Waldon, Inc.

National Labor Relations Board - Board Decisions

Dec 30, 1986

282 N.L.R.B. 583 (N.L.R.B. 1986)

WALDON, INC.
Waldon, Incorporated and International Association
of Machinists and Aerospace Workers, AFL-
CIO., Case 16-CA-12372
30 December 1986
DECISION AND ORDER
BY MEMBERS JOHANSEN , BABSON, AND
STEPHENS
On 14 May 1986 Administrative Law Judge
Lawrence W. Cullen issued the attached decision.
The Respondent and the General Counsel filed ex-
ceptions, supporting briefs, and answering briefs. '
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, fmdings,2
and conclusions only to the extent consistent with
this Decision and Order.
We agree with the judge that the Respondent
did not violate Section 8(a)(5) of the Act by repu-
diating the labor agreement the parties executed
because there was no meeting of the minds con-
cerning the contract's wage scale. Therefore, there
was no valid contract and the Respondent was not
obligated to arbitrate the wage dispute. We dis-
agree,, however, with the judge's finding that the
'Respondent violated Section 8(a)(5) by unilaterally
implementing a new wage scale before reaching an
impasse in negotiations.
We need not reach the merits of the violation the
judge found. We find that the complaint does not
allege a preimpasse unilateral change violation, 3
and the impasse issue was never raised at the hear-
ing. Because the Respondent was denied an oppor-
tunity fully to litigate ' an issue the judge raised sua
sponte in his decision, we reverse the judge's ford-
ing and dismiss the complaint.
ORDER
The complaint is dismissed.
i We deny the Respondent 's motion to reopen the record for receipt of
additional evidence.
2 The General Counsel has excepted to some of the judge 's credibility
findings. The Board's established policy is not to overrule an administra-
tive law judge's credibility resolutions unless the clear preponderance 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 re-
versing the findings.
a The complaint alleges that the Respondent abrogated the collective-
bargaining agreement , reduced wage rates, and refused to recognize the
contract 's grievance-and-arbitration procedure. It is clear from the com-
plaint and from the General Counsel' s subsequent litigation strategy that
the wage reduction and refusal to arbitrate allegations flow solely from
the General Counsel's theory that the Respondent refused to honor the
contract.
583
J_-CJ. meson, Esq., for the General Counsel.
Gary L. Lieber, Esq. (Rose, Schmidt, Chapman, Duff &
Hasley), of Washington , D.C., for the Respondent.
DECISION
STATEMENT OF THE CASE
LAWRENCE W. CuLLEN, Administrative Law Judge.
This case was heard before me on 6 and 7 February 1986
at Fairview, Oklahoma. The hearing was held pursuant
to a complaint issued by the Regional Director for
Region 16 of the National Labor Relations Board (the
Board) on 26 November 1985. The complaint, as amend-
ed at the hearing, is based on a charge filed by Interna-
tional Association of Machinists and Aerospace Workers,
AFL-CIO (the Charging Party or the Union) on 28 Oc-
tober 1985 and alleges that Waldon, Incorporated (the
Respondent or the Employer) violated Section 8(a)(5)
and (1) of the National Labor Relations Act (the Act) by
since about 9 September 1985 'failing and refusing to
abide by a written labor agreement executed by the
Charging Party and the Respondent,' by reducing the
wage rates of its employees and by refusing to recognize
the existence of a grievance-arbitration process, which
was one of the terms of employment agreed to by the
parties and embodied in the aforesaid executed written
agreement. The Respondent, by, its answer filed on 12
December 1985, denied the commission of the alleged
violations of the Act.
On the entire record in this proceeding, including my
observations of the witnesses and after due consideration
of the positions of the parties and briefs filed 'by the par-
ties, I make the following
FINDINGS OF FACT AND ANALYSIS'
L JURISDICTION
The complaint alleges, the Respondent admits, and I
find that the Employer is an Oklahoma corporation with
an office and place of business located in Fairview, Okla-
homa, where it is engaged in the manufacture and sale of
material handling equipment, and that during the 12-
month period, a representative period, prior to the filing
of the complaint, the Employer, in the course and con-
duct'of its business operations, purchased and received at
its Fairview, Oklahoma facility, products, goods, and
materials valued in excess of $50,000 directly from points
located outside the State of Oklahoma, and that the Em-
ployer is, and has been at all times material an employer
within the meaning of Section 2(2), (6), and (7) of the
Act.
II. THE LABOR ORGANIZATION
The complaint alleges, the answer admits, and I find
that the Union is, and has been at all times material, a
labor organization within the meaning of Section 2(5) of
the Act.
I The Respondent's posthearing Exh. 19 (a) is admitted and its unop-
posed motion to correct the transcript is granted.
282 NLRB No. 82
584
Ill. THE APPROPRIATE UNIT
On 6 February 1985 , the Union was certified as the ex-
clusive collective bargaining representative of the em-
ployees in the following appropriate unit for purposes of
collective bargaining:
All production and maintenance employees , includ-
ing over-the-road truck drivers, shop floor control-
lers, material handlers, quality control inspectors
and tool and die makers employed by the Respond-
ent at its Fairview , Oklahoma facility, excluding
office clerical employees, buyers, scheduler-plan-
ners, keypunch operators, purchasing clericals, pro-
fessional employees , guards, and supervisors as de-
fined in the Act.
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
IV. THE ALLEGED UNFAIR LABOR PRACTICES2
In March 1985,2 the parties commenced bargaining for
an initial labor agreement following the Union 's certifica-
tion as the collective-bargaining agent of the employees.
By agreement of the parties, economic issues were de-
ferred during negotiations until 27 June. The principal
negotiator for the Respondent was Kent McCulloch, an
attorney who serves as the director of industrial relations
of its parent company . The Union's negotiating team was
comprised of several bargaining unit members and was
headed by Charles Holler, the business manager of Local
Lodge 898. Both McCulloch and Holler were experi-
enced in labor negotiations.
Prior to commencement of negotiations , the Respond-
ent had six wage classifications of its employees in place
as follows:
Grade Job Classification
Salary
Range
IA
I
II
III
IV
V
Maintenance ..................................................
Machine-Technical-Tape Machines
Painter A .......................................................
Welder A
Machine A
Ass'y A
Machine B .....................................................
Welder B
Ass'y B
Maint. B Shipping/R.A.
Machine C .....................................................
Welder C
Ass'y C
Maint. C
Shipping/R.B.
Welder D .......................................................
Machine D
Ass'y D
Maint. D
Painter/Helper ..............................................
Shipping/Rec.
Janitor
$7.75-9.50
7.00-8.75
6.50-8.25
6.00-7.50
5.50-6.75
5.50-6.25
z The following includes a composite of the testimony of the witnesses.
s All dates are in 1985 unless otherwise specified
Prior to the commencement of negotiations , the Union
had requested and received from the Respondent certain
information for bargaining purposes . However, the above
existing wage grade schedule was not included in the
packet of materials furnished the Union . Although the
parties had agreed to defer economic matters until other
issues were resolved, McCulloch had told the Union's
representatives that the Respondent had lost $800,000 al-
ready that year and expected this loss to amount to about
a million by midyear.
Approximately five or six meetings were held between
March and June and an agreement was reached on con-
tract language by 26 June . McCulloch testified at the
hearing that the Respondent was seeking a 5-percent
wage reduction and benefit concessions . On 27 June, the
Union proposed a 10-percent wage increase and benefit
improvements. On 15 July, McCulloch proposed that
wages be reduced to the minimum rate of the wage
grades of the existing job classification system, thus
eliminating the wage range. According to McCulloch's
testimony, he went through and identified each of the ex-
isting six wage grades including grade I-A and grade I.
On the same date the Union countered with a 5-percent
wage increase demand with new hires to be hired at the
minimum rate of the job classification system with pro-
gression to the top of the scale over a period of time.
The parties met again on 25 July and at that time, ac-
cording to McCulloch , he read from a written proposal
on behalf of the Respondent that the wage rates for the
jobs would be : I-A, $7.75; I, $7; 2, $6. 50; 3, $6; 4, $5.50;
and 5, $5.50, and that the starting wage would be $4.50
for new employees who would progress to the minimum
rate of their job within 6 months . Current employees
would receive either a 10-percent wage decrease or the
new rate for their grade , whichever was greater. On 26
July, the Union renewed its proposal for a 5-percent
wage increase for current employees with new hires to
start at the minimum rate for the job classification. The
Respondent reasserted its proposal of a 10-percent reduc-
tion, but not below the minimum rate for the job classifi-
cation. The Union then proposed a 4-percent increase for
current employees. The Respondent then proposed an 8-
percent wage reduction, but not below the minimum rate
for the job classification. The Union then made another
proposal with concession, in a benefit, but with no
change in its previous demand for a 4-percent increase
for current employees. The Respondent then proposed a
5-percent reduction for current employees, but not below
the minimum rate for the job classification. The Union's
representatives told the Respondent's representatives
they would submit this proposal for a vote by the mem-
bership but would not recommend it. McCulloch testi-
fied that when he went through the Respondent's pro-
posal on 15 and 26 July, he spelled out the specific rate
for each wage grade as "I-A was $7.75; I was $7.00; 2
was $6.50; 3 was $6.00 and so forth." All the wage pro-
posals were made verbally.
Business Manager Holler testified that McCulloch did
not list the grade IA classification when making the
wage grade proposals but, rather, listed a grade I with a
minimum hourly rate of $7.75, a grade II with a mini-
WALDON, INC.
mum hourly rate of $7, a grade HE with a minimum
hourly rate of $6.50, a grade IV with a minimum hourly
rate of $6, and a grade V with a minimum hourly rate of
$5.50. Holler contends that he is certain of this and that
he reduced the verbal proposal to writing from memory
on 16 July and had it typed and submitted it to the
Union's members who ratified it with the five grades
rather than the six grades . Holler acknowledged having
seen a copy of the six grade wage schedule during the
course of the organizing campaign and having acknowl-
edged that he was aware of it in response to a question
by McCulloch at the time McCulloch originally referred
to the wage grades. However , Holler contends he did
not use the existing wage grades as a point of reference
in considering McCulloch 's offer . He also testified that
the existing wage schedule did not make sense as there
were no employees in grade IA classification and many
of the actual wages of the employees were above the top
of the range for their classification.
After Holler obtained the ratification of the proposal
as he had presented it to the Union 's members, he ad-
vised McCulloch who agreed that Holler would prepare
a draft of the agreement for execution by the Respondent
and the Union . Holler sent a draft of the agreement to
McCulloch who recommended changes in language, in-
cluding the section involving pay rates . Ultimately, the
changes were made and the parties signed the agreement.
McCulloch testified that the Respondent 's controller,
William McDowell , noted that there was an error in the
wage grades in the contract as grade IA had been elimi-
nated and each of the grades had been bumped to the
bottom of the salary range of the next higher grade with
the exception of grade V, which remained the same as it
had originally had the same minimum rate as grade IV.
He believed it to be an error and sent a letter dated 5
September to Holler advising him thereof and had the
parent company's president sign the agreement and en-
closed it also, and left on vacation . When he returned in
September, he was advised that Holler was contending
there was no error and that the new grades and rates
were correct. The parties met and attempted to resolve
the matter in September and October , but were unsuc-
cessful in doing so . The Union filed the underlying
charge in this case and a grievance and sought arbitra-
tion thereof. McCulloch told the Union to either resub-
mit to its members what he believed his offer to have
been or there would be no agreement as there had not
been a meeting of the minds . The Union refused to take
this offer back to its members and the Respondent re-
fused to honor the contract and reduced the employees
wages in accordance with McCulloch 's version as to
what his offer had been and refused to arbitrate the issue.
The Union contends that Holler's version of the offer
was correct and that the Respondent had a number of
opportunities to review the rates following submission of
the drafts to the Respondent , but did not contend there
was an error until after the agreement was signed. The
the Respondent contends alternatively that the agree-
ment as viewed by the Respondent should be binding on
the Union or that there was no meeting of the minds and
there was no contract and points to the clear reference in
McCulloch 's negotiating notes of the six grades and dis-
585
putes the accuracy of Holler's negotiating notes, which
were purportedly recorded on 16 July from Holler's
memory of what had occurred at the 15 July meeting.
The combined effect of the 5 percent wage reduction
and the bumping up one level of each grade minimum
under the Union's version may result in a raise for the
current employees or result in an uneven decrease. The
Respondent also contends it will form an improper base
for further negotiations of subsequent contracts and
would incorrectly affect the wage grades of newly hired
employees who would rise to a higher minimum than
their current grade.
Analysis
Based on my observation of the witnesses as they testi-
fied at the hearing and the plausibility of the views of
Holler and McCulloch as they expressed them at the
hearing and my review of the negotiations notes of
Holler and McCulloch as to what wage grade offer had
been proposed and ratified by the Union's members, I
find that McCulloch's version as to what he told Holler
with respect to the six wage grades as supported by his
negotiation notes should be credited . In making this de-
termina Lion , I rely on several factors . Initially, my obser-
vation of both McCulloch and Holler on the stand and
their responses to questioning and the sequence of events
as related and viewed by both convinced me that both
men were telling the truth as they sincerely believed it to
be. I am convinced, however, that McCulloch's version
of what he offered to the Union is the accurate one
rather than Holler's understanding of the offer . It is un-
disputed that the Respondent had in place a six-grade
wage classification system although Holler disclaims an
understanding of the system . It is also undisputed that
Holler was at least familiar with the existence of this
system . McCulloch offered a copy of the wage grade
system in effect at the time of the negotiation meeting or
at least asked Holler whether he was familiar with it to
which Holler replied in the affirmative. The Respond-
ent's proposal for wage changes involved a 5-percent
wage reduction with no employee to go below the mini-
mum of then existing wage grade . Holler acknowledged
that he did not reduce McCulloch 's offer to writing until
the day after the negotiation meeting and relied on his
memory to do so. He then presented the offer of a five-
grade wage schedule to the employees for ratification
rather than the six-grade wage schedule , which McCul-
loch contends he proposed and which had been in exist-
ence . After the employees ratified the five-grade wage
proposal as presented to them by Holler, Holler notified
McCulloch that the membership had ratified the agree-
ment. Pursuant to agreement of McCulloch and Holler,
Holler prepared the initial draft of the contract and pre-
sented it to McCulloch who made grammatical changes
in the section concerning wages and caused it to be exe-
cuted on behalf of the Respondent. II credit McCulloch's
testimony that he did not discover the error of the omis-
sion of wage grade IA until it was later called to his at-
tention by controller William McDowell and that he
then sent a letter to Holler informing him of what he be-
lieved to be a clerical error and at the same time ob-
586 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tamed and sent to Holler the signature of the president of
the parent company to the contract , which signature had
not previously been obtained . McCulloch's testimony
concerning the discovery of the error was corroborated
by McDowell whom I credit in this regard . Although I
also credit McDowell that Holler had contended that the
rates had merged or words tothat effect when he dis-
cussed the error with Holler , I do not find this determi-
native of the issues in this case . I find the entire scenario
as outlined by McCulloch to be plausible and believable.
Conversely, I find the deletion of grade IA would result
in the bumping up of certain employees into a higher
grade and perhaps even give them a minimal increase as
well as effect the minimum starting rate for new employ-
ees. In the face of the Respondent 's undisputed dire eco-
nomic position in 1985 and the entire tenor of the con-
cession bargaining engaged in by McCulloch on the Re-
spondent's behalf, I find such a result implausible.
I thus conclude that the membership through Holler's
error ratified a different wage proposal from that offered
by McCulloch, resulting in a mistake over an essential
element of " the contract . There was, thus, no meeting of
the minds over this essential element of wages and there
was, thus, no valid contract. Apache Powder Co., 223
NLRB ' 191 (1976). I conclude that Holler was mistaken
in his understanding of McCulloch 's offer and in what he
took back to the membership for ratification . I credit
McCulloch's testimony that he did not discover the error
until it was called to' his attention by controller
McDowell.
I do find , however, that the Respondent has not dem-
onstrated that there ,was an impasse on this issue such as
to entitle it to unilaterally reduce the employees' wages
in accordance with its proposal on 9 September 1985 as
it did. The complaint alleges that about 1 September
1985 the Respondent reduced the wage rates of its em-
ployees in the , unit. The Respondent denied this allega-
tion in its answer but the Respondent 's attorney stipulat-
ed at the hearing that there was a 5 percent wage reduc-
tion . Further, Business Representative Holler testified
that he learned of the reduction in wage rates of the em-
ployees from the stewards . It is thus undisputed and I
find that the Respondent did unilaterally reduce the
wage rates of the employees in the bargaining unit as al-
leged in the complaint and as specifically set out in Gen-
eral Counsel's Exhibit 19. I, accordingly, find that the
Respondent violated Section 8(a)(5) and (1) of the Act
by its unilateral reduction of its employees' wages on 9
September 1985 . NLRB v. Katz, 369 U.S. 736 (1962).
V. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondent as set forth in section
N above occurring in connection with its operations as
set out in section I above have a close, intimate, and sub-
stantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor dis-
putes burdening and obstructing commerce and the free
flow of commerce.
CONCLUSIONS OF LAW
1. The Respondent, Waldon, Incorporated , is an em-
ployer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
2. The Union, International Association of Machinists
and Aerospace Workers, AFL-CIO, is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
3. The Respondent did not violate Section 8 (a)(5) and
(1) of the Act by refusing ,to adopt and pay the wage
scale set out in the labor agreement executed by the par-
ties as there was no meeting of the minds between the
parties concerning the wages to be paid under the terms
of the agreement and, thus, there was no valid labor
agreement . The Respondent 's subsequent refusal to
submit the wage dispute to arbitration under this provi-
sion of the agreement and its repudiation of the entire
contract as invalid also did not violate Section 8(aX5)
and (1) of the Act.
4. The Respondent violated Section 8 (aX5) and (1) of
the Act by its unilateral implementation of its proposal
concerning wage reductions on 9 September 1985 with-
out negotiating an agreement to the reduction with the
Union and in the absence of a valid impasse concerning
this issue between the parties.
5. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has engaged in a
certain unfair labor practice in violation of Section
8(a)(5) and (1) of the Act, I shall recommend that it be
ordered to cease and desist therefrom and to take certain
affirmative actions designed to effectuate the policies of
the Act.
I recommend that the Respondent reinstate the wage
scale in effect prior to its unilateral implementation of its
wage proposal on 9 September 1985 until such time as it
has bargained a change in said wage scale with the
Union or after bargaining that issue with the Union has
reached a valid impasse concerning this issue.
I further recommend that the Respondent make the
employees whole for any loss they may have suffered as
a result of the Respondent's unilateral implementation of
its wage proposal on 9 September 1985 . All,' loss of earn-
ings and benefits shall be computed with interest in the
manner prescribed in F. W. Woolworth Co., 90 NLRB
289 (1980), and Florida Steel Corp., 231 NLRB 651
(1977).4 I do not recommend , under the circumstances of
this case, a visitatorial provision in the order as requested
by the General Counsel. See O. L. Willis, Inc., 278
NLRB 203 fn. 1 (1986).
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed5
• See generally Isis Plumbing Co., 138 NLRB 716 (1962).
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.
WALDON, INC. 587
ORDER
The Respondent , Waldon, Incorporated, Fairview,
Oklahoma, its officers , agents, successors, and assigns,
shall
1. Cease and desist from
(a) Unilaterally implementing reductions in the wage
scale of its employees without bargaining those changes
with the Union or bargaining to impasse concerning the
issue.
(b) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of
their rights guaranteed them under Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Reinstate its wage scale and benefits to that which
existed prior to 9 September 1985 when it unilaterally
implemented its bargaining proposal until such time as it
has bargained a change in the wage scale and benefits
with the Union or has reached a valid impasse concern-
ing these terms and conditions of employment . The ap-
propriate unit is:
All production and maintenance employees , includ-
ing over-the-road truck drivers, shop floor control-
lers, material handlers, quality control inspectors
and tool and die makers employed by the Respond-
ent at its Fairview, Oklahoma facility , ' excluding
office clerical employees, buyers, scheduler-plan-
ners, keypunch operators, purchasing clericals, pro-
fessional employees, guards, and supervisors as de-
fined in the Act.
(b) Make whole, with full backpay and benefits with
interest in accordance with the recommended
"Remedy," all employees in the bargaining unit who sus-
tained a loss of earnings or benefits as a result of the Re-
spondent's unilateral reduction of their wages on 9 Sep-
tember 1985.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records , timecards,
personnel records and reports , and all other records nec-
essary to analyze the amount of backpay and benefits due
under the terms of this Order.
(d) Post at its Fairview, Oklahoma facility copies of
the attached notice marked "Appendix ."6 Copies of the
6 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."
notice, on forms provided by the Regional Director for
Region 16, after being signed by the Respondent's au-
thorized representative , shall be posted by the Respond-
ent immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered , defaced , or covered by
any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
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 or-
dered us to post and abide by this notice.
WE WILL NOT unilaterally reduce the wage scales of
our employees without first bargaining a change in the
wage scales with the International Association of Ma-
chinists and Aerospace Workers, AFL-CIO, or having
reached a valid impasse with the Union concerning these
terms and conditions of employment.
The appropriate unit is:
All production and maintenance employees, includ-
ing over-the-road truck drivers , shop floor control-
lers, material handlers, quality control inspectors
and tool and die makers employed by the Respond-
ent at its Fairview, Oklahoma facility, excluding
office clerical employees, buyers, scheduler-plan-
ners, keypunch operators , purchasing clericals, pro-
fessional employees, guards, and supervisors as de-
fined in the Act.
WE WILL reinstate the wage scale existing for our em-
ployees prior to our unilateral reduction of them on 9
September 1985 and WE WILL make our employees
whole for any loss sustained by them by reason of the
reduction, with interest.
Our employees have the right to join and support
International Association of Machinists and Aerospace
Workers, AFL-CIO `or to refrain from doing so.
WALDON, INCORPORATED