United Stockyards Corp.

National Labor Relations Board - Board Decisions

Feb 28, 1989

293 N.L.R.B. 1 (N.L.R.B. 1989)

UNITED STOCKYARDS CORP
Sioux City Stockyards, Division of United Stock-
yards Corporation and United Food and Com-
mercial Workers International Union, AFL-
CIO, Local No 176 Case 18-CA-10063
February 28, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND HIGGINS
On June 28 , 1988, Administrative Law Judge
William L Schmidt issued the attached decision
The General Counsel filed exceptions and a sup-
porting brief, and the Respondent filed a brief in
answer to the General Counsel 's exceptions
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three
member panel
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge 's rulings , findings, and
conclusions only to the extent consistent with this
Decision and Order
The judge found that the Respondent did not
violate Section 8(a)(5) and ( 1) of the Act by deny-
ing the Union's request for certain financial infor-
mation , and by thereafter unilaterally changing its
employees ' terms and conditions of employment
after declaring an impasse in its negotiations with
the Union The General Counsel has excepted to
these findings We find merit in the exceptions 1
The question of whether the Respondent here
was obligated to furnish the Union with the re-
quested information turns on whether the Respond-
ent, either through words or conduct , conveyed to
the Union during negotiations that its proposal to
eliminate the guaranteed workweek benefit for em-
ployees was based on its financial inability to con-
tinue providing the benefit If the Respondent's
proposal was based on a claimed inability to pay,
then the Union was entitled to the information re
quested NLRB v Truitt Mfg Co, 351 US 149
(1956), Atlanta Hilton & Tower, 271 NLRB 1600
(1984)
The Respondent asserts , and the judge found,
that the proposal to eliminate the guaranteed 5 day
workweek was based on efficiency considerations
and not on a claim of inability to pay , and that it
was, therefore , under no obligation to furnish the
Union with the information requested The record,
however , does not support such a finding Rather,
the Respondent 's conduct at the bargaining table,
when viewed in its entirety , shows that the Re-
i In % ew of our decision here we find it unnecessary to pass on the
judge s remarks in fn 2 of his decision concerning the possible applica
tion of the Equal Access to Justice Act to the facts of this case
I
spondent sought to justify its contract proposal to
eliminate the workweek guarantee by a claim of fi-
nancial hardship
The record reveals that on December 12, 1986,
prior to the expiration of their contract on January
25, 1987,2 the Respondent and the Union began ne-
gotiations for a new contract 3 At that first bar-
gaining session , the Respondent's attorney and
principal negotiator, Soren Jensen,4 informed
Union Representative Frank Jackson that the Re-
spondent would not sign any more agreements con
taming a guaranteed workweek, a benefit available
to employees under their still-current agreement 5
According to Jackson, Jensen sought to justify the
contract demands by stating that the livestock mar-
kets were down and that the Respondent was
"losing money not making any money "s Fol-
lowing that meeting, Jensen provided Jackson with
the Respondent's written contract proposals that
incorporated the above-proposed changes
At the January 12 bargaining session Jackson in-
formed Jensen that the Union needed proof that
the Respondent was losing money in light of its
demand for the elimination of the guaranteed
workweek and the attendant effect it would have
on other employee benefits Jackson then handed
Jensen a letter requesting specific financial informa-
tion from the Respondent 7 Jensen replied that
2 All dates are in 1987 unless otherwise indicated
' The parties held four additional bargaining sessions on January 12
February 7 and 13 and March 2
4 Jensen had been retained by the Respondent s parent corporation
United Stockyards Corporation to bargain on the Respondent s behalf
during the latter s contract negotiations with the Union as well as on
behalf of other stockyard operations whose employees were represented
by the Union s sister locals
5 The guaranteed workweek provision of the parties contract provided
that an employee scheduled to work at the start of the week was assured
of 40 hours of work that week unless voluntarily absent The guaranteed
workweek affected other employee benefits such as pensions and vaca
tions which were based on the number of hours worked by an employee
Jensen further informed Jackson that the Respondent also wanted to
remove the extensive restrictions in the contract on subcontracting and
the performance of unit work by supervisors
6 According to Jackson Jensen repeated this claim throughout the ne
gotiations Jensen denied having made the losing money statements at
tnbuted to him by Jackson or having defended the proposals on the
ground that the Respondent was in a diminished financial condition
pleading poverty losing profits or in danger of going out of business or
bankrupt The judge implicitly credited Jackson s testimony that Jensen
made the remarks for he found that Jensen s statements that the Sioux
City operation was unprofitable or was losing money cannot be read lit
erally
r The Union requested that the Respondent furnish it with the follow
mg information for the previous 3 years Federal income tax returns and
audit reports (including balance sheets income statements and changes in
financial position) and any other documents books and records that
would separately show ( 1) the total bargaining unit labor costs and the
cost of nonbargaining unit labor including supervisory and other man
agement salary and benefits (2) total income from sales or fees (3) over
head and other administrative costs and (4) interest on financial charges
293 NLRB No 1
2 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
while the Respondent was willing to provide the
Union with some information, it would not "open
its books" to the Union, as Jensen believed would
be required by the information request Jensen also
stated that the Respondent was not pleading pover
ty or going bankrupt, but that because of reduced
livestock receipts, its Sioux City Stockyard oper-
ation was not profitable He further indicated that
the Respondent did not believe it was wise to pro-
vide any pay increases
Jensen formally replied to the Union's informa
tion request by letter dated January 15 In the
letter he expressed the Respondent's willingness to
provide the Union only with information pertaining
to payroll and other costs associated with the bar
gaining unit members He declined, however, to
provide the Union with the other requested infor-
mation because the Respondent did not consider
the information to be either appropriate or neces-
sary for collective bargaining, and because the Re
spondent allegedly had not "pled poverty" or
sought any special treatment from the Union con-
cerning the stockyard operation The letter repeat-
ed Jensen's claim that the Sioux City stockyard op-
eration was unprofitable
At the February 7 bargaining session the Re-
spondent's president, Donald Bales, told the Union
that if the status quo were maintained, the Re-
spondent would not be able to maintain 28 people
on the payroll," pay its taxes, and maintain the
upkeep on the stockyards During this session,
Jensen advised the Union that the Respondent's po
sition on the guarantee would not change even if a
strike should occur, and that the Respondent was
making money only on real estate investments
Jackson remarked that he wished he could believe
the Respondent was in "that bad of shape "
During the February 13 meeting, Jackson in-
formed Jensen that he had read the Respondent's
annual report and that the figures indicated the Re
spondent could operate with a guarantee Jensen
replied that the Respondent would no longer oper-
ate in that manner Following discussion over the
hours needed by employees to obtain benefits,
Jackson remarked that the Respondent's proposal
was worse than he thought Jensen replied that the
condition of the business was worse than he
thought and stated that "we have to go out of busi-
ness or change the way we're doing business "9
In support of his finding that the Respondent's
proposal to eliminate the guaranteed workweek
was not based on a plea of poverty, the judge
relied, for the most part, on the fact that the Re-
spondent's parent corporation, United Stockyards
Corporation, was a profitable operation, which
would have rendered an alleged claim of poverty
by the Respondent indefensible, that Jackson was
fully aware of United's profitability, that it was
United that proposed elimination of the guaranteed
workweek, and that the Respondent had repeatedly
asserted that it was not pleading poverty In this
regard, Bales' remarks, which the judge found
"troubling," were accorded little weight by the
judge because he found they were inconsistent
with United's overall financial picture at that time
The judge, in our view, erred in his finding con
cerning Bales ' remarks, and in relying on United's
corporate profitability to conclude that no plea of
poverty was made by the Respondent As to Bales'
remarks, the record and, in particular, the hand-
written notes that were received in evidence con-
taining statements made during bargaining sessions
indicate that Bales was referring to the financial
condition of the Respondent, and not its parent
corporation, when he made his remarks Further,
although Jensen may have been sent by United to
negotiate on the Respondent's behalf, it is the Re-
spondent, and not United, that has the collective-
bargaining relationship with the Union, and who
would be bound to any agreement reached with
the Union 10 It is the Respondent's financial condi-
tion, and not United's that, as found below, was
placed in issue by the remarks made by both
Jensen and Bales during contract negotiations 11
Under these circumstances, we find, contrary to
the judge, that United's corporate profitability is of
little or no relevance here, and that Bales ' remarks
are indeed relevant to the question whether the Re-
spondent asserted an inability to pay during con
tract negotiations
Further, despite the Respondent's contrary asser-
tions, it is clear from the above that the Respond
ent repeatedly attempted to portray to the Union
that its stockyard operation was in a poor financial
state The Board has stated that no "magic words"
are needed to find that a claim of financial hardship
is being invoked by an employer concerning its
8 There were 28 unit employees then employed at the Respondent s
stockyards
8 On March 11 Bales informed the Union that the Respondent be
heved that an impasse in negotiations existed and that on March 16 it
would implement the terms and conditions proposed by the Respondent
in the negotiations On March 16 the Respondent implemented its pro
posals By letter dated March 20 the Union protested the Respondents
declaration of impasse
10 See Teleprompter Corp 227 NLRB 705 (1977) enfd 570 F 2d 4 (1st
Cir 1977)
" Further the fact that the proposal to eliminate the workweek guar
antee may have been initiated by United rather than by the Respondent
is in our view of no consequence here It is the Respondent that repeat
edly sought to justify its need to eliminate that benefit for its unit em
ployees by relying on the allegedly poor financial condition of its stock
yard operation
UNITED STOCKYARDS CORP
bargaining stance 12 It is sufficient if the employ-
er's words and conduct specifically link its bargain-
ing position to economic hardship Here, the state-
ments by Jensen and Bales were made concerning
their insistence that the workweek guarantee be
eliminated Further, their comments-in particular
Jensen's repeated remarks that the Respondent was
losing money, not making any money, that the con-
dition of the business was worse than anticipated,
and that it would go out of business unless changes
were made, together with Bales' remark that under
the status quo the Respondent would not bo able to
maintain the 28 unit employees on the payroll, pay
its taxes, and maintain the upkeep on the stock-
yards-indicate that it was the allegedly poor fi-
nancial condition of its stockyard operation, caused
by a purported decline in livestock receipts, rather
than a claimed need for a more efficient operation,
that formed the basis for the Respondent's demand
to do away with the guaranteed workweek 13
Accordingly, we find that the Respondent, by
linking its contract proposal to the weakened finan-
cial condition of its stockyard operation, was
making a claim of inability to pay and was, there-
fore, obligated under Truitt to furnish the Union
with the requested financial information In failing
to do so, the Respondent violated Section 8(a)(5)
and (1) of the Act, as alleged Further, the Re-
spondent's refusal to bargain in good faith by not
providing the Union with the requested informa-
tion meant that no genuine impasse was reached in
the negotiations between the parties 14 Consequent-
ly, the Respondent was not free to unilaterally im-
plement the changes it made in its employees'
wages and other terms and conditions of employ-
ment In doing so the Respondent violated Section
8(a)(5) and (1) of the Act
CONCLUSIONS OF LAW
1 By failing and refusing to provide the Union
with requested financial information necessary and
relevant for collective-bargaining purposes, the Re-
12 Clemson Bros 290 NLRB 943 ( 1988) Atlanta Hilton & Tower supra
at 1602 Although in Atlanta Hilton the Board concluded that the em
ployer had not plead poverty it did so because the employers general
references to the economy and to its vacancy rate were insufficient to
constitute a plea of inability to pay and because a letter by the union to
the employer indicated that the latter had claimed that it was unwilling
rather than unable to meet the union s demands However the facts in
this case as described above clearly indicate that the Respondent here
unlike the employer in Atlanta Hilton sought to justify its contract pro
posal on its financial inability to continue providing employees with a
guaranteed workweek
is Thus it is clear that the Respondents financial condition was a con
tinuing issue during the negotiations even after the Respondents January
15 response to the Unions request for information The Respondents
representatives continued to assert the Respondents financial hardship as
justification for its bargaining proposals and the Union s representatives
continued to question the veracity of the Respondent s claims
14 Cowin & Co 277 NLRB 802 (1985)
3
spondent has engaged in unfair labor practices af-
fecting commerce within the meaning of Section
8(a)(5) and ( 1) and Section 2(6) and (7) of the Act
2 By unilaterally changing the terms and condi-
tions of employment of unit employees about
March 16 , 1987, at a time when no lawful impasse
in negotiations existed, the Respondent has en-
gaged in unfair labor practices affecting commerce
within the meaning of Section 8 (a)(5) and (1) and
Section 2(6) and (7) of the Act
REMEDY
Having found that the Respondent violated Sec-
tion 8(a)(5) and (1) of the Act by refusing to fur-
nish the Union with certain financial information
and by unilaterally instituting changes in its unit
employees ' wages and other terms and conditions
of employment , we shall order it to cease and
desist from engaging in such conduct and to take
certain affirmative action necessary to effectuate
the policies of the Act
The Respondent shall, on request , be required to
furnish the Union with the financial information re-
quested in its letter of January 12, 1987 The Re-
spondent shall also be required to make unit em-
ployees whole for any loss in wages and benefits
they may have sustained , including fringe benefit
fund contributions , as a result of the unilateral
changes implemented by the Respondent on March
16, 1987 Any backpay due will be determined in
accordance with the method described in Ogle Pro-
tection Service, 183 NLRB 682 (1970), with interest
thereon as set forth in New Horizons for the Retard-
ed 15
ORDER
The National Labor Relations Board orders that
the Respondent, Sioux City Stockyards, Division
of United Stockyards Corporation, Sioux City,
Iowa , its officers , agents , successors, and assigns,
shall
1 Cease and desist from
(a) Refusing to bargain collectively with United
Food and Commercial Workers International
Union, AFL-CIO, Local No 176, by refusing to
furnish the Union with necessary and relevant fi-
nancial information
1s 283 NLRB 1173 (1987) Interest on and after January 1 1987 shall
be computed at the short term Federal rate for the underpayment of
taxes as set out in the 1986 amendment to 26 U S C § 6621 Interest on
amounts accrued prior to January 1 1987 (the effective date of the 1986
amendment to 26 U S C § 6621) shall be computed in accordance with
Florida Steel Corp 231 NLRB 651 (1977)
We leave to the compliance stage the question whether the Respondent
must pay any additional sums into employee benefit funds to satisfy our
make whole remedy Merryweather Optical Co 240 NLRB 1213 (1979)
4 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
(b) Unilaterally implementing changes in the
wages and terms and conditions of employment of
employees represented by the Union without ex-
hausting the collective-bargaining process and
having reached a bona fide impasse in negotiations
(c) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act
2 Take the following affirmative action neces
sary to effectuate the policies of the Act
(a) On request, furnish the Union with the finan-
cial information requested in its letter of January
12, 1987, to the extent the information has not al
ready been provided
(b) Bargain in good faith with the Union until a
collective-bargaining agreement or a bona fide im-
passe in negotiations is reached
(c) Make whole all unit employees for any loss
in wages and benefits they may have suffered as a
result of the Respondent's March 16, 1987 unilater-
al changes in their wages and other terms and con-
ditions of employment, with interest in the manner
described in the remedy section of this decision
(d) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order
(e) Post at its facility at Sioux City, Iowa, copies
of the attached notice marked "Appendix "16
Copies of the notice, on forms provided by the Re-
gional Director for Region 18, after being signed
by the Respondent's authorized representative,
shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive
days in conspicuous places, including all places
where notices to employees are customarily posted
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material
(f) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply
16 If this Order is enforced by a judgment of a United States court of
appeals the words in the notice reading Posted by Order of the Nation
al Labor Relations Board shall read Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice
Section 7 of the Act gives employees these rights
To organize
To form, join, or assist any union
To bargain collectively through representa
tines of their own choice
To act together for other mutual aid or pro
tection
To choose not to engage in any of these
protected concerted activities
WE WILL NOT refuse to bargain in good faith
with United Food and Commercial Workers Inter-
national Union , AFL-CIO, Local No 176, by de-
nying its request for financial information needed
to perform its collective-bargaining duties
WE WILL NOT make unilateral changes in the
wages and other terms and conditions of employ
ment of employees represented by the Union with
out first bargaining with the Union to agreement or
to impasse about such changes
WE WILL NOT in any like or related manner
interfere with, restrain , or coerce you in the exer
cise of the rights guaranteed you by Section 7 of
the Act
WE WILL, on request , furnish the Union with the
financial information requested in its letter of Janu-
ary 12, 1987 , which has not already been provided
WE WILL make whole all our employees repre-
sented by the Union for any loss of wages and ben-
efits they may have suffered as a result of the uni-
lateral changes made to their wages and other
terms and conditions of employment on March 16,
1987, with interest
SIOUX CITY STOCKYARDS, DIVISION
OF UNITED STOCKYARDS CORPORA-
TION
Everett Rosenberry Esq, for the General Counsel
Soren S Jensen and Arthur Carter Esqs (Erickson & Se
derstrom) for the Respondent
Harry H Smith Esq of Sioux City Iowa for the
Charging Party
UNITED STOCKYARDS CORP 5
DECISION
STATEMENT OF THE CASE
WILLIAM L SCHMIDT Administrative Law Judge
United Food and Commercial Workers International
Union AFL-CIO, Local No 176 (Union refers to Local
176 UFCW refers to its parent) filed this charge on May
8, 1987' alleging Sioux City Stockyards Division of
United Stockyards Corporation (Respondent or Stock
yards refers to the division involved here United refers
to the parent) violated Section 8(a)(1) and (5) of the Na
tional Labor Relations Act (Act) The Union amended
its charge on June 24 and, on June 25, the Regional Di
rector for Region 18 of the National Labor Relations
Board (NLRB or Board) issued a complaint and notice
of hearing before an administrative law judge
The Respondent filed a timely answer admitting cer
tarn foundational allegations and denying the unfair labor
practices alleged
The complaint alleges, in essence, that Respondent re
fused to bargain in good faith with the Union by (1) re
fusing to furnish the Union with necessary and relevant
financial data for collective bargaining purposes, and (2)
unilaterally imposing new wages and working conditions
on its union represented employees The key question
presented is whether Respondent refused to bargain in
good faith by declining the Union s request for a wide
range of financial information on the basis of the princi
ple established in NLRB v Truitt Mfg Co, 351 U S 149
(1956)
I heard this matter on July 28 at Sioux City, Iowa
Having carefully considered the entire record 2 the de
' Unless shown otherwise all dates refer to the 1987 calendar year
2 Included in the record are handwritten notes reflecting a portion of
the exchanges between the negotiating teams at the last four of the five
bargaining sessions between Respondent and the Union The notes were
offered by the General Counsel and were received over Respondents
vigorous objection The note taker was Jacqueline Dendinger a legal as
sistant from the law firm of Erickson and Sederstrom which represents
Respondent who was present at those sessions for the purpose of taking
notes Respondents opposition to the receipt of the notes is based on its
claim that they are incomplete regarding the exchanges at the bargaining
table and inaccurate In its brief Respondent renews its opposition and
seeks again to have the notes excluded Respondents attack on the
notes-which in fact are unusually extensive-is in general terms No
witness called by Respondent addressed the accuracy of any relevant ac
count attributed to him in the notes During the General Counsel s roves
tigation of the original charge-which alleged that Respondent was en
gaged in surface bargaining-the notes were submitted to the Regional
Director of as reflective of the course of bargaining or as Respondent
describes in its brief a picture of the bargaining process here Having
been prepared at Respondents direction obviously reviewed by responsi
ble agents submitted in defense of the charge as originally filed and un
disputed in pertinent part I find Respondent has adopted the notes and
as such they are admissible because they contain admissions related to
the issues here and to the context of those admissions Accordingly Re
spondent s request that I reverse my ruling admitting the notes is denied
Respondent also argues the notes should be rejected for a policy
reason The substance of this argument is that the notes were submitted
during the General Counsels investigation for one purpose (to refute the
surface bargaining charge which they clearly do) but were used at the
hearing for another purpose (to support the refusal to furnish information
allegation) The short answer to Respondents policy argument is that the
General Counsel is entitled under Sec II of the Act to any evidence of
any person being investigated and is required under Sec 3 of the Act to
prosecute complaints before the Board The General Counsels Sec 3
duty presupposes that she will prosecute complaints by presenting all rel
evant evidence lawfully in her possession If that scheme inhibits parties
meanor of the witnesses, and the posthearing briefs of
the General Counsel and the Respondent, I have con
cluded Respondent did not violate the Act as alleged for
reasons specified in the following
FINDINGS OF FACT
I THE ALLEGED UNFAIR LABOR PRACTICES
A Background
The Respondent, a Delaware corporation, is engaged
in the operation of a public stockyard at Sioux City
Iowa 3
The Stockyards income is derived from boarding,
feeding, and auctioning livestock (cattle, hogs and
sheep) brought to market by growers and the rental of
office space and other excess facilities As public stock
yards it is regulated under the Public Stockyards Act,
which requires, among other things, that it be open for
business daily regardless of the volume of livestock re
ceipts
The Stockyards is an old Sioux City institution that
celebrated its centennial anniversary at the time of the
hearing Until 1963 the Stockyards operated as an inde
pendent, essentially local enterprise In that year it
became a subsidiary of United Later United and its sub
sidiaries became a subsidiary of the Canal Randolph Cor
poration (Canal) but United and its subsidiaries resumed
their independent status on June 1 1984, on Canal s liqui
dation When the spinoff occurred, United s principal-if
not sole-business was the operation of at least 10 public
stockyards throughout the United States
After the spinoff, United vigorously pursued a course
of diversification That program drastically changed the
character of the enterprise From its headquarters in
New York City, United began trading in investment se
curities and pursued its real estate development activities
with increased vigor Although United continued its
stockyard operations, by 1987 they were no longer Unit
ed s heart and soul The shifting nature of United s char
acter is graphically reflected in the sources of its income
In 1984 United s net income from operations was
from voluntarily cooperating with the General Counsel then so be it
Accordingly the sanction sought by Respondent is inappropriate and
denied
Having so ruled however I hasten to add a word of caution to the
General Counsel The legal theory underlying the original charge and the
amended charge are substantially different The complaint is based on the
theory of the amended charge Respondents counsel (and chief negotia
tor) complains that he was never questioned during the investigation con
cerning matters specifically relevant to the theory of the amended charge
and the formal papers show that he did not receive the amended charge
until the day after the complaint issued Such circumstances if true
under the Equal Access to Justice Act could easily lead to an award if
Respondent qualified But the mere fact that Respondent does not qualify
for relief under EAJA is not reason to deny it an opportunity to fully
and fairly address the charges made against it
s In the 12 month period preceding December 31 1986 Respondent
derived gross revenues in excess of $500 000 from its Sioux City stock
yard operation During the same period Respondents direct outflow and
direct inflow each exceeded $50 000 in connection with its Sioux City op
eration As Respondent meets the Board s retail and nonretail standard
for exercising the statutory jurisdiction present here I find that it would
effectuate the purposes of the Act for the Board to exercise its junsdic
tion to resolve the labor dispute presented here
6 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
$5,446,902, with $5,238 765 coming from its stockyard
operations In 1986 United s net income was $12,818,471
with $4,068,737 coming from stockyard operations The
declining stockyard activities-which United attributes
to a general downturn in the agribusiness economy and
direct purchasing of livestock by slaughterhouses-pro
duced excess real estate which fueled United s real
estate activity 4 The most extreme example occurred at
Fort Worth, Texas, where the stockyard was closed alto
gether and the land was used to develop a theme park
The Union represents Stockyards' production and
maintenance employees at Sioux City 5 Similar employ
ees at several other United stockyards (except, perhaps,
those in Milwaukee) are represented by the Union s sister
locals
At the time of the hearing there were 28 employees in
the Sioux City unit Most were long term employees
with 20 to 30 years of service The wages, hours, and
working conditions of those employees have historically
been governed by the terms of a collective bargaining
agreement between Respondent and Union, most recent
ly the Sioux City agreement was effective by its terms
from January 23, 1984 to January 25, 1987 6
B The 1986-1987 Negotiations
Historically bargaining between UFCW locals and
United has been conducted on a location by location
basis The agreement in Indianapolis, Indiana, expired in
mid 1986 and the agreements at six or seven other loca
tions were scheduled to expire during United s fiscal year
ending October 31, 1987
United began planning for the 1986-1987 labor negoti
ations in 1985 At that time it retained Omaha Attorney
Soren Jensen to conduct or oversee negotiations at all lo
cations and established three bargaining objectives for
new agreements at all locations Specifically Jensen was
directed by United s leadership to negotiate an end to all
workweek guarantees restrictive subcontracting clauses
and prohibitions against supervisors performing unit
work The individual subsidiary president at each loca
tion was given discretion to determine wage and benefit
offers and all other elements of the labor agreement
The Respondents position on the workweek guarantee
and its negotiators statements justifying its elimination
while bargaining with the Union provide the heart of
this case In a nutshell the workweek guarantee (included
in all of United s stockyard agreements) provided that all
regular employees scheduled for work at the start of the
workweek were guaranteed 40 hours of work that week
unless they were voluntarily absent The guarantee had a
ripple effect on other contractual benefits such as pen
sions and vacations, which are based on the number of
hours worked The effect of the guarantee from Re
spondent's perspective was that employees were often
given make work or nonproductive work during slack
periods as Respondent was obliged to pay employees
anyway By Respondents estimate 20 to 25 percent of
the work performed at Sioux City was not really essen
tial, but this estimate was hotly disputed by unit employ
ees on the bargaining committee
In November 1986, Respondent gave the Union timely
notice of its intention to terminate the existing Sioux City
agreement when it expired on January 25 That notice
further expressed Respondents willingness to begin ne
gotiations for a new contract ' and advised that Re
spondent wished to propose substantial changes in a
new agreement
The parties commenced negotiations for a successor
Sioux City agreement on December 12, 1986, and held
four additional sessions on January 12, February 7 and
13 and March 2 Respondents negotiators were Jensen,
Stockyards president, Donald Bales, and two other
Stockyards officials, representing the Union were
UFCW Representative Frank Jackson Local 176 Presi
dent Clyde Bolles and a bargaining committee of select
ed unit employees
At the December 12 session Jensen informed the
Union that Respondent would not sign any further
agreements containing a workweek guarantee, extensive
restrictions on subcontracting, and the performance of
unit work by supervisors According to Jackson Jensen
justified these demands by saying that the livestock mar
kets were down and that United was losing money
not making any money Jackson asserted that Respond
ent s negotiators repeated the losing money not
making any money theme at all the remaining bargain
ing sessions
Jensen acknowledged that he spoke at length justifying
the three corporate objectives on December 12 Howev
er he denied that he ever justified the proposed elimina
tion of the workweek guarantee on the ground that Re
spondent was in a diminished financial condition, plead
ing poverty losing profits, or in danger of going out of
business or bankrupt Instead Jensen claimed that the
Union was,told repeatedly that in light of the declining
livestock receipts the monetary investment that the
stockyard operation represented was not regarded as
profitable by United In this regard, Jensen asserted that
United's investment at Sioux City was approximately $10
to $15 million Based on that assertion, the Sioux City
net income in 1986 of $983 748 translates into a return of
6 5 to 9 8 cents per dollar of investment 7
Following the December 12 meeting Jensen prepared
a proposal in contract form that incorporated the
changes Respondent sought to negotiate and forwarded
it to Jackson 8 Jackson was astonished by the magnitude
of the language changes he is reported to have later
said after reviewing the proposal, that it upset his whole
weekend
* At the time of the hearing only slightly more than one third of Sioux
City s livestock facilities was required for Respondent s activities
8 The Union is a labor organization within the meaning of Sec 2(5) of
the Act
8 The parties extended the agreement to February 8 during the negoti
ations discussed below
° In 1986 Sioux City produced almost 25 percent of United net income
from stockyard operations This fact suggests that if United s investment
at the nine other stockyards it operated was similar to Sioux City the
return was far far worse
8 Respondents written proposal treated only contractual language
changes Its economic proposals were submitted to the Union by letter
dated January 20
UNITED STOCKYARDS CORP
In response, Jackson prepared and came to the Janu
ary 12 bargaining session with a letter requesting the Re
spondent furnish certain financial data The meat of the
Union s request is contained in the following two para
graphs of the letter
Under the N L R. A, as you are aware an em
ployer has the obligation to furnish the union infor
mation relevant to the performance of its represent
ative functions The issue of the employers financial
inability to meet the union s contract proposals is
interjected into the negotiations, information regard
ing the employers financial condition becomes rele
vant to the union s ability to perform its negotiation
function
So that the negotiations can progress in the most
realistic manner the Union requests the following
financial information on Sioux City Stock Yards for
each of the last three years copies of federal
income tax returns and audit reports, including bal
ance sheets, income statements, and changes in fi
nancial position, for the past three years, and any
other documents, books, and records which will
separately show (1) the total bargaining unit labor
costs as well as the cost of non bargaining unit
labor, including supervisory and other management
salary and benefits, (2) total income from sales or
fees, (3) overhead and other administrative costs,
and (4) interest on financial charges This financial
data should be presented in a manner which clearly
breaks down the costs and reveals the profits and
losses during each of the three years
When Jackson tendered the letter to Jensen on Janu
ary 12 he told Jensen that the Union needed proof as
soon as possible that United was losing money in light of
the drastic demand to eliminate weekly guarantee and its
attendant effects Purportedly, Jackson argued that the
financial information would be real helpful if Respond
ent was unable to provide increases or the Union was re
quired to take wage cuts
Jensen s response at the time was that Respondent
would provide some information but would not com
pletely open its books as the Union s request would re
quire Jensen argued that the Respondent was not plead
ing poverty nor was it going bankrupt He asserted that
because of the reduced livestock receipts Respondent
was not profitable, but it was going to continue to oper
ate However Jensen asserted that Respondent did not
think it was wise to provide pay increases What Re
spondent sought, Jensen stated, was a reasonable agree
ment Later, Jensen stated that Respondent was still
making money, but a lot of it came from the non oper
ational ' business at Sioux City such as rental income 9
9 Respondents 1986 income statement suggests that the repeated claim
that its non operational income accounted for a major portion of its
income is only a partially accurate explanation of the situation at Sioux
City Although the revenues from livestock related activities dropped by
nearly a million dollars from 1985 to 1986 and revenue from nonlivestock
activities rose by only $140 000 Respondents net income actually in
creased by approximately $23 000 The principal explanation for Re
spondent s ability to maintain its relatively level net income in the face of
significant reduction in livestock related revenues lies in the fact that Re
7
Jensen promised to respond to the Union s information
request in writing
By letter dated January 15, Jensen responded at length
to the Union s request In pertinent part Jensen s letter
states
Your letter of January 12 assumes that at some
point in time in the negotiations that the employer
indicated that it is in a precarious financial situation
and cannot afford to provide pay or benefits at a
prescribed level and that because of this situation
the union should grant some sort of relief to the
company This is true even though at the first meet
ing the company made no proposal regarding
hourly wages or benefits and in fact, even at the
second meeting no proposal regarding economics
was discussed
At no time has the employer pled poverty nor
does it intend to do so in connection with these ne
gotiations It is true that the yard operations are not
profitable in Sioux City because of the reduced
numbers and the impossibility, under the previous
labor contract, of reducing overhead and cutting
labor costs in proportion to the reduction in the
number of cattle and hogs being processed through
the market However, the company is not in any
way near bankruptcy nor is it necessary to request
any special treatment from the union in connection
with its operation As I indicated to you, certain fi
nancial information is available to the union in bar
gaining, particularly if it is requested at an appropri
ate time This kind of information has to do with
the cost of certain benefits i e, holidays and vaca
tions
The employer is not required to open its books
except in a situation where it requests special treat
ment because of an extremely negative and precari
ous financial condition
The proposals which the company has made and
will be making throughout the negotiations, are
made to insure a profitable operation and also to
assure continued employment at Sioux City
It is the company s opinion that a new collective
bargaining contract must face a number of realities
regarding the changes in operation and the changes
in the Sioux City market This is the basis for our
proposals and not because of 'poverty
Therefore, we are willing to furnish you the fol
lowing information
1 Payroll costs for the bargaining unit
2 Other similar information regarding costs associated
with the members of the bargaining unit
In connection with the other requests made in
your January 12 letter, we do not think them either
appropriate or necessary for collective bargaining
Respondent's wage proposal of January 20 called for a
reduction in the number of employee classifications and a
spondent reduced its 1986 operating and maintenance expenses by nearly
$700000
8 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
reduction in the hourly wage rates for all classifications
The Union responded by letter dated January 22 with its
own economic proposals No mention was made in the
Unions letter to Respondents January 15 letter concern
ing the information demand nor did the Union request
any information in its January 22 letter
Throughout the remainder of the period the parties
bargained together, their positions concerning the desire
for and the willingness to provide, the financial data dis
cussed in the foregoing exchange remained unchanged
The proposal to eliminate the guaranteed workweek re
mained as the key issue in the subsequent unproductive
negotiations 10
The Respondents notes of February 7 attribute re
marks to both Bales and Jensen pertaining to the Re
spondent s financial position Bales told the Union that if
we don t get more receipts we cant even have 28
people on the payroll we can t pay taxes and upkeep
on yards with status quo Later Jensen emphasized that
Respondents position on the guarantee would not
change even in face of a strike and asserted that Stock
yards was only making money on real estate Shortly
thereafter Jackson stated I wish I could feel you were
in that bad of shape During this meeting Jensen assert
ed Respondent was endeavoring to reduce its direct
labor costs
Relatively early in the February 13 meeting Jackson
asserted that he had seen reports showing Respondent
was making a profit Jensen said that he too, had read
the annual report When Jackson asserted that the figures
reflected Respondent could operate with a guarantee,
Jensen responded that Stockyards won t operate that
way anymore But at another point, on February 13,
while discussing the number of hours per week an em
ployee must work to acquire benefits, Jackson observed
that Respondents proposal was worse than he thought
Jensen responded that the condition of the business was
worse than he thought Later while addressing the guar
antee issue , Jensen stated We have to go out of buss
ness or change the way we re doing business Yet later
Jensen rejected a 4 hour per day guarantee saying that it
was nothing the way receipts are going
Finally by letter dated March 11 Donald Bales Re
spondent s division president, notified Jackson and Local
176 President Clyde Bolles that Respondent believed an
impasse in negotiations existed For this reason Respond
ent advised the union representatives that it intended to
put into effect as of March 16 the basic terms and con
ditions proposed by Respondent in the negotiations' By
letter dated March 20, Jackson protested to Bales con
cerning the declaration of an impasse Notwithstanding,
Respondent did implement its proposals on March 16
and kept them in effect thereafter No further bargaining
sessions were held or scheduled
10 This is not to say that there was no movement on this issue Re
spondent suggested from time to time a willingness to consider a gradual
elimination of the guarantee the Union suggested that from time to time
it would entertain a downward adjustment in the number of employees
benefiting from the provision or the number of hours guaranteed Never
theless the fundamental position of Respondent that it would sign no fur
ther agreements containing a guarantee and of the Union that it was not
in business to give away workweek guarantees remained unaltered
C Further Findings and Conclusions
In NLRB v Truett Mfg Co above the Supreme Court
held that a union is entitled to evidence substantiating an
employers bargaining position of economic inability to
pay proposed wage increases The Court reasoned that
If such an argument is important enough to present in
the give and take of bargaining, it is important enough to
require some sort of proof of its accuracy Id at 152-
153 The principle articulated in Truitt has been applied
with equal force when an employer relies on its past and
ongoing financial losses to justify wage and benefit re
duction proposals Cowin & Co, 277 NLRB 802 (1985)
No magic words are necessary to express a poverty plea,
but the words and conduct must be specific enough to
convey that meaning Atlanta Hilton & Tower, 271 NLRB
1600 (1984) Truitt is applicable to a wide variety of bar
gaining situations in which the good faith obligation re
quires that a party to bargaining negotiations be willing
to substantiate, on request a position it has taken during
negotiations Stanley Building Specialties Co 166 NLRB
984 (1967)
As the chronology of events establish the Unions fi
nancial information demand was grounded on Respond
ent s proposal to eliminate the workweek guarantee
rather than its proposal for classification by classification
wage reductions The request for information and Re
spondent s reply all came before the Respondent s wage
proposal was exposed Moreover Respondents wage
rate proposal on its face indicated that the rates repre
sented a wage floort that could be increased on a merit
basis And in subsequent negotiations, Respondent stated
its flexibility about the wage proposal
As the financial information request was focused on
Respondents workweek guarantee proposal, the question
becomes whether the General Counsel has established
Respondent sought to justify its proposal on the basis of
its inability to pay Although some evidence supports the
General Counsels position I am satisfied that the pre
ponderance of the evidence shows Respondents proposal
was grounded on efficiency considerations and not on its
inability to pay This conclusion is supported by the fol
lowing
(1) The proposal was generated at the parent corpora
tion level and was made applicable to negotiations at all
stockyard locations
(2) Respondents policy of reducing stockyard ex
penses to meet diminished stockyard receipts was public
ly emphasized in its 1986 stockholders report
(3) By its very nature the proposal provided Respond
ent with flexibility in regulating its work force needs, but
it did not necessarily guarantee lower payroll costs 11
(4) The proposals related to subcontracting and per
formance of unit work by supervisors also generated at
the parent level, were similarly designed to provide Re
spondent with greater flexibility in utilizing its work
force
i 1 Thus if managements estimate that 20 to 25 percent of the Sioux
City labor costs were for non essential activities is accurate it is likely
that some labor savings would result from the elimination of the guaran
tee To the extent that estimate was exaggerated elimination of the guar
antee would produce proportionately less savings
UNITED STOCKYARDS CORP 9
(5) United s net income rapidly rose over the final 2
years of the last collective bargaining agreement so that
claims of poverty would obviously have been indefensi
ble 12
(6) Even the Sioux City income statement reflects
level income even in the face of diminishing livestock re
ceipts
(7) Jackson was aware of United s increased income
(8) With few exceptions, discussed below, Respondent
repeatedly asserted it was not pleading poverty
(9) At the first two bargaining sessions Jensen ex
plained at length Respondents belief that it did not need
its entire work force for a full 40 hour week and accord
ingly, the 40 hour guarantee was an unnecessary expense
(10) Respondent summarily rejected the Union s pro
posals for a modified guarantee , but remained open to a
phaseout period and stated its flexibility on all other
issues
The General Counsel argues that Jensen s letter reject
ing the Union s financial information on the ground that
the Stockyards was not profitable implies that Re
spondent s proposals were designed to relieve an unprof
itable situation The General Counsel believes that this
position, coupled with Bales ' statement at the February 7
bargaining session concerning the Stockyards inability to
pay its taxes meet maintenance expenses, and maintain
current employment levels under existing conditions
belie Respondents defense that its proposals were not
grounded on a poverty plea
Although Bales' remarks are troubling, Jensen s asser
tion about profitability does not necessarily carry the
black and white implication ascribed by the General
Counsel or understood by Jackson Rather as Jensen tes
tified, relative to the amount of investment the Stock
yards represented, it was not a profitable operation Jeri
Ben's statements that the Stockyards was not profitable or
was losing money cannot be translated ipso facto into a
negative income statement or a poverty plea Such re
marks must be read in the context of those who directed
Jensen s activities, namely, United s corporate managers
in New York From the perspective of managers who
had more than doubled United s income in the 2 year
period following its spinoff from Canal through bull
market securities and real estate activities, the return of
less then 10 cents per dollar of investment at Sioux City
could easily be viewed as losing money For this reason
I find Jensen s statements that the Sioux City operation
was unprofitable or was losing money cannot be read lit
erally, which is how Jackson and the General Counsel
have read it
Bales remarks on the other hand are not at all con
sistent with the picture of United at that time In my
judgment the posture of the record does not permit any
inferences concerning Bales remarks as Respondent
chose only to oppose the introduction of Dendinger s
notes and never sought to have Bales explain the remarks
attributed to him in the notes while testifying Hence
any attempt to reconcile Bales remarks requires specula
tion rather than inference Nonetheless Bales remarks
alone are not sufficient to support a finding that Re
spondent was pleading poverty
The General Counsel argues that this case is indistin
guishable from Cowin, above I do not agree In that
case the employer was actually losing money and had
even sought a midterm modification of the prior agree
merit to obtain relief from a scheduled wage increase be
cause of its financial predicament The ultimate conclu
sion in that case was that the employer had argued that
it could not afford the increases sought by the employee
representative despite its protestations to the contrary
By contrast I am satisfied Respondents proposals here
were designed to gain flexibility and efficiency in the use
of its work force Although end result of Respondent s
proposal might produce some reduction in its labor costs,
the record simply fails to establish that Respondent
sought this economy because of a precarious financial
position For these reasons I find Cowin distinguishable
and that Respondent was not obliged to disclose the type
of financial information sought by the Union s January
12 letter
As the General Counsel claims that no bona fide im
passe was reached only because of Respondents refusal
to furnish the requested information it follows that that
allegation, too, is without merit
Accordingly I will recommend that the Board order
the complaint dismissed in its entirety
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 mean
ing of Section 2(5) of the Act
3 Respondent did not engage in the unfair labor prac
tices alleged in the complaint issued against it on June
25
On these findings of fact and conclusions of law and
on the entire record , I issue the following recommend
ed13
ORDER
It is recommended that the complaint be dismissed
12 Although much of this increase was attributable to its securities and
real estate business which had little or nothing to do with its stockyards
operation on which the bargaining focused the financial records intro
duced indicate that even the stockyards operation produced income as
opposed to losses
i s If no exceptions are filed as provided by Sec 102 46 of the Board s
Rules and Regulations the findings conclusions and recommended
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 pur
poses