Allied Products Corp.

National Labor Relations Board - Board Decisions

Jun 30, 1975

218 N.L.R.B. 1246 (N.L.R.B. 1975)

1246 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Allied Products Corporation, Richard Brothers Divi-
sion and International Union , United Automobile,
Aerospace and Agricultural Implement Workers of
America (UAW), Local 701. Case 7-CA-11471
June 30, 1975
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND
PENELLO
On March 24, 1975, Administrative Law Judge
Frank H. Itkin issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
We agree with the Administrative Law Judge's
finding that Respondent violated Section 8(a)(5) and
(1) of the Act by refusing to bargain with the Union
concerning the two unit employees in the classifica-
tions of secretary to the division general manager
and secretary to the vice president of manufacturing
and physical resources, respectively, and with his
recommended Order requiring Respondent, upon
request, to bargain with the Union. While we also
agree with the Administrative Law Judge's fording
that Respondent additionally violated Section 8(a)(5)
and (1) by unilaterally suspending during collective-
bargaining negotiations its previously established
merit wage review and/or increase program, we do
not find appropriate his recommended remedy with
respect to this violation, for the following reasons.
The Administrative Law Judge, although finding
that Respondent unilaterally suspended its merit
review program without prior notice to, or consulta-
tion with, the Union, concluded that neither a
restoration of the status quo ante nor a make-whole
remedy was warranted herein because Respondent
and the Union subsequently discussed this subject
during negotiations. He therefore recommended that
Respondent be required only to cease and desist
prospectively from unilaterally discontinuing the
merit review program. However, in cases, like here,
1 See, e.g., American Smelting and Refining Company, 167 NLRB 204
(1967); Southland Paper Mills, Inc., 161 NLRB 1077, 1078 (1966).
2 N.L.R. B. v. Bernie Katz, et al., d/bla Willumubtag Steel Products Co.,
369 U.S. 736,747 (1962).
3 In fashioning this remedy, we also particularly note that the allegation
218 NLRB No. 188
involving a violation of Section 8(a)(5) based on a
respondent's unilaterally altering existing benefits, it
is the Board's established policy to order restoration
of the status quo ante to the extent feasible, and in the
absence of evidence showing that to do so would
impose an undue or unfair burden upon the
respondent.' We ford no basis here which justifies a
departure from this policy. Thus, contrary to the
Administrative Law Judge, the fact that Respondent
presented the Union with a fait'accorripli at the outset
of negotiations must necessarily have obstructed
meaningful bargaining.2 To hold that bargaining in
such circumstances is an adequate substitute for
remedial action would unwarrantedly relieve Re-
spondent of its statutory obligation to maintain
existing benefits during negotiations and unjustifi-
ably ignore the rights of those employees who may
have been adversely affected by Respondent's breach
of that duty. Furthermore, the record discloses no
evidence establishing that an order restoring the
status quo ante here would impose an unfair burden
upon Respondent. We therefore conclude that the
recommended Order of the Administrative Law
Judge falls short of effectively remedying Respon-
dent's unlawful conduct.
In view of the foregoing, we find that it will best
effectuate the purposes of the Act to order Respon-
dent to reinstitute its former merit wage review
program and to apply it retroactively from on or
about May 3, 1974, the date on which Respondent
first gave unequivocal notice to the Union of its
decision to suspend that program pending negotia-
tions.3 In furtherance of this remedy, we shall also
specifically order Respondent to make its employees
in the bargaining unit whole by paying them the
differences, if any, between their actual wages and
the wages they would have received had the merit
review program not been suspended during such
period, together with interest thereon at the rate of 6
percent per annum, as set forth in Isis Plumbing &
Heating Co., 138 NLRB 716 (1962).4
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Allied Products Corporation, Richard Brothers
Division, Hillsdale, Michigan, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
of the complaint with respect to Respondent 's unilateral suspension of its
merit wage review program is limited to events occurring since on or about
May 3, 1974.
4 Cf. General Motors Acceptance Corporation, 196 NLRB 137, 145-146
(1972).
ALLIED PRODUCTS CORPORATION, RICHARD BROS. DIV. 1247
(a) Failing and refusing, upon request, to bargain
collectively and in good faith with respect to rates of
pay, wages, hours of'employment, and other terms
and conditions of employment with International
Union, United Automobile, Aerospace and Agricul-
tural Implement Workers of America (UAW), Local
701, as the exclusive bargaining representative of the
employees in the unit described below, by unilateral-
ly discontinuing merit wage reviews and/or increases
for the unit employees without prior notice to or
bargaining with the Union, and by refusing, after
having been requested, to bargain with the Union
concerning the unit employees in the classifications
of secretary to the division general manager and
secretary to the vice president of manufacturing and
physical resources. The appropriate bargaining unit
is:
All office clerical employees, including the
secretary to the division general manager and the
secretary to the vice president of manufacturing
and physical resources, employed by the Employ-
er at its facility located at 235 East Bacon Road,
Hillsdale, Michigan, but excluding all production
and maintenance employees, technical employ-
ees, professional employees, confidential employ-
ees, guards and supervisors as defined in the Act,
and all other employees.
(b) In any like or related manner interfering with,
restraining , or coercing its employees in the exercise
of the rights guaranteed them in Section 7 of the Act.
2. Take, the following affirmative action which is
deemed necessary to effectuate the purposes and
policies of the Act:
(a) Upon request, bargain collectively and in good
faith with the Union as the exclusive representative
of its employees in the above appropriate unit with
respect to, rates of pay, wages, hours of work, and
other terms and conditions of employment and, if an
understanding is reached, embody such understand-
ing in a signed agreement.
(b) Reinstitute the merit wage review and/or wage
increase program formerly in effect and apply it
retroactively from on or about May 3, 1974. Further,
make the employees in the bargaining unit whole by
paying to them the differences, if any, between their
actual wages and the wages they would have received
had the merit wage review and/or wage increase
program not been suspended during the above
period, together with interest at the rate of 6 percent
per annum as set forth above.
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll ' records, social security payment records,
5 In the event that 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
timecards, personnel records and reports, and all
other records necessary to analyze the amount of
backpay due under the terms of this Order.
(d) Post at its facility at Hillsdale, Michigan, copies
of the attached notice marked "Appendix." 5 Copies
of said notice, on forms provided by the Regional
Director for Region 7, after being duly signed by
Respondent's representative, shall be posted by
Respondent immediately upon receipt thereof, and
be maintained by it for 60 consecutive days there-
after, in conspicuous places, including all places
where notices to employees are-customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
(e) Notify the Regional Director for Region 7, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
MEMBER KENNEDY, concurring in part and dissenting
in part:
I agree with my colleagues in finding that Respon-
dent unlawfully refused to bargain with the Union
for employees in the classifications of secretary to the
division manager and secretary to the vice president
of manufacturing and physical resources. I disagree,
however, with their further finding, that Respondent
violated Section 8(a)(5) by discontinuing merit wage
reviews, and the increases which accompanied those
reviews. In my opinion Section 10(b) bars the latter
finding.
The parties stipulated that from at least 1970 to
May 3, 1974, Respondent followed the policy of
annually reviewing the work performance of office
clericals, and as a result of such reviews granting
merit wage increases to the employees ranging from
10 cents to 25 cents per hour.
On December 20, 1973, the Union won a represen-
tation election conducted in a unit of office -clerical
employees. On February 27, 1974, employee Moore,
who was entitled to her annual merit review, was
bypassed. Early in March she asked Respondent's
office manager why her merit review had not been
made. The latter gave a noncommittal answer.
Moore did not pursue -the matter further with any
company official. However, at' a union meeting held
on March 18, Moore informed DeMott, the Union's
international representative, that she had been
passed over for her merit review and asked him
whether it was legal for Respondent to do so.
DeMott answered that "we ought to take that up
with the Company." On May 2, a second employee
was apparently bypassed for her merit review. For
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
1248 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the, first time DeMott raised the question of the merit For the foregoing reasons, I would find that
reviews at the initial bargaining session held on May Section 10(b) bars consideration of the complaint
3. Respondent answered'that the practice of granting allegation based on the, withholding of merit wage
merit wage increases had been suspended in light of increases. I therefore dissent from the majority's
the contract negotiations. On October 7, the Union decision to the contrary.
filed the unfair labor practice charges which are the
basis of the present complaint.
Respondent contended, inter alia, that since it had
decided to suspend the merit increase review pro-
gram by February 27, 1974, and the Union was made
aware of this suspension at least as early as March
18, a complaint based on this conduct was time
barred by Section 10(b) 6 inasmuch as the unfair
labor practice charge was filed more than 6 months
after March 18.
In rejecting the argument based on Section 10(b),
the Administrative Law Judge, relying on General
Motors Acceptance Corporation, 196 NLRB 137
(1972), enfd. 476 F.2d 850 (C.A. 1, 1973), held that
that section did not bar the complaint because
employees were denied their wage increases during
as well as before the 10(b) period. Former Chairman
Miller and I dissented in General Motors Acceptance.
We argued, on -the 'basis of the Board's decision in
Bonwit Teller, Inc., 96 NLRB 608 (1951), enforce-
ment denied on other grounds 197 F.2d 640 (C.A. 2,
1952), cert. denied 345 U.S. 905 (1953), that when
respondent in that case decided to freeze merit wage
increases because of the pendency of a representa-
tion petition, the violation of the Act occurred on the
date this decision was taken and started the running
of Section 10(b). We rejected the notion there was a
continuing violation repeated each time a merit wage
increase was withheld from an employee. Although
the court enforced General Motors Acceptance and
rejected the 10(b) argument, it did so upon the
ground that in the aggregate a number of acts
committed by the respondent within the limitation
period indicated that the respondent "was attempting
to discredit the union by shifting full responsibility to
it for the employees' loss of the merit increases." In a
footnote; the court added (fn. 7):
This conclusion of course distinguishes the
instant case from those relied on by the company,
like honwit Teller . . . where the employer
committed no unlawful conduct during the
limitations period, and from our recent decision
in N.L.R.B. v. Field & Sons, 462 F.2d 748 (1st. Cir.
1972).
The present case is like Bonwit Teller, rather than like
General Motors Acceptance, inasmuch as there is no
basis for any finding that Respondent's conduct
during the 10(b) period was aimed at discrediting the
Union rather than preserving what it regarded as its
necessary neutrality.
6 Sec. 10(b) provides:
That no complaint shall issue based upon any unfair labor practice
occurring more than six months prior to the filing of the charge with
the Board ....
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a full trial in which both sides had the
opportunity to present their evidence, the National
Labor Relations Board has found that Allied
Products Corporation, Richard Brothers Division,
has violated the National Labor Relations Act, and
has , ordered us to post this notice. We therefore
notify you that:
WE WILL NOT, upon request, fail or refuse to
bargain collectively and in good faith with respect
to rates of pay, wages, hours of employment, and
other terms and conditions of employment, with
International Union, United Automobile, Aero-
space and Agricultural Implement Workers of
America (UAW), Local 701, as the exclusive
bargaining representative of the employees in the
unit described below, by unilaterally discontinu-
ing merit wage reviews and/or increases for the
unit employees without prior notice to or bargain-
ing with the Union, or by refusing, after having
been requested, to bargain with the Union
concerning the unit employees in the classifica-
tions of secretary to the division general manager
and secretary to the vice president of manufactur-
ing and physical resources. The appropriate unit
is:
All office clerical employees, including
the secretary to the division general manager
and the secretary to vice president of
manufacturing and physical resources, em-
ployed by the Employer at its facility located
at 235 East Bacon Road, Hillsdale, Michi-
gan, but excluding all production` and
maintenance employees, confidential em-
ployees, guards, and supervisors as defined
in the Act, and all other employees.
WE WILL NOT, in any like or related manner,
interfere with, restrain, or coerce our employees
in the exercise of rights guaranteed them in
Section 7 of the National Labor Relations Act.
ALLIED PRODUCTS CORPORATION, RICHARD BROS . DIV. 1249
WE WILL, upon request, bargain collectively
and in good faith with the Union as the exclusive
representative of our employees in the above
appropriate unit with respect to rates of pay,
wages, hours of work, and other terms and
conditions of employment and, if an understand-
ing is reached, embody such understanding in a
signed agreement.
WE WILL reinstitute the merit wage review
and/or wage increase program formerly in effect
and apply it retroactively from on or about May
3, 1974, by paying the employees in the above-
described unit the differences, if any, between
their actual wages and the wages they would have
received during the above period, together with
interest thereon at the rate of 6 percent per
annum.
ALLIED PRODUCTS
CORPORATION, RICHARD
BROTHERS DIVISION
DECISION
FRANK H. ITKIN, Administrative Law Judge. This case
was tried before me on January 21, 1975, at Hillsdale,
Michigan. The unfair labor practice charge was filed by
Charging Party Union on October 7 and the unfair labor
practice complaint issued on November 27, 1974. The
principal question presented is whether Respondent
Company violated Section 8(a)(5) and (1) of the National
Labor Relations Act by refusing to bargain with the
Charging Party Union as the duly certified representative
of certain employees in an appropriate bargaining unit and
by unilaterally discontinuing merit wage reviews and
increases for the unit employees without prior notice to or
bargaining with the Charging Party Union. Upon the
entire record, including my observation of the witnesses,
and after due consideration of the bfief filed by counsel for
the Company, I make the following findings of fact and
conclusions of law:
FINDINGS OF FACT
Respondent Company, a Delaware corporation, main-
tains its principal office and place of business in Hillsdale,
Michigan, where it is engaged in the manufacture, sale, and
distribution of automotive parts and related products.
During the year ending December 1973, Respondent sold
and distributed at its Hillsdale facility products valued in
excess of $500,000, of which products there were goods
valued in excess of $50,000 which were shipped directly
outside of Michigan. I find and conclude, as stipulated,
that Respondent Company is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act. And, I find and conclude, as further stipulated,
that Charging Party Union is a labor organization within
the meaning of Section 2(5) of the Act.
I. RESPONDENT COMPANY'S REFUSAL TO BARGAIN
CONCERNING CERTAIN UNIT EMPLOYEES
On December 20, 1973, a majority of Respondent
Company's employees in the unit described below, by a
secret ballot election conducted pursuant to "A Stipulation
for Certification Upon Consent Election" in Board Case 7-
RC-12139, selected the Charging Party Union as their
bargaining agent. The unit consisted of:
All office clerical employees employed by the Employ-
er at its facility located at 235 East Bacon Road,
Hillsdale, Michigan, but excluding all production and
maintenance employees, technical employees, profes-
sional employees, confidential employees, guards, and
supervisors as defined in the Act, and all other
employees.
On March 5, 1974, the Board issued its Decision and
Certification of Representative certifying the Charging
Party Union as the exclusive bargaining agent for the unit
employees. Thereafter, on July 22, 1974, the Board's
Regional Director for the Seventh Region issued a
Decision and Order Clarifying Unit in Board Case 7-UC-
101, wherein the classifications of "secretary to the division
general manager" and "secretary to the vice president of
manufacturing and physical resources" were specifically
included in the above unit. A request for review of the
Director's Decision and Order Clarifying Unit was denied
by the Board on August 21, 1974.
It is undisputed that since about late September 1974,
Respondent Company, although requested to do so, has
refused to bargain with Charging Party Union concerning
the employees in the unit classifications of "secretary to the
division general manager" and "secretary to the vice
president of manufacturing and physical resources."
Respondent asserts in its answer "that an office clerical
unit which would include the secretary to the division
general manager and the secretary to the vice president of
manufacturing and physical resources" is not a unit
appropriate for collective-bargaining purposes. Respon-
dent admits its refusal to bargain as allegedwith respect to
these disputed employees, arguing that "these two employ-
ees should have been excluded because they are confiden-
tial employees."
Respondent Company, in the instant proceeding, makes
no attempt to introduce any newly discovered or previous-
ly unavailable evidence regarding the appropriateness of
the above unit determination. Further, Respondent does
not claim before me any special circumstances which
would warrant a reexamination by the Board of the unit
determination, as clarified in Case 7-UC-101. Respondent
is therefore precluded from Mitigating this issue and,
accordingly, the unit as alleged' Is found appropriate for
collective-bargaining purposes. See Section 102.67(1),
Board Rules and Regulations;' Champa Linen Service
Company, 177 NLRB 798, fn.2 (1969), enfd. 437 F.2d 1259
1250 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(C.A. 10, 1971); The Hertz Corporation, 190 NLRB 665,
666 (1971).1 Consequently, Respondent's admitted refusal
to bargain with Charging Party Union concerning the
disputed employees in the above unit classifications is
violative of Section 8(a)(5) and (1) of the Act. Cf. Champa
Linen Service Co., supra.
U. 'RESPONDENT COMPANY'S DECISION TO
DISCONTINUE MERIT WAGE REVIEWS AND INCREASES
A. The Sequence of Events
The complaint alleges that since about May 3, 1974,
Respondent Company, without prior notice to and/or
bargaining with the Charging Party Union, informed the
Charging Party Union of the Company's unilateral
decision to discontinue merit wage reviews and increases
for the unit employees. Respondent, in its answer, denies
this allegation. The parties stipulated that Respondent
Company "since at least 1970 to May 3, 1974 . . . has
followed the policy of reviewing the work performance of
each full time office clerical employee it hires after the first
six months of full time employment and annually there-
after on or near the employee's anniversary date,
except in cases of layoff where the review date may be
extended . . . [and] that as a result of such performance
reviews the Employer has granted merit wage increases to
each of such employees in amounts ranging from .10 per
hour, to .25 per hour." 2 In addition, the following
testimony was presented:
David DeMott, the Union's International representative,
testified that he first received notification during March
1974 that the Charging Party Union had been certified by
the Board as bargaining agent for the Company's office
clerical employees .3 DeMott recalled that he first com-
menced `negotiations with the Company's representatives
with respect to the office clerical employees on May 3,
1974. There were some nine bargaining sessions between
the parties from May 3 to November 25, 1974. DeMott
testified that between early March, when Board certifica-
tion issued, and May 3, 1974, when the first bargaining
session was held, the Union and the Company had no
discussions with respect to "wage reviews and/or wage
increases for the office employees" and, during this same
period, the Company never notified the Union "of its
intent not to continue its practice of annual wage reviews,
wage increases , for its office employees." DeMott, as he
explained, first learned that the Company had discontin-
ued its merit wage review and/or increase policy at a
Union meeting held on March 18, 1974. DeMott testified:
I conducted a meeting with the membership after I was
assigned to the plant . . . . It was March 18. And we
i I therefore find and conclude that a unit appropriate for collective-
bargaining purposes under Section 9(b) of the Act consists of.
All office clerical employees, including the secretary to the division
general manager and the secretary to the vice president of manufactur-
ing and physical resources , employed by the Employer at its facility
located at - 235 Bacon Road , Hillsdale, Michigan, but excluding all
production and maintenance employees, technical employees, profes-
sional employees, confidential employees,- guards, and supervisors as
defined in the Act, and all other employees.
discussed, among other things, what our demands
might be. We elected officers at that meeting, and it
was at that meeting that the issue was raised with me,
or at least it was commented that [employee] Rhonda
Moore had been by-passed for her wage review. Now, I
don't recall a lot of discussion on it at that time because
she had just been by-passed within a matter of a couple
of weeks.... So that issue was raised with me at that
time and my response was that we ought to take that up
with the Company... .
DeMott recalled that the May 3 bargaining session was
held at the Respondent's plant. At that session, Union
Representative DeMott, as he tesfified;'related to Compa-
ny Representative William Hensge-that "I [DeMott] was
aware that the [wage] reviews were not going forward like
they had been, and I [DeMott] told him [Hensge ] that I
didn't see any reason why they hadn't ought to go
forward." According to DeMott, "Mr. Hensge's response
was that while we were in negotiations there would be no
wage reviews." Hensge, as DeMott explained, "didn't feel
it was proper to make reviews while we were in negotia-
tions" or "words to that effect "4 DeMott further recalled
that at the September 25 or 26 bargaining session, DeMott
"made an appeal" to,Kenneth Veil, the Company's labor
relations representative, that the unit employees "ought to
have" their wage reviews and that "not having their wage
reviews ... was creating a hardship .... " According to
DeMott, Veil replied "that they [the Company] would
consider giving the wages." When asked to explain the
Union's position regarding the merit wage reviews and
raises, DeMott testified:
Well, I [DeMott] gave- our position at the May 3rd
meeting that I didn't feel there was any reason-as I
told them-and that the regular merit reviews had
ought to be made along with their wage increases. In
fact, that they should be made. And that the Union had
no objection to those' regular wage reviews being
made....
On cross-examination, DeMott acknowledged that Re-
spondent's Exhibit 1 is the Union's initial contract
proposal; that this proposal was first presented to the
Company at the May 3 session; and that this proposal is
"blank" under the subject "Salary Grade Schedule,
Effective June 1, 1974." DeMott's "intent" at the May 3
session was "to provide economic proposals at a later
date." DeMott first presented the Union's "economic
2 The parties agreed that there was "the possibility that there may have
been a delay in some [wage review ] cases during the initial Phase I of the
Federal Wage Controls ... when it was not permissible to change any
wages ... However, as counsel for Respondent acknowledged, this
exception has no "hearing on the outcome of this case."
3 DeMott acknowledged that he is also the Union's representative for a
separate unit of the Company's "production workers" at Respondent's
Hillsdale facility
4 According to DeMott, this same subject was discussed at subsequent
bargaining sessions.
ALLIED PRODUCTS CORPORATION, RICHARD BROS . DIV. 1251
proposals" to the Company at the October 18, 1974,
bargaining session (see Resp. Exh. 2).5 The Union's written
"economic proposals" state, in part, under the subject of
"wages":
The Union demands initially any wages withheld
that would normally have been paid an employee on a
particular review date be paid now retroactive to the
employee's anniversary date.
The Union proposes Classifications and Pay Grades
effective September 1, 1974 as follows:
Billing Clerk, Grade 4, 3.76 per hr.
Prototype Clerk, Grade 4, 3.76 per hr.
Accounts Payable & Switchboard, Grade 4, 3.76 per
hr.
Accounting Clerk, Grade 6, 4.10 per hr.
Secretary, Grade 6, 4.10 per hr.
Secretary to General Plant Manager, Grade 8, 4.20
per hr.
Secretary to Staff Vice President of Mfg., Grade 8,
4.20 per hr.
New hires shall be paid twenty (20) cents below the
top of the rate for their pay grade and upon completion
of probation period shall be placed ten (10) cents below
the top of their pay grade.
The employee shall receive the top rate of his pay
grade upon completion of one hundred twenty (120)
days of employment.
The Union proposes effective September 1, 1975, a
general wage increase of twenty-five (25) cents per
hour.
The Union proposes effective September 1, 1976, a
general wage increase of twenty-five (25) cents per
hour.
Prior to the October 18 session, DeMott had made no
written requests or proposals with respect to the principal
economic issues . DeMott acknowledged that "whatever we
achieved through the bargaining table ought to include
... the old money," that ". . . any merit increases made
to that date . . . ought to have been retroactive ..."; and
that, under the Union's economic proposal, the Umon
generally "intended to make a. wage increase on the
anniversary date of the contract." DeMott further testified
on cross-examination , in part as follows:
Q. But you made no effort from March 18th, I
believe you said, when you met with the employees on
March 18th-and you found out for the first time that
Rhonda Moore had been by-passed-you made no
effort between that time and May 3rd, when you met
with the Company, to even raise the issue of the merit
reviews, is that correct?
5 The unfair labor practice charge in the instant case had been filed on
October 7, 1974.
6 Resp . Exh. 3, according to DeMott , "reflects a proposal [which he ]
made to the Company" on November 25 "for a wage schedule or wage
practice under a collective bargaining agreement that would include merit
reviews on the employee 's anniversary." And see Resp . Exh. 4, which
proposal includes, according to DeMott , the "old money" for employee
Rhonda Moore.
A. I believe that's correct.
Q. Was there any particular reason that you chose
to wait to do that?
A. Only that I hoped to persuade them at the
bargaining table of our first session to go ahead with
the reviews.
Q. As part of your negotiations?
A. Yes.6
William Hensge, director of labor relations for Respon-
dent Company, testified that appearing at the first
bargaining session on May 3 for the Union were Interna-
tional Union Representative DeMott, Local Union Repre-
sentative Caroll Lee Fogle, Local Union Committeeman
David Arnold, and Local Union Chairman Howard
Collins. Appearing for the Company were Divisional
Personnel Manager Leo Simmermeyer, General Manager
Irwin Warstler, Office Manager Charles -O'Conner, and
Hensge who was the chief spokesman for the Company at
this meeting. Hensge recalled that earlier he had been in
discussion with DeMott in order to arrange the first
meeting. And, during April, DeMott had spoken with
Hensge on the telephone. DeMott had requested certain
information pertaining to unit employees including their
names, dates of employment, salary, and wage grades. By
letter dated May 2, 1974, Hensge furnished DeMott with
the requested information (see Resp. Exh. 5).7
Hensge recalled that at the May 3 meeting, the following
discussion occurred:
Well, at some time during the course of the meeting,
Mr. DeMott asked the Company what the Company's
practice is with regard to merit increases, whereupon I
[Hensge ] responded that the Company's practice of
granting merit increases had been suspended in light of
the negotiations which we were now commencing. That
because merit increases constitute money to be given
that we felt we would hold this in abeyance pending a
resolution [of] the contract negotiations in any way
whatsoever.
According to Hensge, DeMott "suggested that we continue
to review the employees and also grant the appropriate
increases, if warranted, and to continue this practice
throughout contract negotiations." Hensge testified that, in
response, "... I [Hensge] indicated that we would give
this matter serious consideration. I [Hensge ] did not
indicate to him [DeMott] that we would favorably act
upon this, but in the event that we did, I said that we
should have an appropriate credit for it in any subsequent
negotiations." DeMott replied "to the effect that he would
give [the Company] appropriate credit." Nothing else was
said at this session pertaining to merit increases. Hensge
did not attend later bargaining sessions.
Employee Rhonda Moore testified that she was to receive her wage
review about February 27, 1974; that she did not receive the review; that
she subsequently "confronted" her office manager Charles O'Conner about
this subject; and that Moore then "told [O'Conner ] that [her] review had
been passed and he [O'Conner] told [her] to pretend like [she] hadn't
asked." Moore "just kind of laughed and that was it." Moore related her
complaint to DeMott at the March 18 Union meeting.
7 This letter was handed over to DeMott at the May 3 meeting.
1252 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Kenneth J. Veil, the Company's labor relations repre-
sentative, participated in the subsequent negotiations on
behalf of the Employer. During the negotiations, both the
Union and the Company submitted written proposals.
Agreement was reached on a number of items. On October
18, the Union first submitted its written economic
proposal. The Company responded to this proposal at the
following meeting on November 5. According to Veil, the
Company's response was, in part, as follows:
Well, we first . . . reviewed the economic situation
.. At that time, we had just laid off approximately
25 percent of the plant work force. . . . We had just
received from Ford Motor Co., one of our major
customers,-they had told us that they were suspending
all prototype work for one year.
Veil also recalled that some of the unit office clericals had
been laid off by this time. Veil, as he testified, explained to
the Union that, in management's view, the Union's
economic proposal "was completely unreasonable and way
out of line with the economy, the economic situation in the
country and also other settlements that we had been
running into . . . ." The Company made an economic
counterproposal. In addition, as Veil recalled:
DeMott asked if the Company would consider granting
merit increases. I [Veil] responded that I felt that we
were in negotiations now to determine wages, among
other things, and that it would be sort of foolish to
grant merit increases and have to come back and take
them out of the package ... s
B. Discussion
An employer's duty to bargain, imposed in Sections
8(a)(5) and 8(d) of the National Labor Relations Act,
includes an obligation not to alter established employment
conditions without first notifying and bargaining with the
representative of his employees. See, e.g., N.LR.B. v. Katz,
369 U.S. 736, 742-748 (1962). The Supreme Court stated in
Katz, supra:
Unilateral action by an employer without prior
discussion with the union does amount to a refusal to
negotiate about the affected conditions of employment
under negotiation, and must of necessity obstruct
bargaining, contrary to the congressional policy. It will
often disclose an unwillingness to agree with the union.
It will rarely be justified by any reason of substance. It
follows that the Board may hold such unilateral action
to be an unfair labor practice in violation of Section
8(a)(5), without also finding the employer guilty of
s By May 3, 1974, when the parties commenced negotiations, it appears
that unit employees Rhonda Moore and Janice Gemmill had not received
their annual meet wage reviews and/or wage increases on their respective
employment anniversary dates of February 27 and May 2, 1974 Thereafter,
during negotiations , one or more unit employees did not receive their
annual merit wage reviews and/or wage increases on their respective
anniversary dates. See Resp. Exh. 5. According to the testimony of DeMott,
only the two disputed unit employees have received their merit wage
increases.
The testimony of DeMott, Moore, Hensge, and Veil summarized above is
in large part mutually corroborative and is substantiated by uncontroverled
overall subjective bad faith. While we do not foreclose
the possibility that there might be circumstances which
the Board could or should accept as excusing or
justifying unilateral action, no such case is presented
here.
Cf. Wittock Supply Company, 171 NLRB 201 (1968),
enforced 419 F.2d 688 (C.A.D.C. 1969); The Udylite
Corporation, 183 NLRB 163 (1970), enfd. in part 455 F.2d
1357, 1365-1366 (C.A.D.C. 1971); General Motors Accept-
ance Corp., 196 NLRB 137 (1972), enfd. 476 F.2d 850, 853-
854 (C.A. 1, 1973). In General Motors Acceptance Corp.,
supra, the Board (former Chairman Miller and Member
Kennedy dissenting) stated:
The Respondent had a longstanding policy of evaluat-
ing employee performance and rewarding such perfor-
mance with wage increases. That such a program was
an existing form of compensation, and a term and
condition of employment regularly- expected by the
employees, is unquestionable. To be sure, an element of
discretion, predicated upon prior merit review, was
retained by Respondent with respect to particular
employees, but certainly not to the entire program.
Accordingly, Respondent could have continued this
program as it did in the past and not have violated the
law. Instead, upon the advent of the Union, it
suspended merit increases which it would otherwise
have given to its employees [fn. omitted].
Applying the above principles to the instant case, I find
and conclude that here, as in General Motors Acceptance
Corp., supra the Company had an established policy of
evaluating the performance of its office clerical employees
and rewarding such performance with wage increases in
amounts ranging from 10 to 25 cents per hour. The
Company's merit wage review and/or increase program
was an existing form of compensation for the office clerical
employees and a term and condition of employment
regularly expected by them.9 As recited supra, shortly
before issuance of the Board's formal certification to the
Union, management unilaterally determined to suspend its
merit wage review and/or increase program "pending a
resolution of the contract negotiations in any way
whatsoever." And, although Union Representative De-
Mott requested and urged management at the ensuing
bargaining sessions to "continue to review the employees
and also grant the appropriate increases if warranted ..."
management nevertheless adhered to its initial determina-
tion to suspend this program.
Under the circumstances, I find and conclude that the
Company's unilateral action, without prior notice to and
documentary evidence. I credit the testimony summarized above as
reasonable and trustworthy accounts of the recited events. However, insofar
as the testimony of Hensge and Veil differs with the testimony of DeMott, I
am persuaded on this record that the separate recollections of Hensge and
Veil, as recited here, are more complete and accurate.than the recollection
of DeMott.
9 Thus, unit employee Rhonda Moore promptly complained about being
by-passed for her merit wage review and/or increase on or about her
employment anniversary date. And, it is undisputed that, in the past, "Every
employee has received some form of wage increase ranging from .10 to .25"
per hour under this program
ALLIED PRODUCTS CORPORATION, RICHARD BROS. DIV. 1253
bargaining with the Union, violated Section 8(a)(5) and (1)
of the Act. Moreover, I do not fmd present here any
"circumstances which the Board could or should accept as
excusing or justifying [such] unilateral action" (Katz,
supra). Thus, counsel for Respondent Company argues in
his brief (pp. 8-11), that "the Company suspended merit
wage reviews in February 1974"; the "Union was not
certified as the bargaining representative for the Compa-
hy's office clerical employees until March 5, 1974"; and,
therefore, "the Company had no obligation to bargain with
the Union over any practice or the suspension of any
practice prior to March 5, 1974 .....10 However,
Respondent admittedly suspended this merit wage review
and/or increase program in contemplation of bargaining
with the Union. Unit employees were denied their wage
reviews both before and after issuance of the formal Board
certification. Under such circumstances, the Company
cannot alter an established term and condition of employ-
ment without first consulting with the bargaining agent
which its employees previously had selected. Cf. N.L.R.B.
v. Laney & Duke Storage Warehouse Co., Inc., 369 F.2d
859, 869 (C.A. 5, 1966).11
In addition, counsel for Respondent Company argues
(pp. 12-15) that "its actions were not motivated by anti-
union animus"; it "relied in good faith upon Supreme
Court precedent regarding the implementation or denial of
merit wage increases during contract negotiations," citing
Katz, supra; and, in sum, its actions "represented merely a
good faith attempt on its part to comply with its
understanding of the rule in Katz . . ." quoting from
General Motors Acceptance Corp., supra. However, the
Court, in agreeing with the Board in General Motors
Acceptance Corp., supra, stated: "[the Employer] could
have continued this program throughout the bargaining
period without violating the Act providing it was willing to
confer with the Union if these raises were questioned
....Likewise, the Company could readily have noticed
and consulted, however briefly, with the Union before
taking such unilateral action.
In sum, I fmd and conclude that Respondent' s unilateral
action violated the proscription of Section 8(a)(5) and (1)
of the Act. The question remains, as discussed infra, what if
any affirmative relief should be granted on the facts of this
case.
CONCLUSIONS OF LAW
1. Respondent Company is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
2. Charging Party Union is a labor organization within
the meaning of Section 2(5) of the Act.
10 The Company had filed timely objections to the representation
election which was held on December 20. The Board's Decision and
Certification issued on March 5, 1974.
11 Cf. General Motors Acceptance Corp, supra, 476 F.2d at 853-854, where
the employer argued that Sec. 10(b) of the Act barred the Board "from
finding [similar ] conduct unlawful because the original decision to stop
paying these raises was made more than six months before the complaint
was filed." The court, in agreement with the Board, noted that the
Board's finding was based "not upon the [the employer's ] initial decision to
take this action but rather upon a number of acts committed within the
]invitations period . .
3. Respondent Company violated Section 8(a)(5) and
(1) of the Act by refusing to bargain with Charging Party
Union, although requested to do so, concerning employees
in the unit classifications of secretary to the division
general manager and secretary to the vice president of
manufacturing and physical resources.
4. Respondent Company further violated Section
8(a)(5) and (1) of the Act by unilaterally discontinuing
merit wage reviews and/or increases for its office clerical
employees without prior notice to and/or bargaining with
the Charging Party Union.
5. The unfair labor practices found herein affect
commerce within the meaning of Section 8(a)(1), (5) and
Section 2(2), (6) and (7) of the Act.
THE REMEDY
In order to remedy the foregoing unfair labor practices,
and to effectuate the purposes and policies of the National
Labor Relations Act, I will direct that Respondent
Company cease and desist from engaging in the unfair
labor practices found and from engaging in like or related
conduct in violation of Section 8(a)(5) and (1) of the Act.
Affirmatively, Respondent will be directed, upon request,
to bargain collectively and in good faith with Charging
Party Union as the exclusive bargaining representative of
the employees in the unit described in fn. 1, supra; if an
understanding is reached to embody such understanding in
a written agreement; and to post appropriate notices.12
However, with respect to Respondent's unilateral sus-
pension of its merit wage review and /or increase program,
I am persuaded on this record that the affirmative remedial
relief requested by General Counsel in his complaint will
not reasonably effectuate the purposes and policies of the
Act. Here, Charging Party Union first became aware of
Respondent's unilateral action on March 18, 1974. The
Union, however, waited until the first bargaining session
on May 3 to question the Company about its suspension of
this program. Union Representative DeMott explained
that he waited until May 3 because he "hoped to persuade
[the Company] at the bargaining table of our first session
to go ahead with the reviews ." 13 Management, in turn,
responded to the Union by explaining why, in its view,
"merit increases constitute money to be given" which
should be held "in abeyance pending a resolution of the
contract negotiations , in any way whatsoever ." The parties
discussed this and related economic subjects during their
nine bargaining sessions . The Union first presented its
written economic proposals on October 18. It appears that
the topic of merit wage reviews was integrated directly and
indirectly with the various economic proposals of the
parties. Under these circumstances, I would not direct
restoration of the status quo ante or a make-whole remedy.
12 In order to insure that the employees in the appropriate unit will be
accorded the services of their selected bargaining representative for the
period provided by law, the initial period of certification shall be construed
as beginning on the date Respondent commences to bargain in good faith
with the Union as the statutory bargaining representative in the appropriate
unit. See Mar-Jac Poultry Company, Inc, 136 NLRB 785, 786-787 (1962).
13 As noted supra, by May 3, two employees bad been denied merit
reviews. One employee was denied her review on or about February 27 and
the other on or about May 2.
1254 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The parties bargained, commencing on May 3, with respect October 18 to first present its written economic proposals.
to merit wage reviews and related and integrated economic Affirmative relief would, in my view, be inappropriate.14
proposals. And the Union apparently chose to wait until [Recommended Order omitted from publication.]
the May 3 session to first raise this subject and until
14 Although the issue is not argued, it appears that Sec. 10(b) of the Act October 7, 1974. Moreover, the complaint alleges that Respondent's
precludes me from finding that Respondent's February 27 wage review by- unlawful conduct occurred on or about May 3, 1974. Cf General motors
pass of employee Rhonda Moore is unlawful. The charge was filed on Acceptance Corp, supra; N.L.R B v. Katz, supra, 369 U.S. at 746, fn. 13.