Acme Die Casting

National Labor Relations Board - Board Decisions

Sep 30, 1994

315 N.L.R.B. 202 (N.L.R.B. 1994)

202
315 NLRB No. 30
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188
F.2d 362 (3d Cir. 1951). We have carefully examined the record and
find no basis for reversing the findings.
The Respondent also has excepted to the judge’s decision asserting
that it evidences bias and prejudice. On our full consideration of the
entire record in these proceedings, we find no evidence that the
judge prejudged the case, made prejudicial rulings, or demonstrated
impermissible bias against the Respondent in his analysis and discus-
sion of the evidence.
In adopting the judge’s finding that the Respondent violated Sec.
8(a)(5) and (1) of the Act by unilaterally subcontracting drilling
work and relocating a machine used to perform the work to the
premises of the subcontractor, we also rely on Brown-Graves Lum-
ber Co., 300 NLRB 640 (1991), enfd. 949 F.2d 194, 197–198 (6th
Cir. 1991). Contrary to the Respondent’s contention, the reasoning
of Torrington Industries, 307 NLRB 809 (1992), is not limited to
situations in which employees are laid off or replaced. Torrington
simply recognizes the principle, applicable in this case, that an em-
ployer’s decision to subcontract is a mandatory subject of bargaining
when what is involved is the substitution of one group of workers
for another to perform the same work, and not a change in the scope
and direction of the enterprise. There is no evidence that the decision
to subcontract constituted a change in the scope and direction of the
Respondent’s business. Indeed, the plant manager admitted that the
subcontracting permitted the Respondent to perform work of the
same type done by unit employees in the past while avoiding paying
overtime to those employees.
Member Cohen does not read Torrington as broadly as his col-
leagues. In his view, subcontracting is a mandatory subject where
one group of employees is substituted for another and the decision
is based on matters that are amenable to collective bargaining. In
the instant case, the evidence indicates that the Respondent subcon-
tracted because it was less expensive to do so than to perform the
work in-house on an overtime basis. There is insufficient evidence
to establish the Respondent’s claim that the subcontracting was ne-
cessitated by a customer’s special needs which could not be met by
use of the Respondent’s single machine.
We grant the Respondent’s exception to the judge’s finding that
the drilling machine was not used for Admiral work after it was re-
turned by the subcontractor to the Respondent’s plant. The record
shows that unit employees continued to produce Admiral hinges in
April and May 1991. This fact does not change the result, since the
violation had already occurred before the drill was returned.
Acme Die Casting, a Division of Lovejoy Industries
Incorporated and United Electrical, Radio &
Machine Workers of America (UE). Case 13–
CA–30006
September 30, 1994
DECISION AND ORDER
BY MEMBERS STEPHENS, DEVANEY, AND COHEN
On April 1, 1993, Administrative Law Judge Walter
H. Maloney issued the attached decision. The Re-
spondent filed exceptions and a supporting brief, and
the General Counsel filed an answering brief.
The National Labor Relations Board has delegated
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 de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions as modified and to adopt the recommended
Order as modified.
We agree with the judge that the Respondent vio-
lated Section 8(a)(1) and (5) of the Act by unilaterally
granting a general wage increase, but we do so for the
following reasons.
The Respondent and the Union were engaged in pro-
tracted negotiations for an initial collective-bargaining
agreement when, in early November 1990, the Union
proposed, as a separate matter, that the Respondent
grant a three-tiered ‘‘interim’’ wage increase while ne-
gotiations continued. Although the Respondent initially
rejected the Union’s proposal, in late November 1990
it offered to consider implementing ‘‘a negotiated in-
terim wage increase’’ in return for certain promises by
the Union. The Union rejected that proposal and, in
late December, the Respondent offered what it called
an ‘‘annual’’ increase ranging from 15 cents per hour
for the lowest paid employees, to 20 and 25 cents per
hour for higher paid employees. The Union made a
counterproposal on wage amounts, that was slightly re-
duced from its initial demand, although greater than
the Respondent’s offer; and the Union also insisted
that it be deemed an ‘‘interim’’ increase. The Re-
spondent agreed in concept with distributing an annual
increase to narrow the disparate pay levels within labor
grades but held to its proposed amount of 15, 20, and
25 cents.
On January 15, 1991, the Respondent informed the
Union that it intended to implement its late-December
offer (which it then had characterized as an ‘‘annual’’
increase) retroactive to January 3. The Union did not
agree to this because it regarded the amounts as still
too low, but it sought further information about which
particular employees would be included in which of
the three pay-increase groups. Nonetheless, on January
16 the Respondent announced to employees the grant
of an ‘‘interim’’ wage increase. It also announced that
employees having less than 90 days of employment
with the Respondent would not receive the increase.
The judge found that there was no evidence that a
90-day exemption from the interim increase had ever
been proposed or discussed during the parties’ negotia-
tions. Further, the judge rejected the Respondent’s con-
tentions that the Union had consented to the increase
or, in the alternative, that the parties were at impasse
when the Respondent implemented the increase. Based
on the foregoing, he found that the Respondent vio-
lated the Act by unilaterally granting the January
across-the-board increase.
In its exceptions regarding the 1991 general wage
increase, the Respondent characterizes that increase as
being in keeping with a ‘‘pattern’’ of January in-
203ACME DIE CASTING
2 309 NLRB 1085 (1992), remanded 26 F.3d 162 (D.C. Cir. 1994)
(Acme III).
3 Cf. Bottom Line Enterprises, 302 NLRB 373, 374 (1991). Mem-
ber Cohen finds it unnecessary to rely on Bottom Line Enterprises.
4 See, e.g., Triple A Maintenance Corp., 283 NLRB 44, 56 (1987).
creases, and observes that in Acme Die Casting,2 it
was found ‘‘to have violated the Act by discontinuing
this practice.’’ By implication, the Respondent seems
to be suggesting that we are now unfairly finding a
violation on the basis of an action that the Respondent
earlier was found in breach of the law for failing to
take. The Respondent also repeats its contentions that
its implementation of the increase was lawful because
the Union consented to it or at least that the parties
were at impasse when the Respondent implemented it.
We agree for the reasons stated by the judge that the
Union had not consented to the particulars of this in-
crease. Because the judge did not discuss the impact
of the order in the earlier case, however, and because,
with respect to the impasse issue, we do not agree with
the suggestion in the judge’s opinion that, given the
Respondent’s ‘‘history’’ of 8(a)(5) violations in the
earlier cases, it would have been impossible for the
Union and the Respondent to reach impasse on any in-
terim wage increase, we provide the following reasons
for adopting the finding that implementation of the
January 1991 increase violated Section 8(a)(5) and (1)
of the Act.
The Respondent is correct in its suggestion that
granting an across-the-board wage increase in 1991
was consistent with both its past practice and with the
Board’s Order in Acme III; and our finding of a viola-
tion is in no way predicated on the mere fact that the
Respondent granted an increase. The violation lies in
the Respondent’s abrupt implementation of the in-
crease at a time when there was neither agreement nor
genuine impasse, and in the fact that the increase the
Respondent granted differed from the last proposal that
was on the table before implementation.
The Respondent does not dispute the proposition
that it had a statutory obligation to bargain over the
amounts and distribution of the wage increases it pro-
posed to grant to all the unit employees. Indeed, it was
proceeding to fulfill this obligation during the winter
of 1990–1991, and the parties’ positions were gradu-
ally moving towards each other. By January 9, the par-
ties had agreed on the concept of a three-tiered wage
increase structure; the Respondent had finally agreed
that this would be an interim increase, with bargaining
open as to wage levels to be set in the ultimate collec-
tive-bargaining agreement on which the parties were
meeting; and the Union had slightly reduced the level
of the highest of three increases it sought. As noted
above, at the January 15 meeting, the Union indicated
it still viewed the Respondent’s proposed amounts as
too low, and it sought information on which employees
would be within which of the three pay raise groups
under the Respondent’s plan. On January 16, the Re-
spondent abruptly implemented its own plan with a no-
tice to employees that the increase was retroactive to
January 3.
In arguing its ‘‘alternative’’ theory that, if the Union
cannot be deemed to have consented to the Respond-
ent’s wage increase proposal on January 15, then the
parties must have been at impasse, the Respondent
states a correct legal standard for impasse, i.e., whether
under all the circumstances it is clear that further bar-
gaining on the issue would be ‘‘futile.’’ But the facts,
even as recited by the Respondent, show no such state
of affairs on that date. The Respondent points to no
statements from union negotiators that there was no
possibility of any further movement on the Union’s
part, and, indeed, the Union’s request for information
about how particular employees would be affected by
the Respondent’s plan indicated that the Union would
give it consideration. Furthermore, the Respondent has
presented no evidence that the announcement and grant
of an increase could not wait even a week or two
longer. The Respondent’s proffered business reason for
raising its employees’ wage rates at this time—that it
‘‘had learned of considerable unrest among the em-
ployees with respect to a 1991 wage increase,’’ and it
had reason to believe that the employees ‘‘had grown
accustomed to a regular January increase’’ certainly
does not establish any emergency circumstances that
would warrant effectively calling a halt to negotiations
on this issue and proceeding with implementation.3 In
sum, the Respondent has not established its impasse
defense, and its implementation thus violates Section
8(a)(5) and (1) on a theory of unilateral action in the
absence of a bargaining impasse.
As noted above, we also agree with the judge that
implementation of the increase was unlawful because
it was not consistent with the Respondent’s last pro-
posal, in that the increase announced to the employees
came with the caveat that ‘‘this does not apply to those
employees with less than 90 days of employment at
Acme Die Casting‘‘—an exemption that was never
part of the proposal that the Respondent put on the
bargaining table. It is settled that even when impasse
is reached on a subject, an employer’s subsequent im-
plementation cannot vary from its final preimpasse
proposal.4
The Respondent’s contention that the 90-day exemp-
tion was in fact included in its proposal rests on two
separate theories, neither of which has merit. First, the
Respondent suggests that the proposal implicitly in-
cluded the 90-day exemption because such an exemp-
tion represented the ‘‘past practice’’ from which
changes were to be measured. In support of this claim,
the Respondent put in evidence a memorandum to em-
ployees dated December 4, 1989, in which it had an-
204 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 On this point the Respondent relies on the testimony of the
Union’s field organizer, Terry Davis, that during the parties’ pro-
tracted contract negotiations ‘‘the whole issue of 90 days was the
subject of considerable difference between the company and the
union . . . because there was currently a 30 day probationary period.
The company was proposing a 90 day probation period and we were
not accepting that.’’
nounced a general wage increase with a 90-day-em-
ployee exemption, which was thereafter implemented
on January 4, 1990. But that increase was part of a
long pattern of usually semiannual, sometimes annual,
general wage increases; and that one-time feature of
the 90-day exclusion no more established a past prac-
tice than did the particular amounts that were given on
that occasion.
Second, the Respondent contends that the 90-day ex-
emption was in fact a component of its interim wage
increase proposal because a proposal for a 90-day pro-
bationary period was on the table at the same time and
had been the subject of negotiations, although the par-
ties had not reached agreement on a probationary pe-
riod clause.5 The Respondent therefore contests the
judge’s finding that there ‘‘is no record evidence that
any exemption from [the interim wage] increase per-
taining to employees with less than 90 days of service
had ever been proposed or was ever discussed at any
bargaining session.’’ We see no conflict between the
judge’s finding and the evidence of negotiations on the
probationary clause. There is no evidence whatsoever
of any expression by the Respondent’s negotiators of
an intent to link the probationary period in the pro-
posed collective-bargaining agreement to the interim
wage increase that was given before any such agree-
ment was executed or even reached. This would have
been an easy linkage to make: In the Respondent’s an-
nouncement of the increase to employees, it was ac-
complished in a single sentence.
In sum, we find that because the January 1991 wage
increase was implemented in the absence of a bargain-
ing impasse and in a form that diverged from the Re-
spondent’s last proposal prior to implementation, it
violated Section 8(a)(5) and (1) of the Act.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Acme
Die Casting, a Division of Lovejoy Industries Incor-
porated, Chicago, Illinois, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Order as modified.
1. Substitute the following for paragraph 1(b).
‘‘(b) Unilaterally changing the terms and conditions
of across-the-board or merit wage increases to bargain-
ing unit employees; provided that nothing here shall be
deemed to require the Respondent to cease giving ef-
fect to any wage increases of any kind that it has
granted heretofore.’’
2. Substitute the attached notice for that of the ad-
ministrative law judge.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT unilaterally subcontract bargaining
unit work or unilaterally transfer to subcontractors ma-
chinery used in performing bargaining unit work.
WE WILL NOT unilaterally change the terms and con-
ditions of across-the-board or merit increases to bar-
gaining unit employees. However, WE WILL NOT re-
scind any wage increases of any kind that we have
previously given.
WE WILL NOT refuse to recognize or bargain collec-
tively in good faith with United Electrical, Radio &
Machine Workers of America (UE) as the exclusive
collective-bargaining representative of all the full-time
and regular part-time production and maintenance em-
ployees employed at our Northbrook, Illinois facility,
excluding office clerical employees, technical employ-
ees, tool and diemakers, professional, managerial and
confidential employees, guards, and supervisors as de-
fined in the Act.
WE WILL NOT, by any other means or in any other
manner, interfere with, restrain, or coerce employees in
the exercise of rights guaranteed to them by Section 7
of the Act.
WE WILL recognize the Union on resumption of bar-
gaining in good faith and for 1 year thereafter as if the
initial year of certification had not expired.
WE WILL recognize and, on request, bargain collec-
tively in good faith with the Union as the exclusive
collective-bargaining representative of the employees
in the above-designated bargaining unit.
WE WILL make whole employees for any loss of pay
or benefits suffered by them by reason of the unlawful
subcontracting found here, with interest.
ACME DIE CASTING, A DIVISION OF
LOVEJOY INDUSTRIES INCORPORATED
Richard Kelliher-Paz, Esq., for the General Counsel.
Larry G. Hall, Esq., of Chicago, Illinois, for the Respondent.
Terry Davis, Field Organizer, of Chicago, Illinois, for the
Charging Party.
205ACME DIE CASTING
1 The principal docket entries in this case are as follows:
Charge filed by United Electrical, Radio & Machine Workers of
America (UE) (the Union) against the Respondent on January 28,
1991; complaint issued by the Regional Director for Region 13
against the Respondent on May 16, 1991; the Respondent’s answer
filed on May 21, 1991; hearing held in Chicago, Illinois, on October
1 and 2, 1992; briefs filed with me by the General Counsel, the
Charging Party, and the Respondent on or before November 2, 1992.
2 The Respondent admits, and I find, that it is a corporation which
maintains an office and place of business at Northbrook, Illinois,
where it is engaged in the custom manufacture of zinc and aluminum
die castings. In the course and conduct of this business, the Re-
spondent annually ships from its Northbrook, Illinois facility directly
to points and places outside the State of Illinois goods and materials
valued in excess of $50,000. Accordingly, the Respondent is an em-
ployer engaged in commerce within the meaning of Sec. 2(2), (6),
and (7) of the Act. The Union is a labor organization within the
meaning of Sec. 2(5) of the Act.
3 Certain errors in the transcript have been noted and corrected.
4 During an earlier era, in its dealings with another labor organiza-
tion, the Respondent was found guilty of discriminatorily discharging
an employee during an unsuccessful organizing campaign. Acme Die
Casting Corp., 262 NLRB 777 (1982), enforced with slight modi-
fication 728 F.2d 959 (7th Cir. 1984) (Acme I).
5 A 26-day hearing in Acme III took place throughout 1989 before
Administrative Law Judge Richard J. Linton upon a complaint con-
solidating five different charges. Judge Linton’s decision in that case
was issued on May 23, 1991, and necessarily formed a part of the
background in this case.
6 A total of four bargaining sessions took place in June and De-
cember 1991. As of the date of the hearing in this case (October
1992), no further meetings were scheduled.
DECISION
STATEMENT OF THE CASE
WALTER H. MALONEY, Administrative Law Judge. This
case came on for hearing before me upon an unfair labor
practice complaint,1 issued by the Regional Director of the
Board’s Region 13, which alleges that Respondent Acme Die
Casting, a Division of Lovejoy Industries Incorporated2 vio-
lated Section 8(a)(1) and (5) of the Act. More particularly,
the complaint alleges that the Respondent unilaterally sub-
contracted out the work of drilling holes in certain hinges
which the Respondent was manufacturing and transferred to
the subcontractor the drilling machine used in this process;
that it unilaterally granted a wage increase to bargaining unit
employees before arriving at impasse in bargaining; and that
it unilaterally granted merit increases. The Respondent pre-
sented an array of defenses. It claimed that its unilateral sub-
contracting unit work was justified in that it was in accord-
ance with past practice, was de minimis, and did not result
in any loss of pay or jobs for unit employees. To the allega-
tion respecting unilateral increase in wage rates on January
3, 1991, the Respondent argues either that it was at impasse
with the Union or that the Union had consented so it was
entitled to institute the increase in question. It denies that
three merit increases litigated in this proceeding were in fact
merit increases and argues that it was entitled to grant them
in accordance with its past practice. In these contentions, the
issues in this case were drawn.3
FINDINGS OF FACT
I. THE UNFAIR LABOR PRACTICES ALLEGED
A. Background
The Respondent operates a factory in suburban Chicago
where it manufactures a variety of die casted parts to fill the
particularized orders of its customers. At the time the events
in this case took place, it employed about 100–120 employ-
ees in a production and maintenance bargaining unit. In the
ensuing years, this unit has grown to about 175 people.
The Respondent is no stranger to the processes of the
Board.4 On October 16, 1987, this Union won a representa-
tion election among the employees in the Respondent’s pro-
duction and maintenance bargaining unit. The fairness of the
election was challenged by the Respondent but its challenge
was so insubstantial that the Regional Director and the Board
dismissed it without a hearing and certified the Union on
April 13, 1988. The Respondent refused to bargain so a com-
plaint was issued and the Respondent was found guilty, in
a summary judgment proceeding, of an unlawful refusal to
bargain. 290 NLRB No. 127 (Aug. 31, 1988) (not reported
in Board volumes). The Board’s Order, including its initial
refusal to grant the Respondent a hearing on its objections
to the conduct of the election, was upheld by the Seventh
Circuit. 904 F.2d 937 (1990) (Acme II). While Acme II was
in various stages of its protracted progress, the Respondent
committed, and was found guilty of, an ongoing series of un-
fair labor practices in violation of Section 8(a)(1), (3), and
(5) of the Act. (Acme III.) These violations included threats
to cancel established wage increases, withholding twice-year-
ly general wage increases from employees, issuing unlawful
written warnings, unlawfully suspending employees, and uni-
laterally changing several working conditions at the plant.
These latter violations included changing certain plant prac-
tices in effect at the time of the election which included per-
mitting employees to start their cars during cold weather be-
fore the end of their shift; permitting employees to warm
food in cafeteria microwaves before breaks and before lunch-
time; permitting employees to bring coffee and similar items
to their work stations; and permitting employees free access
to restrooms without first giving notice to their foremen.
Acme III was before the Board at the time of the hearing in
this case (Acme IV) and resulted in a decision which was
issued by the Board on December 16, 1992. (309 NLRB
1085.) 5
B. Events in Late 1990 and Early in 1991
1. Unilateral transfer of drilling machine to a
subcontractor
After the Seventh Circuit enforced the Board’s bargaining
order in a decree, dated July 14, 1990, the parties began to
engage in collective bargaining. A total of about 35 sessions
took place, most of them in 1990 and early 1991. To date,
no contract has been concluded.6
One controversy litigated in this case involved two die
cast hinges manufactured at that time by the Respondent for
the Admiral Corporation for use in fastening doors to the
frames of refrigerators. According to Peter Balma, who was
then the manager of the plant, the fabrication of this item
was only a minor part of the Respondent’s production sched-
ule.
206 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 The die cast machine could produce hinges at the rate of 360
parts per hour, while the trim machine, located next to the drill,
could trim 800 hinges per hour.
8 Those employees were Carlos Bueno, Eusebio Hernandez, Luis
Hernandez, Diego Ortega, Jesus Garcia, and Jorge Valenzuela.
9 Valenzuela’s discharge was a subject of the complaint in Acme
I and a warning given to him was litigated in Acme III.
10 The individuals joining Valenzuela in this meeting with Balma
were Mauricio Aguire, Antonio Ramirez, and Antonio Aguilera.
11 Balma testified that he was on vacation when the drill was re-
moved and played no part in the decision to remove it. Salzman’s
bargaining notes for December 5 contain the following handwritten
entry: ‘‘Pete involved w/decision to send Admiral work out.’’ I dis-
credit Balma’s attempt to disassociate himself from the removal con-
troversy.
The parts in question—known on invoices and other com-
pany documents as Admiral parts 67,772 and 67,773—were
made of a zinc aluminum alloy called ZA-27. The hinges in
question were 2-1/2 inches by 2-1/2 inches and contained
two holes for the insertion of bolts fastening them to the
frame. Each hinge was produced by melting the alloy in a
furnace and pouring it into the die cast machine. After the
metal hardened, it was trimmed in a trim press. Following
the trimming, two holes were drilled in the hinge by a drill
which was especially constructed for this purpose by the Re-
spondent in its maintenance department. Drilling work was
done in department 25, known as the secondary department,
although other facets of hinge production were completed in
other departments. It was this drill and the drilling operation
which became an issue between the parties late in 1990.
The drill in question was basically a table to which were
affixed two spindles holding drill heads pointed in opposite
directions. An operator pressed two buttons which activated
the drills and made two holes—one square and one round—
in the hinge. After the drilling operation was completed each
hinge was subjected to a vibratory process which removed
shape edges. The hinge was then washed and sent out of the
plant to be painted by a subcontractor known as QC Power.
The item was then returned to the plant, boxed, and shipped
to the customer. An operator could normally drill 250–275
hinges in an hour.7 The production of this item was not an
assembly line process. Quantities of hinges were completed
at each phase of the process and then sent to the next step
for further work. Production of hinges could be interrupted
at any point so that employees could be shifted to work on
other assignments which were more urgent. During the 3
months preceding the disputed events in question, approxi-
mately six employees were assigned from time to time to
perform the drilling operation on Admiral parts 67,772 and
67,773.8 Since there was only one drill in the plant which
had been adapted to this part, only one employee could work
at the drilling operation at any given time. Carlos Bueno was
assigned to perform this drilling far more than any other em-
ployee. Company records in evidence disclose that, on many
workdays preceding the transfer of the machine to an outside
contractor, no drilling of Admiral parts was performed at all.
On November 10 and 12, no drilling was performed and, on
November 13, the day on which the machine was transferred,
Bueno drilled 260 Admiral hinges in the course of 1 working
hour. On November 13, 1990, the drill was cleaned and
shipped to Machined Metals Manufacturing, a company lo-
cated in the suburban Chicago town of Elk Grove Village.
Bueno, who was working on the machine at the time, was
transferred to another job. I credit the corroborated testimony
of Jorge N. Valenzuela, a member of the Union’s negotiating
team,9 that a group of employees10 went to see Balma to
protest the removal of the drill and asked him why it was
being taken out of the plant. Balma told them that it was
cheaper to do the drilling work outside the plant because it
avoided overtime.11
Invoices in evidence show that, between November 11 and
December 3, 1990, Machined Metals Manufacturing drilled
21,537 hinges for the Respondent at a cost of 8 cents a
hinge. About 3000 of these hinges were shipped back to the
contractor for redrilling because their initial work was defec-
tive. Following the completion of this work, the Respondent
performed no more drilling, either in-house or by subcontrac-
tor, on Admiral hinges. The machine was eventually returned
by the subcontractor to the Respondent’s plant late in March
or early in April 1991, but it was not utilized for Admiral
work thereafter. In August or September 1991, the Respond-
ent lost the Admiral contract and, with that loss, the drilling
work at issue herein.
There is no suggestion in the record that the Respondent
notified the Union in advance of the transfer of the drilling
machine or the drilling work to Machined Metals Manufac-
turing or that it ever offered to bargain with the Union about
the transfer. After learning of the transfer, Terry Davis, the
Union’s principal negotiator, wrote a letter, dated November
14, 1990, to James Salzman, the attorney who conducted the
Respondent’s negotiation, protesting the move. In her letter
she stated:
Yesterday, one of the drilling machines at Acme Die
Casting was removed from the plant. We hereby re-
quest immediate negotiations with the Company on the
decision to remove the machine and the effects of this
decision on our members.
The letter went on to make a detailed request for informa-
tion. Davis asked Salzman to describe the machine and any-
thing else, such as parts, which was moved with the ma-
chine. She further asked what other machines, parts, jobs, or
equipment the Company was planning to remove from the
plant and the details of when and to where such moves were
being contemplated. She also asked details about bringing
machines (including the drill in question) back from the
premises of subcontractors, and posed several other questions
concerning the processing of work performed on relocated
machines, the cost of relocation, and any expected impact on
unit personnel. The final question in her letter was one of
the questions at issue in this case:
Why didn’t the Company inform the Union of this
move in advance? Why was it not brought up at the ne-
gotiating table?
At negotiations on November 19, Davis was presented
with a written response keyed to the specific questions in her
letter. The Respondent informed her that Admiral hinges and
a drill fixture for Admiral hinges had been relocated. It stat-
ed further that the Company was contemplating the possible
removal of 4000 additional pieces, identified as part 67,773–
2, to be drilled by the subcontractor with the same fixture.
207ACME DIE CASTING
12 In his bargaining notes for December 21, 1990, Salzman indi-
cated that he told the Union that the Company was trying to bring
some order to its present wage program because employees were
‘‘all over the map.’’ For instance, as die caster, the Respondent’s
payroll listed 23 individuals who were earning between $5.50 per
hour and $8.70 per hour. Two employees earned $8.40, two earned
$7.20, two earned $6.90, and two others earned $6.60. The other 15
die casters all earned different rates within the aforementioned range.
In effect, the Respondent had no pay grades, just job titles, and all
wages were essentially individually assigned rates.
13 Eventually the Company responded with a system which had
seven rather than eight pay grades.
14 This is contrary to the finding of Administrative Law Judge
Linton and the Board in Acme II.
The reason offered for the relocation at issue was ‘‘backlog
in die casting and trimming caused parts to be completed
late, resulting in insufficient time and manpower available to
complete job on premises.’’ The Respondent informed the
Union that the machine would be brought back to its plant
on completion of the job, which it estimated would consume
56 hours of work if production proceeded at the rate of 250
pieces per hour. To the question of who was performing the
work and under what labor conditions, the Respondent re-
plied only that ‘‘answers to additional questions being
worked on.’’ The Respondent stated that the machine had not
been sold, that the drilling work was being subcontracted,
and that the first lot of drilled parts was to be delivered to
the Company not later than November 21, adding that the
work would be further processed at the Respondent’s plant
and inspected in accordance with its normal quality control
procedure. The Union was also told that the subcontractor
transferred the machine at its own expense but the Respond-
ent insisted that no hours of work were lost by unit employ-
ees on account of this move.
To the question of why the Company had not bargained
over the transfer, the Respondent replied:
Instant case does not differ from prior instances of sub-
contracting work when critical delivery times or similar
reasons are necessary. Furthermore, it was anticipated
that this action would have no adverse effect on bar-
gaining unit employees’ hours of work.
At one negotiating session, Balma admitted that the Com-
pany could point to no previous instance of farming out a
machine—as distinct from subcontracting work—to a sub-
contractor. According to Balma, subcontractors normally pro-
vide their own machines but, in this instance, it was deemed
quicker and cheaper to let the subcontractor borrow the Re-
spondent’s drill. In later negotiations, when asked about the
present status of the subcontracted drilling work, Salzman
told union negotiators that the subcontractor was not doing
any further drilling work, even though the drill was still at
the subcontractor’s plant, because the Respondent did not
have any more orders to perform on the drill. Salzman also
told them that, when and if additional work became avail-
able, the Company would bring the machine back to its
plant. Balma informed union negotiators that the work was
being performed by the subcontractor at 8 cents per item, as
opposed to an in-house cost to the Company of 5 cents or
6 cents per item. He stated that, at the straight time rate, it
would be cheaper to perform the work in house but admitted
that the same job would be more expensive than subcontract-
ing if the Company had to do the work at overtime rates.
2. The January 1991 wage increase
Early in November 1990, the Union presented to the Re-
spondent at a bargaining session a proposal for an interim
wage increase, subject to further modification in a completed
collective-bargaining agreement. In the words of Davis, ne-
gotiating over wages was ‘‘a fairly complex task’’ because
the Respondent did not have in place a conventional wage
classification system or standard labor grades, so negotiating
over specific rates had to await agreement on these fun-
damental items.12 On November 10, 1990, the Union pro-
posed that unit employees be grouped into eight classifica-
tions, ranging from labor grade 1, the most skilled classifica-
tion, to labor grade 8 (general factory), the least skilled clas-
sification. The proposal grouped all job titles into these pay
grades. While the Respondent had no great disagreement in
the abstract with this proposal there was never any agreement
between the parties as to which employees should fall into
which labor grades.13 Coupled with this proposal was a wage
proposal, to the effect that, within each of these eight labor
grades, immediate hourly increases should be given in the
amount of 25 cents per hour for the highest group of em-
ployees within the grade, 50 cents per hour to the middle
group within each grade, and 70 cents per hour to the lowest
paid employees within each grade. In short, there were, in
effect, a total of 24 different increases in the union proposal,
the purpose of which was to bring about, over a period of
time, a single rate for each labor grade rather than individual
rates for more than 100 employees.
Initially the Respondent rejected the whole idea of an in-
terim wage increase pending completion of negotiations. He
told union negotiators that the practice of the Respondent
was to hire a new employee at $5 per hour and give him
an initial increase of 20 cents an hour and 10-cent increases
thereafter until he reached a particular level or was promoted
to a new job, but he insisted that the Company did not have
a set system of giving wage increases.14 Late in November,
the Respondent presented a formal written proposal by which
it would ‘‘consider implementing a negotiated interim wage
increase’’ and would proceed to negotiate if the Union would
agree to a no-strike proposal for the balance of the contract
talks. Not surprisingly, the Union rejected this offer. A
month or so later, the Respondent orally offered what
amounted to an interim wage proposal of 15 cents an hour
for labor grades 1 and 2; 20 cents an hour for grades 3, 4,
5, and 6; and 25 cents an hour for grade 7. It did not want
this proposal to be termed an ‘‘interim’’ increase but pre-
ferred to call it an ‘‘annual’’ increase. It asked the Union to
agree to the proposal as the annual increase for 1991. A few
days later, they faxed the same proposal to the Union.
At a bargaining session on January 9, 1991, the Union re-
jected the proposal because, in its view, it was too little and
was bad from the standpoint of the distribution of increases.
On January 10, the Union responded with a second proposal
for an interim three-tiered increase but for less money (25),
50, and 65 cents). However, it insisted that this proposal be
deemed an interim increase. The Company’s response was
that it would agree, in concept, to distribute its own proposed
208 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
15 In the Respondent’s code for changes, ‘‘E’’ stands for a cost-
of-living increase.
16 In the Respondent’s code for changes, ‘‘B’’ stands for pro-
motion.
17 According to Garcia’s personnel record, he was fired because he
told the Company that he was absent due to illness when in fact he
was in jail.
annual increase within labor grades in order to narrow the
disparity between individual wage rates in each labor grade.
At the January 15, 1991 bargaining session the Respondent
told the Union that it intended to put its proposed increase
into effect retroactive to January 3. I credit Davis’s testimony
that Salzman made this statement as if it were a fait
accompli. She did not agree to it. In his testimony at the
hearing, Salzman stated that the Union never agreed to his
‘‘numbers.’’ On the following day, the Company posted the
following notice, signed by Company President Robert J.
Novak:
To: Factory Hourly Employees
The Company is pleased to announce an interim
wage increase to be effective January 2, 1991.
This does not apply to those employees with less
than 90 days of employment at Acme Die Casting.
A copy of this notice was then sent to Davis by Salzman.
There is no record evidence that any exemption from this in-
crease pertaining to employees with less than 90 days of
service had ever been proposed or was ever discussed at any
bargaining session.
3. Merit increases
The General Counsel challenges wage increases given di-
rectly by the Respondent, without undergoing the formalities
of collective bargaining, to the Villalpandos (Francisco and
Carmen) and to employee Carlos Garcia. Historically the Re-
spondent had a practice of giving merit or discretionary in-
creases to individual employees who, in the judgment of the
supervisors, plant manager, and the company president, de-
served them because of good attendance, good attitude, or
consistently high performance. There is nothing in writing
which explains, limits, or in any way outlines the awarding
of such merit increases. However, the Respondent’s employ-
ment record form contains a code designation (A) for merit
increases and this letter can be seen, from time to time, next
to entries shown on the employment records of various em-
ployees.
Entries on the employment record of Francisco
Villalpando, designated an aluminum die caster, are as fol-
lows:
7–16–90 $6.60 hr.
9–16–90 6.80 hr. A
12–16–90 7.00 hr. A
1–2–91 7.20 hr. E retroactive15
Entries on J. Carmen Villalpando’s employment record are as
follows:
7–23–90 $5.00 hr.
General factory -
trim die
8–20–90 Breakman/trim 5.20 hr. B16
op. - trim die
8–20–90 Die caster - 5.40 hr. B
Alum. die cast
9–20–90 5.50 hr. B
10–20–90 5.60 hr. B
11–20–90 5.70 hr. B
12–20–90 5.80 hr. B
1–2–91 6.05 hr. E retroactive
1–20–91 6.15 hr. B
2–20–91 hr. B
Some of the entries on Carlos Garcia’s employment record
are as follows:
1–1–90 $5.85 hr. E
2–5–90 6.05 hr. B
4–30–90 6.20 hr. A
8–6–90 6.45 hr. A
1–2–91 6.60 hr. E retroactive
3–22–91 terminated -
falsifying information17
Balma testified that he hired Francisco Villalpando, who
he knew to be an experienced die caster, at a rate consider-
ably above the normal hiring in rate at the factory. At the
time of hire, he concluded an agreement with Francisco that
his wage rate would be increased in 20-cent increments until
it reached an agreed upon level. The above-noted increases
on his record reflect the fact that this agreement was carried
out by the Respondent. With respect to Garcia, Balma was
unable to explain the nature of the 25-cent merit increase
awarded on August 6, 1990. Balma called Garcia ‘‘the worst
employee we ever had. He had an atrocious record,’’ and
termed the increase in question a ‘‘mistake.’’
The Respondent placed in evidence a document, dated
March 1, 1990, setting forth wage rates to be paid to various
classes of employees. The document recited a starting rate
for full-time factory employees of $5 an hour. Upon the
transfer of general factory, trim press, or secondary employ-
ees to the position of die caster, there would be an imme-
diate 20-cent increase, followed by increases of 10 cents per
month until the employee reached $5.40, and then 20 cents
more each month until the employee reached the maximum
of $6 an hour. For trim press operators, there was a 20-cent
increase immediately upon promotion to trim press/break die
casters and 10 cents a month thereafter up to a maximum of
$5.50 an hour. For trim press/break die casters who were
promoted to die caster, there was a 20-cent increase imme-
diately upon promotion and an additional 10 cents a month
up to a $6-a-month maximum. However, Catherine Mooney,
Respondent’s controller, testified that the Company did not
strictly adhere to the provisions of its announced wage pro-
gression system and affirmed that some employees were ac-
tually making more than the maximum amounts recited in
the document because general wage increases had been
granted. She noted that the Company could and did make
private agreements in order to obtain the services of experi-
enced applicants and that, in effect, there was no real maxi-
mum wage rate for any job classification, notwithstanding
the figures recited in the published policy statement. Wages
209ACME DIE CASTING
18 In Acme III, Judge Linton held, with Board approval, that he
would infer some slight animus from the matters litigated in Acme
I, even though they were removed in time from the violations al-
leged in his case.
19 In making this calculation I am only attempting to arrive at a
generalized idea of the amount of money involved in the disputed
work in order to evaluate the Respondent’s de minimis argument.
Any precise figure would have to be determined in a supplemental
proceeding if it cannot be agreed on by the parties.
20 I do not credit one of the Respondent’s many business justifica-
tions for subcontracting, namely, that it was faced with an emer-
gency generated by Admiral’s request for an immediate delivery of
door hinges. A production schedule for the drilling of these hinges,
placed in evidence by the General Counsel, shows no consistency at
all in the assignment of this work to employees. Days and, in some
instances, weeks went by when no drilling at all was performed.
Once the subcontractor completed the work in question in early De-
cember, the drill was never used again, either by the Respondent or
by the subcontractor. The only evidence of customer pressure was
self-serving hearsay on the part of Balma, a witness whom I have
discredited. There is nothing in writing, either from Admiral or any-
one else, substantiating the claim of emergency brought on by cus-
tomer pressure for immediate delivery, nor is there any precision
even in Balma’s testimony as to the nature of the pressure and ex-
actly how many door hinges the customer wanted to be shipped by
any given date. Accordingly, I place no reliance on this factor in
analyzing the Respondent’s business justification for subcontracting.
21 The cases relied on by the Respondent to support its position
that it was justified in subcontracting work without notifying or bar-
gaining with the Union involved, for the most part, instances of sub-
contracting by employers who have a long and mature bargaining re-
lationship with the unions in their respective plants, including man-
agement-right clauses in a long series of contracts. In this instance,
Continued
actually received by employees, as reflected in payroll
records in evidence, bear out this statement.
II. ANALYSIS AND CONCLUSIONS
This case in its entirety must be viewed against a back-
ground of longstanding antiunion animus on the part of this
Respondent,18 including its proclivity to make unlawful uni-
lateral changes in wages, hours, and terms and conditions of
employment, the self-same conduct which has been alleged
in this case. It is also particularly noteworthy that the actions
of the Respondent litigated in this case were performed in
the face of a decree of the court of appeals which had been
issued only a few months before the Respondent embarked
on the course of conduct at issue herein.
The admitted unilateral subcontracting of unit work al-
leged to be a violation of the Respondent’s duty to bargain
collectively with the Union cannot be justified on the basis
of past practice. At no time in its corporate history did the
Respondent ever accompany the subcontracting of unit work
with a relocation of the custom-made tools necessary to per-
form that work. Other instances of subcontracting relied on
by the Respondent in support of its past practice argument—
silk screening and painting—involved work which the Re-
spondent did not have the in house capacity to perform. Such
was certainly not the case with regard to the drilling of holes
in refrigerator door hinges. Its past practice was to drill such
holes; it interrupted that practice because it wanted to save
money on the operation. It is disingenuous for the Respond-
ent to argue that a saving on labor costs was not the motive
for subcontracting because, at 8 cents a hinge, the sub-
contractor was charging the Respondent more than its own
in house cost of production, namely 5 or 6 cents per hinge.
The precise problem at issue in this case is not a comparison
of subcontractor cost with in house production cost at a
straight time hourly rate but a comparison with the Compa-
ny’s cost if the operation were to be performed at time-and-
a-half for overtime. Simple mathematics indicates that it
would cost the Respondent more to drill hinges in its own
plant at overtime premium rates than to subcontract the work
at 8 cents a hinge. Balma admitted as much to union nego-
tiators at a bargaining session. He also told a group of em-
ployees who protested the removal of the drilling machine
that the Company was doing so in order to avoid paying
overtime. The fact that no employees were laid off or suf-
fered a reduction in their workweek—even if true—is irrele-
vant. The crux of their grievance is that they lost additional
overtime work that they might have enjoyed if the Respond-
ent had left the work in the plant.
Respondent claims that it was privileged to relocate the
machine and the drilling work the machine was used to per-
form because the amount of work in question was de mini-
mis. The Respondent’s evidence was that the amount of time
involved in the performance of the disputed work ranged be-
tween 56 and 100 hours. Different figures were given on dif-
ferent occasions. Assuming that 100 hours of work would
have been performed at a premium rate of $9 per hour, the
subcontracting meant lost income to one or more of the Re-
spondent’s employees of an estimated $900. I do not regard
this amount as de minimis.19
The Supreme Court long ago held that an employer has a
duty to bargain collectively over a decision to subcontract
unit work and over the effects of such subcontracting. This
duty includes the duty to advise a union in advance of mak-
ing a decision to subcontract and to negotiate with it in good
faith to impasse before taking any action. Fibreboard Paper
Products Corp. v. NLRB, 379 U.S. 203 (1964). The facts of
this case do not fall within any exception to the Fibreboard
rule which were carved out in subsequent cases. A business
justification to unilateral subcontracting of work is no de-
fense where, as here, the purpose of the subcontracting was
to reduce labor costs. Connecticut Color, 288 NLRB 699
(1988). The work subcontracted in this case was a minor
item in the Respondent’s production schedule and involved
one of the Respondent’s smaller customers, a customer that
it no longer serves notwithstanding the effort it assertedly
made to meet the customer’s exacting delivery target.20
Manifestly, the subcontracting in question did not involve a
significant change in the scope and direction of the Respond-
ent’s enterprise. All that subcontracting in this case involved
was a change in the identity of employees who were as-
signed to drill holes in 21,000 hinges at a speed of 250
hinges an hour. Accordingly, the subcontracting in this case
falls squarely within the rule recently announced by the
Board in Torrington Industries, 307 NLRB 809 (1992).
Hence, by subcontracting drilling work and removing from
its plant to the premises of a subcontractor a machine de-
signed to be used in the performance of subcontracted work,
without either notifying the union in advance or bargaining
with it in good faith to impasse over its contemplated action,
the Respondent herein violated Section 8(a)(1) and (5) of the
Act.21
210 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the Board is confronted with an example of subcontracting during
negotiations over an initial contract by an employer who spent years
trying to avoid any obligation to bargain at all. In Central Maine
Morning Sentinel, 295 NLRB 367 (1989), the Board noted that both
it and the courts scrutinize bargaining where there is a change in
terms of employment during initial contract negotiations, recognizing
that such changes can jeopardize the efficacy of a newly certified
union.
22 The parties continued to negotiate following the unilateral estab-
lishment of the January 1991 wage increases and met several times
for this purpose throughout 1991.
With regard to a retroactive across-the-board wage in-
crease of 15, 20, and 25 cents per hour, which the Respond-
ent granted effective January 2 or 3, 1991, the Respondent
justifies its action on the alternative theories that the Union
consented to these increases or that it did not consent to
them by bargaining to impasse over the subject. Alternative
pleadings may have some place in administrative practice but
not in evaluating the good faith of an employer’s action. At
the time these increases were announced, the Union and the
Respondent were apart at the bargaining table on the
amounts which employees should receive on an interim basis
pending completion of negotiations, as well as the manner in
which any increases should be spread around. The Union
proposed increases in eight pay grades, to be spread within
each pay grade to equalize, or nearly equalize, the wages re-
ceived by each employee in each grade. The Respondent pro-
posed that there be seven pay grades and that employees in
each grade receive the same increase. However, it was will-
ing to give larger amounts to employees in the lower grades
than to those in the higher pay grades. Moreover, the unilat-
erally instituted wage increase which the Respondent an-
nounced to its employees on January 16 contained an exemp-
tion for employees who had worked less than 90 days for the
Company. No such exemption was ever even discussed at the
bargaining table, much less agreed upon. Accordingly, there
is absolutely no foundation in the record for any suggestion
that the Union agreed to what the Respondent did.
There is also no factual basis for claiming that the parties
herein were at impasse when the wage increase was an-
nounced.22 Even if the history of this bargaining could define
an irreconcilable disagreement over contract issues, the Re-
spondent herein would not be privileged to rely upon the
Board’s impasse doctrine to justify moving ahead unilater-
ally. Impasse can only be legitimately claimed if an em-
ployer has bargained in good faith and has not committed
unfair labor practices which have tainted its claim of good
faith. Taft Broadcasting Co., 163 NLRB 475 (1967); United
Contractors, 244 NLRB 72 (1979). In this case, the Re-
spondent has been guilty of repeated violations of Section
8(a)(5) of the Act going back to 1987, first by refusing to
bargain at all with the Union (see Acme II) and then by mak-
ing several unilateral changes in wages and terms and condi-
tions of employment (see Acme III). In light of this history,
it cannot claim benefit of any impasse in bargaining since its
own intransigent and illegal behavior, including the unilateral
subcontracting of unit work involved in this case, would
have contributed to any stalemate. Accordingly, by unilater-
ally granting wage increases in January 1991, the Respondent
herein again violated Section 8(a)(1) and (5) of the Act.
Merit increases have long been held to be a mandatory
subject of bargaining. NLRB v. Katz, 369 U.S. 736 (1962).
There is no claim by anyone that, in granting a series of in-
creases to the Villalpandos and to Garcia that the Respondent
bargained with the Union, either as to the granting of an in-
crease or as to the amount. The Respondent’s excuse for
doing so was that these increases were granted in accordance
with past practice. In the case of Garcia, its other defense
was that the 25-cent increase he received was a mistake,
since he was a poor employee and did not really merit any-
thing.
Even if an employer has had a past practice of granting
wage increases of a given amount at certain times, to the ex-
tent that any particular wage increase amounts to an exercise
of its discretion rather than an expected practice, an em-
ployer must notify the bargaining agent and offer to bargain
over both the granting of the increase and the amount. Peele
Co., 289 NLRB 113 (1988); Colorado-Ute Electric Assn.,
295 NLRB 607 (1989). The Union herein has been the duly
designated bargaining agent of the Respondent’s production
and maintenance employees since it won a representation
election in 1987, so the Respondent’s duty to bargain com-
menced at that time. Anything it has done since its duty to
consult and negotiate began cannot be the basis of a claim
of lawful past practice since it arose in derogation of that
duty, and no individual contract concluded with an employee
in derogation of an on-going duty commencing 1987 can
provide the Respondent with an excuse for granting individ-
ual merit or discretionary increases.
In light of Mooney’s testimony about the flexibility of the
Respondent’s wage scales and practices, there is no basis for
the Respondent to claim factually that it had any past prac-
tice with respect to granting individual wage increases. Since
its wage pattern was ‘‘all over the lot,’’ to use Salzman’s ex-
pression, it is clear that wages were individually set through-
out the bargaining unit, notwithstanding an occasional grant
of an across-the-board increase applicable to everyone, as
found in Acme III. In the case of Francisco Villalpando, it
was admitted that the Respondent negotiated an individual
deal with him at the time of his hire in 1990 which provided
for individual increases separate and apart from any which
might be granted to any other employee. If collective bar-
gaining means anything, it means that employers may not cut
separate deals with individual employees without the union’s
consent, since it is the union’s prerogative to bargain on be-
half of every employee in the unit. Francisco Villalpando’s
increases were designated as merit increases on his employ-
ment record and at least two of them were awarded within
the 10(b) period. Such increases cannot be justified on the
basis of actions the Respondent previously took which it had
no right to take.
Carmen Villalpando’s multiple and rapid pay increases fol-
lowed no discernible objective pattern and were, for the most
part, discretionary in character. As such, they could not be
lawfully granted before the Union was consulted and given
an opportunity to negotiate. With regard to Garcia, it is frivo-
lous for the Respondent to contend that he was not given a
merit increase or that the increase he received was a mistake,
since Garcia’s record designated the disputed 25-cent raise as
a merit increase and since he had received another increase
a few months before which was similarly designated in his
employment record. Whether or not he deserved the increase
is immaterial and one should not dwell on the term ‘‘merit’’
in addressing its propriety under the Act. The raise was an
211ACME DIE CASTING
23 F. W. Woolworth Co., 90 NLRB 289 (1950).
24 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
individually granted discretionary raise and, as such, fell
within the rule of Katz. Accordingly, by granting merit or in-
dividually negotiated discretionary increases without consult-
ing the Union and giving it an opportunity to bargain, the
Respondent herein violated Section 8(a)(1) and (5) of the
Act. I so find and conclude.
CONCLUSIONS OF LAW
1. Acme Die Casting, a Division of Lovejoy Industries In-
corporated is now and at all times material herein been an
employer engaged in commerce within the meaning of Sec-
tion 2(2), (6), and (7) of the Act.
2. United Electrical, Radio & Machine Workers of Amer-
ica (UE) is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
3. All full-time and regular part-time production and main-
tenance employees employed by the Respondent at its facil-
ity located at 3610 Commercial Avenue, Northbrook, Illinois,
excluding all office clerical employees, technical employees,
tool and die makers, managerial employees, professional em-
ployees, confidential employees, guards, and supervisors as
defined in the Act, constitute a unit appropriate for collective
bargaining within the meaning of Section 9(b) of the Act.
4. At all times material herein, the Union has been the ex-
clusive collective-bargaining representative of employees em-
ployed in the unit found appropriate in Conclusion of Law
3 for the purpose of collective bargaining within the meaning
of Section 9(a) of the Act.
5. By unilaterally subcontracting drilling work and relocat-
ing a machine used to perform said work to the premises of
the subcontractor; by unilaterally granting across-the-board
pay increases to bargaining unit employees; and by unilater-
ally granting merit or discretionary wage increases to indi-
vidual employees, the Respondent violated Section 8(a)(1)
and (5) of the Act.
6. The aforesaid unfair labor practices have a close, inti-
mate, and substantial effect on the free flow of commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
REMEDY
Having found that the Respondent herein has engaged in
certain unfair labor practices, I will recommend that it be re-
quired to cease and desist therefrom and to take certain af-
firmative actions designed to effectuate the purposes and
policies of the Act. Because the violations of the Act by this
employer, as found in this and in previous Board cases, are
repeated and pervasive and evidence on its part an attitude
of total disregard for its statutory obligations, I will rec-
ommend to the Board a so-called broad 8(a)(1) remedy de-
signed to suppress all violations of that section of the Act.
Hickmott Foods, 242 NLRB 1357 (1979). I will recommend
that the Respondent be required to make whole its employees
for any loss of earnings which they may have sustained by
reason of the unlawful subcontracting found herein, in ac-
cordance with the F. W. Woolworth formula,23 with interest
at the rate prescribed by the Tax Reform Act of 1986 for the
overpayment and underpayment of income tax. New Hori-
zons for the Retarded, 283 NLRB 1173 (1987). I will further
recommend to the Board that the Respondent be placed
under yet another bargaining order, requiring it to recognize
and bargain collectively in good faith with the Respondent.
Because the Respondent has yet to comply with the duty to
bargain in good faith that was imposed upon it in Acme II,
I will recommend that the certification of the Union be ex-
tended for a period of 1 year, beginning with the date that
the Respondent ceases to violate Section 8(a)(5) of the Act
and starts to bargain with a view toward reaching a contract.
Mar-Jac Poultry Co., 136 NLRB 785 (1962). I also rec-
ommend that any further violations of Section 8(a)(5) of the
Act committed by this Respondent be prosecuted as con-
tempt of the outstanding decree of the United States Court
of Appeals for the Seventh Circuit, not in just another unfair
labor practice complaint leading to another bargaining order.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended24
ORDER
The Respondent, Acme Die Casting, a Division of
Lovejoy Industries Incorporated, Northbrook, Illinois, its offi-
cers, agents, supervisors, attorneys, successors, and assigns,
shall
1. Cease and desist from
(a) Unilaterally subcontracting bargaining unit work or
unilaterally transferring to subcontractors machinery used in
performing bargaining unit work.
(b) Unilaterally granting either across-the-board or merit
increases to bargaining unit employees; provided that nothing
herein shall be deemed to require the Respondent to cease
giving effect to any wage increases of any kind that it has
granted heretofore.
(c) Refusing to recognize or bargain collectively in good
faith with United Electrical, Radio & Machine Workers of
America (UE) as the exclusive collective-bargaining rep-
resentative of all the full-time and regular part-time produc-
tion and maintenance employees employed at its Northbrook,
Illinois facility, excluding office clerical employees, technical
employees, tool and die makers, professional, managerial,
and confidential employees, guards, and supervisors as de-
fined in the Act.
(d) By any other means or in any other manner interfering
with, restraining, or coercing employees in the exercise of
the rights’ guaranteed to them by Section 7 of the Act.
2. Take the following affirmative actions necessary to ef-
fectuate the policies of the Act.
(a) Recognize the Union on resumption of bargaining in
good faith and for 1 year thereafter as if the initial year of
certification had not expired.
(b) Recognize and, upon request, bargain collectively in
good faith with the Union as the exclusive collective-bar-
gaining representative of the employees in the above-des-
ignated bargaining unit.
(c) Make whole any employees for any loss of pay or ben-
efits suffered by them by reason of the unlawful subcontract-
ing found herein, in the manner described above in the rem-
edy section.
212 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
25 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
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.’’
(d) Preserve and, on request, make available to the Board
or its agents for examination and copying, all payroll records,
social security payment records, timecards, personnel records
and reports, and all other records necessary to analyze the
amount of backpay due under the terms of this Order.
(e) Post at the Respondent’s Northbrook, Illinois plant
copies, in English and Spanish, of the attached notice marked
‘‘Appendix.’’25 Copies of the notice, on forms provided by
the Regional Director for Region 13, after being signed by
the Respondent’s authorized representative, shall be posted
by the Respondent immediately upon receipt and maintained
for 60 consecutive days in conspicuous places including all
places where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by any
other material.
(f) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.