Abex Corp.

National Labor Relations Board - Board DecisionsDec 16, 1974

215 N.L.R.B. 665 (N.L.R.B. 1974)

ABEX CORPORATION-AEROSPACE DIVISION 665 Abex Corporation-Aerospace Division and Oil, Chemical & Atomic Workers International Union, AFL-CIO. Case 31-CA-3842 December 16, 1974 "IT IS HEREBY ORDERED that any allegations concerning conduct not found specifically herein to violate the Act are dismissed." 3. Substitute the attached notice for the Administra- tive Law Judge's notice. DECISION AND ORDER On July 10, 1974, Administrative Law Judge Russell L. Stevens issued the attached Decision in this proceed- ing. Thereafter, Respondent filed exceptions and a sup- porting brief, The General Counsel filed cross-excep- tions and a supporting brief, and the Charging Party filed an answering brief. The Board has considered the record and the at- tached Decision in light of the exceptions, cross-excep- tions, and briefs,' and has decided to affirm the rul- ings , findings,' and conclusions of the Administrative Law Judge only to the extent consistent herewith,' and to adopt his recommended Order, as modified herein.' ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act , as amended , the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Judge , as modified herein, and hereby orders that Respondent , Abex Cor- poration-Aerospace Division , Oxnard, Cali- fornia , its officers , agents , successors, and assigns, shall take the action set forth in the said recommended Or- der, as modified below: 1. Delete the phrase ". . . except for such changes to which the Union has acquiesced . . ." from para- graph 2(b). 2. Add the following paragraph after paragraph 2(e): I Respondent 's request for oral argument is hereby denied , since the record, exceptions, cross-exceptions, and briefs adequately present the posi- tions of the parties 2 The Respondent has excepted to certain credibility findings made by the Administrative Law Judge It is the Board's established policy not to over. rule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect Standard Dry Wall Products, Inc, 91 NLRB 544 (1950), enfd 188 F 2d 362 (C A 3, 1951) We have carefully examined the record and find no basis for reversing his findings 3 Chairman Miller does not agree with Members Fanning and Jenkins and the Administrative Law Judge that the reclassification of the salaried em- ployees as hourly paid employees merely because they voted for inclusion in the existing unit is "inherently destructive " of Sec 7 employee rights and therefore violative of Sec 8(a)(3) of the Act Members Kennedy and Penello agree that the reclassification was not a separate violation of Sec 8 (a)(3), nor do they regard this action as violative of Sec 8(a)(5) and ( 1), for the reasons set forth in their attached dissent Accordingly, we shall dismiss the 8(a)(3) allegation in the complaint The Administrative Law Judge inadvertently included the phrase "ex- cept for such changes to which the Union has acquiesced" in his recom- mended Order There is no evidence in this case that the Union acquiesced in any of Respondent 's unilateral changes Therefore , we shall delete the above-quoted phrase from the Order adopted herein MEMBERS KENNEDY and PENELLO, dissenting: We dissent from the majority's finding that Re- spondent violated Section 8(a)(5) of the Act by unilat- erally changing job classifications, wages, methods of payment, and fringe benefits in automatically applying the terms of an existing collective-bargaining agree- ment to employees who voted in an Armour-Globe elec- tion to join the production and maintenance unit cov- ered by that agreement. It is our firm and continuing belief that the Board majority in this case and in Feder- al-Mogul Corporation, Bower Roller Bearing Division,' has substantially misconstrued the parties' duty to bargain subsequent to an Armour-Globe elec- tion. In spite of the existence of a valid unitwide con- tract, the majority requires Respondent and the Union, parties to the operative agreement, to bargain afresh concerning terms of employment for fringe employee groups who have voted to be represented "as part of the unit subject to the agreement. This ad hoc interim bargaining requirement constructively bifurcates the bargaining unit for the duration of the existing con- tract, renders meaningless the distinctions drawn be- tween Armour-Globe and normal representation elec- tions, and negates the comprehensive nature of the agreement already negotiated by Respondent and the Union. Since June 14, 1972, the Union has been certified as the exclusive collective-bargaining representative for a production and maintenance unit at Respondent's plant. On November 18, 1972, the Union and Respond- ent executed a 3-year collective-bargaining agreement concerning the unit. Section II of the agreement con- tains standard language recognizing the Union as ex- clusive representative for the employees in the bargain- ing unit certified by the Board in its certification in Case 31-RC-2076 and limits applicability of the con- tract to those employees. On January 16, 1973, the Union petitioned for a representation election in a proposed separate unit of salaried employees from three different departments at Respondent's plant. Subsequent to a hearing on the petition, the Regional Director for Region 31 issued his Decision and Direction of Election in which he found a separate unit was not appropriate. In view of the functional similarity and community of interests be- tween the fringe employee groups and the existing pro- duction and maintenance unit, the Regional Director directed an Armour-Globe election among the fringe 5 209 NLRB 343 (1974), Members Kennedy and Penello dissenting 215 NLRB No. 114 666 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees, who were to vote separately within their own departments. Eligible voters were faced with a specific choice: be represented "as part of' the existing production and maintenance unit or remain unrepre- sented. On the day prior to the election, Respondent in- formed all eligible voters of its view that an affirmative vote for union representation would result in automatic coverage by the existing unit contract. The changes in terms of employment which would result from applica- tion of this contract to salaried employees were detailed in a printed schedule. On the following day, May 24, 1973, a majority of salaried employees voting in each department cast votes in favor of union representation. Subsequent to the Board's certification of the results of the election and the giving of notice to the Union and the employees involved, Respondent unilaterally in- stituted the predicted changes: (1) conversion of all salaried employees affected to unit contract wage clas- sifications and corresponding hourly wage payment scales; (2) loss of all fringe benefits accruing to salaried employees alone; and (3) addition of all fringe benefits accruing by contract to hourly paid unit employees. No exsalaried employee suffered an earnings reduction as a result of his conversion to an hourly wage classifica- tion. In fact, some employees enjoyed considerable wage increases. The reduction in fringe employment benefits, however, was significant. Only one meeting between representatives of Re- spondent and the Union took place prior to implemen- tation of the above changes. Respondent's representa- tive at that meeting adhered to the view that the changes to be instituted were automatically required by operation of the collective-bargaining agreement. As a consequence of Respondent's position concerning auto- matic coverage, no bargaining took place and no fur- ther meetings were scheduled. The Union thereafter filed the charges in this case. The Administrative Law Judge and the majority rely on the reasoning of the majority in Federal-Mogul in finding Respondent's conduct violated Section 8(a)(5). We dissented from the decision in Federal-Mogul' and in the similar cir- cumstances of this case we again cannot agree with the majority.' We believe that in reaching accord on a collective- bargaining agreement the parties clearly contemplated unitwide coverage for the effective life of the contract. They bargained in apparent good faith, executed an agreement, and thereby discharged their duty to bar- gain concerning contract items of unitwide scope. When the employees herein cast their ballots for union representation in the Armour-Globe election, they ex- pressed their desire to become a part of a collective- bargaining unit already subject to an agreement made between its certified representative and the Respond- ent. It follows inescapably that the contract terms which concern all employees in the unit must apply to the exsalaried employees. The Supreme Court's decision in H. K Porter, Inc. v. N.L.R.B., 397 U.S. 99 (1970), is inapposite in the context of this case. Neither party to the collective- bargaining is being compelled to agree to any substan- tive provision in a contract between them. The changes in terms of employment for the exsalaried employees involve the application of substantive contractual pro- visions already agreed upon in writing by Respondent and the Union. The Court has previously stated that: "The very purpose of providing by statute for the col- lective agreement is to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group. Its benefits and advantages are open to every employee of the represented unit, whatever the type or terms of his pre-existing contract of employment."8 The only substantive change not previously agreed to by the parties-inclusion of the exsalaried employee groups in the unit-has subsequently been consented to by the parties through their participation in the Ar- mour-Globe election, ratified by the vote of the em- ployees in that election, and certified by the Board. Our colleagues in the majority admit that the exsalaried employees have become part of the existing unit, yet they consider them as a group apart from those em- ployees subject to the collective-bargaining agreement. By requiring the Respondent to bargain in the wake of an Armour-Globe election, the majority thus confuses the results of that type of Board proceeding with the results of a regular representation election. As fully explained in the dissent to Federal-Mogul, an Armour- Globe election is distinguishable in that: (1) the eligible employees decide whether to join an existing unit or remain unrepresented; (2) a union has already been certified as representative for the unit, and therefore a certification of results, not representative, will issue; and (3) the parties have already discharged their duty to bargain by agreeing to specific terms in a collective- bargaining agreement covering the existing unit.' Certainly there can be no dispute that the benefits granted exsalaried employees in this case are those en- joyed by all others in the unit and the benefits with- drawn from the exsalaried employees are those not available by contract to any unit employee. All unit employees are hourly paid, not salaried, and the con- 6 Id, at 346 1 Since we do not, in any event, consider Respondent's conduct violative 8 J I. Case Company v NL R B., 321 U S 332, 338 (1944) of the Act, we agree with Chairman Miller in dismissing the 8(a)(3) allega- 9 Federal-Mogul Corporation, supra, 346-347, see also NLRB Field tion Manual, sec 11090 2(c)(1) ABEX CORPORATION-AEROSPACE DIVISION 667 tract wage classifications assigned to exsalaried em- ployees correspond closely to the classifications which the Regional Director in his Decision suggested as the equivalent hourly grade for work being done by the then salaried employees . These employees may, of course , grieve their classifications according to proce- dures contractually available to all unit employees. The Administrative Law Judge and the majority strictly and literally construe the contract 's union recognition provision to preclude the automatic exten- sion of coverage to after-acquired employee groups not expressly identified as included in the unit and repre- sented at the time of contracting . We disagree with this interpretation . At the time the agreement was reached, coverage applicable to the employees and employee groups identified as within the unit by Board certifica- tion in Case 31-RC-2076 was coextensive and synony- mous with coverage applicable to the unit as an entity. Therefore , the recognition clause utilizes the certifica- tion as an instrument clearly identifying the unit. When Board procedures and joint party action subsequently permit employee groups to join the unit during the term of the contract , however, section II must not be so restrictively interpreted in isolation from the rest of the contract and the circumstances surrounding its making as to preclude express or constructive amendment of the language specifying employees as included in the unit . Such a procedural amendment of the contract is necessary to sustain the essential identity between the sum of employees who are "part of the unit and the unit as a whole , since the bargain already struck be- tween the parties was meant to comprehend the unit and all employees within it. Our position in this case does not preclude parties to a collective -bargaining agreement from contractually providing in advance for interim bargaining or preser- vation of status quo terms of employment for unknown groups of employees joining the existing unit sometime during the term of contract coverage ; nor do we con- tend that there is no duty to bargain concerning matters unique to such after -acquired groups . We do believe, however , that the majority's absolute requirement of fresh bargaining creates a double certification proce- dure and permits employees voting in an Armour-Globe election to circumvent the limitations imposed therein on their choice of representation. Since the Armour-Globe election in this case took place within a few months of the unit agreement's execution, the majority has assented to the negotiation of separate employment terms for exsalaried employees who would be compensated as a distinct unit subgroup for over 2 years!In J. I. Case Company, supra, the Supreme Court suggested the ill effects of separate agreements which may preserve advantageous terms of employment for individual employees: . . . advantages to individuals may prove as dis- ruptive of industrial peace as disadvantages. They are a fruitful way of interfering with organization and choice of representatives ; increased compen- sation , if individually deserved , is often earned at the cost of breaking down some other standard thought to be for the welfare of the group, and always creates the suspicion of being paid at the long-range expense of the group as a whole... . The workman is free , if he values his own bar- gaining position more than that of the group, to vote against representation.. . .10 Even more than the employees concerned in Federal- Mogul, eligible voters in this case had a clear under- standing based on Respondent 's written communica- tions that an affirmative vote for union representation in the existing unit would entail automatic contract coverage. They and the Union may also be held to the knowledge that the Regional Director of the Board had found that their representation as a separate unit would not be appropriate. Although we would, in any event, permit the automatic extension of coverage for unit- wide contract terms, we think the vote cast by the exsalaried employees in this instance was a particularly knowing and intelligent one. We cannot agree that em- ployees who have knowingly chosen to be represented "as part of ' an existing unit are entitled through their representative to fresh bargaining with the Respondent concerning terms of employment to be applied to them. Accordingly, we find that the Respondent's conduct in automatically converting the exsalaried employees to unit contract employment terms subsequent to the Ar- mour-Globe election was not violative of Section 8(a)(5) of the Act. We would dismiss the complaint in its en- tirety. 10 J I Case Company, supra, 338-339 APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government We are posting this notice to inform you of the rights guaranteed to you by the National Labor Relations Act. WE WILL NOT unilaterally apply the existing col- lective-bargaining agreement we have with Oil, Chemical & Atomic Workers International Union , AFL-CIO, Local 1-895, or unilaterally change the wages, rates of pay, and other condi- tions of employment for employees in the unit set forth below, who by voting to be represented have 668 DECISIONS OF NATIONAL LABOR RELATIONS BOARD indicated their desire to be included in the existing production and maintenance unit currently repre- sented by the above-named labor organization. All production and maintenance employees employed by Abex Corporation-Aerospace Division at its plant located at 3151 West Fifth Street , Oxnard , California , including salaried parts planners and technicians employed in the engineering test lab , salaried tool makers em- ployed in the toolroom and salaried machinists employed in the model shop, but excluding of- fice clerical employees , sales and service em- ployees, technical employees, FLSA exempt employees , other salaried employees , guards and supervisors as defined in the Act constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. WE WILL NOT refuse to bargain collectively with the Oil, Chemical & Atomic Workers Interna- tional Union, AFL-CIO, Local 1-895, as the ex- clusive representative of the employee unit set forth above. WE WILL NOT change job classifications , wages, methods of payment , and benefits of salaried em- ployees because they designate and select Oil, Chemical & Atomic Workers International Union, AFL-CIO, Local 1-895, as their collec- tive-bargaining representative. WE WILL NOT in any other manner interfere with, restrain , or coerce you in the exercise of your rights guaranteed in Section 7 of the Act. WE WILL, upon request, bargain collectively with the above-named labor organization, as the exclusive bargaining representative of the em- ployees in the unit set forth above. WE WILL reinstate the status quo ante as it ex- isted prior to July 1, 1973, with respect to em- ployees in the unit set forth above , and make said employees whole for any loss occasioned by our unilateral actions. ABEX CORPORATION-AEROSPACE DIVISION DECISION STATEMENT OF THE CASE RUSSELL L. STEVENS, Administrative Law Judge: This mat- ter was heard at Ventura , California , on May 15 and 16, 1974. The complaint , issued March 26, 1974, is based on a charge filed June 27, 1973,' by Oil, Chemical & Atomic Workers International Union , AFL-CIO (hereinafter referred to as ' Unless stated to be otherwise , all dates herein are within 1973 the Union). The complaint alleges that Abex Corporation-Aerospace Division (hereinafter referred to as Respondent), violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act, as amended (hereinafter re- ferred to as the Act). Issues The issues herein are 1. Whether this matter should be deferred for submission to an arbitrator 2. Whether the Union abandoned exsalaned employees2 of Respondent and failed in its statutory duties as exclusive representative of said employees. 3. Whether said exsalaried employees deserted the Union. 4 Whether employment changes made by Respondent, effective June 30 , 1973, were matters subject to bargaining with the Union , or whether the changes could be instituted unilaterally by Respondent. Said changes were in job classifi- cations, wages, methods of payment , and fringe benefits. All parties were given full opportunity to participate, to introduce relevant evidence , to examine ' and cross-examine witnesses , and to argue orally Briefs, which have been care- fully considered, were filed on behalf of the General Counsel, Respondent , and the Union. Upon the entire record, and from my observation of the witnesses and their demeanor, I make the following: FINDINGS OF FACT I THE BUSINESS OF RESPONDENT At all times material herein Respondent has been , and now is, a Delaware corporation with an aerospace division office and plant facility in Oxnard , California, where it manufac- tures pumps, valves , and other aircraft parts . In the course and conduct of its business operations at Oxnard, Respondent annually sells and ships goods valued in excess of $50,000 to customers located outside the State of California, and annu- ally purchases and receives goods valued in excess of $50,000 directly from suppliers located outside the State of California. 11 THE LABOR ORGANIZATION INVOLVED Oil, Chemical & Atomic Workers International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. The Background On or about June 6, 1972, production and maintenance employees of Respondent' s Oxnard plant, excluding office clerical , sales and service, technical, FLSA exempt, other salaried employees , and guards and supervisors , designated and selected the Union as their representative for collective 2 Employees involved in this controversy are parts planners and techni- cians in the engineering test lab , toolmakers in the toolroom , and model shop machinists, all of whom were salaried employees until June 30, 1973, at which time they were reclassified to hourly positions These employees are referred to herein as exsalaned employees ABEX CORPORATION-AEROSPACE DIVISION 669 bargaining with Respondent On or about June 14, 1972, the National Labor Relations Board certified the Union as the exclusive representative for the purpose of collective bargain- ing for all said employees. The Union, Local Union No. 1-895, and Respondent en- tered into a contract covering the production and mainte- nance unit described above for the period November 18, 1972, to November 15, 1975. On or about May 24, the three groups of exsalaried em- ployees involved herein, which were formerly excluded from the aforesaid unit, voted to designate and select the Union as their representative for collective bargaining with Respond- ent. On or about June 4 the Union was certified as exclusive bargaining representative for said three groups of employees, and, on June 20, amended certification of results of election was issued stating that the Union may bargain for said em- ployees as part of the production and maintenance unit de- scribed above Following advance notice to employees of proposed em- ployment changes, and after explicit refusal to bargain with the Union about the changes, Respondent on June 30 unilat- erally changed the job classifications, wages, method of pay- ment (from salaried to hourly), and fringe benefits of the exsalaned employees involved herein. B Contentions of the Parties General Counsel contends that the certification of June 20 is clear and unequivocal-that it includes the exsalaried em- ployees in the production and maintenance unit . He contends that the employment changes instituted by Respondent affect the exsalaned employees and must be bargained, and that Respondent refuses to bargain about those changes. Finally, he contends that the Union is the agent with whom Respond- ent must bargain Respondent contends that the issues herein should be re- ferred to an arbitrator , that the Union abandoned the ex- salaried employees and does not want to represent them; that the exsalaried employees deserted the Union and does not want it to represent them ; and that it has no duty to bargain with the exsalaried employees because those employees, by their vote at the election , automatically came under the cov- erage of the collective-bargaining agreement between the Union and the Company covering some 300 production and maintenance (P and M) employees.' C. The Collyer Issue' Respondent's first defense is that the controversy herein is one that should be referred to an arbitrator for decision. 3 Respondent argues in its brief that, although it is unable to cite law for its contention, it believes that "we truly seem to be in a posture of accre- tion," and that, therefore, "in this context, there is no immediate bargaining as to the newly accreted employees There is, instead, automatic contract coverage " That argument is rejected as having no basis in fact or law, so far as this case is concerned Addition of the exsalaried employees to the P amd M unit was by way of election and certification, not by accretion In any event, the legal result sought is no different from that sought by way of Vickers, inc, 153 NLRB 561 (1964), discussed below Neither Respondent's unsupported claim of accretion, nor Vickers, controls the issues herein Collyer Insulated Wire, A Gulfand Western Systems Co, 192 NLRB 837 (1971) Article II, section 1, of the collective-bargaining agreement between the parties provides as follows: The Company recognizes the Union as the exclusive bargaining agent with respect to rates of pay, hours, and conditions of employment for all employees specified by the National Labor Relations Board Certification #31-RC-2076. The Company will bargain with no other Union for representation of employees within this bargaining unit during the life of this Agreement. Article XVIII of said agreement provides a five-step griev- ance procedure, including arbitration upon request of either party, made within 7 workdays of the final meeting held pursuant to step 3 of the procedure. The agreement states. The arbitrator shall have no power to add or subtract from or modify any of the terms of this agreement, any agreements made supplementary hereto, nor to establish or change any job rate. Respondent's offer of evidence on this issue was quite lim- ited. Attempts to introduce evidence showing how the subject was handled administratively were rejected as immaterial and irrelevant. Any such evidence that may have found its way into the record indirectly has been considered and given its proper weight. It is noted that one of Respondent's affirmative defenses is that the Union abandoned the exsalaried employees, and another defense is that said employees deserted the Union Those two positions are antagonistic to a Collyer defense. Obviously, the Union would not press a case in arbitration for employees it had abandoned, or for those who deserted it. Further, the Union here contends that the agreement between the parties does not encompass the exsalaried employees. Any such employees' interest in pursuing the grievance procedure under that agreement would clash with the position of the Union. Collyer cannot be a defense in such circum- stances 5 In any event, the record does not show that either party to the agreement seriously wanted or considered arbitration. No exsalaried employee has filed a grievance to initiate the griev- ance procedure. The Union has not filed a grievance under the agreement, and Misbrener testified without contradiction "We so [saw] no basis for arbitration," even though the Union felt "we should go to arbitration." Respondent ac- knowledged at hearing that, as the record shows, it was will- ing to arbitrate only subject to its reservation of right to litigate the issue if it was not satisfied with results of arbitra- tion . Thus, it seems clear that neither party was willing to submit the issue to an arbitrator. The only meeting between the parties held to discuss the subject of arbitration illustrates their respective positions. That meeting, held August 2, re- sulted in no submission agreement. Respondent has the burden of its Collyerdefense. Elements of that defense must be litigated, if it is to be the basis for decision.6 Respondent did not meet its burden; require- ments for deferral outlined in Collyer are not present. The dispute herein does not, in its' entirety, arise from the existing 5 Kansas Meat Packers, a Division of Aristo Foods Inc, 198 NLRB No 2 (1972) 6 MacDonald Engineering Co, 202 NLRB 748 (1973) 670 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement . Further, a fully effective remedy for statutory violations that can be found are beyond the power and au- thority of an arbitrator. Finally, there is no showing that this dispute arises within the confines of a long and productive collective-bargaining relationship. In view of the foregoing, it is clear that deferral would not effectuate the purposes of the Act, and it is so found. D. The Abandonment Issue Respondent contends that the Union does not want to represent the exsalaned employees, and that it has abandoned them. Joseph M. Misbrener was called by the General Counsel and stated that he has been an International representative for the Union since 1963. He said he attempted to bargain with Respondent for the exsalaried employees shortly after the Union's certification as bargaining representative June 20, but was told by Respondent's representative at a meeting set up for bargaining purposes that Respondent had no duty to bargain concerning those employees and would not bar- gain . Respondent also told Misbrener that the exsalaned em- ployees would be changed to hourly employees, that benefits would be changed, and that the matter would not be bar- gained. James Donald Sword, hereinafter referred to as Sword, financial secretary of Local 1-895, was called by Respondent and testified that in June 1973 the Union "added . to our roster" the names of the exsalaried employees (except one). He said the initiation fee was reduced from $25 to $6 for each such employee, and that all dues were waived, pending settle- ment of this controversy. Sword also testified that the Union posted a notice on the bulletin board just after the election, congratulating the exsalaned group and "welcoming them into our unit." Misbrener was called by Respondent, and testified that he and the union attorney met with Respondent's representative, John D Henderson, and Respondent's attorney on August 2 to discuss the possibility of arbitration of the dispute herein. He said agreement to arbitrate was not made, primarily be- cause of inability of the two sides to arrive at a submission agreement . He testified, "It was our position that we should go to arbitration," but the union attorney said Respondent's agreement to arbitrate with the proviso that a decision against Respondent would be subject to judicial review was "not a good faith offer to arbitrate." David Lee Goldbach, called by Respondent, testified that he is a member of the production and maintenance unit, and a negotiator on the workmen's committee ( union steward). He testified that the exsalaried employees "belong to our local," and that he is "happy to have them there." Raul Ramon Ramirez was called by Respondent He testi- fied that he is unit chairman and vice president of the Union, and is in the production and maintenance unit. When asked, "Do you want them [Note exsalaned employees] in your Union?" he replied, "Of course." When asked, "You are happy to have them there?" he replied, "Yes." He said he has never told Respondent that the Union does not speak for the exsalaried employees. Misbrener was recalled by Respondent and on cross- examination testified that he had met with the exsalaried employees on "half a dozen" occasions since the election, including two meetings to discuss "proposals that we might put on the bargaining table to the company." He testified that he expected to bargain with Respondent for the exsalaned group, sooner or later. Respondent's representative, John D. Henderson, testified that he had never been told by an official of the International Union or of Local 1-895 that the Union was not interested in representing the exsalaried employees. Albert C. Stuebing, personnel director for Respondent, testified that he once heard Raul Ramon Ramirez say some- thing to the effect that "I don't represent those people [Note: exsalaried employees]," but he also testified that he never heard Ramirez state that either the local or the Interna- tional no longer wanted to represent the exsalaried group. He further testified that no representative of the International ever made such a statement to him. The foregoing testimony is credited. Respondent adduced no affirmative evidence in support of its contention that the Union abandoned the exsalaned em- ployees. The only testimony even remotely favorable for Re- spondent is that which tends to show (in Respondent's view) that, possibly, the Union could have pressed harder for arbi- tration. However, that conclusion is highly speculative at best. Union officials and representatives, exsalaried and hourly employees, and even Respondent's officials uniformly testi- fied that the Union was ready, willing , and able to represent the salaried group, or that they had heard no comment from union officials to the effect that the Union did not want to represent the exsalaned employees. In view of the record thus made, it is clear that the Union did not abandon the salaried employees, and it is so found. E. The Desertion Issue Respondent contends that the exsalaned employees did not want the Union to represent them, and that they deserted the Union. Sword testified that one employee (Joe Salas) withdrew from the Union in April 1974, when he changed from an hourly to a salaried job, and that he has paid no dues since then, for the same reason other exsalaned employees have not paid. (Pending legal action.) He said there have been no withdrawals of cards by any exsalaried employee. Respondent's witness, Fred Ishiguro, testified that he is an exsalaried employee, that he wants representation by the Union, and that he is satisfied with the representation of the Union Respondent's witness, Ottorino Bettiga, testified that he is an exsalaried employee, and that "The Union has fought for us all the way. They have spent a lot of money for twenty people." When asked, "Do you feel that the Union has really been going to bat for you in every instance, given you repre- sentation that you want?" he replied, "Yes, sir." Respondent's witness, James Joseph O'Leary, testified that he is an exsalaried employee, and that all of his fellow work- ers in the test lab seem to be happy with the Union. Wilbur Stanley Parsons, called by Respondent, testified that he is an exsalaried employee, and that he is "very much" happy with the Union. ABEX CORPORATION-AEROSPACE DIVISION 671 Respondent's witness, Bob Gale Core, testified that he is an exsalaried employee, and that he is not interested in seeing the Union decertified He said "the Union had supported us legally as best they could." Respondent's witness, Orville Cox, testified that he is an exsalaned employee and that "The Union has treated me fine and doing the best they could do." Respondent's witness, Froylan Ontiveros, an exsalaried employee, testified that Bettiga told him that he "wasn't about to" go along with any thought of decertification, and that he "certainly" is happy with the Union. The foregoing testimony is credited. Respondent relies for its proof of this defense upon alleged noninvolvement by exsalaried employees in affairs of the Union, and employee disaffection. The former argument is without weight, since the exsalaried employees are new to the P and M unit and, further, it is clear that the controversy herein has had a dampening effect on all union activity at Respondent's place of business. (Note, for example, the waiver of dues and some of the initiation fee, discussed above.) The latter argument is not determinative of anything-no action to decertify has been taken and, further, the testimony about conversations on this subject was highly contradictory and inconclusive. Respondent offered no testimony or evidence, of weight or probity, to establish desertion of the Union by exsalaried or other employees. The overwhelming weight of evidence, ad- duced for the most part by Respondent, is to the contrary-exsalaned employees strongly support the Union and are pleased with its actions in their behalf. It is so found. F. Respondent 's Unilateral Changes and Refusal To Bargain This is the basic issue involved herein, and the facts neces- sary for decision are not disputed. On May 30 Charles Armin, the Union's district director, notified Respondent by letter that it would be in touch with Respondent following receipt of Board certification, to ar- range for negotiation meetings on behalf of the exsalaned employees. On June 1, A. C. Stuebing, Respondent's person- nel director, stated in his letter to the Union. Rather, it is the Company's opinion that those salaried employees, by voting as they did, and under the terms and conditions of the Regional Director's decision, auto- matically place themselves under the existing contract as well as in the existing bargaining unit, so that they now automatically derive the fringe benefits therein provided for and will receive labor grades and hourly wage rates which are appropriate. Stuebing's letter also stated that, although Respondent would be willing to meet with union representatives, "it should be understood that we do so only in the spirit of mutual cooperation-and not because the company is under any duty to bargain at this point." A meeting thereafter, was scheduled for June 21. Misbrener, whose testimony on this point is not con- tradicted and who is credited, testified concerning the meet- ing of June 21: Mr Henderson replied that the Company was under no obligation to bargain and that the salaried classifica- tions and job titles of the salaried group would be changed. They would be included or brought into the wage classification in the hourly agreement-labor grades 6, 7 and 9, I believe That the fringe benefits that the salaried employees had, would be withdrawn; and that the benefits extended to the hourly employees under the terms of the contract, would be extended to these people as well. At the meeting, Henderson repeatedly ,and firmly stated Respondent's no-bargaining position; and no further meet- ings were scheduled. Misbrener said he felt that Respondent's position made further meetings futile On June 21 the Company also held four meetings with groups of the exsalaried employees, to inform them of their proposed reclassification to an hourly paid status. The format of the four meetings was the same. Henderson began by tell- ing the employees and union representatives present that the purpose of the meetings was to inform the exsalaned em- ployees that, effective July 1, they would be placed- on the hourly payroll in respective job classifications and grades specified in the existing collective-bargaining agreement. He then read a memo dated June 20, which specified the details of this change. The employees were informed that, by the change in their status, they would lose the following rights and benefits of salaried employees. 1 Salaried vacation plan. 2. Paid absence-for any reason 3. Salaried Disability Income Insurance. 4 Salaried Life Insurance. 5. Salaried Accident Insurance. 6. Salaried Medical Expense Benefits 7. Salaried Retirement Plan. 8. Participation of the Salaried Profit Sharing and Sav- ings Plan. The employees also were informed that, after the July 1 change in their status, they would receive the benefits of hourly paid employees as specified in the contract such as vacation plan, grievance procedures, and bereavement pay Henderson testified that the only thing the supervisors were allowed to do at these four employee meetings was to read the June 20 memoranda to each group. This was not the first time Respondent warned the ex- salaried employees of the possible consequences of voting for union representation On May 23 Respondent sent a two- page letter to all the exsalaried employees, explaining the Company's position regarding the election. The letter made it clear that, should the exsalaried employees vote for inclu- sion in the existing unit , such inclusion would result in auto- matic coverage of the employees by the existing union con- tract. As a result, the exsalaned employees would "acquire those fringe benefits, and only those fringe benefits, provided for in the existing contract." The letter continued as follows: You, as a salaried employee, enjoy greater vacation time than hourly-paid employees. You do not experience loss of salary for short term absences. You have a long term disability income plan. You have a profit-sharing 672 DECISIONS OF NATIONAL LABOR RELATIONS BOARD plan, which excludes bargaining unit employees from cov- erage. You have a more generous medical plan. You have greater maternity benefits. You have more life in- surance. And you acquire pension benefits earlier than hourly employees. You can see all these differences in the comparison schedule, I am enclosing with this letter. This letter concluded by stating that Respondent did not have a single salaried union employee, and that it wanted to make sure the exsalaried employees understood the possible consequences of voting for the Union. On May 23 Respon- dent's Joe Mileti gave a speech to 20 of the 22 involved employees regarding the Company's position on the election. Mileti stressed the superiority of the salaried benefit plan over that contained in the existing union contract, and he stated the reasons Respondent was particularly interested in sala- ried employees remaining nonunion. It is clear from the foregoing, including Respondent's oral and written statements stressing superiority of salaried em- ployees' benefit packages, that the unilateral changes it made were substantial; they were changes in wages, hours, and terms of employment. Thus, regardless of the fact that the exsalaried employees may have earned as much each month after the change as they did before, they lost options available to salaried employees, and classes of benefits relating to insur- ance , vacations, absences from work, retirement, and profit- sharing plans. Such changes are mandatory subjects of bargaining.' In assuming its position that it has no duty to bargain with the Union, either for a new contract or for the changes it made that affected the exsalaried employees, Respondent re- lies almost entirely upon Vickers, Incorporated, 153 NLRB 561 (1964). However, Vickers does not stand for the principle espoused by Respondent. In that case, employees formerly salaried became part of the existing production and maintenance unit following consent elections, as here, but the argument arose in quite different manner. In Vickers, the Respondent argued that the formerly salaried employees constituted new job clas- sifications (schedulers and expediters) within the existing hourly unit, and that, therefore, the provisions of the 1960 contract (then being renegotiated) relative to new job classifi- cations, covered the employees involved. The Union and the Respondent met and bargained on many occasions, during which the subject of the schedulers and expediters was dis- cussed. There had already been agreement to change the recognition clause of the 1960 contract to include the two groups as hourly employees; it was the benefits as such that the Union wanted to, and did, negotiate. The parties having reached impasse, the Company unilaterally instituted the changes from salaried classifications to its newly-created hourly positions. The Union complained that the changes did not come within the purview of the 1960 contract. The Ad- ministrative Law Judge stated "The dispute ... is concerned with the narrow question of whether the Company correctly interpreted the phrase `establishes and places in use a new job ' General Motors Corp., 59 NLRB 1143 (1944), National Laundry Co, 47 NLRB 961 (1943 ), Inland Steel Companyv NLR B , 77 NLRB 1, enfd 170 F 2d 247 (C A 7, 1940), cert denied 336 U S 960 ( 1949), XL R.B v Black-Clawson Company, 210 F 2d 523 (C A 6, 1954 ), Singer Man ufactur- ing Company, 24 NLRB 444, enfd 119 F 2d 131 (CA 7, 1941) classification' found in the 1960 contract." The Judge found that the Company's interpretation was correct, and the com- plaint was dismissed. The instant case is quite different from Vickers. There, the recognition clause was amended by the parties to include the two new groups; there was extensive negotiation about the benefits of the groups, bargained to impasse; there was com- pany reliance, in making unilateral changes, upon a specific, contractual provision; the Company's interpretation of the provision was found to be correct Here, the parties have not bargained for an amended recog- nition clause, or otherwise discussed the existing production and maintenance contract as it may apply to the exsalaried employees; Respondent has explicitly and repeatedly asserted that it is not required to bargain about the benefits involved; there is no reliance by Respondent upon contract interpretation-it merely argues that it has no statutory duty to bargain. Finally, the Union here has opposed Respondent's action and claimed its right to bargain for the exsalaried employees. It is thus seen that interpretation of a contractual provision was at the core of Vickers, whereas there was no such issue in Federal-Mogul, nor is there such an issue in this case. Use by the Union of the hourly contract's grievance procedure on behalf of salaried employees in Vickers, together with the language of the contract relating to new job classifications, impelled the Administrative Law Judge to find that the Com- pany's interpretation of the contract was correct. Respondent argues that, where a contract such as the one now under discussion is silent on the subject of a company's right unilat- erally to assign temporary wage rates to new job classifica- tion, arbitration decisions provide authority (or, at least, per- suasion) for the proposition that the Company inherently has that right, subject to review through grievance and arbitra- tion. Respondent then argues that the basis for such arbitral decisions is the contract itself. Faced with the fact that the present contract specifically limits its application, in Article II, Section 1 thereof, to employees in the existing P and M unit, Respondent solves the problem, in its own view quickly and easily, by simply stating "This recognition clause has, of course, been amended as a matter of law by the new certifica- tion to include the subject employees." However, there has been no such amendment, expressly or impliedly. The Board's amended certification states, in part, that the Union "may bargain for the employees . . as part of the group of employees it currently represents," (emphasis supplied), i.e., the P and M unit. The Union at all times not only vigorously has denied that the P and M contract covers the exsalaried employees, it has repeatedly requested Respondent to bargain for those employees, and Respondent repeatedly has refused to bargain. Thus, the solution of its dilemma, offered by Respondent, cannot be adopted Respondent also contends that it has avoided the contract problem with which it is faced, by its notice to exsalaried employees prior to the election, that it believed "an affirma- tive vote for the Union would result in their automatic cover- age by the existing agreement." The vote, according to Re- spondent's view, "can be regarded as an overt assumption of those 'contractual responsibilities."- This solution cannot be adopted, either. Whatever Respondent may have believed, that belief cannot result in creating serious contractual obli- ABEX CORPORATION-AEROSPACE DIVISION 673 gations merely through its having been communicated to the exsalaried employees, with resulting silence on the part of the latter. A contract cannot be created in such an offhand manner. It is elemental that silence alone is not acceptance-and here, there was not even an offer; only com- munication of a belief held by Respondent is alleged to place a contractual burden on the employees. Such a communica- tion has no legal effect. Respondent contends that the case of Federal-Mogul Cor- poration, 209 NLRB 343 (1974), is contra to Vickers, but that it should not control this controversy because it is pending on appeal; that, alternatively, proceedings herein should be stayed until the appeal is decided. Federal-Mogul is not contra to Vickers, since it was decided on a different basis. Federal-Mogul turned on the same point involved in this controversy, and controls. The Administra- tive Law Judge who decided Federal-Moguldiscussed Vickers at length, and after reviewing the considerable factual differ- ences between the two cases, stated: But as shown above the Trial Examiner's decision in that case [note: Vickers] was based in his own words on "all the circumstances" in that matter, only one of which is present in this case, namely, the essential similarity of Paragraph 180 of the collective-bargaining agreement in the instant matter with Paragraph 162 of the agreement in the Vickers case. As noted above, that circumstance is not of itself sufficient to bring the present case under the precedent of Vickers . . , In Federal-Mogul, as in the present case, Respondent relied upon Vickers as its authority for refusing to bargain, contend- ing that, as a result of the certification and inclusion of set-up men (formerly salaried) in the long standing production and maintenance (P and M) unit, those employees became auto- matically covered by the preexisting collective-bargaining agreement the Company had with its P and M employees. The facts in Federal-Mogul are similar to those in the present case. There was a vote in a Globe-type election, a certification that the Union may bargain for the employees as part of the P and M group, the Company's unilateral exten- sion of the existing P and M contract to the formerly salaried employees, the divestiture of benefits in changing from sala- ried to hourly status, the Union's request to bargain, and the Company's refusal to bargain. In its Decision and Order in 209 NLRB 343, the NLRB affirmed the rulings, findings, and conclusions of the Ad- ministrative Law Judge and adopted his recommended Or- der. In so doing, the Board stated, inter alia: We do not perceive either legal or practical justifica- tion for permitting either party-to escape its normal bargaining obligation upon the theory that this newly added group must somehow be automatically bound to terms of a contract which, by its very terms, excluded them. Such a determination would appear to be at odds with the Supreme Court's holding in H. K. Porter Co., Inc. v. N.L.R.B. In H. K Porter, the Supreme Court noted that "while the Board does have power . . . to require employers and employees to negotiate, it is with- out power to compel a company or a union to agree to any substantive contractual provision of a collective- bargaining agreement." Were the Board to require uni- lateral application of the existing contract to the setup men we would, in effect, be compelling both parties to agree to specific contractual provisions in clear violation of the H. K. Porter doctrine. We understand the teaching of that case to be that we have no statutory authority here to force on these employees and their Union, as well as the Employer, contractual responsibilities which nei- ther party has ever had the opportunity to negotiate. There is no basis for staying these proceedings because of the appeal of Federal-Mogul. It is clear, from the foregoing, that present Board law applicable to this case is set out in Federal-Mogul. On that basis it is found that Respondent has violated Section 8(a)(5) of the Act by refusing to bargain with the Union, and derivatively violated Section 8(a)(1) by inter- fering with, restraining, or coercing employees in the exercise of their rights guaranteed in Section 7 of the Act. General Counsel urges the finding of an 8(a)(3) violation, and alleges "these salaried employees were reclassified as hourly-paid employees merely because they voted for inclu- sion in the existing unit. . . ." The General Counsel alleges such action is "inherently destructive" of Section 7 employee rights, and is an 8(a)(3) violation under the law of N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26 (1967), regardless of motivation. No union animus has been shown in this case, nor has discriminatory intent been established. Respondent's brief devotes itself largely to this facet of the 8(a)(3) charge, and the statements therein made have support in the record. However, as pointed out by General Counsel, the fact of loss of benefits herein (which fact is well supported in the record) following a prounion election and subsequent reclas- sification of salaried employees, has the inevitable result of discouraging union activity, particularly by other salaried employees. It is so found This is within the term "inherently destructive" of Section 7 rights, as used in Great Dane Trail- ers. Proof of motivation is not required. See also N.L.R.B. v. United Aircraft Corp., Hamilton Standard Division, 490 F.2d 1105 (C.A. 2, 1973). IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The Respondent's activities set forth in section III, above, occurring in connection with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V THE REMEDY Having found that Respondent has engaged in unfair labor practices in violation of Section 8(a)(1), (3), and (5) of the Act, I shall recommend that it be ordered to cease and desist therefrom, and to take certain affirmative action designed to effectuate the policies of the Act. Upon the basis of the foregoing findings of fact, and the entire record, I hereby make the following: 674 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCLUSIONS OF LAW 1. Abex Corporation-Aerospace Division is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2.'Oil, Chemical & Atomic Workers International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees employed by Abex Corporation-Aerospace Division at its plant located at 3151 West Fifth Street, Oxnard, California, including sala- ned parts planners and technicians employed in the engineer- ing test lab, salaried tool makers employed in the toolroom, and salaried machinists employed in the model shop, but excluding office clerical employees, sales and service em- ployees, technical employees, FLSA exempt employees, other salaried employees, guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collec- tive bargaining within the meaning of Section 9(b) of the Act 4. Since on or about June 20, 1973, Oil, Chemical & Atomic Workers International Union, AFL-CIO, has been the representative for the purpose of collective bargaining for employees in the unit described in the paragraph next preced- ing, and by virtue of Section 9(a) of the Act has been, and now is, the exclusive representative of all employees in said unit for the purposes of collective bargaining with respect to rates of pay, wages, hours, and other terms and conditions of em- ployment. 5. By unilaterally, and without prior notice to or bargain- ing with the above-named labor organization, announcing that as a result of the June 20, 1973, certification of said labor organization as described in the paragraph next preceding, salaried parts planners and technicians in the engineering test lab, salaried toolmakers in the toorroom, and salaried machi- nists in the model shop of Respondent were covered exclu- sively by the terms and conditions of employment embodied in the collective-bargaining agreement then in effect between Respondent and the Union for production and maintenance employees, and the implementation of said contract terms to said three groups of salaried employees would begin July 1, 1973, Respondent has refused to bargain collectively with the Union and thereby engaged in, and is now engaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. By unilaterally, and without prior notice to or bargain- ing with the above-named labor organization, and notwith- standing the objection of the above-named labor organiza- tion, withdrawing all benefits enjoyed by the three groups of exsalaned employees described above prior to their unioniza- tion and applying to them the current collective-bargaining agreement then in effect between Respondent and the above- named labor organization, Respondent has refused to bargain collectively with the above-named labor organization, and thereby has engaged in, and is engaging in, unfair labor prac- tices within the meaning of Section 8(a)(5) and (1) of the Act 7. By maintaining the fixed and unalterable position throughout the meetings between Respondent and the above- named labor organization, that said three groups of salaried employees described above were automatically covered in all respects by the current collective-bargaining agreement then in effect between the Respondent and the above-named labor organization and by agreeing only to those proposals by the above-named labor organization which were identical with the terms of this collective-bargaining agreement, Respond- ent has refused to bargain collectively with the above-named labor organization, and thereby has engaged in, and is engag- ing in , unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. - 8. By unilaterally, and without prior notice to or bargain- ing with the Union, changing job classifications, wages, meth- ods of payment and benefits of the three exsalaried groups of employees described above because said employees had desig- nated.and selected the Union as their collective-bargaining representative, Respondent engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 9. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 10 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 8(a)(1), (3), and (5), and Section 2(6) and (7) of the Act.' ORDER Respondent, Abex Corporation-Aerospace Division, its officers, agents, successors, and assigns, shall. 1. Cease and desist from: (a) Unilaterally applying the existing collective- bargaining agreement between Respondent and Oil, Chemical & Atomic Workers International Union, AFL-CIO, and its Local 1-895, or unilaterally changing the wages, rates of pay, and other conditions of employment, for employees in the unit set forth below, who by voting to be represented have indicated their desire to be included in the existing production and maintenance unit currently represented by the above-named labor organization. All production and maintenance employees employed by Abex Corporation-Aerospace Division at its plant located at 3151 West Fifth Street , Oxnard , California, including salaried parts planners and technicians em- ployed in the engineering test lab , salaried toolmakers employed in the toolroom , and salaried machinists em- ployed in the model shop , but excluding office clerical employees , sales and service employees, technical em- ployees, FLSA exempt employees, other salaried em- ployees, guards and supervisors as defined in the Act constitute a unit appropriate for the purposes of collec- tive bargaining within the meaning of Section 9(b) of the Act. (b) Refusing to bargain collectively with the above-named labor organization as the exclusive collective-bargaining rep- resentative of the employees in the unit set forth above. (c) Changing job classifications, wages, methods of pay- ment and benefits of the three exsalaned groups of employees described above because said employees designated and se- lected the Union as their collective-bargaining representative. 8 Upon motion of Respondent, all rejected evidence has been reconsid- ered No reason to reverse the original rulings made thereon during hearing have appeared, said motion is denied ABEX CORPORATION-AEROSPACE DIVISION 675 (d) In any other manner interfering with, restraining, or coercing employees in the exercise of their rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action: (a) Upon request, bargain collectively with the above- named labor organization, as the exclusive collective-bargain- ing representative of the employees in the unit set forth above. (b) Reinstate the status quo ante as its existed prior to July 1, 1973, with respect to employees in the unit set forth above, except for such changes to which the Union has acquiesced, and make said employees whole for any losses occasioned by Respondent's unilateral actions. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records and reports and all other records necessary to analyze and give effect to the status quo ante order herein. (d) Post at its Oxnard, California, plant copies of the at- tached notice marked "Appendix."9 Copies of said notice, to be furnished by the Regional Director for Region 31, shall, after being duly signed by the Respondent's representative, be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 31, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 9 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board "