,
I find that the Company 's claimed invitation to the Union to
bargain about the proposed changes before they were imple-
mented was more a matter of form than of fact.
The "several compelling business needs" cited by Respond-
ent as justification for discontinuance of salary increases to
bargaining unit personnel were , first , the Union's boycott
threats, second , the desire to get the parties back to the bar-
gaining table , and, third , the Union 's position that further
bargaining was preconditioned on resolution of the pending
unfair labor practice charge.
The contention that the Union was conditioning further
bargaining upon resolution of the pending charge is disposed
of by Rabinowitz ' letter of June 30 , wherein the condition
precedent for further bargaining was set by the Union as a
statement in writing by the Company as to the areas in which
State Farm thought "the present impasse" could be broken,
not by resolution of the unfair labor practice charges. Second,
the contention that the move was made with a view of getting
the parties back to the bargaining table is negated by the
finding above that , in his conversation with Bender on July
7, Weise in no way indicated that the Company did in fact
desire further bargaining , did not invite bargaining , and did
not suggest that a formal bargaining session would be accept-
able to the Company at the time that Weise rejected the
proposal for an off-the-record discussion . Finally , as to the
contention that the salary increases were discontinued be-
cause of the Union 's boycott threats and its indications that
it would take other economic action against the Company,
while it is true that Weise and Hoffman both testified that
these actions by the Union were discussed at the Company's
meeting on July 6 or 7, Hoffman credibly testified that the
"basic motivation" was "how do you really get back into the
bargaining process." Thus, upon analysis I find that the Com-
pany 's contention that its discontinuance of salary increases
to bargaining unit employees on and after July 18 was moti-
vated by bona fide business considerations does not stand
scrutiny.
Accordingly, I find that the Company's unilateral discon-
tinuance of salary increases to the employees in the bargain-
ing unit , including implementation of cost -of-living incre-
ments and the area differential allowance paid to other
employees on February 1, 1971, amounted to a refusal to
negotiate about conditions of employment and constitutes a
violation of Section 8(a)(5) of the Act. N.L.R.B. v. Katz, 369
U.S. 736, 747.1-
E. Additional Alleged Unilateral Changes in Conditions of
Employment
As amplified by General Counsel 's reply to the Respond-
ent's motion for a more definite statement the complaint
alleged three additional unilateral changes in conditions of
employment . First , the Respondent imposed a requirement
that all unit adjusters were immediately required to take
photographs and provide estimates of damage in all cases
assigned to them ; second , a change in the Company 's policy
of reducing the number of cases assigned to adjusters in the
week before vacation and during the week in which a holiday
falls; and, third , issuance of a directive that all personnel
matters be handled by unit employees through Respondent's
first-line supervisors , thereby affecting a change in the Com-
pany's "open door" policy whereby such matters could be
handled at all levels of management.
'° "Of course , there is no resemblance between this situation and one
wherein an employer, after notice and consultation , `unilaterally ' institutes
a wage increase identical with one which the union had rejected as too low."
N.L.R.B. v. Katz, supra, fn. 12 at 745.
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1. The requirement of photographs and estimate of
damages
In support of the allegation that the Company imposed a
new requirement that employees submit photographs and
estimates of damages General Counsel introduced two
memoranda from resident superintendents ." The first of such
memoranda , issued on August 11 by Robert Galloway, pro-
vided:
Effective immediately the copy of all estimates prepared
by the Field Claim Representative along with a photo-
graph of the vehicle involved is to be personally submit-
ted to me on the same day as the estimate is written and
under no circumstances no later than the next working
day.
'The upper part of all estimates must be complete and
legible and the estimate must include the phone number
of the claimant and the date the file was assigned to the
FCR.
Start this ' procedure immediately upon receipt of this
memo and under , no circumstances deviate from the
above instructions.
I also want to take this time to advise that on some of
the recent files that I have reviewed in this unit, it ap-
pears as though we are again slipping in the area of PD
photographs , inspections, and estimates . The inspection
of the property damaged vehicle is a rule on each and
every case and not an isolated exception . The fact that
the claimant has an attorney or carries collision on his
vehicle is' not a valid reason for not inspecting , photo-
graphing and estimating property damaged vehicles. In
addition to the monetary inspection , these inspections
and photographs also suffice for defense purposes, to
show points of impact, severity of impact, and so on.
I again want to reemphasize this very important phase
of your claim handling and insist that all property dam-
aged vehicles be properly inspected . Vague phrases, such
as, "car was not available"; "whereabouts unknown",
and so on , are not to be used as they will only solicit a
memo from me asking the specific reasoning an in-
dividual file basis as to why the car was not available or
whereabouts unknown.
The second memo, issued August 12, reads:
As of this date, please take an additional photo or photos
showing all damage on claimant vehicles that you in-
spect, whether a total loss or not.
Please prepare an estimate on each claimant vehicle you
inspect, being sure to fully complete same. On total
losses, prepare a T.L.S.R. The estimate must include the
phone number of the claimant and the date the file was
assigned.
Upon returning to this office , submit the additional
photo or photos and estimate or T.S . L.R. on each claim-
ant vehicle inspected , either to myself or my secretary.
Please give the above your maximum effort so to show
our unit's efforts in the P.D. area.
On August 24 Bender wrote to Richard L . Meyer, manager
of the Respondent 's Metro New York Division , restating the
Union 's opposition to the above rules which Bender had first
orally communicated the prior week. The Union maintained
that these rules required new duties and imposed substantial
additional work and responsibility upon the BI men. Bender's
letter concluded , "This will require more time and, quite
obviously , some of the BI men had not had as much experi-
ence in making PD estimates as the PD Adjusters , for exam-
" Resident superintendents are the direct supervisors of the field claims
representatives
ple." Meyer replied to Bender on September 17 stating that
"Inasmuch as your letter concerns wages, hours and working
conditions , I have forwarded it to Mr. John T . Weise, our
primary spokesman in bargaining . Should other questions
arise concerning bargainable items, may I suggest that you
contact Mr. Weise."
Employee Joseph Reynolds, an adjuster for some 5 years,
testified that in his training period , during a 3 weeks' course
in "estimatics," he had been taught how to complete a com-
pany form entitled "Repair Estimate" which requires the
adjuster to detail the number of units and description of the
parts required for repair of a damaged vehicle, the labor
hours required , the costs of the parts, the refinishing hours,
and the costs of the paint materials and other items . However,
Reynolds stated that he has never used this or any similar
form in the performance of his duties which involve the inves-
tigation of approximately 200 cases per year of which approx-
imately 150 involve property damage. Reynolds claimed that
he is not qualified to fill out this form but if given an unlimited
amount of time he could complete the items required. He
explained that for a thousand dollar claim it would take him
at least 4 or 5 hours to inspect the damaged vehicle and
complete the form.
Reynolds testified that he had been aware of a requirement
prior to August 1970 that bodily injury adjusters actually do
the work called for by Respondent 's repair estimate form but
that he had never complied with it. This requirement had
been called to Reynolds ' attention some 30 or 40 times in the
2 years preceding August, including a merit review evalua-
tion when his failure to use the form was noted . During that
period Reynolds estimated that he had handled about 200
property damage cases.
Reynolds further testified that after issuance of Galloway's
August 11 memo (which Reynolds interpreted as a require-
ment that adjusters prepare a written estimate and submit a
photograph) he did not change his method of operations on
property damage claims and did not submit the written esti-
mate form . In sum , Reynolds testified that as of the date of
the hearing he performs his work in the same manner as he
did prior to August 1970 . He did not follow the requirement
for completion of the repair estimate prior to that time and
he does not follow the requirement today. Finally, Reynolds
testified that calling for the filing of a written estimate of
property damage was not a new requirement.
In a similar vein to Reynolds, Patrick Vitale testified that
he did not change his method of submitting property damage
estimates following issuance of the memoranda of August 11
and 12. Although he received a copy of Galloway's memo
Vitale has not used the Company's repair estimate form and
has heard no more about the matter.
Arthur S. Miller, a property claims adjuster , testified that
he completes the repair estimate form in almost every case
assigned to him.
As to the requirement that adjusters take photographs of
damage to vehicles, Reynolds testified that such a require-
ment had been in effect prior to August. However, he did not
always take such a photograph because the damaged vehicle
might not be available for various reasons. Reynolds es-
timated that he took photographs of cars in about 30 percent
of the cases assigned to him.
Reynolds acknowledged that he was aware of Galloway's
instructions that photographs and written estimates be sub-
mitted the same day, but this did not cause him to change his
method of operation . Reynolds continued to submit the
photograph and other materials with his report within 30
days from the receipt of case assignment . In sum , the manner
in which Reynolds performs his job has not been affected by
the memoranda of August I1 and 12.
STATE FARM MUTUAL AUTO INSURANCE CO. 893
Arthur Miller agreed that the requirement of a photograph
with the written estimate had existed prior to August. Miller
estimated that on the average he submitted this material
about 3 to 5 days after a case was assigned to him. Miller
stated that after August he was required to furnish a copy of
his report and photograph to the Company's Paramus, New
Jersey, office no later than 1 working day after inspecting the
damaged vehicle. Although he did not specifically place the
blame for the longer hours on the new practice, Miller
claimed to work longer hours now because he goes to the
office to make a xeroxed copy of the report for Paramus
rather than submit an unclear carbon copy. Miller explained
that the Paramus office needs a copy of his report and photo-
graph so that the Company's reinspection unit can examine
the damaged vehicle while the repair work is in process rather
than at some later time when it would be impossible to deter-
mine the extent of damage.
Conclusions and Findings
I shall recommend dismissal of this allegation as the evi-
dence adduced by General Counsel's own witnesses estab-
lishes that requiring the adjusters to submit written estimates
of property damage and photographs of the damaged vehicles
was not a new condition of employment. Rather, this was a
longstanding requirement which antedated the advent of the
Union or of bargaining. As to the change in timing for sub-
mission of the photographs, I note first that issuance of the
memos of August 11 and 12 did not cause Reynolds to change
his method of operation and that there were no consequences
to him for his actions. Second, there is no evidence that
additional duties were imposed upon the employees nor did
the requirement itself add to the work or hours required of
the adjusters.
2. Change in open-door policy
For at least 10 years12 the Company had maintained an
"open door" policy affording a means by which employees
could bring job related or personal problems to the attention
of the Company. The open-door policy provided that the
employee, without prior permission from his immediate
supervisor, could take his problem to the level of manage-
ment of his own choice for an individual conference without
the necessity of having any other person present, such as his
immediate supervisor.
Sometime in the end of July the Company's Jericho Turn-
pike office was moved to Westbury, Long Island. On Septem-
ber 2 and continuing through September 9 a series of memo-
randa from the resident superintendents (the immediate
supervisors of the field claims representatives) were issued
which for the most part contained the following language:
As you are aware, there will shortly be several levels of
management housed in the Westbury CSO and I want to
advise each of you that if any inquiries, suggestions, or
other communication concerning claims, equipment and
the complete office in general , including all personnel
matters in general, should be directed to my attention.
If any action should need to be taken with management
people, other than myself, I will make arrangements for
any such meetings or action that may be taken.
The requirement in these memoranda that all matters, "in-
cluding all personal matters in general" be directed to the
adjusters' immediate supervisor and that "[i]f any action
should need to be taken with management people ... [he] will
make arrangements for any such meetings or action that may
be taken" is a clear change in the open-door policy enunciated
12 Testimony of Gerald Strickland.
in the Company's "Supervisor's Manual of Personnel Poli-
cies" cited above which gave the employees the right to take
personnel problems to the level of management of their
choice.
On October 29 memoranda were issued advising all per-
sonnel that the September 2 memoranda were to be disre-
garded as "it seems that memo has raised as many questions
as it answered."
In September" Joseph Reynolds met with Eugene Day,
divisional claims superintendent , to discuss pending griev-
ances and personnel problems arising from the move to West-
bury. Present were employee Patrick Vitale and several com-
pany representatives. Reynolds brought up complaints from
adjusters in the units other than that in which he was em-
ployed and Day asked why Reynolds was discussing their
complaints. Reynolds explained that those men were mem-
bers of the Union and he was representing them in that
capacity. Day replied that he did not recognize any union.
When Reynolds gathered his papers and started to leave Day
told him to sit down and continue the conversation. During
this exchange Day told Reynolds "you are here only because
of the open door policy." Reynolds has not sought to meet
with Day since that September session.
Vitale testified that he had been in Day's office on a com-
plaint "the other day" and that the open-door policy is still
in effect.
Gerald Strickland, Respondent's area personnel director,
testified that the open-door policy has not been discontinued.
Conclusions and Findings
As noted, the issuance of the memoranda on September 2
effectuated a substantial change in the Company's open-door
policy. It has been held that by unilaterally changing a griev-
ance procedure an employer violates his duty to bargain with
the representative of the employees. Bethlehem Steel Com-
pany (Shipbuilding Div.) v. N.L.R.B., 320 F.2d 615, 620
(C.A. 3), cert. denied 375 U.S. 984. Accordingly, I find that
the Company's unilateral change in its open-door policy pro-
viding for the manner in which employees could process their
grievances violated State Farm 's bargaining obligation de-
spite the recision of that unilateral change on October 29.
3. Case assignment prior to vacation and during holiday
weeks
Joseph Reynolds testified that prior to September 1970 the
Company followed a policy of reducing normal case assign-
ments in the week prior to vacation and for holiday weeks.
Thus, a normal assignment was four cases while in the week
preceding his vacation an adjuster would receive only two
regular cases and for the weeks in which a holiday occurred
the case assignment would be reduced to three.
Prior to his September meeting with Divisional Superinten-
dent Day, Reynolds was approached by Robert Murphy, an
adjuster in the critical area unit. Murphy said he had been
assigned 13 cases in the week prior to his vacation and asked
Reynolds to inquire from Day what the caseload should be
for a critical area adjuster." In their meeting Day expressed
the opinion that the assignment of 13 cases must have been
a mistake.
" Reynolds first testified that his meeting with Day took place on Sep-
tember 1. At another point he stated that the conversation occurred on
approximately September 13.
" Reynolds acknowledged that he did not know what the custom was for
case assignment to critical area unit personnel.
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Murphy did not testify.
Adjuster Stanley Fayne testified to an exchange with Su-
perintendent Howard Doppel during the week in which La-
bor Day fell in 1970. Fayne asked how many cases would be
assigned that week and Doppel replied that he did not know
and would have to check with Eugene Day. According to
Fayne Doppel later said they would receive a full quota of
claims that week. Fayne complained because there had been
a day off and Doppel advised him to wait and that perhaps
the full number of cases would not be assigned . Fayne tes-
tified that he received three cases rather than the normal
quota of four and he believes the other adjusters received the
same number of cases that week. Further-, Fayne testified that
he did not know if the caseload assignment during the Labor
Day week had been reduced because of a lower case intake
or because the Company was adhering to the prior policy of
reducing case assignments . Fayne concluded , "there was in
effect no actual change except what I was told by Mr. Dop-
pel."
Conclusions and Findings
I shall recommend dismissal of this allegation. There is no
probative evidence that the Company did in fact change its
established policy of reducing caseload assignments to adjust-
ers in the week preceding their vacations or in the week in
which a holiday occurred.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Company set forth in section III,
above, occurring in connection with the Company 's opera-
tions described in section I, above, have a close , intimate, and
substantial relationship to trade, traffic , and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
V THE REMEDY
Having found that the Company engaged in certain unfair
labor practices , I shall recommend that it cease and desist
therefrom and take certain affirmative action designed to
effectuate the policies of the Act.
Having found that on and after July 18, 1970, the Respond-
ent unlawfully withheld wage increases to the employees, I
shall recommend that it be ordered to make the employees
whole for such loss of pay. Backpay shall be computed in the
manner set forth in F. W. Woolworth Company, 90 NLRB
289, with interest added thereto in the manner set forth in
Isis Plumbing & Heating Co., 138 NLRB 716.
CONCLUSIONS OF LAW
1. State Farm Mutual Automobile Insurance Company is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
2. American Communications Association , Communica-
tions Trade Division , affiliated with International Brother-
hood of Teamsters, Chauffeurs , Warehousemen and Helpers
of America , is a labor organization within the meaning of
Section 2(5) of the Act.
3. The following employees constitute a unit appropriate
for the purposes of collective bargaining within the meaning
of Section 9(b) of the Act:
All field claims specialists and field claims representa-
tives employed by Respondent , assigned to the Smith-
town, Syosset and Jericho, Long Island , New York
offices, exclusive of superintendents and all other
managerial and supervisory personnel as defined in Sec-
tion 2(11) of the Act, clerical employees and guards as
defined in the Act.
4. By refusing to supply information as to the wages paid
to employees in the bargaining unit , by unilaterally granting
merit and promotional increases , by failing and refusing to
pay automatic wage increases to unit employees on and after
July 18, 1970 , as were paid to all other employees of the
Company, and by unilaterally changing established methods
for employee processing of problems and complaints with
company representatives , Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Sec-
tion 8(a)(5) and (1) of the Act.
5. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
6. The Respondent has not committed other unfair labor
practices as alleged in the complaint.
Upon the foregoing findings of fact, conclusions of law, and
the entire record , and pursuant to Section 10(c) of the Act,
I hereby issue the following recommended:35
ORDER
Respondent , State Farm Mutual Automobile Insurance
Company, its officers , agents, successors , and assigns, shall:
1. Cease and desist from failing and refusing to supply wage
information to the bargaining representative of its employees;
unilaterally granting merit and promotional increases; failing
and refusing to grant automatic wage increases to bargaining
unit employees as are granted to other employees of the Com-
pany; changing established methods for employee processing
of problems and complaints ; and, in any like or related man-
ner, interfering with , restraining , or coercing employees in
the exercise of rights guaranteed by the Act.
2. Take the following affirmative action which it is found
will effectuate the policies of the Act:
(a) Upon request , supply the Union with information as to
salaries and wages paid to members of the bargaining unit.
(b) Make whole the employees in the appropriate unit by
paying to them amounts of money equal to the wage increases
wrongfully withheld since July 18, 1970.
(c) Preserve and, upon request, make available to the
Board or its agents , for examination and copying , all payroll
records, social security payment records, timecards , person-
nel records and reports , and all other records necessary to
analyze the amount of backpay due under the terms of this
recommended Order.
(d) Post at its Smithtown, Syosset and Westbury, Long
Island, New York, offices copies of the attached notice
marked "Appendix." 36 Copies of said notice, on forms pro-
vided by the Regional Director for Region 29, after being
duly signed by the Respondent 's representative, shall be
posted by Respondent immediately upon receipt thereof, and
be maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
" In the event no exceptions are filed as provided by Section 102 46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions , and recommended Order herein shall, as provided in
Section 102 .48 of the Rules and Regulations , be adopted by the Board and
become its findings, conclusions, and order, and all objections thereto shall
be deemed waived for all purposes
36 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 be changed to read "POSTED PURSUANT TO A JUDGMENT OF
THE UNITED STATES COURT OF APPEALS ENFORCING AN OR-
DER OF THE NATIONAL LABOR RELATIONS BOARD "
STATE FARM MUTUAL AUTO INSURANCE CO.
taken by Respondent to insure that said notices are not al-
tered, defaced, or covered by any other material.
(e) Notify the Regional Director for Region 29, in writing,
within 20 days from the date of the receipt of this Decision,
what steps the Respondent has taken to comply herewith."
It is further ordered that the complaint be dismissed inso-
far as it alleges unfair labor practices not found herein.
" In the event that this recommended Order is adopted by the Board
after exceptions have been filed, this provision shall be modified to read-
"Notify the Regional Director for Region 29, in writing, within 20 days from
the date of this Order, what steps the Respondent has taken to comply
herewith."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to supply information to the
Union concerning salaries and wages of employees in the
bargaining unit.
WE WILL NOT change established methods by which
employees can take up and discuss their problems and
grievances with management representatives.
WE WILL NOT grant bargaining unit employees merit
and promotional increases without first bargaining with
the Union about them.
895
WE WILL NOT withhold wage increases from mem-
bers of the bargaining unit which are granted to our
other employees.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of your rights
to organize yourself, to form, join, or assist American
Communications Association, Communications Trade
Division, affiliated with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of
America.
WE WILL pay to all members of the bargaining unit
amounts of money equal to the wage increases we
wrongfully withheld from them since July 18, 1970.
Dated By
STATE FARM
MUTUAL AUTOMOBILE
INSURANCE COMPANY
(Employer)
(Representative) (Title)
This is an official notice and must not be defaced by any-
one.
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, Fourth
Floor, 16 Court Street, Brooklyn, New York 11201, Tele-
phone 212-596-3535.