Walter A. Zlogar, Inc.

National Labor Relations Board - Board Decisions

Mar 21, 1986

278 N.L.R.B. 1089 (N.L.R.B. 1986)

WALTER A. ZLOGAR, INC. 1089
Walter A . Zlogar, Inc. and Five River Carpenter
District Council . Case 18-CA-9214
21 March 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 30 September 1985 Administrative Law
Judge Howard I. Grossman issued the attached de-
cision. The Union filed exceptions and a supporting
brief, and the Respondent filed an answering brief
to the Union'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 ' and to adopt the recommended
Order.
(1) of the National Labor Relations Act (the Act). On 15
July, the Regional Director for Region 18 approved
withdrawal of so much of the charge as alleges that Re-
spondent negotiated for a contract with Local 767 which
did not have authority to enter into a contract.
This matter was heard before me in Ottumwa, Iowa,
on 15 August . Briefs have been submitted by the General
Counsel and Respondent . Upon the entire record , includ-
ing my observation of the demeanor of the witnesses, I
make the following
FINDINGS OF FACT
1. JURISDICTION
Respondent is an Iowa corporation with an office and
place of business in Ottumwa, Iowa, where it is engaged
as a general contractor in the building and construction
industry. During the fiscal year ending 28 February, Re-
spondent purchased and received at its Ottumwa, Iowa
facility goods and materials valued in excess of $50,000
directly from points outside the State of Iowa. The
pleadings establish and I find that Respondent is an em-
ployer engaged in commerce within the meaning of Sec-
tion 2(2), (6), and (7) of the Act.
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis-
missed.
' Contrary to the judge , Chairman Dotson would not attempt, in any
event , to evaluate the reasonableness of a party 's bargaining proposals.
Allbritton Communications, 271 NLRB 201 (1984).
In adopting the judge 's conclusion that the Respondent did not violate
Sec. 8(a)(5) and ( 1) of the Act , Members Dennis and Babson find it un-
necessary to rely on the judge 's findings concerning the Union's conduct
during negotiations and on his application of Continental Nut Co., 195
NLRB 841 (1972), to the facts of this case.
Elliot Rotenberry, Esq., for the General Counsel.
David M. Lofholm, Esq. (Davis, Hockenberg, Wine, Brown,
and Koehn), of Des Moines , Iowa, for the Respondent.
DECISION
STATEMENT OF THE CASE
HOWARD I . GROSSMAN , Administrative Law Judge.
The charge was filed 23 .May 1985' by Five River Car-
penter District Council (the Council), and alleges that
Walter A. Zlogar, Inc. (Respondent) negotiated for a
contract with Carpenters' Local Union 767 (the Local or
the Union), which did not have authority to enter into a
contract , and also "bargained to impasse" with a speci-
fied minimum wage offer. Complaint issued on 12 July,
and alleges that Respondent engaged in bad -faith bar-
gaining with Local 767 by insisting to impasse on the
right to unilaterally determine wages and working condi-
tions . The complaint also alleges that Respondent unilat-
erally reduced the wages of its employees without
"having reached a bona fide, good faith impasse ." These
actions are alleged to be violative of Section 8(a)(5) and
' All dates are in 1985 unless otherwise indicated.
278 NLRB No. 149
II. THE LABOR ORGANIZATION INVOLVED
The pleadings establish and I find that the Union is a
labor organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Bargaining History
Respondent for many years was a member of Allied
Construction Interests, Inc., of Cedar Rapids, Iowa
(Allied), and the Ottumwa Builders Association of Ot-
tumwa, Iowa (OBA), an association of general contrac-
tors. In May 1980, Allied and OBA executed a collec-
tive-bargaining agreement with the Council , the latter
acting on behalf of various local unions including Local
767, which had an office in Ottumwa. The termination
date scheduled in the agreement was 30 April 1983 (Jt.
Exh. 1).
The agreement established a wage rate for journeymen
carpenters beginning in May 1980, with scheduled in-
creases for the next 2 years. There were two different
schedules of wages, depending on the county where the
work was performed . The rates were higher for six
counties,2 and lower in 10 counties , including Wapello
county.3 Although Ottumwa is located in Wapello
county, the contract specifies the wages for all 10 coun-
ties as the "Ottumwa area" wages .4 Allied negotiated the
2 The counties with the higher wage rates were Benton, Cedar, Iowa,
Jones, Johnson, and Linn.
3 The counties with the lower wage rates were Appanoose, Davis, Jef-
ferson , Keokuk , Mahaska , Monroe , Van Buren , Wapello, Washington,
and Wayne.
4 The higher journeyman wage rate was $12 . 20 in May 1980 , and the
total wage package , including fringe benefits , was $13 .70. This increased
to $14.93 in May 1981, and to $16 .39 in May 1982 . The journeyman wage
rate for the Ottumwa area was $11.80 in 1981 , and the total package was
Continued
I
1090 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
overall agreement with the Council, and this agreement
was then given to OBA for negotiation of the wage rates
applicable to the Ottumwa area.
In May 1983, the parties executed an "amendment" to
the agreement insofar as it pertained to the Ottumwa
area counties.5 The amendment states that its intent is
"to reduce the cost of construction labor to a competi-
tive level in keeping with current economic conditions."
Witnesses for the parties agreed that the Ottumwa area
has been depressed economically for the past several
years.
The amendment specifies the beginning wage rate for
journeyman carpenters as $11 in the City of Ottumwa
and within a 5-mile radius of the city , and $9 for "any-
thing beyond this area in (the ) Ottumwa jurisdiction."
Apprentices were to be paid at 70 to 90 percent of the
journeyman rate, depending on the skills of the appren-
tice, and "pre-apprentices" at 50 percent. OBA also
agreed to make health and welfare , pension , and appren-
ticeship training program payments . The amendment
specifies various termination dates : 30 April 1984 for the
wage rates , and 29 April 1985 for all other clauses except
the no strike-no lockout and subcontracting clauses,
which were to continue in effect until 30 April 1986 on
jobs bid prior to 30 April 1985 (Jt. Exh. 3). There is no
evidence of a new agreement on wages after the April
1984 termination of the amendment with respect to that
subject.
B. Respondent 's Withdrawal from OBA, and the
Recent Bargaining
1. Zlogar withdraws from OBA
By letter dated "January 28, 1975 [sic]," the Council
sent OBA, care of Walter A. Zlogar, a letter on behalf of
Local 767, saying that the Local had affiliated itself with
the Council , and was prepared to negotiate a new agree-
ment . The termination date of the old agreement, ac-
cording to this letter, was "April 1 , 1975" (G .C. Exh. 3).
Zlogar identified this as a letter he received notifying
him of the termination of the amendment.6
By letters dated 22 February 1985, Respondent noti-
fied Allied Construction Interests, Inc. and Construction
Employers Council of Master Builders of Iowa that it
was withdrawing their "bargaining rights, either actual
or perceived" (G.C. Exhs. 4, 5). On the same date, Re-
spondent notified Carpenters Local 767 of the withdraw-
al, and Respondent 's intention to terminate the current
agreement. Further, the Company stated that it was pre-
pared to meet with the Local at reasonable times and
places (G.C. Exh. 6).
2. The first bargaining session, 3 April
The parties met in five bargaining sessions at the Ot-
tumwa Labor Temple. The first meeting was held on 3
April, and Respondent was represented by its president,
$ 13.30. This increased to $13.50 in May 1981, and to $15 in May 1982 (Jt.
Exh. 1, pp . 16-17; A. Exh. 2).
5 The amendment lists nine counties as constituting the Ottumwa area.
Washington county , indicated previously , is not listed.
6 It is clear that the date of the year in the letter was a typing error.
Walter A. Zlogar. The Local was represented by Busi-
ness Representative Norman Werner, committeeman
Kevin Holtzhouser, and another individual. The Compa-
ny submitted a written agreement recognizing the Union
as the representative of its employees in the 10 Ottumwa
Area counties listed in the 1980 agreement . The contract
empowered the Employer to determine specific wage
rates, with a minimum rate of $4.25 for "carpenter[s]."
The Company proposal did not contain the former refer-
ence to a pay rate for "journeyman " carpenters, and
made no reference to apprentice or preapprentice rates.
There was no offer to make health and welfare or pen-
sion fund payments, as was the case in the 1983 amend-
ment (Jt. Exh. 4).
Respondent 's president , Zlogar, testified that union
committeeman Holtzhouser said that the Union was
going back to the wage rates in the 1980 contract. How-
ever, the Union did not submit a written proposal.
Respondent proposed that, if the Union entered into an
agreement with any other contractor which concerned
the same work in the same area, with terms more favor-
able to that contractor, then such more favorable terms
would be deemed to be part of the parties' agreement (Jt.
Exh. 4, art. 11). On 14 February, prior to the first meet-
ing of the parties, Norman Werner , on behalf of Local
767, wrote to a contractor based in Cedar Rapids (Abell
Howe Co.) concerning "job concessions" at the "Hormel
Meat. Processing Plant . . . in Ottumwa , Iowa." The
letter states that the lower Ottumwa wage rate of $11,
set forth in the 1983 amendment, had terminated in April
1984, and that a higher rate was in effect. However, the
letter continued , Local 767 had approved continuation of
the $11 rate for the Hormel project only (G.C. Exh. 7).
At the hearing , Werner agreed that the Union proposed a
$16 rate to Respondent at the same time that it was al-
lowing an $11 rate to Abell Howe on the Hormel job.
Werner also testified that another union contractor,
Grooms Construction , was operating on a "day-to-day"
extension of the 1983 amendment , i.e., at the $11 rate,
inside Ottumwa, and was allowed to be nonunion outside
the city . Grooms is located in Ottumwa , according to
Werner, and that firm and Abell Howe are the only
union companies operating in the Ottumwa area.
Closely connected with the subject of pay rates are the
overtime pay provisions . The 1983 amendment required
Saturday work to be paid at time -and-a-half, except for
"make up" work caused by inclement weather during the
week . The Company's 1985 proposal eliminated this re-
quirement.
Respondent's proposed agreement contained a hiring
provision which was different from the 1980 contract.
The latter specifically required the Employer to give the
Union first opportunity to provide needed employees,
with the Union agreeing to make "every effort" to refer
qualified employees (Jt. Exh. 1, art. XX). Respondent's
1985 proposal eliminated the specific requirement set
forth in the 1980 contract, but retained the Union's
agreement to make "every effort." The Company re-
tained the right to hire from any source.'
T There are other differences . between the 1980 hiring provision and
Respondent 's 1985 proposal.
WALTER A . ZLOGAR, INC.
For contracts worth less than $1 million , with some
exceptions , the Company 's 1985 proposal allowed it to
assign work without regard for jurisdictional lines,
whereas the 1983 amendment required Respondent to
hold a prejob conference and form a composite crew for
all contracts between $250,000 and $1 million in value.
Respondent 's suggested contract contained a• dispute
resolution provision , providing for a grievance procedure
and, ultimately , binding arbitration . However, work as-
signments and "wage disputes at the time of bargaining"
were exceptions from this procedure . Respondent's 1985
proposal varied from the 1983 amendment , wherein
work assignments were the only disputes not covered by
the grievance procedure (G.C. Exhs. 3, 4).
The Company 's proposal also would have allowed it
to subcontract any portion of the work covered by the
agreement , without requiring it to bargain over the deci-
sion to subcontract or the effect of the subcontracting.
This differed from the prior agreement , which required
union approval of the employer 's subcontracting of craft
work to individuals other than signatories to the agree-
ment (Jt. Exhs. 3, 4).
The Company 's management-rights article gave it "ab-
solute control" over "requirements for foreman and fore-
man ratios." This differed from the 1980 contract, which
required , inter alia, that the employer appoint a foreman
on all jobs requiring two or more carpenters , and pay
him an amount above the journeyman rate (Jt. Exh. 1,
article III). However, this provision was dropped in the
1983 amendment , which gave the employer the same
right to determine the ratio of foremen as claimed in Re-
spondent's 1985 offer (Jt. Exh. 3).
3. The second bargaining session
The second bargaining session took place on 30 April,
with the same representatives . Company President
Zlogar attempted to set up an earlier meeting , but Union
Representative Weiner told him that this was not possi-
ble, for various reasons.
The Company submitted another proposal contract
which increased its minimum wage rate for "carpenters"
to $5 hourly (Jt. Exh . 5). The Union did not submit a
proposed contract.
4. The third meeting
On 7 May, the day before the third meeting, the Union
delivered a proposed written agreement to Respondent.
There was no provision for wages (Jt. Exh. 9). The par-
ties' third session took place on 8 May . Norman Werner
continued to represent the Union, and Walter A. Zlogar,
on this occasion assisted by labor consultant Scott Nor-
vell, represented the Company. The Company increased
its minimum wage offer to $5.50, and agreed to several
clauses on working conditions contained in the union
proposal (Jt. Exh. 6).
5. The fourth bargaining session
The fourth meeting was held on 10 May, and the same
representatives were present as during the preceding ses-
sion . The Union presented a wage proposal divided into
two parts . The first part proposed a base wage rate of
1091
$14.30 hourly plus fringe benefits-a total of $16.10-in
Ottumwa and a 5-mile radius surrounding the City (Zone
3-B). The second part reduced the base wage rate to
$13.25 and the total of wages and benefits to $15 for the
remainder of Wapello County and other counties com-
prising the Ottumwa area (Zone 3-C). The Company re-
jected this proposal , and instead offered to increase its
minimum wage to $5.75, with a limit not to exceed
$12.90 hourly . Respondent also offered to reduce its dis-
cretion to assign work without regard for jurisdictional
lines by reducing the maximum amount of contracts
giving it this right from $1 million to $750,000. The
Company accepted union language on stewards and busi-
ness representatives, and jurisdictional disputes (Jt. Exh.
7).
6. The last bargaining session
The parties met for the last time on 14 May. The
Union reduced its wage and fringe benefit proposals
slightly, to $ 14.20 hourly in Zone 3-B , and $13.20 in
Zone 3-C (Jt . Exh. 8), and told the Company that this
was its "best offer" at that time . The Union did not pro-
pose a rate for apprentices.
The Company rejected the union offer, but increased
its own minimum wage proposal to $6 hourly, not to
exceed a top limit of $ 14. As indicated previously, the
exact amount to be paid a particular employee was
within Respondent 's discretion , within these parameters.
The Company further reduced its right to assign work
outside jurisdictional lines to contracts valued not in
excess of $250,000 (Jt. Exh . 8). Respondent offered a 1-
year contract , and said that this was its "last, best and
final offer for contract settlement ." The Union rejected
this proposal . According to the parties' Joint Exhibit,
..an impasse existed in negotiations as of (that) date"
(id.). There were no further negotiations.
B. Other Evidence of the Bargaining and Respondent's
Implementation of the Last Offer
Walter A. Zlogar, took the initiative in arranging meet-
ings. He told the Union that the reason for his proposed
reduced wage rate and discretion in determining particu-
lar wage rates was the need to be competitive in the Ot-
tumwa area . Zlogar's testimony is unclear on the issue of
whether he gave this as the reason for all of his proposed
changes . In any event , as indicated , the witnesses for the
parties agreed that the Ottumwa area has been depressed
for several years. Zlogar himself testified that his busi-
ness declined from a little over $1 million in 1981 to
$680,000 in 1984.
Zlogar stated that he considered making health and
welfare payments , but did not consider it to be practical.
With respect to all of the company proposals , Zlogar as-
serted that he thought there was a chance that the Union
might accept them , because people were out of work.
Union Representative Norman Werner testified that he
had had business relations with Zlogar since the latter
became a contractor . Zlogar had a reputation of abiding
by the contract . During the recent negotiations, the
Company did not fail to meet with the Union upon re-
quest , and did not request that certain articles be dis-
1092 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cussed in a certain order . Asked whether Respondent re-
fused to discuss any proposal made by the Union,
Weiner first testified that the Company "didn ' t want to
discuss . . . too much" items it had "cut out" of the con-
tract , and then said that the Company "just moved on to
another subject or something ." The union agent did not
specify any particular subjects which had been "cut out."
Respondent 's president , Zlogar , testified that Union
Representative Werner never argued the "pro's and
con's" of specific proposals . The Union never questioned
the application of the new grievance procedure to the
Company's wage proposal , did not ask for a reason for
the elimination of the ban on subcontracting , did not
question the change in nomenclature from "journeyman
carpenter" to "carpenter," and never presented a wage
scale for apprentices . During discussion of specific sub-
jects, Werner would say, "I can't do anything about
that," or "I'11 have to go back to the Cedar Rapids
people," or "I'll have to contact Five Rivers." Union
Representative Werner testified that he had "no author-
ity" to negotiate "new language" in the contract, and
had to take such matters back to the Union 's "executive
group." He agreed that he told Zlogar that he could not
bargain on any language changes "until after Cedar
Rapids settled."
About 2 weeks after the last meeting, Respondent put
the terms of its last offer into effect . Wages paid to car-
penters have been reduced "in some cases" from the $11
rate specified in the 1983 amendment . Zlogar testified
that he is paying "in the neighborhood" of $8, $10, and
$12 hourly . He does not make health and welfare or pen-
sion contributions . Asked whether he gives the Union
first opportunity to refer employees , Zlogar responded
that it would be futile, since former employees told him
that ' the Union would penalize them if they worked for
Respondent . On one occasion he had a crew of two,
without appointing one of them foreman . He has subcon-
tracted without consulting the Union.
C. Factual and Legal Analysis
Neither party contests the stated agreement that they
had reached an impasse, and this is clearly correct. Bell
Transit Co., 271 NLRB 1272 (1984). The General Coun-
sel contends that Respondent engaged in bad-faith bar-
gaining, however, and that this bars a finding that a
"good faith" impasse had been reached or that the Re-
spondent's implementation of its last offer was lawful.
The General Counsel's argument is based on an analy-
sis of Respondent's contract proposals. In sum , the argu-
ment runs, those proposals "would exclude the Union
from representation of unit employees," and were "so
unpalatable to the Union that Respondent should have
known that agreement was impossible."
The General Counsel states that Respondent's last
wage proposal "provided no restriction on Respondent's
increasing or decreasing wages of employees as it saw fit
whenever it saw fit." This is not strictly true, since Re-
spondent would have been obligated to maintain at least
the $6 base price set forth in its last offer. The General
Counsel cites Moore of Bedford, 187 NLRB 721 (1971),
enf. denied 451 F.2d 406 (4th Cir. 1971). The essential
facts in this case, and the disagreement of the Court of
Appeals for the Fourth Circuit with the Board , are best
set forth in the court' s language:
We agree with the Board that an employer is
bound to discuss wages and bargain about them in
good faith . However, we do not agree that the in-
sistence upon its proposed Article . . . amounted to
a refusal to bargain about wages . Therefore, the in-
sistence upon limiting the arbitration and grievance
• procedure to whether or not the base rate could be
earned was not to insist upon the right to set wages
unilaterally.
[I]t is doubtless true that this clause would
have given the Company the power to lower all
wages to the base rate by simply setting unreason-
ably low individual piece rates . It is this power cou-
pled with the limitation on binding arbitration
which seems to have been determinative for the
Trial Examiner and the Board.
What the Board and the Trial Examiner seem to
have overlooked is that the Company was not ada-
mant that the base rate remain at the 1965
figure.... Regardless of whether or not the base
rate figures advanced by the Company were such a
low rate of pay as to be meaningless in light of
what the employees had earned and what they ex-
pected to earn, the record discloses that the Compa-
ny at no time refused to negotiate this base rate.
The last offer made by the Company was a base
rate which varied from $1.80 to $2. 00 depending on
the employee classification .... The idea that the
Company was refusing to bargain about wages
merely by insisting upon its proposals , independent
of what the base rate was, is untenable because the
Board 's theory depends upon the base rate being so
low as to be meaningless . 451 F.2d at 409-410.
The court's reasoning applies to the facts in this case,
since Respondent was willing to negotiate the base rate
and, indeed , made increases in its original offer.
The General Counsel also cites NLRB v. Berkley Ma-
chine Works Co., 189 F.2d 904 (4th Cir. 1951), wherein
the Court of Appeals for the Fourth Circuit adjudged an
employer in contempt of an enforced Board order, in
part because the employer, although " willing to give as-
surances that it would pay the prevailing rate in the area
.. . was unwilling to bind itself to pay any specific rate
for any specified length of time." Id. at 906. This case is
inapposite, because, unlike the base rate in the instant
case-upon which Respondent did negotiate-there was
no bargaining over the "prevailing rate in the area," or
any minimum rate.8
Although the $6 base rate in Respondent 's last offer
was low, it was not so low as to be meaningless, and
may well have been above the rate being paid by
8 In S-B Mfg. Co ., 270 NLRB 485 ( 1984), the Board agreed that the
totality of the employer's conduct manifested bad-faith bargaining. That
conduct included the employer 's insistence on "the right to grant unilat-
eral wage increases above the minimum rates ." Id. at 494. Here again, as
in Berkley Machine, the bottom rate was not a negotiated figure.
WALTER A. ZLOGAR, INC.
Grooms Construction, one of Respondent 's competitors,
who was allowed by the Union to operate outside the
City of Ottumwa without a union contract.
Compounding the Respondent 's arbitrariness on wage
rates , the General Counsel argues , was his insistence on a
dispute settlement provision which would exclude wage
determinations from the settlement procedure . This does
not necessarily follow from the pertinent language of the
provision as follows:
Article No. 5
DISPUTE SETTLEMENT
It is agreed that the sole and final remedy for reso-
lution of disputes involving interpretation or appli-
cation of the terms of the Agreement (other than
concerning an assignment of work and wage disputes
at the time of bargaining) shall be settled in accord-
ance with the procedures herein set forth. [Empha-
sis added .] [G.C. Exh. 8, art. 5.]
The literal meaning of this language is that only a
wage dispute at the time of bargaining is excluded from
the grievance procedure , i.e., that an employee's dis-
agreement with Respondent 's wage determination at a
later . time is not so excluded . Of course , it is difficult to
imagine a wage dispute at the time of bargaining other
than the bargaining dispute itself . The proposed language
is ambiguous , and thus does not clearly express the
meaning read into it by the General Counsel. In the
event of its incorporation into a binding agreement, a
proper construction of it would be against the party
drafting it, i.e ., Respondent , thus allowing grievances of
wage determinations.
The General Counsel also points to Respondent's re-
fusal to pay fringe benefits . However, this was not a
demand giving Respondent the right to determine bene-
fits during the life of an agreement , it was simply the
Company's refusal to pay benefits, a position which in
itself does not manifest bad faith.
Although Respondent progressively limited its original
demand to assign work without regard for jurisdictional
lines, the General Counsel argues that the Company's
final position nonetheless demonstrates an intention to
use employees with maximum flexibility . This argument
is derived from the original provision in the 1983 amend-
ment , as follows:
CRAFT JURISDICTION
D. On projects less than $250,000 the contractor
may assign the work to the crafts employed who
can most efficiently perform the work in question.
Contractors intent is to assign the work as close to
jurisdictional lines as economically feasible. [Jt.
Exh. 3, p. 4.]
Respondent 's last offer on this subject reads as follows:
On contracts of $250,000 and under (excluding me-
chanical and electrical work) there will be a relax-
ation of strict enforcement of craft jurisdictional
lines whereby the contractor may assign work to
1093
the craft employed who can most efficiently per-
form the task or work . [Jt. Exh . 8, art. 15.]
Although there is some difference in language, it is in-
sufficient to demonstrate bad faith.
With respect to Respondent 's proposed elimination of
a requirement that it give the Union first opportunity to
refer employees , the General Counsel makes two argu-
ments: (1) lack of a referral requirement would make it
easy for Respondent to avoid the Union in staffing a job,
and thus make it more difficult for the Union to police
the job ; (2) the Company can hire whomever it wants,
and thus avoid hiring union employees . The first argu-
ment appears to suggest that an employer manifests bad
faith any time he refuses to agree to a referral clause-a
questionable proposition of law . The second argument
overlooks the fact that the employer always had com-
plete freedom to hire whomever he wanted , both under
the 1983 amendment and the preceding 1980 agreement.
[Jt. Exh . 1, art. XX ; Jt. Exh . 3, art. 4.]
Finally , the General Counsel attacks Respondent's pro-
posed elimination of the ban on subcontracting . In fact,
there was no absolute ban in the 1983 amendment, the
pertinent provision of which . reads as follows:
6. SUBCONTRACT CLAUSE
The contractors may subcontract any portion of
their work covered by this agreement , subcontract-
ing of craft work to other than signators to this
agreement may be done only with prior approval of
Unions involved.
The Unions agree to support Union subcontract-
ing for work of other crafts, only if those crafts are
a party to this amendment . [Jt. Exh. 3, p. 4.]
Although this language is subject to interpretation, it
appears to give the employer an absolute right to sub-
contract noncraft work, and requires the Union to agree
to the subcontracting of craft work to signatories to the
agreement . The only meaningful restriction is on the sub-
contracting of craft work to employers not signatory to
the agreement . Although Respondent's proposed elimina-
tion of any ban on subcontracting gives it greater flexi-
bility than the 1983 amendment , the change is not so
great as to indicate bad faith.
A conclusion that the overall bargaining did not mani-
fest bad faith is warranted by Respondent's history of ob-
servance of union contracts , by the fact that Zlogar took
the lead in arranging negotiating sessions , agreed with
various union positions and made increases in his wage
offers (Frontier Dodge, 272 NLRB 722 (1984)), made
complete contract proposals (Herrick & Smith, 275
NLRB 398 (1985)), and observed the procedural require-
ments of good-faith bargaining (Allbritton Communica-
tions, 271 NLRB 201 (1984)).
It is incorrect to argue that the employees were de-
prived of meaningful union representation by Respond-
ent's last offer. They had a contract with agreed-upon
working conditions , a grievance procedure leading to
binding arbitration, workman 's compensation insurance, a
no-lockout clause (in conjunction with a no-strike
clause), a qualified provision allowing a union agent on
1094 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the job and a provision for stewards , specified hours of
work , holidays, a base rate of pay and overtime pay, and
other protections . [Jt. Exh. 8.]
In this case , Respondent 's business unquestionably had
declined in recent years, and it was operating in an eco-
nomically distressed area . Its contract proposals were
based on this fact and on its need to be competitive with
nonunion firms . Its reduction of wages and other
changes, after impasse , did not violate the Act. Eagle Ex-
press Co., 273 NLRB 501 (1984).
Finally, union agent Werner 's lack of authority to ne-
gotiate an agreement without the approval of the Union's
"executive group," the delay in reaching any agreement
until "Cedar Rapids settled," and union favoritism
toward Respondent 's competitors , suggest lack of good
faith by the Union itself. In similar circumstances, the
Board agreed with the conclusion that the Union's con-
duct "precluded the existence of a situation in which Re-
spondent's good faith could be tested ." Continental Nut
Co., 195 NLRB 841, 858 (1972). The General Counsel
argues that the Continental Nut rationale should not
apply herein, because the employer in that case was not
found to have bargained in bad faith . The reason , in part,
was the fact that the Union 's conduct precluded any test-
ing of the employer 's good faith-there can be no con-
clusion on good or bad faith if any testing of same is pre-
cluded . I conclude that the Continental Nut principle is
applicable to this case , and constitutes a further reason
for finding that Respondent did not bargain in bad faith.
Accordingly, its implementation of its last offer , after im-
passe, was not unlawful.
In accordance with my findings above , I make the fol-
lowing
CONCLUSIONS OF LAW
1. Walter A. Zlogar, Inc. is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
2. Five River Carpenter District Council is a labor or-
ganization within the meaning of Section 2(5) of the Act.
3. Respondent has not committed any unfair labor
practice.
On the foregoing findings of fact and conclusions of
law and the entire record,9 I issue the following recom-
mended"'
ORDER
The complaint is dismissed in its entirety.
6 The General Counsel 's unopposed motion to correct the transcript is
granted.
10 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. 102.45 of the Rules , be adopted by the
Board and all objections to them shall be deemed waived for all pur•
poses.