Stone Container Corp.

National Labor Relations Board - Board Decisions

Nov 24, 1993

313 N.L.R.B. 336 (N.L.R.B. 1993)

336
313 NLRB No. 22
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Charging Party has excepted to some of the judge’s credibil-
ity findings. The Board’s established policy is not to overrule an ad-
ministrative law judge’s credibility resolutions unless the clear pre-
ponderance of all the relevant evidence convinces us that they are
incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd.
188 F.2d 362 (3d Cir. 1951). We have carefully examined the record
and find no basis for reversing the findings.
2 Wage increases had also been granted on August 31, 1987, and
January 4, 1988.
3 All dates are in 1989 unless otherwise indicated.
4 Subsequently, the Respondent conducted its annual wage and
benefit survey of 15 manufacturing facilities in the Lexington area.
5 The Respondent told the Union that it could not grant the April
increase because the Lexington plant had substantially higher wage
rates than those at other plants in the area and those at the Respond-
ent’s comparable plants; labor costs at Lexington were the highest
in Regional Manager McNeil’s 13-plant region; employees had re-
ceived four wage increases between April 6, 1987, and April 4,
1988, plus wage adjustments to individual job classifications of up
to 13 percent in 1987; and the wage compression rate had gone from
a normal 30 percent to only 16 percent between the highest and low-
est paying jobs.
6 The Respondent presented its wage proposal to the Union at the
April 18 meeting, which called for wage decreases in most job clas-
sifications.
7 Because the Respondent simply made a decision here regarding
the particular wage increase and did not purport to terminate the an-
nual wage review practice, the circumstances here are distinguishable
from those in Daily News of Los Angeles, 304 NLRB 511 (1991),
remanded 979 F.2d 1571 (D.C. Cir. 1992).
Stone Container Corporation and Glass, Pottery,
Plastics and Allied Workers International
Union, AFL–CIO, CLC. Cases 11–CA–13154,
11–CA–13299, 11–CA–13590, and 11–CA–13810
November 24, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On May 20, 1991, Administrative Law Judge H. E.
Lott issued the attached decision. The Charging Party
filed exceptions and a supporting brief, and the Re-
spondent filed an answering brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions
and briefs and has decided to affirm the judge’s rul-
ings, findings,1 and conclusions.
1. In adopting the judge’s recommendation to dis-
miss the allegation that the Respondent violated Sec-
tion 8(a)(5) and (1) of the Act by failing to grant the
annual April wage increase in April 1989 while the
parties were negotiating for a collective-bargaining
agreement, we find this case to be distinguishable from
Bottom Line Enterprises, 302 NLRB 373 (1991). The
Respondent had granted annual wage increases ranging
from 3 to 6 percent to its hourly employees in April
from 1984 to 1988.2 At the February 23, 19893 nego-
tiating session, the Union wanted to discuss the annual
April wage increase, and the Respondent stated that it
would have a proposal in March on the wage in-
crease.4 On March 22, the Union informed the Re-
spondent that it would not protest the granting of a
wage increase in April. On March 23, the parties dis-
cussed the April increase, and the Respondent told the
Union that it could not grant the April wage increase
because of economic reasons.5 The Respondent then
stated that it would have a complete economic pro-
posal for the Union in April.6 The Union made no spe-
cific proposal for an April wage increase and did not
raise the issue again during negotiations.
The judge found that a full discussion occurred over
the April wage increase at the March 23 meeting, and
that the Respondent did not refuse to negotiate. The
judge further found that the Union had an opportunity
to bargain over this issue and declined to pursue it fur-
ther. The judge thus concluded that the Respondent did
all that was required under Section 8(a)(5), and rec-
ommended dismissal of the 8(a)(5) and (1) allegation.
Bottom Line Enterprises, above, stands for the prop-
osition that when parties are engaged in negotiations
for a collective-bargaining agreement, an employer’s
obligation to refrain from unilaterally discontinuing an
established practice extends beyond the mere duty to
give notice and an opportunity to bargain; rather, ex-
cept for certain circumstances not present here, it en-
compasses a duty to refrain from implementation at all,
unless and until an overall impasse has been reached
on bargaining for the agreement as a whole. In Bottom
Line Enterprises, the employer unilaterally discon-
tinued its contributions to the union’s health and wel-
fare and pension trust funds; thus, the employer’s uni-
lateral implementation concerned a proposal which was
one of the subjects that was part of the negotiations for
an overall agreement. Such a proposal differs signifi-
cantly from a proposal concerning a discrete event,
such as an annually scheduled wage review like the
one in the instant case, that simply happens to occur
while contract negotiations are in progress. We note
that it is not disputed that the April wage increases
here were annually occurring events, and thus bargain-
ing over the amount of such increases could not await
an impasse in overall negotiations. Further, the Re-
spondent was not proposing to permanently abandon
the April wage increases7 nor declining to bargain over
how much of an increase, if any, it should give in
April 1989. Rather, the Respondent expressed its will-
ingness to discuss the subject, conducted its ‘‘annual
wage and benefit survey,’’ and proposed giving no
wage increase because, in its view, financial cir-
cumstances did not justify one at that time. Further,
while the Respondent made its proposal in time for
bargaining over the matter if the Union wished to bar-
gain, the Union made no counterproposal concerning
the April wage increase, and did not raise the issue
again during negotiations. Thus, we find that the Re-
337STONE CONTAINER CORP.
8 We do not agree with our dissenting colleague that a preference
for individualized awards, as distinguished from group awards, nec-
essarily indicates animosity toward the exercise of Sec. 7 rights.
9 Litton Systems, 300 NLRB 324 (1990), cited by our dissenting
colleague, involved an ‘‘extra paid half hour for lunch on the day
before the Christmas holiday.’’ See above at 331 fn. 34. In essence,
employees were to receive a wage increase for that day. Clearly,
wages are a mandatory subject of bargaining. The employer’s con-
duct in that case effectively changed a longstanding wage practice.
The instant case does not involve a change of wages.
spondent satisfied its bargaining obligation regarding
the April 1989 wage increase, and we affirm the
judge’s dismissal of the complaint.
2. We also adopt the judge’s finding that the Re-
spondent’s postcertification 1988 discontinuance of
four activities—a company picnic, the safety program,
a $20 Christmas gift certificate, and a Thanksgiving
meal—did not violate Section 8(a)(3) or (5) of the Act.
Regarding the 8(a)(3) allegation, the judge credited the
Respondent’s explanation that it canceled these activi-
ties at a time when the profitability of the plant was
in decline and it decided that some group activities
should be canceled in favor of more individual awards
for good performance. The Respondent has a number
of employee activities which are routinely changed
from time to time. When the Respondent canceled
these four activities, it substituted others. We also note
that these activities were canceled for unit and nonunit
employees alike. At about the same time, the Respond-
ent also eliminated certain other nonemployee activi-
ties, including a meeting and golf outing for sales per-
sonnel at Pinehurst, North Carolina, and a customer
golf outing. Moreover, the discontinuance of the four
activities did not result in a decrease in the overall em-
ployee activities budget, and in fact that budget in-
creased from 1988 to 1990. But unlike our dissenting
colleague, we find no indication of discriminatory in-
tent in that fact. Rather, most of the budget for 1988
had been spent in the first half of that year, so the Re-
spondent essentially held the line on 1988 expenses by
its cancellation of certain of these activities. Thereafter,
it committed itself to different activities than those
canceled, and shifted its emphasis from group events
to individual awards. In the circumstances of this case,
we cannot find a discriminatory intent in these actions.
Indeed, other than the timing of these cancellations as
one element of possible discriminatory intent, the cred-
ited facts do not establish that the cancellation of these
four particular employee activities violated Section
8(a)(3) of the Act, and thus we affirm the judge’s dis-
missal in that regard.8
We further agree with the judge’s dismissal of the
8(a)(5) allegation regarding the elimination of these ac-
tivities. As the judge found, the company picnic, the
Christmas gift certificate, and the Thanksgiving dinner
were not related to any performance or production
standards, and thus were gifts rather than terms and
conditions of employment. See Benchmark Industries,
270 NLRB 22 (1984). Thus, the Respondent did not
have to bargain with the Union about their discontinu-
ance. Contrary to our dissenting colleague, the length
of time that certain of these gifts were given by the
Respondent, without more, is insufficient to establish
that they were terms and conditions of employment.
See Benchmark, supra; Harvstone Mfg. Corp., 272
NLRB 939 fn. 1 (1984) (where the gifts had been
given by two of the companies involved for over 10
years, and by one company for 5 years); and Freedom
WLNE-TV, 278 NLRB 1293, 1297 (1986).9
Regarding the safety bonus program, this involved
giving employees donuts, hot dogs, or barbeque
lunches if there were no lost-time accidents for speci-
fied time periods. We adopt the judge’s finding that
awarding this small amount of food did not rise to the
level of a benefit or compensation that required bar-
gaining.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
CHAIRMAN STEPHENS, dissenting in part.
I disagree with my colleagues in the majority on one
point. I would reverse the judge’s dismissal of the alle-
gations that the Respondent violated both Section
8(a)(3) and (5) when, after the union victory in June
1988, it unilaterally, and without prior notice and an
opportunity to bargain, canceled the employee summer
picnic, the catered Thanksgiving dinner, the safety
bonus program (consisting of snacks and meals of
varying levels of value provided to all the employees
if the plant went for certain specified lengths of time
without a lost-time accident), and the $20 Christmas
gift certificate. I would predicate the 8(a)(3) violation
on all four cancellations, and would find a violation of
Section 8(a)(5) on the cancellations of all but the
Christmas gift certificate.
The judge dismissed the 8(a)(3) allegation in part
because he accepted the Respondent’s argument that
the four benefits were canceled out of ‘‘economic ne-
cessity.’’ But the economic necessity argument was
contradicted by two other arguments of the Respond-
ent, namely that it had actually increased its employee
activity budget in 1988 and 1989, and that cancellation
of these four benefits simply reflected its regional
manager’s preference for ‘‘individual awards for good
performance’’ as opposed to employer-subsidized
‘‘group activities.’’
That declared preference in fact points up the mes-
sage the Respondent was sending the employees after
their concerted activity resulted in the election of a
union to represent their collective interests. Voting for
the Union cost them benefits that innured to the
338 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
group—such as the summer picnic that had been an-
nounced before the election but that was canceled soon
afterwards. The ‘‘individual awards’’ that the Respond-
ent tells us its management instituted in place of the
canceled group benefits would of course be largesse
dispensed to individuals of management’s choosing.
The Respondent, relying on Benchmark Industries,
270 NLRB 22 (1984), also successfully argued to the
judge that the benefits were not sufficiently regular and
substantial to constitute ‘‘terms and conditions of em-
ployment’’ for the purpose of sustaining a violation of
either Section 8(a)(3) or (5). I would agree that the
Christmas gift certificate—given at most only twice in
the past—might not meet the Benchmark test. But the
safety bonus program (a regular practice since 1984),
the catered Thanksgiving dinner (a fixture of 19 years
standing), and the picnic (which the employees had en-
joyed during at least the previous 3 years and were
promised for a fourth year, before the election inter-
vened) were sufficiently a part of the employees’ rea-
sonable expectations to constitute conditions of em-
ployment. Litton Systems, 300 NLRB 324, 331 fn. 34
(1990) (paid holiday lunch given before either Christ-
mas or Thanksgiving for 4 years deemed a condition
of employment).
Furthermore, where the 8(a)(3) violation is con-
cerned, the pattern of the cancellation of benefits is
significant: it began soon after the election with the
picnic, and came to the employees’ attention again at
Thanksgiving and Christmas, and whenever their over-
all safety record was such that they would have re-
ceived an award if the safety bonus program were still
in effect. Given the timing and the Respondent’s
claimed reasons, as discussed above, I would infer that
the Respondent was motivated by the union election in
canceling these benefits, and I believe that the employ-
ees were likely to draw the same inference.
Finally, I believe that message was sufficiently po-
tent to undermine employee support for the Union. On
this ground, I would find that the Respondent could
not rely on the employee union-repudiation petitions as
a basis for withdrawing its recognition of the Union as
the employees’ collective-bargaining representative.
Paris Favors Jr., Esq., for the General Counsel.
Stewart M. Vaughn Jr. and C. Matthew Keen, Esqs.
(Ogletree, Deakins, Nash, Smoak & Stewart), of Raleigh,
North Carolina, for the Respondent.
Richard Schall, Esq. (Tomar, Simonoff, Adourian &
O’Brien), of Haddonfield, New Jersey, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
H. E. LOTT, Administrative Law Judge. This case was
heard at Winston-Salem, North Carolina, on June 4, 5, and
6, 1990, on unfair labor practice charges and amended
charges filed from January 26, 1989, to April 16, 1990,
against Stone Container Corporation (Respondent) by Glass,
Pottery, Plastics and Allied Workers International Union,
AFL–CIO, CLC (Union) alleging violations of Section
8(a)(1), (3), and (5) of the Act.
Respondent’s answer to the complaint, duly filed, denies
the commission of any unfair labor practices.
The parties were afforded and opportunity to be heard, to
call, to examine and cross-examine witnesses, and to intro-
duce relevant evidence. Since the close of hearing briefs
have been received from the parties.
The issues in this case are whether or not Respondent
threatened an employee in violation of Section 8(a)(1) and
discriminatorily withheld an assignment from another em-
ployee in violation of Section 8(a)(3) of the Act. Also at
issue is whether or not Respondent eliminated certain
gifts/benefits and discontinued the annual wage increase in
violation of Section 8(a)(1), (3), and (5) of the Act. Bad-faith
bargaining is at issue over whether or not Respondent vio-
lated Section 8(a)(5) of the Act by failing to provide an eco-
nomic counterproposal until April 18, 1989, by refusing to
meet at reasonable times and by presenting a concessionary
wage proposal on April 18, 1989. The final issue relates to
whether Respondent had a good-faith doubt when it with-
drew union recognition in April 1990.
On the entire record and based on my observation of the
demeanor of the witnesses, and in consideration of the briefs
submitted, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Company is an Illinois corporation with a plant lo-
cated in Lexington, North Carolina, where it is engaged in
the manufacture of corrugated boxes and containers. During
the past 12 months, Respondent received at its Lexington,
North Carolina factory goods and raw materials valued in ex-
cess of $50,000 directly to points outside the State of North
Carolina. During the same period Respondent shipped from
its Lexington, North Carolina factory products valued in ex-
cess of $50,000 directly to points outside the State of North
Carolina.
Respondent admits, and I find, that it is an employer en-
gaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act. Respondent further admits, and I find that
the Glass, Pottery, Plastics and Allied Workers International
Union, AFL–CIO, CLC is a labor organization within the
meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Background
On April 22, 1987, the Union filed a petition for an elec-
tion among the production and maintenance employees at the
Stone Container plant in Lexington, North Carolina. On May
22, 1987, the Region directed an election in a unit of:
All production and maintenance employees, includ-
ing shipping and warehouse employees, employed by
the Employer at its Lexington, North Carolina, plant
and the checker loader at its Forest City, North Caro-
lina warehouse, excluding all salaried employees, office
339STONE CONTAINER CORP.
1 All dates hereinafter refer to 1989 unless otherwise indicated.
clerical employees, guards and supervisors as defined in
the Act.
On June 18, 1987, an election was held and the Union
filed objections. A second election was agreed on and held
on June 23, 1988. The Union was certified on July 1, 1988.
There are 160 employees at the Lexington plant of which
119 are unit employees. Respondent has 180 plants in the
United States, of which, 120 are unionized. The chief nego-
tiator for the Company is William Barr and for the Union
is Joseph Pitts.
B. Alleged Threats to Eric Rowland
Employee Eric Rowland testified that on October 20,
1989,1 Regional Manager Eric McNeill was walking through
the printing department when he noticed Rowland’s union
button. McNeill lifted the button and asked him what it was
and whether the Union was going to give him another elec-
tion. Rowland asked McNeill whether he would settle the
charges the Union had against him. McNeill said he couldn’t
comment on that without getting in trouble. Rowland said the
Union could help him and the employees. McNeill disagreed.
Rowland said the Union could help with job security.
McNeill responded by saying that he could fire Rowland or
any other employee and there was nothing the Union or
Labor Board could do. No employee that was a good worker
had ever been fired. Rowland stated that if the employees
stayed together, they could force him to give him what was
theirs. McNeill said they could never force him to do ‘‘any
damn thing.’’ Rowland said what he meant is they could in-
fluence the decision-making process at negotiating time.
McNeill stated that the only way to gain his respect would
be to go on strike and any man who does that will be perma-
nently replaced and never work there again. On October 23
McNeill told Rowland there was an ugly rumor going around
about them. Rowland accused McNeill of tugging at his
union button. McNeill denied it. Rowland said that wasn’t
his main concern. What concerned him was McNeill’s re-
mark that any man who went on strike would be permanently
replaced. McNeill said he meant that.
Employee Steve Weaver testified that although he didn’t
hear any part of the above conversation, he saw McNeill tug-
ging on Rowland’s union button.
Respondent’s Harold McNeill testified that he saw Row-
land with a ‘‘vote yes’’ union button on his shirt. He pointed
to the button and asked Rowland whether that meant they
were going to have another election. Rowland said he didn’t
think so. Rowland said he wanted to tell McNeill why he
was for the Union. McNeill said fine, but, ‘‘I am not asking
you.’’ Rowland explained that he was for the little man and
job security. McNeill asked him if he knew anyone that was
ever discharged for doing a good job. Rowland could think
of no one and stated that if they didn’t get job security, they
would have to strike. McNeill said that they could go on
strike if they wanted to, but Stone policy requires that the
plant stay open even if it meant bringing employees from
other plants. On October 23, McNeill told Rowland that
Rowland was telling employees that McNeill pulled his
union button. Rowland said he thought he did. McNeill said,
‘‘You know doggone well I didn’t pull your union button.’’
McNeill denied saying that he could fire employees and there
was nothing the Union or Labor Board could do. He denied
using the word ‘‘permanently,’’ but said he used the word
‘‘replaced.’’ He denied stating that replacement employees
would never work at the plant again.
Analysis and conclusions
I credit McNeill’s testimony because he was a much more
credible witness than Rowland whose language testimony
was uncorroborated. Accordingly, I do not find a violation of
Section 8(a)(1) and will recommend dismissal of this allega-
tion.
C. Alleged Discrimination Against Ulysses Ashe
Ashe is a forklift operator in the finishing department. He
was also a leadman whose duties included substituting for
Supervisor Houston Bennett whenever Bennett was absent
from work. Ashe is vice president of the Union and a mem-
ber of the Union’s negotiating committee who participated in
all negotiating sessions. On April 28 all the supervisors went
on a fishing trip; however, Billy Cotton, who is also in the
Union substituted for Bennett that day instead of Ashe, who
testified that he lost 57 cents per hour or $4.56 for the day.
Employee Jerry Summerlin testified that he was a new em-
ployee working on second shift where Ulysses Ashe is
leadman. During April Ashe approached him and said that he
should join the Union, that things would go easier on him
if he did. At various other times Summerlin testified that
Ashe assigned him to a hard job as corrugator and later said
that if he joined the Union, that might not happen again. Ac-
cording to Summerlin, Ashe said that management had better
‘‘get his ass’’ out of there or he would take care of it. Fi-
nally, he told Summerlin that he was like a scab and would
eventually get rubbed off.
After about a week of this, Summerlin went to Plant Su-
perintendent Boyd Delk who referred him to General Man-
ager Tom Cadden who asked Summerlin for a signed state-
ment of events. Summerlin gave a statement on April 18.
The management committee confronted Ashe with
Summerlin’s allegations at the April 17 bargaining session.
Ashe denied the allegations. The Company informed the
Union that an investigation would ensue. According to
Cadden, the investigation had not been completed on the day
Ashe didn’t substitute. Cadden testified that Ashe was never
disciplined because of the head-to-head credibility conflict.
After this incident, Ashe continued to substitute for Bennett.
He substituted 72 hours in April and 41 hours in May.
Analysis and conclusions
I find that the Company met its Wright Line burden for
not allowing Ashe to substitute 1 day. Since Summerlin’s
statement and testimony was untainted, I conclude that man-
agement had a reasonable basis for its action. Moreover, no
discipline was ever given to Ashe. Accordingly, I conclude
that the Company did not violate Section 8(a)(3) of the Act,
and I recommend dismissal of this allegation.
D. Unilateral Discontinuance of Parties, Picnics, and
Other Company Benefits/Gifts
Former General Manager Dallas Newsome, who was
forced to resign, established certain employee activities:
340 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Company picnic for all employees was held from 1985
until 1988 when it was canceled by acting General Manager
Harold McNeill.
Safety awards—since 1984 safety awards were given to all
employees. If the plant went without a lost-time accident for
1 month, employees were given donuts and coffee; for 3
months, hot dog lunch; for 6 months, catered barbecue meal.
These awards were discontinued in 1988 by McNeill.
Christmas party—prior to 1986, the Company held two
Christmas parties, one for all employees and one for salaried
employees. In 1986 Newsome canceled the salaried party and
substituted a $20 gift certificate for groceries. The Christmas
party for all employees is still held every year with personal-
ized gifts for employees’ children. In 1988 McNeill discon-
tinued the $20 gift certificate which apparently was given
only once.
Thanksgiving meal—a catered Thanksgiving meal had
been given to all employees for 19 years. In November 1988,
Respondent discontinued this practice.
Harold McNeill testified that when he took over as general
manager, the profitability at the Lexington plant was declin-
ing and the former manager was over budget on employee
activities. Thomas Cadden felt that some group activities
should be canceled in favor of more individual awards for
good performance. Therefore, Respondent canceled the above
activities without bargaining with the Union and other activi-
ties were substituted for these canceled activities without
union objection. At the same time, a sales meeting scheduled
for Pinehurst in July and a customer outing scheduled for
August at Bermuda Run were also canceled at a savings of
$15,000.
There are approximately 30 employee activities in exist-
ence with a current budget of $41,500. The budget for 1988
was $30,000 with actual expenses of $39,136.
Analysis and conclusions
The evidence is clear that the picnic, gift certificate, and
Thanksgiving dinner are not related to any performance or
production standards, Benchmark Industries, 270 NLRB 22
(1984), and are merely gifts. On the other hand, the safety
meals were based on performance, i.e., no lost-time acci-
dents. However, I view hotdogs, donuts, and barbecue
lunches as not rising to the level of a benefit or compensa-
tion which would mandate bargaining. I find that the small
amount of food given is not significant enough to require
bargaining because it would not effectuate the purposes and
policies of the Act.
Accordingly, I will recommend dismissal of these 8(a)(5)
allegations.
General Counsel argues that discontinuance of these gifts
is also a violation of Section 8(a)(3) of the Act because it
occurred after the Union was certified and during negotia-
tions. I find that the Company satisfied its Wright Line bur-
den by presenting undisputed evidence of economic neces-
sity. It also gave reasonable explanations for favoring indi-
vidual awards over group gifts. Of noteworthy consideration
is the fact the elimination of these activities applied to sala-
ried as well as all hourly employees. Accordingly, I rec-
ommend dismissal of the 8(a)(3) allegations.
E. Elimination of the Annual Wage Increase
It was stipulated that hourly employees at the Lexington
plant received the following wage increases:
4–28–4 6%
4–1–85 5%
4–7–86 4%
4–6–87 3%
8–31–87* 3%
1–4–88 2%
4–4–88 3%
* Wage adjustments to individuals jobs as high as
13% were also made between 4–6–87 and 8–31–87.
It was further stipulated that Respondent did not grant an
April 1989 increase at a time when the Union was the collec-
tive-bargaining representative of its employees.
On March 22, the Union sent a telegram to the Company
stating that it would not protest the granting of a wage in-
crease in April. However, prior to this, in February the
Union wanted to discuss the annual wage increase. William
Barr said that he would have something for them in March.
In the interim, the Company conducted its annual wage and
benefit survey of 15 manufacturing facilities in the Lexington
area.
On March 23 the parties met and discussed the April wage
increase. Barr told Joseph Pitts that the Company could not
grant an annual wage increase because:
1. Stone Container in Lexington had substantially
higher wage rates in the area based upon their wage
survey.
2. Labor costs at the Lexington plant were the high-
est in McNeill’s 13 plant region.
3. Employees had received four wage increases be-
tween April 6, 1987 and April 4, 1988, plus wage ad-
justments in 1987 to individual job classifications of up
to 13%. That Dallas Newsome had used poor judge-
ment in recommending these increases and was termi-
nated in March 1988 because of the plant’s poor per-
formance.
4. The 13% adjustments in the lower paying jobs had
caused the wage compression rate to go from a normal
30% to 16% between the highest and lowest paying
jobs.
5. The wage rates at Lexington were higher than
comparable Stone plants. Management compared the
Lexington plant with their other plants in Richmond,
Virginia and Birmingham, Alabama because they had
similar products, jobs and customers. Additionally, all
three were former Champion and Horner-Waldorf fa-
cilities.
After this discussion the Company informed the Union
that it could not give a wage increase in April, but would
have a complete economic proposal for the Union that
month. The Union made no specific proposal for a wage in-
crease nor did it bring up the issue again during negotiations.
Analysis and conclusions
The undisputed evidence indicates that the April wage in-
crease first came up in February. Then on March 23 a full
discussion between the parties took place over that issue. It
341STONE CONTAINER CORP.
appears that since the Union had an opportunity to bargain
over this issue and declined to pursue it further, the Com-
pany did all that was required under Section 8(a)(5) of the
Act.
In summary, the evidence supports a finding that the Com-
pany did not refuse to negotiate over the April increase. Ac-
cordingly, I recommend dismissal of the 8(a)(5) allegation.
Addressing the 8(a)(3) allegation, there is ample evidence
that the Company met its Wright Line burden of establishing
that it would not have given a wage increase, notwithstand-
ing the presence of the Union. It is undenied that the Com-
pany gave the Union many economic reasons why a wage
increase was inappropriate. These reasons also dissipated any
discriminatory motive. Accordingly, I recommend dismissing
this 8(a)(3) allegation.
F. Alleged Bad-Faith Bargaining
At the beginning of negotiations, the parties agreed on cer-
tain ground rules. One rule was that there would be no over-
all agreement on a contract until agreement was reached on
all items. The other relevant rule was that contract language
would be negotiated first before moving to economics.
The parties met a total of 17 times for close to 100 hours.
The Company and Union agreed to meet once in August,
once in October, and once in November because Barr was
involved in contract negotiations at other plants. McNeill was
also busy with the transition of various plants in and out of
his area and the Company needed time to prepare its counter-
proposal. These conflicts were explained to the Union and
Pitts did not object. In November 1988 and January, Pitts
wanted more meetings; however, the Company explained that
it would be difficult because of the holidays. In January and
thereafter more sessions were held. The parties met once in
November, three times in January, and twice each month
from February to June.
The Union gave its initial proposal on August 16, 1988.
It was not a complete proposal but did have a wage package
of 8.5 percent for the first year, 7.9 percent for the second
year, and 7.3 percent for the third year. Pitts wanted in-
creased pensions, more holidays, and vacation. He also want-
ed to eliminate employee contributions on all insurance. He
testified that he didn’t expect the Company to accept this
economic proposal.
From August 1988 to January, the parties made proposals,
counterproposals, made language changes, and reached
agreement on many provisions of the contract.
On February 23, the Union asked the Company for an eco-
nomic proposal. The Company stated it would have a pro-
posal on the annual April increase in March. On March 23,
most of the language items had been agreed on. Lines of
progression was the only major language item remaining. At
that time Barr told Pitts the Company would present a com-
prehensive economic proposal at their next meeting.
On April 18, the Company presented its wage proposal
which called for wage decreases in most job classifications.
The wage rates were derived by averaging the wage rates of
each job classification at the Lexington, Richmond, and Bir-
mingham plants. The proposal, according to Barr, was de-
signed to restructure wage rates at the Lexington plant so
they were more in line with other similar Stone plants and
area wages. Reasons, which were essentially the same as
those given for denying the April increase, were discussed at
length and the Union rejected the Company’s proposal. On
May 2 and 16, the Company made wage proposals which
contained higher rates and benefits than their previous pro-
posal. The Union rejected these proposals and made counter-
proposals. On June 1 the Company increased its wage pro-
posal over all other proposals and the Union rejected this
offer and proposed 42 cents for the first year and a 4.3-per-
cent increase for the second year. This was rejected by the
Company. At this meeting the only language item open was
lines of progression which requires employees to move up to
the next higher position. The Company agreed to ‘‘redline’’
all current employees for 1 year. According to McNeill, Pitts
stated that since they agreed on almost everything but wages,
it was time for the Company to submit a final offer. The
Company agreed.
On June 2 the Company made a final economic proposal
which amounted to a 1-percent decrease in present wage lev-
els. This wage proposal was derived from averaging the
higher job classification rate of the Richmond or Bir-
mingham plants with the Lexington rate and the rate at the
Nekoosa plant which is geographically close to Lexington
and a competitor of Stone for labor. The proposal also raised
the Company’s pension contribution from $11 to $12 as
agreed and sickness and accident insurance contributions
from $130 to $135. The Union rejected this offer because of
the wage rates.
The parties did not schedule another meeting until Pitts
contacted Barr in September for a meeting. The parties
agreed to meet on September 18. At this meeting the parties
had each prepared a memorandum of open and agreed to
items. The Union proposed a wage increase of 42 cents an
hour for the first year and a 4-percent increase for the second
year, vacations—5 weeks after 20 years, A&S, $145, pension
first year $l increase, second year $1 increase, 2-year con-
tract and a drug testing proposal. The Company rejected this
offer and countered with a 1-year freeze on wages and
agreed to red-circle employees on lines of progression. The
Union rejected this offer and no further meetings were
scheduled.
Analysis and conclusions
There is very little dispute over most of the facts; how-
ever, where there is a conflict, I credit the Company’s chief
negotiator, William Barr, because he kept copious notes of
every negotiation session and was corroborated by Harold
McNeill and Thomas Cadden who were reliable witnesses.
It should be noted at the outset that the complaint does not
allege surface bargaining and it is very specific on the al-
leged violations. For example, the complaint only alleges that
the Company’s initial proposal on April 19 violated Section
8(a)(5) and it does not mention contract duration.
With this in mind and the fact that these were initial con-
tract negotiations, I find that the Company bargained in good
faith on everything that was not alleged to be a violation in
the complaint, i.e., everything but the initial concessionary
wage proposal. Moreover, the evidence supports this finding.
The Company’s initial wage proposal was made on April
19. I find that based on the evidence presented, this was not
an unreasonable delay. The parties agreed that language
agreements should come first and they made substantive
progress in this area every time they met. In February, the
Union wanted to discuss economics, but Pitts also wanted to
342 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
discuss the annual wage increase which took up most of the
March 23 meeting. In March most of the language issues had
been resolved and the Company agreed to present its eco-
nomic proposal in April. The first April meeting was taken
up with the Ulysses Ashe incident and delayed the Compa-
ny’s proposal by 1 day. After its initial economic proposal,
the Company made many proposals and the evidence indi-
cates that the Union had no difficulty with those proposals,
with the exception of wages, which I find was the only real
issue preventing the parties from reaching agreement.
It should also be noted that in negotiations, initial wage
proposals do not mean much. In fact the Union’s initial pro-
posal, which Pitts conceded would not be accepted, could be
labeled as not justified under the circumstances. However,
there was one difference between the two proposals. The
Company gave lengthy valid economic factors for its initial
proposal and the Union didn’t, except to say that the employ-
ees hadn’t had a wage increase since April 4, 1988. There-
fore, I find that the initial company proposal was made at a
reasonable time and was accompanied by valid economic
reasons for wage concessions.
General Counsel argues that the parties did not meet often
enough and this delayed the negotiating process. I find that
the Union did not object to the 1988 meeting dates. When
the Union finally protested, the frequency of meetings in-
creased but not for that reason alone. I further find that the
frequency of meetings did not impede progress because
progress was made at every meeting held. It has been held
by the Board that it is not the frequency of the meetings
alone that is determinative but what transpired and what was
accomplished at these meetings that is important. I find this
principle applicable here. Moreover, it is clear that the Com-
pany has had considerable experience negotiating contracts
with unions and is not opposed to the principle of collective
bargaining since it has 120 plants under union contract. Barr
alone negotiated five collective-bargaining agreements in
1988 and six more in 1989. His pattern of bargaining over
the years has been to meet two times a month and only in-
crease the frequency during the week of contract expiration.
I can find nothing wrong with that approach since good-faith
bargaining and progress took place at each session.
Accordingly, I will recommend dismissal of these 8(a)(5)
allegations.
G. Refusal to Recognize the Union
On March 28 and April 1, 1990, General Manager Thomas
Cadden received a petition signed and dated from March 7,
1990, to April 1, 1990, by 84 employees who stated that they
no longer wanted to be represented by the Union. There were
119 hourly employees on roll as of April 1, 1990. Cadden
testified that he and his personnel administrator verified the
signatures by comparing the petition signatures with signa-
tures on employment applications. After verifying the signa-
tures, Cadden notified Pitts by letter dated April 2, 1990, that
the Company had a good-faith doubt, based on objective
considerations that the Union represents a majority of the
employees in the bargaining unit and withdrew recognition.
Analysis and conclusions
General Counsel does not dispute the validity of the signa-
tures or the petitions or that a majority of employees signed
them. His argument is based on well established Board law
that an employer cannot withdraw recognition of a union
based on disaffection which was caused by the employer. He
argues that Respondent’s unfair labor practices caused em-
ployees to sign the petitions which are the basis for Respond-
ent’s withdrawal of recognition. Thus, the withdrawal of rec-
ognition is a violation of Section 8(a)(5) of the Act.
Since I have found no unfair labor practices committed by
Respondent, I also find Respondent’s withdrawal of recogni-
tion is not a violation of Section 8(a)(5) of the Act and will
recommend dismissal of this allegation.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. Respondent has not engaged in any violations of Sec-
tion 8(a)(1), (3), and (5) of the Act.
4. The following unit constitutes a unit appropriate for col-
lective bargaining within the meaning of Section 9(b) of the
Act:
All production and maintenance employees, includ-
ing shipping and warehouse employees, employed by
the Employer at its Lexington, North Carolina, plant
and the checker loader at its Forest City, North Caro-
lina warehouse, excluding all salaried employees, office
clerical employees, guards and supervisors as defined in
the Act.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended2
ORDER
The complaint is dismissed.